Commons Sitting of 30 March 1987

Preamble
The House met at half-past Two o'clock
PRAYERS
[MR. SPEAKER in the Chair]
Oral Answers to Questions
  ENERGY

    Combined Heat and Power Schemes
    Mr. Rostasked the Secretary of State for Energy what representations he has received on progress in promoting combined heat and power schemes.
    The Parliamentary Under-Secretary of State for Energy (Mr. David Hunt): I have had several representations about progress on lead city CHP schemes, including of course, questions from hon. Members.
    Mr. Rost: Will my hon. Friend look urgently at the three problems still preventing private sector CHP from competing fairly with the public sector: a rating assessment that is equitable with public utilities, legislation that allows private utilities to have the same powers as public utilities and, above all, a fair price for electricity produced in the private sector? The Central Electricity Generating Board still pays 25 per cent. less for electricity than it charges the private sector for that same electricity, and the new tariffs are likely to reduce that still further.
    Mr. Hunt: Yes. I will look again at all three of the points raised by my hon. Friend. The level of the bulk supply tariff is a matter for the CEGB, and responsibility for rating policy rests with my right hon. Friend the Secretary of State for the Environment. However, I am in touch with my colleagues at the Department of the Environment on this matter. On the matter of legislation, one of the objectives of the lead city studies is to identify possible legislative requirements. The Government have commissioned a study to review and consider the adequacy of existing legislation and, in the light of the results of that study and those of the lead cities, the Government will consider the need for legislative or regulatory changes.
    Mr. Meadowcroft: Will the Minister accept that the cause for great public antipathy towards combined heat and power—individual metering for heat—has now been resolved and that metering expertise has managed to overcome the problem? In the light of that, will he consult further his right hon. and hon. Friends at the Department of the Environment to find some way of encouraging local authorities to move down that road now that their inhibitions with regard to metering have been overcome?
    Mr. Hunt: Metering is just one of the many aspects of CHP. I stress once again that the Government want CHP district heating to go ahead where it is economically viable.
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    However, the Government consider that the main responsibility for taking CHPDH forward lies with the private sector.
    Mr. Peter Bruinvels: I assure my hon. Friend that the Leicester combined heat and power consortium, now known as Leicester Energy Ltd., is raring to go. It believes that cheaper heat will be distributed by 1991. It needs only three years for construction and the contracts. Reducing the rates, which was referred to by my hon. Friend the Member for Erewash (Mr. Rost), is the only thing holding it up. May we please have as much support as possible?
    Mr. Hunt: I compliment my hon. Friend and my hon. and learned Friend the Member for Leicester, South (Mr. Spencer) on their strong support for the Leicester CHP consortium. I was most encouraged by the fact that the consortium had agreed to form a heat utility company to take the project through to the next stage. I must pay tribute to my hon. Friends' contributions to that and to making Leicester an energy action city. I was delighted to see a special edition of the Leicester Mercury dealing with that.
    Mr. Rowlands: Some time last year the Minister made a clear statement that we would have the rating assessment problems resolved. Time is now passing. Please may we have a commitment from the Minister that there will be a statement in the near future about the position of the rating assessments of CHP schemes?
    Mr. Hunt: I am happy to reassure the hon. Gentleman that the Government accept that CHP schemes should be rated on an equal footing with the rest of the electricity supply industry. Therefore, we have been considering, with colleagues at the Department of the Environment, whether an early statement can be made to clarify the practical implications for CHP operators of the Government's decision in principle.

    Coal Imports
    Mr. Eadieasked the Secretary of State for Energy what assessment he has made of future trends of imports of coal for the remaining months of 1987.
    Mr. David Hunt: None.
    Mr. Eadie: Surely the hon. Gentleman must agree that it is nonsense to import foreign coal in the light of the fact that we have plenty of coal of our own and since the miners in this country are breaking productivity records every week? The Minister must also be aware that much of the foreign coal coming into this country is very unfairly heavily subsidised.
    Mr. Hunt: In 1979, when we inherited the coal industry from the Labour Government, the United Kingdom was a net importer of 2 million tonnes of coal every year. By 1983 we had converted that position and the United Kingdom was a net exporter of 2 million tonnes. Sadly, the strike destroyed that position. However, the best protection against imports for the United Kingdom coal industry lies in it achieving full production at prices that are competitive on the world market.
    Mr. Hickmet: Will my hon. Friend assure the House that the Government will take no steps to prevent the import of coal? May I also inform him that the jobs of more than 600 men in my constituency depend on the

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    import of coal? The constant attacks by Labour politicians aimed at banning coal imports would put a great many people in my constituency out of work.
    Mr. Hunt: I am happy to assure my hon. Friend that there are no restrictions on coal imports. However, judging by the productivity figures coming from the pits in the United Kingdom, the miners and management of British Coal have nothing to fear from the future.

    British Coal
    Mr. Jack Thompsonasked the Secretary of State for Energy when he or his fellow Ministers last met the chairman of British Coal; what were the issues discussed; and if he will make a statement.
    Mr. Ottwayasked the Secretary of State for Energy when he next expects to meet the chairman of the Coal Board; and what subjects he expects to discuss.
    The Secretary of State for Energy (Mr. Peter Walker): I have regular meetings with the chairman of British Coal to discuss all aspects of the coal industry.
    Mr. Thompson: I am most grateful to the Secretary of State for his reply, although it was very brief. At the next meeting that the Secretary of State and his Ministers have with the chairman of British Coal, will they seek the chairman's views on the production of coal in the north-east of England relative to the possibility of establishing a new coal-fired power station in the area?
    Mr. Walker: Most certainly. I discuss all the regional aspects. As the hon. Gentleman knows, there is already a considerable demand for coal from existing industries in the north-east. I hope that that will continue.
    Mr. Ottaway: My right hon. Friend will be aware that output at the Nottinghamshire coalfield reached an all-time high of 4·02 tonnes per man shift the other day and reached 5 tonnes per man shift in the Sherwood area. When my right hon. Friend has his discussions with the chairman of the Coal Board, will he suggest that the headquarters of the Coal Board are moved to the Nottinghamshire coalfield, as that is quite clearly where the future lies?
    Mr. Walker: I endorse what my hon. Friend said about the remarkable production figures in north Nottinghamshire. The location of the headquarters of the Coal Board is a matter for the Coal Board. However, I know that the existing management is endeavouring to ensure that much of the existing management is devolved to the regions, where it would be thoroughly welcomed.
    Mr. Hardy: Will the Secretary of State discuss with the chairman of British Coal how, as a result of the real achievements in productivity resulting from the closure of a lot of the capacity and of continuing investment, British customers can be persuaded to buy British coal rather that develop a dependency upon dumped coal from overseas or insecure supplies from South Africa? In addition, will he ask the chairman of British Coal to be quite buoyant in his assessment of the situation, not least because in my constituency in the Kilnhurst part of the Manvers complex, which a few months ago British Coal was talking about closing, records are currently being broken?
    Mr. Walker: I know that the hon. Gentleman has a keen interest in the coal industry. He should reflect on an
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    industry which now has 42 per cent. fewer people than it had prior to the commencement of the overtime ban before the strike and is producing 97 per cent. of the coal—
    Mr. Campbell-Savours: The Government have put those men on the dole.
    Mr. Walker: As for any suggestion that they have been put on the dole, I am glad to say that many took early retirement and not one suffered compulsory redundancy. If there is a hope for coal now it is because of this Government's actions.
    Mr. Wrigglesworth: Has the Secretary of State discussed with the chairman of British Coal the progress that British Coal Enterprise Ltd. is making in creating jobs in areas hit by coal mine closures? Can he assure the House that British Coal Enterprise Ltd. has sufficient resources to do the job?
    Mr. Walker: Yes, I can assure the House that, not only does British Coal Enterprise Ltd. have the resources to do the job, but when it runs out of the existing resources, those will be increased. It is doing a marvellous job of work and I am pleased to tell the House that we have heard that it has provided its fifteen thousandth job since it started.
    Mr. Orme: As the Secretary of State knows, the chairman of British Coal undertook to review the question of sacked miners. Has he discussed this with the chairman and has he anything to report to the House?
    Mr. Walker: Yes, the matter was discussed recently and I am told that there will be an announcement shortly.

    Coal-fired Power Stations
    Mr. Ashtonasked the Secretary of State for Energy what recent representations he has received from the Central Electricity Generating Board regarding requests to build coal-fired power stations.
    Mr. Sean Hughesasked the Secretary of State for Energy if he has recently received any new applications from the Central Electricity Generating Board regarding construction of new coal-fired power stations.
    Mr. Peter Walker: The chairman of the CEGB has informed me that the board has concentrated its investigation of possible locations for new coal-fired power stations on five sites which it owns. Subject to the satisfactory completion of site investigations and other work, the board expects to select West Burton and Fawley and to make formal applications for consent to these stations by the end of this year. My intention on receiving such applications would be to consider each decision as quickly as possible.
    Mr. Ashton: I thank the Secretary of State for that reply. Is he aware that West Burton is in my constituency and that there will be no problems from the county or district council with regard to planning permission for a development that will be eagerly welcomed? As unemployment is now touching 20 per cent., is the right hon. Gentleman further aware that if he can speed up his decision and give it full force he will receive the maximum backing from the area?
    Mr. Walker: I am pleased that the project will be of benefit to the area in terms of jobs and everything else. It

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    also reflects the availability of coal in the area, where all productivity records are being broken. I believe that the feasibility of coal-fired power stations has resulted from the massive improvement in productivity under this Government.
    Mr. Hannam: Will my right hon. Friend accept the congratulations of all who believe in a balanced energy programme? Is he aware that his announcement will be greatly welcomed by the hard-pressed power construction industry? Are there any proposals in the pipeline for a coal-fired power station in the far south-west of England?
    Mr. Walker: On the latter point, I have received no application and I know of no immediate proposal by the CEGB, which has informed me of its likely choices for the first two stations. It has already announced its intention to go ahead with Sizewell and to apply for one further PWR, so I think that that is the programme for the foreseeable future.
    Mr. Dormand: Does that exclude the possibility of a coal-fired power station in the north-east, which has the strongest case of all, in having higher unemployment than any other part of the United Kingdom except Northern Ireland? Is the right hon. Gentleman aware that British Coal Enterprise Ltd. seems to be having no effect whatever in the north-east of England, and will he give some attention to that?
    Mr. Walker: That is simply not true, as a substantial number of jobs have already been provided in the north-east. I referred to the siting of the first two power stations, but I did not say that the north-east was excluded for the future. The hon. Gentleman, with his great knowledge of the area, will know that orders for power stations, both nuclear and coal-fired, are of considerable benefit to the north-east.
    Mr. Colvin: Is my right hon. Friend aware that there will be relief in my constituency that he has plumped for one site in Waterside and not for two, although there is still considerable debate as to whether the Fawley B side or the Marchwood side is best? Is he aware that there will also be relief that it is to be a coal-fired station rather than a nuclear one? Will he, nevertheless, give an undertaking that there will be the fullest public debate before the final go-ahead is given, as there are other anxieties, first, about the future of the north Solent area of outstanding natural beauty, secondly, about sulphur dioxide emissions from coal-fired power stations and, thirdly, about the appalling infrastructure of Waterside, which for too long has been a dumping ground for developments in Hampshire that others did not want? Does my right hon. Friend accept that if the development is to get past the planning hurdles as smoothly as one trusts will be the case in Burton there must be some trade-off in terms of improving the infrastructure and in particular the killer A326 road?
    Mr. Walker: I am aware of my hon. Friend's great interest in possible developments in his constituency and the CEGB is anxious to recognise the environmental issues that he has raised. I am sure that in their discussions the planning authorities will not be disappointed at the interest shown by the board in those issues.
    Mr. Forth: Before my right hon. Friend rushes off to approve too many coal-fired power stations, will he bear in mind the problem of emissions and acid rain, which concerns people, not only in this country, but our partners
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    abroad, especially in Europe? Will he bear in mind also the regrettably much higher fatality rate for those mining coal and using it in various ways, compared to nuclear power? Will he bear all those factors in mind before he considers approving too many coal-fired power stations?
    Mr. Walker: Yes. My hon. Friend has raised two important issues. On his environmental point about acid rain, all new coal-fired power stations have the best equipment to ensure that such problems are met as far as possible. The accident and fatality rates in the coal industry are serious problems which everybody hopes to improve in the years to come.
    Mr. Orme: We welcome the proposed development of these new coal-fired power stations, which are long overdue. However, to return to a point made earlier by some of my hon. Friends, can the Secretary of State give an undertaking that British coal will be used in these new stations?
    Mr. Walker: Such power stations would probably not have been possible but for the improved performance of British Coal during the lifetime of this Government. Provided that performance continues, and is enhanced, I am sure that the CEGB will continue to buy the bulk of its coal from the British coal industry as it does at present. It is in its vested interest to do so, provided it remains a safe and secure form of supply.

    Conservation Schemes
    Mr. Knoxasked the Secretary of State for Energy what representations he has received in the past six months about the adequacy of existing energy conservation schemes.
    Mr. Peter Walker: I am announcing today a 33 per cent. increase in the administrative funding for community insulation projects from £296,000 to £391,000. Total funding will increase from £32 million in 1986–87 to £45 million in 1987–88, an increase of 41 per cent.
    I hope that in the coming year 200,000 homes in the lower income groups will be insulated, and 8,000 jobs provided.
    Mr. Knox: Can my right hon. Friend estimate the savings that will be effected by the improvements that he has announced?
    Mr. Walker: No, I cannot, because of the diversity of housing concerned. However, we know that in the 300,000 houses that this programme has already tackled, there has been, not only a substantial improvement in cost savings to the families concerned, but a substantial improvement in their comfort. It is the combination of those effects, together with the jobs created, that makes the scheme so attractive.
    Mr. Bruce: The Secretary of State is obviously anxious to put a good gloss on the record that he has achieved. However, does he acknowledge that that record falls a long way short of the 20 per cent. saving that he, his Department and the EEC predict can be achieved through energy conservation? What will he do to plug that gap?
    Mr. Walker: This scheme has made a 3,000 per cent. improvement on the record of the Lib-Lab Government.
    Mr. Hardy: While any improvement is to be welcomed, will the Secretary of State confirm that, even with that improvement, our position will still be by far the worst in western Europe?
    Mr. Walker: Whereas our position became worse and worse under the previous Labour Government, it has become better and better under this Government.
    Mr. Rost: What discussions has my right hon. Friend had with his colleagues in other Government Departments to ensure that the public sector, such as the Health Service, does a little more to cut public expenditure by improving energy efficiency?
    Mr. Walker: I am glad to say that my right hon. Friend the Secretary of State for Social Services has personally pursued a major campaign with the regional hospital boards to ensure that the colossal savings that can be obtained by them are achieved. Likewise, my right hon. Friends the Secretary of State for Education and Science and the Secretary of State for Defence are doing the same in their Departments. Those are three areas of big energy usage and I am glad that there are signs that considerable improvements in their performance will be achieved.
    Mr. Rowlands: Will the Government's proposals not reduce and remove grants from millions of householders who do not have effective or adequate standards of home insulation? Is the Secretary of State aware that, in another Government Department, the MSC is cutting some community programmes that will affect the viability of some of the community energy projects, on which the Government, and all of us, depend?
    Mr. Walker: No. The time should come when, if there is a dramatic improvement in a programme with which hon. Members on both sides of the House agree, Opposition Members should pay tribute to it, instead of carping. I suggest that the hon. Gentleman goes back and looks at the appalling record of the Labour Government.

    British Coal (Investment Programme)
    Mr. Ashbyasked the Secretary of State for Energy what is his latest estimate of Government support for the investment programme of British Coal since 1979–80; and if he will make a statement.
    Mr. David Hunt: Over £5,500 million has been invested in the coal industry since 1979.
    Mr. Ashby: While I thank my hon. Friend for that reply, which shows the Government's commitment to the mining industry, including Asfordby, may I ask him whether he will give priority to the miners of the south Leicestershire coalfield—99 per cent. Of whom live in my constituency—for the jobs in the future development of Asfordby?
    Mr. Hunt: I am pleased to assure my hon. Friend that the development at Asfordby is on schedule in terms of time and cost. I know how hard he and other hon. Friends have been lobbying on the future for the miners of south Leicestershire and I am pleased to tell him that the south midlands area management has assured me that such miners will have priority in transferring to Asfordby.
    Mr. Janner: Can the Minister please say when pits other than Asfordby are expected to be opened, bearing in mind that the existing pits in Leicestershire are closing
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    and the huge reservoir of extremely valuable and necessary coal in the Vale of Belvoir? Will it be before all the miners' skills have disappeared from those pits, which are emptying of people?
    Mr. Hunt: I wish thatthe hon. and learned Gentleman would cease his negative attitude towards the future of the men in this area. There is a marvellous prospect at south Warwickshire and a tremendous development at Asfordby. Provided that the miners in the area continue the tremendous advances in productivity, their future is extremely bright.

    British Coal Productivity
    Mr. Batisteasked the Secretary of State for Energy if he will make a statement about the latest available productivity figures for British Coal.
    Mr. David Hunt: I am pleased to say that for the week ending 20 March average deep-mined revenue output per man shift was at the record level of 3·72 tonnes, compared with the provisional figure of 3·70 tonnes. Clearly this underlines the potential of our great coal industry.
    Mr. Batiste: Does my hon. Friend agree that the constantly improving productivity record of British Coal is a vindication of the Government's policy of investment in the industry and of the miners' attitude in accepting responsible and flexible working practices to justify that investment? Does he further agree that the single greatest obstacle to the continued progress of the industry is the attitude and actions of the president of the National Union of Mineworkers, currently evidenced by his attacks on his members in south Wales?
    Mr. Hunt: I agree with a great deal of what my hon. Friend said. The Government are providing the investment needed to secure future productivity growth. I am pleased to say that we are now beginning a £2 billion further investment programme over the next three years, which is an important expression of confidence in the industry's ability to improve its productivity still further. As I have said previously, the only power left to the president of the NUM is control over the Opposition's energy policy.
    Mr. Allen McKay: Does the Minister accept that productivity is calculated in many ways, including loss of manpower, and that the loss of 70,000 men has contributed to increased production? Is it not a fact that if he does not keep track of imports of coal and plans carefully, increasing productivity, the possibility of increased shift time and increased investment could lead to colliery closures?
    Mr. Hunt: The hon. Gentleman, too, is expressing a pessimistic view that flies in the face of the facts. Although manpower has been reduced in the coal industry, output has not, and that is a remarkable tribute to the achievements of the men. Productivity is measured by output per man shift, and that measurement showed that productivity fell each year between 1974 and 1979 under the Government whom he supported.
    Mr. Maxwell-Hyslop: Can my hon. Friend relate productivity to capital investment? That is a measure of efficiency, without which a false impression may be gathered.
    Mr. Hunt: The evidence is that a great deal of the increase in productivity is due to investment, particularly in heavy duty machinery for new coal faces. Of course I shall give my hon. Friend the information that he seeks.
    Mrs. Clwyd: As south Wales had its highest ever level of productivity last week, will the Minister confirm that, if the Margam project were operational, £41 million would be saved in coking coal imports and £15 million in domestic coal imports? Therefore, will he give every encouragement to the Margam project and make sure that the necessary grants and loans are made available as soon as possible?
    Mr. Hunt: I join the hon. Lady in congratulating south Wales miners on achieving an output per man shift of 3·29 tonnes. It is a remarkable achievement. Indeed, south Wales has demonstrated its confidence in the future by entering into discussions and agreeing six-day working at Margam. The line taken by the Leader of the Opposition in welcoming that decision is again in stark contrast to the line taken by the president of the NUM.

    Sizewell B
    Mr. Pikeasked the Secretary of State for Energy what representations he has received since he announced his decision on the Sizewell B nuclear power station.
    The Parliamentary Under-Secretary of State for Energy (Mr. Alastair Goodlad): My right hon. Friend and I have received 36 letters about Sizewell B following the announcement of his decision.
    Mr. Pike: Notwithstanding that answer, does the Minister accept that there is widespread public concern about the safety aspects of PWRs? Many people are not convinced that the project is in the best energy interests of the country and also do not believe that the economic case is correct.
    Mr. Goodlad: I regret to say that the hon. Gentleman is quite wrong. The decision has been broadly welcomed. The effect that he mentioned was not evident in our debate on nuclear power last week, when the hon. Member for Midlothian (Mr. Eadie) was alone on the Labour Benches and made Horatio on the bridge look like a team player.
    Mr. Adley: In view of my hon. Friend's interesting answer, does he agree that either the information provided by the hon. Member for Burnley (Mr. Pike)—namely, that there is widespread public concern about Sizewell—is incorrect, or that concern is expressed only among the illiterate?
    Mr. Goodlad: My hon. Friend, as always, has a point.
    Mr. Beith: Does the Minister accept the view put forward by the chairman of the Central Electricity Generating Board that the Sizewell decision has opened the way to a family of PWRs, or does he accept the Layfield view that Sizewell presents an opportunity to test the claims made on behalf of PWRs?
    Mr. Goodlad: As yet, my right hon. Friend has received no further applications. He will consider each one on its merits.

    Electricity Supply (Privatisation)
    Mr. Teddy Taylorasked the Secretary of State for Energy what representations he has received in favour of the privatisation of the electricity supply industry; and if he will make a statement.
    Mr. Peter Walker: I have received a number of representations on this matter. The Government have no present plans to privatise the electricity supply industry.
    Mr. Taylor: In view of the remarkable success of the privatisation of the gas industry and the benefits that have stemmed from it for the industry and the consumer, is there not a sound case for pressing ahead with the privatisation of the electricity industry as speedily as possible? Will the Minister consider the possibility, not of a blanket share issue, but of separate stock for separate area boards?
    Mr. Walker: I agree with my hon. Friend. British Gas has been an outstanding success, as 5 million ordinary people are willing to validate, including many customers and virtually all the employees of British Gas. In any consideration of the future of the electricity supply industry one must consider the lessons to he learnt from British Gas.
    Mr. Eadie: When considering any representations that are made to the Secretary of State regarding the privatisation of the electricity supply industry, will he assure the House that thermal nuclear power stations will not be operated by the private sector?
    Mr. Walker: As we have no plans for privatisation, I have no comments to make on any details of such a scheme, should it take place in the future. I can only assure the hon. Gentleman that, we took great care and made a great success of British Gas, and we shall do the same in any future privatisation of any other industry.

    Coal Industry (Productivity and Investment)
    Mr. Adleyasked the Secretary of State for Energy if he will arrange to meet leaders of the National Union of Mineworkers to discuss productivity and investment in the coal industry; and if he will make a statement
    Mr. Peter Walker: I am always happy to meet the representatives of unions in the coal industry to discuss matters of mutual interest.
    Mr. Adley: I thank my right hon. Friend for that reply. In view of the widespread welcome that there appears to be on both sides of the House for the decision in south Wales, would it not be appropriate for my right hon. Friend to meet the NUM and to remind it of the fruits that can be available to it if it accepts new working practices? Does my right hon. Friend agree that no other Government could possibly have achieved the present situation unless the rule of terror practised by Mr. Arthur Scargill had been broken by the Government's persistence?
    Mr. Walker: It is remarkable that the great majority of south Wales miners are in favour of the new project for a six-day week. The Leader of the Opposition has come out in support of them, the Welsh TUC also supports them, and seemingly the one great opponent is the president of the National Union of Mineworkers. I hope that the members of the NUM will put appropriate pressure on him.
    Mr. Ashton: There is always support for new jobs, but is the Minister aware of the genuine fear that the high productivity now being achieved will mean no jobs for school leavers in coal mining areas, and that the continuing increase in output, plus nuclear power stations, the high price of electricity and giving pensioners only a £5 heating bonus means that ultimately there will be an energy mountain and mass unemployment, in the same way as there is a butter mountain—except that farmers get the subsidy?
    Mr. Walker: Earlier, in relation to a question about whether a power station would be built in his constituency, the hon. Gentleman seemingly rejoiced at the jobs that would be created. He now suggests that we go back to colossal overmanning in the coal industry, which will make it totally non-competitive for such power stations.
    Mr. Favell: Is my right hon. Friend concerned about the recent report, not only about the cost of British coal for producing energy and thereby the cost to industry, but about overmanning in the electricity supply industry?
    Mr. Walker: It is not in the interests of any industry to continue with the practice of overmanning. The coal industry is a perfect example of where we have cut uneconomic pits and replaced them; and so far British Coal Enterprise Ltd., has provided 15,000 new jobs in expanding industries.

    Nuclear Power
    Mr. Cohenasked the Secretary of State for Energy what representations he has received concerning the expenditure of public money by his Department on the promoting of nuclear power.
    Mr. Goodlad: My right hon. Friend and I have received many representations about the importance of informing the public of the facts about the safety of nuclear power and its economic and strategic benefits.
    Mr. Cohen: Why are the Government spending considerable amounts of public money on a PR hype for the nuclear industry, including jamborees to Sellafield involving the Flying Scotsman and the Workington brass band, when the Nuclear Installations Inspectorate is grossly under-staffed and under-funded? The Government have asked the CEGB to investigate itself at Hinkley Point, but it has failed to keep Sellafield safe and is miles behind in its 20-year review of Magnox nuclear stations.
    Mr. Goodlad: Public confidence in nuclear power is vital and will be brought about only through the full knowledge of the true facts. To this end, successive Governments have funded a programme of public information through the United Kingdom Atomic Energy Authority. The authority's task is to provide clear and accurate information on the nature and uses of civil nuclear power. The industry is sometimes wrongly castigated for being secretive. It is extremely unfair to blame that industry when it is being informative. I am satisfied that the NIL is able to maintain safety standards in exercising its statutory role. There is absolutely no question of safety at our installations being prejudiced. The chief inspector has categorically stated that his priority is the safety of operating installations and that he has sufficient staff resources to discharge that essential aim.
    Mr. Leigh: Is it not extraordinary that hardly a day passes in this Chamber when the Opposition parties do not whinge about the so-called decline in our manufacturing base, yet they do everything possible to oppose Britain becoming more competitive by opposing cheap nuclear energy that gives a competitive edge to our opponents, particularly to the French?
    Mr. Goodlad: My hon. Friend is correct. There is no consistency in the Opposition parties.
    Mr. Orme: The Minister has just said that he wants to give as much information and to be as open as possible. Therefore, could he comment on the AGR accident at Hartlepool? Why has no statement been made so far by the Government, and can he tell us the cost of that accident to date?
    Mr. Goodlad: The CEGB has made a perfectly open statement about that. I shall certainly let the right hon. Gentleman know about the costs when they have been ascertained.

    Coal Industry (Six-Day Working)
    Mr. Andy Stewartasked the Secretary of State for Energy what discussions he has had with British Coal about the implications of an extension of six-day working in the industry for United Kingdom energy policy.
    Mr. David Hunt: Any change in working practices in the coal industry is, of course, a matter for negotiation between British Coal and the mining unions concerned.
    Mr. Stewart: I thank my hon. Friend for his answer. I welcome the statement by my right hon. Friend the Secretary of State for Energy about the building of two new coal-fired power stations. Does my hon. Friend agree that the CEGB made its commitment to the coal industry because of the decision of the south Wales miners in accepting six-day coaling and the record productivity in Nottinghamshire, making electricity generation from coal more competitive than other energy sources?
    Mr. Hunt: I welcome the positive approach by the south Wales NUM to British Coal's proposals for six-day coaling at Margam. My hon. Friend is right. The message coming loud and clear from the pits is that the men and management are prepared to work with this massive record investment by the Government and to produce these fantastic productivity figures.

  THE ARTS

    Museums (Visitors)
    Mr. Haynesasked the Minister for the Arts what representations he has received about possible initiatives to increase the number of people visiting museums.
    The Minister for the Arts (Mr. Richard Luce): None, Sir, but on 17 December 1986 I announced details of a new arts marketing scheme to assist arts organisations, including publicly funded museums and galleries, to find ways of increasing attendances.
    Mr. Haynes: The Minister has talked about initiatives for the arts, but he is not doing very well. Is he aware that the increased museum admission charges imposed by the Government are driving people away? Even children are

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    being charged £1 to go into a museum. It is time that the Government changed their mind and did something good for the people in respect of museums.
    Mr. Luce: If not doing well is doubling the number of museums during the past 15 years, the hon. Gentleman should think again. The number of people attending our national museums and galleries is increasing all the time. I am satisfied that we are meeting public demand. As for charges for museum admission, I think that it is right that this matter should be left to the trustees. If the trustees judge that, by raising charges and by getting extra resources for the museums, they will improve facilities, which in turn will attract greater public interest, that is their choice. It is right that it should be their choice.
    Mr. Rhodes James: Will my right hon. Friend deal at long last with the indefensible anomaly whereby five major university museums in England, Scotland and Wales, including the Fitzwilliam museum in Cambridge, are financed or semi-financed from the University Grants Committee budget? We have to turn away visitors because museums cannot open as often as we would wish. Are these not national museums? Will my right hon. Friend deal with this matter and with my right hon. Friend the Secretary of State for Education and Science? Can we not end this indefensible anomaly?
    Mr. Luce: I acknowledge the strength of my hon. Friend's feelings. He has raised this matter in debates and in questions. I have had the chance to visit a number of distinguished university museums, but principally this is, and has been for a long time, a matter for my right hon. Friend the Secretary of State for Education and Science. Great importance is attached to museums being linked to the university, as opposed to a wider link.
    Mr. Pike: Does the Minister accept that introducing charges for admission to museums is a retrograde step and certainly will not do anything to attract visitors to museums? Should not this policy be reversed? Should not people be given the freedom to go to museums free of charge, thereby widening knowledge and making the best possible use of the assets of our national museums?
    Mr. Luce: I do not think that it is a retrograde step. If the trustees think that, by a voluntary donation system or by admission charges, over and above the basic grant which they receive, they will improve museum facilities, thereby benefiting the public, that is their choice. In the vast majority of countries, whatever their system of payment to the arts, there is a system of charging for entrance to museums and galleries. It is up to the trustees to decide.
    Mr. Jessel: Has my right hon. Friend any information about which other countries charge for museum admission and about the effect on attendances?
    Mr. Luce: It is interesting to note that charging occurs in a large number of countries, whatever their system—whether the bulk of their support for the arts is through the state system and the taxpayer or from the private sector. Those countries range from the United States to France and to a museum which I saw not long ago in East Berlin. There is widespread evidence that charging takes place all over the world.

    Museum Charges
    Mr. Tony Banksasked the Minister for the Arts when he last met the Civil Service trade unions and associations to discuss the effects of the introduction of museum charges on attendance.
    Mr. Luce: On 20 February 1986 I met representatives of the First Division Association, the Institution of Professional Civil Servants, the Civil and Public Services Association and the Civil Service Union to discuss a number of questions. The subject of admission charges was raised.
    Mr. Banks: I do not suppose that any of those unions were in favour of museum charges. Is the Minister not being disingenuous in saying that this is a matter for the trustees, as the trustees are charging only because of the low level of Government grant to museums? The Minister must have seen the statements issued by the British museum about the inadequacy of its grant, and no doubt charges will soon be introduced there. How can he defend a situation in which the Natural History museum trustees are about to introduce charges, and estimate that that will reduce the number of visitors by 40 per cent.? Where is the social or economic sense in that? Is it not symptomatic of the Government's seedy, street corner shop mentality towards museums and all other matters?
    Mr. Luce: The resources that are made available to national museums and galleries have gone up by 13 per cent. in real terms since 1979–80. That is not the issue here. It is a matter of whether the trustees want to seek new ways of raising extra revenue. There are thousands, if not millions, of people around the country who are prepared to go to a variety of museums—not only the out-stations of national museums, but the many independent museums, country houses and subsidised theatres where there are charges. That is the choice of the people, and if it helps to improve facilities, so be it.
    Sir David Price: Does my right hon. Friend agree that the most important single factor in determining the number of people who visit a local museum is not the level of charges but the perceived relevance of what is on offer at that museum? I wish to extend to my right hon. Friend the Minister and to the hon. Members for Ashfield (Mr. Haynes) and for Newham, North-West (Mr. Banks) an invitation to come to Eastleigh and see the new museum, which is both relevant and popular.
    Mr. Luce: I hope that the hon. Members for Newham, North-West (Mr. Banks) and for Ashfield (Mr. Haynes) will take up that generous offer, particularly during the general election campaign. My hon. Friend is absolutely right to identify the fact that it is the standards of the museum and what it has to offer people that matter, and that they are prepared to pay if they think that the services that are offered are excellent.
    Mr. Freud: Will the Minister confirm that he feels it his duty to preserve the heritage rather than to leave it reliant on tourism or the good sense of trustees?
    Mr. Luce: Our heritage is of the greatest importance. In that connection, I was extremely glad that the week before last, through the acceptance in lieu scheme, we acquired a Constable, which is available from this morning at the National gallery and which will be of great benefit to the nation.
    Mr. Key: Does my right hon. Friend agree that it would be quite inappropriate to give too much weight to the opinion of the Civil Service unions about museums? Most museums are independent, people and their families visit independent museums, and the business is flourishing and growing. For example, next month the Wessex horse centre at Teffont is due to open.
    Mr. Luce: My hon. Friend is right. One has only to travel around the country to see what is happening in the museum world. One new museum is opened every fortnight because of the growing public demand for all types of museum. The evidence of public attendance at museums shows that that demand is being met.
    Mr. Fisher: The Minister knows that the charges that are being introduced at the Natural History museum on Wednesday and at three other museums are not, as he has tried to imply, to develop services but to protect basic services for the public. It is because the Government are not providing adequate resources that those trustees are being forced to do that.
    Does the right hon. Gentleman not understand that the 40 per cent. drop in attendance at the Natural History museum that the trustees anticipate, to which my hon. Friend the Member for Newham, North-West (Mr. Banks) referred, represents 1 million people next year? That is the scale of the Government's neglect—1 million fewer people will visit the Natural History museum next year.
    Mr. Luce: The hon. Gentleman is talking nonsense. There is evidence that, as was the case at the National Maritime museum, there is a drop in attendances for the first few months after the introduction of charges, but that attendances pick up as people get used to the idea of paying. That is the evidence of experience and the hon. Gentleman cannot get away from it. To suggest that we are not increasing resources for museums and galleries is pure nonsense. There has been a real increase of 13 per cent. since 1979–80, and the hon. Gentleman ought to have the grace to accept that fact.

    West Midlands
    Mr. Georgeasked the Minister for the Arts what is his estimate of the number of young people attending arts events in the west midlands.
    Mr. Luce: Separate records by age distribution are not kept. West Midlands Arts supports four arts centres, which it is estimated that 500,000 young people attended in 1986–87. Many young people attend the Royal Shakespeare theatre, the concerts of the City of Birmingham symphony orchestra, and the many other arts events presented in the west midlands.
    Mr. George: I am grateful for that answer. Is the Minister aware of the enormous upsurge of interest among young people in urban areas in the arts and cultural activities? Regrettably, that interest is not being properly harnessed because local authorities do not have statutory responsibilities for the arts, funding has been somewhat curtailed and the Arts Council awards have not met the aspirations of the west midlands region. Can the Minister suggest any inititiatives that he or the Government could take to harness the interests of young people who want far more to do with arts and cultural activities?
    Mr. Luce: I agree with the hon. Gentleman that it is singularly important to encourage young people to attend arts events and the figures that I gave of at least 500,000 attendances during this financial year at the four great arts centres in the west midlands—which are supported by £417,000 of taxpayers' money donated by the West Midlands Regional Arts Association — show what is being done, in addition to our education system, to encourage our young people.

  CIVIL SERVICE

    Civil Servants (Directorships)
    Mr. Chapmanasked the Minister for the Civil Service what initiative he is taking to encourage appropriate civil servants to seek unpaid, non-executive directorships of United Kingdom companies.
    The Minister of State, Privy Council Office (Mr. Richard Luce): The report on the work of the Management and Personnel Office, which was published in January, referred to non-executive directorships as one of a number of ways in which the Government encourage the interchange of staff between the Civil Service and industry and commerce.
    Mr. Chapman: I welcome that initiative and development. I know that my right hon. Friend agrees that it is to the benefit of the country as a whole that there should be a greater interchange between civil servants and industrialists and business men, and I recognise the difficulties of secondments being full time. Will my right hon. Friend look carefully at part-time interchanges, not only with more civil servants taking up non-executive directorships, but with more industrialists and business men being appointed to ad hoc advisory bodies dealing with administrative problems of the Civil Service?
    Mr. Luce: I agree with my hon. Friend that the more interchange that we can get between the public sector and the private sector, the better it will be. About 40 civil servants have outside, non-paid directorships and they are getting important experience which will be of benefit to the Government. As my hon. Friend knows, there are a number of other schemes. I have improved the targets for the Government and industry secondment scheme, and there is also the straightforward possibility of bringing in outsiders on contract, which can help the Government's service.
    Mr. Wrigglesworth: I welcome the numbers that the right hon. Gentleman quoted and I hope that they will be increased. Will he acknowledge that business men can learn a great deal, particularly at senior levels in the Civil Service, where they operate in a completely different environment, which is useful to them when they return to their business careers?
    Mr. Luce: I agree completely with the hon. Gentleman. It is important that we should continue to encourage business men to come in on secondment. Just under 200 do so at present, and I am trying to encourage more to come in. It is good, not only for them, but for the Civil Service, which benefits from their experience.
    Mr. Soames: I welcome the steps that my right hon. Friend has taken, but does he agree that the secondment figures are lamentably low and that an interchange of staff

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    is immensely to the benefit not only of civil servants but of business men? Will my right hon. Friend and his colleagues exert their political will — that is what is required — to ensure that there is more coming and going between industry and the Civil Service?
    Mr. Luce: I accept that the number of civil servants with non-executive directorships is very low. It is only a start in the right direction, but I agree with my hon. Friend that it is important to persuade more businesses to take on civil servants so that they can get valuable experience. The Government and I will do whatever we can to encourage that process.
    Mr. Tony Banks: Is the Minister not worried about the close links between the Civil Service and big business, given the various recent allegations about Ministry of Defence staff becoming involved in work for manufacturers supplying Government contracts? Ought not the Minister to advance with considerable caution, in view of concern about the possibility of corruption?
    Mr. Luce: Of course it is important to establish that there is no clash of interests. However, the hon. Gentleman seems to have a hostile attitude towards the private sector. If we as a nation are trying to create more wealth, the more civil servants who have experience of wealth creation, the better it will be for the country.

    Recruitment
    Mr. Peter Bruinvelsasked the Minister for the Civil Service what representations he has received from Civil Service unions regarding recruitment; and if he will make a statement.
    Mr. Luce: None, sir.
    Mr. Bruinvels: Is my right hon. Friend aware of the difficulties facing management—certainly in Leicester—and the Civil and Public Services Association, over the concept of whether overtime should be offered or more casual staff taken on? Does he agree that offering flexible pay nationally is a good concept? If a no-strike clause were brought into the contracts of all new civil servants, would we not have the best Civil Service in the world?
    Mr. Luce: I agree that it is important to have a more flexible pay scheme, designed to encourage better recruitment as well as retention of civil servants. The Government are making positive moves in that direction. There is already evidence in certain professions—for example, engineering and science as a whole—that both recruitment and retention are very much better.
    Mr. Alton: Does the Minister agree that it would be unnecessary to embark on a major recruitment policy if civil servants were not used for extraneous duties, such as helping to complete tax returns and giving special advice to Ministers?
    Mr. Luce: That is a very petty question, and it is not worth answering.
    Mr. Key: Will my right hon. Friend confirm that it is Civil Service policy that, when disabled people are to be recruited, they are automatically interviewed at the point of entry? Will he also confirm that, once a disabled person has been recruited, every attempt is made to ensure that that person is placed in an appropriate job, rather than
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    being given a job that is too demanding and then experiencing the disappointment of being sacked or moved elsewhere?
    Mr. Luce: In answer to my hon. Friend's first question, I shall double-check the position.
    The Government and the Civil Service employ a 1·4 per cent. quota of disabled people, which is entirely in line with the national position. We are doing our utmost to play our part in that regard.
    Mr. Winnick: Should not those employed in the public service be very disturbed lest, if the Government are re-elected—however unlikely that is—civil servants may be unable to take strike action, or may even be forbidden to belong to a trade union, as happened with GCHQ? Bearing in mind what is happening with the teachers, should not the warning issued by the hon. Member for Leicester, East (Mr. Bruinvels) be heard by those employed in the public service?
    Mr. Luce: As usual, the hon. Gentleman is talking nonsense. I was interested to note that the Select Committee on Treasury and Civil Service expressed the view last year that the Civil Service provided an impartial service and was loyal to the Government of the day. That view received all-party support.
    Mr. Favell: Are the Civil Service unions relaxing their opposition to the relocation of Civil Service jobs in the north, where many well-qualified people are ready, willing and able to do work that could be done far better there than in the south?
    Mr. Luce: If both relocation policy and dispersal policy are taken into account — just under 6,000 employees have been dispersed since 1979—a considerable number of people are being relocated on grounds of economy arid efficiency.
    Dr. McDonald: Will the Minister note and report to his right hon. and hon. Friends the Opposition's alarm at the proposal to cut 433 civil servants in jobcentres who are engaged in helping people to find jobs and also at the proposal to increase the numbers who are employed in the restart scheme, who are concerned merely with discouraging people from claiming benefit, thus reducing the numbers of the unemployed? Will he note this alarm and immediately reverse the policy, because the prime purpose of civil servants in the jobcentres should he to try to enable people to find jobs.
    Mr. Luce: The hon. Lady spoilt her case by making quite untrue allegations about the activities of civil servants in discouraging people from claiming benefit. She ought to withdraw her remarks.
    As for the size of the Civil Service, the Government have made it quite clear that we shall be entirely flexible, if there is a strong case for improving services. We have done that with Customs and Excise and also with the Inland Revenue, and we have increased the numbers in the Department of Health and Social Security. If there is a case, we consider it carefully.
    Mr. Rhodes James: On a point of order, Mr. Speaker. In view of the unsatisfactory nature of the reply to my supplementary question on question 40, I beg to give notice that I shall raise the matter on the Adjournment.
    Mr. Adley: On a point of order, Mr. Speaker. We all admire the enthusiasm of the hon. Member for Stoke-on-Trent, Central (Mr. Fisher) and the large number of oral questions that he has managed to have placed on the Order Paper—
    Mr. Speaker: Order. That is not a point of order. It is encouraging that there should be this interest in the arts.
    Mr. Adley: My point, Mr. Speaker, is that, by my estimate, 35 of those hon. Members who had oral questions on today's Order Paper were not here, and I am wondering how many of them gave you notice that they would not be here. It costs the public a great deal of money to have questions placed on the Order Paper, and if hon. Members cannot be bothered to turn up public money is wasted.
    Mr. Forth: Further to that point of order, Mr. Speaker.
    Mr. Speaker: Is it helpful?
    Mr. Forth: Yes. In the context of what was said by my hon. Friend the Member for Christchurch (Mr. Adley),
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    following a day such as today, will you consider instructing the Table Office that if an hon. Member who is lucky enough to have his question drawn does not turn up to ask his question, it should not accept another question from him?
    Mr. Speaker: Order. I do not think that the House as a whole would welcome that suggestion. There may be very good reasons why an hon. Member cannot he present. However, the tabling of questions is undoubtedly costly, and hon. Members who have questions on the Order Paper, particularly if they are high on the Order Paper and likely to be reached, should be present. If they cannot be present, it would be of great convenience to let the Chair know so that their names are not called.
    Mr. Heffer: Further to that point of order, Mr. Speaker. Should the House not remember what the late Sir Gerald Nabarro once said—that hon. Members should not put down a question unless they know the answer?
    Mr. Speaker: I am lost for words.

