Commons Sitting of 28 January 1988

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

  ASSOCIATED BRITISH PORTS (NO. 2) BILL
  Order for Second Reading read.
  To be read a Second time upon Tuesday 2 February.

  BIRMINGHAM CITY COUNCIL BILL
  Read a Second time, and committed.

  CITY OF LONDON (SPITAFIELDS MARKET) BILL
  Orders for Second Reading read.
  To be read a Second time upon Tuesday 2 February.

  DARTMOUTH-KINGSWEAR FLOATING BRIDGE BILL
  Read a Second time and referred to the Examiners of Petitions for Private Bills.

  INTERNATIONAL MANAGEMENT CENTRE FROM BUCKINGHAM BILL
  Orders for Second Reading read.
  To be a Second time upon Tuesday 2 February.

  LONDON REGIONAL TRANSPORT (NO. 2) BILL
  Read a Second time and referred to the Examiners of Petitions for Private Bills.

  SOUTHERN WATER AUTHORITY BILL
  Orders for Second Reading read.
  To be a Second time upon Tuesday 2 February.

  TORBAY HARBOUR (OXEN COVE AND COASTAL FOOTPATH, BRIXHAM) BILL
  Read a Second time, and committed.

  LONDON REGIONAL TRANSPORT BILL (By Order)
  Order read for resuming adjourned debate on consideration [10 December]. That the Bill be now considered.
  Debate further adjourned till Thursday 4 February.

  HAMPSHIRE (LYNDHURST BYPASS) BILL [Lords] (By Order)
  Orders for Second Reading read.
  To be read a Second time upon Thursday 4 February.

Oral Answers to Questions
  NORTHERN IRELAND

    Stalker/Sampson Inquiry
    Mr. Tony Lloyd: To ask the Secretary of State for Northern Ireland if he will meet the Chief Constable of the Royal Ulster Constabulary to discuss the latest implications of the Stalker/Sampson inquiry into allegations involving misconduct by the security forces.
    Mr. Flannery: To ask the Secretary of State for Northern Ireland what representations he has received seeking publication in full of the Sampson report on the administration of the Royal Ulster Constabulary.
    The Secretary of State for Northern Ireland (Mr. Tom King): My right hon. and learned Friend announced on Monday that the Director of Public Prosecutions (Northern Ireland) had with his agreement concluded that no further criminal proceedings should be brought in respect of the incidents in 1982 which led to the setting up of the Stalker/Sampson inquiry. The report of that inquiry, being that of a police investigation into possible criminal offences, will, in accordance with practice, not be published.
    However, I would wish to make it clear to the House that this is not the end of the matter. The Attorney-General's statement was concerned with the responsibilities of the Director of Public Prosecutions and himself in the matter of criminal proceedings. He reported that the Director of Public Prosecutions had concluded that there was evidence of the commission of offences of perverting, or attempting or conspiring to pervert, the course of justice, or of obstructing a constable in the execution of his duty, but that, after consideration of the public interest, and in particular matters of national security, it would not be proper to institute crimial proceedings. The next step now is for the findings of the report, including the evidence referred to in the statement, to be considered in the context of the question of disciplinary proceedings.
    In addition, the circumstances surrounding and following the incidents in 1982 gave rise to concern about procedures, responsibilities and control within the RUC. The inquiry report addressed those aspects and recommended a special inspection by Her Majesty's Inspectorate of Constabulary. This inspection, of which I informed the House on 15 July, has now been completed and I received the report on Monday. It is now being urgently studied, and I have asked the Chief Constable for his early comments. I wish to make a full statement to the House as soon as possible on this and any other matters that fall within my responsibilities.
    Mr. Lloyd: Obviously the Secretary of State's announcement that there will be a further statement will be welcomed, and hon. Members on both sides of the House will wait for it with some impatience, given the length of time that has passed. Does the Secretary of State accept that when John Stalker, as deputy chief constable of Greater Manchester, was taken off the case, it was widely rumoured that he had already recommended prosecution against some of the lower-serving ranks and that he intended to question senior RUC officers under
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    caution? Because of that, and because it is important that the RUC should be respected throughout the community in Northern Ireland, does the Secretary of State also accept that the Attorney-General's decision earlier this week not to prosecute has left the RUC in a very difficult position in that it will not have the confidence of the whole of the community in the north of Ireland?
    Mr. King: I want to begin by apologising to the House for the length of my reply earlier. However, because of the great concern that exists over this matter, I though it proper not to duck the issue and to try to explain it as fully as I could.
    I understand entirely the issue about the confidence of the minority community in the RUC. I bitterly regret the events that took place in 1982. Contrary to the impression that no one was charged, I must state that four constables were charged with the offence of murder four years ago. Those issues have been the subject of the most exhaustive investigations. The team working under Mr. Stalker largely continued with those investigations under Mr. Sampson. The team carried out an exhaustive inquiry at the request of the DPP, the findings of which, in respect of criminal proceedings, were announced by my right hon. and learned Friend the Attorney-General on Monday. I trust that people will appreciate, not only how long ago the offences took place, but the steps that have been taken since, and will therefore judge the RUC on its present performance, not on certain matters that gave rise to serious concern in 1982.
    Mr. Flannery: Does the Secretary of State agree that after hundreds of years of British occupation of Ireland it is inevitable that the Irish people are deeply suspicious of British justice? Does he further agree that when Mr. Stalker was taken off the case there was no natural progression from Mr. Stalker to Mr. Sampson? Mr. Stalker was removed in the most curious circumstances, and we do not yet know all the details. The minority community and the Government of the Republic of Ireland are deeply concerned about this. Therefore, will he seek a judicial inquiry, under the Tribunals of Inquiry (Evidence) Act 1921? I know that he said he will make another statement, but the fears and suspicions remain and they have been fuelled by the Attorney-General's statement on Monday.
    Mr. King: I noticed during the Attorney-General's statement on Monday that hon. Members on both sides of the House paid tribute to the total integrity of the Director of Public Prosecutions (Northern Ireland) whose decision was announced by the Attorney-General. I remind the House that the Director of Public Prosecutions, because he was not satisfied with the evidence, insisted upon the inquiry being set up in the first place. That point should be remembered. I can assure the hon. Gentleman that that part of the Sampson report that I have seen which is within my responsibility incorporates Mr. Stalker's draft conclusions and Mr. Sampson's comments upon them. Therefore, in that respect, there is real continuity.
    Sir John Biggs-Davison: Are not the safety and continued effectiveness of members of the security forces and of the security services and those who help them an important part of the national interest that the Director of Public Prosecutions was bound to consider? Should not

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    responsible Members of this House have a care for that? Is my right hon. Friend aware that we await his further statement with confidence and believe that those in charge of the Royal Ulster Constabulary will be as concerned as anyone else to see that the disciplinary proceedings—if there are any—are carried out to the full to ensure that a proper outcome is reached?
    Mr. King: I heard my hon. Friend commenting on that this morning. He was absolutely correct to say, as I said in my statement, that this is not the end of the matter. It is possible, as he said in his interview this morning, that disciplinary proceedings could have serious consequences for the individuals concerned.
    The difficulty and the challenge faced by the Attorney-General, as well as the Director of Public Prosecutions (Northern Ireland), is that they are constitutionally required to consider the public interest. Very difficult decisions are involved. We have taken — as did my predecessors—the most thorough steps to try to ensure that such matters are as fully investigated as possible. Anyone who honestly considers the progress of this matter will recognise that exhaustive investigations have taken place and respect the integrity of those who had to make decisions on the basis of those investigations.
    Mr. Peter Robinson: Does the Secretary of State believe that the action of the Government of the Republic of Ireland in calling off a cross-border security meeting between the Garda Siochana Commissioner and the Chief Constable of the Royal Ulster Constabulary was a vulgar threat, suggesting to the Government that if they did not toe the line there would be no support for cross-border co-operation?
    Mr. King: No, Sir. We attach the greatest importance to cross-border security co-operation. Anyone who has heard today's news of what is clearly a very significant arms find on the shore of Donegal will realise the value that is increasingly being obtained from that close co-operation.
    Mr. Alton: Is not one of the most unsatisfactory aspects the veil of secrecy that has been pulled across the proceedings? Does the Secretary of State not recognise that if confidence in the RUC is to be established among members of the minority community—many of whom ought to be encouraged to join and support the RUC— it will be necessary to publish the proceedings of the inquiry, at least to Northern Ireland Members of Parliament and to the Intergovernmental Conference? Will he consider that? Will he also say what lessons have been learnt for the future, and what changes will be made to ensure that this does not happen again?
    Mr. King: I have referred to procedures, responsibilities and control within the RUC. It is important to remember that the incidents that gave rise to the present concern took place six years ago, and that a number of changes were made soon after that by the Chief Constable in recognition of some of the points of concern. I have no doubt that that is one of the reasons for the increased confidence in the RUC, which has followed the lessons learnt from some of the most unfortunate aspects of those regrettable incidents.
    Mr. Hayes: Does my right hon. Friend agree that it is of paramount importance that this whole sorry affair should not stand in the way of cross-border security,
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    particularly cross-border co-operation as a generality? Is it not important that the inquiries are undertaken swiftly and that there is a clear conclusion, so that the public can have confidence in the RUC again?
    Mr. King: I agree with my hon. Friend about the importance of confidence in the RUC, and I bitterly regret that the events of so many years ago — and the controversy over them — have the potential to damage some of that confidence. That, however, is the reality. One of the problems that we face in fighting vicious terrorists is that issues of national security and the protection of individuals must always be in our minds. That was mentioned by the Attorney-General, who referred to the public interest, and it applies particularly to issues of national security. But we are trying to recognise the lessons that can be learnt.
    Mr. Hume: Does the Secretary of State accept that in most societies the national interest is best served by unequivocal and impartial implementation of the rule of law? Is it not best served by the community as a whole having confidence in both the police services and the administration of justice? Will he tell us what contribution to that national interest was made by the Attorney-General's statement this week? There is evidence of a clear attempt to pervert the course of justice—not in a minor case of theft, but in cases involving the deaths of five people. Does the Secretary of State recall the Prime Minister's statement some time ago that there should be no hiding place anywhere in these islands for anyone who commits a crime? Does he accept that the implication of the Attorney-General's statement is that there is a hiding place for selected people who, in spite of the fact that the incidents happened five or six years ago, are still either in the security forces or the security services?
    Mr. King: First, I know that the hon. Gentleman will recognise that too many people comment on this and blithely ignore the fact that four people have already faced a charge of murder in a court of law. Furthermore, it is simply unacceptable to imply that there has been any attempt to cover up, when my right hon. and learned Friend made it absolutely clear that there is evidence, and when I have made it clear to the House that that evidence will not be suppressed. It will be made available and taken into account in the context of disciplinary proceedings. I made the clearest statement that this is not, therefore, a cover-up to seek to suppress the fact that there is evidence and that that evidence will have to be considered. My right hon. and learned Friend informed the House that in the national interest and in the interests of national security it is not proper for there to be criminal proceedings in these respects.
    Mr. McCusker: What disciplinary action is to be taken against those secret service agents who were up to their necks in this matter, who may well have initiated all the actions and whose presence is confirmed by reference to the national interest?
    Mr. King: The hon. Gentleman will know that it is not for me to comment on the points that he has raised.
    Mr. Michael McNair-Wilson: Has my right hon. Friend seen the report in today's edition of The Guardian that Mr. Alan Dukes, the Irish Opposition Leader, says that the British Government gave an assurance to Dublin in 1986 that charges would probably be made against senior RUC

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    officers following the Sampson-Stalker inquiry? Will my right hon. Friend comment on that statement and say whether there is any accuracy in it?
    Mr. King: If by "charges" my hon. Friend means that prosecutions will be brought, that is a matter not for Ministers but for the Director of Public Prosecutions in conjunction with the Attorney-General.
    Mr. McNamara: Will the Secretary of State confirm that the disciplinary proceedings will be in camera, and not in public, so we shall still not know even part of the truth? Will he also confirm that when he was consulted by the Attorney-General he advised that, on the grounds of public interest and national security, there should not be any prosecutions based on the Stalker-Sampson report, and that that advice was based on the knowledge that, if prosecuted, the officers named in The Times, Chief Superintendent Andy Anderson and Chief Inspector Ronnie Flanagan, had let it be known that they would reveal in the witness box the whole background to the shoot-to-kill allegations and the attempted cover-up, implicating senior officers and others who either formulated the policy or had knowledge of it?
    Mr. King: I understand that it is not the practice of my right hon. and learned Friend the Attorney-General to comment on whom he consults when determining his assessment of the public interest or national security. Obviously, therefore, it is not proper for me to comment.

    Anglo-Irish Agreement
    Mr. Allen: To ask the Secretary of State for Northern Ireland when he next plans to meet Ministers from the Republic of Ireland for discussions under the provisions of the Anglo-Irish Agreement.
    Mr. Tom King: I hope to do so very shortly.
    Mr. Allen: First, I thank the Secretary of State, his Parliamentary Private Secretary and the Northern Ireland Office for arranging the visit to Northern Ireland for those hon. Members who had no previous experience of Northern Ireland. I hope that I speak on behalf of those hon. Members of all parties who went on the visit in hoping that that educational experience can be extended so that we can speak from first-hand knowledge rather than from reflex.
    On the Anglo-Irish Agreement, will the Secretary of State place on the agenda of future meetings the question of fair employment? When we were over there, we heard that some progress had been made on electoral boundaries and housing, but that one outstanding factor was fair employment, allowing Catholics and Protestants to have an equal say in employment in the major industries in Northern Ireland. Will the right hon. Gentleman tell us what progress has been made on that?
    Mr. King: First, I thank the hon. Gentleman for his opening comments. I welcome those hon. Members who may not be familiar with Northern Ireland but who are willing to acquaint themselves more clearly with the situation there. I think that I speak for every hon. Member representing a Northern Ireland constituency when I say how much we welcome the interest of other hon. Members in such matters. I am grateful to the hon. Gentleman for taking the time.
    On the hon. Gentleman's second point, fair employment and equality of opportunity in employment have
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    been a live subject in discussions in the Intergovernmental Conference. There is no doubt that as our proposals develop that will continue to be the case.
    Mr. Wilkinson: Will my right hon. Friend point out to the Irish authorities that if they continue to boycott ministerial meetings under the Anglo-Irish Agreement following the Attorney-General's statement, they could find that that boycott is a two-edged sword? If such meetings resume, will my right hon. Friend make it clear to his Southern Irish counterparts that the defeat of the IRA is the first priority and that any political tinkering or change can come only after the campaign against the terrorists has been won?
    Mr. King: There is no question of a boycott. In fact, we have arranged an extra, special meeting and, as I said in my original answer, we hope that it will be held shortly. I certainly look forward to close and continuing co-operation. Furthermore, I would not wish to strike such a note today, when we have heard welcome news of a very substantial arms find on the shore of Donegal. We pay tribute to the Garda's work in that respect. I know that every law-abiding person in Northern Ireland will welcome the news.
    Mr. Mallon: At the next meeting of the Intergovernmental Conference, will the Secretary of State explain to the representatives of the Irish Government how the Attorney-General's decision is compatible with articles 7 and 8 of the Anglo-Irish Agreement, which the British Government signed? In more immediate terms, what advice has the right hon. Gentleman to offer to all those young people — both Catholic and Protestant — who, through force of circumstance in their own communities, are sitting in gaol? How does he intend to persuade them to have confidence, not just in the police, but in the whole process of justice?
    Mr. King: I should like to think that the hon. Gentleman recognises the progress that has been made in that respect. I have been the first to say that the events of 1982 and the problems that they have posed have undoubtedly cast a shadow over recent attitudes. These are very difficult issues indeed.
    On compatibility with the agreement, Irish Ministers well understand that it is implicit in the agreement that issues of national security have to be borne in mind. That is one of the difficult challenges that we face. I do not think that hon. Members will challenge the integrity of the Director of Public Prosecutions—who, I repeat, set up the inquiry in the first place — in his determination to ensure that he was privy to all the facts, or, indeed, that of my right hon. and learned Friend the Attorney-General.
    Mr. Couchman: Is my right hon. Friend satisfied that the extradition issue has now been sorted out? If not, will he pursue the issue again when he next meets Irish Ministers so that we can all be sure that there will be no haven for terrorists as a result of technical complications in extradition matters in the Irish Republic?
    Mr. King: We are working very closely indeed with the Irish Government on these matters, and we have made progress. No two cases are ever quite the same and different issues arise from them, but I hope that there will be a continuing improvement in these matters, to which we attach the greatest importance.
    Mr. McNamara: May I make it clear that no one denies the integrity of the Director of Public Prosecutions? However, we say that his decision was based upon evidence, given to him by the Attorney-General, from which he could reach no other conclusion. It is that evidence that we seek to examine. Will the Secretary of State now confirm that what he said in reply to the hon. Member for Newbury (Mr. McNair-Wilson) represented a denial of what Mr. Dukes stated—
    Mr. Speaker: Order. The question is about the Anglo-Irish Agreement.
    Mr. McNamara: That is right, Mr. Speaker. Mr. Dukes said that at the meeting of the Intergovernmental Conference on 8 December 1986 the right hon. Gentleman did not say, or give the impression, to Mr. Peter Barry or to Mr. Dukes that charges would be preferred against senior officers of the RUC following the receipt of the Stalker inquiry and that, on that basis, those Ministers did not press for the matter to be published. Will the Secretary of State also tell the House, on this, the 300th anniversary of the arrival of William of Orange and the declaration of rights, why the Government are breaking the concordat between Parliament and the Crown by suspending and dispensing with the law?
    Mr. King: I shall not respond to the last part of the question, which took the hon. Gentleman into confused waters. As to the first part of his question about would-be prosecutions, which was slightly different in phraseology from that of my hon. Friend the Member for Newbury (Mr. McNair-Wilson), he knows perfectly well that that is not a matter for me. It is a matter for the Director of Public Prosecutions and the Attorney-General.
    Mr. Gow: When my right hon. Friend next meets the Irish Foreign Minister and the Irish Minister for Justice, will he comment on, or put forward views and proposals about, the administration of justice in the Irish Republic?
    Mr. King: We have no present proposals to do so.

    Health and Personal Social Services
    Mr. McWilliam: To ask the Secretary of State for Northern Ireland if he intends to increase funding for the purposes of improving health and the personal social services in Northern Ireland; and if he will make a statement.
    The Parliamentary Under-Secretary of State for Northern Ireland (Mr. Richard Needham): The public expenditure White Paper published last week provided details of the planned increase in expenditure on the health and personal social services in Northern Ireland over the next three financial years. In 1988–89 expenditure will rise to £845 million in total.
    Mr. McWilliam: Does the Minister agree that his Department's recent announcement about the level of health expenditure in Northern Ireland has been widely condemned by those concerned with health care in the Province? Does he accept the calculation of the Province's health boards, which show that they are facing a £20 million shortfall in health expenditure for next year? Will he accept that the Department's announcement completely fails to meet the crisis in health care in Northern Ireland?
    Mr. Needham: No, Sir, I will not accept that. I hope that the hon. Gentleman is aware that in Northern Ireland we spend 23 per cent, more per year on the Health Service than we do in other regions of the United Kingdom. I understand the difficulties with regard to expenditure by the health boards this year, but I should point out that our record on health expenditure in Northern Ireland is second to none. As a percentage of GDP we spend 12·4 per cent., which is almost twice as much as West Germany.
    Mr. Kiifedder: Despite what the Minister has just said, it has been reported that health authorities throughout Northern Ireland have warned him that a crisis will develop in the Health Service unless more money is made available. Will he reconsider this matter and provide sufficient money? If not, hospital wards will have to close and the people of Northern Ireland will suffer further.
    Mr. Needham: I understand that there are problems with the health boards this year, but I must refer to the high levels of expenditure in the Province. There will be a 5·3 per cent, increase in expenditure this year. Many other countries in Europe are having to cut back on health expenditure.
    Rev. Martin Smyth: I acknowledge the amount of expenditure on health care, but does the Minister recognise the greater need of Northern Ireland and that, for cardiac surgery and ophthalmology, there are three times as many people on the waiting list as there were in 1982? A slight injection of funds would be helpful. Will he acknowledge that in the Eastern Health and Social Services Board there will be a shortfall of £8 million and that, as a result, with regard to cardiac care, people will be dying?
    Mr. Needham: I agree with the hon. Gentleman about the increased level of need in Northern Ireland, which is why we spend 23 per cent. more. As to the particulars that the hon. Gentleman referred to, I shall have an opportunity to discuss with the chairman and general manager of the Eastern Health and Social Services Board its programme for next year, which is a matter for them.
    Sir John Farr: Does my right hon. Friend agree that, however generous we would like the British taxpayer to be to deserving cases in Northern Ireland, we must continually bear in mind that its Health Service is almost completely funded by mainland money? Such assistance should not be too disproportionate to other similar and parallel benefits in other parts of the United Kingdom.
    Mr. Needham: The Government accept that there is an additional need for health care in Northern Ireland, which is why we provide funds for it and will continue to do so at a high level.
    Mr. Jim Marshall: Is the Minister aware that he sounds very much like the Prime Minister in his recitation of statistics? Does he realise that his position is equally as incongruous as that of the Prime Minister, in that the statistics that he relates bear little relation to the needs and requirements of the Health Service and social services in the Province? Since the Treasury is awash with money, will he join us in urging the Chancellor of the Exchequer to increase funding for the Health Service in the Province?
    Mr. Needham: That is the first time that I have ever been compared to the Prime Minister, and I am grateful to the hon. Member. I am sure he is aware that the

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    Treasury in Northern Ireland is not awash with money. We have had a very difficult time this year and have made all the money that we can available to the Health Service. We have a first-rate Health Service in Northern Ireland and will do everything that we can to maintain it.

    Children (Cross-community Contacts)
    Mr. Page: To ask the Secretary of State for Northern Ireland what steps he is taking to increase cross-community contacts between children at school in Northern Ireland.
    The Parliamentary Under-Secretary of State for Northern Ireland (Dr. Brian Mawhinney): I introduced a new cross-community contact scheme in September last year which provides additional annual resources of £200,000 to assist schools, colleges, youth groups and reconciliation bodies in the organisation of new cross-community activities for young people under 19. So far 120 applications have been received, of which 52 are from the schools sector, involving a total of 131 different schools.
    Mr. Page: While I warmly welcome this initiative, may I ask whether my hon. Friend agrees that if we can get the two communities to mix when they are youngsters there is a chance that they might mix when they are adults and thus stop the tearing and ripping at each other that has been taking place for centuries?
    Dr. Mawhinney: I agree with what my hon. Friend says and I am heartened by my belief that an increasing number of people in the Province feel similarly.
    Mr. A. Cecil Walker: Is the Minister aware that encouraging the setting up of so-called integrated schools would only contribute to the breaking down and closing of schools within the maintained and controlled sectors? Is he further aware that such action would not result in the cross-community relations that he would wish to see achieved and that pupils who would be attracted towards integrated education will integrate themselves naturally in their daily lives? Does the Minister not feel that it would be better to deploy existing education resources for the encouragement of cross-community activities in existing schools where there is already a co-operative effort towards that end?
    Dr. Mawhinney: The hon. Gentleman will know that I have done precisely what he urged in the last part of his question and have devoted increased effort and resources to trying to improve cross-community contacts in existing schools. He will also know that I and my predecessors have always said that we would seek to educate the children of Northern Ireland according to the wishes of their parents, and there are many parents — an increasing number, I believe—who would like to see their children educated in circumstances that are different from the traditional ones that have pertained in Northern Ireland for the past 65 years.
    Mr. Cash: The Education Reform Bill is, of course, going through the House at the present time. Could my hon. Friend give some indication of the extent to which, in relation to the curriculum which children in Northern Ireland are experiencing, there is a deliberate attempt to ensure that they are taught on a non-sectarian basis? Surely that would be a great help for the future.
    Dr. Mawhinney: I hope and expect to be issuing a consultation paper on education reform in Northern Ireland in the reasonably near future.

    Job Creation
    Mr. Grocott: To ask the Secretary of State for Northern Ireland what economic initiatives the Government plan to boost employment in Northern Ireland.
    The Parliamentary Under-Secretary of State for Northern Ireland (Mr. Peter Viggers): In the context of the Pathfinder programme which I introduced last year I set up six task forces to identify strengths and weaknesses in the Northern Ireland economy and to promote constructive change. This has been enthusiastically received. Regional conferences have been held throughout the Province, leading to keen discussion. This takes place against a background of falling unemployment.
    Mr. Grocott: Can the Minister explain an aspect of Government policy that puzzles a lot of us? It is that in Northern Ireland public investment is considered to be a sensible way of boosting the economy and creating jobs, but in the rest of the United Kingdom it is regarded as Keynsian nonsense and a waste of money.
    Mr. Viggers: No. I gather that the hon. Gentleman was recently in the Province and I hope that he enjoyed his visit. I must put him right on the tone of his question. The Industrial Development Board and the Local Enterprise Development Unit will strengthen enterprise in Northern Ireland and will promote investment by the private sector. I am delighted to say that, for the last four years, the Industrial Development Board alone has promoted investment by the private sector of £1 billion in industry and commerce.
    Mr. Bowis: Does my hon. Friend agree that one of the best boosts to jobs and the economy of Northern Ireland would be the removal of the iniquities of the protection racket, particularly in the construction industry? Will he bring forward at an early stage fiscal measures to remove those iniquities?
    Mr. Viggers: Although law and order issues are not directly within my field of responsibility, I can confirm that vigorous steps are being taken to counter this threat.
    Mr. Clifford Forsythe: Will the Minister, in his conversations with his colleagues in the Northern Ireland Office, ask the Minister responsible for health in Northern Ireland to ensure that when the Antrim area hospital is built—
    Mr. Speaker: Order. The question is about employment.
    Mr. Forsythe: —as much as work as possible is given to competent local contractors?
    Mr. Viggers: No doubt the Minister with responsibility for health matters heard the hon. Gentleman.
    Mr. Barry Porter: Does my hon. Friend agree that the best way to boost employment in the Province would be to make some progress on the political front? Do he and his right hon. Friend agree that the time has now come to implement the parliamentary tier proposals contained in the Anglo-Irish Agreement? Given the events of the past

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    few days, that would at least provide an opportunity for those of differing and sometimes opposing views to come face to face to discuss their differences and to make some positive moves forward.
    Mr. Viggers: The Government have always taken the view that political progress on security and progress on the economy are interlinked. In matters regarding the economy, for which I am responsible, the rate at which unemployment is diminishing now appears to be accelerating. A 1,000 a month reduction in the level of unemployment in the past six months has now accelerated to a rate of 1,400 per month in the past three months. We find this very promising.

    Maghaberry Prison
    Mr. A. Cecil Walker: To ask the Secretary of State for Northern Ireland how many (a) male and (b) female prisoners are in residence in Maghaberry prison; what is the total number of available places; and when full occupancy will be achieved.
    The Minister of State, Northern Ireland Office (Mr. John Stanley): The female prison at Maghaberry has 56 cells and was designed to accommodate all the female prisoners in Northern Ireland.
    On 27 January, 31 female prisoners were in custody there. On the same date there were 93 prisoners in the male prison at Maghaberry, which has a capacity for 432. It is expected that there will be around 100 male prisoners there by the middle of next month, with the build-up continuing thereafter. At present it is not possible to estimate when full occupation of the male prison will be achieved.
    Mr. Walker: Is the Minister aware that some years have elapsed since Maghaberry prison was supposed to come into service? I would like to make the Minister aware of the grave suspicion that, during the construction of that prison, Republican elements employed there were guilty of certain acts, as a consequence of which the prison is not being opened when it should be. In view of the fact that the Crumlin road prison is grossly overcrowded, as I know from my own experience, will the Minister tell the House whether he will consider moving some prisoners from Crumlin road to Maghaberry if and when that prison is ever commissioned?
    Mr. Stanley: The main reason for the delay in the opening of the new Maghaberry prison was the need to carry out major redesign work following security experience of similarly designed prisons elsewhere in the United Kingdom. As to the hon. Gentleman's comment about overcrowding at Belfast prison, I am glad to be able to tell him that the number of prisoners there yesterday was only 14 above the authorised capacity of 500.

    Rating Reform
    Mr. Gow: To ask the Secretary of State for Northern Ireland what representations he has received seeking the introduction of the community charge in Northern Ireland.
    Mr. Stanley: The representations that my right hon. Friend has received from members of the public currently amount to one letter.
    Mr. Gow: Why are the inestimable benefits of the community charge to be conferred upon the people of
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    Tonbridge and Mailing, and even Eastbourne, but withheld from the people of Fermanagh and South Tyrone?
    Mr. Stanley: I am grateful to my hon. Friend for his enthusiastic support for the community charge, which is certainly shared in Tonbridge and Mailing and Eastbourne. However, my hon. Friend is well aware that the structure of local government and the financial arrangements for local government in the Province are very different from the rest of Great Britain. My hon. Friend will be aware from my original answer regarding the community charge that we believe that it is right to monitor the progress in the Province.

    Security
    Mr. William Ross: To ask the Secretary of State for Northern Ireland if he is now satisfied with progress in the fight against terrorism.
    Mr. Nicholas Bennett: To ask the Secretary of State for Northern Ireland if he will make a statement on the security situation in 1987.
    Mr. Tom King: Since I last answered questions in the House on 10 December, five civilians, two members of the UDR and one RUC officer have died as a result of the security situation in the Province. The period has been marked by much effective work by the security forces, but the threat remains high. On 21 January I announced new arrangements for the deployment of security forces in border areas.
    I shall circulate the record for 1987 in terms of the number of people charged with terrorist offences and the amount of weapons and ammunition recovered, both by the RUC and the Garda, in the Official Report.
    Mr. Ross: As the IRA has now been proven, as a result of the find in County Donegal today, to have been running in weapons by the shipload, and since there is evidence in Northern Ireland that Protestant paramilitaries are moving weapons by the carload, is it not pathetic for the Minister to come to the House and read off such a litany? When will he be satisfied with progress and when will he eliminate terrorism? Those are the questions that we want answered.
    Mr. King: I find that a disappointing supplementary question, especially from the hon. Member for Londonderry, East (Mr. Ross) who, above all, should welcome the fact that such a substantial quantity of arms has been found in Donegal and the fact that those arms will now not be used, possibly against his constituents. The fact that the hon. Gentleman knows about the shipments for the Loyalists is precisely because the RUC achieved the recapture of those weapons.
    Mr. Bennett: Does my right hon. Friend agree that security affects both sides of the border? What cooperation has he had on security matters as a result of discussions with the Government of the Irish Republic lately?
    Mr. King: Such co-operation is ongoing and extremely close. The evidence of today is further proof of its benefit.

  PRIME MINISTER

    Engagements
    Mr. Sackville: To ask the Prime Minister if she will list her official engagements for Thursday 28 January.
    The Prime Minister (Mrs. Margaret Thatcher): This morning I presided at a meeting of the Cabinet and had meetings with ministerial colleagues and others. In addition to my duties in the House I shall be having further meetings later today.
    Mr. Sackville: Does my right hon. Friend agree that our economic prospects are better now than at any time during the — [Interruption.] That improvement applies equally to the north-west as to the south-east. Is my right hon. Friend aware that there is well over £100 million worth of new development currently under way in Bolton town centre? That is the sort of news that we want from the north of England, rather than the doom and gloom from the Labour Benches, which does so much to reinforce outdated prejudices and deter new investment.
    The Prime Minister: I agree with my hon. Friend. Enterprise is thriving and unemployment is falling in all parts of the country. I congratulate Bolton on its attitude. It is welcoming private enterprise, and the £100 million is an extremely large investment on any count. The real divide is between those cities that welcome private sector enterprise and those which would rather discourage it and have higher unemployment.
    Mr. Kinnock: Does the Prime Minister recall saying, just five weeks ago, on 21 December, that charges for patients in National Health Service hospitals
    "could not possibly come in during the lifetime of this Parliament because I remember very vividly during the election I confirmed we would rule it out. We have introduced extra charges which we think people can afford but we are not talking about extra charges beyond those which we have introduced."
    Does the Prime Minister still stand by those words?
    The Prime Minister: Yes, of course. I made that clear when I was asked a similar question in the House but a short time ago.
    Mr. Kinnock: Is the Prime Minister saying — it is important that she make a formal announcement about this — that there is no possibility in this Parliament of direct or indirect charges for visits to the doctor, for hospital visits, for family planning services or anything else? If she is—and it is what she said in the election— will she be good enough to make a formal announcement, instead of letting it seep out through Bernard Ingham?
    The Prime Minister: I have been asked this question in this House about board and lodging charges, and I have answered it in this House. The statements made during the general election stand. I have said so before, and I say so again. They stand for the lifetime of this Parliament. By the time the next Parliament comes we shall have completed the internal review. We shall then make our promises, which will stand for the following Parliament.

    Decentralisation
    Mr. Fallon: To ask the Prime Minister what steps she is taking to decentralise the work of government.
    The Prime Minister: Over 5,500 Civil Service posts have already been transferred from London since 1979 under
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    the Government's dispersal programme, and a similar number of posts have been dispersed on the initiative of individual Departments.
    Mr. Fallon: Is my right hon. Friend aware that many private companies previously based in London and the south-east have now discovered the advantages of lower-cost enterprise and the higher quality of life that the north can offer? Bearing in mind the very high cost of London weighting allowance and commuter subsidies, would it not make more sense, where it is cost-effective to do so, to transfer more administrative and clerical work from Whitehall to the provinces?
    The Prime Minister: I have indicated some of the posts that have gone and some that separate Departments are also considering. There are nearly 34,000 civil servants working in the northern region. I agree with my hon. Friend about the importance of locating Civil Service jobs outside London and the south-east where possible, because the costs are very high there. This is resulting in separate Departments looking at their plans. By the end of this year, the DHSS will have created a further 500 jobs at its Newcastle central office.
    Mr. Nicholas Brown: The hon. Member for Darlington (Mr. Fallon) undertook some time ago to persuade the Prime Minister to move a substantial number of defence jobs from the south to the north. Why has he been so unsuccessful?
    The Prime Minister: I have said that there are nearly 34,000 civil servants working in the northern region, and in fact four out of five civil servants work outside Greater London. There are already a very considerable number of jobs in the northern region, and, as I have said, there will be more DHSS jobs by the end of this year.
    Mr. Wilkinson: Does my right hon. Friend agree that it is thoroughly refreshing to have a closed question of this kind at this time?
    The Prime Minister: That is a matter for the House. I try to answer the questions that are put down.

    Engagements
    Mr. Buchan: To ask the Prime Minister if she will list her official engagements for Thursday 28 January.
    The Prime Minister: I refer the hon. Gentleman to the reply that I gave some moments ago.
    Mr. Buchan: I have been listening with growing astonishment to the right hon. Lady's claims about decentralisation, since only yesterday she intervened to take direct control over education in Paisley. Are not the regulations she announced yesterday monstrous, arbitrary and possibly illegal? Does she realise that her intervention in favour of one school out of six is an attempt to condemn the other five good schools to closure? Will she not follow the advice given by every commentator and every newspaper in Scotland, led by the Glasgow Herald, which used the headline:
    "Government sledgehammer"?
    That is the right hon. Lady; it is a good phrase. The Herald said:
    "Yesterday was a dismal day for what still remains of local democracy."
    Will the right hon. Lady now recognise the evil and stupidity of her action and withdraw it?
    The Prime Minister: Extensive representations were made to keep in existence a very good school, very popular with parents. What the hon. Gentleman cannot stand is that that school gives great opportunity. Parents wanted it to be kept in existence. It is a very popular decision, which will bring opportunity to many pupils. The hon. Gentleman speaks about legislation. One can lay down regulations only under existing legislation.
    Mr. Tim Smith: To ask the Prime Minister if she will list her official engagements for Thursday 28 January.
    The Prime Minister: I refer my hon. Friend to the reply that I gave some moments ago.
    Mr. Smith: Does my right hon. Friend agree that the strike proposed for next week by certain nursing unions can only hurt patients? Will she therefore condemn the action and invite the Leader of the Opposition to do the same?
    The Prime Minister: Yes, Mr. Speaker, I agree with my hon. Friend. Strike action in the Health Service harms the patient and puts heavier burdens on those with higher professional standards who refuse to strike. I condemn such action. I had hoped that it might be condemned by all parts of the House. At any rate, it is condemned by those who care about the Health Service.
    Mrs. Mahon: To ask the Prime Minister if she will list her official engagements for Thursday 28 January.
    The Prime Minister: I refer the hon. Lady to the reply that I gave some moments ago.
    Mrs. Mahon: How does the Prime Minister justify her previous remarks? Why cannot she defend the nurses who are taking action in defence of the National Health Service as vigorously as she defended the workers in Solidarity against the dictatorial rule of General Jaruzelski?
    The Prime Minister: Harming patients is taking action against the National Health Service.
    Dr. Goodson-Wickes: Does my right hon. Friend share my deep disquiet at the disclosure in the House of individual medical histories? Does the unethical practice adopted by right hon. and hon. Opposition Members achieve anything, save adding to the distress of the parents concerned?
    The Prime Minister: I am not aware of a particular case. I would have thought that the general proposition put by my hon. Friend is correct.
    Mr. Steel: Will the Prime Minister recognise that, following—
    Mr. Dobson: It is Vatman.
    Mr. Speaker: Hon. Members must not interrupt in that way.
    Mr. Steel: Following her unsuccessful attempt to divide the nurses' unions, will the Prime Minister recognise that the one thing that she could do to restore morale in the National Health Service would be to state unequivocally that the nurses' pay award will be funded in full, without cuts in the budgets of health authorities?
    The Prime Minister: We had that identical question either last Question Time or the time before. Identical questions get identical answers. As Government we shall
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    deal with the proposals from the review body in the way in which we have dealt with them before. When we know what the proposals are we shall decide precisely how they are to be funded.
    Mr. John Browne: Does my right hon. Friend accept that our nation led the world in the exploration of land, sea and air, bringing great commercial, political and cultural advantage to our country? Does she believe that our national interest is greatly served by leading in the exploration of the new domain of space? If so, will she please give due weight to Lord Shackleton's report and give a clear indication to the House of precisely what is our national space strategy?
    The Prime Minister: Money spent on research in space has be weighed against the other competing demands for research money. That is what we are doing. We are keeping, of course, the full subscription to the mandatory programme of the European Space Agency. Some of the other programmes are optional. I understand that ESA itself is reviewing some of its programmes.
    Mr. Pike: To ask the Prime Minister if she will list her official engagements for Thursday 28 January.
    The Prime Minister: I refer the hon. Gentleman to the reply that I gave some moments ago.
    Mr. Pike: Will the Prime Minister try to find time today to discuss with the Government Chief Whip arid her ministerial colleagues, the hon. Members for Pendle (Mr. Lee) and for Rossendale and Darwen (Mr. Trippier) the outcome of a meeting that they attended with me earlier this month with Burnley, Pendle and Rossendale district health authority, when that authority listed a contingency plan for cuts within the Health Service which it said would affect patient care and levels of service within the area if nurses' pay is underfunded next year? Does she recognise that Sir John Page, of the regional health authority, said this week that the health authority, which has now withdrawn that ploy, must submit another? Does she accept that the cuts are already at an unacceptable level? Will she make additional funds available now?
    The Prime Minister: I took the precaution of inquiring about the position of Burnley, Pendle and Rossendale health authority. According to our records, the number of in-patients is up by 7·5 per cent.—
    Mr. Campbell-Savours: Oh, come on.
    The Prime Minister: I am coming on. Day cases have gone up by 80 per cent., capital building completed has cost £6 million — the phase 3 development of Burnley general hospital. A pharmacy is under construction at a cost of £1·9 million. In the pipeline, it is planned to spend £5·9 million on Pendle community hospital. Waiting lists are down by 30 per cent, since 1983. Perhaps the hon. Gentleman would like to say thank you.
    Mr. Roger King: To ask the Prime Minister if she will list her official engagements for Thursday 28 January.
    The Prime Minister: I refer my hon. Friend to the reply that I gave some moments ago.
    Mr. King: Is my right hon. Friend aware that February's edition of the authorative motoring magazine Car has tested 12 cars on a price-quality audit? No. 10 was a Mercedes-Benz, No. 9 was a Citroen, No. 8 was a Toyota, No. 3 was an Audi, No 2 was a British-built Ford

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    Fiesta, and the Birmingham-built Metro was at the top of the list? Is that not further evidence that the car manufacturers in the midlands have Vorsprung the world?
    The Prime Minister: Yes. That points to the success of Birmingham and the west midlands as one of the premier car-producing areas in Europe. I congratulate them and wish them well. The west midlands is doing extremely well and the economic forecast is good.

