Commons Sitting of 28 April 1987

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

    LONDON REGIONAL TRANSPORT BILL (By Order)
    Order for consideration, as amended, read.
    To be considered upon Thursday.

Oral Answers to Questions
  EDUCATION AND SCIENCE

    Schools (Accommodation Standards)
    Mr. Meadowcroftasked the Secretary of State for Education and Science if he will undertake a review of unpublished reports of visits made by Her Majesty's inspectors to determine what recent trends are shown in the numbers and proportions of lessons seen where poor or unsuitable accommodation was considered to be restricting the quality of work; and if he will make a statement.
    The Parliamentary Under-Secretary of State for Education and Science (Mr. Bob Dunn): In their national survey reports Her Majesty's inspectors draw on evidence from all types of inspection, including those which do not result in published reports or have not yet done so. All such survey reports have commented on the state of accommodation of schools or colleges. Undoubtedly, future reports will do the same.
    Mr. Meadowcroft: Why is the Minister so coy about publishing these reports, which are bound to show that teachers are coping remarkably well in appallingly deteriorating conditions? Is he aware that in Leeds there are a number of schools where teachers must double up because they cannot occupy accommodation? I know of one school in west Leeds, Christchurch primary school, where a temporary classroom which has been there since the war cannot be occupied during the winter because it cannot he heated. The report should be published.
    Mr. Dunn: I am somewhat mystified by the approach of the Liberal party in the House on this matter. There are many different types of inspections. Only some of those are intended to lead to the publication of reports. Those that are intended for publication are always published. The House must congratulate the Government on taking the decision in the early part of 1983 to publish the reports of Her Majesty's inspectors of schools.
    Mrs. Virginia Bottomley: I congratulate my hon. Friend on his point about the Government making Her Majesty's inspectors' reports available. Has he seen the recent report which suggests that in inner London, while the majority
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    of lessons were well provided for with small classes and excellent resources, the majority of science teaching lessons were regarded as unsatisfactory or very unsatisfactory? It is the quality of the teachers that counts.
    Mr. Dunn: My hon. Friend is quite right in what she says. Undoubtedly the usefulness of the inspectors' reports is that they can be a lever for the improvement of quality of teachers and that which is taught, and I recognise and welcome that.
    Mr. Duffy: Has the Minister had a chance to study the recently published report by Her Majesty's inspectors on education in Sheffield following a two-year investigation? It highlights much outstanding work. Some of that, notably in my own constituency, is carried out in the type of accommodation which other less impressive local educational authorities have long since left behind. What conclusion does he draw from that?
    Mr. Dunn: The conclusion that I draw from the publication of that report, the recent report on the London borough of Brent, and many other reports which have gone through our Department in recent years is that it is essential to inform people of the state, quality and levels of school activity in the communities in which they live.
    Mr. Nicholls: Does my hon. Friend not have some difficulty in understanding the concern of the hon. Member for Leeds, West (Mr. Meadowcroft) about overcrowding, bearing in mind that the alliance plans to restrict the charitable status of independent schools will drive a great many people who presently educate their children in the independent sector back into the state sector? Would that not increase the sort of overcrowding about which the hon. Gentleman is crying crocodile tears?
    Mr. Dunn: It is worth placing on the record the fact that all the Opposition parties are committed to doing tremendous damage to, or the destruction of, the independent sector.
    Mr. Andrew F. Bennett: Does the Minister not accept that there is overwhelming evidence from the reports of Her Majesty's inspectors of the steady deterioration of school buildings and of the major problems with which teachers are faced in having to work in inadequate conditions? However good the teacher and pupils, if we have buildings where the roof leaks and the windows are unsatisfactory it is extremely difficult to give one's best. What will the Government do about the problems in places such as Sheffield, Leeds and Bradford, with regard to the lack of funds for school buildings?
    Mr. Dunn: I share the concern expressed by the inspectorate and others, who have made clear their point of view about the poor physical state of many school buildings. However, that is not a new event. It springs from the gradual effects of neglect over the past 20 years. I remind the House that the problem in the London borough of Brent had nothing to do with the quality of school buildings; it was the quality of management and the quality of teaching.

    General Certificate of Secondary Education
    Mr. Thurnhamasked the Secretary of State for Education and Science what recent representations he has received about the funding of the GCSE examinations; and if he will make a statement.
    Mr. Dunn: In the past three months we have received 150 representations about the funding of the GCSE examinations.
    The Government have made substantial provision for the successful launch of the GCSE. We look to local education authorities to direct that provision in support of GCSE work in their schools.
    Mr. Thurnham: Will my hon. Friend confirm that a sum of over £250,000 is being provided by the Government for GCSE examinations in Bolton—a sum fully in line with others being provided elsewhere for schools? Will he look into the provision of top-up sums for Bolton council to ensure that sufficient funds are available in total?
    Mr. Dunn: I am happy to confirm what my hon. Friend has said. Last year the Government provided a total of £112,900 for GCSE expenditure in Bolton. This year the Government are providing for expenditure of £60,700, through education support grants for books and equipment. We have also provided £95,000-worth of expenditure for training Bolton's GCSE teachers. I undertake to continue to review top-up expenditure.
    Mr. Ashdown: The Secretary of State keeps on telling us that there is adequate funding for GCSE, but everywhere we hear—from parents, teachers and local education authorities—that there is a desperate situation in the making with too little—[Interruption.]
    Mr. Speaker: Order. Mr. Ashdown.
    Mr. Ashdown: We hear that there is a desperate situation in the making, with too little funding being provided too late and beginning to blight the future of 600,000 children. To resolve this matter, will the Secretary of State take action similar to that which he took in the face of public concern about Brent, by calling for an HMI report to be produced urgently to look into GCSE funding in, say, 100 representative schools across the country?
    Mr. Dunn: I have no need to do that. Her Majesty's Inspectorate judges that these courses have got off to a satisfactory start and that pupils are generally enthusiastic about their GCSE lessons. HMI has said that on average there are sufficient material resources in schools at this stage.
    Mr. Jessel: How much additional money are the Government providing in the current year for GCSE, and how much does that work out per child in the fourth or fifth year on average? Can the Government take action to ensure that the local education authorities do not purloin any of this money for other purposes? Will he ask them to provide an assurance that they are spending that money for the purpose for which it was intended?
    Mr. Dunn: This year the Government's plans provides for the spending of £100 million of GCSE non-teaching costs—that is, for books, equipment, materials and ancillary staff. We shall continue to monitor carefully the resources that local education authorities target to their schools in support of GCSE activities.
    Mr. Radice: Is it not the case that only £25 million is being hypothecated for the GCSE examination? Is not the real truth that head teachers and parents alike recognise that the GCSE examination is under-funded and under-prepared and that there are far too many reports coming in of inadequate supplies of books, equipment and material, as well as shortages of teachers and lack of
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    training? Is it not the case that if we are to rescue this examination from being a damaging failure the Secretary of State must take immediate action?
    Mr. Dunn: This examination and its funding are the best endowed of any examination in recent history. We will, of course, continue to monitor the direction of funds by local education authorities to the funding of GCSE activities, but that, of course, is a matter for them.

    City Technology Colleges
    Mr. Peter Bruinvelsasked the Secretary of State for Education and Science what features of grammar school education he envisages the new city technology colleges adopting; and if he will make a statement.
    The Secretary of State for Education and Science (Mr. Kenneth Baker): My intention is that city technology colleges should develop new ways of improving the quality of education in a number of urban areas drawing on examples of existing good practice in maintained and independent secondary schools, including grammar schools.
    Mr. Bruinvels: Having always admired the work and dedication of staff at all our grammar schools, may I say how much I am encouraged by the news that Leicester is likely to receive a city technology college. I urge my right hon. Friend to give the go-ahead for that college as quickly as possible, as I know how much the students will benefit by the type of system that my right hon. Friend so ably presented to the House. It will certainly encourage all our young children to get on and develop.
    Mr. Baker: I am glad that my hon. Friend is pressing me for a city technology college in Leicester. I very much hope that it will be possible to find sponsors for one—certainly it might be possible to find sponsors elsewhere in the east midlands. I am sure that my hon. Friend will welcome such a college, as it will increase the choice for parents, which is presently limited, for free education from 11 to 18.
    Mr. Janner rose—[Interruption.]
    Mr. Speaker: Order. The hon. and learned Member for Leicester, West (Mr. Janner) is seizing his opportunity.
    Mr. Janner: The hon. and learned Member is very grateful for his opportunity to ask the Minister whether he thinks that Leicester, along with other cities, would be much better served if it had adequate educational resources. That would ensure that we have enough nursery schools, enough facilities for our primary and secondary schools and proper education for older people instead of being starved of resources, the means for which have been cut by this awful Government.
    Mr. Baker: The only opportunities that the hon. and learned Gentleman can seize are those created for him by my hon. Friend the Member for Leicester, East (Mr. Bruinvels). The resources available for city technology colleges are not at the expense of local education authorities' expenditure. The money that has been provided for CTCs is extra money. Therefore, the local education authorities will not lose money through the establishment of such schools.
    Mr. Holt: Would my right hon. Friend care to say that the new CTCs, like grammar schools, will be places of

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    excellence, hard work, discipline and respect for teachers and the opportunities that they present—especially in my constituency, where planning permission has already been granted by the Labour-controlled authority for a CTC 0on Teesside?
    Mr. Baker: Yes, I have been very glad to hear that my hon. Friend's local authority is prepared to provide a site for a CTC in Langburgh. I think that that decision shows the authority's foresight. At least one local company is prepared to come forward—I suspect others will do so—to provide the private funding. I am sure that, as a result of that CTC, the quality of education and the choice available to the parents in my hon. Friend's constituency will be enormously increased.
    Mr. Sheerman: But surely the Secretary of State must now know how damaging and divisive the city technology colleges will be. He has been told that by every major organisation and every reputable expert in the education world. Indeed, recently the director general of the CBI, John Banham, called the city technology colleges an "irrelevancy". What has the Minister to say about that? What has he to say about the more interesting experiments conducted on the Boston pattern to achieve a better relationship with industry, not a divisive one?
    Mr. Baker: Many companies have come forward to support the CTCs.—[HON. MEMBERS: "Name them."] I shall shortly he in a position to announce a third CTC. I assure the Opposition that sponsorship for others has been pledged and, in the course of time, we shall be announcing further CTCs.
    On the question of starving resources, I remind the Opposition that I do not agree that the CTCs will drain off the teachers. The hon. Member for Huddersfield (Mr. Sheerman) should appreciate that the numbers for teacher training this year have shown a dramatic increase. Overall there has been an increase of 14 per cent. in applications for later this year. There has been a 42 per cent. increase for mathematics teacher training, 80 per cent. for physics teachers and about 92 per cent. for craft design technology teachers. That shows that many young people want to go into the teaching profession.
    Mr. Brandon-Bravo: Does not the opposition to this concept indicate the cultural divide between us, because we on the Government side are looking for choice and variety and all the Opposition parties want just one option—the local authority? Is my right hon. Friend aware that in some authorities commercial and planning pressures are being placed upon those who would help this system? I find that utterly disgraceful.
    Mr. Baker: My hon. Friend is right. Those who oppose the principle of city technology colleges do so because they want to maintain the monopoly of the local education authority. We want to provide choice and variety—significant and real choice for parents. The city technology colleges that we have launched point the way to many other types of schools that we have in mind for after the election.

    School Closures
    Mr. Weetchasked the Secretary of State for Education and Science if he will make a statement on the current criteria and practice relating to the closure of schools in rural areas.
    Mr. Dunn: My right hon. Friend considers all proposals for the closure of schools on their merits, but he would expect local authorities and voluntary bodies, in formulating their proposals, to take account of the general principle set out in the White Paper "Better Schools" concerning the size of thresholds at which schools of different types can economically deliver a satisfactory curriculum. They must also take account of the wider considerations, including the distances to be travelled to alternative schools in the event of closure and of the age of the children making those journeys.
    Mr. Weetch: I thank the Minister for that answer. Does he realise that there is a great deal of discontent about, and indeed outright opposition to, the closure of many small rural primary schools? Does he further realise that many of these schools have built for themselves sound reputations with generations of children and that they are a social focus of village life? Will the Minister take it on board that there needs to be a flexible examination of each case, because at present, particularly in Suffolk, there is a great deal of opposition and discontent about these closures?
    Mr. Dunn: As the hon. Member for Ipswich (Mr. Weetch) knows, I have the responsibility for meeting hon. Members from all parts of the House who bring deputations from the communities that they represent about proposals for school closures and amalgamations. The strength of feeling in urban and rural communities is not lost upon me. Under the law, the task to which we have to respond is to consider individual proposals on their merits. I can gladly give the hon. Gentleman the assurance that we do just that.
    Sir John Farr: In view of the great importance of the village schools that are under threat, can my hon. Friend assure the House that he will treat these as special cases? Moreover, in future will he make arrangements to ensure that no closure will be permitted without specific ministerial consent?
    Mr. Dunn: Yes, Sir. There has to be ministerial consent to any proposal in any event, and I have to recognise the degree of support that rural schools may command in local communities. However, we have to consider the educational and financial arguments for closure, as well as the arguments that closures may affect the local community.
    Mr. Matthew Taylor: Is the Minister aware that in Cornwall over 100 rural schools face closure under present Government criteria? Does he not agree that it would make more sense to change those criteria so that the wider community in the villages is taken into account in deciding the future of those small rural schools?
    Mr. Dunn: The hon. Gentleman may care to spend some time reading our draft circular entitled "Providing for Quality". That circular talks about the desirable minimum sizes of different types of school. It was never intended for that minimum size level to be interpreted as narrowly prescriptive. The circular makes it clear that a true assessment of the viability of an individual school must take account not only of its size but of the ethos of the school, the quality, balance and expertise of its teachers and, of course, its non-teacher support, as well as links with neighbouring schools and the community.
    Mr. McCrindle: In secondary education, is it not a fact that comprehensive schools in rural areas, such as Ongar comprehensive school in my constituency, can survive on an entirely different basis of form entry than that which applies to schools in urban areas? As the alternative can frequently be extensive bussing of children from these rural areas, will my hon. Friend give some consideration to altering the basis upon which closures of rural schools are agreed or disagreed?
    Mr. Dunn: I am happy to take that on board. I remind my hon. Friends that our policy allows each set of proposals to be made on its merits. The policies of the Opposition parties would require closure, the elimination of any form of variety and a move to an 11 to 16 comprehensive system with tertiary colleges at their head. We draw back from any embrace of such a restrictive policy.
    Mr. Willie W. Hamilton: Does the Under-Secretary recognise that I gained the distinct impression, after a meeting with the parents of children of the South Brent primary school in Devon, that they would like to see that 110-year-old school closed and a new one provided? Will he ensure that the local authority gets adequate financial assistance to enable it to provide that new school?
    Mr. Dunn: On these matters and on all other matters relating to the South Hams constituency, I advise the hon. Gentleman to see my hon. Friend the Member for South Hams (Mr. Steen).

    Schools (Governing Bodies)
    Mr. Sternasked the Secretary of State for Education and Science when he expects to publish proposals for the transfer of greater financial responsibilities to the governing bodies of schools; and if he will make a statement.
    Mr. Kenneth Baker: I intend to bring forward legislation in the next Parliament to give all secondary and bigger primary schools control over their own budgets.
    Mr. Stern: Has my right hon. Friend seen the excellent article by the chief master of King Edward's school, Birmingham, in The Times this morning, which pointed out that independent schools for many years have benefited from the sort of governing body that my right hon. Friend is now proposing for state schools? Does he agree that state schools have nothing to fear from a system that has benefited independent schools, while at the same time enabled them to retain the benefit of good local authority management?
    Mr. Baker: Yes, Sir. Good schools have nothing to fear from delegation. In fact, delegation will give schools the power to get things done. The article in The Times this morning points the way forward. Where this is already happening in local authorities, head teachers and deputy heads are finding an enormous improvement in the quality of management of the school. I see no reason why, in the course of the next five years, every secondary school and all the large primary schools should not have control of their own budgets — and by that I mean the total amount of money.
    Mr. Corbett: Should the Secretary of State be in a position to influence these matters after the coming election, will he assure the House that before he tinkers
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    with budgetary control he will give a guarantee from the Dispatch Box that every school will have sufficient resources to carry out its responsibilities to our children?
    Mr. Baker: I certainly give that assurance. The hon. Gentleman must appreciate that I have increased education expenditure this year by 19 per cent., which is the largest increase from one year to another. My hon. Friends might well have an early opportunity to put our education policy to a wider test.
    Mr. Raison: Will my right hon. Friend confirm that at the same time as he provides greater financial decentralisation for schools, there will still be an important role for local education authorities to provide educational back-up to schools, particularly weak ones, in most parts of the country?
    Mr. Baker: I certainly agree with my hon. Friend. Local education authorities have the duty of managing the system of education at the local level. They have responsibilities and will continue to have them — for example, for the provision of the school premises, for the salaries of school staff, which delegation schemes have recognised, for special training, for in-service training and generally to help those schools that are not so well managed. I agree with that.
    Mr. Andrew F. Bennett: What is the average level of discounts offered by educational suppliers to local education authorities for the bulk purchase of books and materials? What discussions has the right hon. Gentleman had with educational suppliers as to whether those discounts would be available to individual schools if they were responsible themselves for purchase and payment? Could he also tell us what discussions he has had about the extra pay that might be necessary for head teachers to carry out these extra responsibilities and what extra staff schools will need if they are to have this purchasing and budgetary responsibility?
    Mr. Baker: I deplore the Opposition's negative approach to this proposal. There are 21 education authorities already experimenting along these lines, and where they have been implemented delegation schemes have invariably saved money at a local level. It would be up to the local headmaster, the deputy head and the governing body to make their own decisions about where they purchase, from whom they purchase and all the other matters concerning the running of the school.

    Student Grants (Parental Contributions)
    Mr. Simsasked the Secretary of State for Education and Science what guidance his Department offers as to the level of parental contributions expected from studens awarded maintenance grants.
    The Parliamentary Under-Secretary of State for Education and Science (Mr. George Walden): Parental contributions are assessed in accordance with the mandatory awards regulations. The scale of contributions is published early in the previous academic year and information about parental contributions is included in guidance which is published annually and is freely available.
    Mr. Sims: I am grateful to my hon. Friend for that reply. However, does he agree that the booklet of guidance to which he referred defines the grant as the sum needed

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    for the basic maintenance requirement of a student? Neither he nor our right hon. Friend the Secretary of State have disputed the evidence given by officials to the Select Committee that the total grant is now insufficient to meet the needs of a student. Surely it is misleading to imply that if parents are assessed for a contribution, that contribution together with such grant as is paid would be sufficient to meet a student's needs. Is that not unfair, both to the student and to the parent? Will my hon. Friend ensure that the next issue of the booklet of guidance makes the position much clearer?
    Mr. Walden: The Government have never claimed that the amount provided in grants is sufficient to meet all student needs. We have claimed on a number of occasions, quite rightly, that it must represent a balance between those needs and what the taxpayer can reasonably be called upon to pay for. My hon. Friend makes a fair point. The booklet is revised every year, and the wording is being re-examined.
    Mr. Foulkes: As the Minister has admitted that the total level of grant is not sufficient to meet a student's needs, from where does a student with poor parents get the rest of the money?
    Mr. Walden: The hon. Gentleman is clearly not very familiar with the grant system—
    Mr. Foulkes: Yes, I am.
    Mr. Walden: —because pupils with poor parents are the pupils who have the highest level of grant. Whether or not pupils have poor parents, they are able to use their spare time in holidays to earn other income. If we believed that the present system was fully satisfactory we would not be carrying out a review, the purpose of which is to improve the position of all students.
    Sir John Biggs-Davison: Since my hon. Friend last answered questions in the House, has there been any greater clarity attained or confusion reduced among the so-called alliance parties on the matter of student loans?
    Mr. Walden: I am now perfectly clear about the alliance's position. There are two policies. The first policy is that of the right hon. Member for Plymouth, Devonport (Dr. Owen), who is in favour of loans. The second policy is that of a more abstract entity that is known as the alliance, which claims to be against student loans. I should like to take this opportunity to commend the position of the right hon. Member for Devonport, who has a habit of reminding people of the importance of probity in politics. I am sure that the whole House will join me in commending the stand that he is taking on principle and not retracting the speech that he made on 14 February 1986 in favour of student loans.

    Teachers (Pay and Conditions)
    Mr. Greenwayasked the Secretary of State for Education and Science when he expects to appoint members of the interim advisory committee on teachers' pay and conditions; and if he will make a statement.
    Mr. Kenneth Baker: I shall appoint the committee this summer.
    Mr. Greenway: Will my right hon. Friend accept that it was the divisions between the teacher unions and the outdated majority voting system that killed stone dead the
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    Burnham committee on teachers' pay and conditions? Will he accept that there is an urgent need for a post-interim advisory committee on teachers' pay and conditions to he set up as soon as possible and that it will have to he different from the previous Burnham committee, for example, in not having a majority voting system?
    Mr. Baker: I have made it clear that the proposals that the Government have put forward are of an interim nature. We want to find a permanent machinery for the determination of teachers' pay and conditions. The proposals that I have seen, which are tentative so far, are in fact a revamped Burnham. The president of the Assistant Masters and Mistresses Association, Mr. Frank Groarke said in his address to the conference at Easter that some unions use the Burnham committee as a recruiting tent rather than as a negotiating body. I am not prepared to go back to a revamped Burnham. I want to find a way forward to determine a permanent machinery for the determination of teachers' pay and conditions, because I can assure the House that neither I nor any holder of my office wants to be the determiner of teachers' pay and conditions.
    Mr. Flannery: Does the right hon. Gentleman remember that, in response to a question from me last Thursday, the Prime Minister said that the Government would
    "use the coming years to secure a new negotiating arrangement"?—[Official Report, 23 April 1987; Vol. 114, c. 790.]
    The two major unions, which represent the vast majority of teachers, met because of that answer and were outraged at what the Prime Minister had said. I do not know whether the Prime Minister tells the right hon. Gentleman, but she must have received a joint letter from those two unions today, in which they say that if she will discuss—[Interruption.]
    Mr. Speaker: Order. The hon. Gentleman should ask a question, not make a statement.
    Mr. Flannery: I am asking a question Mr. Speaker. Does the right hon. Gentleman know that the Prime Minister has received a letter today in which those two unions make it clear that if she will agree to negotiate properly about next year's wage arrangements they will see her, but they want a promise first, and that is the only way in which our children can have an uninterrupted education?
    Mr. Baker: I am aware that a letter has been sent to my right hon. Friend the Prime Minister asking for a meeting between Mr Jarvis and Mr. Smithies and my right hon. Friend. I can see no reason why my right hon. Friend should see those two union leaders, because six weeks ago I invited them to see me and they declined to do so. Those are the only two union leaders who have not seen me. The other four union leaders have discussed with me the draft order before the House, which I understand might be debated quite soon. The other two leaders have refused to come in and make their views known. I have made it clear that I do not want to be the determiner of teachers' pay and conditions. All interested parties will find it difficult readily to agree on a permanent machinery, but there must be no going back to the form of negotiations under Burnham.
    Mr. Pawsey: Will my right hon. Friend confirm that the interim committee, as its name suggests, is of temporary

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    duration and that its maximum life will be until 1990? Will he further confirm that the committee is designed to provide a breathing space between the demise of the Burnham committee and the introduction of new negotiating machinery? Will he repeat to the House his invitation to union leaders to meet him to discuss new machinery for negotiating teachers' pay and conditions? Will he confirm that two and a half years is a long time and that that period should be reduced?
    Mr. Baker: There is no reason why the interim advisory committee should continue to operate until 1990. I wish to confirm that to the House. Later this year I want to meet the teachers unions, the local education authorities, churches and parent-teacher associations to try to find a permanent machinery. There are many models, ranging from a joint negotiating committee to a review body. Suggestions have been made that specific recognition should be given to the position of heads and deputy heads.
    Mr. Spearing: The Secretary of State has constantly asserted the importance of an interim measure. Does he agree that consent is an important element in all educational processes? Why did he not set up a tribunal of mutally acceptable persons to determine the interim procedure for negotiations? Would that not have produced a better atmosphere and been the most responsible thing for him to do?
    Mr. Baker: I did something rather better. I brought a Bill to the House, which was debated in this House, and in the House of Lords, without any guillotine or restriction on debate. All proposals were put forward during debates on that measure. As to the negotiating rights that are being claimed at the moment, one of the unions which is most strident in claiming those rights, the NAS/UWT, has for the past year sat on the sidelines and refused to take a constructive part in the negotiations, which were suspended, and organised disruptions while the negotiations were continuing.
    Mr. Patrick Thompson: Will my right hon. Friend accept that there is a world of difference between the appalling image of the teaching profession that is put across by the Easter conferences, or some of them, and the reality of the many good and moderate teachers who are doing good work in classrooms in Norwich and up and down the country? Will my right hon. Friend describe the ways in which he will help to restore the confidence of those good teachers in the way ahead in these negotiations and talks?
    Mr. Baker: I completely agree with my hon. Friend. At the Easter conferences we saw on our television screens a parade of militants. The majority of teachers are dedicated people. They are rightly held in high regard by the community. What we saw over the Easter weekend was a meeting of union activists. The disruption and chaos that are talked of should not be exaggerated. Before Easter, about 1 per cent. of schools were disrupted. Although that is small, it is unacceptable, because any disruption is unacceptable. Disruption is unjustified. Teachers will receive an increase of 16 per cent. this year and at the end of May will have substantial back-pay increases of several hundred pounds in their pay packets.
    Mr. Radice: Is it not the case that in their letter to the Prime Minister today the teacher unions offered a way out of the present impasse and showed the way to peace in our
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    schools? They made it clear that if the Government were prepared to agree to the restoration of negotiating rights for the 1988 pay round they would call off their action. Will the Secretary of State tell the House that either he or the Prime Minister will immediately arrange a meeting with the unions to discuss their constructive new initiative?
    Mr. Baker: Six weeks ago I invited the leaders of the two unions to see me, but they decided not to come in. I saw the leaders of the other unions and they expressed their views about the new negotiating machinery. I reiterate that I am willing later this year to meet the teacher unions and the local education authorities, which, I understand, are sending me proposals, because I wish to reconfirm that in no way do I or the holder of my office wish to be the determineor of teachers' pay and conditions. We need a new permanent machinery, but so far the proposals that have been put to me are nothing more than a revamped Burnham.
    Mr. Dykes: Contrary to the bluster and histrionics of the hon. Member for Durham, North (Mr. Radice) and the teacher union conferences, will my right hon. Friend confirm that his moderate approach is the best way to obtain peace again in our schools, which will be supported by the vast majority of moderate and sensible teachers, provided that there is a real commitment to the restoration of negotiating rights as soon as possible?
    Mr. Baker: I confirm that fewer than I per cent. of the profession are likely to disrupt schools this week. That is deplorable in view of the settlement that has been made. I confirm, as I said earlier, that we must find a more permanent machinery. That will be difficult in view of the different opinions of the various union leaders, but I shall persevere and try.
    Mr. Ashdown: Does the Secretary of State realise that, almost certainly, he has within his hands the power to end this disruption if he will stop mouthing words and take action—[Interruption.]
    Mr. Speaker: Order.
    Mr. Ashdown: With the permission of the public school Benches opposite—
    Mr. Speaker: Order. I look after that.
    Mr. Ashdown: —almost any action to begin to restore to teachers their rights to negotiate pay and conditions? Does he not realise that if he will not do that many in the country will draw the conclusion that he is cynically and deliberately playing into the hands of the militants for votes, scarificing peace in our schools for Tory advantage in the ballot box.
    Mr. Baker: The hon. Gentleman could not have heard me. I have invited these two union leaders to come in and they have declined to do so. I want to find a permanent machinery as soon as possible, but the hon. Gentleman should not disguise from himself the great difficulty when the different unions have different interests and different views on what such machinery should be.
    Mr. Spencer: Is my right hon. Friend aware that the NUT in Leicestershire has called for the reinstatement of the teacher who was sent to prison for dangerous drug offences? Does that not display an attitude to teachers' conditions which no responsible parent would share?
    Mr. Baker: I read a report of that and I find that request quite deplorable. Those who have been convicted of dealing in drugs should not in future be allowed to be in charge of children.

    General Certificate of Secondary Education
    Mr. Pikeasked the Secretary of State for Education and Science if he will make a further statement on the progress of the GCSE examination.
    Mr. Dunn: Last September some 600,000 pupils started courses which will lead to the first GCSE examinations in the summer of 1988. These courses have got off to a satisfactory start. The vast majority of teachers are committed to making a success of the new examination and the majority of lessons are deemed to be of an adequate quality and standard.
    Mr. Pike: How can the Minister stand before the House and give such a complacent reply, which is so obviously at variance with the views of the majority of people in education, who believe that there has been insufficient preparation for the GCSE and that insufficient resources are available for the examination? How does he equate the £100 per student figure which the Secretary of State claims is the figure, with Lancashire county council's figure, which is nearer £30?
    Mr. Dunn: Opposition Members ought to behave better than that. Continually to run down a major and successful change in the examination structure of this country simply will not do.

  PRIME MINISTER

    Engagements
    Mr. Budgenasked the Prime Minister if she will list her official engagements for Tuesday 28 April.
    The Prime Minister (Mrs. Margaret Thatcher): This morning I had meetings with ministerial colleagues and others. In addition to my duties in the House, I shall be having further meetings later today.
    Mr. Budgen: Will my right hon. Friend find time to come to Wolverhampton and explain that strict control of immigration is essential to any improvement in race relations? Will she stress that the number of people coming to this country for settlement from the New Commonwealth and Pakistan has dropped from 34,000 in 1980 to 22,500 in 1986? Will she, further, allow the Opposition parties the opportunity to explain how their proposed repeal of the present system of immigration control, and its relaxation, is likely to improve race relations?
    The Prime Minister: I agree with my hon. Friend that the numbers coming to this country through immigration have dropped. It is our intention to remain firm on immigration control. I agree with my hon. Friend that we should question the Opposition about their proposals to repeal the Immigration Act 1971 and the British Nationality Act 1981, which are the heart of our immigration control.
    Mr. Kinnock: Will the Prime Minister tell us whether she is actively opposed to any increase in the rate of VAT or any extension in its scope?
    The Prime Minister: There is no way in which a Government of any political colour can say that they will never increase either value added tax or income tax. It was a Labour Government who extended the standard rate of VAT to petrol and snack foods. In November 1974 that Government put a new value added tax of 25 per cent. on petrol, and later extended the higher 25 per cent. rate to television sets, radios, electric domestic appliances, cameras, jewellery, boats and caravans. There is no way in which a responsible Government can say that there will be no increase whatsoever in any particular tax.
    Mr. Kinnock: I did not ask the Prime Minister to make guesses. I asked her whether she is opposed to an increase in the rate of value added tax, yes or no? Is she opposed to an extension in the base of VAT? Does the Prime Minister accept that as she said in 1979 that the Government had no intention of raising VAT and then increased it by 87 per cent., the people of this country are rightly concerned when she dodges in the way that she does?
    The Prime Minister: I call the right hon. Gentleman's attention to the entire record on value added tax. — [Interruption.]
    Mr. Speaker: Order. The Prime Minister is entitled to a hearing.
    The Prime Minister: VAT was introduced at the standard rate of 10 per cent. The zero rate covered food, fuel, new housing, public transport, young children's clothing, and so on. On 1 April 1974 the Labour Government extended the base of VAT to petrol and snack foods. Just before the next election they cut the standard rate to 8 per cent. Following that election they raised the rate to 25 per cent. on petrol. Following that, they raised the rate to 25 per cent. on television sets, radios, electric domestic appliances, cameras, jewellery, boats and caravans.
    The right hon. Gentleman is trying to distract attention from his party's colossal public expenditure, and it was the Labour Government who put up value added tax.
    Sir Trevor Skeet: Is my right hon. Friend aware of the bogus election propoganda—[Interruption.]
    Mr. Speaker: Order. There is so much noise that I cannot hear whether the question is in order. I hope that it is.
    Sir Trevor Skeet: Is the Prime Minister aware of the bogus manifesto on the Conservative—
    Mr. Speaker: Yes, but it is not the Prime Minister's responsibility.
    Sir Trevor Skeet: Is my right hon. Friend not aware, too, that the Labour party has put forward this manifesto as it has no policies of its own?
    The Prime Minister: We are used to smears and scares.[Interruption.]
    Mr. Speaker: Order.
    The Prime Minister: We are used to smears and scares from the party in opposition. May I give the House an example? During the last election campaign the hon. Member for Crewe and Nantwich (Mrs. Dunwoody) said that if the Tories were allowed to win the election they would within five years put an end to the National Health Service—[Interruption.]
    Mr. Speaker: Order. I sense an electioneering atmosphere.
    The Prime Minister: Since 1978 expenditure on the National Health Service has increased from £7·5 billion to nearly £20 billion this year, an increase of 31 per cent. after allowing for inflation. We have had the VAT scare before, when it has been alleged that we were going to put VAT on food. I gave an undertaking in 1984 that we would not put VAT on food. It was the party that is now in opposition that did that.
    Mr. Steel: Will the Prime Minister agree that there can be no cover-up of treason and that the secret services cannot be allowed to operate as a state within a state? Would it not be healthier if, instead of spending time and effort trying to stuff various cats back into their bags, the Government were to make a frank statement to the House and set up a new inquiry into the operation of the secret services?
    The Prime Minister: As the right hon. Gentleman is aware, I have no ministerial responsibility for events before this Government came to office. There is nothing that I can add to the statement made by the right hon. Member for Cardiff, South and Penarth (Sir J. Callaghan) in 1977, and Lord Wilson associated himself at that time with that statement. I believe that there was a Lib/Lab pact at the time, too.
    Sir William Clark: Does my right hon. Friend agree that if only half the promises of the Labour party were implemented there would be not only a massive increase in VAT but a massive increase in the standard rate of income tax?
    The Prime Minister: I agree totally with my hon. Friend. The fact is that we are the party that reduces taxation, and the Opposition are the party that increases public expenditure and votes against the reduction of income tax.
    Mr. Dubsasked the Prime Minister if she will list her official engagements for Tuesday 28 April.
    The Prime Minister: I refer the hon. Gentleman to the reply that I gave some moments ago.
    Mr. Dubs: Is the Prime Minister aware that when Lazard Brothers was advising Westland at the time of the takeover, a closely associated Swiss bank, Fils Dreyfus, took part in an illegal concert party to buy Westland shares? Is she further aware that that conspiracy to achieve her policy objectives looks even worse when one considers that her former Defence Secretary, Sir John Nott, is chairman of Lazards, and that one of her advisers, Mr. Gordon Reece, is a public relations adviser with that bank? In view of the nasty smell arising from that, does the Prime Minister agree that a Companies Act investigation should be set in motion urgently?
    The Prime Minister: The hon. Gentleman knows that a decision was taken not to do that because there was insufficient evidence at the appropriate time. If the hon. Gentleman has any evidence, which, I suspect, he does not, perhaps he will give it to the proper authorities.
    Mrs. Ann Wintertonasked the Prime Minister if she will list her official engagements for Tuesday 28 April.
    The Prime Minister: I refer my hon. Friend to the reply that I gave some moments ago.
    Mrs. Winterton: Is my right hon. Friend aware that the National Society for the Prevention of Cruelty to Children holds its annual general meeting tomorrow? Will she join me in paying tribute to that organisation for the important and sensitive work that it undertakes on behalf of children? Furthermore, will she approach our right hon. Friend the Home Secretary and give him every support and encouragement in introducing new ways to enable abused children to give evidence without added trauma?
    The Prime Minister: I gladly join my hon. Friend in paying tribute to the NSPCC, which many hon. Members on both sides of the House have supported for many years. My right hon. Friend the Home Secretary will issue a paper next month on the use of video and other evidence to enable children better to give evidence about what happened in their case.
    Mr. Nicholas Brown: Has the Prime Minister had an opportunity to read yesterday's edition of The Independent and the serious allegations that are contained therein? Can she give the House an explanation of why the Government are trying to cover up those matters rather than trying to investigate them, as they should do? Does the Prime Minister not realise that—
    Mr. Speaker: The hon. Gentleman must bear in mind the sub judice rule in this case.
    Mr. Brown: I am trying carefully to do that, Mr. Speaker. Does the Prime Minister not realise that she is giving the country the impression that the Government regard themselves as the beneficiaries of past MI5 mistakes?
    The Prime Minister: The hon. Gentleman will be aware, in spite of his attempt to get round it, that I have no ministerial responsibility for things that happened before I came to office. He will also be aware that there was a statement in the House that those events had been inquired into at the time, and that the previous Prime Minister, Lord Wilson associated himself at that time with the statement. He will be further aware that I have been the first to make statements on specific security matters when I have thought it proper to do so.
    Mr. Sternasked the Prime Minister if she will list her official engagements for Tuesday 28 April.
    The Prime Minister: I refer my hon. Friend to the reply that I gave some moments ago.
    Mr. Stern: Will my right hon. Friend reassure my constituents and the many other people who live around the Severn estuary by saying that, at least as far as she is concerned, the substantial risks that are posed to the environment, industry, ports and public health from the threat of the Severn barrage will be overridden only if there is a clear and overwhelming national need for such a barrage?
    The Prime Minister: The studies of the barrage by the Severn Tidal Power Group are supported by the Central Electricity Generating Board and the Department of Energy. Those studies include environmental and regional issues and they will be discussed with all interested parties. Any future decision on the barrage will include consideration of all the relevant factors, including those two important factors.
    Mr. Mason: The Prime Minister is undoubtedly aware of the turbulence and unease in the Province of Northern

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    Ireland due to the increased terrorist activity of the Provisional IRA. She will now also be aware of the conclusions of the security conference that was held in Stormont castle last night. What new measures does she intend to introduce to combat the increased activity of the terrorists in the Province?
    The Prime Minister: I am sure that the right hon. Gentleman would and probably did join yesterday in
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    condemning the vile and cowardly acts that took place against Lord Justice and Lady Gibson and other members of the security forces. I have been in touch with my right hon. Friend the Secretary of State for Northern Ireland, and will continue to be in touch with him later this week. I am sure that the right hon. Gentleman will understand that we do not make statements about extra security measures.