Orders of the Day

  Landlord and Tenant (No. 2) Bill
  Order for Second Reading read.
  3.33 pm
  The Minister for Housing, Urban Affairs and Construction (Mr. John Patten): I beg to move, That the Bill be now read a Second time.
  It is not always that a Minister has the fairly pleasant experience of asking the House to give a Second Reading to a Bill that will probably command support in all parts of the Chamber. I very much hope that this may be such a Bill. We are also very lucky to have the hon. Member for Norwood (Mr. Fraser) leading for the Opposition, because he knows a great deal about the law in this sector. I wish him well in dealing with his speech with his remaining good eye. Gardening is a very dangerous pursuit indeed.
  Mr. Peter Thurnham: Will my hon. Friend give way?
  Mr. Patten: On the gardening point?
  Mr. Thurnham: Yes. It is a question of support from the House. Perhaps the hon. Member for Norwood (Mr. Fraser) feels that there would be even greater support if the provisions of the Landlord and Tenant (No. 1) Bill could he incorporated in the Government's Landlord and Tenant (No. 2) Bill.
  Mr. Patten: I shall come in a moment to the difficult issue of the Landlord and Tenant (No. 1) Bill. I have serious things to say to my hon. Friend about it.
  The Landlord and Tenant (No. 2) Bill is a very important and far-reaching measure that is designed to help a large group of people, some, though by no means all — I stress that point — of whom have suffered real housing problems in recent years. Just as there are good and bad tenants, so there are good and bad landlords. The Bill is aimed at the latter.
  The Bill has the peculiar name of the Landlord and Tenant (No. 2) Bill. Hon. Members may wonder what happened to the Landlord and Tenant (No. 1) Bill. My hon. Friend the Member for Bolton, North-East (Mr. Thurnham) introduced his Bill under the ten-minute rule and chose our title, causing us considerable inconvenience and massive public expenditure on the junking and reprinting of perfectly adequate Bills which we were about to put before the House. That does not mean that we are not, in a broad-minded way, prepared to consider the proposals in the Landlord and Tenant (No. 1) Bill. I have no doubt that my hon. Friend will seek to explain today exactly why we should follow the course proposed his Bill.
  This Bill is about 500,000 households, a high proportion of them in London and the south-east. It is about households in privately owned flats. Many live in so-called mansion blocks — sometimes that is a good term, and sometimes a bad term for the state in which people live. The Bill applies also to the large number of purpose-built blocks of flats erected between the wars and in the last 20 years, and to converted houses. About two thirds of these households are long leaseholders and the remaining third are Rent Act tenants.
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  This is not the first time since 1979 that this Government have legislated to increase protection for residents in private flats. Our Housing Act 1980 included some useful new rights for tenants of flats paying variable service charges. However, evidence soon began to emerge of more deep-seated problems which needed to be tackled. The complaints will be familiar to hon. Members from constituency correspondence., particularly in London, and other areas, including south coast towns.
  Some tenants suffer from excessive service charges and others from indifference or neglect by the landlord and his or her agents, from defective leases which make it impossible to get things done, from difficulties in contacting the landlord and from problems over greatly increased insurance and so on.
  As a result of pressure we decided in 1984 to establish a committee, under the chairmanship of Mr. Edward Nugee QC, to collect evidence of the problems and to make recommendations about how to deal with them. The Bill is based almost entirely on that committee's recommendations, although in some important respects we have decided to go a little further than the committee suggested.
  I should like to make two general points about the Bill before describing its contents briefly in the normal way. First, I see the Bill as a consumer protection measure. It gives an important range of new rights to a group of hard-pressed consumers who need help to deal with a particular set of problems. I stress that the Bill is even-handed. It is not in any sense an anti-landlord Bill. There is nothing in the Bill which the good and responsible landlord should fear. We want more good and responsible landlords, with the involvement of building societies, pension funds and others. The Bill is aimed at bad, irresponsible and neglectful landlords—no one else. We wish to protect the long leaseholders and the Rent Act tenants of those landlords.
  Secondly, the Bill is further evidence of the Government's balanced approach to housing problems. The Bill shows again that where there are genuine difficulties or serious abuses we are ready to act to counter them. We believe that the provision of housing should be primarily a matter for the independent sector, but of course we are prepared to regulate the independent sector to give people statutory rights, where that is necessary.
  I turn briefly to the Bill's content and show how that will be done.
  Mr. David Winnick: At the beginning of his speech the Minister pointed out that the Bill had the full support of Members on both sides of the House. Does he not agree that the type of abuses with which he rightly intends to deal, and about which we have been pressing for action for some time, illustrates the need to ensure that other tenants, not necessarily covered by the Bill, continue to have the protection given to them by the Rent Act 1977? The Minister has suggested that such protection may disappear, in the unlikely event of this Government being returned. Does he not agree that that would present to so many people the tremendous dangers that he has been speaking about?
  Mr. Patten: I am extremely glad that the Opposition are so interested in this important issue that as many as four Labour Members have turned up for the debate.
  Mr. Winnick: Answer the point
  Mr. Patten: I am about to do so.
  Ministers have said time and time again, and I repeat it now, that we have no intention of upsetting the security of tenure of those who are presently living in secure accommodation in Britain. If I have said that once since I have held my present position, I must have said it a dozen times. Unfortunately, there are those who are too deaf to hear and those who seek by smear to alarm unnecessarily private sector tenants. We are used to such tactics—
  Mr. Winnick rose—
  Mr. Nick Raynsford rose—
  Mr. Patten: I will not give way. It was a grevious mistake to give way once. I am trying, in my normal subfusc way, to get the Bill, which I believe has all-party agreement, through as quickly as possible this afternoon. Perhaps we could save the general roustabout tactics of the hon. Member for Walsall, North (Mr. Winnick) and his hon. Friends for other occasions.
  Part I of the Bill gives tenants a right of first refusal where the landlord wishes to dispose of his interest in a block of flats. That is certainly not a new thought. The British Property Federation has already issued guidance to its Members suggesting that, when they wish to dispose of a block of flats, they should, where possible, give the residents the opportunity to bid for it when it goes on the market. I applaud the federation for its characteristically constructive approach to this matter.
  The Nugee report suggested a procedure based on offer and counter offers that would give the tenants first refusal at a price to be negotiated between the parties within a set timetable. If the landlord fails to go through the procedure and sells to someone else, the tenants may buy back the property at the same price and on the same terms.
  Part II enables any tenants of flats, whether long leaseholders or rack-renting tenants, to apply to the court for the appointment of a manager to assume responsibility for the management of the premises containing the flats where the landlord has failed to discharge his obligations under the terms of the lease. This gives residents a practical remedy in blocks that have been neglected and where the landlord, as sometimes is the case, has refused to put matters right.
  Part III enables the majority—I stress majority—of leaseholders of flats in a block, let wholly or mainly on long leases, to apply to the court for an order to acquire compulsorily the landlord's interests where the landlord has failed to discharge his obligations and the appointment of a manager would not be an adequate remedy of last resort in cases where the landlord has behaved exceptionally badly. Alas, that is sometimes the case.
  Part IV enables a court to vary the terms of a long lease of a flat in certain circumstances. It provides that, if a long lease fails to make satisfactory provision for the management of the flats, any party to the lease may apply to the court to vary it. This is an extremely important part of the Bill because it enables the landlord and the majority of long leaseholders of flats to apply to the court for an order to vary all the leases in the block where some changes affecting the entire block are desirable but where a minority of the leaseholders withhold their consent.
  Mr. John Heddle: I am grateful to my hon. Friend for allowing me to intervene to ask a specific question. He has referred twice to a "majority of
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  leaseholders". Does that mean the numerical majority or the majority when it comes to the aggregation of the rateable value of the properties? In London especially many properties are let on long lease or sold on long lease interests with high rateable values, with a few on low rateable values. What is my hon. Friend's definition of "majority"?
  Mr. Patten: It is the definition that is set out in the Bill, which my hon. Friend will have read carefully. He has raised an issue that we shall have to consider extremely closely in Committee.
  Sir Hugh Rossi: My hon. Friend speaks repeatedly of blocks of flats, and it would seem from clause 3 that the only exclusion, apart from service occupancies, for example, is a tenant of more than 50 per cent. Of the total number of flats in the building. If a house has been converted into two flats only, is the right exercisable because each tenant will not be a tenant of more than 50 per cent. Of the building?
  Mr. Patten: Such tenants may well be exempt in any event. I was careful in my introductory remarks to say that I was not referring only to mansion flats. I said — I quote from the introduction of my speech—
  "the Bill applies also to the large number of purpose-built blocks of flats erected between the wars…and to converted houses".
  We may have to return to the issue in some detail in Committee, but I am grateful to my hon. Friend for raising it now.
  Part IV enables a court to vary the terms of a long lease of a flat in certain circumstances. It provides that, where a long lease fails to make satisfactory provision for the proper management of the flats, any party to the lease may apply to the court to vary it. This part of the Bill enables the landlord and a majority of long leaseholders of flats to apply to the court for an order to vary all the leases in the block—this relates to the issue raised by my hon. Friend the Member for Hornsey and Wood Green (Sir H. Rossi) — where some change affecting the block as a whole is desirable but where a minority withholds its consent. These provisions will help to overcome the common problem of defective leases, and it will enable landlords and residents to make changes to their leases which are desirable but not essential, such as setting up a sinking fund, which many would think to be an excellent idea, as a hedge against expenditure on major matters such as roofs, lifts, the refurbishment of common parts, damp coursing and drain repairs which are necessary in mansion blocks of flats.
  Part V deals directly with the management of blocks of flats. There are those who criticise management companies that act on behalf of ground landlords, which have been the cause of problems in the past, as well as ground landlords. Clause 39 strengthens the provisions in section 18 to 30 of the Landlord and Tenant Act 1985 relating to flats and extends them to other residential dwellings. Clause 40 gives a recognised residents' association the right to be consulted about the appointment of managing agents. This provision is not the result of a recommendation in the Nugee report, but we thought it important to include it. In many mansion blocks of flats, groups of tenants have banded together in a tenants' association. If there is to be a change of managing agents, it would seem reasonable that they should be consulted.
  Mr. John Wheeler: My hon. Friend will know that I served as a member of the Nugee committee. There was considerable evidence suggesting that many residents would feel more confident if they had some reasonable and balanced say on the appointment of managing agents. I say to my hon. Friend on behalf of my constituents that many thousands of people throughout the country, but especially in London, would much appreciate the extension of the Nugee committee's recommendations to include this part of the Bill.
  Mr. Patten: I am grateful to my hon. Friend for what he has said, with characteristic generosity, as someone who gave such distinguished service to the Nugee committee.
  Clause 41 extends the permissible objects of registered housing associations to the management of blocks of flats.
  I need not detain the House long on parts VI and VII. Part VI extends a residential tenant's right to information about his or her landlord's name and address. It provides that the landlord's written demand for rent or service must contain an address in England or Wales at which notices may be served on him or her by the tenant. This is a problem, not just in London, but in the coalfield communities and the north-west. Part VI also inserts new provisions into section 3 of the Landlord and Tenant Act 1985, which make the former landlord — I stress the word "former" —liable for any breaches of obligations under the tenancies until such time as he or the new landlord notifies the tenant of the new landlord's name and address. In other words, there is no way in which a former landlord could or should slip out of the contractural obligations to which he or she is already party simply by failing to notify the tenants of a new landlord's name and address to whom he or she has sold the interest in the block of flats.
  Part VII deals with miscellaneous points.
  There are other matters that we have not yet been able to include within the Bill. The Nugee committee made a number of important recommendations about insurance and the treatment of service charges which are not yet, alas, covered in the Bill simply because there was not time. However, we propose to bring forward amendments during the Bill's passage through the House which will be drafted purely in the interests of tenants along the lines suggested by the Nugee committee.
  The Nugee committee also recommended the appointment of housing assessors in the county court to provide residents with a much speedier means of obtaining legal redress. I know that that has upset many tenants in mansion flats — and I use that phrase generically to cover all such people affected by the Bill. That is an issue which needs to be considered in the context of the future of the civil justice system as a whole. I am pleased to be able to tell the House that the Lord Chancellor's civil justice review committee looked at that question and proposed "housing action", something along the lines of the small claims procedure which, if adopted—perhaps it will be—should go a long way to meeting the Nugee committee's recommendations about redress being sought much more easily by those who need it.
  I must not conclude without paying tribute to the members of the Nugee committee and to its distinguished chairman for the effort that they put into collecting evidence and analysing the problems and for the extremely
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  balanced way in which the committee formulated its proposals to reflect the considerable range of interests involved.
  If the House will allow me, I should mention the prominent part played by a number of hon. Members in bringing the problems in this area to the attention of the House. I have already had the opportunity of thanking my hon. Friend the Member for Westminster, North (Mr. Wheeler), who was a member of the Nugee committee. I certainly could not forget, and generations of Ministers responsible for housing could not forget, the efforts made in the interest of mansion block tenants by my hon. Friend the Member for Kensington (Sir B. Rhys Williams). He has introduced more private Members' Bills than many of us could lay claim to over the years, and has done such a lot in the interests of his constituents, as has my hon. Friend the Member for Hampstead and Highgate (Sir G. Finsberg), who was a distinguished Minister responsible for housing and has shown great interest in this matter arid has focused public attention on the issues dealt with in the Bill.
  Hon. Gentlemen's pressures led us to set up the Nugee committee in the first place. The committee reported, and we accepted its report on 8 April 1986. Less than a year later we are bringing forward a Bill to put its recommendations into effect. This is a token of our determination to help mansion block tenants with their problems. [Interruption.] I am sure that no one heard that comment. The word "bloody" would not be recorded by Hansard in any event.
  Mr. Stephen Ross: I congratulate the Minister on introducing the Bill. However, it is a little late in the Session. It might suffer an instant decline if there is an early general election.
  Mr. Patten: Such is the all-party support that I know that the Bill will receive and such will be the excellence of the scrutiny that it will receive in Committee, I am sure that it will pass rapidly through to law in the interests of tenants. I am certain that no hon. Member, now or later, would want to vote against the Bill. However, I suppose that within the alliance there may well he internal tensions about which we are not yet privy which may lead alliance Members to vote against each other in the way we have seen from time to time. Alas and clack, the hon. Member for Isle of Wight (Mr. Ross) has made one of his valedictory appearances in the House. However, no SDP Member has been able to attend this afternoon. I dare say that were there to be a vote we would find alliance Members voting with the official Opposition, as they normally do. Dear oh dear, Mr. Deputy Speaker, I am afraid that I have allowed the hon. Member for Isle of Wight to introduce an unnecessarily political element into the debate. I must return to my normal, calm, consensual approach to matters and begin my peroration.
  The present Government have done much more to promote housing rights than any other in post-war years. I want to itemise what we have done. We have given public sector tenants a whole range of rights. We have given them the right to security of tenure which they did not have before 1980, the right to buy their own homes, the right to get repairs done, and the right to be consulted about matters affecting their tenancies; and today sees the Second Reading of the Landlord and Tenant (No. 2) Bill which will significantly strengthen the rights of private

  769
  leaseholders living in blocks of flats. A common thread that runs through the Government's housing policy is the objective of giving people more choice in the types of housing available to them and more influence over the way in which their housing is managed in the public sector or, as we are considering today, in the private sector.
  The Bill provides a framework for the orderly management of flats in private ownership. All residents, whether they are long leaseholders or renting tenants, have a right to expect that their homes will be properly managed. I believe that our proposals will provide for that and will bring the general level of management of flats much closer to the standards already achieved by the many good landlords and managing agents in this country. I commend the Bill to the House.
  3.57 pm
  Mr. John Fraser: The Opposition welcome the Bill because it carries with it much that we have campaigned for and much that is Labour party policy, although I do not for one moment detract from the campaigning that has been carried out on both sides of the House. It was particularly significant that one of the first defeats of the Conservative Government in 1980 during the passage of the Housing Act 1980 was engineered by the hon. Member for Hampstead and Highgate (Sir G. Finsberg) and supported by the Opposition. Indeed, he would not have achieved that defeat without our assistance.
  Sir Geoffrey Finsberg: As the hon. Gentleman put that on the record, I must state that I was a Minister in 1980. I actually did what he said in 1971.
  Mr. Fraser: I beg the hon. Gentleman's pardon for not attributing his rebellion to the right period.
  The Bill represents a great deal of what is Labour party policy, although I do not dissociate myself from criticisms made about the present law which have been raised by hon. Members on both sides of the House. If we have a criticism of the Bill—it is a constructive criticism—it is that it ought to go further along the road of leasehold enfranchisement.
  I also welcome and endorse the Minister's remarks about the work and inventiveness of the Nugee committee which laid the foundations of the Bill. The committeee was bold, forthright and imaginative within its terms of reference. It did what many committees ought to do; it pushed its terms of reference to the limit, and I congratulate it on that. There were Labour nominees on the committee, including Mr. John Mills, as well as Conservative nominees, and it deserves rounded congratulations. The committee consulted properly and caught the mood of tenants in the way in which it set about the questionaires and the need to correct the gross abuses indulged in by some unscrupulous landlords and other abuses just as injurious to tenants resulting from plain incompetence and neglect by landlords with no ability to manage property.
  The Nugee committee was also right to address itself to the defective constitution on which the relationship between landlord and tenant in a lease was often based. It is recognised that the contractual bundle of rights and obligations which constitute a lease have often turned out
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  to be defective not because they were badly drafted but sometimes due to the passage of time and sometime because landlords, who have essentially dictated the terms of leases, have tended to draft them in such a way as to foist the maximum obligations on the tenant while accepting the minimum for themselves. For instance, it is by no means uncommon for a long lease to give the landlord no obligation to repair, although there is an obligation on the tenant to contribute to service charges, and it is commonplace for the landlord to have no obligation to repair unless a service charge is paid in advance. Many leases are also regarded by building societies as defective because the arrangements for insurance are inadequate, often not covering full replacement or the full range of risks. Policies may not be index linked and some leases do not oblige the landlord to produce the policy or to note the interest of the tenant on it.
  In other cases, leases have become defective due to the collapse of management companies. In a recent case 20 or 30 tenants were deeply concerned because when the lease was originally established the landlord had taken no responsibility for management or repairs but had set up a management company responsible for services, insurance and repairs. That is common practice, but in that case the management company was struck off and ceased to exist as a result of incompetence on the part of the managers, with the result that no one is responsible for repairs or insurance, everything rests on the good will of the tenants and most of the leases are unsaleable.
  It is good practice among landlords to form management companies and to vest them entirely in the tenants so that there is a coincidence of interests, partly to give tenants greater rights and partly to relieve landlords of responsibilities. A reasonable charge should be made for management, but there should be no profit in it. In some cases the landlords have run the managing company but then lost interest and the company has collapsed, to the consternation of the tenants whose interests often became unsaleable. I hope that the Bill will follow best practice so that wherever, possible management is in the hands of the tenants.
  Following years of pressure and campaigning, the Bill is an essential addition to the law of landlord and tenant and redresses the imbalance which so often exists between the parties to a lease. I hope that the Minister will not blush or regard it as an attack when I say that it is a fine Bill and a remarkable conversion, giving private tenants the option to buy their blocks irrespective of the length of their leases. Clause 4 of the Bill is very much like clause four of the Labour party constitution in that it advocates the social ownership of property in the hands of the tenants. We are glad that the Government have come round to endorsing that aspect of our constitution. It has always been Labour party policy and it sits well beside our proposal to give private tenants the right to buy which has so far been denied to them. In the meantime, the Bill at least gives them the collective right to buy.
  Mr. Wheeler: As the hon. Gentleman knows, I have long been involved in this subject. The Nugee committee explored very carefully the concept of the right to buy, but there is a difficulty. Every private sector resident has the right to buy in that he is free to seek to negotiate with the owner of the property and to discover whether the owner is prepared to sell. One or two constituents have written

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  to me saying that they would like to buy, but when I ask whether they have approached the landlord, the answer usually is no. In cases in which the landlord is willing to sell, the landlord has been willing to allow time for residents to put forward a purchase package. This is the dilemma. If there were real evidence of a case to extend the law, I would agree with it, but has the hon. Gentleman found such a case? The Nugee committee did not seem to have found one, and I have not found one either.
  Mr. Fraser: I think that it is a matter of judgment. The right to buy has been invested in local authority tenants. That is no longer a matter of serious dispute except in areas where there is an acute shortage of housing for rent, which is a special problem in areas such as London and particularly in the hon. Gentleman's constituency. The right was recognised in the Leasehold Reform Act 1967, which was described as "Rachmanism in reverse" by the now Lord Boyd-Carpenter, and is no longer in dispute at all, but I think that social progress has advanced sufficiently for both the collective and the individual right to buy to be extended to private tenants. No doubt that matter can be explored further in Committee. I was certainly not criticising the Government. Indeed, I was congratulating them.
  Sir Hugh Rossi: During the passage of the 1967 legislation, I succeeded in Committee in removing the rateable value limits, but the Labour Government reinstated them on Report after representations from the universities and others. Despite many requests from the Conservative Opposition for flats to be included, the Labour Government resisted that proposal. Are we to understand that there has been a complete change in Labour party thinking and that the Labour party now advocates the removal of all rateable value limits and the extension of leasehold enfranchisement to all flats?
  Mr. Fraser: I shall not give an unconditional answer to the hon. Gentleman's question about rateable value limits, but personally I see no logical case for them. As for the enfranchisement of leasehold interests, this has long been Labour party policy and I shall deal with it in more detail later in my speech.
  The Bill is also remarkable as a denial of the supremacy of private landlordism which in other areas seems central to Conservative party policy. We believe that the management of rented premises is best carried out by responsible and accountable landlords, preferably the tenants themselves. We have supported the assured tenancy scheme because the landlords involved are responsible and are approved by Parliament. Incidentally, I saw the Minister on television recently—it is a great pity to have one's Sunday disturbed by seeing one's opponent on television—seeking to suggest that assured tenancies were somehow a substitute for the loss of hundreds of thousands of rented homes. Despite the fact that Members on both sides of the House have endorsed that development, it should be put on record that, during the past six years, it has provided only about two homes per week to rent. It is irrelevant to the central problem of providing homes to rent for those on low incomes.
  This Bill is a denial of the supremacy of private landlordism. It is remarkable in that it gives the private right of compulsory purchase where landlords are dishonest and unscrupulous, or plain inadequate.
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  In part I no distinction is drawn between the option to be exercised by tenants, irrespective of whether they are long leaseholders or short leaseholders. The right of compulsory acquisition is invested only in the long leaseholder, rather than in leaseholders of all descriptions. However, it might be worth while to consider extending the right of compulsory acquisition across the hoard. Nevertheless, if it is restricted only to long leaseholders, it is still a remarkable conversion. It is worth having analogous developments in other areas of land law, including for business, as well as residential tenants. Those rights should exist in industry also.
  The Minister has set out the details of the Bill and the way in which it matches the Nugee report. I do not intend to deal with the Bill in detail at any great length because we shall have the chance to do that in Committee. I have only a couple of observations. The provisions of part III should be available to all tenants. Part IV, dealing with the modification of covenants, is extremely important. Covenants are sometimes defective, but sometimes they have simply been overtaken by progress. The definition of a defective covenant should extend to leases under which there is insufficient provision for the improvement of the property, as well as for its management and repair. I shall give an example from a mansion block in my constituency which has a problem with its central heating system. One can repair a central heating system for as long as one likes, and manage it as well as one likes, but this system is plainly defective, out of date, and in need of modernisation. I have tried to get the landlord to agree to what the tenants want and to modernise and improve the heating system.
  Therefore, the definition of that which is defective in the lease, in the light of progress and of developments, should include improvements as well, although there must be provisions to protect those tenants who cannot afford expensive improvements. However, double glazing, which cuts heating costs, and the provision of door entry systems are improvements and not repairs. The same is true of the modernisation of a heating system or the insulation of a roof. Many such measures should be available to landlords and tenants collectively. I hope that we shall consider that part of the Bill constructively to see whether it can be extended to sinking funds and improvements.
  This is an important and welcome Bill, but if it is passed in the form in which it appears today it will be deficient. I say that in a constructive rather than a highly critical sense. A deficiency will remain in the inevitable disparity between landlord and tenant. In some circumstances, that relationship will be open to abuse. I do not castigate every landlord, but, in my experience, the balance is tipped almost unconsciously in favour of the landlord on almost every occasion, despite the fact that the landlord may be large, reputable or charitable. I define a charitable landlord as one whose constitution is accepted by the Charity Commissioners, and not one who is charitable in the humane sense. I believe that the hon. Member for Westminster, North (Mr. Wheeler) knows of some charitable landlords, but such landlords are sometimes among the hardest. They develop the longest schedules of dilapidations and create the largest surveyors' costs when drawing up the schedules. One has only to consider hospital foundations, Dulwich college or the Church Commissioners. Being a charitable landlord does not mean that one is the most benign landlord on earth.
  We need further to redress the imbalance between landlord and tenant. The disparity of power applies to

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  residential and commercial properties alike. It is about time that we put an end to the monstrous doctrine of privity of contract on leases, and to what is called the liability of the original lessee. That militates against the interests of the commercial and business tenant because somebody who signs a lease may be liable upon the terms of that lease for the rest of his life. Twenty or 30 years may go by and a perfectly innocent residential or business tenant who has no control and could never have any control over subsequent events under the lease may find himself liable for non-payment of rent or for the dilapidations.
  Mr. John Patten: Is the hon. Gentleman aware that the Law Commission is currently considering that issue? We must wait and see what the commission proposes on privity in relation to private and residential lettings.
  Mr. Fraser: Yes, I was aware of that. I often pressed the Minister's predecessor, the hon. Member for Eastbourne (Mr. Gow), to refer that matter to the Law Commission because I was so incensed about it.
  Another example is the way in which the covenants can be balanced between the two parties. In a consumer contract, it is unthinkable that one may hire a car under a contract containing a provision that the hirer of the car will put and keep it in good repair, and that if one then hires a car with a defective engine the person hiring out the car expects one to replace the engine after having hired the car for a few days. However, in a landlord and tenant transaction, such a contract is perfectly thinkable. There have been cases in which a landlord has put into leases an obligation to put and keep in repair. However, the cladding may fall off the building or the heating system may be full of asbestos. Despite the fact that the landlord has developed the building, he puts on the tenant the obligation for putting right his own faults. That cannot be right.
  I turn to a matter with which the Bill should certainly deal — the right of the long leaseholder to extend the lease of his flat. In the residential sector, the inability to extend one's lease will remain the outstanding opportunity for abuse of power by unscrupulous landlords. That opportunity for abuse will grow as the totality of leases gets shorter. As with every other unfair practice, it is no answer to say that the parties are free to reach a bargain between themselves. It is no answer to say, as did the hon. Member for Westminster, North, that they are free to negotiate. That is an illusory freedom. Equality of bargaining power does not exist. The Bill should recognise the inequality of power between landlord and tenant in this area, as it does in the areas of management and repair.
  Therefore, the traditional party of the tenant, the Labour party, appeals to the traditional party of the landlord, the Conservative party, to modify the Bill and to tip the balance in favour of the enfranchisement of leasehold flats. The Government will say that that is not part of the Nugee report or recommendations. However, the committee could not recommend that because that was not within its terms of reference. Nevertheless, the opportunity to remedy the imbalance must be seized.
  My hon. Friends and I believe that the rights conferred by the Labour Government in 1967 on long leaseholders of residential houses should, 20 years later, be conferred
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  on the tenants of flats. That is Labour party policy. My hon. Friends and I believe that this legislative opportunity should be used to carry that policy into law.
  In our policy statement "Homes for the Future" we stated that tenants should have, first, the right to hire and fire managing agents. The Bill goes some way to meeting that, but it could go further. Secondly, we stated that there should be maximum limits for management fees. The Bill may bring that about. We stated, thirdly, that tenants should have the right to see the freeholder's accounts and to have them audited by an auditor of the tenants' choice. That is still the right way to go about it. The auditor should not be the servant of either the landlord or the tenant; he should be independent. I see no reason why he should not be appointed by the tenants, just as shareholders appoint an auditor for their company.
  Fourthly, we have said that tenants should have the right to correct defective convenants— for example, for repairs and insurance—and the Bill will do that. Fifthly, we have said that tenants should have the right collectively to buy the freehold and sixthly, the right to extend the lease in the same way as for leasehold houses.
  My colleagues and I have taken every legislative opportunity to put that policy into law. Indeed, I have forgotten how many Bills I have presented. We have taken every opportunity to present private legislation and to amend Government legislation. Now we have the ideal opportunity to give long leasehold tenants of residential flats the right to extend their leases. We could provide the right collectively to enfranchise leaseholders whether or not the enfranchisement is triggered by the malpractice or incompetence of landlords.
  Apart from the principle and the analogy with the Leasehold Reform Act 1967, there are other powerful reasons for allowing the extension of leases. First, when a lease has fewer than 50 years to run, the property becomes less mortgageable, so less saleable, unless the lessee takes a disproportionate drop in the price of the leasehold. Since the lessee will almost invariably want to buy another property, it is not fair to ask him to accept a reduced price. Secondly, a short lease puts the landlord in a unique position to extract an extortionate payment from the tenant. I shall not go through the long list of examples just from my constituency, but the conduct of some landlords has been unforgivable. Often when on an independent valuation the cost of extending the lease should be about £2,000, a premium of two or three times that sum is demanded. That is unforgivable and acts against both the public and the private interest.
  Thirdly, a tenant's inability to extend the lease means that there is a disincentive to modernise. A failure to invest sufficiently in housing, whether public or private investment, is one of the greatest failures of present housing policy. Fourthly, the presence of the fag end of leases led to horrendous conditions in Brixton, north Kensington and many other parts of London and our big cities. We cannot afford to take the risk again, because the fag end of leases of flats will lead to the same squalid conditions that appeared in the inner cities 20 or 30 years ago.
  We welcome the Bill, but we repeat that the reform of the law of landlord and tenant must go further. The Bill should not merely modify and check abuse and create rights which are triggered by abuse but should create new rights, such as the right collectively to buy the freehold whatever the circumstances and the right of an individual

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  tenant to extend a lease by 50 years in exactly the same way as a tenant of a leasehold house can. The Bill should provide for the emancipation and enfranchisement of leaseholders in principle as well as in the circumstances outlined by the Nugee committee.
  This is a valuable Bill and if the Government accept the Opposition's amendments, it will become invaluable.
  4.23 pm
  Sir Geoffrey Finsberg: Over the years the hon. Member for Norwood (Mr. Fraser) has certainly proved to be one of the most knowledgeable Labour Members on housing matters. Occasionally we wonder why he is not shadow Secretary of State for the Environment because his knowledge is so deep and detailed. On more than one occasion, I have crossed swords with him on matters of principle, but today there is not much between us, except perhaps on one issue.
  The hon. Gentleman was correct to point out that until this Bill there were a variety of problems to do with service charges, which have been causing increasing difficulties. He then charmingly chided the Government side for appearing to be converted to Labour's clause four. He overlooks the fact that the right of tenants to purchase their block applies only if the landlord wishes to dispose of it. That is the difference between us. There is no conversion to clause 4.
  The hon. Member for Walsall, North (Mr. Winnick) has temporarily left the Chamber but I trust that, perhaps after Second Reading, he may give us a dissertation. He said that we were late on the scene and that everything in relation to tenants' service charges had come from the Labour Government. Perhaps I could remind the House that the right hon. Member for Brent, East (Mr. Freeson), who, alas, is being pushed out by Mr. Livingstone, when he was Minister said:
  "I shall not go into case histories, as we accept that the case put to us is sufficient material for us to digest in one debating session. I say that to illustrate that I should like to look into the potential for public accountability, to the tenants and maybe to the community at large, via the courts or by some other procedure for the running of the financial and other aspects of management of such properties.
  I could go on to other headings with which I am concerned, but I underline that the kind of headings that I have indicated already would rank high in the review that I should wish to achieve with a view to future legislative and policy action."—[Official Report, Standing Committee B, 11 June 1974; c. 384–85.]
  Five years later when the Labour Government ceased to exist nothing had emerged. I gave the right hon. Gentleman notice that I would refer to him. I am not doing so in any unpleasant way and I am sure that he meant what he said. However, the collective leadership of the Labour party ranked the problems and issues of private tenants at the bottom of the list and they did nothing. The hon. Member for Norwood referred to our belated conversion, but the rights to vet managing agents and to an independent audit of accounts were suggested years ago by the Conservative party. Nothing was done by the Labour Government. The facts prove it: they had five years to do something, but they did nothing. On that one issue the hon. Gentleman has exposed clearly that, now that Labour thinks there is electoral popularity for this measure, it will come round to the view expressed by Conservative Members for many years.
  Mr. Heddle: Perhaps my hon. Friend's characteristic modesty will prevent him from saying that as a
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  distinguished Minister in the Department of the Environment he introduced, in the Housing Bill 1980, on the Committee of which I was pleased to serve, protection to public sector tenants through the tenants' charter. Does he agree that he gave public sector tenants the same rights as tenants in the private sector, as my hon. Friend the Minister has just said? That is further confirmation that the Conservative party looks after the rights of both public and private sector tenants.
  Sir Geoffrey Finsberg: Perhaps I should drop my mask of modesty and agree with my hon. Friend. The facts speak for themselves and no amount of long speeches from Labour Members or tendentious literature from the Labour party will do any more than show their facade. The facts show what Conservative Members have been pressing for and have been doing.
  Mr. Raynsford: Will the hon. Gentleman give way?
  Sir Geoffrey Finsberg: There will be plenty of time for the hon. Gentleman to make one of his notoriously long speeches, so I shall listen to it with great interest and I promise that I shall not interrupt him. I would not dare. I only wish that he would return to his previous incarnation running the Shelter Housing Advisory Committee where he did a first-class job. In those days, his speeches were not so long and they may have been wittier. We enjoyed them and our meetings with the hon. Gentleman when he wore that hat. After the general election I hope that he will wish to resume that task. which he did so well.
  I welcome the Bill. If one issue has predominated in my work in the House, it has been the rights of private tenants. As my hon. Friend the Minister said, it was possible to extend some of that work to the rights of public tenants, many of whom were treated as serfs. As he said, for too many years now, private tenants have suffered from bad treatment by a minority of bad landlords and equally bad managing agents. I shall refer to a couple of letters about recent events that I think will considerably disturb the House, particularly as one is from a firm of solicitors. One would not normally expect nonsense to be written by them.
  The first time that I attacked my Government was in 1971, as the hon. Member for Norwood said. I battled for a right to challenge service charge accounts, a right which, until then, had been non-existent. I had to fight my right hon. Friends. The then Minister was my right hon. Friend the Member for Brighton, Pavilion (Mr. Amery) and the junior Minister was my hon. Friend the Member for Birmingham, Hall Green (Sir R. Eyre). I beat them on the first vote. I was inexperienced then and did not know what would follow. The Whips became busy, and I lost the second vote, so my clause was not added to the Bill. However, my noble Friends in another place looked at the matter and were kind enough to make the first improvements.
  The next occasion on which there was the possibility of legislation was in 1974. The Housing Act 1974 was introduced in that short Parliament and much progress was made. I was able to persuade some Opposition Members to join me. They were the more intelligent ones, who are now no longer in the parliamentary Labour party. Mr. George Cunningham and Mr. Bruce Douglas-Mann both gave me support, but it was not sufficient to override what the Minister was able to do, and the Minister won

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  most Divisions by a majority of one. Then came 1980, when I had the privilege of being a departmental Minister. I could actually argue with officials from a position of some power. I could say to them that I was not interested in the difficulties that they told me about; all I wanted to know was how something could be done. As first-class civil servants, they found a way of doing it. A Back Bencher putting that point would find the argument against him to be overwhelming. He would not be in a position to say what I was able to say. Still not enough was done and loopholes have been emerging all the time.
  As my hon. Friend the Minister said, the 1985 Act made more progress. In particular, it did something important for public sector tenants. It gave them the right to ask for some co-operative management of their blocks of flats. Some blocks of flats, especially in London, could be better managed by tenants than by local authorities, because tenants live in them and they know what they want. I hope to be able to encourage tenants in some of the blocks in my constituency to ask Camden council to permit them to manage their own blocks. I shall be fascinated to hear the response—if I get it. Camden council staff are refusing to answer letters from councillors or Members of Parliament. That is the most disgraceful thing that I have known. I hope that Camden council will not pay the staff who are indulging in such anti-democratic activities.
  Mr. John Patten: Is my hon. Friend aware that in Committee, when the Housing and Planning Act 1986 was being considered, the hon. Members for Norwood (Mr. Fraser) and for Birmingham, Perry Barr (Mr. Rooker) strongly supported the right of tenants to apply to their local councils, such as Camden council, for the opportunity to manage their own blocks of flats? Does my hon. Friend suggest that, locally, Camden is not following Labour party national policy?
  Sir Geoffrey Finsberg: I would not wish to upset the hon. Member for Norwood by trying to associate him with some of the people who lead Camden council. He is far too respectable to mix in their company. For example, he would not have issued an invitation to Sinn Fein to address the council. I have a feeling that official Labour party policy will be ignored on that issue.
  We have now passed what I call the era of old-fashioned, evil landlords—the Sterns, the Bergers and the old Freshwater group — and some shady and less professional agents. My right hon. Friend the Secretary of State for the Environment set up a committee, under my distinguished constituent, Mr. Edward Nugee, on which my hon. Friend the Member for Westminster, North (Mr. Wheeler) also served. The committee inquired into the whole aspect of the management of privately owned flats, and blocks of flats in particular. The committee did a superb job. It brooded, it worked hard, and quickly came up with a variety of suggestions and many major proposals, which, as my hon. Friend has said, the Government have translated into the Bill.
  The Government must have caused the parliamentary draftsmen to work fast and hard. They are the stumbling block. The business managers on either side of the House do not decide what Bills come to the House; the parliamentary draftsmen do. That is a sobering thought. The best laid schemes on both sides of the House can be
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  frustrated by a lack of sufficient parliamentary draftsmen. I thank Mr. Nugee and the Government for working so hard and fast.
  The major proposal relates to the right of refusal that may be exercised when a landlord decides to sell a block. Until now, it has been a difficult issue. I had a major case in my constituency. The Church Commissioners tried to sell a substantial block of property without even offering it to its tenants. The commissioners were about to conclude a deal with a company resident in the Channel Islands when news came to me. I created a certain amount of fuss, the Church Commissioners listened and it gave the tenants three months in which to raise the money and match the price. I am delighted to say that the tenants were able to do that. That was a matter of influencing—there was no right at all. I am glad that the Bill proposes that right.
  I am also glad that tenants will now have a right to ask the court to appoint a manager when an owner fails to carry out his obligations. I first tried to obtain that right in 1974, and the then Government said, "It is not necessary. It cannot be done. We do not want it." They made sure that it was voted down. I am glad to note that it is now possible to appoint a manager.
  I am also pleased that there now exists the right to acquire the freehold when a block is already owned by leaseholders and when a landlord has failed to perform his residual duties. I heard of a case in my constituency in which a block was falling into disrepair because the landlord would not do the minor repairs that were still his responsibility, even though he had no financial interest because he had sold off 99-year leases and there was no review of the ground rents. I am glad that it is now possible, with the court's approval, to acquire such blocks.
  I am also pleased that there should be a right of consultation in the appointment of managing agents. There are still some unscrupulous managing agents. There were some bad ones and, as my hon. Friend the Minister said, there were some incompetent ones. We need more tightening up of their professionalism. I shall quote from a letter from one of my constituents who lives in a block called Eton place. I stress that the freeholders are not Eton college; it just happens that in that part of the world lots of places begin with an E. I hope that those hon. Members who considered the Housing Act 1974 will not object to my dotting names about, as the right hon. Member for Manchester, Gorton (Mr. Kaufman)—then representing Manchester, Ardwick — did in those days. He and I scattered the pages of Hansard with the names of blocks of flats in our constituencies. I shall not scatter more than a couple of names on this occasion. The letter from my constituent states:
  "I am appalled by the state of the book-keeping which provides the information whereby lessees' service charges are levied, and the obstacles placed in my way both by the company and by the auditors, when I seek to exercise my rights to examine these accounts. The account should consist of:

  (a) Items charged to lessees in the previous year and paid for by the company in the year under review. Invoices should be filed in order of payment and identified as 'brought forward'.