Official Secrets Act
3.32 pm
Mr. Roy Hattersley(by private notice): To ask the Secretary of State for the Home Department if he will make a statement on Government policy on changes to the Official Secrets Act.
The Secretary of State for the Home Department (Mr. Douglas Hurd): I gave the House an account of the Government's intentions in this respect, and of the issues which we are considering, in the debate on the Bill introduced by my hon. Friend the Member for Aldridge-Brownhills (Mr. Shepherd) on 15 January. In my interview for the BBC "Analysis" programme to be broadcast tonight — during which I discuss in general terms the balance to be struck between the obligations of civil servants and the public's right to know—I set out again some of the ground which we are covering in our review of these matters. In particular, I gave examples of different types of information which might or might not require the protection of the criminal law. The analysis I offer is in accordance with the Franks report and has been common ground since 1972.
As the House knows, we hope to publish our proposals in a White Paper in June, and the House will have an opportunity to debate those proposals before the summer recess. My interview tonight—a full transcript of which I propose to place in the Library of the House—gives no details of our proposals.
Mr. Hattersley: Does the Home Secretary recall that during the dabate on official secrets 13 days ago he claimed that the Government had not yet decided on a new policy? He then went on to dismiss and deride as silly the idea that he or the Government should describe their interim conclusions. Why has he now agreed to say in a broadcast what he refused to say in the House? Does he not realise that by announcing on the BBC, rather than in the House, that the Government do not support the parliamentary oversight of the security services he is guilty of arrogance, which amounts to contempt or to bone-headed stupidity? Will the right hon. Gentleman begin by telling us which it was?
Does the Secretary of State also understand that the central theme of his broadcast — the division of Government information into different categories of sensitivity—is so near to the principle of the Shepherd Bill, the Protection of Official Information Bill, that, had he made his position clear a week last Friday rather than last night, the passage of the Bill through the House would have been absolutely irresistible? We assume that that is why he chose to say it on the radio rather than in the proper place, which is the House.
How many of the ideas that the Home Secretary advanced in his broadcast were canvassed in those parts of his Commons speech which he first circulated to the press and then cut out or had cut out of his speech before it was delivered?
Finally, why does the Home Secretary demean himself in all these ways to pander to the Prime Minister's obsession that the security services are her personal and private property?
Mr. Hurd: In the interview tonight I simply repeat the arguments that I used in the House when we debated the
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supervision of the security forces a year ago when the right hon. Gentleman had different responsibilities — [Interruption.] On Friday 15 January we were discussing the Official Secrets Act. The right hon. Gentleman is talking about the supervision of the security services. If he looks up what I said in the debate when we discussed that particular matter, he will see that the two are the same.
In our debate on 15 January I sketched out the areas that the Government, and then the House, would need to define for protection from the criminal law. That is exactly what I shall do again in the broadcast tonight. I am not defining Government proposals in any detail. If the right hon. Gentleman and the House were able to establish that I was doing that, I would indeed be guilty of discourtesy to the House. When he, or any hon. Member who is interested, looks at the full transcript of the interview, he will see that I did not do that.
Mr. Richard Shepherd: How will my right hon. Friend canvass the views of the House in respect of ministerial certificate and public interest defence?
Mr. Hurd: My hon. Friend has written to my right hon. Friend the Prime Minister putting forward one suggestion. I am anxious, in the interval that exists now, before we publish the White Paper, when we are completing our own review and thereafter when the House will debate the White Paper, to obtain the views of as many right hon. and hon. Members as possible. I do not think that they will be particularly slow in putting them forward.
Mr. Merlyn Rees: The Home Secretary says that he is anxious to discover the views of a wide variety of people on the various issues with which I understand he did not deal in the broadcast, about methods of classification, going to the courts and so on. Why not formalise that before the White Paper so that people can perhaps appear before a Select Committee on very difficult issues? That would save time and enable the Government to act with all-party support.
Mr. Hurd: The right hon. Gentleman put forward that suggestion in our debate. My feeling, which has been reinforced since then, is that the sensible and logical way to proceed is for the Government to set out their proposals in the White Paper and then for the House to debate it. But in the background to that there will be a continuous exchange of views and ideas, such as the right hon. Gentleman favours. Anyone who looks at the transcript of the "Analysis" broadcast will see the stress that I constantly put on the responsibility of the House in deciding these matters.
Mr. Cranley Onslow: Does my right hon. Friend expect that the Committee stage of any legislation which might result from the White Paper and the subsequent debate will be taken on the Floor of the House?
Mr. Hurd: We have not got as far as that, but I take account of the implication of my right hon. Friend's question.
Mr. David Steel: Are the presss reports correct that the Home Secretary proposes to divide official information into roughly three categories? If so, is that not exactly the same as the principle of the Shepherd Bill which he was so determined to defeat?
Mr. Hurd: In the interview tonight I draw on the basic analysis which stems from the Franks report. I do not put forward detailed proposals; I set out an analysis which has been common ground for a long time. It was not on those grounds that we disagreed with the Bill of my hon. Friend the Member for Aldridge-Brownhills (Mr. Shepherd).
Mr. John Wheeler: Will my right hon. Friend comment on the accuracy of the statements made in the BBC news release yesterday, which has been widely reported in one leading national newspaper of record?
Mr. Hurd: It may be that which has led the right hon. Member for Birmingham, Sparkbrook (Mr. Hattersley) astray. I was somewhat surprised to read, when I was told of this yesterday, that, according to the BBC handout, I was tonight going to talk for the first time in detail about the forthcoming White Paper. Any listener who tunes in tonight in that expectation may well ask for his licence fee back.
Mr. Nicholas Soames: Will my right hon. Friend go further than that and completely ignore the vapourings of the right hon. Member for Birmingham, Sparkbrook (Mr. Hattersley)? Will he roundly condemn the double-handed attitude of the BBC in so disgracefully releasing a false prospectus about his performance tonight?
Mr. Hurd: I have commented on the BBC. The right hon. Member for Sparkbrook has to bestir himself; we understand that. The immediate threat may have passed but he has to keep agile and on his pins. I do not blame him for that. I just think that it would be sensible if he were to establish all the facts and looked at the transcript before preparing his adjectives on the matter.
Mr. D. N. Campbell-Savours: Is there not a strange inconsistency in the Government's position in that they can ban a programme, "My Country, Right or Wrong", which contains contributions from a number of hon. Members, including myself—[Interruption.] Yes, our contributions were banned — while, on the other
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hand, the Home Secretary can take part in this programme, and all this information, which is probably very little different from the areas that I was discussing, can be included and transmitted?
Furthermore, can we have an assurance that when the Minister finally publishes his proposals for reform of the law it will enable us to find out whether it is true that Britain's security services worked with the American security services to undermine the position of Gough Whitlam in Australia?
Mr. Hurd: I have no intention of answering the second point.
On the first point, I do not want to humiliate the hon. Member, but I do not think that it was because of his contribution that action was taken against the programme that he mentioned.
Mr. Jonathan Aitken: I congratulate my right hon. Friend on his spirited public interest defence of the leaks in tonight's programme, but will he not understand that there is at least an appearance of illogicality between the position that he took up at the Dispatch Box in the debate of 15 January, which resembled that of a Trappist monk unable to say a single word about the Government's plans on official secrets law reform, and the apparent revelations in tonight's broadcast? If my right hon. Friend goes on like this, he may be up on a charge under section 2.
Mr. Hurd: No. My hon. Friend has laboured that a little, as he did on the wireless this morning. I will simply ask him, when he has the time, to look at the transcript in the Library and to compare it with my speech at columns 585–86 of Hansard on 15 January. He will see similar thoughts there, a description of the area that must be defined and the terrain which must be covered.
Several Hon. Members rose—
Mr. Speaker: Order. I must have regard to the fact that we have business questions, a statement, a ballot for notices of motions and other business before the Merchant Shipping Bill.

Business of the House
3.42 pm
Mr. Neil Kinnock: May I ask the Leader of the House to state the business for next week?
The Lord President of the Council and Leader of the House of Commons (Mr. John Wakeham): Yes, Sir. The business for next week will be as follows:
MONDAY 1 FEBRUARY — Timetable motion on the Education Reform Bill.
Second Reading of the Farm Land and Rural Development Bill [Lords].
Remaining stages of the Multilateral Investment Guarantee Agency Bill.
TUESDAY 2 FEBRUARY — Remaining stages of the Public Utility Transfers and Water Charges Bill.
Motion on the Industrial Training Levy (Engineering Board) Order.
WEDNESDAY 3 FEBRUARY—Remaining stages of the Licensing Bill.
Remaining stages of the Welsh Development Agency Bill.
Motion on the International Development Association (Eighth Replenishment) Order.
THURSDAY 4 FEBRUARY—Debate on the White Paper on "Human Fertilisation and Embryology: a Framework for Legislation" (Cm. 259) on a motion for the Adjournment of the House.
FRIDAY 5 FEBRUARY—Private Members' Bills.
MONDAY 8 FEBRUARY—Progress on remaining stages of the Employment Bill.
Mr. Kinnock: The Education Reform Bill has been in Committee for only 80 hours, during which time members of the Committee have dealt with 40 clauses and two schedules of the Bill's 146 clauses and 11 schedules. There has clearly been no filibuster. The Government are now guillotining the debate on the Bill, so I want to tell the right hon. Gentleman that there has never been a less justifiable act of gagging of any education legislation that has come before the House. We shall oppose it completely.
Following the Government's decision to cover up the Stalker/Sampson report, when will there be a debate in Government time to provide the Attorney-General and the Secretary of State with the opportunity to try to justify their decision not to take proceedings on the basis of evidence that the course of justice was being perverted?
In view of the public anxiety about the crisis of under-funding in the Health Service, will the Leader of the House inform us of when we will have an opportunity to debate the public expenditure White Paper?
As the Minister of State, Home Office appeared, in the debate last night, to contradict an earlier undertaking, may we have an assurance from the right hon. Gentleman that, in addition to the debates on Report and Third Reading of the Immigration Bill, we will, in the near future, also have a general debate on the immigration rules?
Can the Leader of the House confirm that the Government are conducting an internal review of child benefit? Will he arrange for an immediate statement on the nature of any review and its terms of reference, and on whether the Government are considering the taxation of child benefit?
As this oil-producing and exporting country now has the worst balance of payments and balance of trade deficit
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since the oil crisis year of 1974, will the Leader of the House provide time in the near future for a debate on the economic and trading position of Britain, given that our loss of domestic and international markets continues unabated?
Finally, will the right hon. Gentleman tell us when, at last, we shall have a debate on televising the proceedings in this place?
Mr. Wakeham: The right hon. Gentleman asked me seven questions, and I shall do my best to answer them.
First, the right hon. Gentleman raised the issue of the Education Reform Bill timetable motion. I recognise that there is a certain ritual about these things, but perhaps the right hon. Gentleman could look back at his own words on 20 July 1976, on a similar occasion. The position is that, up to lunch time today, the Committee has sat for about 84·5 hours and considered about 40 clauses of a Bill containing 147 clauses and 11 schedules. As I said, I shall table the timetable motion later today and it will be seen, from the generous amount of time allocated for the remainder of the Bill, that it is the Government's intention not to curb debate but to ensure that all parts of the Bill are fully discussed.
The right hon. Gentleman asked about the position in Northern Ireland and the Attorney-General's statement last week. I have nothing to add, except to say that my right hon. Friend the Secretary of State for Northern Ireland will make a statement to the House on the matter. I think that we should have that first and then see how best to proceed.
The right hon. Gentleman asked about the public expenditure White Paper. I believe that the Treasury and Civil Service Select Committee will wish to report on it, and it will be for the convenience of the House for the debate to take place when its report is available.
With regard to the immigration rules, I confirm what I said during business questions last week. There will be a debate on the rules separate from the other debates, before they come into effect, so that we can hear the views of the House.
I have nothing to say about child benefit and taxation. It is getting towards the season of the year when these matters are not discussed by me or by anyone else in the Chamber, but I shall refer the right hon. Gentleman's point to the Secretary of State.
I cannot promise an early debate on the economic situation, but the right hon. Gentleman will realise that trade figures are not the only economic indicator at which we should look. I draw his attention to the falling levels of unemployment and inflation and to the record growth that the country is experiencing—
Mr. Kinnock: Falling savings, falling investment levels, falling production levels.
Mr. Wakeham: The right hon. Gentleman will be able to make his own points in his own way. I am trying to answer his seven questions, and I shall continue to do that.
Lastly, the right hon. Gentleman asked about the television debate. I told him last week that it would be held on Tuesday of the week after next, and that is still my intention.
Sir Peter Emery: When my right hon. Friend introduces the timetable motion, will he consider whether he can follow the guidance of the Procedure Committee

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and try to ensure that every clause of the Education Reform Bill is debated before it leaves Committee? If he could do that he would go a long way towards meeting some of the requirements that the Procedure Committee has asked of this House.
Mr. Wakeham: I take on board what my hon. Friend has said. I pay tribute to his work and that of the Procedure Committee. I intend to see that every clause of the Bill is debated in Standing Committee.
Mr. James Wallace: Will the Leader of the House make a statement to the House next Thursday on the instructions given by the House to the Committee of Selection for setting up the Scottish Select Committee?
Will there be a debate in the House on the prayer tabled by my right hon. and hon. Friends about school closures in Scotland, on which there is to be a statement after business questions?
The Leader of the House said that there was always some ritual about guillotine motions. Will he accept that this case is different because I am informed that it is not Opposition Members who have been using delaying tactics, but rather that a great deal of time has been clocked up by Conservative Members in an effort to allow a guillotine motion to be imposed rather than make progress and discuss the substantive issues?
Mr. Wakeham: The hon. Gentleman asked me, first, about the Scottish Select Committee. Discussions are being carried out through the usual channels, and I hope that we can make progress when they are concluded. The debate for which he asked is a matter best discussed through the usual channels.
I have not accused anyone of filibustering during the proceedings in Committee on the Education Reform Bill. I intend to see that the whole Bill is properly debated, and that is why there will be a generous amount of time for the remaining part of the Committee stage.
Mr. Cranley Onslow: When does my right hon. Friend expect to bring in a motion for the re-establishment of the Select Committee on Procedure so that that Committee can consider the difficult question of hon. Members who seek to get themselves suspended?
Mr. Wakeham: Discussions are taking place through the usual channels to discover when it would be convenient to set up the Select Committee on Procedure. There are a number of outstanding issues from the previous Procedure Committee. I am looking for an opportunity for a debate on procedure in the relatively near future.
Mr. Eddie Loyden: Will the Leader of the House ask his right hon. Friend the Secretary of State for Transport to make a statement in the House next week on the proposed sale of Crosville Motor Services, in view of the wide concern expressed by those employed in the company?
Mr. Wakeham: I shall certainly refer the matter to my right hon. Friend.
Mr. Teddy Taylor: Has my right hon. Friend seen this morning's trade figures, which show a further deterioration in Britain's trade with the EEC in comparison with an improvement elsewhere? As that
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deficit in manufacturing trade is now £11 billion—more than double the total deficit on current account—would it not be helpful for the Minister of Trade and Industry to make a statement about the implications of our chronic trade with the Common Market for the future of the Government's splendid economic policies?
Mr. Wakeham: As I said to the Leader of the Opposition, the trade figures are only one economic indicator. Although the figures may be disappointing, many other figures are showing excellent progress. I shall refer the matter to my right hon. and learned Friend the Minister of Trade and Industry.
Mrs. Margaret Ewing: Given the continued widespread concern on both sides of the House and in Scotland about the future of Britoil, is it not time that the Government allowed the House to debate the position pertaining to that organisation, rather than hon. Members having to seek information through questions or letters? Is it not time that the whole subject was aired in the House?
There will be a short debate on agriculture next week, but is it possible for the House to debate the importance of agriculture to our communities, particularly in light of the problems facing so many producers—particularly, at the moment, pig producers—as a result of the need for the devaluation of the green pound?
Mr. Wakeham: I take on board the hon. Lady's request for a debate on Britoil, but I cannot promise one in the near future. I agree with the hon. Lady that there is a case for a general debate on agriculture, and I hope to arrange one in the not too distant future.
Sir Trevor Skeet: Has my right hon. Friend had an opportunity to read the House of Lords Select Committee report on space policy? Has he noted that it recommends an expenditure up to £200 million on space matters? Will he arrange an early debate so that that may be discussed in this place?
Mr. Wakeham: I have not read that report as well as my hon. Friend has read it. I listened to what my right hon. Friend the Prime Minister said a few minutes ago about our position on space policy. I cannot add to what she said. I regret that I cannot see any chance of a debate on the subject in the immediate future, but I shall bear it in mind.
Mr. Brian Sedgemore: Will the Leader of the House arrange for the Secretary of State for Education and Science to make a statement, before Monday's debate on the guillotine motion, on the future of ILEA and on whether he intends to introduce amendments to abolish it? Will the right hon. Gentleman also arrange for time for the Secretary of State for Education to make a statement on the bizarre position of Mr. William Stubbs, ILEA'S education officer, who, having been bitterly opposed to the Bill, has just resigned to work for the Secretary of State in implementing its provisions — although they may seriously damage the future of education in the capital?
Mr. Wakeham: I cannot promise a statement in the House on ILEA, but I shall refer the matter to my right hon. Friend the Secretary of State. Of course, the issue will be extensively discussed in Standing Committee. My right hon. Friend offered Mr. Stubbs his appointment on merit. Mr. Stubbs served ILEA for 11 years, and said himself that it was time for a career move.
Sir Ian Lloyd: I listened carefully to my right hon. Friend's reply to my hon. Friend the Member for Bedfordshire, North (Sir T. Skeet), the Chairman of the Parliamentary and Scientific Committee, and to my right hon. Friend the Prime Minister's reply to the question about space. In that reply she suggested that space policy was to some extent a function of the problem of allocating resources across the whole spectrum of science. Does this not reinforce my plea for a debate on this major and central national question, and may we have that debate soon?
Mr. Wakeham: I should like to be more forthcoming to my hon. Friend, because I know that he considers this to be an important issue. It is difficult at this time of year to find a day for such a debate, but I promise him that I shall find one as soon as I can.
Mr. Andrew F. Bennett: Will the Leader of the House confirm that his guillotine on the Education Reform Bill has nothing to do with the proceedings in Committee? Is it not really an attempt to gag debate when the Bill returns to the Floor of the House on Report?
The right hon. Gentleman said that he would provide a generous amount of time for that Bill. Can he tell us how much time he has provided for debate on the argument between the right hon. Members for Chingford (Mr. Tebbit), for Henley (Mr. Heseltine) and the Secretary of State about the future of ILEA? Will he confirm that that is a major issue and that there ought to be time to debate it? Or is it true, as rumour has it, that the Secretary of State is now running away from the confrontation?
Mr. Wakeham: I cannot comment on rumours. The timetable motion that I am proposing will be tabled later today, and the hon. Gentleman will see from it that the time allocated is generous.
Mr. John Browne: Does my right hon. Friend accept that our participation in the space race is vital for the future of our nation, and that, if we are to compete with the Soviet Union, the United States and Japan, we must work effectively with our European partners in that race? Important financial decisions are being made in the European Space Agency on 10 February this year, only a few weeks from now. May I reinforce the pleas of my hon. Friends for an urgent debate on the subject, when our national space policy can be made clear?
Mr. Wakeham: I recognise my hon. Friend's strength of feeling. However, I can add nothing more except that resources devoted to space must, of course, be considered along with those devoted to other research matters.
Mr. Greville Janner: Will the Leader of the House be good enough to consult his right hon. Friends the Secretaries of State for Social Services and for Education and Science to see whether we could have a statement from one of them on the great shortage of resources for special schools?
I shall be visiting Weston Park special school in my constituency tomorrow. The staff of that school will be deeply anxious to know whether action is to be taken to help the school, and other schools like it, which are suffering from shortages of physiotherapists and other resources that they badly need.
Mr. Wakeham: I recognise the hon. and learned Gentleman's concern. In my experience, resources are not the only question involved, but I shall refer the matter to my right hon. Friend.
Sir Anthony Grant: Is my right hon. Friend aware that Thursday's business, the debate on Warnock, was known to doctors in my constituency as early as Monday or Tuesday? Surely hon. Members and Parliament are entitled to know the business at least at the same time as outside bodies. As I understand that this is probably the result of a leak from the DHSS, will my right hon. Friend cause an inquiry to be made into the leak and thus ensure that the rights of Members of Parliament are safeguarded?
Mr. Wakeham: I deprecate any such leak. It is right that the House should be told first about business. However, the business of the House was not finally settled until the Cabinet meeting this morning, so any rumours that might have been about were just that—rumours.
Mr. Max Madden: Will the Leader of the House arrange for the Secretary of State for Social Services to come to the House next Wednesday when Health Service workers will be taking part in a day of action, which is a major indictment of the Government's handling of the National Health Service and shows how unsafe the NHS is in Tory hands? Will he arrange for an early debate on the National Health Service so that the cuts that are threatened in virtually every part of the country can be debated fully and the Government called to account?
Finally, as the right hon. Gentleman has now acquired Lord Whitelaw's mantle of the Prime Minister's candid friend, will he tell her that the vast majority of the British people will never forgive her if, instead of providing the necessary funds to rebuild and improve the National Health Service, she plots and conspires to divide those who dedicate their lives to patient care?
Mr. Wakeham: The Government are continually providing more resources for the National Health Service. The question is not the amount of money that is put in, but the output that we get from it, and that is where we are looking for improvements.
Sir Philip Goodhart: When my right hon. Friend draws up the motion for the debate on Tuesday week on televising the House, will he remember that some of us want to keep the cameras out of this debating Chamber, but would welcome them in Select Committees? Will he tell us whether we can have a separate vote on televising Select Committees?
Mr. Wakeham: That matter is not entirely for me, because the debate will take place on a Back-Bench motion. However, I shall consult to see whether I can get a motion that is as generally acceptable to the House as possible.
Mr. William O'Brien: Will the Leader of the House discuss with his colleague the Secretary of State for Social Services the request from Wakefield district health authority for an inquiry into the proposal to introduce the cook-chill food system into hospitals in my constituency? Will the right hon. Gentleman take it from me that tensions are running high and that there are problems? Will he ensure that there is a debate in the House on the introduction of the cook-chill meal system

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into those hospitals, where only a few years ago an outbreak of food poisoning resulted in 29 deaths? This matter is important, so will the Leader of the House take note of the problems of hospitals in my constituency?
Mr. Wakeham: I recognise what the hon. Gentleman says, but I cannot promise a debate next week. The issue that he has raised seems more a matter for the local management to sort out. However, I shall certainly refer it to my right hon. Friend.
Mr. Richard Tracey: Is my right hon. Friend aware of the gratitude of Conservative Members, and parents throughout the country, for the fact that he has put down a timetable motion on the Education Reform Bill to stop the aimless meanderings of the Labour party in Committee upstairs? Is he further aware that hon. Members representing London constituencies wish to discuss the future of education for children in inner London?
In passing, will the Government tell Mr. William Stubbs, the recently resigned chief education officer of the Inner London education authority, that they do not consider him to blame for the shambles in the ILEA, but, rather, the Labour politicians on the other side of the river?
Mr. Wakeham: I regret that I have not heard much of the debate in the Standing Committee. I am not accusing anybody of filibustering but just hoping that during the rest of the Committee stage we can make sure that all parts of the Bill are discussed and that the important matters that my hon. Friend has raised are properly debated.
Mr. Tony Banks: Will the Leader of the House tell us how long we will have for the debate on the private Member's motion on the televising of Parliament next Tuesday? Will there be a three-line Whip for the Government Benches? Will the motion be phrased in such a way that it will command the support of all hon. Members? I suggest to the Leader of the House that the best way of achieving that would be to have a dedicated television channel, paid for by Parliament, because that would get us round the problem of editing. Will we have the sort of motion that will allow us to amend it in that fashion, or will it come in such a way as to give us an opportunity to vote?
Mr. Wakeham: I can answer one part of the hon. Gentleman's question. It will be a full day's debate. The question of Whipping is not discussed from this Dispatch Box. The form of the motion and whether it is amendable is not entirely a matter for me, but I take on board what the hon. Gentleman has said.
Sir Hector Monro: Will my right hon. Friend have urgent talks with the Home Secretary about another money resolution for the Firearms (Amendment) Bill? Is he aware that we are unable to table any amendments on compensation unless the money resolution is altered? There will be great difficulty in starting the Committee stage unless we have some assurance on that point.
Mr. Wakeham: I promise my hon. Friend that I shall look into that matter.
Mr. Bob Cryer: May we have a statement next week from the Treasury on the way in
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which it is squeezing the Department of Transport over the Settle-Carlisle railway? The Department of Transport is trying to blame local authorities for not providing sufficient financial contributions for the line. That magnificent railway, which has been running well and showing a massive improvement in passenger revenue, and which is an important artery, is being set up for the chop by the vicious attitude of the Treasury, which is trying to put the blame on local authorities which themselves are hard pressed for money. The truth is that the Government are to blame for not providing enough resources to keep this magnificent and beautiful railway in existence.
Mr. Wakeham: I recognise the hon. Gentleman's interest in, concern for and knowledge of that railway. I do not believe that the position is capable of the analysis that he has put on it, but I shall refer the matter to my right hon. Friend.
Mr. Michael Colvin: My right hon. Friend may recall receiving a copy of a letter that I addressed to the Secretary of State for Transport asking for a debate in Government time on the state of our civil aviation industry. The matter is important, but one item on the national agenda needs the House's urgent attention — the issue of night flights out of Gatwick and Heathrow. As the Secretary of State's consultative document is out for discussion and my right hon. Friend will make a decision on his proposals within the next few weeks, ideally we should like those proposals to be debated in the Chamber and to be voted upon. Although that may not be possible, surely the House should be given the chance of debating what the Secretary of State has in mind before he reaches a decision.
Mr. Wakeham: I cannot promise my hon. Friend an early debate, but I shall certainly refer the matter to my right hon. Friend. It has just occurred to me that my hon. Friend might try his luck in an Adjournment debate on the subject.
Mr. George Howarth: Given that the Leader of the House accepts that there has not been a filibuster on the Education Reform Bill, and given the widespread feeling in the House and elsewhere about the Bill's implications, what possible justification can the right hon. Gentleman have for seeking to apply the guillotine?
Mr. Wakeham: As I have already said, the main purpose of the guillotine is to ensure that there is an orderly debate on all parts of the Bill.
Mr. Harry Greenway: Will my right hon. Friend arrange for an early debate on efficiency in local government to enable me to raise the problems of hundreds of my constituents who this week received a summons from Ealing council to appear in court next month for non-payment of rates, even though they have paid their rates and received a receipt from Ealing council for that payment, including for the unwanted 65 per cent, element, in addition to which they are asked to pay £14·95 for the service of the rate summons? That has caused immense distress as well as anger to many people.
My constituents are also concerned about the sum of £15,000 that Ealing council is currently spending on a gay and lesbian rights officer to promote positive images of homosexuality. Will the debate be broad enough to enable

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me to express my constituents' wish to see clause 28 of the Local Government Bill placed firmly on the statute book to stop all that?
Mr. Wakeham: I am sure that we will find an opportunity for my hon. Friend to make his points in various ways. However, I am afraid that I cannot promise him an early debate next week on those specific issues.
Mr. Dennis Skinner: Has the Leader of the House seen early-day motion 521, which deals with the escalating costs of No. 10 Downing street, as opposed to the amount spent on the National Health Service?
[That this House condemns the Government's treatment of the National Health Service; draws attention to the fact that, if the increase in National Health Service expenditure since 1979 had been at the same rate as the increase in the cost of maintaining No. 10 Downing Street, the National Health Service would this year receive funds in excess of £28 billion, as compared to the £21 billion actual expenditure; and believes that this proves that the Government has looked after itself rather better than it has the National Health Service workers.]
Is the right hon. Gentleman aware that the cost of maintaining No. 10 Downing street has quadrupled since the Prime Minister went there in 1979, that if the same rate of expansion had been applied to the National Health Service it would this year have received £28 billion, and that if a comparison was made with the amount of money that has been spent on entertaining—a euphemism for boozing—at No. 10 Downing street the amount would have escalated even higher? Fancy paying that amount of money for gin and tonic while writing his Private Eye column.
Mr. Wakeham: One thing that I can say in answer to the hon. Gentleman is that any money spent at No. 10 Downing street is money well spent and that the country gets value for it. I am not so sure that that applies to all parts of the Health Service.
Mr. Tony Marlow: A fortnight ago a complete unknown managed to secure a place on the front pages of our national newspapers and on our television screens by getting himself booted out of the House. This week he had a more notorious imitator. What does my hon. Friend plan to do about the accelerating tendency for third-rate operators on the Opposition Benches to try to curry favour with their local management committees by disrupting our proceedings? Will he bear in mind that in the Division earlier this week the Leader of the Opposition, who had the guts and decency to support Mr. Speaker, had his vote cancelled
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out by one of his Front-Bench spokesmen, the hon. Member for Bootle (Mr. Roberts)? That is one of the difficulties with which the House is faced.
Mr. Wakeham: I am sure that both sides of the House deprecate bad order and behaviour. I do not believe that it is my task to give additional publicity to such antics, but I shall bear in mind what my hon. Friend said, because we want to keep them to a minimum.
Mr. D. N. Campbell-Savours: May I ask a question about the administration of government? Do the Cabinet Office, the Cabinet Secretary and the Prime Minister ever issue guidelines to Ministers, not so much on the content of parliamentary answers, as on the way in which they are answered?
Mr. Wakeham: I do not believe that that question arises out of business questions. However, if the hon. Gentleman cares to put down a substantive question I shall do my best to give him a considered answer.
Mr. Tim Smith: Who will propose the motion on the televising of the House? Will my right hon. Friend have a word with whoever it is about the televising of Select Committees, which was referred to by my hon. Friend the Member for Beckenham (Sir P. Goodhart)? Although it seems that, unfortunately, there may not be a majority in favour of televising the Chamber, there may be sufficient common ground to get an experiment going in Select Committees.
Mr. Wakeham: I take my hon. Friend's point and I am sure that the debate will be wide enough to cover Select Committees as well as the Chamber. The question of who will propose the motion will emerge in a way that I do not think I could properly explain.
Mr. Tom Clarke: Does the Leader of the House recall that last week, in response to my hon. Friend the Member for Holborn and St. Pancras (Mr. Dobson), he undertook to have a word with the Secretary of State for Social Services about the present crisis in social services departments, arising mainly from the problems of the NHS and calculations for the social fund? Is the Leader of the House aware that since then the all-party panel on personal social services, chaired by the hon. Member for Mid-Kent (Mr. Rowe), has asked for a meeting with the Secretary of State because it feels so strongly about the matter? Will the right hon. Gentleman tell the House whether he had any success, and whether we will have a debate on these very important matters?
Mr. Wakeham: I cannot promise a debate in the near future. If an all-party delegation is to see my right hon. Friend the Secretary of State, it would be best to leave matters there at this stage.

School Closures (Scotland)
4.13 pm
The Secretary of State for Scotland (Mr. Malcolm Rifkind): With permission, Mr. Speaker, I will make a statement about school closures in Scotland.
Regulations were laid yesterday which had the effect that, where an education authority proposed to close, change the site of, or vary the catchment area of, any school where the number of pupils at the school is greater than 80 per cent, of its capacity, that proposal shall be referred to the Secretary of State for his consent.
The House will be interested to know that since 1885 the Secretary of State for Scotland has had the power to review all school closures. Until 1981 any proposal to close any school in Scotland had to come to the Secretary of State for his consent. At that time, the House approved a change in the regulations, which left two categories of school for which the consent of the Secretary of State was required if a closure proposal was made — denominational schools and rural schools where the alternative was more than a certain distance from the school to be closed.
We all recognise that a number of education authorities are currently faced with substantial overcapacity in their schools. Understandably, some authorities are contemplating proposals that will involve the closure of a considerable number of schools. This will allow them to use their resources more effectively.
However, that task must be carried out in a balanced and sensitive manner. It is a clear priority of the Government—I would hope of both sides of the House —that education should reflect the interests of children and the wishes of their parents. The Education (Scotland) Act 1981 already places a duty on the Secretary of State and education authorities to ensure that pupils are educated in accordance with parental wishes.
It is therefore reasonable to expect education authorities to take into account parent demand in considering proposals for school closures. Clearly, no one can be surprised when an authority proposes to close half-empty schools. But where a school is full, or nearly full, and by that fact demonstrates that it is good value for money to its community, I believe that it is only right that there should be scope for further review of a proposal to close such a school.
Mr. Donald Dewar: In his statement, the Secretary of State referred to the need for a balanced and sensitive approach. Would he like to comment on the fact that Strathclyde education authority had no intimation of the regulations and that there was no consultation of any kind? The education authority had to gather what it could from press sources. When it finally sent a car to Edinburgh to obtain a copy this morning, it was told that it could have only a photocopy because the Department itself had only one copy.
As a matter of etiquette in the House, is it not deplorable that my hon. Friend the Member for Paisley, North (Mr. Adams), whose constituency will be closely affected by the decision, has not even been done the courtesy of being sent a copy of the Prime Minister's letter to the headmaster of Paisley grammer school? Surely that would normally be the order of the day. Is this a balanced and sensitive way in which to deal with the matter?
This is an extraordinary initiative, with serious implications for the way in which we conduct our business
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—implications that go far beyond decisions on any one school. The matter has been presented in the press, and, I suspect, by the Scottish Office machine, as a dramatic personal intervention by the Prime Minister. More fairly, it can be seen as high-handed and arbitrary and designed simply to court popularity. Is a genuine review about to take place, or does the Prime Minister's letter to the headmaster of Paisley grammer school prejudge the issue? It is very important to know that. If it does prejudge the issue, what does the Prime Minister know about the schools in Paisley? What does she know of Merksworth, Stanely Green, St. Aeldred's, St. Mirin's and St. Margaret's? What does she know about their catchment areas and the likely knock-on effect of the apparently arbitrary decision that she has made about Paisley grammar school? Will she at least ensure that there is a ministerial visit before decisions are made about the future of those schools? I do not mean a ministerial visit to Paisley grammar school alone but to the other schools, too. If an education authority had made a decision on such an arbitrary basis, without any proper consultation, it would almost certainly be in the courts—and rightly so.
Is it not a very dangerous precedent that a school should be singled out at a distance of almost 500 miles on the basis of the number of letters received by Ministers? Why should the balance of responsibility, as carefully adjusted by the Government in 1981, now be altered without consultation or rational debate apparently on impulse and on the narrow calculation of political advantage?
This is not an argument about one school, and I note that the Secretary of State did not mention a particular school. The fate of Paisley grammar is a legitimate matter of concern for the community itself, but the decision should be made in the proper context. Even if we took the Government's view on the merits of the matter, we would remember the old and relevant adage that hard cases make bad law. It is outrageous that we should be legislating apparently on the whimsical basis that one particular school has caught the attention of the Prime Minister. How many schools are likely to be referred to the Secretary of State as an immediate result of the passage of the regulations, and are they all in Strathclyde?
What criteria will be applied by the Secretary of State? In the regulations he refers to the percentage capacity of the school, but there must be other wider-based considerations — social considerations, educational priorities and the interests of the communities involved.
Will the right hon. and learned Gentleman guarantee that there will be consultation with all interests before he makes his final decision, and that, at least, he will meet the criteria set down for consultation that is imposed on local authorities by the 1981 regulations?
What will the right hon. and learned Gentleman say to the parents of children whose schools may be threatened by the impact of his decisions, and which may face closure as a result of any reprieve on which he decides? Will they be consulted in the process?
The reference to the maximum number attending in any one of the previous 10 years appears to be linked to the calculation of capacity. It has been put to me by a number of senior people in the Education Department that it is possible that a school which in any one of the previous 10 years had met that criterion would be automatically referred to the Secretary of State under the regulations. I

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do not think that is the position, but for the avoidance of doubt—it would bring many schools immediately within his authority—we must have an answer.
This is a sad way to conduct government. It will maximise confusion and bitterness when some schools survive and others do not; arbitrary dividing lines are always cruel. It is government by impulse and by whim, and I am sad to say that that is normally the mark of an authoritarian regime.
Is the Minister concerned—the Under-Secretary with responsibility for education may laugh—by what today's The Scotsman said:
"If, as Mr. Forsyth said, closing Paisley Grammar would be an act of vandalism, then the regulations devised to prevent it are a greater abuse of local democracy."
The Glasgow Herald described it as:
" A dismal day for what remains of local democracy … unacceptable arbitrary assumption of power …"
The Evening Times refers to,
"The Alice in Wonderland world of the Scottish Office."
It further spoke of
"The naked demonstration of the Prime Minister's hatred of local government."
I shall give the Minister one last quote from the debate on primary education in Scotland and ask him to comment. It says:
"If education authorities are properly to fulfil their accountability to the public, they must take whatever steps they consider necessary to rationalise the provision of school education. Therefore, schools closures, which occur in urban as well as rural areas, should be considered as part of a larger canvas and should not be seen as a discriminating or random measure.
We are committed to the principle of reducing direction from the centre". — [Official Report, 4 April 1985; Vol. 76, c. 1367.]
That was a quotation from the then Minister responsible for education, the hon. Member for Eastwood (Mr. Stewart), who, I suspect, is here to support something that is discriminating and random in its scope. What he said on that occasion is as it should be, but as it no longer will be. The conscience of the right hon. and learned Gentleman should be in tatters. I suspect that he may have been told and not consulted.
Mr. Rifkind: I am astonished by the synthetic indignation of the hon. Member for Glasgow, Garscadden (Mr. Dewar). He has tried to suggest to the House that this is an attack on local democracy, when the powers represented by the regulations tabled yesterday give the Secretary of State less power in respect of school closures than my predecessors had for 100 years, and, indeed, less than was held during the period of office of the Labour Government.
If that minor extension referred to in the regulations tabled yesterday is an attack on local democracy, we should remember the powers that the right hon. Member for Glasgow, Govan (Mr. Millan) had to require his consent for the closure of any school in Scotland — powers that had existed since 1885. The hon. Member for Garscadden tried to identify the mark of a dictatorial Government. I suggest to him that the mark of a dictatorial Government is a preference for bureaucratic tidiness over the wishes of parents with regard to schools.
The hon. Gentleman asked why the Prime Minister did not send a letter to the hon. Member for Paisley, North (Mr. Adams). The hon. Member for Paisley, North made no representations on the matter, unlike the rector of Paisley grammar school and 2,550 members of the public.
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The hon. Gentleman suggested that the regulations are concerned only with one school. He had the grace to admit subsequently that nothing in the regulations or the treatment identifies a specific school. Indeed, there are almost certain to be other schools that will come within this category.
Mr. Dewar: Is it a genuine review? Has the decision, in effect, been taken?
Mr. Rifkind: I shall come to that in a moment.
Neither I nor anyone else can tell the hon. Gentleman how many schools will be affected. It will be for education authorities to decide in the first instance whether they propose to close a school that is full as a result of the wishes of parents. I hope that it will be relatively rare that an education authority, against the wishes of parents, will even wish to contemplate closing a school that is entirely full. That is a fact that the hon. Gentleman should appreciate.
The hon. Gentleman asked whether any decision had been reached. No decision has been reached because there is a requirement that the education authority, as with other categories of school that fall within this category, must come to its own view. If it is a school of the kind referred to in the regulations, it is submitted to the Secretary of State, as it was for 100 years, including during every period of Labour government.
Sir Hector Monro: Will my right hon. and learned Friend accept that, as one who has had the support of Secretaries of State to retain country schools, both denominational and non-denominational, in my constituency against the wishes of the education authority, I believe that it is right that he has taken back these important powers? Will he elicit from the Opposition whether they want Paisley grammar school kept open? I suspect that, from the manner in which they are talking, they do not.
Mr. Rifkind: I agree with my hon. Friend; there is some confusion as to exactly what the Opposition's position is on this matter. If there is no confusion, no doubt we shall soon discover the answer.
Mr. Archy Kirk wood: It seems entirely crazy to consider listing a school such as Paisley grammar school for closure. I hold no brief for the way in which that decision was arrived at by Strathclyde education authority. The Secretary of State must surely accept that it is far better to leave these consultation processes to the local level to enable democratic decisions to be taken. It cannot be right for Government to come wading in with heavy tackety boots, as they did yesterday, to impose the change in regulations. He must accept that that high-handed behaviour raises all sorts of suspicion in people's minds. For example, if he does not know how many schools are to be caught by these regulations and are now listed for potential closure, how did he know to set the capacity level at 80 per cent? How did he know that it was necessary at all if he does not know the detailed figure, apart from one or two highly publicised cases? How does he know that these regulations are required for the vast majority of other schools that will be covered by them?
Mr. Rifkind: I am puzzled by the hon. Gentleman's question. He prayed against these regulations, I understand, but he now tells us that school closures should

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be left to the education authorities as the final arbiters. I do not know whether the hon. Gentleman takes the same view of the current controls that the Secretary of State has for proposals to close schools in rural areas.
Mr. Allen Adams: As the local Member involved, I extend my thanks to the Scottish press for giving me the letter that the Prime Minister sent to the rector of Paisley grammar school. The Prime Minister did not extend me the same courtesy.
Is the Secretary of State aware of the debate that took place in the House in which, in reply to my hon. Friend the Member for East Lothian (Mr. Home Robertson), who was asking about decision-making in local authorities, the then Minister, the hon. Member for Eastwood (Mr. Stewart), said:
"I appreciate the hon. Gentleman's anxiety, but I believe that the decision must be made by the local authority. It must take account of all the factors involved, and it is responsible to all the electorate of the area."—[Official Report, 4 April 1985; Vol. 76, c. 1365.]
Does the Minister still hold by that or has he changed his mind? Is it simply the case that any local authority that does not agree with his diktat or takes any kind of decision that he does not approve of on any subject at any time will either be abolished, as we have seen in England, or simply have its powers taken away?
Lastly, at any time, did Mr. Andrew Neill, a former pupil of Paisley grammar school and now the editor of The Sunday Times, make any representations to you—
Mr. Speaker: Order. The question is to the Minister, not. to me.
Mr. Rifkind: As the hon. Gentleman started his question by telling us that he has such good relations with the press, he might like to put that question to Mr. Neill himself, and no doubt he will find out.
With regard to the substantive part of the question, as the hon. Gentleman knows, until 1981, in the case of all schools, the consent of the Secretary of State was required before closure could be contemplated. Since 1981, two categories have still required the consent of the Secretary of State — certain denominational schools and certain rural schools. We have added one other narrow category. Therefore, the number of schools that have to come to the Secretary of State before closure is a tiny proportion of the number of schools that had to go to my predecessors in the last Labour Government.
Mr. Allan Stewart: May I congratulate my right hon. and learned Friend on an excellent decision and his speedy response to the representations that he received from my constituents and myself about that particular school, although, of course, his regulations raise a more general point.
Does he agree that the difference between now and 1985 is that in 1985 nobody thought that an education authority would try to close a very popular school as a deliberate political challenge to the parents' charter, which is precisely what has happened? Does he further agree that the longer these questions go on the clearer it becomes that the proposal to close Paisley grammar school is being made on non-educational grounds and basically for political reasons? Is it not the height of absurdity for the hon. Member for Glasgow, Garscadden (Mr. Dewar) to
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demand ministerial visits to schools when at the last Scottish Question Time he denounced the visit of my hon. Friend the Member for Stirling (Mr. Forsyth) to that school as a disgrace and an outrage?
Mr. Rifkind: My hon. Friend is certainly entitled to make that final remark, which I think is entirely valid.
Without commenting on any individual school, I can understand and indeed totally support education authorities which, faced with half-empty schools, are coming to the difficult and painful decisions that are required, which will lead to the closure of a significant number of them. Obviously, if schools are half empty and if, despite the parents' charter, parents do not wish their children to attend those schools, closure may often be a sad inevitability. But it must be sensible, when dealing with schools that are packed to the roof and when parents have expressed an overwhelming desire that their children should attend those schools, that there should be an opportunity to review a decision or proposal put forward by a local authority before a conclusion is reached.
I cannot believe that privately, whatever they may say publicly, hon. Gentlemen can seriously believe in their heart of hearts that it is unacceptable and unreasonable — when the Secretary of State has power to review denominational schools and certain rural schools—that a school which is full and which parents are passionately anxious to have their children attend should be subject to review. That seems to me to be something that should not flow from the ideology or policy of the Labour party. If it does, this is indeed a sad day.
Mr. Norman Buchan: The Secretary of State really must pay a little attention to the truth from time to time. His description of Paisley grammar is totally wrong. He knows perfectly well why there is a high poll in that school. He knows perfectly well why they are fighting against moving to a new school in Merksworth. It is because they would be sharing with kids from working-class housing estates. The Secretary of State knows it very well.
Secondly, he might come to terms—[Interruption.]
Mr. Speaker: Order. I ask that the hon. Gentleman be allowed to ask his question without gesticulations across the Chamber.
Mr. Buchan: Secondly, the right hon. and learned Gentleman might reflect upon the truth when he says he does not know the figures. Every one of us who has looked at the material — and since he has brought in these regulations he had better have looked at the material— knows the figures and knows that 80 per cent, was chosen in order to save Paisley grammar, and nothing else.
Thirdly, he might reflect that there is more than one school in Paisley. There are six non-denominational secondary schools in Paisley. His support for Paisley grammar and the Prime Minister's intervention are condemning the other five. That is the truth of the situation.
Finally, if the Secretary of State wants educational grounds, let him think what effect this disruptive policy has on the whole of comprehensive education in Paisley. The person who raised the question was the Minister himself, who rejected the concept of intervention only in 1985. This has been a squalid and arbitrary intervention by the Prime Minister and her little "Wooden-Top"

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henchman on the Front Bench. Her interference has been increasing, is increasing and ought to be diminished throughout our social, political and educational affairs.
Mr. Rifkind: The hon. Gentleman has yet to explain why a power that was available under all Governments for 100 years is unacceptable when it is reintroduced under the present Government.
Mr. Buchan: I will explain it.
Mr. Rifkind: The hon. Gentleman says that he will explain it. The fact is that he has failed to explain it despite his intervention with my right hon. Friend the Prime Minister and his current intervention. The fact is that the hon. Gentleman may have certain doctrinal objectives when it comes to education, but the Government believe that, when we are dealing with the schools that children attend, the wishes of their parents are a major consideration.
Mr. Eric Forth: On a point of order, Mr. Speaker. I distinctly heard the hon. Member for Paisley, South (Mr. Buchan), from a sedentry position, call my right hon. and learned Friend a liar. I suggest that he should withdraw that.
Mr. Speaker: I did not hear it, but did the hon. Gentleman say that?
Mr. Buchan: I may have said "a numerological inexactitude" when referring to the figures, I know not. The Secretary of State for Scotland was not—
Mr. Speaker: Did the hon. Gentleman use that word?
Mr. Buchan: I will apologise for saying what I believe to be the truth.
Mr. Speaker: Not only apologise, but withdraw it.
Mr. Buchan: I withdraw.
Several Hon. Members rose—
Mr. Speaker: Order. We have two Second Reading debates this afternoon. This issue, as I understand it, is subject to a statutory instrument, which will be debatable. I shall allow questions to go on for a further five minutes, and then we really must move on.
Mr. Bruce Millan: The Secretary of State has behaved in a despicable way. It was his Government who removed the need for school closures to be referred to the Secretary of State and they did so on the hypocritical pretence, as we said at the time, of giving powers back to local authorities. In reality it was to avoid being associated with unpopular and difficult decisions. Over the last few years Ministers have been urging education authorities to go ahead more quickly with school closures. Now we have the Secretary of State and the Prime Minister, who has probably never been in Paisley in her life, intervening in this arbitrary, authoritarian but also highly selective way, leaving all the unpopular decisions still to the local education authority. These regulations are, like the Secretary of State himself—unprincipled and dishonest.
Mr. Rifkind: As they are the regulations which the right hon. Gentleman was happy to administer when he was Secretary of State, what does that make him?
Mr. Nicholas Fairbairn: I am sure that my right hon. and learned Friend will recollect that at one time the then leader of the Labour party regarded
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a week as a long time in politics. Apparently now the time scale has narrowed to 24 hours. Does he not remember that yesterday the Opposition were complaining about the closure of Newbattle, despite the fact that it is practically unattended? It must not be closed because it is unionised. Now they are complaining about keeping open Paisley grammar school — which they probably would not complain about if it were called a comprehensive school — which is full. Does that not demonstrate their ideological hypocrisy and the fact that they are interested not in education but only in a minor ideology in which the people of this country, and certainly the parents of this country, have no interest?
Mr. Rifkind: My hon. and learned Friend is correct. The Opposition find it acceptable that the Secretary of State should have power to require his consent for the closure of schools in all circumstances, but find it an assault on local democracy that he should have power only in limited cases.
Mr. Dick Douglas: Will the Secretary of State reflect a little upon what the Prime Minister said the other day at Question Time when she was asked to meet some nurses? She said that she had an excellent team of Ministers who would meet the nurses initially. In this instance, why has she usurped what has been the normal convention of the House? I hope that all hon. Members will have regard to the Prime Minister's method and approach of writing direct to the headmaster of a school, bypassing the Secretary of State's Office and having no consultation with the local authority. Will the Secretary of State reflect upon his position among this so-called excellent team of Ministers?
Mr. Rifkind: Not in the slightest. I and my colleagues at the Scottish Office decided to introduce these regulations. My right hon. Friend the Prime Minister wrote to the rector of Paisley grammar school, because he had written to the Prime Minister. That seems to be a matter of elementary courtesy.
Mr. Forth: Does my right hon. and learned Friend agree that what is causing the irritation and synthetic anger on the Labour Benches is the fact that the Prime Minister and my right hon. and learned Friend have proved that they are closer to parents' wishes than the local authority in question? Does he further agree that this is a good example of how Conservative Members are prepared to listen to parents and take into account children's interests far more than the doctrinaire Socialists on the Opposition Benches who will sweep aside parents' wishes to fulfil their ideological requirements? Is that not relevant to the future role of our education policy?
Mr. Rifkind: Absolutely. We shall never apologise for, or be embarrassed by, giving the greatest attention to the expressed demands of parents, shown by the way in which they exercise their rights under the parents' charter.
Mrs. Margaret Ewing: If we turn the Secretary's of State's words back on himself, has he not created a bureaucratic tidiness and a bureaucratic straitjacket which is a recipe for conflict and has little to do with education? What is his Office prepared to do if a school, meeting all the other criteria, has only 79·5 per cent, capacity? Will he close those schools? What consideration will he give to education?
Mr. Speaker: Order. Briefly.
Mrs. Ewing: Secondly, and very briefly, what reason can the Secretary of State offer to this House for not having consulted the local authorities before bringing in this decree?
Mr. Rifkind: The power under these regulations does not mean that the Secretary of State will always refuse his consent for the closure of a school. It gives the Secretary of State the right to review a proposal to close a school, just as he has such a right in respect of denominational schools and some rural schools. When I am asked, "Why 80 per cent?", I hope that Opposition Members will accept that there must be a difference when dealing with a school that is full, or virtually full, compared with a school that is half empty. Whatever figure had been given, no doubt the hon. Member for Paisley, South (Mr. Buchan) would have asked exactly the same question because, basically, he is against people's wishes being taken into account on these matters.
Several Hon. Members rose—
Mr. Speaker: Order. I shall bear in mind the three hon. Members who have not been called when the statutory instrument comes to be debated.
Mr. Tom Clarke: On a point of order, Mr. Speaker.
Mr. Speaker: Order. I cannot say any more than I have said. I hope that the hon. Gentleman's point of order does not concern this matter.
Mr. Clarke: Further to that point of order, Mr. Speaker. I wish to seek your guidance on the statutory instrument. Four schools are scheduled for closure in my constituency. No Minister has visited any of them.
Mr. Speaker: Order. We are talking about one school today. I shall bear the hon. Gentleman's claims in mind when the statutory instrument comes to be debated.

