Commons Sitting of 6 May 1986

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

    GULL ISLAND PROTECTION BILL [Lords]
    As amended, considered.
    Amendment agreed to.
    To be read the Third time.

    IPSWICH PORT AUTHORITY BILL
    As amended, considered; to be read the Third time.
Oral Answers to Questions
  EDUCATION AND SCIENCE

    Higher Education
    Mr. Andrew F. Bennettasked the Secretary of State for Education and Science what discussions he has had in the last month with the National Advisory Body and the University Grants Committee about the future development of higher education.
    The Parliamentary Under-Secretary of State for Education and Science (Mr. George Walden): My right hon. Friend has written one letter jointly to the chairmen of the University Grants Committee, National Advisory Body and the Welsh Advisory Body about student numbers in 1987–88. He is meeting the chairman of the UGC tomorrow, Wednesday 7 May.
    Mr. Bennett: When the Secretary of State meets the chairman of the UGC, perhaps he will come up with the farewell message that cuts in higher education are off. Will the Government stop hiding behing the UGC and NAB planning exercise, come clean and make it clear that they are demanding cuts in the number of students going into higher education or in the resources per student? Why is Britain the only country that is cutting higher education? If we want an economic future, we should surely be investing in, not cutting, higher education
    Mr. Walden: It is grossly irresponsible of the hon. Gentleman to stir up unjustified alarm among students, parents and institutions about access to higher education. The Government have been enormously successful in expanding access to higher education, and it is not our policy to curtail it now.
    Mr. Michael Forsyth: When my right hon. Friend meets the chairman of the UGC, will he seek his assurance that there is no question mark over the future of Stirling university? Will he also put it to him that there should be a question mark over the UGG, and that it would be far better to allocate funds to universities and colleges of higher education on the basis of student demand, with resoures allocated according to student preference rather than by bureaucratic methods?
    Mr. Walden: My hon. Friends asks a complicated question. I know that the UGC is concerned about financial trends. However, there have been no formal recommendations to the Government about closures, and the Government are monitoring closely any evidence of financial difficulty.
    Mr. Freud: Does the Minister accept that there is a subsequential question mark over his Department's competence in dealing with higher education? Will he reverse the trend of trying to cram ever more students into polytechnics without making adequate provision for their funding?
    Mr. Walden: I am sorry to hear the hon. Gentleman speak in that derogatory way about the success of public sector higher education in accommodating many new students. To be precise, there has been an increase of one

    3
    third in the student population. I am sorry that he should take such a primitive economic attitude and believe that the success of the public sector in efficiently accommodating many new students is not a matter on which it should be congratulated.
    Mr. Stokes: Is my hon. Friend aware that the cuts proposed in the courses run by the Stourbridge college of art and technology, which is pre-eminent in the glass industry throughout the country, have caused alarm and despondency in my constituency? I look to the Government to put the matter right.
    Mr. Walden: I hope that my hon. Friend will look carefully at the source of any speculation about cuts. I imagine he will find that, as is so often the case, that source is not the Government.
    Mr. Merlyn Rees: As I have no wish to be irresponsible or complicated, how should I reply to those in Leeds who write to tell me that the fine arts department at Leeds polytechnic is being considered for closure? Should I write and tell them that no such possiblity arises?
    Mr. Walden: The right hon. Gentleman should ask his colleagues at Leeds polytechnic carefully to reread the letter that they received from the secretariat of the National Advisory Body. I believe that that was the source of the rumours. His colleagues will then note that the proposals in that letter are not endorsed by the Government.
    Mr. Squire: Has my hon. Friend had an opportunity today to read the devastating indictment of Opposition, policies set out in the Opposition's house newspaper, The Guardian, by Hugo Young? If so, does he agree that it exposes the emptiness of the Opposition's promises on higher education, as on so many other issues?
    Mr. Walden: My hon. Friend has made an extremely good point. In higher education one is dealing with a rather highly educated class of person. I do not for one moment believe that such a person will be impressed by the Opposition scattering Mickey Mouse money in front of him for higher education, just as they have scattered it in front of every other topic debated in the Chamber.
    Mr. Dubsasked the Secretary of State for Education and Science what representations he has had in the last month from the higher education unions about the number of students entering higher education in 1987–88.
    Mr. Walden: None, Sir.
    Mr. Dubs: Does the Minister agree that there is great uncertainty and anxiety about the future of higher education in this country, which has been directly caused by the Government's attempt to cut the number of resources going to all categories of higher education? Is it not time that the Government realised that Britain's future depends on the skill, training and education of our people? Why do the Government say that they must cut higher education? Such cuts would damage the country's future.
    Mr. Walden: I am intrigued that the hon. Gentleman should complain about uncertainty in higher education and at the same time deliberately fuel it by referring to nonexistent plans for cuts. I wish that he and other Opposition Members would stop doing down Britain's achievements by making international comparisons. They are a notorious minefield, and Opposition Members frequently step on
    4
    rather obvious mines. The hon. Gentleman alluded to international comparisons, but the best bases for them are degrees and higher level diplomas. On that basis, the United Kingdom is on a par with West Germany and above others in western Europe.
    Mr. Peter Bruinvels: If and when my hon. Friend receives any representations from the higher education authorities, will he bear in mind that many of the numbers will represent people who may not even be properly qualified to go to university? Does he agree that those who have the privilege of going on to further education and who have the best grants in Europe available to them should aim to have a career to go to at the end of their three years of study? It is a privilege to go on to further education, and someone has to pick up the tab for that.
    Mr. Walden: My hon. Friend has made many worthy points, and he will not expect us to dissent from them. I refer, in particular, to the notion that the vocational element of higher education should be stressed.
    Mr. Radice: Will there be any cuts in 1987–88 in the number of resources going into higher education?
    Mr. Walden: In the normal way, decisions on the funds that will be allocated to the public sector for higher education are calculated in the routine way, at the time when funds going to local authorities are calculated.

    Teachers (Pay and Conditions)
    Mr. Greenwayasked the Secretary of State for Education and Science if he will make a statement about pay and conditions of service for teachers.
    The Secretary of State for Education and Science (Sir Keith Joseph): Talks covering both pay and conditions of service continue at ACAS between the management side and the five unions which signed the ACAS agreement in January. The National Union of Teachers has excluded itself from the talks by refusing to abide by the agreement and end its disruption of schools. The National Union of Teachers has requisitioned a meeting of the Burnham primary and secondary committee for this Friday, 9 May.
    Mr. Greenway: Is it not a tragedy that the National Union of Teachers, which represents 48 per cent. of teachers, is excluded from the talks, when ever-increasing numbers of parents are voting with their feet by transferring their children from state to independent schools? Would it not be in the best interests of children, parents and teachers if the NUT ended its disruptive action and took its proper place at the conference table?
    Sir Keith Joseph: The National Union of Teachers could return to the talks quite easily by ending disruption and abiding by the Advisory, Conciliation and Arbitration Service agreement. I wish that it would do so.
    Mr. Dormand: Is the Secretary of State aware that teachers are voting with their feet by leaving the other unions and joining the NUT? That is a fact. Will the right hon. Gentleman make it clear that many of the activities which are carried out by all teachers of all unions, such as after-school club activities, Saturday morning sports games and activities outside lunchtime supervision, cannot, by any stretch of the imagination, be held to be other than voluntary? Will the right hon. Gentleman also

    5
    give an assurance that those duties will not be taken into consideration when trying to lay down the law and attaching them to salaries?
    Sir Keith Joseph: The hon. Gentleman should be wary before announcing exactly the flow of teachers to union membership. The duties of teachers have long included activities outside the classroom. It is the definition of duties that is being sought by the five teacher unions and the local education authorities under the ACAS umbrella.
    Mr. Sayeed: Does my right hon. Friend agree that one cannot say what a job is worth unless one says what it entails?
    Sir Keith Joseph: It is precisely for that reason that the Government regard the definition of duties, as well as the definition of pay and career structure, as important. That is why we are glad that the ACAS negotiations are taking place.
    Mr. Flannery: Have not the ACAS talks, which are a democratic interchange of opinion, always taken place when there are honest differences? However, on this occasion the employers laid down conditions before the talks began. They said that unless the NUT agreed with certain things, they would not sit down in the same room and talk. Does the right hon. Gentleman agree that we cannot continue to organise the education of our children without the help and agreement of the NUT, which represents half the teaching force in this country?
    Sir Keith Joseph: The NUT should consider the interests of children. It professes to be concerned about education, yet it promotes the disruption of the educational process. The NUT has urged its members to refuse to carry out activities which have long been recognised as part of a teacher's work. I support the view of the local authority employers that the NUT should return to the talks only if it ends the disruption.
    Mr. Lyell: Would not a large number of teachers, including many members of the NUT, welcome a proper contract, fair assessment and the improved job and career opportunities that would follow? What does the NUT hope to gain by its continued obstruction?
    Sir Keith Joseph: My hon. and learned Friend's proposition is entirely correct. I cannot be expected to defend the National Union of Teachers' behaviour.
    Mr. Radice: As this is almost certainly the right hon. Gentleman's last Question Time as Secretary of State for Education and Science, it is a pity that we cannot say farewell on a happier note. Does he accept the judgment of the Tory candidate in the Ryedale by-election that there is a wide gap between the intentions of the right hon. Gentleman and what he has managed to achieve, so much so that our schools are now in a worse state than they were in 1981 when he took over as Secretary of State for Education and Science?
    Sir Keith Joseph: I accept that last year was a miserable year for education. Will the hon. Gentleman answer a question from me?—[HON. MEMBERS: "No."] Very well.
    Mr. Speaker: Order. I did not stop the Secretary of State. I did not know what he was going to say.
    Mr. Forth: Will my right hon. Friend confirm that he and the Government are still concerned, above all, with
    6
    quality in education? Will he also confirm that he gives the highest priority to introducing a system of assessment of teacher performance, so that those who do well in the classroom are duly rewarded and those who do less well are encouraged to improve their performance?
    Sir Keith Joseph: I entirely agree with my hon. Friend. The Government's objective is to raise standards and, for that reason, to offer teachers much more effective in-service training, coupled with appraisal.

    Nursery Education
    Mr. Soleyasked the Secretary of State for Education and Science what recent representations he has received on the availability of nursery education.
    The Parliamentary Under-Secretary of State for Education and Science (Mr. Bob Dunn): No such representations have been received.
    Mr. Soley: How does the hon. Gentleman expect the United Kingdom to keep up with its industrial competitors if we perform so badly in nursery education? Should not such education be given a much higher priority by the Government and by the country generally? Is it not a fact that without that nursery education and some measure of performance by the Government we shall be found wanting in the future?
    Mr. Dunn: It is for local education authorities to determine the nature and scale of provision offered at that level. The hon. Gentleman will be interested to know that in 1979 428,000 children were in nursery schools and nursery classes. By 1985 that figure had increased by 80,000—almost 20 per cent.
    Mr. Haselhurst: Before encouraging the commitment of yet greater resources to nursery education, will my hon. Friend consider how the role to be played by the pre-school play group movement might be enhanced by closer cooperation with the junior schools to which the children might proceed?
    Mr. Dunn: I welcome the growth of the voluntary sector, voluntary organisations and self-help groups. I notice that the Labour party in its recent commitment made no reference to the role of voluntary groups. Its proposals for making nursery school places free on demand to three-year-olds and four-year-olds would cost the United Kingdom more than £400 million in the first year and more than £300 million thereafter. What a cost!
    Mr. Dobson: Does the hon. Gentleman agree that the importance that the Government attach to pre-school education is shown by the fact that they changed the law to make it clear that local education authorities were not obliged to provide pre-school education?
    Mr. Dunn: Local authorities have power, but not a duty, to provide nursery education. The hon. Gentleman will be pleased to know that in 1985 43 per cent. of three-year-olds and four-year-olds were in nursery schools or in nursery classes, compared with only 37 per cent. in 1979.
    Mr. Marlow: Will my hon. Friend tell the pampered actress whom the Labour party put on the television screen yesterday as a decoy for Bernie Grant and Mr. Hatton that there is no such thing as free nursery education, that it must be paid for by the ratepayer and taxpayer, and that

    7
    many people feel that the mothers of three-year-olds and four-year-olds would be better advised to look after their own children than try to offload them on to the state?
    Mr. Dunn: My hon. Friend will be pleased to know that I came to the same conclusion. The lady who appeared last night on the party political broadcast talked about nursery education as a basic right, but she did not want to talk about parental responsibility for bringing up very young children at home.
    Mr. Andrew F. Bennett: Will the hon. Gentleman check some of the facts that he has given to the House? Does he agree with the Prime Minister that nursery education is important? Does he agree that since 1979 the Government have been closing nursery schools, that in the past three years there has been virtually no expansion in provision in nursery schools or nursery classes and that, over the next two years, fewer children will enjoy nursery schools and nursery classes than have done in the past? Does the hon. Gentleman also agree that, by the year 2000, at the present rate of progress, our provision for three-year-olds and four-year-olds will still be only half that in West Germany, France, Holland, and Italy?
    Mr. Dunn: The hon. Gentleman is right in one respect. Since 1979, 32 nursery schools have closed. However, the general increases, which I mentioned earlier, are to be welcomed. The Opposition parties make no reference to the role of the voluntary sector, and that is most lamentable.

    Schools (Homework)
    Mr. Madelasked the Secretary of State for Education and Science when he expects to receive the report from Her Majesty's inspectors' survey of good practice in schools in relation to homework: and if he will make a statement.
    The Minister of State, Department of Education and Science (Mr. Chris Patten): My right hon. Friend hopes to receive this report during the summer.
    Mr. Madel: As part of the policy of raising standards in the classroom, at what age do the Government think that homework should be compulsory for children? Do the Government accept that arrangements should be made for some children to do their homework at school at the end of the day if conditions at home are difficult?
    Mr. Patten: I agree that where facilities are made available for doing homework at school, they are most welcome. I hope that Her Majesty's inspectors' survey will offer some useful evidence of current practices which will enable us to answer my hon. Friend's first question. I would point to the important role of parents in helping younger children especially with reading at home.

    School Governors
    Mr. Wainwrightasked the Secretary of State for Education and Science what representations he has received on the provision in the Education Bill to prohibit the appointment of school governors under the age of 18 years.
    Mr. Dunn: The Department has received nine letters, including five from hon. Members, opposing the proposal. In addition, the matter has been discussed during debates on the Bill in another place.
    Mr. Wainwright: Is the Minister aware that some local education authorities already include pupils under the age of 18 among their appointments to governorships? Does he not realise that a minority of pupils as school governors would further the consumer-based society that the Government claim to champion?
    Mr. Dunn: The Government have long held the view that a school or college governor holds an office of public and pecuniary trust. Minors are not eligible to hold such office. We are aware that there are contrary legal views, and that is why we are seeking to put the matter beyond doubt, especially in the light of the wider responsibilities now proposed for governing bodies.
    Mr. Michael McNair-Wilson: Is it true, as the Daily Mail stated in an education article today, that it can cost more for a child to be educated in the public secondary sector than through a private school? If so, does that not suggest that the financial management of our schools leaves much to be desired? If that is the case, what is the point of governors who lack either financial or management skills having a say in how our schools are controlled?
    Mr. Dunn: We shall have the opportunity to discuss those matters when the Bill comes here from another place. It is fair to point out to the House that we intend to legislate for a degree of financial management in schools and to embark on and create training courses for governors so that they will know why they are appointed.

    General Certificate of Secondary Education
    Mr. Skinnerasked the Secretary of State for Education and Science what representations he has received in the past month from the teachers' unions about the introduction of the general certificate of secondary education examination.
    Mr. Chris Patten: My right hon. Friend has expressed to all the teachers' associations his willingness to receive any further and detailed comments they may have about the preparation for and funding of the introduction of the GCSE. The Department stands ready to consider these matters further.
    Mr. Skinner: Is the Minister aware that nearly six weeks ago I sent a letter from a worried parent, Mr. Beal of New Houghton in my constituency, to the Secretary of State for Education and Science? The letter says that he is concerned about the examination going through. I have not yet had a reply from this deadbeat Secretary of State or the junior Minister who is trying to get his job. Is it not a scandal that the Minister cannot reply to my constituent in six weeks and at the same time is trying to tell parents and teachers to rush through this tinpot examination? Why does the Secretary of State not make way for somebody else?
    Mr. Patten: I am grateful for that balanced contribution. I assure the hon. Gentleman that, in the light of his question, I shall see that his constituent receives an early reply. I am equally sure that the hon. Gentleman will want to reassure his constituent about the importance of this examination being introduced smoothly in September.
    Mr. Pawsey: Will my hon. Friend confirm that the GCSE was demanded by teachers' unions, that it has been most thoroughly researched and prepared, and that £30

    9
    million has been made available by the Government, in addition to the sums provided by local authorities? Does he agree that the new examination will do a great deal to improve the quality of education in our schools?
    Mr. Patten: I could not have put it better myself.
    Mr. Freud: Will the Minister confirm that a substantial sum of money is being granted to north Yorkshire, and Ryedale in particular, for the GCSE? If that is true, will he do his best to let counties that are not having by-elections have similar grants?
    Mr. Patten: Thanks to the education support grant, all local education authorities will be able to add to the capitation which, doubtless, they are making available for the introduction of the GCSE. That is what the £20 million is for — for all local education authorities. Unfortunately, some local education authorities do not have quite as much as they might like for that purpose. For example, Derbyshire, is spending £60,000 on overprinting all its stationery with the news that Derbyshire is a nuclear-free zone.
    Mr. Nicholas Baker: Is my hon. Friend aware that the teachers' unions—[Interruption.]
    Mr. Speaker: Order.
    Mr. Baker: Thank you, Mr. Speaker. Is my hon. Friend aware——
    Mr. Skinner: We've got the muesli vote in west Derbyshire.
    Mr. Speaker: Order. The hon. Gentleman has had one question. He cannot keep interrupting other people's questions.
    Mr. Baker: Is my hon. Friend aware that the teachers' unions are putting forward figures for the cost of the GCSE and the time that its introduction will take which are very much in excess of the figures and the time that his Department has produced? Will he quickly examine those figures and refute them, because everyone wants to see this important examination introduced?
    Mr. Patten: I shall certainly ensure that we continue to put sensible figures into play. The fact is that there has been a good deal of exaggeration. There is a tendency for some teachers to pile all their ambitions into an argument about resources for the GCSE. Nevertheless, we want to have serious discussions with the teachers' associations about the resources for this most important examination.
    Mr. O'Brien: Is the Minister aware of the situation that is faced by some of the heads in schools in my constituency where, out of a possible 97 syllabuses, only 27 have been received so far? The syllabuses that are being submitted need to be amended in many ways. Therefore, the teachers are having to draw up programmes only weeks before the introduction of the GCSE. Will the Minister take his head out of the sand and realise that there will be great difficulties in the introduction of the GCSE?
    Mr. Patten: The arrangements for the introduction of syllabuses are exactly as they were when we first discussed that issue a couple of years ago. Over 235 syllabuses have now been approved. They are being mailed daily to schools. The arrangements for the approval of syllabuses are entirely on course.
    Mr. Forth: Will my hon. Friend confirm that it was the teachers' unions that demanded this examination in the
    10
    first place? What conclusions has my hon. Friend drawn as to the reason for the change of attitude now shown by the unions?
    Mr. Patten: I still believe that the overwhelming majority of good and professional teachers want to see the examination introduced smoothly. Unfortunately, one or two people have been trying to use it as part of their pay dispute, but I hope that that will not apply to all teachers.
    Mr. Andrew F. Bennett: Will the Minister tell us how his talks with the National Union of Teachers are going? Does he not accept that he has a short time to win public acceptance—the acceptance of parents, pupils and teachers—for the new examination? If the Government showed a little urgency and gave a little extra in resources, that good will could be won. What are the Government doing to achieve that?
    Mr. Patten: As the hon. Gentleman knows, we have been talking about the examination for the best part of 15 years. We only recently announced increased resources and training. But we are still talking to the teachers' associations. My right hon. Friend the Secretary of State has met the NUT, and the Department's officials are talking to some of the NUT's officials at the moment. I hope that it will be possible to persuade them to take part fully in making the examination the success that it deserves to be.

    Education (Politicisation)
    Mr. Couchmanasked the Secretary of State for Education and Science when he expects to be able to make an announcement of the conclusion of his consideration whether an inquiry should be held into the politicisation of education.
    Sir Keith Joseph: The Government's decision will be announced as soon as possible in the light of all the views expressed about measures to be taken against indoctrination, including those in another place about the possibility of legislation in the Education Bill.
    Mr. Couchman: I am grateful to my right hon. Friend for that answer. He might like to know that in my constituency the headmistress of Rainham girls' school invited the three main parties to offer people to speak to her sixth form pupils. Does my right hon. Friend agree that that is a better way for pupils to be exposed to political views and policies? Will he issue a circular suggesting to other head teachers that that is a good way to go about such matters?
    Sir Keith Joseph: I agree with my hon. Friend. I think that that method is widely practised.
    Mr. Key: Does my right hon. Friend agree that it is thoroughly bad luck that my question is No. 56 on the Order Paper? The point that I would have raised in my question is that much claptrap is talked on both sides of the House about the politicisation of education. The problem is that it is not being done properly, as my hon. Friend the Member for Gillingham (Mr. Couchman) said. More resources should be directed to teaching politics in schools.
    Sir Keith Joseph: My hon. Friend must realise that, outside the direct teaching of politics, a small minority of teachers introduce politicisation and indoctrination into

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    lessons. Many parents are, alas, deterred from making complaints, but no responsible holder of my office should ignore the widespread anxiety about possible indoctrination.

    Departmental Budget
    Mr. Soamesasked the Secretary of State for Education and Science what representations he has received on the science part of his Department's budget.
    Sir Keith Joseph: I have received 230 representations, all urging more public spending on basic scientific research.
    Mr. Soames: In view of the increasingly unsatisfactory way in which the Government administer the science budget, does my right hon. Friend agree that there should be a Minister in his Department whose sole responsibility it would be to pull together all the strands of the science budget in the Government's spending programme?
    Sir Keith Joseph: If my hon. Friend's suggestion would mean an improvement, it would deserve careful consideration. The Government delegate to the research councils and the universities the decisions about how to spend the allocation of taxpayers' money. That is a continuing process. We do not need a Minister especially devoted to science to achieve that.
    Mr. Pavitt: When did the Secretary of State last discuss this matter with the chairman of the Medical Research Council? In view of its latest report, is he aware that problems have arisen because of short funding of the clinical research centre at Northwick Park hospital, which is funded jointly by the Medical Research Council and the North-West Thames board?
    Sir Keith Joseph: I would see the chairman of any research council who asked to see me. Normally, I receive advice through the chairman of the Advisory Board on the Research Councils. There has been almost an explosion of research possibilities in almost every area. It would be almost impossible for any Government to fund the complete implementation of them all.
    Dr. Bray: Is the Secretary of State aware that, increasingly, many industrialists, including the newly appointed science adviser to the Cabinet Office, Mr. John Fairclough, have said that the tightness of funding on basic science and the cut in university science are gravely undermining our science base and that the diversion into applied research is selling out Britain for the long term?
    Sir Keith Joseph: I am aware of the widespread sense of dissatisfaction, but the hon. Gentleman must accept that one difference between us and our neighbours in northwest Europe is that industry here contributes far less than it does in neighbouring countries to scientific research. That is another factor that must be borne in mind.

    Primary Schools
    Mr. Freudasked the Secretary of State for Education and Science what targets his Department has issued for primary school pupil places; and if he will make a statement.
    Mr. Dunn: Targets were promulgated in the 1986 public expenditure White Paper for the removal of surplus places by 1991 in schools of all types. The targets are not
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    broken down by type of school, but incorporate an assumption that local education authorities will be able to remove half of the national surplus of primary school places.
    Mr. Freud: Why does the Minister's Department take so much less heed of the rising number in the primary sector than of the falling number in the secondary sector of education? Does he accept that this will be an end to the rising-fives, which for many children is the only provision, educationally, that is available?
    Mr. Dunn: Proposals for the closure or amalgamation of any schools are matters for local education authorities. Those proposals come before the Secretary of State by one route or another and, in the light of representations made, the Secretary of State makes a decision. In the context of the hon. Gentleman's question, local authorities must take account of the growth or decline in the school population in the area served by the school.

    Education Committees
    Mr. David Atkinsonasked the Secretary of State for Education and Science if he will make a statement on the position of co-opted members of local authorities' education committees.
    Mr. Dunn: My right hon. Friend continues to pursue the policy set out in circular 8/73.
    Mr. Atkinson: I recognise the constructive contribution that the co-opted representatives of the teaching profession make to education authorities. Is my hon. Friend aware of the growing concern at their right to vote without accountability to their electorate, particularly in those hung authorities where they hold the balance of power? Will he draw these matters to the attention of my right hon. Friend the Secretary of State as soon as possible?
    Mr. Dunn: Any abuse of any system will inevitably bring that system into disrepute. Those who are overstepping their terms of reference should contemplate further their action because, without doubt, they are bringing the system into disrepute. I shall draw the attention of my right hon. Friend the Secretary of State to my hon. Friend's question.

    General Certificate of Secondary Education
    Mr. Colvinasked the Secretary of State for Education and Science if he will make a further statement about progress with his plans for the introduction of the general certificate of secondary education examination.
    Mr. Chris Patten: The programme of preparation for the GCSE is thorough and of high quality. Never before has so much been done to prepare all teachers for an examination reform. The measures announced by my right hon. Friend on 13 March are designed to ensure the successful completion of the training programme and to allow authorities to fund a real increase in spending on books and equipment for the GCSE. I hope that all teachers will seize the opportunities now available to make the GCSE the success which they, as much as we, know it can be and should be.
    Mr. Colvin: I thank my hon. Friend for that comprehensive reply. If it is true, as some teachers are

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    suggesting, that there is a shortage of time for training them in the new syllabuses for the GCSE, could they not come back from their summer holidays a couple of weeks earlier?
    Mr. Patten: We have provided for a couple of days of training during the summer term, which should help a great deal. Phase four training will be particularly important, and I hope that teachers will play a full part in that as well as in phase three.
    Mr. Dormand: Does the Minister recall that, when he opened a recent debate on this subject, he said that it was probably the greatest innovation in the history of education, or words to that effect? In those circumstances, is he not taking the greatest possible risk in setting in train these matters when he knows, and his knowledge has been reflected in his answers so far today, that he does not yet have the full co-operation of teachers? Will he listen to what they are saying?
    Mr. Patten: This is a considerable innovation, which is why we are putting considerable resources into it. I hope that we shall be able to introduce it with the full consent of the overwhelming majority of teachers, but it is possible to make too much of the difference between what is going on in schools where there are good curricular practices, and what will happen when the GCSE is introduced.

    Students in Higher and Further Education

    Thousands

    1979

    1980

    1981

    1982

    1983

    1984

    *1985

    Higher education* (Great Britain)

    Full-time and sandwich

    510

    521

    542

    553

    566

    573

    579

    Part-time†

    268

    288

    297

    303

    312

    312

    328

    Non-advanced further education (England)

    Full-time and sandwich‡

    288

    296

    328

    355

    344

    337

    338

    Part-time

    1,151

    1,125

    1,057

    1,064

    1,151

    1,191

    1,316

    * Universities and public sector higher education. Provisional.

    †Including the Open University.

    ‡Home and overseas students.

    School Books
    Mr. Tony Banksasked the Secretary of State for Education and Science what representations he has received from the Educational Publishers Association on the provision of books in schools.
    Mr. Barronasked the Secretary of State for Education and Science what recent representations he has received on the provision of books in schools.
    Mr. Chris Patten: During 1985 the Educational Publishers Association made representations to the Department about the level of expenditure on school books, and in particular the provision of books for the GCSE. I also had a meeting with it last February at which these issues were discussed. In addition, Ministers have received a number of letters from members of the public about the level of expenditure on school books.
    Mr. Banks: How can the Minister defend a 28·4 per cent. cut in real terms in book expenditure in the past five years? Is he aware that in the London borough of Richmond, controlled by the Liberal party, there has been a reduction in the past year of 77 per cent. in book

    Further Education
    Mr. Chapmanasked the Secretary of State for Education and Science what is his latest estimate of the total number of students in higher and further education; and how this compares with previous years.
    Mr. Walden: The numbers of students have been increasing and in higher education are now at their highest ever level. I have arranged for the detailed figures since 1979 to be published in the Official Report.
    Mr. Chapman: Will my hon. Friend confirm, more specifically, that the number of full-time students in higher and further education has increased by over 13 per cent. in the past six years, and that that, in spite of much misleading propaganda, is a trend worthy of commendation rather than condemnation?
    Mr. Walden: I am glad to have this chance to put the record straight, following earlier exchanges. The numbers of students in higher education since the Government came into office in 1979 are 80,000 up. The proportion of 18 and 19-year-olds entering higher education is 15 per cent. up and the numbers of mature students — an important category—are 12 per cent. up. If those are cuts, they sound very kind cuts to me.
    Following are the figures:
    spending in secondary schools? Does he not agree that if Londoners are interested in the welfare and education standards of their children they should vote Labour in the local elections on Thursday?
    Mr. Patten: Life is difficult enough without trying to explain the Liberal party to the hon. Gentleman, but I do not agree with his figures. Under this Government spending per pupil on books and equipment has gone up by 8 per cent. for primary schoolchildren and by 5 per cent. for secondary schoolchildren. Expenditure on books and equipment per pupil fell by 7·3 per cent. in real terms between 1975 and 1979.
    Mr. Barron: Does the Minister's answer take into account last year's HMI report on books in schools, which said that one third of schools were under-provided with books?
    Mr. Patten: What the HMI report actually said was that poor management and inadequate identification of needs were a more common cause of the shortage of books and equipment than low capitation.

  PRIME MINISTER

    Engagements
    Mrs. Dunwoodyasked the Prime Minister if she will list her offical engagements for Tuesday 6 May.
    The Lord Privy Seal and Leader of the House of Commons (Mr. John Biffen): I have beeen asked to reply.
    My right hon. Friend is attending the economic summit in Tokyo.
    Mrs. Dunwoody: Can the Leader of the House reassure my constituents about radiation fallout? What is the size of the unit monitoring the effect on food and beverages? Is the evidence readily available? Are imported food and vegetables being monitored?
    Mr. Biffen: I am sure the hon. Lady will have all those points comprehensively and satisfactorily answered when my right hon. Friend the Secretary of State for the Environment makes a statement on the matter later this afternoon.
    Mr. Sackville: Does my right hon. Friend agree that events at Wapping at the weekend were utterly disgraceful and that we now know that the real policy of the Labour party is to condone mob violence and attacks on the police?
    Mr. Biffen: My hon. Friend makes an extremely pertinent point. The evidence was available for all who watched their television screens. Those scenes at Wapping were not only a shameful travesty of the true traditions of trade unionism, but underline how wise we are to have proceeded with trade union reform.
    Mr. Kinnock: The hon. Member for Bolton, West (Mr. Sackville) has raised a question which requires a response. The Labour party does not condone violence of any description by mobs or individuals in any circumstances.
    Does the right hon. Gentleman share my concern about the lack of clarity in the information relating to the measurement of increased radioactivity in parts of Britain? Will he give an undertaking that the relevant Departments will today produce figures of the levels of radioactivity that they are candid and accurate and that they will be published in a form that can be clearly understood by the general public?
    Mr. Biffen: As to the first point, of course I realise that the right hon. Gentleman, with total integrity, condemns the kind of violence outside Wapping at the weekend that was shown on our television screens. Whatever may have been said in the heat of the moment by others of his party, certainly I acquit him of having in any sense condoned what occurred. It was for that reason that I deliberately used the word "travesty". None the less, what happened at Wapping is a reminder of what can happen once those who stand behind trade unionism and who wish to manipulate it get out of hand and gain control.
    On the point that the right hon. Gentleman made in respect of the measurement of radiation, as he will know, my right hon. Friend the Secretary of State for the Environment will be making a statement this afternoon. It will touch specifically upon measurement and the extent to which there is verifiable satisfaction that the matter is
    16
    well within safe limits of tolerance. It would be a greater courtesy to the House if it was to get that information from my right hon. Friend.
    Mr. Kinnock: I know that there will be a further statement, but there is an important issue. The right hon. Gentleman is answering for the Prime Minister, so may I put this point to him? Does he agree with Mr. Eddie Ryder, the Government's chief nuclear inspector, that after Chernobyl there will have to be a pause before any further decisions are taken about the future of nuclear power in Britain?
    Mr. Biffen: I would have thought that in the whole development of nuclear power—and this will be attested to by those who work, and work for a proud tradition, in that industry in the United Kingdom—we have never hurried these matters.
    Mr. Couchman: If my right hon. Friend is in touch with the Prime Minister in the course of the day, will he pass to her congratulations on the successful outcome of the talks in Japan, the reports on which seem to be very favourable indeed?
    Mr. Biffen: I believe that my hon. Friend speaks for both Government and Opposition Members in applauding the successes that have been scored at the economic summit at Tokyo. I shall ensure that the message goes to the Prime Minister. The House will have a chance to learn direct from her on Thursday, when she will be making a statement.
    Mr. Benn: Reverting to the events at Wapping on Saturday night and Sunday morning, does the Leader of the House recall that similar language was used about Orgreave and that every miner charged with riot was acquitted? Does he recall that the police video showed that six cavalry charges occurred before a single stone was thrown and that four hon. Members, including myself, who were present on that night saw a succession of baton charges by the police against innocent people? Will the Home Secretary make a statement so that he can be held to account for the action of the police on Saturday night?
    Mr. Biffen: I have to say to the right hon. Gentleman—and as he was there he might perhaps have reflected before making the statement that he has just made——
    Mr. Willie W. Hamilton: The right hon. Gentleman was not there.
    Mr. Biffen: No, of course I was not. One hundred and seventy police were injured at Wapping on that evening and the wounds were not self-inflicted. If the House, like the nation, is to have any sense of balance about these matters, it will know that the police were acting under the most severe circumstances. I am sorry that the right hon. Gentleman could not have used the same language as the Leader of the Opposition.
    Mr. Sayeed: Does my right hon. Friend agree that one of the consequences of the nuclear disaster in Soviet Russia has been to show that the Soviet authorities are keener to save face than to look after their own people?
    Mr. Biffen: There are many lessons to be learnt from the whole of that episode, one of which is the great dangers that attend an enclosed society that has nuclear power and a nuclear accident of this nature occurs. The way that we are reacting to it in the West—and that will be

    17
    underlined by the statement later this afternoon—demonstrates that our main concern is to secure public confidence, which can be achieved only by a proper system of disclosure.
    Mr. Wallaceasked the Prime Minister if she will list her official engagements for Tuesday 6 May 1985.
    Mr. Biffen: I have been asked to reply.
    I refer the hon. Gentleman to the reply that I gave some moments ago.
    Mr. Wallace: Bearing in mind what the Leader of the House has said about the need for proper public disclosure in the nuclear industry, and bearing in mind also that the minor explosion at Dungeness was kept quiet for a number of weeks and that my constituents have had a considerable job trying to prise any information out of the Atomic Energy Authority in preparing a case against the Dounreay expansion, has the time not come for us to review the whole ethos of secrecy that pervades the British nuclear industry? Should we not make a start by abolishing the Official Secrets Act?
    Mr. Biffen: On the specific point about Dungeness, there has been no safety factor involved in that which has any relationship whatever to nuclear power, and the hon. Gentleman's implication is wholly unfounded. I dare say that quite soon we shall be able to arrange for a debate on nuclear power and, although I have no wish to usurp the authority of the Chair, I hope that the hon. Member for Caithness and Sutherland (Mr. Maclennan) and himself will both be called so that we can hear their sharply contrasting views on the subject.
    Mrs. Currie: Is my right hon. Friend aware that many Conservative Members represent coal miners and those who work in coal-fired power stations, particularly in Derbyshire, the smoke from which has been accused at most of damaging the health of a few trees? Therefore, will he encourage those Ministers concerned to ensure that we can look to the refurbishment and redevelopment of those power stations to help provide the energy needs of the future?
    Mr. Biffen: I shall certainly carry out that request.
    Mr. Austin Mitchellasked the Prime Minister if she will list her official engagements for Tuesday 6 May.
    Mr. Biffen: I have been asked to reply.
    I refer the hon. Gentleman to the reply that I gave some moments ago.
    Mr. Mitchell: When the Prime Minister recommended her economic policies as appropriate for adoption by the other Heads of State at the Tokyo summit, the economies of nearly every one of which has higher current and prospective growth, higher productivity and investment, plus lower unemployment, interest rates and inflation, can the Leader of the House tell us whether anyone laughed?
    Mr. Biffen: No, but if the hon. Gentleman wants to play his contribution for laughs, I am sure that there is a by-election electorate which wants to consider Britain's achievement in terms of output, exports, falling interest rates and falling levels of inflation, and to contrast that with the policies essayed by the right hon. Member for Cardiff, South and Penarth (Mr. Callaghan), sustained by the leader of the Liberal party, which resulted in the debacle of Labour's defeat in 1979.
    Mr. Beith: Does the Leader of the House recognise the profound impact that the Soviet nuclear explosion has had on British public opinion, leading people to recognise just how enormous the consequences of such an accident will be, however unlikely? Has he forgotten his own days as a nuclear rebel, when he voted with us and against the right hon. Member for Chesterfield (Mr. Benn) when he sought to expand Windscale?
    Mr. Biffen: It is just possible that the sight of the right hon. Member for Chesterfield (Mr. Benn) caused me to scurry into the Lobby alongside the hon. Gentleman, but that episode demonstrates that I have always been open-minded and even-handed about nuclear power, arid one has never needed that more so than now, when certain forces in our society that want to undermine and destroy what benefits nuclear power can bring point to the Russian example to draw exactly the wrong conclusions. What the hon. Gentleman should be saying, I hope that he will be saying it on a future occasion, is how impressed he is by our nuclear industry's safety record and how wise we are to have the kind of planning procedures that attend its development.
    Mr. Nicholls: Does my right hon. Friend agree that it is bad enough that over 170 police officers should be attacked and beaten by a mob of Left-wing thugs, but what is infinitely worse is that Labour Members should use the occasion not to condemn lawlessness but to pillory the police? Can any political party that harbours such views seriously be fit for Government?
    Mr. Biffen: Enough was seen on television to ensure that those who have taken the stand that they have this afternoon in making an attack upon the police demean themselves much more than they can be demeaned by any words of mine.
    Mr. Freesonasked the Prime Minister if she will list her official engagements for Tuesday 6 May
    Mr. Biffen: I have been asked to reply.
    I refer the right hon. Gentleman to the reply that I gave some moments ago.
    Mr. Freeson: Has the Leader of the House seen the reports on the Top Salaries Review Body proposals, which will probably lead to an increase of £100 a week for certain top brass in the Army, the Civil Service and judges? Will he give an undertaking now on behalf of the Government that when that report is formally received there will at least be a freeze on any proposals along those lines so that we do not have the obscenity of many people in Britain having to live on about £100 a week while it is proposed that people in certain positions should receive £100 a week on top of the high increases that they received last year?
    Mr. Biffen: Yes, I can confirm that I have seen the newspaper reports of the reviews, and it is true that they have now been deposited with the Government. I have not seen those reviews, and I do not know what figures they contain, so I cannot comment upon the right hon. Gentleman's assertion,. but they will be treated in the appropriate prudent and measured way.
    Mr. Greenway: Will my right hon. Friend find time today to read the Ealing Labour party election manifesto, which proposes the banning of sexist calendars——
    Hon. Members: Order.
    Mr. Speaker: Order. The hon. Member's question must relate to the responsibilities of the Leader of the House.
    Mr. Greenway: I am asking my right hon. Friend to read that document. The Labour party will double the rates in two years. Would not the electors of Ealing be thoughtless if they voted for Labour on Thursday?
    Mr. Biffen: My hon. Friend is quite correct to draw attention to that document, which he has otherwise called a treasure-house of absurdity — a masterpiece of understatement. My hon. Friend is wise to draw the attention of the House to the basic nature of the divisions in local authority that affect Londoners and others. People can either vote for a Government of proven experience and success, backed by their supporters, or for the uncertain Labour voices that appear to have only one thing in common, which, is a desire to, spend more public money, either ratepayers' or taxpayers'.
    Mr. Hardyasked the Prime Minister if she will list her official engagements for Tuesday 6 May.
    Mr. Biffen: I have been asked to reply.
    I refer the hon. Gentleman to the reply that I gave some moments ago.
    Mr. Hardy: Does the right hon. Gentleman agree that a major reason for the Government's espousal of the pressurised water reactor is that it will confer considerable industrial export opportunities upon Britain? In the light of the Russian experience, does the right hon. Gentleman now agree that the prospect of such orders should be viewed with much greater caution? Does he further agree that no country with an inadequate bureaucracy or insufficient technological capacity should be seen as a ready customer?
    Mr. Biffen: The hon. Gentleman is a very fair and well-informed controversialist in these matters, and would agree that these are all factors for assessment and report in the Sizewell inquiry.