  (b) Items charged and paid for in year under review, analysed according to the class of expenditure so as to agree with the classes shown in the audited accounts.

  (c) Items charged in year under review and not yet paid for: copy invoices should appear with the accounts.

  (d) The service charge would readily relate to b-a+c.

  779
  In our case, information has been withheld, vouchers are in disorder, and entries are unclear and, sometimes, wrongly made. There is no evidence that the auditor has sought to improve the methods whose probity he is there to confirm."
  This is an important issue and it is right to put it on record. The managing agent is a firm called Parkgate, which manages several blocks of flats in that locality. It is, apparently, a subsidiary of the owning company. If the auditors have to be wholly unconnected with the owners, the same should apply to the managing agents. I shall return to that issue, but at the moment I want to try to establish a thread.
  I welcome something that I asked for more than a decade ago, which is that tenants — I use that word generically in the way that my hon. Friend used the word "blocks" — should be able to take their cases to the county court and should not be required to go to the High Court. That is because it is possible for too many landlords to get cases to the High Court knowing that tenants probably could not afford to take them there. Even if tenants knew that they would win, they could not afford to lay out the money. If the landlord happened to lose, the costs would be added to the service charges. I am delighted that the Bill will outlaw that and says that cases should go to the county court. This will be a real benefit.
  I am also delighted that what I call the musical chairs syndrome has come to an end and that where a statutory notice has been served it will not be possible for an owner rapidly to sell to somebody else so that the whole process has to start over and over again. I, and I am sure other hon. Members, have had cases where there has been a change of ownership perhaps four or five times merely to dodge the statutory notice. I have a specific question to put to the Minister and I shall be grateful to hear his answer when he winds up. He has said that notices will be served providing the name and address of the landlord. I welcome that, but I suggest that there is an anomaly. I refer my hon. Friend to schedule 2 on page 56. Paragraph 2(c) talks about consultation and says:
  "The notice shall describe the works to be carried out and invite observations on them and on the estimates and shall state the name and the address in the United Kingdom of the person to whom the observations may be sent…"
  If my hon. Friend looks at clause 43(b) on page 42 he will see that it says:
  "if that address is not in England and Wales, an address in England and Wales at which notices…"
  Why can both of those not specifically say England and Wales or the United Kingdom? There is no clear reason why they cannot. I hope that my hon. Friend will not say that the reason is as laid down on page 49. Clause 58(4) says:
  "This Act extends to England and Wales only."
  My hon. Friend has already broken that by referring to the United Kingdom in schedule 2. I shall be grateful for my hon. Friend's answer to that when he winds up. I hope that he will find it possible to say that it should be "United Kingdom" in both instances. I do not see why someone with an office in Scotland should be excluded. I see no Scottish hon. Members present, otherwise I might get some support on that issue.
  Mr. John Fraser: There is a practical point here. One sometimes needs leave to serve out of the jurisdiction of the landlord in Scotland. If the landlord has an address in England or Wales, one can start proceedings without any procedural impediment.
  Sir Geoffrey Finsberg: The hon. Gentleman confirms my view that the country would be better off without lawyers. He knows that I do not mean that personally. As there are more non-lawyers than lawyers in the House, that should be a popular remark.
  I should like to make three final points, two of which will need changes in the Bill. I hope that when he replies to the debate my hon. Friend will give us his preliminary view.
  My first point relates to my constituency and to blocks of flats called the Etons. I have had what I regard as an impertinent letter from a firm of solicitors called Higby Hargreaves. Suddenly, residents in these blocks of flats have been told that they must pay for the privilege of parking their cars in the forecourt. The residents have said that that has never happened in all the years that they have been there. I wrote and queried this and received a response which I do not regard as a response that a Member of Parliament ought to receive. The letter says:
  "Thank you for your letter of the 24th of March. Our clients are extremely surprised.
  You are obviously under a misapprehension as to the situation and true facts in relation to the parking facilities at the Etons. For your information the position is set out below.
  Our clients Linthaven Limited hold a long leasehold interest in certain areas in the grounds of the Etons. The Lease is held from the owners of the freehold and landlords Shellpoint Trustees Limited with whom our clients have no connection whatsoever.
  Our clients Lease was drafted and prepared with the rights of flat owners in mind to the extent that such rights exist."
  How very odd that somebody should sell the lease of bits of the ground to a third party with whom it is said that he is unconnected. I have a suspicious mind and I believe that it was done quite deliberately in order to get round limitations on regulated rents and service charges, and to find another way that would probably take them outside the present Rent Acts and regulations. The letter says that as my constituent
  "will no doubt tell you the form of Lease applicable to the flats at the Etons does not grant the flat owners and occupiers any specific parking rights. In fact the Lease includes words which in the opinion of Counsel prohibit car parking on the estate.
  Notwithstanding the absence of specific rights car parking has taken place over the years on a haphazard and uncontrolled basis including use by non-residents."
  I have known those blocks of flats for 40 years. If there were no parking rights, how odd it is that up to now no one has tried to do anything about it. There have certainly been no complaints from the people who live there. The letter goes on:
  "This may have benefited some residents but has also probably been to the disadvantage of others who would like the regular use of a reserved space. Although there are some 360 flats at the Etons there are spaces for only approximately 80 vehicles. Clearly some form of control is needed."
  Doubtless that control will be charged for at very high rates. The letter continues:
  "It is important to note that our clients agents…"—
  we have another agent here—
  "…Aspen Estates have received no less that 26 applications for Licences for reserved spaces to date."
  I was trying to think of a kinder word than blackmail but I cannot think of one.
  Mr. John Fraser: Whitemail.
  Sir Geoffrey Finsberg: No, that would bring me into the realms of something called the Race Relations Board.

  781
  Hon. Members will appreciate the pressure on people who are told that action will be taken against those who do not buy a parking space. The letter goes on:
  "A number of spaces have been reserved by our clients free of charge for disabled residents as stated in the circular letter sent…Should it transpire that certain residents are indeed able to establish that they have the right to park a vehicle then an exception will of course be made to the new scheme in appropriate cases."
  The firm of Higby Hargreaves says that it has had counsel's opinion. Now it says that perhaps that opinion is wrong, but if it is wrong those who challenge it, not everybody, will get some sort of exception. The next part of the letter shows the ignorance of the firm that has written it. It says:
  "Neither we nor our clients can see that the matter has any relevance whatsoever to the debate concerning service charges and long leaseholders in Parliament on the 30th of March next. Indeed our clients feel that your efforts would be better directed in endeavours to increase parking facilities in the locality as a whole."
  Mr. John Patten: Impertinence.
  Sir Geoffrey Finsberg: It is impertinence. It shows the ignorance of those solicitors. They should know that Parliament cannot create parking spaces — that is the responsibility of Camden borough council. The letter might mean that the firm wishes me to ignore the views expressed to me by a large number of my constituents who reside there. I should like to know whether there is a way of stopping this Machiavellian method of getting more income and whether my ministerisal colleagues will at least consider this aspect before the Bill is debated in the other place.
  My second point is equally serious. It concerns the London borough of Camden, which is substantially increasing parking and garage charges on council estates only for those council tenants who have bought their council property. This, again, is discrimination. I should like to know whether Camden can be stopped either by existing legislation or by measures in the Bill. We must stop this unscrupulous method of penalising those who have exercised the right which Parliament gave them and which, as the hon. Member for Norwood said, is no longer a matter of dispute, except where there are areas of scarcity, but this cannot apply where sales have already taken place. I hope that my hon. Friend the Minister will consider that point.
  Mr. Allen McKay: Will the hon. Gentleman consider another anomaly which appears to have arisen for people who have bought their homes in relation to VAT on garages? A council tenant does not pay VAT on a garage when he purchases his home, but a person who becomes an owner-occupier must.
  Sir Geoffrey Finsberg: I note that the hon. Gentleman is now returning to his Front-Bench place as a Whip. I sympathise with what he says. I imagine that because one case involves a sale to a tenant and the other to an outsider, different regulations apply. Because I am not responsible for policy-making, I must leave that point to my ministerial colleagues. They will doubtless say that this is a matter for the Treasury and will refer it to the Treasury. I hope that a way around this can be found to put people on the same equitable basis.
  782
  I come to my third point. I am sure that, because we have plenty of time, the House will not mind if I continue.
  Mr. Raynsford: Will the hon. Gentleman give way?
  Sir Geoffrey Finsberg: I shall certainly give way this time. If I was less than polite earlier to the hon. Gentleman, I apologise.
  Mr. Raynsford: I am grateful to the hon. Gentleman. I wanted to ask him whether he felt that, having chided me for having made long speeches — I think my longest speech was 18 minutes—and having reached 30 minutes himself, he might withdraw that earlier remark.
  Sir Geoffrey Finsberg: In this case it is quality, not quantity. The hon. Gentleman has made many more long speeches than me.
  I come to my last points. The hon. Member for Walsall, North, who has now left the Chamber, raised an old canard and tried to imply that the Government were planning to remove security of tenure from private tenants as soon as they could. My hon. Friend the Minister knocked that one down for about the 33rd time. This sort of scare tactic is not confined to the hon. Member for Walsall, North. The Camden housing aid centre, which is part of Camden borough council, sent a long letter and a questionnaire to every private tenant. Among a lot of other verbiage the letter said:
  "The Government is proposing to limit Housing Benefit on 'unreasonable' private sector rents. This means that the Council may not be able to pay you if your rent is not registered by the Rent Officer and is seen as too high."
  The letter asked tenants to respond, but it failed to say that the council already has the power if the rent is not registered to refer it to the rent officer for registration. If there is any problem, therefore, Camden has the right to do that. If the borough council has not done so, it has failed in its duty and unnecessarily scared a substantial number of tenants. That is appalling. Tenants in Camden should read and re-read the letters which they receive from Camden borough council, most of which are based on half truths.
  I hope that, as my hon. Friend the Minister said, the Bill will he passed quickly. I hope that he will add other clauses to it and will specifically consider my two suggestions. I wish the Bill well.
  4.55 pm
  Mr. Stephen Ross: I hope that the hon. Member for Hampstead and Highgate (Sir G. Finsberg) has not opened a loophole for other private landlords or managing agents. I am thinking particularly of the parking spaces in front of the block of flats where I live. I hope that what he said does not happen there. I very much agree with his point, but I hope that other people do not jump on to that bandwagon. I hope that that idea is shot down quickly.
  I should like to add my congratulations to the members of the Nugee committee, including of course Mr. Nugee himself. I congratulate also the hon. Member for Eastbourne (Mr. Gow), the Minister's predecessor, who set up the committee, and the hon. Member for Kensington (Sir B. Rhys Williams), who has done a great deal and whose persistence with 10-minute Bills on common ownership is well known to me. I was pleased to sponsor his legislation on a number of occasions. The hon. Gentleman must be delighted to be welcoming this legislation.

  783
  I intervened—the Minister must have good hearing to have heard me—to say that it was a bit late in the Session to introduce this legislation. I welcomed the commitment to bring in the Bill which was expressed in the Queen's Speech, but we are almost into April. We shall, therefore, need to get our skates on to get it passed. I promise that the Bill will not be held up by the alliance, but I think that the Minister must agree that its introduction is late.
  The greatest number of leasehold flats, as the Minister said, is in London, but the number is growing elsewhere, as is the dissatisfaction of long leaseholders. I can think of at least half a dozen blocks in my constituency where the leaseholders are dissatisfied. I declare an interest as the owner of a long leasehold, purpose-built flat in a block which is well known to several other hon. Members and is not far from the Palace of Westminster. I was originally a statutory tenant with a very satisfactory landlord. Suddenly, some 10 years ago, the tenants read that the block had been sold, then sold again and, for all I know, sold several times since. I certainly do not know who the present freeholders are, although I agree that I have not tried very hard to find out. Now, under the Bill, I can find out if I wish to do so. The freeholders were certainly at one time registered in the Channel Islands.
  Everything is done through the freeholders' appointed agents. It has taken many years of hard endeavour by a few people holding office in our tenants' association—I pay tribute to them—to sort out matters so that the current position is, on the whole. reasonably satisfactory. It has taken many years to achieve, but we now feel that we are treated more fairly and honestly. We have had to appoint other agents to check what the landlords' agents were doing and had to pay substantial fees. We have had the chance to check and re-check figures which have been provided for us many times. A number of loopholes have been discovered and many things have been put in order. On the whole, the matter has been resolved reasonably satisfactorily. I shall not name the agents, who are well known in this part of London.
  Our greatest concern has lain with the ever-increasing service charges, the maintenance costs and the establishment and future control of a sinking fund. A sinking fund has now been established. The Bill covers these matters, or will do so under the promised regulations, and is therefore much to be welcomed. Part I, dealing with the notice of sale and counter notice, is extremely complicated and needs reading with much care. The hon. Member for Hornsey and Wood Green (Sir H. Rossi) clearly demonstrated that. I suspect that the block in which I live is split almost 50/50 between long leaseholders and statutory tenants, so presumably we might not qualify if we wished as tenants to buy the freehold of the block.
  I am not entirely clear about the role of the rent assessment committee covered by clause 13. It certainly seems to be required to fill the need for arbitration in the case of a defective lease, but can it, in dispute, fix the price of the freehold interest? I suspect not. How would that be done? Is it not a matter for the lands tribunal? That seems to be the appropriate body. I can foresee arguments about that going on ad infinitum, with valuers for the landlord putting in one price, and valuers for the tenants putting in another. Will the rent assessment committee fix that price? I have read the clause carefully, but that is not clear. I am
  784
  not sure about it, but I am told by the Opposition Front Bench that it is the job of the Committee. Perhaps the Minister will clarify that in his winding-up speech.
  I am also told that there is a possible loophole whereby landlords may be able to set themselves up as registered charities. I believe that that was mentioned by the hon.. Member for Hampstead and Highgate. That exemption is included in clause 4 of the Bill, and it seems to be inviting trouble.
  I welcome part II, as long as it means what I think it means. Some managing agents are literally appalling, and the speech made by the hon. Member for Hampstead and Highgate confirmed that. Such agents deserve to be sacked. Does the definition of what comprises management need tightening? I think it does.
  Clause 40, which deals with the rights of tenants to be consulted about the appointment of managing agents, does not appear to cover the grounds for their dismissal, except in cases in which they are under reappointment. The clause is very loosely worded.
  I also commend part III, although the 90 per cent. qualification rule in clause 24(3)(c) will be a difficult one to meet in many cases.
  Parts IV, V and VI cover most of the recommendations contained in Nugee—and, in some cases, go beyond them—although no mention is made of the right to extend the terms of a lease which is nearing expiration. The hon. Member for Norwood (Mr. Fraser) went into that matter in great depth, and I promise him our support if he can table amendments to the Bill in Committee on this issue. While the Bill is before the House, the matter of a lease that is nearing expiration should be considered. I suspect that I shall be told that that is outside the scope of the Bill, but we now have art opportunity to take action on the expiration of leases, and we should do something about that now.
  There are also problems of forfeiture for a lessee who loses a legal dispute with the landlord, and we trust that a few other matters will receive attention as part of the civil law review that the Lord Chancellor's Department is undertaking.
  We are disappointed not to see certain other measures included in the Bill, of which two were suggested by the committee of inquiry itself. Nugee urged the Government to amend housing legislation so as to enable local authorities to apply to blocks of flats the minimum housing standards that already relate to houses. That is in paragraph 8.14 of the report. It is interesting to note that that proposal has been endorsed by the city of Westminster, which also proposes that the Health and Safety at Work etc. Act should cover residents and visitors. Nugee also recommended that all service charge moneys that have been collected but not yet expended should be held in a trust account with suitable safeguards. That is in paragraph 8.16 of the report.
  One or two other omissions also disappointed us. We had hoped for a right for lessees in a wholly leasehold block to manage the property for themselves, and for guidelines for the preparation and annual updating of five-year estimates of expenditure that would take into account a schedule of major works. Such a programme is especially necessary when there is no sinking fund. We also want a right of veto for tenants who are opposed to works that constitute further development within the curtilage of the block. That is going on now with penthouse developments in certain parts of London in particular. Nugee

  785
  recommended a code of guidance; I know that city of Westminster officials have prepared one, and I congratulate them on that.
  I am not sure about the position of the Royal Institute of Chartered Surveyors, of which I happen to be a member. Its draft code of guidance has not yet been produced, but one is necessary in the current situation.
  A great strength of the Bill is that its principal innovations have been given most thorough consideration. The right of first option, the provision for appointing a receiver and manager and the provisions for amending defective leases are enlightened reforms. They show the Government's recognition that the balance of rights in a block of flats must be adjusted to reflect the balance of financial commitment in the equity. The detailed drafting of the Bill should do much to ensure that its beneficiaries are those who occupy the flats and not the speculators who trade in people's homes and strip them of their assets as if they were ordinary commodities.
  By comparison, those parts of the Bill that deal with service charges seem tentative and imprecise. We hope that it will be possible to enhance the Bill's effectiveness in that area in Committee.
  All in all, the Bill promises to be a civilising influence in the jungle of property speculation and is greatly to be welcomed; I welcome it on behalf of the whole alliance.
  5.7 pm
  Sir Brandon Rhys Williams: I am pleased to be able to make a contribution on this happy occasion. I should like to thank hon. Members for their generous remarks about my own campaign to help people living in privately-owned flats. I should like to say, too, that I have been much helped by hon. Members in all parts of the House and to mention particularly the support I have had from the hon. Member for Isle of Wight (Mr. Ross), who has consistently supported my campaigns for more than 10 years for various reforms affecting tenants. I am grateful to him and to all hon. Members who have supported and advised me from time to time.
  I would like to take a further opportunity of congratulating Nugee and his committee on an excellent job, and in particular the Minister on coming forward with this well drafted Bill so quickly after the Nugee recommendations were made. When we saw that the Queen's Speech contained an undertaking that a Bill on these lines was coming forward, of course, we all rejoiced; but I do not think that we blame the Department for taking some time in producing the Bill. Indeed, we still await some clauses that have not yet appeared, which I am sure will be welcome when they do.
  The Minister is to be congratulated on other things—particularly in going beyond Nugee and adding the provision for opening up the statutory right to buy, which is obviously a landmark; and also on obtaining all-party support for the Bill. I congratulate him on the work he has done to make certain that the whole House is behind this measure, and is seen to be behind it. Continuity of policy is absolutely vital for the proper management of property. It is in the interests of all concerned that we should know what we think and make our views known quite clearly to the country.
  If I have a criticism of the Bill, it is that it does not go quite far enough. It is not a very severe criticism, because
  786
  we still have a lot to learn when we see how the Bill works in actual practice. As a result of a boundary revision I became the hon. Member for North Kensington, in 1974. It brought home to me immediately that there was something fundamentally wrong with the relationships between landlords and tenants, particularly in the private sector, because the cost of accommodation was so hard for many people to find, but particularly because the status of tenants in relation to landlords seemed to me to be an utter anachronism. My observation was that tenants, for some reason, were regarded as second-rate citizens; it was not thought necessary to treat them as people with first-class rights in the property in which they lived.
  It is 900 years since the Norman conquest, and, as I have said in the House before, it really is time that we stopped playing Normans and Saxons where property is concerned. Tenants do not belong to a second-rate social stratum. Even long leaseholders—until this Bill—have found themselves at a disadvantage in dealing with the freeholders and their managing agents. This is something that the House is now putting right, and it is an important development.
  On the question of the status of the tenants, when I was first entrusted with the responsibility of representing north Kensington I devised what I thought could be adopted as completely new standard forms of tenure, which would put the owners of the property and the residents in the property on to an equal footing. First, I conceived the shorthold idea, which I think I introduced to the House for the first time in 1976, and which then became part of statute law in 1980. I rather regret that at that time we did not have all-party consensus on the reform of housing law, and the shorthold idea has not really taken root. It was controversial at the time, and there is still a good deal of suspicion that, after some change of Government at some time in the future, shortholders might find themselves being enfranchised; the landlords, who had thought that they could count on getting vacant possession of their property at the end of the shorthold period, might then discover that they were stuck—and never able to get vacant possession again. I hope that shorthold will take root, because it offers a facility for the many people who want decent accommodation and want to know where they stand, but do not look for permanent tenure.
  I also thought of the idea of a new, standard longhold tenure, and I regret that I have not proceeded as far as I should have liked with that idea. The Department of the Environment has tumbled to the fact that we need a mechanism to reform the conditions on which long leases are drafted, and part IV provides for the revision of unsatisfactory clauses in long leases. That is an admirable development and I am sure that many owners and residents will be glad to have the chance to revise the terms of leases granting long tenure even when there is no question of outright purchase.
  I also thought of a form of tenure that I call commonhold, which would be particularly useful for people living in large conversions and mansion blocks. The House must concede that living in a flat is not the same as living in a house in a street that happens to have been built perpendicularly. A resident of a flat has different responsibilities to his neighbours from those that the resident of a house has to other people in the same street, and it seemed to me that we needed to establish a permanent, satisfactory and equal relationship between the owner of a block and the occupants of the flats in it.

  787
  After studying the matter, I concluded that the only lasting solution to the endless disputes about which I was hearing so much would be for the tenants to establish a company with the right to buy the whole property, so that they could act as their own landlords, but in a special relationship that would protect the rights of individuals as well as looking after the property.
  Mr. John Patten: I am grateful to my hon. Friend for giving way and I was also grateful for his kind remarks. I could have sat here and listened to them all afternoon.
  Is my hon. Friend aware that the Lord Chancellor has set up, under the chairmanship of a Law Commissioner, an inquiry into the possibility of strata title and condominium-style arrangements? Would not that be part and parcel of my hon. Friend's commonhold approach?
  Sir Brandon Rhys Williams: I am grateful for the opportunity to explain my views, because I have given this aspect some study. Under my proposal for a commonhold arrangement, everyone who was a resident and had a splinter of the whole property would also appear on the other side as one of the shareholders in the company that owned the property. My invented word "commonhold" seemed to me to describe that two-sided relationship.
  The idea of a flying freehold is an attempt to eliminate the owner of the block, so that, like a street of freehold houses, the block consists of people who own their own property in their own right. I know that the Lord Chancellor is working on a formula to make covenants positive, so that, when someone acquires a strata title or a flying freehold, he accepts certain obligations to the people living alongside him in the block. It would probably never be necessary to impose such obligations on the freeholders of houses, because they do not have such a close relationship with other residents in their street.
  It would not be fair for the Lord Chancellor and his team to pinch the word, "commonhold", as I understand that they are thinking of doing, to describe the new concept that they may introduce. Flying freeholds, as practised in Australia and elsewhere, give the resident of a flat complete independence. The intention is to eliminate the landlords and not to retain them in the form of a landlord company of which the tenants constitute part owners.
  Before my hon. Friend the Minister intervened I was saying that I welcome the idea of a tenants' company, rather than a partnership or a loose arrangement developing out of a coffee morning and turning into a band of friends with a common purpose. The limited company is a well-understood concept; people know that a company must produce annual reports and proper accounts and have a board of directors, shareholders and so on.
  I believe that it would be advisable to set up the owners of even a very small property in the form of a company, though the Bill does not specify that possibility. I think that it is necessary, both for the proper management of the finances of a commonhold property, and for the proper management of the premises, which will require continuity of competent, if not qualified, professional advice and supervision.
  I know that building societies welcome the idea of flying freeholds because they are the nearest thing to freehold houses, which are the type of property on which the societies are most used to making advances. However, I
  788
  have been warned that flying freeholds have been found difficult in practice in Australia and I suspect that this will be an inadequate formula for the older blocks, where the most serious problems are likely to arise. I hope that my hon. Friend the Minister will consider that aspect.
  Where the cost of accommodation is concerned, we cannot defy market forces indefinitely. The application of rent controls over a long period has tended to diminish the supply of property and has exacerbated the unhappy relationships between owners and residents. Although we cannot defy market forces indefinitely, we can legitimately modify market conditions to some extent.
  I should like to say just a word about the possibility of decontrolling rents. The House will welcome the categorical statement of my hon. Friend the Minister, who repeated earlier today what he has said before on this subject. We should reassure people living in flats that nothing in the Bill is likely to add enormously to the cost of their accommodation.
  A diver cannot remain at the bottom of the sea indefinitely, because there is something unnatural about living at the bottom of the sea. There is also something unnatural about living in a housing market that is subject to Government control. However, just as we cannot bring up a diver too quickly, because he will die if we do so, we must not attempt to decontrol rents suddenly—in a big bang—because, if we did, we should kill a lot of people who would not be able to find the money to pay for their accommodation and would have to make sudden changes in their way of life, which would be unwelcome and socially unacceptable.
  However, as we move towards new forms of tenure and try to encourage the building of new flats, we must find ways of enabling tenants to pay. I do not welcome big subsidies from here or there, and obviously the ideal way is to increase the supply of property so that the balance of supply and demand reaches a satisfactory equilibrium. However, we shall not reach that point for some time and we have to find for those people who are living in rented accommodation an equivalent of the mortgage interest relief, which puts people in a better position to buy a freehold than to become a tenant. I am not sure that I can see in the Bill an easy place to interpolate a reform of the tax structure affecting people living in flats or contemplating building them. However, we must achieve an equal balance between the option to purchase and the option to rent.
  I know that my hon. Friend the Minister is thinking about improving the mechanisms under which landlords and tenants operate, and I should like to see a code of practice for managing agents. I hope that proposals will be made by the Royal Institution of Chartered Surveyors or the Department of the Environment. It will not be easy, because the conditions in large and small blocks, old and new blocks and blocks with different forms of tenure—mixed regimes and so on—are so very variable. But an accepted code of practice would help managing agents, and would also assist the courts to decide whether agents were falling down on their responsibilities.
  I should also like to see a standard memorandum and articles for commonhold companies. The Department may consider acting to bring out such documents—or at least stimulating their production by company law experts. In my series of Bills I suggested a draft memorandum and articles which tenants' associations could easily adopt, and which would guide them in the running of the company

  789
  that owned the property on behalf of the residents. That would also assist developers thinking of putting new properties on the market on a basis that would conform to the idea of commonhold ownership from the start.
  We should give more thought to the point made by the hon. Member for Norwood (Mr. Fraser) about the right to extend a lease. Many of my constituents are concerned about that; however, it immediately brings up the question of the life span of the property. In Kensington a number of blocks are reaching the point where it would probably be better to demolish them than to spend hundreds of thousands, or even millions, of pounds on extending their life for a few years. However, it is difficult to obtain the agreement of all concerned to a demolition; even reaching the decision that demolition should take place in 10, 20 or 30 years is not at all easy. I therefore welcome the fact that the Nugee committee drew attention to the need for the setting up of sinking funds I hope that the tax background for tenants' companies or associations to set up such funds will be favourable, so that there is enough money to solve the problems that will arise when the blocks are demolished.
  Finally, let me say a few words about the right to buy. In my earlier Bills I invariably relied on the right to buy by a properly constituted tenants' association as the solution to the problems that, unfortunately, are all too common in large conversions and mansion blocks. The Government's compromise is to confine the right to buy to the residents by exercising their right of pre-emption, and also—for the long leaseholders—at the direction of the court. I feel that that is a satisfactory resting place for the time being.
  I understand that it is the Government's view that a long leaseholder is someone who has already acquired a substantial stake in the property by agreement with the owner, which a short-term tenant will not have done. A long leaseholder is therefore a rather different type of resident from, for instance, a statutory tenants who has not put out any capital as a starting point in the negotiation. I rather think that the same consideration underlay the Labour party's decision in its own leasehold reform, giving the right of enfranchisement for houses in 1967.
  I understand the logic of that decision and there is a great deal to be said in favour of it. In the course of time, however, the courts will no doubt extend by precedent the conditions in which residents are enabled to obtain judgments in their favour when they are seeking to buy their properties. We can only wait and see how case law develops over the years.
  I think it will not be unsatisfactory if the movement towards ownership by the residents is somewhat slow in maturing. Some people, if they were given the right to buy immediately, might overreach themselves in their enthusiasm to end an unhappy relationship with the landlord. Having obtained the money to buy the property, they might then discover that they had not enough money to make it into a satisfactory place in which to live. The last thing that we want is to find in a few years' time that tenants associations all over London—and in other parts of the country—have acquired their properties and then come to wish that they had not, because they were not
  790
  able to afford to keep it up or did not appreciate the difficulties of managing a mansion block to the satisfaction of all concerned.
  Let us therefore leave it to the courts for the time being to discern the circumstances in which tenants can make a success of owning their properties and it is in the interests of all concerned that they should have the right to buy despite any reluctance to sell on the part of the landlord.
  Along with other hon. Members on both sides of the House, I believe that it is vital for us to pass the Bill as quickly as possible. I wish it a happy passage.
  5.25 pm
  Mr. Nick Raynsford: This is the only housing legislation that we shall consider in the current Session. That should be seen in the context of the designation of 1987 by the United Nations as the international year of shelter for the homeless. An important question is posed: are the Government doing all that they could, or should, to tackle the fundamental problem presented by the astronomical rise in homelessness? The urgency of that problem has been placed in context by the designation of this week as national housing week. A series of activities is taking place, starting from today, to highlight the extent of housing needs and housing deprivation in London and in other parts of the country.
  It is a sad comment on the Government's record that the international year of shelter for the homeless will almost certainly see the highest level of homelessness in Britain since records began shortly after the end of the last war. It will almost certainly also see more homeless families in bed-and-breakfast accommodation than ever before. Such people are subjected to appalling and often slum-like conditions. They are exposed to severe risks of fire and other accidents, and overcrowding makes it difficult for them to lead any kind of real family life. But—here is the final insult—for all the horror and blight that such conditions cast on the lives of those families, it costs the state far more to keep them in such accommodation than it would to build new houses. The surge in the number of homeless people in bed-and-breakfast accommodation, and in the cost of that accommodation, is an extraordinary comment on the impact of the Government's housing policies after eight years in office.
  The country is spending more and more money on lining the pockets of greedy landlords running bed-and-breakfast establishments of a very poor standard, exploiting the misery of the homeless and ripping off the state into the bargain.
  The fact that Government policy has led to such circumstances can only be described as deplorable. It is the politics of the loony Right to go on subsidising the landlords of bed-and-breakfast hovels, rather than building the houses that we know are needed. We have the worst level of housebuilding in the public sector recorded in any peace-time year since the end of the first world war, and yet more families are living in those appalling conditions. If ever there was a comment on the lunacy—the loony Right ideology—of the Government's policies it is reflected in those figures.
  Measures should have been taken this year to tackle the housing crisis and to control standards in bed-and-breakfast and other multi-occupied establishments. My hon. Friend the Member for Swansea, East (Mr. Anderson) introduced a private Member's Bill to try to

  791
  tackle these problems. Had the Government been prepared to give it time, something would have been done about those problems. However, the Government have neglected the real problems of our time and have allowed the crisis to become even worse.
  The reason for acute homelessness is the shortage of rented accommodation. Since this Government have been in office, the number of homes that are available to rent in Britain has declined by about 1 million. It has been the steepest ever decline in our history. That is a shameful record and it has now come home to roost. This Bill tries to tackle some of the abuses and problems that arise in certain parts of the housing market. However, we also need measures that will lead to an increase in the supply of rented housing to meet the needs of so many people who, without the provision of homes to rent, will become homeless.
  Why is there such a shortage of homes to rent? The Government are in an unfortunate position. Ideologically, they believe that if it were given the opportunity, the free market would provide housing. However, Conservative Members know only too well that it does not work like that. Their 1957 measure led to the greatest ever loss of housing in the rented market, plus the arrival of Mr. Rachman and his infamous exploitation of tenants. When they were elected, this Government promised that they would stimulate the private rented market by a series of measures, including the shorthold tenancies that had been advocated for many years by the hon. Member for Kensington (Sir B. Rhys Williams).
  I sympathise with the hon. Gentleman's wish to try to stimulate the private rented market by the introduction of shorthold tenancies, but the reason for the failure of shorthold tenancies does not lie in the explanation that he offered—that the measure has been politically controversial. The reason for the failure of shorthold tenancies is that no landlord who is able to let accommodation and obtain a far higher rent without the tenant enjoying security of tenure would dream of letting under the shorthold conditions that the hon. Gentleman advocated and that the Housing Act 1980 brought on to the statute book. In London at the moment, many landlords are letting accommodation on terms that evade the provisions of the Rent Acts and that enable them to charge extortionate rents and deny any rights to tenants. While freedom to exploit tenants exists, very few landlords will let their property on conditions that are subject to regulation.
  If there is a free market, as Conservative Members in their ideological conviction wish, the outcome leads inexorably and inevitably to the greatest exploitation of shortage: the bed-and-breakfast hotel. The bed-and-breakfast hotel is very much the symbol of the free market. it is where the largest amount of profit can be made by landlords who exploit the misery of the homeless. I am afraid that that is the answer to a Government who believe that all we have to do is to free the private market and housing will be provided. Instead, there is squalor, exploitation and human misery.
  The Government, with their strange ideological views, say that action is needed to stimulate private landlords to produce lettings. However, in the glossy promotional leaflets that they produce for other reasons, the Government try to pretend that there is no crisis. The other day I came across an extraordinary Government document that deals with the proposal to establish a
  792
  Community trade marks office in the docklands area. In this glossy promotional leaflet that extols the virtues of locating the trade marks office in Britain—a principle that I fully support—I could not but notice an extraordinary comment on housing and the justification given for coming to docklands, which was because of the housing to be found there. It says:
  "Inexpensive housing is available in plenty both in and out of London."
  If the Government believe that that is so, how do they reconcile it with the number of homeless families who are living in bed-and-breakfast hotels? Have they ever thought that there is a conflict between the reality of life in London at the moment and the image that is presented in their glossy brochures?
  Conservative Members put forward another argument about the supply of rented housing: that if landlords were able to obtain a reasonable return on their investment they would provide more homes. The properties that are the subject of this Bill disprove their case overwhelmingly The evidence of the past 20 years shows exactly what happens when landlords are enabled to maximise their return. They do not continue to let their property. Wherever possible, they try to break up mansion blocks and to sell as many of them as possible to maximise their capital gain.
  The history that has been documented by the Nugee committee is the history of exploitation by landlords, often the very unscrupulous ones who were named by the hon. Member for Hampstead and Highgate (Sir G. Finsberg). They began that process in the 1960s. Probably there were others before them, but for the first time they achieved public notoriety in the 1960s.
  In recent years, their successors have seized on the opportunity to buy properties on a rising property market when capital values were increasing. Flats have been left empty—the vacancy rate is appalling—and when capital values have been at their highest landlords have seized the opportunity to sell them and make a capital gain, despite the fact that rent levels in many of these properties was very high. Many of my constituents who live in mansion blocks are paying through the teeth for the pleasure of living in them. Despite that, the owners of mansion blocks have had no incentive to continue to let their property. They have tried to break them up and make capital gains. By doing so, they have reduced the amount of accommodation that is available to rent.
  We need to consider the extent to which the measures in this Bill will address the problems. They go some way towards tackling some of the problems that face tenants who are renting accommodation in blocks of flats. However, they do not tackle some of the other fundamental problems to which I have referred—homelessness or empty housing. I am sorry that the Minister for Housing, Urban Affairs and Construction is not in the Chamber at the moment. He has the interesting habit of leaving the Chamber when I speak on housing matters. I hope that there is no connection between those two facts. He spoke on the radio this morning about empty property. His justification for the Government's policy of not doing more for the homeless was that if only empty council properties were brought back into use the problem would be solved.
  The answer is very different. There are too many empty council properties and something must be done about it, but local authorities are by no means the worst offenders. The owners of mansion blocks keep far more properties

  793
  empty than does any local authority in London. The worst offenders of all are Government Departments. The figures show that 6·5 per cent. Of Government Department property is empty, compared with 3·5 per cent. Of empty local authority property.
  The Metropolitan police figures are a disgrace. The answers that the Home Secretary has given to my parliamentary questions during the past month reveal that, of 3,203 residential properties owned by the Metropolitan police, 573 are vacant. That is a vacancy rate of 18 per cent. The Home Secretary ought to be ashamed of that. So should the Secretary of State for the Environment and the Minister for Housing. They should stop criticising local authorities and others for keeping property empty until they have put their own house in order. If they do not, everybody will know that they are being hypocritical and that, although they are accusing others of keeping property empty, they have by far the worst record.
  Mr. Stephen Ross: Has the hon. Gentleman included prison officers' housing? At one time, more than 100 prison officers' houses in my constituency were vacant.
  Mr. Raynsford: As I do not have a prison in my constituency, I have not pursued that matter, but I know that my hon. Friend the Member for Hammersmith (Mr. Soley) has been doing so in relation to properties adjoining Wormwood Scrubs prison. I gather from my hon. Friend that there is a severe problem relating to prison officers' housing, although the hon. Member for Isle of Wight (Mr. Ross)—who has constituency experience of it—will know more about the extent of the problem than I do.
  Mr. John Fraser: Brixton prison is on the edge of my constituency. Not only are there many vacant prison officers' houses, but when a prison officer dies in service the Home Office sets about evicting his widow.
  Mr. Raynsford: That is right. The Government encourage homelessness by leaving properties empty and compound the problem by making homeless the people who live in such accommodation.
  We have had enough of listening to the pious platitudes of the Minister for Housing, Urban Affairs and Construction, who has presided over an appalling crisis of homelessness and has done little or nothing to tackle it. He is guilty of the grossest hyprocrisy in accusing local authorities of keeping too many properties empty—and I agree that there is a problem—when he has a far greater problem in his own back yard.
  The Bill is designed to facilitate the acquisition by tenants of the ownership of their flats under certain circumstances. They will have the right of first refusal if the landlord decides to sell, and compulsory acquisition powers will apply in certain circumstances. Those compulsory acquisition powers will be somewhat tortuous and difficult to put into effect, because a number of conditions will have to be met to the satisfaction of a court. The landlord must be in breach of one or more of the obligations owed to the leaseholder, the circumstances must be such that the breach is likely to continue, and the problems must be unlikely to be adequately remedied by the appointment of a manager under part II of the Bill.
  Those three conditions will provide a golden opportunity for a landlord who wishes to evade the
  794
  provisions of the Bill to do so. They will provide endless opportunities for prevarication, and some landlords will pretend that action is being taken to remedy problems when it is not. They will involve lengthy legal procedures that will be very costly to the tenants, who will have no guarantee of success at the end.
  Although I regard the Bill as a step in the right direction, I am far from satisified that it will give tenants and leaseholders who have been subjected to injustice, and who have suffered unhappiness at the hands of their landlord in the past, the swift remedy that they deserve. Labour Members prefer the concept of a much more straightforward procedure that allows leaseholders, either individually or collectively, to acquire the full interest in the property. We are pledged to extend tenants' rights in that way, and it is important that people should know that we have been in the forefront in this regard.
  The hon. Member for Hampstead and Highgate talked about his contribution in introducing the Housing Act 1980. He is only too well aware that most of the provisions relating to tenants' rights in the 1980 Act had already been prepared by the Labour party in 1979. The Government inherited measures put forward by the Labour party that would have been introduced had Labour remained in office.
  We seek simpler and more straightforward measures to enable the occupiers of blocks of flats to acquire possession of their properties. They should not have to go through the complex procedure of satisfying a court that a landlord has fallen down on his obligations and that the problem is not likely to be remedied by any other measure. Equally, there should be provision for the finance to be made available to help tenants to acquire their blocks. A great deal could be done to encourage tenants to take cooperative control of a block that has been badly managed when, given the opportunity, they could do a far better job themselves.
  Today I had the pleasure of taking part in a visit to various sites in central London organised by the Campaign for Homes in Central London. The aim was to illustrate the current problems confronting people looking for housing. We saw a successful housing co-operative in operation—interestingly, in what were originally police houses. The co-operative is organising its own affairs very successfully and wants to acquire an adjoining site to provide more housing, but it is being thwarted by the reluctance of the London residuary body to make the land available at an affordable price. There is a strong case for enabling co-operatives to take over control.
  I question the ability of the county courts to carry out satisfactorily the functions that the Bill gives them. They would have to deal not only with compulsory acquisition powers but with the appointment of managers and with various variations in the terms of other leases. There are many grounds for believing that county courts are already overburdened with the obligation to deal efficiently with housing cases and that, in many cases, people do not benefit from the standard of justice that they deserve. In the past, a case has been made for new specialist housing courts that could examine housing matters in rather more detail, and with greater expertise than the county courts.
  The Nugee committee recommended that housing assessors should be available within the framework of the county courts. We have no evidence as to whether the Government are considering housing assessors, but we have evidence that the Lord Chancellor's Department is

