Commons Sitting of 29 January 1986

Preamble
The House met at half-past Two o'clock
PRAYERS
[MR. SPEAKER in the Chair]
PRIVATE BUSINESS
  BERKSHIRE BILL [Lords]
  Read the Third time, and passed, with amendments.

  BRITISH RAILWAYS (No. 2) BILL
  Order for Second Reading read.
  To be read a Second time tomorrow.

  CITY OF LONDON (VARIOUS POWERS) BILL
  Read a Second time, and committed.
  COUNTY OF SOUTH GLAMORGAN (TAFF CROSSING) BILL
  HARWICH PARKESTON QUAY BILL
  MILFORD HAVEN PORT AUTHORITY BILL
  SOUTH YORKSHIRE LIGHT RAIL TRANSIT BILL

  BEXLEY LONDON BOROUGH COUNCIL BILL
  Orders for Second Reading read.
  To be read a Second time tomorrow.

  ISLE OF WIGHT BILL
  Read a Second time, and committed.

  SHOREHAM PORT AUTHORITY BILL
  Order for Second Reading read.
  To be read a Second time tomorrow.

Oral Answers to Questions
  SCOTLAND

    Police
    Mr. Hirstasked the Secretary of State for Scotland which Scottish police forces are currently under establishment strength; and if he will make a statement.
    The Parliamentary Under-Secretary of State for Scotland (Mr. John MacKay): With the exception of Strathclyde police, all Scottish police forces are currently operating close to their authorised establishment levels. Allowing for officers on secondment to central service, Strathclyde is some 180 officers below establishment.
    Mr. Hirst: I am grateful to my hon. Friend for that reply. Does he agree that it is a matter of serious concern that Strathclyde regional council has persistently refused to bring its police force up to establishment strength? Is
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    my hon. Friend aware that that is causing operational problems for the police? Will he and his ministerial colleagues tell the regional council to do everything it can to bring the police force up to establishment strength as quickly as possible?
    Mr. MacKay: I share my hon. Friend's concern. The Government continue to give the highest priority to law and order in their expenditure plans. We are ready to pay our share of the cost of a fully manned force in Strathclyde. It is up to the regional council to show the same determination.
    Mr. Ron Brown: Was undermanning the cause of the death of Gary McGregor, a young constituent, who was knocked down and killed by a speeding police car? If I provide the details to the hon. Gentleman, will he investigate the matter?
    Mr. MacKay: If the hon. Gentleman provides me with the details, I shall certainly look into the case.
    Sir Hector Monro: Will my hon. Friend pay tribute to the police forces in Scotland for their outstanding work" Will he encourage all local authorities to do everything they can to keep their police forces up to strength and to provide them with adequate equipment?
    Mr. MacKay: I am happy to respond to my hon Friend's invitation to pay tribute to policemen throughout Britain. They do a splendid job, and it is essential that they have the best and most modern equipment available in their fight against crime.
    Sir Russell Johnston: Does the hon. Gentleman agree that some of the establishment figures are probably too low? Some regional forces in widespread rural areas, such as the Highlands, are terribly stretched in trying to provide proper cover.
    Mr. MacKay: I recall the problems of the northern constabulary. I would not like to say that they were caused by establishment figures being too low. These figures are arrived at with the clear aim of meeting the operational needs of the police forces of the various authorities.
    Mr. Ewing: Is the Minister aware that the great surge in recruitment came as a result of the recommendations of the Edmund-Davies commission, which was set up by the Labour Government? Does he agree that the underestablishment at Strathclyde is out of a force of more than 6,000 officers? The hon. Member for Strathkelvin and Bearsden (Mr. Hirst) said that underestablishment was causing operational difficulties. Has the chief constable of Strathclyde approached the Minister or the Secretary of State and expressed anxiety about operational difficulties because of an underestablishment of 100 officers out of a force of more than 6,000?
    Mr. MacKay: It is 180 officers out of a force of more than 6,000. The chief constable has not approached me directly and officially about that, but I know from my predecessors that the previous chief constable was worried. We must all share his concern. It is obviously best if the police force is up to its establishment.

    British Rail Engineering Ltd.
    Mr. Martinasked the Secretary of State for Scotland if he will receive a delegation from the work

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    force at British Rail Engineering Limited, Springburn, to discuss compulsory redundancies at the workshops; and if he will make a statement.
    The Parliamentary Under-Secretary of State for Scotland (Mr. Michael Ancram): I understand that my hon. Friend the Minister of State, Department of Transport, is to meet the hon. Member shortly on this subject. Accordingly, no additional meeting is felt to be necessary.
    Mr. Martin: Is the Minister aware that this is the first time in the history of BREL that there have been compulsory redundancies? He knows that Springburn is the only remaining railway workshop in Scotland. Although I shall be meeting the Minister of State, Department of Transport, it is important that the Scottish Office gets involved in this serious problem. The Government claim that they want a return to an industrialised society and to increase industry in Scotland. We must therefore have an efficient railway system. Will the Minister meet the delegation?
    Mr. Ancram: The hon. Gentleman is aware that the future of the works is a matter for the commercial judgment of the British Railways Board and BREL. It is for the board to take account of the need to provide adequate repair and maintenance capacity to meet current and future needs.
    As for the effect on the area and the role of the Scottish Office, I can say that we stand ready to deal with any selective financial assistance or regional development grant proposals for projects in the area.
    Mr. Pollock: If the Dornoch firth railway bridge project went ahead, might it not provide further job opportunities for the BREL work force at Springburn?
    Mr. Ancram: That is still a matter for the British Railways Board to consider. The board and BREL are considering future as well as present requirements and will take account of that when making a decision.
    Mr. Dewar: Does the Minister agree that the Springburn works have a long record of excellence in the railway industry and that the threatened loss of 1,100 jobs in an area of high unemployment is something about which the Scottish Office must be deeply worried, especially as a new crisis has blown up with the recently announced reorganisation of rail workshops which relegates Glasgow to maintenance—very much the second league? Will he use his influence and have positive discussions with his colleagues in the Department of Transport and with the British Railways Board, because our fear is that, once again, the Scottish Office will end up being nothing more than a spectator at the funeral?
    Mr. Ancram: The hon. Gentleman mentioned the recently announced reorganisation. British Rail has made it clear that more work is needed to determine the effect of its proposals on the work load. At this stage, the board has decided only its general principles. The level of staffing required at Springburn to enable it to fulfil its new role will be a matter for the board to determine in due course.

    Local Government Finance (Reform)
    Mr. Kirkwoodasked the Secretary of State for Scotland when he expects to publish Her Majesty's Government's proposals for reform of local government finance.
    The Secretary of State for Scotland (Mr. Malcolm Rifkind): I did so yesterday.
    Mr. Kirkwood: I am deeply touched by the Government's response to this question, which I tabled a fortnight ago. Concerning commercial and non-domestic rates, I understand that there will be an interim transitional period and that there will be a revaluation. When the day dawns that a national business rate is set, what system of litigation will there be for regions such as mine which are traditionally low-rated? Any level of national rate must militate against the south-east of Scotland and the borders and lead to further closures of small businesses there.
    Mr. Rifkind: Any question of a national rate is a good number of years ahead. We have proposed that, in the first years of the new system, there should be an effective freeze on the level of existing non-domestic rates, any increase being accorded to some national index, such as the cost of living or the rate of inflation. I do not have the slightest doubt that that will be a significant improvement for small businesses, including those in the hon. Gentleman's constituency.
    Mr. Speaker: Order. There is to be a statement on this matter, but we shall have a short run on it.
    Mr. Forth: Is my right hon. and learned Friend aware that English ratepayers are looking with envy at the speed with which he and his hon. Friends are proceeding with the excellent reform of local government finance? We hope that England will follow the initiative taking place north of the border at the earliest possible date.
    Mr. Rifkind: I am grateful to my hon. Friend.
    Mr. Craigen: When the Secretary of State came round to the idea of a penal poll tax on the domestic sector in Scotland, was it because he had forgotten about the two Green Papers published by previous Conservative Governments which rejected the idea? Was he simply so busy with foreign affairs in recent years that he forgot the history of England? The poll tax of 1380 led to the peasants' revolt.
    Mr. Rifkind: If the hon. Gentleman has read the Green Paper, he must realise that such a selective reference is misleading, because the Green Paper states that the proposal of the kind that the Government have put forward will
    "strengthen the accountability of authorities to their electorates"
    and that it
    "would have a very broad base and would be suitable for all tiers of local government."
    Perhaps the hon. Gentleman will take that into account.
    Mr. Michael Forsyth: Does my right hon. and learned Friend agree that if the hon. Member for Roxburgh and Berwickshire (Mr. Kirkwood) were truly worried about small businesses in his constituency he would drop his party's absurd view that we should have a local income tax? That would have the effect of small businesses having to find an extra 11p in the pound under the PAYE and almost certainly mean their sacking staff and going out of business.
    Mr. Rifkind: My hon Friend is quite right. The standard rate of local income tax would be increased by between 2p and 11p in the pound. The least prosperous areas would attract the higher increase in the standard rate of income tax. If the Liberal party believes in that policy, it will take some time to convince the people of Scotland of its desirability.

    Steel Industry
    Mr. Tom Clarkeasked the Secretary of State for Scotland when he next expects to meet the Scottish representative of the Iron and Steel Trades Confederation to discuss the future of Gartcosh and Ravenscraig and the implications for the Scottish economy.
    The Parliamentary Under-Secretary of State for Scotland (Mr. Allan Stewart): My right hon. and learned Friend the Secretary of State met representatives of the Iron and Steel Trades Confederation, including its Scottish representative, on 20 January. He also met representatives of the STUC, including the assistant general secretary of the ISTC, on 23 January. There are no plans for a further meeting.
    Mr. Clarke: Does the Minister accept that that was more than the Prime Minister did when the men marched more than 500 miles to state their case? Will he join me in paying tribute to the dignity and commitment of the workers of Gartcosh, especially in recent weeks? Will he respond to their demand that the plant should be retained on a care and maintenance basis and not canabalised, in view of the promised upturn in our country's economic fortunes?
    Mr. Stewart: Hon. Members on boh sides of the House have the highest respect for the Scottish steelworkers. The Prime Minister was unable to see the marchers at the time that they had requested. My hon. Friend the Minister of State, Department of Trade and Industry wrote to the marchers explaining the position. He offered a meeting either with himself or with my right hon. and learned Friend the Secretary of State for Scotland.
    Mr. Allen Adams: On a point of order, Mr. Speaker. While we are discussing a matter as important as Gartcosh, is it not a contempt of the House for Conservative Members to be lying down? Will you remind—
    Mr. Speaker: Order. I call Mr. Fletcher.
    Mr. Fletcher: Will my hon. Friend take the earliest opportunity to make it clear to the British Steel Corporation that, while he has accepted its advice that the closure of Gartcosh will not prejudice the future of Ravenscraig, he will not accept similar advice from the BSC if it proposes to close any other significant steelworks in Scotland?
    Mr. Stewart: The Government have consistently made it clear that any question about Ravenscraig is a strategic matter involving the Government. I have no reason to doubt that there is no question mark over the future of Dalzell.
    Mr. George Robertson: Has the Minister's new boss yet told him whether he, like his predecessor, is willing to threaten to resign if there is any possibility of the Government and the British Steel Corporation closing Ravenscraig?
    Mr. Stewart: What has become important about the long debate over the Scottish steel industry in recent months is the clear implication and unambiguous statement from the British Steel Corporation that it does not believe that the closure of Gartcosh in any way affects the viability or will determine the future of Ravenscraig. The Government's commitment to Ravenscraig is clear.
    Mr. Bill Walker: When my hon. Friend next meets ISTC representatives, will he draw their attention to the fact that if more of them bought British cars that would more effectively ensure the survival of Ravenscraig, and that if more of them supported the Trident programme that would also affect the BSC?
    Mr. Stewart: My hon. Friend's points, especially in relation to Trident, are well made.
    Dr. Bray: Will the Minister advise his new colleague, the Secretary of State, not to rush into a decision about the moth-balling or maintenance in working order of Gartcosh until he has had time properly to examine the evidence? He did not have time to examine the evidence before taking a decision on Gartcosh, but its maintenence in working order is a different matter.
    Mr. Stewart: I assure the hon. Gentleman that my right hon. and learned Friend fully briefed himself from all the papers about that matter. He is arranging to meet the chairman and chairman elect of BSC.
    Mr. Henderson: Does my hon. Friend agree with the ISTC that Ravenscraig is of strategic importance to the Scottish economy? No good is done to that by continually suggesting that the future of Ravenscraig is dependent on Gartcosh. Does he also agree that the wholly unparliamentary demonstration after the meeting of the Scottish Grand Committee in Edinburgh on 20 January will do no good to the cause of Scottish steel and shows a curious sense of priorities when many more of our constituents work and are involved in higher education than ever worked at Gartcosh?
    Mr. Stewart: I thought that the debate on higher education in which my hon. Friend took part was a good one. I was not there for the subsequent demonstration to which he referred. There is a serious danger of talking down the future of the Scottish steel industry. I hope that no Opposition Members will fall into that trap.
    Mr. Dewar: Whatever disagreements there may be on the link between Gartcosh and Ravenscraig, does the Minister accept that there is an important continuing role for the Dalzell plate mill and that it is essential for Ravenscraig's future? He said a few minutes ago that he knew of no plans to close it. Is he aware that there are strong rumours—apparently based on information reaching the trade union side—that there is such a plan? Has he investigated that possibility? Can he give a positive assurance that there is no threat to the future of Dalzell? I ask him to be specific on this. Will he make it clear that any plans to close Dalzell will require political and Cabinet approval and will not be left in the hands of the BSC management as some kind of tactical decision.
    Mr. Stewart: I have no reason to doubt Dalzell's future. As the House is aware, it serves the offshore industry. There has been scaremongering, and I do not think that that is in anyone's interest.

    Economic Policy
    Mr. Maclennanasked the Secretary of State for Scotland if he has any proposals to stimulate the Scottish industrial economy; and if he will make a statement.
    Mr. Rifkind: The Government's economic policies are already securing growth in the Scottish and United Kingdom economies. The latest figures show strong growth in Scottish industrial output in the first half of last year. A further rise in activity is expected.
    Mr. Maclennan: The Secretary of State's reply is complacent. Does he recognise that the worldwide difficulties of the electronics industry bode ill for the future of the 40,000 jobs in the central belt, and that the downward pressure on oil prices must call in question some of the activities in the marginal areas of the North sea? Is it not the Government's duty to take counter-cyclical measures to stimulate the building industry, in particular, which is depressed?
    Mr. Rifkind: The hon. Gentleman is correct in saying that there have been some problems in the electronics industry, especially regarding semi-conductors, but that does not apply to the whole of the industry. My first responsibility as Secretary of State for Scotland was to take part in setting up a new company in Cumbernauld—Isola, from Germany—providing 200 jobs in the electronics industry.
    Secondly, the hon. Gentleman referred to the need to stimulate the economy. He should be aware that since 1980 the Scottish Office has substantially increased capital expenditure in real terms on the Scottish economy in areas for which it is responsible.
    Mr. Hirst: Does my right hon. and learned Friend not find it a sad reflection on the Scottish media that although during the past month the Department of Trade and Industry has assisted in bring two major job-creating projects to Scotland, there has been virtually no publicity for the fact that TMC and English Sewing Cotton are moving to Scotland and creating as many jobs as are lost at Gartcosh?
    Mr. Rifkind: My hon. Friend is correct. Sadly, there is a much greater willingness to announce job losses than job gains. The media's responsibility should be to give equal publicity to both.
    Mr. Robert Sheldon: Is the Secretary of State aware that the Scottish Development Agency, from which we expect development of the Scottish economy, should not be using the rate of return as a test? One can get a high rate of return by spending money on financial instruments. The SDA should be spending it on getting more jobs and improving industry. Its success should be judged against those objectives, not against the rate of return.
    Mr. Rifkind: I am willing to listen to any suggestions that the SDA wishes to put to me for an improvement in its performance. I must emphasise that the SDA has a high budget and has been extremely successful in attracting investment and building up our economic infrastructure.
    Mr. Pollock: Does my right hon. and learned Friend agree that the Scottish economy will not be stimulated, certainly in rural areas, if there is a re-rating of agricultural land? Does he recall that until recently that appeared to be the policy of the alliance? Does he expect the alliance to reaffirm that policy in our debate later this afternoon?
    Mr. Rifkind: That may well have been the agreed policy of the alliance, but we can confidently expect to hear little about it in the months to come.
    Mr. James Hamilton: Is the Secretary of State aware that the Confederation of British Industry has stated that it expects a reduction in manufacturing industry and that that will mean an increase in unemployment in Scotland? In addition to the closure of Gartcosh with the loss of 700 jobs, 460 jobs will be lost at the Clydesdale and other tube manufacturing works. Is he aware that, because of that, Lanarkshire is fast becoming an industrial desert? Is it not time that the Secretary of State did something about that, and paid attention to the point about the SDA made by my right hon. Friend the Member for Ashton-under-Lyne (Mr. Sheldon)?
    Mr. Rifkind: Lanarkshire's problems are indeed serious, especially regarding employment. The SDA already has a substantial role in both the Motherwell and Coatbridge projects. It hopes to enable those projects to continue and, if possible, to expand. In addition to the money that the BSC provides in areas of steel closures, and new money from the European regional development fund, there are substantial sums of both public money and private investment in Lanarkshire. We welcome and encourage that.
    Mr. Lambie: Why is the Secretary of State allowing Scottish Office officials to stop a Finnish company from constructing a paper mill in Irvine, which will create 700 jobs? Surely that is interference in the commercial judgment of the company, which wants to come to Irvine?
    Mr. Rifkind: That is an absurd remark. Obviously we are extremely anxious to attract pulp mill facilities to Scotland, and naturally we will do all that we can to facilitate that. The Government cannot direct which part of Scotland shall have such a facility. If the hon. Gentleman has the interests of Scotland at heart he should do all that he can to ensure that the facility comes to Scotland, and should not deter that prospect by irresponsible comments.
    Mr. Foulkes: Is the Secretary of State aware that Icarus Trucks is going to Austria rather than Prestwick freeport because his Department refused the company a grant? Is he further aware that Argyll Sports Cars will go to another part of Scotland rather than Prestwick freeport because it has been directed to do so by the Scottish Development Association? Will the Secretary of State investigate why it is that Customs and Excise, the SDA and, indeed, his own Department are undermining Prestwick freeport?
    Mr. Rifkind: On reflection, the hon. Gentleman will be the first to appreciate that the SDA cannot direct anyone to go anywhere. The Government and the SDA have a responsibility to attract investment to Scotland. The precise location chosen by an investor is determined by that investor in the light of all the circumstances.
    Mr. Bill Walker: Does my right hon. and learned Friend agree that there is no lack of demand in Scotland, and that the Government's proposals on rating reform by making more people accountable, will, certainly help industry? The proposed Buy British campaign will also stimulate demand. These things will do a lot to offset the imbalance in imports.
    Mr. Rifkind: My hon. Friend is correct. Scotland is doing reasonably well compared to the United Kingdom

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    as a whole. The latest figures show an increase in manufacturing output in Scotland of 5½ per cent. compared with 3 per cent. in the United Kingdom as a whole. From a Scottish point of view that is an encouraging development.
    Mr. Ewing: Does no one in ministerial offices tell Ministers anything now? Has no one in the Secretary of State's office drawn his attention to the CBI survey published in today's Glasgow Herald? That survey shows that orders are down, employment is down and output and investment are back to 1963 levels, not 1979 levels. Against the background of that CBI survey, how on earth can the Secretary of State say that the Scottish economy is flourishing? It is precisely because the Secretary of State and his colleagues have presided over the destruction of the Scottish industrial economy that they will be completely wiped out at the next general election.
    Mr. Rifkind: The hon. Gentleman is quoting the CBI. He might like to find out from the CBI, including the CBI in Scotland, whether it would welcome the return of a Labour Government in preference to the present one.

    Schools (Closures)
    Mr. Norman Hoggasked the Secretary of State for Scotland what criteria he applies in determining the provision of new schools to serve developing areas; and what criteria are used by regional authorities when school closures are proposed.
    Mr. Allan Stewart: In determining capital allocations, priority is given to projects designed to provide additional places in areas where the school population is growing and there is insufficient accommodation, and to rationalisation proposals. The criteria for most school closures are determined by education authorities without reference to my right hon. and learned Friend.
    Mr. Norman Hogg: Is the Minister aware that there is a crying need for a new school in the developing area of Balloch/Eastfield in my constituency? Is he further aware that the policy he has just mentioned means that a new school will be built only if another school closes, possibly Seafar primary school? Will the Minister see to it that Strathclyde regional council is given sufficient funds to build a new school and maintain the existing primary school provision throughout Cumbernauld and Kilsyth?
    Mr. Stewart: There is substantial overprovision of primary places in Cumbernauld, and simply to add a primary school at Balloch-Eastfield would worsen that problem. That would be bad educationally and a waste of resources. As part of a process of rationalisation, the capital allocation for education authorities shortly to be announced will include provision for a new primary school at Balloch-Eastfield. Work on that school will start next year.
    Mrs. McCurley: Does my hon. Friend agree that in my constituency, in the greatly expanding village of Houston, there is a legitimate demand for extra school places and additional school building? That is a highly rated area. It is extremely dangerous for some of the children to travel the miles expected of them to the nearest school.
    Mr. Stewart: I note with interest and sympathy what my hon. Friend has said. As she will appreciate, proposals
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    have to come through Strathclyde region to the Scottish Office, but I shall investigate the up-to-date position on Houston.

    Agricultural Advisory Service
    Mr. Donald Stewartasked the Secretary of State for Scotland what representations he has received following the DAFS paper on agricultural advisory services in Scotland.
    Mr. John MacKay: A substantial number of comments have been received on the Department's consultation paper. Further responses are expected. Careful consideration will be given to the views before a conclusion is reached.
    Mr. Stewart: Is the Minister aware that the maintenance of research and development services is vital for Scottish agriculture and that the intentions announced are causing grave disquiet throughout Scotland? Those are in addition to action such as the removal of the MacCaulay institute from Aberdeen and the curtailment of the veterinary investigation services, which will lead to a decrease in the supervision of diseases communicable to man. All the cuts are having effects on the industry, on employment and possibly on health. What action does the Minister intend to take?
    Mr. MacKay: As usual, the right hon. Gentleman greatly overstates the case. The Government fully recognise the value of advisory services on the ground. For that reason we believe that producers, as direct beneficiaries, should themselves make a contribution towards costs, besides the major and continuing funding from Government.
    Mr. Home Robertson: Will the Minister accept that the consultative document has nothing to do with priorities for agriculture in Scotland, but has everything to do with Treasury cuts? We have a 41 per cent. cut in the advisory services, downright dangerous proposals for the state veterinary service in Scotland, and now the moronic idea of removing the Macaulay institute from Aberdeen. Is there no end to the sacrifices which rural Scotland will have to make under the Tory Administration?
    Mr. MacKay: I invite the hon. Gentleman to do a check on the amount of money that the Government spend on rural Scotland. He will then see the absolute fallacy of his case. On the future of the Macaulay institute, the rationale behind the proposals was set out in the paper published in December. Further study will be required before a decision can be taken on whether the new amalgamated institute should be in Aberdeen or in Edinburgh.
    Mr. Bruce: Notwithstanding what has been said by other hon. Members, will the Minister acknowledge that the 41 per cent. cut is proving extremely difficult to implement and will be very damaging if implemented on the time scale that the Government want? Even if he will. not rescind the cut, will he agree to extend the time scale to give the colleges a reasonable opportunity to cope with what is being asked of them? To implement the time scale as proposed will prove very damaging.
    Mr. MacKay: I have no plans to adjust the timetable already announced.

    Teachers (Dispute)
    Mr. Dalyellasked the Secretary of State for Scotland if he will make a statement on the teachers' dispute in Scotland.
    Mr. Rifkind: I am in no doubt of the urgent need to get a resolution of this protracted and damaging dispute. I believe that that can be found only through negotiation between teachers and employers on the basis of the resources which the Government have already said they are prepared to make available in return for a suitable agreement on teachers' duties and conditions of service.
    Mr. Dalyell: The Secretary of State was reported as saying to parents at Balerno high school that there had to be some compromise. What does he have in mind as regards compromise?
    Mr. Rifkind: I can tell the hon. Gentleman exactly what I had in mind. In response to the wishes of the unions, the Government indicated in an unprecedented way that they were able and willing to make £125 million available on top of whatever was negotiated in the normal fashion. I believe the union response to that proposal was depressing and unjustified.
    Sir Hector Monro: Does my right hon. and learned Friend agree that, although we have been arguing for about 18 months, there is no sign of a welcome from the Educational Institute of Scotland for the very generous offer of £125 million that my right hon. and learned Friend has said he will make available? In view of the fact that many parents are reaching the stage of despair about their children's education, will he make a last effort to get the EIS to meet him to resolve salaries and conditions of service through the proper channels?
    Mr. Rifkind: The proposal which the Government made would, if accepted, add an average of about £1,000 to a teacher's salary on top of what might be negotiated otherwise in the normal fashion. I have received a request from the Churches, which have been helping in this matter, to come and see me, and I have said that I will be very happy to see them.
    Mr. Steel: To what extent is the settlement of this dispute being held up by the lack of a settlement in the parallel dispute in England and Wales? In the course of seeking a compromise, will the right hon. and learned Gentleman talk further to his colleagues in the Treasury about securing more for the current year's settlement? Is he aware that the Scottish Examination Board says that it will be one-third short of the number of markers that it needs, which surely brings into danger the whole academic year for many of our pupils?
    Mr. Rifkind: We all welcome the prospect of an end to disruption in England and Wales. We have to note that the agreement seems to have been reached on the basis of no new resources being available from the Government in addition to those already promised. I agree with the right hon. Gentleman that the position concerning examinations in Scotland is very worrying. The Scottish Examination Board is doing all in its power to minimise the problems that will be caused, and the Scottish Office will be giving full support to efforts of that kind. Nevertheless, one cannot avoid the inevitable conclusion that if this disruption continues it will be impossible to provide a normal examination service.
    Mr. Henderson: Does my right hon. and learned Friend agree that the wisest decision of the EIS in the past year has been to hold its annual conference in St. Andrews next week? Is he aware that I will be addressing that conference? Is there any message that he would like me to give to the Scottish teachers on that occasion?
    Mr. Rifkind: I am delighted that my hon. Friend will be addressing the EIS conference in his constituency. I hope that he will put to the EIS the very clear view of the overwhelming majority of people in Scotland that, whatever view they take of the merits of the dispute, this disruption of our schools and the threat to Scottish examinations is not justified.
    Mr. Strang: Now that the initiative of the Church of Scotland and the Roman Catholic Church has been cautiously noted by the EIS, and the management side has agreed to a continuing commitment to an independent pay review, will the right hon. and learned Gentleman accept that he probably has a better chance now than his predecessor had of resolving a dispute which is seriously blighting the future of many Scottish schoolchildren? Will he, therefore, make every effort to come forward with a positive initiative or response when he meets the Church leaders on 10 February?
    Mr. Rifkind: The views which Mr. Pollock is reported to have put to his colleagues in the EIS were, as the hon. Gentleman says, noted rather than approved, and Mr. Pollock himself expressed considerable disappointment at the response of his colleagues. Naturally, I will listen with great interest to the Church leaders. I must emphasise that this, as we all know, is a dispute not just about pay but about conditions of service. It has to be pointed out that all the local authorities in Scotland, Labour-controlled as well as Conservative, have emphasised to the teachers that any final package must include conditions of service as well as pay. It is not just the Government, not just Conservative authorities, who are saying that. Labour authorities are saying it as well, and that is a very important consideration.
    Mr. Canavan: Instead of merely repeating the bland statements of his predecessor, when will the Secretary of State get it into his head that the surest way of bringing to an end this very damaging dispute is to set up an independent pay review? In the meantime, will he investigate one aspect of the examination boycott, namely, the alleged inconsistencies in the marking of SCE examination papers, possibly caused by the methods used by the examination board to recruit markers, some of them scabs and blacklegs with dubious qualifications and little, if any, experience of presenting pupils for Scottish examinations?
    Mr. Rifkind: I have every confidence in the Scottish Examination Board. The hon. Gentleman is showing disgraceful contempt for many honourable people who have given time and energy to assisting Scottish youngsters in the pursuit of their education. The hon. Gentleman really should substantiate his disgraceful allegations, or withdraw them.
    Mr. Fletcher: Even allowing for the responsibilities of local authorities in this matter, will my right hon. and learned Friend lay his best proposals for teachers' pay and conditions of service on the table, if only to make it abundantly clear that the responsibility for this damaging and protracted dispute lies with the EIS?
    Mr. Rifkind: The Government have put their proposals on the table. Eighteen months into the dispute, the EIS and teachers' unions have yet to put forward a claim, and that itself is a most extraordinary position to be in.
    Mr. Ewing: Is the Secretary of State aware that for the first time he has conceded today that the examinations are in serious jeopardy? So far his predecessor has given the impression that the examinations would go ahead uninterrupted. Since the right hon. and learned Gentleman became Secretary of State, has he approached the EIS and other teaching unions with a view to discussing this serious dispute? Will he be a bit more flexible about conditions of service, against the background of the introduction of the standard grades and Munn and Dunning? Surely the right hon. and learned Gentleman will concede that even teachers find it difficult to know what their conditions of service will be until the introduction of the standard grades and Munn and Dunning have settled down. That will take some considerable time, so may we have some flexibility on that point as well?
    Mr. Rifkind: The teachers' unions have said that they would like me to meet the delegation from the Churches. I have already said that I shall be doing so, and a meeting has been arranged.
    The Government have always been flexible on conditions of service. We have not sought to lay down in advance what the final detail of a package must be. What we have said, and what the local authorities, including Labour local authorities, have said, is that this must be part of a package and must be negotiated.
    My right hon. Friend the previous Secretary of State for Scotland never gave a categorical assurance that examinations would not be affected, because he was not in a position to ensure that that would be the case. The extent of disruption will be determined, not by myself or, indeed, by the hon. Gentleman, but by the extent to which members of the teaching profession refuse to carry out their normal responsibilities. That is something in their control and not in that of the Government.
    Mr. Dalyell: On a point of order, Mr. Speaker. In view of the unsatisfactory nature of the reply, I give notice that I shall seek to raise this matter on the Adjournment.
    Mr. Wilson: Will the Secretary of State take an initiative in this matter? When he was appointed to his present office he took the view—[HON. MEMBERS: "Order."]
    Mr. Speaker: Order. I should not have called the hon. Member, but I have. Please carry on.
    Mr. Wilson: Will the Secretary of State take an initiative in relation to the education dispute, because one of the grounds on which his appointment to his present office was welcomed was that a new incumbent might be able to take steps which his predecessor could not? Does he understand just how deeply feelings run in relation to this matter and that we look to him for some initiative?
    Mr. Rifkind: Not only do I understand how deeply feelings run, but I share those feelings. No one who has the best interests of Scottish education at heart can simply look with equanimity at the major problems that are being caused, not simply in regard to examinations, important though they are, but in relation to the long-term damage being done to the education system as long as the dispute
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    continues. That is why I have said that a compromise is necessary. There will be no victors and vanquished in this dispute, and it is necessary for the unions as well as others to show a willingness to achieve an acceptable package, acceptable not just to themselves and the Government, but to the local authorities, which are their employers.

    Youth Training Scheme
    Mr. Maxtonasked the Secretary of State for Scotland if he will make a statement on the future of the youth training scheme run by the volunteer centre in the west of Scotland.
    Mr. Allan Stewart: Since the decision by the Glasgow volunteer centre to discontinue its participation in the YTS when the two-year scheme begins in April was announced on 15 January, the centre has sought further clarification from the Manpower Services Commission on a number of points — I understand with a view to its possible continued involvement with YTS.
    Mr. Maxton: Is the Minister aware that there will be a loss of 213 training places on the scheme and 50 full-time jobs if the volunteer centre is forced to close because of the financing now given by the MSC? That will also apply to many other voluntary organisations throughout Scotland. Will he meet the MSC urgently to ensure that such schemes continue, otherwise there will be a loss of places, which will make nonsense of the Government's promise that every youngster will get a training place?
    Mr. Stewart: I am in touch with the MSC on this matter, but I emphasise that the MSC has gone to great lengths to accommodate the current mode B1 providers. In addition to the standard monthly payments and management agents' fee, such providers would get premium funding of £110 per month and transitional funding over the first two years of up to £70 per filled place per month. Naturally I would regret it if the centre withdrew, but my understanding is that out of 15 voluntary organisations currently providing the one-year YTS only four have said that for various reasons they will not participate in the two-year scheme.
    Mr. Roy Jenkins: Is the Minister aware that widespread dismay is being caused by the prospect of the cessation of the centre's work in this respect? As this is due to take effect in March, owing to a change in the method of funding, will he at least ensure the postponement of that change so that the matter can be discussed in depth to see whether a satisfactory solution can be found?
    Mr. Stewart: I repeat that detailed discussions are continuing. On the general point, the funding arrangements take full account of representations on behalf of voluntary bodies at the youth training board and were agreed by the MSC, which, as the right hon. Gentleman knows, represents a wide range of interests.
    Mr. Bill Walker: Is my hon. Friend aware that the problems in Glasgow have also occurred elsewhere? Is he further aware that experience in other areas shows that disabled individuals can be offered training under the schemes and that an approach by my hon. and learned Friend the Solicitor-General for Scotland, the hon. Member for Dundee, West (Mr. Ross) and myself in relation to this problem has met with a very positive response?
    Mr. Stewart: My hon. Friend is absolutely right about provision for disabled youngsters. On the point that he and others have raised with me, I can reassure him that there are applications on the Dundee schemes.
    Mr. Buchan: Is the Minister aware that more than one third of the people involved in this come from my constituency in Paisley? Is he further aware that the real problem is the alteration in funding, because certain organisations are not in a position to raise, as it were, employer money? Does he accept that this means not only a social loss for the young people, who could not easily adapt to participation in a Government scheme, but the loss of the social work carried out by them, which includes the decoration of 2,000 houses in my constituency, which otherwise could not have taken place?
    Mr. Stewart: I know of the hon. Gentleman's constituency concern, as he has written to us about it. I must emphasise, however, that employer placement is an important aspect of the two-year YTS because it provides wholly realistic work experience and enables employers to contribute directly to the cost.

  SOLICITOR-GENERAL FOR SCOTLAND

    Drink-driving
    Mr. David Marshallasked the Solicitor-General for Scotland how many drivers were prosecuted for drink-driving offences alleged to have been committed between 24 December 1985 and 3 January 1986.
    The Solicitor-General for Scotland (Mr. Peter Fraser): As at 22 January 1986, 22 offenders had appeared in court and proceedings have been instituted against another 15 in respect of drink-driving offences committed during the period to which the hon. Member refers.
    Mr. Marshall: Can the Minister say how many of those cases were just above the limit, how many a fair bit above the limit and how many a great deal above the limit? Is he aware of the very large increase in drink-driving offences since the new year, especially in Strathclyde? Will he guarantee to wage war on drunk drivers all year round and not just during the festive season?
    The Solicitor-General for Scotland: I regret that at this stage I cannot give any idea of the levels applying in the particular cases. As the figures that I have given relate only to cases that have already reached the procurator fiscal or gone into court, I expect that there will be a considerable number in addition to that. As I told the House recently, in 1984 the total number of people successfully prosecuted for drunk driving in Scotland was about 13,500. As far as I and my noble and learned Friend the Lord Advocate are concerned, there will certainly be no let-up in the prosecution of those who drink and drive.
    Mr. Hirst: Does my hon. and learned Friend agree that the message from the Scottish police forces at Christmas that they intended to get tough on drunk drivers was successful in making people think twice about drinking and then driving? As so many road accidents after dark are drink-related, does my hon. and learned Friend agree that it is an acceptable infringement of personal liberty for the police to be able to carry out random breath tests at the roadside?
    The Solicitor-General for Scotland: At the moment it is difficult to say whether the campaign has been wholly successful. The point that I should like to emphasise to my hon. Friend, and more generally, is that I do not believe that it is simply a campaign that needs to be waged at Christmas and the new year. It must be maintained throughout the year, because, contrary to popular belief, there is still an unhappily high incidence of drink-driving at other times. On the matter of random testing, I think my hon. Friend will appreciate that it is not strictly a matter for me. However, he may already be aware that under the Road Traffic Act 1972 the police have a general power to stop such people from driving.
    Mr. Willie W. Hamilton: Does the Minister recall the case that I brought to his attention where a drunken driver who was three times above the limit killed a 69-year-old woman in my constituency and was given a slap over the wrists for it? Does he not recognise that there is widespread anger throughout the United Kingdom over the leniency of sentences given to those potential murderers? What steps are the Government taking to see that sentences reflect the seriousness of the case against the drivers? Can the hon. and learned Gentleman give any figures of the sentences imposed on such people during the winter season, over the Christmas season in particular, and over the year in general in Scotland?
    The Solicitor-General for Scotland: I certainly remember the case to which the hon. Gentleman and many of his hon. Friends have already referred. I think he will appreciate that in Scotland we try to separate the prosecution and the judiciary as rigorously as possible. Accordingly, it is inappropriate for me to comment on any sentence. However, I take into account what he has to say and the feelings that are expressed by others on this matter. That is always taken into account when deciding whether a particular case is more appropriately dealt with summarily, by a sheriff and jury or possibly by the High Court itself.

    Crown Immunity
    Mr. Canavanasked the Solicitor-General for Scotland what consideration has been given by the Crown Office to the implications for prosecution policy of changes in Crown immunity.
    The Solicitor-General for Scotland: In the event of any change in Crown immunity whereby persons who at present are not subject to prosecution could become liable, no special consideration would be necessary. The same criteria as are applied in all criminal cases would be used.
    Mr. Canavan: In view of the revelations last week about the deplorable standards of kitchen hygiene in hospitals such as Stanley Royd hospital in Wakefield and Woodilee hospital in the constituency of my hon. Friend the Member for Monklands, West (Mr. Clarke), where cockroaches were found in the kitchen, is it not time that hospital premises were deprived of Crown immunity so that the Solicitor-General could, if necessary, take out a prosecution against the Secretary of State for Scotland, who, as Minister responsible for the Health Service in Scotland, is primarily reponsible for putting the health of patients in our hospitals at risk?
    The Solicitor-General for Scotland: I am sure that the hon. Gentleman appreciates that that is not strictly a matter

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    for me. Indeed, my right hon. and learned Friend the Secretary of State has already said that there is to be a review of the matter in relation to the National Health Service. In any event, I think the hon. Gentleman appreciates that, flamboyant as it may sound, my right hon. and learned Friend would not be someone who is subject to prosecution.
    Mr. Kennedy: When this matter was raised in a much earlier Scottish Question Time, the Solicitor-General referred to the internal review that was taking place. He may recall that I asked whether his Department had been in touch with the Department of Health and Social Security south of the border, which is instituting the review and had tried to put something in to it. It had not then. Has it now?
    The Solicitor-General for Scotland: In view of the observations that have been made about advice from my counterpart south of the border in relation to other Departments and any legal advice that might have emanated from the Law Officers in Scotland, I think that in the circumstances I should decline to answer.
    Mr. Michael Forsyth: Will my hon. and learned Friend confirm that if the hon. Member for Falkirk, West (Mr. Canavan) is concerned about dirty conditions in hospital kitchens he should advise the health boards to contract out the services, and the contractors would enjoy no such Crown immunity?
    The Solicitor-General for Scotland: My hon. Friend is correct. If there were a private contractor providing those services, because of its relationship, it would not enjoy Crown immunity.
    Mr. Tom Clarke: Will the hon. and learned Gentleman accept that there was great concern in my constituency about the disclosures in Woodilee hospital, and one of his hon. Friends, the Minister responsible for health, was kind enough to meet me? Notwithstanding that, will he give an assurance to the House that the review to which he referred will be completed in the near future and that action will be taken as a matter of extreme urgency?
    The Solicitor-General for Scotland: I have to say that that is not a matter for me. However, I will say, as I said in my original answer, that if there were to be a change in Crown immunity I can assure the hon. Gentleman that no one who is in breach of the criminal law, whatever position he holds, would be afforded any special treatment. They would all be treated in the same way, with the same criteria applying to anyone who breaks the law.

    Abusive Language and Threatening Behaviour
    Mr. Hendersonasked the Solicitor-General for Scotland whether he has any plans to initiate a more vigorous prosecution policy in respect of abusive language
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    and threatening behaviour generally, and in particular when directed against persons in positions of responsibility, including the police; and if he will make a statement.
    The Solicitor-General for Scotland: Procurators fiscal presently give full and proper consideration to reports of such behaviour and criminal proceedings are taken where appropriate. I am not aware of any cases where that has not been done, but if my hon. Friend will provide me with details of any case concerning him, I shall certainly investigate.
    Mr. Henderson: Is my hon. and learned Friend aware that in some sections of society there seems to be an idea that people in positions of responsibility, such as teachers and policemen, are fair game for the abuse referred to in my question? Does my hon. and learned Friend agree that the opposite is the case? We, as a society, put those people in a particular position of responsibility, and abuse of them is an abuse of society, and should be treated much more seriously than it sometimes is.
    The Solicitor-General for Scotland: As I have said, the policy that we try to follow in prosecution is to make no special distinction between ordinary members of society and those who hold other positions. I accept that sometimes it seems to be the view that police officers, in particular, are fair game for assault and violence, whereas they are entitled to the protection of the law as much as are ordinary citizens.
    Mr. Ewing: Is the Solicitor-General for Scotland aware that the only two recent incidents of abuse and such offences against people of public standing were in the Tory-held constituencies of Tayside, North, against the hon. Member for Tayside, North (Mr. Walker), and in Perth and Kinross, against the hon. and learned Member for Perth and Kinross (Mr. Fairbairn)? Is there not a lesson to be learnt when there is all that violence in Tory heartland? Nothing like that ever happens in any of the 41 Labour-held constituencies.
    The Solicitor-General for Scotland: I am certainly aware of the two incidents to which the hon. Gentleman refers. He talked about the incident at Tayside. I am pleased to say that no such incident has happened on the eastern seaboard, in Angus.
    Later—
    Mr. Bill Walker: On a point of order, Mr. Speaker. You will recollect that the last question to my hon. and learned Friend the Solicitor-General for Scotland drew attention to an assault on me. The individual who was charged and convicted of that assault was judged to be in need of medical attention. I suggest that the question was unworthy of the House, and did nothing for the standard, conduct or reputation of the House.
    Mr. Speaker: I am not responsible for the way in which questions are presented.

