Commons Sitting of 21 October 1987

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

  Imprisonment of a Member
  The Speaker: I have to inform the House that I have received a letter dated 23 September 1987 from the resident magistrate in the petty sessions district of Belfast in which he informed me that the hon. Member for Belfast, East (Mr. Robinson) appeared before him on 22 September 1987 and was convicted of an offence under the Vehicles (Excise) Act (Northern Ireland) 1972, and was fined the sum of £25 and ordered to pay arrears of vehicle duty amounting to £25 and costs of £3.
  The letter concludes as follows:
  "On being asked if he wished to have time for payment he did not ask for time.
  He was ordered to be committed to prison forthwith, for a period of fourteen days unless the said sum be sooner paid, and not having paid that sum was lodged in prison the same day."
  I shall cause the text of the letter to be printed at the appropriate place in the Votes and Proceedings.

  PRIVATE BUSINESS
    BRITISH RAILWAYS (LONDON) BILL [Lords]
    To be read a Second time tomorrow.
Oral Answers to Questions
  FOREIGN AND COMMONWEALTH AFFAIRS

    Council of Ministers
    Mr Hardyasked the Sectetary of State for Foreign and Commonwealth Affairs when he last attended the European Economic Community Council of Ministers; and what subjects were considered.
    The Secretary of State for Foreign and Commonwealth Affairs (Sir Geoffrey Howe): The Minister of State, Foreign and Commonwealth Office, my right hon. Friend the Member for Wallasey (Mrs. Chalker), and I attended the Foreign Affairs Council in Luxembourg on 19 and 20 October. The main points on the agenda were the future financing of the Community; a proposed regulation laying down maximum permitted levels of radoactivity in foodstuffs after a nuclear accident; a draft Commission paper for the GATT negotiations on agriculture; and a proposal for a trade and economic co-operation agreement with the Gulf Co-operation Council. The protocol to the association agreement between the European Communities and Cyprus, providing for transition to customs union, was signed on 19 October.
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    A full statement covering the September and October Foreign Affairs Councils will be circulated in the Official Report.
    Mr. Hardy: May I ask the right hon. and learned Gentleman whether any aspects of European-South African relationships were considered at the meeting, and whether the other member states hold the continuing policies and practices of South Africa in the same regard as seems to be revealed by the recent extreme and rather provocative utterances of the Prime Minister?
    Sir Geoffrey Howe: There was no discussion of South Africa in the Council meeting, but everyone, as far as I know, in this House and throughout the Commonwealth and the Community is of exactly the same view: that apartheid is an intolerable system and that it must go as soon as possible.
    Sir Anthony Meyer: Is it not clear from every successive crisis, whether in the Persian Gulf or the world's stock markets, that the need for improved action and coordination within the European Community is now very urgent indeed?
    Sir Geoffrey Howe: Yes, I think that the whole development of world events underlines the importance of increasingly effective European unity on political as well as economic matters.
    Mr. John David Taylor: During the meeting in Luxembourg, did the Foreign Secretary have a separate meeting with the Irish Foreign Minister, and did the latter raise any doubts about the implementation of the promised extradition treaty by 1 December? If so, what excuses were given?
    Sir Geoffrey Howe: I had no separate meeting with the Irish Foreign Minister during the Luxembourg meeting, but it is, of course, well known that we attach importance to the implementation of the Anglo-Irish Agreement.
    Mr. Neil Hamilton: Will my right hon. and learned Friend confirm that there can be no question of giving more money to the European Community while its budget remains out of control, and that if the budget is brought under control the Community will have no need for more money?
    Sir Geoffrey Howe: My hon. Friend will recall that express provision was made at Fontainebleau for the possibility of an increase in own resources, and that is one of the matters under consideration in the context of the immensely important aim, to which my hon. Friend has rightly drawn attention, of achieving effective, binding budgetary discipline, which is associated with the need to achieve some extremely difficult conclusions on the control of agricultural policy.
    Mr. Anderson: Will the Foreign Secretary seek to defend before his colleagues in Europe the Prime Minister's protection in Vancouver of the apartheid regime, to the point where it became clear that, by her reckless insensitivity, she had destroyed at a stroke much of the patient bridge-building in South African relations that the Foreign Secretary and his colleagues at the Foreign Office have been attempting?
    Will the right hon. and learned Member confirm that, contrary to what the Prime Minister said in Vancouver, when he and his colleague met President Tambo they did so in both their EEC and their national capacities?
    Sir Geoffrey Howe: The Government's position in relation to South Africa and the need for the removal of apartheid as quickly as possible is not in doubt and I have no need to defend that in the European Community or anywhere else.
    Equally, I have made it plain that the meeting that I had with Mr. Tambo and the meeting that he had with my right hon. Friend are part of a pattern of contacts with the ANC which must be judged from time to time. The important thing is that the ANC should understand that if we are to be able to secure the implementation of the European Community demand for the unbanning of the ANC and the liberation of Nelson Mandela and others it is important that that should take place within the context of a suspension of violence, as set out in the EC demand.
    Following is the statement:
    "I attended the Foreign Affairs Councils which took place in Brussels on 14–15 September and in Luxembourg on 19–20 October, accompanied by the Minister of State, Foreign and Commonwealth Affairs, my right hon. Friend the Member for Wallasey (Mrs. Chalker).
    on both occasions the Council continued its negotiations on the reform of Community spending. There is now widespread agreement on the need to strengthen control of agricultural expenditure through the introduction of budget stabilisers. I made it clear that the principle of stabilisers would have to be translated into specific quantified decisions in order to ensure binding control. That is a condition for success in the overall negotiation. The Council will hold a further discussion at its next meeting on 23–24 November.
    The Council also discussed the proposal for a Council regulation laying down maximum permitted levels of radioactivity in foodstuffs after a nuclear accident, and decided that further work should be carried out by officials with a view to reaching agreement before 31 October. It agreed the text of a Council decision on a Community system for rapid notification in the case of a nuclear accident agreement was also reached in principle that the Community should accede to the Vienna convention on early notification in the case of a nuclear accident.
    The Council discussed trade relations between the Community and a number of third countries. In September it gave strong support to the Commission's determination to insist, in discussions with the Government of South Korea, on the removal of discrimination against EC companies in South Korean intellectual property practices. It also reaffirmed its continuing concern on possible protectionist legislation in the United States.
    In October the Council agreed that the Commission should continue its efforts to find a solution to the dispute with the US over the EC's ban on hormone-treated meat. It also discussed GATT article XXIV. 6 negotiations with Japan, Canada and Argentina; it agreed that the Commission should continue negotiations with Japan; endorsed the Commission's intention to seek binding GATT arbitration in the dispute with Canadians; and approved the agreement reached in the negotiations with Argentina.
    The Council continued its discussion of the Community's contribution to the multilateral trade negotiations in the Uruguay round. In September it discussed a draft mandate for the negotiations on tropical products, which has since been approved and tabled in the GATT. In October the Council agreed to the Commission presenting in the GATT on 26 October a paper for its negotiations on agriculture.
    The Council reached agreement on three sectors in the 1988 generalised scheme of preferences, and instructed officials to continue their discussions on the fourth, textiles. It also discussed the Commission's proposal for a trade and economic co-operation agreement between the Community and the Gulf Co-operation Council.
    The Council discussed the Community's position on export credits for ships in preparation for an OECD meeting on shipbuilding later this month.
    The Council agreed, by a qualified majority, to a Commission proposal for a reduction in the crisis levy which reduces Community staff pay.
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    The protocol to the association agreement between the European Communities and Cyprus providing for transition to customs union between the Community and Cyprus was signed on 19 October. At the signature the presidency made it clear that the provisions of the protocol applied to the whole population of Cyprus. The technical protocol to the association agreement covering trade between Cyprus on the one hand and Spain and Portugal, following those countries' accession to the Community, was also signed.
    In Political Co-operation, Ministers adopted a statement on 14 September about the Israeli policy of establishing settlements in the occupied territories. The text of this statement has been placed in the Library of the House."

    European Community (Policies)
    Mr. Knoxasked the Secretary of State for Foreign and Commonwealth Affairs what further proposals he intends to place before his European Community partners for the development of Community policies.
    The Minister of State, Foreign and Commonwealth Office (Mrs. Lynda Chalker): My right hon. and learned Friend and I will continue to press our ideas for legally binding controls on Community expenditure, including stabilising mechanisms for agricultural commodities.
    Mr. Knox: Will my right hon. Friend impress on all her colleagues in the Government that one of the main stumbling blocks to the development of the Community as an economic force is Britain's failure to join the exchange rate mechanism of the EMS?
    Mrs. Chalker: I think my hon. Friend already knows that I shall use my best endeavours to convince my colleagues of what we believe to be right and in the best interests of the United Kingdom. A decision on whether to join the exchange rate mechanism is under regular review by the Government, and my hon. Friend will recall that the Chancellor of the Exchequer has said many times that he will take the decision to join that mechanism when the time is right.
    Mr. Spearing: The Minister mentioned budgetary discipline. Will she confirm that the European Council meeting in Copenhagen will be a treaty meeting and, therefore, de jure, and that decisions taken by the Heads of Governments on that and other topics on documents presented by the Commission will commit this country? Irrespective of that, will she agree that the matters that will he brought up at Copenhagen should be thoroughly debated in the House well before 4 December?
    Mrs. Chalker: The Copenhagen meeting of leaders of European Community countries will be no different from any other European Council meeting. We shall proceed exactly as we have previously under the Single European Act, which now binds us all together.
    Mr. Dykes: Will my right hon. Friend confirm that the United Kingdom is fully committed to the development of the Community, which certainly needs such a commitment by all members states after a number of lean years, not least because the Federal Republic of Germany will have the next presidency, when it will be presenting new ideas for the development of institutions and the further use of qualified majority voting?
    Mrs. Chalker: My hon Friend knows well that Britain is fully committed to the development of the Community, but before we can develop the Community we must have secured full, legally-binding control of expenditure. That

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    is why we have always put and will certainly put at the head of the discussions in Copenhagen the need to establish stabilisers for all foods and the need to establish budgetary discipline on non-obligatory as well as on obligatory future spending. We are working for those things, and when they are in place we can go on to discuss the further development that we all surely want to see.
    Mr. Benn: Is the Minister aware that the very wild fluctuations that occurred in world markets reveal a great lack of confidence in the Western economies? Is she also aware that the damage that could be done to the British economy as a by-product of, for example, American policy makes it absolutely essential that we should not join the EMS and dismantle one of our remaining defences which it may be necessary for us to use to protect our own economy from the gambling that is taking place in the world's stock markets?
    Mrs. Chalker: I find it completely impossible to follow the right hon Gentleman's logic. He should remember that there is no doubt about the underlying strength of the United Kingdom economy. This year we have annual growth of 4 per cent. and we are in our seventh successive year of steady growth. Industrial production is at its highest ever level. Markets have greatly over-reacted and we must wait for them to settle. Thankfully, they have certainly seemed steadier over the last few hours. Even at its lowest point yesterday the stock market was above its January 1987 level. Scaremongering and rumour-mongering do a great deal more harm to Britain than does looking at the realities of the market.

    Arms Control and Disarmament
    Mr. Chapmanasked the Secretary of State for Foreign and Commonwealth Affairs if he will make a statement on progress in current arms control and disarmament conferences.
    Sir Geoffrey Howe: Prospects for a United States/ Soviet agreement on intermediate nuclear force missiles are encouraging. A number of key issues, including verification, remain to be resolved. We are participating in talks in Vienna to agree the framework for negotiations on conventional stability covering the Atlantic to the Urals. Negotiations on chemical weapons have made progress, but considerable complexities remain.
    Mr. Chapman: I thank my right hon. and learned Friend for that statement. Can he say what part the United Kingdom Government have played, in encouraging the talks and co-operating in the discussions that have led to the successful INF agreement? Does he agree that for further successful negotiations in those various areas there must be confidence on both sides about the verification procedures?
    Sir Geoffrey Howe: In reply to the first part of my hon. Friend's question, I can tell him that the Government have consistently sought to improve the prospects of success in our series of contacts with the Soviet Union and the United States, going back to the period of four years ago when no contact whatever was taking place. From that time we have pressed the Soviet Union very hard on the need to come to the bargaining table, and we have helped the negotiations overcome the series of obstacles erected by the Soviet Union against their success. My hon. Friend is right to remind the House that an essential part of an
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    agreement must be effective verification. As we shall hear in the debate tomorrow, that will involve Soviet inspections of INF missile deployment sites in the United Kingdom. The United Kingdom is willing to play a full part in bringing about agreement on those essential features.
    Mr. Duffy: Does the Secretary of State not agree that in the next and perhaps decisive phase of arms control negotiations both sides will need to demonstrate conclusively that sufficient political will exists to ensure that a serious disarmament process is here to stay? Will he tell the House what confidence-building measures he is considering? Will he put to our NATO allies the need for them to consider making available help for Soviet infrastructure and agricultural technology?
    Sir Geoffrey Howe: I do not see the need for those proposals in this context. Of course, it is important for both sides to be seeking to develop confidence in the other. If these negotiations are to succeed they must be approached with a sense of realism and vigilance and with an open mind. In that spirit I had a meeting this week with my American opposite number, Mr. Shultz, who will go to Moscow later this week. I am quite certain that both he and the other side recognise the need to establish a firm foundation of confidence if further success is to be achieved.
    Sir Peter Blaker: If we are to have an agreement for the abolition of intermediate range nuclear forces, is it not now even more important than before that we should also have an agreement to ban chemical weapons, in which the Soviet Union has enormous superiority and in the offensive use of which its forces are trained?
    Sir Geoffrey Howe: My right hon. Friend is absolutely right. The greater the progress that is made in achieving arms control agreements in respect of nuclear weapons, the more urgent it becomes to achieve progress with regard to conventional as well as chemical weapons. My right hon. Friend is right to remind the House that the Soviet Union is capable of waging chemical warfare on a large scale. It has substantial stockpiles of chemical weapons and its troops are comprehensively equipped and trained to operate in a chemically contaminated environment.
    Mr. George Robertson: Why, when the Americans and Soviet Governments are about to sign a historic agreement eliminating a whole generation of nuclear weapons, are this Government still desperately scratching around with the French to invent a new nuclear system? When President Reagan and Mr. Gorbachev are agreed on the urgent necessity to reduce nuclear stockpiles, does the Prime Minister not look increasingly belligerent, antiquated and pathetic as she tells the world that nuclear disarmament has gone far enough? Does the Foreign Secretary agree with her?
    Sir Geoffrey Howe: It is the hon. Gentleman who looks increasingly antiquated and pathetic as a result of the style of questions that he asks on this subject. The point made by my right hon. Friend the Prime Minister is precisely the point that I have made this afternoon. If we are to make further progress on nuclear arms control, it is of the greatest importance to make headway on conventional and chemical weapons as well.
    Sir Antony Buck: Does my right hon. and learned Friend agree that if the policies advocated by so many

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    Opposition Members were adopted, namely, a unilateralist approach, those policies would be of no help for progress in the various fora that my right hon. and learned Friend has just described to the House?
    Sir Geoffrey Howe: My hon. and learned Friend is precisely correct. The Labour party would have opposed the entire strategy of the dual track approach and the deployment of weapons on the Western side in Europe—without which it would not have been possible to achieve the breakthrough to secure the removal of that category of weapons altogether.

    Guatemala
    Mr. Tony Lloydasked the Secretary of State for Foreign and Commonwealth Affairs what reports he has received on the current human rights situation in Guatemala.
    The Parliamentary Under-Secretary of State for Foreign and Commonwealth Affairs (Mr. Tim Eggar): Her Majesty's ambassador regularly reports on the human rights situation in Guatemala. We believe it has improved since President Cerezo took office in January 1986. The United Nations Human Rights Commission shares our view.
    Mr. Lloyd: If that is the Government's response, how does the Minister assess the reports that there are still about 100 murders every month in Guatemala, and that figure does not include abductions that are not reported? Many of those are widely believed to have occurred at the behest and with the connivance of the agencies of the state, if not of the President himself. On that basis, what representations is the Minister making to the new Guatemalan ambassador about the importance that Britain attaches to an improvement in human rights in Guatemala, and what pressures are Her Majesty's Government putting on the United States Government, who have a direct responsibility for the situation in Guatemala?
    Mr. Eggar: My right hon. Friend the Secretary of State raised the question of human rights in New York when he met President Cerezo. I discussed the matter with Minister Sosa yesterday in the Foreign Office. The hon. Gentleman asked what evidence we have for forming our view. We rely on our own reporting and that of the United Nations. A United Nations human rights expert visited Guatemala in September this year and expressed satisfaction with the progress made by Guatemala with regard to human rights. We keep the matter closely under review, and the Guatemalan Government are aware of our concern.
    Mr. Wilkinson: Does my hon. Friend agree that the main cause of the atrocities in Guatemala is the continued insurgency of Marxist terrorists within that country? Is it not important for the stability and security of the region that British forces remain in Belize alongside Guatemala?
    Mr. Eggar: It is certainly true that the worst human rights abuses happened before the present Government took office. We have no plans to make any changes with regard to forces in Belize.
    Mr. Mullin: While we are on the subject of Central America, will the Minister confirm——
    Hon. Members: No.
    Mr. Speaker: Order. We are on the subject of Guatemala.

    Sino-British Relations
    Mr. Atkinsonasked the Secretary of State for Foreign and Commonwealth Affairs if he has any plans to meet his Chinese counterpart to discuss Sino-British relations; and if he will make a statement.
    Mr. Jacques Arnoldasked the Secretary of State for Foreign and Commonwealth Affairs if he will make a statement about the United Kingdom's relations with the People's Republic of China.
    Sir Geoffrey Howe: I met the Chinese Foreign Minister again at the United Nations General Assembly in New York last month. I very much hope that he will be able to take up my invitation to visit the United Kingdom next year.
    Our relations with the People's Republic of China remain excellent. Exchanges in many fields, including trade, are growing steadily.
    Mr. Atkinson: Does my right hon. and learned Friend agree that 37 years of Chinese occupation of Tibet, culminating in the recent riots and deaths, far from being an internal matter, constitute a serious threat to the good relations between China and Britain and between China and the rest of the free world? Will my right hon. and learned Friend seek an early meeting with his Chinese counterpart to express the concern of the whole House about events in Tibet and to urge on him the Dalai Lama's five-point plan for peace, neutrality and autonomy?
    Sir Geoffrey Howe: Obviously the House will regret the loss of life that has taken place in recent disturbances in Tibet. I believe that the best way in which we can help the Tibetan people is by encouraging the Chinese Government to maintain their programme of economic and political reform. We shall certainly seek suitable opportunities of doing that and ensure that the Chinese Government are aware of the anxieties expressed by my hon. Friend on behalf of the British people.
    I do not share my hon. Friend's view about the impact of these events on relations between Britain and China. The plan put forward by the Dalai Lama is a matter for the Dalai Lama and the Chinese Government. As I stated in my main answer, I have invited the Chinese Foreign Minister to visit this country next year. I hope that the visit will take place.
    Mr. Arnold: Bearing in mind the considerable trading opportunities that are arising with the People's Republic of China, will my right hon. and learned Friend state what additional steps are being taken to further our trade with that country?
    Sir Geoffrey Howe: My hon. Friend is right to draw attention to the scale of growing trade with the People's Republic of China. My noble Friend the Secretary of State for Trade and Industry is in China now, and he is only the latest in a series of Ministers and hon. Members to visit the country. We shall continue to expand contacts of that sort in the confident expectation of a further improvement in relations and expansion of trade.
    Sir Russell Johnston: Will the Secretary of State clarify his position on Tibet? Does he approve of the policy that is being pursued by the Chinese Government, and has he

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    a view on it? If he has a view, has he conveyed it to the Chinese Government? If he has conveyed it, have they responded?
    Sir Geoffrey Howe: As I said in my earlier reply, the Chinese Government are aware of the concern of British people about events in Tibet. We shall continue to seek opportunities of bringing that concern to their attention. I repeat that the best way of trying to secure improvements there is by encouraging the Chinese Government to continue with their programme of economic and political reforms in the region.
    Sir Peter Emery: Will my right hon. and learned Friend assure the House that the essential negotiations between the People's Republic of China and the Crown colony of Hong Kong are proceeding reasonably and as fast as he would expect?
    Sir Geoffrey Howe: My hon. Friend will appreciate that relations between the United Kingdom Government and the People's Republic of China in respect of Hong Kong rest upon the joint declaration that was concluded in 1984. Both sides have been and are working closely together to implement the declaration. We have agreed some important arrangements to give effect to it and I am sure that that positive co-operation will continue. Both sides are committed to full and faithful implementation of the agreement.

    Contadora Peace Process
    Mr. Rogersasked the Secretary of State for Foreign and Commonwealth Affairs what recent discussions he has had with his European Economic Community counterparts about Government action in support of the Contadora peace process.
    Mr. Eggar: The Central American peace process was discussed at the informal meeting of European Community Foreign Ministers on 3–4 October, and at the meeting of Foreign Ministers of the Twelve and regional Governments on 23 September. My right hon. and learned Friend attended both meetings.
    Mr. Rogers: Will the Minister tell the House whether his Government have sent a message of congratulation to President Arias on his award of the Nobel peace prize?
    Mr. Eggar: Yes, indeed. My right hon. and learned Friend the Foreign Secretary sent a message congratulating President Arias on his award, and repeating our confidence and congratulations with regard to the Guatemala accord.
    Mr. Ashby: Would my hon. Friend care to comment on the refusal of the Sandinistas to negotiate with the Contras, despite the Contras' expressed wish to negotiate with the Government of Nicaragua?
    Mr. Eggar: I read that President Ortega was reported to have said that if Contra leaders returned to Managua for peace talks they would be arrested. That hardly seems to be in the spirit of the Guatemala accord.
    Mr. Corbyn: Does the Minister not agree that now is the time for the British Government to make a clear and unequivocal declaration that they condemn American policy in the region, that they support the peace process now going on there, and that, as a measure of good faith,
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    they will restore British aid to the people of Nicaragua to enable them to get out of the appalling poverty into which the war conducted by the United States has forced them?
    Mr. Eggar: The hon. Gentleman has obviously been having a long holiday away from the newspapers. Together with our European Community partners, we issued a statement on 13 August supporting the accord.
    Mr. Churchill: Does my hon. Friend not agree that the maintenance of stability in Central America and the Caribbean region is of importance to Her Majesty's Government? That being so, is it not strange that this year we should be giving considerably more civil aid to the Marxist Government of Mozambique, with which we have no colonial link?
    Mr. Speaker: Order. That is very wide of this question.

    Argentina
    Dr. Michael Clarkasked the Secretary of State for Foreign and Commonwealth Affairs if he will make a statement about the United Kingdom's relations with Argentina.
    Mr. Eggar: We shall continue to look for ways of restoring more normal relations with Argentina, while upholding our commitments to the Falkland islanders.
    Dr. Clark: Can my hon. Friend assure the House that, despite the fact that Argentina invaded the Falklands arid now will not officially recognise the end of the hostilities, Her Majesty's Government are doing all that they can to normalise relations with Argentina and to try to return to the diplomatic position pre-1982?
    Mr. Eggar: I can, indeed, give my hon. Friend and the House those assurances. Since 1982 we have taken a series of initiatives to restore more normal relations. They include the lifting of all financial and trade restrictions, proposals for co-operation on fisheries conservation arid a number of other measures.
    Mr. Dalyell: Do Ministers believe that it would be wise, having regard to both the British national interest and the interests of democracy throughout Latin America, to be helpful to President Alfonsin, given his domestic arid political difficulties?
    Mr. Eggar: As my previous answer made clear, we seek more normal relations with the new Argentina.
    Mr. Foulkes: Surely the Minister will acknowledge that the recent elections in Argentina show the increasing strength of democracy in that country. Will he confirm that the indirect talks with Argentina on fishing that have taken place under the auspices of the United States have been useful? Is it not time to take up the suggestion made by Councillor Blake of the Falkland Islands at the United Nations and start direct talks with the Government of Argentina about all aspects of fishing in the south Atlantic?
    Mr. Eggar: As the hon. Gentleman is well aware, there have been some exchanges with the Argentines. Those exchanges have focused exclusively on the fisheries policy and, in particular, the conservation zone. Our aim, which is well known, is the co-ordination of fisheries management in the interests of conservation, and the avoidance of incidents. We naturally hope that something will come of those exchanges.

    European Commission
    Sir Russell Johnstonasked the Secretary of State for Foreign and Commonwealth Affairs when he last met the President of the European Commission.
    Mrs. Chalker: My right hon. and learned Friend and I met Monsieur Delors at the Foreign Affairs Council, which ended yesterday.
    Sir Russell Johnston: Does the Minister agree that the achievement of the internal market has, for very good political and social reasons, to be balanced by an increase in the resources of the European regional fund? Did she convey that view to Jacques Delors, bearing in mind that large areas of Scotland, Wales and the north-east of England are likely to lose all European regional development fund assistance if there is no increase in resources for the regional fund?
    Mrs. Chalker: I did not speak to President Delors yesterday about that particular issue, but, as I said in answer to a previous question, I think the hon. Gentleman knows very well that we have to put the finances of the European Community in order before we can start to talk about increasing the structural funds. However, I think he will be glad to know that we consider that it is early days yet to condemn what the Commission may put forward in terms of lists of regions. That has not yet occurred. We shall argue strongly that the most assisted areas in the United Kingdom should be eligible for support under the category that is concerned with industrially declining regions. The hon. Gentleman may or may not be glad to know that I have already discussed this matter, particularly the highlands and islands, with the member of the European Community who is responsible for that area.
    Mr. Watts: Did my right hon. Friend make it clear to the President that the current Commission proposals for the harmonisation of VAT on food, construction and other zero-rated items remain completely unacceptable to the United Kingdom?
    Mrs. Chalker: I do not think that there is any doubt in the European Community that the proposals to do away with zero rating will not be accepted by the United Kingdom. I remind my hon. Friend that decisions on all Community tax measures require unanimity, and, because they require unanimity, I am confident that we shall not accept any proposals that restrict our ability to use zero rating. As my right hon. Friend the Prime Minister has said, we shall continue the zero rating of food. We have no intention of putting VAT on electricity, gas, fuel and children's clothes and shoes. That would never he agreed by this House.
    Mr. Tony Banks: When the Minister met the President the other day, did she make it clear to him that her views on the African National Council differ radically from the views of the Boers' friend at No. 10?
    Mrs. Chalker: The hon. Gentleman and the whole House know that we are opposed to violence, wherever that may arise. There is no difference in attitude. We believe in trying to establish a dialogue between all the peoples of South Africa. What we do to that end must be in the sense of bringing about the speediest possible end to apartheid. There is certainly no difference of opinion, and we shall continue with our wide range of contacts.
    Mr. John Marshall: Did my right hon. Friend point out to the President that over 50 per cent. of British exports now go to our partners in the Community, which fact underlines the irresponsibility of those in the Labour party who wish to take us out of this job-creating Community?
    Mrs. Chalker: What my hon. Friend says is absolutely right. Many of our exports now go to the internal Community and much of our economy is tightly bound up with the European Community. It is little surprise, therefore, that eventually, after all these years, the Labour party is beginning to change its tune, however grudgingly. It is in the interests of the country at large, and it is also in the interests of Europe, that we should continue to export widely within the free internal market. That is what we are working for in 1992.
    Mr. Kaufman: Since the right hon. Lady, on behalf of the Government, denounces violence from whatever quarter it comes, will she denounce the violence of the Contra terrorists in Nicaragua, and will she advise them to lay down their arms so that they can negotiate under the terms of the Guatemala accord?
    Mr. Speaker: Order. The Question must be in the context of the European Community.
    Mrs. Chalker: I do not know what relationship that subject has to these questions. We shall continue to work for a peaceful solution in Central America.

    Test Ban Treaty
    Mr. Strangasked the Secretary of State for Foreign and Commonwealth Affairs if he will make a statement on the progress made towards reaching agreement on a comprehensive test ban treaty.
    The Minister of State, Foreign and Commonwealth Office (Mr. David Mellor): We remain committed to seeking progress towards a comprehensive test ban treaty. We believe, however, that it would be premature for negotiations to begin until progress is made on outstanding problems, notably verification. We therefore welcome, as a first step, recent indications of United States and Soviet readiness to seek the improvements in verification necessary to enable the threshold test ban treaty and peaceful nuclear explosions treaty to be ratified.
    Mr. Strang: Is the Minister aware that the negative stance of the Government in this matter is not only in contrast to that of the previous Conservative Government—which was a signatory to the 1963 partial test ban treaty—but in contrast to the changing attitude of the two super powers? Surely he must be aware that the statements that the Government keep making about verification are not supported by seismologists, other than those within the pay of the British Government. Furthermore, is it not time for a British initiative, bearing in mind what the Minister said about the talks between the United States and the Soviet Union, so that we can move, if not to a test ban treaty, to a lower threshold test ban treaty or to some limitation on the number of nuclear tests that are carried out each year?
    Mr. Mellor: The Government's approach to these matters is essentially practical. The hon. Gentleman suggested that we are lagging behind the United States and the Soviet Union, but I must inform him that the two treaties that were signed but not ratified, which are now

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    to be the subject of fresh discussion between the United States and the Soviet Union, impose limits on nuclear testing, within which we keep.

    Cuba
    Mr. Easthamasked the Secretary of State for Foreign and Commonwealth Affairs if he will seek to pay an official visit to Cuba.
    Mr. Eggar: My right hon. and learned Friend has no plans for such a visit.
    Mr. Eastham: I remind the Minister that in 1977 a United Kingdom-Cuban agreement was signed in the interests of technical and scientific co-operation. It was signed by the Cuban Minister, Mr. Hector Llompart, and the then British ambassador, Mr. Jackson. Since that time nothing whatever has happened, despite repeated representations from the Cuban Government. Do the Government intend to honour this agreement, or is it just a worthless pieces of paper?
    Mr. Eggar: We obviously do not take lightly any agreements that we enter into. I have yet to meet the new Cuban ambassador to the United Kingdom, and this matter may be something that he would want to raise with me at that time.
    Mr. Wilkinson: If my hon. Friend meets the new Cuban ambassador, will he tell him, clearly and unequivocally, that it is imperative that Cuba withdraws its forces from Angola if there is to be peace in that country and, furthermore, if a satisfactory settlement is to be achieved in south-west Africa, Namibia?
    Mr. Eggar: My hon. Friend need have no fears. I shall certainly make those points to the Cuban ambassador.
    Mr. Ernie Ross: If' the Minister meets the Cuban ambassador, will he support the greater flexibility in the stance of the Angolan Government, which is supported by the Cuban Government, in their approach to Angola, in seeking to resolve this matter? Would that not be a more helpful attitude, than the one expressed by the hon. Member for Ruislip-Northwood (Mr. Wilkinson)?
    Mr. Eggar: The most helpful attitude that the Cubans could take would be to withdraw their troops.
    Mr. Churchill: Given the repeated attempts by the Cuban Government to subvert many former British dependencies in the Caribbean in recent years, and its avowed intention to continue doing so, will my hon. Friend consult his colleagues to see whether we can reconsider the level of British aid that is given to the former British dependencies in that region? Is it not strange that the combined total of aid for all these former British dependencies is less that the amount that we are giving to the Marxist Government of Mozambique, with which we have no colonial links?
    Mr. Eggar: We give a considerable amount of aid to the Caribbean dependent territories. For instance, as I am sure my hon. Friend is aware, we give over £5 million per year to the Turks and Caicos Islands.

    Falkland Islands
    Mr. Wallaceasked the Secretary of State for Foreign and Commonwealth Affairs whether he intends to take any new initiatives with regard to the Falkland Islands.
    Mr. Eggar: We continue to look for ways of restoring more normal relations with Argentina, while upholding our commitments to the Falkland islanders.
    Mr. Wallace: Is the Minister aware of the Defence Select Committee report published shortly before the recess, which says that our Falklands commitment represents a diversion of assets from our primary task in NATO? Should that not be a spur to the Minister and his right hon. and learned Friend to seek further talks with the Argentines and an open-ended commitment to talks? Is this not another case like South Africa, where the Prime Minister's obstinacy stands in the way of the Secretary of State making a worthwhile initiative?
    Mr. Eggar: I have already made it clear to the House that exchanges on the subject of fisheries are taking place. We have no intention of entering any discussions that involve the transfer of sovereignty.
    Mr. Nicholas Winterton: Does my hon. Friend accept that freedom, democracy and the right to self-determination are vital priorities for the British Government? Will they therefore always consult the Falkland islanders or their representatives before any decision is taken? Does my hon. Friend agree that, whether some Opposition Members like it or not, the majority view in the Falklands must be of paramount importance?
    Mr. Eggar: We have always made it clear that we defend the Falkland islanders' right to self-determination.
    Mr. Beggs: Is the Minister prepared to recommend that the Government of Argentina be given the right to interfere in the Falkland Islands through an Anglo-Argentine agreement similar to the Anglo-Irish Agreement, through which the Government and the Irish Republic interfere in Northern Ireland affairs?
    Mr. Eggar: There is no such similarity, so the question cannot be answered.

    European Community Budget
    Mr. Baldryasked the Secretary of State for Foreign and Commonwealth Affairs if he will make a statement on the progress made in efforts to contain the European Community budget.
    Sir Geoffrey Howe: We have got agreement that CAP reform and budget discipline are the key issues in the current negotiations. Stabilisers, backed by an effective guideline for expenditure, have to be the main instrument of reform. Our task now is to translate that principle into hard practice—into the detailed agreement that is an absolute condition of success in the overall negotiation
    Mr. Baldry: I thank my right hon. and learned Friend for that reply. Is it not a simple fact that the Community budget will not be controlled until the Community firmly controls farm costs, commodity by commodity, so as to limit spending? We all know what needs to be done. Is it not a question of whether the Community can now find the resolve to do it?
    Sir Geoffrey Howe: My hon. Friend is absolutely right. Control of farm policy costs is absolutely essential for the achievement of effective budgetary discipline in the Community. We have achieved recognition of that principle. We have also achieved recognition by the Commission — and more widely — that stabilisers in respect of each commodity—commodity by commodity — are an essential means of bringing agricultural spending under effective control. What is now needed is the mobilisation of a common, collective will to put those principles firmly into practice.
    Mr. Cryer: Since Britain's membership fee for the Common Market this year is £1·3 billion, will the Foreign Secretary assure the House that the Government will not increase their contribution to bail out the Common Market? Will the right hon. and learned Gentleman repudiate completely Commissioner Cockfield's proposal to increase and widen VAT to cover food and children's clothing? Will he make it clear that it is not acceptable to the House and that we shall use the veto?
    Sir Geoffrey Howe: We have made it plain that any changes in Community own resources can be considered only in the context of a settlement that deals effectively and completely with the matters that we have already discussed this afternoon.
    My right hon. Friend the Minister of State has already told the House that any change in taxation or tax measures within the Community requires unanimity. That is clearly established in the Single European Act. We shall continue to zero rate food and children's clothes and shoes—the items about which the hon. Gentleman asked.
    Mr. Higgins: Did the House not agree to the last increases in Community resources on the clear assurances from the Government Front Bench that there would be effective budgetary discipline within the Community? Therefore, is not my right hon. and learned Friend's earlier statement this afternoon that we might have another increase to achieve that same objective very worrying?
    Sir Geoffrey Howe: My right hon. Friend's interest in this subject is well justified and he is an effective reminder of the importance of the matter. He should take notice of the fact that, as a result of the agreement arrived at in 1984, the agricultural savings now arrived at total some £10 billion. We have now got measures in place controlling milk and beef—milk production is down by 4 per cent. and butter production down by 13 per cent.—and there has been a substantial cut in beef support prices. What is necessary — my right hon. Friend is entirely right to remind us of it—is to build on the foundations laid at Fontainebleau to ensure that comparable discipline applies to the rest of the agricultural programme.
    Mr. Skinner: Is not the truth of the matter that if this Government, along with the others in the Common Market, decided to privatise the EEC there would be no buyers and they would not get a price?
    Sir Geoffrey Howe: I believe that as the European Community is an enterprise on such a large scale, the question does not arise.

    Soviet Jews
    Mr. Lawrenceasked the Secretary of State for Foreign and Commonwealth Affairs what measures are
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    being taken by Her Majesty's Government to persuade the Soviet Government to permit further emigration by Soviet Jews.
    Mr. Mellor: We take every opportunity to put pressure on the Soviet Union about this matter. I last raised this in clear and forthright terms at the resumption of the CSCE meeting in Vienna on 22 September. I am glad to say that one of the four specific cases I raised, that of Ida Nudel, has since been successfully resolved. Mrs. Nudel, a prominent long-term Jewish refusenik, was granted permission to emigrate at the beginning of this month and has now arrived in Israel.
    Mr. Lawrence: Does my hon. and learned Friend agree that the considerable efforts of this Government for the release of Soviet Jews are greatly appreciated by them and by hon. Members on both sides of the House? Does he also agree that the recent increase in Soviet Jewish emigration is indeed a most welcome departure? Does my hon. and learned Friend agree that, if the Soviet Union totally honours its commitment to human rights in the Helsinki accord, that will only strengthen our confidence that it will totally honour any commitments it may enter into regarding arms reduction and the maintenance of world peace?
    Mr. Mellor: I am glad that these long-standing cases are beginning to be resolved. There was the case of Sasha Blonsky, with which my right hon. Friend the Minister of State and my hon. Friend the Member for Cornwall, North (Mr. Neale) were prominently involved, together with other Members of the House. Up to September the figures show that some 5,397 Jewish citizens of the Soviet Union have been allowed to emigrate, and that is a larger figure than for the previous four years taken together. However, that figure still falls short of the 50,000 who were allowed out in 1979. In recent months the numbers have flattened off to a degree that should allow for no complacency.
    It is important in our dealings with the Soviet, Union that we make it absolutely clear that, while we are prepared to do business with Mr. Gorbachev, it cannot be only on those parts of the agenda that suit him. Trust is one and indivisible and respect shown for human rights carries over into the trust and confidence that we can repose in Soviet willingness to adhere to arrangements that they make with regard to arms control.

    Austria
    Mr. Jannerasked the Secretary of State for Foreign and Commonwealth Affairs whether he will make a statement on the current state of relations between Austria and the United Kingdom.
    Mrs. Chalker: Relations between the United Kingdom and Austria are friendly and reflect the common interests of our Governments and peoples.
    Mr. Janner: Will Her Majesty's Government assure the House of their full co-operation in the inquiries that the Austrian Government have set up into the wartime activities of President Waldheim? In particular, will the Government now release the documents in the Public Record Office which they saw fit to refuse to release before and which specifically relate to the alleged involvement of President Waldheim's unit in the interrogation of British

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    prisoners of war, some of whom were later sent for so-called Sonderbehandlung—which meant extermination in concentration camps—and whose whereabouts and deaths have never been confirmed?
    Mrs. Chalker: I can answer the hon. and learned Gentleman's second question briefly — no, the documents will not be released. Let me say, firmly, that where there is evidence—I mean evidence and not allegations, as I am sure the hon. and learned Gentleman will accept — we shall co-operate, whether that be with the Austrians or with the United Nations War Crimes Commission. That we have always done, and that we shall continue to do.
    Mr. Forth: As a democrat, does my right hon. Friend not welcome and support the result of free elections in any country and respect those thus elected?
    Mrs. Chalker: Yes. That is what democracy is all about.

    UNESCO
    Mr. Sedgemoreasked the Secretary of State for Foreign and Commonwealth Affairs whether he will now review the decision to withdraw the United Kingdom from membership of UNESCO; and if he will make a statement.
    Mr. Eggar: We made it clear when we withdrew from UNESCO that we would require evidence of fundamental and far-reaching reforms before reconsidering our position. We welcome the prospect of the election of a new director-general, but our fundamental concern remains UNESCO's programmes and administration. We shall continue to keep an open mind and monitor developments carefully.
    Mr. Sedgemore: Would it not be a good idea if the Foreign Secretary were to invite Senor Mayor, the director-general of UNESCO, to come to this country for discussions with a view to Britain rejoining that organisation? Should not the Foreign Secretary stop pretending that he agrees with the politics of the new Right and the dreadful lead given by the United States State Department on that matter?
    Mr. Eggar: I am afraid that I have to say to the hon. Gentleman that he appears to be woefully ignorant of the way in which UNESCO operates. The fact is that the programme of work for UNESCO over the next two years will be decided at its general conference, which is currently meeting. The proposals that have gone to the general conference were put forward by the previous director-general. We shall watch with considerable interest to see whether changes are made in the programme recommendations and how any programme recommendations by the general conference are implemented over the coming months.
    Mr. Key: Will Her Majesty's Government consider strengthening our observer status at UNESCO in view of the appointment of Senor Mayor?
    Mr. Eggar: As I am sure my hon. Friend is aware, we have a considerable presence in the observer section, which is based in our Paris embassy. However, had UNESCO been prepared to co-operate more freely with that observer section we might have been able to get further in our efforts to observe what was going on.
    Mr. Foulkes: Does the Minister not accept that there is an excellent new director-general designate and that he
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    has said he is committed to improving the efficiency of the organisation and carrying out the sort of reforms that the British Government have outlined? He has said that a priority is to get Britain and the United States back into UNESCO. Surely the Government should give him a message of encouragement and an idea of the situation in which our membership would be reconsidered. Surely it is better to support and encourage him from inside, rather than shouting from the touchline.
    Mr. Eggar: As we have made clear on several occasions, UNESCO is not about personalities; it is about the programmes that it carries out. Of course we welcome the announcement of the appointment of Dr. Mayor, which still has to be confirmed, as the hon. Gentleman knows, on 7 November. However, Dr. Mayor faces a difficult task of administrative reform and the implementation of programmes. We shall watch carefully how he proceeds in his job.

    Soviet Union
    Mr. Adleyasked the Secretary of State for Foreign and Commonwealth Affairs when he next intends to visit the Soviet Union; and what subjects he will be discussing.
    Sir Geoffrey Howe: I shall be taking up Mr. Shevardnadze's invitation as soon as mutually convenient dates can be agreed. I expect to discuss a wide range of subjects, including arms control, human rights, regional and bilateral issues.
    Mr. Adley: I thank my right hon. and learned Friend for that reply. I also thank him for raising with Mr. Shevardnadze the matter of the P36. Is he aware that the discussions that he started on the repatriation, of that locomotive have tended to run into the ground since he stopped talking about it? When he makes his visit, can he find a couple of minutes to re-open the subject, as it is of interest to many people in this country?
    Sir Geoffrey Howe: My hon. Friend is energetic in his determination to safeguard locomotive rights. I shall bear that in mind. However, it will not be the most important item on my agenda with Mr. Shevardnadze.
    Mr. Winnick: Is the Foreign Secretary aware that it will be right to raise the issue of human rights when he visits the Soviet Union, because it is a subject of concern to us all? What would his response be if the Soviet leader turned round and said, "What about the attitudes adopted by your Prime Minister, and the wrecking and destructive attitude that she adopted at the Commonwealth conference?" Are not the rights of the black majority in South Africa of equal importance to human rights in the Soviet Union?
    Sir Geoffrey Howe: I will tell Mr. Shevardnadze, as I so often have to tell the House about the hon. Gentleman, that he is talking absolute nonsense. In fact, I will tell him equally plainly that we are totally at one in our determination to bring about an end to apartheid as soon as possible. That is part of the consistency with which we press the case for reform within the Soviet Union.

    Sri Lanka
    Sir Geoffrey Finsbergasked the Secretary of State for Foreign and Commonwealth Affairs if he will make a statement about the United Kingdom's relations with Sri Lanka.
    Mr. Eggar: Our relations with Sri Lanka continue to be close and friendly.
    Sir Geoffrey Finsberg: Will my hon. Friend assure the House that he will respond to any legitimate request from the Government of Sri Lanka for advice and assistance in its battle against terrorism?
    Mr. Eggar: I think that the whole House will admire the personal and political courage that has been shown by the President of Sri Lanka over the past few months. We were able to help by responding to a request that he made when we supplied two detectives to look into the dastardly terrorist attack on the Sri Lankan Government, and we would look at other requests were they made.

The Gulf
3.30 pm
Mr. Gerald Kaufmanasked the Secretary of State for Foreign and Commonwealth Affairs if he will make a statement on the policy of Her Majesty's Government towards developments in the Gulf.
The Secretary of State for Foreign and Commonwealth Affairs (Sir Geoffrey Howe): Our policy is unchanged. We remain strictly impartial in the conflict between Iran and Iraq—the underlying cause of tension in the Gulf—and are working for immediate implementation of Security Council resolution 598, which provides for a ceasefire and negotiated settlement.
We deplore all attacks on shipping in the Gulf, and are determined to uphold the principle of freedom of navigation. Along with other countries we maintain a naval presence in the Gulf for that purpose.
Mr. Kaufman: Does the right hon. and learned Gentleman agree that tit-for-tat warlike exchanges in the Gulf, inevitably escalating in scale and dimension with every new response from whatever quarter could, as I warned the House exactly three months ago, lead to uncontrollable escalation and grave consequences not only for peace in the immediate area but for world peace?
Following their belated decision, after prolonged pressure from the Opposition, to close the Iranian arms procurement office in Victoria street, will the Government now take the initiative in moving for a United Nations mandatory arms embargo on both sides in the Iran-Iraq war? To demonstrate to Iran and Iraq that the international community will not tolerate unprovoked and unlawful attacks on lawful shipping in international waters, will the Government now agree with the increasingly held view that the eight national naval contingents in and around the Gulf should be co-ordinated under the auspices of the United Nations?
Sir Geoffrey Howe: I am glad that towards the end of his question the right hon. Gentleman emphasised the need to make it clear that the Government will not tolerate unprovoked attacks on the shipping of innocent nations in Gulf waters. That is the point on which I ended my answer. It is in defence of that principle that every nation with naval assets in the region is entitled, in the face of unprovoked attacks such as those of which the right hon. Gentleman complained, to take action in self-defence. The continuation of attacks such as that is all the more reason for us to be taking action, as we are, in the most energetic way possible to bring the conflict to an end. It is for that reason that I took part, along with my colleagues representing the other five permanent members of the Security Council, in the discussions in New York at the end of last month making plain our commitment to a double track policy to bring the war to an end, strengthening the authority and power of the Secretary-General to try to promote a ceasefire, which we all want, and being ready to equip him with the support of an arms embargo to strengthen his authority and that of the United Nations. That is what we are trying to do and it is in that sense that we were glad to close the military procurement office in this country a few weeks ago. Our purpose is exactly the same. We want to secure an end to the conflict
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with the maximum authority of the United Nations. However, even in that context, it must be said that the prospect or possibility of achieving a United Nations naval force is not something that we regard as realistic or attainable.
Mr. Peter Temple-Morris: I congratulate my right hon. and learned Friend on trying to inject balance into his various public statements in this difficult area. Does he agree that to make effective progress towards a ceasefire, any international policy has to he seen to be even-handed? Does he further agree that to make progress towards an effective arms embargo inevitably means greater involvement by the Soviet Union and the United Nations?
Sir Geoffrey Howe: There is no doubt that a policy designed to bring to an end a conflict between two combatants must be seen to be even-handed both in the objective that it sets itself and in its enforcement. That is why so much care was devoted, in the formulation of resolution 598, to achieve a statement of objectives that would be acceptable to both sides. In the same sense, we have made it plain that an arms embargo should be put in place against whichever combatant fails to comply with the resolution. It is also for that reason that we regard the organisation of the United Nations as the most effective way to achieve co-operation between the two superpowers and the remainder of the world to realise the objective that my hon. Friend identified.
Sir Russell Johnston: Does the right hon. and learned Gentleman agree that the change of attitude revealed in the answer of the Soviet Union on 15 October towards international peacekeeping is surely something of which we should take advantage, as it would enable concerted rather than unilateralist action in the Gulf? Will he please now agree that those hon. Members from both sides of the House who, for a long period, pressed him to prevent the provision of war supplies to Iran, and to take action against trade — including oil, which provides the money to obtain arms—were right? After all, an admission of error from the Treasury Bench, in the presence of the Prime Minister, would be a tremendously refreshing start to the Session.
Sir Geoffrey Howe: We have made it plain that we regard the most effective measure, indeed the only effective measure currently in sight, to be an arms embargo. To go beyond that with further embargos is not likely to prove fruitful. Indeed, it is proving far from easy to secure the necessary commitment to the arms embargo. For that reason, the hon. Gentleman is right to emphasise the importance of participation by the Soviet Union as well as the United States in the search for effective measures.
We believe that it is important to maintain the unity of the five permanent members in the search for that policy. If that unity is to be meaningful and effective, it must be committed to something. That is why we stress the utmost importance of the Soviet Union, together with the other permanent members, being ready to put its full weight behind the arms embargo that the hon. Gentleman rightly regards as important.
Mr. Jonathan Aitken: Will my right hon. and learned Friend confirm that the serious commitment that we have now made to the Gulf is so long term in its nature that we may be thinking in terms of years

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rather than months for keeping our naval force on station there? While I agree with my right hon. and learned Friend that the United Nations is wholly unsuited to performing a co-ordination role, may I ask both him and the Government to begin giving some serious thought to the establishment of a new organisation, such as a Gulf defence organisation, to carry out that vital function?
Sir Geoffrey Howe: It is difficult to believe that the most important action at the present time is to set about the creation of a new organisation. However, my hon. Friend was right to emphasis the importance of the Government's commitment, and that of other western countries, to security in the Gulf. He was also right to suggest that the length of that commitment to the presence of naval forces cannot be limited. He well knows that the Armilla patrol has sought to assist and accompany—and, in that sense, protect — British merchant vessels in those dangerous waters for some seven years. I am sure that the whole House will join me in paying tribute to that patrol for the skill and dexterity in the way that it carries out its duties.
Mr. Denis Healey: Does the right hon. and learned Gentleman agree that war on international shipping in the Gulf was started by Iraq, not Iran, and that the great majority of attacks on international shipping have been carried out by Iraq? Will not the Government's ability to support United Nations' efforts to bring the war to an end be impaired if they continue to support an American position that is clearly partial, rather than impartial, in respect of Iraq?
If the right hon. and learned Gentleman is rightly convinced that the United Nations should seek an arms embargo, why does he oppose the creation of a United Nations force to protect shipping in the Gulf? Has that not been supported by the Soviet Union? Was not United Nations' action in Korea effective in protecting South Korea against attacks from the North and was it not a United Nations force that cleared the Suez canal after the unfortunate attack by Britain and France on Egypt?
Sir Geoffrey Howe: On the first part of the right hon. Gentleman's question, plainly the conclusion of the conflict along the lines foreshadowed in resolution 598 demands a response from Iran and Iraq, and we have not ceased to press that point on both belligerents. We have also impressed upon Iraq the need to refrain from attacks upon shipping in the Gulf, and it has done so for periods of several weeks at a time. Subsequently, it has also been clear that Iraq accepts and will implement resolution 598 if the Iranians do so, but Iran has neither accepted nor rejected the resolution, which is why all of us, considering the matter at the United Nations, recognised the need to maintain the pressure for an arms embargo in relation to Iran primarily, although not exclusively.
The right hon. Gentleman will be the first to understand the formidable difficulties in trying to organise a United Nations naval force. It has never been done in the past——
Mr. Healey: Korea.
Sir Geoffrey Howe: I will come to Korea in a moment; I am talking about a United Nations naval force. Apart from the difficulty of obtaining the agreement of the Security Council, there would be the immense difficulty of
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trying to agree joint operational instructions, including rules of engagement, in many languages, and the equally immense difficulty, which has been proved so often in the past, of agreeing on problems of burden-sharing and the time involved in achieving that.
The difference between this conflict and the two matters to which the right hon. Gentleman referred is that, in Suez, the conflict had already come to an end and United Nations' participation was concerned simply with clearing up the consequences. In Korea, there was a united effort to try to check the agressive onslaught of one belligerent. The position is infinitely more complicated in the Gulf, where one is trying to persuade two belligerents to bring the conflict to an end. The right hon. Gentleman's proposal has not been dismissed lightly, but it does not commend itself to the Government.
Mr. Dennis Walters: In his talks with Mr. Shultz the other day, did my right hon. and learned Friend, while welcoming the measured American response in the Gulf, point out the need for American policy to be less concerned with excluding the Soviet Union from the middle east and more concerned with co-operating with it in bringing about a settlement in the Gulf and in other areas? Would it not be dangerous if the Soviet Union began to take a strong pro-Iranian position?
Sir Geoffrey Howe: The corollary of my hon Friend's thoughtful question is that one must be worried about the extent to which the Soviet Union may be looking after its interests in exactly the way that he foreshadowed. It is most important to bear very clearly in mind the dangers of such motivation on the part of the Soviet Union, but having identified that danger, I agree that it is also important for the two super powers—the United States and the Soviet Union — together with the other permanent members of the Security Council to be ready and willing to talk and work together in support of a firm and effective joint policy to bring this war to an end. For many years, a shortcoming of the United Nations has been the absence of a willingness of the five permanent members to work together. A modest prize in the present struggle has been the willingness of the five permanent members to work together. We intend to hang on to that, but only in support of an effective policy.
Mr. Dick Douglas: The Secretary of State mentioned the difficulty of having rules of engagement in several languages. Is it not correct that we and the United States speak the same language? May we have an assurance that the rules of engagement for the Armilla patrol have been discussed with the United States and that their rules of engagement have been discussed with us, especially in relation to their response to Iranian attacks and their attack on an oil production platform? Is the Secretary of State mindful of the fact that similar American assets are well away from the Iranians, whereas our assets in the North sea might be vulnerable?
Sir Geoffrey Howe: The hon. Gentleman introduced a rather different aspect towards the end of his question. During the years when several naval forces have been present in the Gulf, there has been practical co-operation and close contact among the vessels operating there. Such informal co-operation is useful and important, but there is no intention to create a formal integration of the contingents or of their operating instructions.

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I am not prepared to discuss our rules of engagement in detail, although they are obviously reviewed constantly in the light of changing circumstances; but they are calculated to be non-provocative, de-escalatory and appropriate to the fulfilment of the defensive functions for which the Royal Naval assets are in the region.
Mr. Michael Latham: Is not the gloomy truth that this latest ceasefire resolution has been no more successful than all the previous ones, and that neither of the two belligerent powers is really interested in implementing it? If we are to have positive action, will it not come from the United States and the Soviet Union working in concert to impose a solution?
Sir Geoffrey Howe: The gloomy truth is, as my hon. Friend puts it, that the acheivement of a conclusion to the conflict, which has now run for some seven years, is a task of immense difficulty. The task being undertaken by the United Nations and the secretary-general, as I have emphasised many times, falls not far short of impossibility. That is all the more reason for us to try to arm the secretary-general with the authority that he needs to achieve a chance of success, and all the more reason, as my hon. Friend says, for the five permanent members, as leaders of the 15 members of the Security Council, to achieve a united policy with some clout and authority behind it.
Regarding my hon Friend's last point, close co-operation between the United States and the Soviet Union in good faith, with a willingness by the Soviet Union to play its full part, is an essential feature of what we need to bring the conflict to an end.
Dr. David Owen: While the United States' naval action was perfectly acceptable in terms of the United Nations charter, surely the Foreign Secretary would agree that there is an obligation to seek a peaceful settlement in terms of the United Nations charter. How can the United States expect the Soviet Union to apply sanctions to Iran when the United States is refusing the Soviet Union's offer to use its minesweepers as part of a United Nations force, and when the Soviet Union has also agreed to repay all its debts on United Nations' peacekeeping? Those are two constructive steps taken by the Soviet Union that surely need a British response, even if there is no response from the United States.
Sir Geoffrey Howe: The British response to the decision by the Soviet Union, after a prolonged delay of many
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years, to pay its contributions to the costs of peacekeeping and other United Nations activities is to welcome it warmly, and to recognise that it is a belated recognition of what the Soviet Union should have been doing. The British response to the suggestion made by the right hon. Gentleman for the establishment of a United Nations naval task force is the one that I have just described. That does not diminish the force of his point that the Americans were entitled to take prudent and restrained military action in self-defence. In support of his second point, it is important for the Soviet Union to be ready to co-operate with the United States, and vice versa, with the other permanent members in support of the united action, which is the only possible prospect of bringing this conflict to an end.
Mr. Speaker: I remind the House that the private notice question is an extension of Question Time. I have allowed it to go on longer because of its importance, but I can only permit two more questions—one from either side
Mr. Ray Whitney: My right hon. and learned Friend has spoken of the excellent work of the Royal Navy's Armilla patrol. Does the operation of that patrol continue to be restricted to the lower Gulf? If so, what consideration is being given to the protection of British shipping operating in the northern Gulf?
Sir Geoffrey Howe: My hon. Friend knows that the area of operation of the Armilla patrol does not extend throughout the whole Gulf. Its resources are necessarily limited and it makes good sense to concentrate its effectiveness on an area in which the majority of British shipping movements take place, and in which the greatest risks are. Beyond that, British shipping is given the clearest advice about the limits of the assistance that can he given by the Armilla patrol.
Mr. Bruce Grocott: Will the Foreign Secretary confirm that, with the exception of one embarrassing week in the summer, British foreign policy in the Gulf, as in other parts of the world, consists of I he Prime Minister ringing up the White House and asking the President what she should do next? When shall we have an independent foreign policy again, and will the right hon. and learned Gentleman explain how our policy in the Gulf differs from that of the United States?
Sir Geoffrey Howe: It differs so fundamentally that only the hon. Gentleman cannot see the difference.

Storm Damage (England)
3.49 pm
The Secretary of State for the Environment (Mr. Nicholas Ridley): I wish to make a statement about the hurricane force winds which hit southern England early last Friday morning. Tragically 19 people were killed. We offer heartfelt condolences to their relatives and friends. There was widespread damage to property and trees; road and rail links were blocked; electricity and telephone lines were brought down on a large scale. Most of the damage was caused by falling trees.
Ever since, emergency teams from the local authorities, the electricity supply industry and the other services affected have been working incessantly, helped greatly by the armed services. They have done a magnificent job. Normal services have now been restored to the great majority of people. They will continue to make every effort. About 4 million electricity consumers have been reconnected, although 168,000 are still without supply. The electricity supply industry is making every effort to reconnect the bulk of them by the weekend, but the extent of the damage in some areas and the continuing adverse weather may result in some consumers not being restored till next week. The industry is working closely with other emergency services to minimise hardship to those still affected.
It is too soon to estimate the overall costs of these events, but I have already announced the Government's decision that the existing financial arrangements to assist local authorities in emergencies—known as the Bellwin scheme — will be available in the areas affected in England for emergency work connected with that storm damage. My right hon. Friend the Secretary of State for Wales will be making a separate statement on those areas of Wales affected by the severe flooding over the last few days.
Prudent local authorities have long provided in their budgets for contingencies and emergencies, but in 1983, after consultation with the local authority associations, the Government issued guidelines
"To provide special financial assistance to local authorities who, as a consequence of an emergency, would otherwise incur an undue financial burden in providing relief and carrying out immediate works to safeguard life or property or prevent suffering or severe inconvenience to affected communities."
Under this scheme, authorities are themselves responsible for the first tranche of expenditure on emergency work. The amount that the authorities most affected will be expected to find from within their existing budgets is likely, on average, to be slightly below 0·5 per cent. of their GRE. I am setting the threshold at expenditure equivalent to the product of an exclusive penny rate for county councils and of 0·15p for shire districts. Expenditure above that will be eligible for 75 per cent. grant assistance from Government. The threshold in London will be based on the product of a 1·15p rate divided between tiers according to GRE shares. The Department is writing today to the local authority associations and to those authorities that initially appear most likely to be affected explaining details of how the scheme will operate. I am placing copies of that letter in the Library and in the Vote Office. It will be up to any authority that considers itself eligible for such assistance to apply to the Department. The scheme does not cover losses that are insurable.
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I shall take account, too, of the effect on rate support grant. In response to requests from a number of councils, I propose that where a local authority gains grant assistance under the Bellwin scheme, the proportion of expenditure above the threshold borne by the local authority should be excluded from the definition of total expenditure, and will not, therefore, result in loss of grant. I shall be consulting the local authority associations on the precise terms of the total expenditure exclusion.
Turning to the capital side, insurance payments for loss or damage are anyway outside the capital control system, but to help local authorities with capital works in restoring their buildings the Government will be giving limited additional allocations for expenditure in the current year.
I recognise too, that the public feel deeply about the massive damage that has been done to mature trees. There is a strong feeling that we should replant for the benefit of future generations.
The royal parks are my direct responsibility, and we will press ahead with clearing and appropriate planting as fast as possible. There are already in existence for rural areas Countryside Commission schemes for grant assistance to local authorities and private owners for tree planting. I propose to extend these schemes in three ways to cope specifically with the loss of trees as a result of the hurricane force winds. First, for this temporary purpose, the rate of grant aid for local authority planting will be increased to 90 per cent. Secondly, and also temporarily, these schemes will be extended to cover London and other urban areas. Thirdly, the Countryside Commission will have discretion to grant-aid at a higher rate than under its present scheme historic landscapes of great value where the scale of tree loss justifies this. I shall make extra resources available in the current year for these schemes. These extensions will enable the taxpayer to contribute to restoring our heritage of fine trees for future generations. In addition, my Department will be issuing through the press to householders, guidance on the protection of surviving but damaged trees.
My right hon. Friend the Minister of Agriculture, Fisheries and Food is urgently consulting the European Commission with a view to increasing the rates of grant under the agriculture improvement scheme for shelter belts, hedges and traditional walls in the storm damage areas to 60 per cent., with conifer belts at 30 per cent., until the end of 1988–89. He will also be providing special additional help to Kew gardens and Wakehurst place which suffered severe damage of national and international significance. My right hon. Friend is also arranging for the farm and countryside initiative to provide help to some particularly hard hit rural communities both for tree clearing and tree planting.
The measures that I have announced today will provide both for the appropriate short-term assistance to local authorities in their emergency work, and for repairing, as soon as possible, the long-term damage to the environment
The House will wish to join me in thanking the local authorities and all the emergency services for their unstinting efforts, and in offering sympathy on the loss and suffering experienced by people in the areas affected.
3.56 pm
Dr. John Cunningham: I thank the Secretary of State for responding so promptly to our request for a statement. I associate my right hon. Friend the Leader of the Opposition and my right hon. and hon.