  795
  not keen on the establishment of housing courts. Indeed, it has rejected that proposal and is considering less satisfactory options.
  Does the Minister believe that the considerable additional responsibilities that the Bill will give to the county courts will he discharged as well as they would be by a specialist housing court? Will he consider the establishment of a housing court to provide a more effective channel for the settlement of landlord-tenant disputes and other housing matters?
  I do not wish to incur the wrath of the hon. Member for Hampstead by speaking for too long. In conclusion, therefore, I stress that Labour Members welcome the introduction of the Bill but believe that it has two fundamental weaknesses. First, it does not go far enough to extend the rights of tenants in blocks of flats and, secondly, it does not tackle any of the fundamental housing problems that face us at the moment. The Government try to give the impression of taking action on housing, but they are deafeningly silent on the critical problems of homelessness, overcrowding, lack of investment, decay in the housing stock and the worsening housing crisis over which they are presiding.
  5.49 pm
  Mr. Peter Thurnham: The hon. Member for Fulham (Mr. Raynsford) was in danger of making a speech that exceeded his longest to date—although, I am glad to say, only by a minute or two. I feared that he was settling in for a serious attempt to do that.
  I welcome the Bill, even though it does not go quite as far as I would like to incorporate the proposals that I put forward in my ten-minute Bill on 25 February. I hope that there will be time for the Government to consider including my proposals, even if there is a shortage of draftsmen's time. Perhaps a shortage of draftsmen's time has prevented that so far, but if we do not have an early election I hope that there will be time to incorporate in this Bill my modest proposals.
  I am glad that the Bill is supported by the Opposition parties. The hon. Member for Norwood (Mr. Fraser) said that the Labour party supports the right to buy. Will he please communicate with Labour party councillors in Bolton who do not appear to have received the message? Those councillors must still be under the influence of the former Member for Bolton, West, Mrs. Taylor, who was the Opposition spokesman for housing. She said that the right to buy would be given over her dead body.
  If the Labour party has been converted, I ask the hon. Member for Norwood to tell Bolton councillors because they appear to be the most recalcitrant council in the country in cases of defective title when every other council takes steps to help tenants in that position. I hope that the hon. Member will communicate soon with Bolton councillors. A right-to-buy action group will be meeting on 3 April to ask for a statement from Bolton councillors about the right to buy and Bolton council's obligation to reconsider its position.
  It was good to hear from the alliance spokesman, who appears to have departed—perhaps because his party had so little to say before. The recent booklet "The Time has Come" might have included some reference to the right to buy, but it did not. That proves what a low priority the subject has for the alliance.
  796
  As a result of introducing my Landlord and Tenant Bill, I have received a number of representations on the subject. I shall now address my remarks to the Government's Bill. Over the years freedoms have been introduced to help people gain more control over their lives. I am pleased that that is particularly so in housing. The Housing Act 1980 gave council tenants the right to buy their homes, at least where there is no defective title, which I attempted to remedy in my Bill.
  Schedule 19 of the Housing Act introduces help for leaseholders of private flats in challenging service charges levied by their landlords. The latter provisions and other helpful measures in previous Acts were consolidated in the Landlord and Tenant Act 1985.
  For many years there has been pressure from both sides of the House and from all sides of the professions to give more rights to private tenants and leaseholders. The Royal Institution of Chartered Surveyors working party set up in 1983 made recommendations about the management of blocks of flats to the then Minister of Housing, the right hon. Member for Tonbridge and Mailing (Mr. Stanley). That committee, headed by Mr. James, the senior surveyor of Grosvenor Estates, included representatives of the Law Society, estate agents, landlords and tenants.
  I hope that my hon. Friend the Minister will say whether the rights in part V arid elsewhere in the Bill for recognised residents' associations to be consulted on the appointment of management agents is also fully available to tenants of public housing. I have spoken recently to residents' associations on council estates and I believe that they should be given full rights to examine all options for the management of their estates.
  I have also heard of problems experienced by tenants in shopping precincts. Will the Minister consider extending the rights to cover such tenants? I have experienced a series of problems at Harwood shopping precinct in my constituency where the company under the control of Mr. Horrocks has proved to be unto-operative in its relationship with the tenants.
  The James committee called for changes in the law to allow leaseholders to challenge the appointment of managing agents and the cost of fees and insurance premiums, and to provide standardised leases and a system of voluntary arbitration for defective clauses in existing leases. In particular, the James committee called for the creation of sinking funds to cover the cost of renovations and major repairs where there is no provision in leases. It stressed the importance of such funds being held independently and for them to be attached to the block rather than to individual landlords. There have been instances of receivers claiming such funds when a landlord goes into liquidation or goes bankrupt. The committee also said that it was unjust that such funds should be taxed as income. I hope that those points will be noted by the Government in drafting their promised additional amendments to the Bill.
  The Nugee committee supported most of the James committee's recommendations, which the Government accepted and added some welcome proposals of their own in drafting their Bill. Part II solidifies the principle which the courts have already implemented in appointing receiver managers to take over the management of blocks when the management has broken down. That is formal acceptance at last of the principle that leaseholders, even

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  with short leases, have a greater interest and therefore a greater investment in the property than the reversionary landlord.
  Part III is the natural extension of that principle and gives the right of compulsory purchase when a long-term solution to negligence and mismanagement is required. I believe that some guidance is required on how the ultimate management should be undertaken. It is no good residents jumping out of the frying pan of incompetence into the fire of ignorance and disunity.
  Clause 41 gives to housing associations the powers to manage blocks of flats. These may prove useful sources of expertise with which leaseholders could happily cooperate. It is of particular importance for finance to be channelled to housing associations so that they can take on the role on a permanent basis, or as a temporary measure while bringing a block back on the rails. I ask the Government to provide a fund to provide bridging loans for residents to allow them to implement part I's pre-emptive purchase arrangements as well as the compulsory arrangements under part I.
  I speak as a leaseholder who has recently joined other residents of a London block in purchasing the freehold voluntarily from the owner. Fortunately, we were in a position to arrange the finance and to be confident of arrangements for the efficient management of the building afterwards. Others may not be so lucky. We should help them and so ensure the success of the Government's legislation.
  A number of hon. Members and the Federation of Private Residents' Associations, which represents 200 associations of private tenants throughout the country and was represented on the Nugee committee, would like the Bill to go further. The federation is concerned about flat dwellers in private blocks still being treated as second class citizens, as my hon. Friend the Member for Kensington (Sir B. Rhys Williams) said. The federation says that, as council tenants have a right to buy, it would like the powers under parts I and III to be increased for private tenants. The federation is worried about leaseholders whose leases are getting too short to be saleable and would like the Leasehold Reform Act to be extended to flats, especially because of the current research into the legal implications of flying freeholders and their strata titles, to which my hon. Friend the Member for Kensington referred.
  My Bill was unopposed and was supported by a former Solicitor-General and two former Environment Ministers. It is designed to extend the council tenant's right to buy when the title is defective. My Bill also intends to give fair market value to landlords when their property is compulsorily purchased. My Bill is truly for landlords and tenants, and I hope that the Government will accept my proposals as amendments to their Bill.
  5.58 pm
  Mr. Alfred Dubs: Ever since I was elected in 1979 I have been constantly shocked at the problems of long leaseholders living in flats in my constituency. Many of the experiences described to me are nothing short of a scandal. Accordingly, in common with other hon. Members, I introduced a private Member's Bill on the subject. Mine was intended to deal specifically with many of the points covered by the Government's Bill.
  798
  When I introduced my Bill I was delighted that the Government responded so quickly. Between the notice of my Bill appearing on the Order Paper and the date on which I was given leave to present it, the Government announced their response to the Nugee report. They did that with such haste that on the day that I left the House to address a meeting of leaseholders in Battersea the written answer, which I had not then received, had arrived at the Battersea Conservative Association offices and I was able to quote it at the meeting. I think that that haste had something to do with the local elections.
  Many other aspects of housing worry us. On Wednesday, I hope to have the Minister's support for a private Member's Bill to protect the position of house buyers—that is, owner-occupiers. I hope that the Minister will accept that with the same enthusiasm as he has put forward his present measures.
  Over the years I have had frequent meetings with leaseholders in Battersea. I am fully aware that the system has worked best when groups of residents have got together to acquire the title of the flats in their block. They are fairly happy and contented and in contrast to those leaseholders whose difficulties I shall shortly enumerate.
  Many long leaseholders in the community by no means represent the well off—some are elderly and others are desperately poor. Many find the additional burdens thrust upon them by freeholders impossible to cope with. In Battersea, leaseholders are to be found in mansion blocks, as described by the Minister, and also in houses that have been converted into flats. That is a fairly common form of tenure in many parts of London.
  I shall describe the main complaints that I have received and I shall judge the effectiveness of the Government's proposals in that context. One complaint is that repairs are simply not carried out by the freeholder or, if started, are not completed. The result is that scaffolding remains on the blocks, bits may fall off and, despite the efforts of the leaseholders, they are unable to get the repair job either started or, if started, completed. If there is a dispute between the leaseholders and the freeholder, a leaseholder cannot move because, while a dispute is in progress, nobody wants to buy the lease.
  I have received complaints about high service charges. I have also received complaints regarding insurance; and, indeed, the Minister has said that a proposal on this matter will be forthcoming, but not in the Bill.
  Mr. John Patten: Because of the extreme complexity of the problem, we have been unable, with the Bill as printed, to introduce the necessary clauses. However, at a later stage, when the Bill is in Committee, we hope to introduce clauses which I hope will be satisfactory to the hon. Gentleman.
  Mr. Dubs: I accept the Minister's answer. It is better to have the necessary clauses added to the Bill in Committee.
  I have received strong complaints about the size of sinking funds for repairs and the way in which such funds have been managed. Leaseholders have complained that sometimes proper accounts are not available or indeed no form of accounts is available. There is the ever-repeated complaint that the management of some of the blocks is quite unsatisfactory. Sometimes leaseholders are simply unable to make contact with the freeholder. They may be unable to find the freeholder or sometimes the freeholder is not known. A device is sometimes used wherein there is

  799
  a head freeholder, then an intermediate leaseholder and then those leaseholders living in the block. The two layers above the leaseholders make it even more difficult for the leaseholders to make contact with the people who own the freehold.
  One notorious incident occurred when a small block of flats was bought by a company that paid £800 for the leasehold of each flat. Within weeks the freeholder was offering to sell the leaseholds for more than £6,000 to each of the leaseholders. Sometimes an individual leaseholder has been negotiating to buy the freehold when, in the middle of negotiations, the freeholder has simply decided, unbeknown to the leaseholder, to sell to a property company and has not bothered to tell the leaseholder.
  A notorious case in my constituency involved a house which had been converted to three flats. One was empty and the other flats were occupied on leasehold. The empty flat had extremely bad dry rot, but apparently the freeholder had run out of money and could not carry out the repairs. The result was that dry rot was affecting the other flats. The leaseholders were desperate because they were aware that their asset was depreciating day by day, possibly to the point where the building became valueless, but, at the time, there was nothing they could do.
  There is also the difficult instance where someone has bought the leasehold and, having moved in, is given, without warning, a hefty repairs bill for a backlog of repairs. It may be argued that in such circumstances the solicitor who carried out the conveyancing should have discovered that problem. Nevertheless, I have received complaints about that.
  There have been instances when pensioners, who were ordinary tenants, have been persuaded to safeguard themselves in old age by becoming leaseholders. Once they did so, they discovered they could not afford their repair bills and ended up worse off than if they had remained as tenants. Over and over again one hears the cry that if the only recourse is to go to law, people cannot afford litigation and have doubts as to whether they will be properly covered by legal aid.
  I am satisfied that the Bill goes a long way to help to tackle those evils. With this measure the Government are departing from what I regard as their utter free market policy on housing. I welcome this different, somewhat interventionist approach by the Government. It goes against the thrust of Government thinking on other aspects of housing.
  I believe that three problems remain which are not adequately dealt with by this measure. They have been referred to in passing by other hon. Members this afternoon. I would like the provision of a full right to buy, provided that a significant number of leaseholders wish to exercise that right. I would prefer that rather than the burden being on the leaseholder to prove that the landlord or freeholder is behaving negligently. That is difficult to prove and may not work in the courts. I would prefer there to be a proper right to buy for leaseholders living in such blocks.
  I share the concern expressed by my hon. Friend the Member for Norwood (Mr. Fraser) about what will happen at the end of long leases. What happens in the last few years of a lease when it is impossible to sell that lease to someone else? People are stuck in a property and are seriously worried about what will happen at the end when they must meet the obligations attached to the expiry of that lease. A right to renew a lease would give people some
  800
  sense of security, would stop properties becoming dilapidated and, philosophically, be on par with the other aspects, especially the limited right to buy, described by the Minister. I urge the Minister to give people the right to renew a lease in the same way as he has given them a limited right to buy.
  I am worried about the existence of mixed forms or tenure in blocks—a mixture of private tenants and leaseholders. The safeguards in this legislation apply to blocks that are occupied by long leaseholders and I do not believe that those safeguards will apply equally where there is a mixture of leaseholder and private tenant. Some tenants have been in blocks for a long time. They may be elderly and may not be in a position to convert their tenure to a leasehold if that is what they desire. However, some may wish to do so, and I believe that it would he better if they had a right to buy as well. Whereas leaseholders will now have a right of say in the management of blocks, tenants will not have that right. I am interested in how the Minister will cope with problems of mixed tenure in such blocks. I hope he will consider that problem sympathetically in Committee.
  This Bill is a long overdue reform. It will help long leaseholders, but it does not allow the Minister to escape the fact that there is a major housing crisis in London affecting people in other forms of tenure. I wish the Minister would turn his mind to that problem. Nevertheless, I welcome this reform. I welcome the fact that many long leaseholders in my constituency and elsewhere in the country will be able to face their housing prospects more cheerfully when this Bill is on the statute book.
  6.9 pm
  Mr. John Fraser: With the leave of the House, Mr. Deputy Speaker, I shall reply on behalf of the Opposition. I shall speak for only a few minutes to underline some of the points that have arisen during the debate.
  I hope that the Government will take on board the fears that have been expressed about the ability of the county courts to handle housing cases. Much depends on the quality of the registrar and the judge, and we must have registrars and judges with perhaps a little more training and aptitude to deal with housing cases. They must be prepared to push these cases forward and not allow procedural impediments to hinder justice. If the Minister talks to practitioners, he will find that there is wide variation between one court arid another. I found that when I was a consumer Minister and involved in small claims procedures. Some small claims courts work extremely well and others extremely badly. They work badly when the registrar does not enter into the spirit of the small claims court concept. I hope that the Minister will talk to the Lord Chancellor's Department about the most constructive use of registrars and judges in implementing the rights that will be created by the Bill and the other rights that exist in housing law to achieve proper justice for tenants.
  Secondly, we shall need to examine—
  Mr. Thurnham: The hon Gentleman has spoken so well and so wisely this afternoon that I feel that it will be useful to intervene to say that a quiet word from him to his colleagues in Bolton would be of enormous help in ensuring that tenants obtain the justice that they deserve

  801
  and of which they have been deprived. I think that he would find his colleagues only too keen to find an opportunity to get off the hook on which they are caught.
  Mr. Fraser: I might take the opportunity to visit Bolton to familiarise myself with the local housing problems. I understand that the problem under the right-to-buy legislation did not stem from resistance by the council. Apparently the council had a great many leasehold interests, and the hon. Gentleman will remember that the 1980 Act did not give the right to buy in such circumstances. I confess that I do not know the detail of the defective title problem that exists in Bolton, but I am sure that the hon. Gentleman will have a chance to make his voice heard in Committee. If the Government are keen enough to deal with these matters, they will provide the right remedy where a council has a defective title and does not want to find itself caught in the middle of a dispute between those who may have a claim on the property and the tenant who has a claim under the right to buy. I hope that the hon. Gentleman will develop the argument constructively in Committee, not now.
  Secondly, we must consider the Bill carefully to ensure that its drafting does not provide an opportunity for landlords unreasonably to erect delays in the exercise of tenants' rights. The Minister nods his head in approval, but on Saturday morning I took the opportunity with Mr. David Ward, the prospective parliamentary candidate for Chelsea, to inspect some empty privately-owned properties in Chelsea. There are 8,000 such properties in the Royal borough of Kensington and Chelsea. We looked at six of them, just off the King's Road, which have been empty for about 25 years, and which I am sure merit the Minister's wholesale disapproval.
  When the local authority stepped in to make a compulsory purchase order with a view to bringing the homes back into use for housing purposes, the landlord made a few repairs or a desultory start on repairs, with the result that the inquiry and CPO procedure were abandoned. This has happened on many occasions, and when it does a local authority has to take up the issue time and again. We must not have laws that create rights in favour of tenants that can be defeated by token action by the landlord to prevent rights being exercised. This is why I say that we need robust, common-sense registrars and judges who will not be hoodwinked by token responses by landlords and who will allow the rights of tenants to be exercised.
  Thirdly, it is important that the Bill should address itself to improvements, deterioration, sinking funds, audits and the necessity to ensure that tenants' funds, especially when placed in sinking funds, are properly protected. Protection can be offered by the setting up of trust funds. It might be as well if the Minister had a word with the Chancellor of the Exchequer before he presents the Finance Bill to ensure that the tax treatment of sinking funds is not unfavourable to tenants. The moneys that are directed to sinking funds belong to tenants, not landlords, and they should be regarded as being held on trust for them.
  There has emerged from the debate a common view that the right to extend a lease should be granted by legislation, and preferably by the Bill. It is not too difficult to devise such legislation, and it would be within the long
  802
  title because it would be a variation of the lease. Therefore, an extension would be within the long title. The legislation analogy and precedent is contained in the Leasehold Reform Act 1967. I hope that one of our achievements in Committee will be to add the extension of a lease to the other rights proposed by the Bill.
  Finally, it is right that we should try to encourage the collective acquisition of freeholds by long leaseholders and tenants, and especially by long leaseholders. We could start by saying that in all new developments the tenants would automatically have a right to acquire the freehold.
  The main and central reason for the division between freehold and leasehold is that our legal system does not allow flats to be disposed of except by means of the grant of a lease. This means that the maximum interest that a tenant can have in a property is a leasehold interest. If the law allowed it and we willed it, the tenant could have an even greater right. He could have his present right of a lease and an inalienable share, along with the lease, in the freehold reversion. We could make a good start by emulating the example of many other countries if at the very least we provided that in new developments that should be the order of things, with that being the constitutional relationship of the tenant or long leaseholder to the land and building upon and in which he lives.
  I welcome the Bill, which I hope to improve and extend in Committee. I hope that it makes rapid progress through the House.
  6.17 pm
  The Parliamentary Under-Secretary of State for Wales (Mr. Mark Robinson): It is a privilege to be called to take up the remarks of the hon. Member for Norwood (Mr. Fraser), who has great experience of the matters that we are discussing. The degree of consensus that has emerged during the debate should be put on record. Hon. Members on both sides of the House have arrived at a consensus with the possible exception of the hon. Member for Fulham (Mr. Raynsford), who chose largely to ignore the Bill and to subject the House to a repeat of many of his well-rehearsed and well-trodden arguments on housing policy in general. That is a pity given the detailed make-up of the Bill and the wide consensus that exists.
  The Bill is important to many hon. Members, including my hon. Friend the Member for Hove (Mr. Sainsbury), who has received many representations and made many representations to us on the problems facing his constituents who are living in privately owned flats. The speech of the hon. Member for Battersea (Mr. Dubs) underlined many of the reasons why the Government have thought it necessary to introduce the Bill.
  In drafting the Bill our aim has been to maintain a balance between the rightful interests of the residents of flats and those of landlords. The Bill makes clear our commitment to giving flat dwellers the necessary statutory rights to deal with landlords who refuse persistently to meet their obligations under a lease. Equally, we recognise that there are many landlords providing a good service to their tenants and abiding by the terms of their leases. Such landlords have nothing to fear from the Bill. Our aim is to deter bad landlords while giving encouragement to those who are mindful of and responsive to the needs of their tenants. My hon. Friend the Member for Kensington (Sir B. Rhys Williams) was right to say that, although the Bill may not go as far as some would want, we shall

  803
  undoubtedly learn as we go along with it. The Bill will make an important contribution to the many reforming changes that we have already introduced to protect the tenant.
  If we were to go as far as the hon. Member for Norwood wishes, there is a real danger that the rights of leaseholders could disappear altogether. If that happened, the system of leasehold as we know it could be in danger of disappearing. That may he the hon. Gentleman's aim but that is not what the Government are seeking to achieve through the Bill, which is intended to establish a fair and stable equilibrium between landlord and tenant.
  I seek the indulgence of the House to say a few words on insurance, which is of a special concern to Members who represent constituencies in south Wales. Several Opposition Members representing south Wales constituencies have made representations to my right hon. Friend the Secretary of State and myself concerning that problem. It is a pity that none of them has been able to take part in the debate this afternoon, particularly the hon. Member for Caerphilly (Mr. Davies), who has been especially vociferous about the problems facing tenants in connection with insurance. In that respect, I am referring to householders, and in Committee we shall give an undertaking to give leaseholders of houses similar rights in relation to their property's insurance as leaseholders of flats are to he given as a result of the Nugee committee's
  recommendations.
  I am especially pleased that we have undertaken to do that because I am aware from my mailbag, both as a constituency Member and as a Minister, of the difficulties which many leasehold house owners run into over the tied insurance of their houses. Those difficulties most frequently arise as a result of the poor or incompetent management of their leasehold portfolios on the part of a small minority of ground landlords. In common with the main aim of the Bill, the insurance clauses will be designed to help safeguard the interests of leasehold house owners and flat dwellers alike with regard to their tied insurance, while continuing to recognise that landlords must be able to protect their reversionary interest in leasehold property.
  I would like to say a little about the way in which our proposals on insurance would work with regard to leasehold house owners. The additional protection we intend to give such leaseholders will take a number of forms. First, our proposals would give leasehold house owners a right to challenge the terms of the insurance they are required by their leases to take out. If a leaseholder can demonstrate that his insurance is unsatisfactory, or that the premiums required are excessive, the court would be empowered to make an order requiring the landlord to nominate a different insurance company from the one originally nominated.
  Secondly, in order that leaseholders can mount an effective challenge, they will be entitled to know specific details about the insurance of their homes, including the extent of cover provided by the policy. Leaseholders will also be entitled to inspect the insurance policy, and to take a copy of it.
  Thirdly, where the terms of a lease are themselves defective in relation to insurance, leasehold house owners will have a right to apply to the court to have their leases varied. That right will be analogous to the right that leaseholders of flats will be given by part IV of the Bill. It would not be possible for the courts to use this right to
  804
  vary a lease to take away a landlord's ability to nominate the insurance company, nor to require landlords to offer leaseholders a choice of insurers.
  I am sure that those additional rights will be welcomed by leasehold house owners in areas, such as south Wales. with a great number of houses held on leases.
  I would like to reply to some of the specific points raised by hon. Members during the debate. The hon. Member for Norwood referred to defective leases. He argued that part IV should be extended to allow tenants to apply to the courts to amend their leases to allow improvements to be made to the block. I am glad to be able to reassure the lion. Gentleman that the Bill already covers that. Clause 36 allows tenants to ask the court to vary the leases, whether or not the variation relates to the defect in the leases, where that is supported by a substantial majority of the parties and not opposed by more than a small minority. That provision should be used, for instance, to seek the setting up of a sinking fund, which was one of the examples cited by the hon. Gentleman.
  My hon. Friend the Member for Hampstead and Highgate (Sir G. Finsberg) asked why clause 44 relates to England and Wales whereas schedule 2 refers to the United Kingdom. Clause 44 requires the landlord to furnish the tenants with an address in England and Wales for the service of notices. That is necessary to ensure that notices in proceedings can be served without having to obtain the court's leave to serve outside the court's jurisdiction. However, schedule 2 requires that an address be given simply for communications and the limitation to England and Wales is, therefore, unnecessary. Schedule 2 simply follows the existing provisions of the Landlord and Tenant Act 1985 which refer to the United Kingdom.
  My hon. Friend also raised the problem of car parking charges at a block of flats in his constituency. That must be a matter for the leases concerned and, ultimately, it may be for the courts to decide whether such charges are payable.
  Sir Geoffrey Finsberg: I hope that my hon. Friend is not going to brush that aside as simply as that. I asked the Minister to consider that matter and not to say simply that it is up to the courts. As the hon. Member for Isle of Wight (Mr. Ross) said, if that is a loophole, it will spread very rapidly. I do not ask for a commitment at this stage of the legislation but I do ask for more than what I already know. I ask the Minister to consider it carefully.
  Mr. Robinson: I am sure that my hon. Friend the Minister for Housing, Urban Affairs and Construction will look at that point and we shall look at it in Committee.
  The hon. Member for Isle of Wight (Mr. Ross) suggested that landlords might set themselves up as charities to avoid the provisions of the Bill. With respect, that seems unlikely to be a problem. Even if the Charity Commissioners registered such a landlord, he would then have to prove that the block was part of his functional land since investment land of charities is not exempt from the Bill. It is wholly improbable that a landlord would be able to do that.
  The role of the rent assessment committee is to settle disputes about price and other terms of sale in cases where the landlord has defaulted on the right of first refusal and under the right of compulsory acquisition in part III. Rent assessment committees, sitting as leasehold valuation tribunals, already have analogous functions under the Leasehold Reform Act 1967.

  805
  As for matters recommended by Nugee which are not in the Bill, we have already said that we intend to bring forward amendments to deal with service charges held on trust. We cannot, I am afraid, undertake to tackle in this Bill the complex question of local authority powers on enforcement in relation to blocks of flats.
  Several hon. Members have asked about the role of managing agents. We entirely share the view of the Nugee committee that management agencies, where they are employed by the landlord, must be responsible to the landlord alone. Requiring management agents to account both to the landlord and to the tenants is, in our view, a recipe for confusion. Making the agents solely accountable to the tenant would also be inappropriate. In our view, anything that obscures the fact that the responsibility for managing the block rests with the landlord will, at the end of the day, be to the disadvantage of the tenants. However, we agree that tenants should have a right to express a view on the choice and performance of managing agents. Clause 40 gives recognised residents associations certain rights to be consulted.
  The hon. Members for Norwood and for Isle of Wight raised the possibility of extension leases for flats and maisonettes. The Bill is primarily concerned with the management of blocks of flats. The Nugee committee did not consider that on management grounds it could recommend a right to an extension lease for flats and maisonettes similar to that for leaseholders of houses under the Leasehold Reform Act 1967. Moreover, as the committee pointed out, a right to an extension lease could well exacerbate the problems of management by enabling people to obtain extensions to their leases which went beyond the economic life of the block.
  There is undoubtedly evidence of concern about the ability of leaseholders of flats to dispose of the remainder of a lease at the price they expect, as the unexpired portion of the lease dwindles, because the person who is intending to buy the lease cannot readily find mortgage finance. That is a problem that has been highlighted by the Building Societies Association in its report "Leaseholds—time for a change". We are in touch with the Building Societies Association about the desirability of as flexible an approach as possible by building societies when considering applications for mortgages or leases which have less than about 50 years to run. However, the key to the problem is not a short-term pallative, such as a once-only right to a 50-year extension, which is what the Leasehold Reform Act 1967 provides for leaseholders of houses. That would merely postpone the day of reckoning.
  To impose such a solution on ground landlords who have entered into agreements on the basis of the terms which have been settled seems to us an unwarrantable
  806
  interference. We must be certain that we do nothing to undermine the confidence of ground landlords of existing developments. For the future, we must look for a more fundamental approach to the whole system of ownership of flats. I hope that the working group set up by the Lord Chancellor will pave the way for this. We need to see what it proposes and how it will relate to this problem.
  My hon. Friend the Member for Hampstead and Highgate and the hon. Member for Battersea raised the problem of collective right to buy. Part I of the Bill gives tenants a right of first refusal to buy collectively the landlord's interest in the property where he is proposing to sell. This right applies to all qualifying tenants, whether long leasehold or renting, because it seemed to us that there were many blocks with a mixed pattern of tenure where it would be unrealistic to attempt to distinguish between long leaseholds and renting tenants to achieve our objective. However, our measures are aimed primarily at the problems which have emerged for long leaseholders in mansion blocks and elsewhere, and the further arrangements under part III for tenants to apply to court for an acquisition order if the landlord has failed in his duty apply only to blocks which are wholly or mainly long leasehold. We see no reason to go further than this and give leaseholders a right to acquire the freehold against the wishes of the freeholder irrespective of whether he has behaved badly or well. This would undermine the confidence of ground landlords, many of whom perform their duties satisfactorily.
  In conclusion, in the main we have had a constructive debate and many interesting points have come out in the course of the debate. I am certain that we shall return to those points when we consider the Bill in Committee. My hon. Friend the Minister for Housing, Urban Affairs and Construction and myself will be considering some of the points in the course of our discussions. However, I fear that I must tell my hon. Friend the Member for Bolton, North-East (Mr. Thurnham) that our discussions may not include his earlier Bill, the Landlord and Tenant Bill. That said, I hope that the House will give the Bill a Second Reading.
  Question put and agreed to,.
  Bill accordingly read a Second time, and committed to a Standing Committee pursuant to Standing Order No. 61 (Committal of Bills).

  LANDLORD AND TENANT (No. 2) BILL [MONEY)
  Queen's Recommendation having been signified—
  Resolved,
  That, for the purposes of any Act resulting from the Landlord and Tenant (No. 2) Bill, it is expedient to authorise the payment out of money provided by Parliament of any increase attributable to that act in the sums payable out of money so provided under any other Act.—[Mr. Maude.]

  Fire Safety and Safety of Places of Sport Bill [Lords]
  Order for Second Reading read
  6.32 pm
  The Parliamentary Under-Secretary of State for the Home Department (Mr. Douglas Hogg): I beg to move, That the Bill be now read a Second time.
  Despite the complexity of the Bill—a fact for which I apologise — its purpose is simple: to provide more effective protection from the dangers caused by fire and to ensure a higher standard of public safety at those sporting fixtures where a serious risk to public safety may exist. I shall come to the detailed provisions in a moment, but before doing so I want to give the House some idea of the general form of the Bill.
  Part I of the Bill amends the Fire Precautions Act 1971. The Bill has six main purposes. They are as follows: first, to provide for exemption of certain low risk premises from the need to have fire certificates; secondly, to provide for limited charges for the issue or amendment of fire certificates; thirdly, to impose a duty on the occupiers of exempt and non-certificated premises to provide reasonable standards of fire precautions; fourthly, to impose upon the owners or occupiers of premises who have applied for certification a statutory duty to maintain a certain level of fire safety whilst their application is pending. Fifthly, the Bill enables fire authorities to issue prohibition notices in respect of premises where there is a serious risk to persons. Lastly, the Bill imposes on fire authorities a duty to inspect premises at intervals to be specified in guidance to be issued by the Secretary of State.
  I shall now summarise parts II. III and IV of the Bill. They implement many of the recommendations of the Popplewell report and are designed to achieve greater safety at sports grounds and indoor sports premises. This purpose is achieved by amending the provisions of the Safety of Sports Grounds Act 1975 and by the introduction of new provisions.
  This part of the Bill has five major objectives, as follows. The first objective is to give to local authorities the power to prohibit or restrict the admission of spectators to grounds where there are serious risks. Secondly, stands which hold 500 or more spectators under cover at all undesignated sports grounds will require a safety certificate. Thirdly, local authorities will be required to carry out inspections of designated sports grounds and grounds containing regulated stands in accordance with guidance issued by the Secretary of State.
  Fourthly, all appeals under the Act, including appeals against terms and conditions contained in safety certificates, will be directed to the court and not to the Secretary of State. Lastly, for indoor sports premises, licensing legislation will be extended so that licences will generally be required for indoor sports events to which the public are invited as spectators. In summary, those are the provisions contained in the Bill.
  I now want to revert to part I of the Bill, which amends the Fire Precautions Act 1971 and seeks to express in statutory form lessons which have been learnt as a result of a thorough review of the working of that Act. These proposals reflect the outcome of consultative documents published in 1985 and 1986.
  Under the Fire Precautions Act 1971 fire authorities are required to certificate all premises that are put to a use
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  designated under the Act and not otherwise exempted. Generally speaking, they include most hotels and boarding houses and those offices, shops, factories and railway premises where more than 20 people are employed to work at any one time, or more than 10 are employed on any floor other than the ground floor. In the case of offices, shops, factories and railway premises, it is known that many of these premises present little risk to persons in case of fire. To certificate them is not the most effective use of fire brigade resources.
  Clause 1 of the Bill enables the Secretary of State to specify in a designation order descriptions of premises which may be exempted. That general provision is of course subject to a number of qualifications of which I mention three. It is not intended that any hotels or boarding houses which are currently subject to certification should be capable of exemption. That is because they are not regarded as being low risk. Secondly, whilse the order will describe the classes of premises which may be considered for exemption, the decision to exempt will be made by the fire authority. Lastly, exemption will not relieve the owner or occupier from a duty to maintain standards of fire safety. Clause 5 will require exempted premises to comply with a duty to make provision for adequate means of escape and fire-fighting equipment.
  There are three other aspects of part I of the Bill which require rather more detailed mention.
  The Bill imposes a duty on the fire authority to reinspect premises already inspected and to inspect other premises as may be directed. Under the 1971 Act there is no duty on fire authorities to reinspect premises which have been certificated, although as a matter of practice most brigades do so. The Bill requires fire authorities to inspect premises in accordance with such guidance as the Secretary of State may give. Secondly, the Bill makes provision for a fire authority to issue a prohibition notice. Under the 1971 Act the fire authority may apply to a court for an order restricting or prohibiting the use of premises where there is a serious risk to persons in the event of fire. The Bill gives the fire authority the right to serve a prohibition notice which can come into effect immediately on issue.
  Thirdly, as I have said, the Bill makes provision for financial charges. It is the Government's policy that, wherever possible, the cost of local authority services should be borne by those who use them. Clause 3 enables fire authorities to charge fees to recover the costs of certification other than the cost of inspection. In substance, the fees will reflect the cost of administrative work such as obtaining further information from applicants, drawing up plans and preparing certificates. The charges to be recovered must not exceed the actual costs incurred, and I emphasise that the charges will not extend to the inspection of the premises.
  Parts II, III and IV of the Bill concern the implementation of the Popplewell report. As I have already given a broad outline of the provisions, I shall concentrate on four aspects. A major feature is the power to issue prohibition notices under clauses 23 and 24. Under the 1975 Act, the local authority must apply to a court for an order to restrict or prohibit the admission of spectators to a ground where there is a serious risk to spectators. The Bill provides that the local authority itself may serve a notice on the ground management where there is a serious

  809
  risk to spectators. The notice may apply to the whole ground or to part of the ground. The Bill provides for a right of appeal to the courts.
  The second aspect to which I wish to make specific reference is the duty of inspection provided by clauses 25 and 34. The Bill places a duty on the authority to arrange for periodic follow-up inspections of designated sports grounds and grounds which contain regulated stands. Most local authorities already carry out such inspections at designated grounds and the Popplewell report recommended that the practice should be made mandatory. The Government have accepted an amendment passed in another place requiring inspections of designated grounds to be made annually. Otherwise, the frequency and extent of the inspections will be as directed by the Secretary of State.
  I should like to mention those provisions in the Bill which provide for safety certificates for regulated stands. Perhaps the major innovation in this part of the Bill is that a permanent stand which provides covered accommodation for 500 or more spectators at an undesignated sports ground will require a safety certificate. Such a stand will be referred to as a regulated stand. The provisions of part III of the Bill apply to all undesignated sports grounds, regardless of the sport involved. The certification of regulated stands will be similar to that for designated sports grounds under the 1975 Act and may contain terms and conditions relating to such matters as exit routes, fire precautions and spectator capacity. As a consequence of these measures, and provided that the stands are used properly, the public may be confident that reasonable steps have been taken to ensure that they are accommodated in safety.
  Lastly, I wish to deal with the provisions relating to safety at indoor sports premises. Part IV of the Bill extends the system of public entertainment licensing to cover spectator sports activities conducted indoors. Subject to minor qualifications, the result will be that premises used for entertainments consisting of any sporting event to which the public are invited as spectators will require a licence. This will allow the licensing authority to consider all aspects of safety, including fire precautions and structural matters.
  Since the Bradford fire, we have all become more conscious of the danger that may arise when large crowds congregate at sports events. The main purpose of the Bill is to reduce that risk and to take practical measures to ensure greater safety for spectators at sporting fixtures. The other purpose of the Bill is to incorporate in statutory form the conclusions that have emerged from a comprehensive review of the 1971 Act.
  I am pleased to say that the Bill received all-party support in another place. I commend it to this House and hope that it will receive a Second Reading.
  6.45 pm
  Mr. Alfred Dubs: I, too, welcome the Bill. It represents a worthwhile advance in fire safety and the Opposition will ensure that there are no unnecessary delays in getting it through the House provided that we can subject it to proper scrutiny. We certainly want the Bill to become law. I do not think that it is immodest to point out that the important improvements made in another
  810
  place were largely at the instigation of Labour Members, and we shall seek to improve the Bill still further in Committee.
  An important aspect of the background to this legislation was the tragic fire at Bradford City football ground which led to understandable concern about the safety of sports grounds. The Bradford fire gave rise to the Popplewell inquiry and I welcome the findings of that inquiry, many of which are incorporated in the Bill.
  With regard to fire safety generally, the latest available statistics show that in 1984 there were just under 450,000 fires in the United Kingdom, of which just over 100,000 were in occupied buildings; there were 887 fatal casualties, and more than 11,000 non-fatal casualties, and many thousands of people were rescued by fire brigades.
  I wish to consider in a little more detail the more than 100,000 fires which occurred in occupied buildings as they are relevant to some of the provisions of the Bill. Most of those fires—nearly 59,000—occurred in dwellings, but there were about 7,500 in private garages and sheds and about 8,000 in industrial premises other than construction industry or agricultural premises. There were also about 1,700 fires in hotels, hostels and boarding houses and about 1,500 in places of public entertainment. Those categories do not exactly match those covered by the Bill, but they are relevant to them, as I shall make clear later.
  First, however, I wish to deal with the question of charges. I believe that this is the first time that any charge has been contemplated in this country for any matter to do with fire safety and I believe that it is a retrograde step. I fully appreciate that the charges provided for in the Bill relate to administrative matters and not to the cost of inspecting premises. Ministers have assured us in another place and in this House today that the charges will be kept as low as possible, but to me it is a matter of principle that there should be no charge for any aspect of fire safety because such a charge may act as a deterrent to people in ensuring that premises are properly inspected and certificated. If a charge attaches to any element in that work, the deterrent effect may lead to lower standards of fire safety. That represents the thin end of the wedge.
  Once we have embarked upon the path of charging people or firms for matters to do with fire safety, there is no end to it and step by step the Government could say, "Let us recoup more of the cost of the fire services by increasing the charges." I urge the Minister to think again. In Committee we shall seriously challenge that principle. No adequate justification for it has been put forward so far, whether in this House or in the other place. I should be surprised if the Minister could produce in Committee any argument to defend that proposal.
  My second concern relates to an aspect of clause 1 which, I believe, was the subject of considerable argument in another place. It concerns the exemption from the requirement for a fire certificate. I notice that instead of making mandatory some aspects of inspections and the collection of information, those matters are optional. When making a decision on whether to grant an exemption, a fire authority
  "may require the applicant or, as the case may be, the occupier of the premises to give such information as"
  the fire authority requires
  "about the premises and any matter connected with them; and
  (b) cause to be carried out an inspection of the relevant building."
  It is provided that