Local Government Finance (Scotland)
3.32 pm
The Secretary of State for Scotland (Mr. Malcolm Rifkind): With permission, Mr. Speaker, I hope that it will be helpful to the House if I make a short statement on specifically Scottish issues arising from yesterday's publication of the Green Paper "Paying for Local Government".
The general lines of the proposals were explained by my right hon. Friend the Secretary of State for the Environment. The Government are ready to deal with the manifest defects of the present system of paying for local services, and we plan to introduce legislation which will replace unfair domestic rates by a community charge; will bring reasonable protection to shops and businesses; and will set up a fairer and simpler grant system and remove the need for the present system of penalties against local authorities. We have invited comments on those proposals by 31 July.
In Scotland, experience of the past few years has shown conclusively that existing domestic rates are wholly unacceptable to a very wide range of the population. We recognise that and are therefore at present planning for early legislation in the coming parliamentary Session to abolish the domestic rating system in Scotland. The Green Paper envisages that all domestic rate bills in Scotland would be cut by 40 per cent. with effect from 1 April 1989 and would be finally abolished at the end of March 1992. It will follow that there will be no further revaluation of domestic property in Scotland.
The proposed community charge will, we believe, be fairer than domestic rates. Those who have been used to contributing nothing from their earnings to the revenue raised by domestic rates may regret the new charge, but most will accept that it is not unreasonable that we should discontinue a system that imposes the full burden on a minority of the public, including some of the poorest members of the community.
Shopkeepers and business men who have had taxation without representation will now be protected from the effects of an unfair system. Any increases in their rates will only occur on the basis of a national index. Business in both rural and urban areas will find this far preferable to the present Scottish system.
Scottish local authorities will, we hope, welcome the end of the present system of penalties that has not helped the relationship between central and local government.
For some time the Scottish public and ratepayers in particular have called for effective action. These proposals represent a fair and reasonable response, and I look forward to hearing the views of ratepayers and others affected by them.
Mr. Donald Dewar: I extend my sympathy to the right hon. and learned Gentleman. He has inherited this rather ramshackle and confused scheme from his predecessor, and, of course, every advocate on occasions gets a rotten brief. I am sure he is doing his best with it.
There is a large number of points in connection with non-domestic rating and the grant system that could be raised, but I want to concentrate on domestic rates. Will the Secretary of State accept that his so-called community charge is no more than a flat-rate poll tax—so much per
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Scot—which means that a man of modest means would pay the same as the richest in the land? Is the key to the philosophy behind this scheme the admission on page 25 of the Green Paper:
"Moving from rates to a flat-rate community charge would mark a major change in the direction of local government finance back to the notion of charging for local authority services"?
That is a direct repudiation of the redistributive principle which will have woeful consequences for many in our society. The Green Paper concedes that 52 per cent. of Scottish households will be worse off when the community charge is implemented.
Will the Secretary of State accept that the majority of the victims will be ordinary working families, and that those who will largely benefit will be the upper income groups—doctors, lawyers, accountants and Members of Parliament?
Is the right hon. and learned Gentleman seriously asking me to back this scheme, which may well reduce my personal outgoings by £700 a year, when I know that cash will have to be recouped at the expense of families, perhaps in my own constituency, who have a lot less money and many more financial problems? Is the only basis on which I could give my support the principle of self-interest? Whichever way the figures are presented, will not the poorer families with three of four adult members be hit, and hit hard?
I protest about the ram-stam rush to legislate in Scotland. Has the Secretary of State reflected on the contrast with yesterday's statement from the Department of the Environment, which made it clear that the pace of further development would depend on the outcome of consultation? Does the pledge that there will be legislation in the next Session mean that consultation in Scotland is an empty sham?
Will the right hon. and learned Gentleman promise that there will be a White Paper before we legislate, dealing with the many practical problems that will arise? What will be the cost of the special register? Once the Social Security Bill is in operation, does the Secretary of State expect local authorities to sue an unemployed 19-year-old for his poll tax contribution of £40 or £50? If he does, will that money be clawed back out of that person's benefit?
Will the right hon. and learned Gentleman deal with issues raised in the White Paper, such as second homes —who pays and how much? Will he give a guarantee that students in digs and in halls of residence will be adequately compensated, and that this matter will be negotiated and settled in Scotland before Scottish legislation is introduced? We need detailed answers to that and a myriad other questions, and we need the opportunity to have an early and thorough debate.
Does the Secretary of State accept that this is an exercise in political opportunism which will lead to confusion and injustice? Does he recall that in August 1983 the Scottish Office produced a White Paper entitled "Valuation and Rating in Scotland: Proposals for Reform"? Will he confirm that a poll tax was canvassed at that time but the result
"was not at all conclusive for radical change"?
Will he confirm that the Government then decided to reform the basically sound rating system, and concluded: "there is little point in replacing rates with an untried and unfamiliar system having little support from the outset"?
Is that not exactly what the right hon. Gentleman now proposes? Is not the scheme which is on the table

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unfamiliar, unjust and lacking in popular support—all that—and socially divisive? Will the right hon. Gentleman think again?
Mr. Rifkind: The hon. Gentleman gave exactly the predictable and depressing response that I and my colleagues confidently expected. I remind him that, earlier this year, during discussions on these matters, he said that there was a case for reform. We have not heard one indication today of the type of reform that the hon. Gentleman would support. The hon. Gentleman and the Labour party are entirely wedded to the existing system of domestic rates, because it suits their political requirements. If the hon. Gentleman had had the courage to admit that fact, I think that we would all have thanked him for it.
I am happy to respond to the hon. Gentleman's questions. He suggested that this was a poll tax. He knows very well that the phrase "poll tax" normally means that one will not have the right to vote unless there is a right to tax.
Mr. Dewar: So much per skull.
Mr. Rifkind: I am delighted that the Opposition now accept that the right to vote will in no way be affected by these proposals. [Interruption.] I wish that they would make up their minds about exactly what their view is.
Mr. Dewar: So much for Scotland.
Mr. Rifkind: The hon. Gentleman did not need to read the Green Paper to know that. The important point I am making—I think it is accepted by the Opposition—is that the various claims in the past about a poll tax being a tax on the right to vote were always absurd, as is now acknowledged.
The hon. Gentleman suggested that working families will be worse off. Let us be quite clear about this. A household which consists either of a single pensioner or of a single-parent family will undoubtedly be better off. A household which consists of two working adults will be better off, or in the same position; or, if it is worse off, the difference will be relatively minimal. Those who will be most significantly damaged—
Mr. Dewar: Not in Scotland.
Mr. Rifkind: Indeed, in Scotland. I should be grateful if the hon. Gentleman would let me answer his questions.
The most significant loss will be experienced by those single working adults who, until now, have paid nothing whatsoever towards the requirements of domestic rates. I do not believe that the hon. Gentleman, who rightly prides himself on being a fair person, would say that a system that allows many hundreds of thousands of people to earn money not to pay a penny towards the cost of domestic rates does not require change.
In Scotland, 2 million adults, including many spouses, are not householders and are not liable to pay one penny in rates. Even if the number of spouses of existing ratepayers were deducted from that number, there are still hundreds of thousands—probably as many as three quarters of a million—single adults who do not make any contribution to the cost of the rating system. Any tax system that rests on such a narrow base is profoundly unfair. As the Green Paper states, for those on the lowest incomes domestic rates are more regressive than the proposed community charge.
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The hon. Gentleman asked me whether households with three or four working adults will be worse off. I accept that the majority of households with three or four working adults would be worse off. The hon. Gentleman may prefer a system in which four working adults in one house pay exactly the same as the single old-age pensioner next door. He may think that that is fair, but I certainly do not and nor do the people of Scotland. It is no use the hon. Gentleman referring to single old-age pensioners who may be on rate rebate or receiving social security benefits, as there are many single old-age pensioners whose income is just above the level required for rate rebate or social security benefits and who pay the same as a household with four adult earners. If that is what the hon. Gentleman believes to be a fair system, he has changed his definition of fairness.
The hon. Gentleman had the sheer nerve to criticise me and the Government for contemplating legislation in this Parliament. Only yesterday, the hon. Member for Copeland (Dr. Cunningham), the shadow Secretary of State for the Environment, criticised my right hon. Friend the Secretary of State for the Environment for not abolishing domestic rates in this Parliament. The Opposition cannot have it both ways. The fact is, as the people of Scotland well know, that the Labour party is so wedded to the system of domestic rates that, whatever alternative the Government came up with, it would have been condemned by the hon. Gentleman.
Sir Hector Monro: I congratulate my right hon. and learned Friend the Secretary of State and my hon. Friend the Member for Edinburgh, South (Mr. Ancram) on bringing forward this progressive measure. Does my right hon. and learned Friend agree that the Opposition's reaction shows that they would do much better to read Green Papers before they criticised them?
Does my right hon. and learned Friend agree that many households comprise only one wage earner or one retired person, who will be manifestly much better off under these proposals? Does he agree that, under the community charge scheme, ratepayers in Dumfries and Galloway who might be on a charge of only £155 would be considerably better off than they are under the existing arrangements?
Mr. Rifkind: My hon. Friend is right. Many people, especially single people, will be considerably better off. When people are evaluating the proposals, they should not look simply at the immediate effect—the community charge that their household would pay as compared with domestic rates. Existing domestic ratepayers should also be aware that any future increases in local authority spending, instead of being paid for by the minority of Scottish people who are ratepayers, will be paid for by all Scottish adults who benefit from local services. That is a much fairer system and one which will bring not only short-term but long-term benefit to ratepayers.
Sir Russell Johnston: Has the right hon. and learned Gentleman's attention been drawn to the far-seeing editorial in the Glasgow Herald—not a trendy Lefty or wishy-washy Liberal paper—which, on 27 November 1985, commenting on the rumours of that time concerning the Government 's proposals, said:
"It will mean the laird in the castle pays the same as the gardener in the cottage."
Is the Secretary of State aware that this sums up perfectly the alliance view about the so-called community charge

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which, as the hon. Member for Glasgow, Garscadden (Mr. Dewar) has said, is a poll tax which does not differentiate between how much someone who is well off and someone who is not well off pays? How can the Secretary of State genuinely justify such a stride back into the middle ages?
Does the right hon. and learned Gentleman agree that if the long campaign to replace the repressive, regressive and unjust rating system is to succeed it is important that the new system is not unfair? Can he promise us that, in inviting comments by 31 July, he will open mindedly and fairly examine them all? From the alliance he will get a cogent case in favour of a local income tax.
Mr. Rifkind: If the local laird moved out of his castle and into a permanent suite at Gleneagles, he would not be liable for one penny of domestic rates, irrespective of his income. I am sure that the hon. Gentleman agrees that domestic rates are not an agreeable option, either, from the point of view of the objective that he seeks.
As for the Liberal attraction to local income tax, if it were introduced, it would result in an increase in the standard rate of income tax of between 2p and a maximum of 11p. Moreover, the least prosperous parts of Scotland would be liable to attract the largest increase. I am sure that the hon. Gentleman agrees that it would be manifestly absurd if, instead of one level of income tax in Scotland, we ended up with 56 different levels, one for each of the local district councils. I am sure that most people would not want that.
Several Hon. Members rose—
Mr. Speaker: Order. I remind the House that we are dealing with a Green Paper which will no doubt occupy much of the House's time this Session.
Mr. Gregor MacKenzie: Is the Secretary of State aware that most of us feel that these ill-considered proposals have much more to do with the peasants' revolt at Perth last year than with the one in medieval times? Is he further aware that his proposals will result in a considerable shift of the burden of local government finance to the poorer section of the community? If he wanted any proof of that, he needed only listen to the cheers that came from his Back Benchers when he made his statement. Is this really a Green Paper? Does the Secretary of State still have a receptive mind? Is he really willing to listen and make changes on the basis of comments from right hon. and hon. Members and others?
Mr. Rifkind: We are anxious to hear any ideas and responses. Is the right hon. Gentleman asking us to say that he is comfortable with the system which requires single pensioners and single-parent families in his constituency to pay the same as households of four adults, all of whom are bringing good money into the home? Does he believe that that is a fair and defensible system? If not, what does he propose as an alternative?
Mrs. Anna McCurley: Does my right hon. and learned Friend agree that one of the most interesting and pleasant by-products of the new system is the possibility of a truce between central and local government?
Mr. Rifkind: It ought to be an added attraction of our proposals that the system of penalties will no longer be
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necessary, primarily because local authorities will be genuinely accountable to the whole of their electorate rather than just theoretically so. As long as we have a system in which only a minority of the electorate has to pay for excessive expenditure, some local authorities will be attracted to exploit such an arrangement. Because that opportunity will not be available to them in future, the system of penalties such as we have had will no longer be necessary.
Mr. Willie W. Hamilton: I ask a very simple question: who will come off best, the rich or the poor?
Mr. Rifkind: I have told the House before, and I shall say it again, that the people who will be least well off as a result of these proposals are single earning adults who until now have paid nothing. Wealthy people will not be alone in benefiting, as is suggested by the Opposition, as the beneficiaries will include large numbers of people on modest incomes living in heavily rated properties, single pensioners and single-parent families—people whom the hon. Gentleman would like to pretend that he champions.
Mr. Alexander Pollock: Does my right hon. and learned Friend agree that one of the advantages of the new system is that business in Scotland will now be able to look forward to a period of stability? It will be able to plan without worrying about rapidly changing levels of spending by local authorities? Does he agree that a uniform national rate confined to Scotland might be good for the business sector in cities but would not be helpful to the hard-pressed business sector in rural areas?
Mr. Rifkind: My hon. Friend is correct. A uniform business rate in Scotland would create major increases in the rates burden for many businesses in rural areas. Those who argue for that proposition would not find favour among small businesses and industries in those areas.
The chambers of commerce and others who have spoken to me have always said that they most need predictability to enable them to plan what the extra burden on their business, shop or industry is likely to be. If any future rate increase is tied to a national index, they will have that predictability. That is why I believe that the business sector will welcome the proposals.
Mr. Roy Jenkins: As the right hon. and learned Gentleman rightly refuses to stick to the present domestic rating system, and wrongly dismisses local income tax, can he tell us in what important respect his mind is open to consultation between now and 31 July?
Mr. Rifkind: We have said that the Green Paper is subject to consultation. We wish to hear proposals from local authorities, ratepayers and all interested parties. As the House would expect, we have shown that we have proposals. This is not a new debate; it has been going on for a long time. We will be happy and willing to consider constructively any reasonable ideas that are put to us.
Mr. Norman Buchan: Surely the Minister will accept that the question posed by my hon. Friend the Member for Fife, Central (Mr. Hamilton) is the heart of the matter. Is it not the case that the rich will benefit and the poor will suffer? Would anything other than a Thatcherite Government have dreamt of replacing a reactionary, repressive, unfair tax like rating with something even worse?
Mr. Rifkind: I understand why the Opposition do not like the proposals. They interfere with the cosy arrangement that has suited them for so many years.
On the basis of the Green Paper, 48 per cent. of Scottish households will benefit. If the hon. Gentleman's definition of the rich extends to 48 per cent., it is a curious definition. As a significant proportion of the remainder are single adults who at present pay nothing, he might like to reflect on the equity of that.
Mr. Barry Henderson: Does my right hon. and learned Friend accept that the proposals for non-domestic ratepayers would be of immense significance and benefit to the business community in Scotland and would be recognised as such if it were not for the even more dramatic proposals for domestic ratepayers? Does he agree that the alliance party's proposals on non-domestic rates could help hypermarkets and city centre department stores but would do nothing for small businesses in rural areas?
Mr. Rifkind: My hon. Friend has put his finger on it. Perhaps the Alliance is more interested in hypermarkets and supermarkets than in small businesses. In Scotland, small businesses want certainty and predictability. For years they have said that, if there is to be an increase in the rating burden, a rate linked to national changes in the cost of living is fairer and more sensible.
Mr. Dick Douglas: Does the Secretary of State accept that his concept of a Green Paper would have more veracity if he stopped behaving as if everything were cut and dried? People consider the burden of taxation as a whole. Does he accept, therefore, that the poll tax increases the regressive nature of taxation as a whole?
The real problem is the imbalance of rating and valuation on both sides of the border. What peculiar alchemy does the right hon. and learned Gentleman and the Secretary of State for the Environment propose to deploy to harmonise the rating system on both sides of the border?
Mr. Rifkind: On the hon. Gentleman's first point, may I say without fear of contradiction, and as the Green Paper demonstrates, that those on the lowest incomes are better off with a community charge than they are under domestic rates. As a significant proportion of the poorest households in Scotland are single pensioners and single-parent families, the community charge should be welcomed by the Opposition if they are genuinely interested in the welfare of those people. Their reluctance casts doubt on whether their position has been considered or whether it is a knee-jerk reaction to the Government's proposals. I ask the hon. Gentleman to study the Green Paper before he comes to any firm conclusions.
A different time scale may be suggested by my colleagues in England and Wales. If the hon. Gentleman reads the Green Paper, he will see that it suggests that there should be a revaluation of non-domestic property throughout the United Kingdom in 1990. Scottish business has always emphasised that that is important and that if there is to be a revaluation it should take place throughout the United Kingdom and not be concentrated in one area.
Mr. Michael Forsyth: Does my right hon. and learned Friend agree that there is outrage on the Opposition Benches because the game is finally up—the
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game in which they bribe the electorate with extravagant proposals in the sure knowledge that only a minority will have to pay? Under the new proposals, everyone who casts a vote in an election will do so in the knowledge that he is electing an administration to carry out programmes to which he will have to contribute. That is surely a great victory for the local democracy for which the Opposition have been crying out.
Mr. Rifkind: Yes, indeed. The Opposition know well that if all the people of Scotland had to pay for the consequences of excessive expenditure, its attraction as supported by the Labour party, might seem much less attractive that it has seemed in some areas. Remarks about a charge to vote are absurd. Foreigners, for example, will be liable to the community charge, although they have no right to vote. Students in halls of residence will not be liable to register, although they have a right to vote. The link being drawn between the two is manifestly absurd.
Mr. Gordon Wilson: Does the Secretary of State realise that, despite all his verbal facility and bluster this afternoon, he cannot disguise the fact that the new scheme is not related to an ability to pay, and that it will be expensive to implement and difficult to enforce? In the consultations, will he say whether he will make adjustments to the scheme so that it is related to an ability to pay? Will he say that in no circumstances will he use the scheme as a smokescreen under which the central Government contribution to local government funding will be allowed to decrease?
Mr. Rifkind: I remind the hon. Gentleman that 60 per cent. of all that local authorities spend is provided under the rate support grant paid for by the taxpayer. The bulk of local authority expenditure is provided on a progressive basis. We are dealing with the 13 per cent. provided currently under domestic rates, not the other 87 per cent. The question is not whether a community charge is a progressive system but whether it is less or more regressive than domestic rates and whether it is fairer than domestic rates. I have not the slightest doubt that it is fairer than domestic rates.
Mr. Martin J. O'Neill: Does the Secretary of State remember that when this proposal was last discussed he was the Minister for the Environment for Scotland and was opposed to a poll tax? In his new-found enthusiasm for revaluation, will he remember that he delayed a revaluation in Scotland and precipitated the crisis and chaos which resulted in a revolt in Perth a year after the revaluation?
Mr. Rifkind: I thank the hon. Gentleman for his rather selective reminiscences which I am delighted to hear. The statutory requirements for a revaluation were, as he will recall, introduced by a Labour Government.
Mr. Michael Hirst: Is my right hon. and learned Friend aware that the proposals will be widely welcomed by my constituents who have the invidious distinction of being the highest average rated constituents in the land? Does he agree that the test of the acceptability of the proposals is not the number of gainers or losers but whether the proposals are intrinsically fair? Does he find it deplorable that the Opposition cling to a terribly unfair system which favours their supporters when

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the major part of the funding of local government expenditure comes from taxation, which is paid according to an ability to pay?
Mr. Rifkind: My hon. Friend is correct. The Labour party's desperate desire to defend the present system has been most noticeable today. It has not provided one proposal as to how single parents, pensioners and others who are unfairly treated under the domestic rating system would benefit from any Labour party proposals. It is wedded to a corrupt and out-of-date system. [Interruption.] It is wedded to a corrupt and out-of-date system. Any system of finance that requires a minority to fund services that will be provided for the whole community and produces a system where many will not pay one penny towards the services that they receive is worthy of that description.
Mr. Tom Clarke: Does the Secretary of State accept that the proposals are taking him perilously near the Irish experience that turned out to be disastrous? Does he accept that working people, especially working families, will be paying much more under the proposals, and that that fact cannot be disguised? Does he agree that no new rating system that is deliberately devised to reduce the Exchequer contribution to local services can ultimately succeed?
Mr. Rifkind: As I understand the Irish system, the rates were abolished and replaced by 100 per cent. central Government funding. I do not think that that is what the hon. Gentleman wants or what the Government propose. I do not see that that point is terribly relevant.
Our proposals will increase local accountability because they will create a more meaningful connection between a local authority and the electorate it is meant to represent. I believe that that is a system which stems from the old principle of no taxation without representation. The reverse should also apply. If someone is to benefit from local services, it is not unreasonable for him to make a contribution to them.
I emphasise the fact that the Government intend to provide income support comparable to the present rate rebate system for all those on low incomes. That is another factor which Opposition Members have chosen to ignore.
Mr. Bill Walker: Does my right hon. and learned Friend agree that one of the reasons why the Opposition are so upset is that they have been rumbled and the people of Scotland will begin to see that they have been rumbled? Does he also agree that when one considers a local income tax there is not just the fact that there would be 56 different varieties of tax; there is the problem that the people of Scotland would not take kindly to having those employed by local authorities knowing what their income was.
Mr. Rifkind: Yes, my hon. Friend is correct. Confidentiality is important. I do not believe that many people in Scotland would welcome the Liberal party proposal that a local authority should have access to details of their income.
Several Hon. Members rose—
Mr. Speaker: Order. I repeat that this matter is likely to be the subject of debate for a considerable time. I shall endeavour to call those hon. Members who have been rising provided that we can get through by 4.15 pm.
Mr. George Foulkes: Will the Secretary of State confirm that it is almost impossible to evade rates but that this tax will be relatively easy to evade? What method does he propose to use to deal with evasion?
Mr. Rifkind: No tax system is 100 per cent. effective or this country and many others would not have a black economy.
Mr. Foulkes: Answer the question.
Mr. Rifkind: That is exactly what I am doing. I believe that the system proposed by the Government will be effective and that the vast majority of those liable to register will be registered. Details have been given in the Green Paper. I shall be happy to write to the hon. Gentleman to explain in greater length than I can today the various proposals that will produce that effect.
Mr. Ron Brown: Is the Secretary of State aware that the people of Scotland pay into two kitties—one for the rate support grant and the other for rates? Someone who does not pay rates certainly pays into the overall contribution. Does he accept that the crisis in rating was deliberately and cynically caused by the Government who clawed back over £1·5 billion from the Scottish people? Is that not the answer—the rating system is not so bad; it has simply been made to look bad?
Mr. Rifkind: It has not been made to look bad. I suggest that the hon. Gentleman has a few more discussions with pensioners and single parents in his constituency. He will find that they will give a warm welcome to the Government's proposals and will not like what he has to offer.
Mr. David Lambie: If the new proposals are so good for Scotland and the Scottish people, why is the Secretary of State for the Environment not immediately introducing the same proposals for the English and England? Is this not another case of Scotland being used as a guinea pig and of the ratepayers being discriminated against?
Mr. Rifkind: The hon. Gentleman is one of those people who cannot be satisfied in any circumstances. He knows well that if I were saying that we cannot achieve anything in Scotland until the same happens in England and Wales he would be accusing me of all sorts of terrible tendencies and saying that it shows that I do not have the slightest ability to meet Scottish requirements when they are different from those of England and Wales. Under this Government, if Scotland has requirements that justify quicker implementation of policies, the Government recognise that fact, even if the hon. Gentleman does not.
Mr. John Home Robertson: At one time the Secretary of State would have said that these matters should be dealt with in an elected Scottish Assembly. He would not have got away with this sort of rubbish there. How on earth did he manage to come up with a poll tax, a system of local revenue raising which is even more unfair and, to use his terminology, corrupt than the present rating system?
Mr. Rifkind: If the hon. Gentleman believes that the present domestic rating system is unfair and corrupt—
Mr. Home Robertson: The Secretary of State's words.
Mr. Rifkind: The hon. Gentleman described the rating system as "even more corrupt". If he believes that, I look forward to hearing what he would replace it with.
Mr. Jim Craigen: The Secretary of State expressed concern for shopkeepers and business men. Will he confirm that assessors in Scotland will carry out the 1990 revaluation but that the Inland Revenue will carry out the revaluation in England and Wales? Will he consider the fact that Scottish ratepayers will be paying for their revaluation? Will he confirm today that the allocation of the rating burden between non-domestic and domestic ratepayers will be the same north and south of the border after the revaluation?
Mr. Rifkind: Under the proposals the ratio between non-domestic and domestic ratepayers will not change for Scotland. The hon. Gentleman is correct in saying that under existing rules assessors carry out revaluation in Scotland, while the Inland Revenue does so in England. We shall have to consider that for the future.
Mr. David Marshall: If the proposals are so good, will the Secretary of State tell the 2 million victims by how much they can expect prices to fall as a result of them? Why is it necessary to have a 10-year transitional phasing-in period for England but no such period for Scotland?
Mr. Rifkind: The hon. Gentleman will have worked out for himself that Scotland is a slightly smaller country than England. The range of rates bills at present is far wider in England than in Scotland, and it is too wide in Scotland. If it is practical to implement proposals in three rather than 10 years, it is surely in everyone's interest. I noted that the Confederation of British Industry in Scotland seemed to be under the impression that a 10-year transitional period was required in Scotland, and that it wanted quicker implementation. I am sure that it will be delighted.
Mr. James Wallace: While I share the views of my hon. Friend the Member for Inverness, Nairn and Lochaber (Sir R. Johnston) on the community charge, I am grateful to the Secretary of State for acknowledging the special position of Orkney and Shetland as a result of oil developments. Will he be more specific about what is meant by "special consideration", which the Government will give to the islands councils? During the consultation period will the councils, if they so wish, have direct access to the Secretary of State or his junior Ministers to discuss these matters, rather than through the usual channels of COSLA?
Mr. Rifkind: It is not for me to intervene on the delicate question whether COSLA or individual local authorities should approach us. We shall consider with interest any proposals from the convention and individual
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local authorities. I thank the hon. Gentleman for acknowledging that the Government accept that special requirements will be necessary for Orkney and Shetland. I assure him that during the consultations we shall seek to achieve a system which is fair, and recognises the special position of the northern islands.
Mr. John Maxton: Will the Secretary of State explain to the House how four adults in a household make four times the use of local government services as a single person? That is what he implied. Does he recognise the following quote about rates:
"They are highly perceptible to ratepayers and they promote accountability. They are well understood, cheap to collect and very difficult to evade … The Government have concluded… that rates should remain for the foreseeable future the main source of local revenue for local government."
That comes from the Government's White Paper of August 1983. What has changed since then is Government support in Scotland, which has slumped to an all-time low.
Mr. Rifkind: If the hon. Gentleman believes that four adults who are all earning should pay the same contribution towards local rates as a single person—
Mr. Foulkes: That is not the question.
Mr. Rifkind: The question is not whether they use four times as much. They will certainly use local services much more than one person. They will use public transport, water services, refuse disposal, and perhaps education services. To suggest that a single pensioner makes greater use of local services than four adults is absurd.
The hon. Gentleman appreciates that within his constituency and elsewhere in Scotland there is a deep belief that the domestic rating system is grossly unfair. Our proposals will abolish and replace it. I still wait to hear what Opposition Members will do to meet the deep sense of grievance at the existing rating system. Until they produce some alternative, their criticisms will be seen to be bogus, and more concerned with their political objectives than with serving the needs of the Scottish people.
Mr. Harry Ewing: On a point of order, Mr. Speaker. My father served for 40 years in Scottish local government, and many of my hon. Friends and, indeed, the Secretary of State for Scotland have served in it. While the Secretary of State is entitled to describe a system as grossly unfair, he is not entitled to impugn the character of people who have served on Scottish local authorities by describing the system as corrupt. Knowing the Secretary of State as I do, I am sure that he said that in the heat of the moment, and that he will wish to withdraw the word "corrupt" because it impugns the memory and character of all who have served in Scottish local government at any time during the existence of the rating system.
Mr. Rifkind: Further to that point of order, Mr. Speaker. Anyone who was listening to what I said will be in no doubt that I was referring to the rating system, not to either local authorities or individual members of local authorities.

Hon. Member for Cynon Valley
4.18 pm
Mrs. Ann Clwyd: On a point of order, Mr. Speaker. As you know, the House appointed me to serve in Committee on the Felixstowe Dock and Railway Bill—an opposed private Bill. This morning I informed Mr. Deputy Speaker that I had left the Committee permanently. I wish to seek your guidance for the future so that all hon. Members can benefit from your wisdom on this point. I left because of a smear campaign against me by the Conservative party, including a Minister, and suggestions that I received money from the Transport and General Workers Union, which opposes the Bill.
I wish to place it on record that I have never received any financial inducements, or inducements of any kind, from the TGWU. I deeply resent any such suggestion. The managing director of the company, Mr. Parker, last week impugned my integrity at a Committee hearing when he was being questioned about massive donations by the company to the Conservative party. Will you give guidance on the question of private companies appearing to offer inducements to hon. Members through political donations prior to a private Bill coming to the House, and apparently buying a slot in parliamentary proceedings? Will you also advise the House how hon. Members can be protected from scandalous attacks from a company and other hon. Members? The issues are so serious that it is doubtful whether any Labour Members can or will be able to sit on this Committee in my place. I appeal to my hon. Friends not to undermine my position, which I believe is important to the integrity of Parliament.
Mr. Brian Sedgemore: Further to that point of order, Mr. Speaker, a serious point is at issue here. It is slightly tangential but bears on the point made by my hon. Friend. We are in danger of seeing the start of a new venal practice which can only damage our parliamentary democracy. As you know, Mr. Speaker, "Erskine May" makes it clear that neither individuals nor private companies should offer inducements to hon. Members either directly or indirectly, which might affect the way they speak or the way they vote. It doubly sets that standard in the case of attempted bribery.
The Felixstowe Dock and Railway Company is wholly owned by European Ferries. It was preparing the relevant Bill for some years and was pouring money into the Conservative party over those years. The company has provided a handwritten document giving details of its donations to the Conservative party. The document is dated 23 January 1986. In the years 1980 and 1981—
Mr. Speaker: Order. I must stop the hon. Gentleman. If he is alleging contempt, he must write to me in the proper way and I will look at the matter to see whether it is a matter of privilege. We cannot have a debate on what is happening in a private Bill Committee. That is not a matter for the Floor of the House. If some irregularity is alleged, the proper course is for the Committee to make a report to the House so that the House can deal with it.
Mr. Sedgemore: I am not sure whether I am alleging contempt or a breach of privilege. I am not attempting directly to do those things. My point is that in the run-up to the placing of this Bill before the House last year, large
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donations were made by a company to a political party. This year a clear statement has been made that the directors of that company will not advise shareholders to make a donation. What kind of people do they think we are? Do they think we do not know the purport of that statement? You, Mr. Speaker, ought to help to protect us in this matter.
Mr. Jonathan Sayeed: On a point of order, Mr. Speaker.
Mr. Speaker: I will take it, but it is wasting a bit of time.
Mr. Sayeed: Unlike the hon. Member for Cynon Valley (Mrs. Clwyd), I have attended every meeting of the Committee. I was at the meeting the hon. Lady has mentioned. I can assure the House, and any sensible person who has read the transcript will accept, that Mr. Parker, the managing director of the Felixstowe Dock and Railway Company, did not impugn the integrity of the hon. Lady. The hon. Lady brought up the question of political donations and started a line of questioning which was not germane to the Committee's proceedings. I can assure the House that no approaches were made to me or to my hon. Friend the Chairman of the Select Committee about the political donations made by European Ferries to the Conservative Party.
Mr. D. N. Campbell-Savours rose—
Mr. Speaker: Order. I do not want any more help. We have a private Bill procedure and this is a matter for the Committee dealing with that Bill. If the Committee wishes to make a report to the House on this matter, that is the correct course.
Mr. Campbell-Savours: I do not want to refer specifically to any allegations that I have made, Mr. Speaker, but over the past few weeks you have received a number of allegations about contempt and privilege. In the replies that you sent to Members, you expressed the strongly held view that matters of contempt and privilege should not be raised on the Floor of the House but should be dealt with by correspondence. My hon. Friend the Member for Cynon Valley (Mrs. Clwyd) has written to you about the matter under discussion today. If she has written to you—
Mr. Speaker: Order. That is just the point. The hon. Lady wrote to me about a matter of privilege. I have dealt with it and followed the recommendations of the Select Committee, which recommended that in future matters of privilege should be dealt with in that way.
Mr. Campbell-Savours: If, as per the judgment you gave, Mr. Speaker, the matter is not one of contempt or privilege, how can we possibly raise the matter of a statement that was made during the course of the proceedings? The representative of the company said:
"I suspect the reverse is true of people who contribute to your party like the Transport and General Workers might also expect you to take—"
Mr. Speaker: Order. The hon. Gentleman raises a point of order every day and does not listen to what I say in reply to previous questions. I have already said that this is a matter for the Committee. If the Committee wishes to make a report to the House, it has that power and it should do so. I cannot deal with the matter now.
Mr. Campbell-Savours rose—
Mrs. Clwyd rose—
Mr. Speaker: This is getting to be a bore.
Mrs. Clwyd: Further to the point of order, Mr. Speaker. May I ask for your guidance? I have posed some questions to you that are in addition to the questions I raised in my letter which you kindly answered. I am not seeking to raise those matters now, but I am asking some additional questions and would be grateful for your guidance about what we should do about these matters in future.
Mr. Speaker: I thank the hon. Lady. I fully appreciate and understand that the private Bill procedure puts a considerable strain on Members who have Select Committee and Standing Committee work. I have discussed the matter with the Chairman of Ways and Means and I am trying to see in what way it may be possible to resolve these difficult matters.
Mrs. Clwyd: With respect, Mr. Speaker, that does not cover the point I raised in my original request to you. I raised some points of principle which have nothing to do with the difficulties of serving on two or three Committees at the same time. They relate to the integrity of Members of this House and I am asking how we can protect ourselves.
Mr. Speaker: The hon. Lady raised that very point in her letter and I answered it in the letter that I sent to her. We had better leave the matter there, because the proper procedure has been followed. If the hon. Lady is dissatisfied with my ruling, she should take the matter to the Committee and the Committee will report to the House.
Mr. Ron Davies: I ask you, Mr. Speaker, to reconsider the advice you have just given to my hon. Friend the Member for Cynon Valley (Mrs. Clwyd), because the issues she has drawn to your attention have developed during the course of the day. The comments made to my hon. Friend, which she obviously considers have offended her dignity and honour as a Member of this House, have caused her to relinquish her membership of a Committee dealing with private business. Obviously, sanctions can be applied against my hon. Friend and surely there is a responsibility on you, Mr. Speaker, to give further advice to my hon. Friend about whether she is now breaching a principle.
Mr. Speaker: I have already given the hon. Lady my advice. She raised the point as a matter of privileges and I have dealt with it as a matter of privilege. She and no doubt the hon. Gentleman know what my answer is on that matter. I cannot say any more. I have given my ruling.

Local Government Finance (Wales)
4.30 pm
The Secretary of State for Wales (Mr. Nicholas Edwards): With permission, Mr. Speaker, I wish to make a statement.
The Government's proposals for a fundamental reform of the way in which we pay for local government were presented to Parliament yesterday by my right hon. Friend the Secretary of State for the Environment. While the Government's objectives and the principles underlying the proposals for reform apply to the whole of Great Britain, the structure of the reforms has been tailored to the particular circumstances of each country. The major differences between the proposed package of reforms for Wales and those for England are as follows.
The relatively low level of domestic rates in Wales, and the fairly small variation between authorities, will allow rates to be eliminated earlier in Wales than in England. It should take only six years; and in half of Wales they are likely to be phased out within three years.
The smaller range of domestic rates in Wales also allows us to consider two options for the transition to the community charge. The first—a common percentage reduction in rates — is the same as in England. The second involves using the community charge to cut rates by a standard cash sum within each district area. We are seeking views on these two options. The relatively compact range of non-domestic rate poundages might make it possible to move to a uniform non-domestic rate in Wales in only three years.
The smaller variation in average non-domestic rateable values in Wales also offers the prospect of allowing Welsh local authorities the freedom to "top up" the yield of the uniform business rate by—at some stage—10 per cent. in Wales, rather than the 5 per cent. flexibility proposed for England.
On the capital expenditure front, the Green Paper suggests that the control regime need not be exactly the same as that in England. My preference—at present—is for authorities to continue to have direct access to their capital receipts, within a thoroughly overhauled control system.
Chapter 9 of the Green Paper sets out these proposals in more detail. A Welsh language version of the chapter is available from my Department on request.
The need for councils to be made fully accountable for their decisions has been dramatically highlighted by the succession of reckless rate increases proposed by county councils in the last week or so. The Government's proposals would significantly reduce the risk of such irresponsible action. They would ensure that authorities would need to go to their entire electorates to find the extra cash, not just to the minority who now pay domestic rates. Furthermore, industry and commerce would be secure in the knowledge that they could not be used as a milch cow for excessive spending.
The Government hope that the Green Paper will be carefully considered and commented on not only by the major interests and representative bodies in Wales but also by individual taxpayers and ratepayers—those whose contributions actually pay for local services.

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The consultation process provides a unique opportunity for all those who feel aggrieved at the present unacceptable situation to make their views known in writing to my Department. I urge them to do so.
Mr. Barry Jones: Is it not spiteful of the right hon. Gentleman to denigrate the Welsh county councils? They are under-funded and they must tackle the serious consequences of the Government's economic policies. Has he forgotten that, for example, Clwyd county authority is £1·8 million short, largely because of his actions?
I thank the right hon. Gentleman for the Green Paper summary and for the Welsh language version. I agree with his decision to make a statement to the House. It was inappropriate for him to be mute yesterday on the coat tails of the Secretary of State for the Environment, particularly since the proposed scheme is his brainchild.
The right hon. Gentleman has boasted that local authorities in Wales are in real terms operating financially at 1979 levels. Why then does he propose this bureaucratic scheme? Is he aware that, if the scheme is introduced in Wales, domestic tax bills will more than double in the Rhondda while there will be a 40 per cent. reduction in Cardiff? Does he realise that that is precisely what the Government wished to guard against in the Green Paper? The valley communities of Mid Glamorgan, Gwent and West Glamorgan will be most seriously affected. Do they not face large reductions in the business rate and large rises in the domestic rate? Will we not have the anomaly of people in the Rhondda paying a higher domestic tax bill than people in Cardiff?
Do not the proposals mean that an additional 1·4 million Welsh people will pay for council services, that homes with three or more people will have to pay more and that every adult will be eligible to pay the poll tax? Will not a new class of local taxpayer emerge—those aged 18 to 24? is it not the case that households with young adults living at home will be targeted for what is in effect a poll tax? I remind the right hon. Gentleman that Wales is a land of university colleges and higher education establishments. Can he tell us of any plans to make students liable to a poll tax? If students are exempt, what will he say to the young adult unemployed who must pay?
Does not the right hon. Gentleman see the need to come clean about the difficulties of collecting what he calls the community charge? Has he overlooked the massive practical problems? Is he not proposing a new criminal offence for the Welsh—the refusal or neglect of the head of a household to register his unemployed teenage sons or daughters? There is a hint of Big Brother in the proposals. The right hon. Gentleman should tell us how the register will be monitored. Will it not invite evasion?
On commercial rates, I am concerned that Wales, with a massive unemployment total, may be adversely affected by the proposals. What guarantees can the right hon. Gentleman give that changes in commercial rating will not increase unemployment? I fear in time the large-scale loss of jobs at several levels within the local government sector in Wales if the scheme goes ahead. Can the right hon. Gentleman give a guarantee that Wales will not be used as a test bed for the scheme ahead of its introduction elsewhere?
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With regard to his own role, the right hon. Gentleman must be ashamed of himself because he is proposing a face saver for his Prime Minister and injustice for the people of Wales. The proposal is unacceptable and I do not think it will work. The economy is now too fragile to bear the strain he will put on it.
Mr. Edwards: The hon. Gentleman started by suggesting that local government is under-funded. In Wales, central Government grants provide for 67 per cent. of the cost of local government and commercial ratepayers contribute 56 per cent. of the rate burden. Indeed, in 1986–87, central Government will provide the equivalent of about £500 per adult in Wales.
The hon. Gentleman said that it was inappropriate for me not to make a statement yesterday. I have doubts about the value of three statements being made on a Green Paper that covers the whole of the United Kingdom when, as you observed earlier, Mr. Speaker, we will have extensive opportunities for debate and when only seven, I think, Back Benchers have turned out to press questions—
Mr. Ron Davies: On a point of order, Mr. Speaker. Is it in order for the Secretary of State to make such a comment about hon. Members when Back Benchers are at this moment serving on committees and on delegations of crucial importance to Wales, doing a job on behalf of Wales—
Mr. Speaker: Order. What is said from the Front Benches or from the Back Benches, provided it is in order, is not one of my many responsibilities.
Mr. Edwards: What I said was simply a statement of fact. I think there are more Conservative Members than Labour Members present.
The need for reform is the same in Wales as in England. The evils and shortcomings of the present system are as prevalent in Wales as in England. As I pointed out, the recent actions of county councils have confirmed the need for further action.
The hon. Member for Alyn and Deeside (Mr. Jones) referred to the difference in the rates bills in the Rhondda and in Cardiff. He will have to explain to the House why he thinks it just that a ratepayer living in, shall we say, a three-bedroomed terraced house in his constituency or in Cardiff, with an identical income, perhaps doing an identical job and having an identical social background, should at present pay almost exactly double the rate bill of a similar person living in the Rhondda. That is not a system which is based self-evidently on equity.
The hon. Gentleman referred to West Glamorgan, Mid Glamorgan and Clwyd, and the particular consequences for them. The rating revaluation, in particular, will help the industrial premises in those areas. They are likely to benefit in relative terms from the reduction in rates. That could surely help to reduce unemployment and reinforce regional policy.
The hon. Gentleman also referred to the effect on individual local authorities. We have set out a series of safety nets so that the income of the local authorities is protected. He has pointed out that more people will pay. That is the object of the proposals, that we should not have such a very narrow band of people who bear the financial burden. In Wales about 2·1 million people are eligible to vote, about 1·1 million are eligible to pay rates and about 700,000 actually pay rates in full. It is our intention to try to extend the number of people who pay for local services.

