Commons Sitting of 13 February 1986

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

  ABERYSTWYTH HARBOUR BILL (By Order)
  Order for Second Reading read.
  To be read a Second time upon Tuesday 18 February.

  TEIGNMOUTH QUAY COMPANY BILL
  Order for Second Reading read.
  To be read a Second time upon Thursday 20 February.

  BRITISH RAILWAYS (No. 2) BILL (By Order)
  Order for Second Reading read.
  To be read a Second time upon Tuesday 18 February at Seven o'clock.

  COUNTY OF SOUTH GLAMORGAN (TAFF CROSSING) BILL (By Order)
  Order for Second Reading read.
  To be read a Second time upon Thursday 20 February.

  HARWICH PARKESTON QUAY BILL (By Order)
  Order for Second Reading read.
  To be read a Second time upon Tuesday 18 February.

  MILFORD HAVEN PORT AUTHORITY BILL (By Order)
  Order for Second Reading read.
  To be read a Second time upon Tuesday 18 February at Seven o'clock.

  LONDON DOCKLANDS RAILWAY (CITY EXTENSION) BILL (By Order)
  Orders for Second Reading read.
  To be read a Second time upon Thursday 20 February.

  PETERHEAD HARBOURS (SOUTH BAY DEVELOPMENT) ORDER CONFIRMATION BILL (By Order)
  Order for consideration read.
  To be considered upon Tuesday 18 February at Seven o' clock.

Oral Answers to Questions
  NATIONAL FINANCE

    Friendly Societies
    Mr. David Atkinsonasked the Chancellor of the Exchequer how many representations he has received in pursuit of the restoration of the tax exempt limits for friendly societies.
    The Economic Secretary to the Treasury (Mr. Ian Stewart): About 60 letters have been received, nearly all of which have come from one friendly society.
    Mr. Atkinson: Does my hon. Friend agree that the reduction two years ago in the tax exempt limits has had a most damaging effect upon the traditional social role of the friendly society movement, because the management costs of such modest family protection policies have made them very difficult to sell? Will he urge his right hon. Friend to use his forthcoming Budget to restore the tax exempt limit to the level at which he fixed it in 1980, namely, £2,000?
    Mr. Stewart: I have no reason to think that the changes made in the Finance Act 1984 have had any such adverse consequences. However, during the passage of last year's Finance Bill I said that I should be very glad to meet the friendly societies liaison committee to discuss these matters. That statement was followed up by a letter to the committee in July 1985. Only this week have I received its response. It has accepted my invitation to discuss the future, including tax treatment. No doubt the committee will be putting points to me on that occasion.

    Group of Five
    Mr. Hoyleasked the Chancellor of the Exchequer when Ministers of the Group of Five are due to meet next.
    The Chancellor of the Exchequer (Mr. Nigel Lawson): The Finance Ministers of the Group of Five nations meet from time to time.
    Mr. Hoyle: Will the Chancellor of the Exchequer call for an urgent meeting of the Group of Five and urge that it should follow the lead given by France and Japan in reducing interest rates, which would give a boost to British industry? Will he also discuss with it international debt, which is having a disastrous effect upon the world economy, particularly upon the economies of the developing nations? It is absolutely urgent that such a meeting should be held.
    Mr. Lawson: There was a meeting in London, under my chairmanship, only last month at which the likely trend in interest rates and international debt was discussed. There will be further discussions about international debt at the spring meeting in April of the interim committee of the International Monetary Fund. The general view is that as inflation comes down worldwide it will help to reduce interest rates.
    Mr. Blair: Does the Chancellor agree that the important thing is not to discuss problems, but to try to solve them? Will he agree that the main priorities in international co-operation are lower interest rates, high

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    growth and a solution to the problems of international debt. Will he also firmly undertake now not to allow any domestic dogma to stand in the way of international progress?
    Mr. Lawson: It is true that the difference between the two sides of the House is that the Opposition discuss problems, but we solve them.

    Exchange Rate
    Mr. Adleyasked the Chancellor of the Exchequer what factors he estimates are currently most likely to determine the exchange rate; and if he will make a statement.
    Mr. Fatchettasked the Chancellor of the Exchequer what representations he has received from British industry as to the sterling exchange rate; and if he will make a statement.
    Mr. Ian Stewart: In recent weeks the markets have been influenced by the substantial and rapid fall which has taken place in the price of oil.
    Mr. Adley: Is it not interesting that those pundits who have said that we have an oil-based economy have been confounded, in that the fall in oil prices has not been followed by a rise in interest rates, panic on the exchanges or a rundown on reserves? Is that not a matter of congratulation for the Government? As the pundits are now suggesting that my right hon. Friend the Chancellor is still considering reducing direct income tax, will he agree to confound them again by concentrating his mind entirely on raising thresholds instead?
    Mr. Stewart: My right hon. Friend the Chancellor listens carefully to all Budget representations which are made to him. I think it is indeed most welcome that there was much less disturbance recently in the markets than many had expected. That is a tribute to the strength of the economy and the sound financial policies of my right hon. Friend.
    Mr. Fatchett: Is not the reality somewhat different? Is not the fact that we have kept the exchange rate as it has been over the past few months simply a result of historically high levels of interest rates? Have not those interest rates damaged British industry, putting many firms out of business and losing many jobs? Is it not about time that the Government accepted that that is the reality of economic policy?
    Mr. Stewart: The reality is that British industry has been doing very well. In fact, exports of manufacturing industry rose by over 8 per cent. last year.
    Mr. Higgins: I join those congratulating the Chancellor on the subtle way in which he has sought to influence the complex relationship between oil prices, interest rates and the exchange rate, particularly since the beginning of the year, which would otherwise have been a difficult period. Does my right hon. Friend agree that the relationship between the dollar and sterling is not unsatisfactory, and that for exports the relationship in relation to the deutschmark is better that it was before?
    Mr. Stewart: My right hon. Friend's remarks about the handling of financial and monetary matters recently are indeed welcome. On the matter of the relative position of the exchange rate, I think that there were serious
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    imbalances, which have, to a substantial extent, been improved. I particularly welcome the strengthening of the deutschmark and the yen since the Plaza agreement.
    Mr. Tony Lloyd: The Minister told the House that manufacturing industry had not suffered by over-high exchange rates. Manufacturing industry, particularly in areas traditionally dependent on manufacturing, has suffered crippling effects because of an inability to export, which is shown up in a record manufacturing deficit on the balance of payments. Can he give a guarantee for the future that the pound will now reflect the needs of those parts of the country which depend on the export of manufactured goods?
    Mr. Stewart: The current level of the exchange rate undoubtedly gives manufacturing industry important opportunities. I only hope that it will not dissipate those opportunities by failing to control its unit costs, in particular wage costs.
    Mr. Roger King: Does my hon. Friend agree that if we were to take a great deal of notice of the Opposition's horrendous expenditure programme, as they foresee in terms of the Budget, that could have an effect on international confidence in our country?
    Mr. Stewart: I am sure that international observers are confident that the British people would never be so foolish as to elect a Government with a spendthrift programme of the kind which would involve VAT of 41 per cent. and all the consequent implications for inflation.
    Dr. McDonald: Do the Minister's remarks imply that the present relationship of the pound to the dollar and to the deutschmark constitute the Government's present exchange rate target?
    Mr. Stewart: I have to remind the hon. Lady, as one frequently has to remind Labour Members, that the Government have no target for the exchange rate.

    Oil Prices (Economic Effects)
    Mr. Beithasked the Chancellor of the Exchequer whether he will make a statement on the effect that falling oil prices have had on the British economy.
    Mr. Lawson: The overall effects of falling oil prices on output and inflation are expected to be broadly neutral—if anything, slightly beneficial.
    Mr. Beith: Has the Chancellor recovered sufficiently from the threat to his tax-cutting plans presented by the situation to recognise that it is an opportunity for British manufacturing industry to export, so long as it is not penalised by high interest rates?
    Mr. Lawson: I have explained on a number of occasions that there are swings and roundabouts when the oil price falls. One of the things that suffers is the scope for reductions in taxation, and one of the beneficiaries, as the hon. Member has rightly pointed out, as I have done in the past, is industry, particularly manufacturing industry, whose fuel costs are diminished.
    Mr. Ralph Howell: Is my right hon. Friend aware that many Conservative Members are becoming increasingly impatient for large tax cuts, and that we hope that the fall in oil prices will not be used as an excuse for not considerably raising tax thresholds? Does he accept that

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    the only real way in which we shall be able to find the elbow room for substantial tax cuts is by reducing over-manning in the public sector, particularly in local government and the Health Service?
    Mr. Lawson: I pay tribute to my hon. Friend for the consistent campaign that he has waged over the years for the reduction of overmanning and waste in the public sector. He is right to say that we must always be vigilant. We have achieved a great deal, but there is scope for achieving more, particularly in local government and the Health Service. As for the reduction in the tax burden, he and I are again at one in thinking that it would be highly desirable and beneficial for the British economy and for employment if we could reduce the burden of taxation generally and of income tax in particular. Substantial losses of North sea oil revenue as the result of a sharp fall in the oil price are not an excuse but a fact.
    Mr. Campbell-Savours: Does not the fall in oil prices only confirm the point that the Labour party has been making over the past five years, that far too much reliance has been placed on the development of oil in the North sea and far too little reliance on the development of manufacturing industry within the United Kingdom? Why cannot the Chancellor learn that lesson, and even at this late stage begin to reinvest in British industry?
    Mr. Lawson: The position is quite to the contrary. It is the hon. Gentleman's Front Bench that is in favour of joining forces with the OPEC cartel, so as to keep up the price of oil artificially, which would be contrary to the interests of manufacturing industry. That was clearly stated in a letter to me from the hon. Member for Thurrock (Dr. McDonald).
    Mr. Ian Lloyd: I congratulate my right hon. Friend on the Government's effective, well-judged and, above all, sustained attempt not to join OPEC in any sense. Does he agree that nothing does more damage to the capacity of the free market to adjust to changed conditions of supply and demand than an attempt to maintain either fixed supply levels or fixed price levels?
    Mr. Lawson: My hon. Friend is right, and in all fairness I have to add to my previous remarks that it is not merely the policy of the Labour Opposition that Britain should join forces with OPEC, but also the official policy of the SDP and, as far as I am aware, that of the Liberal party as well. The right hon. Member for Plymouth, Devonport (Dr. Owen) has made this clear. We have no intention of joining OPEC.
    Mr. Skinner: Does the Chancellor of the Exchequer recall hearing the hon. Member for Norfolk, North (Mr. Howell) refer to sacking people in the National Health Service and local government? What is the economic sense in stopping the payment of wages to people working in the National Health Service and local government, who are paid for by the ratepayer and the taxpayer, only for them to go to the unemployment benefit office to receive money from the taxpayer in another form? It is costing £24 billion to finance—
    Mr. Speaker: Order. The question is about oil prices.
    Mr. Skinner: Yes, it is. The hon. Member for Norfolk. North, raised this matter and he was not stopped, Mr. Speaker. The Government are paying £24 billion to finance that pile of human misery known as the dole queue. What is the sense in adding to it?
    Mr. Lawson: I am not sure whether that question is in order, Mr. Speaker, but I shall be brief. Overmanning in many local authorities, especially Socialist local authorities, is a main cause of unnecessarily high rates, which are causing great damage to small businesses in those areas.
    Sir Peter Tapsell: Will my right hon. Friend remind the House that it is irrelevant however many of our Opposition political parties decide to join OPEC, because the fundamental national qualification to join is that 80 per cent. of the gross national income should be from oil. We have not yet reached that point.
    Mr. Lawson: Nor shall we. If my hon. Friend had been his normal attentive self, he would have heard that I talked about joining forces with OPEC. The Opposition wish to agree with OPEC in cutting our production, which is effectively joining the cartel, although, technically, as my hon. Friend has pointed out, we would not be eligible for membership.

    Interest Rates
    Mr. Formanasked the Chancellor of the Exchequer if he will make a statement on interest rates.
    Mr. Lawson: Short-term interest rates are held at whatever level is necessary to maintain sound financial conditions, but no higher.
    Mr. Forman: Does my right hon. Friend agree that it is vital to the future of the economy to achieve lower and more stable interest rates? Towards that objective, at a time when the oil crisis is considerably less and the pound is competitive with the deutschmark, would it not be helpful to consider urgently the possibility of joining the exchange rate mechanism of the European monetary system?
    Mr. Lawson: That is a matter that we keep regularly under review. The factors to which my hon. Friend has referred obviously must be taken into account.
    Mr. Wrigglesworth: If the Chancellor will not give an assurance on that, will he give an assurance that he will respond positively to the initiative taken by President Reagan in calling for internatinal monetary reform? Will he respond to the appeal for a conference? Will he cooperate with the American Administration in seeking to reduce interest rates to achieve more stable exchange rates?
    Mr. Lawson: I noted the passage in President Reagan's "State of the Union" address in which he asked the American Treasury Secretary to examine whether it would be a good idea to hold an international monetary conference. I believe that there are great dangers 3n holding an international monetary conference when we Oo not know what proposals to put to the conference. However, if there is a way to build on the Plaza agreement and inject some stability into the foreign exchange market, I would welcome it.
    Mr. Sackville: Is my right hon. Friend aware of the country's widespread desire for lower interest rates? Is he aware of the complete lack of public understanding about why interest rates must remain so high?
    Mr. Lawson: Everyone would like lower interest rates, except perhaps those who are savers and depositors in

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    building societies and banks. No doubt they are content with their return. It is much better to get the return that those people receive today than to be cheated of their savings as they were under the Labour Government, when there was a negative real rate of return.
    Mr. James Lamond: Are there any lines of communication between the ivory towers of the Treasury and the embattled Departments of Employment and of Trade and Industry, which are faced with increasing unemployment, including a large increase last month that especially affects the north-west, which is dependent on manufacturing industry? Does the Chancellor of the Exchequer realise that in the complacent world in which he lives, people are unemployed because of the Treasury's policies?
    Mr. Lawson: To answer the first part of the hon. Gentleman's question, the Government are one harmonious whole—
    Mr. Canavan: They have fallen into a hole.
    Mr. Speaker: Order.
    Mr. Lawson: Unemployment is a matter not for complacency but for concern, and that is why the Government have taken many measures to address the problem directly. The hon. Gentleman will recall that in my Budget last year I restructured national insurance contributions for employers and the lowest-paid employees, which came into force only four months ago. Therefore, we have not seen its full effect. I also announced the two-year youth training scheme, which will not come into force until April this year, but which I believe will have a beneficial impact.
    Mr. Yeo: Does my right hon. Friend agree that an absolute condition for lower interest rates is a low and sustained low rate of inflation, and that if inflation falls to 3 per cent. this year there will be a good prospect of reducing interest rates? Does that not contrast badly with the prospect if the policies espoused by the Labour party and the alliance were followed?
    Mr. Lawson: My hon. Friend is right. The policies of the Opposition, who propose an extra £24 billion of public expenditure, would not merely cause a substantial increase in taxation and a VAT rate of 41 per cent., as my right hon. Friend the Chief Secretary said yesterday, but would be highly inflationary, which would certainly mean higher interest rates.
    There is another factor. The markets are worried that our unit labour costs are increasing faster than those of other countries and that, therefore, we may be becoming less competitive. That tends to put pressure on the pound from time to time and requires interest rates to be higher than they would otherwise be. Therefore, if wage increases were lower, there would be less pressure for interest rates to remain high.
    Mr. Hattersley: Why are British interest rates so much higher than those of our OECD competitors?
    Mr. Lawson: I gave the answer to that a moment ago.

    Government Services (Tenders)
    Mr. Franksasked the Chancellor of the Exchequer what is his policy regarding competitive tendering for Government services; and if he will make a statement.
    The Chief Secretary to the Treasury (Mr. John MacGregor): Our policy is to contract work out of the public service wherever this is commensurate with sound management and provides good value for money for the taxpayer. As the House knows, Government Departments are now required to test the market in specified areas.
    Mr. Franks: Does the Minister accept that the scope for competitive tendering for Government services is almost infinite? Does he further accept that many Conservative Members are rather impatient with the progress being made?
    Mr. MacGregor: In some key areas of central Government Departments the proportion is already high: in cleaning, it is 84 per cent.; in laundry, 73 per cent.; and in maintenance, 81 per cent. We are pursuing the policy, but I agree with my hon. Friend that there is considerable further scope. That is why I recently initiated a multi-departmental review to extend the application of competition and improve ways in which the policy is delivered.
    Mr. Meadowcroft: What guarantee does the Minister require against bankruptcy in the tendering firms? Does he accept that if they go bankrupt it is almost impossible for the public sector to take back the services?
    Mr. MacGregor: It is not impossible. I know of one case where a company was removed from its contract because of inefficient performance. The service specified in the contract and the company's performance are thoroughly monitored, and the contracts contain penalty or break clauses to cover the eventuality that performance does not match specification, or the sort of event to which the hon. Gentleman referred.

    Share Ownership
    Mrs. Virginia Bottomleyasked the Chancellor of the Exchequer if he will make a statement on the proportion of the population in the United Kingdom who own shares; and how this compares with other Organisation for Economic Co-operation and Development nations.
    Mr. Lawson: The number owning shares directly is at least 3 million, which is about 7 per cent. of the adult population, and recent market research suggests that the figure may be much higher. I regret that comparable figures are not available for most other OECD nations.
    Mrs. Bottomley: While thanking my right hon. Friend for his reply, may I ask for confirmation that although individual share ownership may have more than doubled since 1979, there is still a long way to go in the pursuit of wider share ownership? Does he agree that many individuals, especially employees, who bought shares as a result of the Government's privatisation policies are in great danger from a Government formed by the Labour party, especially if its bite is anything like as bad as its bark?
    Mr. Lawson: My hon. Friend is on to an important point, to which we need a clearer answer than the one we have received so far. The right hon. Member for Birmingham, Sparkbrook (Mr. Hattersley) has said that if by any mischance the Labour party were to get into office and renationalise any companies, the shares would be bought out at the original selling price. That is

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    expropriating the money of millions upon millions of pensioners and holders of life assurance policies. Those pensioners have a right to know which companies the right hon. Gentleman wishes to renationalise and why he intends to rob them in that way.
    Mr. Ashley: Is the Chancellor aware that the only reason why more people in Britain own shares is that he is selling national assets to pay tax bribes? All that waffle from him and the hon. Member for Surrey, South-West (Mrs. Bottomley) is false propaganda. The British people want more jobs, not wider share ownership.
    Mr. Lawson: We should like to see more jobs, but that does not conflict with wider share ownership. They are in harmony, as those employees who are members of over 1,000 existing employee share schemes would fully bear out.

    Training Expenditure (Tax Relief)
    Mr. Lawlerasked the Chancellor of the Exchequer if he has any plans to seek to provide tax relief on expenditure on training.
    The Minister of State, Treasury (Mr. Peter Brooke): Tax relief is already available for most expenditure on training.
    Mr. Lawler: In acknowledging the need for a significant improvement in training for industry, may I ask my hon. Friend to consider extending tax relief for training and allowing all capital expenditure related to training as a relief against tax in the year of expenditure?
    Mr. Brooke: I fear that I cannot give my hon. Friend any encouragement in that direction. The subject is essentially one for my right hon. Friend's Budget.

    Budget Representations
    Mr. Canavanasked the Chancellor of the Exchequer what representations he has received about the fiscal measures to be proposed in his forthcoming Budget.
    Mr. Brooke: A large number on a variety of subjects, though I cannot anticipate my right hon. Friend's Budget statement.
    Mr. Canavan: Since coming to power the Government have seen fit to hand out over £20 billion in tax concessions to the richest 5 per cent. of the population. Is it not about time that taxation for those people was increased to bring about more public investment in real jobs for some of the record number of people who have been thrown out of work by the Government's economic policies?
    Mr. Brooke: I am not going to get into an argument with the hon. Gentleman about the figures that he quotes, but I shall treat his representation as yet another that we have received.
    Sir William Clark: Does my hon. Friend agree that if, in the next Budget, there is an increase in public expenditure of £24 billion which is not funded by a 41 per cent. VAT rate, the only other way that it can be funded is by a 20 per cent. increase in the standard rate of taxation? Does my hon. Friend agree that that would mean a married man earning over £66 per week would pay to the Exchequer 59p for every extra pound?
    Mr. Brooke: That sounds about right.
    Mr. Robert Sheldon: Can the Minister estimate how much the Chancellor of the Exchequer ever listens to his Cabinet colleagues? When he comes to look at direct tax cuts, will he ensure that some of those Cabinet colleagues are listened to and that the money is spent on raising tax thresholds rather than on reducing the basic rate?
    Mr. Brooke: I have known my right hon. Friend for a long time. I have always found him extremely attentive and sensitive to the points put to him.
    Mr. Crouch: While my hon. Friend considers representations about changes in fiscal rates, will he not neglect the problems facing the National Health Service when he discusses matters with his right hon. Friend the Chancellor of the Exchequer? Is my hon. Friend aware that, notwithstanding considerable increases in real resources to the National Health Service since 1979, we still cannot provide full, proper and good health care and the payment of increased wages and salaries in that important service? Will my hon. Friend remember, too, as he talks to his right hon. Friend the Chancellor of the Exchequer, that any decline in the provision of resources to the NHS will mean inevitable decline?
    Mr. Brooke: I can assure my hon. Friend that my right hon. Friend the Chancellor of the Exchequer heard every word that he uttered.

    European Monetary System
    Mr. Ashdownasked the Chancellor of the Exchequer what studies his Department has done into he effects of joining the European monetary system.
    Mr. Ian Stewart: The Treasury submitted a memorandum to the Select Committee on the Treasury and Civil Service in June 1985.
    Mr. Ashdown: Is the Minister aware that this week the CBI has come out formally in favour of joining the EMS? The Government continue to say that they are in principle in favour of joining the system when the time is right. As the exchange rate has moved through almost every conceivable position on the scale during the past year, will the Minister set out the criteria that the Government use to judge when the time will be right?
    Mr. Stewart: I am aware that Sir Terence Beckett said that he thought it would be a suitable time to join the EMS in relation to the current levels of the exchange rate. However, there are many other factors that have to be taken into account concerning the conduct of financial policy generally. We have always said that there are arguments both in favour and against joining the system and that we would not want to join unless we were convinced that the balance was clearly in favour of so doing.
    Mr. Budgen: In view of the widespread and genuine misunderstanding about the Government's present monetary policy, will the Government give an undertaking that there will be a definitive statement on monetary policy in the Budget?
    Mr. Stewart: I think that my hon. Friend will have to wait and see. My right hon. Friend the Chancellor of the Exchequer, who is sitting beside me, will no doubt have heard what he said.

    Manufacturing Output
    Mr. Evansasked the Chancellor of the Exchequer if he will make a statement on the growth of the economy as it relates to manufacturing output.
    Mr. MacGregor: Manufacturing output has grown by 11 per cent. since June 1983. We are now experiencing the longest period of uninterrupted growth of manufacturing output since 1971.
    Mr. Evans: The Chief Secretary has been highly selective in his choice of years. Will he say when he expects manufacturing output to reach the level that prevailed in May 1979?
    Mr. MacGregor: The years were not at all selective. I thought it entirely reasonable to pick the figures since the last general election, when the country returned the Government to power. My choice of years shows the progress that we have made since then. As I said last night, there was obviously a major worldwide recession between 1979 and 1981. Since then we have been making good progress on manufacturing output.
    Mr. Fletcher: Does my right hon. Friend agree that the best way to improve and maintain manufacturing output and productivity is to minimise wage awards, and that the best thing that the Treasury might do towards that would be to raise tax thresholds as far as possible?
    Mr. MacGregor: I shall not comment on any tax issue that my hon. Friend raises. There are two main conditions. The first condition is the maintenance of a low inflation policy, which enables our manufacturing sector to remain competitive. The second consideration, as my hon. Friend has rightly said, is to ensure that we keep unit labour costs in manufacturering as low as possible. It is worrying that at present they are higher than those of some of our competitors.
    Mr. Lofthouse: Why has unemployment increased since last year's so-called Budget for jobs?
    Mr. MacGregor: As my right hon. Friend the Chancellor of the Exchequer has made clear, the three major ingredients of last year's Budget have not had time to take effect— [Interruption.] There is nothing funny about that. The national insurance contributions changes of the 1985 Budget came through only four months ago. A second major ingredient, the two-year youth training scheme, comes into operation in April because it requires time to plan.
    Mr. Dykes: With the manufacturing base in Germany being three times as large as that in Britain, will my right hon. Friend tell us what the interest rate to industrial and commercial borrowers in Germany now is and when we shall be able to reduce our rate to that level as a result of my right hon. Friend the Chancellor of the Exchequer's brilliantly adroit management of the economy?
    Mr. MacGregor: Obviously there are many factors that operate on interest rates. One of the key ingredients is to maintain the pressure on inflation. To ensure the right monetary conditions, interest rates are as they are to keep the pressure on inflation.
    Mr. Terry Davis: The Chief Secretary has told us when the measures in the last Budget will come into effect. Will he now tell us when we shall see the jobs?
    Mr. MacGregor: We debated this last night. There are many factors causing the present levels of unemployment, including the demographic factors. We have made significant progress in the economy and there has been continuous economic growth in the last four years. Without that, we would be in a more serious situation. It is important that we maintain these policies.
    Mr. Wrigglesworth: Does the Chief Secretary agree that if the Chancellor of the Exchequer has available a fiscal adjustment of some £3·5 billion, as against the £1 billion forecast, he will be in a much more powerful position to help manufacturing industry? Will the Chief Secretary therefore tell us whether we should give any credence to the reports that a Secretary of State has calculated, on the basis of his Department's forecasts, that there will be a £3·5 billion fiscal adjustment?
    Mr. MacGregor: The hon. Gentleman will clearly have to await the Budget statement, which is not very far away. With regard to jobs, about which I was asked, I make the point that in the last 18 months more new jobs have been created in this country than in the whole of western Europe put together.

    Inflation
    Mr. Robert B. Jonesasked the Chancellor of the Exchequer what is the average monthly rate of inflation from June 1983 to date; and how it compares with that from May 1979 to June 1983 and October 1974 to May 1979, respectively.
    Mr. Brooke: Between June 1983 and December 1985 the annualised increase in the retail prices index was 5·1 per cent. This compares with 11·3 per cent. between May 1979 and June 1983, and 15·1 per cent. between October 1974 and May 1979.
    Mr. Jones: I congratulate my hon. Friend on the progress that he has just enunciated. Since the inflation rates in West Germany, the United States and Japan remain lower than ours, is it not the case that we need to keep up the pressure on bringing down inflation to be able to earn our jobs and our profits from trade abroad?
    Mr. Brooke: I will pass on my hon. Friend's congratulations to my right hon. Friend. It is very much my right hon. Friend's policy that we should maintain continued downward pressure on inflation.
    Mr. Flannery: Is it not a fact that the greater the number of people who are sacked the more inflation is held steady? The real barometer should be the number of people in the country who are unemployed. The number of people who are on YTS and similar schemes in order to keep young people off the unemployed list proves that there are at least 4 million people unemployed in the country. It does not give much comfort to those people to tell them that the inflation rate is being kept steady.
    Mr. Brooke: The hon. Member's economic theory is a little complex, but the Government share his concern to seek to bring down the level of unemployment.
    Mr. Forth: Does my hon. Friend agree that the marked disparity in the inflation figures between the period of this Government and the period when the Opposition were last in power demonstrates conclusively that any return to the sort of policies advocated by the Opposition will almost certainly lead to a trebling of inflation rates?
    Mr. Brooke: The lowest inflation rate achieved by the Labour Government between 1974 and 1979 was above the highest rate since the last election. The Opposition pay lip-service to the idea of suppressing inflation, but the policies they espouse in opposition and the actions they take when they are periodically in government lead ineluctably to the debauching of the currency.
    Mr. Penhaligon: Will the Minister name those of our major industrial competitors that currently have a higher level of inflation than us?
    Mr. Brooke: I acknowledge that there are competitor countries that have a lower rate of inflation. That is why we are maintaining our pressure on inflation.

    Public Sector Borrowing Requirement
    Mr. Yeoasked the Chancellor of the Exchequer what is his latest estimate for the public sector borrowing requirement for 1985–86.
    Mr. Lawson: I shall be giving my latest estimate in my Budget statement.
    Mr. Yeo: Bearing in mind that the PSBR may act as a constraint on the amount of any tax reliefs which my right hon. Friend is able to grant this year, will he assure the House that, if there are any reliefs, they will be concentrated in the form of higher tax thresholds and lower employee national insurance contributions, as these are by far the most effective way of stimulating employment?
    Mr. Lawson: Cases can be made for many things. My hon. Friend will recall that in my Budget last year I did both of the things to which he referred—I increased tax thresholds and lowered employees' and employers' national insurance contributions for the low-paid. Looking forward to this year's Budget, it is quite clear that scope for manoeuvre has been affected by the sharp fall in our North sea oil revenue.
    Mr. Pike: Bearing in mind what the Chancellor expects the public sector borrowing requirement to be, will the right hon. Gentleman allow councils to spend more of their receipts from the sale of assets to meet the problems that they face and to get people back to work?
    Mr. Lawson: One thing is essential, and is clearly understood and agreed by all of the major industrial nations. There is a need to keep firm control of public expenditure. Within that control, we allow local authorities to spend their housing receipts, but over a period of time. Of course, if there were a Labour Government there would be no housing receipts because no council houses would ever be sold.