State Security
3.31 pm
Mr. Speaker: I have a brief statement to make, which may be helpful to the House.
It might be helpful if I expand on the ruling that I gave last night in response to a point of order from the hon. Member for Linlithgow (Mr. Dalyell) about the extent to which issues connected with the publication of a book by Mr. Peter Wright are at present sub judice.
What may not now be discussed are the Attorney-General's decisions to bring proceedings against certain British newspapers and the action of the newspapers in publishing what they did. The content of the newspaper articles and the information they reveal are not sub judice, and hon. Members may continue to refer to those matters in debate and at Question Time.
In this context there is a further point to be made clear to the House. There are today no new developments by way of further details from Mr. Wright's book which would allow me to consider the exercise of my discretionary power to grant an emergency debate under Standing Order No. 20. I am bound by the requirement in that Standing Order as to the time by which applications must be made, and such an application was made yesterday. Hon. Members are familiar with the many opportunities open to them as individuals, as well as to the official Opposition and the other Opposition parties, to raise matters of their choice. We have an example of an Opposition Day today. It is important that hon. Members should pursue their wish to raise these matters with Ministers through the opportunities made available to them, and not seek to debate them with me through thinly disguised points of order when I am in no position to help.
3.32 pm
Mr. David Steel: On a point of order arising from your statement, Mr. Speaker. Yesterday morning I tabled an early-day motion calling on the Prime Minister to stop hiding behind the statements of 1977 and to deal with the new revelations of Mr. Peter Wright. That motion was accepted in the Table Office and, accordingly, in the afternoon was released to the press.
At about 6 o'clock you were informed that the Attorney-General had taken new proceedings against The Independent and other newspapers and accordingly you ruled that my motion had become sub judice. I have absolutely no quarrel with that ruling. However, the motion is open for members of the public and, indeed, hon. Members to read in this morning's newspapers. The one place they cannot read it is on the Order Paper of the House of Commons. Is that not symptomatic of what is happening to us during all these discussions? There can be widespread discussion in editorials and articles in newspapers, but the one place we cannot adequately discuss the matter is here in the House.
Is it open to you, Mr. Speaker, as our Speaker, to put it to the Government that continued recourse to the courts is hindering us in one of our most fundamental duties, which is the protection of the very democracy that we are here to represent?
Mr. Speaker: The right hon. Gentleman gave me notice that he would raise this matter. It is correct that he tabled
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a motion yesterday morning. At that time no action had been taken by the Law Officers regarding the newspaper article on the alleged events of 1977 relating to intelligence matters. The motion was in order, so was sent to the printers. However, later in the day action was announced by the Law Officers and, as the House knows, I ruled that that brought the sub judice rule into play. This meant that the right hon. Gentleman's motion could no longer go ahead. He was so informed, but I understand that it was not until today that the relevant message reached him. It will, of course, be open to the right hon. Gentleman to decide, after any court proceedings are concluded, whether he wishes to renew that motion in its original or some other form.
Mr. Neil Kinnock: On a point of order, Mr. Speaker. The whole House, naturally, will accept your ruling and indeed applaud the way in which you have been good enough to set out in the form of a statement the thoughts that guide you and the way in which you intend to conduct affairs.
Could I refer to part of that statement—notably the following short sentence:
"What may not now be discussed are the Attorney-General's decisions to bring proceedings against certain British newspapers and the action of the newspapers in publishing what they did"
and address myself to what I believe to be a point of order which is fundamental to the conduct of order in this House.
First, while everyone can see the validity of what we consider to be the sub judice rule, because it ensures that not even proceedings in this House can influence the conduct of a case before the courts, when it is also the case that every newspaper in the world outside Britain, and indeed English language newspapers some editions of which are published in Britain, can to their heart's content refer to and examine the issues thrown up by the case in point, I wonder whether there is a case for a reappraisal of the traditions of the House in order to establish exactly where our boundaries of the sub judice rule are drawn in this age of very easy international communication, an age for which it is possible that — in some respects — our proceedings are not properly equipped.
Secondly, can I also put the point to you, Mr. Speaker, that it certainly is the case, as the right hon. Gentleman the leader of the Liberal party earlier said, that security is indivisible and that security and its requirements must command the general support of hon. Members on all sides of the House, elected as they are by the people of this country. There is, however, a profound question when an issue relates to security and has remained outside the public domain, and when an issue has received such breadth of coverage as to give the impression that it is the Government's political interests that are being safeguarded rather than the interests of security.
I raise these matters because they are fundamental to the relationship between this democratic House and a democratic and free press and the conduct of Government in our country. I would certainly be more than prepared to ask you to reflect further, and to have time to reflect, upon the issues raised in this particular case, since the last thing that any democrat could want is the creation of a precedent in this case that would effectively blanket out free expression in this country in the way that the Government so clearly want.
Mr. Speaker: The Leader of the Opposition has raised a point of order with me and I must say to him and to the whole House that I am bound by the sub judice rule as it is operated in this House. If the House wishes to the resolutions on sub judice, it is open to it to raise that matter with the Select Committee on Procedure and no doubt this important matter will receive fresh consideration. But it might be for the advantage of the House if I were to set out the sub judice rule as referred to in "Erskine May" on page 429. It is this:
"matters awaiting or under adjudication in all courts exercising a criminal jurisdiction … should not be referred to (a) in any motion (including a motion for leave to bring in a Bill), or (b) in debate, or (c) in any question to a Minister including a supplementary question:"
The case brought by the Attorney-General is of a criminal character and it was set in motion by the Attorney-General's application yesterday. I am bound by that rule.
Mr. Tony Benn: As you know, Mr. Speaker, I am seeking to move Standing Order No. 20 today in a way that does not either breach the sub judice rule or breach the rule that new material is required for urgency to be attracted to the motion. I have listened very carefully to your ruling, Mr. Speaker, but it relates to action by the Government against The Independent, and the general ruling about Standing Order No. 20 is that there should be new material. Accordingly, in the light of the Prime Minister's statement today that she would make no statement, I have sought to base my Standing Order No. 20 on that fact. The allegations that have been made and that are now in the public domain and noted in the pages of Hansard—I placed them there yesterday—are very serious in character—
Mr. Speaker: I can help the right hon. Gentleman. I have received from the right hon. Gentleman an application under Standing Order No. 20 which is in different terms from the application that he made yesterday. I am quite prepared to hear it, but is the right hon. Gentleman seeking to make it now? If he is, I will hear it.
Mr. Benn: I was seeking your advice as to whether you would hear it, Mr. Speaker.
Mr. Speaker: I have said I will.
Mr. Benn: I beg to ask leave to move the Adjournment of the House under Standing Order No. 20 for the purpose of discussing a specific and important matter that should have urgent consideration, namely,
"the refusal of the Prime Minister to answer a question about the new situation in relation to statements made by a former MI5 officer that he and others attempted to subvert an elected Government".
This application arises directly from the Prime Minister's refusal to make a statement about those allegations, which are now in the public domain and are quoted in yesterday's Hansard, about illegal acts by the security services, and, therefore, that information was not available yesterday. Secondly, this does not relate to the court case against—[Interruption.]the—
Mr. Speaker: Order. A submission is being made to me. I cannot hear it — [Interruption.] I call for order on both sides of the House.
Mr. Benn: This does not relate to the court case. Indeed, the application goes to the root of the matter, that an MI5 officer has stated that he and other MI5 officers attempted
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to subvert Her Majesty's Government in 1974. Today the Prime Minister made a most remarkable statement that the Law Officers have no responsibility for enforcing the law where breaches occurred before they came into office. That is an unprecedented statement for a Prime Minister to make.
Since the allegations relate to members of all three parties, to my right hon. Friends who, along with me, sat in Government, to others, including the leader of the alliance party, who was then in that Government—and indeed some of the allegations relate to the right hon. Member for Old Bexley and Sidcup (Mr. Heath), who was the Leader of the Conservative Government—it is not a party but a constitutional matter. Given its constitutional importance and its obvious urgency, I submit that this is a matter that is uniquely appropriate for Standing Order No. 20 application and that it would be quite wrong to ask Members who raise this matter to seek a remedy through the use of Supply days.
Finally, Mr. Speaker, I appeal to you most earnestly to use your discretion under our Standing Order, to allow a hearing of these grave allegations of subversion and sedition against an elected Government, which the Prime Minister herself has an obligation to undertake, arising from her office and the oath that she has taken as a Privy Councillor.
It is on that constitutional and House of Commons basis, Mr. Speaker, that I ask you, now—or later, if you want to give it further consideration—to afford this matter the urgency that it deserves and not to push it off to what may be the party interest of those parties that have access to Supply days.
Mr. Speaker: The right hon. Member for Chesterfield (Mr. Benn) 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 refusal of the Prime Minister to answer a question about the new situation in relation to statements mady by a former MI5 officer that he and others attempted to subvert an elected Government".
I have listened with great attention to what the right hon. Gentleman said, but I regret that I do not consider that the matter that he has raised is appropriate for discussion under Standing Order No. 20. I cannot therefore, submit his application to the House.
Mr. D. N. Campbell-Savours: On a point of order, Mr. Speaker.
Mr. Martin Flannery: On a point of order, Mr. Speaker.
Mr. Speaker: Not to challenge that ruling. I will take Mr. Campbell-Savours first.
Mr. Campbell-Savours: In your ruling on the sub judice aspect of this matter, Mr. Speaker, you quoted from "Erskine May". I notice that you quoted the second half of the sentence. The first half of that sentence says:
"Subject to the discretion of the Chair".
Therefore, I put it to you that you have some discretion according to "Erskine May" as to whether these matters should be taken as sub judice in the House. It is on that basis that I raise my point of order.
We are informed that the sub judice ruling relates to a contempt by The Independent and others about proceedings brought by the Attorney-General against The

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Observer and The Guardian which will be heard in the House of Lords in June. The proceedings will be before the Law Lords. The question is: do the proceedings in the Lords deserve the protection of sub judice? Could the Law Lords truly be influenced in their judgment by public debate on these matters? Of course, your ruling would preclude debate in this Chamber—[Interruption.]
This point of order is utterly legitimate and genuine. Hon. Gentlemen would do well to listen and learn.
I put it to you, Mr. Speaker, that whereas there is good reason to believe that juries can be influenced and that, therefore, sub judice considerations should determine what Parliament can be free to debate, there is equally good reason to believe that judges and Law Lords could never be influenced by public debate. This case was made during the judgment in the Attorney-General v Times Newspapers Ltd in 1974. That judgment followed upon publication of an article by The Sunday Times. The noble Lord Reid said:
"But I must add to prevent misunderstanding that comment where a case is under appeal is a very different matter. For one thing it is scarcely possible to imagine a case where comment could influence judges in the Court of Appeal or noble and learned Lords in this House. And it would be wrong and contrary to existing practice to limit proper criticism of judgments already given but under appeal."
I put it to you Mr. Speaker, that the Law Lords clearly do not need or require the protection of sub judice. It is their case that they would not be influenced by wider debate. Therefore, in considering these matters, if you made your judgment on the basis that the Law Lords need protection when they examine these matters in June or July, I put it to you that you might care to reconsider the matter because they themselves clearly do not subscribe to that view. If they are correct, it would not be necessary for you to apply the sub judice rule to our proceedings on these matters.
Several Hon. Members rose—
Mr. Speaker: May I deal one at a time on this matter? I read comment to this effect in a newspaper this morning so I have had an opportunity to look into the matter in great depth, which I have done. The sub judice rule is a self-denying ordinance made by the House to avoid the appearance of the Legislature seeking to influence the courts. Whether they would be influenced is a different matter. I must say to the House and to the hon. Gentleman that I have already explained the large area that remains open to debate, unaffected by the new case. I am not prepared to allow references to this case itself.
Mr. Andrew Faulds rose—
Mr. Flannery rose—
Mr. Dennis Skinner rose—
Mr. Anthony Nelson rose—
Mr. Speaker: I will take Mr. Nelson first.
Mr. Nelson: Further to that point of order, Mr. Speaker, arising out of your statement and the points on Standing Orders which were made by Opposition Members. What the House has been treated to this afternoon is not just an abuse but a series of bogus and mischievous points from Opposition Members. Will you be good enough, Mr. Speaker, to advise them that what is wrong is not the rules and conventions of the House but
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the way in which they seek to table mischievous motions and raise mischievous, misleading and irresponsible points during Question Time? If they were to exercise a self-denying ordinance, no problem would arise.
Several Hon. Members rose—
Mr. Speaker: Order. In the interests of the Opposition day debate, in which there is a great demand to speak, I shall take all points of order at once.
Mr. Flannery: Further to that point of order, Mr. Speaker. My point of order will be brief, and it springs from the fact that the answers given so far have caused a great deal of confusion among us. I want to try to get at the realities. I know that you are bound by what has happened but, having said that, surely it is obvious—at least, it is to me in probably a simplistic way — that contempt of the House is anything that brings the House into contempt. When the entire world can discuss a matter and the House cannot, I think that the rest of the world has a right to be contemptuous of the House. Therefore, I am seeking some way in which a cause of intense and massive public concern can be dealt with in the House, and I am concerned that outside the House millions of people will think, rightly or wrongly, that a device has been used to prevent the House discussing something which is of public concern.
Mr. Edward Leigh: Further to that point of order, Mr. Speaker. You have often said that you wish to protect the rights of Back-Bench Members. Many Back-Benchers may want to take part in the important debate on housing, which affects people, and not listen to bogus points of order about an issue which was dealt with fully by the right hon. Member for Cardiff, South and Penarth (Sir J. Callaghan) many years ago. We all know that the only person who has successfully destabilised the Labour party has been the right hon. Member for Chesterfield (Mr. Benn).
Mr. Faulds: Further to that point of order, Sir. It is quite clear that the Government consider that considerations of confidentiality are more important than any examination of attempts to subvert a previous Administration. The Prime Minister is being somewhat disingenuous in saying that she can do nothing about examining these matters.
Is it not the case, however, that criminal events in the historic past can certainly be raised and enquired into by the Law Officers of any subsequent Government? And is it also not the case that if the Prime Minister really wanted to clear the air about this matter and look at the many misdemeanours of MI5 over the last few years she could establish a Royal Commission perfectly easily to examine all these issues, including the attempt to subvert a previous Government?
Mr. Richard Holt: Further to that point of order, Mr. Speaker. Would it not have been in order for the Opposition, any time until early this morning, to have altered the business? If the Opposition Front Bench was so concerned to have this matter debated publicly, its spokesmen could have done so within the confines of sub judice laws if they were skilful enough at debating and oratory in the House. The fact that the Opposition Front Bench spokesmen have failed to do shows clearly that they do not want the subject debated.
Mr. John McWilliam: Further to that point of order, Mr. Speaker. What concerns me are your own words. It is quite right that "Erskine May" has the sub judice rule in it to dissuade the Administration from undue influence on the courts of this country. But there are two points here. First, "Erskine May" is not part of the Standing Orders of the House; it never has been and never will be. Secondly, although the sub judice rule is part of the resolutions of the House, I do not believe that it was ever intended to prevent the House from debating something which was more important than the role for which it was implemented.
In other words, why are we now prevented from debating a problem where someone has made serious allegations concerning the high crime of treason on the basis that a case has been brought under section 2 of the Official Secrets Act, which bears a much lower penalty in a lower court? That is the difficulty in which the House finds itself, and it is the high crime of treason allegedly perpetrated by the security services to which the House wishes to address itself, but has been prevented from doing so by the actions of the Executive.
Mr. Tony Marlow: Further to that point of order, Mr. Speaker. I think that in these circumstances hon. Members should try to help. If I may, I have got a helpful suggestion. The events that are referred to happened many years ago at the time of a Labour Government. They concerned a Labour Prime Minister. Some 10 years ago, another Labour Prime Minister made a full statement to the House saying what the circumstances were, and the whole matter was then cleared. It seems now that allegations are being made about the security services. The possibility is that the security services behaved improperly, but I would put it to you also, Mr. Speaker, that it is quite possible that the security services behaved properly and that the noble lord, Lord Wilson had some questions that should be answered. I would be grateful—
Mr. Speaker: Order. The hon. Gentleman said he was going to be helpful. I do not think that is very helpful.
Mr. Marlow: In fairness to the noble Lord, Mr. Speaker, can you advise the House as to whether there is any organisation or institution within the House which the noble Lord Wilson could address to clear his name?
Mr. David Winnick: Further to that point of order, Mr. Speaker. The Prime Minister said that she had no responsibility because these events took place before she took office. That is not in dispute, yet in November 1979 the Prime Minister made a statement about Blunt. If she was willing to make a statement about Blunt and his treachery, and events that certainly occurred before she became Prime Minister, what possible excuse can there be for denying us a statement about the allegations that have been made? I put this point to you Mr. Speaker, because it is the essence of this debate.
We live in a parliamentary democracy. Everyone who comes here is apparently committed to the maintenance of our democracy. Allegations have been made, that not one or two but 30 officials in the security service during the 1970s were deeply involved in treachery and subversion. It may be that the allegations are just lies. It may be that Mr. Wright is not telling the truth, but, if Mr. Wright is telling the truth, if these allegations have a great deal of
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substance about them, how is it that the House of Commons can be denied the opportunity of any debate on the flimsy grounds that the events happened to occur before the Government took office? Are we going to be in a position that we cannot have a debate unless it is in Opposition time?
Mr. Peter Shore: Further to that point of order, Mr. Speaker. It is perfectly clear to every hon. Member that you are not responsible for the failure of the Prime Minister to answer perfectly legitimate — indeed, more than legitimate — questions of major importance affecting the government of this country. If I am right, and if I am interpreting correctly your ruling, delivered some half an hour ago, Mr. Speaker, what you did deny to the Prime Minister was the possibility of her failure to answer such questions on the ground that it would be a breach of the sub judice rule. You told us clearly that the content of the newspaper articles, the information that they reveal, are not sub judice and Members can question them and they can be the subject of debate.
Several Hon. Members rose—
Mr. Speaker: I remind the House that this is an Opposition day. I am prepared to take all these points of order and deal with them together, but we should have regard to our colleagues. I cannot help hon. Members much further.
Mr. Churchill: Further to that point of order, Mr. Speaker. Is it not clear that at least the hon. Member for Workington (Mr. Campbell-Savours) has little confidence in the veracity of Mr. Peter Wright's writings? No fewer than four months have now passed since the hon. Gentleman made his false and malicious accusations in the House under the cloak of parliamentary privilege, against Sir Stephen Hastings and myself, and he still has not found the guts to repeat them outside the House.
Mr. Skinner: Further to that point of order, Mr. Speaker—
Mr. Flannery: The hon. Member for Davyhulme (Mr. Churchill) would not be here but for his grandad.[Interruption.]
Mr. Speaker: I do not know whether that was something I should or should not have heard.
Mr. Skinner: Further to that point of order. Mr. Speaker.
One of the features of the British constitution and the compilation of "Erskine May" is that, because we do not have a written constitution, the game has always been—to put it in crude terms—made up as we go along. I would remind you, Mr. Speaker—I am sure that you have looked at the evidence — that on numerous occasions when matters of sub judice have been brought before the House there have been somewhat different interpretations, according to the matter in question.
For instance, if you, Mr. Speaker, were to study the remarks made in 1971 in relation to the Industrial Relations Bill going through at that time and the sub judice aspect relating to Lord Donaldson, who was to be in charge of the industrial relations court, you would see that variations upon the sub judice ruling were made by the Chair.

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I would also remind you, Mr. Speaker, that that flexibility was apparent when the Clay Cross question was brought before the courts over a period of more than 12 months—[HON. MEMBERS: "Oh"].. Oh, yes. However, because the Clay Cross issue was about working men and women, somehow or other the House of Commons was able, over that period of more than 12 months, to discuss—albeit with the so-called sub judice ruling appertaining—all the matters affecting the Clay Cross issue.
During the miners' strike the same thing applied. During that year-long strike several injunctions were issued and matters were brought before the courts, but I would suggest that that did not restrain many people in this House from speaking on that issue at great length. You yourself, Mr. Speaker, understood that matter. Recently the same applied to the Liverpool surcharge. I believe that it is within the recollection of most people in the House that, even though that matter went before the High Court and the Law Lords, there was never any attempt at any time by you, Mr. Speaker, or even by Tory spokesmen and women, to suggest that nobody should talk about the Liverpool issue.
What I am saying is that this flexibility has allowed the House of Commons to discuss many subjects when it has wanted to. I put it to you, Mr. Speaker, that this whole issue should be looked at again. It is a matter of prime importance. That flexibility that has applied thoughout our constitution should apply in this case.
Several Hon. Members rose—
Mr. Speaker: Order. I will take four more hon. Members then we must move on.
Mr. Neil Hamilton: Further to that point of order, Mr. Speaker. Are you aware, Mr. Speaker, that Conservative Members would like to show solidarity with the right hon. Member for Chesterfield (Mr. Benn)? It must be of some concern to the House, as a corporate entity, if the security services have been seeking to undermine and destabilise the Labour party or Her Majesty's Opposition. Bearing that in mind, and as the Leader of the Opposition is doing such a splendid job of destabilising and undermining the Labour party, should we not have an inquiry as to whether he is an MI5 agent?
Mr. Allan Rogers: Further to that point of order, Mr. Speaker. I am not a lawyer, so I cannot argue on constitutional points, but it does seem to me that what my hon. Friend the Member for Bolsover (Mr. Skinner) said has a great deal of validity. Certainly in my relatively short period in the House it seems to me that there is one set of rules that apply to the Labour side and another set that apply to the Tory side. Quite honestly, I think that that is extremely unfair. You, Mr. Speaker, should accept a valid argument.
For a period of a year there were members of my constituency—miners—who were in front of the courts for no crime—they were acquitted. However, time after time, day after day, Ministers and Tory Members condemned them and discussed the issues in the House when those men were in front of the courts. If there is one rule for the Conservatives what about a rule for us? I ask you, Mr. Speaker, to look very closely at what happened during the miners' strike. Then you must accept the argument of my hon. Friend the Member for Bolsover.
Mr. Spencer Batiste: Further to that point of order, Mr. Speaker. You, Mr. Speaker, have reminded us that you are bound by the rules and Standing Orders of the House in these matters. However, over a number of years, many of us have heard the Opposition raise many points of order concerning the sub judice rule, which they claim has prevented them from debating important matters before the House. If those points of order were anything other than bogus one would have expected requests to have been made to amend the Standing Orders of the House, to produce a rule that would be more amenable to what the House regards as important.
Can you tell us, Mr. Speaker, whether you have received any requests from the Opposition for a review of our Standing Orders on the question of sub judice? Could you also, Mr. Speaker, cast some important light on the point raised by my right hon. Friend the Prime Minister, when she said that these matters arose before she assumed responsibility? What is the role of the right hon. Member for Cardiff, South and Penarth (Sir J. Callaghan) in these matters? Is his consent required for any review of the papers during his Prime Ministership? Has he given such consent?
Mr. Eric Forth (Mid-Worcestershire)rose—
Mr. Speaker: Order. I said that I would only take four more points of order, but I will take the hon. Member for Mid-Worcestershire.
Mr. Forth: I am the fourth. On a point of order, Mr. Speaker. Following the point of order made by my hon. Friend the Member for Elmet (Mr. Batiste) the Opposition, if they wish to pursue this, are not only free, but would be advised to take the matter up initially with the right hon. Member for Cardiff, South and Penarth (Sir J. Callaghan) the Father of the House. They might be well advised to do so in the confidential atmosphere of the Tea Room, where they may well find that they will obtain much more information and advice.
If you, Mr. Speaker, give the Opposition that advice, they can then go to another place in this building and seek out another player in this drama, Lord Wilson, who played a major part. The Opposition can then satisfy themselves as to the factual background of this matter before coming to the House and trying your patience and trying as they have, to abuse order in the House.
Mr. Speaker: I think that we must now move on. I believe that I can deal with all these matters.
First of all, I am bound by the rules of the House. the sub judice rule is a resolution of the House and I have no—
Mr.. Campbell-Savours: You have discretion.
Mr. Speaker: I have no discretion other than the one I have already mentioned. May I say to the House, and to those who say that there are those outside who will not understand, that I am in no sense seeking to stifle this discussion. That is not the Chair's function. The House has the remedy in its hands. In my statement earlier this afternoon I said that there are many opportunities for hon. Members to raise this issue and remain in order. There was an opportunity to do so today and there are other opportunities — private Members' motions, or in Opposition time, if that arises, or at Question Time—within my ruling. I am in no sense seeking to stifle this debate.
Mr. Campbell-Savours: We want a Minister at the Box to answer the questions.
Mr. Speaker: Order. That is a matter for the Government. The questions that have been raised with me are matters of order and I can rule only on matters of order.
Mr. Mark Hughes: Further to that point of order. Mr. Speaker. I doubt whether I shall ever address the House again, but may I just say that the discussion that I have heard has brought the House into such disrepute that, after 17 years as a Member, I trust that your successor, Mr. Speaker, never has to rule that we are not able to discuss a matter of such importance in such circumstances.
Mr. Speaker: Order. I have specifically not ruled that we may not discuss this matter. I have ruled on how it may be discussed.

Pension Trusts
4.9 pm
Sir Brandon Rhys Williams: I beg to move,
That leave be given to bring in a Bill to define the duties of trustees of occupational pension schemes; to require the Occupational Pensions Board to issue guidelines for the conduct of such trustees; to give further protection to the rights of early leavers; to require employers to make minimum contributions for pension provision as deferred remuneration; and for related purposes.
I dealt with these points in an Adjournment debate on 19 March, but as is the practice, unfortunately, with such debates, the conclusions were somewhat nebulous. However, we have a matter here which is of sufficient importance to justify our proceeding by way of legislation.
The reasons why I consider that such a Bill is particularly needed now may be summarised as follows: the changes in the tax treatment of pension funds in last year's Budget and in this year's Budget, particularly the tax treatment of apparent surpluses; the reforms in the law which offer great new opportunities for employees and employers to accumulate capital to provide for retirement in different ways; the spate of recent takeovers and company amalgamations, in which pension funds are often conspicuously involved; and the very rapid growth in the value of the assets of the funds held in trust, coupled with the fall in current inflation and inflationary expectations. All those things are creating a new context for pension fund managers or, as I prefer to call them, pension fund trustees.
Obviously, in seeking to introduce a Bill on this subject, I am aiming particularly at the trustees of final salary schemes, because in the case of money-purchase schemes the obligations of the trustees are much simpler and there is not so much controversy about them. I have often wondered why the term "defined benefit" schemes is used by professionals in describing final salary schemes, because it seems to me that the benefits are not precisely defined either as at the date of retirement or after the retirement of the beneficiaries. I also dislike the final salary principle, because the final salary schemes tend to favour long stayers and high flyers at the expense of the early leavers and the humbler members. Pension funds should treat all the beneficiaries with equal fairness.
I mentioned the treatment of the beneficiaries at the date of retirement or after retirement. I should like to draw the attention of the House to a parliamentary answer that I received yesterday from the Department of Health and Social Security. Unfortunately, the figures are available only up to 1983, but I understand that of about 2,000 schemes only about 2 per cent. had then decided fully to uprate the benefits that they were paying to people who were already in retirement in accordance with the retail prices index. That is to say, while the funds had been rising at least in line with inflation—and in some cases rising very much more rapidly than inflation—the trustees did not think it necessary to give justice to the beneficiaries already in retirement.
As I said, those were the figures available up to 1983. Even if I have misinterpreted them, I think that we can certainly say that the great majority of occupational pension schemes in the private sector — but not, of course, in the public sector, where this aspect is totally protected—have not looked after those in retirement so

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as to maintain their purchasing power in accordance with the change in the value of money. This is one of the things that the House ought to bring home to the trustees—that it is indeed their responsibility.
Just now we are in the process of considering the return to the sponsoring employers of sometimes very substantial funds which are deemed to be in surplus in the hands of occupational pension fund trustees. I consider that the trustees are justified in returning money to the sponsoring employers only when all the other possible options have been exhausted. At present that is certainly by no means clear to the trustees of these schemes.
My second suggestion is that we should require the Occupational Pensions Board to issue guidelines about the conduct of such trustees. It should be clear to the trustees that they are acting, not for the sponsoring employers, but for the beneficiaries. That is where their duties lie, just as if they were trustees of any other settlement. The duties of trustees should be clearly set out in writing, if only to enable the trustees to resist improper pressures from sponsoring employers or other interested parties.
Thirdly, I suggest that we should give further protection to the rights of early leavers. This is a very long-standing campaign of mine. I made my maiden speech on the subject nearly 20 years ago. It is a disgrace to the private sector occupational pensions movement—and certainly a serious criticism—that it has not adopted this practice long ago in the interests of elementary justice and good employment practice.
This is, of course, a very technical matter, but if hon. Members are interested I believe that a satisfactory recommendation was made in the amendment that I proposed to the Finance Bill under new clause 34 on 17 July last year. I shall not weary the House by reading again the suggestion that I made at that time, except to say that it was drawn up with the help of some of the most prominent people in the actuarial profession.
Next, I should like to require employers to make minimum contributions for pension provision as deferred remuneration. That is because it needs to be made clear that a pension fund set up in the private sector is not some kind of frill, or a special privilege, or bonus for employees, but that a pension is a matter of entitlement resulting from their service in the course of their careers. Ideally, I should like employers' contributions to be specified at at least 10 per cent. Anything lower than that is unlikely to produce the sort of pension that most people would regard as reasonable continuity of spending power into retirement after a full career of service.
I understand that in the public sector the cost of providing the two-thirds schemes is between 17·5 and 20 per cent. on top of current remuneration. Of course, one cannot put this burden on employers in the private sector until we have had the wholesale reform of national insurance, which obviously has to come very soon. In the meantime, the employers' contribution to the occupational pension scheme should be recognised as deferred pay. Making this payment is a practice that cannot be
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discontinued or adjusted from time to time simply because of the size of the fund that has accumulated from previous years, or the chances of the way in which the trustees have invested the fund. The employers' contribution should be at a rate determined as part of the contract of employment and should be quite unrelated to the amount of the fund that has accumulated at any particular time.
I have asked the leave of the House to add certain measures as related purposes in the conclusion of my Bill. I should like to mention three. We should increase the margin that it is permissible for trustees to hold on top of their currently foreseeable obligations. I suggest that that margin should be raised to 10 per cent. from the current 5 per cent. I remember from our discussions in Standing Committee when this proposal was introduced that it was said that the 5 per cent. margin could be interpreted on a quite liberal basis. Nevertheless, the exceptional wealth of some of the occupational pension funds at the present time may be transitional and I feel it is therefore unfair to oblige them to run down their funds when more difficult times may lie ahead.
We should make private sector occupational pension schemes fully unisex, and should do that by the adoption of suitable provisions in respect of the entitlement of surviving spouses. The House had an interesting debate on this subject yesterday when we considered the pension provisions for the widow of one of our former Speakers. The public consensus is that pension schemes should give strictly unisex treatment. There is no reason why that should not be possible.
Finally, I should like to specify a limit to self-investment by the trustees of occupational pension schemes to a maximum of 1 per cent. in the sponsoring employer's shares. That is one of the recommendations that I included in the Bill that I introduced by leave of the House as long ago as 1969. I think that it is also one of the recommendations which the House would have found helpful if it had adopted it at that time. Unusually, in view of the great technicality of this subject, I have not invited any other hon. Member to join me in preparing and presenting the Bill. I should like, however, to take this opportunity to say that I believe my Bill is supported by many right hon. and hon. Members in all parts of the House.
Question put and agreed to.
Bill ordered to be brought in by Sir Brandon Rhys Williams.

Pension Trusts
  PENSION TRUSTS
  Sir Brandon Rhys Williams accordingly presented a Bill to define the duties of trustees of occupational pension schemes; to require the Occupational Pensions Board to issue guidelines for the conduct of such trustees; to give further protection to the rights of early leavers; to require employers to make minimum contributions for pension provision as deferred remuneration; and for related purposes. And the same was read the First time; and ordered to be read a Second time upon Friday 8 May and to be printed. [Bill 142.]
Opposition Day
[12TH ALLOTTED DAY]
Opposition Day

  Housing
  Mr. Speaker: Before I call the Front Bench Spokesman I advise the House that I have selected the amendment in the name of the Prime Minister.
  4.20 pm
  Mr. Jeff Rooker: I beg to move,
  That this House believes that every household should be able to occupy a dwelling of the size, type, standard and location suitable to its needs, free from nuisance, harassment, racial discrimination or arbitrary eviction, and should have a free choice of tenure, freehold, leasehold or other, without prejudicing its mobility or its right to financial aid, equality under the law, or status; and strongly condemns Her Majesty's Government for its failure to provide for the housing needs of the nation over the past eight years.
  I thought you were about to ask for brief speeches, Mr. Speaker, and I was about to say that I have not the slightest intention of curtailing my remarks, notwithstanding that we have lost a little time. I understand the needs and wishes of hon. Members, but this debate is important. Hon. Members on the Back Benches and the Front Benches ought to be entitled to make speeches on this vital issue of "Housing: A major cause for concern".
  My first protest is that last Thursday, when the Leader of the House read out the title of the debate as "Housing: A major cause for concern", that was the title the Opposition wanted. We resent deeply the archaic, juvenile, stupid, bureaucratic rules of this House that prevent the Opposition from having their own title on their own motion. I understand that that is something we have to live with, but we deeply resent the fact that we are not allowed to have our own titles on our own motions. I say that to the Minister because I understand the point raised in the Government's amendment.
  The first part of the motion is:
  "That this House believes that every household should be able to occupy a dwelling of the size, type, standard and location suitable to its needs, free from nuisance, harassment, racial discrimination or arbitrary eviction, and should have a free choice of tenure, freehold, leasehold or other, without prejudicing its mobility or its right to financial aid, equality under the law, or status".
  So far in the motion I can take with me the Association of County Councils which, if one talks about power structures, I understand is hung; the Association of District Councils, which is under Conservative control; the Association of Metropolitan Authorities, which is under Labour control; the Association of Municipal Engineers; CHAR, which is the Campaign for the Homeless and Rootless; the Convention of Scottish Local Authorities; the Housing Centre Trust; the Institute of Housing; the Institution of Environmental Health Officers; the National Federation of Housing Associations; the National House-Building Council; the National Housing and Town Planning Council; the Royal Institute of British Architects; the Royal Institution of Chartered Surveyors; the Royal Town Planning Institute; and Shelter. These organisations, which are clearly not Labour party organisations, subscribe to every word of that part of the
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  motion I have just read out. Together they form the National Housing Forum which has housing representatives from across the political and professional spectrum.
  I will put the aims of the National Housing Forum on the record because I think they are important. Its aims are to make the case for increased public awareness of our growing housing difficulties, to secure more widespread support by politicians of all parties for an increased emphasis on housing, and to ensure that greater human and financial resources are committed to ending the misery brought about by bad conditions and housing shortages. On behalf of the Labour party I endorse those aims and I invite the Minister to do the same.
  In a short debate of three hours or thereabouts, I do not propose to recite another description of the problems that have been catalogued in a mountain of reports sent to hon. Members in recent years. We should look at the causes, resources and possible prescriptions. A major cause for concern is the lack of a national strategic housing policy. New initiatives, welcome as many of them are, operate only at the margin of the problem.
  We have to recognise that housing has a significant impact upon the health of people and their families. We must accept that, without decent housing, the social ills of family break-up, vandalism and crime, racial prejudice and discrimination, loneliness, and physical and mental illness are all multiplied and magnified. We have to accept that it is a major economic and social responsibility of each generation to build, repair, maintain and improve the nation's homes so that unfair burdens are not passed from one generation to another. That leaves aside the creation of jobs and the development of skills and technologies involved in the task.
  If one accepts those self-evident truths, it should greatly concern us that in many areas people face problems of severe housing shortage and unsatisfactory housing conditions. Homelessness is on the increase. The number of homes for rent has declined by Government fiat in the past few years. The quality of the stock, notwithstanding bursts of improvement, has declined so that every home must now last more than 1,000 years. That is a quite ludicrous proposition.
  In absolute terms, the largest number of homes in serious disrepair are owner-occupied, many of them occupied by elderly people. The highest percentage of housing that is either unfit or in serious disrepair—31 per cent.—is in the private rented sector. Frankly, with its record, that is hardly surprising. We are all aware that not only is around £23 billion required to bring public sector council housing stock up to scratch, but the Audit Commission tells us that we fall behind on repairs by £900 million per year. It gets worse each year, notwithstanding the considerable sums that are spent.
  Mr. Peter Bruinvels: Will the hon. Gentleman give way?
  Mr. Rooker: I do not propose to give way. I want to speak on behalf of my hon. Friends without interruption. I do not want to crowd out any Back Bencher because of the time that has just been wasted on the points of order.
  Those are some of the factors that have led to the obscenity, to take one example, of the bed-and-breakfast hostels and hotels. Does it make sense for taxpayers to fork out £300 million to keep 160,000 families in bed-and-breakfast hostels and hotels? Examples of this kind of

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  waste are known by hon. Members on both sides of the House. I can cite the example of the Harrow millionaire mentioned in the Sunday Mirror who rakes in nearly £7,000 per week for cockroach-infested hotel rooms in London or the Edinburgh landlord who pulls in £45 per week for each of 20 beds and slices of bread in a house, as shown in a recent Channel 4 series on young homeless. These examples can he found up and down the country; I have given one from London and one from Edinburgh.
  Mr. Tony Marlow: Will the hon. Gentleman give way?
  Mr. Rooker: I have already said that I do not propose to give way.
  The Government do not appear interested in how the money is spent. Both the Department of the Environment and the Department of Health and Social Security refuse to check the quality of rooms or breakfasts, or to answer parliamentary questions about the waste and abuse in hon. Members' constituencies. The payment of two housing benefits for one bedsit is not unknown in the murky underworld created by housing shortages.
  The money involved is a vital public resource that is simply going to waste. Taxpayers and ratepayers cannot understand why this is allowed to happen. I will not accept that there are administrative or financial barriers that prevent this money from being switched to the Housing Corporation and local authorities, thus putting these landlords out of business. None of these landlords would he approved by Parliament under the assured tenancy provisions. They feed off the homeless and the taxpayer. We can stop them, and we should stop them.
  I make no apology for saying that my hon. Friends and I consider it our duty to put those characters out of business. They should not be allowed to exploit the homeless and the financial allowances granted to them by the taxpayer any longer than we can avoid.
  Although housing demands extra resources, we have to be extremely vigorous about the use of existing resources. No one must ever advance the case for extra resources without pointing out that we have to be careful how the money is to be spent. By way of example, I quote the two modest reports from the Audit Commission last year, on management and repairs in the public sector. They showed clearly how improvements could be made. While not everyone may agree with every proposal, it is to the credit of many local authorities that they are seeking to learn from and implement the recommendations in these reports. It is extremely irritating to tenants everywhere that, when so much needs to be done and when we know that we are falling behind in our repairs and our remodernisation programme, five or six — one of my hon. Friends quoted more—inspectors are looking at a problem but nobody ever does the job.
  I invite Ministers to go to one authority, Dudley. I do not know whether the Minister has been there. It is close to my area, and I have been there a couple of times in the past few years. He would then see how real, effective decentralisation and the new rapid multi-skill repair squads are giving greater satisfaction to the tenants. They are cutting the frustration and it is clear that they are saving nine by doing a stitch in time. That is an example that many other local authorities should follow. I pay tribute to what is happening in Dudley. A large proportion
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  of landlords have taken it to heart to try to implement better procedures to give satisfaction to tenants and, in my experience, the tenants greatly welcome that.
  Although we require a national commitment, we do not want a national "same everywhere" solution to the housing problem, because there is not one. Anybody who stands up and says there is, is doing a disservice to the homeless. There has to be balance and variety in housing, or there is no choice.
  Just before I came to the House for Prime Minister's Question Time I was on the telephone to one of my constituents. She is in serious trouble and cannot sell her home. It has been on the market for over 12 months. It is one of those refurbished maisonettes that we find in many of our cities. My constituent explained that six of her neighbours have been unable to sell their properties and have handed the keys in to the building society and gone elsewhere. They found it impossible. They did not wish to buy at the time, or to buy the property that they did, but they did not foresee the massive problems they have had in selling the property now that they want to move. Clearly, they had no choice. There must be genuine choice in housing. I have put that to the Minister throughout my remarks and over the past couple of years and my hon. Friends have also made the point. People should not be forced to rent or to buy because of particular circumstances of Government policy. That has been the case in many areas in the past few years.
  The national shortage of rented housing could be met by large-scale construction of single tenure council estates, using factory methods of building, coupled with lots of tower blocks and economies of scale. That would be a disaster and show we have learned nothing from the past. The Labour party rejects that approach. It was a system foisted upon local councils first by the post-war Conservative Government and later by Labour Governments. Thousands, if not millions, of today's tenants are, as a consequence, trapped in defective housing, which is badly planned and, for many of the local authorities, impossible to maintain. Those homes are less than 30 years old. The debt charges have not yet been paid on those homes. It would be impossible to correct many of them structurally, so they will have to come down. That has to be taken on board as a national policy and not left to individual local authorities because they simply cannot cope with the size of the financial commitment that would be involved.
  Some councils could and should build new family housing for rent, without any subsidy whatsoever. It is actually cheaper than subsidising the private sector. The chairman of housing in Gateshead made that clear to the Minister recently. Other local authorities want partnership with financial institutions and instead of putting barriers in their way the Government should positively encourage that.
  I know that the Minister made an announcement in February and that since then there has been some legislation. However, the institutions are not queueing up to say that that is the greatest thing since sliced bread or that it allows them to go into partnership. The bureaucratic rules that have been imposed by the Civil Service at the behest of Ministers, or the other way round, will not allow the scheme to operate in the way that it should and in the way that we would wish.
  Some local authorities are just plain old-fashioned. They just want to use the money they have obtained from

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  selling homes and land to replace and build homes for the elderly and refurbish their existing stock. However, the money is locked in the bank. Nobody can make a case, on either side of the House, for such a crazy policy. Nobody believes that it makes any sense that that money is not available to put hack into housing, whether in refurbishment or new build. It does not make any sense.
  In the same way as the public sector, in its traditional form, is not the only way forward, I invite the Minister to confirm—this is important—that he does not see the only way forward as being the private sector. He either agrees with balance, variety and choice or he does not. One cannot have it both ways. One cannot suggest that there is a single solution by saying that there will be only the private sector and that everything will be done to stamp out any aspect of the public sector. I do not make that claim from my side of the argument and I do not think that the Minister should continue to make it from his side.
  I invite the Minister to study the plans by COPEC, the second largest landlord in Birmingham, to build and rent family housing using institutional funding such as British workers' pension funds. That is better put into British homes than American hotels and fancy paintings. It uses institutional funding with the required rate of return and with rents set at fair rent levels.
  Mrs. Elaine Kellett-Bowman: Will the hon. Gentleman give way?
  Mr. Rooker: No.
  That imaginative scheme has been organised to build and rent family housing using institutional funding with the required rate of return, and rents set at no higher than fair rent level. The concept is simple. I cannot go into all the details, but it is based on the idea that the voluntary sector exists to provide homes to rent and not necessarily to build up a property portfolio. It rests on some equity surrender or withdrawal at some point during the period of the loan to ensure the required rate of return to the building society or pension fund. With a rolling programme of development and acquisition over the loan period, normal voids occur at no less than three times the rate required for the equity withdrawal. Therefore, there is no problem in respect of security of tenure. As ever, it was made in Birmingham. It is a good idea and the imaginative scheme of COPEC deserves all our support. I certainly hope that the Minister will look at the scheme. I know that the Housing Corporation supports it and that it finds favour with the institutions as well.
  Earlier this year I wrote to the Minister, following the claim in the public expenditure White Paper that there is generally speaking an adequate supply of housing overall in Britain. I pointed out, using everybody else's figures, not Labour party figures, that we appear to be about 1 million homes short rather than having 500,000 too many. I wrote to the Minister and told him that I had not taken account of the high rise blocks or the defective housing, much of which will have to be demolished or replaced, and I did not take account of the view of the Royal Institution of Chartered Surveyors, which is that we need about 2·5 per cent. —nearly 500,000 homes—empty at any one time to facilitate mobility. The professional view is that without that, the system will not work.
  After disputing the figures, which, incidentally, were repeated by the National Housing Forum in its note to party political leaders at the end of March, the Minister
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  went on to remind me that most people want to own their own home. I wrote to the Minister about total numbers of homes for people, irrespective of whether they are owned or rented. Unfortunately, the Minister picked up only one aspect. What he asserts is correct for the majority of people, but people want to decide for themselves when they want to buy.
  We now know of people being forced into purchases prematurely. The building societies are worried about that. The Minister's attention has been drawn by the building societies to the fact that we have the largest sector of young home owners anywhere in the advanced western world. They see some pluses in that but they also see some minuses. One has only to look at the high repossession rate, especially among the younger sector of the population. If there is a shortage, there is no choice. It is plain and simple.
  The Nationwide building society has said that prices for first-time buyers are outstripping rises in pay and that people are being forced to buy smaller and smaller homes. Hon. Members must know from their constituents that those homes are not easy to sell. A show house which is empty or has specially built furniture designed to create the illusion of more space, can look great. Those houses might be all right for Tom Thumb people, but not for ordinary people. [An hon. Member: "Shortisin."] I plead guilty to shortism. Builders are being forced to build smaller dwellings.
  People go to their Members of Parliament or local councillors and say: "Look, I bought this home in good faith. Now I can't sell it. What are you going to do about it?" We have to explain that this is the result of free market housing and that this Government over the past eight years have deliberately created a shortage of rental housing. Thousands of people are trapped in homes that they are finding it extremely difficult to dispose of.
  Only yesterday, the south-east director of Wimpey claimed that, due to the demand on new housing estates, he was tickling up the price of new houses, in some cases daily. My constituents have told me that they have difficulty keeping up with price rises every week, but prices being tickled up daily is news to me. The director of Wimpey was reported in the London Daily News as having said that that is the case. House price inflation in the south-east on this scale is in nobody's interests. It is not in the interests of owners or buyers, especially first-time buyers.
  I find it difficult to understand why some Ministers have said that some people want to remain tenants. Some people remain tenants because they cannot afford to buy a home, but some people genuinely want to remain tenants. They resent being forced into what they consider to be not very good quality housing; they would prefer to remain tenants. Tenants cannot see why rent structures are organised so that they have no share in the capital growth of the property, and they end up buying the homes for the landlords. That is the present rent structure in the public and private sectors.
  This issue ought to be tackled because many good things would come from such changes, such as flexible leases. That is not the only scheme which could be implemented. Tenants must feel that the rent they pay is not wasted money. Tenants often say, "I have boughs this house two or three times over with my rent," but neither the property nor the capital growth accrues to them. People do not necessarily want to buy houses, but they do