BALLOT FOR NOTICES OF MOTIONS FOR MONDAY 15 FEBRUARY
Members successful in the ballot were:

Mr. Robert B. Jones.

Miss Ann Widdecombe.

Mr. Hugh Rossi.

WELSH AFFAIRS
Ordered,
That the matter of the National Health Service in Wales, being a matter relating exclusively to Wales, be referred to the Welsh Grand Committee for its consideration. — [Mr. Kenneth Carlisle.]

Orders of the Day

  Merchant Shipping Bill [Lords]
  Order for Second Reading read.
  4.44 pm
  The Secretary of State for Transport (Mr. Paul Channon): I beg to move, That the Bill be now read a Second time.
  This Bill, introduced in another place at the end of October, deals, as the House will know, with a wide range of subjects, all of them important to the shipping industry and to the country at large. I am sure that the keenest interest of the House will be in the impact of the Bill upon marine safety, and that is where I wish to begin my remarks.
  The whole House remembers only too well the appalling disaster at Zeebrugge last year. The House will agree with me that the public has a right to travel in safety. Transport and travel play an increasingly pervasive part in modern life in both commerce and leisure. All those engaged in the transport industry owe it to others to work uncompromisingly for greater safety. But I recognise that it is for the Government to establish the framework.
  The loss of the Herald of Free Enterprise provided lessons in abundance for ship operators, for seafarers and for Governments alike. The Sheen report, which we received a few months ago, has formed in large measure the agenda for the Government's programme of follow-up action. More recently, the coroner's inquest has provided further valuable insights, particularly into the rescue arrangements and emergency procedures on board ships. I was determined to press ahead and implement as quickly as possible the main and most urgent recommendations of the formal investigation.
  The law rightly requires consultation, and that has either taken place or is going on. We have now issued consultative documents on eight major packages of proposals. The first, covering the installation of vehicle deck door indicator lights, closed-circuit television monitoring of the doors and vehicle decks and self-contained emergency lighting, has now passed into law. Indeed, the installation of door indicator lights and closed-circuit television is already a legal requirement.
  Two proposals — the introduction of boarding cards for the control of passenger numbers and the mandatory closing of vehicle deck doors before any roll-on/roll-off ferry leaves its berth, or as soon as it is physically possible to do so—will be dealt with in orders which I shall lay in about two weeks' time.
  Mr. Eric Heffer: Will the Secretary of State explain what he means by "physically possible to do so"? Surely it is important that the doors should be closed before the ferry leaves its berth. It could be out at sea before it is "physically possible" to close the doors.
  Mr. Channon: The hon. Gentleman is quite right. Perhaps I did not phrase that as accurately as I could. It is mandatory to close the doors as a ship leaves a berth. There is a small number of berths from which it is not possible for some sorts of roll-on/roll-off ferries to leave with their doors in that position. This is a technical matter, and the regulations will make it much clearer. The hon.

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  Gentleman and the public can be reassured. He is right to draw attention to this, and, if he is still worried about it he can contact me about it when he has seen the order.
  Mr. Patrick Cormack: The Secretary of State mentioned boarding cards. When can we expect that order to be in force, as distinct from being introduced into the House?
  Mr. Channon: I hope that that will not take long. I shall ask my hon. Friend the Minister for Public Transport to give the hon. Gentleman an exact answer, but we are pressing ahead with the issue of boarding cards for the control of passenger numbers and I hope to lay orders in a few weeks' time.
  Other orders are close behind, covering such matters as the provision of draught gauges, loading computers and emergency escape windows; the provision by managements of comprehensive operating manuals and arrangements for their inspection by my Department; the designation of a person ashore responsible for operational safety; the weighing of heavy lorries before loading; the provision of special emergency equipment; regular checks on lightweight and centre of gravity; the reporting of potentially dangerous incidents; and the checking and recording of draughts and centre of gravity before sailing.
  There are also measures that can be taken as a result of administrative action. One such decision that my right hon. and learned Friend the Attorney-General and I have taken is, in future, to ensure that formal investigations into marine accidents are not only impartial, but seen to be so. The responsibility for appointing and instructing counsel assisting the court will rest not with the Secretary of State, but with the Attorney-General. More substantially, I have decided to make important changes in the duties of marine surveyors. They are to devote more of their time to work on passenger ships and carry out many more spot and incognito checks than before. The control of passenger ferry operations—
  Mr. Gerald Bermingham rose—
  Mr. Channon: Perhaps I may just finish this point. The control of passenger ferry operations by the Marine Survey Service will also be improved by some of the measures I have already mentioned, such as the requirement for comprehensive operating manuals. I have a lot to get through, but I will give way to the hon. Gentleman.
  Mr. Bermingham: The Secretary of State will recall that, when he made his statement to the House in respect of the Zeebrugge ferry disaster and the Sheen report that followed, I asked about marine surveyors and the numbers employed. He was kind enough to write to me on that matter. Will he now confirm that, bearing in mind the administrative steps that he proposes to take, he will ensure that there is an adequate number of marine surveyors so that adequate and comprehensive surveys can be carried out both officially and incognito? That is the only way in which we shall maintain safety standards.
  Mr. Channon: Of course, there will have to be an adequate number of marine surveyors. The fact that I intend to have a marine investigation branch means that more resources will be devoted to this matter.
  A moment ago my hon. Friend the Member for Staffordshire, South (Mr. Cormack) raised the important matter of boarding cards. It is my intention that the order
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  to make boarding cards mandatory should come into force on 29 February. I am sure that my hon. Friend recognises that that date is before the summer season.
  I come now to the international implications of the programme. I made it clear in July that certain crucial measures would need to be applied to all passenger ferries sailing from United Kingdom ports, regardless of flag. As our programme has developed, we have concluded that the majority of our measures ought to be applied in this way. But I do not wish to leave it at that.
  Marine safety worldwide is dealt with by the International Maritime Organisation. Members will be aware that that organisation is extremely successful. It has had a series of safety conventions and, over the past few years, it has provided a great many benefits to seafarers and travellers all over the world. In November, I personally took an initiative at the IMO's assembly with the aim of obtaining early worldwide agreement—under the IMO's accelerated procedures — to many of the measures we have proposed, without, of course, prejudicing our right to require foreign vessels to conform, when in our ports, to requirements under our own laws pending international agreement. We obtained the assembly's endorsement of a resolution that we proposed and I am hopeful of real progress in the not too distant future. So we are pressing ahead domestically and internationally.
  We have also convened a meeting of shipping administrations of the European countries — the main ferry operators exist in this part of the world — to consider the possibility of their taking action through their own laws. My main aim is to get the safety measures that we are imposing on United Kingdom ships and in United Kingdom ports extended to cover foreign ships in foreign ports as such ships, if bound for the United Kingdom, frequently contain large numbers of British passengers. But my further aim is to get international co-operation in enforcement. We have proposed, and received support for, the negotiation of a European ferry code as a vehicle for such an agreement. There is a lot going on.
  Next, let us consider research. Last July I announced that I would be contributing a further £1 million to research on the safety of ro-ro ferries. A representative steering committee was announced in October and contracts are now being let. One of the first contracts, for completion before Easter, is to assess proposals for new ship stability standards now before the IMO for early adoption. Other contracts will cover the development of lifejackets that are easier to put on, and escape from a partially capsized vessel. But perhaps of greatest interest will be a programme that looks specifically at the basic design of ro-ro ferries. The Government are satisfied that ro-ro ferries are not inherently unsafe as some have alleged: a ro-ro ferry that is properly closed to the sea and intact is as unlikely to capsize as any other vessel. But improvements in the basic design to give a greater margin of safety may well be possible, and it is the Government's intention to complete the first phase of this work by the end of the year.
  Mr. Cormack: Will improvements take into account that such vessels, if they sink, sink extremely quickly?
  Mr. Channon: That is an important point. However, if they are properly closed to the sea they are completely safe. It is extremely important to bear in mind that if there is

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  a disaster of this kind—fortunately, exceedingly rare— such ferries sink quickly. My hon. Friend's concern is much in our minds.
  Mr. Heffer rose—
  Mr. Channon: I will give way, but this must be for the last time.
  Mr. Heffer: The Secretary of State will agree that this is the most important matter to consider because, as the hon. Member for Staffordshire, South (Mr. Cormack) has said, if such ferries are holed and their design is as it is, they sink within minutes—
  Mr. Robert Hughes: Seconds.
  Mr. Heffer: Yes indeed. That is why this matter is so important. The right hon. Gentleman said that the first phase of the work would be completed by the end of the year. What does that mean? Is that the first stage? How quickly will he move on from that first stage? That is the most important question to consider.
  Mr. Channon: The first stage of the research will be completed by the end of the year, but we are doing other things as well. We are checking the stability factors of those ships and how they measure up to the most modern standards that we have in force at present. Therefore, a great deal of work is being undertaken regarding the stability of ro-ro ferries as well as a great deal of research on their basic design. However, the evidence around the world suggests that if a ro-ro ferry is properly closed to the sea and intact, it is safe. The House will be aware that, in many parts of the world, ro-ro ferries have been sailing for years and years. The important point is that those ferries must be properly closed to the sea.
  Mr. Heffer rose—
  Mr. Channon: I must press on because other areas relating to safety are also dealt with in the Bill.
  The responsibilities of ship owners, managers, masters and crews are terribly important to ensure that a ship is maintained and operated safely. Clause 30 creates a completely new duty on ship owners to ensure the safe operation of their ships..
  Clause 31 tightens up on the duties of masters and crew, requiring them to exercise due diligence in the carrying out of their duties and explicitly stating that a master's duties include responsibility for the good management and safe running of his ship. It also includes new defences that are not in existing legislation.
  Clause 29 deals with a ship that is unfit to go to sea whether because of its physical condition, overloading or any other reason, and affects the owner and master equally. Amendments have been made or will be brought forward to extend clauses 29 and 30 so that they equally cover ship managers and charterers.
  Clause 32, to which I briefly referred a moment ago, also arises from the Herald disaster and provides for the establishment of a new statutory marine accident investigation branch. The new branch will be separate from my Department's marine directorate and will report directly to me. It will therefore be free to take an entirely independent view should an accident raise questions about the regulatory policy of the Department. We also intend that all the branch's reports on the more important or significant accidents should be published.
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  The House will have many opportunities in the coming months to debate this programme. After tonight, there will be the Committee stage; and a number of the orders that we plan will be subject to affirmative procedure debate.
  We all know that there is one group of people to whom this programme is of deep personal significance: the survivors of the accident and the relatives of the victims. They, above all, will wish to know that everything possible is being done to avoid a repetition of the Zeebrugge tragedy. I made arrangements to meet the Herald Families Association next week to discuss its concerns and suggestions as I wish to hear what it has to say to me.
  I should refer briefly at this point to the proposal that has been made by the hon. Member for Aberdeen, North (Mr. Hughes) to refer the Bill to a Special Standing Committee. Of course, I have considered that suggestion extremely carefully, but I believe that the problems have already been fully exposed. There has been the Sheen formal investigation and the coroner's inquest, and I doubt that much could be done to add to our knowledge by a further round of hearings. This is not the time to go back to square one. I believe that our priority now must be a more specific, but no less demanding or responsible, task.
  Our duty, which only Parliament can carry out, is painstakingly to consider specific proposals, make clear judgments, and decide what changes should be made to the law. I am sure that the Standing Committee will want to consider the safety proposals carefully. I can assure the House that the Government are willing to listen to constructive arguments on these important matters and to be responsive to them, from whatever quarter they come. But I have no doubt that the right course now is to get down to the task in Committee without further delay. For those reasons, I cannot support the proposal that we should have a Special Standing Committee as well.
  Mr. Frank Field: I apologise for not hearing the beginning of the Secretary of State's speech. I am sure that the whole House welcomed his statement that in the near future he will be meeting families connected with the disaster. What contact did he have with the families before drafting the Bill? He said that in a sense the Bill is a result of that terrible tragedy. The two points that the families put to hon. Members at a meeting the other night were that they were unhappy about the penalties for companies when such a disaster occurred and were concerned about the safety of the ferries still in service. If there is the prior consultation to which the right hon. Gentleman referred, will he give an assurance that if those two points have not already been taken on board he will welcome amendments on them in Committee?
  Mr. Channon: I do not think that there was formal consultation with the families before the drafting of the Bill, but I think that the points that the hon. Gentleman raises are covered by the Bill or by other measures. For example, he will see that clause 30 deals with his point about owners. It says that if an owner fails to discharge the duty imposed on him — the duty that makes him liable for unsafe operation of a ship—
  "he shall be guilty of an offence and liable—

  (a) on summary conviction, to a fine not exceeding £50,000;

  (b) on conviction on indictment, to imprisonment for a term not exceeding two years or a fine, or both."

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  We may be able to discuss whether that is exactly right, but those are not negligible penalties; they are certainly a great deal more than has been suggested in the past.
  As for safety, there is, as I have said, the research programme going on into the inherent qualities of ro-ro ferries. Following the Sheen investigation, the question of the stability of the existing ferries is being looked at. I dealt with that matter in answer to the hon. Member for Liverpool, Walton (Mr. Heffer). If the Herald Families Association has further detailed ponts on it I shall wish to consider them when I see the association next week.
  I do not want to take too long, because other hon. Members wish to speak, but there are a number of other important matters that I should like to deal with briefly: measures of assistance with the shipping industry; the registration of merchant ships; and the establishment of a new fishing vessel register.
  All of us recognise the strategic importance of the Merchant Navy. The experience of other developed countries has been very similar to our own, and a complex reality lies behind the crude tonnage figures. Fundamental changes in our trading patterns have taken place. Much of our oil now comes from the North sea rather than spending weeks at sea being transported through the Suez canal or round the Cape. The European Community has replaced the Commonwealth as our major trading partner. We face fierce competition from Third world countries. There is a massive world over-capacity in bulk and tanker shipping.
  But some sectors of the British shipping industry have coped remarkably well with a uniquely rough period in world shipping markets. Our container fleet is about the same tonnage as it was in the mid-1970s. Over half the United Kingdom's international freight earnings come from our liner and container fleets, which account for only one quarter of our gross tonnage. Passenger ships account for only 8 per cent, of our gross tonnage, yet the United Kingdom earns over £800 million from the passenger ship business. So it is a complex matter. The shipping industry's contribution to the balance of payments invisible account grew by £221 million in 1986, the best for some years—and a reminder that tonnage on the United Kingdom register and the industry's value as a source of foreign earnings do not always go hand in hand.
  There is also the development of the Isle of Man and dependent territory registers, which has enabled much tonnage to remain under British registration, with British crews, while taking advantage of the savings obtainable offshore to improve the industry's competitive position.
  Many adverse factors — over-capacity, Third-world competition, new trading patterns—are not within our control, and it is folly to believe we could somehow escape them by erecting elaborate and expensive frameworks of subsidy. What we do must be carefully targeted. There are specific measures provided for in clauses 25 to 28, designed to ensure that we continue to have sufficient trained seamen to meet the defence needs of the United Kingdom in time of emergency.
  On training, we are particularly concerned at the small number of officer cadets at present being trained. The training scheme which we intend to bring into effect this autumn will build on the successful use already being made by the industry of the youth training scheme, and will provide help to ship owners and management companies with the cost of employing Merchant Navy cadets while they are being trained. Details of the scheme will be
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  announced as soon as possible. As has already been announced, £2·5 million has been earmarked for this scheme in the next financial year, rising to £3·5 million in the first full year, 1989–90.
  Under the crew relief scheme, assistance will be available to pay a proportion of the cost of air travel for crew changes on ships registered in the United Kingdom, the Isle of Man, or the Channel Islands, which take place in distant waters. The objective here is to give companies an incentive to continue to employ officers and ratings resident in the British Isles in those ships which operate in the deep-sea trades. We have earmarked £3·5 million in 1988–89, rising to £5 million in the full year 1989–90, for this programme.
  The third initiative, announced by my predecessor in December 1986, was the establishment of a Merchant Navy Reserve. The reserve will constitute a pool of experienced seafarers who can be drawn upon to supplement crews serving on Merchant Navy ships supporting the defence forces or engaged in supply. Membership of the reserve will be open to former seafarers holding valid certificates. Members will be paid a bounty in exchange for accepting an obligation to serve if called upon to do so.
  Part II deals with the very serious problem of foreign-owned fishing vessels registering in the United Kingdom in order to fish against our EC quotas. This is, I know, a matter of concern to hon. Members who represent fishing constituencies. We are introducing stringent new eligibility requirements for the registration of fishing vessels in the United Kingdom. A fishing vessel would need to be beneficially owned as to at least 75 per cent, by British citizens resident and domiciled in the United Kingdom, or wholly owned by a qualified company. There will be powers to specify additional eligibility requirements.
  These are stringent requirements, but we believe they are essential if British fishing quotas are to be preserved for British fishermen. They have been carefully drawn up in consultation with the fishermen's organisations and widely welcomed by them.
  Part I updates the law on the registration of merchant ships. Hon. Members who are interested in this difficult and complicated matter will find the White Paper, published with the Bill, a helpful guide to this fairly technical area. The main objective of the changes, which I will not deal with in detail, is to ensure that there is more effective jurisdiction in future over United Kingdom-registered ships.
  Importantly, the Bill gives new powers to the Secretary of State to define categories of register for the Crown dependencies and dependent territories. Under the present arrangements it has been possible for substandard shipping to obtain registration as British shipping in a dependent territory and thus to escape rigorous survey and inspection requirements applied to vessels on the United Kingdom register. The new arrangements in the Bill, combined with the substantial efforts which a number of dependent territories are making to improve their maritime administrations, will help to ensure that all ships sailing under the British flag meet the same high standards. In this way we are able to meet the recommendation of the Transport Committee of the last Parliament that early legislation should be brought forward.
  There are a number of other clauses dealing with significant matters. Some of them — liability and compensation for oil pollution damage, lighthouses and

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  unfair competition in international shipping services—are very important, but I do not want to weary the House with a detailed exposition of them today. They can be gone into in Committee.
  I have tried to cover the main issues. If hon. Members have any questions, my hon. Friend the Minister of State will be pleased to answer them in his winding-up speech.
  Mr. Conal Gregory: My right hon. Friend referred briefly to light dues. Will he confirm to the House that the Government are still paying half the light dues for southern Ireland, which is a scandal? I hope that the matter will be dealt with in the Bill. The amount charged last year was well above the level required by the authorities.
  Mr. Channon: My hon. Friend is right. We are indeed paying Irish light dues; I would have to check the exact proportion. However, I shall give my hon. Friend a trailer. My hon. Friend the Minister for Public Transport may have good news on light dues when he replies to the debate. I hope my hon. Friend the Member for York (Mr. Gregory) will be here to welcome it.
  There is a wide-ranging series of proposals in the Bill. They underline our commitment to maritime safety, help to safeguard our strategic requirements, protect United Kingdom fishing quotas for United Kingdom fishermen and overhaul the legislative framework. The proposed measures have been welcomed by the industry, and they have received general support in another place. I hope that the House will agree that the Bill should be given a Second Reading.
  5.10 pm
  Mr. Robert Hughes: I agree with much of what the Secretary of State said. By and large, the Bill is non-contentious, although it contains some contentious issues. Having been upset earlier by the Secretary of State for Scotland, I must try not to carry my anger forward and vent my spleen on the right hon. Gentleman. There are many points on which there is agreement, but other issues will have to be scrutinised carefully in Committee. There is still much tidying up to be done in the legislation. I hope, as the right hon. Gentleman said to me in a letter, that he will be prepared to consider amendments on their merits.
  I accept that much research is going on; and I welcome the fact that £1 million is to go into research, particularly on the safety of ro-ro ferries. I concede that there is no such thing as an unsinkable ship. The last ship that had that epithet was the Titanic. The right hon. Gentleman said that through ro-ro ferries are perfectly safe so long as they are watertight. That is much the same as saying that the Titanic was safe so long as it did not hit an iceberg.
  I am still concerned about the safety of existing ro-ro ferries. We must consider urgently whether portable bulkheads should be fitted to protect ships. We hope that never again will there be another sinking like that of the Herald of Free Enterprise, which sank because the doors were left open, but we are concerned about a ship being holed. We do not suggest that the fitting of portable bulkheads would make a ferry unsinkable, but it would lengthen the time that the vessel would remain afloat. The time before the Herald capsized was so short that no one had an opportunity to save life. If we can buy time for
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  lifeboats and rescue vessels, that may be the best that we can achieve. Certainly we should seek to achieve as much time as possible.
  Mr. Heffer: My question is not so much for my hon. Friend as for the Government. My hon. Friend may agree with my suggestion that all British ships should be brought in, one at a time, to have portable bulkheads fitted. Obviously, in the long-term new ships will be redesigned. In the meantime, ro-ro ferries could have departmentalised doors fitted to ensure greater safety.
  Mr. Hughes: That suggestion is worth pursuing. I cannot remember how many ships of a design similar to the Herald of Free Enterprise are at sea. The majority of ro-ro ferries have a different door-closing mechanism. Most have a bow visor, which is up while the ship is loading, and no one can go to sea with that visor up. I am not running down my hon. Friend's suggestion. Indeed, the number of vessels affected by his proposal might not be large, so the proposal should be considered seriously.
  I am in danger of losing the thread of my speech. Before I come to issues which we will contest vigorously, perhaps I should deal with the Herald of Free Enterprise and with the motion that the Bill should be committed to a Special Standing Committee. When discussing merchant shipping and safety at sea, we all have engraved on our minds the events of Friday 6 March, when we first heard that the Herald of Free Enterprise was in difficulty. As events unfolded, we discovered that it was a tragedy of immense proportions.
  The tragedy could have been far worse. Had the sinking taken place a quarter of a mile, or half a mile, further out, I doubt whether anyone would have survived. I am not minimising the loss of life, nor being complacent by taking refuge in the comfort that things might have been worse. It merely makes us more vigilant in ensuring that we scrutinise safety properly.
  The procedure for referring a Bill to a Special Standing Committee was designed for non-controversial Bills. It has rarely been used. I think that this Bill almost exactly fits the category for which the procedure was tailored. I am sorry that the Secretary of State has turned his face against the proposal. During business questions last week we were encouraged by the Leader of the House to believe that the matter might be resolved through the usual channels. I am grateful to the Minister for meeting my hon. Friend the Member for Stretford (Mr. Lloyd) and myself to discuss reference to a Special Standing Committee. I wrote to him subsequently, and perhaps I should give the House our reasons for proposing that the Bill be committed to a Special Standing Committee to consider safety at sea.
  We welcome what is being done by regulation and administration. We welcome what is proposed in the Bill. The point I wish to emphasise is that this is likely to be the only major shipping legislation in this Parliament. I cannot see that there will be time for another major merchant shipping Bill. Therefore, it is important that we do not overlook any aspect of safety and that we get the Bill right.
  The Secretary of State is correct. We have had the Sheen report and the coroner's report. We are still waiting to see whether there will be prosecutions that might bring out further evidence. But there may not be prosecutions. There is still a body of opinion that we should not ignore any approach that might shed further light on how to improve safety at sea.

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  It is significant that the proposal to send the Bill to a Special Standing Committee came from the Herald Families Association. The association wrote to my hon. Friend the Member for Stretford on 21 December about its concern for the safety of existing ro-ro ferries. It drew my hon. Friend's attention to the special procedure and asked whether the Bill could be dealt with in that way. We have no intention of intruding on the grief of the families, or of prolonging or exploiting that grief, but as the initiative came from the families it should be considered seriously. We should bring in experts to answer our questions. Often non-experts or people directly concerned with an incident ask a blindingly obvious question which has not occurred to other people who have been studying the matter.
  Mr. Jonathan Sayeed: As the Bill includes useful provisions to increase safety, does the hon. Gentleman not accept that a Special Standing Committee would delay its implementation?
  Mr. Hughes: I am glad that the hon. Gentleman raised that point, because it allows me to emphasise what I was going to say. I should be glad to be corrected, but I can see nothing in the Bill that has to be passed by a fixed date to get things moving. We have made it perfectly clear that our proposal to send the Bill to a Special Standing Committee is not intended to delay progress. I accept that if the Bill went to such a Committee, reasonable time would have to be allowed so that people could prepare their questions and their evidence. I recollect that the procedure allows for only three sessions to take evidence.
  I have offered the co-operation of the Opposition in getting the Bill through as rapidly as possible, and I believe that we could proceed along those lines without any great delay. I cannot say that there would be no delay, but there would be no great delay, and I hope that, even now, the Secretary of State will relent and allow us to put the matter to a Special Standing Committee. Today's debate will decide whether we will divide the House on that matter.
  I shall deal with an issue that is not controversial before coming to the controversial matters. I accept what the Secretary of State said about the need for registration for fishing vessels to prevent the abuse of registration and access to the United Kingdom quota of fish under EEC rules. I hope that such regulations will be speedily implemented, but one or two issues need to be clarified.
  The Scottish Fishermen's Federation believes that there should be registration of all vessels, irrespective of length or size, but the line must be drawn somewhere, or rowing boats or small vessels with outboard motors might have to be registered. As far as possible, the maximum number of boats should be registered. There is also the matter of the old register being closed and the period of transition, and whether the title of vessels should always be registered. The Scottish Fishermen's Federation has a point that should be considered in some detail in Committee.
  I join the federation in welcoming the fact that under part III some money is to be provided to assist the training of officers and ratings in the Merchant Navy. That is a good idea, but why are the Secretary of State and the Government steadfastly refusing financial assistance for the training of fishermen? It is expected that the Secretary of State will make regulations under the Safety at Sea Act 1986 requiring fishermen to be trained in survival at sea, fire fighting and first-aid, but he will not give them any
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  financial assistance. Why are the two parts of our maritime industry being treated differently? In previous wars fishermen served the Royal Navy extremely well. It was not only the deep-sea fishermen who had valuable experience to give to the nation. I hope that the Secretary of State will consider that point and perhaps take some action.
  I now turn to an issue that is quite contentious and on which there is a great deal of disagreement. I have made representations to the Minister, who will know that I do not believe that the Bill should have started in the House of Lords. I accept that we have a bicameral Parliament and that the other place is perfectly entitled to start legislation, but it is generally accepted that such legislation will nor. be contentious, and that the House of Lords is at its best when reviewing legislation. I assert that it is not at its best when starting fresh legislation.
  I resent the fact that the Government accepted an amendment on Report by Lord Mottistone, supported by the Earl of Inchcape, to remove section 42(2) of the Merchant Shipping Act 1970. Subsection (2) affects the position of seafarers involved in industrial disputes. It is a further restriction of the rights of seamen and it further tilts the balance towards employers.
  The amendment was accepted in the other place after the most cursory examination. Indeed, no evidence was presented that such a change was needed, except for anecdotal evidence. Two of their Lordships thought that the subsection was redundant and that it was not necessary, but no facts were brought forward to support the removal of subsection (2). Lord Brabazon previously resisted an almost identical amendment in Committee. Having said, on Thursday 26 November, that he had no evidence that the change was necessary, 14 days later he accepted the amendment, saying that he had now been persuaded.
  There was no reason for such a rush. It was the first time that the Bill had been aired. Lord Brabazon could have held his fire and asked for the evidence. He could have asked for consultation. He did not consult the trades unions involved or the employers' organisations, and he does not appear to have consulted his own Department. He had to admit that he had not had the time to prepare an amendment of his own.
  That is no way to approach people's rights in industrial relations. It is likely to be extremely provocative. I do not take comfort from the Government's view, put about in the other place, and which no doubt they will put about in the House, that that change only puts seafarers square with other industrial employees in terms of industrial relations. That is no big deal. We know that throughout their terms of office the Government have been redressing the balance, as they would put it, between the unions and the employers. However, in the Merchant Shipping Bill they have gone too far.
  I doubt whether the Government are aware of the ramifications of that amendment. Seamen do not work in a fixed environment. Their environment constantly changes. Perhaps in Committee the Government will be prepared to examine the legislation and change it. The amendment was made without proper consideration, and the Government will see the folly of their ways. We shall certainly pursue the matter vigorously in Committee.
  I now turn to what is not in the Bill. The most glaring deficiency is that it fails totally to address the problem of the decline in Britain's merchant fleet. The Opposition

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  have stated that view more than once, and it is shared by the National Union of Seamen and by the National Union of Marine, Aviation and Shipping Transport Officers. The General Council of British Shipping stated, quite categorically:
  "First, welcome though the proposals for financial aid for training and reparation are, they will not arrest the decline of the UK-owned merchant fleet. If Government and Parliament decide that it is in the national interest — for defence, balance of payments, trade, or employment reasons — for there to be a UK-controlled fleet, manned at least in part with British nationals and available on at least a British Dependent Territory register, much more needs to be done. In particular, action is needed to help shipowners re-invest in shipping when the current aging fleet reached the end of its economic life."
  That could almost be a synopsis of the Labour party policy put forward in the transport document, "Fresh Directions". It is clearly spelt out on page 21 of the document. The Secretary of State often asks what our policy is, and we clearly spell it out that we want to
  "improve coastal shipping facilities along the lines of Section 8 and Section 36 grants (which provide grants for rail sidings and inland waterway freight facilities."
  We want to:
  "Provide tax incentives for scrapping older vessels and building new ships in UK shipyards and for use with UK crews."
  In that, we differ from the GCBS. It says that the ships should be partly manned by British crews. We say that they should be wholly manned by British crews.
  We go on to say that we would
  "Create a discretionary scrap only tax incentive, to reduce the surplus of old laid up shipping tonnage."
  We add that we would
  "Ensure that our shipping policies are co-ordinated with policies to maintain an effective shipbuilding and ship-repair industry."
  The Government have gone wrong in the past because they have looked at shipping in isolation. It is not as though the merchant marine has suddenly declined. It is not as though the decline has sneaked up on the Government so that they were unaware of it. The decline has gone on for far too long.
  The last time that we debated merchant shipping was on 11 March 1986, and the writing was on the wall then. At that time we debated various EEC regulations. I am glad that the loss of tonnage has not been as severe as we forecast at that time, but we cannot take much comfort from that. Indeed, it is rather sad to see that the best headline that the press could produce about the merchant shipping fleet was:
  "Decline in shipping fleet slows down".
  Decline has not been arrested or reversed; it has only slowed down.
  Mr. Gregory: The hon. Gentleman seems to be very much a prophet of doom and gloom today. If we were to follow the Labour party's policy set out on page 21 that he quoted, what level of subsidy would be necessary to arrive at that artificial and protective state?
  Mr. Hughes: If we were in government we would be in a position to decide exactly how far to go.
  An interesting convergence of views is developing. Two years ago the General Council of British Shipping was thought to be relatively satisfied with the answers given by the then Secretary of State, the right hon. Member for Cirencester and Tewkesbury (Mr. Ridley). He told us that he could not give us any details, but he did give us a little
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  trailer, as, indeed, the Secretary of State did this afternoon. He did not say that we should wait until the end of the debate, but that we should wait a couple of weeks until the Budget. However, the Chancellor did virtually nothing. The fact that the changes made in the 1986 Budget did virtually nothing for the merchant marine is demonstrated by the fact that, certainly up until September last year, for two years not one British shipowner placed an order for a British ship in the United Kingdom. The Budget did nothing. The General Council of British Shipping now accepts that there must be investment, and investment supported by the Government, in the British shipping industry, and we agree on that.
  The second convergence of views is on cabotage. In March 1986 we argued for cabotage to be applied to the British coasts for the reservation of coastal trade to British ships. We include in that offshore vessels plying the North sea oil trade. The then Secretary of State said that that was not necessary, and the General Council of British Shipping said that the best way to go about things was to liberalise on cabotage, and if the European countries who already have it would let us have access to their trade, everything in the garden would be lovely. The General Council of British Shipping is now saying in its document that the time has come when we must seriously think of cabotage.
  I was interested to read in the debates in the other place that Lord Gray of Con tin, and another noble Lord, whose name I have forgotten, were arguing about the need for cabotage. The General Council of British Shipping clearly said:
  "more needs to be done to help British coastal shipping. It is unacceptable that so many of our fellow European Community countries—France, Spain, Portugal, Italy and Greece — should reserve their coastal trades to their own ships, which at the same time are able to trade freely in British coastal trades. GCBS would like to see all the Community coastal trades thrown open for competition, but it is clear that other member states will not negotiate away their restrictions whilst they can enjoy the best of both worlds. We believe that the Government should take powers to curb the free-for-all on the British coast as a spur to encourage the negotiation away of all EC countries' restrictions".
  We shall not achieve that objective. The countries that have cabotage know exactly how valuable that is, but I am glad to have that endorsement of the Labour party's policy, for which we have argued for some years, that cabotage is necessary. I hope that the Secretary of State will now agree that something should be done.
  We have been given another little trailer. There are rumours, hints, suggestions in the press that the Chancellor of the Exchequer might agree to some rollover relief on capital investment in British shipping. But that is only a hint. We do not know what it will be. If he lives up to his previous record, it will not be any good to us.
  Lord Brabazon said that something needed to be done on a number of matters and that he was concerned about the decline in the shipping fleet. He said that cabotage was a reserve power which remains to be used should the time be ripe. It is no use putting a substitute on with one minute to go, and the Secretary of State should now agree to apply cabotage. We should protect what we have in order to try to move forward, because the situation is perilous.
  The hon. Member for York (Mr. Gregory) said that I was a prophet of doom. I wish that there was no need to be gloomy, but I doubt whether any Conservative Member will say what a marvellous buoyant state shipping is in and what a great future it has. No one will say that there is no need to worry because everything is going well and that the

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  Opposition, the National Union of Seamen and the General Council of British Shipping are wrong; that all is going swimmingly. That is not what was said in the other place, and it is not what the Secretary of State said. We must take action soon and swiftly if we are to save the merchant shipping fleet.
  I hope that the Secretary of State and you, Mr. Deputy Speaker, will have gathered from my remarks that there is much in the Bill that we welcome, but we believe that it should be probed. We shall not vote against its Second Reading this evening—that would be foolish—but we reserve our position on the Special Standing Committee.
  I promise the Secretary of State that he will have to work hard to justify some of the changes that he has made, and he will have to work hard to review some of the changes that we want made. However, I hope that, in the spirit of co-operation, we can make some real progress in Committee, and I hope that we will have a useful debate.
  5.37 pm
  Mr. Patrick Cormack: There is no one in this country, maritime nation that it is, who is not deeply concerned about many of the matters in the Bill. Some of my colleagues may wonder why I, a Member for Staffordshire, am taking part in this debate. I would just point out that I speak as the son of a master mariner and as somebody who has spent more than half his life by the sea and who has sailed with the fishing fleet out of Grimsby. Therefore, I have a little practical experience.
  But it is not for those reasons that I seek to intervene briefly today. I wished to catch your eye, Mr. Deputy Speaker, because some time before Christmas I received a letter from Mr. Maurice de Rohan, the chairman of the Herald Families Association. I had not at that stage had the pleasure of meeting Mr. de Rohan but I have subsequently met him and his colleague, Mr. Spooner, and other members of the association.
  I was anxious that any help given in Parliament should be on an entirely non-partisan cross-party basis. I immediately enlisted the support of the hon. Member for Birkenhead (Mr. Field) and we have tried to work together. On Tuesday this week we received, together with a few of our colleagues, members of the Herald Families Association and listened to what they had to tell us.
  No one who met those people who went through one of the most searing experiences, not only losing loved ones but losing them in circumstances almost too appalling to contemplate, could fail to be moved, not just by the stories of tragedy or the terrible accounts of families rent asunder, but by the quiet controlled passion which they have displayed. This is no group of people bent on vengeance or making destructive criticism.
  It would perhaps be appropriate to quote to the House the aims of their association. They say, in the short document that they issued, that the association was established after the capsize of the vessel:
  "It was formed by the bereaved of many of the victims to give mutual help and comfort … It is natural that those who share the same grief should want to help each other. It is as natural that they should seek to ensure that such a disaster as befell their loved ones should not recur. The Association seeks in all its activities to be motivated not by vindictiveness but by the wish to see the lessons of the disaster learned."
  That is an extremely balanced, moderate statement, and anyone who has met members of the association cannot fail to have been moved by their attitude and approach.
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  I would like to take this opportunity, on behalf of the association, to thank my right hon. Friend the Secretary of State for Transport for what he said this afternoon, for his promise to meet the association's members next week, for his promise to listen carefully to what they have to say and also for the speedy action that he has taken on a number of matters that have given them and us concern. I was particularly grateful for his assurance that the boarding pass will become a legal requirement by the end of February. That is speedy action and we should all be grateful for it.
  I would, however, like to concentrate my remarks on one of the principal concerns of the Herald Families Association. In its major document, the association points out that one of its immediate objectives is to have the responsibility of the ferry company—P and O European Ferries, previously Townsend car ferries — determined. The members of the association make out a good case for that but you would rule me out of order, Mr. Deputy Speaker, if I developed that particular theme this afternoon.
  The second of the association's major objectives is entirely pertinent and relevant — it is to press for immediate action on the safety and stability of roll-on/roll-off ferries, to ensure that they will sink slowly, enabling normal life-saving practices to be followed. They list a number of those ro-ro ferries which have gone down in minutes or even seconds in recent years. Their document has on its cover a picture of a ferry. One immediately assumes that it is the Herald of Free Enterprise. Not at all, it is the Gateway which went down with, thank God, minimal loss of life in 1982.
  My right hon. Friend said that he was devoting money to research. That is splendid. He said that he was most anxious to see that these vessels were the seaworthy vessels that everyone who sailed in them had a right to expect. But there is one point that has already come out in the debate and on which I would welcome further remarks from my hon. Friend the Minister for Public Transport when he replies to the debate. It may be perfectly possible to ensure that never again will a vessel go to sea with its doors open, but if a vessel is holed, as the hon. Member for Aberdeen, North (Mr. Hughes) so rightly said, if there is a collision in the Channel — which is the busiest waterway in the world—and a vessel goes down as fast as the Gateway and the Herald of Free Enterprise went down, there could be further disasters.
  As we are entering the era of the giant ferry carrying 2,000 passengers or more, one does not like to contemplate the enormity of the tragedy that could ensue if that were to happen. I hope, therefore, that real attention will be paid to what can be done to make these vessels more seaworthy in all normal circumstances.
  Of course, the hon. Member for Aberdeen, North was right to refer to the Titanic. He was also right—in what I thought was an extremely moderate passage of his speech, although I did not agree with all his concluding remarks — to say that there is no such thing as an unsinkable vessel. Nor would the members of the Herald Families Association suggest that there was. But these vessels could be made more seaworthy, perhaps by adopting the suggestions made by the hon. Member for Liverpool, Walton (Mr. Heffer); and, if they could not be made more seaworthy, no more should be constructed. This point has not been sufficiently grasped.

