Commons Sitting of 2 March 1988

Preamble
The House met at hall-past Two o'clock
PRAYERS
[MR. SPEAKER in the Chair]
Oral Answers to Questions
  FOREIGN AND COMMONWEALTH AFFAIRS

    Somalia
    Mr. Michael: To ask the Secretary of State for Foreign and Commonwealth Affairs if, in the light of recent events, he will make a statement on the relationship between the United Kingdom and Somalia, with particular reference to those parts of that country having historic links with Britain.
    The Minister of State, Foreign and Commonwealth Office (Mrs. Lynda Chalker): The relations between the United Kingdom and Somalia are very friendly. When I visited Mogadishu last April, I met President Barre, the former Foreign Minister and other senior Ministers and discussed British aid in Somalia, including northern Somalia, and other matters of interest to both our countries. I hope that a senior Somali Minister will be able to visit the United Kingdom later this year.
    Mr. Michael: The Minister may be aware that there is a significant Somali community in my constituency — and in others—and that the Somali community has made a significant contribution, particularly to our maritime tradition, to our economy and to the community in general. Is the Minister aware that there is a great deal of concern among members of the Somali community in this country about several aspects of the position in Somalia at the moment? Will she accept that there is also a feeling in the Somali community in this country that Britain should continue to bear some responsibility and take an interest especially in those parts of Somalia that were previously Britain's responsibility? Will she assure us that that interest will continue and tell us how it will be pursued?
    Mrs. Chalker: I assure the hon. Gentleman that we continue to take an interest. For example, we brought pressure to bear with regard to the trials of certain prisoners, including prisoners from the north, who had been held for several years without trial. The hon. Gentleman may be aware that our ambassador was instructed to protest when the death sentences were passed. I am pleased to say that on 11 February those death sentences were commuted to terms of imprisonment or house arrest.
    This year we gave about £5·1 million of aid to Somalia. That aid is directed to a number of projects in the north, including projects for overhauling power stations.
    Mr. Wilkinson: It is good news that the already excellent relationships with Somalia have improved yet further following my right hon. Friend's visit to that country. Is Somalia still having to feed, clothe and house refugees entering the country from Ethiopia, or has the problem eased?
    Mrs. Chalker: I am glad to say that the refugee problem in Somalia has eased. Some refugees still cross the border from the Ogaden region. Where possible we help with that. We have helped children from the Ogaden region who have been orphaned. I thank my hon. Friend for the kind remarks that he made at the beginning of his comments.

    Television News Service
    Mr. Yeo: To ask the Secretary of State for Foreign and Commonwealth Affairs what representations he has received seeking the funding by his Department of a television news service, to be operated by the BBC external services.
    The Parliamentary Under-Secretary of State for Foreign and Commonwealth Affairs (Mr. Tim Eggar): We have very carefully considered a request from the BBC for public funds to start up a world television news service. We note that a British commercial world television news service has been started without public funds, and have concluded that the provision of public funds to the BBC for this purpose would not be justified.
    Mr. Yeo: Bearing in mind the role and unique international reputation of the BBC external service radio broadcasts and the fact that it constitutes an important national asset, is my hon. Friend aware that his refusal to back a three-year experiment for a world television news programme at a cost to the taxpayer of £1 million a year will be greeted with great disappointment?
    Mr. Eggar: I want to make it clear to my hon. Friend that we are not stopping the BBC from taking an initiative in this area. However, we do not believe that the provision of public funds for start-up or production is justified.
    Mr. Dalyell: Did Foreign Office Ministers see the Granada "World in Action" programme entitled "The Taming of the Beeb", and especially did they hear Alan Protheroe's comments on the threat to the historical traditions of the BBC? Can we be sure that Foreign Office Ministers will do everything to protect those historical traditions and ensure that Mr. Protheroe's gloomy predictions are not fulfilled?
    Mr. Eggar: I did not see the programme to which the hon. Gentleman referred. This is a matter for my right hon. Friend the Secretary of State for the Home Department.
    Mr. Temple-Morris: Does my hon. Friend recollect the considerable support from both sides of the House for additional Government funding of the BBC external services for satellite television news? That was exemplified by an early-day motion before the election which attracted nearly 250 signatures, many from Conservative Members, and by the debate in July. Is my hon. Friend aware that many people will see his announcement as a shortsighted and somewhat doctrinaire decision and, above all, a waste of an outstanding international asset that we are privileged to have?
    Mr. Eggar: I recognise the strong feelings that my hon. Friend has on the matter. I agree that the BBC external services and its radio section have a fine record, which we applaud, and which we have recognised by increasing the funding available for the external radio service by a considerable amount over the past seven years. However, that is not justification in itself for making additional public funds available for a world television service.
    Mr. Campbell-Savours: Is the Minister aware that much of the intransigence among the people of the Falkland Islands stems from the fact that the media of the Falkland Islands is, in effect, in the hands of one person, and there is no television? Do the Government not realise that if they want some flexibility from Falkland Islanders they could do no better than ensure that a full television service is provided for them so that they can see what is going on in the outer world? I put that proposition to the Minister in all seriousness. By that experience they might learn to trust some of their neighbours in a way that, hitherto, they have found impossible.
    Mr. Eggar: The hon. Gentleman has raised that point before. The BBC external service "Calling the Falklands" and the world service are available in the Falkland Islands and are listened to widely.

    Middle East
    Mr. Adley: To ask the Secretary of State for Foreign and Commonwealth Affairs if he will make a statement on progress towards a middle east peace settlement.
    The Minister of State, Foreign and Commonwealth Office (Mr. David Mellor): We welcome recent efforts to give new impetus to the search for a negotiated settlement of the Arab-Israel conflict. We and our European partners support strongly an international conference as the suitable framework for negotiations between the parties directly concerned.
    Mr. Adley: I thank my hon. and learned Friend and congratulate him on his active participation in the process during the past few weeks. Has he had a chance to look at the Hansard extract that I sent to him dated 23 July 1946 entitled "Terrorist Outrage, Jerusalem" and the statement made by the then Prime Minister, Mr. Attlee? Does he agree that as Messrs. Shamir and Sharon were involved in those terrorist activities it is utter hypocrisy for them to condemn the PLO as a terrorist organisation? On that basis, does he agree that if Mr. Shultz is to play any useful role it is essential that the United States and our Government include the PLO in any discussions if they are to be meaningful?
    Mr. Mellor: I appreciate my hon. Friend's sincere interest in this matter. The tragic events of the King David hotel are matters for historians, and our concern has to be with the present. Plainly, the PLO is accepted widely within the occupied territories as the representative of the Palestinian people. We have never accepted it as the sole representative of those people, and there has been an inhibition on the part of the Americans and the British Government at Cabinet level to receive the PLO because of the need for it to make a clean break with terrorist activities of the past. I hope that the PLO will do that, so that it can play a proper role in the unfolding peace process, which, as I said earlier, we very much welcome.
    Sir Russell Johnston: Does the Minister accept that the unfolding peace process, as he put it, has been unfolding for a terribly long time without any real progress? We warmly welcome his support for an international conference, but would he go as far as to say that there will be no progress until Mr. Shultz makes proposals which go considerably beyond those that he has made so far?
    Mr. Mellor: I thank the hon. Gentleman for his consistent support for a bipartisan approach to the matter. I welcome that. Mr. Shultz is properly taking all possible pains to consult as widely as he can among the Governments in the region. He is trying to break down the old objections to peace, to which the hon. Gentleman referred, in order to see whether some new development is possible. Our role is to assist him in that. Of course, we assist him by talking frankly to him about difficulties and the need for the United States to tackle some of those difficulties. I think the hon. Gentleman will find that that is exactly what my right hon. Friend the Prime Minister did in her talks with Mr. Shultz yesterday.
    Mr. Walters: Is my hon. and learned Friend aware that in 1973 the United Nations Commission on Human Rights described Israeli conduct on the West Bank as
    "an affront to humanity and tantamount to war crimes"?
    The only thing that has changed there is the presence of the television cameras. In the circumstances, should not the Palestinians, after all these years of injustice, at least have the right to choose their own representatives?
    Mr. Mellor: Our condemnation of many of the practices in the occupied territories by the Israeli defence force is well known. Sadly, those problems appear to be growing rather than diminishing. I believe that they will fundamentally undermine the reputation of the Government of Israel unless something is done about them. I hope very much that out of this will come the progress that my hon. Friend seeks.
    We wish to see the Palestinians properly represented at any conference. Of course that is primarily a matter for the Arab side. The idea that has been floated—that there should be an international conference — of a joint Palestinian and Jordanian delegation would appear to be the right way forward.
    Mr. Ernie Ross: The Minister must know that the Shultz mission will fail because Shultz is unable to talk to the Palestine Liberation Organisation. If there is to be a peace settlement in the middle east, the Minister, Shultz and the Americans must drop this reluctance to talk to a main player. Shultz can talk to the Israelis, but he must talk to the other side, the PLO. The best thing that the Minister and the British Government can do is to urge the Americans to drop their refusal to accept that the Palestine Liberation Organisation is the representative of the Palestinians.
    Mr. Mellor: I know the hon. Gentleman's serious concern for this issue. I urge him, as I have done in the past, to make the PLO aware of the central inhibition of the Americans in talking to the PLO and of the British Government at Cabinet level in receiving the PLO because of the need for it to make a break with the past.
    Mr. Skinner: The Minister is not on television now—he has had his knuckles rapped by the Prime Minister.
    Mr. Mellor: Of course the Americans would like to talk to the Palestinians, just as a number of us have been able

    963
    to do and just as I was able to do when I visited the occupied territories during a visit from which the hon. Member for Bolsover (Mr. Skinner) says I am retreating. There is no question of retreating from that or anything else.
    It is important that the Palestinians should be able to put their case direct. That will best come about when the PLO has legitimised itself in a form that enables it to repudiate the past, which, as the hon. Member for Dundee, West (Mr. Ross) knows, was disfigured by terrorist actions that caused grave difficulty and resentment in Europe. That is the way forward that we all want to see.
    Mr John Marshall: Does my hon. and learned Friend agree that a necessary condition of peace in the middle east is that Israel's Arab neighbours must accept Israel's right to exist and its right to secure borders? Does he agree that it is an international scandal that, 40 years after the foundation of the state of Israel, only one Arab country has done that? Does he regard it as significant that those Arabs who are willing to bankroll the PLO have also been seen to be supporters of the IRA?
    Mr. Mellor: That last observation is a bit strong and I do not think it is in accordance with the facts. Nor do I think that the football supporter approach to this problem—taking a position on one side rather than striking a balance — is at all helpful in resolving this difficult matter. A sensible policy for the peace process, which I believe we have, is based, first, on the right of the Palestinians to self-determination and, secondly, and every bit as important, on the right of all states in the region—including, of course, Israel—to exist behind secure boundaries. I am sure that no progress is possible until all states in the region appreciate that.
    Mr. Kaufman: Is the Minister aware that, from my own talks with the PLO and the Governments of Iraq, Egypt and Jordan, it is perfectly clear to me that there is no problem about their taking part in an international conference under the auspices of the five permanent members of the United Nations, which could lead to a settlement that would provide security for Israel as well as self-determination for the Palestinians? Is he also aware that the principal, and so far immovable, obstacle to the holding of such a conference is Mr. Shamir, the Prime Minister of Israel? Is he further aware that, instead of trailing new and circuitous solutions to the problem, Mr. Shultz and the United States Administration should tell Mr. Shamir, in no uncertain terms, to sit down at a conference and negotiate with the Arab countries?
    Mr. Mellor: The right hon. Gentleman's progress around the middle east has been most welcome to me, as it has allowed a great deal of bipartisan agreement between the two Front Benches. I certainly agree with him about the attitude of the Arab world towards an international conference. It is our view just as much as his—and I believe that it has all the more authority because it appears to be a view that commands majority support in Parliament—that an international conference is the best way forward. There is no doubt that one section of the Israeli Government has consistently rejected that, and I hope very much that, as part of the tireless work that Mr. Shultz is doing, he will be able to tackle that issue.

    UNCHR (Special Rapporteurs)
    Mr. Turner: To ask the Secretary of State for Foreign and Commonwealth Affairs what representations he has received on the question of the reappointment of the United Nations Commission on Human Rights' special rapporteur on E1 Salvador; and if he will make a statement.
    Mr. Eggar: We have received a number of representations. We find the special representative's repots balanced and objective. He states that the situation in E1 Salvador has improved, although there is still room for further progress. We will take his view into account when deciding how to vote. We shall also discuss the draft resolution with our European Community partners.
    Mr. Turner: I thank the Minister for his reply, although it is somewhat depressing, as there is sufficient evidence of a deterioriating human rights situation in E1 Salvador. The death squad is on the march, and killing and torturing are taking place at this moment. What do the Government need to be able to commit themselves to supporting the relacement of the special rapporteur to E1 Salvador? Will the Minister tell the House why the Government are holding back on this important issue?
    Mr. Eggar: When the Human Rights Commission appoints a special representative, it is only right that all members of the Commission should take his report into account because it is the most objective report available on human rights in that particular country. If the hon. Gentleman is asking us to vote for the special representative's reappointment, surely he will agree that, in making our decision, we should take account of that special representative's report. That is what we shall do.
    Mr. Jacques Arnold: Has my hon. Friend noted, from the report of the special rapporteur, Senor Ridruejo, that considerable progress has been made on the civil rights records of the armed forces and the police of E1 Salvador? Does he not think that we should now see an improvement from the guerrillas, who continue to sow mines causing innocent deaths among the civil population?
    Mr. Eggar: The special representative's last report shows that the earlier improvements in the situation have continued and that President Duarte has made efforts to curb death squads. In addition, the special representative found no evidence to prove that the Government connived at human rights abuses. It is right that we should take that into account when deciding how we shall vote. We have not yet made up our mind.
    Mr. Foulkes: Will the Minister confirm that the Government are as much against repression in E1 Salvador as they are against it in the occupied territories? Does he agree that, since the special rapporteur produced his report, the situation in E1 Salvador has worsened? The human rights activist Herbert Anaya has been murdered and there have been attacks on the camp at Calle Real. Does he agree, therefore, that it would be quite intolerable and would be a green light to the death squads and a 'click in the teeth for all human rights workers if the British Government did not vote in favour of the reappointment of that special rapporteur?
    Mr. Eggar: Naturally, we are concerned about human rights violations wherever they occur. It is also right that where there are improvemens we should recognise them.

    965
    The hon. Gentleman asked about the attack on the Calle Real refugee camp. We are aware of it and our chargé d'affaires visited the camp soon afterwards to ensure that the British volunteers were well. We shall take into account the hon. Gentleman's views and those of others concerned about human rights in E1 Salvador. Equally, we have a duty as a member of the Human Rights Commission to make an objective judgment on the wording of the motion, which has only just been put before us, in discussions with other members of the commission.

    Afghanistan
    Mr. Andy Stewart: To ask the Secretary of State for Foreign and Commonwealth Affairs what representations he made to the Soviet Government in the course of his recent visit on their policy towards Afghanistan.
    Mr. Eggar: My right hon. and learned Friend recalled our long-held objective of a neutral, non-aligned and independent Afghanistan and welcomed the announcement by Mr. Gorbachev of a date for a withdrawal of Soviet troops.
    Mr. Stewart: Will my hon. Friend please take note of overwhelming world opinion, which is that the Soviet Union should withdraw its army of occupation immediately and that it would be in its best interests to do so? [Interruption.]
    Mr. Eggar: I agree with my hon. Friend. I find the reaction of Opposition Members extraordinary. They seem to be so pleased with the Russian withdrawal that they forget that the Russians marched in in the first place.
    Mr. Ron Brown: Is it not the case that the Afghan Government have done everything possible to secure peace and reconciliation within the country? Indeed, is it not important that the Government understand that to install a bunch of ayatollahs in Kabul will do nothing for the West and will create further disaster, as we have seen in Iran?
    Mr. Eggar: I understand the hon. Gentleman's concern about recent developments in Afghanistan. It may be that a future regime will not be as free with its hospitality to him as the last regime was. I suggest to him that he is as quick to be photographed on Russian tanks leaving Afghanistan as he was when they were in Kabul.
    Sir. Jim Spicer: Will my hon. Friend ensure that Her Majesty's Government lose no opportunity to remind the Russians that when they leave Afghanistan they do so with bloody hands, having slaughtered and maimed hundreds of thousands of people, and left 5 million refugees in Pakistan? Should they not leave with shame rather than with their heads held high?
    Mr. Eggar: I fully understand the thoughts behind what my hon. Friend says, and naturally it is important that the Russians stick to their commitment to withdraw.
    Mr. Anderson: Does the Minister agree that although Pakistan has justified anxieties, there would be a heavy responsibility on Pakistan if the talks beginning today were to fail? Does he agree that both the Soviet Union, to a much greater extent, and the Americans, to a lesser extent, have poured vast sums into the armouries of both sides of the conflict? Will he now use his good offices to
    966
    ensure that a similar amount of money is used by the super powers for the immense task of the reconstruction of the shattered infrastructure of Afghanistan?
    Mr. Eggar: Obviously, we hope that the talks which started today in Geneva will reach a suitable conclusion, and I hear what the hon. Gentleman says about Pakistan. I agree with him about aid within Afghanistan in the light of a settlement. Recently, I returned from a visit to the Afghan border. There is a major problem ahead of the world international community, and it is important that the reaction today, assuming there is a settlement, is a coordinated one involving all the major countries.