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Friends and myself with the condolences that the Secretary of State expressed to the relatives, friends and families of those people who lost loved ones. I also—it is a rare treat for me—reiterate what the right hon. Gentleman said about local authorities. He said, "They have done a magnificent job." That is true, and the real merits and values of good local government and good local authorities have come very much to the forefront in the aftermath of these appalling events.
I also welcome what the right hon. Gentleman said about the damage to our national heritage and the measures that he is taking on tree replanting, grants and associated financial measures for the long term. All those aspects of his statement are very welcome. I should like to ask him a number of specific questions about financial assistance to local authorities. Why is the Secretary of State excluding the product of an exclusive penny rate from the assistance? It will be instructive for the House to know that for Kent county council that will mean an immediate bill of £2 million. For Hampshire, the bill is £2·3 million; for West Sussex, £1·1 million; for Brighton, £253,000; for Reading, £275,000; and for Hove, £151,000. I make that point because the suggestion that the product of a penny rate can be easily met by local authorities in the current financial climate is totally false. The Secretary of State and the Government should be generous and take into account the total costs to local authorities of this unprecedented storm damage and not exclude anything from the calculations.
Why is the Secretary of State not excluding the product of a penny rate from the consequences of penalties? Most of the affected local authorities are in penalty and, although the statement does not make it clear, that expenditure will be affected by the penalties imposed by the Department putting an additional burden on the ratepayers in those areas. Will he reconsider that and be more generous?
In so far as the statement refers to additional capital expenditure in the current financial year, will the Secretary of State reconsider these points? It is abundantly clear that much of the damage has not yet been properly assessed, let alone costed. The financial consequences and the costs of reparation will go well beyond this financial year and probably well beyond the next. The Secretary of State should—and I ask him to consider this point—set up an inquiry or joint working party with the local authorities to consider the full long-term financial implications of the damage for the authorities and the ratepayers, the extent of the damage and the real cost. The Secretary of State is quite right to state that the cost cannot possibly be quantified in the short time that has elapsed since the devastating storms occurred.
I want the Secretary of State to consider the position of individual families who simply may not, even taking their insurance into account, be able to make good the damage to their homes and property. There is a special problem with families in receipt of supplementary benefit who can only be given assistance on schemes costing a maximum of £325. That is nowhere near sufficient to help them to make their homes sound, safe and secure again. Will the Government consider that and let us have a statement from the Secretary of State for Social Services or a further statement from the Secretary of State for the Environment?
It is abundantly clear that the so-called Bellwin measures were not designed to cope with a disaster of this
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magnitude. They exclude all matters which in the Government's judgment should he covered by insurance. The Secretary of State and the House know full well that in the prevailing financial climate many local authorities are not insured for many of their buildings. Will the Secretary of State consider that and discuss the implications with the local authority associations?
We are grateful for the statement and support much of what the Secretary of State has said on the Government's behalf. However, I have asked five important financial questions concerning local authorities, ratepayers and some individual families, including pensioners. I hope that the Government will look again at those matters and will make a further statement to the House.
Mr. Ridley: I am grateful to the hon. Gentleman for his comments at the beginning of his remarks and for the support that he gave to parts of my statement. However, I must pick him up on matters about which he appeared to quibble as there are sound answers to all his points.
First, the Bellwin rules were negotiated with the local authorities in 1983. It was then envisaged by the Government and by the local authorities that local authorities had some responsibility for providing contingency for all sorts of emergencies. Section 138 of the Local Government Act 1972 gives them the power, and indeed, it might be said, places a duty on them, to make spare resources available for emergencies of this nature. It was agreed then that over and above a threshold the Government would come to the rescue, and that is precisely what we are doing. Moreover, I must stress that we have effectively lowered the threshold from the penny rate postulated in 1983 because we have not taken account of inflation on that penny rate. Therefore, the scheme that I have announced today is more generous than the original Bellwin rules.
Within the concept of local authorities having a contingency for emergencies for which presumably they have budgeted, it is not a matter of authorities losing grant if they spend money below the threshold because they have budgeted to spend that money and included it in their accounts. It would be wrong to give a disregard—in the old-fashioned language—for money of that kind or to alter the definition of total expenditure in that way.
With regard to the capital accounts, the hon. Gentleman was fair to say that we have no means now of guesstimating the capital damage. All I have said is that for immediate capital repairs we will make extra allocations available as and when we know the scale of the problem during the current financial year. Of course, if there are knock-on effects in future, we will consider them when we know the scale of the damage and the problem.
With regard to the points raised by the hon. Gentleman about insurance, it cannot be right that some authorities should have prudently taken out insurance while others did not or made no provision for carrying their own insurance. It is wrong that the omission to insure should go without question when providing capital allocations in future.
The hon. Gentleman's final point referred to help for those on benefit who have suffered damage to their homes and property. I confirm that the DHSS has schemes available to help. If anyone has a problem in that respect, the best thing to do is to contact the DHSS or my right

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hon. Friend the Secretary of State for Social Services as there are arrangements to help in these special circumstances for individual cases.
Sir Peter Hordern: Is my right hon. Friend aware that my constituents and other people in Mid-Sussex are grateful for the work of the emergency teams, local authorities and electricity boards during the disastrous crisis that was inflicted upon them by the storms of Thursday night and Friday morning? Will he confirm that after local authorities have spent the product of a penny rate they will be entitled to receive from the Government 75 per cent. of all additional expenditure and that there will be no clawback as exists under present arrangements?
Will my right hon. Friend also be generous in his acceptance of the claims or requirements of local authority capital expenditure for roofs that have been blown off schools? Finally, will he comment on the devastation caused not only to areas of parkland in public ownership, but to National Trust properties with beautiful gardens in which trees have been blown down?
Mr. Ridley: I am grateful to my hon. Friend and will certainly pass on his remarks about the splendid work of the emergency services. I confirm that over and above the product of a penny rate in shire counties and a 0·15p rate in shire districts—and of course those may be added together for any particular locality — the Government will meet 75 per cent. of the expenditure incurred and that there will be no clawback, as my hon. Friend called it, of the local authority's share of that excess spending.
I note my hon. Friend's comments about capital allocations. I have already mentioned those and we will want to consider the scale, scope and size of claims before we proceed further. However, I acknowledge that extra would be made available this year when the needs are calculated.
What I said about the Countryside Commission having discretion to aid areas such as parkland can be supplemented by a helpful statement that was made this morning by English Heritage. It, too, will be prepared to earmark special funds from its own resources for aiding areas such as parkland. I think that the hon. Gentleman will find also that the National Heritage Memorial Fund can assist such areas. There are three sources of help for the special gardens, parks and other areas of our countryside where the damage has been devastating. I think that we would all like to be sure that adequate funds were available to restore, so far as is possible, by replanting, though it will take generations to restore some of the glories that we have lost.
Mr. Simon Hughes: I join the Secretary of State in expressing condolences to those who have been bereaved and have suffered loss and thank him for his statement, both generally and inasmuch as it reflects the work done by local authorities and statutory services, which is appreciated by all.
Is the right hon. Gentleman able to give the House the minimum estimates that have been given to him of the cost to local authorities? Some figures have appeared in the public domain and I should like to know whether he has a figure that he can give to the House. Is the right hon. Gentleman aware that the Bellwin formula was devised
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before rate capping came into operation and that there are many rate-capped councils, including Brighton, which have suffered the worst of the devastation, along with many in inner London? Will he look favourably on applications for further grants for local authorities, bearing in mind that they are in the second half of the financial year and under considerable financial restraint that was not envisaged when the Bellwin formula was devised? These authorities may need both capital and current allocations.
I thank the Secretary of State especially for extending the grant assistance scheme in rural areas and in inner cities. It is often in urban areas that the natural environment needs the most protection and support.
Mr. Ridley: I cannot give the hon. Gentleman any sensible estimate of the revenue costs or capital costs of recent events. The figures that local authorities have been suggesting clearly include both elements, and may include also a few other things that should not be taken into account. It is impossible to give any estimates of costs until we have more information.
All authorities are, in effect, rate capped because once a rate has been fixed it is impossible to raise it. Rate-capped authorities, like other authorities that are not rate-capped, are under a duty to make provision for emergencies, and presumably prudent authorities—some of them are run by the Liberal party—have taken care to establish contingency funds for events of the sort that we are discussing. It would not be right to go back on those matters now. We shall aid any authority that incurs expenditure over and above the threshold, which takes care of the fact that this was an extraordinary and unprecedented event. This aid will be provided by extra grants.
I am grateful to the hon. Member for what he said about planting in inner cities. The damage to trees in our inner cities has been terrible, and I am pleased that the Government have been able to take special measures to give help to private individuals and to local authorities, which are the main owners of urban trees, to ensure that old tree roots that have to be grubbed out can be grubbed out and that new trees are available for planning. In all the circumstances, this is an unprecedented but fully justifiable step to take.
Mr. Michael Lord: My right hon. Friend will know that Suffolk has suffered as badly as any other county from the hurricane. We are grateful for the help that he will give in respect of tree planting, which is extremely necessary. Will he urge local authorities to do their best to advise those who have had their trees blown over in the gale, especially large mature trees, that the fallen timber may have some value? If they make a careful check, they will find that the value of the fallen trees will help to defray the cost of removal and will lead to the timber being put to sensible use.
Mr. Ridley: I am grateful to my hon. Friend. I acknowledge what he has said about trees. Many of the trees which have unfortunately been blown down have a considerable timber value provided that they are not cut into short logs. It will be important for those who have lost trees to try to preserve the trunks for the benefit of the furniture trade and for the benefit of their own pockets.
Mr. David Blunkett: Does the Secretary of State agree that non rate-capped authorities

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have the ability in the following year to restore the contingency or reserve funds that they have had to raid to meet the expenditure that will be incurred this year? Does he agree also that there is no logic in exempting authorities over a penny rate or districts over a 0·15p rate in meeting 25 per cent. of the expenditure, against the background of the penalty and clawback system, and not exempting the first penny, which in some cases, as my hon. Friend the Member for Copeland (Dr. Cunningham) has said, can amount to millions of pounds?
What will the right hon. Gentleman say to his supporters in places such as Hampshire who are asking why they should pay more than £1 for every £1 spent? They did not choose to do so at the beginning of the year when they drew up their budgets, and the damage to the environment will involve them in considerable expenditure. The right hon. Gentleman's absurd penalty and clawback system will force them to pay money to the Exchequer that should go to restoring their environment.
Mr. Ridley: As usual, the hon. Gentleman is wrong. Rate-capped authorities can adjust their budgets for the following year in the same way as non rate-capped authorities. Rate-capped authorities need to cut the rubbish from their budgets and get on with the real spending that is necessary. There is every justification for limiting Government assistance to expenditure over the threshold.
From time immemorial local authorities have provided for emergencies of all sorts, be it snow, flood, frost or gale, and it is only when the expenditure that they incur is above normal contingency provision that the Government have come to their aid. On this occasion we have come to their aid with more generous help than they would have expected under the Bellwin rules by not revaluing the penny rate for inflation and by giving an extra allowance for district councils as well as county councils. I expected the hon. Gentleman to give a greater welcome to my statement but I recognise that he has no constituency interest in this matter.
Sir David Price: Is my right hon. Friend aware that we in south Hampshire experienced the first blast of the hurricane and an effective partnership between all public services and we the amateur public, to which I feel insufficient attention has been drawn? Is my right hon. Friend aware also that the heat and burden of subsequent days has fallen especially on the Southern Electricity Board and its admirable linesmen, who have been out in all weathers, and not so much on the local authority? What is my right hon. Friend offering to the electricity boards, which I believe have a greater claim on the public purse than local authorities?
Mr. Ridley: I agree entirely with my hon. Friend that the co-operation and partnership that developed in the wake of the hurricane force winds was marvellous. I agree also that electricity supply workers have made a marvellous contribution to restoring power to millions of people whose supply was cut off. I, too, pay tribute to them. It is perhaps an example to local authorities that, as I understand it, the electricity supply industry, has decided that it should take the costs of restoration itself. It will not be specially rewarded for the great work and enormous cost that it has incurred in restoring supplies.
Mr. Tony Banks: Will the Secretary of State pay tribute to the direct labour
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organisations of London Labour authorities, particularly the London borough of Ealing? That authority was able to get its DLOs out by 3 am on Friday 16 October, when private contractors could still not be found. The DLOs made a sterling effort to clear up the damage caused by the storm.
Will the Secretary of State acknowledge that many London boroughs, particularly the Labour boroughs, have not the contingency reserves to deal with the problem that they now face? Will he tell the House what he calculates that the Government's contribution will be, if he has any figure in his head? Will he also tell us what his Department is doing to monitor closely the full impact of the storm on London boroughs, and whether he will be making a further announcement?
Mr. Ridley: I do not wish to play politics with what has been a national tragedy, as the hon. Gentleman has done. I pay tribute to both direct labour organisations and private contractors, and to individuals of all sorts who contributed to the relief of the distress of Friday morning. I do not wish to distinguish between them.
I have no idea of the ultimate costs. The Government have entered into a commitment to aid local authorities without a precise figure in mind, and I am sure that that is how the House would wish it.
We shall, of course, monitor the costs, on both the revenue and the capital sides, and when information on the likely cost of last Friday's events is available we shall give it to the House. At present, however, I cannot give any estimation of it.
Mr. Mark Wolfson: I thank my right hon. Friend for his statement, and welcome it as being of considerable help to the most hard-pressed authorities which have been the worst hit by the storm. However, I have considerable concern about his references to the contingency arrangements that he expects local authorities to have made in planning for problems of this nature. Does he appreciate that the amount needed is far beyond any normal expectations? Is he aware of the extent of the damage, and will he assure us that he is giving due attention to the prudent authorities that are dealing with a problem that is beyond any reasonable and sensible expectation?
Mr. Ridley: Prudent authorities—of which I am sure his is one — will have made some provision for emergencies. I believe that nearly all authorities make such provision. Where such provision has been exhausted by the nature and extent of the damage and its resulting costs, the Government are meeting all demand above the threshold that we have set with grant assistance at the rate of 75 per cent. That acknowledges that there has been an unprecedented and expensive event. I should have thought that my hon. Friend would consider that a proper partnership between local authorities—which are, after all, not creatures of the Government and which can and should make their own provision for emergencies—and central Government, whose proper role is to come to the rescue when costs are way beyond what could have been expected or forecast.
Mr. Dave Nellist: If the Secretary of State is serious about not playing politics with a national tragedy, will he have a word with those Tory Members who have sought in the past five days to make

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the Meteorological Office the scapegoat of that national tragedy? Will he arrange for the Secretary of State for Defence, who is responsible for the service, to point out that in the last 10 years 1,000 jobs have gone, that the staff are working with an old computer, and that there has been a reduction in ocean-going weather ships? Is the pressure of cost cutting and of shuffling staff around like a stage army to continue?
While a restoration of adequate manning levels in the Met Office would not prevent such a national tragedy from occurring again, it might improve the odds of more early warnings, so that local authorities and the people in the areas who have suffered would not have to go through the same experience. Will the right hon. Gentleman tell that to the Tory Members who have been playing politics during the past five days?
Mr. Ridley: I can make no comment about the Met Office. However, I understand from my right hon. Friend the Secretary of State for Defence that the Director-General of the Met Office, Professor John Houghton, has already instituted an internal inquiry into the weather forecasts made by the Met Office in the period preceding the storm. My right hon. Friend has today invited Sir Peter Swinnerton-Dyer, the chairman of the University Grants Committee, and Professor Robert Pearce, the head of the department of meteorology at Reading university, to consider the findings of the internal inquiry when they are available and to report their conclusions to him. My right hon. Friend will, of course, inform the House further as that inquiry proceeds.
Mr. Terence Higgins: I join in congratulating the emergency services on their rapid and effective response. I particularly welcome my right hon. Friend's proposals for the replanting of trees, which have been badly hit in coastal areas such as my own. But will my right hon. Friend cut through the financial jargon and make one point clear? If a prudent local authority has had to spend an extra pound on dealing with the crisis, is it true that it will have to spend—in the case of Worthing, anyway—an extra 40p with every pound because of withdrawal of grant? Can my right hon. Friend give an assurance that that will not happen?
Mr. Ridley: I agree with my right hon. Friend's tribute to the emergency services. But most local authorities have, or at any rate should have, budgeted for a certain contingency and taken into account the grant consequences of allowing that amount of contingency money to lie in their budgets. It is not a forfeit of grant if they have to expend what they have allowed. They may have made a gain in grant if they have had a fortunate year with no emergency, and thus no contingency money having to be spent. The Government's assistance starts over and above the threshold.
Mr. Harry Cohen: Is the Secretary of State aware that in my area, Waltham Forest, the local authority has already been notified of 700 dangerous structures, and trees have been destroyed in virtually every road in the borough? Does not the right hon. Gentleman's statement mean that the local authority will still be forced to pay out a significant sum towards repair? Does it not also mean, because of the paucity of the right hon. Gentleman's
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response and because the authority is rate capped, that paying for the storm damage will necessitate direct cuts in social services, housing and education being forced on the area?
Mr. Ridley: I do not know the cost of the work in the hon. Gentleman's borough, and I do not know how much is capital and how much revenue expenditure. However, I imagine that any prudent borough—I do not know whether that includes the hon. Gentleman's borough—will have put aside a certain sum to make allowance for such contingencies. I hope that the hon. Gentleman is not saying that Waltham Forest has made no contingency plans. That really would be an irresponsible thing to do.
Mr. Barry Field: I welcome my right hon. Friend's statement. However, hon. Members may think that the south of England bore the brunt of the storm: I leave them to imagine what happened to the Isle of Wight. We are running very short of roofing material and scaffolding. I draw my right hon. Friend's attention particularly to a decision made by the regional office of the Manpower Services Commission, as it used to be called, not to allow staff on community programmes to help in the clearing-up operations. I find that extremely frustrating, and I ask my right hon. Friend to take up the matter with the Secretary of State for Employment and seek an early clarification. The position is impossible with unemployed people on community programmes not being allowed to take part in this work.
I also ask my right hon. Friend to commission an early study to find out whether there is any relationship between the damage done to dwellings for which an improvement grant has been received and cases in which such a grant has not been received.
Mr. Ridley: I sympathise with my hon. Friend. The Isle of Wight has indeed had a very severe time. I shall certainly look into the point that he raised about the shortage of building materials and will take up the MSC point with my right hon. Friend the Secretary of State for Employment, who is responsible for such matters, and I shall ensure that an answer is sent to my hon. Friend immediately.
Several Hon. Members rose——
Mr. Speaker: Order. Patently it will not be possible to call every hon. Member who wishes to ask a question. We have another statement after this, as well as a series of Standing Order No. 20 applications, followed by two major debates. I shall allow questions to continue for a further 10 minutes; then we must move on. I ask hon. Members not to repeat questions that have been asked before, and to put their questions briefly. I also ask the hon. Members whose constituencies have been most affected to rise.
Sir Eldon Griffiths: While recognising the primacy of local authorities in tackling the problem, may I ask my right hon. Friend to cast his mind back to the last time that we lost many trees, through Dutch elm disease? There was created then a large voluntary effort called "Plant a tree in '73, and plant some more in '74." Will he seek to enthuse not only local authorities but businesses, schools and many people to get together and see that our old friends, the trees that have been destroyed, are replaced by voluntary effort as well as by local authority assistance?
Mr. Ridley: The significance of my announcement—that the Countryside Commission is to begin a major programme of tree planting and replacement — is considerable. It will provide an opportunity not only for the work to be done and to be grant aided but for it to be accompanied by a considerable publicity campaign. The total cost of the measures that I have announced for replacing trees, to be borne by my Department as opposed to that of my right hon. Friend the Minister of Agriculture, Fisheries and Food, could be as much as £3 million. That shows the measure of the Government's determination to provide the necessary funds.
Ms. Joan Ruddock: The Secretary of State seeks to rest his case on what is a prudent authority. In a national emergency of this kind, surely he should not be making a judgment about what is a prudent authority: he should be considering the needs of the people whose homes and environment have been damaged. My constituency lies within the London borough of Lewisham, and already we know of 400 damaged homes, of 500 trees that have been brought down and of 2,000 trees that have been damaged. There has also been dam age to pavements. That damage has been caused in an environment to which the Government have already agreed priority should be given — the inner city. Lewisham is putting its house in order and is trying to meet the Government's budget requirements. How will it be able to do that job with the kind of debt that it will further incur as a result of the measures that the Government have announced?
Mr. Ridley: I have no doubt that Lewisham is a prudent authority that has made provision for such events. I am delighted to be able to help Lewisham by grant-aiding the amount of the expense that is beyond what any prudent authority could have forecast.
Mr. Roger Gale: The admirable work that was carried out over the weekend by Kent county council, Thanet district council, Canterbury city council and the emergency services was augmented by the community, in particular by the farming community. Many of those who did most and who gave most are also those who have lost most. Some of that loss will be a matter for the Ministry of Agriculture and the Treasury. However, may I express to my right hon. Friend the hope that the response to this genuine emergency will be interdepartmental and that it will be swift, sympathetic and flexible? Will he assure the House that the worst fears that were expressed by the leader of Kent county council on the "Today" programme yesterday morning and on "Coast to Coast" last night are entirely unfounded?
Mr. Ridley: I think that my hon. Friend will agree that the Government's response has been swift, co-ordinated and flexible. We have covered all aspects of the matter in one statement. It is very early in the day for us to be able to present to the House such a comprehensive package of measures to help, and, as I have already said, if further can be done as more becomes known, further will be done. My hon. Friend was right to pay tribute to all the people in his area who gave so much help during the emergency.
Mr. Charles Wardle: My right hon. Friend has commended the excellent work that was done by the local authority emergency teams. Is he aware that some of those teams quickly ran out of essential equipment
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and supplies because of the enormity of the task that they faced but that they could not get hold of any central Government co-ordinator to pass on their requests to other parts of the country that were less badly affected? Does not my right hon. Friend think that there are important lessons about emergency co-ordination to be learnt from this unhappy experience?
Mr. Ridley: Many people and large amounts of equipment were moved rapidly across the country from areas where they were not needed to areas where they were. Many people came down from the north to help to repair electricity lines, and many pieces of equipment were passed from people who did not need them to people who did. The Ministry of Defence provided large amounts of equipment as well as manpower. The response of those who were luckily not affected by the storm in supplying help to those areas that were affected by it was magnificent. However, my hon. Friend has to remember that many of the roads and railways were blocked and that it was not always possible for people to reach the areas that they would have liked to reach.
Mr. Bernie Grant: Will the Secretary of State explain to the House how local authorities could have been expected to predict the hurricane when professional weather forecasters could not do so? Is he aware that the borough of Haringey inherited a number of parks — for example, Finsbury park — from the Greater London council that his Government abolished? The result is that the borough will incur additional costs in clearing up storm-damaged trees, costs that nobody could have forecast. Will he give the House a guarantee that any expenditure that is incurred in clearing up the damage or in planting new trees will not result in penalties?
Mr. Ridley: I agree with the hon. Member that nobody could have been expected to predict the hurricane. That is why the Government are grant aiding expenditure over and above the threshold of what it might have been prudent to set aside. The hon. Member may not have heard me say that the Countryside Commission will be able to grant-aid local authorities in replacing damaged trees to the extent of 90 per cent. as opposed to the present 50 per cent., and that that grant is to be extended into London and other urban areas. That has never been done before, and it will be of massive help to local authorities that are seeking to replace the trees that have been lost.
Mr. Ivor Stanbrook: Does my right hon. Friend agree that it would be quite wrong to penalise local authorities on account of additional expenditure that they have incurred exclusively for repairing hurricane damage? With regard to uninsured and under-insured losses that have been suffered by private individuals, does he not agree that the time has come for the establishment of a national disaster fund to which the Government ought to make a generous donation?
Mr. Ridley: The purpose of my statement today is to make it clear that the Government are not seeking to penalise authorities and that we are coming forward with help. As for the private sector, we have to think very carefully before departing from the normal practice that private individuals are responsible for insuring and repairing their own property. It would be right, I believe, for the Government to leave it at that.
Mr. Kenneth Warren: As my right hon. Friend knows, there were many tragic casualties, including people who were killed, in my constituency, and 75 per cent. of the houses have been damaged. May I thank him for the prompt response that his private office gave last Friday morning when it was asked for help, and may I ask him kindly to keep his door open? Although timber may be saleable at some time in the future, we have the problem of thousands of trees that simply cannot be moved. Will he kindly look at the enormous problem that is facing private householders, against which there is no insurance?
Mr. Ridley: I am grateful to my hon. Friend, and I can assure him that my door is always open, if he wishes to come and see me. There is no need to dispose of the mature timber that was blown down in the hurricane. It will keep for several years and it will not lose its saleability and marketability. If the market will not take immediately all the timber that has been lost, private individuals can keep some of the timber for later use.
Mr. Bruce Grocott: As the whole tone of the Minister's rather lofty remarks is that all local authorities should have a hurricane contingency fund, will he confirm that his own Department has set an example and that such a fund exists within his own Department? Will he also tell us how much money is in that fund?
Mr. Ridley: The basic premise of the hon. Gentleman's question was wrong. I said that all authorities should have a fund for contingencies. The point of the Bellwin scheme is that authorities receive help over and above that level when the costs exceed the threshold. The hon. Gentleman may be deliberately trying not to understand or hear. If that is the case, the second part of his question does not arise because he muffed the first part.
Mr. Teddy Taylor: Is the Minister aware that in Southend-on-Sea, where 25,000 houses have been damaged, the problem is the shortage of basic building materials? Can his regional housing officers play some part in co-ordinating the activities for making good the shortage? Will he say how on earth the EEC can contemplate offering help when it is overspending its legal budget for this year by £7 billion?
Mr. Ridley: At the time of the storms supplies of building materials were short, mainly because of the large amount of building that is taking place under the Government's housing and other programmes. Thus, there is a shortage of some building materials. I shall do all that I can to ensure that supplies are available to those who need to repair damage to their houses. The point about the European Community falls to my right hon. and learned Friend the Foreign and Commonwealth Secretary.
Several Hon. Members rose——
Mr. Speaker: Order. I am well aware of the frustrations of the hon. Members I have been unable to call. Almost every constituency was affected by the storm. I shall give hon. Members who have not been called priority when the matter is next discussed.
Dr. Cunningham: I urge the Secretary of State to reconsider what he has said. Of course local authorities should be prudent, but how can he expect an inner-city borough such as Greenwich to spend the product of a penny rate, £408,000, or, in the case of Lewisham, £385,000, and then spend its contingency reserve and pay penalty on that in the face of this totally unprecedented damage? Should not the Government be grant-aiding all of that expenditure? If local authorities should, as he urges, spend all their contingency reserves now, what will they do for the rest of the winter?
Mr. Ridley: The hon. Gentleman is continually urging on the Government the need to treat local authorities as responsible organs of government. Any responsible organ of government would make provision for contingencies. My right hon. Friend the Chancellor has a contingency fund. How else does the hon. Gentleman think that we accommodate the overspending of Labour local authorities, except out of the contingency fund?
Mr. Andrew Bowden: On a point of order, Mr. Speaker.
Mr. Speaker: I cannot take points of order now. I must take them at the proper time.

Flooding (Wales)
4.43 pm
The Secretary of State for Wales (Mr. Peter Walker): With permission, I should like to make a statement about the flooding situation in Wales.
Exceptionally high rainfall over last weekend resulted in extensive flooding over a large part of south-west Wales and localised flooding in north Wales. Further minor flooding has occurred overnight in north Wales. Several hundred properities were seriously affected by the floods. There has been widespread flooding of agricultural land, but livestock losses have been minor as flood warnings were given in sufficient time for stock to be moved to higher ground. Communications were disrupted but all trunk roads throughout the Principality are now open. A number of county roads remain closed. Electricity and water supplies were disrupted, but they are being restored as quickly as possible.
Hon. Members will be aware of the tragic train accident in which four people died. The preliminary indications are that the foundations of the bridge were undermined by floodwater. British Rail is conducting its own inquiry and my right hon. Friend the Secretary of State for Transport has ordered an inquiry under the Regulation of Railways Act.
I should like to pay tribute to the work of all those involved in local authorities, the police, the fire service, the water authority and other organisations.
The Government have already made it clear that local authorities, which bear the prime responsibility for dealing with the situation, will he assisted with the extra costs that they incur. All their extra expenditure above a threshold defined as 0·4 per cent. of grant-related expenditure will attract special financial assistance at a rate of 75 per cent. in accordance with the Bellwin scheme, which was drawn up in 1983 in consultation with the local authority associations, including those representing Welsh local authorities. Extra expenditure above the threshold will be excluded from calculations of authorities' total expenditure to ensure that they do not suffer a loss of grant as a result of the unforeseeable extra costs with which they are now faced.
I am sure that the whole House will wish to express its sympathy to the relatives of those who have been tragically killed as a result of this flooding and to all those whose homes have suffered.
Mr. Alan Williams: I thank the Secretary of State for coming to the House and making the statement. On behalf of the official Opposition I express our sympathy to all those who have suffered as a result of the flooding and we particularly offer our profound condolences to the stricken familes of those who died so tragically.
Like the Secretary of State, I should like to express our thanks and offer our congratulations to the military and civil authorities that responded so magnificently to a crisis that developed rapidly over so widespread an area.
I have welcomed the statement today, but it is three days since the flooding occurred. It is only today, at official level, that the Welsh Office is clarifying the financial position for councils. During those three days those councils and relief organisations have been making decisions involving spending not by the hour but by the
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minute. They have had to make those decisions in a vaccum. Late on Monday we had a general indication that the Bellwin formula would apply. But until now the councils have not known how far their extra spending would affect their liability to Government penalties for overspending. Therefore, will the Minister confirm and clarify one or two points? In the past, although there is talk of the Government meeting up to 75 per cent. of the cost, in similar situations, because of the way in which the Bellwin formula has operated, councils have had to meet two thirds of the bill of disasters. Does he recognise that that would be a penal cost to some of our poorer local authorities in Wales?
Will the Secretary of State confirm that what he said in his statement is not quite correct? I am sure that he did not intend to mislead anyone when he spoke of all expenditure over the threshold. Will he confirm that there is not an absolute commitment by the Government to 75 per cent. of the cost over the threshold? There is only a commitment to entertain claims, but those claims are judged, and must be judged, against the Bellwin criteria, which are vague and which mean that it will be a long time after decisions have had to be taken that the councils will know whether they have qualified for grant.
Councils need to be as sure as possible of the ground rules as soon as possible. Will the Secretary of State clarify a further two points that have been put to me on behalf of the councils today that underline the fact that they are unsure of these points? Will councils be safe from penalties not only in relation to the initial threshold rate that they will have to spend, but also on the 25 per cent., which I am sure is what the Secretary of State intends? Further, because of the uncertainty about the way in which the Bellwin criteria will operate, will they be safe from penalty in respect of any further necessary costs which were genuinely incurred by them at the time but which are eventually judged to be outside the Bellwin formula? The Secretary of State should understand that that is very important for some local authorities that are particularly involved in the present crisis in Wales. It is important for them that there should be no uncertainty about the penalty situation.
The Secretary of State will be aware that south Pembrokeshire stands to lose £240 of Government grant for every £100 of spending that it accidentally makes outside the Government's criteria. Preseli stands to lose £107 of Government grant for every £100 that it inadvertently spends outside the Government's criteria. It is not merely a matter of semantics; it is a real and serious problem.
In those circumstances, does the Secretary of State not consider it appalling that as recently as lunch-time today the Welsh councils that are directly involved in this relief operation and the Welsh Office still seem to be confused about the Government's intentions? I suspect that the right hon. Gentleman's Department did not want him to be aware of the fact that throughout the three days councils have received conflicting advice—which is worse that -no advice. I am sure that the right hon. Gentleman will deplore that as much as I do. At 12.20 today the treasurer for an authority covering one of the worst affected areas, part of which is still under water, received the third version of the threshold figure for his authority from Welsh Office officials. Is the Secretary of State aware that the versions differed by as much as £100,000? At one time the treasurer to whom I referred was told that his authority might be

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responsible for a 3p rate before it received assistance from the Government. Subsequently he was told that the figure had been downgraded to 0.5p. He was given three conflicting versions in 24 hours.
If the system is so complicated that the Welsh Office cannot get it right, what hope have the councils had in the last three days when they have had to make spot decisions? At official level the Welsh Office has been a shambles. Perhaps it is just as well that the local authorities and not the Welsh Office had to deal with the flood crisis.
I welcome the extra money provided to help the worst-hit areas, but those areas will still be hard pressed to meet the remaining share of the cost of the flooding.
The system was devised in 1982. By now the Government should have devised a scheme which could be announced immediately an emergency strikes and which can be easily understood not just by the councils, but by the Government themselves.
Mr. Walker: I welcome the right hon. Gentleman's expressions of sympathy for the sufferers. They will be shared by hon. Members on both sides of the House. The right hon. Gentleman criticised the Welsh Office. I do not praise myself but I do praise officials at the Welsh Office, who set up the co-ordinating machinery. They worked 24 hours a day, and appreciation has been expressed in all parts of the country for the advice and guidance that they have given. I deeply resent the suggestion that those officials represent a shambles. The only case that the right hon. Gentleman cited was of a local authority querying its threshold. Some official probably made a guess and then corrected himself. I totally praise those officials and I hope that the House will do the same.
The flooding took place over the weekend and on Monday evening it was announced that a scheme which had been negotiated with the Welsh local authorities would be introduced. It is a new scheme. The Welsh local authorities were not ignored when that scheme was drawn up and they know its details. As soon as the size of the problem was known I went to my colleagues in the Cabinet and they agreed that we should make an immediate announcement that the emergency would come under the Bellwin scheme.
The right hon. Gentleman is critical of the speed at which the announcement was made. He should look back to the emergencies when he was a Minister, to the severe weather conditions in 1977–78 and 1978–79. There was a longer delay before an announcement was made and no known scheme was available. People complain about our lack of generosity, but when the right hon. Gentleman was in power the scheme operated involved 75 per cent. of additional expenditure above a threshold defined in terms almost identical to those which are being used now. The generosity of the Labour Government scheme in similar conditions was somewhat slower, less understood but of the same dimensions.
I shall send all local authorities a detailed letter describing the Bellwin rules and we shall answer any queries from local authorities.
Mr. Keith Raffan: I thank my right hon. Friend for his statement and I join in his praise for the emergency services, the local authorities and the admirably prompt action by his officials at the Welsh Office.
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Is my right hon. Friend aware that one of the main practical problems involves the division of responsibility? Will he review the maintenance of water courses to make it clear who is responsible so that necessary remedial action is not delayed by disputes between county, borough and water authorities?
Mr. Walker: Yes. I welcome my hon. Friend's remarks. I should like him to give me examples of any problems in his constituency and I shall look into them to see whether lessons can be learnt.
Mr. Dafydd Wigley: I associate my party with all the remarks about bereavement and I thank all those who worked so hard. My constituency contains places such as Criccieth, Pentrefelin, Llanberis, Cwmyglo and Rhostryfan which were flooded. I welcome the Secretary of State's response and his visits to Wales this week.
May we clarify the details of the compensation? For example, if costs run over to 1988–89, will they be covered, particularly if there are capital implications such as bridges collapsing and requiring capital expenditure? If further tragedies or bad weather occur this winter, will they be covered by the Bellwin definition and will local authorities again have to meet the first tranche of expenditure? Will the Secretary of State organise a review of the emergency services to ensure that they have adequate equipment to respond quickly?
Mr. Walker: If a bridge is weakened as a result of the flooding we shall have to consider what happens on a case-by-case basis. A bridge might be scheduled for strengthening and so it would not qualify. I shall consider any long-term capital problems that arise. I do not know whether another penny rate will be involved if a second emergency arises. I shall check on that and let the hon. Gentleman know.
One must learn lessons from such incidents. On my visits I was very impressed by the speed and co-ordination of the emergency services. Co-ordination at Welsh Office and local authority level is important. I was impressed with the way in which local authorities took action so quickly. I am also full of praise for a group of individuals who are not often praised. I talk of the people involved in services such as the helicopter pilots from the Army Flying Corps who did a remarkable job visiting farms to ensure that everything was all right.
Mr. Nicholas Bennett: I thank my right hon. Friend for congratulating the emergency services. I was in my constituency on Sunday when the flooding was at its height. The fire brigade acted in a most admirable manner, pumping out private buildings and shops and helping to relieve distress. The RAF Brawdy search and rescue helicopters, which are under threat of being removed from the area, also did excellent work in rescuing farmers and livestock.
I should also like to pay tribute to the amateur radio enthusiasts who set up a radio link with the neighbouring constituency of Carmarthen in the Pembrokeshire district council offices. It was the only communication link at that time and local authorities were thus able to co-ordinate their action.
I spoke to my right hon. Friend on Monday about my next question. I refer to the A40 at Haverfordwest, which is the subject of a major road scheme. There is some

747
question that, because of the scheme, the water course of the river Claddau has been altered dramatically and that that may have caused the flooding. How are the inquiries going on that matter?
Mr. Walker: I appreciate that that last matter is of considerable concern to my hon. Friend the Member for Pembroke (Mr. Bennett) and his constituents. I believe that the nature of the flooding in the area was different from what had taken place in previous circumstances. Therefore, examination must be made by the water authority as to what, if anything, affected the area in a particular way when the flooding took place, I have consulted the chairman of the water authority on this matter and action is being taken to see that that examination takes place.
I note with interest the point my hon. Friend has made about people using amateur radio links. I was asked whether there would be a review of the emergency procedures and I believe that there are lessons to be learnt. For example in Carmarthen, where the telephone exchange was immediately put out of operation due to the flooding, there were considerable problems with regard to emergency calls and the telephone services. We shall have to consider methods whereby such calls can be effectively delivered to the emergency services when such incidences occur. In Carmarthen, the local radio experts were of considerable help to the police.
Mr. Donald Coleman: The right hon. Gentleman will be aware that it was not only flooding that caused problems during the weekend's heavy rain. Has the right hon. Gentleman been advised of the damage that has been done at Panteg in the Swansea valley as a result of the mountain slippage caused by the heavy rains? Will the Secretary of State consult the Lliw Valley borough council and other local authorities in Wales that have to contend with difficulties and slippages of this nature with a view to drawing up legislation that will enable local authorities to take early action in respect of these dangerous geological conditions? Will the damage at Panteg attract Government assistance as a means of helping to resolve that problem? Finally, I pay tribute to the work of the people at Swansea Sound and BBC Radio who alerted people to what was happening at the weekend.
Mr. Walker: I am grateful to the hon. Gentleman for mentioning his thanks to the media for conveying the flood warnings that, I am glad to say, the water authority gave in good time. Had those flood warnings not been given, many more cattle, sheep and perhaps people would have been injured. With regard to the mountain slippage, I cannot give any assurance about payment, but I promise to look into the matter immediately and consult the local authorities. I shall let him know the outcome.
Mr. Richard Livsey: I thank the Secretary of State for his statement and, on behalf of my party, may I extend sympathy to those who have been affected by this great tragedy.
I believe that it is the elderly as well as the farming community and those in business in certain parts of Wales who have been most affected and suffered grievously as a result of this flooding.
Will the Secretary of State consider especially the problems of those areas most affected in Dyfed and
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Gwynedd and ask himself whether the Bellwin formula is adequate when those authorities are already in extreme difficulties with their budgets?
Secondly, as regards the Glanrhyd accident and the tragic loss of life, will he pressurise British Rail and his right hon. Friend the Secretary of State for Transport to ensure that the bridge is replaced at the soonest possible moment because the possible closure of the central Wales railway line will have severe effects on the economy of central Wales? Will the Secretary of State ask the Welsh water authority what research it has done, subsequent to the flooding, because six inches of rain fell in the area of Llyn Brianne? It should consider whether some of the flooding in the Towy valley was a result of excess water coming from the Llyn Brianne dam.
Mr. Walker: I shall study, together with the water authority, its detailed examination of what has taken place. The rainfall was incredible when one considers that in 25 hours more rain fell than normally falls in the month of October. Therefore, substantial problems were bound to arise. From my point of view, one of the most interesting things has been discussing with the water authority where it was disappointed in the sense that it had carried out flood prevention work but floods had still occurred, and also where that flood prevention work had succeeded. I am pleased to say that, in many locations where the authority had carried out important work, such work succeeded. In those places where the prevention work was not successful, it was due to the degree of flooding and the downpour. However, I shall raise the hon. Gentleman's question with the water authority.
With regard to the repair of the bridge, I shall certainly convey to British Rail the importance of the line to a range of people in Wales. Having seen what was going on yesterday, it is obvious that a great deal of work has been carried out immediately to deal with the train and the totally collapsed bridge. I am afraid that there is unlikely to be a quick solution when one considers the size of the problem, but I agree that it should have a high priority.
With regard to the existing formula, I agree that when a scheme is put into operation any Government must consider how effective it is. A great deal of work went into creating the formula, in close consultation with local authorities, including the Welsh local authorities.
Mr. Donald Anderson: Does the Secretary of State intend to apply to the EEC disaster fund as there are good precedents for assistance with flood damage? Further, with regard to the Glanrhyd bridge disaster, does the Secretary of State believe that the repairs should be borne wholly out of British Rail's resources, or are there special contingency funds available from central Government for the repair of that bridge?
Mr. Walker: On the hon. Gentleman's latter question, I cannot be certain but I would guess that that repair would be part of the overall operations of British Rail. I am not responsible for British Rail, but I would guess that, as a result of the spread of the risks throughout the United Kingdom, British Rail is self-insured for hazards and risks such as the bridge disaster. In terms of capital investment of that description, when compared with the whole of its capital investment programme and its current position, I do not believe that the repair of the bridge wil be a major problem to British Rail.

749
As regards the EEC disaster fund, I gather talks have taken place between the Foreign Office and the European Commission about the availability of such grants and I presume that some conclusion will be reached.
Mr. Alan W. Williams: May I ask the Secretary of State to instruct the Welsh water authority to look again at its flood prevention scheme for Carmarthen? In 1979 we had a massive flood in Carmarthen — the worst in living memory and the worst for 100 years. Following that flood, the Welsh water authority set up a flood prevention scheme and invested about £600,000 in various defences. We were told then that that scheme would cover a flood as bad as 1979—we did not expect such a flood for another 100 years. However, within eight years that flood has occurred.
In particular, the Welsh water authority should look at the southern bypass and its big embankment that acts as a dam holding water back. It should consider a new bridge for Carmarthen at the eastern bypass. As the hon. Member for Brecon and Radnor (Mr. Livsey) has already said, there is concern about what happened at Llyn Brianne during the course of Sunday night. Llyn Brianne is a massive reservoir at the head of the Towy and it was discharging enormous volumes of water. At this time of the year, no reservoir should be full, but it is clear that that reservoir was discharging enormous volumes of water. Will the Secretary of State ask the water authority to look into these matters?
Mr. Walker: The hon. Gentleman will be aware that I visited his constituency yesterday with the chairman of the Welsh water authority. Since 1979, that authority has spent £650,000 to try to improve flood prevention. Given the circumstances of the 1979 flood and any flood in the past 100 years, that prevention work was, in the authority's view, totally effective. Unfortunately, the scale of the recent flood was unprecedented. When I spoke to some of the hon. Gentleman's constituents yesterday, some of the more elderly constituents told me about the flood of 1930 as well as the 1979 flood. All were in agreement that the problems associated with the recent flood were greater than any could remember.
As the hon. Gentleman has said, the nature of that flood prevention was the building of a wall which now acts as a dam. I am told that when the river level falls further, it will be automatically drained from there but the present levels have created a dam. I am sure that the water authority will review the situation and consider whether there are lessons to be learnt. I discussed with the engineers and the chairman of the water authority all the known criteria of 1979 and the prevention methods they used were sensible and correct. They did not take into account the freak flood of the dimensions that took place. Obviously when something as tragic as this has taken place, full examination must be made to consider whether any lessons should be learnt.
Mr. Alun Michael: Does the Secretary of State accept that the wine of generosity that has been poured out on previous occasions by his predecessors has turned to vinegar on the tongue on many occasions because of the way in which detail has been treated a long time after the event? For instance, elements of expenditure have been argued one way and another over
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a long period, which makes it difficult for local authorities to know where they stand. Does the right hon. Gentleman accept that the much greater and tighter controls on local authorities nowadays make that even more important and difficult to cope with? Will he seek to arrange a way of making sure that things are as clear as possible as soon as possible, and ensure that things are not passed from one local authority to another because of the knock-on effect of decisions in Wales?
Mr. Walker: I understand what the hon. Gentleman says. Before I send the letter explaining in detail how the scheme operates I shall urge local authorities, if they are in doubt about any form of expenditure, to consult officials in my Department so that quick clarification can be given.
Mr. Alex Carlile: When the Secretary of State is pondering the lessons taught by the severe weather for the future, will he ask his officials to examine the extent to which trunk roads and other major roads in Wales, especially mid-Wales, were flooded? Will he bear it in mind in particular that the A483 road on either side of Welshpool and the A487 at Dyfi bridge flood in far less severe weather than in the past few days? The floods were simply worse this time. Will the right hon. Gentleman seek solutions to the persistent flooding that occurs on those roads and severely disrupts industry in mid-Wales?
Mr. Walker: I can undertake only to look into the problems that the hon. and learned Gentleman has drawn to my attention and see whether there are solutions to them. From a previous incarnation, when I was Secretary of State for the Environment, when transport came under that Department, I know that there are problems of road flooding that are impossible to solve without gigantic expense. Because of cost-effectiveness, on occasions flooding cannot be avoided. I shall certainly look at the two cases mentioned by the hon. and learned Gentleman.
Mr. Ieuan Wyn Jones (Ynys Môn): Will the Secretary of State clarify the position for some riparian owners following my discussions with Welsh water authority officials? They have explained that their responsibility in many cases is for the beds, not the banks of rivers. Riparian owners, whether private individuals or companies, are responsible for repairs to what, in some cases, can be described only as severe structural damage. There is always the possibility of insuring against that risk, but is the Secretary of State aware that some of those people have been flooded so often this year that certain insurance companies are not prepared to insure them against that risk? Will he explain to the House whether it is possible to find resources for those people if it can be shown that there has been severe structural damage and they have been unable to insure themselves against such damage?
Mr. Walker: If someone finds that he is uninsured against such a risk, in principle it is unlikely for the Government to take on that risk on his behalf. However, if the hon. Gentleman can give me specific examples of where that is a problem, I shall look into them.
Mr. Rhodri Morgan: In his discussions with the chairman of the Welsh water authority during his tour, did the Secretary of State discover whether the Llyn Brianne was fuller than it should have been and, when the five inches of rain fell in the head waters of the river Towy, whether it could not hold back the head waters and thus

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allowed a greater rush of water down the river Towy, knocking out the bridge at Glanrhyd? Was the rush of water greater than might have been the case had the Llyn Brianne had the spare capacity to hold that five inches of rainfall?
Mr. Walker: I did not discuss that with the chairman of the Welsh water authority. If it had been the case, it would have been mentioned as a factor in the briefings and reports that were given to me by the water authority. As the hon. Gentleman has raised the matter, I shall immediately have it raised with the water authority and let him know the position.
Mr. Roy Hughes: Does the Secretary of State appreciate that we in the Labour party recognise the splendid efforts of the emergency services? However, as my right hon. Friend the Member for Swansea, West (Mr. Williams) stated, there has been unnecessary concern and anxiety over the past three days because of the Welsh Office's indecisive attitude over the financial support that is to be made available to alleviate all the damage that has been caused. It is still not clear whether local authorities are to be penalised for expenditure that is incurred but is subsequently deemed to fall outside the Bellwin criteria. Will the right hon. Gentleman clear up that point? Does he further appreciate that positive and genuine financial support is needed for our local authorities, and particularly for individuals whose homes have been wrecked and who are in poor circumstances and on social security?
Will the right hon. Gentleman remind his Cabinet colleagues that he is dealing with impoverished south Wales, which should be dealt with differently from the prosperous south-east of England? What about the bridges in Dyfed alone—1,400 of them? A pre-flood inspection showed that it would cost £12 million to bring them up to standard. Surely a revised figure now would be far higher. Does the right hon. Gentleman agree that more stringent precautions are necessary following the Glanrhyd bridge tragedy? I should like to add my sympathy to the relatives of those who so tragically lost their lives. What steps are being taken in conjunction with British Rail to ensure the speedy reopening of that important rail link, which is the lifeline of mid-Wales?
Mr. Walker: On the latter point, British Rail is putting all its resources into clearing away the debris. It will then restore the service as quickly as possible. I am sure that it recognises the importance of that service to mid-Wales. The inquiry will take place under the Regulation Railways Act. I am sure that the facts of the tragedy will be made known when the report of the inquiry is made public.
The hon. Gentleman referred to speed. I defy him to find another case such as this. Serious flooding took place on Sunday night primarily and through Monday morning, and on Monday evening the Government announced the financial services that would be made available. It is absurd to make criticisms. We have heard the cry,. "Shouldn't you have bigger grants for impoverished south Wales than for London and south-east England?" Even if there was a case for that, such a case was never conceded by the previous Labour Government when they gave similar grants to similar local authorities.

Redbrook-Woolley Collieries Complex
5.18 pm
Mr. Allen McKay: I beg to ask leave to move the Adjournment of the House. under Standing Order No. 20, for the purpose of discussing a specific and important matter that should have urgent consideration, namely,
"the proposed closure of Redbrook-Woolley collieries complex."
The matter is specific because it relates to British Coal in general and to my area in particular. It is urgent because of the loss of 1,300 jobs.
The complex came into being during the past six years. North Gawber colliery disappeared. Levels of management were placed at either end of the complex. Woolley colliery is in the constituency of my hon. Friend the Member for Wakefield (Mr. Hinchliffe), who will make his maiden speech today if he catches your eye, Mr. Speaker, and will probably refer to it in more detail than I can in my application.
While the complex was coming into being, manpower was run down, surface installations were closed, and Dodworth colliery was closed. The men travelled via Redbrook. Almost 1,000 jobs were taken out and £20·;million was spent in Redbrook on deepening, sinking and widening shafts. Surface installations, showers and lockers, car parks and lamp rooms were built. The trade unions co-operated fully with the management in that. The material travelled underground to a new huge washer that cost £46 million.
Originally, the collieries of Caphouse, Emley Moor, Dodworth, Newmillerdam, North Gawber, and Bullcliffe Wood were included in the project. However, I accept that orders change as do systems, but it must be asked why, after six and a half years, when the paint is hardly dry, this has come about. We now have only three collieries in the area, Denby Grange, Calder and Park Mill. The total cost of refurbishment was about £150 million. We have the best mining engineers and the best miners in the world and we have to ask why this has happened. More importantly, what will happen to the capital cost of the project? Will it be spent on the existing collieries, because if it is not they will close.
I am seeking the debate so that we can look at the area, consider the capital cost and examine how, by working with the board and the union in a positive way, we can save the collieries under threat of closure and ensure that all existing collieries survive.
Mr. Speaker: The hon. Member for Barnsley, West and Penistone (Mr. McKay) asks leave to move the Adjournment of the House, under Standing Order No. 20, for the purpose of discussing a specific and important matter that he believes should have urgent consideration, namely,
"the proposed closure of Redbrook-Woolley collieries complex with the loss of 1,300 jobs."
I can well understand the impact that the closure will have on the hon. Gentleman's constituency, but I regret that the matter he has raised is not appropriate for discussion under Standing Order No. 20 and that I cannot submit his application to the House.

SBG Engineering Ltd. (Closure)
5.22 pm
Mr. Dennis Canavan: I beg to ask leave to move the Adjournment of the House, under Standing Order No. 20, for the purpose of discussing a specific and important matter that should have urgent consideration, namely,
"the proposed closure of SBG Engineering Ltd. workshops in Falkirk in my constituency."
The matter is obviously specific and it is important because it involves 150 skilled jobs in Falkirk district where about 10,000 people are already out of work. The matter deserves parliamentary attention because SBG Engineering Ltd. is a publicly owned company. It is part of the Scottish Transport group, which is accountable to the Secretary of State for Scotland who, in turn, is supposed to be accountable to the House. Furthermore, the reason for the proposed closure is the failure of the Government policies on public transport, particularly inadequate Government support, the deregulation of bus services and the threat of privatisation.
A couple of years ago I led a delegation to Michael Ancram, alias the Earl of Ancram, who was then the Parliamentary Under-Secretary of State for Scotland. We warned him then that the Government's policies would lead to a disastrous reduction in public transport services and a disastrous reduction in job opportunities within public transport. However, he would not listen to us. [Interruption.] He lost his job at the general election but, more tragically, his policies are threatening the jobs of 150 of my constituents.
Deregulation and the threat of privatisation have meant masses of cutbacks in the size of the Scottish Bus group fleet and, therefore, an alleged over-capacity in the engineering operations that service that fleet. For some
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inexplicable reason, SBG Engineering Ltd. has picked on the Falkirk workshops for closure despite the fact that I have been given evidence that the Falkirk operation is the most profitable of all the SBG Engineering Ltd. workshops in Scotland. I have been given important information today showing that the Scottish Bus group has been giving engineering work to the private sector. That work could have been done adequately by SBG Engineering Ltd., which is its sister company in the public sector.
I have taken up the matter with the Secretary of State for Scotland but, so far, he has failed to reply to my letter. I have also taken the matter up with Mr. Ian Irwin, the chairman of the Scottish Transport group. He has failed to answer some of the pertinent questions I put to him about the proposed closure. That information is vital to the work force in its battle to save jobs. I tried every means at my disposal to pursue the matter during the parliamentary recess, but without success. Therefore, on behalf of my constituents, I urge you, Mr. Speaker, to allow this important matter to be debated on the Floor of the House.
Mr. Speaker: The hon. Member for Falkirk, West (Mr. Canavan) asks leave to move the Adjournment of the House, under Standing Order No. 20, for the purpose of discussing a specific and important matter that he believes should have urgent consideration, namely,
"the proposed closure of SBG Engineering Ltd, workshops in Falkirk."
I have listened with concern to what the hon. Gentleman has said about the proposal to close the workshops in Falkirk. Now that the House has resumed I hope that the hon. Gentleman will find other methods of raising the matter, but I regret that it is not appropriate for discussion under Standing Order No. 20, and I cannot submit his application to the House.

Whitley Hospital, Coventry
5.25 pm
Mr. Dave Nellist: I beg to ask leave to move the Adjournment of the House, under Standing Order No. 20, for the purpose of discussing a specific and important matter that should have urgent consideration, namely,
"the decision by the health authorities of Coventry and the West Midlands to close Whitley hospital in Coventry."
The decision on closure was taken last Wednesday at the regional health authority meeting in Birmingham. It was taken despite lobbies and delegations to that and other meetings in which, with the staff at the hospital, the health trade unions in the city and the patients relying on the services, I was involved. It was also taken in spite of a petition of 44,000 signatures. It is the largest petition in the history of Coventry and has been signed, so far, by one in seven of the city's population.
The matter received barely 10 minutes at the meeting last Wednesday. It was considered by a body of people who, in most cases, had not had the documents relating to the closure for more than 48 hours.
Whitley provides essential National Health Service facilities for the elderly in Coventry and the closure ends long-term care by the NHS of the frail, elderly in Coventry. Seven years ago Whitley was targeted for development as Coventry's second district hospital and was to be up-graded to 500 beds. Four years ago it was redesignated as a site for development and a centre of excellence for rehabilitation services. Those detailed plans have been quietly buried as the financial crisis in the NHS, locally, regionally and nationally, has escalated. Coventry is under-funded by £1·5 million this year.
The proposal is to sell Whitley hospital to private enterprise. That will cut the NHS budget in Coventry but it will cost the Department of Health and Social Security as much, if not more, in other forms of subsidy. It will cut
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NHS facilities by 200 beds and will lead to either job cuts or a reduction in wages and conditions of service for those who remain in employment.
Privatising an NHS hospital for the elderly gives credence to the comments of the chairman of the regional health authority who has said, in relation to the provision of hospital services, that there is some evidence to suggest that young people should count as a priority. That has been backed up by a junior Health Minister, now sitting on the Treasury Bench, who said:
"Those who do not get priority always raise objections but I believe this idea deserves serious consideration."
That Minister should speak to the people of Coventry such as the parents of incontinent, handicapped children who have been told this week that their allocation of free NHS incontinence pads is to be reduced from six to two a day, robbing those kids of their dignity. The Minister should speak to the cancer patients in Birmingham who have been told in recent weeks that the NHS is full up. The closure of Whitley hospital further illustrates the fact that the Health Service is not safe in the Prime Minister's hands. In her opinion, her hands and legs were not safe in the Health Service. My constituents do not have the money to use private medicine and we need Whitley hospital. The House should debate the matter.
Mr. Speaker: The hon. Member for Coventry, South-East (Mr. Nellist) asks leave to move the Adjournment of the House for the purpose of discussing a specific arid important matter that he believes should have urgent consideration, namely,
"the decision by the health authorities of Coventry and the West Midlands to close Whitley hospital."
I well understand the hon. Gentleman's strong feelings, but I regret that I have to give him the same answer as I gave to his hon. Friend the Member for Falkirk, West (Mr. Canavan). The matter is not appropriate for discussion under Standing Order No. 20 and I cannot submit his application to the House.