Russian Nuclear Accident (Monitoring)
3.31 pm
The Secretary of State for the Environment (Mr. Kenneth Baker): With permission, Mr. Speaker, I should like to make a statement about the arrangements for monitoring the effects in the United Kingdom of the accident at Chernobyl, and the results obtained.
As soon as news of the accident was received, the standing arrangements for monitoring air, water and foodstuffs, especially milk, were stepped up. The Departments mainly concerned are the Department of the Environment, the Ministry of Agriculture, Fisheries and Food and the Scottish and Welsh Offices, which have been working closely with the National Radiological Protection Board. Samples have been taken daily and since last Friday 2 May, daily bulletins have been issued by the NRPB after consultation with Government Departments. In addition, my right hon. Friend the Minister of Agriculture, Fisheries and Food has set up an incident room, from which advice on foodstuffs is available for members of the public.
The remnants of the cloud from Chernobyl arrived over the United Kingdom on 2 May. As a result, an increase in the normal background level of radiation was found in air samples taken at various parts of the country over the weekend. The levels found were nowhere near the levels at which there is any hazard to health, and more recent samples show that the levels in air are now falling rapidly as the cloud has moved away.
As a result of heavy rain in the northern part of England and Wales and in parts of Scotland, the levels of radiation in samples of rain water were found to be at a level where it was appropriate to warn people against drinking fresh rain water over long periods. That might apply to a few farmers in remote parts and, possibly, to some campers. There would be no hazard if the recently fallen rain were diluted with rain water already collected in water butts, or by streams, wells or reservoirs. The levels of radiation in piped water are less than one hundredth of the level at which any special action would be needed.
My right hon. Friend the Minister of Agriculture, Fisheries and Food is responsible for the monitoring and control of foodstuffs. I understand that samples of milk and fresh produce have shown amounts of radioactivity which are below the level at which action ought to be considered. Levels of radiation are now likely to decline over the next few days. I should stress that in judging whether the levels of radiation found require any special action, we act in accordance with international recommendations published by the International Commission on Radiological Protection.
My right hon. Friend the Secretary of State for Social Services is also keeping a close watch on imports of food into the United Kingdom from Russia and Poland, which was dispatched after 26 April this year.
The House will appreciate from what I have said that the effects of the cloud have already been assessed and that none presents a risk to health in the United Kingdom. Extensive monitoring will continue and its results will be made available to the public and to the House.
Dr. John Cunningham: The House will be grateful to the Secretary of State for making this statement and I hope it will deal with some of the natural concern
22
that is being expressed around the country. I wish to ask the Secretary of State a number of questions based on what he has said.
Will the Secretary of State tell the House whether anyone in the Government has overall responsibility for the co-ordination of the monitoring, the analysis and, most important, the dissemination of information to the public? There is considerable confusion among members of the public and the media about the nature of the advice from the National Radiological Protection Board, the Ministry of Agriculture, Fisheries and Food and other people who are making statements. Is it not absolutely essential that explicit, frank and open information is given to the public as regularly as possible?
Why is it that again, in this statement today, the Secretary of State has not been specific about the nature and the level of the radioactivity involved? The public are surely entitled to know these facts. Can the Secretary of State confirm that the majority of the contamination is iodine-131—an isotope with a half-life of eight days—but that, in addition, isotopes of tellurium, caesium-137, ruthenium, lanthanum and technetium have been detected? If that is true, what advice will be given about the longer-term nature of some of those isotopes and the consequences of their deposition?
Is the Secretary of State satisfied not only with the coordination of the monitoring but with its range and provision? Are sufficient localities being monitored in sufficient detail? Will the Secretary of State examine this and reconsider the situation?
Why has it not been possible so far for information to be given to the public on the basis of comparisons with the normal background levels of radiation? Why should the public not be told how much more radiation they are now being exposed to when compared with the normal background radiation? Is the Secretary of State satisfied that there is no need for the health authorities, for example, or the water authorities to give more detailed local information in areas where especially high levels of contamination have apparently occurred?
Can the Minister confirm that the highest levels of contamination were recorded on 3 May and that on 4 and 5 May those levels had declined and they are still continuing to decline? Will that information also be freely available to the public and the press?
Mr. Baker: I confirm what the hon. Member has said on the last point. My Department is co-ordinating the monitoring of this information. Our first indications that the radioactive cloud was over the country were on Friday; and over the weekend emergency operations were in progress. I was in touch with colleagues at that time. I agree with the hon. Gentleman when he asks the Government to be explicit, frank and open with information.
I have asked the NRPB, which has issued statements each day, to make available this afternoon a complete list of the data available to it in press offices in my Department, the Department of Health and Social Security and the Ministry of Agriculture, Fisheries and Food. It is bulky statistical information, but it represents all of the information that we have on monitoring. Initially, I think that only about 50 copies per press office will be available because it is bulky, but we will try to make more available during the day. Those who wish to know about that

23
information can approach the public inquiry points in the press offices of those three Departments. I agree that the information should be made available.
The Ministry of Agriculture, Fisheries and Food has opened a telephone line for public inquiries—it is 930 1196—and the Scottish Office will make a number available this afternoon, as will the Welsh Office. I strongly agree that the information should be available.
Mr. Robin Maxwell-Hyslop: Is my right hon. Friend aware that quite a number of schools and other groups have entered into contracts to travel to Soviet Russia and paid deposits on those contracts, but that the cancellation insurance excludes radiation from the events that can lead to repayment of the deposit? Does the Government's advice that has been given to date and any advice that my right hon. Friend should give constitute a statement of public policy which would void such contracts so that deposits can be recovered? What advice do the Government have for the organisers of such trips, who must either pay the remainder of the money for the Whitsun holiday or lose their deposits, unless the contracts can be voided on grounds of public policy?
Mr. Baker: My hon. Friend is quite right to raise this matter. No doubt he has a case in mind.
Mr. Maxwell-Hyslop indicated assent.
Mr. Baker: Local education authorities are responsible for the health and safety of children in their schools, and I expect them to act responsibly when carrying out that duty. The Foreign Office has already advised that visitors should avoid the western Ukraine, Byelorussia, Kiev and Minsk, Lithuania and north-east Poland. If my hon. Friend could let me have details of the case that he has in mind, I shall certainly raise it with my right hon. Friend the Secretary of State for Education and Science and with my right hon. and learned Friend the Foreign Secretary. I take his point about contracts.
Mr. Simon Hughes: Does the Secretary of State accept that the Government never expected such high levels of radioactivity from an incident so far away? Will he admit that, stripped of the gobbledegook, he has said today that the effect of the radiation on food, milk and water has come near to emergency reference levels? Will he also accept that there is grave discontent that, added to the continuing secrecy about some elements of nuclear activity — as was manifest last week at Dungeness—there is now unclear information for the public? Does he agree that the only solution is a daily county-by-county bulletin on the level of radioactive pollution? Does the right hon. Gentleman draw the conclusion that we on these Benches have long drawn and which the people of Britain clearly draw—they are concerned that the British industry is not safe enough and they do not want the nuclear programme to be expanded by a large majority?
Mr. Baker: I do not know whether that is alliance policy, or Liberal policy, but the hon. Gentleman cannot chide the Government about being frank. There are no party points to be made on this. The information which has been made available by the NRPB is the fullest information and the only information that the Government have on the monitoring. That information will be made
24
available. It should be contrasted with what will be made available in Russia. None of this sort of information will ever be made available in Russia. I take the point that many people, being aware of the dangers of this type of incident, are rather bemused about the complexity of the matter. There is so much talk of becquerels, milliSieverts, curies and rems. I think that in simple terms people are asking: is it safe to drink milk?—the answer is yes; is it safe to drink water from the tap?—the answer is yes; is it necessary for children to take iodine tablets?—the answer is no.
Mr. Albert McQuarrie: I am grateful to my right hon. Friend for the informative comments that he made in his statement. In rural Scotland, however, many farms and houses prefer to use rain water for their water supplies, and this applies not only to individuals but to dairy herds. Will he confirm that he will be advising his right hon. and learned Friend the Secretary of State for Scotland to use the facilities of monitoring services such as exist in the Macaulay Institute for Soil Research and in the Rowatt Institute in Aberdeen in order to ensure that the safeguarding of these water supplies and dairy herds is assisted in any investigations that he may make in Scotland?
Mr. Baker: My right hon. and learned Friend the Secretary of State for Scotland has asked water authorities to assist such people, who may depend rather more on rain water than other people in the rest of the United Kingdom, by telling them where they can collect water from public mains supplies. Water authorities and environmental health authorities have worked together to ensure that anybody who depends on rain water gets the right advice and obtains access to the mains supply. The NRPB has said with regard to rain water that people who depend on it should not drink it for a period of a week.
Mr. Jack Ashley: Does the Secretary of State agree that we want to avoid unjustified panic, but we want also to avoid unnecessary risks, so that people must be as fully informed as possible about this and other accidents? Can he assure the House that every accident in Britain involving nuclear waste of any kind or nuclear energy has been fully reported? Can he ensure that any future accidents in Britain will also be fully reported?
Mr. Baker: The arrangements for reporting accidents—nuclear accidents—were set out in a reply on 26 July 1982 by my right hon. Friend the Member for Croydon, Central (Mr. Moore) to a question asked by the hon. Member for Copeland (Dr. Cunningham). Those recommendations were made not by Government specifically but by the nuclear installations inspectorate, and it is those guidelines that we have followed since then.
Mr. Kenneth Carlisle: Will my right hon. Friend advise the House whether the NRPB is adequately equipped to monitor effectively the radiation levels in all parts of the country?
Mr. Baker: The NRPB, I think, has been doing a very good job. I think that Mr. Dunster has been very frank in the appearances that he has made on television over the weekend. The NRPB has a staff of some 300. It has monitoring bases at three of its laboratories—Chilton, Glasgow and Leeds. All nuclear installations in the United Kingdom, of course, have equipment that is capable of monitoring radioactivity.
Mr. Gordon Wilson: Is the Minister not aware that one expert has said that some tens of deaths will occur from cancer at some future stage because of this? While one appreciates that this could be a small number, relatively speaking, is he right to hold the opinion that there is no danger to public safety? Secondly, when was the incident room established. Will he confirm that the hot line has been set up just today and does he not think that this alarming lack of concern about informing the public of what may be occurring is symptomatic of the attitude of the Government in relation to these matters and puts a question mark over the way in which they have tackled this whole business?
Mr. Baker: No. The incident room was set up on Friday as soon as we knew that the radioactive cloud was over the United Kingdom. Up until then it had not been over the United Kingdom. Milk had been monitored since last Monday, when we first had news of the catastrophe in Russia.
Until the incident is over and it is possible to estimate the number of people exposed and the doses they have received, it will not be possible to produce the estimate for which the hon. Gentleman has asked. However, the likely total exposure will result in a very small additional risk to any one person. That has been emphasised by Mr. Dunster, who told me that the risk to individuals in Britain from the Russian reactor accident was very small.
Sir Hector Monro: As one who supports the nuclear industry and acknowledges the high standards of those who work within it, may I ask my right hon. Friend whether he agrees that it has been difficult for those who have tried to allay the fears of constituents over the weekend to find a common line from the many organisations involved? Would it not be helpful if the Government had a central point to which all information was fed, from which it could be disseminated to the media? This would ensure that they did not exaggerate the position and cause unnecessary alarm.
Mr. Baker: We have been operating the usual arrangements which exist within Whitehall for coordinating the Government's response to emergencies, and certain unusual circumstances. I am satisfied that these contingency arrangements have been working satisfactorily. Ministers have been kept fully up to date with the facts. I had talks with several Ministers yesterday and their response to the unfolding picture has been fully coordinated from the centre. It is inevitable that in a matter of this sort several Departments will be involved. The Department of Health and Social Security has responsibility for health, and the Ministry of Agriculture, Fisheries and Food is concerned with food in the United Kingdom and the testing of it. My Department is involved in environmental monitoring. The division of responsibilities is inevitable and one cannot get over it. I take note of what my hon. Friend has said, but it is the first time that the world has had to go through the experience of such a nuclear accident. I am certain that lessons will be learnt from it, and the lessons will be infinitely more valuable to the world if Russia is prepared to make more available to the world the effects within its own country.
Mr. John Home Robertson: Is the Minister aware that these events are assuming a particular significance in my constituency, where the first deliveries
26
of nuclear fuel were made at Torness power station only 10 days ago? Is he aware also that the Soviet nuclear power agency is not the only one to have a reputation for excessive secrecy and misleading propaganda? Will he confirm that these events are likely to increase the background levels of radiation in the environment and in food for the long term? What, specifically, will the Government do about imports of food products from heavily contaminated areas of eastern Europe?
Mr. Baker: Imports from Russia and Poland are now being stopped at the port of entry at the request of the DHSS. Samples will be taken to the MAFF laboratory at Lowestoft. The European Commission is considering this afternoon appropriate measures for intra-Community trade and trade with certain eastern bloc countries. This is an important matter and imported foodstuffs will not be released from port until we are satisfied that radioactivity is not present in them.
Miss Janet Fookes: As my right hon. Friend is responsible for co-ordinating Government activities in this instance, I ask him to repair the omission of any reference to those who are most at risk—those who are, or will be, returning from the Soviet Union or neighouring countries. Is he satisfied with the actions that are being taken to give such individuals thorough monitoring at the time of their arrival in the United Kingdom and at later stages, as we know that radiation can have long-term effects?
Mr. Baker: I appreciate my hon. Friend's concern. The National Radiological Protection Board monitored the students who returned from Kiev and Minsk at the end of last week and the radiation levels detected gave no cause for concern. Travellers returning from north Russia and eastern Europe to the United Kingdom who wish to undergo reassurance monitoring should go to their main police station, where they will be put in touch with the relevant place under the national arrangements for the radioactivity scheme.
Mr. Tony Benn: I thank the Minister for making a statement, and I recognise the difficulty in providing full information, but will the right hon. Gentleman recognise that there is widespread public anxiety about the implications of the accident and the possibility that such an accident might occur elsewhere in the world? As he has told the House, there are many Ministers with different responsibilities. Will he be so kind as to ask his colleagues to make possible a day in the House when we can discuss these matters, so that Members can put forward their anxieties and opinions and be given a measured Government answer? I think that the right hon. Gentleman will accept that there is a desire that goes across party lines to obtain some clarification of the full implications of what occurred in the Soviet Union, and of its long-term effect on our energy plans.
Mr. Baker: It will take some time to measure the effect, because exposures will vary in different countries, depending on the concentration of radioactivity in the cloud and the rainfall in a particular country. But I accept what the right hon. Gentleman says about fears that ordinary people have about this incident. I very much understand those fears. They arise from the unknown and from apparent secrecy. I have tried to allay those fears this afternoon by putting such information as we have before the country.
Mr. Teddy Taylor: Why has the ban which, according to the tapes, the Commission has just imposed on east European produce specifically excluded East Germany, although most of eastern Europe's produce goes through East Germany under an abuse of the inner German trade agreement? Will my right hon. Friend inquire whether we have the power to impose a ban on East German produce, despite the terms of the inner German trade agreement?
Mr. Baker: I was not aware of that point, but I shall look into what my hon. Friend has said about East Germany this afternoon.
Dr. John Marek: I thank the Secretary of State for making such information available, but perhaps I can press him a little further. Will he undertake to ensure that the information collected in the next week or so in made available? Will he confirm that the raw information will be made available, and that any analyses done by his or any other Department that leads to identification of the materials causing the radiation will also be made available? Moreover will he ensure that the Departments concerned are helpful about answering the questions of any members of the public who have a reasonable interest in this matter?
Mr. Baker: The answer to the hon. Gentleman's latter question is yes. I have announced that the information will be available through the public inquiry points in the various Government Departments. As the hon. Gentleman has said, the raw information or data will be of interest to scientists in the academic world and to analysts who can work on it. There is no reason why information should not be made available on a continuing basis, either daily or in batches of two days.
Mrs. Elizabeth Peacock: Is my right hon. Friend aware that most comment on the radioactive contamination refers to a short-term problem, presumably attributed to iodine-131? Will he confirm the level of long-term radioactive contamination due to strontium-90 and caesium-137?
Mr. Baker: As the hon. Member for Copeland has said, the radioactivity of iodine-131 declines by half over a period of about eight or nine days. The radioactivity will remain for much longer in the other nuclides. That will, indeed, conic out in the monitoring. We are fortunate in the United Kingdom because at this moment of time—I say, at this moment of time—the amount of precipitation of radioactivity is relatively low compared with other countries. The advice that I have received from scientists this morning and this afternoon is that the increase in radioactivity in the general background is very low, but there has been a small increase.
Mr. Robert Maclennan: Does the Secretary of State agree that openness is also important internationally? Does the European Commission propose to enter into discussion with COMECON about the monitoring of foodstuffs? What is the Government's attitude towards the proposal to ban imports from other east European countries than just Poland and the Soviet Union? Is the right hon. Gentleman aware that many people in the British nuclear industry have long held grave reservations about the particular reactor that caused this international catastrophe, and have said as much for many years?
Mr. Baker: The European Commission has been meeting this afternoon and we will certainly take heed of what it says. If we were satisfied that imports had to be stopped from any country in the interest of the health of our people, we would stop them. There is no question about that.
Regarding the safety of the Russian reactor, hon. Members will have read enough in the weekend press to know that our scientists thought that the design of the reactor was inherently unstable. The Russians have been aware of that fact for some time. I hope that one outcome of the disaster will be that countries will be much more aware that, in the design of nuclear installations, they have an international obligation to take into account the views of others.
Mr. Michael Forsyth: Does my right hon. Friend agree that one of the most reprehensible aspects of the whole affair has been the way in which the opponents of nuclear power have deliberately sought to exaggerate the dangers and to exploit public fears? As I have a private water supply in Scotland, an expectant wife and young children, does he agree that I was right to advise them that there was more danger from luminous watches and alarm clocks around the house than from any fallout arising from the Chernobyl disaster?
Mr. Baker: There are, of course, many sources of radiation in the atmosphere. The level of background radioactivity varies in different parts of the country. I appreciate that such a disaster does cause public anxiety and concern. I have tried, this afternoon, to put the cards on the table to allay some of that. As I have said, the levels so far in the United Kingdom do not provoke great concern. That does not mean to say that we should not be vigilant in maintaining our monitoring and letting the public know of the consequences as soon as possible.
Mr. George Foulkes (Garrick, Cumnock and Doon Valley): Can the Secretary of State confirm that the Scottish Office issued a statement today saying that the statistics which it published yesterday were totally inaccurate? In view of that, will he review the accuracy, speed of collection and comprehensive nature of the gathering of such statistics? Since the effects of radiation are cumulative, will the right hon. Gentleman institute some kind of monitoring, especially of children, of the cumulative effects of the Chernobyl disaster, including rain, milk and entry into the food chain, coupled with discharges from Sellafield and other sources in the United Kingdom, and see what effect that total accumulation of radiation is having on children, particularly those in the west of Scotland?
Mr. Baker: I understand from my hon. Friend the Under-Secretary of State for Scotland that one figure was corrected yesterday. As I understand it, it was corrected downwards.
Mr. Foulkes: It was still wrong.
Mr. Baker: I am advised that inhalation of the cloud and skin exposures to radiation on the ground contribute very small doses to the body—about one ten-thousandth of the annual dose limit. Therefore, there need be no cause for concern.
Mr. Bill Walker: Is my right hon. Friend aware that over the weekend and yesterday, Scotland had some very heavy rain storms? Some of the

29
Scottish media reported that the rain storms were from the cloud with the radiactive material. Can he confirm that there is no danger to people in Scotland, and that next week's visit by the Prime Minister and other senior members of the Government to the Conservative party conference in Perth will show that there is no danger?
Mr. Baker: I do not believe that the current level of radioactive precipitation in Scotland will divert my right hon. Friend the Prime Minister from visiting Scotland.
Mr. Allan Rogers (Rhondda): I thank the Secretary of State for the information he has given today and for his assurances that the fullest possible information will continue to be given. Will the right hon. Gentleman ensure that the information will be given in its proper context? Old and young people are genuinely frightened by the statements that have appeared in the newspapers this weekend. Does the right hon. Gentleman agree that the childishly trivial remarks of the hon. Member for Stirling (Mr. Forsyth) and the ridiculously alarming remarks of the hon. Member for Southwark and Bermondsey (Mr. Hughes), who are looking for cheap political points, do not help the situation?
Mr. Baker: I agree with the latter part of the hon. Gentleman's last question, but not the first part. It is very difficult to explain some of these technical matters in a simple way. It is not impossible, and we shall seek to do so. A frank explanation is the best way of doing that.
Viscount Cranborne: In view of my right hon. Friend's strictures about the need for complete Soviet frankness in such matters, should we not be considering a little more than an expression of hope and trying to co-ordinate something which will induce the Soviets to come clean on their nuclear safety record? Should we not be trying to bring into this not only western European countries but COMECON countries which are most directly affected?
Mr. Baker: The COMECON countries seem to have been adversely affected in some cases. The initial reaction of the Soviet Government was to close in upon themselves and put down the shutters. That is perhaps the old tradition in which Russia has conducted itself over the centuries. It was only towards the end of last week that Russia began to open up and realised that there were advantages in doing so. A fairly full statement was made by the Soviet Government on Friday and Saturday. I hope that they will be frank and open, because radioactivity knows no national boundaries. The disaster has affected some of Russia's small neighbours. It is the duty of a powerful country such as Russia, which is capable of producing electricity from nuclear power, to be frank and open. Even at this stage, I feel that there was some shame in Russia that this disaster had occurred and the Government did not want to open up the matter. The tragedies in America, such as that involving the Challenger mission, have been dealt with openly.
Several Hon. Members rose——
Mr. Speaker: Order. I appreciate that this matter is of grave concern to hon. Members and their constituents, but I must bear in mind the fact that we have a heavy day in front of us. The Adjournment debate must end at 7 pm. I will allow questions to continue for a further 10 minutes; that is to say, until a quarter past four. After that, we must move on.
Mr. D. N. Campbell-Savours: If the scientists are so unanimous in their condemnation of the technology in the RMBK plant in the Soviet Union, why was it that successive Governments did not protest at the development of that plant? They must have foreseen the inevitable disaster that has taken place. Why has there been a cover-up over the gas radiation leak from Dungeness A? Do the Government intend to make representations through the International Atomic Energy Agency to ensure access in France to the six PWR reactors, all of which are within 90 miles of London?
Mr. Baker: My right hon. Friend the Minister of State, Department of Energy, intends to make a statement fairly soon about access to the International Atomic Energy Agency. It is a bit thick to say that somehow we are to blame for the design which was adopted by the Russian nuclear industry. I do not know what the reaction would have been if we had protested. We have made it clear that the design was unsuitable and inherently unstable so far as the United Kingdom was concerned. The responsibility in this area must lie in the Kremlin.
Mr. Sydney Chapman: Most of my constituents will be reassured by my right hon. Friend's statement this afternoon which, if I understood it correctly, said that the increase in radiation in parts of Britain was at a level of only one hundredth of that which would have caused a potential danger. Will my right hon. Friend accept that many more people would be reassured if they could measure the amount of increased radiation caused by the accident against, for example, the radiation they get from television sets in their homes? Can my right hon. Friend provide those figures?
Mr. Baker: I will consider that. Many people would be surprised at the amount of radon radioactivity which is naturally in the atmosphere. Someone having a picnic in Cornwall and sitting close to a granite rock may be subjected to a high level of radiation.
Mr. Tom Clarke: Does the Minister accept that there are genuine anxieties in Scotland, and that those anxieties are not helped by the contradictory statements which are made from one day to another? Is the Minister satisfied with the co-ordination between the Scottish Office, the Milk Marketing Board and the consumer? Why is there such a delay between one test and the other?
Mr. Baker: As I understand it, there is good cooperation. The Scottish Office follows the matter closely and is part of the team doing so.
Mr. James Couchman: Is my right hon. Friend aware that, this morning, there was a most responsible programme on the radio during which two experts—one from the NRPB and one from Newcastle university—sought to still the perfectly justifiable fears of a number of the people who rang in? Because of the unique ability of the Public Information Office to disseminate information, will my right hon. Friend ensure that that office makes sure that the BBC is positively briefed in the next few days on this subject so that it can disseminate informaton to the people at large?
Mr. Baker: I take entirely my hon. Friend's point about the media's importance in the past few days. In my judgment, they have been handling the matter very responsibly. Today, I saw a further broadcast on the

31
midday news and the 1 o'clock news in which the interviewer put the difficult points straight to a leading United Kingdom physicist. Those points were answered frankly. The interviewer did not let the physicist wriggle away from them. Over the weekend, I saw several interviews, as, I am sure, did hon. Members on both sides of the House, and was impressed by their frankness and openness.
Mr. Reg Freeson: Is the right hon. Gentleman aware that the concern among hon. Members about the Government not making representations about the accident in Russia does not imply that the British Government or Britain were to blame for what happened? Why were representations not made? Will representations about such models be made from now on? It has been reported—none of us can yet be sure that it has any validity—that the first generation of Magnox stations in Britain have similar weaknesses. Are the Government checking that? Will a statement be made on that aspect?
Mr. Baker: I am sure that, as a result of this incident, there will be quite justified international concern about safety at nuclear power stations which will be made evident by Governments and international agencies. The right hon. Gentleman must appreciate that the Soviet Communist party at its 27th congress approved a massive expansion of its nuclear generating programme, doubling its size in the next few years. I do not know whether the Soviet Government will listen too much to representations by other countries when they probably do not take too many of their own people into their confidence.
Mr. Tony Marlow: In an attempt to put the matter into context, assuming the worst case and on the best information available, how does the total radiation from Chernobyl compare with the total radiation from the Hiroshima bomb? Given that Chernobyl is basically part of the Ministry of Defence in Russia rather than an electricity generator, why have not traces of plutonium been registered? What help are we giving the Russians?
Mr. Baker: I am not in a position to answer any of those questions. I shall try to find the answers. I do not have off the cuff the comparison between radiation fallout at Hiroshima and radiation fallout at Chernobyl.
Mr. Robert Kilroy-Silk: Send a message to the Box.
Mr. Baker: I suspect that, even if I sent a message to the Box now, the information would not be readily available in the next few minutes.
Mr. Tam Dalyell: At what time was, first the Secretary of State and, secondly, the Prime Minister first informed that British scientists were talking to their Russian counterparts about the problems at Chernobyl?
Mr. Baker: I should have to have notice of that question.
Mr. David Sumberg: This is a matter of concern to my constituents who live in the affected area. As my right hon. Friend was kind enough last Friday to visit my constituents, will he put the matter into perspective by emphasising that it is perfectly safe to drink the tap water in Bury? Does my right hon. Friend accept
32
that the announcement and the questions which followed are in stark contrast to the way in which the matter was handled in the Soviet Union?
Mr. Baker: My hon. Friend can certainly assure his constituents that it is perfectly safe to drink and to use tap water anywhere in Britain, including Bury'. It is perfectly safe also to drink milk.
Mr. Greville Janner: How long does the right hon. Gentleman expect the emergency operation to be maintained? What is happening to the radioactive cloud? Is it expected to move again in this direction? I ask that question specifically because, last week when I raised it, I received a reassuring reply which was overtaken by events that have worried the entire country.
Mr. Baker: From time to time, Ministers are prone to make optimistic assessments. I shall certainly not get into the business of weather forecasting and of trying to judge what will happen to the cloud. Monitoring will be maintained until we feel that the emergency has ended.
Mr. Dennis Skinner: Why does the nuclear industry operate in reportable incidents only by guidelines and not by law? If the right hon. Gentleman wants to be frank and open, why does he not treat nuclear incidents like the reportable incidents in the coal mines where anything more than a broken arm is reportable under the mines and quarries legislation? If that were done, the right hon. Gentleman could answer the charge which has properly been laid against him, that he is attacking the Soviet Union for failing to respond properly to the disaster but is doing the same himself? Is the right hon. Gentleman doing that because he agrees with the Secretary' of State for Energy that nuclear power is the safest form of energy known to man? Would it not be a good idea for the right hon. Gentleman and the Secretary of State for Energy to put a paper before the Cabinet to recommend halting the pit closure programme in the light of the recent disaster and the others that have preceded it worldwide?
Mr. Baker: The hon. Gentleman goes a little wide of the matter, but I do not criticise him for that because for some time he has taken that line about the nuclear industry. I have referred to the procedures which we have followed since 1982. They were recommended to us by the nuclear installations inspectorate, which is answerable to the Secretary of State for Employment and is concerned with safety. Those procedures have been followed in dealing with incidents in the United Kingdom.
Mr. Jeremy Corbyn: Does the right hon. Gentleman accept that much of the disquiet and opposition voiced in the past few days about the nuclear power industry and its safety record is of legitimate concern? Does the right hon. Gentleman agree that, so long as Britain or any other country in the northern hemisphere has a nuclear power industry, there is a dangerous and implicit possibility of pollution following an explosion or emission from a nuclear power station? Does the right hon. Gentleman agree that, so long as we have a nuclear power industry, problems will be associated with the disposal of radioactive waste? Does he agree with my right hon. Friend the Member for Chesterfield (Mr. Benn) that we need a debate in Parliament so that opposition to the whole nuclear programme and its dangers can be voiced here, as they have been voiced outside?
Mr. Baker: I shall certainly draw the hon. Gentleman's point about a debate—if it has not already been heard—to the attention of my right hon. Friend the Leader of the House. The hon. Gentleman has moved into the matter of safety of nuclear power generation. I remind him that the United Kingdom has a very good safety record. There has been no full-scale major incident during 25 years of operation of civil power stations in the United Kingdom. Very high standards of safety were involved in the design, and construction of British nuclear power plants. Safety is very important and is the predominate element in the generation of electricity from nuclear power.
Mr. Alfred Dubs: Implicit throughout the right hon. Gentleman's statement has been the belief that there is a threshold below which levels of radiation are safe. What is the right hon. Gentleman's evidence for such a threshold? Is it not equally tenable that radiation, like other poisonous substances, becomes more dangerous with each increment? Is not the idea of a threshold really a myth?
Mr. Baker: I do not agree. There are safety levels, and they are not levels that we, or British scientists in particular, have conjured up. For example, the NRPB is working to recommendations published by the International Commission on Radiological Protection.
Dr. Cunningham: As the purpose of today's statement is to clarify the position for the public and to allay their genuine fears and concerns, I should like to re-emphasise the point I put earlier to the Secretary of State. It is important to give the public information in such a way as to enable them to understand it and make valid comparisons. Although we know that the general public do not every day bump into milliSieverts or becquerels, they can make simple numerical comparisons. There is no good reason why people should not be given information. Nevertheless, we want all the information to be published—and statements which make simple numerical comparisons with existing background levels of radiation.
Mr. Baker: The hon. Gentleman did make that point at the beginning and it was also made by my hon. Friend the Member for Chipping Barnet (Mr. Chapman) and others during questions. I think that the point is valid and I will see whether some comparisons can be put out relatively quickly.
Mr. Ashley: On a point of order, Mr. Speaker. Would it not be possible for the Foreign Secretary to make a statement tomorrow, because there is a great deal of anxiety among people from Britain who want to visit Europe and do not know which parts of Europe will be safe because of the Russian secrecy? Possibly that statement could be the first of a series by the Foreign Secretary to give as much information as possible to people hoping to travel abroad.
Mr. Speaker: That is not a matter for me. I am sure that the right hon. Gentleman's comments will have been heard by those on the Government Front Bench.

News International Plant, Wapping
4.21 pm
Mr. Ron Leighton: I beg to ask leave to move the Adjournment of the House, under Standing Order No. 10, to discuss a specific and important matter that should have urgent consideration, namely,
"the conduct of the Metropolitan police at Wapping on 3 May."
The matter is specific because it is the responsibility of the Home Secretary and it is important because it deals with the reputation and credibility of the Metropolitan police and the democratic rights of ordinary British citizens.
The House will know that there were a number of eye witnesses to those events, including hon. Members. I was there and what I saw was a police riot. I was absolutely ashamed of what I saw. I never thought that I would see events of that type in this country.
As you know, Mr. Speaker, London printers are not criminals who can and should be bludgeoned in that indiscriminate way. The police response was wholly disproportionate to anything that had happened. After the first minor incident, for hours there were violent police baton charges which were completely unnecessary. I have a preliminary list of the names, addresses and telephone numbers of 44 people who were injured.
There was no warning of the brutal attacks, nor was the crowd allowed to leave. At about 12 o'clock I tried to leave Wellclose square. As I tried to leave I was stopped by riot police with batons and shields. I said that I wanted to leave and they said that they were not allowed to let me. [Interruption.] There are hooligans in the Chamber. I am giving an eye witness account of what happened to me. I hope that the House will want to know what happened and not what the hooligans in the House want to shout about.
Mr. Speaker: Order. The hon. Gentleman should make his submission as to the urgency and importance of this matter.
Mr. Leighton: The urgency is that I tried to leave and they told me that no one was allowed to leave. I explained who I was and asked why I was not allowed to leave. They said that it was on the orders of a superior officer. When I spoke to the superior officer he asked me whether I was alone. He then allowed me to leave. If I had wanted to lead the crowd away, I would not have been allowed to leave. The urgency is that unless some change is made soon people will be killed by the Metropolitan police. The House should discuss that.
Mr. Speaker: The hon. Member for Newham, North-East (Mr. Leighton) asks leave to move the Adjournment of the House for the purpose of discussing a specific and important matter which he believes should have urgent consideration, namely,
"the conduct of the Metropolitan police at Wapping on 3 May."
I have listened carefully to what the hon. Gentleman has said. He knows that the only decision I have to make is whether to give this matter precedence over the orders set down for today or tomorrow. I regret that I do not consider the matter that he has raised appropriate for discussion under Standing Order No. 10 and, therefore, I cannot submit his application to the House.
Mr. Tony Benn: On a point of order, Mr. Speaker.
Mr. Speaker: Not on that decision.
Mr. Benn: I am not questioning your decision. Is it in order for the grave events that occurred two miles from this Chamber on Saturday and Sunday night to be raised in the House on Thursday in the debate on crime prevention? That would provide an early opportunity for those who were present to report on the brutal battering by the police.
Mr. Speaker: If the debate is on the Adjournment, it will be a wide debate and I judge that it will be in order to discuss matters of that kind.
Mr. Nigel Spearing: On a point of order, Mr. Speaker. In view of the statements made by my right hon. and hon. Friends, various statements made in the press and allegations by Conservative Members and as the Home Secretary is in the House and is accountable to the House, would it be in order for us to know whether he will inquire into these matters and make a statement prior to the debate on Thursday?
Mr. Jeremy Corbyn: Further to that point of order, Mr. Speaker. I do not wish to challenge your earlier ruling in any way. However, would it be in order for the Secretary of State for Social Services to be asked to attend the debate on Thursday and make a statement about the directions given to the Health Service on Saturday evening? Policemen were taken to a hospital near to the Wapping printing plant, but printers and other people injured in the demonstration were taken to St. Bartholomew's hospital, which is some distance away, and ambulances were prevented from getting to the scene of the police violence against the pickets on Saturday evening. Those are serious matters.
Mr. Speaker: None of those are matters for me.