  811
  "the fire authority may make that decision without requiring any such information to be given or causing any such inspection to be carried out."
  I am not satisfied that there is a sound basis for making that entirely discretionary. It would be better if people were obliged to provide that information and if there were an obligatory inspection of the relevant building.
  I appreciate that the thrust of the Government's argument is that we should use fire service resources to the best advantage, and that there is a fear that the fire services may be obliged to spend too much of their time on small buildings or on buildings which are identical to other types of buildings and which, therefore, do not all need to be inspected. However, there is a simple answer to that. If the buildings are all of a type, and if the Minister says that the fire authority need not inspect all the buildings because of that, it follows that the inspection would be quick and need not take up too much of the fire authority's resources. The same would apply if the premises were small.
  I have had discussions with and representations from the National Union of Tailors and Garment Workers. Bluntly, it is concerned about safety standards in what would normally be called sweat shops, and in small premises relating to the clothing industry. Many hon. Members will know that there was a tragic fire in one of those premises in the Mile End road in October 1983 in which five women died. That gave rise to a further wave of concern about safety standards, especially fire safety standards, in such premises.
  The Minister said that small premises were not covered and gave some figures. He talked about factories and other types of premises being covered in which there are more than 20 people, or more than 10 elsewhere than on the ground floor. Therefore, smaller premises would not be covered. Although there may be many types of small premises in which fire risks are slight, I am concerned that in the clothing trade all the evidence suggests that the fire risks are not small. It is not right that those buildings should be exempt from general provisions that apply to other premises.
  Another type of premises is the one that is normally called "houses in multiple occupation". Having studied the Hansard of the other place, I am aware that when this matter was raised there the Minister in charge of the Bill stated that the inspection of houses in multiple occupation came under housing legislation and was the responsibility of local authorities. However, we know that local authorities do not adequately inspect houses in multiple occupation, and that a person living in such a dwelling has nine times the chance of suffering death through fire than a person living in any other type of residential dwelling. We also know that, of the 350,000 or so houses in multiple occupation, about 127,000 do not have an effective means of escape from fire. The Minister may argue that that is more properly a matter for housing legislation, but I would say no.
  This is a worthwhile Bill dealing with fire safety, and I cannot for the life of me see why it should not also cover matters relating to the safety from fire in houses of multiple occupation. The Minister will be aware that there has been an enormous campaign for many years to try to improve the safety standards in such residential accommodation. It would be sensible to say that now that legislation is before us, which, in the main is not
  812
  controversial but is widely accepted on both sides of House, we want it to go further and to apply to houses in multiple occupation.
  I turn to the second area covered by the Bill, safety at places of sport. I recently visited Chelsea football club. I appreciate that that club is already covered by other measures and that, therefore, its premises would not be changed by this legislation. Nevertheless, I went to look at the safety measures there, at the police control of the crowds and at the other measures. I was impressed by the safety measures that I saw. I was also impressed by the way in which the police controlled the crowds. On that occasion Chelsea was playing Manchester United and a big crowd was expected. I was impressed at the way in which, through television or video screens, the police monitored the crowd within the ground and in the adjoining streets. It was an impressive operation and I began better to understand the enormous efforts that are made to try to ensure the safety of crowds at football clubs.
  Prior to this Bill similar provisions have not been quite so readily applicable to other types of sports grounds. Therefore, I welcome this measure. I am not referring now to police control and am not suggesting that the Bill should cover that. However, it contains other measures relating to safety and I welcome those. I notice, for example, that in grounds for 10,000 or more spectators—I believe that that covers 163 grounds in this country—there will be further provisions for safety as described in the Bill.
  I am not completely certain about one measure. According to the Popplewell recommendations, there are 300 stadiums which house 500 or more people. They will be covered by the scope of the Bill. I wonder whether 500 is too large a cut-off point. There must be quite a number of sports stadiums and sports grounds which accommodate fewer than 500 people but in which safety measures are still important. If, for example, 300 or 400 people were in a stadium, there might be a significant risk if there were not adequate fire safety measures. Although I appreciate that one cannot cover such matters all in one go because that would put too big a burden on the fire services, I should have thought it worthwhile to consider lowering the cut-off point from 500 people.
  Finally, one point which concerns me was not mentioned in the other place, has not yet been mentioned here, and, so far as I can tell, is not referred to in the Bill. It relates to emergency lighting in sports grounds. Increasingly sports grounds have floodlighting so that spectators may attend events in the evening. That seems worthwhile and sensible. However, there are serious risks even in a relatively small ground if the main lighting fails and there is inadequate emergency lighting. I wonder whether the Minister would comment on that. If there is no provision in other legislation, and as far as I know there is none, there are serious dangers if the main lighting fails and there is no emergency lighting. There would be chaos at a sports ground if several thousand people were suddenly pitched into utter darkness through the failure of the floodlighting and other lighting.
  Mr. Clement Freud: Is the hon. Gentleman suggesting that sports grounds should have three circuits? Floodlighting is on a different circuit from normal lighting, so is he suggesting that there should be a third circuit? That seems extravagant.
  Mr. Dubs: Floodlighting mainly covers the pitch. I am talking about the lighting that enables spectators to move in and out of the ground and the stands. I was not aware that floodlighting lit the stands. If the lighting in the stands fails, the floodlighting would not enable spectators to see their way in and out of the ground.
  This is a welcome measure. We should like to take it a little further in Committee and to ensure that it reaches the statute book. It has the support of many organisations, including the Fire Brigades Union and the fire service, both of which are keen that it should reach the statute book quickly. I should be reluctant to see it die halfway through because of a general election. [Interruption.] I shall be happy to see a general election called, but I should like the Bill to be passed first. We shall do our best to ensure that the Bill is given proper scrutiny and a quick passage in Committee. It will add significantly to safety at places of work and sports grounds.
  7.2 pm
  Mr. John Carlisle: It is a pleasure to take part in a debate in which there will obviously be all-party accord. I certainly concur with the hon. Member for Battersea (Mr. Dubs) that we should like the Bill to pass through the House as quickly as possible, albeit with certain alterations in Committee. I agree that some aspects have been omitted.
  The Bill has come about because of various tragic events, including the fire at Bradford, the problems at the Heysel stadium, and the preceding crowd control problems at Birmingham and Luton Town football clubs. I am pleased to see my hon. Friend the Member for Luton, South (Mr. Bright) in his usual place behind the Front Bench because he will know that I was at Luton on that sad March evening. That experience made me give evidence to the Popplewell committee and perhaps spurred us all into action.
  We must remember that this excellent Bill covers all sports, and not merely soccer stadiums. As the hon. Gentleman said, soccer stadiums must already comply with legislative requirements. It is a little disappointing to see the sparse attendance on both Benches, especially considering the number of stadiums that will be affected, and it would have been nice to see some representatives from sports other than soccer because this far-reaching Bill will affect more clubs than hon. Members perhaps at present imagine. I am pleased to see the hon. Member for Stalybridge and Hyde (Mr. Pendry) present.
  The proposals of the hon. Member for Battersea to reduce the numbers in the stands and to erect other stands may result in village stadiums which do not have as many barriers and fences as major stadiums. I hope that this Bill will give us an opportunity to make grounds more open. I shall restrict my remarks to parts II and III, particularly to the provisions that deal with crowd control.
  Hon. Members do not need to be reminded that football hooliganism has played a large part in forming and necessitating the Bill. It is not a modern problem and it is not restricted to the United Kingdom, although the media sometimes give that impression. Many of us who have experienced hooliganism understand the problems of crowd control, particularly in and around football grounds. The Bill addresses football hooliganism and crowd control. We must remember that many problems and fatalities in stadiums have occurred, not necessarily because of bad behaviour, but because many people are
  814
  crammed into a small area. Their ability to leave the ground has been restricted in various ways, as was tragically seen at Bradford, and the Bill must address that.
  Because of football hooliganism and the troubles that it has brought to various clubs we have almost inevitably begun to pen fans in, which has caused additional problems of crowd control. We have erected fences not so much around pitches as around stands to prevent spectators from running on to the pitch and from throwing missiles on to it. We have had to erect safety barriers to control crowds and prevent them crushing people and, perhaps more sadly, to segregate opposing fans from each other.
  The enormous amount of work done in that area since the Safety of Sports Grounds Act 1975 has been funded largely by the Football Trust. Last week a tribute was paid in the House to its work and I endorse that this evening. Where large numbers of people congregate, particularly in football stadiums, we tend to put them into cages and pens. Some would say that, because of the way they behave, that is the only place for them. But that has resulted in additional problems of getting them out.
  I vividly remember the sad night in March at the Luton-Millwall game. Part of the problem was that the overcapacity crowd had to spill on to the pitch; the stadium was not big enough to hold them. That is when our problems of hooliganism got worse. I am not ashamed to promote the lessons we learned from the experience. We in Luton have taken measures, some of which were recommended by Popplewell, to counteract that. After the Luton-Milwall game the Football League proposed that the club should be fined £5,000 and should erect a fence all the way around the ground to prevent spectators from running on to the pitch. Two months later we had the tragedy at the Bradford stadium and immediately that restriction was withdrawn. The tragedy is that the Football League in its wisdom thought it fit to keep the crowd off the pitch in that way.
  Popplewell addressed the problem and perhaps it is a pity that nothing in the Bill deals with access to the pitch. Recommendation 35 on page 81 states:
  "The Group further recommends that the importance of allowing full access to the pitch where this is likely to be used as a place of safety in emergency should be made plain."
  On that evening that access was extremely important. Indeed, if the fence had been erected, a fire would have resulted in tragedy. It was pleasing to note that the Football League immediately withdrew its recommendation. We in football should remove fences, barriers and segregated areas rather than put them up if we are to introduce the family atmosphere that we enjoy at Luton. Recommendation 57 on page 83 of the report states:
  "In particular, at the present time segregation should not be advocated for sports other than soccer."
  In other words, Mr. Justice Popplewell was against segregation. The Bill might have addressed that problem. The experience in Luton since we banned away fans has been quite remarkable. The atmosphere on the terraces is friendly. My hon. Friend the Member for Luton, South will support me because he has, perhaps, had more experience with the town than I have. Luton is a pleasant place. We have tried to bring back the family atmosphere, and that is difficult to engender if opposing fans are determined to wreck not only the ground but the town. We at Luton have certainly found one of the answers to segregation. One of the other answers that Mr. Justice

  815
  Popplewell put forward—it is not in the Bill but might be introduced in Committee—is membership. I refer the House to page 46, paragraph 4.128 of the Popplewell report, which states:
  "I recommend that consideration should continue to be given to some form of membership scheme for Football League clubs in England and Wales."
  If we had a full membership scheme, there would be no need for fences, barriers or any type of restrictions at any of our grounds. That is certainly the experience that we have had at Luton. I am amazed that those who oppose all-membership schemes are happy to accept all-ticket matches for big games but do not want all-ticket matches for the rest of the season.
  This is a good Bill and one that is needed. It could be improved in Committee by amendments and new clauses that will open sports grounds further. That is what we should do. The Bill, perhaps, slightly misses its purpose, but nonetheless it will have the support of all hon. Members. It is a worthwhile measure which certainly deserves support both inside and outside the House.
  7.12 pm
  Mr. Clement Freud: I also welcome the Bill. On Second Reading, I wish it well, though there will be points that we shall wish to put forward in Committee.
  When children from my constituency come to the House of Commons, they tend to say, after a tour and after a talk, "Do we not have too much legislation?" Whereas on the whole one tends to consider that they are right, a Bill such as this is necessary because of the events that preceded it. This Bill will improve standards, and one only regrets the fact that it must follow the tragic events of 11 May 1985 at Valley Parade in Bradford.
  We welcome the fact that the recommendations of the Popplewell committee have been taken into account—which is greatly to the credit both of the Government and of Mr. Justice Popplewell, whose wise words have been heeded, including the words about annual inspections, which are applauded by both sides of the House.
  Clause 22 now allows local authorities to issue a notice on those responsible for administering a ground, restricting or prohibiting the admission of spectators until a risk is reduced. Before the introduction of clause 22, local authorities had to apply to a magistrates' court for an order to restrict entry. Does that mean that local authorities can take action without reference to a fire authority? I shall be happy to have an answer now, but I am content to wait until the Minister has examined the matter.
  In another place, Lord Taylor of Gryfe mentioned the Consumers Association and its criticism of the Bill for not adequately addressing the issue of informing the public about hazards.
  The House will know that I have spent much of my time over the years in this place pursuing issues connected with access to and freedom of information. In Committee, I shall seek to table an amendment in which the Consumers Association's philosophy is enshrined, whereby there will be a duty on the part of sports facilities to inform the public of the fire regulations and the situation in respect of facilitating exist in case of disaster.
  Some may ask, "What is the point of this sort of amendment? Nobody reads the small print; notices get stuck on walls but nobody reads them." That may be right
  816
  for 96 out of 100 people, but the other four are those on whom the public depend. They tend to be local journalists, consumer associations or simply spectators who are more concerned with safety than are others. An amendment such as that, to which I hope the Government will consent, would have substantial appeal.
  I hope that the Minister will keep his eye most specifically on the charges that are to be made, one accepts not for the inspection, but for administration. I am concerned that there will be no equality in the charges and that different parts of the country will impose different fees. That will not necessarily have anything to do with the identity of those who seek a fire certificate. The point made by the hon. Member for Battersea (Mr. Dubs) about extending the Bill, which is something that, in opposition, the Government sought to do to every Bill that came before the House, is realistically argued in respect of houses in multiple occupation. More and more local authorities arc forced by the shortage in council houses to put people into such accommodation; they deserve sympathy and must have the same safety regulations as those that apply to people who are more conveniently housed. I support the Bill and am grateful to the Government for bringing it in.
  7.17 pm
  Mr. Geoff Lawler: I shall long remember the atmosphere at Valley Parade on the December day when the new ground was opened. There was a capacity crowd with a number of people who, in many respects, had every right to be the most nervous about returning to a packed football stand, and yet at the same time were the most eager to go back to the ground that had experienced such a tragic event. They did so because they had faith that lessons had been learnt from the tragedy and that the club, on the advice of the architect and of Mr. Justice Popplewell, had taken all reasonable steps to ensure that they should feel safe and secure and that their confidence should be restored. Fencing had certainly been installed on one stand, yet it did not seem to deter those who might have imagined only too vividly how much more tragic it would have been if fencing had been installed on the stand that burnt down. They returned because they had confidence. The Bill gives that same confidence to many millions of people who regularly attend sporting events.
  Unfortunately, it seems that all too often a disaster of that magnitude must occur before lessons are learnt and actions are taken. Despite the Bill and any other measures that the House may pass, all possible events can never be foreseen. Unfortunately, disasters will always happen.
  The public have a right to expect the Government and Parliament to learn from disasters and to take appropriate action. We would be highly irresponsible if we failed in that duty. As far as possible, people expect us to minimise the danger of that sort of event recurring. The public do not expect measures or us to be perfect; they accept that there will always be the unforeseen. However, they will accept that only if the Government and Parliament have taken all possible steps to ensure their safety, whether on cross-Channel ferries or in sporting stadiums.
  Part of the reason for this debate is the work of Mr. Justice Popplewell. We all pay tribute to him for the work that he put into his report. It is fitting that he was invited to Valley Parade to reopen the new ground, because his

  817
  efforts and interest went beyond the call of duty and earned him great respect in the city of Bradford. I know that he has earned great respect in this House.
  In the aftermath of a tragedy, one way of measuring how effective a piece of legislation will be is to determine whether the disaster would have happened if the legislation had been on the statute book at the time. I am convinced that if this legislation had been in place the tragedy of May 1985 would not have taken place. The local authority would have inspected the ground annually and the great fire risk of the accumulated rubbish and lack of sufficient egress from the ground would have been discovered. Instead of hesitating about taking the club to court, as the local authority had to do under previous legislation, it would have been able to close the ground straightaway and prevent access by spectators. In any case, after August 1985 the ground would have been designated, as were the grounds of all third and fourth division clubs.
  Like the hon. Member for Battersea (Mr. Dubs), I welcome the amendment in the other place which requires annual inspections. I understand that that will not be too much of a burden for the fire service and it will give spectators extra peace of mind. I welcome the fact that the Government have incorporated that amendment in the Bill.
  In matters like this, a balance must always be struck between what is a practicable and reasonable burden and what is necessary to ensure people's safety. This Bill comes down on the right side of that balance. There are one or two points of concern which I hope will be looked at in Committee. One of them has been mentioned and it is the figure of 500 for the number of people that a stand may accommodate before it requires a safety certificate.
  There must always be an arbitrarily chosen figure, but one can picture the horror if a stand accommodating 450 people, and which, therefore, is not required to have a safety certificate, collapsed or burnt down in the same tragic way as the stand at Valley Parade did. I hope that that does not have to happen before the Government consider whether the figure of 500 is right. I hope that the Committee will look long and hard at whether 500 is the right level at which to pitch the threshold.
  The alternatives are stronger legislation or self-compliance. In terms of self-compliance, no one doubts that in most cases management is highly responsible. Equally, no one doubts that management is only human and can be fallible and that, despite the best intentions, the management of a stand that accommodates fewer than 500 people could find itself with a structure that did not meet the requirements necessary for a safety certificate. I hope that we will consider putting in a proviso to enable the Secretary of State to alter the figure by order or in the legislation itself. Of course, there is the ultimate sanction that a ground can be closed if it is considered unsafe. However, an extra guarantee of safety would be welcome.
  There is no provision in the Bill to govern the materials used in the construction of stands. Part of the problem at Bradford was that the timber and the tar roof enabled the fire to spread very rapidly. Even though timber providers and roofing contractors maintain that there is sufficient egress, it is still a source of worry if combustible materials are used in the construction of a stand.
  In the building regulations issued in November 1985 I was most disturbed to discover that it is still possible for
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  a stand to be built of exactly the same materials as those which were used in the construction of the Bradford City stand. I hope that the matter will be tackled in the legislation or that the Department of the Environment will look again at the building regulations and alter the guidance to ensure that stands similar to the one that burnt down at Bradford City can never again be built to accommodate large numbers of spectators.
  One further matter of concern that Mr. Justice Popplewell mentioned in his report is guidance about fire and safety standards generally for temporary stands and marquees. As we approach the summer, increasingly we see such structures springing up on village greens and in fields. They are a source of worry. I hope that that factor will be taken into account.
  In the last few years there has been little encouragement to people to return to football matches. On top of the prevalent violence at football grounds, the Bradford City football disaster was an extra deterrent to people to go to places where there is a large number of spectators, and especially to football matches. Unfortunately, we can never legislate to remove hooliganism, although one hopes that the steps currently being taken to reduce violence at our football grounds will be effective.
  The Bill goes a long way towards helping to reduce the chances of our football grounds continuing to be unsafe. Consequently, I hope that one of the effects of the Bill will be to make the elderly and the young feel safe and secure enough to attend football matches, knowing that they will be safe from disaster, even if not from violence. This Bill is the last chapter in the aftermath of the Bradford City tragedy. I hope that we will never require another such Bill. This Bill minimises the chance of a similar occurrence, and that is why I wish it well.
  7.27 pm
  Mr. Tom Pendry: The Bill is in five parts, but it seems when reading through it that it is in 55 parts. Some of the clauses are clumsy in parts and wrong in others. I cannot believe that the Bill is the Minister's property. He must have inherited it, because I am sure that his clarity of mind has not been brought to bear in this otherwise worthwhile Bill. I join those hon. Members who welcome it.
  I shall confine my remarks to the safety at sports grounds section covered by the Popplewell inquiry. I add my congratulations to Mr. Justice Popplewell for all that he has done in this area. As we know, he highlighted the potential dangers at our sports grounds and made a number of important recommendations, many of which the Bill has taken on board. Many of the timely interventions in the other place also helped the Bill and tidied it up. Without those interventions, it would not be such a good Bill.
  I wonder why the Government have not consulted some of the obvious people before introducing the Bill. The hon. Member for Luton, North (Mr. Carlisle) spoke about the Football Trust. It has already helped 54 non-league clubs. Why was the trust not approached before the Bill was drafted? I shall develop that point later. Without active help from the trust, many clubs would go to the wall.
  What about sports other than football which do not have the Football Trust to which to turn? Last week, we had an interesting debate on a range of sporting matters. It was good to hear contributions about sporting organisations. My hon. Friend the Member for

  819
  Gateshead, East (Mr. Conlon) referred to greyhound racing. What do race courses, greyhound racing and rugby league and rugby union clubs do without a Football Trust to come to their aid? Have the Government consulted them?
  The Government always seem to rush into legislation on sports matters. Of course, there was an urgent need for this legislation and something had to be done in the short term, but it was important to get the legislation right. There does not seem to be adequate consultation by the Government on sporting matters, as shown in this case.
  I do not want to be churlish. I want to be more constructive than hon. Members may think I have been so far, but those comments had to be made. I welcome the tightening of the regulations on spectator accommodation and support the idea of annual inspections. Only through constant and consistent monitoring can we stop tragedies of the Bradford type recurring.
  There are other clauses, specially clauses 26 and 31, where the Government could have got it wrong. Safety certificates will need to he issued for any stand with a capacity of 500 or more spectators. My hon. Friend the Member for Battersea (Mr. Dubs) and the hon. Member for Bradford, North (Mr. Lawler) believe that that figure is too high, but I am not sure that it is. To reduce immediately the level from 10,000 for a ground to 500 for a stand is an enormous leap for local authorities and fire authorities to cope with. I believe that there will be a constructive debate on the figure in Committee to ascertain whether it should he amended. I do not say that the present figure is right, but I do not know whether it has been considered adequately.
  The Bill's implication is that clubs with stands that are dangerous will, rightly, be prevented from using them until they are improved and made safe. But from where will the money come? That question has not been addressed so far. The Government are imposing strict conditions on small clubs, but giving them no help with improvements. No doubt, the costs will be shuffled on to the Football Trust and the Football Ground Improvement Trust. Both bodies do good work for the game, but the cost implications of the Bill, which are as yet unknown, will all fall on to the Football Ground Improvement Trust, which may not be able to afford them. By reducing the designated level to 500 overnight—I agree with my hon. Friend the Member for Battersea that it should be reduced even further—the cost will he pushed on to the smallest clubs.
  I am sure that the hon. Member for Luton, North will be interested in a letter which I received last week from a representative of the Vauxhall-Opel league which said:
  "I am very concerned at the implications of this Bill for clubs outside the Today league particularly as this league has been conducting a long campaign to improve the gradings at our club grounds."
  Were that league and other leagues consulted before the Bill was introduced? On top of this, the recent Football Association ruling which has banned plastic pitches for those clubs entering the FA cup competition will mean that small clubs will not invest in pitches that can mean a financial saving for them. I know that this point is close to the heart of the hon. Member for Luton, North. My own Hyde United, following much prompting from me and assistance from the Football Association and Football Trust, aquired an artificial pitch, but because of the ruling will no longer be able to use it.
  Mr. John Carlisle: While the hon. Gentleman is talking about artificial surfaces, would he like to reinforce the point that there was a rumour that artificial surfaces might be inflammable and that, if there were a disaster or tragedy such as that which occurred at Bradford, a fire could spread on to the pitch? Would the hon. Gentleman like to confirm that tests so far have shown that those surfaces would in no way constitute a greater danger than grass?
  Mr. Pendry: I am happy to give a plug for the hon. Gentleman, so long as it does not give him too many votes. I am sure that what he says makes sense. It is nonsense that the clubs in the lower levels of the league, which are trying to bring about a community spirit and use their facilities all week, should be penalised as they have been.
  The problems of finance continue with clause 31. Fees will be charged for issuing safety certificates, but their level is unknown. It is not clear whether the costs will be uniform across the country. Perhaps the Minister will clear up that point. Clubs already face high rates bills and will have to fund improvements. The recent test case by Sheffield United confirms that clubs must continue to pay for policing at grounds. That cost is on top of all the other burdens which they face. Furthermore, the Bill estimates that £1 million may be raised from these charges for its fire safety aspects, but no estimate is given for the sports grounds aspects. Why not?
  Local authorities should be inspecting grounds. It is thought that 4,000 man days will be needed for that job to be done properly. Some of the local authorities have already been rate-capped by the Government and will need additional income to afford those inspections. Our smallest sports clubs should not be forced to pay. I hope that there will be a great deal of rethinking of this aspect in Committee.
  The Bill's overall aim is admirable. It is time that we took safety at our sports grounds seriously. I wonder whether the legislation will make our football grounds safer or will just close them. I welcome the broad thrust of the Bill. I hope that the Minister will undertake to be his usual flexible self in Committee and will listen to the reasoned arguments for amending and improving the Bill.
  7.37 pm
  Dr. Ian Twinn: I am happy to join the general welcome given to the Bill. I congratulate my hon. Friend the Under-Secretary of State on introducing it. There is no doubt that the dangers of fire are real where the public come together.
  I should like to draw to the attention of the House one specific aspect where more preventive work can be done—emergency lighting. If the lights go out in any place—whether at a sports ground, at work or in a hotel, boarding house, factory or shop — and no other lighting is available, there is likely to be panic when people do not know their way to the exits. The tragedy at Bradford demonstrated the panic that can occur where there is no lighting problem. But in the recent Townsend Thoresen disaster the emergency lighting failed because it was on a central circuit rather than battery-power emergency lighting units. The case for emergency lighting is very strong.
  This matter was raised in the other place by Lord Graham of Edmonton, who was my predecessor in the constituency of Enfield, Edmonton. That demonstrates that this is not a party political matter but is of all-party

  821
  concern. I am concerned about it as a Member representing a constituency on the borders of Spurs and as a patron of Enfield Town football club — another great football institution.
  In Edmonton, we produce lighting. I am concerned about the sort of provision that the lighting industry can give a place of sport, or other places, but which is not being taken up at the moment. There is no statutory obligation to provide emergency lighting in many places in which the public congregate. The legislation is couched in terms of "should" rather than "shall". That has resulted in a lack of uniformity of provision. Fire prevention officers visit to check whether to give a certificate, and they may themselves be uncertain whether the owners of the premises in question should be compelled to put in emergency lighting. There is a real danger that, in some parts of the country, the law may be interpreted in such a way as not to force football clubs or offices to put in emergency lighting. I urge my hon. Friend the Minister to reconsider that point.
  As regards the inspection of premises to check on the provision of emergency lighting and perhaps other features, there is no uniformity among inspectors and no requirement to have regular inspections. I welcome the Government's acceptance of the amendment from the other place that requires annual inspections of places of sport, but that does not apply to the inspection of other places.
  I urge my hon. Friend to consider whether places that already have emergency lighting — those without it should have it—should be required to demonstrate that it works properly.
  At present, emergency lighting is usually supplied with a three-year warranty, so we may assume that there are three years of good life in an installation. After that, there is no way of enforcing an inspection. Perhaps it would be a good idea if the British standard for the installation were enforced and we had a regular three-yearly inspection that made it incumbent on the owner of the property to demonstrate to the fire brigade that the system worked. That would be a great help in preventing the types of tragedy that have taken place elsewhere.
  I do not wish to detain the House further, but I should be grateful if my hon. Friend would give the matter of emergency lighting his consideration in Committee.
  7.43 pm
  Mr. Douglas Hogg rose—
  Mr. Deputy Speaker (Mr. Harold Walker): Order. Does the Minister have the leave of the House to speak again?
  Hon. Members: Yes.
  Mr. Hogg: I wish to begin by thanking hon. Members on both sides of the House for the warm welcome that they have given to the Bill. That augurs well for a speedy passage; none the less, the Bill will go into Committee where hon. Members will subject it to the scrutiny that I would expect from them.
  I shall begin by dealing with the points that were so helpfully raised by the hon. Member for Battersea (Mr. Dubs). He and the hon. Members for Cambridgeshire, North-East (Mr. Freud) and for Stalybridge and Hyde (Mr. Pendry) were concerned with the issue of charges,
  822
  which the hon. Member for Battersea opposes on principle. I am afraid that he must accept that we have a difference of opinion about that: the Government think it right that when benefit falls to business proprietors, they should make a contribution to the costs. I emphasise that the costs will be modest. One brigade has estimated that the cost for a factory of 20,000 sq ft would be £30, for an office block, £60, and for a hotel with 30 bedrooms, £100. That shows how modest the charges are.
  The hon. Member for Cambridgeshire, North-East raised the subject of equality, as did the hon. Member for Stalybridge and Hyde. It is perfectly true that the Home Office will not set the level of fees. That is a matter for the fire authority, but the Home Office will be giving guidance. As both hon. Members will know, the fire inspectorate is able to nudge and guide to obtain uniformity of approach. It is the Government's intention to achieve such uniformity of approach to charging. That is not to say that the fees will be exactly the same, but it does mean that we hope that there will not be any great variation.
  On clause 1, the hon. Member for Battersea suggested that the obligation on the fire authority should be mandatory—in other words, it should require the owner to furnish information, and should inspect the premises. As the hon. Member rightly said, the applicant is under a duty to furnish information and permit inspection if required, but there is no reverse obligation on the fire authority. The reason for giving the discretion to the fire authority is that it is often already aware of the state of the premises; for example, it may have been involved in the planning stage, and it is therefore thought right that the authority should have the discretion. If that still worries the hon. Member for Battersea, we can discuss it again in Committee.
  The hon. Gentleman went on to comment on the clothing trade. He suggested that small premises below the present threshold should be subject to the certification process. In clauses 4 to 6 the Bill introduces a new general duty, to be observed by non-certificated premises, to provide reasonable means of escape, and fire equipment. As the hon. Gentleman knows, those clauses enable the fire authority to impose an improvement notice on such businesses, and if they fail to comply with the terms of such a notice they may well be committing an offence. Moreover, there is the general last resort power of the prohibition notice. In any event, the law is being strengthened by the procedure. That can also be discussed in Committee if the hon. Gentleman thinks that we have not gone into the matter far enough.
  The hon. Gentleman also raised the issue of houses in multiple occupation. Local authorities have the power, under the Housing Act 1985, to require satisfactory means of escape from fire, and they must consult the fire authorities. As another instrument of last resort, the fire authorities have power under clause 9 to impose a prohibition notice on houses in multiple occupation.
  The hon. Gentleman also raised the matter of regulated stands and suggested that a threshold of 500 was too high. He was supported in that by my hon. Friend the Member for Bradford, North (Mr. Lawler). I do not want to die in the last ditch on that matter. We are adopting the figure that was recommended in the Popplewell report. Hon. Members have suggested—or implied—that we could take a power by secondary legislation to lower the

  823
  threshold. Again, that is a matter for discussion in Committee. I see no objection to it in principle, but I prefer not to give a commitment now.
  The subject of lighting was raised by the hon. Member for Battersea and by my hon. Friend the Member for Edmonton (Dr. Twinn). For sports grounds, the lighting requirement can be made in safety certificates that deal with a designated ground, and could also apply in the terms and conditions of the certificate that is issued in respect of a regulated stand. The provision of adequate emergency lighting is one of the requirements that are set out in the Home Office publication, "Guide to Safety at Sports Grounds". I appreciate that my hon. Friend's remarks go further than sports grounds, in that he was discussing lighting in non-sporting areas, in respect of, for example, certificated or exempt premises. As my hon. Friend knows, the Bill contains a right of reinspection. I can see no reason why reinspection should not extend to emergency lighting.
  My hon. Friend the Member for Luton, North (Mr. Carlisle) mentioned fencing and rightly said that in certain circumstances the pitch could he the emergency escape route. That point is made in the Government's publication and I would expect an appropriate requirement to appear in the terms and conditions annexed to certificates issued for designated grounds.
  My hon. Friend the Member for Luton, South (Mr. Bright) has been present throughout the debate and is very interested in safety at sports grounds. He has played a prominent part in getting the Bill through and I am grateful to him for his assistance. He is a Parliamentary Private Secretary and, therefore, is precluded from speaking in the debate, but he has been here throughout and I am extremely grateful for his advice.
  The hon. Member for Cambridgeshire, North-East asked about clause 22. The answer to his question is that a prohibition notice is issued by the local authority rather than the fire authority, because a notice can extend beyond fire risks to other sorts of risk. However, a copy of the notice will have to be sent to the fire and police authorities which will be kept aware of what the local authority has in mind. There is a right of appeal.
  824
  I have referred to the valuable comments of my hon. Friend the Member for Bradford, North. I am grateful for his support. He says that the Bill will go a long way to prevent a repetition of the Bradford disaster and no one speaks with greater authority on such matters than my hon. Friend, whose interest is well known.
  My hon. Friend asked about combustible materials used in regulated stands. The building regulations prescribe what sort of material should be used, but if existing or new buildings contain combustible materials, the terms and conditions attached to the safety certificate will have to make special provision for that fact. In that way, the Bill carries the matter further forward.
  My hon. Friend the Member for Bradford, North also made the sensible comment that temporary stands are sometimes erected at sports grounds. That issue is not covered by the Bill, but it includes a power to impose a prohibition notice in a limited number of cases.
  The hon. Member for Stalybridge and Hyde asked who was consulted. The answer is that we consulted a number of people, including the Football Trust and the Rugby Football Union. The hon. Gentleman made a number of remarks about funding and I understand that his general position is that, although he welcomes the thrust of the Bill he feels that it is likely to impose substantial financial burdens. I hope that the hon. Gentleman will forgive me if I am fairly robust in saying that we have to decide where our primary duty rests. I suggest that the primary duty of the House is to ensure public safety and I do not think that it is asking too much of the sporting community for it to make a substantial financial commitment to that objective, which the hon. Gentleman and I share.
  I have endeavoured to answer the important points raised by hon. Members. I am extremely grateful for the support of hon. Members on both sides of the House and I hope that they will all serve on the Standing Committee. [Interruption.] I knew that that would be a popular suggestion. I hope that the Bill will pass speedily through Committee and become law.
  Question put and agreed to.
  Bill accordingly read a Second time, and committed to a Standing Committee pursuant to Standing Order .No. 61 (Committal of Bills).

  Pilotage Bill [Lords]
  Order for Second Reading read.
  7.54 pm
  The Parliamentary Under-Secretary of State for Transport (Mr. Michael Spicer): I beg to move, That the Bill be now read a Second time.
  The objective of the Bill is to reform the organisation of marine pilotage, to simplify its administration by doing away with much of the complex legislation that regulates it at present, and to make it possible for changes to be made in pilotage services to meet modern requirements and to reflect changes in the patterns of shipping and trade.
  The Bill does not reflect on the skill and professionalism of the pilots and others involved in the pilotage services. However, almost everyone concerned with pilotage has acknowledged for at least the past 15 years that the way in which pilotage is organised needs to be reformed. The increasingly competitive environment in which our ports and shipping industries are now placed means that we can no longer readily accept the costs of a service which is not as efficiently organised as it should be.
  Despite a few recent legislative changes consolidated into the Pilotage Act 1983, the basic structure of the pilotage organisation remains as laid down in the Pilotage Act 1913. The provisions that were added in the Merchant Shipping Act 1979 to provide a means of reforming the organisation of pilotage proved to be unworkable in practice once the consensus that had existed in the 1970s about the reforms that were necessary had broken down.
  At present, responsibility for pilotage services rests with the authorities for 93 pilotage districts. Those authorities, or the committees through which they operate, consist chiefly of representatives of the main parties with interests in pilotage, particularly the pilots, shipowners and port authorities. That structure has made it difficult to achieve agreement on the changes that need to be made in many cases. Perhaps understandably, each party has concentrated on pursuing its own interests, with the result that the best has often been the enemy of the good.
  Even when pilotage authorities have managed to agree on sensible measures of reform they have generally been frustrated because under existing legislation all the main interested parties can object to the draft byelaws and orders needed to implement the reform. Such objections made to the Pilotage Commission and the Secretary of State often go beyond purely local interests. The fear that precedents may be set for other areas has been a major factor in inhibiting agreement on reforms.
  I appreciate, of course, the efforts that have been made to achieve reform by means of that unsatisfactory system and I recognise the frustration that many must feel that so much work, discussion and negotiation has been put into reforming pilotage with so little positive result. All that effort has demonstrated that it is essential that someone should be in a position to take clear decisions and to implement them.
  The result of the present impasse is that the organisation of pilotage has changed little in recent years, even though the ports and shipping industries have been experiencing almost revolutionary changes. In particular, the number of pilots and where they are located have not
  826
  changed in line with changes in trade, with the result that in several places there are many more pilots than are needed.
  Working practices are often archaic and pilots' time is not used to the best advantage. Productivity levels are low in a number of cases and in some ports pilots take, on average, little more than one ship in or out each week. Costs are, therefore, higher than they need be and the system needs to be changed so that productivity can be increased and costs reduced while safety standards are maintained. Under present legislation, pilots cannot be required to surrender their licences except on grounds of misconduct or incompetence.
  Although the great majority of pilots are classed by the Inland Revenue as self-employed, it has been accepted for some time that reforms which would reduce their numbers would have to be accompanied by a scheme to compensate those who would leave the profession. Attempts have been made to obtain agreement between the various parties on such a compensation scheme. They have not, however, been acceptable to those who would have to foot the bill, the shipowners. The Government concluded that attempts at reform under the existing legislation were unlikely to produce the required results.
  Mr. Michael Brown: I believe that my hon. Friend just said that the average number of journeys or pilotage acts made by each pilot in the United Kingdom was one per week. Will he confirm that the number of pilotage acts by each pilot on the Humber is about 250 per year?
  Mr. Spicer: I am sure that, as my hon. Friend knows his area extremely well, that figure will be confirmed. I did not say that one pilotage act per week was the average; I said that the figure was as low as that, on average. However, I have full confidence in my hon. Friend's knowledge of the Humber, and I am sure that his statistics are impeccable.
  The proposal in the Bill is in essence a simple one—that responsibility for pilotage should be transferred to the harbour authorities. Pilotage has historically been organised separately from the ports within which pilots operate. In the majority of cases, it is run by separate pilotage authorities, of which the most important is Trinity House, which has responsibility for 40 of the 93 districts. In a number of other cases, it is true, the pilotage authority and the harbour authority are one and the same, but even there the detailed and complex legislative requirements mean that the conflicting interests have been able in practice to block reform. The movement of ships within ports now needs to be managed properly as a whole, particularly where large vessels or vessels carrying dangerous cargoes are involved. Pilotage is one of the services that a harbour authority needs to be able to offer and deploy to ensure the safe and effective conduct of its operations.
  Harbour authorities will wish to ensure that the necessary pilotage service is provided for their ports as efficiently and cost-effectively as possible. The present arrangements make that very difficult for them to achieve.
  There is no reason whatever to believe that harbour authorities will act without a proper regard for safety in taking their decisions on pilotage, any more than they do in exercising their existing responsibilities for safety within the port. If there are any lingering doubts about that, the

  827
  duties that the Bill will place on the authorities should dispel them. The Bill will place upon harbour authorities a clear duty to consider, and to keep under consideration, what pilotage services are needed to secure the safety of ships, and whether, in the interests of safety, pilotage should be made compulsory. They will also be given a duty to provide the pilotage services that they consider necessary to secure the safety of shipping. They will be obliged under the Bill to ensure that pilot boats are safe for their purpose.
  Mr. Peter Rees: My hon. Friend has rightly stressed the issue of safety in the consideration of this complex and important problem. As he must know, the English channel, between Dover and Folkestone, is one of the busiest waterways in the world. Will he consider an extension of the inshore zone which at present stops short of the Goodwin Sands? I leave it to him to say whether the area is in my constituency, but is there not a case for a further extension, in the interests of safety?
  Mr. Spicer: My right hon. and learned Friend is absolutely right, as he always is on safety matters—particularly in relation to the port that he represents. I can reassure him on the general safety objective. As to the extension of the area over which the harbour will have authority, particularly in so far as that applies to compulsory piloting, special procedures within the House will be needed. Within the area over which it has competence, the harbour has discretion on where it can apply compulsory piloting.
  Mr. Roger Moate: I suspect that my hon. Friend and I are concerned with the same areas. Will he confirm that we are reducing the present pilotage districts, and will he give further consideration to the point made by my right hon. and learned Friend the Member for Dover (Mr. Rees) before we reach the Committee stage? We are not talking about possible extensions, but we are restricting the present limitations.
  Mr. Spicer: I can confirm that the area over which the harbour authorities will have competence may in some cases be less than those in which pilotage districts had original competence. There are reasons for that. Some of the districts were originally established at the turn of the century. Clearly, the competence for navigation, navigation aids and the general technology with which shipping is conducted has changed since then. However, if the competent authorities wish to increase the area over which they have compulsory pilotage powers, they will be able to do so under special procedures. We have tried to streamline those procedures as much as possible, but if there are any objections to the extensions they will be subject to the special procedures of the House.
  Mr. Roger Gale: Grave concern has been expressed by those who inhabit the regions around the north Kent coast about possible contraction of the Thames pilotage area. It has been said that crossing the English channel on the approaches to the Thames is like trying to run across a three-lane motorway. Will the Minister give us an assurance that, before any of the proposals are introduced, safety will be of paramount importance?
  Mr. Spicer: I can certainly give that assurance. We are merely saying that we think that the competence for safety should rest with the harbour authorities, which will
  828
  certainly have the power, if they wish to do so, to extend it. No doubt they will note carefully what is said in our debate, and the views of Parliament, because if there were any objections to their intention to extend their powers of competence Parliament would have the final say on the matter. But safety will certainly be paramount in the Government's mind.
  Dr. Norman A. Godman: There are important and stringent regulations for the passage of tankers up the Clyde and the carrying of pilots on those vessels particularly when they pass close to Holy Loch and the nuclear submarine base. Will the Minister assure us that those stringent regulations will be adhered to vis-a-vis the devolution of pilotage authorities?
  Mr. Spicer: I hope that the hon. Gentleman will forgive me if I reflect on such a detailed question so that I can give him a proper answer rather than an answer off the top of my head. I shall consider the point carefully and give my answer in writing at the end of the debate, or when the Bill is in Committee.
  Mr. Jonathan Sayeed: If compulsory pilotage is required by an authority outside its area, a shipowner has the right to object to the Secretary of State. But will my hon. Friend explain why the Bill will not permit a shipowner to object to compulsory pilotage inside the area of the authority's competence?
  Mr. Spicer: We have taken the view that somebody must be in charge. The modernisation that is implicit in the Bill has been inhibited because so many people have got in on the management act. Port authorities have been given the responsibility to take decisions of that kind.
  One advantage of placing pilotage responsibility on the harbour authorities is that decisions can be taken where they should be taken, at local level, taking into the account the nature of the traffic in the port and the local hazards that have to be encountered. I hope that to some extent that meets the point of my hon. Friend the Member for Bristol, East (Mr. Sayeed).
  It has rightly been said that the approaches to no two ports are the same. The involvement of bodies at national level, including the Department of Transport, would only serve, as it has served under the present system, to encourage local arguements to be referred upwards when they can and should be matters for local decision.
  I shall not trouble the House by going through the Bill clause by clause, but I draw the attention of right hon. and hon. Members to a few points that I know have been troubling some of them. Clause 4 deals with the arrangements to be made between authorities and pilots for the provision of pilots' services. A number of types of arrangement will be possible, involving either employment by the authority or an agent or agreements with self-employed pilots.
  A harbour authority will be able to employ pilots directly, if it wishes. If pilots insist on direct employment, the harbour authority will be obliged to provide it, whether or not that is what the harbour authority wants. If, however, a majority of local pilots agree that the obligation to employ them directly need not apply, the harbour authority will itself be able to choose either direct employment or some other arrangement.
  Harbour authorities will have several means of controlling pilotage costs through their control over