Palace of Westminster (Security)
5.28 pm
Mr. Jeremy Corbyn: On a point of order, Mr. Speaker. I wish to raise what I consider to be a serious point of order concerning the vetting procedures operating in this House for staff employed by hon. Members.
In August of this year I appointed Mr. Ronan Bennett as a temporary research assistant and, after application, a pass was issued to him to enable him to enter this building. One week later a disgraceful story appeared in the News of the World which attacked Mr. Bennett and me. After that, a story appeared in the Sunday Times claiming that his pass had been suspended and that he would no longer be admitted to this building. On the following day I received a letter from you, Mr. Speaker, saying that his security pass had, indeed, been suspended and that it should be returned to the office.
I understand that, on security advice, Mr. Bennett has been declared unacceptable to be issued with a pass to enter this House. I wish to make it clear that Mr. Bennett had one conviction against him quashed in 1975 and, following a three months trial in 1978, a case against him was dismissed and he was acquitted. There are no convictions against Mr. Bennett — he is an innocent man.
Mr. Bennett is employed by me to investigate miscarriages of justice in this country. I wish to know under what powers his pass to enter this building has been withdrawn. His character has been smeared and his employment prospects damaged through statements by the security services. None of those statements has been made public. No evidence against Mr. Bennett has been offered to him, to me, or, as far as I am aware, to many other people. Therefore, there is no way that he can rebut the allegations; he knows only that there are such allegations and that there is no appeal against them. A basic miscarriage of justice is taking place in front of our very eyes. There is no appeal against an accusation made against Mr. Bennett, which is obviously very damaging to him.
It is a transgression of democracy to allow security services to decide, on the basis of unpublished information or opinion, who should or should not enter this building. Do you agree, Mr. Speaker, that if we allow such a proceedure for the vetting of hon. Members' staff to proceed it removes from this House and hands to unelected, unaccountable security services the power to decide what should happen in this House? Hon. Members are elected to represent their constituents; they are not elected to be prevented from carrying out their work by the security services acting in secret and smearing someone's character in this way.
I would like you, Mr. Speaker, to state now under what powers you have ordered the withdrawal of Mr. Bennett's pass and what action can be taken now to protect the rights of constituents who elect Members of Parliament to represent them and to employ those whom they think fit to carry out their duties on their behalf.
Sir Eldon Griffiths: Further to that point of order, Mr. Speaker. Is it not the case that an all-party Committee of this House as recently as 1984–85 considered very carefully the problem of large numbers of
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research assistants gaining access to the Palace? Is it not also the case that that Committee, on which distinguished hon. Members from both sides sat, reached the conclusion that the onus of ensuring that the rare, undesirable appointees should not come here rested with the hon. Member himself, and further and precisely that the hon. Member should not
"pursue the application in the face of an adverse (and confidential) report on the security status of the applicant"?
Am I not right in saying that those were the views of an all-party Committee of this House? Although its report has yet to be debated, I am sure that you wished to bear those conclusions in mind in reaching your decision.
Mr. Tony Benn: Further to that point of order, Mr. Speaker. Of course, the recommendation referred to by the hon. Member for Bury St. Edmunds (Sir E. Griffiths) has not come before the House and no authority has been granted by a Select Committee, whose report has not been discussed, giving such powers to you, Mr. Speaker. This is not the moment to debate the matter, but it is important that certain facts should come out, and I wish to put some questions to you. When was the request made to you, and by whom? Who carries out the vetting? Under what authority did you act? Those are the central questions, rather like the Zircon case that went to the Committee of Privileges.
In addition, does the vetting apply to the staff of the House of Commons? I believe that it does. Does it apply to journalists? Is every Lobby correspondent vetted before being allowed to come into the House? Does it apply to visitors? I understand from my hon. Friend the Member for Islington, North (Mr. Corbyn) that there is no objection to the gentleman in question attending the House as a visitor, although evidently he cannot come here to work. Does it apply to Members of Parliament? One hon. Member who has not taken his seat — the hon. Member for Belfast, West (Mr. Adams) — would certainly incur the displeasure of the security services, even though he has been elected to this House.
The point that I wish to draw to your attention, Mr. Speaker, is that your decision has enormous constitutional importance, far beyond the question whether a person has been badly used. However, anyone in such a position would find it impossible to obtain employment because it would be said, "Mr. Speaker has said he is a security risk, because by withdrawing his pass he has tried and convicted the man"—[Interruption.] I put it to you, Mr. Speaker, that that is how any employer would regard your decision. That man has not been tried in this matter and he has been acquitted of all other charges, yet he has been told that he is not regarded as a safe person to advise an elected Member of Parliament. In the end, the rights involved are not those of a research assistant—no one has the right to be a research assistant — but those of an elected Member to employ whom he wishes to advise him in serving the constituents who elected him.
I cannot imagine a graver case than this. I ask whether you, Mr. Speaker, would be so kind, at an appropriate moment, to answer my questions and to arrange for a debate so that the House can consider whether it wants to reverse the decision of Speaker Lenthall when the five Members were demanded by the King on the ground that they were a security risk. I believe that exactly the same principles apply in this case.
Mr. Robin Maxwell-Hyslop: Further to that point of order, Mr. Speaker. It might be helpful to the House if we did not spread this point of order further than the point on which it was raised. The right hon. Member for Chesterfield (Mr. Benn) has put to you a proposition that was not part of the original point of order. Whatever the original complaint may be, it is not about who hon. Members may or may not employ as research assistants. The question is confined to access to this House, for whose security you are responsible, Mr. Speaker. It is the protection not just of hon. Members, but of everyone in the Gallery, the staff of the House and children visiting the House in the mornings with either hon. Members or guides should explosive devices go off. The question that should not be subsumed is who hon. Members may employ as research assistants, because that is not the issue. The point at issue is access to the House.
Mr. David Winnick: Further to that point of order, Mr. Speaker. I believe that everyone recognises that you acted on the advice of the appropriate authorities. The intervention by the hon. Member for Tiverton (Mr. Maxwell-Hyslop) does not help. He said that it was a question not of employing research assistants but of access to the House. Obviously, if an hon. Member employs someone to work for him it is expected that that person will work in the House of Commons. I imagine that there are few, if any, research assistants who do not work in some part of the House.
The matter is important because who is to decide whether we can employ a particular person? Will the security authorities decide whether a person has their approval? As I understand the position outlined by my hon. Friend the Member for Islington, North (Mr. Corbyn), the person concerned was charged but not convicted. Therefore, in law we are dealing with an innocent person. It would be inappropriate to allow this matter to go by on the nod because other such cases would come before us in due course. I beg of you, Mr. Speaker, to appreciate that the matter of great importance, as my right hon. Friend the Member for Chesterfield (Mr. Benn) said, is that we have the right to employ whom we wish, and that we should try to establish and confirm that right. We should not be at the mercy of the security authorities to decide, on information unknown to us, whether Mr. X or Mr. Y should be employed in this House.
My understanding is that this is the first such case, so I believe it to be necessary that a statement be made at the earliest opportunity. No one has ever accused me of having the least sympathy with any terrorist group. I have only contempt for those who wage terrorism, whether in Northern Ireland or anywhere else. However, an important constitutional issue has been raised and the House is entitled to a statement on it.
Sir Fergus Montgomery: Further to that point of order, Mr. Speaker. I wonder what all the fuss is about. Had the hon. Member for Islington, North (Mr. Corbyn) bothered to read the unanimous recommendations of the House of Commons Services Committee, published on 31 January 1985, which state clearly in paragraph 23——
Mr. D. N. Campbell-Savours: No resolution of the House.
Sir Fergus Montgomery: Not a resolution of the House, but a recommendation by an all-party Select Committee. Paragraph 23 states:
"We therefore recommend that a Member who applies for a pass for a secretary or a research assistant … shall be required (i) to provide reasonable details on the background of appointee; (ii) to allow a short period to elapse between the making of the application and the issue of a photo-identify pass; and (iii) not to pursue the application in the face of an adverse (and confidential) report on the security status of the applicant. A Member dissatisfied with an explanation of a refusal to issue a pass is at liberty to make representations to the Accommodation and Administration Sub-Committee."
I wonder why the hon. Member for Islington, North did not do that instead of making an attack on you, Mr. Speaker.
Mr. Dave Nellist: Further to that point of order, Mr. Speaker. I am sure that you will agree that if every recommendation made by a Select Committee, especially the Select Committee on Social Services, was acted upon automatically before it was debated, a few hundred thousand people might he substantially better off. As my right hon. Friend the Member for Chesterfield (Mr. Benn) said, the recommendation has not been debated, and Tory Members are simply raising a blue herring.
In addition to the questions posed by my right hon. Friend the Member for Chesterfield, I ask one simple question. In the case of my hon. Friend the Member for Islington, North (Mr. Corbyn), there is a question mark over the employment of a research assistant because of lack of a security clearance. Have you, Mr. Speaker, or any other competent body within the House, refused the employment of any other research assistant? Are there any other current investigations? For example, is there an investigation into the research assistant employed by the hon. Member for Luton, North (Mr. Carlisle) — a certain Mr. Hoyle — who, apart from being a senior official of the late, unlamented Federation of Conservative Students, has been on patrol with the Contras in Nicaragua and paraded himself round the country supporting a terrorist organisation? Are those grounds for investigation or are investigations conducted only as a result of smear tactics against Labour Members?
Mr. Dennis Skinner: Further to that point of order, Mr. Speaker. I know that you will be making a statement after this series of questions——
Mr. Speaker indicated dissent.
Mr. Skinner: You are not? If not, I think it would be advisable for you to reconsider the matter. There are many problems with vetting the people employed here. For instance, let us consider a Tory Member of Parliament who may employ someone who is or was a member of the National Front. Are you prepared to take upon yourself the task of vetting all applications from the Tory party? Are you aware that it was reported in The Guardian the other day that during the election campaign a former member of the National Front, Mr. Peter Shipley, was working in No. 10 Downing street to help with the election? Once you start down this road, Mr. Speaker, you will set a hare running that you will never be able to catch.
Mr. Speaker: Perhaps I may deal with the matter in relation to the points of order that have been made to me. I ask the House to accept that this was an extremely difficult decision for me. The right hon. Member for

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Chesterfield (Mr. Benn) has drawn our attention to Speaker Lenthall, and I assure him and the whole House that I bear constantly in mind the freedoms that we have achieved in this place over the centuries. However, I had to face the fact that, in 1965, control of this part of the Palace was vested in me. Against the background of the information which I received, I had no option but to suspend the pass. I do not propose to discuss the matter in the House, but if hon. Members wish to change the rules they should ask for a debate on them or ask the Select Committee on Services, which has not yet been set up, to consider all the issues involved.
Mr. Cranley Onslow: Further to that point of order, Mr. Speaker. Many hon. Members will have great sympathy with you in the difficult position in which you were placed by the hon. Member for Islington, North (Mr. Corbyn), who might have dealt with the matter differently. It would have been to the great advantage of us all if he had. I hope that the Leader of the House has noted your comments about a possible debate, because plenty of hon. Members would wish to support what you have done and the decision that has been reached.
Mr. Corbyn: Further to that point of order, Mr. Speaker. What redress is now open to Mr. Bennett to clear his name, which has been smeared over every newspaper and on television and radio? He has been effectively prevented from carrying out his work in this building. What redress is open to me, if I employ someone to work with me in my duties representing the people of Islington, North and I am frustrated in doing that by an opinion offered in secret by the secret service? Is that not a negation of the democracy for which the House stands, which is meant to allow a constituency to elect a Member of Parliament to carry out his duties to the best of his ability? On this occasion, I have deliberately been frustrated by secret evidence that is not made available to me or, publicly, to anyone.
Mr. Speaker: The hon. Gentleman knows that his research assistant is not denied employment with him. What has happened is that his pass to enter this building unattended has been suspended. Until that matter is resolved, he can continue to work for the hon. Gentleman, as I believe he has been doing for some time.
Mr. Benn: Further to that point of order, Mr. Speaker. I appreciate the fact that you did not want to make a long statement, but several factual questions were put to you and it would be helpful if, before we had a debate—on whatever motion it may arise—we had answers to those questions which will be recorded in Hansard. No one criticises you, Mr. Speaker, but we elected you to protect us from the Executive, whose agents the security services are. I am sure that you reflected on this matter, Mr. Speaker, but once you gave permission to the security services to vet research assistants, you necessarily gave them authority to intercept telephone calls between Members and their research assistants. No one could vet a research assistant unless he had listened to telephone calls and opened correspondence between that research assistant and the Member.
I return to the point that I made earlier: this constitutes a licence to an unaccountable security service to vet
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Members of Parliament and their correspondence and contact with the people whom they employ. I ask you to answer the factual questions, and then we shall take up the matter in the proper way through parliamentary debate and decision.
Mr. Speaker: It is my undoubted responsibility to protect Members of this House, and that was the basis on which I took this decision. The House should remember that we have had one hon. Member murdered on the premises. We have had an attempt to blow up Westminster Hall. We have had one Member murdered in his constituency, and on two occasions we have had things thrown from the Gallery into the Chamber. I must tell the House that, against the information which I received, I could have made no other decision in the interests of the Members of this House. It is for the House to resolve whether that decision was right.
Mr. Eric S. Heifer: That is a disgraceful statement.
Mr. Speaker: The hon. Members for Tiverton (Mr. Maxwell-Hyslop) and for Altrincham and Sale (Sir F. Montgomery) have already drawn attention to the fact that this matter was dealt with fully in the Select Committee report. The proper course for the House would be to debate that part of the report.
Mr. Benn: Further to that point of order, Mr. Speaker. The answer that you have just given makes the position infinitely worse, because the only interpretation of your explanation is that my hon. Friend's research assistant might have been a person who would have murdered—
Mr. Speaker: I shall stop the right hon. Gentleman there. He has totally misinterpreted my remarks and represented them quite unfairly. I said that I had to take this decision against a certain background. I made absolutely no allegations about any individual, research assistant or anyone else. I had to take the decision against that background, because it is my duty to protect the Members of this House and all who work in the Palace.
Mr. Sydney Chapman: Further to that point of order, Mr. Speaker. Will you confirm that your ruling has been to say that that particular person is not allowed to visit certain parts of the Palace unattended? Is it not true also that even hon. Members cannot visit certain parts of this House?
Mr. Winnick: Further to that point of order, Mr. Speaker. Is there not here a matter of natural justice? Time and time again, when we have debated individual cases that do not affect hon. Members, the point has been made that people who consider that they have been unjustly treated should have some right of redress or appeal. Clearly, serious allegations have been made against this person. The hon. Member for whom he wishes to work states that there is no substance to those allegations.
The person concerned clearly believes that he is innocent and that he has no desire to kill or to carry out an act of terrorism. However, the implication of the report that obviously went to you, Mr. Speaker, is that he is not a person who could be safely allowed on the premises—otherwise, his pass would not have been taken away. I am, and everyone must be, concerned about the safety of the building, not only for ourselves but for all who work here.

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We are not selfishly concerned only about our safety in the Chamber but about that of all those who are employed here, be they Officers or staff.
You, Mr. Speaker, have stated that the pass has been suspended; that means, as I understand it, that there is a possibility that it will, at some stage, be returned to the person concerned. Will this gentleman be given any opportunity to put his case, either to you or to a Committee? Surely, Mr. Speaker, we cannot leave the matter on this basis. Conservative Members are not interested; they believe that it is all perfectly in order. However, those of us who are concerned with justice, for our own constituents or anyone else, simply ask you whether we can pursue the matter beyond today and whether the person can be interviewed so that he may put his case and we can have another statement to the House. It would be wholly unfair and a denial of justice if we left the matter as it is.
Mr. Tam Dalyell: Further to that point of order, Mr. Speaker. I realise that you are in a difficult position, hut there may have been some misunderstanding of your reference to the tragic murder that took place in this building. I believe that it is important that you clarify exactly what you meant, one way or the other, whatever the implications of what was mentioned.
Will you accept, Mr. Speaker, that some of us are alarmed that we have to take the say-so of the security services on this matter? While I would not dismiss it, I would have been happier if the information from the security services had at least been made available to one or two of my right hon. Friends who are Privy Councillors. [Interruption.] My point of view may be different from that of some of my hon. Friends. I should like the information to be made available, for example, to former Home Secretaries or others who have had similar responsibilities and who are Opposition Privy Councillors.
Mr. Speaker: We have a heavy day before us, and I am not certain whether we can take this matter further today. Patently, the issue must be resolved, and it is for the House to resolve it. The machinery for that exists, and many, if not all, of the points that have been canvassed with me today can legitimately be raised in that debate.
Mr. Nellist: Further to that point of order, Mr. Speaker. You state that no implication was to be drawn from the catalogue of events that you mentioned some 10 minutes ago — they were merely a backcloth to the decision that has been taken. Presumably, however, those who drew up the report given to you, verbally or in writing, regarded the employment of Mr. Bennett by my hon. Friend the Member for Islington, North (Mr. Corbyn) against the implications of that catalogue of events. Has that report been given to my hon. Friend or to the person he is employing? Has a report been drawn up such that the person who has been accused has no right even of seeing the charges against him, let alone of defending himself against them?
Mr. Speaker: Let me make the point absolutely clear. I took this decision against the background that I have mentioned. I mentioned it because I, with the former right hon. Member for Wakefield, Mr. Harrison, happened to be first on the scene at that time, and it affected me deeply. I was also present in the House when the other episodes took place. I make no accusation or allegation against anyone—it was simply background.
Mr. Bob Cryer: Further to that point of order, Mr. Speaker. Rather than having a debate, as you suggested, and a full-blown confrontation on this issue, I suggest that, in view of the way in which the representations have been made, you will probably accept that there is a strong body of feeling in the House that there should be intervention in the employment of research assistants and their use of the facilities of this House only in the most dire circumstances, which have not, by any means, been demonstrated. I therefore suggest that, rather than persisting with the idea of a debate, you review the position in the light of the representations that have been made, with a view to restoring the pass in the near future. That would be the best method of resolving the dispute. In this way, you, Mr. Speaker, can give full weight to the serious concerns that have been expressed about hon. Members' assistants.
I recall that when there was a flood of American assistants who were offered free of charge to Members of this House, some people raised the question of a CIA presence in the House and the possible subversion that that might entail. The view of the House at that time was that there should be no interference in the matter because an important right of hon. Members was that of being able to choose assistants. It therefore followed that permission should be given to allow those Americans to assist hon. Members in the House. In view of that background of tolerance, I hope that you will review the position sympathetically in the light of the evidence that has been put forward.
Mr. Corbyn: Further to that point of order, Mr Speaker. You must be aware that there is considerable disquiet in the House about the decision that you have taken, whose effect is this: an innocent man has been found guilty on evidence that we know not for offences that we know not, and he is prevented from gaining employment in the future because his character has effectively been smeared by this House.
I was brought up to understand that the court of Star Chamber was the opposite of justice in this country. We are now witnessing a system of justice under which someone is condemned with no right of hearing or appeal. I am sure that you, Mr. Speaker, must be aware that the matter cannot be allowed to lie here. Hon. Members have suggested that it be referred to the Services Committee, which does not exist. They have referred to the Select Committee report which, in any case, is out of print and was never debated in the House. I ask that you seriously consider the points put to you by hon. Members this afternoon about this fundamental denial of justice, arid, perhaps, on reflection, make a statement that you are prepared to restore Mr. Bennett's pass and that you are prepared to allow hon. Members to debate the serious and important issue of how they go about their business as elected Members of the House, free from the frustrations of secret evidence given by the security services.
Mr. Speaker: It would not be appropriate for me to make any statements other than what I have already been able to say today in answer to the points of order. I think that the matter should be debated, and I hope that it will be.

Palace of Westminster (Security)

  STATUTORY INSTRUMENTS, &c.
  Ordered,
  That the draft Education Support Grants (Amendment) Regulations 1987 be referred to a Standing Committee on Statutory Instruments, &c.
  That the draft Parliamentary Constituencies (Wales) (Miscellaneous Changes) Order 1987 be referred to a Standing Committee on Statutory Instruments, &c.—[Mr. Kenneth Carlisle.]

Orders of the Day

  Public Utility Transfers and Water Charges Bill
  Order for Second Reading read.
  6 pm
  The Secretary of State for the Environment (Mr. Nicholas Ridley): I beg to move, That the Bill be now read a Second time.
  Mr. Speaker: I have selected the manuscript amendment in the names of the leader of the Liberal party and others. Copies are available in the Vote Office.
  Mr. Ridley: The Bill has two distinct purposes. The first clause confers an express power on the water authorities in England and Wales to prepare for the restructuring and privatisation which we propose for them; it also confers a similar power on the electricity supply industry in England, Wales and Scotland to prepare for privatisation. Later clauses deal with water metering.
  Privatisation has been a central element of our success in redefining the proper role of Government. So successful has it been that we are awaiting the imminent conversion of the Labour party. At the Labour party conference the hon. Member for Dagenham (Mr. Gould) described share ownership
  "as just one instrument in order to hand real power to working people".
  What an admission after decades when the truth of the failure of nationalisation was staring them in the face. We have disengaged ourselves from a range of activities in which the involvement of Government is more harmful than helpful. With the sale of BAA in the summer of this year, we have privatised 16 major companies. The best people to manage these businesses are the managers themselves, not Ministers. We have given them the commercial freedom they need, with access to private sector capital. We have transferred about one third of the 1979 state sector and about 650,000 jobs into the private sector. We have also seen the level of share ownership among the population increase by a factor of three.
  The success of privatisation is witnessed by the millions who hold shares in the privatised companies and by the millions more who, in June this year, returned us to office. In our manifesto, we promised to continue this policy by privatisation of the water and electricity supply industries. The Bill is the first step towards keeping that promise. We do not expect to introduce the main legislation for either privatisation during the current Session, but enactment of the Bill will give both industries a firm basis on which they can prepare themselves fully for the future that we propose for them.
  Mr. David Winnick: After the events of last week, does not even the Secretary of State realise that it would be crazy to break up and privatise the electricity industry? Surely last week demonstrated once again how basic electricity is to the nation's life. Therefore, even this Government should reconsider their proposal.
  Mr. Ridley: After the events of last month, when the Labour party began to come to terms with the 20th century, I should have thought that the hon Member for Walsall, North (Mr. Winnick) would not be so unwise as

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  to risk disfavour with his new leadership by causing any suggestion to arise that he was not in favour of privatisation.
  Mr. John Prescott: Get on with the Bill.
  Mr. Ridley: The hon Member for Walsall, North interrupted me. I will not give way to him again—or to the hon Member for Kingston upon Hull, East (Mr. Prescott).
  The water authorities have a complex range of functions. To the public, the authorities are suppliers of water and disposers of sewage. These two essential utility services constitute about 90 per cent. of their business—and they are large businesses. Altogether, they employ about 50,000 people, have capital expenditure of about £1 billion per annum, and turnover of over £2 billion. The authorities were constituted on their present lines in 1974 when the 10 authorities were amalgamated from more than 1,500 predecessor bodies. They have made considerable strides in improving operating efficiency and financial performance. For example, although staff numbers grew during the previous Labour Government, since 1979 they have fallen by about 20 per cent.
  Although investment under Labour fell by 30 per cent., since 1980–81 we have increased investment in volume terms by over 35 per cent. There has been massive investment in the sewerage system and in sewage treatment which together account for approximately half of capital expenditure by water authorities. Investment in cleaning up rivers and beaches is 15 per cent. up since 1980. Capital expenditure next year, not all of which can be described as "investment", will allow each water authority to renew and replace assets at a sensible rate and to improve the performance and quality of services as the public and their statutory obligations require.
  In 1974 hardly any capital expenditure was financed from internal sources, but in this financial year almost all capital expenditure is being financed internally. That has greatly strengthened the financial position of the authorities. Following privatisation, it will be for the directors of the pies themselves to decide how capital expenditure should be financed. When they have to raise additional funds, the pies will have to compete on the capital markets for the best and most favourable terms and conditions that they can get. That will be a spur to improving performance, as well as a relief for the taxpayers.
  The water authorities are now ready for transfer into the private sector. No doubt Labour Members will argue, as the hon. Member for Walsall, North did, that water services are inherently matters for public sector responsibility and control, despite their near conversion on the road to Brighton. They will say, as did the hon. Member for Walsall, North, that it is impossible to privatise something that is so essential to public health. I agree that water is essential to public health. So are sewerage and sewage treatment and disposal. So, indeed, are many other things—not least the food that we eat. What matters is not who owns and runs the provision of essential goods and services, but whether the regulatory framework adequately protects the public. We have statutory food standards which regulate the quality of food produced by the private sector. We have building regulations which lay down minimum standards for new homes.
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  Drinking water must also comply with statutory requirements which are binding on the private sector water companies as much as on the public sector water authorities. There has been a long and distinguished tradition of private provision of water services. The statutory water companies supply about one quarter of the population in England and Wales. There are also numerous overseas examples of private sector bodies providing high quality water services to the public. The final answer to the hon. Member for Walsall, North is that one quarter of water has already been privatised and he has never complained about it.
  I recognise that the provision of water services is a natural monopoly. That is why we intend to impose on the utility companies, which will be successors to the water authorities, a number of controls on both the economic and the environmental aspects of their activities. These will include a control over the prices they charge to the public. There will be a Director General of Water Services to make sure that they comply with these conditions of appointment and to protect customers from the dangers of monopoly abuse. The director general will be able to make comparisons between the pies and to use the example of the most efficient as his yardstick for what is achievable.
  I must add some words about the control of the environmental aspects of the activities of water authorities; the protection of river systems — the management and conservation of water resources. pollution control, fisheries, navigation, land drainage and flood defence, recreation and conservation. Our White Paper published in February 1986 proposed to leave these functions—except for land drainage and flood defence—with the privatised water authorities, subject to a number of detailed controls. After further consideration, and having listened carefully to the arguments, I came to the conclusion that these functions are essentially a public responsibility. I could not accept the principle that one private body should determine what another can take out of a river or put into it or how much it should be charged for so doing. Such decisions are inseparable from decisions about the management of the river regime, and must be consistent with it.
  The business of protecting the environment and the conservation of rivers, and of ensuring that all the disparate interests, including those of the utilities, are protected, is essentially a public sector regulatory function. Therefore, we propose to set up a National Rivers Authority. We published a policy and consultation paper in July describing how we envisage it would operate. Our revised proposals have been welcomed by most of those responding to the July paper, particularly by those are are concerned about conservation. There has been a feeling, shared by the Select Committee on the Environment in the last Parliament, that with or without privatisation we should consider some independent regulation of water authorities in order to maintain the progress in cleaning up pollution in our rivers. The National Rivers Authority will do just that.
  Sir Eldon Griffiths: While I would have preferred my right hon. Friend to go ahead on the lines of his original thoughts about this matter and not create a new quango such as the NRA, I recognise the philosophy that has led him to that decision. While there may well be a case for the public sector to retain the

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  monitoring, supervision and regulation of the plcs, does he need to create a new executive body to interfere, to spend and to intervene in the hydrological cycle and the integrated water basin management which are at the heart of the 1973 Act?
  Mr. Ridley: My hon. Friend's ambition is that the regulation of the environmental aspects of the water industry, which is what we are talking about, should be kept to a minimum in terms of size, cost and interference. Equally, I am sure he will agree that such a regulatory body should have the powers and the ability to discharge those functions that are properly for the public sector. Indeed, they are properly for me to account for to this House. Without sufficient powers I would not be able to do that. That which we seek is, I think, the same as that which is sought by most water authorities—to get the precise boundaries of the National Rivers Authority exactly right to perform those functions.
  Sir Hugh Rossi: I am grateful to my right hon. Friend for his reference to the last report of the Select Committee on the Environment. Perhaps in his statement he has read into that report a little more than appears there. The Committee took the strong view that there was a case whereby the duty of policing pollution might be taken away from the water authorities because they are dischargers into water courses of matter that, perhaps, requires policing. That is one proposition and it could well be argued that a national water authority with a proper inspectorate could do that work far more impartially and could be seen to be impartial by industrialists who are often asked by water authorities to do things that the authorities themselves are not doing. That is quite different from saying that we should get rid of a policy of an integrated river basin management. If my right hon. Friend is saying that the National Rivers Authority would take over that function, he may find that the Select Committee will not agree with him.
  Mr. Ridley: I agree with my hon. Friend on one aspect of the public regulatory function — the control of pollution. He will agree that there are other aspects that have to be regulated, including such matters as navigation, land drainage, angling and conservation. I ask my hon. Friends to await the proposals that we shall put forward as a result of the consultation. That consultation has been very full and very helpful. A large number of helpful responses have been made and there has been a large degree of support for our proposals. The difficulty is to find the exactly correct dividing line between the plcs and the NRA. If when they know what it is my hon. Friends think that we have got that wrong, they will have an opportunity to say so. I am acutely conscious of the concern and that is why we are taking so much trouble to find the right answer.
  Sir John Farr: Can my right hon. Friend tell the House whether this Bill actually brings into being the National Rivers Authority, because it does not have a clause setting up the NRA and it is not mentioned in the Bill, except in the explanatory memorandum? The sooner the NRA is set up, the better, but I should he grateful if my right hon. Friend would tell me whether it is set up by the Bill today or if it will be set up at another time?
  Mr. Ridley: It is not in the Bill and we are not setting it up today. My hon. Friend is quite right to take me to task for talking about it when it is not in the Bill. On the other hand, I suspect that many of my hon. Friends have come to the House today to talk about it and I would have disappointed them if I had not mentioned it.
  Mr. Ian Gow: I listened carefully to what my right hon. Friend said about the new National Rivers Authority. He told us that the new authority would be responsible for the licensing of the abstraction of water from rivers. As my right hon. Friend knows, at the present time the 10 water authorities give licences to abstract water from rivers. Why is it that in future, simply because the ownership of the water authorities has changed, they will no longer be able to do that which is essential for the carrying out of their functions, namely, themselves to decide whether to give licences for the abstraction of water?
  Mr. Ridley: I must ask my hon. Friend to await our detailed proposals. The abstraction of water, like discharges into rivers, affects the whole river cycle and we have to find the exact balance so that the National Rivers Authority can regulate total flow in a river without removing the operational freedom of the water undertakers in the area.
  Mr. Dafydd Wigley: The right hon. Gentleman told us that he is responsible to the House for functions undertaken by water authorities in relation to land drainage and rivers. It is not just he who is responsible to the House for such matters, but also the Secretary of State for Wales. He will be aware of representations that he has received from the farming unions in Wales and from a host of other bodies, saying that there should be some continuation of river supervision and land drainage supervision in Wales, with those responsible answerable to the Welsh Office. Will that be part of his proposals?
  Mr. Ridley: The point I made was that it is the Government, and it does not matter which Secretary of State, who are responsible to the House for the standards that water undertakers are required to provide. Those are standards of water and river cleanliness and the cleanliness of beaches. The hon. Gentleman is always asking questions about these matters and if we are to achieve those standards we must have a body capable of monitoring and enforcing the standards that the House lays down. I am sure that my right hon. Friend the Secretary of State for Wales will take note of what the hon. Gentleman said about the Welsh water authority.
  The successful reallocation of water authorities' current responsibilities to a National Rivers Authority and to 10 water services plcs can take place only after the ground has been prepared within the water authorities. That process must begin soon, and as soon as this Bill has received Royal Assent we shall be working with the water authorities to ensure that they make full use of the powers provided in it to take positive steps to pave the way for a smooth and rapid restructuring.
  In our manifesto we also said that, following the success of gas privatisation, we would bring forward proposals for privatising the electricity supply industry, subject to proper regulation. Electricity is a large and important business with a turnover in England, Wales and Scotland of nearly £12 billion. Its privatisation will provide the

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  industry with the opportunity to develop commercially and to be truly accountable both to its customers and to its shareholders. Electricity privatisation will be a major undertaking. All the existing statutes governing the industry will have to be thoroughly reviewed. Decisions on the future structure of the privatised industry have yet to be taken, and we are at present engaged in a wide-ranging review of the options. Much preliminary work needs to be done both within Government and in the industry itself. This Bill will ensure that the industry can participate fully in that process.
  Our proposals will be put before the House as soon as we have completed our studies of the issues involved. Our aim is to ensure that the privatised industry will be in a position to supply electricity in as reliable, competitive and economic a way as possible, and that the industry's record on safety, which is second to none, is maintained. Electricity is vital to every sector of our economy and every consumer will benefit from an efficient electricity industry freed from the constraints of public sector control and interference.
  Mr. Prescott: I note that the Secretary of State emphasises the efficiency of the industry. Will he announce whether prices will increase as soon as the industry is privatised or in the run-up to privatisation?
  Mr. Ridley: I am interested to hear the hon. Gentleman already raising difficulties about the Labour party's attitude to the privatisation of the industry. Is the Opposition Front Bench now split? Are some Opposition Front Bench spokesmen in favour of privatisation while the hon. Member for Kingston upon Hull, East is not? I cannot think why else he asked the question unless he was trying to raise objections to privatisation. I cannot possibly answer the hon. Gentleman's question. My hon. Friend the Parliamentary Under-Secretary of State for Energy will answer the question when he replies later.
  I now want to consider water metering. Clauses 2 to 7 and schedules 1 to 3 are almost entirely concerned with providing a special regime for trials in relation to compulsory water metering. They also clarify and update the existing law on metering. The possible extension of water metering to domestic consumers has been debated at great length both within the industry and outside for many years. In the last century, the local water undertakers in Malvern in the constituency of my hon. Friend the Under-Secretary of State for Energy, the hon. Member for Worcestershire, South (Mr. Spicer), decided that all properties in their area should be metered. Since then there have been numerous committees looking into the feasibility of more widespread metering. In 1985, a joint water industry-DOE study recommended that the Government and the water industry begin to work on the presumption that an extension of water metering might be worth while from an economic point of view in that it should reduce demand and the need for future investment on expensive infrastructure. It also suggested that the water undertakers be asked to propose a number of controlled comprehensive trials and recommended a number of changes to legislation. These were to clarify undertakers' powers to carry out trials and to facilitate water metering generally. Most of these recommendations have been incorporated in this Bill.
  Since the group reported we have announced that domestic rateable values are to be abolished at the latest
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  by 1994. This brings added urgency to look for other means of charging for water, of which metering is the most obvious, but not by any means the only option. Other suggestions include a flat rate charge and ones based upon floor space, household size and even on the number of taps and water appliances in a household. The water authorities are currently considering the possibilities. Ultimately it will be for each water authority to decide how it wishes to charge. However, whatever method is chosen will have to comply with the principles set out in section 30 of the Water Act 1973, repeated in the Bill, that charges must have regard to costs and not unduly discriminate against any classes of person. The water authorities do not at present favour a charge per head.
  Although, as I have said, metering is the most obvious method of charging, we do not propose to go to widespread domestic metering at once. It would present a number of technical and logistic problems which need to be properly assessed to enable water undertakers to take a judgment on whether widespread metering is worth while and, if so, how best to introduce it with the minimum inconvenience to customers.
  Metering is not new. In the non-domestic sector metering is widespread. Roughly 30 per cent. of water supply in England and Wales is now metered. Since 1981 a scheme has been available whereby domestic consumers can opt to pay for the installation of a meter. Fewer than 100,000 customers out of over 18·5 million in England and Wales have taken up the offer.
  This is not the time to go into the manifest inequities in the present rating system, but it is unsound as a basis of charging for domestic water supply, just as it is for the provision of local services. The complaints from single people living next door to a family consisting of three or four people that they pay exactly the same in rates equally apply to water rates. The prospect of more widespread metering will be welcomed by such people. However, those people who use significant amounts of water or are simply wasteful with it—for example, excessive garden watering and simply not bothering to repair leaks—will probably, and rightly, end up paying more. This must be right.
  The water industry recently announced the sites that the industry would like to include in the trials. This will enable the industry to get on with the all-important task of consulting the people likely to be affected, well in advance of my formal consideration of each scheme, required under clause 4.
  Clause 2 confers charging powers on statutory water companies similar to those of water authorities under section 30 of the Water Act 1973. The power will be additional to, rather than a replacement for, their existing charging powers which are mostly in local Acts. It will make it easier for them to participate in the metering trials and also to introduce other alternative charging systems which may be required once domestic rateable values are abolished.
  Clause 3 re-enacts certain provisions of section 30 of the Water Act 1973 which regulate water authority charges. It extends these provisions to water companies. Under these provisions water undertakers will be able to adopt any charging system that they consider appropriate. This freedom is, however, limited by two important constraints. First, undertakers must, in fixing their charges. have regard to the cost of providing their services. Secondly, their charges must not show undue preference to, or discriminate against, any class of consumer. I must stress

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  that this limitation of undertakers to fix their charges is carried over from section 30 of the 1973 Act. There is nothing new and these very important limitations will apply if universal metering is ever introduced. It is, however, necessary to have a special regime for charges made in connection with metering trails because no matter how carefully a water undertaker wishing to carry out a trial selects a trial area, those customers taking part could claim that they are being discriminated against compared to the rest of that authority's customers who are not subject to the trial. Some customers may even argue that they are being discriminated against because they are not being given the opportunity to take part in the trial. Furthermore, because of the experimental nature of some of the tariffs, it may not be possible for undertakers to ensure that they accurately reflect costs. Most importantly, I want to be sure that the interests of the customers likely to take part in the trials are properly taken into account. The special regime which is to be adopted for the trials is spelt out in clause 4. Clause 4 also requires each water authority or company wishing to carry out a trial to submit proposals to me, or, in the case of Wales, to the Secretary of State for Wales.
  Clause 5 and schedule 1 contain provisions dealing with powers of entry; meter installation costs; offences of tampering with meters; information about meter readings required by undertakers; where water and sewerage services are provided by different undertakers; and arbitration in cases of disputes. The remainder of the Bill is largely of a technical nature and deals with consequential amendments, repeals and definitions.
  Paragraph 5 of schedule 1 makes it clear that where a water undertaker's customers are compulsorily metered, the water undertaker, not the customer, will be required to meet the cost of installing the meter and any associated equipment.
  Thus the Bill serves two distinct purposes. It paves the way for the changes that we propose for two of this country's major industries. We do not expect to introduce the principal legislation embodying these changes during the current Session, but with the powers in this Bill the water and electricity supply industries will be able to play their full part as we take our proposals forward. The metering provisions will make it possible for water undertakers to test whether the metering of domestic water supplies might serve as a suitable alternative method to the present system of charging that has grown out of the industry's past, but does not seem to fit with its future. I commend the Bill to the House.
  6.29 pm
  Dr. John Cunningham: The House is asked to approve a Bill to prepare the way for the privatisation of the water and electricity supply industries. The Opposition are disappointed that we are not to hear from the Secretary of State for Energy today. Our suspicion is that he cannot afford another comment such as that which was made by Mr. Edward Pearce following his speech at the Tory party conference, who described it as one of "mind-erasing irrelevance."
  My hon. Friend the Member for Kingston upon Hull, East (Mr. Prescott) will be dealing with most aspects of the Bill concerning the electricity industry, but many of the fundamental arguments against the Bill apply equally well
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  to both water and electricity supply. We are being asked to agree to the selling off of more national assets at a discount.
  The Bill is an enabling measure that is reminiscent of the notorious paving Bill that was introduced to rig the statute book before the main legislation to abolish the English metropolitan councils was enacted by Parliament. Now, as then, the House is asked to approve paving legislation, including important new central powers to Ministers, before the Government's real intentions and detailed proposals are known.
  We in the Labour party are opposed to the proposal to sell off the nation's electricity and water industries to private control and perhaps major foreign influence, not least because we cannot accept any argument in favour of private monopoly control of two fundamental resources such as water and electricity which are vital to the social and economic health and well-being of the British people. [AN HON. MEMBER: "What about food?"] No matter how the Government twist and turn, and no matter how Ministers such as the Secretary of State perform their tortuous mental callisthenics, no one can avoid the conclusion that it is the Government's intention deliberately to create widespread private monopoly powers in two critical areas of the lives of every man, woman and child in our country. An hon. Member asked from a sedentary position, "What about food?" There is competition in the provision of food and there is not, cannot be and will not be any competition in the provision of water and electricity.
  Mr. Gow: So that the tens of thousands of workers in the water and electricity supply industries who will be buying shares when denationalisation takes place may understand precisely the position of the Labour party, will the hon. Gentleman confirm that it is the Labour party's policy to renationalise that which is denationalised and which is the subject of the Bill?
  Dr. Cunningham: I shall deal with that issue later in my speech. I promise the hon. Gentleman that I will give a straightforward answer to the question when I come to the part of my speech that deals with it.
  Private monopoly is the inevitable outcome of the dogmatic track on which the Tory party has rushed to buy a one-way ticket. The British people are to be the victims of two more private monopolies with even more power and importance and even less competition than the disgracefully mismanaged British Telecom. With their howls of outrage still fresh in the minds of the British people and the Tory party camp followers in the media, Conservative Members are now obviously intent on voting this evening for more huge doses of the same thing. What price the interests of consumers now that the election is over?
  We in the Labour party believe that these essential services should be public and in public ownership and control. The Prime Minister said:
  "The water authorities are natural monopolies … and we need to be particularly careful when considering replacing a public monopoly by a private one."—[Official Report, 31 January 1985; Vol. 72, c. 292.]
  There we have it. There is a recognition that only private monopolies can and will result.
  I warn Tory Members not to be misled by their leader, who talked recently of "irreversible shifts of power". Nothing is irreversible in a democracy and a Labour

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  Government would not hesitate to eliminate private monopolies to ensure that vital and fundamental services were controlled and managed in the best national interests, balancing the powers among consumers, employees, Ministers and Parliament. That is the best way to ensure that national interests are developed and that consumers have a real voice, real powers and effective protection against natural monopolies.
  Mr. John Maples: The hon. Gentleman has made it clear that he is opposed fundamentally to the privatisation of public water authorities. Will he say whether he thinks that the 28 private water companies should be nationalised?
  Dr. Cunningham: No. I think that that is a rather redundant question. The reality is that the 28 private water undertakings act as agents for the regional water authorities. In no sense are they truly private sector companies.
  Mr. Ridley: I thank the hon. Gentleman for the extremely carefully drafted passage that he read to us. I hope that it had previously been agreed with all wings of his party. He said—I took down his words—that he was in favour of these monopolies being controlled and managed by the public sector. Is he in favour of them being owned by the public sector?
  Dr. Cunningham: Yes. I have already said that, and I say it again categorically.
  The Government's proposals are a mess and it is clear that they are born of expediency and dogma. They owe nothing to strengthening the position of water and electricity consumers. They are not aimed at improving the quality of drinking water, sewage treatment or environmental protection. If the House does not accept that, I shall quote from a letter from the Secretary of State dated 18 May 1987. It is addressed to Mr. Gordon Jones, the then chairman of the Water Authorities Association, and it sets out the Government's intentions and policies. It reads:
  "I recognised that our revised proposals represent a significant departure from the principle of integrated river basin management which was instituted on the reorganisation of the water industry in 1974 and which was endorsed by last year's Government White Paper."
  The letter continues:
  "and as a Government committed to extending share ownership and narrowing the public sector, we have been led to conclude that these aims must have priority."
  In other words, the aims of Tory dogma about narrowing the public sector and share ownership are to override judgment on the most efficient management of the water industry. That is why the Bill is before us. It has nothing to do with improving services or the position of the consumer.
  In a scathing editorial the Financial Times describes the Government as
  "lurching precipitately from one extreme to the other."
  It describes the proposals as
  "informed less by any firm principles than by short-term political expediency and the persuasive talents of special interest groups with privileged access to ministerial ears."
  To whom has the Secretary of State been listening? It seems that he has not been listening to the National Consumer Council and certainly riot to the chairmen of the regional water authorities, appointed to a man—not a woman among them — to support privatisation. It transpires that the Secretary of State has been most
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  influenced by the National Farmers Union and that well known bastion of protection for ordinary people, the Country Landowners Association. It turns out that the right hon. Gentleman has been listening to big brother—Viscount Ridley, his elder brother, an office holder in the Country Landowners Association.
  The best illustration of this political headstand is the comparison of today's proposals and the speech of the Secretary of State with the speech made to the House just over a year ago by the then Minister of State, Department of the Environment with responsibility for water policy, the hon. Member for Oxford, West and Abingdon (Mr. Patten), who is now Minister of State, Home Office. On 23 June 1986 the Minister said:
  "Water services plcs will inherit all the statutory duties—and I stress this—which currently rest upon the water authorities."
  Further on in the same speech, the Minister said:
  "it is very important that we maintain and, if possible, improve the concept of integrated river board management, which means the total management of everything within the river basin."
  He concluded by saying, on behalf of the Government:
  "That is why it is so important to maintain the concept of integrated river basin management."—[Official Report, 23 June 1986; Vol. 100, c. 40–44.]
  We are bound to ask what has changed since that speech was made by that Conservative Minister to the House 12 months ago. The change is, of course, that the Tory party has been warned off by its influential landowning and farming friends. Certainly it has taken no advice from the chairmen of the water authorities, who are almost entirely and implacably opposed to the proposals.
  The water privatisation proposals were overwhelmingly condemned last year. Opposition was almost universal. Now, however, without any effective consultation or debate, a new approach is presented which has even alienated the regional water authority managers appointed by the Government to support and see through the privatisation. It is not surprising that they are alienated, because they were not consulted either.
  The Government are clearly determined to sell off the assets at any price, whatever the cost to consumers, the environment or those employed in the industry. In Britain, uniquely in Europe, 99 per cent. of all households are connected to a public water supply, and 94 per cent. are connected to the public sewerage system. The Government intend to sell at a knockdown price the 10 regional water authorities in England and Wales controlling those services when assets valued at at least £27 billion will be sold for perhaps a quarter of that sum.
  Mr. Ridley: I must not allow the hon. Gentleman to traduce the water authority chairmen. Mr. Gordon Jones, chairman of the Water Authorities Association, said on 13 October:
  " … there is a strong measure of agreement among all 10 water authorities how they see the future … we all agree in principle that such a regulatory body (as the NRA) is needed. We all agree that, with some development of the Government's proposals, it will be possible to produce an effective regulatory body and manageable and viable PLCs."
  Dr. Cunningham: The reality is that, when we have talked to individual chairmen of water authorities, only one has expressed support for the Government's proposals in total. We can argue about the matter, but I suggest that hon. Members telephone them all tomorrow and ask them

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  individually whether they support the division of the industry and the ending of the concept of river basin management.
  Mr. Ridley: The hon. Gentleman does not seem to know his stuff. I have here the responses from Severn-Trent Water, Southern Water, South-West Water, the Water Companies Association and the Institution of Water and Environmental Management. The hon. Gentleman is quite wrong. He must come up to date.
  Dr. Cunningham: Representatives of the regional water authorities made the journey to Brighton for the Labour party conference and invited my hon. Friends and me to meet them for dinner so that they could tell us of their opposition to the Government's proposals. We did not have to ask them; they came voluntarily and told us, and the chairman of the Southern Water Authority was one of those present. Any serious examination of the Government's case demonstrates that, in terms of consumer interest, water management, environmental protection or better management of the industry, it is hopelessly flawed. The real reasons for the proposals are political.
  For reasons of irrelevant Tory dogma, the public sector must be reduced. Income to the Chancellor must be maintained by regular sales of the family silver. Share ownership must be increased because it is a good thing. No one is surprised that people like buying shares at a discount. What could be more natural than people who are offered a bargain, as they are in all sorts of ways, wanting to take it up? However, that does not mean that the process will in itself be to the advantage of the industry concerned, and it is a hopelessly shallow argument to suggest that it will.
  The proposed change of ownership cannot result in consumer choice, and everyone knows it. There will be no choice. The proposed sell-off will not expose the water or electricity industries to the forces of the market. There will be no market. The proposed removal of public monopoly will not result in competition. There will be no competition. The British people will not be customers of private monopolies; they will be locked-in consumers. Being a customer implies choice. The people will have no choice. No one will have two water meters or two electricity meters or two tariffs to choose between, as the Secretary of State for Energy has honestly and candidly made clear. People will not have a choice.
  The Secretary of State for Energy (Mr. Cecil Parkinson): May I clear up the first point? The hon. Member for Kingston upon Hull, East (Mr. Prescott) does not seem to realise that this Bill does not privatise electricity authorities, and he will therefore make a speech of staggering irrelevance when he rises to speak at about 9 o'clock.
  As for the point made by the hon. Member for Copeland (Dr. Cunningham), I said that distribution was a natural monopoly, and that therefore we must have regulation and customer rights. I also said that 80 per cent. of the costs of electricity come from generation, and that there is plenty of scope for competition—and there will be competition.
  Dr. Cunningham: I think that that intervention was ill-advised. The Secretary of State for Energy seems to be
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  laying the blame on, or advancing some criticism of, my hon. Friend the Member for Kingston upon Hull, East (Mr. Prescott). The right hon. Gentleman knows that we were advised that he would be replying to the debate, and that that is why my hon. Friend is on the Opposition Front Bench. The change is either because the right hon. Gentleman is being gagged, or because he has bottled out—to use today's common parlance.
  Arguments about conservation are bogus, and the Secretary of State for the Environment trotted out another old canard this evening. Any domestic consumer can have a water meter installed now and pay by volume consumed. The oft-quoted but never identified small user who complains, so often paraded as unfairly treated, has a ready remedy available now at a relatively small cost for meter connection. Why do not water authorities campaign and advertise effectively on that now? The reality is that they want compulsory meters and unit charging for water for everyone, and they want it legislated for.
  Mr. John Redwood: Will the hon. Gentleman confirm or deny that it is now Labour party policy to welcome competition in the large utilities, be they private or public? Is it now agreed that competition improves the service to the customer?
  Dr. Cunningham: The hon. Gentleman cannot have been listening. There will be — there can be — no competition. That is the reality. Only dogma is preventing Conservative Members from recognising and accepting the plain facts of life.
  The Department's joint study on metering which was published in August 1985, and to which the Secretary of State referred, points out:
  "Although the option of a metered supply has been available to all domestic consumers since 1981 only about one customer in 1,000 has opted to do so."
  That is hardly enough evidence to support the Secretary of State's cry from the heart about the poor, unfairly-treated single person paying too much for water. There is not much evidence in his own departmental study to support that rather thin argument, is there?
  The reality is that about 18,000 domestic customers of statutory water companies also have metered supplies. In all, 74,000 out of 18·6 million households have metered supplies. It is also clear that additional investment cannot lead to an increased market share for water authorities. Investors can receive a return only through increased charges, or reduced expenditure, or both. That is why the Government's position, and that of their appointed industry managers, rests absolutely on the need to measure water, to quantify consumption and to increase the charges for it.
  The Secretary of State clearly shares the view that we must have a price for the baby's bath or for the pensioner's tomb and that the gardener must pay more to grow his chrysanthemums or tomatoes. The Secretary of State even thought aloud about the prospect of a taps tax. That is the stupidity that this dogmatic Government are apparently willing to consider in an effort to legislate in this area. All the fundamental and wonderful advantages of living in a society where a plentiful supply of good, clean water is readily and cheaply available will be jeopardised by this Government.
  What other purpose is served by an enforced move to unit pricing for water? At present, the average household spends just less than 1 per cent. of its expenditure on water

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  services. Long may it remain so. The policies that have led to that have been of incalculable value to the health and well-being of the British people. It is and will remain Labour policy to ensure that everyone can have as much water as is required at the lowest possible cost.
  In people's homes, water is used overwhelmingly for reasons of health and hygiene: washing, bathing, toilet flushing, clothes washing and other domestic purposes. The Secretary of State argues that outdoor uses of water account for only 3 per cent. of domestic consumption. If the need to conserve water is the real priority—and the overall national demand has barely changed since 1982—attention should be given to a quite different area: to increasing investment in the often antiquated distribution system. Overall, 40 per cent. of our water is consumed in our homes, 30 per cent. in non-domestic uses, and a staggering 30 per cent. just leaks away into the ground. Major investment is required to reduce that wholly unsatisfactory state of affairs. It is totally unacceptable to the Opposition that the Government should sneak off along the road of rationing water by price, when the system itself is so inefficient.
  Water is relatively cheap to collect, but it is increasingly expensive to treat, purify and distribute. Given the nature of our climate, there should never be any water shortages in Britain, and any coherent, progressive Government policy should aim at creating a national water grid—not at fragmenting the industry, as privatisation will do.
  Technology now exists more accurately and quickly to locate mains bursts, using leak noise correlation. The mains and sewerage system, much of which was laid down a century ago, is in urgent need of replacement and repair. Private monopolies are the least likely bodies to expand and sustain the level of capital investment that is required.
  Select Committees of both Houses of Parliament, the Confederation of British Industry, the Trades Union Congress, the National Economic Development Office and many other industrial and professional bodies have drawn attention to the urgent need for increased investment in these areas. The Consumers Association has also drawn attention to these problems. It estimates that additional expenditure of at least £40 million a year is required just to keep the system going. The "Which?" report stresses that the Government's financial controls on the industry have made the situation worse and have resulted in an inferior service. It says that many of the country's 150,000 miles of sewers are in danger of collapse.
  Ministers appear to be unconcerned that preparations for the sell-off and flotation will divert management time and huge financial resources away from those problems. Tory Members of Parliament appear to be unconcerned that the need to pay for metering and to pay dividends will take massive capital investment out of the industry and that what should be used to repair mains and sewers will be used in other ways. We are crying out for more investment so that our beaches can be clean and the quality of our bathing and drinking water improved.
  Water metering and dividends to shareholders will do nothing to improve the quality of services to consumers. Tories appear to be unconcerned about the continuing decline in river water quality, which led to over 900 km of rivers in England and Wales deteriorating in quality between 1980 and 1985. Any Government who describe the raw sewage flooding of people's homes as an
  780
  "economic externality" are not too concerned with public health and the service to the estimated 60,000 homes thus affected every year.
  Nor is there any apparent concern among Conservative Members about the fact that 10·8 million people in Britain receive drinking water of a quality below that which is required by European Community standards. The present Government issue waivers from the standards required in the Community directive and seem to be content to go on doing so.
  The Parliamentary Under-Secretary of State for Energy (Mr. Michael Spicer): That is not true.
  Dr. Cunningham: The hon. Gentleman says that that is not true. I have here the Department's answer to the parliamentary questions, and I am referring to Department of the Environment figures. If it is not true, as he says, the hon. Gentleman had better talk to his right hon. Friend the Secretary of State about the falsification of parliamentary answers.
  After eight years in government, the Secretary of State has conveniently discovered problems about water quality. Why, we ask ourselves, did he brief the press about his sudden recognition of this issue? We wonder whether it had anything to do with the fact that on 10 June 1987 the European Commission decided to start infringement procedures under article 169 of the treaty against the United Kingdom Government. It did so in 22 cases. In 16 cases it decided to send a formal letter and in a number of other cases it decided to pursue the issue. That is the real reason why, after eight years of doing nothing about it, the Secretary of State has suddenly decided that water quality is an urgent priority. This country will be humiliated by action taken in the courts by the European Community.
  I welcome the Secretary of State's proposal that there should be a National Rivers Authority. It is a very important proposal that deserves serious consideration and examination. The proposal fractures the whole concept of river basin management, so praised by Ministers just 12 months ago. A National Rivers Authority will deal with a wide range of crucial issues, not just regulatory powers on discharges and pollution. It will be responsible for water resource planning, abstraction, water quality, land drainage, flood protection, fisheries, conservation, recreation, navigation, research and sea defences. [Interruption.] I am sorry that the Secretary of State is so appallingly ignorant and ill-mannered that he does not want to listen to criticisms of his speech and his proposals. For a member of the Cabinet, his behaviour is beneath contempt.
  The proposal for a National Rivers Authority is aimed at making the water authorities more attractive for the sell-off by removing from them the costs and responsibilities for non-profit expenditure. The public purse, presumably within the PSBR—here another one of the arguments for privatisation is blown away because the authority will remain within the PSBR—will still have to foot the bill, leaving the private monopolies to charge for water and sewage disposal as they think fit.
  The Government document makes it clear that a nationalised rivers authority will seek maximum possible recovery of costs, with all that that implies for sport, recreation and leisure activities. Effectively, what the Government are proposing is that the taxpayer and water sports people will subsidise privatised water monopolies.