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  not want to feel that the rent is wasted money. Some changes which could improve the tenants' satisfaction are to increase the stock of rented housing and to provide better maintenance and above all, to assist in breaking the polarisation between tenants and owners, which has concerned hon. Members and our late colleague, Tony Crosland, in the 1977 housing policy review. We have never taken on board that concern as seriously as he intended.
  Some authorities, Labour and Conservative, have experimented, but at the margin of the present law. Parliament should assist by introducing these changes. No one course of action will solve the problem; many ideas could be implemented to give new rights to tenants and to convince them that money paid in rent is not money down the drain.
  We all know, because of the debates on pensions and the aged—we have just had a ten-minute Bill relating to the Occupational Pensions Board—that the aged population is changing and will do so in the first part of the next century, which will lead to a much higher proportion of elderly people. We have to adjust our housing policy to take account of this. A Conservative Member has said to me, "It is all these divorces causing more homeless and household formation growth," but no one says that we should change the law and stop people divorcing, or force people to live together as they used to have to do.
  Mr. Peter Bruinvels: That is a red herring.
  Mr. Rooker: It is not a red herring; it is dragged out by hon. Members from time to time. Changes in one aspect of policy must take account of changes in other aspects of policy. This applies to the age profile of the population. The elderly are not a single group who can be dealt with by a single solution. We know from reports produced in the past few years, particularly the inquiry into British housing, that there is an urgent and massive demand for sheltered housing for the elderly, for those who both rent and buy, at realistic figures, not at the figures which are deliberately inflated by property developers.
  Mixed investment could come about with a national policy—not a national direction—to take account of the change in population age. Mixed public and private investment would lead to the release of a substantial number of dwellings for renting and buying by families and the younger generation, thereby enabling the nation to make much better use of its existing housing stock. We all know of the grossly inefficient use of our existing housing stock.
  Nobody would advocate, as some councils have come close to doing, forcibly removing people due to under-occupation. I say "forcibly" because there are no alternatives; the choice is not there. A national policy could create new investment. This country is awash with money—I do not accept that we do not have the money.
  Sir Nicholas Bonsor: Will the hon. Gentleman give way?
  Mr. Rooker: I will not give way. I am coming to a conclusion. [Interruption.] It is no good hon. Members yelling at me from a sedentary position. I have clearly said
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  that I will not give way again. I have always freely given way in other housing debates—perhaps too often—but, because of what happened earlier, I do not propose to give way. We have nothing to be defensive about. If hon. Members have listened to me, they would appreciate that that is the case.
  As the National Housing Forum has made clear, we have never had answers to the three main questions posed by Mr. Crosland in 1977. Those questions are: how much housing is needed and how could the available resources best be used to get it; how much would people pay for their housing; and what are the wider social implications of how housing is organised? The National Housing Forum is right to remind us of the need for answers, because in finding them we might help our homeless fellow citizens and those who are badly housed. If we do not address the matter as a major cause for national concern, with a national assessment of what is required, most of the post-war gains in housing standards, the physical condition and reduction in shortages, will be thrown away by this generation. We are not prepared to see that happen. We are prepared to address the wider issue of housing policy. The Government, after eight years in office, have yet to show the concern for the young. I invite the Minister to rubbish the motion, if he can.
  4.48 pm
  The Minister for Housing, Urban Affairs and Construction (Mr. John Patten): I beg to move, to leave out from "House" to the end of the Question and to add instead thereof:
  'that as many households as possible should have the opportunity to benefit from owning their own home and that for those who are unable to buy or who do not wish to do so there should be a real choice of rented housing both in terms of type and location of dwelling and of landlord; and congratulates Her Majesty's Government for pursuing policies which give people not only the housing they need, but also the housing they want.'.
  Apart from a purple patch at the beginning and a deep purple patch in the last sentences, that was an extremely interesting speech, with many good points. There is considerable agreement about many of those points.
  Mr. Martin Flannery: Patronising.
  Mr. Patten: It is not patronising at all. It is right that when one agrees with someone, one should say so. I would be delighted if I could ever say that I agreed with the hon. Member.
  I welcome many of the things that the hon. Member for Birmingham, Perry Barr (Mr. Rooker) said, but I do not think that he can have read our amendment. As my hon. Friend the Member for Lancaster (Mrs. Kellett-Bowman) said on more than one occasion, the hon. Gentleman need only look at the amendment to see that the Government are striving for just the balanced approach that he wants, although we may not agree on matters of detail. It is a pity that he has not done so.
  I welcome the opportunity for another debate on housing. It is certainly right that housing should be high on the national agenda and I am delighted to see that it is. One reason for that is that over the past eight years the Government have helped to put it there. We have had some remarkable achievements in housing, particularly in owner-occupation, in the past, and, with the important reforms that we are proposing in the public and private rented sector, will have more in the future.
  Mr. Allan Roberts rose—
  Mr. Patten: If the hon. Gentleman, to whom I have given way on more occasions than I have had hot dinners, will forgive me, I intend to pursue the same policy towards Opposition Members as the hon. Member for Perry Barr pursued towards my hon. Friends.
  The motion talks of housing needs. There are legitimate housing needs, which we recognise, but I am concerned about a number of other so-called housing needs. First, I am concerned about claims that there is a need for more council and rented housing when 113,000 council houses and flats are standing empty. I am concerned about claims that there is a need for more money for repairs and maintenance of council stock when 20 authorities in England have over £100 million of rent owing to them. That is exactly the point that my hon. Friend the Member for Upminster (Sir N. Bonsor) attempted to raise earlier.
  Mr. Marlow rose—
  Mr. Patten: I am just getting going. I shall give way later.
  Thirdly, I am concerned that the Opposition still see a need for more council housing when all that that would do is to increase the grip of the local authority monopoly on rented housing. The hon. Member for Perry Barr is feeling his way towards more mixed solutions, and I welcome that, but, alas, that approach is not shared by many of his right hon. and hon. Friends.
  Fourthly, I am deeply concerned that Britain has allowed a situation to emerge where 540,000 privately owned flats and houses are empty which could he used to house people in need. If only Opposition parties would join us in searching for solutions to that issue we would be some way down the road to cracking the housing problem.
  Mr. Peter Bruinvels: Is my hon. Friend aware that in Leicester, contrary to what has been said, there are nearly 1,000 empty council houses? Is he further aware that about 24,000 council houses have not been repaired? Is it not a double standard for the Labour party to say that there is a great housing problem when it is the Labour-controlled authorities which do not give a damn about what is happening to council tenants in their areas?
  Mr. Patten: Just as the hon. Member for Perry Barr was right to draw attention to the generally good housing record of a Labour authority called Dudley, so it is right for my hon. Friend the Member for Leicester, East (Mr. Bruinvels) to bring home to the House Leicester's lamentable housing record. It is one of the worst housing authorities in the country.
  The essence of the Government's housing policy, as it has been developed in recent years and will be developed further, is choice. We have encouraged home ownership for the majority who want it and now we want to provide, for the first time in decades, a real choice in rented housing for these people whose needs are not met by home ownership, who cannot afford it, or who simply do not want it. That is what we intend to do. That is exactly what the hon. Member for Perry Barr asked for. However, we do not intend to do that just by council housing; nor do we intend to do it just by mixed developments with housing associations, important though both those areas are. We intend to move much further.
  The hon. Member for Perry Barr is halfway to the position that we intend to reach. He is in the position now
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  that the Labour party was in in 1979 over the right to buy and owner-occupation. One can see how much things have changed when owner-occupation is lauded and praised in Labour party political broadcasts, and I welcome that. The landscape of housing in Britain has changed over owner-occupation in the past eight years and we shall see the same change in rented housing in the immediate future.
  Choice is no empty slogan. Those who can choose their housing take it for granted, but those who cannot are stuck with problems that can pervade their whole lives. We have come a long way since 1979. At the beginning the right to buy was dismissed and opposed by most Opposition Members. It is now an established fact of our housing. The battle over the right to buy has been won, game, set and match. It is the consensus, except, of course, among the alliance who are not wholly in favour of the right to buy under all circumstances. Alliance Members wish to give a little local discretion to councils to have it here and not there. [Interruption.] We do not know what they are up to in extremist, loony Liberal Tower Hamlets. [Interruption.] I will break my self-denying ordinance not to give way to Opposition Members if an hon. Member wants to force me to give way over Tower Hamlets.
  Mr. Jack Straw: I could see how reluctant the hon. Gentleman was. I was simply saying from a sedentary position that we know exactly what is happening in Tower Hamlets. It is a mixture of inefficiency, incompetence, some mind-blowing decisions on homelessness which verge on racialism, and five, six or seven chief executives.
  Mr. Patten: It is indeed a remarkable local authority. I am grateful to the hon. Gentleman for setting the record straight.
  Most local authorities are now operating the right to buy fairly and efficiently, including most Labour authorities. They know that it is what their tenants—their customers—want. I do not know what the hon. Member for Perry Barr thinks, but I think that we should talk less about tenants and more about customers. That is how we should regard people who rent in the public sector.
  Most local authorities are operating the right to buy fairly and well and I pay tribute to them, but a handful of authorities are not doing so. The performance of a handful of authorities on the right to buy is lamentable. Tenants are being discouraged from applying and when they do apply cases are delayed interminably. I do not know whether the cause is incompetence or some sort of sullen rearguard foot-dragging by councillors in those particular constituencies, but we are monitoring the situation closely from month to month. We know where the matter is deteriorating, and it is not just in Leicester, but in Camden, Islington, Lewisham and Sheffield.
  Mr. Flannery: Will the Minister give way? That is not true.
  Mr. Patten: If the hon. Gentleman is lucky enough to catch your eye, Mr. Deputy Speaker, he will he able to make his point later.
  There is foot-dragging in Sheffield and in loony Liberal, extremist Tower Hamlets there are also considerable delays in processing right-to-buy applications.
  The Government have powers to intervene and we shall not hesitate to use them unless the performance of those

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  local authorities improves soon. We may need new legislation to protect the rights given to tenants by the House.
  My deepest wish is that we should not have to discuss this issue. The fault lies among a few Labour councils and I make it clear that I recognise that most local authorities of all political colours are operating the system fairly and well. It is the few who are bringing discredit on the many.
  Mr. Robin Squire: Is my hon. Friend aware that in the campaigns for the local government elections that are currently taking place in many parts of the country, a systematic scare campaign is being organised by the Labour party telling council tenants that they will lose their security of tenure under the Housing and Planning Act 1986? Will he join me in condemning that?
  Mr. Patten: I join my hon. Friend in utterly condemning those tactics. They have been used by only a few Labour councils such as Leicester, which seems to be on my lips a lot this afternoon, and Nottingham. Those leaflets are simply not telling the truth and they are being distributed at ratepayers' expense. The facts are set down in the Housing and Planning Act 1986.
  Choice is no empty slogan. In the same way as the right to rent will bring individual and corporate capital into the rented sector of housing again, where so much effort has been put into squeezing it out, choice in housing is directly related not just to the amounts of public money, but to the amount of private money that is put into it, as the hon. Member for Perry Barr recognised. Private expenditure on housing has already taken over the burden of most housing expenditure in this country. That means that most decisions on housing expenditure on new building and repairs and maintenance are taken by private individuals, not by central Government or local authorities.
  Mr. Marlow: Will my hon. Friend give way?
  Mr. Patten: There is one major exception—renting. We intend to put that right.
  Mr. Marlow: Although this does not affect me, despite what Opposition Members may say, does my hon. Friend accept that one reason why decisions are hard to come by is that in some of these areas, which are largely Labour-controlled authority areas, where the demand for housing is greatest it takes the longest time to get planning permission to build houses to satisfy that demand?
  Mr. Patten: That is very sad. The speedy granting of planning permission can speed up the provision of much needed houses.
  There is a need for an increased supply of permanent rented accommodation in London, other high pressure areas and elsewhere. We are all agreed that more rented accommodation is needed. That is common ground. However, I do not believe that the answer lies with wholesale council housing or wholesale municipalisation. But that is not to say that local authorities do not have a role. I do not say that. However, we must move away from the inevitable inefficiencies, rationing and queues that arise when we have a managed economy in rented housing.
  I do not believe that the managed economy has worked particularly well since the second world war. We must recreate a true and well-targeted market in rented housing.
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  That is one way of helping those people who are accepted as homeless under the homeless persons legislation and those who do not fall within the priority needs categories, such as the young, mobile people seeking jobs or those who simply do not want to buy a home, but rent. Who are we to deny them that choice? That is effectively what we are doing today.
  The right to rent will help. It means that there must be an adequate supply of rented housing for those who wish to be tenants rather than home owners. It means encouraging responsible landlords to enter or remain in the rented sectors to that those who wish to become tenants can choose the type of landlord that they want. Why should there be only one kind of landlord available — largely the local authority supported by housing associations? We must tackle the appalling contradiction of increasing homelessness at a time when there are 540,000 empty privately owned homes in this country.
  How is the right to rent to be achieved? First, new landlords must be able to charge rents that give an adequate rate of return on their investment. We have seen the effects of low rents on the investment in private housing. We have also seen that effect on the face of public housing. Those authorities that have set consistently low rents and failed to collect them have not had the resources to repair and maintain their housing stock.
  Private rented accommodation has shrunk to only 8 per cent. of housing and that is a uniquely low figure for the western world. Alas, much of that housing is in a poor state of repair. In Switzerland, 60 per cent. of people rent their homes privately. In West Germany the figure is 43 per cent., and in the United States, Canada and France it is around 30 per cent. or 35 per cent.
  Only in this country do we not have a viable independent private rented sector. It strikes me that when there is agreement between such newspapers as the Daily Telegraph and The Guardian about the need for change in this area, we are really in business. I do not point the finger just at today's editorial in the Daily Telegraph which states that we should move on this front. That is not surprising, but very welcome support. Opposition Members need only look at The Guardian and its editorial of 24 March. That was a very interesting editorial. First, it said things in my praise. When The Guardian says things in my praise, a slight tremor goes up my spine. It makes me worried. However, I was not worried when I read the phrase which I quote from memory, from the third leader in The Guardian on 24 March 1987 which stated:
  "The private rented sector has a vital role to play."
  When there is that kind of agreement between commentators with different political views, we are in business for the kind of social change that undoubtedly we are going to see during the next few years.
  We have made a start with assured tenancies. The hon. Member for Perry Barr referred to that. I am grateful for the support from the Opposition and I am pleased to tell the House that interest in assured tenancies is growing fast. I can announce that we have just approved, together with our colleagues in Wales—I am pleased that my hon. Friend the Under-Secretary of State for Wales, the hon. Member for Newport, West (Mr. Robinson) is here this afternoon — applications from another 41 bodies for approved landlord status. That brings the total to 270, with many more applications in the pipeline. I believe that the measures in the Housing and Planning Act 1986 and

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  the new 30 per cent. grant regime will provide a considerable further boost. We shall see great developments in that area.
  The hon. Member for Perry Barr was correct in his comments about the need for more mixed public and private sector funding. In some areas, landlords would need to charge very high rents simply to cover their costs. That might choke off the development of the private independent rented sector at an early stage and that sector would not get going. The new arrangements for mixed public and private sector funding which my right hon. Friend the Secretary of State for the Environment and I have introduced—often called the "30 per cent. grant schemes"—can bridge the gap between affordable rents — that is what we must be considering—and those necessary to give an adequate return to the landlord.
  The new funding arrangements for the Housing Corporation are very important. For the present financial year the corporation has been given an extra £20 million to which it has added £10 million from its existing programme for schemes that will raise between another £50 million to £60 million from the private sector. We shall be approaching £100 million of half to two thirds privately funded housing for the homeless, the young job seeker and the person moving from north to south. The rest of the money is being raised privately through index-linked mortgage loans and other ways.
  The Housing Corporation has not actually been overwhelmed, but it has an enormous number of schemes to consider. It has received about 300 applications from housing associations already this year to take up the funding. There are private institutions in the City of London with available funds queuing up to match their funds to the housing association funds. We shall see a great development in this form of mixed funding.
  In addition, at the last meeting of the Housing Consultative Council for England in November—a body which I have the privilege and honour to chair—the Labour-dominated Association of Metropolitan Authorities asked me specifically to give local authorities similar opportunities to carry out 30 per cent. grant schemes. I remember it was that nice Councillor Clive Betts who asked the question. I announced immediately a reaction on 5 February that local authorities would be given wider powers to assist privately let housing. We have included proposals to grant those powers in the Local Government Bill under consideration at the moment. I said that the use of the new and existing powers would be subject to the Secretary of State's consent, but that we would seek to give as wide a general consent as we could to such schemes. We have already issued five general consents and we intend to issue more.
  Of course, there must be some controls on capital expenditure in local government and I hope that the hon. Member for Perry Barr was not trying to leave the impression with the House that if a Labour Government came along there would be no more capital controls on local government.
  Mr. Rooker: No.
  Mr. Patten: I am glad to learn that that was not what he was saying. We are in exciting new territory here on the development of joint public and private sector funding. It is this joint approach to funding that will help to make the right to rent a very rapid reality.
  Mr. Richard Ottaway: When my hon. Friend talks about funding for housing associations, he must surely be aware that the Labour-controlled city council of Nottingham has just earmarked £2·5 million to build a new office block for its own housing department. That in itself may be all right, but is he aware that £1·8 million will come out of the housing investment programme, money which should be used to modernise my constituents' houses but which will instead be used to provide offices? The money is being taken from housing associations.
  Mr. Patten: I am absolutely appalled to hear that Nottingham city council, which is a Labour-controlled authority, I understand, should take £1·8 million from its housing investment programme. These resources could have been spent on providing better housing in Nottingham; instead, the council has tried to provide better offices for its own staff. It shows a very odd order of priorities indeed. Doubtless the people of Nottingham will seek the opportunity to make their own judgment on the council in the forthcoming local elections.
  The Government have in the past eight years brought about radical and irreversible changes, making the meeting of the wishes of the people the top priority. Many people want to own their own homes so we have made it possible for many more to do so. There are now 20 per cent. more owner-occupied dwellings than in 1979. Over a million public sector dwellings have been sold since that year, mostly to sitting tenants. Now we are turning to the rented sector. If only the hon. Member for Fulham (Mr. Raynsford) and his ideologically bound friends in the Labour party were more sensible about the Rent Acts, we would not have our present appalling homelessness figures. He and his friends are the guilty men.
  We have significantly increased tenants' rights through the tenants' charter and other measures since 1979, but I have to ask the House whether we should not give tenants a greater right to select their own landlords. Should we not give the public sector tenants, the customers of local authorities, more opportunity to choose their own landlords? That is why I questioned the assumption that new town housing should automatically be transferred to district councils when new town corporations were wound up. My hon. Friend the Under-Secretary of State announced on 25 March that the Government would consider proposals to transfer new town housing to other landlords.
  We have, for example, the situation in Telford, where a consortium of five housing associations, led by the Coventry Churches housing association, wishes to offer the tenants of the outgoing Telford development corporation the genuine choice, backed by building society money and with no call on public funds, between it and the Wrekin district council as landlords. I would not want to stand in the way of people being given that opportunity to express their own choice. That is why my hon. Friend made this very important announcement on 25 March.
  There is much food for thought in that approach. We are determined to give potential new tenants a choice, something that they have not had for many years. We have devised the methods that are needed to bring in private sector funding. Our efforts on behalf of the public sector customers, through the tenants' charter and other approaches, show that we really put our customers first.

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  Having brought owner-occupation to millions and having given the right to buy to the people of this country, we now intend to restore the right to rent to those who choose to use it. That will give us the balanced housing policy that the country needs for the 1990s.
  Several Hon. Members rose—
  Mr. Deputy Speaker (Mr. Harold Walker): Order. This is a very short debate, and very short speeches will be in order.
  5.14 pm
  Mr. Michael Meadowcroft: Unlike the two Front Bench speakers, I intend to reduce the speech that I was going to make, in the interests of giving others the chance to join in. I am happy to have interventions about Tower Hamlets, but they will be added to what I intend to say about housing in general.
  Since the Minister's translation from the Department of Health and Social Security to the Department of the Environment he has tried to rehabilitate himself from his old finger-wagging days, but, as we have seen today, he sometimes reverts to that "student union" kind of indulgence. He is dealing with the subject admirably, and then suddenly says that he will give way when it comes to something that he thinks may be of some assistance against the alliance in Tower Hamlets. It is the ultimate cynicism in dealing with Tower Hamlets not to tell the House that his Government rate-capped Tower Hamlets at £124 million, which is wholly inadequate, and the local authority has had to quadruple the amount spent on homelessness in the face of what the Select Committee on Home Affairs calls a national problem. It is the height of cynicism and it undermines the whole style of what the Minister is trying to tell the House.
  The whole question of empty houses is nothing like as simplistic as the Minister pretended. To begin with, many of the houses are incapable of repair, and some are unlettable when repaired, as I know, alas, in Leeds. Many of them are mismatched with the needs of the people in the locality. No local authority wants to keep one house empty for a moment longer than necessary, because it loses revenue by doing so. To pretend that one can solve the housing problem by re-renting a few rented houses is ludicrous.
  It is important to took at the terms of the motion. The aims of the motion are splendidly Utopian and wholly unobjectionable, but what the public demand of politicians is not simply a statement of what or why, but an explanation of how. This is the danger courted by the Labour Opposition. Its members tend to fall down when it comes to telling the House how they will achieve their aims. No one would object to the aims themselves.
  Let us look, first, at the resources available for housing. The first thing to point out is that the Government have made the most draconian cuts of all in housing. The reduction of some 60 per cent. in real terms since 1979 is one major reason for our current housing problem. When I first assumed my new role as housing spokesman, I believed that there was an overall shortage of cash for housing and that there would be a great problem in putting together the resources required to solve the problem of housing, but now I find differently. Resources do exist. The problem is how we put them together with the need.
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  I find, for instance, that the Halifax building society, one of the largest housing finance organisations in the world, is anxious to help alleviate the housing crisis in this country, to put money into local authorities and to seek to find a way of partnership and management that helps to do that. As recently as 27 March the Halifax building society put £29 million into a housing scheme in Notting Hill, which shows that resources are available if only we can bring them to the needs.
  We must also unlock the resources that exist in people's own houses. Like other hon. Members, I see many constituents, most of them elderly, who are desperately worried about a particular repair that is required, perhaps a new roof or something of that sort, for which they have no cash, but what they often have is resources in their own houses, for which, with good Yorkshire thrift, they paid many years ago. The question there is how we assist people to unlock some of the resources of their own housing to help them to do repairs. Ways did, of course, exist. One way was through the building societies but building societies are now prevented from making interest-only loans. That was one way of getting money because elderly people could cope with an interest-only loan, but it has now been stopped.
  The other question in terms of unlocking resources is that of tenure, of return on investment and of what guarantee can be given by local authorities to private finance. This is very important if we are to get away from the ideological straitjacket in which the parties have been locked for far too long. The political consensus on housing is growing, but it is doing so with certain hiccups, one of which is the question of the private rented sector. I accept what the Minister says, that the private rented sector has a role.
  Looking at the old properties and the terraced houses that have been so popular and beloved by so many people, one of the sad things in my city is that the houses that are in council ownership are, all too often, the dilapidated ones, not those that are privately rented or those that are owner-occupied. We do not necessarily have the bad landlords who are apparently so rife in areas where there is much more housing stress than there is in the north.
  The second crucial area is the assessment of need. I am puzzled by the Government's failure to meet their own assessment of housing need. On their own assessment, about £18 billion is required to cope with the backlog of maintenance work in public housing. Other estimates put the figure far higher, stating, for example, that about £50 billion is required in total. It is bizarre that, having tried to sell the concept of the right to buy to local authorities on the basis that those resources would be available for capital investment in housing, since imposing the right to buy the Government have limited that amount to 20 per cent. Therefore, the housing authorities are incapable of coping with their own needs because of the vast millions of pounds that are locked up in their balances under the 20 per cent. rule.
  I should like to illustrate my points by reference to my city. The Government commissioned private consultants to survey the housing stock in Leeds. Those Government-appointed consultants estimated that £600 million was needed for repairs and improvements to the public housing stock. The council estimates that perhaps another £340 million is required for the private sector, for the repair grants and the back-to-back refurbishments that are required for the unfit houses. Moreover, even when faced

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  with the evidence of the Government's own consultants, the housing investment programme for Leeds is £22·3 million in 1986–87, which, in real terms, is a third down over three years. The amount for 1987–88 is down still further to £19·86 million. There is no way in which local authorities can cope with the housing needs that have been identified and accepted in their areas.
  The motion has some curious wording. When it begins, it states in the names of those right hon. and hon. Opposition Members who have tabled it that they want every household
  "to occupy a dwelling of the size, type, standard and location suitable to its needs".
  It is only when the motion deals with tenure that it refers to a "choice". That seems reminiscent of the old paternalism that I thought the hon. Member for Birmingham, Perry Barr (Mr. Rooker) had got rid of in his thinking on housing. Therefore, there is a bizarre dichotomy in the motion, which refers to "needs" at the beginning and "choice" later. That is an important point.
  Mr. Rooker: Perhaps I can make it clear that I moved the motion, and when I stopped reading it out, I said that I carried with me a list of organisations. Those words in the motion came, word for word, from the Royal Institution of Chartered Surveyors. I am quite happy to have those words in the motion, as they are supported by all those other organisations.
  Mr. Meadowcroft: I was aware of what the hon. Gentleman had said. However, the words on the Order Paper are his, wherever they were taken from.
  It is important to note that the provision of housing is not an absolute right in the same way as is health. If a person has diabetes, he or she requires insulin in the proportion that is required by the disease. However, in housing there is a choice to be exercised, which is outwith the need for shelter. It is shelter that is the absolute need, not how it is provided. There are people—I know them in my city—who prefer to have a smaller and cheaper house so that they can have a car, holiday or caravan. That is their choice. Of course, one can still obtain housing cheaply in Leeds to enable that choice to be made. However, if one takes away that choice, or the possibility of it, as has happened so often because of clearance, one takes away the possibility of someone being able to have the other things that he wants. Once someone is forced into the rented sector, that person is invariably forced to live at the margin. No choice is left to that person, and such people cannot decide the type or size of house that they require.
  Mr. Jeremy Corbyn: Will the hon. Gentleman give way?
  Mr. Meadowcroft: I shall give way, but I should like to get on and enable other hon. Members to make their speeches in their own way.
  Mr. Corbyn: I thank the hon. Gentleman for giving way. I am interested in his remarks about choice. Would he care to tell the House what choice the 140 Bangladeshi families have, when the Liberal-controlled Tower Hamlets council proposes to throw them on the streets in the next two weeks?
  Mr. Meadowcroft: The hon. Gentleman has picked the wrong place. I started off by talking about the Tower Hamlets problem with Bangladeshis. If the hon. Gentleman is concerned about that, he might consider
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  how on earth one can afford to cope with that problem in Tower Hamlets, which is a national problem, rather than cynically using that issue as a bargaining point for votes in Tower Hamlets. That is monstrous.
  Mr. Corbyn: Answer the question.
  Mr. Meadowcroft: The same thing is happening in Camden, which is under the control of the hon. Gentleman's party. Camden is going down the same path as Tower Hamlets. On 20 March the policy and resources committee in Camden had to start re-assessing the offers that it made to people entering the borough for exactly the same reasons. It could not afford the generous implications of the policies of the past.
  The Minister's record on housing choice in local authorities has not been very good. When I first joined the Leeds city council, I recall that it was the Minister's party that was removing choice. His party went for a policy of clearance of the old properties in Leeds, which turned out to be disastrous. I hope that we can get away from the idea that one can have area clearance and still maintain housing choice. That cannot be done, because it blights entire areas, causes further demolition and further need for such clearance in the future.
  Sir Nicholas Bonsor: Will the hon. Gentleman give way?
  Mr. Meadowcroft: Yes, but if I give way that will take time from other speeches.
  Sir Nicholas Bonsor: If one takes the hon. Gentleman's point to its logical conclusion, there would be no clearance of absolutely intolerably poor housing in slum areas, and of course such clearance must be performed. It is a question of judgment.
  Mr. Meadowcroft: We are back to the question of choice. I do not see how it is possible for politicians to say to adults that they will decide whether those adults' houses should remain standing. One cannot say that. The previous policy should have been one of improvement, rather than of demolition. The fact is that we have demolished many houses that did not need to be demolished and, in their place, we have built houses that have turned out to be worse. Those houses are now the problem.
  I was told by Conservative Members that one could not take one house out of a terrace and replace it with another house. I was told that that was impossible. However, I was then sent to campaign at a by-election in the centre of Newcastle and went to canvass on a street where that had happened. A house had been taken out of the terrace and a new one had been put in. That was a splendid solution. It meant that older people could have a smaller flat inside that house, near to their friends, relatives and neighbours. However, we were told that such a solution was not possible. We have demolished and cleared too much and we should not have done so.
  We must, however, consider the problem of system building, and its demolition. The Housing Defects Act 1984 nowhere near covers the problems of pre-reinforced concrete housing. Nor does it deal with the problems of other types of system-built housing, for example, Caspon, Myton and Reema. We need to reconsider the way in which we cope with people being able to repair those houses, or have them bought back.

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  We need more dwellings of all types. Therefore, our predisposition should be against demolition where there is the possibility of improvement.
  We should reduce the immense pressure on the south-east, where house prices, or more accurately, land prices spiral upwards, way ahead of inflation. It seems to me that it is no longer possible for young people, as first-time buyers, in the south-east to have the type of housing which we, in the north, would regard as adequate or desirable. That will not do.
  Furthermore, the imposition of the Government's poll tax, the community charge, will put up house prices further, because it takes away the tax on property and puts in on to individuals. Therefore, house prices will be forced up.
  Money is available. The question for us, as politicians, is how we bring together need and resources. In the forthcoming election we shall be judged on whether we are seen to be able to achieve that key aim of bringing together resources and need.
  5.28 pm
  Sir George Young: I believe that the hon. Member for Leeds West (Mr. Meadowcroft) is a jazz musician, with skills on the clarinet. I am not an addict, but I understand that there is a time when recital takes place and the rest of the instruments fall quiet while the clarinettist plays on his own, uninhibited by the need to remain in harmony and unrestricted by beat, and when he can grab some themes, perhaps from old tunes, and continue until he is out of breath, when he signals that the time has come for his colleagues to come in. We have listened to a clarinet solo without the clarinet.
  During the speech of my hon. Friend the Minister for Housing, Urban Affairs and Construction we heard of many areas of success in housing. We heard of the buoyancy of the private sector, in which starts are at a record level and making a direct contribution to meeting housing needs. We heard also of the diversification of tenure, not just through the right to buy, but through other initiatives, such as the promotion of tenant co-coperatives, shared ownership, leasehold schemes for the elderly, and the rest.
  My hon. Friend also explained how we were breaking down barriers between the public and private sectors by encouraging joint ventures between local authorities, house builders, building societies and housing associations. He explained the choice for tenants, particularly those in new towns, of different types of landlord apart from the local authority.
  I shall speak briefly about the outstanding problem of homelessness, which I know concerns my hon. Friends on the Front Bench and which formed a large part of the speech of the hon. Member for Birmingham, Perry Barr (Mr. Rooker). As a London Member, I see at first hand the growing number of homeless people, reflected in the figures — people attracted to London by the buoyant economy, casualties of marital breakdown, and young people who have left home earlier than would otherwise have been the case. Naturally, hon. Members on both sides are worried about the numbers and the conditions in which many families now live in bed-and-breakfast hotels, often in Paddington. Both hon. Members and the public are worried about the cost.
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  I believe that it is possible to get every family in bed-and-breakfast accommodation in London out within six months without disadvantaging anyone else on the waiting lists, without an expensive public-sector programme of building for rent, as the Opposition advocated, and without sending families to areas where they do not want to go. I advocate a dramatic, imaginative expansion of a scheme which is already in operation in several boroughs under the control of various parties and which enables local authority tenants in areas of housing shortage to leave their home and buy a house outside London.
  Many tenants in London who have been given the right to buy do not want to buy the flat in which they live, but cannot afford to move out. The scheme gives them a capital sum in lieu of the discount to which they would have been entitled had they exercised the right to buy, to enable them to move out. It is targeted on those who do not have the resources to do so without that help. Local authorities then get a relet at a fraction of the cost of new build and quickly, and a homeless family is taken from bed-and-breakfast accommodation, saving taxpayers' and ratepayers' money.
  One could quickly get about 30,000 relets for families in bed-and-breakfast accommodation in London by promoting that scheme. Certainly, many tenants in my constituency who have retired and no longer have to live in London would like to move to be near friends and relatives elsewhere, but they need a grant of £8,000 or £10,000 to enable them to do so.
  Such a scheme is wholly consistent with the philosophy of the Conservative party, which is to concentrate resources of local authorities on people who need them, to encourage home ownership and to promote mobility within London. The Government have already put a similar scheme on the statute hook by giving tenants of charitable housing associations a right to a transferable discount. That scheme, which is operated by housing associations, has freed several properties in London and enabled more rapid progress to be made on the waiting lists.
  If one is to do something about homelessness in London, one must adopt such a scheme, whatever the potential inequities or problems. I submit it as a scheme, not to promote home ownership, but to tackle the growing problems of homelessness. That is the right way to tackle homelessness in London.
  The London borough of Ealing is tackling homelessness in the wrong way. It is underwriting the municipalisation of private housing estates in the borough. One flat being bought by a housing association, but being underwritten by Ealing council, is costing £180,000. That sort of deal does not add to the housing stock. It simply swaps the tenure from home ownership to rented accommodation. It denies that accommodation, which is being built by the private sector, to many people living in Ealing and Acton who were hoping to buy those flats. The flats are no longer available and the people must wait to find something else. If £180,000 is available merely for one unit, the council could find many better ways of using it, such as the scheme that I outlined.
  I do not propose to speak on any other subject. When my hon. Friend the Minister replies to the debate I hope that he will say how the review in the Department, which is evaluating the scheme in London, is progressing, what

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  the time scale is, and whether there is any chance of the Government taking action on homelessness by promoting more vigorously the initiative that I have described.
  Several Hon. Members rose—
  Mr. Deputy Speaker: Order. I am grateful to the hon. Member for Ealing, Acton (Sir G. Young) for his brevity.
  5.34 pm
  Mr. Tony Lloyd: My hon. Friend the Member for Birmingham, Perry Barr (Mr. Rooker) made a sensible point when he said that it was vital that people understood there was no such thing as blanket solutions to the housing needs of different areas. Sadly, for all the Government's rhetoric about choice in the housing market, in reality they are trying to impose an ideological straitjacket which simply does not fit. That can be well illustrated by the abysmal failure of the Government's housing policies in Manchester and Greater Manchester.
  It is conceded by Labour politicians and our political opponents that at present Manchester has a housing crisis. More than one and a half times the national average of houses in the city of Manchester are considered to be overcrowded, and the position is getting worse, not better. There is a freezing of choice, even in Manchester which has a massively higher number of relets of local authority properties than other authorities. The Government's actions are inflicting human misery throughout the Manchester area because of the resulting housing conditions.
  There is a housing stock of nearly 100,000 and about 37,000 people are on the housing waiting list. Many hon. Members may wish to dismiss some of those people, but I do not because each person represents somebody who is badly housed. As everybody involved in housing in Manchester recognises, the housing transfer list will never offer any hope for many people, although their circumstances are intolerable.
  Recently a constituency case was brought to my attention of a family living in a three-bedroomed house. The married couple had one bedroom, their teenage son another and their four daughters shared the third. Because of the acute crisis in housing, their problem will not be resolved in the near future. Neither I, nor the chairman of the housing committee as a local councillor can offer them any hope. Such is the misery that is inflicted.
  Conservative Members say that the crisis is the fault of the wicked public sector. Sadly, Manchester is now a poor city. About 70 per cent. of its population is described as low-paid by well-established definitions, or as out of work. The proposed private sector solutions are not available to those people and are ridiculous. The same national builders whom my hon. Friend the Member for Perry Barr said were tickling up house prices in the south-east have approached the local authority in Manchester to ask whether it will buy the houses they have built for purchase because they cannot sell them at cost. Indeed, they cannot even sell the houses when the price is dropped below cost. Therefore, neither national builders nor local builders will build to sell when the housing market in the city simply does not exist.
  The pre-first world war terraced houses in Moss Side have been considerably improved, sometimes to a good standard, but those houses cannot be sold easily because the cost of modernisation is greater than their market
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  price. The hon. Member for Leeds, West (Mr. Meadowcroft) is right to say that such houses should not be demolished, but without a significant public sector contribution they will eventually have to he demolished. The public sector will have to take responsibility for that type of housing in our inner-city areas.
  Private rented accommodation simply does not exist. I was perplexed to hear the Minister say that after eight years of Conservative Government there was an awakening private sector about to unleash itself to solve my constituents' problems. Eight years is a long time for people to wait in appalling housing circumstances and it is a long time for a hypocritical Government to discover their compassion for those whose housing conditions are intolerable. It is about time that the Government came clean and said that their ideology is not relevant to areas such as my own.
  We can look across the border from the city of Manchester, which is labour-controlled, to the conservative-controlled borough of Trafford, which failed to build any houses for the general housing public sector market, except for a few of what my friends on the local authority called Noddy houses at the time, which the Government put on offer before the general election in 1979, when they said that all authorities that got houses up to the eaves by a certain date could have the money. Trafford Conservative council decided that, for the first time since reorganisation, it would go in for that. It did riot achieve its objective in terms of getting houses up to the required standard and had to pay the full whack itself. But we know that that was just an election ploy, similar to the election ploys that we are seeing now. Clearly, apart from the faint hope for the private sector, housing is riot something on which the Government feel emboldened to offer anything in terms of electoral bribes.
  One of the big criticisms by constituents concerns the number of voids in the ownership of both local authorities. This concerns me and must concern everybody. I would feel much better hearing hon. Gentlemen talk about voids in local authority housing stock if they would join us in pressing the Government on this point. On the Langley estate in Manchester some 600 houses are now vacant, which is a very large number; but the reason is that the concrete floors and the sulphate in the soil have made those houses uninhabitable. Yet, when the local authorities approach the Government for the money to repair the houses, that money is simply not available. Manchester is not repairing its housing stock, so it has to see its houses boarded up, vandalised and not let to families which could use them.
  The reason for the overwhelming majority of those voids is the underfunding of the capital budget for local authorities, and that is something for which central Government have to take direct responsibility. That situation applies throughout the land.
  Housing in this country is now severely underfunded, and this is true of both local authority housing and housing in the hands of owner-occupiers. In my own constituency owner-occupiers, who are very often on moderate incomes, find even the improvement grant system that exists no help to them. One of my unemployed constituents has been trying for some time now to get some assistance with his own home, but when it comes down realities and the funding of his portion of the grant he simply cannot afford to take on that kind of debt. More

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  to the point, he cannot find anybody who would lend it to him. So for many people there is an underfunding of housing.
  The private institutions do not cope with that kind of problem. The local authorities are not in a position to do so, not because they do not want to but because the Government will not let them. At the end of the day, the housing crisis in this country is a crisis inflicted by this Government which affects the way of life and the quality of life of the people of Britain.
  5.42 pm
  Mr. William Shelton: I must first say how much I agree with the suggestion by my hon. Friend the Member for Ealing, Acton (Sir G. Young) and I shall follow him by speaking briefly to one point only. Reference has already been made to the matter of empty properties on both the private side and the council side. I intend to talk about the council side because I think that the empty properties on the private side are empty through the fault of the House, because of the Rent Acts.
  In May of last year I was talking to a constituent in Hambalt road, in Clapham, about some problem she had, and she said that she wished that her daughter could move into the flat next door, which had been empty for 10 years and was owned by the council. I wrote to Lambeth council and asked if it was true that the flat had been empty for 10 years. I had no reply, but two weeks later a team moved in and put in central heating and did the flat up. I checked again last month, March, and the flat was still empty. The constituent who told me about it said that it had been empty for 10 years and the lady downstairs said that it had been empty for 8½ years. There was a slight difference there, but certainly it was empty for more than 9 years. Somebody has now moved in because I created such a row in the local press.
  I think that it must have fallen off the local council books in some way. I do not believe that even Lambeth council would have left it empty deliberately for so long. It bought it some 10 years ago and it remained empty all that time.
  I think that the Government must take some responsibility for collecting figures from local councils in a more co-ordinated and comprehensible way. I started looking to see what was available in terms of statistics on empty properties, waiting lists and so on, and here are a few of the figures. They come from different sources and they contradict each other. As I say, there is a need for some correlation.
  First, the council house waiting list in inner London, in March 1985, was 142,500. So there were very nearly 150,000 people waiting, of which it was said that 128,000 were "in need", whatever that definition may mean. That point has been raised already.
  Secondly, bed-and-breakfast homeless in inner London in March 1986 amounted to about 3,500 families, and the cost, according to the Association of London Authorities, had risen from £3 million in 1981–82 to £11 million in 1984–85. It also said that the number would be up to about 12,000 by 1989 unless the policies were changed. So everyone must agree that there is a massive problem here.
  Looking at the supply side, according to the same association, those councils, which are basically the inner London councils, have some 20,000 empty properties
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  between them. That is a far higher percentage than an average management estate would have. To be honest, I do not know what percentage it is, but it is very high. I could not, however, get a breakdown. Nowhere did it say how long the properties had been empty or why they were empty.
  I then looked at Lambeth and Wandsworth, where I had direct access to more specific figures. I need hardly tell the House that Wandsworth is Conservative-controlled and well managed and Lambeth is Labour-controlled and badly managed.
  Mr. John Fraser: Can the hon. Gentleman help me with a mystery, if that is the proposition? Why is it, then, that Wandsworth has more empty council houses than Lambeth?
  Mr. Shelton: If the hon. Gentleman will restrain himself for a moment, I will come to that precise point.
  Lambeth has 1,500 homeless, while Wandsworth has 750. The boroughs are more or less the same size. Lambeth has a waiting list of 13,000 and Wandsworth has a waiting list of 5,950. Lambeth has 865 squatted properties; Wandsworth has 11. Lambeth has a 26-week turnover in lettings; Wandsworth has a two-week to three-week turnover. But — this is the point which the hon. Gentleman raised—Lambeth claims to have only 1,388 empty properties, 2.7 per cent. of its stock, while Wandsworth has 1,071, 3.7 per cent. of its stock. That brings me back to the point, that these figures should be put forward in a comparable way. I will explain this anomaly.
  Lambeth excludes squatters from its voids. If we add the number of squatters to Lambeth's voids, we get 2,193, so 3.9 per cent. of its properties are either squatted in or void. On the other hand, in Wandsworth 935 houses on the waiting list are being renovated prior to sale. If we abstract those, it has only 136 waiting to be let, or 0.4 per cent., compared with Lambeth's 3.9 per cent.
  It really is nonsense that councils put forward figures in such extraordinarily different ways, misleading normally intelligent people such as the hon. Member for Norwood (Mr. Fraser), who is a Lambeth Member and was delighted by those figures, as I was until I looked into them. I found that, instead of Lambeth having fewer empty properties as a percentage than Wandsworth, it had 3·9 per cent. including squatting, whereas Wandsworth had only 0.4 per cent.
  In conclusion, we need more information about empty properties, squatters and the homeless. We need to avoid disgraces like the flat owned by Lambeth council that had been empty for 10 years. A year ago I told Lambeth council about it. It did it up, and put in central heating, but it was still empty 10 months later. If the hon. Member for Norwood approves of that, I shall be delighted to publish his approval in my local press.
  Mr. Nick Raynsford: What about those in Wandsworth?
  Mr. Shelton: I will suggest to my right hon. Friends on the Front Bench that the Government should designate certain local authorities which should be obliged to submit to the Department—and make public locally—lists of empty properties in their ownership, compiled on a like-for-like basis, including or excluding whether they are squatted, and how long they have been empty, if they have been empty for more than six months.