Nuclear Accidents (Contingency Arrangements)
4.26 pm
Mr. Frank Cook: I beg to ask leave to move the Adjournment of the House, under Standing Order No. 10, for the purpose of discussing a specific and important matter that should have urgent consideration, namely,
"the non-existence of the Government's contingency plans for the protection of those at risk following nuclear accidents and the lack of information available to the public."
This matter is specific because it relates to widespread confusion, anxiety and justifiable resentment resulting from everyone's inability to obtain information, counsel or guidance on precautions to be adopted in the current situation. That is particularly so on the part of those engaged in farming in a "grass only" discipline who had already turned out their herds to graze this year.
This matter is important because that inability highlights the ill-prepared nature of the Government's readiness. That is typified by the response I received when I tried to ask the Secretary of State to list the locations where people could have free access to emergency plans and procedures for them to prepare against such radioactive fallout. I was told that one cannot ask a question about something that does not exist. When I went further and asked why no plans existed, I was again told one cannot ask about something that does not exist. One is not to know that does not exist until one finds out.
This matter is urgent because the level of incidence of elements such as tellurium—132, and iodine—131 occurring in such quantities, and the nature of those elements being short-lived but doubly dangerous, means that decisive action is required to prevent the inclusion of affected milk supplies in infant formula milk and school quotas. Perhaps we should finally find a use for the food mountains of Europe.
Is it not ironic that we should criticise the Russians, quite properly, for their inability to provide information about British subjects being exposed to radiation, yet the Department of Health and Social Security refuses access, as it did to me last Friday, to information relating to British subjects consuming the same stuff. I urge you, Mr. Speaker, and the House to agree to adjourn the business of the House to enable a debate to take place on those most urgent and other related matters.
Mr. Speaker: The hon. Gentleman asks leave to move the Adjournment of the House for the purpose of discussing a specific and important matter that he believes should have urgent consideration, namely,
"the non-existence of the Government's contingency plans for the protection of those at risk following nuclear accidents and the lack of information available to the public."
I have listened carefully to what the hon. Gentleman said—as, indeed, I listened carefully to the exchanges earlier this afternoon. I regret that I do not consider the matter that the hon. Gentleman has raised to be appropriate for discussion under Standing Order No. 10, and, therefore, I cannot submit his application to the House.

BUSINESS OF THE HOUSE
Ordered,
That, at this day's sitting, proceedings on the Motion in the name of the Prime Minister for the Adjournment of the House shall, if not previously concluded, lapse at Seven o'clock.—[Mr. Peter Lloyd.]

Concessionary Television Licences for State Retirement Pensioners
4.31 pm
Mr. Allen McKay: I beg to move,
That leave be given to bring in a Bill to provide for concessionary television licences for State retirement pensioners and others.
In 1982, I presented a similar Bill, upon which the House divided. The Bill was accepted by 187 votes to nil—a clear expression of the will of Parliament on this issue. I presented similar Bills in 1983 and again in 1984, so this is the fourth time that I have done so.
The statutory authority for a concessionary television licence is contained in the Wireless Telegraphy (Broadcast Licence Charges and Exemption) Regulations 1970. An extension of that scheme was introduced in 1978 by the then Home Secretary, my right hon. Friend the Member for Morley and Leeds, South (Mr. Rees). Following representations in 1983 by my hon. Friend the Member for Bolsover (Mr Skinner) and my right hon. Friend the Member for Stoke-on-Trent, South (Mr. Ashley), a further extension was made to provide for physically and mentally disabled persons living in local authority residential accommodation and residents in categories of sheltered homes in which elderly persons were present and already in receipt of a concession.
Each increase in the cost of a television licence makes the position for those who do not receive the concession compared with those who do so much worse. In addition, as expected, the reduction in central Government support to local authorities, plus rate-capping problems, has meant a reduction in the local authority help that used to be available. That is shown by the fact that, of the 17,161 persons receiving local authority help, 12,555 are in Yorkshire and Humberside, 11,518 of whom are in one authority alone—Rotherham. My own authority' s small but welcome contribution suffered because of Government cuts.
Pensioners are debarred from the present national scheme simply because their accommodation does not come within the rules, although the circumstances in which they live are the same as or little different from those of people who are eligible. While 635,000 persons in the United Kingdom benefit from the 5p residential rare concessionary television licence, 4·8 million exclusively pensioner households—some in the public sector, but most in the private-rented or owner-occupied sector—do not. Clearly, that is inequitable, and it is a matter of concern to many right hon. and hon. Members and to all pensioners and pensioner organisations.
Without doubt, the right approach would be to increase pensions to such a level as to enable pensioners to pay the cost of a television licence without a concession, but it is evident that that happy position will not be reached yet. Therefore, action has to be taken by the Government. My Bill makes that possible.
To include in the concessionary scheme all exclusively pensioner households would cost about £220 million and would at the same time protect the present recipients of the concession. To raise that income by increasing the cost of all other licences would be an unfair burden on the unemployed, the sick and other low-income families. However, it could be raised, either by increasing the basic

39
rate of income tax by only 0·2p, or by increasing VAT by only 0·24 per cent. But why not dispense with television licences altogether, thus avoiding all possible anomalies, at a cost of £952·5 million? That could be raised either by increasing the basic rate of income tax by only 0·8p or by increasing VAT by 1 per cent.
There are other ways of raising the income. About 98 per cent. of general households have a television set, but £80 million is not paid because people do not pay their television licence fees. Why should there not be a flat rate for all television licences for all households, except those who do not wish to take part in the scheme? The checking of the other 2 per cent. who say that they do not have a television, but probably have one anyway, would be simpler.
My Bill, if supported by the House and allowed by the Government to proceed, would give us the opportunity to discuss the issue and the means of funding, while protecting present recipients. The Bill is fair and equitable to all, which is not the present position. The Bill may not be allowed to proceed, but my presenting it is a reminder to a future Labour Government, if they are returned to power, that a past Labour Government promised to phase out television licences for state pensioners and others in the lifetime of a Parliament. I am reminding them of that promise.
Question put and agreed to.
Bill ordered to be brought in by Mr. Allen McKay, Mr. Joseph Ashton, Mr. Geoffrey Lofthouse, Mr. William O'Brien, Mr. Alec Woodall, Mr. David Winnick, Mr. Peter Hardy, Mr. Roy Mason, Mr. Terry Patchett and Mr. Dennis Skinner.

CONCESSIONARY TELEVISION LICENCES FOR STATE RETIREMENT PENSIONERS
Mr. Allen McKay accordingly presented a Bill to provide for concessionary television licences for State retirement pensioners and others: And the same was read the First time; and ordered to be read a Second time upon Friday 6 June and to be printed. [Bill 156.]

Prisons
Motion made, and Question proposed, That this House do now adjourn.—[Mr. Peter Lloyd.]
Mr. Speaker: Before we move on to this important debate on the situation in Her Majesty's prisons, I remind the House that the debate must finish at 7 o'clock. We have had a later start than I hoped, because of an important statement. I hope that hon. Members will bear that in mind.
4.37 pm
The Secretary of State for the Home Department (Mr. Douglas Hurd): The occasion for this debate is the recent outbreak of riot and destruction in our prisons. Before I sit down I shall bring the House briefly up to date with our assessment of those events and their consequences. What was missing from the question and answer sessions last week, and what I want to give the House today—succinctly, I hope—is an account of how the Government see the future of our prisons and the conditions for those who live and work in them. I hope to cover the size of the prison population, the condition of the prison estate, the resources, in men and money, that are at the disposal of the service, and the systems of management, work organisation and training that serve the prisons. I shall try to slice pieces out of my speech, but inevitably it will have to contain a good deal of matter, and I fear that that will limit the extent to which I shall be able to give way.
I refer, first, to the size of the prison population. As everyone in the House this afternoon knows, the trend has been upwards under recent Governments of both parties. When I became Home Secretary last September, the prison service was grappling with the effects of a sudden and most disturbing surge in numbers. From just over 43,000 at the beginning of November 1984, the prison population had risen by over 5,000 in nine months to a record 48,200 at the beginning of August last year. The Government, at short notice, provided over 2,000 additional places and recruited additional staff to help relieve the hard-pressed local prisons. Lindholme was bought, converted and brought into use in 16 weeks — a remarkable achievement, which went almost unnoticed.
I am glad to say that so far, although things could change, there is little evidence that this year we shall have to face a comparable surge in the population. In recent months, in contrast to the rapid increase during the early part of 1985, the total population has been relatively stable. On 25 April it stood at 47,250, 1,000 lower than the peak reached in early August last year, but I emphasise that we cannot afford to relax or be in the least complacent about the underlying situation.
The House will note that last year's surge was handled without massive recourse to police cells. That was because, between 1984 and 1985, we saw the first fruits of the accelerated programme of prison building. Three new establishments, providing 1,000 places, were opened at Wayland, Thorn Cross and Stocken, and 500 newly built places were brought in last year at existing prisons. The aim of that programme is not just to keep pace with the prison population, but to reduce and then eliminate the grotesque overcrowding in some of our prisons that we found when taking office. Sins of omission often go undetected for a time. I believe that it is one of the

41
unremarked scandals of the period 1974 to 1979 that, while the prisons filled, the Government of the day attempted no serious remedy. They sat tight and hoped that no one would notice, and the prison service is paying the penalty for that today.
That is why we had to set in hand the largest prison-building programme this century. It took time, since we inherited a tiny programme and no preparation for a large-scale programme. Nevertheless, we have made a remarkable start. From 1979–80 to January 1986, total expenditure was £322 million. The building programme includes a total of 18 new prisons. These new prisons will produce more than 8,000 places by the early 1990s, together with a further 5,500 produced by 25 major capital schemes in existing establishments, as well as the opening of Lindholme and of a former open borstal establishment for prison purposes. In addition, schemes either in the prison-building programmes or planned will provide about 10,000 existing places with integral sanitation.
These developments do not only mean improved conditions for prisoners. They also mean better working conditions for staff. Integral sanitation, for example, means that staff no longer have to supervise what by modern standards is the fearful practice of slopping out. Improvements in staff facilities—staff social centres, showers and lockers—are also included in the building programme.
I should now like to consider the scope for reducing the growth in the prison population or, indeed, reducing the population absolutely. I realise that there are many Opposition Members who have placed almost all their emphasis on reducing the prison population. Without going into the whole of the argument, that arguments ignores that we have a judiciary that is independent of the Executive. Parliament sets the framework of the law within which judges make their decisions. My job is not to dictate to the judges, but to ensure that places are available for those whom the courts consider it necessary to commit to custody. Indeed, the public are entitled to know that those whom the courts consider must be committed to custody can be safely and securely contained.
Mr. Robert Kilroy-Silk: Will the right hon. Gentleman give way?
Mr. Hurd: I should like to finish my point and then I shall give way, although I do not intend to give way often.
I cannot allow a situation to arise where I say to the courts, "Here is an offender whom you, having heard the evidence, believe to be guilty and whom you propose to send to prison, but you must not send him to prison because the prisons are too full." A Government who took that line would be rightly and severely condemned.
Mr. Kilroy-Silk: The right hon. Gentleman is correct. No Opposition Member has ever made that point. The right hon. Gentleman, in answer to my previous interventions on this subject, has given the impression that the sole argument for reducing the prison population rests in some way on channelling the discretion of the judiciary. That is not the case. Those of us who have made the case for a substantial and permanent reduction in the prison population over the past decade have put forward several viable means of reducing the population. Those proposals have come from the Conservative Benches as well as from
42
the Opposition. The judiciary could at least help to create a climate more conducive to shorter prison sentences, as the Home Secretary's predecessor and his predecessor's predecessor were successful in doing.
Mr. Hurd: I shall deal with some of the hon. Gentleman's suggestions later in my speech. I hope that the hon. Gentleman's first point is now common ground on both sides of the House. However, I constantly read suggestions that we should impose a limit on the number of people whom the courts should send to prison.
Mr. Gerald Kaufman: The Home Secretary has said that it is unthinkable that the courts should be influenced not to imprison people. Why, therefore, did he authorise a circular to the courts on 30 April in which he advised the courts:
"Where persons on bail are due to appear for summary trial in respect of matters for which they are likely to receive a custodial sentence, it may be desirable to adjourn the proceedings. Courts might also give very careful attention to the matter before imposing periods of immediate or suspended imprisonment in default of payment of such matters as maintenance, fines and rates."
The Secretary of State was telling the courts that, regardless of what they think, they should not send people to prison.
Mr. Hurd: If the right hon. Gentleman reads the circular he will see that it does not deal with disposals. it deals with bail and with the timings of hearings. Specifically, it does not attempt to tell the courts that they must not send people to prison because the prisons are too full.
In relation to the point raised by the hon. Member for Knowsley, North (Mr. Kilroy-Silk), the Government should have a view about the role of prisons and about sentencing as part of their policy for law and order. I have made my views plain. They coincide with those of my predecessor and of the Court of Appeal. Those who commit the worst offences—such as offences of serious violence or drugs trafficking—must expect to spend very long periods in custody. The public expect, and deserve, to be protected from such offenders and to see them receive a just measure of punishment.
For those convicted of less serious offences, however, custody should be used sparingly. I inherited, and intend to continue, a policy of emphasising credible and tough alternatives to imprisonment. We cannot direct the courts to use them, but they must have a full range of non-custodial options available to them; options which are not "soft", but which are practical and effective, and seen to be so. For example, we have had striking success in the expansion of probation and community service orders. The Criminal Justice Act 1982 strengthened the courts' powers to attach specific requirements to the probation order and there has been a significant revival in its use. Community service has grown rapidly from over 13,000 orders in 1979 to nearly 34,000 in 1984. Community service has now been extended throughout England and Wales and is available for all offenders aged 16 or over.
We intend to build on that success and my hon. Friend the Under-Secretary of State may develop that point. The recently published White Paper includes a proposal to strengthen supervision orders on juveniles involving intermediate treatment programmes by backing them with custodial sanctions for breach if they were used as an alternative to custody. We plan also to expand the

43
attendance centre network. We are seeking to reverse the decline in the use of the fine, and we are taking steps to improve the administration of the criminal justice system, which will help, I hope, to keep people out of custody on remand. As the hon. Member for Knowsley, North knows, we are trying to cut delay in the courts and to improve the flow of court business. I hope that the introduction of statutory limits on the time that it takes to bring court proceedings will be a big step forward.
By these and other means—I have mentioned some of the points which the hon. Member for Knowsley, North has advocated—the Government are seeking to take the public and the courts with us in ensuring that those who need to go to prison do so, and that a range of effective alternatives are available for those who do not.
I should like to discuss the question of total resources, not just the resources for the building programme. Since coming to office the Government have substantially and consistently increased spending on the prison service. Between the financial years 1979–80 and 1985–86, expenditure on the prison service rose by 25 per cent. in real terms. Within that total, planned expenditure on the building programme and on redevelopment of the prison estate rose by 173 per cent. in real terms, whereas, under Labour, expenditure on the prison estate went down by 20 per cent. Nor has the additional expenditure on buildings been at the expense of expenditure on staff. Between the financial years 1979–80 and 1985–86 the number of prison officers rose by some 18 per cent.—it now stands at a record level of almost 19,000—while the cost of employing them rose by some 43 per cent. in real terms.
These figures compare, as we established at Question Time last week, with an increase over the same period in the prison population of about 12 per cent.—that is, a rise of 18 per cent. for prison officers, and a 12 per cent. rise in prison population. That is a striking improvement in the ratio between staff and prisoners and it shows the emptiness of the charge that we have been starving the prisons of staff.
Looking to the future, the Government have expressed their commitment in the public expenditure White Paper to give priority continuously to the prison service. The financial provision for 1986–87 at £639 million, represents an increase of about £48 million—that is 8 per cent.—over planned expenditure for 1985–86 and the figures continue upwards for succeeding years.
I am sorry to weary the House with figures. I have gone through some of them quickly to illustrate the scale of the investment that we are making in the prison service, as part of the law and order budget, in both buildings and staff. We have turned round the previous neglect of our penal system and have provided a firm base on which the prison service can build for the future. These increased resources carry with them the responsibility to ensure that the resources are used in such a way as to achieve the best value for the taxpayer's money. We are not satisfied—we cannot be—that this is being achieved at present, particularly in the use of prison staff.
In what I have to say about this I want to make it clear that I am not in any way attacking prison officers or governors. Their job of running prisons can often be difficult and sometimes dangerous. It is a job that is often too little understood by the public at large. Nevertheless, those who follow prison matters closely—that is
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everyone in the Chamber—knows that the working practices and arrangements in our prisons are far from satisfactory. The pattern of rapidly rising expenditure on prisons which I have described has not been matched to anything like the degree that it should be by improvement in the regimes for inmates. Among the reasons for this are undoubtedly inefficiencies in working practices within prisons.
Mr. Stephen Ross: rose——
Mr. Hurd: No, I have already given way twice and I need to make progress.
Let us consider for example, overtime. The cost of overtime working by prison officers has risen dramatically in recent years. In 1979–80 the cost of overtime was £34·3 million, and in 1985–86 the cash limit for overtime stood at £81·6 million—an increase of 137 per cent. in cash terms. Overtime has now reached the point where it constitutes on average 30 per cent. of prison officers' earnings, and, because overtime is voluntary, some officers are working in excess of 20 to 30 hours overtime per week. That is not good for them or for management. It is not a situation that we can prolong indefinitely.
Efforts to contain and control levels of overtime working are not new. In April 1976, when overtime was averaging 12 hours a week per prison officer, a system was introduced which allocated a budget of hours to each establishment. That system, introduced by the then Labour Government, failed in the face of opposition from the Prison Officers Association. Last year, to exert better control over overtime spending, responsibility for the overtime budget was devolved to the four regional offices of the prison service. This year we are both continuing those arrangements and extending them to cover all pay and pay-related costs of prison staff. This change does not mean that overtime expenditure is being cut. In fact, the cash limit for overtime in the current year—at £87·4 million—represents an increase of about 5 million on last year's limit. The notion that we have been seeking some sort of confrontation by cutting the total of overtime without consultation cannot survive a look at the figures. We need to reassert proper control over spending in our prisons, particularly on overtime, and this lies at the root of the dispute between the Prison Officers Association and the Prison Department.
The Government have never claimed that overtime is unnecessary in the prison service. Conditioned hours are inadequate to cover all tasks, not least because existing shift systems depend on overtime to provide staff cover, particularly at weekends. It is the present levels of overtime that we have to question. Existing systems of attendance and complementing prevent us from using staff in the best way. The shift systems are too rigid, resulting in too many staff attending at some times and too few at others.
It was for this reason that, following extensive discussion with the national executive committee of the Prison Officers Association, we commissioned last year, and announced, a study by a joint team of prison service personnel and outside management consultants to see whether better systems of complementing and attendance for prison officers could be found. The report of that study has just been received. I have not yet had an opportunity to consider it in detail with colleagues. I shall obviously do this urgently, and when I have worked out proposals

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I intend, given a successful resolution of the present dispute, that they should be the subject of discussion with the Prison Officers Association, as well as with other interested parties. The report justifies the stance of the Government over the inefficiency of existing systems and confirms that an opportunity exists, if new practices can be adopted, for improving dramatically the lot of both inmates and staff. It suggests that there may be a waste of resources, amounting to 15 or 20 per cent. We shall publish the report with our comment on it.
I understand how hard it is to change, and changing working practices is always a difficult process for those involved, particularly when, as in this case, there is such a close relationship between those practices and take-home pay. Like my predecessor, I have made it clear that we are ready to discuss with the Prison Officers Association new systems and procedures, including new pay arrangements, which will continue to provide a fair level of take-home pay, while allowing both prison officers and management to escape from the shackles of dependence on overtime. This is not being done simply out of a desire to get the accounting right, to satisfy the Public Accounts Committee, or to enforce the cash limit. The point goes wider than that.
We are spending, as I have illustrated, record sums on the prisons and employing a record number of staff, but only if that money and those staff are used sensibly will the lot of both prisoners and staff be improved.
Against the background of the record levels of expenditure on the staff and buildings of the prison service which I have described, I think that many hon. Members have found, and perhaps still will find, the current dispute between the Prison Officers Associaton and the Prison Department difficult to understand. The association says that it is concerned about the maintenance of safe manning levels and regimes and seeks the right to determine in negotiation what those manning levels should be. I am as concerned as the POA about the safety of prison officers and their professional standards. I have repeatedly made it clear that management is ready to consult the POA about manning levels. Obviously I cannot concede — no Government could—that the union has a right to determine those levels.
Mr. Robin Corbett: It is not asking for that.
Mr. Hurd: I am coming to that point. In effect that would give the union, not the Government or Parliament, the right to set the budget for the prison service.
In my discussions with them before last Wednesday's events, POA leaders said that they were prepared to accept management's right to manage and that they did not seek to challenge my view that if, at the end of the day, agreement could not be reached on manning levels, management would have to decide them. In the light of those undertakings, and the clear edging towards agreement, it is difficult to understand where lay the POA's continuing problem in accepting my formula for considering these matters. Nevertheless, I welcomed its recognition of management's rights, and in return I set out in my letter of 22 April to the POA's general secretary, Mr. Evans, an agenda for the future. The House will recall that that agenda included a rapid settlement of this year's pay claim, including the outstanding question of a reduction in the working week for prison officers, and the
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immediate payment of tax compensation on housing allowance for 1985–86, which had been a vexed point. Thirdly, it included bringing forward as fast as possible the work on new shift systems and pay arrangements, which I have already mentioned, for detailed discussion with the POA, with a view to the new arrangements being in place by April next year.
Unfortunately, as the House will also recall, the national executive of the POA felt unable to respond by lifting its industrial action; indeed, even as I spoke with it on Monday last, that action continued in a particularly unacceptable and dangerous form at Gloucester. For my part, I was not, nor am I now, prepared to talk in substance about issues of crucial importance to the future of the prison service under the continuing threat of further industrial action. The national executive of the POA then introduced its overtime ban, with tragic consequences on Wednesday night, about which we all know.
We are still assessing the events of last Wednesday and their consequences, but it is clear that the situation deteriorated rapidly after midday last Wednesday and the issue of the POA's instructions to its members to withdraw co-operation with management and to institute an overtime ban. I reported twice to the House last week on the major disturbances that took place at Lewes, Wymott, Bristol, and Northeye prisons and at Erlestoke youth custody centre. There were lesser incidents at some 12 other prison establishments. Further disruption took place in a number of establishments on Thursday and Friday, but on nothing like the scale of Wednesday night. The number and severity of incidents decreased and by the weekend all was quiet.
By a miracle, no one was seriously injured during the disturbances of last week. Of the 50 or so inmates who made bids to escape, 13 are still unlawfully at large. The worst effects were undoubtedly on the prison estate. Prison buildings were damaged in a large number of establishments. Although most of the damage was fairly minor, there was serious damage at Bristol, Erlestoke, Wymott and Gloucester, and at Northeye the prison has temporarily had to be vacated. In all about 800 prison places were put out of action. I cannot yet give the House an assessment of the total cost of putting things right, but it will certainly run into some millions of pounds.
Since Friday prison staff and contractors have been working as quickly as possible, and by the end of this week all buildings, apart from those at Northeye, will be weatherproof. Where necessary, locks have been changed, doors are being replaced—in some places on a temporary basis—and windows repaired, and I hope that at Northeye we shall have some 50 inmates back in the prison within the next two weeks.
As the House knows, I acknowledge these are extremely serious events, and from the outset I have believed that they should be the subject of an inquiry. The form and scope of this must be compatible with any police investigation into alleged offences. I have invited Her Majesty's Chief Inspector of Prisons, Sir James Hennessy, to conduct an inquiry into the recent disturbances and the handling of them in order to see whether any general lessons need to be learnt. Sir James has agreed to do this. I also take the opportunity to repeat the thanks that I expressed last week on behalf of the whole House to the members of the prison governor grades, those prison staff who remained at their posts and the members of the police and fire services who helped to restore the situation.

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Following the decision of the POA last Thursday to suspend its industrial action and my own procedural proposal made in the House on Thursday, which it accepted, I am glad to say that useful talks took place at the Home Office last Friday. It was agreed that the suspension of industrial action meant the restoration of normal working. This allowed for the return to duty of those officers who had been suspended.
It was also agreed in the discussions last Friday that a series of further meetings would take place on the lines I had outlined, designed to achieve the simultaneous calling off of industrial action and the discussion of the agenda which I had set out for the future. The next meeting in that series will take place tomorrow. I am sure that the whole House will hope for good progress on the basis set out in my statement last Thursday.
To conclude, we are inevitably and rightly moving into a new phase in the history of the prison service. The service faces many problems and difficulties, which we have not sought to disguise, but it has two relatively new assets of which we have to make the best possible use. The first is the willingness of the Government to invest substantial resources in the service. The second is the realisation, to which I hope we have all come or will come shortly, that by changing to more sensible ways of running prisons further resources can be released.
The question in our minds is not whether change should happen, but of what form it should take and how the benefit should be distributed between prison staff, prison regimes—that is, the way in which prisoners are treated—and the taxpayer. We want to achieve the necessary changes by discussion and co-operation. That is the purpose of our present discussions with the POA. An early end to the threat of industrial action will put the process on a sound footing.
I hope that out of the damage and disaster of Wednesday night will come a fresh understanding, fresh energy and fresh good will. I am grateful to right hon. and hon. Members in all parts of the House who take a personal interest in our prisons; I wish there were more of them. In view of the situation which I have described, sombre though it is in many ways, and in view of the two new assets which I have also described, there are opportunities here as well as problems. I hope that we can work together to turn those opportunities to good account.
5.4 pm
Mr. Gerald Kaufman: Six nights ago the Home Secretary came to the House to announce that arson and anarchy had broken out in 18 prisons and other penal establishments. In making that announcement he was admitting the breakdown of the Government's prisons policy, the absence of a Government penal policy, the consequences of the Government's obdurate and incompetent industrial relations policy and the failure of the Government's much-trumpeted law and order policy. For all of those the Home Secretary himself stands responsible to the House of Commons.
It cannot be doubted that the prison system is inadequate to cope with the burdens placed upon it. The most recent report, issued six months ago, of Her Majesty's Chief Inspector of Prisons stated:
"Overcrowding remained a major problem"
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and
"The position in local prisons was grim."
It also stated that overcrowding
"seemed, at least in the short term, more likely to get worse than better."
On 11 April of this year, there were 46,687 people held in prison in England and Wales in a system normally capable of accommodating 40,832. That was 2,000 more than at the end of 1985. Because of the overcrowding, over 13,000 prisoners are being held two to a cell and over 4,000 three to a cell, most of them with no access to night sanitation. One fifth of the prison population consists of remand prisoners, some 8,000 persons innocent in law and being held for trial. Nearly 1,500 have been held in that way for six months or more.
Of course, the problems of overcrowded prisons have been with us for many years, under Governments of both parties, but it is clear that the overcrowding is getting worse. Last year, the prison population exceeded that forecast in Home Office projections for 1991. Those projections are being revised upwards all the time.
The present dispute has woken the Government up to the difficulties that loom. They have responded by making absurd mis-statements, of which we heard more this afternoon, about the position which they inherited. Last Thursday, the Prime Minister spoke wildly about what she called
"the Labour Government's neglect of prison buildings".
That same day, against the background of the previous night's debris and disturbances, the Home Secretary flailed about him even more nonsensically, talking about
"the time when no money was being spent either on staff or on prisoners."—[Official Report, 1 May 1986; Vol. 96, c. 1097, 1114.]
I should like to know when that was. We all know that the right hon. Gentleman's grasp of fact is tenuous, but that was extraordinary even by his standards.
When Labour left office, building schemes were in progress to provide 4,100 prison places over a four-year period, with three new prisons to be started. I readily acknowledge that Lord Whitelaw boosted that programme considerably. The problem is that, although, because of him and him alone, the Government launched a major prison building programme, they did not accompany that with implementing a policy for prisons, let alone a penal policy.
Lord Whitelaw outlined the contents of a prisons policy in a debate in the House in 1980 when he said:
"First, we shall increase the capacity and efficiency of the prison service through new building, through improvements in organisation, management and industrial relations"—
yes, improvements in industrial relations—
"and through better use of manpower. Secondly,"—
this is a response to the Home Secretary's implication that this was never meant by his Government—
"we shall take measures designed to reduce the size of the prison population." [Official Report, 1 August 1980; Vol. 989, 1900–1.]
That was what a thoughtful Home Secretary said on these matters. Apart from new building, little if any of what Lord Whitelaw spoke about six years ago has come about. Far from being improved, as he wished, industrial relations are as bad as they could be.
Insofar as the Government now have a policy, it is the policy stated in the 1983 Conservative party manifesto, which said that there must be enough prison places to cope with sentences imposed by the courts.
Mr. Jerry Hayes rose——
Mr. Kaufman: At the present rate, even Lord Whitelaw's building programme will not achieve that. Indeed, as the Financial Times pointed out a couple of weeks ago, the monetary cuts entailed by what the Government call their financial management initiative will, unless the Home Secretary learns sense as a result of last week's events, turn the new prisons into "little more than human warehouses". People are being crammed into Britain's prisons in a random and unplanned way.
Mr.Hayes rose——
Mr. Kaufman: I will not give way at the moment. I must move on a little.
The number of remand prisoners between 1973 and 1983 increased from 4.613 to 8,651, and they now spend an average of 47 days in custody awaiting trial, compared with 23 days in 1970. As Her Majesty's Chief Inspector of Prisons points out, facilities and services for them are "generally the poorest". Her Majesty's chief inspector said that a reduction of prisoners in this category
"would do much to relieve the problems facing the prison service".
but the Government have ignored his recommendation.
Far more of those actually tried and found guilty of offences are being sent to prison. Of males, 15 per cent. were sentenced to immediate imprisonment in 1974. By 1984, this proportion had risen to 20 per cent. In 1983, Britain proportionately imprisoned nearly twice as many as West Germany and Italy, and more than twice as many as Holland and France. Fewer than one in five of those in prison here had committed the really serious crimes involving violence, sex and robbery. In fact, in this country we imprison more people for defaulting on fines then we do for these grave offences.
What is more, as a deterrent, prison is a proven failure. The latest figures show that 58 per cent. of male offenders and 39 per cent. of female offenders were reconvicted within two years of release. For young prisoners aged 17 to 20, the figure was 69 per cent. For detention centre trainees aged 14 to 16, it was 72 per cent. for borstal trainees aged 15 to 16, it was a terrifying 80 per cent. Over 50 per cent. of all prisoners and over 70 per cent. of all young offenders have been imprisoned before. Far from deterring offenders from further crimes, custody is often preparing them to commit further crimes. To put it another way. prison is not working.
The May committee set up by my right hon. Friend the Member for Morley and Leeds, South (Mr. Rees), which reported to the present Government, said categorically:
every effort should be made to reduce the inmate populations"
It suggested a re-examination of sentencing policy. Her Majesty's Chief Inspector of Prisons, in his latest report calls for
"action to reduce, first, the time people spend in custody awaiting trial and, second, the average length of sentence for non-violent offenders"
The report goes on to say:
"it seems likely that these measures would make little difference to the deterrent value of sentences generally".
It is fair to say that the more sensible members of this Government, in their more sensible moments, have echoed his view. Lord Whitelaw, drawing on the experience of the previous prison dispute when he was Home Secretary, said:
"One of the things the dispute demonstrated was that it is possible for us to survive with a much lower custodial population than before."
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The present Home Secretary, before the rush of blood to his head last month, said much the same kind of thing. The problem is that they have to contend with their more atavistic colleagues, such as the Chancellor of the Duchy of Lancaster, who last month chose the church pulpit as his platform to say:
"I believe that sentencing has gone too far in the direction of leniency to deter crime."
The result is that there is no lead from the Government. Courts go on cramming the prisons with inmates and those who have to carry the burden of those overcrowded prisons are the prison officers.
The Home Secretary—he did it again this afternoon—offering the only set of statistics that he knows, with the Prime Minister echoing him, implied that it is all all right because, under their Government, the number of inmates has increased by 12 per cent. while the number of officers has increased by 18 per cent. But that glib juxtaposition ignores the fact that the prison officers carry a much greater burden because so many more thousands of the inmates are on remand, and remand prisoners require extra time and attention.
Her Majesty's Chief Inspector of Prisons explains it very well in his latest report, when he says:
"All these problems were exacerbated by the drain on resources caused by court escort commitments"
Her Majesty's chief inspector goes on to state bleakly:
"Failure to take action will make it increasingly difficult to resist demands for more and ever costlier prison places with the inevitable concomitant of more staff".
It is the cost of the staff, however, that is the real problem, for the Prime Minister slipped up when trying out another statistic last Thursday. At Question Time she claimed that this Government
"have increased spending on the prison service by 85 per cent. in real terms".—[Official Report.1 May 1986; Vol. 96, c. 1097.]
But she got it completely wrong. The fact is that this increase is not in real terms, it is in cash terms. The increase in real terms, as the Home Secretary admitted this afternoon, is much less than half what the Prime Minister claimed it to be. And, of course, the true figure is at the heart of the crisis that led to last Wednesday's disturbances.
The Prime Minister and the Home Secretary can bandy about all the rigged statistics they like, but they still cannot explain why the prison officers voted by 81 per cent. last month to take industrial action, a massive majority in a group of public servants whom, in any other circumstances, the Prime Minister would be the first to applaud to the skies.
Mr. Stephen Ross: Will the right hon. Gentleman agree that the prison officers that he knows, and certainly those in my constituency, are absolutely incensed by the articles in The Sun last Friday, which painted a totally wrong picture of prison officers and their wives?
Mr. Kaufman: Unfortunately, I do not read The Sun so I cannot share the ugly experience which the hon. Gentleman's correspondents have undergone. What I can say is that I have received in the post since this controversy began a considerable number of letters from prison officers which show the facts, some of which I shall try to give to the House. about the problems that they face in doing their work.
Of course, the prison officers know very well that the new type of budgetary regime for their service means that

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the Government seek to claim every possible credit for the prison building programme while, at the same time, cutting the prison officers' overall earnings in order to help pay for that programme. That is why the Prime Minister and the Home Secretary have launched their discreditable smear campaign against the prison officers, accusing them of swindling the taxpayers through corrupt practices, in order artificially to boost their overtime.
Mr. Hurd: Neither in what I have said today nor in what I have said previously on the matter have I used the word "corrupt" or the word "swindle". I do not believe that either word is in the least relevant to the point that I am making, which is that the prison service is handicapped and hamstrung by a whole lot of practices which prevent us from making proper use of the staff employed.
Mr. Kaufman: I will come to that, but it is a fact that the right hon. Gentleman and the Prime Minister have taken every possible opportunity to talk about the high earnings of prison officers and that the press have been carefully and consistently briefed about the Spanish practices which, it is alleged, are rife among prison officers. If the Home Secretary is saying that he no longer believes that, if he repudiates those unpleasant stories about prison officers, that will help a great deal to clear the air.
But I shall say this much. It may be that a minority of prison officers do exploit the opportunities for overtime, but the fact is that the prison system would break down instantly if sufficient prison officers did not work overtime. That was incontrovertibly proved last Wednesday.
Mr. Corbett: My right hon. Friend talked about Spanish customs. Has he heard allegations that a governor of one prison is involved in the running of his wife's antique business and that a governor of another prison was absent from the prison during a visit by Her Majesty's chief inspector because he was putting a roof on somebody's house for payment?
Mr. Kaufman: I had not heard of that either and I would be unwilling to think anything but the best of prison governors, but if my hon. Friend provides evidence, we shall have to accept it.
The reliance of the prisons on overtime working by prison staffs would have been demonstrated with incalculable consequences for public order if the prison officers had continued their overtime ban over the May bank holiday weekend. That is not because the officers have distorted the system to squeeze overtime out of it, although it is true that on a maximum basic rate of £135·34 a week after 15 years' service a prison officer taking home only basic pay could have difficulty in making ends meet.
The predicament was stated less hysterically and more accurately than by the Prime Minister and the Home Secretary in the annual report of Her Majesty's Chief Inspector of Prisons. He said:
"All the establishments we inspected in 1984 were short of their authorised complement of staff. This in part explains the high levels of overtime that were still being worked…and since overtime is now voluntary, governors are, to this extent at least, dependent on the goodwill of their staff for the functioning of the establishment."
It was the Home Secretary's orders to governors which led to the trampling on that good will and which in its turn
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nurtured the ill-feeling that led to last week's disturbances. The Home Secretary and the Prime Minister have, in connection with this dispute, been mouthing the slogan that management must have the right to manage. But Her Majesty's chief inspector's chapter on prison staff, which I recommend hon. Members to read, makes it clear that it is management that has been misusing the power to manage. That there is too much overtime among prison officers is indisputable, but the Home Secretary's steps to deal with the problem have made the situation worse.
The signatories of the May report said flatly:
"We consider that it is in the long run undesirable for efficient working to be dependent on the excessive amounts of overtime."
But its solution was certainly not the Government's solution—to stretch the prison officers on the bed of Procrustes and hack away. The report said:
"Ultimate manpower levels should be such that overtime is substantially reduced and, ideally, removed altogether."
It warned:
"We fully recognise the sensitivity of staff to some of the possible effects (for example on their earnings) of changes in these areas. Management should therefore display real tact and understanding as well as determination in dealing with them."
That was the May report, whose recommendations the Prime Minister claimed the Government had fulfilled in full.
The management certainly showed determination, but their version of tact and understanding would have brought discredit on a flat-footed elephant. The Government failed to recognise the sensitivity to which the May report referred. They showed little or no understanding of the strain on prison officers of their difficult and dangerous job.
That strain was described best in a letter to the Home Secretary, a copy of which was sent to me on the other day. It was written by Mrs. P. A. Kelly of Market Harborough, the widow of a prison officer. She said:
"Dear Mr. Hurd, Ref: Prison officers. Two weeks ago my husband died, he was 51 years old. A heart attack and various other medical terms all leading from the heart attack was the cause. He was a conscientious prison officer for 30 years. Only three more years and we could look forward to doing all the things couples plan to do when they retire—but not any more. I blame the long hours and the tension—a life of 80 per cent. prison, and 20 per cent. home life. When I hear on the media the rates of pay, the rates of overtime, I think of the husband I loved and have lost—I think of other officers who have died—what price your pay and your overtime. For once in my Tory life I agree with the Labour M.P. Gerald Kaufman"——
[Interruption.]——
"who said, 'Avoid turning our jails into tinderboxes'. Think of the men who run our prisons every day—they are the ones that know—for Gods sake—PLEASE LISTEN."
That is a letter from the widow of a prison officer. It was men among whom there existed that kind of experience—[Interruption.] I am interested in the way that Conservative Members deride and jeer at that—and background who, three weeks ago, came to the end of their tether and voted 81 per cent. for industrial action, not over pay but over those very manning levels about which Her Majesty's chief inspector and the May committee had warned. In voting under their own rules as well as the Government's legislation, they were, if they will forgive me for saying so, behaving like perfect Thatcherites, because it was the Prime Minister who two years ago on 12 April—about another dispute, of course—said:
"it is important to have a ballot as quickly as possible, especially when that facility is in the union's constitution."—[Official Report, 12 April 1984: Vol. 58, c. 523.]