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  The Secretary of State has tried to disguise all these points today by saying that all these functions and duties can be effectively discharged nationwide by a handful of people and at little cost. On that basis a National Rivers Authority would be incompetent and unable to do an effective job.
  Even the Government's own Inspector of Air, Water and Wastes at the newly formed pollution inspectorate is said to be bitterly opposed to Government policy and is quoted in the press as saying that a National Rivers Authority will undo the basic principles on which the inspectorate was created so recently by the Government.
  We know that over the past few years Conservative policy has been to increase deliberately water charges above the rate of inflation. Since 1979 the retail price index has gone up by 87 per cent., while average domestic water bills have risen by 134 per cent., according, in case the Under-Secretary of State has any doubt, to Department of the Environment figures.
  The Government ensured that the water authorities increased prices by deliberately reducing their borrowing powers and external financing limits. In effect, the Government have been taxing today's water consumers. In 1987–88 three authorities — Severn-Trent, Thames and Southern—have negative external financing limits. Their consumers are effectively being taxed by the Government on their water supplies.
  Mr. Roy Watts described this policy thus:
  "It seems as if we shall once again be asked to substantially increase our repayment of long term debt in the coming year … We shall be entirely debt-free within three years, which amounts to a very poor deal for today's customers."
  The National Consumer Council has recently expressed concern about the increase in the number of homes having their water supply cut off because of financial difficulties with bills. Do we, as a civilised nation, want to pursue policies that are bound to increase that problem? We in the Labour party are in no doubt that we do not wish to do so. We want to know where Tory Members stand on this issue.
  Privatisation will do nothing to restore the public's right to a say in how water services are run. Already the voice of consumers and local authorities has been stifled in preparation for the sell-off. Authorities meet in secret and the public interest is denied.
  A further result of deliberate Government policy has been that semi-accountable authority memberships were dissolved to be replaced by much smaller executive boards appointed directly by the Secretary of State for the Environment. That move brought the new breed of business managers into the industry. Nine out of 10 of the new boards immediately elected to meet in secret.
  No public service is as basic and universal as water supply. None is as fundamental to our very existence. Irreconcilable conflicts remain between the public health and well-being, the interests of shareholders and market forces. It was those conflicts and the crucial national issues of water purity, public health, coherent policies for pollution control and sewage disposal, strategic investment and security of water supplies that originally caused water to become a public utility and monopoly. We cannot accept that matters of individual and environmental health should become the plaything of the stock exchange. There
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  remain overriding reasons for retaining our water industry in public ownership and control, and that is why we shall oppose this Bill tonight.
  Several Hon. Members rose——
  Madam Deputy Speaker (Miss Betty Boothroyd): Order. I need hardly remind hon. Members that we have had a late start to this debate. I know that many hon. Members wish to speak, so I appeal to all hon. Members for brevity to help each other out.
  7.7 pm
  Mr. Malcolm Bruce: I beg to move, as a manuscript amendment to the motion, to leave out from "That" to the end of the Question and to add instead thereof:
  "this House declines to give a Second Reading to a Bill which links two essential utilities which are quite different in their organisation and, whilst increasing their powers in advance of privatisation, fails to guarantee that the private monopolies ultimately to be created will be sufficiently regulated to ensure that they are fully responsive to consumer needs, and which makes inadequate provision for promoting effective competition in electricity generation and transmission."
  The Bill links two public utilities that provide vital public services that operate in quite different ways. It is typical of those that have been introduced by the Secretary of State in that it seeks sweeping powers, as specified in the first clause, to do anything of an ill-defined nature. The Bill is riddled with loopholes.
  The issue before the House is not simply one of privatisation. We must recognise that privatisation has already gone so far that it cannot be quickly reversed. With the Government's majority and a full Parliament ahead, a future Government face the reality of all the major utilities in this country being run as private monopolies. Dealing with the consequences of that will inevitably be a task for a future Government who are concerned, as this Government are not, with reconciling the need for public service with the natural desires of shareholders to exploit their monopolies for maximum profit.
  Some opponents of the Government may be smiling at the stock market roller coaster that we have all witnessed this week, with all its implications for future privatisation. I am not one of those who are smiling, for two reasons. First, I support the sale of the remaining BP shares and, secondly, and more important, the Government have offloaded all the shares on to guarantors. That means that a great deal of City cash will be tied up digesting that flotation; it will not be available for investment in other sectors to create wealth and jobs. That aspect of privatisation is constantly overlooked, especially by the Government. The billions of pounds that are involved are taken out of circulation. On a bull market this may be for only a short time, but on a long bear market it may be for very much longer, and that is something that the Government may have to contemplate.
  The process of delivering essential utilities in the future by means of the powerful private monopolies that have been created by the Tories will increasingly come under scrutiny. In the past few months we have seen evidence of the down side of privatisation.
  The way in which electricity currently operates cannot be defended. It uses its statutory requirement to keep the lights on as an excuse for wasteful investment and inefficiency. Despite the Department of Energy's aim of a

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  20 per cent. energy saving during National Energy Efficiency Year, electricity consumption increased. None of the targets for the electricity industry set by the Department of Energy has been achieved. The industry's response to rising demand has not been to promote energy conservation and efficiency but to build massive new power stations of questionable economic efficiency which are incompatible with the development of combined heat and power as the most efficient form of power generation. I do not defend the present structure and organisation of the electricity industry.
  Industrial energy users will testify to the lack of any real competition in energy. The privatised gas industry bases its prices on the price of oil. I am told by industrialists in my constituency that whenever a tanker is torpedoed or shelled in the Gulf the phone rings and British Gas says, "You've heard the news, haven't you? We are increasing your tariff." There is no reference to the cost of producing gas or to the fact that if an industrialist was not using gas he would often be using coal, not oil.
  We must not allow the Central Electricity Generating Board to hog-tie the Government the way that British Gas did. The Government should consider breaking up the electricity industry if they are to privatise it. This might be done in a number of ways. It could be broken up into generation, distribution and marketing or into regional corporations, possibly integrated on the model of the Scottish boards. However it is done, it is obvious that a substantial core monopoly will remain which will not be regulated effectively by competition or the operation of the market.
  The industry must be strongly and effectively regulated by an agency with teeth — teeth to intervene on and control prices and to require that greater attention be paid to energy efficiency and choice. After four years more of this Government so many utilities will be in the private sector that it might be appropriate to draw the agencies together so that they can pool resources and learn from experience.
  I spent time in the United States last year finding out how public utilities operate there. I was impressed by the way that public utilities commissions operate. Without exception, amazement was expressed, by Republicans as well as Democrats, that the British Government should privatise utilities as central monopolies without real competition or adequate regulation. I remain convinced that we shall have to put that right. We also need some kind of anti-trust powers so that monopolies can be examined and be broken up to enforce competition. Because of the Government's record and the sweeping terms of the Bill, we need more detail of Government thinking before the House can be expected to support the Bill.
  An open-minded approach to the privatisation of electricity might yield useful answers to the problems that British Gas and British Telecom are now manifesting. We should improve the operation and accountability by the electricity industry, but water must be viewed in a different light. The case for privatising water has not been made by the Government on anything but ideological grounds. The requirements for centralisation are greater than ever.
  Mr. Archy Kirkwood: Does my hon. Friend agree that the pledge by the Government during the election campaign and ministerial
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  statements since did not address this question? The opportunity was not taken to argue the case in detail and that is disgraceful.
  Mr. Bruce: The situation is worse than that because the Government gave the impression that they accepted the case against the privatisation of water, but now that the election is out of the way they have decided to introduce a measure on which they would have been defeated.
  My party led the original opposition to water privatisation proposals and had considerable support in the House. The proposals were eventually withdrawn. We are dealing with an ideological argument which does not stand up to close examination. We believe that there is no serious case for consideration.
  The proposal involves the possible introduction of metering — which has not been required before — for which there is no demand, which is not developed and which is likely to prove costly. Such an investment would be better used to upgrade our sewerage systems.
  Sir Eldon Griffiths: I helped to put the 1973 Act through the House when metering was debated at length. I was supported by the hon. Gentleman's party. Does he now wish to deny people the choice of metering?
  Mr. Bruce: No. I am not suggesting that we should deny people the choice of metering but that the imposition of metering is not needed and there is no demand for it. There is merit in metering but it should not be imposed.
  Mr. Allan Roberts: The Government propose to deny choice. They want to introduce compulsory metering. The legislation introduces compulsory metering in 10 pilot areas, which have been named. If the Government believe that the schemes justify metering it will be applied throughout the country, and freedom of choice will again be destroyed by this Government.
  Mr. Bruce: The metering issue has not been adequately resolved. The Bill states that water authorities will be able to impose whatever charge they think fit. It is not clear who will pay or whether the money could be better invested.
  A National Rivers Authority has been proposed by the Minister as a sop to the environment lobby. If the Government insist on privatising the water industry such an authority is necessary. Whatever the increasing incidence of pollution, there is a need for a strong standards body, especially if we are to replace publicly accountable organisations with commercial corporations. The central reorganisation, in advance of privatisation, presents technical difficulties. The new system would have to be organisationally uniform and the existing private authorities would be swept away.
  The Bill confines itself to England and Wales. In Scotland water authorities were reorganised with local authorities in 1974. The system there is deemed to work reasonably well. The problems of inadequate and polluted water supplies in rural areas—a big problem in Scotland — are being tackled, but rather slowly because of Government constraints on local authorities. Would private companies be interested in dealing with those problems? Would a privatised electricity industry be interested in taking on the social responsibilities of the North of Scotland hydro electric board for bringing power to the remote farms and glens? I know that the Government have not yet proposed privatisation of water

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  in Scotland. There are valid reasons against such a move, and those reasons also apply to many parts of England and Wales.
  The real tragedy of the privatisation exercises to date is that substantial sums have been diverted that would otherwise have been injected into the economy in the form of investment. However, the Government have dressed up the privatisation sales to attract customers. Until this week, the Government have misled many people into believing that share owning was a no-lose, no-risk venture. It is not surprising that so many people took up shares. However, it will be interesting to see how many people take up the offer of BP shares next week, given the more declining market.
  A major innovation required for the effective privatisation of water is metering. The House must know who will pay the cost of installing meters. It is estimated that that operation will cost £100 per household. That represents substantially more than £1 billion. I believe that we have enough experience of the way in which the Government go about privatisation to guess who will pay—the taxpayer. If the Government get away with it the taxpayer will pay for the cost of the installation in advance of privatisation. In those circumstances, the shareholder will pick up a bargain as all the costs will be expended at the taxpayer's expense and across the board. It will represent a bonus to the private shareholder.
  I believe that metering discriminates against those who need water most. That is not an argument against metering as such but it is a consideration against the imposition of metering right across the board. The people who would be most affected would be those with young families. I seriously suggest that if people start to think about the amount of water they use as a significant cost it will have health implications. It will discourage people, especially those on low incomes, from using water for essential purposes.
  The gathering, delivering and treating of water is fairly expensive, but water in this country is freely available. Indeed, in the past 48 hours it has been more freely available than many people would wish. In an island where there is a general abundance of water, will the introduction of widespread metering lead to people being cut off for non-payment as has been the case with gas and electricity? They may be cut off from the supply of something that is vital to human survival.
  Mr. Martin M. Brandon-Bravo rose——
  Mr. Bruce: I appreciate that I have been on my feet for a significant time, but there are a number of points that I wish to raise and I believe that I am moving an important amendment.
  I suggest to the Minister that if the 13-year bull market is about to be replaced by a long-standing bear market or a stagnant market the inducements that the Government will require for further privatisations will mean that all taxpayers and users of public services will have to pay even more towards ensuring worthwhile premiums for shareholders. Those inducements represent sums that, frankly and disgracefully, the Government would not contemplate investing in research, industrial development, infrastructure, education, health and welfare, all of which are crying out for funds, but which the Government tell
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  us are unavailable. However, those sums are available for massaging the accounts of proposed privatised industries in advance of flotation. That is a disgraceful misappropriation of public funds.
  I believe that the proposals in this scrappy and inadequate Bill have been drafted in a typical fashion by the Secretary of State. He has asked for widespread powers without specifying in advance what he proposes to do and he is asking for a carte blanche from the House. We know from experience that what the Government are talking about is not the promotion of competition, accountability and the nice spirit of free enterprise. It is about creating another tranche of vital monopolies, inadequately regulated and not exposed to proper competition.
  The Government's record on attacking monopoly and promoting competition is a national disgrace. That record betrays everything that the Conservative party once stood for. As the Conservatives will not fight monopoly and will not promote competition, I am glad to advise the House that my party most certainly will, and I urge the House to support our amendment.
  7.24 pm
  Sir Eldon Griffiths: I will accede to your wish, Madam Deputy Speaker, that speakers should be brief so that as many people as possible can speak.
  I declare an interest in this matter as the Minister responsible at the time for carrying the Water Act 1973 on to the statute book. At that time I became, I freely admit it, intensely interested in the water industry. It is a complex industry and a vital one. The Bill that the House is considering today is therefore of great importance. It is no more than a paving measure, but it is a necessary one for the privatisation that I hope to see on the statute book this Parliament.
  There are three issues I wish to raise. First I raise that of water metering. The power for water meters to be provided was included in the 1973 Act against the opposition of the Labour party, but with the support of the then Liberal party. I could not make out from the speech of the hon. Member for Gordon (Mr. Bruce) whether he was for it or against it, but it is clear from the speech from the Labour Front Bench that the Labour party will continue to be opposed to the metering of water in this country.
  Mr. Allan Roberts: The Labour party is not opposed to the metering of water in this country. We are in favour of people being able to choose whether they pay through the rating system, as at the moment, or by having a meter installed. What we are against is the compulsory imposition of water meters and the destruction of freedom of choice that is proposed in this legislation.
  Sir Eldon Griffiths: The hon. Gentleman has succeeded in totally confusing the House. Everything that was said by his colleague on the Front Bench suggested that the Labour party was opposed to metering. Indeed, it registered that opposition in the Division Lobby in 1973 when metering was first proposed.
  Mr. Roberts: We are opposed to compulsory water metering. We are not opposed to people having choice. That is what my hon. Friend the Member for Copeland (Dr. Cunningham) said and that is what I repeat.
  Sir Eldon Griffiths: Unfortunately, the hon. Member for Bootle (Mr. Roberts) was not here when his party voted against metering in principle. Indeed, at the time the Labour party suggested that it was a tax on cleanliness.
  I hope that metering will proceed. However, it is a complicated matter. Metering is complicated because, as yet, we have no foolproof meters. I have examined a whole series of possible meters. Some work, some do not. As yet, we have not got a satisfactory meter. Then there is the difficult problem of retrofitting meters in multi-occupation dwellings. That is exceedingly difficult in large cities. There is the problem of the cost of the survey before meters can be installed. People do not like paying for the cost of a survey. There is also the cost of installation. So far, that cost has been far too high.
  The water authorities have dismally failed to market the advantages of metering to their consumers. Indeed, until a few years ago water authorities, for the most part, were rather hostile to metering based on the technical problems that I have described. One of the reasons why there has been such a small take-up of meters in this country is simply because water authorities have not promoted and marketed the advantages to consumers. I hope that metering will be introduced.
  I also wish to deal with the National Rivers Authority. I must say to my right hon. Friend the Secretary of State that I do not like it. I wish that he had stayed with his original proposals. Of course, I accept what my right hon. Friend has said about his change of heart and I do not dissent from that. However, I am bound to say that there is a wide impression that my right hon. Friend was got at. I would have preferred that my right hon. Friend had stayed with his original proposals.
  If the 1973 Act has been a success—I believe it has—it is for two reasons. First, because the water cycle is managed as a whole. For the first time we were able to handle the clean water and the dirty water together. Ever since, the hydrological cycle—I do not like the term, but it is the appropriate one—has been managed as a whole and that is the central reason for the success of our water authorities. Secondly, the success of the 1973 Act lies in the principle of integrated water basin management. This too has been central to the work of the authorities.
  I fear that the NRA will damage both those concepts. It will intervene at the very least in the principle of the water cycle being managed as a whole and it could have implications for the multi-functional operations of our water authorities across river basins.
  I wish that my right hon. Friend the Secretary of State had not brought forward the proposal. However, we must wait for his paper and no doubt when it is produced we shall discover the exact details and parameters of the new authority. But I should like to leave this simple thought with him. Let him keep his new rivers authority, if he must have it, as a monitoring and supervising body and perhaps as a regulating body, but not as an executive body. Let it stay out of operations. Let it not create a large bureaucracy with executive functions. If that happens, it will create all sorts of demarcation disputes with the plcs. It will cost far more than necessary. It will confuse the central features of our water industry. Therefore, let the new body supervise and monitor. Let it not be an operational and executive body.
  As and when privatisation comes about, for which the Bill opens the door, two further issues on water will need to be tackled, too. First, our water authorities still carry
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  a great deal of debt. Thanks to improving management and improving economies, much of that debt has been met, but a great deal remains. Some is the ancient, historic debt that the authorities inherited from their local authority predecessors. Some of it is Public Works Loan Board debt, which is probably the largest single amount. A third portion is borrowed from the European Investment Bank. Those three types of debt will need to be dealt with. It will be important to those invited to buy shares in the new plcs to know how that debt is to be handled.
  This of course will be a problem for the House. I should not be in favour of simply writing off the debt because ultimately that would be unfair to the taxpayer. It would be right, I think, to get rid of the historic debt inherited from the old local authorities at the time of the Water Act 1973. But it would also be right to insist that the new private companies shall carry the full burden of the debt that has been borrowed from Europe and, indeed, from the Public Works Loan Board.
  Secondly, we shall need to deal with the pensions of the water authorities' staff.
  Neither of those points is germane to the Bill before us but as we are paving the way, I have taken the liberty of mentioning them to my right hon. Friend because they will have to be dealt with.
  I have no doubt that privatisation is not only right but will be popular. It will ensure that we have a better, not a worse, water industry. But it is essential that in proceeding towards privatisation we do not destroy the basic pillars on which the 1973 Act was constructed—that is, multi-function management of the entire water cycle and authorities that are based on a total river basin management system.
  7.35 pm
  Mr. David Hinchliffe: This is the first opportunity that I have had to make a contribution on the Floor of the House. I hope, Madam Deputy Speaker, that you will allow me to preface my remarks on today's business with a brief reference to one or two wider issues relating to my constituency.
  As some hon. Members may be aware, I had an unfortunate start to my period in the House in that I developed chicken pox during the weekend following the Queen's Speech and was confined to my home for the subsequent three weeks. I was fortunate in being able to call upon my predecessor, Walter Harrison, to cover my surgeries and assist with constituency work during my illness. The local paper in Wakefield reported his comments that his retirement had been "a little shorter than expected", but he was happy to help out.
  I have mentioned that one incident because it is typical of the help that Walter has given me since my selection as his successor, during the general election campaign and since my election to Parliament. It is a pleasure to he able to pay tribute to a man who is so widely respected on both sides of the House.
  While Walter will be remembered for his undoubted skills in the Whips' Office, he was also very much a constituency Member. Wakefield was his home and he gave much to his constituency during the 23 years that he represented it. I know that Walter would be the first to admit that he could have achieved little in politics without the excellent support of his wife Enid. Unfortunately, in recent years, as some hon. Members may be aware, she has

  789
  not enjoyed the best of health and I am sure that the whole House will wish to join me in expressing the hope that she has better fortunes in future and that they can both enjoy the long and happy retirement that they so richly deserve.
  I have a hard act to follow. One of Walter's major regrets on his retirement concerned the enormous increase in unemployment in Wakefield in recent years. Nearly 5,000 people are officially unemployed in the constituency. The real figure is much higher and would include, for example, men below 60 who have been instructed not to sign on but still receive unemployment benefit. Like many areas in the north, Wakefield has been hit by the rundown of its basic industries and the knock-on effect in other types of employment. Since 1979 six coal mines have been shut in the constituency and many others providing employment for Wakefield people in adjoining constituencies have also been closed. Since the present Government came to power, some 10,000 mining jobs have been lost in the Wakefield district and precious little has been done at national level to create new prospects for those leaving school and coming on to the employment market.
  In the past few days we have had in Wakefield the appalling news, which was referred to by my hon. Friend the Member for Barnsley, West and Penistone (Mr. McKay), that British Coal proposes to close Woolley colliery in my constituency, along with the nearby Redbrook pit in the Barnsley area. The total of job losses will be over 1,300 if British Coal carries through its present proposals. I can promise it and the Government that their plans will meet with the strongest opposition from the communities in the Wakefield and Barnsley areas that are directly affected, from the trades union movement and from hon. Members whose constituencies are involved.
  What seems to me to be so irrational about the present Government policy is that the profitability of an individual pit is judged in complete isolation from the wider implications of a pit closure on other local industries, the local service sector and employment prospects. Figures are given detailing the cost of keeping a so-called loss-making pit open, but we never see the real figures of a closure in cash terms. It has been estimated by the local authority in my area that the annual public cost of keeping someone unemployed in Wakefield is £8,300. The average annual wage is only £300 more than that figure and it would make more sense to invest public money in job creation than in job destruction.
  To turn now to the Bill, having mentioned Walter Harrison, I should like to mention another predecessor. Mr. Thomas K. Sanderson, who was Tory Member of Parliament for Wakefield in 1876 when water supplies were taken into public ownership. He summed up the quality of private water in Wakefield at the time as being "pretty near equal to sewage". His comments were evidence of the political consensus over a century ago on the need for water to be taken into public ownership. It is worth noting that it cost the people of Wakefield £164,904 for the privilege of owning their own water as well as paying off the debts and court costs of the previous owners. The costs had to be met as part of the battle against cholera and other diseases that were prevalent at the time.
  It is also interesting to note that the philosophy behind the proposed legislation that we are discussing today was rejected even by political cavemen of the Tory Right in
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  Victorian times, yet the present Government are rummaging around in the dustbin of history to turn the clock back on yet another issue.
  Like most other hon. Members, I have received vast amounts of correspondence from individuals and organisations that are opposed to the Government's proposals for the water industry. It is interesting that much of the opposition comes from the private business sector, which normally might be expected to favour such a strategy. Within the past week or so I have received two letters about this matter which are worthy of mention. The Kirklees and Wakefield chamber of commerce and industry wrote to me on 8 October stating that Government thinking on water privatisation appears "somewhat nebulous". In its view,
  "water, of all the essential services, needs to be properly handled but unfortunately the proposals lack clarity and would do little to encourage an efficient and responsible service".
  The Confederation of British Wool Textiles wrote to me on 12 October and said:
  "as a matter of principle we do not believe that any public utility, providing services so fundamental and where customers have no choice in using its services should be allowed to pass into private hands."
  While there is now some doubt as to whether those organisations have written to the correct Member of Parliament, according to a letter I have received from the Department of the Environment, my constituents have been selected, without their consent, my consent or that of the local district council or health authority, to act as guinea pigs in a pilot scheme designed to pave the way for the wholesale introduction of domestic water meters and water privatisation. They are to be conscripted into a scheme designed to get the Government out of the unholy mess they are in regarding post poll tax water charges. It is a scheme to satisfy those backers of the Tory party who are lusting after the huge profits to be made out of the fact that people cannot avoid using such a basic essential as water.
  If it is true that Wakefield is to be included in those trials, I resent strongly the fact that my constituency is being pushed into the front line of a policy that will bring a financal penalty on personal sanitation and hygiene. Low-income families—there are many of them in my constituency—will find themselves having to cut down on flushing the toilet and washing themselves and their children on a regular basis in order to save money. The implications of that for the health of the nation must be obvious, even to the Government.
  Without doubt, the proposals to sell off these public utilities and to meter the domestic use of water are evidence of the fact that the Government have stooped to new depths in their attempts to raise further revenue for tax cuts. The events of the past few days have illustrated beyond doubt the possible implications of throwing vital services such as water and electricity to the mercy of stock markets. I hope, even at this late stage, that the Government will recognise the extent of public opposition to this issue, see sense and withdraw the proposals.
  7.41 pm
  Sir Giles Shaw: I congratulate the hon. Member for Wakefield (Mr. Hinchliffe) on his maiden speech. It was delivered with the punch and pugilism we have come to expect from the Member who sits for Wakefield and, knowing as we do the illustrious way in

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  which his predecessor operated in the House, I cannot help but feel that he has made a worthy start to his career here. I have to take good note of the fact that his marginal seat improved somewhat at the election so it may be right that we should offer him good fortune in the times ahead.
  I should begin by declaring an interest in that I am a consultant to a company which numbers among its clients the Water Authorities Association. However, my interest in the water industry precedes that. Like my hon. Friend the Member for Bury St. Edmunds (Sir E. Griffiths), I have had two years ministerial involvement with the water industry.
  The comments that have been made about the proposals for privatisation both within the industry and outside are somewhat sensitive to the proposals the Government have now put before the House. This is a paving measure, but it is perfectly right that we should look at this measure as if it begins to encapsulate the proposals in the Green Paper currently under discussion. If I understand it correctly, in clause 1(6) there is provision for the existence of a body which has not yet been created. It sounds as if it will be the National Rivers Authority. It states:
  "References in this section to a body corporate shall include references to a body corporate which has not been established or formed but which may be established or formed in pursuance of a proposal of the Secretary of State."
  I suspect that that is the legal definition for the forthcoming National Rivers Authority.
  I should like to make two observations which I hope that my right hon. Friend the Secretary of State will take seriously. If we are to proceed down the route of privatisation, which I believe firmly that we should, it will be in the Government's interest to ensure that privatisation is well received within the industry, is properly explained and understood and, above all, properly sold within the regions in which it will operate. This is about the only proposition I can think of that is a truly regional prospect for privatisation. The 10 water authorities, stemming as they did from the Water Act 1973, have well established themselves. They have created a substantial record of improvement in water supply, quality and amenity and, as far as I am concerned, have provided an increased and better service and met most of the demands laid upon them whether for improved flood control and prevention, improved supply and quality or genuinely fresh access to many of their important public amenities.
  We must not consider privatisation as a measure seeking to remove an industry that has failed. Far from it. We are considering privatisation as a further step along a natural way to improve the quality of water supply in this country. The water industry is a major technical industry. It is high in capital assets, relatively low in manpower, high in technology, has many of the aspects of high-tech industry, and we must treat it as such. Its biggest single restraint in recent years has undoubtedly been the restraint of capital and, as hon. Members have already observed, it is the restraint of being part of the PSBR or the national loans fund that has prevented many of the major schemes from moving faster or as fast as the authorities would have wished. Therefore, if the water authorities are to become public limited companies, as I trust they will, we must look to them to be able to raise capital, manage their assets efficiently and be able to produce an adequate return for shareholders and investors.
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  My hon. Friends have rightly drawn attention to the fact that the idea of a National Rivers Authority is not only a reversal of a previous proposal but it would appear to be different from the concept of the river basin management around which the 1973 Act was framed. I believe that that is reconcilable and I hope that when my right hon. Friend the Secretary of State looks in more detail at the responses to his Green Paper he will consider how far the National Rivers Authority can be rooted in the regions it will supervise. It should be a regionally based authority, not a national authority. The control of the water catchment within its region should be its major contribution. I note that it is to be charged with resource planning. If there is to be a dichotomy between operational planning and resource planning, one is in for trouble. Therefore, it is vital that, if my right hon. Friend proceeds with the National Rivers Authority, he should make it sensitive to operators as well as planning for the overriding controls for pollution, abstraction and discharging. That would be a perfectly sensible thing to do.
  If the public limited companies are to be established correctly they need real clarity of distinction between the role of the rivers authority in their region and the role of the privatised plc. I trust that my right hon. Friend will use the time available to him to lay out clearly the role of the rivers authority and, I hope, to persuade the water authorities that they can accept a National Rivers Authority, not as an interference with operational management but as a contribution to maintaining the regional catchment, dealing with the conservation, amenity and pollution control aspects and allowing the plc to manage the resource properly from the start to the finish.
  If my right hon. Friend the Secretary of State wished to centralise the National Rivers Authority and make it large in staff he would be creating a vehicle through which a Labour Government, should they ever be returned, would find it extremely easy to return the water industry to public ownership. That is what the Labour party wants to do. The hon. Member for Copeland (Dr. Cunningham) set that out as his objective. Therefore, it is vital that the National Rivers Authority should not be a vehicle that can be a quick bypass to public ownership of the water industry again. I am sure that my hon. Friend the Member for Bury St. Edmunds would agree that we cannot afford to have the water industry uprooted time and again as it seeks to fulfil its prime duty, the supply of water to the country. It is a duty it has discharged admirably over the past 14 years and I trust that it will discharge that duty in the private sector not only with extreme care, quality and efficiency but with profit.
  7.50 pm
  Mr. Dafydd Wigley: I wish to add my congratulations to the hon. Member for Wakefield (Mr. Hinchliffe) on his maiden speech. Coming to this place takes us all in different ways, but this is the first time that I have heard of chicken pox breaking out, and I offer my sympathy on that. We all had great respect for his predecessor, Walter Harrison. Members on these Benches could write a book about our relationship with him when he was in the Labour Whips' office, but that must wait until another time.
  I wish to respond to the hon. Gentleman's comments about the need for strong regional logic in the proposed changes. That theme has run through many of the

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  representations that I have received from Wales. I recognise that similar arguments apply to Yorkshire and elsewhere. We appear to be facing the impending privatisation of two of our most important fundamental industries—water and electricity. On behalf of the joint Plaid Cymru and Scottish National party parliamentary group, I wish to put firmly on the record that we are fundamentally opposed to the privatisation of the water industry in Wales—this Bill does not apply to Scotland — and the electricity industry in both Wales and Scotland. We shall continue to hold that fundamental position as the greater detail of the legislation comes before us in later stages.
  As hon. Members have said, the Bill is a bit of a mess because it refers to bodies that have not come into existence, such as the National Rivers Authority. In the memorandum, it is referred to tangentially, but is not named in the body of the Bill, and nowhere is it defined. That is very unsatisfactory. Does "National" mean an English national authority? Will there also be a Welsh rivers authority? Will there be a British national authority, in the way that the House usually uses that term, or will we have a new nation called England and Wales? At the very least, the term is unsatisfactory, but even more so is the lack of clarity about the Government's intentions, whatever terminology is used.
  We are strongly opposed to the concept of a centralised rivers authority, and that point has also been made in representations about the Bill. The Welsh water authority, in its reaction to the proposals, stated:
  "In Wales there are political and organisational considerations which will need to be met by a further degree of regional devolution, whatever structure is established for the English regions … The special sensitivity of water-related issues in Wales is acknowledged in the current arrangements … The six functions which it is proposed to transfer to the NRA have a very high public profile in Wales. The NRA will be responsible for the most visible and attractive features of the water environment in Wales, i.e. rivers, estuaries and coastal waters, as well as for some of the most controversial functions such as pollution control and land drainage. These cannot be run from England."
  In referring to the need for clear policies, it stated:
  "but the sensitive and sensible implementation of those policies within Wales must be tackled by a semi-autonomous body which retains close links with the Welsh Office and with the other Government Departments which take lead responsibility for discrete functional areas of NRA business."
  It is important that that reponse is written into the record because that body has been responsible for water in Wales since the implementation of the 1973 Act.
  There have also been representations from farmers unions. The Farmers Union of Wales said:
  "Wales should have its own water supervisory body responsible to the Secretary of State for Wales … a separate Welsh National Rivers Authority responsible for the area covered by the Welsh Water Authority should be established and be made responsible to the Secretary of State for Wales. All water catchment, storage and the regulatory assets should also come under the WNRA."
  That is an important consideration because of the distinct geography of Wales. Indeed, we have seen the effects of floods during recent days. Land drainage and other such aspects are integrally related to agriculture in Wales, which of course comes under the Welsh Office.
  I was, therefore, pleased when I received a reply, dated 23 September, to an inquiry that I sent to the Secretary of State for Wales, stating:
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  "You are concerned that the proposals do not provide for a separate Rivers Authority for Wales. Let me therefore begin in stating that I personally have not totally ruled out this possibility".
  I hope that that is the Government's current position and that the options are open and will be given full consideration.
  As the Welsh water authority suggested, water is a highly emotive subject in Wales. We have to think only of the drowning of the Tryweryn valley 30 years ago to provide water resources for Liverpool, which caused enormous tensions. One of the good things that came out of it was the creation of the Welsh water authority, so that we had a body and a forum that was able to develop a strategic approach to water resources in a way that respected the wishes of local communities. If there is a centralised rivers authority without sensitivity to that dimension in Wales, the great danger is that once again will emerge the tensions and the exasperation that we suffered because of the Tryweryn drowning in the 1950s and early 1960s and, to a lesser extent, with the Clywedog reservoir in the late 1960s. That needs to be avoided and must be thought about at this stage — it is no use regretting it later.
  There is a close link between the control of water resources and agriculture, environmental policy, sport and tourism in Wales—all of which come under the Welsh Office. Wales has problems in upgrading its sewerage operations and there is a vexed question about the standard of beaches in Wales in view of the comments from the EEC about them, both of which underline the need for a coherent approach to public policy in that area. If one body takes away the powers over rivers and water storage from the Welsh Office, it will be difficult to achieve a coherent approach. Therefore, tonight I am looking for an assurance that the Government still have an open mind on setting up a separate Welsh national rivers authority in line with the comments in the Secretary of State's letter.
  I come now to the privatisation of water distribution, and in passing note that the experiment with metering will not take place in Wales. Of course, there is some metering in Wales and there is scope for further metering. However, as other hon. Members have said, it should be voluntary rather than compulsory. There are great fears for public health policy if charges are made on the basis of usage. Poor families have the greatest need for water, and such a policy might encourage them not to use the water that they need.
  The level of water charges in Wales has been a matter of consternation for many years. There are various reasons, some related to geography and some to history, for the level of charges being high. If the privatisation of the Welsh water industry is to be of any interest to any commercial concern, if an asset base of £1,600 million is to give a return sufficient to justify private investment, there will have to be either an enormous increase in the charge for water or a write-off of an enormous part of the asset base of the existing historic debt. A case can be made for writing off that debt — as was made by the hon. Member for Bury St. Edmunds (Sir E. Griffiths)—but that could be done now. If that historic debt were written off now, the level of water charges in Wales could come down to below the average in England and Wales. Therefore, if we are happy to go down that road, let us do so immediately. Let us write off the historic debt and have reasonable water charges in Wales. What is not acceptable

  795
  is that those historic debts should be written off, at public expense, to enable people to make private profit out of water. Certainly it is not acceptable that the level of charges for water in Wales should be even higher than they are now simply to fund private profits out of this most essential of provisions.
  Mr. Richard Livsey: Will the Minister give us an assurance that, should water be privatised, water charges——
  Madam Deputy Speaker: Order. The hon. Gentleman is intervening in the speech of the hon. Member for Caernarfon (Mr. Wigley).
  Mr. Livsey: I apologise, Madam Deputy Speaker. Does the hon. Gentleman agree that water charges in Wales should be equalised with those in England and that, should water be privatised, we should extract promises to that effect from Ministers?
  Mr. Wigley: I am grateful to the hon. Gentleman for addressing me as the Minister. I have not quite taken over that role yet, and I am not sure whether, with this hot potato, I would wish to.
  It will certainly be unacceptable to have the worst of both worlds. Either we have a structure that does away with historic debts and allows us to work on a reasonable commercial basis, without the millstone that leads to the present high charges, or we should have an even charging system. The worst of both would leave us with high charges and no ability to do anything about it.
  I want an assurance from the Government that the powers given by the Bill in relation to the privatisation of water distribution may be used by the Welsh water authority to investigate the possibility of having in Wales a variation on the concept of a purely private company, which is being considered in regions of England—the possibility of having a national consumer co-operative in Wales. The matter has been considered by members of the Welsh water authority and has some attractions, given the interest that has been expressed in such bodies in Wales. It might bring some of the benefits which the Government are seeking from independent, free-standing commercial bodies, with answerability to all the people of Wales who, as consumers, would be members of that co-operative.
  Is it possible to investigate going down the road that has been taken in Scotland? No changes will be made to the water structure in Scotland, and I should be interested to know whether the Government have closed their mind completely to the possibility, given the different historic and geographic position, of municipal water supply in Wales. I realise that that goes beyond this Bill, which relates purely to privatisation, but I would like to think that the option has not been closed completely.
  Electricity has a major significance in Wales and Scotland. It is significant in Wales because of the production of electricity from coal, hydro-electricity, nuclear power stations—of which there are two in my county — pump storage schemes and the possibility of the Severn and other barrages. It is an important dimension of our economic and employment policies, as well as our energy distribution. The CEGB has a very good record of efficiency. That came home to us last week, when there was such a crisis when electricity was lost for a few hours. It showed how much we take electricity for granted. Unfortunately, in Wales, we lose electricity supply more
  796
  frequently and perhaps we value it more as a result, but there is a good track record in the production and distribution of electricity. I cannot see how the privatisation of electricity will make anything more than a nonsense of a coherent energy policy. The mind boggles at the thought of going to the extreme—nothing in the Bill would prevent it — of privatising nuclear power stations. What will be the cost of decommissioning power stations? More importantly, what are the implications for the safety of employees and the communities in which those stations are located?
  Those questions have not been answered and were riot aired in the general election campaign. The Government do not have a mandate to privatise such basic industries, and if the people were asked in a referendum I am sure that they would reject the idea. There is scope for small-scale alternative local production of electricity, but that is different from the privatisation of the backbone of electricity production and distribution. The House should consider it deeply before going down that road. As the Bill prepares the way for that road, the SNP and Plaid Cymru will vote against it.
  8.4 pm
  Mr. Charles Morrison: As time is short, I shall limit myself to a few thoughts on the future structure for the electricity industry and for water. There is a distinction between the two subjects.
  My right hon. Friend the Secretary of State for Energy has a range of possibilities to consider, but I am glad that he has already given an assurance that the electricity industry will not be sold as a monolithic corporation. That is a good starting point, but he has gone further and said that there is no natural monopoly in generation and no justification for monopolistic practices in transmission. That may be so, but if Central Electricity Generating plc — as I imagine it will be called — is not to have a monopoly, there must be safeguards. If it does not, its incentive to make the hugely expensive and long-term investment, with a slow return, in nuclear power stations, which I believe are necessary, and to a lesser extent in other power stations, will be seriously affected. In this context also I take note of the comments of the hon. Member for Caernarfon (Mr. Wigley) about the cost of decommissioning nuclear power stations.
  If area electricity plcs, succeeding area boards, are to be allowed to generate at least part of their energy requirements—I do not know whether they will, but it has been suggested that they might—and if therefore they are allowed to become producer retailers, in equity Central Electricity Generating plc should also be allowed to become a producer retailer. In general, it might not wish to be so, but for some large customers it might.
  It is worth remembering that the present structure of electricity boards stems from 1948. It would be a miracle if the structure that was established in 1948 was the best structure for 1987. Thus, I thought that there was a case for restructuring electricity supply before privatisation, but on second thoughts the existing structure and boards are well known and it may be wise to privatise them on their present basis and thereafter leave it to the public limited companies and the market to devise new structures when or if necessary.
  The Secretary of State properly emphasised the importance of customer rights. Therefore, I presume that he intends to keep, in some form, the area electricity

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  consultative councils. But I doubt whether it is necessary to retain the national Electricity Consumers Council. The combination of the area councils and the market should ensure a good service at competitive prices without extra intervention. In one sense, competition already exists. The area boards and the Electricity Council publish annually a huge range of comparative performance indicators, as does the CEGB. Those indicators have been a salutary check for each board, and there is no doubt that boards take careful note of the performance of other boards.
  Traditionally, the Conservative party has conserved what is best while reforming where appropriate and necessary. There is no doubt that the best aspect of water is the integrated river basin system. It is the envy of and the pattern and blueprint for many other countries and it should be retained. That means that the Government's first thoughts on privatisation in their White Paper were better than their second thoughts. I understand why the Government changed their mind. They were bowing to the concerns expressed about the responsibility for regulatory and river management functions being held by public limited companies.
  It is refreshing to note that the Government are prepared to take note of what people say about White Papers and other consultative papers. However, now we are faced with the proposal that plcs should be responsible for the water supply, sewerage and sewage disposal, making up 90 per cent. of existing water authority business; but the remaining 10 per cent., as well as the river management and regulatory functions, should remain in the public sector under the proposed National Rivers Authority. In other words, the river basin management system is to be disintegrated.
  I fully accept the concern of the National Farmers Union and the Country Landowners Association. I am a member of both bodies, although on this occasion I happen to disagree to a considerable extent with some of their concerns. However, my right hon. Friend the Secretary of State for the Environment said in his speech today that it is not ownership that matters, but the regulatory system. So the argument should be about where the dividing line between public and plc responsibility should lie. I am glad to see my hon. Friend the Member for Lewisham, East (Mr. Moynihan) nodding his head in agreement. The Government have opted for what appears to be a simple division, but it is destructive of the river basin management system that some of us believe is of great importance. Thus, in my view, the plcs could be given more responsibilities and statutory duties, and a small N RA could be established with certain regulatory powers to be used if the plcs did not live up to their statutory duties.
  My hon. Friend the Member for Pudsey (Sir G. Shaw) has made the interesting suggestion that there should be regional, rather than national, river authorities. Obviously, there is a great deal to be said for that. It would be in line with the reaction of the National Anglers Council, of which I have the honour to be president. We should never forget how important the fishermen are. If that idea was pursued, if the plcs were given more functions than is currently proposed and if they were shadowed in a regulatory manner by regional river authorities, almost all the existing operational and managerial functions would remain together.
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  In this context, we should not forget the existence of Her Majesty's inspectorate of pollution, which already has responsibility for pollution. That being so, why is it necessary to duplicate its functions, as I understand is being proposed, in the powers of the National Rivers Authority?
  The sketch that I have outlined would lead to the retention of more of the best that we have in the world of water. There would be a number of small regulatory river authorities—smaller than what is currently proposed-and therefore a much less expensive system of quangos, and a better service for the whole community.
  8.13 pm
  Ms. Joan Walley: I shall confine my remarks to the water industry. The Secretary of State was right when he anticipated that the opposition from our side would be stated in terms of safety and public health, and those are the issues about which I wish to speak.
  We have already seen how nervous the Government are about the proposals they have come up with. They have every right to be nervous, as we have just heard from the contribution made by the hon. Member for Devizes (Mr. Morrison). Certainly, when I look around at the large number of organisations, at national and local level, which are concerned to oppose the proposals, and when I hear of people, not least Members of the House of Lords, who similarly oppose them, I believe that the Government have every right to be nervous about them.
  It has been said that it was Labour's intention to reverse the proposals, and that was why we wanted some degree of regional control. We do not want to reverse the proposals—we want to stop them getting on the statute book in the first place. We want to safeguard every aspect of health.
  I do not believe that the proposals for the privatisation of the water industry will be popular. They will certainly not be popular when members of the public understand that they will no longer be able to take a safe and healthy water supply for granted. Women will also begin to realise what the proposals mean when the large charges for water become evident. I am not suggesting for a moment that water is now up to the standards that it should be. It is ironic that when the Government's proposals for the privatisation of the industry were first mooted we were told that one of the reasons for privatisation was to remove all spending from the public sector borrowing requirement and to put it into private hands so that, suddenly, all the improvements that some of us had wanted for a long time could be achieved. I well remember the time when I was a councillor and wanted more improvements in sewage pipes, as well as in all kinds of different areas. The money for that type of improvement should have been available. However, during the past seven years, under this Government, those improvements and that money have not been made available, and, what is more, they will not be made available as a result of these proposals.
  There is no doubt that the water in one in four households is not up to the standard that it should be. As soon as the public realise that, they will oppose privatisation, not because they have economic reasons for wanting to invest in the water industry but because they

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  are afraid of landing up in the European courts. That is why they will not want to buy shares in the industry, when they are finally floated.
  We shall do all that we can to alert the public to what is in store. That may mean swimming in the sea in Brighton to show everyone that the sea there is safe, because of the investment that has been made in that area in relocating the sewers and in the current research that is being carried out by the excellent members of the Labour-controlled borough of Brighton. I represent a constituency in the Severn-Trent area and, contrary to what we heard earlier, I maintain that the chairman—John Bellak—of Severn-Trent was the only one to welcome wholeheartedly the Government's proposals. I want to alert everyone to the fact that Severn-Trent will probably be the first water authority to be sold off. That is why hon. Members representing constituencies in the west midlands will be having regular meetings with all sorts of consumer and environmental groups and trade unions in that area. We can build up their support. We should be telling people that the Government arc paving the way towards water privatisation that will amount to privatisation without compensation of the whole water industry. I have visited every utility that provides the water for my constituency. I have visited the reservoirs, the pumping stations and the bore holes, and I know exactly how much money was spent by the water companies, by the Potteries water board and by the authorities on purchasing and making those investments. It is criminal that that amount of investment of public money should now be sold off to private individuals who have no concern for public health. All they think about is the narrow aspect of their own profits.
  We should also be aware that some water authorities, including Severn-Trent, have already spent considerable sums on preparing the ground for privatisation. Whether or not that expenditure was legal, it will presumably be made legal when the Bill goes through. It is ironic that local authorities, particularly Labour authorities, are not being allowed to publicise their work, yet vast sums are being spent to prepare for privatisation.
  I get angry when I hear of how the charging of the Severn-Trent water authority is being geared up. We could have had enormous additional investment over the past four years, but that has not been made because the authority has been repaying debts so that it will be profitable for people to buy shares when the industry is privatised. We have been paying the price of the lack of investment in recent years.
  As for the proposal to introduce water meters, I remember a firm not far from Westminster that was not prepared to pay for the water that was necessary to clean the wheels of its heavy lorries; the water cost too much.
  As soon as water meters become compulsory, families throughout the country will use less water—not because they are mean, but because they will not be able to afford to use the amount of water that is necessary to bath children, operate washing machines and provide other basic essential services.
  Changes in water charges over the past three years have made many people think that they are paying too much for water. When there is compulsory metering and the expenditure of the National Rivers Authority is charged to the consumer, few people will be able to afford to pay for the amount of water that is necessary in a civilised society.
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  We are told that meters are necessary to safeguard cur water supply, but there are about 2·75 million households in the Severn-Trent area and if it costs £150 to put a meter in each home, the total cost will be £417 million—about half of the entire capital works programme of the Severn-Trent authority for the next five years on mains, sewers, leakage, environmental work and river quality. I do not see how such expenditure can he justified when more crucial investment is needed and has not gone ahead.
  Some Labour colleagues and I visited the open days recently organised by the Severn-Trent authority — a good public relations exercise in anticipation of privatisation—and I saw that £4 million is needed for my constituency alone, but I was told that only £1·5 million of the work is likely to go ahead. That gives us some idea of the cost in public health terms that we shall have to pay in the coming months.
  We shall do whatever we can to harness all the opposition to the Bill. We shall work with trade unions, consumer groups and environmental groups. In the next 18 months, we shall get the message across loud and clear. The campaign has already started.
  8.23 pm
  Sir John Farr: I welcome the Bill and particularly the establishment of the National Rivers Authority. I see from the long title that the Bill is an embracing measure and I hope that it will be amended to include privatisation of the national weather centre. I am sure that Ministers would look favourably on such amendments.
  The National Rivers Authority is in the Bill and it is not in the Bill. As the Secretary of State said, it is mentioned in the explanatory memorandum, but there is no provision for its establishment. Many Conservative Members welcome the idea of a national authority because it would be a big improvement on the existing set-up which is not altogether satisfactory. I am glad that the Government have listened to public opinion and many of us would like the NRA to be set up as soon as possible.
  I do not feel that the regional water authorities have failed us. Generally, they have done as good a job in difficult circumstances as they have been able to do, but there is no doubt that, especially in recent years, the failure of some authorities to maintain pollution-free rivers and, in particular, pollution-free coasts has caused serious problems.
  The NRA will be responsible for supervising and monitoring rivers, the water supply and river estuaries. I am pleased to see that its duties will extend to what the recent Green Paper called "coastal waters generally". I think that many people agree with me that the condition of some of our coastal waters is an utter disgrace. Successive Governments have tolerated for too long the disgraceful condition of our beaches and coastal waters; I do not mean the estuarial waters.
  The regional authorities are culprits, because they are disposing of raw sewage around our coastline, adjacent to beaches, which I will not name, although there are hundreds of them throughout the country. Our pollution record is the worst in Europe and one of the worst in the world. Transferring administration of the discharge of sewage from the regional water authorities to the NRA, in association with the new pollution executive, could only improve matters.

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  I welcome the Government's intention to introduce water meters. They have been talking about it for a long time. My right hon. Friend the Secretary of State referred to the little old lady who pays as much for her water supply as do the three or four people living in the house next door. I have always advised such little old ladies to get a meter, but I know that it can be a costly project.
  Mr. Allan Roberts: If we have compulsory metering, who will pay for the old lady's meter?
  Sir John Farr: A scheme involving some form of subsidy or something of that nature should be considered. No doubt that will be considered in Committee. Many old ladies feel that the cost of a private meter, which can be up to £100, is not worth paying.
  My final point relates to anglers and water politics. My hon. Friend the Member for Devizes (Mr. Morrison) said that he is associated with an anglers' association. I had a letter today from the Leicestershire Angling Federation. One of the reasons why I welcome the shift from the regional water authorities to the National Rivers Authority and the privatisation of the distribution of water to houses is that in recent years regional water authorities have fallen down in preventing river pollution. In its letter the Leicestershire Angling Federation says that in the Severn-Trent area from 1981–82 to 1985–86 the number of pollution incidents has almost doubled, but that during the same period the number of prosecutions has been minimal. The number of incidents has doubled from 2,401 in 1981–82 to 4,500 in 1985–86. I hope that with the setting up of a National Rivers Authority there will be a change in the quality of river water. I give a qualified welcome to the Bill.
  8.31 pm
  Mr. Tom Pendry: I wish to direct my remarks specifically to the problems that the Bill poses for the water industry. At the outset I have to declare my interest. First, I chair the National Union of Public Employees group of hon. Members and many hundreds of NUPE members will be affected by water privatisation. Secondly, I represent a constituency in the north-west and many hundreds of thousands of north-westerners will certainly be adversely affected by this legislation. I recognise, of course, that one does not have to be a member of NUPE or live in the north-west to oppose this legislation.
  One of the most obvious objections has already been stated a number of times. It is the proposed introduction of water metering. Why is it necessary to have compulsory trials in 10 or 11 areas when we know from the Yorkshire water authority experiment that the nett effect of metering is an enormous initial outlay of cost and alarming increases in the cost to families? That experiment showed that a family of two adults and two children — most hon. Members have many such families in their constituencies—would have to pay up to two and a half times what they currently pay should metering become operative.
  We know that the National Consumer Council has already said that it is concerned about the effect of metering on low-income families who for genuine reasons cannot easily economise on water. Many low income families in my constituency have enough headaches
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  without having to pay extra for necessities like washing and drinking water, to say nothing of the water used in flushing toilets and the like. These are not families who waste water by washing their second or third car or who hose down their gardens. They would love to have those opportunities.
  This legislation will hit the inner city areas, in which we know the Government are supposed to be interested. Only yesterday we heard about the possibility of the Government introducing a second poll tax for all adult water users until meters are introduced. Such nonsense from the Government is due to the fact that they have not thought through their proposals. They are producing mess after mess, and it is no wonder that those of us who admire the paintings of the Secretary of State for the Environment would like him to stick to that and keep his artistic mind off essential issues like water supply and rates reform. I say that with some feeling because I have bought two of his paintings and they hang on my wall. [Interruption.] I got them cheap.
  My union is naturally concerned about the number of job losses that privatisation of the water industry will bring about. Indeed, the Government have clearly said that there will be redundancies. The common services between authorities, such as legal services and laboratories, will be the first to go. It is clear that the new water companies will try to reduce costs in order to hit profit targets. The Anglian water authority has already estimated that there will be up to 20 per cent. job losses in sewerage alone. Before the Secretary of State or anyone else on the Government Front Bench argues that this is an overstaffed industry, I would refer once more to the Severn-Trent water authority which has lost 2,000 jobs since 1980. Since then it has brought in temporary staff to cover the jobs that were initially shed. This goes to show that this is no way to run a crucial industry.
  Local authorities will also lose staff. In my area of Tameside 99 per cent. of all sewer repairs are undertaken by that authority and it is estimated that up to 23,000 jobs in local authorities could be at risk because of this proposed legislation. This week one of my constituents who works in the water industry wrote to me on this issue. He said:
  "If water authorities shift as they are planning so to do from the current practice of preventive maintenance to breakdown maintenance it may show a paper profit in the short term but standards will fall and consumer dissatisfaction will begin to manifest itself."
  On top of this it will mean an increase in injuries at work.
  When the Minister replies to the debate I should like him to give an undertaking on safety standards. That matter has already been referred to by one of my members. As the Minister knows, the water authority forum has been in existence since 1983 and has brought both employers and unions together to discuss health and safety issues. Will the Minister state clearly that this forum and its previous good work will not be swept aside with the passing of this legislation?
  Many people in the north-west and indeed throughout the country feel deeply about these issues. I know that my local authority has a massive debt as a result of necessary investment in sewers and mains. Many are crumbling, but that is hardly surprising because some of them were built as long ago as 1840. Whatever massaged figures the Government come up with, the truth is that the real balance sheet deficit in the north-west alone is close to £1

  803
  billion. In order to make privatisation more attractive, we have seen a cut of 40 per cent. this year in sewer replacements in the north-west. This is asset-stripping at its worst. It is underground and unseen, but is immensely dangerous to public health.
  I now turn to an issue close to my heart, the threat posed to recreational and sporting pursuits by this legislation. A wide range of sporting and recreational groups will suffer. Those who sail or fish or watch birds or ramble and many other sporting groups will pay dearly if this Bill is passed. Already one Thames angler has won a court case over the state of the water in this area, and corners are certainly being cut. In my region the water authority has a continuous recreational capital programme. The pursuits range from walking to Vale House in Langdale to many other recreational schemes in my constituency. The Government will face concerted opposition from the recreation lobby.
  In answer to my parliamentary question earlier this year the Minister with responsibility for sport said that over 2 million people use the water environment for recreation each year. That is an understatement. There are 3·4 million anglers in Britain and if they are taken together with all the other groups a formidable lobby will be ranged against this Bill. The hon. Member for Lewisham, East (Mr. Moynihan) must regret the day he agreed to take on a sports portfolio with water attached to it. This legislation cuts across his sporting brief and will do immense damage in the area that he is trying to promote while wearing his other hat. The fine start that he has made on sport is threatened by this Bill.
  I have highlighted a number of issues and of course there are many other things that I would like to say. As one hon. Member said, we are beginning the fight today to ensure that the Bill does not see the light of day.
  8.38 pm
  Mr. Martin M. Brandon-Bravo: This enabling Bill is the first stage of the denationalisation of much of our water and electricity supply industries. On that account its broad principles are to be welcomed. It was said earlier in the debate that the authorities have not welcomed it. It is perfectly true that the authorities have not used the word "welcome". However, it should he firmly placed on the record that the water association's public briefing clearly states:
  "the authorities support the intentions of the Bill."
  I would have thought that that was clear enough.
  I welcome this as I have welcomed other denationalisation plans. The Bill enables this place to fulfil its proper function as guardian of the public interest. I believe that that function is best performed when Parliament in general and the Government in particular are not judge and jury as well as sometimes the accused or when they seek to exercise powers to deal with the conduct of major industries which this place and, regrettably, most hon. Members are patently unqualified to discharge.
  Midland JAWS — the joint union action against denationalisation — complained that privatisation is against the interests of consumers and employees. I cannot see how either consumers or employees can benefit any longer from the old worn-out, nationalised, industrial in-house concept of "what is good for us comes first and the customer or taxpayer picks up the difference."
  The joint union group has published a booklet which complains that the Government propose cash limits. That
  804
  is precisely what we are seeking finally to eradicate. In the past there has been Government interference in the long-term corporate plans of what ought to be commercial supply organisations. Hopefully, we will correct that in the future Bill. The joint group also complained about the setting of financial targets and performance aims. I know of no successful undertaking that could continue or survive without such a corporate strategy, and that concept is typical of the old style unions within the nationalised industry sector which still believe that industries can run without such a framework.
  The union grouping in that pamphlet also complains about the lack of investment and sets out a chart to prove its case. Unintentionally it demonstrates that the biggest culprit in the lack of investment plan was the previous Labour Government who first wanted money for other things, which meant that the water industry received less, and then ran out of cash altogether. Indeed, Health Service investment went down the pan as well.
  The House should read the booklet produced by the joint union group. It clearly shows that during the lifetime of the previous Labour Government the Severn-Trent water authority invested less in cash terms in the period to 1979 when the Labour Government were in power. My colleagues on both sides of the House will be aware of the level of inflation during that period and that lack of investment is therefore even more stark.
  Clause 3 deals with charging. Amongst other things the clause states that it should
  "have regard to the cost of performing those services … "
  that the new authorities will have to carry out. I believe that the Secretary of State used the phrase "to have regard" and claimed that that came from an earlier Bill. That is a nice phrase which sounds quite clear. However, if the House in the exercise of its duties in the public interest in future lays down higher water quality standards in a whole range of areas controlled by the water companies, it cannot duck the responsibility of ensuring how the costs that we impose can he passed on. It would be dishonest of us to try to imagine that we can have higher water standards and investment and then duck the issue of how that can be provided. I therefore hope that when the main privatisation Bill comes before the House we will carefully consider the phrase
  "to have regard to the cost"
  and ensure that the new companies can deal with that matter.
  Clause 5 deals with a point that has been raised several times today, the possibility of the installation of meters. During today's debate and particularly during the comments made by the hon. Member for Gordon (Mr. Bruce) representing the alliance — if that is the right phrase to use these days—I was puzzled by the fact that no one is facing the issue that no party today wants to continue with the old rateable values. The Labour party is split between capital values, local income tax and all the various options that have been discussed for the future of raising money for local government. All of the changes demand that the water industry has a mechanism for charging for the services that it provides. It would be dishonest for us to dismiss the possibility of water metering, as one Opposition Member did in Nottingham recently, on the ground that it is a tax on bath water. I hope that the debate on this issue can reach a slightly higher level than that.

  805
  Earlier reference was made to metering in blocks of flats. In my constituency joint supply is a great problem. I hope that when we tackle the problem of meters we will also tackle the problem of dealing with the enormous costs of removing joint supply which causes no end of trouble. As we are moving in that direction, even if we cannot enforce it in law, I hope very much that we at least advise and provide guidance to the present water authorities and builders to install meters in all new property. We are building well in excess of 200,000 houses a year and that figure does not take into account the enormous industrial and commercial developments. It would be sensible if meters were installed from the start.
  I am also concerned about the problem of reading meters and the right of entry referred to in schedule 1. I am extremely worried because in schedule 1(5)(b) entry is referred to where the householder is not present yet that is not directly linked with paragraph 2 of schedule 1 where entry can only be exercised following the execution of a warrant.
  It is no secret that the criminal classes in this country are becoming ever more sophisticated, and the vast majority of people are concerned about the problem of right of entry. If we are moving towards the installation of meters — we have the technology to enable remote reading to take place, but in practical terms that is a long way off — I hope that strong advice is given that the meters are positioned outside properties so that right of entry will not be a problem.
  The union grouping to which I have referred, which is opposing privatisation, complains of
  "the corrosive effect of the Government policies on levels of capital spending."
  That is the one argument of the grouping with which I agree. The solution is to stop the meddling and allow the water and electricity supply industries to get on with the job that they know best, which will be achieved when they are in the private sector. When that position is reached, the House will be able to fulfil its proper role in ensuring that public demand is met as expressed through this place.
  8.51 pm
  Mr. Doug Henderson: Having listened to the Secretary of State for the Environment, I am not convincd that the Government know what they want to do with the water industry, even if the House approves this enabling measure. I am not convinced that they understand the working of the industry. They know, of course, that they need to raise billions of pounds by selling the nation's assets to cover up their mismanagement of the economy. Probably every hon. Member is aware, however, that the events of last week will make it more difficult for them to raise the necessary moneys. They know also, or they should do, that privatisation will do nothing to attract the investment that the industry requires, contrary to what the hon. Member for Nottingham, South (Mr. Brandon-Bravo) has suggested. Privatisation cannot guarantee a future supply of water, it cannot attack the problem of pollution in our rivers and it cannot maintain the task of modernising our sewerage system.
  The Government know that disrupting the work of the industry with their restructuring will cost a great deal of money and waste the energies of the good people who
  806
  work in it. They know as well that they have deliberately increased the price of water to try to make their sale more attractive. We can expect that if the House approves the Bill the Government will eventually offer the purchaser a knock-down price to attract investors to the industry. The Water Authorities Association claims that the industry—the Secretary of State has said that no one knows better how to run the industry than the water authorities—estimates that its assets amount to £27 billion. The best estimate that City valuers can give is that the industry will sell for £7 billion. These valuations were made before the events of the past week. If a sale takes place at £7 billion or a lower sum, which is more likely, it will be nothing short of a national scandal.
  The quest for speed has resulted in a complete lack of cogency in the Government's proposals. If the Secretary of State had submitted his muddled thinking to my mathematics teacher, I have no doubt that he would have said, "Not even a good try, Secretary of State."
  The major problem that the Government face is what to do with the management of the water system. My hon. Friend the Member for Copeland (Dr. Cunningham) referred to the position adopted by the hon. Member for Oxford, West and Abingdon (Mr. Patten) when he had ministerial responsibilities for water policy prior to becoming Minister of State, Home Office. On 23 June 1986 he said that the Government had made it clear that a unified river basin management would continue. In lay terms that means there is one authority that is responsible for the provision of clean water for water supply and for the disposal of dirty water, sewage and other pollutants.
  The Government face a dilemma and I do not believe that they have begun to resolve it. If they privatise the industry and retain one authority—some hon. Members have said that this is the position that they would prefer — it is tantamount to handing over public health regulation to the City investor. If that were to happen, the private sector would be responsible for both clean water and dirty water. The City investor in ICI at Billingham could be the same investor who invests in the Northumbrian water authority, which would have control of pollution in the Tees. This is clearly unacceptable and in no sense provides for public accountability.
  The Secretary of State must be aware that the Green Paper produced on these issues is openly ridiculed by the industry. The proposed division of responsibility between the proposed National Rivers Authority and private companies has no support. It is rejected on the ground of management inefficiency. Roy Watts, the chairman of the Thames water authority, has said that the proposals are
  "misconceived and a recipe for inefficiency and conflict."
  Eight out of 10 of the water authority chairmen appointed by the Government have endorsed that position. They cite the example of the Thames water authority, where the National Rivers Authority would be responsible for surface water pipes, and private companies, established under the suggested proposals, would be responsible for the sewers. In the Thames area both systems are connected in one piping system that is known as flood sewers. These sewers are connected in turn to the storm overflows. After flooding in 1985 there was a major problem with the flood sewers and 33 of the storm overflows were recognised by the Thames water authority as needing major repair. I have no doubt that after the weather of the past week in the south similar problems will have recurred.