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  No property needs to be empty for more than six months, unless it is being rebuilt, in which case the local authority would say that it was being rebuilt. I accept that some work is involved, but the homeless and those who are poorly housed should demand that councils should not keep a good flat empty for 10 years because it happened to fall off the books.
  5.51 pm
  Mr. Eric S. Heffer: The hon. Member for Streatham (Mr. Shelton) is, like many of his colleagues, full of hypocrisy on these matters. Local authorities have been starved of money to meet the requirements of local people to repair their houses. Because of that, many problems have developed, particularly over the last eight years. The basic responsibility is with the Government and not with local authorities, but the local authorities are not entirely excused.
  I want to raise the question of choice. I am becoming worried about it because I hear about choice all the time, and to some extent I even read it in our own motion. I am not certain what is meant by choice. People have choice if they have money. Anybody who has money can buy a house where they want to buy one. That has always been so. Some people have always had that choice.
  But the ordinary mass of working people, who have no money and cannot afford to raise cash so that they can get a mortgage, have no choice. Those are the people that I am worried about. The Labour movement must be concerned about them because those are the people we really represent. We represent them; no one else will.
  John Wheatley, the first Housing Minister in a Labour Government, was a man of fine character. Five hundred thousand houses arose out of the Wheatley Act. Incidentally, he was always referred to, when alive, as one of the loony Left—and he was a Roman Catholic, so one can be a Roman Catholic and a member of the loony Left. People like Wheatley were doing that job for those in need.
  Masses of people are in need now and require help. They cannot get accommodation unless they are assisted by local authorities. It is only through local authorities that the housing needs of these people can be met and necessary repairs made. I am all in favour of choice. Those who have money and who do not want to live in a local authority house can move out and buy some other accommodation.
  My local council—and its 47 members—has been disqualified. What did they do? They built almost 5,000 houses in three years. I know of a private estate in Liverpool, next to which the council has built council houses similar to the ones that were built for sale by the Liberals and Tories. Those council properties are full because the occupiers have been moved into them from slum housing. Other parts of the estate have sale signs up because people cannot afford the mortgage payments.
  A couple in my constituency—perhaps an example of many other couples — could not afford to pay the mortgage payments and had been negotiating for some time with a building society. One evening they went home and discovered that the building society, which already had the keys, had moved in and had changed all the locks on their house. I can happily give the names and details of that couple. All over Liverpool, the sale signs are going up not only on houses that were built by or through the
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  local authority but also on older properties that people have bought. That is happening because workers have been thrown out of work. They cannot afford the mortgage payments, and many of them are being evicted from their homes.
  They are our people and they require more assistance than anyone else. We in the Labour party have to give them that help. It is our responsibility to ensure that those people are assisted, because this Government will not help them. This Government have made the position far worse since attaining office.
  Statistics from the National Council of Building Material Producers—that body is certainly not an adjunct or affiliate of the Labour party—show that in 1979, in the public sector, 145,000 houses were being built, and that in 1986 46,200 were being built. In the private sector, for the same period, the number of houses being built increased, but not dramatically. Taking both private and public sectors together, the number of houses being built has gone down, although there has been an increase in the private sector as against the public sector.
  How do people find somewhere to live? I will give an example of the homeless. I am a member of the Union of Construction, Allied Trades and Technicians. Many of the membership have had to move to different parts of the country to seek employment. Many of them have come to London. The February issue of the union paper, UCATT Viewpoint, gives examples. Any hon. Member who has been round London at night will have seen what is happening; if hon. Members have not been, I urge them to go. In winter just round the back of Covent garden one could see people trying to get some warmth from cardboard boxes. The Minister should have a look. My-union paper has photographs but hon. Members should go and see for themselves what conditions are like. A disgraceful position has developed. The Government are bringing us back to the days described by Jack London in his book, "The People of the Abyss". They do not give a damn about the ordinary people who are suffering without a shelter over their heads.
  We must care. We must build houses, basically through the local authorities. We must stop talking about choice and make sure that people have a shelter over their heads. I shall support the motion but I hope that we will be more positive in what we put before the people at the general election. The Labour party must say that it is the only party that is concerned about meeting the needs of the people for shelter.
  6.1 pm
  Mr. Robin Squire: The hon. Member for Liverpool, Walton (Mr. Heffer) is always listened to with respect even if most of us on this side of the House reject his remedies. In particular we reject his belief that the future can lie only in council housing, but he is entitled to that view.
  For some five years I have been a board member of Shelter and in that role have spent not a little time considering the problems of homelessness and bad housing, on which I shall concentrate now. In Shelter's view, a definition of a successful housing policy has three criteria: first, does everyone who needs an adequate home have one; secondly, is society meeting its responsibility to keep in reasonable repair the housing stock which is held in trust for future generations: thirdly, are Government ensuring that housing policies do not discriminate against

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  particular sections of society or affect their ability to lead full and satisfying lives? I would need to make a long speech to cover each of those principles, but I certainly endorse that broad approach.
  In the International Year of Shelter for the Homeless, there is broad agreement across the Chamber that bad housing creates conditions for increased crime, bad health, stress, family breakdown, vandalism and all the other problems which we know only too well. Last year, £26 million was spent on the increased use of bed-and-breakfast accommodation. Goodness knows what the figure will be for the year to March 1987, but it will obviously be higher. That is indefensible on financial or social grounds. Such accommodation is provided at twice the cost of other accommodation.
  The survey of houses in multiple occupation published at the beginning of the year showed that only a quarter of the estimated 200,000 homes concerned were adequate. There are now 100,000 homeless families. As I suspect most hon. Members are aware, that is the number accepted as homeless by local authorities. If we throw in those who are single or couples without children, we have to add another 203,000 people or families who are not accepted as homeless. The majority of the 100,000 accepted as homeless may have been unfortunate enough to be put out of work or may have suffered industrial injury which led to them being out of work. We must not think of them as a separate category.
  I have long believed that we must continue to make use of housing associations. I welcome the increase of 21 per cent. in funding announced for the Housing Corporation for 1987–88. In high stress areas, housing associations have a major role to play. I am concerned that some recent changes may reduce that role. Housing associations will no longer be offered first refusal when public property is being disposed of. I regret that particularly, as I also understand that housing associations cannot buy at the outstanding historic debt. When those provisions are combined, it will be very difficult for housing associatons, particularly in areas such as central London, to buy property that would be suitable for people paying fair rents.
  I wish godspeed to the Minister's latest initiative involving 30 per cent. housing association grants—or HAGs as they are quaintly termed. I hope that they are successful. He should remember that housing associations have a major role to play and that they should not be restricted in carrying out that role.
  Mr. John Patten: I ask my hon. Friend to accept that in the near future we wish to see growth in the number of homes built by housing associations in partnership both with central Government and privately funded institutions. We see housing associations playing a particularly important role. I welcome the vigorous way in which housing associations are rising to the challenge.
  Mr. Squire: I welcome my hon. Friend's comments. We shall all note them and shall expect to see the growth of which he has spoken.
  I should like to refer specifically to mixed user grants, or MUGs. With MUGs and HAGs, it sounds a bit like pre-Wolfenden Paddington, but I am talking of 1980s housing. Mixed user grants apply when there is a prospect of a housing association acquiring property above a
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  disused retail or industrial outlet. The rules do not allow housing associations to be responsible for the lower property. In rundown inner-city areas, this is denying activity to housing associations. St. Pancras housing association has been discussing the problem with my hon. Friend the Member for Surbiton (Mr. Tracey). In his reply to the debate he may be able to tell us what progress is being made.
  On better use of empty property and potential empty property, I have been advocating for some time that the Chancellor of the Exchequer should find funds to encourage people to bring empty rooms in their property into use, particularly in inner cities. If the first £500 of rent thus received was free of tax, it would create a new source of supply of accommodation, particularly for young people aged 18 to 25 who gravitate to the cities, who cannot find anywhere to live and who end up living rough or in conditions of which we should be ashamed. Many elderly people would be only too pleased to have the extra income from the use of spare rooms. It would be a much more flexible way of dealing with mobile young people than requiring local authorities to provide accommodation for them. We should be looking closely at ways of finding the funds that would enable that to take place.
  Mr. Charles Irving: As to flexibility—as my hon. Friend knows, I have had a long relationship with housing associations—does my hon. Friend feel that the Department and the Minister should be giving local authorities and housing associations two or three-year programmes rather than a one-year programme? A one-year programme is extremely difficult to plan and often impossible to fulfil. If it were extended, there would be a better chance of using the available resources. In some authorities, such as Cheltenham, those funds are not used because it has been impossible to complete the programme.
  Mr. Squire: The Minister will have heard my hon. Friend's interjection, which I would endorse.
  One sector which needs not legislation but exhortation is the political encouragement of local authorities to make use of empty properties. not just their own—I do not have the time to develop what might be termed the expected line on council properties—but empty property which is lying unused within their boundaries. Currently, a number of authorities are doing that, so they do not need legislation. I shall quote an example which might not be expected of me—the London borough of Brent. Brent is working with local housing associations and over the past year it has leased 200 empty properties. Landlords are guaranteed vacant possession at the end of the lease, and the borough pays them a rent. It is a particularly good deal for owners who may otherwise have left the property to rot.
  I know that what has happened in that area of high stress has happened elsewhere. I should like to see such schemes grow, because if they do not and if we continue to see a growth in company lets in central London side by side with the pressures for low-rent accommodation, we will face great problems in the future.
  6.11 pm
  Mr. David Winnick: Despite all the ministerial denials, there is an acute housing crisis in many parts of the country, as my hon. Friends have pointed out in this short debate.

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  I am glad that the hon. Member for Hornchurch (Mr. Squire) has spoken because he is one of the few Conservative Members who recognises that there is a real housing problem in this country.
  It must be sickening to all those who are in desperate need of adequate accommodation to read and listen to Tory Housing Ministers denying that there is a problem. It is bad enough for a family to be forced to live in bed-and-breakfast accommodation and not know how much longer they must put up with such miseries, or to live, as so many of my constituents do, in a high-rise block of flats with two children and be told that the chances of being allocated a house are remote.
  How many young married couples, often with a child, who come to our surgeries or write to us, have no alternative but to live in one rented room, or in cramped conditions with parents or in-laws with all the accompanying domestic strain? Surely it aggravates such miseries to be told time and time again by Government Ministers that there is simply no housing problem at all. That is the sort of 1984 Orwellian position the Government adopt.
  Tory Members of Parliament, and many others who are involved in that party at local level, have always deeply resented public sector rented housing. Indeed, some would go so far as to say that there has almost been a vendetta over the years against council dwellings. Since 1979 the Government have given effect to that resentment or vendetta. They have virtually made it financially impossible for many local authorities to build at all.
  Reference has often been made previously by Ministers to the decline in council house building under the Labour Government, but in the last full year of that Administration over 100,000 new council houses and flats were being built. We know that in the last few years, and certainly in the current year, the figure is 30,000 new houses or flats or just under.
  First and foremost, we need a substantial national house building programme in the public sector. Building houses and low-rise flats, as my hon. Friend the Member for Birmingham, Perry Barr (Mr. Rooker) said, is the most effective way of tackling the housing crisis.
  It is no good those people who are on low incomes or unemployed being told that they can buy. What should I tell my constituents when they come to my surgery? Should I tell them that they should get a mortgage? They have no more chance of getting a mortgage than of going to Mars. The only way to resolve their housing crisis is for them to be housed by the local authority or a genuine housing association.
  We must ensure that local authorities have the means to modernise and carry out large-scale repair work to old and structurally defective council properties. I shall refer briefly to what is happening in the borough of Walsall. Since 1979, no council properties have been built at all. Of course properties have been sold off, and I would just make this comment: much reference has been made by the Minister to the privately rented sector. The question that I and my hon. Friends have asked on many occasions is a simple one. The Government tell us that it is right in law for public sector tenants to be able to buy. Why should that not apply to private tenants? Why should there be a distinction? Why is it that private tenants are not given that right in law? the explanation is pretty obvious—no Tory Government would dream of giving private tenants the right to buy.
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  In Walsall too many pre-1939 properties have yet to be included in the modernisation programme. The explanation for that is known to the Minister because I have written to him on a number of occasions. There simply are not enough funds. Since the Minister is here, can I refer to the fact that a number of tenants in my constituency live in what are known as the "Wimpey no fines" properties. They are very concerned indeed that their properties are not to he modernised in the forthcoming financial year. I have written to the director of housing and I have been informed that there are not sufficient funds for the work to be carried out in 1987–88. I then wrote to the Housing Minister. Altogether in the borough, not just in my constituency, it would cost about £3·5 million to bring that type of concrete-built but not pre-cast dwelling up to scratch. That is about £3,500 per property.
  Understandably, the tenants are up in arms at the state of these properties. I have already described them by their name—Wimpey no fines—and they were built just after the war. The problems with those dwellings include acute dampness, much condensation, rotting window frames, and so on.
  When I have received deputations from the residents concerned, they say, "Well, Mr. Winnick, are we to spend another winter in such conditions?" As I have just mentioned, when I received a reply from the director of housing I immediately wrote to the Housing Minister and asked him whether he would be willing to receive a deputation as requested by the residents. The answer was in the negative, I am afraid. I understand that the tenants are not satisfied with the Minister's reply to me and that they intend to come to London. If they come to Marsham street I shall do my best to see that they are seen by a Minister or at least by a senior civil servant. It would be very discourteous of the Minister to tell my constituents that, having travelled over 100 miles to London, they cannot be seen when they arrive at the Department of the Environment.
  What is required in this sector is a sufficient housing investment programme allocation to my local council and other housing authorities so that they can carry out their housing responsibilities of building, modernising and maintenance. The question which immediately arises is how much more it will cost if all the work that I have described is further delayed and not carried out in the next two or three years. It will certainly cost more, yet it is estimated that about 25 per cent. of those who are involved in the building trade are unemployed. Would it not be much more sensible for those people, instead of being jobless and having to rely on unemployment or supplementary benefit, to be building and modernising the properties so urgently required in the public sector?
  Again, I am sure that this problem too is shared by a number of hon. Members.
  In my constituency a number of elderly owner-occupiers are living in old properties. They cannot get an improvement grant. In some cases, they are unable to afford a new roof, for example. When I took these cases up with the local authority, I was told that there was no way in which any discretionary improvement grants could be made because of the lack of sufficient funding in the next financial year. I have been told that a large number of people in the borough—nearly 2,000—have been waiting for over four years for such grants. Unless the money is forthcoming, my constituents will not be able to carry out the work because they cannot afford to do it

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  themselves. When the Minister boasts about owner-occupation, he should think about these owner-occupiers as well. It is not too much to ask that they should be given the necessary funding to put on a new roof and other such essential work.
  There is no future for the private rented sector. I take the point made by the hon. Member for Hornchurch that there is no reason why an owner-occupier should not let out a room. Labour Members would be the last to say that that would be wrong. However, the idea that the private rented sector can somehow be revived and provide accommodation at a reasonable rent is sheer moonshine. The Government are trying to bring back the legislation of 30 years ago—the notorious Rent Act 1957. On a previous occasion, I reminded the House that when that Act was in operation, I was a councillor in a borough in London. The Minister can smile about this if he wants, but I saw for myself the numbers of people who were evicted quite legally, and not as a result of Rachmanism. Why is it that, with a majority of 140, the Government have not legislated to do away with the Rent Acts? The simple reason is that they have been frightened to do so before a general election. We must warn the country and private tenants of what is likely to happen if the Government were to be re-elected. Rachmanism would come back with a vengeance.
  The debate once again demonstrates the need for ample funding for the public sector and the need to ensure that improvement grants are made, so that, at the end of the day, all our people can be housed properly, whether they are owner-occupiers or council tenants. We need adequate accommodation for all our people, through the state or the voluntary housing sector.
  6.21 pm
  Mr. Ian Gow: No doubt, Mr. Deputy Speaker, at your bedside there is a copy of this month's edition of "Roof' which is the magazine for Shelter. In that document you will find an interview given by the hon. Member for Leeds, West (Mr. Meadowcroft). It is a breathtaking interview. With that flamboyance that is characteristic of the Liberal party there are 10 photographs of the hon. Gentleman in different poses. It starts in the way that one might expect. It says:
  "Meadowcroft didn't want to become the Alliance spokesman on housing and local government when the Liberals and SDP merged their parliamentary posts in January."
  That will come as no surprise to you, Mr. Deputy Speaker, if you read the Official Report tomorrow and see the speech of the hon. Member for Leeds, West.
  It is an astonishing interview, because it shows that the hon. Gentleman is way to the Left of the hon. Member for Birmingham, Perry Barr (Mr. Rooker). I shall give one or two quotations to illustrate this point. I emphasise that these words are not mine, but those of the official spokesman for the Liberal party. He said:
  "right to buy discounts should be concentrated on less desirable properties. There would be no 'blanket discounts' if he had his way".
  I shall be issuing a copy of this interview to my electorate, and I know that many of my hon. Friends will be doing the same. The hon. Gentleman does not appear to understand that those properties that he describes as less desirable have had an abated price by reason of the
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  fact that the open market value of less desirable houses is lower than the open market value of more desirable houses. However, that truth has not dawned on the hon. Gentleman.
  The hon. Gentleman went on to say:
  "Measures such as requiring owners of homes sold under the right to buy to sell back to the council if they move, however, could be used to ameliorate some of the worst effects of sales."
  At the last general election the Labour party proposed that, where a person who had bought his house or flat under the right to buy wanted to sell, he should be under an obligation to offer it back to the council first. That was an obligation to remunicipalise. It was denying persons who had bought under the right to buy the same freedom as those who had not bought under the right to buy. In certain circumstances, that may still be the policy of the Labour party, but I am dealing with the Liberal party. We now have the official spokesman of the Liberal party saying that those who have bought under the right to buy—more than 1 million of them, including many of the hon. Gentleman's constituents—will, when they wish to sell, be denied the freedom to choose the purchaser and will have to sell it back to the council, if the hon. Gentleman gets his way.
  That is not the only matter. Another short quotation shows the way in which the Liberal party never likes to offend anybody and always takes two sides simultaneously. I have further evidence for that proposition. The interviewer said:
  "He doesn't go so far as to approve of Tower Hamlets' policy of selling tenanted blocks of flats, but he won't condemn it outright either."
  As always, the Liberals are trying to have it both ways. No wonder that the person interviewing the hon. Gentleman reached this conclusion:
  "Having thus nailed his colours to the mast, Michael Meadowcroft immediately begins to pull them down again."
  I could not have put it better myself.
  Mr. Meadowcroft: I am grateful to the hon. Gentleman, who is under severe attack from the Liberals in Eastbourne. Is the hon. Gentleman aware that the selling of council houses was first instituted in Leeds in 1974, when there was an agreement between his party and mine, to do it on the terms set out in that article and that this was very successful? That is an important point.
  Mr. Gow: The hon. Gentleman would find it instructive to look up the record of how his party voted on what is now the Housing Act 1980, which gave the right to buy.
  I find myself in respectful disagreement with my hon. Friend the Minister on only one aspect of his remarks. He said that he thought the hon. Member for Perry Barr had made a good speech, but I disagree. I thought that it was a muddled speech and that some of his supporters, who had been hoping that there would be a real strategy on housing from the Labour party, were disappointed. The speech bore all the hallmarks of a shadow Minister who knows that he will never hold office. That is part of the trouble with the Labour party.
  I welcome the partial conversion of the hon. Member for Perry Barr to the policies enunciated and developed by my hon. Friend the Minister, and in the few minutes that remain to me I shall concentrate on one or two aspects of my hon. Friend's speech. He told the House that there were more than 100,000 houses and flats empty in the public sector, and more than 540,000 houses and flats

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  empty in the private sector. We may not know with total precision how accurate those figures are. We may not know precisely in what areas of the country they are, but we know one thing. If, as is the case, those figures are approximately accurate, and if, alongside those figures, we have the continuing scandal of homelessness and the continuing scandal—I hope that the hon. Member for Walsall, North (Mr. Winnick) has noted my choice of language — of some of the bed-and-breakfast accommodation, we cannot allow that number of empty houses and flats to continue.
  With regard to the public sector, I commend to my hon. Friend the Minister the suggestion put forward by my hon. Friend the Member for Ealing, Acton (Sir G. Young). I am particularly anxious that we should bring into use those houses and flats in the private sector that are presently under-used or unused. We must also consider the task of bringing into use that accommodation that exists in houses and flats where the owners would be willing to make a room or part of a house available for those who are presently homeless, but are discouraged from doing so. My hon. Friend the Minister rightly discussed the right to rent. However, he did not spell out—I appreciate why he did not—the specific proposals that we should adopt. We shall need more information than we received this afternoon when we come to write our manifesto.
  There has been a transformation in the private rented sector. When the Rent Acts were first introduced 75 years ago, 10 per cent. of our housing stock was held by owner-occupiers and 90 per cent. by the private rented sector. My hon. Friend the Minister has already said that the private rented sector has fallen in those 75 years from 90 to 8 per cent. in 1987.
  Mr. John Patten: Is my hon. Friend aware that, such is the loss of units of accommodation and homes in the private rented sector—presently running at 70,000 a year—that. unless we act, within 10 or 15 years there will be no private rented sector left?
  Mr. Gow: If there is an increase in owner-occupation—now approaching 64 per cent. in England—it is self-evident that there will be a diminution in renting. We want that figure of 64 per cent. to go on rising. Indeed, I am sure that it will.
  I believe that we need a radical policy to bring into use unused and under-used accommodation. We also need a radical policy to attract new investment to the private rented sector. I congratulate the Minister on his announcement of the increase in the number of approved landlords under the assured tenancy scheme. However, the truth is that, apart from that scheme, there is practically nobody in Britain building houses or flats for renting in the private sector.
  Mr. Winnick: It has been the same for 30 years.
  Mr. Gow: Exactly. The hon. Gentleman and I agree. My right hon. Friend the Member for Tonbridge and Mailing (Mr. Stanley) made a start with assured tenancies, and my hon. Friend the Minister is continuing that good work.
  In respect of all new lettings, I believe that the rent to be paid by the tenant should be that rent that is agreed between tenant and landlord.
  Mr. Winnick: Freely negotiated.
  Mr. Gow: Yes, the hon. Gentleman is correct. If the landlord asks too high a rent, he will not get a tenant. That practice would bring more accommodation into use.
  In respect of all future lettings, I believe that the terms of the tenancy should be those agreed between the landlord and tenant. In our future policies for lettings there should be no place for the rent officer, and no place for the tenant to have the right to extend the terms of his tenancy beyond that term agreed between himself and landlord.
  The tragedy of the Rent Acts is that they have injured the people whom they were designed to protect. We have succeeded in drying up the supply of privately rented accommodation, to the great injury of potential tenants. That has meant a great loss of housing for our people. I believe that the radical poliy that I have suggested would, in the medium term, reduce rents in many parts of the country. [Interruption.] It is quite extraordinary how the Opposition have still not learnt elementary economics. If one increases the supply of eggs, the price of eggs will diminish. If the supply of privately rented accommodation is increased, rents will come down.
  The Labour party believes that the moment one removes price controls there is a price rise. Some Opposition Members still do not accept that the free market is able to provide a better service to our people than is provided by the controls so beloved by the Opposition. I hope that my hon. Friend will have the courage to include in our manifesto radical proposals for the encouragement and revival of the private rented sector.
  6.34 pm
  Mr. Nick Raynsford: In many ways we have heard a rather depressing debate this afternoon. We have heard the backward attitudes of the hon. Member for Eastbourne (Mr. Gow), a former Minister for Housing, whose comments have gone a long way to explain his abject failure in office.
  We have also heard the sensitive comments of the hon. Member for Ealing, Acton (Sir G. Young) who advocated a scheme that was put to him by me—in a former guise before elected to the House—and others some two years ago when he was a Minister. Sadly, his sensitive approach towards this issue probably led to his departure from the present Government. He is now advocating a scheme that could have been put into practice two years ago if the Government had had the will to do so. We have heard the Minister's comments. He has presided over one of the most appalling housing crises since the war and he displayed insensitivity, complacency and arrogance that would make most people feel depressed.
  Any Minister who has witnessed this record rise in homelessness, together with the scandal of bed-and-breakfast accommodation, should come to the House with a touch of humility and a willingness to admit that things are not all that they should be. Instead, we have been treated to arrogance, insensitivity and complacency of an extraordinary scale.
  We now have the worst figures for homelessness since records began in 1947. It is ironic that, in the International Year of Shelter for the Homeless, we have the worst homeless figure since records began. We also have the worst figures yet recorded for bed-and-breakfast accommodation. That accommodation represents squalid, overcrowded conditions, imposing on families circumstances that destroy family life. Those conditions have

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  been achieved at an appalling financial and human cost. It is costing the Government more to keep families in bed-and-breakfast squalor than to build new homes. Such are the policies of the loony Right who govern our country at the moment. The Government are squandering money on keeping people in squalid hovels rather than building the homes that they need. What a disgraceful record. Any Minister worth his salt would apologise for that this afternoon, rather than hardly mentioning the issue of bed and breakfast.
  The Minister should not express surprise about the increase in bed-and-breakfast accommodation. It is not something that has mysteriously emerged, for no apparent reason. Bed-and-breakfast accommodation fills a gap left by the lack of an adequate house building programme and the lack of adequate homes available to rent. In a time of shortage, the private sector — beloved of the Conservatives—moves in to make a killing. The hon. Member for Eastbourne (Mr. Gow) should consider what life would be like were the Tories to change the Rent Acts to remove all controls on new lettings and thus allow such lettings to be freely negotiated.
  There are freely negotiated conditions of occupation for bed-and-breakfast accommodation. A landlord buys a property, but will not let it on decent terms, and states that he will take homeless people. He will charge the earth for squalid conditions. Such are the freely negotiated conditions that are presently being imposed by exploitative landlords. The Conservatives, to their eternal discredit, subsidise this exercise to a massive extent through the Department of Health and Social Security. They are subsidising those landlords who keep people in squalor rather than providing the necessary homes for people in need. Such is the basic economics that the hon. Member for Eastbourne should consider. It is the basic economics of exploitation — when the opportunity is available, in times of shortage, the private sector is rapacious.
  The Minister has given excuses for the present problems. He has discussed empty properties and once again has shown extraordinary hypocrisy. He turned his attack on local authorities for leaving properties empty. I join him in condemning those authorities, including Wandsworth, which leave masses of properties empty in order to sell them. Such properties are needlessly empty. However, I also condemn those Government Departments that have empty properties. The percentage of empty properties owned by Government Departments is far greater than those owned by any local authority. Government Department empties are 6·5 per cent. of their lettings.
  What is the Minister of Housing doing about that? Is he talking to his right hon. and hon. Friends and urging them to bring those properties into use? Has he talked to the Home Secretary about the 18 per cent. of Metropolitan police residential accommodation in London that is currently vacant? What about that scandal of empty property? Why are some of those homes not being used for the homeless? Why is nothing being done about those? The Minister is simply playing party politics in order to make cheap attacks on local authorities, but he will not apply the same logic to his own hon. Friends who have far more empty residential properties in their Departments. That is hypocrisy, and the Minister knows it.
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  The Minister knows that there is support in principle, on the Opposition side as well as on the Government side, for assured tenancies. He knows very well that this is only a small-scale operation and not a replacement for mainstream programmes. That is the tragedy of the Government's present policy. They are fiddling with palliatives and talking about small-scale schemes rather than providing mainstream programmes.
  The Government cry crocodile tears about the housing association movement, but they ought to be reminded of their record. In 1979, housing associations completed just over 16,000 lettings for people in need in England. That was the record that the Government inherited from the Labour Government. In the last 12 months, housing associations completed only 9,000 homes for letting. The Government like to be seen as a friend of the housing association movement but they have cut the housing associations' programme and associations that are desperately keen to provide rented homes for people in need are being prevented from doing so by Government policies. The Government are fiddling rather than dealing with the mainstream needs of our time. It is certainly not good enough for the Government to hide behind such palliatives.
  The Government's talk about the right to rent is perhaps the greatest hypocrisy of all. In the eight years during which they have been responsible for housing policy, they have presided over the worst ever decline in rented housing in Britain. Some 1 million homes for rent have gone from the market. About half of those were in the private rented sector and the other half were council homes. That is the legacy of this Government. Never before has there been such a loss of rented accommodation in so short a period. That is the record of the Government and therein lies the explanation for the alarming rise in homelessness and the bed-and-breakfast crisis.
  The shortage of rented housing needs to be tackled. The two parties that will fight the forthcoming election will put fundamentally different policies to the electorate. We will put policies of hope about building homes for people in need and the Conservatives will put a record of failure, disaster, homelessness and misery. On that record, the Government will be judged and found wanting.
  6.43 pm
  Mr. Richard Ottaway: I should like quickly to make a few points. My first is about the importance of improving the quality of housing estates like those in my constituency. We all know that there is a shortage of decent homes. There always has been and there always will be. This is primarily because expectations always exceed demand. However, building more council houses is not the whole answer. That results in large council estates, and we have found by painful experience that such estates are difficult to manage.
  We need smaller estates, either privately owned or in management, and the management should be carried out by housing associations or by tenants themselves. I believe in that concept primarily because it leads to greater involvement by those who live on the estates. We all know that, when people occupy their own houses and are involved in the running of their estates, that results in a cleaner, better and tidier estate. In Nottingham, my party is advocating for the local elections greater local

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  management in the running of the council estates. We should not fear going beyond that and should ask tenants how they want their estates to be managed.
  Anyone who takes an interest in housing will be aware of the Thamesmead experiment, in which tenants were asked whether they wanted to be run by Greenwich borough council or by a local trust. They voted to be run by a local trust. We should break up the large estates, give their tenants more choice, and encourage more localised management.
  My second point is about the need to deregulate the private rented sector. In Nottingham, both private and council houses are very cheap—indeed, it is almost as cheap to buy as to rent — but buying does not suit everybody. Britain needs mobility of labour. People going from the north to the south can get jobs but they cannot find somewhere to live. But it is not just that; people going from the north to the midlands have the same problem, and it affects young people who may not be high on a council's waiting list and have difficulty in finding somewhere to live.
  I am pleased to see that the hon. Member for Walsall, North (Mr. Winnick) has just returned to the Chamber. He said that, in the short term, rents may go up. However, as more property comes on to the market, rents will begin to drop, we will see them coming down to an acceptable level and more property will be available. It is important that we have adequate protection for the tenants in order to prevent the harassment and the Rachmanism that used to go on.
  My final point is that, in improving the quality of existing stock, we must look at estates such as those in Nottingham on which there are pre-war and post-war houses. They are largely unmodernised. Some of them still have outside toilets, and modernisation is slow. I complained to the local authority about this and it said that it was short of funds. If I were a councillor and the local Tory MP complained to me, that is what I would say to him. However, we see there the hypocrisy that I spoke about in my intervention, because while complaining that is has a shortage of funds, the council is relocating its housing services department in a brand new luxury block of flats which cost £2·5 million.
  I have no objection to such relocation, but to do it the council is taking £1·8 million out of the housing investment programme. Some £1·4 million of that was targeted for a housing association in Nottingham, but it will not now receive that money. A further £400,000 is being taken from housing receipts.
  I do not mind the council complaining to me about a shortage of funds, but I object to the approach of offices before homes, at the same time as the Opposition Front Bench spokesman complains that the Government are not giving the councils more money. We are hearing the smooth words of the Opposition spokesman and they are covering up for the iron fist of the activists in the country. The Opposition motion is hypocritical and I ask all hon. Members to resist it.
  6.48 pm
  Mr. George Howarth: In debates over the last few months, I have listened with interest to the Minister and I have read some of the articles that h: has had published about the emerging consensus about housing that exists in the House. I concede that, in terms of some ideas, there is an emerging consensus and to some
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  extent that is welcome. In this debate we have heard a catalogue of problems for which no resolution seems to be in sight. It is questionable whether the emerging consensus of ideas is a consensus of action. We need a consensus of ideas that leads to action.
  I shall not talk about homelessness or waiting lists, because those things have been well covered. One of the issues to which we must address our minds if we are to build up such a consensus is what to do about mortgage tax relief. We must ask ourselves what purpose it serves and how it can be used as an instrument of housing policy. The Minister quoted from today's leader in The Daily Telegraph. He omitted to quote from the leader a section that dealt with this very question. Speaking about the results of housing mortgage tax relief, the editorial said:
  "This expression of sturdy individualism has been encouraged by mortgage tax relief; but the latter has had the unintended effect of driving up house prices and so, in the long run, the proportion of the nation's wealth invested in bricks and mortar, as opposed to more productive options."
  Clearly I am not going to try to work out the solutions to that problem in my contribution this afternoon, but we have to address it. The Minister was perhaps a little disingenuous in quoting only part of that leader.
  In the time that is available to me, I want to discuss one type of housing provision which needs more attention and support. If we are to expand rented housing—I think there is a consensus that that needs to be done—how do we do so without repeating the mistakes of the past? A major part of the answer to that question is to involve the prospective tenants in the construction, design and thinking about housing. One way of doing that which I have been involved in that I think needs greater attention is the use of new build housing co-operatives that give people a say in where they live, the layout of the estate, the internal design of the houses and, more importantly, how those houses are managed and maintained.
  For some years I was fortunate to work in the housing co-operative movement on Merseyside. My conclusion is that, with motivation, in many respects these schemes are visibly better than other forms of rented housing and some forms of owner-occupied housing. The results of tenants in co-operative control warrant some thought and attention.
  At the moment on Merseyside there are some 24 new build housing co-operatives, and a further six which will be municipalised. I am pleased that some eight of those new build co-operatives are in my constituency. New build co-operatives prove that ordinary people — 800 on Merseyside—when given the opportunity, are capable of taking control of their housing and making a good job of it. They can control the development process and do something useful with it. It also shows that ordinary people can use professionals in a way that enriches their own lives and produces better schemes. The results are visibly better than other types of schemes both in overall effect and in detail.
  It is important that housing co-operatives are essentially, although not always, a local phenomenon. They tend to use local sites, providing hope to the area and a demonstrable belief in the area that is important. That also has important local consequences. It is quite a sight to see the Southdene or Cherryfield housing co-operatives in my constituency. They took over demolition sites and

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  new houses have sprouted like the phoenix from the ashes. In this local context, it is important that it keeps communities together and cements them.
  Another important point in the community context is that the skills that ordinary people develop while working in those schemes can be used to do other things. A small but important example is that there are several members of the Southdene housing co-operative in my constituency who, by employing those same skills, have formed the Southdene credit union. Those people have drawn the same sorts of conclusions about local control. Many other initiatives can spin off from housing co-operatives.
  I began by talking about the emerging consensus in housing. It is small, embryonic and tentative, and I do believe it is yet complete. But if we are not to repeat the mistakes we made in the past with rented houses, housing co-operatives should form a mainstream part of that consensus. It is the logical consequence of the involvement of tenants. It delivers good housing through co-operatives and it strengthens and controls local communities.
  There are many more things that I could say on the subject and had planned to, but time does not permit. The Government must recognise that, if they want the co-operative system to do a job for them, in turn they have to do a job for the co-operative movement.
  6.54 pm
  Mr. Jeremy Corbyn: It is a shame that this is such a short debate, because housing is the issue that affects people most. The speeches by the Minister and the former Minister were an absolute disgrace in complacency, especially the assumption that market forces will solve the housing problem. If that is so, why is it that there are record numbers of homeless people? Why is it that tonight, as on every night of the year, people will be sleeping under the national theatre, in Covent Garden, around the tube stations in London and alongside the main roads? The Government, in their obsession with market forces and the triumph of the rich over the poor, are creating a hobo society. That is all they are trying to do with their housing policies.
  Mr. Christopher Hawkins: Will the hon. Member give way?
  Mr. Corbyn: No, I will not give way.
  My own borough suffers from the contrasts of the type of society that the Government would like to create—the very expensive privately developed properties, often badly developed and badly built by incompetent property developers. Contrast that with the problems faced by the council in my borough. On the general waiting list of Islington council are some 9,500 people, of which 80 per cent. require bed-sit or one-bedroom accommodation. There are 10,000 people on the housing transfer list, mainly those who require family accommodation.
  Those people who come to see me, councillors or my colleague the hon. Member for Islington, South and Finsbury (Mr. Smith) know perfectly well that the policy of sale of council houses means that the possibility of elderly people or families with small children moving out of tower blocks is very limited. Yet the Government have the arrogance to talk about housing choice. There is no choice for those people.
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  The Government also talk about homelessness. In 1986, 2,812 people applied to my borough council as homeless people. Of those, 887 were single people, many of them extremely vulnerable. No answer for those people has come from the Tory Government or the Tory party in the past, none come now or will come in the coming election. They know it full well.
  Mr. Christopher Hawkins: Try the Rent Acts.
  Mr. Corbyn: The hon. Gentleman says, "Try the Rent Acts." Speaker after speaker from the Tory Benches proposed freedom for landlords to exploit people to the nth degree. They are proposing a return to Rachmanism. They are proposing all the horrors of the Rent Act 1957: nothing but homelessness and exploitation for the unemployed, the poor and the homeless.
  I also want to talk about the house-building costs that the Government impose on local authorities. To build a four-bedroomed two-person property in my borough costs approximately £52,000. If one adds to that the gross debt charges over 30 years that the council has to incur, we are talking of a cost of over £150,000 for that property. If the Government are serious about getting council houses built—I very much doubt that they are—they should look at the debts forced on local authorities by the system of local authority finance.
  The Government say they are concerned about housing, so I will give a couple of figures about the housing investment programme bid and the amount allocated to the borough of Islington to deal with its housing problem. In 1980–81, the council bid £60 million and was granted £47 million, or 79 per cent. of the bid. In 1983 it was granted the same percentage. In 1985–86, the council bid £81 million and was allocated £29 million. For the current year it has been allocated only 24 per cent. of its bid. The Government have the impertinence to describe the council as not meeting the housing needs of the people of the borough. It is they who are responsible for policy towards local government and for the levels of homelessness in this country.
  The investment bid application for 1987–88 stated:
  "Islington's housing is dominated by two contrasting realities. On the one side, there are the Council's attempts to maintain, improve and expand the housing stock in its ownership. This is an over-riding priority if Islington is to meet the ever-increasing and desperate demand for decent homes from existing tenants".
  That is quite correct. It is good stuff and it is correctly put. Then I look at the property pages of the local newspaper. I listen to what the Tory party says about the choice of housing and the choice of buying. An example on one of those property pages is a newly converted top floor, one-bedroom flat in Bryantwood road N.7, which is offered at £55,000. On the second page of the paper, a former council house in the borough of Haringey sold under the right to buy is now on sale for £86,000. That is way beyond the reach of people in housing need.
  In London, £45 million is being spent this year on bed-and-breakfast accommodation for the homeless—the very people who are now being expelled from those bed-and-breakfast hotels to make way for the tourist season. This night and every night, people will continue to sleep on the streets. The police will threaten street sleepers with the Public Order Act 1986, telling them they must move out of the way because they look untidy. I wish that the House could be lobbied by all those people who are completely homeless. The complacency and arrogant

  217
  smug smile of the Minister would be removed by the sight of those people demanding their rights: a roof over their heads.
  7.1 pm
  Mr. John Fraser: As we say in our motion, the supply of good quality, affordable housing is one of the indispensable conditions for a full, happy and healthy life. That is as true for the old-age pensioner looking for decent sheltered accommodation as it is for a young child growing up and taking his first opportunities in life. That understanding of a basic need is endorsed by all the organisations that subscribe to most of the motion before the House, from the Association of Metropolitan Authorities to the Royal Institution of Chartered Surveyors. It is a proposition endorsed by almost everybody in the country, apart from the people who occupy the Conservative Benches. By their words and actions, they have demonstrated that they regard the Government and their agencies as no longer being involved, except in the margins, in the provision of housing accommodation generally for the people of this country. That policy was announced by the right hon. Member for Wanstead and Woodford (Mr. Jenkins), when he was Secretary of State for the Environment, to the Housing Consultative Council when he said that it should concentrate on the provision of housing only for people in special need.
  Every Government since the war, and many before the war, accepted the general duty of the state to provide and encourage housing of good quality — except this one. The facts, as well as the words, speak for themselves. For instance, in 1978–79, local authorities spent a modest 0·63 per cent. of gross domestic product on providing new council housing to rent. Yet under this Government, by 1985–86 the same authorities had been reduced to spending a miserable 0·16 per cent. of GDP on new investment in housing. An almost imperceptible part of the wealth of the country is devoted to people in housing need.
  Last year, the number of homes built to rent for people in need was the lowest peacetime figure since 1924. It was the lowest figure since John Wheatley was Minister of Housing. Just to emphasise the switch in philosophy on housing among the Conservative party, one can put the figures another way. Last year, the Government built one house for every 10 council homes provided by Harold Macmillan when he was Minister of Housing and Local Government. In 1978, the last full year of Labour government, we were completing about 2,500 council homes for rent every week. By 1986 that number, under restrictions of subsidy and capital expenditure, had fallen to 600 a week.
  What we got from the Minister was the Tory housing GT model. I call it the GT model because it is just gimmicks and tokens. For the loss of almost 2,000 homes a week to rent—100,000 homes a year—we have had talk of a right to rent. But when the Minister talks about a right to rent, he is talking about a fantasy, using a phrase he stole from the Labour housing group. The Government have had eight years in office, but what are the achievements of the new initiatives?
  The Minister talked about the number of organisations that could build homes for assured tenancies. We have not been against assured tenancies, but I have to tell the Minister and the House that the Government have provided an average of about two homes per week under
  218
  the assured tenancy scheme—enough to count on two fingers—to try to make up for the loss of 2,000 homes a week as a result of cuts in public expenditure and restrictions on local authorities. Quite deliberately, through the withdrawal of subsidy, the amount of housing available to rent has been reduced. It is no answer to tell those people that they can either go out and buy or look for housing on the private market.
  The Labour party supports the desire and the right of people to own their own homes. We always have done and we always will. However, for some people—about one third of our population—that will never be practical or possible, particularly for the 3 million people on the dole. Those people are equally entitled to housing of good quality.
  Our charge against the Government is not just that they have failed to discharge their duty to provide housing; it is even more serious. They no longer regard themselves as having a general duty to house at all. That was certainly confirmed by the Minister this afternoon.
  That dereliction of duty led to 100,000 families being accepted as homeless in 1986. It led to 275,000 families applying to be treated as homeless last year. In our capital city and booming financial centre it has led to a contrast in housing standards that is more akin to the big cities of Latin America than to the London we love.
  Penthouses are selling on the River Thames for figures measured in millions of pounds, but 25,000 people in London have to live rough or in grossly unsatisfactory accommodation. Sometimes they have river accommodation as well but it is usually a cardboard box or a bench. That is the contrast that has been brought about. In London, it has led to 6,000 families in bed-and-breakfast accommodation nightly at a cost of £26 million a year. That is enough to pay the running, maintenance and building costs of 5,000 new homes. That is a policy of sheer economic lunacy, as well as inhumanity.
  If one wants to glimpse Tory housing policy for those in need one does not need to look any further in London than Westminster city council—the Tories' aristocratic jewel of local authorities—and to those who operate the policy of the lunatic raving Right. On the Elgin and Walterton estates in Westminster, there are 700 council homes for rent, in an area of acute shortage of housing to rent. Yesterday I met Mr. William Rae. He is aged 83 and has lived on that estate for over 50 years. For 48 of those years, he lived at 50, Walterton road, first as tenant of a private landlord but later with the council as his landlord. Not many years ago, he moved to another property in the same road, just a few doors away. He now faces eviction by Westminster city council as a direct result of central Tory housing policy, carried on by the enthusiastic practitioners in Westminster.
  Mr. Rae has been told that 150 council tenants will be evicted from the Walterton estate into other accommodation so that their homes can be sold to the private sector. On the Elgin estate, about 100 people will be dealt with in a similar way. People such as Mr. Rae, who fought in two world wars, will be forced to move out of their homes to make way for private development. In the city of Westminster, where the sale of bedsits is booming, those council homes could be sold for about £70,000 for bedsits and about £87,000 for single-bedroom accommodation.