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  On corporate responsibility, my right hon. Friend rightly drew attention to the fact that on indictment a company and those responsible for it can be liable to two years' imprisonment and an unlimited fine. That is all well and good, but there ought to be provision in this Bill for a company's licence to be revoked if it behaves in such an irresponsible way in future. Such a provision cannot be made retrospective, and I stress that neither the Herald Families Association nor I seek to be vindictive. But if we are trying to frame shipping legislation for the 21st century there ought to be real penalties, and they ought to include the ability to revoke a licence.
  Mr. Frank Field: Will the hon. Gentleman remind the House about our meeting with the Herald families at which they stressed — and I was surprised by the comment—that safety at sea was not regularly discussed at board level? In this Bill and with its penalties, we must somehow raise that issue to board level so that it is considered regularly, not just perhaps once or twice, on occasions when a disaster like this puts it on the board's agenda.
  Mr. Cormack: The hon. Gentleman is quite right. The families association is right in making this point. I was glad to hear what my right hon. Friend the Secretary of State had to say about the policing of the regulations and about random checks to ensure that they were enforced. That was a most welcome part of his speech, as was his reference to the supervision of ships sailing under other flags.
  I have two final points. Looking forward, as the members of the association do, and seeking to envisage what could happen in the event of some terrible disaster in the future — and not just a maritime disaster — the Herald Families Association believes that its members' agony and torment would have been less had there been a national disaster unit, able to respond to this sort of calamity and able to ensure that information was more quickly and accurately supplied. It also believes that if a national disaster fund existed, able to cater immediately for the financial needs of those bereaved, it would be a help. While it is not appropriate for me to expand on those points this evening, I would be most grateful if my right hon. Friend would bear them in mind when he meets the association and if he would pass them on to his ministerial colleagues.
  This is a constructive and welcome Bill. The families who have suffered so badly welcome it. Let us ensure that when it leaves this House—and it cannot go back to the other place when it leaves — it is as good a Bill, as unsinkable a Bill, as we can produce.
  5.47 pm
  Mr. Peter Shore: I can well understand why the Secretary of State began his speech this afternoon by referring to the topic of marine safety and to the appalling background of the Bill, the Zeebrugge disaster. A number of the things that he said in the course of his speech will be very welcome news to the House. I do, however, join both my hon. Friend the Member for Aberdeen, North (Mr. Hughes) and the hon. Member for Staffordshire, South (Mr. Cormack) in stressing that there is a serious subject for further investigation in the design of ferries. We shall not really be wholly at ease with ourselves and feel that we have
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  achieved that degree of seaworthiness which I am sure the industry is capable of attaining unless we tackle the question of ship design and satisfy ourselves that we have the safest form of ferry available.
  Another very important factor in this debate is that we are speaking against the background of a continuing and unprecedented decline in the United Kingdom merchant fleet. The extent of that decline is not, I fear, fully appreciated.
  From more than 50 million tonnes on the United Kingdom register in 1975—I remember the figure well, and some of the special circumstances, because I was Secretary of State for Trade at the time—the fleet had shrunk to 25 million tonnes in 1982 to 16 million tonnes in 1985 and to under 6 million tonnes in 1987. At least some part of the fleet has been flagged out to the Isle of Man and Channel Island registers and to those of British dependent territories, and a small number of ships have been foreign registered, too. Taking account of all those categories of ships that are still British-owned, however, we have still shrunk from 28·8 million tonnes in 1982 to just under 17 million tonnes in 1987. Thus, in only five years, the number of United Kingdom-owned ships has fallen from 1,063 to 635. No other nation — with the possible exception of Norway — has suffered so catastrophic a decline. While most European fleets contracted in the period 1982–87 — the United States actually increased its tonnage — so the scale of the decline of those nations' fleets is not comparable with our own.
  Uniquely, we are an island nation, the vast bulk of whose trade is carried by ships. Of course, major adverse factors have been at work—the sharp fall in the volume of oil trade and the major changes in the pattern of oil trade to which the Secretary of State referred, for instance. He might have added the slump of 1974–75 in world trade, and the further slump that followed another hijack of the oil price in 1979–80. So there were major factors beyond our control, as he rightly said.
  However, some of our wounds are self-inflicted. In particular, the abolition in 1984 of free depreciation against capital costs in the form of a 100 per cent, first-year allowance, carried back, as it then was, against profits for the three preceding years, has had a major adverse effect. No other country has abandoned Government aid toward the capital cost of its ships. As up to 50 per cent, of the running costs of a ship relate to the cost of its finance, the effect on our competitiveness has been catastrophic. Any British shipowner now acquiring a ship for United Kingdom registering puts himself at a significant disadvantage. According to the General Council of British Shipping—I have not seen its figures challenged — the United Kingdom now stands 39th in the world order-book league. We have five ships on order with a deadweight tonnage of 51,000. The General Council of British Shipping is aware of no new ships on order for United Kingdom owners for registering outside the United Kingdom. No ships were ordered from August 1986 to September 1987, when one ship was ordered. That compares with orders in the United Kingdom registry of 363 deadweight tonnes in 1983, the last complete year before the 1984 Budget withdrew the 100 per cent, depreciation allowance.
  There are, of course, costs other than capital costs—especially crew costs—which determine the competitiveness of United Kingdom ships. Nevertheless, United

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  Kingdom ships are broadly competitive with those of western Europe and operate at substantially lower costs than those of the United States and Japan. Of course, we are massively undercut by flag of convenience operators.
  It is against this background that the House should examine the provisions of the Merchant Shipping Bill. While there is much that is useful in the Bill on matters such as registration, safety and the fishing fleet, only a few clauses in part III address the issue of United Kingdom competitiveness and the decline in the British maritime fleet. According to Lord Brabazon, who introduced the Bill in the other place on 10 November last year,
  "Their objective"
  —that of the clauses, that is—
  "is to ensure that the shipping industry remains capable of meeting the nation's essential shipping needs in times of emergency or war."—[Official Report, House of Lords, 10 November 1987; Vol. 489, c. 1293.]
  He then referred, as did the Secretary of State this afternoon, to the three initiatives on assistance with training costs, the costs of crew changes on ships operating in distant waters and the setting up of a Merchant Navy reserve.
  These provisions are contained in clause 25, 26, 27 and 28. I welcome them, as, I am sure, does the House—as far as they go. Just how far is explained in the explanatory and financial memorandum of the Bill. The public expenditure provision for the Merchant Navy training and crew relief costs rises to £3·5 million and £5 million respectively in the full year 1989–90. Costs incurred in relation to the Merchant Navy reserve are thought to be in the region of £1 million a year. In relation to the needs of the United Kingdom Merchant Navy, those sums are peanuts.
  I do not see how the Bill can be easily amended to make more adequate provision to assist our merchant fleet, but at least it would be good to learn from the Secretary of State — or the Minister — that he had forcefully represented to the Chancellor the need to resume assistance towards the capital costs of British shipping. I do not believe that the Government or Back Benchers on either side can be, or are, indifferent to the continued decline of the British Merchant Navy.
  The cost in terms of our balance of payments is already high. We have moved from a national positive balance in the 1970s to a deficit of no less than £1·1 billion in 1985. I do not know what fleet size and composition the Ministry of Defence believes to be necessary in a period of tension or war, but there must be an irreducible minimum. On present trends, there is no reason why our shrunken fleet of 400 ships should not shrink still further to 200 or fewer in the 1990s. At the very least, I hope the Government will take an early opportunity to present to the House a comprehensive policy to prevent the further decline, and preferably to assist in the revival, of the British Merchant Navy.
  5.57 pm
  Mr. Neville Trotter: May I say how much I agree with the speech made by the right hon. Member for Bethnal Green and Stepney (Mr. Shore). He was absolutely right to remind us of the continuing decline of the Merchant Navy, which forms the background against which we are reviewing the Bill. I support all that he said about the need for fiscal measures to help the industry. It
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  is relevant that our competitors in the western world are giving assistance of that nature to their merchant navies while we are not.
  The picture is one of a fleet that is increasingly flagged out, manned by foreigners and to an underlying extent composed of aging ships. A difficult decision about replacement lies ahead in the near future for the owners of many of the ships remaining on the British register. Coming as I do from a shipbuilding area, I need hardly remind the House how important it is to obtain more orders for that industry. However, that is not the specific issue before us — we are debating the future of the Merchant Navy tonight. I emphasise the need for my right hon. friend the Secretary of State to take to our right hon. Friend the Chancellor the message that he must not delay the introduction of more fiscal measures to help the Merchant Navy, if we want the necessary fleet renewals, without which an aging fleet will in the near future become uneconomic and unable to maintain even its present size in the near future.
  It is surely not necessary to remind the House why so many of us think it necessary for Britain to have a Merchant Navy. Apart from the economic argument, it is clear that the defence needs of NATO and of our own country necessitate the existence of an adequate Merchant Navy, as part of the deterrent that we must maintain. It is essential that a potential foe appreciates that we have the maritime capacity to sustain ourselves at a time of crisis. If he believed that that was not so, there would be more temptation to start the trouble that we are seeking to avoid.
  I might mention for the benefit of my right hon. Friend that his predecessor in December 1986 referred to inquiries that were being made into the problems of being able—or unable at a time of crisis — to obtain United Kingdom-owned vessels that were flagged out and operating under foreign flags. Would they be available to us in a crisis? My right hon. Friend's predecessor explained it was both a legal matter for this country and also a matter for the other states concerned. I hope that before too long we shall hear what conclusions have been reached as a result of those inquiries. It is a very important issue for the continuing defence and security of this country.
  Another important factor is that our merchant fleet should be able to compete fairly with its competitors. In recent years some ships flying the Red Ensign that have been registered in the dependent territories have not complied with our safety standards. That is wrong, and I welcome the proposals in the Bill designed to prevent that happening in future.
  I want to refer briefly to the Isle of Man. The Select Committee on Transport, on which I have the pleasure to serve, visited the Isle of Man a few months ago. We were delighted to be told that the Isle of Man authorities are determined to impose on the ships registered in Douglas the same high standards that are to be found on ships registered in Newcastle, London or Cardiff. It is one of the few encouraging signs for our Merchant Navy that the Isle of Man register has taken off successfully as in effect a Red Ensign flag of convenience.
  Coming from North Shields, I very much welcome anything to do with fair competition in the fishing industry. While North Shields vessels have not been the main sufferers as a result of the activity by the Spanish in the southern Channel area, it is right that we should prevent the abuse of the registry system that has occurred

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  there. Foreign-owned vessels must not be allowed simply to transfer to the Red Ensign so as to obtain part of the United Kindgom quota of scarce fish. I congratulate my right hon. Friend on taking measures to correct that abuse.
  I want to ask my right hon. Friend some questions about the new registry of fishing vessels. I believe that it is proposed that there should be a central registry for fishing vessels instead of the 90 or more port registries that exist at present. I hope that my right hon. Friend will appreciate that fishermen in North Shields and elsewhere do not want to go to Cardiff or deal with officials in Cardiff in order to obtain registration in future. I hope that there will still be officials in the local ports with whom the fishermen can deal and I hope that boats will continue to display the registration letters and numbers of the local ports around the coast as there is a great deal of pride in this local identity.
  One of the greatest problems facing the Merchant Navy is caused by the low wages paid on so many of our competitors' vessels. Those vessels are manned by people who are, on the whole, satisfied with their wages because they are being paid the going rate in their own country. Undoubtedly, this is one of the main problems facing our operators at a time when world freight rates are actually less than they were seven or eight years ago. There is no margin to carry unnecessary costs.
  The Bill contains welcome proposals, but I fear that they are rather modest when compared with the overall scale of the problem.
  The new scheme for assistance for training will be helpful. It is a fact of life that so many of our competitors in the western world do not have to find the high cost of training as do owners in this country. For many years there has been an excellent marine college in South Shields on Tyneside. It has been very disturbing to see the constant fall in the number of young men entering the college for both deck and engine cadetships. There is now a shortage of cadets and I hope that this welcome measure will end that problem. I hope that more can be also done using existing schemes such as YTS or the Manpower Services Commission to assist in tackling the problem.
  With regard to the repatriation of United Kingdom crews, I was interested to be told recently by the owners of a United Kingdom registered cruise ship that when she went on a round-the-world voyage the cost of the air fares for changing the crew en route amounted to £1 million. That is the level of burden that such ships carry to provide a British crew. However, such ships of course also have the great advantage of the highest reputation for the standard of service on board. The measure will be helpful in matching the competition with their lower costs of manning.
  The Bill contains a welcome proposal to establish a Merchant Navy reserve. There is considerable debate whether in an emergency we would be able to obtain the ships that we would need. It can be argued that unless the crisis was worldwide, there would be ships available for purchase if we paid enough for them. I would, however, have been happier to see an additional proposal before the House to establish a reserve not just of men but of ships anchored in our waters. The United States has adopted that policy. It is taking advantage of the low price of modern secondhand vessels and has bought nearly 100
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  ships which are kept at anchor and which could be put into service in a day or two should a crisis occur. We should do that in Britain.
  The number of sailors on the Merchant Navy register has fallen from 50,000 to only 25,000 over the past five years. There are probably also almost 7,000 British sailors serving on foreign-flagged ships. Unless we take steps now, United Kingdom sailors to man our ships in a crisis will simply not be available and the new reserve of men is timely.
  Has my right hon. Friend the Secretary of State any idea yet as to how long it will take to establish the reserve? What kind of training will be available? As I understand it, the reserve will consist of former seamen who will state that they are willing to be recalled to the colours in an emergency. As time passes, they will tend to become rusty and there must surely be a system to provide regular refresher training.
  I want to refer to unfair restrictions on the market. We have always believed in free trade at sea, and quite rightly so. That was the whole basis for the birth of the Merchant Navy, which involved the carrying of other people's cargoes around the world. Many British companies are still satisfactorily and effectively doing that today. However, 79 per cent, of the weight of cargo coming in and out of the United Kingdom is now carried on foreign-flagged ships and by value the figure is 64 per cent. We can see the temptation of suggesting that we should think of protectionism. However, that is not the answer and it is not what the General Council of British Shipping is asking for. It is right that we should have free trade on the seas and we can benefit from that. However, it is essential that the rules are fair and that our people are not discriminated against as they increasingly have been. I therefore welcome the new powers sought in the Bill to counter unfair competition.
  Finally, I want to refer to the problem of cabotage and to coastal trading around this country and neighbouring coasts of Europe. Different rules seem to apply. Our coasts are open to all, yet a number of our important neighbours' coasts are not open to our ships. That is very unfair and I am sure that my right hon. Friend has that point very much on board.
  6.7 pm
  Mrs. Ray Michie: I also welcome this necessary Bill. I appreciate the fact that the Secretary of State, like other hon. Members, started by referring to the safety aspects, and we would not expect anything else. We all appreciate that they are so important following the Zeebrugge disaster and tragedy.
  I want to draw the Secretary of State's attention to several safety aspects to which he referred with regard to ferries which differ from the ferry involved in the Zeebrugge tragedy. I want to refer to the ferries serving the Scottish islands. I hope that the right hon. Gentleman will not insist that a six-car ferry should require closed circuit television, when the whole length of the ferry can be seen from the bridge by the master. Perhaps a little money could be saved in that way. I believe that the deadline for installing emergency lighting is July 1988. I am not sure whether approved equipment exists at the moment. Therefore, there could be a problem in meeting that deadline.
  Reference has been made to the registration of fishing vessels. I have a particular interest in the part of the Bill

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  that deals with that registration, as fishing is an integral part of the life of many communities in my constituency. Part II provides for a new system of fishing vessel registration which, I am glad to say, would do away with the ability of non-United Kingdom vessels to flag into the fishing fleet and enjoy British quotas. I am glad that the Government have responded to the need to ensure that those quotas are taken up only by United Kingdom fishermen, as they have been fought for long and hard over the years.
  The Scottish Fishermen's Federation, which includes the Clyde Fishermen's Association — of which I am proud to be honorary president—holds the view that, if the exploitation of quotas by non-United Kingdom interests is to be eliminated, all loopholes must be closed. The registration of fishing vessels for title may be a matter of concern. Possibly it is peculiar to Scotland, and it is probably an issue for the Committee to consider. I believe that at present there is an option on whether a boat is registered for title, but in Scotland such registration is recognised custom and practice.
  Another point of concern is the lack of definition on when the old fishing vessel register will close once the new one has been opened. While it is accepted that both registers will run concurrently for a time, it is important that a limit should be imposed, perhaps of four or six months. The federation stresses that that will be necessary if the new register is to be a success.
  The administrative arrangements for the register have already been mentioned. Although I believe that they are being centralised in Cardiff, I nevertheless welcome the Government's recognition of the need for business to continue to be conducted personally at local offices, because local knowledge and expertise must not be allowed to disappear. I was reassured by the answer given by Lord Brabazon in another place that officers will be retained in many ports, including two in my area, in Oban and Campbeltown.
  The Bill provides for financial assistance with the costs of training Merchant Navy officers and rating. However, as has been mentioned, there is no word about assistance for training in the fishing industry. We should give that some consideration. The Sea Fish Industry Authority has provided only limited support, and that is not guaranteed beyond March 1988. Many fishermen are already undertaking training for survival courses, and it is surely reasonable that that branch of the maritime industry should receive some support.
  I was interested in the Bill's definition of a fishing vessel as a vessel
  "used … for or in connection with fishing for sea fish."
  According to the Bill,
  "'sea fish' includes shellfish, salmon and migratory trout (As defined by … the Fisheries Act 1981)".
  I am sorry that eels in inland waters in Scotland are classified as freshwater fish, because they are at the mercy of foreign companies that come over and fish out all the eels, leaving our own eel fishermen with the thought of the dole. That is a tragedy, and I really do not know why eels should be so classified. Perhaps someone will consider the eel fishermen's plight.
  I see no provision in the Bill that makes a serious attempt to arrest the decline of our once large, and always proud, Merchant Navy. Although the financial assistance for training and repatriation is welcome, it will not halt the
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  decline of the fleet. I believe that what is required is a package of measures that will put us on more of an equal footing with our competitors.
  The deep concern of many of my constituents about the decline came to light during the last election, when attitudes ranged from astonishment to downright disbelief that this island country could have allowed such a rundown in our fleet. While a Merchant Navy reserve sounds very laudable, I believe that a greater determination to have a viable merclant fleet crewed by United Kingdom seafarers would obviate the need for such a reserve. The continual "flagging-out" has meant that fewer and fewer people have come forward to be trained, and the danger is that we shall soon find ourselves without enough pilots or harbour masters, or enough crews for cross-channel ferries, Caledonian MacBrayne and the large ships criss-crossing the world's oceans.
  I was delighted to learn that a company in Glasgow, Clyde Marine Training, which has 12,000 British seafarers on its register, set up a training schedule only last March. The company managed to attract 50 youngsters to train this year, and hopes for another 100 next year. The young cadets come in with O-grades, the Scottish equivalent of O-levels in England. With the use of existing finance through the Manpower Services Commission, the cost to the shipowner is very much less — about £6,000 over four years—whereas previously it was £25,000 per cadet over four years.
  I referred to the interest of my constituents. That interest extends to the whole of the highlands and islands area, for it was a tradition stretching back to the first world war that crofters and fishermen left the land to join the Merchant Navy in far greater numbers than ever joined the Royal Navy.
  During the depression of the 1930s, when unemployment was so high, highlanders used to come to Glasgow and join the long queue in Jamaica street, where stood the men on the dole hoping to join the Merchant Navy But, because of their fishing and seafaring experience and tradition, those highlanders were often taken out of the queue and given jobs straight away. There is a wealth of knowledge, expertise and dedication among our people. It would be a tragedy if this country were to suffer any more loss, or see any further decline in our fleet and in the crews who man it. I give the Bill a general welcome.
  6.18 pm
  Sir David Price: I detect a desire to make progress, so I shall be as brief as I can. In doing so, I declare both a constituency and a personal interest in the fortunes of the British Merchant Navy.
  This is a miscellaneous Bill containing all sorts of different clauses. It therefore lends itself particularly well to study and debate in Committee. On the Opposition point on whether a Special Standing Committee should deal with it, I should mention that, as I understand the rule applying to such a Committee, it can have only four sittings.
  Let me put forward an alternative suggestion. It might be an education for those of us selected as members of the Standing Committee to go and look at a few ferries, with the safety angle particularly in mind. Perhaps we could pay a visit to the ship tank at the National Physical Laboratory to examine hull designs and other such matters. The alternative would be to set up a Select Committee so that

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  we could have proper assessors and advisers. However, I think that that is outwith the scope of what is being proposed.
  I should certainly be sympathetic to any thought that we might have, as it were, hands — on experience of ferries, rather than just talking about them. In the normal Select Committees on which I have always served, I have found that the visits outside Westminster are often more valuable than the formal evidence that we take here.
  I am asking almost the same question as the right hon. Member for Bethnal Green and Stepney (Mr. Shore) and my hon. Friend the Member for Tynemouth (Mr. Trotter), which is: will the Bill assist in reversing the dramatic decline in the size of the British merchant fleet? We must all ask ourselves that. As the House knows, I have found myself in the unhappy and uncharacteristic position of having to warn the House about the steady decline in the size of the British Merchant Navy. I do not enjoy the role of Jeremiah—to be quite honest, I do not think that it becomes me. However, I fear that the figures quoted by the right hon. Member for Bethnal Green and Stepney have proved that, unfortunately, one's fears were correct. The right hon. Gentleman quoted chilling figures to the House, which I shall not repeat.
  The question that we must ask ourselves is the one to which my hon. Friend the Member for Tynemouth assumed that the answer was generally accepted: do we need a Merchant Navy? I should like to suggest briefly the headings, without developing them, for the reasons why I believe that it is absolutely essential that we have a Merchant Navy of reasonable size. The first, which has been touched on, is national security, not only during war but in situations of emergency that are short of war. All the evidence — again I shall not attempt to detain the House — shows that the total availability of merchant ships to the whole of the NATO Alliance has been steadily declining. That includes those ships that are flagged out to dependent territories and can be reached, and those under Liberian and Panamanian register. It is a matter of serious moment.
  The House must remember that in our case the Merchant Navy is asked to fulfil three roles. The first is direct support for the armed forces. The second is the provision of transport to continental Europe which, in the jargon, is called sealift. The third is to ensure civil resupply of our island economy and, indeed, of western Europe from across the Atlantic or anywhere else. That alone gives cause for deep concern to anyone who cares not only about the Merchant Navy but about the defence of our country. There is also the economic question of control over our own trade. Again, the right hon. Member for Bethnal Green and Stepney quoted some figures so I need not detain the House, although I wish to make the point that we should control our own trade. Furthermore, the balance of payments argument is a little too lightly swept away.
  In those circumstances, where do we look for improvements? I suggest that there are two areas: first, measures to help reinvestment and, secondly, measures to assist with running costs. Again, the right hon. Gentleman quoted figures showing the dramatic fall in reinvestment in new vessels since 1984. There are various ways in which the position could be restored. At the moment, the preferred solution is roll-over relief for balancing charges.
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  However, there should be no doubt that unless the Chancellor restores some form of investment incentive to British shipowners, we shall not get the ships. I hope that my right hon. Friend will talk to the Ministry of Defence and especially to the admirals about that.
  I do not want to tell stories out of school, but when one meets some of the admirals informally on the various all-party maritime groups, one realises that they are clearly concerned about the decline in the British and the NATO Merchant Navies. However, they are fearful of the Treasury and that if anything were done to assist investment in the Merchant Navy it would somehow have to be paid for on the naval Vote. The admirals are a shrewd lot. I repeat that unless something is done we shall not have the necessary Merchant Navy back-up for the Royal Navy.
  Referring to assistance on running costs, we are delighted to have aid for training costs—we shall discuss that more in Committee — and for repatriation. However, there is also the question of income tax for seafarers and the problem of social security changes and the like, all of which, in different ways, get more favourable treatment from other western European Governments, let alone what happens in the Far East.
  We should not be too purist. We should look at what happens in the real world and see whether we can adapt it. I understand that the European Commission is giving serious consideration to some such measures of relief which would have general application. I hope that our Ministers who go the Commission will give such proposals their welcome and support.
  Clauses 27 and 28 deal with the Merchant Navy reserve, which we welcome. However, it is no good having a reserve of sailors if there are no ships for them because, surprise, surprise, just as ships need sailors, sailors need ships. We do not have sufficient ships that might be available to the reserve. We also need the right mix of ships because it is a question not just of tonnage but of the right tonnage. I suggest that my right hon. Friends consider setting up a Merchant Navy strategic reserve. Time forbids me to go into that in detail but no doubt we can do so in Committee. However, it is a well-known concept and means doing the same for merchant ships as the Royal Navy Reserve does for officers and seamen. We must also consider the alternative of a crew-related allowance for those who take on extra reserve commitments.
  I welcome clause 37, but in Committee we shall wish to probe my hon. Friends on precisely what it means. I put in a plea for us to take tougher powers to deal with other European countries over cabotage. I give notice now that I intend to table amendments to strengthen that part of the Bill. In such matters we must play to what I would call "French rules" rather than to the letter of the treaty of Rome. French rules were well illustrated when my right hon. Friend the Member for Worcester (Mr. Walker) was Minister of Agriculture, Fisheries and Food. Then we were threatened with being flooded with highly subsidised frozen turkeys, which would have upset turkey farmers in this country. Quite rightly, my right hon. Friend's veterinerary surgeons discovered the risk of a rather obscure turkey disease. That worked admirably and was within the law. I call that playing to French rules. The French play to the rule that they never do anything internationally that is not perceived to be in the interests of France. It is a question of all animals being equal, but French animals being more equal than other animals. Of

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  course, we wish to have free access around the coasts of Europe — that has been our steady position — but it is not happening. Incidentally, the Greeks are every bit as bad as the French, and probably worse—
  Mr. Channon: They are worse.
  Sir David Price: Yes. My right hon. Friend says, "They are worse"; and that affects the cruise trade. Therefore, I beg my right hon. Friend that in the matter of cabotage we play to French rules.
  6.29 pm
  Mr. Terry Fields: When we debated the ministerial statement on the King's Cross fire, I was moved to say that it took tragedies such as that to prompt the introduction of legislation. We have discovered that with other legislation dealing with the fire service, which followed the death of firemen and civilians. I doubt whether we should be discussing amendments to a law introduced in 1894 had it not been for the death of nearly 200 people in the Herald of Free Enterprise disaster a short time ago. As my hon. Friend the Member for Aberdeen, North (Mr. Hughes) said, the importance of this debate arises from the fact that we are not likely to be in the game of making further changes to merchant shipping legislation or discussing it again this Session.
  Two hundred lives have been lost, and in discharging our duties and responsibilities we must take every step to ensure as far as humanly possible that a repetition of the disaster is avoided—albeit in the confines of the concept that it is impossible to ensure 100 per cent, safety in any walk of life.
  We are amending the Act, and any positive change is good. However, we must ask ourselves how good it is, and the importance of the task on which we are engaged will be reflected in the legislation, which should secure the safety of life and property and ensure the future of the British merchant fleet.
  In the debate in another place last year the Parliamentary Under-Secretary of State for Transport said of the Pilotage Act, which was a forerunner of this Bill, that it
  "provides a framework within which an industry with proud traditions can adjust to modern circumstances and operate more efficiently." — [Official Report, House of Lords 10 November 1987; Vol. 489, c. 1292.]
  It is important to bear those matters in mind.
  I shall centre my remarks on a number of key issues. There is admirable scope, even in this debate, to consider valuable amendments to stiffen up the Bill, which is somewhat suspect in certain aspects. For example, there are anomalies about registration. I shall not wave a racist flag, but, in the interests of the safety of the crew and passengers of ocean-going vessels, we should ensure that vessels sailing under the Red Ensign are covered by legislation that ensures safety, protection and a good standard of shipping. Gibraltar has 150 registered ships. Gibraltar is part of the dependent territories, but last year it had no inspectors to police international regulations. It now has two inspectors—hardly sufficient to cope with the needs of a fleet of 150 ships. Those ships can fly the Red Ensign and thus, in the view of Merchant Navy officers, bring the Red Ensign into disrepute because of the lack of safety measures on those ships. Foreign-owned ships with foreign crews registered in Gibraltar under the so-called protection of the Red Ensign go to the Gulf and
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  elicit the support and protection of the Royal Navy. We need to tighten up the Bill, and I am sure that we can make amendments in Committee to do so.
  Last week I met members of the Herald Families Association. One of the deceased was an old friend of mine, and I therefore have close contact with the family and the association, which made a parliamentary sortie last week. I support the families' view. They are not vindictive. In framing legislation, we have a responsibility to ensure that there is no repeat of the tragedy visited on those families. I believe that we could take other measures in that direction.
  The Merchant Navy officers have sought to separate the master from the owner-manager so that the master remains responsible for acts of omission over which he has control. However, the Bill deals with the provision of a suitable ship and suitable equipment and crew, over which he has no control. In those circumstances, there must be a divergence of responsibility and we must insert into the Bill that divergence of responsibility, by means of suitable provisions, to ensure that the law is observed by all concerned.
  The demise of the merchant fleet in this country has been referred to. Tonnage has dropped by 64 per cent, in 10 years. In the same period the number of seafarers employed has dropped by 62 per cent.—from 80,000 to 30,000. Of the 500 deck and engine officer cadets employed in the industry, only 107 serve on British flag ships. That is a critical situation.
  As has been said, if we cannot legislate for safety, there are certain other things that we can do. We can ensure that owners of shipping fleets have responsibilities and discharge those responsibilities, and that discussions on safety take place in company boardrooms, as they have not done hitherto. It is one thing to pass legislation: we must ensure that it is adequately policed. We must ensure that there are inspectors to check that what is laid down by Parliament is practised by the companies.
  The Herald of Free Enterprise disaster was predictable, following as it did the Gateway disaster. Companies could have looked at recent history. Seventeen such vessels have sunk — the Gateway in a couple of minutes and the Herald of Free Enterprise in four. Companies should have acted positively, rather than merely responding to circumstances.
  We must be very clear about what we are discussing in terms of the stability of vessels. We shall need expert advice if we are to ensure that our vessels have that stability. In the last two episodes, two ro-ro vessels went down in a matter of six minutes, collectively, with a loss of human life. That must mean that there is something wrong with the design of the vessels, and we need to correct that design fault. Hon. Members have talked about the use of the marine fleet in war time. We should remember that the Royal Navy refused to man these vessels in the Falklands extravaganza before they had been modified to make them safe. In Committee we must examine the question of stability.
  There is widespread concern about the design of the ships, as the Herald Families Association told us the other day. That concern goes far beyond politics, and far beyond the interests of those who have lost loved ones. The naval architects and experts are all concerned about the matter. We in this House have a duty and responsibility to ensure that in Committee we insert into the Bill safeguards to protect such families.

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  Time will not allow me to go into great detail, as I should have liked, on behalf of the families and the merchant shipping officers, although, given the opportunity, I shall raise some of those matters in Committee. Following the death of so many people in the Herald of Free Enterprise and Gateway tragedies, we must remember that the big ferries in operation now carry 2,000 passengers. If 2,000 passengers went down with a ship in a matter of minutes, it would be beyond the wit and ability of the rescue services to extricate them. We must seriously consider methods of evacuation in such circumstances.
  Finally, I refer to early-day motion 176, tabled by me and signed by a number of my hon. Friends. It deals with the Herald Families Association and discusses the corporate responsibility of the shipowner. The merchant officers and others issued dire warnings of the faulty practices on that vessel and others operating on the line. Those warnings were never acted on in the boardrooms. They were never acted on by the parent company. Through neglect, human life was lost.
  My early-day motion calls for corporate manslaughter charges to be brought against companies. It
  "notes the findings of Mr. Justice Sheen, which highlighted the company's refusal of requests for both an additional officer and warning lights to indicate that the bow and stern doors were closed."
  We have heard that some of those measures might be introduced.
  Some Members may not be calling for the setting up of a Special Standing Committee. I would argue that retrospective legislation could be introduced, given the criminal negligence of those shipowners. I have been told that retrospective legislation cannot be introduced. I do not know whether it is retrospective, or ex post facto, but since 1980 the Government have introduced at least eight pieces of retrospective legislation—the National Health Service (Invalid Direction) Act 1980, the Employment Act 1982, the London Regional Transport (Amendment) Act 1985, the Housing and Planning Act 1986, the Rate Support Grants Act 1986, the Teachers' Pay and Conditions Act 1987, the Local Government Act 1987 and the present Local Government Finance Bill. All those measures contain retrospective provisions, and some were intended to punish what the Government would call profligate local authorities.
  If we are sincere about redressing the injustice that families have experienced, we should be considering retrospective legislation to deal with those whose criminal disregard for the safety of crew and passengers allowed these tragedies to happen.
  I hope that all hon. Members will be in agreement, so that we can ensure that what has happened does not happen again.
  6.41 pm
  Mr. David Harris: I hope that the hon. Member for Liverpool, Broadgreen (Mr. Fields) will forgive me if I do not follow the points that he has made but concentrate on two other aspects of the Bill.
  The first matter has been touched on by various hon. Members — the provision in part III to establish the Merchant Navy reserve. Clause 28(2) provides:
  "The Secretary of State may make such payments as he thinks fit in connection with the training and certification of members of the Merchant Navy Reserve".
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  Most of us have a vague idea of what my right hon. Friend the Secretary of State has in mind with regard to the training and composition of the reserve. I know that this matter will be raised in Committee, but it deserves a good deal of thought. It is pointless having a reserve if it consists only of former members of the Merchant Navy whose names are on a list somewhere in the Department of Transport. Obviously, there must be training, and we should give thought to the means of providing it, whether on existing vessels or on a special vessel, perhaps chartered by the Department, to provide suitable training.
  It will come as no surprise to you, Mr. Speaker, or to other hon. Members, that my purpose in seeking to catch your eye is to speak about what I regard as the scandalous way in which, over many years, we have allowed foreign vessels to gain access not only to our waters but to our precious stocks and quotas. That has been detrimental to the fishermen whom I represent in Cornwall, which is the nearest area in the United Kingdom to Spain.
  I almost stumbled across this matter when I was the Member of the European Parliament for Cornwall and Plymouth. The practice of what has become known as flag of convenience fishing was just beginning. I was horrified to learn how completely defenceless we were. I well remember going to a dusty office in Plymouth where foreign boats were registered. A very nice lady told me that she had no powers whatsoever and that if someone came in with a set of papers she had to register his boat.
  Under pressure from myself and others, the position was changed and tightened up. In that regard, I pay tribute to Ministers, particularly those in the Ministry of Agriculture Fisheries and Food, and especially the current Minister of State who has been very concerned about this matter.
  Various measures were introduced — some were holding measures—but the matter developed to such a stage that at the end of the last year my right hon. Friend the Minister of State told me that there were 50 ex-Spanish vessels — flag of convenience vessels that had been transferred from Spain to Britain—on our register. In addition, a further 70 United Kingdom fishing vessels were beneficially owned in part or to a large extent by Spanish interests. Those vessels—whether transferred or bought by Spanish interests—are Spanish-owned. All the benefit that is derived from them goes back to Spain; they are British vessels only in the formal sense that they manage, by one means or another, to get on our register.
  The harm that they have caused to our fishing interests is considerable. At long last we have the legislation for which I and others have been fighting for many years. I hope that it works. It is no good having legislation if it does not.
  I hope that my hon. Friend the Minister will say how these new powers will be applied. We know that to be on the new register vessels will have to be at least 75 per cent, owned by British interests.
  How will the Minister, or his officials, determine that the provision is applied and obeyed? Speaking from experience, may I point out that the Spaniards are very adept at getting round rules and regulations. I would thoroughly endorse what my hon. Friend the Member for Eastleigh (Sir D. Price) said earlier — that perhaps we need to play by the French rules. It is instructive that, to my knowledge, not one Spanish vessel has been transferred to the French register. The French would not tolerate it for one minute. Their administrators would ensure that it did

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  not happen. With this law in place, it is up to our administrators to ensure that Spanish vessels do not come on to our register by any device that they may try to use.
  I well remember that many years ago I discovered one Spanish company that was supposed to be operating from an office over an antique shop in Kensington high street. All that it had on those premises was a little brass name-plate.
  My plea is to ensure that the legislation works. If it does not, the anger of fishermen, particularly in Cornwall, will indeed be great. I hope and believe that it will work. We must ensure that these bogus vessels are completely removed from the register and that they are unable to fish from our quotas.
  6.48 pm
  Mr. Gerald Bermingham: I appreciate that time is short, so I propose to concentrate on one subsection of the Bill.
  The Secretary of State was kind enough to allow me to intervene and raise the subject of surveyors. He is well aware that I have expressed concern over some time about the quality of the work that has been carried out, but that is no reflection on those who have been acting as inspectors and surveyors. However, because of the sheer volume of the work, there was a failure to carry it out. That may seem a tortuous way of putting it, but it is fair.
  I am glad that an assurance has been given this afternoon that further surveyors will be recruited and that it is accepted that further costs will be incurred in acquiring the number of surveyors that we need if we are to inspect the ships that are currently registered and, indeed, many other ships that sometimes call at our ports on which conditions are anything but satisfactory. Safety extends not only to ships registered under the British flag or the flags of dependent territories, but to ships, which often carry British officers and seamen to the four corners of the world, registered under the flags of other nations. We are all aware of the scandal of flags of convenience over the years.
  The assurance given by the Secretary of State this afternoon is indeed welcome. I can assure him that I shall be watching most carefully in the weeks, months and years ahead and, should I see any delay on his part or any diminution of that undertaking on this subject, I shall be after him. Safety is far too important to be left to political chance.
  It is in that context that I want to raise the problem, as I see it, under clause 3l(8)(b) relating to the duties of a master. While I welcome anything that increases responsibilities and the enforcement of those responsibilities, it really is drafted in a way that leaves a lot to be desired. Under that subsection "duty", in relation to a master, is defined as including
  "his duty with respect to the good management of his ship and his duty with respect to the safety of operation of his ship, its machinery and equipment".
  If one says it quickly enough, it sounds all right. But what exactly is meant by "good management"? Who is to be the judge of that? Who is to give the master of a ship a fair crack of the whip?
  As the Secretary of State is well aware, certain questions have recently been raised about the Surveyor-General's organisation. Indeed, he is probably well aware of the letters from the National Union of Marine, Aviation
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  and Shipping Transport Officers to him and to the Surveyor-General reminding the latter that at one time an undertaking had been given, as I understand it, that one of the Deputy Surveyors-General would be a man with nautical experience. Such a person would bring to the Department the practical everyday knowledge which is gleaned not from books, magazines and articles, but from the practical job.
  Somebody in the Merchant Navy once told me that when he left college he certainly knew the rules; when he had sailed for a few years on the high seas he began to learn about the sea. It is that sort of knowledge that should be brought to the Department. In saying that, I am not criticising any of the persons in the Department, for whom I have the highest respect and regard, but Captain Shone, who has retired, has not been replaced by anyone with the necessary nautical experience. Perhaps the Minister, in replying tonight, will give an assurance that somebody with the necessary nautical experience will be appointed.
  I do not want to stress the point too much tonight—I think that the Secretary of State and the Department are well aware of it—but if clause 31(8)(b) is to have any practical meaning and real bite, it is necessary that the surveyors from the Surveyor-General's department, when discussing what is meant by the management of a ship, should have the sort of day-to-day knowledge that comes from practical experience in defining the terms of duty.
  Perhaps a simpler solution would be to teach parliamentary draftsmen — I am sorry that I have to repeat this each time I speak in the House — how to draft so as to convey into words something that is both practical and enforceable.
  The Bill has many good parts, some of which have been mentioned by right hon. and hon. Members on both sides of the House. I wish the Bill a speedy passage to the statute book. It is long overdue in many ways.
  I have mentioned one small aspect tonight and I will touch briefly on one other. I have listened to all that has been said about the Zeebrugge affair and, of course, one has nothing but the deepest sympathy for all those involved. If the rules of the sea are obeyed and if ships are surveyed and working practices are looked at carefully, tragedies such as that do not occur. It is necessary to remember that the scars are also borne by those who served on the Herald of Free Enterprise and they will be carried for ever. Perhaps we ought also to have a little sympathy for the members of that crew, many of whom showed such great heroism on that night.
  On that note, I wish the Bill a safe passage.
  6.55 pm
  Mr. Jonathan Sayeed: The hon. Member for St. Helens, South (Mr. Bermingham), having made his point so ably himself, will, I hope, excuse me if I do not directly follow him.
  Having studied this Bill, I have come to the conclusion that it must have been drafted by Sir Humphrey Appleby's alter ego. I can imagine its genesis. It would have started with the Minister stating, "Humphrey, I've got a problem. Members are saying that I am to blame for the merchant fleet having declined by nearly two thirds in 10 years and that I am doing nothing about it. "But, Minister", would have come Humphrey's reply, "It's the Opposition's job to oppose." "No, Humphrey", says the Minister, "you don't understand; even my own side is blaming me. I've made a decision: we must do something."