  829
  charges and over the terms of contract for the provision of pilotage services where they are not employing pilots directly. We do not, therefore, consider that it will be necessary for the harbour authorities to have the power to withdraw pilot authorisation on the ground that the number of pilots is greater than is required where pilotage is being provided under a service contract and the pilots may be self-employed. I shall therefore be introducing an amendment in Committee that will limit the powers of harbour authorities in this respect.
  Clause 7 deals with compulsory pilotage and empowers competent harbour authorities to issue pilotage directions specifying the ships, areas and circumstances in which it is to apply.
  In another place my noble Friend the Minister with responsibility for shipping resisted an amendment to the Bill that was intended to exempt pleasure craft from compulsory pilotage. My noble Friend took the view that it was very unlikely in practice that competent harbour authorities would wish to make pilotage compulsory for pleasure craft—except, possibly, the very largest of them. My noble Friend felt, however, that, in line with the underlying principle of the Bill, it was right to leave it to the local harbour authorities to make this decision about pleasure craft in the light of local circumstances. However, concern has continued to be expressed by hon. Members on behalf of yachtsmen, in particular my hon. Friend the Member for Weston-super-Mare (Mr. Wiggin). Since it is of little practical consequence, my noble Friend and I have decided that in Committee I should introduce an amendment to exempt all but the very largest sailing yachts from compulsory pilotage.
  Mr. Jerry Wiggin: I very much welcome this change of heart by the Government. I thank them for considering the well argued representations of the Royal Yachting Association that have been clearly put to my hon. Friend the Under-Secretary of State for Transport through the House of Commons yacht club, of which I have the honour to be secretary.
  Mr. Spicer: I think that my hon. Friend does himself an injustice. He put forward extremely cogently the association's arguments on its behalf.
  Mr. James Wallace: On the first amendment that the Minister said that he will introduce in Committee, I think he will agree that clause 4 is very difficult to comprehend. Did he say that the effect of his amendment would be that if there were self-employed pilots in a given area they rather than the harbour authority would determine the number of pilots?
  Mr. Spicer: That will be the effect. The pilots would determine the number, irrespective of and without prejudice to the budget for the self-employed agency.
  Mr. Frank Field: What is the significance of that concession? I understood that the effect of the Bill would be to spread the cost between a larger number of people. Now it will be borne by a smaller number of people. What difference will that make to those who have to pay the charges? Furthermore, how many jobs will be lost from British ports to European ports?
  Mr. Spicer: There should be no effect on the self-employed. A budget will be established for the agency of
  830
  self-employed pilots. Under the amendment, it would be up to the agent of the self-employed pilots to determine how many pilots he employed. It should make no difference to the cost, but it would give flexibility and discretion to the self-employed pilots.
  Mr. Sayeed: I regret my hon. Friend's statement that he is to introduce an amendment to clause 4. One of the benefits of reducing the number of pilots is that all pilots will be kept up to date by constantly practising pilotage. His suggestion means that in some areas self-employed pilots will not undertake many acts of pilotage and that they will not be so up to date with the changing patterns in the estuary, or wherever they are piloting.
  Mr. Spicer: I do not understand why that should be so. The budget will be determined by the port authority and the agency. It is unlikely that the pilots will overman their agency; I do not think that my hon. Friend needs to be concerned about that. The ports will not lose control either over charging or over the budgets, but we are saying—quite properly and fairly, I believe—that the self-employing agencies should be able to decide how many people work for them. They would not be in business for very long if they were overmanned and exceeded their budgets. So long as we leave control over charging and budgeting to the ports, as we have, my hon. Friend's fears are not well founded.
  Dr. Godman: I have one final question that relates to the explanatory memorandum. Is there not a typographical error in the explanation of clause 6? Should it not read
  "competent harbour authorities to approve and license pilot boats"?
  The explanation refers to harbour authorities approving or licensing pilot boats. Is there not an error there?
  Mr. Spicer: Probably. I shall look at that point later and come back on it to the hon. Gentleman. It is a point of detail, and I do not think he would expect me to go into it during a Second Reading speech.
  The good sense of the general principle that harbour authorities should be responsible for pilotage has been widely recognised since the publication of the Green Paper in 1984. The Select Committee on Transport reached that conclusion when it examined pilotage in 1985. I believe that it is also increasingly accepted that the detail of our proposals provides fair treatment for those affected.
  The Bill provides a statutory compensation scheme for those for whom there will no longer be work as pilots. That is an unusual benefit to provide for people classed as self-employed. The ability of pilots who continue to insist on harbour authorities offering them direct employment, if that is what they want locally, together with the temporary arbitration procedure, will give an assurance of fair treatment as they enter the new arrangements. The Bill also deals fairly with employees of pilotage authorities.
  I share the general feeling that it would be most regrettable if the experience of pilotage which Trinity House has gained over so many years were lost. I am glad to know that Trinity House has formed a new subsidiary company—Trinity House Agency Services Ltd—which will be able to offer services on an agency basis to harbour authorities, not merely in those districts already served by Trinity House. We have tried in the Bill—for example, in our treatment of pension liabilities—to give Trinity

  831
  House Agency Services a fair start. I am sure that many competent harbour authorities will look seriously at the option of using that service.
  It is fair to say that many initial misgivings about the Bill have been overcome and that all parties want to ensure that the new arrangements are as workable and as effective as possible. I warmly welcome the discussions between representatives of the British Ports Association and the United Kingdom Pilots Association (Marine). They have led to improvements in a number of the Bill's provisions as well as covering a number of matters which go beyond it.
  The Bill's proposals will allow this service essential to the safety of shipping to meet current needs better than at present. At the same time it will free pilotage from the cumbersome statutory procedures which have made it difficult to adapt to changing circumstances. The reduction in unnecessary costs must be of benefit to the future prosperity of our ports. The future well-being of the pilotage professions, as well as the economy, are intimately linked to the prosperity of our ports. I commend the Bill to the House.
  8.22 pm
  Mr. Roger Stott: In House of Commons terms this is a small but important measure. Its importance is demonstrated by the number of hon. Members present on both sides of the House.
  Mr. David Crouch: We are surrounded by water.
  Mr. Stott: That will be a theme of my contribution.
  The Bill is contentious in some respects but it is not politically contentious, so the Opposition do not intend to divide the House.
  Mr. Frank Field: That is an extraordinary comment. Many of us represent ports' interests and are fearful of further job losses to Europe. That is a political issue of the first importance. It might not be a party issue, and perhaps there will be agreement across the Chamber, but perhaps some of us will divide the House. Surely it is a political issue.
  Mr. Stott: My hon. Friend represents Birkenhead on the Mersey and has a definite constituency interest. I am saying, with the authority of speaking from the Front Bench, that the main thrust of the Bill is not politically contentious. I disagree with many provisions in the Bill, but I have no doubt that they will be dealt with in Committee. The Bill does not create a major political divide between the two main parties.
  The House of Lords spent much time scrutinising the Bill. Those hon. Members who read Hansard will see that the House of Lords dealt with the Bill in detail.
  I, with others, have had the opportunity of discussing the Bill with those whom it will affect. We have discussed it with the General Council of British Shipping, the British Ports Association, Trinity House and the pilots. Naturally, there are substantial differences of opinion. Our job in Committee will be to attempt to reconcile some of the differences and to ensure that the Bill makes practical common sense.
  Britain has a long and proud maritime history. Our Royal Navy is still the finest in the world. Our merchant fleet once used to dominate world shipping. It is a great tragedy that our merchant fleet has declined. Britain
  832
  exports 80 per cent. of its goods by sea. Ever since the time of Henry VIII there has been pilotage in and out of our ports. We should do nothing in this legislation which will diminish or undermine the skill of pilots in their difficult job. We must ensure that we do nothing to undermine the safety of ships entering or leaving the United Kingdom.
  I do not quarrel with the Bill's principles, provided that the pilot's authority, when in charge of a ship, remains supreme, as it is, and as is provided in section 74(2) of the Merchant Shipping Act 1984. Pilotage should he the responsibility of the ports. The pilots themselves have given the reform qualified support. Their principal qualification is that the Bill must ensure a pilotage system which makes the safety of navigation the first priority. The Bill must do that. It must make the safety of navigation the first priority above commercial values or benefits to the ports. The Bill must also ensure fair and equitable treatment for pilots during transfer to and in the new system.
  Clauses 2 and 7 give powers to port authorities to determine which vessel, if any, should be subject to compulsory pilotage. The stated objective of reform is to reduce costs. Behind that is the general philosophy that ports, being in competition with each other, will fine tune the pilotage system as much as possible. In so doing, is there not a considerable risk that they will fine tune to such an extent that it might be acceptable in commercial terms but totally unacceptable in environmental risk terms?
  Clause 2, as amended in the House of Lords, places a duty on competent harbour authorities to have regard in particular to vessels carrying dangerous and obnoxious cargoes. Whether that is sufficient is questionable because an incident involving a tanker carrying heavy oil could have tremendous environmental consequences, whereas an incident involving a vessel carrying light oil, chemicals or, especially, gas could have catastrophic consequences for life and property if the vessel passes close to urban centres. What about ships that carry nuclear waste? In all the cases mentioned I believe that public interest overrides the narrower commercial case. Rather than face a duty to pay regard to the hazards involved, legislation should impose firm directives on all port authorities. I believe that that is exemplified by the intention to ban certain types of vessels from using the Minches, which can he considered open waters in comparison with the Channel and our other leading ports.
  Mr. Ian Wrigglesworth: Before the hon. Gentleman goes off to the Minches, I should like to draw attention to the question of safety, which is causing deep anxiety in areas such as Teesside. The position that he has described appertains in that region. There is a. nuclear power station there and hazardous substances are used by the petrochemical and steel industries. Therefore. many hazardous substances are going up and down the. river. Before the debate ends, I look forward to an assurance by the Minister that those anxieties can be allayed.
  Mr. Stott: The hon. Gentleman speaks with the authority of representing that region, which has a large petrochemical plant. The country that exemplifies the theory and the practice of free market forces, the United States, imposes rigid criteria on the movement of vessels, especially those carrying petrochemicals. Therefore, I

  833
  believe that it is absolutely essential that we should do the same. When the Bill is in Committee I trust that we shall have a debate about that issue.
  Mr. Donald Stewart: I wish to confirm the reference to the Minches, with which my constituency is conterminous. Is the hon. Gentleman aware that for many years the Scottish Guild of Pilots has been pressing for compulsory pilotage in that area? Vessels laden with oil from Sullom Voe may go down the Minches for shelter. If there was an accident, there would be enormous pollution and that would result in many fish hatcheries and so on being killed off within the area.
  Mr. Stott: The right hon. Gentleman draws attention to an especially important question. From my days in the Merchant Navy I remember on one particular occasion we sailed through the Minches without a pilot. Admittedly, we were in a fairly small ship—not a tanker, but a Bowater ship carrying paper pulp. The distances between which a ship has to navigate are quite small. A foreign flag skipper in a large tanker could find those waters extremely difficult to navigate. The right hon. Gentleman has made a sound point.
  An important clause within the Bill concerns pilot boats. Clause 6 gives total control to competent harbour authorities to determine standards in relation to the provision and standards of pilot boats. Those boats operate in all weather conditions, even when the commercial ships that they serve are seeking shelter. Pilots' lives depend upon them. Pilotage is a dangerous occupation. In recent years on average at least one pilot has been seriously injured or killed annually as a result of boarding or landing incidents. That represents 0·1 per cent. of pilots. If we exclude those who work in the North sea, that represents a higher accident rate than any other group of professional worker.
  Is it right that there should be no statutory regulations in the future? Draft guidelines were generally agreed in 1983, but I believe that they have never been implemented. The House should pay regard to the Select Committee on Transport and its report of 1985, especially paragraphs 125 and 126. They dealt with licensing and manning standards. The Committee strongly recommended that the responsibility for pilot boats, manning standards, the level of operation and efficiency should lie with the Department of Transport. It recommended that manning standards should be agreed between the local pilots and the Department's surveyors and that the Secretary of State should make regulations for such boats under section 2 of the Merchant Shipping Act 1979.
  I now wish to turn to what I, and no doubt other hon. Members, consider the most contentious issue in the Bill—the pilotage exemption certificate. The Bill imposes an obligation on competent harbour authorities to issue a pilotage exemption certificate to the master of any ship provided that he can demonstrate that he has sufficient skill, experience and local knowledge to pilot the vessel into their harbour. The harbour authority will be unable to exclude those classes of vessels to which reference has already been made and to which competent harbour authorities must pay particular regard under clause 2(2). In my view, a belt and braces attitude is required. The harbour authority will be unable to pay regard to the sometimes suspect insular regimes operated on ships. For
  834
  example, the authority will be unable to pay regard to physical conditions on board such ships—whether the ships are over-manned or under-manned or whether the crew is tired. The authorities will be able to provide the exemption certificates on the basis of flimsy evidence. I believe that the exemptions from pilotage certificates will accelerate the decline of our already declining merchant fleet. It will encourage aliens to dominate to a greater extent not only in our deep sea trades but also in our home trades.
  I have discussed this matter with members of the National Union of Marine, Aviation and Shipping Transport Officers which organises the officers on board our merchant ships. Many NUMAST ship-masters already hold pilotage exemption certificates. NUMAST is anxious to ensure that its members are treated fairly when it comes to the granting or renewal of such certificates. Nevertheless, NUMAST is astounded at the limited power given to competent harbour authorities to grant exemption certificates without any restrictions as to the flag of the ship, the standard of the ship, the nationality of the master or first mate of that ship, their command of the English language or, indeed, the trading patterns of that ship. I notice that the Minister gibed slightly when I mentioned the question of the English language. I accept an amendment relating to the English language has been introduced in the other place, but, even so, it is not explicit enough.
  There would be a safeguard if we could at least restrict such certificates of exemption to the masters and first mates of EEC flag ships. It should also be specified that such masters and first mates should be required to be regular traders within the particular port.
  Given the present state of the United Kingdom's shipping industry, I believe that there is no justification for allowing ships of any flag to enter our ports on the basis of pilotage exemption certificates. Such a policy would allow and encourage third flag carriers of dubious standards, in some cases receiving direct or indirect subsidies, to compete with our industry that is neither subsidised nor supported.
  Mr. Moate rose—
  Mr. Stott: I shall give way in a moment.
  The House will be aware that the United Kingdom does not operate the principle of cabotage. Our coasts are open to any foreign flag. However, there is precious little in terms of reciprocal agreements with any of our European partners. To institute a system of pilotage exemption certificates, especially for coastal vessels, will spell the end of our coastal trade as we know it. Moreover, it will encourage some British operators and shipowners to flag out as they flag out their deep sea vessels. It will be one more encouragement for British operators to leave the British flag. That will happen if we have a system of pilotage exemption certificates as envisaged in the Bill.
  Mr. Moate: There will be considerable cost involved in gaining such a certificate and it is unlikely that that cost will incurred unless a master is visiting port at fairly frequent intervals. In doing so he would gain familiarity with the port and earn his exemption certificate.
  Mr. Stott: There is no limitation on exemption certificates. A certificate could be given to any master of any ship because the Minister and the draftsmen have not

  835
  provided specific detail. Any master of any ship can gain a certificate. Masters will have to satisfy certain conditions in respect of their knowledge of a port, including the regularity of their entries into and departures from it. But is it right that a competent harbour authority—it will be only the authority, not the Secretary of State, Trinity House or the Pilotage Commission—should have sole responsibility for the granting of a certificate?
  Mr. Crouch: I do not follow the hon. Gentleman's great concern about the possible harm to coastal trade and traffic. The small port of Whitstable in my constituency will be a competent harbour authority. Coastal traffic from Cornwall to Whitstable brings granite to be broken in quarry or sand and gravel operations at Whitstable. It is dependent on two vessels of 400 to 500 tonnes coming from Cornwall each week to deliver the granite. They do not need a pilot to enable them safely to enter the small port of Whitstable, and that has been argued to me by the operators of the port. The masters make the journey twice a week; they know the port better than any pilot who might be called upon to bring in the vessels once every six weeks. I do not understand how the exemption certificate arrangements could harm that traffic, which admittedly is all under the British flag.
  Mr. Stott: The hon. Gentleman answers his own question in his last sentence. As he has said, the traffic is all under the British flag. I am not opposed to the granting of exemption certificates to masters who are currently operating in and out of United Kingdom harbours. I am saying that the Bill, if it is not amended, will open up the granting of exemption certificates in a way that will severely damage our coastal and deep-sea fleets.
  Mr. Sayeed: Will the hon. Gentleman give way?
  Mr. Stott: I shall complete my argument, and if the hon. Gentleman contains himself he will have the opportunity to intervene.
  For many years I acted as a quartermaster while pilots were performing their acts of pilotage on the ships in which I served. It is with that authority of experience that I believe that the granting of exemption certificates in the way that the Bill proposes will be dangerous and foolhardy and will do nothing to help existing pilots.
  Mr. Sayeed: Is the hon. Gentleman saying that he would be happy for the competent harbour authority to grant exemption certificates to British flag ships but not necessarily to those of other countries?
  Mr. Stott: If the hon. Gentleman wants me to be absolutely bold and truthful, that is right. I should be prepared to say that masters of British flag ships that currently have exemption certificates should have the right to reapply for them. I am not in the business of writing legislation—I hope that the hon. Gentleman is not— that enables any country's flag ship, irrespective of the standard of manning levels, the level of safety and the degree of experience, to be given an exemption certificate.
  I listened with interest when the Minister said that in Committee he would move an amendment to clause 4, which deals with the employment of pilots by the harbour authorities. As the Minister has said that an amendment will be introduced by the Government, I shall not delay the House by putting before it what I had to say on that issue.
  Many Members on both sides of the House have continually drawn to the Government's attention the
  836
  decline of our maritime fleet, and the right hon. Member for Taunton (Sir E. du Cann) and my right hon. Friend the Member for Cardiff, South and Penarth (Mr. Callaghan) are only two of them. So far the Government have criminally ignored the siren voices that have been raised on this issue. The decline is now entering its terminal stage and we must ask ourselves an important question: where in this island nation are the pilots of the future to come from? The majority of pilots have been seagoing masters or first mates, and there is no provision in the Bill for the training of pilots. I recognise that there is provision for extending the period of four years in which pilots can be replaced within their own ranks, but what happens after the four years have expired?
  If we have a declining merchant fleet and pilots leave the service, for whatever reason, how is our great trading nation to find the pilots of the future? I do not know whether the hon. Member for Crosby (Mr. Thornton) was a master mariner, but I know that he is a qualified pilot who piloted ships in and out of the Mersey. I suspect that he was trained as a pilot on that river. But where is such training to be gained in future? From where shall we obtain pilots in future if our merchant fleet continues on its present decline? The nation will be facing a serious problem.
  These are serious issues that will have to be addressed when the Bill is considered in Committee. I can say from the Opposition Dispatch Box that what the Government are trying to do in the general reorganisation of the pilotage service is to be welcomed, but there are differences of opinion on how the reorganisation should he carried out.
  8.48 pm
  Sir Paul Bryan: I am glad to be called to take up the remarks of the hon. Member for Wigan (Mr. Stott), who had great experience in the merchant navy. I must declare my interest as deputy chairman of Furness Withy Ltd., but I have nothing like the practical experience that the hon. Gentleman has enjoyed. My speech will not be on the shipping side of the problem, which is in the competent hands of the General Council of British Shipping. It will be addressed more to the problems of pilots, especially of the Humber estuary and of Goole, which is in my constituency.
  Pilots are small in number but extremely vigorous and persistent in defending their interests. This is hardly surprising for, almost by definition, they are rugged individuals who spend their lives imposing their will on ships and on foreign captains. In addition to the meetings with pilots of Humberside over the past years, I spent a day, together with my hon. Friend the Member for Beverley (Sir P. Wall), on the pilot's boat going up from Spurn to Selby. It was not a particularly choppy day but at Spurn point we could get an inkling of what life must be like on a stormy winter's night.
  The fact that the Bill has been through another place and has been thoroughly discussed there has disposed of a number of important issues. For a start, it is at last accepted by all interested parties, with varying degrees of enthusiasm, that pilotage should become a harbour authority function. As the Bill is the result of seven years', or more, argument and violent disagreement between the various vested interests, the problems it seeks to solve are clearly deep-seated and still far from settled, despite the long debates in another place.

  837
  I shall deal with the situation on the Humber. I was glad to hear that over the weekend the Associated British Ports authority met some 150 pilots to discuss the amalgamation of the pilotage service on the estuary and the self-employed system it hopes will follow. I understand that by an overwhelming majority of those who voted the pilots decided to proceed with the discussions. If the talks could be successful and reach an amicable conclusion, it would be a wonderful start for the new system in the area.
  The present three-part division of the Humber has meant that ships going upstream from Hull require two pilots, a Humber pilot to Hull roads and a Goole or Trent pilot for the rest of the journey. To a layman, I am bound to say that that has never looked sensible but one could see perfectly well why some pilots resisted amalgamation. It would mean significant and often highly inconvenient changes in their working practices.
  One obvious difficulty of Humberside pilotage is the intense competition, not to say antagonism, between the ABP ports and the private wharves. With the switch of trade to Europe after the war, Hull, like Southampton, had a heaven-sent opportunity to develop into one of the country's leading ports. That opportunity was thrown away and Hull, far from developing, is now a shadow of its former self as a port. However, that has not killed the traffic in the estuary. The tonnage entering the Humber is actually greater than it has ever been. It has switched to the other ports in the estuary, not least to the private wharves, such as Howdendyke, Gunness and Keadby. The private wharves probably deal with more ships, if less tonnage, than the ABP ports. Those wharves are run for the benefit of the customers and not, like Hull, for the benefit of the dockers, and that is why the small docks have succeeded. I am glad to say that the port of Goole, which is an ABP port in my constituency, has excellent labour relations and is well able to compete.
  That competitive background leads to the owners of the non-ABP ports questioning whether, in the matter of charges and general treatment, they will receive a service on a par with that given to the ABP ports which will, after all, be running the pilotage service.
  A number of provisions in the Bill are designed to protect all users of the service, but these are matters which can best be solved by consultation between the parties concerned. I am glad that representatives of the ABP recently met the Humber district wharf owners association to explain in detail their proposals for the pilotage service. More important still, it has been agreed that, following reorganisation, there should be regular consultations between the users of the service and the operators of non-ABP port installations.
  Humber pilots have expressed their concern on the future of compulsory pilotage. The fear is that as one of the main objects of reform is to reduce costs and put ports in competition with each other, in the words of the hon. Member for Wigan, the ports will "fine tune the pilotage system as much as possible." They ask for legislation which should, again in the words of the hon. Member for Wigan, "impose firm directions on all port authorities." I cannot agree with that. It would surely lead to a mass of detailed regulations of the sort we are trying to leave behind us.
  I should have thought that it would be in the interests of the ABP port authority on the Humber to get a
  838
  reputation for safety. The lower Humber is used by a wide variety of vessels, not only cargo vessels, but tankers carrying gas or oil products, and passenger ferries. The variety of traffic and the presence of large petrochemical installations to which ships pass very close make a strictly controlled system essential on grounds of safety. The port authority does not have to be virtuous to provide that safety; it is simply in its best interests. ABP assures me that all but the smallest vessels will either be piloted or be under the control of masters of known competence. The overriding commitment to safety, which we all share, can be discharged only if pilotage remains compulsory.
  The employment of pilots is the most sensitive area of all. It is quite understandable that the amendments proposed in another place took the form of a succession of attemps by spokesmen for the pilots to get the general assurances given by the Government for their future wellbeing, translated into statutory form. To some extent they were successful. Amendment No. 36 on arbitration is a real advance and meets some, but not by any means all, of their worries.
  However, at the end of the day, the contentment of the pilots will not depend on a parliamentary Act. As in any other industry, it will depend on the confidence built up between employer and employee, in this case the port authorities and the pilots. Problems such as compensation for pilots in years after the changeover cannot be written into a Bill. They must be a matter for negotiation and I believe the port authorities have already acknowledged that.
  In an industry where earnings vary so widely from area to area, anything in the nature of a statutory guarantee that no single pilot will, after reconstruction, earn less than he does now is clearly out of the question. But, of course, it is in everybody's interest, including the port authorities', that pilots in general will not be worse off than they are now.
  Proposals that consultation with pilots on such questions as pilotage orders should be written into the Bill illustrate an understandable—I stress "understandable"—lack of confidence in the future management. That is the sort of consultation I would expect naturally to take place and I hope the very large meeting that took place at the weekend between the ABP and the Humber estuary pilots will be the start of the build-up of confidence which will lead to a harmonious and effective system of pilotage so necessary to an estuary of that importance.
  8.58 pm
  Mr. James Wallace: As has already been said, this is a somewhat complex piece of legislation. Indeed, the word "complex" appears in almost all the letters that I have received about this Bill. Reading the reports of the debates in another place, I noted that the former Law Lord, Lord Simon of Glaisdale, challenged the Parliamentary Under-Secretary of State for Transport responsible for shipping, Lord Brabazon, to explain some of the clauses without reference to his briefing notes or the explanatory notes. That is what the public will have to do. It is important, although this is a complex piece of legislation, that we realise that it is our duty in our deliberations and in Committee to express clearly the objectives of the Bill and the means of achieving them.
  At the outset, I must stress that my right hon. and hon. Friends support the Government in the objectives set out in the Bill. There has been wide recognition that the

  839
  existing scheme for providing pilotage services has produced many inefficiencies—in some ports insufficient pilots to meet the demands, and, in others, a considerable surplus. As the Minister said when moving the Second Reading, the means of trying to rationalise the provision of pilots throughout the country have not been easy and many of the attempts to do that have been frustrated. There is a conflict of interest to which the Minister referred. I understand that the Letch agreement which was set up in the hope of effectively regulating to some extent the number of pilots and their proper distribution has by all accounts broken down and has not achieved its objective.
  Being fair, the imbalance has been accepted by many pilots. In a letter to my hon. Friend the Member for Isle of Wight (Mr. Ross) the honorary secretary of the Southampton and Isle of Wight Pilot Service said:
  "There appears to be little doubt that the numbers of Pilots licensed nationally is too high, and Pilots locally welcome the scheme to provide for early retirement."
  According to Mr. Sparkes, the honorary secretary, that is an area in which there is a shortage of pilots. He was particularly anxious that the early retirement funds should be available to pilots in areas and authorities that are currently undermanned. I hope that the Minister will clarify that point when he replies and tell us whether the Bill allows for pilots in those areas to take early retirement with the same fairly generous provisions made in the Bill. I hope that he will also say what steps exist in the Bill to facilitate the transfer of pilots from areas where there is a surplus of pilots to areas where there will obviously be a need for the harbour authorities to engage more pilots. If the Bill is to work effectively when it becomes an Act there must be that degree of flexibility and I look forward to hearing from the Minister what steps he proposes to take to ensure that that exists.
  We hope that by such rationalisation many of our ports will be able to reduce their costs and, hopefully, that will make them more competitive as between themselves and, as is the case particularly on the east and south coasts, more competitive with many European ports. Although this may not be the moment to debate light dues—I am sure that we shall have a debate on that soon—it is ironic that while we have one set of measures from the Government designed to increase competition, another set is due to be debated which alliance Members would maintain will remove the competitive edge from many of our ports.
  Mr. Wrigglesworth: I am grateful to my hon. Friend for raising that point because it affects ports such as the Tees which are in direct competition with ports on the mainland of Europe. I hope that the Minister will be able to assure my hon. Friend that there will be no knock-on effects from the implications of the Bill which will increase costs in ports such as the Tees and make them less competitive with Rotterdam and other places on the other side of the North sea.
  Mr. Wallace: I share my hon. Friend's hope that the Minister will give us an assurance about the effects of this Bill. I rather suspect that some of the pension provisions will initially at least increase the financial burden on some of the ports concerned. However, I am certain that the long-term aim is that costs should be reduced and I hope that the Minister will reassure us on that point.
  840
  The proposals were substantially endorsed by the Select Committee on Transport. From experience in my constituency of the two islands councils which are harbour authorities for Sullom Voe and Scapa Flow I am aware that the system whereby harbour authorities have employed pilots is one which, from many years' experience, has worked with considerable success.
  I want to dwell to some extent on the points which the Minister announced about the amendments that he proposes to bring forward. There is some fear that we are approaching the stage where the Bill has been watered down to the extent that it might not achieve some of its objectives. Can the Minister confirm that if pilots opt for self-employment there will not be any control over the numbers employed?
  The general manager of Aberdeen harbour board raised the matter with me, saying that his concern was shared by many other Scottish ports. He believes that it will be difficult, if not impossible, for the harbour hoard to employ the pilots and to remunerate them at the level which they have reasonably come to expect in recent years. The Minister said that the harbour authority would continue to set the pilotage dues and that the amount set would dictate the number of pilots taken on by the self employing agency. I shall be pleased to stand corrected if' I am wrong, but there is bound to be a contract between the agency and the harbour board and if the harbour board rightly has a duty to provide the service but cannot afford to employ the pilots directly a major bargaining counter will be placed in the hands of the agency. I wonder to what extent the harbour board would then haw the flexibility to determine the pilotage charges as it wishes.
  The scheme is set out in clause 4(2). The Minister has said that the pilots can insist on direct employment by the harbour authority, but the two authorities in my constituency are concerned about whether the inverse is true and the authority can insist on direct employment That is clearly a matter of concern when arrangements have been in operation for many years. Despite numerous assurances from Ministers, including Lord Brabazon, I am not sure that clause 4(2) actually achieves that, but perhaps we can go into that aspect in more detail in Committee.
  Mr. Michael Spicer: The hon. Gentleman raises two points. In a way, the one answers the other, but I shall try to deal with them briefly. The Bill makes it clear that the harbour authority makes the ultimate decision as to whether to employ people directly. That gives the authority the leverage in determining the costs of an agency relationship if that is what it wants. The authority will also be able to determine how many people to employ if it decides to employ directly. The idea that there is no leverage—I believe that some of my hon. Friends are also concerned about this—in determining the budget for the agency relationship is thus not correct because the authority has the alternative of employing people directly in the numbers that it wishes.
  Mr. Wallace: I follow what the Minister says, but there is a practical problem. Aberdeen harbour board feels that it could not employ sufficient pilots and pay them as much as they now receive, and if there were a substantial reduction in earnings pilots might not wish to be employed there. To employ them at the present remuneration, however, would skew salary and wage arrangements with all other employees. Therefore, although I accept the

  841
  Minister's point in theory, I believe that it will be very difficult for harbour authorities to work this out in practice. We shall certainly wish to scrutinise this aspect carefully when the Minister brings forward his amendment in Committee.
  I think that the whole House agrees that there should be no cost-cutting in relation to safety. Over many years our pilots have shown themselves to have great expertise and professional skill. As those qualities will in no way be diminished by the Bill, we can expect the high safety standards to be maintained.
  The issue of compulsory pilotage has already been raised. It was stated that there should be no encouragement or incentive to cut costs by trying to limit the areas of compulsory pilotage. There should be some scope for an overview. Clause 7(4) provides for some consultation with users. It is equally important that there should be some provision for consultation to take account of public interests. The other side of the coin has been of concern to the General Council of British Shipping. If there is any proposal to extend the pilotage limits, that will have consequences for the shipowners in cost terms and it will wish to see some right of appeal. This issue should not be determined solely by the harbour authority without any further recourse for appeal.
  The hon. Member for Wigan (Mr. Stott) raised the issue of exemption certificates. I was grateful to the hon. Member for Bristol, East (Mr. Sayeed) for pinning down the hon. Member for Wigan because it transpired that he was seeking a ban on all exemption certificates for foreign vessels, which is blatantly protectionism by the back door—[Interruption.] If that is not the correct interpretion of what the hon. Gentleman was asking for, I shall certainly give way.
  Mr. Stott: If the hon. Gentleman was listening, I said that I believe, as do many people, that the way in which the Bill is drafted at the moment will allow exemption certificates to be given to foreign nationals who, in my view, should not have them. That is not to say that if a ship, especially an EEC flag ship—I did use the words an EEC flag ship—had a regular run between this country and, for example, Germany, there could clearly be a case for the master or the first mate of that ship being given an exemption certificate, as is the case with a British master. However, the drafting of the Bill will allow a coach and horses to be driven through the legislation and exemption certificates will proliferate like confetti unless we tidy it up.
  Mr. Wallace: I am grateful to the hon. Gentleman for that clarification. I note that in those provisions it is important that local knowledge be taken into account before the exemption certificate is granted. That will not give scope to open up the legislation so that the coach and horses suggested by the hon. Gentleman could be driven through it. The points that have been raised about manning levels and the quality of other vessels should be dealt with, but are not perhaps appropriate in this legislation.
  Exemption certificates should not apply if the cargoes are deemed to be hazardous. Clause 2 refers to dangerous goods and harmful substances. My hon. Friend the Member for Stockton, South (Mr. Wrigglesworth) has already drawn attention to the many hazardous substances
  842
  which come in and out of the Tees. In my constituency is Scapa Flow and Sullom Voe, and we have problems with such hazardous substances. My hon. Friend the Member for Liverpool, Mossley Hill (Mr. Alton) has reminded me that Merseyside also has that problem. Public interest would look for the control of exemption certificates if the substances carried were especially hazardous.
  On a point of administrative detail, clause 10(3) provides for charging the masters of ships even where there are exemption certificates. As the service has not necessarily been given, perhaps the Minister could explain the basis of that charge.
  Finally, I should like to refer briefly to several constituency points to which I do not necessarily expect the Minister to give me detailed replies tonight, but perhaps he could advise me that replies will be forthcoming shortly because that would obviate the need for unnecessary amendments. As I have already stated, the system whereby harbour authorities employ pilots has existed for many years in Orkney and Shetland. We now face some difficulties with this legislation which will impose a statutory framework on a situation which has already settled down and is working smoothly. Inevitably, there are areas of discrepancy that we wish to see resolved. The Bill provides, for example, an arbitration procedure. However, the pilots who are employed by the local authorities already have their own contracts with built-in arbitration procedures. I doubt whether it is intended that there should be provision for double arbitration. Under existing legislation there is a consolidation charge in respect of vessels going into the Flotta oil terminal. Orkney Islands council sought the repetition of previous legislation so that the consolidated charge agreed between the local authorities and the operators of the terminals might continue.
  The composition of the examination committee in cases of a breach of discipline is important. At present local government legislation does not allow a member of staff to sit on what is effectively a council committee. While some steps have been taken in regard to that in clause 3(8), the provision does not cover the case where the person concerned is not a licensed pilot. Often, because of his seniority and the fact that he has not been engaged in pilot activities, the harbour master has lost his pilot's licence. Nevertheless, he is an important person who should be involved in determining discipline cases.
  My final constituency point relates to the areas of Shetland outwith Sullom Voe but within the remit of the Shetland Islands council, particularly Scalloway. At present, it has an informal structure, but the local harbour authority wishes to extend pilotage. There are difficulties fitting that into the Bill.
  That experience of the local authorities leads me to believe that the system can work and retain the high safety levels to which we have become accustomed and which are paramount. Therefore, my right hon. and hon. Friends will support the Government on Second Reading.
  9.16 pm
  Mr. David Mudd: The hon. Member for Orkney and Shetland (Mr. Wallace) rightly said that the Bill was remarkably complex. Some idea of its complexity will be gained from the fact that I found myself warming more to the reservations of the hon.