  PRIME MINISTER

    Engagements
    Mr. Bellinghamasked the Prime Minister if she will list her official engagements for Thursday 13 February.
    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 this House, I shall be having further meetings later today. This evening I hope to have an audience of Her Majesty the Queen.
    Mr. Bellingham: Has my right hon. Friend had a chance to see today's reports, which say that the urban aid programme has been underspent by more than £100 million during the past three years? Is it any wonder that the prudent low-spending authorities feel aggrieved by the recent rate support grant settlement, which shifts money from them to the inner cities?
    The Prime Minister: I have seen the report to which my hon. Friend refers. It is not true, because the Department of the Environment redirected the resources to other programmes, thus benefiting the inner cities. Some was directed to additional urban programme schemes, and some was directed to derelict land grant, which meant that most of the surplus was used up. However, I understand the feeling of the shire counties that they have to endure higher rates because money was deliberately shifted towards inner cities on the rate support grant.
    Mr. Hattersley: What is the right hon Lady's explanation of the Gallup survey, which shows that only 6 per cent. of the population think of her as a caring Prime Minister?
    The Prime Minister: The right hon. Gentleman is aware that I do not look at opinion polls. I do not explain them either. The polls that I am interested in are those done on election day, and we have not done too badly at them.
    Mr. Hattersley: As the right hon. Lady is too reticent to offer an explanation of her own, might I suggest that the reason why the country thinks she does not care—[HON. MEMBERS: "Question."] Will she consider the possibility of the country thinking that she does not care because she has presided over unemployment which has trebled, poverty which has doubled,
    increases in homelessness, cuts in overseas aid and £2·50 being stolen each week from the pensioner?
    The Prime Minister: We have presided over a Health Service which is far better than anything that the right hon. Gentleman had, we have kept our pledges to pensioners, output is at an all-time record, our manufacturing industry is doing well and growth has been going on for six successive years. That is the outlook of a caring Government.
    Mr. Hattersley: The Prime Minister heard five examples of her uncaring policies and uncaring style. Is she prepared to deny one of the facts that I offered her?
    The Prime Minister: I will deal with the facts that the right hon. Gentleman offers, or at any rate with his interpretation of them. The right hon. Gentleman has absolutely no idea how to go about wealth creation or the creation of more jobs, whereas we have the highest and best record of job creation in the whole of Europe during the past two years.
    Sir Anthony Kershaw: Bearing in mind the students' lobby of yesterday and the intense desire of institutes of higher education to expand and improve, will my right hon. Friend nevertheless remember that there are today 70,000 more students in higher education than there were in 1980—the highest number and the highest proportion of the relevant age group ever?
    The Prime Minister: I am grateful to my hon. Friend. Students have the best deal through student grants and the opportunities available to them exceed those available previously, as the figures show.
    Mr. Gouldasked the Prime Minister if she will list her official engagements for Thursday 13 February.
    The Prime Minister: I refer the hon. Gentleman to the reply that I gave some moments ago.
    Mr. Gould: In the interesting speeches made by her colleagues and would-be successors at Blackpool last weekend, did the Prime Minister notice the passage in the speech of her right hon. Friend the Secretary of State for Energy in which he asserted that unemployment can be brought down provided appropriate policies are pursued? Is there such an alternative after all, and why does the Prime Minister not take it?
    The Prime Minister: Unemployment can be brought down by the creation of more jobs. In the last two years 700,000 more jobs have been created. That is the way to tackle the problem. It is being tackled. The proportion of the population of working age in work in this country greatly exceeds that in France, Germany, and Italy.
    Mr. Stokes: Has my right hon. Friend had time to read today's excellent leader in The Times setting out her achievements and pointing out what still remains to be done under her leadership? Does it not show that, in spite of what other newspapers and political commentators have said during the past two weeks, The Times still has a fair sense of political priorities?
    The Prime Minister: I am delighted to confirm my hon. Friend's conclusion and I am grateful to The Times for an extremely sensible leader.
    Mr. Steel: The Secretary of State for Trade and Industry told the House yesterday that General Motors had not yet made formal proposals to purchase Leyland Trucks. In view of that, will the Prime Minister join me in recognising the tremendous and successful efforts made by the employees and the management to turn the Land Rover division into a profitable concern? Will she therefore send a message of support to the "Keep Land Rover British" campaign? Will she bat for Britain and back a profitable and successful British product?
    The Prime Minister: Both the Government and the taxpayer have batted for the whole of British Leyland by putting in over £2 billion of taxpayers' money and on top of that guaranteeing the amount it takes out in loans under the Varley-Marshall assurances, which amount to some £1·6 billion. That is the faith that the British taxpayer has shown. We are anxious to have a prosperous car and truck industry and we shall take the steps that seem to us most appropriate to achieve it.
    Mr. Kenneth Carlisle: Does my right hon. Friend agree that the recent fall in oil prices is an opportunity for this country, rather than a misfortune? Will it not lead to greater economic activity in growing markets? Is it not a challenge which our manufacturing industry welcomes?
    The Prime Minister: Yes, it is an opportunity. It has other adverse effects on this country which it does not have on our competitors such as the United States, Japan and Germany. They will gain more from a fall in oil prices than we will. Undoubtedly it will be helpful to our
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    manufacturing industry and will reduce its costs. In addition, it will keep down unit labour costs, without which the Germans and the Japanese will get a bigger proportion of overseas trade.
    Dr. McDonaldasked the Prime Minister if she will list her official engagements for Thursday 13 February.
    The Prime Minister: I refer the hon. Lady to the reply that I gave some moments ago.
    Dr. McDonald: Does the Prime Minister agree with one of her many former Cabinet colleagues, the right hon. Member for Cambridgeshire, South-East (Mr. Pym), that in terms of curing unemployment her policy has not worked?
    The Prime Minister: Had policies been put forward from the Opposition, and had they been carried into effect, unemployment would be infinitely worse than it is and there would be precious little prospect for growth or increased prosperity in the future.
    Mr. Gerald Howarthasked the Prime Minister if she will list her official engagements for Thursday 13 February.
    The Prime Minister: I refer my hon. Friend to the reply that I gave some moments ago.
    Mr. Howarth: Is my right hon. Friend aware of the growing public anger and frustration at the escalation of violence and mindless crime? Is she further aware that at this time yesterday evening my home was attacked by three villians while my wife and young son were inside? Is it not time that we considered tougher measures to deal with the problem, and reintroduced the birch?
    The Prime Minister: I am sure that the House will wish to express great sympathy with my hon. Friend over the personal crime which his family suffered. He will be aware that the Home Secretary has just made an order available for the police, and that the Court of Appeal has made it clear that firm sentences should be imposed for crimes of violence. I do not believe that my hon. Friend's proposal would ever pass through the House.
    Mr. Randall: Does the Prime Minister recall that I have written many letters to her about a constituent, Mr. Ian Lynch of Benedict road, Hull, who was one of the Army bandsmen severely injured in the Hyde park bombing incident? Is she aware that neither Mr. Lynch nor many of the other Army personnel have yet received full compensation for those terrible injuries received in 1982? Will she instigate an investigation by the Criminal Injuries Compensation Board to see whether those matters can be dealt with more expeditiously?
    The Prime Minister: As the hon. Gentleman is aware, we answered fully, and the doctors and authorities have looked carefully into that case. Unfortunately, they were not able to go further than they have already gone. We shall certainly look into speeding up matters.
    Mr. Michael Brownasked the Prime Minister if she will list her official engagements for Thursday 13 February.
    The Prime Minister: I refer my hon. Friend to the reply that I gave some moments ago.
    Mr. Brown: Does my right hon. Friend agree that, if the Chancellor of the Exchequer has room for manoeuvre

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    in the Budget, it would be better for people on average earnings, especially the heads of households, to reduce the rates of tax rather than to increase tax thresholds?
    The Prime Minister: I am sure that we would like to have the choice. My hon. Friend will be aware that in view of the falls in oil prices we must. above all, have a prudent, cautious Budget. I am sure that my right hon. Friend the Chancellor of the Exchequer will take into account the choice of my hon. Friend when he draws up his Budget.
    Mr. Freudasked the Prime Minister if she will list her official engagements for Thursday 13 February.
    The Prime Minister: I refer the hon. Gentleman to the reply that I gave some moments ago.
    Mr. Freud: Will the Prime Minister, having taken such egregious pleasure in seeing off two Labour Administrations and three Labour leaders, now consider seeing off her 18th Cabinet member, the Secretary of State for Education and Science, and replacing him with someone to whom the teachers can talk, who understands the problems of the children, and who will consider them with faith and understanding?
    The Prime Minister: My right hon. Friend the Secretary of State for Education and Science has done more than any other previous Minister to raise the standards of education. I deeply resent the hon. Gentleman's implications made against him.
    Mr. Nicholls: Has my right hon. Friend had a chance to consider the Manpower Services Commission report yesterday, which shows that last year between 20,000 and 30,000 young people chose a place on the dole rather than a place on a youth training scheme? Does she agree that, while they are entitled to make that choice, they should not have been entitled to do so at the taxpayers' expense?
    The Prime Minister: I can see my hon. Friend's point vividly. I hope that those young people will think again and accept a place on the YTS, especially since it has been extended to two years. It will give them a much better training than any that they would be likely to get in any other way, and a much better prospect of a job in future.
    Mr. Allan Robertsasked the Prime Minister if she will list her official engagements for Thursday 13 February.
    The Prime Minister: I refer the hon. Gentleman to the reply that I gave some moments ago.
    Mr. Roberts: Has the Prime Minister had time to read the Valentine card which was delivered to 10 Downing street this morning by the nurses? [Interruption.] The hooligans on the Back Benches do not want to listen to what the nurses are saying about the Health Service. That Valentine card asks the Prime Minister to put some heart back into the Health Service, and accuses her of turning hospitals into supermarkets. As 93 per cent. of the population believe that the Prime Minister will listen to reason, may I ask her to listen to the reason of the nurses, who know better than anybody else that the Health Service is not safe in her hands?
    The Prime Minister: I did not think that it was Valentine's day today, but I think that the hon. Gentleman will agree that we have put a lot of resources into the Health Service—
    20 per cent. more in real terms than any other previous Government. This means more doctors, more nurses, more patients treated—in-patient and out-patient—and no previous Government can hold a candle to that record.
    Mr. Roger Kingasked the Prime Minister if she will list her official engagements for Thursday 13 February.
    The Prime Minister: I refer my hon. Friend to the reply that I gave some moments ago.
    Mr. King: During her very busy day, will my right hon. Friend have time to relax, perhaps make a cup of tea, and reflect, with a degree of satisfaction, on the fact that the TUC has at long last conceded that the democratic right of union workers is to have a postal ballot, and that it has also decided to accept financial assistance towards that ballot?
    The Prime Minister: That is very good news. It was our intention to give the ordinary members of the trade union much more control over their bosses. I am delighted that that has now been recognised.

Business of the House
Mr. Roy Hattersley: Will the Leader of the House state the business for next week?
The Lord Privy Seal and Leader of the House of Commons (Mr. John Biffen): Yes, Sir. The business for next week will be as follows:
MONDAY 17 FEBRuARY—Timetable motion on the Gas Bill.
Second Reading of the Animals (Scientific Procedures) Bill [Lords].
TUESDAY 18 FEBRUARY—Remaining stages of the Drug Trafficking Offences Bill.
Motion on the Representation of the People (Variation of Limits of Candidates Election Expenses) Order.
The Chairman of Ways and Means has named opposed private business for consideration at seven o'clock.
WEDNESDAY 19 FEBRUARY — Opposition Day (8th Allotted Day). Until about seven o'clock there will be a debate entitled "The Strategic Defence Initiative". Afterwards there will be a debate entitled "The Treatment of Private Tenants". Both debates will arise on Opposition motions.
Motion on the prevention of Terrorism (Temporary Provisions) Act 1984 (Continuance) Order 1986.
There will be a debate on a motion to take note of EC document No. 7163/85 relating to new Community energy objectives.
THURSDAY 20 FEBRUARY-There will be a debate on a motion to take note of the Government's expenditure plans 1986–87 to 1988–89 (Cmnd. 9702).
FRIDAY 21 FEBRUARY-Private Members' Bills.
MONDAY 24 FEBRUARY-There will be a debate on the Royal Air Force on a motion for the Adjournment of the House.
[Debate on Wednesday 19 February
Relevant Document
7163/85 Community energy objectives
Relevant Report of European Legislation Committee
HC 5-xxvii (1984–85) Paragraph 2.]
Mr. Hattersley: I have two questions. When is the House to have the opportunity to debate the report of the Select Committee on Employment on the long-term unemployed? Secondly will the right hon. Gentleman confirm absolutely that none of the proposals in the Home Secretary's consultative document on immigration procedures will be implemented until the subject has been debated in this House?
Will he understand now that there are many hon. Members on both sides of the House who are not prepared to sacrifice the long-established right to make representations on behalf of their constituents to the Minister himself, rather than be fobbed off on to his junior officials?
Mr. Biffen: On the second point that the right hon. Gentleman raises, I will refer the specific points to my right hon. Friend the Home Secretary. I understand the right hon. Gentleman's concern.
As to the first point regarding the request for a debate on the report of the Select Committee on Employment, I
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think that we should wait until the Government have made their observations, and thereafter we can consider the matter through the usual channels.
Sir John Farr: When will we have a debate on the Select Committee system? When will we have the opportunity to consider the activities of some Select Committees, such as the Select Committee on Defence, which seems to be greatly exceeding the powers granted to it by a Standing Order of the House? Many other matters would warrant an early debate as well.
Mr. Biffen: I am sure that my hon. Friend is right in saying that the growing volume and quality of work of the departmental Select Committees are causing interest in the House. However, there is not that amplitude of Government time that would enable such a debate to take place. I have no doubt that this matter could well feature in a private Member's motion.
Mr. Jack Ashley: Is the right hon. Gentleman aware that, now that the logjams of Crown immunity in hospitals have been broken by the Department of Health and Social Security, we need to end immunity in all Crown establishments such as prisons where it is right to imprison criminals but wrong to food-poison them? Will the right hon. Gentleman look at early-day motion 408?
[That this House welcomes Her Majesty's Government's decision to abolish Crown immunity from food hygiene legislation in hospital kitchens, following revelations of dirty and dangerous conditions; believes that hospital workers need the same protection as hospital patients; urges the Government to make health authorities subject to health and safety legislation; notes the standards of kitchen hygiene in other Crown establishments such as prisons are kept secret; and calls upon Ministers to make all establishments for which they are responsible, subject to both food hygiene and health and safety legislation.]
Will he arrange for a debate on this subject?
Mr. Biffen: Of course I shall look at the early-day motion, and I shall draw the attention of the relevant Minister to it. However, I cannot hold out the prospect of an early debate on this topic in Government time. I have no doubt that, when this subject is considered in respect of hospitals, the wider considerations will come under review also.
Sir Hugh Rossi: Will my right hon. Friend ensure that a debate takes place as soon as possible on the recommendations of the second report of the Committee of Privileges? Will he at the same time ensure that the terms of his motion will be such as to allow the matters contained in the second special report of the Select Committee on the Environment to be dealt with under the new Standing Order proposed in paragraph 68 of the report of the Privileges Committee?
Mr. Biffen: I very much appreciate the difficulties that have arisen in respect of the Committee of which my hon. Friend is Chairman. I hope that we shall shortly have a chance to consider and confirm the recommendations of the Privileges Committee. I hope that, in so doing, we shall meet my hon. Friend's point in respect of his Committee.
Mr. David Alton: Given the assurance that the Leader of the House gave last week that

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he would speak to the Minister for the Arts about the funding of theatres and concert halls in the provinces, will he say what was the outcome of those discussions? Following the letter which the right hon. Gentleman sent last week to his constituency chairman, will he say whether he intends to make a habit of publishing letters between himself and his constituency chairman and whether he will make arrangements for hon. Members to see the letter that his constituency chairman sends to him?
Mr. Biffen: On the latter point, such a practice would be a breach of privilege as conceived by the North Shropshire Conservative Association. As to the former point, I regret to Say that I am not yet able to take my reply further, but I shall look at the matter urgently.
Mr. Martin J. O'Neill: Will the right hon. Gentleman find time next week for a debate on the implications of the legal actions ensuing as a result of the Wapping dispute? Will the Government make clear whether it was their intention under the Employment Act 1980 to have a situation where people on strike could be summarily dismissed with complete loss of the privileges that had previously been their right?
Mr. Biffen: I take note of that point, but I hope that the hon. Gentleman will permit me to ascertain whether the matter is sub judice before making a more considered reply.
Sir Anthony Kershaw: Would it be worth spending any time next week trying to get it into the head of the deputy Leader of the Opposition that a confiscatory tax on more than £30,000 a year would yield not £3 billion, as he says, but half that sum, and that for only one year?
Mr. Biffen: I understand my hon. Friend's well-judged anxiety on this point, but I must observe that we are approaching that stage where the Budget and the Finance Bill offer almost unbelievably endless time to deal with these topics.
Mr. Andrew Faulds: Will the right hon. Gentleman arrange in the near future for the House to have an opportunity—[Interruption.]
Mr. David Winnick: Shall I stage a walk out?
Mr. Faulds: Belt up, you silly boy.
Mr. Speaker: Order. The hon. Gentleman is not referring to me, I hope.
Mr. Faulds: I would never refer to you in such terms, Mr. Speaker, but there are those round about. May we have an opportunity to debate the very important matter of the danger of the dispersal of university and church collections of art and other objects because the value of many of them is under the figure at which export restraints can be applied? This is a matter of great concern to the art world. When can we debate it?
Mr. Biffen: The hon. Gentleman raises a very fair point. I am sorry that he had such trouble with the philistines round about him when he was speaking. I shall get in touch with my right hon. Friend the Minister for the Arts concerning his point.
Mr. John Wilkinson: Further to the serious question of my hon. Friend the Member for Harborough (Sir J. Farr), even if we cannot have a debate
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on the Select Committee system, will my right hon. Friend have a word with the Chairman of the Select Committee on Defence and ask him whether a defence equipment appropriations sub-committee could be formed to provide a corpus of understanding and knowledge in this crucial area to examine such questions as Nimrod 3, helicopter procurement, and so on?
Mr. Biffen: I think that it is best for hon. Members individually to make representations to my right hon. Friend the Chairman of the Select Committee on Defence. It would be a very unwise initiative if I were expected to have a formal relationship with him.
Mr. Nigel Spearing: When will the House have an opportunity o debate the provisions of the single European Act? Does the Leader of the House agree that its implications are considerable, in that it amends quite substantially the treaty of Rome? After it has been finalised, will there not be a White Paper and a debate on the White Paper before any legislation is brought before the House?
Mr. Biffen: I understand the seriousness of the hon. Gentleman's point. It is made with added authority, by virtue of the hon. Gentleman being the Chairman of the Scrutiny Committee. I shall certainly draw the attention of my right hon. and learned Friend the Foreign Secretary to that point.
Mr. Peter Lilley: Will my right hon. Friend reconsider the answer that he gave a fortnight ago to my serious proposal that from time to time the House should grant time to the Opposition parties as question time? He said that this would upset what he described as "the delicate balance" of horse trading. I submit to my right hon. Friend that it could not do so, since no Opposition Member could admit that their policies would not withstand scrutiny, whereas every Conservative Member is aware that they are in need of scrutiny. The matter has become all the more urgent in view of the statement that their policies would cost this country £24 billion a year, and the alliance parties have not revealed what their policies are.
Mr. Biffen: I do not believe that my hon. Friend should be quite so pessimistic. The present structure of parliamentary debate does us rather well, and I should like to keep it that way.
Mr. James Lamond: Has the Leader of the House noticed that when the House is busy there is a growing and rather embarrassing crush of ex-Cabinet Ministers trying to get seats on the Bench below the Gangway? If we are to have an important debate next week, can he arrange for a few chairs to be brought into the Chamber so that they can be accommodated until the electorate are given a chance to remove them permanently from their seats?
Mr. Biffen: I think that it is bath chairs that the hon. Gentleman has in mind.
Sir John Biggs-Davison: Is my right hon. Friend aware of early-day motion 280?
[That this House notes the widespread concern felt in Parliament by eminent scientists, by other responsible observers and by members of the public who have viewed programmes on the matter screened by Channel 4, that Anne Maguire, Patrick Maguire (senior), Vincent

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Maguire (then aged 17), Patrick Maguire (then aged 14), Sean Smyth, Patrick O'Neill and the late Guiseppe Conlon, sentenced in 1976 to long terms of imprisonment since served, now appear, despite confirmation of their convictions at the time by the Court of Appeal, to have been entirely innocent of the crime with which they were charged; further notes at the conclusion of a debate in the other place on 17th May 1975, the recognition by the Parliamentary Under-Secretary at the Home Office of the strength of feeling on this matter in that House and his pledge to draw the attention of the Secretary of State for the Home Department to what had been said; and therefore earnestly urges the Secretary of State for the Home Department in the interests of the highest standards of British justice of which this country needs to feel rightly proud, to move without delay for a review of these convictions, either under the provisions of section 17 of the Criminal Appeal Act 1968, or by such other public process of review as he may deem appropriate to this disturbing case.]
The motion, on the miscarriage of justice in the Maguire case, has attracted nearly 180 signatures and is supported by a number of hon. Members who are precluded from signing early-day motions. Does my right hon. Friend think that the time is approaching for this subject to be debated, or at least for a statement to be made by my right hon. Friend the Home Secretary?
Mr. Biffen: I cannot helpfully go beyond what I said last week in response to a similar question, but I shall certainly look at it again.
Mr. Greville Janner: Is the House to have an opportunity to express its universal delight at the release of Anatoly Shcharansky, especially for those hon. Members on both sides of the House who have been campaigning for 10 years for his release? Will the right hon. Gentleman say how welcome Mr. Shcharansky will be in this country and in the House to receive a bible signed by 500 hon. Members, including you, Mr. Speaker, and that meanwhile we shall continue to campaign for the release of his family, Sakharov, Lerner and all the others who are held in that country and are entitled to the same freedom as Shcharansky is now receiving?
Mr. Biffen: I think that the procedures which are available to hon. Members for such demonstrations of affection and concern are available in this instance. If the hon. and learned Gentleman would like to make other representations suggesting a more formal expression of reaction on the part of the House, those matters will be considered. I suggest that the early-day motion performs a real and valid function on such matters.
Mr. Toby Jessel: Has my right hon. Friend seen early-day motion 397, signed by 107 of my right hon. and hon. Friends, which pays warm tribute to the bands of the Army, the Royal Marines and the Royal Air Force whose high standards of excellence lift the spirit of the nation?
[That this House pays tribute to the high standards of excellence of the bands of the Army trained at Kneller Hall, Twickenham, the Royal Marines trained at Deal, and the Royal Air Force trained at Uxbridge, all of which add splendour to Royal and state occasions, promote
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recruiting and morale, lift the spirits of the nation, and as part of the traditional British scene help to attract to British shores visitors whose spending generates income, employment and a tax yield to Her Majesty's Government; takes note of the Eleventh Report of the Public Accounts Committee which expresses grave disquiet that the Ministry of Defence should have decided on a joint Defence School of Music which would disrupt the training of service musicians and entail expenditure of £10 million before carrying out a full investment appraisal, and recommends that the Ministry of Defence should review the need for a Defence School of Music, as well as its possible location; thanks the Right honourable Lady the Prime Minister for Her reply on 6th February to the honourable Member for Twickenham that the new Secretary of State will look at the matter afresh in the light of the latest facts; and hopes that band training will long continue to flourish at Kneller Hall, Twickenham, at Deal and at Uxbridge, respectively.]
As the reprieve of Kneller hall is not, so far, permanent, can my right hon. Friend find time for us to debate the astonishing decision of my right hon. Friend the Member for Henley (Mr. Heseltine) to uproot the Royal Military School of Music from Twickenham which has been its home for 128 years?
Mr. Biffen: I should like to congratulate my hon. Friend on the tremendous part he has played in this development. It reminds us all that there is more elevation to constituency campaigning than mere paving stones. On the request of my hon. Friend, I think that we should wait until the Government have been able to reflect on the findings of the Public Accounts Committee. That will be an appropriate time for a further debate.
Mr. Jeremy Corbyn: Is the Leader of the House aware that the statement made by the Home Secretary three days ago concerning the rights of Members of Parliament to take up immigration cases has caused enormous disquiet throughout the immigrant community and is a fundamental attack on their rights to be represented and on the rights of Members of Parliament to deal with Government Departments? Can he assure us that there will be a full debate on that in the near future? Will he also convey to the Home Secretary that the view of many hon. Members is that the Government's whole policy on immigration in the past year has been one of deception, subterfuge and misleading of the House and the country about their real intention with regard to immigration law?
Mr. Biffen: I do not believe that the proposals of my right hon. Friend have had the impact upon the immigrant community described by the hon. Gentleman. However, I can assure him that there will be a debate on the guidelines before they become effective. I shall draw the attention of my right hon. Friend to the hon. Gentleman's remarks.
Mr. Harry Greenway: Has my right hon. Friend seen the important report in The Times today which draws attention to the appalling behaviour of the hon. Member for Cambridgeshire, North-East (Mr. Freud) in his criticism of the Chairman and procedures of the Select Committee on Education, Science and Arts, which he scarcely ever attends? May we have an early debate on that contemptuous and contemptible behaviour?
Mr. Biffen: I have not seen the newspaper report. I am sorry that charity is not running in all quarters of the House. I take note of what my hon. Friend has said, but I am not certain what I can do about it.
Mr. Charles Kennedy: In view of the debate next week on public expenditure, will the Leader of the House arrange for the Secretary of State for Scotland to make a statement? Scottish Members will find it difficult to digest the Government's intentions on public expenditure with regard to the Highlands and Islands Development Board and the Scottish Development Agency because of what the Scottish Office has confirmed to me in written answers on the continuing uncertainty over the treatment of profits accruing to those organisations from the sale of shares? In view of that, may we have an early statement, particularly given yesterday's announcement by the Scottish Office of an outrageous and totally unacceptable £1·5 million cut in the Highlands and Islands Development Board budget for next year?
Mr. Biffen: I am certain that the normal convention will be followed in the structure of the debate on Thursday concerning public expenditure. It is a great British occasion uniting us all. I shall refer the specific Scottish matters to my right hon. and learned Friend the Secretary of State for Scotland.
Dr. Alan Glyn: In view of the serious decline in the size of our merchant fleet, particularly those ships sailing under Britsh flags, will my right hon. Friend arrange for a debate on the subject?
Mr. Biffen: I wish that such a debate might cure the problem, but it derives from many factors. I shall draw the attention of my right hon. Friend the Secretary of State for Trade and Industry to my hon. Friend's point.
Mr. William O'Brien: Will the Leader of the House consider initiating a debate to discuss the situation developing in the National Health Service hospitals? The structures of staffing are such that nurses are concerned that they will be responsible professionally and for management to people who have no experience in nursing. There are fears that economies in the running of hospitals could be argued over a bed in which patients need treatment. Is there not a need for a debate to ensure that patients come first?
Mr. Biffen: I am sure that the hon. Gentleman is correct in saying that there are a number of fears on this topic. I think that they are ill founded and can often give rise to unintended mischief. However, I shall refer the hon. Gentleman's point to my right hon. Friend the Secretary of State for Social Services.
Mr. Tony Baldry: Is my right hon. Friend aware that in a number of different parts of the country there has, for a number of weeks, been anxiety as to the possible sites that the Nuclear Industry Radioactive Waste Executive might nominate for the dumping of nuclear waste? Can he prevail on my right hon. Friend the Secretary of State for Industry to make an early statement so that minds may be put at rest?
Mr. Biffen: I realise that there is considerable interest in this subject, and I shall be in touch with my right hon. Friend the Secretary of State for the Environment to inquire when a statement may be made.
Mr. David Winnick: Is it possible to arrange for the Secretary a State for Social Services to come to the House on Monday and tell us if, in view of the cold spell, additional payments for those on supplementary benefit could be made? Is it not a scandal that no statement has been made by the Secretary of State and that literally hundreds of thousands of the poorest people, certainly the elderly, are suffering intense misery because they do not have the means to keep their homes adequately heated?
Mr. Biffen: I note the language used by the hon. Member to present his anxiety, and perhaps he will allow me to leave it at that. I shall contact my right hon. Friend the Secretary of State to see whether it is appropriate to make a statement.
Sir Kenneth Lewis: Has my right hon. Friend had a message to the effect that in the other place an amendment to the Shops Bill was passed, supported by some good Conservatives and by an excellent and venerable ex-Prime Minister? Is he aware that the passing of the amendment will assist in making the Bill more acceptable, if my right hon. Friend can persuade his colleagues to accept the amendment, or at least give it a free ride, or a free vote?
Mr. Biffen: We are a little away from considering Lords amendments to that legislation, but I note what my hon. Friend says, which I know is intended to help the Treasury Bench as it slides along. Even better, I am aided by the presence of my right hon. Friend the Patronage Secretary, which makes it quite unnecessary for me to comment further.
Mr. Frank Cook: The Leader of the House will recall without difficulty the recent incident at Sellafield and he will also be aware of the expressions of unease and the speculation, some of which was warranted and some not, in the press since then. Is he aware that since the incident, as recently as in the past 24 hours, an employee of British Nuclear Fuels Ltd., representing the company at an open debate at Durham university last night, revealed, wittingly or otherwise, that files are kept not only on those individuals who actively campaign in opposition to matters nuclear but on members of their families? In view of this, will the Leader of the House—I am sure that he will find it difficult to provide Government time—ensure that next week we have a ministerial statement so that hon. Members may question the responsible Minister on this matter?
Mr. Biffen: I note the hon. Gentleman's point. I shall refer what he has said to my right hon. Friend the Secretary of State for Energy, who, in any case, will be answering questions on those matters.
Mr. Henry Bellingham: Has my right hon. Friend heard that, when a constituent of mine travelled by train from Kings Lynn to London last week, the train broke down eight times and arrived almost an hour late? Furthermore, her breakfast was on the wrong side of a locked door and the toilets in the carriage were filthy. In the light of that disgraceful incident, can my right hon. Friend hold out any prospect of an early debate on British Rail?
Mr. Biffen: That experience, although highly regrettable, is not necessarily unique. I will draw the attention of my right hon. Friend the Secretary of State for Transport to the anxiety that my hon. Friend expresses.
Mr. Dennis Skinner: Will the Leader of the House reconsider his reply to my hon. Friend the Member for Clackmannan (Mr. O'Neill)? Is it fair to say that the reply of the Leader of the House suggested that we could not have a debate or a statement on Murdoch's sacking of 5,000 print workers, because of the sub judice rule? It seems strange that Ministers, such as the Paymaster General, can appear regularly on television and on radio to talk about Murdoch's sacking and fortress Wapping, but the British Parliament cannot have a debate on the affair. It is high time that that vindictive act of an American citizen, who would not get away with it if he were in America, should be debated to thrash out the matter of vindictive acts waged by employers just because workers are standing together and taking collective action. Under this Government collective action is OK for the bosses, but not for the workers.
Mr. Biffen: I answered the hon. Member for Clackmannan (Mr. O'Neill) in the way that I did because I believe that his question invited an answer that could infringe the sub judice rule. That is why I said that I wished to take advice on the matter. As to the request for a wider debate on the dispute involving the titles of Mr. Murdoch, I shall refer it to my right hon. Friend the Secretary of State for Trade and Industry.
Mr. Derek Spencer: Is my right hon. Friend aware of the unacceptable practice of some local authorities, including Leicester city council, of including political terms in tendering documents designed to exclude firms that have worked on nuclear installations and for other political reasons? Wnen can we expect legislation to outlaw that unacceptable abuse of power?
Mr. Biffen: My hon. and learned Friend makes a firm point about a practice that is causing considerable disquiet. The preparation of legislation would be a demanding task and it is unlikely that it would happen in the current Session, but I shall pass on his remarks.
Mr. Dave Nellist: Is there any prospect of a debate on law and order? If so, will the Leader of the House ensure the presence and participation
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of the Parliamentary Under-Secretary of State for Employment, the hon. Member for Rossendale and Darwen (Mr. Trippier), who replied to the debate on the Wages Bill on Tuesday evening? Several hon. Members and I said to him that 9,000 employers broke the law last year by illegally underpaying young and women workers in the wages councils sector. Only two were prosecuted and they were fined £700. The Minister said that that was all right because only 8 per cent. of employers were crooks.
Mr. Biffen: Negligently, I was not in my place to hear the debate, so I am embarrassed to accept the hon. Gentleman's fair description of it. I note his concern that we should have an early debate on law and order. I shall contact the Home Office to see whether that is possible.
Mr. D. N. Campbell-Savours: May we have a debate on the future of the British bus industry? Has the Leader of the House noticed that, despite statements and questions on the Floor of the House, it has not been possible to discuss the affair of Leyland Bus in detail? It is in the Leyland Bus division of British Leyland that major redundancies are likely to take place. Can he take some action? Is he aware that I arranged a meeting with the Minister of State, Department of Trade and Industry, and the Parliamentary Under-Secretary of State for Transport to take place next Wednesday with two senior managers of Leyland Bus and that the BL board intervened to prevent that meeting from taking place? That act was sanctioned by the Department of Trade and Industry.
Does the right hon. Gentleman understand that that is a direct interference with my rights as a Member of the House? I am defending the jobs of my constituents, yet until now Parliament has failed to provide us with the time to debate the future of Leyland Bus. We must have time, and I appeal to the Leader of the House to provide it for us at the earliest possible opportunity.
Mr. Biffen: If the hon. Gentleman really believes that the action of the management of British Leyland was a breach of privilege in that it impinged upon his work as a Member of Parliament, he knows the remedy open to him, especially after his experience with the chairman of the British Steel Corporation. I shall refer his request for a debate, to my right hon. Friends the Secretaries of State for Transport and for Trade and Industry. I realise that the matter causes great concern in many quarters.