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The prison officers held their ballot and it was in their constitution. They did what the Prime Minister said they should do. Seventy-eight per cent. of their total voted, and they voted 81 per cent. for action. The only problem with the Government is that they were in favour of a ballot but against the members acting on what they had voted for. Yet instead of seeking to reach a sensible solution, the Home Secretary issued an ultimatum to the prison officers. He called on them to abandon their industrial action and insisted that, unless they did so, there would be no more talks. This self-proclaimed arbiter of the rule of law ignored—although he claims that he knew about it—a crucial obstacle. The Prison Officers Association was and is required by a High Court ruling to ballot its members before it can abandon this industrial action. It needs a package to put before its members in such a ballot. What the Home Secretary demanded was not a settlement but a surrender.
The Home Secretary sent a letter to all staff and governors saying that no further talks could take place
"against a background of industrial action."
Lord Glenarthur, the junior Minister in charge of prisons, voiced that intransigence with damning precision when he proclaimed:
"All the Home Secretary asked was that the Prison Officers Association call off industrial action so that these discussions could go ahead. They have refused to do this, offering only to instruct their members to take no further action while talks are going on …we cannot talk under threat."
The Home Secretary, exactly a week ago from the Dispatch Box, said:
"The Government cannot conduct talks under the continuing threat of further industrial action in this vital public service…I am sure that discussions can only fruitfully take place if the POA calls off industrial action."—[Official Report, 29 April 1986; Vol. 96, c. 797–9.]
Two days before that, I had called on the Home Secretary to take action to end the dispute. I had warned that the prisons were
"a potential tinderbox, waiting for the spark that could set them alight."
A week ago, with the situation more critical than ever, I used similar words, this time in the House. I said:
"I warn the Home Secretary that with his intransigent bungling in this exceptionally delicate area he is recklessly playing with fire."
The Home Secretary's only response was a weary sigh of aloof disdain, yet the very next day the fires broke out.
When the fires broke out, they were soon almost out of control. One prison was almost completely destroyed. Prisoners escaped, and the Home Secretary announced this afternoon that some of them are still at large. The Home Office could not cope, yet last week, when I asked the Home Secretary about the contingency plans prepared for this eventuality many months ago by the Association of Chief Police Officers, he said sniffily:
"Of course there are contingency plans."—[Official Report,29 April 1986; Vol. 96, c. 798–9.]
Three weeks ago, when the Prison Officers Association ballot result was announced, the right hon. Gentleman said—reassuringly, so it seemed, but complacently in the light of later events—
"The Government are prepared and will respond vigorously as necessary. In doing so, we shall have the safety of the public and the security of prisons as our first concerns."—[Official Report,17 April 1986; Vol. 95, c. 1009.]
Yet he was not prepared. The prisons burned. Some prisoners rioted; others escaped. Public safety was not secure.
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In the light of his firm promises and failure to honour them, the Home Secretary should carefully consider whether he should remain in office.
The question of the Home Secretary's fitness to continue arises most sharply in his handling of the dispute. The evidence lies in the right hon. Gentleman's statements. Last Thursday, the afternoon after the night before, the Home Secretary said:
"Although some of the violent action by prisoners may have been imitative, there is little doubt that the occasion for it was the overtime ban instituted by the national executive committee of the Prison Officers Association as part of its dispute about manning levels with the Prison Department."
The Home Secretary was sure that the overtime ban was to blame for the riots—but who was to blame for the overtime ban?
Throughout the dispute, the Prison Officers Association declared that it was ready to suspend industrial action in exchange for talks. Throughout, the Home Secretary rejected that offer and demanded the complete abandonment of industrial action before he would talk, even though he now admits that he knew that abandonment was not possible for the POA, since he acknowledges that the POA must ballot to abandon its industrial action and that such a ballot takes 12 days. The POA asked for an end to selective dismissal of its members as a sign of good will on the part of the Home Office. The Home Office flatly refused, and as recently as last Thursday, after the riots, all that the Home Secretary could bleakly say was that the suspended staff
"can lift their own suspension by agreeing to work normally."
That empty offer meant that the staff had to sign a declaration promising to work normally.
Mr. Hurd indicated dissent.
Mr. Kaufman: That is what the Prison Officers Association tells me. If the right hon. Gentleman contradicts it, all that I can say is that, up to a couple of hours ago, it was certainly the belief of the POA.
The POA promised to instruct its members to take no further action while talks were continuing and it asked for an end to suspension of its members. The Home Secretary said no to both. As recently as last Thursday, he was insisting
"We cannot start substantive negotiations until the threat of industrial action has been removed."—[Official Report, 1 May 1986; Vol. 96, c. 1110–1.]
Since then, the POA, as it had always offered to do, suspended industrial action, but it did not, as it could not—even though the Home Secretary had demanded it—remove the threat of industrial action without the prolonged process of a ballot. It could have complied with the Home Secretary's demands only by breaking its rules and defying the High Court. I cannot believe that that is what the Home Secretary wanted, but that was his demand.
Last Friday, the Home Secretary reinstated the 100 prison officers who had been suspended—an action for which the POA had asked and which he had previously refused. He agreed to table fresh proposals on manning levels—an action which he had previously refused to contemplate while industrial action was still in prospect. Tomorrow, he—either he personally or his officials—will get round his ultimatum by holding talks which the Home Office declined to call negotiations.

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That they will be negotiations is made clear by a statement from Mr. Colin Steel, the chairman of the POA. After Friday's talks, he said:
"We have got to go back to the members. One would hope that by the time we get to that position, it will be a formality. We hope we will have a package that will be suitable."
Mr. Hurd: I remind the right hon. Gentleman that the procedural talks now continuing are taking place exactly on the basis of the suggestion I made in the House on Thursday afternoon. I dealt with suspension and with how discussions would be resumed. I am glad that, despite the right hon. Gentleman's efforts at obfuscation, those procedural suggestions were accepted and what has happened since then to improve the position has happened on that basis.
Mr. Kaufman: Last Thursday afternoon, the Home Secretary said—he can check his words—that the suspended prison officers could unsuspend themselves. What has happened is that he has formally removed suspension from them, which is very different. The Home Secretary said repeatedly in the House and elsewhere that he would not enter into talks with the Prison Officers Association on substantive matters until it abandoned—not suspended—it industrial action. It has not abandoned that industrial action. It cannot do so without a ballot. It has done what it always said it would do—suspended its industrial action. Nevertheless, substantive talks are taking place and will take place tomorrow, despite the Home Secretary's statement that talks could not take place without the action being abandoned.
The fact that the action has not been abandoned is confirmed by what Mr. Steel said:
"We have got to go back to the members. One would hope that by the time we get to that position, it will be a formality. We hope we will have a package that will be suitable."
Such a package is impossible to achieve without genuine negotiations, whatever the Home Secretary chooses to call them to save his face. As the Daily Telegraph generously put it, discussing the suspensions and negotiations:
"There appears to have been a compromise on both these points."
The Home Secretary has rightly climbed down. But why did there have to be riots before he could see sense? If he had only behaved in this way last Tuesday instead of last Friday, there would have been no overtime ban and, on the Secretary of State's analysis, there would have been no riots. The riots were the consequences of the Home Secretary's intransigent bungling. He has drawn back from the edge of the abyss, but that we ever reached the edge of the abyss is his doing. I very much hope that tomorrow's talks will result in a sensible end to the dispute, but after those talks the Home Secretary would do well to consider not only what he has done but what he should do.
The reason for the overcrowding of our prisons and for the grim scenes that we witnessed last week can be found in the record crime wave from which the country is suffering under this Government. The pressure of the crime wave on overstretched police forces has meant that the crime clear-up rate has fallen to only 35 per cent. Even so, the increase in crime and criminals means extra pressure on the prison service, especially since there have
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been disturbing increases in the worst crimes, involving violence, sex and robbery. The prisons are buckling under the weight of the crime wave.
In a stern leading article, the Financial Times was clear about where the responsibility lies. It stated:
"There could be few more pointed indictments of a Tory administration that came to office seven years ago determined to do something about law and order. Not only has crime continued to rise; the prisons are overflowing and now even the prison officers are rebelling against their terms of service."
Those ugly and financially expensive prison riots will have served one constructive purpose, if, from now on, we are spared the Government's sloganising on law and order.
No Government have ever come to office with more lavish and extavagant promises about upholding law and order; no Government have ever presided over such a disturbing decline in law and order. From dangerous streets to dangerous prisons, that is the grim legacy that this failed Government will leave to their successors.
5.40 pm
Sir Edward Gardner: No Government have ever come into office and not only promised. but fulfilled. a prison-building programme that is without comparison this century. No Government have ever come into office with a Home Secretary who has shown, as my right hon. Friend has shown, such sensitivity and understanding and an ability to deal with the appalling problems now being presented in our prisons.
There are two hard nuts which my right hon. Friend must crack. The difficulties that he faces are formidable, and no one could envy him his task. The first difficulty is the current dispute between management and the Prison Officers Association. I can at least agree with the right hon. Member for Manchester, Gorton (Mr. Kaufman) in hoping that tomorrow will see the conclusion of the dispute.
The central issue has been the question of who has the right to manage—[HON. MEMBERS: "No."] I shall express it in more neutral terms if Opposition Members would find that more acceptable. One of the main issues has been the question of who should have the right to manage. The other issue that attends upon that is whether we can afford the inefficiencies currently to be found in the prison service.
My right hon. Friend referred to a management consultant's report. I have not seen the report, and I doubt whether other hon. Members have seen it. However, over the weekend it was reported that £60 million a year, out of a total and record budget of £639 million, is being wasted through inefficiency. Clearly we cannot afford to allow such a loss to continue. We hope to find a way of dealing with each of the sources of loss, whether it be bad management, restrictive practices or overlapping shifts. Whatever the cause, we must deal with it.
I hope that some good will come out of what happened last week. I hope that the discussions between the Government and the POA will range wider than these narrow but important issues. I, like many other hon. Members, have spoken to prison officers over the years, and they have consistently told us of their dissatisfaction with the unappreciative attitude of the public and the Government of the day towards their duties. There is no doubt that prison officers do a most unattractive and difficult job, looking after some of the most dangerous criminals in conditions that are a positive invitation to violence.

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I do not want to make a party political point in putting forward a suggestion which I hope will be considered by both the Government and the POA. It is my personal view that it would be of benefit to the POA, the Government, the prison service and the country as a whole if, during the forthcoming talks, consideration was given to the possibility of a no-strike agreement. Such an agreement would, I believe, enhance and increase the status of prison officers. It could be arranged on terms beneficial to them.
I realise that time is short and will deal briefly with the second problem that my right hon. Friend faces, which is overcrowding in our prisons. Unhappily, there is no prospect of that problem being solved merely by the solving of the current dispute. Overcrowding in our prisons is gross and creates intolerable conditions. The sad fact is that, because of what happened last Wednesday night, more than 800 invaluable prison places have been destroyed. We must therefore consider what remedies are available to deal with overcrowding.
The first and obvious remedy is one which the Government have pursued with great vigour, and backed with a great deal of capital—the building of new prisons and the modernisation of old prisons. However, that is not sufficient to deal with the problem. There is no doubt that thousands of people in prison today should not be there. I want to discuss one specific group only, which is prisoners on remand awaiting trial, and of whom there are about 7,000 at present. If we could remove them from our prisons, that would go a long way towards solving the overcrowding. However, I accept that that might be too ambitious. Perhaps we could aim to halve their number.
The Select Committee on Home Affairs has recommended a way to achieve such a reduction, and I congratulate my right hon. Friend on adopting it. It is that an immediate experiment be carried out in our courts along the lines of the system in Scottish law, where people awaiting trial are detained in prison for a statutory period only. In Scotland the period is 110 days, but it may have to be either longer or shorter in England and Wales for administrative reasons. The sooner we can reach a conclusion on adopting that proposal, the better.
When we consider the problem of our prisons and the overcrowding, the questions which must be uppermost in our minds are what is the purpose of our prisons? What is the value of our prisons? Why do we put people in them? We used to answer confidently that we punish by imprisonment and deter others from committing the same type of crime. We could say that we reformed people in prison. We cannot say that any longer. What possible hope have we of reforming prisoners considering the present conditions in which they are kept? It is unrealistic.
The real purpose and value of our prisons is to protect the public from criminals who have committed crimes involving violence and who are therefore a danger to society. That is the paramount aim of imprisonment. The Select Committee on Home Affairs is about to start a major inquiry into our prisons. We shall take into account the valuable papers which have been produced by the all party penal affairs committee. We intend to go to America to study, though not necessarily to follow, the way in which the penal system operates there. I hope that when the committee has finished its report—I hope by Christmas—we shall be able to present to my right hon. Friend the Home Secretary recommendations which may be valuable to him and of value to the prison service.
5.51 pm
Mr. Merlyn Rees: I commend the hon. and learned Member for Fylde (Sir E. Gardner) on his approach. In my latter months as Home Secretary, in the run-up to the general election, we should have had such sensible discussions, but in those days it was all about law and order and locking people up.
As my right hon. Friend the Member for Manchester, Gorton (Mr. Kaufman) said, this debate arises out of what happened last week. Nobody could have been amused or got any political pleasure out of what was seen on television last week. The increasing crime rate is no respecter of general elections, of political rhetoric, of over-simplification, such as short, sharp shocks—I wonder what happened to that—or of oversimplification in the press. The press, at its very best, is good, but most of it is not the slightest bit interested in discussions on the matter. It prefers simplification.
I especially regret yesterday'sSunday Express leader, which castigated prison officers as third rate. I wish whoever wrote that had been in a prison. I wish that person had visited the wives of prison officers in Northern Ireland, prison officers who risk their lives. Last night, we saw on television that those who work in the prisons in Northern Ireland are being affected in their homes — presumably by those who are normally in favour of law and order. Over-simplification gets us nowhere.
The problems of the prisons go back a long time, and they are no respectors of general election dates. The problems will exist after the next general election. The argument is about what will be done.
One of the problems is the size of the prison population. I commend community service, which was started in the days of the Heath Government and has been expanded. I commend intermediate treatment and the changes in parole, although marginal, made by the previous Home Secretary. I commend the work done by voluntary workers. The work carried out by the hon. Member for Cheltenham (Mr. Irving) in this respect is commendable. I shall not touch on the question of remand, which is a major issue. The only way to proceed is radically to cut the size of the prison population.
In Northern Ireland, because there was no public disagreement, we were able to introduce 50 per cent. remission. There is no parole in Northern Ireland. We decided to end detention because we had no prison accommodation. The Army built the H blocks and we had to get people into them and other prison accommodation.
There had to be a radical cut in the size of the prison population. That was easier to implement in Northern Ireland than elsewhere. The judges in Northern Ireland know what is going on. There is no establishment—with a small "e" — to say, "Oh, no, this will upset people." Therefore, the Labour Government introduced the 50 per cent. remission system. Prisoners had to have a record of good behaviour, or else they were not brought into the scheme. Those who offended again went before a judge, and, if the judge so willed, they had to serve the unexpired part of their sentence.
Why did I not do that here? The rest of the United Kingdom is a different place. My hon. Friend the Member for Knowsley, North (Mr. Kilroy-Silk) put it to me firmly that it would look daft. Others also put it firmly that, in the run-up to the general election, we would he crucified on law and order. The Conservatives had said that law and

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order would be the policy of a Conservative Government. It was made clear to me that the judiciary would not support what I was doing. If I had introduced the scheme, the tariff would have gone up to match the 50 per cent.
Something of that nature must be done. I recomend to hon. Members the findings of the May report. I am sure that the Home Secretary and the Minister have read it. I set up the committee in December 1978 and it reported to Lord Whitelaw. I do not have the time to run through the recommendations, but they deal with the imprisonment of the mentally disordered, suggest that prison should be avoided for fine and maintenance defaulters and drinkers, and deal with persistent petty offenders. My wife is chairman of a bench and we discuss what should happen to persistent petty offenders. It is no good saying that they should be left alone. In most cases, after the first time they have been put inside, prison is a waste of time. They are filling prison space and it costs money. Because of time, I will not consider the May report further, but it tends to be ignored as time goes on.
The problems in the prisons have already been mentioned. I have a book entitled "The Prison Crisis" by Peter Evans of The Times with a foreword by Sir Robert Mark. That book, which was written in 1980, was sparked off by the May committee report.
The problems in the prisons are not new, but they are worse. As Home Secretary, I was careful not to stand up in the House of Commons and say that the situation could not explode in my face. It may well have done.
The Parliamentary Under-Secretary of State for the Home Department (Mr. David Mellor): The right hon. Gentleman is discussing the problems in the prisons. Why was the annual capital building programme for prisons 20 per cent. less in real terms when he left office than when he took office?
Mr. Rees: The hon. Gentleman should have listened to my right hon. Friend the Member for Gorton. It was not cut in my time. I went to the Treasury and told the Chief Secretary to the Treasury and the civil servants that they could run the prison service themselves. It would be a good idea if the Treasury tried to run the prisons. The junior Minister is wrong, and my right hon. Friend the Member for Gorton showed him to be wrong. He should not be so clever——
Mr.Mellor rose——
Mr. Rees: No; I shall not give way again.
When the May committee reported, I commended Lord Whitelaw for approving a 20 per cent. pay increase for prison officers in 1979 and a further 20 per cent. later. I commend the new prisons, as long as they are intended to replace old ones and are not used to deal with those who commit the list of offences that I have just mentioned.
What has happened to May's recommendations concerning the role of prison officers? The report said that the desire expressed by prison officers to extend their role and to undertake a wider range of duties should be encouraged. I am a member of the Butler Trust, which was set up in memory of "Rab" Butler. Only a few months ago, the work done by people in the prison service was recognised.
The role of prison officers has changed, but if we treat prison officers as turnkeys they will act like turnkeys. One
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of the problems of prison officers is to increase and professionalise their role. As for recruitment and training, is it still true that training is neither as effective nor as comprehensive as it should be and that, at all levels, it is not given sufficient priority?
There were complicated recommendations concerning pay and allowances, which only those involved in the Prison Department or the prison service understand. What has happened to them? The dependence on overtime has increased.
The May report says that prison officers should have access to the central arbitration tribunal. Has that been done? Is it a possibility now? What has happened?
I was glad to hear the hon. and learned Member for Fylde say that the Select Committee on Home Affairs is to examine prisons and their organisation. I am all in favour of examining prison reform, but not enough thought has been given, outside the Prison Department, which is a very good Department, to running prisons. That was the purpose of the May report. We drew up the committee's terms of reference with that in mind. I hope that its report will again be discussed publicly.
I wish the Home Secretary and the Prison Officers Association well in their meeting next Wednesday. That ought to be the beginning. There will be prison crises as long as prison officers, prison governors, the Prison Department and whoever is Home Secretary have to pretend that we can keep the cork in the bottle. They will not be able to do that. Perhaps we shall have a sensible discussion of the matter in the next general election campaign. But that may be too much to hope for.
6.3 pm
Mr. Charles Irving: It amazes me that there is any surprise that the events of the past week or so have happened. Those of us who have been closely associated with the prison service, the after-care service and other off-shoots have been aware for years that this was brewing. There is nothing new about it—we had prison disruptions in 1974 and 1979.
I am sure that my right hon. friend the Home Secretary has realised that there can be no delay, and that action must be taken to correct critical problems. The cost of the damage done in the disruptions would have contributed substantially to enabling prison officers to carry out their work.
The events of the past week have shown how dangerously close our prison system is to collapse. The dispute takes place against a background of a record number of people—48,000—in prison, gross overcrowding of cells and restrictions on work education and association. In that respect, our prisons are an international as well as a national scandal. No other civilised country has such an appalling record.
The Government have chosen to try to end overcrowding by a large prison building programme involving 16 new prisons at a cost of £350 million. So far, however, new prison places have provided no real relief for overcrowded local prisons and the disgraceful circumstances in remand centres. As fast as new prisons have opened, the courts have filled them with more prisoners.
I remember making a speech on this very subject in 1979, when I urged the then Home Secretary to ensure that one old prison shut as one new prisons opened. Precisely what many of us feared has come about. Even before the

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dispute, the Home Secretary acknowledged that last year's especially sharp rise in the prison population had jeopardised the Government's hopes of eliminating overcrowding when the current building programme was complete. During the difficulties of the past week, more than 800 places have been lost, as my hon. and learned Friend the Member for Fylde (Sir E. Gardner) said.
Everybody agrees that serious and violent offenders must be imprisoned to protect the public, but we should bear in mind the fact that eight out of 10 of those who we imprison are non-violent offenders. Although some might have committed serious non-violent offences, many have committed relatively minor offences and could perfectly well be dealt with by the many non-custodial measures which are becoming available and which could be substantially increased if the funding was made available.
With an overall reconviction rate of about 60 per cent.—it is even higher for young offenders—our over-use of prisons makes no sense from a penological point of view. All of this is at a cost of more than £256 a week to keep an offender in prison. It makes sense neither from a humanitarian point of view nor from an economic one.
It is ironic that the Home Office is castigating prison officers for wasting relatively limited amounts on unnecessary overtime and ignoring the much larger amounts of taxpayers' money that is being spent on providing new prisons to accommodate ever more prisoners who have been given unnecessary custodial sentences. Last week the parliamentary all-party penal affairs group published a report entitled "The Rising Prison Population", which contains a ten-point programme of proposals to reduce the use of prison. We are sick to death of producing reports, we are tired of hearing learned papers being discussed, while nothing is done. This is how strongly we are beginning to feel. Many of the proposals in the report, which I am sure the Home Secretary will find an opportunity to read, would go a long way to reduce the likelihood that last week's harrowing events will ever be repeated.
This unhappy dispute centres partly on the right to set manning levels within individual prisons. Nobody disputes the right of management to manage, but when the exercise of that right brings anarchy, destruction and danger to life and property, the nature of the management's decision must and should be questioned.
Let us think generally of the situation with regard to pay. Prison officers' pay—let us face it and be honest about it—is far too low for the difficult, isolated and dangerous work that they do. They are not, as we used to term them, warders; they are professional prison officers. The earnings of prison officers are made up to a reasonable level only by overtime—excessive, in my view—that they would prefer not to do if they received a decent rate of pay.
To refresh our memories, officers start at £5,300—hardly a king's ransom—and rise after 15 years to £7,000 or just over. However, for decades Home Office and prison authorities fostered this excessive overtime as a means of keeping the prison system running and keeping staff numbers under control. Given the gross overcrowding of our current prison system and the grave warnings of impending disaster made clear by prison inspectors, governors and independent bodies, it seems a most inopportune time to go into a sudden reversal on the issue of overtime.
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It would be a gross injustice to prison officers and prisoners alike if the effects of this management decision were drastically to reduce prison officers' earnings. Indeed, it would cause a great deal more trouble. As any competent manager knows, every change or reorganisation requires a substantial investment. The prison system is no different.
To bring our prison system back from the brink of anarchy and to establish it as a reasonably humane system, we need action, and swift action, on the following fronts: a substantial increase in prison officers' basic pay, elimination of restrictive practices, less concentration on the purely security role of prison officers—they are no longer simply turnkeys—safe manning levels and a large reduction in the population of non-violent offenders.
I am grateful to have had this chance to make a short contribution to this important debate. I know that many other hon. Members wish to speak. It is unfortunate to have this short debate on a matter of such importance. I hope that the House and the public at large will give overwhelming support to some of the points that have been raised on both sides of the House.
6.14 pm
Mr. Robert Maclennan: I agree with almost every word uttered by the hon. Member for Cheltenham (Mr. Irving). I hope that the Home Secretary was listening and that the Under-Secretary of State for the Home Department in replying to the debate will answer the points that were made, because in the opening speech there was singularly little recognition of the long-term problem that confronts the prisons in this country today. We heard of the occasion of the dispute, and very little of the causes of the dispute.
The Home Secretary has sometimes paid lip service to the pressures under which the prison service is operating. In a speech to the prison governors on 5 November last he said:
"You have kept the system going while it was being stretched to the outer limits of its capacity in physical and human terms".
The right hon. Gentleman shows little recognition today—or, indeed showed in his utterances last week when he sought to explain his position—of the strain in human terms faced by prison officers.
Having said that, I want to look mostly at the longer-term issues, which I believe the Government have not addressed. Indeed, the Home Secretary again today ducked the whole question of the frequency and duration of custodial sentences. In dealing with this issue, he said that he felt it was not appropriate—I paraphrase for brevity—to interfere with the role of the judiciary and sought, I believe, to misrepresent the position of those who feel that we in this country are badly out of line on sentencing policy and, as a result, have far too many people in prison for too long.
Let us look at the results. The right hon. Gentleman spoke of the neglect of the prison buildings in the previous decade. The fact is that the prison population in the early 1970s was rising at a much slower rate than it is now. In the 1970s, the prison population was rising annually at the rate of 0·8 per cent. Since his Government took office, it has been rising by 1·4 per cent. per annum. His own Department's projections are that this trend will continue, and in the next decade it is anticipated that the prison population will rise by 2·7 per cent. per annum.

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The consequences are appalling not only for prison officers but for prison inmates, many of whom in this country must be regarded as subject to conditions that are degrading and inhuman within the terms of article 3 of the European convention on human rights. Three particular categories at least are suffering unacceptably. The first category is those on remand. In England the Home Secretary has shown himself, I believe, to be dilatory in dealing with this problem. The experimentation has been going on for too long. Action is needed to get these people before the courts. It may be that the Lord Chancellor's Department is partially responsible for the deployment of our judicial resources, and it falls to him particularly to deal with the Crown courts. The need to take a lesson from the Scottish system is imperative.
There is also the question of fine defaulters. It is absurd and ineffective to imprison so many fine defaulters as are being imprisoned today. There is the question of imprisonment for petty offences, of which the hon. Member for Cheltenham (Mr. Irving) and the right hon. Member for Morley and Leeds, South (Mr. Rees) spoke. I think that the time has come for Parliament to grasp the nettle, to recognise that we must legislate out of existence the custodial response to certain offences; to remove that option.
In practice, some Departments have decriminalised certain offences—notably the Inland Revenue, which tends to pursue its claims in the civil courts rather than to prosecute. It has at least as good a rate of recovery by so doing than by prosecuting.
Responsibility does not lie only with Parliament and the Government. It must be recognised that something is going seriously wrong in our courts. In 1980, the Court of Appeal expressed its view forcefully and clearly when it stated:
"It is no secret that our prisons at the moment are dangerously overcrowded, so much so that sentencing courts must be particularly careful to examine each case to ensure that if a minimum custodial sentence is necessary, sentences are as short as possible and consistent only with the duties to protect the interests of the public and to punish and deter the criminal. Many offenders can be dealt with equally justly and effectively by a sentence of six months' or nine months' imprisonment as by one of eighteen months or three years. What the court can and should do is ask itself whether there is any compelling reason why a short sentence should not be passed."
Notwithstanding the guidance from the Court of Appeal, the Home Office has reported that the recent increase in the prison population has been
"mainly due to a larger number of offenders being dealt with by the Crown court and a large proportion of them being given a custodial sentence. There is also some evidence towards the end of 1984 of an increase in the length of custodial sentences being imposed by the Crown court for some types of offences, which may be a contributory factor."
The Home Secretary took the opportunity today to remind the House of the need for custodial sentences in cases of violence and those of drug trafficking; no one in the House would dissent from that. However, the right hon. Gentleman has not taken the opportunity to talk about the decriminalisation, which has been recommended by Justice, the British branch of the International Commission of Jurists, of many of the 7,000 offences that are called criminal. He has not taken the opportunity to recognise that Parliament and Government set the framework within
64
which judges have to pass sentences and that the judiciary has to take the lead from those who are elected to set the sentencing framework.
The Home Secretary is looking puzzled. either because he is hoping that I shall say something that interferes with what he calls the discretion of the judiciary or because he is not prepared to respond to these matters. The right hon. Gentleman would do well to realise that the problems which exploded last week will recur if he does not tackle the underlying difficulties. He may shuffle off his responsibilities to a successor but the problems will not be dealt with merely by the prison building programme. That programme is necessary to replace existing antiquated and unacceptable prisons, apart from meeting the growing prison population. What the right hon. Gentleman should be examining, and what he said nothing about, are the alternatives to custodial treatment.
Mr. Hurd rose——
Mr. Maclennan: No, I shall not give way.
Mr. Hurd: It is clear that the hon. Gentleman did not listen to my speech.
Mr. Maclennan: I listened to it with great care and I made careful notes.
I am extremely disappointed that the right hon. Gentleman did not touch on the shortage of day care centres. He did not touch upon the possibilities of expanding intermediate treatment. He did not touch on bail verification schemes and other desirable replacements for custodial treatment. He did not deal with these matters with the seriousness that they deserve. He and the Home Office have shown less than sufficient enthusiasm for the options to custody for too long: the consequence is the appalling breakdown of law and order in the prisons, which was brought home to us last week.
It is right that manning levels must be determined by the prison service, by the prison management. That means that decisions cannot be taken by anyone else. However, if prison officers are to be regarded as part of a professional body—that must be the objective—it is only right that they should be closely involved in consultation. It is right that their status should be enhanced, that their basic pay should be increased and that the appalling industrial relations example which the Home Secretary gave last week, should not be repeated.
I hope that the talks that will take place tomorrow will be fruitful and that, as a result of recent bitter experience, there will be a more professional attitude among the wilder elements of the prisoner officers. I hope that the proper aspirations of the members of the Prison Officers Association will be met and that they will continue to provide a service under less trying conditions than they have had to endure for some time.
6.26 pm
Mr. Robert Kilroy-Silk: The events of last week caused a great deal of hardship and anxiety to prisoners, who saw a deterioration in the already poor prison regime; to those who were refused access to prisons and had to endure the appalling conditions of police and court cells; to those prisoners who were intimidated, threatened or beaten by other prisoners because of the prison officers' lack of or abdication of control over the prisons; to prisoners' relatives, who were refused visits; and to local residents, who were concerned

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about the reports of riots and breakouts and were naturally apprehensive about their own safety. In those circumstances, the decision of the Prison Officers Association to suspend industrial action is to be commended, whatever the rights and wrongs of the issue.
The Home Secretary said again this afternoon that the trigger that set off the industrial action was the prison officers' claim to be able to negotiate safe manning levels and the right hon. Gentleman's insistence that while he would consult he reserved the right for management to manage and to determine appropriate staffing levels. That attitude is proper and acceptable, and with good will, sensitivity and patience on both sides the dispute could have been resolved. The response of David Evans, the general secretary of the POA, to the Home Secretary's letter of 27 April seemed to suggest that agreement on that issue had been arrived at, or at least was near. Local action seemed to undermine that.
That is not the real issue, however, and it is not the issue that we are debating. The real issue, as the Home Secretary has made clear, and as the Prime Minister reiterated in her letter to the prison governors, is the Government's determination to eradicate what they see as excessive overtime and waste in the prison service.
No one, including the POA, prison officers, the prison service and the Labour movement, will do anyone any favours by pretending that there are not abuses of the overtime system and that there are not restrictive practices which should be eliminated. There are several abuses of working practices and the overtime system, and these relate to escort duties, the shift system, weekend workings at overtime rates and the insistence of prison officers that they escort prisoners to education classes and workshops. There are abuses, and they need to be dealt with effectively, but that is not to say that they can be dealt with by the method adopted by the Home Secretary.
The present practices have existed and have been tolerated by successive Governments, and the present Government have tolerated them for the past seven years. Weak management has allowed prison officers to veto several proposals for penal reform, whether it be the abolition of censorship or the installation of pay telephones in category C prisons. Weak management and ineffective Home Office control have not only tolerated, but have encouraged many of the practices that the Home Secretary now wishes to eradicate.
Such practices cannot be eradicated by suddenly holding a pistol to the POA's head. Those practices must be removed over a long period of time through patient negotiation. They must be part of a package that is concerned with improving the pay, working conditions and esteem of prison officers, as well as with increasing their numbers. They must also be attached to a package that includes a substantial reduction in the prison population.
It would be remiss of us to talk about the dispute or the issues surrounding it without placing it within that context. That is the context in which the dispute has arisen. The Home Secretary affects that the problem is new. His naive, simplistic approach that all those who propose solutions to the excessive increase in the prison population wish merely to inhibit the discretion enjoyed by the judiciary is a deliberate misreading of the situation.
Today, the prison population is at a record level. There are 47,000 prisoners in certified normal accommodation for 40,000. More than one third of our prisoners are
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required to live two or three to a cell that was built for one in Victorian times. They are locked up for 23 hours out of every 24, and are denied proper access to work, education and recreation facilities and, moreover, are denied access to decent sanitation. They live in conditions that make a mockery of the prison service's stated aim to help prisoners to lead a good and useful life. Their conditions deny any notion of minimal standards of human decency and contravene minimum internationally agreed standards for the treatment of prisoners. The dispute, and the tensions and difficulties encountered by prison officers, must be seen in that context.
The problem is not new. The Home Secretary came to the House today, with all his good intent, after seven long years of a Conservative Government who have been warned time and again, by hon. Members on both sides of the House, and by organisations both inside and outside the House, about the spiralling increase in the prison population and the dangers that that poses for standards and for the safety of prisoners and staff. Those dangers were outlined in the expenditure report, published in 1978. They were reiterated in the May committee's report in 1979. They were also repeated in the report of the Home Affairs Committee in 1981 and in the report of our parliamentary penal affairs group which was published in 1980, entitled, "Too Many Prisoners".
Those reports and many others have drawn the attention of successive Home Secretaries to the need for a substantial and permanent reduction in the prison population and for action to be taken quickly if we are to avoid a crisis in our prisons that could endanger the life, health, safety and welfare of prisoners and staff. Successive Conservative Home Secretaries have ignored those warnings and failed to take the sort of measures that have been reiterated today, and which would lead to a reduction in the prison population.
The Home Secretary said that the dispute provided him with an opportunity. So it does, and let us hope that he will take it, not just to ensure that there are decent working conditions for prison officers, to insist that they work in accordance with proper procedures, or to increase their numbers or pay, but to provide a more positive and constructive prison regime. We need a regime that makes some attempt at rehabilitation or reform, but that can be achieved only if the Home Secretary takes immediate and effective action to reduce the prison population.
There is no time to go through the numerous ways in which the prison population could be reduced. The hon. Member for Cheltenham (Mr. Irving) has played an important role in all of our debates, and in seeking penal reform. He mentioned the 10-point programme which was published last week by the penal affairs group. Ten clear, well-argued, well-articulated and well-researched proposals were set out which would lead to a substantial reduction in the prison population. The Home Secretary could activate one of them today. He could activate section 32 of the Criminal Justice Act 1982, which the parliamentary group wrote into the legislation. It would enable him to release short-term, non-violent offenders in the last six months of their sentences, and would thus immediately release about 5,000 prisoners without endangering the public.
That would give the Home Secretary that necessary and essential breathing space in which to renegotiate the terms and conditions of prison officers and to embark upon the creation of that more positive and constructive prison

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regime. Whichever option the Home Secretary goes for, prison officers, prisons and all those who care about such matters will not forgive him if he does not take with both hands the opportunity to reform our penal system so that we can have safe, decent and civilised conditions for both staff and prisoners.
6.35 pm
Mrs. Elaine Kellett-Bowman: I apologise for not being in the Chamber throughout the debate, but I had an unavoidable appointment to keep.
I rise to pay tribute to the prison staff in my constituency, which has a very unusual prison. It is in the old castle, and physical conditions could hardly be worse. Despite that, over the years every effort has been made to bring a civilised attitude to bear on the running of that gaol. The governor and the prison officers have an excellent relationship, and I have had the good fortune to be a prison visitor there for some years. In a report published only a few months ago Her Majesty's Chief Inspector of Prisons revealed that morale in our prison is exceptionally high.
It is important that people should realise that some prisons are exceptionally well run. Indeed, tribute should be paid to them. Nevertheless, prison officers feel that they have been ill-served over the question of overtime. It is crucial that they should be given higher basic salaries, so that perhaps we could remove some of the overtime. We must alleviate that sense of grievance if happy prisons, like that in Lancaster, are to remain well run.
6.37 pm
Mr. Clive Soley: This all too short debate takes place in the context of the total and abject failure of the Government's law and order policy. That failure is matched only by their failure to create employment. They are the two most disastrous areas of this Government's policies.
I agree with the POA which, in "A Service in Crisis", says:
"the conditions of work for prison officers and the role they are asked to carry out on behalf of society is fettered not only by the physical conditions, but by the total absence of a cohesive strategy on penal affairs."
If my opening comments are wrong, they are wrong only in as much as the Government do not have a policy to collapse. That is the problem for them. As my right hon. Friend the Member for Morley and Leeds, South (Mr. Rees) pointed out, the Government were given a positive opportunity with the May report. That report gave the Government an opportunity that no previous Government had. But again they either ducked it or missed it, depending on whether they knew that it existed. Since then, we have had a statement from Her Majesty's Chief Inspector of Prisons, in which he says:
"Our overriding concern during 1984 was, perhaps, that regime opportunities continued to diminish and that overcrowding—a fundamental cause of this and many other evils—seemed, at least in the short term, more likely to get worse than better."
Of course, the crisis exploded last week.
Incidentally, certain hon. Members on both sides of the House belong to the all-party group, which has done very good work on this issue. But the inspector had the following to say about night sanitary arrangements:
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"The problem is exacerbated by overcrowding, which results in most of these inmates having to use their pots in the presence of one or two other inmates in the confines of a small cell. When the time for slopping out comes the prisoners queue up with their pots for the few toilets on the landing. The stench of urine and excrement pervades the prison. So awful is this procedure that many prisoners become constipated—others prefer to use their pants, hurling them and their contents out of the window when morning comes."
It is important to use the report of Her Majesty's Chief Inspector of Prisons to drive that point home. Some people do not realise the seriousness of the crisis.
The British penal system is one of the worst penal systems in the Western world. The hon. and learned Member for Fylde (Sir E. Gardner) intends to visit the United States. I warn him that the United States copied its penal system from Britain. Britain and the United States imposed their system on West Germany, after Germany's defeat in 1945. The three worst penal systems in the Western world are those of West Germany, the United States and the United Kingdom. I would advise the hon. and learned Gentleman to go to Holland and Sweden, where he would see what can be done with a sensible prison policy. Holland has similar crime and inner-city problems to Britain.
Ms. Jo Richardson: The right hon. Gentleman has just been there.
Mr. Soley: My hon. Friend has just said that the hon. and learned Member for Fylde has been there.
The Home Secretary said that he does not want to tell the courts what to do. He said that it was only Labour Members who wanted to tell the courts what to do. He had better send a note to the House of Lords and tell Lord Whitelaw that he must have crossed the Floor of the House, because Lord Whitelaw does not appear to know that he crossed the Floor of the House. Lord Whitelaw "threatened"—I use the word of Government Members—the courts that if they did not do something about long sentences, he would. On 1 August 1980, he said:
"I believe that a strong consensus is developing that shorter prison sentences are both appropriate and desirable. We now know that a longer sentence is most unlikely to aid a prisoner's rehabilitation in any sense, while the initial impact of imprisonment is quite sufficient to make a lasting impression in the minds of most offenders."
The then Home Secretary went on to talk about the importance of recognising the right of the courts to pass the sentences that they desired. My hon. Friend the Member for Knowsley, North (Mr. Kilroy-Silk) intervened and asked how long it would be before the Home Secretary—who is now Lord Whitelaw—would intervene. In response, Lord Whitelaw said:
"I shall not be trapped into saying how long I shall give the judiciary…I want to see how this develops."—[Official Report, 1 August 1980; Vol. 989, c. 1907–8.]
If that is not a clear and definite sign that he would intervene if the courts did not respond, the Government had better ask Lord Whitelaw what he did mean. The House is responsible for deciding the length of sentences. The Home Secretary sent out an advice notice to 26,000 judges, recorders, magistrates and clerks of the court telling them to impose fewer sentences at the same time—as my right hon. Friend the Member for Manchester, Gorton (Mr. Kaufman) pointed out—as the chairman of the Tory party and the Prime Minister were saying, "Give longer sentences." The Government had better decide whose side they are on. They do not seem to know what they want.