  843
  Member for Wigan (Mr. Stott) than to the wider issues raised in the scenario painted by my hon. Friend the Minister.
  My feeling about the Bill is that it does nothing to resolve three critical problems. First, it does not follow from the Bill that pilotage will become a safer occupation for pilots. Secondly, it does not follow that the new shape of pilotage will be any more cost-effective for the owners of the ships using the service. Thirdly, it does not follow that it makes sense to tack pilotage on as a further and ancillary service to the many other and often conflicting services provided by port authorities.
  The question of the safety of pilot boats has already been touched on by my hon. Friend the Minister, my right hon. and learned Friend the Member for Dover (Mr. Rees) and the hon. Member for Wigan. There is little reassurance in what I have heard so far to take back to the pilots of Falmouth to contradict the reported views of certain local harbour commissioners regarding the all-important question of the suitability and safety of cutters.
  One harbour commissioner has suggested that a pilot cutter and its crew are not necessary since pilots could as easily board vessels from a tug or a quay punt. Another commissioner has complained that the local pilot cutter is worth more than a third of a million pounds. The cutter in question underlines the fundamental anxiety of pilots for safety because the Falmouth pilot cutter, the L K Mitchell, is named after a local pilot who was killed only a few years ago, putting the safety of the cutter's crew ahead of his safety and his life. The cutter that admittedly has cost a third of a million pounds is the result of a century of evolution away from using tugs and quay punts. Indeed, the design of the vessel has been endorsed by the General Council of British Shipping and the sub-commissioners of pilotage as being the most cost-effective cutter for the port while still embracing economic, safety and environmental factors.
  Since the L K Mitchell came into service, on occasion she has been the only vessel in the port of Falmouth able to put out on a deep-sea mission. She has repeatedly played her part in rescues and in the conveyance of sick and injured seamen. Therefore, to suggest that the pilots of the port of Falmouth should use quay punts or tugs horrifies those who risk their lives in the interests of others. On a personal note, it horrifies me, as my father was one of many Falmouth pilots who, in the course of their duties, were crushed between the cutter and the ship when adapted and modified quay punts were used as pilot cutters.
  It has been suggested by my hon. Friend the Under-Secretary of State for Transport that the Bill will prove to be more cost-effective for the industry. Again, I suggest that in the case of Falmouth it may well turn out to be exactly the opposite.
  I was amazed by the statistics showing one pilot somewhere doing one mission per week. We know that it is not the Humber—we have been told that. We have been told all the places that it is not—we have not been told where it is, but it certainly is not in Falmouth. At present, the six Falmouth pilots give three-pilot cover 24 hours a day, resulting in 84 hours duty availability per pilot per week. The boatmen operate to the same roster. A 24-hour VHF service, a telephone service, as well as secretarial and office services, are freely available to those who wish to avail themselves of them.
  Mr. Moate: In view of what my hon. Friend says about the level of activities which will presumably be shared by the new harbour authority, why should he be concerned? Obviously all the pilots will remain in employment.
  Mr. Mudd: As my hon. Friend will note, if he contains himself, my question refers more to the competence of the harbour authority than to the ability of pilots to do their jobs effectively.
  If the pilotage service moves to the 39-hour week, on the General Council of British Shipping formula, Falmouth's six pilots would either have to multiply to become 15·9 pilots or obtain massive overtime payments, at the cost of the ship operator. My hon. Friend the Under-Secretary of State also suggested that pilotage should become another service provided by the ports. I would not argue against that, but I would argue against the likelihood of pilotage becoming an ancillary port service in which the independent advice and independent services now often voluntarily provided by a pilot might be directed by the port authority and charged to shipowners. Harbour authorities have a great deal more financially to gain if a ship is brought into port rather than left safely at anchor outside the limits, while equipment, charts and men are carried out to it.
  Pilots must not be forced to act as salesmen for other port services. Additionally, a pilot's skill is recognised and respected by a ship master because he accepts that the pilot is there for one task alone—safe navigation. If pilots are to become some sort of floating Kleen-Ezee salesmen, as they could under the Bill, and pilot cutters are to become bumboats, trading other services, that trust, respect and bond will be in peril.
  I refer now to the much-vaunted phrase "competent harbour authorities". It will reassure my hon. Friend the Member for Faversham (Mr. Moate). It is true that harbour authorities may be competent in business management, but it does not always follow that they are competent in the ways, traditions, knowledge and skills of pilotage. One Falmouth harbour commissioner has accused local pilots of acting like vultures in overmanning and overcharging. He said that the commissioners will
  "make the pilots tighten their belts."
  My hon. Friend the Member for Boothferry (Sir P. Bryan) spoke about the importance of confidence in pilots and the competence of those who employ them. That is a crucial point in the Bill. Should harbour commissioners, with no experience of the stress, strain, dangers and experience of the problems of pilotage, be responsible for introducing policies that will direct pilotage operations?
  With reference to the port of Falmouth, the argument is firmly weighted against the commissioners becoming the pilotage authority as we already have a highly efficient estuarial service covering the needs of Falmouth harbour commissioners, the reawakening of the sector covered by the Truro harbour commissioners, the potential regeneration of the port of Penryn, the needs of Falmouth docks, the interests of Carrick district council and of Kerrier district council and, to reassure my hon. Friend the Member for Canterbury (Mr. Crouch), the interests of Dean quarry and the Lizard ports which send the granite into the Kent ports.
  It would be a nightmare and nonsense to entrust thus responsibility to anything other than an estuarial authority in terms of the port of Falmouth. A Secretary of State for Transport recognised this very point a few years ago when

  845
  he refused the Falmouth harbour commissioners permission to run their limits conterminous with those of the pilotage district. Harbour authorities must not be allowed in any circumstances to become pilotage authorities until they have proved that they can run a safe and cost-effective service enjoying the good will of the industry and, above all, the absolute confidence and respect of the pilots themselves.
  My hon. Friend the Minister spoke at the beginning of the debate about his great expectations for this Bill. My mind went back to that great Charles Dickens novel of the same name and to its dramatic climax in which the escaping convict Magwitch meets a horrifying death in the Thames when he is in a pilot gig. The great expectations of the ports, of the General Council of British Shipping and of the Department must not be allowed to endanger pilotage practice and the great tradition of pilotage in the United Kingdom.
  9.26 pm
  Mr. Robert N. Wareing: The fact that this Bill is not politically controversial does not mean that it should not be very closely examined, as it was to some extent in another place. The organisation of pilotage has remained substantially unchanged since the Pilotage Act 1913. The Pilotage Act 1983 was merely a consolidating measure. I understand that the Bill has the support of the General Council of British Shipping and of Trinity House, and, although not all of its recommendations are being carried out, even the Select Committee on Transport is in favour of it.
  Nevertheless, I cannot resist the suspicion that this legislation comes about now as much because of the decline in our merchant fleet — a decline that is aided and abetted by the Government's policies — as of anything else. It seems to me not a coincidence that, although there has been a continuing decline over a long time in the port of Liverpool, it has accelerated since 1979, since when, as we know, there has been a cutting in half of the number of ships in our merchant marine and in the number of our mariners who sail in them.
  The Bill asks us to cut our coats according to our much diminished cloth. There are about 1,300 marine pilots, and this is perceived as being too many, given the lower levels of traffic entering British ports. I should like to pose a number of questions which require positive answers if the Bill is to progress through further stages towards the statute book. I do not think that the answers to all of these questions were given when the Bill went through the other place.
  In a joint memorandum by the British Ports Association and the General Council of British Shipping, one of the deficiencies of the present pilotage system was said to be that the organisations of the pilotage system are composed of representatives who often have conflicting interests. It is not clear to me how this conflict in interest is to be avoided merely by transferring the functions to harbour authorities, even though the Labour party is not in principle against the idea in the Bill.
  The Pilotage Commission and Trinity House give much valuable advice to the Secretary of State. They provide expertise which we should nurture. The Pilotage Commission is to be wound up. We are entitled to know at what point that will occur and who will then advise the
  846
  Secretary of State. We have heard from the Secretary of State that Trinity House has floated a subsidiary company which will assist in the implementation of the Bill, but the guidance which Trinity House has given has been invaluable in maintaining the present high standards. What is to be the future role of Trinity House in the pilotage system?
  In a letter of 23 March the British Ports Association said:
  "Direct employment has to be offered to the pilots but they and the CHA"—
  the competent harbour authorities—
  "may agree an alternative arrangement. This may involve an agency agreement using a body like Trinity House, or a separate company being set up which the pilots may jointly operate under contract to the competent harbour authority which may involve self employment."
  I hope that, to protect their interests, the pilots will be assisted in evolving co-operatives of pilots so that they will be not only still self-employed but more able collectively to protect their vital interests.
  What of the pilots? For example, we should address ourselves to their qualifications. If the qualifications of pilots are to be the responsibility of competent harbour authorities, will these not be purely local decisions, perhaps threatening the present high standards? Will this lead to a complete lack of uniformity? Will the qualifications for a pilot's certificate in Liverpool differ from those for a pilot's certificate in Falmouth, on the Clyde or on the Humber? We need some guidelines. Will there be guidelines or statutory instruments to ensure that there are sufficiently high uniform standards?
  My hon. Friend the Member for Wigan (Mr. Stott) has rightly drawn attention to exemption certificates. Again, here is decentralisation to a fault. If every competent harbour authority is to be responsible for deciding how many exemption certificates and under what conditions they will be issued, will there not be a great temptation for harbour authorities to go in for cost cutting and to give exemption certificates with great abandon? What statutory hold will the Government have over the activities of ports authorities to ensure that exemption certificates will not be given unless, of course, stringent guidelines are followed?
  The Select Committee on Transport recommended that responsibility for licensing and manning standards should be a Department of Transport responsibility. Why has that recommendation not been accepted? Until the ship owners withdrew in 1984, the earnings of pilots were subject to the Letch agreement between themselves and the pilots. With the Bill, will pilots have any machinery through which to appeal if local negotiations break down?
  The Minister touched only briefly on the subject of compensation. Can the statutory compensation package that was agreed between the pilots and the British Ports Association be sustained? Will existing benefits, including those for early retirement, be protected?
  In a statement issued on 21 November last year, Trinity House warned:
  "it will also be financially impossible to create a commercial company able to offer advantageous rates if that company has to assume the financial burden of superannuation and/or redundancy payments to its staff".
  How is fair and equitable treatment of pilots to be guaranteed? What machinery is being set up to help pilots who are made redundant to move to other parts of our coastline?

  847
  My constituents were told by the Chancellor of the Duchy of Lancaster, in his capacity as chairman of the Conservative party, to get on their bikes. Will the Tory party chairman now tell the pilots to take to their bikes without making proper provision for them? That question needs careful examination. It is all right to say that there should be mobility of labour and that pilots should be prepared to move around, but all too often, when we ask our people to move, we do not examine the social consequences in the areas that they leave, the difficulties of housing, the education of children and all the problems of looking after dependants. What assistance will the Government provide to ensure that pilots who are surplus in one area can supply the needs of another, without the dire consequences of which we should all be aware?
  The pilots are a loyal body of men on whose bravery and ability mainly unseen and unheralded—the vital trade of these islands has, to a considerable extent, depended. They are entitled to genuine consideration by the House, and I hope that, in Committee, not only the amendment to clause 4, to which the Minister referred, but new clauses will be added to give more protection to pilots who are made redundant, and to ensure that safety, not commercial profit, remains supreme — including the necessary provision for control over exemption certificates.
  9.38 pm
  Mr. Malcolm Thornton: The House will know of my special and, I think, peculiar interest in this subject. Once, many years ago, I was told that a Member of the House had been a member of the pilotage profession. That has not actually been proved, and, as far as I know, in this century I am the only member of that proud profession to be a Member of the House.
  Liverpool is one of the ports that is most affected by the Bill. I have been asked by my hon. Friend the Member for Wallasey (Mrs. Chalker), to whom I was talking only today, to apologise to the House for her absence this evening, which is due to a ministerial commitment. Many of her constituents who are former colleagues of mine went to see her as recently as yesterday to express their grave concern about the future of pilots who would be affected by the Bill. I heartily endorse the comments of my hon. Friend the Member for Falmouth and Camborne (Mr. Mudd), but he was arguing against the principle of the Bill and that battle has been fought and lost.
  As many hon. Members have said, the issue is complex and its history goes back over many years. Since I was elected to the House in 1979 I have dealt with five Ministers on this subject. My hon. Friend who opened the debate is Minister No. 6—or perhaps he is No. five and a half, because he is acting for our noble Friend Lord Brabazon of Tara. I have has considerable co-operation from Ministers and I am sure that my pilotage colleagues appreciate the efforts that have been made, particularly during the Bill's passage through another place, to meet the fundamental points that they put.
  There is no disagreement about the need for reform, and there have been a number of attempts to find a solution. The Pilotage Commission was established by the Merchant Shipping Act 1979 which was cobbled together hastily as an agreed deal in the run-up to the general election. Many of us felt that the 1979 measure provided an opportunity to tackle some of the inherent problems that had grown up over many years because of changing
  848
  patterns of trade and so on. They should have been dealt with in a comprehensive, comprehensible and sensible way, but the Pilotage Commission was not given the teeth that it needed to tackle the problems, to make decisions and to knock together the heads of some of the parties.
  There has been a failure of communication and in many ways this is a sad Bill. It is sad that it has had to come before the House. I have experience of the profession. Indeed, I was a pilots' representative and had to negotiate with the Pilotage Commission and I talked to representatives from other ports, so I do not have a narrow, insular view.
  Many of us were worried that no agreement was reached. We were drifting and we knew that if changes were not organised from within they would be imposed from outside. However, it is odd that, while many other countries are talking about increasing the protection of their coastal waters and extending pilotage cover, we may be going in the opposite direction.
  The steering committee on pilotage made some clear recommendations in 1974 about the need for protection in our coastal waters. Memories of the Torrey Canyon and other such disasters fade from many people's memories, but some of the cargoes being carried throughout the world, the size of some ships and the competence of some crews militate strongly against cutting pilotage cover.
  A famous report in Canada said that a pilot was the equivalent of an environmental protection officer. I talk from personal experience, because I have been on some ships carrying very strange cargoes. If anything had gone wrong, the potential for damage would have been almost limitless. The prospects for the environment and for the safety of life and limb and of the other users of the port were unimaginable. These are not idle words. As a former pilot, I have often said that if a pilot performs only one act of pilotage a year in which he prevents something like that from happening he has earned his salary and that of his colleagues 50 times over. That is what pilotage is about.
  We have also seen changed patterns of trade. I refer again to Liverpool, because it is a classic example of a need for change that has been long delayed. We have seen the collapse of far east and north Atlantic trade and, following our accession to Europe, we have ended up—as it were —facing the wrong way. We have seen a service which, when I was a member, boasted some 175 pilots reduced to about 130 pilots. They work hard, but it is recognised that their numbers can and should come down. The new legislation has massive implications for those men and for their attitudes in the future. Few if any hon. Members understand that, because to understand it is necessary to be part of it.
  My hon. Friend the Member for Falmouth and Camborne spoke of the independence of pilots. Our greatest strength, and the pilot's greatest strength, is that he is independent and known to be independent. It is recognised that he has a primary responsibility to the master and crew of the ship where he is performing his act of pilotage, and to other users of the waterways in which he is piloting. That independence is vitally important, but there is a serious danger that it could be eroded if pressures other than safety considerations are imposed.
  The hardest job for a pilot is to say no. He knows that if he does not dock a ship, there is demurrage; tugs and shore gangs have been ordered; and he is incurring considerable losses for that ship. He knows that, if such losses are incurred, the competitiveness of his port and,

  849
  ultimately, his own livelihood will be harmed. Therefore, he does not take such decisions lightly; but, because he is independent, he takes them, and his advice is respected as that of an independent person.
  If we take that away — if we reduce pilots to a position in which they are under someone else's authority —we shall break what my hon. Friend described as a trust which has been built up over many years, and which I value very highly. The master pays a great compliment when he says to a pilot, "Right, it's all yours," and leaves him to it. That will change if the master knows that, in future, pressures will be imposed that may affect the pilot's judgment. I do not believe that any of my colleagues will allow the new regime to affect their judgment, but the chances are that some people may think otherwise.
  Mr. Wallace: I appreciate what the hon. Gentleman is saying. However, I am sure that he will accept that, for 10 years or more, pilots have operated in Sullom Voe — which is a very difficult channel in which to manoeuvre —with the greatest safety, and with safety considerations still paramount. The pressures to which the hon. Gentleman rightly referred have not detracted from their high safety standards.
  Mr. Thornton: I do not suggest for a moment that the pilots who are employed will suddently cease to be competent, experienced, dedicated professionals, as they are today, or that they will cease to exercise as far as possible their judgment and independence. If, however, somebody says to them, "You will", or, "You must", that is a change of status that hon. Members must accept. The sea around our coasts is an ever-present danger. The recent ferry disaster reminded us of that. We must do nothing to reduce the safety measures that apply to our ships and the effectiveness with which they are piloted through our coastal waters. Pilots recognise the need for change. In broad terms, they have fought against some of the Bill's provisions, but they concede that this is the way the Government wish to go. Therefore, they do not oppose the basic principles of the Bill.
  Nevertheless, the House has a duty to ensure two objectives to which the hon. Member for Wigan (Mr. Stott) referred. I was interested to hear about his experience as a quartermaster. I hope that he did not listen too often to the siren voices to which he referred. Who knows? At some stage we might have been colleagues on a ship's bridge. He referred to two important objectives that must be ensured by this legislation. First, it must provide a long-term legislative framework for pilotage that will ensure safe navigation in our coastal waters. Secondly, there must be fair and equitable treatment for all pilots.
  As for the first objective, I have already mentioned the commercial pressures on the employee. But commercial pressure does not apply only to pilots. According to the Bill, commercial pressures will be applied to the masters of ships, whose owners may wish them to obtain exemption certificates. Hon. Members have referred to the open-ended nature of pilotage exemption certificates. I sat on a committee that examined masters and mates who sought exemption certificates. The vast majority of those who came before the committee were granted exemption certificates. My colleagues and I were there to ensure that
  850
  they were competent to handle their ships and that they were also competent to be let loose on the river, with all the other users.
  I am seeking not a semantic but a material change to clause 8, which says:
  "a competent harbour authority … shall … grant a certificate"
  to any person who applies for such a certificate, provided that he meets certain qualifications. I welcome the amendment that was included in the other place regarding the use of the English language. Stories of pilots trying to communicate on foreign ships where English is neither spoken nor understood are legion. I shall not detain or try to amuse the House with those stories. It was an important amendment. However, in clause 8 the word "shall" must be altered to "may". If the competent harbour authorities are to exercise their responsibilities, they must be able to say no. As drafted, the Bill says that they shall grant a certificate. They are left with no room for manouevre.
  Mr. Robin Maxwell-Hyslop: Before my hon. Friend leaves that very important point, how does this mandatory provision affect a port that has sand banks at its entrance which change after every major storm? If it is mandatory to grant an exemption certificate, how is a master who has not been in an area for nine months to know the present configuration of the entrance to a harbour such as Teignmouth in Devon?
  Mr. Thornton: We look at charts before we do a job. It is as simple as that. That is what being a pilot is about. My hon. Friend the Member for Tiverton (Mr. Maxwell-Hyslop) makes a valid point because provided that a master makes a certain number of passages into a port and is deemed to have the overall knowledge about buoys and markers under the terms of the proposed legislation the harbour authority "shall" grant permission. If the word used were "may" the point made by my hon. Friend could be taken into account. There are peculiarities. Pilotage is about local conditions. That is why we have pilots. They are experienced in local conditions. They are not general mariners but local consultants. As any consultant worth his salt knows, he keeps up with matters which affect his trade or profession.
  I turn to the effect upon pilots and the need to ensure that some recognition is made of the effects that the Bill will have on men whose livelihood is being legislated away. The Government have a responsibility.
  My hon. Friend the Member for Harwich (Sir J. Ridsdale) is not able to be here tonight, but he received a letter from the Prime Minister in answer to queries raised with him by pilots. The Prime Minister told him:
  "in drawing up the new proposals the Government's aim will be to deal equitably with all those involved including in particular both the pilots who will be retiring and those who will be continuing."
  We must ensure that that occurs in the legislation.
  When my right hon. Friend the Secretary of State published the Bill he said that the reorganisation would
  "provide a lasting basis for the future of pilotage as well as equitable treatment for the pilots themselves."
  The proposed compensation scheme has been agreed and accepted by the pilots. For those who volunteer to go the scheme will be fine, but it will create tremendous problems for many who are under 50 years of age.
  The opportunities for transfer to other ports have been mentioned. Negotiations are continuing. However, there is no compulsion on ports to accept transferees. The

  851
  competent harbour authority can decide on its own regime. It does not have to accept pilots who are surplus to requirements in Liverpool or anywhere else.
  The arbitration clause introduced in the House of Lords is welcome, but, in my view and that of many of my former colleagues, it is not adequate to deliver the Prime Minister's assurance.
  There is a misunderstanding about earnings. We are talking not about the protection of the present level of earnings but about the entitlements. We are talking about two distinct issues. Hon. Members will have seen the lists illustrating the discrepancies between ports. At some, earnings arc very high indeed because those ports are undermanned. At other ports earnings are lower than the nationally agreed figure because of overmanning. We are talking about entitlements, not current earnings levels. I welcome the assurance that has been offered but I must tell my hon. Friend the Minister — I say this with the greatest respect — that ministerial assurances are not worth a great deal.
  After the Bill has been debated and enacted it will be interpreted by the courts. It is those courts that will determine whether or not a competent harbour authority is entitled to do things. A ministerial assurance given on the day, even if given in good faith, will not be worth the Hansard paper on which it was written.
  It being Ten o'clock, the debate stood adjourned.

  Pilotage Bill [Lords]

    BUSINESS OF THE HOUSE
    Ordered,
    That, at this day's sitting, the Pilotage Bill [Lords] may be proceeded with, though opposed, until any hour.—[Mr. Ryder.]

  Pilotage Bill [Lords]
  Question again proposed, That the Bill be now read a Second time.
  Mr. Thornton: As I said at the beginning of my speech, I am a former member of a proud profession that has a long and honourable tradition. Indeed, pilotage is referred to as the second oldest profession in the world. I do not want to see that profession disappear. I do not want its professional standards eroded by actions taken by this House. I do not believe that, ultimately, this House should hand over the responsibilities for safe navigation around our waters to anyone, however well-intentioned they may be.
  Reference has always been made to the appeals procedure. Who will check the ports? If a port wants to extend its limits, the General Council for British Shipping can appeal. If a port wishes to contract its limits, who can appeal against that? I do not believe that this House should allow any competent harbour authority to reduce the pilotage districts of any port in this country unless it can satisfy the House that the proposed arrangements are proper, sensible and protect the safety of our coasts.
  We shall not be opposing the principles of this Bill, but I am bound to say that we have grave reservations. We shall be pressing the Minister hard in Committee for certain amendments which we believe will improve the Bill and will do those things which the Prime Minister and the Secretary of State said are necessary to provide a long-term framework.
  10.2 pm
  Mr. Donald Stewart: I follow the hon. Member for Crosby (Mr. Thornton) with mixed feelings, because I acknowledge his expertise and experience. I know that he will be a severe critic of any mistakes that I make in my few remarks.
  I believe that the protection of sea-going vessels should not be subject to commercial pressure. I think that is the main aim of the Bill. The need for independent pilotage is greater than ever. The reduction in the merchant fleet has already been referred to, and that means that our ports are now visited by ships carrying other flags. Many ships have gone to other flags because of the desire to cut corners on safety with reduced crews and so on. That is exemplified by reference to two vessels that have been discussed recently. When the Derbyshire sank, she was manned by British officers and 44 British crew. When the Kowloon Bridge was lost, only a few weeks ago, there was a total of only 28 Indian and Turkish nationals on board.
  The hon. Member for Wigan (Mr. Stott) made reference to exemption certificates. I agree that that is not the way to proceed with regard to pilotage of our ports. The competence of foreign vessels is being questioned, and it seems that the need for independent pilotage is becoming more necessary. Vessels are under pressure to achieve a quick turn round. Many cargoes are carried in containerships, but it was not so long ago when vessels would be alongside for a few days while general cargo was winched out. There would be time for the crew to have a rest from sea-going. Things have changed. A senior captain told me quite recently that he had been obliged to be in France, Belgium and Holland within 24 hours. That is a sign of the pressures that ships are under.
  There are dangers that might arise from the granting of exemption certificates. A pilot has said that on the Firth of Forth the ports are opposed to compulsory pilotage and that it is the Royal Navy that insists that pilotage on the main channel should be made compulsory. The pilotage in the area includes the main channel to Leith, and the ports and shipping agents have refused in the past to concede to the requests of pilots. That gives us some idea of what may occur in future if the Bill remains as it is.
  I question what has been said about competition. I have the figures for a vessel which was in the Firth of Forth recently. The cost of pilotage is a small percentage of the total costs that were incurred. Harbour dues amounted to over 35 per cent. Of all costs, light dues were 26 per cent. and pilotage costs amounted to 4·5 per cent. Whatever corners are cut and whatever economies are made, the effect on the costs of ships coming in and out of our ports will be only slight.
  I have been surprised by the broad agreement between the parties on the Bill. Following its introduction by the Under-Secretary of State, it was welcomed by the hon. Member for Wigan, who spoke from the Opposition Dispatch Box, and by the hon. Member for Orkney and Shetland (Mr. Wallace), who spoke on behalf of the Liberal party. Reservations have been expressed, questions have been asked and caveats have been entered. But there seems to be general agreement. I cannot share in that agreement and I intend to keep a watching brief on the Bill. I hope that those who consider it in Committee will ensure that it emerges from that stage of its consideration a far better Bill than it is now.
  10.8 pm
  Mr. Roger Moate: My hon. Friend the Member for Crosby (Mr. Thornton) referred, understandably, to his membership of a proud profession. It is because the House, Parliament and the country regard pilots with such respect that it has taken so long for the Bill to reach this stage in its consideration. Decades of debate have taken place on pilotage and it is respect for pilots, shipowners, and port operators that has resulted in a remarkably extended discussion of an incredibly complex and difficult problem.
  I begin by extending praise to my hon. Friend the Under-Secretary of State, because it is remarkable that we have progressed so far. Many of us can think back over decades of discussion and debate, and there has been immense difficulty in finding a solution to a problem that did not appear to have an obvious solution. There had to be change, and my hon. Friend the Member for Crosby was good enough to say that pilots recognised that there had to be reform. He recognised that there was overmanning— that there were too many pilots—and that change had to come. However, it has been remarkably difficult to make progress, and I am sincere when I say to my hon. Friend the Minister and his colleagues who have brought the Bill this far that theirs is a quite considerable achievement.
  The solution whereby the independence and self-employment status of pilots operating within a statutory framework of protection will become employment by a "competent harbour authority" is a fundamental change. It is not one that necessarily commands the support or enthusiasm of everybody, but it now commands the acceptance, albeit sometimes reluctant, of all the parties involved. That is a remarkable achievement, and I wish to put it on record that my hon. Friends have grasped the nettle and I am delighted that they have. I believe it to be a solution that will work. I believe it to be a principle upon which we can go forward and compete in this highly competitive world of port management.
  There should be two principles involved. First, our harbour authorities must be as free as we can possibly make them and they should be given as much flexibility as we can allow them to compete against other ports throughout the world. Secondly, we should introduce into the transitional arrangements some flexibility to allow the changes to take place as helpfully as we can with the ultimate goal of total competitiveness.
  The fundamental point is the revolution that has taken place in our harbour and ports operations in the past 20 years. Many of us have seen dramatic changes taking place. We would not have believed it possible that so much could have happened in that time. Many of us saw the dying days of the London enclosed docks and the old stevedoring practices. We have seen new ports emerge, new containerisation and new roll-on/roll-off ferries. We have seen a revolution in the ports.
  We have seen a revolution, not always for the good, in the merchant fleets of the world. However, the reform of pilotage has eluded us so far.
  The other thing that has eluded us is the reform of light dues. We are trying to improve our competitive position, to reduce the financial burden on our ports and on shipowners and to compete with the Europeans and other ports. The pilots are now making a sacrifice, as are the ports, which will carry much of the burden of the cost of
  854
  this reform. The Government should look much more radically at the question of light dues, just as they are asking the pilots to look radically at their own services.
  Mr. Michael Spicer: Even with the current rise, light dues are 18 per cent. lower in real terms than they were five years ago. That is exactly the opposite of pilotage charges.
  Mr. Moate: My hon. Friend will recall that I used the word "radically". I was talking not about minor or even major increases or reductions in charges but about the need to compete with the rest of the world. It is because of that need that we have the Bill today and why we have to tackle the question of the large number of pilots—too many for the needs of the industry. We must look at the whole scene. That scene includes the anomaly of British ports and shipping into British ports incurring unacceptable charges.
  I welcome the Bill. I believe that fundamentally we have got it right. If we can pass to harbour authorities the direct management responsibility for deciding where and when pilotage should be utilised, I believe that we shall have cut across a confused scene and produced a workable solution. As I have said, it is remarkable that we have reached this position at all. We must do the best job that we can even allowing for the fact that many parties do not support wholeheartedly what we are doing.
  As the hour is getting late and as the principle has been generally accepted if not enthusiastically endorsed by all concerned, I want to consider a few of the transitional arrangements that I believe are necessary. First, I deeply regret the point made by my hon. Friend the Minister about his proposal on numbers and the fact that if a port opts for self-employment the pilots will, in effect, be able to determine the number of pilots who will ultimately be engaged. As I understand it, when the port opts for a self-employed agency, the port can determine with that new agency the number of pilots. However, I believe that my hon. Friend is saying that thereafter the harbour authority will not be able to reduce the number of authorised pilots. I can understand why my hon. Friend has given in to this pressure, but I think that he was wrong to do so. He is perpetuating an overmanning arrangement and that ultimately will be to the detriment of ports and the pilots.
  In effect, my hon. Friend the Minister is stating that under the self-employment option the pilots can determine how many pilots there will be. Of course, if trade diminishes and there is a set contract price for that agency, presumably the pilots will dilute their own earnings. However, that is not necessarily for the good of the industry. In fact, some pilots might accept a dilution of their earnings and we might see an increase in the number of part-time pilots to the detriment of full-time pilots. My hon. Friend the Minister has gone against the principle and spirit of the legislation. However, the proposal may have no effect whatsover. I suspect that most harbour authorities will decide that, in view of this new condition, they will not choose the self-employment option. That is their decision. The new Competent Harbour authorities—I use that as a title, not an adjective—will be able to choose whether they opt for employed pilots or a self-employment position. In future, if pilots can determine their own numbers, I suspect that most harbour authorities will be persuaded to choose the employment option and I believe that on balance, that would probably be a good thing.

  855
  I hope that there will be time between now and the Committee stage for the Minister to amend that proposal slightly and allow for a review in a certain number of years or at the end of each contract. My hon. Friend has not got it right at the moment.
  I want to consider estuarial pilotage. My hon. Friend the Minister courteously dealt with a number of points made to him during his speech. I hope that he will reconsider estuarial pilotage before the Committee stage. Is it right that he should now reduce the pilotage area because that does not come within the harbour limits? I am referring in this context to the Thames, the Port of London and the Medway. My hon. Friend the Minister says that, if a harbour authority chooses to extend the area, it may apply to do so. It should he the other way round. We should assume that present pilotage limits which include hazardous areas outside existing harbour authorities could apply to reduce them thereafter. I hope that my hon. Friend will consider that point and tell us in Committee why he believes that that is not the right way to proceed.
  My next point concerns earnings, entitlements and security of employment of pilots. During the initial three-year period, pilots are entitled to help and to protection. Thereafter there should be a free market position. I understand that my hon. Friend has introduced arbitration procedures. I believe that they should be limited in time and universal in character. They should apply to all ports in exactly the same form and there should be no exceptions, but they should be limited in duration. I hope that the transfer arrangements will allow pilots who are surplus at one port to move to another, but that those arrangements will he voluntary and of limited duration. It is important that all these things should be of an interim nature.
  There is one area in which no provision has been made for any appeal or arbitration procedure. I refer to compulsory pilotage. I believe that an aggrieved shipower who feels that compulsory pilotage is being extended beyond where it applied before should have the right to appeal to the Minister and to say that he regards that as wrong. My hon. Friend the Minister assumes that all ports will operate commercially and will not unreasonably extend compulsory pilotage; but all port authorities will not necessarily be reasonable. Some may be politically motivated, some may be over-persuaded on grounds of safety, and others may be under undue influence from a majority of pilots seeking employment. I hope that before the Committee stage my hon. Friend will consider the possibility of building in interim provisions for a three-year period whereby any extension of compulsory pilotage beyond that which prevailed before this legislation should be subject to some form of recourse or appeal to the Government.
  I do not want the Government to be perpetually involved in these matters. I want them out after an initial period. I think that that is the fundamental message of the legislation. At long last we have grasped the nettle and reached a solution which allows surplus pilots to go out with dignity and with fair compensation. We have also achieved a much clearer system of management so that decisions in future will be competitive and commercial. That is very much to the good. But in the interim period of adjustment to the new situation we must have transitional arrangements which are fair to the shipowners, the pilots and the ports. We are forcing pilots to move from self-employment to compulsory employment.
  856
  If necessary, we should provide help with Inland Revenue arrangements. We should provide help in all these areas. If we can get the legislation through, the Government's achievement will be great and it is worth making some concessions to all who are adversely affected to achieve that far greater goal.
  I conclude as I began by congratulating the Government on their achievement in bringing the legislation thus far. I believe that it can be improved in Committee. Indeed, many of the points raised in this debate have been almost Committee points. My hon. Friend the Minister should not be surprised at that. It is a tribute to him. It shows that, broadly speaking, the House has accepted the principle of the legislation and is merely seeking to improve oil an otherwise very good proposition.
  10.13 pm
  Dr. Norman A. Godman: I have sat through the whole debate and heard some very interesting speeches, the most informative being that of the hon. Member for Crosby (Mr. Thornton). I should make it clear that I am a layman anxious to voice my concern about these matters but that I am in no way an expert. I had great sympathy with the comments of the hon. Member for Faversham (Mr. Moate) about the additional burdens. He mentioned, in passing, the additional burden of light dues. I am concerned about that burden being extended by the Government to quite small fishing vessels with a lower limit of 10 m. That is a matter of considerable concern to many Scottish fishermen, especially in the more remote maritime communities.
  Talking of remoteness, when the Bill was on report in the other place, in response to an intervention from Lord Kirkhill, Lord Brabazon said that the Clyde and the Forth are pretty remote from London. I shall focus my remarks on those remote waterways. The historic and dramatic changes in sea trade have damaged the Clyde more than any other waterway in the United Kingdom, with the possible and sole exception of the Mersey. Only this morning Scottish newspapers announced the lay-offs of 1,000 men in the Govan shipyard, which has just built a superb vessel for North Sea Ferries. In my constituency, the Greenock container terminal faces severe problems. I hope that the Secretary of State for Transport will grant me an interview to discuss that container terminal.
  I was pleased to hear of the sensible and constructive response to the Bill from Trinity House. On first reading of the Bill, my immediate concern was that the men concerned, the pilots, deserve no less than fair and reasonable treatment during the changes and when they take up employment with those competent harbour authorities.
  I ask the Secretary of State whether this is a cost-effective measure because I am worried that the Clyde ports authority could be saddled with additional financial burdens. Unlike the Mersey and the Port of London authority, the Clyde ports authority received no financial help whatever from the state, except for the assistance that is provided for the severance scheme for registered dock workers. That is the only help that we receive on the Clyde. Help is given to the English authorities that I have mentioned but denied to the Clyde. That is disgraceful and scandalous, especially in the light of the threadbare circumstances of the Greenock container terminal.

  857
  I support the observation made by the right hon. Member for the Western Isles (Mr. Stewart) about the Minches. I was told that those waters were too navigationally difficult for stern trawlers to fish for mackerll. I do not mind seeing Russian, East German and Bulgarian ships klondyking there, but they are too big for those waters. That is evidently the case with the tankers that sail through the Minches. Such tankers should be directed out of those navigationally difficult waters to the west of the islands.
  I welcome clause 5 but wonder why it specifies a temporary procedure. Pilots and harbour authorities may hold conflicting views from time to time on, for example, safety matters. Where such conflicting perceptions occur, might not some form of arbitration be necessary?
  I have a minor quibble about the wording of clause 6 to which I referred when I intervened in the Minister's opening remarks. I suggested that there was a typographical error in the explanatory memorandum to clause 6. I thought that it should refer to licensing approval and to the licensing of vessels. My minor quibble about clause 6 relates to the fact that two words are used, "ships" and "boats". Why not use the generic term "vessel" which might avoid some difficulties with clause 6?
  My chief anxiety relates to the provision for granting exemption certificates. Will the competence of an applicant for such a certificate be judged by national criteria as well as his or her grasp of local knowledge? Will there be written examinations? How will the command of English of a foreign national be tested? Will such an applicant face both written and oral examinations? Is the Minister satisfied with the proposed surveillance of those licence holders?
  There is a widespread belief among British fishermen that fishing licences granted to Spanish skippers to fish in United Kingdom waters are hawked around Vigo and used illegally by other skippers. Indeed, the skippers and donors in that Spanish port have a fairly substantial kitty, which pays the fines for Spanish skippers caught fishing illegally without a licence. Hon. Members may argue that there is a world of difference between fishing licences granted under European Economic Community regulations and these exemption certificates, but we need to
  858
  know about the examination of applicants and the surveillance and monitoring of the holders of such certificates.
  Naturally I am most worried about the safety of vessels going into and out of Scottish ports, especially those on the Clyde and the Forth. Both the Clyde and the Forth enjoy fine reputations for safety. That is not to say that we never witness strandings.
  Mr. John Home Robertson: My hon. Friend is probably aware that last winter a gas tanker went aground in the Forth off my constituency. Does he agree that in a busy waterway like that, where many hazardous cargoes are being carried to Mossmorran, Grangemouth or Rosyth, and where other activities include fishing and oil exploration, both mariners and people living ashore must be worried about any prospect of widespread exemptions from pilotage?
  Dr. Godman: My initial reaction is that no exemption certificates should be awarded to foreign nationals for the Forth or the Clyde. I shall be accused of excessive chauvinism, but in these waterways we not only have vessels carrying liquid nitrogen gas and chemicals to and from Mossmorran, but nuclear submarines. They are a familiar sight to my constituents. That is why I intervened earlier about the present stringent pilotage regulations for tankers which sail to and from a petro-chemical complex on the north shore of the Clyde. They must pass close to Holy Loch, hence the stringent regulation that no vessel over 500 tonnes can pass along that channel without a pilot.
  My initial reaction is that the competent harbour authority, which for the Forth must be the Forth ports authority, must be severely critical in defining who is sufficiently competent to earn a certificate of exemption. As my hon. Friend the Member for East Lothian (Mr. Home Robertson) said, there are potential dangers in the two waterways.
  The management of safe pilotage measures must be of the highest order. Management skills exist. We have the finest pilots in Europe. Where will new entrants be found during the next decade? It is with those criticisms that I respond to the Bill.