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The hon. Gentleman identified the young adults—between 18 and 24—living with their families as those who would pay in the future while not paying at present. Perhaps he should have pointed out that those who will gain significantly are single pensioners—some 69 per cent. of single pensioners will benefit, as will 83 per cent. of one-parent families. Surely these are the people who need help, the people on low incomes. If the hon. Gentleman looks at annex F of the Green Paper, he will see that the effects of the community charge on low-income households is that they will pay less than they do under the present rating system.
The hon. Gentleman asked about students. My right hon. Friend the Secretary of State for the Environment explained yesterday the complexities of the present arrangements. I will not repeat them, but I confirm that we will be exploring the best way to deal with that matter.
The hon. Gentleman asked about collection and how it was to be enforced. A number of proposals have been set out in some detail in the Green Paper. Local authorities have a wide knowledge of what goes on in their areas. Penalties are to be introduced for non-registration. It is suggested that it might be possible, for example, for local authorities, in providing certain services in their areas, to seek to ensure that people are actually on the register before the services are provided. That is one of the options being considered.
As to the effect on industry, I believe that industry will welcome the fact that two companies doing the same business in different parts of Wales will not now face widely different rate bills or the possibility of very' substantial rate increases which they are unable to influence. I have had representations in the past week or two from a number of companies who will be paying, under proposals put to them by county councils at present, up to £250,000 extra in rates and who will either have to accept the addition to their costs or have to reduce their labour force by about 25 in each case. So there is a direct effect on jobs.
The hon. Gentleman asked whether Wales was a test bed. It is not. The proposal is to introduce the legislation in Wales at exactly the same time as in England. The only difference is that, because the gap between different local authority rate poundages and different rate levels is so much less in Wales than in England, we expect to get rid of the rates in about three years' time for half the ratepayers in Wales and totally within six years. It will take probably ten years to achieve the same thing in England.
Several Hon. Members rose—
Mr. Speaker: Order. As the Secretary of State has said, this is a Green Paper. It will no doubt be the subject of debate for many weeks. I ask hon. Members to make their questions brief.
Sir Anthony Meyer: Is it not a fact that any change will be an improvement on the present system, which incites irresponsibility, invites political corruption and defies comprehension? Is there not a danger, however, that the community charge, in itself commendable as a means of restoring the content of responsibility, will, like rates, become unacceptable if the level becomes unpleasantly high? That being so, there will be many who will regret that the Government have not taken the more
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radical course of transferring great blocks of expenditure., such as that on education and the police, to the general tax system.
Mr. Edwards: My right hon. Friend the Secretary of State for the Environment spelt it out very well yesterday. If we were to take over the responsibility for financing education in the way suggested by my hon. Friend, it would mean switching to central control of the education system. There may be some arguments for that, although it would mean either setting up something on the lines of the National Health Service or taking it into Government Departments; it would mean knowledge of what was going on in local schools, the number of teachers required in such schools and details of local situations. The degree of centralisation represented by such a step would be an enormous price to pay for a more sensible system of local government finance. I ask my hon. Friend to consider those drawbacks.
Mr. Dafydd Wigley: Is the Secretary of State aware that there are misgivings in many parts of Wales that, despite the need to change the present rating system, any change should certainly encompass a change in the present water rating system as well? Is he aware that there are misgivings about the regressive nature of these changes and their practicality, where people register in one area and shortly afterwards move to live in another, giving rise to enormous bureaucratic problems?
Will second home owners need to pay this tax in the area of the second home? Will the Secretary of State guarantee that the proportion of Welsh local authority expenditure met by central block grants will not diminish at all in this change?
Mr. Edwards: May I say how glad I am to see the hon. Gentleman back in his place in the House?
On the "regressive" nature of the proposals, as the Green Paper makes clear, lower-income households will benefit. I have already given the proportions of single pensioners and one-parent families who will benefit. These are some of the poorest in our community.
Under the new system, second home owners will pay. The Green Paper suggests that the assumption should be madethis is the average position, we think—that each second home contains two adults, and there should be an automatic charge based on that assumption. That is what we propose.
As regards the reduction of the proportion of local authority expenditure met by central block grants, we start the whole division from where we are, from the present 67 per cent. grant in Wales compared with 47 per cent. in England and Wales. We start by ring-fencing the non-domestic rating in Wales and redistributing within Wales. Of course, future Governments will have to make yearly decisions as to the total contribution of central Government to the bill, but we start from the present system and there is nothing in these proposals that represents a change of the allocation between England and Wales.
Mr. Ian Grist: Does my right hon. Friend accept that, while the present system may be seen as unfair, it represents a form of crude wealth tax, whereas a poll tax is regressive by its nature? Does he also agree that the proposed register is a legal nightmare? Would he

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like to say how anyone will draw up a register which will be more accurate than the electoral register which, as we all know, is riddled with mistakes?
Mr. Edwards: Every system that we have considered has its drawbacks. Successive inquiries have shown that. My hon. Friend is aware that over the years I have expressed doubts about our ability to find a workable system which does not have serious shortcomings. But having had my present responsibilities for nearly seven years—
Mr. Ron Davies: Too long.
Mr. Edwards: I might almost agree with the hon. Gentleman on that, for personal reasons.
Having sat through almost every discussion, not only on the Welsh rate support grant system but on the English rate support grant system over that period, I believe that the present rate support grant system is so unsatisfactory and has become so difficult that the drawbacks are unacceptable. Therefore, we must look at the alternatives. We have looked at them in great detail and we believe that, although there are shortcomings in any alternative system, they are far fewer than we would have under the present system if we were to continue it.
Mr. Michael Foot: The right hon. Gentleman talks of a Green Paper. He does not seem to be clear about that. Is he not saying that the highly regressive poll tax, described by the hon. Member for Cardiff, Central (Mr. Grist), is a proposal which will not be altered? Is it not particularly offensive that, after the Government have created more unemployed people than ever before in Wales and among them more young people, a poll tax is to be imposed on them? However the Government may try to vary that by some kind of rebate, is not that a monstrous system for a Government to introduce when they have created so much unemployment?
Mr. Edwards: The situation that I described previously, where perhaps a poor family in one area has to pay twice the rates of a family in identical circumstances in a different district, is not a basis for justice. I pointed out that the community charge provides a benefit for some of the poorest in our communities. We made it perfectly clear that there will be social provision for those on low incomes. The right hon. Gentleman referred to that obliquely. Those who do not have the means at the lowest level will continue to receive help as they do at present and the right hon. Gentleman should not try to create the impression that they will not.
Mr. Keith Best: Is it not strange that the Opposition are opposed to a scheme which would attract industry into high-spending Labour areas because it would make it so much fairer for industry, irrespective of where it set up? Is it not doubly strange that the Labour Party should be opposed to a system which will discriminate fairly in favour of the single pensioner? Not one voice has been raised on the Opposition Benches in favour of those who are suffering under the present system. When it is proposed that an alternative should be a local income tax system, is that not nonsense, bearing in mind that, whereas
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only half the electorate in Wales are liable to pay rates, even fewer than that number are people who pay income tax?
Mr. Edwards: If we are to have a system based on local accountability, a local income tax has severe drawbacks, because probably 30 per cent. of households would pay no local tax at all and it would be just as complicated a system. It would mean an increase in income tax generally. After the Opposition's defence of a faultless rating system, we shall be interested to hear whether they want to defend and continue the present system, and, if not, what alternative they would put forward.
Mr. Ron Davies: If the Secretary of State were really concerned about the poverty which resulted from the payment of rates, he could resolve that problem by changing the rebate system. His comments today about reckless increases do not sit well with the statement that he made from the Dispatch Box not 10 days ago, when he applauded the efforts of Welsh local authorities in maintaining low rates and said that he was happy because they had met Government targets. Is it not the case that those who suffer will be old people living with and dependent on their families, young people between the ages of 18 and 25 who are living at home and, in particular, those who are unemployed? There is no justification at all for the changes that the Secretary of State is proposing. As he is in a rather more relaxed mood than when he usually comes to the Dispatch Box, will he tell us whether there is any justification for those changes, other than his desire to increase his standing with the Prime Minister?
Mr. Edwards: Since my saying what I hoped would happen, based on my experience of the past, a number of county councils have been offered substantial increases in grant by the Government. I made the forecast in the expectation that they could maintain spending broadly in line with increases in costs. They have put forward proposals which are indefensible and which will have severe consequences for employment in the areas concerned. Dyfed is one example and South Glamorgan is another. It is extraordinary that the hon. Gentleman should get to his feet to say that it is right that a family of four or five should pay no more than an old person living on her own in her house and that he should apparently advocate that system as being socially just and defensible.
Mr. Stefan Terlezki: I am sure that my right hon. Friend will agree that there is never a right time to reform local government—
Mr. Gareth Wardell: That is right.
Mr. Terlezki: The hon. Gentleman says that that is right because most of the Labour-controlled local authorities do not want to be reformed. They are rotten to the core, from within the core, and they simply do not want to see any reforms. Having said that, how will young people be affected? Several hon. Members have mentioned the 18 to 25-year-olds who are unemployed. How will they be affected? Furthermore, how will small businesses be affected? I am speaking in particular of the small shopkeepers in my constituency.
Mr. Edwards: Certainly the proposal is that young adults should make a contribution to the services provided locally, but the provision of social security is for separate

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legislation. We have made it clear that there will be income support in future as there has been in the past. As my hon. Friend knows, it is the intention under the Social Security Bill presently before the House that everyone should contribute 20 per cent. to the cost of local services; that would be so under the community charge as under the existing rate system. Income support for people on low incomes under the social security system will remain and will be introduced in an appropriate way for the new system.
What small businesses find intolerable is that local authorities put up rates in the knowledge that small businesses contribute the greater part of the rates bill but have no say in the decision, and 56 per cent. of the rate contribution in Wales comes from businesses and industry. If local authorities such as South Glamorgan suddenly impose swingeing increases that is gravely damaging for small businesses and this measure will provide a great deal of protection for them.
Dr. Roger Thomas: Why will the proposals that the right hon. Gentleman has described today be more workable, more equitable and less unfair than those in the Government's White Paper in the autumn of 1983, which they rejected? Why will the community charge which he proposes today eventually translate itself into better community care?
Mr. Edwards: The whole point about the introduction of the community charge is that there should be a connection between those who vote, those who receive services and those who pay. There is no such connection at the moment, so there is an enormous encouragement for those who use the services to demand more and more services with complete disregard to the additional burdens that that places on the small minority who pay. We believe that it is right that there should be a relationship between the two.
The hon. Member for Carmarthen (Dr. Thomas) asked what changes we had introduced and why changes were needed since the Government's White Paper on rates reform in 1983. In that White Paper we said that the flat rate charge could be seen as a tax on the right to vote if the electoral register was used. We decided not to use the electoral register. We said that the flat rate charge would bear harshly on people with low incomes unless there was a rebate scheme. We are proposing that there should be assistance for those on the low incomes.
We have overcome, by examination, many of the administrative shortcomings. As my right hon. Friend the Secretary of State for the Environment said yesterday, the costs involved in the proposals compare favourably to the costs of running the valuation on which the domestic rating system is based at present.
Mr. Keith Raffan: Does my right hon. Friend agree that, by creating a closer relationship between those who vote and those who pay, local authorities such as Clwyd will be encouraged to get their spending under control and so stop the destruction of desperately needed jobs? My right hon. Friend must find it incredible that the Opposition, who make so much of care and compassion, should be standing by a system which they conceded is totally unfair and which hits at so many of those in greatest need.
Mr. Edwards: I agree with my hon. Friend; as I told the hon. Member for Alyn and Deeside (Mr. Jones)
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earlier, it is extraordinary that the Opposition should defend a system under which, for example the inhabitant of a terraced house in Clwyd, earning the same as a person in an identical property in the Rhondda, should pay double what is paid by the person in the Rhondda. That is what happens under the present system. I do not think that that is defensible and I look forward to hearing how the hon. Member for Alyn and Deeside explains to his constituents that he wants that system to continue.
Mrs. Ann Clwyd: For the record, the Secretary of State for Wales made a despicable attack on some of my hon. Friends who are not present this afternoon. Perhaps the Secretary of State would like to know why the hon. Members for Mid Glamorgan are not present.
Mr. Speaker: Order. The hon. Lady should confine herself to the statement.
Mrs. Clwyd: My remarks are relevant to the statement, Mr. Speaker. My hon. Friends are not present because they are meeting the chairman of the Mid Glamorgan area health authority to discuss the crisis in the Health Service caused by the cuts imposed by the Government.
Is the Secretary of State aware that people in my constituency, given his proposals today, need such proposals like they need a hole in the head? My constituents live in an area which has some of the highest unemployment in Wales, the lowest incomes, the worst health services and the worst housing. Can the Secretary of State tell me how the proposals will help those people?
Mr. Edwards: There is no way that anyone can discuss cuts in the Health Service when the Government have made substantial additional provision for the Health Service in Wales. I was merely observing that I doubt the value of having a repetitive series of statements like this, when there will be plenty of opportunity in the Welsh Grand Committee to debate such matters in the coming weeks. However, if the hon. Lady thinks that this is a good way of proceeding, that is up to her.
I should have thought that the hon. Lady might think it useful that local businesses in her constituency —which at present, as they are in a high rating area, face severe rate burdens—might expect to pay lower rates and so create more jobs. The hon. Lady might be interested in the benefits for single pensioners, one-parent families and low-income families who will benefit under the arrangements. These groups of people, many of whom live in the hon. Lady's constituency, will benefit, yet the hon. Lady seems to wish to continue with a system that is grossly unfair to many of those people.
Mr. Gwilym Jones: I believe that my right hon. Friend's statement will be widely welcomed, as it will put industry beyond the clutches of the high-spending councils. It will be welcomed by councils for the new certainty and simplicity it offers and it will be welcomed by my constituents who, as my right hon. Friend knows, are facing an horrendous increase of 25 per cent. As I understand the proposals, the community charge wil be payable by all adults over the age of 18. Can my right hon. Friend tell me how students in full-time education over the age of 18 would fare under the proposals?
Mr. Edwards: A firm with its headquarters in my hon. Friend's constituency told me last week that, under the

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proposals of the county council, it would probably have to reduce its work force by 25 to meet an extra rating bill of £225,000. I agree that we wish to protect businesses of that kind and stop jobs being put at risk.
As my right hon. Friend the Secretary of State for the Environment said yesterday, there is a fairly complex series of arrangements covering students and we have said that we will wish to introduce arrangements to provide for students. That is one of the matters for consultation in the Green Paper.
Mr. Gareth Wardell: Is it not the height of hypocrisy for the Government to raise the level of direct taxation when they are committed to reducing it?
Mr. Edwards: The effect of the proposals is to maintain the very substantial levels of Government grant on exactly the same basis as at present. Therefore, if there is to be an increase in direct taxation in Wales as a result of the measure, that can happen only as a consequence of the decision of local authorities. Under the proposals, local authorities will then have to answer to their electorates for the first time and will therefore have to defend their decisions to their electorates.
Sir Raymond Gower: Is my right hon. Friend aware that one of the great advantages of the rating system in the domestic sphere and to some extent in business premises is that it is not difficult for the local authority to establish and keep a constant knowledge of the ratepayers' identity? Will there not be considerable difficulties for a local authority to enforce payment of a community charge when the authority does not know of the ratepayers' identity in relation to a particular premises?
Mr. Edwards: Almost all tax systems provide the possibility of evasion, and there is a large black economy. Certainly no system can entirely counter that.
We believe that the proposals that we have set out in detail in the Green Paper will enable local authorities to maintain a register that should enable them to collect from the vast majority of those concerned. The authorities have great experience in such matters and keep many registers for payment purposes. A number of measures could be taken. For example, people who use local services could be asked to show that they are on the register before services are provided. Such checks, and penalties on householders who fail to register, will provide the means of compiling an accurate register. Although there are difficulties, which have been recognised in successive Government papers, those problems are far fewer than the enormous shortcomings of the present system.
Mr. Richard Livsey: Would the Secretary of State explain how the new system will affect areas of sparse population in Wales? I am concerned that, with low populations and with the business rate being centralised, there will not be adequate compensation for areas of sparse population.
Mr. Edwards: The proposal is that the Government will redistribute a business rate on a per capita basis throughout Wales. That will have a substantial redistributive effect. Furthermore, there is a thorough system of safety nets to protect individual councils. The system of needs assessment that is proposed and the new needs grant, though very much simpler than the present
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system, will provide adequately for the varied needs based on such matters as population, social structure and such matters as are covered under the present needs assessment.
Mr. Alan Williams: Does the Secretary of State agree, despite what he said to his hon. Friend the Member for Vale of Glamorgan (Sir R. Gower), that he has outlined a system that is open to massive evasion? Does he agree that the first other list that the local authority is likely to use for checking purposes will be the electoral register and that the likely consequence is that the electoral register will become as corrupt as the community tax register?
Mr. Edwards: No, I do not believe that that is so. There is a great deal of material to enable local authorities to check whether people are registering. I have mentioned one means of checking. I am not sure that I would have used the word "corrupt" in quite the same way, but I have some sympathy with my right hon. Friend the Secretary of State for Scotland, who used that word to describe the existing system. Under the present system, a relative handful of people have to pay the cost demanded by the very large number of people who do not pay. I think that that can fairly be described as corrupt, and that is what we seek to prevent.
Mr. Roy Hughes: Is it not clear from the anxiety expressed in these exchanges that if the proposals ever come to fruition they will lower the standard of living of the people of Wales, which has fallen far enough already with unemployment running at 17 per cent., appalling housing and environmental conditions in so many areas and ever-deteriorating public services?
Has the Secretary of State given full consideration to the difficulty of identifying young people over the age of 18, especially as the new social security regulations tend to keep young people on the move so as not to lose the benefits to which they are entitled? Is this not yet another example of the left hand not knowing what the right hand is doing and the policy of one Department being at variance with that of another? Perhaps the Government should bring in Mr. Bernard Ingham to sort out the complexities.
Does the Secretary of State accept that the proposals will mean an increase in bureaucracy and may well throw local government services into chaos? Are not the proposals a heavy price to pay for the Prime Minister's promise in the 1979 general election? Is it not remarkable that the proposals come seven years after that promise, showing the Prime Minister's inadequate understanding of the complexities of local government?
In speeding up the process for Wales, the Secretary of State seems to be using Wales as a guinea pig. Does he agree that Wales deserves better from its Secretary of State? Finally, does he appreciate that the real problem is that local government is under-funded and that it is no use blaming the county councils because the responsibility is his?
Mr. Edwards: One of the problems with the hon. Gentleman is that he apparently did not bother to listen to any of my previous answers in this long exchange. I have made it perfectly clear that Wales will not be used as a guinea pig and that the measure will not be introduced sooner than in England. The hon. Gentleman should have taken that on board, but he is apparently unable to understand these simple matters.

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There is absolutely no basis for the charge that the proposals will lead to a lowering of the standard of living.
The hon. Gentleman questioned whether young adults would register. It will be for householders to ensure that people in their households register.
As for the hon. Gentleman's reference to the left hand not knowing what the right hand is doing, there is one thing of which we can be certain. The left hand of the Labour party has no sensible proposals for reforming a system that is regarded as complex, unsatisfactory and unfair by the vast majority of people in local government as well as the electorate. It is typical of Labour Members that they have not one positive proposal to make about anything that the electorate cares about.

BILL PRESENTED
  TOBACCO SMOKING (PUBLIC PLACES) (No. 2)
  Mr. George Foulkes, supported by Mr. John Maxton, Dr. Roger Sims, Mr. John Home Robertson, Mr. D. N. Campbell-Savours, Mr. Clement Freud, Mr. Laurie Pavitt, Mr. A. J. Beith, Mr. George Robertson, Dr. Norman A. Godman and Mr. Alfred Dubs presented a Bill to limit smoking in public places; to make provision with regard to smoking and employment; and for purposes connected therewith: And the same was read the First time; and ordered to be read a Second time upon Friday 7 February and to be printed. [Bill 68.]

Abolition of Crown Immunity
5.16 pm
Mr. Frank Haynes: I beg to move,
That leave be given to bring in a Bill to remove Crown Immunity from public premises so that such premises can be inspected by local authorities and be subject to appropriate standards of health and hygiene.
There is no doubt that there is strong feeling throughout the House that a change must take place. The problem of Stanley Royd hospital has brought the subject of hospital hygiene to the forefront, but the concentration on that report overlooks the problem nationwide.
I praise my right hon. Friend the Member for Stoke-on-Trent, South (Mr. Ashley) for his earlier attempts to persuade the Government to move in the direction that I propose today. My right hon. Friend worked extremely hard, but time was lost. It is time that the Government accepted their responsibilities in this respect. It is a matter not just of hygiene in hospitals but of life itself, in view of the number of deaths from food poisoning.
The Government must realise that the privatisation going on in hospitals is having a detrimental effect on the services provided. There is evidence that certain areas of many hospitals are understaffed because of the rundown in manpower. The result is conditions such as those at Stanley Royd. I charge the Secretary of State for Social Services and the Minister for Health with total responsibility for what is now going on and with the responsibility to put right those wrongs. Indeed, I go further. A few minutes ago, my hon. Friend the Member for Carrick, Cumnock and Doon Valley (Mr. Foulkes) introduced a private Member's Bill related to smoking. Cigarette packets carry a Government health warning. In view of what is happening and of the feeling throughout the country, I suggest that when people make an appointment to see a consultant or whoever at a hospital the notice of attendance should carry a Government warning, "Some hospitals can seriously damage your health."
The problem goes much further than food poisoning. Pest control is a major problem in the hospital service. Not long ago a patient was lost from a psychiatric ward due to an absence of supervision and was missing for 24 hours. The police were called in to search the grounds and gave all possible assistance. In searching for the missing patient, they happened to look into the air ducts. They found them alive with wild cats—vermin. That is the problem of many of our units and something must be done about it. I believe that the public have lost confidence because of the publication of reports such as the report on Stanley Royd hospital. There is a feeling in the nation that something should be done. I hope that the House, including the Government, will support any Bill that suggests the abolition of Crown immunity.
I do not think that it is good enough for the Minister for Health to stand at the Dispatch Box and say that he is concerned about the reports that he has read in the newspapers. That does not go very far. We are looking for action from the Ministers and from the Government to overcome many of the problems that we have in the National Health Service.
I praise and take my hat off to the Institution of Environmental Health Officers. I believe that its officers do a first-class job on behalf of the local communities in which they work. We have to give them a chance to do

977
their job fully on Crown property. There is a groundswell of opinion to support the suggestions that are being made in relation to the abolition of Crown immunity.
I shall give a few figures. The number of hospitals where the standard would have been considered sufficiently serious to warrant prosecution if Crown immunity did not exist from September 1976 to August 1977 was 13 per cent. of the total. From April 1984 to March 1985 it increased to 16 per cent. That was almost a year ago, and I will gamble that when the figures are presented they will be higher than 16 per cent. They are getting worse as time goes on. The Government must accept their responsibility and do something about the problem.
There are a number of hospitals at which recommendations had not been acted upon or accepted by the end of the review period. I am talking about instances where environmental health officers manage to get on to Crown property. Some of them are turned away and are refused entry to Crown property, particularly hospitals. That is wrong. They should be given the right to enter Crown property whenever they think fit in the interest of health, hygiene and people's lives.
In one large group of hospitals, the senior administrator had selected the cheapest quote on a contract to go private.
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When the tender was accepted he was asked how he would keep an eye on things. He said that he could not be bothered and that he had too much on, anyway. That does not go down very well in terms of covering health and hygiene in a hospital. That was a senior administrator, so it shows where the problems are.
A few days ago a supermarket was prosecuted and fined £2,500 for breaking food hygiene regulations. That is an example of an environmental health officer doing his job. They should be allowed to do their job on Crown property. We must break down the barrier of officialdom.
Question put and agreed to.
Bill ordered to be brought in by Mr. Frank Haynes, Mr. Jack Ashley, Mr. Alfred Morris, Mr. Laurie Pavitt, Mr. Don Dixon, Mr. Andrew Bowden, Mr. Ray Powell, Mr. Conal Gregory, Mr. Gerald Bermingham and Mr. Anthony Beaumont-Dark.

Abolition of Crown Immunity
  ABOLITION OF CROWN IMMUNITY
  Mr. Frank Haynes accordingly presented a Bill to remove Crown Immunity from public premises so that such premises can be inspected by local authorities and be subject to appropriate standards of health and hygiene: And the same was read the First time; and ordered to be read a Second time upon Friday 14 February and to be printed. [Bill 67.]
Opposition Day
[5TH ALLOTTED DAY]
Opposition Day

  Exchange and Interest Rates
  5.26 pm
  Mr. Roy Jenkins: I beg to move,
  That this House urges the Government to bring the United Kingdom into the Exchange Rate Mechanism of the European Monetary System forthwith.
  The European monetary system, which this motion calls upon the Government to join forthwith, will be seven years old in a couple of months time. It was the most recent major initiative taken by the European Community and it was put into place remarkably quickly, partly because it did not involve a great series of interlocking individual decisions and therefore did not fall foul of any unanimity rules or even the need for a qualified majority.
  I tried to relaunch the idea of a monetary route forward in a speech in Florence in the autumn of 1977. The European Council after that, in December, showed polite interest, but to say that there was any great sense of urgency or serious intent at that stage would be an exaggeration. The whole thing changed dramatically in the late winter and early spring. For most of its life the EMS has had to contend with the dollar being too high. Paradoxically, that changed because of the temporarily collapsing dollar in the early months of 1978. I vividly remember the occasion when I went to Bonn and Helmut Schmidt told me that he had changed his mind and he thought it was essential to go forward straightaway. He believed that he could get it on board as soon as the French legislative elections, due that year, as this year, were out of the way. So it happened.
  The scheme was unveiled at the Copenhagen European Council that spring and was in place exactly a year later. I do not think there is serious doubt about its limited but substantial success for the participating countries. It has established the fact that it is a lasting entity, despite the fact that the buffeting waves of a violently fluctuating dollar, in particular, have been much greater than anybody expected when the scheme was being put into place. The EMS has survived well.
  There have been many changes of central rates affecting nearly all the currencies in varying degrees but they have been carried through remarkably speedily and smoothly. That is a dramatic contrast to the delayed and traumatic devaluation under the otherwise admirable Bretton Woods system. Those changes have gone through with remarkable speed. When the Foreign Secretary held the post of Chancellor of the Exchequer he presided over a number of meetings of the Economic Monetary Council which put them through. That is an extraordinary example of presiding from outside over a thing which was working extremely well internally.
  Some of the changes have not been such as to render the system nugatory. The Italians asked specially for a wider margin of 6 per cent. either way for the lira compared with the margin of 2·25 per cent. for the other participating currencies. When the Italian lira moved sharply last July, that was the first move for three years. The idea that there has been constant instability and change is certainly not true.
  980
  The fairly recent International Monetary Fund study calculates that the EMS has taken about 30 per cent. off the fluctuations between the participating currencies that would have occurred otherwise. That has been extremely valuable, particularly in view of how much Europe has been plagued by currency fluctuations within the Community, especially in the mid-1970s. This is one of the things that set my mind moving in this direction in 1977. Europe had been doing well throughout the 1960s and the early 1970s compared with America or Japan, but in the mid-1970s it suddenly started to do much worse. I was convinced that one of the major reasons was that the 1960s and early 1970s were a time of relative currency stability in the world, whereas the late 1970s were a time of violent currency and exchange rate fluctuations. That was internal, in Europe—outwith Japan and the United States. There was a considerable effect, but it was external to those countries.
  In addition, there has been a remarkable recent development in the past couple of years in the private use of the ecu, paradoxically, perhaps, more than in the public use of the ecu. It is now a major borrowing and lending currency.
  Therefore, there is no question but that the system which, by our own choice, we are outside, is successful. I think that all the participants value it and other potential participants are eager to join it. For instance, Senor Gonzalez told me just before he came into the Community that he believed that he could bring forward by a year the date of Spanish adherence to the EMS, and he would regard that as very desirable from the point of view of full Spanish membership of the Community and influence within the Community. We might well take a little notice of that point.
  How was it that we did not join at the beginning? Three countries had doubts, although at slightly different stages. Italy and Ireland went away from the last European Council leaving serious doubts as to whether they would join. Then they took their courage in both hands and cam:, in. I am sure that neither of them has regretted that decision at all. Why not us? I heard the reasons given by two successive Governments. Indeed, they are engraved on my mind. I remember that in November 1978 I went to see the right hon. Member for Cardiff, South and Penarth (Mr. Callaghan), and he assured me that, in principle, he would like the Labour Government to bring Britain into full participation in the exchange rate mechanism. However, he added, "I am extremely worried at being locked in at too high a rate, which would inhibit our ability to deal with unemployment." Almost exactly six months later I went to see the right hon. Lady who still presides over the Government, and she assured me that in principle she was extremely anxious for Britain to be a full participant, but, she said, "I am extremely worried about being locked in at too low a rate, which would inhibit our ability to deal with inflation." So we did not join. As a matter of fact, all the participating countries had lower unemployment and lower inflation than we did in the two years that followed.
  Therefore, it is difficult to believe that such fears—no doubt legitimate—as well as an endemic offshore mentality were not at work in both those Governments. That worked still more strongly than the reasons given. It was careless and sad that we should have repeated for the third time the mistake of joining late. We did so with the European Coal and Steel Community in 1951 and the

  981
  European Community in 1957. If one is joining an organisation it is sensible, if possible, to be there at the beginning because one can influence the organisation's shape. It is better to do that than to stand aside for the third time, never learning the lesson, and saying that the shape does not fit, when one has not been there to influence its creation.
  Mr. Douglas Hogg: Will the right hon. Gentleman comment on the point that the volatility of sterling, because it is an oil currency, makes membership of the EMS more difficult for this country than for the non-oil economies?
  Mr. Jenkins: That will make British membership more difficult for the European monetary system rather than for this country. In a way, we are lucky that it has been, and is still, willing to have a more volatile currency in full membership. We want to try to control the volatility of sterling as much as we can.
  In view of the fear of the right hon. Member for Cardiff, South and Penarth—[Interruption.]—what happened to sterling subsequently—(Interruption.]—
  Mr. Deputy Speaker (Mr. Ernest Armstrong): Order. If the hon. member for Bolsover (Mr. Skinner) wants to intervene in the debate, he should come into the Chamber.
  Mr. Jenkins: Following the fear of the right hon. Member for Cardiff, South and Penarth that he would be locked in at too high a rate, what happened was that, with us outside the EMS, sterling appreciated beyond the wildest fears of anybody in 1978–79. Over two years it rose from $1·60 to $2·40. The result was that our competitive index worsened by 60 per cent., on the scale measured by the IMF. The result of that was the destruction of one fifth of our manufacturing industry and the associated increase in unemployment.
  Nobody should suggest that membership of the EMS would have obviated all that. However, I believe that it would have reduced it substantially. It is a great mistake to believe that any monetary scheme or monetary mechanism can or perhaps should resist the long-term swell of the currency ocean. It can substantially take the top off the waves, particularly when, as happens too often, exchange rates are reacting not to differing levels of inflation, not to differing rates of productivity growth, not to trade imbalances, but much more to changes of sentiments or capital flows. The monetary system can do a great deal to cut the top off such waves.
  That was very much the case in 1980. Everybody knew that rate could not be sustained. It was just a question of when it came down. If we had been in the EMS, the bubble would have been pricked much more quickly, and the damage to our industry and employment would have been much more limited. We would have avoided much of the ridiculous parabola in the sky of sterling going up from $1·60 to $2·40 and then coming down within 18 months back to $1·60, and, for a short period, down to $1·07.
  Mr. Nigel Spearing: I should like to take the right hon. Gentleman back to some of the possible disadvantages he mentioned in relation to my right hon. Friend the Member for Cardiff, South and Penarth (Mr. Callaghan). Is it not a fact that the EMS is
  982
  much more than a smoothing insurance mechanism? Are there not potential disadvantages in a Government's requirements in respect of a general economic policy to maintain parities? Is not the ruling mechanism—that of the central banks—likely to create difficulties for any member Government which they might not have if it were not a member of the system, bearing in mind particularly the strength of the Bundesbank and of the market?
  Mr. Jenkins: I hear the hon. Gentleman and his colleagues, but I think that the hon. Gentleman has himself complained about how British economic policy has developed over the past seven years. He has complained that we have had by far the highest unemployment rate in years. I do not understand how his dedicated, dogmatic anti-Europeanism can lead him to say that he would rather have what has happened outside the EMS than operate on a co-operative basis. In my view, we would have been able to avoid a significant part of the sterling fluctuation. That would have given us a substantial and healthier base for our economy.
  I have been dealing in detail largely with the past. I shall now consider the position today. Although it would be better to enter the exchange rate mechanism at any time than never to enter it at all, there are obviously some times when it would be much better to enter. This is a very good time because there is a particular conjunction between the sterling-dollar rate and the sterling-deutschmark rate. Those are the two factors of primary importance at which people have been looking in seeking the most favourable juncture.
  Last February, 11 months ago, there was a good occasion. The right hon. Member for Guildford (Mr. Howell) noted that in his interesting publication, which I read carefully. That opportunity was allowed to slip away, but now there is another good occasion. The pound is approximately 3·33 deutschmarks, down from 3·75 a month ago — a devaluation of more than 11 per cent. against a major European currency.
  I believe that most of the decreases in oil prices may have occurred. The price was $30 a barrel in November. The price is moving, but let us assume that it settles down somewhere between $17 and $20 a barrel. We will have a very uncertain market, but at least the really substantial move has probably occurred.
  Sentiment in the oil markets is very uncertain, and the price is likely to fluctuate with every rumour about what Saudi Arabia is going to do, or about the date of the next OPEC meeting. The problem is how to tame the impact of the short-term changes in sentiment without hopelessly disrupting the domestic economy.
  Outside, interest rates are almost the Government's only weapon. If we were fully in the EMS, support from our partners would provide an alternative means to manage short-term fluctuations. We would have a much better chance of living through a period of see-sawing expectations without disruptive alterations to either exchange or interest rates.
  Mr. Anthony Beaumont-Dark: I am following the right hon. Gentleman's argument with great interest. He talked about interest rates and the damage that fluctuation of the pound has done to manufacturing industry. The right hon. Gentleman knows Birmingham almost as well as I do, so he realises the effects. Control of the EMS would not rest on good will,

  983
  which does not exist between central banks—only logic does. Because of what has happened to the pound as a result of the influence of the petrocurrency, and because of the present interest rates structure, would not interest rates be 2 to 3 per cent. higher now if we had been in the EMS? Would that not be more dangerous for us than the present system?
  Mr. Jenkins: I think that interest rates would be lower if we were in the EMS. I would not say that interest rates would in all circumstances be lower in the EMS, but I would say at the present time in my view—one can only express one's own view—interest rates would be lower, and the immediate prospect would be one of lower rather than higher interest rates.
  Mr. Tony Blair: The motion says that we should forthwith join the exchange rate mechanism. Suppose we had joined in October or November last year and the best rate we could have achieved was 3·60 or perhaps 3·50 deutschmarks to the pound. Considering the pressure on the pound last week, is it not the case that we would have been raising interest rates?
  Mr. Jenkins: I am saying that we are now at the best juncture we have reached for some time. There have been other good ones. I would not have joined last October. I would have joined last February—
  Mr. Dennis Skinner: The right hon. Gentleman said "at any time".
  Mr. Jenkins: I said it is better to get in, rather than never to get in. Over the past seven years we have become like lift dwellers in a department store. We have gone into the lift, and it has gone up and down past every floor. The attendant has called out, "Soft furnishings, hard furnishings, sports goods, toys" and we have said "No, we want none of those." We always want to move on to the next floor. Lifts are very useful objects, but they are not suitable for permanent living. If one is always to say that there is never the perfect opportunity and thus try to get out before it is suitable, it would be more advantageous to get out on the floor that suits one, rather than on the floor that does not suit one. I would not stay in the lift indefinitely, and that is what the policy of the Government is about.
  Apart from the short-term fluctuating position, there is also the medium and long-term position, and without the oil price shocks of recent weeks we would anyway have been in for a rough landing as our oil surplus runs down. What I am saying is that our huge surplus of oil will certainly be given to Russia, and it seems to me that we greatly want the assistance, if we can have it, of our other European partners to try and make that landing smoother. Be in no doubt that having reserves 10 times ours, which are those that are at the disposal of the EMS, is a considerable benefit. We are lucky that they still want us in.
  Why do they? I think the reason bears upon another more general reason. They want us in more because of the importance of the City of London as a financial centre, rather than because of the importance of sterling as a currency. It is not nearly as important as the deutschmark.
  It is greatly in the interests of every trading country and every economy to make sense of the world monetary system. Be in no doubt, with the fluctuations that we have had recently — and I am in favour of changes in
  984
  currency rates which reflect realities in the performance of different economies—nobody is suggesting that we can or should resist the violent changes which make the free-floating rate the enemy of international trade, of international investment flows, and bring into being the grave danger of creating protectionist forces to a strong degree with currencies such as the dollar, which are forced up and kept at artificial lengths for some time. I do not think we can possibly put Bretton Woods back on its pedestal again, but we can create a tripod of greater stability, and if we are to do that, it manifestly has to be on the basis of the dollar, the yen, and the ecu as the currency of the European system.
  As long as Britain is outside the mechanism, the European leg of the tripod will be hobbled by the absence of the City of London more than by the absence of sterling. It is as though New York and Chicago were outside the dollar area. That is why Britain is still welcome in the exchange rate mechanism. It is also an additional reason why we should be in favour of entering it. Enlightened self-interest is our motive for getting some sense and stability back into the international monetary system.
  I am convinced that so long as Britain remains outside the ERM—outside the only major Community initiative in the past 10 years— and so long as she manifestly repeats the old habit of 1951 and 1957, we shall inevitably diminish our influence on other matters concerning the European Community. Spain noticed that fact as soon as she entered the EEC. She said, "We want to have full influence and we must be a fully participating member." It is curious that somehow we cannot see that.
  On direct and indirect grounds, the case is strong. The moment is as good a one as we are likely to get. I urge the Chancellor to overcome what I fear has now become the Prime Minister's prejudice and, in accordance with what is now a substantial balance of informed opinion, to get on with it.
  5.50 pm
  The Economic Secretary to the Treasury (Mr. Ian Stewart): The right hon. Member for Glasgow, Hillhead (Mr. Jenkins) has made, as is his custom, an elegant speech. He was a distinguished President of the European Commission. He has always been an eloquent advocate of the cause of Europeanism.
  It is important to put the question of our membership of the exchange rate mechanism of the European monetary system into its proper perspective. It is not a question of our being for or against the development of the European Community. The Government's commitment to constructive membership of the European Community is beyond dispute. The fact that we have remained outside the exchange rate mechanism of the EMS casts no doubt on our European commitment. On the other side of the coin, it is right to point out, too, that, contrary to the assertions from time to time of some of those on the Opposition Benches, membership of the exchange rate mechanism would not lock us into some irrevocable commitment to full economic and monetary union. The truth is more complex, yet more prosaic. The ERM is a fixed, but adjustable, exchange rate system on Bretton Woods lines intended to promote greater economic convergence between its participants, particularly on inflation.
  The Government's position on membership has been clear throughout. We would be ready to join the ERM as and when we judge the conditions are right for us to do so.

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  I recognise that the right hon. Member for Hillhead believes that those conditions are right today. That is his judgment. However, he will recognise that many factors affecting sterling need to be weighed carefully. The Government have to take account of the fact that, unlike all other ERM currencies except the deutschmark, sterling is a widely held and internationally traded currency. It is, furthermore, a currency subject to different and often opposite strains from those that affect the other currencies currently in the system. We have seen evidence of these conflicting pressures in exchange market movements in recent weeks. The House does not need me to explain that conditions in the exchange markets have been, even by their standards, remarkably turbulent of late.
  In recent weeks, the major influence on sterling has been the weakening of the oil price. To some extent, this is a problem of perception. Even before the latest movements in the market, oil accounted for only 5 per cent. or 6 per cent. of our national income and less than 8 per cent. of all our exports. It accounts for only 0·5 per cent. of all our employment and only 5 per cent. of capital investment, despite the massive capital investments required to develop the major fields in the North sea. Those who operate in the markets, as many commentators are increasingly coming to note, often have an exaggerated perception of the importance of oil to the United Kingdom. That is something with which we have to live. It came as no surprise that a fall in the price of oil on the scale we have seen in the past three or four weeks, when the price has fallen by around 30 per cent., should have had some impact on sterling. I would like to think that the markets have already begun to take a more balanced view, but these realities can take time to gain hold.
  The other major factor in the exchange markets recently has, of course, been the decline of the dollar and its differential impact on other currencies. Since the Plaza agreement, the yen has appreciated by nearly 19 per cent. against the dollar, the deutschmark by about 16 per cent. and sterling by 22·5 per cent.; so the decline in the value of the dollar has given rise to substantial adjustments between the exchange rates of other currencies.
  It is against this background that we must judge the question of membership of the exchange rate mechanism of the EMS. We must recognise in so doing that for sterling to join the ERM would bring about a significant change in the operation of the system itself. At present, the deutschmark plays a dominant and central role. The addition of sterling, another widely held and traded international currency, would undoubtedly introduce an element of bi-polarity into the system with which it has not yet had to cope. It may be that it could do so, but it is a question that must give us pause. We should note that the currencies of the other two major countries in the mechanism—the French franc and Italian lira—are both protected by a variety of exchange controls.
  I need hardly say to the House that we have no intention whatsoever of restoring the exchange controls which my right hon. and learned Friend the Foreign and Commonwealth Secretary removed in 1979 when he was Chancellor of the Exchequer. Such controls inevitably hinder the development of financial markets. Indeed, it is interesting to note, following a point made by the right hon. Member for Hillhead, that London is one of the
  986
  leaders in the ecu market even though the United Kingdom does not participate in the exchange rate mechanism of the EMS.
  The question for the United Kingdom is, therefore, in a number of respects rather different from that which other menber states have faced. The common element, which is insufficiently understood by many alliance Members, is that for our European partners the exchange rate mechanism is not seen as a soft option to be adopted as an alibi. There is no disputing the view of our partners that the ERM can be a helpful and effective anti-inflationary discipline. Indeed, it has by and large worked successfully for those countries participating, particularly since 1983.
  The vital question is not so much membership itself as the resolve with which responsible financial policies are pursued. It is on this point that we must have doubts about the attitude of the right hon. Member for Hillhead and his party. They are very keen to join international organisations. They want us to join the exchange rate mechanism. Indeed, the hon. Member for Stockton, South (Mr. Wrigglesworth) was using language at Prime Minister's Question Time yesterday that suggested they also wanted us to join OPEC.
  In spite of that apparent enthusiasm for the exchange rate mechanism, it is clear that they would not be joining it in the same spirit as our other European partners. The other European countries have submitted to the discipline it imposed, and had significant success in reducing their inflation rates. Yet the Social Democratic party has revealed that this is not its intention at all. Its autumn statement published last year — a rare example of precision by a party that usually likes to leave its intentions as vague as possible—explained how it would manage the economy. It showed that the Social Democratic party expected, if its policies were implemented, inflation to rise to 7·5 per cent. in 1987. That makes it clear that the Social Democratic party regards the ERM not as a discipline against inflation but as a cover for its own inflationary public spending plans. As such a cover, of course, it would not work.
  This Government may not have joined the exchange rate mechanism, but we have remained firmly committed to the principles of financial discipline which underly it. We have chosen a different route to success against inflation, but one which has been equally effective. The average rate of inflation during this Parliament has been just over 5 per cent., which compares with an average of over 15 per cent. for the Labour Government of the 1970s. The prospect this year is for continued falls. We expect inflation to be below 4 per cent. in 1986. This inflation record has been accompanied by a remarkable turnround in our growth rate, especially when compared with that of our European partners. For a decade from 1973 to 1982 we were consistently at the bottom of the European growth league. In 1983 we grew faster than any of our major European partners, we would have done so again in 1984 were it not for Mr. Scargill's strike, and every indication is that in 1985 we shall once again be the fastest growing major European nation.
  Mr. Douglas Hogg: My hon. Friend has told us that the Government are not opposed in principle to joining the EMS and that we shall do so when the time is right. Will my hon. Friend tell us what the conjunction of circumstances will be which will suggest to him when the time is right?
  Mr. Stewart: I am not going to offer my hon. Friend or the House a check list of circumstances because, as we have seen in recent weeks and days, circumstances of many kinds can change unpredictably and at short notice. The balance of judgment has to be made in the conditions of the time.
  Sir Russell Johnston: The hon. Gentleman has said that we in the alliance have perhaps misunderstood certain consequences of joining the exchange rate mechanism. Can the hon. Gentleman say succinctly—he has not yet done so—what disadvantages would affect this country if we joined?
  Mr. Stewart: Greater fluctuations in the market in relation to sterling, to which I have already alluded, do create difficulties in operating any financial or monetary system. That is a point to which the hon. Gentleman's right hon. Friend the Member for Hillhead drew attention. One has to take these questions into account. There are arguments both ways on this matter and one must take a balanced judgment.
  The record of success which this Government have had, without being a member of the ERM amply demonstrates that it is commitment to sound finance and lower inflation which is the key to economic prosperity, rather than the fact of holding a club menbership card in the exchange rate mechanism.
  The judgment the Government have to make in relation to the exchange rate mechanism is not, as I emphasised at the outset, one of being for or against Europe. Nor is it one of being for or against international co-operation on exchange rates. Our participation in the Plaza agreement along with other major European countries, as well as the United States and Japan, amply demonstrates such cooperation. It is rather whether, bearing in mind the practical problems, membership of the exchange rate mechanism would provide a more effective and safer means of achieving our economic objectives than the strategy the Government have followed for the last six years. Membership of the exchange rate mechanism is not a panacea, nor is it the only option. There are no magic guarantees that it would reduce inflation by itself. Membership would be successful only if monetary and fiscal policies were appropriately firm.
  Mr. Beaumont-Dark: I agree with the right hon. Member for Glasgow, Hillhead (Mr. Jenkins) that this is an interesting and important debate. We have talked about whether we should join the ERM or the EMS. However, one of the great problems that we face in this part of the western world is that interest rates are at such high levels — higher than any level in the history of western Europe. America should co-operate and should cease sucking in vast sums of money because it is unwilling to balance its books — there is a $200 billion deficit. Unless we get the co-operation of the United States, whether we join the EMS or any other system, we and Europe as a whole face problems never faced before. We are all pulled down because of the United States' unwillingness to get its own books and ship in the right order.
  Mr. Stewart: I do not think I should be drawn into a disquisition on the United States fiscal and monetary policy. I certainly accept the point that the large
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  imbalances in the domestic economy and trade account of the United States have created conditions which have caused turbulence to the rest of the world.
  The United States Administration addressed themselves to these problems more realistically in 1985—the Plaza meeting was evidence of that. The new attitude of Secretary Baker at the annual meeting of the World Bank and the International Monetary Fund shows that there has been an important shift in American perception of its domestic economy and the international implications of its policies. However, this does not remove the need for each country to deal with its own financial circumstances according to its own policies.
  Mr. John Browne: My hon. Friend has just mentioned that the United States now has a more international perspective on these matters. Does my hon. Friend agree that the reason for this debate is that early in the 1970s the United States broke the gold exchange window and agreed with other western countries to move into an era of floating exchange rates? Membership of the EMS is not the critical issue but the restoration of fixed interest rates based on convertibility of at least one currency—
  Mr. Douglas Hogg: It cannot be convertibility to gold.
  Mr. Browne: It used to be the gold exchange standard. The EMS is founded on a floating base. If we choose a fixed exchange rate—which is much more important—it must be done with at least one currency that can be converted into gold at a price to be agreed. Can my hon. Friend persuade the Americans that this is an urgent problem? Would my hon. Friend urge this factor, given the Americans' new international perspective?
  Mr. Stewart: I am not sure that I follow my hon. Friend's analysis and argument. However, the era of floating exchange rates was not a perverse decision taken out of the blue in the 1970s. It was the consequence of increasing instability between a number of major economies under which the old system, under any circumstances, could not be maintained. That is a different cause. Ten years or more later, we are still grappling with the consequences. The major changes in commodity prices —of which oil is the main one—were bound up with this.
  The Government have always said that they recognised the advantages that the exchange rate mechanism could offer in the way of providing a framework of financial discipline. It is not the only possible framework, as we have fully demonstrated, but, combined with the appropriate political commitment, it can indeed provide a method of reducing inflation. The considerations which I have discussed this afternoon suggest that, at present, sterling's participation in the mechanism would not, on balance, be of benefit, although it is a question which is kept under continuous review.
  6.9 pm
  Mr. Tony Blair: The question whether the United Kingdom should join the EMS is not an ideological argument but a practical one. Although the present level of the exchange rate makes the argument for joining stronger than it has been for some time, the balance of advantage still lies against our joining.
  One reason for saying that is that we think that insufficient attention has been paid to the obligations of