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  Under the Secretary of State's proposals, who would decide what to do? Would the NRA decide that something had to be done about the pipes or would a private company decide that something had to be done about the drains? Even if they could agree that something had to be done, would they be able to agree on who should do the work? If they could agree about that, how could they agree on who would pay for the work and in what proportion?
  The Government's proposals have been opposed also on the ground of cost. Sir Michael Straker, the chairman of the Northumbrian water authority, made a statement on 13 October in which he said:
  "It seems so wrong that the cost-efficiency of the organisation should be broken."
  Water sell-off, he says, "will raise costs." Sir Michael Straker is well qualified to make comment. In the last year, the increase in water charges in the Northumbrian area was the lowest in the country, and actual water charges in Northumbria are the second lowest in England and Wales. They are £36 per year per household lower then they are in the Anglian water authority area. But there is a great risk to people in Northumberland that, under privatisation, the cost of water there will be put up to the same price as that in the Anglian area.
  Let me speak briefly on behalf of those working in the industry. I am sponsored by the General, Municipal, Boilermakers and Allied Trades Union, which is the largest manual workers' trade union in the industry, representing some 17,000 people out of a work force of 50,000. They know the job on the ground, and they know that the Government's proposals will lead to confusion and disruption. They also point out that the National Rivers Authority, as proposed, lacks teeth. They have told me that employers in one of the large water authority areas have told them that, if the National Rivers Authority is to do anything to control the industry, it will need not 2,000 employees, as has been suggested in the Government's Green Paper, but 20,000. Those are water authority figures.
  With all that weight of opinion, the Secretary of State must be in no doubt that public accountability and privatisation are incompatible. If he does not withdraw his proposals on those grounds alone, he must be condemned for his blind obduracy. Surely what should concern the House is this: what does the industry need to provide the public with a safe and secure water supply? Any independent person would surely come to the same conclusion as I have. The water authority chairmen have; the trade unions and the workers in the industry have.
  The industry needs investment to modernise. It needs public accountability and control to secure clean supply of water, and to dispose of our domestic and industrial pollution. If the House demands that as well, it will reject the Second Reading of the Bill.
  9.1 pm
  Mr. Barry Field: When the hon. Member for Copeland (Dr. Cunningham) opened his speech, he attributed remarks to the chairman of the Southern water authority suggesting that he was not in favour of privatisation. I have here a letter dated 19 October, signed by the secretary of the board of Southern water, enclosing its response to the Government's proposals. I shall read from the last paragraph:
  "The board would, therefore, hope that Southern Water is the first water authority to be 'floated' once the Privatisation Legislation is in place."
  808
  The Isle of Wight is the largest area to be chosen for the introduction of water meter trials. In February 1985, in September 1986 and in October 1987, the Isle of Wight consumer committee voted in favour of water metering in the Isle of Wight. There are 51,117 hereditaments in the island. I should like to know whether there will be a uniform tariff throughout the Isle of Wight, and whether there will be consultation on the introduction of water metering—perhaps even shadow or dummy bills so that householders can get used to them. Is there any intention of raising additional revenue as a result of experimental water metering? The Isle of Wight is a tourist area, and we sincerely hope that any reinstatement from the introduction of water meters will be to a high standard.
  We are also interested to learn how the sewerage charge will be calculated once water metering is in place, and we should particularly like an assurance that large families in low-rated properties will not be penalised as a result of taking part in the experiment.
  I welcome the introduction of the National Rivers Authority, and I hope that, when sea defence is considered, we shall take the opportunity of clearing up the large number of anomalies in the current legislation.
  9.3 pm
  Mr. Eric Martlew: My interest in the water industry goes back to 1972. Unlike other hon. Members in the Chamber tonight, I am a member of a water committee which, strange as it may seem, supplies water to the Secretary of State's house. I did not buy any of his paintings, but I take the credit for giving him an excellent supply of Cumbrian water! I want to make only two points, as I realise that time is pressing.
  There has been a lot of talk about water metering. The hon. Member for Bury St. Edmunds (Sir E. Griffiths) said that the meters are inaccurate. My working life was spent in the dairy industry. Throughout the country there are very complicated milk measuring meters that are standing idle and gathering dust. They cost many thousands of pounds. They are standing idle and gathering dust because they are inaccurate. The Department of Trade and Industry has given instructions that no regard should be paid to the readings that are obtained from meters. How can we say to people that they are to be charged for water by meters that are completely inaccurate? The people who live in the trial areas should query their hills. Many of them will be wrong because meters are inaccurate.
  My hon. Friend the Member for Wakefield (Mr. Hinchliffe) said that over a century ago the forefathers of his authority bought out the water authority. Government money was not used to buy it out, so it is not Government property. In 1974, there were water authority assets in Carlisle of £8 million and debts of £3 million. That meant that the people of Carlisle had assets worth £5 million. This Government are privatising without paying compensation. That money is not theirs to give to speculators and spivs on the international stock exchanges; it belongs to my constituents. It will do the people of this country no service if the water authorities are sold off cheap. Water is a national resource and it should be kept in the public domain.
  Mr. Speaker: Mr. John Prescott.
  Mr. Prescott: The understanding has obviously broken down, Mr Speaker. Perhaps I could give way to my hon. Friend the Member for Makerfield (Mr. McCartney).
  Mr. Speaker: That would be very kind.
  9.6 pm
  Mr. Ian McCartney: That is the second time, in a matter of weeks, that my hon. Friend the Member for Kingston upon Hull, East (Mr. Prescott) has been very kind to me in this House.
  As a former member of the Greater Manchester fire and civil defence authority, I am concerned about the relationship between the newly privatised water companies and the emergency services such as the fire authorities. I am concerned in particular about the provision and maintenance of fire hydrants, the placing of mains and new developments. Who will pay for the water that is used for fire-fighting purposes?
  I ask these questions because my fire authority has incurred substantial costs in this financial year for services that, prior to privatisation, were provided free by British Telecom. It has had to pay £32,000 for the 24-hour service that connects its 999 land lines with the rest of the communications system. Before privatisation, the service was provided free of charge.
  Because of the privatisation of British Telecom, the Government are increasing by 8,000 per cent. the cost of the telegraph and wireless licences of the police and fire authorities. I fear that this is what will happen to fire authorities when the water authorities are privatized.
  9.8 pm
  Mr. John Prescott: It falls to me to make two points before I address the substance of the Bill. The first is pleasurable. I congratulate my hon. Friend the Member for Wakefield (Mr. Hinchliffe) on a most powerful maiden speech, despite the delay that the House suffered on account of his having been ill with chicken pox. I knew the hon. Member in my previous job as a spokesman on employment. He developed very good employment plans when he was chairman of Wakefield council's economic development committee. My hon. Friend made a forceful speech that fully reflected the concern for his constituents of his well-liked predecessor. I particularly welcome his opposition to the present legislation before the House. He referred to the closure of the Redbrook colliery complex. Many more pits will face closure if the Bill is enacted.
  My second point is a less happy one. It concerns an intervention that the Secretary of State for Energy made during the contribution of my hon. Friend the Member for Copeland (Dr. Cunningham). The issue concerned who was to wind up the debate. The Secretary of State struck a rather sour note when he suggested that my contribution would concern the privatisation of the electricity industry and that whatever contribution I made would be largely irrelevant because it would not concern the Bill.
  The Secretary of State and I met behind the Chair earlier to discuss this point and I knew only at the beginning of this debate that he was not to wind it up. The Shadow Cabinet had been informed that he was to wind up the debate. I have since sought information on this point and I have the Government's Whips' report that was give to us at a Shadow Cabinet meeting on 5 October; it clearly names him as the speaker to wind up the debate. I accepted behind the Chair that there had been some breakdown in communications, but I could not accept his sour intervention. The Secretary of State fully understood that I would have to address my remarks primarily to the
  810
  privatisation of the electricity industry. One assumes that when two Secretaries of State are present in the House during a debate concerning the privatisation of the water and electricity industries, that is what the debate would be about. I strongly resent the inference that any contribution that I would make, primarily about the privatisation of the electricity industry, would be considered irrelevant.
  Mr. Parkinson: May I clear up this misunderstanding? I am happy to confirm what I told the hon. Gentleman behind the Chair. It was never intended that I should take part in this discussion; I do not know how that confusion occurred. We feel that electricity is almost incidental to the Bill because, as the hon. Gentleman realises, it is mentioned in only one part of one clause that gives authorities the power to incur certain expenditure. I assure the hon. Gentleman that he and I will debate the privatisation of the electricity industry in the House on a number of occasions and I look forward to it.
  Mr. Prescott: I accept what the Secretary of State has confirmed, but he will appreciate that the nature of the circumstances are such that I must address myself, as have others, to the principle of the privatisation of the electricity industry. It is not that the Secretary of State has not been making statements about what will happen to the electricity industry, either at conferences, in press statements or on television programmes on which we have both appeared such as "Question Time", to which I shall refer in a moment. He has made statements about his views on the privatisation of the electricity industry. However, I would have thought that this opportunity to address the House on his preliminary thoughts on the privatisation of the electricity industry would have been taken. Why should we have to rely on press statements, television and current affairs debates when the Bill provides an ample opportunity to discuss the major issue of the privatisation of the electricity industry?
  I have complained to the right hon. Gentleman previously about the problem for Opposition spokesmen of finding out what is in the Secretary of State's mind. It is not improved by people such as the chairman of the Central Electricity Generating Board, Lord Marshall. He has made it clear that he will not meet the Opposition spokesman to discuss the privatisation of the electricity industry. The chairman of the Electricity Council has been kind enough to say that he will receive me, but we know from press reports and statements that the Secretary of State has made it clear that he does not want them in a public debate on these issues while he is making up his mind. The Secretary of State knows that that point is confirmed in the case of Lord Marshall. It is quite unacceptable for people such as Lord Marshall to say that he will not speak to those who are democratically elected and who are attempting to give their views and analyses on a major issue. I hope that that point is picked up by Lord Marshall, who, they tell me, is a bit of an awkward character at the best of times.
  This is a rather appropriate day to be discussing these large privatisation measures. They are large because the assets of the electricity supply industry alone are twice as great as the privatisation programmes that the Government have already undertaken. Undoubtedly the electorate is becoming a little more critical of the privatisation programme.
  There are obvious beneficiaries from the privatisation programme. The Government have earned £20 billion

  811
  from selling off the silver. The City has earned about £1 billion in handling the sales and a number of shareholders have made a lot of money by getting out quickly and making a killing. As the stock market shows, being in the City is a gamble. The last two days have reminded even the professionals of that.
  The consumer benefits are less obvious. Reference has been made to British Telecom. Certainly, bills now arrive faster than they did, but charges are being imposed upon hospitals for the provision of telephones. Charges are to be made for the maintenance of 999 lines and there is a possibility of a charge for the use of the inquiry service. Fewer public telephone boxes now work. Consumer benefits are less obvious.
  We have yet to see what will happen in the gas industry. However, already there has been an increase of 40 per cent. in cut-offs for people unable to pay their bills. That is unprecedented and does not exist on such a scale in any other energy supply industry.
  There were 4·5 million British Gas shareholders. Now there are only 3 million and 406 shareholders own 1 million of the shares. The great democratic, shareholding class is declining rapidly in the gas industry and it represents only about 15 per cent. of gas consumers.
  The Secretary of State spoke at the party conference about power to the people. He was referring to the limited number of people who will benefit from shares which are paid for by consumers who use the public utilities.
  The real motive for the Government's privatisation programme has nothing to do with the consumer or efficiency. There are two major reasons for privatisation. First, it is for Treasury revenue. The Government wanted £20 billion and that has without doubt reformed public finance. The Government now have the money to fund their tax programmes. The second reason is based on ideology. The Government want to roll back the frontiers of socialism, as they see it, by taking away from the public sector and giving to the private sector. Apparently by increasing private ownership, we increase democracy in our community. That is a controversial proposition which divides the parties.
  The heart of the philosophy is wider share ownership and the operation of the market. Ministers say that decisions are better left to the greater decision-making market than by Government. What has happened in the last couple of days in that great market is hardly the best advertisement for the way that our finance is run or for providing investment to meet the strategic necessities in our publicly owned industries. I watched with amazement how panic spread via television monitors from Wall street to London and Tokyo.
  What is meant by the market? Is it Tokyo, Wall street or the City? With the advent of technology, panic has spread faster round the world. The removal of the obstacles to the operation of the free world market in shares and money has led to mass panic on an unprecedented scale.
  We heard that technology would make it easier. The arch priests of our economy who operate the market—those who have Porsches, the million pound earners who talk about a champagne index—were in utter panic and fear. What happened? They were advised not to use the technology. They refused to answer the telephones to complete a market. In Wall street they were told to pull out the plugs because computers were automatically
  812
  trading and disgorging shares on to the market. All of a sudden these present-day Luddites in technology have run away from the market.
  What has brought stability to the market? It is certainly not the intervention by our Chancellor who was wheeled into the television studio to tell us to stay calm. I thought that the report in The Guardian in which the Chancellor was telling small investors to stay calm was countered by a report on the other side of the page that said:
  "an accountant with the Treasury who asked not to be named came in to sell 1,000 TSB and 600 British Gas shares. 'I've no great faith in all this, really. I've no other shares, and I think I'm better off out of it".
  Two contrasting views from the Treasury.
  What stabilised the market? The intervention by the Federal Bank to increase liquidity in the American system; the intervention by Government to protect the market from itself. The market totally failed to get itself out of the problem and thank God there was a Government prepared to say, "We must intervene because we do not want to see another 1929." That is the reality of the market and that is the market to which the Government want to introduce our public utilities. Apparently that is the way we are to abrogate our decision-making — to the force of the market and not to the rational decision-making that Governments must make in such strategic areas.
  The Secretary of State for Energy has said that there are only one or two lines in the Bill relating to the privatisation of electricity. It is true it is an enabling Bill to begin presumably to package up the electricity industry for whatever design the Secretary of State has in mind. It is clear that the Secretary of State does not know what he has in mind, as he has said that. It is clear that the Secretary of State wants the money, but he does not know how to get it. The only statement that we have from the Secretary of State is that he wants to privatise the electricity industry. However, he does not know how to do it. If one watches him on television all he talks about is "Lord Marshall and I. Lord Marshall and I." We shall wait to see what solution comes out of "Lord Marshall and I".
  It is clear that there are difficulties in the timetable and that is why the clause is in the Bill — to enable the Government to get the package ready. For the legislation and the prospectus to be ready for the next parliamentary Session means that it will be 1990 before we have the Bill. Therefore, one can only assume that the electorate may have a chance to decide on what decisions are made by the Secretary of State because 1990 will be too early to launch that privatisation on the market. Perhaps the experience of the past two days and the BP experience will mean that no one will want to go on the market for a year or two to offer a privatisation sale of this scale.
  The Select Committee on Energy asked the Secretary of State to consider producing a White Paper before he privatises any other public utility within the energy industry. In his reply to the Select Committee the Secretary of State said:
  "The Government will bear in mind the Committee's recommendation that it should publish a White or Green Paper in advance of any further proposals for the energy utility privatisation."
  Does the Secretary of State intend to observe that statement given to the Select Committee? Before the privatisation of electricity, will the Government produce a White Paper so we can understand the Government's thinking—presumably before the Bill comes before the

  813
  House? When the junior Minister comes to reply perhaps the Secretary of State will advise him to give the House some understanding on that.
  In the meantime, for this debate we must rely on television and press statements and the conference statements that have been made by the Secretary of State. Indeed, I watched him make his speech. Clearly it was rhetoric, but what else do we expect from the conference?
  "Privatisation is about power to the people … the customer will be the top priority … I am currently examining radical new ideas"—
  such as—
  "rebates and vouchers for customers … competition in electricity"
  That speech got the Secretary of State a standing ovation, but Tory party conferences are not interested in policy. The delegates are told to stand up and are timed for how long they stand and the Secretary of State got his due—
  Mr. Martin Flannery: They get up if she gets up.
  Mr. Prescott: My hon. Friend the Member for Sheffield, Hillsborough (Mr. Flannery) is correct. It all depends on whether the Prime Minister leads the standing ovation.
  Mr. Parkinson: The Prime Minister was not on the platform for my speech.
  Mr. Prescott: At this stage we will not go into why she made that decision. I believe that the Secretary of State may be chancing his arm a little there.
  Unfortunately, for information we have to rely on television appearances. Indeed, I had a debate with the Secretary of State on "Question Time" and he appeared to get rather rattled. He did make some statements. For example, he has made it clear that he does not want to transfer a public monopoly to a private monopoly. Presumably the gas experience has seared him for ever. He wants no more of the previous privatisation measure. Even by his own comments the Secretary of State has not appeared favourable to a private monopoly in gas. He said that workers will have shares. There must be a tremendous discount. No doubt they will buy them, sell them and make their killing, and good luck to them.
  The most emphatic decision so far is that there will not be two switches on the wall. We are all glad to hear that. However, for many people with one switch on the wall the price is too high for the heat that they have now. Some 20 per cent. more old people die of hypothermia in winter than in summer, but in the Scandinavian countries there is no difference between winter and summer for the deaths of old people. The reason is the charges that are made for heat. Whether the industry has been nationalised or private, the charges have been too high, particularly in the past few years.
  The Secretary of State made it clear that he would hate a monopoly because a monopoly exploits its position. It is more inefficient, takes more profit and exploits by charging higher prices. That is the theory of a monopoly, and I understand the point that is made.
  The present electricity supply industry is not free from criticism. No industry, public or private, is free from criticism. I have several criticisms of the electricity supply
  814
  industry. One is the way in which it has dealt with environmental issues such as acid rain and nuclear waste. The Secretary of State may know that I swam down the Thames to make my protest against the dumping of nuclear waste. I felt strongly about that. There are problems with technology, diversity and the power plants. Little attention is paid to power and heat facilities. Those are all areas of legitimate criticism. The concentration of power in one huge corporation is a questionable aspect.
  One criticism of the industry is that it buys British—it buys British coal and British plant. Why should that be a criticism? The industry is seeking to maintain its manufacturing base, which is an important strategic commitment.
  The industry is also not consumer-sensitive. Many performance indicators need to be improved, without a shadow of doubt. Anyone considering that knows it to be a fair criticism. With regard to organisation, I am a great decentraliser. I have been writing for four or five years about devolution and the regions. That is not new. I have held that view for a long time.
  The Plowden commission, set up by the Labour Government, made it clear that it did not like the idea of one body being in charge of generation and transmission, which the Labour Government accepted. The commission said that it was too powerful and wanted to increase the power of the distribution boards. Thus there were countervailing powers for the bulk supply tariff. The commission even saw the possibility of a regionalised aspect of development. Those legitimate areas of concern were accepted by the Labour Government. There have been criticisms of present structures of public sector industries, as of the private sector. No industry is free of such criticism. Anybody looking at the private or public sector industries that provide electricity in Europe and America can see that criticisms are made irrespective of whether they are private or public. It is not ownership that transforms an industry from a lousy industry to a better industry. The evidence is clear for us to see if we are fair about it.
  Let us look at the performance of the public sector industry. I call in aid a statement made in "Privatising Electricity", produced by the Electricity Consumers Council, which is an impartial body. It is critical in many ways. It says that in 1986–87 the electricity supply industry made profits that were 22 per cent. higher than in the previous year and
  "is well on its way to meeting its Financial Target of 2·75 per cent. on net assets … Sales of electricity were also at record levels … prices were 0·2 per cent. lower on average than in 1985–86. Assessed on this basis, the Industry's performance has been impressive."
  By the criteria set by the House, the industry's performance has been impressive.
  Let us look beyond what the consumers council has said. The Monopolies and Mergers Commission looked at the electricity supply industry in 1981. It found that most areas were not against the public interest, but one which was was the inefficient assessment of the nuclear industry and the construction of power plant. That was its legitimate criticism. There are unique circumstances involved in investment in construction. Anybody watching the two television programmes examining the reason why Governments of all persuasions entered the area of nuclear energy will understand that it was primarily because we needed to meet the strategic requirement for plutonium for

  815
  military purposes, but all our military reasons were based in America. It is perfectly clear why we entered the massive nuclear programme.
  The second stage of AGR development has been criticised for the high cost put on the industry. Indeed, in "Question Time" the Secretary of State said — I shall quote so that I get it right:
  "At this moment the CEGB has about £8–9 billion of your money invested in nuclear power stations of a kind which Mr. Benn imposed on the industry and which don't work."
  He implied that the AGR programme was imposed by a Labour Government against the will of the industry. I have looked up the facts. When my right hon. Friend the Member for Chesterfield (Mr. Benn) made a statement on thermal reactor policy he said:
  "The Government agree with the electricity supply boards that two early nuclear orders are needed and that these must be advanced gas-cooled reactors… This view is also supported by the electricity supply industry".
  I wondered about the view of the official Opposition. The right hon. Member for Bridgwater (Mr. King) replied on behalf of the Opposition and he said:
  "Is the right hon. Gentleman aware that we welcome this long delayed but extremely important statement? Is he further aware that we believe that it was right not to abandon the AGR at this stage of its development, and we hope that will prove to be successful?" — [Official Report, 25 January 1978; Vol 952, c.1392–93.]
  If there is a difference of opinion about the AGR programme now, there was certainly no difference when the decision was made by a Labour Government. It was welcomed by the Opposition and was endorsed and supported by the industry. Therefore, I hope that the Secretary of State will not repeat those remarks. They are totally wrong. Does the right hon. Gentleman wish to withdraw his remarks?
  Mr. Parkinson: I have discussed this matter with many people in the industry already. The AGR does not have a friend. The AGRs are working extremely badly. The feeling is that the industry would never have bought them if the politicians had not insisted that it did. That was the point I was making and it is still true.
  Mr. Prescott: The industry made it clear — the records can be checked—that it supported the statement as did the Opposition.
  Mr. Tam Dalyell: In its evidence to the Layfield inquiry the South of Scotland Electricity Board set out a full, well argued and technical case for the AGR.
  Mr. Prescott: My hon. Friend is absolutely right. In fact, the AGR programme in Scotland is more successful than those in the English regions. There are reasons for that, but the point is well made.
  There is a reason for the smokescreen erected by the Secretary of State. He is beginning to argue that one has to put up the price of electricity before it is privatised in order to pay for the massive investment programme of £42 billion to which he refers. I assume that he is referring to the actual cost of £20 billion but is suggesting what the final cost may be. He is preparing to put up the prices of the industry while it is still nationalised to fatten it up for privatisation.
  The Government's non-statutory financial regulatory framework was mentioned earlier. If one looks at the framework of the industry, one finds that the external financing limits and monetary targets have contributed to a massive tax on the industry. Indeed, the EFLs and the
  816
  accelerated capital debt policy have meant that the Government have been taking about £4 billion off the industry. All of that is a charge on the electricity consumer, precisely as the £5½ billion gas levy was. Both those industries have suffered an almost £10 billion charge, equivalent to a 9 per cent. increase in price charges. The point is well made by the consumer hoard, which states: "the ESI has made net repayments to the Treasury over this period of almost £2 billion."
  The Government have imposed those charges has. The Treasury has exploited its monopoly position by passing on charges to those who pay for electricity. It comes a bit rich for a Government to criticise monopoly exploitation when the Treasury has constantly exploited that monopoly power and by imposing these extra charges has increased charges for consumers more than necessary.
  The Government are now proposing that the return rate of 2·5 per cent. on assets be increased to 5, 6 or 7 per cent. to increase profits. That is why there will be an increase in charges. The problems for the coal industry, through the importing of coal, will lead to massive closures of pits. The nuclear industry, if passed to the private sector, will not be a great deal of comfort. It has a massive cost programme, a massive decommissioning programme, and is a massive cost to the environment. All those circumstances make electricity a difficult industry, and it would not be in the national interest to privatise it.
  The Government's case is that if it privatises the industry prices to the consumer will come down and there will be better investment. I wish to quote the example of the private electricity supply in America. In 1983, the United States Department of Energy said:
  "Public confidence in the electricity industry and the regulatory system has deteriorated over the past 10 years as electricity prices have gone up. There is a growing perception that utility companies are not as well managed as they could be nor as regulated as they should be."
  That industry is starved of investment and unless major moves are made to invest in the industry, the US Department of Energy estimates that annual electricity bills
  "could be as much as $18 billion—roughly 12 per cent. — higher".
  Our case is that privatisation of the electricity industry, as of the water industry, has nothing to do with benefit to the consumer or with improving competition or the national interest — it is solely about generating money for the Treasury and increasing the power of the private market. We reject the Government's philosophy and will oppose the Bill tonight.
  9.37 pm
  The Parliamentary Under-Secretary of State for Energy (Mr. Michael Spicer): I wish to join other hon. Members in congratulating the hon. Member for Wakefield (Mr. Hinchliffe). As has been said, he made a powerful and, above all, concise speech, and I warmly and sincerely congratulate him on it.
  I welcome the hon. Member for Kingston upon Hull, East (Mr. Prescott) to his new responsibilities. I think that this is the first time that he has addressed the House in his new role. I understand that he did not want the job, but I hope that he comes to like it after a while. In fact, this evening seems to have become worse and worse for the hon. Gentleman. Not only does he not get the job that he wants, but worse is to follow—much to his horror, he gets me to oppose him on his debut night. That is not part

  817
  of some terrible plot against him—it is just that, as my right hon. Friend the Secretary of State said, for the electricity industry this Bill is a mini paving measure to which it is highly appropriate that a mini Minister should respond.
  The question why the hon. Gentleman was not able to get together with Lord Marshall is not one for the Government. There is no question of my right hon. Friend intervening one way or another in such a matter. However, the hon. Gentleman was offered a full factual briefing by the CEGB—as, in our view, he should have been. We fully concede that it was absolutely right for the hon. Gentleman to raise in this debate the question of electricity. Indeed, I am rather relieved that he did so because I wish also to say something about electricity matters.
  This has been a wide-ranging, not to say philosophical, debate. I wish to respond directly to what was said by several hon. Members, especially the hon. Member for Caernarfon (Mr. Wigley), about the effect on privatisation of the water and electricity industries of the storms that hit southern and eastern Britain and the subsequent flooding this week. As hon. Members know, the wind force on Friday was unique; there has never been anything like it. Unlike several hon. Members, especially the hon. Member for Caernarfon, I shall draw no inference from this freak and, I hope, one-time event about the structure of the electricity or water industries. There would undoubtedly have been a major problem under any system, and I hope that under any system individual employees of the industry would respond as magnificently as so many of them have done in the past few days. On my visits to the worst-hit areas, I have met employees, especially of the area boards—some of them quite junior—who had not been home for 40 hours. The whole House will wish to acknowledge and applaud their dedication and sense of service.
  Understandably, the debate has touched upon the generalities of the Government's privatisation programme. It is understandable because privatising those two industries will give a major thrust forward to that programme, although the Bill is only a modest part of the process. The hon. Member for Copeland (Dr. Cunningham), my hon. Friend the Member for Devizes (Mr. Morrison) and others asked whether the act of privatisation is itself sufficient to guarantee that businesses which were previously state owned will respond to the needs of the customer and the market place. I have no hesitation in answering unequivocally no. Where there is not already substantial competition in the market, the act of privatisation is itself insufficient to guarantee customer power. Having said that, I do not accept the validity of several criticisms which have been levelled by Opposition Members against previous acts of privatisation.
  Since the privatisation of British Telecom, telephone charges to the average consumer have fallen by nearly 9 per cent. in real terms. Waiting lists for telephones have been almost eliminated and the industry is putting right the distorted investment decisions taken over many years while it was in the public sector. British Telecom is undertaking £2 billion of annual capital expenditure—over one third more than before privatisation. What is more, recently the company announced that it plans to
  818
  hold charges for basic telephone services at current levels for another year. Full competition has been brought into the telephone retail market.
  Mr. David Blunkett: The Minister believes that privatisation had a dramatic effect on British Telecom. Does he believe that that will be mirrored in the water industry by a massive investment in providing clean and wholesome water and the disposal of effluent rather than a massive investment in metering which will create not the shabbiest but the smelliest nation in Europe, no doubt followed by the suggestion that if we cannot get water, we should ask people, Marie-Antoinette style, to bathe in champagne?
  Mr. Spicer: Perhaps the hon. Gentleman will remember that, under the Labour Administration, investment in water decreased by 30 per cent., whereas under this Government it has increased by 35 per cent. We have a pretty good record and we need not take lessons on investment from the Opposition. It is likely that in a privatised market the effects on investment would, at the very least, be not as distorted as if the industry was left in the public sector.
  Full competition has been brought into the telephone retail market, and British Telecom's competitor Mercury is growing into a large and successful company, with more than 3,500 business customers and with plans to extend trials to residential users.
  Secondly, the domestic prices of British Gas, which has often been mentioned in the debate, are now set by reference to purchase costs and projected efficiency gains. The company was able to make substantial reductions in domestic tariffs in July, leaving United Kingdom domestic prices the lowest among our major European competitors. So we do not need to be too concerned about the effect of privatising those two industries.
  The Bill is in part a paving measure to ensure that there can be no question of the water and electricity supply industries being without adequate powers to take the necessary steps to prepare for privatisation. In the case of the water authorities, this also takes into account the establishment of the National Rivers Authority. We believe, for instance, that the industries must be able to take certain advice as to how best to contribute constructively to the detailed decisions about their future.
  The Bill covers the appointment by the water and electricity industries of certain advisers and the commitment of certain necessary expenditure. The industries will be empowered under clause 1 to facilitate the implementation of Government proposals for the transfer of property and functions to other bodies, including proposals for privatisation. The industries will also be able to facilitate the implementation of any related proposals of the Secretary of State or, in the case of related proposals, to secure their modification.
  The rights that the industries will be given under the Bill will therefore be restricted, and clause 1 does not, for instance, give the industries the right to modify our main privatisation proposals. Naturally, there may be secondary matters that are related to our main proposals for which the industries may wish to propose modifications. Subsection (1)(b) deals with these secondary matters. They might, for example, include the detailed allocation of assets, or financial or other management arrangements following a transfer of functions.

  819
  The hon. Member for Copeland argued that it is inappropriate to give the two industries these powers before the Government's main proposals for legislation for the industries are brought before the House. I say to him and to other hon. Gentlemen who share his opinion that the Government's intention to privatise is clear and we have a mandate from the electorate to carry it through. It is only prudent to clarify the industries' powers so that they are free to play their full part in discussions about their future.
  Several hon. Members have, understandably, asked for more information about the proposed future structures of the two industries. My right hon. Friend the Secretary of State for the Environment has outlined the nature of his plans for the water industry. I shall pick up one or two points about water before turning to the question of electricity. First, privatisation of water is not a novel idea. Private sector water companies have been supplying water to much of our population for more than 100 years, and doing so very successfully. A quarter of the water supplied in England and Wales comes from the statutory water companies. Areas supplied include cities as large as Bristol and Newcastle. That is perhaps one answer to those who have argued that privatised companies would be a danger to health. To the best of my knowledge, the water company areas do not have noticeably higher rates of sickness or insanitary diseases — the very notion is absurd. The water supplied by the statutory water companies is regulated and controlled in exactly the same way as that supplied by the water authorities. Indeed, the regulation of the industry on drinking water standards will be further tightened and improved under our privatisation Bill.
  As my hon. Friend the Member for Bury St. Edmunds (Sir E. Griffiths) reminded us, water metering is not new. Indeed, it has been in Malvern, in my constituency, since 1871 and since 1 April 1982 the people of Malvern have been given the option of paying for water according to rateable value and fewer than 5 per cent. have chosen to do so.
  Several hon. Members have expressed anxiety that compulsory metering will discourage essential water use and lead to a collapse of public health standards. Such fears are, of course, completely unfounded. There is no evidence in my constituency to suggest that metering has discouraged essential use over the past 100 years. What is evident in Malvern is that people have a greater awareness of the value of water.
  Mr. Rhodri Morgan: Does the Minister accept that as 90 per cent. of the costs of providing a water supply are the fixed capital costs, which exist regardless of the amount of water used, the introduction of compulsory metering would be the greatest waste of capital expenditure since the pyramids?
  Mr. Spicer: The purpose of the Bill is to establish the right of water authorities to have trials and to see whether the hon. Gentleman is right or wrong. Until we have had those trials, it will be impossible to answer the hon. Gentleman.
  The hon. Member for Caernarfon asked about the situation in Wales. I cannot give him the assurance that he sought. We do not propose to have a separate authority for Wales, but the Welsh water authority will be consulted
  820
  about our proposals. There will be a period of deep consultation and the Welsh authority will be consulted very closely on the matter and on the structure for Wales.
  The hon. Member for Kingston upon Hull, East rightly mentioned the electricity industry. I am not in a position tonight to give our plans for the future structure of the electricity supply industry, but I can give the House information about some of the principles and considerations that we are applying to the decisions that we are in the process of taking.
  We shall keep in mind the technical and legal complexity of an industry which supplies a potentially dangerous product which, to all intents and purposes, is impossible to store and whose current operation is governed by 22 Acts of Parliament, going back to the Electric Lighting Act 1882.
  Security of supply will always be at the forefront of our minds and there is absolutely no question of breaking up the national transmission grid.
  Many arguments are made in support of the present structure, ranging from the merit ordering of generating plant to matters related to the stability of the system. I assure the House that the Government are exploring those questions with the services of specialist advisers of the highest competence. As part of that process, I spent a good deal of the summer studying the workings of the electricity supply industries in other European countries and in the United States.
  In my view, there is no single overseas model on which we can properly base the United Kingdom industry, but it has been extremely useful to see how other countries run their electricity supply industries. For example, I have seen power pools whereby the operations of the network are optimised by a central organisation that has a separate identity from a number of power companies supplying the system, and I have also seen systems that optimise through a set of long-term and short-term contracts.
  Within the technical constraints, we are assessing ways of introducing the maximum amount of competition into the workings of the electricity supply industry. I know that a number of my hon. Friends are interested in that matter. There will undoubtedly be elements of the industry that are not easily subjected to competitive pressures, especially at the distribution end of the business, although even here there is scope for competition by emulation.
  Where competition is limited there will undoubtedly need to be tight regulation to protect consumers' interests on price and service, but my travels, especially in the United States, alerted me to the severely restrictive nature and the costly bureaucracy that can result from heavy emphasis on regulation. There are clear advantages to be gained from having competition and commensurately less economic regulation. This is a matter to which we are giving close attention, especially with respect to electricity generation which, as many hon Members have said, represents 80 per cent. of the costs of the industry and which is currently effectively the monopoly of the Central Electricity Generating Board.
  It is sometimes said that the size and monopolistic position of the CEGB is necessary to manage the massive and complex assets under its control and, above all, to generate the enormous investments which lie ahead as the industry embarks on a major modernisation programme.
  We are, of course, exploring these arguments. There are certainly economies of scale in electricity generation. Equally, I have seen power companies in the Federal

  821
  Republic of Germany and in the United States which are much smaller than our CEGB and which manage highly complex operations, including nuclear power stations, very adequately.
  In terms of new investment, the Government certainly believe that the industry's rate of return will need to improve above that of its historic levels. The industry should be earning a proper return on its capital, particularly as it gears up for a heavy investment programme.
  Mr. Malcolm Bruce: Does the Minister acknowledge, as I acknowledge, that we need effective regulation and competition? Has he not confessed to the House that he does not know how to privatise electricity but is determined to go ahead and do it anyway? Would it not be wiser for him to keep an open mind until he has found out how to do it?
  Mr. Spicer: If the hon Gentleman is saying that we need different regulatory systems for different industries, that is an easy point to concede. I do not concede that we do not have firm ideas, although we have not yet announced them. [Interruption.] Are the hon Gentlemen who are giggling on the Opposition Front Bench trying to suggest that the Government should not be given time to make their decisions on a matter as complex as this without necessarily having to tell the Opposition as we go along? We shall be coming up with our decisions in the very near future. That answers the question about consultation.
  At present the industry is earning a rate of return of around 2·45 per cent. on assets. It can improve on this either by reducing costs or by increasing its prices, or by a bit of both. Further pressure on costs should come first. The entry of the industry into the private sector will give a great opportunity for competitive pressures on costs to reflect themselves in lower price increases than those that would result if the industry were to continue to receive the protection of the public sector.
  Three specific aspects have been raised in this debate. The first was the question of safety. The British electricity supply industry has a safety record second to none. There can be absolutely no question of privatisation resulting in a lowering of safety standards. This has certainly not happened in other privatised industries, and the question of ownership does not affect the industry's obligation to meet legal safety standards which will continue to be monitored by the public authorities.
  Secondly, there is the question of the future of coal. There is no doubt that for the foreseeable future coal is likely to be the predominant fuel used in the electricity generation industry in this country. Privatisation of the electricity industry will undoubtedly further underline the need for British Coal to demonstrate that it can compete in terms of price and reliability.
  I am very optimistic about the coal industry's ability to rise to this challenge. I base this confidence on the remarkable increase in productivity that the industry has achieved in recent years. Productivity in British Coal has risen by over 50 per cent. since the strike of 1984 and that rate of productivity increase is continuing.
  Thirdly, the future of nuclear power has been raised. The Government firmly believe in the future of the nuclear industry as a major contributor to the baseload demand
  822
  for electricity. It is our aim to ensure that United Kingdom customers continue to have the opportunity to benefit from this.
  There is no doubt in our minds that the changes that we propose for the two industries we are considering tonight will be to the benefit of the consumer and the nation. They will result in greater efficiency, better use of resources and the greater motivation of those who work in the industries. Nor is there much doubt that, when the substantive Bill is introduced, we will have to discuss the matter at great length. However, for the present, this is a very minor, modest proposal. I ask the House to give the Bill a Second Reading.
  Question put, That the amendment be made:—
  The House divided: Ayes 24, Noes 344.

  Division No. 29]

  [10.00pm

  AYES

  Alton, David

  Livsey, Richard

  Barnes, Mrs Rosie (Greenwich)

  Maclennan, Robert

  Beith, A. J.

  Michie, Mrs Ray (Arg'l & Bute)

  Bruce, Malcolm (Gordon)

  Owen, Rt Hon Dr David

  Campbell, Menzies (Fife NE)

  Salmond, Alex

  Carlile, Alex (Mont'g)

  Steel, Rt Hon David

  Ewing, Mrs Margaret (Moray)

  Taylor, Matthew (Truro)

  Fearn, Ronald

  Thomas, Dafydd Elis

  Howells, Geraint

  Welsh, Andrew (Angus E)

  Hughes, Simon (Southwark)

  Wigley, Dafydd

  Johnston, Sir Russell

  Jones, leuan (Ynys Môn)

  Tellers for the Ayes:

  Kennedy, Charles

  Mr. James Wallace and Mr. John Cartwright.

  Kirkwood, Archy

  NOES

  Adley, Robert

  Brown, Michael (Brigg & Cl't's)

  Aitken, Jonathan

  Browne, John (Winchester)

  Alexander, Richard

  Bruce, Ian (Dorset South)

  Alison, Rt Hon Michael

  Buchanan-Smith, Rt Hon Alick

  Allason, Rupert

  Budgen, Nicholas

  Amess, David

  Burns, Simon

  Amos, Alan

  Burt, Alistair

  Arbuthnot, James

  Butcher, John

  Arnold, Jacques (Gravesham)

  Butler, Chris

  Ashby, David

  Butterfill, John

  Aspinwall, Jack

  Carlisle, John, (Luton N)

  Atkins, Robert

  Carlisle, Kenneth (Lincoln)

  Atkinson, David

  Carrington, Matthew

  Baker, Rt Hon K. (Mole Valley)

  Carttiss, Michael

  Baker, Nicholas (Dorset N)

  Cash, William

  Baldry, Tony

  Chalker, Rt Hon Mrs Lynda

  Banks, Robert (Harrogate)

  Channon, Rt Hon Paul

  Batiste, Spencer

  Chapman, Sydney

  Beaumont-Dark, Anthony

  Chope, Christopher

  Bellingham, Henry

  Churchill, Mr

  Bendall, Vivian

  Clark, Dr Michael (Rochford)

  Bennett, Nicholas (Pembroke)

  Clark, Sir W. (Croydon S)

  Bevan, David Gilroy

  Clarke, Rt Hon K. (Rushcliffe)

  Biffen, Rt Hon John

  Colvin, Michael

  Biggs-Davison, Sir John

  Conway, Derek

  Blackburn, Dr John G.

  Coombs, Anthony (Wyre F'rest)

  Blaker, Rt Hon Sir Peter

  Coombs, Simon (Swindon)

  Body, Sir Richard

  Cope, John

  Bonsor, Sir Nicholas

  Cormack, Patrick

  Boswell, Tim

  Couchman, James

  Bottomley, Peter

  Cran, James

  Bottomley, Mrs Virginia

  Critchley, Julian

  Bowden, A (Brighton K'pto'n)

  Currie, Mrs Edwina

  Bowden, Gerald (Dulwich)

  Curry, David

  Bowis, John

  Davies, Q. (Stamf'd & Spald'g)

  Boyson, Rt Hon Dr Sir Rhodes

  Davis, David (Boothferry)

  Braine, Rt Hon Sir Bernard

  Day, Stephen

  Brandon-Bravo, Martin

  Devlin, Tim

  Brazier, Julian

  Dickens, Geoffrey

  Bright, Graham

  Dicks, Terry

  Brittan, Rt Hon Leon

  Dorrell, Stephen

  Brooke, Hon Peter

  Douglas-Hamilton, Lord James

  823

  Dover, Den

  Janman, Timothy

  Dunn, Bob

  Jessel, Toby

  Durant, Tony

  Johnson Smith, Sir Geoffrey

  Dykes, Hugh

  Jones, Gwilym (Cardiff N)

  Eggar, Tim

  Jones, Robert B (Herts W)

  Emery, Sir Peter

  Jopling, Rt Hon Michael

  Evans, David (Welwyn Hatf'd)

  Kellett-Bowman, Mrs Elaine

  Evennett, David

  Key, Robert

  Fairbairn, Nicholas

  King, Roger (B'ham N'thfield)

  Fallon, Michael

  King, Rt Hon Tom (Bridgwater)

  Farr, Sir John

  Kirkhope, Timothy

  Favell, Tony

  Knapman, Roger

  Field, Barry (Isle of Wight)

  Knight, Greg (Derby North)

  Finsberg, Sir Geoffrey

  Knight, Dame Jill (Edgbaston)

  Fookes, Miss Janet

  Knowles, Michael

  Forman, Nigel

  Lamont, Rt Hon Norman

  Forsyth, Michael (Stirling)

  Lang, Ian

  Forth, Eric

  Latham, Michael

  Fowler, Rt Hon Norman

  Lawrence, Ivan

  Fox, Sir Marcus

  Lawson, Rt Hon Nigel

  Franks, Cecil

  Lee, John (Pendle)

  Freeman, Roger

  Leigh, Edward (Gainsbor'gh)

  French, Douglas

  Lennox-Boyd, Hon Mark

  Fry, Peter

  Lester, Jim (Broxtowe)

  Gale, Roger

  Lightbown, David

  Gardiner, George

  Lilley, Peter

  Gill, Christopher

  Lloyd, Sir Ian (Havant)

  Gilmour, Rt Hon Sir Ian

  Lloyd, Peter (Fareham)

  Glyn, Dr Alan

  Lord, Michael

  Goodhart, Sir Philip

  Luce, Rt Hon Richard

  Goodlad, Alastair

  Lyell, Sir Nicholas

  Goodson-Wickes, Dr Charles

  McCrindle, Robert

  Gorman, Mrs Teresa

  Macfarlane, Neil

  Gow, Ian

  MacGregor, John

  Gower, Sir Raymond

  MacKay, Andrew (E Berkshire)

  Grant, Sir Anthony (CambsSW)

  Maclean, David

  Greenway, Harry (Ealing N)

  McLoughlin, Patrick

  Greenway, John (Rydale)

  McNair-Wilson, M. (Newbury)

  Gregory, Conal

  McNair-Wilson, P. (New Forest)

  Griffiths, Sir Eldon (Bury St E')

  Madel, David

  Griffiths, Peter (Portsmouth N)

  Major, Rt Hon John

  Grist, Ian

  Malins, Humfrey

  Ground, Patrick

  Mans, Keith

  Gummer, Rt Hon John Selwyn

  Maples, John

  Hamilton, Hon A. (Epsom)

  Marland, Paul

  Hamilton, Neil (Tatton)

  Marlow, Tony

  Hampson, Dr Keith

  Marshall, John (Hendon S)

  Hanley, Jeremy

  Martin, David (Portsmouth S)

  Hannam, John

  Mates, Michael

  Hargreaves, A. (B'ham H'll Gr')

  Maude, Hon Francis

  Hargreaves, Ken (Hyndburn)

  Mayhew, Rt Hon Sir Patrick

  Harris, David

  Mellor, David

  Haselhurst, Alan

  Meyer, Sir Anthony

  Hawkins, Christopher

  Miller, Hal

  Hayes, Jerry

  Mills, Iain

  Hayhoe, Rt Hon Sir Barney

  Miscampbell, Norman

  Hayward, Robert

  Mitchell, Andrew (Gedling)

  Heathcoat-Amory, David

  Mitchell, David (Hants NW)

  Heddle, John

  Moate, Roger

  Hicks, Mrs Maureen (Wolv NE)

  Monro, Sir Hector

  Higgins, Rt Hon Terence L.

  Montgomery, Sir Fergus

  Hill, James

  Morris, M (N'hampton S)

  Hind, Kenneth

  Morrison, Hon C. (Devizes)

  Hogg, Hon Douglas (Gr'th'm)

  Morrison, Hon P (Chester)

  Holt, Richard

  Moss, Malcolm

  Hordern, Sir Peter

  Moynihan, Hon C.

  Howard, Michael

  Neale, Gerrard

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

  Nelson, Anthony

  Howarth, G. (Cannock & B'wd)

  Neubert, Michael

  Howell, Rt Hon David (G'dford)

  Nicholls, Patrick

  Howell, Ralph (North Norfolk)

  Nicholson, David (Taunton)

  Hughes, Robert G. (Harrow W)

  Onslow, Cranley

  Hunt, David (Wirral W)

  Oppenheim, Phillip

  Hunt, John (Ravensbourne)

  Page, Richard

  Hunter, Andrew

  Paice, James

  Hurd, Rt Hon Douglas

  Parkinson, Rt Hon Cecil

  Irvine, Michael

  Patnick, Irvine

  Irving, Charles

  Patten, Chris (Bath)

  Jack, Michael

  Patten, John (Oxford W)

  Jackson, Robert

  Pattie, Rt Hon Sir Geoffrey

  824

  Pawsey, James

  Stewart, Andrew (Sherwood)

  Peacock, Mrs Elizabeth

  Stradling Thomas, Sir John

  Porter, Barry (Wirral S)

  Sumberg, David

  Porter, David (Waveney)

  Summerson, Hugo

  Portillo, Michael

  Tapsell, Sir Peter

  Powell, William (Corby)

  Taylor, Ian (Esher)

  Price, Sir David

  Taylor, John M (Solihull)

  Raffan, Keith

  Taylor, Teddy (S'end E)

  Raison, Rt Hon Timothy

  Tebbit, Rt Hon Norman

  Rathbone, Tim

  Temple-Morris, Peter

  Redwood, John

  Thompson, D. (Calder Valley)

  Renton, Tim

  Thompson, Patrick (Norwich N)

  Rhodes James, Robert

  Thorne, Neil

  Rhys Williams, Sir Brandon

  Thornton, Malcolm

  Riddick, Graham

  Thurnham, Peter

  Ridley, Rt Hon Nicholas

  Townend, John (Bridlington)

  Ridsdale, Sir Julian

  Townsend, Cyril D. (B'heath)

  Roberts, Wyn (Conwy)

  Tracey, Richard

  Roe, Mrs Marion

  Tredinnick, David

  Rossi, Sir Hugh

  Trippier, David

  Rost, Peter

  Trotter, Neville

  Rowe, Andrew

  Twinn, Dr Ian

  Rumbold, Mrs Angela

  Vaughan, Sir Gerard

  Ryder, Richard

  Viggers, Peter

  Sackville, Hon Tom

  Waddington, Rt Hon David

  Sainsbury, Hon Tim

  Wakeham, Rt Hon John

  Sayeed, Jonathan

  Waldegrave, Hon William

  Scott, Nicholas

  Walden, George

  Shaw, David (Dover)

  Walker, Bill (T'side North)

  Shaw, Sir Giles (Pudsey)

  Waller, Gary

  Shaw, Sir Michael (Scarb')

  Walters, Dennis

  Shelton, William (Streatham)

  Ward, John

  Shephard, Mrs G. (Norfolk SW)

  Wardle, C. (Bexhill)

  Shepherd, Colin (Hereford)

  Warren, Kenneth

  Shepherd, Richard (Aldridge)

  Watts, John

  Shersby, Michael

  Wheeler, John

  Sims, Roger

  Whitney, Ray

  Skeet, Sir Trevor

  Widdecombe, Miss Ann

  Smith, Sir Dudley (Warwick)

  Wiggin, Jerry

  Smith, Tim (Beaconsfield)

  Wilkinson, John

  Soames, Hon Nicholas

  Wilshire, David

  Speed, Keith

  Winterton, Mrs Ann

  Speller, Tony

  Winterton, Nicholas

  Spicer, Jim (Dorset W)

  Wolfson, Mark

  Spicer, Michael (S Worcs)

  Wood, Timothy

  Squire, Robin

  Yeo, Tim

  Stanbrook, Ivor

  Young, Sir George (Acton)

  Stanley, Rt Hon John

  Younger, Rt Hon George

  Steen, Anthony

  Stern, Michael

  Tellers for the Noes:

  Stevens, Lewis

  Mr. Robert Boscawen and

  Stewart, Allan (Eastwood)

  Mr. Tristan Garel-Jones.

  Question accordingly negatived.
  Main Question put forthwith pursuant to Standing Order No. 60 (Amendment on Second or Third Reading):—
  The House divided: Ayes 342, Noes 235.

  Division No. 30]

  [10.17 pm

  AYES

  Adley, Robert

  Bellingham, Henry

  Aitken, Jonathan

  Bendall, Vivian

  Alexander, Richard

  Bennett, Nicholas (Pembroke)

  Alison, Rt Hon Michael

  Bevan, David Gilroy

  Allason, Rupert

  Biffen, Rt Hon John

  Amess, David

  Biggs-Davison, Sir John

  Amos, Alan

  Blackburn, Dr John G.

  Arbuthnot, James

  Blaker, Rt Hon Sir Peter

  Arnold, Jacques (Gravesham)

  Body, Sir Richard

  Ashby, David

  Bonsor, Sir Nicholas

  Aspinwall, Jack

  Boswell, Tim

  Atkins, Robert

  Bottomley, Peter

  Atkinson, David

  Bottomley, Mrs Virginia

  Baker, Rt Hon K. (Mole Valley)

  Bowden, A (Brighton K'pto'n)

  Baker, Nicholas (Dorset N)

  Bowden, Gerald (Dulwich)

  Baldry, Tony

  Bowis, John

  Banks, Robert (Harrogate)

  Boyson, Rt Hon Dr Sir Rhodes

  Batiste, Spencer

  Braine, Rt Hon Sir Bernard

  Beaumont-Dark, Anthony

  Brandon-Bravo, Martin

  825

  Brazier, Julian

  Gower, Sir Raymond

  Bright, Graham

  Grant, Sir Anthony (CambsSW)

  Brittan, Rt Hon Leon

  Greenway, Harry (Ealing N)

  Brooke, Hon Peter

  Greenway, John (Rydale)

  Brown, Michael (Brigg & Cl't's)

  Gregory, Conal

  Browne, John (Winchester)

  Griffiths, Sir Eldon (Bury St E')

  Bruce, Ian (Dorset South)

  Griffiths, Peter (Portsmouth N)

  Buchanan-Smith, Rt Hon Alick

  Grist, Ian

  Budgen, Nicholas

  Ground, Patrick

  Burns, Simon

  Gummer, Rt Hon John Selwyn

  Burt, Alistair

  Hamilton, Hon A. (Epsom)

  Butcher, John

  Hamilton, Neil (Tatton)

  Butler, Chris

  Hampson, Dr Keith

  Butterfill, John

  Hanley, Jeremy

  Carlisle, John, (Luton N)

  Hannam, John

  Carlisle, Kenneth (Lincoln)

  Hargreaves, A. (B'ham H'll Gr')

  Carrington, Matthew

  Hargreaves, Ken (Hyndburn)

  Carttiss, Michael

  Harris, David

  Cash, William

  Haselhurst, Alan

  Chalker, Rt Hon Mrs Lynda

  Hawkins, Christopher

  Channon, Rt Hon Paul

  Hayes, Jerry

  Chapman, Sydney

  Hayhoe, Rt Hon Sir Barney

  Chope, Christopher

  Hayward, Robert

  Churchill, Mr

  Heddle, John

  Clark, Dr Michael (Rochford)

  Hicks, Mrs Maureen (Wolv' NE)

  Clark, Sir W. (Croydon S)

  Higgins, Rt Hon Terence L.

  Clarke, Rt Hon K. (Rushcliffe)

  Hill, James

  Colvin, Michael

  Hind, Kenneth

  Conway, Derek

  Hogg, Hon Douglas (Gr'th'm)

  Coombs, Anthony (Wyre F'rest)

  Holt, Richard

  Coombs, Simon (Swindon)

  Hordern, Sir Peter

  Cope, John

  Howard, Michael

  Cormack, Patrick

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

  Couchman, James

  Howarth, G. (Cannock & B'wd)

  Cran, James

  Howell, Rt Hon David (G'dford)

  Critchley, Julian

  Howell, Ralph (North Norfolk)

  Currie, Mrs Edwina

  Hughes, Robert G. (Harrow W)

  Curry, David

  Hunt, David (Wirral W)

  Davies, Q. (Stamf'd & Spald'g)

  Hunt, John (Ravensbourne)

  Davis, David (Boothferry)

  Hunter, Andrew

  Day, Stephen

  Irvine, Michael

  Devlin, Tim

  Irving, Charles

  Dickens, Geoffrey

  Jack, Michael

  Dicks, Terry

  Jackson, Robert

  Dorrell, Stephen

  Janman, Timothy

  Douglas-Hamilton, Lord James

  Jessel, Toby

  Dover, Den

  Johnson Smith, Sir Geoffrey

  Dunn, Bob

  Jones, Gwilym (Cardiff N)

  Durant, Tony

  Jones, Robert B (Herts W)

  Dykes, Hugh

  Jopling, Rt Hon Michael

  Eggar, Tim

  Kellett-Bowman, Mrs Elaine

  Emery, Sir Peter

  Key, Robert

  Evans, David (Welwyn Hatf'd)

  King, Roger (B'ham N'thfield)

  Evennett, David

  King, Rt Hon Tom (Bridgwater)

  Fairbairn, Nicholas

  Kirkhope, Timothy

  Fallon, Michael

  Knapman, Roger

  Farr, Sir John

  Knight, Greg (Derby North)

  Favell, Tony

  Knight, Dame Jill (Edgbaston)

  Field, Barry (Isle of Wight)

  Knowles, Michael

  Finsberg, Sir Geoffrey

  Lamont, Rt Hon Norman

  Fookes, Miss Janet

  Lang, Ian

  Forman, Nigel

  Latham, Michael

  Forsyth, Michael (Stirling)

  Lawrence, Ivan

  Forth, Eric

  Lawson, Rt Hon Nigel

  Fowler, Rt Hon Norman

  Lee, John (Pendle)

  Fox, Sir Marcus

  Leigh, Edward (Gainsbor'gh)

  Franks, Cecil

  Lennox-Boyd, Hon Mark

  Freeman, Roger

  Lester, Jim (Broxtowe)

  French, Douglas

  Lightbown, David

  Fry, Peter

  Lilley, Peter

  Gale, Roger

  Lloyd, Sir Ian (Havant)

  Gardiner, George

  Lloyd, Peter (Fareham)

  Gill, Christopher

  Lord, Michael

  Gilmour, Rt Hon Sir Ian

  Luce, Rt Hon Richard

  Glyn, Dr Alan

  Lyell, Sir Nicholas

  Goodhart, Sir Philip

  McCrindle, Robert

  Goodlad, Alastair

  Macfarlane, Neil

  Goodson-Wickes, Dr Charles

  MacGregor, John

  Gorman, Mrs Teresa

  MacKay, Andrew (E Berkshire)

  Gow, Ian

  Maclean, David

  826

  McLoughlin, Patrick

  Shaw, Sir Michael (Scarb')

  McNair-Wilson, M. (Newbury)

  Shelton, William (Streatham)

  McNair-Wilson, P. (New Forest)

  Shephard, Mrs G. (Norfolk SW)

  Madel, David

  Shepherd, Colin (Hereford)

  Major, Rt Hon John

  Shepherd, Richard (Aldridge)

  Malins, Humfrey

  Shersby, Michael

  Mans, Keith

  Sims, Roger

  Maples, John

  Skeet, Sir Trevor

  Marland, Paul

  Smith, Sir Dudley (Warwick)

  Marlow, Tony

  Smith, Tim (Beaconsfield)

  Marshall, John (Hendon S)

  Soames, Hon Nicholas

  Martin, David (Portsmouth S)

  Speed, Keith

  Mates, Michael

  Speller, Tony

  Maude, Hon Francis

  Spicer, Jim (Dorset W)

  Mayhew, Rt Hon Sir Patrick

  Spicer, Michael (S Worcs)

  Mellor, David

  Squire, Robin

  Meyer, Sir Anthony

  Stanbrook, Ivor

  Miller, Hal

  Stanley, Rt Hon John

  Mills, Iain

  Steen, Anthony

  Miscampbell, Norman

  Stern, Michael

  Mitchell, Andrew (Gedling)

  Stevens, Lewis

  Mitchell, David (Hants NW)

  Stewart, Allan (Eastwood)

  Moate, Roger

  Stewart, Andrew (Sherwood)

  Monro, Sir Hector

  Stradling Thomas, Sir John

  Montgomery, Sir Fergus

  Sumberg, David

  Morris, M (N'hampton S)

  Summerson, Hugo

  Morrison, Hon C. (Devizes)

  Tapsell, Sir Peter

  Morrison, Hon P (Chester)

  Taylor, Ian (Esher)

  Moss, Malcolm

  Taylor, John M (Solihull)

  Moynihan, Hon C.

  Taylor, Teddy (S'end E)

  Neale, Gerrard

  Tebbit, Rt Hon Norman

  Nelson, Anthony

  Temple-Morris, Peter

  Neubert, Michael

  Thompson, D. (Calder Valley)

  Nicholls, Patrick

  Thompson, Patrick (Norwich N)

  Nicholson, David (Taunton)

  Thorne, Neil

  Onslow, Cranley

  Thornton, Malcolm

  Oppenheim, Phillip

  Thurnham, Peter

  Page, Richard

  Townend, John (Bridlington)

  Paice, James

  Townsend, Cyril D. (B'heath)

  Parkinson, Rt Hon Cecil

  Tracey, Richard

  Patnick, Irvine

  Tredinnick, David

  Patten, Chris (Bath)

  Trippier, David

  Patten, John (Oxford W)

  Trotter, Neville

  Pattie, Rt Hon Sir Geoffrey

  Twinn, Dr Ian

  Pawsey, James

  Vaughan, Sir Gerard

  Peacock, Mrs Elizabeth

  Viggers, Peter

  Porter, Barry (Wirral S)

  Waddington, Rt Hon David

  Porter, David (Waveney)

  Wakeham, Rt Hon John

  Portillo, Michael

  Waldegrave, Hon William

  Powell, William (Corby)

  Walden, George

  Price, Sir David

  Walker, Bill (T'side North)

  Raffan, Keith

  Waller, Gary

  Raison, Rt Hon Timothy

  Walters, Dennis

  Rathbone, Tim

  Ward, John

  Redwood, John

  Wardle, C. (Bexhill)

  Renton, Tim

  Warren, Kenneth

  Rhodes James, Robert

  Watts, John

  Rhys Williams, Sir Brandon

  Wheeler, John

  Riddick, Graham

  Whitney, Ray

  Ridley, Rt Hon Nicholas

  Widdecombe, Miss Ann

  Ridsdale, Sir Julian

  Wiggin, Jerry

  Roberts, Wyn (Conwy)

  Wilkinson, John

  Roe, Mrs Marion

  Wilshire, David

  Rossi, Sir Hugh

  Winterton, Mrs Ann

  Rost, Peter

  Winterton, Nicholas

  Rowe, Andrew

  Wolfson, Mark

  Rumbold, Mrs Angela

  Wood, Timothy

  Ryder, Richard

  Yeo, Tim

  Sackville, Hon Tom

  Young, Sir George (Acton)

  Sainsbury, Hon Tim

  Younger, Rt Hon George

  Sayeed, Jonathan

  Scott, Nicholas

  Tellers for the Ayes:

  Shaw, David (Dover)

  Mr. Robert Boscawen and Mr. Tristan Garel-Jones.

  Shaw, Sir Giles (Pudsey)

  NOES

  Abbott, Ms Diane

  Anderson, Donald

  Adams, Allen (Paisley N)

  Archer, Rt Hon Peter

  Allen, Graham

  Armstrong, Ms Hilary

  Alton, David

  Ashley, Rt Hon Jack

  827

  Ashton, Joe

  Fearn, Ronald

  Banks, Tony (Newham NW)

  Field, Frank (Birkenhead)

  Barnes, Harry (Derbyshire NE)

  Fields, Terry (L'pool B G'n)

  Barnes, Mrs Rosie (Greenwich)

  Fisher, Mark

  Barron, Kevin

  Flannery, Martin

  Battle, John

  Flynn, Paul

  Beckett, Margaret

  Foot, Rt Hon Michael

  Beith, A. J.

  Foster, Derek

  Bell, Stuart

  Foulkes, George

  Benn, Rt Hon Tony

  Fraser, John

  Bennett, A. F. (D'nt'n & R'dish)

  Fyfe, Mrs Maria

  Bermingham, Gerald

  Galbraith, Samuel

  Bidwell, Sydney

  Galloway, George

  Blair, Tony

  Garrett, John (Norwich South)

  Blunkett, David

  Garrett, Ted (Wallsend)

  Boyes, Roland

  George, Bruce

  Bradley, Keith

  Godman, Dr Norman A.

  Bray, Dr Jeremy

  Golding, Mrs Llin

  Brown, Gordon (D'mline E)

  Gordon, Ms Mildred

  Brown, Nicholas (Newcastle E)

  Graham, Thomas

  Brown, Ron (Edinburgh Leith)

  Grant, Bernie (Tottenham)

  Bruce, Malcolm (Gordon)

  Griffiths, Nigel (Edinburgh S)

  Buchan, Norman

  Griffiths, Win (Bridgend)

  Buckley, George

  Grocott, Bruce

  Caborn, Richard

  Hardy, Peter

  Campbell, Menzies (Fife NE)

  Harman, Ms Harriet

  Campbell, Ron (Blyth Valley)

  Hattersley, Rt Hon Roy

  Campbell-Savours, D. N.

  Healey, Rt Hon Denis

  Canavan, Dennis

  Heffer, Eric S.

  Carlile, Alex (Mont'g)

  Henderson, Douglas

  Cartwright, John

  Hinchliffe, David

  Clark, Dr David (S Shields)

  Hogg, N. (C'nauld & Kilsyth)

  Clarke, Tom (Monklands W)

  Home Robertson, John

  Clay, Bob

  Hood, James

  Clelland, David

  Howarth, George (Knowsley N)

  Clwyd, Mrs Ann

  Howells, Geraint

  Cohen, Harry

  Hoyle, Doug

  Coleman, Donald

  Hughes, John (Coventry NE)

  Cook, Frank (Stockton N)

  Hughes, Robert (Aberdeen N)

  Cook, Robin (Livingston)

  Hughes, Roy (Newport E)

  Corbett, Robin

  Hughes, Sean (Knowsley S)

  Corbyn, Jeremy

  Hughes, Simon (Southwark)

  Cousins, Jim

  Illsley, Eric

  Crowther, Stan

  Ingram, Adam

  Cryer, Bob

  Janner, Greville

  Cummings, J.

  John, Brynmor

  Cunningham, Dr John

  Johnston, Sir Russell

  Dalyell, Tarn

  Jones, Barry (Alyn & Deeside)

  Darling, Alastair

  Jones, leuan (Ynys Môn)

  Davies, Rt Hon Denzil (Llanelli)

  Jones, Martyn (Clwyd S W)

  Davies, Ron (Caerphiily)

  Kaufman, Rt Hon Gerald

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

  Kennedy, Charles

  Dewar, Donald

  Kinnock, Rt Hon Neil

  Dixon, Don

  Kirkwood, Archy

  Dobson, Frank

  Lambie, David

  Doran, Frank

  Lamond, James

  Douglas, Dick

  Leadbitter, Ted

  Duffy, A. E. P.

  Leighton, Ron

  Dunnachie, James

  Lestor, Miss Joan (Eccles)

  Eastham, Ken

  Lewis, Terry

  Ewing, Mrs Margaret (Moray)

  Litherland, Robert

  Fatchett, Derek

  Livingstone, Ken

  828

  Livsey, Richard

  Rees, Rt Hon Merlyn

  Lloyd, Tony (Stretford)

  Reid, John

  Lofthouse, Geoffrey

  Richardson, Ms Jo

  Loyden, Eddie

  Roberts, Allan (Bootle)

  McAllion, John

  Robertson, George

  McAvoy, Tom

  Robinson, Geoffrey

  McCartney, Ian

  Rogers, Allan

  Macdonald, Calum

  Rooker, Jeff

  McFall, John

  Ross, Ernie (Dundee W)

  McKay, Allen (Penistone)

  Rowlands, Ted

  McKelvey, William

  Ruddock, Ms Joan

  McLeish, Henry

  Salmond, Alex

  Maclennan, Robert

  Sedgemore, Brian

  McNamara, Kevin

  Sheerman, Barry

  McTaggart, Bob

  Sheldon, Rt Hon Robert

  McWilliam, John

  Shore, Rt Hon Peter

  Madden, Max

  Short, Clare

  Mahon, Mrs Alice

  Skinner, Dennis

  Marek, Dr John

  Smith, Andrew (Oxford E)

  Marshall, David (Shettleston)

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

  Marshall, Jim (Leicester S)

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

  Martin, Michael (Springburn)

  Snape, Peter

  Martlew, Eric

  Soley, Clive

  Maxton, John

  Spearing, Nigel

  Meacher, Michael

  Steel, Rt Hon David

  Meale, Alan

  Steinberg, Gerald

  Michael, Alun

  Stott, Roger

  Michie, Bill (Sheffield Heeley)

  Strang, Gavin

  Michie, Mrs Ray (Arg'l & Bute)

  Straw, Jack

  Millan, Rt Hon Bruce

  Taylor, Mrs Ann (Dewsbury)

  Mitchell, Austin (G't Grimsby)

  Taylor, Matthew (Truro)

  Moonie, Dr Lewis

  Thomas, Dafydd Elis

  Morgan, Rhodri

  Thompson, Jack (Wansbeck)

  Morley, Elliott

  Turner, Dennis

  Morris, Rt Hon A (W'shawe)

  Wall, Pat

  Morris, Rt Hon J (Aberavon)

  Wallace, James

  Mowlam, Mrs Marjorie

  Walley, Ms Joan

  Mullin, Chris

  Wareing, Robert N.