Multi-fibre Arrangement
Motion made, and Question proposed, That this House do now adjourn.—[Mr. Sainsbury.]
Mr. Speaker: Before I call the Minister to speak in this important debate, I remind the House that many hon. Members have a direct constituency interest in the subject. No fewer than 12 of them have already notified their intention to speak, and others may wish to do so. Therefore, I appeal for brief contributions.
4.1 pm
The Minister for Trade (Mr. Alan Clark): The debate, which is in response to requests from hon. Members on both sides of the House, is about the extension of the multi-fibre arrangement to allow imports of textiles and clothing to he controlled for a further period after 31 December. The arrangement and the complexities embraced therein exemplify the problems of reconciliation that are inherent in Britain's trading policy.
Our policy must be considered from three principal aspects. Right hon. and hon. Members on both sides of the House have their views on this, and will voice their arguments in the interests of their constituents, as they see them. It is the place of the Government to reconcile those and to offer the best solution in the light of a careful consideration of all the arguments. I certainly do not see the divisions along party lines. There are inconsistencies in the arguments of some of my hon. Friends, just as there are contradictions and anomalies in the attitude of the Opposition. Indeed, differing voices can be heard in industry and in many trade unions.
I suggest that the House approaches the matter from this angle: first—I mention it first and rate it first—are the interests of the people of the United Kingdom, although even here there are problems of reconciliation because the people of the United Kingdom are producers and consumers; secondly, the complexities inherent in our position of negotiating jointly with our partners in the EC; and, thirdly, the position of the MFA in relation to our world trading policy, the GATT and the overall objective of the reduction of trade barriers to our goods and services worldwide.
When the MFA was set up in 1974, the text of the arrangement stated that it was intended to be a temporary instrument. That intention remains, but I must tell the House that I have no intention of getting rid of it until I am satisfied that the need for the safeguard that it provides has ceased to exist.
I invite the House, initially, to consider the position of the industry. It is a great industry employing nearly 500,000 people—about 2 per cent. of the nation's work force—and it is widely spread throughout the country. With its counterparts in other Western countries, in recent years it has experienced an exceptionally rapid period of change, as the entry of new suppliers into the world market has coincided with rapid technological advance. That combination of exceptional changes justified the exceptional step of suspending the internationally agreed trade rules for a time, so that discriminatory import quotas could be lawfully imposed to give the industry in this and other countries a breathing space in which to adjust.
Now, after a difficult period at the beginning of the decade, when one job in three was lost and in which output declined, we are witnessing a healthy recovery. The
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industry's output has been growing for four years and the export record is impressive. During the first 11 months of 1985, textile exports were l5 per cent. higher than in the same period in 1984. Those percentages can be measured in billions of pounds. Perhaps most striking of all is the fact that our exports of woollen and worsted fabrics to Japan—notoriously a difficult market—increased by more than 26 per cent. in the first 11 months of 1985 compared with the same period in 1984, and that Japan is our biggest market for such textiles.
Mrs. Elaine Kellett-Bowman: I am delighted to hear that my hon. Friend will put the interests of United Kingdom citizens first. Does he accept that, welcome though his figures are, they come from a low base? I should not like those figures to lull him into a false sense of security.
Mr. Clark: I am obliged for my hon. Friend's words of caution. However, when I cited the percentages, I said that they can be measured in billions of pounds. This is a technical subject and there is little scope for flights of oratory. I have deliberately excluded from my speech a mass of figures. Although I agree that percentage increases from a low base can be misleading, textile exports in 1985 were £1·3 billion, and clothing exports were more than £1 billion. Whatever the base, my hon. Friend must agree that those figures are impressive.
I cite those figures as a tribute to the tremendous effort that has gone into changing our industry into a more specialised one, meeting competition by selling products on the strength of their quality and design.
When trade restrictions are at issue, we must consider their effects not only on the industry protected by them, but on the economy at large. The indirect economic effects are spread thinly but widely; it is hard to measure them, but wrong to ignore them. Several economic studies have examined them, including the Silberston report commissioned by my Department, and other studies carried out by OECD and the Trade Policy Research Centre. They point out that curtailing the consumer's freedom of choice increases prices. We must remember that the consumer is often another industry: for example, textiles are consumed by clothing firms.
The studies say that the greater part of the additional revenues attracted from consumers often accrues to the benefit of foreign suppliers rather than British ones. They also say that although trade restrictions can save jobs in the industry concerned, they may not necessarily have that effect in the economy at large. Plainly, higher prices for the products of one industry leave consumers with less money to spend on those of others. I accept that trade restrictions cast a long shadow, which often falls in unexpected places.
Dr. Keith Hampson: Does my hon. Friend agree that the burden would fall very heavily on some parts of the country if we weakened the multi-fibre arrangement too much? The clothing industry is already introducing much new technology, which does not allow the industry to take on much extra labour. Whatever might be the extra input to the economy as a whole, any weakening would damage areas where there are few alternative jobs. There would be no increase in jobs or new industries in areas where textiles are concentrated.
Mr. Clark: I have already said that I have no intention of getting rid of the arrangement until I am satisfied that

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the safeguards that it provides are no longer needed. I would not wish to use the word "weakening", but we are contemplating some changes. I shall be interested to hear my hon. Friend's comments on them.
Most of the competition comes from within the Euopean Community. Imports account for 40 per cent. of British consumers' expenditure on textiles and clothing. Of that, 24 per cent. comes from our Community partners, compared with 10 per cent. from the developing countries covered by the arrangement.
Most Community supplies now enter free of all restraint, and so, after the end of 1989, will supplies from Spain and Portugal. Some of the most formidable low-cost competitors will then have free access to our market, which is already open to some of the most formidable high-value competitors.
Hon. Members will know, as I stated at Question Time yesterday, that it is the Community, and not individual member states, which negotiates on the EC's external trade policy. It is therefore through the Community that the United Kingdom will be negotiating in the GATT to renew the MFA. The Council of Ministers will be deciding, in the Foreign Affairs Council, the Community's negotiating mandate. In that process, the British voice is one of 12, and my intention is that it will be persuasive.
Mr. Nicholas Winterton: As my hon. Friend has particular responsibility for looking after, I do not say safeguarding, the interests of 500,000 people who work in the textiles and clothing industries, will he seek to influence my right hon. Friend the Leader of the House and the business managers of this place to ensure that this matter will come to the House again before he finally negotiates a mandate with the European Community? The House, and not just the Minister, should seek to represent the best interests of the British people.
Mr. Clark: My hon. Friend's comments will have been heard by the business managers, who are present. I believe that today's debate is a step in that direction, and I look forward with great interest to hearing my hon. Friend's comments. Certainly it might be appropriate at a later stage, when the mandate is in a more tangible form, for the House to re-examine the matter, but that is not a matter for me to judge.
Mr. Max Madden: In view of concern of textile trade unions about the 500 jobs a week that have been lost during the lifetime of the present MFA, will the Minister give an undertaking that he will meet the unions before the mandate is finalised, so that he can hear their views, because, to judge from what he has said today and earlier, I suspect that he is not fully aware of them?
Mr. Clark: I would like to think that I am well aware of their views, although as the hon. Gentleman knows, I have been in this post for only 10 days.
The first thing that strikes me about the trade unions' views is that they are not unanimous. They express different views, and there is a conflict of opinion and approach between them. The hon. Gentleman will appreciate that I cannot—
Mr. Jack Straw: Will the Minister give way?
Mr. Clark: I shall give way to the hon. Gentleman, although I have given way four times already.
Mr. Straw: The Opposition are glad to learn of the Minister's resolve to defend the interests of the textile industry.
I should like to correct the Minister on his point about the trade unions. Hon. Members on both sides of the House who represent constituencies with textile industries would say that the textile trade unions have always worked in concert and with the British Textile Confederation, and employers and have put up a united and sensible front to defend the best interests of the industry.
Mr. Clark: I apologise to the hon. Gentleman and to the House if I inadvertently cast aspersions on the united front which the trade unions display in these matters. However, I think that some trade unions, possibly not in the textile industry, were urging us to admit imports from Bangladesh, on the ground that their exclusion created social deprivation in that country. There has been a certain amount of dabbling by trade unions in an attempt to regulate or combine social conditions with acceptance of quotas and so forth. The front that the trade unions present is not entirely harmonious, but perhaps the hon. Member for Blackburn (Mr. Straw) will develop that point if he catches your eye, Mr. Deputy Speaker.
Simultaneously with the negotiations in the GATT to renew the MFA, a preparatory committee is meeting to arrange the launching of a new GATT round of multilateral trade negotiations. That will be the first such round since the Tokyo round was launched in 1973.
I invite the House to consider the position in the GATT of the newly industrialised countries. They benefit greatly from their access to developed countries' markets, while enjoying the same exemption as the poorest developing countries from the requirement to reciprocate that access by opening their own markets. In the long run, the future of the MFA and the integration of the newly industrialised countries into the GATT system are similar issues.
The Government are convinced that the Community must be willing to negotiate these two issues together in the new GATT round, and that we must make that clear to the developing world when an extension of the MFA is sought this year. Indeed, nothing has raised sharper questions about the wider international effects of the MFA than the debate, as I mentioned to the hon. Member for Blackburn a moment ago, over its application last year to Bangladesh.
No fewer than 81 hon. Members have written to Ministers at the Department of Trade and Industry about that. I understand the questions that they raised about a system that allows rich countries to discriminate against textile imports from the poorest countries, while continuing to trade amongst themselves on the nondiscriminatory terms enjoyed by the GATT. I understand, too, the problem of how developing countries are to repay their debts, often to our own banks, if they cannot sell us the goods that they make best. All these arguments add to the complexity of the Government's dilemma.
The Government's objectives remain broadly as they were set out by my predecessor in the House on 9 May 1985. They are, first, to seek a renewal of the arrangement for a further transitional period because it is inappropriate, as I said at the outset, to dispense with a sudden jolt, with

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the safeguards that it provides. These safeguards must be maintained, but perhaps focused more accurately on those sections of the industry that need it most.
Secondly, we should consider liberalising in several respects: for example children's clothes, quotas which are disproportionately costly in relation to the amounts of British production protected, the poorest developing countries and those which maintain low barriers to British exports.
All that must be set in an explicit long-term context which looks to the new GATT round as the forum in which the MFA, like other exceptions from the normal rules of the GATT, should be put on the table for negotiation, with the aim of getting those rules more widely and consistently respected. Finally, the state trading countries should continue to be handled differently from market economy countries in ways appropriate to their trading systems.
Let me briefly review events since that debate in May last year. Last July the Community made a declaration in the GATT textile committee, with the approval of the Community's own Council, calling for a renewal of the MFA on a more flexible basis and recognising the close links between this question and the efforts then being made to launch a new GATT round.
In December the Commission made a proposal to the Council of Ministers as to what the Community's negotiating mandate should be. It issued a lengthy press notice, which is in the Library of the House, and hon. Members may consult it and derive some idea of the Commission's view of the mandate.
We start in earnest with the negotiations at the GATT textile committee on 3 April. In the meantime, there has been some preliminary discussion in Brussels among Community Ministers as well as technical discussion among officials. Some countries are reluctant to countenance much, if any, liberalisation. Others are arguing for a firm commitment to phase out the MFA. British spokesmen have continued to advocate the strategy that has been set before the House. My Department has throughout kept in close touch with the main trade associations representing the British industry, with the TUC, and with consumers' and distributors' organisations.
In his speech to the House in May, my predecessor took the view that the Community's position would, in the nature of things, evolve to take account of the positions of other major participants and that the position of the United States would obviously be especially important. Since that time the President has vetoed the Jenkins Bill, which, if it had been enacted, would have been a major protectionist step.
The President announced that the United States would most aggressively renegotiate the new MFA. The detail of the United States' approach to the negotiations is not yet clear. The recent renegotiations of existing United States bilateral agreements have allowed for a growth of imports, on average, of around 6 per cent.
I shall mention a few points which are under debate in Brussels and on which I look forward to hearing hon. Members views. First, there is the level of growth rates and whether the so-called dominant suppliers, of which Hong Kong is the most important, should be treated less favourably than other countries. Secondly, there is the question of the extent to which the Community can expect a degree of reciprocity in return for any liberalisation provided. Thirdly, there is the basket exit mechanism.
Mr. Bryan Gould: The basket extractor.
Mr. Clark: The basket extractor — the hon. Gentleman is correct. To be honest, it is a term of such hideous jargon that I regret that the hon. Member for Birmingham, Ladywood (Ms. Short) is not in the Chamber, because were she here I could express by my tone the distaste that I feel for that piece of jargon, and she might repeat some of the accusations that she has made against me previously. I should be glad if hon. Members came forward with suggestions as to how that ludicrous term, which has somehow slipped into the parlance of the arrangement, could be made into a more intelligible title.
The fourth point is whether the arrangement can, or should, be used as an instrument for influencing social policies within developing countries.
On each of those points we must bear in mind what is negotiable and what is desirable, and, no less important, the balance that must be struck between the textile industry's interests and those of our trade more generally.
I should like to set the debate in the context of free trade versus protectionism. I do not see them as mutually exclusive alternatives which preclude any other approach. I recognise that the attainment of a genuinely free trade society is an admirable long-term objective, but Governments must negotiate in the real world, and in the real world free trade, like unilateral disarmament, is fine—[Interruption.] My hon. Friends will understand that I had to attack the allegiance of Opposition Members.
Free trade is fine if everyone else allows it, but if we try to achieve it by example alone it may be dangerous and even damaging. The hard-headed bargaining of reciprocal advantage and concession in an atmosphere of mutual respect is completely different from protectionism. Any Government who ignore that principle in obeisance to some abstract credo — is it ignored by our principal trading competitors, the Americans, the Japanese, and the French, who are the arch practitioners of that doctrine? —are in derogation of their duty to their people. I shall be adopting that approach in the MFA negotiations, and it is one which I invite the whole House to endorse.
4.23 pm
Mr. Bryan Gould: I shall begin by welcoming the Minister to his new responsibilities and especially to this subject. He brings to the MFA negotiations an enviable reputation as someone who is ready to put the national interest first. The Opposition hope that he will maintain and build upon that reputation.
At times during the Minister's speech, we were encouraged—in particular, when he departed from his text rather than when he read from it—that he would enhance that reputation.
I urge the Minister not to feel any obligation to learn the art of speaking backwards which is, I believe, a talent much prized by some of his ministerial colleagues in the Department of Trade and Industry. We should like him to carry on speaking in much the same direction, on this subject, as he has done in the past.
The debate is welcome. We are grateful to the Government for having made time for it. It comes at a crucial time. We know that the EEC negotiating mandate is to be concluded, if the Commission has its way, by the end of the month. We shall say something about whether that timetable is appropriate. It means that it is important that the House has an opportunity to express a view now

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as to what we know of the likely content of that negotiating mandate, because once agreed—I take the point made by the hon. Member for Macclesfield (Mr. Winterton) about the desirability of another debate—that will be that. The Government will say, "We have no further part to play."
Once that has happened, we shall have determined the future of what is universally regarded as one of our most important industries. I need not rehearse all the facts. The importance of the industry is common ground.
We know that the outcome of the negotiations matters crucially to nearly 500,000 employees in this country. That is nearly one in 10 of all those who work in manufacturing in Britain.
As I think the Minister was reminded by one of his hon. Friends yesterday, that total exceeds the combined totals of those who work in the coal and steel industries. It is valuable employment, as has been said many times. It is important from a social and regional viewpoint because of the heavy concentraton of jobs for women and members of the ethnic minorities. Those jobs matter. No Government could responsibly gamble with them.
The arrangement is not just important to the employees. The employers have a creditable investment record. They need to know the industry's future shape and prospects before they embark on yet another round of greatly needed investment.
The Opposition take little comfort from and have little confidence in the Government's overall attitude when we consider what Ministers have said from time to time about the importance of manufacturing. We are alarmed by the carelessness and lack of interest with which the Government have so often regarded the collapse of this or that part of our manufacturing base. Over the past month or two, the country has watched what has happened to sectors of our car and helicopter industries. The attitudes displayed and the policies implemented give us little confidence that the Government are serious about maintaining the base of our manufacturing capacity.
The Opposition—I believe that we may have strong support from Conservative Members — are determined that what has happened to our car, helicopter and other industries shall not happen to the textile industry. The threat is not that someone will come from abroad and buy the best and juiciest bits, it is merely that the industry will fade away and be ground down by the rising tide of imports.
One of the problems that we face—the Minister was fair in conceding the point—is the difficulty we have when we get at this Government, because they are merely one of 12 partners negotiating in Brussels. The Minister was at his most persuasive and engaging when he assured us that that one voice would be a strong one. Nevertheless, all too often there are opportunities for Ministers to slip out from behind their responsibilities and say that it is nothing to do with them—"It is all to do with those wicked people in Brussels. We had to agree this or that concession."
We will not accept that. We believe that the Government and the Mininster have a clear and direct responsibility for what is agreed in Brussels. I pause only to remark upon the irony, which the Minister appreciates, that we have handed to the EEC the unique right to negotiate on our behalf in trade matters such as this. When
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one considers the level of EEC imports, which have done so much damage to our industry, one can only reflect that it is rather like handing over the keys to one's house to someone who has just burgled it. I believe that that is our present situation.
Sir Adam Butler: That is a fallacious argument. If we were to negotiate on our own with the various under-developed countries we would get nowhere near as good a bargain as the EEC, with its bargaining power, can obtain for the United Kingdom and other members.
Mr. Gould: Negotiations of a bilateral nature will take place and that is one of the problems to which I shall refer. Once we have agreed, in the unsatisfactory forum, an umbrella agreement, we shall then have a whole series of bilateral negotiations to undertake within that umbrella.
Mr. Roy Hughes: Does my hon. Friend think there is anything in the reports emanating from Brussels that our officials are trying to weaken the multi-fibre agreement? Why is the Common Market hurrying these negotiations when the Americans have not decided their position?
Mr. Gould: I am extremely grateful to my hon. Friend. I shall deal with his first point a little later but his point about the timing is something to which the Government should address themselves. The Minister may say that he has difficulties in negotiating an overall agreement, but it is perfectly clear he has great control—if only from a negative viewpoint — over the timing of these negotiations. If the Commission is trying to rush us into a final agreement by the end of the month—which, as I hope to show, will not be in our best interests—I hope that the Minister will recognise he has a veto over that process. He can drag his heels. The Minister may need a great deal of political will to get away with it but he could do so.
There is a suspicion that the Commission for reasons of its own, perhaps for administrative convenience, is rushing ahead with these negotiations and trying to reach a final agreement much sooner than is in our interests, Why are we in such a hurry to reach an agreement when Spain and Portugal, major elements in the negotiatons, have only just acceded to membership? They have had hardly any opportunity to make a proper contribution to the new regime. Portugal has been so alarmed at what it perceives to be the likely contents of the negotiating mandate that it has threatened to ask for renegotiation of its own transitional entry terms to the subject. That is one good reason for taking our time.
As my hon. Friend the Member for Newport, East (Mr. Hughes) pointed out there is the position of the United States to consider. The position which the United States finally takes up will be a major factor in the eventual negotiations. We know that the United States position is likely to be fairly restrictive. We know that it is likely to want quota cuts from the dominants, that it will want an extension of the product cover for the new MFA and that it will wish to tie quota growth to market growth. The United States will wish to tighten—here I agree with the Minister in his diatribe against the expression — its equivalent to the basket extractor mechanism.
As the Minister correctly pointed out, following the veto by the President of the Commission of the Jenkins

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Bill, we had a strong statement from the President about the aggressive stance which the United States had taken. Contrary to what the President said about the American stance on bilateral negotiations, the evidence shows that in their negotiations, with the Japanese on a bilateral agreement it will take a tough line.
If this is true, we are taking a grave risk in setting a concrete negotiation position which is markedly more liberal that the American position. The result of an MFA in which the Americans take tough action but we take weak action is that there will be a substantial diversion of exports from the American market into the less protected market—the United Kingdom. This is a major reason for taking our time and I urge the Minister to bear that factor in mind.
Sir John Farr: It is a good idea to bide time. Unfortunately, as the hon. Gentleman is aware, the present GATT arrangement expires in July this year. It is important to make sure that the Government are properly and well-prepared in time.
Mr. Gould: I do not disagree with the hon. Gentleman. There is a timetable to which we must adhere but there is no point in getting out ahead of the Americans. We should try to co-ordinate it so that we do not simply establish our position without reference to what we believe the American position will be.
It is puzzling that, long before we had even agreed a negotiation mandate for the MFA, the Commission was intent on pressing ahead with bilateral negotiations. These agreements do not expire until the end of the year—we have plenty of time. Why are we pressing ahead with those negotiations without knowing the shape of the umbrella under which they will take place? Again the suspicion must be that the purpose of the Commission in pursuing bilateral negotiations is to try to establish, through the sequence of negotiations, a fait accompli — greater liberalisation irrespective of the outcome of the MFA negotiations.
If the Government are prepared to go along with that one is bound to look suspiciously and cynically at their assurances to the House and to the industry that they are intent on providing a proper measure of protection.
Mr. Richard Wainwright: I am most grateful to the hon. Gentleman. He mentioned a fait accompli and that is a term that sends a cold shiver down the spines of those engaged in the great industries which are lumped together as textiles. The hon. Gentleman has been eloquent on the complexity of the distinct stages of these negotiations—most of which take place far away from the ears of the British media. Will the official Opposition, with their influence on the business of the House, do their best to insist that each distinct stage is given a full statement and preferably a debate on the Government's intentions?
Mr. Gould: Of course I am happy to give that assurance and to point out that this debate takes place after a formal request by my right hon. Friend the Member for Bethnal Green and Stepney (Mr. Shore) that the Government should provide time for it. I am glad that the hon. Gentleman said that the official Opposition would have to take responsibility for these matters as it is perfectly clear that the remainder of the Opposition,
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especially the Liberal party are utterly split between the Yeovil tendency and the Rochdale factor. They are certainly not able to present a united front on this issue.
Mr. Michael Fallon rose—
Mr. Gould: I must press on as I have taken up much time.
It is bad negotiating practice to reveal one's negotiation position sooner than is necessary. It calls to mind the Government's earlier and substantial mistake—admittedly under different management—when they commissioned and published the Silberston report. Apart from its merits or demerits—it is widely regarded as a shoddy piece of work—the publication of that report was the worst thing to do when we were preparing for international negotiations. We handed over to our negotiating partners a document which made the case against us. I cannot believe that the Government would wish to repeat that mistake.
What are the contents of the EEC negotiating mandate? We have not been privy to the negotiations and we have not seen any official reports or documents. However, Brussels leaks rather as Whitehall leaks, but perhaps not in quite such dramatic circumstances.
We have seen some evidence of what the mandate might contain, and what we have seen is extremely worrying. The Minister has said that he is contemplating some form of liberalisation, but let us bear in mind that any liberalisation will mean an increase in the level of imports, which is already 45 per cent. Every percentage point increase will put more of our textile workers out of work. Even during the term of MFA 3, 2,100 jobs were lost in the industry during each month that the agreement ran. That is the measure of the risk that we are taking by even thinking of further liberalisation.
Mr. Fallon: Does the hon. Gentleman agree that the Commission is favouring liberalisation and in so doing appears to be the only party in the entire debate that is thinking of consumer interests? Is there not significant evidence in the Silberston report, from the Consumers Association and from the trade policy research centre that the MFA is a tax of 15 per cent. on clothing prices and 17 per cent. on children's clothing prices, and that it is costing every household in Britain this year about £377 whether or not it buys clothing?
Mr. Gould: I rather regret having given way to the hon. Gentleman. He has advanced the classic argument which ignores the fact that the consumer, who is believed to have a miraculous separate existence, is someone who depends for his livelihood, either directly or indirectly, on workers in the industries that we are trying to protect.
That which we know about the content of the negotiating mandate is worrying. Quota growth for group 1 products is to be even higher than the presumed and projected market growth. The quotas for other products will be allowed to grow by 6 per cent. No attempt will be made to re-base quotas on import levels as the TUC had recommended. If that had been done, there might
have been room for greater flexibility on quota growth. Unfortunately, that has not been done. No attempt has been made to make room for concessions to the poorest suppliers by requiring cuts of the dominant suppliers. The possibility of using the MFA, as we would wish, to increase the export opportunities of the poorest countries

1117
—for example, Bangladesh — has not materialised because of the shortcomings of the Commission in framing the document.
Lip service only has been paid to the social development clause. It is there and it is mentioned, but only in terms that make it crystal clear that at the slightest hint of opposition, which the Commission no doubt fully expects, the Commission will run away from the commitment. As the Minister said, the approach to reciprocity is extremely weak-kneed. It is only half-hearted. There is no likelihood that the Commission will even raise the matter with the bilaterals in the negotiations that it will conduct.
The quota transfer arrangements within the EEC are a source of great concern. Unfortunately, the issue has become tied up in some way with the anxiety about completing the internal market. As the quotas are transferred, there is a real possibility that a country such as Britain will find that quota levels will be exceeded by anything up to 13 per cent.
There was no attempt to deal with the continuing problem of quota overhang. Neither was there any attempt to replace the admittedly ineffective anti-surge mechanism. All that we are offered or promised is a vague consultation clause.
Finally, I turn to our old friend the basket extractor mechanism, which is to be relaxed instead of being made more effective. The Government intend to argue—the Minister reflected the intention to some degree—for a position that comes between two extremes in the EEC negotiations. The Dutch, the Danes and the Germans want liberalisation while the French, the Italians, the Portuguese and the Belgians want an effective MFA. It seems that we are virtuously steering a middle course, and it is said that that is a sign that we are getting things about right. It is an example of the typical British compromise. I do not accept that that is an adequate or effective stance for our negotiators to take.
We are not in a weak position in these negotiations. We can determine their outcome by placing our weight on one )side or the other. Indeed, we are in an immensely powerful position. If the Minister is to remain true to what he and his ministerial colleagues have assured the House, which is that they want to see an effective renewal of the MFA, they will make it clear in Brussels that they side with those who, quite properly, in their own interests and in the interests of the EEC, will insist on an effective renewal of the MFA.
There is a problem, and it is one that causes many of us to be suspicious. Whenever a Minister repeats the pledge which was given on 9 May 1985 that the Government are committed to an effective renewal of the MFA, we hear strong and persistent reports from many sources in Brussels that those who are in the van of the pressure to liberalise the MFA are the British officials. We require the clearest possible assurance from the Minister when he replies that our officials are not acting under ministerial instructions and that they, to the extent that they have earned this reputation, will be brought to heel smartly by the Minister's responses.
I shall conclude by asking the Minister a specific question. Now that we know the likely shape of the EEC negotiating mandate, has any proper job assessment been carried out of the consequences of employment in Britain?
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If the answer is no, the Government are acting irresponsibly. We cannot afford further job losses in a hard-pressed industry. We must know what the job consequences will be. It is all very well talking in general terms about the benefit to the consumer, but that does not cut much ice with those whose jobs are on the line.
The Minister is refreshingly free of the free-trade theology which has marked so much of his Department's policy-making in this area over the past year or two. He talked about free trade and unilateral disarmament as though they were different phenomena. I would argue that free trade is unilateral disarmament, and that is exactly what we want to avoid. If the Minister says that there is comparability in that sense, I shall agree with him.
We shall accept no excuses from the Government or the Minister about the difficulty of negotiating in Brussels. We believe that the hon. Gentleman has every opportunity to defend the national interest. We believe also that we are entitled to judge him on the results that he achieves in Brussels. We have hopes that he will enhance his reputation for fighting for the national interest. We hope that he will fight for the British textile industry in the negotiations, and we urge him to do just that.
4.48 pm
Sir Adam Butler: It is appropriate to congratulate my hon. Friend the Minister for Trade on what I take it is his maiden speech in his new capacity. He delivered it in a refreshing manner, and rather blushingly at times. He will have to become all too used to the strange phrases to which some of us have been accustomed for some time. When he debates these issues in the Council of Ministers he will find them highly complex, but I know that he will be up to the task.
When I first started taking part in textile debates in the House some few years ago, I used to declare that I had been an employee in the textile industry. Indeed, I was an employee at that time, but that is no longer the case. A much more important interest to declare now, as then,
is the interests of my constituents.
Despite the ravages of the past few years, which have hit the east midlands and Leicestershire as hard as anywhere else in the textile industry, hosiery and knitwear remains the principal industry in my constituency. I should like to spend a long while talking about the subject, but I assure the House, and especially my hon. Friends, who by their numbers demonstrated the importance of the debate, that the brevity of my speech will be in inverse ratio to the importance of the matters that we are debating.
The companies in my constituency, like the industry as a whole, have shown remarkable resilience over the past years. They have shown an ability to adapt and survive. The fashion knitwear industry, for instance, through greatly improved design—perhaps we might say at long last—and the use of up-to-date machinery, has shown that it can compete with the best in the world.
In some sectors there is evidence of growth in order books, high levels of activity and prosperity. However, that prosperity is selective and fragile. There is little or no confidence in the future. It is important that there is not enough confidence to encourage long-term investment. Where prosperity exists, it must not be allowed to distract us from the casualties of recent years—for example, the thousands of workers in the industry who have lost their jobs and the hundreds of companies, especially small

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family ones, which have gone under. The knitted underwear sector, for example, has been especially hard hit and remains very much at risk.
The MFA has undoubtedly helped in easing the transition and ameliorating the worst effects of imports from low-cost countries. Its continuation is welcomed. There were many parts in my hon. Friend's speech which I found most helpful, but the terms of that next arrangement continue to give us concern. It is the uncertainty about them and the Government's talk of liberalisation which serves to undermine confidence and make company boards hesitant about investment.
There are many aspects of the new arrangement which demand attention, but I do not intend to dwell on those. Other Members may deal with the need for more effective machinery to deal with a surge in imports, perhaps from a totally new country of origin, and to deal with that surge swiftly.
There is the question of preferential treatment for those exporting countries which give comparable access. There is the very important question of no switching of quotas between EEC countries. Indeed, there is the wider problem of outward processing by other EEC countries, and it is from that cause that much of the increase in imports from within the EEC has arisen. Others have already referred to the importance of comparability with American practice. There is all that and much more.
There is talk of greater liberalisation. The present and former arrangements are liberal. The whole concept of the MFA is not to achieve rigid protectionism, but to control the rate of increase in certain sensitive items. The MFA gives guaranteed and growing access to clothing and textile imports from developing countries. The industry is not arguing for that growing access to be reduced. However, that growth rate is significantly higher than the growth in domestic demand, which historically has been less than 0·5 per cent. per annum in the last seven years or so.
What would be an act of irresponsibility, what would be damaging and grossly unfair to an industry which has demonstrated its adaptability, and which has shown clearly that it can continue to make its contribution to the nation's economy and to employment, would be for growth rates — that is, the rate of annual increase in imports of sensitive items —to be increased. Liberalisation is already a basic feature of the MFA, but it is controlled liberalisation. To continue in a new arrangement with the same terms would in fact provide for further liberalisation. That, I believe, is acceptable. What is not acceptable is for the terms to be eased. What is also not acceptable is for the growth rates to be increased.
I hope that when winding up the debate my hon. Friend will give us a categorical assurance on that point and that my hon. Friend the Minister for Trade will be as persuasive as he possibly can be in that direction in the Council of Ministers.
4.53 pm
Mr. James Lamond: I, too, welcome the latest Minister to assume responsibility for this matter. Those of us who have attended textile debates for some time know that Ministers come and go, perhaps with unfortunate frequency. The newest Minister has an engaging style and a refreshing approach to the matter. Whether that will ensure a longer tenure of office looking after textiles I do not know, but
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I trust so. I hope that he is still the responsible Minister when the matter comes to fruition and all that he has told us today has been carried out.
The Minister said that the industry is an important one, employing 500,000 people, or 2 per cent. of the working population. Two per cent. does not sound very much, but those 500,000 people are heavily concentrated in certain areas. Sections of the industry are even more heavily concentrated in areas such as Oldham, my constituency.
The Minister will know, I am sure, that Oldham has been famous over the years for its part in the spinning section of the industry. I wonder whether the Minister had the opportunity of seeing the BBC programme which dealt with the decline of the textile industry. It was produced originally about two years ago, but was shown again about a fortnight ago. If the Minister can get hold of a cassette of that, it would do him no harm to see it. Contrary to his suggestion that there has been a decline in the textile industry over about 10 years, the film shows that the decline in the textile industry has been going on very much longer that that—perhaps for half a century.
Anybody who saw the programme would come to the conclusion that under the MFA there cannot be a long-term solution to the problems. It is a temporary measure. One can, of course, discuss how long is temporary. I do not think that we have had it for long enough at present, and I should like to see a fairly lengthy renewal of the MFA, and perhaps another. one after that.
Mr. Straw: While Oldham was known for its spinning, Blackburn was once the weaving centre of the world—indeed, it is still an important textile centre.
My hon. Friend referred to the long-term decline in the industry, and I share his view that there has been a long-term decline as other countries have become industrialised. Does he agree that, in terms of output and employment, what has happened since 1980 in the textile industry has been of a different magnitude from anything experienced by the industry in the post-war period? Two hundred thousand jobs have been lost, which is catastrophic.
Mr. Lamond: I do not deny that it is catastrophic, and I fully support the point made by my hon. Friend.
If I may make a couple of constituency points, the first is that investment is taking place in the industry. Because of the resurgence which the Minister mentioned, there is a fragile recovery in the industry, although not very strong at present. It needs to be supported, and therefore we welcome the debate today.
Three weeks ago Courtaulds announced an investment of £4·5 million in re-equipping a maple mill in my constituency. I was present when the company made the press announcement, and we had a look at the mill. Although I warmly welcomed the investment and the confidence that that showed, unfortunately it has resulted in a net reduction of 150 jobs in the industry in my constituency. This does not mean that 150 people will lose their jobs immediately—they will be found some work —but ultimately there will be a net loss. It is important to take that into consideration. Part of the problem is that trying to keep up with modern technology may ultimately mean a reduction in jobs.
I have mentioned that cotton spinning is particularly important in Oldham. Among the many representations

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which we will all have received, I have received a note from the British Textile Employers Association in Manchester saying:
"The UK Government has consistently regarded the cotton yarn spinning sector as being highly sensitive. It is regionally concentrated in the North of the Greater Manchester area and in South East Lancashire, largely in towns with few alternative employment opportunities. Unemployment in the main areas of cotton yarn production in November 1985 was above the national average."
The note gives the example of Oldham as having unemployment of more than 14 per cent.
The association continued:
"The sensitivity of the sector is increased by its position as the first stage of the production chain. Cotton yarn producers are affected not only by imports of cotton yarn but also by imports of clothing, household textiles and fabric, which reduce their potential market."
Their position in the textile stream makes them particularly vulnerable. I hope that the Minister will keep that in mind and ensure that the negotiators are aware of it.
The secretary of the Oldham and Rochdale Textile Employers Association, Mr. John Longworth, is well known to many of us and happens to be the efficient secretary of the textile industry support campaign. He writes:
"Under the present MFA there is a formula known as the burden sharing formula which aims at a fairer sharing of imports amongst the members of the European Community. It is arrived at by the comparing the size of each member state and its historic import levels.
In the past cotton yarn imports into the UK have been given special consideration because of the comparatively high contraction rate in the UK spinning industry and also because of the very high level of cloth imports which have affected upstream spinners just as significantly as direct yarn imports.
Our information concerning the mandate for renewal of the MFA later this year, indicates that the need to continue the existing provision for yarn imports into the UK has been overlooked."
I hope that the Minister will inquire into that matter, to ensure that it has not been overlooked and that it is written into the mandate with which our negotiators will go forward.
Mr. Longworth continues:
"May I suggest that if you get an opportunity to speak in the debate tomorrow you might make reference to the need to continue the special provision for yarn. This is most important for Oldham which still has the highest concentration of cotton spinning in the UK."
I know that these negotiations are complex, and difficult for anyone who is not immersed in them as a negotiator to understand. The basket extractor mechanism and the rest sound technical, but they are extremely important in some areas. It is difficult to over-emphasise the anxiety of employers and employees about the future, and therefore these matters must not be overlooked.
There is a feeling in the textile industry that our negotiators are taking a leading role in trying to liberalise the MFA. That has been reflected in letters that I have received from employers in my area, some of them very prominent. I have raised the matter with Ministers on several occasions —not, of course, with the present Minister —because employers have expressed their concern about how our negotiators are considering this matter.
I have already suggested that the Minister might benefit from watching a video recording of a BBC2 programme
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about textiles. If the Minister has not had the opportunity —he cannot do everything at once and he has been in the job for only 10 days—he should read carefully the Trades Union Congress statement on MFA 4 entitled "A Fair Balance in Textile and Clothing Trade." He would find that what he said earlier was mistaken. There is harmony among the trade unions. Their attitude is not based simply on self-preservation and a selfish interest in their own jobs. The pamphlet deals sympathetically with the need to encourage growth in the textile industries in developing countries. The trade unions do not dismiss that aspect of the debate.
I sympathise with the Minister. Of course he has a difficult job trying to balance all these considerations. I am sure that he also received a letter from the world development movement. Anyone who wants to take a reasonable view of the negotiations must take account of its arguments. During the past eight years the Third world's share of United Kingdom imports of textiles and clothing has dropped from 34·5 to 27·5 per cent. We have to take account of that. Those figures include the market share of the poorest developing countries, such as India and Bangladesh, which fell from 7 to 5 per cent. Those are important matters that must be balanced against the protection of jobs in Britain.
The trade union movement has not overlooked that—far from it. It says in its pamphlet:
"The restrictions under MFA 4 should be set at levels which ensure that the market access for imports from all low cost sources (including the preferential countries) grows at the likely 1–2 per cent. rate of expansion of the EC market. Again, preference should be given to the least developed suppliers in allowing them higher growth rates in exchange for lower growth for the dominant suppliers."
That reflects the anxiety that has been expressed in the world development movement and, from time to time, by hon. Members. Some of us are anxious that the poorest countries should be given an opportunity to bring their economies up to a reasonable level. I hope the Minister does not think that those of us who speak with a strong constituency interest do not share that view.
There is a paragraph in the trade union pamphlet which the Minister might not find very acceptable, as he said something a little disparaging about those who want to mix free trade with interfering with social conditions in other countries. I do not agree with him. If we are to sacrifice jobs—which is what happens ultimately—we have some right to say that there should be some social change in the countries that are to benefit. We do not ask for change in the system or type of government, but we do ask for a change in the organisation of labour, for example.
Mr. Paddy Ashdown: I should like to take the hon. Gentleman to task for what he described as the world development movement's stance. He misrepresented it slightly. He talked of just the poorest countries, but the movement favours "positive discrimination in favour of imports from developing countries especially the poorest." The movement talks of all, not just the poorest.
Mr. Lamond: I would not want to misrepresent anything, and I accept what the hon. Gentleman has said. When I read from the trade union pamphlet, I quoted that part which said "the least developed". Far be it from me to misrepresent, or even to try to speak on behalf of, the world development movement. I am doing my best to protect the interests of working people in my constituency, as they would expect.