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  membership of the EMS. We should treat with extreme caution claims about the stability which membership would bring to our currency. The EMS is essentially a means to an end and for it to succeed there must be a clear and common area of agreement between members on economic policy and objectives. We are not convinced that policy objectives that are currently pursued in the EMS converge sufficiently with those which we would want to be pursued domestically.
  The first thing that we should do when discussing the EMS is to debunk some of the mythology surrounding it. There is a risk of it being seen not as a palliative, which is what it would be at best, but as a panacea that can cure the problems of instability in the exchange rate. It is important that our choice is informed and not a careless embrace of anything with the word "European" in it.
  We should start by examining what the EMS is. It is a club that can yield benefits to the participants, but only at the expense of certain obligations. The stability arises not by natural process but by the agreement of the members to keep their exchange rates within agreed boundaries. It is essentially a statement of intent to act individually or collectively to ensure that the value of currencies is maintained within agreed margins of a set of bilateral central rates.
  Three types of action can be taken. It can be done collectively through mutual support from the pool of reserves—it can also be taken under various short-term financing facilities—it can be taken through members intervening individually and it can be taken through the use of interest rates. France virtually controls its exchange rate by the use of interest rates. The latter two methods of control might be chosen by countries outside the EMS, but they are methods of obligation within it.
  The proponents of the EMS say that those obligations are worth carrying because of the stability that will accrue to our currency. Stability can be long-term or short-term. I do not believe that there is compelling evidence that long-term stability has been brought to the exchange rates of currencies in the EMS. The long-term stability will to a considerable extent be contingent upon policy convergence. Such stability as there has been would equally have occurred if the exchange rates had been outside the EMS.
  It is worth remembering that, when we talk about the medium term, because there are several realignments in the EMS, it is still possible to get considerable variations in the exchange rate. It is worth examining the two major realignments of the past few years—that of the French franc in March 1983, and that of the Italian lira in July 1985. When the French franc came under sustained speculative pressure in March 1983, there was a realignment, but it occurred as a result of the French agreeing much tighter budgetary fiscal measures. We can disagree about whether that was right or wrong, but it is important to emphasise that it was part of a package.
  Mr. David Howell: Has the hon. Gentleman understood that, whatever might be the arguments for or against membership of the EMS, currencies that are in it and that are exposed to speculative pressure have the support of the entire monetary authority system of the member countries? That is why the speculators were seen off against the French franc in
  990
  March 1983 and why the devaluation was relatively controlled. I do not think that the hon. Gentleman has quite grasped that point.
  Mr. Blair: With respect, I have grasped it. I said that one of the courses of action available to members of the EMS was collective action from the pool of reserves. France effectively keeps its median line against the deutschmark through the use of interest rates, so the pool of reserves alone is not sufficient to ensure against currency speculation. More important is the fact that the realignment, took place in conjunction with other policy measures. Exactly the same thing happened when the Italian lira was subjected to an 8 per cent. devaluation in July 1985. The price for the realignment was considerable other measures demanded of the Italian Government.
  The two lessons to be learnt from those examples are, first, that realignment can occur, but only when combined with other policy packages — that means yielding up some freedom of action in the EMS — and, secondly, that, although short-term fluctuations in currency might be smoothed out by membership of the EMS, some companies say that that short-term risk can be borne by covering oneself in the forward market whereas a much greater risk, to which one is subjected in the EMS, is realignment where volatility can be intense, sudden and unpredictable.
  The only compelling argument in favour of membership of the EMS is that it provides a hedge or some certainty against short-term instability in the currency. There has been considerable short-term instability in Britain during the past few years. I accept that there is a strong argument to the effect that being in the EMS might cut such speculative pressure, but I would put qualifications even on that claim. There is no clear evidence, for example, that day-to-day volatility of exchange rates damages trade flows. There have been numerous attempts to find such evidence, but it has not been found.
  Mr. Ian Wrigglesworth: What about the Confederation of British Industry?
  Mr. Blair: I shall deal with its stance shortly.
  The level at which we fix the exchange rate is obviously extremely important, and there is still tremendous disagreement about what its level should be. The most important qualification on our ability in the EMS even to withstand short-term pressures is that Britain has a petrocurrency. With great respect to the right hon. Member for Glasgow, Hillhead (Mr. Jenkins), he has not dealt fully with the consequences of that provision.
  The first consequence is that the EMS is essentially a deutschmark bloc. It could be said that we would be putting Herr Pöhl of the Bundesbank in 11 Downing street. He might be preferable to the present incumbent, but we should yield our freedom of action. With regard to Britain as an oil exporter, cheaper oil for Germany would put up the deutschmark. If there is a drop in oil prices, cheaper oil prices mean that the deutschmark lifts and, conversely, that the pound is subject to downward pressure. That tension would be built into the system once sterling joined the EMS.
  Perhaps most important of all is that we do not prevent speculation as a result of oil price fears by joining the EMS. Much of the clamour for joining the EMS during the past few months results from people thinking that the

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  exchange rate crisis in January last year and the flutters of the past few weeks would be cured by joining the EMS. That is quite definitely not so.
  The alliance says that we should go into the EMS forthwith. It said that we should go into the EMS forthwith last year. It has been saying that we should join the EMS forthwith for years. If we had joined the EMS last year, the best rate that we could have got in against the deutschmark was DM 3·60 or DM 3·50. Many suggest that we would not have been able to negotiate such a rate. The current rate is DM 3·33. When the oil price exerted pressure on the pound last week, the Government, as a member of the EMS, would have been shoving up interest rates and I guarantee that if interest rates had gone up last week, we would have had an alliance motion criticising the Government for raising interest rates. They cannot have it both ways. Penalties are involved and those penalties should be clearly understood.
  The problems is not merely the lack of a guarantee that we will not have interest rate crisis of that type. I would go further than that. If the price of oil falls, it is rational that our exchange rate should be allowed to fall, because the price of a major export item is falling. That difficulty, which faces Britain because of its petrocurrency status, does not fit into the circumstances of the other nations in the EMS.
  Contrary to what has been said, criticisms of the Government's interest rate policy could be made irrespective of membership of the EMS. January 1985 is the obvious example. The Government appeared to be giving the lie to the market that they would not intervene to prop up the exchange rate. Currency speculators had a one-way bet against our currency. The exchange rate plummeted and the Government had to compensate for that initial period of inaction by jacking up interest rates by 4 per cent. The Government can be legitimately criticised for not cutting rates last summer. They had the opportunity to cut them and their starting base would have been that much less.
  When we consider the Government's policy during the past week, we cannot criticise them for not being in the EMS and also for allowing the exchange rate to slide. In many ways is is easier to understand the case for the Government, rather than the Opposition parties, wanting us to join the EMS. Joining the EMS implies a fiscal and monetary policy convergence. The fiscal and monetary polices of the German Bundesbank are tight. One would have thought that the alliance, which proposes a fiscally expansive policy, would be the last party to want to join the EMS. There is a clear argument for the Government wanting to join the EMS.
  The argument for the EMS is much stronger if there is an agreement, or the prospect of an agreement, on the fundamentals of macro-economic policy between the member countries. The exchange rate is important, but it is a residuary, not a fundamental. If we join the EMS, it is much better to be certain of the agreed, common policy objectives between the member countries. In relation to the importance of international monetary stability, the initiatives of the Group of Five are of greater significance than what has happened within the EMS. The G5 initiative that forced down the dollar was more important than what was happening in the EMS. The G5 countries criticised Germany for pursuing too tight a fiscal policy, but that is the fiscal policy with which we would be aligning ourselves if we were to join the EMS.
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  Whether it be the EMS or the G5, acronyms are no substitute for analysis of Britain's economy and its problems. The central and fundamental problem is how to prepare for post-oil Britain. Flutters of speculation against our exchange rate are warning signals. We either build up our manufacturing industry to generate the wealth that we shall need when oil production declines, or we face a poor and unstable future. No amount of juggling at the margin will eliminate the central dilemma. The Labour party, and only the Labour party, has the political will and economic sense to address the dilemma.
  6.23 pm
  Mr. David Howell: I hope that the right hon. Member for Glasgow, Hillhead (Mr. Jenkins) will not be too disappointed that this subject does not have the same magnetic, attractive power to fill the Benches as some of the subjects that we discussed last week. However, the issue is important and I hazard the view that the subjects for discussion today will be more influential in deciding the political future and the political outcome of the general election than many of the subjects with which the House has preoccupied itself in recent weeks.
  The alliance has given us a good opportunity to consider crucial issues. I agree with the hon. Member for Sedgefield (Mr. Blair) that perhaps the motion itself is rather marginal, but we have been given the opportunity to consider central issues for politics and the future of Britain.
  I wish to take that opportunity in a way of which the right hon. Member for Hillhead may not approve. I wish to consider the events of the past few days. My right hon. Friend the Chancellor of the Exchequer and the monetary authorities should be warmly congratulated on the way in which they have succeeded in managing a tricky passage in international monetary affairs. They were right to allow the exchange rate predominantly to take the strain during recent weeks rather than giving in to the panic cries for further hikes in interest rates. That would have been a great mistake.
  Oil production will come off the peak during the next decade and oil prices will go down, so it is a natural longterm adjustment for the exchange rate to move more favourably for our exporters against the deutschmark and possibly the dollar. It would be absurd to try to counteract that effect. The Chancellor of the Exchequer has made several penetrating speeches looking forward to the era when we are no longer such a major oil exporter, and describing how the adjustment will work.
  It would be wrong in the short term to let gyrations in the oil markets overwhelm our domestic policy priorities. We are not an oil-producing nation in the same sense as OPEC members. Oil is only a small fraction of our GNP and a small fraction of our exports. We have discussed sterling as a petrocurrency. That may have been the perception, but it is not a petrocurrency. It is wrong to allow our domestic policies and priorities to be fazed by the oscillations in the oil market. Those will be violent because we have a very market-like market for oil and there is none of the orderliness that existed when the American giants controlled the oil markets before 1973. The prices will swing violently.
  It would also have been absurd to take the long-term and desperate action to shore up the pound in the face of oil market gyration, because the oil price will rise again in a week or two. OPEC members are now doing what they

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  said they would. They believed that they could bring Britain into talks if they lifted the lid off Saudi production and allowed it to rise a few million barrels. The oil price would then fall and Britain would realise where its interests lay.
  That was the openly declared threat, but it is based on an entirely wrong perception. Britain will not talk to OPEC. Even if it did, little would be achieved. It would be a bad mistake for Britain to become involved in bilateral talks with OPEC now. I was surprised when the hon. Member for Stockton, South (Mr. Wrigglesworth), at Prime Minister's Question Time yesterday suggested that we should have talks with OPEC about the price of oil. It is not only in the long-term interest of Britain to have lower oil prices.
  Even if we had talks and the Government were in control of North sea oil production—which they are not, because the Goverment do not control production levels —talks would not do any good. Suppose Britain and the Norwegians could get together in the North sea and knock 300,000 barrels off the oil price. That would make no difference, because the world is glutted with oil. The OPEC leaders have at least been frank. They say that they are not interested in figures, but in gestures. They want a gesture, which would be pointless in terms of oil market stability. Their desire for a gesture has more to do with the internal politics of OPEC and their own sensibilities. So we could be dragged into a pointless set of discussions and we should be forced to influence oil production in the North sea and change unnecessarily the entire basis upon which North sea impetus has been achieved.
  It is worth reflecting that if oil prices go down to $15, as Sheikh Yamani says, and there is then a perception that they will rise again, to about $20, as they almost certainly will, a great many oil companies will try, if they can, to slow oil production from their platforms. One does not need to be a Government to reach that decision, one just needs to be an oil company. In addition, I believe that it is correct to say that North sea oil production will peak this year and may come off the top. So if OPEC watches the figures, it will see lower North sea oil production anyway and take that as a gesture, without any need for talks, bilateral agreements or Britain being drawn into the OPEC morass.
  There is one case where there might be a need for talks. If the oil price goes through the floor, Mexico and Nigeria default, Venezuela goes bankrupt and the world's banking system needs shoring up because of non-performing energy loans, then we should indeed need talks. They would not just be talks with Saudi Arabia or OPEC and Britain but among all the leading financial countries, oil producers and oil consumers to contain and co-ordinate action against a world financial crisis. Those are not the talks for which the Saudis are calling. They are not the talks for which the hon. Member for Stockton, South was calling yesterday — which would be pointless and hopeless. They would be part of "gesture" politics which would gain us nothing and lose us a great deal.
  That is the background against which the British Government's policy has been steady and correct in recent weeks. I welcome that fact.
  We must consider what the next move is and whether full membership of the exchange rate mechanism has a part to play in it. We must recognise that we need to wait
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  for the oil market to calm down. I believe that oil prices will increase in a week or two, not least because the other, non-Saudi, OPEC members are emitting cries of agony at seeing their revenues disappear. Their market share is not increasing and their budgets are all in a rough condition. We must wait. The motion is, in a sense, premature.
  If we can join the exchange rate mechanism at a deutschmark rate of about 3·40 — a little higher than now—that would be a sensible and rather limited step. I am not one of those who believe that we should move towards the more fanciful idea of monetary union. I am not arguing for that. There is a limited package which would be sensible from the point of view of this country's economic objectives and financial goals—for Britain to join the exchange rate mechanism, for the French and the Italians to do away with their exchange controls and for the Germans to recognise the need for a greater use of the ecu. That would provide a more stable environment in which we could then operate.
  Hon. Members have asked about the oil side of things. I have conceded that that is at present a difficulty, but we should not exaggerate it. Although it is on a much smaller scale, the guilder is in the European exchange rate mechanism. Oil and gas production form a much higher proportion of Dutch GNP than oil and gas production do as a proportion of British GNP. Holland is much more of a petro-country in that sense than we are. However, that has not produced all sorts of unthinkable and insuperable problems for the guilder. The Dutch have managed perfectly well. Oil is a problem, but not an insuperable one.
  It would be putting the matter much too high to say that joining the exchange rate mechanism would be a major advance, but I believe that it would help. The hon. Member for Sedgefield said that we would have had to raise interest rates. If, in the coming months, we were in the exchange rate mechanism, the downward pressures on the exchange rate and the upward pressure on interest rates would be somewhat modified. Pressure would not be avoided. He is correct, but it could be somewhat modified. We should be in a loose harness and the international market would have a little more understanding of where we stood on our exchange rate policy. Joining the European exchange rate mechanism would not obviate the need to have to resort to interest rate and exchange rate movements and possible realignments from time to time. I am not suggesting that.
  There is also a larger stage on which those matters must be judged and even more important issues may need to be resolved. Joining the exchange rate mechanism might be relevant to our local problems in Europe, but the real issues are the ones that the Group of Five has tried to address. That group is interested in international interest rates disarmament and having greater exchange rate stability worldwide between the dollar bloc and the European bloc — whether it is deutschmark-sterling or just the deutschmark bloc—and the yen bloc.
  If I had heard the right hon. Member for Hillhead speak more on those aspects and air some thoughts on the way in which those three blocs could integrate more closely so that we might have exchange rate bands between the yen, the dollar and the deutschmark-sterling bloc which would allow rather more orderliness than we have had over the past two or three years, I should have been rather more attracted to his proposition that, within that, we should join the exchange rate mechanism.

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  In sum, therefore, we have been correct to avoid the huge hike in interest rates for which some people were calling. We should not let oil price oscillations overwhelm us. We should not speak to OPEC countries about trying to rig oil prices in a way unfavourable to all industrialised countries. We should let matters calm down before addressing the issue of the exchange rate mechanism and the way in which any developments there would fit into larger plans for a more orderly world pattern of exchange rates as between the three major blocs, as G5 has been discussing.
  6.36 pm
  Mr. Ian Wrigglesworth: I am somewhat surprised that the right hon. Member for Guildford (Mr. Howell) came to the conclusions that he did about my remarks on the desirability of closer cooperation between the yen bloc, the United States bloc and the European bloc. That type of co-operation, which G5 has been able to bring about and which I am sure all Members of the House will support and welcome, would be much easier and much more effective if the European bloc to which he referred was more effective in running its activities than it is at present.
  A broad concensus has developed in this country, which extends to Conservative Members across a wide spectrum of industry and the City, that a move by this country to join the exchange rate mechanism of the European monetary system would help with the development of that system and make it more effective. It would make it more possible for the United States, Japan and Europe to co-operate with monetary and exchange rate matters. I am surprised that the right hon. Gentleman came to a rather unclear conclusion on taking a further step and going into the exchange rate mechanism.
  One of the things that depresses me about the comments of the hon. Member for Sedgefield (Mr. Blair) and others is that they seek to pursue a chimera of national sovereignty, as if we could control affairs in this country's economy on our own, with no regard to what was happening in other parts of the world.
  The implication of what has been said by those who oppose the proposal contained in the motion is that when we can somehow remain outside the EMS or discussions with others, whether with OPEC on a managed fall in oil prices or with our partners on the other side of the Atlantic, and insulate ourselves against being buffeted by world economic events. All recent evidence is that we cannot do that.
  Mr. Blair: Let me reassure the hon. Gentleman. I made no such claim. Obviously we cannot protect ourselves from all the buffets of the world economy, but, with respect, he is suggesting that we should join the EMS forthwith. He must say how he could pursue alliance fiscal policy within the constraints of the EMS and a particular German fiscal policy.
  Mr Wrigglesworth: The hon. Gentleman must tell the House whether he would prefer to submit himself to constraints imposed by the IMF, as former Labour Chancellors of the Exchequer have done when they have had to go cap in hand to it, or whether he would prefer to work in co-operation with our partners in Europe, and create greater stability regarding inflation, exchange and interest rates, and not have to go cap in hand to the IMF.
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  It is surely better to work with our partners in Europe to achieve co-operation, as we are doing in other spheres. That will mean giving away some of our sovereignty for the benefits that accrue, but the benefits from joining the exchange rate mechanism outweigh any disadvantage from giving up a limited amount of sovereignty and submitting ourselves to the disciplines of full membership of the EMS.
  Many people believe that those disciplines would be wholly advantageous to us, not only because the Government would have to ensure that the wild fluctuations that occur do not take place, but because the markets would have greater confidence in our position, knowing that we have accepted the constraints necessary for being a member of the EMS and that we have the support of the system in withstanding the pressures which force fluctuations in exchange and interest rates.
  In recent years, the operation of the EMS has involved a considerable convergence of economies, and of success in getting greater conversion, especially of inflation and interest rates. There have been fewer realignments and stronger reserves. In 1985, the average inflation differential was 2·2 per cent., compared with 6 per cent. in 1980. Interest rate differentials have narrowed to 4 per cent. since the last major realignment in 1983. Ironing out fluctuations in that way would be enormously beneficial to the United Kingdom. That is why the Confederation of British Industry, the Institute of Directors, the Governor of the Bank of England, and a variety of other organisations and individuals advocate that we should join.
  The Economic Secretary and the right hon. Member for Guildford (Mr. Howell) believe that the influence of the oil sector on the economy is exaggerated. It may have been somewhat exaggerated, but hon. Members will surely realise that it is not the scale of its impact—the 6 per cent. — but its effect on the margins. It affects our balance of payments, and the revenue going to the Exchequer. The contribution to our balance of payments and the revenues going to the Exchequer from oil may not be large in relation to the total, but they are of fundamental importance on the margins.
  Nothing demonstrates that more clearly than the way in which the freedom of the Chancellor of the Exchequer on fiscal adjustment and his ability to cut taxes has been limited. Only recently he said that that was a major item in his forthcoming Budget, but the important contribution from the oil sector is not coming. Therefore, it is of importance in that respect. It is of even greater importance for our balance of payments. The oil sector of the economy will put pressures of that sort on our exchange rate, and it is an important factor, which the market is right to take into account.
  I join the right hon. Gentleman in congratulating the Bank of England and the Treasury on intervening to resist the pressures of the past week. It is a pity that they have not done so on many past occasions when the money market was looking for a lead from the Bank of England, but was not getting it. On many occasions we could have resisted the pressure for higher interest rates, if the bank had given a clear lead and the Treasury had allowed it to do so. I welcome the new policy of the Bank of England and the Treasury, of intervening in the money markets to keep interest rates down. However, they would be better

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  able to do that if we were members of the exchange rate mechanism of the EMS, and had its support in resisting those pressures. The pressures will not go away.
  Considering the present levels of exchange rates, it would be particularly appropriate to join. At present the index is standing at 74. The deutschmark rate stands at 3·33 and the dollar at 1·39. At various times in the past Ministers have argued that we should not join because of the dollar or the deutschmark, but surely the truth is that the Government are unwilling to give up what they see as their control over our economic affairs. I wish that they, and particularly the Prime Minister, would admit that.
  That sounds a grand nationalistic thing to be doing, and the hon. Member for Sedgefield made much of it, but it has not done much good recently. It has not prevented our manufacturing industry from being hit for six by the exchange and interest rate policies that the Government have pursued. That is hardly evidence that staying outside the EMS since 1979, and particularly between 1979 and 1981, has been good for manufacturing industry. If the hon. Gentleman has a solution to that problem while remaining outside the EMS, and believes that his policy on interest rates, and particularly exchange rates, can resist those pressures and not put further impediments in the way of manufacturing industry, he is living in cloud cuckoo land.
  I hope that the House will see the wisdom of our suggestion, as many organisations have. We wish to seek greater international co-operation. The world of trade and commerce, especially the money markets, is becoming increasingly international, partly for technological reasons. It is vital that the political institutions of the world keep up with the rapid pace of development of the international financial markets, and of the international trading, business and industrial world. We do not have the mechanisms to cope with much of what is going on in the world economy today. Our membership of the EMS would provide us with greater control and influence over those events, to the benefit of trade and industry throughout the world.
  The one message that I constantly receive from all manufacturing industry, from talking to individual firms or their representatives at the CBI and Institute of Directors, is not that they are terrified about a particular exchange rate or interest rate level, but that they need stability and certainty so that they can plan. That is what the exchange rate mechanism and membership of the EMS would give us, and for that reason we hope that the House will support the motion.
  6.49 pm
  Mr. Richard Ryder: I have listened catefully to the hon. Member for Stockton, South (Mr. Wrigglesworth), and if I did not have a view on the European monetary system I would not be able to form many conclusions from doing so.
  The debate has understandably been dominated by the arguments about whether we should enter the EMS. We would be deluding ourselves if we believed that problems with high interest rates and volatile exchange markets could be overcome simply by joining the EMS. That is because the dollar is still the chief international currency
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  and it is its effect on the remainder of the world economy that has a much greater impact upon interest rates and exchange rates than anything else.
  We should be considering two main factors in detail. First, we must ensure the continuing success of the G5, and, secondly—here I agree with my hon. Friend the Member for Birmingham, Selly Oak (Mr. Beaumont-Dark) who is not in this place—that we must try to persuade the Americans to ensure that all decisions taken in Washington on the future of their domestic economy are reached only after the closest consideration of the consequences which those policies have upon the global economy as well as their own.
  The Plaza initiative, to which many hon. Members have referred, has been only a partial success. My hon. Friend the Economic Secretary has said that the yen and the deutschmark have risen by about 17 or 18 per cent. against the dollar since the Plaza initiative. The meeting of G5 in London only two weeks ago reaffirmed an intention to try to ensure that the American dollar did not rise again. After this meeting there was some anxiety about interest rates, a feeling that perhaps orchestrated action could have been taken to bring them down.
  Some people overlook the fact that it is much easier for Governments to intervene in exchange markets than it is for them to co-ordinate cuts in international interest rates.
  The dilemma facing G5 is that interest rates low enough to provide healthy economic stimulation may not be high enough to contain inflation. Solving that dilemma is a key issue facing every western nation including our own. The solution cannot be found by the British Government alone; the Americans must take the right decisions about their domestic economy.
  The United States problem, the huge budget deficit to which many hon. Members have referred, is fuelled by a tax system that subsidises borrowing by making interest expenses tax deductible. That results in high United States interest rates and they cause many of the difficulties we are debating. As we know, high interest rates attract foreign capital and lead to a high dollar. The risk of world recovery faltering and creating protectionism outweighs the immediate prospect of a surge in inflation because the world is awash with gluts. There is high unemployment, an oil glut and a grain glut, and commodity prices are falling.
  Now is the moment for the international economic community to take decisions that will bring down interest rates. If carried too far, interest rate cuts, I accept, could rekindle inflation, so we must look for modest cuts in interest rates in America. Interest rate cuts there are vital for Britain and for other countries in the western world. As guardians of the major global currency, the Americans have an enormous responsibility to the rest of us. But if the global economy does not prosper, nor do American farmers, steelworkers and car workers.
  The realisation of that fact has led to a new and refreshing view in Washington of exchange and interest rates. The new view in Washington is leading the United States towards tightening its fiscal policy at the same time as having a much easier monetary policy. That is confirmed in recent speeches by Paul Volcker and many of the people who surround him, whether they be traditional Keynesians or supply-siders.
  If Britain wants firmer, stabler exchange rates and lower interest rates, a way for the Government to achieve that end is to maintain their pressure unilaterally, through

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  G5, and by any other means possible on the American Administration to adopt a looser monetary policy and a tighter fiscal policy. The consequences of that approach may be that British businesses and home owners will gain from lower interest rates.
  I may be in favour of Britain joining the EMS, but I cannot go as far as the alliance and say that if Britain enters the EMS it will make all the difference the alliance claims. But less volatile exchange rates and lower interest rates can be brought about by continual efforts in the United States to produce a tighter fiscal policy and a looser monetary policy.
  6.58 pm
  Mr. John Maples: One of the reasons usually paraded in arguments for joining the EMS is that the use of domestic interest rates here to protect the currency would not be so necessary. Another argument introduced by my hon. Friend the Member for Mid-Norfolk (Mr. Ryder) is that our interest rates are effectively jerked around on the end of American interest rates and the American deficit.
  I suggest that there are some domestic factors in the reasons why our interest rates are so high. It may be that we can do something about that and stop the damage that high interest rates cause to productive investment by discouraging it. Perhaps we can take some action on the domestic front without looking at the international ramifications. Interest rates in any economy must surely be dictated by the relationship of the demand for credit and the supply of savings available. An economy with consistent double digit interest rates is a fair indication that the demand for credit is excessive in relation to the supply of savings.
  The bank lending figures—credit expansion figures—for the United Kingdom are deeply worrying. Bank lending is increasing at about 16 per cent. a year. That is considerably faster than GDP and inflation. An interesting contrast is that in West Germany domestic credit expansion is running at about 3·7 per cent. If we compare other figures in the two countries, we will find that West Germany is doing rather better than us.
  Of that credit expansion, a disproportionate amount goes to financial institutions, property, house purchase and consumer credit, and nothing like enough of it goes into productive investment. One of the reasons for that is that consumer credit and the credit that goes to financial institutions and into property purchase and short-term investment deals is not very sensitive to interest rates.
  Consumer credit is almost insensitive to interest rates, but it is sensitive to income flow and whether or not people can afford the weekly or monthly payments. The fact that people are prepared to borrow on their credit cards at 33 per cent. interest is evidence of that insensitivity to interest rates. Long-term productive investment decisions are sensitive to interest rates. Bank lending is growing far too fast, and that is one of the factors that is creating the high interest rates in Britain.
  One looks behind that for another reason why bank lending is growing so fast and why it is resulting in high interest rates. Not long ago we had moderate interest rates in single figures for a long time. Then in the mid-1970s we started to get double digit interest rates. A variety of reasons were paraded for that. Most of them proved to be unpersuasive, such as the public sector borrowing requirement being responsible for driving up interest rates.
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  I find it difficult to be persuaded that marginal differences in the PSBR in the context of all the credit creation that goes on will have much effect. At one time there were arguments about inflationary expectations. I think one can now measure those expectations fairly accurately because there is an index-linked security market.
  One factor, though not the only one, has been the rapid deregulation of credit markets and the banking system. The old banking system was a rationing system; bank managers said no. It was extremely difficult to borrow money. Credit was rationed effectively by a limited and small banking system saying no to people who wanted to borrow. But that has changed. Deregulation has resulted in banks operating in an entirely different way. They actively and aggressively sell credit. There can seldom have been a time when it has been easier to borrow money.
  Banks lend and immediately create an asset and a liability on the balance sheet. So long as banks keep their capital ratio intact, which they seem to be able to do fairly easily, they can increase credit creation all by themselves. Some money leaks out of the system and they have to borrow that back on the inter-bank market. That is how interest rates are driven up by the deregulation of banking.
  We now have a system in which credit is rationed only by interest rates. Therefore, there is bound to be a dangerous excess of credit. Because a large number of people at the borrowing end of the series of transactions are not influenced by interest rates, as is the case with consumers and short-term investment deals, the people who are sensitive to high interest rates are being jerked around at the end of that series of transactions. The problem will get worse. The big bang in the City will result in a revolution in corporate lending. The growth in the number of foreign banks operating in the United Kingdom is not likely to stop. Building societies seem to be turning themselves into banks and credit organisations. That will magnify the problem
  This is only hypothesis, but high interest rates have been obvious in the United Kingdom and the United States where the deregulation of the banking system has gone furthest. One does not see the same phenomenon in other countries such as West Germany and Japan. I am not in any way against deregulation of financial markets. The benefits that it has brought to London as an international centre are enormous, and I would not want to see us going back, but it would be a terrible mistake if we did not appreciate that one of the consequences has been the excessive creation of credit, with resulting high interest rates.
  We should try to see whether we can do something. Inflation and high interest rates affect productive investment decisions. That is where we want the nation's savings to go, and not into consumer credit, which is financing the import of consumer electronic goods.
  We should consider carefully whether we need a credit policy that would be a little stricter in limiting consumer credit expansion and the kind of lending that is done to finance short-term property and securities dealings. In the past we have had such mechanisms as high deposits for hire purchase arrangements, and larger repayments on credit card bills. It is ridiculous that the minimum repayment on a credit card bill should be just about 2 per cent. of the total. It would be easy to introduce minor regulatory rules which would make consumer lending less popular. If we do not do something like that, high interest

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  rates driven by that kind of lending will persist and will adversely affect both inflation and the productive investment decisions that we make.
  7.4 pm
  Mr. John Browne: This is a most important debate and I am only sorry that the subject will not have a longer airing. In the 1970s we began an era, of which this era is a continuation, of massive inflation on a historic basis, with double digit figures in almost all developed countries. There was massive volatility in the price of major commodities, such as oil, as has been mentioned in the debate. There was also a massive rise in the level of international debt and massive speculation and volatility in exchange rates, so much so that the London market and most of the other currency exchange markets reckon that 85 per cent. of the business is speculation and only 15 per cent. relates to real trade transactions.
  When this era began in the early 1970s, the dollar gold exchange standard was unilaterally broken by the United States. If it had not been for that, would it have been possible for the developed western world to pay the high oil prices?
  The second event of major significance in the early 1970s was that the United Kingdom unilaterally floated sterling. It was followed by other major countries. So the era of floating exchange rates of no real numeraire began. Massive abuses started, resulting in huge volatility in commodity prices, huge inflation and huge speculation on foreign exchange markets.
  Now we have an era of competitive trade. We have a trade war that should concern us all deeply. There are moves in the United States to protect its trade. That is very dangerous, particularly for a country such as ours that depends so much on its earnings from international trade. Despite the existence of the General Agreement on Tariffs and Trade and the apparent system of free trade agreements that pervades the world, there is a trade war under the table. It is done surreptitously, by the competitive devaluation of currencies. That is the real danger. For any of us to believe in free trade when at the same time we have floating exchange rates is to believe in pure fantasy.
  The problem is serious and urgent. Right hon. and hon. Gentlemen have said what a good thing it is to have common policies. In many areas of trade finance, such as the Export Credits Guarantee Department, on the surface there seems to be an agreement on a norm. When we examine it, in countries like France interest rates are subsidised so that French companies can borrow deutschmarks at 7 per cent., lend them on to finance trade to Russia at 7·8 per cent., the Russian maximum; the exchange rate is guaranteed to that company by the Government. It is all done under the table. So French companies become very competitive in trade between western Europe and the Soviet Union.
  The root cause of all the problems is a lack of integrity in international money. The Government have reestablished integrity in our domestic money by reducing inflation to historically low levels, now getting towards 3·25 per cent. The Government must now urge the reestablishment of international monetary integrity by seeking the restoration of a gold exchange standard for the United States dollar.
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  Hon. Members have ridiculed what I said in an intervention; they have said that we cannot go back to the gold standard. The gold standard has four gradations. I would be the last to urge that we should go back to the full gold standard. That would be catastrophic to today's economy. But it is essential that the most lenient of the gold standards, the gold exchange standard which existed until the 1970s, is restored.
  The Government should, first of all, move to a restoration of fixed exchange rates and not go to the halfway house, what I see as a gimmick, the EMS, because the EMS is not really a group of fixed exchange rates, but a bunch of floating exchange rates, floating without any real integrity in the value of the money, still allowing commodity prices to rise in terms of a bunch of EMS currencies. So I understand the arguments of the hon. Member for Stockton, South (Mr. Wrigglesworth) who spoke for the alliance and indeed the hon. Member for Sedgefield (Mr. Blair) who spoke for the Opposition; but I believe that the EMS is a gimmick and that we should not be fobbed off with it.
  I urge my hon. Friend to take on board the fact that this is a very urgent problem and a very serious one in terms of world trade, on which we all depend. Now that the United States is adopting a much less insular approach to international monetary affairs, will the Minister urge it to restore the convertibility of the United States dollar on the gold exchange standard and to move towards an era of fixed exchange rates? The Government have been very successful at home in restoring monetary integrity. Will they now turn their attention to restoring international monetary integrity?
  7.11 pm
  Mr. Richard Wainwright: The contributions to this much foreshortened debate have shown that the specific motion moved by my right hon. Friend the Member for Glasgow, Hillhead (Mr. Jenkins) has been of service to the House and, I hope, to many outside. It has provoked some interesting responses from the Front Benches. I do not think that I am alone in detecting in both Front Bench speeches a whiff of the lecture room or of the tutorial rather than a facing up to the grim conditions of the foreign exchanges and all the consequences of severe misalignments and continuous volatility for our trade, about which the hon. Member for Winchester (Mr. Browne) has just spoken eloquently. The whiff of the tutorial extended also to the reflective speech of the right hon. Member for Guildford (Mr. Howell).
  Let us be quite clear: in choosing this specific motion this afternoon, the alliance was not indulging in some sort of academic exercise. We are concerned, as I am sure Members on both sides of the House are, at the chaos in parts of the foreign exchanges and at the very severe consequences for our own trade, both export and import, and that of many other important industrial countries.
  The Economic Secretary gave us a lecture, to which we have become accustomed in the past six years, on the bipolarity which British membership of the exchange rate mechanism would introduce, along with the deutschmark. He said that this bi-polarity must give us pause—those were his words. The Government have been pausing for six and a half years or, to use the much more graphic illustration of my right hon. Friend, have been moving up and down in the lift, resolutely refusing to get out at any floor.

  1003
  I must ask the Economic Secretary whether, on reflection, he thinks that it is good enough to tell the House that there is this well-known problem of bi-polarity which still gives the Government pause. I hope that when he replies, necessarily briefly, he will say what, for the Government, would constitute the right time and the right conditions for Britain to enter the exchage rate mechanism. The Government cultivate a liberal air of saying that they do not exclude it, that their minds are open and so on; but they have never at any time defined the conditions under which they think that it would be right to join the exchange rate mechanism. The Economic Secretary owes that reply to the House this evening.
  The hon. Gentleman also said that there was no doubt about the Government's European commitment, and that staying out of the ERM did not cast any doubt on that. Here is the Community with apparently strong British Government support, trying to create a truly free trade area in the Community, with a genuinely free flow of goods and services across the frontiers inside the Community. How can that become a reality if a leading member of the Community persists in reserving to itself alone the right to clip its coinage, while the rest of the Community play according to the rules? Our European commitment is damaged by this vague and unsatisfactory attitude to the exchange rate mechanism.
  The hon. Member for Sedgefield (Mr. Blair), who began by carefully preserving the possibility of the Labour party's coming to terms with some kind of European monetary system, nevertheless failed to appreciate or to acknowledge that the strength of the whole of the EMS and its exchange rate mechanism is substantially greater than the sum of its parts. The confidence that the EMS generates and bestows on each of the currencies involved is greatly enhanced by the fact that it is a corporate body with what is now an established record of sucess, and with large currency reserves.
  Again, he showed the defeatist attitude which also affects the Government, that in any discussions with the Bundesbank, which, of course, would have to become very close and continuous once we joined, in any such confrontation, we would be bound to lose out at every turn. It would not be so much a dialogue as being underneath a steamroller. There is no justification for that attitude. Over the years, the Bundesbank has taken a civilised attitude, and there is no reason to suppose that we cannot keep our end up in negotiations with the Federal Republic.
  The right hon. Member for Guildford (Mr. Howell) may have been justified in congratulating the Bank of England on its success so far in avoiding a further rise in interest rates, but he did nothing to dispel the widespread public and acknowledged confusion about the aims of the Government's exchange rate policies. The Government are at last admitting—they had it dragged out of them—that they have an exchange rate policy, but they refuse to tell us what the policy is or how they intend to carry it out.
  A further trend in the debate which I should like briefly to mention is to try to set up—
  Mr. John Browne rose—
  Mr. Wainwright: I am sorry, but I am pressed for time.
  —to try to set up G5 meetings, which I am sure are welcome on both sides of the House, as in some way an
  1004
  alternative to British membership of the exchange rate mechanism. G5 is nothing of the sort. The two things are not mutually exclusive. Some would say that full British membership of the EMS would enhance the opportunities of G5. I could not understand the speeches which tried to create that exclusivity, especially the interesting speech of the hon. Member for Mid-Norfolk (Mr. Ryder).
  We are in great danger of being landed with not only very high interest rates—even if they go no higher—and the phenomenally high real interest rate, which is a great burden on our industry, costing British business, according to the CBI, about £250 million a year for every one point by which interest rates advance, but, in addition to that burden, having a rapidly falling sterling exchange rate as well. It is the twin danger which threatens us. It seems to us that an explanation of current Government policy by the Chancellor of the Exchequer is long overdue. Such an explanation must take into the account the fact that the British Government alone — and equally the Government of the Federal Republic alone or the French Government alone—cannot properly take on the forces of global foreign exchange speculation.
  Our reserves are far too small. At the end of last year our published reserves were even smaller than those of Switzerland and our own economic strength in general is too slight to take on this massive worldwide speculation with the huge flows of investment money which now threaten the order of the foreign exchanges.
  It is only within a wider framework of currency support that we can hope to get rid of at any rate some of the gross misalignments which are such a hindrance to trade and to get rid of some of the volatility which is particularly inimical to British exports.
  We hope that this curtain raiser of a debate will be only the first of discussions in the House on how an urgent situation—much more urgent than either Front-Bench spokesman implied this afternoon — can be tackled resolutely so that our hard-pressed traders may have a chance.
  7.20 pm
  Mr. Ian Stewart: With the leave of the House I should like to add a few words at the conclusion of the debate. I do not want to be accused by the hon. Member for Colne Valley (Mr. Wainwright) or anybody else of lecturing the House, let alone of doing so twice in one evening, and I shall endeavour not to open myself to that criticism.
  Let me take one point by example. I referred to bipolarity. That is a strange word but one with important meaning. If sterling was in the exchange rate mechanism of the EMS there would be two major international trading currencies within it, which would be a change from the present system. I referred to this partly because it was a point only fleetingly touched on by the right hon. Member for Glasgow, Hillhead (Mr. Jenkins) and it is a practical consideration. I do so also to show that one needs to take into account a wide number of practical considerations relating to the operation of domestic monetary system and international monetary markets.
  I need not apologise for raising the issue, nor at this hour should I repeat the statement of the Government's stance on the matter which I made in my opening remarks. All I would say is that in response to the intervention of my hon. Friend the Member for Grantham (Mr. Hogg) I said something about the impossibility of setting out in advance some sort of shopping list — I do not know

  1005
  whether he was still using the metaphor of being in a lift in a store. But to go into a store with a shopping list, regardless of what might be found on the different floors, is a rather confusing exercise.
  Mr. Wainwright: Is it good enough for the Government, year after year now for six and a half years, to be saying that there may come a time when we should join but that this is not the right time? Should not the Government by now tell us what, broadly speaking, would constitute the right time and conditions for British membership?
  Mr. Stewart: I am sure that the hon. Gentleman would like a cut and dried list of factors and the relative weight to put on them. That is not the way in which we approach the matter. We have said—I have tried to explain why this afternoon—that a number of different matters have to be taken into account and it is impossible to set out in advance the way in which those would have to interact in order to make a decision to enter the exchange rate mechanism. I am sorry to disappoint the hon. Gentleman but that is the position. That is a perfectly reasonable position for a responsible Government to take in this difficult matter.
  The debate has done a number of valuable things. It has given us a useful insight into the thinking of the Opposition. I commend the hon. Member for Sedgefield (Mr. Blair) on his vigorous contribution to the debate. But the debate has also shown that there are strong countervailing arguments on this difficult question. The very fact that views have been so different from various speakers, regardless of from which side of the House they have spoken, shows that underneath the arguments there are real considerations of difficulty which work in opposite directions. It is because of that that it is not and would not be a simple decision.
  One of the main questions has been about the convergence of economic policies and on that I am glad to say that there has been considerable progress. Our success in reducing inflation and bringing it closer to the rate of our partners in the EEC has been an important advance and was not present five or six years ago.
  Equally, difficulties remain. There are difficulties with the dollar problem. My hon. Friend the Member for Mid-Norfolk (Mr. Ryder) drew attention to the questions which those raised for domestic American policy. But more particularly — this has been a trend throughout the debate—the position of oil and oil prices in relation to money markets generally and sterling in particular, particularly against the background of what has happened in the past week or two in the market, are central considerations. I commend the remarks of my right hon. Friend the Member for Guildford (Mr. Howell), which will repay study.
  The conjunction of the oil factor with the international position of sterling as a much more widely traded and widely held currency than any other of the European countries apart from the deutschmark creates different circumstances for sterling as distinct from the currencies of other member states that have been called in aid of various arguments this evening.
  The right hon. Member for Hillhead referred to Britain's semi-offshore status in relation to the EEC—
  Mr. Roy Jenkins: Semi-offshore mentality.
  Mr. Stewart: I got part of the phrase right.
  It is not a question of that sort of mentality. The right hon. Gentleman also referred to the last great European initiative of the Community. That was the last in time and therefore it was a pity that we could not follow it. Those are not the sort of arguments that should guide us in considering a question such as this. I hope that there will be an opening of the internal market of the EC—an area in which the United Kingdom has been one of the prime movers. But, again, that is not a matter which should be considered for symbolic reasons or as a gesture. Like every other question of this kind, the decision should be taken on its merits. It is a complex financial question with practical arguments on both sides and that is the spirit in which the Government regard it.
  Question put:—
  The House divided: Ayes 22, Noes 397.

  Division No. 55]

  [7.29 pm

  AYES

  Ashdown, Paddy

  Maclennan, Robert

  Beith, A. J.

  Meadowcroft, Michael

  Bruce, Malcolm

  Meyer, Sir Anthony

  Carlile, Alexander (Montg'y)

  Owen, Rt Hon Dr David

  Freud, Clement

  Penhaligon, David

  Hancock, Michael

  Steel, Rt Hon David

  Howells, Geraint

  Wainwright, R.

  Hughes, Simon (Southwark)

  Wallace, James

  Jenkins, Rt Hon Roy (Hillh'd)

  Wrigglesworth, Ian

  Johnston, Sir Russell

  Kennedy, Charles

  Tellers for the Ayes:

  Kirkwood, Archy

  Mr. David Alton and

  Livsey, Richard

  Mr. John Cartwright.

  NOES

  Adams, Allen (Paisley N)

  Bryan, Sir Paul

  Aitken, Jonathan

  Buchan, Norman

  Alison, Rt Hon Michael

  Buchanan-Smith, Rt Hon A.