    USSR (Ministerial Visit)
    Mr. Dykes: To ask the Secretary of State for Foreign and Commonwealth Affairs if he will make a statement on his recent discussions with the Soviet authorities during his visit to Moscow.
    Mr. Mellor: My right hon. and learned Friend had full and wide-ranging talks with Mr. Gorbachev, Mr. Shevardnadze and others covering bilateral matters including trade, arms control, human rights and regional issues. He also met human rights activists and was able to put our views direct to the Soviet public in their press and on television. The visit was a further contribution to our active dialogue with the Soviet leadership and to the improving atmosphere of East-West relations.
    Mr. Dykes: On the assumption that my right hon. and learned Friend's successful visit also included talks on middle east peace prospects, does my hon. and learned Friend agree that it is no good the United States objecting to the Soviet and Syrian presence in a possible future international peace conference, and it is no good us repeating that we think that the Jordanian cum Palestinian option is the best way forward, if, quite manifestly and clearly, the Jordanians object to the Palestinians being included with them rather than having their own independent and legitimate position in the negotiations?
    Mr. Mellor: Perhaps I should explain to my hon. Friend the inhibiting factor in some of the earlier answers. While Mr. Shultz is still active—as he is and there is no question of his mission having come to an end—it is difficult for us to comment on the substance of it when it is at the heart of Mr. Shultz's efforts that the substance should emerge as a result of his careful negotiations. However, in private we advise Mr. Shultz with all candour about the ways we think things should move forward. Let me correct my hon. Friend on one point. I was in Jordan yesterday, and I can assure him there is no question of the Jordanians objecting to a mixed delegation. It is their policy to press for one.
    Mr. Mullin: When the Foreign Secretary was in Moscow, did the Russians raise with him the question of human rights in the United Kingdom?
    Mr. Mellor: There was a full discussion on human rights and I am delighted that one of the consequences of my right hon. and learned Friend's visit was that Mrs. Sosna has been permitted to leave the Soviet Union. It was also true that, largely as a diversionary tactic, questions of human rights in the United Kingdom were raised by the Soviet side. From the smile on the hon. Gentleman's face,

    967
    it appears that he associates himself with those observations, and I think that it is a jolly bad thing that he does.
    Mr. John M. Taylor: Did my hon. and learned Friend, in the course of his discussions, give as part of his appreciation of the middle east situation the view that Israel is entitled to secure frontiers, but not to occupy all the territory up to those frontiers?
    Mr. Mellor: I think I understand the point that my hon. Friend is making. Israel is entitled to have internationally recognised borders, but those are not the borders that are taken as a result of war, and the occupied territories are not part of Israel. It is the view of the British Government and, I believe, of the world community as a whole, that they should not remain so. Nor will that secure peace, so long as the Israeli Government fail to recognise that the principles of territories at peace will be the crucial element in any future discussions.
    Mr. Cohen: To ask the Secretary of State for Foreign and Commonwealth Affairs what discussions he had in Moscow on arms control during the recent visit.
    Mr. Mellor: My right hon. and learned Friend had extensive discussions with the Soviet leadership on issues covering nuclear, conventional and chemical arms control.
    Mr. Cohen: Did Mr. Gorbachev and Mr. Shevardnadze express their concern about Britain's role in the foot-dragging on conventional and chemical arms talks and on the compensatory build-up of arms in the wake of the intermediate nucler forces agreement? Did they urge the Foreign Secretary to show common sense and abandon dangerous dogmas? Will not the proclaimed friendship be superficial unless the Government show the political will for arms reductions instead of arms expansion, which is what the Prime Minister is arguing for at NATO today?
    Mr. Mellor: I am glad to welcome the hon. Gentleman's return, but he might have marked it more appropriately than by acting as a voice and echo of what the Soviet Government officials said to my right hon. and learned Friend the Secretary of State while he was in Moscow. The hon. Gentleman should appreciate that the Soviets have their position on these matters. They would like to see a denuclearised Europe, which would further entrench the massive and overwhelming power of their conventional weapons. It should not be the business of any British parliamentarian, from whatever side of the House he comes, to associate himself with those ideas.
    The other thing that Opposition Members should recognise is that the Soviet Union respects strength. It was the strength of purpose of the NATO Alliance that led to the INF deal and that will lead to further deals, whereas the weakness of Opposition Members would simply allow the Soviets to roll over by default.
    Mr. Madel: Was there any recognition in Moscow that tension can be reduced in Europe only if there is a substantial and permanent reduction of Soviet conventional forces in Eastern Europe?
    Mr. Mellor: My hon. Friend is absolutely right. Why have the Soviets spent 15 years at the mutual and balanced force reductions talks and failed to agree a mandate on these issues? They do not even tell us exactly what their conventional strength is, but it is clear that they have 51,000 tanks pushed forward, many of them 600 miles
    968
    from the border of the Soviet Union, and last year they produced some 3,400 tanks, 30 per cent. more than in 1983. That is the reality of the build-up of Soviet conventional forces. Until they are prepared to tackle that seriously and to bring about a reduction there can be no security and no reduction of tension in Europe.
    Mr. Kaufman: Is the Minister not aware, when he tells my hon. Friend the Member for Leyton (Mr. Cohen) that the NATO Alliance must demonstrate strength of purpose, as is being shown in the NATO summit, that there are different views among the NATO Alliance, that the Prime Minister, to her great discredit, wants to step up the nuclear threshold, whereas Chancellor Kohl of West Germany seeks to negotiate away the battlefield nuclear weapons which would turn Germany into a radioactive desert? Will he, therefore, tell the Foreign Secretary that it would be much better for this country to support the Germans in wishing to bring about a nuclear-free Europe than to go with the Prime Minister, the last nuclear dinosaur?
    Mr. Mellor: The right hon. Gentleman, I am sorry to say, is wrong. Perhaps on his next journey overseas he should go and see Chancellor Kohl. He has distorted Chancellor Kohl's position. The Chancellor is not in favour of the third zero. It is true that some elements, representing quite a lot of people, in German politics are in favour, but Chancellor Kohl is not, because he realises as much as the rest of us that if there were to be a denuclearised Europe, what the Soviets mean is a denuclearised Western Europe, which simply builds in the superiority that they possess.
    Mr. Kaufman: No, no.
    Mr. Mellor: Before the right hon. Gentleman says "No, no", as if he were at the latest Manchester pantomime, coming in, as he does, with a fresh mind to the Labour party's conduct of foreign affairs, surely he should realise that if we had followed the principles that the previous Labour spokesmen laid down with equal dogmatism and certainty that they were right over INF, and failed to deploy Pershing 2 and cruise, we would not have these agreements at all. The right hon. Gentleman would do well to realise that it was the firmness of purpose of the NATO Alliance, led by the Prime Minister, that got us into the good position that we are in today.

    EC (Single Market)
    Mr. Watts: To ask the Secretary of State for Foreign and Commonwealth Affairs what part his Department is playing in furthering progress towards a single market in the European Community.
    Mrs. Chalker: We shall continue to work for rapid progress in dismantling barriers to trade within Europe and for early adoption of the measures necessary to complete the single European market. The Government are mounting a programme to ensure that British business is fully aware of the opportunities and challenges involved.
    Mr. Watts: While I welcome the constructive approach of Her Majesty's Government, as outlined by my right hon. Friend, does she agree that the ill-judged proposals from the Commission for the harmonisation of VAT, including the abolition of zero-rating, are in no way

    969
    essential to the completion of the internal market, and that the facts are rather the reverse and the proposals of Lord Cockfield are likely to be an obstacle rather than a help?
    Mrs. Chalker: There are a lot of doubts, including those expressed in the recent study by the Institute of Fiscal Studies, about the need for a regimented approach of the kind that the Commission has proposed. It was only yesterday that my right hon. Friend the Prime Minister said in the House:
    "tax harmonisation in the European Economic Community is not necessary for the completion of the single market in 1992."—[Official Report, 1 March 1988; Vol. 128, c. 816.]
    Nor are we the only member state that would have difficulties with Lord Cockfield's proposals. Each country would have its own particular difficulties. We shall study what is being put forward. There is absolutely no question but that any vote concerning taxation is by unanimity, just as the vote in 1977 was supported by the then Labour Government— a vote which led to the decision in the EC on spectacles just a week ago.
    Mr. Cryer: Will not the development of the single internal market lead to a lack of control over drug traffickers, terrorists and the spread of rabies? As the Minister knows, Lord Cockfield is determined to harmonise VAT. As he is a Conservative appointee by the Prime Minister, will the Minister say, in order to make the Government's position clear, that they will not renew Lord Cockfield's appointment when it becomes due?
    Mrs. Chalker: The last point of the hon. Gentleman's question is not for me to answer. As for drugs, terrorism and rabies, the general declaration, as the hon. Gentleman probably knows, as he is a Member of the European Parliament, in articles 13 to 19 of the Single European Act, makes it clear that member states such as Britain and others are not prevented from taking their own measures to combat drugs, terrorism and other problems. At the same time as moving towards a single market, controls at the Community's external frontiers are to be strengthened.
    Mr. Gow: Will my right hon. Friend continue to bear in mind that there are large numbers of hon. Members on both sides of the House who believe that the scope and rates of value added tax in Britain should be settled by the Chancellor of the Exchequer and approved by the House?
    Mrs. Chalker: Indeed, they will be settled by the Chancellor and will come before the House, but my hon. Friend should note that no such changes to our present system could be made without unanimity. Unanimity is required, and we have no intention of changing our position on zero rates.
    Sir Russell Johnston: How did the Minister respond to the criticisms of the Government's proposals on the internal market by the director general of the CBI?
    Mrs. Chalker: I believe that the job of the director general of the CBI is different from that of the Government and politicians in general. It is right that if the CBI has a view it should put it forward, but it is not necessarily one that is in the interests of the British people and the European Community.
    Mr. Curry: Will my right hon. Friend ensure that the debate on the internal market does not become sidetracked by repetitive remarks about VAT, terrorism and
    970
    all the byways of Europe, but concentrates on the essential task of creating a single industrial market place, which would be overwhelmingly in the interests of Britain?
    Mrs. Chalker: My hon. Friend is absolutely right. Certainly there is a danger that the behaviour of the press, Opposition Members and some others, will mean that the real issues of a single market, which would so benefit this country and the whole of Europe, will be bypassed. We are pressing for progress in key areas such as the liberalisation of capital movements, financial services including insurance, the opening up of public purchasing across the Community, and the improvement of standards. We hope for progress in all those areas in 1988. It is no mistake that in our six-month presidency 48 out of 100 measures taken on in the internal market were achieved.
    Mr. Heffer: Is it not clear to the right hon. Lady that there is deep concern that in 1992 the sovereignty of the British people will take a further step backwards, that we shall increasingly come under the control of multinational companies and that Britain will suffer as a result? Is it not also clear that the time has come, despite what right hon. and hon. Members on my Front Bench might say, when we should say that the option is still there for the British people, if they so decide, to come out of the Common Market, if they consider that it is in our interests to do so?
    Mrs. Chalker: I have often thought that the hon. Gentleman was living in the past. I am now sure. He cannot even keep up to date with his own Front Bench.
    Sir Anthony Meyer: Whatever the rights and wrongs of tax harmonisation, does my right hon. Friend agree that if we are to get to 1992, which is in the clear British interest, there has to be a great deal more give and take than has been evident in the exchanges so far?
    Mrs. Chalker: My hon. Friend is right. I cannot understand why something that is in the interests of this country and, indeed, of the whole of Europe—the high priority which the British Government have given to completing the single market by the end of 1992—is not understood by Opposition Members. The recent speech by the hon. Member for Dagenham (Mr. Gould) about the managed economy was protectionism by yet another name. It may have been published in Madison avenue, but its contents were firmly Bennite.
    Mr. Robertson: As Lord Cockfield is so out of touch on VAT with the views of the Government who nominated him, how could he possibly be nominated by the Government for another period in Brussels? Will the right hon. Lady confirm to the House the rumours that she is brushing up her languages and that her flitting has been ordered from Wallasey to the Berlaymont?
    Mrs. Chalker: I can assure the hon. Gentleman that there is no truth in the rumours that he and others have been peddling in the press for some time. Whatever view any commissioner takes, it is his view and that of the Commission, and not that of the country from which he comes.

    Drug Trafficking
    Mr. Butler: To ask the Secretary of State for Foreign and Commonwealth Affairs whether he is satisfied with the action taken against drug trafficking in the British dependencies of the Caribbean; and what

    971
    action the Government are taking to facilitate international co-ordinated action against the drug trade in the Caribbean as a whole.
    Mr. Eggar: We have taken the lead in promoting co-operation to combat drug trafficking and strengthen drug law enforcement both in our dependencies and in independent Caribbean states. Next week we will be jointly hosting a Caribbean regional drug law enforcement conference in Barbados to discuss ways of improving co-operation further.
    Mr. Butler: My hon. Friend will be aware that the big money involved in drugs can easily corrupt small countries. Is this not an area where we should co-operate urgently with our American friends?
    Mr. Eggar: Yes, indeed. One Caribbean Prime Minister has said to me that he regards drug traffickers as the biggest single threat to the long-term stability of his country. We are working very closely with the Americans; indeed, they are a co-host of the conference next week.
    Mr. Tony Banks: Will the Minister tell the House whether there is any truth in the story in The Times of 27 February that Sir Lynden Pindling, the Prime Minister of the Bahamas, has been receiving millions of dollars from drug-smuggling cartels for laundering? Indeed, it is said that the British Turks and Caicos Islands are also being used as a major drug-trafficking area. Will he tell us whether these stories in The Times are true? Does he agree that if the United States Government did something to cut down on the market for drugs within their own country supplies would not come from the Caribbean or Latin America?
    Mr. Eggar: Not for the first time, the hon. Gentleman is behind the game. The whole attitude that he is putting forward, of it being the fault of the consumer countries or of the producer countries, has long since passed. There was an important conference in Vienna as long ago as last June when all countries — producing countries, countries involved in trafficking and consuming countries—agreed to co-ordinate the fight against drugs. Because drugs are a common threat, we have to have a common action plan against them.
    Mr. Andrew MacKay: Does my hon. Friend agree that, in the light of experience in the Turks and Caicos Islands, it is dangerous to give independence to small dependencies because they can easily come under the influence of the major drug barons without being able to protect themselves?
    Mr. Eggar: My hon. Friend is right to point to the fact that the then Chief Minister of the Turks and Caicos was convicted of a drugs offence in the United States. We have since that time strengthened the resources available in that territory against the threat of drug traffickers. I know that my hon. Friend is aware of the announcement that I made just before Christmas about our policy on independence in the remaining dependent territories.

    South Africa
    Mr. Galbraith: To ask the Secretary of State for Foreign and Commonwealth Affairs when he last met the South African ambassador to discuss human rights in South Africa.
    Mrs. Chalker: I last met him on 25 February. My right hon. and learned Friend the Foreign Secretary and I have made plain to the South African Government on numerous occasions our concern at human rights abuses in South Africa.
    Mr. Galbraith: Would the Minister care to reflect on the fact that if recent events in South Africa, such as the arrest of religious leaders, had been taking place in the Soviet Union, the Conservative Benches would have been filled with hon. Members jumping up in indignation and demanding action? Today we have heard nothing. Will the Minister tell the House whether recent events in South Africa have altered the Government's position in any way? Have the Government moved at all—even a "teeny weeny" bit or even a smidgeon? Is there any change at all?
    Mrs. Chalker: Whatever the hon. Gentleman may think he sees, I can assure him that all my hon. Friends are at one in condemning the action in South Africa [Interruption.] There is no way that we should take hasty and ill-judged actions on the very serious move by the South African Government last week and their further failure at the weekend to intervene in a very nasty march towards the Parliament building. We are having discussions, and at that I shall leave it for today.
    Mr. Speaker: Mr. John Carlisle.
    Mr. John Carlisle rose—[Interruption.]
    Mr. Speaker: Order. Every hon. Member has equal rights in this Chamber.
    Mr. Carlisle: Does my right hon. Friend accept that some of the organisations that had their activities controlled and curtailed—[Interruption.]—
    Mr. Speaker: Order.
    Mr. Carlisle rose—[Interruption.]
    Mr. Flannery: Why is he always called?
    Mr. Speaker: Order. It very frequently happens that we hear things in this Chamber with which we may not all agree.
    Mr. Carlisle: Does my right hon. Friend accept that some of the organisations—
    Mr. Winnick: He is paid by South Africa.
    Mr. Speaker: Order. This is disgraceful behaviour. Every hon. Member has a right to speak.
    Mr. Flannery: He is always called and he is nobody.
    Mr. Speaker: To those who say that the hon. Gentleman is always called, I must reply that I seek to balance opinion in the Chamber. Mr. Carlisle.
    Mr. Carlisle: At the fifth attempt, may I remind my right hon. Friend that some of the organisations that have had their activities curtailed by the South African Government were nothing more than respectable fronts for those perpetrating violence? Does she agree that Archibishop Tutu, having deliberately got himself arrested, is now advocating illegitimate acts as a form of protest?
    Mrs. Chalker: All Governments are entitled to protect law and order, but in the Government's view the recent suppression of peaceful political activity is totally wrong.