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Has the Home Secretary ever spoken to the chairman of the Tory party about his statements on law and order? If people such as the chairman of the Tory party and the Prime Minister keep saying, "Give longer sentences," would anybody be surprised if the courts ignored the advice from the Home Secretary, simply because the Government were speaking with two voices? If the Government want to reduce the length of prison sentences, they can. The House of Commons recently considered the Public Order Bill which sought to impose a prison sentence for disobeying a police officer's instructions on the roads along which a person could go to attend a demonstration. It is nonsense to get ourselves into such a state. No civilised country would dream of doing anything so stupid. As I said in Committee, and as the hon. Member for Pudsey (Mr. Shaw) accepted, the Bill sought to impose a life sentence on a person taking part in a riot. That is way above anything that any other country has done. As I understand it. the Government are awaiting the outcome of a particular case before they decide to proceed with that measure. The Government must put their house in order.
What do the Government intend to do about Executive release? The provision of Executive release was introduced by the Government to reduce overcrowding in the prisons in a crisis. The present Home Secretary and the previous Home Secretary told us that we have a crisis in our prisons, but they have not used the Executive release provision. Perhaps the Minister will address himself to what the Government intend to use Executive release for and when they intend to use it. If last week's event was not a crisis which justified the use of Executive release, what is?
All I can suggest—the Prison Officers Association knows this—is that it is designed to be used in the context of industrial action. It will be used to try to break the POA, in the same way as the Government tried to break the teachers, the miners and everyone else with whom they disagree. As my right hon. Friend the Member for Gorton indicated, the Government passed legislation insisting on a ballot. That was followed fully by the POA. Therefore, to turn round and accuse the POA of bucking the system is unacceptable.
The House should be reminded of what happened last Wednesday. The complement of staff on duty was that required by the manning instructions of the Government. Overtime was stopped. If the ordinary system had been suitable, it would have worked, but it did not. The Government's failure on the POA claim is that they tried to force the POA to drop all hint of industrial action, despite the ballot. The Government's climb-down—which is welcome—is a recognition that they should have accepted the offer of the POA to withdraw industrial action while negotiations took place.
I conclude with perhaps the most important point of all. Overtime is not desirable as a way of operating our prisons. When I said that the Government had thrown away an opportunity regarding the May report, I meant it. The May report stated that there was a desperate need to restructure prison officersn salaries, working conditions, and so on. The Government, especially the previous Home Secretary, should have created a proper, professional status for the job of prison officer. Prison officers do not want to be just turnkeys. The vast majority of prison officers do not want to rely on overtime. They are prepared to negotiate and discuss a proper, professional salary for the job.
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If that happened, we could introduce a proper training scheme for prison officers. A prison officer gets 12 weeks basic training, of which the first three are spent working in a prison. An officer is on probation for a year. We must remember that prison officers deal with men and women who, at best, have many emotional and social problems, and, at worst, are sophisticated offenders. In the Northern Ireland conflict people have gone on hunger strikes to the point of killing themselves.
This crisis has given the Government another opportunity. If they duck or miss it again, as they did with the May committee, that will be a criminal mistake for which we shall hold the Government accountable.
6.47 pm
The Parliamentary Under-Secretary of State for the Home Department (Mr. David Mellor): I cannot say that I agreed with a great deal of what the right hon. Member for Manchester, Gorton (Mr. Kaufman) said, despite the fine eloquence of his contribution, because he seemed to sacrifice real depth for surface glitter—more like Richard Strauss than Bruckner. The right hon. Gentleman's speech was Brucknerian only in its length.
I agreed with the suggestion of the right hon. Member for Gorton that the problems have been present for many years, under Governments of both parties. I am glad that the right hon. Member for Morley and Leeds, South (Mr. Rees) recognised that. In 1979 the prison population, which numbered 42,500, represented 111 per cent. of certified normal accommodation. Today, at just under 47,000, it represents 113·5 per cent. of certified normal accommodation.
There has been a problem of overcrowding for a long time. It is wrong to suggest that the crisis in the prisons is of recent provenance, due to the over-use of imprisonment by the courts. My hon. and learned Friend the Member for Fylde (Sir E. Gardner) has often put his finger on the real point, which is that the growth in the prison population has been predominantly a growth in remand prisoners. In June 1979 the figure was 6,100, and in March 1986 it was 9,500. That has to do with the confidence that the courts have in the intentions of certain people appearing before them to turn up for trial when called and not to commit further offences when on bail—matters that are, rightly, decisions for courts and not Governments.
Governments can help, as we have sought to do, in a number of material ways; for example, by experimenting with time limits, which bring cases on more quickly and cut out unwarranted delays, especially for those on remand in custody, and by increasing the number of bail hostels and expenditure on the probation service. Since the Conservative party took office that expenditure has increased by 35 per cent. in real terms. The increase in the number of sentenced prisoners has been relatively modest, from 35,700 in the system in June 1979, to 37,100 at the end of March 1986 —an increase of 1,400, which is very much at the margin.
Contrary to the assertion of the hon. Member for Caithness and Sutherland (Mr. Maclennan), the average prison population increased more in the 1970s than it did in the 1980s. It is no good the hon. Gentleman shaking his head. I am giving him the facts. If I am wrong, no doubt he will correct me, but I suspect that he will not need to do so. The average prison population increased between

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1974 and 1979 14 per cent., and between 1979 and 1985 by 9·5 per cent. Much of the hon. Gentleman's case was a house built on sand.
Between 1979 and 1984 there was a significant increase in the number of sentenced prisoners, which reflected an increase in the number of indictable offences cleared up—250,000 last year with an increase of about 50 per cent. in the business of the Crown court. It is an admission not of failure but of success if more criminals are caught and sentenced. If it is appropriate that they should go to prison, it is a Government's duty to provide prison places so that the courts may so sentence. That is the public's view. In so far as it is not the Labour party's view, it shows that, despite all its efforts to regain the ground on the law and order issue which it has lost over the years, it is still very much at variance with the outlook of the ordinary man on the street.
In 1984, 74,000 people were sentenced to prison, compared with 60,000 in 1979. That was certainly an increase, but, in view of the proper calls for non-custodial sentences, in which we believe when such sentences are appropriate, that is worth setting in its proper context. Taking one non-custodial sentence alone, between 1979 and 1984 the number of sentences to community service passed by the courts increased from 13,000 to 34.000—an increase of 21,000, or 50 per cent. more than the increase in the number of people sent to prison. I should have thought that that showed the Government's success in devising penalties in which the courts had confidence and in providing the resources through the probation service and the probation ancilliaries to implement those sentences.
The Opposition's attacks were well wide of the mark on a number of counts. I was interested to hear the hon. Member for Hammersmith (Mr. Soley) commend the penal system in the Netherlands as one that we should follow. I wonder whether that could be sustained by a visit to Amsterdam to see the law and order position there, or by the observation, which is often made, that in the Netherlands if there is no room in prison for a person sentenced to prison, he goes home and waits for the call to come. Is that the criminal justice system that the Opposition advise?
I cannot help but think that the Opposition's commendation of the completely outmoded approach on which even the Netherlands authorities are turning their backs is, once again, a sign of how out of touch they are. The comparisons made with other European countries fall down on the one country which is perhaps comparable to the United Kingdom—West Germany. The special pleading that somehow the West Germans inherited our penal system does not seem to be anywhere near the mark.
Much of the Opposition's attack was based on the assertion that it is this Government and this Home Secretary who have created a crisis in the prisons. However, in 1979 the Conservative party inherited a rundown prison estate because the last Government, although they knew the problems, failed to do anything about them. Because there has been some dispute about the figures, and because, for the bulk of the debate, the former Home Secretary—the right hon. Member for Morley and Leeds, South—challenged one of my figures, I shall cite the figures so that we can end the argument once and for all. On staff costs, between
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1974–75 and 1978–79 there was an increase in cash terms from £75 million to £158 million. Because that was the notorious period during which the hon. Member for Caithness and Sutherland was Under-Secretary of State for Prices and Consumer Protection, such as the impact of inflation that an increase of——
Mr. A. J. Beith: So what?
Mr. Mellor: I shall tell the hon. Gentleman. There was an increase of 111 per cent. in cash terms. which amounted to an increase of only 9 per cent. in real terms at the end of that period. However, between 1979–80 and 1985–86, under this Government, there was an increase in cash terms from £194 million to £386 million, which is an increase of 99 per cent. in cash terms and 43 per cent. in real terms. That is a fivefold increase in real terms compared with the so-called achievements of the Labour Government.
Mr. Kaufman: Will the hon. Gentleman give way?
Mr. Mellor: Let me finish the indictment and then the right hon. Gentleman can plead to it.
I come now to the points on new buildings, because the right hon. Member for Morley and Leeds. South commented on that. During the lifetime of the Labour Government there was a decrease of 20 per cent. in real terms in capital expenditure on prison building. The right hon. Gentleman's defence of that period appeared to be confined to his tenure of office, when he denied that there were any cuts. I shall, therefore, cite the figures. Capital expenditure in 1974–75 was £20 million; in 1975–76, £29 million; and—we come to the point where the right hon. Member for Morley and Leeds, South came on the scene—in 1976–77——
Mr. Merlyn Rees: When was that?
Mr. Mellor: In September. In 1976–77, expenditure was £25 million.
Mr. Rees: That was not me.
Mr. Mellor: We are coming to the bit that implicates the right hon. Gentleman. In 1977–78 it was £25 million, and in 1978–79—the right hon. Gentleman cannot say that he was not there——
Mr. Rees: I was there.
Mr. Mellor:—it was £23 million.
Mr. Kaufman rose——
Mr. Mellor: Wait a minute. I am dealing with the master and I shall come later to the apprentice.
The grandiloquent account by the right hon. Member for Morley and Leeds, South of his battles with the Treasury does not match the reality that there was a decrease—I shall give way to him if my figures are wrong—in capital spending, leaving us with a disgraceful prison estate to pick up. During the Labour Government only £122 million was spent on the prisons. We have spent £322 million.
Mr. Kaufman: Now that the hon. Gentleman is dealing with cash terms and real terms, will he repudiate the Prime Minister's false statement last Thursday that
"We have increased spending on the prison service by 85 per cent. in real terms."—[Official Report, 1 May 1986; Vol. 96, c. 1097.]
when the Government have done nothing of the kind, and when the Home Secretary has admitted this afternoon that

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the expenditure was less than one third of the amount cited by the Prime Minister? Will the hon. Gentleman now be brave and courageous enough to say that last Thursday the Prime Minister misinformed and misled the House?
Mr. Mellor: I am not accountable for what my right hon. Friend says about that. I am giving the House the figures. If, by a slip of the tongue, my right hon. friend the Prime Minister gave the wrong figure, that cannot possibly be the excuse for the fact that, under the Labour Government, there was a decrease just at the time when there should have been an increase, in the prison building programme, while under this Government there has been an increase of 173 per cent. in the amount spent this year compared with 1979–80. For the Labour party to think that a slip of the tongue made during Question Time is an answer to a charge of neglect of the prison estate during the five years in which the Labour party were in government is a sign of the shallowness of its approach to a deeply serious and difficult issue.
Our prison building programme has brought on stream nearly 3,000 new places in the past three years, with the promise of more than 11,000 places to come. That enables us to deal seriously with the real problems of providing a prison system that is appropriate for the present situation. All that increased expenditure needs to be based on a proper and efficient system in the prisons so that those who work in the prisons do so according to modern and not outdated industrial relations practices. That is what the Government are tackling.
Question put, That this House do now adjourn:—
The House divided: Ayes 160, Noes 260.

Divison No. 169]

[7.00 pm

AYES

Alton, David

Dalyell, Tam

Anderson, Donald

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

Ashdown, Paddy

Dixon, Donald

Ashley, Rt Hon Jack

Dobson, Frank

Atkinson, N. (Tottenham)

Dormand, Jack

Banks, Tony (Newham NW)

Douglas, Dick

Barnett, Guy

Dubs, Alfred

Barron, Kevin

Duffy, A. E. P.

Beckett, Mrs Margaret

Dunwoody, Hon Mrs G.

Beith, A. J.

Eadie, Alex

Benn, Rt Hon Tony

Eastham, Ken

Bermingham, Gerald

Edwards, Bob (W'h'mpt'n SE)

Bidwell, Sydney

Faulds, Andrew

Blair, Anthony

Field, Frank (Birkenhead)

Bray, Dr Jeremy

Fisher, Mark

Brown, Gordon (D'f'mline E)

Foot, Rt Hon Michael

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

Foster, Derek

Buchan, Norman

Foulkes, George

Callaghan, Rt Hon J.

Fraser, J. (Norwood)

Callaghan, Jim (Heyw'd & M)

Freeson, Rt Hon Reginald

Campbell, Ian

Freud, Clement

Campbell-Savours, Dale

George, Bruce

Carter-Jones, Lewis

Gilbert, Rt Hon Dr John

Clark, Dr David (S Shields)

Golding, John

Clarke, Thomas

Gould, Bryan

Clay, Robert

Gourlay, Harry

Clelland, David Gordon

Hamilton, James (M'well N)

Cocks, Rt Hon M. (Bristol S)

Hamilton, W. W. (Fife Central)

Conlan, Bernard

Hancock, Michael

Cook, Frank (Stockton North)

Hardy, Peter

Cook, Robin F. (Livingston)

Harrison, Rt Hon Walter

Corbett, Robin

Hart, Rt Hon Dame Judith

Corbyn, Jeremy

Hattersley, Rt Hon Roy

Cox, Thomas (Tooting)

Heffer, Eric S.

Craigen, J. M.

Hogg, N. (C'nauld & Kilsyth)

Crowther, Stan

Holland, Stuart (Vauxhall)

Cunliffe, Lawrence

Home Robertson, John

Cunningham, Dr John

Hoyle, Douglas

74

Hughes, Robert (Aberdeen N)

Radice, Giles

Hughes, Roy (Newport East)

Randall, Stuart

Janner, Hon Greville

Raynsford, Nick

John, Brynmor

Redmond, Martin

Jones, Barry (Alyn & Deeside)

Rees, Rt Hon M. (Leeds S)

Kaufman, Rt Hon Gerald

Richardson, Ms Jo

Kilroy-Silk, Robert

Roberts, Ernest (Hackney N)

Kinnock, Rt Hon Neil

Robertson, George

Lamond, James

Robinson, G. (Coventry NW)

Leadbitter, Ted

Rogers, Allan

Leighton, Ronald

Rooker, J. W.

Lewis, Ron (Carlisle)

Ross, Ernest (Dundee W)

Lofthouse, Geoffrey

Rowlands, Ted

McCartney, Hugh

Ryman, John

McDonald, Dr Oonagh

Sheerman, Barry

McGuire, Michael

Sheldon, Rt Hon R.

McKay, Allen (Penistone)

Short, Ms Clare (Ladywood)

McKelvey, William

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

Maclennan, Robert

Silkin, Rt Hon J.

McTaggart, Robert

Skinner, Dennis

McWilliam, John

Smith, C.(lsl'ton S & F'bury)

Madden, Max

Soley, Clive

Marek, Dr John

Spearing, Nigel

Marshall, David (Shettleston)

Straw, Jack

Martin, Michael

Taylor, Rt Hon John David

Mason, Rt Hon Roy

Thomas, Dr R. (Carmarthen)

Meacher, Michael

Thorne, Stan (Preston)

Mikardo, Ian

Tinn, James

Millan, Rt Hon Bruce

Torney, Tom

Miller, Dr M. S. (E Kilbride)

Wainwright, R.

Mitchell, Austin (G't Grimsby)

Wardell, Gareth (Gower)

Morris, Rt Hon A. (W'shawe)

Wareing, Robert

Morris, Rt Hon J. (Aberavon)

Weetch, Ken

O'Brien, William

White, James

O'Neill, Martin

Wigley, Dafydd

Orme, Rt Hon Stanley

Williams, Rt Hon A.

Park, George

Winnick, David

Parry, Robert

Woodall, Alec

Patchett, Terry

Wrigglesworth, Ian

Pavitt, Laurie

Young, David (Bolton SE)

Pendry, Tom

Penhaligon, David

Tellers for the Ayes:

Pike, Peter

Mr. Sean Hughes and

Powell, Raymond (Ogmore)

Mr. Ron Davies.

Prescott, John

NOES

Aitken, Jonathan

Corrie, John

Alison, Rt Hon Michael

Cranborne, Viscount

Ancram, Michael

Critchley, Julian

Ashby, David

Dickens, Geoffrey

Atkins, Robert (South Ribble)

Dorrell, Stephen

Atkinson, David (B'm'th E)

Douglas-Hamilton, Lord J.

Baker, Nicholas (Dorset N)

Dover, Den

Banks, Robert (Harrogate)

du Cann, Rt Hon Sir Edward

Beaumont-Dark, Anthony

Durant, Tony

Best, Keith

Eyre, Sir Reginald

Biffen, Rt Hon John

Fairbairn, Nicholas

Biggs-Davison, Sir John

Fallon, Michael

Body, Sir Richard

Favell, Anthony

Boscawen, Hon Robert

Fenner, Mrs Peggy

Bottomley, Mrs Virginia

Finsberg, Sir Geoffrey

Brooke, Hon Peter

Forman, Nigel

Buck, Sir Antony

Forsyth, Michael (Stirling)

Burt, Alistair

Fraser, Peter (Angus East)

Butcher, John

Freeman, Roger

Carlisle, Kenneth (Lincoln)

Fry, Peter

Carlisle, Rt Hon M. (W'ton S)

Gale, Roger

Cash, William

Gardner, Sir Edward (Fylde)

Chalker, Mrs Lynda

Garel-Jones, Tristan

Channon, Rt Hon Paul

Gilmour, Rt Hon Sir Ian

Chapman, Sydney

Glyn, Dr Alan

Chope, Christopher

Goodlad, Alastair

Clark, Sir W. (Croydon S)

Gow, Ian

Clarke, Rt Hon K. (Rushcliffe)

Gower, Sir Raymond

Clegg, Sir Walter

Grant, Sir Anthony

Cockeram, Eric

Gregory, Conal

Colvin, Michael

Griffiths, Sir Eldon

Coombs, Simon

Griffiths, Peter (Portsm'th N)

Cope, John

Grist, Ian

75

Ground, Patrick

Marlow, Antony

Grylls, Michael

Marshall, Michael (Arundel)

Hamilton, Neil (Tatton)

Mather, Carol

Hanley, Jeremy

Maude, Hon Francis

Hannam, John

Mawhinney, Dr Brian

Hargreaves, Kenneth

Maxwell-Hyslop, Robin

Harris, David

Mayhew, Sir Patrick

Harvey, Robert

Mellor, David

Haselhurst, Alan

Merchant, Piers

Havers, Rt Hon Sir Michael

Meyer, Sir Anthony

Hawkins, Sir Paul (N'folk SW)

Mills, Iain (Meriden)

Hayes, J.

Miscampbell, Norman

Hayhoe, Rt Hon Barney

Monro, Sir Hector

Hayward, Robert

Moore, Rt Hon John

Heathcoat-Amory, David

Morris, M. (N'hampton S)

Henderson, Barry

Morrison, Hon C. (Devizes)

Hickmet, Richard

Moynihan, Hon C.

Hicks, Robert

Mudd, David

Higgins, Rt Hon Terence L.

Murphy, Christopher

Hirst, Michael

Needham, Richard

Holland, Sir Philip (Gedling)

Nelson, Anthony

Hordern, Sir Peter

Newton, Tony

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

Nicholls, Patrick

Howell, Rt Hon D. (G'ldford)

Normanton, Tom

Howell, Ralph (Norfolk, N)

Norris, Steven

Hubbard-Miles, Peter

Onslow, Cranley

Hunt, David (Wirral W)

Osborn, Sir John

Hunt, John (Ravensbourne)

Page, Sir John (Harrow W)

Hunter, Andrew

Page, Richard (Herts SW)

Hurd, Rt Hon Douglas

Parkinson, Rt Hon Cecil

Irving, Charles

Patten, Christopher (Bath)

Jackson, Robert

Patten, J. (Oxf W & Abgdn)

Jenkin, Rt Hon Patrick

Pattie, Geoffrey

Jessel, Toby

Pawsey, James

Johnson Smith, Sir Geoffrey

Peacock, Mrs Elizabeth

Jones, Gwilym (Cardiff N)

Portillo, Michael

Jones, Robert (Herts W)

Powell, William (Corby)

Jopling, Rt Hon Michael

Powley, John

Kellett-Bowman, Mrs Elaine

Prentice, Rt Hon Reg

Kershaw, Sir Anthony

Price, Sir David

Key, Robert

Proctor, K. Harvey

King, Roger (B'ham N'field)

Raffan, Keith

Knight, Dame Jill (Edgbaston)

Raison, Rt Hon Timothy

Knox, David

Rathbone, Tim

Lang, Ian

Renton, Tim

Latham, Michael

Rhodes James, Robert

Lawler, Geoffrey

Ridley, Rt Hon Nicholas

Lawrence, Ivan

Ridsdale, Sir Julian

Leigh, Edward (Gainsbor'gh)

Roberts, Wyn (Conwy)

Lennox-Boyd, Hon Mark

Robinson, Mark (N'port W)

Lewis, Sir Kenneth (Stamf'd)

Rost, Peter

Lightbown, David

Rowe, Andrew

Lilley, Peter

Ryder, Richard

Lloyd, Ian (Havant)

Sackville, Hon Thomas

Lloyd, Peter (Fareham)

Sainsbury, Hon Timothy

Lord, Michael

St, John-Stevas, Rt Hon N.

Luce, Rt Hon Richard

Sayeed, Jonathan

Lyell, Nicholas

Shelton, William (Streatham)

McCrindle, Robert

Shepherd, Colin (Hereford)

McCurley, Mrs Anna

Shepherd, Richard (Aldridge)

Macfarlane, Neil

Shersby, Michael

MacGregor, Rt Hon John

Silvester, Fred

MacKay, Andrew (Berkshire)

Sims, Roger

MacKay, John (Argyll & Bute)

Soames, Hon Nicholas

McNair-Wilson, M. (N'bury)

Speed, Keith

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

Speller, Tony

McQuarrie, Albert

Spencer, Derek

Madel, David

Spicer, Jim (Dorset W)

Major, John

Spicer, Michael (S Worcs)

Malins, Humfrey

Squire, Robin

Malone, Gerald

Stanbrook, Ivor

Maples, John

Stanley, Rt Hon John

Marland, Paul

Steen, Anthony

76

Stern, Michael

Waldegrave, Hon William

Stevens, Lewis (Nuneaton)

Walden, George

Stewart, Allan (Eastwood)

Walker, Bill (T'side N)

Stewart, Ian (Hertf'dshire N)

Walker, Rt Hon P. (W'cester)

Stokes, John

Waller, Gary

Stradling Thomas, Sir John

Walters, Dennis

Sumberg, David

Ward, John

Tapsell, Sir Peter

Wardle, C. (Bexhill)

Taylor, John (Solihull)

Warren, Kenneth

Taylor, Teddy (S'end E)

Watts, John

Temple-Morris, Peter

Wells, Bowen (Hertford)

Terlezki, Stefan

Wells, Sir John (Maidstone)

Thomas, Rt Hon Peter

Wheeler, John

Thompson, Donald (Calder V)

Whitney, Raymond

Thompson, Patrick (N'ich N)

Wilkinson, John

Thorne, Neil (Ilford S)

Winterton, Mrs Ann

Thornton, Malcolm

Winterton, Nicholas

Townend, John (Bridlington)

Wolfson, Mark

Townsend, Cyril D, (B'heath)

Wood, Timothy

Trippier, David

Woodcock, Michael

Twinn, Dr Ian

Yeo, Tim

van Straubenzee, Sir W.

Young, Sir George (Acton)

Vaughan, Sir Gerard

Viggers, Peter

Tellers for the Noes:

Waddington, David

Mr. Archie Hamilton and

Wakeham, Rt Hon John

Mr. Michael Neubert.

Question accordingly negatived.
7.12 pm
Mr. Tony Banks: On a point of order, Mr. Speaker. I wonder whether you can advise me and my colleague Members from the London borough of Newham. An election centrepiece going around in the Inner London education authority area, distributed by the Conservative Party, says:
"In Labour-controlled Newham the Council have voted to stop police entering schools to build contacts with young people. This is wrong."
It is not only wrong, but a downright lie. Newham borough council has applied to the courts——
Mr. Speaker: What is the point of order for me?
Mr. Banks: The point of order is this. Newham borough council has applied to the courts and has been granted an injunction against Conservative Central Office distributing that scurrilous piece of propaganda. Conservative Central Office has ignored the injunction. I should like to ask whether it is possible for the Law Officers to come to the House and explain why an injunction granted by the courts is not being enforced by Conservative Central Office——
Mr. Speaker: Order. That is certainly not a matter for me. As the hon. Gentleman well knows, I am responsible for what goes on inside the House. I cannot be held responsible for what goes on outside.
Mr. Banks: I understand, but further to that point of order, this is to save you embarrassment, Mr. Speaker, because Newham borough council has applied to the courts for the committal of the chairman of the Conservative party. Obviously, it would be embarrassing if he was arrested——
Mr. Speaker: Order. That is not a matter for me either.

Orders of the Day
  Finance Bill
    (Clauses Nos. 2, 15, 26 and 80)

      Considered in Committee.
      [MR. HAROLD WALKER in the Chair]
      Ordered,
      That the order in which proceedings in Committee of the Whole House on the Finance Bill are to be taken shall be Clause 26, Clause 15, Clause 2 and Clause 80.—[Mr. Ian Stewart.]

    Clause 26

      RELIEF FOR DONATIONS UNDER PAYROLL DEDUCTION SCHEME
      7.14 pm
      Mr. Tim Yeo: I beg to move amendment No. 6, in page 24, line 26, leave out '£100' and insert '£108'.
      I strongly welcome the clause and its aim of encouraging individual donations by employees. It is one part of a most imaginative package of concessions for charities in the Finance Bill this year. I am sure that it will be welcomed on both sides of the House.
      The purpose of my amendment is both to encourage and to make it simpler for employees who are weekly paid to exploit that valuable concession to the maximum. The present figure of £100 a year amounts to £1·9230769 a week—then my calculator went off the end of the scale. Large numbers of employees might wish to give £1·92 per week and large numbers of employers might welcome making that calculation, but it seems more likely that a figure of £2 would be easier to promote for weekly paid employees. We must remember that the concession in clause 26 will work only if sufficiently large numbers of employers—including, in particular, the people who work in the payroll offices—are happy and find it administratively convenient to operate it.
      I am advised that every few years there is a year in which there are 53 pay days, so a figure of £104 would still not be sufficient to allow employees to pay £2 a week to a charity of their choice. That takes us to £106, but as I am sure my hon. Friend the Economic Secretary will have noticed, the amount in the amendment is £108. That is to take into account the fact that we are very close to allowing monthly paid employees a round figure of £9 a month. That gives us the figure of £108.
      Therefore, I hope that my hon. Friend the Minister will feel able to be sympathetic to the amendment. If it was accepted, much larger sums of money would be channelled into charity through the concession and the voluntary sector would benefit accordingly. In particular, I believe that larger sums would be given by relatively low-paid employees, who are paid by the week.
      Mr. Robert Sheldon: I also welcome clause 26. I noticed the proviso that the Chancellor of the Exchequer set out in his Budget statement, when he said that the VAT concessions that he was making were not an annual event. I suspect that what he had in mind was to produce another focus for charity giving, which is reasonable. The VAT road was producing
      78
      more and more anomalies. I suspect that he was trying to divert attention to more fruitful areas of charity relief. This is a useful one, which one wants to encourage. The idea of tax relief on payroll giving is an imaginative venture, and I look forward to seeing it implemented.
      I am a little concerned about the extension of allowances. There is a danger of following the United States road, whereby one gives so many allowances, and narrows the tax base again and again, which leads to much higher rates of taxation than one would wish. That does not apply in this country. It is possible to make a reasonable exception in the case of charitable relief and I prefer to accept the advantages and virtues of that.
      A new definition of charities will be needed. There has been a big gap in our examination of the various ways in which charities operate. All hon. Members know that charities law is a minefield and an area which has frightened so many legislators. As we move towards granting tax relief, we can no longer delay the need to examine charity law and the anomalies that must be dealt with in due course.
      The provisions for avoidance are necessary. It is especially nasty to have to make provisions for avoidance on charity matters. It would seem that a number of people might confuse the wells of benevolence with the murky waters of greed. It is sad that these anti-avoidance provisions are necessary, but I accept that there is a need for them and I hope that they will meet the real requirements in that area. A number of people have set up bogus charities and the problem is that such activities may be on the increase. It may be sad, but these anti-avoidance provisions are necessary.
      I know that the Chancellor of the Exchequer used to be interested in index-linking the sum and it may be that, over a period, the figure of £100 may prove inadequate. That sum might be related to the individual's pay or to a maximum limit and there are various ways of calculating that figure. However, we are in the initial stages and obviously a round figure is appropriate. We can review the progress of the scheme and the Chancellor of the Exchequer will unavoidably, from now on, have to come to the House with new proposals or amendments to existing proposals which we can examine happily in the years to come.
      Mr. Michael Stern: I congratulate my hon. Friend the Member for Suffolk, South (Mr. Yeo) on moving this extremely sensible amendment. Many hon. Members are aware that in dealing with this new concept of payroll deduction, ordinary employees will be encouraged to consider reordering their affairs and taking a fresh look at regular charitable giving. They will be encouraged to do that by their employers only if the discipline is convenient.
      I believe that the effect of the figure of £100 set out in the clause will be to limit the deduction to £52. Most modern payroll schemes, especially computerised schemes, manage pence with some difficulty. As far as the employee is concerned, round sum of pounds per week. will be much more convenient for him and will meet little resistance from his employer. It is possible that some will go for £1·50 a week, and therefore the effective maximum for those on weekly pay will be £78 per annum. I am sure that my hon. Friend the Minister cannot be responsible for this, but I detect a little sleight of hand somewhere from the back of the Treasury.

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      My right hon. Friend the Chancellor of the Exchequer's intention in his Budget speech was to maximise charitable giving to a level that could be recorded in terms of revenue. However, I wonder whether, in making that calculation, someone somewhere did not think that by drafting the clause in its present form they would effectively halve the possible relief.
      I commend the amendment. It will make the charitable deduction scheme more effective and more readily saleable and, subject to the comments of my hon. Friend the Economic Secretary to the Treasury, it could operate at very little, if any, extra cost.
      Mr. William Powell: Like my hon. Friends the Members for Suffolk, South (Mr. Yeo) and for Bristol, North-West (Mr. Stern) and the right hon. Member for Ashton-under-Lyne, (Mr. Sheldon), I welcome the steps taken by my right hon. Friend the Chancellor of the Exchequer in the Budget to make donations to charity much easier than they have been in the past through the fiscal means, embodied in the clause. I also welcome the amendment introduced by my hon. Friend the Member for Suffolk, South. I should like to know why the Treasury has determined that £100 is the correct level at which to set the maximum allowed under the scheme.
      The administrative costs of the scheme will be considerable. No one should underestimate the difficulties which employer and employee will have to face before they can take advantage of the concession made by the £100 limit. I should like to consider some of the hurdles which will have to be crossed by all those responsible for the administration of the scheme.
      First, the employer's professional advisers will have to meet him to explain the scheme in detail. Many small firms without great expertise in their wages departments may have employees who wish to take advantage of the scheme, so it will be necessary to ensure that the employer, who may employ only one, two or three people, understands the way in which the scheme can be administered.
      When the scheme has been explained to him by his professional advisers, the employer will have to devise a scheme which suits his particular circumstances and liaise with the wages office to ensure that the scheme can be implemented. The scheme must then be explained in detail to the employees, many of whom will have little idea of its taxation implications. Eventually employees will need to give authority for payroll deductions in writing. If the payroll is computerised, the programme will have to be rewritten. If it is not computerised, considerable additional time will be spent administering the scheme in the wages office. The employer will have to liaise with organisations like the Charities Aid Foundation to agree the scheme and set up the necessary procedures, including the periodic payments to charities.
      Procedures for administering schemes will have to be set up for those employees leaving or joining the employer during the course of a fiscal year, because the £100 deduction is per employee per year, and the employer will have to ensure that a joining employee has not already utilised the year's entitlement. Corresponding complications may arise for an employee who is leaving an employer.
      80
      There will also be difficulties in establishing the employee's entitlement to a deduction if that employee has multiple employments. An employee who has not revealed his multiple employments may well be deterred from joining the scheme.
      Full records will have to be maintained for the inspection of the Inland Revenue, as required. Tax deduction cards will probably be needed to note the deductions given, and the end of year Inland Revenue return—form B35—may also need to show details of the deductions.
      The scheme is bound to involve administrative costs, which may be fairly considerable to the employer. As, for the vast majority of the work force, the relief will be £29 per annum—that is, £100 at the basic rate of 29 per cent.—the employer may conclude that the tax savings and incentives involved are not worth the administrative costs. All those matters must be considered.
      It is against that background that I commend the amendment. I also take this opportunity to invite my hon. Friend the Economic Secretary to explain why the level was set at £100, and whether he feels that, in setting such a low figure, there might be a disincentive to take advantage of the scheme, which I am sure is widely welcomed in the House and by the nation.
      7.30 pm
      Mr. Tony Blair: We shall have an opportunity to debate clause 26 overall later in our debates on the Finance Bill, when we debate clause stand part. As the House will know, we welcome the payroll provision, in particular because it seems to us to open up charitable giving to many more people than before. Previously, through deeds of covenant over a four-year period, people were entitled to give and get tax relief, but that was a more sophisticated form of donation, and the payroll scheme should open up giving to a much broader spectrum of people.
      The purpose of the amendment, as I understand it, is to ensure that, if there are difficulties because of the fractions of money that will be paid over to charities on a weekly or a monthly basis, such difficulties do not result in the levelling down of the amount of money given but rather in the full provision being taken advantage of. At the moment, if the full £100 relief were to be given, in a 52-week year, that would result in a weekly payment of £1.92·3, which is not a happy figure for employers to have to pay out. In a 53-week year, it would be £1.88·6, and would work out on a monthly basis at £4.34·7. The figure of £108 is reached by saying that, if we round the figure up a bit, it should be about £2 a week, and if it were £2 a week in a 52-week year, it would be £104 and £2 a week in a 53-week year would be £106. To provide for monthly payments, the figure has been rounded up to a multiple of 12, which is how we get £108.
      The Minister should tell us whether he believes that there will be any significant disincentive to paying the maximum of £100 because of the problems of computation that will arise, and of employers having to deduct such fractions. In addition, what would the extra cost be for increasing the relief from £100 to £108? We support the payroll deduction and are sympathetic to the amendment. We should like to see from what the Minister says whether there are problems that could be avoided by making the

      81
      figure £108. That does not seem a round figure, but in the way in which the scheme will operate, it is a rounder figure than £100.
      The Economic Secretary to the Treasury (Mr. Ian Stewart): I am grateful to all right hon. and hon. Members who have spoken for enabling us to begin the Committee stage of this year's Finance Bill on such an agreeable and harmonious note.
      Mr. Austin Mitchell: There is something wrong.
      Mr. Stewart: The hon. Member seems to be somewhat disconcerted by this.
      As we are talking about charities, it is appropriate that we should begin in a spirit of co-operation and understanding. Therefore, I welcome the way in which the right hon. Member for Ashton-under-Lyne (Mr. Sheldon), the hon. Member for Sedgefield (Mr. Blair), and my hon. Friends the Members for Bristol. North-West (Mr. Stern), for Corby (Mr. Powell) and for Suffolk, South (Mr. Yeo), who introduced the amendment, welcomed the concept of the payroll scheme, which we think will widen the scope for contributions to charity in an acceptable way. We are most anxious that it should not be unduly burdensome administratively, to take up a point made by my hon. Friend the Member for Corby.
      Before I answer the specific points, I shall touch briefly on one matter mentioned by the hon. Member for Ashton-under-Lyne. With his long and distinguished experience as a Treasury Minister, he will appreciate that it is necessary in our charities package to include anti-avoidance measures. We always feel inclined to do so, with regret, because of the difficulties of dealing with such technical matters. This subject has attracted a certain amount of comment and anxiety and it might be helpful if I say a few words about that now.
      No one has disputed that abuse has occurred, and I am sure that it is right to take steps to tackle it, but we are determined to ensure that in doing so we do not put genuine charitable work at a disadvantage. There are difficult technical considerations involved here and, as with most measures dealing with abuse, it is not possible to consult before a Budget. We have, however, received a number of representations to the effect that the proposals, as they stand, are likely to cause difficulty for a number of responsible bona fide charities. We are therefore considering these representations most carefully, and the Inland Revenue is consulting about them with the charitable organisations involved.
      Meanwhile, I can give the responsible charities this assurance—that we fully recognise the questions that they have raised, and shall take steps to respond to them, after thorough consultation, during the passage of the Bill. We are as anxious as they are that the potential adverse consequences that they foresee do not occur.
      I appreciate the comments made by my hon. Friend the Member for Suffolk, South when he moved this amendment, which were echoed by other hon. Members, about the competing figures that might be used for this purpose, based on so many weeks or months in the year. The amendment is designed to cope with that problem. However, any monetary limit is to some extent arbitrary. No single figure will provide a convenient round sum per week or month in all circumstances.
      82
      We looked at this most carefully and found, for example, that although, as everybody knows, there will be occasional years in which 53 weekly pay days fall in one tax year, it is also the case that some people are paid fortnightly or every four weeks, so that an extra pay day in any particular year can sometimes mean bringing in up to 56 weeks. That would require a higher figure. However, if the limit were increased to £112 to cover up to 56 weeks at £2 a week, it would not be a round sum per month. Therefore, taking the monthly and weekly figures, it is not possible to arrive at a universally correct figure.
      I can explain why we chose the round sum of £100 as the annual limit. We had it in mind that for many employees that was a substantial figure and would represent a generous contribution to charity. It will be an upper limit and by no means all those who want to contribute to the scheme will contribute that amount, or even close to that amount. It has the great advantage of being a round figure and one that is readily remembered and understood. That is important in getting the new scheme off to a good start. If a substantial number of employees can give up to the £100 limit, the benefit to charities would be considerable.
      The hon. Member for Sedgefield asked me about the cost. It is exceedingly difficult, to the point of impossibility, to quantify small changes in the upper limit, for the good reason that it is exceedingly difficult to quantify the cost of the scheme as a whole before we know better the likely take-up. It will become more apparent over the year, as consultations and discussions take place. We have estimated that the overall cost to the Revenue might be about £20 million in the first year, but that is again based on assumptions about participants and their average rate. I am afraid that I have to decline to be precise about that.
      We shall be looking at the figure of £100 in the light of experience. We shall want to see how the scheme gets going and we shall keep the limit under review from year to year. It would not be sensible to change it now. It would be better for the scheme to be readily comprehensible with a simple round sum of £100, which potential donors can easily understand and remember. I hope that my hon. Friend will withdraw his amendment on the understanding that we accept the valid points about the details of how contributions may be made in practice and that we can review it when we have experience of how the scheme works.
      Mr. Yeo: I welcome very much what the Economic Secretary has said about listening to the charity concerns on the possible adverse consequences of the anti-avoidance provisions elsewhere in the Bill. That will be of relief to many charities which feel that they may otherwise be hit in legitimate fund-raising activities.
      I was far from persuaded by my hon. Friend when he explained how he had arrived at the figure of £100. That is the one figure which is not a round sum in the way any employee is paid; it is not a round weekly, two-weekly, four-weekly or monthly sum. Unless there are employees who are paid annually—I do not believe that there are—£100 is the one figure which the Treasury could have managed to choose which is not a round sum by any method of calculation. Whatever other justification there may be for choosing £100, to claim that it is a round sum is the least convincing.