  Ancram, Michael

  Buck, Sir Antony

  Arnold, Tom

  Budgen, Nick

  Ashby, David

  Bulmer, Esmond

  Atkins, Rt Hon Sir H.

  Burt, Alistair

  Atkins, Robert (South Ribble)

  Butcher, John

  Atkinson, N. (Tottenham)

  Butler, Rt Hon Sir Adam

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

  Callaghan, Jim (Heyw'd & M)

  Baker, Nicholas (Dorset N)

  Campbell-Savours, Dale

  Baldry, Tony

  Carlisle, John (Luton N)

  Banks, Robert (Harrogate)

  Carttiss, Michael

  Banks, Tony (Newham NW)

  Channon, Rt Hon Paul

  Barnett, Guy

  Chapman, Sydney

  Beaumont-Dark, Anthony

  Chope, Christopher

  Beckett, Mrs Margaret

  Churchill, W. S.

  Bell, Stuart

  Clark, Dr David (S Shields)

  Bellingham, Henry

  Clark, Sir W. (Croydon S)

  Bendall, Vivian

  Clarke, Rt Hon K. (Rushcliffe)

  Benn, Rt Hon Tony

  Clarke, Thomas

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

  Clay, Robert

  Best, Keith

  Clegg, Sir Walter

  Bevan, David Gilroy

  Cockeram, Eric

  Biffen, Rt Hon John

  Cocks, Rt Hon M. (Bristol S)

  Blackburn, John

  Cohen, Harry

  Blair, Anthony

  Conway, Derek

  Body, Sir Richard

  Cook, Frank (Stockton North)

  Bonsor, Sir Nicholas

  Cook, Robin F. (Livingston)

  Boscawen, Hon Robert

  Coombs, Simon

  Bottomley, Mrs Virginia

  Cope, John

  Boyes, Roland

  Corbett, Robin

  Braine, Rt Hon Sir Bernard

  Corbyn, Jeremy

  Brandon-Bravo, Martin

  Cormack, Patrick

  Bright, Graham

  Couchman, James

  Brittan, Rt Hon Leon

  Craigen, J. M.

  Brown, Gordon (D'f'mline E)

  Cranborne, Viscount

  Brown, Hugh D. (Provan)

  Critchley, Julian

  Brown, M. (Brigg & Cl'thpes)

  Crouch, David

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

  Crowther, Stan

  Browne, John

  Cunliffe, Lawrence

  1007

  Currie, Mrs Edwina

  Henderson, Barry

  Davies, Ronald (Caerphilly)

  Heseltine, Rt Hon Michael

  Davis, Terry (B'ham, H'ge H'l)

  Hickmet, Richard

  Deakins, Eric

  Hind, Kenneth

  Dewar, Donald

  Hirst, Michael

  Dixon, Donald

  Hogg, N. (C'nauld & Kilsyth)

  Dormand, Jack

  Holland, Sir Philip (Gedling)

  Dorrell, Stephen

  Holt, Richard

  Douglas, Dick

  Home Robertson, John

  Douglas-Hamilton, Lord J.

  Howard, Michael

  Dubs, Alfred

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

  du Cann, Rt Hon Sir Edward

  Howell, Rt Hon D. (G'ldford)

  Dunn, Robert

  Howell, Ralph (Norfolk. N)

  Dunwoody, Hon Mrs G.

  Hoyle, Douglas

  Durant, Tony

  Hubbard-Miles, Peter

  Eadie, Alex

  Hughes, Dr Mark (Durham)

  Eastham, Ken

  Hughes, Robert (Aberdeen N)

  Ewing, Harry

  Hughes, Roy (Newport East)

  Eyre, Sir Reginald

  Hughes, Sean (Knowsley S)

  Fairbairn, Nicholas

  Hunt, David (Wirral W)

  Farr, Sir John

  Hunt, John (Ravensbourne)

  Favell, Anthony

  Hunter, Andrew

  Fenner, Mrs Peggy

  Jenkin, Rt Hon Patrick

  Field, Frank (Birkenhead)

  John, Brynmor

  Fields, T. (L'pool Broad Gn)

  Jones, Barry (Alyn & Deeside)

  Fisher, Mark

  Jones, Gwilym (Cardiff N)

  Flannery, Martin

  Jones, Robert (Herts W)

  Fletcher, Alexander

  Kellett-Bowman, Mrs Elaine

  Fookes, Miss Janet

  Kershaw, Sir Anthony

  Foot, Rt Hon Michael

  Key, Robert

  Forman, Nigel

  King, Roger (B'ham N'field)

  Forrester, John

  King, Rt Hon Tom

  Forsyth, Michael (Stirling)

  Knight, Greg (Derby N)

  Forth, Eric

  Lang, Ian

  Foster, Derek

  Latham, Michael

  Foulkes, George

  Lawler, Geoffrey

  Fowler, Rt Hon Norman

  Lawson, Rt Hon Nigel

  Fox, Marcus

  Leadbitter, Ted

  Franks, Cecil

  Lee, John (Pendle)

  Fraser, J. (Norwood)

  Leigh, Edward (Gainsbor'gh)

  Fraser, Peter (Angus East)

  Leighton, Ronald

  Freeman, Roger

  Lester, Jim

  Fry, Peter

  Lewis, Sir Kenneth (Stamf'd)

  Gale, Roger

  Lightbown, David

  Galley, Roy

  Lilley, Peter

  Gardiner, George (Reigate)

  Litherland, Robert

  Gardner, Sir Edward (Fylde)

  Lloyd, Peter (Fareham)

  Garel-Jones, Tristan

  Lloyd, Tony (Stretford)

  George, Bruce

  Lofthouse, Geoffrey

  Gilbert, Rt Hon Dr John

  Lord, Michael

  Glyn, Dr Alan

  Loyden, Edward

  Godman, Dr Norman

  Lyell, Nicholas

  Gorst, John

  McCurley, Mrs Anna

  Gould, Bryan

  McDonald, Dr Oonagh

  Gow, Ian

  Macfarlane, Neil

  Gower, Sir Raymond

  MacGregor, Rt Hon John

  Greenway, Harry

  McKay, Allen (Penistone)

  Gregory, Conal

  MacKay, Andrew (Berkshire)

  Griffiths, Sir Eldon

  MacKay, John (Argyll & Bute)

  Griffiths, Peter (Portsm'th N)

  McKelvey, William

  Grist, Ian

  Maclean, David John

  Ground, Patrick

  McNair-Wilson, M. (N'bury)

  Gummer, Rt Hon John S

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

  Hamilton, James (M'well N)

  McNamara, Kevin

  Hamilton, Neil (Tatton)

  McQuarrie, Albert

  Hampson, Dr Keith

  McTaggart, Robert

  Hanley, Jeremy

  McWilliam, John

  Hannam, John

  Major, John

  Hargreaves, Kenneth

  Malins, Humfrey

  Harris, David

  Maples, John

  Harrison, Rt Hon Walter

  Marek, Dr John

  Harvey, Robert

  Marland, Paul

  Hawkins, C. (High Peak)

  Marshall, David (Shettleston)

  Hayes, J.

  Marshall, Michael (Arundel)

  Hayhoe, Rt Hon Barney

  Martin, Michael

  Haynes, Frank

  Mason, Rt Hon Roy

  Hayward, Robert

  Mather, Carol

  Heathcoat-Amory, David

  Maxton, John

  Heddle, John

  Maxwell-Hyslop, Robin

  Heffer, Eric S.

  Mayhew, Sir Patrick

  1008

  Maynard, Miss Joan

  Skeet, Sir Trevor

  Mellor, David

  Skinner, Dennis

  Merchant, Piers

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

  Michie, William

  Smith, Tim (Beaconsfield)

  Mikardo, Ian

  Soames, Hon Nicholas

  Miller, Hal (B'grove)

  Soley, Clive

  Mills, Iain (Meriden)

  Spearing, Nigel

  Mills, Sir Peter (West Devon)

  Speed, Keith

  Mitchell, Austin (G't Grimsby)

  Speller, Tony

  Mitchell, David (Hants NW)

  Spence, John

  Moate, Roger

  Spencer, Derek

  Montgomery, Sir Fergus

  Spicer, Jim (Dorset W)

  Morris, Rt Hon A. (W'shawe)

  Squire, Robin

  Morrison, Hon P. (Chester)

  Stanbrook, Ivor

  Moynihan, Hon C.

  Stanley, Rt Hon John

  Mudd, David

  Steen, Anthony

  Neale, Gerrard

  Stern, Michael

  Nellist, David

  Stevens, Lewis (Nuneaton)

  Neubert, Michael

  Stewart, Allan (Eastwood)

  Nicholls, Patrick

  Stewart, Andrew (Sherwood)

  Norris, Steven

  Stewart, Rt Hon D. (W Isles)

  O'Neill, Martin

  Stradling Thomas, Sir John

  Onslow, Cranley

  Sumberg, David

  Oppenheim, Phillip

  Tapsell, Sir Peter

  Osborn, Sir John

  Taylor, John (Solihull)

  Page, Richard (Herts SW)

  Tebbit, Rt Hon Norman

  Park, George

  Temple-Morris, Peter

  Parkinson, Rt Hon Cecil

  Terlezki, Stefan

  Parris, Matthew

  Thatcher, Rt Hon Mrs M

  Patchett, Terry

  Thomas, Dafydd (Merioneth)

  Patten, Christopher (Bath)

  Thomas, Rt Hon Peter

  Pawsey, James

  Thomas, Dr R. (Carmarthen)

  Peacock, Mrs Elizabeth

  Thompson, Donald (Calder V)

  Pendry, Tom

  Thompson, Patrick (N'ich N)

  Percival, Rt Hon Sir Ian

  Thorne, Neil (Ilford S)

  Pike, Peter

  Thorne, Stan (Preston)

  Pollock, Alexander

  Thornton, Malcolm

  Portillo, Michael

  Thurnham, Peter

  Powell, Raymond (Ogmore)

  Tinn, James

  Powell, William (Corby)

  Townend, John (Bridlington)

  Powley, John

  Townsend, Cyril D. (B'heath)

  Prentice, Rt Hon Reg

  Tracey, Richard

  Prescott, John

  Trotter, Neville

  Proctor, K. Harvey

  Twinn, Dr Ian

  Radice, Giles

  Viggers, Peter

  Raffan, Keith

  Waddington, David

  Randall, Stuart

  Wakeham, Rt Hon John

  Rathbone, Tim

  Waldegrave, Hon William

  Rees, Rt Hon M. (Leeds S)

  Walden, George

  Rhodes James, Robert

  Walker, Bill (T'side N)

  Richardson, Ms Jo

  Waller, Gary

  Ridley, Rt Hon Nicholas

  Wardell, Gareth (Gower)

  Ridsdale, Sir Julian

  Wardle, C. (Bexhill)

  Rifkind, Rt Hon Malcolm

  Wareing, Robert

  Roberts, Ernest (Hackney N)

  Warren, Kenneth

  Roberts, Wyn (Conwy)

  Watson, John

  Robertson, George

  Watts, John

  Robinson, G. (Coventry NW)

  Weetch, Ken

  Robinson, Mark (N'port W)

  Wells, Bowen (Hertford)

  Roe, Mrs Marion

  Wheeler, John

  Rooker, J. W.

  White, James

  Rossi, Sir Hugh

  Whitney, Raymond

  Rost, Peter

  Wiggin, Jerry

  Rowe, Andrew

  Wigley, Dafydd

  Rumbold, Mrs Angela

  Williams, Rt Hon A.

  Ryder, Richard

  Wilson, Gordon

  Sackville, Hon Thomas

  Winnick, David

  Sainsbury, Hon Timothy

  Winterton, Mrs Ann

  Sayeed, Jonathan

  Winterton, Nicholas

  Shaw, Sir Michael (Scarb')

  Wolfson, Mark

  Sheerman, Barry

  Wood, Timothy

  Sheldon, Rt Hon R.

  Woodcock, Michael

  Shelton, William (Streatham)

  Yeo, Tim

  Shepherd, Colin (Hereford)

  Young, David (Bolton SE)

  Shersby, Michael

  Younger, Rt Hon George

  Shore, Rt Hon Peter

  Short, Ms Clare (Ladywood)

  Tellers for the Noes:

  Silkin, Rt Hon J.

  Mr. Mark Lennox-Boyd and

  Silvester, Fred

  Mr. Francis Maude

  Sims, Roger

  Question accordingly negatived.

  Rural Areas (Government Policy)
  7.41 pm
  Mr. David Penhaligon: I beg to move,
  That this House is concerned that the recent cuts in rate support grant to the rural areas will lead to unacceptable rate increases in areas which are already facing severe cuts in jobs and services resulting from the diminution of regional aid and the closure of rural schools, hospitals, bus routes and post offices; furthermore endorses the warnings from the National Farmers' Union to the Government about the collapse of British farm income revealed in the White Paper Annual Review of Agriculture 1986, Cmnd. 9708; and calls upon the Government to halt this trend.
  Mr. Deputy Speaker (Mr. Harold Walker): I should inform the House that I have selected the amendment in the name of the Prime Minister.
  Mr. Penhaligon: I am sure that my hon. Friends will forgive me if, before coming to the main thrust of my speech, I refer to today's lobby of Parliament by the tin miners from my part of the world. In a way, their problem typifies the kind of problem that we wish to raise today. It is a long way away, but it is desperately important to the community that it affects. Yet it seems virtually impossible to raise any real interest among Ministers and civil servants and to persuade them to apply their minds to finding a solution to the problem. Indeed, that is the paradox at the heart of today's debate. The Government rely heavily on the rural areas for electoral support, but the Cabinet is amazingly urban, or at any rate suburban. The rural areas—those green and pleasant lands somewhat remote from London—have real problems that deserve discussion in the House. Today's debate provides a rare opportunity to debate them.
  To quantify the problem one need go no further than the basic statistics made available by successive Governments. For instance, despite the emphasis of this Parliament on urban problems, out of the 20 travel-towork areas in Britain with the highest unemployment 15 are rural on some definitions and 14 on any definition. In other words, three quarters of the areas of highest unemployment are rural areas. The top five prove the case. Newquay, Forres, Cardigan, Skegness and Lampeter are all rural areas and unemployment in those areas ranges from 25·8 per cent. in Lampeter to 29·5 per cent. in Newquay. Moreover, all those unemployment levels have doubled since 1979.
  Anyone who is not convinced by that absolute proof of the case has only to consult the regularly produced new earnings survey. Although the latest available statistics are for April 1985, the relative nature of the statistics does not change. Gross average weekly earnings for the male population in Britain are £192·40. The figure for Greater London is £213·80. The figures for the shire counties, which make up our nation, pale into insignificance by comparison. Bottom of the league is my county of Cornwall where the figure is £159. In Shropshire it is £162, in Clwyd, West £164, in Devon £165, in Lincolnshire £165 and in Dumfries £167. Those wage levels are up to 30 per cent. below those obtaining in the metropolitan area. In London, just 4 per cent. of male earners earn less than £100 per week. In Hereford, Northampton, Durham, East Sussex, Cornwall, Devon, Somerset, Clwyd west, Gwynedd, Tayside and Dumfries

  1011
  and Galloway more than 10 per cent. of male earners earn less than £100 per week, the highest figure being in Wales at 15·8 per cent.
  One does not need a PhD in economics or to study any area in enormous detail to appreciate that in areas with endemic unemployment and low wage structures a whole series of problems will follow as surely as night follows day, especially with a Government who believe that every problem can be solved by free market forces with as little central involvement as possible.
  Added to all that, there is the situation in agriculture — that time bomb ticking away in our rural communities. A massive erosion of farm incomes is currently taking place. That is not just bad for the farmers. It is far more significant than that because in many communities the biggest single value added is farm income, spreading way beyond the personal income experience of the farmers. The annual review published just a few days ago shows that the latest figure for farm incomes is 78 per cent. of the 1980 figure in real terms. If one studies the figures with a little more enthusiasm, rather than just taking a brief look, one discovers that the base year of 1980 was the worst year for agricultural incomes, excluding this year, and that incomes are half what they were just last year.
  The Government's handling of the milk quota saga so long ago produced a general feeling of no confidence. The Government have already paid part of the penalty for that. I have no doubt that it was their handling of that issue which cost them the Brecon and Radnor by-election.
  Mr. Edward Leigh: Will the hon. Gentleman concentrate his mind on specifics? His hon. Friend the Member for Ceredigion and Pembroke, North (Mr. Howells) told me on 18 July that he would do away with quotas. He also made it clear in reply to me that the Liberal party either did not know or would not say for four years whether it would bring in price restraint. On 18 March the hon. Member for Caithness and Sunderland (Mr. Maclennan) said that he was against quotas. What is the attitude of the alliance? Do alliance Members favour quotas, are they against them, or do they not know? Are they in favour of price restraint? Or are they all things to all men in this as in everything else?
  Mr. Penhaligon: The hon. Gentleman has saved you the trouble of calling him later in the debate, Mr. Deputy Speaker. The number of questions that he put amount to a speech in themselves. No doubt my hon. Friend the Member for Brecon and Radnor (Mr. Livsey) will deal with those matters in detail if he catches your eye, Mr. Deputy Speaker. [Interruption.] Conservative Members dislike any reference to Brecon and Radnor because they know that if the result there is extrapolated to the rest of the country they will be joining the dole queues that they have created in the rural areas. Ironically, Brecon and Radnor was not even a milk farming constituency. Yet there was a total breakdown of confidence in the Government. The inadequate preparation and thought in the Government's handling of the undoubted crisis eroded their support and they got a bloody nose.
  The irony is that our farmers have been asked to produce more and more and they have done so. The success of their response to that request has created the present problem. [Interruption.] Conservative Members
  1012
  may protest, but I remember a meeting of the National Farmers Union in my county not so long ago at which the then Minister of Agriculture, now Secretary of State for Energy, told farmers that he wanted them to produce, produce, produce. That reverberated around the meeting then and has reverberated around the farming communities of the south-west ever since.
  If the Government allow the farming community to fall apart and the farming economy to collapse, many of the remoter areas will be left with no real economy at all. That is the broad background to the situation. The Government have also allowed other problems to be created, acting as though Members representing those areas had no understanding of or feeling for the problems that they must see being created there. Housing is just one example. In areas of high unemployment and low wages young marrieds must inevitably look to local authority and community housing projects. For people without jobs or on low incomes the mortgages that we can just about manage are clearly out of reach. The problem is especially acute in tourist areas or areas which are attractive for second homes. House prices are higher than average while incomes are dramatically below average. One does not need to examine why so many people look to the local authority. The irony is that those areas have the lowest percentage of Government-owned housing stock.
  The Government introduced their policy to sell council houses and it has been a great success. The irony is that it has been the greatest success in areas where there are the fewest council houses. I am sure that that is one of the consequences that not many of us thought of at the time. I have no objections to that. My reasons for supporting the general sale of council houses were originally based on two thoughts. First, I believe in owner-occupation. I believe, as many Conservative Members do, that it creates a series of knock-on effects which are good for the community. I do not expect the Labour party to accept that.
  My second thought was that it would release, produce and create significant sums of money, which could then be applied to building the further local authority houses that were obviously required. The Government have allowed the first of my thoughts to happen but not the second. They have refused permission for the local authorities, particularly in areas where houses are most needed, to spend their own money. The problem is there to be seen in bed and breakfast accommodation, unsatisfactory temporary housing for families, and a blunt refusal of local authorities to house anybody under the Housing (Homeless Persons) Act 1977 who cannot produce a court eviction notice. No matter what the circumstances, no matter what the reasons or background, if they do not have a court eviction notice they are told to go and find their own house, to go away because nobody wants to know. I do not blame the local authorities, because they have no choice given the circumstances that have been created.
  The Government are supposed to understand rural areas and the remoter parts of Britain but there is precious little evidence of that. The condition of many of the houses that do exist is far from satisfactory. The discretionary grants system has virtually been abolished. Nobody admits that, but it has virtually ceased to exist. However, properties look pretty. They have trees growing around them, the fields are green and they have picturesque little lanes leading to them but I sometimes look at them and think that

  1013
  the only thing keeping them up is the preservation order that has been served on them. There are many properties in my constituency, and in the constituencies of my hon. Friends, that have no water, gas, electric or sewerage systems. All the infrastructure is missing. Yet people argue that all the problems in our nation are in urban centres. I do not deny urban problems but I would argue that many problems exist in our rural areas, picturesque though they may look, which are every bit as bad. In addition to that there are many other threats facing our rural communities — involving the closure of post offices, schools and hospitals, and our transport system.
  We have all fought for our rural post office and have all used a piece of House of Commons notepaper to write to the Minister pleading with him to intervene. We received a fairly standard letter back saying that it is nothing to do with him. He says that he is not the one telling the Post Office to close its rural offices but it is that same Minister who has set the financial targets for the Post Office that give it no choice.
  We have all written to the Minister about our schools. Again he says that it is nothing to do with him and that it is the proposal of the shire county, but he is the one who sets financial targets which give that shire county no alternative but to come up with such terrible and unacceptable policies.
  Mr. Michael Latham (Rutland and Mellon): The hon. Gentleman has grumbled about housing, agriculture, post offices and schools. Will he tell us how the Liberal party wants to reverse what it calls the collapse of British farm income and how that will tie in with its policy on conservation?
  Mr. Penhaligon: I have already said that the few hon. Members who do bother to attend do not listen to what I have to say. I have also explained that my hon. Friend the Member for Brecon and Radnor will deal with the agricultural points in the motion. I am prepared to deal with them myself but I think that my right hon. and hon. Friends might suggest that I sit down before I have the chance to deal with them in detail.
  Mr. John Home Robertson: I have listened to what the hon. Gentleman had to say about rural schools. He may know that I come fom the Border region of Scotland which is represented by two Liberal Members of Parliament. Indeed, he is sitting between the two of them now — the right hon. Member for Tweedale, Ettrick and Lauderdale (Mr. Steel) and the hon. Member for Roxburgh and Berwickshire (Mr. Kirkwood). Would he be interested to know that it was a Liberal committee chairman on the local authority who spent most of 1985 trying to close village schools in various parts of that local authority, including the one my own son attends? Happily, we have saved that school, but it was no thanks to the Liberal party.
  Mr. Penhaligon: That is a good example of the pressures we are talking about. I recognise that we are achieving one of those great miracles of political activity — the Conservative and Labour parties are uniting against the alliance, which they all fear. The truth is that financial pressures are placed on such local authorities and they are given little choice. Rural hospitals—
  Mr. Patrick Nicholls: The hon. Gentleman is obviously concerned about schools in the shires. Will he let us know whether he approves of the fact that the alliance is in control of Devon county council only because of a deal with the Labour party and that the price that the Labour party is extracting for that support is Liberal party commitment to destroy what remains of the grammar school system? Is not that the sort of thing he should be telling us about?
  Mr. Penhaligon: I do not think that anybody would be under any illusion that the Liberal party, like many other progressive parties in the country, has long argued against selective education. That is a well-known position. The fact that that belief may be introduced in Devon is, I suspect, to be welcomed.
  I understand why the interruption has taken place. It is because I was just about to mention hospitals. In fact, I did say the word hospital once but hon. Members want to discuss anything else but that saga. In many constituencies, particularly those of my hon. Friends, small, rural cottage hospitals are being closed. I know that nobody in the community wants that to happen but when it is mentioned to the appropriate Minister he replies to the effect that it is nothing to do with him and that it is the proposal of the regional health authority. That Minister has, of course, given the health authority criteria that force it to take those actions.
  I love the tremendous optimism behind the Government's amendment. The amendment says that an Act has been introduced that will check the decline in bus services and initiate new services. In many areas there are no services at all and it is difficult to believe that the Act could make that problem any worse. I accept that in totality. [Interruption.] I am obviously touching on many points of contention tonight.
  Mr. Colin Shepherd: The hon. Gentleman has said that in some areas there are no local bus services. Is he aware that those areas are not the areas where the legislation passed by the House has been in existence for four years and where the level of service has not declined at all in those four years?
  Mr. Penhaligon: I do not quite understand that point, to be honest. I am not trying to be awkward. It is certainly true that where there were no buses four years ago the service has not declined over the past four years.
  Mr. Shepherd: I can understand why the hon. Gentleman wants to be deliberately opaque. Is he aware that in the Herefordshire trial area the level of rural bus services, which is the same as that before the existence of the trial in rural areas, is the same now as it was at the start of the experiment?
  Mr. Penhaligon: I accept what the hon. Gentleman says. That is conceivably so. I have spoken to some people from his part of the country who believe that the experiment has not been a success. I would have liked it to be successful because that is a major problem in rural areas, but even the hon. Member is not claiming that any improvement has taken place. He is simply claiming that it is no worse than it was before.
  Mrs. Gwyneth Dunwoody: I wonder whether I could have a little clarification. Is the hon. Gentleman saying that the trial areas were a success

  1015
  and that he wishes he had seen them in areas such as his own? If that is the position he is taking he should make it clear to the House.
  Mr. Penhaligon: I think that I made a speech when the original proposal was made. I was willing to see a trial take place. In principle, I have nothing against a trial. We all have to learn by trial. However, I have not seen any in-depth analysis from the trial that leads me to believe that its extension to the rest of the country will improve the situation in net terms.
  There is a semblance of a service in some of the rural areas, run mainly by private operators. If people are allowed to compete against those operators on the few routes that they provide, and manage to make them pay when the service is threadbare, it is inconceivable that such competition will result in an improved service. However, the measure is now the law of the land and the die is cast. We shall see what happens.
  The latest example of the anti-rural phenomenon is the rate support grant settlement. It has hit the low spenders hardest — outrageously so. That view is held not by Liberal, Social Democratic or Labour Members who are in opposition and wish to cause trouble for the Government, but by Conservative Members — at least those who have had the courage to express their views in public. In the Tea Room and on the train coming to London, one can hear more candid expressions of opinion than in the House.
  The hon. Member for Devizes (Mr. Morrison) says:
  "If there had been no increases in expenditure, that figure would have been about 22 per cent."
  That is, the rate increase for his area. He continues:
  "I am not prepared to support proposals that can only bring about cuts in public services or huge rate increases, or both."
  The hon. Member for Devizes is a Government supporter. The hon. Member for Tiverton. (Mr. Maxwell-Hyslop) expressed similar views, and his area is nearer to mine. The right hon. Member for Castle Point (Sir B. Braine) said:
  "But it is unfair that the shift should be wholly at the expense of the shire counties, with the result that there will have to be substantial rate increases if the present level of our services is not to be reduced."
  The hon. Member for Chichester (Mr. Nelson) was even stronger in saying:
  "there is a widespread feeling of betrayal in the shire counties following the rate support grant settlement." — [Official Report, 20 January 1986; Vol. 90, c. 81-99.]
  Those are not Opposition Members but Government supporters who have had the courage to put their head over the parapet. The right hon. Member for Chesham and Amersham (Sir I. Gilmour) expressed similar views, but I sometimes wonder whether he supports the Government at all these days. However, at least he had the courage to express his views.
  The Government's proposals move money away from the lowest spending authorities in our land. They are low spenders on education and social services. It is certain that rates will rise by 20 to 30 per cent. if present services are to be maintained. I suspect that, except for the brave counties, some cuts will take place. There will be cuts in work in the rural communities by the Development Commission, the Council for Small Industries in Rural Areas, English Industrial Estates, the Manpower Services Commission and the EC. We have already experienced cuts because of the reduction in regional development aid from £700 million to £400 million. Those who are in areas
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  of endemic unemployment are attempting to solve their own problems with the limited resources available to them, but they have been cut and cut again. Our rural areas are being thwarted by the Government whom they elected to run this country. I warn Conservative Members that if there are not some changes, the repercussions will not be long in coming and will be felt in the place that hurts politicians most of all—the ballot box.
  I look forward to Conservative Members supporting the motion in the Lobby. I am sure that, if we had a secret ballot as opposed to the public ballot that we have in the House, deep down there would be a clear majority for the general ideas and arguments that I have outlined.
  8.4 pm
  The Parliamentary Under-Secretary of State for the Environment (Mrs. Angela Rumbold): I beg to move, to leave out from "House" to the end of the Question and to add instead thereof:
  "notes that the rate support grant settlement is a recognition of the undoubted needs of inner cities but involves a shift of only 2 per cent. overall in the grant paid to shire areas; welcomes the provisions of the Transport Act 1985 which are designed to check the decline in rural bus services and to stimulate new services; welcomes the Government's initiatives on conservation and the rural economy; notes the extra public spending of £500 million this year on agriculture; and welcomes, in particular, the special payments to livestock farmers in those areas worst affected by adverse weather and the recent increases in hill livestock compensatory payments."
  I am not surprised that the hon. Member for Truro (Mr. Penhaligon) has been inspired to move his motion with great enthusiasm, and to encourage us all to think that the world in the rural areas as we knew it in the past has disappeared, and that if we drive into the country we will see total dereliction. However, I have no doubt that the hon. Gentleman wanted partly to capitalise on the strongly expressed views of hon. Members about the relatively small switch of financial support from the shire counties and districts outlined during the debate on the rate support grant last week. I do not blame the alliance for trying that on. However, alliance Members' hopes of great support from Conservative Members may be misplaced. I believe that not because I doubt the strong feelings of my right hon. Friends about the rate support grant settlement for the coming financial year, but because the motion and the hon. Gentleman's arguments do not stand up to scrutiny.
  In the context of the overall settlement, the loss of grant to the shire areas amounted to less than a 2 per cent. overall reduction. I agree with my right hon. and hon. Friends that any reduction is unwelcome, but I do not agree that in consequence the hon. Member's dire predictions will ensue. There is no doubt that last week my hon. Friends gave universal backing to the positive decision to give more resources to the inner city areas, the needs of which are not in question. The cause of upset is that, as a result of less money in the shires, there may be larger rate increases than many authorities were planning.
  Mr. Paddy Ashdown: The hon. Lady says that it is a small transfer of 2 per cent. However, it is incontrovertible that that means that there will be rate rises of 20 per cent. in counties such as Somerset, without an extra penny being spent. Will the Minister tell the House, the public or those who will have to bear the burden of the rates that the Government have imposed upon them why the problems of the inner cities have to be loaded on the rural ratepayers? Why should they not be paid for by the population as a whole?
  Mrs. Rumbold: I am coming to that point. The rate increases in the shire counties may come if they do not look at their expenditure carefully. Very often, when one examines what is happening in local authorities, one sees that the problem is not necessarily that services are being cut, but that the councils' plans and expectations are being cut. I have been on local authorities and know that members have a natural desire for their plans for the future to come to fruition. The fact that they cannot in the coming year is not a matter of great misery, but merely a matter of waiting, replanning and coming forward eventually with proposals.
  Mr. Simon Hughes: Will the Minister confirm or deny that the Association of County Councils and people who chair counties run by her party say that their services are now cut to the bone and that the rate increases will be in double figures, sometimes more than 20 per cent.? That will happen after necessary spending — not spending on luxuries or additional spending—to do the job that her Government are asking them to do.
  Mrs. Rumbold: The fact is that in all but a very few shire counties there has been about 5 per cent. real growth in the past five years. Few counties have reduced or cut expenditure.
  Mr. Robert B. Jones: Will my hon. Friend give way?
  Mrs. Rumbold: I should prefer to carry on with my speech.
  My right hon. Friend the Secretary of State drew attention to a couple of points in his speech introducing the rate support grant that it is important to reiterate. First, at the request of the local authority associations themselves, such as the Association of County Councils, he has abolished expenditure targets and penalties, which will help low-spending authorities, most of which are the rural authorities. Secondly, he said — this is an important point — that the final sum that many counties will receive will be increased as a result of money that will flow back to authorities due to adjustments after budgets have been made.
  The context for that is the Government's overall expenditure proposals, which are clearly set out in the autumn White Paper on expenditure. It is not a secret what those proposals are. We know that the overall final results of this year's settlement are unlikely to produce the dismal results that some of the shire counties are predicting.
  I should like to turn to the problem of life in our rural areas. The inevitable consequence of change on the basis and structure of the rural economy and the general drift away from the land to our towns and cities has had a dramatic effect in rural life. However, change and development have been taking place. New job opportunities have opened up. Efforts are being made to improve services and facilities and the migration from rural areas has been reversed.
  While employment in agriculture has declined, employment in the service industries has increased, so that these industries now account for over 50 per cent. of rural employment. As for opportunities in manufacturing, rural areas have fared better than our towns and cities. Rural areas are particularly suited to the production of high-tech,
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  high added value goods and services, whilst communications improvements are reducing the disadvantages of remoteness. And, of course, rural areas are ideal for the establishment of small firms which can be accommodated without detriment to the landscape.
  Much is due to the work of the Development Commission in England and the comparable rural development agencies in Scotland and Wales.
  It is obvious that the best people to create jobs in the countryside are the people living there already, on or off the farms. So the Development Commission helps local people to make good. Throughout rural England, there are now many thousands of inconspicuously sited, well-designed, small new workshops and conversions, buildings in which thousands of jobs have been developed and through which communities have been sustained.
  The Development Commission provides technical, managerial and financial advice and assistance, including loans, to small businesses through its agency, the Council for Small Industries in Rural Areas. It also encourages or organises training in rural crafts and skills ranging from the technical, such as general engineering and agricultural machinery repair, to the more traditional such as thatching, farriery and wheelwrighting.
  Mrs. Dunwoody: I do not find it easy to reconcile what the hon. Lady is saying with the situation in my rural constituency. We have lost jobs in agriculture in the last 10 years in Cheshire. Indeed, less than 3 per cent. of the population are now involved in agriculture and related industries. COSIRA has had difficulty in finding one site within my constituency borders to provide a base for a small agricultural engineering firm or for a small builder. At present the number of jobs being created by COSIRA, excellent though its work is, is infinitesimal compared to the number of jobs we are losing.
  Mrs. Rumbold: The hon. Lady may be interested in what I shall have to say in a moment about the increase in the money that will be available to the Development Commission through the good offices of the Government.
  The numbers of client firms on COSIRA's books has been steadily increasing—in 1985, 18,800—as has the number of people these firms employ—88,800, in 1985. The approved programme amounts to over 2,000 units totalling more than 3·25 million sq ft. The occupation rate is very high—84 per cent. for the units completed so far, the vacant 16 per cent. providing a most useful "float" of readily available units of various types. The units provided by the Development Commission alone already accommodate some 10,000 jobs. Additional space for craft and light industrial use has also been created by giving grants for the conversion of redundant buildings—a cost-effective way of providing new jobs, and one which is sensitive to the need for development to harmonise with its rural surroundings.
  As a recognition of the valuable work which the Development Commission undertakes, my Department has been able to increase substantially the resources for its work by over £4 million which brings the total up to some £28 million this year, with a similar amount for next year. This will be spent particularly on providing additional workshop facilities which I hope the hon. Lady's area will be able to take up in order to meet the strong demand for the small facility units of which she was speaking.
  If I may take the hon. Gentleman's own area, the southwest region is a good example of the scale of the

  1019
  Development Commission's input. As he will know, over the past two years in Cornwall it has spent over £180,000 building craft homes — houses with small craft workshops attached—and provided £110,000 in topping up grants across the whole of the region to support housing association shared equity schemes.
  On job creation activities, since 1975 in the south-west, it has approved a programme to provide over 800,000 sq. ft. of advance factories, of which 570,000 sq. ft. is built. A further 30,000 sq. ft. of factories has been constructed in partnership with local authorities since 1981. On grants to help the conversion of redundant rural buildings, so far 145 projects have been approved, of which 94 are completed, providing functional and sympathetic work space for hundreds of jobs.
  The motion refers to the annual review White Paper on agriculture which was presented to Parliament earlier this month. It is a very full analysis of the state of agriculture, and the picture it presents is not one of an industry in decline. Of course it is true that the calculation of farming income shows that it fell by a substantial amount—43 per cent. — in 1985 compared with 1984. But we all know that the major reason for this large decline was the weather. First, the exceptionally good weather in 1984 boosted farming income by 35 per cent. to an all-time record; then the miserable weather in 1985 cut farming income significantly.
  It is in the nature of farming that incomes are sharply affected by the weather, and the decline in 1985 must be kept in perspective. Farmers have good years and bad years: 1985 was a bad year following a good year and it is totally misleading to present the results of this exceptional pair of years as showing that agriculture is in a state of collapse. Indeed, apart from 1984, the gross output of the industry in 1985 was at an all-time high.
  Nor could I accept any suggestion that the Government are unconcerned about farm incomes. The White Paper demonstrates how carefully the various measures of income are monitored. It shows also how the government are ready to take national action to support farm incomes where appropriate. Because of the exceptional effects of the bad weather in some parts of the country, we decided to provide weather aid totalling £16·9 million to livestock farmers in the worst-affected areas. This will be of considerable help to them during the winter months in improving their cash flow.
  More generally, the Government's concern is also demonstrated by two major initiatives in the aid to hill livestock producers. First, at the start of 1985 we extended the scheme to include additional marginal areas so that many more farmers now benefit. Secondly, we have increased the rates of payment by 11 per cent. and total payments in the present financial year are expected to be £110 million.
  Looking at total expenditure on agriculture, including expenditure under the common agricultural policy as well as national grants and subsidies, the White Paper shows that it has more than doubled since 1981–82 and it is forecast in 1985–86 to be £2·2 billion — a massive commitment to agriculture in terms of public expenditure.
  In addition, to the substantial measures which are applied in order to support farm incomes and secure the prosperity of the industry, the Government have taken a whole range of initiatives which are important for conservation and the rural economy.
  1020
  The hon. Member for Truro (Mr. Penhaligon) touched on transportation.
  Mr. Latham: Does my hon. Friend agree that any hon. Member who tables a motion referring to the "collapse" of farm incomes and calling on the Government "to halt this trend" should say something about his policy on the disposal of surpluses and how he thinks farm income should be maintained rather than just grumble generally?
  Mrs. Rumbold: I am sure that my hon. Friend accepts, as I do, that it is difficult to ask the alliance parties to give us any idea of their policies on any subject.
  One of the problems in the provision of bus services in rural areas, to young and old people alike, is that the present system of regulation has limited the number of bus operators. The hon. Member for Truro made a great point of saying that there were no services; but this has been part of the problem. Over the past 50 years, the present system of regulation has managed to stifle the flexible approach that is necessary to cope with falling demand resulting from increasing car ownership. That is why the Transport Act 1985 removes the straitjacket of regulation so that the operators can be set free to use their initiative. My hon. Friend the Member for Hereford (Mr. Shepherd) has clearly pointed out how successful this can be. In a free, competitive market operators, especially small local operators, will be able to offer a greater variety of services tailored to the needs of the area. These will provide new scope for the use of minibuses and taxis, which will be able to boost local bus services.
  The free market will not cope with all the problems of rural areas, so local authorities will continue to be able to support services which are not commercially viable but which elected local representatives judge to be socially necessary. A requirement to put subsidised services out to competitive tender will ensure value for money. In most cases, this will mean that subsidy from the ratepayers will go much further.
  In recognition of the particular problems of rural areas, the Government are introducing two further measures. The first is a new grant to encourage new services. In England up to £1 million will be available each year to be administered by the Development Commission. This will complement the practical and financial help already given by many local authorities to local transport projects, and the commission will work closely with local authorities at all levels
  A second measure, tailored specially to meet rural needs, is to make available up to £20 million in the first year to help lower the cost of operators of running rural services in the important transitional period following deregulation when the full effects of competition on costs may not have worked through, and to help stimulate new services. We believe that these proposals offer the way forward to improved transport services which will be of real benefit to rural communities.
  It is important to draw attention to rural services which have been mentioned, such as post offices, hospitals and schools. I shall deal first with the post offices. The Government are committed to maintaining a network of post offices throughout the country. The current policy of the Post Office is to rationalise the urban post office network, but there is no programme of closures in rural areas.
  I draw attention to the valuable work of COSIRA in giving support and advice to village shops which often

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  combine as the local post office, thus ensuring that this vital service to rural communities is maintained wherever possible.
  Mr. A. J. Beith: Does the hon. Lady recognise that there is a great fear in rural areas about post office closures—it has been expressed in hundreds of letters which I have received — that the Government's mounting pressure on pensioners and benefit receivers to have benefits paid through a bank, and paid less frequently, will deprive village post offices of an essential income without which both the village post office and the village shop will go?
  Mrs. Rumbold: It is not necessarily mounting pressure. It is much more related to the difficulty involved in getting people in rural areas to take on the responsibility of running a post office.
  Mr. David Maclean: Will my hon. Friend comment on the contrary pressure which came from the Department of Transport insisting that an extra 500 rural post offices should issue driver and vehicle licences? Will that not help to improve the services of rural post offices and to prolong their life?
  Mrs. Rumbold: That will certainly encourage more people to come forward to run post offices. One hopes that that will happen.
  Mr. Ashdown rose—
  Mrs. Rumbold: I should like to continue.
  Mr. Ashdown: Will the hon. Lady give way on this point?
  Mrs. Rumbold: I have given way quite a lot. I want to leave time for hon. Members to make their speeches.
  I should like to take up some of the points that have been made about the Health Service. Some hospitals have been closed. This has been done in the interests of ensuring that there is a maximum level of modern medicine available for patient care throughout Britain. The Government hope that all the health authorities in planning their total service for a district will take fully into account the benefits and services that a community hospital can produce in the context of the best available medical care for patients.
  On the provision of education, a number of village schools have been closed in recent years, and no doubt local education authorities will continue to bring forward proposals to close small schools where they judge that to be in the interest of the pupils at the school concerned and those attending other schools in the area. It should be remembered that children in very small primary schools miss the stimulus that can be provided from working with a sizeable group of their peers. The Government recognise that many small village schools have to be retained because of the geographical isolation of the communities they serve.
  Mr. Robert Jackson: The Oxfordshire county council—now under Labour and alliance control — proposes to close three village schools in my constituency — Childrey, Ardington and Letcombe Regis. Does my hon. Friend agree that the county council
  1022
  needs to be reminded that schools in the villages are not simply educational units but also the focal points of rural life?
  Mrs. Rumbold: I certainly agree that there are occasionally very good reasons for having village schools. It is absolutely within the purview of the local authority to make decisions on its priorities. If the priorities are to keep the schools open for the communities, that should weigh heavily with those authorities. They are at liberty to look at where alternative schools are available and whether closure of some schools would necessitate unacceptably long journeys to school for very young children.
  I should draw attention to the work that has gone into demonstrating our commitment to the countryside and to ensuring that developments in agriculture and the environment go hand in hand. For example, this year we hope that, subject to parliamentary approval, grant in aid to the Countryside Commission and Nature Conservancy Council for 1986–87 should total not far short of £50 million. This compares with less than £23 million five years ago, immediately after passage of the Wildlife and Countryside Act 1981. There has also been an increase of about 30 per cent. in national park supplementary grants over the same period. These increases, well above the rate of inflation, demonstrate the Government's determined commitment to conservation and our resolution to make the Act work.
  I again stress that my Department and the Ministry of Agriculture, Fisheries and Food have proceeded in close harmony on this matter. The press, ever eager to promote friction where none exists, has tried to make out that there are significant conflicts of interests between the two Departments. The fact that my right hon. Friend the Minister of State, Ministry of Agriculture, Fisheries and Food and I are here together to respond jointly to the motion shows how wrong that is. If only the press and our opponents would stop for a moment to read the contents of our announcements and ministerial speeches and to consider the content of our policies they would see how wrong they are. Unlike the Opposition, we have a living and creative policy which is continually developing in a positive and constructive manner.
  The Agriculture Bill now before Parliament is the latest product of our positive approach. Its provisions emphasise the growing partnership that we seek between Government, agriculture and environmentalists. Far from the devastation presented by the hon. Member for Truro, there is considerable evidence to support the view that the Government are addressing the needs of the rural areas positively. The population migration has stabilised. Jobs in small businesses and the service industries are beginning to regenerate the rural economy. Firm action to prevent damage to the countryside and wildlife is paying dividends. New measures to check the decline in transport and mobility have been enacted. Money to support livestock farmers and agriculture has been paid out.
  The Government are firmly of the belief that their policies in the rural areas are correct in targeting aid to where it is needed, providing a stimulus to those areas of services at risk and putting in place a framework within which the future for the rural areas is secure.
  8.32 pm
  Mr. Brynmor John: First, may I thank the Under-Secretary of State for the Environment for her