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The TUC pamphlet says:
"The TUC is proposing that a new Article should be written into the MFA to encourage social development in member countries, building on the reference to this acknowledged objective contained in Article 1 of the existing MFA."
In the existing MFA we have the seeds of that idea. If we accept, as I do, that the MFA is not simply a mechanism for restricting imports, but is already a liberal arrangement which recognises the need for some countries to expand their exports, we will make much more progress in the negotiations.
The Minister should consider the arrangement positively. He should regard it, not as restrictive, but as a means of assisting the poorer countries, which desperately need our help. That can be done with the full support of the trade unions, provided their pamphlet is taken into consideration.
5.10 pm
Mr. Nicholas Winterton: This is a vital debate. We are concerned about the employment of 500,000 people in an industry which is our fourth largest employer. As we have heard from the Minister and others, the industry is larger than the coal and steel industries put together, twice the size of the aerospace industry and two and a half times the size of the computer and office equipment industry. Therefore, we are talking about a very important part of the manufacturing base of the United Kingdom.
The instincts of my hon. Friend the Minister for Trade are good. He is so much better when he speaks from the heart than when he speaks from the notes produced by the Department of Trade and Industry. My hon. Friend came across loud and clear and genuinely and sincerely when he departed from the bureaucratic notes that had been prepared for him. He should be his instinctive, sensible self more often and should not be influenced by the restrictions and limitations placed upon him by officials in his Department who are extremely well paid but who will not be affected in any way by the decisions that they make. I do not mean any disrespect to those who may not be in the Chamber but who can hear my remarks when I say that we have a duty to represent the best interests of the people.
How right my hon. Friend was to point out that free trade is an ideal theory but that in practice it does not work because nobody else practises it. Too often in the past, and not just in textiles and clothing, we have been the soft touch and have lost out.
For too long it has been argued by some of my hon. Friends, including my hon. Friends the Members for Darlington (Mr. Fallon) and for Loughborough (Mr. Dorrell), that the textile and clothing industry has been inefficient, overmanned and reluctant to introduce new technology and equipment, and that it is producing overpriced products that are protected from international competition by the multi-fibre arrangement. That is not a true picture of the industry.
Mr. Fallon rose—
Mr. Winterton: I shall not give way to my hon. Friend. I gave an assurance to the Chair that I would speak for only seven or eight minutes.
The industry has made impressive profits in recent years. Productivity per capita increased by 33 per cent. between 1980 and 1984 and a further increase is expected
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in the current year. Investment is running at £250 million per year. Of course, there will be more investment if the debate delivers the right message to the industry.
To put the reference to children's clothing in proper perspective, I shall quote from the Employment Gazette which shows the average percentage increase in the retail price index between January 1974, when the MFA became effective, and December 1985. In that period the price of children's clothing went up by 164 per cent. Some hon. Members may say that that was a substantial increase, but we should compare it with other increases in the same period. The price of bread went up by 243 per cent., potatoes by 333 per cent., beer by 407 per cent., rents by 317 per cent., rates and water by 440 per cent., electricity by 422 per cent., newspapers by 453 per cent. and post age by 370 per cent. The Government were partially responsible for some of those dramatic increases. The increase of 164 per cent. in the price of children's clothing is very modest in comparison with those other increases.
Mr. Fallon rose—
Mr. Winterton: I am not giving way.
The figures I have quoted show that the multi-fibre arrangement has been of great benefit to the industry arid the country.
We are talking about a driving, competitive industry which will continue to prosper if there is orderly marketing and the minimum of unfair competition. Output in 1985 amounted to £ 12,000 million and value added will exceed £4,500 million. That is a considerable achievement. Output could be higher if the unfair competition which the industry has faced for so many years is curbed. There should be much more reciprocity. How much I agree with many of the points made by the hon. Member for Oldham., Central and Royton (Mr. Lamond). We should seek to give business to the poor countries which do business with us and which would benefit from the opening of the British market. We should not just give quotas to the countries that are relatively affluent in comparison with many deprived countries.
The textile industry can make a major contribution to the economy, but the Minister should not overlook the fact that in the period from December 1978 to November 1985, for most of which the Conservative party was in power, employment in the textile and clothing industry dropped from just over 800,000 to just under 500,000. We have not had strikes or demonstrations. The industry is not irresponsible and the work force is not overpaid. The industry as a whole has invested and rationalised. It has sought to heed all the exhortations of successive Governments.
There is still muted optimism that the recovery can continue. Obviously the recovery of the last few years is welcome news. But how right my right hon. Friend the Member for Bosworth (Sir A. Butler) was when he said that the recovery is very fragile. The future of the industry will depend very much on the MFA.
Mr. Andy Stewart: I have been listening carefully to my hon. Friend. Does he realise that thousands of people in my constituency depend upon the knitwear and clothing industry for employment? Would it be helpful for him to know that I support his view that we must have a renegotiated multi-fibre arrangement in the interests of my constituents as well?
Mr. Winterton: Having been to my hon. Friend's constituency and having met many of his constituents, I know that they respect the way in which he seeks to represent their views and to stand up for an industry which is vital not only to Sherwood and Nottingham but to the United Kingdom as a whole.
Although there is optimism, may I point out that production in the textile and clothing industry is lower than when the Government came to power in 1979? Ministers must not think that, because of the MFA, the industry is bursting at the seams, even though production is up. Yes, production has started to creep up in the last two or three years, but it is still lower than when we came to office in 1979.
What of the future of the industry? Surely it depends on continuing trends of product innovation and new technology, but both require confidence in the industry. On the BBC2 "Money Programme" on 2 February David Alliance of Vantona Viyella said of his company:
"We have spent over £50 million in the last two years. We are prepared to spend a lot more—after we know the results of the MFA agreement."
That man is in every way the epitome of what the Government seek in industry. He is progressive and radical, introduces new technology, and is one of the largest and most important employers in the textile industry today. Yet that is the message that an industrialist, supporting the views of trade unions in the industry, delivered to the Government. Obviously, I support the broad principle of a free international market, but it must be free for all, not just every country but ours acting in its own interests.
I could refer to many matters about reciprocity, but I shall restrict myself to one or two. Fabric imports from Brazil to the United Kingdom are affected by a 13 per cent. level of duty only. When we send fabric to Brazil, it is subject to a levy of 105 per cent. Is that reciprocity? I hope that my hon. Friend the Minister will not say that it is because we know that it is not. Garments from Brazil to the United Kingdom are subject to a Customs tariff of only 15 per cent., but those from the United Kingdom to Brazil are subject to 105 per cent. Indeed, most of our products outside textiles and clothing are probably banned altogether. Therefore, let us get an element of reciprocity. It is vital.
My hon. Friends and, to a limited extent, Opposition Members have touched on many other important matters, so I shall not cover the same ground. The outcome of the present MFA negotiations will affect the whole shape of the international textiles and clothing trade to the end of the century and, perhaps, well beyond. It will decide the future of the lives of about 500,000 people who work in the industry. How right the hon. Member for Oldham, Central and Royton was to say that there is no point in divorcing the consumer from the equation because he is often also the employee. With no disrespect to my hon. Friend the Member for Darlington, if there is no purchasing power in the United Kingdom, it does not matter from where a product comes because there will not be much of a market for it.
Damaging uncertainty needs to be resolved. We need a robust renewal of the MFA, which can be amended if there is no longer a supply of a particular commodity, fabric or yarn. Then we must amend the quotas so that the
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clothing industry—the other half of the textile-clothing formula—can obtain the good quality product that it needs to survive.
Mr. Martin M. Brandon-Bravo: Will my hon. Friend give way?
Mr. Winterton: I hope that my hon. Friend will forgive me if I do not give way because I hope to sit down within 30 seconds.
It is vital to the United Kingdom that the Government are seen to support the manufacturing base, which is the true creator of wealth. The present uncertainty in the industry must be resolved quickly. The European Economic Community's acceptance of any proposed changes to weaken the MFA must be abandoned, and our civil servants in Brussels must be given a clear mandate by Ministers to deliver today's message from the House.
The Government must not betray an industry which has been of such vital value to the United Kingdom, which heralded the industrial revolution, and which has brought power, influence and wealth to our nation. It is prepared to play that role in the future. The Government have the opportunity today to ensure that it does.
5.24 pm
Mr. Paddy Ashdown: It is fair to say that my speech will not find favour with many hon. Members on either side of the House, and probably least of all with the hon. Member for Macclesfield (Mr. Winterton). If the hon. Member for Dagenham (Mr. Gould) would like to intervene, I shall happily give way.
Mr. Gould: I am tempted to add to the list of those who will disagree with the hon. Gentleman, the names of some of his hon. Friends.
Mr. Ashdown: I hoped that the hon. Gentleman would make that comment, which is why I tempted him to the Dispatch Box. I should like to make it clear that the policy that I announced when last I spoke and which I shall repeat today is agreed by every alliance Member with one exception. On this occasion one may refer to him as the Militant Tendency of the Liberal party. The noble defence by my hon. Friend the Member for Rochdale (Mr. Smith) of his constituents' interests is a matter for him which he has expressed clearly and pungently. It is no more accurate —indeed, it may be significantly less accurate—to say that the Liberal party is split because of his apostasy on the matter, than to say that the Conservative party is split because the hon. Member for Macclesfield disagrees with almost everything that his Front Bench says, or that the hon. Member for Dagenham (Mr. Gould) should be held to account for the speeches of his hon. Friend the Member for Coventry, South-East (Mr. Nellist).
Having said that what I shall say will find little favour, except perhaps with the hon. Member for Darlington (Mr. Fallon) and some other braver souls, I shall begin on points of common agreement. The textile and clothing industry is one of our greatest industries and our fourth largest. It has made phenomenal and significant strides forward in profitability and efficiency, and is to be greatly commended for that. Conservative Members may not agree but Labour Members may, that the most significant problem of the industry, in common with every other British industry, is that the Government have set out no framework, context or climate to encourage it. That

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problem is infinitely bigger than any problems from which it may suffer from our continuance in or withdrawal from the MFA. There is no strategy for the textile industry.
I sometimes believe that hon. Members who have constituency points to make may be better advised to drive the Government and push the Labour party towards a genuine strategy for the textile industry.
Mr. Brandon-Bravo rose—
Mr. Ashdown: I shall give way to the hon. Gentleman in due course.
In the absence of any overall strategy for the textile industry, which, God knows, it deserves and badly needs, it is not surprising that many employers and union members clutch on to their one hope—the MFA. It is the one positive piece of policy for them to hang on to. It is not surprising that under those circumstances they elevate the MFA to a level which is not borne out by the facts.
The Parliamentary Under-Secretary of State for Trade and Industry (Mr. John Butcher)rose—
Mr. Ashdown: If I may continue a little further, I shall give way, but the Minister's hon. Friend the Member for Nottingham, South (Mr. Brandon-Bravo) should be allowed to intervene first.
I recognise the industry's fear. Lest I am charged with speaking in an airy-fairy way, the second largest employer in my constituency is directly involved in textile interests. I am well aware of those interests. Moreover, I know what it is like to have to fight for a constituency interest against the prevailing mood because I have had to do so during the past few months.
Mr. Brandon-Bravo: The hon. Gentleman will accept —indeed, he has already done so —that he will find little sympathy from either side of the House for the alliance case. Will he tell the House why he can defend his constituency interests in the Westland affair and speak in such pejorative terms about his hon. Friend the Member for Rochdale (Mr. Smith), who in our last debate did not merely speak for his constituents? The hon. Member for Rochdale said, in effect, that he was the only member of the alliance who knew anything about textiles. It is a great pity that he is not present today.
Mr. Ashdown: I have no doubt that there are many in this House who are sorry that he is not here today. I have to say quite bluntly that I am not one of them, although I recognise that he is a doughty defender of his constituents' interests. To answer the hon. Member for Nottingham, South, I sought to protect what I believed were the best interests of my constituents and the interests of Britain's defence industry as a whole, in the Westland affair. I seek now to argue a case which will be for the best long-term interests of my constituents —the second largest employer in my constituency is the textile industry —and of the industry as a whole in my capacity as my party's trade and industry spokesman. I think there will be more significant points about which hon. Members will disagree than this particular one.
Mr. Butcher: There is one point which the hon. Gentleman should expand upon. He said that there was no industrial strategy coming from the Conservative benches. I have asked this question before. Perhaps the hon. Gentleman might like to have another go at answering it today. Given that a fairly honest and accurate estimate of
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alliance policy implies an increase in public expenditure of about £8·5 billion, how would they propose to protect industry and commerce either through increasing their tax take, or an increase in interest rates?
Mr. Ashdown: The Minister tempts me to go broader than this debate, but let me dispose immediately of some of his arguments by saying that we in the alliance propose an overall increase in the public sector borrowing requirement, which may amount to £2 billion. This is similar to the amount the Government have overrun on PSBR already. The significant difference between us is riot in terms of the size of those sums, but how they are disposed of. We would invest in Britain, and not pour the money in benefit down the bottomless pit of unemployment. If the Minister wants me to go into the detail of industrial policy, I would be straying much wider than this debate permits, but I will send him a recent pamphlet that I have written which will explain the situation much more clearly than I have time to do at present.
Those who are genuinely interested in this, one of the greatest industries of our nation and in the long-term jobs of those in the industry, workers who have done so well for Britain in the past, should press for a decent plan for textiles and for the EEC to develop its own plan for the industry. We have made great strides forward in efficiency, and we must consolidate them because in due course they will make the MFA unnecessary.
Allowing for transport costs, the West German industry, whose levels of efficiency we are fast approaching, would need only a 3 per cent. duty on yam and a 12 per cent. duty on cloths now to be able to compete head to head with the Koreans. The United States industry needs no duty. That is what we should be working towards, and not seeking to place indefinite reliance on a protectionist trading mechanism that is bound to fall in due course.
Those hon. Gentlemen who argue for the continuance of the MFA into the distant future ignore the fact that reliance on it puts us in the hands of other nations as well as our own. Surely hon. Members who have the long-tern interest of their constituents at heart should be seeking to make the industry efficient enough to be able to stand on its own feet without this kind of assistance.
Mr. Fallon rose—
Mr. Ashdown: I look for a long-term plan which would create a situation on which industry could rely, which is not in the hands of other nations and which would encourage the tremendous strides towards more competition and diversity. We shall also be encouraging the Government to be much stronger than they have been in terms of their reactions to the United States moves towards protectionism, which has so desperately affected the Scottish woollen industry in particular. It is within that overall context that we should look at the MFA.
There are three criteria by which we can judge our action. Firstly, is it effective as an instrument for allowing restructuring? Secondly, what are its effects in Britain and abroad? Thirdly, is there another way of helping the textile industry?
Let me take them in turn. Is it an effective instrument for restructuring? We have to recognise that the MFA is a major exception to the guiding principle of trade which underpins the GATT agreement, that of nondiscrimination and of trading arrangements made on a

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bilateral basis. We have to recognise that three quarters of our textile and clothing trade is outside the scope of the MFA. That non-MFA element is not diminishing, but is growing as a result of the MFA.
The amount of textile imports to Britain since 1974 has fallen from 27 to 24 per cent. There is no evidence there that the MFA is helping the restructuring of the clothing industry. It has not created the liberalisation of trade, which is supposed to have helped those areas of the world which have growing industries, nor has it achieved the restructuring of our own.
At best, there has been very little progress, and such progress as there has been is in the opposite direction. Yet we have an MFA which has been running for 16 years.
Secondly, I want to touch on its effects. I agree wholeheartedly with the hon. Member for Darlington. There is incontrovertible evidence that the MFA has cost the consumer a considerable amount of money. I know that it has faults and flaws, but the basic premise put forward by the Silberston report is accurate and supportable, and it indicates that there is a very significant cost to the consumer. Th Consumers Association has said that the prices of imported jeans and shirts from Hong Kong may well have increased by up to 40 per cent. as a result of quota purchases and the MFA.
The trading policy research centre has said that MFA quotas put up the price to the consumer in 1982 by 15 per cent. in some sectors, particularly woven trousers, knitted blouses, woven shirts and so on.
Let me take the point made by the hon. Member for Dagenham. It is true that Britain does not consist only of consumers but also of people who are in employment. The total cost of that small sector—woven trousers, knitted blouses, woven shirts and other woven goods —to the consumer of a rise in prices of 15 per cent. in 1982 is calculated by the trading policy research centre to amount to £170 million. How much better for industry, and for jobs, if that money was to be put directly into the industry to help to create those jobs. It is a ludicrous misuse of money to make consumers pay more when the money is not used to assist industry directly. It seems to me that that is one of the arguments in favour of ensuring that the MFA does not continue indefinitely. Nor does that account for the other effects of the MFA which bring about reciprocal action by Third world parties that can be damaging to world trade and encourage the growth of protectionism in the world. I am not a free trade freak, but I believe that this country of all nations suffers whenever there is a trade war or a protectionist war.
Mr. Gould: Even if one were to accept the hon. Gemtleman's calculation — which we do not —what would be the point of putting £170 million worth of investment into an industry for whose products there was no market, because the market had been taken by low-cost imports?
Mr. Ashdown: I remind the hon. Gentleman that the textile industry has been successful in going up market and bringing down prices by investing in new machinery. I remind him also that the West German industry, which is ahead of ours, can almost compete on the world market without quotas and restrictions, as can American industry.
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Why should we not exist in that up-market, lower-cost sector? Deployment of these sums would considerably help successful textile industries.
I return to the point made by the hon. Member for Macclesfield (Mr. Winterton) about children's clothing. He said that the price had increased by 164 per cent. and recounted a series of other items—carefully selected and taken from one of the manufacturer's briefings—where prices had increased even more. Surely, we must look at this matter on an apples for apples and a pears for pears basis. Surely it is reasonable to assess the amount by which the price of children's clothing has increased in comparison with clothing prices in general. That paints a different picture, because the price of clothing in general has increased by 127 per cent. and it is the poorest sectors of society who are paying most. That fact has been missed.
The poorest countries which we sought to assist through liberalisation of the MFA have been suffering. Since MFA 1 started, imports from the developed nations have decreased from 30 per cent., to 24 per cent., and 21 of the leading less developed countries have asked for a return to bilateral trade.
I do not wish to detain the House too long but I cannot resist remarking on the fact that the Labour party, which is always trying to convince us with crocodile tears about its commitment to Third world development, is insisting on this occasion on erecting and maintaining these protectionist barriers which so evidently damage the less developed and poorer countries. It is a remarkable fact that even the Government are more liberal with respect to the third world in these matters than the Labour party wishes to be. The only ally that the Labour party has in this area is the hon. Member for Macclesfield whose views on development problems are as well-known as they are unsupportable.
Mr. Gould: The hon. Gentleman cannot be allowed to get away with such an attack, especially when it is so inaccurate. One of the points I raised with the Under-Secretary of State was the failure of the EEC negotiating mandate to attempt to make room for concessions to poorer countries. The hon. Gentleman has failed to understand the point made by the hon. Member for Nottingham, South that the MFA is designated not to operate in an entirely protectionist way but to regulate improved access for the poorer countries.
Mr. Ashdown: It has not had that effect. That is totally at odds with the view of the world development movement, which is a well-respected authority in these matters.
We look for a decent plan for textiles and for a decent industry and economic strategy. We need recognition of the effect of exchange rates. As de Zoete and Bevan has said in a recent letter to the Financial Times, the effect of the exchange rate is infinitely more important to the textile industry than the continuation of the MFA.
I would not wish the MFA to be brutally or precipitately dismantled. That would be wrong. [Interruption.] Let me make it clear, as I did in the last debate on this subject, that I believe that there is a need for a renewed MFA for one more term. But it would be wrong to tighten it, as some hon. Members would like. I believe that any movement should be in the opposite direction. The industry deserves better than just "something on MFA". Everyone knows that there will be a day when the MFA

1131
will no longer exist. It is time we started to plan for that. We should be adjusting to the fact that the MFA is not a permanent institution to protect this nation and one day will have to go. We should put in its place something much firmer and better for the industry. We should be adjusting to that fact, not pretending that it is not there and conveniently hiding behind the delusion.
5.44 pm
Mr. Gary Waller: I give credit to the hon. Member for Yeovil (Mr. Ashdown) because he has at least been consistent and we know where he stands. The world of which he speaks is a world of ideals; it is not the world we know and understand. Like my hon. Friend the Minister for Trade and Industry, I look forward to the day when it will be possible to do without artificial restraints of this kind. But I believe that that day is some way off.
The hon. Member for Yeovil said that the multi-fibre arrangement had allowed the industry to continue without restructuring. That is far from the truth. There can have been no industry in our history that has had to restructure as quickly and as radically as the textile industry in the past few years.
The textile industry has not always been supremely efficient. It has nevertheless rapidly increased productivity, heavily invested in advanced technology and shown adaptability in the face of changing customer demand. There are new styles, fabrics and fashions. The industry differs greatly from 10 years ago. There has been a great shakeout. The industry has been fortunate because there is determined management, among the companies that remain, and a constructive approach has been demonstrated by trade unions in a way that is almost unique in British industry. I pay credit to them.
The hon. Member for Yeovil talked about the need to help underdeveloped countries. I agree with him, but he was wrong about means of doing so. I point out to those who would like to abolish the MFA that it is only because the MFA imposes restraints on the more advanced of the developing countries that the most underdeveloped nations have any opportunity to gain a foothold in world markets. Similarly, those who speak out against any liberalisation must recognise that a refusal to give any ground at all is an attack on the poorest peoples in the world as well as, in some ways, an attack on British consumers.
The MFA is a developing arrangement to allow orderly changes in trade to take place. That is why it must be renegotiated every few years. Some Labour Members talk as though any move towards liberalisation were a betrayal, but I do not believe that that is the view expressed by the industries. They recognise that the MFA is an evolutionary instrument. The idea that it must remain unchanged is fallacious. Nevertheless, we need to retain a strong agreement. The opponents of the MFA ignore the fact that it allows the volume of clothing imports to increase substantially and the fact that retail prices of clothing have risen much less quickly than the average of all retail prices.
During last year's debate and subsequently we have heard voices, including that of the hon. Member for Yeovil, urging that the MFA 4 should be the last MFA. I very much welcome the fact that Ministers have refused to give any such commitment. That stance has been vigorously affirmed today. Changes have been happening so quickly that it would be folly to try to forecast the position in 1990. It would be supreme stupidity to throw away our best bargaining counter. During the next round
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of GATT multilateral trade negotiations we shall need to retain it. The benefit to be gained from making a commitment at an early stage is small. The disadvantages stare us in the face.
Reference has been made in the debate to the world development movement. It, too, has suggested that the forthcoming multi-fibre arrangement should be the last, but all those who seek to improve the lot of the poorest countries should be aware that they would be the first to be swept aside in a free for all. One of the objectives of the negotiations should be to discriminate in favour of imports from the poorest countries, but to throw away any such arrangements would be extremely damaging to them.
Let no one imagine that the textile industry seeks to be mollycoddled. On the contrary, I am afraid that there are all too many instances of our industry being allowed to become the fall guy. France, Belgium, Holland and Italy got away for years with the extension of massive aid to their textile industries. Throughout that time the European Community failed to act. The Community is now tightening up its competition policy, and one of the first schemes to be vetoed was our own more limited CLOFT scheme. A few years ago the textile and clothing industries employed more than 800,000 people; they now employ about 490,000. However, they still provide jobs for far more people than most people give them credit for. In modernising themselves they have overcome considerable obstacles. They now look to the Government to ensure that there is fair competition—not special privileges—and stability so that they can invest for the future.
Nobody should underestimate the extent of the pressure for protectionism in the United States and the effect that further protectionism would have upon the diversion of imports to Europe, particularly to our very open market. American Congressmen seeking re-election every two years are vulnerable to single interest pressure groups. Although President Reagan has been firm so far in vetoing the Jenkins Bill that was passed by Congress, who can tell what will happen in August when it is brought forward again or, if not then, at a later date? Congress may then obtain the two thirds majority that it requires to overcome the presidential veto.
The tariffs that are operated against our exports to the United States are already a major barrier. Although our manufacturers have improved their quality and designs in order to increase their performance in the American market, nobody can doubt that if currency factors were to operate against us and that if protectionism were to be stepped up at the same time, not only would our export drive be badly blunted but we should also face massive pressure at home, which would result in the loss of many jobs.
We must also remember that the European Community's bilateral trading arrangement with China expires at the end of 1988 and that the growth of exports from China would have an explosive effect as the Chinese sought markets for their products. Genuine two-way trade exists with some states such as Hong Kong and Singapore. United Kingdom imports per head from them are not broadly out of line with imports per head by them of British textiles and clothing.
However, the position is very different for South Korea, Taiwan and Brazil. They hold down our exports annually to the value of just 6p, on average, per head of population. We imported from those countries £4·80 worth of textiles and clothing for each British citizen. For

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countries that must now be considered to be industrialised, this disparity is unacceptable. Other countries are highly protectionist, too —for example, India, Pakistan, Malaysia, the Philippines and Indonesia. But Korea, Taiwan and Brazil in particular are making rapid advances, and their populations include those with middle and upper income levels. They could therefore become significant markets for the high quality goods that are produced by the United Kingdom textile and clothing industries. Even if we could sell products to the value of £1 per citizen per year to Taiwan and South Korea, and perhaps only 50p per citizen per year to Brazil, it would mean a £100 million boost to our textile industry. It would create 4,500 new jobs in the United Kingdom.
When my hon. Friend the Minister for Trade takes part in the discussions about the new MFA, he should have engraved on his heart the fact that Korean tariffs against British goods range from 35 to 40 per cent. and that many imports are banned altogether; that Taiwan's tariffs range from 40 to 100 per cent. and that some bans likewise apply there; and that Brazil applies a tariff of 105 per cent., a tariff that at one stage rose to 205 per cent., although it has been somewhat relaxed. But Brazil bans the import of most of our textile products. All these countries enjoy generous access to our markets under the MFA, with tariffs—if they exist at all—up to a maximum of 15 per cent.
This cannot be allowed to continue. Before we relax our vigilance we need more than just assurances —for instance, from Korea —about future reductions. Countries with open markets deserve to be treated more favourably. If we are sufficiently strict with markets that are closed to us, it will give us scope to be more generous to more open markets.
The wool textile industry, in which I have a particular constituency interest, has said that for its products it is willing to accept greater flexibility. The wool sector is inextricably bound up with knitting and clothing. It is in those downstream sectors that it is vital to retain certain quotas. In the wool sector, quotas need to be retained on wool tops from south America, whose countries enjoy all the benefits of state aid, including differential exchange rates and freight rates and also export subsidies. Also let us not forget that state traders like Romania can dump cheap suits on our market at prices as low as £14 each. There are quotas that the industry is prepared to forgo, but others remain vital to its future prosperity and job creating potential.
Textiles are evolving fast. It is not a sunset industry. I am glad that Ministers have ceased to refer to it as a sunset industry. It is grasping new opportunities and meeting new challenges, using the most modern techniques that high technology can offer. The industry will be encouraged by the speech of my hon. Friend the Minister for Trade, but it has been disappointed on many occasions and it will wait before it can cheer the outcome of these negotiations.
5.57 pm
Mr. Frank Haynes: I share the confidence of the hon. Member for Macclesfield (Mr. Winterton) in the new Minister for Trade. I know that he put a great deal of work into the last Bill that dealt with the trade unions. I hope that he will put as much work into the renegotiation
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of the multi-fibre arrangement. The workers in the textile industry and its management are to be congratulated. They have worked together to overcome massive problems. They have had to lay off workers, who have then joined the dole queue.
The Minister for Trade suggested that there has been a recovery in the textile industry. I accept that, up to a point, but almost at the beginning of the Minister's speech my hon. Friend the Member for Bradford, West (Mr. Madden) intervened to say that 500 jobs a week had been lost in the industry since the introduction of the MFA. The MFA is now being renegotiated, but the Minister will be up against formidable problems. Reference was made to the battles that we shall have with European Community officials in Brussels.
There is a problem with the negotiating mandate. We are really up against it. The Commission's paper containing the draft negotiating mandate is a detailed document and it contains about 20 separate proposals to liberalise and weaken the existing regime.
I listened closely and wanted to hang on to every word of the hon. Member for Yeovil (Mr. Ashdown). I am pleased that he is not the Minister. I know that he has left the Chamber, but I feel that I must make these remarks. It was not many days ago that he was fighting for the people of Westland because it is in his constituency, but today he made a contribution to the debate as though he could not care less about the textile industry. It is obvious to me that he said that there should be no protectionism. He was trying to protect the workers in his constituency. We are trying to protect the workers within the textile industry and other industries in this country in the hope that those industries will expand and will create more jobs.
I have a little faith in the Minister simply because he has been successful in accruing capital. That is a step in the right direction. If he can manage that, which he has because he has a bob or two, he might be successful in breaking down the Commission. The Commission should be broken down because of the way in which it conducts itself and speaks. It is excessively liberal and it will greatly increase import penetrations —I am talking about the draft mandate which I mentioned earlier. The Commission will also remove or substantially weaken the safeguard mechanisms built into the MFA, and it will create new uncertainties in the regime and it will become legitimate for imports substantially to exceed quotas. We must control dumping as well as insist on quotas. The hon. Member for Yeovil could not care less about that and it clearly suggests to me, and I am sure to other hon. Members, where his opinions and ideas lie.
Mr. John Whitfield rose—
Mr. Haynes: I am sorry, but I shall be as brief as I can because other hon. Members want to speak.
We must have meaningful negotiations with a view to achieving something which is acceptable. I again part company with the hon. Member for Yeovil. He is talking like the previous Minister, now the Secretary of State for Trade and Industry, who was talking about a once-and-for-all agreement. We must have the right to renegotiate if it is necessary in the interests of our workers and industries. The door must be kept open and there should be no question of closing it once and for all.
Mr. Whitfield rose—
Mr. Haynes: I will not give way because I promised Mr. Speaker that I would be brief in the interests of other hon. Members.
I agree with the Minister that the biggest danger is Europe. The hon. Member for Yeovil suggested that the Labour party would not do what it says it will for underdeveloped countries. If we get into office, we will show the hon. Gentleman what we mean by helping underdeveloped countries.
I come back to the point made by the Minister. When we talk about Europe, we talk about developed countries, and that is the problem. I wish the Minister well in his negotiations and I hope that we will get regular reports from the Dispatch Box about how successful he is being in our interests. It is the Minister's chance to make a name for himself. He did not make a name for himself in his previous Department, but he now has the chance to do so in the interests of the textile industry, particularly hosiery and knitwear.
In my constituency I have seen the suffering, and the massive amount of work put in by the trade unions and management to try to overcome the serious problems. It is a question of the management and unions agreeing. They have committed themselves to investment within the industry. The Government have to back that up by renegotiating in the interests of the industry. I hope that when the Minister goes to the negotiations he will not let the other countries push him around. He should give them some of what they have been dishing out to us over the past few years. I give the Minister just one warning—"Do not go rushing in and cock it up".
Several Hon. Members rose—
Mr. Speaker: Order. I made an appeal for brief contributions. The speeches have not been very brief. Six hon. Members want to speak, and I understand that the first Front-bench speaker wants to rise at 6.35 pm. May I again make a plea for brief contributions?
6.6 pm
Sir John Farr: In view of your remarks Mr. Speaker, I shall not refer to the preceding speeches, and I shall not refer to some of the Liberal nonsense which the House has heard and not particularly liked.
For the sake of the east midlands and for those with knitwear interests it is essential that the MFA is renewed. It has a fantastic record, and I cannot understand why so many people think that the MFA should be dismantled. Despite having what some people who are opposed to it regard as a restrictive structure, since the establishment of the MFA in 1973 the developing countries have increased their share of world textile trade from 30 to 38 per cent., while the industrialised countries' share of the textile trade has fallen from 59 to 49 per cent., and a similar patten can be seen with all the other fabrics.
In the 12 years since the inception of the MFA, the developing countries have steadily increased their share of world trade. The big advantage is that it has been done in an orderly way with which the developing countries have been able to cope. If, as some would wish, our Government went to Brussels, or wherever the negotiations are to be held, without a mandate to renew a vigorous MFA and it was abandoned, one of the big sufferers would be the developing countries, because the
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MFA is a form of protection for them. It has been made quite clear by the United States that if the MFA is abandoned, it will introduce unilateral restraint measures.
I shall skim on quickly. China is another world giant which is flexing its muscles. What would that country do if there were a total lack of restraint? There is no doubt that abandonment of the MFA would enable China to expand its export sales enormously at the expense not only of the developed countries but of the lesser developed countries and some of the newly developed countries. In other words, abandonment of the MFA would release the strength of China and its massive manufacturing capacity on to world markets.
Time forbids me to say what people associated with the knitwear industry in my constituency think of the Silberston report, whose conclusions are wrong. This is the first time that the House has had to touch on it since it came out. Basically, its assumptions are based on inadequate evidence, and solely on the cotton industry, which is a unique case in the textile and clothing trade. We are certain that the report's calculations and predictions about employment and job losses are hopelessly out of date and wrong.
The MFA has done much for the British knitwear and textile industry. It has enabled many of our companies to become a little more modern and to get more sophisticated machinery, with great co-operation from the work force. This will enable the British textile industry to compete in the world market by keeping ahead with modern machines. We have had the most fantastic co-operation from the work force and the unions, and all this would be placed in jeopardy if a free for all were to obtain.
The MFA gives guarantees and growing access to textile and clothing imports from developing countries with average growth rates well in excess of the very low volume of growth in demand in the United Kingdom market. Our market had an average growth of under 0·4 per cent. a year between 1978 and 1985. The MFA can help the textile and clothing industries to develop in the poorest countries. The House has been concerned with famine in the world and the needs of the impoverished countries, on which the Government have a good record. In the textile and clothing sectors the MFA can help to protect the emerging nations, which would be swept away if there were unrivalled and unbridled competition.
I have the honour to represent part of the east midlands —a small but not unimportant part. In the knitting sector alone, two thirds of the people employed come from the east midlands. Some 124,000 were employed in 1974, but this has been reduced to 81,000. No Government, and particularly not my Government, can permit that continuing decline.
6.13 pm
Mr. Tom Torney: Contrary to what the Minister said, I assure him that both the employers and the trade unions in the textile industry are united in their demand for the continued protection of the MFA. I suggest that he asks his researchers to do better with their brief on that point in future.
Wool textiles have suffered serious setbacks in trade over many years. Bradford and its districts, of which I represent part, are evidence of this with derelict mills, open spaces where mills once stood and, in a few cases, mills being used for other purposes. All this has resulted in considerable unemployment among textile workers.