      83
      However, I appreciate that we have much to learn about how effective the scheme will be. The take-up will depend on quite a few factors, including the administration points raised by my hon. Friend during the debate and, indeed, the success of the charities in selling schemes to employers and employees. So we shall have to learn by experience.
      Before withdrawing my amendment I wish to ask my hon. Friend one question. Will the Inland Revenue be willing to make available statistics about the number of people giving amounts which are close to the upper limit? If we are to argue later for a higher limit, can we have access to information which, as I understand it, will only be in the possession of the Inland Revenue?
      Mr. Ian Stewart: I shall have to invite my hon. Friend to table questions at the appropriate time; we shall see what answer we can give then. Because the arrangements for the scheme will take some time to put in place, it will not become operative until this time next year. Therefore, it will be some time before such evidence as my hon. Friend wants will be available.
      Mr. Yeo: I appreciate that point. Even the charities might not feel that the first full year of operation was a fair basis on which to assess the scheme. It may take two or three years for the scheme to get into its stride. I am grateful for what my hon. Friend has said. When we table questions relating to Inland Revenue statistics, I hope that we shall not be met with such answers as I have come across in the past—that the information is confidential or that it would cost too much to supply it. We shall have to wait to see what happens.
      In the light of what my hon. Friend has said, I beg to ask leave to withdraw the amendment.
      Amendment, by leave, withdrawn.
      Mr. Yeo: I beg to move amendment No. 5, in page 24, line 31, at end add—
      '(9) Any approval under this section of a scheme by the Board is not to be unreasonably withheld.'.
      The Chairman: With this it will be convenient to consider amendment No. 7, in page 24, line 31, at end add—
      `(9) Nothing in these provisions shall prevent the agent and the charity from being the same person.'.
      Mr. Yeo: I am sure my hon. Friend is aware of the welcome which clause 26 has had from charities generally. He may also be aware by now of the concern which has been provoked about the practical operation of the proposed payroll donation schemes. That concern emanates from two different sources. First, there are charities which already operate payroll giving schemes; Dr. Barnardo's and the Save the Children Fund are perhaps two of the most distinguished in this category. They already have relationships with established companies and many employees give money net.
      The position of those organisations would be protected by the amendment which has been tabled by my hon. Friend the Member for Kettering (Mr. Freeman). I do not want to trespass on his territory, except to say that I strongly support the sentiment and aim of his amendment. I am anxious that charities which are already involved in successful payroll schemes, in some cases for many years, should not be forced to use an outside agency to process
      84
      a scheme so that the people giving money can get the benefit of the tax deduction. That would be potentially inconvenient and would give rise to further expense.
      7.45 pm
      The second category of charities which is concerned about the practical operation of the concession comprises those which do not yet have in operation payroll deduction schemes with employers, but which hope to do so as a result of the concession. That includes a large number of charities, large and small, national and local. In three or four years we all want to see tens of millions of pounds flowing into charities because of this valuable concession, but if full advantage is to be taken of it a large number of agencies will have to be approved under the provisions of the Bill.
      According to the clause, schemes and agencies have to be approved by the Inland Revenue. I am slightly nervous that it might be convenient, from the point of view of the Inland Revenue, if only a small number, or even a very small number, of agencies and schemes were approved. The administrative convenience of the Inland Revenue must not be allowed to disrupt the successful development of payroll donations.
      The concern of various organisations which have approached me about this has been heightened by recent claims by the Charities Aid Foundation. I welcome the involvement of the Charities Aid Foundation in the concession and I strongly support the initiatives which it has been taking since the Budget. I also support its work generally, but I must take issue with a statement in a leaflet which it published recently, called "Payroll giving—give as you earn", which said:
      "There will be strict rules governing who can be an agency charity but Charities Aid Foundation will be one and probably the principal national agency."
      That claim is neither helpful nor justified. If the Charities Aid Foundation succeeds in becoming the principal national agency over some years in full and free competition with other agencies, that is fine, but it would be unfortunate if the provisions of the Bill were interpreted in such a way as to restrict the establishment of other national agencies under the clause.
      Groups of major charities feel that they could run their own agency on a joint basis as efficiently as any other body. Not only should they be allowed, but they should be encouraged to do so. Some major charities are talking to each other about the establishment of such an agency.
      In addition, local charities may wish to take advantage of the concession. One example is the Ipswich and East Suffolk Spastics Society, of which I have the honour of being president. We might establish a relationship with a major East Anglian company such as Fison. In those circumstances the charity or the company might not want to be obliged to go to a national agency with headquarters in a part of the country well away from Suffolk. It would be more appropriate to have a local agency, based near the charity or the employer. We want to see a network of local agencies; I mean genuinely local agencies and not branches of a national agency.
      All hon. Members want the clause to be successful. Therefore, I hope that my hon. Friend will at least accept the spirit of my amendment. Can he assure us that it is the wish of the Treasury that many payroll schemes will be established and that that will be facilitated by the establishment of a large number of agencies approved by the Inland Revenue? Above all, I ask my hon. Friend for

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      an assurance that the Treasury will take steps to ensure that the Inland Revenue does not unreasonably impede the establishment of such agencies.
      I commend my amendment to the Committee.
      Mr. Roger Freeman: The purpose of my amendment which is grouped with the amendment moved by my hon. Friend the Member for Suffolk, South (Mr. Yeo), is to probe the Government's reasons for the technical language in clause 26.
      The scheme is excellent and is warmly to be welcomed. I speak on behalf of many companies, not only in my constituency but nationally, which are enthusiastic about the scheme and will operate it with vigour. My amendment would enable the charities themselves to act as agents for the disbursement of contributions which have been collected by employers from employees, and I envisage that the charities, acting as disbursers of the funds, would perhaps keep a portion for their own charity, the charity designated by the employees, and, as agents, pass on to the other charities the remainder of the amounts collected. I would stress that under the provisions of this clause my amendment, if it proved acceptable, could be operated only with the agreement of the employer—because it is an enabling provision—the Inland Revenue.
      As I read the clause—I look forward to enlightment by my hon. Friend the Economic Secretary—it seems to restrict the agents through whom the amounts collected by employers are ultimately passed on to charities to bodies such as the Charities Aid Foundation, and seems to prevent charities such as those mentioned by the hon. Member for Suffolk, South from performing that task.
      The amendment is supported by Dr. Barnardo's, Save the Children Fund, Help the Aged and a number of other charities. It is important to recognise that some major charities already run collection schemes through company payrolls. The schemes work without tax relief and operate on a net basis rather than on the gross basis proposed by the Bill. Where these collection schemes are operating sensibly they should be allowed to continue. I understand that Dr. Barnardo's runs a payroll scheme for about 12,000 employers and raises about £2 million a year through them. I understand that it has operated the scheme for about 80 years. Save the Children Fund operates a payroll scheme for about 4,500 employers, raising about £500,000 a year, and has done so since 1948. Between those two charities alone, therefore, there are schemes already in existence on a net basis which cover perhaps 1 million employees. A considerable body of expertise has been built up in the operation of these schemes.
      There are three principles for testing the validity and acceptability, not only of my amendment, but of the clause as a whole. I believe that the clause as amended would meet all the tests. The first must be that a payroll deduction scheme is easy for the employer to administer. My hon. Friends the Members for Bristol, North-West (Mr. Stern), and for Corby (Mr. Powell) alluded to the administrative cost of the scheme, but in my conversations, both in my constituency and outside, I have found employers to be enthusiastic about the scheme and prepared to operate it, not only converting an existing net scheme to a gross scheme, but introducing new schemes. It is important, however, that the payroll deduction scheme should be easy to administer.
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      Under my amendment it would be up to the employer to decide whether he would use an agent, such as the Charities Aid Foundation, or an existing charity which had been collecting funds for a number of years under the companies payroll deduction scheme and passing on perhaps a portion of the amount collected to other charities. It would be up to the employer to select the easiest and simpliest route. Realistically, we must accept that there will be just one scheme operating in a company and that it will be a gross scheme.
      There should also be maximum freedom of choice for the employee. That already happens at present with deduction schemes. If the amendment were accepted there would be no change, because it would facilitate maximum choice by the employee when it came to asking his employer to decuct an amount, within the limit of the clause, and send it to the charity of his choice.
      Thirdly, I agree with my hon. Friend the hon. Member for Suffolk, South that we must encourage diversity of systems for colleting money for ultimate donation to charities. We should not have a single, uniform, monolithic system. Many new schemes will be set up under clause 26. I welcome the fact that amounts will be collected by the employers and paid over, for example, to the Charities Aid Foundation, but there are existing schemes run by the charities themselves, and where they have proved worth while there seems no reason to disturb them. In those circumstances, the clause should facilitate the continuation of existing schemes.
      Mr. Andrew Rowe (Mid Kent): My hon. Friend the Member for Kettering (Mr. Freeman) has raised in my mind a doubt that was not there before. As I understand it, the intention of the clause is to make it possible for employees to vary the charity to which they pay if the scheme is similar to those run by the Charities Aid Foundation at present. Just because a scheme is running, this should not prevent the employee from choosing the charity to which, out of many, he would like his money sent.
      I should like to reinforce the point that there are enormous dangers in having a limited number of agents. There are even greater dangers in having only one. One of the serious disadvantages of the American system of philanthropy is that it is very often possible for United Way and similar organisations to exclude from the disbursement of money raised through their efforts charities of which they, the organisers, disapprove. This had made it much harder for innovative charities to get off the ground in the United States than is good for the cause of charity. Those charitable organisations which have long experience of running these schemes should be encouraged to continue to do so.
      The Charity Commission does extraordinarily good work in antediluvian circumstances. If we had a properly equipped Charity Commission, it would be quite easy to make administrative distinctions between, for example, charities which were deemed capable, either through experience or other means, of running schemes of this kind and those which were not. I very much hope that we will see a time then the Charity Commission comes into the 20th century and has a computer.
      Mr. Stern: Perhaps I may contribute a word of caution to this remarkably unanimous debate. I was most impressed by the comments of my hon. Friend the Member

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      for Suffolk, South (Mr. Yeo) when he referred to the need for this amendment as something which would facilitate local agencies. I think particularly of large companies in my own constituency, such as British Aerospace or Rolls-Royce, which would much prefer to approach a local rather than a national agency.
      It seems to me—this point has not come out in my hon. Friend's comments—that a great advantage of this particular clause will be its encouragement not of the big national charities but of the small local ones—those which have neither the muscle nor the expense money to go in for big national campaigns—which will find through local employers a ready access to additional funding which was previously denied to them by the big battalions.
      On that basis I am a little worried by the suggestion that some of the larger national charities should be confirmed as agencies. I am not wholly set against the idea, and I look forward to the comments of my hon. Friend the Economic Secretary when he replies. However, there are two potential disadvantages. First, in selecting the charity to receive a donation, many employees will take the easy way out. If the agency on every letterhead in relation to the payroll deduction scheme happens to be Barnardo's, there is at least a danger of a boost to the agency charity at the expense of many local charities which could well expect to benefit from a local scheme.
      If existing charities are encouraged to set up agencies—I hope that they will be, because they have considerable expertise in the area—they should do so only on the basis of setting up an agency which is separate from the charity concerned so that the possible advantage of the name of the charity would not appear in the name of the agency.
      I hope that whatever administrative arrangements are made, it will be borne in mind that the employer will also incur costs. Even where payroll deduction schemes are in operation or are to be adapted, there should be no pressure on the employer to go to more than one agent simply because of his employees' choice of charities.
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      Mr. Roger Sims: Several charities have been mentioned as supporting the amendment of my hon. Friend the Member for Kettering (Mr. Freeman). May I add to them by mentioning one of the big battalions, the National Society for the Prevention of Cruelty to Children, which which I am closely associated. The society is worried about the possibility that the agents mentioned in the clause may be restricted to one or very few organisations, because that could have several effects. One would be to remove a charity's freedom to market itself. Another would be to remove the freedom of companies to back a charity of their choice.
      My hon. Friend the Member for Suffolk, South (Mr. Yeo) envisaged a local initiative. In fact, that already happens on a national basis. For example, boards of directors of companies may decide to back a particular charity by saying that they will match pound for pound anything that their employees are prepared to give that charity. To go through an agency in the way that is envisaged would not be compatible with such a scheme.
      Presumably, the Charities Aid Foundation would make some sort of charge, as indeed might any agency. Different
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      agencies may have different fees. If the giving has to be channeled through only one or two specified agencies, the amount that a charity finally receives may be that much less.
      It could be argued that my hon. Friend's amendment will result in a proliferation of agencies because, according to the book, there are literally thousands of charities. But we are probably talking, at most, of the top 200 in the CAF list and perhaps a handful of local charities. It would be feasible for some charities to get together, along the lines already suggested, and act as an agency. That would not necessarily have the effect envisaged by my hon. Friend the Member for Bristol, North-West (Mr. Stern).
      I hope that my hon. Friend the Economic Secretary will consider that seriously. If he is not at this stage prepared to accept the amendment, I hope that he will at least give some further thought to the ideas that have been put forward, with a view to amending the final scheme so that the agents can be drawn from a fairly wide spectrum.
      Mr. Blair: The regulations that the Government will promulgate will tell us a great deal more than the Bill, but we should have some clear idea of the Government's concept of how the scheme will operate. Will it simply embrace a few charitable collecting agencies or have a much broader scope, or are the Government simply willing to let it run and see what happens? We need to know that, because many charities have expressed concern that they may be unduly limited if they are not also allowed to act as agents.
      I have doubts about some of the points made by the hon. Member for Suffolk. South (Mr. Yeo). At present, the employer will deduct the money and pay it to the agent who will give it to the charity. Whereas the employer will arrange for the agency, for which there will be board approval, the employee will simply tell the employer the amount to be deducted and the employee will presumably nominate to the agent the charities to which he wishes to give.
      One desirable advantage of that scheme is its administrative simplicity for the employer who has one agent for all the employees. Secondly, there is a notion of confidentiality between the employee and the agent about the charities to which he wishes to give. I do not know whether that does or could happen but an employer may want to foist a pet charity on his employees who may then feel in some way constrained if they have to give to a charity that is an agent. The notion of confidentiality is important.
      Thirdly, where as the large charities may want to act as agents, many of the smaller charities could lose out. It would be unfortunate if some of the smaller charities were eased out of the competition by the larger charities. The disadvantage of the scheme as presently envisaged is that Dr. Barnardo's and other charities already have a payroll scheme without tax relief, so why should not they continue to do so? There are also charities—my hon. Friend the Member for Eccles (Mr. Carter-Jones) asked me to mention MENCAP in this connection—that do not operate such a scheme but may want to do so, so why shouldn't they?
      I want to make two points to the Economic Secretary but I shall keep an open mind until he replies. First, is there anything in the provisions to prevent a charity from setting up an agency with the same effect as the amendment? Secondly, is not an important facet of this that we have to

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      decide whether, if charities are to be allowed to act as collecting agents, they can simply collect for themselves as agents or whether they have to collect as agents in the proper sense of the term and distribute not merely to themselves but to any other charities that an employee may want to mention?
      Both those points are important in terms of how the Government see the scheme operating. It would only be acceptable—I notice that the hon. Member for Kettering (Mr. Freeman) made the same assumption—for charities to act as agents if they acted properly as agents and were not simply collecting on their own behalf. Even then it would obviously be in their interests that more rather than less money sticks to their fingers as it passes through their hands. I should be obliged if the Minister would give us some information or enlarge our understanding of the exact role which the Government envisage for agents. Will there be many or few agents? If a charity is allowed to become an agent, will donations be confined to that charity or will they he spread over several charities?
      Mr. Ian Stewart: Our relatively short debate on the two linked amendments gave some of my hon. Friends the opportunity to propose ideas—sometimes conflicting ideas—that we must take into account before the arrangements for the agencies are finalised. I welcome the sensible contribution of the hon. Member for Sedgefield (Mr. Blair), who asked some questions which have been in our minds and which, like those of my hon. Friends, must be considered before the schemes and the agencies are set up.
      My hon. Friend the Member for Suffolk, South (Mr. Yeo) hoped that there would be no limitation on the number of companies or agencies taking part out of consideration for the convenience of the Inland Revenue. We do not intend that administrative convenience should limit the number of agencies. We are anxious that as many companies as possible should take part in the scheme and that there should be a range of choices for them in the agencies that they select. I do not exclude the idea of local or regional agencies, so long as they are willing, if requested by participants in that scheme, to make payments to any charity. In many cases, it would be sensible for the local interest to be represented through one agency, and I hope that will rise.
      My hon. Friend the Member for Mid-Kent (Mr. Rowe) said that there could be dangers in establishing only a few agencies. The Government will not specify the number of agencies because the scheme must not be operated by administrative instruction from the Government. It should develop according to the needs and interests of the people taking part. There should be no bar on existing charities acting as agents, provided that they act fairly and without bias as agents for any charity that may wish to be nominated.
      The specific points raised in the amendments are of some interest. Amendment No. 5 refers to the Board of Inland Revenue unreasonably witholding approval of a scheme. Clause 26 already sets out the basic conditions of relief. Clause 27, which is the more technical clause, provides for the Treasury to make regulations governing the grant or withdrawal of approval of schemes by the board. That should enable us to set out the more detailed conditions of approval in the regulations. It will be necessary to ensure that, once the donations have been deducted from the employee's pay and received their tax
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      relief, they cannot be returned to the employee and that they are paid over to the agency for the charities within a reasonable time. We shall wish to embody several such practical considerations in the regulations.
      The board's main function in considering schemes for approval will then be to see whether the scheme meets the requirements laid down by the legislation and regulations. Although this point is rather more appropriate to clause 27 than to clause 26, I assure my hon. Friend the Member for Suffolk, South that the board will not withhold approval from schemes without good reason. In any event, a charity could look to the courts for effective redress under existing administrative law. No doubt it would be a cumbersome process, but if in any case the board acted unreasonably, it would be exposed to redress in that way. It is not necessary to amend the Bill in the way that my hon. Friend suggests, but if, on reflection, he wishes to raise the matter again, it may be in order to do so when the Committee considers clause 27. As that will not be for a few weeks, there will be more time to consider the points raised.
      My hon. Friend the Member for Kettering (Mr. Freeman) said that the scheme should be easy and give maximum freedom of choice for the employee. That is right. We do not wish to compel employers, employees or charities to do the Government's bidding. We wish to encourage diversity. Amendment No. 7 deals with a matter that has already been mentioned by Dr. Barnado's, Help the Aged, Save the Children Fund and other larger charities. Perhaps I can outline our approach to the matter.
      8.15 pm
      One condition for tax relief for charitable donations under the new payroll scheme is that the donations should be paid over by the employer to an agency which will distribute them to the charities to which the employees wish them to go. Using agencies in that way has several practical advantages. It makes the scheme easier for the employer to run, because he will not need to make separate payments to individual charities to which employees wish to make donations, nor to check that they are properly registered charities. Instead, the agency would act as a clearing house. Some charities which already run payroll deduction schemes with employers have been rather worried about this. Their fear is that, as the clause stands, their schemes might have to operate through an independent agency if the participants are to get tax relief. At the same time, however, it is important that the employee should be able to use the scheme to make his donations to any charity he wishes. He should not be limited to one charity with which the employer already has a deduction scheme.
      Therefore, our aim is to give all charities a fair chance to benefit from the scheme. Large national charities, although important and deserving, should not be allowed to squeeze out smaller local charities. If a charity such as Dr. Barnado's or Save the Children Fund wishes to fulfil the agency role and pass on donations to other charities at the employees' request, as well as collecting donations for itself, there is no objection in principle to its doing so.
      I stress again that a charity which acts as an agency in that way would have to pass on donations to any charity to which the employees wish to give.
      I accept that the clause as it stands leaves some doubt whether an agency charity can collect donations to itself at the same time as donations to others. We shall reconsider the drafting of the clause and, if necessary

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      introduce an amendment to clause 26 on Report. If the matter can be dealt with under clause 27, we can table amendments in Committee.
      I hope that my hon. Friend will accept that assurance and that the Committee will accept that the Government take into account many of the worries and interests that have been expressed. We hope that they can be taken into consideration when the rules and regulations are formulated.
      Mr. Yeo: I welcome my hon. Friend's assurances, especially his clarification of the Government's view that it will be desirable to establish a fair number of agencies. I also welcome the possibility of local and regional agencies. The concessions will probably enable funds to flow into local and regional organisations. I am fairly optimistic that, because of the importance of personal contact between the charity and the donors, there will be opportunities for local organisations to benefit.
      The only discouraging aspect of my hon. Friend's remarks was the suggestion that it may take some weeks for the Committee to reach clause 27. I had hoped that progress would be such that we would reach it very quickly.
      I beg to ask leave to withdraw the amendment.
      Amendment, by leave, withdrawn.
      Question proposed, That the clause stand part of the Bill.
      Mr. Blair: I must confess that one extraordinary fact that became clear when I studied the matter in detail was the sheer scale of the voluntary sector. For example, there are 150,000 different charities, with an estimated income of between £8 billion and £10 billion a year. That covers income not only from gifts but from grants, fees and other earnings. It is an enormous sector, which receives grants of £350 million a year from local authorities and £180 million a year from Government Departments. Quangos such as the Manpower Services Commission also contribute in total as much as £2 billion a year.
      Estimates of individual giving are uncertain, but the Charities Aid Foundation estimates that it could be about £500 million to £700 million a year, to which must be added gifts from companies. We are discussing a vast business. The payroll provision being introduced in clause 26 will increase the income of charities by another £20 million, which is about 0·2 per cent. of their income. I do not cavil at that, because any increase is welcome, but it is a measure of the voluntary sector that it has such a large income.
      As I have already made clear, we welcome these measures. However, we seek one or two assurances from the Government. The first is that these measures should increase the resources of charities and should not be simply a transfer of burden from the state sector to the voluntary sector. These measures should complement state provision, not be a substitute for it.
      Secondly, we want to be sure that we are increasing the revenue of those charities which pursue genuine charitable objects, and not those which have less to do with charity and more to do with narrow self-interest. We seek an assurance that it is no part of the Government's intention to reduce financial aid to the voluntary sector. If that
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      assurance is given now, I shall leave the matter there. The Minister is nodding, so I take that he is giving me that assurance.
      I may have misunderstood what the Financial Times quoted the Financial Secretary as saying during a meeting organised by the Charities Aid Foundation:
      "We prefer that responsibility should rest with the individual, so that the state is involved only where it needs to be."
      If that means that individuals should pursue self-help and not be beneficiaries of state help, I accept that that is an old Conservative canard with which I am happy to live. However, if it means——
      Mrs. Elaine Kellett-Bowman: Why canard?
      Mr. Blair: If the hon. Lady wishes to intervene, I shall give way. I see no reason to answer sedentary interventions.
      Mrs. Kellett-Bowman: Why does the hon. Gentleman refer to a canard?
      Mr. Blair: We believe that self-help would be greatly assisted if there was proper state provision, and that state provision and self-help go hand in hand.
      If the Financial Secretary meant that the beneficiaries of state help should come within the voluntary sector in addition to being state beneficiaries, we are happy to live with that. However, if he meant that the donors should be individuals rather than the state, so that the responsibility for vital services is transferred from the state to the voluntary sector, that is a novel and unacceptable proposition. I see the Minister shaking his head, and I take it that he is giving me the assurance that I seek on that point.
      One aspect that has concerned many people has arisen partly because of the cuts in local authority funding and partly from the publication by the Office of Health Economics of a document entitled "Crisis in Research". This document shows how much medical research has become dependent upon charities, and that charities are increasingly becoming a substitute for proper state provision. I very much hope that those are only straws in the wind. We talk of and argue about privatisation, but voluntarisation, as it is now called, is a novel proposition and it would be wrong to introduce it under the guise of increased Exchequer generosity to charities.
      Mr. William Cash: The hon. Gentleman may be interested to know that a charity is starting up in my constituency because a school that was closed by the Labour county council needs to continue for the sake of children who are suffering from child abuse——
      The Chairman: Order. I hope that the hon. Gentleman will stick to the terms of the clause that the Committee is discussing.
      Mr. Blair: We wish to ensure that charities are not being given something with one hand and having it taken away with the other.
      I very much welcome the Economic Secretary's assurance that the Government will carefully consider representations about their anti-avoidance provisions, which arise under clause 29. I appreciate that we will debate those provisions in much greater detail in Committee, but they affect clause 26 because payroll

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      deductions will be made only in respect of charities that qualify. The measures may cause more problems than they solve.
      I wish to make it clear that we fully support the objective of stamping out bogus charities, and we accept the need for anti-avoidance provisions. We are concerned that desirable objectives may be undesirably attained; the purpose is right, but the means of achieving it could cause many problems. I ask the Government to reconsider their proposals well in advance of the detailed debate that we will have in Committee.
      I have formed a view—although I am happy to listen to anything that the Economic Secretary says—that those provisions may catch many innocent charities and fail to catch the guilty. They focus on the method of operation of charities, not on whether charitable objectives are being pursued. There is some confusion about whether the measures are proper anti-avoidance provisions, or whether they are an attempt to redefine charities with bona fide objectives and those without them.
      The Opposition would be happy to open up the debate on what are or are not bona fide objectives. Indeed, many people cannot understand why tax relief is given to private schools that charge fees, or why the taxpayer should subsidise those institutions of privilege. In introducing anti-avoidance provisions the Government have opened up the debate on what are or are not deserving charities. I ask the Government to remember that when we question what should or should not be considered bona fide charities.
      We welcome clause 26. We are pleased with the assurance that this is not part of a desire by the Government to shift responsibility for the proper provision of services from the state to the voluntary sector. We shall monitor the situation carefully. I hope that the Economic Secretary will repeat the assurance he has given that the Government will carefully consider the representations about the anti-avoidance provision. It would be a tragedy if a measure which is basically welcomed by charities ended up causing as many problems as it solved.
      8.30 pm
      Mr. Andrew Rowe: I welcome the clause and all that it means for charities. I hope that one of the consequences of it will be to widen enormously the interest that employees take in charities.
      One of the most useful functions would be to encourage people who give to charity to take an increasing interest in the way in which the charity discharges its responsibilities. The payroll giving will encourage groups to form in the workplace, and those groups may become activists—shareholders—in the charity's performance. That will go some way towards ensuring that the administrative costs do not run out of control and that those who donate approve of the functions that the charity performs. At present there are too many charities still run by a small group of people, often in a traditional way. The functions of the charity are not clearly known by the people who subscribe to it.
      I agree with the hon. Member for Sedgefield (Mr. Blair) that we should do everything in our power to remove any abuse of charitable status. The clause will increase the awareness of any possible abuse. In time it will reduce the need for some charities to depend so heavily on central and local government money. The terrible weakness of depending on the state sector—central Government are
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      notable offenders—is that it tends to give its annual grants too late in the year. This makes it extremely difficult for charities to forecast exactly what their income will be. Anything that will make it easier for charities to be independent of state handouts should be welcomed.
      Mr. Austin Mitchell: I welcome the clause, although not for the same reasons as the hon. Member for Mid-Kent (Mr. Rowe).
      The consequences of the clause will be to turn charities much more into business organisations. They will go away from the old, somewhat fuddy-duddy but caring, important role of charities, run on a voluntary, almost casual basis. This allowed people to get involved without expertise, and that was healthy. The clause will professionalise charities. There will be a much more professional means of tapping money, and donations will be made out of salaries.
      We want to consider carefully what is meant by a charity. We should carefully consider what areas are appropriate for charitable activities. Public schools are regarded as charities, but I do not think that the clause will help them because, with present public school fees, it will not enable pupils to buy a packet of crisps. The fact that public schools are regarded as charities suggests a need to review what is a charity. Such a review will be carried out by the Labour Government and it will take away the charitable status of bodies such as public schools.
      Mr. Rowe: Did the hon. Gentleman see the report today that it is cheaper to keep a child at a fee-paying school than at some Inner London education authority schools?
      Mr. Mitchell: It is cheaper to keep a child in prison than at a fee-paying school, but that does not say anything about the advantages of either institution.
      Given the scale of fees, the privilege of keeping children at public schools is one accorded to a narrow, wealthy section of this society. It is wrong that such schools should have the backing of charitable status. It is wrong to subsidise the education of the children at these schools at the expense of the rest of us.
      The charitable sector is active and dynamic. Grimsby is a classic example of a centre of thriving charitable activity and endeavour. Such a centre needs the help provided by the clause. It is welcome and should have been implemented some time ago. The clause will enable our charities to operate on similar lines to the American pattern for charitable donations. It will allow those donations to be made with ease and convenience, which I welcome.
      I cannot help being suspicious, not of Greeks bearing gifts, but of Spartans bearing gifts. The Government's attitude to the welfare state is Spartan. When I consider the clause in the context of the other things that the Government have done to undermine the welfare state, it makes me a mite suspicious. The clause, though it is welcome, important and benign, may be the preparation for shifting the burden of caring and concern from the public sector on to the voluntary charitable sector. The Government can rush forward and state what wonderful things they have done for charity and then state that they will carry further the process of cuts on which they have been engaged for so long.
      My hon. Friend the Member for Sedgefield (Mr. Blair) asked whether this was the prelude to a further trimming

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      of the welfare state. I share his suspicion. It is essential that there is basic state provision in a whole range of areas, not just in traditional areas, but where the voluntary charitable sector has been least effective in alleviating the problems.
      The clause will tend to channel money to efficient, well-organised middle-class charities rather than to those which are concerned with the problems of poverty and housing neglect. I do not wish the concentration of charitable activity to be at the expense of the state sector. The Government have cut back in a shameful, shabby, cheese-paring and mean way. Throughout the seven years of Conservative Government the local authorities have been undermined by penalties and by cuts in rate support grant. Now that the Government are supporting the voluntary sector and charitable organisations, we are bound to be a little suspicious of their motives.
      I welcome the clause with those reservations. It is a step towards stimulating and supporting a living, loving, caring and altruistic sector of society which makes life better for many people. Charities provide a range of care and concern which are best summed up as Socialism in action, and that is well deserving of help.
      Mr. Cash: I welcome the clause. I am sure that my right hon. Friend the Financial Secretary to the Treasury will not mind if I refer to his excellent speech on 1 May at the Charities Aid Foundation conference. My right hon. Friend set out the philosophy which underpins this provision. His speech gave a clear explanation of its objectives and in a far more eloquent manner than I could.
      I am concerned about some of the remarks made by Opposition Members. I detected a certain amount of criticism for voluntarisation, but that is what lies at the root of charitable giving. It is important that employees should be involved. It is obvious that the state has an important role to play, but voluntary giving is the essence of community giving and the loving and caring to which the hon. Member for Great Grimsby (Mr. Mitchell) referred.
      I hope that Opposition Members are careful not to denigrate the voluntary aspect of giving, because there was the slightest suggestion of that tonight.
      Mr. Nick Raynsford: I declare an interest. I have worked for a charity for the past 14 years and I am continuing, albeit in a part-time and temporary role, as its employee.
      I welcome clause 26, but I should like to reinforce the anxieties expressed by my hon. Friends the Members for Sedgefield (Mr. Blair) and for Great Grimsby (Mr. Mitchell) about voluntary giving not being seen as an alternative to support from the public sector. I find it a slightly unfortunate coincidence that we are considering the clause when many voluntary organisations are threatened with the loss of staff, or even closure, because of the abolition of the Greater London council and the metropolitan county councils and the restrictions on local authority expenditure.
      In my constituency, I have examples of well respected voluntary organisations—such as Age Concern, the unemployed workers centre, and the law centre, which have done exceptionally good work—which are all at risk of redundancies or closure because of inadequate support from the public sector. Lest it be suggested that public sector support is not healthy for voluntary
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      organisations, the Committee should be aware of an article in this week's New Society, which discusses the matter in some detail and which is based on a study funded by the Home Office and published by the Policy Studies Institute.
      According to the article, the study considered what effect statutory grant aid has on the number of paid staff employed, whether it affects the level of voluntary involvement and how it changes the amount of funding obtained from other sources. The evidence is perhaps surprising. It suggests that, far from undermining voluntarism, statutory grant aid has a multiplier effect, which the article identifies. It was found that statutory grant aid led to a greater capacity to obtain more resources from other sources, that it expanded capacity so that the organisation was able to acquire and do more, and that it created a climate of general support for the voluntary sector, which produced a great deal more voluntary activity.
      The study compares two areas. The article stated:
      "The effects of local government grant aid on an organisation's ability to acquire other resources are nicely illustrated in one example of two local Age Concern organisations: one is in an authority which gives relatively little in grant aid to the voluntary sector in general and similarly little to the local Age Concern; the other receives substantially more grant aid from a relatively generous authority."
      Nothing is said about the political complexion of the two authorities, but hon. Members will be aware that more generous support is generally afforded by Labour-controlled authorities, whereas more sparse support is generally given by Conservative-controlled authorities.
      The article continues:
      "The low-funded Age Concern employs three full-time and three part-time workers and involves volunteers giving an estimated 1,000 hours per week … The higher-funded Age Concern employs six full-time and four pan-time workers and involves volunteers who give an estimated 3.000 hours per week."
      In other words, three times the level of voluntary activity is stimulated by local government generosity to the voluntary sector. It is therefore important to be aware of the stimulating effect of generous public sector support on voluntary initiative and the debilitating effect that reliance on purely voluntary donations can have.
      8.45 pm
      A substantial number of voluntary organisations are not popular. They do not pursue causes which the public want to support. Indeed, many of them help some of the most unpopular groups in society, such as drug addicts, alcoholics and others who do not engender support and sympathy. Some public sector support for such organisations is vital to maintain their work.
      Dr. M. S. Miller: Such a psychological phenomenon is well known. Those who help organisations which are doing good stimulate and encourage them. There is no reason to suppose that assistance dampens an organisation's enthusiasm—quite the reverse.
      Mr. Raynsford: I entirely agree. If Conservative Members extend the parallel to economic matters, they will appreciate that a little stimulus and encouragement of the economy can produce considerable benefits, as many of us argue.
      It is important to remember that a healthy voluntary sector meets a range of needs not just popular needs, and ensures proper provision. It depends on generous support from individuals, private donors and the public sector. It