    973
    My hon. Friend tried to say that some of the organisations affected by last week's ban advocated violence. I have no proof that any of them adopt violent means. I believe that they have sought to follow the legitimate path of civil protest and peaceful political activity, and that some of those organisations are primarily humanitarian. Furthermore, we are completely opposed to the suppression of protest by Church leaders. I do not believe that Archbishop Tutu was going along to create trouble as my hon. Friend sought to suggest. I have to say to my hon. Friend that, knowing people who were at that church service, I think that the story is very much more serious than he perhaps appreciates.
    Mr. Winnick: Leaving aside the contemptible remarks of the hon. Member for Luton, North (Mr. Carlisle) —[Interruption.]
    Mr. Speaker: Order. Again, it is a question of balancing the argument.
    Mr. Winnick: Leaving aside the contemptible remarks of the hon. Member for Luton, North, who prostitutes the House of Commons by his remarks, is the Minister aware that the Opposition accept her sincere intentions regarding South Africa? They are in no doubt whatever, but is she aware that, unhappily, there is a feeling that although the British Government, the Foreign Secretary and herself, condemn the actions of the South African authorities, they are not willing to take any effective measures? Is it not time that the British Government realised that the only way to make the South African Government recognise the strength of feeling in this country is by the use of sanctions? Will the Government therefore recognise that sanctions are essential if we are not to condemn South Africa by words alone?
    Mrs. Chalker: If the hon. Gentleman thinks that the spending of £45 million for projects through the Southern African Development Co-ordination Conference, the pledge to provide 30 per cent. to the new Commonwealth special fund for Mozambique, the continuing scholarship programme for black South Africans, and other help, are not positive measures to help Southern Africa, he is living in a very peculiar world.
    Mr. Cyril D. Townsend: Is my right hon. Friend aware that if she continues to speak out firmly against the abuses of human rights, be the victims unknown blacks in Soweto or leading clerics in Cape Town, she will have the support of the vast majority of the people of this country? Secondly, does she agree that the best way of communicating with the South African Government is through diplomatic channels, which should remain open, and by using every other form of contact, including commercial contact, available to us?
    Mrs. Chalker: I thank my hon. Friend for what he has said. I made it quite clear in the debate on Monday, if anyone could hear what I was saying in the end, that we shall not close the diplomatic channels, which provide us with the most important information from all sectors of the South African people. We shall certainly continue those contacts far and wide.
    Mr. Caborn: In view of the deteriorating situation in South Africa, the gravity of which the Minister appreciates, will the Government consider making
    974
    mandatory the sanctions to which we have agreed in the United Nations, the Commonwealth and the EEC, and if not, why not?
    Mrs. Chalker: The hon. Gentleman knows full well that if the measures already taken were made mandatory the front-line states would suffer in a way that they themselves consider they could not bear. Otherwise, why have some of them not taken the sanctions to which they committed themselves in name? They believe that for the economic future of their own people they should not take that action, and I believe that they know more about the situation than does the hon. Gentleman.
    Mr. Forman: In the frequent representations that the Government have so rightly made on this matter, has my right hon. Friend made it clear to the South African Government that if they persist in their lamentable record on human rights they will increase the rate at which private companies disinvest, which cannot be in the interests of the black community?
    Mrs. Chalker: My hon. Friend is absolutely right. The effect of disinvestment by foreign companies has meant that many shares were picked up cheaply by Afrikaners, who will not continue the social programmes and the education and health programmes which have been helping the black community to advance. We want to see more ways in which the black community is helped by business to advance. I believe that companies with interests in South Africa can help the black community to further not only their experience but their opportunities.

    Chile
    Mr. Flynn: To ask the Secretary of State for Foreign and Commonwealth Affairs if he will make a statement on the United Kingdom votes at the United Nations Commission on Human Rights with respect to Chile.
    Mr. Eggar: Human rights in Chile were first considered by the United Nations Commission on Human Rights in 1975. We have consistently spoken out about human rights abuses. This has been reflected fully in our votes on resolutions or in our explanations of vote.
    Mr. Flynn: I thank the Minister for that answer. He will be aware that last year the United States attempted to withdraw the mandate of the special rapporteur of the United Nations Commission on Human Rights. Given that such a withdrawal would almost certainly lead to an intensification of the breaches of human rights, detentions and tortures by the army in Chile, will he give an assurance that the Government's policy will continue and that any future attempt to end the mandate of the special rapporteur will be opposed? Will he say what the result of the withdrawal of the special rapporteur would be on exiles from Chile who are now in Britain? Does he think that such a withdrawal would lead to an increase, or decrease, in the instances of detention and torture?
    Mr. Eggar: I do not think that the hon. Gentleman is entirely right in his assessment of the position. We support the work of the special rapporteur in Chile, and we are in favour of a renewal of his mandate. We do, however, have some reservations about consideration of Chile in the UNCHR under the separate agenda item, but that is another and rather technical issue.
    Mr. Wells: Will my hon. Friend mark the 40th anniversary of the signing of the United Nations Charter on Human Rights by writing to all the countries, such as Chile and E1 Salvador, who are offending against that charter? Will he bring to their attention the undertakings that they gave when they signed it 40 years ago?
    Mr. Eggar: Chile and other countries are well aware of our views. During the speech that I made in Geneva to the commission — that was during my second visit to the Human Rights Commission—I made our views on these matters very clear.
    Mr. Harry Ewing: On a point of order, Mr. Speaker. May I urgently seek your advice, on a matter affecting the honour and integrity of the House?
    Mr. Speaker: Order. I will take it after the statement.
    Mr. Ewing: My hon. Friends—
    Mr. Speaker: Order. Does it arise out of questions?
    Mr. Ewing: No.
    Mr. Speaker: I will take it at the proper time.
    Mr. David Winnick: On a point of order, Mr. Speaker.
    Mr. D. N. Campbell-Savours: On a point of order, Mr. Speaker.
    Mr. Speaker: Order. I have dealt with this matter already. We take points of order—
    Mr. Campbell-Savours: It is different today.
    Mr. Speaker: Order. It always is different.
    Mr. Campbell-Savours: It is different today.
    Mr. Speaker: Order. I will take the point of order immediately after the statement.
    Mr. Campbell-Savours: It does not arise then. It is not convenient—
    Mr. Speaker: Order. It may not be for the convenience of the hon. Member for Workington (Mr. Campbell-Savours) to return—
    Mr. Campbell-Savours: We are all affected by it.
    Mr. Speaker: —but for the convenience of the whole House, I shall take it immediately after the statement.
    Mr. Campbell-Savours: On a point of order, Mr. Speaker.
    Mr. Speaker: Order. I must tell the hon. Gentleman that I am not prepared to take it now. I ask him to sit down, please.

Scottish Electricity Industry (Privatisation)
3.33 pm
The Secretary of State for Scotland (Mr. Malcolm Rifkind): With permission, Mr. Speaker, I shall make a statement about privatisation of the electricity supply industry in Scotland.
The Government's proposals to privatise the electricity supply industry represent a major extension to our successful programme of privatisation, and they will put one of Scotland's most vital industries on to a new and dynamic basis. They will make an important contribution to the continuing regeneration of Scottish industry and to the growth of the private sector in Scotland.
Scotland is fortunate in having an efficient, well-managed and successful electricity industry, which has an impressive diversity of generation sources, including hydro, pumped storage, nuclear and the full range of fossil fuel capacity. In framing proposals, my aim has been to build upon the strengths of the present structure and to correct its weaknesses so that an even more efficient industry, which is sensitive to the requirements of all its customers, can develop. My purpose is to give the industry's customers and its employees a better deal, and to ensure that it strives towards greater efficiency and better standards of service.
I wish to create a structure that is appropriate to the full range of circumstances faced by the industry in Scotland. Prominent among those are the sparsely populated character of much of the area served, the high level of nuclear capacity and the level of surplus generation capacity.
I therefore propose to create two companies based on the present regionally based utilities. This will build on the existing structure of the industry in Scotland and ensure that it maintains its distinctive characteristics. I have considered carefully the attractions of other structures. I do not consider that it would be acceptable to create a single monopoly which would place the ownership and control of the entire Scottish industry in a single set of hands, whether or not involving a regional sub-structure. [Interruption.]
Mr. Speaker: Order. Scottish Members have been waiting for this statement. I ask them to listen to it.
Mr. Rifkind: This would ignore the regional diversity of the present industry, which has brought considerable benefits to consumers. A single company would also require heavy regulatory oversight. This option is inconsistent with the Government's overall objective to maximise the competitive potential and commercial pressures within the electricity industry, and it would be contrary to the interests of consumers. The two-company structure will provide competitive pressures within the industry in Scotland. In the short term, there will be potential for competition by comparison—[Laughter.]
Mr. Speaker: Order. Mr. Rifkind.
Mr. Rifkind: —by which means customers will have a basis for comparing and assessing the prices and service they receive. By helping to ensure effective regulation of prices, this will be an important gain for the consumer. The shareholder will similarly be able to compare the performance of the two companies. A two-company
978
structure will also increase the scope for direct competition for large industrial loads and for marginal exchanges of energy within Scotland.
The Scottish industry has an important competitive role to play in the overall electricity market in Great Britain. There is significant over-capacity in the Scottish system, which can be used to export electricity to England and Wales to the benefit of both buyer and seller. In the longer term, the structure will provide scope for substantial direct competition in generation: the regulatory framework will be designed to encourage independent generators to enter the market on a profitable basis.
I have considered whether the existing boards are candidates for privatisation as independent companies in their present form. My conclusion is that the generating assets in the system are not ideally distributed between the two boards. However, I am confident that two strong, well-balanced and commercially sound companies capable of independent operation can be established by means of some modest reallocation of assets and possibly customers between the existing boards.
I shall therefore invite the boards to consider, in consultation with Government, detailed proposals for achieving this reorganisation to create two companies which, although of different sizes, will be satisfactorily balanced in terms of mix of generating plant, the amount of spare capacity and forecast levels of profitability. The Government will ensure that neither company has an undue competitive advantage in the areas where there is scope for competition between them. We shall also ensure, as a first priority, that security and stability of supply are maintained.
One of the central principles underlying the restructuring will be a sharing of the benefits and costs associated with nuclear assets between the two companies. All of Scotland's electricity consumers have contributed to the creation of these assets, and it is therefore right that they should benefit from that investment in terms of economic baseload of electricity. I propose that the nuclear stations should be owned jointly by the two companies, with each receiving its proportionate share of the benefits and meeting its proportionate share of the total costs. [Interruption.]
Mr. Speaker: Order. We have an important Welsh debate in front of us. Hon. Members will have an opportunity to ask their questions when I call them, rather than from a sedentary position.
Mr. Rifkind: The legislation that I propose to introduce will create strong and effective safeguards for the customer on prices. An effective regulatory regime will be established to safeguard the interests of consumers, including those in remote rural communities, and to promote competition. Tariffs will be regulated. The development of the regulatory system will require the close consideration of a wide range of complex issues, and will be the subject of detailed consultation with the industry, An electricity supply code will also be included in legislation updating the laws governing electricity supply and setting out the basic statutory rights of customers to receive a supply. Safety standards will be fully maintained.
I propose that the legislation should also establish new rights for the consumer and provide for a new system of guaranteed standards of service. When a company fails to meet these levels of service, customers will receive a

979
predetermined level of financial compensation from the company. The companies will also be required to provide a range of indicators, which will be published. They will enable comparisons to be drawn between companies, and encourage them to improve their efficiency and standards of service to the benefit of consumers.
The interests of the industry's employees will be carefully considered. Pension obligations will be safeguarded and the legislation will not change the present negotiation and consultation machinery. Employees will also be given attractive opportunities to acquire shares, as will the general public.
My proposals are of major importance to the future of Scotland's economy, and I am today publishing them in a White Paper.
My proposals for privatisation will help to secure even greater efficiency in the supply of electricity in Scotland, thus ensuring the maintenance of stable and competitive prices. They build on what is best in the industry and provide opportunities for further improvements. In this way, a modern competitive private-sector industry will be created in Scotland, with a major stake held by the Scottish public; it will be fully responsive to the needs of customers and employees. Privatisation of electricity offers real benefits and new prospects for the customer, the employee and the Scottish economy.
Mr. Donald Dewar: I do not think that the right hon. Gentleman's statement was well received by the House, because privatisation of electricity is no more than asset-stripping. The Government are living like spendthrifts, selling the future to finance today's expenditure. There is no case for replacing public utilities with a brace of private monopolies. If it is not acceptable to create a single monopoly—the Secretary of State has just said it is not—is he really arguing that if there are two the problems will somehow disappear? A monopoly is a monopoly and "competition by comparison" is nonsense. If the industry is
"efficient, well managed and successful",
what is the case for privatisation? Why should the public believe in a scheme that makes nuclear safety the responsibility of directors whose overriding duty is to maximise profit for their shareholders?
Is it not nonsense to hand the most basic of utilities over to commercial instinct and then to struggle to build in regulatory machinery in an attempt to prevent the profit-driven companies from abusing their power? There is a startling silence in the Secretary of State's statement on safeguards of the independence of these privatised companies. What guarantees can he give that they will be in a position to withstand the attack of a determined predator? What price such guarantees after the Britoil fiasco?
Privatisation makes no sense, but if the Government insist on it the decision to maintain a Northern board at least gives some prospect of preserving the Hydro board's social charter. The Government must produce a workable structure that will protect the interests of the consumer and guarantee services at a fair price to scattered rural communities. The White Paper is strong on prejudice but thin on argument and detail. No one will be impressed by promises of a new and dynamic future selected at random from the Scottish Office's glossary of Toryspeak.
The House will notice the accuracy of the many leaks that the nuclear stations will be jointly owned and
980
operated. What arrangements are being made for the apportionment of debt, and will the restructuring mean large sums being written off by the taxpayer? When will we know about the transfer of population or the redrawing of the boundaries between the boards implied in the statement? Is it true that the Government are considering the transfer of a coal-fired station to the Northern hoard? Does the Secretary of State accept that there are real problems in joint control of nuclear capacity when commercial interests may diverge? What would happen, for example, if there were a disagreement between the boards, or the privatised companies, over pressurised water reactor and advanced gas-cooled reactor technology for future plants?
Guaranteed standards of service must be enforced, and we want to be sure that the consumer watchdog has the power to protect customers on prices and to insist on a humane and balanced approach to personal debt and disconnections. Is the Secretary of State aware that the number of disconnections for non-payment of gas hills in that privatised industry rose by more than a third in the first nine months of 1987? Will the Secretary of State assure us that that will not happen in a privatised electricity industry?
The crisis over the South of Scotland Electricity Board's coalburn graphically underlines the dangers of privatisation with thousands of jobs at risk and the national interest pushed roughly aside in the rush to make shares more attractive to the market. The way in which the Secretary of State has shirked his responsibilities and watched the developing tragedy as though it was a spectator sport does not inspire confidence. His sale of the electricity industry will no doubt produce windfall profits for the Chancellor of the Exchequer, but it represents a real threat to the consumer and to the wider interests of the Scottish economy and we will oppose it to the best of our ability and right to the end.
Mr. Max Madden: On a point of order, Mr. Speaker.
Mr. Speaker: Arising out of this statement?
Mr. Madden: Yes, Sir.
Mr. Speaker: I will call the hon. Gentleman to put his question in a minute.
Mr. Madden: May I put a point of order that arises directly from the statement. It is not a question—
Mr. Speaker: Order. It is very difficult for me to judge whether it is a point of order as we are at the beginning of the statement. I will hear it when the hon. Gentleman raises his question afterwards.
Mr. Madden: But it is a point of order, Mr. Speaker.
Mr. Speaker: I will call the hon. Gentleman at the end after the statement, but I cannot interrupt the statement in the middle.
Mr. Madden: I am sorry, Mr. Speaker, but I do not see—
Mr. Speaker: No, if the hon. Gentleman will be patient—
Mr. Madden: I cannot see how I can raise a point of order arising directly from the statement at the end of the statement rather than at this stage.
Mr. Speaker: If the hon. Gentleman would wait until I call him, I will hear his point of order and judge it then.
Mr. Madden: I cannot see how I can raise a point of order in a question when my point of order is a point of order for you.
Mr. Speaker: Is the hon. Gentleman alleging that an unparliamentary expression has been used?
Mr. Madden: No, Mr. Speaker. I think—
Mr. Speaker: Order. Exceptionally — it is quite exceptional—I will call the hon. Gentleman. But I warn him that he will do his colleagues and the House a grave disservice if his point of order is not a genuine one.
Mr. Madden: Thank you, Mr. Speaker. I am glad that you have confirmed the right of hon. Members to raise a point of order at the appropriate stage.
My point of order is that, as there are only a handful of Conservative Members on the Conservative Benches —in fact, less than 20—would it be right for us and for journalists reporting the proceedings of the House to assume that the absentees are either drunk, lazy or incompetent—
Mr. Speaker: Order. That is an absolute abuse of a point of order. [HON. MEMBERS: "Hear, hear."] It is reprehensible and it merely confirms what I had hoped would not happen.
Mr. Rifkind: I was somewhat intrigued by the questions raised by the hon. Member for Glasgow, Garscadden (Mr. Dewar). He began by saying that the Government's proposals do not involve the introduction of meaningful competition, but simply continue a system of monopoly. I suggest that the hon. Member for Garscadden might like to consult his hon. Friend the Member Glasgow, Cathcart (Mr. Maxton) who only last Thursday was quoted in the press as saying:
"If the Government's justification is competition, the only way Scotland can have competition is to have separate boards."
I suggest that the Opposition get their act together. Clearly they have failed to do that so far.
The hon. Member for Garscadden then asked about the safety of nuclear power stations. If he had done his homework, he would be the first to appreciate that the ownership of a nuclear power station has little to do with questions of safety—[HoN. MEMBERS: "Oh."] On the one hand, many power stations in the United States are in private hands and on the other stations like Chernobyl in the Soviet Union are in public hands. Few people who know anything about the nuclear industry would agree with the hon. Member for Garscadden that the question of ownership is relevant in one way or another. Of course the regulatory framework ensuring matters of nuclear safety remains exactly the same irrespective of questions of ownership; the hon. Gentleman should have been aware of that already.
The hon. Member for Garscadden also asked about safeguarding the interests of rural communities. I am very conscious of the fact that one of the great achievements of the Hydro board in the north of Scotland has been to ensure easy access to power for island communities and remote rural communities in its area on a common tariff basis. That is one reason why we said in the White Paper that the successor company will be required to maintain
982
a common tariff throughout its area and that that will protect the interests of those in the island communities in a way that will be warmly welcomed.
The hon. Member for Garscadden suggested that considerable problems would arise from joint control of nuclear power stations. He ought to know that, around the world, particularly in the United States, joint ownership of nuclear power stations has been a common feature. It does not create insuperable problems. Indeed, it does not create any substantial problems of the sort referred to by the hon. Gentleman. That is a factor that he should bear in mind.
I am well aware that, inevitably, the Opposition have a knee-jerk reaction to any proposals for privatisation. That is their philosophical position and they are entitled to it. However, they should realise that the interests of the Scottish economy will be greatly boosted by the creation of important companies of the sort proposed. The interests of the consumers will be greatly assisted by the downward pressure on prices that the structure proposed will achieve. If the hon. Gentleman does not appreciate that, he does not have the best interests of the Scottish economy or Scottish consumers at heart.
Mr. Alick Buchanan-Smith: Contrary to the dogmatic prejudice against change held by the Labour party, does my right hon. and learned Friend realise that his proposals will be broadly welcomed by Conservative Members and in the country beyond? I congratulate my right hon. and learned Friend on his decision to retain the integrity of the North of Scotland Hydro-electric board, which is valued in the north of Scotland. Can my right hon. and learned Friend say what arrangements will be put in place to ensure across Scotland the best use of low-cost generation and the best opportunity of exporting south of the border? Will they be in the legislation or will they be left, contractually, to the companies after privatisation?
Mr. Rifkind: I thank my right hon. Friend for his welcome for the proposals I have outlined today. It will be in the best interests of both the companies concerned to maximise the use of the capacity available. There is plenty of evidence from elsewhere in the world where companies operate together to ensure the maximum use of capacity in terms of the interests of their consumers. I have no doubt that both boards will be responding in a constructive and responsible way to ensure that the opportunities that exist for export of Scottish capacity to markets south of the border and the provision of cheap, secure supplies of electricity to consumers throughout Scotland will be not only safeguarded but enhanced as a result of the proposals.
Mr. Dick Douglas: Will the Secretary of State reflect on the fact that what he has produced is a two-headed pantomime horse over which we put a nuclear veil? Does he accept that joint ownership of nuclear power stations is really joint ownership of baseload capacity? How does that come under the argument of competition? Can he tell us whether any of the power stations in Fife are likely to be transferred to the Hydro board and who will own the gas-fired station at Peterhead?
Mr. Rifkind: The hon. Gentleman has not said whether he would have preferred the creation of a single monopoly in Scotland.
Mr. Douglas: I do not support two boards.
Mr. Rifkind: The hon. Gentleman may have his views about the principle of privatisation, but he should appreciate that, if privatisation is to take place, we will be interested in hearing his views as to the form of privatisation—[HoN. MEMBERS: "Answer the question."] I will answer the question. [Interruption.]
Mr. Speaker: Order. Give the Secretary of State a chance.
Mr. Rifkind: Scottish Opposition Members were quoted last Thursday as saying that they believe that there should be a two-company structure if privatisation takes place. The hon. Member for Cathcart, speaking on behalf of the Labour party, specifically said that.
The hon. Member for Dunfermline, West (Mr. Douglas) began his question by referring to competition and the structure of the proposed industry. On the second part of the hon. Gentleman's question, the issue concerning an exchange of assets is, as my statement clearly said, a matter that is being discussed with both the electricity boards. Once we have had the benefit of their advice, we will be able to tell the hon. Gentleman and others what is proposed. The hon. Gentleman must appreciate that this is not a matter on which we should like to reach a conclusion without a most detailed discussion with both boards and those who are interested in it.
Sir Hector Monro: I give the warmest possible welcome to my right hon. and learned Friend's statement, since it concentrates on the future economy of Scotland and the interests of industrial and domestic consumers. I have total confidence in the nuclear generation plant's being run by private industry. Is there within my right hon. and learned Friend's plan a long-term future for the British Nuclear Fuels plc plant at Chapelcross to generate electricity?
Mr. Rifkind: I thank my hon. Friend for his warm welcome, which I believe will be replicated by many people throughout Scotland. In the past, the precise role for Chapelcross had to be discussed with the South of Scotland Electricity Board. Any needs of the future South company with regard to Chapelcross will obviously be a matter for that company to discuss. I assure my hon. Friend that we shall keep a close interest in this matter.
Mr. Ernie Ross: Do these public utilities operate efficiently in respect of the provision of services and prices? Can the right hon. and learned Gentleman give a comparator, other than the boards themselves, against which we can measure the new boards' effectiveness, efficiency and prices?
Mr. Rifkind: The present joint generating agreement has certain advantages and disadvantages. It has advantages in that it allows, through the merit order system, the best utilisation of capacity. It has the disadvantage that it conceals almost entirely the relative efficiency of both boards, because they are required to share costs according to a predetermined formula and not according to the basis on which they run their establishments. Therefore, there are major problems as well as major disadvantages in the present joint generating agreement. The proposals which I have outlined will substantially remove that difficulty, because there will be a basis of transparency that will enable the public to be safeguarded with regard to costs and tariffs.
Mr. Allan Stewart: Does my right hon. and learned Friend agree that his announcement represents a major opportunity for employees, customers and financial institutions in Scotland and elsewhere to take a direct stake in a major Scottish industry, which will have the great advantage of now being free from the inevitable constraints of Treasury control?
Further to the point made by my right hon. Friend the Member for Kincardine and Deeside (Mr. Buchanan-Smith), can my right hon. and learned Friend give a categoric assurance to those in industry, such as the CBI and the Scottish Council, who have expressed concern that the end of the present integrated generation system might result in increased costs? Does my right hon. and learned Friend agree that, if he can give that assurance, his statement should be unequivocally welcomed by Scottish consumers?
Mr. Rifkind: I can give that assurance. I am happy to say that I believe that consumers, especially industrial consumers, will benefit from the kind of structure proposed. As to the earlier part of my hon. Friend's question, it is significant that the Labour party appears to prefer a situation in which the investment requirements of the Scottish electricity industry are decided by Labour or Conservative Governments rather than by the Scottish industry.
Mr. Archy Kirkwood: Will the Secretary of State acknowledge that there is an element of farce in suggesting that the disposal of a public utility will be the principal engine of growth in the Scottish economy? Does the right hon. and learned Gentleman agree that there is an element of farce also in introducing the concept of competition by comparison? We oppose privatisation but of course we welcome— [Laughter.] As the hon. Member for Glasgow, Garscadden (Mr. Dewar) said, if there has to be privatisation, we welcome it being done on the basis of two boards. What safeguards will exist to ensure that these two boards are not prey to companies outside Scotland moving in and buying them up? Will the right hon. and learned Gentleman give an assurance that the social contract presently in the Hydro board's provisions and charter will apply not only to the Hydro board but to the SSEB in the new set-up?
Mr. Rifkind: I noted with some amusement that the hon. Gentleman said that his party was opposed to the privatisation of the electricity industry. Yet only a few days ago, he was quoted as saying that the Liberals were "not wildly keen" on privatising electricity.
Mr. Dewar: "But".
Mr. Rifkind: Yes, there was a "but". The quotation from the hon. Gentleman continued by saying:
"but if it was going to happen, certain conditions were absolutely essential to its success."
That appears to be a traditional Liberal approach. We wait with interest to hear the textual analysis and to see the precise difference between "not wildly keen" and "opposed".
The social contract has been a feature not of the SSEB, but of the statutory basis on which the Hydro board operates. It was intended to ensure that the distribution system extends to the remote rural and island communities. As the hon. Gentleman will know, that has largely been completed, but there is another major factor