  Murphy, Paul

  Welsh, Andrew (Angus E)

  Nellist, Dave

  Welsh, Michael (Doncaster N)

  O'Brien, William

  Wigley, Dafydd

  O'Neill, Martin

  Williams, Rt Hon A. J.

  Orme, Rt Hon Stanley

  Williams, Alan W. (Carm'then)

  Owen, Rt Hon Dr David

  Wilson, Brian

  Parry, Robert

  Winnick, David

  Patchett, Terry

  Wise, Mrs Audrey

  Pendry, Tom

  Worthington, Anthony

  Pike, Peter

  Wray, James

  Prescott, John

  Young, David (Bolton SE)

  Primarolo, Ms Dawn

  Quin, Ms Joyce

  Tellers for the Noes:

  Radice, Giles

  Mr. Frank Haynes and Mr. Ray Powell.

  Randall, Stuart

  Redmond, Martin

  Question accordingly agreed to.
  Bill read a Second time, and committed to a Standing Committee pursuant to Standing Order No. 61 (Committal of Bills).

  Public Utility Transfers and Water Charges Bill

    BUSINESS OF THE HOUSE
    Ordered,
    That, at this day's sitting, the Scottish Development Agency Bill may be proceeded with, though opposed, until any hour.—[Mr. Peter Lloyd.]

  Public Utility Transfers and Water Charges Bill [Money]
  Queen's Recommendation having been signified—
  Motion made, and Question proposed,
  That, for the purposes of any Act resulting from the Public Utility Transfers and Water Charges Bill, it is expedient to authorise the payment out of money provided by Parliament of any administrative expenses incurred by the Secretary of State in consequence of that Act. —[Mr. Peter Lloyd.]
  10.31 pm
  Mr. John Maxton: I am aware that any money resolution is rather limited in its extent. Although the Bill is largely concerned with matters relating to England and Wales—the sections of the Bill on water apply entirely to England and Wales; Scottish water is controlled by the local authorities — it also covers the South of Scotland Electricity Board and the North of Scotland Hydro-Electric Board. However, we had no Scottish input in the Second Reading debate.
  We have a different system of electricity supply in Scotland. Recently I was at a reception given by the CEGB and it had a big graph on the wall together with a flow chart showing electricity flowing from its system into Scotland. I had to point out that that was totally wrong and that the flow should be the other way round—England gets a lot of electricity from the South of Scotland Electricity Board.
  Mr. George Foulkes: On a point of order, Mr. Deputy Speaker. I cannot hear my hon. Friend properly because of the gaggle of English Tory twits at the end of the Chamber. Would you please instruct them either to get out or to sit down?
  Mr. Deputy Speaker (Sir Paul Dean): I hope that right hon. and hon. Members who are not listening to the debate will carry on their conversations outside the Chamber.
  Mr. Maxton: Of course, I hope that the hon. Members who are speaking at the end of the Chamber will listen to the debate rather than leave. They might learn something for a change.
  There is a Scottish element to the Bill and it is right that we should have a debate, however limited it might be, on the Scottish aspect. Yet again we are seeing Scottish business, related to Scotland under the powers of the Secretary of State for Scotland, included in an English Bill. That limits the opportunity for hon. Members representing Scotland to debate the Bill and that we all deplore.
  We in Scotland also deplore the fact that the SSEB and the North of Scotland Hydro-Electric Board arc included in the Government's privatisation schemes because—I say it again, and I shall keep saying it—the Government have no mandate in Scotland to carry out such legislation for Scotland. The Scottish people firmly rejected the philosophy of the Conservative party. It lost 11 seats in Scotland and is down to a rump of 10. A mishmash of Ministers is left as a result of the election, and the fact is that they do not have the backing of the Scottish people for what they propose to carry out.
  Mr. John Home Robertson: Where is the Secretary of State for Scotland?
  Mr. Maxton: He is not here. He should be here to answer some of the questions that I wish to put to him.
  The Bill is enabling legislation. It gives the Secretary of State and the electricity boards the power to carry out certain functions prior to privatisation. If that is so, perhaps the Minister can tell me why the Secretary of State has already appointed as legal advisers to the SSEB McGrigor Donald (Solicitors) of Glasgow, although I am delighted to see a constituent of mine being given that task. I should like to know why the SSEB has already appointed merchant bankers Noble Grossart to advise it on privatisation. Under what powers are the SSEB and the Secretary of State undertaking this expenditure? As I read the Bill, they have no power to undertake such expenditure until the Bill becomes law. On what authority has the SSEB started down that road at this time?
  It appears that the Secretary of State for the Environment will reply. I should prefer it if it were the Minister of State, Scottish Office, because the two electricity boards are his responsibility, not that of any other Minister. It would be right for him to reply to the debate.
  Mr. Nigel Griffiths: Does my hon. Friend share my concern that while we are having a debate of such importance to Scotland the so-called Secretary of State for Scotland is in Japan and is not here to reply to the grave allegations that my hon. Friend is making about the economy and the supply of electricity to Scotland?
  Mr. Maxton: I agree. I think that all my hon. Friends will accept my point that the reply to my speech must be made by the Minister of State, Scottish Office, not by the Secretary of State for the Environment, whose Department has nothing to do with the electricity supply industry. He is here only to deal with the parts of the Bill on water. I hope that the Minister of State is taking notes and will reply to the debate.
  Other expenditure may be undertaken by the Secretary of State and the SSEB before privatisation. One assumes that there will be some advertising early on. Perhaps the Secretary of State himself will undertake some of the advertising. Millions might be spent on a campaign to sell off the SSEB and the North of Scotland Hydro-Electric Board. Millions of pounds have been spent on the BP and British Gas advertising campaigns—although I suppose that it will be not Sid but Jock they are looking for. Such a campaign will be mounted again at enormous expense to the SSEB and the North of Scotland Hydro-Electric Board. I am sure that most Scottish people would prefer the money to be spent on reducing electricity prices in Scotland. One also assumes that some money will be spent to underwrite the issue of South of Scotland Electricity Board stock. I assume that it will cost much more to underwrite the privatisation measures now than it did before the recent collapse of the stock market. Many stockbrokers will find that they get burnt fingers or perhaps find themselves facing a major disaster as a result of the BP issue. They will demand much higher prices for the SSEB flotation than they did for the BP flotation about which they thought they were sitting pretty and there would be no problem.
  I know that some of my hon. Friends want to take part in this short debate, so I shall bring my remarks to an end.

  831
  However little money is to be spent by the Secretary of State and whatever money will be spent on the SSEB and the North of Scotland Hydro-Electric Board, the Scottish people have said that they would prefer that money to be spent on ensuring that industry comes to Scotland to create jobs and on ensuring that those who are old and weak and who need electricity during the winter for appliances to keep themselves warm get that electricity at a price they can afford. We should remember that the SSEB and the North of Scotland Hydro-Electric Board may become one body under privatisation. So much for competition.
  Mr. Brian Wilson: Does my hon. Friend agree that the concern about the North of Scotland Hydro-Electric Board is that it is unique in having a special social remit written into the legislation which is incapable of protection under privatisation? Does he agree that the whole concept, as advanced by Tom Johnson in more civilised times, is likely to be thrown away in this lunatic idea of privatising a body such as the North of Scotland Hydro-Electric Board and the social remit that goes with it?
  Mr. Maxton: I agree entirely with my hon. Friend. In fact, the North of Scotland Hydro-Electric Board has a remit to supply electricity to remote areas such as the Highlands and islands of Scotland at a disproportionate cost for each individual user if they had to pay the full cost. One could envisage a situation after privatisation, particularly if there is one large electricity board run from the central belt of Scotland by people unaware of the social problems, where the special social remit would be ignored. I know that when the electricity supply in the south of England is hit by a major storm there is an outcry and people down here, quite rightly, feel deprived when they are without electricity. However, in the Highlands and islands a major storm is not unusual and the electricity supply is often threatened. Who will meet the enormous ongoing cost of ensuring that the supply in the north of Scotland is maintained? Will it be the privatised board, whose major concern will be profit, or will the state still have to pick up that cost without any return through the electricity supply industry?
  The people of Scotland would prefer every penny that is spent on the privatisation of the electricity supply industry in Scotland to be spent on ensuring that they get electricity at a price they can afford and that industry gets electricity at a price that ensures it is competitive with the rest of the world. That is what the Scottish people want. That is what they voted for in the general election on 11 June. In my view, the Government should withdraw all the proposals in the Bill relating to Scotland and leave the South of Scotland Electricity Board and the North of Scotland Hydro-Electric Board alone.
  Several Hon. Members rose——
  10.45 pm
  The Secretary of State for the Environment (Mr. Nicholas Ridley): I do not want to deny hon. Members their fun——
  Mr. Foulkes: On a point of order, Mr. Deputy Speaker. Is it in order for the Minister to reply to the debate before it is concluded? There are hon. Members on the Conservative Benches — kilted and otherwise — and on the Opposition Benches who wish to contribute. It does
  832
  not seem appropriate for the Minister, however garrulous and arrogant he may be, to reply before he has heard the debate. Surely it would be more appropriate for you to call hon. Members from the Back Benches, Mr. Deputy Speaker, so that the Minister can give a more comprehensive, if inarticulate, reply.
  Mr. Deputy Speaker: The Minister has risen and I have called him.
  Mr. Ridley: I simply wished to inform the hon. Member for Glasgow, Cathcart (Mr. Maxton) that the money resolution, which I quote, authorises
  "the payment of money provided by Parliament of any administrative expenses incurred by the Secretary of State in consequence of that Act."
  In this case, the Act means this Bill. The only administrative expenses incurred under the Bill are mine, not the Secretaries of State for Scotland or Energy. I incur administrative expenses in the sense that the metering trials could cost my Department and the Welsh Office £22,000 in 1988–89 and perhaps £15,000 each year for the duration of the trials. That is about £2,000 per scheme. As the hon. Gentleman knows, these trials are all to be held in England. We might also need to employ consultancy services that could cost about £10,000 a year for five years.
  Those are the sums of money that Parliament is being asked to approve as a consequence of this Bill. Any money that might be spent by the water authorities or the electricity boards can be spent under powers in other statutes. Therefore, the passage of the Bill in no way affects what the Scottish, Welsh or English water or electricity authorities might spend. It is simply a question of asking the House to authorise me and my right hon. Friend the Secretary of State for Wales to pay some small administrative expenses — and "administrative" is the word in the resolution before the House — for the metering trials.
  Although the hon. Gentleman made a fine speech, which I much admired — and I would not wish to intervene in Scottish politics — I have to say that I suspect that these issues do not arise on the money resolution, and I ask the House to pass it without becoming too excited by the late-night appearance of the Scots, which is becoming rather a plague for those of us from England.
  Dr. Norman A. Godman: The right hon. Gentleman referred to administrative expenses, but is not the Department of Health and Social Security involved, given the important relationship between that Department and the health boards on, for example, direct payments?
  Mr. Ridley: No. Each Bill presented to Parliament that might give rise to new spending has in its money resolution the suggested authorisation for Ministers to spend on items on which they have not previously been given authority by Parliament to spend. In this case, neither my Department nor the Welsh Office has authority to spend money on consultancies and the various small administrative expenses for the water metering trials. That is what the money resolution seeks to grant to us. In no way does it affect other Departments, let alone the Scottish Office, the electricity boards, the water authorities or anyone else.
  Mr. Maxton rose——
  Mr. Ridley: I have finished my speech. I shall give way to the hon. Gentleman, but I make it clear that I am giving way within a speech which has already come to an end.
  Mr. Maxton: If the right hon. Gentleman thinks that the late-night appearance of Scots only four months after the general election is a plague, I have to tell him that he ain't seen nothing yet.
  If the right hon. Gentleman looks closely at the money resolution, he may see some examples of where the Secretary of State for Scotland will incur administrative expenditure. For instance, I cannot see how two separate boards established by separate legislation could be merged into one board unless the Secretary of State for Scotland carried out a function which will be his rather than the function of either board. Therefore, he will incur administrative costs, not someone else.
  Mr. Ridley: That is incorrect. The only point of the Bill in relation to electricity is to give the electricity boards in England and Scotland the legal power to spend money in preparation for privatisation. They do not require financial resolutions to do that. They need the vires. The Secretary of State for Scotland will not incur expenditure because the Scottish electricity boards may spend a little money on preparing for their privatisation. In no sense does the money resolution apply to the Secretary of State for Scotland — nor does it apply to the Secretary of State for Energy—in relation to expenditure by those Departments or electricity boards.
  I repeat to the hon. Gentleman that the money resolution, if the House is wise enough to approve it, will give the Welsh Office and my Department the power to contribute to the administrative costs of the metering authorities.
  10.52 pm
  Mr. John Home-Robertson: The House will have enjoyed that Back-Bench contribution from the Secretary of State for the Environment, and we look forward to the definitive reply on behalf of the Government from the hon. Member for Tayside, North (Mr. Walker). I presume that he is speaking on behalf of the Government on Scottish affairs. When replying to the debate, perhaps he will explain the impact of clause 1 on Scotland. Subsection (7) states that
  "'electricity board' means the Central Electricity Generating Board, an Area Board, within the meaning of the Electricity Act 1947, the North of Scotland Hydro-Electric Board or the South of Scotland Electricity Board."
  But the only reference to "electricity board" in the remainder of clause 1 is in subsection (1), which refers to
  "an electricity board in England and Wales."
  How an electricity board in England and Wales can include either the North of Scotland Hydro-Electric Board or the South of Scotland Electricity Board is not entirely clear to the Opposition. We look forward to an explanation from the hon. Member for Tayside, North.
  The money resolution states:
  "That, for the purposes of any Act resulting from the Public Utility transfers and Water Charges Bill, it is expedient to authorise the payment out of money provided by Parliament of any administrative expenses incurred by the Secretary of State in consequence of that Act."
  My hon. Friend the Member for Edinburgh, Central (Mr. Darling) muttered earlier that expenses are already being incurred by electricity authorities in Scotland, preparing for privatisation, whether the Secretary of State
  834
  acknowledges it or not. We have seen many advertisements hyping the corporate image of the SSEB, presumably to make it attractive to prospective investors. As my hon. Friend the Member for Glasgow, Cathcart (Mr. Maxton) said, most electricity consumers in Scotland would far rather the SSEB used its scarce resources to minimise the cost of electricity to its consumers than preparing to do the Government's dirty work in an area where the Government have no democratic mandate to carry out policies of privatisation or anything else.
  I may say in passing that we have a nuclear power station at Torness in my constituency—my hon. Friend the Member for Cunninghame, North (Mr. Wilson) would make the same point in relation to the Hunterston power station — and there is a great deal of alarm at the prospect of privatisating nuclear installations. I have yet to hear that any private investors are falling over each other to take on the financial responsibility and commitment that will be involved not only in the operation of nuclear power stations but in the long-term commitment to decommissioning nuclear installations, however long a period that may involve.
  A whole stack of issues is related to the general principle of the Bill, but I do not want to dwell on them at this stage because we are supposed to be talking about the money resolution. There are Scottish aspects of the resolution that should be answered by the Government. The Secretary of State has characteristically refused to do that. Money will be spent on administrative expenses, if not on other aspects of the legislation. That is not appropriate and there is no mandate for it. Why on earth are the Government going ahead with it? We look forward to hearing a reply on behalf of the Government from the hon. Member for Tayside, North.
  10.56 pm
  Mr. Bill Walker: The hon. Members for East Lothian (Mr. Home Robertson) and for Glasgow, Cathcart (Mr. Maxton) alluded to the North of Scotland hydro-electric board. Neither of those two hon. Gentlemen represents constituencies where that board operates. They should not say that that applies in my case. The hydro-electric board operates in parts of my constituency.
  Mr. Wilson: Will the hon. Gentleman give way?
  Mr. Walker: I shall give way to the hon. Gentleman in a moment.
  Because of what I have said, I can stand here this evening and say that I have had the endorsement of the voters of Tayside, North. I still enjoy the largest percentage of the vote of any Conservative Member in Scotland. Because of that and because the North of Scotland hydro-electric board is such an important employer and so vital to my constituency, I say to my right hon. and hon. Friends on the Front Bench that I welcome the contents of the money resolution, which will ensure the administrative expenses that will be incurred, and make it possible eventually to privatise the board.
  Mr. Wilson: Given the way in which the hon. Gentleman is dressed, I thought he was going to give us a rendition of the hiking song. If so, and if he goes through the litany of the Scottish islands, he might realise that Arran is in my constituency, and within the remit of the North of Scotland hydro-electric board.
  Mr. Walker: As the hon. Gentleman is new to the House, he does not realise that interventions are not speeches. I alluded to the speeches made by the two Opposition Members that I have mentioned. If the hon. Gentleman waits a little longer, he will realise that we have a format for dealing with these matters, and he will then realise what I said.
  10.58 pm
  Mr. George Foulkes: As my hon. Friend the Member for Cunninghame, North (Mr. Wilson) says, the hon. Member for Tayside, North (Mr. Walker) was wrong about Arran, but he is wrong about many things, so why should he miss out Arran?
  It is always a great pleasure and joy to follow the hon. Member for Tayside, North, representing as he does 10 per cent. of the Scottish Conservative party in Parliament, He has a great, wide and varied experience, and it is a great tragedy and loss to Scottish government that he is not part of the Scottish Office team. People who have been described variously as fanatics and incompetents — I would not use such terms—are there instead.
  Mr. Bill Walker: I should like the hon. Gentleman to be aware that there are some hon. Members who, unlike him, are not prepared to do anything in order to climb the greasy pole—[Interruption.]
  Mr. Foulkes: Tempted as I am to ask the hon. Member to withdraw that disgraceful slur against the hon. Members for Stirling (Mr. Forsyth) and for Edinburgh, West (Lord James Douglas-Hamilton), I shall let it lie.
  Reluctantly moving away from the hon. Member for Tayside, North, I must say that I am surprised, nay, bewildered— if Dame Edna Everage will excuse the use of that expression—at the reluctance of the Secretary of State for the Environment to debate the motion. The Government are noted for their concern about public expenditure, limiting expenditure, every kind of control, making sure that the PSBR is kept down, and so on. I thought that they would be eager to subject to parliamentary scrutiny any expenditure, however modest and carried out by whatever Department or Secretary of State for whatever purpose.
  It is amazing that the Secretary of State for the Environment, who is one of the architects of the Government's policy on public spending control, is so reluctant to have democratic scrutiny. I thought that he would be encouraging us, welcoming our questioning. We want not only a detailed explanation from the Secretary of State but justification for the expenditure. Explanation to Parliament is essential, but justification for expenditure, beyond mere explanation, is even more important.
  The Secretary of State said that the money resolution was relatively narrow, was specific to him as Secretary of State for the Environment and covered only water metering and some other matters. However, you, Mr. Deputy Speaker, and the eminent Clerks who advise you know that the resolution is not specific to the right hon. Gentleman. It is general; it says only "the Secretary of State". In this case, that could be the Secretary of State for Wales or the Secretary of State for Scotland.
  The words of the Secretary of State for the Environment will be recorded in Hansard and we have
  836
  some faith in what he says, but that will not be the law of the land or a resolution of the House. The resolution will mention only "the Secretary of State".
  Despite the fact that the Secretary of State for the Environment has said that the resolution will cover only metering trials and consultancy, those matters are not mentioned. The right hon. Gentleman or other Ministers could get involved in other kinds of expenditure. To coin a phrase that I am sure has been heard before, we are giving the Secretaries of State blank cheques. I am sure that my hon. Friend the Member for Glasgow, Garscadden (Mr. Dewar) has heard that phrase before. He may have coined it in one of his more eloquent moments. I am sure that the last thing the Secretary of State would want the House to endorse is the giving of blank cheques to any Secretary of State — even himself — given that from time to time he may not have the same kind of self control that he in his more wiser moments might wish to have.
  Mr. Wilson: More wiser?
  Mr. Foulkes: I am sorry. At this time of night my English tends to deviate from being excellent, as my hon. Friend the Member for Cunninghame, North rightly says.
  Mr. Norman Buchan: Even Shakespeare approved of the double intensive.
  Mr. Foulkes: I am told that the double comparative is endorsed by the English bard.
  Mr. Buchan: "the most unkindest cut …"
  Mr. Foulkes: The Minister says that we are dealing only with metering trials. He gave us a very general, off the cuff, ad hoc indication of how much these metering trials would cost. In fairness to the House, we need more detail of what the trials involve. We were also told that there will be all sorts of consultancy. We know what happens with consultancies. Friends of the Tory party get roped in and are paid thousands of pounds to tell well-versed officials what they already know. By picking the brains of the officials in the Departments the consultants produce reports saying exactly what the officials could have told the Secretary of State at the beginning of the discussion. I hope that the Secretary of State will give us a clear indication of exactly what these costs involve. We need more detail.
  I shall now turn briefly to the principle behind this expenditure, why we are being asked to spend this money, however small, for whatever purpose and spent by whatever Secretary of State. In a very lucid moment when talking about the free market concept of Government hon. Members one of my hon. Friends said:
  "If Adam Smith were here today he would be turning in his grave."
  Mr. Buchan: Who was it?
  Mr. Foulkes: I will not say. There has been a perversion of the theories of Adam Smith by the Adam Smith Institute. The hon. Member for Stirling (Mr. Forsyth) is the architect not just of privatisation but of that dreadful excrescence that we have in Scotland and which will come to England—the poll tax. Councillor Douglas Mason is one of the gurus. The hon. Members for Eastwood (Mr. Stewart) and for Darlington (Mr. Fallon), who are both here, and the director of the Adam Smith Institute, Dr. "Mad" Madsden Pirrie, are all from that hotbed of the radical Right and its perversion of all that Adam Smith

  837
  stood for — the twisting of Adam Smith's ideals — St. Andrew's university. I know that others such as my hon. Friends the Members for Hamilton (Mr. Robertson) and for Kirkcaldy (Dr. Moonie) made better use of the education provided by that noble institution. It is notable that many people who espouse the Right-wing cause and are the architects of this privatisation came from St. Andrew's university. That place certainly has something to answer for.
  Mr. Bill Walker: On a point of order, Mr. Deputy Speaker. I am trying to follow the debate, but I cannot see how the hon. Gentleman's comments have anything to do with the money resolution.
  Mr. Deputy Speaker: I am also beginning to get uneasy. The hon. Gentleman is straying and must restrict his remarks to administrative expenses.
  Mr. Foulkes: I totally accept, as I always do, Mr. Deputy Speaker, your comments, even though they were prompted by an hon. Member whose advice I respect rather less than I respect yours.
  As I said earlier, the money resolution is drawn so wide that it is not what the Secretary of State says it is. It relates to any Secretary of State. The Bill does not simply refer to water privatisation. It could also refer to electricity privatisation. Therefore I submit that we can talk about the possible expenditure because any Secretary of State is to be given very wide powers to spend money on administrative purposes for any privatization.
  My hon. Friend the Member for Glasgow, Cathcart (Mr. Maxton) was right to talk about possible expenditure by the Secretary of State for Scotland in the preparation for the sell-off of the South of Scotland electricity board. My hon. Friend referred to the fact that the Secretary of State for Scotland is seeking professional advice. I hope that that professional advice is better than that sought by the Secretary of State for Energy in relation to the BP sell off.
  My hon. Friend the Member for East Lothian (Mr. Home Robertson) mentioned that my hon. Friend the Member for Cunninghame, North may be worried about a possible private enterprise firm taking over a nuclear power station. Like my hon. Friend the Member for Cunninghame, North, I live close to the Hunterston power station. The thought that any private operator might take over the operation of Hunterston sends shivers down my spine. The thought of Townsend Thoresen running that power station really sends the shivers down the spine of anyone who has knowledge of the way in which these private enterprise companies operate by maximising profits and being unconcerned about safety. That is how they would act in such a situation.
  Mr. Maxton: I hope that my hon. Friend will agree that one of the administrative costs that the Secretary of State
  838
  must carry prior to the privatisation of the SSEB in particular, is an investigation into how the security of nuclear installations will be maintained and at whose cost once the nuclear power stations are in private hands.
  Mr. Foulkes: I had not thought fully about that and I am grateful to my hon. Friend for elaborating on that point.
  Mr. Andrew Welsh: My hon. Friend has gone on at great length about his total opposition to this measure. Will he give us the guarantee that tonight he and his Front Bench colleagues will vote against it?
  Mr. Foulkes: I am glad that the hon. Gentleman described me as his hon. Friend. I am very pleased to accept that accolade. Just as his party gives us advice about civil disobedience and does not want to lead anything that will follow, I will give his advice the same kind of weight that the people of Scotland gave it at the general election.
  With regard to the question of the expenditure by the electricity boards in Scotland—or at least, expenditure by the Secretary of State on behalf of the electricity boards—we and even the hon. Member for Angus, East (Mr. Welsh) in his more enlightened and wiser moments—which occur from time to time—would be interested to know whether expenditure could be authorised under the money resolution for public relations and publicity? Will it be possible for the Secretary of State for Scotland to employ public relations consultants under the terms of the resolution to try sell to the Scottish people, to "propagandise" to the Scottish people, any advantage, detail or other information about privatization?
  I am grateful for the opportunity to say a few words. I had intended to say a lot more, but clearly time is limited and other hon. Members may want to speak. If no one else appreciates it, I hope that the hon. Member for Galloway and Upper Nithsdale (Mr. Lang), who has the Galloway hydro-electric scheme in his constituency just over the border from my constituency, will appreciate the value of that scheme and the vital importance of balancing the generation of energy with maintaining the environment and its integrity without spoiling it. I hope that even he will understand that that sort of balance between energy generation and protection of the environment can be maintained only by a public utility that takes account of all concerned. It will not be maintained by a private enterprise that is dedicated to making a quick buck in the form of private profit. It is that to which we are addressing ourselves and not merely the few thousand pounds to which the Secretary of State would have us limited.
  Question put and agreed to.
  Resolved,
  That, for the purposes of any Act resulting from the Public Utility Transfers and Water Charges Bill, it is expedient to authorise the payment out of money provided by Parliament of any administrative expenses incurred by the Secretary of State in consequence of that Act.

  Scottish Development Agency Bill
  Order for Second Reading read.
  1.15 pm
  The Minister of State, Scottish Office (Mr. Ian Lang): I beg to move, That the Bill be now read a Second time.
  The purpose of the Bill, as effected by clause 1, is to increase the statutory financial limit for the Scottish Development Agency from the present level of £700 million to £1,200 million. The agency's financial limit was last raised by the Industry Act 1981, when it was expected that the new limit would remain in place until 1989. Because of a revision in the method of calculating what constitutes grant-in-aid, however, it is now estimated that the financial limit will be reached by the end of the present financial year. It is therefore necessary to raise the limit so that the agency's activities are uninterrupted.
  Under section 13 of the Scottish Development Agency Act 1975 a number of items count towards the agency's financial limit. First, there are the agency's general external borrowings—mainly out of the National Loans Fund but covering other borrowing by subsidiary companies. Secondly, the limit includes agency guarantees and Treasury guarantees. Thirdly, there are overseas borrowings from, for example, the European Coal and Steel Community and the European Investment Bank. Finally, the largest item comprises payments from the Secretary of State, consisting of grant-in-aid less administrative expenses, plus public dividend capital issues.
  As is customary when seeking parliamentary approval for increasing a financial limit, we propose to set a new limit which should suffice for around five years ahead. I therefore propose that the limit should be raised to £1,200 million.
  Under the Scottish Development Agency Act 1975 the agency has the principal purposes of furthering the economic development of Scotland, improving its international competitiveness and improving its environment. These it accomplishes through a variety of functions, including the provision of finance, premises, business advice and counselling, sectoral advice, redevelopment of land and property and bringing derelict land back into use. A recent review of the agency carried out by the Scottish Office and the Treasury concluded that in its first 10 years it had made a substantial and positive impact on Scotland's economy and environment. Agency investments from 1981 to 1985 have created additional output of £275 million per annum and a total of about 10,000 jobs.
  Mr. Nigel Griffiths: Is the Minister aware that in my constituency the Scottish Development Agency spends less per head of population than in any other constituency on the Scottish mainland? Will he tell me and my constituents what the Bill will do to foster redevelopment and regeneration in the constituency?
  Mr. Lang: I am sure that the hon. Gentleman is aware that the agency spends resources on the basis of its perception of the areas that most require its assistance and on what sections would most repay investment, for example, and not on a constituency assessment of need. The agency must have the freedom to make these assessments itself. The Bill will enable it to have the resources with which to pursue such a programme over the next five years.
  Dr. Norman A. Godman: On the issue of the rehabilitation of derelict land, can I take it that the Inverclyde initiative budget will be increased as a result of the Bill's enactment? The Minister will be aware that we are facing massive unemployment problems in Inverclyde.
  Mr. Lang: I agree with the hon. Gentleman that the problems of Inverclyde are very severe, and I am glad that the agency is bending so much effort towards finding a solution to them. The Bill will enable the agency, after the end of this year, to continue to receive grant-in-aid and other types of assistance in the form of public funds which will enable it to continue with that policy. I cannot give an assurance on the specific budget of the Inverclyde initiative; that is a matter for the agency itself. However, I am sure that the agency will consider any representation that the hon. Gentleman makes on the matter.
  Various sector initiatives are judged to have played a substantial role in creating, for example, some 2,000 to 3,000 jobs in electronics and some 150 in health care. In its relatively short lifetime, Locate in Scotland, a partnership between the agency and my Department, has been instrumental in attracting over 300 projects involving investment of almost £2·4 billion, expected to create 30,000 new jobs and safeguard a further 16,000. In its environmental role, the agency has since 1979 cleared over 16,000 acres of derelict land, some of them in the Inverclyde initiative area.
  Behind those bald statistics lie many achievements. The statistics cannot easily show the importance of major infrastructure projects involving the agency and bringing wide benefits to Scottish industry, such as the National hyperbaric centre in Aberdeen and the Scottish exhibition and conference centre in Glasgow. The agency's work in high technology matters such as electronics and health care has not only created jobs and wealth; it has also changed the perception of Scotland from a country of the declining heavy industries to one of the expanding high-tech industries of the future.
  In area initiatives, in partnership with local authorities and the private sector, the agency has achieved much in developing opportunities for problem areas, using a continuously evolving approach, from the wide-ranging GEAR comprehensive renewal to encouraging a degree of self-help in the growing number of enterprise agencies assisted.
  Mr. David Marshall:The Minister referred to the GEAR project. Does he not think it terribly sad that the Government pulled the plug on that project when it was only two-thirds completed? If they had given it three more years of life, they could have achieved something really long-lasting and worthwhile, a tribute to the work done by the SDA. Does the Minister not regret the Government's decision?
  Mr. Lang: I think that the hon. Gentleman underrates the achievement that has taken place in the GEAR project. I pay tribute not only to the SDA but also to the regional and district councils that were involved in that partnership. It has run for 10 years. Some £500 million has been invested in the project, some £300 million of it from public funds. By any standards, that is a major investment. Any of us who go and see the area affected can only be impressed by the enormous strides forward that have been made. I hope that the hon. Gentleman draws comfort, as

  841
  I do, from the fact that all the parties to the project have signed a document maintaining a continuity of commitment to help the GEAR area in the future. I hope very much to see it continue to develop in the encouraging way in which it has developed so far.
  One of the agency's major achievements has been its ability to develop innovative mechanisms to tackle problems of enterprise development, business development training, rural areas, urban renewal and peripheral estates. Schemes such as enterprise funds for youth, local enterprise grants for urban projects and the programme for rural initiatives and developments are all examples of such innovation. The agency has also been successful in obtaining the involvement of different bodies in Scotland, ranging from universities to local authorities and private businesses, and bringing them into partnership in projects. The west of Scotland science park, the St. Enoch's development, Drug Development Scotland and the Turing institute all exemplify that approach.
  While the recent review of the agency did not propose any major changes to its operations, the report put forward some 50 recommendations related to its detailed running. They ranged from ways of improving the quality of decision-making within the agency to improving the content and presentation of its annual report, and the provision of an integrated strategic and operational planning and budgeting cycle.
  Mr. Dick Douglas: Can the Minister find any justification for an annual report that contains, on a rough count, 18 photographs of the chairman? Is that an improvement in presentation, or an exercise in egomania by Sir Robin Duthie?
  Mr. Lang: I am sure that Sir Robin Duthie will read the hon. Gentleman's comments in the report of this debate with considerable interest. The report is a valuable tool for the agency in presenting an image of its activities to those potential inward investors and others who can bring great benefit to Scotland. I assure the hon. Gentleman that the agency's image outside Scotland stands very high, and I do not begrudge it the capacity to present itself in an effective and efficient manner.
  The aim of the recommendations in the Treasury review is to increase the agency's effectiveness as a motor of change in Scotland. Progress in the implementation of these recommendations is proceeding according to schedule, with action have been substantially completed in over half of them. With an eye to the future, the agency's corporate strategy for the next three years highlights the major thrusts proposed in the fields of technology, Scottish enterprise, internationalisation and urban renewal.
  First, the agency recognises — and rightly — that Scottish industry, and not simply inward investors, is its client base. The agency is now increasingly applying to the development of indigenous companies the targeted approach that has brought it success in the attraction of inward investment. Particular emphasis will be placed on the engineering and food processing sectors.
  Secondly, the greatest rewards to enterprise are to be found in serving international markets, while the greatest threats to indigenous industry come from international competition and from the international diffusion of technology. By encouraging product and process
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  development, the agency will seek to assist Scottish industry to rise to this challenge. The provision of seed corn and development finance will be needed in these activities, as will a major expansion of the agency's technology transfer capability.
  Thirdly, the agency has developed considerable expertise in encouraging property development to achieve environmental renewal and local economic regeneration. The approach, which has paid dividends in Glasgow's merchant city, can be replicated in other major Scottish urban centres. This expertise will increasingly be applied to urban renewal and regeneration in Scotland. We can expect to see this happening, for example, on the banks of the Clyde in Glasgow and in run-down housing areas.
  Mr. Michael J. Martin: I have been in correspondence with the Scottish Development Agency regarding the rehabilitation and conversion of Spiers wharf in the Port Dundas area, which contains a large number of Victorian warehouses. We have asked the SDA for assistance and it has given a commitment that help will be provided. Will the Minister try to move this project forward? Everybody is happy to see the merchant city development, but there are other parts of Glasgow.
  Mr. Lang: I am sure that the agency will note the hon. Gentleman's concern about this point, and, as he has written to it, I am sure that it will take note of his anxieties.
  Fourthly, special attention will be paid to enhancing the access to jobs of residents of areas undergoing urban renewal in order to improve their long-term income-earning prospects. That will be achieved through the provision of training associated with urban renewal projects.
  Mr. Tony Worthington: Could the Minister confirm that, if precedence is to be given to residents in urban renewal areas, contract compliance will be insisted on in those areas?
  Mr. Lang: That is not the same point as that which I was making. My point was about the special attention that will be paid to enhancing the residents' access to jobs by improving their training and their ability to perform those jobs and, therefore, to apply for them.
  In undertaking these tasks the agency will continue to adopt a commercial approach. It will emphasise partnerships. Funding will be drawn from a range of other participants, and a realistic and disciplined approach is to be expected.
  Since its creation in 1975 the agency's activities have been influenced by the policy and philosophy of the Government of the day, which is right. We set its budget, we are involved in the development of its overall strategy, we agree its priorities and we approve its major specific decisions. That is also why the SDA's role has developed and expanded so that it is now the powerful force that we want it to be in working with the grain of our capitalist economy.
  Where its Labour begetters in 1975 wanted the agency to be an instrument of socialism—interventionist and acquisitive—we have transformed it into an engine of free enterprise, creative and catalytic. In recognition of that, and the increased effectiveness it has achieved in the use of its funds, we have been able to increase its budget in real terms since coming into office.

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  The agency has increased significantly the amount of money generated by its activities, but over the last few years the Government have still provided about £90 million a year in support of its operations.
  Mr. Gordon Brown: Will the Minister confirm that the value of Government spending on the Scottish Development Agency in 1987, when unemployment is over 330,000, is less than it was in 1979 when unemployment was one third of the present figure?
  Mr. Lang: The budget of the agency has increased in real terms since the Government came into office. The hon. Gentleman may not like that fact, but that is the case.
  Mr. Brown rose——
  Mr. Lang: I will not give way. The hon. Gentleman can develop the point in his speech.
  Mr. Brown: Does the Minister agree with the letter that he wrote to me on 13 March? The second paragraph reads:
  "While it is the case that direct Government funding of the SDA has fallen in recent years"?
  Mr. Lang: That referred to the net budget, which excludes the redeployment of sources generated internally in the agency. I am referring to the gross budget of the agency, which is the figure that the Government authorises it to spend; that is the relevant figure that is taken into account.
  Mr. Donald Dewar rose——
  Mr. Lang: The Bill confirms the Government's commitment to the continuing process of improving the Scottish economy by seting a framework for continued funding for the agency over the next five years. It will allow the agency to capitalise on its undoubted past successes and to undertake the longer-term planning that is essential to secure future success and to meet the new challenges and opportunities that lie ahead.
  11.33 pm
  Mr. Donald Dewar: I do not know what the agency has done in its annual report. The presentation may have improved in recent years; there is a similar need in the Scottish Office. The Minister's presentation was dreary. He read his speech with no sense of conviction, but given the quality of the script I am not entirely surprised.
  Earlier we had some fairly entertaining similes. The Secretary of State for the Environment was worried about a plague of Scots filling his rather narrow horizons. We saw the hon. Member for Galloway and Upper Nithsdale (Mr. Lang) doing his Disraeli and shinning up the greasy pole with remarkable agility. Unfortunately, he could not rise to such high standards of eloquence, although we heard a lot about rising to challenges and scattering seed corn. I am afraid that I remained unconvinced.
  It is perhaps a modest measure that we are discussing, but no one should be disappointed about that. It raises the borrowing requirement of the Scottish Development Agency. That in itself is unexceptionable. I am delighted that the hon. Member for Stirling (Mr. Forsyth) has joined us. His support for this measure will have damaged further his already shaky reputation with his friends on the Back Benches. I welcome his no doubt genuine conversion to the importance of public investment in the Government's programme.
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  The debate is of some importance because it gives us a chance to consider the SDA, and not only in terms of a stylish report, interesting though it no doubt is in terms of colour printing and typographical art. Although I take the statistical point made by my hon. Friend the Member for Dunfermline, West (Mr. Douglas), it did not strike me that it was a fiction montage of Sir Robin Duthie. I was remarkably impressed by the collection of snapshots of Ministers in happy attitudes sprinkled about the pages. At one time I thought of presenting an annual prize for the official publication that managed to produce the largest selection of political mugshots. I abandoned the idea because I realised that the SDA would win every year. That would have removed any novelty and excitement.
  The SDA's importance is out of proportion to its global expenditure and to the people that it employs. It has a budget of £140 million gross and employs fewer then 700 people. It has an honourable position and role and has a key place in deciding industrial strategy. It could have an even more effective role, given the right support in the fight against unemployment and in the fight to build upon the badly shaken foundations of the Scottish economy which has been so damaged in the last seven or eight years. I welcome the chance to examine the agency's workings and the framework within which it operates.
  I accept that finance is not the end of the argument. Many other things must be taken into account. Resources and the budget are important. I do not believe that its record is that which is advertised by the Government.
  I listened with fascination to the brief exchange between my hon. Friend the Member for Dunfermline, East (Mr. Brown) and the Minister. I think that the Minister is being disingenuous. I am sure that he is acting in good faith, but he is misrepresenting the position.
  I draw to the Minister's attention a parliamentary answer dated 18 February 1987. I asked a question of the Secretary of State for Scotland. I was given the gross expenditure of the SDA since 1979–80 at constant prices. At 1986–87 prices in 1979–80 the gross outturn of the agency was £134 million and in 1977–78 £131 million. For the last three years the expected outturn was £135 million, £133 million and £131 million. I do not suggest that that is a dramatic fall, but a fall it is. If the Minister says that we do not like the fact that it has gone up in real terms, I return the compliment by saying that he must recognise the facts which his Department supplies and which we are expected to take in good faith. In terms of gross expenditure there has been a fall in real terms; there is no doubt about that.
  The Minister might wish to consider other possibilities. He might say that gross expenditure includes the substantial sum which is generated internally by the agency's activities. Perhaps we should examine the Scottish Office's contribution. It peaks at £116·6 million in 1982–3 and this year it will be £88·9 million. There has been a substantial decline in the Scottish Office contribution.
  Those facts were supplied by the Minister's own Department in a parliamentary answer on 4 February 1987, at column 714. The gross budget has declined and the Scottish Office contribution has declined even further. If that is represented as a triumphant endorsement of the Government putting their full muscle behind the SDA, we are in the land of double talk and bordering on the absurd.—[Interruption.]—My hon. Friends are encouraging me to give way. Perhaps the Minister would like to defend his

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  earlier statement—he has some explaining to do. I do not want to embarrass him for one moment, but I caution him against easy statements about the budget rising when the Minister's figures show the exact opposite.
  Mr. Michael Fallon: I have considered the Bill and I am a little puzzled. The hon. Gentleman is alleging that the SDA has declined in real terms. Can the hon. Gentleman explain why, as a result of the Bill, the SDA's financial limit is to be raised by more than 70 per cent.?
  Mr. Dewar: I always thought that the hon. Member for Darlington (Mr. Fallon) was perverse and almost always wrong, but I thought that he was fairly astute and understood the language of legislation. He will realise that that figure represents the borrowing limit and is accommodating an accumulated borrowing requirement that has mounted over many years. It has nothing to do with the future projection of the SDA budget. I only wish it was true, as the hon. Member implies, that that increase from £700 million to £1,200 million in the borrowing requirement was directly related to some improvement in the financial health of the agency, but that is a non sequitur of remarkable proportions, as the Minister would quickly point out.
  Mr. Martin O'Neill: Given the modesty of the proposals, perhaps that is why there are no SNP Members in the Chamber.
  Mr. Dewar: The migrations of SNP Members are beyond my ken and my understanding. [Interruption.] On cue, as they say, and I am delighted to welcome back two of them to our deliberations. When one thinks about it, that is quite a high percentage of them.
  I believe that I have given a reasonably fair illustration of what has happened to the financing of the SDA, based as it is on Government statistics. There is one component part of the finance of the SDA that will be of particular interest to the hon. Member for Darlington—the part of the budget that is used for industrial investment. I make it clear that I do not necessarily think that the main thrust should be in public investment. I accept the principle that one can pump prime with public investment and that if one attracts a large aggregation of private capital around the public sector core that can give satisfaction to everyone who is interested in the Scottish economy.
  Looking at the Government's expenditure plans for 1987–88 and 1989–90, we see that in 1986–87 the amount invested by the SDA in industrial investment was given as £5·5 million, but the associated private sector investment was given as £83·8 million. Of course that is satisfactory and I would be the first to congratulate the agency on using a minimal investment to good purpose. However, I am also entitled to draw the attention of the House to how small the "seed corn store"—to use the new phrase that the Minister has coined tonight—is, at £5·5 million. We are entitled to question the modesty of that sum.
  I draw the attention of the House to another parliamentary answer, again to my hon. Friend the Member for Dunfermline, East. It appears in Hansard on 5 December 1986, at column 829. It showed that in 1978–79 the sum used by the SDA for industrial investment was £10·7 million, or 8·5 per cent. of its total investment.
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  This year that sum is £9 million, or 7 per cent. I understand that that £9 million should be updated—that there may be some growth—and I am told that the figure may be as high as £9·7 million. However, it clearly emerges from the figures that industrial investment is another area in which, since 1978–79, there has been a decline in the funds available to or used by the SDA.
  As against the Minister's proud claim that he tried to ram down our throats, that the Government had a good record and that the budget had increased, from the Government's own parliamentary answers we see that in real terms the gross budget has declined since the Government came to power, the Scottish Office contribution has declined faster and the amount spent on industrial investment has gone down in cash terms and as a proportion of the total budget.
  I accept that figures can be confusing. One of the parliamentary answers to which I referrred, on 5 December 1986, gives the industrial investment figure as £8·1 million. However, those in the House who are familiar with the report of the review group which reported to the Secretary of State for Scotland in February 1987 will see on page 45 that the SDA total expenditure on industrial investment in 1985–86 is given as £5·7 million.
  Mr. Lang: If the hon. Gentleman looks at the annual report of the SDA, he will see on page 13, under industrial investment, that in 1985–86 the figure was £6·2 million and in 1986–87 it was £7·96 million. So far from falling, it is rising.
  Sir Hector Monro: Bowled middle stump again!
  Mr. Dewar: A sporting metaphor from the hon. Member for Dumfries (Sir H. Monro) is always something to savour. All that I can say to the hon. Gentleman is that he should stick to rugby and not stray on to the cricket field. He has got it all wrong as usual.
  The position is clear and is as I have stated it. The figures have declined in that area as they have in the others to which I referrred. I proposed to draw the Minister's attention to the fact that on page 45 the 1985–86 industrial investment figure is given as £5·7 million while in one of his own parliamentary answers it is given as £8·1 million. That struck me as a curious discrepancy. I therefore took the trouble to telephone the SDA today for an explanation. Having got it, I thought that the House might be interested in it. It gives an interesting insight into the way in which the Scottish Office compiles its figures.
  In 1985–86, the £5·7 million which appears in the report of the review group is the gross advances to new investment. The figure of £1·8 million that is added to it is the capital and interest payable to the Scottish Office, and £600,000 is the rural loan scheme. If one adds those three together, one gets the £8·1 million which, in parliamentary answers, the Minister is claiming is the industrial investment of the Scottish Office.
  All that I can say, in all seriousness, is that I do not understand the logic, consistency or honesty of claiming that the payment of £1·8 million back to the Scottish Office is industrial investment by the SDA in Scotland and its economy. The figure in the review group report of £5·7 million is much more honest.
  Mr. Malcolm Bruce: Does the hon. Gentleman agree that the Minister has given the

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  impression not only that there is adequate funding in the SDA, but that there is a shortage of projects, whereas the reality is that there are more projects coming forward than the SDA can fund? In particular, the rural funding scheme, PRIDE — projects for rural industry and development enterprises—has run out of funding and no new scheme has come forward. I hope that in his concluding remarks the hon. Gentleman will press the Minister to explain what he will do about that.
  Mr. Dewar: I do not know whether I shall find room in my concluding remarks, but, as an interim measure, let me say that I agree entirely with the hon. Gentleman. I draw his attention to a parliamentary answer to me on 22 April 1987, at column 568. It gives a list of applications for investment in every year since 1979. It leaves aside the multifarious activities of the small business department, which last year had 20,000 contacts, which is a formidable range of service. Staying at the top end of the trade, we see that in 1979–80 there were 138 such applications. There were 236 in the past year, a new high and growing all the time. A few years ago, if one talked informally to the SDA, it would say that most of the projects that it thought worthy of support and that there was a pressing need to advance could be accommodated in the existing budget. To my knowledge, no one in the SDA would maintain that position now. The story is very different. People will now say, with total honesty, that there are often projects within the criteria of the SDA, that they feel could and should be helped but where budget restrictions make that impossible. The point made by the hon. Member for Gordon (Mr. Bruce) is a fair one and shows one of our problems.
  Mr. Lang: When the hon. Gentleman telephoned the SDA to ascertain some of the facts did the agency tell him that a lack of funds was a constraint upon its investment projects?
  Mr. Dewar: No, not on this occasion. That was for the simple reason that I spoke to an official who deals with finance to whom I put a number of specific clarificatory questions based upon the misleading figures that the Scottish Office has been providing. I received a prompt, courteous, full and adequate explanation, which certainly helped me. I did not try to involve that official in the sort of discussions to which the Minister is referring. Over time and at a number of levels within the agency that point of view has been put to me. I honestly relay that as my impression and I hope that it is not a view with which the Minister would seriously quarrel.
  I recognise that I have been using a fair amount of figures of one sort or another but I conclude this section of my remarks by dealing with net expenditure by the Scottish Office, after having allowed for net loan repayments and receipts to the Scottish Office itself, on industrial investment through the SDA. It is interesting. The figures are to be found on page 45 of the report of the review group. In 1982–83 the Scottish Office contribution to industrial investment through the agency was £6·24 million. By 1985–86 that had dropped to £730,000. Gosh, that is generous. I have to tell the Minister in the interest of completeness—it may be good news to him—that in 1986–87 the agency tells me that the comparable figure will be £1·29 million. In other words, the net contribution from the Scottish Office to the total industrial investment project of the SDA is just marginally over £1 million. That
  848
  is a less than impressive record at a time when Scotland is still in the clutch of unemployment and when there are scars to be seen in almost every one of our communities.
  I recognise that the general picture is a depressing one. Almost every one of the indicators suggests a lack of Government commitment, a falling-off of financial contribution and an increasingly tight situation for the agency. However, I also recognise that much good work is done in a whole range of areas. The agency is an enormously important landlord in the industrial sphere in Scotland. It is the inheritor of the role of the Scottish Industrial Estates Corporation, which some older hon. Members will remember. About 24 per cent. of the agency's annual budget goes in that area. There is the land renewal programme and environmental improvement, which in 1986–87 will take almost a third of the budget, £46 million. I know that this area can be controversial. For example, I am aware of some of the anxieties about the slice of the budget being spent on the Glasgow garden festival. I regard that as an important and worthwhile project. In passing I pay tribute to my right hon. Friend the Member for Glasgow, Govan (Mr. Millan), who has worked extremely hard to help and encourage that project.
  I referred earlier to the small business division and its 20,000 visits. When I look at the range of activities I am remarkably impressed by the job done by the professionals in the agency. It would be appropriate if the House was to congratulate and send good wishes to Mr. Ian Robertson who has just taken over as chief executive and Professor Neil Hood who is now heading the Locate in Scotland bureau, about which I shall speak later.
  My general point is that the agency could be even more effective if it was more effectively supported by Government. One problem is that we shall have to consider the agency's activities against the background of the Government's general attitude and policy on regional aid. I do not think that any hon. Member will disagree when I say that, clearly, it will be more difficult for the agency if the general background of regional development grant and the framework of assistance to industry is being undermined by other Government policies. The agency's work is fundamentally affected by Government policy on exactly that area of regional aid. There can be little hope of reviving the Scottish economy when building on foundations undermined by the bitter experience of recent years, if Ministers insist on dismantling the necessary incentives to invest. Despite the hard selling by the Scottish Office, the Government's contribution to the SDA has been miserable—the budget had a peak of £116 million and has fallen to £90 million today. It is a wholly inadequate commitment from a Government who are happy to parade the agency as a political trapping, but are not prepared to back it wholeheartedly with the cash that it needs.
  I have already referred to the report on the agency. It was ordered by the Secretary of State, and it summarises his position neatly. I am sure that the Minister would not disagree with the summary, which states:
  "The Government's economic policy is based on the presumption that the allocation of resources is best left to the, free market."
  I am glad to note that the hon. Member for Stirling (Mr. Forsyth), with enormous self-control, has managed to suppress a smile and a vigorous nod because as he is now

  849
  on the Front Bench he has to try to restrain his natural zeal. The Government's position has led to the problems on which I have commented.
  I wish to draw the attention of the House to a matter on which I hope the Minister will comment at the end of the debate, and it is the whole question of the alarming and repeated rumours that the Department of Trade and Industry is reviewing regional aid and that substantial further cuts are on the way. I do not believe that that is irresponsible speculation because the reports are apparently based on Scottish Office sources. It is essential that in this debate the House learns of what is happening and who is in charge. The reports provoked a quite remarkable response from the Scottish Office. Speaking on the BBC's "Good Morning Scotland" programme on 16 October, the Secretary of State could not have been more vehement. Challenged about a cut in regional aid, the right hon. Gentleman said:
  "There might be concern if it was true but it is not true. I am able to repeat to you categorically what I believe Ian Lang has also said that there is no question of these resources available for regional aid in Scotland being reduced."
  In the context of considering the adequacy of the SDA budget and the future of industrial help in Scotland, it would be extremely helpful if the Minister would confirm that his right hon. Friend meant what he clearly said.
  Mr. Norman Hogg: Why is not the Secretary of State here?
  Mr. Dewar: Because the right hon. Gentleman is in Japan, and I understand that even he cannot shout that far. I seriously request a comment from the Minister on the matter. I put such emphasis on it because of the promise that there would be no cuts of importance, and because the last policy review carried out by the Department of Trade and Industry resulted in the loss of £100 million a year from the Scottish industrial budget. Indeed, the Government's public expenditure figures suggest that expenditure on regional development grant will fall from £167 million in 1986–87 to £67 million in the current year. The commentary on the public expenditure figures produced by the Scottish Office shows that the total budget for industrial support is scheduled to come down from £210 million in 1987–88 to £110 million in 1988–89.
  Those planned cuts result from a policy which is a disgraceful capitulation by the Scottish Office to the Treasury. The House is entitled to know whether the clear promise by the Secretary of State that there will be no cuts means that the perverse determination to cut regional aid has now been abandoned. Will the Minister promise that spending will not fall below this year's figures? I can put no other interpretation on what the Secretary of State said, but it is important that it is confirmed in this debate.
  The Secretary of State made another startling suggestion and remarkable claim in that interview. He announced that the Department of Trade and Industry has no responsibility for regional aid north of the border. He could not have put it more bluntly. I quote directly from the Secretary of State:
  "It will not be a matter for the Department of Trade and Industry to decide. They may be responsible for regional aid in England and that is reasonable and proper, but I and my colleagues are responsible for regional aid in Scotland."
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  This appears to be a major shift in power between the Department of Trade and Industry and the Scottish Office. Or has the Secretary of State misled the Scottish public?
  As I understood the position—no doubt the Minister will confirm whether I am right—although the Scottish Office is responsible for the administration of the regional development grant, the mechanics of payment, the level of support, the criteria, the qualification for eligibility, the overall policy framework and the boundaries within which the support is paid remain the prerogative of the Department of Trade and Industry. Are we to take it from the Secretary of State's remarks that those central issues are now the sole responsibility of the Scottish Office? If plain English means anything, it means exactly that.
  When I spoke on the telephone today to the noble Lord who heads the Private Office in the Department of Trade and Industry he seemed to be blissfully unaware of this important shift in Government policy, but perhaps the Department has simply not yet been informed. I shall check on the position with the Prime Minister. Pending that no doubt authoritative reply, we should have an explanation of what the Secretary of State meant from his senior colleague in charge of this area. If his claims cannot be substantiated, it is essential that we know that. Indeed, it is essential that we know whether the noble Lord or the Secretary of State is calling the shots. If there has been no change of policy, I object to senior Ministers going on radio and saying things which are no more than a dishonest smokescreen, attempting to bolster an inaccurate position.
  Mr. Lang: Steady on.
  Mr. Dewar: Would the Minister care to rise now and tell me what the Secretary of State meant?
  Mr. Lang: I will answer.
  Mr. Dewar: I await the Minister's answer with great interest. I read carefully what the Secretary of State said, and I expect the Minister to explain exactly what is afoot.
  Mr. Lang: I understood the hon. Gentleman to say that he heard a broadcast. Now he is saying that he read it. Will he clarify the matter?
  Mr. Dewar: Both. Broadcasts are not always ephemeral. It is sometimes possible to check the contents in case one misheard. I was so startled I did. I had not.
  If there are cuts, they will have a serious effect upon the ability of the SDA to do its job. Perhaps the Minister will turn his attention to the genuine point made by the hon. Member for Darlington. There is a substantial increase in borrowing requirement from £700 million to £1,200 million. The Minister said, coyly, that this would allow uninterrupted activity on the part of the agency, but was careful to say that he would give no guarantees about the future shape or size of its budget. It is important to press him to know whether the increase in borrowing requirement will leave adequate room for a generous and necessary increase in the agency's funding, and to ask him whether we can look for some redress against the miserable approach that has characterised Government policy during the past few years. There is no doubt that there are projects that require help and areas that are in the grip of recession, and that the agency could have a

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  more effective role if it was given the resources to carry on the job that it has done with some distinction in many places.
  I strongly support—it is worth putting this on record — the efforts of the agency to take areas in which it believes there can be genuine industrial growth in Scotland, to try to encourage excellence there and to attract firms that move in. The most obvious example of that, as you, Mr. Deputy Speaker will know, is the electronics industry, which is at the centre of the debate.
  I sometimes resent the myth-making that comes from Conservative Benches which suggests that we in some way resent the introducton of the electronics industry to Scotland and are grudging in our welcome when there is an announcement about it. I am delighted to see any signs of growth, movement and inward investment in Scotland, such as Compaq at Irvine, Ford in Dundee, or the big development in Livingston with Japanese capital by the Shin-Etsu Handotai company mentioned in the press today. I shall be delighted to see it come. However, we are entitled to protest against the way in which the arrival of an electronics company is sometimes used as an alibi for almost everything else that is happening on the Scottish industrial scene.
  Again, I recommend that the Minister reads the answers that his Department provide to Parliament. One, given in reply to a Question on 5 December 1986 suggests that in the electronics section in 1979 there were 38,350 jobs in Scotland, and in 1985 there were 39,700, an increase in six years of just over a thousand. Of course, that is welcome; let no one take any of my remarks as begrudging the importance of that improvement; but even if one makes a generous projection and assumes that that total has risen to 44,000, when measured against an unemployment rate that, on a comparable basis of compilation, has more than doubled since 1979, it cannot he regarded as a panacea. We need much more effort by the Government actively and energetically to reinforce any favourable trend that exists.
  Of course the agency has done well in Clydebank, in the Garnock valley, in Inverclyde and Dundee, and many other parts of Scotland. No one would deny that. However, I do not believe that it will be able to build and improve on that record unless there is a change of direction on the part of the Government.
  I and my hon. Friends thought it interesting that the Minister boasted that the Government were turning the agency into an engine of free enterprise. That sounded like ideological claptrap, and the Minister should be ashamed of himself. Perhaps it was an apologetic attempt at a peroration, but it did nothing for me. Turning the agency into an engine of free enterprise is not the end product. Certainly, the agency should be about partnership and working with the private sector, but to talk about it as some sort of Thatcherian model, as the phrase suggested, is fundamentally misconceived.
  I say to the Minister with some regret that there are still, perhaps, people in high places in the Scottish Office and on the Conservative Back Benches who entertain real doubts about the value of this type of agency. Plenty of Conservative hon. Members will regard with suspicion even this modest increase in its borrowing powers. They do not even all wear kilts, although some of them do. There will he those who see themselves as the sea-green incorruptibles of the Prime Minister's new revolution and who see any increase in public expenditure as some form
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  of fiscal anathema. Those are not the people who should be voicing thoughts about the future development of the Scottish Development Agency. It is, perhaps, not surprising, however, because if one looks back over the record, while Conservative politicians have always been happy to use the agency as part of the propaganda battle, they have always dragged their feet when it came to spending money and giving real incentives and support to the fight.
  Even now, we see some extraordinary developments in Conservative thinking. Many of us remember Mr. Michael Ancram, though it seems a long time since he was an hon. Member. He explained recently that everything had been wrong in the previous Government, of which he was a distinguished member, because they had not forcibly fed Thatcherian policies in Scotland with sufficient vim and vigour.I suspect that Mr. Ancram would tell me that part of the revolution would be a new hostility to the kind of partnership arrangements between the public and private sectors that are represented by the SDA.
  In closing — I want to allow time for many of my hon. Friends—I tell a cautionary and instructive tale to those who worry about policies that would allow the agency to develop its full potential. I used to serve on the Select Committee on Scottish Affairs. Some hon. Members will remember that Committee and I say in parenthesis that I hope that the Scottish Office will use its influence with the authorities and the Leader of the House to ensure that the Committee is soon up and running.
  Mr. Bill Walker: If the hon. Member will confirm that he will come back as chairman of the Select Committee I might change my views about that Committee.
  Mr. Dewar: Was ever an hon. Member tempted thus? However, I have to weigh carefully not only whether I would be good for the Select Committee, but whether the hon. Member for Tayside, North (Mr. Walker) would be good for the Committee—which may be a more difficult matter. I know that he made his intervention seriously and I take it up. I have seen stories in the papers in which the hon. Gentleman and, I think, the hon. Member for Eastwood (Mr. Stewart) have made it clear that they would never serve on the Committee. Labour Members were genuinely sorry to see those statements. If the hon. Member for Tayside, North is saying that in certain circumstances he might reconsider his position, that might encourage his hon. Friends to advance the setting up of the Select Committee, and that would be a good thing.
  But I am being distracted,. I was about to say that back in 1980 the Select Committee carried out a lengthy inquiry into the attraction of investment into Scotland. It is a matter of peculiar interest, because I constantly hear from Scottish Ministers, including the Under-Secretary who opened the debate, much praise for Locate in Scotland. I endorse that praise; the agency has done well and has showed imagination and been successful, often in a highly competitive market.
  However, I find it extraordinary — I am sure that you, Mr. Deputy Speaker, will at least understand my puzzlement even if it may not be professionally proper for you to share it—that Conservative Members should be so enthusiastic about Locate in Scotland when they were so hostile to its birth.
  I was chairman of the Select Committee during its investment inquiry and a chairman's report emerged under