  219
  Never again in Westminster, in the centre of the bed-and-breakfast industry, will people be able to rent at affordable prices. As a result of Tory policies, those homes will be lost for ever and the need for housing will increase in London.
  The reason is that the raving Right of Westminster are carrying out the raving policies of Whitehall, although Westminster has the capital receipts which have been frozen. It has been forced to cannibalise its council accommodation in order to keep it going. Mr. Rae, this 83-year-old gentleman who would like to stay where he is, went to a Westminster council meeting to protest. One of the leading Tory councillors on Westminster council described Mr. Rae as "one of a ragbag of extremists". His extremism is that he fought in two world wars and he has lived in the same road for almost half a century. He likes living there, he likes his neighbours and the close-knit community; but to the lunatic Right of the Westminster city council he is apparently an extremist.
  Mr. Rae, at the age of 83, does not want to exercise the right of which the Government amendment speaks, to buy his own home. If Mr. Rae wants to stay put and fight against the Tory council in Westminster and not exercise his right to buy, the committee of Westminster city council has got him. At the meeting to which Mr. Rae went, the committee approved the following resolution:
  "That proceedings for recovery of possession be taken where necessary in respect of tenants on the Walterton and Elgin estates submitting right-to-buy applications after 1 April 1987 in accordance with paragraph 5.6 of this report."
  The ultimate in Tory housing policy is that, in the centre of a city where people are clamouring for homes to rent or buy at prices that they can afford, in a city where bed-and-breakfast hotels are booming, where people sleep in cardboard boxes, Westminster city council, in the central stream of Tory housing policy — the policy of privatisation—is about to evict 250 tenants to sell off parts of its estates in order to keep the council going, not to provide affordable housing, but to raise the money to maintain the rest of the estate.
  We in the Labour party say that the party which believes that the Government should get out of housing is the party that should get out of government.
  7.13 pm
  The Parliamentary Under-Secretary of State for the Environment (Mr. Richard Tracey): The Government welcome an opportunity for debate on housing, because housing is important, at both the local and the national level, and it is only right that it is debated regularly. My hon. Friend the Minister for Housing, Urban Affairs and Construction has been listening closely to all that has been said in the debate, as I have, and we shall study closely the points that have been made.
  One would imagine, from some of the remarks of Members of the Opposition, that the Government's housing policies would be very unpopular. We had the archetype of that kind of speech from the hon. Member for Walsall, North (Mr. Winnick), but we have become accustomed to hearing that speech from him. As Government Members know, our policies are not unpopular. Our housing policies are very popular; so popular that the Opposition parties, particularly the Labour party, are busy trying to adopt parts of them.
  The hon. Member for Fulham (Mr. Raynsford) nods. He claimed to have to played a part in the conception of
  220
  one of our policies. He said that before he came to this House he had had discussions with my hon. Friend the Member for Ealing, Acton (Sir G. Young). Our policies are popular because the Conservative party believes in giving people the sort of housing that they want, rather than imposing on them some centrally dictated type and tenure of housing.
  The main priority over the first years of this Government was to widen the opportunities for home ownership, because that is what most people want, and we have been outstandingly successful. Public sector tenants were given the right to buy their homes, and since 1979 over 1 million council, new town and housing association houses and flats have been sold. I am sure that the electors will be grateful to my hon. Friend the Member for Eastbourne for pointing out so clearly this afternoon the policies of the Liberal party, as stated by the hon. Member for Leeds, West (Mr. Meadowcroft), the housing spokesman for the so-called alliance.
  A series of low-cost home ownership initiatives have made it possible for more young people to become home owners. Since 1979, 4 million households have become owner-occupied for the first time. About 65 per cent. of dwellings are now owner-occupied, compared with 57 per cent. in 1979 when the Labour party left government.
  It would be wrong, as some have done, to represent our housing policies as being concerned exclusively with the promotion of home ownership. As my hon. Friend the Minister said, we have been working hard to improve the lot of the tenant. We have developed, and recently extended, the concept of assured tenancies. New mechanisms have been devised to allow much greater input of private sector resources into the public sector. In the Housing Act 1980, the Government introduced the first statutory charter of rights for public sector tenants. Through the priority estates project and Estate Action we have encouraged improved local management of tenanted estates. We intend to go further.
  The Housing and Planning Act 1986, which I was pleased to pilot through the House with my hon. Friend the Minister for Housing, Local Government and Construction, encouraged further innovations in forms of tenure and management. The hon. Member for Fulham talked about housing associations, which the Government rate very highly. The Government have provided resources in 1987–88 to allow for 22,000 new association houses to be rented or bought.
  Many Labour Members have talked about the problems of homelessness. I should correct two common misconceptions about homelessness. The first is that the much-quoted figure of over 100,000 households with no roofs over their heads is not correct. Those people have been accepted by local authorities under the homeless persons legislation and they have been housed mostly in permanent accommodation.
  The second misconception is that the rise in the number of households accepted as homeless by local authorities is a direct result of cuts in public sector resources. That is certainly not true. The causes of homelessness are complex. It has to do with the supply of housing, especially the decline of private renting, as my hon. Friend the Member for Eastbourne said today, as he has on many other occasions.
  Private renting flourishes in every other part of the free world, helping the homeless, as much as the young and the job seeker. Homelessness is the extreme development of

  221
  the monopoly of public housing, which inevitably creates—[Interruption.] I advise Opposition Members to listen and they might learn—rationing and queues.
  But the reasons for homelessness go wider than that. It has much to do with social factors, such as the increasing incidence of divorce. Britain has the highest divorce rate in Europe, except for Denmark. Young people are leaving home earlier. Today's patterns of migration and the general loosening of the structure and cohesion of family life are also causes. [Interruption.]
  The Opposition may dispute my reasons for homelessness, but the fact that homelessness is caused by social factors does not mean that the Government have any intention of washing their hands of the consequences. We have launched a major study by the University of Birmingham's centre for urban and regional studies. We need to improve our information about the homeless if we are to deal seriously with the problem.
  The supply of housing in Britain has increased significantly. Since 1979 the total number of dwellings in England has increased by 7·5 per cent., from 17·5 million to 18·9 million. Private sector house building completions in England in 1986 were 142,000, the highest level since 1973, when, incidentally, we last had a Conservative Government.
  We recognise that the overall increase in supply does not mean that there are not shortages of particular types of accommodation in son-le areas, but those shortages could be eased drastically if better use were made of existing dwellings in the public and private sectors.
  I commend to the House what has been said this afternoon by my hon. Friend the Member for Ealing, Acton. He talked about monitoring schemes being run by the London borough of Bromley and others. Under those schemes tenants may receive cash to help them to buy a home in the private sector and so create a vacancy for the council. I am happy to tell the House that the Department has commissioned research into that matter which is progressing well, but it is a little early to give its initial results.
  My hon. Friend the Member for Streatham (Mr. Shelton) talked about the anomalies that seem to exist in the account given by various boroughs of empty dwellings. Local authorities are asked to provide details of their empty council dwellings on their housing investment programme submissions. They are asked to show those that are vacant for more than six months, one year or two years. This year we shall ask local authorities to show separately their squatted dwellings, and that should help to resolve the problem that was identified so clearly and graphically, particularly in the London borough of Lambeth, by my hon. Friend.
  This afternoon we have heard something about the condition of the housing stock. This was raised at an early stage by the hon. Member for Leeds, West. Over recent years we have recognised that more money needed to be spent on maintaining the existing housing stock, and more money is being spent. Spending on home improvement grants, although lower than in 1983 and 1984, was still £400 million last year, about five times the level of the last year of the previous Labour Administration. Let us not forget that that was also the year when the Liberal party kept the Labour Government in power.
  Total expenditure on maintaining the private sector stock is running at about £10,000 million a year. Similarly, local authorities are, rightly, spending more of their
  222
  resources on the repair and maintenance of their stock — over £2·5 billion out of capital and revenue in 1985–86. The number of local authority and new town dwellings renovated each year has increased by 120 per cent. since 1978, to 135,000 in 1986.
  As is inevitable in a housing debate, we have heard complaints from the Opposition of cuts in public sector resources on housing, particularly resources for capital investment. Let me draw attention to the local authority areas of three hon. Members who have spoken. I must point out to the hon. Member for Islington, North (Mr. Corbyn) that 18 per cent. arrears of the rent roll exists in the borough of Islington—£6·17 million. Let us hear no more about a lack of resources from him.
  The hon. Member for Liverpool, Walton (Mr. Heffer) talked of a lack of resources. In Liverpool the arrears amount to 13 per cent. of the rent roll—£7·67 million—and 11 per cent. of the housing stock is unoccupied. The hon. Member for Stretford (Mr. Lloyd) said that his authority was short of resources, but Manchester is 9 per cent. in arrears on its rent roll.
  This has been an interesting debate. There is clearly a measure of agreement between us and some Opposition Members on some issues, but on others there is no meeting of minds. We do not underestimate the problems that exist, but our policies are designed to create a housing market with real choices in all sectors, to make the most effective use of public sector funds and to unlock the huge resources in the private sector. That is the best way forward. I commend to the House the amendment in the name of my right hon. Friend the Prime Minister.
  Question put, That the original words stand part of the Question:—
  The House divided: Ayes 179, Noes 240.

  Division No. 147]

  [7.28 pm

  AYES

  Adams, Allen (Paisley N)

  Cocks, Rt Hon M. (Bristol S)

  Alton, David

  Cohen, Harry

  Archer, Rt Hon Peter

  Conlan, Bernard

  Ashdown, Paddy

  Cook, Frank (Stockton North)

  Atkinson, N. (Tottenham)

  Cook, Robin F. (Livingston)

  Bagier, Gordon A. T.

  Corbett, Robin

  Barnes, Mrs Rosemary

  Corbyn, Jeremy

  Barron, Kevin

  Craigen, J. M.

  Beckett, Mrs Margaret

  Crowther, Stan

  Bell, Stuart

  Cunliffe, Lawrence

  Benn, Rt Hon Tony

  Cunningham, Dr John

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

  Dalyell, Tarn

  Bermingham, Gerald

  Davies, Rt Hon Denzil (L'lli)

  Bidwell, Sydney

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

  Blair, Anthony

  Deakins, Eric

  Bray, Dr Jeremy

  Dewar, Donald

  Brown, Hugh D. (Provan)

  Dixon, Donald

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

  Dobson, Frank

  Brown, Ron (E'burgh, Leith)

  Dormand, Jack

  Bruce, Malcolm

  Douglas, Dick

  Buchan, Norman

  Dubs, Alfred

  Caborn, Richard

  Duffy, A. E. P.

  Callaghan, Rt Hon J.

  Dunwoody, Hon Mrs G.

  Callaghan, Jim (Heyw'd & M)

  Eadie, Alex

  Campbell, Ian

  Eastham, Ken

  Campbell-Savours, Dale

  Evans, John (St. Helens N)

  Canavan, Dennis

  Fatchett, Derek

  Carlile, Alexander (Montg'y)

  Faulds, Andrew

  Carter-Jones, Lewis

  Fields, T. (L'pool Broad Gn)

  Cartwright, John

  Fisher, Mark

  Clark, Dr David (S Shields)

  Flannery, Martin

  Clarke, Thomas

  Forrester, John

  Clay, Robert

  Foster, Derek

  Clelland, David Gordon

  Foulkes, George

  Clwyd, Mrs Ann

  Fraser, J. (Norwood)

  223

  George, Bruce

  O' Neill, Martin

  Gilbert, Rt Hon Dr John

  Park, George

  Golding, Mrs Llin

  Patchett, Terry

  Hamilton, James (M'well N)

  Pendry, Tom

  Hamilton, W. W. (Fife Central)

  Pike, Peter

  Harrison, Rt Hon Walter

  Prescott, John

  Healey, Rt Hon Denis

  Radice, Giles

  Heffer, Eric S.

  Randall, Stuart

  Hogg, N. (C'nauld & Kilsyth)

  Raynsford, Nick

  Holland, Stuart (Vauxhall)

  Redmond, Martin

  Home Robertson, John

  Rees, Rt Hon M. (Leeds S)

  Howarth, George (Knowsley, N)

  Richardson, Ms Jo

  Howell, Rt Hon D. (S'heath)

  Roberts, Allan (Bootle)

  Howells, Geraint

  Roberts, Ernest (Hackney N)

  Hoyle, Douglas

  Robertson, George

  Hughes, Robert (Aberdeen N)

  Robinson, G. (Coventry NW)

  Hughes, Roy (Newport East)

  Rogers, Allan

  Hughes, Sean (Knowsley S)

  Rooker, J. W.

  Hughes, Simon (Southwark)

  Ross, Ernest (Dundee W)

  Janner, Hon Greville

  Rowlands, Ted

  Jenkins, Rt Hon Roy (Hillh'd)

  Sedgemore, Brian

  John, Brynmor

  Sheerman, Barry

  Johnston, Sir Russell

  Sheldon, Rt Hon R.

  Kennedy, Charles

  Shore, Rt Hon Peter

  Kirkwood, Archy

  Short, Ms Clare (Ladywood)

  Lambie, David

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

  Lamond, James

  Skinner, Dennis

  Leadbitter, Ted

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

  Leighton, Ronald

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

  Lewis, Ron (Carlisle)

  Snape, Peter

  Lewis, Terence (Worsley)

  Soley, Clive

  Litherland, Robert

  Spearing, Nigel

  Lloyd, Tony (Stretford)

  Steel, Rt Hon David

  Lofthouse, Geoffrey

  Strang, Gavin

  Loyden, Edward

  Straw, Jack

  McCartney, Hugh

  Taylor, Matthew

  McGuire, Michael

  Thomas, Dafydd (Merioneth)

  McKay, Allen (Penistone)

  Thomas, Dr R. (Carmarthen)

  MacKenzie, Rt Hon Gregor

  Thompson, J. (Wansbeck)

  McNamara, Kevin

  Thorne, Stan (Preston)

  McTaggart, Robert

  Tinn, James

  McWilliam, John

  Wainwright, R.

  Madden, Max

  Wallace, James

  Marshall, David (Shettleston)

  Warden, Gareth (Gower)

  Martin, Michael

  Weetch, Ken

  Mason, Rt Hon Roy

  Welsh, Michael

  Maxton, John

  White, James

  Maynard, Miss Joan

  Wigley, Dafydd

  Meacher, Michael

  Wilson, Gordon

  Meadowcroft, Michael

  Winnick, David

  Michie, William

  Wrigglesworth, Ian

  Mikardo, Ian

  Young, David (Bolton SE)

  Millan, Rt Hon Bruce

  Morris, Rt Hon A. (W'shawe)

  Tellers for the Ayes:

  Morris, Rt Hon J. (Aberavon)

  Mr. Frank Haynes and

  Nellist, David

  Mr. Ron Davies.

  Oakes, Rt Hon Gordon

  NOES

  Aitken, Jonathan

  Blackburn, John

  Amess, David

  Body, Sir Richard

  Ancram, Michael

  Bonsor, Sir Nicholas

  Arnold, Tom

  Boscawen, Hon Robert

  Ashby, David

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

  Aspinwall, Jack

  Bowden, Gerald (Dulwich)

  Atkins, Rt Hon Sir H.

  Boyson, Dr Rhodes

  Atkins, Robert (South Ribble)

  Braine, Rt Hon Sir Bernard

  Atkinson, David (B'm'th E)

  Brandon-Bravo, Martin

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

  Bright, Graham

  Baker, Nicholas (Dorset N)

  Brittan, Rt Hon Leon

  Baldry, Tony

  Browne, John

  Banks, Robert (Harrogate)

  Bryan, Sir Paul

  Batiste, Spencer

  Budgen, Nick

  Beaumont-Dark, Anthony

  Bulmer, Esmond

  Bellingham, Henry

  Burt, Alistair

  Bendall, Vivian

  Butcher, John

  Benyon, William

  Butler, Rt Hon Sir Adam

  Bevan, David Gilroy

  Butterfill, John

  Biffen, Rt Hon John

  Carlisle, John (Luton N)

  Biggs-Davison, Sir John

  Carlisle, Kenneth (Lincoln)

  224

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

  Jessel, Toby

  Cash, William

  Johnson Smith, Sir Geoffrey

  Channon, Rt Hon Paul

  Jones, Gwilym (Cardiff N)

  Chapman, Sydney

  Jones, Robert (Herts W)

  Chope, Christopher

  Kellett-Bowman, Mrs Elaine

  Churchill, W. S.

  Kershaw, Sir Anthony

  Clark, Dr Michael (Rochford)

  King, Roger (B'ham N'field)

  Clark, Sir W. (Croydon S)

  Knight, Greg (Derby N)

  Clarke, Rt Hon K. (Rushcliffe)

  Knox, David

  Clegg, Sir Walter

  Lang, Ian

  Cockeram, Eric

  Lawrence, Ivan

  Conway, Derek

  Lee, John (Pendle)

  Coombs, Simon

  Leigh, Edward (Gainsbor'gh)

  Cope, John

  Lennox-Boyd, Hon Mark

  Cormack, Patrick

  Lester, Jim

  Couchman, James

  Lightbown, David

  Critchley, Julian

  Lilley, Peter

  Dickens, Geoffrey

  Lloyd, Sir Ian (Havant)

  Dicks, Terry

  Lloyd, Peter (Fareham)

  Dorrell, Stephen

  McCrindle, Robert

  Douglas-Hamilton, Lord J.

  MacKay, John (Argyll & Bute)

  Dover, Den

  McLoughlin, Patrick

  du Cann, Rt Hon Sir Edward

  Major, John

  Dunn, Robert

  Malone, Gerald

  Dykes, Hugh

  Maples, John

  Emery, Sir Peter

  Mates, Michael

  Evennett, David

  Mather, Sir Carol

  Fallon, Michael

  Maude, Hon Francis

  Farr, Sir John

  Mitchell, David (Hants NW)

  Fenner, Dame Peggy

  Monro, Sir Hector

  Fletcher, Sir Alexander

  Moore, Rt Hon John

  Forman, Nigel

  Morrison, Hon C. (Devizes)

  Forsyth, Michael (Stirling)

  Moynihan, Hon C.

  Forth, Eric

  Neubert, Michael

  Fowler, Rt Hon Norman

  Norris, Steven

  Fraser, Peter (Angus East)

  Onslow, Cranley

  Fry, Peter

  Oppenheim, Phillip

  Gale, Roger

  Osborn, Sir John

  Galley, Roy

  Ottaway, Richard

  Gardner, Sir Edward (Fylde)

  Parkinson, Rt Hon Cecil

  Garel-Jones, Tristan

  Patten, J. (Oxf W & Abgdn)

  Gilmour, Rt Hon Sir Ian

  Pattie, Rt Hon Geoffrey

  Glyn, Dr Alan

  Pawsey, James

  Goodhart, Sir Philip

  Peacock, Mrs Elizabeth

  Gorst, John

  Pollock, Alexander

  Gow, Ian

  Porter, Barry

  Gower, Sir Raymond

  Portillo, Michael

  Grant, Sir Anthony

  Powley, John

  Greenway, Harry

  Proctor, K. Harvey

  Gregory, Conal

  Pym, Rt Hon Francis

  Griffiths, Sir Eldon

  Raison, Rt Hon Timothy

  Griffiths, Peter (Portsm'th N)

  Rees, Rt Hon Peter (Dover)

  Ground, Patrick

  Renton, Tim

  Grylls, Michael

  Rhodes James, Robert

  Hamilton, Hon A. (Epsom)

  Rhys Williams, Sir Brandon

  Hamilton, Neil (Tatton)

  Ridley, Rt Hon Nicholas

  Hampson, Dr Keith

  Ridsdale, Sir Julian

  Hannam, John

  Rippon, Rt Hon Geoffrey

  Harris, David

  Roberts, Wyn (Conwy)

  Harvey, Robert

  Robinson, Mark (N'port W)

  Haselhurst, Alan

  Roe, Mrs Marion

  Hawkins, C. (High Peak)

  Rossi, Sir Hugh

  Hawksley, Warren

  Sainsbury, Hon Timothy

  Hayes, J.

  St. John-Stevas, Rt Hon N.

  Hayward, Robert

  Shaw, Giles (Pudsey)

  Heathcoat-Amory, David

  Shaw, Sir Michael (Scarb')

  Heddle, John

  Shelton, William (Streatham)

  Henderson, Barry

  Shepherd, Colin (Hereford)

  Hickmet, Richard

  Shepherd, Richard (Aldridge)

  Higgins, Rt Hon Terence L.

  Silvester, Fred

  Hogg, Hon Douglas (Gr'th'm)

  Sims, Roger

  Holland, Sir Philip (Gedling)

  Skeet, Sir Trevor

  Howard, Michael

  Speed, Keith

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

  Speller, Tony

  Howarth, Gerald (Cannock)

  Spencer, Derek

  Howell, Ralph (Norfolk, N)

  Spicer, Jim (Dorset W)

  Hubbard-Miles, Peter

  Squire, Robin

  Hunter, Andrew

  Steen, Anthony

  Irving, Charles

  Stern, Michael

  Jenkin, Rt Hon Patrick

  Stevens, Lewis (Nuneaton)

  225

  Stewart, Allan (Eastwood)

  Waldegrave, Hon William

  Stewart, Andrew (Sherwood)

  Wall, Sir Patrick

  Stewart, Ian (Hertf'dshire N)

  Waller, Gary

  Stradling Thomas, Sir John

  Walters, Dennis

  Sumberg, David

  Wardle, C. (Bexhill)

  Tapsell, Sir Peter

  Watson, John

  Taylor, Teddy (S'end E)

  Watts, John

  Thomas, Rt Hon Peter

  Wells, Bowen (Hertford)

  Thompson, Patrick (N'ich N)

  Wells, Sir John (Maidstone)

  Thorne, Neil (Ilford S)

  Whitfield, John

  Thornton, Malcolm

  Winterton, Mrs Ann

  Townend, John (Bridlington)

  Winterton, Nicholas

  Townsend, Cyril D. (B'heath)

  Wolfson, Mark

  Tracey, Richard

  Woodcock, Michael

  Trippier, David

  Yeo, Tim

  Trotter, Neville

  Young, Sir George (Acton)

  Twinn, Dr Ian

  Younger, Rt Hon George

  van Straubenzee, Sir W.

  Vaughan, Sir Gerard

  Tellers for the Noes:

  Waddington, Rt Hon David

  Mr. Tony Durant and

  Wakeham, Rt Hon John

  Mr. Richard Ryder.

  Question accordingly negatived.
  Question, That the proposed words be there added, put forthwith pursuant to Standing Order No. 30 (Questions on amendments), and agreed to.
  Mr. Deputy Speaker forthwith declared the main Question, as amended, to be agreed to.
  Resolved,
  That this House believes that as many households as possible should have the opportunity to benefit from owning their own home and that for those who are unable to buy or who do not wish to do so there should he a real choice of rented housing both in terms of type and location of dwelling and of landlord; and congratulates Her Majesty's Government for pursuing policies which give people not only the housing they need, but also the housing they want.

Rolls-Royce
Mr. Deputy Speaker (Mr. Ernest Armstrong): We now come to the second motion in the name of the Leader of the Opposition. I have to announce to the House that Mr. Speaker has not selected the amendment.
7.41 pm
Mr. John Smith: I beg to move,
That this House deplores the proposed privatisation of Rolls-Royce and the way in which it would be sold off at well below its proper value; and believes that the company should remain in public ownership in order to secure British ownership, adequate capital investment, research and development, and job security. as well as a proper return for the taxpayer on the massive public investment which, together with the commitment of all its employees, secured the recovery of a company which is crucial to this country's aerospace and engineering industries.
May I first observe that this is a debate that should have taken place in Government time. The proposal to privatise Rolls-Royce comes from the Government, and the Government alone. Were it not for a technical matter, the way in which Rolls-Royce was taken into the public sector, they would in other circumstances have had to come here with a piece of legislation and we could have had the adequate and thorough debate that an issue of this importance demands. It is not for want of trying. We have repeatedly approached the Government, insisting that the debate should be held, but all our requests have been turned down. So the duty that properly lay with the Government has on this occasion been accepted by the Labour party. That is why we put the motion down tonight.
Our case is that the proposed privatisation of Rolls-Royce is motivated by dogma, pure and simple. There is no case whatever on grounds of competition or of an industrial, financial or technical kind for privatising Rolls-Royce. It is simply another—yet another—expression of the Government view that all successful enterprises in the public sector must be moved to the private sector. We know that Rolls-Royce has been in the public sector since the tragic collapse in 1971, when it was acquired by a former Conservative Government who, on that occasion at least, rose to their responsibilities. Since then, the company has, as a result of massive public investment, been turned round. It is a major achievement by the company, and I pay tribute to all who work in it for their success in doing this. It now has a turnover of £1·8 billion, and last year it declared profits of £120 million.
Apart from the efforts of everyone who works there, this could not, of course, have been achieved without the very strong and sustained financial support provided by successive Administrations. One would have thought that the sensible thing, having recited this period of recovery and being on the verge of years of profitability, would be to keep it in the public sector and to obtain a return for the public on the investment made on its behalf; but that is not what has happened.
It would be instructive just to look for a minute or two at the financial proposals behind the privatisation scheme. We know that the Government supplied equity capital to the extent of £508 million. My right hon. Friend the member for Glasgow, Govan (Mr. Milian) has been pursuing these matters relentlessly by questions. In an answer that he received from the Minister for Information Technology, the Minister confirmed that, at today's prices, the equity capital was valued at £1,063 million.

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We know also that because of expenditure on the RB211–22B project £537 million was supplied by the Government, with £334 million recovered. That has been confirmed in correspondence from the Minister. So we know that another £203 million went in on that account. We also know from the pathfinder prospectus that the Government propose effectively to wipe out £283 million by the way in which the shares are to be sold.
Adding that up, we reach a figure well in excess of £1·5 billion. That is without taking into account the substantial amount of money advanced by the Department of Trade and Industry through the advanced engineering programme which, between 1982 and 1986 alone, amounted to £162 million, and the money for development contracts from the Ministry of Defence which, after allowing for repayments over the same small period, amounted to £241 million. So we know that more than £1·5 billion has gone into Rolls-Royce from the public coffers, a figure which, if we take account of launch aid and research and development support, is much nearer £2 billion and may even be higher than that.
Then we look at the prospectus and at the price at which the Government propose to sell the company. They announced the figure this morning. It is likely to raise £1·3 billion. So why on earth are we selling one of Britain's most prestigious companies, in which we have invested probably more than £2 billion, for £1·3 billion? Why are we handing it over, now that it is making a profit of £120 million, and effectively telling those who will purchase it that, although they did not put in any investment over all those years, and although they did not take the risk of turning the company round, we are handing over to them more than £100 million of profit for as far ahead as we can see?
Even worse, we know, again from the prospectus, that there are £600 million-worth of unabsorbed tax losses with the company and that the company will get the benefit of that. So we know that for years ahead the privatised Rolls-Royce will not pay any corporation tax whatever. The more one looks at this, the more one sees that the privatisation of Rolls-Royce is a one-way street — burdens and losses for the taxpayers, profits for the private sector. It is an appalling example of the stewardship of our public funds by the Government.
I note also with alarm that in today's Evening Standard one of the brokers for the company at Hoare Govett, Peter Deighton, talking about who would invest in the company, said:
"The public will subscribe in force and the US and Japanese investors are likely to pile in."
It will not be beyond the Government's knowledge that the Japanese are not exactly allowing British investors to "pile in" to take shares in Japanese companies at present.
I can think of no example in the recent history of our public finances when a more irresponsible exercise has been conducted than on this occasion. That is why we argue with force that there is no financial justification whatsoever for this move. There is not even on this occasion the notion of piling up an election fund for the Conservative party.
The matter is, of course, serious because, as we stress in our motion, it is important that British ownership should be secured for one of Britain's most important companies.
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No doubt the Secretary of State will say that he has once again produced a golden share in the company's articles of association and that, for the £1 share that he buys, but that he can never use in a voting capacity, he can block any change in the articles of association that might allow foreign ownership to predominate in the company. That is all very well, but it is an untried and untested mechanism. It is one thing to take a power, but another thing to exercise it.
We should consider the way in which the Government behaved over another important aerospace company, Westland, in allowing that company's fate to be decided by people whose interests are, as yet, unknown even to the Government, never mind to the British public or the employees and management of the Westland company. In all probability a concert party took place on that occasion and was designed to manipulate the ownership of the company. Surely we can never contemplate Rolls-Royce being made the victim of such circumstances, or its future being decided by anonymous foreign owners.
Therefore, I ask the Secretary of State to give us categorical assurances about the maintenance of a predominantly British ownership in the company. We know that if the company were to stay in the public sector there would not be a problem about that. We know that it would remain British because we would continue to own it on behalf of the British people. The risk is created only by the privatisation exercise upon which the Government have embarked.
We know also that Rolls-Royce is a crucial national asset. The Financial Times recently observed:
"Virtually the whole of the RAF and important elements of the other two services, depend on the company."
Its importance in civil aerospace cannot be overestimated.
One of the difficulties faced by a high technology company such as Rolls-Royce is the enormous cost of modern development. The research and development contribution is necessarily high as the company operates on the frontiers of new technology. We are fortunate to have such an excellent company operating in that way.
However, Rolls-Royce is not a large competitor in a competitive game. The turnover of Rolls-Royce is £1·8 billion, whereas the turnover of General Electric Corporation is $30 billion and that of Pratt and Whitney is $16 billion. Both those companies form parts of large and diversified groups. Therefore, Rolls-Royce always has a difficult time competing against such formidable and well-financed competitors.
Mr. Phillip Oppenheim: I thank the right hon. and learned Gentleman for giving way. He is quoting slightly misleading figures when he states that the turnover of General Electric Corporation is $30 billion and that of Pratt and Whitney $16 billion. He must know that General Electric Corporation is a large and diversified engineering company and that its engine-making side is only a small part of that. Likewise, United Technology has a turnover of $16 billion, and not Pratt and Whitney.
Mr. Smith: It might help us all if the hon. Gentleman listened to what was said in the Chamber. Just before he got to his feet, I was making the point that General Electric is a large and diversified company. Of course that gives it added economic strength. It can cross-subsidise from one activity to another and can call upon the resources of the entire conglomerate.

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As we know, the United States Government make sure that such companies are supported through the Department of Defence. The notion that the United States Government do not involve themselves in subventions to industry is one of the great myths of our time. It is done in a different way. It is not done through a Department of Industry. It is wrapped up in the flag, put in defence appropriation and is then voted through. Throughout the entire aerospace industry, never mind the aero-engine industry, we know that that happens with large amounts of money. Other countries take care to secure the national interests that are represented by important companies in their economies.
That is why, over the years, Governments have assisted Rolls-Royce with important research and development. That is why we know, again from the prospectus, that the company intends to come hack to the Government for more money for research and development. The company will be right to do so.
However, where is such research and development in the private sector? What is the point of privatising a profitable asset if one must meet the bills that it cannot face on its own in the private sector? Why do we not use the profits that we would make from maintaining it in the public sector to finance its research in the future, instead of asking for further subventions from the taxpayer?
Mr. Ernie Ross: That is too simple.
Mr. Smith: As my hon. Friend has said, that proposition is probably too simple to be grasped by Conservative Members. If they showed just one glimmering of the sense of propriety that they exhibit in attending to their own personal financial affairs in respect of our public financial affairs, we should make much more progress in this country. [Interruption.] The hon. Member for South Ribble (Mr. Atkins) should not engage in naming those people who have acted improperly when it comes to the acquisition of shares in privatisation exercises. If he selects that as as weapon, he may find that it is a boomerang.
Mr. Robert Atkins rose—
Mr. Smith: I shall give way to the hon. Gentleman if he wishes, but I do not think that it will help.
If I can try to get the debate hack to the important issues that we were discussing, the truth is that the future of Rolls-Royce will be dependent upon the City of London. It is not as if we can look at the City of London with any confidence so far as the financing of high technology and long-term projects are concerned. We know that the City is in the grip of a woeful short-termism and that would be wholly inadequate for Rolls-Royce. Indeed, we have seen that British Aerospace has had to come to the Government to ask for launch aid for airbus. We were told that it would be marvellous when British Aerospace was privatised and that there would not be any interference by Ministers. However, we learned something different during the Westland affair, when there seemed to be some odd interference by Ministers. British Aerospace is knocking at the Government's door. However, I am sorry to say that so far it has not received any positive response for the funding of the airbus project. Those projects are so great and demanding in financial terms that they cannot be faced by private sector companies alone.
Why on earth do we want to privatise Rolls-Royce? Why do we put at risk the interests of the company's
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160,000 employees? About 160,000 people work in supply industries or for sub-contractors who work in association with Rolls-Royce. They are scattered all round the United Kingdom. There is hardly a part of Britain that will not be affected by the future of Rolls-Royce. From the north of Scotland right down to the south of England, there are factories that make an important contribution to Rolls-Royce efforts. The future of communities all over our country is tied to the future success of the company.
There is planning to be done by the company, but it could be done equally well within the public sector. During the past few years the company has shown that can be done. There is no reason to suppose that that success could not be maintained. Indeed, the notion that somehow there is chronic Government interference has been denied by chairman after chairman of the company. However, if the company stays in the public sector we know, purely and simply, that it will not risk another collapse such as happened in 1971. Many people still working in the company remember that dreadful day, when it looked not only as if their jobs would go but as if one of Britain's crucial industries would disappear. If that had been allowed to happen, what an episode of criminal neglect that would have been.
We know that the private sector was totally incapable of rescuing the company when it was in that position. The company needed public sector intervention. That public sector intervention probably went against the grain of the Conservative Government of the day but, to their credit, they knew that in the national interest they had to do that.
Mr. Dave Nellis: I was one of those who worked for the company—at least, I attended the Rolls-Royce technical college — on that day in February 1971 when it collapsed because of the overstretching of the financing of the RB211 project. Is it not a fact that, despite the complacency of Government spokesmen and Tory Back Benchers, the stretching on the Superfan of $3,000 million, the problems of the V2500 engine, the loss of the A340 airbus contract, together with Rolls-Royce in the private sector could mean the same thing happening again on the same scale as at the beginning of 1971, with 200,000 workers finding their jobs at risk?
Mr. Smith: I know that my hon. Friend, not only on the basis of his personal experience, but also because he represents many people who work in the company, is expressing a deeply held fear that is felt through many parts of the company. There is little else but apprehension about what lies ahead for the company because such people know that crucial research and development and capital investment is totally dependent on what one can only call the caprice of the City of London.
We also know that the management of the company will inevitably always have to look over its shoulder at the reactions and interests of the City of London.
Under public ownership, with the Government backing the company through to success, the management and workers can get on with the crucial job of ensuring that Rolls-Royce remains a world leader. Why must we add this complication, knowing the way in which the City behaves on these occasions?
For research and development, capital investment and for maintaining Rolls-Royce in its position of excellence in the world there is every reason to keep it in the public

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sector and none for privatisation. That is why we argue the importance of public sector participation and why after the general election we shall secure a strategic public stake in Rolls-Royce so that the public interest can be maintained. [Interruption.]
The reaction displayed by Conservative Members shows an overweening confidence on their part about a decision which the electorate has yet to make. The look on some of their faces will change when they see the results coming in. Indeed, I hope their look will change. This will be an important issue in the general election campaign and some of them will be called to account for the votes that they cast at the end of this debate.
This is nothing more or less than a scandalous exercise which betrays all the chronic weaknesses of the Government. First, it shows their desire to mix public obligation and private profit in ways which always favour private profit. Secondly, it shows a failure to appreciate the vital role of Government in high technology industries and a belief that responsibility for our industrial future, let alone our defence needs, can be shuffled off on to some shoulders other than those of the Government. Thirdly, it displays the narrow dogmatic prejudice that lies behind most of the privatisations, but which in this case can be uniquely demonstrated to rest on dogma alone.
That is why we shall vote with conviction for our motion tonight. If for one moment hon. Members in other parties were to allow a glimpse of the national interest to peek through their dogmatic prejudice, they should in all honesty join us in the Lobby tonight.
8.1 pm
The Secretary of State for Trade and Industry and President of the Board of Trade (Mr. Paul Channon): The Opposition's motion is wrong on virtually every count. I note that the motion which states that Rolls-Royce is being sold off at well below its proper value was tabled before the Opposition knew the price at which the shares were on offer. That is all too typical of the way in which the Opposition do not let facts get in the way of their prejudices and over the years we have learnt to accept it. The amendment in the name of the right hon. Member for Plymouth, Devonport (Dr. Owen) is not much better.
The House will be aware of the constraints under which I and other Ministers are placed during the run-up to privatisation. As owners of the shares to be sold, the Government may make no predictions or forecasts about the future of the company or the issue. Therefore, I intend to restrict my remarks purely to the facts.
Rolls-Royce has a special place in British industry. It is a symbol of excellence and, more than that, a symbol of British excellence. The name itself has a unique place in the British manufacturing tradition and it is recognised the world over. [Interruption.] Whatever the differences may be between the two sides of the House, it must at least be common ground that we wish the employees and all those who work in Rolls-Royce a successful and prosperous future.
Rolls-Royce is not only a company with a proud tradition, but one with a strong presence and a future full of opportunities. It competes extensively in world markets—270 of the world airlines use its engines, as do more than 110 of the world's defence forces. It employs 42,000 people throughout the world and helps secure the
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employment of many thousands more through its suppliers. Rolls-Royce is also a profitable company. In 1984, it made pre-tax profits of £26 million, in 1985 the figure was £81 million and in 1986 it made record profits of £120 million.
Since 1973, the company has operated on the basis of assurances that the Government would meet its debts in the extremely unlikely event of liquidation. As part of the arrangements for the sale, the company will receive an injection of new capital amounting to £283 million, a major proportion of which will be used to repay most of the company's borrowings. The prospectus notes that the board considers that, taking into account available facilities and the injection of new capital, the company will have sufficient working capital to meet present requirements. The Government assurances referred to will thus be withdrawn on completion of the offer for sale.
I cannot make any predictions tonight for the future. Investors must make up their own minds, based on the prospectus issued today, whether they wish to invest in the company; I am not allowed to, and must not, say anything which would suggest anything other than that investors read the prospectus carefully before making their decision. However, I can say that the Government are confident that there will be considerable interest in the shares, both from institutional investors and the general public.
Mr. Nellist: Parasites.
Mr. Channon: More than 500,000 members of the public—I do not imagine that all of them are parasites—have registered with the share information office and both the directors of the company and the Government—
Mr. Nellist: People who live off other people's work.
Mr. Channon: I am sorry that the hon. Gentleman keeps interrupting on this point. I am talking about 500,000 members of the general public who have registered their interest in the issue with the share information office. Both the directors of the company and the Government welcome its return to the private sector.
The right hon. and learned Member for Monklands, East (Mr. Smith) has already made several criticisms of the Government's privatisation programme, but he has not spoken of the advantages of privatisation and why we believe that to date the privatisation programme has been a great success.
When the Conservative Government first came to power in 1979, state-owned industries accounted for about one tenth of the United Kingdom's gross national product. they dominated the transport, energy, communications, steel and shipbuilding sectors of the economy. But the Government have now sold about one third of those businesses, including, with Rolls-Royce, 15 major companies. More than 600,000 jobs have been transferred to the private sector and following the sale of Rolls-Royce and later this year the BAA, the state-owned sector of industry will have been cut by about 40 per cent.
There are two main lessons from this programme of privatisation. First, privatisation has enabled large numbers of people who had never previously owned shares to hold shares in British industry and for a great number to hold shares in the company in which they work. Instead of public ownership, which in practice means ownership by a Minister and control by bureaucrats, we have ownership by many thousands of private investors.
Mr. Nellist: Parasites.
Mr. Channon: Moreover, despite the claims of Opposition Members about industrial democracy, which has too often meant democracy for a small number of trade unions, many thousands of people have experienced real industrial democracy through a direct stake in the company for which they work.
Secondly, the experience to date has been for privatisation to be of direct benefit to the companies concerned. There is no great secret about why that should be the case. For far too long, too many of our key companies have had their operating flexibility constrained by Government ownership. They have had to refer investment decisions to Government to justify their plans and proposals to Ministers and officials, and on occasion they have faced the conflict between commercial decisions and transient Government policies.
Mr. Ian Wrigglesworth. If the Government wish to encourage wider share ownership in this particular case, why has not greater incentive been given to smaller investors, as was done in other cases?
Mr. Channon: I shall deal with that in a moment. I note with astonishment that the alliance thinks that the company should not be privatised and that the Government should retain a 51 per cent. holding. We note that policy with considerable interest.
That does not mean that some companies have not been successful. Indeed, Rolls-Royce has been an extremely successful publicly owned company. But state control has undoubtedly been a real constraint on the company, which it can well do without. It is operating on an international scale and cannot easily fit its decision making into the necessary requirements of Government financial planning and funding. Of course, Rolls-Royce will continue to work extremely closely with Government, not least because of its position as a defence supplier, but also because of the Government's support through launch aid for certain of its civil aero engine projects. The relationship with Government will continue but the requirement to have commercial decision second-guessed by the Government will cease.
This morning the offer for sale of ordinary shares in Rolls-Royce was fully underwritten at a price of £1·70 a share. The shares have now been sub-underwritten at that price. This represents—
Mr. John Smith rose—
Mr. Channon: The right hon. and learned Gentleman will understand that I express no opinion on merits, apart from what is in the prospectus of this company.
Mr. Smith: Before the Secretary of State leaves the question of second-guessing commercial decisions, can he please tell us which commercial decision by Rolls-Royce since 1979 has been second-guessed by this Government?
Mr. Channon: I am not going to answer that ridiculous question. The House knows perfectly well that, with any company under Government control, there are controls and procedures which have to be gone through. The right hon. and learned Gentleman, who has served in government, knows that to be absolutely true, absolutely inevitable and absolutely a fact. It is very important to have commercial decisions taken by commercial people in the private sector.
Mr. Nellist rose—
Mr. Channon: I am not going to answer that ridiculous question. The House knows perfectly well that, with any company under Government control, there are controls and procedures which have to be gone through. The right hon. and learned Gentleman, who has served in government, knows that to be absolutely true, absolutely inevitable and absolutely a fact. It is very important to have commercial decisions taken by commercial people in the private sector.
Mr. Nellist rose—
Mr. Channon: No, I must get on. We have under an hour and three quarters and many hon. Members wish to speak.
Mr. Nellist rose—
Mr. Deputy Speaker (Mr. Ernest Armstrong): Order. The hon. Gentleman knows that, if the Member addressing the House does riot give way, he must not persist.
Mr. Channon: Approximately 320 million shares are initially being offered to the general public, including Rolls-Royce employees and pensioners. If the offer is at least twice subscribed, this number will be increased to 400 million shares, some 50 per cent. of the total. The remainder of the shares will be placed with financial institutions in the United Kingdom. There is no overseas offering.
A number of special offers have been made to employees and pensioners of the company. Employees with at least 12 months' full-time service will receive approximately £70-worth of free shares plus a further £2-worth of shares for every year that they have worked for the company. Such employees will also receive two free shares for every one which they buy, up to a limit of £150 for each employee. All eligible employees of the company will also receive a 10 per cent. discount on all shares bought, to a maximum of £2,000 per employee, and will be entitled to apply for a further £10,000-worth of shares on a priority basis. Pensioners of the company will also be able to apply for up to £10,000 worth of shares on a similar priority basis and at lower minimum application bands than members of the general public.
The prospectus will be published on Thursday 30 April. all who have registered with the Rolls-Royce share information office will be sent a prospectus, including a public application form. Application forms must he received by 10 am on Thursday 7 May. Copies of the prospectus have been placed in the Library of the House
It is not for me to make forecasts about Rolls-Royce's financial and commercial prospects. Hon. Members, together with prospective investors, must look at the prospectus and make their own judgments on the basis of the information it contains.
Mr. Nellist rose—
Mr. Channon: I am not going to give way. I want to get on and what I want to say must be said to the House. It is not my fault that the debate was fixed for today. The Opposition have a Supply day practically every week, and have not sought to choose this subject until today.
Mr. Doug Hoyle: On a point of order, Mr. Deputy Speaker. Is it not true that this debate would not he taking place at all but for the Opposition's making time for it?
Mr. Deputy Speaker: That is a matter for argument; it is not a matter for me. I must say to the House that a number of Members with very strong constituency interests are anxious to catch my eye and it is a very short debate. Interruptions of this kind only make it less possible for me to call those who want to be called.
Mr. Channon: I should like to refer to some of the key information in the prospectus and to what the board has to say about the company's prospects. I have already told the House the figure of profit before taxation of £120 million in 1986. The turnover of Rolls-Royce was then £1,800 million, of which £757 million was attributable to civil aero sales, £740 million to military aero sales and the balance to industrial and marine and other activities. It invested £132 million of its own funds in research and development. The total value of the company's order book at 20 March 1987 was £3.1 billion.
The prospectus says that the company has substantial order books for a number of its existing military aero engine products and good prospects for further sales. The company considers that its current Ministry of Defence and company-funded military development programmes give it a broad base of techology to explore new opportunities in the overseas military commercial market as they may arise.
There is no truth in the suggestion that Rolls-Royce is vulnerable to foreign control. Under the company's articles, no more than 15 per cent. of the company's shares can be foreign-held. This restriction applies to shares held by nominees on behalf of foreign interests. Anyone wishing to register a share must sign a declaration whether the share will be foreign-held. The provisions in the articles are similar to those that have operated successfully in the case of British Aerospace for no less than the last six years.
Nor is it possible for the articles to be changed in the future without the consent of the Government, who have a special share which enables them to prevent any change to the articles dealing with foreign ownership—a special share which continues indefinitely. There is no justification whatsoever for claims that these provisions will not be effective in ensuring domestic control of the company.
It is nonsense to state, as does the amendment tabled by the alliance, that this or any other privatisation is ideologically motivated and determined by the Government's excessive desire to reduce the public sector borrowing requirement. The Government are committed to privatisation because it works. The list of companies whose performance has been transformed once they have been liberated from state ownership grows ever longer. As far as the Opposition are concerned, it is very much a matter of sour grapes.
I would remind the House that, since being returned to the private sector, Amersham International has seen its profits double, British Aerospace's profits have tripled, Cable and Wireless has quadrupled its profits and the National Freight Consortium, 82·5 per cent. of which is owned by its employees, has increased its profits sevenfold. The Jaguar car company is now producing more cars than ever before and has created 2,000 new jobs since privatisation. Those are the facts, which the Opposition wilfully ignore.
All over the world, Governments are following the example that is being set in this country. In France, the Government have announced their intention to return 65 companies to the private sector. In Sweden, the state
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holding company has already sold 15 companies. Only the Opposition, blinkered by their ideological obsession with the past — clause 4 and all the rest of it — believe in public ownership and nationalisation. Even they, however, recognise the gulf between them and the British people, and we shall see who wins the argument at the end of the day. They dare not describe their policy by its proper name: "renationalisation" has become "social ownership". I do not believe that the British people will be so easily fooled.
Rolls-Royce will shortly become the 15th major business transferred to private sector ownership under this Government. The British Airports Authority will follow shortly. We intend to carry on with our programme of privatisation in this Parliament and in the next — [Interruption.]
Mr. Nellist rose—
Mr. Deputy Speaker: Order. It must be obvious to the hon. Member for Coventry, South-East (Mr. Nellist) that the Minister is not giving way.
Mr. Nellist: Why not?
Mr. Channon: As I have told the House, and the Opposition do not like it, we shall continue with our programme of privatisation in this Parliament and in the next because it has been clearly shown to succeed. That will be the message not just from the House tonight but from the electorate when the time comes.
Several Hon. Members rose—
Mr. Deputy Speaker: In view of the pressure of time, I appeal for extreme brevity by all those who now catch my eye.
8.20 pm
Mr. Bruce Milan: The speech of the Secretary of State in no way answered the case that was put by my right hon. and learned Friend the Member for Monklands, East (Mr. Smith). Indeed, many of the remarks of the Secretary of State had no relevance at all to Rolls-Royce. His speech will be of no comfort to my constituents who are employed by Rolls-Royce in Hillington and East Kilbride, or to Rolls-Royce employees in any part of the country, who are deeply worried about the threat of privatisation. This concern extends beyond the employees to the local authorities, as was demonstrated by the lobby in the House a few weeks ago from lord mayors, mayors, lord provosts and others. The right hon. Gentleman could not be more mistaken if he thinks that the concerns of employees will be bought off by the special employee share offers that he mentioned in his speech.
There is good reason for those concerns. In recent years Rolls-Royce has had a tough time and lost about 20,000 jobs. In my own factory at Hillington, the number of employees, 2,700 is less than half what it was three of four years ago. Many sacrifices have been made by Rolls-Royce employees to bring the company into its present profitable position. The reward from the Government is to create this new uncertainty of privatisation, with real fears in many parts of the country that units of Rolls-Royce will be closed down completely after privatisation.
The right hon. Gentleman gave no assurances about that and made it a virtue that he could not give promises for the future. The people working in Rolls-Royce are