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      would be very sad if the clause were seen to be part of a process of continuing restrictions on public sector grants to voluntary organisations or as a process of transferring support from public to private sources.
      Mr. Yeo: I shall not attempt to follow the hon. Member for Fulham (Mr. Raynsford) in his wide-ranging choice of subjects, but I find it rather surprising that, in a debate on a clause which is universally agreed to be likely to stimulate private giving, we have to listen to a lot of moans about organisations that run out of funds presumably because they cannot attract such giving.
      I was also sorry to hear the hon. Member for Great Grimsby (Mr. Mitchell) trying to suggest that there is some conflict between an efficiently run organisation and a caring organisation. I believe that any organisation that is truly caring must care about the efficiency with which it uses its resoures. That is why I was so delighted by what my hon. Friend the Member for Mid-Kent (Mr. Rowe) said. If the clause leads to greater scrutiny by donors and the public of how funds are used, it is to be welcomed, to say nothing of its ability to stimulate private donations.
      The hon. Member for Sedgefield (Mr. Blair) mentioned the 150,000 charities. I should just like to remind the Committee that there is a larger, but unknown, number of charitable organisations. The 150,000 is roughly the number of registrations issued by the Charity Commission, but there are many unregistered charities which will enjoy the tax benefits of the Finance Bill.
      Nobody—not even the Charity Commission—knows how many charities there are in Britain. Indeed, some of the Charity Commission's numbers have been issued to charities that are now defunct, as it will admit if pressed. We have an estimate—£10 billion is a popularly used figure—of the charitable sector's income, but it is only the most vague guesstimate because the requirement for charities to file their accounts is not enforced. We therefore do not have access to the accounts of many charities which enjoy what is effectively a public subsidy through tax concessions.
      There is not even a requirement on some charities to file accounts, to say nothing of the fact that such a requirement would be ignored. I hope that my hon. Friend the Economic Secretary and his colleagues will, in view of the prominence that charities have been given in the Bill, persuade their Home Office colleagues to see whether we can improve the accountability of charitable organisations. The more that we grant tax concessions—I welcome them—the more necessary and desirable it becomes to give the public proper information about how the concessions are being used.
      My second and last point concerns the comment about voluntarisation, which came in the same breath as privatisation. I think it was acknowledged by the hon. Member for Sedgefield that assurances were given from the Conservative Benches that it was not the intention of the Government to use greater private funding of charities as a reason for cutting basic state provision in areas where the state has an obligation to fund. However, I believe that it is important to recognise that there is a form of voluntarisation which is in everybody's interest.
      Many organisations provide services on an agency basis for the state. To give as one example the education of handicapped children, many special schools in the country are run with great expertise and efficiency by voluntary organisations. In my view, it is positively desirable that we
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      should encourage more voluntary organisations to provide such services on an agency and competitive basis. There is no merit in saying that all handicapped children who go to a special school should go to a school that is run by a local education authority. There is every advantage in saying that we should have a great plurality and diversity of provision of special education and all sorts of other functions, some by local authorities, some by health authorities, some by education authorities and some by voluntary organisations. If, by encouraging private donations in the voluntary sector, we encourage innovation in the voluntary sector, we will find that this diversity and the plural approach will be promoted.
      Mr. Cash: Will my hon. Friend accept that Henchurch special school in my constituency was closed by the Labour county council and we had to go along the very route that he advocated, which I thoroughly applaud?
      Mr. Yeo: I am most interested in the very important point raised by my hon. Friend.
      The question that I want to ask the Opposition is whether they endorse the process of encouraging voluntary organisations to provide services that will be funded by sponsorship from state authorities, or whether they are opposed to the growth of voluntary activity in that way.
      Mr. Blair: May I make it absolutely clear, if it has not been made clear already—I should have thought that it had been—that we do not in any way oppose voluntary organisations providing these facilities. What we oppose is the state reducing its commitment in order to allow the voluntary organisations to do the state's work for it. If the two grow in tandem, that is excellent. If there is plurality, that is excellent. What there should not be—this is what voluntarisation means—is voluntarisation in the sense that the state reduces its burden and shifts it on to ordinary members of the public.
      Mr. Yeo: I am delighted that the hon. Gentleman has given that assurance. I therefore hope that, when schools are being closed by education authorities because they are voluntary organisations providing education that will receive the full backing of Labour party members in the House and in local authorities throughout the country.
      Mr. David Penhaligon: I believe this to be one of the best clauses of a Finance Bill that Parliament has had the chance to consider for some time. There is no doubt that those who should take the credit are those who have been involved in the long-running campaign to get some relief for charities against the doubling of VAT on their expenditure in 1979. For all that, one regards this as a most welcome addition to the legislation, and I congratulate the Government and Ministers on it.
      I think that criticism is not right at this moment. It is fair to say, when the argument against state provision and voluntary provision is taken into consideration, that some charities take enormous pride in their independence. In a peculiar way, the greatest insult that any Government could give to such charities would be to suggest that they, the Government, should take over a part of the assistance. I know this well from my own locality in regard to one of the more remarkable voluntary services in the country, that provided by the lifeboat men. This service often calls upon the individual concerned to make the ultimate charity donation to the well-being of his fellow human beings, as it is not unknown for lifeboat men to give their own lives,

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      yet their fierce independence of Government provision goes back way beyond this Government, the last Government or the Government before that.
      I believe that this may well encourage charities to make provision in addition to the provision that is made by the state. If there is any hint that the Government are hoping to make a reduction in certain areas because of the clause, I suspect that they are in for a disappointment in any case. I suspect that the sums involved relative to the provision of care for the mass of people in Britain are very small.
      For all that, I think that there will be new and fresh ideas, and that public opinion will be given a new freedom to influence events and developments because of the clause. It will be possible to express ideas which Governments may well be forced to follow, because it will have been demonstrated that in particular areas of care these ideas have been successful. It is not difficult to think of examples. There is, for instance, the hospice movement, which was started in the charity area.
      I have no criticism to make of the clause, and I congratulate the Government on introducing it. It is not inconceivable that at some time in the future we may wish to change it a little. Sometimes clauses to Finance Bills have effects other than those originally intended which cannot be imagined by anybody at the time. This can be looked at as the years go by. I hope that the charities will find this effective in increasing their income and that the public will use this new freedom to show the care that I know they have in the development of new ideas. I therefore add the wholehearted approval of the alliance Benches of the clause.
      Mr. Alan Howarth (Straftord-on-Avon): I was encouraged to hear my hon. Friend the Economic Secretary to the Treasury tell the Committee that if clause 26 works as he hopes it will do it will encourage a wide diversity of charitable giving. That theme has been echoed by other hon. Members on both sides of the House, particularly by my hon. Friend the Member for Suffolk, South (Mr. Yeo).
      I was not particularly surprised, but I was concerned to hear the reaffirmation from the Opposition, notably in the speech of the hon. Member for Great Grimsby (Mr. Mitchell), of the intention of the Labour party, if it has the opportunity, to introduce a statutory definition of what is a charity and what are appropriate charitable objects. I understand their argument about abuse. We are agreed, I think, that it is important to find practical ways to tackle abuse.
      The hon. Member for Sedgefield (Mr. Blair) was right to say that the problems of definition are relevant to the working of clause 26, because if clause 29 creates the sort of collateral damage, if I may use that phrase, which many people, including myself, fear, this in turn will impact unfavourably on the operation of clause 26 because people will be unwilling to give if they cannot be assured that tax relief will be available in respect of the charities they wish to support.
      We are concerned to find practical ways to tackle the problem of abuse. It will be no surprise to the Committee, however, if I say that I would be most reluctant to see the Labour party abolishing the charitable status of independent schools. That is an argument which it is entitled to put forward and a point of view that one
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      understands. However, it would, in my view, be using a rather heavy blunderbuss and it would be in danger of creating more collateral damage than it would wish to do if it were to set off down the road of trying to achieve a statutory definition of what is a charity. I hope that when the Government come under pressure, which they are now experiencing, and of their own volition come properly to tackle abuse, they will resist the temptation to try to achieve a statutory definition of what is a legitimate or proper charitable activity. That has never been done in our history.
      The Elizabethan Statute of Uses did not define charities. The preamble to the Statute of Uses, in sonorous Elizabethan language, sets out and itemises a list of individual charitable activities and provides examples or cases of what is charitable activity or what are charitable objects. They are instances that were pertinent to those days, and the circumstances that applied then—the help or relief then needed—perhaps no longer apply.
      There are some rather quaint items in the preamble. We no longer think that it is a proper role of charities to engage in building bridges — at least in a literal or physical sense. We no longer see it as a major role of charities to find endowments for spinsters. However, it is my recollection that both instances are set out in the preamble to the Elizabethan Statute of Uses.
      The history of charitable giving and charitable practice in Britain has evolved in case law. There have been no attempts fully to define in statute what is charitable. There have been important judgments—for example, those of Lord McNaghten in the previous century and, much more recently, certain obiter dicta of Lord Hailsham—and these have reinforced the tradition of there not being a statutory definition.
      9 pm
      The great strength and value of the charitable movement has been in its diversity and innovative quality and its capacity to identify new circumstances where charitable giving is needed urgently and would be valued. The virtue of charities, in my judgment, in our contemporary circumstances is that they should complement the welfare state. I accept the arguments advanced by the hon. Member for Fulham (Mr. Raynsford). Charities can be complementary to the welfare state in the sense that they have a flexible, innovative and creative quality. They are able to work with much greater precision and much greater speed of response than the relatively cumbersome, broad-brush approach of statutory organisations. Both charities and statutory organisations are needed, and both should work in fashions that are complementary to each other.
      I commend to Opposition Members a wise remark that was made by Lord Goodman. Of course, the Labour party changes, and it may be that what Lord Goodman says is no longer viewed so forcibly, but he remarked in his study of charities that
      "to define is to confine."
      I think that we have all been anxious to ensure that the clauses that relate to charities should be such as to encourage a new flowering and greater diversity of charitable activity. Therefore, I counsel great caution in attempting a definition, even with a worthwhile purpose lying behind it, for
      "to define is to confine."
      It would be a shame if legislation and policy which would be met with considerable sympathy in all parts of the

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      House of Commons were to end up in a limiting definition. I am confident that that will not be the upshot of the Governments legislative activity. However, I was nervous when I heard the hon. Member for Great Grimsby (Mr. Mitchell), and for that reason I decided to contribute to the debate.
      Mr. Ian Stewart: I wish to say plainly that I welcome the uncomplicated way in which the Member for Truro (Mr. Penhaligon) spoke about the clause. It is an important step forward in the provision of resources for charities and I hope, like the hon. Gentleman, that it will have stimulated people's imagination about carrying out charitable causes which they might have felt were impossible because of lack of resources. I hope that the clause will enable them to see their way to undertaking those clauses. In that sense the clause could have a creative contribution as well as an additional one to existing charitable activities as they are now conducted.
      I hope that no Opposition Members are surprised that the Government should introduce such a clause, or the package of measures which were announced in the Budget. The Government have done more to help charities than any previous Administration. Direct support for the latest year amounts to over £200 million, which is more than double the 1979 figure. That represents a substantial increase in real terms even after account has been taken of inflation. We have maintained and increased Government support. I can assure the hon. Member for Sedgefield (Mr. Blair) and others that the measures that we are introducing are not at all prejudicial to funds made available for public service provision. They are additional, and I hope that in many cases they will be complementary.
      The package introduced this year is the most substantial package of measures to help charities to have been included in a single Budget. It marks a further step in the process that we have tried to develop during the past few years in order to improve tax relief for giving. In 1980, we reduced the minimum period for charitable covenants that qualified for tax relief from seven to four years. We also introduced the higher rate income tax relief for charitable covenants, originally with a £3,000 limit. In 1983, that limit was increased to £5,000 and in 1985 it was increased to £10,000. It is now to be removed. Charities generally welcomed those moves, and I think that it is a measure of their success that new charitable deeds of covenant seen by the Inland Revenue increased from just under 600,000 to 1980 to 830,000 in 1985. Tax repayments to charities increased by about 85 per cent. during those years.
      We have also introduced several other measures to encourage the flow of funds from the private sector to voluntary organisations. We removed the limit for capital transfer tax exemption for gifts to charities within one year of death, so freeing gifts and legacies to charities completely from capital transfer tax. We exempted charities from development land tax, before the tax itself was abolished last year. Exemption from stamp duty was introduced on charitable covenants, and on conveyances and transfer of property of all kinds to a charity. In 1983, we introduced tax relief for an employee's salary costs met by an employer during a period of secondment to a charity. All those changes, together with the changes in the Budget and the payroll scheme in clause 26, helped charities in their different ways.
      This year's package includes, of course, arrangements for on-off gifts by companies up to the equivalent of 3 per
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      cent. of their annual dividend. It includes some extension of VAT relief in respect of talking books for the blind, the dress allowance for the handicapped, medicinal products and some other items. But it is right that the debate should focus on the payroll scheme, because in many ways that is one of the most interesting and innovative measures to be introduced to help charities. I particularly appreciate the welcome given to it by hon. Members on both sides of the House.
      The hon. Member for Sedgefield alluded to the scale of the voluntary sector. The figures are very impressive. I understand that the annual income of charities is now in excess of £6 billion. The hon. Gentleman said that he thought that £20 million extra as a result of this provision represented a small sum. But we are talking about £20 million in tax relief and not £20 million as being the net effect for the charities. We hope that the figure will be three or four times bigger than that. That judgment is made solely on an assessment of how widely the scheme may be used in its initial stages. If it proves successful, we hope that it will be extended. The Treasury would be willing to see the cost in tax relief increased as the commitment to charitable support also increases.
      My right hon. Friend the Financial Secretary made a speech a few days ago in which he referred to the Government's approach to voluntary giving. Our philosophy is to stimulate charitable support. This measure is designed to that end. After the bit that has been quoted, my right hon. Friend said:
      "In the voluntary sector we see it in the action taken by voluntary organisations up and down the country in many areas of charitable work. Charities operating in a particular field or a particular local area are often better placed to know what the real needs are and how best to tackle them. Of course it isn't just a question of money, because many charities depend heavily on the unpaid voluntary work done by their supporters. But it must be healthy for charities to get their financial and practical support from members of the public and from businesses which take an interest in their work."
      That is complementary to the public provision. There is no question of one substituting for the other.
      The hon. Member for Sedgefield referred to the problems of abuse and anti-avoidance. Consultations are already under way on that subject. I say that for the benefit of my hon. Friend the Member for Stratford-on-Avon (Mr. Howarth) also. The questions of abuse concern financial abuse and not charitable objectives. Although the Treasury has many responsibilities, it does not have responsibility for the Charity Commission, or the whole question of charitable objectives. We are anxious that tax relief given to encourage contributions to charities should not be abused for non-charitable purposes. That is the aim of clause 29. Obviously, we shall have to look further at clause 29 in the light of the representations that have been made. I do not know whether the hon. Member for Stratford-on-Avon was in the Chamber earlier when I gave an assurance to that effect. However, it will be recorded in the Official Report.
      My hon. Friend the Member for Mid-Kent (Mr. Rowe) welcomed the fact that the clause would widen the interests of employees in charities generally. I am sure that that is right. It is important to encourage the voluntary sector. Giving creates a direct link and a direct interest in the activities that charities provide. That itself is important. If it leads, as my hon. Friend the Member for Suffolk, South (Mr. Yeo) said, to greater accountability, that will be welcome. As he said, in charitable

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      expenditure, as in any other, it is important to get value for money. One is not doing one's best by the people who provide the money if one does not use the money economically and in the best interests of those for whom it is provided.
      I do not want to enter into a long disquisition about voluntarisation. My view is that the best future for charities and public provision of a charitable and social nature is that, wherever possible, they should work in partnership. For a long time, I was treasurer of a charity on which I think the mother of the hon. Member for Fulham (Mr. Raynsford) served. I hope that I have not embarrassed him by saying that.
      Mr. Raynsford indicated dissent.
      Mr. Stewart: Perhaps I am wrong. However, it was a London-based charity. I am glad that the hon. Member for Fulham has taken part in this debate. I think that it was his first contribution to the Committee stage of a finance Bill. I am glad that we have considered the subject of charities. The hon. Member represents a borough in which the charity with which I was concerned was active.
      The welcome which has been given on all sides of the House reflects the fact that, through the payroll scheme, we hope that there will be opportunities for supporting local charities which are identifiable by the employees of local firms. It is important that the national charities carry out their work and that the major charities receive the funds they need. I am sure that I am not the only hon. Member who can think of many deserving local causes which ought to be able to benefit from the payroll scheme, provided that they can approach local employers and make their case known. I hope that bodies such as St. Mary's church in Hitchin, the citizens advice bureau in Letchworth, Knight's Templar school in Baldock, and the Royston branch of the St. John Ambulance Brigade will benefit from these provisions. I hope that my hon. Friends and hon. Members opposite will encourage charitable activities in their constituencies to look to the scheme and to obtain funds which they need to develop and increase their charitable activities in the years ahead. I am glad that the clause has been welcomed in this way, and I commend it to the Committee.
      Question put and agreed to.
      Clause 26 ordered to stand part of the Bill.

    Clause 15

      CHARGE OF INCOME TAX FOR 1986–87
      Question proposed, That the clause stand part of the Bill.
      9.15 pm
      Mr. Jonathan Sayeed: I welcome the clause because it reduces direct taxation yet again. We should not look at it merely as a one-off. We must recognise that, since 1979, direct income tax in the lower tax band has decreased from 33 per cent. to 29 per cent. and has decreased to 60 per cent. in the upper tax band from 83 per cent.—plus the 15 per cent. investment income surcharge where applicable. At the same time, the rise in tax thresholds has been greater than the increase in inflation. This means that there is a greater incentive for people to work and for higher earners to remain in the
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      United Kingdom. This is happening against a backcloth of lower inflation, higher productivity and greater efficiency and is to be commended.
      We have heard many plans from the other parties. To gauge the validity of their suggestions, it would be helpful if my right hon. Friend offered some guidance on how these plans would affect the tax bands and tax thresholds as detailed in clause 15. I understand that the Liberal party and Social Democratic party proposals would increase public spending by £10 billion. That could be funded by increasing VAT by 11 per cent. to 26 per cent. A letter sent by the hon. Member for Stockton, South (Mr. Wrigglesworth), who is present, and the hon. Member for Truro (Mr. Penhaligon) who is no longer in the Chamber, to other alliance Members of Parliament states:
      "There are going to be severe public expenditure restraints for some years to come and a number of cherished hopes may have to be delayed.
      The truth is, unless we are prepared to argue for substantially higher taxation, which we do not believe to be feasible, we must be prepared to establish strict priorities for higher spending".
      The parties seem to agree: we do not want higher taxation. What then is higher taxation? Is £10 billion more higher taxation? Are the Labour party's plans for an extra £24 billion higher taxation? How "high" is higher taxation?
      Mr. Ian Wrigglesworth: Just for the record and for accuracy, may I make it clear that the £10 billion is the forecast increase in the fifth year?
      Mr. Sayeed: I was going to come to that point. I should not like to misquote.
      Mr. Alan Howarth: What will happen in the first year?
      Mr. Sayeed: I was going to deal with that point. My hon. Friend has reminded me of the last part of the letter, which states:
      "Real improvements in public sector pay are expensive—a 25 per cent. increase in nurses' pay would cost £750 million per annum; 10 per cent. would cost £300 million…25 per cent. increase in teachers' pay would cost £1·25 billion per annum; 10 per cent. would cost £500 million."
      The letter states that the alliance intends increasing public spending by 2 per cent. a year, which in the fifth year would be an extra £10 billion.
      What are the implications for the tax bands and tax thresholds if the proposals are not financed by an increase in VAT from 15 per cent. to 26 per cent.? I shall help my right hon. Friend the Chief Secretary in answering those questions by pointing out that there are some aspects on which the alliance has said it will not increase spending. No doubt the hon. Member for Stockton, South will tell me if I am wrong, but in an annex to the letter the alliance said that a spending standstill would be imposed on agriculture, law and order, defence and environmental services. I should like my right hon. Friend the Chief Secretary to exclude the extras that some of the more wild promises of the Liberal party and Social Democratic party suggest because the letter from the hon. Member for Stockton, South and the hon. Member for Truro specifically says that the alliance will not increase spending on agriculture, law and order, defence, and environmental services. That is a suggestion from the alliance.
      I would find it helpful if my right hon. Friend could explain the implications of the Labour party proposals on tax threshholds and tax bands. I have heard many different

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      figures. I have heard that it will cost £46 billion extra in the first year if the renationalisation plans are put through. Others suggest that it will cost £39 billion, and the usual figure quoted on a year-by-year basis is an extra £24 billion.
      I accept that the right hon. Member for Birmingham, Sparkbrook (Mr. Hattersley) has protested that we have our figures wrong. I should like to know whether my right hon Friend has heard of any suggestions he has made to refute those figures, because I have not. I understand that the lower figure, £24 billion, will increase VAT from 15 per cent. to 41 per cent. I believe in the transfer away from direct to indirect taxation. I do not want to see a large increase in taxation. Therefore, will my right hon. Friend tell me the implications for tax thresholds and tax bands of an increase of £24 billion a year by the Labour party if it gets into office?
      Mr. Wrigglesworth: I want to take an entirely different view of this clause from that taken by the hon. Member for Bristol, East (Mr. Sayeed). This reduction of income tax is, in our view, misjudged on two grounds. Firstly, it is regressive and secondly, it is the least cost-effective way of increasing employment and economic activity. That is borne out by the comments which have been made by various expert commentators since the Budget. Typical of those comments were the remarks made by the Institute for Fiscal Studies on this cut in tax. It said:
      "of all the obvious ways of cutting income tax, this is the most regressive."
      Those with the least will get the least. That is good ground on which to oppose the strategy which the Government have decided upon in this clause.
      The evidence shows that less than one quarter of the benefit of tax cuts goes to the poorest half of tax units, as they are inelegantly called, in the working population.
      Mr. Cash: Are there, or have there been, any connections, of which the hon. Gentleman is aware, between the comments of the institute and those of the alliance or the party he represents?
      Mr. Wrigglesworth: The Institute for Fiscal Studies is widely respected by Conservative Members and has been widely quoted and used by Conservative Members over the years. Is the hon. Gentleman seeking to suggest that the institute has a political prejudice which leads it to reach judgments which are not independent or worthy of attention by Members from both sides of the House? There are no connections between that body and members of the alliance. As far as I am aware the body presents its reports and findings to all parties in the House and I know from the comments that it has made to me that it is the institute's intention to continue to do so, irrespective of the parties involved. The hon. Gentleman does it a great disservice by seeking to suggest that there is any link between it and ourselves.
      Single people with an income below £60 a week, under the cut of 1p in the pound, will gain only £0·01 per week as a result of the change in taxation. However, those with gross incomes of between £250 and £300 per week will gain, on average £2·08 per week, while single people on incomes of more than £350 a week will gain almost £2 a week despite the reduction in the real level of the high rate threshold—which, thankfully, is also contained in this clause.
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      Single earner couples earning below £60 a week will get nothing as a result of the change, whereas those earning between £250 and £300 a week will get £1·72 and those earning over £350 a week will obtain £2·36. Those figures illustrate the regressive nature of the proposal to cut income tax by 1p in the pound.
      Despite the pre-Budget speculation that relief would be concentrated on the lower paid through the thresholds or that a lower starting rate of tax would be reintroduced., the Chancellor threw out the sweetener of the 1p in the pound cut in the hope of a further cut of 2p next year and moving towards the 25p foreshadowed in the first Budget of the former Chancellor, now the Foreign Secretary, when he came to office.
      Despite those changes, the fact remains that the great majority of taxpayers are paying more than they did in 1978–79 as a proportion of average earnings. The average tax burden of income tax and national insurance remains higher. It is now 21·9 per cent. compared with 20·9 per cent. when the Government came to office. Those figures are for a married couple with two children under 11.
      Moving from the average figures to tax units, as they are inelegantly called, in answers to questions that I and the hon. Member for Birmingham, Perry Barr (Mr. Rooker) have tabled, it has been shown that for a married couple with only the husband working, with two children under 11, only those earning up to £77 a week or above £326 a week are now paying less tax as a proportion of average earnings than when the Government came to power. Some 13·18 million taxpayers as a whole are paying more and some 2·14 million are paying less. Even the Government's boasts about the taxation policies that they have pursued are not true. Broadly speaking, people are paying more tax now than when the Government came to office.
      Mr. Cash: Will the hon. Gentleman explain how his proposals will help in any way? It seems to me that he is suggesting that people should pay more, not less, tax.
      Mr. Wrigglesworth: I am suggesting that the proposals in the clause are entirely misdirected it one wants to help those who are suffering most as a result of the depression in the economy over the past few years—if one wants to help those who are suffering from poverty, the 3·5 million unemployed and those with large families. That is the least effective way to help those who are shouldering the major burden of the Government's economic policies; those who have been thrown out of work, particularly between 1979 and 1981, the years that the Government like to forget, when large sections of manufacturing industry were wiped out, which have not been replaced. As a result, many areas such as my own have 30 per cent. and 40 per cent. unemployment, and 70 per cent. of school leavers cannot get jobs. Those are the people whom the Budget should have helped, not those who are fortunate enough to have employment. This was the wrong priority, desirable though lower tax rates might be for everyone in the working population.
      9.30 pm
      The alliance would like to see lower tax rates in the long term, but with 3·5 million people unemployed, we should help those who are suffering most. The alliance budget proposals contained ways in which lower tax rates could be achieved more cost-effectively than those contained in the clause.

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      We oppose the cut in income tax, because that is the least effective way to create employment. It is the most expensive and the most sluggish means of creating jobs. The Treasury model shows that the 1p tax cut in the first year would reduce unemployment by only 6,000. After three years, 40,000 jobs would be created. All the models surveyed by the parliamentary unit at Warwick university showed a much higher public sector borrowing requirement cost per job created, a much smaller first-year impact and a bigger flow into imports and hence into current account deterioration.
      The Government are getting the worst of all worlds by pursuing this course. We have seen a current account deterioration in the balance of payments figures produced last month. I said in my speech on the Budget, and the alliance warned the Government before the Budget, that the fall in oil prices would give the country a major headache in its balance of payments because if the price of our oil exports is cut, inevitably that resource will make a smaller contribution to our balance of payments. The deterioration has already been shown in last month's figures, and it will continue.
      The cut in income tax was the least effective way of creating jobs. Ready reckoners based on the London Business School and the National Institute of Economic and Social Research models show that increases in public capital expenditure — the alliance advocated several ways in which that could be done—and cutting labour costs by reducing employers' national insurance contributions would have considerably greater employment benefits than the method chosen by the Chancellor.
      Before the Budget, the alliance advocated cutting employers' national insurance contributions by 10 per cent. in each of the rate bands. Such a proposal was also put forward by the CBI and by Conservative Members. In addition, the alliance suggested capital and current expenditure by the Government that could have been much more effective in creating jobs. Yet the Government chose to go down the least effective path of creating wealth and jobs by concentrating all the money that they had to give away on the cut in income tax. The Government have had an ideological obsession with reducing personal taxation, of which the principal beneficiaries have been the very rich. For the average taxpayer, the burden is still high.
      The Government have given away 10 times as much through tax cuts to those who work as they have spent on additional job creation methods. In this Budget, £100 million, as against £1 billion for tax cuts, is being diverted to employment creation methods. That is a miserably small amount, compared with the scale of the unemployment problem facing the regions and the central midlands. Many people in those regions are disappointed with the Government's attention to this problem. They are getting a clear message that the Government's policy is cynically to pursue those who have for their votes at the next general election rather than taking care of the havenots—those who do not have the jobs or the resources, and will probably never vote for the Conservative party anyway.
      Mr. Robert B. Jones: The hon. Gentleman is making a strong case for being opposed to the reduction in income tax. Will he vote against this measure?
      Mr. Wrigglesworth: As the hon. Gentleman knows, the alliance voted against this measure in the Budget debate. The clause also contains the changes in the tax thresholds for the upper rate bands, which mercifully have not been increased in line with inflation, and we welcome that. We do not intend to vote against the clause.
      We have made our intention clear. Our reason is central to the difference between the Conservative party—those in charge of the Government—and the Opposition. The majority of people, on all the evidence that we have—we shall see further evidence of this at the polls on Thursday—are more decent and concerned for their fellow citizens, particularly those disadvantaged by unemployment, than are Conservative Members. They will pay the price for their Government's policy in the ballot box not only on Thursday but in future general elections.
      Mr. Alan Howarth: I was glad to see the hon. Member for Truro (Mr. Penhaligon) come into the Chamber to support the hon. Member for Stockton, South (Mr. Wrigglesworth). I was beginning to be apprehensive that the hon. Member for Stockton, South was finding it a lonely business being a member of the alliance. He was bravely advancing arguments for increasing taxation—the more bravely because I am sure that he will have seen a Gallup poll which found that 69 per cent. of Liberal voters regard it as important or very important that there should be a cut in the basic rate of income tax. His posture is heroic, and no doubt that of the hon. Member for Truro will be so as well.
      Given the vehemence of alliance feeling on the subject, it was somewhat surprising to see how thin the alliance presence is in the Chamber. It may be that alliance Members are not here this evening because they are either in Ryedale or Derbyshire, West busy explaining to the electors by how much they will be reducing the rate of income tax if they have the opportunity. It would be no unfamiliar experience to sense a certain discrepancy in what is said by the two alliance parties at different times or by some hon. Members who are here and by other hon. Members who are away campaigning in by-elections. I hope that the hon. Member for Truro, if he catches your eye, Mr. Deputy Speaker, will be able to explain why I am being too cynical.
      However, there is a serious point. My rough calculation is that the cost of increasing public expenditure by £10 billion would mean either, as my hon. Friend the Member for Bristol, East (Mr. Sayeed) pointed out, raising the rate of VAT to 26 per cent. or—although my hon. Friend did not mention this—raising the present basic rate of income tax by 8p to 38p in the pound.
      I am surprised that the hon. Member for Stockton, South believes that to raise VAT to 26 per cent. or the basic rate of income tax to 38p would be a policy helpful for the unemployed. If the basic rate in income tax was increased, it would drive up the unit cost of employment in business, which is one of our main competitive weaknesses. How could that create conditions in which manufacturing or other firms were better able to employ people? That is a difficult argument to follow.
      Mr. Wrigglesworth: I listen with great interest to the hon. Gentleman because he is an expert in these matters. having supported the increases in VAT from 8 per cent. to 15 per cent., he is a little like an alcoholic lecturing us

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      on temperance. He knows that there is no way in which we would increase VAT or income tax to the levels that he is proposing.
      Mr. Howarth: The hon. Gentleman, who is always fair-minded, will also recollect that, when VAT was increased to 15 per cent., it was in order to make important reductions in the rates of income tax. Again, this is very important to his argument and to the point at issue between us; it was to shift part of the burden from direct to indirect taxation, thereby giving people in work better incentives to improve economic performance. That is how to make an impact on the unemployment problem that we need to deal with. I do not believe that a high expenditure, high taxation, policy would be good for employment.
      I wish to put to the House two other arguments in the context of my surprise that the alliance parties want to raise taxation burdens, as they say they do, and in support of the Government's policy of lowering the basic rate of income tax. An important argument for raising thresholds as opposed to lowering the basic rate was that that was the most likely way to make a worthwhile impact on the poverty trap. That is no longer the case now that changes in social security policy which the Government are introducing mean that benefits will be related to income after tax. That is a critical contextual change which means that there cannot be any strong remaining argument against the Government's policy of bringing down the basic rate. I am glad that the Government have set off decisively along this road. The basic rate was 33 per cent., it paused at 30 per cent. for some time, and now the Government have set off again decisively towards the 25 per cent. basic rate which I understand is their continuing objective.
      Not only is that the best way to promote improved employment, but there is another important argument in support of a lower basic rate as opposed to higher thresholds. If we are to have democratic discipline on public expenditure, large numbers of people should pay a small amount of tax rather than having society divided into two nations of taxpayers and non-taxpayers. We have seen the problems in local government. If significant numbers of voters do not have to foot the rates bill, they have no objection to local government expenditure rising beyond what is reasonable.
      On democratic, constitutional and economic grounds it makes abundant sense, if we are faced with the choice, to bring down the basic rate of income tax and at the same time to ensure that the legitimate objects of public expenditure, the importance and validity of which we all recognise, are paid for consciously by the largest possible number of people who are, on any reasonable judgment, in a position to pay tax because of the level of their income. Therefore, I very much commend the strategy expressed in clause 15.
      9.45 pm
      Mr. Penhaligon: I always love listening to Members campaigning against public expenditure when public expenditure is suddenly thrust upon their own constituencies. Of all the things that this Government have done, the one that succeeded in aggravating me more than any other was giving development area status to Stratford-on-Avon and leaving out my constituency, given that I am surrounded by 25 per cent. unemployment and am 300 miles from Westminster, and that Stratford knows little of either. It is one of the more remarkable decisions by the
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      present Government, yet I do not remember the hon. Member for Stratford-on-Avon (Mr. Howarth) coming to the House and protesting against the expenditure involved in his constituency. No doubt when it is in order, as I recognise that this comment is not in order at the moment, he will welcome the opportunity of catching your eye, Mr. Armstrong, to express his concern about that view.
      It has been said that there are not many alliance Members present, yet 8 per cent. of the parliamentary alliance is here. If that were so for the other parties, there would be 32 Conservative Members, and I can see only 14, and there would be 17 Labour Members. I can see only two of them, and I welcome them both to the debate.
      This is supposed to be a debating chamber, where we argue the merits of our case with enthusiasm, vigour and interest. It is not just a voting Lobby machine. We want to listen to the arguments, and we have made our views on this pretty clear. I have nothing powerful to add to the arguments presented by my hon. Friend the Member for Stockton, South (Mr. Wrigglesworth), because they are, in our view, quite overwhelming. One must make a judgment on each Budget relative to where one is. We could have an argument on how the Government had got where they were when they introduced the last Budget, and we could argue in some detail that there was no need for them to be in the economic difficulties that they faced, but, recognising that they were there, one must make a judgment relative to that.
      Our position is simple. The Chancellor of the Exchequer reached the conclusion that he had £1 billion left over that he could use for some purpose. We reached the conclusion that, given where we were, and not where we would like to think we were, of all the ways that one can imagine using that £1 billion, the Chancellor chose to use it in the way that was least effective in facing the real pressures on the country.
      The biggest single problem in Britain today, certainly for those of us who represent constituencies some distance from London, is unemployment. It is a progressive disease. As it goes on, one sees the public getting used to it, and this is in many ways the biggest problem for the long-term future of Britain. We see developing among great swathes of the community the belief that there will be no work for them ever again. If everyone took exactly the opposite view we might have a great deal of civil disturbance, but the fact that many people are beginning to believe that there will be no work for them again is an erosion of the spirit which, on the whole, has made this nation great. In creating that belief, the Government have a great deal to answer for.
      Let us suppose that the Chancellor is right in thinking that he has £1 billion to spend on something. In our alternative Budget we argued that there would be rather more than that, but let us accept just £1 billion. Every economic review on which we can lay hands suggests that it is difficult to think of a way of spending that £1 billion which would have less effect on the employment difficulties of the country than the one chosen by the Government.
      I have here the figures from the National Institute for Economic and Social Research's review of February of this year. I am an engineer by training and am a litle dubious about the precise nature of these figures that are produced by computer models, but they give one an idea of the thrust and trend of things and one cannot totally dismiss them. The institute believes that in the second year

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      the effect of the change in tax will be to cut unemployment by 17,000. It believes that 17,000 jobs will be created by the decison to reduce income tax by 1p in the pound. That is about 26 or 28 jobs per constituency. That is a negligible effect. It is the sort of increase that we have seen in as many weeks, leave alone months, as the terrible statistics have mounted up.
      The same review suggests that if the £1 billion is spent on public expenditure the number will increase to 27,000. One can make it a little more than that if one hones the way in which public expenditure is done, but that is 17,000 as against 27,000. If value added tax were cut by £1 billion, 30,000 jobs would be created, but if the national insurance contribution paid by employers were cut by 10 per cent., as we suggested in our alternative budget, 125,000 jobs would have been created. That would at least have covered up the increase which the Government have allowed over the past four or five months, even if it made no real impact on the mountain which has built up since the Conservative party came to power.
      I do not understand why the Government made the choice that they did. The alliance is in a peculiar position. On the one hand people accuse us of being irresponsible, and on the other they express surprise at our honesty in voting against the reduction in tax. It is rather brave of the Opposition. It certainly shows more bravery than the Labour party demonstrated. Decisions must be made in relation to the present and, as I have explained in some detail to the good electorates of Ryedale and West Derbyshire, if we had that £1 billion we would not have spent it in this way.
      The Government have made a mistake. More than anything else, they have demonstrated that our unemployment is not a matter of chance, something which they did not expect as their economic policies took effect, and that they do not care about unemployment. I do not know what influence the Chief Secretary had on that decision. That is not what my experience over the years in the various matters that we have talked and argued about would have led me to expect. Here, by their own fiscal judgment, the Government had the capacity to spend £1 billion, yet they chose to spend it in the least effective way possible for the greatest social problems that effects Britain. That is amazing. It is a comment on the peculiar last six or seven years of British politics, and it is a comment that is getting through to the British electorate.
      I am not one of those who pretend that the Government have money to spend as if there were no tomorrow, but the Government have made a mistake which they will regret. I hope that by next year's Budget they will take note of public opinion, which I suspect they are as well aware of as we are, and which is expressed when given the opportunity, that, given the state we are in, there is a better way of using that money.
      Of course, if the British people are asked whether they would like to pay less tax, they will say yes. I would not be the least surprised if quite a few people would say, if asked, that they should pay no tax at all, but we all know that a civilised society cannot be run, maintaining standards and giving people an opportunity in life, on that sort of basis. Therefore, I have no hesitation in saying that to reduce income tax by 1p in the pound is fundamentally flawed. It is wrong. It is one of the great mistakes that the Government have made.
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      We have already voted against that reduction and if a Division is called we shall no doubt vote against it again, although I am not convinced that that would serve any great purpose.
      Mr. Terry Davis: With clause 15 we come to what I expect the Government would regard as the centrepiece of the Budget. If the phrase had not been so overworked in recent months, I would have described it as a jewel in the crown of this Budget. There is no doubt from the Chancellor of the Exchequer's Budget speech and what has been said subsequently that the Government put all the emphasis of the Budget on the reduction in the standard rate of income tax.
      Indeed, I am surprised that the hon. Member for Bristol, East (Mr. Sayeed) did not make more of it. He spent much time talking about the public expenditure plans of the Labour party and the alliance. I recognise that there is a connection between public expenditure and taxation, but nevertheless the hon. Gentleman should have taken more pride in his own Government's policy.
      It is clear from the Financial Statement and Budget Report that the total cost of £935 million—taking account of advanced corporation tax, which is consequential—is the whole of the Budget and the Finance Bill; everything else is swings and roundabouts. Some people are on both the swings and the roundabouts, and some are on swings but not on roundabouts. There are different effects of different people in different places. We shall pursue the effects of different clauses in Committee, but I wish to make a few important points about this clause.
      First, I question the long-term effects of the Government's strategy. In effect, this tax cut is being financed by asset sales, as is the Government's public expenditure programme. I hope that the Chief Secretary will explain what will happen when all the assets are sold. There has been a great deal of public discussion about the consequences of revenues from North sea oil and gas running down as North sea oil and gas run out, but the sales of assets are bound to come to an end before our reserves of North sea oil and gas are exhausted. The Government must eventually face the critical problem of financing tax cuts in the longer term when all the assets have been sold.
      Secondly, the Labour party welcomes the boost to the economy. However, as the TUC pointed out in its economic analysis several weeks ago, tax cuts are not as cost-effective as public expenditure increases in reducing unemployment. The same amount of money used for a cut in taxes will not bring about the same number of new jobs as would the same amount of increased public expenditure. Indeed, tax cuts are more likely than an increase in public spending to lead to increased savings. They are also more likely to result in increased imports. Therefore, the boost to the economy will be less for every £1 billion of tax cuts than for every £1 billion of increased public expenditure.
      The clause provides for a reduction of 1p in the standard rate of income tax. Although that will cost the Chancellor £935 million, it means little to the individual taxpayer. Indeed, in his Budget speech the Chancellor described the cut as modest. It is important to remind the House about the precise benefits that will be enjoyed by the taxpayer. A married man earning £100 a week whose wife does not work will benefit by 26p a week. If that man earned £150 a week he would benefit by 51p; on £200 a week—