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Despite an excellent relationship between the trade unions and employers in the industry, there has been mass unemployment, but nobody can claim that textile workers are highly paid, for it is a low wage industry. The MFA has undoubtedly made a major contribution to the fight back by the industry to recover some stability and confidence. Employment has stabilised at around 38,000 or 39,000 in the woollen textile industry.
There has been significant investment in the latest technology, productivity has risen, and considerable improvements have been made in colour, design and marketing. In Bradford, as in the whole of west Yorkshire, we can produce the finest textiles and suiting cloths in the world. We can compete in the world markets with the best, but not with countries that produce textiles but pay their workers only slave rates, with few or no fringe benefits.
However, we cannot compete with countries that, by various means, subsidise their textile industries, fiddle their supplies though other countries, and even indulge in false labelling to deceive the purchaser that the garment is British made. This is grossly unfair competition and such actions are losing the jobs of other workers. The MFA did not stop every loophole of unfair competition, but it went a long way along the road.
The Government appeared to be taking a far too relaxed attitude in the run-up to the renewal of the MFA. They do not seem to be fully prepared to argue with the so-called EEC partners who wish to weaken the MFA. Will the Government allow the textile industry to go the way that they have allowed so much of our manufacturing industry to go and to close down, with consequent additions to the continuing job losses in our country? It is criminal to do this after the years of hard work put in by everybody to fight back against recession and achieve some stability in the textile industry. To consolidate our industry and to maintain existing jobs, we must have the MFA renewed, and it must be no weaker.
6.16 pm
Mr. Tony Speller: There are some excellent textile firms in the most unlikely places, as my hon. Friend the Minister for Trade will agree. Later this month, my hon. Friend the Member for City of Chester (Mr. Morrison) will open yet another high-tech extension in Barnstaple to the factory complex run by Norman Sussman, a man famous thoughout the industry and greatly respected and appreciated in north Devon. Without some form of MFA, neither this extension nor previous ones would have come about. Neither would extra jobs have been created, nor existing jobs safeguarded.
Some obvious economic lessons can be learnt from the textbook. Free trade in textiles or food means lower prices, which seems excellent until we realise that lower prices caused by vast imports are followed by loss of jobs. That applies as much to shirts as to food. Free trade also means inundation by imports from overseas, leading to the destruction of the factory and the industry. Inevitably one becomes a captive market, with no productive capacity left. We have seen this, for example, in the motor cycle industry.
Is protectionism the answer? It means stable or higher prices, which are bad for the consumer and brings instant reprisal against our own exports. There is as little logic, in this day and age, in saying that we should have all free
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trade as there is in saying that we should have all protectionism. We have to seek a straightforward and logical compromise.
I ask my hon. Friend the Minister to take into account three points about the MFA that have tended to be lost in today's debate which has been more on principle than practice. By all means update the MFA, but in no circumstance destroy it or make noises that sound as if it will be destroyed 12 months or so hence. Secondly, do not allow any increases in quota when there is no increase in the total market. That way lies lunacy.
Finally, let us have no switching of quotas between EEC countries. This would be impossible to police. The United Kingdom's tight and well-organised distribution network means that we would be inundated with imports and our industry would disappear. It makes no sense and is not the way in which this House should look after the textile industry.
6.19 pm
Mr. Max Madden: I declare my interest as a Member sponsored by the Transport and General Workers Union, which represents many workers in the textile and clothing industries.
During the debate, many hon. Members have rightly paid tribute to the industrial, economic and social importance of the textile and clothing industries. It should be noted that the industry's sales are worth £12 billion and exports are worth £3 billion. The importance of the industries for employment has already been recognised. In Britain, 500,000 people are employed in those industries.
It is sometimes overlooked that many people, who are not directly employed by the industries, are dependent on them, such as in transport, engineering, chemicals and the financial services. The future of the industries is important, and we all wish to see them expand and their prosperity continue.
There can be no argument about the major importance of the clothing and textile industries, but we must remove some of the misunderstandings about the multi-fibre arrangement. It is a modest attempt to try to manage and plan trade. The arrangement allows for the growth of textile and clothing imports, although judging from some contributions during the debate that has not been readily understood.
We need a strong and effective multi-fibre arrangement to provide our domestic industries with the confidence to take decisions to plan and expand investment. The remarks, which have already been mentioned, of the chief executive of Vantona Viyella plc demonstrate the importance that many leading industrialists place upon a renewed, strong and effective MFA.
We must recognise the importance of the textile and clothing industries to areas that are characterised by high unemployment. West Yorkshire is a notable example. We have heard that the average loss of jobs during the lifetime of the current MFA has been 500 a week. Increased productivity, new technology and other developments will cause further job losses.
We must sustain employment in high unemployment areas. The textile and clothing industries are extremely important to many communities that are ravaged by high unemployment. A recent report published in Bradford looks to the future of Bradford in the year 2000. It points out that, rather than attracting new industry, we should

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invest in existing industry if Bradford is to stand any chance of developing as a major industrial city in the year 2000.
The textile and clothing industries must be a major target for new investment. Government policies should be directed towards encouraging investment in those industries to ensure that employment is expanded rather than reduced and to ensure that those industries are helped in every conceivable way.
I take issue with the hon. Member for Yeovil (Mr. Ashdown) who spoke on behalf of the alliance. He seemed seriously to misunderstand one essential point. He made much in his speech about the fact that the poorest and least developed countries had not gained from the advantages that our markets can offer them. He misunderstands. One reason that those countries have not used up their quotas is that demand in Britain has been low during recent years. Britain has had a major recession with 4 million unemployed, who are not buying as much clothing and textiles as in the past—wherever they are produced.
The hon. Member for Yeovil made a special point about children's clothing. We have a depressed market because of the recession, but there are added problems with children's clothing. There are now fewer children and young people than in years past, but that has not been recognised by the hon. Member for Yeovil.
Mr. Ashdown: Will the hon. Gentleman give way?
Mr. Madden: No, I wish to make a brief speech.
Many people are dependent on the textile and clothing industries. Women represent 63 per cent. of the work force. If we are to provide the chance for women to seek and keep employment, it is important to maintain employment opportunities in those industries. Many young people and many of those who originate from the ethnic minorities work in those industries.
Recently, the Government gave small amounts of money to help the inner cities. A positive way to help the inner cities is to encourage investment in the textile and clothing industries, which operate in many deprived areas. I urge the Government to recognise their importance to the disadvantaged and depressed areas of the United Kingdom.
West Yorkshire has the lowest pay rate of the nine main urban regions of the United Kingdom. West Yorkshire has almost 500 clothing firms, which are covered by the wages councils agreement. Most of those firms pay rates as low as £65 to £78 a week. In many cases the rates fall to £50 a week. Average full-time earnings in west Yorkshire are £150 a week, but in clothing and textiles average earnings are £100 a week.
Systematic and substantial overtime is being worked in many clothing and textile firms. Instead of allowing substantial and systematic overtime, which is necessary to many workers, because of their low basic earnings, the Government should try to expand employment opportunities.
I wish to discuss the least developed countries. If the Minister has not already read the TUC document published a year ago "A Fair Balance in Textile and Clothing Trade", I urge him to do so. The report makes a clear case. It dispels the Minister's notion of disunity among trade unions in the textile and clothing industries. It sets out clearly their sincere concern for the future of the industry in the poorest and least developed countries. Regardless
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of what the hon. Member for Yeovil has said, if it were not for the limited help of the MFA the textile industry of underdeveloped countries would be smashed by the super-efficient textile industries of Taiwan, Hong Kong and South Korea. I urge the Minister to meet trade unions representing textile and clothing workers to hear their case for an effective and strong renewal of the MFA and their suggestions about how to assist the least developed and poorest countries. I hope that he will take advantage of that.
I sensed from the Minister's speech that he is new to the job. He will have an exciting journey of self-education and revelation. He should visit some of the areas that we represent and see the history of dereliction. Those who worked in our industries have paid the price for new technology, unfair competition, overseas subsidies and all the fiddles and the rackets with their jobs. Although alit the members of some of my constituents' families used to work in textiles, most of them have been made redundant. They have been out of work for two, three or four years and have no prospect of getting other jobs. That experience is not shared by many hon. Members.
I end by quoting from a letter recently published in the Financial Times from Peter Booth, the national secretary of the textile group of the TGWU:
"If the present EEC draft negotiated mandate is adopted at the next Council of Ministers meeting and becomes part of a renewed MFA, it will jeopardize 100,000 textile and clothing workers jobs in the UK. In view of the 300,000 jobs already lost to the industry since 1979 and the shameful level of unemployment at 3.4m, more care needs to be taken to ensure the future of this valuable manufacturing industry and the 500,000 UK workers still employed within it."
That is the challenge that faces the Minister, and we shall watch him closely. We expect to be kept informed of the progress of the negotiations. I assure the Minister that many people who depend directly and indirectly on the textile and clothing industries will wish him every success, but they will not tolerate a sell-out by the Government. A great deal rides on the negotiations. I hope that the Minister will take full account of everything that has been said in the debate and will ensure that the next MFA is not significantly more liberal than the present one.
6.32 pm
Mr. Roger Sims: During the MFA negotiations, Hong Kong will be pressing its case in the appropriate quarters. I hope that the United Kingdom Government will give Hong Kong the fullest possible support, and that especially in the inner councils of the European Community, where Britain is represented and Hong Kong is not, they will ensure that Hong Kong's interests are fully represented.
On 15 January, the previous Minister for Trade said in answer to a question from me on the arrangement:
"We certainly take the view that it should give favourable treatment to the poorest developing countries and to developing countries with very low barriers to British exports, which includes Hong Kong." —[Official Report, 15 January 1986; Vol. 89, c. 1065.]
I hope that my hon. Friend the new Minister for Trade will confirm that that is his approach. The previous Minister mentioned "very low barriers", but Hong Kong has no barriers on textiles. Not only are there quota barriers, but there is 14 per cent. duty on textiles and clothing imported into the United Kingdom.
Under the MFA, Hong Kong has suffered a reduction in quota from 16 to 11 per cent. My hon. Friend said that

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one subject to be discussed in Brussels is whether the so-called dominant suppliers, of which Hong Kong is the most important, should be treated less favourably than other countries. I must tell him that such a move would be most unfavourably received in Hong Kong at this very sensitive time. I strongly urge him to resist it with the robustness of which we all know he is capable. The words "treated less favourably" imply penalties, and Hong Kong has been penalised enough already.
The theory of the quota reductions was that they would benefit the developing countries. That has not been the case. Indeed, the developed countries have benefited, with the EC countries increasing their share of the United Kingdom market from 38 to 48 per cent. The developing countries have not been helped, and many of them have said that they do not wish the MFA to be renewed.
Hong Kong has no natural resources other than the skill and industry of its people, who manufacture a wide range of high-quality products of good value, of which textiles are among the most important. At present, Hong Kong's position is one of certainty and uncertainty: certainty in the sense that the agreement with China about 1997 and beyond has been finalised; and uncertainty about the political and economic developments that are likely before then.
Hong Kong is an important supplier and an important and completely open market for British goods —at present to an annual value of £949 million. A statement that Hong Kong's case is understood by the Government and will be robustly championed by them in the negotiations would do much to reassure the people of the territory. I hope that my hon. Friend can offer that reassurance.
6.35 pm
Mr. Geoff Lawler: A welcome feature of the debate has been the many positive references to the textile industry—references that are long overdue. We should recognise its significant achievements. The debate is not about propping up the industry, but about maintaining a fair and stable trading environment that gives the industry confidence for future investment. There is no doubt that confidence is returning to the industry, especially the wool textile industry, which has increased productivity by one third and increased exports during 1985 by about 16 per cent., reaching a record £600 million. It still employs a healthy 14,500 people in Bradford.
There is equally no doubt that the developing countries have a great potential to penetrate United Kingdom markets on such a large scale as to affect British companies adversely. Many of those countries have the heaviest protections and the most effective shields for keeping out imports. As long as trade is one-directional, we must continue to have safeguards. The textile industry used to sell south of the equator, but that entire part of the world, as with others, has been cut off, not because British manufacturers cannot meet prices or deliver goods on time, or because our designs or fashions are out of date, but because of the tariff barriers imposed by those countries.
The wool textile industry and textiles in general can export. During the past few years they have found new markets and developed existing ones with great
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effectiveness, but no matter how good they are, they cannot sell in countries which have barriers, such as 50 per cent. in South Korea and 105 per cent. in Brazil. That inequality must be recognised in the renegotiation of the MFA. The new agreement must allow for reciprocity, so that we can serve notice on those countries that we will not tolerate their prohibitive barriers and that we wish to encourage free trade.
Britain cannot consider its position in isolation. There are great protectionist pressures across the Atlantic—probably greater than those in Britain—as a result of the dramatic increase in December last year of 41·3 per cent. in textile and clothing imports into the United States. During the past four years imports into America have doubled—imports to a market that has had little or no growth. Congress responded with a Bill that was vetoed by the President, but it is likely to be reintroduced at election time, when it will require only another 6 per cent. of the votes to see it through.
If, as is likely, America takes a tough line in negotiations, the EC must not take a weaker line. If it does, we shall suffer the effects of a significant trade diversion from a United States market that takes in £15 billion, as opposed to our £5 billion worth of imports.
Healthy profits and investments, and technological change, will be factors in making the MFA unnecessary. We do not call for an endless MFA, but we do call for an effective fourth agreement, because that will eventually reduce protectionist pressures and lead to liberalisation. The textile industry is not a sunrise industry, nor is it a sunset industry, but there is a great fear that it could be sundown for many British companies if a liberal MFA is agreed in the face of what is happening elsewhere.
6.40 pm
Mr. Alan Williams: The House must send a clear and unequivocal message to Brussels today, and that message is simply, "It is not on." We have heard whispers of what is being considered by the Commission. The proposals that we have heard about are utterly unacceptable. They are particularly unacceptable to this country in the aftermath of the first ever deficit on manufacturing trade.
Against that background, how on earth can we afford to say to Europe, or to the rest of the world, that we can write off, or see severely damaged, an industry which contributes £12,000 million a year to our national income, which provides 10 per cent. of all manufacturing jobs and has 500,000 workers in areas where, if they lose their jobs, they will be destined to become not just unemployed, but long-term unemployed?
Another message which Ministers must take to the Commission is that perceptions about this industry are out of date. The textile industry is not a hang-over from the 19th century, which is how the Commission sees it, and it is not a "no-tech, low-tech" industry. The industry, in an age of new technology, is at the forefront in pioneering new techniques. In fact, the concept of old industry and new industry has no relevance in an era in which the industry is applying the new technologies of robotics and the microchip.
That is demonstrated if we consider the world leaders in the industry. The export leaders do not come from the Third world. West Germany dominates the world in textile exports, and Japan is second. In December, the Financial Times carried a small article headed "Star of the Stock

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Market". The article was referring to Tokyo and the star of the stock market was the Japanese textile industry. The Japanese have invested to ensure that that industry is at the forefront of new technology. We can do the same, and our industry is trying to do that. Indeed, as he has been quoted as saying, David Alliance has invested £50 million to show that the industry can achieve that, and he is willing to invest more.
We must face reality. If we are to have a high investment industry, we must have an industry that faces certainty. To achieve high investment, the people who are risking their money must be certain of a return, and there must be profitability. If there is no profitability, there will be no resources to invest.
We have heard today from both sides of the House of the crucial importance of the industry to employment. The industry is concentrated in those areas of greatest deprivation where, as I have said, there is no prospect of alternative employment for those who lose their jobs. Superimposed on that is the problem of the inner cities. Unfortunately, in too many of our inner cities ethnic minority women see the industry as the only possibility of earning an income.
I welcome the Minister for Trade to his new position. We have heard today that he is thinking of liberalising the MFA 3, which is now coming to an end. He should bear in mind what other hon. Members have said—
Mr. Alan Clark: I did not say that.
Mr. Williamsthere will be four or five months for further negotiations on the bilaterals.
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An early decision is unwise because it will leave us exposed to what the United States eventually decides to do. If, as the president has intimated, the United States takes a rigid, strong and defensive line, as endorsed by recently negotiated bilaterals, we all know where the diverted exports will end up. We all know that we will see an unfair proportion of them here.
It is also unwise because we would reveal our hand at too early a stage. It is unwise because it would not give Spain and Portugal adequate time to represent their positions. I understand, as my hon. Friend the Member for Dagenham said, that Portugal has intimated that it would want to reconsider the interim arrangements within the EEC if the Commission's proposals were adopted.
It is not just ludicrous, but absurd, for the Commission to consider carrying on the multilateral and bilateral negotiations concurrently. That makes no sense at all. The bilaterals, as negotiated by the EEC officials, will create a straitjacket which, by July, will mean that there is no room for manoeuvre. The whole position will be predetermined. The Government must tell the Commission that bilaterals are not to be concurrent, but should follow. In those bilaterals, the EEC officials must be limited by what they have been told on the multilateral decision. There must be no drift or undermining of the agreed position, as happened so often in the past.
Even the proposed basis for the negotiations is wrong and untenable. We are speaking of allowing a growth rate that bears no relationship to the market's past growth and probable future growth. Between 1978 and 1985 we saw a growth of 0·4 per cent. a year in the British market, and yet even in group 1, the most sensitive area, the EEC is considering permitting a 1 per cent. growth rate and a growth rate of more than 6 per cent. in the rest of the areas for imports.
The base that will be used to decide the quotas and the growth rates is unacceptable. There should be cuts in the dominant suppliers' quotas to make greater room in the poorest countries. We should relate the negotiating position to actual trade, not to unfulfilled quotas. If we relate them, as the EEC intends, to unfulfilled quotas, with a built-in growth factor, and if the participating countries, with that headroom, were to decide to take up their full quotas with the extra growth, there would be a surge of imports with which we could not cope.
If the mandate were approved, it would leave Britain helpless in the face of any such surge. There would not just be the removal of quota restrictions on many items, but the existing safeguards—inadequate as they are—would be removed. The basket extractor would be relieved and quota switching would be permitted. A combination of those four factors would have a disruptive impact on the British market. They would maximise uncertainty and destroy investment in the industry's future.
I ask the Government to tell the EEC that the proposals that we have heard from Brussels must be seen as a nonstarter. The House regards the mandate suggested by Brussels as weak, damaging and completely unacceptable.
6.50 pm
The Parliamentary Under-Secretary of State for Trade and Industry (Mr. John Butcher): In past trade and industry policy debates, it has been important to put some information on the record quickly to identify those matters on which there is unity in the House.

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Hon. Members will have heard me say previously that one statistic underpins all our considerations of trade and economic policy. It is estimated that 80 per cent. of what this country manufactures is internationally tradeable, whereas only 18 per cent. of service sector activity is internationally tradeable. That demonstrates that the nation has no option other than to retain and enhance the United Kingdom's manufacturing base. To that extent, the speeches of my hon. Friend the Member for Macclesfield (Mr. Winterton) and the right hon. Member for Swansea, West (Mr. Williams) showed some bonding. They were an echo of the speech made by my hon. Friend the Minister for Trade. I hope that they will be encouraged to hear that confirmed.
I have no doubt about the importance that my right hon. Friend the Member for Bosworth (Mr. Butler) attaches to the industry as a key wealth creator in the east midlands. I share the view of the hon. Member for Oldham, Central and Royton (Mr. Lamond) that, where there is room to manouevre within the MFA, it should be used on the basis that we identify the poorest countries, by the United Nations definition, and those of the newly industrialised countries which are the most liberal free traders, including Hong Kong, which, in my view, should be rewarded for its free trade policy because it is the nearest that we can see to a completely open market in every sector, and those newly industrialised countries which may be lingering in their affection for protectionist measures in their mature industrial sectors. The MFA should send its own signal of encouragement of liberalisation to those newly industrialised countries.
I share the pride of my hon. Friend the Member for Bradford, North (Mr. Lawler) and of the hon. Member for Yeovil (Mr. Ashdown) in the great strides that have been made by the texile industry. There was an article in The Sunday Times last week in which Ian McArthur, the director of the British Textiles Confederation, was quoted as having made some pertinent observations. He pointed out:
"Exports were up by 13 per cent. in value last year, to reach a record £3,136 million. 'It has been a remarkably good year,' says Ian McArthur … Overall, early industry estimates suggest a 4 per cent. rise in textile and 1 per cent. increase in clothing production in 1984. Productivity is certainly up again, says McArthur, although it is too early to give a precise figure. While there is still a £2·3 billion trade deficit in clothing and textiles, there are signs that its rate of increase is slowing. McArthur describes his mood as one of 'sober optimism'."
That was reflected in a number of speeches made this afternoon from both sides of the House.
My hon. Friend the Member for Keighley (Mr. Waller) correctly pointed out —this was echoed in other speeches—that we are not talking now, and I hope we never were talking, of a sunset industry. We are talking of a mature industry. By strapping on new technology and introducing new production techniques, the industry is becoming —if I may coin an alternative phrase —a sunshine industry. It is an industry that is living on its wits, adding value, moving up market and becoming involved in new designs.
I shall put in a plug for an immensely underrated policy which could be of benefit to the textile industry. I am looking at my hon. Friend the Member for Darlington (Mr. Fallon) when I preface my remarks by saying that it is a scheme which works with the grain of market forces. We
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can supply to the smaller and medium-sized textile and clothing companies the best designers in the world at a discount, because we will pick up 75 per cent. of the costs of putting in those best designers for 15 man-days work. That will provide products which are relevant to today's market demands, which is surely one of the best ways to help industry fight back in international markets.
Mr. Whitfield: My hon. Friend referred to the hon. Member for Yeovil (Mr. Ashdown). Does my hon. Friend agree that the extraordinary statement that the hon. Gentleman made about the MFA somehow holding back the restructuring of the textile industry, which has largely taken place, is a sign of the Liberal party's lack of understanding of the textile industry? That is further demonstrated by the absence from the debate of the leader of the Liberal party who, by his absence, is presumably showing that he is prepared to abandon the Scottish textile industry to the sacred cow of free trade.
Mr. Butcher: My hon. Friend has made an interesting point. Bearing in mind the Liberal party's fixation with open government, the hon. Member for Yeovil is duty bound to send copies of his speech to those many constituencies in Lancashire, Yorkshire, the east midlands and Scotland which may wish to be comprehensively informed of what is apparently official Liberal party policy.
Mr. Ashdown: I mentioned the Scottish wool industry. My right hon. Friend the leader of the Liberal party is not here but no more is the leader of the Conservative party. The policy I explained is that of the Liberal party. It is the policy of the alliance as expressed almost word for word in my speech on 8 May last year. That speech has been circulated with great effect to those of my hon. Friends who represent textile constituencies such as Leeds, West and Colne Valley. It is a speech of which I and they are proud because it sets out a policy at variance with that of the old alliance between the Labour party and the Conservative party.
Mr. Butcher: I give an undertaking to all hon. Members who have asked questions that we shall write to them giving as clear an answer as we can at this stage of the negotiations.
On the last occasion that I attended a meeting in Brussels on this matter, the Dutch President found that there was such a lack of unanimity that he adjourned the meeting for a fortnight. It is not easy to write to hon. Members and say "this or that is the position" because at the moment there are nine or 10 different positions.
Mr. Nicholas Winterton: What is ours?
Mr. Butcher: The British are not on the flank of the most liberal or most protectionist stances of the various nations.
I should make clear our position on subsidies in other parts of Europe and of the world, particularly because the major growth in British imports has been from the European Community; it has not been from the MFA countries.
It is rightly argued that subsidies distort competition within the Common Market, and if such distortions are allowed the British Government should subsidise industry. My hon. Friend the Member for Keighley (Mr. Waller) reminded us that our own proposal for a sectoral aid scheme, CLOFT, was disallowed by the Commission. Our

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strongly held view was that this meant that no member state should operate aid schemes for this sector, and we pressed the Commission hard on this. I am pleased to say that by the middle of last year the remaining sectoral aid schemes in other member states had been terminated.
My hon. Friend the Minister for Trade will no doubt bask in the unanimous warmth which descended on him during this debate. I share the concern of the House that my hon. Friend should, bearing in mind the comments made by hon. Members this evening, take his remit with full vigour into the crucial discussions on an important industry.

Fraud Trials (Roskill Report)
Mr. Speaker: Before I call the Secretary of State for the Home Department, may I say that in this debate, as in the last, about a dozen right hon. and hon. Members wish to take part. At the beginning of the previous debate some of the speeches were unduly long which meant that some hon. Members who were called later had to compress their speeches into two or three minutes. I hope that in this debate there will be a fairer distribution of time.
7.1 pm
The Secretary of State for the Home Department (Mr. Douglas Hurd): In the month since the publication of the Roskill report there has been much interest in the media concerning its recommendations, and this debate gives the Government an opportunity to hear the views of Parliament. I am glad it has been possible to arrange early debates, both here and in the other place, because it fits exactly the structure of our response to this report, which is to consider, consult and conclude with care and speed. I do not intend to make a long speech this evening because this is an opportunity for the Government to listen rather than to pronounce. The Government will take full account of the views of this House before we reach a firm decision on a report which is important.
A will to listen does not mean a will to delay. We intend, in the next Session of Parliament, to introduce a criminal justice Bill which will seek improvements in many aspect of the criminal justice system and the powers of the courts. The Bill will be wide and substantial and the proposals following the Roskill report will be a crucial part of the Bill. A White Paper will be published shortly which will set out the proposed measures in greater detail.
We intend to create and seize every opportunity for stern action against fraud. We think this is crucial for the City and for the country so that private enterprise can flourish in a clean environment. It is crucial for public confidence, and our competitive position in international markets that the probity of our financial institutions, especially in the City, should be beyond doubt. Those who save and invest, whether grand or small, should be well protected by our law from dishonest practices, however complicated the transaction. We are determined that the pursuit and the bringing to justice of fraudsters should be carried out with commitment and skill. If our present instruments for cutting our fraud are blunt we must manufacture a new carefully directed scalpel.
The report is radical. Some of its recommendations have been criticised but no one has criticised the skill and thoroughness with which the Committee completed its task. On behalf of the Government and the House, I would like to thank the Committee for its work and record our immense admiration and sincere thanks to Lord Roskill and his colleagues for the major contribution which the report makes to the fight against fraud.
When one studies the subject in a wider prospective it is fair to say that the strategy adopted in 1983 is beginning to show results. The fraud investigation group has been established on a permanent basis for more than a year. This has been a successful attempt to reduce the fragmentation in the investigation and prosecution of complex fraud cases. We have to go further down that path. The report vindicates the 1983 decision to appoint a committee to look at the way in which fraudsters are caught and brought

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to justice. The Financial Services Bill, now before the House, contains measures which should substantially improve the effectiveness of self regulation within the financial markets. Early detection of irregularities can often prevent serious fraud and as with all crime, prevention is our first aim. If prevention fails then the machinery for dealing with fraud must be effective.
The legal profession may have doubts about altering some time-honoured ways. I have already learnt the deep suspicion with which many hon. Members who are members of the legal profession regard the suggestions for change. Those whose professions put them in the centre of financial transactions are perhaps less hesitant. Certainly Lord Roskill's committee was not hesitant.
The committee's message to the House and to the Government is that one cannot send a policeman on a bicycle to catch a runaway car. We have to equip those who chase fraud with the same speed already possessed by the fraudster. I do not doubt that there are valuable conclusions to be drawn from an examination of the present investigation and prosecution arrangements. If fraud is not effectively uncovered and detected then no procedural reforms of the law and later conduct of criminal proceedings, will deter the big fraud operators. At present responsibility for investigation and prosecution is shared by the police, the Director of Public Prosecutions, the Department of Trade and Industry and other agencies. From April the prosecution functions of the police will move to the Crown prosecution services in certain areas and from October throughout England and Wales. The cooperation between these major agencies has greatly improved in recent years and permanent Fraud Investigation Group arrangements are now in place.
FIG brings together the police and other investigators —accountants, interested Government Departments, counsel and members of the DPP's staff. One of the Director's lawyers exercises day-to-day supervision —acting almost as one of the "case controllers" which the report recommends. The aim of FIG is to concentrate on major frauds, although the categories are not closed, and to complete investigations quickly and to bring to an end inquiries which turn out to be fruitless. That is the present position.
Lord Roskill suggests that other arrangements are still too fragmented and he recommends an urgent inquiry into the possibility of a new unified organisation responsible for all the functions of detection, investigation and prosecution of serious fraud cases. My right hon. Friend the Chief Secretary to the Treasury is studying this most closely with other Ministers. He is also considering much of what the report has to say about the deployment of resources to combat fraud—that is probably the most artistic job for a Chief Secretary to undertake.
The Department of Trade and Industry and the office of the Director of Public Prosecutions have a provision for extra staff—the DTI for nearly 200 posts, which is a big increase, and the Director of Public Prosecutions for nine extra lawyers who will be assigned, full time, to fraud cases. I know my right hon. Friend the Chief Secretary's inquiry will be done briskly. I understand that he hopes to reach conclusions by early summer. If, as may well be, those conclusions require something extra in the criminal justice Bill, we shall see to that.
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The inquiry will, of course, have a bearing on the role of the police. Lord Roskill has some practical recommendations of immediate relevance to the police. The House is aware that I am carrying out an urgent review to assess the specific need for further increases in the resources in the establishment of the Metropolitan police. The fraud squad is part of that review, and I hope to complete it very shortly now.
The accounting advice which Lord Roskill thinks the police need is available through the fraud investigation group, and steps are being taken to recruit three additional accountants. On the initiative, which is welcome, of the accounting profession, a panel of experienced accountants in private practice has been set up in London to help the police and the director on a case-to-case basis as necessary.
The committee recommends also a career structure for officers in the fraud squad. Being a practical committee, it recognises the difficulties in implementing the recommendation within a generalised service such as the police. The joint Metropolitan and City fraud squad is realistically the only squad of sufficient size —its strength is about 190 officers — to offer a practical opportunity to introduce a career structure. Both commissioners have now agreed to my request that they should examine the feasibility of a career structure for officers in the joint squad. Outside London, the Association of Chief Police Officers will consider the scope for second or subsequent periods of service in the fraud squad to build up the experience which officers accumulate. The association will report back to me.
Lord Roskill recommends better training for the police in fraud investigation and the Association of Chief Police Officers has agreed to review the training provision for fraud squad officers.
Sir Eldon Griffiths: My right hon. Friend will be aware that in a complicated City fraud as many as 25,000 man hours of detective time will be expended. If some of the best detectives are brought into the fraud squad, as I believe they must be, that will have the consequence of removing experienced officers from other areas of detective work.
Mr. Hurd: That is right. That is one of the matters that will be in the two commissioners' minds as they undertake the exercise of considering a career structure.
I turn to the substantive law on which the committee makes recommendations, especially the use of the common law charge of conspiracy to defraud, where there is clearly something amiss. With the agreement of the Chairman of the Criminal Law Revision Committee, Lord Justice Lawton, I have asked the committee to produce a report with the following terms of reference:
"To review the restrictions on the use of a charge of conspiracy to defraud in the light of the decision in Ayres [1984] AC 447 and subsequent cases and to consider whether these restrictions could be removed without causing injustice to defendants."
I have asked for urgent advice. In the relative excitement generated by proposals to reform the enforcement of the law, we must not neglect the need to ensure that the law itself is sensible and enforceable.
I shall not say much this evening on the committee's proposal for a fraud commission. It would be a body within the existing machinery of Government with an independent chairman and it would monitor the pursuit of

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fraud, inquire into major breakdowns, look into delays and publish an annual report. At this rather early stage I have much sympathy with the idea of a watchdog body of that sort but I shall be interested in any ideas that right hon. and hon. Members have about the proposal. Before reaching a conclusion, we shall set up a model of how such a commission would operate and then come to our conclusions upon it.
Our approach to the recommendations that touch on the jury system is still open and I shall listen with close attention to the views of the House. I have noted the views which were expressed in an excellent debate in another place. When we publish our White Paper on the Criminal Justice Bill, there will be a wider forum for consultation.
I shall put one or two considerations before the House that might focus the debate. The main recommendation is that a judge and two assessors should replace a jury in especially complex fraud trials. Naturally many questions arise. The right hon. Member for Manchester, Gorton (Mr. Kaufman) began to raise these questions on 14 January and expressed the belief that we cannot define complexity. I accept that that is a major issue. I do not think that the guidelines in the report could be translated easily into statute, but there might be no need for a rigid approach of that sort. One criterion which could have an honourable place if the idea of a tribunal took root is as follows
"the complexity lies in the fact that the markets or areas of business operate according to concepts which bear no obvious similarity to anything in the general experience of most members of the public".
What are the arguments for placing such cases beyond the jury system?
Mr. Robert Maclennan: Does the Home Secretary agree that many complex crimes are quite beyond the comprehension and experience of the general public apart from fraud?
Mr. Hurd: Indeed. I understand that argument. I wish to make it clear that there is no feeling in the Government's mind that we should go beyond the Roskill report. I think that Lord Roskill advanced an argument for ring fencing in this area, but I would not want the element of truth in what the right hon. Member for Caithness and Sutherland (Mr. Maclennan) has said to lead us into considering doing away with jury trials for other types of offence, even though they might also he complex. It is the comprehension of the issues that is basic to the Roskill recommendation.
Mr. John. Morris rose—
Mr. Hurd: I shall make a little progress and then I shall be happy to allow the right hon. and learned Gentleman to intervene.
In a complex transaction, the final question may be whether the accused was a party to an illegal arrangement, but perhaps that cannot be decided fairly until the nature of the transaction is fully established and analysed. I think that juries can have serious difficulties in understanding the evidence in complex fraud cases, and understanding the relevant evidence is important to the doing of justice both to the innocent and the guilty.
The argument does not seem to hinge on the precise rate of acquittal in fraud trials. Instead, it is directed to whether the complexities of the proceedings may be leading to arbitrary rather than just verdicts. The committee received anecdotal evidence to the effect that the difficulties of
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presenting the facts in complex cases may lead to decisions to proceed with lesser charges than might be justifiable in some cases. I think that the House would regard that as unacceptable.
Finally, I must have regard to the interests of all involved in the criminal justice system, not least the accused, in adopting mechanisms which reduce congestion and delay and dispose of cases with reasonable speed.
All these considerations are in favour of the committee's conclusion on juries, but there are arguments against it, some of which appear in the powerful minority report of Mr. Merricks. No one doubts that major fraudsters deserve substantial periods of imprisonment, but in our system of open justice is it right that those who risk substantial terms of imprisonment should forfeit the right to be tried by a jury, not because their crime was more serious but because it was more intricate than the next man's? Would a tribunal remove some of the disciplines from counsel to present the case in a comprehensible manner? Might individuals lose their liberty for reasons which few of us could understand? If the real issue is dishonesty, are not ordinary people as good or better judges of the facts than experts in high finance? If the other reforms will simplify matters, is there a case for trying them out first?
The House might wish to pause to reflect on a point which I have not heard put before. If a tribunal were judged to be the fitting answer, as it might be, is it right that majority verdicts should prevail so that the judge might differ from the eventual verdict, having been outvoted by the two assessors?
Mr. John Morris: Will the Home Secretary address himself to the issue which was raised by the hon. Member for Caithness and Sutherland (Mr. Maclennan)? What is the argument for ring fencing fraud cases, which might include experiences outside the normal for a jury, as opposed to other complex cases which might also involve experiences outside the normal for a jury?
Mr. Hurd: I think that Lord Roskill would argue that there are a substantial number of complex fraud cases and sufficient for special provision to be reasonably argued. I believe that he would argue also that there would not be a sufficient number to justify special provision on other indictments, although occasionally such cases may occur. Nonetheless, they would not be of sufficient number to make necessary the introduction of special arrangements.
There are obviously strong and different views about this which cut across party lines. It seems to me that the legal profession is divided on the recommendation, and the financial professions are overwhelmingly in favour. I expect that this is the last occasion I shall be able or, indeed, shall want to tread a path down the middle.
I should like to end the analysis on this point. It would be wrong and unjust to the committee if we saw this as an attack by it on every person's right to a fair trial in our courts. The committee has made a careful and sensitive attempt to tackle the fundamental question of how to secure a sound verdict. I think that a sound verdict must be our objective. It is as much in the interest of the innocent defendant as it is in the interest of society to bring fraudsters to book. I hope therefore that we will have, as I am sure we shall, a reasonable and balanced debate on this point.
Dealing still with juries., the committee put forward views on the defence right of peremptory challenge and the