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  Aghast, Humphrey answers, "Do something? Why? Everything is going splendidly; soon there will be no Merchant Navy to trouble you. But we'll still have the staff, we'll still have the budget. Indeed, Minister, we'll need more men and more money to oversee its orderly demise. You, Minister, will have a bigger Department and will be even more important—pictures in the papers, the PM programme, perhaps even Terry Wogan." After a period of silent reflection by the Minister as he sees all these accolades passing him by, he sorrowfully announces, "No, Humphrey. I have to be dynamic. Go away and prepare a Bill."
  And so a Bill was born, but Humphrey's hand had lost none of its cunning. A Bill there would be, a grand title it would have. It would contain many useful measures, but it would singularly fail to address the central problem that we, an island nation, appear to be doomed to maritime obscurity.
  I have never underestimated the problems that confront us in reversing this trend. My right hon. and learned Friends will know that in previous speeches I have fully acknowledged the over-tonnaging, the predatory pricing, the shift in trade patterns and the impact of containerisation. But action can and must be taken not just to protect our commerce but to secure our defences.
  My hon. Friend will have read the Sea Group report. Can he confirm to me today that he is confident that we could mount another major out-of-area offensive? Is he able, even as a paper exercise, to state what ships could be taken up from trade to mount another Falklands-type operation?
  Personally I doubt that we are able to provide the numbers or, just as important, the mix of ships necessary unless we are prepared to rely on foreign powers. We have only to remember the reaction, during the Falklands campaign, of the United Nations, of Commonwealth countries and of some EEC countries to recognise how dangerous that would be. To subordinate our strategic imperatives to myopic considerations is folly.
  In general, I agree with the Treasury view that financial and tax distortions would be counter-productive and that the market should be able to come to a decision based on commercial considerations, not on tax handouts. Therefore, the general restructuring of capital allowances and the reduction in corporation tax was a bold and sensible step by a very able Chancellor, but, when he included merchant shipping in the capital allowance proposals, he made a mistake. He ignored the fact that, unlike other assets such as plant, machinery and buildings, ships are mobile. They will be removed from a hostile tax regime to one that is more accommodating.
  That is what has happened with British shipping, yet, elsewhere in Europe, where crew and capital costs are similar to ours, the evidence is that a more liberal tax regime increases the tax take. More ships paying less produce more revenue than a few ships paying more. The Treasury should not find that concept difficult to understand, because a direct analogy can be drawn between this proposal and that of personal taxation. We have seen that, in English-speaking countries, as the upper bands of personal tax are reduced, tax revenues from the same percentile have increased. This conclusion has
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  become so obvious that the Labour Government of New Zealand are proposing to abolish all higher rate bands of personal taxation.
  We look to the Secretary of State for Transport to persuade my right hon. Friend the Chancellor of the force of these arguments. The Secretary of State for Transport must defend British shipping from the blinkered, single-year balance sheet approach of the Treasury. He must remind that organisation that the defence of the realm and its strategic interest must be paramount. He must show that these proposals will cost nothing; indeed, for the reasons that I have detailed and by the use of merchantmen as force multipliers, we can expect savings.
  I wish to turn from general considerations to make some brief remarks on specific proposals in the Bill. I welcome the establishment of a Merchant Navy reserve, but I am doubtful about its effectiveness. First, I have yet to be persuaded that there will be ships for them to man. Secondly, if the Bill were ever extended to embrace serving officers, it must be recognised that most British officers are employed aboard foreign-owned or flagged ships and there is no guarantee that the owners would release them from their contracts of employment at this country's request. If the Bill is to include only those who have retired, we must remember that they become time-expired.
  Although the training provisions are useful, I am not sanguine that they will encourage young men to join the Merchant Navy. I challenge my hon. Friend who will wind up the debate to say whether he would encourage another son of his to enter such a profession, given the uncertain future faced by a Merchant Navy officer.
  My next point refers to certificates of competence, particularly those of Commonwealth countries. My hon. Friend the Minister will know that we currently recognise Commonwealth certificates of competence, yet doubts have been raised about whether they are always granted properly. As the United Kingdom had no ability to monitor their award, automatic recognition of Commonwealth certificates of competence should cease. Although, in the main, it is right to make the owner responsible for the safe operation of a ship, I can imagine occasions when such a proposal would be iniquitous, for example, in the case of a bare-boat charter, where the charterer provides the crew and thus the owner of the ship has no control over its safe operation.
  As many hon. Members have dealt extensively with the problem of ship construction and safety, I shall not dwell long on his aspect. However, I ask my hon. Friend, when he winds up, to confirm that he will use his best endeavours to ensure that standards imposed on British ships become common standards. If they do not, British shipping will suffer yet further disadvantage. This is particularly important in the case of major structural changes such as longitudinal or transverse bulkheading of vehicle decks of ro-ro ferries.
  I am pleased that my right hon. Friend the Secretary of State confirmed that he intends to work through the International Maritime Organisation. I wish to pay tribute to that organisation, which exemplifies how United Nations organisations should operate. I wish to record my appreciation of the leadership displayed by its Secretary General.
  I wish to turn now to clauses 36 and 37, which strengthen and widen the Secretary of State's power in cases of unfair competition. Time and again, the House has stressed that, although Britain observes the laws

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  against unfair competition, our Community partners and trading competitors do not; indeed, they flout them. Will my hon. Friend explain what action he proposes to take to combat cargo reservation and restrictions on cabotage? If he thinks that that will take up too much time in his wind-up speech, perhaps he will send a full reply detailing the position of our major competitors and partners and what action, if any, he intends to take.
  Clause 29 fails to deal with individual lorry weights. I am surprised about this because they affect loading factors on board ship. I hope that my hon. Friend, either in Committee or by statutory instrument, will make provision for weighing freight vehicles at British ports. We know that about 30 per cent, of all vessels coming from France by ferry are overloaded. As we cannot expect the French to weigh vehicles leaving their ports, particularly when they conform to their laws but not ours, we must weigh them on entry to this country. By the use of a graduated system of fines with severe penalties for major and deliberate overloading, hauliers would not be tempted to take the risk and, consequently, ship safety would be improved and our roads would last longer.
  Finally, I welcome the establishment of a marine accident investigation branch, separate from the marine directorate proposed in clause 32. Both will still be under the same Secretary of State and, although I am prepared to accept that "Chinese bulkheads" will probably be effective, I would have preferred to see the degree of separation enjoyed by the aviation industry.
  If we judge these measures in terms of maritime safety and by the way they plug some holes in previous legislation, this modest Bill is sensible and welcome. However, if we judge it as we should, by what it will do to halt and reverse the rapid decline of the British merchant shipping industry, it fails. Unless we act, we shall rue the day that we watched idly as our maritime heritage and power disappeared before our very eyes. I hope that the Government will show that same ingenuity and effort of will in righting this mistake as they have elsewhere in the governance of this country.
  7.8 pm
  Mr. Brian Wilson: I congratulate the hon. Member for Bristol, East (Mr. Sayeed) on an elegant speech which contained a good many home truths and pertinent questions for his Front Bench. There is much to welcome in the Bill, although some points need further examination. However, as the hon. Gentleman suggested, the overall picture is that we have a mouse of a Bill to confront what I regard as a national crisis.
  When the sins of the Thatcher years are finally tabulated, I believe that the destruction of the British Merchant Navy will be high on the list. It is incredible that this island nation, which still relies overwhelmingly on merchant shipping for its trade, should have witnessed a decline from 1,500 ships in 1979 to 400 ships in 1988. There is every prospect, as confirmed by the General Council of British Shipping, that that decline will continue so that, by the early 1990s, there will be about 100 ships left, almost exclusively coasters and ferries. That represents an extraordinary picture of the maritime strength and weakness of Britain in the late 1980s. I believe that those who have been responsible should be deeply ashamed.
  It is a matter of some considerable interest to many hon. Members—if not, it should be—that there is not
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  the slightest chance that a Falklands-type merchant operation could be mounted again, because the ships are not there. Recently, in the south-west of Scotland, a major military exercise was mounted—Purple Warrior. There was such a dearth of British merchant shipping that ships had to be hired from all over the western world to make up the numbers. I hope that we do not have a real conflict as opposed to a military exercise; but, if there is one, it seems unlikely that there will be time to organise the hiring arrangements before it is too late in the day.
  Today, Conservative Members would like to create a mood of consensus. They would like to believe that the decline in the Merchant Navy is just one of those things that happened and that there was no political error involved. That is not the case. The destruction of the British Merchant Navy has been a direct consequence of the madness that prevailed in the management of British industry and the British economy from 1979 into the early 1980s.
  When the right hon. Member for Chingford (Mr. Tebbit) had responsibility for merchant shipping, he said:
  "It seems to me that if British owners can switch their ships to a flag of convenience and as a result increase profitability, then it seems eminently sensible to me that they should do just that."
  One can feel the sneer coming from those words. In the early 1980s, when Thatcherism was in full flood and everything was to be left to the market and laissez faire, such words were extremely fashionable. However, the paean of praise for flags of convenience, when quoted today, does not bring the same cries of "Hear, hear" from the Conservative Benches as it no doubt did in the early 1980s.
  When it suits their purpose, Conservative Members like to cover themselves in the flag. However, in the past nine years they have shown a remarkable contempt for a flag that has served the people of this country well—the Red Ensign. It is not as though the policy advocating flags; of convenience has been entirely abandoned. No one on the Conservative Benches has had the courage today to stand up and speak out in favour of flags of convenience, but the policy of the Government, behind the scenes and through international organisations, is one of support and promotion of such flags. In UNCTAD, the British Government have been in the forefront of resistance against phasing out flags of convenience. The British Government have blocked any move attempted within the EEC maritime policy against flags of convenience. British flags are fine so long as they do not conflict with the profit interests of those whom Conservative Members ultimately serve.
  Because of time I wish to restrict my remarks to flags of convenience. In the Bill the provisional granting of certificates is reduced from six months to three months. I do not believe that that is good enough. Crown territories, such as Gibraltar, Hong Kong, the Cayman Islands and Bermuda, have been turned into disreputable, flag of convenience boltholes. If a disreputable, unscrupulous or careless shipowner can gain British registration for three months, there is nothing to stop him moving that ship to one bolthole and then to the next. He will still continue to fly the Red Ensign without any of the controls that have always been assumed—prior to this Government—to go hand in hand with the responsibilities of that flag, as he travels round the globe. Surely that is unacceptable. Provisional certificates should be done away with because

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  if shipowners can register for three months there is no way of getting them out again. I cannot understand how any Conservative Member can defend the principle that those territories, which exercise none of the controls that go with genuine British registration, should be allowed to use the Red Ensign to cover up operations that are patently substandard.
  My hon. Friend the Member for Liverpool, Broadgreen (Mr. Fields) spoke about the number of inspectors in Gibraltar. The flag of that bolthole covered the Syneta that went down off Iceland a year ago. My hon. Friend said that, in the past year, the number of inspectors had risen from zero to two. That is even less of a step forward than might appear because the last place that most of the ships registered in Gibraltar are likely to be, or within 1,000 miles of, is Gibraltar. All the inspectors can do is check up on brass plates of addresses of convenience. We need an inspectorate system that allows inspectors of this country to insist upon boarding any ship that enters British waters, irrespective of the flag it may be flying and irrespective of the country or statelet with which it may be registered.
  I believe that it is high time that we repaid some of the debts owed to the people who have served in the Merchant Navy over many years. It is tragic that communities which used to rely largely on employment within the Merchant Navy have seen that great industry disappear. Young seamen used to go on to colleges to learn the skills of the maritime industry and would travel the world as a result. Now, those colleges are closing and the courses are disappearing because there is no point in training to be a merchant seaman if there is no Merchant Navy to join. I hold the Government responsible for totally failing in the past nine years to take action because they were imbued with the market philosophy — philosophy callously represented by the words of the right hon. Member for Chingford and his lackey of those days, a gentleman by the name of Sproat, who is best forgotten.
  The formation of a Merchant Navy reserve fills me with no excitement. I would regard it as ineffectual in any crisis. I also believe that that reserve adds insult to injury. In the coastal communities of this country there are thousands of unemployed seamen who would dearly love to be back aboard British ships — Red Ensign ships — working at their chosen career. That option is not open to them because, under the patronage of the Government, the Merchant Navy has come close to being wiped out. To tell those people that they are of no use to the country as seamen in times of peace but that they might get a call to do something in time of war shows additional disregard for them. It adds insult to injury.
  The Government should come back to the House with a real Merchant Navy Bill. In the past nine years they have signally failed to present such a Bill to the House. That Bill should create incentives to build ships and keep them under the Red Ensign. It would act against abuses to the Red Ensign from flags of convenience. It would not give a nod and a wink to British shipowners who take their business where they want, employ Third-world labour at the lowest possible cost and disregard safety and other factors. It would introduce sabotage. I plead with the Government to do something for the Merchant Navy, for, my goodness, the Merchant Navy has done a lot for this country.
  7.19 pm
  Mr. Conal Gregory: The Bill is important, containing major new initiatives. However, they will not fully reverse the decline that we have discussed tonight in our merchant fleet, down from approximately 1,500 ships in 1975 to perhaps 400 last year.
  We are debating the Bill against a background of enormous oversupply in world shipping capacity. But subsidy is not the right way forward. The Opposition introduced a number of red herrings. They were very short on specifics or constructive ideas, which is rather sad.
  We are right to reduce the unnecessary regulation of the maritime industry. Despite red tape, some 60 per cent, of the United Kingdom shipping industry's international freight earnings were made in cross trades in 1986.1 believe that Britain needs a capable merchant fleet in times of emergency or war, so I welcome the assistance the Bill proposes, both in greater safety at sea and ensuring stronger powers against unfair competition.
  I wish to raise two specific subjects—responsibility for safety and light dues. The Bill imposes new statutory duties on owners, management, master and crew. Masters, who are highly trained, surely accept that responsibility, but one of my constituents, a shipmaster who lives in Chalfonts, York, raises the question whether a penalty of £50,000 and/or two years imprisonment for what will be a criminal offence is excessive. The Committee should consider where negligence lies if the owner or manager ignores a dangerous situation. Clauses 29 and 30 appear inadequate in that respect. The responsibilities of the owner and master need to be clarified, as we should otherwise be leaving a void at the mercy of case law.
  The second subject I wish to raise is the imposition of light dues. Under section 634 of the Merchant Shipping Act 1894 the management of lighthouses and other navigational aids in the sea areas around the British Isles is vested in three general lighthouse authorities: Trinity House of Deptford Strond, the Commissioners of Northern Lighthouses and the Commissioners of Irish Lights. Income from light dues is carried to the general lighthouse fund, from which—subject to the consent of my right hon. Friend the Secretary of State for Transport—the authorities' expenses are met, together with costs relating to certain overseas lights.
  The authorities last year proposed an 18 per cent, increase in light dues, which the Government reduced to 14 per cent. Subsequently a £1 milliom levy on fishing vessels over a certain size was proposed. That increase was strongly resisted by ports and other shipping interests, on the ground that it would distort competition and put a further burden on Britain's port users.
  However, the United Kingdom is competing with other European ports. Antwerp, Le Havre and Rotterdam—to take just three ports across the channel — impose no dues. The average cost of using Antwerp is £2·50 per tonne. Here the average is £7·50 to £15 per tonne, through light dues, the iniquitous dock labour scheme and European port subsidies. Felixstowe and Tilbury, for example, are put at an enormous disadvantage.
  I hope that my hon. Friend the Minister can report a real reduction in light dues. A cursory glance at the accounts of the general lighthouse authorities suggests a surplus of £19 million in reserve, with an estimated £12 million at the end of 1987–88. In reality, £31 million is

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  expected. The discrepancy arises because of an underestimate of light due receipts, together with expansionist plans by the bureaucracy of the authorities, rather than efficient budgeting.
  Last year's increase was unnecessary. Savings should be passed immediately to Britain's port users to ensure that we are truly competitive. Our food and other industries will benefit as a result. The general formula by which light dues are applied is seriously in need of re-examination.
  Finally, it is scandalous that the United Kingdom is still paying 50 per cent, of the light dues for Eire. British taxpayers should not finance port costs in competitor countries.
  Subject to those qualifications, I welcome the Bill. It is a major step forward from the Victorian era of 1894, the date of our last Bill on this important subject.
  7.24 pm
  Mr. Calum A. Macdonald: I have a twofold constituency interest in the Bill. First, there is a strong fishing interest in the constituency. Secondly, like the constituency of the hon. Member for Argyll and Bute (Mrs. Michie), the Western Isles has a long tradition of merchant service. But the Bill is important not only to my constituency, but, obviously, the whole country—north and south of the border. That is why it is regrettable that Scottish National party hon. Members have been absent throughout the debate.
  I want to be constructive. I welcome the provisions for registering fishing vessels in order to preserve United Kingdom quotas. That will be welcomed in my constituency as a first step in the right direction. It is not complete, but it is a welcome first step.
  My response to the rest of the Bill must be lukewarm. The background against which the Bill must be judged is a steep decline in the Merchant Navy and the merchant service. In my constituency we do not need statistics to prove the decline. We have seen it happen in a very real way. As recently as the 1950s every family in the islands had one member or even two members serving in the merchant service. My father was a merchant seaman. We have today reached the predicament in which we are lucky to find even one seaman from each village still at work in the British Merchant Navy.
  The crucial question is whether the Bill will help arrest that decline. Unfortunately, I fear that the answer must be no. Indeed, measures such as the establishment of the reserve are no more than an admission of the Government's defeat on this issue. The setting up of "Dad's Navy", as it has been described by the National Union of Marine, Aviation and Shipping Transport Officers, is an eloquent statement of the Government's despair. It is tragic, not only because of the continuing loss of jobs but the loss of a priceless tradition and history of skills which may prove impossible to replace.
  The present decline cannot be laid at the door of another group of British workers pricing themselves out of jobs. Sometimes an attempt is made to blame that, but it is not true. For example, a French seaman is paid double what a British seaman is paid. A Norwegian is paid three times as much. In fact, a British seaman's wage is on a par with that of a Greek seaman, hitherto regarded as coming from a low wage economy. So I hope we can lay that ghost to rest.
  My hon. Friend the Member for Aberdeen, North (Mr. Hughes) rightly made clear the crucial importance of
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  cabotage in any strategy to arrest the decline. I know that Conservative hon. Members have an ideological objection to any moves towards what they would regard as an artificial and protected state for the merchant service. But, as has already been pointed out, even from the Government Benches, we must live in the real world, and the fact is that France, Germany, Italy, Greece, Spain and Portugal, all within the EEC, all practise cabotage to some degree. Of course in the North sea we have the ridiculous situation of Norwegian supply vessels servicing the British sector, while practically no British ships are able to operate in the Norwegian sector.
  I acknowledge the Government's view that protectionism is generally undesirable. But there is no realistic prospect of a genuine open market in this respect. The Government must surely change their attitude, just as the General Council of British Shipping has been forced to do, and change it soon, if the merchant service is to be saved.
  Yesterday the Secretary of State for Scotland made it clear that he was considering the privatisation of the Caledonian MacBrayne ferry company which serves the inner and outer Hebrides from mainland Scotland. Opposition Members have many reasons to oppose any move towards privatisation but one reason should appeal to all hon. Members. There is at present nothing to stop any privatised ferry owner from turning himself into an offshore company, setting out with a new name and a new flag, and perhaps even a foreign crew.
  We already have the bizarre example of British Channel ferries flying the flags of Bermuda and Finland. What a monument it would be to the Government's peculiar combination of ideological frenzy on privatisation and their hopeless apathy on saving the merchant fleet if one day soon ferries crossing from the Minch to the outer isles of Scotland were flying the flags of Bermuda or Finland. If that bizarre prospect is to be avoided the Government must get to grips with the decline of the fleet. Unfortunately, the Bill will not do that.
  7.31 pm
  Mr. Michael Irvine: The Secretary of State will have noticed that hon. Member after hon. Member has brought home to him the decline in the British merchant fleet and the need for action to combat it. The provisions in clauses 25 and 26 for financial assistance for training and for crew relief are welcome. So is the provision for the establishment of a Merchant Navy reserve. But those provisions go not nearly far enough. They are all addressed to the issue of manpower. However, the issue is not just one of manpower but of ships.
  So long as the British Merchant Navy has to compete against unfair competition, its decline will never be satisfactorily reversed. How can it be fair for the British Merchant Navy to have to compete in a situation where so many foreign states keep their coasts protected, yet here on its own coasts it has to meet full competition from overseas merchant navies? So long as that fundamental unfairness persists, so the decline of the Merchant Navy will continue.
  In general I am much in favour of competition but my support for competition is not of the ideological kind mentioned by the hon. Member for the Western Isles (Mr. Macdonald). Often allowing market forces to work their course has a beneficial effect in the long run, but if

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  competition is to be beneficial it has to be fair and free. The competition that our shipping industry faces is far from being fair and free.
  It should be remembered that in 1985 United Kingdom registered and owned ships contributed no less than £745 million net to our balance of payments. It does not end there because they contributed a further £637 million in import savings. Those are large figures. They underline the importance to the national economy of the shipping industry in spite of its decline in recent years.
  More important still is the contribution that the merchant fleet makes to our national security. In 1983 the then Under-Secretary of State for Trade, the former Member for Aberdeen, South, Mr. Sproat, following a not dissimilar debate when the decline of the British merchant fleet had been raised repeatedly in preceding speeches, said:
  "the adequacy of the merchant fleet for defence purposes is kept under continual review by my right hon. and hon. Friends. In the considered opinion of the Ministry of Defence, the merchant fleet remains capable of meeting defence plans. I cannot emphasise that point too strongly." — [Official Report, 30 March 1983; Vol. 40, c. 433.]
  Since that was said the British shipping industry has lost the advantage of the free depreciation provisions that it previously enjoyed. It lost that advantage in 1984. Since that was said, the United Kingdom merchant fleet has more than halved in strength. Many of us would like to know whether it is still the considered view of the Ministry of Defence that the merchant fleet remains capable of meeting defence plans. Many of us need to be reassured.
  7.36 pm
  Mr. David Shaw: I have two main interests in speaking on the Bill. The first, obviously, is that my constituency is Dover, where we handle about 15 per cent, of the nation's trade as it passes through each year; in addition, some 14 million passengers pass through the port each year. I have also taken an interest in shipping because for a short time I worked in the shipping industry.
  Much has been said today about car ferries and their safety. It is important to place on the record, so that hon. Members can be fair to the many people who work in the shipping industry and in particular on ferries, that until the disaster of last year the record of ferry safety was one of the highest for any means of transport. The disaster of last year is brought home to me every week as I come to the House because I drive past the wood that has been planted in Dover in memory of those who died. I was pleased to take part in the planting of that wood and to meet many of the families and relatives of those who died. It is a memorable place and I hope that many of the family members will visit it over the years.
  The Sheen report on the Herald of Free Enterprise disaster showed that complacency had set in in one operation. The consequences of the complacency were a horrific shock to everyone in my constituency. About half the crew died in the disaster, and half of those lived in my constituency. All of us in Dover have had to live with the aftermath of the disaster. It was a shock to everyone but especially to the 10,000 people whose work is involved directly or indirectly with the port and the ferry companies.
  Since the disaster I have been on board the car ferries at Dover and have looked at the safety features that have
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  been installed, including the features on the new ferries that are in operation. Many provisions of the Bill have already been brought into practice. I am pleased to tell hon. Members that a boarding pass system is in operation. There are warning lights and television cameras monitoring the bow doors and the vehicles on the car deck throughout the journey. The new car ferries have special features concerning bulkheads below the water line.
  I commend the approach of the crew and officers on those car ferries, which today is of a very high standard and brings credit to the fleet. The administrative systems now in place have been greatly improved since last year and have been operated safely and efficiently. Much has been learnt as a result of that disaster. I am sure that hon. Members will agree that it is terrible that such a disaster had to take place before the lessons could be learnt.
  Therefore, I welcome the safety measures in the Bill, because they will reassure the public that the voluntary practices now in operation in our ferry companies will become law. My local ferry companies will want to ensure that that law is obeyed.
  I shall raise two matters of concern to our shipping industry. The position of cabotage in clause 37 has been mentioned in the debate. The shipping industry is concerned that the negotiations started by the Secretary of State's predecessor within the EEC were not successful for Britain. I hope that the present Secretary of State will renew the vigorous efforts of his predecessor to get EEC agreement on this point. It is fundamental that we should not keep our markets open for foreign vessels to ply our coastal trade unless our ships can enter overseas markets. We did not join the EEC to be placed at a competitive disadvantage within the Community.
  I also ask Ministers to consider with my right hon. Friend the Chancellor of the Exchequer the position of investment in the shipping industry in Britain. The hon. Member for Cunninghame, North (Mr. Wilson) conveniently managed to put together some statements and figures that implied that the Government were trying to do down the shipping industry. Nothing could be further from the truth. The United Kingdom tonnage peaked in 1974 after several successful years under a Conservative Government. The decline of the shipping industry dates from the Labour Government's term of office between 1974 and 1979. Having recognised that decline, it is no good for Conservative Members to say that Opposition Members bear the responsibility for it. We must look at ways in which it can be reversed.
  I draw the attention of the Secretary of State to the fact that, as an accountant, I appreciate the effect of tax allowances suddenly being changed at short notice from 100 per cent, to 25 per cent. The effect of capital allowances is more important to shipping companies than to any other companies. The balance sheet of a shipping company will show that a high proportion of its assets are in large, expensive ships. That is in complete contrast to the assets of companies in manufacturing and other areas of the economy. It means that ships that may depreciate over 10, 15 or 20 years cause accounting differences to the taxable profit.
  An odd effect is that shipping companies can be assessed as profitable for tax purposes when their accounts may show a break-even or loss position. That could result in a rate of tax that could not be achieved, even by a Labour Government. I am sure that hon. Members can work out that, from an accounts point of view, taxation

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  can be more than 100 per cent, of the profit. That is the curious effect of 100 per cent, capital allowances being lowered to a rate of 25 per cent, and possibly less in subsequent years.
  If the Department of Transport is serious in looking after the interests of the shipping industry in the next few years, it will carefully examine and communicate the findings of such examinations to my right hon. Friend the Chancellor of the Exchequer. I suggest that this matter needs to be examined.
  7.44 pm
  Mr. Tony Lloyd: The debate has been interesting, if only for the reason that there has been a great deal of self-discipline and that has allowed many hon. Members to make significant and worthwhile speeches.
  It has been suggested that the Bill is not the greatest Merchant Shipping Bill since 1894. As one of the organisations involved in shipping suggested, it is something of a rag bag of measures. We need not apologise for that. Primary legislation provides the opportunity to tidy up various matters, so Opposition Members accept the general thrust of what the Government seek to achieve.
  Two overriding issues have dominated the debate. Safety has been on the minds of all hon. Members because of the disaster to which I shall refer later in my speech. Another important issue is the decline of the merchant shipping fleet. The Bill has no relevance to that problem. Hon. Members on both sides of the House have systematically explained to the Secretary of State why the Bill is irrelevant to the decline of the merchant shipping fleet. Only the hon. Member for Dover (Mr. Shaw), with an extraordinary and breathtaking display of mental gymnastics, managed to blame the Labour Government for the rapid decline in the merchant shipping fleet. I will consider that deeply, but I doubt whether I shall draw the same conclusion.
  The British fleet has declined dramatically during the past few years since the removal of the initial allowances in the 1983 Budget. The General Council of British Shipping is at one with the parliamentary Labour party and others in regretting that move. It is clear that it did massive damage to the British fleet.
  The Government have allowed not only the flagging out of large sectors of the British merchant fleet, but parts of it to be sold off. I particularly refer to BP. The Government can be described fairly and clinically as the Government of flaggers out and floggers off. That has been a great disadvantage to the British economy, almost to the level of neglect. My right hon. Friend the Member for Bethnal Green and Stepney (Mr. Shore) made clear the importance of the merchant shipping fleet to the British economy. Historically, it was much more important, and it could do much more for the United Kingdom economy if the Government adopted measures that allowed for its development, not its destruction.
  Conservative Members were concerned about cabotage. As my hon. Friend the Member for Aberdeen, North (Mr. Hughes) pointed out, only two years ago Opposition Members argued that the Government should do something about cabotage, through legislation, the European Court or by applying our own cabotage system. At that time, no voice was raised on the Conservative
  546
  Benches — [Interruption.] I defer to the hon. Member for Eastleigh (Sir D. Price) who has always been a consistent supporter of that view.
  Sir David Price: I have always been a consistent supporter of it.
  Mr. Lloyd: I shall not argue about the consistency of one hon. Member.
  The Government have consistently refused to consider imposing such measures. It is time that the Government got off the fence. Will they take action through the courts to make sure that the British fleet has equal access to other coasts? Shall we make sure that Italy, Greece, Spain and France allow our merchant fleet to compete on equal terms in their waters, or shall we instead make sure that at least we have protection for our fleet against the sort of unregulated competition in our coastal areas that would not be, and is not, allowed by our competitor nations?
  Those are the important issues. The decline of the fleet is a fundamental issue. Sadly, the Bill is largely irrelevant to it.
  Great play has been made by the Secretary of State and some of his predecessors about the importance of the fleet in time of war. On 10 December 1986 the then Secretary of State, now the Secretary of State for Social Services, in a speech to the General Council of British Shipping, said:
  "We quite deliberately do not take a view of what should be the size or shape of the industry in peace time. Our functions in respect of shipping in war or emergency are altogether different."
  For the life of me I cannot understand how it is possible not to have any plans for the industry in peace time, and yet believe, whether naively or honestly, that vessels will become available in time of war. That matter was also mentioned by Conservative Members.
  As has been pointed out, as recently as last November, during the military exercise Purple Warrior, it was necessary to bring in ships from outside the United Kingdom because they simply were not available from the British merchant fleet. The Minister for Public Transport shakes his head. I hope that he will explain why. On that very issue Lord Brabazon said that suitable United Kingdom vessels are not always available to meet MOD requirements. That is not because, as he intimated, that the British fleet is so successful throughout the world—we all know that that is not true—but simply because the fleet no longer exists.
  Whatever the merits of the Falklands war, the merchant fleet was assembled with some difficulty to supply that military action. All hon. Members know that today it would not be possible to supply the Falklands exercise with the merchant fleet slimmed down to its present level.
  The time has come when the Government must put clearly on the record whether in all seriousness they believe that foreign vessels would become available. In the past, Ministers have always ducked the question of what powers would be used to requisition ships flagged out to British dependent territories. I have tried to discover the mechanism whereby they could be requisitioned, but I am told that no clear answer exists. Vessels flagged out to flags of convenience nations are beyond the Government's control. That is a matter of fundamental importance to our nation's future.
  The hon. Member for York (Mr. Gregory) said that he was unhappy about clauses 29 to 31, which deal with the balance between masters and owners and the relationship

  547
  of the crew. I do not want to go into the arguments in great detail. I simply give notice that we are not wholly satisfied with the balance between the different parties involved. In Committee, we shall want to examine the relationship between the responsibility of the owner, brought into the legal framework for the first time—we welcome that— and of the master and crew.
  In general, we are not unhappy with the new registration procedure with its several tiers, but that system must guarantee, in the minimum possible time, that vessels sailing under a British flag, whether directly from Britain or from one of the dependent territories, should maintain the highest possible safety standards. I think that the Minister will agree with me on that. Different standards should be allowed only in the short term, and maximum efforts should be made to achieve the best possible standards.
  My hon. Friend the Member for St. Helens, South (Mr. Bermingham) discussed the history of the surveyors and whether in the past they have been equipped to do the job with which they have been entrusted. I share his view that in the past that has not been the case. I do not make my comments in any party political sense. Every hon. Member is concerned about safety after the Herald of Free Enterprise tragedy. I pay tribute to the hon. Member for Staffordshire, South (Mr. Cormack) who spoke on behalf of the families of those involved in the disaster. I am sure that every hon. Member will want to associate himself in general terms with his remarks.
  All Members will accept that there can be no compromise on safety matters, particularly when examining what went wrong. Things did go wrong and there was a considerable chain of errors. The company has already been thoroughly indicted, and that is right and proper. The Government's response now is to recognise that liability should apply to the owner. However, we have a responsibility to the families of those who died in the Herald of Free Enterprise to make sure, through general safety measures and structures, that such a tragedy cannot happen again.
  It is worth quoting briefly from a letter from J. W. Kime, a United States coast guard, to Mr. de Rohan, chairman of the Herald Families Association. He said:
  "I have already instituted a program to verify that the stability of ships taking on passengers in the United States is in accordance with the International Convention on Safety of Life at Sea. In addition, the United States has been pushing very hard at the International Maritime Organisation for damage stability standards for cargo ships, which under present regulations could sink with a hole in their side only as large as a dinner plate."
  I mention that because I want to refer to the reason why the Opposition thought the Special Standing Committee structure would be worthwhile introducing. It is important to examine roll-on/roll-off ferries, but it is also important that somebody with the experience and professional knowledge of Rear Admiral Kime should be able to say that the safety record of other categories of ships should be examined. That is why we hope that the Minister will be able to reconsider the Government's position on the Special Standing Committee.
  Because safety is of such fundamental importance, we welcome the new independence of the accident investigation department. The hon. Member for Bristol, East (Mr. Sayeed) reminded me of a point that I had intended to
  548
  make when he talked about the necessity for independence. It is increasingly the view of many in the industry that there is a strong argument for an independent structure for the examination of the safety of shipping.
  The Opposition, with others, believe that the time has come for the Health and Safety Executive to be concerned with maritime safety. The Health and Safety Executive is already experienced in safety in many areas of industrial life. Obviously, there are differences, but they are not so fundamental that an already established independent organisation could not learn and benefit from existing expertise in the Department of Transport to do a job independently of the Department in the same way as applies to aviation. The Opposition would like to put on record tonight the fact that we shall look at it when the Bill is in Committee.
  The very important areas of safety and the decline of the fleet have been touched on tonight. The Opposition will want to examine the Bill carefully to ensure that on safety we are doing all we can within the legislative framework. We accept that much has already been done by the Government about the ferries, though not directly through the Bill. It is our obligation—the obligation of every hon. Member—to make sure that safety standards are put at the top of the list of priorities. We will, therefore, devote considerable time to them in Committee. We still feel that, when it comes to the decline of the fleet, the Bill is largely irrelevant. That is the view of practically every hon. Member who has spoken tonight. Opposition Members will not tonight vote against the Bill, as structured, but we feel that it does not adequately take care of the interests of the merchant fleet in Britain.
  8 pm
  The Minister for Public Transport (Mr. David Mitchell): Anyone listening to the debate tonight cannot but have been struck by the breadth of personal experience of the merchant fleet which resides on both sides of the House. The debate has inevitably taken place under the shadow of the Zeebrugge disaster, and on all sides of the House our hearts go out to those involved. In opening the debate my right hon. Friend the Secretary of State dealt at some length with the wide-ranging actions taken by Government, both in response to, and going further than, the Sheen inquiry.
  Hon. Members have raised certain points on safety which I would like to turn to now. My hon. Friend the Member for Staffordshire, South (Mr. Cormack) spoke sensitively on behalf of the association of bereaved families and asked me about the date for the introduction of compulsory boarding cards: 29 February is the date by which United Kingdom-flagged ships will have to comply whether sailing from United Kingdom or from foreign ports. For foreign ships the order has to go through the affirmative procedure of this House, and my right hon. Friend has, therefore, considered it prudent to set the date of 1 April for these ships.
  I should also make it clear that we have no jurisdiction to require boarding cards for foreign ships sailing from foreign ports and that we must look to our negotiations with other European Governments in this respect. The hon. Members for Aberdeen, North (Mr. Hughes) and Stretford (Mr. Lloyd) asked about the possibility of a Special Standing Committee. Mr. Justice Sheen carried out a most thorough investigation of the causes of the tragedy and made many detailed recommendations, which

  549
  we are following through. His work was valuably supplemented by the coroner's inquest. We need not go back to square one, therefore, and we shall press on to bring these changes into the law as soon as possible.
  Mr. Frank Field rose—
  Mr. Mitchell: I have a lot of points that hon. Members have raised with me. May I just take them a little further? The hon. Member for Aberdeen, North, the hon. Member for Liverpool, Walton (Mr. Heffer), the hon. Member for Staffordshire, South and the hon. Member for Liverpool, Broadgreen (Mr. Fields) all raised the question of the intrinsic safety of the roll-on/roll-off design.
  Ro-ro ferries, when intact, are perfectly stable. They become unstable only when large quantities of water reach the vehicle deck, which is well above the level of the sea. In the case of the Herald, the water entered through the open bow doors from the bow wave at full speed. The various measures that we have already taken will do everything possible to prevent a repetition of that.
  The Sheen report rightly identified among the proposals that it called "longer term" the need for research into aspects of ferry design. Accordingly, a steering committee set up by my hon. and noble Friend in October has been developing a programme of research to look at all the items on ship stability listed by the Sheen report as longer term items. Portable bulkheads, raised particularly by the hon. Members for Aberdeen, North and Walton, will certainly be one of the possible measures that this research will cover.
  The hon. Member for St. Helens, South (Mr. Bermingham) raised the issue of the condition of foreign vessels in United Kingdom ports, seeking that they should be inspected. The system known as port state control carries this out. We have an undertaking to inspect 25 per cent, of vessels coming into our ports, and we inspect more than that. What is perhaps more important—and I can claim some responsibility for this during my earlier activities in that side of the Department — is that it is not done on a random basis. With the aid of the computer based at St. Malo we are operating a system with the western European countries which maintains a comprehensive record of the inspections of ships. If a vessel comes in which has not been checked in some other country for port state control and nothing is known about it, it is highly likely to be checked. A priority system ensures that those which are pretty certain not to be in danger of difficulties are given a lower priority in the system. I hope that the hon. Gentleman will feel that in that way we are doing exactly what he was seeking in his earlier intervention.
  Mr. Bermingham: I am delighted to hear what the Minister has to say and I thoroughly welcome the idea of looking at vessels which have not normally been inspected elsewhere. Will he not agree with me, however, that I sought to press the point that unless we have an adequate number of surveyors we cannot carry out that sort of checking, which is more than welcome?
  Mr. Mitchell: Yes, of course. I entirely accept what the hon. Gentleman has said. The number of surveyors has gone down but not by as much as the number of ships in the United Kingdom fleet, so pro rata the staffing level is better than it was before. It is a legitimate point to make.
  Mr. Tony Lloyd: The surveyors have a responsibility not just for the domestically registered fleet but for those
  550
  ships which have disappeared from the British register and have gone elsewhere. Could he give comparative figures for surveyors and vessels to take that into account? It is a much more important figure.
  Mr. Mitchell: If the hon. Gentleman will allow me, that is a Committee point. I will have armed myself with detailed information by the time we reach that stage.
  The hon. Member for Argyll and Bute (Mrs. Michie) asked about the appropriateness of certain requirements for big vessels in relation to island ferries. I sympathise with the point that she makes and I shall write to her in detail on the matter.
  My hon. Friend the Member for Bristol East (Mr. Sayeed), speaking with the wealth of experience of someone who represents one of our traditional ports, raised important matters. I cannot cover all of them because of the time available but I can say that we have taken on board his point about bare-boat charters and we shall amend clauses 29 and 30 to cover ship managers and ship charterers.
  Several hon. Members raised matters concerning fishing. In paricular, I can tell my hon. Friend the Member for St. Ives (Mr. Harris) that I am keenly aware of the concern felt throughout the fishing industry over foreign, mainly Spanish, vessels registering in the United Kingdom and then using the United Kingdom fishing quota. This quota-hopping is an abuse of the system. It is no light matter. There are now some 130 vessels which are largely foreign-owned on the United Kingdom register. The extent of their activities is demonstrated by the fact that landings in Spain in 1987 amounted to over half the recorded United Kingdom catch of western hake. That confirms what my hon. Friend the Member for St. Ives was saying about the harm that is being done. The new arrangements which will require fishing vessels to be at least 75 per cent. United Kingdom-owned will effectively stop this legalised poaching.
  Part II of the Bill is complex because the new safeguards for the legitimate United Kingdom industry must be watertight. Already leave has been sought from the High Court to challenge the Government's right to introduce this legislation. At a preliminary hearing, the challenge was withdrawn and costs awarded to the Government. My hon. Friend the Member for St. Ives also asked whether the arrangements would be effective.
  I want to pay tribute to the industry for its co-operation and detailed assistance, and in particular to the Scottish Fishermens Federation, to the Clyde Fishermens Association, whose secretary phoned through his support today, and to Daphne Lawry, the doughty fighter for the Cornish fishing interests, who told me this morning that she was delighted with the thorough work that has been done.
  Mr. Harris: I am grateful to my hon. Friend for paying tribute to the fishing industry, which started the whole momentum for the campaign. I pay my own tribute to it also.
  My hon. Friend mentioned the court proceedings in this country. There is some suggestion that if, as I am sure it will, the Bill becomes law, it will be challenged in the European Court. Has he anything to say about that? Is it a real threat to the effectiveness of the proposals?
  Mr. Mitchell: We are confident that what we are doing is wholly within the spirit of the proper way in which the fishing quotas were meant to operate.
  My hon. Friend the Member for St. Ives also raised a pertinent point about how the policing would be done. Clause 13(6) gives powers to appoint a person to investigate eligibility to the register. He will have the power as an inspector under section 27 of the Merchant Shipping Act 1979. Those powers include powers to enter premises and require production of documents.
  The decision to have a central registry at Cardiff will avoid the possibility of foreigners who are refused at one point going to another to try to register. I hope that we have stopped up the holes in that way.
  My hon. Friend the Member for Tynemouth (Mr. Trotter) and the hon. Member for Argyll and Bute asked about more information on the registry of fishing vessels. Most registered business is already conducted by mail, and fees for the new arrangements will be discounted so as to constitute an encouragement for postal business. For transactions that necessitate a personal appearance, however, a local office service will be available from 23 offices of fishery departments around the coast. Those offices will have stocks of various forms, and by means of facsimile links with Cardiff will be able to provide certified transcripts, access to the registry and place markers on where transactions are to be conducted. Vessels will continue to be registered as belonging to one of the 112 traditional ports of registry. I hope the hon. Member for Argyll and Bute will feel somewhat encouraged by that.
  The hon. Member for Aberdeen, North raised the issue of section 42(2) which was repealed as a result of an amendment in the House of Lords. The reasons behind it are not as dire as the hon. Gentleman feared they might be. That section has now been overtaken by a more general provision in the Merchant Shipping Act 1974 which allows seafarers to take strike action providing that the ship is not at sea at the time. Section 42(2) allows a seafarer to give 48 hours' notice of his intention to terminate his employment on a ship, provided that, at the time, the ship is securely moored in a safe berth in the United Kingdom. During the period of notice the seafarer cannot be compelled to go to sea. This provision opens up possibilities for abuse, particularly on ferries, since by giving notice but not actually going on strike the crew cannot be compelled to operate the vessel. That is an abuse of what was intended by section 42(2), and I am sure the hon. Gentleman would not want to support or sustain an abuse of that sort. I can give him the clear assurance that the other forms of legislation covering strike action to which I have referred satisfy the point that he would otherwise legitimately have raised in this connection.
  As regards the merchant fleet and the national interest, numbers are not the whole story. The right hon. Member for Bethnal Green and Stepney (Mr. Shore) and my hon. Friend the Member for Tynemouth commented on the defence aspect. The other aspect concerns the health of the merchant fleet as a major United Kingdom asset. The Merchant Navy makes a vital contribution to our national defence needs. We need access to ships and trained crew —hence the Bill's provision on training.
  In answer to my hon. Friend the Member for Tynemouth I can say that YTS provides training for 16 to 19-year-olds at officer or rating level. The Bill takes that further with a spend of £3·5 million a year on an additional two-year training scheme to become officers, and four
  552
  years for those who are not ex-YTS trainees. The scheme will start in 1988–89, and also provides some money towards officers who are training to become masters.
  My hon. Friends the Members for St. Ives and for Tynemouth asked for more information about the reserve. As hon. Members know, the Bill sets up the Merchant Navy reserve, which is open to British seamen who are on the Cardiff register, in which their qualifications are recorded. Evidence of health will be sought through the normal seafarers' medical certificate. A bounty of £200 a year will be payable. Members can resign up until an emergency, if they so wish, and the proposed age limit is 55—but we would welcome the advice of hon. Members and of the Committee that will consider the Bill on whether that is the appropriate age.
  I say to the hon. Member for Stretford that, in spite of the decline of the fleet, we still have enough ships to support any likely overseas operation.
  Mr. Frank Field: In previous years we have had clear statements from the Ministry of Defence that it is happy with the size of the merchant fleet. Has the Minister had any conversations with his colleagues in the Ministry of Defence more recently about that? Are they still satisfied with the fleet's size?
  Mr. Mitchell: We are continually having conversations with our friends in the Ministry. If the hon. Gentleman wants to put down a question to my colleagues, I am sure he will receive an answer.
  The hon. Member for Stretford said that the problem with exercise Purple Warrior was that it suggested that there were not enough United Kingdom vessels to be able to mount an overseas operation in an emergency. It is quite wrong to suggest that there was a shortage of United Kingdom vessels; we had plenty but they were gainfully employed in commercial operations. Rather than interrupt those operations for a test of emergency, some Danish vessels were chartered because they were less active at that time. Most hon. Members would recognise that that was a sensible way in which to proceed. There would have been uproar in the House if we had proceeded in the alternative way of requisitioning vessels that were otherwise gainfully employed.
  Mr. Wilson: If the General Council of British Shipping's forecast of a decline to 100 ships — almost exclusively coasters and ferries—is fulfilled, will that still represent a satisfactory military commitment by the Merchant Navy?
  Mr. Mitchell: Of course, we are watching with concern what is happening. We keep a constant eye on that. If something of that sort happened we would take a great deal of interest in it and consider how to react. What matters when mounting overseas operations such as the Falklands war is the type of vessel that is required. Most of the loss of tonnage from the register in recent years has been of giant crude oil and dry bulk carriers, which are not vessels that one would require for the support of the Royal Navy.
  Mr. Sayeed: Will my hon. Friend, in his normal courteous fashion, now accede to the request I made earlier, when I asked him to state, as a matter of paper exercise, what vessels he would take up from trade should there be another Falklands-type episode?
  Mr. Mitchell: On further consideration, I do not think that my hon. Friend would expect me to make that information public.
  There is another aspect to the value of our merchant fleet in addition to defence. The fleet is a great British asset and a huge investment. Some people try to blame the Government for the merchant fleet's decline. The truth is that there are many complex reasons for the decline, as my right hon. Friend the Secretary of State made clear. Those reasons are connected with shifts in the pattern of world trade and our own trade. For example, when oil is brought ashore through a pipeline from the North sea, there is no need for a vast fleet of tankers to bring oil from the middle east.
  It is important that the United Kingdom fleet should be viable and profitable. Thanks to outstanding management by our shipping companies and the officers and men of our merchant fleet, much of the industry— not all of it — is profitable, competitive, viable and making an increasing contribution to our balance of payments which have risen by £221 million since 1985–86. The overall deficit on the sea transport account is the lowest since 1982.
  My hon. Friend the Member for Bristol, East, my hon. Friend the Member for Dover (Mr. Shaw), the right hon. Member for Bethnal Green and Stepney and others commented on tax aspects. Hon. Members will be aware that those are matters for my right hon. Friend the Chancellor of the Exchequer. I will draw his attention to the points that have been made in the debate. I hope that hon. Members will believe that that is helpful.
  It is very important that we should understand the complex reasons why there are shifts in the strength of our fleet in different types of vessels. To achieve a better understanding, we have carried out some research into the short sea trade and we are publishing an assessment of that trade today. The report covers the pressures within that trade and the way in which it is moving. A copy of the report will be placed in the Library of the House and I believe that hon. Members will find it very helpful.
  Of course the Government have an important contribution to make and that is well demonstrated by the Bill. I can tell my hon. Friend the Member for Tynemouth that clause 37 strengthens the Secretary of State's powers and the effectiveness of the EEC in co-ordinating action against unfair and discriminatory activity by third countries. The Bill arms us for the first time with a practical means to combat unfair practices inside and outside the EEC. Some 60 per cent, of our United Kingdom shipping international freight earnings come from cross trades and that demonstrates how vital it is that access to those markets should be maintained for the health of our merchant fleet. I want to pay tribute to the officials in the Department of Transport who visit ceaselessly one place after another trying to find ways in which to keep open those trading opportunities that are so important to the health of our fleet.
  My hon. Friend the Member for Bristol, East asked for details about foreign cargo reservations. As he has tabled a question for answer tomorrow, I hope that he will wait 24 hours for his reply.
  My hon. Friend the Member for York (Mr. Gregory) raised the question of light dues and the costs and burdens on the users of our ports. I have some helpful news to announce. Good progress is being made in reducing the costs of the three general lighthouse authorities. The size
  554
  of their tender vessel fleets is being significantly reduced following a consultants report. Progressive savings are being made through the alteration of lighthouses and by other means. In addition, revenue from light dues is buoyant thanks to the increasing volume of trade passing through our ports. Taking all those factors into account, the Government have decided that a reduction of 10 per cent, in light dues for 1988–89 will be possible. The necessary order will be laid shortly.
  Looking further ahead we expect to receive the report of the working party studying the structure of light dues. Hon. Members will be interested to know that I understand that that report will include a recommendation that we should abolish light dues on deck cargo. That will require an amendment to be tabled in Committee.
  Many hon. Members referred to cabotage, including my hon. Friends the Members for Dover, for Tynemouth and for Eastleigh (Sir D. Price) and the hon. Member for Stretford. We cannot accept the continuation of the present inequitable situation Matters are moving forward. The German Government now occupy the presidency of the EEC and they have moved quickly to reopen the negotiations on cabotage regulations. The first round of negotiations took place this week. Whereas under the United Kingdom presidency unanimity was required for shipping regulations, with the Single European Act in place, decisions can be reached on the basis of a qualified majority. That gives us grounds for hoping that the problem can at last be resolved.
  The Bill contains 53 clauses and eight schedules. It appears complex, but its purposes are simple and straightforward. They are pre-eminently to improve safety; to close loopholes on ship registration; to deal with fish quota poaching; to provide for a Merchant Navy reserve; to improve training and assistance to ship operators for crew relief; and to assist the merchant fleet with stronger powers to keep open the markets in which it trades. For greater security of our defences, for safety and for the health of our merchant fleet, I commend the Bill to the House.
  Question put and agreed to.
  Bill accordingly read a Second time.
  Motion made, and Question put, That the Bill be referred to a Special Standing Committee — [Mr. Robert Hughes.]
  The House divided: Ayes 52, Noes 140.