985
—the maintenance of common tariffs in the island and remote rural communities. The hon. Gentleman and his colleagues will be pleased to see that the White Paper states specifically that the successor to the Hydro board will be required to maintain common tariffs throughout its area.
Mr. Nicholas Fairbairn: May I warmly congratulate my right hon. and learned Friend on returning to the Scottish people, for the first time in our programme of denationalisation, the assets of Scotland, which go solely to the workers of Scotland and benefit consumers in Scotland, because they can sell the product to consumers in England? If he had proposed a monopoly, would not the Opposition have complained that it was a monopoly? When he has proposed competing boards, they now complain that those boards are competing. Is not the Opposition, both from the Liberals and the Labour party, a sign that they are horrified that Scotland is having its assets given back to its people to the benefit of industry in Scotland?
Mr. Rifkind: I thank my hon. and learned Friend. [Interruption.]
Mr. Speaker: Order. I appeal to the House to settle down and listen to the answers, in the interests of Welsh Members whose debate is to follow. It is rare to have a Welsh day. I shall endeavour to call those hon. Members who are rising, within the time scale, but I ask them to put only one question each, bearing in mind that there will be subsequent opportunities to ask questions on this matter.
Mr. Rifkind: I thank my hon. and learned Friend for his question. As the House will be aware, in previous examples of privatisation, preference has been given to employees and consumers of those industries with regard to the acquisition of shares. All the employees and consumers of both Scottish boards reside in Scotland, so it will be a unique opportunity for those living in Scotland to acquire a significant proportion of the shares in the electricity industry. My hon. and learned Friend is absolutely entitled to draw those conclusions.
Mr. Bruce Millan: Is the Secretary of State aware that much of what he has said this afternoon was positively farcical? The business of competition between the two boards does not bear serious examination. Is not the Secretary of State creating two private monopolies which will be able to operate with scant regard for the interests of consumers, not to mention the overall Scottish interest, as we are already seeing with the outrageous behaviour of the SSEB in respect of coal purchases? When will he do something about that, instead of standing back and allowing the Scottish coal industry to be destroyed?
Mr. Rifkind: There will indeed be opportunities, particularly for industry, to acquire power from either of the two companies. There will be access to the transmission of both companies, so bulk purchasers of electricity will have a choice that has not been available in the past. In addition, we are establishing a structure that will exist for many years. The right hon. Gentleman may approve of the creation of monopolies, but neither I, the Government nor the vast majority of people in Scotland approve of that.
Mr. Alex Salmond: Do not these proposals represent a double mugging of the Scottish electricity consumer? Has not the strength of those companies — their asset base and capacity strength —been paid for by Scottish consumers through their electricity bills? Why, therefore, should the proceeds from a sale go to the Treasury rather than being returned to Scottish consumers? Furthermore, is it not inevitable that, in the private sector, electricity bills will rise because the two companies are saying that they want to double their rate of return? Is not privatisation just another word for higher electricity bills?
Mr. Rifkind: It is interesting to note that the hon. Gentleman had not thought it appropriate to agree with the structure proposed by the Government and has therefore shown himself to be entirely out of touch with opinion in the north-east of Scotland. It is significant that he appears to be uninterested in the views of his constituents and those who represent the interests of the north of Scotland.
The idea that a single state monopoly or a single private monopoly is in the interests of consumers is not a view with which those who have any knowledge of the real world would normally associate themselves.
Mr. Peter Rost rose—
Hon. Members: Oh!
Mr. Speaker: Order. This is a United Kingdom Parliament.
Mr. Rost: Is my right hon. and learned Friend aware that both the Scottish boards and Scottish industry have sent detailed submissions to the Select Committee on Energy welcoming privatisation because the competition will benefit the Scottish economy and lead to a better deal for the electricity consumer? Is it not typical of Opposition Members to show yet again that they are not interested in representing the interests of the electorate whom they are supposed to represent and the interests of the consumer and the Scottish economy?
Mr. Rifkind: I am grateful to my hon. Friend, who has more knowledge of the electricity industry, through his work on the Select Committee on Energy, than most Opposition Members. He is absolutely right in reminding Opposition Members that the electricity industry, in the shape of both the SSEB and the North of Scotland Hydro-electric board, has expressed its view that privatisation is entirely in the interests of the industry and the consumer. Opposition Members may not like that, but they will have to appreciate it.
Mr. Alexander Eadie: Since, in his preamble, the Secretary of State talked about the regeneration of Scottish industry, does he think that it is a good start that we should wipe out the Scottish coal industry as a consequence and lose thousands of jobs in Scotland? The Secretary of State was cagey when we mentioned the debt. How will this proposal be implemented so far as the debt is concerned? He is aware that the SSEB owes £1·8 billion. He knows that it has £1·1 billion of foreign debt as a consequence of Torness and that it pays £240 million per year in interest. How do the Government propose to tackle that? Do they propose to wipe off the debt, as the Treasury will get the filthy lucre involved in the privatisation?
Mr. Rifkind: The hon. Gentleman will know that, as in previous privatisations, those matters are dealt with at a later stage; therefore, I cannot give a detailed response on that matter at the moment.
With regard to the earlier part of his question, the hon. Gentleman will appreciate that, because of the present legal proceedings, it is difficult for any of us to comment in detail on the matter, but I understand his reasonable concern about the future of deep-mined pits in Scotland as a result of the present issues. It is perhaps unwise of him to refer to the death of the Scottish coal industry, because about half the coal produced at present comes from opencast mines in Scotland, which have grown substantially over the past 10 years.
Mr. Harry Ewing: When the Secretary of State said at the start of his statement that he had been seriously considering the privatisation of the electricity industry in Scotland, why does he not be more frank with the House? Why does he not tell us that he considered nothing and that he comes along, like the lapdog he is, to do what he is told?
There is one significant omission from his statement in comparison with the statement made by his right hon. Friend the Secretary of State for Energy, who made a statement announcing tariff increases before the privatisation statement itself. When will the SSEB announce its tariff increases? Contrary to what the hon. Member for Eastwood (Mr. Stewart) says, does the Secretary of State realise that there is widespread anxiety throughout Scottish industry that the SSEB tariff increase will be of the order of the CEGB tariff increase to fatten up the industry for privatisation?
Mr. Rifkind: The hon. Gentleman should do his homework first. Then he would appreciate that the announcements made about tariff increases south of the border related to the need to attract the necessary level of investment because of the gross under-capacity of the electricity industry. I presume that the hon. Gentleman is aware that under-capacity is not a problem north of the border, where we have considerable over-capacity in the system.
If the hon. Gentleman is interested in a way of dealing with the requirements of the industry while recognising the Scottish dimension, he should appreciate that there are three specific Scottish characteristics of the industry, all of which have been recognised and safeguarded by my statement. The first is vertical integration, which exists only in Scotland and which is maintained under these proposals. The second is the high proportion of nuclear power in Scotland, unlike south of the border, which is also safeguarded by the joint ownership proposals. The third is the great over-capacity, which is more than safeguarded by the exciting opportunities that exist for exports south of the border.
Mr. Charles Kennedy: Will the successor company of the SSEB have built into it a social clause along the lines of that of the North of Scotland Hydro-electric board? Can the Secretary of State give an absolute guarantee that those successor companies will remain, post-privatisation, in Scottish hands?
Mr. Rifkind: I would have been somewhat appreciative if the hon. Gentleman had recognised that today's announcement coincides with what I believe are the
988
interests of his constituents. He, like his Liberal friend, appears to like to take that for granted and not to comment on that matter.
Mr. Kennedy: Answer the question.
Mr. Rifkind: Indeed. The hon. Gentleman is the first spokesman for his party to speak, and it might have been relevant to have some reference to that fact. The particular points that he raised on the social clause have never applied to the SSEB. As I said earlier, the main requirement with regard to the Hydro board is the preservation of a common tariff which has been safeguarded by the terms of the White Paper and by the preservation of the Hydro board as a separate company post-privatisation. That is what the Hydro board said was necessary to protect the interests of those who live in the hon. Gentleman's constituency and similar areas.
Mr. Phillip Oppenheim rose—
Hon. Members: Oh!
Mr. Speaker: Order. I call Mr. Oppenheim.
Mr. Oppenheim: Have not Opposition Members got their priorities wholly wrong? Scottish electricity generation does not exist to provide an easy, safe, uncompetitive, overpriced market for Scottish coal; it exists to provide low-cost electricity to Scottish consumers, and that is what the priority should be.
Mr. Rifkind: That is indeed the case, and why the electricity industry as a whole believes that privatisation will be in the interests of its consumers. I agree with that view.
Mr. David Lambie: While I am opposed to the principle of privatisation, I welcome the Government's decision to privatise the two existing companies separately. As Hunterston A nuclear power station is bound to be decommissioned soon, who will finance it — the shareholders of the new privatised company or the Treasury?
Mr. Rifkind: First, I thank the hon. Gentleman for his welcome of the two-company structure if privatisation were to take place. No decision has been taken on whether Hunterston A should be decommissioned and, if so, when. Clearly, these matters will have to be determined by the successor private company whenever a decision is reached that the decommissioning of Hunterston A is appropriate.
Mr. Alistair Darling: How does the Secretary of State propose to ensure that the ownership of the two boards remains within either Scotland or the United Kingdom? What is to stop the boards in future selling their shareholding to an Arthur Daley or Eddie Clockerty of the electricity industry?
Mr. Rifkind: The question whether there should be specific requirements to prevent foreign ownership or other changes in ownership will be addressed in clue course. There are no proposals on that for Scotland or England and Wales in the White Paper, but the Government will consider these matters in due course.
Mr. Dennis Canavan: Since the Tory party was rejected by more than three quarters of the people of Scotland, what possible mandate does the Secretary of State have to sell two great Scottish electricity companies, which were created by the people of Scotland