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prosecution right of standby. The distinction between this and the last point about complex fraud tribunals is that with the tribunal case, for the reasons which we have been discussing, discussion is confined to the relatively few cases of major fraud. When one is discussing what Lord Roskill had to say about peremptory challenge, it must be right to look at that more widely.
There has been a lot of discussion, quite independent of fraud, on the merits of change both here and elsewhere. I do not need this evening to go over that discussion. I am quite sure that it cannot sensibly be dealt with for fraud cases alone. In the criminal justice White Paper, we will set out options for change. We shall not seek to abolish ancient rights lightly, but nor shall we hestitate to act if the preservation of the integrity of the jury system is in question.
These two jury matters have aroused high feelings, and that is quite right, but in my view they do not lie at the heart of the report. At the heart of the report are the radical proposals to reform the rules of evidence, including the easing of the gathering of evidence from abroad and the easing of the rules about documentary evidence. We have also here major procedural suggestions to formalise hearings preparatory to Crown court trial, and an associated obligation on the part of the defence to outline the nature of its case.
We find these recommendations immensely constructive and timely. We believe that their potential effect on most cases arising from fraud should not be lost sight of in hot argument over the mode of trial for a minority of particularly complex cases. Few people now believe in my experience that our rules of evidence have kept pace with the 20th century, and the reforms begun in the Police and Criminal Evidence Act 1984 to allow more documents to speak for themselves found favour with the Roskill committee. Let us now see whether we can go further, as he suggested. Let us also hope that some formalisation of the pre-trial reviews already operating in many Crown courts can clarify the issues to be put at the trial, and that a spirit of co-operation can prevail so that both parties are saved the laborious ritual of arguing matters of no consequence before patient jurors. Let us look particularly hard at the scope for participation in mutual assistance treaties with other countries to facilitate the tracing and conviction of those who perpetrate international fraud.
I have skimmed through these important proposals quite quickly, but I should like to make it clear that we welcome this batch of proposals warmly. We shall take account of views expressed today and of those which may yet be offered by the judiciary, practitioners and others with relevant experience. But we start from a position of willingness to legislate on the basis of these highly significant proposals at the earliest opportunity.
That is the spirit in which we approach the report. I hope that I have clarified some of the central themes. I hope that I have re-emphasised our stern approach to this subject and our willingness to think and act radically about it. The touchstones of our response are justice, efficiency and effectiveness in bringing to account the perpetrators of fraud. We shall carry through all the proposals in the report which pass those tests.
7.24 pm
Mr. Gerald Kaufman: The debate comes at at time when public concern about fraud is greater than it has ever been. A batch of unwholesome City scandals has justifiably aroused that concern. But, even without Johnson Matthey, without Lloyd's and without the unsavoury aromas surrounding Westland share dealings, the extent of fraud and its increasing dimensions would certainly justify the disquiet among all sections of the population and in all parts of the country, especially among the small savers, who can least bear the irrecoverable loss and even ruin that fraud inflicts.
Mr. Doiran Williams, the Assistant Director of Public Prosecutions, in a rare public announcement, has voiced the feelings of millions in describing fraud as
"a significant destructive factor in our national life."
In the outstanding report which we are debating this evening, Lord Roskill and his colleagues declare starkly:
"in the United Kingdom. fraud is a growth industry".
The report goes on to warn:
"We hope that the gravity of this situation will not be underestimated. Fraud is posing a threat to London as a financial centre and to the considerable volume of invisible exports which represents a major factor in the economy of the country."
The sums involved are enormous. A few days ago it was reported in the press that a Home Office survey soon to be published estimates that the loss to the United Kingdom financial community from fraud runs annually at £750 million. Another study calculates that British companies are now being defrauded of £3 billion or more a year. A survey conducted by the accountants Ernst and Whinney has discovered that the average loss per company from fraud amounts to £6,156 a year, which again comes to around £3 billion nationally.
Let us be clear that these are not abstract losses which can easily be borne with a shrug. They are huge sums of money which could have been directed to constructive investment and to the creation of jobs. The extent of this plague of fraud is very wide. Fifty-six per cent. of companies feel that they have experienced fraud in the past, are experiencing it now or may be vulnerable to fraud in the future. Sixteen per cent. suspect that their companies may be a victim of fraud now, and only 1 per cent. of companies surveyed believe that fraud has decreased in the past five years. No fewer than 54 per cent. feel that it has increased. The latest crime statistics show that in the 12 months to September 1985 the increase in the crimes of fraud and forgery was 9·8 per cent. Among all categories of crime, this increase was second only to the 9·9 per cent. in robbery, and there were six times as many frauds as robberies. Those were only the crimes which were notified. Many more frauds are never brought to the attention of the authorities.
Even if all frauds were reported, the authorities are simply not equipped to deal adequately with them. For one thing, the pursuit of fraud is fragmented among far too many organisations whose co-ordination, where it exists at all, is often makeshift.
Between 1978 and 1985 the joint strength of the Metropolitan and City of London fraud squads itself was steadily rising. The Roskill report informs us that in 1983 the Metropolitan and City police company fraud department had its strength deliberately reduced by 10 per cent. because more officers were needed to combat street crimes and burglaries, a point to which the hon. Member for Bury St. Edmunds (Sir E. Griffiths) drew attention.

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Over the country as a whole, as the Roskill report points out, the strength of the fraud squads represents approximately 0·5 per cent. — one two-hundredth—of total police manpower.
For England and Wales, the fraud squad totals fewer than 600. We should compare that with nearly 300 in Hong Kong, which has only one twelfth of our population and therefore proportionately six times as many police pursuing fraud. What is more, the London fraud squad personnel are constantly changing, and it is said that it is common for an officer to be promoted in the middle of a complicated case to traffic or diplomatic protection.
It is no wonder that Mr. Doiran Williams, the Assistant Director of Public Prosecutions whom I have already quoted and who controls the fraud investigation group, recently complained that all who work in the fraud divisions struggle with what he called a "quite monstrous case load". From start to finish, the process of pursuing fraud is bedevilled by a shortage of resources. To me, one of the most shocking revelations is to be found in
paragraph 6.34 of the report, which says:
"It is important, in our view, for the judge who is studying a voluminous set of papers in a fraud case out of court to be able to dictate the crucial points in the case so that they can be set out in typewritten form for his later benefit. We understand that the secretarial facilities (typists. audio equipment) available to judges at the Central Criminal Court and elsewhere are seriously inadequate and make little or no allowance for this kind of work to be done. This is a matter of concern."
A matter of concern! I admire Lord Roskill's measured language. It is nothing short of a scandal. It is lamentable that a major report such as this has to be reduced to such de minimis recommendations as the recommendation that judges should be given adequate secretarial facilities. That is only one out of 112 recommendations in this definitive document.
It is a tribute to the thorough and thoughtful work of Lord Roskill and his colleagues that no more than a handful of the recommendations are controversial. My right hon. and learned Friend the Member for Aberavon (Mr. Morris) will, with his special expertise, discuss many of these matters if he catches your eye, Mr. Deputy Speaker. Those which give rise to some concern and which I feel should be mentioned now include recommendation 58, which says:
"The law should be altered so that the defence are required to outline in writing the nature of their case at the preparatory hearing stage."
This suggestion is made the more worrying by recommendation 59(i), which says:
"The prosecution and the judge should be entitled to comment at the trial, and the jury should be entitled to take account of and draw any appropriate inference from the defendant's failure to disclose a particular line of defence on which he relies at the trial."
Mr. Gerald Bermingham (St. Helens, South): Does my right hon. Friend agree that it would be highly prejudicial and completely contrary to the whole of our judicial system if, in a case in which the defence did not discover its line of defence until after the preparatory hearing, adverse comments could be made at the trial?
Mr. Kaufman: My hon. Friend has a legal experience that is denied to me. I accept and am impressed by what he says. My view, as a non-lawyer, when I read the report was that this provision was potentially dangerously prejudicial and I hope that it will be examined with great care before the Government contemplate proceeding with it.
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I am also worried by recommendation 78, which is that the defendant's right of peremptory challenge of the jury would be abolished together with the prosecution's right to stand by for the Crown. That needs the most gingerly consideration.
The recommendation that has aroused the greatest controversy is 82, to which the Home Secretary referred, and which states:
"For complex fraud cases falling within certain Guidelines, trial by a judge and two lay members should replace trial by judge and jury."
I have already said, and I shall plainly say again now, that this recommendation is not acceptable to the Opposition. We want fraudsters to be convicted and we want them to be punished. We would like the worst to be punished in an exemplary way, but we believe that they should he fairly punished after being fairly tried and clearly found guilty.
One of the things that worries us most is the concept which is introduced by the majority procedure on the proposed tribunal of reasoned acquittal. The concept of reasoned acquittal is a very dangerous innovation, and I very much hope that it will not be proceeded with. Our objections are best summed up in the note of dissent by Mr. Walter Merricks, which are published at the end of the report. He refers to the constitutional argument advanced by Lord Devlin, among others, that the right to jury trial has become so much of an institution that it has become more or less a convention of the constitution that citizens should not be liable to more than a limited term of imprisonment otherwise than on a jury verdict. He said:
"The burden is on those who wish to alter the system of jury trial, not simply because that is the present system, but because the right of the citizen not to be liable to incarceration for a lengthy period (the maximum sentence for conspiracy to defraud is life imprisonment) other than on a jury verdict has become a civic right which should only be dislodged for good cause."
The Home Secretary has said that the problem of definition of complex cases is difficult. The report draws attention to the fact that, last year, in Hong Kong, these difficulties were revealed and had to be discussed when it was there proposed to try complex commercial crimes without a jury.
Moreover, as Mr. Merricks says, there is little or no evidence to suggest that complexity is a deterrent to prosecution. Figures for 1983 provided by the Director of Public Prosecutions show that, out of 71 cases in which it was decided not to prosecute, only one failure to prosecute was due to complexity. It seems that, in that case, cost was just as important. There is a danger that, with no incentive to simplify, trial before only a judge and expert lay members would involve more complexities, not fewer, and that that would work to the disadvantage of the accused as well as to the bewilderment of the public.
Even more worrying is the possibility of the removal of the right to a jury trial being extended from fraud cases to others. The Roskill report states frankly:
"We realise that if our recommendations are adopted in fraud cases it would be logical for some of them to apply in all criminal cases … we have been careful to ensure that we were not proposing changes in law and procedure which we would not be prepared to see applied to other types of criminal case."
In Monday's debate in the other place, for the Home Office, Lord Glenarthur rather assuringly said:
"I should make it clear that we do not consider this recommendation"—
to dispense with a jury in complex fraud cases—

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"to have any application wider than the complex fraud cases which the committee had in mind." —[Official Report, House of Lords, 10 February 1986; Vol. 471, c. 72.]
That was not the impression given by the Home Secretary in his statement last month when he said:
"Some of the recommendations may well be applicable in other sectors of the criminal law besides fraud."—[Official Report, 14 January 1986; Vol. 89, c. 928.]
Mr. Hurd rose—
Mr. Kaufman: I may save the right hon. Gentleman making an intervention, but if he wishes to make it I shall give way. Tonight, he appeared to have shifted from that stance towards that given by Lord Glenarthur. If so, it is welcome and the right hon. Gentleman need not rise from his relaxed position to reiterate it. Whatever assurances we receive, I believe we should heed the important warning in the joint statement issued by the Criminal Bar Association and the Law Society Criminal Law Committee. The warning they give is of great importance:
"History shows that constitutional changes based upon particular problems are seldom correct and often regretted."
Mr. Hurd: I am sure that the right hon. Gentleman is aware that the report itself makes it clear that, although some of its other recommendations might be applied to sectors outside fraud, that one was argued simply on the basis of complexe fraud. That has always been my position.
Mr. Kaufman: I am glad that the right hon. Gentleman has said that. I had the privilege—I shall not go so far as to say the pleasure, although I do not mean that as a criticism of the literary style — of reading the report from beginning to end. Of course I saw that. I also saw the two quotations which I felt it right to make. The committee did not make any caveat or exclusion in paragraph 1.5 when it said:
"if our recommendations are adopted in fraud cases it would be logical for some of them to apply in all criminal cases … we have been careful to ensure that we were not proposing changes in law and procedure which we would not be prepared to see applied to other types of criminal case."
It is important to get it clear because we are opposed to the Government proceeding along that path. We do not believe that it is a proper and acceptable change. If they do so, it is very important indeed for it to be made clear that it is a unique change even though my right hon. and learned Friend the Member for Aberavon has already intimated in an intervention that it would be illogical.
Mr. Richard Hickmet: Whether or not the recommendation about jury trials is confined to complex fraud cases, no doubt the right hon. Gentleman will be concerned with the final sentence in paragraph 8.22:
"Society appears to have an attachment to jury trial which is emotional or sentimental rather than logical."
Mr. Kaufman: I accept that completely. There is logic to a jury trial, but in a democracy based upon consent, emotion and sentiment have an important place. I warn the Conservative party that far too often it makes the mistake of pursuing the path of tidy logic against possibly fuzzy public sentiment. Fuzzy public sentiment is important in a consenting democracy.
Mr. Hickmet: The right hon. Gentleman has made precisely the point which I was endeavouring to put to him. The statement in that paragraph is extremely
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dangerous. I agree with the manner in which the right hon. Gentleman has analysed it and despatched it. It is a most dangerous statement with which I hope the Home Secretary does not agree.
Mr. Kaufman: Then we are pals together and that is all right.
I sum up my argument at this stage by advising the Government to steer clear of that proposal. If they do, I believe that they will have the support of most hon. Members on both sides of the House.
Mr. Ivan Lawrence: Since he is as concerned as everyone else that the system should not be unfair, has the right hon. Gentleman considered the possibility that some accused people in very complex fraud trials involving, for example, City institutions may be worried that juries may not be able to understand the matter and may think that a special tribunal could understand it? In very complicated trials, might there not be an argument, for the protection of the innocent individual, that he should be able to choose, if he wished, a specialist tribunal in which he had more confidence than a jury? Has the right hon. Gentleman considered that and has he ruled out all possibilities of having a special tribunal even in such circumstances?
Mr. Kaufman: If I were to go to trial for any offence, I am sure that I would cast around and try to decide the best way to be acquitted. But we do not base jury trial on subjective approaches in individual cases. I wonder whether, before his trial started, Mr. Ponting believed that he would be tried fairly by a jury. I wonder too if he believed that when it was decided, rightly in my view, by the Government to make available the extremely complex document, the "crown jewels", for the jury to consider. The jury considered it and came to a conclusion with which I agree. Hon. Members may make an ex parte judgment, but we are considering the general question of the rightness of jury trials in cases where people are liable to long terms of imprisonment. On that I do not wish to depart from the views that I have put to the House. The proportion of my speech on those matters has been lengthened by the interventions, but I do not regret that.
Dozens—scores indeed—of the Roskill recommendations can usefully be implemented by the Government with the support of the Labour party and no doubt with the support of Conservative Members. For example, it is plainly absurd that the pursuit of fraud should be split among 47 organisations, co-ordinated imperfectly where it is co-ordinated at all.
I welcome especially the recommendations to examine the creation of a new unified organisation responsible for all the functions of detection, investigation and prosecution of serious fraud and, meanwhile at any rate, the establishment of a fraud commission. The recommended appointment of a case controller for each serious fraud case makes obvious sense, as does the provision of more expert accounting staff for the Director of Public Prosecutions and police fraud squads.
We also support nomination of a trial judge at an early stage after transfer or committal to a Crown court and the provision of adequate time for the judge to familiarise himself with the case before the preparatory hearing. Again, speaking as a layman and referring back to the

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passage about secretarial facilities for judges, I am astounded that such facilities are not already available. It shows the makeshift way in which we approach justice.
Above all, recommendation 10 goes to the heart of the whole problem. Without the Government's commitment to that recommendation they might as well not have asked Lord Roskill to do this essential and painstaking job. The recommendation states:
"The resources devoted to the pursuit of fraud must be expanded as a matter of priority."
That sounds elementary, but resources will be provided only if the determination exists to provide them. It must be said that far too often the determination to pursue fraud has not been evident. The Economist has drawn attention to what it calls the "lack of determination". It stated that, in 1983, 323 reports of alleged company fraud were reported to the Director of Public Prosecutions but only 47 were prosecuted.
There are other failures, too. The Roskill report deplores what it calls:
"the reluctance of individual police fraud squads to seek assistance from other fraud squads because the requesting force would be required to pay for the help given."
In Manchester we are complaining because we have had to pay £400,000 out of our rates to finance security round a trial which we did not ask to be held in Manchester. That financially prudent consideration—the reluctance of a requesting force to pay for help given—was not evident during the miners' strike when police forces spent £200 million, if not more, on exactly that kind of mutual assistance.
Again, The Times—pre-Wapping—quoted the Roskill report's estimate that the cost of a complex fraud trial is £500,000, stated that the Director of Public Prosecutions or the tax authorities were reluctant to press cases which cost so much unless they can safely predict conviction on serious charges. No such financial meticulousness has governed other decisions to prosecute. Only recently and at great expense there have been the trials of miners from Orgreave and Nottingham. The Orgreave trials cost taxpayers £500,000, and those in Nottingham cost a cool £1,500,000. Yet they ended, not in failure, but in a complete fiasco. The position may be more satisfactory if the Government pursue guilty fraudsters with a fraction of the zeal with which they have pursued miners who have been shown to be innocent.
Although fraud is a disgraceful crime which bleeds individuals, small savers, companies and the economy of vast sums, it is still more socially acceptable and genteel—a nicer crime—than burglary, robbery or theft, all of which are rightly pursued by the police with great zeal, although, regrettably, with varying degrees of success. During the period of the Government, for every one person sent to jail for Inland Revenue fraud, 20 have been sent to jail for social security benefit fraud. It is no wonder that Mr. Walter Merricks calls for prison sentences for unscrupulous operators, both to deter fraud and to reassure the public that double standards are not being applied.
There is a strange whiff of those double standards in a circular issued to chief officers of police by the Home Office last February, and I should be grateful if the Minister would explain that when he replies. The circular, which is printed in the Roskill report, states:
"The following types of fraud case should also be reported to the Controller of FIG so that he may exercise his discretion whether they should be investigated by FIG."
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He gives five categories where that procedure should apply. The fourth relates to people connected with Lloyd's of London, the stock exchange and other commercial exchanges, and the fifth involves well-known public figures — for example, Members of Parliament and captains of industry. Why is it believed that such people require special treatment before an investigation is authorised?
The Solicitor-General (Sir Patrick Mayhew): The right hon. Gentleman has unwittingly perpetrated or contributed to a widespread misunderstanding that prosecutions are initiated by the Government. He compared the zeal, or lack of it, with which the Government prosecute fraudsters with that with which they prosecute miners. Does he accept that, in the case of the Director of Public Prosecutions, a prosecution is initiated on the director's independent judgment—he is supervised by the Attorney-General, but there is no Government involvement — and that the miners' prosecutions were initiated by a county prosecuting solicitor at the instance of the chief officer of police? I hope that the right hon. Gentleman will acknowledge that important distinction.
Mr. Kaufman: I have known the Solicitor-General for many years, and his integrity is absolute. I always accept what he says, but he misunderstands what I am seeking to say, and, indeed, what other people believe. Obviously, I know that the Government do not instigate prosecutions. Recent cases prove that, if anything could. The Solicitor-General acts independently, and resents it if there is any intrusion on his independence. On the other hand, there is what the judge who sentenced Sarah Tisdall called the "climate of the times". There is also the climate created by Ministers, such as the right hon. and learned Member for Richmond, Yorks (Mr. Brittan), who was Home Secretary when the trials were pending and called for heavy sentences on men who had still to be tried. That was prejudicial to those trials. Therefore, what the Solicitor-General said does not in any way contravene what I have said.
My point is borne out by a leading article in The Times which was published at the same time as the Bill—pre-Wapping. It states about the failure of the detection and prosecution system to bring most of the major professional fraudsters to court:
"In social terms that has led to a suspicion that the rich and well-connected can get away with it."
The Times knows a bit about the rich and well-connected. At the same time, the Financial Times warned even more emphatically at the conclusion of a leading article:
"the idea that white collar crime is somehow different is not one that society as a whole can tolerate."
Mr. Doiran Williams states of fraud:
"It is divisive in terms of class because where the law enforcement agencies fail—for whatever compelling reason—to prosecute those whose conduct has been demonstrably and grossly dishonest, the cry goes up that 'there is one law for them and another for us'."
It is extremely important that society should recognise that fraud is a crime more serious and more damaging than most others, but which is not pursued with the zeal and relentlessness that it should be. That is what the Roskill report is all about. That is why, with the exceptions that I have mentioned, we in the Labour party believe that the

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recommendations in the Roskill report form a firm basis for speedy action, and that the public is looking to Parliament for that speedy action.
7.57 pm
Mr. Mark Carlisle: I hope that the right hon. Member for Manchester, Gorton (Mr. Kaufman) will forgive me if I do not follow his latter remarks, but I wish to be brief. Many of the recommendations of the Roskill report go far beyond the ambit of serious fraud crimes, and it is a vital report.
We are right to be worried about fraud. The feeling that major fraud may go undetected, unprosecuted or unpunished would do immense damage to the international standing of our institutions, and it worries many people greatly. We are also right to be worried about what is happening at present in the investigation, prosecution and trial of cases. We should be worried that many people seem to disappear to other countries before we have an opportunity to bring them to trial, that some cases may not be brought to trial because of delay and their complexity and that there is delay in bringing cases to trial. Above all, we should be worried about the length, complexity and expense of trials.
I believe that Lord Roskill is right when he says that the present system is inadequate to bring the perpetrators of fraud effectively and expeditiously to trial, and that the opportunities to create delay and abuse within the system are too great to be acceptable. I suggest that the test against which this report should be judged is to ask whether its proposals reduce complexity. Do they reduce delay, or the length and expense of trials? Do they ensure expedition and efficiency? Those are the tests against which I propose to judge this report. I believe that those are the aims of many of the Roskill recommendations.
It is inevitable that there has been much public comment on the proposals on juries, and I shall state my views on that later.
I welcome particularly the proposals on pre-prosecution. It is important for counsel to be involved at an early stage, and on a full-time basis, if delay is to be avoided. I say that as someone who is in chambers where there are a fair number of Treasury counsel. I have seen the piles of paper which they are required to look through out of court hours, having been involved in other cases during the day. That is one of the practical problems that lead to delay.
I welcome Lord Roskill's proposals on committal proceedings. Fraud committal proceedings are expensive. They cause delay. I believe that they are largely unnecessary, and they can, by delay, be the subject of abuse.
For many years, most committals have been by means of paper committals. That system has worked well, but the time has come to look at the whole question of the right to full committal proceedings. If we are serious in our attempt to accept those recommendations which are aimed at reducing delay and complexity, and at speeding up the system, the replacement of committals by the system of a transfer certificate, with the right of application for discharge by the defendant through the trial judge, with or without the right of some form of limited cross-examination, is a sensible proposal which we should be willing to accept.
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The proposals about evidence are even more important. I commend to my right hon. Friend the Home Secretary the speech made my Lord Griffiths in another place. Frankly, I see no reason why the judge should not have the power to allow copies of documents, rather than originals, to be introduced. I see no reason why documents should not be allowed in certain cases to be evidence of the truth of the contents, without the necessity of calling the maker.
I believe that our rules of evidence are outmoded and that we, as lawyers, should not be unwilling to review these rules and change them where necessary. It is important that we should be able to get evidence from abroad taken on commission in cases of international crimes, as the report recommends. I believe that the proposals on evidence will go a long way towards meeting the proposals on mounting a prosecution and proving a fraud, and will help to shorten substantially, and thereby reduce, the complexity and nature of trials.
Most important of all are those proposals in chapter 6 of the report, beginning with pre-trial review. A pre-trial review is often of little value, and might well be described as a farce. It takes place before a judge, who is not the judge who will try the case, and usually with different counsel from those who will be involved in the case. The system must be improved if we are to use it as a means of simplifying the subsequent trial. The proposals by Lord Roskill go a long way towards that end.
Proper preparatory work, which is fairly remunerative is needed. I believe — I disagree with what the right hon. Member for Gorton said, although I agree with much of what he said about the report itself—that we have to accept the proposals in the report on the disclosure at an early stage of the outline of the case for the defence. That is not such a radical recommendation as might be thought. We have been doing that for some years with alibi defence and, so far as I know, we have done so without concern. If we are serious about tackling the problems of delay and complexity which the report has identified, we must be prepared to accept some radical departures from certain rules that we have accepted in the past as right for the conduct of criminal trials.
I welcome the proposals on the requirement to disclose the outline of the defence and the requirement for the defendant to admit facts in advance. If that is achieved, trials can be shortened and simplified, and the things that concern many of us in the report need not be considered. If the proposals that I have mentioned so far are implemented, they will go to the heart of the problem and do more than anything else to simplify, speed up and shorten the trial procedure, and thus ensure that justice is done.
I deal now with the comments on juries. I should not be sorry to see the peremptory challenge disappear. For the first 10 years of my life at the Bar I did not know whether that existed. I never heard it used on circuit, where I believe I was involved in a substantial junior criminal practice. The fashion of challenging juries came about after I went to the Old Bailey. I know that I express a minority view, and that many of my colleagues believe that they should have the right to challenge juries, but I have always stuck firmly to the view that although one has a right to be tried by one's peers, one does not have the right to select who those peers will be.
I have no doubt that while it is right and proper that defence counsel, so long as the power exists, should use the right of challenge, and should be responsible for using

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it, in the interests of their clients, the fact is that it can be used to tip the balance in favour of the defendant in an unreasonable way. I should not be sorry to see it go.
Finally, I turn to a more fundamental proposal—that to change the mode of trial. I agree with almost everything that was said by the right hon. Member for Gorton, although he was a bit unfair to the committee, because the report makes it clear that the proposal is limited to complex fraud trials.
I commend to hon. Members the debate on this matter in the other House. It is interesting to note that the Law Lords seemed to favour the abolition of trial by jury, and that the one layman who spoke did so passionately in favour of retaining trial by jury. The arguments set out in the Roskill report do not justify a change of this nature.
The right hon. Member for Gorton referred to the paper published by the criminal law committee of the Law Society and the Criminal Bar Association, which said that to do away with juries would raise grave constitutional issues. I do not believe that the case for ignoring those grave constitutional issues is made out in the report. I prefer the arguments advanced by Mr. Walter Merricks in his note of dissent. The evidence of those who were involved, both on the side of the prosecution and of the defence, the police and others, was in favour of retaining juries. I do not like the idea of changing the system so that people are sent to prison for long periods without first going through the accepted method of trial which we have always used.
I suggest to my right hon. Friend the Home Secretary that it is unnecessary at this stage to pursue that recommendation. I believe that there is no evidence that juries are not working. There is certainly no serious evidence that they unduly acquit. I do not believe that there is any evidence that cases are not being brought to trial because of their complexity, as the right hon. Member for Gorton said. The real objection to jurors in these fraud cases is the unbearable strain imposed on jurors by the length and complexity of the case that they are asked to try.
I believe that, sensibly used, the report's other recommendations will lead to greater simplification and understanding of the issues involved and shorter trials. I think, therefore that one objection to the continuation of jury trial—the unbearable strain on juries, as trials of between four months and six months in the Old Bailey make clear—and the raison d'etre for the recommendation to abolish juries are removed.
I was delighted at the tenor of the speech by my right hon. Friend the Home Secretary. I hope that he is willing to be bold with regard to the other proposals. I hope that he will stand up to the objections that may be made by members of my profession, although we must obviously look at the details. I hope also that he will turn his face against the proposal to do away with juries as a means of trial.
8.11 pm
Mr. Robert Maclennan: The prevalence of financial fraud is deeply worrying. It is important to the good name of our City and financial institutions that all possible steps are taken to minimise its impact and to detect and punish the perpetrators in an exemplary fashion. The Roskill report is welcome because the committee has authoritatively and speedily brought forward extremely practical suggestions which, if
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implemented, will do a great deal to remove public anxiety that fraudsters can slip through the net of our criminal justice system.
The Roskill committee produced a large number of proposals which the House should welcome. I wholly agree with the right hon. and learned Member for Warrington, South (Mr. Carlisle) about the importance of properly handling pre-trial procedures. As I agree with him, it is not necessary for me to comment in detail on the bulk of those points.
I warn against the Secretary of State paying too much attention to the opening statements of the Roskill committee. Perhaps understandably for the progenitors of such an authoritative report, the members of the Roskill committee sought to have the Government treat all the proposals as though they were interdependent and could not be viewed in isolation without damaging the effectiveness of the report. Page 2 of the report states:
"It follows that substantial alteration of any of our proposals may do damage to the structure of the whole."
I hope that the Government will not flinch from the task of rejecting some of the report's major proposals on those grounds. There is no doubt that the House would agree with Lord Roskill's general perception that, if se if-regulatory mechanisms are abused, the law must deliver swift and sure retribution.
The Government have not so far had regard to the need to increase the resources of those responsible for the detection of fraud. The Home Secretary suggested that he was proceeding in a somewhat leisurely way to deal with the requests of the Metropolitan police for an increase in resources and establishment numbers. The right hon. Member for Manchester, Gorton (Mr. Kaufman) dealt at some length with the resources issue. It is not necessary for me to delay the debate by doing more than adopting the arguments he deployed about the lack of police resources. The Home Secretary shakes his head. I hope that that does not mean that he considers that resources are adequate.
Mr. Hurd: The bottleneck is not at the first or police stage. That is why it is especially important that the Department of Trade and Industry and the Director of Public Prosecutions have been able to announce substantial increases in their staff.
Mr. Maclennan: I have no doubt that there is a bottleneck such as the right hon. Gentleman describes and that there should be staff increases. I think that many members of the police force, at all levels, would strongly disagree with the right hon. Gentleman's somewhat complacent view about the capacity of police fraud squads to tackle the problems. I hope that the Home Secretary will not take refuge in that. I recognise that there are public expenditure implications and that the right hon. Gentleman will have to persuade his colleagues that it is necessary to meet these charges if we are to take seriously his claim to be tackling the problem. No doubt we shall wish to return on another occasion to the resources issue.
The report raises major issues of principle with respect to criminal procedure. It proposes that there should be pretrial disclosure of the case of the defence. I disagree with the right hon. Member for Gorton. I believe that the committee put forward a strong argument that there is a case for much more openness about the nature — although not the evidence that will be led — of the defence. This aspect of the criminal law should be