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concerned about the future. They remember the history of the 1971 bankruptcy. It is an open secret that there have always been people within the management of Rolls-Royce who have considered that Rolls-Royce works on too many different sites all over the country.
A former chairman of Rolls-Royce told me that if those concerned were starting Rolls-Royce today they would not have their operations spread over 14 different locations in the United Kingdom. A number of these locations are very vulnerable to closure after privatisation. I can say with a good deal of authority, having been involved with the company for many years, that some of those sites would have been closed by now if Rolls-Royce had not been a publicly owned company.
Nothing that the right hon. Gentleman said will assuage the concerns of the employees, who have sacrificed jobs and have worked very hard to bring the company to its present position. The rewards are going, not to the employees, but to private shareholders. The share price was announced today. The initial reaction in the evening papers—The London Evening Standard and the London Daily News—was that when the shares eventually go on the market they will probably open at perhaps 20p premium on the first instalment of 85p of the price of 170p. On those expectations there will be a considerable killing. The rewards will go not to those who built up the company to what it is today, but to those who will invest in the company on the basis of the prospectus, and these will largely be financial institutions.
The Secretary of State confirmed that no less than 60 per cent. of the shares on offer have been placed with financial institutions. What have they to do with the past or future success of Rolls-Royce? The Secretary of State mentioned a profit of £120 million. If the extra £283 million that the Government are now putting in had been put in at the beginning of last year, the profit would have been £148 million. The taxpayer is not likely to get much from the future profitability of Rolls-Royce, because the prospectus says that £675 million-worth of unabsorbed tax losses are being carried forward, and no corporate tax will be paid for many years. The irony is that these tax losses have been allowed to accumulate only because the Government have been putting in money to cover the losses during earlier years when the company was recovering from its bankruptcy.
As my right hon. and learned Friend pointed out, there is no way in which the proceeds from the issue and sale of shares will in any compensate the taxpayer and the Government for the vast sums of money that have been put into Rolls-Royce since 1981. The gross proceeds that are allowed for in today's announcement are £1·36 billion. The net figure, deducting the £283 million that the Government put in, is just over £1 billion, which is roughly what the Government, on present-day prices, have already put into the company in share capital. Therefore, none of the launch-aid money—£400 million since 1971—the money that went into rescuing the RB211–22B, which brought down the company in 1971 and cost the Government £200 million, and the money that has gone into MOD contracts and into advanced engineering development, and so on, will be recovered from the sale of shares that has been announced today.
Over recent years this company has received £120 million net per year on average from the Government in launch-aid and in other ways, yet its directors have the impertinence to support privatisation, because they want
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the Government off their backs. Many other companies in the United Kingdom would be delighted to have the Government on their backs to the tune of £120 million a year. The same is true of British Aerospace. Sir Austin Pearce, in the recently published 1986 report, talks about the virtues of privatisation and not having to deal with the Government. British Aerospace has made an application to the Government for £750 million for development of the A330 and A340 Airbus. British Aerospace—and Rolls-Royce is exactly the same—will depend on Government money and cannot survive without it.
I am cynical about the attitude of the directors of Rolls-Royce when I read in the prospectus that they will all receive substantial increases in their salaries immediately after privatisation. I hope that it is some comfort to the employees of the company to know that the directors will do well out of privatisation.
Money has gone into this company. That is acceptable, because it is not just another private company, but a national asset. Rolls-Royce would not have been nationalised if it had not been a national asset. These so-called safeguards would not be needed, even under this privatisation, if the company was not considered, even by this Government, to be a national asset.
The safeguards apply only so long as the Government of the day want them to apply. We do not have the slightest confidence that the Government will continue to apply these safeguards by a restriction on foreign shareholding or in any other way. What will happen if the company gets into trouble again? I shall not talk down the company by mentioning the problems with the V2500 project, which only went ahead with Government launch aid, or the decision not to go ahead with V2500 Superfan, which could proceed only with launch aid. The Superfan project, if it proceeds, will go ahead—and I hope it will—only with launch aid. Some of these developments have not improved the prospects for Rolls-Royce in the years ahead.
What happens if at some time in the future—God forbid that it should happen, even under privatization— Rolls-Royce gets into difficulty once more? The decision of the Government of the day will be to save the company, as in 1971, or see it go into foreign hands. Pratt and Whitney, and General Electric, would be delighted to buy up Rolls-Royce, which is their only competitor in the world. There are only three major aero-engine companies in the world. Two are in America and the other one is here, in this country—Rolls-Royce. Perhaps at some time the Japanese would be delighted to get their hands on it, because they are involved in the V2500 joint project.
All these are real risks that are causing genuine concern to my constituents who are employed in Rolls-Royce. They see the action of the Government in putting this major company at risk again as completely irresponsible. It is now enjoying success after an extremely difficult period following bankruptcy. My constituents support overwhelmingly the view of the Labour party that this privatisation should not happen. A Labour Government will reverse it at the earliest opportunity.
8.30 pm
Mr. Phillip Oppenheim: The main consideration in the privatisation of Rolls-Royce should not be what is good for the Government or what is good for the trade unions, but what is best for the company and its work force. Privatised companies almost always do

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better than companies in the public sector. The reason for this unassailable fact is that companies in the private sector are largely unshackled from Government interference and meddling. One of the main reasons why Rolls-Royce has done well over the last few years — management will attest to this—is that the Government have had a rigorous hands-off attitude towards the running of the company.
Unfortunately, there is no guarantee that another Government which, heaven forbid, might be elected at some time, would pursue such an enlightened policy. We only have to go back to the 1970s to see the tremendous damage that Government intervention and meddling wrought on British industry. Managers in British Steel who suffered in the 1970s say that it was not the market place that decided what products and how many British Steel should produce, and that it was not management who decided on productivity and investment, but that it was the Government, the bureaucrats and politicians, who dictated what management should do. The damage that those policies caused to British Steel is still being felt today. Towards the end of their period of office, the Labour Government had to back-track rapidly on those policies. Almost brand new plants were mothballed or closed. That is the damage that Government interference and meddling can do to state-run industries.
I can understand the legitimate fears of people working for Rolls-Royce, who can remember well the traumas and problems when the company collapsed in 1971. I respect those fears, but the people should remember that Rolls-Royce is a very different company from what it was in 1971. It has a substantially better management. It has better manufacturing technology and more of it. It has a far bigger product spread, including co-operative deals with manufacturers all over the world. It is far less dependent on one leading technological product, which caused it so much trouble previously. Above all, it is a far more efficient company. In short, Rolls-Royce is better able to compete now than it was, admittedly under a bad management, in 1971.
Opposition Members show remarkably little faith in the management and work force of Rolls-Royce if they believe that it cannot survive and prosper in the private sector. The majority of the work force and management do not share the view of the Opposition; far from it. I do not want to imply disrespect towards the campaign against privatisation that has been waged by the trade unions, but the Strangers Gallery is hardly packed this evening. Only a few weeks ago there was an Adjournment debate about the proposed closure of a school in Derby; at 3 o'clock in the morning the Strangers Gallery was packed with 400 people.
Mr. Deputy Speaker: Order. The hon. Gentleman should not refer to places outside the Chamber.
Mr. Oppenheim: I fully accept your ruling, Mr. Deputy Speaker, and apologise.
When other high technology companies were privatised we heard exactly the same fears as are being expressed legitimately by the opponents of privatisation. The trade unions, some of the work force, and Opposition Members said, for example, that British Aerospace would not be able to compete in the private sector. They said that research and development would suffer, that the company
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would go down the tube, that product development and investment would suffer, and that the company would rapidly go bankrupt. In fact, in the private sector British Aerospace has a record order book; it is spending record amounts on R and D; its profits are at a record level and its turnover is booming.
Exactly the same has happened to British Telecom. I remember well sitting through more than 100 hours in Standing Committee dealing with the privatisation of British Telecom when we were told by Opposition Members that after privatisation country areas would be cut off, that people would be electrocuted by their telephone apparatus, and that the whole system would collapse. British Telecom still has problems and it is not as efficient as it should be but it provides a much better service at a lower cost in real terms than it did in the public sector, when just to order a piece of equipment was like trying to get an interview with the Pope.
Another scare propagated by Opposition Members and put about by the right hon. and learned Member for Monklands, East (Mr. Smith) when he visited Derby recently was that Rolls-Royce in the private sector would be prey to foreign takeover bids. Opposition Members know that that is total nonsense. They know that the Government have proposed a golden share which will give them a veto on a foreign takeover. They know that under the privatisation proposals foreign share ownership will be limited to 15 per cent. or less and that 75 per cent. of the board, including the chairman and the managing director, will by law have to be British citizens. I can understand ordinary people being worried about such things but Opposition Members should not stoop to running a scare campaign when they know that the Government have made ample provision to prevent foreign takeover. Opposition Members are preying unfairly on people's fears.
Far from the taxpayer doing badly out of privatisation of Rolls-Royce, he will do amazingly well. Opposition Members say that we should keep this asset but if we did, when would we get a return? When would the Opposition propose selling it — in one year, in two years? If the Opposition say that the Government should never sell shares in Rolls-Royce that would mean that the taxpayer would never get a return on his investment. By selling the shares now the Government will get a double return. First, there will be more than £1 billion from the proceeds of the share sale; secondly, we will eventually get a substantial tax take on the profits of Rolls-Royce.
The profits of privatised industries have almost always been much larger than the profits when the companies were in the public sector. The profits of British Telecom and British Aerospace are more than twice what they were when in the public sector. The Government tax take is substantially larger. Surely it must he better for these large sums of money to be deployed where they are needed in health and education, rather than being locked up in a spurious, out-dated 1930s concept of public ownership.
Opposition Members have also claimed that the Government will not back Rolls-Royce in large strategic research and development projects, but the Government backed British Aerospace on the A320 and they have backed other companies on technological projects. The Government have backed projects which may not be commercially viable but which none the less are in the national interest. The Oppostion mentioned that the Government have been reluctant to put the full amount

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into the A330 and the A340 which British Aerospace wanted. The reason is that the Government and many experts have a strong feeling that the A330 and the A340 projects may not be viable. Whereas the A320 had no real rivals when it was conceived, unfortunately the A330 and the A340 have pitched against them the Boeing 757, which uses Rolls-Royce engines, the Boeing 767, which also uses Rolls-Royce engines, proposed smaller versions of the long-serving Boeing 747 and the MD11 of McDonnell Douglas, which is selling extremely well.
Perhaps Opposition Members feel that they know better than the experts whether the A330 or the A340 are viable. If Opposition Members think that they know better they should ensure that these projects are viable before proposing that hundreds of millions of pounds are taken in tax from successful industries to put into those dubious projects. If they take that money away from our successful areas of manufacturing they will leave those successful industries with less money to invest in producing their products and jobs.
I am astonished that Opposition Members have not realised that privatisation is a positive policy. It works and it is good for companies and their work forces. Opposition Members are out on a limb on this matter. Socialist Government all over the world are busy privatizing almost anything that moves. Recently in Spain, a strongly Socialist Government privatised its car industry. They are even proposing to privatise the motorways in Spain. Recently a Socialist-led coalition in Italy privatised Alfa Romeo, its state-owned car company. Recently in Australia, the Socialist Prime Minister proposed the privatisation of its state-owned internal airline, Australian Airlines.
Opposition Members are no strangers to privatisation. Was it not the Labour Government in 1977 who sold off huge chunks of the Government's holding in British Petroleum to get out of the financial mess that they had dug themselves into as a result of their irresponsible promises in 1974? I do not remember many Labour Members of Parliament objecting to that privatisation. Perhaps we shall hear something about that from Opposition Members later on.
If Rolls-Royce remains a well-managed company with a good work force it will succeed. Without a good management and strong work force, first-class products and without marketing those products positively and successfully, Rolls-Royce will not survive in the private or public sector. It is as simple as that. It has a better chance of surviving, prospering and contributing to the economy in the private sector.
8.41 pm
Mr. Ian Wrigglesworth: The hon. Member for Amber Valley (Mr. Oppenheim) began with one of the most self-contradictory arguments that I have heard in favour of the Government's policy. First, he argued that the interference of Government inevitably led to the downfall of companies, and that that did not happen if the Government did not interfere. Yet we are debating a company that got into severe difficulties, not as a result of Government interference but while it was in the private sector, and like many companies in the private sector it came to grief because of bad management. That had nothing to do with Government interference. The hon. Gentleman said that in all the time that Rolls-Royce has been in the public sector the Government have not
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interfered in its activities and that it has been an enormous success, so now it can go to the market. If it has been an enormous success—undoubtedly it has and we should pay tribute to the management and staff for the success that they have achieved in recent years—that seems to prove that companies in the public sector can also succeed without Government interference. The hon. Gentleman cannot have it both ways.
The future of Rolls-Royce must be secured, in the interests of the country. I am sorry that the Secretary of State did not respond to the compelling arguments for securing the future of Rolls-Royce. We believe that the only way in which that security can be given to the company—I shall come to the reasons why it is necessary—is by retaining a majority shareholding in the company.
Why is it necessary to secure the interests and future of Rolls-Royce? It has a strategic role in the defence and industrial life of this country. A substantial public investment has been made in the company and there is a strong argument for ensuring a continuing return to the public from the profitable activities of the company now that it has been given support from the public purse. Any profitable company is giving tax returns in corporation tax to the country and the Exchequer.
The substantial Government stake in British Petroleum, to which the hon. Member for Amber Valley referred, did not inhibit its success. Indeed, it helped to sustain that company and make it the successful British multinational that it now is.
We believe that there is an overwhelming reason for giving the employees an opportunity to participate in the ownership of shares in Rolls-Royce, and I welcome the incentives that have been given to employees to participate in that. I am sure that that is a development which will be widely welcomed in the company.
I am sorry that the Secretary of State did not respond to my intervention and tell us why the Government are not ensuring the wider share ownership of smaller shareholders. Perhaps the Minister for Information Technology will tell us why that is the case when he responds to the debate.
The alliance strongly believes in wider share ownership and we are sorry that the inducements that have been given to small shareholders on previous occasions have not been given this time.
Why must the position of Rolls-Royce be protected? Defence orders amount to £1·46 billion of Rolls-Royce's total order book of £3·1 billion. A substantial amount of its output is going straight into the armed services. As has been pointed in the debate, it is unlikely that the Air Force and many other parts of the armed services could operate without Rolls-Royce products. That does not merely relate to the provision of initial products. It also relates—as I was able to see with my own eyes in the Royal Navy spare parts depot in my constituency—to the spares which are necessary, particularly during times of crisis such as the Falklands. to ensure that there is continuity of supply and that that supply is sustained to defend the country.
That is why there is a major strategic defence interest for sustaining Rolls-Royce. It plays a vital role in industrial activities of Britain. It is one of the major contributors to United Kingdom research and development, and on average it has contributed £220 million a year over the past five years. As a percentage of turnover,

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gross research and development expenditure was £255 million in 1986, or 14 per cent. That substantial research and development activity is a key part of the country's research and development work. It applies to materials and high technologies and involves highly skilled, highly educated and experienced people who are a prime asset not only to Rolls-Royce but to other companies and the country. It is vital that our presence in the technological sector in which Rolls-Royce operates is maintained.
The total launch aid that the Government have provided since 1982 for research and development, tooling and learner costs is £199 million. The Government have made an enormous contribution to that research and development work. The Government have made a contribution of £162 million to advanced engineering programmes and since 1982 Rolls-Royce has received £287 million in development contracts from the Ministry of Defence.
The role that the company plays in engineering and high technology is substantially funded by the Government and is of strategic importance in the industrial sector. The figures have already been given for the substantial investments in the company since 1971. It is right and proper that the taxpayer should expect a continued return on that investment.
Inevitably, after the events that led to Rolls-Royce coming into the private sector, doubts must be raised about whether the same problems could arise again in the future. The cost of developing aero engines is quite enormous. New engines such as the prop fan cost at least £500 million, and bigger ones cost more, up to £1 billion in development. I was interested to read in The Economist two weeks ago its estimate that on today's costs, developing a novel engine design such as the prop fan may be as difficult and as expensive as it was for Rolls-Royce to give birth to the RB211. The danger is that another development could have the same debilitating effect on the company's fortunes.
I do not believe that anybody in the House or in the country wants to see Rolls-Royce in that predicament again. We believe that the way in which that can be safeguarded against, and in which Rolls-Royce's position in the defence and industrial spheres can be secured for the future, is by the Government retaining a majority stake while having the benefit of private funds to buy some of the shares, and above all by allowing employees to have a stake in their own enterprise. That would ensure that the company could succeed, have a secure future and continue to play the role that is so important in this nation's life. We very much regret that the Government have not gone down that path.
To sustain the argument for total state ownership, the Labour Opposition have had to exclude any possibility of the employees having any stake in their own enterprise. We do not believe that that is necessary. The future of the company can be secured without total state ownership and we very much regret that the Labour party, despite its new ideas about social ownership, has not been prepared to go down the road of seeing the importance of giving employees a share in the company, even if it does not want to give the public a share.
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We believe that the future of the company can be secured by the Government having a majority stake, and we regret that neither the Conservative nor the Labour party is prepared to accept that alternative.
8.52 pm
Mr. Stephen Dorrell: The hon. Member for Stockton, South (Mr. Wrigglesworth) made an interesting speech because, not for the first time, the alliance spokesman chose his path by referring to the two major parties in British politics and simply splitting the difference. It was also interesting that he devoted most of his speech to arguing that there is an important national interest in having Rolls-Royce in British hands. That is not controversial. My right hon. Friend the Secretary of State has put forward a procedure that will ensure precisely that. All my hon. Friends agree with the hon. Member for Stockton, South on that point.
What the hon. Member did not do is explain either why my right hon. Friend's scheme is inadequate or how, in detail, his preferred alternative would work. If one is to adopt the alternative of a 51 per cent. shareholding in the company, it is incumbent on one to explain whether one proposes to use those shares to get involved in the company, in which case there will be some difficulty in persuading others to buy the other 49 per cent.; or whether one would stand apart from the company and not use the right that a 51 per cent. holding gives, in which case the obvious question is, "What is the point of the alliance policy?"
Like, I believe, the large majority of my constituents who work at the Rolls-Royce plant at Mountsorrel in my constituency, I support the privatisation that my right hon. Friend has introduced. I hasten on to say that I would also, if I had been a Member of the House then, have supported the nationalisation of Rolls-Royce in 1971. I see nothing inconsistent in my position. Quite the contrary — I think the fact that some Labour Members have sought to suggest that there is some inconsistency there reflects the extent to which the Labour party is still a prisoner of the political philosophy written by an obscure German philosopher in the middle of the last century. The history of the state's involvement in Rolls-Royce is an important example of how the Government and industry, working together, can produce benefits to society as a whole which neither on their own would have been capable of producing.
In 1971, Rolls-Royce went bust, as my hon. Friend the Member for Amber Valley (Mr. Oppenheim) rightly said, purely because it was badly run, and the top management and investors paid the price of failure. The investors lost their investment and the top management lost their jobs, and rightly so. We do not need to waste much sympathy on them. If Rolls-Royce had been a minor engineering company, that would have been the end of the story, but it is not a minor engineering company. It is, as the hon. Member for Stockton, South, said, a vital strategic company and the Government led by my right hon. Friend the Member for Old Bexley and Sidcup (Mr. Heath) quite rightly stepped in, recognising the vital national interest that existed then and still exists, and ensured that both the industrial peace and the defence interest represented by Rolls-Royce were safeguarded.
It is also worth mentioning that the thought would probably have occurred to my right hon. Friend that Rolls-Royce represented a vital industrial and defence

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interest not only for this country but for the continent of Europe as a whole. It is the only significant European aero engine producer. Therefore, the Government of the day were right to take the view, both as a British Parliament and as Europeans, that they could not allow Rolls-Royce to disappear.
That position is now totally transformed. The bulk of the progress since 1971 has happened since 1979. The improved performance of the company occurred between 1979 and 1987 and not between 1971 and 1979. We now have a company with a product range that can stand alongside that of Pratt and Whitney and General Electric and can offer a product across the whole range of aero engines, and, even more importantly, a product range the production of which is supported by competitive manufacturing costs.
Mountsorrel plant is one among many in Rolls-Royce that have lost jobs as a result of the slimming-down process, but the chairman of Rolls-Royce, contrary to the scare tactics adopted by the Opposition suggesting that the future of the plants is insecure, wrote to my hon. Friend the Member for Rutland and Melton (Mr. Latham) making this clear. He said:
"I do not think your constituents need to worry about the vulnerability of Mountsorrel. Its productivity is much improved, and we arc currently working on plans for future investment."
The company has pursued a strategy of making production costs competitive and then investing in success. That is the record of success of Rolls-Royce over the past few years.
Why should we change the position that has endured since 1971? I make no apology for my belief that it should be the norm in a mixed economy for successful firms to be in the private sector. I believe that private sector management is right in theory as it devolves decision making through society and works in practice, as it produces faster growth, better job prospects and higher living standards for those operating under that system. Therefore, I believe that my right hon. Friend is right to introduce a change to Rolls-Royce.
The effect of that change is to maximise the responsibility and involvement of those in the company, whether they are managers, shop-floor workers or investors. All those people should have a stake in the consequences of decisions taken. If the company is successful, those people should participate in that success. When they make decisions they should recognise that, if those decisions are wrong, they are expected to accept responsibility. They cannot expect to shuffle responsibility on to some obscure Whitehall committee. Because of that commitment to a sharpened sense of responsibility, I particularly welcome the employee share ownership incentives that my right hon. Friend discussed today.
Those provisions may lie behind the fact that, although the shop stewards committee of the Confederation of Shipbuilding and Engineering Unions put out propaganda opposing the Rolls-Royce privatisation, all the evidence suggests that a large number—
Mr. Nellist: What evidence?
Mr. Dorrell: The evidence I have obtained from people who have visited my surgery. The evidence I have received from people I have stopped in the street and the people who talked to me when I went round the Rolls-Royce
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plant a week ago. That evidence suggests that many Rolls-Royce employees want to buy shares in the company and want to participate in an important and successful company.
I believe that the privatisation route is exactly right for Rolls-Royce. It is also important that we do not overstate the extent to which privatisation cuts the umbilical cord between the Government and Rolls-Royce. We are all aware that, in the market place in which Rolls-Royce operates — as the right hon and learned Member for Monklands, East (Mr. Smith) rightly said — it will be competing against Pratt and Whitney and General Electric. Those companies are involved in a sophisticated support operation with the American Government. The American Government give considerable support to the companies that compete against Rolls-Royce.
My right hon. Friend has made it abundantly clear that Rolls-Royce will receive the same level of support as its competitors within the market. Although the Government are privatising Rolls-Royce, they are far from neutral about whether Rolls-Royce succeeds. The Government, like any patriotic British person, want Rolls-Royce to succeed.
In the months ahead, I hope that my right hon. Friend will follow up the commitments that he has given to ensure that public purchasing in Britain is clearly attuned to the needs of Rolls-Royce. We should copy the public purchasing practice of the United States. I hope that my right hon. Friend will ensure that launch aid will be available so that Rolls-Royce can compete with American competitors. Moreover, in the European Council of Ministers, I hope that my right hon. Friend will take steps to encourage the European dimension of the Rolls-Royce market. It will be easier for my right hon. Friend to do that when Rolls-Royce is a privatised company rather than part of the United Kingdom's public sector. Rolls-Royce is part of the European fight back in the aerospace industry. In recent years that industry has been dominated by American competitors.
I support privatisation because I believe it gives greater incentives and responsibility to the people in the company. I believe that it paves the way to a more mature relationship between Rolls-Royce and the Government.
9.2 pm
Mr. George Park: The hon. Member for Loughborough (Mr. Dorrell) confirmed what my right hon. and learned Friend the Member for Monklands, East (Mr. Smith) said—private enterprise is happy to take the profits when they are going, but reserves the right, when the going gets rough, to go back to the taxpayer to bail it out. Apparently, the hon. Member for Loughborough wants it both ways.
We are all aware that the Government do not like public enterprises — the Secretary of State underlined that in his speech. This dislike seems to increase in proportion to the success of the enterprise. If ever there was a case of dogma defying logic it is the privatisation of Rolls-Royce. Everything that a newly privatised Rolls-Royce might wish to do can be done now by the publicly owned enterprise. The Government are not allowing the facts to get in the way of their prejudice.
In 1976 the then chairman of Rolls-Royce, Sir Kenneth Keith, a self-confessed private enterprise man through and through, said that he had a high degree of autonomy in the company and that the Government did not interfere with

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the running of the business. Three years later a Conservative Government were elected who never had an industrial strategy. They failed to acknowledge that national interests required Rolls-Royce to stay in the forefront of world technology. Even more significantly, the Government started to interfere because of their political beliefs. I think that that sparked off the comment today by the current chairman, who says that Governments do not know how to run businesses. That is true in the case of this Government.
Since 1971, when private ownership failed and the company had to be brought into the public sector by the Government of the right hon. Member for Old Bexley and Sidcup (Mr. Heath), there has been an unremitting struggle by the work force and the management to bring the company to its present successful position. Large-scale redundancies took place in 1971, both in the company and in its outside suppliers. Redundancies have continued at intervals up to the present time and in the last few weeks there have been several hundred redundancies at the Ansty plant near Coventry. Let me remind the House that those redundancies were on top of 1,000 redundancies in Massey-Ferguson. At a time when the work force, as a result of its efforts, is entitled to look forward to more secure and better-paid jobs, the whole enterprise is to be thrown back into the melting pot.
The effects of the privatisation proposals are already being felt. The collaborative venture on Superfan has been abandoned and the Government are again dragging their feet on repayable support for the airbus 330 and 340. More orders for Rolls-Royce worth £1·2 billion would have been secured if Superfan had been available. The collaboration with General Electric has collapsed, leaving Rolls-Royce with a bill of about £100 million for tooling.
This situation highlights one of the principal concerns about the privatisation proposals—the continuing need for high levels of research and development. It is a dilemma that faces all the principal engine makers — General Electric and Pratt and Whitney as well as Rolls-Royce. The first one that eases off on research and development faces the prospect of losing its position on radical technology and consequent sales.
Prospective investors will not have forgotten that it was the pursuit of high technology on the RB211 that contributed to the Rolls-Royce bankruptcy in 1971, when the company was recovered only by Government intervention. It could happen again and employees and communities around the plants could once more face the traumas of the early 1970s. At the same time there would be the further erosion of the technological base of British industry. There is some faint recognition of this possibility in the privatisation proposals, with the emphasis on institutional investors rather than small shareholders, despite the claims of the Government to be creating a nation of shareholders.
The limitations on no more than 15 per cent. for a single shareholder and no overseas offers are only delays to take the issue safely beyond the date of the next election and to allay fears that Rolls-Royce could find itself in the same position as Jaguar, with over half its shares in American hands. The vital difference between the two companies is the implications for Britain's national security, yet the Government know that they have no control once shares are freely traded.
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Financial pundits are forecasting that profits will soar after privatisation. However, it was only in 1984 that, for the first time in years, Rolls-Royce made a small profit of £20 million, rising to £120 million in 1986 on a turnover of £1,802 million. Creditable though these efforts are, they are hardly likely to be the sort of returns looked for by the City and must put at risk the levels of expenditure on research and development running at the rate of £255 million in 1986. That has the consequences that I outlined earlier, given the track record of most of British industry on investment in research and development.
According to the 1986 annual report of Rolls-Royce, military sales remained static. Industrial and marine sales rose by 7 per cent. due to the depressed state of the power generation and oil and gas markets. It was really the increase of 31 per cent. in the civil sector which led to the present healthy order books. But the airlines are in some difficulty, as the 140 airline members of the International Air Transport Association made a total profit of only $100 million in 1985. If Rolls-Royce is to maintain its share of that market, it must also retain its lead in technology through R and D. Private enterprise has shown once before that it cannot take the strain. Why should it be any different second time round? What sort of interest and commitment would be shown in longer-term projects such as HOTOL?
Experience shows that what is more likely is a maximising of profits irrespective of the consequences, since short-term returns are the be-all and end-all. Complaints are being heard today that the share issue price will not yield a big enough killing. Private investors would not be prepared to wait 15 to 20 years for a good-selling engine to progress from development to break-even cost.
To make the forecasts of soaring profits come true more quickly after privatisation, there is the likelihood of moves to hive off the repair and overhaul activities at East Kilbride, the industrial and marine division at Ansty, plus the sale of Leavesden to property developers. At present, when Rolls-Royce collaborates with other partners on a project, its expertise is safeguarded by strict rules about technology transfer. But in the future the company's rivals may own part of it. Here the brokers of Hoare Govett disagree with the Secretary of State because they are quoted as having said that they look forward to American and Japanese investors piling in, to use their words. It will be entirely different from what we have seen in other privatisations such as Coventry Climax referred to by my hon. Friend for Coventry, South-East (Mr. Nellist).
The proposals before us this evening will plunge Rolls-Royce back into doubt and uncertainty. What profits there are will not go to the taxpayer or the work force whose money and whose dedication brought it to its present position. Why should this highly skilled work force be asked to re-enact the struggles of the 1970s? Why should the nation's security be put in jeopardy? Why should we agree to further erosion of the technological base of British industry? Why should we put Rolls-Royce at risk to satisfy dogma and greed?
9.13 pm
Mr. Lewis Stevens: The attitude of Opposition Members is always one of trying to ensure that as much fear and distrust is generated on almost anything that takes place. That is again happening with Rolls-Royce. There is uncertainty in the minds of many

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employees. Any major change brings about uncertainty. As the hon. Member for Coventry, North-East (Mr. Park) said, the Ansty factory in my constituency has lost jobs again recently. That also breeds an uncertainty, but that uncertainty within Rolls-Royce has been going on for many years.
Rolls-Royce is a profitable business now, and it should be a profitable business in the future. From that base, one of the things that privatisation is likely to do is to develop the company in a way that is likely to remove the uncertainty. People will be able to see with confidence what the future holds. Whatever may be said, it is hard to believe that Governments who try to control or interfere with any company that is nationalised do not have a major effect on how that company develops.
One of the compensations for the people in Rolls-Royce is that as it moves forward it will need to diversify considerably. No company is static. The Opposition seem to suggest that it is static industry that develops only one technology. They seem to be suggesting that we just took over in 1971 and that it has carried on in the old way, but with support from the Government. The position is entirely different from that. Since 1971 there has been the construction of a company that is distinctly more efficient. It is no longer reliant on such a small base for its production, profit and success. Its technological developments and international collaboration are bringing about a progressive view of the industry that was not there in the past.
I pay tribute to the management and workers of Rolls-Royce for what they have had to suffer. What they saw in 1971 must be at the back of minds. However, the way to give confidence in the future is not to suggest that the company may or may not be subsidised to some extent, but to look forward with vision, believing that the diversification and flexibility that private enterprise can bring will serve the company better than the dependence that it has had in the past. That does not mean that research and development, defence contracts and other interests in development and technology will not receive help or encouragement from the Government in different ways. Of course they will. The important thing is that there will be flexibility, which will give confidence.
The pay back to the Government and the taxpayer is the possibility of increased profits from a company that is free to go forward. It will possibly generate more profit than could ever have been expected if it had remained in Government control.
It has been said that the Government cannot run industry. The hon. Member for Coventry, North-East said that this Government cannot run industry. I would suggest that no Government can. It is wrong to rely on the Civil Service or the House for the successful running of a major technological industry. We can help, as we helped Rolls-Royce from its delicate and harmed state of 1971. That company has now been rebuilt so that it is strong enough to go where it properly belongs—in the private sector, where it can hold its own against global competition. More and more the competition has not been European or British, it has become global, and Rolls-Royce is beginning to live with that successfully.
That situation will be developed in the private sector, with a proper return to the investor and the work force, because the work force will own part of the company. I am sure that many of them will take up the shares that are being offered to them. That is the success of a company
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developing; a company with the interests of the work force and the country at heart. Rolls-Royce should have a much better time in the future than it has had in the past 16 years.
9.18 pm
Mr. Bob Clay: I wish to make a few brief remarks about my concern and the concern of the work force at the Rolls-Royce plant in Sunderland. I have heard some remarkable things about the success of private enterprise, and I want to put the debate in a Sunderland context.
Private enterprise led to more than just the collapse of Rolls-Royce in 1971. Around the same period, we remember in Sunderland the Court Line disaster. Had the shipbuilding part of that company not been nationalised by my hon. Friend the Member for Chesterfield (Mr. Benn), the few remaining shipyards in Sunderland would no longer be there. That is a tale of the failure of private enterprise. There are other examples of that failure. Plessey, a multinational private company, pulled out of Sunderland. Joplings Forge, which is privately owned, recently pulled out of Sunderland. Some smaller parts of British Shipbuilders have already privatised, such as Sunderland Forge. What happened to that company is a scandal. The conduct of its owner, Mr. Brian Masterson, ought to merit a full debate in the House. There is a sorry story of private enterprise and privatisation under the Government.
We know that Rolls-Royce in Sunderland is highly successful, but it is one of the few employers left in Sunderland; one of the few that is expanding and which still has training and apprenticeships. The fear is that it is a peripheral plant. When the Secretary of State opened this debate he dismissed the notion of the Government, as; he put it, second-guessing and interfering. That shows the deep division of philosophy between him and Labour Members.
The one assurance that we in Sunderland want is that Rolls-Royce will come tinder public ownership, so that in times of competition and intense and ruthless multinational market forces, if there were an attempt to rationalise the plant, close it down, move it elsewhere, contract the work out, diversify or whatever, there would be the possibility of state intervention to prevent that happening. State control is one of the reasons why we still have some small shipbuilding and coal mining in Sunderland, pathetic as it is and much as it has declined, whereas private industry has failed on almost every front.
In a constituency which has the 12th highest unemployment in the country—two thirds of our school leavers are unemployed and long-term unemployment is getting worse—one of the few signs of hope and the only connection we have left with high technology engineering is Rolls-Royce. The danger is that under private ownership, because of market forces or rationalisation, the plant may close. Apart from the strong objection on principle, I know from my experience that the Rolls-Royce work force in Sunderland—whatever Tory Members have said about workers in other parts of the country—are overwhelmingly opposed to privatisation.
With all the talk about the success of private enterprise and the assurances I have been given by Rolls-Royce management, recent events have put a question mark over it all. For instance, a multinational company ruthlessly decided to close the Caterpillar plant at Uddingston—a

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profitable plant which had a full order book. No one could stop that plant closing, just as there is no assurance that Rolls-Royce in Sunderland, which is successful, profitable and expanding, will survive outside public ownership.
I would like the Minister to state in his reply not only that the plant will remain open and continue to expand, but that the East Kilbride and other plants will do so as well. Unless the Minister can speak confidently in that respect, our fears will remain. He cannot speak confidently, because this Government are washing their hands of any responsibility for people in the work force in a town of high unemployment such as Sunderland.
9.23 pm
Mr. Gerald Howarth: I rise to speak because of the comments of the hon. Member for Sunderland, North (Mr. Clay). Everything that is negative and gloomy has been brought out. We are debating tonight one of the greatest success stories of British manufacturing industry, because Rolls-Royce epitomises all that is excellent. It stands for craftsmanship and reliability throughout the world. It has emerged from that 1971 disaster, which has been referred to many times, to become a world-beating company at the forefront of high technology, exporting no less than 28 per cent. of its output to the competitive market in North America. It has set a first-class example to the rest of British industry on how best to co-operate, not only with our friends in Europe but with our partners in North America and Japan.
It is a great tribute that we have seen today, on impact day, the launch of this magnificent company on the runway to a highly successful privatisation.
I understand the concern of the Rolls-Royce employees. I have met representatives of the unions and discussed those concerns with them. But they should take heart from the success of the privatisation policy in many other spheres. It has been an overwhelming success and has returned industries into the hands of genuine public ownership; into the hands of the people and out of the day-to-day control of politicians. I am convinced that the people of Britain would feel that our country was safer were such a strategic industry to be in the hands of shareholders rather than in the hands of a Government in which the hon. Member for Coventry, South-East (Mr. Nellist) and some of his wilder friends had some control. Britain now has 8·5 million shareholders. That is genuine public ownership, and evidence of the enormous popularity of the policy.
It is offensive to suggest that somehow a privatised Rolls-Royce will not be able to look after Britain's defence needs. That is a disgraceful statement to make. I know that the unions feel strongly about it, but I urge them to hold back on that one, because it does not help their case. The Rolls-Royce success has been built in the private sector. It is worth reminding the House that it was due to the judgment of Rolls-Royce that R. J. Mitchell and others produced the Spitfire, initially as a private venture operation, which saved Britain from defeat. It was despite the misjudgments of pre-war politicians that the second world war was not the disastrous defeat for Britain which it might have been.
That is a salutary point for some of those who argue that Rolls-Royce should remain a nationalised industry in
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order to provide for the defence needs of the nation. That never was the case until 1971. Indeed, our defence needs have, for the major part of the century, and at our most critical hour, been provided by the private sector.
I pay tribute to the management and work force of Rolly-Royce who have brought about this magnificent transformation and enabled the company to return to its rightful place in the private sector. I do not represent Rolls-Royce workers, but I am proud to have visited several of its factories in Britain and to have seen the excellent work that has been done and the new technology that has been put in. That is a great tribute to British manufacturing industry.
The tribute that I can pay to the management and work force of Rolls-Royce is best summed up in the splendid stained glass window which is to be seen at Derby which is a tribute to the Battle of Britain pilots. An inscription at the bottom says
"Dedicated to the pilots of the Battle of Britain who turned the work of our hands into the salvation of our country."
In the work that they have done at Rolls-Royce in peacetime they have turned the work of their hands into the economic salvation of our country, and I warmly commend privatisation.
9.28 pm
Mrs. Margaret Beckett: I have listened with fascination to the debate, and I particularly note the observation just made by the hon. Member for Cannock and Burntwood (Mr. Howarth) about the stained glass window in Rolls-Royce in Derby, which, like all the rest of the Derby Rolls-Royce plant, is in my constituency, where many thousands of my constituents work.
I do not know how many constituents the hon. Members for Amber Valley (Mr. Oppenheim) or for Loughborough (Mr. Dorrell) have heard from who have spoken in favour of the privatisation of Rolls-Royce, but I wish that they had attended the open-air meeting at which I spoke which was attended by thousands of the Derby work force—it did not quite pour with rain but it looked very much as though it was about to — who came to protest at the way in which the Government are putting their jobs at risk.
As has often been mentioned during the debate, Rolls-Royce is a wonderful company. Rolls-Royce is a world-beating company. Conservative Members cannot stand the fact that that world-beating company became a world-beating company again in the public sector. That is why they are insisting on putting the jobs of our constituents at risk. The fact of the matter is that Rolls-Royce failed in private hands. It has been restored to prosperity in public hands.
I object strongly to the impertinence of those favouring privatisation who suggest that those hon. Members and their constituents who oppose privatisation lack faith in Rolls-Royce. Of course they have faith in the company. They have faith in the company and the sales force. They have faith in Rolls-Royce to make good, particularly if it operates and competes fairly with other companies in the world. However, they have no faith in the Government and their friends in the City. They are convinced that the City, which would have let Rolls-Royce go under and which was quite prepared to let Ferranti go under — another company operating in a high-tech area where there is a long lead time for a return on capital and where large sums are needed for research and development—

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and particularly after the Government's encouragement of shareholding as easy and a certain get-rich-quick operation, will not support and sustain Rolls-Royce in the way that is needed, and so provide the only way to secure jobs for our constituents.
Our constituents have no faith in the Government's golden share mechanism. No one knows who was behind the Westland operation, as my right hon. and learned Friend the Member for Monklands, East (Mr. Smith) mentioned earlier. What faith can we possibly have in the Government's assurances that they will know who is behind the shareholdings in Rolls-Royce? Our constituents have no faith in the Government to protect them with regard to shareholding and share ownership. They have no faith in the Government's willingness to put money into Rolls-Royce as the Government are now being asked to do for British Aerospace to continue to support the projects that are so desperately needed.
Many of my constituents fear that Rolls-Royce is coming full circle and that the Government are experimenting with Rolls-Royce because of their hatred of success in the public sector. Unfortunately they are justified in fearing that their jobs are being put at risk by the Government's dogma. I trust that when they go to the polls, they will remember that in considering the jobs of Conservative Members.
9.31 pm
Mr. Peter Pike: In the few minutes that are available to me, I want to make a few references to the Rolls-Royce plant at Barnoldswick in the constituency of Pendle. A number of workers in that factory come from my constituency and several factories in Burnley are dependent on the success, viability and future of Rolls-Royce. Lucas Aerospace and BEP are two of the larger companies involved, but a number of other industries in Pendle, Burnley and north-east Lancashire as a whole are vitally dependent upon the success of Rolls-Royce. Bearing in mind what happened in February 1971, there is a great fear among the employees in Rolls-Royce and employees in the other industries involved in north-east Lancashire and in the community at large.
One worry of the people in north-east Lancashire and a worry especially felt in Barnoldswick can be summed up in the words of the Minister for Information Technology, who visited Barnoldswick last year. He referred to the factory at Barnoldswick as being "a bit off the beaten track". Many people in north-east Lancashire believe that, because they are not on the main railway network or linked to the main motorway network, they are a "bit off the beaten track". Therefore, we are afraid that, if there are to be any cuts or factory closures, they may well unfortunately take place in north-east Lancashire.
For many years, our traditional industries have declined and the people of north-east Lancashire have entered other industries. Indeed, Rolls-Royce and Lucas Aerospace were relocated in north-east Lancashire during the war and played a vital part in the early work of the development of the jet engine. At the moment, one of the important development sections of Rolls-Royce is at Barnoldswick. However, there is talk of closing that section. When we refer to rationalisation and diversification — to which Conservative Members have referred tonight—we all know that that frequently means factory closures and redundancies, most often in areas where there is little alternative employment for the people affected.
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This is a genuine fear of ours. I must again stress that it would affect not only Rolls-Royce but the other-industries as well. We recognise that the present position has been achieved largely because of Government support given to the industry and also because of the sacrifices made by many of the workers, who have been determined to make a success of the company. What a tragedy it would be if, having reached the present position, we were to throw the company's prosperity away because of the dogma of a Government who are determined to privatise everything that it is possible to dispose of as speedily as they can.
We must recognise that private ownership is greedy for quick profits. The Secretary of State himself, when speaking earlier this evening of the success of the privatised industries, summarised that success by speaking in terms of the massive growth in profit of those companies. The one big difference between the two sides of the House is that Opposition Members do not judge everything in terms of profit. We judge in terms of service to the nation as a whole, to the consumer and to the employees of an industry. These aspects cannot be ignored.
The future of the industry, in the interests of both the nation as a whole and the employees, would be far better served if this company, whose name enjoys worldwide renown, remained in the public sector rather than being privatised in accordance with the Tory party's dogma.
9.36 pm
Mr. Terry Davis: On behalf of the Labour party, I should like to make it clear at the outset that we very much hope that Rolls-Royce will be successful and profitable and that we expect it to be so, at least in the short term. That is the whole point of the debate. Rolls-Royce is engaged in a high-risk business, which needs long-term investment and a long-term view of its projects, product developments and prospects. After all, that is why Rolls-Royce was taken into public ownership in the first place.
Rolls-Royce went bankrupt under private ownership and was rescued, with all-party support, by a Conservative Government. The Secretary of State tells us, by implication at least, that in the past 16 years of public ownership Rolls-Royce has improved its management, its efficiency and its sales and has now begun to make a profit. But the world outside the company has not changed. The design, manufacture and sale of aeroengines is still a high-risk and competitive business. Nor have Britain's financial institutions changed. The City of London still takes a short-term view and wants short-term profits. So a Rolls-Royce dependent on the City of London for investment, however profitable the investment in the long term, will always have a question mark over its long-term future. Rolls-Royce will inevitably suffer from that uncertainty. Uncertainty is the real enemy of industrial success. That is why the Government's insistence on privatising Rolls-Royce is bad for the company.
It is also bad for the people who work for Rolls-Royce. The hon. Member for Loughborough (Mr. Dorrell) tells us that the work force want a stake in a successful and profitable company. But what they want above all is the certainty, the security, the stability of knowing that they have a job, a real job and a job for the future. They do not want any unnecessary uncertainty about that future. That