989
for the people of Scotland and which are the property of the people of Scotland? What right does he have to sell them to some rich friends of the Tory party whose main motivation will be to line their pockets, rather than public service and public safety which will best be ensured when a future Labour Government restore these companies to public ownership?
Mr. Rifkind: If the hon. Gentleman is genuinely interested in Scottish control of Scottish industry, I am sure that he will be in the forefront of encouraging his constituents, who are either consumers or employees, to buy shares in the Scottish electricity industry. That will help to achieve the objective which he so rightly seeks.
Mr. Eric Forth: Is my right hon. and learned Friend convinced by the mindless reaction of Opposition Members this afternoon that he certainly has this absolutely right and that he will deliver to the consumers of electricity in Scotland the best possible deal for the future? Can he assure the House in the interests of industry in Scotland and jobs in industry throughout Scotland that he will liberate the electricity industry to provide its energy from whatever source provides it best and most cheaply?
Mr. Rifkind: My hon. Friend is right to assume that the fact that we are subjected to an enormous volume but little content from Opposition Members speaks louder than words. Naturally, the SSEB has a statutory duty to put the interests of its consumers before other considerations, and that factor must be borne in mind.
Mr. Gavin Strang: Is the Secretary of State aware that his statement is an act of industrial sabotage of the Scottish economy? Is he further aware that nobody believes either the Government or the SSEB when they suggest that the argument over coalburn has nothing to do with privatisation? How can it be right to write off thousands of jobs and thousands of millions of pounds of investment in the Scottish coal industry for what at best is a marginal, temporary, short-term economic gain? Does the fact that these matters are now in the courts mean that the Secretary of State has abdicated any responsibility for Scotland's industrial base?
Mr. Rifkind: It means that, even with two nationalised industries, it is at times impossible for them to agree.
Mr. Tam Dalyell: Albeit that the Secretary of State thinks that he has his Gatling gun, could he return to the unanswered question that was first put by my hon. Friend the Member for Dunfermline, West (Mr. Douglas), which was, given that there will be joint ownership of the baseload nuclear power stations, where will the competition come from that supposedly will put a downward pressure on prices?
Mr. Rifkind: It will come from several places. First, it will come from the opportunity for industrial consumers to consider placing their requirements with either of the successor companies. Secondly, it will be provided in the long-term access for new generators to come on to the market. Thirdly, it will be provided by a basis by which the regulator, who will have to protect consumers' interests on tariffs, can compare the relative efficiency of the two companies.
990
If we have a single monopoly structure in Scotland, given that Scotland is the only part of Britain with vertical integration, there is no way in which the regulator could check the claims of the company in question and thereby give full protection to consumers. If the hon. Gentleman and his hon. Friends are interested in the protection of consumers, there is no doubt that yardstick comparison is an important, indeed essential, requirement to ensure that tariffs are maintained at the lowest possible level for the purposes of both industrial and domestic consumers.
Mr. Ron Brown: Is it not the case that the governor-general's statement, backed up by his entourage from the Institute of Directors and the Confederation of British Industry, amounts to one thing —legalised robbery with violence against the people of Scotland? The electricity supply industry belongs to the people of Scotland. It was built up by their efforts. It is wrong to suggest that to privatise it is to create a wonderful new world for the people of Scotland. It is a wonderful new world for the big business interests behind the Tory party, and that is clear.
Will the governor-general accept that the slogan outside the power stations will be, "Capitalism rules OK"? That may be OK for his friends, but the struggle will continue and Scottish workers will fight back. The Labour party has to carry out its historical role to organise the working classes because we are ready, willing and able to challenge any statement such as this.
Mr. Rifkind: As we are providing a unique opportunity for Scottish employees of the electricity industry and for Scottish consumers of electricity, which covers the whole of the Scottish population, to acquire shares in the ownership of this industry, the Government are entitled to say that our policy can be summed up by the phrase, "Power to the people".
Mr. David Harris: Given my right hon. and learned Friend's emphasis of the fact that the Scottish industry has considerable over-capacity, does not his statement have considerable significance for consumers in England and Wales, as well as for consumers in Scotland? Is he aware that those of us in England who are keen to see greater competition, and who believe that that is essential in the provision of electricity, will heartily endorse all that he has said today?
Mr. Rifkind: I am grateful to my hon. Friend. Serious consideration is being given to strengthening the interconnector between Scotland and England, because that would double the export potential of electricity from the Scottish boards to the markets south of the border. That is entirely in the interests not only of the electricity industry but of consumers in Scotland. It is a United Kingdom electricity industry, and the requirements of the public as a whole are entirely safeguarded by our proposals.
Mrs. Maria Fyfe: Does the Secretary of State recognise that he is bringing the unitary state of this Parliament into disrepute by having here this assortment of English Tory Back Benchers, no fewer than four of whom have put questions about the privatisation of Scottish electricity? If they are so interested in Scottish affairs, why are they not serving on the Scottish Standing Committee? Will he also recognise that the Scottish consumers do not want this privatisation?
Mr. Rifkind: I am interested that the hon. Lady and her hon. Friends do not apply the same criteria to Scottish Labour Members serving on the community charge Bill.
Mr. John McAllion: Earlier, the Secretary of State expressed his confidence that the nuclear capacity of the two electricity boards could safely be placed in private sector hands. Is he not aware of a report by the European Parliament committee on energy, which looked into this very matter in great detail and which concluded that the running of nuclear installations and the management of nuclear radioactive wastes must be kept in the public sector because the private sector cannot be trusted to put the interests of safety above its own interest of private profit?
Mr. Rifkind: Of course, there has to be a regulatory body answerable to Government to ensure that standards of nuclear safety are fully safeguarded — that goes without saying. However, the hon. Gentleman does not seem to appreciate that the ownership of a nuclear power station will not, in itself, determine questions of safety, as long as the highest standards of regulatory control are maintained. As the Government have every intention of doing that, he should be reassured.
Dr. John Reid: Will the Secretary of State recognise that it is arrant nonsense for him and his colleagues to claim that there is widespread support for this measure in Scotland? Is it not a pathetic sign of what little support he has that he has to rely on the support of hon. Members with no direct interest in Scotland, some of whom did not even have the interest to be in the House when the Secretary of State made his statement? Is not the truth that there are so few supporters in Scotland for this case that they could easily have fitted on to the Benches behind the Secretary of State? Had it not been for the intervention of my hon. Friend the Member for Bradford, West (Mr. Madden), which sent the Tory Whips scuttling to the Tea Room, one could have fitted almost the whole population of Scotland on to the Benches behind the Secretary of State.
Despite promptings from my hon. Friends the Members for Glasgow, Garscadden (Mr. Dewar) and for Edinburgh, Central (Mr. Darling), the Secretary of State has not admitted that there will he no guarantee to defend the independence, economic autonomy and Scottishness of these boards. Will the Secretary of State give us a guarantee that, unlike the "Kuwaiti Kid", he is prepared to defend the Scottish industry over the coming years?
Mr. Rifkind: I have already said clearly that the future ownership of industries post-privatisation is a matter that the Government will be considering in the weeks and months to come. If the hon. Gentleman had been in the House since 1979, he would have found that every time the Government put forward proposals for privatisation or to extend home ownership, the Labour party always said that there was no demand for it. Despite that, in Scotland and elsewhere, hundreds of thousands of Scots have used these opportunities and have become owners of industry, homes and other sectors where the Government have, for the first time, provided such opportunities.
Mr. Brian Wilson: The Secretary of State referred to competition by comparison. Would he care to contemplate how he might get on if he were to compete in the court of Scottish public opinion
992
with the memory of the late Tom Johnston? Will he contrast the social commitment for which that former holder of his office stood with what he is putting forward today? In particular, will he comment on the fact that his analogy between Hunterston and Chernobyl is not only crass and glib but deeply offensive to the people of my constituency, who have been responsible for levels of safety and efficiency second to none within the public sector? Will he accept that there will be no welcome for the privatisation of the nuclear industry in Scotland, except from the tiny rump that he represents? Selling off the family plutonium will be a deeply unpopular policy within his party.
Mr. Rifkind: If the hon. Gentleman were aware of his party's history, he would have been aware that Tom Johnston's great achievement was the creation of the North of Scotland Hydro-electric board and that his main interest would undoubtedly have been to ensure the preservation of a board serving the interests of the Highlands and Islands of Scotland. [Interruption.]
Mr. Speaker: Order. The hon. Gentleman has asked his question and he is now getting an answer.
Mr. Rifkind: Precisely, Mr. Speaker, and he does not like the answer. The hon. Gentleman should appreciate that one of the central elements of this statement is recognition of the distinctive needs of the Highlands and Islands of Scotland. The Hydro board has welcomed that fact, as have many interests that represent various points of view in the north of Scotland. The hon. Gentleman knows that the preservation of a separate structure which guarantees common tariffs throughout the Highlands and Islands has been the greatest single achievement of the Hydro board.
Mr. John. M. Taylor: Will my right hon. and learned Friend reassure the House that nothing in his statement, which we welcome, will stand in the way of the progress of the fast breeder reactor at Dounreay, and the important contribution that it makes, and will make, not merely to Scottish but to United Kingdom, technology and energy generation?
Mr. Rifkind: Yes, I can assure my hon. Friend that the position of Dounreay is not affected by the proposals that I have announced today.
Mr. John McFall: Paragraph 70 of the White Paper says:
"the Scottish public will have a major stake".
What guarantee does the Secretary of State have that the Scottish public will have this major stake? Will he be setting aside 51 per cent. of the shares for present electricity consumers?
Mr. Rifkind: For the first time, all the consumers of a privatised industry will be located in Scotland, for obvious reasons. Therefore, this is a unique opportunity for residents in Scotland, if they so wish, to acquire the shares of the industry concerned.
Mr. Canavan: It serves part of England too.
Mr. Rifkind: The hon. Gentleman is correct. The SSEB also serves the needs of Berwick-on-Tweed, in that small part of England, which emphasises that my statement is of relevance to English Member: as well.
Mr. Calum MacDonald: The Secretary of State has said a couple of times now that he is conscious

993
of the importance of the social role of the Hydro board in the Highlands and Islands, but he has given no guarantee that this social role will continue. The social role was embodied in two successive Acts of Parliament, of 1943 and 1979, in the unique social clause. Will the Secretary of State give a guarantee now that that social clause will also be embodied in the new power companies? If he does not give such a guarantee, will he accept that his proposals will be greeted with dismay throughout the Highlands and Islands?
Mr. Rifkind: They will not be greeted with dismay, because the White Paper specifically guarantees the preservation of common tariffs throughout the area of the North company. The hon. Gentleman, as Member for Western Isles, should welcome that fact.
Mr. Henry McLeish: Most sensible Members will appreciate and acknowledge that the general proposals in the White Paper are ill-conceived and half-baked — nothing new for the present Government. But what is worrying is the part dealing with the nuclear industry. Will the Secretary of State accept that he has not a clue about how to deal with this measure in relation to privatisation? If that is the case, will he give the Scottish people an assurance that this very important matter will be sensibly dealt with, instead of being treated in the cavalier fashion in which he has dealt with it at the Dispatch Box and in the White Paper?
Mr. Rifkind: With regard to the proposals affecting the nuclear power stations in Scotland, if I have not a clue then neither has the SSEB nor the North of Scotland Hydro-electric board, because these proposals are very much in accordance with what both boards wish to see.
Mr. Frank Doran: Will the Secretary of State explain — [Interruption.]
Mr. Speaker: Order. I hope that I did not hear an unparliamentary remark. [Interruption.] Order. The hon. Member for Dunfermline, West (Mr. Douglas) is a very senior Member of the House, and he knows perfectly well that he should not react by saying things like that.
Mr. Doran: Will the Secretary of State explain what he means by the expression "competition by comparison"? Will he advise me exactly how my consumers in Aberdeen will benefit from what, to me, is a completely new form of competition?
Mr. Rifkind: I can explain it to the hon. Gentleman. If one had gone for the alternative structure of a single company, that would have been the only part of Britain where there was a system of vertical integration, with generation, distribution and transmission all under the control of a single company. The regulator, who will be a public official whose regulatory function will be to ensure that any tariff proposals are defensible and in the public interest, would have no basis for examining the claims made by a single monopoly company as to whether the factors that had led to such tariffs justified them. By the existence of at least two companies operating in comparable fashion, we have an important amount of information which enables the public interest to be safeguarded.
Mr. Sam Galbraith: I was interested in the Secretary of State's comment that prices
994
would be kept down because industrial concerns would be able to choose which board they obtained their electricity from. Will the Secretary of State explain the mechanism by which an industrial concern in, say, Inverness or Lochinver, which gets its electricity from the Hydro board, then switches to the South of Scotland Electricity Board?
Mr. Rifkind: As the White Paper makes clear, there will be in Scotland, as elsewhere in the United Kingdom, common access to the transmission system. The transmission system in each area will not be the sole prerogative of the company covering that particular area.
Mr. George Foulkes: Will the Secretary of State not admit that part of the fattening up for privatisation is the reason for the disgraceful decision by the South of Scotland Electricity Board to renege on its contract with British Coal? Why did the Minister of State or the Secretary of State not intervene before this matter got into the courts? Have they totally abandoned all their responsibility for employment and industry in Scotland? The effect of this decision in my constituency will be catastrophic, with the potential loss of 400 jobs, in an area where the unemployment level in the Cumnock and Sanquhar travel-to-work area is the highest in the whole of Britain. Why is the Secretary of State abandoning his responsibility for my constituents and for the other people of Scotland who will be affected by this?
Mr. Rifkind: The hon. Gentleman likes to suggest that this is a nice, simple, straightforward matter, yet he knows perfectly well that the interests of Scottish industry as a whole, including Ravenscraig, the largest single user of electricity from the SSEB, are materially affected if it is required to pay tariffs which are higher than necessary. If the hon. Gentleman has the interests of Scottish industry as a whole at heart, he will realise that these are all matters that must be taken into account.
Mr. Martin O'Neill: The White Paper refers in paragraph 36 to the achievement of
"a balanced set of generating assets".
Before the Secretary of State starts talking to the SSEB and the Hydro board, will he bear in mind that, because the Longannet complex comprising two mines and two power stations — Kincardine and Longannet — both receive the coal from the one source and share the same work force at present, it would be the height of lunacy to try to split these two and to break up what is at present a flexible working arrangement, which operates to the benefit of everybody—and which will continue to do so as long as he is prepared to back the miners who produce the coal that these two power stations are prepared to use?
Mr. Rifkind: The particular circumstances of each power station will be taken into account when these matters are considered.
Mr. John Home Robertson: Has the Secretary of State got the message from these exchanges that Scotland wants no part of this daft exercise, an exercise of Tory dogma and fake competition? Does he recognise that the present lay-off of coal miners in my constituency is a bitter foretaste of the effects of this experiment on the Scottish economy? Is it not painfully clear that the prospect of privatisation is already promoting the import of foreign coal rather than the export of Scottish electricity?

995
Will the Secretary of State accept that people living near Torness and Hunterston will be alarmed by the proposal that these nuclear installations will be run by a surrogate private nuclear company? How will local communities be able to deal with this organisation on matters of day-to-day management or employment or on the vital matter of safety? The Secretary of State cited experience in the United States. Has he forgotten all about Three Mile Island?
Mr. Rifkind: The hon. Gentleman knows perfectly well that the record of the British nuclear industry is second to none. He knows that that is a matter that has been determined by the regulatory framework under which it operates.
If the hon. Gentleman is interested in the well-being of those in his constituency who require electricity and wish to buy low-cost electricity, he should realise that the interests of the consumers will be advanced by the proposals being put forward. He must appreciate that, outwith the ranks of the Labour party, there is very little support for the belief that state monopolies are somehow in the public interest.
The hon. Gentleman's hon. Friend the Member for Cathcart said that, if competition is required, then the creation of two separate Scottish companies is the best way to achieve it. I disagree with the hon. Member for Cathcart on many things, but that is one area where I am only too delighted to approve of what he has said.

Points of Order
4.38 pm
Several Hon. Members: On a point of order—
Mr. Speaker: Order. I will take the right hon. Member for Lagan Valley (Mr. Molyneaux) first.
Mr. James Molyneaux: On a point of order, Mr. Speaker. This afternoon I received on the letter board a letter from the Secretary of State for Northern Ireland about equal opportunity legislation in employment, on which I had an exchange yesterday with the Prime Minister here in the House, which seemed to attract a fair bit of sympathy and support from Opposition Members. The letter refers to a statement which is being made today.
May I ask you, Mr. Speaker, whether you had any knowledge of any intention to make such a statement in the House earlier today? I ask the question because I understand that the Secretary of State for Northern Ireland held a press conference at 3.30 this afternoon at Stormont, at which he answered questions from journalists. Is there any reason why the Secretary of State has avoided answering questions from hon. Members, and has that avoidance not constituted a contempt of the House?
Mr. Speaker: I have had no notification of a statement today, and I know of none that may be forthcoming—but we will have to wait to see about that. I did hear what the right hon. Gentleman asked yesterday, and I heard — [Interruption.] Order. — and I heard the Prime Minister reply.
Mr. George Foulkes: On a point of order, Mr. Speaker. During the Secretary of State for Scotland's statement, when you, Mr. Speaker, rightly, in the United Kingdom House of Commons, called one of the English hon. Members to ask a question—albeit that he had not been present for the statement— you said that this is the United Kingdom House of Commons. You may recall that, during the debate on the Inner London education authority, my hon. Friends the Members for Glasgow, Cathcart (Mr. Maxton) and for East Lothian (Mr. Home Robertson) and I intervened. You reproved us, saying, "This is a debate on the ILEA and not on Scotland." On that issue, I wonder whether you will make it clear that what is sauce for the goose is sauce for the gander and that every debate, even the Welsh debate later on, is open to all Members of the House of Commons?
Mr. Speaker: Order. The hon. Gentleman must take care.
Mr. Foulkes: All right. I shall take care about that.
My second point, also arising from the statement, is that you, Mr. Speaker, will have observed that a large number of English hon. Members wanted to get in on the Scottish statement. Will you consider that, in spite of the fact that my hon. Friend the Member for Glasgow, Garscadden (Mr. Dewar) helpfully wrote to the Leader of the House — the right hon. Gentleman said during business questions last Thursday that it was a helpful letter— about the Scottish Select Committee, the Leader of the House, who is here today, seemed to be unable to get any Conservative Members to sit on the Scottish Select Committee? That is a great paradox.
Mr. Speaker: That is not a matter for me.
Several Hon. Members rose—
Mr. Speaker: Order. Let me deal with the hon. Gentleman's other point. I repeat that there is a Welsh debate today and that a large number of hon. Members wish to take part in it. Of course, what is sauce for every goose is sauce for every gander, and every hon. Member has an equal right to participate in the United Kingdom Parliament. I said what I said to the hon. Member the other evening because he was seeking to intervene from a sedentary position.
Mr. Foulkes: No.
Mr. Speaker: Yes, he was. I was present. It was in the middle of a speech, and the Minister did not give way.
Mr. John Maxton: On a point of order, Mr. Speaker.
Mr. Speaker: Order. The hon. Gentleman was another. Both hon. Members were sitting on the Back Benches.
Mr. Maxton: On that very point of order—
Mr. Speaker: Order. The hon. Members did not seek to participate in the debate; they sought to intervene in a speech.
Mr. Maxton: Mr. Speaker, I have to say that on that occasion I was trying to raise what I thought was a perfectly legitimate point of order in relation to that debate. I was on my feet raising a point of order when you made that comment. Every hon. Member is entitled to do that.
Mr. Speaker: I do not recollect that it was a point of order.
Mr. James Kilfedder: Further to the point of order raised by my right hon. Friend the Member for Lagan Valley (Mr. Molyneaux), Mr. Speaker. I was appalled that the Secretary of State should show contempt for the House by making a statement on equal opportunities to a press conference in Northern Ireland. When I was told that a statement was to be made, I assumed that normal parliamentary practice would be followed, and that a statement would be made to the House.
Therefore, through you, Mr. Speaker, may I urge the Government to produce the Secretary of State at the Dispatch Box today, at no matter what time, so that he can be cross-examined about those proposals? We do not object to fair employment anywhere in the United Kingdom. The Secretary of State ought to say why he has not introduced — as I have always wanted — a Bill of Rights for the whole of the United Kingdom, and if not for Great Britain, at least for Northern Ireland.
Mr. Speaker: I am sure that the Leader of the House will have heard what has been said about that statement.
Mr. Michael Foot: On a point of order, Mr. Speaker. Does it not appear that the Government have achieved a unique treble, in that they have insulted Northern Ireland, Scotland and Wales on the same day? It is very embarrassing for you, Mr. Speaker, but it is even more embarrassing for hon. Members for Wales who are being pushed to the end of the list on this debate. The Leader of the House is
998
responsible for that muddle. When he arranged for the Secretary of State for Scotland to make a statement today, he must have known the uproar that legitimately would come from this side of the House. The Leader of the House must have known that the Secretary of State was going to sabotage the Welsh debate. What remedy can he give to the House?
The Lord President of the Council and Leader of the House of Commons (Mr. John Wakeham): Far from insulting Scotland, Northern Ireland or Wales, we have scored three bull's eyes. My right hon. and learned Friend the Secretary of State for Scotland made a very welcome statement to the House today. As for Wales, we have arranged a debate today, 2 March. That is better than the Labour Government achieved. When the right hon. Member for Blaenau Gwent (Mr. Foot) was Leader of the House, he failed to arrange any debate on Welsh Affairs in certain years. As for Northern Ireland, my right hon. Friend has answered a written question on that matter today.
Mr. Peter Thurnham: On a point of order, Mr. Speaker. The Standing Committee on the Licensing (Retail Sales) Bill had its first meeting today and the Chairman of that Committee advised hon. Members to refer to you the actions of the hon. Member for Liverpool, Mossley Hill (Mr. Alton) who has written to churches in the constituencies of hon. Members calling for prayers and fasting—
Mr. Speaker: Order. That is a matter on which I have received a letter from the hon. Gentleman alleging a matter of privilege. I am considering the matter.
Mr. Tam Dalyell: I apologise to Welsh colleagues on both sides of the House for raising this matter, but just over two hours ago, Mr. Speaker, you kindly called me on question No. 3 to the Foreign Office on the funding of the BBC. The issue of order is the habit of Ministers of saying that matters are the responsibility of another Department when the Table Office has rightly accepted a question of particular relevance for the Foreign Office. Alan Protheroe said:
"The BBC will lose its abilities to make programmes that are challenging, programmes that do expose issues that people, politicians, whoever, do not wish to have exposed"—
Mr. Speaker: Order. What is the point of order for me?
Mr. Dalyell: It is a point of order— [AN HON. MEMBER: "Cheeky."] It is not at all cheeky. The Minister said that that was a matter for the Home Office. That statement by the former assistant director general of the BBC was a matter for the Foreign Office. When, apparently, the BBC has to submit scripts if it is to have injunctions lifted, it is quite wrong for Ministers to shirk their responsibility on questions on the Order Paper. On the funding of the BBC, Mr. Protheroe was quite right.
Mr. Speaker: He may have been, but I cannot be responsible for answers given to questions.
Several Hon. Members: On a point of order.
Mr. Speaker: Order. This is a Welsh day.
Mr. David Harris: I appreciate the difficulty of the House over applications to you, Mr. Speaker, on prima facie breaches of privilege, but some hon. Members are in a difficult situation on the Standing Committee on