  Pilotage Bill [Lords]
  10.35 pm
  Mr. James Hill: The Bill is important for my constituency. As hon. Members know, Southampton docks have been in a state of flux for some years, and, as a result, pilots at the Southampton and Isle of Wight pilot service have suffered. In 1981, there were no shipping movements in the port of Southampton, and, of course, it seriously eroded pilots' incomes. Pilots have been extremely worried since the release of the Green Paper. I pay tribute to them. They operate in all weathers and have an admirable safety record. They are truly professional men.
  The port of Southampton handles some of the largest bulk carriers and container ships afloat. It contains the vast Fawley oil refinery. Tankers of up to 500,000 tonnes visit the port. In Marchwood, on the other side of the Solent, there is the Army high explosives depot. A tremendous amount of dangerous cargo moves up and down the Solent every day. Isle of Wight pilots have performed an invaluable service. On 27 March they wrote to me, stating
  "The self-employed regime of Pilots licensed by Trinity House has produced a service upon which it will be hard to improve".
  That will be so. Of course the pilots are concerned that all work in future should be safe, expeditious and as efficient as it is now. They plead that, although they are to become employees of Associated British Ports, safety should not be compromised or inefficiency creep into the service. They are proud enough, even though they are to become employed, to give the same service for which the port is renowned. They make the point that:
  "The present Service is seriously undermanned, and an early priority must be to re-assess the pilotage requirement in the area, and to appoint the proper number of Pilots"—
  that will be up to Associated British Ports—
  "to provide for the need."
  The pilots also make the point that:
  "the numbers of Pilots licensed nationally is too high, and Pilots locally welcome the scheme to provide for early retirement."
  The pilots also state:
  "It is believed, however, that the plan should be available to Pilots in this District despite the undermanned situation, and that the vacancies so created should be filled by appropriate transferees from other areas."
  The first consideration must be that there is ease of transfer between the various areas of the United Kingdom, they are especially worried about the conditions after the appointed day and about the funding of the pilots' pension fund.
  I have often talked to the pilots and I know that they have taken this as an inevitable change. They have not welcomed it, and I do not want anyone to assume that they have, but they realise that the time for change has come and they hope to produce a service that will meet all future needs. They are fully aware that there will be dispute procedures, and I think that this will be one of the great talking points, not only for the British Ports Association but between Associated British Ports and the pilots themselves. The pilots make the point that they still wish to give exactly the same service that has been enjoyed by shipowners in the past.
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  My hon. Friend the Member for Crosby (Mr. Thornton) implied that there could be commercial impact on pilots to do foolhardy things. He did not say that, but that was what he meant. I give him the analogy of a pilot employed, perhaps by British Airways, of which I have some little knowledge. At no time is there any way in which a firm such as British Airways could possibly influence the decision of the captain of an aircraft by saying that is was commercially vital to get into an airport at a certain time and to get out again regardless of the conditions. What my hon. Friend implied was probably a little bit of a red herring.
  I cannot see a substantial employer such as Associated British Ports risking safety in any way at any time by making a draconian statement to a pilot that he must complete his mission "or by goodness, there will be trouble." It is up to the responsible port authorities to make it perfectly clear that at no time will there be commercial impact of any sort to make a pilot do anything other than what he thinks is professionally right.
  Obviously, in the reorganisation surplus pilots would be permitted to retire early on favourable terms. When we were discussing this in a Back Bench Committee I said that I feared the three-year limit. I was awfully worried that in a port such as Southampton there could be a certain amount of redundancy because it lost contracts for the container port or because for a while, there would not, for many reasons, be so much shipping in the port.
  The pilots who would take redundancy have nothing to fear. Those who say at the end of the three years that they will stay on may give rise to overmanning, and there could be pressure to release a certain number of pilots. That must be carefully looked at. An Opposition Member made the point that pilots must he treated fairly. That is right and must be emphasised in practically every line of the Bill. We must not destroy the morale of people who have give such excellent service to Britain.
  One of the big problems that I am sure the Minister has already noted is the arbitration procedure. This has only just been brought into the Bill in another place. I know that already the British Ports Association and Associated British Ports have difficulties about the manning of an arbitration committee. I shall not weary the House with details, because at the beginning of the debate some hon. Members spoke for far too long. That is my personal opinion. I shall not worry my hon. Friend the Minister with the details at this time of the night. However, I can produce chapter and verse on their initial jockeying for position to man the arbritration committees. I am especially concerned that we have been talking about compolsory pilotage. It is important that masters of ships who can navigate safely without pilots and who have a proven record, local knowledge and a good understanding of English and of all the difficulties in the area should he allowed to undertake that navigation. That will in some way cut charges. The operations director of Townsend Thoresen says in a letter to me that there should be
  "a Right of Appeal against the extension of Compulsory Pilotage, and the provision to make a charge for the privilege of employing Masters who hold Pilotage Certificates."
  That is a view from the other side, and I am sure that my hon. Friend the Under-Secretary of State will take it into account. The operations director makes a point which is important for my area. The competent harbour authority is not just one person. He says that the Solent probably contains

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  "five CHAs and also, (almost uniquely) a Queen's Harbour Master".
  The areas of responsibility could overlap. He says that there is already a plan in Southampton to extend the area of compulsory pilotage. A right of appeal must be written into the Bill in a way that will at least satisfy shipowners.
  The debate has been of high standard because all hon. Members know their constituencies and their problems. I do not like self-employed men being made employees. It goes against my instinct and my Conservative personality. Nevertheless, if it is the only way, because circumstances are such that we must take a turning in the road—or in the waterways or the Solent—we must make a first-class job of it. Some of the points raised in the debate will have to be considered in great detail in Committee.
  10.47 pm
  Mr. David Crouch: I echo the words of my hon. Friend the Member for Southampton, Test (Mr. Hill) on the quality of contributions in the debate. I was immensely impressed by the speeches of my hon. Friend the Member for Crosby (Mr. Thornton) and of the hon. Member for Wigan (Mr. Stott), who spoke from real knowledge of the sea. My hon. Friend the Member for Falmouth and Camborne (Mr. Mudd) spoke movingly from his knowledge and about his father's experience as a pilot. The debate has been helped by the contributions of hon. Members speaking from personal experience and from the knowledge that they have gained from pilots and others in the shipping and ports industry.
  The small city of Canterbury is responsible for an even smaller place—Whitstable harbour. A number of pilots who operate from the Folkestone base live in my constituency. Over the years they have come to see me about the problems caused by the change in the use of pilots and in the areas of compulsory pilotage. This matter has been on the boil for quite a few years.
  The phrase "taking on the pilot" is a great phrase in our language. It means many things, but it comes from what we are talking about in this debate. The phrase "dropping the pilot" is equally historic and is reminiscent of so much. I should hate to think that the Bill may be more about dropping the pilot than taking on the pilot. We still need to take on the pilot. I am not against the granting of exemption certificates when a master knows the water as well as a pilot knows it. The competent harbour authority must ensure that there is no reduction in safety as a result of the granting of such certificates, and it is equally important that changes to compulsory pilot areas do not affect safety.
  Near my constituency is a stretch of water known as the London estuary, which runs into the Channel and the North sea. It is one of the busiest waterways round our coasts and the ships using it carry hazardous cargoes to chemical installations, oil refineries on the Thames, and so on.
  The proposals on compulsory pilotage limits have prompted pilots to write to me and to come to see me about their anxieties. No longer are they saying only, "Please don't change anything just because there are more of us than are needed with the decline in the amount of shipping." I have been impressed by their arguments on safety and pilotage limits in the London estuary area, which is the only area about which I am competent to
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  speak. The waters in that area are hazardous, and the Bill seems to place them outside the limits for compulsory pilotage. That is the only aspect that gives me pause. My right hon. and learned Friend the Member for Dover and Deal (Mr. Rees) mentioned the ominous words "The Goodwins", and it seems strange that hazardous areas should be outside the compulsory pilotage limits.
  The Trinity buoy area is particularly hazardous. The London district pilots have sent us a document describing the waters in that area. They say that it is
  "an area of notorious instability, subject to sand waves. It is the entry point for all deep laden tankers, LASH ships and container ships into the port of London and the Medway. If these ships are to make the passage on one tide, then they must pass over this area at low water. This means that an underkeel clearance of 1·2 metres is the minimum tolerance, and even this is not always available."
  It is particularly hazardous to have ships judging the depth of water, with little more than a metre's clearance, when they may be carrying dangerous loads into the port of London.
  Clause 1 enables the Secretary of State to permit a competent harbour authority to change compulsory pilotage limits in the interests of efficiency and safety. He may make an order and Parliament must give its approval. That is a heavy-handed method. Surely it would be safer to do it the other way round. The London district pilots say that the arrangement should be reversed in the interests of safe navigation so that the present pilotage limits, which cover dangerous waters, remain unless the Secretary of State makes an order to the contrary. That seems a safer approach. Pilots are saying to me not "Safeguard our jobs", but "Safeguard our shipping". It is in the interests of safety that I speak briefly tonight.
  When the Select Committee on Transport examined the specific problem of the London estuary in its Fifth Report in Session 1984–85, it saw the dangers, and made a clear recommendation that the existing pilotage limits in the London area should be maintained. The Select Committee stated:
  "We therefore recommend that initially harbour authorities should take over responsibility for pilotage districts as they presently exist".
  That seems to me a clear and strong recommendation to Parliament.
  I feel that the Bill may leave maritime safety to chance in the London estuary unless we examine the matter again, and I hope that we can do so in Committee. I think that it would be wrong to allow the Bill to go through as it stands.
  10.55 pm
  Mr. Michael Brown: My hon. Friend the Member for Boothferry (Sir P. Bryan) drew our attention to the problems in the Humber. I represent the pilots operating on the Humber who live in my constituency, and I am proud to declare an interest: I am a vice-president of the Trent pilots association, an office that I am proud to hold and that has brought me into contact with pilots on the Trent, the Humber and the Ouse over a number of years.
  Like my hon. Friend the Member for Boothferry, I have had the opportunity—thanks to the advice and guidance of pilots who are my constituents — of spending a full day on the Humber, going from the pilots' headquarters at Spurn out into the estuary, where I saw

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  the shipping position for myself. It is like Piccadilly circus there. I have never seen so many of the world's most enormous ships as were converging on that estuary.
  The point has been made in this debate that perhaps we should be careful about the extent to which we allow exemptions. I agree with my hon. Friend the Member for Canterbury (Mr. Crouch), who rightly drew attention to the question of safety. That, of course, must be paramount in our consideration of the Bill. Although he did not deal with the problem, my hon. Friend the Minister will recall the crashing of the tanker into Immingham docks, which produced chaos and underlined the need for the best-qualified pilots to guide ships in that most dangerous estuary on the Humber.
  I have nothing but the highest regard for the job that the pilots do. To underline the point made by my hon. Friend the Member for Canterbury, I think that I should draw the attention of the House to a comment made by Mr. Michael Barratt, a constituent of mine who has kept me suitably advised over the past two or three years with a large amount of correspondence. If I were to read out the letters that I have here, I should detain the House for at least the next hour. However, I can probably summarise Mr. Barratt's excellent observations in rather less than half an hour, or even quarter of an hour. He makes one point that underlines what my hon. Friend the Member for Canterbury said: that masters, although they may be qualified to bring in a ship and may have the same skills as pilots, do not want that responsibility thrust upon them.
  Mr. Moate: What?
  Mr. Brown: My hon. Friend questions that statement, Mr. Barratt says that, having discussed this matter with masters on the estuary, he knows they are worried that they may have certain responsibilities thrust on them.
  Mr. Moate: I simply questioned my hon. Friend's generalisation. I think that he will find that there are many circumstances in which masters have resented not being able to take in vessels when they have had the necessary qualifications.
  Mr. Brown: I shall quote from Mr. Barratt's letter of last year which formed part of his response to the Green Paper. He wrote:
  "Although the shipowner pays the pilot's fee, it is the ship master who engages the pilot. A great many masters hope that all pilotage will be compulsory and that there will be no choice but to take a pilot."
  That comment underlines the fact that masters value the important contribution that pilots make. The pilot is the person who understands the ebbs and flows of the complicated tides on the Humber, for example. No matter how well qualified the master is, he sails in all sorts of seas and to many ports throughout the world. The ships that go up the Humber come from far away. Masters simply do not have the same opportunity as pilots to learn the movements of sand banks, which occur almost daily in the Humber.
  Pilots should operate in the Humber, the Trent and the Ouse. I am supported in that assertion by Associated British Ports. There is some potential for hostility between pilots and ABP, which is the competent harbour authority for the Humber. I have had discussions with Sir Keith Stuart, the chairman of ABP, and I am glad to say that he recognises the problems of the area that I represent. In the briefing that ABP has sent, it says that there are special
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  considerations that apply in the Humber and that it has told the pilots that, in certain conditions, it is prepared to continue with a form of self-employment if that is their wish. ABP would control pilotage policy, notably policy on compulsory pilotage, pilotage certificates and charges for customers. That is only right and proper as it has to operate in a commercial environment. I am also glad that ABP recognises the need for pilots on the Humber, the lower Humber, the Ouse and the Trent. I hope that that demonstrates the strength of the submissions made by the pilots.
  I support the view expressed by my hon. Friend the Member for Crosby (Mr. Thornton). It is right to put on record what he has done on behalf of pilots in the United Kingdom to ensure that the Bill is at least in a better form than we first expected. I regret that we could not make this overdue reform except by legislation. There are other ways, but that is water under the bridge.
  I hope that my hon. Friend the Minister will say whether the Bill's Committee stage is to be taken on the Floor of the House or upstairs. Those of us who have long taken an interest in this subject would like to know whether we shall have an opportunity to table probing amendments and to have detailed consideration of the Bill upstairs or whether we shall have to make our case to all hon. Members. Thanks to the intervention and leadership of my hon. Friend the Member for Crosby, some of the matters that have caused concern have been resolved, but there are others that we shall want to press hard in Committee.
  I am very glad that my hon. Friend the Under-Secretary of State for Transport was able to announce that in Committee he will be tabling an amendment to the Bill regarding self-employment. It is a little odd that this Government, who believe so strongly in self-employment and the right to be self-employed, should be interfering with that right. I am glad to have A BP's assurance with regard to self-employment status in the H umber, the Ouse, and the Trent. It is a little strange that the Government should have adopted this attitude, but they have made up their mind, after much consultation.
  We shall want to return to certain matters in Committee. I regret that it was necessary to introduce the Bill, but I shall not seek to divide the House.
  11.5 pm
  Mr. Stott: By leave of the House, may I say that we have had a very interesting and well informed debate on this important subject. My only regret is that it is taking place on the day of my wedding anniversary, but no doubt that is the price one pays for fame. On the evidence of this evening's debate, I feel sure that we shall fashion a better Bill in Committee.
  11.6 pm
  Mr. Michael Spicer: With the leave of the House, I apologise on behalf of the Government to the hon. Member for Wigan (Mr. Stott) for the fact that yet again we have chosen to interfere with his marital arrangements. I recollect that two years ago to the day he was married. We were then considering the Transport Bill. On that occasion we were able to crack a bottle of champagne in his absence, but on this occasion we just wish him well.
  As the hon. Gentleman said. this has been a substantial and extremely well informed debate. It is not surprising that it should have been so well informed when one

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  remembers that hon. Members on both sides of the House, representing the interests of a maritime nation, have taken part in it. There is general consensus about the need for the Bill, sad though, as some hon. Members have argued, that is. A good deal of advice on matters of detail has been offered to the Government. My hon. Friend the Member for Faversham (Mr. Moate) said that in some ways it has been more like a Committee stage debate, but it has been a good test for a junior Minister and I hope that I have lived up to it.
  I do not intend to weary the House with too much detail. I shall go through the points that have been raised as quickly and as concisely as possible. During my opening speech my right hon. and learned Friend the Member for Dover (Mr. Rees) referred to the English inshore traffic zone. I had hoped to refer to that point in the context of pilotage areas and I gave him a wrong answer. I should have said that the English inshore traffic zone has nothing to do with the Bill; it is part of the traffic separation scheme in the straits of Dover. I shall write to my right hon. and learned Friend about his views, even though they are not relevant to the Bill.
  The hon. Member for Greenock and Port Glasgow (Dr. Godman) referred both in an intervention and during his speech to the explanatory memorandum. It refers correctly to the approving or licensing of pilot boats in clause 6. The authority will approve the pilot boats it operates itself if it is satisfied that they are suitable. The authority will grant the licence if they are operated by an agent on the harbour authority's behalf.
  I thank the hon. Member for Wigan for his general support for the Bill. He mentioned some important issues. He asked who was sovereign on a vessel. The relationship between the master and the pilot is clearly established in law. The master has the ultimate responsibility when the pilot has charge of the vessel. That is unaltered by the Bill.
  The hon. Member and others, including my hon. Friend the Member for Falmouth and Camborne (Mr. Mudd), and the hon. Member for Liverpool, West Derby (Mr. Wareing), concentrated on safety, particularly in relation to the manning of pilot boats. Under the Bill a competent harbour authority is required to approve and license pilot boats after satisfying itself about their suitability for use for that purpose. The Bill does not, however, rule out specific regulations and guidance from the Department of Transport under the existing provisions of merchant shipping legislation. We have recently consulted interested parties about a draft merchant shipping notice on manning levels for pilot boats. We intend to introduce proposals for the regular survey of pilot boats before the Bill is implemented.
  Several hon. Members mentioned the important question of pilotage exemption certificates. The Bill states that the authority must satisfy itself. It is open to it to impose a written or oral examination, or any other procedure which it believes to be appropriate, because it must establish that it is satisfied that it grants the exemption certificate only to those who have
  "skill, experience and local knowledge."
  Specific questions have been asked about conditions in harbours which hon. Members obviously know intimately. The Bill insists upon the criteria of "local knowledge" and an adequate "knowledge of English".
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  We accept that the pilot's exemption certificate is not a means by which we can adopt a protectionist attitude to coastal shipping. However, we think that the criteria, particularly that of local knowledge, must satisfy the anxieties. It is clear that one must satisfy the port authority that one knows a harbour in detail before one can obtain an exemption certificate.
  The hon. Member for Wigan and others, including my hon. Friend the Member for Southampton, Test (Mr. Hill), asked about future training. It is an important matter, but I cannot tell the House that there will be some general national body for training pilots. There is no such body at present. It will be the statutory responsibility of the port authorities to provide the number of pilots for safety purposes. I stress that the Bill is clear about the importance of safety and I shall return to that later. Given the statutory authority of the port authorities to provide adequate pilots to satisfy safety considerations, it will be their responsibility, if there is a shortage, to ensure that the necessary pilots are adequately trained to satisfy the authorities' safety requirements. I believe that it is reasonable to suppose that the training of pilots should be undertaken on a local basis because, as has been mentioned by many hon. Members, once one has got one's masters certificate the job is largely about local conditions, and one's knowledge of those conditions. Therefore, the training of pilots should be focused on whether a pilot can satisfy the need for local knowledge.
  My hon. Friend the Member for Boothferry (Sir P. Bryan) encouragingly reported that the Associated British Ports authority and the pilots in Humberside were engaged in constructive discussions about the Humber. There have been anxieties in the past, and I believe that if the two parties can establish confidence in each other on this matter it will benefit Humberside.
  My hon. Friend the Member for Boothferry also asked about private wharf owners. It is a basic principle of the Bill that the responsibility for decisions cocerning local pilotage needs should rest with the harbour authorities. However, we have gone a long way towards meeting the interests of wharf owners. Under the Bill harbour authorities will be required to consult private wharf owners before introducing any compulsory pilotage. Wharf owners may also appeal to the Secretary of State against pilotage charges. We have also included a provision whereby, if private operators work within a harbour authority's area, the Secretary of State may call for information about pilotage arrangements. He may order amendments if the arrangements are judged to be unsatisfactory.
  The hon. Member for Orkney and Shetland (Mr. Wallace) supported the basic intention of the Bill. I express the Government's gratitude for that. However, in the process of giving his support, the hon. Gentleman asked some searching questions. He asked what steps there are to facilitate the transfer of surplus pilots in one area to other areas where there may be a demand for pilots. The Bill includes a provision to help surplus pilots to transfer to another port where there are vacancies. If there are vacancies for pilots, in the first four years a harbour authority must give priority to existing pilots in that area. Representatives of the ports and pilots have been discussing transfer arrangements so that surplus pilots will be able by agreement to transfer to other ports where there is a need for more pilots. It is a principle of the Bill that no taxpayers' money will be involved, and that is why it

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  is important that the ports, which will have to shoulder the burden of any transfer arrangements that are made, come to an agreement. It seems that the discussions between the ports and pilots are going well.
  The hon. Member for Orkney and Shetland and others referred to costs, including my hon. Friend the Member for Falmouth and Camborne. There will be initial start-up costs in implementing the terms of the Bill, including the redundancy arrangements. I confirm that we shall proceed with a three-year period, which is longer than the ports hoped for originally and, I think, a reasonable compromise.
  Total savings are central to the Bill because without them the Bill would lose part of its objective. The cost of pilotage in 1985 was about £48 million. As the right hon. Member for Western Isles (Mr. Stewart) said, that is not an astronomical sum when it is set against the other costs that shipping incurred, but it is one of the costs that shipping pays to come to our ports. It will be for the ports to determine the exact level of pilotage that they require, but the signs are that there should be a saving of about 15 per cent. My mathematics are not good at this time of night, but other Members will be able to calculate that savings of several millions of pounds will be achieved.
  The hon. Member for Orkney and Shetland and others are worried about a possible watering down of the Bill as a result of the amendment that will be introduced directed to the level of employment within the agencies. We shall be able to discuss this issue at greater length in Committee, but I merely reiterate that control will not leave the ports, which will set the charges and the budgets. At the end of the day they will have leverage to apply because their representatives will be able to say to those who wish to set themselves up as self-employed pilots that they will employ them directly on terms that will be subject to arbitration, but terms that they consider to be efficient, if they consider the pilots' terms to be unreasonable.
  My hon. Friend the Member for Brigg and Cleethorpes (Mr. Brown) talked about the Government taking away the self-employed status of pilots and putting pressure on them to become employed. One would have to make fairly generous assumptions about the nature of the present status of the self-employment of pilots in order to be able to justify a strong attack on those grounds. Where pilots have their charges set for them, where manning levels are determined and where there is almost no possibility of private initiative gaining more earnings or creating any sort of productivity, that is an unusual—I shall say no more than that — form of self-employment. That is recognised in the terms of redundancy because that unusual status of self-employment will be taken into consideration when considering the period of employment which is what it will effectively be in terms of redundancy.
  Therefore, I suggest that it is difficult to mount a strong argument on the basis that we are throwing over the concept of self-employment and imposing some new form of direct employment. Indeed, we are giving an element of flexibility to the system because there will be the capability, if both sides agree, for self-employment.
  The hon. Member for Orkney and Shetland raised some specific points about which my noble Friend the Minister responsible for shipping will write to him.
  My hon. Friend the Member for Falmouth and Camborne said, "We keep on hearing of places where pilots are being heavily used, but the Government will not come clean on places where there is a low usage of pilots."
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  He may be surprised to hear that I want to give him a specific answer on that. Perhaps he will look at Hansard tomorrow and see that the pilots in Bristol, Liverpool and Manchester each handled, on average, about 1.3 ships per week in 1985.
  The hon. Member for Stockton, South (Mr. Wrigglesworth) mentioned the Tees, saying that he was worried that the Tees might surfer from a lack of pilotage. There is no compulsory pilotage on the Tees at the moment. The Bill makes it possible for Tees and Hartlepool's port authority to make pilotage compulsory if it thinks that it will improve safety. The Bill does nothing more than give it the right to do that if it thinks that it would be a good idea.
  The hon. Member for West Derby was concerned, as were many others, about safety matters and the winding up of the Pilotage Commission. The commission will continue to exist during the transfer period and will have a statutory responsibility to advise and suggest schemes to the Secretary of State on transfer matters. It will define what assets have a direct relationship to pilotage and ensure that schemes are suggested to the Secretary of State for the transfer. Once the transfers have been effected it will cease to exist. However, it will have that important function during the transfer period.
  My hon. Friend the Member for Crosby (Mr. Thornton) has been mentioned many times during the debate for the eloquence of his speech and the measured terms in which it was made and—I was glad that this came out in the debate — the tremendous amount of work that he has done to produce what we think is a Bill that is balanced between the interests of the ports and the interests of the pilots. He was particularly concerned to retain the pre-eminence of safety. I assure him that the Government's intention is absolute on that. Indeed, the Bill is clear as to the duties and responsibilities of the port authorities on the question of safety. Should any hon. Member feel in Committee that there is any aspect of the responsibilities about safety that are not sufficiently clear, we can consider what is said. If lion. Members believe that there are problems, they should write to me well in advance of the Committee stage so that we can consider their views.
  I can tell my hon. Friend the Member for Brigg and Cleethorpes that the Committee stage will be taken on the Floor of the House. That will allow my hon. Friend's punchy remarks to receive even greater publicity than they might have received upstairs. That may be some consolation to my hon. Friend.
  I want to consider remarks made in three other speeches, which were important. They were made by my hon. Friends the Members for Canterbury (Mr. Crouch), for Faversham (Mr. Moate) and for Southampton, Test in whose constituencies there are no more important ports.
  My hon. Friend the Member for Faversham raised the question of compulsory pilotage for which he wants an appeal procedure. My hon. Friend the Member for Southampton, Test wanted such a procedure, but for opposite reasons. Clause 7 makes it clear that any extension will be subject to extensive consultation with all the affected parties.
  Mr. Hill: That is not the point.
  Mr. Spicer: I know that that is not quite the point. The point is that central to the Bill is the decision that we must

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  try to get the buck to stop somewhere. We want one body to be responsible, and that should be a local body—a port. We have given the powers to the ports within the harbour limits so that they can determine on the basis of their local knowledge and great experience what should be the proper area for compulsory pilotage. That is called "de-centralisation" and involves having a clear structure of management and decision making on those matters subject to the consultation that is central to the Bill.
  I have mentioned the question of examinations, and my hon. Friend the Member for Southampton, Test raised points about self-employment. I believe that I have answered those points. He referred to the moneys funded by the pilots' pension fund. Any worries about that may not be as great as he fears. During the early retirement period £15 million has been put aside from the reserves to cover that. I can confirm that the three-year period is now settled for transfer.
  My hon. Friend the Member for Canterbury, in a passionate speech, returned to the definition of the harbour limits and the need in his view to do the reverse of what is proposed in the Bill. Of course the harbour limits now define pilotage areas. In turn, they are defined by statutory instruments and Acts of Parliament. I concede entirely that that is a matter for debate. However, the Government's argument is that the original pilotage areas were defined as early as the turn of the century. We belive that there is a case for looking at those areas with some objectivity in view of the new arrangements for navigation. No doubt we can debate that point again, although perhaps not at this hour, in Committee. Under the Bill the harbour limits define the extent of the pilotage areas, although of course it is open to the harbour to suggest to Parliament, through special procedures, an extension of the area.
  I have gone into greater detail than some hon. Members might have wished, but I felt that I had to answer the detailed points that were made. No doubt we shall discuss some of these matters again in Committee. Understandably, the main anxiety has been to ensure that the Bill does not harm the safety of shipping approaching our shores, and it does not. Every Member has accepted that because of changes in shipping patterns there are, sadly, too many pilots in some parts of the country. The Bill will address that problem in as sensitive a way as we have found possible, and I commend it to the House.
  Question put and agreed to.
  Bill accordingly read a Second time.
  Bill committed to a Committee of the whole House. —[Mr. Maude.]
  Committee tomorrow.

  Pilotage Bill [Lords]

    BUSINESS OF THE HOUSE
    Ordered,
    That, on consideration of the Criminal Justice Bill—
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    (1) subject to the provisions of the following paragraph, any new Clauses relating to capital punishment which may be selected by Mr. Speaker shall be considered last;

    (2) if the consideration of the Bill is not completed at one sitting, such Clauses shall have precedence when the House next considers the Bill;

    (3) if proceedings on such Clauses have not been concluded by Ten o'clock on that day, Mr. Speaker shall at that hour put the Question already proposed from the Chair, and shall then put forthwith any further Questions necessary to dispose of the Clause then under consideration and any selected Amendments thereto, and any Questions necessary to dispose of any other such Clauses, and selected Amendments thereto, which may then be brought up; and

    (4) proceedings in pursuance of the previous paragraph, though opposed, may be decided after the expiration of the time for opposed business.—[Mr. Maude.]

    EUROPEAN COMMUNITY DOCUMENT
    Motion made, and Question put forthwith pursuant to Standing Order No. 102(5) (Standing Committees on European Community Documents).
    EUROPEAN COMMUNITY DOCUMENT

      CONTROL OF EMISSIONS FROM DIESEL ENGINES
      That this House takes note of European Community Document No. 7969/86 on the control of emissions from certain categories of diesel-engined road vehicles; and supports the Government in its efforts to secure environmental benefits with technically and economically realistic limits.—[Mr. Maude.]
      Question agreed to.

    Statutory Instruments, &c.
    Mr. Deputy Speaker (Mr. Ernest Armstrong): I propose that we take items Nos. 7 to 12 together.
    Motion made, and Question put forthwith pursuant to Standing Order No. 101(5) (Standing Committees on Statutory Instruments, &c.)

    Statutory Instruments, &c.

      AGRICULTURE
      That the draft Revised Code of Recommendations for the welfare of domestic fowls, which was laid before this House on 9th March, be approved.
      That the draft Code of Recommendations for the welfare of ducks, which was laid before this House on 9th March, be approved.
      That the draft Code of Recommendations for the welfare of rabbits, which was laid before this House on 9th March, be approved.
      That the draft Revised Code of Recommendations for the welfare of turkeys, which was laid before this House on 9th March, be approved.

      MERCHANT SHIPPING
      That the draft Carriage of Passengers and their Luggage by Sea (Domestic Carriage) Order 1987, which was laid before this House on 4th March, be approved.
      That the draft Merchant Shipping Act 1979 (Commencement No. 11 ) Order 1987, which was laid before this House on 4th March, be approved.—[Mr. Maude.]
      Question agreed to.

  Tameside Urban Aid
  Motion made and Question proposed, That this House do now adjourn.—[Mr. Maude.]
  11.36 pm
  Mr. Tom Pendry: On 4 March, following a most disappointing reply from the Minister for Housing, Urban Affairs and Construction, when I asked whether his right hon. Friend the Secretary of State would meet a deputation from Tameside council to discuss the authority's claim for inclusion in the urban programme, I stated on a point of order that I intended to raise the matter on the Adjournment at the earliest opportunity. That I now do. I am pleased to have been lucky in Mr. Speaker's ballot as, with the assistance of my right hon. Friend the Member for Ashton-under-Lyne (Mr. Sheldon) and my hon. Friend the Member for Denton and Reddish (Mr. Bennett), I intend to spell out the reasons why the Government should think again about giving urban aid to Tameside.
  I note that the Minister who is to reply was an old sparring partner of mine when he was Minister with responsibility for Sport. I hope that he will give Tameside a sporting chance of inclusion in the urban programme and will not close his mind to the arguments. I suggest that he begins by scrapping his ministerial brief as it will almost certainly he irrelevant. The first thing to determine is whether the Department and its Ministers know where Tameside is. On 4 March the Minister for Housing, Urban Affairs and Construction told my hon. Friend the Member for Denton and Reddish that he knew exactly where it was, but he must have been mistaken as just 16 days later his Department sent the official notice about rate capping to—wait for it—Thamesdown district council.
  I wish to address the problems of Tameside in greater Manchester and I hope that the Minister—perhaps not today, as the brief before him doubtless relates to a different authority—will also address himself to the real problems of the area that I and my right hon. Friend the Member for Ashton-under-Lyne represent. It is no leafy glen south of the Thames. The most recent analysis by the Department of the Environment of social stress in local authority areas highlighted three basic facts. First, Tameside has the highest deprivation score of all the metropolitan districts outside London which do not have inner city status. Secondly, I do not wish to underestimate the legitimate claims of other areas, but within the northwest the deprivation in Tameside is greater than in Oldham, Bolton, St. Helens, Wirral, Sefton, Wigan and Trafford, all of which have been included in the urban programme, Thirdly, of the authorities promoted to urban programme status only Preston outside the capital has a higher deprivation score than Tameside. Those are the Department's figures, yet it excludes Tameside from the programme. One must ask why.
  In addition to social stress, the unemployment figures for Tameside surely qualify it for inclusion in the urban programme. Since 1979 unemployment in the north-west has increased by 210·1 per cent. whereas in Tameside it has increased by 310·1 per cent.—almost 50 per cent. higher than the regional average. The unemployment level is higher than neighbouring Oldham which benefits from inner-area status.
  Even within Tameside, where problems exist across the whole borough, there is a well-defined area which shows
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  clearly all the symptoms of inner city stress and economic and environmental decay. Within that 20 per cent. of the borough lies almost 50 per cent. of the employment arid it has suffered disproportionately from job losses. Half of the industrial floor space dates from before the first world war. Fifteen per cent. of the land is underused, abandoned or derelict. Almost one in four people are out of work and in some parts almost 40 per cent. of those under 19 are unemployed. Those unfortunate unemployment statistics make the case for Tameside strong.
  The basis for the 1986 urban programme review was unemployment. To qualify, authorities had to have at least 10,000 unemployed and an overall percentage rate of over 12 per cent. Tameside has 13,500 unemployed and a rate of over 13 per cent. Clearly, it qualifies on both sets of criteria. The Government have made it known that other factors were also taken into account. What were they? Both Preston and Kensington and Chelsea were included with unemployment levels below 10,000.
  Unemployment will get worse with the recent announcement of 400 redundancies at the Weston-Hyde factory, further redundancies at Walls meat factory and others in and around my constituency. The figures I gave show that Tameside borough suffers above the bald unemployment figures. Eight other boroughs in the northwest, excluding Merseyside, have qualified for allocations ranging from £23·8 million to £1·5 million and averaging £5·4 million, yet Tameside has received nothing. I hope that the House realises that something has gone badly wrong.
  The achievement of programme area status would have given a much-needed boost to Tameside's efforts to tackle the social, economic and environmental problems of the area, yet the Government have consistently refused to recognise its claims. I hope I have demonstrated that those claims are stronger than those of many other boroughs already benefiting from the status.
  I remind the Minister that we are talking, not about a mindless council but one which is respected across the community. The recent rate demand demonstrated that point; it was an increase of 2·3 per cent. on the rate. That is below the rate of inflation and helps industry and householders. The authority prides itself on good financial management, careful spending and savings.
  The case before the Minister is formidable. It is backed wholeheartedly by the Tories on the council and their leader, Councillor Bell, has written to the Secretary of State urging him to reconsider this question. The Minister has kindly agreed that my hon. Friends may share this debate. I know that they will reinforce my points. I hope that the Minister will reply point by point to the issues raised and that he will recognise that the Government were mistaken to take this action against the authority we represent.
  11.44 pm
  Mr. Robert Sheldon (Ashton-under-Lyne): I am grateful to my hon. Friend the Member for Stalybridge and Hyde (Mr. Pendry) for allowing the opportunity of showing how strongly all three hon. Members with constituencies in the Tameside area feel about the matter. Paragraph 10 of the recommendations of the Tenth Report of the Public Accounts Committee, Session 1985–86, states:

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  "It is clearly right, particularly as judgments are involved in the process, that the classifications of local authorities, and thus their shares of UP funds, should not become permanent."
  It was with that statement in mind that I sought to raise the matter afresh, once the initial decision had been made. On 25 November 1985, I was fortified by a reply from the permanent secretary to the Department of the Environment, Mr. Heiser, to me as Chairman of the Public Accounts Committee. Speaking about the urban programme, he said that the statistical analysis provides
  "a background, a qualitative judgment on other factors which Ministers think relevant."
  There was a qualitative judgment. I sought to influence that qualitative judgment when I took the matter up, first, with the Secretary of State for the Environment in the discussion that I had with him, secondly, with the Minister of State in a brief discussion, and, thirdly, with the Under-Secretary of State for the Environment, to whom I mentioned it briefly. I expected that we would have had the opportunity to make further representations in the light of the so-called qualitative judgment, which I felt had not been fully discussed with hon. Members concerned with the borough of Tameside.
  As my hon. Friend rightly said, Tameside is an excellent council. It is responsible. It has good officers and advisers with a high level of ability. We have a strong case. So far, we have not been able to put it properly to the Minister, so we shall seek to do so in the Adjournment debate. As my hon. Friend pointed out, Tameside has a rate of increase in unemployment that is much greater than in almost any other area. Ten years ago, it was a prosperous area. It has declined savagely. Manufacturing industry has deteriorated alarmingly. In my constituency, more than one third of firms have closed their doors, and more than one third of manufacturing jobs have gone. We have a decaying infrastructure.
  Only last weekend, with a representative from the Manchester Evening News, I want to Mossley, Droylsden and Ashton-under-Lyne to point out the kind of dereliction that we have. There has been an increase not only in unemployment but in social stress. The Department of the Environment figures show that there is a higher deprivation score in Tameside than in many other local authority areas. I pointed out to the journalist who accompanied me that this followed a request that I made to the Chancellor of the Exchequer to visit the area and see for himself the difference between the north and the south. I showed the Portland basin, where the Government are spending far less than they are spending in London on St. Catherine's dock. We are achieving great success in improving the area. We need a recognition and understanding of what we are doing in the area and of what our problems are.
  Nearly £76 million is being spent in the north-west under the urban programme. Tameside is getting zero. We maintain that the case for Tameside is overwhelming. I ask the Minister to see the area for himself. If a qualitative judgment is to be made, it can only be made on the basis of personal observation. I look for an assurance that the Minister is now beginning to understand the real problems facing Tameside.
  11.48 pm
  Mr. Andrew F. Bennett: I am delighted that my hon. Friend for Stalybridge and Hyde (Mr. Pendry) was successful in securing this debate, but I am bitter that it is necessary for us to press this matter in the House. Neither the Minister nor his civil servants know or care where Tameside is. If they had looked at Tameside and seen its problems, I am certain that they would have included it in the list for urban aid.
  I challenge the Minister to name the nine districts that make up Tameside and to tell us of any one of those districts that in his view does not have a case for urban aid. Of the local authorities that have qualified for urban aid many are a mixture of affluent areas and extremely depressed areas. All nine districts in Tameside have an urgent need for urban aid.
  In the Denton part of my constituency and in other constituencies one can see one closed factory after another. Yesterday I had another phone call telling me that Lancaster Carpets is about to close and that 140 jobs are to go. The very heart of our constituencies their industrial bases, are being torn out and are disappearing week after week.
  In the short time that is available to me I want to concentrate on one appalling figure because it is the one thing that ought to change the Minister's mind. In Tameside, sadly, there has been a failure to attract youngsters to stay in education. The number staying on after the age of 16 is about 37 per cent. It is about the eleventh worst stopping-on rate in the whole of England. If we look at the stopping-on rate of those who get good GCE results, five or more O-levels, we see that 25 per cent. of such youngsters do not remain in education in Tameside. That is the worst figure in the whole of England.
  That is not a reflection on the quality of schools and colleges in Tameside, nor is it a criticism of Tameside's young people or their families; it is a mark of the social deprivation in Tameside—the fact that so many families feel that they cannot afford to let their youngsters, able youngsters, the ones who succeeded at school, benefit from further education in the area. Ten years' ago it might not have mattered too much because many of those youngsters would have left and got first-class apprenticeships and, through that, high-quality education. However, the factories have gone and the apprenticeships are not available, and those youngsters who do not stay at school are a great waste of resources. That figure, 25 per cent. of the most able youngsters in Tameside leaving school because of family poverty and problems within the area, is a telling one.
  The Government are denying my constituents jobs. They are denying our young people the chance to stay on at school, and they are denying us urban aid and even hope. My constituents want to hear the Minister say that he will rescind this decision and restore urban aid to Tameside, but in their hearts they want this Government out, and out quickly.
  11.53 pm
  The Parliamentary Under-Secretary of State for the Environment (Mr. Richard Tracey): I congratulate the hon. Member for Stalybridge and Hyde (Mr. Pendry) on drawing this Adjournment debate and on bringing to the Floor of the House this important matter for him and for his constituents.

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  The debate provided an excellent opportunity for the right hon. Member for Ashton-under-Lyne (Mr. Sheldon) and the hon. Member for Denton and Reddish (Mr. Bennett) to express their views. I was pleased to give them some of the time that I might otherwise have used, because it enabled them to put their case. I can assure them that I certainly listened to their case and that the Government constantly listen to the cases put by many of the local authorities that were previously in receipt of urban programme grant before the beginning of this year.
  It may help the House if I outline the background to the proposals that we first announced last August in the process of restructuring the urban programme. We certainly received well over 100—if I remember rightly we received almost 200 — representations from local authorities. The hon. Gentleman will know that we have had a good opportunity to study the proposals that were put to us. They will also know that on 9 December we had a constructive meeting with a delegation representing several of the local authorities. It was attended by the leader of Tameside, Councillor Oldham, and the leader of the Conservative group, Councillor Bell. It was a useful and congenial meeting. My right hon. Friend the Secretary of State my hon. Friend the Minister for Housing, Urban Affairs and Construction and I have seen the submission from the chief executive of Tameside which was sent by the right hon. Member for Aston-under-Lyne on 28 January. It contains a useful summary of Tameside's position in terms of social and economic needs. I recognise the points made on the submission tonight. It may help the House if I state our views on the arguments in the submission.
  The submission makes use of an economic Z score—a composite index of deprivation with added weighting for unemployment, derived from the 1981 census. It uses this to show that Tameside is worse off than a number of authorities invited to submit inner area programmes. I do not dispute that the borough has used this score in what seems to be a very valid way. But the economic Z score is made up of four parts unemployment to one part representing all other, largely social, indicators. As the House knows, there have been significant changes in the pattern of unemployment since 1981. Unemployment is one of the key indicators on which we have the benefit of up-to-date information. We would not, therefore, consider the economic Z score to be the only totally useful indicator.
  In reaching our assessment of needs, we took into account the latest available information about unemployment rates and numbers both at district level and within districts. We did not use the travel-to-work area rates because they are not directly relevant to a fine-grained programme such as the urban programme. London, for example, is divided into just two travel-to-work areas. But they are obviously more relevant for regionally based programmes such as those operated by the Department of Trade and Industry and the Manpower Services Commission.
  We took into account the latest unemployment data, not simply those for October 1985, as the submission appears to show. We looked at changes in unemployment between first announcing our proposals for restructuring the urban programme last August and confirming them at the end of January. That was a factor in the addition of three authorities—Plymouth, Kirklees and The Wrekin—to the list of the 54 originally proposed at the end of
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  1986. We paid particular attention to the numbers of unemployed in areas within districts with high overall rates.
  The submission records the point made by the delegation I met on 9 December that social and economic deprivation does not end at local authority boundaries. I accept this: life is not that simple. For that reason, in assessing deprivation we take individual enumeration districts, which cover about 150 households, to build up a picture of needs within districts and to identify deprivation black spots.
  Our proposals, which were confirmed at the end of January by my hon. Friend the Minister for Housing, Urban Affairs and Construction, when he announced an overall increase in urban programme resources for 1987–88, do away with the cumbersome and confusing four-tier structure of partnerships, programme authorities, other designated districts and the traditional urban programme. Under the new arrangements, all urban programme authorities will draw up strategic inner area programmes containing a package of initiatives intended to meet clearly defined aims and objectives.
  That restructuring of the urban programme will consolidate its success and sharpen its impact. It marks a move away from the "confetti" approach to the distribution of resources in favour of one that is tightly targeted on specific areas of need. That is the theme running through all our urban initiatives, including the urban development grant and the new urban regeneration grant, details of which will be announced shortly. Our aim is to ensure that all the various grant regimes are pulled together to form part of area-based strategies.
  The Government's task is to create the right conditions for growth by tackling dereliction and preparing sites for development, encouraging private investment, reducing controls and improving housing choice. That is the only effective means of keeping and attracting business and residents in urban areas. That approach is reflected in the range of urban initiatives, riot just in the spectacular examples such as London clocklands. In hundreds of urban programme and urban development grant projects in our major cities, substantial private investment is generated. Since 1979 we have allocated over £3,500 million to the urban programme, urban development grant, urban development corporations and derelict land grant. This £3,500 million should lever in over £2,000 million in investment by industry and commerce which translates directly into jobs.
  Mr. Robert Sheldon: Will the Minister deal just with the problems of Tameside? I understand what he is doing in a general way, but the problems of Tameside concern us. We have made our case and we should like to hear what he thinks about it. We hope that he will support it in the coming year.
  Mr. Tracey: I explained to the right hon. Gentleman and the House how we had assessed, in particular, the points made in the submission and Tameside's case compared with that of other authorities. We decided that there were 54 authorities—we added three others later—with a better case than Tameside. Our judgment was based on the factors that I have spelt out.
  I am describing to the House the further reasons why we took that policy decision. Before we made our proposals it was becoming increasingly clear that the

  877
  traditional urban programme did not fit with our policy of targeting resources and building business confidence. Too many areas were chasing necessarily limited urban programme resources. I say limited resources, but it is worth pointing out that they have grown by over 70 per cent. in real terms since 1979. The right hon. Gentleman quoted the Public Accounts Committee, but the Select Committee on the Environment, among others, made the point that excessive time and effort were being expended by local authorities and the Department of the Environment's officials in preparing and appraising bids that had little chance of success.
  We decided to move to a system of inviting bids from specified authorities whose needs were greatest. Tameside did not rate among them. This is, of course, easier said than done. There is no single, definitive index by which authorities can be ranked in terms of deprivation. That has been borne out by independent research commissioned by, among others, the Association of District Councils.
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  Our approach was to use a combination of 1981 census data and other information—notably about unemployment—to reach a judgment about relative needs and the most effective distribution of resources.
  We are well aware that Tameside, like many other areas, faces socio-economic problems; we also acknowledge the way in which the borough has made use of its urban programme resources in the past. Our decision to concentrate the resources is no reflection on Tameside's performance, and I hope that the borough will find it possible to accommodate its former projects within its main programmes.
  It may be helpful to point out that, although Tameside will not be invited to submit an inner area programme for 1987–88, its eligibility for support through our other programmes will not be affected. As I mentioned to representatives of the council on 9 December, that applies particularly to derelict land grant, which is a further means by which the council can expect helpful support from the Government.
  Question put and agreed to.
  Adjourned accordingly at six minutes past Twelve o'clock.