  Division No. 158]

  [8.26 pm

  AYES

  Banks, Tony (Newham NW)

  Jones, Martyn (Clwyd S W)

  Battle, John

  Kennedy, Charles

  Bermingham, Gerald

  Kinnock, Rt Hon Neil

  Cook, Frank (Stockton N)

  Kirkwood, Archy

  Corbyn, Jeremy

  Lamond, James

  Cryer, Bob

  Lloyd, Tony (Stretford)

  Ewing, Mrs Margaret (Moray)

  McAllion, John

  Fatchett, Derek

  Macdonald, Calum

  Field, Frank (Birkenhead)

  McKay, Allen (Penistone)

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

  McNamara, Kevin

  Flannery, Martin

  Michie, Mrs Ray (Arg'l & Bute)

  Flynn, Paul

  Molyneaux, Rt Hon James

  Foot, Rt Hon Michael

  Morgan, Rhodri

  Forsythe, Clifford (Antrim S)

  Morley, Elliott

  George, Bruce

  Mullin, Chris

  Grant, Bernie (Tottenham)

  Murphy, Paul

  Home Robertson, John

  Pendry, Tom

  Howells, Geraint

  Pike, Peter

  Hughes, Robert (Aberdeen N)

  Powell, Ray (Ogmore)

  Hughes, Roy (Newport E)

  Prescott, John

  Ingram, Adam

  Shore, Rt Hon Peter

  555

  Skinner, Dennis

  Wilson, Brian

  Smith, Andrew (Oxford E)

  Wise, Mrs Audrey

  Spearing, Nigel

  Young, David (Bolton SE)

  Taylor, Matthew (Truro)

  Thomas, Dafydd Elis

  Tellers for the Ayes:

  Wallace, James

  Mr. Frank Haynes and

  Wardell, Gareth (Gower)

  Mr. Alun Michael.

  NOES

  Amess, David

  Janman, Timothy

  Arbuthnot, James

  Jones, Gwilym (Cardiff N)

  Arnold, Jacques (Gravesham)

  Jones, Robert B (Herts W)

  Ashby, David

  Kilfedder, James

  Bennett, Nicholas (Pembroke)

  King, Roger (B'ham N'thfield)

  Body, Sir Richard

  Kirkhope, Timothy

  Boscawen, Hon Robert

  Knapman, Roger

  Bowis, John

  Knight, Greg (Derby North)

  Bright, Graham

  Knowles, Michael

  Browne, John (Winchester)

  Lennox-Boyd, Hon Mark

  Buchanan-Smith, Rt Hon Alick

  Lester, Jim (Broxtowe)

  Burt, Alistair

  Lightbown, David

  Carrington, Matthew

  Lilley, Peter

  Chalker, Rt Hon Mrs Lynda

  Lloyd, Peter (Fareham)

  Channon, Rt Hon Paul

  Lyell, Sir Nicholas

  Coombs, Anthony (Wyre F'rest)

  MacGregor, John

  Coombs, Simon (Swindon)

  Maclean, David

  Cope, John

  McLoughlin, Patrick

  Cormack, Patrick

  McNair-Wilson, M. (Newbury)

  Currie, Mrs Edwina

  Mans, Keith

  Curry, David

  Martin, David (Portsmouth S)

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

  Maxwell-Hyslop, Robin

  Davis, David (Boothferry)

  Meyer, Sir Anthony

  Dorrell, Stephen

  Miller, Hal

  Douglas-Hamilton, Lord James

  Mitchell, Andrew (Gedling)

  Dover, Den

  Mitchell, David (Hants NW)

  Dunn, Bob

  Monro, Sir Hector

  Durant, Tony

  Moss, Malcolm

  Fairbairn, Nicholas

  Neubert, Michael

  Fookes, Miss Janet

  Newton, Rt Hon Tony

  Forsyth, Michael (Stirling)

  Nicholson, David (Taunton)

  Fowler, Rt Hon Norman

  Onslow, Rt Hon Cranley

  Freeman, Roger

  Page, Richard

  French, Douglas

  Paice, James

  Garel-Jones, Tristan

  Pattie, Rt Hon Sir Geoffrey

  Gill, Christopher

  Pawsey, James

  Glyn, Dr Alan

  Porter, David (Waveney)

  Goodson-Wickes, Dr Charles

  Portillo, Michael

  Gow, Ian

  Powell, William (Corby)

  Gower, Sir Raymond

  Price, Sir David

  Greenway, John (Rydale)

  Raffan, Keith

  Gregory, Conal

  Redwood, John

  Griffiths, Peter (Portsmouth N)

  Rhodes James, Robert

  Ground, Patrick

  Riddick, Graham

  Gummer, Rt Hon John Selwyn

  Ridsdale, Sir Julian

  Hamilton, Neil (Tatton)

  Roberts, Wyn (Conwy)

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

  Rowe, Andrew

  Harris, David

  Ryder, Richard

  Hawkins, Christopher

  Sayeed, Jonathan

  Hayward, Robert

  Shaw, David (Dover)

  Heddle, John

  Shephard, Mrs G. (Norfolk SW)

  Hogg, Hon Douglas (Gr'th'm)

  Shepherd, Colin (Hereford)

  Hordern, Sir Peter

  Sims, Roger

  Hunt, David (Wirral W)

  Skeet, Sir Trevor

  Hunter, Andrew

  Squire, Robin

  Irvine, Michael

  Steen, Anthony

  Jack, Michael

  Stern, Michael

  Jackson, Robert

  Stevens, Lewis

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  Stewart, Allan (Eastwood)

  Walden, George

  Stradling Thomas, Sir John

  Walker, Rt Hon P. (W'cester)

  Summerson, Hugo

  Waller, Gary

  Taylor, Ian (Esher)

  Wardle, C. (Bexhill)

  Tebbit, Rt Hon Norman

  Watts, John

  Thompson, D. (Calder Valley)

  Wheeler, John

  Thompson, Patrick (Norwich N)

  Widdecombe, Miss Ann

  Thorne, Neil

  Wiggin, Jerry

  Thurnham, Peter

  Wilshire, David

  Trotter, Neville

  Wood, Timothy

  Twinn, Dr Ian

  Viggers, Peter

  Tellers for the Noes:

  Waddington, Rt Hon David

  Mr. Kenneth Carlisle and

  Wakeham, Rt Hon John

  Mr. Alan Howarth.

  Question accordingly negatived.
  Bill committed to a Standing Committee, pursuant to Standing Order No. 61 (Committal of Bills).

  MERCHANT SHIPPING BILL [LORDS] [MONEY]
  Queen's Recommendation having been signified—
  Resolved,
  That, for the purposes of any Act resulting from Merchant Shipping Bill [Lords], it is expedient to authorise—

  (a) the payment out of money provided by Parliament of—

  (i) any expenses incurred by the Secretary of State in consequence of the provisions of the Act; and

  (ii) any increase attributable to the Act in the sums so payable under any other Act;

  (b) the payment out of the Consolidated Fund of any sums required to fulfil guarantees given by the Treasury in respect of sums borrowed by the Secretary of State for the purpose of defraying expenses payable out of the General Lighthouse Fund;

  (c) the payment out of the National Loans Fund of any increase attributable to the Act in the sums so payable under section 3 of the National Loans Act 1968.—[Mr. Lennox-Boyd.]

  MERCHANT SHIPPING BILL [LORDS] [WAYS AND MEANS]
  Resolved,
  That for the purposes of any Act resulting from the Merchant Shipping Bill [Lords] ("the Act"), it is expedient to authorise—

  (a) the imposition by an order under section 14 of the Merchant Shipping Act 1974 (as amended by the Act) of—

  (i) charges in respect of ships entering ports in the United Kingdom, or

  (ii) any tax or duty in pursuance of a Community obligation;

  (b) the charging of fees;

  (c) the payment of sums into the Consolidated Fund. —[Mr. Lennox-Boyd.]

Welsh Development Agency Bill
Order for Second Reading read.
8.37 pm
The Secretary of State for Wales (Mr. Peter Walker): 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 Welsh Development Agency from the present level of £450 million to £700 million.
The limit was last raised by the Industry Act 1981, when it was anticipated that another adjustment would not be needed until 1989. Present forecasts suggest, however, that the limit will be reached early in the forthcoming year. It is therefore necessary to raise the limit now so as not to inhibit the agency's contribution to the redevelopment of the Welsh economy.
1987 has been a fabulous year, not just for the Welsh economy, but for the contribution that the Welsh Development Agency has made to it. Every year since 1981 lettings of Welsh Development Agency factories have increased, but I am delighted to say that this financial year they will reach an all-time record of 2·3 million sq ft, an increase of 12 per cent, on the previous year. The number of jobs created as a result of those record lettings will also be a record.
In every place that I have visited in recent months, the leaders of local authorities, local Members of Parliament and those interested in the growth of the Welsh economy have all expressed to me their deep desire to have more factories built as speedily as possible. The demand for agency factory space has been so high that the vacancy rate is down to a very small level—a sign of success, but also a sign that more action was needed.
It was for that reason that I decided to increase substantially the Government contribution to the Welsh Development Agency for the coming year, and I have provided it with an increase of 37 per cent. Together with the increased factory rents and sales that are taking place, it means that the total potential expenditure for the agency for this coming year will increase to £113 million — 31 per cent. — more than the budget for the current financial year.
As a result, the Welsh Development Agency has today been able to announce a remarkable factory building programme for the coming year. It has decided to invest in new property developments 40 per cent, more than for the present financial year, a total of £44 million of investments during 1988–89. In 1986–87, £27·6 million was spent on new factory building. When my predecessor sanctioned an increase to between £30 million and £31 million—an increase of between 10 and 12 per cent.— for 1987–88, certain political opponents accused him of doing that as a pre-election exercise. I am delighted that in this post-election exercise there is 40 per cent, more than in the pre-election exercise.
This will create 1·5 million sq ft of working space— 75 per cent, more than in the current financial year and 50 per cent, more than was originally planned. Every part of Wales will benefit.
I have also agreed new mechanisms in which the agency can use its finances to attract a considerable volume of private investment into new factory and commercial building. Seeing the document it has published today must
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bring pleasure to every part of Wales. South Wales, mid-Wales and north Wales will all benefit from the action programme that we are now free to embark upon.
The provision of factories is but one part of the Welsh Development Agency's role. Another vital role is that of attracting inward investment. I am delighted to say that again we have had an outstanding year of success. WINtech, the Welsh Development Agency's operation for attracting inward investment, is likely to secure 90 projects in the current financial year alone, which will bring in £160 million of capital investment and an all-time record of 7,500 jobs. In proportion to its size, Wales is now attracting a larger proportion of overseas projects than any other part of the United Kingdom. Wales is now regularly attracting one fifth of all overseas projects in the United Kingdom. There are many new projects in the pipeline. Throughout the world there is increasing interest in the potential of investing in Wales.
A further vital role is the encouraging of new business activity within Wales itself. Again it is a record of success. There has been a surge of inquiries for business advice and assistance. The business development unit of the Welsh Development Agency handled an incredible 39,000 inquiries during 1987 — way up on the previous year. That unit will now have the responsibility of delivering the Government's new scheme for consultancy assistance announced last week. We want inward investment, we want new businesses encouraged, we want factories made available, but we also, of course, need the application of new technology.
It was early in 1984 that the Government arranged for WINvest to be commenced by the Welsh Development Agency with the aim of stimulating innovation and better use of technology in Welsh business. WINtech has done exceedingly well in a short time. In this year alone it has assisted 40 companies to take advantage of technology transfer deals, and 50 to embark on advance manufacturing technology projects. It is working closely with the University of Wales and others to assist in the creation of centres of scientific and technological excellence. As a result of the increased funds going to the Welsh Development Agency, the activities of WINtech will expand in the years that lie ahead.
Venture capital and the clearance of derelict land are the two other great objectives of the agency, and here, too, the success has been outstanding. The venture capital division of the agency has invested £47 million in over 700 companies since 1979, triggering a massive investment of £220 million and creating 11,000 jobs. Demand for risk capital is buoyant and the agency is set to invest in 220 companies in this financial year alone. It will be able to continue that activity at an increasing pace in the years that lie ahead.
Wales has much derelict land to clear. Since 1979 the agency has been provided with £130 million of resources at today's prices to clear derelict land. It is one of the largest and most sustained programmes in the whole of Europe. When the £28 million programme announced in July 1986, the biggest ever in Wales, is completed, 9,000 acres of slag heaps and dereliction will have been cleared and replaced to the benefit of the communities concerned. The dereliction of today frequently becomes the development opportunity of tomorrow. Throughout Wales there has been a recognition of the fine work that has been done. The Confederation of British Industry, the trade unions, the local authorities, the Institute of

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Directors, and the chambers of commerce are all at one in welcoming the leap forward in the activities of the agency that will now take place. Providing more factories, encouraging more new businesses, applying more new technology, removing more derelict land and attracting far more inward investment is the route to transform the economy of Wales and the route to making Wales one of the fastest expanding and successful economies in western Europe.
I urge the House to support the Bill so that the agency can continue its fine work and achieve the objectives that the Government have set it.
8.44 pm
Mr. Alan Williams: As the party that established the Welsh Development Agency, there is no way in which we shall vote against the proposal. Indeed, if anything, the way in which the Secretary of State boasted of the achievements of the WDA is a vindication of the stand that we had to take to force the measure through when the Conservative party, including the associate Ministers in his Department at the moment, voted against the establishment of the agency. I hope that we shall at least get some credit for a degree of foresight, with which we were not credited at the time.
When we talk about the amounts of money and changes in the amounts of money involved, it is important that we do not lose sight of the background. Sums of money in abstract can sound enormous, but it depends on the size of the pit that needs to be filled. Despite the Secretary of State's euphoria, unemployment in December 1987 was still slightly higher than in December 1979 despite all the miracles in that fabulous year. Therefore, I advise the right hon. Gentleman that there is still a little way to go and we shall need a lot more money than he is putting forward today.
To listen to the Secretary of State one would not think that 35 per cent, of our young people under the age of 25 are in the dole queue. Of 12 regions, only three have a higher proportion of young people in the dole queue. However, that is not the image that one would gain from listening to the Secretary of State. The spend that the Secretary of State talked about must be considered against that background. Obviously, we are delighted at any improvement, and any improvement is welcome. However, the improvement must be big enough to make an impact on the basic problems. The trouble is that at the moment, as I shall demonstrate, it is not.
One of the WDA's problems is that it will have to operate against what we would regard as the background of inadequate regional funding. The Government tend to ignore that. Indeed, it is interesting that the Secretary of State was the Secretary of State for the Department of Trade and Industry in the early 1970s when that Department set up a regional development grant which, this week, he is in the process of abolishing. The Secretary of State abolishes his own measures, but finds great credit in the WDA and the Labour party's measures. He seems somewhat changeable in his opinions. That regional development grant has been worth £1,600 million to Wales over the years since it was set up. Last year alone it was worth £88 million, but the Secretary of State is planning to abolish it.
Sir Raymond Gower: The right hon. Gentleman has mentioned that the unemployment figures are still marginally above what they were many years ago. Does he agree that the economy is probably more soundly based now than it was then, in the sense that people were then employed in two or three large companies in the engineering industry, for whose products there was little demand in many parts of the world, but now people are employed in a host of new industries, which are forward-looking and have a marvellous chance to expand?
Mr. Williams: It is surprising to note that, at the time when the Government started to impose their miracle on us, that disastrous industry, despite all its shortcomings and warts, was able to earn surpluses of £4,000 million per year in manufacturing trade, whereas now it is making deficits of the same amount in its much more efficient form under this Administration. Those facts answer for themselves.
Turning to the background against which the WDA will be operating, 1987 was the last full year for which we have regional grant figures. I asked the Secretary of State how next year's figures will compare, in constant prices, with those for the last full year that we have. In his reply he told me that the public expenditure White Paper contained planned provision of £111 million for regional aid in Wales for 1988–89. The figure for 1986–87 was £128 million—£17 million more. However, he went on to say that £70·9 million of that covered residual payments for the RDG1 scheme which was ended as a result of the review in 1984. Apparently, we are supposed to ignore the drop of £17 million because there happens to be an element of regional development grant.
The funny thing is that that is in contrast to the view of the Minister of Trade and Industry. When he was challenged on the future of expenditure on regional funds —it was suggested that in future he would be counting figures from a scheme that he was abolishing—he came back with the reply:
"I trust that he is not seeking to claim that, in talking about the total regional spend … we should ignore … RDG." —[Official Report, 25 January 1988; Vol. 126, c. 54.]
So we have the Secretary of State for Wales implying that we should ignore it because it does not suit him and the Minister of Trade and Industry saying that we must count it because it suits him. It might be for the convenience of the House and the public if the two Ministers would get together and at least agree a common line so that we know what we are talking about. Next year, the Welsh Development Agency will be operating against a cut of £17 million of regional assistance compared with last year.
Where, in these depleted figures, is the valleys initiative money to come from? We have heard from the Secretary of State about his intended proposals. We have not seen them yet but I am sure that they will come forward.
Mr. Peter Walker: I know that the right hon. Gentleman has had a copy of the statement and I need not read out the list. An enormous number of new factories will be built in the valleys as a result of the colossal increase.
Mr. Williams: I shall come to the factory building programme in a moment. Surely the valleys initiative comes to more than a couple of advance factories. Is that what it is? Is the Secretary of State seriously saying that,

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after all that we have heard, the valleys initiative was buried in an announcement by the Welsh Development Agency on its factory building programme?
Mr. Walker: The right hon. Gentleman has a habit of endeavouring completely to mislead and misquote. The remarkable factory building programme announced today for the valleys will bring delight to the valleys. It is a very important contribution to them. I am sorry that the right hon. Gentleman always sneers at good news.
Mr. Williams: I welcomed the announcement, and I shall welcome the factory announcements later. However, I shall put them in perspective. I shall put my own interpretation on them as the Secretary of State does. I sometimes think that the Welsh Office has recruited Hans Christian Andersen to write its press releases. Will the valleys initiative fall within the figures that have been announced, or will it amount to something extra? Will it be a mere reshuffling of money that is already in Wales, as in the case of the so-called money for the WDA? The WDA money is not extra money for Wales; it is money that is being taken out of other Welsh pockets.
None of us would dissent from the assertion that inward investment in Wales is desirable. We have all supported it. Indeed, in fairness, the Secretary of State — according to the press release from the Japanese embassy—was courteous enough to say while in Japan that not only the Conservative, but also the Labour party had for a long time adopted policies which would encourage such investment, and that there was absolutely no problem arising from any political situation which would obstruct the flow of Japanese investment. We would all agree with that. That is what we have said all along. There is nothing new about getting Japanese investment. In fact, the Labour Government probably attracted more than this Administration. However, I do not want to argue figures; it may balance out, it may not. I do not really care, because that is not the issue. We need inward investment to diversify our industry. We have always recognised that. That is why we gave it such a high priority.
It is interesting to note that, despite the priority for inward investment, the WDA told Labour Members that it spends less than 3 per cent, of its efforts on inward investment. We are only too happy that there is to be a stronger effort. I am glad, too, that the WDA is to build some advance factories in anticipation of inward investment. We welcome the three 50,000 sq ft factories specifically earmarked for inward investment. But does that preclude them from other uses? I assume that it would not if a customer came along. The only other factory of the same size in the programme at Deeside is not referred to as being earmarked for inward investment. Does that mean that Deeside is excluded from inward investment? Those are points of detail which I am sure the Minister will be able to answer.
I congratulate WINvest on the latest three Japanese units — someone else's rabbit pulled out of the hat in Tokyo by the Secretary of State. WINvest has been negotiating for one of those units for 18 months or more, and for another for a full year. It deserves every credit for getting them. However, we need to put matters in perspective. We want more Japanese investment and jobs, but the 17 Japanese factories still provide only 5,000 jobs in manufacturing in Wales. We should be glad to have another 5,000, but let us not run away with the idea that
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is given in press releases that, because one or two Japanese companies are coming, nirvana lies on the horizon. As I pointed out in the Welsh Grand Committee, we need one a day for a year of the biggest factories that the Secretary of State announced simply to replace the manufacturing jobs that we have lost in Wales.
The abolition of regional development grants will not make the job of WINvest and the Welsh Office in attracting new industry into this country any easier. The Secretary of State knows the procedures very well. He knows what happens when a company first comes to Britain, and his officials, too, are well aware of the facts. That is why they have always accepted in the evidence that they have given that regional development grant is an essential component. They know very well that when a company thinks of coming to Britain, the first thing it does is to discuss the general framework of the programme and the aid that would be available.
WINvest and the WDA are normally the first point of contact; the Welsh Office usually comes in towards the final stage. Until now WINvest has been able to say, "For starters, we can tell you that you will get 15 per cent., and, when we see the final shape of your project, you will get regional selective assistance." Now new companies will be told, "Under the Government's scheme now in operation, we are to give you the smallest amount of money that we can give you to get you to come here." That is not exactly a strong inducement to inward investment.
It was for the same reason that, in a recent speech, the right hon. and learned Member for Richmond, Yorks (Mr. Brittan), a former Chief Secretary to the Treasury and a former Secretary of State for Trade and Industry, made the same point about the importance of that element of predictability. It is a major loss, in terms of negotiating for inward investment, that that predictability has gone. Another element of predictability has gone with the number of changes that we are experiencing in regional aid.
When I looked at the figures in the White Paper, I was encouraged to see that this year the Welsh Development Agency hopes to clear 438 hectares of derelict land. I think that that is the largest clearance that it has ever achieved. Those who represent the old industrial areas are only too pleased that that will happen.
The problem is that about 13,600 hectares of land need clearing in Wales. We do not know the precise figure— there was no survey in 1982, as there was in England, because for some reason the Welsh Office cancelled it— but it is about that level. Even with that record level of land clearance, it will take until 2020 to clear the existing dereliction in Wales. That overlooks the fact that new dereliction is being added year by year. Every time a pit closes—the Secretary of State knows a lot about that— another derelict site is created that will have to be cleared.
An interesting feature is the disparity in spend on these issues between Wales and England. As one would expect, England has two and a half times more derelict land than Wales. Since 1982, or 1983, England's spend has been five times greater than that of Wales. It is putting much more effort into clearance than we are in Wales. I hope that the Secretary of State will bear that in mind when determining the size— [Interruption.] Those are not my figures. The figures for the amount of derelict land that needs to be cleared came from the right hon. Gentleman's predecessor.

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The figures of spend and for the amount of derelict land that is being cleared are available for the right hon. Gentleman to check.
I am only too happy about today's announcement of 1·5 million sq ft of factory space. We must bear in mind that Wales has a company liquidation rate of one a day throughout the year. We need extra factories, and we are delighted that at last that fact has been recognised by the Government.
It is interesting to note that the 1·5 million sq ft that the Secretary of State talked about is still way below the level for 1981–82, when it was 2·6 million sq ft. There is a long way to go before we return to previously attained levels. We welcome today's announcement as a move in the right direction.
The WDA works within the framework set by Government aid for the regions. We have already said that we regret that regional development grants will be abolished. We feel that that will have a serious impact.
I want to repeat what I said about the new scheme in a debate on Monday. I am concerned that the new scheme for regional investment grants will be grossly ineffective compared with the scheme that it is replacing. The strategy of the WDA and of the Government, other than the occasional large mobile unit — I am not criticising the Government because there is not much mobile industry in Wales—is to concentrate on small firms. Some 80 per cent, of regional development grants already go to small firms. Until the end of this financial year, regional development grants are available at 15 percent, on capital, or £3,000 per job created. Under the new scheme, that generous level will be cut to 15 per cent, up to a ceiling of £15,000 and a maximum of 24 jobs. The £3,000 will become £625, and that £625 will be taxable. That is bound to have a significant impact on the number of jobs created.
I shall remind the right hon. Gentleman, as I reminded the Minister of Trade and Industry in the debate on Monday, of an answer that I received from the Under-Secretary of State for Trade and Industry. I asked about the new scheme and how it would be monitored to ensure that it delivered new jobs. The Secretary of State for Wales said, in essence, that the new scheme will be more efficient in job creation. The Under-Secretary said that the creation of jobs would not be a condition of the new regional investment grant, but the scheme was expected to have a beneficial effect. In other words, it is not anticipated, even by the Government, that it is going to be a major job creator, and it is not going to be closely monitored against the number of jobs, according to the Under-Secretary of State for Trade and Industry.
The final point relates to Government funding. The funding that we have heard about today in relation to the WDA is simply money taken from one part of the Welsh budget and transferred to another. The amount of assistance that is going to be given by the Government next year at current prices is £62 million, which the right hon. Gentleman presents as this marvellous achievement as far as the WDA is concerned. But the fact is that in 1978–79, at modern prices, the WDA was receiving £16 million more than that—that is, 25 per cent, more than it is receiving at the moment. In 1979–80 it was receiving £12 million more. In 1980–81 it was receiving £34 million more — 50 per cent, more than the figure that he has
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announced. In 1981–82 it was receiving £40 million more — 60 per cent, more than the figure that he has announced.
Mr. Peter Walker: The right hon. Gentleman knows full well that there was specific identified payment for certain steel closures which was totally out of the main-line spending of the WDA. The first small package was announced by the Labour Government as a specific commitment. I am glad to say that the succeeding Tory Government put in far more for that specific purpose. The right hon. Gentleman knows that he is totally misleading the people of Wales. He has his research assistant produce all of these statistics for him to try to create a picture that more is not being done, but he knows that a lot more is being done.
Mr. Williams: The right hon. Gentleman has a rather perverse way of deciding what he is willing to accept as evidence. That was the contribution that the Government were making to the activities of the WDA. The WDA was not there just to deal with steel, although it did deal with steel. I remember that in the Welsh Grand Committee the right hon. Gentleman actually had the cheek to interject and complain about the regional development grant figures that I was using for Labour's period in office. He said that it was unfair to quote those because they included Ford. Ford helped our figures, so we should pretend that it never happened and take it out of the figures. Here, because the money his own Government were spending some years ago was far more than what they are spending today, he now wants us to pretend that it never happened. It did happen, it is on record, and his efforts are rather puny by comparison.
We want to see the WDA properly funded because we set it up. It was opposed by the Tories, who have clearly become very reluctant converts. Even today, despite the claims of the Secretary of State, by the standards of past achievements the WDA remains starved of funds and essentially it is starved of funds to deal with the problems that it faces.
9.7 pm
Sir Raymond Gower: I think that the right hon. Member for Swansea, West (Mr. Williams) is over-simplifying the issue of the funding of the WDA. In its early days, it is true, it put money into a definite project and there was no inflow at all, but the money that is now being deployed is used again and again. It is a different ball game. The WDA is in the nature of being a financial organisation as well as a development organisation, and any big financial organisation deploys its funds and uses them to the best advantage over a period. I think that the right hon. Gentleman should take account of that.
Further the right hon. Gentleman grossly under-stimates the value of the Welsh Development Agency having acquired an expertise which it did not possess, obviously, when it was initiated. It is now able to prepare a package that is attractive to an investor either from abroad or from another part of the United Kingdom. That should not be underestimated in our assessment of the value of the WDA.
As my right hon. Friend said in his opening remarks, this is a relatively small measure with a limited but valuable purpose. Is the Welsh Development Agency of

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value to the Welsh economy? The answer must be in the affirmative. The right hon. Member for Swansea, West understandably took the credit for the fact that his Government initiated the agency. Some of my right hon. and hon. Friends had doubts about it at the time because it was a new venture and no one was sure what would emerge. I do not suppose that those who set up the agency imagined that it would develop as it has done. They could not predict exactly what would happen. My right hon. Friend the Secretary of State has catalogued its successes and achievements, but the right hon. Member for Swansea, West is trying to play down a surprising achievement.
In spite of the difficulties, this has been a time of great recovery, but the Labour party does not recognise the extent of it. In Wales the recovery has been more surely based than we could have foreseen. It is dangerous for the right hon. Member for Swansea, West to be over-critical, because other parts of the United Kingdom are jealous of what we have in Wales. If he continues in that vein, he will encourage feelings of apprehension in those parts of the country which believe that they are not getting a fair crack of the whip. I assure the right hon. Gentleman that people in the north-east of England feel hard done by because they have no comparable instrument there. We must be careful how we approach our debates on these matters.
The Welsh Development Agency has contributed to the remarkable achievements in Wales. It is difficult to envisage Wales today without the agency. That is a mark of its success. Without the agency, the task of providing new factories would be much more difficult. Without the agency, we should not have had 1,278 advance factories in the nine years up to last March. It is difficult to imagine how that could have been achieved without the agency. It would have been equally difficult to promote inward investment without the agency and its associate WINvest, which was initiated by this Government. It is worth noting that since WINvest was initiated the remarkable number of 223 projects from overseas have been established. Before Christmas my right hon. Friend the Secretary of State announced a £2·5 million factory building programme, which underlines the WDA's contribution to this work.
We also welcome today's announcement of the agency's new property programme. This provides hope for the valley and rural areas, on which the hon. Members for Brecon and Radnor (Mr. Livsey) and for Ceredigion and Pembroke, North (Mr. Howells) have commented. The improvements are not confined to the industrial areas, but are spread, as my right hon. Friend said, over the whole of the Principality.
Factories will be purpose-built for specific clients, and I hope that there are plenty of them, because the order must be placed before the factory is erected. Reference has also been made to the advance factories, and in the years that the WDA has existed providing those factories have been its main job. The building of advance factories has been accepted throughout the Principality by all parties as extremely desirable. Starter units may be regarded as one of the most important developments because they tend to assist smaller ventures, and I believe that such ventures and small firms are of particular value to the Principality today. Indeed, there is one in my constituency — the Lion laboratory at Barry. It started in a modest way, making breathalysers, but it now employs a much larger
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work force than it did even a short time ago. I believe that an organisation of that size has within it the seeds of growth and could provide valuable employment.
I am slightly worried about the lack of building for high technology projects. I do not believe that we have made so much progress as is desirable in this area. I believe that we could lose if we do not have a fair share of such high technology factories and, indeed, Scotland has pushed ahead in that regard. I hope that the Welsh Office and the WDA will devote extra attention to that matter. I believe that high technology is possibly the most important area of all in the context of the present economy, here and overseas.
The right hon. Member for Swansea, West referred to the clearance programme, and this is vital. I note that the garden programme in Ebbw Vale, which is similiar to the one on Merseyside, has been expanded, and I hope that that will be extremely successful. The right hon. Gentleman knows more about it than I do, but I believe that it is being developed sensibly and steadily.
There is one thing that I believe the WDA should do that it has not had the time nor the resources to do in the past. It should assist in the creation of something that we have always lacked in Wales—a capital market and a financial centre. That has always been a tremendous defect. Some years ago Sir Julian Hodge created an organisation that appeared to be something that might have grown into something large. Unfortunately, it did not realise the hopes that had been expressed for it. I hope that that lack will be considered as an urgent need. It is one of the reasons why it was necessary to have the WDA. We did not need it only for factory buildings. We needed it also because we lacked a financial market and financial centre. The provision of those facilities could round off the marvellous achievements of the agency.
As the right hon. Member for Swansea, West has painfully told us, we should not exaggerate unduly what the agency has achieved. I do not think we should say that all is well. However, I hope that the right hon. Gentleman will agree that the prospects for the agency in the next two years are incredibly brighter than they were even a couple of years ago. We should be encouraged by that. Therefore, when the House passes the Bill — I hope, as the right hon. Gentleman said, without a Division—we will feel that we are giving the WDA a pat on the back and hope for the future.
9.19 pm
Mr. Gareth Wardell: I agree with the hon. Member for Vale of Glamorgan (Sir R. Gower) about high technology. A worrying feature of the local economy of West Glamorgan is the county's seeming inability to attract true high-technology industry. Cambridge university research has shown West Glamorgan to be sixth from the bottom of the county league in terms of relative concentration of high-technology industry throughout England, Wales and Scotland. Those with a lower ranking were the Scottish islands, Powys, south Yorkshire, Dyfed and Shropshire.
High-technology jobs are distributed across Britain, with a distinct bias in favour of the south. I agree with the hon. Gentleman that unless we are very careful and attract the high-technology firms to Wales we shall have an additional element in the north-south divide, with a notable absence of high-technology firms in Wales. We must guard against that.

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I hope that in winding up the Minister of State will explain another vital element in the background against which the Welsh Development Agency is now to operate. It seems that there is an anomaly over the new regional investment grant for small firms. Why should that grant apply only in the development areas, and not in the intermediate areas? In other words, why do not all the assisted areas qualify for the new initiative? There is another point, concerning the importance that the Secretary of State attaches to the WDA relative to the Wales Tourist Board. Whereas the WDA's property development programme is to increase by 42 per cent, between this year and next, the Government's relative contribution to the board is pitifully small. The relative lack of priority that the Government are giving to the industry is a disgrace.
Here I wish to refer to the memorandum by the Midland Bank pic Advisory Council for Wales, starting on page 622, in appendix 82, of the minutes of evidence to the Committee on Welsh Affairs when it considered tourism. The council said:
"the disparity between the level of assistance to the tourist industry and to manufacturing is enormous … the Select Committee are invited to consider whether the balance is still not tilted unfairly against tourism, bearing in mind the importance of tourism to the Welsh economy and, more particularly, the contribution it can make in terms of creating jobs."
I do not want to concentrate on the inward investment of people as opposed to the inward investment of capital. But I am sure I speak on behalf of the whole Committee — because we made firm recommendations on this — when I say that the Secretary of State has made matters much more difficult for the board by still insisting that it shall not promote Wales overseas independent of the British Tourist Authority, as Scotland does for itself.
I turn to the main part of my speech, which concerns the relative contribution of regional development grant and regional selective assistance. Before 29 November 1984 90 per cent, of the working population of Wales lived in assisted areas to which the grant was applicable. That then changed to 35 per cent., and it will now be zero—a major change. Its importance for the WDA was summed up in the evidence to the Select Committee when we did our major study of regional industrial policy in 1984.
I wish to quote one of the chief Welsh Office officials. As he comes from Trimsaran I am glad to say that he has been promoted. I am sure that his elevation is in no small part due to his marvellous contribution, in answer to question 141, page 47, in the evidence to the Select Committee on 14 February 1984. It is worth quoting him to show the position of the Welsh Office which I am sure has changed little since. He said:
"Predictability is an important element. All the available research points to the conclusion that at the stage of investment decision-making a company needs to know what automatic assistance it will attract. It may recognise at that stage that over and above that basic level of assistance it may also be entitled or may also be offered a measure of topping up assistance of a discretionary character."
Here we have the major Welsh Office official, Mr. Owen Rees, making clear in 1984 the view of the Welsh Office on regional development grants.
I do not want to leave the WDA out completely. I will quote what the present chief executive said. Of course, he was the chief executive when the Select Committee
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conducted its inquiry in 1984. In question 266 on page 87 of the evidence to the Select Committee on 29 February 1984 I asked Mr. Waterstone:
"How can you have on the one hand selectivity and on the other certain automatic assistance?"
He gave a brilliant reply; no doubt he still holds the same view despite comments that he has made in a glossy magazine which probably cost far more than the 85p for the Bill. His reply to my question was:
"To put it crudely, you need the automatic element as a groundbait to attract the fish and have the selectivity to hook him at the lower cost to yourself."
That is the crucial point made by the chief executive of the WDA, a senior Welsh Office official and, of course, in a famous document produced for the Department of Trade and Industry in 1984 by Neil Hood and Stephen Young entitled:
"Multinational Investment Strategies in the British Isles".
It seemed to have limited circulation but, hopefully, it is now available from Her Majesty's Stationery Office. It is a seminal document of research evidence. I want to quote one passage to the Minister in case he has not read the document. On page 169 it says:
"In evaluating the influence of regional incentives (RDG and SFA) more deeply, it is necessary to consider entry methods, since companies entering through acquisitions would be unlikely to attribute any influence to financial assistance. Although not shown here, this comes out clearly from the data: of the 57 greenfield entrants in the AAs, 42·1 per cent, viewed RDG as "very important" and 24·6 per cent, "important" — meaning that two thirds of those building from scratch considered regional development grants as of some significance. The same general pattern applied, albeit much less strongly, for selective financial assistance: here 26·3 per cent, of greenfield entrants rated SFA as important or very important."
Will the Minister tell the House what new evidence— different from the seminal document produced by the DTI and different from what was said by the chief Welsh Office adviser and the chief executive of the Welsh Development Agency—he has, with the wealth of knowledge of the DTI and the Welsh Office behind him, to demonstrate clearly that RDG is no longer necessary as a groundbait to hook the fish? Although I am not a fishing man, the message is loud and clear. The Opposition demand evidence to prove that the situation has fundamentally changed and that the incentives that the Government are offering are no different from what they were before. Unless the Minister can do that, we shall feel very concerned and very cheated.
9.30 pm
Mr. Keith Raffan: I congratulate my right hon. Friend the Secretary of State on the major increase in resources for regional and industrial assistance that he has obtained — an extra £54 million for the next financial year, representing a massive 39 per cent, increase, together with a promise of further substantial increases in the next two years.
Perhaps the most important component of that package is the increase in the total Government provision for the WDA of one third in 1988–89, allowing, as the Western Mail put it,
"a major boost for factory building."
That was announced in detail earlier today.
Last September I wrote to the chief executive of the WDA, David Waterstone, expressing my concern at the lack of factory space in Clwyd. He replied:
"We are becoming the victims of our own success and the vacancy rate in our estates throughout Wales has now fallen

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to below 9 per cent., whereas we have always argued that we cannot fall below 10 per cent, without the efficiency of our investment-attracting activities being impaired."
The WDA is the victim of its own success.
Mr. Rhodri Morgan: Will the hon. Gentleman give way?
Mr. Raffan: No. I shall finish my point and then I shall be delighted to give way to a short intervention from the hon. Gentleman, as I am making a short speech.
In the current financial year the WDA is on course to let up to 2·3 million sq ft of factory floor space. That is well up on the record level achieved in 1986–87.
Mr. Morgan: Has it occurred to the hon. Gentleman that there are two possible explanations for the shortage of factory space this year? One is that two years ago not enough factories were started to be ready now. The hon. Gentleman has given the other explanation.
Mr. Raffan: The hon. Gentleman does not want to face the truth, as excellent news for Wales is bad news for his party.
The economic upturn has created that difficulty for the WDA. The WDA and the Government have successfully faced that difficulty today, and that has thrown Opposition Members into a tremendous pickle. They are playing around with statistics, picking them out at will to try to demonstrate that they spent more than we did, when everyone knows that they did not.
In addition to what I said about factory floor space and the tremendous achievements during the current financial year, there is now to be a massive increase in WDA investment in property development of more than 40 per cent, in the next financial year, making a total of £44 million. That will create 1·5 million sq ft–75 per cent. —more space than in the current financial year, and 50 per cent, more than originally planned.
Before today's announcement, despite the significant extra investment made in the factory building programme recently — it has been significant compared with the Opposition's record—the economic upturn has created capacity constraints in certain localities, not least in north-east Wales. I hope that Opposition Members will agree that the massive increase in resources for the WDA property programme announced today will help to ensure that no investment opportunity will be lost in future because of the non-availability of suitable factory premises.
I wish to make three points about the WDA factory building programme. The first is about where the factories should be provided in north-east Wales. The largest concentration of the agency's factory units in Clwyd is in the districts of Wrexham Maelor and Alyn and Deeside. The WDA property portfolio currently shows in Wrexham Maelor 96 units covering 973,564 sq ft and in Alyn and Deeside 110 units covering 889,545 sq ft.
That is in sharp contrast to Delyn, which has just 47 units, covering 248,000 sq ft, and Rhuddlan, which has only 17 units, covering 182,079 sq ft. The figure for Rhuddlan is actually less than in 1985, when the figure was 198,000 sq ft because of the demolition of temporary accommodation in Kinmel industrial park in the constituency of my hon. Friend the Member for Clwyd, North-West (Sir A. Meyer).
The WDA has conceded that
"to some extent development in north-east Clwyd has centred on Deeside industrial park, which",
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it says,
"serves a wide urban catchment."
That concentration in Wrexham Maelor and Alyn and Deeside will continue even with the WDA's revised property development programme which has been published today.
I am grateful for the major inward investment property project at the Delyn enterprise zone, but there is still too much concentration of property development in Wrexham Maelor and, indeed, in Alyn and Deeside. I shall not encourage an intervention from the hon. Member for Clwyd, South-West (Mr. Jones), who I see in his place, but I could have given the figures for Glyndwr. I am sure that he too would like a few more units.
The Deeside industrial park and the Wrexham industrial estate do not provide an answer to the intense highly localised problems of unemployment in my constituency. As I said when we debated the WDA last in the Welsh Grand Committee on 21 May 1986, the journey from Hollywell to Deeside industrial park, in Alyn and Deeside, is a 26-mile round trip, and the journey to Wrexham industrial estate is a 40-mile round trip. Public transport locally is far from satisfactory, and those living and working in Delyn are largely in the low-income bracket, so that transport costs can represent an intolerably heavy burden on their wage packets.
If accessible location is not a sufficient reason for the WDA now to correct the imbalance and provide more factories for Delyn and coastal Clwyd, closer to those out of work, surely credence must be given to the argument that Alyn and Deeside, and to a lesser extent Wrexham Maelor, are, because of their geographical location, more attractive to private investment. In those areas, commercial pressures are more likely to trigger private investment, and that is not so true of the less accessible, less industrially attractive Delyn and coastal Clwyd, where public sector pump-priming is more necessary. I hope that the property development grant announced today will increasingly recognise that.
The WDA emphasis must move away from south-east Clwyd to Delyn and coastal Clwyd. The Clwyd structure plan revealed a shortage of land for industrial development in that area. Although by the time the structure plan was reviewed there had been an improvement, coastal Clwyd still has the lowest proportion of industrial land in the county, and it still needs more.
Unemployment in Prestatyn remains high, less seasonal than it used to be. The round trip to Deeside industrial park from there is at least 45 miles. We need more industrial development on the coast.
The problem is land and, more to the point, getting our hands on land that could be used for industrial development. I know that the Government have encouraged local authorities to release land that is surplus to requirements; but there is a need for similar encouragement, and, if encouragement does not work, pressure, on the public sector or on those who have just left it. I would refer to two examples of protracted—far too protracted — negotiations with Wales Gas and British Rail in Prestatyn to get them to release surplus land.
Secondly, we need to achieve a much better balance between public and private sector investment in factory building, which today's announcement will help to bring