999
the Licensing (Retail Sales) Bill, to which reference was made by my hon. Friend the Member for Bolton, North-East (Mr. Thurnham). Letters have been sent—
Mr. Speaker: Order. That is the very matter on which I have received not one but several letters alleging a matter of privilege. The hon. Member and the House know that matters of privilege cannot be raised on the Floor of the House. I am dealing with the matter.
Mr. Harris: It is a point of order.
Mr. Speaker: It may be, but the hon. Gentleman must not raise it as a matter of privilege on the Floor of the House.
Mr. Frank Dobson: Further to that point of order, Mr. Speaker. Hon. Members on both sides of the House are in some difficulty in trying to discharge their duty as members of Committees for which they have been selected. They have a legitimate right to examine private Members' Bills, put down amendments and move new clauses in Committee. At present, they feel grossly inhibited by the actions of the hon. Member for Liverpool, Mossley Hill (Mr. Alton) and they are seeking an urgent ruling from you, Mr. Speaker. It is quite unreasonable for us to expect them to do their duty on those Committees while they are under such pressures.
It is an urgent and important matter, and I urge you, Mr. Speaker, to give a ruling as quickly as possible, or to ask the Chair of the relevant Committee — [HON. MEMBERS: "Chairman."] — to adjourn the proceedings until your ruling has been made; otherwise members of that Committee may feel abused simply for carrying out their ordinary tasks—[Interruption.] It is no good one of the Government Whips laughing at the embarrassment and difficulties of two of his hon. Friends. He should have some sympathy for their quandary.
Several Hon. Members rose—
Mr. Speaker: Order. Some years ago the House changed the rules with regard to matters of privilege. They must now be raised by letter to the Speaker. I received that letter just before I came into the Chamber. I shall certainly consider the matter seriously.
Mr. Bob Cryer: On a point of order, Mr. Speaker. There have been a number of statements recently, such as the one today, about privatisation. They raise a new aspect which the House has not considered before. It was revealed yesterday that in the Register of Members' Interests the right hon. Member for Chingford (Mr. Tebbit) is shown as the honorary adviser to British Aerospace plc which is involved in privatisation. The Table Office has accepted a question from me on the involvement of the right hon. Member for Chingford. It has been accepted because there has been an involvement, I understand. We have had a statement today. I think that it is incumbent on Ministers, when there is involvement among a wide range of business interests of Tory Back Benchers, who are very keen on privatisation to get their greedy fingers into the profits which are accruing, and Ministers—
Mr. Speaker: Order.
Mr. Dennis Skinner: We are just getting to the kernel of it.
Mr. Speaker: Order. This is a day on which many hon. Friends of the hon. Member for Bradford, South (Mr. Cryer) wish to participate in the Welsh debate. Will he come to the point of order for me?
Mr. Cryer: May I ask you, Mr. Speaker, to use your authority to draw the attention of the Procedure Committee to the new set of circumstances so that there may be a Standing Order which makes it incumbent on Ministers making statements on privatisation to list in the Orders of the Day hon. Members who will make approaches to their financial advantage on the Stock Exchange?
Several Hon. Members rose—
Mr. Speaker: Order. There is not at the moment a Procedure Committee, but when one is set up the hon. Gentleman could refer that matter to it.
Mr. D. N. Campbell-Savours: As of 4.15 this afternoon, I would have wanted to be in the Public Accounts Committee which is taking evidence on the privatisation of Rolls-Royce, but I could not be there because of the rule which you introduced earlier last year, Mr. Speaker, whereby points of order could be taken only at this time of the day—
Mr. Speaker: Order. The hon. Gentleman must not allege things like that.
Mr. Campbell-Savours: That is the truth.
Mr. Speaker: That is not the truth. The hon. Gentleman knows perfectly well the background. That it was not convenient to him to stay to raise a point of order, I fully appreciate, but he has to have regard to the convenience of the House.
Mr. Campbell-Savours: That is precisely the point that I wish to raise with you. I wish to raise an article which was published this morning in The Guardian under the name of Mr. Andrew Rawnsley which has caused offence to many of my hon. Friends. [Interruption.] It is a very important matter. This scurrilous article, which will lead to representations being made to the editor of The Guardian, alleges in reference to—
Mr. Speaker: Order. I have now seen the article. I think that I can help the hon. Gentleman and the whole House on the matter. In particular, I think I can help Welsh Members. I have been handed a copy of the article and I have received a letter from an Opposition Member alleging a breach of privilege. I shall give the matter most urgent consideration.
Mr. Campbell-Savours: On a point of order, Mr. Speaker.
Mr. Speaker: I cannot hear it. It has been raised as a matter of privilege.
Mr. Campbell-Savours: I am not raising it as a matter of privilege.
Mr. Speaker: An hon. Member has raised it. I cannot go into the details, because it may prejudice my decision.
Mr. Campbell-Savours: My point of order is not a matter of privilege. If other hon. Members wish to write to you on matters of privilege, that is their and your concern. I raise the position of hon. Members who have other duties. That is not a matter of privilege. The article refers to yesterday's proceedings.

1001
Yesterday, I was in the Select Committee on Members' Interests. At 4.15 pm, there was not a quorum to enable that Committee to commence. I had a choice: I could either attend the Chamber or attend the Committee. I put it to you, Mr. Speaker, that in the event that journalists write articles suggesting that Labour Members of Parliament are drunk, lazy or incompetent — [Interruption.] — that may be a matter which my hon. Friends have to take into account when they decide on the allocation of their time to the carrying out of their public duties. I put it to you—[Interruption.]
Mr. Speaker: Order. Will those on the Front Bench refrain from shouting across the Chamber?
Mr. Campbell-Savours: I was placed in the same position today. At 4.15, I was faced with a decision: do I attend to my public duties in the Public Accounts Committee in questioning Sir Brian Hayes on the privatisation of Rolls-Royce, or do I wait here on the Floor to raise a point of order or to attend a debate? I look to you to advise the House today, and, indeed, the 500,000 readers of The Guardian, that this article is a totally unfair and unreasonable presentation of what happens in the House of Commons, in so far as it does not indicate to the country accurately the way in which Members of Parliament legitimately carry out their public duties.
Mr. Speaker: I shall consider the matter. I hope that the hon. Gentleman has not prejudiced what I will do.
Several Hon. Members rose—
Mr. Speaker: Order. [Interruption.] Order. Let me say that all of us recognise that hon. Members have other responsibilities as well as attendance in the Chamber.
Mr. Harold McCusker: Further to the point of order raised by my right hon. Friend the Member for Lagan Valley (Mr. Molyneaux), Mr. Speaker. May I ask whether you accept the implication in the statement made by the Leader of the House, that an answer given to a planted question by a Conservative Back Bencher is equivalent to a statement made on the affairs of Northern Ireland?
Mr. Speaker: No, it is an answer to a written question.
Mr. Eric Forth: On a point of order, Mr. Speaker. I ask for your guidance on a matter relating to the use of House of Commons stationery and pre-printed envelopes. Evidence arose in a Committee this morning which I do not believe is a matter of privilege but may be a matter for yourself or the Serjeant at Arms. An hon. Member may have written, or may have caused to have written, a large number of letters to the constituents of other hon. Members, unsolicited, the letters being in a standard form. There is much evidence to suggest that the letters were on House of Commons headed notepaper and used House of Commons pre-printed envelopes. If this were the case, can you guide me as to whether this is something which I should refer to you or to the Serjeant at Arms? I believe that there is strong evidence that an hon. Member has abused his privilege and the facilities of the House in order to stir up trouble among the constituents of other hon. Members.
Mr. Speaker: Order. If the hon. Member can produce evidence of that, he should certainly refer it to the Serjeant at Arms, because there are strict rules about the use of stationery.
Mr. David Alton rose—
Hon. Members: Ah.
Mr. Alton: Further to that point of order, Mr. Speaker. If the hon. Member for Mid-Worcestershire (Mr. Forth) is referring to letters which I sent out, I can assure him that the stationery and envelopes which were used by me were paid for with the Serjeant at Arms.
Further to the point of order which was raised earlier, I should like to raise a new point of order which concerns a prayer vigil which was held in Norwich recently. I refer you to the Eastern Daily Press of 16 February which described a prayer vigil which had taken place the night before as being broken up. What happened—
Mr. Speaker: Order. I find it extremely difficult to see what point of order can arise for me, as Speaker, about a prayer vigil which took place in Norwich.
Mr. Alton: The point of order is a clear one for you, Mr. Speaker. It is that the protection of hon. Members is a matter for you. When mobs are incited to break up prayer vigils, when mobs picket the homes of hon. Members, and when mobs picket their surgeries and impede their normal parliamentary business, is that not also a matter of privilege, and is that not also something which should be referred to the Privileges Committee?
Mr. Speaker: If the hon. Gentleman alleges that he has been impeded in his duties, he should certainly write to me.
Mr. David Winnick: On a point of order, Mr. Speaker. Were you notified by the Serjeant at Arms about what happened yesterday? [Interruption.]
Mr. Speaker: Order. I would be grateful if hon. Members would refrain from having private conversations when I am listening to points of order.
Mr. Winnick: Were you, Sir, notified by the Serjeant at Arms and the police authorities of what occurred yesterday? Three groups of people lobbied Members of Parliament, and between 3 and 4 o'clock there were literally hundreds of people outside—mainly teachers, who were rightly lobbying against the Education Reform Bill. Did the Serjeant at Arms inform you of the number of green cards that came in for hon. Members and the number of hon. Members who rightly responded by going to see their constituents, many of whom had travelled hundreds of miles to put their point of view?
Perhaps you, Sir, will guide us. In those circumstances, was it not right for hon. Members to be absent from the Chamber to attend upon their constituents? Surely hon. Members' constituents should be able to lobby this place when they have strong feelings.
Mr. Speaker: I was aware of a lobby yesterday. I understood that the meeting took place in the Grand Committee Room. I was not notified of any problems about green cards.
Mr. Harris: Further to the point of order raised by my hon. Friend the Member for Mid-Worcestershire (Mr. Forth), Mr. Speaker. Has the hon. Member for Liverpool, Mossley Hill (Mr. Alton) applied you to make a personal statement on the ground that he has written to the

1003
constituents of a number of hon. Members, myself included, I believe, on House of Commons paper making completely and utterly unfounded allegations—
Mr. Alton indicated dissent.
Mr. Harris: He certainly has.
Mr. Alton: No.
Mr. Harris: He says not, but I had a letter from an organisation called the Society for the Protection of Unborn Children which was circulated widely in my constituency. The letter began, "I believe you have received a letter from the hon. Member for Liverpool, Mossley Hill," or words to that effect. Whatever else has happened, unfounded allegations have certainly been circulated widely in my constituency and I believe that this is an attempt to impede me in my work as a Member of this House. I resent deeply and bitterly tactics such as this and hon. Members' going behind other hon. Members' backs. It is a pity, because, actually, I have much sympathy with the hon. Gentleman's Bill.
Mr. Speaker: If the hon. Gentleman alleges that, he too should write to me. I shall consider his letter together with the others that I have received on this matter.
Mr. Dobson: Further to the point of order, Mr. Speaker. I do not know which hon. Member has written to you about the matter raised by my hon. Friend the Member for Workington (Mr. Campbell-Savours). However, it seems appropriate to make it clear—even before you have had an opportunity to consider the representations made to you—that my hon. Friend the Member for Worsley (Mr. Lewis), who was named as being inexplicably absent from the Chamber yesterday, had been ill since the weekend — to the knowledge of Opposition Members and the Whips. Most hon. Members — even those who mock us from time to time — will agree that it is in the interests of all of us to expect the Press Gallery to exercise professional standards and find out the truth before they vilify hon. Members.
Mr. Speaker: I shall certainly be considering all those matters.
Mr. Harry Ewing: On a point of order, Mr. Speaker.
Mr. Speaker: I hope that this will be the last one. because it is a Welsh day.
Mr. Ewing: When you have considered the letter that you have received complaining about Andrew Rawnsley and his appalling article, Sir, will you make a statement to the House about it? Most of us would want to follow up this matter one way or another once you have made your decision.
Mr. Speaker: I shall follow the procedure laid down in dealing with matters of privilege.
Mr. Donald Anderson: On a point of order, Mr. Speaker. It is now after 5 o'clock. There is only one day in the year for Welsh affairs. Therefore, can we have "speaking-up time" or an extension?
Mr. Speaker: There is a lot of business after this. However, as the hon. Gentleman has raised the matter. I must say that I have great sympathy for Welsh Members. I hope that those who are called will speak briefly.

BALLOT FOR NOTICES OF MOTIONS FOR FRIDAY 18 MARCH
Members successful in the ballot were:

Mr. Michael Fallon

Mr. Stephen Day

Mr. Tim Yeo

BILL PRESENTED
  FORESTRY COMMISSION ADVISORY COMMITTEES (PUBLIC ACCESS TO INFORMATION)
  Mr. Ron Davies presented a Bill to provide for access by the public to meetings, reports and documents of Forestry Commission regional advisory committees; and for related purposes: And the same was read the First time; and ordered to be read a Second time upon Friday 22 April and to he printed. [Bill 112.]

STATUTORY INSTRUMENTS, &c.
Ordered,
That the draft Local Loans (Increase of Limit) Order 1988 be referred to a Standing Committee on Statutory Instruments, &c.—[Mr. Neubert.]