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  my name. It gave heavy and proper emphasis to the opportunities for marketing Scotland and the importance of preserving the independent offices of the SDA, especially in north America. It became a matter of very great contention and the Conservative majority on that Committee threw out that Chairman's report and substituted its own. The report was finally adopted by a majority vote of the Committee and it argued that there should be no independent attempt to market Scotland abroad, that the independent offices of the Scottish Development Agency should be closed, and that every effort should be made to merge Scotland's interests in something called an "Invest in Britain" bureau.
  Perhaps I could give a hint of the summary by reading from part of it to give hon. Members a taste of it. It says:
  "Abroad, a separate Scottish effort alongside the FCO network would result in duplication of effort and would confuse potential investors."
  It went on bravely to argue that one might second Scots into appropriate consulates on a temporary basis to give a little bit of expertise to the British selling effort.
  That report ran totally counter to the independent selling of Scotland abroad and totally counter to the whole spirit of Locate in Scotland. That was forced upon us by the Conservative majority led by the hon. Member for Eastwood who moved the amendment and in turn, although passingly, became Scotland's Minister for Industry. He was loyally supported, I am sure with total sincerity, by the present Minister for Industry, the hon. Member for Galloway and Upper Nithsdale (Mr. Lang). I do not know whether he is now in sackcloth and ashes and penitent, but I find his praise for Locate in Scotland and his pride in that institution just a little hypocritical, given the extent to which he fought against its founding. That is a cautionary tale because it illustrates the true colours flown by the Minister, despite the presentational exercise carried out by his Department. We are entitled to be sceptical about his bona fides.
  I could be tempted to say a few words about the general economic climate in Scotland because it fully justifies anxiety. There is no doubt that many storm signals are still flying. I welcome any improvement in the unemployment figures and the Minister will rightly point to some decline in recent months. When he looks at our industrial base he will agree that there has been a great loss in manufacturing jobs. That was tellingly and effectively dealt with by the director-general of the CBI in a recent speech in Glasgow. When the Minister looks at the problems that we face in many sectors he will understand my concern. In expressing that concern I am echoing what is felt by many people throughout Scotland.
  The important thing is to try to improve that situation. I hope that the Minister will think again about the way in which the Scottish Development Agency has been dealt with in recent years. I recognise that he has doubts about the tradition of intervention and about the role of public investment. But if he looks at the considered judgment contained in the report of his own review group set up by the Secretary of State when the SDA was under pressure from the Treasury—there may be some credit there for the Scottish Office—he will see that it contains a strong recommendation for the kind of work carried out by the agency. Paragraph 2.28 says:
  "The Agency has had a substantial and positive impact on Scotland's economy and environment. On balance, we are
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  satisfied that over the first ten years of its existence the Agency has borne out the expectations that considerable benefits would flow from such a body in Scotland."
  The hon. Member for Darlington, who has great expertise in this matter, will agree that there is great interest in the north of England in the development agency model. It is a cliché to say that imitation is the best form of flattery, but I do not regard it that way. It is good that the model that we have pioneered in Scotland should now get such sympathetic consideration in other parts of the country which also suffer from Britain's metropolitan obsession and where structural difficulties are very apparent and the unemployment so scarring.
  There is an enormous amount of work to be done and that is why we decided to raise these issues in the debate and decided not artificially to foreshorten discussion. We have done it because we feel strongly that we cannot be satisfied by the Government's record and have every reason for pressing and pressing again and returning again and again to the themes and the crisis which is undoubtedly a major cause for worry in the everyday lives of Scots in every part of the country.
  Mr. Dennis Canavan: On a point of order, Mr. Deputy Speaker. I understand that this debate is likely to go on for several hours. I wonder whether some medical assistance could be brought to bear for the hon. and learned Member for Perth and Kinross (Mr. Fairbairn), who appears to be indisposed or possibly anaesthetised as a result of the effects of one of Scotland's greatest exports.
  Mr. Deputy Speaker (Sir Paul Dean): I think that we had better get on with the debate.
  12.20 am
  Sir Hector Monro: I was disappointed by the rather grudging speech from the hon. Member for Glasgow, Garscadden (Mr. Dewar) when the Government are putting forward a great programme of increased borrowing powers for the Scottish Development Agency of £500 million. I would have thought that that would receive warm approval from both sides of the House and particularly from Opposition Members. It is nice to see so many Opposition Members coming back to try to redeem their soiled reputations after they were taken to the cleaners in the debate in July.
  It is good to consider that the debate is taking place in the context of a continuing fall in the level of unemployment in Scotland. The SDA has played a part in that welcome news.
  Mr. John Home Robertson: Rubbish.
  Sir Hector Monro: Why is it rubbish for the SDA to take some credit for the fall in the level of unemployment in Scotland? That is very welcome. After all, it was the whole objective of the SDA to achieve just that.
  Mr. Home Robertson: That is why we set it up.
  Sir Hector Monro: I do not disagree that Cie hon. Gentleman's party set up the SDA in the 1970s. Some of the issues raised then were very relevant to the development of the SDA that has taken place since.
  Mr. Norman Buchan: What proportion of the so-called drop in the level of unemployment is caused by part-time employment and how much by the fiddling of the figures over the past nine years?
  Sir Hector Monro: If the hon. Gentleman goes to the Library he can look it all up.
  The important point is that the percentage of unemployment has dropped by one point in the past year. That means that there are 25,000 more jobs in Scotland than a year ago. That is certainly good news. That is a very much better position and represents many more new jobs than were created in one year at any time during the previous Labour Government.
  In the travel-to-work area in my constituency, the unemployment level in Annan has dropped to 12.4 per cent., in Lockerbie it has dropped to 11.7 per cent. and in Dumfries to 9.6 per cent. All those figures are below the national average and are very welcome. With regard to Dumfries, if we exclude Orkney, Shetland and the Borders, the figure there is the lowest in Scotland. However, we are not complacent about this. Heavens, no. It is, however, a basis for a move forward to improve the economic position and to bring down unemployment still further.
  How should we develop the trend? First and most important we should continue the sound economic policies that have brought the trend into being — containing inflation, keeping interest rates under control and good housekeeping, particularly among local authorities, and keeping down rate expenditure. Secondly, we must tune, and indeed fine tune, all the Government agencies involved — the Highlands and Islands Development Board, the Scottish Development Agency that we are discussing tonight, assist in every way in the private sector through the enterprise trusts — which have been very effective throughout Scotland — and through the local authority economic development committees.
  There is no doubt at all that in the fine tuning that has taken place programmes such as Locate in Scotland and the selective assistance that has been given to industry have helped immeasurably overall. That is why we welcome the arrival of Ford into Scotland in a significant way and the substantial development at Butlins. We welcome also the Japanese companies that have expressed an interest in Scotland and have arrived in it over recent months. We pay tribute to the dept of the Scottish Office that deals with industrial affairs and to the SDA, which is able to provide factories throughout Scotland when they are required, sometimes at quite short notice. I am pleased by the way in which the agency reacted in respect of the large new factory at Annan for Pinneys, which has been one of the great successes of recent years.
  There are difficulties, however, with regional policies and assisted area status in Scotland for those who receive financial assistance. It would be much better if we considered each application on its merits and not merely in terms of the proposed siting of the factory. There will obviously be a better return for Government money if the factory is established where it is most likely to be successful and where market forces suggest it should be. That is especially important for rural industries because much of rural Scotland is outwith the assisted area map. There are forestry and infrastructure problems in terms of European grants, which are not available except within assisted areas. [HON. MEMBERS: "No."] I am allowed to say what I think. I know how this situation has arisen and I am telling the Minister that I do not agree with the considerations that lie behind it.
  Mr. O'Neill: Will the hon. Gentleman explain to the House why on 25 June 1975 he voted against the creation
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  of the Scottish Development Agency? Is he thankful now that on that occasion there were 75 more Labour Members than Conservative Members to support the then Labour Government and ensure the establishment of the agency and the successes that it has achieved?
  Sir Hector Monro: Objections were expressed in Committee to the establishment of the small industry section of the SDA. There is no doubt that without SICRAS, which we lost with the setting up of the SDA, small businesses in Scotland, especially in rural areas, have suffered considerably.
  There is much to be said for individual applications for industrial assistance in Scotland to be treated on their merits and not on the basis of assisted area status. If that criterion were adopted, we should enjoy better value for money throughout Scotland for the resources that are allocated to regional policy.
  By any standards the SDA has been an overall success. Its budget has been increased from £80 million in 1979 to £136 million in 1986. Some of the great projects—most of them in the constituencies of Labour Members—have been extremely valuable to Scotland. I have in mind the St. Enoch's complex and the garden festival, which will be a great success next year. I am glad that many local authorities are making a particular effort to ensure that the festival is the great tribute to Scotland that we expect it to be. There is also GEAR, Glasgow Action, the Clydebank scheme, the Leith project and the Coatbridge project. A great deal is going on in Scotland through the SDA, and all credit to it.
  Mr. Tom Clarke: The hon. Gentleman has referred to Coatbridge, a reference that is normally reserved for the Minister, who did not get round to making it this evening. Has the hon. Gentleman ignored the fact that the Coatbridge project has not yet produced the number of jobs that were lost at Gartcosh alone?
  Sir Hector Monro: The equation is pretty simple; anyone could have told the hon. Gentleman the answer to it.
  The SDA report speaks in glowing terms of the Coatbridge project, and good luck to it. We do not want to criticise it for other reasons. All these projects show just how enthusiastic the Government have been to reduce unemployment, and to raise the standard of living and quality of life in Scotland. However, unemployment is equally unacceptable in the rural areas. Does the Minister think that the SDA is putting enough resources into rural Scotland, in comparison with what is going into urban and industrial areas?
  We have looked at the report from the Select Committee on Scottish Affairs, and the hon. Member for Garscadden quoted at length from another subject discussed by the Committee. When we considered the Highlands and Islands Development Board, and went into great detail about what it had achieved, the Committee concluded that there was room for a rural development fund to assist rural Scotland elsewhere in the same way as the Highlands and Islands board does in the Highlands. Indeed, we advocated some £20 million to £25 million a year for rural Scotland. That, I think, was worthwhile, and it was strongly supported in the Select Committee, probably because there was a strong feeling that the rest

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  of Scotland — outwith the Highlands and Islands Development Board area—was not receiving sufficient resources from the SDA for rural development.
  I hope that my hon. Friend the Minister will talk to the SDA, and that it will consider its priorities and emphasise them in terms of where it is placing its resources. I know that it will come up with a large number of schemes; if we look through the report, we can read about them. But there is still a great deal more that could be done to help in the countryside, particularly at a time when farming is going through a difficult period and looking to alternative land use. Here again, support will be needed for small industrial efforts in, perhaps, farmsteading and crafts. We need a flexible approach to planning, and, indeed, to rating. When something quite simple such as cheese-making or a craft workshop is set up, what was a farm building becomes a commrcial building and is rated, and half of the objective of the transfer to alternative land use is destroyed.
  I feel that there has been a lack of support for small local industry, compared with what was available before the setting up of the SDA under the SICRAS scheme. We should do all that we can to enable the SDA and its rural offices, such as the one in Dumfries, to do all that they can to help small industries in the countryside. I am glad, too, that the SDA appreciates the importance of the environment, and of tourism and light industry, and is providing support. But I think that there is plenty more to do.
  I should like to put two questions to my hon. Friend the Minister, which I hope that he will be able to answer later. First, is he yet in a position to announce a new DRAW scheme like the earlier one for rural workshops? I felt that it was most unfortunate that the scheme ended in June, with a number of applications before it, before a new scheme was ready to take them over. Some applicants have felt very let down. Will the Minister tell us whether the applicants who were in the original DRAW scheme will have priority in the new scheme when it is introduced?
  Mr. George Foulkes: I am grateful to the hon. Gentleman for giving way, because, for once, I completely agree with him on the importance of the DRAW scheme. In my constituency a DRAW scheme applicant was told by the Scottish Development Agency that his project was eligible and that he would be given the money, but the scheme was brought to a sudden halt. He had planned his development on the basis of that scheme, but he was led up the garden path. He was extremely disappointed and inconvenienced when the scheme came to a sudden stop. The SDA then offered him a loan instead of a grant. It is vital that there should be a replacement scheme. For once, the hon. Gentleman has got it absolutely right.
  Sir Hector Monro: I am grateful to the hon. Gentleman. I know of an exactly parallel case. I hope that the SDA will take on board the fact that it has failed to introduce a new scheme, and also my great concern that previous applicants must not be overlooked when the new scheme is introduced. They must be given priority and the money as soon as possible.
  I hope that my hon. Friend the Minister will be able to say that there is a new scheme in the pipeline for rural initiatives and that it will be announced shortly.
  Mr. John Maxton: I am delighted to hear the hon. Gentleman say that he wants money to be put into schemes in his constituency. Does he mean that extra money should be given to the SDA to finance those schemes? I hope he is not suggesting that money should be taken from SDA schemes in other parts of Scotland where, as he admitted earlier in his speech, unemployment is considerably higher than in his area.
  Dr. John Reid: On a point of order, Madam Deputy Speaker. At half past 12 in the morning, when such important business is being discussed, there are twice as many people in the Strangers Gallery as there are Scottish Tory Members of Parliament sitting in the Chamber to discuss it.
  Madam Deputy Speaker (Miss Betty Boothroyd): That is not a point of order for the Chair.
  Sir Hector Monro: I hope that a similar amount of money will be made available for the new scheme as was made available for the previous schemes. I feel sure that my hon. Friend the Minister will be able to reassure me on that point. It is also important that British Rail should realise the importance of the part it has to play in reducing unemployment by maintaining services in south-west Scotland and elsewhere for both industry and the public.
  Mr. Norman Hogg: On a point of order, Madam Deputy Speaker. Is it not apparent that the Government are determined to talk out their own Bill and that this is a filibuster? The hon. Member for Dumfries (Sir H. Monro) has nothing of substance to say, and it would be better if he sat down and allowed some of my hon. Friends to make a reasonable contribution to the debate.
  Madam Deputy Speaker: Order. I have every intention of hearing out the hon. Member for Dumfries.
  Sir Hector Monro: The hon. Gentleman obviously did not hear what was said by the Opposition Front Bench spokesman. If he had, he might have raised his point of order then.
  Mr. James Wallace: I know that the hon. Gentleman is concerned about the possible closure of railway stations in his constituency, but does he support the extremely harsh financial restrictions that his Government have placed on British Rail?
  Sir Hector Monro: I disagree with the priorities that British Rail give to the performance objectives that have been laid down for it by the Government. British Rail has tried to wriggle out of its responsibilities in the wrong way. I welcome the increase in the borrowing powers of the SDA and I welcome what the Minister has said tonight. I wish Sir Robin Duthie and Ian Robertson well in the coming year. I hope that they will be able to continue increasing development in Scotland and that they will put particular emphasis on the development of rural areas.
  12.40 am
  Mr. Charles Kennedy: Despite the low key introduction that the Minister gave to the debate—given what was to follow from the Benches behind him it may have been appropriate — it is important to place on the record the fact that the SDA, along with bodies such as the Highlands and Islands Development Board, is a successful example of the blending of public and private cash. Before we hear too

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  much about how the Thatcherite revolution has changed the course of history. it must be recalled that a Labour Government introduced the SDA. The Conservative Government, despite their policies, have continued to support the blend of the public sector attracting private sector finance.
  The Minister, particularly in his role at the Scottish Office, would be well advised to give slightly more unequivocal support to the SDA than the tone of his contribution suggested, not least for two reasons. First, the SDA has operated against a background of uncertainty that was caused by the Treasury review. We should congratulate the SDA on coming through that review with flying colours. Secondly, the Secretary of State for Scotland, to his credit, had to fight a political battle shortly after being appointed when the eyes of the Treasury were cast towards the profits from the enterprises in which the SDA and the HIDB had invested. The fact that the SDA, with backing from the Scottish Office, was successful in that instance should be welcomed.
  The Bill is welcome because it recognises the continuing role of the SDA and it has allowed its borrowing to be increased. However, without wishing to be churlish, it must be recorded that the borrowing requirement of the SDA may be increased by this legislation but, as the hon. Member for Glasgow, Garscadden (Mr. Dewar) and others have said, the direct contribution from the Scottish Office to the SDA has decreased. Whatever the Minister may say in trying to justify the argument that he was putting forward earlier, I hope that he will agree with the objective analysis of the SDA accounts carried out by the House of Commons Library. They show that in 1985–86 the grant was about £91·5 million, but by 1986 it had gone down to £87 million. Therefore, in real terms the amount of funding that the Scottish Office is giving the SDA is declining. Against a background of Scottish industrial decline, that can only be severely damaging, particularly to those parts of the Scottish economy that have suffered most in recent times.
  In addition to the uncertainty of recent times and the fact that the Government commitment to the SDA is on a downward path there is a further nagging anxiety which concerns the draft proposals now with the European Commission which are liable, in the spring of next year, to be submitted to the Council of Ministers. Given the restructuring of the Community budget and the enlargement of the Community as a trading market between now and 1992, the proposals will remove a substantial part of Scotland from eligibility for full regional support. That will be damaging to the SDA's activities and will mean that major infrastructure projects cannot go ahead.
  Mr. Nicholas Fairbairn: Give way.
  Mr. Kennedy: Of course I shall give way. I am tempted to say to the hon. and learned Gentleman, "Make my night."
  Mr. Fairbairn: One of the greatest mistakes that I made this evening was to wake up. The greatest mistake of all was to wake up when the hon. Member for Ross, Cromarty and Skye (Mr. Kennedy) was speaking. I have never heard such rubbish. Perhaps he can explain, to those on his right and on his left, their ludicrous policy in the garbage that he is talking.
  Mr. Kennedy: That must be one of the few contributions in the House which show that the hon. and learned Gentleman makes more sense when asleep than awake. I congratulate him. The House will forgive me if I continue.
  The changes to the European regional development fund will be extremely damaging to Scotland and will have a damaging effect on the SDA. I hope that the Scottish Office and the Department of Trade and Industry will take the lead within the Council of Ministers to press the matter in strong terms. If they do not the loss will be great.
  We also want assurances about the SDA budget since the Minister's arguments are not in line with the facts. I ask the Minister also to examine the index used to evaluate projects in terms of cost per job. Too often political directions come from the Scottish Office. Sometimes there is political unwillingness to approve a major project. That has happened recently in the constituency represented by my hon. Friend the Member for Inverness, Nairn and Lochaber (Sir Russell Johnston). An apparent political unwillingness is sometimes translated into decisions which public agencies have to make when justifying turning down a project on the basis of cost per job. I should like the Minister to consider that matter.
  In conclusion I follow on from the hon. Member for Dumfries (Sir H. Monro), who spoke about the need for a rural development fund or a full rural development agency of the type that exists within the boundaries of the Highlands and Islands Development Board, but which, as yet, has not been extended to other parts of Scotland. On behalf of my hon. Friends and, I am sure, hon. Members representing rural constituencies in different parts of Scotland I would stress that we endorse the recommendation from the earlier report of the Select Committee on Scottish Affairs. I hope that the Minister will be positive in his response to that.
  Mr. Canavan: The hon. Gentleman may be surprised to know that I agree with a lot of what he has said He said that he spoke on behalf of his hon. Friends and I wonder whether he includes in that phrase the leader of the neo-militant tendency within the alliance?
  Mr. Kennedy: Yes, it extends both to the Devonport Druze and the Selkirk shi'ites. That comment is perfectly parliamentary as a reading of the middle east situation at the present time will show.
  I should like to underscore the importance of the rural infrastructure — [Interruption.] My hon. Friend the Member for Orkney and Shetland (Mr. Wallace) has just suggested the Caithness Contras.
  I hope that the Minister will give attention to the importance of rural infrastructure when considering either the existing remit and budget of the SDA or some extended remit that is based upon that important sector.
  A political point that is the cause of great concern to a great many people north of the border is the increasing drift towards the south-east in terms of the operational control of headquarters——
  Mr. Fairbairn: What about Ford in Dundee?
  Mr. Kennedy: I believe that there is another company that is close to the heart of the hon. and learned Gentleman—Guinness.
  The Minister should consider mergers, takeovers and general company distribution within Britain. In those

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  areas of the economy where there is a specific Scottish interest the SDA should have a more enhanced role than it pesently enjoys.
  Although the Bill is welcome, we must not lose sight of the fact that it does not address itself to the more political considerations. In due course I hope that the Scottish Office will turn its attention to those considerations because it would find broad support from all sides of the House and, more important, across political opinion in Scotland.
  12.53 am
  Mr. Thomas McAvoy; I thank you, Madam Deputy Speaker, for this opportunity to make my maiden speech as the Member for Glasgow, Rutherglen.
  I would like to spend some time considering my predecessor, the right hon. Gregor MacKenzie. Many people will remember that Gregor MacKenzie won a by-election in May 1964, ending 13 years of that constituency being represented by a Conservative. It is a sign of the respect with which he is held in the constituency that the former marginal constituency was left in such good stead. He entered Parliament in 1964 and quickly became parliamentary private secretary to James Callaghan and subsequently a Government and Opposition Front Bench spokesman on post and telecommunications matters, industry and the Scottish Office.
  In the short time that I have been in the House I have picked up the feeling that Gregor was regarded as a good House of Commons man. In addition, he had the reputation in Rutherglen of being an extremely diligent constituency Member of Parliament. There is no doubt that the partnership of Gregor and Joan MacKenzie was successful in representing the constituency, and I know that he is regarded in the House and still in the constituency with great affection. He is now a Privy Councillor. Many people here and in the constituency would be highly delighted to see him return to Westminster in another place. As the successor to Gregor and a representative of the Labour and Co-operative movements, I have an ideal before me for which I should strive in the next few years, and, I hope, longer.
  I should like to describe the constituency. As Gregor's maiden speech was in 1964, some people might need reminding of details of the constituency. Gregor represented Rutherglen from 1964 to 1983, and Glasgow, Rutherglen from 1983 to the recent general election, so most of the years were spent within the old constituency boundaries. The bulk of it comprised the Cambuslang and Halfway area. The communities are based on the mining, steel and iron industries. Unfortunately, with their decline, employment has declined in those areas, but in Cambuslang and Halfway we have communities that reflect traditional values and pride in those occupations.
  In the town of Rutherglen, we have a tight-knit local community. At one stage many small employers contributed to the economy and kept the community tight-knit. The town was the oldest royal burgh in Scotland, dating back to the 12th century. In Cambuslang and Halfway and Rutherglen there was a valued tradition of service to local government and a good reputation held by the local councils, which unfortunately, to our regret, was
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  ended by the Government of the right hon. Member for Old Bexley and Sidcup (Mr. Heath) in 1974, with the reorganisation of local government.
  Since 1983 the boundaries have been extended by the addition of parts of Castlemilk and Toryglen housing schemes, part of the city of Glasgow. Although those communities are comparatively young, they have the advantage of having people who moved there who represent the best of the great city of Glasgow. It is such people and their fathers and mothers who made Glasgow great.
  All the communities that I have mentioned have one thing in common, which causes great blight in many sections—the problem of unemployment. Many people before me have spoken and, I am sure, after me will speak more eloquently of the damage done to the social fabric by unemployment. Having been born, brought up and stayed all my life in the constituency, I have seen at first hand the damage done by unemployment in many areas, particularly the damage done to families and young people.
  That brings me to the role of the Scottish Development Agency. It is appropriate that I should make my maiden speech on the SDA because when Gregor MacKenzie was a Minister at the Scottish Office he was directly concerned with it. I am comparatively lucky in having quite an extensive knowledge of the work done by the SDA because of Gregor's continual reporting back to the constituency. The SDA represents a public commitment to employment and the attraction of investment into Scotland. That public investment should be safeguarded and supported, not just tolerated in public life.
  As has been mentioned, the review group reported favourably on the reputation of the SDA. Between 1980 and 1985, 5,000 to 7,000 jobs could be attributed directly to the work of the agency. The inward investment represented by Locate in Scotland is crucial because without it, the new technology and the continual flow of new jobs, one ends up with no employment.
  It is against that background that I appeal, on behalf of the people I represent, for support for the principle and practice of the SDA. Without being too controversial, may I say that there is a feeling among many people that the support from the Government is ambivalent. In spite of the success of the SDA—we feel that what it tackles it tackles well—it is limited by a lack of resources. There must be additional resources so that the work done by the SDA can be expanded and improved in order to bring more employment to areas such as mine. I believe sincerely that market forces alone will not bring employment to my constituency, and I am sure that that applies to many other constituencies.
  The Hoover factory is located in Cambuslang in my constituency and I have some knowledge of that factory because I worked there for 13 years before coming to Parliament. I have first hand knowledge, through the trade union movement within the factory, of the role played by the SDA in securing grants and investment for the Hoover company and securing the future of Hoover at Cambuslang. The investment and support from the SDA is highlighted by the recent purchase by the Hoover company of the land on which the factory is situated. The land was bought from the SDA and the agency was extremely co-operative in its negotiations with the company. The proof of the pudding is shown by the agency's support for the Hoover factory. The factory is

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  now the major European manufacturer of upright vacuum cleaners. We are first in something and that is important to me. In addition, in January 1988 the factory will start exporting upright cleaners to the United States, and, again, that is a success for us. There will be future investment, again with the help and co-operation of the SDA, and early next year we hope to introduce a new range of cleaner motors. In all those issues the presence and support of the SDA was crucial.
  We cannot ignore the role of the trade union organisation within the Hoover factory. After some difficulties there is no doubt that the relationship between the trade union movement and the management at Hoover has enabled the SDA to become involved to a greater extent in recent years. I can speak from first hand knowledge of the reputation of the trade union movement within the factory because my brother, Edward, is a convenor for the Amalgamated Engineering Union within the factory.
  On the other side of the Clyde from Cambuslang is the Cambuslang investment park. It is situated within the constituency of Glasgow, Shettleston. The SDA has invested in the park. It has built many small factories and has actively encouraged small businesses to set up. I was privileged to be a Strathclyde regional councillor for five years prior to coming to the House. I was also fortunate enough to be chairman of the urban aid committee for the Glasgow division of Strathclyde council. In conjunction with the Scottish Office and other organisations, we planned the application and distribution of urban aid. There is nothing wrong with planning. I sometimes get the feeling that "planning" has become a dirty word. We will not get anywhere unless we plan. The Scottish Office co-operated with Strathclyde in planning the distribution of urban aid, although there were one or two comments about the amount of aid. Planning, through the SDA, must play a role in future investment in Scotland, particularly in my constituency. In my opinion, there is no alternative to planning. There is no alternative to maintaining and expanding the role of the SDA and ensuring that we maintain and increase employment within my constituency.
  I know that in previous maiden speeches there has been anger about the breaking of the convention that maiden speeches should be non-controversial. I respect that convention and hope that there has been nothing controversial in my speech. However, I also respect other conventions, one being that when a Member of Parliament is elected it is to represent all his constituents in Parliament. Allied to that, when a Prime Minister and a Government are elected, they also represent all the people. That should be remembered on both sides of the House.
  I have put forward the case for the people of my constituency as other hon. Members have done for all those in their constituencies. We need more employment, and the role of the SDA in providing it is crucial. I strongly support not only the future expanded role of the SDA but the provision of more resources. I therefore ask that a commitment be given to expanding the resources of the SDA.
  Several Hon. Members rose——
  Mr. Ernie Ross: On a point of order, Madam Deputy Speaker. I know that you will be able to help me. There appears to be a rumour circulating that,
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  despite the fact that many hon. Members have deliberately stayed in the House to talk on this important issue, the Government intend moving the closure of the debate. I am sure that you are aware of the number of hon. Members on the Opposition Benches who are seeking to catch your eye. We advise the Government that it would not make much sense if they were to attempt, at this very early stage in this very important debate, to close the debate.
  1.6 am
  Mr. Bill Walker: The hon. Member for Glasgow, Rutherglen (Mr. McAvoy) certainly took the House with him in his comments about his predecessor, Gregor MacKenzie. There is no doubt that Gregor was respected and held in deep affection in all parts of the House. We found the hon. Gentleman's speech interesting. He spoke with conviction and displayed clearly his love of his constituency and his great love of that great city of Glasgow. He also displayed his genuine concern for the problems of the unemployed in his constituency and he left the House in no doubt of his knowledge of the Scottish Development Agency—in particular the assistance that it has given to Hoover. We look forward to his contributions in future debates and are sure that he will take the opportunity, as all of us do from time to time, to be provocative. I congratulate him on his maiden speech.
  During the debate we have been discussing the activities of the SDA, and I wish to place on record my appreciation for the work done by its former chief executive, George Matheson. During his period of office, I always found him extremely courteous and helpful. The hon. Member for Glasgow, Garscadden (Mr. Dewar) said that not everyone on the Government Benches supported the SDA and intervention. He is quite right. I have no hesitation in saying that I have never believed that the only way to pump prime or to encourage internal or inward investment was through vehicles such as the SDA. The creation of conditions that encourage investment is much more important an area of Government activity than the setting up and operating of agencies such as the SDA. The control of inflation, the reduction in taxation and in local and national borrowing together with other measures such as privatisation linked to employee shareholdings——
  Mr. Canavan: On a point of order, Madam Deputy Speaker. I realise that you are being bullied by the Tory establishment there, but will you bear in mind——
  Madam Deputy Speaker:Order. I can tell the hon. Gentleman that I am not being bullied by anyone in this House, but I will hear him out.
  Mr. Canavan: Will you bear in mind the fact that the Labour party is the majority party in Scotland and will not be bullied by English Tories such as the man on your righthand side, the Government Chief Whip, who is trying, to influence you to bring about a premature end to this debate?
  Madam Deputy Speaker: Order. The right hon. and learned Gentleman is seeking my advice on a matter.
  Mr. Walker: I welcome your protection from these interventions, Madam Deputy Speaker.
  The control of inflation, the reduction in taxation and the reduction in local and national borrowing, linked to measures which change attitudes — measures such as privatisation, with the necessary ingredient of employee shareholding—do much more to stimulate investment

  865
  and create jobs than agencies such as the SDA. Equally, I believe that, if we must have such an agency, it is nonsense to operate it within a regional aid policy which is determined by lines drawn on a map, instead of targeting the aid, such as it is, on individual industries, firms or sections of industry where there is real need.
  I can give an example of why I believe that the Scottish Development Agency and regional aid are nonsense. Recently British Aerospace set up a flying training school at Prestwick. I welcome that. I do not welcome the fact that the school is heavily subsidised with public funds, so that it can offer much enhanced wages and pass on much increased costs to potential customers. That would not matter if it was the only flying training school in Scotland, but when another flying training school which has been in operation for 50 years has its business opportunities substantially diminished, and many of its employees enticed away by heavily subsidised wages, it is the economics of the madhouse. It is not useful either to Air Service Training, which is the 50-year-old school in my constituency, or to British Aerospace at Prestwick because it creates completely false economic circumstances at Prestwick and adverse economic circumstances in Perth. That cannot be sensible or logical in the long term. By pricing the training of overseas students out of the Scottish market, instead of having two flying training schools in Scotland we will end up with none because they cannot get customers.
  The other danger is that the future of the 50-year-old school is put at risk because the opposition is enticing away its best employees and then pricing it out of the market, because to continue training the school must bring in new people, who must be offered the inflated salaries which are boosted by the grant-aided assistance.
  The Government must also examine carefully the activities of the SDA in Dundee. I have no objection to the Dundee waterfront being improved, and I support anything that will improve that city, but it is incredible that the waterfront project will contain many retail units when Dundee already has relatively recent developments at Wellgate and Overgate, both of which will be put substantially at risk if the waterfront project goes ahead as presented.
  Mr. John McAllion: I am surprised that the hon. Gentleman, who hails from Perth and is not associated with Dundee, except for the fact that he was a bus driver in the city, has not taken on board the views of the elected representatives at district and regional council level — including members of the Tory party — who supported the waterfront development. Despite the Wellgate and Overgate developments, they continue to support the waterfront development as a major strategic development for the city of Dundee. We would welcome if it the hon. Gentleman would keep his nose out of our affairs.
  Mr. Walker: The hon. Gentleman has his facts wrong. Let me correct them. I was born in Dundee; I grew up in Dundee; I was educated in Dundee; I worked for a substantial part of my career in Dundee; it is still my home town. My daughter will be married in Dundee. The hon. Gentleman has only been in the House for a short time and I suggest that he consults his hon. Friend the Member for Dundee, West (Mr. Ross), with whom I have collaborated
  866
  in matters affecting Dundee. I like to think that where the best interests of that city are concerned, none of us will practise political charades just because we want to use them as means to an end.
  I am concerned that public money is to be put into a project that should be examined much more carefully. If the hon. Member for Dundee, East (Mr. McAllion) had done his homework he would have known that I was the managing director of a retail stores group, so I know something about retailing. I am absolutely certain that among the new retail units on the waterfront, there will be many empty shops as well as in both the Overgate and the Wellgate developments. There are not enough customers for the project to go ahead and for all the shops to be sustained.
  Mr. Fairbairn: Before we get too sentimental about Dundee, let us examine an example of unfairness there. The Stakis hotel on the waterfront can have five years without paying rates. Not 500 yards from it, the Angus hotel has to pay rates of half a million pounds a year. That is not a sensible system; it occurs thanks to Socialism.
  Mr. Walker: I thank my hon. and learned Friend for his intervention. He and I take a keen interest in all developments on Tayside, and we are well aware that the advantages of not paying rates often create distortions for existing businesses. As with the air services training school at Scone, it is equally true that if a company is assisted in such a way that it does not have to meet its normal requirements to sustain services locally, firms that are already in business in its area are disadvantaged.
  I turn now to the issue of industrial development. The hon. Member for Glasgow, Garscadden (Mr. Dewar) is an honest gentleman and I always listen carefully to what he has to say. Although I do not agree with much of it, I have never doubted his industry, integrity and conviction. I was therefore surprised that he did not mention the substantial inward investment that would take place under Health Care International. He seems selective in what he chooses to discuss, and I do not condemn him for that — all politicians tend to be selective. Surely, however, if it is right to have one type of inward investment that creates jobs and opportunities, we must also welcome others.
  I also welcome the decision taken with regard to the quality of decision making in the Scottish Development Agency. One of the major criticisms that I have levelled at the agency down the years has been the difficulty of obtaining decisions from it, particularly for small firms and in rural areas, where getting a decision often took so long that the process was overtaken by events and the matter under discussion became irrelevant because other things had happened.
  My hon. Friend the Under-Secretary will not be surprised if I tell him that I am not excited about allowing the SDA to have greater borrowing facilities.
  Motion made, and Question proposed, That the debate be now adjourned.—[Mr. Michael Forsyth.]
  1.21 am
  Mr. Dewar: I think that I am right in saying that this is a debatable motion.
  Madam Deputy Speaker: I am willing to have the motion debated.
  Mr. Dewar: I am grateful to you, Madam Deputy Speaker. I do not wish to delay the House for long and it

  867
  is not necessarily productive for us to have a lengthy exchange on the motion, but I should express my disquiet at the fact that the motion has been moved at this stage.
  This is an important debate and we must know the Government's mind. It was obviously their intention that the debate should be continued to a finish tonight. We have a remarkable turn-out of Scottish Members in every part of the House and the Government have obviously decided to delay the debate until another day. Before we reach a decision on the matter we ought to be told when we shall return to the Bill.
  The Parliamentary Under-Secretary of State for Scotland (Mr. Michael Forsyth): I am happy to help the hon. Member for Glasgow, Garscadden (Mr. Dewar). I should have thought that next Thursday, when there is to be a debate on industrial policy, would be an appropriate time to reconvene.
  Mr. Alex Salmond: On a point of order, Madam Deputy Speaker. Knowing your concern for the rights of minorities in the House, I am surprised that you accepted the motion without hearing from all parts of the House. Given the number of Scottish Members who wanted to make a contribution to the debate, I am also surprised that the Front Benches want to close the debate so early.
  1.22 am
  Mr. Tom Clarke: The Under-Secretary's intervention was extraordinary. We have just come to the end of a recess which lasted for almost three months — [Interruption.]
  Mr. Andrew Welsh: On a point of order, Madam Deputy Speaker. I thought that I heard the word "lie" used by a Labour Member. I hope that that was not the case, because I believe that that is not the sort of language that should be used in the House.
  Madam Deputy Speaker: That is certainly not the type of language that should be used in the House. I must confess that I did not hear the word.
  Mr. Clarke: The people of Scotland will find it astonishing that—[Interruption.]
  Mr. Welsh: On a point of order, Madam Deputy Speaker. The comment was made by the hon. Member for Dundee, West (Mr. Ross). I invite him to make it again publicly, instead of privately.
  Madam Deputy Speaker: Order. It would be very helpful if hon. Members were not invited to use language that is not appropriate in the House.
  Mr. Clarke: I am addressing myself to the Under-Secretary's motion. We have had a three-month break and we are here ready to go into the small hours to discuss the extremely important matter of Scotland's high unemployment and the role of the SDA, which has been steadily diminished by the Government — their approach was made clear in the weak ministerial speech on Second Reading. The Scottish people expect us to discuss the SDA and the budget proposed by the Government.
  There is considerable urgency about the matter. For example, the Minister spoke about the European Coal and Steel Communities. How do we know that there will not be recommendations about Ravenscraig and that the SDA
  868
  will be in a position to deal with those recommendations? We do not know, and we are entitled to give this matter the utmost thought.
  I understand that the Secretary of State for Scotland has gone to Japan. There was a suggestion that he went there in a hurry when he discovered that the Government of Japan were looking for a Prime Minister. Equally. it has been suggested that they decided quickly to find a compromise before he arrived. The absence of the Secretary of State for Scotland and the quite outrageous way in which Government Ministers are trying to approach this problem is quite unacceptable to the people of Scotland and to the majority of Labour Members that they elected. I hope that the proposal by the hon. Member for Stirling (Mr. Forsyth) will not be accepted.
  1.27 am
  Mr. Buchan: I am grateful for the opportunity to speak on this eminently debatable motion. The motion is a disgrace. We have waited for some months for the House to reconvene so that we could discuss the affairs of Scotland, having demonstrated only five months ago that the people of Scotland wish us so to behave. At 11 o'clock tonight we were confronted by a motion in connection with the most important economic agency for the development of the industry and the environment of Scotland. We went along willingly with the decision to have a late-night debate instead of, as should be the case, a debate starting at 3.30 in the afternoon.
  It was no wish of ours to have a debate on this important subject at this time of night, but we were prepared to do it on the basis that every hon. Member would have an opportunity to say how the economy of his constituency and its environmental well-being was faring and how the Scottish Development Agency under the tutelage and guidance of the Government was conducting the business for which it was set up. On the first day back our Front Bench, our Whips and, indeed, our Back Benchers showed a willingness to co-operate in the business of the House by saying that rather than delay' discussion of this important matter, we were prepared to have a debate late at night.
  Some extraordinary things have been said and should be corrected. One of the extraordinary problems that we face is that the Minister of State and his junior Minister who flanks him do not believe in the involvement of public agencies in the economy. The more they tried to stress the success of the Scottish Development Agency under their guidance, the more foolish they made their own economic position. We understood the hesitancy of the Minister in the face of that. However, he had been left with the task and had to do it, because his lord and master had seen fit, on this day of all days, and on this subject of all subjects, to go to Japan. Because of that, we recognise the difficulties of the Minister.
  Nevertheless, no hon. Member speaking after the Minister took advantage of the embarrassing situation that he and his colleague find themselves in. On the contrary, they dealt with the merits of the situation as it affected the people of Scotland instead of making cheap, shuttlecock political points. We are now tempted to play those cheap, political points, but we shall avoid the temptation because the issue is too serious. We must be concerned about the minority parties. That is to say, the SNP——
  Dr. Godman: The Tory party.
  Mr. Buchan: I was coming to the Tory party. My hon. Friend should not take my best lines. There is also the Liberal party and both factions of the SDP. We have heard from only one faction of the SDP in this debate, but he uttered an immortal phrase — if I can find it — which encouraged us to hope that the other faction might enter. Not only have we had a double comparative from my hon. Friend the Member for Carrick, Cumnock and Doon Valley (Mr. Foulkes) who spoke about a "more wiser" Minister, but we were exalted, or rather the Minister was exalted, when the hon. Member for Ross, Cromarty and Skye (Mr. Kennedy) asked him to give "slightly more unequivocal support." I ask the House to consider this phrase and the problem facing the Minister who has to respond to such a request. How does the Minister respond to a request to give "slightly more unequivocal support"? We look forward to hearing that point developed by the other faction of the SDP, because that party must still be seen as a minority party and it has not had the opportunity to develop that point. We look forward even more to hearing the Minister reply to learn how he can give slightly more unequivocal support.
  There was a curious intervention from the hon. Member for Stirling (Mr. Forsyth). It was curious because the Minister of State is present to conduct the business of the House and make such interventions. The Whip is present, keeping his hon. Friends in order and making technical interventions. But no, the theorist, the ideologue, the man whose very soul must have been burned by the words uttered in support of the SDA by the Minister of State which affected his St. Andrew's reactionary economic thinking, intervened. We know how much the Government have rejected Adam Smith, but for the hon. Member for Stirling to sit beside the Minister of State who was endorsing the role of the SDA must have finally caused his impatient intervention. The hon. Member for Stirling had endured it for a few hours, but he could not resist the opportunity to come in.
  What did the hon. Member for Stirling say when he intervened? He said that we should stop the debate for which we had been waiting and in which the Opposition and other minority parties were willing to engage through the night. Even though it should have taken place during the day, we accepted the imposition of the timing of the debate. We recognise that we can only speak to time and eternity because no members of the press are listening to us. Nevertheless, we embarked on the debate and the hon. Member for Stirling said "Let's stop the discussion. Let's not explore the role of the SDA or whether we are getting the right figures or the wrong figures or whether the Bill should be passed." No, he said, "Let's postpone discussion and let's put it on when we are committed to a debate on Scottish industry during the day and some of the matters that we were willing to discuss during the night can be dealt with during the day when they may be reported, for example when we debate the nature of the Scottish economy next Thursday. We could then explore some of these issues." That is compounding evil with evil. First he prevents us from debating these matters tonight, then he replaces a debate during the day on the Scottish economy with this debate. We are facing a monstrous conspiracy from the Government Front Bench
  Mr. Foulkes: Double jeopardy.
  Mr. Buchan: Double jeopardy. Indeed, a double comparative between the two hon. Members on the Government Front Bench.
  This is monstrous. I am an innocent in these affairs. I admit with humility that I know a little of the workings of the House. However, I have never understood them. We have an opportunity to explore them tonight. To what extent is it in your hands, Madam Deputy Speaker, to stand up and say, as I am saying, that you are willing to hear a discussion but that, upon hearing the words of truth from the Opposition Back Benches, you understand that this monstrous proposition should not be accepted?
  We know that the Tories have the power to carry the vote. They are all in the woodwork, in the wainscotting, behind the busts and statues. They are skulking in the bars. They are ready to come out at the call of their lord and master. Although she is not here, her spirit is here. They will carry the vote. I cannot give any hope to my colleagues, comrades friends and minority groups. The Government will carry the vote. If they do, and if you, Madam Deputy Speaker cannot intervene to stop it, can you tell me whether you have the power to return the debate to the earlier topic of discussion?
  Madam Deputy Speaker: I have to inform the hon. Gentleman that I have no power to do that.
  Mr. Buchan: We learn things, even at 1.33 am.
  I regret that, but I have utmost confidence in you Madam Deputy Speaker and I recall that you once said on a famous occasion "Just call me madam."
  Mr. Fairbairn rose——
  Mr. Buchan: I am willing to give way as long as I do not lose the opportunity to speak again. Surely the hon. and learned Member for Perth and Kinross (Mr. Fairbairn) is not to make a speech now. I have been awake waiting to make a speech about the Scottish Development Agency. I am trying to point out the inadequacies of the figures while the hon. and learned Gentleman has been sleeping in his fond Elysium, dreaming of castles. That has been his contribution while the rest of us have been working.
  We are in a difficult position, Madam Deputy Speaker. First, I have your assurance that you have no power to intervene to reject the monstrous suggestion that has been made from the Government Front Bench, Secondly, there is the smug contentment of the Minister of State and the Under-Secretary of State that they have an army of cohorts who are available to carry the day. They are trying to prevent a debate on the Scottish economy from being conducted during the day by replacing it with the Second Reading debate on which we were engaged. They had a mandate to hold the debate through the night and we were willing to accept that. I hope that the Government Chief Whip and the Prime Minister have been sent for to see the behaviour of his and her junior Ministers. We are faced with a monstrous proposition and I hope that it will be rejected with contempt.
  There are Tory Members everywhere and I turn to them. There are some honest men among them—there are not many but statistically there must be some. After all, many of them are still in the Palace. They have not thrown themselves out of windows, despite the events at the stock exchange this week. The fact that they are here

  871
  shows a devotion to duty beyond the call of profit. I understand that some of them must have been pretty sad this week.
  We are facing yet another crisis of capitalism. I have lived through 17 final crises of capitalism and this week we have been witnessing yet another. It would not be relevant to debate what has been happening but I believe that it would be in order to discuss the nature of the present crisis. The Tory party, the governing elite of the country, has rejected its connections with industry, commerce, the land and agriculture. Instead, it has confined itself to creating a link with the City. It is concerned only with exchanging pieces of paper and not with the production of real wealth. It has been assuring the country that these pieces of paper would continue to expand but, lo and behold, they have decreased in magnitude.
  Madam Deputy Speaker: I am interested in the hon. Gentleman's speech, but he is straying a long way from the point. I have been enormously tolerant and I wish that he would return now to the motion that is before the House.
  Mr. Buchan: I did not realise that I was straying, Madam Deputy Speaker. I was merely trying to describe the nature of the crisis. The facts speak for themselves. We have massive unemployment and the failure of manufacturing industry in Scotland. When I became a Member of this place there were 14 engineering workshops in my town of Johnstone, and under this Government there is none. My hon. Friend the Member for Renfrew, West and Inverclyde (Mr. Graham) comes from Linwood, and under this Government a factory at which 4,500 workers were willing to work was closed down overnight. In the face of this we are asked to forgo a debate on the Scottish economy, a debate that would have taken place during the day, and instead to continue with the Second Reading debate in which we were engaged. I suggest that in their shame the Government should show a little humility, withdraw the motion and allow us to proceed with the Second Reading debate.
  1.39 am
  Mr. Nicholas Fairbairn: The speech of the hon. Member for Paisley, South (Mr. Buchan) has given me two regrets. One is that I did not sleep longer, and the other is that the recess was so short.
  It is fairly important that Opposition Members wish to pretend that they have some claim to be interested in Scotland.
  Mr. Buchan: Scotland is not interested in the hon. and learned Gentleman.
  Mr. Fairbairn: If they wish to have a claim to be interested in Scotland, they should remember first that this debate was deliberately delayed by Opposition filibustering, and secondly that the speech to which we have just had the misfortune to listen had nothing whatever to do with an interest in Scotland or in investment in the Scottish Development Agency. Nor was any credit given to the fact that, under the present Government, the SDA has regenerated Glasgow. It was all political filibustering. I hope that the message goes out from the House tonight—of course, the press is closed—that the Conservative Government have vastly increased the funding of the SDA, the attraction of funds to the SDA and the effect of
  872
  the SDA. All that the Opposition are about is delaying and preventing a debate. They are not interested in the economic benefits that Scotland has had.
  Let the message go out: Scotland is the most prosperous part of the United Kingdom, thanks to this Government. Let it never be forgotten that that is so.
  1.41 am
  Dr. John Reid: Thank you, Madam Deputy Speaker, for allowing me to speak. I realise that it is very good of you to do so at this time of night. I shall be considerably briefer than some of the earlier speakers, and considerably less articulate and astute in my observations than my hon. Friend the Member for Paisley, South (Mr. Buchan). I would not attempt to teach him anything, but perhaps I could correct one fact that I have picked up from his speech. The low incidence of defenestration during the recent City crisis may not be related directly to the incidence of integrity on the Conservative Benches; it may merely be a product of the increase in double glazing over the past 10 years.
  I am not only less astute but more sympathetic to Conservative Members than my hon. Friend. There are Scottish Ministers who want at any cost to stop us debating the motion on the SDA. I am understanding, because their burdens are many and their numbers few. I say to my hon. Friend the Member for Carrick, Cumnock and Doon Valley (Mr. Foulkes) that it is no good telling them that they have just had three months' holiday; some of their colleagues have just been assigned 10 years' holiday.
  Let me make two brief serious points. First, there have been a number of Opposition speeches on the substantial motion we are discussing from the Opposition Front Bench, and one maiden speech from the Back Benches. But there have been no speakers from Lothian, Strathclyde, Fife or Lanarkshire, whose constituents are vitally dependent on the motion.
  Mr. Foulkes: Is my hon. Friend aware that there has not been a speaker from Ayrshire either? I know that, as someone who hails from Ayrshire, he will understand the point.
  Dr. Reid: I was not aware of that. I am sorry; there may be other areas that have been missed out. But that is only a further illustration of the inadequacy of the debate.
  Mr. O'Neill: My hon. Friend omitted to refer to the Central region. The Minister's intervention when he tried to wind up the debate cannot be called a speech. The problems that face the Central region that my hon. Friend the Member for Falkirk, East (Mrs. Ewing) and I wanted to draw to the attention of the House have not as yet been aired. We wanted also to draw the problems faced by Stirling to the attention of the House, but the Minister is reluctant to have those problems exposed at this stage.
  Dr. Reid: The electors of both Central region and Stirling will note with interest the fact that after three hours of debate it was their Member of Parliament who intervened in order to stop further discussion of the problems faced by Scotland and the SDA.
  Another group of people in my constituency will note with great interest the Government's attitude tonight. Within 12 days of this debate the giant Caterpillar plant at Uddingston is due to close. This Government proclaimed that they were prepared to back that plant

  873
  against the decision of a multinational company to close it. Although taxpayers' money had been ploughed into the plant, that multinational company was prepared to loot the pension fund, to abandon the work force and to snub the Government.
  The Government proclaimed what they were prepared to do from the rooftops, but we have heard nothing from them during the last three months. The Government said that they would fully support the efforts of the local community to keep the Caterpillar plant open, and yet, while the Government publicly proclaimed that they would use every ounce of economic muscle that they had to change the company's mind, privately they ensured that the Caterpillar company would be able to tender for a large Ministry of Defence contract. If 1,200 people at that plant are about to face years on the dole, they will be asking why the Government were unable to spend more than three hours tonight discussing the role that the Scottish Development Agency might play in saving their jobs.
  1.47 am
  Mrs. Margaret Ewing: I had anticipated that when we agreed to the motion that stands on the Order Paper the Second Reading debate would be completed. The fact is that 76 per cent. of the Scottish electorate voted for opposition parties, and those parties have been well represented in the House this evening. We are willing and able to stay here for as long as is necessary to complete the Second Reading of the Bill.
  If the Government believe that this is important legislation and that it should come before the House during prime time, why was it tagged on to other major legislation that affects the whole of the United Kingdom? If Scottish legislation is important, it should have been allocated prime time. The Government would not then have chickened out at this late stage and refused to ensure that the Bill had a Second Reading.
  It is strange that the hon. Member for Stirling (Mr. Forsyth) should tell us in advance of the official statement about the business of the House and that we can anticipate a debate on industrial policy next week. We have no guarantee of that until we hear in the business statement that such a debate will take place. Even if a debate on the Scottish economy and industrial policy were to take place next Thursday, that debate would now be limited to the Scottish Development Agency. The SDA is a welcome part of Scotland's industrial scene, and all hon. Members pay tribute to the work that the agency is doing. However, to limit the debate to the SDA would mean that we were avoiding an examination of other aspects of the Scottish economy and Scottish industrial policy.
  Perhaps the Government do not want to discuss these issues. But perhaps even more appalling was the fact that the hon. Member for Glasgow, Garscadden (Mr. Dewar), in the initial debate that was taking place through the usual channels, appeared to acquiesce in the decision to report progress — [HON. MEMBERS: "No."] The hon. Member for Garscadden, in discussions with myself and the hon. Member for Roxburgh and Berwickshire (Mr. Kirkwood), indicated that he was willing to accept the motion to report progress. Will you advise me and other hon. Members, Madam Deputy Speaker, whether it is a regular function that Second Reading debates can be
  874
  postponed on report progress motions? I am not an expert on the various technicalities of the House, but it seems unusual that a second reading debate should be interrupted in this way.
  Mr. Dewar rose——
  Mrs. Ewing: Finally, Madam Deputy Speaker——
  Hon. Members: Give way.
  Madam Deputy Speaker: Order. The hon. Lady is obviously not giving way.
  Mrs. Ewing rose——
  Mr. Foulkes: The hon. Lady knows that she is wrong.
  Madam Deputy Speaker: The hon. Lady must be heard.
  Mrs. Ewing: I am affording to the hon. Member for Garscadden——
  Mr. Foulkes: On a point of order, Madam Deputy Speaker. Is it not a convention of this House that when one hon. Member has made a direct allegation against another, who then seeks to intervene, that hon. Member gives way? If the hon. Lady had any honour she would honour that convention.
  Madam Deputy Speaker: Order. It is the convention of this House that an hon. Member gives way in such circumstances, but it is entirely up to that hon. Member. If the hon. Lady does not intend to do that, it is for the Chair to protect her.
  Mrs. Ewing: No doubt the hon. Member for Garscadden will have ample opportunity to voice his opinion, but I am perfectly willing, unlike others, to give way.
  Mr. Dewar: I wonder whether the Chair could give me some protection on this occasion? The hon. Lady made a specific allegation. I make no comment on the taste of reporting private conversations in that way, but I am entitled to protest when they are distorted, inaccurately, to the point where they bear no relation to the truth. I say, quite categorically, that I am not in agreement with the Government Whips to close this debate or to report progress. If the Government Whips are unwise enough to insist on that course I shall advise my hon. Friends to vote against it.
  Madam Deputy Speaker: The hon. Gentleman has now had an opportunity of stating his case.
  Mr. Foulkes: Withdraw.
  Mrs. Ewing: I shall continue with my earlier point. It was quite clear in earlier conversations what the situation was——
  Mr. Buchan: I hesitate to raise another point of order, but we have reached a point where I must. I heard part of this private conversation and the version given by my hon. Friend the Member for Glasgow, Garscadden (Mr. Dewar) is accurate. I ask the hon. Lady to withdraw the allegation.
  Madam Deputy Speaker: If the hon. Gentleman had been listening, I am sure that he would have heard me say that I am sure that the House is happy that the hon. Member for Garscadden has had an opportunity to clarify the position. He has clarified it and that will appear in the Official Report. It is up to the hon. Lady whether she withdraws; it is entirely her prerogative.
  Mrs. Ewing: The clear impression that was given to me was that that I have already stated. The hon. Member for Garscadden has made it clear how he interpreted matters, as in his right.
  I should like to make it clear that not only have we lost a debate on the general economic situation in Scotland next week, we also leave an uncertainty hanging over the future of the SDA. Many of the projects that have been anticipated by people who are looking for funding from the SDA and many people whose jobs are currently supported may find that week a very difficult one to live through. Scottish interests have been neglected by the Government and that is intolerable.
  1.55 am
  Mr. John McFall: My hon. Friend the Member for Glasgow, Garscadden (Mr. Dewar) said that he was surprised that two questions had not been answered by the Secretary of State this evening — who was in charge of economics in Scotland and who was in charge of the SDA budget. Is the debate to be curtailed without answers to those questions when the Secretary of State gave an assurance that he would answer them?
  The debate is essential to the Scottish economy because the SDA is the fulcrum of investment in Scotland. Many hon. Members need the SDA in their constituencies. My constituency has a population of over 80,000 and between 1985–86 and 1986–87 its budget was cut by 42 per cent. That is the kernal of tonight's argument. The lack of investment in areas with increasing unemployment and poverty means that the SDA has a role to play.
  The SDA figures show cuts in the programme over the last five years. My hon. Friend the Member for Garscadden was correct when he mentioned those figures at the beginning of the debate.
  Dumbarton needs the SDA to work with the private sector to tackle the industrial and economic development of the area. As the Secretary of State said, the SDA should be used as a tool of regional policy. He and his fellow Ministers should go ahead forthwith. The SDA should be credited for what has happened in my constituency, but it has acted with a distinct lack of resources.
  We say that the SDA should be given the resources to do the job that it should be doing. Environmental projects are taking place in my constituency, but there are no major economic initiatives. That is missing.
  According to the official figures Dumbarton has an employment rate of 21 per cent. Greenock 20·3 per cent. and Lanarkshire 19 per cent. Those figures show the crying need for economic initiative——
  Madam Deputy Speaker: Order. I hope that the hon. Gentleman will relate his remarks to the motion. We are discussing the motion to adjourn the debate, not the Second Reading. The hon. Gentleman must relate his remarks to the motion.
  Mr. McFall: My points emphasise the fact that we should not close the debate. We have waited since 10 pm. Each of us has been patient, as my hon. Friend the Member for Paisley, South (Mr. Buchan) said, so that we could put the case for our constituencies. Are we to be told at this hour, despite our patience and initiative, that we cannot put the case for our constituents and the Scottish economy when it is so fundamental? We want to air our views.
  Dr. Reid rose——
  Madam Deputy Speaker: Is this an intervention?
  Dr. Reid: Yes. I asked very quietly.
  Madam Deputy Speaker: I should like to hear.
  Dr. Reid: I just want to ask my hon. Friend the Member for Dumbarton (Mr. McFall) if he would care to repeat the point that he made at the beginning of his speech concerning the two definite promises from the Minister. I ask my hon. Friend to do so because the Minister was not listening at the time and I do not know whether he is listening now. My hon. Friend should remind the Minister that he promised to answer two specific points before the close of this discussion tonight. If my hon. Friend does so I am sure that the integrity of the Minister will ensure that, before we get to the close of the debate, he will answer the questions put by my hon. Friend the Member for Glasgow, Garscadden (Mr. Dewar) and which are of great importance regarding the SDA.
  Mr. McFall: I remind the Minister that those two important questions should be answered. They hightlight the fact that the Minister has something to answer. Without extending your patience any further, Madam Deputy Speaker, this is a crucial debate and it must continue. There must be a political commitment allied to public investment to regenerate the communities. We are speaking here on behalf of our constituents and the Government should have the decency to answer the case.
  2.1 am
  Dr. Norman A. Godman: I simply wish to make plain how much I deplore and regret this motion moved by the hon. Member for Stirling (Mr. Forsyth). I have been in the Chamber for some hours and I hoped to make a constituency speech. I had hoped to ask the Minister if he would give assistance to the identification of Inverclyde as prime location for inward investment and make it a priority area for Locate in Scotland. That opportunity has been denied to me by the motion.
  The Minister will be aware that, in the past, Locate in Scotland has not, perhaps for understandable reasons, encouraged much inward investment into Inverlyde. However, Inverclyde has been transformed because of the fine work performed by the decent, honourable public officials of the Inverclyde initiative.
  The Inverclyde initiative and its officials are working with an inadequate budget against darkening economic circumstances. The male unemployment rate in my constituency is almost 26 per cent. At this time there are rumours circulating in my constituency concerning a redundancy programme involving upwards of 1,000 men now employed in a local shipyard. One of the reasons why that yard is under threat is that the Government reneged on their promise to give it a Ministry of Defence order for three small vessels.
  I deplore the motion because I was denied the chance to admire the good work conducted by SDA officials under Donald Draffen. In recent days he displayed delightful initiative as he rescued, for the price of £1, the derelict 'Maid of the Loch'. I hasten to add that she is not a prostitute of the lower Clyde, but a Clyde steamer featured, as many of my hon. Friends will recall, in "Para Handy". I offered 50p towards the cost of that purchase. Mr. Draffen is hoping to obtain money from the SDA for