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about. That is not easy, as the industrial development officer of Clwyd, Derek Griffin, said in a letter to me last September:
"Involving the private sector in building advance factories is not as easy as has been suggested in some quarters … the problem lies in the rental levels that can be achieved against the returns required by investment funds."
That point has been acknowledged by the chief executive of the WDA — David Waterstone — who has been quoted so much by the Opposition today. But he took a more positive and determined line in a letter to me when he said:
"You may be glad to know that we are currently working on a number of schemes designed to raise private capital for industrial and commercial building in Wales. I am sure it is necessary, and indeed desirable, for us to find a means of supplementing Government funding."
The WDA's announcement today shows that those schemes have come to fruition, and I am glad that the Delyn enterprise zone has been chosen as one place where they will be tried out. I welcome all aspects of the private development initiative, particularly the property development grant, to fill what is called "a viability gap" that could otherwise prevent an industrial development from happening.
Many will agree with Mr. Waterstone that private sector investment is not only necessary but desirable. I know that Delyn borough council believes that there is a real need for the Welsh Development Agency to play a key role in ensuring private investment in factory units, not only through property development grant, but through a rent guarantee—another way to tip the balance so as to ensure private sector investment, which would not otherwise happen because of a much greater growth in values of industrial property elsewhere.
Thirdly, there is a need for a balance between advance factory units and bespoke, tailor-made units. The pros and cons of this were discussed in the debate on the WDA in the Welsh Grand Committee, to which I referred earlier. Different local authorities put the emphasis differently. Clywd's emphasis is on the urgent need for a range of new advance factories to be built to meet the demand and maintain the momentum of attracting new companies to the county. Delyn borough council, from its experience as a landowner and planning authority for the Delyn enterprise zone, puts the emphasis on the need for bespoke, tailor-made units for particular companies.
We need both types. We need a variety of advance factories of 5,000, 10,000 or 15,000 sq ft, but the dangers of building advance factories in sizes larger than that are that they can remain empty for a long time and they are of a standard type that is unsuitable for certain industries, such as electronics.
The dramatic increase in funding made available today should enable the WDA to move quickly to build tailor-made units, designed to meet the requirements of major inquiries. It is often more cost-effective to build tailor-made units than to undertake costly alterations to existing advance factory units. Such tailor-made units can also be built very quickly, within the relatively short period of three to six months. I am reassured by today's announcement that the WDA will continue to give the highest priority to constructing bespoke units for specific clients. It is an area in which the agency has been conspicuously successful in recent years.
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Even before this announcement, the targeted level of new build was approximately 50 per cent, higher than that achieved during the period 1976–77 to 1978–79. Now we have, in the words of the chief executive of the WDA,
"a radical strengthening of the WDA's resources"
and of
the capabilities"
of the Agency in the industrial property sector.
"Excellent news."
he rightly described this.
I only wish that David Waterstone would pass on his ability to recognise excellent news for what it is to the right hon. Member for Swansea, West (Mr. Williams). All this good news—today's 40 per cent, increase in the WDA's property programme; the 33 per cent, increase in the overall provision for the WDA; the 39 per cent, overall increase in regional industrial assistance for Wales—has put the Opposition in a right pickle, because excellent news for Wales is bad news for them.
The great mistake of the right hon. Member for Swansea, West was to anticipate, prior to the original statement on regional assistance, an announcement that was never made:
"Planned changes to Government aid packages will hit new business development in Wales,"
claimed the shadow Welsh Secretary in the Western Mail.
"Labour MPs are to demand a special Commons statement … spelling out the implications for Wales of wholesale changes in the administration of regional aid to industry",
thundered the Western Mail again.
We have not heard much of that, not since that Western Mail leader headlined "Remarkable Victory for Walker". We have been left instead with the delectable sight of the right hon. Gentleman limping backwards in full retreat, trying to gather together the tattered remnants of his own credibility with a phrase that will long live to haunt his parliamentary annals:
"If there is an increase,"
he spluttered,
"it is in relation to cuts that they were envisaging".
I say to my right hon. Friend the Secretary of State, that he has won, not on points, but on a knock-out. I say to the Labour party that if the present shadow Secretary of State was its third choice, let us have its fourth.
9.43 pm
Mr. Geraint Howells: From my experience in the House—and I have been here a few years — I hold the view that each Secretary of State for Wales in turn deserves credit now and again for what he does for his country. Tonight I take the view that the present Secretary of State deserves to be congratulated on his efforts in fighting for his corner of Wales. It would be very churlish indeed of me and of others if we were to criticise the increase in development money that has been promised to the WDA and the Mid Wales Development Board. I know that the Welsh Development Agency and the Mid Wales Development Board are reasonably happy with what they are receiving. If memory serves me right, they will be getting about £54 million extra of Government money, although the point has already been made that the total falls well short of the value of the regional grant to Wales in 1980.
I welcome today's announcement that there will be a substantial expansion in the Welsh Development Agency's property development and that the agency is now in a position to fulfil all the factory building that it had

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planned. If that can be done in the years to come, it will be a wonderful achievement, whichever party is in Government. It is important that the excellent work done by the Welsh Development Agency and the Mid Wales Development Board should receive every encouragement. It is refreshing to see a Secretary of State for Wales in this Government acknowledging the value of public spending at last. I hope that he will, in his wisdom, try to persuade the Secretaries of State for Education and Science and for Social Services that there is need for more money to be spent in the public sector. The Secretary of State for Wales has given a lead tonight and I hope that his ministerial colleagues will take heed of what he has done.
However, I want to sound a warning. Although I appreciate that we need to remedy the shortage of factory space and regenerate urban areas and industrial valleys in Wales, there is a danger that not enough money will find its way to rural Wales, to areas that have suffered equal deprivation and equally high levels of unemployment. Unfortunately, the Teifi valley between Cardiganshire, Pembrokeshire and Carmarthen — I do not blame this Government more than the previous Labour Government for this—has had unemployment for the past 15 or 20 years of between 24 and 26 per cent. — the highest in Wales. Something must be done to try to cure that problem.
I urge the Secretary of State to consider giving more funds to the Mid Wales Development Board, in view of the massive problems facing the area that it covers. It should also be given wider powers, and the area that it covers should be extended to include at least north Pembrokeshire. I have consulted members of the local authorities in north Pembrokeshire, who have problems comparable to those in the mid Wales area. It would be a step in the right direction if one of our ports — Fishguard—were to come under the jurisdiction of the Mid Wales Development Board. That is food for thought, and I hope that everyone concerned in the Welsh Office will give further consideration to it.
Eventually, I want the Mid Wales Development Board to become an organisation that will cover the whole of rural Wales—a body that could ensure that rural Wales received its fair share of help from the Government. It could be a development board that would safeguard the interests of our language, heritage and culture. Something should be done about it and more consideration given to that thought of mine and of others.
The Secretary of State will be aware, I am sure, of one particular problem facing people in my constituency at the moment. I refer to today's announcement of the closure of Felinfach creamery, with the loss of more than 100 jobs. That is a real body blow to the economy of Ceredigion and mid Wales. I urge the Secretary of State tonight to take urgent action on this matter. I suggest that he should convene and attend a meeting between the Welsh Office, the Welsh Development Agency, Dyfed county council, Ceredigion district council, the National Farmers Union and the Farmers Union of Wales to discuss and set plans in motion to create jobs to replace those lost at Felinfach today. Unless that is done immediately, I believe that there will be dire consequences for the area and the community as a whole.
I beg the Secretary of State—or the Minister when he replies — to give that assurance to the people of Cardiganshire and the employees at Felinfach. I want to make a plea on behalf of the hon. Member for Ynys Môn
574
(Mr. Jones). We went to see the chief executive of Dairy Crest at the beginning of the week. Unfortunately, neither of us was able to persuade him. The hon. Member for Ynys Môn has a problem at Llangefni in Anglesey similar to the problem that I have in Felinfach. When the Minister replies, I hope that he will give that assurance to both of us.
9.50 pm
Mr. Gwilym Jones: I start on a note of welcome especially for the blinding light on the road to Damascus conversion of the right hon. Member for Swansea, West (Mr. Williams). I was amazed to hear him say that he was delighted to learn of any improvement. If I wrote his phrase down correctly, he said that he felt that we still have "a little way to go" in the economic regeneration of Wales. At the very least, I would agree with that. Is that the first tangible or only tangible result of the new campaign, "Labour Listens"? What a pity he had to spoil it by carping on about the figures. Again, I made a note of what he said. He said that he would "transpose the figures in his own image." I hope that the right hon. Member for Swansea, West will junk that second-hand word processor that he has been using and that we will see more of his new positive approach at Welsh Question Time or in other Welsh debates.
Mr. Morgan: Perhaps, in assessing the nature of the demands made by my right hon. Friend the Member for Swansea, West (Mr. Williams), the hon. Gentleman forgets that, with half our steelworks closed down, we now have to go in for iron mining in Wales.
Mr. Jones: The hon. Member for Cardiff, West (Mr. Morgan), who is my constituency neighbour, did not follow my point when I said that I would agree with the right hon. Member for Swansea, West that there was still "a little way to go".
I welcome the Bill. The House will welcome the Bill as it increases the financial limits for the Welsh Development Agency approximately one year earlier than was originally expected. In welcoming it, I congratulate my right hon. Friend the Secretary of State on having approved a 40 per cent, increase in property investment for the Welsh Development Agency. All of us would agree that, at the very least, that was necessary. There is tremendous demand for WDA property, and that is a signal pointer to the progress of the continued economic revival of Wales.
In turn, I want to extend my congratulations to the Welsh Development Agency on achieving a letting record of 204 million sq ft in 1986–87. The vacancy rate at the same time was below 10 per cent., and that is equally noteworthy. Is that not a far cry from the position in years past when Labour Secretaries of State for Wales scuttled around Wales announcing and opening new vacant advance factories? The trouble was that all too often that is what those factories remained—new, vacant advance factories.
Much good, interesting and exciting work is being done by and with the Welsh Development Agency. However, that is not always the comment that I hear from others. Perhaps others do not give the WDA the same consideration as we give to it. However, Members of Parliament frequently encounter the impression that, if the applicant for help represents large inward investment, everyone involved — the Welsh Development Agency,

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among others — will do everything possible to try to secure that investment. Naturally, that is what we should do; the trouble is that it seems to be thought that, if the applicant for help is a small indigenous company in Wales, it will not get all the help that it needs.
That is a strange picture, in view of some of the less well-publicised achievements that have been made. Earlier today I noted that professional advice had been given to some 7,700 companies; that a similar number of individuals and companies had received first-time counselling services; that over 1,000 people had received training in business enterprise; and that the small firms centre had responded to 39,000 inquiries from 22,000 individuals and companies. The reality is often different from the perception or the image. We must have regard to that question of image, not solely from the public relations point of view, but so that there are no missed opportunities for those who are contemplating a small expansion or— equally valid—those who need assistance before trouble gets worse.
We need to ensure that everyone is aware of the help that can be offered by the WDA, and that no opportunities of seeking that help are missed. In the last few months, I have received complaints about missed opportunities involving WDA land in south Cardiff, which is part of the proposal for the redevelopment of the docklands. Developers have come to me saying that they have missed opportunities, and that some of them have gone elsewhere because of the present standstill in the Cardiff docklands, which includes WDA land. The WDA is co-operating fully with the Cardiff Bay Development Corporation as the plans are drawn up for the exciting scheme for the redevelopment of south Cardiff. In the meantime, however, there is a standstill and the real possibility of development opportunities being lost.
One complaint that I have received comes from a quarter referred to very positively in the WDA's property development programme, with which all of us, I believe, have been circulated today. Naturally, a question of balance is involved. The proposals for development — which are obviously still tentative, because they never reached the final stage — must be weighed against the need to ensure that the entire plan for the redevelopment of south Cardiff is right.
In all my contacts with the Cardiff Bay Development Corporation, I have been impressed by the corporation's approach. It has a healthy "get up and go" attitude of wanting to take the scheme forward and achieve as much as possible. I have been assured that the planning process will be swift, and I trust that it will be; that we shall have no cause to regret the present standstill; and that, from the earliest stage, every possible assistance will be given to developers, so that we can hear the least possible talk of missed opportunities.
Last week, the Cardiff Bay Development Corporation announced the possibility of the use of compulsory purchase orders to achieve the scheme for docklands redevelopment. That also may affect the WDA's land holdings. Inevitably, any prospect of compulsory purchase orders arouses controversy and concern. In my post this morning, I received a letter from the community support anti-waste scheme, whose members are very worried about the possibility of having to move from their present location at the abattoir in Cardiff. I know of their work
576
in various recycling activities. They say that it would be catastrophic is they were to lose their present site and have no alternative location.
I have been impressed not only by the "get up and go" approach of the development corporation, but by the fact that its planning approach is meant to be flexible. I very much hope that it will be so. However, as it moves forward in redeveloping south Cardiff, I believe that compulsory purchase orders should be used sparingly. Where there is full-hearted co-operation between the landowners, including the Welsh Development Agency, and where it is possible for both parties to go down the road together, I hope that they will do so without unnecessary compulsion so that all will benefit from the south Cardiff development.
Finally, in response to the hon. Member for Gower (Mr. Wardell)—
It being Ten o'clock, the debate stood adjourned.

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

BUSINESS OF THE HOUSE

  Welsh Development Agency Bill
  Question again proposed, That the Bill be now read a Second time.
  Mr. Jones: Finally, I want to respond to the hon. Member for Gower, because he should not be selective in the evidence that he adduces in condemning selective assistance. He asked what evidence there is for the move towards selective assistance — [Interruption.] In his dwelling, in the hallowed chamber of Room 18 on the Upper Committee corridor, he referred to various pieces of evidence that have been brought before the Select Committee on Welsh Affairs. I do not have the page number before me from which to quote, but I recall that the whole thrust of the argument that we were given by the Wales Trades Union Congress was exactly the move towards selective assistance that has now come about. Indeed, I seem to recollect that David Jenkins, the general secretary of the Wales TUC, was very dismissive of alternative arguments for maintaining or expanding automatic assistance. Even in the quotation that the hon. Member for Gower used from the chief executive of the Welsh Development Agency—it was a fishing analogy in which he likened automatic assistance to ground bait —it was described as only ground bait. The relationship between the suitors was finally consummated only by the use of selective assistance.
  Mr. Alan Williams: We should understand that my hon. Friend the Member for Gower (Mr. Wardell) made no such attack on regional selective assistance. He argued for the combination of selective assistance and grants. However, as the hon. Gentleman is so committed to regional selective assistance, will he explain why, if we consider the national figures, regional selective assistance —so loved by the Conservative party—has fallen by 37 per cent, since that party came to office?
  Mr. Jones: I thought that I was responding to the hon. Member for Gower. I was trying to use the evidence that he put forward today, in relation to the quotation from the

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  chief executive of the Welsh Development Agency and the omission of the evidence that was brought forward by the Welsh TUC.
  In conclusion, the Bill will be important for south Cardiff, Cardiff and all of Wales. I see it as continuing the economic regeneration of Wales that has been so well begun and that will now continue further apace.
  10.3 pm
  Mr. Ted Rowlands: We welcome the Bill because we welcome the activities of our agency, our Welsh Development Agency. It helps the regeneration and redevelopment of our communities, which we have a right to serve. Although I am sure that over the years my hon. Friends and I have had relationships with the WDA which could sometimes be characterised as creative tension, nevertheless in all my experience the chief executive, Mr. Waterstone, and his team have been utterly committed and dedicated to helping in the development of Wales as best they can, to meet the challenges of regeneration in the communities that we serve. Therefore, we welcome and support the Bill.
  Although the Welsh Development Agency is a major instrument for regeneration in our communities, it is in partnership, not only with the Secretary of State for Wales, but with our local authorities. That is a vital additional element in the trinity needed for progress and development. I am glad that it appears so far that at least this Secretary of State has not brought to Welsh affairs the rather bilious prejudice that English Ministers seem to have towards English local authorities. It is the combination of all three that is helping in the regeneration of our community.
  I shall touch briefly on the three major functions of the agency and on the impact of its work on communities such as mine. Sadly, the Secretary of State touched only briefly on the first function; perhaps the Minister will expand upon his right hon. Friend's remarks. I refer to the role of the agency as a major venture capital agency for our community. That is desperately important, especially when one considers that the agency and Investment In Industry together account for 80 per cent, of all the venture capital that comes into our community.
  Will the Minister tell us what will be the agency's venture capital budget in the coming year? I have tried to go through the figures and have a look at the accounts and I have concluded that that sum will be about £10 million. Admittedly, that £10 million may generate twice as much investment or more from other sources, but we must remember that we are fundamentally dependent on the agency for the promotion and development of venture capital in our society. One of the greatest inhibitions to regional development — not only in Wales but in the north, the north-east, Scotland and elsewhere — is the centralised accumulation of capital in the City. It is dramatically over-centralised: 73 per cent, of all venture capital companies are in the City of London. Some fascinating research done with the support of the agency shows that 80 per cent, of all decisions relating to the investment of venture capital were made by people living within two hours of their office. That means that they are made by people based in the City of London. The concentration and accumulation of our capital—we are talking about our pension funds; it is our savings that go into the Legal and General, the Prudential and the building societies—means that we do not get anything
  578
  like the share that we need to regenerate and support our communities. Therefore, we are desperately dependent on the WDA as a venture capital agency. Will the Minister give us a categorical assurance that that fundamental role will not be curbed, whittled or clipped by Government Departments and, in particular, by the Treasury? I hope that the Minister will reaffirm that it is an integral part of the agency's role to develop and expand its venture capital function because of the over-centralisation of capital in the City. If I am right that the venture capital budget will be about £10 million, I hope that the Minister will tell us how it will be expanded in 1988–89 and beyond.
  My second point concerns the industrial and commercial role of the agency in my community. No one denies that the announcement of the advance factory building programme for my community is welcome. We worked, fought and begged for that. However, we want to go further. I am interested in the future of commercial development. What will be the role of the urban renewal unit created by the WDA? What is the relationship of that unit to urban development grants which, I gather, are still vested in the Welsh Office? Will the urban renewal grant be a lending or a grant-giving body? That is unclear. That unit will have an important function in the broader industrial and commercial development and diversification of our local economies.
  Thirdly, I am interested in the programme of development announced today. With reference to my own community, I am particularly interested in this statement:
  "The regional office identifies the following opportunities locally for possible private sector development: Goal Mill road Merthyr—small factories."
  I live within yards of the Goat Mill road site. Its dereliction is not that of 150 years ago; it is that of factories that have been closed over the past decade as a result of the decline in manufacturing industry in the community. It is a new form of dereliction. I should like to know how the private sector development will take place. What will be the nature of the vehicle by which this development will be made? The area desperately needs redevelopment. The dereliction is a result of the decline in manufacturing jobs in the community over the past decade.
  I should like to consider briefly the land reclamation aspect of the WDA. The Secretary of State visited the community that I represent last week and saw some of the largest areas of historic land reclamation to be seen in any community. He drove up the slip road from Pentrebach up to the top of the Heads of the Valleys and saw the land dereliction on either side of the road. It is an amazing story, because we could widen that road, clear the tips, get some of the coal from those tips washed in the nearby washery and broaden and develop the infrastructure surrounding it to make it infinitely more attractive. It is one of the most vital lifelines in communications between the south of the Heads of the Valleys, the midlands, Worcestershire and beyond. That should be of the highest priority. If British Coal gets its way and we have another decade of open-casting along that road, all our hopes and visions of investing in and around the Heads of the Valleys will be dashed. The Secretary of State will have to take those issues into account when he receives the representations that will follow the local inquiry.
  Land reclamation is one of the most vital functions of the agency. My right hon. Friend the Member for Swansea, West (Mr. Williams) spoke not only about our

  579
  historic success in trying to clear as much dereliction as we can but the growing pace of new dereliction. A most interesting survey that was carried out by the Welsh Coalfields Communities showed that, despite the tremendous efforts that have been made by everyone to clear dereliction, we are about where we were five or 10 years ago with regard to the amount of dereliction that we have. A budget of £16 million to £20 million, which is what I assume the agency will receive, is not sufficient. A figure of £25 million a year would make inroads into the rate of dereliction in our communities.
  We welcome the Bill because we believe that a partnership between the agency, the local authority and the Welsh Office is the way in which communities such as mine can be regenerated and redeveloped. We shall support the Secretary of State, whenever he deserves it, to achieve that purpose. I hope that he in turn will recognise that when Labour Members speak we do so with authentic voices of the needs and wishes of the people whom we serve.
  10.12 pm
  Sir Anthony Meyer: I want to respond briefly to the extremely constructive and thoughtful speech of the hon. Member for Merthyr Tydfil and Rhymney (Mr. Rowlands), which, like the speech of the hon. Member for Ceredigion and Pembroke, North (Mr. Howells), was in startling contrast to what we heard from the right hon. Member for Swansea, West (Mr. Williams).
  There is a good case to be made by the Labour party with regard to these changes, but it is not helped by distorting the facts. The facts are that we have had an enormous increase for Wales and an enormously expanded programme for the Welsh Development Agency. It spoils the case altogether to try to gloss over that.
  None the less, I must express a concern, for two reasons. First, the constant changing of the system of regional aid has gone on under successive Governments. It is not that it changes as each Government is elected. Each Government seems to try two or three different approaches to this matter, and the introduction of uncertainty is damaging to inward investment.
  There is a strong case to be made for certainty, and it was made powerfully in the debate on Monday by my right hon. and learned Friend the Member for Richmond, Yorks (Mr. Brittan) and my hon. Friend the Member for Pudsey (Sir G. Shaw). The abolition of regional development grant removes an element of certainty that is of value in attracting investment, but I am quite prepared in the short term to trade that against the tremendous success of my right hon. Friend in attracting so much more help to Wales.
  I remember that once when my noble Friend Lord Carrington was being interviewed about the Prime Minister he was asked the usual question about what would happen if a No. 11 bus were to run over her, to which he retorted that it would not dare. My concern is that if that No. 11 bus, swerving to avoid the Prime Minister, were to run over my right hon. Friend the Secretary of State for Wales there would be precious little, now that we are doing away with regional development
  580
  grant, to ensure that the same battles would be fought so heroically in the Cabinet and that under a less automatic system we in Wales would get our fair share.
  What was a little worrying at the end of Monday night's debate was the failure of my right hon. and learned Friend the Member for Richmond, Yorks to get the assurance that he sought from the Minister that the total of aid under regional selective assistance would be maintained and that what is undoubtedly happening for the coming year would happen for the years ahead. Therefore, I have this faint, nagging worry, but as long as my right hon. Friend is there I know how hard he will fight for Wales, and I take this opportunity of congratulating him on what he has managed to achieve.
  10.16 pm
  Mr. Michael Foot: Like all my hon. Friends, I certainly welcome without any qualification and with open arms all of the propositions in this Bill for increasing the amount that we are to get under the arrangements of the Welsh Development Agency. Every time since 1979 that I have visited the Welsh Office or the Welsh Minister has come to my constituency I have asked for more money for the WD A because of the kind of work that it is doing and because I think that it is asinine that all the time it should have to choose between, for example, a new, advance factory that is desperately needed and a new development of land reclamation which is equally desperately needed. So of course we want more money and welcome it. It would be ridiculous for us not to do so. And we need more.
  We are suffering from an accumulation of what has happened in the past, and people do not take into account the economic burden that rests on the shoulders of the people who work in the valley towns, for example. With perisistent mass unemployment, 22 per cent, female and 24 per cent, male, for six, seven or eight years on end, which is what we have had since 1979, soon after which it doubled, the economic burden is enormously increased. If there are cuts in social security such as we are having in the valley towns—and the worst ones are coming into operation in the next few months — that imposes a burden on our people because they have not got as much money to spend as people in other parts of the country.
  All these accumulated burdens of the persistent slump that we have had to bear while other parts of the country have talked about fabulous improvements we are still carrying to a large extent. Therefore, we need every penny we can get in the Welsh Development Agency and we need even more than the Government are providing under these new provisions.
  My right hon. Friend the Member for Swansea, West (Mr. Williams) is quite justified and correct in recalling what happened in 1978 and 1979, when we faced the run down. The people in my constituency wanted the support through the WDA to be sustained on the scale that we were getting then. If we had had that, we should have been able to cut our unemployment during that period and achieve very much greater expansion.
  I am not trying to qualify the compliment I have paid to the right hon. Gentleman and his hon. Friends. We have not had any nonsense today about not being able to solve problems by throwing money at them. We have not had any of that kind of drivel from the right hon. Gentleman. He is able to say that he is going to throw a bit more money in and that is why we should cheer him so much. And we

  581
  do so. The point stressed by my hon. Friend the Member for Gower (Mr. Wardell) regarding the alteration in the regional grant process is a serious matter.
  I congratulate the Secretary of State on having visited so many places in the last few weeks and listened to what local authorities have to say on these matters. If the Government had listened in such a way, I cannot believe that the measure changing the provision of regional grant would have been introduced. It is a brainwave from Lord Young and we all know how dangerous that can be. Nobody knows that better than the Secretary of State. I cannot believe that he was ever in favour of this proposition. The questions put by my hon. Friend the Member for Gower are unanswerable. He has all the evidence from people working on the job and the evidence from the Welsh Development Agency. I guarantee that he has evidence from every local authority to which he has put the question. Certainly, he got such evidence when he visited my local authority. It was one of the main subjects that we wanted to discuss with him.
  I do not ask the Secretary of State to reply to the question now; indeed, it might be dangerous for him to do so. If he replies and emphasises what was said by Ministers in the debate a few days ago, we would be landed with it. I would like the Minister to work out for Wales a new formula under which we could give industrialists coming to this area special advance assurance so that there would be no question of selective argument about whether they were entitled to the grant. We would be able to say to them, "We are going to give you a better chance over a long period of the kind of assistance and advantage that we have had over some areas in the past."
  It makes me furious that, in my area, the provision of such assistance was foreseen in 1978 and 1979. It was foreseen that areas in which there was such a fierce rundown in the steel industry and other industries must
  582
  have special provision over and above the normal development assistance. My right hon. Friend the Member for Swansea, West worked out exactly what such special assistance should be.
  I do not expect the Secretary of State to deal with this matter at the end of the debate, but it would be advantageous if he could consider the matter before the present provisions expire. It is comical to be told that we shall have a great advantage over the next few months before the system is changed. Many firms will rush in because the future is more assured. There will be a combination of improved grant and a guarantee for the future. I ask the Secretary of State to consider that and to realise that such an advantage for areas which are most seriously hit must be restored.
  I represent an area which continues to be hit. It is not just a question of what has happened in the past seven or eight years. That is why it is absurd for the Secretary of State to talk about the fabulous restoration of the economy. In my area, we still have redundancies and closures in the mining industry on a huge scale. Those closures do not affect just a few hundred people here and there. We have had major closures in the past year and we face more in the future. There are areas in Wales and other parts of the country which need special assistance We shall make every possible use of everything that we can get from the Welsh Development Agency, but we need something in addition to that.
  The Welsh Development Agency has done a magnificent job. I would rather that it made mistakes and spent money than not get on with the job. It has shown how public enterprise can co-operate with private enterprise and with local authorities in the best possible way, but it can do much more. It needs more money and a fresh look and this provision, which was so essential in the past, will still be necessary.
  10.25 pm
  Dr. Dafydd Elis Thomas: I echo what the right hon. Member for Blaenau Gwent (Mr. Foot) said about the overall level of regional spending in Wales and the need for an effective regional policy. I take as read what was said from the Opposition Benches in the debate on Monday.
  In a debate of this kind it is difficult to do justice to the broad activity of the WDA. What is clear—apparently this view is shared by hon. Members on both sides of the House—is the importance of a public sector agency that ensures partnership between commercial and public finance to ensure development within Wales. That partnership covers the broad basis of existing industry, commercial activity, agriculture and tourism, as well as the more traditional forms of manufacturing investment.
  Of course we all echo the welcome that has been given to the external overseas inward investment in Wales. In real terms, that investment represents a small part of the agency's total work, albeit extremely important in terms of new investment. Most of the work of the WDA is involved in stimulating, maintaining and developing growing and existing industries. In Wales, small enterprises represent a success story. The survival rate of such enterprises in Wales is substantially higher than in other parts of Britain.
  When considering the activities of the agency we need to look in particular at the essential role of small businesses in building up the economy. We have plenty of evidence from other advanced capitalist countries that the small business sector is a major growth area in a mature economy. Certainly, in the past five years it has been evident that, in Wales, there is opportunity for substantial growth in the medium and small business sectors. The WDA must direct its attention to that growth in addition to the support that will be available from the Government under the new enterprise package.
  One thing that is important to destroy is the myth that Welsh people are somehow not enterprising per se. That myth still seems to hang around. My experience is that there is tremendous enterprise. Most people who live and work in my part of the country have at least three jobs —and that does not mean that they are moonlighting. They are actively engaged as contractors, as well as being self-employed in other capacities, or they may take in tourists. It is a diverse economy, and most of us have more than one job.
  However, because of the traditional education system and the reliance on employment patterns in some of the heavy industries, there has been a failure in the take-up of the enterprise idea and the possibility of moving on from an idea to actual investment. Much of the responsibility for that failure must lie with the financial system. I endorse what has been said by hon. Members on both sides of the House about the need for venture capital to be a priority in the role of the WDA.
  There is an important link between the agency and other agencies of development in Wales. The right hon. Member for Ceredigion and Pembroke, North (Mr. Howells) stressed the role of the Mid-Wales Development Board. I referred to that on Monday night, and I do not wish to repeat what I said. However, it is important that anything that happens within the WDA is parallel, albeit
  584
  on a smaller scale, to regional schemes through the Mid-Wales Development Board. Similarly, some of the social development programmes that the Mid-Wales Development Board has pioneered should also be made available in rural Wales through the work of the WDA. It is regrettable that social packages are available in mid-Wales but not in other parts of rural Wales.
  It is important that there should be a link between WDA work, as the senior enterprising agency and the major source of capital, and the work of the Wales tourist board. The tourist board is aware that the WDA has large sums of capital available to it, yet the tourist board, the promotional body for tourism — a major growth industry — does not have access to the same kind of capital. It must be made clear that, with the development of tourism, the WDA should undertake the role of providing capital and the development of that service sector in close partnership with the tourist board.
  The Wales tourist board knows the needs within the industry and the capacity for promoting development. I emphasise the need for collaboration between the various public agencies and also, on a smaller scale, between the WDA and other agencies in rural Wales, in particular, the National Parks Authority and its development of small craft centres and so on in the countryside.
  The main issue to which I want to refer is the need for the agency to give even higher priority to ensuring the provision of venture capital. Part of the problem of Wales is its need to be a finance centre and therefore self-generating in capital accumulation and economic growth. The agency should be giving the highest possible priority to the provision of risk capital and other business services and the development of a genuine Wales-based entrepreneurship.
  Mr. Raffan: That is a very important point, and the hon. Gentleman is making it as constructively as the hon. Member for Merthyr Tydfil and Rhymney (Mr. Rowlands) did in an important contribution to the debate. On the whole question of venture capital, we must get across the fact that we need to build up in Cardiff a financial centre, which does not exist there now. Edinburgh has one, and that is the advantage that Scotland has over Wales — a point that the hon. Member for Merthyr Tydfil and Rhymney did not quite make. It is a very important matter in the controversy over getting more venture capital into the Principality. We must build up a financial centre in Cardiff.
  Dr. Thomas: I very much agree with the hon. Gentleman. I have always looked at the Welsh economy in terms of a partnership between the commercial sector and the public sector. The absence of commercial-sector centres of finance capital is the key gap in the regeneration of the Welsh economy.
  If we take the WDA venture capital out of the equation of venture capital available to Wales, we find that there is a substantial gap. The figures made available in the recent study of venture capital show that, if the role of the WDA and its associated Welsh venture capital is ignored, Wales received less than 2 per cent, of investments of venture capital in the years covered by the study 1983 to 1986. That illustrates the size of the problem. With the role of the WDA included, Wales receives more than its share each year by numbers, but less by value. There is a problem not only of the number of investment projects taking off in

  585
  Wales, but of the value of the investments. We can see from the study a preponderance of small investments by the WDA; 60 per cent, of Welsh investments were under £100,000, while the figure for England is a quarter. That indicates the scale of investment in different projects.
  I am not complaining about that. We may well need to have more smaller projects for investment in Wales. It is significant that the role of start-ups and early-stage financing in Wales is substantially greater than it is in England or Scotland. There are various growth tendencies in the Welsh economy. The important thing is to be able to service them, and to see that the WDA has the means to do that.
  It is also interesting to look at the sectoral composition of venture capital: nearly 17 per cent, in electronics; a substantial proportion, 15 per cent., still in energy and mining; and up to 11 per cent, in consumer-related investment.
  As outside commercial investment has increased, so the value of WDA investments has been reduced, but the WDA's role as the major lead agency in the formation of venture capital in Wales, which is recognised by the agency, must also be recognised more fully by other commercial sources of finance in Wales.
  Perhaps the one matter on which I found myself in complete agreement with the Secretary of State's predecessor was his famous lecture to the City of London. He got into trouble for doing it, but it was one of his better speeches, and it is important that such speeches should still be made with regard to the effect, or lack of effect, of capital markets on development in Wales.
  I wish to stress particularly that the agency cannot overemphasise its role with regard to venture capital, and the effect that that can have on the necessary growth and diversification of the Welsh economy.
  The hon. Member for Ceredigion and Pembroke, North referred to agriculture and the position of Dyfed and Gwynedd with a declining agriculture. The agency has shown enterprise here, with the rural initiative, which has taken off in Dyfed. I have been very impressed by what it has done in marketing the incredibly varied cheeses produced in the hon. Gentleman's constituency. Here the agency has tackled a sector of development that has been neglected, in terms of refinancing, and set up advice and marketing services to improve the products.
  What we see is a diverse agency touching all aspects of enterprise within the life of Wales. We pay tribute to the work that the agency has done. We welcome very much the additional funding that is being made available to it. But we are also well aware that the work of such an agency can be effective only if it is seen as a partnership. The capitalist sector has not served Wales well in the past. It is high time we got a response from that sector to the public sector finance that is being put in now.
  10.35 pm
  Mr. Martyn Jones: May I preface my remarks by telling the hon. Member for Cardiff, North (Mr. Jones) that there are still many empty advance factories in certain areas. Conservative Members can start crowing when they exceed the all-time record of jobs in Wales that we had in 1979.
  We see in today's report on the Welsh Development Agency and its boost for the development of property that there is a record demand for industrial and commercial property. Is this why only a few further units of rural
  586
  workshops are planned for the Denbigh area? I wonder. Presumably there is no demand for industrial property in the vale of Clywd or the southern areas of my constituency.
  Of course, the Secretary of State may not be aware of the problems of that area. This would seem likely from the reply I received to a question that I put to him last November. Of the five WDA factories which it was claimed would help replace the jobs lost in the vale of Clywd if the North Wales hospital closed, four were in Corwen, which is not in the vale of Clywd. I suspect that they are still empty, along with the other one that became empty after my question was put.
  Why is the record demand not apparent in south-west Clywd, or indeed in the constituency of the hon. Member for Delyn (Mr. Raffan)?
  Mr. Raffan: I find the hon. Gentleman's contribution extraordinary, in view of the statement by the chief executive of the Welsh Development Agency today, when he made it clear that the vacancy rate on a total property portfolio of more than 18 million sq ft is currently 86 per cent. He said that anything under 10 per cent, inhibits the ability of the agency to attract companies from other parts of the United Kingdom or from abroad into Wales The hon. Gentleman is inadvertently making the point that some of his predecessors made. Unfortunately, they have left the House and their wisdom is no longer on those Benches. I am thinking of Roger Thomas, the former Member for Carmarthen. He made the point that advance factories were not as good as bespoke units. What the hon. Gentleman is saying is nonsense.
  Mr. Jones: It can hardly be nonsense, as there are empty factories in my constituency.
  For the edification of the hon. Member for Delyn, I was told in answer to another question that assisted areas have an 8·5 per cent, vacancy rate, but unassisted areas have a 15 per cent, vacancy rate; that is, nearly double. I suspect that we have problems in south-west Clywd because 90 per cent, of the area does not have assisted area status, and now no regional development grants.
  The demand will fall further in regions such as mine without assisted status. As I have said, the vacancy rate in unassisted areas is roughly double the rate in assisted areas. In the north of Wales as a whole we have only one property development initiative, at Deeside. Why not have them where jobs are obviously going to be lost, such as in the vale of Clwyd? When will the WDA launch its dedicated programme of advance factory building in areas requiring urban renewal — for instance in parts of my constituency such as south Clwyd, Rhos, Cefn and Ruabon, which desperately need such investment? There is no indication of when it will happen.
  The aims of the WDA's programme, financed by a switch of resources, are, as my right hon. Friend the Member for Swansea, West (Mr. Williams) pointed out, first, to increase the supply of traditional property in regions where demand is now outstripping available stock; and, secondly, to undertake a range of new and innovatory projects. An innovatory project in the vale of Clywd, at Denbigh, is being ignored. The Pilkington special glass project has no access to grants and is struggling in a very high-tech area. The third aim of the new programme is to help regenerate the more disadvantaged urban and rural

  587
  areas. I submit that this cannot be achieved in my area or any other area in a vacuum without RDG or assisted area status.
  10.39 pm
  Mr. Rhodri Morgan: I was wondering when we started the debate two hours ago why the Secretary of State was performing this all-singing, all-dancing, barnstorming routine, saying that everything in Wales was wonderful; and why he was putting so much hyperbole into his performance.
  The explanation came to me in the unexpected presence of the hon. Member for Wokingham (Mr. Redwood). He made three visits here. I think that the explanation is that Rothschilds is to make a bid for the WDA next week. It is the Secretary of State's job to talk up the Welsh economy. It may even make a bid for Wales. He wants to raise the price-earnings ratio of Wales and the WDA as much as he can before next week.
  Mr. Peter Walker: The hon. Gentleman is always talking Wales down.
  Mr. Morgan: I do not talk anything down.
  What the Secretary of State was engaged in, and may engage in again when he replies—I hope he does not—is the phenomenon familiar to psychiatrists of overcompensation. Since he comes from Gloucester and represents Worcester, but is now the Secretary of State for Wales, he has to try to prove to all of us and to the Welsh population that he is a better Welshman than the rest of us, although he does not come from Wales. Do we really have to go so far as back to his home town of Gloucester and his constituency of Worcester and spray green paint all over the roadsides and write in the old Romano-British names of Caerloyw and Caerwrangm at the entry to those towns? I think that would be going a bit far. He is now known as "Caerloyw boyo" in the coal mines of Wales. Unfortunately, there are not too many coal mines left in which that soubriquet can gain currency.
  If we analyse the figures, without the hype, for which the Secretary of State is becoming well known in Wales, and see what he has announced on behalf of the WDA, and what the building programme that the WDA itself has announced in Cardiff today, and compare that with what has been done in the past 10 years, we get some idea of whether it is a big programme, an about average programme or a small programme. That is what we really want to know.
  Let us look at the average for the last 10 years of the WDA's advance factory building programme. I calculate that to be a shade under the convenient round figure of 750,000 sq ft per year. I hope that the team of officials will now be able to provide that now familiar phenomenon of the slick fingertip-passing from apparatchik to Parliamentary Private Secretary to Chief Whip, sometimes on the mis-move to the Secretary of State, sometimes to the Minister of State for him to run in the tries. I hope that the Welsh three-quarters manage to perform with the same facility a week Saturday. The Secretary of State can show what a good private sector optician he benefits from when he gives us the answer. If the Secretary of State does not like the figure that I have given, I am sure that his officials will correct it.
  588
  What figure has the Secretary of State announced today relative to that average? Is that average a reasonable figure to take? I am sure that when the right hon. Gentleman replies he will say that that average is false because it includes the special steel closure programme which ran from 1978 to 1982. Is it fair to exclude the steel closure area? He obviously wants to exclude it, because that will bring the average down for the past 10 years and make today's announcement and the future programme for which he is now responsible more impressive. But is it really reasonable to exclude the steel closure area special building programme of the years 1978 to 1982?
  There were 30,000 jobs lost in the Welsh steel industry in that period. In the last two years, since the end of the miners' strike, between 11,000 and 12,000 jobs have been lost in the mining industry. Therefore, 30,000 over four years compared to 11,000 over two years is not that different. It is not unreasonable for us to include the average of the whole of the last 10 years when the average figure for advance factory building programmes was 750,000.
  Today's announcement is not on an entirely comparable basis, but in so far as it can be deciphered —I am sure that I will be corrected if I am wrong, as I could easily be — it looks as though next year's completion programme will be 550,000 sq ft. The following year's figure depends on when the 900,000 sq ft that was announced today in Cardiff for the advance factory building programme will be completed. I want to take a charitable view. I do not talk anything down; the Secretary of State is wrong about that. Someone who has been an industrial development officer for six and a half years does not do that.
  If we assume, charitably, that all the factories announced today in Cardiff will be completed by the year after next — I do not think it will happen, but let us assume that that will be the case — we would have a completion rate in the next financial year of 550,000 sq ft and, in the year after, of 900,000 sq ft. If we divide those two, we come out somewhere near the average of the past 10 years of just below the average — 700,000 sq ft. instead of 750,000 sq ft.
  I see the Secretary of State shaking his head, but I am not sure what he is shaking his head about, because the laws of mathematics are the same on both sides of the Chamber.
  Let us look too at the actual performance of the Welsh Development Agency this year. One of the problems—it is in the public expenditure White Paper—is that it was supposed to complete 650,000 sq ft this year but it looks as though it will actually complete less than 500,000 sq ft. So it is 150,000 sq ft down, a 22 per cent, shortfall in the great year of opportunity mentioned by the hon. Member for Delyn (Mr. Raffan) earlier.
  That is why I am inclined to think that this year will go down in the annals of the Welsh Development Agency as the year of the great missed opportunity. It appears to have been the only body, governed as it was by the very strict Treasury rules of two or three years ago, that failed to foresee that in election year there would be an election year boom and that there was likely to be a sharp increase. It did not foresee it or, more likely, was not allowed to foresee it and so to have a balance in hand sufficient for the election year upturn which was visible to almost everyone else.
  Mr. Peter Walker: Why is it that, when my predecessor announced a 12 per cent, increase in spending for election year, he was accused of electioneering by hon. Members on the Opposition Benches?
  Mr. Morgan: I know that the Secretary of State's experience of Welsh affairs is relatively short, but one should not necessarily answer on the basis of one year's change. Over a three-year period of change, we go from about 200,000 sq ft of construction in 1984–85 to 300,000 sq ft in 1985–86, and an attempt is being made to crank the machine back up to 600,000 or 700,000 sq ft.
  It cannot be done. Planned this year is 650,000 sq ft and the actual outturn is 498,000 sq ft, as we saw in the public expenditure White Paper last week. That is 22 per cent, behind planned output, because one cannot crank up a machine just like that. In the old days, five years ago, 2 million and 1 million sq ft of advance factory space was being produced per year; that was dropped right down to 200,000 sq ft, one tenth of the original—and it is being boasted about.
  On page 15 of the Welsh Development Agency's annual report and accounts for 1984–85 — I will read the passage to hon. Members just in case the Secretary of State thinks that I am talking down the efforts of the Welsh Development Agency — it boasted about the fact that advance factories were no longer needed. In fact, it has been a very expensive lesson for the Secretary of State and his predecessor. The report says:
  "The amount of new space created in advance factories was just 7 per cent, of the amount built in the peak year of 1981–82. Advance factories providing low-cost factory space at short notice still fulfil an important function but they are now built to fill identified gaps in the market".
  The problem was that the machinery available to the Welsh Office, the Treasury, the Secretary of State and the Welsh Development Agency, did not spot the market coming; it did not see that in an election year there would be a rise in demand. The machinery was run down in 1985 and it was impossible to build it back up again. The result is that they have all been caught with their pants down. It is very sad. We shall miss a large number of opportunities.
  We hope that, once and for all, those responsible will learn the lesson, that the right thing is to provide the WDA with a steady amount of money for factory building every year, rather than suddenly producing big building programmes, such as that announced in Cardiff today, of advance factory construction of about 1·4 million sq ft over the next couple of years—we do not know when the completion will be at the moment. That will probably catch the next downturn in the market.
  It sounds good to announce it today, but there is no way that it will be on stream for a long time, because the WDA has run down. It no longer has the army of surveyors, architects and so on, and the construction companies no longer have the expertise that they had in 1981 and 1982. Otherwise, we would find that they would have produced the 650,000 sq ft that they were supposed to produce this year. Instead, they have produced 22 per cent, less than that, on the figures given in the Government's White paper section on the WDA, published two weeks ago. That is a sad state of affairs. It is an expensive educational lesson, and I hope that the Secretary of State and his team will learn from it.
  10.50 pm
  Mr. Alun Michael: I shall briefly refer to the relevance of the Bill and today's announcement to the needs of Cardiff, and, more specifically, to those of my constituency.
  I ask the Secretary of State to ponder three things. First, I ask him to have regard for the tradition of local initiatives. The WDA has been at its best when working in local partnerships. There have been local successes, and I appeal to the Secretary of State, when considering ways of putting in money in the future, not to put all the eggs in one basket, which could become too large and bureaucratic. I ask him to consider that small is beautiful and successful, provided that it is adequately resourced at local level.
  Secondly, I refer to the tradition of partnership that we have developed over recent years in the Cardiff area. The Secretary of State will be aware of the sort of work that has been done in partnership between the city council and private developers in redeveloping the city centre, and of the work done by the city and county jointly on helping local and incoming firms. He will also know of the work done jointly by the city, the county and the Welsh Office on a number of economic projects, and by the city, the county and local firms on the establishment of the Cardiff and Vale Enterprise.
  As one of the people involved in founding that partnership I was pleased to hear the Secretary of State's praise for what we have achieved when he opened our new premises last Monday. If I may make one party political point in passing, the establishment of the organisation was opposed by the local Conservatives, although since then we have welcomed their conversion and support. So this is no longer a matter of controversy between the parties locally.
  Hearing the hon. Member for Vale of Glamorgan (Sir R. Gower) describing the Conservative party's reluctance to embrace imaginative initiatives, it is tempting to remind hon. Members that, wherever the Department of enterprise may be, the party of enterprise is on the Opposition side of the House.
  Thirdly, I refer to the challenge of the future of Cardiff bay, and here again I emphasise the need for partnership. Indeed, I have emphasised that on a number of occasions, as has the Secretary of State. So far, so good, for the rhetoric used and the way in which things have started off; but vigilance will be needed because it is human nature to prefer to run things in one's own way. It is a human failing to try to dominate; it is a human error to assume that single domination, as long as it is one's own, is more effective — an error committed by every dictator throughout the ages. However, it is a simple fact that cooperation is the approach that produces effective and lasting results.
  I welcome the references in today's announcement to the Cardiff bay development, and agree with the point made about the worries of local people by the hon. Member for Cardiff, North (Mr. Jones) whose interest in my constituency I welcome. Perhaps I shall be able to return the compliment some time. What he said was helpful because it underlined the fact that this is not a party political point giving rise to criticism. It concerns, rather, the best way of going about making the most of the developments in south Cardiff.