Polyurethane Foam (Miscellaneous Provisions)
5.5 pm
Mr. Ian McCartney: I beg to move,
That leave be given to bring in a Bill to ban the sale of secondhand furniture and bedding which contains polyurethane foam or other dangerous inflammable substances from January 1989.
It is with much humility, tinged with anger and frustration, that I introduce a Bill that will be one of the last pieces of a jigsaw puzzle that has taken almost 20 years to complete. It follows two decades of official Government neglect and criminal negligence by the furniture manufacturing industry. Since the mid-1960s it was known to all concerned that polyurethane foam is lethal as a primary and secondary source of fire ignition. Despite the spiralling toll of death and injury, little has been done to end the carnage, and much was done by a complacent industry to frustrate advances in foam technology.
The statement made to the House on 11 January by the Parliamentary Under-Secretary of State for Corporate Affairs, as he now is, represented a major U-turn in Government policy and set out the Government's resolve to ban the sale of both standard and high resilience polyurethane foam by February 1989. In 20 minutes the Government moved 20 years.
It was no coincidence that changes were announced following what must have been the most intense public campaign over the past decade. For those of us involved it was sickening to realise that for the necessary pressure to be brought to bear on both the Government and the industry 17 children and 10 adults had to die between Christmas eve and 10 January. Hundreds before them died in household fires, and firemen and those in the industry died, too, as a result of this appalling foam, which should have been banned 20 years ago.
The changes that we make will stand as a memorial to the tragic loss of life, to the bravery of those who vainly tried to save lives and to the courage of those left to cope.
The pressure was maintained and, following a meeting between the Under-Secretary of State for Industry and Consumer Affairs, the hon. Member for York (Mr. Gregory) and myself, the Government extended the ban to beds and mattresses. The Minister's written answer yesterday to the hon. Member for York contained further changes in the fire safety regulations. The draft regulations, now in the Library, make further concessions on a number of key matters, and I recommend that the House study these proposals carefully and that hon. Members submit their views to the Minister by 12 May.
The Minister's proposals are, however, deficient in two major aspects, both of which are central to eliminating the 300-plus deaths and 7,500 injuries a year caused by polyurethane foam fires. First, there is the failure to ban the sale of secondhand furniture and bedding with polyurethane foam fillings and ignitable coverings. Secondly, the ignition source test for other dangerous substances, such as fibre fillings, is significantly less stringent than the proposals for the new safer combustion-modified high resilience foam.
If we are to tackle the real source of carnage and horror in polyurethane fires, we must recognise and understand the social, economic and housing conditions that give rise to the overwhelming majority of such fires and the
1006
subsequent deaths and injuries. The Home Office report, "Housing Factors and Fires", issued two years ago, made it crystal clear that there was a direct link between low incomes, old age, large families, social problems, bad housing and high fire risk, and the death toll proves that link.
In practical terms, the Government's proposals mean that those who can afford new, safer furniture and beds will be protected by the law, but the poor will be denied that protection. It will still be legal to sell furniture and bedding stuffed with polyurethane foam, which will kill a family in three minutes if ignited, so long as it is labelled "Secondhand." This black hole in the regulations means that thousands more of our citizens will die or be injured. That is totally unacceptable. It is absurd that a shop can legally sell secondhand killer foam furniture in one part of the premises, and the new, safer foams in another. The new-for-old sales discount schemes currently in operation, and the dumping of current stocks on the secondhand market, will lead to three specific problems—confusion and danger for customers, policing difficulties for fire authorities, and legal nightmares for trading standards officers.
My Bill will achieve a number of improvements. Clause I will ban the sale of secondhand furniture and bedding containing polyurethane foam, the definition of which is set out in section 10(5) of the Consumer Protection Act 1987. Clause 2 will create an offence of supplying secondhand furniture as defined by that section. This is essential because of the unscrupulous nature of some people in the industry who will seek to dump stocks on the secondhand market before February 1989. Clause 3 will strengthen the suspension of sale powers given to trading standards officers under section 12 of the 1987 Act. Clause 4 will make fibre fillings subject to the British standards specification to be adopted for the safer foams, as set out in the appendices to the draft Furniture and Furnishings Fire Safety Regulations 1988.
I urge the House to join the fire authorities, the Institute of Trading Standards Administration, the Fire Brigades Union, the Furniture Timber and Allied Trades Union and the Consumers Association in supporting the Bill and ending once and for all the vile and evil trade that has brought so much misery, pain and death to thousands of our fellow citizens.
Question put and agreed to.
Bill ordered to be brought in by Mr. Ian McCartney, Mr. Frank Doran, Mr. Keith Bradley, Mrs. Alice Mahon, Ms. Dawn Primarolo, Mr. Eric Martlew, Mr. Roger Stott, Mr. Lawrence Cunliffe, Mr. Terry Lewis, Mr. John Battle, Mr. Henry McLeish and Mr. Sam Galbraith.

POLYURETHANE FOAM (MISCELLANEOUS PROVISIONS)
Mr. Ian McCartney accordingly presented a Bill to ban the sale of secondhand furniture and bedding which contains polyurethane foam or other dangerous inflammable substances from January 1989: And the same was read the First time; and ordered to be read a Second time upon Friday 13 May and to be printed. [Bill 108.]
Mr. Max Madden: On a point of order, Mr. Deputy Speaker. I ask that the record should show that while my hon. Friend the Member for Makerfield (Mr. McCartney) was moving his important ten-minute Bill only six Conservative Back Benchers were

1007
present, only five journalists were in the Gallery and Mr. Andrew Rawnsley left before my hon. Friend had even moved the motion.
Mr. Deputy Speaker (Sir Paul Dean): That is not a point of order for the Chair.

Welsh Affairs
Motion made, and Question proposed, That this House do now adjourn.—[Mr. Lightbown.]
5.15 pm
Mr. Ray Powell: On a point of order, Mr. Deputy Speaker. I seek your guidance for future reference. I am sure that you or the Speaker's Panel could do something about this. When St. David's day falls on a Tuesday and a Welsh day debate is declared for the same week, surely you and others could use your influence on Government sources to ensure that the debate is held on St. David's day. I understand that the Secretary of State could not attend a Welsh day debate yesterday because he was busy launching press statements all over the country. I am sure that most people in Wales view with disquiet the fact that when the whole of Wales was celebrating St. David's day the foreigner—the right hon. Member for Worcester (Mr. Walker)—who is Secretary of State for Wales could not find time to come to the House.
Mr. Deputy Speaker (Sir Paul Dean): The hon. Gentleman and the whole House will know that that is not a matter for the Chair. However, I am about to call the Secretary of State.
5.16 pm
The Secretary of State for Wales (Mr. Peter Walker): In response to the point raised by the hon. Member for Ogmore (Mr. Powell), I should make it clear that I had nothing whatever to do with the fixing of today's debate. The hon. Gentleman may be interested to know that in the years since the new arrangements were made in 1979 the debate has never been held on St. David's day, so perhaps his point of order will be considered in the right perspective.
I rejoice at the opportunity of opening the debate and reflecting on the considerable improvements that have taken place in the past year in many aspects of the Welsh economy and Welsh development. One of the first tasks that I undertook when I took on my present duties was to read through the Official Report of similar debates on the Welsh economy that have taken place at this time of the year.
For seven or eight years, those debates were introduced by my predecessor and I begin by paying tribute to him for the considerable work that he did in the interests of the Principality during his period of office. Many of the improving trends that we have witnessed in the past year — in unemployment, take-up of factories, derelict land improvement and many other spheres—have been due to decisions and actions that my predecessor took before giving up the position of Secretary of State.
My predecessor was Secretary of State in a very difficult period. There was a worldwide recession on a considerable scale. Manufacturing industry throughout the Western world declined considerably and employment in those industries decreased considerably throughout Europe. Added to the problems in Wales was the considerable decline in manning in the coal and steel industries. Since 1973 the number of people employed in the coal and steel industries in Wales has fallen by 76,000, creating considerable problems for the Welsh economy.
Unemployment is still much too high and a great deal of progress remains to be made in reducing it. We have

1009
inherited, partly from those industries of the past, a considerable volume of bad housing which needs to be tackled, as well as a range of problems connected with health which do not apply to many other regions. There is also a great deal of land dereliction with slag heaps and former premises no longer required. The phasing out of a substantial part of the employment in coal and steel which has taken place over the whole post-war period but on a very substantial scale in the past 15 years has thus created considerable problems.
The good position for Wales now, for the first time in several decades, is that the decline in the number of people employed in those two basic industries has very much come to an end. The steel industry that remains in Wales has enjoyed high levels of investment. It is showing remarkable production figures, and after privatisation it will be in a strong position to compete and to do well throughout the European market.
It is interesting to reflect that over the past few years the number of people employed in the coal industry has declined from 30,000 to 10,000. The pits that remain have substantial reserves and there has been substantial investment in them. It is also interesting to note that when 30,000 people were employed in the Welsh mines, they produced 7·9 million tonnes of coal. However, with two thirds of the work force gone, and with only 10,000 people left, the current production figure is about 7 million tonnes, which shows the strength of those pits and the heavy investment that has taken place in them.
There is one sector in which I should like the coal industry to expand. I should like the Margam project to proceed. Some £90 million worth of investment has been given to that new element of the coal industry, and that pit will provide 800 jobs. I hope that negotiations will be completed quickly so that that important development can take place.
In the context of the considerable problems that remain, we can look upon last year as being one of considerable achievement. Unemployment has fallen by 26,900 on a seasonally adjusted basis and by 28,400 on an actual basis. The number of lettings of the Welsh Development Agency's factories over the past 12 months is an all-time record. The number of WDA factories that are vacant is down to the low figure of 8 per cent. In many areas, there is an urgent demand for more factories to be made available quickly.
Mr. Dafydd Wigley: The reported figures show a decline in unemployment. Everyone welcomes a decline in unemployment, but some areas are experiencing considerable difficulty in reducing unemployment and in some places, such as the Dwyfor area, the problem is worsening. The Secretary of State has concentrated his attention on the valleys — we accept that there are problems in the valleys—but will he assure the House that he will bear in mind the very difficult problems in other areas?
Mr. Walker: I shall make some remarks later about the difficulties affecting those areas.
We have announced a substantial factory-building programme. Factory building is going ahead at the highest levels on record. Regional assistance over the past 12 months has provided 27,500 new jobs, compared with 20,000 during the year before. Investment from overseas
1010
is at an all-time record, and Wales has achieved a far greater proportion of investment from overseas than any other region of the United Kingdom.
In the past year, we have seen signs of substantial improvement in financial services. Anybody visiting Wales recognises that much activity is taking place in every region. Recently, a leading German banker and myself — I am anxious that his bank, which has considerable influence on German industry, should take an interest in potential development by German manufacturers in Wales — flew over Swansea, Cardiff, Newport and some of the valleys.
Mr. Ray Powell: We read about that yesterday.
Mr. Walker: I hope that the hon. Gentleman will rejoice at the fact that that gentleman commented that one cannot see any other place in Europe in which so many factories that have been built over the past five to 10 years are now operating. That was his reaction at what is taking place.
I visited the Heads of the Valleys with the local authority leaders for that area, and they took me to the parts of the valleys that they wished to develop and described the activities that are taking place. Having visited many parts of the valleys, we remarked on the considerable volume of activity in building new factories, opening new workshops, improving high streets, houses and a range of other matters.
Mr. Ray Powell: When the Secretary of State was flying over parts of Wales, I assume that he flew over Maesteg, Ogmore valley and the Garw valley, where in his previous appointment as a Minister he closed every pit in my constituency because of the economic policies that were being pursued by the Government in 1979. That policy led to the closure and bankruptcy of a number of firms in my constituency. Did the right hon. Gentleman draw his visitor's attention to those matters?
Mr. Walker: If I had wanted to, I could have flown over many more pits that were closed by post-war Labour Governments. The hon. Gentleman knows that if we were to have a competition about who closed the most pits, Labour Governments would win hands down. The difference is that when Labour Governments closed pits there was no coal board enterprise company trying to provide other jobs in the areas concerned.
During my recent visits to north Wales, I have seen a great deal of activity, with many new factories opening. A diversity of new firms are moving into areas in which Courtaulds used to be so dominant. In mid-Wales—the area with which the hon. Member for Ogmore (Mr. Powell) is concerned—many rural areas are experiencing particular problems. It is pleasing to note that Mid-Wales Development has, on average over the past 12 months, made a new letting every three days. That shows that a great deal of activity is taking place in the area.
If one wishes to know the updated position, one has only to consider the recent surveys carried out by the CBI and the Cardiff chamber of commerce, which both show a more optimistic position for Wales than at any time since such surveys were made. One should take particular note of the most recent Wales CBI survey, which said:
"Welsh industry is preparing for a huge injection of investment cash over the next 12 months …
A record number of firms are planning to increase investment in plant and machinery with a sizeable proportion aiming to plough money into new buildings.

1011
The Welsh investment prediction, which is well ahead of that for the UK as a whole, follows several months of booming order books which have reached record high points in the past three months.
Jobs growth during the past four months has also been higher than expected and the upward trend is set to continue well into 1988.…
Overall, Welsh manufacturers are in a very confident mood. Eighty-nine per cent. said they were either as optimistic or more optimistic than they were four months ago. This represents a significantly more buoyant mood than is displayed by UK industrialists in general."
Mr. Rhodri Morgan: I am pleased that the Secretary of State has referred to that survey, which shows that investment in manufacturing industry is finally reaching the levels of 1979. Will the right hon. Gentleman acknowledge that the survey shows that when he, in conjunction with the Chancellor of the Duchy of Lancaster, scrapped regional development grant, all that he did was to save the Government a great deal of money? Much of that investment would have been eligible for regional development grant, and it might have been redoubled into further investment if regional development grant had been available. By chopping regional development grant he has saved the Government a great deal of money. He has not, as he told the public of Wales and the House, granted Welsh industry a facility. He has taken it away.
Mr. Walker: As always, the hon. Gentleman has got it completely wrong. I am pleased to say that the enormous uplift in regional aid that I have announced will be of considerable further benefit. I shall be delighted to give the hon. Gentleman some figures to show how those changes in regional development grant have resulted in a large additional boost.
The present position is one of considerable buoyancy. The number of vacancies in various parts of Wales has increased considerably. Advertisements in last week's newspapers in the Swansea area show that the number of situations vacant is 51 per cent. higher than at the same period last year. Job vacancies in the major newspaper in north Wales are 106 per cent. up on the level of a year ago. That reflects a considerable improvement.
I am delighted to say that there are signs that regional policy will have a considerable impact over the next three years. I stated emphatically that one of the benefits of not ending regional grant immediately but allowing applications to be submitted before a certain date is that a considerable boost is given to investment decisions, which can be brought forward. That will bring a considerable amount of additional money to Wales. I am delighted to say that, since my announcement, 570 applications have been made in two months. In January and February of last year, which was a good year for regional development grant, there were 303 applications. It is likely that the amount coming from the regional development grant will be substantially larger than the estimates. That will be of great benefit to Wales.
I am pleased to tell the House that, as a result of the additional provision of money, the Welsh Development Agency has now embarked on a three-year factory building programme, with a direct investment of £130 million in new factories, and 4·5 million sq ft of new factory space to be built. Moreover, substantial improvements will take place as a result of our encouragement of private investment in factory building.
1012
The Welsh economy has benefited from other factors that have resulted from the general trend. I am delighted to tell the House that Dow Corning announced today that it is embarking on an investment programme involving a further £20 million in its silicon plant, which will enable the firm to become the key silicon supplier in Europe. That is on top of the £100 million programme that is coming to an end, and it is possible that still larger programmes are being contemplated.
I am also glad to say that a major American electronics firm which has been operating in the United Kingdom for the past 15 years, with a base in Cambridge employing 58 people, has now decided that owing to the nature of the European market it wishes to obtain major provision for supplying that market. It has chosen the Baglan industrial park, and is going in quickly to develop a factory there, which will provide 300 new jobs in the area. That is an example of inward investment decisions that are now taking place on a considerable scale, and will, I believe, continue to do so in the period that lies ahead.
With such economic progress, the economy is also stronger and better able to tackle some of the major social problems in Wales. In spite of the considerable extra provision that has been made in the health services in Wales— per cent. more in real terms, a £500 million capital programme and more nurses and doctors—there is no doubt about the considerable demand and need in Wales. I am reviewing the need element in regard to the distribution of health expenditure in Wales, and examining the various ways in which we can improve the services shill further.
In housing, there was a remarkable achievement over the period of my predecessor, when 142,000 homes in Wales were improved. As every hon. Member knows, that programme completely dwarfed the previous one. I am pleased to say that it is continuing, and we have arranged that the expenditure next year will be some £101 million, an increase of 19 per cent. over that of the past year. The new Housing Corporation that I have announced will, I hope, start operating quickly, and that too will make an important impact.
There are, however, a number of other spheres in which we need to concentrate our activities and policies over the next year or two.
Mr. Donald Anderson: The Minister has drawn attention, quite properly, to the substantial increase in house improvement. Was there any particular reason for his not mentioning new build? Is he not aware that there has been a complete slump in new build in Wales over the years of his Government, at a time when household formation and homelessness are both increasing?
Mr. Walker: The operation in new build of the housing associations has increased massively in recent years. Moreover, figures for new build in the private sector are substantially up. In addition, Wales had a very large stock of housing needing repair — which, alas, was incredibly neglected under the last Labour Government, as the hon. Gentleman knows. I am delighted that my predecessor concentrated on that to the degree that he did.
We should always remind ourselves that the present Government have spent an average of £93 million a year on house improvement, compared with the £29 million