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  what I believe would be a dramatic and marvellous visitors' centre based on Custom House Quay in Greenock.
  There is another reason why the motion causes me deep dismay. I had hoped to obtain some sort of assurance from the Minister about the possibility of Inverclyde being declared an enterprise zone. He may or may not have read the report on enterprise zones produced by the Cambridge economic consultants, which states, inter alia, that the two most successful enterprise zones are in Scotland — in Dundee and on Clydebank. One of the reasons why they are successful is that they are based on publicly-owned land. I suspect that the Minister is not much concerned about those problems, but it is absolutely essential that if Inverclyde is made an enterprise zone, the land should remain in public ownership as per the recommendation in that report.
  What we have seen again tonight is the hatred of Ministers for critics of their policies, whether those critics are the honestly awkward critics in the Opposition or—God knows there are few of them—awkwardly honest critics in the Conservative party.
  The motion is to be deplored, especially by people living in constituencies such as mine with massively high unemployment and the real threat that that level of unemployment will not come down in the near future, but will increase further. The SDA has an important role to play in Inverclyde. I regret that I have not had the chance to outline in detail the superb work carried out by the officials of the Inverclyde initiative.
  2.6 am
  Mr. Archy Kirkwood: I do not believe that the impasse in which we find ourselves is unusual or unique. Such a situation could arise with monotonous and increasing regularity in the coming weeks and months.
  I oppose the motion, but it is symptomatic. I am addressing my remarks to the rump of the Conservative Back Benchers, who are sitting in on the debate wondering with an air of puzzlement what is going on. I say to them directly that in my view what is happening now is symptomatic of the fact that we do not have proper time to debate important Scottish issues in the House of Commons as it is presently constituted here at Westminster. The problem that we are now having reflects that. It will not go away until we have a proper focus for important Scottish debates, whether in Edinburgh or anywhere else. I have my own views about the need for a Scottish Parliament, where never in a month of Sundays would any Government in Scotland attempt to adopt a device to curtail a debate about the financing limits of the SDA of the sort that is being used now.
  Mr. Fairbairn: Will the hon. Gentleman give way?
  Mr. Kirkwood: I do not want to take any interventions, because I want to make a brief speech.
  I oppose the Government's motion because it sets a worrying precedent to start interrupting and adjourning Second Reading debates. Opposition parties have precious little weaponry available to them in their armoury in any case. We have become accustomed to the Government having increasing recourse to guillotines. I understand that there are occasions when Governments have to use
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  guillotines, but guillotining Second Reading debates is altogether different. It is new to me. [Interruption.] My experience may not be as great as the 150 years that the hon. Member for Dumfries (Sir H. Monro) seems to have been in the House, but I believe that guillotining Second Reading debates on such issues is a worrying precedent. I should like an assurance from whoever winds up the debate, if anybody does—none of the Ministers looks as if he is itching to do so—that there will be no more repetitions of motions to adjourn the debate on Second Reading being moved in this fashion because it would be a retrograde step.
  Mr. Fairbairn: I am sure that the House would be interested to discover on behalf of whom the hon Gentleman imagines he is speaking. The hon Gentleman talks about focusing issues. Can he tell us how, whichever party he belongs to and whatever name it will be given, he regards it as a focus?
  Mr. Kirkwood: I am speaking on behalf of my constituents.
  Mr. Home Robertson: Including me.
  Mr. Kirkwood: Yes, including the hon Member for East Lothian (Mr. Home Robertson), who keeps meeting me in the Lobby and asking whether I am looking after his interests. I find that a difficult thing to do for a Labour Member who is a gentleman farmer. However, that is a different point.
  The hon. and learned Member for Perth and Kinross (Mr. Fairbairn) is a sensible enough parliamentarian to realise—[Interruption.] That may be stretching a point. He may not agree, but he has to admit that there is a growing body of opinion in Scotland that feels the need to bring some of the issues back to Scotland in sensible time and with sensible procedures, not at 10 minutes past 2 in the morning. If we had a proper Scottish assembly we would be sensible enough to organise our affairs better than this and would not need to have debates at this ludicrous hour.
  I was interested in what the Minister said when he introduced the motion. I agree that, prima facie, the SDA financing limits are primarily a technical matter. The debate we had was entirely sensible. I was hoping to contribute to it before it was curtailed. I pay tribute to the hon Member for Glasgow, Garscadden (Mr. Dewar). He made an entirely pertinent speech. Nobody could say that there was padding in anything that he said. I have heard debates that have been restricted to an hour and a half under the statutory instrument secondary legislation procedure which have had a wider significance in terms of the amount of money and number of people involved. Therefore, I concede the Government's case to a certain extent and agree that it could have been a technical debate. I am not very experienced in the House, but I warn hon. Members from all parties that if we reach a situation in which the usual channels cannot accommodate problems such as this and come up with sensible answers to meet everybody's needs we shall never get all we want. If we are to go into the breach every time and make a point of principle out of every debate that deals with Scottish matters we shall all spend many fascinating hours in the House throughout the night. In fact, we may end up doing a disservice to our constituents and the people of Scotland.
  We minority parties have a difficulty in that we are not involved in the direct communication within the usual

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  channels. I do not wish to apportion blame, but, if it is true, as the hon. Member for Stirling (Mr. Forsyth) said, that as a result of what has happened tonight, we will lose a full-scale debate on Scottish industry and development next Thursday, that is a scandal. It is all very well for experienced parliamentarians such as the hon. Member for Garscadden to say that one can make one's points if one is clever enough and that one can get round the technical and narrow nature of the debate quite easily if one puts one's mind to it but that is not the point. The hon. Member for Moray (Mrs. Ewing), who was in the Chamber earlier, made a sensible contribution to the debate. She said that there are many aspects of Scottish industry such as the heavy industries and rural development that the occupant of the Chair would not allow within the remit of the debate or the rules of order.
  I make a plea not only to the Government Front Bench but to the whole House to stand back from this confrontation this evening. Lay persons in the street do not understand the arcane nature of what we are about or the subtleties of the usual channels and so on. We must be careful that, in the party-political knockabout, we do not do a disservice to our constituents and to the people of Scotland.
  2.15 am
  Mr. Henry McLeish: Like many of my hon. Friends, I regret that I am unable to talk about my constituency problems or the qualities that the SDA has brought to many activities in my area. I shall address myself to the closure motion, because that is important. As the hon. Member for Roxburgh and Berwickshire (Mr. Kirkwood) said, it shows a complete contempt for the Scottish people—although that is nothing new from the Government. They do not have any sympathy for Scottish culture or way of life, and this motion is another example of the utter contempt in which they hold not only the electorate but the Scottish people. It also does a great disservice to this House. I was elected a few months ago to represent my constituency interests. I note that a few hon. Members have decided to leave the Chamber. When will this Mother of Parliaments tell the Government to stop laughing, start listening and treat seriously the key issues that are facing Scotland?
  The Minister said earlier that he would answer specific points put forward by my hon. Friend the Member for Glasgow, Garscadden (Mr. Dewar). Despite the fact that the motion has been moved, we have a right to expect the Minister to honour commitments made on the Floor of the House. To help him do so, I remind him that the rate support grant in 1982–83—and we have been discussing a financial Bill with regard to the SDA — was £343 million. The estimated figure for Scotland for 1987–88 is £66 million. That is the enterprise culture about which the Minister spoke so eloquently. Basically, it means more despair, more hardship and longer unemployment queues. The Minister still fails to listen. He is preoccupied with the hon. and learned Member for Perth and Kinross (Mr. Fairbairn), who made such an eloquent contribution to the debate. In 1982–83, the SDA's gross budget was £147 million. Adjusted to 1986–87 prices, this year it is estimated to be £130 million. Scotland has 330,000 people who want some enterprise, but they are unlikely to get it from this Government.
  Will the Minister tonight reply to the points that have been raised, despite the closure motion put forward by the
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  Government, despite the disreputable tactics that they have adopted and despite the fact that Scotland will read in the national press tomorrow that, once again, the Conservatives who were humiliated in the polls still continue to treat the Scottish electorate with contempt beyond belief? I hope that in a few minutes the Minister will turn his mind to what is happening in this Chamber and address himself to these points.
  2.19 am
  Mr. Alex Salmond: I am very mud) against the motion to close the debate, because I believe that several issues have not been fully explored. Whatever arguments I may have had with the hon. Member for Glasgow, Garscadden (Mr. Dewar) this evening, I thought that he made an important point when he reminded the House of the report of the Scottish Select Committee in 1980 and the performance of the seven Conservative Members on that Committee. Of course, that was at a time when there were such things as Scottish Conservative Back-Bench Members. Five of them are no longer with us, but two of them are very much concerned with tonight's proceedings — or would be if the hon. Member for Eastwood (Mr. Stewart) had remained in the Chamber. The other surviving Member is the Minister of State. Those Conservative Members voted to take the Scottish Development Agency outwith the realm of inward investment and to close the overseas SDA offices. The closure motion is entirely inappropriate, because we have not had a chance to hear the Minister's answers to those points.
  There has been a debate about SDA finances in real terms. There should be no argument that, during the past few years, the total finances available to the Scottish Development Agency have declined in real terms. That has been against the background of savage cuts in total regional development aid and grants. In Scotland, regional development grants and other aid represent only 45 per cent. of the amount made available 10 years ago when the SDA was created. I should tell Labour Members that 40 per cent. of that cut came in the last two years of the Labour Government.
  We have not explored the direction of SDA funding. An important aspect of the SDA is the fact that funding has been pushed away from risk equity investment. The SDA was formed to fill a gap in risk equity funding in Scotland, and initially 25 per cent. of its funding went towards that. Now only 2 per cent. goes to risk equity funding, such has been the dogmatism with which the Conservative party has pushed the SDA away from fulfilling one of the essential roles that it was given.
  We have not considered the direction of inward investment. Conservative Members believe that economic development in Scotland can be created only by bringing companies into Scotland. They are keen on inward investment, but it cannot be a good argument that the centrepiece — indeed the only piece — of the economic strategy for Scotland should be bringing in mobile. footloose international investment. Of course, it is a good thing, but it should not be the only requirement of an economic policy.
  Many hon. Members have mentioned rural schemes. including PRIDE and DRAW. A marine engineering company in my constituency is in a position similar to the company mentioned by the hon. Member for Carrick. Cumnock and Doon Valley (Mr. Foulkes). It went into the

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  DRAW scheme, but the rug was pulled suddently from underneath it. After spending money on a survey to see whether it was eligible, the company discovered that the DRAW scheme had been abandoned and it was left with no aid. It is ridiculous to have a policy which can give almost any amount of aid to international investors, if they are prepared to go to the right areas and to wait for the money, while there are no aid schemes to which many indigenous Scottish companies can turn.
  I hope that when the Minister replies to the debate he will have the courage of his contradictions and explain the changes in his attitude to the SDA's role in international investment. The motion shows the embarrassment and uneasiness with which the Conservative party views the SDA. Although it welcomes SDA and Locate in Scotland successes in inward investment, it is uneasy because this is a public body, established by a Labour Government under pressure from the SNP—[HON. MEMBERS: "Oh, come on!"] I note some dissension among Labour Members, so I shall quote the same source from which the hon. Member for Garscadden read so eloquently. The Industry Department for Scotland and the Treasury conducted a review of the SDA in 1986. It went into the history of the SDA, and at page 17 the report states:
  "The formation of the Agency was in part a response to the growing impact of North Sea oil on Scotland and the political debate on the use of oil revenues, with strong nationalist pressure for them to be spent within Scotland. Indeed the Government's anouncement of the setting up of the SDA came first in a White Paper on North Sea oil in July 1974."
  This is the very document that the hon. Member for Garscadden quoted earlier. It certainly supports the case and the argument that we got the Scottish Development Agency because of the strength of the Scottish National party and its ability to influence the Labour Government of that time.
  Mr. Buchan: If the hon. Gentleman's analogy were true, that would be correct by analogy. However, it happens not to be correct. We created the Highlands and Islands Development Board because it was right to do so and the SDA was a development of the same conviction. I was involved in the planning process, so I know that. The SNP was hardly heard of at that period and was not in our minds at all.
  Mr. Salmond: I am grateful to the hon. Gentleman, but I think his theory of political decision-making in Scotland has been overtaken by biography and memoirs. I am particularly thinking of the latest volume from Lord Donoughue who was very much involved in the Labour Government of the time. If one reads his memoirs, they support the view that many of the concessions granted to Scotland in the period of the mid-1970s were made by the Labour Government in response to Nationalist pressure and the Nationalist threat to Labour seats.
  Mr. McAllion: The hon. Gentleman mentioned—as did several members of the Scottish National party—the ability of his party to influence the 1974–79 Government. My predecessor as the hon. Member for Dundee, East, Mr. Wilson, made that point on a number of occasions. Equally, he made the point that the Labour Government between 1974 and 1979 were the worst Government
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  Scotland has had in many a year. How does the SNP rationalise its ability to influence a Government who were the worst Government Scotland ever had?
  Mr. Salmond: We could argue that however bad were the cuts of 40 per cent. on industrial funding in the last two years after the withdrawal of regional employment premium by the Labour Government in 1976—the cuts might have been even greater if the Labour Government had not been responding to Nationalist pressure. If the hon. Gentleman wants me to concede that, however bad the Government of the mid-1970s were, they did not approach the sort of policies that are now imposed on Scotland, I am perfectly prepared to accept that point.
  Mr. Nigel Griffiths: We are intrigued by the hon. Gentleman's explanation and wonder whether he takes credit for having heralded the Conservative Government elected in 1979 by bringing down the then Labour Government.
  Mr. Salmond: I shall continue my theme of memoirs. If the hon. Gentleman consults the memoirs of the Prime Minister of the time, he makes it clear that on that occasion he was not frightened of the SNP's approach to the devolution legislation — he was frightened of the Labour Back Benches. If anyone wishes to dispute that, he should take it up with the former Labour leader.
  Mr. Brian Wilson: If the hon. Member wishes to deal in memoirs, will he refer to those of the great sage Mr. Sillars? He spelled out rather a different story: he pleaded with the 11 members of the SNP not to vote for the downfall of the Labour Government with the Tories, but in spite of that, although a couple of SNP members, Hamish Watt for one, wavered, at the end of the day all 11 voted with the Tories, an action for which they will never be forgiven by the people of Scotland.
  Mr. Deputy Speaker (Sir Paul Dean): Order. That may be very interesting, but it is a long way from the motion before us, which is whether the debate should be adjourned. Speeches must be addressed to that issue.
  Mr. Salmond: I am grateful for your intervention on my behalf, Mr. Deputy Speaker. Presumably when the former Prime Minister, James Callaghan, was talking in his memoirs of his fear of Labour anti-devolutionists the hon. Member for Cunninghame, North (Mr. Wilson) was one of the people he had in mind.
  Before I was so elegantly interrupted by several hon. Members, I was saying that the Conservative party has a problem with the SDA, which is a public body that was set up with public funds and shows that the public sector has a key role in the economy. When we move to an independent Scotland, I shall suggest that one of the first policy initiatives of an independent Government — whether SNP or Labour—should be to ensure a major expansion in the SDA's funding to the level that will allow it to tackle the economic crisis facing Scotland.
  2.31 am
  Mr. Alistair Darling: Until about an hour ago the House was discussing the economy of Scotland, and the Scottish Development Agency in particular. It is a matter of particular regret that a Minister has tried to stop that debate.
  I think that I speak for all Opposition Members when I say that we should have been happy to go through the

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  night, if necessary, to discuss the problems facing Scotland. Conservative Members obviously do not want to discuss the economic problems of Scotland; indeed, they do not even want to discuss the motion to close the debate. There is a simple answer for them: they can go home—just as they have been sent home in Scotland.
  I said that I think that I speak for all Opposition Members, but I am not sure about the tartan threesome, because they seem to be content to trade gratuitous insults and attack the Labour party instead of attacking the Government. It is no wonder that the SNP is Scotland's fourth party and is even behind the alliance.
  If the debate had been allowed to run its course, I, as the hon. Member representing the constituency in which the headquarters of the SDA is sited, would have developed the theme touched on by the hon. Member for Ross, Cromarty and Skye (Mr. Kennedy), who mentioned that the problems facing Scotland involved not only the firms that the SDA could or could not help, but the major structural problems in our country. He cited the failure of Guinness to move its headquarters to Scotland, despite the promises made to the Government and the Scottish people.
  My constituency would have benefited from the jobs created by the establishment of the Guinness headquarters in Scotland, and the rest of Edinburgh and Scotland would have benefited because Guinness would have been a magnet to draw many other firms away from the cosy insularity of the south-east of England. Until the lopsided nature of the British economy is addressed by the Government and the work of the SDA and other Government action is directed to taking some of the heat from the economy in the south-east, the structural problems that afflict Edinburgh and Scotland generally will endure. That problem was not addressed in the debate, but if it had been allowed to continue Labour Members would have addressed the issue.
  It is ironic that the closure motion was moved by the hon. Member for Stirling (Mr. Forsyth). The Minister of State made the valid point that public cash creates jobs, but the hon. Member for Stirling and many other Conservative Members do not agree with that philosophy. The hon. Member for Stirling sat and said nothing, but I think that there is one element of the SDA's recent conduct with which he does agree, and that is the disgraceful decision by the Scottish Development Agency to lend a large sum of public money for the building of a private hospital in Clydebank.
  The Royal Infirmary of Edinburgh is beginning to crumble because of lack of investment and has identifed £6·8 million worth of work that needs to be carried out to bring it up to modern standards. Despite that, it has been allocated only £400,000. The hospital is in my constituency, and had the debate been allowed to develop I would have made the point that if so much public money is available for a private hospital, surely it could be made available to build a valuable teaching hospital within the National Health Service.
  The Minister said that when the Scottish Development Agency was set up he saw it as being an instrument of change and, more importantly, a creator of the image of Scotland. I would have liked to make the point that the image of Scotland is not one of profiting from providing medicine but one of providing medicine on the basis of need. That aspect of the conduct of the Scottish
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  Development Agency ought to be debated, and I am sure that it would have been explored at great length if the debate had been allowed to run its course.
  It is necessary for the House to discuss the Scottish economy and not just the role of the Scottish Development Agency. Many points could have been developed in the debate. We also need to discuss the structural problems that face Scotland. The hon. Member for Stirling said that we are to be offered a debate next week.
  Mr. Bill Walker: The hon. Gentleman mentions the structural problems of Scotland. He also mentions the Guinness situation and will be aware of my interest in that problem. Does he agree that the Guinness decision to locate the Distillers whisky operations headquarters in Scotland will be helpful in the long term because if the Government should decide to order disinvestment after the full inquiry is completed, it will make it easier to do so.
  Mr. Darling rose——
  Mr. Deputy Speaker: Order. The debate is straying again. Hon. Members must restrict their remarks to the comparatively narrow issue of whether the debate should be continued or adjourned.
  Mr. Darling: With your advice in mind, Mr. Deputy Speaker, perhaps the hon. Member for Tayside, North (Mr. Walker) will vote against the motion so that the point he raises can be developed. Had the debate continued, I would have made the point that no matter how welcome the decision by United Distillers to locate its headquarters in Scotland, the real control of United Distillers lies with Guinness and the real control of Guinness, as with so much of the British economy, lies in London,
  It is precisely those points that I and my hon. Friends would have liked to develop had the hon. Member for Stirling not leapt to his feet, I suspect in some way to defend his colleague who would have had to answer some of the telling points put by my hon. Friends the Members for Glasgow, Garscadden (Mr. Dewar) and for Dunfermline, East (Mr. Brown). They are points that we and the people of Scotland want to discuss.
  Before the intervention by the hon. Member for Tayside, North I said that we are apparently to be offered a debate next Thursday on the Scottish economy. The Opposition would welcome that but for the fact that we know full well that Conservatives representing constituencies in the south-east of England who know little and, I suspect, sometimes care even less about the Scottish economy will be wheeled in to vote on this motion. just as they will be wheeled in next Thursday to speak from scripts carefully prepared by Scottish Ministers in order to prevent a full discussion by those hon. Members who represent the majority of Scottish seats.
  I have a great deal of sympathy with hon. Members who spoke about the amount of time being made available to discuss the Scottish economy and matters that greatly affect Scotland. We in the Labour party who represent Scottish constituencies are deeply concerned about all parts of the United Kingdom. However, we have a particular interest in what happens north of the border, and if we are not allowed a decent amount of time uninterrupted by closure motions, the Government will simply store up troubles that will have to be dealt with at some time in the future.
  I very much regret that an attempt has been made by the hon. Member for Stirling to stifle a debate which was

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  flowing very well. Issues subsist in Scotland today that will not go away. The Second Reading of the Bill does not address those issues and they will have to be discussed. I should have thought that Tory Members would have a great interest in discussing those points. If they will not discuss them, they may find that the next time that the electors have the chance to express their views on the matter, instead of 10 Members there will be no Conservative Members north of the border, and that would be a richly deserved fate.
  2.40 am
  Mr. Brian Wilson: It is important that the little huddle of Tory Members sitting at that far end of the Chamber waiting and wondering when they can leave realise that what is happening this morning is a manifestation and true dessert of the way in which the Government have behaved since 11 June. Since then the Government have behaved as if nothing happened on that day. It is time that English Conservative Members realised that something happened on 11 June.
  Mr. Tristan Garel-Jones (Vice Chamberlain of Her Majesty's Household): The Labour party lost the election.
  Mr. Wilson: The hon. Gentleman is absolutely correct. We lost the election. We live with and recognise that state of affairs and we cannot avoid it. However, in the same spirit, I suggest that it is incumbent upon Tory Members to make some concession to the other reality. If Scotland, which has a separate dimension to its political affairs and separate legislation in the House, if Scottish business, Scottish rights and Scottish interests are to be dealt with justly in this House, Tory Members must make some concession to that reality. I give notice to that little huddle of Tory Members at that far end of the Chamber, that if that does not happen, they had better start to bring their sleeping bags along and brush up on their bottle stocks because what has happened this morning will happen on a great many other mornings as well.
  Mr. Salmond: I agree that those Tory Members should make some concessions to Scotland's Labour majority. However, what will the hon. Member for Cunninghame, North (Mr. Wilson) do if they do not, apart from threaten them with more late nights?
  Mr. Wilson: Here I am trying to be conciliatory and that is the thanks I get.
  The reason for the motion to close the debate is not simply that Tory Members want to go to bed. Rather, what the Tories stand for in Scottish matters has been cruelly exposed. I have never heard such a mea culpa from the Tories for a long time. They seem to have been wrong about everything in the past 25 years in Scottish affairs. Even from the Government Front Bench tonight. we heard glowing tributes to the Highlands and Islands Development Board, to the SDA and to Locate in Scotland. I remember the debates when the Highlands and Islands Development Board was being set up. I remember reading of Michael Noble who represented Argyll, the constituency in which I grew up. In his later incarnation he was Lord Glenkinglas. He condemned as Marxist the concept of the Highlands and Islands Development Board. He used that word to condemn the concept put forward by the Labour Government in 1964 which the present
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  Government are now praising. He said that it was Marxism in action. When the SDA was set up, the Conservatives fought it tooth and nail, but now they tell us about the wonders of the SDA. We heard earlier that when the idea that Locate in Scotland was intended to promote a Scottish presence abroad was discussed, the very people who bask in its achievements now were those who sought to destroy it. Yet they do not learn the lesson that on occasions they are wrong and that there are ideas and concepts, such as partnership, public participation and response to need, that they could support instead of brushing aside with their usual arrogance. They should think about these matters instead of resorting to slander and categorising.
  I travel to the small towns in my constituency and I see a tremendous level of need. In a town such as Kilbirnie or an area such as Glengarnock there is industrial devastation on a scale that would make the stones weep. In the town centre of Kilbirnie there is utter urban dereliction on a small scale. I am delighted by the hope that the Scottish Development Agency will be acting fairly soon to contribute to the resuscitation of Kilbirnie, but the example can be multiplied by 100 in my constituency alone. We can see the potential of the SDA and yet in real terms its funding is being cut. Where is the logic in that?
  Mr. Deputy Speaker: The hon. Gentleman is straying into general debate. He must restrict his remarks to whether the Second Reading debate should be adjourned.
  Mr. Wilson: If the motion had not been moved by the Under-Secretary of State, we could have taken up the remarks of the Minister of State about the GEAR project in the east end of Glasgow. The success of that project is clear and yet it is cut off in its prime. Why should this be? The Government should have the courage — unfortunately, it was not present in 1961, 1975 or 1981 —to follow through to their logical conclusion the words that have been uttered this evening.
  If the debate had been allowed to continue, an important but peripheral issue — peripheral in some people's minds — could have been raised. I see the pictures in the annual report of the SDA, and women who appear in them are almost exclusively wives or waitresses. There has never been a woman member of the SDA or the Highlands and Islands Development Board. It is a non-party political issue that is surely worth considering, and it would certainly have been worthy of consideration this evening.
  We have seized this opportunity to talk about the SDA and the Scottish economy. We are here in large numbers because of the depressing condition of the economy, which has caused the majority of the people of Scotland to vote against the Conservative party and not merely for the Labour party or other parties. They have rejected the economic philosophy for which the Conservative party stands so overwhelmingly. We are bitterly angry when for the convenience of a handful of individuals the Government choose to take away the limited amount of time that is available for us as Scottish Members. This will not go unnoticed in Scotland.
  The word "filibuster" was used to defend the closure motion, but there has been no filibuster of any sort from the Opposition Benches. If filibusters are sought, let those who do so turn their attention to the Government Benches. For example, there was the lengthy speech of the

  887
  hon. Member for Dumfries (Sir H. Monro), which was admittedly an attack on Thatcherism. There were the confessions of a Dundee bus driver—the hon. Member for Tayside, North (Mr. Walker) —with excursions to Scone airport and other diversions. I listened to the interventions—I shall restrain myself on this occasion— of the hon. and learned Member for Perth and Kinross (Mr. Fairbairn). The filibusters came from Conservative Members. We have heard half of the Scottish membership of the Conservative parliamentary party in the form of grunts or speeches. By the same token, there would still be a very long way to go before the political opinions of Scotland were fully represented in this debate. There is no filibuster; there is deep concern about the economic plight of Scotland, and in each and every individual constituency represented here tonight. By running away from the argument—by shutting their ears to the debate, and to the strength of feeling on the Opposition Benches —Conservative Members compound the felony, and increase the feeling of betrayal and rejection that exists in Scotland.
  2.50 am
  Mr. Foulkes: I think that I should make it clear— indeed, all Opposition Members want to make it clear— that we should much prefer to be speaking in the substantive debate rather to this procedural motion. However, we have heard some brilliant and eloquent speeches from Members such as my hon. Friend the Member for Paisley, South (Mr. Buchan), who made a model speech. It was perfectly in order throughout, eloquent and with some brilliant rhetoric. It was also totally grammatical — unlike those of other hon. Members, as my hon. Friend pointed out earlier when I strayed from my normal grammar.
  Mr. Buchan: I agree with every word that my hon. Friend has said, but I am not sure whether he agrees with it.
  Mr. Foulkes: At 2.51 am, neither am I.
  Earlier, when I saw the Parliamentary Under-Secretary, the hon. Member for Stirling (Mr. Forsyth), leap to the Dispatch Box to move this procedural motion, I recalled the words of the former right hon. Member for Cambridgeshire, Mr. Francis Pym, when he warned of the tyranny of the large majority. That is the attitude that we are seeing tonight, and have seen on other occasions: the jackbooted attitude that they will force an issue through, that it does not matter if it has not been properly debated, of if great sections of the community in Scotland have not had the chance to he represented, or if people who have been active in the sphere of concern that the SDA represents have not had a chance to speak. That is why a strong feeling of spontaneous revulsion, annoyance, frustration and concern has been expressed by Opposition Members tonight. There will be more of it, tonight and on future occasions, if that kind of tyrannical approach is used again by the Government.
  I want to stick to the motion. We wonder why it has been put forward; we look for the motive behind it. With the slight discipline that I acquired at university all those years ago. I try to detect and divine the motivation and the determinant for the action, and to argue against it.
  We have heard a number of arguments tonight as to why the House should not support the motion. I should like to mention about half a dozen, but there will be plenty
  888
  of time left for my hon. Friend the Member for Clydebank and Milngavie (Mr. Worthington). I must not forget Milngavie: I like to give a litte teaser to the Hansard reporters, and Milngavie is a good one.
  The first reason is the right of minority parties. As the vast majority party in Scotland, with 50 out of 72 representatives, we have said that we respect that right. If we have a proper debate, the full time that ought to be allocated for Second Reading debate allows the minority parties to have their say. I did not like it when, earlier in the debate, the hon. Member for Moray (Mrs. Ewing) was so ungracious—I cannot say "ungallant", because it is a sexist word — in not conceding that she had made a mistake and had misrepresented my hon. Friend the Member for Garscadden. It is understandable that such a mistake should have been made, particularly after a busy and no doubt enjoyable day and evening.
  Mr. Salmond: If the hon. Gentleman had been listening more closely, he would have realised that my hon. Friend the Member for Moray (Mrs. Ewing) gave way to the hon. Member for Glasgow, Garscadden (Mr. Dewar) when he raised his point of order.
  Mr. Foulkes: The hon. Lady was forced to give way, but even when Madam Deputy Speaker said that the normal courtesy was to withdraw the hon. Member for Moray still refused to do so.
  The Scottish National party is bereft of ideas and initiatives. It is resorting to smears and slogans against the Labour party, which represents the majority of the people in Scotland. However, we shall not resort to smears and slogans.
  Mr. Salmond: I do not know what the hon. Gentleman is complaining about. I have not once this evening uttered the words "the feeble fifty."
  Mr. Foulkes: No, but there were enough memoirs to last us a lifetime.
  Whatever slogans the minority parties may utter and however trivial they may be, we shall continue to accept that they have the right to participate in these debates and to argue, on a procedural motion, that time ought to be given to the minority parties to argue their case.
  Furthermore, it is usual for the Second Reading of Bills to start at 3.30 in the afternoon and to continue until 10 o'clock. That means that six and a half hours are provided for such debates. However, well before half of that time had been reached tonight the hon. Member for Galloway and Upper Nithsdale (Mr. Lang), not realising the procedure, the protocol and the conventions of the House, tried to move the closure of the debate. However, it was pointed out to him that it was not right for him to do so.
  I hope that the House will not agree to the illegitimate curtailment of the Second Reading of this Bill. It is not automatic for such motions to be agreed to. Hon. Members will have to decide which way to vote when we reach that point.
  The hon. Member for Roxburgh and Berwickshire (Mr. Kirkwood) referred to the need for a Scottish assembly. The need for this motion would never have arisen if the Government had not repealed the Scotland Act 1978. It was not incumbent on the Government to repeal it. They did not have to repeal that Act. The assembly could have been set up and it could now be meeting in Edinburgh. We certainly would work more sensible hours and we would

  889
  have more time to discuss matters such as the SDA. We could discuss the workings, plans and development of it and we would be able to argue on behalf of our constituencies, including Carrick, Cumnock and Doon Valley. That is one reason for the frustrations that we have experienced tonight.
  The fourth issue that I should like to raise relates to areas not having their views expressed, and it is another reason for voting against the motion. I should explain this point to you, Mr Deputy Speaker, as you represent an English constituency. My hon Friend the Member for Western Isles (Mr. Macdonald) represents a distinct area of Scotland that experiences many different problems. He might want to talk about the integrated development programme that the EEC is no longer continuing or about other matters concerning the Western Isles. The hon Member for Orkney and Shetland (Mr. Wallace) represents an area with its own particular problems, but we have not heard anything about that region. I do not think we heard in the substantive debate from any representative from the Borders. That is a huge regional area of Scotland, yet we did not hear from one of its representatives. Nor did we hear from any representative of the huge Grampian region. We heard from two hon Members from the rural Tayside area but from nobody from Dundee, which is a vital part of Scotland. As my hon Friend the Member for Clackmannan (Mr. O'Neill) pointed out in an intervention, no one from the Central region participated in the substantive debate. Vast areas of Strathclyde, including Ayrshire and particularly Carrick, Cumnock and Doon Valley, did not have an opportunity to have their views heard.
  Ironically the region that was given a lot of time for its Members of Parliament to speak was Dumfries and Galloway. Neither Member made a very good fist of speaking. One was hampered by the fact that he is a Government Minister, and the other was hampered. If the Minister did not represent Galloway and Upper Nithsdale, he would have been able to point out that Sanquitar, which is part of his constituency, shares with Cumnock the highest level of unemployment in Scotland. If I had been able to speak on the substantive motion, I could have argued the case for Sanquitar, and I am sure that the Minister would have appreciated that.
  My fifth point was made by one of my colleagues earlier and I should like to underline it. My hon Friend the Member for Glasgow, Garscadden (Mr. Dewar) made one of the best Front Bench speeches that I have heard since the recess. If the Minister does not have an opportunity to reply to the debate, all of us will have an inkling of a feeling that perhaps he wants to dodge the questions that have been raised, particularly by my hon Friend the Member for Garscadden.
  My sixth point concerns the hon. Member for Ross, Cromarty and Skye (Mr. Kennedy), who talked about the EC structural fund. I understand that soon the report will be considered by the Council of Ministers. Because 80 per cent. of the regional fund will be concentrated on Spain, Portugal, Greece, Italy and Ireland, the remaining small proportion will have to be divided between the rest of the Community. That means that funds for the United Kingdom, particularly Scotland, will be cut and fewer areas will be eligible for regional aid. That is serious.
  Mr. Deputy Speaker: Order. The hon. Gentleman is straying wide of the motion.
  Mr. Foulkes: I did not raise the issue. It was raised by the hon. Member for Ross, Cromarty and Skye. No other hon. Member has had the opportunity to pursue the point and the Minister will not be able to reply. That is important. The debate is being ended prematurely.
  My seventh point is that the Minister wanted the debate to finish early because the Conservatives are tired after the recess. I have been fed up watching Scottish television seeing again and again the Minister responsible for education and social work—still the young, prematurely balding person — going on and on scratching around Scotland purporting to represent the people of Scotland when we know that he does not. Ministers might be tired because of their strutting around but my hon. Friend the Member for Falkirk, East (Mr. Ewing) wisely boycotted the opening of the hospital to which the Minister for Health was invited. Ministers are obviously tired and do not want to spend time in Parliament discussing such issues. If on day one Ministers feel a bit peely wally I emphasise what my colleagues have said—"You have seen nothing yet." Standing Committees are still to come. All it needs is one staunch Tory to go and the whole edifice will crumble. Then we have a Select Committee on Scottish Affairs — or have we? That Committee has a Labour majority, but will English Members be appointed? If the Government think that by truncating this debate they can save trouble in the future, they have another think coming. The only way that the Government can achieve a majority on the Select Committee is to have a Committee of three and press-gang two unwilling Tories to sit on it. That is the ridiculous position that they are in. Then they must consider the Scottish Grand Committee and Scottish Question Time. That will keep Ministers on their toes. Finally — [HON. MEMBERS: "Encore."] Hon. Members hesitated a little before that cry for more came along so this will be my final point. I thought that one reason why the hon. Member for Stirling proposed the motion was that he may be worried about the people here, the catering staff, the Hansard staff and the people working all the equipment. Then I thought again, this motion has been proposed by the Conservatives and they could not care less about the ordinary people who are working to support us. My one regret is that we are going on in these unsocial hours ——
  Mr. Home Robertson: My hon. Friend is talking about the other people who work in this House, but will he spare a moment for the tired and huddled masses down below the Gangway? They should be contemplating the ineptitude of their Front Bench that means that they will have to sit and listen to a lot of the same arguments all over again when we get back to the substantive debate. What on earth are the Government achieving?
  Mr. Foulkes: My hon. Friend has put his finger on it. The Government have clearly bungled and there is no doubt that they have made a mistake. The Chief Whip has not made a brilliant debut. The whole thing is crumbling about him, but as I have said, this is just the beginning.
  The Parliamentary Secretary to the Treasury (Mr. David Waddington)rose in his place and claimed to move, That the Question be now put.
  Question put, That the Question be now put:—
  The House divided: Ayes 114, Noes 43.

  Division No. 31]

  [3.11 am

  AYES

  Alison, Rt Hon Michael

  Hughes, Robert G. (Harrow W)

  Amess, David

  Hunt, David (Wirral W)

  Amos, Alan

  Irvine, Michael

  Arbuthnot, James

  Jack, Michael

  Arnold, Jacques (Gravesham)

  Janman, Timothy

  Ashby, David

  Jones, Gwilym (Cardiff N)

  Atkinson, David

  Jones, Robert B (Herts W)

  Baker, Nicholas (Dorset N)

  Kellett-Bowman, Mrs Elaine

  Baldry, Tony

  King, Roger (B'ham N'thfield)

  Bennett, Nicholas (Pembroke)

  Kirkhope, Timothy

  Boscawen, Hon Robert

  Knapman, Roger

  Boswell, Tim

  Knowles, Michael

  Bowden, Gerald (Dulwich)

  Lang, Ian

  Bowis, John

  Latham, Michael

  Brazier, Julian

  Lennox-Boyd, Hon Mark

  Bright, Graham

  Lilley, Peter

  Brooke, Hon Peter

  Lloyd, Peter (Fareham)

  Bruce, Ian (Dorset South)

  Lord, Michael

  Burns, Simon

  Malins, Humfrey

  Burt, Alistair

  Mans, Keith

  Butterfill, John

  Marland, Paul

  Carlisle, John, (Luton N)

  Martin, David (Portsmouth S)

  Carlisle, Kenneth (Lincoln)

  Mitchell, Andrew (Gedling)

  Carrington, Matthew

  Monro, Sir Hector

  Carttiss, Michael

  Morris, M (N'hampton S)

  Coombs, Anthony (Wyre F'rest)

  Moss, Malcolm

  Coombs, Simon (Swindon)

  Neubert, Michael

  Cope, John

  Patnick, Irvine

  Cran, James

  Portillo, Michael

  Davies, Q. (Stamf'd & Spald'g)

  Ryder, Richard

  Davis, David (Boothlerry)

  Shaw, David (Dover)

  Day, Stephen

  Stanbrook, Ivor

  Devlin, Tim

  Stern, Michael

  Dorrell, Stephen

  Stevens, Lewis

  Douglas-Hamilton, Lord James

  Stewart, Allan (Eastwood)

  Dover, Den

  Summerson, Hugo

  Durant, Tony

  Taylor, Ian (Esher)

  Evans, David (Welwyn Hatf'd)

  Thompson, D. (Calder Valley)

  Fairbairn, Nicholas

  Thompson, Patrick (Norwich N)

  Fallon, Michael

  Thorne, Neil

  Favell, Tony

  Thurnham, Peter

  Field, Barry (Isle of Wight)

  Tredinnick, David

  Forsyth, Michael (Stirling)

  Trotter, Neville

  Fox, Sir Marcus

  Waddington, Rt Hon David

  French, Douglas

  Walker, Bill (T'side North)

  Garel-Jones, Tristan

  Waller, Gary

  Gill, Christopher

  Warren, Kenneth

  Gow, Ian

  Wheeler, John

  Greenway, John (Rydale)

  Widdecombe, Miss Ann

  Gregory, Conal

  Wilshire, David

  Griffiths, Peter (Portsmouth N)

  Wolfson, Mark

  Ground, Patrick

  Wood, Timothy

  Hamilton, Hon A. (Epsom)

  Young, Sir George (Acton)

  Hanley, Jeremy

  Hargreaves, A. (B'ham H'll Gr')

  Tellers for the Ayes:

  Hayward, Robert

  Mr. David Lightbown and

  Hicks, Mrs Maureen (Wolv' NE)

  Mr. David Maclean.

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

  NOES

  Adams, Allen (Paisley N)

  Griffiths, Nigel (Edinburgh S)

  Brown, Gordon (D'mline E)

  Hogg, N. (C'nauld & Kilsyth)

  Buchan, Norman

  Home Robertson, John

  Canavan, Dennis

  Hood, James

  Clarke. Tom (Monklands W)

  Ingram, Adam

  Cook, Robin (Livingston)

  Kennedy, Charles

  Darling, Alastair

  Kirkwood, Archy

  Dewar, Donald

  McAllion, John

  Doran, Frank

  McAvoy, Tom

  Douglas, Dick

  Macdonald, Calum

  Dunnachie, James

  McFall, John

  Ewing, Mrs Margaret (Moray)

  McKelvey, William

  Foulkes, George

  McLeish, Henry

  Galbraith, Samuel

  Martin, Michael (Springburn)

  Galloway, George

  Maxton, John

  Godman, Dr Norman A.

  Millan, Rt Hon Bruce

  Graham, Thomas

  Moonie, Dr Lewis

  892

  Nellist, Dave

  Worthington, Anthony

  O'Neill, Martin

  Wray, James

  Reid, John

  Robertson, George

  Tellers for the Noes:

  Salmond, Alex

  Mr. Ernie Ross and

  Welsh, Andrew (Angus E)

  Mr. David Marshall.

  Wilson, Brian

  Question accordingly agreed to
  Question put accordingly:—
  The House divided: Ayes 112, Noes 42.

  Division No. 32]

  [3 23 am

  AYES

  Alison, Rt Hon Michael

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

  Amess, David

  Hughes, Robert G. (Harrow W)

  Amos, Alan

  Hunt, David (Wirral W)

  Arbuthnot, James

  Irvine, Michael

  Arnold, Jacques (Gravesham)

  Jack, Michael

  Ashby, David

  Janman, Timothy

  Atkinson, David

  Jones, Gwilym (Cardiff N)

  Baker, Nicholas (Dorset N)

  Jones, Robert B (Herts W)

  Baldry, Tony

  Kellett-Bowman, Mrs Elaine

  Bennett, Nicholas (Pembroke)

  King, Roger (B'ham N'thfield)

  Boscawen, Hon Robert

  Kirkhope, Timothy

  Boswell, Tim

  Knapman, Roger

  Bottomley, Peter

  Knowles, Michael

  Bowden, Gerald (Dulwich)

  Lang, Ian

  Bowis, John

  Latham, Michael

  Brazier, Julian

  Lennox-Boyd, Hon Mark

  Bright, Graham

  Lilley, Peter

  Brooke, Hon Peter

  Lloyd, Peter (Fareham)

  Bruce, Ian (Dorset South)

  Lord, Michael

  Burns, Simon

  Malins, Humfrey

  Burt, Alistair

  Mans, Keith

  Butterfill, John

  Marland, Paul

  Carlisle, John, (Luton N)

  Martin, David (Portsmouth S)

  Carlisle, Kenneth (Lincoln)

  Mitchell, Andrew (Gedling)

  Carrington, Matthew

  Monro, Sir Hector

  Carttiss, Michael

  Morris, M (N'hampton S)

  Coombs, Anthony (Wyre F'rest)

  Moss, Malcolm

  Coombs, Simon (Swindon)

  Neubert, Michael

  Cope, John

  Patnick, Irvine

  Cran, James

  Portillo, Michael

  Davies, Q. (Stamf'd & Spald'g)

  Ryder, Richard

  Davis, David (Boothferry)

  Shaw, David (Dover)

  Day, Stephen

  Stanbrook, Ivor

  Devlin, Tim

  Stern, Michael

  Dorrell, Stephen

  Stevens, Lewis

  Douglas-Hamilton, Lord James

  Stewart, Allan (Eastwood)

  Dover, Den

  Summerson, Hugo

  Durant, Tony

  Taylor, Ian (Esher)

  Evans, David (Welwyn Hatf'd)

  Thompson, D. (Calder Valley)

  Fairbairn, Nicholas

  Thompson, Patrick (Norwich N)

  Fallon, Michael

  Thorne, Neil

  Favell, Tony

  Thurnham, Peter

  Field, Barry (Isle of Wight)

  Tredinnick, David

  Forsyth, Michael (Stirling)

  Trotter, Neville

  Fox, Sir Marcus

  Waddington, Rt Hon David

  French, Douglas

  Walker, Bill (T'side North)

  Garel-Jones, Tristan

  Waller, Gary

  Gill, Christopher

  Warren, Kenneth

  Gow, Ian

  Wheeler, John

  Greenway, John (Rydale)

  Widdecombe, Miss Ann

  Gregory, Conal

  Wilshire, David

  Griffiths, Peter (Portsmouth N)

  Wolfson, Mark

  Ground, Patrick

  Wood, Timothy

  Hamilton, Hon A. (Epsom)

  Young, Sir George (Acton)

  Hanley, Jeremy

  Hargreaves, A. (B'ham H'll Gr')

  Tellers for the Ayes:

  Hayward, Robert

  Mr. David Lightbown and

  Hicks, Mrs Maureen (Wolv' NE)

  Mr. David Maclean.

  NOES

  Adams, Allen (Paisley N)

  Cook, Robin (Livingston)

  Brown, Gordon (D'mline E)

  Darling, Alastair

  Buchan, Norman

  Dewar, Donald

  Canavan, Dennis

  Doran, Frank

  Clarke, Tom (Monklands W)

  Douglas, Dick

  893

  Ewing, Mrs Margaret (Moray)

  McLeish, Henry

  Foulkes, George

  Martin, Michael (Springburn)

  Galbraith, Samuel

  Maxton, John

  Galloway, George

  Millan, Rt Hon Bruce

  Godman, Dr Norman A.

  Moonie, Dr Lewis

  Graham, Thomas

  Nellist, Dave

  Griffiths, Nigel (Edinburgh S)

  O'Neill, Martin

  Hogg, N. (C'nauld & Kilsyth)

  Reid, John

  Home Robertson, John

  Robertson, George

  Hood, James

  Salmond, Alex

  Ingram, Adam

  Welsh, Andrew (Angus E)

  Kennedy, Charles

  Wilson, Brian

  Kirkwood, Archy

  Worthington, Anthony

  McAllion, John

  Wray, James

  McAvoy, Tom

  Macdonald, Calum

  Tellers for the Noes:

  McFall, John

  Mr. Ernie Ross and Mr. David Marshall.

  McKelvey, William

  Question accordingly agreed to.
  Debate to be resumed this day.

  PETITION

    Poll Tax
    3.31 am
    Mr. Dick Douglas: I have much pleasure in presenting to the House a petition relating to the poll tax legislation. It comes from the provost and councillors of Dunfermline district council, City chambers, Dunfermline, and it is appropriate that this will be the first of many petitions against this especially odious tax which will be levied on the people of Scotland.
    The petition speaks of the Government's policy to impose a poll tax—community charge—on the people of Scotland as being unjust and unfair. It will impose a burden on those least able to pay and, additionally, cause a considerable increase in local expenditure to collect the tax and dislocation of local administration. The petitioners pray that this honourable House shall take immediate steps to repeal the legislation which introduces this tax, remove the burden of unfair taxation on the people of Scotland which the people of Scotland firmly rejected in the June 1987 election and replace it with a more progressive system of taxation.
    As a resident of Dunfermline, I have great pleasure in presenting this petition. Dunfermline was the ancient capital of Scotland and it is symbolic that interred in the abbey of Dunfermline are the bones of the Bruce, representing the independence and sincerity of the Scots in fighting against oppression.
    I trust that the House will note that my petition is the first of many that will be presented by my right hon. and hon. Friends to show the Government clearly that they have no political mandate in Scotland for this unjust tax.
    To lie upon the Table.

  Disabled Persons (Clothing)
  Motion made, and Question proposed, That this House do now adjourn.—[Mr. Durant.]
  3.35 am
  Sir Marcus Fox: My first thought on rising at 3.35 am is that I hope that I am not setting a precedent for Adjournment debates for the rest of this Session. If I am, this will be the last one that I apply for.
  The subject of the debate has caused me considerable worry and I wish to draw attention to serious problems in our provision for the disabled. I am interested in about 100,000 of the most seriously disabled people in the United Kingdom. That number works out at an average of about 125 per constituency, though I believe that there are more such people in inner cities than in other areas.
  Much has been done to help the disabled and I do not want to appear critical of the many good provisions in housing, mobility, transport, the provision of ramps to make it easier to get into public buildings, and so on. However, the debate is about the neglected issue of special clothing.
  The people to whom I am referring cannot enjoy shopping as most of us do—if "enjoy" is the right word from a husband's point of view. They cannot go into multiple or chain stores in high streets and buy articles of clothing. Their garments have to be made specially. Businesses will not set up to provide such items, because most are one-off garments and there is no profit in them.
  Our friends who are disadvantaged are no different from us in many ways. They have the same self-respect, and I think that dignity means more to them than to those of us who are fortunate. Many of them do not venture outside their homes because they do not have the right garments to wear. Their pride makes them housebound, and that is a reflection on our welfare state. I hope that the Minister will at least give me some hope that the importance of the matter has not escaped him.
  Let me give one or two examples from my constituency. John has a dwarfing disease and is 54 in. round the waist, with an inside leg measurement of 12 in. He buys trousers and cuts the legs off above the knee. Suits are impossible to get and all other garments are much too long in the arm. His head is too big to go through T shirts, and polo, crew-neck or even round-neck jumpers.
  Evelyn has an 86 in. bust and is 101 in. round the hips. She had only a nightdress when she was first met by the people who run this workshop in Shipley.
  My third example is Samantha. She has spina bifida which has left her with a hump on her back just below the waist and a twisted spine. She is in a wheelchair and has to sit with her feet straight out in front of her. If she buys a jacket that fits her bust, it will not go over the bump and rides up. If it is big enough to go over the bump, it is too big everywhere else. Trousers were a dream for her. Her mother could not buy any that came anywhere near her waist at the back and masses of fabric collected in her lap. When the workshop made some trousers for Samantha, her mother burst into tears. One mother with curvature of the spine was not going to her daughter's wedding because she could not buy an outfit that hung correctly.
  I shall now talk about warmth and give two examples. Andrew is 11 years old, has spina bifida and is mentally disabled. He lies flat all day and moves a hand to play with a rattle. He is blue with cold. An all-in-one suit was made
  896
  for him in a new thermal fabric and for the first time in his life he was pink like everyone else. Lastly, John's parents had to get up every two hours during the night to rub his arms and legs to keep the circulation going. A pair of pyjamas in a special fabric means that they can now sleep through the night.
  Those examples convey just what a tragedy it can be for families who do not have access to the facilities that this workshop provides. In my constituency there is a dedicated lady called Nellie Thornton who decided to do something about this. She is a former dressmaking teacher and while on a community study course, she worked in a hospital with patients who had had strokes. She found that great emphasis was placed on making them independent and allowing them in the home to do whatever could be done. However, no one paid any attention to the special clothing that they needed. In 1981 she started this workshop, Fashion for the Disabled, in Shipley. With urban aid money and the help of the Manpower Services Commission, much progress has been made. We must not forget the sponsorship provided by the Bradford and Ilkley college.
  I emphasise that two services are provided at the Fashion for the Disabled centre. One is training, where dressmaking courses are held for the disabled. Weekly courses are available for young spina bifida students, 16 to 19-year-olds from special schools, older disabled people and even young blind people. They learn how to measure, to fit and to make patterns, and to design and make garments. Within a week all of these people, whether or not they have sewn before, can make a garment to fit themselves. The joy that that brings to them because it is an achievement has to be seen to be believed.
  Training is also provided for staff from other areas to set up their own centres. Regular courses are now held in Perth, Edinburgh, Kent and Surrey, and this year Belfast and, believe it or not, Athens, are to be added to the list. We were fortunate to have the Princess of Wales visit the centre in the early part of the year. She was deeply impressed by the work carried on there and by the devotion of the staff to the disabled. The Princess afterwards pointed that out in a very kind letter.
  In the field of training there are no financial problems. Finance comes from the base budget of Bradford and Ilkley college and will continue to do so.
  I come now to the second type of service, which is for the disabled who cannot help themselves. It is a workshop where individual garments are made to order for the sort of people that I described earlier. It is quite a task to fit such people and often means visits to them in their homes. If a fair charge reflecting the cost of the garment had to be made, these people would not be able to afford it. Hon. Members can imagine how time-consuming and expensive it is to make a garment to fit some of the people that I have described. Therefore, a subsidy of some sort is inevitable and the costs, according to figures that I have been given, vary from about three to eight times the price in a multiple store. That is easy to understand, given the wear and tear to which the garments are subjected and the extra work that is involved in making the garments.
  It is not simply a question of covering these people's bodies. There is an immense social benefit for those people. It can take up to two hours for some of these disabled people to get dressed. Imagine the effort involved in that. If we consider the matter, we realise that people do not go out if they feel that what they are wearing is not

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  socially acceptable. They become housebound and their partners—when we consider married couples—get tired of going out alone and marriages have broken up as a result.
  Imagine the change in our life styles if we had only clothing that was too big, which did not fit, with necklines that gaped, collars that poked or waistlines nowhere near the waist. Imagine all those clothes wearing out rapidly because we had to wear appliances and, because of our size, no ordinary clothes would fit.
  I submit that we only realise what independence means when we lose it. Too many of those people have lost that independence. I hope that the Minister accepts that there is a need for this kind of service. The proof is that, following the experiment in Shipley, there are now 22 workshops around the country that are all in the same boat. In other words, they have no permanent funding. No one seems to want to pick up the funding of a scheme that is guaranteed to make a loss. This is a national problem. If we ask anyone in hospital, social workers or anyone involved in community work, I am sure that they will confirm the importance of the matter.
  To give some idea of cost, the workshop in Shipley which employs six staff would need a subsidy of about £25,000–£35,000 to break even. I believe that that is a good investment for the improvement in morale of the disabled. I wonder how many fewer hours of medical attention are required because these people feel so much better with new clothes.
  I hope that everyone now understands the importance of this subject. When I considered the provision of funds, I thought that I should first address my remarks to the Department of Health and Social Security. I understand that it is possible, through legislation, for local health authorities to provide some assistance in that direction. I have no doubt that local authorities could assist and the Social Services departments also have a responsibility. Perhaps the Minister can do something to bang a few heads together to ensure that this provision is not allowed to fade away. We need only think about the number of road accidents that occur and the ill-health that befalls people who do not believe that they will ever need this service to realise the extent of the problem. However, who knows what the future holds?
  I submit that there is a basic human need to provide people with the dignity that comes with the right clothes and garments. I hope that the Minister will be able to give me some encouragement in this matter.
  3.49 am
  The Parliamentary Under-Secretary of State for Health and Social Security (Mr. Michael Portillo): I thank my hon. Friend the Member for Shipley (Sir M. Fox) most warmly for raising this subject tonight and for giving us the opportunity of this short debate. I congratulate him on speaking so interestingly, movingly and penetratingly. I pay tribute to him for his clear concern about the future of an organisation in his constituency that is involved in such excellent and useful work. I re-emphasise one of the points that he made, for I understand that when Her Royal Highness the Princess of Wales visited Fashion Services for the Disabled in March she was most impressed with
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  what she saw. My hon. Friend's concern is typical of the assiduous way in which he cares for his constituency and all that goes on within it.
  I am delighted to respond to the issues that my hon. Friend has raised, and, like him, I shall take my remarks a little wider than merely the subject of Fashion Services for the Disabled, although I shall deal with that first. I shall echo many of the things that my hon. Friend has said.
  Dressing and undressing oneself is an important part of our everyday lives and something that most of us take very much for granted. Yet this operation, which is so simple to most of us, can be extremely difficult for some disabled people. It is essential that wherever possible disabled people should be able to dress and undress themselves to maintain their personal independence and dignity.
  There are many reasons why disabled people might have difficulties and my hon. Friend has explained many of them. For example, arthritic hands and joints may not be able to cope with zips and buttons, mentaly handicapped people may find it difficult to cope with fasteners, there are those whose body shape does not fit conventional clothing and there are others whose clothing must accommodate body-worn supports or possibly incontinence pads.
  It is important that all disabled people should be given the opportunity to lead lives that are as full and independent as possible, and this applies to their dressing and clothing needs as much as to other aspects of daily living. It means that there will be some who will need special clothing that is tailored to their individual disability. This helps disabled people to be and to feel more independent, and the act of dressing itself can have beneficial results. For example, it can help to mobilise joints and strengthen muscles as well as providing a boost to morale.
  We recognise that it will not do to provide clothes that merely overcome the problems to which I have referred. Clothes are an integral part of the personality and individuality of the wearer and his or her acceptance socially. Good fashionable clothes increase the self-esteem of the wearer and the regard in which he or she is held by others. Disabled people now—I think that this is their absolute right—are very fasion conscious. They demand a choice of clothing which, while functional, does not obviously proclaim itself as being different from the sort of clothing that they might have been able to buy in a high street shop. This applies equally to those who might be unable to dress or undress themselves or who need help to do so.
  It was against that background that Fashion Services for the Disabled proposed a three-year project, which was accepted for funding by the urban programme and the Manpower Services Commission. It was sponsored by the Bradford and Ilkley community college. The aim of the project was twofold. First, the aim was to provide a training centre offering courses to encourage self-help among disabled people and their carers. Courses were offered also to teachers to give them a deeper understanding of disability and practical experience of working with, designing for and fitting disabled persons. There are courses for disabled people and their carers to learn about fabrics, design, pattern making and garment construction. Professionals working with disabled people have the chance to discuss with Fashion Services for the Disabled the clothing problems that they meet and to work with the organisation to solve them.

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  The second aim was to set up a workshop to produce fashionable clothing that meets individual need and gives maximum independence in dressing and care. For this purpose people from the workshops visit homes, centres, hospitals, schools and individuals on request to discuss with individuals the problems and to take measurements as necessary. Garments are made in the fabric of the client's choice and fitted before completion. The prices to the customer are normally then comparable with similar commercial products.
  As my hon. Friend said, the project began in 1983 and continued until April 1987, which was when the funding problem reared its head. Fashion Services for the Disabled contacted the Department of Health and Social Security on several occasions, most recently in June, requesting funding for a continuation of the project at a cost of about £32,000 per annum.
  Unfortunately, we were unable to agree to the request as the project did not meet the criteria under section 64 of the Health Services Public Health Act 1968; nor did it meet the criteria as a research project.
  My hon. Friend will appreciate that funding schemes must necessarily have rules or criteria governing the purpose for which a grant may be made, and to whom it may be made. The section 64 funds are provided mainly to assist with the central administration costs of national voluntary organisations in the health and personal social services spheres. Funds are, however, also provided to support innovatory projects of potential national significance, or to develop a particular pattern of service. Such project funding is essentially pump priming, and is intended to be time-limited, normally to a maximum of three years.
  The organisation that put in the request is not now an innovatory one, and I very much regret that we have been unable to help that very worthwhile organisation.
  Fashion Services also raised the question of joint funding, and was advised to seek support from local statutory authorities or voluntary bodies that use their services. My understanding of the pesent position is that Fashion Services' workshop has been taken under the wing of Bradford and Ilkley community college, which has agreed to cover the costs until March 1988. Beyond that, I understand that Bradford education department is currently reviewing the position from April 1988 onwards, and recently met representatives of Dr Barnardo's with a view to the latter having some involvement with Fashion Services. Dr. Barnardo's is discussing with Fashion Services the possibility of some involvement in the management and development of the project as a youth training scheme, together with the city of Bradford. Such involvement will obviously depend on a number of factors, including the satisfactory resolution of financial arrangements and sufficient grant aid from the local authority to match any input from Dr. Barnardo's. I earnestly hope that the arrangements will be concluded satisfactorily, and I am very sorry that, as far as I can judge, the project does not fit the section 64 criteria, for the reasons that I have explained.
  None the less, we recognise that my Department has a primary responsibility for disabled people, and must play a part in helping. For the majority of disabled people, their needs for clothing and to exercise personal choice of style can be met by certain types of clothing produced for the general market, or by adaptations to standard garments. That view is supported by the Disabled Living foundation,
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  perhaps the major voluntary organisation for the disabled. My hon. Friend the Minister for the Disabled will be visiting that organisation in a few hours' time. We provide a substantial grant to the Disabled Living Foundation, whose clothing advisory service is the main source of information on the subject, collecting, storing and disseminating information on all aspects of clothing for disabled people.
  I mentioned earlier the special needs of people who are mentally handicapped, and who may lack the necessary intellectual ability or dexterity to dress themselves in conventional clothing. In 1985, my Department agreed to provide the DLF with an additional grant of some £20,000 to fund a project to produce a book on clothing and dressing intended for all concerned with the care and teaching of mentally handicapped people, to enable them to help such people achieve greater independence. A final draft of the book has just been received.
  My Department also funds the organisation Equipment for the Disabled, which provides and updates a series of reference books on a wide range of disability equipment and self-help devices currently available. One of their publications, "Clothing and Dressing for Adults," provides information on a number of factors which need to be taken into account in selecting clothing, and which help the individual to choose suitable styles. Work on updating the book is shortly to begin.
  Through its disability equipment assessment programme, the Department sponsored the Southampton general hospital's assessment of the use of lower limb dressing aids. The programme assesses disability equipment while it is in use by disabled people under clinical supervision and records the advantages and disadvantages of the equipment. It offers guidelines on the most important aspects to be considered when such equipment is prescribed.
  The programme is aimed primarily at helping disabled people, their carers and the professionals working with them to choose the most suitable equipment to meet their needs. It is also of value to manufacturers and suppliers. The feedback that they obtain helps them to see whether their products need to be modified to improve performance or convenience. A number of reports have been published, including that from Southampton, and they are available from the Department on request. The Southampton unit is currently engaged on the assessment of upper limb dressing equipment and garment fastenings.
  I hope that my hon. Friend now accepts that the Department is aware of the problems that are associated with special clothing needs and that it is doing something about them. I hope that my hon. Friend will also accept the assurance that I have given him, even though I am unable at this stage to give him firm news about Fashion Services for the Disabled. I very much hope that the plans that are now being considered in order to continue the financing of that project will be successful. It is a most worthwhile project that has done very valuable work. I join my hon. Friend in commending Mrs. Thornton on the very valuable work that she has done. Not least for that reason, again I thank my hon. Friend most warmly for raising the subject and for giving us the opportunity to have this short debate.
  Question put and agreed to.
  Adjourned accordingly at one minute past Four o'clock am.