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      more likely to be expressed as £10,000 a year—by £1·22 and on £20,000 a year by £3·14. Those are Government figures that have been given in answers to questions and cannot be denied. There are many more people earning £100 or £150 a week than there are earning £20,000 a year, and for them increases of 26p or 51p a week mean very little.
      The benefits are especially small in comparison with the effects of previous Budgets. The Low Pay Unit, in its low pay review, drew attention to the effects of Finance Bills since 1979 on the marginal rate of tax, including national insurance, for those who are low paid, those on average wages and those who would be regarded as highly paid. In 1978–79, a low wage earner was paying as a marginal rate of tax, including national insurance, about 31·5 per cent. Before the Budget the figure was 35 per cent., and the effect of the Budget will be to reduce it only slightly.
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      For the person earning average wages, the marginal rate of tax, including national insurance, in 1978—was 39·5 per cent. and it has been reduced to only 39 per cent. as a result of previous Finance Bills.
      The highly paid person has had a high benefit. In 1978 to 1979 that person was paying a marginal rate of tax of 83 per cent. and that marginal rate of tax has been reduced to 60 per cent.
      Mr. Sayeed: Hear, hear.
      Mr. Davis: The hon. Member takes pride in those statistics. He must therefore be taking pride in what can only be described as gross inequality, because it is grossly unequal that a person who is already highly paid should have the benefit of a reduction in his marginal rate of tax from 83 per cent. to 60 per cent. when someone who is low paid has had an increase in the marginal rate of tax. The hon. Member for Bristol, East takes greater pride in those figures than he did during the course of his speech, but we regard them as a scandal.
      The reason why the low paid and average paid people are less likely to benefit is that national insurance contributions must be taken into account. The low paid are worse off and people on average wages are only slightly better off in spite of the reduction in income tax from 33 per cent. to 30 per cent. as a direct result of the offsetting effect of national insurance contributions. The lower rates of tax for highly paid people are not offset by higher contributions to national insurance because there is a ceiling on those contributions, and if the highly paid people are receiving investment income that income is not subject to any national insurance contributions.
      A cut in the basic rate means greater benefits for the higher paid and widens income inequalities. That point has been effectively made, rather surprisingly in my view, by the Confederation of British Industry. It disagrees with the argument advanced by the hon. Member for Bristol, East about a reduction in the tax rate being an incentive. It also disagrees with the claim made by the hon. Member for Stratford-on-Avon (Mr. Howarth) that there are no longer any valid arguments for an alternative to a reduction in the standard rate of income tax.
      I do not think I have ever quoted any statement made by the CBI in the past. However, in its Budget analysis it regarded this clause as a debit and not a credit to the Government. The CBI stated:
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      "The personal taxation measures are regressive. The Chancellor's 1p reduction in the basic rate will benefit those at the top end of the first income tax band rather than those at the bottom—where, arguably, the need for incentive is greater. The 1p off the basic rate gives somebody on £6,000 a year a reduction of 0·1 per cent. in their tax burden. For somebody on £16,000 the reduction is 0·6 per cent. More must be done to help enterprise at the lower end."
      For once the CBI and the Child Poverty Action Group agree about something. The Child Poverty Action Group, like the Labour party, would prefer the Government to extend the long-term rate of supplementary benefit to the long-term unemployed. The Child Poverty Action Group. like the Labour party, would also prefer to increase child benefit by £3 a week. The Labour party also wants to increase pensions by £5 a week for a single person and £8 for a married couple. I will not say anything else about that as it would be out of order when discussing clause 15.
      Even within clause 15 the money could have been used differently. The Government could have given higher allowances. The hon. Member for Stratford-on-Avon does not think there is any valid argument left for higher allowances. I must tell him that the Birmingham chamber of industry and commerce, which is not well known as a Socialist bastion, does not agree with him. In its pre-Budget representations, it advocated in effect that there should be higher allowances.
      The London chamber of commerce and industry would go further still. In its pre-Budget representations to the Chancellor, it argued not for a reduction in the standard rate of income tax or higher allowances but for what it described as small income relief similar to the age allowance. The Child Poverty Action Group also argued for that alternative if the Government wanted to use £935 million to alleviate poverty within the tax system. However, those options are not before us, although they would be supported by all Opposition parties, by some Conservative Members and by a wide range of bodies—a genuine consensus—outside the House.
      There is a straightforward choice for the Opposition. Either we vote against the 1p cut in the standard rate of income tax or we do not. The Labour party will not vote against it. We have made it clear that we oppose the Budget strategy. We voted against it and we voted against the Second Reading of the Bill. We believe that the Budget and the Bill, to the extent that it puts the Budget strategy into effect, are wrongheaded and misconceived because they virtually ignore the twin problems of poverty and unemployment. We have made it clear that we would give greater priority to higher pensions, a higher child benefit and higher benefits for the long-term unemployed—those who have been unemployed for more than 12 months. We would help people who are in the greatest need and who have least, and we would do it at the expense of those who have most. We define as those who have most the 5 per cent. of taxpayers who have enjoyed the real benefit of successive Budgets and Finance Bills from the present Government. I refer to the people who pay the higher rates and not the standard rate of income tax and have benefited from cuts in taxation on capital as well.
      We should also be clear that voting against the reduction in the standard rate of income tax tonight, is not voting for higher taxes to be paid by the richest 5 per cent. because, for once, they have been excluded from the 1p reduction. A vote against the reduction will simply be presented, or rather misrepresented, by the Government as a vote against lower taxes for people on lower incomes.

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      I am not clear about what the Liberal party and the Social Democratic party plan to do at the end of the debate. I listened to the hon. Member for Truro (Mr. Penhaligon), who described the alliance as brave to have voted against a reduction in the standard rate of income tax previously. It appears, however, that there is a limit to its courage or at least that it recognises that it is mistaken, or perhaps it is just inconsistent. I listened carefully for some explanation of why it does not propose to vote against this proposed reduction tonight. We had an explanation not from the hon. Member for Truro but from his twin, the hon. Member for Stockton, South (Mr. Wrigglesworth), who told us that the alliance would not vote against clause 15 because, unlike the Budget resolution, it ensures that benefit is not given to people on the highest incomes. I ask the hon. Member for Stockton, South to explain now the difference between clause 15 which he will not vote against, and the Budget resolution which he voted against on 24 March.
      Mr. Penhaligon: None at all.
      Mr. Davis: We have a split in the alliance already. The hon. Member for Truro says that there is no difference at all, and he is right, whereas the hon. Member for Stockton, South told us earlier that there is a difference, and he is wrong. There is no difference. The wording is exactly the same. The hon. Member for Stockton, South can wriggle as much as he likes, but he cannot get away from the fact that he claimed that there was a difference when there is none. Perhaps he would like to get to his feet now and tell us the difference. He is avoiding the invitation. I think that we can see where he stands.
      The Labour party prefers the more difficult course of explaining to the electorate that we are not opposed to lower taxes and a higher standard of living for people on low incomes. On the contrary, we want to use the money better and in ways that will give the greatest help to people on the lowest incomes; and we would have done other things to help the people on the lowest incomes, including those who pay the standard rate of income tax.
      The alliance forgets too easily that many people paying the standard rate of income tax are very lowly paid. Many of those paying the standard rate of income tax have incomes that are below the level of supplementary benefit, and the alliance voted against the cut in taxes paid by those people.
      The aim of the Labour pary is to unite working people in the wider sense, including those who need to work and cannot find jobs and those who used to work and have now retired. We refuse to play the game of setting the working poor against the non-working poor. We refuse to jump into the Tory trap with the Liberal party and its allies. We will not oppose this small step towards returning to the lower level of tax to which the low paid were subject at the time of the last Labour Government—a cause supported at the time by the Liberal party and by the hon. Member for Stockton, South in his previous role as a Labour Member of Parliament. It is for them to decide whether they will vote against this tax cut tonight, but the Labour party will not vote against it.
      The Chief Secretary to the Treasury (Mr. John MacGregor): I agree with the hon. Member for Birmingham, Hodge Hill (Mr. Davis) that this is a
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      significant part of the Finance Bill. Indeed, the short debate that we have had is in direct contrast to the significance of clause 15 in the Bill as a whole. It is not by any means the only significant part, and we shall debate many other significant parts of the Bill in Committee. Nevertheless, it is a key part of the Bill in terms of the amount of tax forgone in the forthcoming fiscal year and of our overall strategy.
      I wish briefly to remind the Committee of some of the reasons that we put forward for clause 15. In so doing, I intend to refute the comments made by the hon. Member for Stockton, South (Mr. Wrigglesworth).
      First, the record of the Government on tax thresholds is extremely good. As I think is now recognised, we have increased the tax thresholds by 22 per cent in real terms. A good part of that took place in last year's Budget and in the Budget of the year before that. When the hon. Member for Stockton, South talks about the combination of tax changes in this Budget being regressive, I remind him that the arguments are not all one way in relation to thresholds. It is worth bearing in mind that, if the thresholds were raised by the amount that he has in mind, a good proportion of the people who would benefit largely from being taken out of the tax net are single earners and part-time earners. There is no clear argument for saying that one helps the less well-off all the time simply by raising thresholds and not dealing with the basic rate.
      Secondly, there is the argument about international comparisons that I quoted on Second Reading. It is clear now that we do not do at all badly on the thresholds and the starting point of income at which one pays tax; we are, however, out of line on the basic rate.
      Thirdly—this is an important part of the argument—is the question of the self-employed and unincorporated businesses, 90 per cent. of which pay their tax at the basic rate. When one is trying to encourage the self-employed and unincorporated businesses, it is important to recall that the marginal incentive is what matters to them in building up their business. That is why, once again, we are acting on the basic rate.
      This leads me to the main argument for concentrating the bulk of the tax relief this year, over and above indexation, on the basic rate. As the hon. Member for Stockton, South pointed out when quoting some figures given to him in a parliamentary answer, the group that has perhaps least benefited from tax changes in recent years is those in the income bracket of approximately half average earnings to about twice average earnings. It is on that group that the combination of changes most concentrates this year—and rightly so, because I believe that their time has come. It is significant that they are 95 per cent. of all taxpayers.
      There are two important reasons for concentrating on that group this year. First, it is important to consider the marginal rate of tax that individuals are paying and the incentives that are given to them to earn more. It is the basic rate that is the marginal rate for 95 per cent. of all taxpayers and for them, therefore, it is an important fact that their incentives are improved when marginal rates are reduced. Secondly, it is still not desirable that for so many of our fellow citizens on modest incomes so much—38 per cent.—is taken from the pay packet before it reaches the pocket. That is why, notwithstanding the academic experts, our proposal for the basic rate is so

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      popular. That is why I suspect that the Opposition parties are in such difficulty in deciding how to play this tax change.
      10.15 pm
      As my hon. Friend the Member for Bristol, East (Mr. Sayeed) rightly said in opening the debate, the reduction in the standard rate has been a continuous process. In our first term, the Government reduced the rate from 33 per cent. to 30 per cent. and it is now to be reduced to 29 per cent, which is halfway to our long-term objective of a standard rate of 25 per cent. There has been a continuous process also for incorporated small businesses—I have already referred to the self-employed and unincorporated businesses. Although there is to be only a 1 per cent. reduction in the small business rate of corporation tax this year, it compares with the 42 per cent. rate that prevailed when the Government came to office. There has been a significant reduction in the rate and, as my hon. Friend the Member for Bristol, East has said, it has been a continuous process.
      The hon. Member for Stockton, South argued that we are showing entirely the wrong priority this year. He endeavoured to show that there have been no real reductions in tax on most incomes since 1979. There was a curious paradox in his argument because he was trying to show that tax should not be reduced this year while complaining that in his view the rate of tax was still at the 1979 level. Income tax liabilities in 1986–87 will be about £8 billion lower than 1978–79 rates and allowances indexed to 1986–87 levels. This means that those earning £5,000 a year or less—modest incomes—have had their tax bills reduced on average by about 19 per cent. under this Government. Everyone will pay less income tax in 1986–87 than under a 1978–79 indexed regime. A married man on average earnings would pay £6·91 more per week in income tax under an indexed 1978–79 regime.
      Mr. Terry Davis: Does the Minister agree that national insurance is an important part of the calculation and should be taken into account, and was taken into account by the previous Chancellor of the Exchequer?
      Mr. MacGregor: I have seen all the figures that have been given in answer to various parliamentary questions on this issue. I accept that we have not yet succeeded in bringing down the combined rate to the level that we would wish. However, the 1p change in the basic rate of tax is a further move in that process.
      It is important to disinguish national insurance contributions from income tax. National insurance contributions are made on a pay-as-you-go basis to pensions, on which we have preserved our election pledges—indeed, we have done more than that. If the hon. Gentleman's intervention reveals the line that he will take, I hope that he will not be so churlish as he was when replying to the debate, but will positively support what we are trying to do in reducing the basic rate of tax this year.
      Mr. Davis: I am sure that the Minister would not wish inadvertently to mislead the House of Commons. He has said that the combined rate has not been reduced by as much as the reduction in income tax. In fact, it has increased for many, especially for those on the lowest incomes.
      Mr. MacGregor: In making comparisons with 1978–79, it is important to take into account increases in earnings and changes in take-home pay. The marginal rate of tax has been reduced from 33 per cent. to 29 per cent.
      Mr. Davis: That has been more than offset.
      Mr. MacGregor: For some, yes. However, the hon. Gentleman will be aware that my right hon. Friend the Chancellor of the Exchequer made changes last year to national insurance contributions to benefit the lower income groups.
      Mr. Davis: For the low-paid and those on average earnings, the marginal rates of income tax and national insurance, when taken together, has not declined. Indeed, it has increased for the low-paid, and the position is the same for those on average earnings.
      Mr. MacGregor: No. The important point is the proportion of income and earnings that is taken away in the combined national insurance contributions and tax. Although the figures have not changed as much as I should like, that is the course that we are following, and that is why we say that the long-term objective is to get the basic rate of income tax down to 25 per cent.
      The hon. Member for Stockton, South, rather surprisingly, said that the principal beneficiaries of the change this year would be the very rich. He must know that we have quite deliberately kept the increase in the thresholds for the higher rates below indexation to ensure that that does not happen this year. Indeed, I join the hon. Member for Hodge Hill in saying that the hon. Gentleman gave a tortuous and remarkable answer when explaining why he was not going to vote against the clause—because he was in favour of the higher rate elements in the clause. I accept that most are not indexed, but there has nevertheless been an increase. Yet again, we have seen a typical example of the hon. Gentleman trying to have it both ways.
      In reality, the hon. Member for Stockton, South does not want to vote against the clause for two reasons: first, he does not want to highlight the fact that the SDP and the Liberals are trying to oppose the 1p reduction in the basic rate; and secondly, he could not muster enough support among his colleagues to vote against it.
      On Second Reading, the right hon. Member for Birmingham, Sparkbrook (Mr. Hattersley) said that there were five other ways in which the Government could have dealt with the £1 billion-odd that is involved in cutting the basic rate. He listed increasing public expenditure, raising child benefit, raising tax thresholds, introducing a reduced rate band and cutting the basic rate. He then concluded, just like the hon. Member for Hodge Hill, that by far the worst of those options was to cut the basic rate. He seemed to make it clear that he would have preferred any of the other options.
      In view of that, and the whole way in which the hon. Member for Hodge Hill spoke today, it is astonishing that the latter does not intend to vote against the clause. It is even more remarkable that the Labour party has given a pledge not to put the basic rate back to 30p. Thus, although Labour Members rail against it and argue that it is wrong, and the wrong use of priorities, they do not have the courage to fight against it or to put it back to 30p. That shows the paucity of their arguments and the frailty of their attack on the clause.

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      In not voting against the clause, the Labour party is accepting that it will forgo more than £1 billion in tax over a full year. Consequently, it is relevant to look at its spending programme my hon. Friend the Member for Bristol, East asked me whether I had received any further suggestions from the Labour party to refute the £24 billion spending programme. The answer is that I have not. The Labour party does not have the courage to vote for higher taxes, but it wants much higher spending.
      Mr. Terry Davis: We are in favour of higher taxes for those who can afford them. We have made it clear that we will recover the £3·6 billion that has been given to the Chief Secretary's rich friends.
      Mr. MacGregor: That £3·6 billion has already been spent many times over.
      Mr. Davis: I have already told the Chief Secretary how we will spend that money. We will spend it on increasing the pension for a married couple by £8 a week, on increasing the pension for a single person by £5 a week, on increasing child benefit by £3 a week and on extending the long-term rate of supplementary benefit to the long-term unemployed. If the Chief Secretary costs that, he will find that that £3·6 billion more than covers it.
      Mr. MacGregor: Of course, that is a long way short of £24 billion. However, I must get on, as I know that the House is anxious to come to a conclusion, and we have debated these issues before.
      The hon. Gentleman has not even costed his £3·6 billion correctly. The hon. Gentleman is talking not about someone's rich friends but about a group who will benefit considerably from the 1p basic rate change. As he knows, that means a marginal rate of 70 per cent. for anyone with a taxable income above £18,600. Those are the people who will have to cough up to meet the cost of the £3·6 billion.
      I turn to the point raised by my hon. Friend the Member for Bristol, East about the SDP and the Liberals. Previously the Liberals had the courage to vote against the 1p reductions. My hon. Friend asked me to look at the size of the expenditure programme that the Liberals and the SDP have put forward. He quoted from a letter which was published in The Times. For the benefit of many of my hon. Friends who were not present in the House, I shall quote from it:
      "It is understood that Alliance leaders have been stung into tough action by the Government's damaging charge that Labour commitments could cost as much as £24,000 million."
      At least the hon. Member for Stockton, South has learned the lesson of the dangers of committing oneself to a heavily overspent programme in a way that the Labour party has not. That stung the hon. Gentleman into consulting his colleagues. I understand that that is what happened. The hon. Gentleman and the hon. Member for Truro (Mr. Penhaligon) sent a joint letter which stated:
      "There are going to be severe public expenditure restraints for some years to come and a number of cherished hopes may have to be delayed.
      The truth is, unless we are prepared to argue for substantially higher taxation, which we do not believe to be feasible, we must be prepared to establish strict priorities for higher spending, to consider phasing in the more expensive changes, to identify areas where savings can be made, and to seek new solutions to problems."
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      Is the article in The Times correct? Have the hon. Gentlemen sent a letter to their spending colleagues?
      Mr. Penhaligon: That is the truth.
      Mr. MacGregor: It is now on the record.
      The hon. Member for Truro was kind to me earlier. May I repay the compliment by saying that I always enjoy my debates with him, because at least he is frank and honest. However, I must tell him that some of his hon. Friends are giving him a reply, and it cannot be an encouraging one. This morning, we read in the newspapers that an SDP policy group—perhaps that is only the SDP and is not directed at the hon. Member for Truro—proposes a scheme for distributing shares in nationalised industries free to every member of the public instead of privatising them through a stock market flotation.
      Leaving aside whether that is a sensible way to proceed, we must question, if we give away assets for nothing and continue to tax actual earnings more heavily—that is what the Liberals and the SDP propose—whether people value things when they get them for nothing. It has been made clear in the same article that, in line with the recent injunction by alliance economic spokesmen, policy proposals have to bear in mind the tightness of funds if the alliance parties were to gain a share of power. It is stressed that this spending has yet to be allocated a place in the SDP's overall list of priorities.
      So now we have a new concept, a new way of fudging, of getting out of the gap between spending and raising the tax. The alliance would put forward a proposal, so that everyone would sit up and take notice, and say, "We do not know whether we can afford it." That is typical of the SDP and the Liberal party. They try to be all things to all men but do not face up to the need for real choices.
      The decision by the alliance to oppose the cut this year in the basic rate will not take it far on the road to an extra £10 billion. My hon. Friend the Member for Bristol, East asked what that would be. It represents another 9p on income tax in the fifth year. The other policies which the alliance put forward will not achieve much economic growth. We must still expect a substantial increase in taxes.
      We have tonight seen the Labour party, the Liberal party and the SDP wriggling all over the place to explain why they will not vote against clause 15; they do not know how to explain away their position. Our position is clear. We are in favour of clause 15. We are in favour of the basic rate cut to 29p. We believe that it is right for the economy. That is why I commend the proposal to the House.
      10.30 pm
      Sir Brandon Rhys Williams: I would not wish the Committee to agree that the clause should stand part of the Bill without making two points that I have made many times in recent years. It is easy to see the difficulties of the Opposition parties in finding the courage to vote against a cut in income tax, but I question whether the Government will be able to finance the redistribution of income at the level that the public expect with a further 4 per cent. reduction in the contribution of those in work.
      First, I believe that it is humbug, now that we have put the national insurance contribution on an earnings-related basis, to keep it as a contribution separate from income

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      tax. I believe that the income tax and NIC should be combined, not in a single income tax but in a single national insurance contribution, so that the income tax becomes the insurance contribution made by every citizen.
      Secondly—I first made this point in 1971 when I was on the Committee on the Finance Bill—the Government's objectives should be to give every individual the maximum possible incentive to create wealth and to simplify the tax system as much as possible. Therefore, contrary to the comments of the hon. Member for Stockton, South (Mr. Wrigglesworth). I believe that
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      the Conservative's Government's objectives should be to abolish higher rate tax altogether. I hope that that remark will be quoted. I hope also that my right hon. and hon. Friends will bear in mind the fact that this would be a reduction in taxation from which everyone would gain and no one would lose.
      Question put and agreed to.
      Clause 15 ordered to stand part of the Bill.
      To report progress and ask leave to sit again.—[Mr. MacGregor.]
      Committee report progress; to sit again tomorrow.

  Power Plant Engineering (Gateshead)
  Motion made, and Question proposed, that this House do now adjourn.—[Mr. Sainsbury.]
  10.32 pm
  Mr. Bernard Conlan: I shall address my comments to particular problems that affect my area, but they concern the whole of the power plant engineering industry. For many years, there has been a general shortage of orders, recurring redundancies, little confidence and a severe drop in the morale of those working in the industry. Those problems affect the industry nationwide.
  In 1984, more than 1,200 people were employed at Northern Engineering Industries' nuclear power plant. Today, 137 people are employed there. That is a substantial decrease. I doubt that the company's viability will continue with such a small workforce at that major plant. This will be the third redundancy announcement since December last year. If the problems continue, the company will bleed to death.
  The problem is not new. Indeed, a Central Policy Review Staff report in 1976 said that the industry faced a serious problem. The report pointed out that the power plant industry faced grave threats and added:
  "There must be a Government commitment to a firm, steady ordering programme, starting as soon as possible, for the home market."
  Little has been done about the problem since that statement was made in 1976.
  The industry is faced with the difficulty that the Sizewell inquiry has been continuing for a long time and that the inspector has not yet reported. If newspaper reports are to be believed, he will not present his report until later this year. It is clear that the inspector's recomendations will be controversial and that the Government—the same would apply to any Government—will not be prepared to tackle the issue until after the next general election. That being so, it is clear that conditions in the industry will continue to get worse, and firms such as that in my constituency will disappear.
  Should this local firm go out of existence—remembering that there have already been 1,200 to 1,300 job losses in Gateshead—the problems for the unemployed in the area and for the town will get worse. It will also present more problems for the nation, because the skilled teams needed to construct the high technology boilers and other equipment that comprise modern power stations will no longer be available. Britain will then have to turn to the Americans or even the Japanese. What a sad day it will be if we, with our proud record in the construction of highly efficient power stations, have to look overseas for our requirements.
  I have for long believed that we should have a sensible mix of nuclear and conventional power stations. The recent tragic events in the Soviet Union should not deter us from pressing ahead with our nuclear programme. Our designs are quite different from theirs, including the station at Chernobyl. The AGRs produced at Gateshead have a safety record second to none, although there are doubts about the safety capacity of the PWRs, and that is the issue at Sizewell. We have only to recall the events at Three-Mile Island to realise that such doubts are well founded. Unless the Government are prepared to take firm
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  and positive action to save the industry, we will live to regret the passing of one of the leading and major industries in this country.
  The nuclear power plant of Northern Engineering Industries is possibly one of the most modern in Europe. In 1982 the Prime Minister was responsible for the official opening of the new nuclear facility. I recall that on that occasion, in declaring the new facility opened, she promised the workers—more than 1,200 people then—that they would have a bright and promising future. What hollow words they were. What was the bright and promising future that the Prime Minister promised to the workers in Gateshead a mere four years ago? Nearly 1,200 of those workers have already lost their jobs. Those words sound pretty hollow now in the light of experience.
  At about the same time, in a great roar and fanfare of trumpets, the Government announced that it was their policy to embark on a programme of ordering one new nuclear power station a year up to and including 1991. What has happened to that policy? Not only have the Government not fulfilled that promise; they have not ordered one station. Indeed, the major redundancy in Gateshead occurred in 1984 when work on the Torness and Heysham power stations ran out. The Minister will not want reminding that it was not his Government who provided the work for Gateshead. It was provided by the Labour Government in 1978, who took the initiative and ordered those two new power stations.
  What shallow and hollow words we have heard from the Government about providing work for this important industry. I have carried out some research, and I have found that since 1979, bearing in mind the fact that the Government have not provided work for any one power station, NEI has contributed to Tory party funds—if not to the Tory party funds, it has contributed to the front organisations—more than £200,000. In view of the Government's record for providing work for NEI, the shareholders of that company might consider that the £200,000 has not been cost effective.
  My final plea to the Minister is that he must reappraise the position of this vital industry. Tomorrow the Minister should place on his desk the 1976 report of the Central Policy Review Staff and consider the report's finding that the industry requires a steady improvement.
  10.44 pm
  Mr. David Clelland: People are nervous, if not afraid, as a result of the Chernobyl disaster, and understandably so. The full realisation of the devastating and deadly effects of unleashed nuclear energy has been brought home—literally—by an accident in a part of the world previously unknown to most people. This, following the accident at Three-Mile Island in America and constant doubts surrounding the nuclear installations at home, has quite naturally made people, to say the least, sceptical about the advisability of continuing with the development of nuclear power stations in this country on their very doorsteps.
  Until such time as we are able to convince them—that can only be when we are convinced—that nuclear energy can be not only harnessed but kept harnessed, then why should we expect them calmly to accept future developments of this kind? Despite the continued reassuring noises from Ministers, and the Prime Minister

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  herself, all the signs are that the ordering of any new nuclear power stations must be thrown into doubt, or at best delayed, as a result of Chernobyl.
  Where does this leave those who work on the manufacturing and production of power station equipment? That is what they went to know, and an answer for NEI is urgently required. My hon. Friend the Member for Gateshead, East (Mr. Conlan) has already outlined the decline in the work force over the past four years. This followed the official opening of the facility in 1982 by the Prime Minister herself, who on that occasion forecast a secure future for the company.
  The future was not, and is not, secure. More highly skilled men and women will be thrown out of work on Tyneside. Unless and until the Government have the good sense to plan properly for the future energy requirements of the nation, based on fuels and technology that are both plentiful and proven, the electrical engineering industry will be unable to plan and maintain the present skilled work force that has been so badly depleted over the past seven years.
  Even the present functioning nuclear power stations could be providing more work if they were being properly maintained instead of being allowed to fall into disrepair and giving rise to concern. Even so, the skills of the work force at NEI are not entirely restricted to nuclear-related production, and the inventive and technological genius of the technicians are not entirely confined to nuclear energy. They can contribute to the provision and refurbishment of conventional stations and, more important perhaps, to the much needed, but sadly lacking, research into alternative and safe sources of energy.
  The northern region is still reeling under the blow of losing the auxiliary oiler replenishment vessel, which was so badly needed by Swan Hunter. This threatens to aggravate an already record unemployment level, to say nothing of the human suffering that that implies.
  While the local authorities continue to make every effort to preserve and expand employment, by attracting companies such as Nissan and Komatsu, through grants and incentives to new and existing business, every job that they attract is swallowed up by yet more bad news resulting from the Government's neglect to recognise properly the skills that we have, and the contribution that those skills can make to a properly planned future.
  The problems faced by NEI are symptomatic of the problems of the electrical engineering capacity. In the not-too-long-term future, we look forward to the return of a Labour Government that can fully utilise the skills of our people by expanding our economy and planning our energy needs. In the meantime, we look to the Government to cast aside the dogma and begin doing something positive for the industry and the country. I hope that the Minister will give a satisfactory reply to the points that have been raised.
  10.54 pm
  The Parliamentary Under-Secretary of State for Trade and Industry (Mr. John Butcher): I thank the hon. Members for Gateshead, East (Mr. Conlan) and for Tyne Bridge (Mr. Clelland) for raising a question which is obviously very much in their minds. I shall try to respond to the points that they have raised.
  I was particularly interested to hear the hon. Member for Gateshead, East recount some of the history of the industry. He was right to point out that his remarks were
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  geared towards describing the factors which have affected the whole power plant industry and not just one section of it. He was also correct to review the order position and to consider projections for the future.
  The hon. Member for Tyne Bridge referred to a phenomenon which many of us have shared—the need to keep together groups and teams of skilled people so that a capability is not lost to the economy, not just for local but for national reasons. Therefore, I shall consider with them how the United Kingdom power plant industry has developed. We all agree that it has been through a very difficult period, with a low rate of home ordering for more than a decade. I shall begin by reviewing the situation on that front.
  In the 1970s the utilities were commissioning plant at the rate of about 2,000MW per year, and this represented a major workload for the United Kingdom plant manufacturers in the 1960s and the 1970s. Of these orders some 58 per cent. were won by GEC, while some 42 per cent. went to Northern Engineering Industries in the northeast. However, since 1973 only three orders have been placed: the Drax completion coal-fired station and the Heysham II advanced gas-cooled reactor station which were won by NEI, and the Torness AGR station which went to GEC.
  So what are the prospects for the future? Of course, proposals for new generation plant must come from the electricity supply industry. The Government will examine each consent application on its merits. The Scottish boards are unlikely to need new major generating capacity for a number of years.
  Power stations are usually built to provide generating capacity to meet demand, either because existing power stations have reached the end of their economic life and so have to be replaced or because of a net increase in demand. However, Sizewell B pressurised water reactor power station was originally put forward as a substitution project, since the cost of generating power from the proposed new station showed an economic return compared with generation costs from existing power stations. Since Sizewell B was first mooted, demand for power has increased and this has turned the original case for substitution into a requirement for replacement capacity.
  Nevertheless, the Central Electricity Generating Board has stated that it does not intend to seek consent for other new power stations until the outcome of the Sizewell inquiry is known. Sir Frank Layfield has been faced with a formidable task in carrying out the inquiry and in compiling his report. The inquiry was extremely wide-ranging, lasting 340 days—the longest ever planning inquiry in this country. Sir Frank has indicated that he hopes to deliver his report to my right hon. Friend the Secretary of State for Energy in September of this year. My right hon. Friend has said that he will reach a decision as soon as possible after receipt of the report, and arrangements are being made for the Department of Energy to make an urgent examination of the report when it is available.
  As hon. Members have noted this evening, any discussion which mentions nuclear energy must now take note of the Chernobyl disaster in the USSR. Although it is not part of the main topic of this debate, I am sure that hon. Members would wish me to comment. There are three major points to make on the relevance of the disaster to the United Kingdom.

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  First, the plant at Chernobyl is unlike any reactor type operating or planned in the United Kingdom, including the existing Magnox and AGR stations and the proposed PWR station. In the United Kingdom our system of licensing for nuclear plants puts safety first, and under that system a station such as Chernobyl would simply not have been found remotely acceptable.
  Secondly, inquiries such as that into Sizewell B are not a feature of life in the Soviet Union. This Government decided that there should be a full public inquiry at Sizewell, at which any body with an argument against nuclear energy was able to put forward the fullest evidence and the fullest reasons for its point of view.
  Thirdly, safety of course is, and will remain, the paramount consideration in the development of nuclear power in this country. Provided nuclear power stations can be built safely, and to time and cost, they offer very real economic benefits through cheaper electricity for both domestic and industrial users.
  If formal consent were granted, Sizewell B would provide the opportunity for major orders for United Kingdom manufacturing industry earlier than any other possible new station. A very high proportion of the hardware would be supplied by British companies; the CEGB has estimated that only 7 per cent. of the total cost of the Sizewell B project would be for contracts placed abroad, and only about half that would be for plant and equipment.
  The CEGB is also considering the possibility of ordering a new coal-fired power station for commissioning in the mid-1990s, but has not yet made a specific application. A reference design for a new type of 900 MW unit — compared with the present largest size in the United Kingdom of 660 MW—which might be used for such a station is being developed by the CEGB, the NCB and manufacturing industry. In more general terms, there will be a need for new power stations to replace existing outdated capacity in the 1990s and beyond.
  Taking all these prospects together, I believe that, in the medium term, the United Kingdom power plant manufacturing industry can look forward to improved business prospects on the home front.
  That having been said, the industry's concern about the home ordering programme is understandable, but the timing of orders must remain the responsibility of the generating boards. I must emphasise that any new power station which was not fully justified on economic grounds could be expected to have an undesirable impact on electricity prices, which would adversely affect both the domestic and industrial user, the power sector included.
  Turning to the overseas market for power plant which is an integral and important component of order prospects, this has naturally been an important part of the activities of United Kingdom companies over the past few years. For example British companies have undertaken major power station projects in the Sudan, in Korea, Hong Kong, South Africa, India and Brazil. There have also been many more minor projects, which still involve substantial United Kingdom content, of which the supply of plant and equipment from United Kingdom factories and the provision of design and engineering services is worth collectively many millions of pounds. Total exports from
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  the United Kingdom power generation machinery and equipment sector in 1985 amounted to £675 million, which shows an excellent performance.
  The Government have placed considerable emphasis on helping United Kingdom companies to win business overseas, and especially in developing countries. The financial package is just as important as the price and quality of the equipment offered to overseas clients. The financial expertise of the City has been used by British compaies in the power sector—as by other capital goods exporters—to get together commercial financing on the best possible terms. I pay tribute to the financial services available to our exporters. However, there has been an increasing tendency in recent years for major projects overseas to be won with soft finance. While the Government deplore this growing international trend and would prefer to see an end to mixed credit activity, we are determined that our companies should not be at a disadvantage. Accordingly, the Government announced to the House last November that we intended to provide a new soft fund, in addition to the existing system of grants under the aid and trade provision. Our objective is to double the business won by British industry with the help of mixed credits over the next few years from the present level of about £250 million a year to about £500 million a year.
  Traditionally, the power sector has been a major beneficiary from ATP. From the date of introduction of the scheme in 1977, over 20 projects in the power sector have been won with ATP. This amounts to about 40 per cent. of all the ATP granted to British companies. This large proportion reflects the importance of power projects in infrastructure development. Developing countries cannot progress unless they have adequate, secure and reliable generation of electrical power, with the necessary systems to transmit and distribute that power to industry, to commerce and to domestic customers.
  Although the market for major power projects overseas has been very slack over the past few years, showing a considerable decline from earlier levels, I understand that most commentators in this country and abroad see an increase in activity in the years ahead, reflecting the needs of developing countries. Falling oil prices and the trend towards lower world interest rates will provide an additional boost. The Government will respond by continuing to support the power sector through ATP, including the use of the soft loans facility. It is open to companies in the sector in Gateshead to benefit from our support, as it is to companies elsewhere.
  As the industry has looked increasingly overseas for its livelihood in recent years, so it has become apparent that to compete effectively major investment has been needed to update and improve products, production equipment and methods and the working practices of the industry. The industry has responded with large investment programmes, assisted where necessary by the Government under the provisions of the Industrial Development Act and the Science and Technology Act. Since April 1979 support for the power plant engineering industry throughout the country under the Science and Technology Act has amounted to some £21 million with some £3·5 million of that amount offered to companies in he Gateshead area. With Government assistance at an average of around 25 per cent. this would represent an investment in innovative products and processes of more than £80 million by the industry; and I pay tribute to that.

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  This is just the tip of the iceberg. Millions of pounds more have been invested by the industry without recourse to the Government.
  Under the Industrial Development Act and its predecessor, since August 1979 support offered for investment schemes within the power plant engineering industry has amounted to some £24 million, of which £2–5 million has been offered to Gateshead firms. This assistance is specifically aimed at capital regeneration on both regional and national benefit grounds. With an average Government input of some 10 per cent. it means that the industry has invested some £240 million of capital, all aimed at ensuring a competitive product able to win overseas orders on price, delivery and technical excellence.
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  As with all Adjournment debates, I have listened carefully to the arguments that have been put forward. I congratulate the hon. Members for Gateshead, East and for Tyne Bridge on raising this important issue at what has transpired to be a topical moment. I fully understand the hon. Gentlemen's reasons for wanting to defend the continuation of those teams of skilled people in their constituencies, and I shall ensure that the points that they have raised tonight are well lodged with my right hon. and hon. Friends at the Department of Trade and Industry and the Department of Energy.
  Question put and agreed to.
  Adjourned accordingly at two minutes past Eleven o'clock.