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  The hon. Gentleman referred to a real fear in the area —that the standstill in development of land for industry and factories has led to the loss of jobs. That may be an inevitable penalty while the planning process is under way, but it is no less a cause for concern because of that. The problem is that the only readily available sites for industrial development in the Cardiff area are those in the bay development area that are in the process—if it is not already complete — of being passed over from the WDA to the bay development corporation.
  I have reservations about the withdrawal of the WDA from the Cardiff bay area. There is much concern at the combination of the lack of land for industrial development in Cardiff and the removal of the WDA's specific involvement in the south Cardiff area. I must add that the land that is available is in the bay area.
  The WDA's publication today refers to the Treforest area which covers some extremely important areas represented by my right hon. and hon. Friends. It includes areas with tremendous job creation problems — for example, the Rhonnda valley, the Rhymney valley, the eastern side of the Taff Ely—Treforest and Pontypridd —and, as an afterthought, Cardiff has been added.
  That is no accident. It reflects the withdrawal of the WDA from Cardiff. If that is the case, it is a matter for serious concern. I do not want to detract from the importance of the areas within what is described as the Treforest region. However, I suggest to the Secretary of State that there is a need to re-examine the WDA's role in respect of Cardiff.
  That need is emphasised by the WDA's 1989 programme. I can find only one entry for the proposals for Cardiff. It refers to a size range of 5,000 to 10,000 sq ft with no reference to numbers. One sentence in the text refers to Cardiff:
  "There is no shortage of industrial land within the Cardiff Area and the Agency will be actively pursuing this issue."
  I hope that it will be encouraged to pursue that issue in partnership with the bay development corporation and the local authorities. I hope that the Secretary of State will encourage those organisations to work in partnership rather than to pursue their own individual paths.
  The lack of land is important. On numerous occasions I have referred to the high unemployment level in Cardiff. Despite our success locally in creating new jobs, there is a gap primarily in the skilled and semi-skilled sectors, and it is precisely that type of job that will be subject to possible relocation as the bay development progresses. At the same time, we are getting the inquiries and the home-grown results. The spaces provided previously by local authorities in partnership with others, including the WDA, have been filled.
  In conclusion, I want the Secretary of State to note these points. First, many of the activities referred to in the WDA's proposals published today have been pioneered by local authorities and in partnership with others. I hope that they will be encouraged to continue. Secondly, I hope that he will note the opportunities and the needs in Cardiff. I want him to support the request for partnership and involvement with the WDA in Cardiff, and specifically I want him to note the need for land, factories and workshops.
  I have many details that I would be happy to follow up with the Secretary of State outside the Chamber. However,
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  we must remember that the city of Cardiff has many communities with horrendous levels of unemployment. Despite the success of some of the initiatives, they are suffering extreme levels of unemployment, especially among the young. Those problems are of the same order as those experienced in inner cities. I ask the Secretary of State not to be hypnotised by his public relations or by our public relations locally. We do not want to undersell Cardiff in any way—we have a great deal to be proud of—but we must recognise the employment difficulties and the specific areas that require positive action.
  10.58 pm
  Mr. Roy Hughes: This debate has been about the proposed increased borrowing powers of the WDA and the Secretary of State's announcement of the WDA's development programme. My right hon. Friend the Member for Swansea, West (Mr. Williams) welcomed the proposals, and that welcome was echoed by every Opposition Member who has spoken. The purpose of the WDA is to regenerate the economy and improve the environment of Wales. Those objectives are as relevant as ever.
  My right hon. Friend the Member for Swansea, West also reminded the Secretary of State that the WDA, when it was created, was opposed by the Conservative party. It was opposed even by the wets and the soft-soapers, right down to the mavericks—and even they have occasional twinges of enlightenment. Our criticism of this short Bill is based on the inadequacy of the measures contained in it; and, indeed, of the amounts involved, which in any case form only a guideline of the figures that could be spent, because the veto is still with the Secretary of State.
  The problem of unemployment in Wales is massive. We have an Everest to climb. However, we hear from the Government a fanfare of trumpets to herald the most minimal measures. Reading the Welsh press, and in particular yesterday's leading article in the Western Mail, one would have thought that a millennium had been reached. Yet the Government have reached only the foothills: the mountain has yet to be climbed.
  Let us examine the figures. In December 1987, the average unemployment rate in Wales is given as 11·7 per cent., or 40,300. But even that hefty figure is reached after a degree of massaging that would make a physiotherapist green with envy. The Library informs me that the figures are calculated with the use of a wider denominator, expressing the unemployed as a percentage of employees: that is, the unemployed, Her Majesty's forces and the self-employed. All I can say is, "Amen to all that."
  We can compare those figures with the figures in 1979, when the rate was 5·9 per cent., or 73,100. That is half the present doctored figure. Let us look at the league table. I quote the figures for many Welsh districts: Pwllheli, 24·7 per cent.; Cardigan, 24 per cent.; South Pembrokeshire, 23·9 per cent.; Holyhead, 20·8 per cent.; Aberdare, 19·7 per cent.; Lampeter and Abereeron, 18 per cent.; Haverfordwest, 16·8 per cent.; Merthyr and Rhymney, 16·8 per cent.; Machynlleth, 16·2 per cent. I could continue, right down to Newport, where the figure is 12·6 per cent. Newport was once the gravitational point in industrial development for a vast area of south-east Wales.
  What is the reality behind those figures? The facts are even more revealing. The hon. Member for Vale of Glamorgan (Sir R. Gower) said that we were recovering. I can only say, "Good heavens, we need to." Nearly 30,000

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  men in Wales have been out of work for more than five years or have never worked at all. Nearly 80,000 men and women have been jobless for longer than two years. Some 5,000 people have even given up looking for work. The 160,000 men and women who are out of work face a life of poverty and hardship. The brief facts that I have given are not figments of my imagination; they come from the Welsh Office document of September 1987 entitled, "Health, Wealth and Living Conditions in Wales".
  When the Secretary of State visits the Rhondda, Cynon Valley, Merthyr, and Newport, which I have already pointed out has 12·6 per cent, of its people out of work, perhaps he could take with him Mr. Ian Kelsall, of the Confederation of British Industry, and the new editor of the Western Mail. They could tell the people there, at first hand, how buoyant the Welsh economy is at present. All I can say is that the response to that would not be very charitable.
  Mr. Peter Walker: Does the hon. Gentleman share Newport council's current optimism about how successful it is at attracting new industries and new firms? Does he join that council in its impression that Newport is a real growth area at the moment, or does he think that it is a decadent area in decline?
  Mr. Hughes: I have always had great faith in Newport's ability to attract jobs, because of its favourable geographical location and its transport facilities. However, that does not alter the fact that, even with all those facilities, Newport still has 12·6 per cent, of its people out of work. I hope that more new factories will open, but at present the position is dismal.
  The Secretary of State has a duty to the people of Wales to include social reasons in the development of the WDA, not just market and commercial values which, as I see it, are still uppermost in the new property programme that was announced today. We argue that insufficient financial aid has been given to meet the dire economic and social consequences of the past nine years on the industrial and manufacturing base in Wales.
  The Government tend to say, "Leave it to private enterprise and market forces," but surely that is what has caused so many of the present difficulties, such as the drift to the south-east of England, with its great disparity of wealth and employment opportunities, thus creating massive problems of congestion in that region. Regional policy is certainly good for the south-east of England, and the WDA is very much an arm of regional policy, which is why my hon. Friends and I so firmly support it.
  Let us consider the thousands of jobs that have been lost in Wales in steel, coal and many other industries. Wales was in danger of being turned into an industrial wasteland, but fortunately — directly as a result of regional aid—some new industry has been brought in, although it is not nearly enough. That is why we deplore the decision to end regional development grants. As my hon. Friend the Member for Gower (Mr. Wardell) so lucidly pointed out, we know the background, as do the officials of the WDA, and, indeed, the civil servants in the Welsh Office.
  The WDA needs to be assisted financially far more substantially than is provided for in the Bill or in the Secretary of State's announcement. Of course we welcome the boost to the property programme. However, let us consider what has happened to Wales and look at the
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  outflow of population. Some 169,000 people have left Wales in the past five years. Some of our youngest and brightest have left, and that cannot be good for Wales.
  Mr. Peter Walker: I am interested to hear that 169,000 people have left Wales. Will the hon. Gentleman now give us the figures for those who have come into Wales?
  Mr. Hughes: I do not have the figure to hand. [HON. MEMBERS: "Ah!"] What I am trying to say is that among the 169,000 who left were many who we needed to hold on to for the future good of the Welsh economy. Many of those who have come to Wales have tended to be pensioners—not that they are unwelcome.
  The funding base of the WDA is still not sufficient to enable it to meet its statutory duties, let alone fulfil popular expectations of what could and should be done to meet the vicious regional cut-throat competition that Wales has to face in trying to attract new jobs. The agency should be allowed to invest far more than is planned. There is so much to be done. My right hon. Friend the Member for Blaenau Gwent (Mr. Foot) rightly pointed out how much needs to be done in his area alone. The investment function is the element most in need of support and change. The WDA requires more funds over a longer period to counteract the fact that Wales has lost 113,000 of its manufacturing jobs — 36 per cent. — since 1979 when the Government came to power.
  Finally, the debate must be seen in the context of the massive unemployment that Wales has to face. Opposition Members support the Bill, but it is only a minimal measure. It tends to confirm our belief that the Government are incapable of expanding the activities of the WDA to meet the real and pressing needs of the Welsh economy.
  11.11 pm
  The Minister of State, Welsh Office (Mr. Wyn Roberts): Wales has had some superbly good news today. While many Opposition Members have acknowledged that, others have found it a bitter pill to swallow. Much has been made of the point that we owe the existence of the Welsh Development Agency to the Act passed by the Labour Government in 1975. However, I remind Opposition Members that today's WDA is a very different animal from the one that they envisaged and we opposed. We changed its functions in the Industry Act 1980. We repealed the provision dealing with the promotion of industrial democracy and substituted the promotion of private ownership of interests in industrial undertakings. As a result, the agency is a much healthier animal than it was when it came into our care.
  As my hon. Friend the Member for Vale of Glamorgan (Sir R. Gower) said, there is widespread approval for the WDA's work in recent years, and agreement that it should be given the resources to build on its successes. The agency has undoubtedly played a full and vigorous part in transforming the outlook for the Welsh economy. Confidence among CBI members has been high throughout 1987, and nearly 910 of them believe that 1988 will be as good, if not better. Export orders have grown at a faster rate in the four months to January than in the previous six, and this upturn is expected to continue despite the strength of sterling. Dudley Fisher, the chairman of the CBI in Wales, is reported to have said that the latest survey reveals the best figures in the organisation's 10-year history.

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  However, perhaps the most encouraging feature is that his members' investment intentions are 40 per cent, up on what they were, with the general outlook for Wales being better than that for the United Kingdom as a whole. That exceptionally good news comes on top of the forecast of the Institute of Directors that its members are likely to take on 10 per cent, more staff this year.
  Those two surveys reflect the general upbeat mood now clear to all in Wales — except for some Opposition Members—and provide firm evidence of our new-found ability to face the future with confidence. Even the Western Mail, which has never been renowned for its optimism, makes very pleasant reading these days. Among yesterday's headlines in the Business Mail were:
  "Industry Shakes Off Blues."
  I hope that the hon. Member for Newport, East (Mr. Hughes) will shake off his blues.
  It continued:
  "Confident Welsh Firms Plan Investment Spree."
  The leading article, to which the hon. Member for Newport, East referred, was equally sanguine. It was headlined:
  "Yes, Wales is a Going Concern."
  Its very first sentence read:
  "The signs look better and better for a buoyant Welsh Economy."
  The last paragraph was almost ecstatic:
  "It is for industrialists and businessmen in Wales to build confidence on confidence; Wales is a going concern. It is an uncommonly good investment."
  I think that the Western Mail is right. It has got the picture about right. It is against that background of buoyancy that the right hon. Member for Swansea, West (Mr. Williams) should consider the Government's current proposals.
  The budget that has been agreed for next year for the WDA will be the biggest and best that it has ever had in cash or real terms for mainstream spending. At £113 million—over £108 million at 1987–88 prices—it beats by a wide margin the best that was ever achieved under a Labour Government—in real terms by a staggering £33 million or 45 per cent.
  That is the true measure of what has been secured for next year by my right hon. Friend and of the Government's commitment to maintaining the momentum of development in Wales.
  Gross spending, compared with the agency's budget for the current financial year, will rise by over 30 per cent, in 1988–89 alone and by 36 per cent, in 1990–91. The direct taxpayer contribution will increase by over 40 per cent, next year.
  Across virtually the full range of its activities, the WDA has achieved record levels this year. The 30 per cent, increase in planned spending for next year will mean that further improvement will not be held back for lack of resources.
  Mr. Morgan rose—
  Mr. Rowlands rose—
  Mr. Roberts: I shall not give way, because I want to answer as many points as I can.
  My hon. Friend the Member for Cardiff, North (Mr. Jones) spoke of the misconceptions about the WDA's role in relation to small businesses. We have already heard that
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  the WDA's business development unit small firms service is responding to a surge of inquiries for business advice and assistance.
  I say to my hon. Friend the Member for Cardiff, North that the vast majority of the WDA's venture capital activity has been focused on helping small businesses to start up and expand–220 Welsh companies in 1987–88 alone. The average investment was about £40,000.
  For the benefit of the hon. Member for Merthyr Tydfil and Rhymney (Mr. Rowlands), I can confirm that the venture capital figure is £10 million. The agency's investment generates £4, not £2, as the hon. Gentleman suggested, for every £1 put in.
  The business development unit will be providing access to the business development consultancy services provided through Enterprise Wales, which my right hon. Friend announced on 13 January.
  I advise my hon. Friend the Member for Cardiff, North and the hon. Member for Cardiff, South and Penarth (Mr. Michael), to take up specific Cardiff problems with the WDA. Similarly, that advice applies to the constituency problems of other hon. Members.
  The hon. Member for Ceredigion and Pembroke, North (Mr. Howells) referred to the Felinfach creamery closure and the position at Llangefni in Ynys Môn. We obviously recognise the hon. Gentleman's concern, and I am sure that the WDA will do what can be done to alleviate the effects of the closures. The agency's latest factory programme will be of great assistance, with new workshop units being built in key towns in the whole of west Wales and particularly in Narberth, Tenby, Kilgetty, Cillefwr and Pembroke dock, and Mid Wales Development will shortly be coming forward with plans for the area within its responsibility.
  With regard to mid Wales I must tell the hon. Gentleman and others who referred to Mid Wales Development that WDA expenditure does provide some help, but, in addition, my right hon. Friend has added £1·5 million to Mid Wales Development's own budget for 1988–89. That is an increase of 20 per cent.
  Of course, we are very much involved through the WDA in rural initiatives and spending on rural-related schemes. The DRIVE scheme, started in 1986, for example, rose by more than 70 per cent, in the current year.
  Higher resources for 1988–89 will also benefit rural Wales directly and the WDA's budget for its rural affairs unit will be pitched at about £2 million, four times its size in the current financial year. This will obviously supplement the benefits that the area will enjoy from general increases for the agency's full range of programmes, factories, venture capital and advice.
  My hon. Friend the Member for Vale of Glamorgan and the hon. Member for Gower (Mr. Wardell) said that there was need for more emphasis on high tech. I fully agree with this, and of course the new WDA factory programme includes a wide range of new high-tech units. Specific examples include projects at Llanelli, Gilwern, Newport and Bangor. And of course, WINtech, the agency's new technology arm, is stimulating innovation and having a major impact. Its resources are being increased substantially.
  Mr. Morgan: I wonder whether the hon. Gentleman has noticed that under the WDA's own building programme it is now constructing only one third as many high-tech

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  units as it was three years ago — 150,000 sq ft three years ago and 50,000 sq ft this year. Is that an indication of faith in the high-tech side of WDA?
  Mr. Roberts: Of course, WDA's building plans are based on its experience, its appreciation of the market and the likely level of demand. But there is no doubt as to the importance of high-tech development.
  The right hon. Member for Swansea, West talked about the need for more land reclamation resources. We fully accept this, and that is why the WDA's resources over the next three years for this purpose will include about £75 million for land reclamation, environmental improvement and urban renewal –40 per cent, more than originally planned. A good proportion of this will go to the valleys, about which my right hon. Friend will say more in due course.
  The hon. Member for Gower and my hon. Friend the Member for Clwyd, North-West (Sir A. Meyer) referred to the loss of predictability, the switch to selective assistance. I agree that predictability is very important for economic development, but there is also the predictability that arises from having confidence in a sound and growing economy; the predictability associated with the knowledge that modern industrial floor space is available at competitive rates; the predictability of knowing that a good project will secure financial backing; predictability, too, arising from the better and more professional flow of business advice now available to most companies in Wales.
  The hon. Member for Cardiff, West (Mr. Morgan) got his factory completions completely wrong and he has misunderstood the situation. Factory completions, advance and bespoke, in 1987–88 will be 859,000 sq ft, and in 1988–89 the agency has been set the target of completing 1·5 million sq ft.
  Mr. Gareth Wardell rose—
  Mr. Morgan: Will the Minister give way?
  Mr. Roberts: I do not wish to pursue this matter. The hon. Member for Cardiff, West spent a great deal of time boring the House with the wrong facts.
  WDA's total spend since 1979–80 has totalled £850 million at today's prices — £700 million of this was mainstream spending—that is, excluding that earmarked specifically for the steel closure areas. Private sector investment triggered by this spending is likely to have been about three times higher, providing a massive and substantial boost to the Welsh economy.
  Mr. Alan Williams: Will the Minister give way on that point?
  Mr. Roberts: Let me complete it first.
  The average mainstream budget since 1979–80 has been £78 million at today's prices–13 per cent, higher than that provided by Labour in the previous three years. This is an excellent record that is only bettered by the plans for the next three years. The agency budget for 1988–89—at £113 million—will never have been higher in either cash or real terms for mainstream activities — 45 per cent, higher in real terms than the best mainstream budget under Labour. Those are the facts, and there is no running away from them.
  Mr. Williams: The Minister has just given the figure of £850 million over eight years, which gives an average of
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  £106 million. The figure he has quoted for next year is £108 million. Therefore the improvement for next year is, on average, only £2 million. What an achievement!
  Mr. Roberts: The amount of money that we are spending through the WDA in gross terms next year, at 1987–88 prices, is greater than the normal mainstream and special spending on account of steel closures in 1978–79. I have given the facts.
  The agency is, of course, alert to the need to look for and take advantage of any new opportunities. Increasingly the new emphasis is on it becoming a catalyst, a facilitator, rather than a direct supplier. The new property and business development grants are prime examples of the new approach. In their own ways, both represent radical changes, and could well be models for other initiatives.
  Notwithstanding the clear path on which the agency has embarked, the Government fully recognise that there is a need for immediate action to ensure that the economic recovery in Wales is not hampered by capacity restraints, or under-exploited technology. We recognise, too, that the drive to remove the legacy of dereliction associated with the old traditional industries, and to regenerate our older urban communities, must be fuelled by well-targeted resources.
  Mr. Rowlands: I hope that I am not spoiling the Minister's peroration, but I asked for a simple assurance, and I would like it to be placed on the record. Will he assure the House that there will be no attempt to pare or clip the role of the WDA as a venture capital provider? If the budget for the venture capital side of the WDA was £ 10 million last year, what will its budget be for the next financial year?
  Mr. Roberts: I confirm the figure of £10 million. We lay considerable emphasis on the WDA's role in that area. The huge increase in the agency's budget for 1988–89 is proof positive that our commitment to the agency has been translated into action and cash. The new financial limit will provide the WDA with the headroom it needs to pursue the tasks during the lifetime of this Parliament. I urge the House to support the Bill.
  Question put and agreed to.
  Bill accordingly read a Second time.
  Bill committed to a Committee of the whole House. —[Mr. Durant.]
  Committee tomorrow.

  WELSH DEVELOPMENT AGENCY BILL [MONEY]
  Queen's Recommendation having been signified—
  Resolved,
  That, for the purposes of any Act resulting from the Welsh Development Agency Bill, it is expedient to authorise the following, namely—

  (a) the payment out of money provided by Parliament of any increase which is attributable to an increase to £700 million of the financial limit specified in section 18(3) of the Welsh Development Agency Act 1975 in the sums payable under the said Act of 1975 out of money so provided; and

  (b) the payment out of the National Loans Fund or the Consolidated Fund of any increase which is so attributable in the sums payable under the said Act of 1975 out of that Fund. —[Mr. Durant]

  WELSH GRAND COMMITTEE
  Ordered,
  That during the proceedings on the matter of the National Health Service in Wales the Welsh Grand Committee have

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  leave to sit twice on the first day on which it shall meet, and that, notwithstanding the provisions of Standing Order No. 88 (Meetings of standing committees), the second such sitting shall not commence before Four o'clock nor continue after the Committee have considered the matter for two hours at the sitting.—[Mr. Durant.]

  STATUTORY INSTRUMENTS, &c.
  Motion made, and Question put forthwith pursuant to Standing Order No. 101 (Standing Committees on Statutory Instruments &c.)
  STATUTORY INSTRUMENTS, &c.
    CUSTOMS AND EXCISE
    That the Customs Duties (ECSC) Order 1987 (S.I. 1987, No. 2184), dated 17th December 1987, a copy of which was laid before the House on 18th December, be approved.
    HARBOURS, DOCKS, PIERS AND FERRIES
    That the draft Ports (Finance) Act 1985 (Increase of Grants Limit) Order 1988, which was laid before this House on 17th December, be approved.

    NURSES, MIDWIVES AND HEALTH VISITORS
    That the draft United Kingdom Central Council for Nursing, Midwifery and Health Visiting (Electoral Scheme) (Variation) Order 1988, which was laid before this House on 14th January, be approved.—[Mr. Durant.]
    Question agreed to.

National Health Service
Motion made, and Question proposed, That this House do now adjourn—[Mr. Durant.]
11.30 pm
Mr. Robert B. Jones: In his excellent speech in last week's debate on the National Health Service, my right hon. Friend the Member for Chingford (Mr. Tebbit) characterised the speeches from the Opposition Benches as a series of complaints, not as an attempt to address the problems of running a multi-billion pound organisation. I hope not to fall into either error.
First, I want to express my gratitude to those who have significantly improved the NHS in my constituency. In Hemel Hempstead we now have the first phase — the Tudor wing—of a brand new hospital. The other phases are due to start soon. It is worth noting that this is a hospital that was cancelled by the last Labour Government. I am therefore grateful to the Conservative Government for delivering on a promise that others broke. I hope that my hon. Friend the Minister will be able to take the opportunity of her reply to confirm that the DHSS is not blocking the approval in principle of further phases of that hospital.
Secondly, I should like to express my appreciation of the two top health officials in my area—Roger Stokoe, our general manager, and Nick Tiley, the district health authority chairman. Mr. Stokoe's excellence has convinced me of the benefits of general management—in my district, at any rate. Mr. Tiley has been the driving force behind a thorough examination of costs, which has resulted in the North-West Herts district health authority being among the most efficient in the country. I hope and expect that my right hon. Friend will reappoint him.
On the subject of the NHS management at national level, in recent months we have had in Parliament and in the media a national debate that has highlighted many of the inefficiencies of the NHS, without paying proper regard either to its achievements or to the money that has already been spent on improvement. It is easy to see why we have had such a debate. Headline stories about waiting lists, ward closures and staff shortages have very properly caused us to ask probing questions about the ability of the NHS to deliver the standards of health care expected by our fellow countrymen.
To me, one of the most significant features of these headlines is the fact that they are not universal, but local. The west midlands readily springs to mind as an example of that feature. Analysis reveals many common factors. Some of these headlines are caused by the consequences of the redistribution caused by RAWP, though recipient areas either stay quiet, or, worse still, sometimes claim to be hard done by.
Staff shortages often turn out to be the direct consequences of national pay bargaining. Put bluntly, what is a fair income for living in the north is unacceptably low in much of the south. Therefore, nurse and junior doctor retention, recruitment and motivation become very difficult. As for nurses who specialise in intensive therapy, there must be a case for abandoning national pay bargaining and looking to rewarding their specialties. Other problems are caused by sheer incompetence and inefficiency.

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Two great questions have never been answered in the history of the NHS. Since both are fundamental, I think that we must at least start the debate by encouraging people to recognise them. First, no one has ever attempted to lay down the medical parameters. Is the NHS there to provide unlimited health care for everybody, regardless of cost, life expectancy or chances of success? The clear and implied answer is no. However, since no guidelines exist against which individual situations may be judged, we inevitably end up with unlimited public expectations every time a case is featured in the media.
Put crudely, we need to know how to answer the question whether an expensive operation with a slight chance of success should be carried out at the expense of large numbers of operations with a high rate of success. While we must pay due attention to the needs of developing medical knowledge, we must not try to hide the ethical dilemmas that actually exist.
Secondly, we must take a more fundamental look at the way in which we budget for the NHS. To some Labour Members, the service should not be cash-limited at all. But it is significant that no Labour Government have ever followed that course, partly because they always end up broke, and partly because they, too, realise that there must be some limit.
Unlike Opposition Members, I do not believe that money alone is the key. If it were, there would be no complaints in Scotland, where NHS spending is about 25 per cent, higher than in England, and that is a greater increase than has ever been asked for by any Opposition spokesman.
Given this apparent conflict between unlimited demand and limited resources, I cannot see how any politician can fail to address the issue of how to get best value from the NHS. Inevitably, being a large organisation, it has a natural tendency towards inefficiency. This is compounded by a lack of effective control and the absence of a competitive framework. The NHS, we are told, is the largest employer in western Europe. It has also doubled its work force since 1960, partly due to a shorter working week, and partly because the NHS is doing more things. Because of this huge wage cost, we must start looking at the efficient use of manpower.
I would start with the consultants. Studies have shown them to have widely differing work rates and work practices that should make them the laughing stock of the commercial world. The trouble with the present system is that they are independent contractors to the NHS. They are contracted not to the authorities that use them—the district health authorities — but to the regional health authorities. One of the simplest reforms which the Government could make, and which would lead to falling waiting lists, would be in consultant contract reform.
Another area, that of competitive tendering, has already been tackled by the Government in catering, cleaning and laundry services. I shall not comment on that, other than to say that private independent quality control on those services would be an even greater boon. The lessons from the exercise are obvious; the NHS benefits from specialist firms in spheres where they are more aware of new techniques and materials.
We should not rest on our laurels. It surely makes sense to involve the same private contractors—for example, in decorating and in the purchase of linen. That is the road to a proper balance between initial costs and running costs, including cleaning. Private companies would in all
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probability fund the acquisition of such materials, freeing capital for other purposes. The logical extension of this is to look at private management on an experimental basis, and I commend to the Minister the work of my hon. Friend the Member for Boothferry (Mr. Davis), who I see in his place.
One reason for health authorities not grasping these opportunities, except sporadically or under direction from central Government, is the absence of a parallel system to that of the Audit Commission. I believe that investment in a series of best practice units enabled to look at each health authority and make recommendations for action would repay itself many times over. This could be reinforced by a central fund, or perhaps 2 per cent, of NHS spending, which could be directed to individual health authorities in the pursuit of best practice.
The same technique would also repay examination in the capital sphere. At present, overwhelmingly, new projects secure investment at the expense of less jazzy projects which are aimed at reducing running costs. For example, it makes sense to invest in energy-saving equipment and other such measures. This would be greatly encouraged if districts could bid for money from an allocation of capital specifically set aside for cost-saving projects. This sum could be paid back over five years, automatically refilling the pot and ensuring that DHAs delivered on the cost improvements. I find it astonishing that there is no provision for depreciation in the NHS.
These are all limited measures which are intended to improve efficiency within the present framework and are all relatively short-term. In the medium term, we must look at the whole system and introduce some of the disciplines of the market place into the NHS. At present we tend to reward the inefficient and penalise the efficient, sometimes through the lack of effective internal RAWP and sometimes because of the political clout of the teaching hospital system. Thus, in London and the southeast, patients are encouraged by shorter or non-existent waiting lists in inner London to have routine operations there. The trouble with this is that the operations cost more than they do in the shire counties, and we end up treating people in the most expensive way possible.
The best model for an internal market would be for patients to register with the district health authority of their choice and for them to be funded on a per capita basis to cover all routine operations and treatments. The DHAs would then purchase the more complex operations and treatments from teaching hospital boards, which would be encouraged to avoid unnecessary duplication and to bring about further specialisation.
Furthermore—I realise that this is not a point for my hon. Friend the Minister—we need to make sure that people know how much the NHS costs them. Too many people think that the NHS and social security are funded from the stamp. It makes a great deal of sense to me that we should have three levies to pay on income: general income tax, health contributions and a social insurance stamp. That would really hammer home the costs.
I sat through all last week's debate, which was on the whole remarkably sterile. Many hon. Members on both sides of the House attacked the failure of the NHS to deliver the goods, but sadly few, with honourable exceptions, were prepared to address themselves to new ideas. Indeed, the Labour party is opposed to new ideas, which may account for the total absence of any of its representatives tonight.

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That opposition should not surprise us, because the same has applied in every other policy field. Those on the Labour Benches believe in open mouths; we on the Government Benches believe in open minds.
I hope that my right hon. Friend the Secretary of State will encourage new ideas from all quarters and rule none of them out until they have been properly examined, since no thought process should be stifled by presumptions at the start.
I commend those few thoughts to the House and invite other hon. Members to contribute to the continuing debate.
11.42 pm
Mr. John Redwood rose—
Mr. Deputy Speaker (Mr. Harold Walker): Does the hon. Gentleman have the consent of the hon. Member for Hertfordshire, West (Mr. Jones) and the Minister to intervene?
Mr. Redwood: Yes, Mr. Deputy Speaker.
I am very grateful to you, Mr. Deputy Speaker, and to my hon. Friend the Member for Hertfordshire, West (Mr. Jones) for allowing me to participate in this important debate, developing good ideas for the future of our Health Service and to improve the quality of patient care.
There has been much debate recently about the internal market and about increasing efficiency. These are good ideas, but they are not phrased in a way most likely to make them beloved of the British public. If we put across to people what we are after—more patient choice, more and higher-quality patient care — and the fact that we wish to see that happen by the patients having more power within our health system to encourage good practice and good delivery and discourage bad practice, particularly to discourage long waiting, we would release forces that could be most important, not only in delivering a better service, but in delivering a service that gives better value for money.
As my hon. Friend said, a starting point must be adequate information in the hands of managers within the NHS. We are in danger of seeing information systems proliferate and information becoming too complex and difficult to use. What the managers need is the right amount of good information, the basic statistics on quality, on cost, on access and on facilities. Then they can start to ask the right questions and, more important, to deliver the right service to the patients, who should be empowered to move the money with them in order to get the service they seek.
We could do that with some reforms of the structure and with a change in the culture and style of management. I do not believe that we can live with the regions for much longer. There must be a direct relationship between the National Health Service management board, at the top, and the districts and hospitals at the base of the pyramid. Long lines of communication cause fuzzy messages and involve cost and unnecessary resource use, which could be much better employed delivering service to the patient.
I wish to take briefly two topical problems, which have been highlighted in the recent uproar over the National Health Service, to illustrate how this better information
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and the new culture might begin to work in favour of the patient and the taxpayer, who are, of course, one and the same person.
First, let us take the problem of waiting lists, particularly for acute care, which have been highlighted in a number of noisy exchanges across the Floor in recent weeks. If it had the right information, the NHS management board could ask why so many operating theatres around the country are only half used, or partly used; why some hospitals have a shortage of the necessarily highly trained intensive-care nurses, for example, and others have a surplus or an adequate supply; and why babies or children in Birmingham cannot get immediate access to the care their parents would like them to have, whereas there is no such waiting list in other parts of the country.
It could also ask why district and hospital boundaries should be impenetrable barriers that seem more successful than the Berlin wall in keeping people in or keeping people out. These are the questions that good management information could ask. The development contained in that inglorious phrase, the internal market, is a solution to the problem because it would allow people to go across boundaries to get the care they want.
There is the second important problem of the closure of the small hospital. I am suspicious about the costings and the analyses used in many closures. If we went into it in more detail, I think we would find that very often the community hospital, like the one in my constituency at Wokingham, is not only a much-loved facility for the local community but offers a relatively cheap and caring environment in which basic surgery, cold surgery and maternity services and the like can be supplied.
I think we would find that it is not cost pressures so much as dogma and often management misinformation that lead to the closure of these facilities. I think that a managerial review would bring this to light, as would sensitivity to patient demand, because if patients were turning up with the power of money behind them, they would create a demand for the local hospitals which would thrive.
I know that the Minister wishes to answer in full the points that my hon. Friend has made. So, in conclusion, let us have good information and a simpler structure at the top, and let us empower the patients to deliver the service that we want to see.
11.46 pm
The Parliamentary Under-Secretary of State for Health and Social Security (Mrs. Edwina Currie): I congratulate my hon. Friend the Member for Hertfordshire, West (Mr. Jones) on obtaining the debate and selecting this most important issue. I know that he is a tireless campaigner for the health of his constituents. I have no doubt that my hon. Friend the Member for Wokingham (Mr. Redwood), who is new to the House, will follow the same path. We might also note the presence of my hon. Friends the Members for Maidstone (Miss widdecombe), Boothferry (Mr. Davis), Ludlow (Mr. Gill), Gedling (Mr. Mitchell), Dover (Mr. Shaw), Walthamstow (Mr. Summerson) and Battersea (Mr. Bowis). I think it is worth noting that they are all new Members and, as my hon. Friend the Member for Hertfordshire, West said, there is not one Labour Member here to listen to this important debate.
The National Health Service is a subject of considerable current interest, if the volume of work coming through the

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offices of Ministers in the Department of Health and Social Security is anything to go by. As hon. Members are probably aware, this is the 43rd Adjournment debate that I have answered since I was appointed a Minister. Since October, I have met 17 delegations and answered 984 written questions. The total number of what are called yellow jackets — letters requiring a Minister's personal signature—which I have had thrust under my nose for signature since 19 October is 2,964. They are coming in at the rate of 350 a week from Members of the House alone.
As my office tells me that we ran out of our posh new notepaper this afternoon, I hope that I may be permitted to make two points. First, I apologise to any hon. Member or member of the other House who has had to wait more than a week or two for a reply. The replies are on their way. Secondly, I want to put on record my heartfelt thanks to my private office staff, led by Mrs. Grafton, who all work like Trojans. I am very lucky to have them.
My hon. Friend mentioned the future development of Hemel Hempstead hospital. North West Thames region has submitted papers seeking approval in principal for phase 3 of this hospital, which will contain 40 mental illness beds, 40 beds for the elderly severely mentally ill with associated day facilities, a 54-bed obstetric unit and a pathology department and mortuary. The scheme is estimated to cost £14 million, with a further £2· 25 million for land purchase. Therefore, it represents a major capital investment. It needs to be cleared not only by my Department but by the Treasury, in accordance with normal procedures.
There has been a delay in processing the submission, for which I apologise. The region has a number of capital projects with the Department for approval. We have not yet reached a decision; therefore, I am sorry that I cannot give my hon. Friend the assurance that he seeks. However, I will urge the development and I hope that a decision will be taken shortly. My hon. Friend knows, of course, that the new Tudor wing at the hospital opened last year.
As for my hon. Friend's extremely kind remarks concerning the district health authority general manager and chairman, I am grateful for those, and I am sure those gentlemen are as well. We are considering the appointment of district chairmen when the current postholders' terms come to an end on 31 March. We are not yet in a position to make an announcement, but I will ensure that my hon. Friend's views are taken into account in making the decision.
My hon. Friend spoke about some of the problems of inefficiency, and I would not disagree with many of his remarks. However, I should emphasise the extent to which health authorities have already improved efficiency. Over the past four years, they have made cost improvements —that means productivity improvements—worth £600 million. Those savings represent cash released from the running costs of the services, which becomes available for patient care.
In addition, the substantial increase in funding for the Health Service—from £7 billion in 1978–79 to a planned £22 billion in 1988–89, a real terms increase of about 30 per cent.—has enabled authorities to do something very important with all the money that we give; that is, to treat increasing numbers of patients.
Between 1978 and 1986 health authorities treated over 1 million more in-patient cases, nearly 500,000 more day cases and dealt with nearly 4 million more out-patient attendances than under the previous Labour Government.
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We should make no mistake. Many health authorities have a record of improved productivity which is second to none, and which compares well with industry.
I make no apologies for repeating these figures, as they reflect credit on all our staff and management. However, we expect our health authorities to continue to improve efficiency in all areas, partly by further extensions of competitive tendering, partly by looking critically at current arrangements for the procurement, storage and distribution of supplies to ensure that that is carried out as effectively and economically as possible, and partly by looking, as my hon. Friend suggests, at savings on energy usage. We seek savings of 1·5 per cent, a year, and we are expecting savings of about £ 12 million on energy this year.
Authorities need to ensure that the best possible use is made of the Health Service estate. We expect authorities to look critically at their estate holdings, because sales of surplus land and buildings can generate significant capital proceeds—disposals since 1979 have realised over £370 million and we expect an additional £240 million from land sales this year — and enable authorities to reduce the running costs of the estate. It is worth putting on record that the costs to the Health Service cleaning, maintenance, rent, rates and energy alone is some £48 per sq m, before a single doctor, nurse or patient has walked in the door. In other words, the sheer maintenance cost of our enormous estate is about £1·5 billion a year.
My hon. Friend asked about holding consultant contracts at district level. That was considered carefully when the Health Service was restructured in 1982. Following consultation, it was decided to keep the contracts at regional level. From my personal experience —I was chairman of a teaching district health authority, so I held the contracts—I can tell my hon. Friend that it is no easier to enforce them there either.
Where we think we can make progress is to involve the consultants much more in managing their own budgets, so that they know how much things cost and can make sensible clinical decisions in the light of cost information. We are currently piloting that approach, which is jointly sponsored by the Health Service Management Board, the joint consultants committee and local health authorities, at five acute hospitals and nine community sites. If that produces the sort of result that we are expecting, decisions on the wider dissemination of the approach to other acute hospitals will be made later this year.
Good management, as my hon. Friend the Member for Wokingham said, needs information. We are now making real progress. Each year the Department produces a package of 450 performance indicators which are distributed to the health authorities. Those enable the authorities, and in many cases individual hospitals, to compare their performance with others and to identify areas where there appears to be scope for improvement.
The performance indicators include financial information, such as the cost of treating cases, and non-financial information, for example, on the length of stay of patients and numbers of staff employed. The figures show substantial variations between districts, even after taking out extreme values in the top and bottom 10 per cent., which may result from faulty data, but I suspect result from excessive adequacy—or inadequacy—of management staff.
Let me take two examples from 1985–86, the last year for which we have performance indicators. We shall take out the top and bottom 10 per cent. The cost of treating

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a patient in a large acute hospital varied by a factor of two, from £560 per case to £960 a case, while the number of patients treated per surgical bed in districts varied from 35 to 54 per year—an astonishing gap.
The latest figures that we have available are for 1985–86. The figures for 1986–87 will be available very shortly, and we hope to produce the current year's figures much more quickly. It occurred to me, therefore, that my hon. Friend the Member for Hertfordshire, West might like to have the latest performance indicators as soon as we have them, and I undertake to send them to him as soon as they are available.
Mr. Jones: I am grateful to my hon. Friend for her kind offer, which I certainly wish to take up, but I imagine that I speak for many of my hon. Friends when I say that this will be of much wider interest, and I hope that it will be made available to all hon. Members.
Mrs. Currie: I will take advice on that. I am sure that my hon. Friend realises that these are very bulky things. It may be that I should select some items from among them, to assist colleagues. I am sure that he and others will find, as the district health authorities have found, that they are very interesting indeed.
I would like to go into competitive tendering a little more throughly. Savings from competitive tendering are running at over £100 million a year. We are encouraging authorities to consider its use for other services. Some authorities have already put portering and internal audit out to tender, and, as my right hon. Friend the Secretary of State indicated at the party conference in October, there may be other possibilities.
More generally, we consider that the National Health Service and private health care sector should co-operate to provide the best possible total health care for patients. The private sector offers flexibility to authorities for short-term relief of pressure and long-term contractual arrangements. Co-operation of this kind is not new—it goes back right to the inception of the service—but we think that there is scope for both more, and more diverse, collaboration.
We take on board what my hon. Friend said about best practice units. Existing statutory audit arrangements provide for auditors to ensure that authorities have adequate arrangements for achieving economy, effectiveness and efficiency but we want to go further.
We are establishing a value-for-money unit intended to promote local and regional initiatives. We have taken steps to disseminate guidance on good practice in energy conservation. We have established a small group in support of the NHS management board's property adviser to assist authorities to make the best use of the estate. We have launched a number of central studies in areas with potential for value-for-money improvements — for example, a recent study into the paymaster function, which identified areas for improved efficiency in the payment of salaries, wages and creditors.
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We are also encouraging authorities to establish their own value-for-money groups, and, as my hon. Friend knows, we are setting up an income generation unit from the centre, to help and advise authorities on the exploitation of commercial possibilities, as set out in clause 4 of the Health and Medicines Bill which is currently in Committee, of which my hon. Friend the Member for Wokingham is a most valued member.
I endorse everything that my hon. Friend said about capital management and the need for investment in revenue-saving schemes. I suppose that my hon. Friend may not know that at least one region, Oxford, is already running schemes on some of the lines proposed by my hon. Friend.
As regards capital depreciation, the Department is sponsoring pilot studies in four regions on improving the management of capital assets, including the possibility of introducing depreciation. I must say that I share my hon. Friend's views on this question.
In general, we welcome the suggestions made by my hon. Friends. It is very helpful and encouraging to hear such suggestions made by them, and by others too. I take the points about the barriers, the boundaries and the nurses. Those points are very well made. What we ought to do, in the light of current discussions outside the House, is to agree some very simple propositions.
First of all, we have funded the National Health Service better than ever before, with more money, more staff and more patient care. So more money alone is not the answer —which is what Opposition Members would say if they had bothered to come along. Perhaps I should add that, however much money we have, we still have an absolute obligation to spend every penny wisely.
Secondly, I am sure that we can agree that our ability to provide a well-funded Health Service depends on a strong economy, which will depend, in the future as in the past, on firm control of public spending.
Thirdly, increased personal prosperity makes it possible to look to individual pockets as well as to the public purse for a contribution. The state does not have to do it all.
Fourthly, our objective overall is not endlessly to build more hospitals, whether they are in the constituency of my hon. Friend or not, or just to employ more doctors.
Our objective is the better health of our people. That involves more than the Health Service or the whole health care industry. It involves individuals taking responsibility for their own lives and for those of their families far more vigorously than has ever happened in this country before. I know that my hon. Friend joins me in this belief and endeavour.
With those points, I commend my hon. Friends' remarks to the House as a reasonable and worthwhile contribution to the debate.
Question put and agreed to.
Adjourned accordingly at one minute to Twelve midnight.