  1023
  discourse on rural affairs. I suspect it was a bit of reciprocity on the part of the Minister of Agriculture, Fisheries and Food, to pay for its interest in environmental matters, which we will debate again tomorrow morning.
  May I deal with two or three aspects of the amendment which I suspect the Government does not want the House to scrutinise too carefully. If Members look at the second half of the amendment they will see a statement noting with approval the expenditure of an extra £500 million on agriculture last year. I leave aside the unworthy thought that to boast of extra spending not so long ago was used in Government circles as evidence that the spender was not, in the prime ministerial phrase, "one of us". I state categorically that no part of that £500 million has been used for the benefit of or for innovation in agriculture. It has been used to support the further and unwanted surpluses that have been spawned. The hon. Lady spoke of the structure of farming and said that it was not at the point of collapse. That may be so, but it is a considerable paradox that although farm incomes have gone down by 43 per cent. it still costs the rest of us £500 million more to support such a system.
  The hon. Lady also paraded the raising of the hill livestock compensatory amounts. I apologise for dealing with this in detail but I thought that a Minister from another Department would deal with it. I am grateful for the restoration of some of the value of those amounts. Even in their restored form they are still, in real terms, for hardy ewes, £1·65 short of the 1981 value and, for non-hardy ewes, £1·80 short. When this matter was raised previously the Government have said that the Labour Government did not secure a rise in the allowance and so the allowance is better than it was. On hardy and less hardy ewes, the allowance is still 75p and 70p, respectively, less in real terms than on 1 January 1979. I hope that when the Minister replies we shall hear the last of that argument.
  The hon. Lady raised the prospect of wet weather aid. I thought that it was a complacent statement and obviously not influenced by the sulphurous words of the NFU in Wales. I advise her to read those words before she becomes too sunk in complacency. The exclusion of both animals and areas in Wales has totally bewildered and caused a great deal of resentment and dissatisfaction. The Government did not match the needs of the hour.
  The central point of this debate is the need to take an integrated look at the policies fashioned for rural areas, both in terms of their effectiveness and of the money available. Too often unco-ordinated approaches to problems—hindered by departmental isolation under all parties; I make no political point—has meant patchy and random results. This is not successful and I believe it should be changed. I had understood that an Agriculture Minister was to open the debate and I saw that as a harbinger of future Government change — that the Ministry was to take a lead in co-ordinating a strategy for rural areas.
  The Minister of State, Ministry of Agriculture, Fisheries and Food (Mr. Selwyn Gummer): I certainly owe an apology to the hon. Gentleman because we understood that this debate would be about agriculture. It was only yesterday afternoon that the whole matter of the rate support grant was raised by the Liberals when they put down their motion. As the first half related to the rate support grant it seemed sensible that that should be dealt with by an Environment Minister. I apologise to the hon.
  1024
  Gentleman because I did give him the wrong infotmation when I thought this debate was about agriculture. I apologise for any inconvenience.
  Mr. John: I accept that apology. The point I was making is that the one role that the Ministry of Agriculture, Fisheries and Food ought to seek—even at the risk of heightening the blood pressure of the Minister for Environment, Countryside and Local Government—is to co-ordinate a strategy towards rural areas. I thought that it was the Ministry's aversion in the past couple of years to making pronouncements on agriculture policy that led it to back off at the last moment.
  Agriculture is growing in importance. The hon. Lady is quite right. The figures for rural population show a growth in the last 10 years of 29 per cent., whereas urban population has grown by only 1 per cent. There is an internal change of emphasis and balance within the United Kingdom and I believe that the machinery of government should reflect the change. The Government should reflect a more co-ordinated approach to the problem.
  Because of the lack of time there are only two aspects of the problem with which I can deal tonight, although I must say that both the motion and the amendment contain a great deal on agriculture. However, I will deal with the two aspects which I believe are most needed to retain the vitality of the rural areas.
  Agriculture is mentioned, rightly, because, both directly and indirectly, it is a key provider of employment in the small towns and villages of rural Britain. Such employment — I take issue with the hon. Lady — is narrow in its choice. The range of jobs available is not great and is often seasonal. Thus, unemployment in the industry generally, although not as large as in the constituency of the hon. Member for Ceredigion and Pembroke, North (Mr. Howells), is often masked by the fact that there is seasonal, low-paid employment. When I listened to the hon. Lady's encomiums about the rate support grant I wondered where the proposal about a poll tax would leave the low paid in rural areas. I suspect rather worse off than they are at the moment.
  Agriculture — left in a vacuum by the absence of ministerial advice—is entering a period of momentous change. Unless the voracious appetite of the CAP is curbed, its budgetary collapse is, in my view, probable. We may differ on how to avoid this, by reforming it in time, but there must be a united view from this House that surpluses will be eliminated. The theory of maximising return has meant the amalgamation of holdings, the elimination of smaller ones and consequently a drop in the numbers of people employed in agriculture. In the last 20 years to 1980 employment has dropped by 35 per cent. and it is not over yet. Cash flow problems have hit farmers in the last year or so. Mr. Lloyd Addison, the prospective Labour parliamentary candidate for Norfolk, South, has published some figures showing that in the county of Norfolk, 1,000 agricultural workers have been discharged in the last year—15 per cent. of that sector of the work force in the last year. Is this confirmed? Is it, as I suspect, an indicator that as times get harder the general trend will be to shed labour on farms first and thus increase the problems of rural employment.
  If we squarely face the issues of cereal surpluses we should be able to suggest to the farming community some of the alternative uses to which unwanted cereal land could be put. The first is the growth of protein crops. I estimate

  1025
  that we have room to switch a quarter of a million hectares in the next few years. I believe we should expand forestry. At present we produce only 10 per cent. of our requirements. I do not mean the conifer continents of the past. I mean woodlands on farms with conifers, deciduous and broad-leaved trees, which together would enable us to meet the full range of our timber needs. The Government have recognised this principle but in their recent discussion document talked only of 200,000 hectares. I believe we could manage five times that amount in the next 20 years, and by concentrating on grade 3 and 4 land substitute for marginal quality unwanted cereals, crops which will be economically useful and environmentally pleasing.
  The problem is what to do while the trees are growing, especially for the person who plants them. Farmers must be paid as conservators of the timber. Grants for planting are not enough. I propose that they should be paid annually by the Government for each hectare while the crop is maturing. In return, the Government should share in the profits of sale. Such a scheme would benefit the economy and provide farmers with a cash flow which would percolate down to farm labourers and thus increase employment in rural areas. If the objection is cost, I can only say that the cost of agriculture, mostly in unwanted surpluses, is £2·2 billion a year at present. If we devoted just a tiny part of that to forestry, or other useful crops, we could increase employment and greatly benefit the economy.
  The restoration of public services to rural areas is a paramount need. We had a battle in which the hon. Member for Hereford (Mr. Shepherd) was rather engagingly said to represent Worcester as well, much to the consternation of the right hon. Member for Worcester (Mr. Walker), I am sure. The amendment refers to the Hereford experiment. The Transport Act 1985 abolished cross-subsidisation and led to the National Bus Company saying that it would have to cut local bus services by 30 per cent. It estimates that the effect on public transport in rural areas is a cut of 25 per cent. The Government maintain that somewhere, somehow, there is a breed of tax cut, short cut or entrepreneur who will make that cut good—but how, when and to what extent?
  Rural education is vital for the welfare of families. In 1983, the last year for which statistics are available, 127 primary schools in England and four rural secondary schools closed. As the hon. Lady said, a judgment must be made by local authorities, but the Government cannot escape all liability because their denial of funds to local authorities has made choices invidious. The report of the joint working party established by the Departments of the Environment and of Education and Science talked of the closure of rural schools thus:
  "Ultimately the policy debate about rural school reorganisation cannot avoid a range of social judgments about lifestyles which we want in Britain into the next century. What is clear however is that school closures are not easily reversed. It therefore behoves all decision-makers to err on the side of caution and to weigh every conceivable short and long term effect before irrevocable action is taken."
  It is essential that the Government do just that when weighing up how to devote money to the education service.
  The Minister mentioned medical facilities and hospital closures. Of course we want first-class medical facilities—acute conditions demand them—but there are other
  1026
  demands, such as those made by social problems. People now live longer and rural hospitals could be kept open to help families support the elderly. We must pursue excellence in surgery and medicine, but hospitals also have a social role. Hospital closures condemn families to long and expensive journeys if they are to keep in touch with sick relatives.
  If such public services decline, many jobs will be lost. However, that is not the most important consideration. The improvement of services in rural areas would greatly enhance the quality of rural life. These two strands are intertwined. If there was the same standard of provision in rural and metropolitan areas, there would be more home helps, more meals on wheels, better library services and tens of thousands more jobs in rural areas. The key to more employment and a better quality of life in rural areas is public expenditure. We should not avoid that. In view of their blind ideological hatred of public expnditure, the Government cannot stomach that. That is why they have damaged rural areas and why their amendment avoids the real challenge of the future.
  8.46 pm
  Mr. David Mudd: I should like to speak about some of the Government's foolish policies for rural areas, about the implementation of some of the more helpful and promising policies and about the absence of any hint of policy for a key matter that affects Cornwall today.
  Many of us were lobbied today about Cornish tin mines. The Government's inability to say anything to that industry at its time of distress, even a decent, "Farewell, and look after yourself," is utterly unacceptable to those who are associated with any pretence of a social conscience and a desire for development of industry in rural areas. Anybody who attended the miners' visit today will be haunted by the recollection of Mrs. Oates from Pendeen who said how she had grown to hate Friday. She said that she loved Fridays because there was one pay packet coming in through the door, but immediately she wondered whether there would be another next Friday. That is the hand-to-mouth existence being experienced by those involved in the Cornish tin industry, and they have had not a twitter of support from the Government.
  If the industry is allowed to collapse, we shall instantly have £30 million or £40 million added to our imports bill, representing imported tin, and a region of 1,500 people will be added to the already obscenely long dole queues through west Cornwall. Even in the main towns of west Cornwall, unemployment is now running at one man in four. In rural areas, it is probable that one person in three has no job.
  Successive Governments have responded to the problems of Cornwall and tried to do various things with special development area status and the normal panaceas. A couple of years ago, when Redruth was still in a special development area, Carrick district council made a courageous decision to develop a piece of land. It was a project to reclaim old industrial wasteland to provide the basis for an industrial estate which would serve that area of chronic unemployment. The Department of the Environment got terribly excited and poured in pounds and pounds. Even the much maligned Europeans said, "We want a piece of this action as well." As a result, a beautiful industrial estate was created. On the day before it came on stream, somebody at the Department of Employment,

  1027
  doodling with his pencil, transferred the area from the Redruth travel-to-work area to the Truro travel-to-work area. We now have a beautiful industrial estate laid out, but not a single factory upon it. There is not one penny of regional development assistance eligible for anything that goes on that estate. There is no eligibility for any help from the European regional development fund either.
  That is one example of the nonsense that is perpetuated by some aspects of our regional policy towards the rural areas. The Council for Small Industries in Rural Areas has been mentioned. It is woefully under-funded. With an average cost in west Cornwall of about £50,000 per acre to develop and service industrial land, but a going rate of only £25,000 per acre for land that has been serviced and developed, it is small surprise that even entrepreneurs are not terribly excited. The only hope for factory building must lie with English Industrial Estates, but it, too, has had its finances restricted. In my constituency, five projects that would have led to new jobs for rural areas are now solemnly and faithfully entombed in a moratorium that will not be lifted this side of April 1987.
  In addition to criticising what I believe to be the weaknesses and stupidities of some forms of existing regional policy, I shall try to consider constructively and hopefully some simple cost-effective policies that could be introduced. There could and should be a crash programme for the conversion of disused industrial buildings in rural areas into modern units, especially as managed workshops. We should remove entirely the anomaly whereby regional development grants are available for new industrial buildings, but not for those people who want to acquire and upgrade a redundant building. Our local authorities should be given greater autonomy to accelerate the development of industrial development in rural areas, either as single units or on the beehive principle.
  Planning is the real bugbear of all. One aspect above all others inhibits industrialisation in rural areas — planning. Even now, on a small scale, when one or two people are willing to spend their own money to help create and stimulate jobs in rural areas, they are held up by planning officers and planning committees over a string of nonsenses that. nine times out of ten, will be rejected on appeal.
  The sooner that our planners face up to the fact that one cannot eat the environment, the better. There should be greater flexibility and consideration, greater opportunities for conversions and more industrial developments in rural areas.
  Like my unemployed constituents—I am still talking about one man in four in most of Cornwall, and one man in three in some of the Cornish villages being unemployed — I hope that we can look to an acceleration of the implementation of the Government's promises and utterances in recent months. I hope that the promised simplified planning zones, the further relaxation of general development orders and the use classes order will become a reality very quickly. I hope that those measures will be used positively to encourage rather than actively to discourage the regeneration of jobs and prosperity in our rural areas.
  If that nettle is not grasped now and if the potential that is being wasted is not realised, if the cruelty to the unemployed in rural areas is not recognised, there will be a hollowness on the part of any politician who proclaims concern for the fate of the countryside.
  8.54 pm
  Mr. Richard Livsey: The subject for debate is partly the breakdown of the rural infrastructure. I shall concentrate my remarks mainly on agriculture, but before speaking on that subject I shall mention five areas that have broken down. We are seeing a breakdown in education and in our rural shops and post offices. Another aspect is low pay.
  Many people in my constituency earn an average of 80 per cent. of the national pay average and cannot afford to travel round the constituency, even to an evening meeting. Under the Transport Act 1985, transport services are being broken up. There is immense pressure, too, on our health services.
  Last week in my constituency we were successful in stemming the closure of 13 schools. Even the Conservative chairman of the local association, whose school is under threat, supported the campaign. There is tremendous pressure on the education budget of our county. A sparse population over a wide geographical area is not taken into account in Government estimates to work out the rate support grant formula.
  In agriculture in 1985 we have seen a 43 per cent. drop in farm incomes, a 62 per cent. drop in cereal fann incomes, a 43 per cent. drop in less favoured beef and sheep farms and an 8 per cent. drop in dairy farm incomes. Obviously, one factor has been the weather. I congratulate the Government on the increased hill farm compensatory allowances.
  However, the administration of weather aid follows parish boundaries, for which there is no rhyme or reason. It has been just as wet in one parish as it has been in another, but, for some reason, those on one side of the river receive aid and those on the other do not. Some farmers who have not been able to make hay are not receiving aid.
  Mr. Gummer: I carefully considered the way in which weather aid was formulated. There is no recorded time in history when divisions between different parts of the country have not caused difficulty in drawing a line. How would the hon. Gentleman draw the line?
  Mr. Livsey: The Minister should accept that there are already well-known lines. Everyone recognises the less favoured area A line. Weather aid should be based on it. It is exactly within that line that the National Farmers Union required action.
  We have seen the follow-on from milk quotas and the effect on the rural economy.
  Mr. Leigh: What is the hon. Gentleman's quota policy?
  Mr. Livsey: We have no quota policy, if that is what the hon. Gentleman wishes to know.
  Mr. Leigh rose—
  Mr. Livsey: I will not give way to the hon. Gentleman; I have given him an answer. I shall outline our policies in a moment. I am analysing the current position.
  We have seen the closure of the Johnstown creamery in Carmarthen, with the loss of 450 jobs. That is a consequence of the overnight introduction of milk quotas. With the closure of creameries, a vital part of the rural employment structure has disappeared.

  1029
  I believe that agriculture has reached a turning point, bringing great changes in our industry. We need a longterm policy for agriculture. At present, farmers lack confidence. I have been in the industry for the past 30 years and I have never seen a time when the industry has shown such a lack of confidence.
  Mr. Nicholls rose—
  Mr. Livsey: No, I will not give way. I do not have much time. If I give way, more time will be lost.
  Farming is looking for a comprehensive policy and an injection of confidence. That will be provided only by a policy which sets out objectives for at least the next 10 years. The Government's policy has been piecemeal—there are good and bad parts, much like the curate's egg.
  Mr. Nicholls rose—
  Mr. Livsey: The Agriculture Bill has some good parts and some poorer parts, which I shall discuss.
  Mr. Nicholls: Will the hon. Gentleman give way on the "poorer" parts?
  Mr. Livsey: The poorer parts relate to the serious cuts in research and development. The Government should vigorously defend our system of variable beef and sheepmeat premiums. Those variable premiums are essential to buttress our beef and sheepmeat production. I hope that, in their negotiations with the European Community, the Government will stand firm on variable beef premiums which are under threat at present.
  An agricultural policy should be based on the sanctity of the family farm. In those farms more than 50 per cent. of the income comes from farming. The aim should be to ensure that those farms have a net income which will provide a living for the farmer and his family. It should also provide sufficient income to service interest rates and capital repayments. High interest rates are a serious problem. They affect and penalise every small business. The family farm should also provide sufficient income to give an adequate return on tenants' capital. Those are the three facets which are essential to any agricultural policy.
  Mrs. Dunwoody: Does the hon. Gentleman's party continue to support the common agricultural policy, with its effects on marginal farms?
  Mr. Livsey: Of course my party supports the common agricultural policy, although not in its entirety, because we are the first to admit that it needs reforming.
  We must monitor farm incomes more carefully.
  Mr. Leigh rose—
  Mr. Livsey: I shall not give way. The hon. Gentleman is trying to disrupt my speech.
  We have the technology to enable us to have much more up-to-date information on farm incomes. We should be able to respond much more quickly to the downward drift of farm incomes and bring in support where it is necessary. We also need an agricultural policy which will provide opportunities for young farmers and those who wish to enter the industry. More tenancies should be made available. There are two ways in which that can be done. First, we should put our faith in county council smallholdings and the provision of more starter farms on those smallholdings. Secondly, we should encourage
  1030
  landlords to let more land to farmers. That could be done through the taxation system and would be a constructive way of creating more farm tenancies.
  Mr. Nicholls rose—
  Mr. Livsey: We must look at the vexed matter of farm credit. Interest rates are far too high at present for farming. The Liberal party believes in an agricultural land bank which would provide capital at low rates of interest, especially to entrants into the industry.
  We must also provide more opportunities in marketing. It is a grave weakness that the Food from Britain campaign has only a paltry £3 million a year for the next three years. That is inadequate when the New Zealanders and the Danes spend millions and millions of pounds on bolstering their marketing.
  We must create jobs in rural areas. Co-operatives would produce acceptable meat products and add value to the basic farm product. A great deal can be done in that direction, but it requires a partnership between the farming community and the Government.
  The question of surpluses must occupy us greatly. We must protect our family farms in any policy to control surpluses. That can be achieved through direct support to small and medium-sized farms through many of the mechanisms that already exist in less favoured areas—for example, compensatory allowances.
  Mr. Leigh: Will the hon. Gentleman deal with surpluses?
  Mr. Livsey: We would not adopt quotas. The Conservative party adopted them at the twelth hour and introduced them the following morning. The farming community knew nothing about it and suffered greviously as a result.
  Mr. Leigh rose—
  Mr. Livsey: I commend what the hon. Member for Pontypridd (Mr. John) said about forestry, which is a constructive method of taking land from production for non-agricultural purposes. It will provide an annual income, and we should all consider that policy carefully.
  We should also consider new crops, and especially the conversion of existing crops into industrial products, such as alcohol. However, we shall not achieve those new directions without more research and development. At present research and development and advisory services are being run down. That is both serious and regrettable at a time when farming faces a great crisis. Indeed, the French are increasing their research and development budget by 10 per cent. It is clear from that from where future competition will come.
  I have sought to be constructive and to describe what the country needs. It is a constructive policy for family farming units. If we can provide that, we shall be successful.
  Mr. Geraint Howells: For a long time Conservative Members have been shouting at my hon. Friend while he has been making his constructive speech. Many hon. Members may not be aware why they do so. The only reason is that the Minister lost his job as chairman of the Conservative party, as a result of my hon. Friend's win in Brecon and Radnor, and, as he has been demoted, many of his hon. Friends like to shout at my hon. Friend.
  Mr. Livsey rose—
  Mr. Deputy Speaker (Sir Paul Dean): Order. I have the impression that a second debate is taking place on both sides of the House below the Gangway. The hon. Member is entitled to be heard.
  Mr. Livsey: I was about to finish my speech. I thank my hon. Friend for his intervention.
  We need an agricultural policy which will give confidence to the industry and family farming units. If we can provide a forward-looking policy which will ensure adequate net incomes, we shall have achieved a great deal. At present small family farms need protection and aid. If a policy is based on those principles, we shall protect our agriculture and go forward.
  9.10 pm
  Mr. David Maclean: I thought we had seen the last of humbug motions on Monday, but obviously not. I hope that when my right hon. Friend replies to the debate he will be able to elaborate on the stories going the rounds in this place that the alliance felt so strongly about this motion on rural areas that it decided not to put the motion down last Thursday or Friday, but decided to put it down only yesterday after the Opposition parties had lost the Westland debate and the Government came out of it with distinction. That proves the alliance's deep commitment to this.
  Mr. Gummer: Has my hon. Friend noticed that, as usual, as soon as the alliance spokesman has finished, half the party leaves and takes no further interest in the debate?
  Mr. Maclean: That has not escaped my notice or the notice of my hon. Friends. This is a horrific, catch-all motion. Practically the only thing left out is rural telephone boxes. What has happened to the cause of rural telephone boxes? They were espoused last year and the year before, but rural telephone boxes are now safe and no longer of any interest to the opposition parties. On Friday, at a presentation by British Telecom in Cumbria, I discovered that, far from removing telephone boxes, British Telecom is spending millions on replacing them and putting up additional boxes. The Opposition parties now have no interest in that subject.
  The motion refers to rates and the rate support grant in rural areas. It seems the Opposition parties are worried about the amount of money going to rural areas. I hope that one of their spokesmen will tell us tonight how much money they intend to take from the rural areas. The hon. Members for Woolwich (Mr. Cartwright) and for Leeds, West (Mr. Meadowcroft) in March 1984 on Standing Committee G supported an Opposition clause to reintroduce rating of agricultural land. Then on 21 May 1985, only two years later, they both voted against re-rating of agricultural land. That is interesting.
  There is in existence an SDP discussion paper which says:
  "There is also one exclusion from the rating system which can no longer be justified; the derating of agricultural land and buildings. The re-rating of agriculture would strengthen the rate base of many local authorities with low resources".
  The three opposition parties must answer an important question. Will the Liberal party introduce rating of farmland? Will the SDP introduce rating of farmland? Will the alliance introduce rating of farmland? I hope the hon. Member for Caithness and Sutherland (Mr. Maclennan) will answer that question when he is winding up and I promise I will give ample time by finishing my
  1032
  speech at an opportune time. [Interruption.] If my speech contains material inaccuracies on the policies of the Opposition parties on the rating of agricultural land, I guarantee the hon. Gentleman that I and my hon. Friends will not utter a cheep while he elucidates those policies.
  We know what the problems of agriculture are. For the first time in its history, agriculture has reached a watershed. The land is producing more than enough food to feed all our people. Our opponents must not pretend that they suddenly have a policy to deal with this. The hon. Member for Brecon and Radnor (Mr. Livsey) deserves credit for his speech, because he said for the first time in many years that "they" have a policy. They, I presume, are the Liberals, and that policy is against quotas. I am taking that as official Liberal policy rather than the statement from the hon. Member for Ceredigion and Pembroke, North (Mr. Howells) who said:
  "the way forward for the industry"—
  that is, the dairy industry—
  "is not by means of a quota system for milk or any other product that comes from land … the milk quota system must be rejected."
  That is fair enough, but it is not the way forward. I hope that in winding up the hon. Member for Caithness and Sutherland will say whether that is SDP policy, because on 1 December 1983, he said:
  "We must move to a system of quotas".
  So we have found Liberal policy. There are two more questions for the Opposition parties. Does the SDP believe in a system of quotas? Does the alliance believe in a system of quotas?
  The problem in agriculture and in rural areas is not money or expenditure, but people. If more people were living and working in the countryside, all the other things—such as buses, rural post offices and schools—would fall into place. I make no criticism of doctors in my constituency, but the only time the closure of a small cottage hospital was proposed, the doctors, for valid reasons, were the people who strongly opposed its staying open because they wanted all the benefits which a bigger and plusher health centre could offer.
  Hon. Members on both sides of the House fight to maintain rural schools. The problem that we come up against is not the politicians of national Government or local government but the so-called educational experts who say, "Small rural schools are not on; they are not viable. Little Johnnie has not got a peer group that he can interreact with."
  Mr. Alex Carlile: I agree entirely with the hon. Gentleman's view that rural schools in some areas are driven to closure because of the interference of so-called experts. Will the hon. Gentleman accept that the Welsh Office — one of whose Ministers is on the Treasury Bench at the moment—has done absolutely nothing about telling local authorities that the experts are wrong and is encouraging them to close village schools? Will he demand that his Government change their policy so that village schools are maintained?
  Mr. Maclean: I do not think that there is any need to change policy so that rural schools can be maintained. If any Government are ever successful in ridding their Civil Service departments of experts and educational psychologists, I shall happily come back and bow to the hon. and learned Gentleman because, if he can manage that, he will be more successful than any Government in history.
  The Parliamentary Under-Secretary of State for Wales (Mr. Wyn Roberts): Spending per pupil in Wales is at its highest in the county that the hon. and learned Member for Montgomery (Mr. Carlile) represents.
  Mr. Maclean: I shall not comment further on Wales. There is sufficient ethnic representation from the Celtic regions. I shall get back to the main stream.
  I intended to talk about what the National Farmers Union and Rural Voice have suggested as the solution for rural areas. As time is pressing I shall concentrate on two points. The NFU has estimated that, within a decade, 11 per cent. of agricultural land currently used for essential food production will be surplus to requirements. It says that in a tightly overpacked and crowded island like ours we should look upon that not as a disaster but as an opportunity which can be exploited for forestry, tourism and other things.
  The Rural Voice document entitled "Agriculture and the Rural Economy" makes some valid points, one of which is that farming is at the core of a healthy rural community. It also says that production of food to a very high standard must remain the prime purpose of a viable rural community. In that regard, the Government's backing of Food from Britain is proof that we are backing the right policy.
  The Rural Voice document also says:
  "A growing secondary purpose for farming and farm land, and supplementary justification for financial and other support for the farming industry springs from other aspects of national life which have been rising on the political agenda—namely environment, tourism, forestry, energy, and the strengthening of the rural economy."
  The Government have responded. The policy on rural diversification and the provisions of the Agriculture Bill—some of us are privileged to sit in Committee on that Bill—show that we are moving in the right direction. Agricultural improvement scheme grants are available for rural diversification and for forestry. I can go a long way towards agreeing with the hon. Member for Pontypridd (Mr. John) on the necessity to make forestry a cash crop every year until it matures. This is an avenue that we must explore.
  On tourism, we have Lord Young's document, "Lifting the Burden", and "Pleasure, Leisure and Jobs: the business of tourism", where we are shifting the restrictions which hold back the development of tourism — easier signposting in the countryside, for example—and if we can do something about some of the planning boards, we will go a long way towards getting more people back into rural areas. The broad-leaved woodland policy for forestry is another example. All these are moves in the right direction.
  What does not help the rural debate is this attempt at a catch-all motion, which seeks to touch on all the nice little things. Party members have obviously done an exercise as the Americans do: they have tried to calculate where there is a little bit for the green vote and the yuppy vote—the SDP no doubt has an analysis of the typical SDP vote — and the Sloane ranger vote. They have identified all these votes and tried to encapsulate them in the motion, so that they can say in their magazines, in Liberal Focus and so on, that they have tonight pressed the Government on all aspects of the rural debate. There is only one thing that the Opposition parties need to do if they want to be credible on agriculture and rural areas: they should tell us their agricultural policy on quotas, how they
  1034
  would deal with surpluses, whether they would rate farmland. If they fail to do that, this motion is a humbug, and I suspected it all the time.
  9.21 pm
  Mr. Robert Maclennan: The fact that this is an important debate has been reflected in the speeches from all sides of the House and in the deep concern that Members feel about the present condition of the rural economy. The hon. Member for Falmouth and Camborne (Mr. Mudd) enlarged upon the concern which has been expressed in Cornwall about the impending collapse of the tin industry, and he elaborated on points made by my hon. Friend the Member for Truro (Mr. Penhaligon) in opening the debate. The Government's failure to save the international tin agreement and to bring about the regulation of the London Metal Exchange, which is having such a catastrophic consequence in Cornwall, is a serious reflection on it.
  The debate has properly ranged widely over the provision of services, housing, schools and many matters that were mentioned by my hon. Friend the Member for Truro on behalf of the alliance; but I propose to concentrate on the condition of agriculture. It is widely recognised that agriculture plays the major part in the rural economy, so it is important to focus on it at the moment.
  On the general rural economy, although I believe that the public is sharply aware of the malign consequences of the Government's policies for the industrial areas and our urban scene, the concern in many parts of the country about the rural economy is increasingly making itself felt. It has come as an unpleasant shock to many former Conservative voters that Conservative policies can wreak as much havoc in the countryside as they do in the beleaguered inner cities. The impact of these policies on the rural areas may be less obvious than in the cities — that I grant — but, like the winter wind, the Government's tooth is not less keen because it is not seen.
  I focus on agriculture because its present condition has been starkly revealed in the Government's own recently published annual review. The prospects for farming could be further harmed if the wrong decisions were taken in the forthcoming price-fixing negotiations in Brussels. Although we shall have an opportunity at a later date to consider in detail the recommendations which are being made, it is appropriate tonight to look at the general and overriding issue which must inform the mind of the Minister when he goes to Brussels — the condition of Britain's farming industry, whose well-being has not been at the forefront of the Minister's mind in past negotiations in Brussels.
  Mr. Nicholas Baker: Will the hon. Gentleman give way?
  Mr. Maclennan: No. My time is limited, and there are many points of substance to be made.
  The collapse of farm incomes in 1985, to which our motion refers, and the huge increase in the level of indebtedness of Britain's farmers can be attributed in part to the appalling weather which we suffered this summer. But it is important to note that the annual review draws attention to the decline in producer prices as well as in the output which has marked this year. Producer prices, even at a time of relative decline, have fallen by 2·5 per cent., compared with an increase in the cost of goods and services to farmers of about 1 per cent.

  1035
  What worries Britain's farmers is that one bad harvest cannot be withstood because of the weakness of the industry induced by the Government's policies. More disturbing than the 43 per cent. drop in income this year — in Scotland it was a 75 per cent. drop — is the underlying downward trend of farm incomes which the Minister failed to acknowledge. It is an underlying downward trend in real terms revealed by the Government's White Paper. Table 26B sets out the position commodity by commodity.
  There is an index of average net farm incomes per farm in the United Kingdom. For dairy farmers, taking 1982–83 as the index year — the year of pre-election induced boom—as 100, farm incomes have dropped to 50. They have been halved and there has been a steady decline year by year. The same is true of the less-favoured area—cattle and sheep. There has been a drop to 50 since 1982–83. Lowland cattle and sheep have gone from 100 to 25 in five years, going clown consistently every year. Those drops are not weather-induced; they have been going on year in, year out, under the Government. The same is true of other cropping. It has been cut from 100 to 30 according to the index. Pigs and poultry, as always, fluctuate around the same level.
  In cereals alone has there been any difference from the general trend, but there too it is as well to remember that today incomes stand at 45 compared with 100 in 1982. They are below what they were when the Government took office.
  Mr. Leigh: Will the hon. Gentleman give way?
  Mr. Maclennan: No, I will not. Questions have been asked, which must be answered.
  The undeniable fact is that real farming income is now some 22 per cent. below its pre-war low in 1980.
  Agriculture's indebtedness has been increased not only by the drop in incomes but by the sharp rise in the cost of servicing the debt in the last year of 2·5 per cent., pushing farming interest charges up by £100 million to £696 million.
  The president of the Scottish National Farmers Union said:
  "A measure of the threat to Scottish agriculture is that interest charges cost Scottish farmers £109 million in 1985, a figure 2½ times as much as the industry's £43 million net income in that year. Every 1 per cent. increase in interest rates cost Scottish farmers around £10 million on a whole year basis—more than the aid which the Government made available to help cope with the £150 million loss caused by last year's exceptionally adverse weather."
  Those are not my words; they are the words of Mr. Ian Grant.
  Land values around the country which were hitherto sustained by the Government's induced optimism about the prospects for farmers, are now under pressure and there is clear evidence that they will fall this autumn.
  That undoubtedly must be a source of considerable anxiety to the lenders of money, who are supporting many near-bankrupt enterprises up and down the country. It is a sign of the times that some institutional investors in agriculture are being brought under pressure to withdraw from agriculture altogether.
  Mr. Maclean: Quite right: get the institutions out. They have caused the problems.
  Mr. Maclennan: The overall volume of farm investment, which was down 12 per cent. last year, has
  1036
  dropped by £100 million. The impact of that on the construction industry in rural areas which are already hard pressed because of cuts in local authority spending, is particularly sharp. Farmers' expenditure on building and works last year has been cut by no less than 23 per cent., the largest post-war cut.
  The impact of these figures on the rural economy goes far beyond the 620,000 people directly employed in the industry. It hits even harder the large number of people who supply the industry and the larger number who supply the industry and process its products.
  As my hon. Friend the Member for Truro (Mr. Penhaligon) said, unemployment is already high in many rural areas, and that will increase if these trends are not halted. There are, however, other trends that are giving cause for alarm.
  Farming is being concentrated in the hands of fewer and fewer people. More and more farms are simply being vacated. That is leaving large and important areas of the country bereft of life. As an example of that trend, more than half the wheat currently produced in this country is grown by less than 10 per cent. of those who produce it.
  The Government must have in mind three factors which account for the deepening agricultural recession. The first is the yo-yoing level of interest rates. These are insupportable by an industry that is over-geared in response to the foolish pre-election promptings of the then Minister of Agriculture, Fisheries and Food, the right hon. Member for Worcester (Mr. Walker). That undirected expansionism amounted to nothing less than cynical irresponsibility.
  The single most important step open to the Government which the alliance advocates to help stabilise interest rates, is entry of the exchange rate mechanism of the European monetary system, to which we devoted an earlier debate today. That is supported by the NFU generally and by the NFU in the Minister's own constituency — I was informed of that on Monday night — and the NFU in Scotland has publicly gone on record as advocating entry of the exchange rate mechanism. It is time that the Minister of Agriculture listened to the case being made for the benefit of the industry. [HON. MEMBERS: "Where is he?"]
  The second factor that is influencing and deepening the recession in the industry is the Government's approach to the reform of the common agricultural policy.
  Mr. Nicholas Baker rose—
  Mr. Maclennan: Although British budgetary expenditure on CAP support schemes appears to have increased by over £400 million in the past year, little of that has found its way into the farmers' pockets. The time has come for the Minister to recognise that the present policies of open-ended price support by means of expensive intervention and export restitution are plainly failing. There is no difference between Liberal Members and SDP Members or between agriculture and the alliance on that issue. The present methods of support are not only failing to exert effective financial control—the Minster seems more concerned about that than about the welfare of farmers—but failing to ensure the fair standard of living for farmers set out as an objective in article 39 of the treaty of Rome.
  The Government amendment to the alliance motion draws attention to the additional £500 million of public

  1037
  expenditure on agriculture this year, but it is notably silent about the £879 million drop in British farm incomes. The present system of setting a single inflexible support price for an open-ended output is a direct inducement to increase production by all possible means. It exacerbates the imbalance between supply and demand and if it is set at a level to guarantee a fair return only for larger units it penalises smaller units and those in less-favoured areas.
  I put forward a preferable alternative. [HON. MEMBERS: "Ah!"] Conservative Members who have been calling for statements of policy would have heard a great deal already if they had not been behaving like the usual rabble. If, instead of an open-ended system of support, limits are placed on the amount of farm produce qualifying for the full guaranteed price and that amount is geared to what can be produced by an efficient family farm, anything produced above that limit can be allowed to find a price level on the open market.
  The House should note the difference between what I am proposing and the old milk quota concept introduced by the Government overnight, without forethought or consideration of the consequences. We are not saying that we will put a ceiling on production. We are saying that we will limit the amount of production eligible for support. Such entitlement to guaranteed support is a valuable asset which should be tradeable to avoid freezing production patterns, but subject to a small proportion of that asset being acquired by national Government for reallocation where required.
  The third factor inducing the continuing and deepening recession is the shocking misdirection of Government public expenditure cuts, notably in capital grants and those which are in the pipeline in research, education and advice services. This has already taken its toll on businesses which supply the industry with plant, machinery and vehicles and is forcing many building contractors in rural areas to the wall.
  Ministers sometimes portray themselves as bound hand and foot by Community decisions over which they claim to have little influence. Many initiatives are not merely permitted but positively encouraged by Community regulations, but the Government have largely failed to respond to them. That is why, while there has been stability of agricultural incomes for the past 10 years in the Community as a whole, in the United Kingdom there have been fluctuations of 10 per cent. to 20 per cent. from year to year since the Conservatives came to office in 1979.
  Mr. Andy Stewart: What about the weather?
  Mr. Maclennan: Is the hon. Gentleman seriously suggesting that other Community countries have not been subject to changes in the weather since 1979?
  Furthermore, agricultural incomes in Britain have tended to lag behind European Community averages. The less-favoured area and structure directives offer scope for the Government to help farming in the hills and uplands and other marginal areas far beyond the opportunities that they have grasped. Those directives reflect an awareness that farming in disadvantaged areas ought to be supported as a means of conserving the environment and rural populations and services.
  The alliance commends to the Government further specific proposals. We urge the Government to make
  1038
  annual payments for the upkeep and construction of environmentally desirable amenities such as dry stone dykes, meadows and footpaths. The Government's new policy, designed to maintain and enhance broadleaved woodlands, on which the hon. Member for Pontypridd (Mr. John) spoke, largely ignores the inability of woodland to produce regular income. An annual management income will be necessary if that policy is to succeed.
  In an age of surplus production, it is blind folly to reduce the funding of research into agricultural commodities. It is needed not only to lower the cost of farmers' input which eats into their profits — by, for example, finding less expensive means of drying crops and eradicating pest and disease — but to find new, biotechnical, markets for agricultural products, particularly cereals. It is needed to encourage the development of new crops which are not in surplus. The introduction of changes of economic activity on agricultural land, including the development of tourism and other rural industries, requires advice and flexibly directed financial assistance.
  The Scottish agricultural colleges have provided invaluable practical help; should be a model to be followed, not a service to be dismantled. Farmers throughout Britain are baffled by the evident lack of a Government strategy for land. Above all, the Minister needs to tell the farming community what he and his colleagues in the Government expect of the industry. The industry will adapt if it is given a lead. The evident lack of concern for the catastrophic fall in farm incomes, exemplified by the Minister's opening speech, and the continuing downward trend of those incomes, suggests that the Government do not accept the challenge. The Social Democratic party and the Liberal party stand ready to take it up.
  Mr. Maclean: On a point of order, Mr. Deputy Speaker. The hon. Gentleman castigated members from the Government Benches for not listening. I listened intently to everything he had to say and did not attempt to interrupt him once. Is it in order for him to refuse to answer the simple question on rates that I put to him?
  Mr. Deputy Speaker: The hon. Gentleman knows that it is up to the hon. Member who has the floor to decide whether he gives way.
  9.41 pm
  The Minister of State, Ministry of Agriculture, Fisheries and Food (Mr. John Selwyn Gummer): When a motion of such importance is put before the House, even though it was not put down until the last moment yesterday, it is necessary, if it is to be treated seriously, for it to be accompanied by some explanation of what the Opposition parties would put in place of the difficulties and dangers that they see. Therefore, Government Members sought an explanation from the hon. Member for Truro (Mr. Penhaligon) about what he would do if he were able to change the situation. He said that that could not be done because it was not for him to tell us and it was to be left to his hon. Friend the Member for Brecon and Radnor (Mr. Livsey).
  Therefore, I listened with great attentiveness to the remarks of the hon. Member for Brecon and Radnor. It was a revealing speech, particularly when compared with

  1039
  the hon. Member for Caithness and Sutherland (Mr. Maclennan). It was another attempt to explain alliance policy.
  I listened with great care to what the hon. Member for Caithness and Sutherland said he would do. It is worth the House remembering that he said that we should join the EMS, review the common agricultural policy and do many things, most of which the Government are already doing.
  Mr. Alex Carlile rose—
  Mr. Gummer: I will not give way. The hon. Member for Caithness and Sutherland (Mr. Maclennan) had the arrogance not to give way to anybody and I have no intention of giving way.
  The fact of the matter is that we have had a debate by two parties which have shown themselves totally unfit to do anything as they have been unable to present any policy. Therefore, for five minutes of my speech I felt it right to acquaint the House with the policy that they actually have.
  I begin with the hon. Member for Caithness and Sutherland (Mr. Maclennan), who is in favour of quotas. He did not mention quotas throughout the whole of his speech—[HON. MEMBERS: "Withdraw."] I am sorry. I withdraw the statement that the hon. Gentleman did not mention quotas. He did not tell us that he was in favour of them during the speech. As his hon. Friend the Member for Ceredigion and Pembroke, North (Mr. Howells) told us in a curious intervention that he was against quotas, we start by suggesting that there is some doubt about the unity in the alliance, which was paraded so much by the hon. Member for Caithness and Sutherland at the end of his speech.
  Let me continue along that line, for it is not only quotas that the hon. Member for Caithness and Sutherland is in favour of—
  Mr. Alex Carlile: Will the right hon. Gentleman give way?
  Mr. Gummer: I told the hon. and learned Gentleman that already much of my time has been taken up by the hon. Member for Caithness and Sutherland, so I shall not give way.
  The hon. Member for Caithness and Sutherland has put forward his policies. He is in favour not only of quotas but of tying down agricultural enterprise in a number of other ways. First, let us see the Social Democratic party's policy, as announced in The Field last week, in which there is an elegant photograph of the hon. Gentleman. The article says:
  "On hill farms there should be stocking limits".
  So no doubt every hill farm in the country will have a stocking limit laid on it by the hon. Gentleman.
  Mr. George Foulkes: What kind of stocking?
  Mr. Gummer: I do not think that the hon. Gentleman's knowledge of agriculture would go as far as distinguishing between the kinds of stocking.
  The hon. Member for Caithness and Sutherland goes further. None of us should miss the Social Democratic party document called "Farming in the rural economy", published in December 1985. There we discover another kernel of SDP agriculture policy, in that it supports
  "the introduction of a statutory minimum weaning age for pigs". [Interruption.] In case there is incredulity, I shall continue the quotation:
  1040
  "There should be a requirement that pigs are not weaned until they are at least three weeks old."
  I do not know how often you have considered the farrowing of pigs, Mr. Deputy Speaker, but, as you may know, there is more than one pig per sow. What happens if the farrowing begins before midnight but ends after midnight? Are the pigs which farrow early to be weaned before those which farrow later on? Is there to be a police force to stamp the piglets as they come out? What about the sows that have fewer teats? I apologise to my hon. Friend the Parliamentary Under-Secretary, but I must say that some pigs have fewer teats than they have piglets. Would they be given special derogation from the SDP policy, if the SDP were to take power? That is only a small part of the SDP's policy. I would not have laid emphasis upon it if the hon. Member for Caithness and Sutherland had given us some other part of his party's policy upon which to concentrate.
  The hon. Gentleman said that we must have a special arrangement for small firms, which was to be a Community arrangement. How would the hon. Gentleman organise that in the Community? The small farm in Britain is, on average, four times as large as the small farm in the rest of the Community. His policy would help every small farm in every country in the Community except Britain. He has not done his homework. That is what happened on the last occasion when we debated an agricultural matter, although we did not have the pleasure of his presence in the Chamber on that occasion, except when he wished to hear the words of his own hon. Friends.
  If only the members of the alliance parties would do the House the courtesy of coming in for the whole debate, but then the alliance parties find it embarrassing. An amendment to motion No. 175 which they put down was signed by 87 of my hon. Friends which pointed out that on the last occasion we heard three totally separate alliance policies on agriculture. We were able to quote for the benefit of the House one or two statements made by the hon. Member for Southwark and Bermondsey (Mr. Hughes). He was kind enough to tell us what the Liberal policy was. He said:
  "The House knows my view that agricultural land should also be subject to planning consent and planning control, in the way that all other land should be."
  So there is the freedom in the countryside to find new jobs. When the hon. Gentleman was criticised for this and it was suggested that it was not the policy of his hon. Friends, either in the SDP or the Liberals, he replied, "That is Liberal policy." Then he said:
  "I know that we have to win the argument with some of the vested interests."—[Official Report, 26 April 1985; Vol. 77, c. 1138-40.]
  The first two people he has to win are the hon. Member for Brecon and Radnor (Mr. Livsey) and the right hon. Member for Tweeddale, Ettrick and Lauderdale (Mr. Steel). They are the two vested interests with whom he has to win his argument.
  The hon. Member for Brecon and Radnor has made it clear to us that he was elected by a farming constituency. We will look with great care at his farming pronouncements. He said that the Government's Bill that is before the House at the moment was good in parts. It is odd that it should be good in parts when he and his hon. Friends voted against it on Second Reading, because it was bad in all parts on that occasion, and, indeed, it was bad

  1041
  in all parts when he was speaking in Wales recently, when he said, "The Government should scrap its new legislation and its new Agriculture Bill."
  We disagree with some of the comments of the hon. Member for Pontypridd (Mr. John), but he put forward a policy. At least we heard a policy from the hon. Gentleman, and in that respect he stood in stark difference — and it explains why his party is the official Opposition party—from the rabble responsible for the policies on the alliance Benches.
  The debate began with a speech from the hon. Member for Truro (Mr. Penhaligon). He was not able to be drawn on the question whether he believed in quotas. He said that he was concerned about the broad sweep backcloth. Would it not be lovely to govern a country on the broad sweep backcloth concept? One does not have to be particular about anything or provide an answer to any question. All one needs to do is to assemble a series of special interests and promise them that they are sequentially closer to one's heart. Whoever one has in one's surgery today becomes the subject of a motion before the House.
  My hon. Friend the Member for Penrith and The Border (Mr. Maclean) raised the question in its starkest form—"Where are the rural telephone boxes of yesteryear?" They are being installed increasingly in the country, but, surprisingly enough, there is no word about them in this motion. For the Opposition parties which put this motion—
  Mr. James Wallace rose—
  Mr. GummerI will not give way. The hon. Gentleman has not been with us today and he is in no position to intervene.
  The hon. Member for Truro went on to deal with rural post offices. I am sure that he has the same experience as I have in my constituency.
  One major difficulty lies in getting people to take on a rural post office—
  Mr. Alex Carlile: Not in my constituency.
  Mr. Gummer: That may not be true in the hon. and learned Gentleman's constituency, but it is profoundly true in my constituency and in the constituencies of a large number of my colleagues. My hon. Friend the Member for Ashford (Mr. Speed) has had exactly the same problem as I have had. The hon. and learned Member for Montgomery (Mr. Carlile) has not looked at his constituency closely enough if he thinks that that is not the case.
  We have to face the issue of rural schools. It is all very well to talk about rural schools, but we all know that in many areas, such as mine, there are small schools because there are fewer children in the villages. [Interruption.] It is not because of the rural population. In many parts of the country, the rural population is increasing. It is a small matter of the birth of babies. I am doing my best about that as my fourth baby is about to arrive, but I cannot do it all and nor can alliance Members.
  It is not right to say that, inevitably, a school of 26 children should be kept in old buildings, meeting a rural need only, with an education that is much less good than that which could be provided in other circumstances.
  Mr. Alex Carlile: The right hon. Gentleman is against village schools.
  Mr. Gummer: The hon. and learned Gentleman should look at my record in my constituency. I am in favour of good village schools. I have supported the closure of those that do not meet needs. The hon. and learned Member is trying to get a few extra selective votes. He is in favour of any village school—good, bad or indifferent; large, small or unimportant. It is a matter of votes, not a matter of caring for the countryside.
  How could the hon. Member for Truro talk about transport when he was clearly unfamiliar with the results of the trials in Norfolk and Hereford? He could not have made that speech if he had known the facts. My hon. Friend the Member for Hereford (Mr. Shepherd) interrupted the hon. Member for Truro but the hon. Gentleman, either purposely or accidentally, misunderstood him. The result was perfectly clear. There had been a slight increase in the number of miles covered by rural buses. In surrounding areas where that freedom did not exist, there had been a marked diminution in rural bus services. That is the basis of our policy.
  My hon. Friend the Member for Falmouth and Camborne (Mr. Mudd) made some tough and clear points about his constituency. He will not expect me to answer those with which I have not—[HON. MEMBERS: "Oh."] Unlike the members of the Liberal party, I answer on those matters in which I have competence and not on those matters that concern other Ministers. Therefore, I shall not answer my hon. Friend's points, but I shall ensure that he receives an answer from the Ministers concerned. My hon. Friend's suggestions are in line with those that we have put forward, especially with respect to planning. Circulars on rural planning issued by the Department of the Environment have been saying that we want local authorities—Liberal local authorities as well as others—to be more sensible and understanding about jobs in rural communities. That is why we have issued those circulars. We hope that we can press local authorities to do that.
  We shall not get anywhere by listening to the answers put forward by the alliance parties. They have asked the House to believe that to give a general catalogue of the woes and problems that can be found at any time under any Government in any section of the community is sufficient. That is sufficient only if the alliance parties can add to that catalogue a positive programme of improvements. They have failed to talk about this. Our policies assist the environment. Alliance Members voted against the conservation legislation and all the improvements put forward by the Government. They voted against the improvements we proposed in the broad-leaf woodland measures that we put before the industry and that are now being debated—
  Mr. David Alton rose in his place and claimed to move, That the Question be now put.
  Question, That the Question be now put, put and agreed to.
  Question put accordingly, That the original words stand part of the Question:—
  The House divided: Ayes 146, Noes 262.