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reviewed in the round. Unfortunately, consideration of these sensible proposals has been set back by the monumentally silly recommendation in 1972 by the Criminal Law Revision Committee that accused persons must disclose their offence at the police station. If disclosure is to take place, it should be only after the defendant has seen in writing how the prosecution has put its case and after he has had access to proper legal advice. It follows that the prosecution must be required to set out its case in an intelligible way, with a proper and particularised narrative, not just a formal indictment and a pile of statements by witnesses.
There must be other safeguards. If one goes down this route, it will be necessary to ensure that the prosecution has only a limited right to amend its case. On the other hand, the defence should have an unlimited right to amend its case, although it would then risk adverse comments about inconsistency. There would also have to be safeguards to ensure that the prosecution could not nobble defence witnesses whose identity had been revealed by the written statement of case.
I am hostile to the idea of the Government embarking upon this important reform in fraud cases alone. The Roskill Committee said that before implementation this question should be looked at more widely.
I shall deal next with the right of peremptory challenge of jurors. I am not persuaded that it should be abandoned in fraud cases. I understood the Home Secretary to say that the Crown prosecution service will conduct a general survey of the practice of peremptory challenge in all criminal cases. A cautious approach would lead to an appraisal of the evidence and to an examination of the use of peremptory challenge and whether or not it ought to be retained. That must be a necessary precursor to any change in the law. There is no reason for fraud cases to be treated in a different way from other cases.
If the right of peremptory challenge were to be removed, there would inevitably be pressure for the prolonged cross-examination and investigation of potential jurors to determine whether they should be excluded for cause. That risk will have to be considered by the Government. In practice, peremptory challenge allows defendants to feel that they have a certain say in the determination of the jury panel, and it prevents most of the argument and resentment that would otherwise occur. It is not a wholly rational system, but it seems to work. A considerable onus is placed upon those who seek to displace it to demonstrate that it does not work. That is what the Crown prosecution service will seek to determine in its objective appraisal of the evidence.
I shall now deal with what is undoubtedly the most controversial part of the recommendations: the right of an accused person to trial by jury. The arguments were best summarised in Mr. Merricks' minority report. His arguments are extremely compelling. Both the Social Democratic party and the Liberal party are strongly opposed to the abandonment of trial by jury in complex fraud cases. I hope that the Government will resist the recommendations, for reasons that I shall seek to deploy.
Juries, though inexpert, are not necessarily more stupid than judges, lawyers, accountants and bankers. Counsel's task is to seek to explain the issues to the jury in a manner that enables it to reach a correct conclusion. That task is not beyond counsel. It was not demonstrated to the Roskill
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Commission that the task is beyond their capacity. It is notable that the evidence led by those who are most closely associated with fraud trials—barristers and solictors—was overwhelmingly against the view that juries reach the wrong decision. I make also a Scottish point, that in Scotland juries try all cases, however complex, without even the benefit of an opening statement. They have to pick up the case as it is put to them. Juries represent the popular, democratic element in the administration of justice. Without juries, the criminal law becomes a closed affair for experts.
Mr. Richard Ottaway: If the hon. Gentleman were to be transported to Canada, where he would be entitled to choose between either trial by jury or trial by a judge and assessors if he were charged with commercial fraud, of which he knew he was innocent, would he prefer to be tried by a jury that did not understand the issues or by a judge and assessors who did understand them?
Mr. Maclennan: That point was dealt with effectively by the right hon. Member for Gorton. I do not believe that trial by experts is necessarily in the interests of the accused. If a crime of dishonesty has been committed, that is not essentially a technical question. Although the facts may be complex it can easily be assessed by the ordinary man or woman. The system has served us well.
Mr. Lawrence: Of course a jury can understand all the complexities of a fraud trial, but it takes much longer to inform a jury of those complexities than it takes to inform a tribunal. Does the hon. Gentleman think that very substantial savings in time and therefore in delay could be made if a tribunal was available in some circumstances for very long and complex fraud trials?
Mr. Maclennan: No, I do not. The right hon. and learned Member for Warrington, South dealt effectively with that argument. He pointed out that if the other recommendations of Roskill were to be adopted — namely, pre-trial procedures, the involvement of counsel at an early stage, and a narrowing down of the issues, which is why it is important to look at the statement of the case for the defence—it should be possible greatly to limit the length of a trial. Furthermore, Roskill is perfectly frank about the fact that relatively few cases continue for many months. That does not mean that the time cases take in the courts is acceptable. The length of many of them is unacceptable. There is the problem of witnesses who have a sharp recollection of events having to be called after a case has dragged on for months. Justice is not served by the prolongation of trials. I think that the problem of the prolongation of trials and the difficulties for juries must be tackled before the case reaches that stage.
I was dealing with a wider point—the importance of the role of the jury. I believe that the jury legitimises the exercise by the state of the power to deprive citizens of their liberty for prolonged periods. On rare occasions it can also stand between the citizen and the law and acquit where common morality, decency or sense say one thing and the law says another. I think that that is rather a difficult concept for law-makers to accept, but I think that there have been cases in the memory of the House where that has happened. Having said that, I recognise that those cases place great burdens upon the jury. I think that the judge should have the right to ask the jurors if they

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consider that the issues are such that they would find it difficult to come to a conclusion and if they wish to withdraw. There should be literacy tests in cases where there is likely to be documentary evidence. We should also look at the possibility of extending the use of special verdicts, asking a jury to answer specific questions, for example, whether the defendant is dishonest instead of whether he is guilty or not guilty.
On the central issue of whether we should adopt the suggestion of a judge and two expert assessors, in my view the Roskill committee did not make the case that the present system leads to miscarriages of justice or to prosecutions not being successfully brought. It was rightly pointed out that there was only anecdotal evidence and that the overwhelming majority of those who were closely associated with the trials believe that juries came to the right view, or, at least, an understandable view.
The constitutional issue to which Mr. Merricks attached great importance is one to which the alliance parties also attach great importance. The right to elect for a trial by jury in any allegation of dishonesty is one that we should not proceed to dismantle. Let it be clear that dishonesty is an element in many cases other than fraud and, if one steps down that road, the logic of proceeding beyond fraud trials to others will, I am afraid, be pressed by those who wish to tighten the screws of the criminal justice system.
The problem of the definition of a complex case has not been satisfactorily resolved by the Roskill report. Mr. Merricks' rather powerful example of the public incomprehension which would follow in denying the right to a trial by jury to a man who has stolen £1 million by the use of a computer and allowing it to a man who has stolen £1 million from a bank by the use of a gun is one which should be in the Government's mind. I hope that the Government will also bear in mind the probability, indeed virtual certainty, that if a fraud tribunal were established there would be an appeal against its findings. I think that where reasons are given it would be very easy to erect an appeal. That process would lead to a prolongation of the trial which would be opposed to the general thrust of the report.
I think that this has been a most valuable report and that the overwhelming number of its recommendations should be implemented with all possible speed. The importance of the jury has been re-emphasised in public perception as a result of the two Official Secrets Act prosecutions—the Ponting case and the Cyprus secrets trial. I do not believe that the House would be right to accept any proposal to abandon something which has been a fundamental protection of our citizens' rights for centuries.
Several Hon. Members rose—
Mr. Deputy Speaker (Mr. Harold Walker): I remind the House of Mr. Speaker's plea for brief speeches.
8.35 pm
Sir Ian Percival: I hope to respond immediately to that plea. The House owes an enormous debt to Lord Roskill and his colleagues for the time and expertise put into producing the report. We also owe a considerable debt to Mr. Walter Merricks. I say that not merely because he is my wife's nephew, but for two other reasons. I once made a dissenting report and I know what
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it means to do that. The second and the main reason is that I agree with so much of what he says. He will know that that has not always been the case.
I want to concentrate on making one point arising from the report. The two principal features in the report are pretrial preparation and whether we should do away with juries in fraud cases. They are intimately bound up with one another. I think that there are constitutional and philosophical reasons for keeping jury trials in cases where the consequences may be serious for the accused. I also think that there are both emotional and logical reasons for keeping juries in such cases.
However, there is an even better, and practical, reason why we should not try to implement that recommendation at the moment. That is the fundamental reason put forward by the Roskill committee for abolishing juries, namely the complexity of certain fraud trials. Looking at it practically, one of the major reasons why cases are so complicated when they get to trial is that they have not been properly prepared. I do not say that as a criticism of anybody involved. At every stage, those who have to prepare the trials are having to overcome practical obstacles that would defeat most people. It is a miracle that some of the cases come to trial in as orderly fashion as they do.
I want to support with all the emphasis that I can the recommendation that we should look urgently at preparations for trial—all pre-trial stages—and here we have a large number of positive recommendations. I doubt whether everybody would agree with every one of them but I am sure that everybody would agree that that is what we have to look at first. I believe that the Criminal Bar Association also has some further proposals in that area.
My plea to my right hon. and hon. Friends on the Front Bench is to concentrate on that part of the report and get on with it, with all the assistance possible. I am sure that both sides of the profession will give their help. A lot of advice might also be obtained from the accountants, many of whom are now specialising in doing the groundwork in preparing cases for a fraud trial. Let us see how far we can get in simplifying the trial itself before we contemplate doing away with what, after all, has been regarded in this country for a very long time, as one of the principal safeguards of the liberty of the subject. I do not say that that tradition can justify sticking with one system for ever in all cases, but it should make us slow in abolishing it and especially abolishing it in any trial where the consequences for the accused of being found guilty may be very serious.
My plea to my right hon. and hon. Friends is get on with it. I am not just supporting the recommendations concerning pre-trial matters. My plea is, let us get on with them, with considering and implementing the improvements we can make in pre-trial preparation just as quickly as possible. The beauty of it is that hardly any of that needs legislation. All that it needs is the will to get on with it. Let us leave other considerations about juries until we have tackled this first and done something about it.
8.39 pm
Mr. Gerald Bermingham: I have one slight advantage in these matters because I have prepared trials in the past and have trials prepared for me in the present. There is a world of difference between looking at a set of papers that have been prepared for one and a set of papers that one has prepared oneself. The basis behind any prosecution is the quality of preparation, which

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is why I endorse almost everything that the right hon. and learned Member for Southport (Sir I. Percival) has said. He is so right. The difficulty with fraud trials, whether one defends or prosecutes, is the way in which they are prepared and presented. It takes just a little effort and careful constructive thought to assemble the evidence in a format easily understood by anybody.
I can take a simple example from experience. About 10 years ago, a series of fraud trials were prepared by the office of the Director of Public Prosecutions, concerning the quality of scrap going into steel works. When the first case eventually came to trial, there were mounds of paper about a mile high. I had the job of preparing the defence and all I did was stand on a bridge and watch a scrap train going by underneath. I realised that one could see the quality of the scrap in the wagons, with tyres sticking up, and various bits and lumps. I then went to look at a mound of scrap in a British Steel Corporation scrap yard. I saw on that mound of scrap, which had been bought and paid for, all the things that were being complained about in the case. In other words, the British Steel Corporation had been buying what was described as fraudulent. The trial collapsed simply because the defence prepared its case by going to have a look.
That example involved allegations about millions of pounds. If those who prepared prosecutions took similar simple steps, the most complex case could be reduced to the most simple terms, and cases could be so much more straightforward. Such preparation would take increased resources, increased manpower in the DPP office and the police force involving employment of counsel and solicitors at an early stage and the creation of a team. All those matters are in the Roskill report and can be implemented straight away.
Roskill has many gems in it, but unfortunately it also has a few flawed stones. The flawed stones come in recommendations 57 to 61 and the later recommendations about the right of disclosure. I take issue with the right hon. and learned Member for Warrington, South (Mr. Carlisle) who said that we have had alibi disclosure for some years. That is a different matter because an alibi is merely somebody saying, "I was not there." The mischief that was overcome by the creation of the rules about the disclosure of alibi was that of the suddenly sprung witness. The defence is, "I was not there. I am not part of this affair."
Mr. Hickmet: Or, "I was somewhere else."
Mr. Bermingham: I agree with the hon. Gentleman.
However, if the Roskill recommendations are implemented, the defence will be called upon to disclose the whole nature of the defence case. That will effectively remove the right of silence. We shall again begin to turn the format of a trial into something approaching the French system of proof of defence. If the prosecution knows what the defence will say, it will target its opening statement and witnesses towards the defence case.
We then have the appalling suggestion—I put it as bluntly as that—that the prosecution and the judge, in almost a team effort, can comment on the failure to disclose. All of us who have been involved in trials, whether on the prosecution or the defence side, know only too well that it is something said, perhaps by a witness, that may open up new lines of defence, ones that had not
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been canvassed or thought of before the trial began. If that becomes the principal line of defence, are the judge and the prosecution to comment and seek to discredit on the basis that it had not been anticipated? How often has one seen a witness statement that looked perfect and damning, but when the witness stood in the witness box, he failed to live up to the words that he had written on the paper?
We are talking about human beings giving evidence, not about computerised paper exercises. To remove the right to silence, as the Roskill proposals would, and to begin to shift the onus away from the prosecution proving its case towards the defence establishing its case and proving it, would go to the heart of the system of British justice which says that it is for the prosecution to prove its case.
In this Chamber, I do not have to remind many of the right hon. and hon. Members present that it was not until the end of the last century that the defendant was even allowed to speak in his defence. It is only in the past 80 years that he has had the right to say something. Very often, the defendant says nothing. However, if we implement the Roskill recommendation, we shall start down the road of the defence having to be proved.
Many right hon. and hon. Members wish to speak, so I shall be as brief as possible. I take on board and agree with everything that has been said about retaining the right to challenge and the right to a jury trial. It does not need to be said again by me. The fundamental rights in our system should remain. However, I draw the Government's attention to recommendation 41, which suggests that fair and adequate remuneration should be paid to those involved in such work. This may be the first time that this subject comes to the Floor of the House. I declare my own interest in this matter as a practising member of the Bar.
Perhaps the hon. Member for Putney (Mr. Mellor) might have a word in the ears of the Solicitor-General, the Attorney-General and the Lord Chancellor and point out that even Mr. Roskill thinks that lawyers properly paid might help the service, and that applies generally and not just to complex fraud trials. I have taken the opportunity to raise that matter, which is a burning issue. The quality of those who either prosecute or defend, who prepare either for the prosecution or the defence leads to the quality of justice that we have had in this country for so many years. It would be a sad and sorry day when those skilled and able in these sectors felt it necessary to leave the profession because they could not afford to make ends meet.
Justice is sometimes expensive. By and large, these recommendations should set us on the road to even better quality justice. However, some of the recommendations should be cast aside because they will not enhance the quality of justice.
8.49 pm
Mr. Patrick Ground: I agree with those hon. Members who have said that most of the Roskill recommendations in the first six chapters of the report should be implemented. I especially mention the proposal for a fraud commission, case controllers and the importance of legal advice at an early stage of the investigation.
There is much scope for sensible relaxations of the rules of evidence and for greater measures of disclosure. I agree with the comments on that matter of my right hon. and learned Friend the Member for Warrington, South (Mr.

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Carlisle). The position mentioned by the hon. Member for St. Helens, South (Mr. Bermingham), could be coped with within the proposals. The right hon. Member for Manchester, Gorton (Mr. Kaufman) referred to better facilities for judges. I remind my right hon. Friend the Secretary of State of what was said by Lord Edmund-Davies in the debate in the other place about facilities for juries, which is especially important when considering jury trials.
Lord Devlin said that the right to trial by jury has come to be regarded as a constitutional right for trials on serious criminal charges. Recently, several leading judges have suggested that jury trials should be restricted in cases of less serious crime. Lord Roskill suggests a substantial restriction at the serious end of the criminal scale. I agree with the hon. Member for Caithness and Sutherland (Mr. Maclennan) that the majority of people in Britain believe that juries bring a valuable element of good sense and human experience to the legal system. That is generally appreciated throughout the country.
If a major change is to be made to the jury system, such a change should not be made as a result of a side wind in this report, but as a result of a thorough investigation ranging across the board of jury trials. It would be wrong of the Government to seek to restrict jury -trials on the basis of a report on fraud.
There are more serious and detailed reasons in the report that should lead the Government not to accept the recommendations in relation to juries. The only research in the report is mentioned in paragraph 8.11, which shows that
"in almost six cases out of seven there was no serious complaint about the jury's verdict from most of the participants contacted. None of the questionable acquittals in their sample of cases involved complex fraud and very few were the result of lengthy or involved trials."
Regarding the operation of the jury system in fraud cases, paragraph 8.12 of the report states:
"We think that, in general, the public believes that juries provide a satisfactory method of trial and this view is held by many of our witnesses."
Another factor to be considered is the number of trials that fall in the category defined in the Roskill report. It is clear from paragraph 8.3 that there are relatively few cases involved. It states:
"In the five years from 1979 to 1983 there was a yearly average of 26 fraud trials each lasting for longer than 20 working days … The longest single fraud trial lasted 137 working days."
The number of trials and the length of cases are inadequate to justify a radical change in the jury system, especially when the perception of the performance of juries is that generally they work satisfactorily.
We have sometimes received complaints about judges and lawyers, but the number of complaints by members of the public, who have served on juries, about their experience of the length and hardship of trials is small in relation to other complaints about the Legal system. That demonstrates the fact that far from being overwhelmed by the so-called hardships mentioned in the report, most members of the public who are required on jury service, even on long trials, treat them as a duty of citizenship and a contribution that they are willing to make to the administration of justice.
8.56 pm
Mr. Richard Hickmet: If the proposals in the report are adopted, they will represent
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a fundamental overhaul of court room procedure designed to improve investigation, preparation and presentation of fraud cases. Issues will be more readily identified through the pre-trial review procedure. Presentation of cases will be clearer and more easy to understand and rules of evidence will be modernised and made more effective. Trials will be shorter and will come to the Crown court more quickly.
However, I have grave misgivings about the recommendations about the jury system. Jurors in all criminal cases should be able to read, write and to be numerate, let alone speak English. That proposition is so self-evident that no justification is needed. However, it is a remarkable thing that in fraud cases it is not unusual when the jury is empanelled to discover that some jurors cannot read.
Apart from the welcome recommendations on the literacy and numeracy of jurors, the report contains a detailed attack on the jury system. It attacks not only the challenging of jurers by counsel, but the hearing of complex fraud trials by juries and other general matters. Perhaps the system of challenging juries has been abused. It is not unusual for counsel to give the impression that they are challenging jurors simply to obtain a jury that is weighted more towards the acquittal of the defendant than a just verdict.
The report makes a comprehensive attack on the jury system and then seeks to say that, for the reasons set out in the report and because complex fraud trials are difficult for jurors to follow, trials which fall within certain guidelines should no longer be tried by judge and jury, only by judge and two lay assessors in the form of a fraud trials tribunal. We should welcome the fact that Mr. Walter Merricks was a member of the commission and produced his minority report.
Lord Justice Roskill said that trial by a jury selected at random is a major contributing factor in preventing fraud cases from being brought to trial. He said that the difficulty of presenting a complex case often results in a decision to opt for a less serious charge. There is no evidence for those two propositions. There is no evidence to show that a jury cannot understand a complex financial fraud case if it does not know the background, let alone the dishonest elements.
The minority report shows that, in 1983, of the 179 cases referred to the fraud division of the Director of Public Prosecutions for a decision on prosecution, only one case was not prosecuted on the grounds of complexity. That occurred on the advice of independent counsel and was an intellectual property case. Of the yearly average of 10 long fraud cases tried at the Old Bailey between 1979 and 1983, almost none was a complex fraud case that would be covered by the guidelines. There were carbon paper frauds, Spanish villa frauds and estate agent frauds, none of which could be defined as complex fraud cases.
The thrust of the Commission's recommendations is to reform procedure, presentation and rules of evidence so that that type of case can be understood by a jury. It is illogical to make those recommendations, and then to say, "But the jury system in those cases should be removed in any event." We are told that defendants are no longer tried by juries selected at random because of the exclusions and that, accordingly, those who fill the jury box are not a true cross-section of the public. It is my impression that the

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vast majority of people are not doctors, Members of Parliament, policemen or clergymen. The vast number of people who enter jury boxes represent society as a whole.
The report also argues that, because the vast majority of legal cases in England and Wales are heard by skilled people, whether in the magistrates courts, county courts, Queen's Bench courts or even in front of the 60 specialist tribunals, including those on immigration and social benefits, it is sentimental or illogical to retain jury trials in the Crown court. That is an extraordinary proposition. How many of those tribunals have the power to send a man to prison for life or, indeed, for more than one year? Not one. How many of those tribunals, with the exception of magistrates courts, have the power to find a man guilty of a criminal offence? Not one. How many defendants at the magistrates courts, when given the choice, opt for trial before the magistrates court rather than trial by jury? That represents many hundreds of thousands of cases each year.
The report makes serious and damaging attacks on juries. It is essential, as Mr. Merricks said in his minority report, that the general public, as represented by the jury system and the press, should be able to understand complex fraud cases. The challenge to the criminal justice system must be to make such cases understandable to the general public and the press. No man should be sent to prison for a period of up to life imprisonment without being tried by a jury. As Mr. Merricks said powerfully, why should a man have the right to trial by jury because he commits an armed robbery with a sawn-off shotgun and steals £1 million, whereas if he used a computer to carry out a complex fraud, that right could be removed? I welcome the report's recommendations about the investigation and presentation of cases but I hope that my right hon. Friend will reject the suggestion that jury trials in those case should be removed.
Mr. Speaker: Unhappily, my request for short speeches was not followed—one Back Bench speech lasted for no less than 25 minutes. If the hon. Members now waiting to be called will speak for five minutes each, I will be able to call all of them.
9.6 pm
Mr. Derek Spencer: I wish to make five points. The first concerns committal proceedings. The Psalmist said:
"One day in my courts is better than a thousand."
However, when I sat through 80 days of committal proceedings at the Lambeth magistrates court, I felt that one day in court was like a thousand. The way in which contemporary committal proceedings are conducted is, for the most part, entirely futile. They are expensive and I support the Roskill committee and the Royal Commission on Criminal Procedure in saying goodbye to all that.
My second point concerns the desirability of investigation and co-ordination. Without doubt it is desirable. In the Richmond Rendezvous case part of the inquiry was conducted by officers of the Customs and Excise who dealt with the value added tax aspects of the case. The remainder of the case was dealt with by officers from the Inland Revenue who dealt with PAYE and schedule D. There were two investigating officers, two sets of solicitors and two sets of instructions. Each party
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arranged themselves on opposite sides of my table and glowered at each other with professional jealousy. It is time to end all that.
My third point relates to the abolition of jury trial. In a sentence I would say to the Government, "Forget about abolishing jury trial and forget it straight away."
My fourth point concerns the conduct of the trial. This is where the most speedy action can be taken. There is much that the judges can do by displaying an aggresive attitude during pre-trial reviews. Severance in appropriate cases works wonders. I am convinced that we must compel disclosure by the defence of their defence. We have abolished trial by combat, but perpetuate trial by ambush. There is nothing to justify the prolongation of the right to silence into the trial. That is consistent neither with common sense nor morality.
My fifth point relates to extradition. Many of the problems of fraud concern extradition. Mr. Pepperel, in the London and County bank case, was extradited from West Germany, and Mr. Caplan so used the judicial process in America that the energetic efforts of the Director of Public Prosecutions were not able to bring him back to this country. That is regrettable, but unfortunately it happened.
Although the report raises many points of law, the most important point is a political point that requires action, and we ignore that at our peril.
9.9 pm
Mr. Ivan Lawrence: The Roskill report is splendid, but I have strong reservations about it. Mainly this is because Roskill allocates too much of the blame for fraud to the current procedure for conducting fraud trials and so suggests remedies which are quite unnecesarily radical.
Since more people are convicted in fraud trials than for most other offences, it ought not to be the trial procedure that causes concern. What worries people is that City swindlers go abroad and cannot be extradited back to England, that dishonest City men are given immunity from prosecution if they give evidence before internal, self-regulating City institutions' own tribunals and that some fraudsters never come to trial because the resources of police manpower, accountancy, expertise and investigative procedures are inadequate to bring them to justice.
Tackling the extradition law and strengthening powers of investigation, establishing a fraud investigation group, and making available more police, legal and accountancy resources for the pursuit of the fraudulent is where the emphasis should lie.
Roskill's proposals for the improvement of investigation, preparation, presentation at court, training, and staffing resources are desirable and most welcome.
We must pause for deep thought over Roskill's proposals to take fraud out of the criminal justice system as we know it—a system which is designed to secure the conviction of the guilty by fair means and the acquittal of the innocent. If we are panicked into doing anything which undermines our trust in the legal system as being just, we threaten one of the most important pillars of our society.
I am not sure how useful some of the Roskill recommendations will be. I do not feel strongly about paper committals, but the proposals go in the opposite direction to that which many of us had said should happen

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—we should use committal proceedings far more to ensure that inadequate cases are thrown out before time and money are wasted further up the ladder.
Pre-trial reviews—the so-called tea parties—are a notorious waste of time and will only work if the legal aid fund becomes so generous that the trial barrister can be guaranteed to attend and the list office can ensure that the trial judge is present. Both are somewhat optimistic expectations.
In a fraud trial, someone is deceived by a false representation into doing something that is against his or her interests. That is often the central element of all sorts of other criminal offences—rape, treason, tax evasion, and bilking a fare or a restaurant bill. Fraud cases are not always the most complex. There are treason, drug and even murder cases where the competence of a jury of ordinary people can be taxed.
How long will it be before what Roskill proposes for fraud will be extended to other complex cases of deception? If the law does not so develop, why not?
Where will be the logic of requiring the disclosure of the defence in one case rather than another? Justice in a commentary upon Roskill puts it this way:
"Why should a defendant accused of deceiving an insurance company into wrongly parting with money be obliged to disclose his defence but not the defendant who has deceived a restaurateur into parting with a meal for which he does not intend to pay or a women into consenting to sexual relations for favours which he does not intend to provide?"
The law must apply evenly and it will not so apply if some of the Roskill proposals are implemented. It will become distorted.
I come to juries. The peremptory challenge may be irritating, although only in cases where there are a large number of defendants can it be used to tailor a jury. To abolish it, will cause all sorts of problems. We are already moving towards tailored juries with jury vetting and a kind of voire dire. If the safety valve of the peremptory challenge goes, there will be more and more challenges for cause in terrorist or gangland trials and the limitations of the challenge for cause will be exposed. There will be pressure for it to be extended. we shall be sliding down the slippery slope to the crazy United States system of jury selection before we know it. How then will the jury system have been improved?
There is another reason. Trials only progress with the co-operation of the accused. They believe the system to be fair because they can challenge a juryman without reason. Deprive a defendant of that right and he will feel frustrated and railroaded by a court which, so he may think, has rigged the jury against him. If the police are allowed to vet the jury, that will be an active fear. For the sake of five minutes delay in court time, some trials will become much more difficult to conduct.
We must think longer and more clearly about the abolition of trial by jury in complex fraud cases than about anything else. I share most of the views that have been expressed by colleagues on both sides of the House against abolition and I shall not repeat them.
However, I do recognise the attractiveness of the proposal for special tribunals for they will speed up proceedings. A jury may very well understand a fraud trial, but the point is that it will take many days to explain the balance sheet and all the procedures so that they do understand it. A special tribunal would be able to work overnight, understand the case and dispatch the trial with greater speed. Furthermore, innocent people might well
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welcome specialist tribunals rather than a jury in a complex case. The standards of probity involved in City institutions might not be readily understood by the ordinary man in the street. Such defendants might prefer to have a special tribunal.
I would rather that juries stay as they are. If we do give way to pressure to have such tribunals may I suggest that the Government should set up a pilot scheme for such tribunals which should operate for two years. A defendant should have the option of such a tribunal. If it were shown to produce satisfactory results for innocent defendants, the objections to the abolition of the jury from those who are worried that it would produce a procedure weighted against the accused would be dispelled.
Finally, there is no point in catching fraudsters arid convicting them if there is no deterrent in the sentence they receive. Justice states:
"Sentences are far too lenient and the proceeds of crime are rarely recovered. Fraud, like other varieties of criminal conduct, will only diminish once those who perpetrate it realise that no profit is to be gained from it."
The Roskill report was not empowered to consider the consequences of conviction. Should we not at the very least be strengthening the powers of the court so that they may confiscate the defendant's property which could be reasonably attributable to the proceeds of fraud? That is what the Hodgson committee recommended and that is what the Government are currently implementing in its Drug Trafficking Offences Bill. We should do the same in fraud cases.
9.17 pm
Mr. Richard Ottaway: I shall be brief. May I draw the Home Secretary's attention to the section of the report which calls for organisation reform in combating fraud. The report rightly points out that there is great fragmentation in the co-ordination of the drive against criminal fraudsters.
The report calls for a single unified organisation which will detect, investigate, and prosecute under one roof. That is a recommendation that should be taken on board. However, if that course of action should prove to be impossible, I think that the report's recommendation that a fraud commission should be established to monitor the fight against fraud would result in co-ordination.
The difficulty of obtaining evidence from overseas is not dealt with in the report. I should like to float the idea of an international subpoena. At present getting witnesses from overseas is a costly, time-consuming business, but an international subpoena would have some merit.
One of the difficulties of this type of debate is that it attracts the hon. Members who are here tonight, all of whom are lawyers. This reminds me of a saying of Charles de Gaulle, "If you want to drain a swamp don't ask the frogs for their opinion." I am in a minority of one tonight. The Roskill report questioned whether it was appropriate to retain juries or whether there was another more suitable process. Would trials with a judge and assessors be fairer and shorter? I think trials would be shorter if one had a judge and assessors as illustrated by an example in the report. A trial under the Exchange Control Act 1947, conducted by the City magistrates, was considered by the counsel for both sides to have been three or four times shorter than it would otherwise have been. I was pleased to hear that the chairman of the Criminal Bar Association at a Back-Bench committee meeting also agreed that trials would be shorter if there was a judge and assessors.

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Whether fraud trials would be fairer without a jury is a question which causes me, as someone who is especially interested in these issues, the greatest difficulty. As the report states, about 2·2 million accused are tried each year by magistrates, and 90 per cent. of those who appear before magistrates plead guilty. That leaves about 200,000 a year who are tried by magistrates, having pleaded not guilty. We must bear in mind that magistrates have the power to impose fines of up to £50,000, and in some instances to impose one-year sentences of imprisonment. These facts illustrate that suitably qualified individuals can make judgments that are accepted by society. They illustrate also that juries are not enirely necessary.
Can juries determine honesty? They can do so only if they understand the questions that are before them. Reference has not been made to the report produced by the applied psychology unit of Cambridge, which comes to the conclusion that honesty is the most difficult question for juries to resolve in complex trials. It states:
"laymen experience difficulty in understanding and retaining unfamiliar and complex information over 20 days."
How do I, as someone who is particularly interested in civil liberties, face this difficult issue? If there is difficulty in determining honesty and a jury experiences problems with the complex issues that are before it, it is an even greater breach of an individual's right to be tried by 12 jurors who do not understand the evidence than to be tried by a tribunal, or judge and two assessors, who do. To my surprise, I find that I have no objection to trial by a tribunal of judge and two assessors.
I take on board the suggestion that a choice be given to defendants. Such a scheme has been put into effect in Canada, where I understand that the majority of defendants opt for trial by judge and assessors. If someone is innocent and he is charged with a commercial fraud, I am sure that he would far rather be tried by a judge and assessors, who understand completely all the issues with which they are presented, than by a jury which has only a hazy understanding of them.
When my right hon. Friend the Home Secretary considers the combined force of the lawyers' lobby in Parliament, which I believe is nearly 100 strong, and the weight of the Opposition, including the thunderous weight of the alliance, I believe that their opinions could force the Government into accepting the proposition that we cannot abandon jury trials, but I believe that a satisfactory compromise would be to give defendants a choice in the method of trial.
9.24 pm
Mr. Kenneth Hind: The Roskill report has many good features, but it contains one or two conclusions with which I disagree, and I wish briefly to explain why.
First, I urge my right hon. Friend the Home Secretary and his ministerial team to reject the idea of abolishing jury trial for serious fraud cases. There is no evidence that juries are failing in their duty to grasp the problems and the facts in a complex fraud trial. Jurors are probably the best people to grasp the concept of honesty or dishonesty.
The major problem that we are facing lies in the preparation of cases and the putting of them before the courts. In that context, the report deals fully and adequately with simplifying the issues so that a jury may
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deal with them more properly. The research of Baldwin and McConville in 1979 showed that none of the perverse verdicts that they recorded were associated with fraud cases. Frauds show no higher or lower levels of convictions or acquittals than any other type of case, and to argue that they are too complex to be dealt with by juries is to fail to understand that juries deal with cases equally complex day after day in our courts.
The second point is on the abolition of peremptory challenge to juries. I take the view that this is one thing that we should set aside. We should keep the peremptory challenge. In fraud cases, above all, it is better to retain it, for the simple reason that a juror who cannot read the oath is not able to grasp the complexities of the balance sheet or documentation. We will finish up going down the road of the ridiculous performance in the American courts, where they spend as much time empanelling the jury as they do in opening the case.
Mr. Lawrence: More.
Mr. Hind: As my hon. and learned Friend the Member for Burton (Mr. Lawrence) says, probably a lot more.
I urge my hon. Friend the Home Secretary to be very careful when he tampers with the right of silence of a defendant as we know it. The disclosure of the defence should be done extremely carefully, and not until all the prosecution case is made available. I would undertake that only with a great deal of reservation, and it has to be very carefully thought out.
I welcome the fraud commission proposal. Perhaps my right hon. Friend will consider placing a duty upon auditors of public companies not only to audit the books but to report any irregularities to the police or to the DTI. This will lead to the introduction of further investigations in fraud cases.
Bearing those facts in mind, I think that this is a good report. I welcome it. It will lead to a much more cogent and sensible approach to the problems of fraud.
9.26 pm
Mr. Nicholas Lyell: There are so many good features of the Roskill report that I hope the Government will not be tempted to obscure their value or jeopardise their implementation by accepting, at least at this stage, the proposal to abolish juries for complex fraud cases.
The key features start with investigation. We must, in my view, establish a team of investigators, with proper qualifications, and a long-term career structure. The understanding of the patterns of behaviour in fraud, the kind of documentation to be mastered, the nature of the opportunities for fraud in different fields — insurance investment, commodity trading and the long firm fraud—can be mastered only by matching the expertise of the fraudster with equivalent experience in the investigator. The staff of such a corps of investigators must have time to build up a rapport with those responsible for self-regulation in the markets in question. This can be done only if they remain in their profession, not merely for tours of duty for two or three years, as so often happens at present, but for long periods equivalent to those undertaken by professional accountants, lawyers, tax inspectors or customs officials specialising in particular fields.
The Roskill report rightly refers to the vast amount of documentation to be found in some cases. I know from my