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is why privatisaton and a privately owned Rolls-Royce, which is dependent on the City of London for its funds, is bad for the work force.
Mr. Patrick McLoughlin rose—
Mr. Davis: Although I am pressed for time, if the hon. Gentleman wishes to intervene, I shall certainly give way.
Mr. McLoughlin: What happened to Jaguar when it was privatised? The hon. Gentleman comes from the west midlands and he knows what happened to that company.
Mr. Davis: I am delighted that that has been raised. I was about to come to Jaguar in my speech. In fact, I shall refer not only to Jaguar but to other companies in the west midlands.
However, it is because privatisation is bad for the work force that so many local authorities have expressed concern, and why so many mayors, lord mayors and lord provosts and leaders of all political parties, including Conservatives, came to the House of Commons to lobby against the Government's policy.
The uncertainty is also bad for a group of people who have hardly been mentioned this evening. They are the suppliers of Rolls-Royce and their employees. The people who work for the suppliers must rightly be concerned about competition from other suppliers who can provide components of higher quality, or more cheaply. They do not need any additional uncertainty about the long-term future of their principal customers.
The Government's insistence on privatisation is bad for the taxpayer. My right hon. and learned Friend the Member for Monklands, East (Mr. Smith) explained how the Government's total investment in Rolls-Royce is now somewhere between £1·5 billion and £2 billion. However, that investment is to be sold for £1·3 billion. It is to be sold at a loss, at the very time when the company has become profitable. The taxpayer took the risk, but private shareholders will take the profits. However, it will not stop there. Everyone agrees that after privatisation Rolls-Royce will still need Government funds for research and development and launch aid. In good years, the shareholders will take the profits, but in bad years, when the company needs money to launch new products, the taxpayer will foot the bill.
The only argument that has been advanced by the Secretary of State and his hon. Friends is to tell us that, in some mysterious way, privatisation leads, inevitably, to even greater success. The Secretary of State listed five companies, the performance of which has improved since privatisation. The hon. Member for Derbyshire, West (Mr. McLoughlin) referred to one of those companies, Jaguar. However, to say that the performance of those companies has improved since privatisation, is not to say that their performance has improved as a result of privatisation. That ignores completely, as the hon. Gentleman ignored — [Interruption.] The Secretary of State was totally unable to answer a direct question from my right hon. and learned Friend the Member for Monklands, East who asked him to tell us on what occasion even this Government second-guessed the management of Rolls-Royce. We have it on record from the former chairman of Rolls-Royce that the previous Labour Government did not intervene.
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Let us deal with the mysterious way in which privatisation improves the performance of companies. The hon. Member for Derbyshire, West ignored the fact that there are many companies which, like Rolls-Royce, have flourished under public ownership. We have had debates on other industries, such as the motor industry. Sections of the Rover Group are profitable and have improved their performance.
Mr. Gerald Howarth: At last.
Mr. Davis: Those sections have done that as a result of investment under public ownership. To give just one example, Freight-Rover was losing money under private ownership. Conservative Members also wish to ignore those companies that have been privatised, and then have failed. [Interruption.] The hon. Member for Derbyshire, West, referred to Jaguar — [Interruption.] The hon. Member for Amber Valley (Mr. Oppenheim) should listen. I have already identified one such section in my own constituency. I am now dealing with his hon. Friend who claims to know Coventry and who referred to Jaguar.
Coventry also has Rolls-Royce. Right next to Rolls-Royce is Coventry Climax, which was privatised in 1981. At the time of privatisation, Coventry Climax had 3,000 men and women working there. They were told that their jobs were secure, just as the Rolls-Royce workers have been told that their jobs are secure now. Their jobs were secure for five years, past a general election. However in 1986, the work force at Coventry Climax was reduced from 3,000 to 600. Conservative Members ignore that also. I am not saying that that was necessarily the result of privatisation. However, I think it was because of the people who bought Coventry Climax and who took over the company, milked it, stripped it and ran it down. But the point is that privatisation is not some mysterious, magic formula which produces job security or increases profits. It can lead to failure as well as success.
We all know that the Government are determined to privatise everything they can, not because it is in the industrial interests of companies, nor because they are interested in industrial success; they are interested in dogma. For 40 years we have had a consensus between the main political parties that there should he a mixed economy. The Labour party still believes in it, but the Conservative Government have rejected it. By voting for the motion tonight the Labour party will affirm its belief in the mixed economy and reject the views of the extremists on the Governments Benches.
9.45 pm
The Minister for Information Technology (Mr. Geoffrey Pattie): The hon. Member for Birmingham, Hodge Hill (Mr. Davis) and I agreed to restrict the time that we would take in the debate to allow the maximum number of hon. Members to participate, so I hope that that will be borne in mind in interventions.
The hon. Gentleman spoke about Government interference, and I should like to observe immediately that the present administration between Rolls-Royce and the Government operates on the basis of an annual report and frequent consultations between the company and the Government. It is a question whether that is interference. The plain fact is that it is not possible for the company to embark on major investment programmes, or even to decide on matters such as the salaries of the chief executive

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and top people in the company, without consulting the Government. If that is not interference, I do not know what is.
For some time the right hon. Member for Glasgow, Goven (Mr. Millan) has been asking, and I have been attempting to answer, questions about the extent of the launch aid given on the RB211 programme. He will have seen from my answers that it totals £537 million. He seems to want to import launch aid into the present privatisation process, when the capital structure is completely different. I tried to understand from his speech whether he was suggesting that Rolls-Royce should not be eligible for launch aid. I have already told him about the levies of £340 million that we receive from that programme, but he wants the company in future to continue to be eligible for research and development programmes. Indeed, my hon. Friend the Member for Loughborough (Mr. Dorrell) urged that the company should be so eligible.
Tonight many hon. Members have voiced their anxiety on behalf of their constituents about the future of employment in the industry. In particular, they have referred to 1971, when Rolls-Royce was heavily exposed to the development costs of a single engine. In 1987 the company's strategy is somewhat different. The prospectus, which is available today, makes it clear that the
"principal objective in the civil aero-engine market is to be able to offer, either alone or in collaboration with other manufacturers, an engine to compete within each principal market sector."
There is no suggestion of over-reliance on a single development and the importance of collaboration is well recognised.
I must tell all hon. Members who spoke of anxiety about the future that the only guarantee that any commercial enterprise can have is of the success of its product through marketing, design and the ability to collaborate and to sell that product in international markets. There can be no guarantees, and there never have been any guarantees. Indeed, during public ownership 22,000 jobs have been lost from Rolls-Royce, so, far from there being any guarantees in the public sector, there appears to have been none. The reality has been that in the last 17 years Rolls-Royce has had to reduce its work force in order to remain competitive.
I wish that when the right hon. Member for Govan and his hon. Friend the Member for Coventry, North-East (Mr. Park) make points about certain individual programmes, such as the V2500 engine and the Superfan, they would get their facts right. To describe the V2500 as the media did, and as some Members of the House have done, as a troubled programme is untrue. It is a development programme, which means that the engine has to be run and run until it gets to the point of destruction. It is not right to describe a programme such as that in those terms, and to say, as the right hon. Gentleman and his hon. Friend did, that the Superfan programme has stopped, is not true. The programme has not stopped. What happened was that the international consortium IAE decided that it could not give a guarantee to have the Superfan engine available at a particular time, which meant that A340 airbus would be disadvantaged.
It is also not true for the hon. Member for Coventry, North-East, who I see is in his place now, to describe the Government's response to those two programmes, the A330 and A340, as miserly, or niggardly, or some such word, when it is widely known and recognised that the
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Government have already discussed with British Aerospace a sum of £400 million. I would not have thought that that was either a miserly or a niggardly figure, and the description is not deserved.
Mr. Nellist rose—
Mr. Pattie: As the hon. Gentleman has not been able to make a contribution to the debate, I shall give way.
Mr. Nellist: I am grateful to the right hon. Gentleman. If the V2500 is doing so well, why has Pratt and Whitney taken over engineering control? If privatisation means that the company will be successful in the future, why have the Government had to write off £645 million of company debt? Finally, if privatisation is so attractive to the work force, why, over the last 12 months, has the company banned any discussion of privatisation issues by the workers and their unions inside the plant, while it spends a fortune on videos and luxurious surroundings to launch the programme? If privatisation is so wonderful, let us have answers to those three questions.
Mr. Pattie: I hope the hon. Gentleman realises that I have been generous to him. First, Pratt and Whitney has not taken over control of the V2500 programme. There have been some compressor problems, but Pratt and Whitney has not taken over control of the programme. No debt has been written off. If we had more time I would be able to explain to the hen. Gentleman the reasons for the mechanisms that have been used.
The videos are part of a process that I would have thought the hon. Gentleman would welcome. If nothing of that sort had been produced, the criticism would now be levelled that the management was not telling the work force anything. Indeed, that criticism was made at one time, but on asking the company what it was doing I discovered that there were regular weekly briefings in all the various plants to make the work force aware of exactly what was going on.
Mr. Terry Davis: The were one-sided.
Mr. Pattie: The hon. Gentleman says that they were one-sided. Is a briefing riot normally one-sided?
Mr. Davis: The right hon. Gentleman has missed the point. If it is such an obvious case and it will persuade all the work force, why will the management not allow the work force to discuss it?
Mr. Pattie: I am talking about the ability of the management to inform the workers in the company of exactly what its plans are. At such meetings it is surely open to the work force to make their views known.
We shall have to wait and see, as several of my hon. Friends have said in this debate, how interesting the share offer is to the employees of Rolls-Royce. We have seen this situation before. I well remember the British Aerospace flotation, when the trade unions campaigned, as they are perfectly entitled to do, and said, in my constituency among others, that they hoped that their comrades would not be taking up the awful offer. Of course, when the time came the comrades took up the offer, as they were free to do. We know from the whole of the privatisation programme, going back to 1980, that there are now more than 480,000 employee shareholders. I should have thought that that was extremely good news. That surely is genuine public involvement and public ownership worthy of the name.
Mr. Park: My hon. Friend the Member for Eccles (Mr. Carter-Jones) and I, with hon. Members from other parties, accompanied a whole series of delegations to Ministers—when the Minister was in the MOD—about providing help for the A320—repayable help, I might add. The offer that has been made on the A330/340 is less than half what British Aerospace reckons it needs. The danger is that the work will go to other Governments in Europe who are prepared to be more forthcoming.
Mr. Pattie: The amount that the Government advanced on the A320 was £250 million. Now we are talking about figures that are considerably in excess of that sum. Tonight we have not heard what the Opposition have to offer Rolls-Royce. We know that it is something called social ownership—a nice, modern, red-rose term for nothing less than renationalisation. Nobody will be fooled by that. Nationalisation means bureaucratic and political interference, over-manning, inefficiency, huge losses, and poor services to the customer. Privatisation, on the other hand, has extended share ownership and real employee participation, as was welcomed by my hon. Friend the Member for Nuneaton (Mr. Stevens).
My hon. Friend the Member for Cannock and Burntwood (Mr. Howarth) paid tribute to the excellence of the Rolls-Royce management and work force. The efficiency and service to customers of newly privatised companies have increased enormously. The comments of my right hon. Friend are proof of that pudding. The hon. Member for Burnley (Mr. Pike) said that all we seem to talk about are profits. The hon. Gentleman did not seem to realise that profits are a way of leading towards jobs. Without profits, there are no jobs.
Jaguar has produced 2,000 more jobs, 96 per cent. of BT employees own shares in that company, and the pressure of competition on British Telecom has meant that its prices have come down by 8·5 per cent. in real terms. That is the power of competition. My hon. Friend the Member for Amber Valley (Mr. Oppenheim) reminded the House of the excellence of, and new-found pressure on, British Telecom. The fundamental proposition is: why should we not allow men and women in the country to own shares in major British companies? If we can do this and promote improved efficiency, competition and better services in these companies, the whole process will be successful.
The problem for the Opposition is that privatisation is a roaring success. They are stuck with their opposition to it. They know that wider share ownership will be to the 1987 election what wider home ownership was to the 1983 election. Unfortunately, they are stuck on the rock of that hard-left dogmatic Labour position. They cannot get off it. They know that they are on to a loser, but they cannot move. They are looking at privatisation, which the customer wants and which the management, the work force and the shareholding public also want. They look at all these things and say, "We know we are on a loser." I urge the House to throw out the motion.
Question put: —
The House divided: Ayes 157, Noes 236.

Division No. 148]

[10 pm

AYES

Adams, Allen (Paisley N)

Bagier, Gordon A. T.

Archer, Rt Hon Peter

Barron, Kevin

Ashley, Rt Hon Jack

Beckett, Mrs Margaret

Atkinson, N. (Tottenham)

Bell, Stuart

260

Benn, Rt Hon Tony

Lambie, David

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

Lamond, James

Bermingham, Gerald

Leadbitter, Ted

Bidwell, Sydney

Leighton, Ronald

Blair, Anthony

Lewis, Ron (Carlisle)

Bray, Dr Jeremy

Lewis, Terence (Worsley)

Brown, Hugh D. (Provan)

Litherland, Robert

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

Lofthouse, Geoffrey

Brown, Ron (E'burgh, Leith)

Loyden, Edward

Buchan, Norman

McCartney, Hugh

Caborn, Richard

McGuire, Michael

Callaghan, Jim (Heyw'd & M)

McKay, Allen (Penistone)

Campbell, Ian

MacKenzie, Rt Hon Gregor

Campbell-Savours, Dale

McNamara, Kevin

Canavan, Dennis

McTaggart, Robert

Carter-Jones, Lewis

Madden, Max

Clark, Dr David (S Shields)

Marshall, David (Shettleston)

Clarke, Thomas

Martin, Michael

Clay, Robert

Mason, Rt Hon Roy

Clelland, David Gordon

Maxton, John

Clwyd, Mrs Ann

Maynard, Miss Joan

Cocks, Rt Hon M. (Bristol S)

Meacher, Michael

Cohen, Harry

Michie, William

Conlan, Bernard

Mikardo, Ian

Cook, Frank (Stockton North)

Millan, Rt Hon Bruce

Cook, Robin F. (Livingston)

Morris, Rt Hon A. (W'shawe)

Corbett, Robin

Nellist, David

Corbyn, Jeremy

Oakes, Rt Hon Gordon

Craigen, J. M.

O'Neill, Martin

Crowther, Stan

Park, George

Cunliffe, Lawrence

Patchett, Terry

Cunningham, Dr John

Pendry, Tom

Dalyell, Tam

Pike, Peter

Davies, Ronald (Caerphilly)

Prescott, John

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

Randall, Stuart

Deakins, Eric

Raynsford, Nick

Dewar, Donald

Redmond, Martin

Dixon, Donald

Rees, Rt Hon M. (Leeds S)

Dobson, Frank

Richardson, Ms Jo

Dormand, Jack

Roberts, Allan (Bootle)

Douglas, Dick

Roberts, Ernest (Hackney N)

Dubs, Alfred

Robertson, George

Duffy, A. E. P.

Robinson, G. (Coventry NW)

Dunwoody, Hon Mrs G.

Rogers, Allan

Eadie, Alex

Rooker, J. W.

Eastham, Ken

Ross, Ernest (Dundee W)

Evans, John (St. Helens N)

Rowlands, Ted

Fatchett, Derek

Sedgemore, Brian

Faulds, Andrew

Sheldon, Rt Hon R.

Fields, T. (L'pool Broad Gn)

Shore, Rt Hon Peter

Fisher, Mark

Short, Ms Clare (Ladywood)

Flannery, Martin

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

Foot, Rt Hon Michael

Skinner, Dennis

Forrester, John

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

Foster, Derek

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

Foulkes, George

Snape, Peter

Fraser, J. (Norwood)

Soley, Clive

George, Bruce

Spearing, Nigel

Gilbert, Rt Hon Dr John

Strang, Gavin

Golding, Mrs Llin

Straw, Jack

Gould, Bryan

Thomas, Dr R. (Carmarthen)

Hamilton, James (M'well N)

Thompson, J. (Wansbeck)

Hamilton, W. W. (Fife Central)

Thorne, Stan (Preston)

Harrison, Rt Hon Walter

Tinn, James

Haynes, Frank

Warden, Gareth (Gower)

Healey, Rt Hon Denis

Weetch, Ken

Heffer, Eric S.

Welsh, Michael

Hogg, N. (C'nauld & Kilsyth)

White, James

Holland, Stuart (Vauxhall)

Wigley, Dafydd

Home Robertson, John

Wilson, Gordon

Howarth, George (Knowsley, N)

Winnick, David

Howell, Rt Hon D. (S'heath)

Young, David (Bolton SE)

Hoyle, Douglas

Hughes, Robert (Aberdeen N)

Tellers for the Ayes:

Hughes, Roy (Newport East)

Mr. John McWilliam and Mr. Tony Lloyd.

Hughes, Sean (Knowsley S)

John, Brynmor

261

NOES

Aitken, Jonathan

Coombs, Simon

Alexander, Richard

Cope, John

Alton, David

Cormack, Patrick

Amess, David

Currie, Mrs Edwina

Ancram, Michael

Dickens, Geoffrey

Arnold, Tom

Dicks, Terry

Ashby, David

Dorrell, Stephen

Ashdown, Paddy

Douglas-Hamilton, Lord J.

Aspinwall, Jack

du Cann, Rt Hon Sir Edward

Atkins, Rt Hon Sir H.

Dunn, Robert

Atkins, Robert (South Ribble)

Durant, Tony

Atkinson, David (B'm'th E)

Dykes, Hugh

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

Evennett, David

Baker, Nicholas (Dorset N)

Fallon, Michael

Baldry, Tony

Farr, Sir John

Banks, Robert (Harrogate)

Fenner, Dame Peggy

Barnes, Mrs Rosemary

Fletcher, Sir Alexander

Batiste, Spencer

Forman, Nigel

Beaumont-Dark, Anthony

Forsyth, Michael (Stirling)

Bellingham, Henry

Forth, Eric

Bendall, Vivian

Fox, Sir Marcus

Benyon, William

Fraser, Peter (Angus East)

Bevan, David Gilroy

Freeman, Roger

Biffen, Rt Hon John

Freud, Clement

Biggs-Davison, Sir John

Fry, Peter

Blackburn, John

Gale, Roger

Body, Sir Richard

Galley, Roy

Bonsor, Sir Nicholas

Gardner, Sir Edward (Fylde)

Boscawen, Hon Robert

Garel-Jones, Tristan

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

Gilmour, Rt Hon Sir Ian

Bowden, Gerald (Dulwich)

Glyn, Dr Alan

Boyson, Dr Rhodes

Goodhart, Sir Philip

Braine, Rt Hon Sir Bernard

Gorst, John

Bright, Graham

Gow, Ian

Brittan, Rt Hon Leon

Gower, Sir Raymond

Browne, John

Grant, Sir Anthony

Bruce, Malcolm

Greenway, Harry

Bryan, Sir Paul

Gregory, Conal

Buck, Sir Antony

Griffiths, Sir Eldon

Budgen, Nick

Griffiths, Peter (Portsm'th N)

Bulmer, Esmond

Ground, Patrick

Burt, Alistair

Grylls, Michael

Butcher, John

Hamilton, Hon A. (Epsom)

Butler, Rt Hon Sir Adam

Hamilton, Neil (Tatton)

Butterfill, John

Hampson, Dr Keith

Carlisle, John (Luton N)

Hancock, Michael

Carlisle, Kenneth (Lincoln)

Hannam, John

Carttiss, Michael

Harris, David

Cartwright, John

Harvey, Robert

Cash, William

Haselhurst, Alan

Channon, Rt Hon Paul

Hawkins, C. (High Peak)

Chapman, Sydney

Hawksley, Warren

Chope, Christopher

Hayes, J.

Churchill, W. S.

Hayward, Robert

Clark, Hon A. (Plym'th S'n)

Heathcoat-Amory, David

Clark, Dr Michael (Rochford)

Heddle, John

Clark, Sir W. (Croydon S)

Henderson, Barry

Clarke, Rt Hon K. (Rushcliffe)

Hickmet, Richard

Clegg, Sir Walter

Hirst, Michael

Cockeram, Eric

Holland, Sir Philip (Gedling)

Conway, Derek

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

262

Howarth, Gerald (Cannock)

St. John-Stevas, Rt Hon N.

Howell, Ralph (Norfolk, N)

Sayeed, Jonathan

Howells, Geraint

Shaw, Giles (Pudsey)

Hubbard-Miles, Peter

Shaw, Sir Michael (Scarb')

Hunter, Andrew

Shelton, William (Streatham)

Hurd, Rt Hon Douglas

Shepherd, Colin (Hereford)

Irving, Charles

Shepherd, Richard (Aldridge)

Jackson, Robert

Silvester, Fred

Jenkin, Rt Hon Patrick

Sims, Roger

Johnson Smith, Sir Geoffrey

Skeet, Sir Trevor

Johnston, Sir Russell

Speed, Keith

Jones, Gwilym (Cardiff N)

Speller, Tony

Jones, Robert (Herts W)

Spencer, Derek

Kellett-Bowman, Mrs Elaine

Spicer, Jim (Dorset W)

Kershaw, Sir Anthony

Steen, Anthony

King, Roger (B'ham N'field)

Stern, Michael

Kirkwood, Archy

Stevens, Lewis (Nuneaton)

Knight, Greg (Derby N)

Stewart, Allan (Eastwood)

Knight, Dame Jill (Edgbaston)

Stewart, Andrew (Sherwood)

Lawrence, Ivan

Stewart, Ian (Hertf'dshire N)

Lee, John (Pendle)

Stradling Thomas, Sir John

Lennox-Boyd, Hon Mark

Sumberg, David

Lester, Jim

Taylor, Matthew

Lilley, Peter

Taylor, Teddy (S'end E)

Livsey, Richard

Thomas, Rt Hon Peter

Lloyd, Sir Ian (Havant)

Thompson, Patrick (N'ich N)

Lloyd, Peter (Fareham)

Thorne, Neil (Ilford S)

Lyell, Nicholas

Thornton, Malcolm

McCrindle, Robert

Townend, John (Bridlington)

MacKay, John (Argyll & Bute)

Townsend, Cyril D. (B'heath)

Maclean, David John

Tracey, Richard

McLoughlin, Patrick

Trippier, David

Major, John

Trotter, Neville

Malone, Gerald

van Straubenzee, Sir W.

Maples, John

Vaughan, Sir Gerard

Meadowcroft, Michael

Waddington, Rt Hon David

Mitchell, David (Hants NW)

Wakeham, Rt Hon John

Monro, Sir Hector

Waldegrave, Hon William

Neubert, Michael

Wall, Sir Patrick

Norris, Steven

Wallace, James

Oppenheim, Phillip

Waller, Gary

Page, Sir John (Harrow W)

Wardle, C. (Bexhill)

Pattie, Rt Hon Geoffrey

Watson, John

Peacock, Mrs Elizabeth

Watts, John

Pollock, Alexander

Wells, Bowen (Hertford)

Porter, Barry

Wells, Sir John (Maidstone)

Portillo, Michael

Whitfield, John

Powley, John

Winterton, Mrs Ann

Raison, Rt Hon Timothy

Winterton, Nicholas

Rhodes James, Robert

Wolfson, Mark

Ridley, Rt Hon Nicholas

Woodcock, Michael

Ridsdale, Sir Julian

Wrigglesworth, Ian

Rippon, Rt Hon Geoffrey

Yeo, Tim

Roberts, Wyn (Conwy)

Young, Sir George (Acton)

Robinson, Mark (N'port W)

Younger, Rt Hon George

Roe, Mrs Marion

Rossi, Sir Hugh

Tellers for the Noes:

Ryder, Richard

Mr. David Lightbown and

Sainsbury, Hon Timothy

Mr. Francis Maude.

Question accordingly negatived.

Stansted Airport
10.12 pm
The Minister of State, Department of Transport (Mr. David Mitchell): I beg to move,
That the draft Stansted Airport Aircraft Movement Limit Order 1987, which was laid before this House on 7th April, be approved.
In introducing the draft order, I think it worth remarking that this must be one of the most predictable, most unsurprising measures which could be brought before the House for its approval. The Government's intention to make an air transport movement—ATM—limit order for Stansted airport was signalled in June 1985, when we first gave the go-ahead to expansion there. The Government now seek to implement their intention and, in so doing, to fulfil the promise we made about phasing the development at Stansted.
The 1985 airports policy White paper expressed the Government's awareness of the genuine and understandable concern which had been expressed by local residents and Members of Parliament in the Stansted area about the scale and extent of development at the airport and about the environmental effects. The Government therefore promised that development of Stansted airport would be phased with the first stage of development limited to about 7 million to 8 million passengers per annum. A condition of the planning permission for Stansted airport to grow from current levels to about 15 million passengers per annum was that construction of the development would be so phased.
To underpin the planning condition we decided that the relatively blunt, unsophisticated instrument of an ATM limit could provide an additional means of regulating airport development, with the object of controlling the impact of that development on local infrastructure. We therefore undertook to seek the necessary powers to enable the Government to set ATM limits subject to the approval of Parliament. We made it clear that we would use such powers at Stansted to impose an ATM limit sufficient only to enable effective utilisation of the first phase of development, that is to say, about 7 million to 8 million passengers per annum.
The Government sought the necessary powers in last year's Airports Bill, and they now exist as section 32 of the Airports Act 1986. Section 32 restricts the use of ATM limit powers to airports where runway capacity is significantly underused. An airport whose runway capacity is already saturated has a naturally imposed limit. Section 32 also required the Secretary of State to consult within the civil aviation industry and among local authorities that are likely to be affected before setting a limit. That local authority interests are required to be consulted on the face of the legislation bears testamount to the efforts of my hon. Friend the Member for Saffron Walden (Mr. Haselhurst) and we are indebted to him. I am glad to see him in his place, as is usual when anything affects his constituency is debated.
The necessary powers came into force late last year. The Government are now keen to keep their promise for a first-phase ATM limit at Stansted—a promise that they gave when planning permission for Stansted development was given, in the 1985 airports policy White Paper, and during the passage of the Bill, both here and in another place.
The White Paper commitment to an ATM limit went beyond the reassurance of local interests—important
264
though those interests may be. The White Paper said that decisions on a Stansted ATM limit should be for Parliament. The Government have again been faithful to their intention in bringing before this House tonight a draft order that is subject to affirmative resolution.
The order proposes a limit of 78,000 air transport movements. That figure is designed to correspond to a passenger throughput at the Stansted development of no more than about 7 million to 8 million passengers per annum. This is consistent with the planning condition and with the Government's subsequent investment approval for a terminal capable of handling 8 million passengers per annum. The figure, which has been calculated on my Department's most recent air passenger traffic forecasts, has been determined by two factors. The first of those is the relative mix of types of traffic that we expect to serve Stansted when passenger throughput approaches 8 million passengers per annum; and secondly, the average aircraft passenger loading — the number of passengers per air transport movement—at that time.
The figure of 78,000 ATMs assumes that all categories of traffic at Stansted will experience significant growth. The assumptions which underlie the calculation of the limit suggest that 8 million passengers per annum at Stansted would be composed of about 10 per cent. domestic passengers, 37 per cent. short-haul charter passengers, about 19 per cent. short-haul scheduled passengers and the balance — about 35 per cent. — of long-haul passengers.
The second element of the calculation, passenger loading, has been predicted by comparison with Gatwick. Given the similarities of Stansted now and Gatwick in its early years, it is not unreasonable to draw a parallel between the passenger loadings that might operate at Stansted when the airport development is handling 8 million passengers per annum and the passenger loadings at Gatwick when that airport had an identical passenger volume. Of course, the analogy is not precise. I have already been pressed on this matter by my hon. Friend the Member for Saffron Walden, who represents this locality. I have no doubt that he will wish to have further discussions with me about that. The analogy is not precise and corrections have had to be made to allow for higher passenger loadings as a result of improvements in aircraft technology, and to eliminate any distortion from the passenger loadings on the Gatwick-Heathrow helicopter link which was in operation, when Gatwick was at 8 million passengers per annum.
In determining the quantum of the limit, we have tested the robustness of the figure against differing assumptions about both traffic mix and passenger loading. In particular, the limit has been tested against two scenarios, one of which puts forward rapid growth in short-haul scheduled services — reflecting extensive liberalisation and deregulation of air services—and a quite different scenario in which there is pre-eminent growth in the charter market — with short/medium haul charter passengers forming a much larger proportion of the 8 million passengers per annum. In both cases there was no significant difference from the 78,000 air transport movement figure of the central assumptions. Indeed, the agreement was within 1 per cent. This gives me great confidence to commend to the House the figure in the draft order.
The draft order is in five articles. The first two define the numerical value of the limit and its period of operation.

265
Although the limit would apply annually from 1 March of each year, it is proposed that the order should come into effect from 1 June this year. This will mean that one quarter of the first year of operation of the limit will have passed, but this loss will have no material effect. The current level of ATM usage of Stansted is less than 20 per cent. of the proposed limit and the existing terminal capacity will not allow traffic to approach the limit even distantly between now and February 1988.
Article 3 of the order describes those classes of aircraft movement that the Government propose to exclude from counting against the limit. In the 1985 White Paper the Government set out their undertaking to impose a limit expressly on ATMs at Stansted. During the passage of the legislation, we explained what an ATM limit would and would not cover, setting out explicitly that the limit would exclude diversion, repositioning, air-taxi and general aviation movements. The proposal reflects our White Paper undertaking about seeking to constrain passenger volume. It follows that the limit should bear on passenger air transport movements only.
I opened this debate by suggesting that this was an unsurprising measure for the Government to bring forward. I hope that I have now explained why. Our 1985 White Paper promised a limit on ATMs at Stansted so that the first phase of development should not handle beyond about 7 million to 8 million passengers per year. We promised to seek the necessary powers and did so in the Airports Bill. During the passage of the Bill we described in detail how a limit would operate and what it should and should not include. The Airports Act 1986 and the necessary powers are now in force and tonight we are fulfilling our promise to seek the House's approval to an appropriate limit. I commend the order to the House.
10.22 pm
Mr. Peter Snape: The Minister opened the debate by saying that the order was both predictable and unsurprising. Predictable it may be, but I am not so sure about the second part of the Minister's description. It would probably be far beyond my limited capabilities as an orator to arouse the House to great heights of passion about this order, but I should like to mention one or two points. [Interruption] "Heights of passion" would be the wrong phrase to describe some of the Conservative Members present for the debate. I should like to ask the Minister one or two questions, especially about the press release that was issued in conjunction with the order. Presumably that press release was issued in the name of the Minister. It says that "extensive consultation" was undertaken prior to the order being laid. The House would be grateful to know what sort of consultation the Minister regards as extensive. Certainly there are other aviation interests and other regional airports which feel that no such consultation has taken place. They rightly feel a good deal of concern that this order has been laid. Far from the consultation being extensive, it appears to have been localised to the area of Stansted airport.
Mr. Alfred Morris: This is a deeply sensitive matter for Manchester airport, as my hon. Friend will appreciate, and for other airports outside the south-east of England. Would he agree that it is at once surprising and indeed culpable that the North of England Regional Consortium was not consulted on such an important matter?
Mr. Snape: In reply to my right hon. Friend, and to use the Minister's own words, it is predictable and unsurprising that the sort of interests that my right hon. Friend has outlined were not consulted. In view of the controversy that has surrounded the proposed development at Stansted airport, to say the least it is somewhat insensitive that the interests about which my right hon. Friend spoke have not been consulted. I have heard him speak many times about this in the Chamber so I know that he is aware of the concern of provincial airports such as Manchester about the proposed Stansted development.
Being aware of those concerns, one would have thought that the Minister would have consulted, as my right hon. Friend the Member for Manchester, Wythenshawe (Mr. Morris) said, such bodies as the North of England Regional Consortium or the Joint Airports Committee of Local Authorities—JACOLA.
If the Minister wants to use the description "predictable and unsurprising" about orders such as this, one would have thought that he would have first sought extensive consultation with aviation and airport interests represented by both bodies to which my right hon. Friend and I have just referred. The Minister might well say that there is no statutory duty for a Secretary of State to consult regional interests, but, given the controversy that has surrounded this development, I repeat that one would have thought that, for the sake of peace and tranquillity in aviation, these consultations would have taken place. If they had taken place, there might well have been suggestions from bodies such as the North of England Regional consortium and JACOLA and there might well have been a slightly different approach to limiting ATMs at Stansted.
The Minister referred in his speech to section 32 of the Airports Act 1986, but the Act should be used not only to facilitate environmental objectives but to reinforce other policies such as traffic realloation. The bodies to which I have referred and the Opposition believe that Stansted's limit need not be based on the maximum throughput of its new terminal but perhaps could be laid on a gradual buildup of traffic reflecting the Government's traffic reallocation policy generally.
The Minister referred to the fact that Stansted's current capacity is less than 20 per cent., I think he said, of the proposed limit. If that is the case, why set the limit in this order tonight? It would be better gradually to step up the limit so that regional interests could express points of view over the next few months or even the next few years. That would be a more conciliatory and consultative approach than setting a limit in the order that allows the enormous development of which Stansted is currently not capable.
The order does have particular significance for controlling the incidence of long-haul traffic at Stansted. As I understand it, the order allows for up to 2·75 million passengers per annum of this type of traffic. I trust I speak for hon. Members on both sides of th House when I say that we would appreciate some indication from the Minister as to where this demand will originate and, if necessary, from what airports those 2·75 million passengers per annum will be transferred. As I am sure the Minister will concede, the output at Stansted since the announcement of its development has been growing modestly.
Opposition Members favour a limit on ATMs at Stansted which reflects the reality at present and which can be subject to review on a regular basis. That is not to say

267
that we want an enormously controversial debate, whether late at night or in prime parliamentary time, but I hope that the Minister will appreciate that these matters are fairly sensitive on the regions. While I understand that the Government's aviation policy appears to be devoted to solving the London problem at everybody's else's expense, surely it is not beyond the wit or inclination of the Department of Transport to appreciate the genuine concerns that are felt in areas outside London.
The Minister referred to positioning movements at Stansted. These movements are normally associated with inclusive tour operations which again, as he has indicated from the projected figures he has given, make up a high proportion of movements at Stansted. As the ATM limit excludes those positioning movements, as the Minister has rightly said, we can anticipate that about 5 to 10 per cent. more movements will be allowed over and above the limit. It is not for me to spend too long on the environmental implications for the residents in the Stansted area of the 5 to 10 per cent. increase over the proposed limit. I have no doubt that the hon. Member for Saffron Walden (Mr Haselhurst) will do that himself — if not tonight,
268
certainly at some time in the future. However, the question of positioning movements appears to be somewhat incompatible with the Minister's declared objective of protecting environmental interests in and around the airport.
I hope that the comments that will come from Opposition Members, despite the Minister's description of the order as "predictable and unsurprising" are, at least in his eyes and the eyes of those who advise him, unpredictable and surprising.
The proposed development at Stansted has been and is a controversial matter. There are legitimate concerns at Manchester, Birmingham, Glasgow and other airports in the United Kingdom. The Minister's comments so far, far from allaying those concerns, enhanced them. I hope that, in the same spirit as I have replied to the order, he will do something this evening to show that we can expect future debates on these matters so that those legitimate concerns to which I have referred can be expressed in the House and satisfactorily answered by a Department which, as I said earlier, somtimes appears to be more concerned with solving what it sees as the problems of London's airports than looking at aviation as the great national industry that it is.
10.32 pm
Mr. Alan Haselhurst: Despite the controversy to which the hon. Member for West Bromwich, East (Mr. Snape) referred and in which I have been fully involved in the past, I want to make it clear that I extend a warm welcome to the order. It is somewhat ironic that I should do so because, as some of my hon. Friends and Opposition Members may remember, I spoke in a forthright sense on the question of the utility of a power to limit air transport movements when it was first raised in the Civil Aviation Bill which was introduced in 1984. Those arguments seemed to prevail at the time. Therefore, I accept that it is a quirk of fate that I now grasp the more specific power, agreed by the House in the Airports Act 1986, from which this order devolves. We were able to confine the power given in the Act in such a way that it is tailored to the specific case of Stansted.
The order is very specific. It is intended to deliver the Government's promise on the limitation of the development of Stansted in terms of size. As the hon. Member for West Bromwich, East surmised, the environmental quality around Stansted is of concern to me for the sake of my constituents and neighbouring constituencies. However, the order is aimed simply at the question of size rather than environment.
The Government made two suggestions to limit the size of the development of Stansted. The first was to say that the terminal to be built should not exceed 50,000 sq m and the second was to allow the House, by means of an air transport movement limit, to determine whether Stansted should be allowed to proceed beyond an approximate limit of 7 million to 8 million passengers per annum throughput. I accept entirely the Government's good faith in responding in that way and I accept the nature of the order tonight.
The House could exercise influence over the future of Stansted only through this type of order since the Government had chosen to use planning law to determine whether Stansted should be expanded. This was because they could say either yes or no to the plans presented to them. There was apparently no planning half-way house that the Government could opt for. Therefore, having given the legal planning permission for 15 million passengers per annum throughput, this device is needed to give the House the power to limit the number of passengers per annum to 7 million or 8 million. That is welcomed by my constituents and I trust that it is welcomed generally in the House.
Mr. Alfred Morris: The hon. Member has played a distinguished part in this long-running debate on the expansion of Stansted. He has talked about size, but how does he feel about the Government's ultimate objective of increasing the number of passengers through the airport to 25 million per year?
Mr. Haselhurst: It is not fair to suggest that the Government have an ultimate objective of increasing the number of passengers through Stansted airport to 25 million per annum. All that has been agreed to date is that planning permission exists for 15 million passengers per annum. The House will determine whether it proceeds beyond 7 million or 8 million passengers per annum. Any question of Stansted increasing to 25 million passengers, Gatwick increasing beyond 25 million or Heathrow
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increasing beyond the present 38 million or 40 million passengers will be debated in the wider context of airports generally. The Government do not have a stated policy on increasing passenger numbers but recognise that perhaps they will need to determine where further capacity is located. That would be a very wide debate.
I ask my hon. Friend to elaborate on the figure of 78,000 air traffic movements. When Gatwick reached approximately 8 million passengers per annum about eight years ago, that involved slightly over 100,000 ATMs. One accepts that some allowance must be made for increased load factors in the imervening years, and therefore is plausible that the figure of 78,000 equates with 7 million to 8 million per annum.
However, I notice that the press notice published by the Department, to which the hon. Gentleman for West Bromwich, East referred, says that the order would apply to about 16,000 movements per annum at Stansted at present. If one looks at the mathematics in another way, if that figure of 16,000 is correct now and if the present figure of approximately 550,000 passengers per annum is to be multiplied by only five, that would not take the figure very near to 7 million to 8 million passengers per annum. There is clearly much guesswork, and many alternative theories can be offered, in arriving at that figure of 78,000.
That difference between Gatwick in 1979, from over 100,000 down to 78,000, has interesting implications—I do not wish to cause palpitations to my hon. and learned Friend the Member for Feltham and Heston (Mr. Ground)—not least for the capacity of the terminals at Heathrow, if fewer movements are required to carry a larger number of people. We must look at this carefully. I accept that an honest attempt has been made on the breakdown of the figures to produce the figure of 78,000, but how will it work in practice? This is an untried device and the airport operators may be concerned if the calculations that have been made, albeit with full input from themselves, prove, in the event, to be wide of the mark.
One could envisage a situation arising within the course of the 12 months, when, after a particularly busy burst of traffic, which may be of rather small aircraft with low passenger load factors, pressure suddenly builds up and one runs out of movements. How often will my hon. Friend have to come back to the House to seek an amendment to this statutory instrument in order to deal with an unfortunate failure to predict the exact pattern of the build-up of development at Stansted?
We must be fairly cautious about this instrument. It is untried and untested and may lead to some difficulties in practice. The variables are considerable, as my hon. Friend has been honest enough to admit. I must tell the hon. Member for West Bromwich, East that, if, instead of fixing a figure for the intended maximum throughput at Stansted, a smaller figure should be chosen on a graduated basis, it would only compound the difficulties because the more one admits that the variables are suspect, the more trouble one would be it. If my hon. Friend came to the House and suggested a limit of only 20,000 or 25,000, we would soon be in considerable trouble. I understand the hon. Gentlemen's point, but that is not realistic. One must go for the maximum figure, as my hon. Friend has done, as long as one accepts that it may not be perfectly right. None of us can be sure how air traffic will build up. The

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House may be asked to amend this statutory instrument ahead of the time when it is asked to consider it in the light of the expansion of Stansted terminal, if that time comes.
The Government have decided to exclude general aviation movements from the calculation. I realise that the Government still have the power to include general aviation in the order if they wish, but have chosen not to do so. It is worrying to my constituents that general avaiation is not counted, particularly in the light of the obvious interest of Stansted Airport Ltd. in attracting its own good share of such general aviation business that is going. My constituents' fears in that respect may be exaggerated. I say that with some humility. General aviation movements tend to be of quieter aircraft which do not operate at anti-social hours, and while at the moment they represent a fairly significant proportion of the total number of movements at Stansted, I recognise that that proportion is likely to decline in future.
Nevertheless, I hope that my hon. Friend will give an undertaking to look at the position. It may be helpful and reassuring to people living in the area to have an early idea of the Government's proposals regarding noise limitation and sound-proofing schemes. It may be through that avenue that one can provide the environmental protection that would cover general aviation movements rather than through the mechanism of the statutory instrument that we are discussing. I hope that my hon. Friend will consider that and realise that to some people aircraft movements are still aircraft movements even if they are not ATMs in the technical sense that we are discussing.
I appreciate the indulgence of the House while I have been making my points. If and when the time comes that the House is asked to consider raising the limit from 78,000, I hope that it will be recognised that that should not be confined to an hour-and-a-half's debate on a statutory instrument after 10 o'clock. If we reach that point, we shall be discussing the wider implications of Britain's airport policy and many hon. Members will wish to discuss that. I hope that my hon. Friend will ensure that my right hon. Friend the Leader of the House will bear in mind the desire of hon. Members on both sides of the House from wide geographical areas to contribute to such a debate and that would not be possible in a debate such as we are having tonight. Having said that, I thank my hon. Friend the Minister for the prompt manner in which the Government's promise has been fulfilled. I hope that the Minister's calculations are proved to be right in practice and that we can underline the protection and limitation for my constituents that the Government have promised all along.
10.45 pm
Mr. James Wallace: The hon. Member for Saffron Walden (Mr. Haselhurst) said that the order is the only way in which the House can influence, restrict or have some control over future developments at Stansted airport. On that basis, we should consider just how effective this order is. In previous debates on airports, during debates on airports legislation and during more general debates on airport policy, my hon. Friend the Member for Isle of Wight (Mr. Ross) has said that the appropriate level of passenger throughput at Stansted would be 5 million. The throughput implicit in the level of ATMs suggested in the order is between 7 million and 8
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million. That exceeds my hon. Friend's figure. However, the figure in the order is substantially—almost 50 per cent. — lower than the approved planning permission figure that Parliament might be expected to approve in future to allow for such expansion. It is therefore important that we should have this opportunity to debate whether such expansion is desirable.
We must first consider whether such expansion is environmentally desirable. That matter must be of considerable interest to the constituents of the hon. Member for Saffron Walden. They have to bear the brunt of the aircraft noise generated by 78,000 movements in addition to the other movements not included in that figure. I agree with the hon. Member for Saffron Walden about the need to look for other ways — apart from limiting aircraft movements—to minimise the environmental impact on those who have to live under the flight paths into and out of Stansted and other airports.
My second point was hinted at by the hon. Member for West Bromwich, East (Mr. Snape), who said that we must consider how the aircraft movements and the passengers involved have a consequence for the general development of airport policy, not least for the importance that we and the hon. Member for West Bromwich, East attach to the development of airports in the regions in England and Scotland. Manchester airport has already been singled out as having considerable potential for attracting more traffic, and it has generated considerable support for its case for more traffic. It would be surprising if I did not put in a plea for the considerable future role that many Scottish airports have for international flights and in that regard I want to mention particularly the further marketing and development of Prestwick airport.
It is important that Parliament should have this opportunity to put some control over future developments at Stansted because, so many other consequences will follow from those developments with general regard to airport policy. It would also be fair to ask to what extent the order is effective in achieving that objective. The hon. Member for Saffron Walden rightly explained that there are a number of possible variables in this matter. The Minister referred to a number of ways in which the 78,000 air traffic movements relate to the level of expected passenger throughput.
What level of future development of domestic passenger transport does the Minister foresee for Stansted? It has often been suggested that, if Stansted airport is to secure its long-term future, one of our domestic airlines should have a base at the airport. Does the Minister share that view? Domestic airlines have fewer passengers, and if the expected passenger throughput is to be reached in the longer term, that would imply many more air traffic movements. That would obviously have environmental consequences, so it is something on which we would wish to have his views.
Mr. Haselhurst: One ought to put on record the fact that Air UK is a domestic airline that is trying to make Stansted its heart, and while at the moment its services are undertaken by fairly small-sized aircraft, it is expanding its network, so that point is met.
Mr. Wallace: I was just echoing a view that has been expressed in a number of places, that it is important for the development of the airport that at least one of our airlines—Air UK is not an insignificant one; it provides