  Division No. 56]

  [10 pm

  AYES

  Adams, Allen (Paisley N)

  Atkinson, N. (Tottenham)

  Alton, David

  Barnett, Guy

  Archer, Rt Hon Peter

  Beckett, Mrs Margaret

  Ashdown, Paddy

  Beith, A. J.

  Ashton, Joe

  Benn, Rt Hon Tony

  1043

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

  Jones, Barry (Alyn & Deeside)

  Bermingham, Gerald

  Kennedy, Charles

  Boothroyd, Miss Betty

  Kirkwood, Archy

  Boyes, Roland

  Lamond, James

  Brown, Gordon (D'f'mline E)

  Leadbitter, Ted

  Brown, Hugh D. (Provan)

  Leighton, Ronald

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

  Litherland, Robert

  Brown, Ron (E'burgh, Leith)

  Livsey, Richard

  Bruce, Malcolm

  Lloyd, Tony (Stretford)

  Buchan, Norman

  Lofthouse, Geoffrey

  Callaghan, Jim (Heyw'd & M)

  Loyden, Edward

  Campbell-Savours, Dale

  McDonald, Dr Oonagh

  Carlile, Alexander (Montg'y)

  McKay, Allen (Penistone)

  Clark, Dr David (S Shields)

  McKelvey, William

  Clarke, Thomas

  Maclennan, Robert

  Clay, Robert

  McNamara, Kevin

  Clelland, David Gordon

  McTaggart, Robert

  Clwyd, Mrs Ann

  McWilliam, John

  Cocks, Rt Hon M. (Bristol S)

  Marek, Dr John

  Cohen, Harry

  Marshall, David (Shettleston)

  Cook, Frank (Stockton North)

  Martin, Michael

  Cook, Robin F. (Livingston)

  Mason, Rt Hon Roy

  Corbett, Robin

  Maxton, John

  Corbyn, Jeremy

  Maynard, Miss Joan

  Craigen, J. M.

  Meadowcroft, Michael

  Crowther, Stan

  Michie, William

  Cunliffe, Lawrence

  Mitchell, Austin (G't Grimsby)

  Davies, Ronald (Caerphilly)

  Nellist, David

  Davis, Terry (B'ham, H'ge H'l)

  O'Neill, Martin

  Deakins, Eric

  Owen, Rt Hon Dr David

  Dewar, Donald

  Park, George

  Dixon, Donald

  Patchett, Terry

  Dormand, Jack

  Pavitt, Laurie

  Douglas, Dick

  Pendry, Tom

  Dubs, Alfred

  Penhaligon, David

  Dunwoody, Hon Mrs G.

  Pike, Peter

  Eadie, Alex

  Powell, Raymond (Ogmore)

  Eastham, Ken

  Prescott, John

  Ewing, Harry

  Radice, Giles

  Field, Frank (Birkenhead)

  Randall, Stuart

  Fields, T. (L'pool Broad Gn)

  Rees, Rt Hon M. (Leeds S)

  Fisher, Mark

  Roberts, Ernest (Hackney N)

  Flannery, Martin

  Robertson, George

  Foot, Rt Hon Michael

  Robinson, G. (Coventry NW)

  Forrester, John

  Sheerman, Barry

  Foster, Derek

  Shore, Rt Hon Peter

  Foulkes, George

  Short, Ms Clare (Ladywood)

  Fraser, J. (Norwood)

  Silkin, Rt Hon J.

  Freud, Clement

  Skinner, Dennis

  George, Bruce

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

  Gilbert, Rt Hon Dr John

  Soley, Clive

  Gould, Bryan

  Steel, Rt Hon David

  Gourlay, Harry

  Stewart, Rt Hon D. (W Isles)

  Hamilton, James (M'well N)

  Thomas, Dafydd (Merioneth)

  Hancock, Michael

  Thomas, Dr R. (Carmarthen)

  Harman, Ms Harriet

  Tinn, James

  Harrison, Rt Hon Walter

  Wainwright, R.

  Haynes, Frank

  Wardell, Gareth (Gower)

  Hogg, N. (C'nauld & Kilsyth)

  Wareing, Robert

  Holland, Stuart (Vauxhall)

  Weetch, Ken

  Home Robertson, John

  Welsh, Michael

  Howells, Geraint

  Wigley, Dafydd

  Hoyle, Douglas

  Williams, Rt Hon A.

  Hughes, Robert (Aberdeen N)

  Winnick, David

  Hughes, Roy (Newport East)

  Wrigglesworth, Ian

  Hughes, Sean (Knowsley S)

  Young, David (Bolton SE)

  Hughes, Simon (Southwark)

  Jenkins, Rt Hon Roy (Hillh'd)

  Tellers for the Ayes:

  John, Brynmor

  Mr. John Cartwright and

  Johnston, Sir Russell

  Mr. James Wallace.

  NOES

  Aitken, Jonathan

  Baker, Nicholas (Dorset N)

  Alison, Rt Hon Michael

  Baldry, Tony

  Ancram, Michael

  Banks, Robert (Harrogate)

  Arnold, Tom

  Batiste, Spencer

  Ashby, David

  Beaumont-Dark, Anthony

  Atkins, Rt Hon Sir H.

  Bendall, Vivian

  Atkins, Robert (South Ribble)

  Bevan, David Gilroy

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

  Biffen, Rt Hon John

  1044

  Body, Sir Richard

  Heseltine, Rt Hon Michael

  Bonsor, Sir Nicholas

  Hickmet, Richard

  Boscawen, Hon Robert

  Hirst, Michael

  Bottomley, Mrs Virginia

  Hogg, Hon Douglas (Gr'th'm)

  Braine, Rt Hon Sir Bernard

  Holland, Sir Philip (Gedling)

  Brandon-Bravo, Martin

  Holt, Richard

  Bright, Graham

  Howard, Michael

  Brown, M. (Brigg & Cl'thpes)

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

  Browne, John

  Howarth, Gerald (Cannock)

  Bryan, Sir Paul

  Howell, Ralph (Norfolk, N)

  Buchanan-Smith, Rt Hon A.

  Hubbard-Miles, Peter

  Buck, Sir Antony

  Hunt, David (Wirral W)

  Budgen, Nick

  Hunt, John (Ravensbourne)

  Bulmer, Esmond

  Hunter, Andrew

  Burt, Alistair

  Hurd, Rt Hon Douglas

  Butcher, John

  Jackson, Robert

  Carttiss, Michael

  Jones, Gwilym (Cardiff N)

  Chope, Christopher

  Jones, Robert (Herts W)

  Churchill, W. S.

  Kellett-Bowman, Mrs Elaine

  Clark, Sir W. (Croydon S)

  Key, Robert

  Clarke, Rt Hon K. (Rushcliffe)

  King, Roger (B'ham N'field)

  Clegg, Sir Walter

  Knight, Greg (Derby N)

  Cockeram, Eric

  Knowles, Michael

  Conway, Derek

  Knox, David

  Coombs, Simon

  Lang, Ian

  Cope, John

  Latham, Michael

  Cormack, Patrick

  Lawler, Geoffrey

  Cranborne, Viscount

  Lee, John (Pendle)

  Currie, Mrs Edwina

  Leigh, Edward (Gainsbor'gh)

  Dorrell, Stephen

  Lennox-Boyd, Hon Mark

  Douglas-Hamilton, Lord J.

  Lester, Jim

  Dunn, Robert

  Lewis, Sir Kenneth (Stamf'd)

  Durant, Tony

  Lightbown, David

  Dykes, Hugh

  Lilley, Peter

  Emery, Sir Peter

  Lloyd, Peter (Fareham)

  Eyre, Sir Reginald

  Lord, Michael

  Fairbairn, Nicholas

  Lyell, Nicholas

  Favell, Anthony

  McCurley, Mrs Anna

  Fenner, Mrs Peggy

  MacGregor, Rt Hon John

  Fletcher, Alexander

  MacKay, Andrew (Berkshire)

  Fookes, Miss Janet

  MacKay, John (Argyll & Bute)

  Forman, Nigel

  Maclean, David John

  Forsyth, Michael (Stirling)

  McNair-Wilson, M. (N'bury)

  Forth, Eric

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

  Fox, Marcus

  McQuarrie, Albert

  Franks, Cecil

  Major, John

  Fraser, Peter (Angus East)

  Malins, Humfrey

  Freeman, Roger

  Maples, John

  Fry, Peter

  Marland, Paul

  Gale, Roger

  Marlow, Antony

  Galley, Roy

  Marshall, Michael (Arundel)

  Gardner, Sir Edward (Fylde)

  Mather, Carol

  Garel-Jones, Tristan

  Mayhew, Sir Patrick

  Glyn, Dr Alan

  Mellor, David

  Goodhart, Sir Philip

  Merchant, Piers

  Gorst, John

  Meyer, Sir Anthony

  Gow, Ian

  Miller, Hal (B'grove)

  Gower, Sir Raymond

  Mills, Iain (Meriden)

  Grant, Sir Anthony

  Miscampbell, Norman

  Greenway, Harry

  Mitchell, David (Hants NW)

  Gregory, Conal

  Moate, Roger

  Griffiths, Sir Eldon

  Montgomery, Sir Fergus

  Griffiths, Peter (Portsm'th N)

  Morrison, Hon P. (Chester)

  Ground, Patrick

  Moynihan, Hon C.

  Gummer, Rt Hon John S

  Mudd, David

  Hamilton, Hon A. (Epsom)

  Neale, Gerrard

  Hamilton, Neil (Tatton)

  Newton, Tony

  Hampson, Dr Keith

  Nicholls, Patrick

  Hanley, Jeremy

  Norris, Steven

  Hargreaves, Kenneth

  Onslow, Cranley

  Harris, David

  Oppenheim, Phillip

  Harvey, Robert

  Osborn, Sir John

  Haselhurst, Alan

  Page, Richard (Herts SW)

  Hawkins, C. (High Peak)

  Parris, Matthew

  Hayes, J.

  Patten, Christopher (Bath)

  Hayhoe, Rt Hon Barney

  Pattie, Geoffrey

  Hayward, Robert

  Pawsey, James

  Heathcoat-Amory, David

  Peacock, Mrs Elizabeth

  Heddle, John

  Pollock, Alexander

  Henderson, Barry

  Portillo, Michael

  1045

  Powell, William (Corby)

  Stradling Thomas, Sir John

  Powley, John

  Sumberg, David

  Prentice, Rt Hon Reg

  Tapsell, Sir Peter

  Proctor, K. Harvey

  Taylor, John (Solihull)

  Raffan, Keith

  Taylor, Teddy (S'end E)

  Rhodes James, Robert

  Terlezki, Stefan

  Rhys Williams, Sir Brandon

  Thatcher, Rt Hon Mrs M.

  Ridley, Rt Hon Nicholas

  Thomas, Rt Hon Peter

  Ridsdale, Sir Julian

  Thompson, Donald (Calder V)

  Rifkind, Rt Hon Malcolm

  Thompson, Patrick (N'ich N)

  Rippon, Rt Hon Geoffrey

  Thorne, Neil (Ilford S)

  Roberts, Wyn (Conwy)

  Thornton, Malcolm

  Robinson, Mark (N'port W)

  Thurnham, Peter

  Roe, Mrs Marion

  Townend, John (Bridlington)

  Rossi, Sir Hugh

  Townsend, Cyril D. (B'heath)

  Rost, Peter

  Tracey, Richard

  Rowe, Andrew

  Trotter, Neville

  Rumbold, Mrs Angela

  Twinn, Dr Ian

  Ryder, Richard

  Vaughan, Sir Gerard

  Sackville, Hon Thomas

  Viggers, Peter

  Sainsbury, Hon Timothy

  Waddington, David

  St. John-Stevas, Rt Hon N.

  Wakeham, Rt Hon John

  Sayeed, Jonathan

  Waldegrave, Hon William

  Shaw, Giles (Pudsey)

  Walden, George

  Shaw, Sir Michael (Scarb')

  Walker, Bill (T'side N)

  Shelton, William (Streatham)

  Waller, Gary

  Shepherd, Colin (Hereford)

  Wardle, C. (Bexhill)

  Shersby, Michael

  Warren, Kenneth

  Silvester, Fred

  Watson, John

  Sims, Roger

  Watts, John

  Skeet, Sir Trevor

  Wells, Bowen (Hertford)

  Smith, Tim (Beaconsfield)

  Wheeler, John

  Soames, Hon Nicholas

  Whitney, Raymond

  Speed, Keith

  Wiggin, Jerry

  Spence, John

  Winterton, Mrs Ann

  Spencer, Derek

  Winterton, Nicholas

  Spicer, Jim (Dorset W)

  Wolfson, Mark

  Squire, Robin

  Wood, Timothy

  Stanbrook, Ivor

  Woodcock, Michael

  Stanley, Rt Hon John

  Yeo, Tim

  Steen, Anthony

  Younger, Rt Hon George

  Stern, Michael

  Stevens, Lewis (Nuneaton)

  Tellers for the Noes:

  Stewart, Allan (Eastwood)

  Mr. Michael Neubert and

  Stewart, Andrew (Sherwood)

  Mr. Francis Maude.

  Question accordingly negatived.
  Question, That the proposed words be there added, put forthwith pursuant to Standing Order No. 33 (Questions on amendments), and agreed to.
  Mr. Speaker forthwith declared the main Question, as amended, to be agreed to.
  Resolved,
  That this House notes that the rate support grant settlement is a recognition of the undoubted needs of inner cities but involves a shift of only 2 per cent. overall in the grant paid to shire areas; welcomes the provisions of the Transport Act 1985 which are designed to check the decline in rural bus services and to stimulate new services; welcomes the Government's initiatives on conservation and the rural economy; notes the extra public spending of £500 million this year on agriculture; and welcomes, in particular, the special payments to livestock farmers in those areas worst affected by adverse weather and the recent increases in hill livestock compensatory payments.

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

      LOCAL LOANS
      That the draft Local Loans (Increase of Limit) Order 1986, which was laid before this House on 13th January, be approved. —[Mr. Maude.]
      Question agreed to.

    HOUSE OF COMMONS (SHORT SPEECHES)
    Question proposed,
    That—
    (1) For the remainder of the present Session Mr. Speaker may announce at the commencement of public business that, because of the number of Members wishing to speak in a debate on one of the matters specified in paragraph (2) of this Order, he will call Members either between six o'clock and ten minutes before eight o'clock or between seven o'clock and ten minutes before nine o'clock, on Monday to Thursday sittings, and between half-past eleven o'clock and one o'clock on Friday sittings, to speak for not more than ten minutes; and whenever Mr. Speaker has made such an announcement he may, between those hours, direct any Member who has spoken for ten minutes in such a debate to resume his seat forthwith;
    (2) This Order shall apply to debates on:

    (a) the second reading of public bills;

    (b) matters selected under paragraph (2) of Standing Order No. 6 (Arrangement of public business) for consideration on allotted Opposition days; and

    (c) motions in the name of a Minister of the Crown.

    Hon. Members: Object.

  Members' Secretaries and Research Assistants
  10.15 pm
  The Lord Privy Seal and Leader of the House of Commons (Mr. John Biffen): I beg to move,
  That the recommendations contained in paragraph 24 of the Second Report of the Select Committee on House of Commons (Services) in Session 1984–85 (House of Commons Paper No. 195) be approved; and that no Member shall at any one time be entitled to more than one pass for a temporary research assistant from overseas.
  We last discussed the role and numbers of research assistants on 12 July. It was on a motion for the Adjournment, and I undertook to come back to the House with a view to taking decisions. Since our previous debate, the Accommodation and Administration Sub-Committee, under the chairmanship of the right hon. Member for Lewisham, Deptford (Mr. Silkin), has looked again at the way in which its recommendations might be implemented. The motion before us not only reflects its report, but the resolution of the Services Committee of 16 December, which addressed a point raised by the right hon. Member for Swansea, West (Mr. Williams). I speak for the whole House in expressing gratitude to the right hon. Member for Deptford and the Members of his Sub-Committee for their careful and considered work.
  Hon. Members may find it helpful if I remind them of what the Sub-Committee recommended. The Committee's view was that no more than 150 passes per calendar year and no more than 50 at any one time should be issued to temporary researchers from overseas who would be here for less than four months. Otherwise, temporary research assistant passes should be issued only if the Member undertook that the individual in question would be employed for more than four months. Those who did not qualify under either of those provisions should be issued with a temporary secretary's pass only, and should no longer be able to use the Branch Library either in person or by telephone. The Sub-Committee further recommended that no Member should at any one time be entitled to more than one pass out of the 50 for a temporary research assistant from overseas.
  The right hon. Member for Deptford will be able to set out more fully and more eloquently than I why those recommendations would benefit the House. I believe that they represent a measured and reasonably practical response to the problems arising from the pressure on our facilities caused by the numbers of research assistants.
  Mr. George Foulkes: Does the Leader of the House agree that the pressure does not come because we want more research assistants but because the present accommodation is completely inadequate? Compared with any legislature in any civilised country, this legislature is appalling. When will he address his mind to the real problem of providing proper facilities, not so that we can be comfortable but so that our staff can work in proper accommodation and we can provide reasonable services for our constituents?
  Mr. Biffen: Never has so brief a speech accommodated so weighty an intervention. I completely disagree with the hon. Gentleman's premise; the more accommodation we have the more pressure there will be for more and more research assistants.
  1048
  The concern which prompted the Sub-Committee's investigation, that the number of passes issued to Members' staff had risen by 23 per cent. over the past 10 years or so to more than 1,000, is still there. Restricting the number of passes available to the temporary research assistants from overseas is, of course, a limitation on only one class of staff, but it would have an immediate effect. At present, there are 77 such passes; acceptance of this motion would reduce that to 50 at the most.
  Mr. John Browne: Why is that proposal restricted to overseas research assistants? Surely it would be fairer to have a limitation on temporary research assistants and not to discriminate against overseas research assistants?
  Mr. Biffen: The right hon. Member for Deptford will comment more authoritatively than I on that point. I believe that that problem originally arose in the Services Committee in the context of overseas research assistants.
  The House will have noted also the more wide-ranging substantive amendment to the motion, in the name of my hon. Friend the Member for Woking (Mr. Onslow). This suggests a more rigorous line in seeking to curtail access to the Palace, and its terms are self-explanatory. Without distinguishing between the types of passes available to different categories of staff, it would mean that, of the assistants and secretaries that an hon. Member had working for him, only two would be able to use facilities within the Palace of Westminster. I believe there is general merit in that proposal. It does not interfere with an hon. Member's right to employ as many staff as he wishes, but it prevents a large number of research assistants from being a disproportionate burden on the Library and the other services available in the House.
  Dr. Keith Hampson: With all respect, that is not the case. We are talking about temporary passes which already prohibit their holders from entering the Library. Surely it is wrong in principle that hon. Members should be restricted in the number of people they can use or hire?
  Mr. Biffen: My hon. Friend asserts a point of view which I understand, but my hon. Friend the Member for Woking will make his speech and defend his proposal.. However, I wish to make it clear that he is talking not about temporary passes but about passes both temporary and permanent.
  Mr. Austin Mitchell: Since the best way to reduce the number of temporary passes is to increase the number of full-time passes for full-time research assistants, will the Leader of the House tell us what improvement he proposes in the allocation of money to hon. Members to employ full-time research assistants, in recompense for the reduction in temporary assistants?
  Mr. Biffen: It is not a question of reducing the number of research assistants that an hon. Member may employ, but of reducing the number who have access to the full facilities of the Palace. I do not wish to anticipate my hon. Friend's speech. There will always be endless excuses for raising the emoluments to hon. Members for the conduct of their business, and I understand why the hon. Gentleman wishes to trailer that proposition now. However, we have sufficient within our ambit to take a judgment on the terms before us, leaving aside the question of the secretarial research allowance. So that we

  1049
  can have the matter authoritatively recorded, there are provisions for that allowance to be reconsidered, and that will be undertaken in the terms that I have already announced to the House.
  Several Hon. Members rose—
  Mr. Biffen: I shall give way, but may I crave the indulgence of the House? This is a 90-minute debate, I have a short speech, and I can guarantee that the interruptions now exceed the length of my speech. I shall give way to my hon. Friends and other hon. Gentlemen, but I hope that after that I may conclude, so that all hon. Members who wish to participate can do so.
  Mr. Anthony Beaumont-Dark: Does my right hon. Friend agree that one of the great benefits of limiting the number of assistants is that that will limit the dry rot that goes through this place? Every week questions grow; for example 256 questions were tabled on education. The fewer assistants we have, the fewer questions will be tabled, and the more we shall get the real benefit of the House.
  Mr. Biffen: I am anxious to play my part in contributing to the calm and measured consideration of these matters. I note that my hon. Friend makes a pertinent point. Many of the most experienced parliamentarians have operated in the House without any particular and obvious assistance.
  Dr. Alan Glyn: Does my right hon. Friend agree that there is a physical limit to the number of people who can occupy the Palace of Westminster? Therefore, there must be a limit to the number of research assistants who can use the Library and other facilities.
  Mr. Biffen: My hon. Friend makes a fair point. It is perfectly pertinent to observe that the argument is not merely about the number of research assistants that may be employed, but the number who may have access to the full facilities of the Palace.
  Mr. David Alton: The Leader of the House suggested that, because of the pressure on facilities such as the Library, we should withdraw passes from some people who may haye access to those facilities. If he found that in Shropshire, for example, there was pressure on the public library system, would he be in favour of withdrawing facilities from the users of those libraries?
  Mr. Biffen: I would certainly have to consider how one would cope, given the limited facilities available and the considerable pressure upon them. We are in a totally non-market situation and cannot use the price mechanism in any way to regulate the use of facilities. [Interruption.] It is not a matter of being paid up. We have to consider some of the factors that weighed with the right hon. Member for Deptford when he was considering the matter of overseas research assistants and whether that involved access to our facilities which we thought to be most appropriate. In the conduct of our affairs we, like any other institution, should be ruled by some sense of priority.
  Mr. Barry Sheerman: The right hon. Gentleman must accept that this is the least resourced Parliament in the western world. Hon. Members do not
  1050
  want to use quill pens, and if the physical facilities limit the work we can do, why is it not possible for the House to rent some of the perfectly good offices that are available opposite this Palace?
  Mr. Biffen: Once again, it comes down to consideration of resources. This House should not be ashamed to face the challenge of resource allocation in respect of its own administration and its own activities. That applies to society elsewhere.
  Mr. Kevin McNamara rose—
  Mr. Biffen: No, I have given way generously and I have an obligation to the House to bring my remarks to a conclusion. I hope that we shall hear from the hon. Member for Kingston upon Hull, North (Mr. McNamara) during this debate, because he has unique experience of the matter.
  This restriction will not be an intolerable restraint on Members. More than 250 Members presently manage without any research assistants having access to the Palace.
  I realise that some hon. Members may find the terms of the amendment draconian. While it may seem that if any limit is imposed it should be imposed on all Members alike, I see some difficulties inherent in this approach. For example, it does not recognise the responsibilities of those who shadow Government Ministers. Their duties could well require greater secretarial and research support than those of Members who do not have that role. Indeed, the special position of Opposition spokesmen is already recognised by the provision of Short money. If the amendment is accepted by the House, we should find some means of tempering its rigour for those in the posts I have described.
  Having set out my own views on this matter, I do not propose to detain the House further. Because this is a House matter which relates solely to the way in which we decide to regulate our methods of work, there will be a free vote. I shall vote for the motion and for the amendment, should it be pressed. I commend the motion to the House.
  Mr. Speaker: I have selected the two amendments in the name of the hon. Member for Woking (Mr. Onslow).
  10.28 pm
  Mr. John Silkin: The Leader of the House at least deserves credit, and I propose to give it to him, for bringing this subject back to the House. It was after all, only in March last year that the hon. Member for Hereford (Mr. Shepherd) and I recommended it to the Services Committee and a delay of 15 months or so before this is likely to come into operation is really fast going for the Leader of the House.
  I must apologise to the Leader of the House, because on 12 July when we debated this matter in full I thought he would never bring it back again, but he has brought it back within seven months. Again, he deserves to be congratulated. Before dealing with the matter, I should like to comment on a point made by my hon. Friend the Member for Carrick, Cumnock and Doon Valley (Mr. Foulkes) and by other hon. Members on both sides of the House. It is the lack of accommodation for hon. Members in this House. It is a crying scandal, which apparently the Leader of the House thinks is a perfectly reasonable way of conducting our operations. That is what he said. Of

  1051
  course, the Leader of the House is in contact with the right hon. Member for Oswestry, who charged me with the chairmanship of the committee to expedite new buildings for Members of Parliament so that they might have more accommodation. That is exactly what we are trying to do. I hope hon. Members have read the report on Cannon row, because we hope to make that available to the House, with the consent, I think, of both the right hon. Member for Oswestry and the Leader of the House, and of the Services Committee. We hope to make that available to the House at the earliest possible moment.
  Mr. Biffen: A very fair point. To bring the right hon. Gentleman up to date it is, alas, Shropshire, North.
  Mr. Silkin: At least the right hon. Gentleman is up to date on that, if on nothing else. Is it not the position that hon. Gentlemen throughout the House are cramped for resources and for the help that can be given to them? I am not going into the question of finance or how that should be overcome. That is a different matter, which should form part of another debate which will, no doubt, take place later in the Session. There is a shortage of accommodation for hon. Members, for their secretaries and for their assistants.
  Mr. Gerrard Neale: I accept that what the right hon. Gentleman says is generally true. Does he not agree that there is, nevertheless, a considerable differential between the facilities that some right hon. and hon. Gentlemen enjoy and those that others have? For example, some years ago my right hon. Friend occupied a desk in the Cloisters which I later occupied. To think of having research assistants there was intolerable. Now I am fortunate to have a room where a research assistant can work and I have no need to call on other House facilities. I may not be able to get one of the passes, in which case the position would be nonsensical.
  Mr. Silkin: The hon. Gentleman is saying two things. The first is that the Leader of the House now has splendid accommodation. Indeed he has, because I have visited him there. The Chairman of the Accommodation and Administration Sub-Committee also, as is proper, has very good accommodation. So he should have, or he would be a bad Chairman of that Sub-Committee. However, many hon. Gentlemen do not have good accommodation.
  There are two priorities. We must get on with providing accommodation. That is what the New Building Sub-Committee is doing reasonably well, I hope. It is also what the Accommodation and Administration Sub-Committee is trying to do by making Cannon row police station, which has been vacated by the police, available to the House for as much accommodation as possible.
  We are faced with a dilemma and the Services Committee asked the hon. Member for Hereford and me, as joint chairmen of an ad hoc committee, to examine the pressure on resources caused by temporary overseas research assistants. I agree with those hon. Gentlemen who say they have a perfect right to be assisted by whatever people they wish. They know how they want to do their job. Why the Leader of the House or anybody else in the House should think he has the right to interfere, 1 cannot see.
  Difficulty arises because of pressure. When there is pressure, one must seek a balance between the two opposing rights — the right of hon. Gentlemen to be
  1052
  assisted in the work they do and the right of other hon. Gentlemen to be able to do their task without facilities being unavailable to them because of overcrowding.
  Mr. Beaumont-Dark: I recognise the point that the right hon. Gentleman is making, which is the right of hon. Members to have assistants to help them in the House. Surely, the most important right of all is that Members of Parliament are elected here to do their work here. If they wish to have assistants, let them be outside the House. Why should the House be trammelled with assistants? The right hon. Member for Down, South (Mr. Powell) has managed to make a most wonderful contribution to the House without even an office, let alone an assistant.
  Mr. SilkinThe right hon. Member for Down, South (Mr. Powell) is the right hon. Member for Down, South. He is someone entirely on his own. I do not possess his intellectual ability or his quickness of mind; and I do not think that most hon. Gentlemen possess that quickness of mind either. We all need some assistance. The fact of the matter is that hon. Members have secretaries in the House. The point that the hon. Gentleman made applies equally to secretaries. On that basis, why have them here? Yet it is accepted and we believe it to be right. The hon. Gentleman is making a false point. Furthermore, if he listened he would see that what we are really talking about is striking the right balance. I do not know whether the hon. Member for—
  Dr. Hampson rose—
  Mr. Silkin: If the hon. Gentleman will just let me finish—I do not know whether the hon. Member for Hereford and I struck the right balance, but I think that we did. If we did not, it is extraordinary that in all these months there have been no objections whatsoever to the report that we made to the House or following the debate of 12 July 1985.
  Dr. Hampson: I am grateful to the right hon. Gentleman. There is no real difference between many Members on both sides of the House that a balance ought to be struck, bur there is a physical problem in the accommodation. There is also a matter of principle, and that is confused by the element of security. I speak as one who has, at the most, one research assistant a year, so it does not bother me practically if this is passed. However, it bothers me in principle. The whole issue must be about security because, with the present security measures, unless people have a pass they cannot be used here. It is not a matter of whether they have access to the Library or whether there is too much pressure on it, it is a question of access to the buildings of the Palace of Westminster.
  Mr. Silkin: That is absolutely right, but the fact remains that, having got in here, they will be using certain facilities.
  When we came to consider those facilities, the hon. Member for Hereford and I, and those members of our Sub-Committee who were present, found a very interesting situation. In a couple of cases there were sponsoring organisations of research students from the United States, in particular, who disciplined their students extremely well — we were very impressed with the measures that they took—and who were prepared to go on doing so, and to teach them what was necessary about the House.
  Mr. Austin Mitchell: Does my right hon. Friend accept that even with these organisations the research assistants that they provide are often here for two or, at most, three days a week, not for the full week? In other words, in passing this motion, we shall be depriving ourselves of research assistants for the rest of the week not covered by those part-timers.
  When it comes to the definition of overseas, it is clear that overseas students cannot be Common Market students because that would be to discriminate against the Common Market, in a way in which I am sure that both my right hon. Friend and I would want but which would not be legally tenable. So it is, strictly speaking, discrimination against American students. How can that be justified?
  Mr. Beaumont-Dark: How many research assistants have you got?
  Mr. Austin Mitchell: Five.
  Mr. Speaker: Order.
  Mr. Silkin: There are two points to be answered here, although I would have preferred to reach them in my own time. My hon. Friend has rather anticipated the way in which I was going to conduct this.
  My hon. Friend is asking about those research assistants whom he employs for perhaps two or three days a week. He says that the rest of the time they are students, and so on. If it is essential for him to have research work done the whole of the week, there is no reason on earth why he should not so organise his time that he employs one research assistant for two or three days. If he wishes, he can have a temporary secretary who cannot use the Library facilities for the rest of the time. It is all a matter of organising one's work.
  Mr. McNamara rose—
  Mr. Douglas Hogg: Will the hon. Gentleman please adjust his clothes before leaving?
  Mr. McNamara: I always give up my seat to a lady on a public convenience.
  My right hon. Friend's point is at issue. If the problem is one of access to and pressure on the Library, we all understand and accept that an hon. Member can have only one full-time research assistant for five days a week who has access to the Library. That is sensible and understandable. But much of the work that is done is done on the telephone without the need to go outside an hon. Member's office. That is now being restricted and that is what we find most reprehensible. Those who have private means can get the work done by private companies or interests and in that way the independence of Members is impinged upon. That is what we object to.
  Mr. Silkin: What my hon. Friend is objecting to is reading the recommendations because were he to read them he would see that it is possible to get what is called a temporary secretary pass and, as I think my hon. Friend knows, some research workers do have such passes. The only difference is that they will not be able to use the Library. They can work in my hon. Friend's room perfectly well. The problem arises because of the overuse of public facilities. [Interruption.] I would hate to deprive the hon. Member for Birmingham, Selly Oak (Mr. Beaumont Dark) of the use of the Library. I am sure it would be a very good thing for him to have.
  Mrs. Elaine Kellett-Bowman: It cannot conceivably be possible for any hon. Member to have five assistants using the facilities. Some have seven or even eight. Is the right hon. Gentleman aware that only last night somebody mentioned to me that he had been approached by an American who did not want any money for his services? All he wanted to be able to do was to go back to America and put on his curriculum vitae that he had worked in the House of Commons. For that privilege, we are to be crowded out.
  Mr. Silkin: I do not think that that is a question for me. I plead guilty to not having five research assistants. Furthermore, I do know that there are people who are quite pleased to have the initials "MP" after their name whom I would not vote for in any circumstances.
  The House had a good round at the reasons for limitation before. I look forward to the days when we will not have to limit any research assistants or secretaries. But that day will come when we have enough accommodation, not when we are overcrowded as we are at the moment.
  Let me on this cold January day remind hon. Members what it is like in midsummer when the Terrace is full or overfull. We all know about that. We have all experienced it. Of course, something must be done. At the moment, we have to strike a balance.
  Mr. McNamara: They do not have the right to go on the Terrace.
  Mr. Silkin: I am talking about the use of facilities, which is a matter of great importance to hon. Members.
  The one difference between the recommendations put before the House on 12 July and those before it today is the proposal that only one pass at a time shall be available for an overseas student.
  Mr. Austin Mitchell: What does that mean?
  Mr. Silkin: It means a temporary overseas student who will be here for less than four months. My hon. Friend can look up the recommendation for himself. I do not want to waste time going over what went on in July when my hon. Friend was abed and I was awake.
  Mr. Mitchell: I was here.
  Mr. Silkin: In that case, why did my hon. Friend not intervene then? Why has it taken him seven months? He is as bad as the Leader of the House.
  In July we said that there should be no more than 50 such students at any one time and 150 in any calendar year. My right hon. Friend the Member for Swansea, West (Mr. Williams) made a very valid point, reported at columns 1392-93 of Hansard. He said that we might be in danger of leaving the decision-making, as it were, to Back Benchers, and that that would be invidious — [HON. MEMBERS: "Oh!"]—in the sense that one hon. Member might get five research assistants while another got none. My right hon. Friend did not regard that as a particularly fair way to arrange things. By limiting the availability of temporary overseas student research assistants to one per Member we are being as fair as we possibly can.
  In our Sub-Committee the hon. Member for Hereford and I found that 50 at any one time and 150 in any calendar year was about right. Hon. Members can read the evidence and see the justification for themselves. That was the basis that we took and the House did not object to it at that time. Some hon. Members want to go much further and abolish research assistants altogether—we have heard from one

  1055
  or two of them — but no one from that time to this suggested that the steps that we were taking were bad in themselves.
  Mr. Sheerman: Many of us took part in the debate seven months ago and although we did not like all the recommendations we accepted that they were fair enough, but the Select Committee then changed this recommendation to one pass. That fundamental change in the recommendations was not debated in the House.
  Mr. Silkin: My hon. Friend misjudges us a little. We were asked to consider what had been said in the debate. Because my right hon. Friend the Member for Swansea, West and others had suggested that it might be unfair to allow one Member to have a large number of research assistants out of the 50 while others had none, we decided—it is for the House to judge that decision—that the best thing to do was to ration them to one at a time. That is how we reached our decision. I do not think that it is a particularly vital decision or a particularly bad one. There must be some form of rationing and I think that this is a fairly reasonable one.
  What I think is totally unreasonable is the amendment put down by the hon. Member for Woking (Mr. Onslow). Here I find myself declaring an interest. The House will be delighted to hear that I shall preserve my record of being totally biased. As it happens, I have two secretaries and one research assistant, all of them permanent. I have no temporaries. If the hon. Gentleman's amendment were accepted, I should be disqualified from having more than two of them in the House. I therefore have an interest. I am not atypical in that. Many hon. Members have more than two assistants and I think that we should understand that the difference between a secretary and a research assistant is a very narrow one. Most of us use our secretaries to help prepare our speeches. The difference is often one of semantics. I hope that the House will throw that amendment out, despite what the Leader of the House said.
  Obviously, the problem needs to be kept under review. It could be that an increase in numbers might make the Select Committee on House of Commons (Services) come back to the House and say that it has not worked as well as was hoped. On the other hand, it may be that matters will get better. particularly as new accommodation becomes available. I think that this is a matter that should be kept under review.
  The Sub-Committee worked extremely hard to achieve what it believed to be a fair answer to the problem. I think that this is a fair answer. It may not be an answer that pleases every hon. Member; it would be absurd if it did. However, I think it will please and represent the view of the majority of hon. Members and in that spirit I commend it to the House.
  10.51 pm
  Mr. Cranley Onslow: I do not want to repeat much of what I said when we debated the subject on 12 July. Therefore, I hope that hon. Members will forgive me if I do not follow all the attractive lines of argument which are deployed and if I leave them to make their own speeches rather than let them seek to intervene in mine. We will get on better that way.
  I thought it right to table my amendment because during the debate on 12 July, and subsequently, I have found that
  1056
  some of my colleagues support the view that my amendment seeks to advance. I think that it is right that they should have an opportunity to carry their opinions into the Lobby if they wish to do so. I am mightily fortified to know that the Leader of the House evidently feels the same way. However, I must say that I immediately accept his comment that the amendment, if passed, would bear harshly upon people who undoubtedly need additional support from secretaries or research assistants because of their shadow responsibilities.
  Mr. Douglas Hogg rose—
  Mr. Onslow: I said that I was not going to give way. I hope that my hon. Friend will allow me to keep my promise to the House. If I may continue with my argument I think that I will deal with some of the admirable points that my hon. Friend is looking forward to making in his own speech.
  It is agreed that there is not enough space to go round; whether that is the Government's fault or the fault of past Governments we need not argue about. We know that there is enormous pressure upon the space available to the House of Commons in the Palace of Westminster. It seems to me that the task of the Select Committee should be to see that that space is shared out as fairly as possible amongst all those who have to work here and among those permanent staff who serve Parliament as well as the staff who serve Members of Parliament. We ordinary Members of Parliament have a right to expect that there should be a fair and equitable division and to complain when we find, as we have found, that the catering facilities, the photocopiers, the Library facilities, the Terrace or the demand for questions in the Table Office is exceeding the capacity of the House's establishment to cope.
  As I sought to say in my speech on 12 July we must bear in mind the considerations of security, because that is a reflection of pressure on facilities. Those arguments should be addressed by the House, whether or not hon. Members are disposed to be persuaded by them. That is a perfectly respectable point of view. I believe that as long as accommodation is restricted hon. Members should accept the self-discipline of not demanding more than their share. That is the limiting factor upon the assistance that they can fairly claim to have within the Palace of Westminster. That is all we are talking about. We are not talking about restricting their right to employ whomsoever they wish, and how many they wish, in their constituencies—
  Mr. Foulkes: Will the hon. Gentleman give way?
  Mr. Onslow: I am very sony—
  Mr. Foulkes rose—
  Mr. Onslow: If I give way once, I shall have to give way again. The hon. Gentleman knows that. Therefore, hope that he will allow me to continue.
  I know that many of the facilities of the House are inadequate. I know that many hon. Members find it desirable to employ research assistants to get their mail from the Post Office to where they work. The answer to that is to have a sub-post office nearer to where those hon. Members work. The mail can be taken to them by the carriers of the mail so that they do not have to employ gentleman with cleft sticks to do the job for them. We are under pressure, and we should seek to discipline ourselves within its limits.