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own experience in large commercial cases that this need not be as daunting as it seems, provided that one is used to it and knows what to look for.
I have dwelt at some length on the investigation aspect because I believe that it is the single most important factor in solving our present problems. The creation of a team of the necessary size, with an adequate career structure, will involve changes in a number of Departments, including the DPP's department, the Department of Trade and Industry and the City and Metropolitan fraud squads.
We must recognise that many of the valuable recommendations in the Roskill report involve radical change, from which we must not shrink. This is where I fear that taking the juries away at the same time will make it much more difficult, and greatly increase the reluctance to implement those necessary changes.
I support the requirements for pleadings and disclosure of the defence, the requirement for the nature of the defence to be disclosed in writing after the prosecution case has also been set out in writing, and after proper legal advice, with the sanction of adverse comment by both prosecutor and judge if it is not properly done. I support the recommendations for changes in the committal proceedings procedures. There should be an opportunity, following a properly pleaded case by the prosecution, supported by sworn statements, to make a submission of no case to answer, but it should come before the trial judge at the preliminary hearings. We can consider the possibility of limited cross-examination, but I believe that the days of the long and turgid committal proceedings are past.
I support the changing of the rules of evidence so that there is a rebuttable presumption that documents, especially documents and bank books from overseas, can be treated as evidence of the truth of their contents unless the contrary is shown. These are all radical changes and they will take persuasion, as some of the careful speeches of Opposition Members have shown.
As for peremptory challenge, we should reflect for a moment. The new prosecution service is about to begin. It will give us an opportunity to study more carefully in practice how the system works. I think that we should be careful before abolishing peremptory challenge, but there might be a case for limiting its numbers in many-handed trials — trials with several defendants. I hope that we shall take the opportunity to see how it works for a year or two with the new prosecution service before we seek to make changes.
With regard to the proposal to abolish the jury in complex fraud cases, my plea is that we should stay our hand at least until we have had a chance to see how these other very proper but radical reforms, which I support, take effect. I do not believe that any hon. Member would deny that the right of jury trial for serious criminal offences is one of the fundamental constitutional rights of the British citizen. We should be extremely cautious about removing it. It is the right of the ordinary citizen, whatever his trade or calling, to be judged in serious criminal cases, not by experts, professionals and specialists, but by other ordinary citizens. They should be able to read and write, and I believe that we can overcome those problems almost within the present rules, but we should not move too rapidly to a system of judge and assessors alone.
I do not close my mind to the possibility of jury reform. We should think seriously about allowing a defendant to opt for a trial by a fraud tribunal, but before we ever think
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of abolishing the jury, we should first put right what we know is wrong. We should, for a period at least, put before our juries cases which have been properly investigated, have been properly prepared and are properly presented, with evidence properly admissible and summings-up properly carried out. We should then see whether the ordinary citizen, doing his duty as a juror as he sees fit, can match the standards that we are entitled to expect of him. I believe that he will. Unless he is shown to be unable to do so, we should not move any further at this stage.
9.33 pm
Mr. John Morris: I join in the tributes that have been paid to Lord Roskill and his committee. They have laboured long and hard. We should be grateful to them and all of those who man our great and important committees.
The report is strong on conclusions but, on some issues, exceedingly short on evidence. Argument cannot be replaced by mere assertion. Running through the report is the feeling that the committee did not believe much in the jury system, but believed that it was an anomaly. I suspect that the committee got off on the wrong foot with the invitation it tendered to give evidence. It said:
"The prevalent disquiet, whether justified or not, with the present system of jury trials for what have come to be called 'serious fraud cases' is well known and has led to the setting up of the Committee."
I am not aware of any such significant disquiet, but I am aware of deep disquiet about fraud itself and ensuring that the guilty are convicted. The people one talks to may not want to change the jury system, but they think that something is wrong because in the last few years there has been an enormous growth in fraud. All is not well in the City; the City itself is anxious to clear up the matter and to restore its good name. All is not well with many of the great financial institutions. The stench keeps coming to the surface.
My right hon. Friend the Member for Manchester, Gorton (Mr. Kaufman) has mentioned the recent assessment of the Home Office that fraud losses are about £750 million a year. That has been unhappily the only growth industry in the last few years. That is what we have to face.
I welcome the broad thrust of the report. All hon. Members who have spoken will support any steps compatible with a sense of justice and fairness which would ensure that wrongdoers were brought speedily to justice. If criminals, particularly those who are now described by the new word "fraudsters", become more sophisticated, then, in the words of General Booth, "Why should the devil have all the best tunes?" I support in principle any measure to combat and prove the crime of fraud.
I read the words of the noble Lord Glenarthur in the debate in another place on Monday that the objectives were, first, justice, and, secondly, efficiency. One should not forget that justice comes first. The administration of justice should not be fragmented.
As regards investigation and prosecution, the real question is whether the Government—this applies to all Governments—have provided the resources to combat the prevalent crime of fraud or whether the Treasury gets away with its victories in saving candle ends. I welcome what the Home Secretary said tonight.
It is monstrous that the career structure of the police is such that usually it allows only three years for anyone to

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be part of a fraud squad, as though knowledge and expertise in that subject could be acquired on a short course. We have been told that one force is afraid to bring in another force because it would have to pay for the expertise it borrowed. That, too, is a matter of concern.
A Crown prosecuting service is being set up. Is not the real need to bring under the same roof all of the 46 or 47 organisations which have a responsibility for prosecuting fraud? Is it right that we should contemplate the Inland Revenue, Customs and Excise and the Department of Health and Social Security each having its own empire to defend? Why should not all three come under the roof of a new and enhanced Crown prosecuting service? The first step has been taken about the Fraud Investigation Group of which some of us have professional experience.
Both Lord Glenarthur and the Home Secretary announced the immediate establishment under the Chief Secretary of an examination of the need for recommendation 1 for a unified organisation. The present systems have grown like Topsy, and many of us have experience of internal Whitehall fighting. I wish the Chief Secretary well. I suspect that the genuine reason for setting up the inquiry is to have ammunition so that heads can be knocked together in the establishment of a unified service. I am not confident that in three years' time we shall have made great progress with the unified service, knowing how each empire will fight for its existence. However, it is a noble aim, and I hope that we succeed.
I welcome the proposal for more continuity of counsel and judges, and for the early employment of counsel. However, I must warn the House that we have divorced those who investigate in the police from those who are responsible for prosecuting. Therefore, although I welcome the early employment of counsel, I fear that their inclusion as part of an investigating team should be watched with care. Surely the function of counsel is to advise on evidence, to ensure that cul-de-sacs are not unnecessarily entered, and to separate the wheat from the chaff. We should not blind ourselves, unless we have ensured that counsel does not exceed that role, given what we have done and lauded regarding the generality of prosecutions.
I welcome the Lord Chancellor's reference of the difficulties in the substantive law to the Criminal Law Revision Committee. As, in practice, most serious fraud cases seem to be committed to the Crown court, I would welcome the end of committal proceedings in this area, especially if it results in the speedier bringing to trial of those charged. I am not absolutely sure whether the committee has gone the right way in rejecting a voluntary bill of indictment because whether it is done by a transfer certificate or a voluntary bill, it is important that the matter be considered judicially at some stage. I am confident that we can achieve that one way or the other, and assist in speeding up trials.
Pre-trial reviews lie at the heart both of saving money and of achieving greater efficiency. Some praise has been given to what has been done already, but I generally regard pre-trial reviews as puny. People who count in the subsequent trial do not attend, and judges are not given sufficient time to study the papers. Frequently they receive them only the night before. Unless one provides the resources, the judicial time and the financial inducement to ensure that at least some of those responsible for the
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subsequent trial attend, pre-trial reviews are almost a complete waste of time. I hope that the Treasury will take it to heart that if a pre-trial review is done properly, and if the resources are provided, money can be saved. I am confident of that. I find the present pre-trial reviews grotesque.
Those who draft indictments must adopt a robust approach, and limit the number of indictments, defendants and counts by severance, and the ground to be covered. When one knows that at the end of the day, whether one proves the whole area of wrongdoing, or only part of it to satisfy some of the counts, the sentence will not be substantially different, it is time for a more robust approach from those responsible for preparing cases and for skilled, experienced judges, who should be given time to prepare at the pre-trial stage, to ensure efficiency and not to lose any sense of justice. If we can get the pre-trial review right and can provide the resources then we will be well on the way towards achieving a great deal of the report's aims.
I mention quickly the rules of evidence. Here, in an age when copying documents is part and parcel of our daily lives, we should bring up to date our rules of evidence. Then I would welcome all that can be done by way of flexibility in presenting the case, whether it be oral, written, or visual aids. These are part of the ordinary scene, and juries should be given every assistance in that way.
I am concerned about the proposal with respect to the duty of the defence to disclose its case. It is difficult to see how the principle of the onus of proof remaining on the Crown can be maintained inviolate, and also the defendant's right of silence. The Crown will concentrate not on proving its case, but on demolishing the disclosed defence.
I fear also that the recommendation regarding a jury and its abolition is a stalking horse compared with the real aim of breaching the right of silence, which many have been trying to do since at least 1972, and have failed so far.
I believe that this matter is fundamental. We should not throw the baby out with the bath water, because it would mean a fundamental change in our trials, and be the first serious breach of the right of silence.
I would not lose a great deal of sleep on peremptory challenges. I fear we would develop in its place the American system of showing cause, and instead of the five minutes that are now lost on challenges we would soon have a growth industry of five days. I find it difficult to understand how this has come within the purview of the report.
It is proposed to abolish juries in complex fraud cases. The jury is the best instrument so far devised over the centuries to examine and reach a conclusion on the issue of honesty. I would prefer to be judged by 12 randomly selected persons rather than by two or three wise men conditioned by the standards of the well-heeled world from which they come. The superior courts believe that sometimes juries have difficulties and they have to spell out the definitions of dishonesty. Juries reach their conclusions on their own gut feelings.
There is not time to put all the arguments against the abolition of juries, but I shall quote Blackstone's wise words in volume four of his "Commentaries on the Laws of England". He said:
"But the founders of the English law have, with excellent forecast, contrived that no man should be called to answer for

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any serious crime … and the truth of every accusation … should be confirmed by the unanimous suffrage of his equals and neighbours, indifferently chosen and superior to all suspicion. So that the liberties of England cannot but subsist so long as this palladium remains sacred and inviolate, not only from open attacks, which none will be so hardy as to make"—
he had not thought of Roskill then—
"but also from all secret machinations, which may sap and undermine it, by introducing new and arbitrary methods of trial … And however convenient that may appear at first, as doubtless all arbitrary powers, well executed, are the most convenient, yet let it be remembered that delays and a little inconvenience in the forms of justice are the price that all free nations must pay for their liberty in more substantial matters…and that though begun in trifles the precedent may gradually increase and spread to the utter disease of juries".
Blackstone was right then, and he would be right now. I hope that the Government will pause and consider.
9.50 pm
The Parliamentary Under-Secretary of State for the Home Department (Mr. David Mellor): My right hon. Friend the Home Secretary said in opening the debate that the Government were resolved to act on the recommendations of the Roskill report, but that the precise form of action would depend on a number of factors, not least what the House had to say. We have had a marvellously compact debate, in which many hon. Members have been able to give their views. We shall certainly take all those views seriously even though, in deference to the need to have as many contributions as possible, I shall not be able to answer all the points.
We are agreed on two things. First, fraud is a serious matter about which more must be done. If one needed any proof, that will be provided in a study soon to be published which was partly funded by the Home Office and carried out by Dr. Levi at University college, Cardiff. It reveals, among a number of interesting points, that since 1980 recorded commercial fraud has increased by an average of 5 per cent. annually and that commercial fraud reported to the London fraud squad represents almost three times the total cost of all property crime in London, and in 1984 accounted for £687 million.
Secondly, I think we are all agreed that the Roskill report is a major achievement and should be acted upon. The Government are resolved to do that. Inevitably, although what happens in court is not the only element—nor necessarily the most important element—in Lord Roskill's report, most attention has focused on what happens in court in fraud trials. I shall therefore consider that aspect.
I agree with my hon. Friend the Member for Glanford and Scunthorpe (Mr. Hickmet) that what Roskill proposed was nothing less than a fundamental overhaul of courtroom procedure. That is certainly right and welcome. I am glad that most of the committee's detailed recommendations to improve and speed up our trial system commend themselves to both sides of the House.
Inevitably, controversy has centred on two proposals: first, the fraud trial tribunal; and, secondly, the pre-trial review procedure. I shall deal with the second proposal first. My right hon. and learned Friend the Member for Warrington, South (Mr. Carlisle), in what I think I can say with the assent of the House was a typically wise speech, said that our present pre-trial procedure needed firming up. Other hon. Members, especially those with experience of the courts, pointed out that the pre-trial review procedure, which has no statutory basis, is treated as a warm-up in
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which understudies participate and is not taken to be as serious an element in the trial as Lord Roskill, as most hon. Members who have spoken, and as the judges, think it should be.
In a recent judgment in the case of Hutchinson, Lord Justice Watkins said:
"The review"—
meaning, of course, the pre-trial review—
"is now in common usage and has proved to be, when properly conducted, and when prosecution and defence co-operate to the maximum expectation, of great assistance to the court and to the administration. It assists in highlighting the issues involved in a trial and has the effect quite often of shortening the length of it. But it does not have the force of law. It is not recognised by statute or regulation … Many judges and practitioners would welcome the review having the force of law."
Those sentiments have been reinforced tonight.
Some hon. Members have spoken against the recommendations, including Opposition Front Bench spokesmen and the hon. Member for St. Helens, South (Mr. Bermingham). However, as my right hon. and learned Friend the Member for Warrington, South pointed out, the alibi notice provides that a defendant is obliged to serve notice of an alibi on the prosecution. If he does not do so, the alibi may not normally be admitted at the trial. Furthermore, even if, relying on the right to silence, a defendant declines to give evidence, hé has to put his case to prosecution witnesses.
All that is being said for the pre-trial review is that the defendant should put his case at an earlier stage, but after the prosecution has disclosed its case to him. Under section 81 of the Police and Criminal Evidence Act 1984, the defence must also give advance notice of the substance of expert evidence. Those who dissent from this proposition cannot have it both ways. By all means be opposed to the fraud trial tribunal and to the removal of juries from serious fraud cases, but if juries are to be retained in complicated fraud cases, let us at least do the maximum that we possibly can to ensure that the issues are capable of being put clearly and of being understood.
The way that this can best be achieved is by having a proper pre-trial review, when what can be agreed is agreed and put out of the way, and when what cannot be agreed is clearly understood, so that the prosecution can make the statement that Lord Roskill recommends. Then everybody will know where he is. If the purpose of juries is to determine honesty, they must be given a fair chance to do so by having the issues put squarely before them.
I do not wish to satirise the Opposition Front Bench, but if their agreement with Roskill comes down only to the easy bits concerning more secretarial facilities for judges, that is a cop-out. If the Opposition oppose the fraud trial tribunal, they must say clearly what they mean. We must improve the procedure in fraud cases so that the major and farsighted reform of the law of evidence proposed by Roskill can be implemented. It will then be easier to reject the fraud trial tribunal option.
The Government have an open mind; no decision has been taken. However, it is interesting to note that, after my right hon. Friend the Home Secretary had invited the House to give its opinion, 12 good men and true delivered their verdict on the fraud trial tribunal. Although there may have been equivocation — unusual for him — in the advice given by my hon. and learned Friend for Burton (Mr. Lawrence), they delivered a majority verdict of 11 to 1 against the fraud trial tribunal. Even if that jury was heavily vetted in favour of paid-up members of the

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lawyers' trade union, nevertheless the message was clear. I appreciated the Welsh eloquence of the right hon. and learned Member for Aberavon (Mr. Morris) who defended juries. He reminded me of that other great Welsh lawyer, Lord Elwyn-Jones, in whose chambers I began my unprepossessing legal career. When he was called upon to explain the number of acquittals in Wales he said, "Well, Welsh juries are against crime, but they are not dogmatic about it."
Most of the attention has been focused upon what happens in court, but I suspect that a great deal of the real interest lies in what happens before one reaches court. Therefore, we must ensure that we get better at finding out when fraud is taking place. That is not easy, because, by its nature, fraud is covert. When we investigate fraud, we must ensure that arrangements are made that will have the maximum chance of identifying the evidence, and that it is possible to sift through it in such a way that a case can be brought to bear against malefactors. It is not without note, therefore, that Roskill made major recommendations about a unified organisation. Those recommendations have serious implications, not least because, as the right hon. and learned Member for Aberavon reminded us, the House has taken steps to separate investigation from prosecution. Any backtracking will require serious consideration. Indeed, these questions will be thoroughly considered by a committee chaired by my right hon. Friend the Chief Secretary to the Treasury.
We fully acknowledge that more resources are needed. One hundred and ninety five new posts at the Department of Trade and Industry have been created. There are more accountants for the fraud investigation group, which is itself new. We take Roskill seriously, as the House will soon see.
It being Ten o'clock, the motion for the Adjournment of the House lapsed, without Question put.

Unemployment (Doncaster)
Motion made, and Question proposed, That this House do now adjourn—[Mr. Neubert.]
10 pm
Mr. Michael Welsh: The subject I am raising in the Adjournment debate is the unemployment problem in Doncaster metropolitan borough area following the closure of Youngs Seafoods and other undertakings. Before I start, may I welcome the new Parliamentary Under-Secretary to the Front Bench? I hope that he enjoys it. They do say, I do not know if it is true, that success comes to Ministers who take cognisance of the people who move Adjournment debates and try to help them.
Unemployment is not new to me. The pit I worked at was closed about 16 years ago and only last year the workshops in my own village were closed, with 400 young people put out of work. Both of those were profitable. It seems strange that we close profitable undertakings in south Yorkshire, but that is what happened.
In tonight's debate I should like to speak about different issues from those of my own village. There are two particular areas in my constituency which cause me great and special concern—the mining community of Askern and the township of Thorne. I understand that the employment statistics are not readily available for those communities, and I accept that. Even if they were, they would not reveal the hard facts of those who suffer the indignity of unemployment. However, what is on record is the appalling level of unemployment in the Doncaster travel-to-work area of which those two communities are a part. In that area there are more than 20,500 people unemployed and, unfortunately, the local job centres have only 238 vacancies advertised. At the same time, the skillcentre in Doncaster has been closed. When you were a Minister, Mr. Deputy Speaker, you had the privilege of opening it. They have closed that, so we cannot even have trades people in Doncaster, which is a great pity. Fifty jobs were advertised at the Queensgate job centre and 500 people turned up for those jobs. There were not enough forms for them to fill in. Not only that, but the jobs were only for 13 hours a week, part time. Therefore, one can see the problem in Doncaster and that the people there want the opportunity to work but find it very difficult to obtain it. In Thorne the local authorities tried to get the exact figure of unemployment. It has been put as high as 50 per cent. in that small township. That is deplorable.
Before coal reserves were discovered in the south Yorkshire mining village of Askern, its claim to fame was the mineral springs from which people believed they could receive a cure or treatment for their ailments. What we need is treatment for the ailment of unemployment. The local colliery has been saved from closure, and we all hope that it will have a long and secure future. Next door to the colliery is the Coalite and Chemical Company Limited. It has a processing plant which produces chemical by-products from coal and the smokeless fuel known as coalite. Because the company owns other plants similar to Askern, it has decided to close that plant. This means a loss of 300 jobs in a small mining village.
The reason given for the closure is that demand for the product has fallen off considerably. This is yet another spin-off from the hard-line attitude taken by the Government towards local authority expenditure. One of

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the casualties of local authority programmes has been the creation of smokeless zones. I am told that the declaration of smokeless zones has been delayed to the point where the United Kingdom's poor rate of progress has attracted adverse comments from our friends in the EEC.
Because coalite is an excellent smokeless fuel, the plant would have a secure future if smokeless zones were fully implemented. All must recognise and realise the sheer impracticability of piped gas to all households in the United Kingdom. Askern needs help quickly or the village will have only the colliery to depend on.
The colliery of Thorne closed in the 1950s, and in the 1970s the NCB invested in the colliery to bring it into production again. Will the Minister persuade the Minister of State, Department of Energy to pursue the opening of the colliery as soon as possible? It will take 10 years to open the colliery, because a new shaft must be sunk. I am pleased to hear that the coal board has remained firm on its commitment to open the Thorne colliery, but I ask that a formal assurance is given that the colliery will open, and open as soon as possible.
The county and borough councils persuaded the Development Commission that the problem of Thorne warranted the township being designated as a rural development area. I am pleased to be associated with that initiative and grateful for the opportunities that the designation can offer. However, there will be no overnight miracle from the designation of Thorne.
Last year, the people of Thorne brought themselves together in a wonderful example of self-help and determination to try to resist the decline in their economy. At one time, a major employer in the area was GEC, but its factory lies empty, another victim of the folly of allowing the imports of consumer durables from the far east. Lord Weinstock of the GEC was so impressed by the people's determination that he met the expense of opening the factory for a short period, so that it could be used as the basis for a publicity campaign to encourage industrial development and investment in Thorne. Although the campaign did not produce any miracles, it sowed the seeds of optimism to such an extent that the community will try again this year, to see whether it can get industry in Thorne.
What they must feel now is beyond my understanding. A few days ago, there was the loss of 200 more jobs, when Young's Seafoods Ltd. decided to close its food fatory. The Thorne community cannot take much more of this. People there have a positive attitude towards work. Industrial relations are not a problem, environmental conditions are pleasant, the motorway network is superb and we have none of the problems associated with the M25 in the south-east. Traffic moves easily to the east coast ports, to the west, south and north. Thorne needs help now.
The Doncaster local authority has been classed by a leading newspaper as a Labour-controlled council in the hands of good progressive thinkers. That is right. It does not practise extreme policies and it is concerned to improve the quality of life. Thorne is part of the Doncaster metropolitan borough, which has a population of 300,000.
Hon. Members may ask why the unemployed of Thorne do not travel to work in Doncaster and the short answer is that the unemployment figure for the Doncaster travel to work area reached the disastrous level of 21·1 per cent. in January. Now, there is a major threat to employment prospects as British Rail Engineering Ltd. in Doncaster,
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Central constituency, which you, Mr. Deputy Speaker, represent has come up with a reorganisation plan, and the Confedertion of Shipbuilding and Engineering Unions said that the BR board:
"were unable to offer any statistical evidence to justify their proposals, nor could they provide any information as to how their proposals would affect jobs."
That relates to British Rail's decision on the organisation of British Rail's works and plants at Doncaster. It would be a disaster of the first order. The unions have considered the plans and they estimate that of the 3,000 people who work there, more than 1,500 would be made redundant if the plans were accepted. That cannot be allowed to take place. The plant has been in the forefront of engine building. It has built some of the great engines of our time and the workers have the skills needed to build engines.
I ask the Minister to consider the issue and not to allow the rape of industry in Doncaster to take place. My right hon. Friend the Member for Doncaster, Central (Mr. Walker) has already been in touch with the chairman of British Rail and we are hoping for an early meeting with him.
I condemn British Rail's invitation to foreign companies to tender for £1·5 billion worth of diesel and electric locomotives that could be built in Doncaster. Doncaster is capable of building them and it is only right that they should be built there. I ask the Minister to give whatever help he can.
Youth unemployment in Doncaster is as bad as in the third world countries. Only 10 per cent. of young people coming out of school find employment. The under-achievers in the education system are currently provided for by training workshops operated by the council under the youth training scheme. I ask the Minister if it is possible for the scheme at Thorne to continue. Personally, I am pessimistic about the matter. I realise that the Minister will not be able to tell me this evening if the Manpower Services Commission can continue with the scheme, but perhaps he will write to me.
The Government continue to limit the contributions of local councils to economic regeneration. They are trying to ensure that, excluding the run-up to parliamentary elections, local authorities will be starved of resources and denied access to their funds of capital, which could reduce unemployment and improve the infrastructure. When the upturn in the economy comes, that will be needed to get Britain off the ground.
South Yorkshire council has worked hard. It has helped with factories and factory units being created in Thorne, but we must try to get people into them. This is not the occasion to debate the demerits of the Government's economic strategy. Those who wrote it and who are ensuring its implementation cannot be blinded by the appalling human problems in my constituency. The Government are the servant of the public, and Members of Parliament are here to serve. We have no right to inflict hardship, distress and despair. I hope that the Minister will give an undertaking to carry out an urgent inquiry into the issues that I have raised. The Government must use all available resources to stop the rot and to improve job prospects, which would provide hope for the future of our industries.
The Government are a major employer. I hope that they will take account of constituencies such as Doncaster, North when they are identifying areas of location and relocation for Government enterprises and administration.

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I hope that the Government's initiative will not be confined to the statement that a few jobs have been provided at the new prison at Lindholme. However much those jobs are needed, they do little to ease the distress or to give hope for the future. The people of Doncaster want the right to work. It is up to the Minister and the Government to ensure that right.
10.14 pm
Mr. Martin Redmond: I thank my hon. Friend the Member for Doncaster, North (Mr. Welsh) for allowing me to participate in this Adjournment debate. I also thank you, Mr. Deputy Speaker, and the Minister.
I intend to say three nasty words to the Minister. They are "long-term planning". I thought I saw the Minister cringe when he heard those words. I apologise to you, Mr. Deputy Speaker, for using those blasphemous words in the Chamber, but long-term planning has not been practised by the Government since 1979. In West Germany, when new technology is proposed to be introduced into a company which would make men redundant, discussions take place on where that manpower will go to after the technology has been introduced. With planning, no one is thrown onto the scrapheap.
When the Government came to power, they lifted exchange controls and allowed money to flow abroad to create manufacturing jobs at the expense of jobs in Britain. Had that investment been made in our manufacturing base, we would not be in this decline. The entire Doncaster area has been hit extremely hard by the Government's policies, especially Don Valley. The Mexborough and Conisbrough area has an official unemployment rate of 23 per cent. It would be higher but for the Government's manipulation to mask the true figures. In 1985, of 520 school leavers, only 65 found jobs: 370 are in temporary employment; and 70 will become unemployed at the end of their YTS courses.
The Don Valley is a coal field community in change. The future for coal is uncertain. The pre-strike manpower for the south Yorkshire coalfield was 28,000. The projected figure for March 1986 is 18,000 men. I see that the Under-Secretary of State for Energy is in the Chamber to hear the debate. Yorkshire Main colliery closed with the loss of 1,200 jobs. That pit, which had 20 years' reserve of coal, was shut because one man—the area director—decided it. Cadeby pit now employs only 350 men and, unless the NCB agrees to invest in new seams, it will close. Manvers pit now employs only 820 men, and will close unless it receives investment.
I could give many more figures for my area and for Doncaster, but I hope that I have already shown the terrible consequences of the National Coal Board's policy. NCB (Enterprise) Ltd. is operating in the Doncaster area and has processed 16 loans for a total of £155,000, which has created 61 jobs. But there have been no loans for the Mexborough and Conisbrough areas. The latest regional development grant figures from the Department of Trade and Industry show that of the £1,738,000 grant for Yorkshire and Humberside, only £45,000 will go to the Don Valley.
In your constituency, Mr. Deputy Speaker, British Rail has threatened to close its engineering plant, which has been famous for more than a century, and has been a byword for quality of work. The Flying Scotsman and other engines are fine examples of that quality. About five
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years ago, the men and management at the plant agreed to make changes in the work practices which British Rail wanted. The estimated profit for the fiscal year 1985–86 is £2,262,000. Yet under BR or BREL they are under a cloud with a job loss of between 1,500 and 2,300. They do not want charity, only the right to work and to compete. They are confident that they can take on all comers, given the chance.
Case International promised 2,000 extra jobs at its factory, but that has yet to be developed. English Estates is helping with its small starter units policy. No one area of help is needed rather help is needed in every area.
The Minister should take note of the following points. First, he should consider motorway provision which would open up the Dearne area to industrialists. Secondly, an increase is needed in the urban programme allocations for community and industrial projects. Doncaster currently receives £320,000 for the whole borough which includes the Conisborough and Mexborough area. That £320,000 comes from the Department of the Environment for urban industrial development, but more money is needed. Thirdly, the Minister should be aware of the need to increase the derelict land allocations. Fourthly, there must be special help from the Invest in Britain bureau, and the regional Department of Trade and Industry to encourage new growth industries into the area. Fifthly, there must be more houses. The lifting of the restrictions on capital receipts would help. Doncaster council is currently exploring joint projects with the private sector. Sixth, there should be tourist grants to exploit Conisborough castle. Seventhly, there should be more Manpower Services Commission assistance to develop further training workshops and for an information centre for new business. Finally, there should be the removal of the moratorium on English Estates to enable the next phase of its development on the Denaby industrial estate to commence.
The Department of Employment is sending out inquiries directly to the council, as the county council will no longer exist. I ask the Minister that they be sent out only to development areas. The desperate situation that I have briefly outlined shows that if there is to be any improvement in the morale and in the employment situation in Mexborough and Doncaster all the points I have mentioned must be considered and action must be taken quickly before there is further deterioration.
I ask the Minister to galvanise the various Departments to ensure that collectively help can be forthcoming. We have the manpower and the skills. Please give us the opportunity for those skills to be used in the Doncaster area.
10.23 pm
The Parliamentary Under-Secretary of State for Employment (Mr. Ian Lang): I begin by thanking the hon. Member for Doncaster, North (Mr. Welsh) for his kind welcome to me on this my first appearance at the Dispatch Box and I take careful note of the advice that he gave.
I welcome the opportunity afforded by this Adjournment debate to deal with the serious issues that the hon. Gentleman has raised. I fully appreciate his sincere concern over the problems that many of his constituents face. I shall try to answer as many of his points as possible in the time available. It was also interesting to have the contribution from the hon. Member for Don Valley (Mr.

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Redmond). I note that the hon. Member for Barnsley, West and Penistone (Mr. McKay) has been present throughout the debate. It is particularly appropriate that you, Mr. Deputy Speaker, as the right hon. Member for Doncaster, Central, should have consented to take the Chair.
Unemployment is not just a local or even a national problem but one faced by most of the industrialised world. There are, however, parts of the country that have been particularly badly hit by market conditions and the consequent need for structural change. Employment in the Doncaster area has been dependent traditionally on a few big manufacturing employers. There have been a number of plant closures and contractions in recent years, particularly in mining and engineering. Doncaster is not unique in this respect but that, of course, is no comfort to those affected.
The hon. Member for Doncaster, North particularly mentioned the announcement of the closure of the Youngs Seafoods factory at Thorne. I understand that the reason for this was increasing production costs and the effect of stiff competition. The loss of 190 jobs is very regrettable, but that decision is and must be a matter for the commercial judgment of the company. We would be deceiving the workforce if we pretended otherwise. I understand that work will be transferred to the Grimsby plant and the cold storage depot at Thorne will, in fact, be retained and expanded. It remains true that the frozen food industry in general is doing well with a steadily growing volume of sales.
Doncaster has traditionally been a railway town and British Rail Engineering has been a major source of employment. The BR board has been seeking to reorganise BREL into a more efficient, independent company with two distinct business groups with Doncaster as part of the maintenance group. BR is still working out the detailed implications of the new policies. I know that in seeking cost-effective use of its assets it will take full account of the expertise and facilities at Doncaster. BR has already announced that its new national store will be based at Doncaster.
I welcome the presence of my hon. Friend the Under-Secretary of State for Energy. I know that there has been a significant reduction in job opportunities in the area. The NCB of course maintain its policy of ensuring that there is a job for every man who wishes to remain in the industry. Also, under a £10 million contract signed in May last year the Skillcentre Training Agency agrees to provide training for people leaving the mining industry under the NCB's voluntary redundancy arrangements. The agency provides work assessment, occupational training and training for self employment to meet individual and market needs. I understand that there are no further closures under consideration in south Yorkshire at present and, with production records being broken every week, there is a healthy future for the coal industry.
Doncaster has clearly been through a hard period of readjustment, as the traditional sources of employment have been contracting. It would be a mistake, however, to assume that there are no grounds for optimism. It is never easy to adjust to major shifts in market conditions, but Doncaster has a number of factors going for it. It is a fact of life that the service sector is becoming a more and more important generator of employment. Doncaster is a retailing centre with a large
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catchment area. Sainsbury's opened its first northern store in Doncaster and Hillards plans to open a new superstore in Doncaster which could create up to 250 jobs. The first phase of a £22 million leisure centre at Doncaster airfield is due to start in March. Facilities will include a £14 million water sports centre and a hotel and shopping centre. Such a major enterprise is bound to attract jobs and have a knock-on effect in attracting firms to the area. Doncaster has good communications—it is one and a half hours from London by train and within easy motorway driving distance of the Humberside ports as well being alongside the Al and close to the M1. The countryside around Doncaster is varied and attractive ranging from Forestry Commission plantations in the south to the flatlands in the east. There is real potential for tourism here—not yet exploited — with such attractions as the improved south Yorkshire canal and Conisbrough castle. I am glad to see that Doncaster local authority is working hard to sell the area's undoubted advantages.
Although there are those encouraging signs, I fully accept that a great deal more needs to be done to bring about a turn round in Doncaster's fortunes. Of course, the Government must play their part. The whole of the local authority area has assisted area status with Rotherham and Mexborough having development area status, thus attracting the highest levels of regional aid, receiving over £8 million by way of regional development grants since 1979. For the Doncaster and Rotherham and Mexborough assisted areas as a whole, regional assistance has helped create over 5,000 jobs and safeguarded over 4,500 existing ones.
The assistance is now focused directly on job creation, rather than on encouraging capital-intensive investment by firms which would not significantly expand employment. Also, since last November, some service sector activities are eligible for regional aid for the first time. All this I believe shows the Government's practical concern to help those areas which have been hardest hit by unemployment to adapt to structural change, new markets and to attract investment there.
Enthusiasm and hard work are essential for enterprise to succeed. Sound advice is also needed and so is training. The Government's adult training strategy and their youth training scheme have an important role to play. The extension of the YTS to two years from April represents a major step towards ensuring that all young people under 18 are either in jobs, in full-time education or undertaking high quality training.
As well as young people, we are particularly concerned about the problems of the long-term unemployed, in Doncaster as elsewhere. The community programme—our major scheme to help the long-term unemployed—has been expanded by 100,000 places nationally this year, with an increase in places in the metropolitan district of Doncaster to 2,407, double the figure for last year.
There are many ways in which the Government are giving support and encouragement to the Doncaster area in meeting the challenges it continues to face. Doncaster has high unemployment and declining traditional industries. It also has a great deal of potential for revival and expansion. Regional aid and employment and training measures represent a firm Government commitment to the future of the area. That commitment, together with the efforts of the people of Doncaster

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themselves, is beginning to pay off. There is still much to do to adapt successfully to change and I hope that the people of Doncaster will agree that we have done a great deal to help.
Question put and agreed to.
Adjourned accordingly at twenty-nine minutes past Ten o'clock.