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a very valuable service in many parts of the United Kingdom—should have an important part at Stansted. It is a concern that has been expressed.
Dan-Air was very successful in the campaign that it mounted 12 months or more ago to maintain its service from Heathrow, because it felt that its services from other parts of the country—from Inverness airport, for the business and commercial interests of the highlands and islands of Scotland — should form the link with Heathrow and the important function of interlining that Heathrow provides. It would be a very serious loss if, through the auspices of the Civil Aviation Authority, some of these services were routed to other airports and that valuable interlining service was lost.
Dan-Air rightly won the argument. If that is a consideration, one may find that domestic services are not a common feature at Stansted and that, its growth area might be in charter traffic, with a much higher throughput of passengers. With 78,000 air traffic movements, if the number of passengers per movement was higher, would we then reach the situation where the Government were overshooting the current cut-off point of 7 million to 8 million passengers, with no further need to come back for an increase?
We do not know the answers to those questions, because there are so may variables, but, bearing in mind the importance attached to the procedure within the 1986 Act to give Parliament some control, we would like to hear more from the Minister. Without that, one could defeat one object of that Act — an object to which many speakers in the debate have subscribed—which was that Parliament should have some further control, because of the wider implications for other airports in the United Kingdom. If the Minister feels that there is a potential for the passenger ceiling to be significantly exceeded within 78,000 movements, that is something that hon. Members would, rightly, wish to know about, because it would have longer-term consequences for influence of the House on future airports policy.
10.52 pm
Mr. Fred Silvester: My hon. Friend said that the order was predictable and unsurprising, but perhaps the speech of the hon. Member for West Bromwich, East (Mr. Snape) was even more predictable and unsurprising. He took us through the letter from the North of England Regional Consortium and demonstrated that, even though he is very good at spreading these things out, it was just as thin an argument when he spoke about it as it is in the letter.
I do, however, agree with the hon. Gentleman on one point. It is a pity, but of no great significance in the event, that consultations were not wider and it would have been tactful if they had been. A lot of people put a lot of effort into the development of Stansted and made many representations. It would have been sensible to make the Government inquiries wider.
In effect, it does not seem to have made much difference because, as regards Manchester airport and the regional airports, the central issue is whether or not the limit imposed by this order is too large for the comfort of the regional airports. The consortium has not suggested in its letter or briefing that 78,000 ATMs are dangerous to the development of those airports. We are suggesting an order which will cover the period into the mid-1990s. Unlike the hon. Member for West Bromwich, East, I pay tribute to
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the Government for making great efforts to develop the regional airports, especially Manchester, and that should be put on the record. Moreover, they continue to do so.
The order is part of a package of measures put together at the time of approval of Stansted and designed to protect the interests of regional airports and to develop them. The order meets that promise and I thank the Government for properly and promptly introducing an order which meets that promise.
To take up the point of the hon. Member for Orkney and Shetland (Mr. Wallace), the order provides the House with a new and greater opportunity to control this area than it has ever had before. As I understand it, the control of the size of Stansted or any other airport does not come before the House, but the order and further additions to it give us an opportunity to keep some control over what happens in future.
The Government are to be congratulated on introducing the order. We shall keep a close eye on this and I make it perfectly clear to my hon. Friend the Minister that if there is any attempt to go beyond the 7 million to 8 million passengers on which the order is based, he had better not try to do so by an order late at night.
10.56 pm
Mr. Robert McCrindle: My constituency interest is considerably less acute than that of my hon. Friend the Member for Saffron Walden (Mr. Haselhurst)—
Mr. Bowen Wells: And that of his hon. Friend the Member for Hertford and Stortford.
Mr. McCrindle: —and no doubt that of my hon. Friend the Member for Hertford and Stortford (Mr. Wells). The House will know that in the northern parts of my constituency a good deal of apprehension has been expressed about the prospective development of Stansted. Indeed, if one is honest, one has to say that the dissipation of that apprehension is a relatively slow process.
I seek the indulgence of the House for a brief period to express my approval of the order, but also to express some concern about the likely progress of this matter as we begin to move towards the true expansion of Stansted airport.
I approve of the order for two reasons. First, it confirms Government policy on the expansion of Stansted. Secondly, and more important, it reminds us that Stansted is not, and has no prospect of becoming in the immediate future, the full-blown, third London airport, for which many wished and for which pressure continues to exist.
I can say with some certainty that most of my constituents principally concerned with Stansted are coming to terms with some expansion, perhaps of the order proposed this evening, but the quickest way to recreate their suspicion and concern would be to move too quickly. Therefore, I draw to the attention of the House the proposals of a pressure group, the National Policy for Britain's Airports. It is perfectly understandable that this pressure group, comprising as it does local authorities which tend to repose particularly in areas immediately around Heathrow and Gatwick airports, should take the view that Stansted is the principal airport for the expansion of traffic in the London area. It is not expansion of the order that we are considering this evening, nor expansion up to 15 million, which would be the second

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tranche of what may be called existing Government policy, but expansion to enable Stansted to handle 25 million passengers by the turn of the century.
I think that it would be appropriate for me to utter a word of warning to people such as the members of the National Policy for Britain's Airports, remembering, of course, how easy it is to suggest that airport expansion should take place in someone else's backyard, and that Stansted is not the only possible site for further runway expansion. I think that it would also be appropriate for me to remind that body that the maximum degree of expansion to which we are agreeing to this evening is 7 million to 8 million passengers. Even if we go forward to the second tranche, subject to parliamentary approval, we shall then be in the region of 15 million passengers. To envisage the possibility of 25 million to 30 million passengers is to contemplate airport developments around London to an extent that the Government have not yet undertaken. It really would be wise for bodies such as the National Policy for Britain's Airports to bear that very firmly in mind.
It may be that by 1995 the runway capacity in the London area will be inadequate, and a good case can be made for assuming that that will be so, but to assume the enormous growth at Stansted to which our attention has recently been drawn, involving not only 25 million passengers per annum but a second terminal, and quite possibly a second runway, is way outside the range of existing Government policy. To assume that this would be the easy solution to the problem of the expansion of airports in the London area would be quite wrong.
I do not deny that additional runway capacity may well become necessary, but I wonder whether sufficient consideration has been given to the possibility that instead of immediately assuming that that means that we must have an additional runway at Gatwick, Stansted or Heathrow — recognising, of course, the difficulty at Gatwick — there might be an argument along the following lines. If air traffic control in the United States, particularly around the Chicago and Los Angeles airports, can have an interval between landings and take-offs considerably shorter than that necessary around the London airports, consideration should be given to whether the Civil Aviation Authority could, with perfect safety, be persuaded to approve of rather more landings and take-offs at these London airports, so as to prolong the period at the end of which no doubt we would have to consider the possibility of further runway capacity around the London area.
It seems to me that those are considerations that should at least be given some thought, and I hope that the Minister will be prepared to turn his attention to that and possibly even say something about it when he responds to the debate this evening.
In essence, I rise this evening to express approval of the gradual expansion of Stansted. I have always accepted that there is a case for such expansion, but I believe that to go too far and too fast would be to risk reversing the growing approval, or at least acceptance, of this development, which I sense is now the state of play in the area immediately around Stansted.
I would very much welcome the development of more scheduled services from Stansted. If we are to have greater utilisation of that airport, I should like to think that many
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of my constituents would be able to use scheduled services from Stansted when travelling on business or otherwise, rather than, as is necessary at the moment, have to go to Heathrow or Gatwick. I am bound to say, however, that so far there is singularly little indication that scheduled services are developing at Stansted to anything like the degree that some of us might wish. I recognise that perhaps the most likely immediate use of Stansted is increasingly for charters. This may be necessitated by the growing difficulty of finding spots for charter airlines at Gatwick.
For whatever reason Stansted is expanded, I believe that there has to be a recognition of the fact that we can move only as far and as fast as will enable us to take local opinion with us. To go at this stage much beyond the proposal that is before the House in the order would he, in my opinion, to risk once again building up that state of opposition which my hon. Friends the Members for Saffron Walden and for Hertford and Stortford will readily recall was one of the principal difficulties during the many years in which Stansted was a major heartache for all three of us in relation to our constituency opinion.
The order is acceptable in that it is a reaffirmation of Government policy as we know it to be. If we can adhere to that parameter, we can carry public opinion with us. However, if the Government were tempted to go further and faster, we could open up the opposition which it has taken many of us a good number of years to play down, at least to some degree. I hope that my hon. Friend the Minister will say that the order sets out the extent to which we are able and interested in proceeding at present, and that if we plan to proceed further as time passes that movement will be subject to the procedures within the House as laid down when the Government's policy on Stansted was intimated some time ago.
11.6 pm
Mr. Bowen Wells: I welcome the order because it keeps a promise that the Government made to those who live around Stansted to limit the number of passengers who use the airport to 8 million per annum. It is, as my hon. Friend the Member for Saffron Walden (Mr. Haselhurst) has said, a feeble instrument, especially when it falls to be considered in an hour and a half's debate after 10 o'clock. I ask the Minister for an undertaking that any future increase of the limit will receive a full-scale debate in the House in prime time. That would be in line with the nature of the promise that the Minister and the Government gave to those whom I represent. Anything less would be a subterfuge, because the promise was that the Government would limit the number of passengers using Stansted to 8 million a year in the first phase, and that that phase would not be exceeded until and unless the House had given its approval. In my view that promise would be fulfilled only in the light of a full debate. That would give the opportunity for those who represent other airport areas, including Manchester, to raise the contentious argument why Stansted should be used for chartered aircraft. There is no reason why chartered aircraft movements could not take place at Birmingham, Manchester or Scottish airports. There is no need to fill Stansted with such movements.
I remind the Minister of other promises that have been given to the House on the expansion of Stansted. First, the

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Government undertook that there would be no cross-subsidisation of Stansted by other London airports such as Heathrow and Gatwick. It seems that the promise has not yet been fulfilled because cross-subsidisation can take place under the umbrella of the British Airports Authority, which is to be privatised in July. In other words, Stansted will continue to lose money for many years hence. I am not certain that it will be making money even when it has 8 million passengers per annum. When it makes losses, they will have to be met by the profits declared by the authority's umbrella holding company. Thus cross-subsidisation will, in my view, be taking place. I should like an assurance from my hon. Friend the Minister that he will fulfill the Government's promise by some means.
We in Bishop Stortford have been promised that the Minister will limit the number of houses generated by the airport's expansion to 8 million passengers per annum to a proportion of that which was forecast in the public inquiry, which preceded the announcement of the Government's policy. Already Bishop Stortford has received applications from developers for more than 15,000 houses, which would double the size of the town within months of the new policy outlined by the Government. We are having extreme difficulty in resisting the pressure for development. Indeed, the Department of Environment is considering the means by which the Government will be enabled to fulfil their promise of a green belt round Bishop Stortford. That is the only means by which we could control the housing development resulting from the expansion in this order. So there are two more promises which I am looking to the Government to fulfil in the near future.
I am grateful that the Government have kept their pledge. I pay tribute to my hon. Friend the Member for Saffron Walden, who has put much effort into making certain that the Government did keep their promise both in the Civil Aviation Bill that did not become law and in the Airports Act 1986. So I ask the Minister to ensure that his colleagues address these difficult questions, continue to fulfil the promises they have made and honour their good faith to the people of Bishop Stortford and my constituency.
11.11 pm
Mr. Alistair Burt: This is a comparatively small country. Consequently, the activities of Stansted or any other south-eastern airport have an impact far beyond their own immediate environment. That is why the development and growth of Stansted up to and including this order have been of interest to, and have led to controversy for, northern Members and their constituents. My constituency of Bury, North is no exception.
I speak, therefore, as a man of Manchester airport, proud, like colleagues on both sides of the House, of the achievements of that airport over the past few years in enormous growth, more routes and more facilities. We have just seen the completion of a marvellous new hotel and the airport has a continually growing number of passengers. We all pay tribute to the excellent management of Mr. Gill Thompson and his team who perform such wonderful feats against a difficult and restrictive background such as the nonsense of international air travel, hedged around as it is by so many agreements, preventing the free commercial enterprise and development of airports and of airlines and their routes.
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What effect, therefore, do restrictions and limitations on air traffic movements have beyond Stansted for airports such as Manchester? In so far as air traffic is geographically mobile, the limit at Stansted is to be welcomed by all who support regional airports, including Manchester. There is some such air traffic, but not much. Of much greater significance is the Government's responsible and supportive attitude to regional airports summed up in the most recent White Paper, about which Mr. Gill Thompson said that it put regional airport development policy where it should have been under the Labour Government when they published their White Paper. The order stems specifically from that policy. Therefore, the north will be grateful to the extent that its case has been recognised. To the extent that the limit acknowledges that, its voice has been heard.
But much more remains to be done, I caution the Minister that Manchester continues to watch carefully Stansted's growth and the performance of the Government and BAA. I said earlier that there was some mobility in air traffic movement, but not much. Most of the mobility is exercised by my poor constituents who have to climb into cars or buses to travel to different parts of the country to get flights that they would like to get from Manchester. That is the mobility that concerns them most. We used to see much more of that than we do today. The developments at Manchester under the general umbrella of the Government's regional policy have helped to improve the position. We are all most grateful for that.
That will change, not because of any relationship with the Government but because of the changes that are already taking place in the north. I believe that people will see the south-east for what it is—over-congested, overdeveloped and over-priced—and will realise that there is more to the north of England than they ever thought. As they move their businesses north, they will find a perfect vehicle for their international transactions on their doorstep, and in Manchester airport they will find the place that they need to help them to expand their businesses further. Those factors will determine the growth of regional airports in the future. I hope that we will find that the fears of Conservative Members about the expansion of Stansted and future orders will not need to be realised.
Mr. Alfred Morris: The hon. Member has spoken with high regard for Manchester airport. Does he not agree that the essential point is that the Government, by allowing a massive expansion of Stansted airport, are choosing the prosperous south-east against the claims of other regions, particularly those of the north-west?
Mr. Burt: I do not accept the hon. Gentleman's argument. As I mentioned earlier, there is some geographically mobile air transport, but generally not very much. I do not believe that the argument that the southeast is suffering from a lack of air capacity and that therefore Stansted should not have been developed because traffic would have moved elsewhere outweighs the arguments for Stansted.
Our difficulty in the north is that at the moment many people want their businesses located in the south and need the extra air capacity of the south. Were that not so, it would please the right hon. Member for Manchester, Wythenshawe (Mr. Morris) and myself, but it is a fact of

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life and to have denied them that legitimate expansion and to have tried to hope or pretend that air traffic would have come to Manchester would be wrong.
I know that my hon. Friends are anxious to proclaim that we should tell people about the advantages of the north so that there will be a natural growth. As I was saying before the right hon. Gentleman intervened, in future, that natural growth will be stimulated by what is happening in the north of England. Thus, the fears of my hon. Friends about the expansion of Stansted and the possibility of orders coming to the south and raising air traffic movements will not be realised; the north will have grown sufficiently to counter any thought that Stansted must develop over-much. The answer to the problems of the north lies not in what is happening elsewhere but in a genuine boost to what is occurring in the north and a determination to tell people about it.
The future of Manchester airport is bright, not because of the Government or any control but because it is the right place and it will develop at the right time with the right people at the helm.
11.18 pm
Mr. David Mitchell: The hon. Member for West Bromwich, East (Mr. Snape) asked me about the extent of consultation. In addition to the Civil Aviation Authority and the airport operators concerned, the Secretary of State consulted all aircraft operators that are presently flying out of Stansted and all the local authorities that are affected by the development of Stansted. Altogether, some 31 bodies were consulted.
The hon. Member for West Bromwich, East seemed attracted by the argument that we should seek to force users to go further north by imposing an artificially low limitation. I shall come back to that argument, if that is what the hon. Gentleman was trying to say, because I do not believe that it is in the interests of Manchester or anywhere else that operators should be driven there rather than attracted.
Mr. Snape: That is not what I was implying. I agree whole-heartedly that operators should be attracted rather than driven to airports such as Manchester or Birmingham. I was seeking to make a point that was made rather effectively by the hon. Member for Bury, North (Mr. Burt) which is that all too often, provincial passengers are driven to London because of the Government's general airports policy. I was seeking to redress that balance. I also made a point about consultation, which did not refer to operators of provincial airports. I hope that, in the spirit in which I made my speech, the Minister and his Department will give some consideration to seeing that those authorities are consulted in future.
Mr. Mitchell: The hon. Gentleman is making a valid point when he speaks about the extent of consultation. It should stretch somewhat more widely and that is a fact that I have taken on board.
The hon. Gentleman also asked about not including other movements than passengers; this point was made rather more extensively by my hon. Friend the Member for Saffron Walden (Mr. Haselhurst). I will reply to that point when I deal with his speech.
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The hon. Member for Orkney and Shetland (Mr. Wallace) asked whether one of our domestic airlines would be based at Stansted, and whether this was desirable. I understand that Air UK is developing there, and I hope that it will be successful in doing so. He also asked me what percentage of air traffic movements were domestic flights. The figure is approximately 10 per cent. The Government showed their belief in regional aviation when they decided to reject the CAA advice last year to displace some domestic regional flights from Heathrow, including the Inverness route. In calculating the limit, we took account of the growth of domestic regional services and we found the limit of 78,000 insensitive to especially rapid growth in such services. I hope that I have reassured the hon. Gentleman.
The right hon. Member for Manchester, Wythenshawe (Mr. Morris) made a number of interjections, and I thought, if he will forgive me for saying so, that he was being slightly mischievous in suggesting that there was a plan to put in a 25 million passenger movement per annum limitation before long. The fact is that there is a 15 million passengers per annum limitation and we should recognise that.
Mr. Alfred Morris: I appreciate that there is a 15 million passengers a year limitation. Is it not the ultimate objective to go to 25 million passengers a year?
Mr. Mitchell: Such things are so far off that I doubt whether we shall be sitting across the Chamber arguing the toss when they become reality. It is not realistic to try to forecast that far ahead at what point there will be any need to exceed even the 8 million passengers that we expect to get from the 78,000 ATMs limitation. We then get the further stage of limitation imposed by the initial planning consent for 15 million passengers a year. The right hon. Gentleman is, it is not wholly unreasonable to say, being a bit mischievous.
Mr. Alfred Morris: According to the inspector's report is it not totally reasonable to suspect that the ultimate will be 25 million passengers a year?
Mr. Mitchell: I believe that it is unreasonable for the right hon. Gentleman to talk about the ultimate when we are talking today about a limitation of 7 million to 8 million passengers and the prospect, in the far future, of a total limitation of 15 million. The right hon. Gentleman and I will be older and have greyer hair before that latter limitation is reached.
My hon. Friend the Member for Manchester, Withington (Mr. Silvester) called for wider consultation. I believe that that is a valid point, and we shall take it on board. My hon. Friend recorded the extent of Government direct encouragement to regional airports, especially Manchester. It may be helpful if I demonstrate the validity of that argument.
Since 1979, the Government have authorised no less than £220 million of capital expenditure at local authority airports. That should be compared with the previous Labour Government's authorisation of £16 million. The contrast between those figures gives a pretty good definition of the extent to which this Government have supported the regional airports when compared to the support offered by the previous Labour Government. My hon. Friend asked whether this order is unique in that it gives the House of Commons an on-going control. I understand that my hon. Friend's assumption is correct.

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My hon. Friend the Member for Bury, North recognised that the Government have remained true to their support for the regional airports. The growth of Manchester international airport is a success story. Manchester is attracting more traffic because of its location and its services. Those features, rather than the refusal to sanction growth elsewhere, are the determinants of growth.
My hon. Friend the Member for Hertford and Stortford (Mr. Wells) supported the request made by my hon. Friend the Member for Saffron Walden for a full debate if there is any change in the position and there comes a point when we move nearer the figure of 15 million passengers per year; consent for that figure has initially been given. The time for debates in the House is a matter for the Leader of the House and the usual channels. I am sure that, in years hence, my hon. Friend the Member for Hertford and Stortford will be sitting in his place at Business questions—perhaps a little older and with less hair—to ask the Leader of the House to ensure that he gets the time that he want for a debate.
My hon. Friend the Member for Hertford and Stortford asked for an assurance that the no-subsidisation undertaking will he carried out. Cross-subsidy is not entirely outlawed. Stansted, though a sound business in the long term, is expected to make losses in the early stages of its capital development parallel to the regional airports. The key point is that the Civil Aviation Authority has powers under the Airports Act 1986 to prevent any cross-subsidy leading to pricing policies that harm or are intended to harm another airport's business—predators pricing. In addition, the accounts conditions applying to British Airports Authority airports under the Act require any type of cross-subsidy to be made transparent in the airport's company accounts.
Mr. Snape: The Minister will be aware that what he has just said has particular significance for airport development. In some ways his remarks conflict with the assurances that were given during the passage of the Airports Act 1986. Although it is rather late in the day to reconsider this matter, we, and I suspect some Conservative Members, will wish to study carefully the Minister's remarks tonight to judge whether they equate or conflict with the specific pledges given by Ministers during the passage of the Airports Act.
Mr. Mitchell: I can assure the hon. Gentleman that I phrased my remarks carefully. He will find that there is no conflict between what I have said and what my colleagues have said at the appropriate times.
My hon. Friend the Member for Hertford and Stortford raised the matter of housing. I understand his point, but it is more a matter for the planning authorities who have control over these matters than it is for the Department of Transport. My hon. Friend the Member for Saffron Walden welcomed the instrument and recognised that it was the fulfilment of a Government promise. He asked me a number of penetrating questions and I shall do my best to answer them.
First, my hon. Friend asked how it was that at Gatwick there were 102,000 air traffic movements to provide for 7 million to 8 million passengers a year, while at Stansted the same number of passengers appear to be provided for by only 78,000 air traffic movements. He asked if I could explain that quite remarkable difference, and I can. At the
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time when Gatwick was developing some years ago, aircraft were much smaller than they are now. Therefore, more aircraft were required to carry the same number of passengers. The larger aircraft in service today compared to the aircraft in use at the opening of Gatwick are a major reason for the difference. At Stansted, more passengers can be carried per aircraft.
The other significant factor is that there was a helicopter link between Gatwick and Heathrow. That helicopter counted as an air traffic movement, but it might have carried only four or five people at a time. Therefore, it accounted for a significant number of air traffic movements for very few people. I hope that that clarification helps my hon. Friend.
My hon. Friend also asked me what about what would happen if, during the course of a year, it suddenly appeared that the number of air traffic movements will exceed the limitation before the year was out. In that case I am quite sure that I or my successors in the Department of Transport will find the operator from Stansted knocking on the door and asking for parliamentary time for the passage of an order similar to the one that we are debating.
My hon. Friend asked whether the exclusion of general aviation would leave a big loophole in the system. I can tell him that that will not happen. Last year there were 4,337 all-cargo movements at Stansted, including mail flights, but of those only 584, or less than 14 per cent.. were jet aircraft. The vast majcrity. over 86 per cent., were small and relatively quiet aircraft. Therefore, he need not feel unduly worried about that point. I give him the undertaking that I will, as he asked, keep this matter under review.
My hon. Friend asked about noise limitation. In the general sense, noise standards have recently been considerably developed by the International Civil Aviation Organisation, in which the United Kingdom plays a leading role. From 1 January 1986, British registered subsonic jets unable to meet basic standards, that is to say, non-noise-certified aircraft, have been banned from United Kingdom airports. From 1 January 1988, foreign registered subsonic jets unable to meet the basic noise standards will also be banned. That means that the noisiest aircraft will not be around; that will be a great relief to people living in the vicinity of our airports.
My hon. Friend's next question was about insulation. He is perceptively feeling around the area of ways in which his constituents may be affected by the increasing use of the airport. A noise insulation grant scheme will he in place by the time the passenger throughput reaches 2 million per year, and that is a long way down on the limitation that we have before us. Noise limits will be fixed for aircraft departing by clay and by night, the noise level standards for night departures will be lower and the noise levels will be monitored. The new night restrictions for Stansted will reflect the outcome of the present review of night restrictions at Heathrow and Gatwick, taking into account local circumstances.
Hon. Members asked about a full day's debate, should a revision of this instrument be necessary. My answer must be the answer I gave earlier to another question: that hon. Members are likely to be a little greyer, perhaps a lot greyer, by the time that situation arises.
Mr. Snape: If greyness of hair is any criterion in these matters, may I ask the Minister to say how many of these instruments he has dealt with over the years?
Mr. Mitchell: The hon. Gentleman need not feel any anxiety in that direction. Perhaps a little thinning may be the cause of his concern.
My hon. Friend the Member for Brentwood and Ongar (Mr. McCrindle) raised a number of wider and important issues about the distribution of scheduled services. I will draw his comments to the attention of the Under-Secretary with responsibility for aviation and ask him to write to my hon. Friend on the subject.
I agree strongly with my hon. Friend about the need to carry local opinion, and I trust that the order succeeds in doing that. It fulfils promises made to the people in the Stansted area to impose a strict limit, and I hope that my hon. Friend will feel content about that.
We have sought to fulfil the undertakings and promises given at earlier stages when this matter was very controversial, and we have done that in two ways. The first is by a condition in the planning consent that the terminal should be of such a size that it could handle only 7 million to 8 million passengers a year. The second is by the ATM limit, as a further reassurance to local residents and to the House. For those reasons, I hope the House will now feel able to agree to the order.
Question put and agreed to,
Resolved,
That the draft Stansted Airport Aircraft Movement Limit Order 1987, which was laid before this House on 7th April, be approved.

PETITION

  Whales
  Lord James Douglas-Hamilton: I beg to present a petition for a worldwide limit on the number of whales being killed to prevent them from becoming extinct.
  The petition comes from nine and 10-year-old schoolchildren of Davidson's Mains primary school and it is the petition of Michael Williams on behalf of the school. It has been signed by 240 schoolchildren.
  They are horrified by the brutality associated with commercial whaling and feel that the present protection afforded to whales does not yet go far enough.
  This is a commendable cause, and I am sending copies of the petition to the ambassadors of Japan, the Soviet Union and Norway, so that they may give it serious consideration.
  I am glad to be associated with this enlightened conservationist campaign, which I wish every success.
  To lie upon the table.

Senior Colman Engineering Ltd., Cheshire
Motion made, and Question proposed, That this House do now adjourn.—[Mr. Ryder.]
Mr. Ken Eastham: I am grateful for this opportunity to refer to the Senior Colman Engineering company in Sale, Manchester, which is not a large engineering firm. While this dispute involves only 112 workers, those people are important, as is the issue involved. Indeed, the issue is as important as that facing any large factory, such as a Ford plant in the motor car industry.
First and foremost, I will explain my involvement. I am the secretary of the Amalgamated Engineering Union parliamentary A group. I have been requested by our national secretary and by the district committee to expose some of the disgraceful details appertaining to this district.
The dispute commenced on 16 January and it developed into a serious confrontation because of the sheer arrogance and unreasonableness of the company. Also, I should add, the company did not follow the agreed procedure that is laid down. The Government often tell workers to act responsibly but we very rarely hear them telling managements to act responsibly and to behave themselves in respect of the terms and conditions of their workers. It is interesting to be talking about industrial relations because I read a report in The Times dated 23 April about a speech by Lord Young on industrial relations in which it was said:
"the Government was on the right lines with its industrial relations policy …
He told a CBI conference in London that no Government could legislate good industrial relations into being but since 1980 there had been extensive consultation and a step-by-step approach towards a legal framework which, he said, was fair, realistic and suitable for both the economy and society.
Lord Young said proposals in the Green Paper 'Trade Unions and their Members' shared a common central theme: Promotion and protection of the democratic rights of trade unionists as Members of their trade unions."
This policy falls far short when we examine the circumstances of this dispute. All kinds of measures to control trade unions are advocated by Government Ministers but it is noticeable that there are no penalties when we experience what I term rotten companies. We often talk about training courses and I think that it would be money well spent if we introduced training courses for good company management, because it is recognised that there are failures in this area.
The dispute arose because the management victimised four workers. There was an immediate factory mass meeting. Arising from the meeting a secret ballot was taken at which 110 workers voted for immediate strike action and two workers voted against. The Government are supposed to favour secret ballots and responsible trade unions. I think the Minister would agree that this was an overwhelming determination that there was a grievance. An AEU official went to the company and appealed for some reasonableness and asked it to observe agreed procedures. But, following discussions, he finally registered a failure to agree.
There have been further attempts to conciliate in this matter and my right hon. Friend the Member for Salford, East (Mr. Orme), who is the chairman of the AEU parliamentary group, wrote two letters. He wrote to Senior Colman and the Paymaster General. From the management of Senior Colman there was a rather curt reply, little better than one paragraph, which said:
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"It was kind of you to write to offer your assistance in trying to bring about an end to the dispute in Sale. The matter is being handled by the local management and I have passed your letter on to them."
That is the concern and response from the management.
The Paymaster General also replied to my right hon. Friend. I shall take one or two brief extracts from the letter. He referred to the Advisory, Conciliation and Arbitration Service. He said:
"ACAS has been in touch with both parties and remains available to help them reach a settlement."
He went on to talk about jobcentres. I hope that the Minister will take note of one paragraph in which the Paymaster General said that Jobcentres
"must … be seen to be neutral … and must not take action that might make matters worse."
He went on to say that on 22 January the employer had informed the jobcentre that the strikers had been dismissed and that the AEU district secretary had informed the jobcentre that the dispute was declared official. The letter goes on to admit that a Mr. Yendley, the regional manager for the employment service in the north-west, decided only four days later, on 26 January, to resume advertisement of the vacancies.
It is our contention that the Manpower Services Commission should not in any way act on behalf of companies to recruit scab labour. I am sure that there was a contradiction when the Paymaster General said that jobcentres must remain neutral. If they were to remain neutral they would not have taken any part in the recruiting of labour.
I shall now deal with the real dirty work that has been carried out by the company. I think that hon. Members will say that it is practically beyond belief in the 20th century. Four of the strikers happen to be deaf and dumb. The management arrogantly proceeded to attempt to intimidate them. They gave an ultimatum by telephone to the homes of those four handicapped people saying that unless they returned to work within one hour they would be sacked. It also told them that because of their disability they would probably never work again. In addition to that there is a management scoundrel who visited a home to see the wife of one of the dear and dumb strikers while he was on picket duty.
It is obvious that the management was trying to use the handicap as a weapon. In view of all that, I think that the management representative is worse than a scroundel; he is nothing less than a management leper. What about equal opportunities for the handicapped? If those people had been black or women they would have been able to take proceedings, and lines would have been imposed on the company. It appears that because they are handicapped there are no penalties that can be imposed on the company.
My right hon. Friend the Member for Manchester, Wythenshawe (Mr. Morris) reflected on that problem and said that he would try to introduce some legislation to encompass protection for such people. However, at the time the Government said that there was no need for any further legislation and that it was their belief that there should be a process of education and exhortation of the management to encourage it to behave in a responsible way. It has hardly been acting responsibly. It is obvious that we need legislation. In view of the management's conduct we should label all the products of Senior Colman Ltd. in Manchester with the words "industrial lepers",

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because that is what the firm and management are. They are prepared to go to any limit to intimidate the workers to go back to work.
It would be useful tonight for the Government to remind employers of some of their social responsibilities. I wonder how it is that companies from countries such as Japan can come over here and make a success of managing and co-operating with the work force, yet British employers—this employer is not isolated—can wreak havoc and go mad without any sanctions for pursuing ruthless policies. I ask the Minister whether he approves of this and whether the Government support it. I plead with the Minister to give an assurance that he will instruct the MSC not to interfere in a legitimate dispute which has arisen because of the sheer incompetence and arrogance of the management of this factory.
I ask the Minister to condemn the management for its conduct and to give a lead by requesting the company to go to ACAS. We, as trade unionists, encourage the workers to respond responsibly; to go to ACAS, get around the table and resolve this unnecessary and hurtful dispute which is a disgrace and is causing concern in the north-west. I assure the Minister that this dispute will not go away; it will fester for some time. The whole trade union movement in greater Manchester is appalled and up in arms about what is going on. The north-west is asking for some lead from the Minister. I appeal to the Minister to co-operate. If he will co-operate, we shall certainly co-operate in reaching a satisfactory resolution. I appeal to companies to introduce new thinking and new policies for resolving disputes between management and workers.
11.52 pm
Mr. Churchill rose—
Mr. Deputy Speaker (Sir Paul Dean): Does the hon. Gentleman have the agreement of the hon. Member for Manchester, Blackley (Mr. Eastham) to intervene in the debate?
Mr. Eastham: Yes.
Mr. Churchill: I am much obliged to the hon. Member for Manchester, Blackley (Mr. Eastham). The company in question is in my constituency. In this case, as in many others, there are two sides to the dispute. I am quoting from a document, which states:
"The factory became unionised three years ago and has maintained a stable workforce. The Company in its long history has never witnessed a strike. Never that is until now. It is with genuine regret that that record has now been blemished."
Mr. George Howarth: From what document is the hon. Gentleman quoting?
Mr. Churchill: I understand that it bears the stamp "AUEW Manchester".
My understanding is that the company decided that it was time to computerise its production records and, in consequence of that, it approached the senior shop stewards' committee and discussed its proposals for a new form of time sheet so that it would meet the requirements of the computer software. After several requests, the company dismissed four of its employees for misconduct — failure to comply with what it regarded as a
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reasonable instruction. Therefore, the employees went on strike and after three or four official warnings the strikers were dismissed.
Mr. Tony Lloyd: What was the instruction?
Mr. Churchill: The instruction was that they should complete the new time sheets instead of the old time sheets, not an onerous imposition. It is about time that the trade union movement, including that in the Manchester area, started living in the modern age of computers and working to co-operate with management to maximise production instead of objecting at every turn.
Mr. Lloyd rose—
Mr. Churchill: I am sorry, but I have been granted only a couple of minutes. The hon. Gentleman may catch your eye, Mr. Deputy Speaker.
The company then proceeded, having warned the strikers and given them official notice, to recruit a new labour force.
I do not accept the criticism of the hon. Member for Blackley of the MSC manager, Mr. Yendley —
Mr. Ron Brown: Will the hon. Gentleman give way?
Mr. Churchill: The hon. Member for Blackley had his full chance to deploy the union case. I would be obliged if the hon. Member for Edinburgh, Leith (Mr. Brown) would allow me to make what I hope will be only a brief intervention.
On 12 February the hon. Member for Blackley quoted a letter from the right hon. Member for Salford, East (Mr. Orme), which said that Mr. Yendley had been actively assisting the company—
Mr. George Howarth rose—
Mr. Churchill: The hon. Gentleman is not on the picket line now.
—in recruiting workers while an official dispute was taking place. However, my understanding is that once the dispute was made official no more recruiting took place. The union took a considerable time to make the dispute official and by that time the company had already recruited through the MSC.
Mr. Ron Brown rose—
Mr. Churchill: The hon. Member for Blackley referred to the four deaf and dumb employees, about whom great play has been made and who, it is said, were treated disgracefully. Let me quote from a letter from the mother of one of those deaf workers. I shall not identify her by name, but she said:
"I am writing on behalf of my son who is deaf…he left home at 6.45"—
this is once the strike had started and he wanted to attend the factory to keep his job—
"to pick up"—
his friend—
"on his motorbike to get to work but they could not get through. Thursday morning I got up at six o'clock to make him a flask of tea and a sandwich in case he couldn't get anything while at work. He left home at quarter to seven, as he said he was walking … but still didn't get in and was told to stop outside."
It is clear that at least that individual wanted to get to his place of work and it was the union picket that prevented him from doing so. When he was dismissed, the AUEW was responsible—[Interruption.]
Mr. Deputy Speaker: Order. There should be no sedentary interventions.
Mr. Churchill: The AUEW was responsible, and he did not lose his job of his own volition.
I hope that my hon. Friend the Minister, when he replies to the debate, will bear in mind that the account presented by the hon. Member for Blackley was very much an ex-parte affair. As he made clear, in the House he is a distinguished representative of the AUEW, and he is entitled to that. However, several members of the work force certainly wanted to attend for work, but were prevented from doing so by pickets from the hon. Gentleman's union.
12 midnight
The Parliamentary Under-Secretary of State for Employment (Mr. John Lee): We have perhaps had the liveliest debate of the day during this Adjournment debate. First let me congratulate the hon. Member for Manchester, Blackley (Mr. Eastham) on his speech and acknowledge the patently sincere and deeply felt concern which led to his wish that this matter sho:uld be debated in the House. We have also heard the comments of my hon. Friend the Member for Davyhulme (Mr. Churchill) who put the case for the other side of the dispute.
I must say straight away that it is, of course, always sad to see people lose their jobs — but in any individual situation the question whether to take industrial action is entirely a matter for the employees to decide. Holding a ballot before industrial action gives union members the opportunity to think about the possible consequences and decide for themselves whether they are willing to take the risks involved. Strikes invariably put jobs at risk—either immediately, as in this case, or as a result of the longer-term damage that they can do to the company concerned.
There may be some confusion over the question of immunity and the protective effect of a ballot before strike action. Let me try to clarify the point. The Trade Union Act 1984 made it a condition of immunity that before calling a strike or other industrial action, a trade union must obtain the support of its members through a secret and properly conducted ballot. Trade union immunities, however, protect those who persuade others to break their contracts. not those who, by going on strike, break their own contracts.
The law has never protected people's jobs when they breach their contracts by going on strike. In those circumstances, the employer has always had the right to regard the employment contract as terminated. However, it protects strikers against selective dismissal and victimisation. The basic principles of the legislation governing dismissal in a strike have remained unchanged since 1971. When statutory protection was first introduced — they are to allow the dismissal of all workers on strike, but to give protection to those selectively dismissed, and to those not re-engaged when others are. That is the position on unfair dismissal in relation to industrial disputes.
With regard to the conduct and resolution of disputes, it is not the Government's job to intervene in individual disputes, but rather to establish a sound legal framework in which employers and employees can shoulder their own responsibilities. The resolution of disputes is essentially a matter for employers and employees themselves, with the assistance, if they wish to have it, of the independent
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Advisory, Conciliation and Arbitration Service, which always stands ready to provide any help it can to the parties in any dispute. I understand that ACAS has been in touch with both parties in this dispute and remains available to help them reach a settlement. In addition, if any of the employees dismissed feel that they have a legitimate claim of unfair dismissal against their employer, they have the right to apply to an industrial tribunal—though it will, of course, be for the tribunal to interpret the law in each particular case.
I now want to consider the involvement of the Manpower Services Commission's jobcentres in recruitment for certain jobs at Senior Colman Ltd. following the dispute which I think is the central point of concern for the hon. Member for Blackley.
I think that it is important—
Mr. John Evans: Will the Minister answer one question? Will he confirm that my hon. Friend's point that 110 members voted in favour—
Mr. Deputy Speaker: Order. We cannot have two hon. Members on their feet at the same time.
Mr. Lee: With great respect, I am operating on a very tight deadline because I have given a proportion of my time to my hon. Friend the Member for Davyhulme. It was up to the hon. Member for Blackley to give his colleague the hon. Member for St. Helens, North (Mr. Evans) a proportion of his time. I shall use my time in my own way.
What happened in this case, I understand, is that Senior Colman Ltd. asked the jobcentre at Altrincham to service vacancies for the jobs of the four workers initially dismissed, and the employer told the jobcentre manager privately that there was a possibility that he might need her help to fill a further 106 vacancies if the rest of the work force did not respond to an ultimatum to return to work or be dismissed. On 22 January the employer told the jobcentre that those still on strike had been dismissed, and asked the jobcentre to fill the resulting vacancies.
Mr. George Howarth: Answer the question.
Mr. Lee: Perhaps when the hon. Member has been in the House a little longer he may understand how Adjournment debates are conducted.
MSC staff, following standing guidance, waited a few days to provide a cooling-off period and then sent about 140 people to the firm for interview, after warning them about the industrial dispute. After interviewing, about 90 were placed. On 28 January the employer informed the jobcentre that all vacancies were filled. Since then. the jobcentre has had no contact with the firm.
All the action taken by the jobcentre in question, and its regional management, was entirely in line with the tried and tested procedures that have governed the employment service's handling of job vacancies during a trade dispute for many years now. It may help if I explain what these procedures are, and what are the principles underlying them.
Jobcentres have a general duty to provide a service for employers and people looking for work. Under the Employment and Training Act 1973 the Manpower Services Commission is charged with an equal responsibility to employers and Job seekers. This means that it must be neutral in all matters relating to the provision of services. This stance must apply to industrial disputes. even though in practice it is difficult for the employment

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service to appear to all concerned to be acting in a neutral way. If jobcentres service vacancies for an establishment affected by a dispute, unions often take the view that help is being given to the employer. If jobcentres refrain from servicing these vacancies then employers may well complain that the jobcentre is supporting the employees.
The policy is therefore to treat such job vacancies as normally as possible, but with the important distinction that intending applicants are informed that a dispute is in progress so they can decide for themselves whether to apply for employment. If the vacancies have arisen directly because of a withdrawal of labour, action to fill the jobs may be suspended for two days, or longer in exceptional circumstances, to allow a cooling-off period to see whether the dispute may be resolved in the meantime and a confrontation avoided, and to make sure that there are real vacancies on offer rather than just the threat of dismissals as a negotiating ploy. This is exactly what happened with the Senior Colman vacancies at Altrincham jobcentre.
One very important aim of these carefully considered procedures is to try to ensure as far as possible that the Manpower Services Commission does nothing which could be regarded as exacerbating a dispute, or worsening industrial relations within the firm involved. Another
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important concern is, of course, the practical question of personal risk to job seekers who apply for vacancies and have to cross picket lines. The procedures are designed with these factors very much in mind, and have been looked at again very recently to ensure that we, and the MSC, still regard them as the best way to deal with what can be very delicate situations.
I hope that what I have said will reassure the Member for Blackley that the procedures that the Manpower Services Commission puts into practice in these sorts of circumstances are long-standing, fair and sensible, and that they were operated reasonably in the case of this particular dispute at Senior Colman Ltd.
Let me sum up then what the jobcentre did and why it did it. It was notified of around 100 vacancies in a company where the employer was threatening to dismiss all those who were on strike. The jobcentre staff concerned, following their standing guidance, decided to take no action on the vacancies for a few days, during which ACAS was consulted as to the genuineness of the vacancies and the prospects for a settlement. When it became clear that there—
The Motion having been made after Ten o'clock and the debate having continued for half an hour, Mr. Deputy Speaker adjourned the House without Question put, pursuant to the Standing Order.
Adjourned at eight minutes past Twelve o'clock.