  1057
  Instead of that, the motion addresses a different and subsidiary problem — how to control the excessive supply of overseas research assistants; not the excessive demand for them, not the excessive parliamentary need for them, but the excessive supply of them. [Interruption.] The hon. Member for Great Grimsby (Mr. Mitchell) has five research assistants. I do not want to know what nationality they are. There are four separate bodies currently holding themselves out as able to supply American research assistants to hon. Members. I understand that the hon. Member for Huddersfield (Mr. Sheerman) has a connection with one such body—Beaver college. I understand that the hon. Member for Walsall, South (Mr. George) has a connection with another such body, Education Programmes Abroad. I understand that my hon. Friend the Member for Staffordshire, South (Mr. Cormack) has a connection with a putative body, the Catholic university of Washington. We have three colleagues in our midst who have undertaken, for whatever reason, to help participants in those different schemes to come here and work as temporary research assistants for Members of Parliament.
  Mr. Foulkes: Will the hon. Gentleman give way?
  Mr. Onslow: I am sorry.
  Mr. Foulkes: It is very important.
  Mr. Onslow: We have a fourth such body, the Hansard Society. I mention it with diffidence because, Mr. Speaker, you are the president of the Hansard Society. It has distinguished vice-presidents and vice-chairmen. It has put out a leaflet, in association with Birkbeck college, in which it says:
  "The Hansard Scholars Programme … aims are to bring future leaders of American society into sustained and active contact with the political process in Britain and, by means of carefully selected and supervised internship placements, to enable them to work with some of its leading figures …
  The cost of the programme for one semester is £3,300 (pounds sterling), which covers housing in Central London as well as tuition, credits and evaluations, and other aspects of the formal programme.
  There are thus four organisations seeking to supply American research assistants, to be taken on by hon. Members. The numbers would be limited if the motion, which I do not oppose, is passed. However, it is reasonable to assess that that might mean between 300 and 500 American students passing through the Palace of Westminster in a year.
  Mr. Neale: Will my hon. Friend give way?
  Mr. Onslow: I am sorry.
  If I am wrong, I am much encouraged, but on anecdotal evidence I am not prepared to take that risk.
  What I believe should happen is that the House should pass the amendments in my name this evening and that the Services Committee should come before us with a properly thought through and organised scheme to deal with this problem. The question of unfair dismissal does not arise with overseas students. [Interruption.] It is self-evident that we have more time to debate all these matters, but I feel we should address the questions before us as briefly as we can, and if my hon. Friend wants to make a speech on this I am sure that he will try and catch your eye, Mr.
  1058
  Speaker. All I am seeking to do is not to dismiss anyone but merely to limit the number of passes to this building that any hon. Member may have in his own name.
  I have to ask one final question of the right hon. Member for Lewisham, Deptford (Mr. Silkin). If I am right in assessing the supply as being so greatly in excess of the limits which he assesses in his motion, how is this to be allocated? How does he see the scarce number of passes being farmed out among the numerous commanders? Is this to be on a first-come first-served basis? Is it to be rationed very strictly? If hon. Members have had one pass in a year, may they not have another for another 12 months? How does he see this scheme working in practice? I will give way if he will tell us that, because I think there is a gap in the justification he has given us.
  Mr. Silkin: I wish the hon. Gentleman would read the third recommendation. He will see exactly what the basis of it is. There are a number of stipulaions that bind the sponsoring organisations. The rules are very clearly set out. Where he gets his 500 from I do not know because the recommendation talks about 150 in a calendar year, and 50 at any one time.
  Mr. Onslow: That figure is not one that I have formed, but one that I obtained from someone who is in a better position than me. I would be interested to know whether the right hon. Gentleman has been in correspondence with the Hansard Society, whether he discussed recommendations with it, and whether its brochure is framed in the light of the recommendations he seeks to bring to the House. There seems to be a need for a body as august as the Hansard Society to address us in more depth, and bring into its own consideration the desirability of doing this sort of thing for European students.
  Why does it have to be something aimed only at students from across the Atlantic? It may well be that there are reasons for that, and perhaps in the existing arrangements for research assistants there are serious flaws. Perhaps there are organisations as respectable as the United Nations which have to trade on getting a research assistant with access to this building. That is something that is wrong and that can be put right simply. For the rest, I think the House would do well to protect itself against the approaching tide of supernumerary workers here by supporting my amendment.
  11.3 pm
  Mr. David Alton: At best I was disappointed at what the Leader of the House had to say, and at worst I found some of the attitudes which he struck positively antedeluvian, and it demonstrates that the constituency which he represents in Shropshire is so different from the kind of constituencies which many of us on this side of the House represent. His case load, with his role as a Member of Parliament, is distinctly different from the role which many Back Benchers on this side of the House have to deal with.
  I invite the Leader of the House to come to one of my regular surgeries. Last Saturday morning I began at a school in Liverpool at 10 am and finished late in the afternoon, having dealt with dozens of cases and meeting more than 70 constituents with problems which all need to be followed up. Frankly, I do not have the time to deal with all of those matters myself and I desperately need some help.

  1059
  The hon. Member for Birmingham, Selly Oak (Mr. Beaumont-Dark) asked me how many American research assistants I have. I have one who gives me some personal help and two who work with me in the Whips Office for two days each per week. I would happily exchange them for some permanent researchers if the Leader of the House and hon. Members were prepared to make available such facilities.
  The hon. Member for Woking (Mr. Onslow) attacked those of us who use these methods. Those who do not want to use the service do not necessarily have to use it. It is wrong for some hon. Members to try to circumscribe what other Members do and to dictate how they should employ their staff.
  Mr. Peter Viggers: The hon. Gentleman is making an earnest case on his need for research assistants. How much assistance does he receive from one of his research assistants who, I believe, is the parliamentary candidate opposing me in Hampshire? The hon. Gentleman represents a Liverpool constituency.
  Mr. Alton: The research assistant who helps me and is a parliamentary candidate in Hampshire is not an American. He does a lot of work, assisting me in trying to change the present Government so that, at the next general election, people elect a party that will deal adequately with Members of Parliament and provide them with the type of facilities that will enable them properly to represent their constituents.
  Hon. Members are trying to suggest that this is a mushrooming and unstoppable problem. That is not the case. In May 1984, 1,061 temporary research assistants were employed here. It is true that that is 10 per cent. above the 1983 level and 23 per cent. above the 1974 level, but it is still a relatively small number. Yesterday I checked with the Serjeant at Arms' office to ascertain the present position. There are now only 1,042 research assistants employed here, and 51 of them were spouses of Members. Members are using research assistant passes to enable their spouses and members of their families to gain admission to the House. These figures are deceptive.
  Mrs. Kellett-Bowman: Will the hon. Gentleman give way?
  Mr. Alton: I shall give way in a moment, if the hon. Lady can contain herself.
  The real average increase since 1974 in the number of temporary research assistants has been only 15 per cent. It is a downward trend.
  Mrs. Kellett-Bowman: The hon. Gentleman has made a ridiculous point. Spouses can gain admission to the House without getting research assistant passes.
  Mr. Alton: That shows incredible ignorance of how people get their passes. Passes are obtained through hon. Members. Few Members have research assistants. The average is less than two research assistants per Member.
  The Leader of the House said that the Library's facilities were over-exploited. I took the trouble to check the number of inquiries made to the Library. In 1984, there were 17,304 inquiries by temporary research assistants on behalf of their Member. In 1985, the number was down to 15,495. I said to the Leader of the House during an intervention that, if we were talking about a public library in Oswestry which was being oversubscribed, the Leader of the House or any other hon. Member would not be
  1060
  demanding that the service should be restricted. They would be demanding that the service should be expanded so that people could use the facilities. They would not be demanding that the facility should be closed and restricted.
  Mr. Colin Shepherd: Did the hon. Gentleman understand at the time of his inquiry that he should bear in mind two factors? First, he should have borne in mind that the number of temporary research assistants in May, June and July was at the lowest ebb it had been for a long time, because of the adverse publicity and the slight uncertainty about this issue? Secondly, he should have borne in mind that, during September and October—the important time for activity in this respect—accommodation changes were being made to the Library which meant that a large number of temporary research assistants were not able to find accommodation in the Library? Overall demand was down at that time for that reason. It does not necessarily imply the trend that the hon. Member suggests.
  Mr. Alton: The hon. Gentleman admits that it is a downward trend. Now he is trying to suggest that there are reasons for that.
  Mr. Shepherd: No.
  Mr. Alton: I am sorry; I must have misunderstood the hon. Gentleman. He admitted that there were fewer inquiries and tried to suggest that the reason was the adverse publicity surrounding those temporary research assistants. I do not understand that point.
  Mr. Shepherd: The underlying trend in usage of the Library's research and inquiry services is upwards. In 1983, the firgure was 12,699; in 1984, it was 17,304; and, in 1985, for the reasons I surmise, it is less. The overall research load on the Library from Members' inquiries is up 5 per cent. Part of that demand may have come from research assistants. The overall demand for the Library's services continues to increase each year from record level to record level.
  Mr. Alton: We are not asking whether hon. Members are asking more questions. Perhaps we intend to circumscribe Members as well. It would not surprise me if that were in the motion. The point at issue is whether American research assistants, who are being attacked in the motion and in the amendment, are overusing the facilities. The figures that I have given show that the trend of use is down from 17,304 in 1984 to 15,400 in 1985.
  Mr. Silkin: I want to impress on the hon. Gentleman that there is no attack in the motion on overseas students. On the contrary, I thought that I said that we were very impressed with the students and the sponsoring organisations.
  Mr. Alton: I listened to the right hon. Gentleman's speech. I wish that Conservative Members had spoken in similar terms. The motion suggests restricting the number of passes. Many of us regard that as an attack.
  Unlike Australian senators, we do not get the benefit of two appointed researchers. We are not as fortunate as Greek deputies, who have a research assistant paid for by public funds. Nor are we like American Representatives who each received a staff allowance of £207,373 in 1981. Tact almost forbids me to say that, in 1981, one United States senator received more than £700,000 for his research staff. I am not suggesting that we need something

  1061
  similar. Far too many resources might be being used in the United States and some hon. Members could be cosseted from their constituents if surrounded by too many staff but, for goodness sake, the idea that we must subsist, after paying for our secretaries, on £4,000 to £5,000 with which to take on research staff is ludicrous.
  If the motion is carried, the number of American interns who could work here would be greatly reduced. The effectiveness of hon. Members will be reduced as a result. We will have to spend more time answering telephones, photocopying and sealing envelopes — all the trivial things which the Leader of the House on other occasions says probably prevent us from getting into the Chamber.
  The report fails to address itself to the sheer inadequacy of facilities that we have made available for ourselves. We are told that we will get nothing until the 1990s. How that contrasts with our ability to build a Channel tunnel in just five years. Meanwhile, hon. Members such as my hon. Friend the Member for Orkney and Shetland (Mr. Wallace) have to share a room measuring 9 ft by 6 ft with a research assistant. That is a ludicrous way in which to run a Parliament.
  Only this afternoon we debated a Ten minute Bill introduced by the hon. Member for Ashfield (Mr. Haynes) on Crown immunity. My secretary was poisoned a few months ago because of the appalling water supply in these buildings. Because they are not covered by shops, offices and factories legislation, we have appalling primeval facilities. But just consider the facilities we provide for barristers in the robing rooms downstairs and compare them with those of hon. Members. The motion will not solve that and nor will it address another issue which the Leader of the House promised to bring to the House—lobbyists. A far more serious problem than Americans are people who are paid for by lobbying firms outside the House. The motion signally fails to deal with that.
  If the motion and the amendment are passed, they will leave the House in the 19th century. We talk grandly about this being the mother of Parliaments. As long as we fail to improve facilities in the House, it will continue to be a grandmother of Parliaments. I hope that the House will oppose the motion and the amendment.
  11.14 pm
  Mr. Colin Shepherd: I have given much thought to the report since the right hon. Member for Lewisham, Deptford (Mr. Silkin) and I put it to the Services Committee and we debated it in the summer of last year. I can find no reason for altering my thoughts on any of the points in the report. It is a good and sound report that should be adopted on a proper basis. That is the choice before the House tonight.
  I thank my right hon. Friend the Leader of the House for bringing the matter to the attention of the House. The right hon. Member for Deptford said that he was surprised that my right hon. Friend had done so. I was confident that he would address his mind to the matter and I am delighted that he has shown my confidence to be well founded. I express a note of thanks on behalf of the Librarian and his staff, especially those who work in the Branch Library, to the Under-Secretary of State for the Environment—he can be referred to as Mr. Moneybags—who was as
  1062
  good as his word in July. He provided the resources to carry out the necessary changes, which paragraph 26 of the report requested, at an early date.
  There have been significant improvements in working conditions in the Branch Library on the fifth and sixth floors of Norman Shaw north. We shall see the benefit in terms of less strain in the future. Those improvements are important, but they are secondary to the main operation. We must underline the fact that in the Library. we are engaged in a holding operation. I mentioned this matter in July. The new Library is under design and construction on the Parliament street site. The earliest possible date that we can reasonably expect for occupation is 1990.
  I pay tribute to the right hon. Member for Deptford for the way that he has driven the Building Sub-Committee towards an early completion. We are dealing with sensitive matters in sensitive areas, such as conservation. The issue is fraught with difficulties about how the construction can be handled and in what order. It is to the right hon. Gentleman's great credit that, under his able chairmanship, the game has advanced as far as it has and is on schedule. Further consideration of additional space for Member's use is similarly being driven forward at a like pace. That is encouraging, but it does not get us away from the fact that we are engaged in a holding operation.
  Dr. Hampson: That is the heart of the matter. There has been much confusion between the main motion and the amendment. Most of us accept that in the short term there is pressure on our facilities. The main motion may be acceptable when it suggests that overseas students should be limited to one, but there is illogicality in that because they are not allowed in to the main Library on a temporary pass. The amendment infringes on the basic principles of Members of Parliament at to how many people they can have on their staff. My hon. Friend must address himself to that point.
  Mr. Shepherd: I have been addressing myself to that matter. It forms part of the main motion, because we have been considering the load placed on the Branch Library and its staff as a consequence of the temporary research assistants who are here under the auspices of the various programmes. We cannot consider the one without the other.
  My hon. Friend the Member for Woking (Mr. Onslow) is correct to draw attention to the circumstances that arise, but nevertheless we must consider the overall load that we are placing on the Library. As Chairman of the Library Sub-Committee I cannot ignore that fact.
  Mr. Douglas Hogg: Will my hon. Friend explain a little more about the amendment? If only two passes are to be granted and an hon. Member employs more than three members of staff, he will have to dismiss one of them. Is that my hon. Friend's interpretation of the amendment?
  Mr. Shepherd: I have not given any agreement to the amendment. I hope that I have not been interpreted as doing so. I am talking about that part of paragraph 24 which relates to the problem created, and I hope solved by the report, by the temporary research assistants from abroad who are offered to Members free and of whom Members make abundant use. We said that there should be a limit of 50 research assistants at any one time operating and using the Branch Library.
  Mr. Neale: I am worried that some inaccuracies have been promoted, I am sure unwittingly, by my hon. Friend the Member for Woking (Mr. Onslow). He referred to the Hansard Society. Hansard Society students are here for a year, and they do not qualify under these provisions. The Hansard Society and one other organisation that promotes students here have outside library facilities available to those students. They do not use the facilities here. He bases his argument and that of the Committees on the fact that they use the facilities here when they do not.
  Mr. Shepherd: I am sorry that I gave way to my hon. Friend. He was not on the point that I was trying to make.
  Mr. Onslow: The leaflet that I read out makes it clear that the semester is a 14-week semester. There is no question of those people being here for a year.
  Mr. Shepherd: I am grateful to my hon. Friend, because in mentioning the Hansard Society scholarship programme he has drawn attention to some of the circumstances which were drawn to our notice during the taking of evidence. The Library was informed on the last day before we adjourned for the Christmas recess that 21 students would be presented to the House of Commons for use by Members of Parliament. They asked whether they could have a Library briefing on 13 January. The Library briefing was arranged on 13 January for 21 students and 21 turned up, but at that stage only nine knew who their Members of Parliament were. Not one of them had a photo-identity card.
  That underlines the significance of our strictures on organised groups bringing parties to the House to offer their services as temporary research assistants and thereby placing a load on the Library. I know that I am not addressing the amendment, but I am putting the Library's position. The numbers are affected—
  Mr. Sheerman: This is a short debate.
  Mr. Shepherd: I recognise that, but this is an important matter. The number of 50 was proposed and someone earlier asked why that number. That number was based on the loading that the Branch Library could take, with its present staffing and accommodation. We had 55 during May to July and the loading on the Library was such that it could be contained, but the Library staff are nervous—I think that that is the best way to put it—that they cannot cope with the additional loading when the numbers go, as they are at the moment, into the 70s. The Serjeant at Arms is worried that they will go to 100 by Easter. We must address ourselves to that point.
  I hope that the House does not accept the amendment tabled by my hon. Friend the Member for Woking (Mr. Onslow). It is a precipitate line. There has been inadequate time for discussion of a point so fundamental. We put down a marker in paragraph 22 of the report that at some stage we should have to impose a limit if we could not arrange accommodation. As I said, this is a holding operation.
  In paragraph 27 of the report, we said that it would be desirable for a joint committee of the Sub-Committee on Accommodation and Administration and the Library Sub-Committee to review the position from time to time. That is the way that the House should progress—through the Services Committee and by steady monitoring of the position. It would be precipitate to support my hon. Friend's amendment. We should accept the motion without quibble.
  11.24 pm
  Mr. Barry Sheerman: I start by declaring an interest and explaining how it came about. Before I came to the House in 1979 I was a university teacher who ran an American studies programme. When I found the appalling lack of help, facilities and back-up, I vigorously and strenuously tried to find a British university which would supply a late-undergraduate or post-graduate student to help me do a better job. I could not find any university with a programme which gave British students the unique advantage of working for a British Member of Parliament. The City of London Polytechnic came up with the idea that American students attending it would be happy to work as unpaid interns, and I jumped at that opportunity. Since 1980 I have had working for me an American student from the Beaver college programme, based at the City of London polytechnic. To make those students better equipped to work here, to conform to the rules and atmosphere, to blend in and not to cause problems, I have acted as an adviser to that programme and given lectures to them.
  I must deal with the demand-led or supply-led question. I now arrange for 12 to 15 students to join Members of Parliament every year. It is never more than that number, but about that number. I do so not because some American programme asked me to find places for Americans to work for Members of Parliament. It was the other way. Members of Parliament from every side of the House asked me to supply an intern—a free worker who works efficiently—for them. Anyone who is familiar with the programme knows that it works exceedingly well. It exists only because hon. Members asked for it because they wanted that type of help. Let us get it straight from the start; it is demand-led by Members of Parliament.
  I do not want to impose research help on the right hon. Member for South Down (Mr. Powell) or on any Member of Parliament.
  Mr. Jonathan Sayeed rose—
  Mr. Sheerman: I shall not give way for the moment. Members of Parliament should work in the way that suits them best. Many hon. Members have no researchers and no secretarial help. At the other end of the spectrum, some hon. Members have more researchers than the average. It is a fact — the Leader of the House mentioned this number — that there are only 77 temporary research assistants for 650 hon. Members. That is not a scandalous number. Younger hon. Members, in particular, see the need for research help more than those who are a little longer in the tooth.
  I shall vote against both the motion and the amendment, because, although I accepted with some demur the original debate, the Select Committee changed its recommendations substantially. For that reason and because this sort of rule will prohibit hon. Members from making their arrangements in their own way, we should stand up for hon. Members. I thought that the Services Committee was appointed not for the interests of the Library staff, the administrative staff or the Serjeant at Arms, but for hon. Members. I also thought that the Leader of the House stood for the interests of hon. Members and their right to do the job effectively and as they want to do it.
  I object to the fact that one programme has been singled out for preferential treatment. I can see no reason for that. If programmes are monitored, hon. Members will choose

  1065
  quality programmes—students who stay longer and are better prepared and equipped. That is true of all staff, but hon. Members should make that decision, and the House should not make rules and regulations about it.
  We shall oppose both the motion and the amendment.
  11.30 pm
  Mr. Patrick Cormack: The hon. Member for Huddersfield (Mr. Sheerman) was far too inflammatory. I declare an interest in that I was a member of the Sevices Committee. That Committee went into this matter with enormous care and the report is a balanced one. It it based on evidence, and that is a point which has not been made sufficiently. That evidence was from people such as the Librarian and the Serjeant at Arms—people who have to administer this place and who have a difficult job in so doing.
  The Committee made recommendations which are balanced and which bear in mind the interests of Members. I say with great respect to my hon. Friend the Member for Woking (Mr. Onslow) that the recommendations are not mischievous. His amendment is mischievous and it cuts across the absolute right of a Member to decide whom he will employ.
  Mr. Beaumont-Dark: It does not.
  Mr. Cormack: Yes it does, and if my honourable, excitable and intemperate Friend the Member for Birmingham, Selly Oak (Mr. Beaumont-Dark) would calm down it would allow me to make two or three points.
  First of all, the American students who come here and who seem to be at the centre of the controversy are, for the most part, exceptionally well behaved and helpful. There have been few substantial complaints about them and although both Committees sought to investigate, they found it difficult to come up with hard evidence.
  These young people—this is not an insubstantial point—help to foster relations between two close and great countries. Many of them are not doing terribly detailed and important research jobs. They are learning about the system and helping Members, very often with menial chores, which in America would be done by paid lackeys in Congress.
  There is a simple solution that would meet the objections which hon. Members still have in their minds and to which our Committees have turned their attention from time to time, although they have not yet mde a recommendation to the House. It is this. In Congress, one finds that most or all of the people who work there wear badges or passes on their lapels. It would be simple for us to introduce a colour code system whereby the young assistants were allowed only into essential places, such as the post office, without going anywhere near the Library or the dining rooms or the other refreshment facilities.
  It would be simple—I hope that the Committee will look at it again—to have visible colour-coded passes that would ensure that the system could be monitored by the authorities of the House, the police and the custodians, and would not be abused. I suggest that the amendment before the House, moved, I think, slightly mischievously by my hon. Friend the Member for Woking, will cut across a fundamental right of Members and will prevent us from giving the matter detailed consideration.
  11.34 pm
  Mr. Alan Williams: I hope the House will excuse my Celtic croak, but at least it will have the effect of keeping me uncharacteristically brief. I feel for the Leader of the House, who must have thought that his major problems were over when he sat down on Monday evening. I had not anticipated the fractiousness of this debate.
  We have two completely separate debates running together. We should be debating as one issue what we want to do about students, and not just American or other overseas students, but all students, British as well. We should be deciding whether we are willing to let them have access as an educational facility, and setting the scale at which we are willing to make that facility available to them. We could have had a perfectly sensible, structured and constructive discussion on that.
  The trouble is that that discussion has been superimposed on the problem that underlies the emotion in the debate—the sheer paucity of facilities in the House of Commons. So there is an unseemly scramble for scarce resources which has not done credit to the House. Hon. Members are scrabbling for the facility of untrained young academic helpers of limited capability—I do not say that disparagingly—to make up for the facilities that they should have as of right as Members. Therefore, the question of the rights of Members has also been superimposed on the debate.
  On the issue of students, we must recognise reality. The most rapid expansion in numbers applies to overseas students. I accept entirely the point that has been made, that many of the researchers are only part-time. That tends to be obscured by the fact that each one has a full pass although they are here on only one or two days a week. They still put pressure on research resources, photocopiers and so on. Whether we like it or not, the pressure is there and is increasing, but the resource of accommodation is not.
  Are we to try to ration the numbers we load into the machine so as to ensure that the machine is able to accommodate them? We may all deplore the fact that the machine is not as efficient or as well resourced as it should be, but we have to deal with the position as it is. Unless we take action we shall soon find that the employment of extra researchers will become counter-productive because the machine will be so overloaded that they will not be able to do the limited work for which we are taking them on.
  It is my view—a personal view, and it is right that there should be a free vote—that the proposition put forward in the motion should be accepted. In that context perhaps we may consider what else we can do to make sure that British students, who do not have the financial backup of American students, have an equal opportunity of spending time in the House of Commons.
  Mr. McNamara: What is the definition of overseas?
  Mr. Williams: I know what it means; my hon. Friend should know what it means; the report knows what it means. I advise my hon. Friend to go back to the report.
  I listened to the Chairman of the 1922 Committee, the hon. Member for Woking (Mr. Onslow), moving the amendment. I have come across no more convincing case to demonstrate the need for researchers. I do not wish to be unkind to him but I suspect that much of the report had not been read by him nor by anyone on his behalf.
  Mr. Bowen Wells: I agree that British students should have more than equal access, but it is just the restriction that the Services Committee is trying to impose through the motion that will militate against British students. Often they have only a month in the summer or at Easter to spend with us. If we are restricted to one or two passes, we may not be able to give experience to British students.
  Mr. Williams: If we were to do that, my suggestion would be to think in terms of a sabbatical year from a course, or a sandwich type of course in which a year here was a module. It could be spent here as part of a student's course. That could be accommodated within the numbers envisaged.
  Mr. McNamara: How many universities do that?
  Mr. Williams: It is not my fault if the British universities do not do this. As I pointed out in the last debate—
  Mr. McNamara rose—
  Mr. Williams: If I may get on with the debate in a rational way, the reality is that the hon. Gentleman has tabled an amendment that all Members realise is a breach of the principle that most of us would accept, that as Members we have a right to decide how many supporters we need and who they will be. It is no good his saying that if we want extra numbers we should have them outside. How many people can afford to have offices outside the House? We cannot afford the researchers, let alone the offices to put them in. I have never heard such a nonsensical suggestion.
  The reality is that tonight the House has made a bit of a fool of itself. We have not faced up to the real issue: as a Parliament, we lack the accommodation that we need or that should be available, and we lack the resources that we should have to employ full-time members of staff to support us, whose numbers we should be free to decide. Instead, we have had an unseemly debate about how we ration out the 50 passes for each quarter for a limited number of overseas students. The correct thing this evening would be to accept the proposition of the Leader of the House and reject the amendment.
  11.41 pm
  Mr. Biffen: I think that we have had a rather jolly debate. These has been quite a lot of vigour, quite a lot of deep, sound prejudice and quite a lot of well-researched nonsense. I have no sense of shame about having this debate some months after we last discussed the matter, because it is a subject that does not go away or get stale; and in some senses the debate is the better for the period of reflection since we discussed it last summer.
  The right hon. Member for Lewisham, Deptford (Mr. Silkin) very kindly rubbished my gentle and moderate remarks. If I did not know that he had lifted the burden of reselection from his shoulders, I might have doubted his motive.
  There will, of course, always be argument about accommodation, but let it be quite clear: the Bridge street site is now part of the ambitions for the future accommodation of the House of Commons, and it will in due course have a material impact on the kind of problems that we have been discussing. That is not seriously at issue.
  1068
  We now have secretarial and research allowances. The House has always been anxious to consolidate the secretarial and research allowance as one and the same—
  Mr. McNamara: No.
  Mr. Biffen: The hon. Gentleman has tried to shout down everyone who has spoken in the debate so far: he is not going to shout me down.
  Mr. McNamara rose—
  Mr. Speaker: Order.
  Mr. Biffen: That in itself indicates all the problems of definition that come into these matters. At the heart of it all is the question of what constitutes the kind of full-time commitment to research that necessitates the use of the facilities of the House, and the gradations which fall short of that and which are certainly encompassed within the arrangements considered by the right hon. Member for Deptford, whose recommendations now stand in my name this evening.
  The arguments put for them by hon. Friends the Members for Hereford (Mr. Shepherd) and for Staffordshire, South (Mr. Cormack) and by the right hon. Member for Swansea, West (Mr. Williams) are such that I hope that they will convey their good sense and moderation, and that they will be enforced by the House this evening.
  That takes us to the much more general issue of freedom of access to the House for staff of Members of Parliament. The great exponent of laissez faire in these matters is the hon. Member for Huddersfield (Mr. Sheerman). He is an entrepreneur in these matters as well, so he is bound to be arguing from such a point.
  The amendment of my hon. Friend the Member for Woking (Mr. Onslow) has been seriously considered. I realise that it sets out the most formidable difficulties, but let us be quite clear: it does not restrict the number of staff a Member might employ. What it does is to restrict the full use of the facilities. I quite understand when I am told that an hon. Member must have research for his constituency surgery. I do not disparage that. But that is not the same as requiring research here in the House of Commons.
  Mr. Speaker: Does the hon. Member for Woking (Mr. Onslow) wish to move his amendment formally?
  Mr. Onslow: No, Mr. Speaker. So that the House may be spared an extra Division, I shall not press it.
  It being one and a half hours after the commencement of proceedings on the motion, MR. SPEAKER put the Question pursuant to order [24 January].
  The House divided: Ayes, 75, Noes 54.

  Division No. 57]

  [11.45 pm

  AYES

  Ancram, Michael

  Clay, Robert

  Arnold, Tom

  Clegg, Sir Walter

  Atkins, Rt Hon Sir H.

  Cocks, Rt Hon M. (Bristol S)

  Beaumont-Dark, Anthony

  Cohen, Harry

  Biffen, Rt Hon John

  Cope, John

  Boscawen, Hon Robert

  Corbett, Robin

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

  Corbyn, Jeremy

  Bryan, Sir Paul

  Cunliffe, Lawrence

  Buck, Sir Antony

  Dixon, Donald

  Butcher, John

  Durant, Tony

  Campbell-Savours, Dale

  Forth, Eric

  Chope, Christopher

  Fox, Marcus

  1069

  Gale, Roger

  Neubert, Michael

  George, Bruce

  Norris, Steven

  Glyn, Dr Alan

  Onslow, Cranley

  Grant, Sir Anthony

  Osborn, Sir John

  Hamilton, Hon A. (Epsom)

  Page, Richard (Herts SW)

  Harris, David

  Pollock, Alexander

  Harrison, Rt Hon Walter

  Powell, Raymond (Ogmore)

  Hogg, Hon Douglas (Gr'th'm)

  Rhodes James, Robert

  Home Robertson, John

  Rogers, Allan

  Hurd, Rt Hon Douglas

  Sackville, Hon Thomas

  Kellett-Bowman, Mrs Elaine

  Sainsbury, Hon Timothy

  Leadbitter, Ted

  Sayeed, Jonathan

  Lennox-Boyd, Hon Mark

  Silkin, Rt Hon J.

  Lightbown, David

  Silvester, Fred

  Lloyd, Peter (Fareham)

  Skinner, Dennis

  Lyell, Nicholas

  Spicer, Jim (Dorset W)

  McKay, Allen (Penistone)

  Steen, Anthony

  MacKay, John (Argyll & Bute)

  Stradling Thomas, Sir John

  Maclean, David John

  Townend, John (Bridlington)

  McNair-Wilson, M. (N'bury)

  Twinn, Dr Ian

  McWilliam, John

  Viggers, Peter

  Mather, Carol

  Wakeham, Rt Hon John

  Maude, Hon Francis

  Walker, Bill (T'side N)

  Maxwell-Hyslop, Robin

  Williams, Rt Hon A.

  Mellor, David

  Michie, William

  Tellers for the Ayes:

  Miller, Hal (B'grove)

  Mr. Colin Shepherd and

  Moate, Roger

  Mr. Patrick Cormack.

  NOES

  Alton, David

  Hughes, Sean (Knowsley S)

  Ashby, David

  Hughes, Simon (Southwark)

  Ashdown, Paddy

  Johnston, Sir Russell

  Barron, Kevin

  Kennedy, Charles

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

  Kirkwood, Archy

  Boyes, Roland

  Lilley, Peter

  Bruce, Malcolm

  Livsey, Richard

  Buchan, Norman

  Lloyd, Tony (Stretford)

  Burt, Alistair

  McDonald, Dr Oonagh

  Caborn, Richard

  McNamara, Kevin

  Carlile, Alexander (Montg'y)

  Maxton, John

  Clelland, David Gordon

  Meadowcroft, Michael

  Clwyd, Mrs Ann

  Neale, Gerrard

  Coombs, Simon

  Nellist, David

  Davies, Ronald (Caerphilly)

  O'Neill, Martin

  Davis, Terry (B'ham, H'ge H'l)

  Penhaligon, David

  Fields, T. (L'pool Broad Gn)

  Pike, Peter

  Fisher, Mark

  Robertson, George

  Foot, Rt Hon Michael

  Sheerman, Barry

  Forsyth, Michael (Stirling)

  Steel, Rt Hon David

  Foster, Derek

  Wallace, James

  Foulkes, George

  Waller, Gary

  Garel-Jones, Tristan

  Wells, Bowen (Hertford)

  Gregory, Conal

  Wheeler, John

  Hamilton, Neil (Tatton)

  Hampson, Dr Keith

  Tellers for the Noes:

  Holt, Richard

  Mr. Austin Mitchell and

  Howarth, Gerald (Cannock)

  Mr. Geoff Lawler.

  Howells, Geraint

  Question accordingly agreed to.
  Resolved,
  That the recommendations contained in paragraph 24 of the Second Report of the Select Commitee on House of Commons (Services) in Session 1984–85 (House of Commons Paper No. 195) be approved; and that no Member shall at any one time be entitled to more than one pass for a temporary research assistant from overseas.

  Mrs. Pamela Megginson
  Motion made, and Question proposed, That this House do now adjourn.—[Mr. Maude.]
  11.56 pm
  Sir Anthony Grant: In 1982 Mrs. Pamela Megginson, a widow over 60 years of age, killed her lover, Mr. Hubbers aged about 79 in southern France by striking him with a champagne bottle. She had been provoked because Mr. Hubbers taunted her with the youth and beauty of the new mistress he had acquired. One might think that he got no more than he deserved, but Mrs. Megginson was convicted of murder and sentenced to life imprisonment. She is serving that sentence in Durham prison where she is with some of the worst, violent offenders in the land. She is serving in a wing which has already been condemned for male prisoners. With that lady, who has had no previous convictions, are some of the scum of our society.
  Mrs. Megginson's only close relative in this country is my constituent—her daughter—Mrs. Bennett. Mrs. Bennett is a mother of three small children and obviously she cannot visit her mother regularly as far away as Durham. I make a plea that Mrs. Megginson be moved to a prison nearer to her daughter, and one more suitable to a person of her record.
  My main point is that to keep someone such as Mrs. Megginson who, as I have said, has no previous convictions or record of violence, in prison while perpetrators of the most bestial crimes are released is totally unacceptable and an affront to the values generally held by the public.
  It has been my purpose for a long time to have Mrs. Megginson's case reviewed, and I at once acknowledge the most sympathetic care that my hon. Friend the Parliamentary Under-Secretary has taken. I originally took up the question of an appeal with the Lord Chancellor in January 1984. Then I took up the question of a review with the Home Secretary in August 1984. In September 1984 my hon. Friend the Parliamentary Under-Secretary kindly told me that the case would be referred to the Lord Chief Justice in early 1985.
  In November 1984 I asked for this exceptional case to reviewed at the earliest possible moment. In reply, I was pleased to be told in December 1984 that the Home Office had identified Mrs. Megginson's case
  "as one which should be brought into the review procedures quickly and it is already receiving wholly exceptional treatment".
  Perhaps that happened behind the scenes, but as far as my constituent and I were concerned, nothing happened until 27 September 1985, when she was seen by a member of the local review committee. She understood from that person that she would hear something by Christmas, but she has not heard, and I have not heard. I shall be interested to hear the Minister tell us exactly what is happening. Generally, the injustice of the case contrasts most strongly with recent sentences, and, indeed, releases, for horrible crimes, especially against children.
  I have practised law for many years. I appreciate only too well that one cannot judge cases from newspaper reports, and I recognise the old saying that "comparisons are odious". Nevertheless, the disparity in some sentencing in our courts and in some of the charges preferred in criminal cases these days is so stark as to leave the public totally perplexed as to what we are all about.

  1071
  There is a feeling that some of our courts and some aspects of our criminal law system are divorced from reality. I say in haste that I do not in any way make a criticism of my hon. Friend the Minister or the Home Office. Their task, and the task of Parliament, is merely to provide the necessary sentences and machinery. It is for the courts and the authorities to carry them out.
  The case of Mrs. Megginson is just such a case that deserves comparison with others. Her case contrasts remarkably with that of a recent case concerning Mrs. Doris Croft. She too was a middle-aged widow, also from Cambridgeshire, who also discovered that her elderly lover was about to desert her for a younger woman. She killed him, not with a champagne bottle, but with a rolling pin, equally in a fit of jealous rage. She was put on probation for three years, compared with the life sentence imposed on my constituent Mrs. Megginson. In that case, the charge was manslaughter instead of murder. That is why this case is inexplicable. I am sure that members of the public will find inexplicable the different way in which the case was appoached by the prosecution, but there it is.
  Equally, one can look at more horrible cases. I cite a recent case which attracted a great deal of publicity in the borough of Brent, when a brute by the name of Beckford slaughtered a little girl in the most disgusting circumstances, and was sentenced to seven years. It is difficult for people to understand the vast disparity between the way in which people are treated in our society. I do not believe that that is good for the law, or the maintenance of a stable society.
  I compare the case of Mr. Fenton, who shot his former wife and her second husband with a shotgun. He was also put on probation for three years. In that case, the judge used these words in conclusion:
  "neither justice nor public reaction would be advanced 'one jot' by leaving him in prison."
  Precisely the same considerations apply to Mrs. Pamela Megginson.
  I have the greatest respect for my hon. Friend, whom I know has applied himself diligently to the case, and for my right hon. Friend the Home Secretary. They are both men of reason and compassion. In all sincerity and humanity I ask them to do all that they can to see that this case is properly reviewed at the earliest possible moment in the hope that it will be possible to allow this sad, unhappy lady, in the latter stages of her life, who has suffered so much already, and is no conceivable danger to the public, and really has already paid for her crime, to return to the bosom of her family, and let her live the rest of her life in peace and tranquillity.
  12.6 pm
  The Parliamentary Under-Secretary of State for the Home Department (Mr. David Mellor): I do understand the very great sense of commitment that my hon. Friend the Member for Cambridgeshire, South-West (Sir A. Grant) feels about this sad case, and I am most grateful to him for the acknowledgment he has made of the exceptional treatment this case has received in the Home Office, details of which I shall be happy to put on the record this evening.
  As he has indicated, my hon. Friend has taken a personal interest in the case of this unfortunate woman, and he has written to me about it on several occasions. I have also received numerous other representations on Mrs. Megginson's behalf. As my hon. Friend has said, it is an
  1072
  unusual case. In September 1983, some two years and four months ago, at the Central Criminal Court, Mrs. Megginson, who was then aged 62 was convicted of the murder of her 79-year-old co-habitee. Although the offence had taken place in the south of France, it was justiciable here by virtue of the Offences against the Person Act 1861. The relationship between the couple was of long standing but, in 1980 or 1981, Mrs. Megginson's co-habitee started an association with a younger French woman. Matters came to a head in October 1982 and Mrs. Megginson killed him by striking him at least three times with a champagne bottle. She immediately returned to this country and confessed to the killing.
  At her trial, Mrs. Megginson invited the jury to convict her of the lesser offence of manslaughter because, first, when she struck her co-habitee she did not intend his death or to cause him grievous bodily harm and, secondly. when she struck him it was because she had been provoked to such a degree as to cause her to lose self-control. That issue went before the jury, as happens in all criminal cases, but after hearing all the evidence presented by the prosecution and the defence, the jury decided—albeit by a majority of 10:2 — that the charge of murder was proved. The law provides that only one penalty may be imposed following a conviction of murder, and that is life imprisonment, and my right hon. Friend the Home Secretary has no authority to vary such a sentence. Mrs. Megginson exercised her right of appeal without success and, in the absence of any evidence to the contrary, we must proceed on the basis that she was rightly convicted of murder and properly sentenced to life imprisonment.
  There is no other basis on which Ministers could exercise the powers given to them by Parliament, which do not include any powers to impose any different views other than those which the courts have taken on these points of conviction and sentence.
  The release of a life sentence prisoner is at the discretion of my right hon. Friend the Home Secretary, but, under the provisions of section 61 of the Criminal Justice Act 1967, he may authorise release only if he is recommended to do so by the parole board, and after he has consulted the Lord Chief Justice and, if available, the trial judge.
  There are two essential ingredients to the decision whether a life sentence prisoner should be released: has he or she been detained for long enough to satisfy the requirements of retribution and deterrence for the offence, and, is the risk to the public acceptable? My right hon. Friend looks to the judiciary for advice on the time to be served to safisfy the requirements of retribution arid deterrence and to the parole board for advice on risk. He is, however, not bound to accept a recommendation for release made by the parole board; nor is he bound by the views of the judiciary, although, of course, he attaches much weight to them.
  There are no fixed times at which the release of a life sentence prisoner must be formally considered by the parole board machinery. It is for my right hon. Friend to decide when this should be done. Under the revised procedure for the review of life sentence cases announced on 30 November 1983 by my right hon. and learned Friend the Member for Richmond, Yorkshire (Mr. Brittan) when Home Secretary, the date of the first formal review is decided by the Home Secretary after obtaining an initial view from the Lord Chief Justice and the trial judge on the length of detention necessary to meet the requirements of

  1073
  retribution and deterrence for the offence. The first formal review will normally take place three years before the expiry of that period to give sufficient time for preparation and, where necessary, further testing before release is finally authorised, if the parole board should recommend it.
  The decision when to fix the first formal review of a life sentence prisoner's case is not normally taken until after the prisoner has been detained for at least three or four years. However, it was recognised that there were unusual and exceptional features about Mrs. Megginson's case and, in those circumstances, it was decided to ask the judiciary for its views on the retributive and deterrent element of the sentence at a much earlier stage than usual. This was done in May 1985—a little over 18 months after Mrs. Megginson's conviction. In the light of the judiciary's views, I decided that the case should be referred to the local review committee at the prison within weeks after receiving the judicial view. I decided also that the review should take place commencing in September 1985 as the first stage of the formal parole board review mechanism.
  It might assist if I make clear the stages that were then followed. When the local review committee considers the case of a life sentence prisoner, it has before it all the information available about the offence for which the life sentence wzas imposed and the circumstances in which it was committed; the prisoner's history, including any previous offences; the assessments and opinions of doctors who may have examined the prisoner before the trial; and any remarks made by the trial judge. It also has copies of all the reports made previously by the staff at the prisons in which the prisoner has been detained and reports prepared specially for the review, together with any representations which the prisoner may have made to the committee, as he or she is entitled to do. In the light of all this information, the committee makes a recommendation on the prisoner's suitability for release.
  All the papers are then sent to the Home Office, with the local review committee's recommendation. The case is very carefully considered in the Home Office, in consultation with the Department's professional advisers. Sometimes, reports from independent doctors, including psychiatrists, are obtained. An assessment is made of all the considerations, including the possible risk to the public if the prisoner were to be released and the case is then referred to the parole board. All this takes time, and prisoners are themselves warned not to expect a decision in their case until at least six months after the local review.
  The parole board, which does not necessarily endorse the recommendation made by the local review committee, may recommend either that the prisoner should be given a provisional date for release or that the case should be
  1074
  reviewed again after a specified period. If it does the latter, my right hon. Friend has no power to authorise the prisoner's release and the further review follows the same procedure, starting once again with the local review committee in the prison in which the prisoner is located.
  Mrs. Megginson's case was duly reviewed by the local review committee at Durham prison in September last year. The internal procedures to which I have referred have been completed and the papers have been referred to the parole board. The case will be considered by the parole board next month—only five months after the local review committee procedure began.
  That is another sign of recognition in the Home Office that the circumstances of the case merit processing faster than we are generally able to achieve, given the pressure of work, in all of the many cases that come before us. I know that my hon. Friend will understand if I cannot speculate on the outcome of the parole board's consideration of Mrs. Megginson's case or when she might be released. I can assure my hon. Friend that the decision will be conveyed to her as soon as possible after the parole board gives its decision to us.
  Sir Anthony Grant: I think that my hon. Friend said that the case will be considered by the parole board next month—in February.
  Mr. Mellor: The lifer panel of the parole board will consider the matter next month. The decision will be conveyed to me. I can assure my hon. Friend that I shall personally ensure, as I have tried to do throughout the case, that matters are then handled expeditiously.
  What happens then will depend very much on what the parole board says. Obviously, I must not say anything that would influence its decision one way or another. Parliament established the parole board procedure to ensure that the public had the additional safeguard, and fetter on the Home Secretary's discretion of independent evaluation by a lifer panel, which consists of a High Court judge, a psychiatrist and two other members.
  I understand my hon. Friend's proper concern to ensure that Mrs. Megginson should not be in prison for any longer than is necessary. My right hon. Friend has to act within the statutory framework and he has to give due weight to the views of the judiciary when deciding when it would be right to commence the formal review. We have done that. He then has to await the parole board's deliberations, which will happen next month.
  I assure my hon. Friend that we have treated this case exceptionally and given it considerable priority by comparison with the normal run of murder cases, and I hope to be able to give him further advice before too many weeks have elapsed.
  Question put and agreed to.
  Adjourned accordingly at fifteen minutes past Twelve o'clock.