1013
spent by the Labour Government. Anyone who is interested in improving housing in Wales should judge the differing records of the two parties.
Mr. Michael Foot: We are all very much in favour of the home improvement scheme, and, indeed, want it reinstituted on a larger scale as soon as possible, because the clamour for it is very great. I hope that the right hon. Gentleman will make an announcement about that.
As the right hon. Gentleman gives figures for home improvements, why does he not give us the figures for new housing that his Government stopped, and for the number of people thrown out of their jobs on that account?
Mr. Walker: I should be only too happy to ask my hon. Friend who is to reply to give the right hon. Gentleman whatever figures he wants on new houses. However, as the right hon. Gentleman knows from his constituency, the all-important need was that of the large number of houses requiring renovation. Perhaps when he speaks he will explain how the number of grants provided went from 7,000 in 1977 to 5,900 in 1978, and to 1,100 in 1979, compared with the 19,000 to 20,000 a year now being provided. Perhaps, as the right hon. Gentleman wants to hear of an even bigger increase, he will explain the decline that occurred when he was a member of the Cabinet.
Mr. Foot: Will the right hon. Gentleman now give us the figures for which we asked? If he came to the House so well equipped on the issue of housing, and so determined to tell us the truth, will he tell us why his Government, while he was a member of it, brought housing in our constituencies to a standstill? We want to see a great expansion of the house improvement scheme and of new housing, and our people getting back to work. That is what the right hon. Gentleman ought to be doing, instead of prating about irrelevant matters.
Mr. Walker: Whenever the right hon. Gentleman explodes like that, we know that he is on a very bad wicket. He now says, "Although you are doing four times as much as I did when I was responsible, we should like you to do still more." I have given him the good news: we are increasing expenditure by a further 19 per cent. in the coming year—increasing a record that is already better than his.
Mr. Nicholas Bennett: Has my right hon. Friend seen the figures from the National House-Building Council, which show that in Wales last year 8,300 new homes were built—four times the increase in the rest of the United Kingdom? That shows the progress that is being made.
Mr. Walker: There is considerable expansion in private building at present. In view of the housing stock and the requirements of Wales, I feel that it is absolutely right to concentrate on house improvement to the degree that we have.
The Government will be concentrating on a number of matters over the coming 12 months or two years. For instance, we wish to continue the considerable reduction in unemployment that we have achieved, and the considerable injection of investment and activity throughout the Principality. We shall be conducting with WlNvest — which we are providing with greatly
1014
enhanced resources — further campaigns on inward investment, on a considerable scale. Ministerial visits will be made to a number of countries where we believe that there is very good scope for improving inward investment, and a specific and detailed programme will be carried out.
First, we are in close competition for inward investment with other regions of the United Kingdom and other parts of Europe, but our record over the past couple of years has been better than anywhere else. I am determined to see that that trend continues as a result of the increased resources that I have provided.
Secondly, we wish to organise a far more detailed and active drive to involve the Welsh economy in exports. Wales' export record is not good. A number of Opposition Members have pointed out the failure to take up grants and services available in Wales, compared with other regions. A classic example is that of the export services. Only 2·4 per cent. of applicants for the export intelligence service provided by the Department of Trade and Industry come from Wales. Only 1·76 per cent. of participants in trade fairs come from Wales, and for export representative services the figure is 0·75 per cent. We shall, therefore, conduct firm by firm an active campaign of briefing, taking note of the current information. We shall also endeavour to make Wales far more European market-oriented during the next few years, with a range of campaigns that we intend to conduct with Welsh business men. We are also arranging a number of special export missions from Welsh business.
The third area in which I hope for increased activity is Welsh agriculture, and particularly the food industries. Welsh agriculture, like a great deal of European agriculture, will have its problems and difficulties during this period, but there is no doubt that one of the most important aims in assisting the rural areas and Welsh agriculture is to try to improve marketing and value-added processes to link with Welsh food products.
Mr. Richard Livsey: Will the Secretary of State consider the urgent business of providing extra funding for the Welsh Agricultural Organisation Society, which has a good record on the marketing of Welsh agricultural products, to enable it to start new initiatives?
Mr. Walker: I have been discussing with the WDA the whole programme of actively supporting the food industries, and, in the important areas of horticulture, cheese, lamb—and others—it is coming forward with imaginative new schemes. Overall, I hope that, in conjunction with the farming communities, the food industries and the retailers, we can have much more concerted activity on getting more value added to Welsh agricultural production.
The fourth area of activity will be the craft industries. I have published the report done by Tony Ball on how we can reorganise them. I await the response to that report; I have asked for it to come in during the next few weeks. Shortly thereafter we shall make a range of decisions to give a new momentum and drive to the craft industries throughout Wales.
The fifth area is tourism. For the next year, we have provided a 9 per cent. increase in financial facilities for the Welsh tourist authority, added to which we shall obtain through negotiation better facilities for overseas marketing. Welsh tourism is an important and expanding

1015
industry and a great deal of investment is now being made in it. With the many major urban developments taking place in parts of Wales, the role of the hotel industry will grow. In that context, I appreciate and am grateful for the manner in which the leaders of all the parties that are represented in Wales condemned the actions that took place in Chester last weekend and the damage that they could do. Whether they were the actions of one person, two people or a small group, they do not reflect the attitude of the people of Wales to welcoming visitors from overseas and other places.
Sir Raymond Gower: The Welsh tourist industry has a good record in the United Kingdom, but its weakness is that it attracts relatively few people from overseas. That underlines the bad decision not to permit Wales to have its own Welsh tourist board with powers to advertise overseas — such as the Scottish tourist board has. This issue must be pressed. Wales needs that power.
Mr. Walker: I understand, but disagree with my hon. Friend. There will be greater benefit from the new arrangements we have made with the British tourist authority. As a result of the Select Committee's report, we have negotiated new arrangements that will greatly help to attract more visitors from overseas. They will serve greatly to improve the position.
The sixth area in which I want to take action is the continuing programme of removing derelict land. The amount of money allocated to that work by the WDA in 1987–88 was 30 per cent. up on the previous year. We have now decided to allocate a further 18 per cent. for 1988–89. The WDA has now agreed a three-year programme that is 40 per cent. up on the land reclamation programme that was originally planned. It includes land reclamation, urban renewal and environmental improvement. The WDA has decided that, with the extra money made available to it, it will increase those facets of its programme by 40 per cent. for the next three years. The removal of dereliction is taking place on a considerable scale, but there is a vast amount to be done. I think that the whole House will welcome the substantial increase I have announced today for improving the programme.
The seventh area in which we must continue to be active and in which I hope for further successes is that of encouraging the service industries and financial services to come to Wales. It is important that not only the Companies Registration Office but the Patent Office is coming to Wales. The decision by the Chemical Bank to establish its European administrative headquarters in Wales has been a considerable success. This year there was the important decision by the Trustee Savings Bank, and almost every major international firm of accountants and management consultants has, over the past two or three years, decided either to expand greatly or to create an office in Wales. I hope that we can attract one or two overseas banking houses to take an interest in the considerable developments in Wales, and attract many of the service industries in the south-east to profit from the considerable advantages of coming to the Principality.
The eighth area is education and training, and it is linked with some of the things I have already mentioned. I hope that the business school connected with the University of Wales in Cardiff and the new research programmes available to the universities will strengthen
1016
the Welsh universities and their connection with industry. I also hope that we can persuade the university system that provision should be made for teaching Japanese, because of our becoming the principal choice in western Europe for Japanese inward investment. I believe that our university system has a good facility for that, and it would be an important aim to achieve. I hope that the provisions in the Education Reform Bill to enable teachers and pupils to have a closer association with industry and commerce will be executed even more successfully in Wales than anywhere else. That will benefit—
Dr. Dafydd Elis Thomas: On the higher education aspect, and the link between higher education research and industry, is the right hon. Gentleman aware that the proposals of the DES include the setting up of university research centres? The Secretary of State for Education and Science referred to three such centres earlier this week during the debate on science. None of them is planned for Wales, so will the right hon. Gentleman ensure that one of those centres will be established in the University of Wales?
Mr. Walker: Research is important, and I shall discuss these matters with my right hon. Friend.
There is an important role for the Manpower Services Commission to play in training. I am pleased that it has budgeted to spend £200 million in Wales during the coming year. I hope that when it examines its training programmes it will consider the new and diverse needs of Wales, particularly in some of the service industries, and will train people for them.
Mr. Anderson: The Secretary of State mentioned the link between schools, business and exports. Will he take a close look at the decline in foreign language teaching in our Welsh schools, in which foreign languages — apart from one—are being phased out? That must surely have an effect on the training of Welsh entrepreneurs.
Mr. Walker: Yes, I shall look into that. Language tuition throughout the United Kingdom is not necessarily linked with the important and expanding languages of the world. The lack of the teaching of Spanish in the United Kingdom — including Wales — despite its growing importance worldwide, shows that.
The ninth area in which I wish to carry out some changes is that of improving the activities of the enterprise agencies, which have been highly successful in Wales. In the past year the WDA has had no fewer than 39,000 inquiries from people wanting to know about starting businesses and the various facilities that are available. That shows the need in every region of Wales for a substantial improvement in the quality of advice and of the enterprise agencies that operate there. We are reviewing the position to see what action can be taken to improve it.
Communications is the tenth area for fundamental improvement. I hope that swift procedures will be followed so that the Severn bridge crossing can be in place in good time for the mid-1990s. The growth in traffic and in the Welsh economy shows how important that will be. In north Wales, we have already completed two thirds of the dual carriageway on the A55 between Chester and Bangor, but the one third that has yet to be finished is important. When it is completed in the early 1990s it will have a considerable impact on business development in north Wales.
Mr. Keith Raffan: Will my right hon. Friend consider the need for access roads to the A55 from industrial and tourists areas? All hon. Members from all parties representing constituencies in north Wales are concerned about that.
Mr. Walker: I recognise that fact. My hon. Friend is aware that the county authorities have responsibility in that respect. However, we will want to have positive discussions with the authorities. At present, £285 million worth of roads are under construction in Wales and they include some important bypass schemes in mid-Wales which will help those areas.
The Welsh economy is progressing at a good pace. Many new enterprises are entering the area from overseas, and new enterprises are starting in Wales. Several major schemes will take place in the years ahead including the Cardiff Bay development, and the development of several other south Wales ports, the garden festival at Ebbw Vale, which will have considerable implications for all the valleys, and the building of the new world trade centre in Cardiff.
We can now take full advantage of the potential of the European market. With the extension and freeing of the market by 1992, we can argue that Wales is in a particularly strong position as it has a unique geographical position in relation to Portugal, Spain and Ireland. That position could be very important.
Mr. Ted Rowlands: Before the Secretary of State begins his peroration, I must say that we were expecting him to clarify the position of the valleys initiative. Over the past month or so several programmes have been announced including the reclamation and industrial development programmes. What will the valleys initiative be now? Will more money be available to those areas than has already been announced or half announced?
Mr. Walker: I have made it perfectly clear that I will announce the valleys initiative when I have completed my discussions with the various authorities, local authorities and agencies concerned. I am glad to say that good progress is being made. Of course the hon. Member for Merthyr Tydfil and Rhymney (Mr. Rowlands) must be delighted at the considerable factory programmes that have been announced, even before my announcement, and the considerable improvements that have been made. The hon. Gentleman must be very pleased at the progress that is being made around Merthyr Tydfil. I am sure that he will be delighted by the good news that will come soon. I understand his impatience, but I look forward to him cheering loudly when the good news comes.
This has been a year of very good progress. If we apply ourselves positively in the areas that I have suggested today, even better progress will be made in the years ahead.
5.52 pm
Mr. Alan Williams: May I first register the Opposition's objection to the fact that a highly controversial statement was made before the only Welsh debate of the year. It was known that Welsh Members were already angry about the fact that the debate was taking place today—we do not want to enter into that issue again—and it was ridiculous to have a statement that inevitably would take an hour or more to complete in advance of this debate.
1018
This is our first debate on the Floor of the House on the present state of Wales and its future since the Secretary of State took up his post. It gives us an opportunity to check the progress that has been made after six or seven months. The debate also gives us the chance to see whether the reality matches the hype. One thing that we have not been short of in the past few months is hype from the Welsh Office.
Let us first consider the background. Let us establish the wide range of deprivation with which we must contend in Wales and measure that against the rather narrow objectives that the Secretary of State has set himself.
The high level of unemployment—it has doubled in Wales — is a problem in itself, but it tends to divert attention from equally serious problems in Wales. We are, after all, one of the poorest parts of the United Kingdom. Only one other region has lower average earnings than Wales.
Mr. Morgan: Northern Ireland.
Mr. Williams: Average earnings in the south-east are a full £3,000 a year higher than in Wales. As my hon. Friend the Member for Cardiff, West (Mr. Morgan) said, Northern Ireland is the only area with a lower income per head. Our internal purchasing power and our internal ability to generate demand is the most limited in the United Kingdom. The gap is widening.
Mr. Nicholas Bennett: Will the right hon. Gentleman give way?
Mr. Williams: No, I want to make some progress in my speech.
The gap is widening. If the hon. Member for Pembroke (Mr. Bennett) cares to consider the figures, he will see that from 1979 to 1987 average full-time earnings increased by 110 per cent. in Wales, but by 135 per cent. in the south-east. Other parts of Britain, which already have a purchasing power advantage over Wales, are seeing a higher rate of increase in purchasing power.
Mr. Nicholas Bennett: Does the right hon. Gentleman agree that he has left out part of the equation whereby one must consider gross disposable income after taxation and after making allowances for mortgages? When we consider the high cost of housing in the south-east and elsewhere in parts of the United Kingdom, we see that the disparity in spending power between Wales and other areas is not as great as the right hon. Gentleman claims.
Mr. Williams: I would be fascinated to hear the hon. Gentleman produce some figures—perhaps in his speech rather than in mine—to demonstrate his point. I have seen no figures to substantiate that view. Indeed, the figures that I have seen for mortgages, which tend to vindicate our fears about income levels in our part of the country, reveal that the repossession rate is at its highest in Wales.
Faced with the problems of poverty and low pay, the Government's answer is to tell the lowest paid, including manual workers in local government and in hospitals, that they should take pay cuts and lose their jobs. The Government have told the impoverished and people on supplementary benefit that from 1 April they will not need to look to the Department of Health and Social Security for grants. If they want help, they will have to accept loans.

1019
The lowest income families in Wales are being told that they must live on credit. That is the Government's soulless approach to the problems of low incomes and low pay.
A similar argument can be made about homelessness. I must state right away that I recognise and welcome the achievements that have been made in renovation. I am glad that more renovation work will be carried out. There is no point of difference between us on that. However, homelessness is about roofs over heads. My right hon. Friend the Member for Blaenau Gwent (Mr. Foot) tried to make the point that while homelessness has increased by 28 per cent., and while we are confronted with record housing lists in virtually every housing authority in Wales, it is not good enough to look to the council house building programme and discover that it is now one fifth of what it was in 1978. The figure of 744 new council houses built in 1986—the last year for which figures are available—must be seen against the background of the "Welsh Digest of Statistics", which dates back to 1949. In that context, the 1986 figure is the lowest ever for public sector housing. The Government's policies are not meeting the needs of the homeless. Indeed, their policies are not aimed at meeting those needs.
There are also enormous health problems in Wales and we went into these problems in great detail in the Welsh Grand Committee recently. There are shortages of nurses and doctors. There is a shortage of hospital beds, and we now have the smallest number of hospital beds in Wales since the Health Service was established. Not surprisingly, the corollary to all those circumstances is that waiting lists are intractable and defy all the efforts of the Minister to meet his commitment that from 1 April no one would wait more than a year for in-patient treatment. In fact, there are still more than 9,000 people on the lists.
Mr. Ron Davies: Will my right hon. Friend cast his mind back to Question Time on Monday, when we tried to get a response from the Minister about the position in Mid-Glamorgan where there have been such drastic cuts to the Health Service that there is a shortage of nurses and in their final hours old people are being left to die literally without nursing care? Does the Secretary of State for Wales not have a responsibility and an obligation to be accountable? It is his Health Service and he is responsible for it now.
Mr. Williams: Exactly. One of our misfortunes is that it is virtually impossible to get answers on anything from the Secretary of State for Wales. Question Time is almost a farce. The Secretary of State even answers questions that have not been asked.
The problems of health, homelessness and low incomes are just a few of the problems that we find in what the Secretary of State likes to describe as booming Wales. Those problems exist in addition to the problems of unemployment. They exist at the present level of spend and that is important for what I want to say.
Mr. Raffan: The right hon. Gentleman was fair in acknowledging the amount that the Government have spent on home improvements. I know that he would not be so churlish as to refuse to concede that vastly increased amounts have been spent on the Health Service in Wales. There has been a 39 per cent. increase. I am sure he will acknowledge that that has been made possible by the strength of the economy within the United Kingdom. How much extra would his Government spend on the Health
1020
Service if they were ever returned to office, and what waiting lists would be acceptable to his Government—zero, or a few thousand here and there? Can he give us some answers?
Mr. Williams: The hon. Gentleman knows that we went into those matters in detail just the other week and I shall deal with them later. However, as he has asked the question, I shall give him a passing answer. The hon. Gentleman referred to the affluence and strength of the economy, which he said had enabled the Government to increase their annual spending, after deductions for inflation, by 4·1 per cent. That is still below 4·6 per cent., which is the rate at which it increased under the previous Labour Administration. I do not want the Secretary of State to anticipate what is to come, because I am sure that he will be delighted with the comments that I intend to make about his programme. —[Interruption] It is difficult for the Secretary of State when he is trapped on the Floor of the House. He cannot run out and hold one of his press conferences. He has to communicate vicariously through his Parliamentary Private Secretary.
As I have said, the problems I have described exist with the present level of finance. Therefore, they can he solved only if extra finance is devoted to them. I was intrigued to read the article in The Observer, entitled "Brave New Wales." It talked about the funding that the Secretary of State had obtained for Wales. It contained the delightful quotation about when he asked the Cabinet for money. He said:
"I received every penny I asked for".
Many newspapers went overboard when the right hon. Gentleman announced his new programme for spending in Wales for the next year. He talked about an enormous increase of £259 million. It sounds very good. The trouble is that when it is matched against what was being spent this year, and once we deduct 4·5 per cent for inflation, the increase of £259 million becomes a cut of £6 million. That should not have been a surprise to the Secretary of State, because the figures are stated clearly in table 2.2 of the Treasury's White Paper on public expenditure. Therefore, the man who received every penny that he asked for is receiving £6 million less than last year, and £54 million less over the next three years. Perhaps it is not the Secretary of State's fault. Perhaps the crafty Chancellor of the Exchequer did not show him table 2.2 and he was conned in the same way as the press.
The Secretary of State has a bit of a problem. Wales is expecting more because it has been told by the Secretary of State that there is to be more. He has the additional problem of having to spend 2 per cent. more on health just to stand still, and he has to finance the new valleys initiative. All that has to be found from the new sum of money, which is £6 million less than the amount that caused all the problems that I mentioned at the start of my speech.
The hon. Member for Delyn (Mr. Raffan) asked about health, and I am glad that he did. I will tell the hon. Gentleman what has happened. One of the ways in which the Secretary of State will achieve some of the other things that he has announced today is by pruning the pattern of spending on the Health Service. As I pointed out in the Welsh Grand Committee, the right hon. Gentleman boasted that spending under this Administration has

1021
increased by 4·5 per cent. a year after allowing for inflation. I pointed out that, because he had left out the first year, the figure was 4·1 per cent.
It is in the Secretary of State's interest to accept my figure rather than his, otherwise what is about to come will make his plans look even worse. His predecessor achieved an increase of 4·1 per cent. but for the next three years the Secretary of State will have a total increase of only 3·3 per cent., or 1 per cent. a year. At a time when the NHS in Wales is near collapse, we have Mr. 1 per cent. in the Welsh Office. If he had sustained his predecessor's level of increase — not even the level that we reached — £30 million more would be spent on health in Wales next year. Think of what could be done with that money in Rhonnda, Mid-Glamorgan and other parts of Wales. It would help deal with the problem of waiting lists and the shortage of nurses. If the right hon. Gentleman had sustained that increase, we would see an extra £190 million spent in Wales over the next three years. That is all happening under the smiling, genial, good-hearted Secretary of State who believes that he has his priorities right.
There is no hope of reducing waiting lists or of eliminating the shortages on the programme that the right hon. Gentleman has proposed. As I said on Monday, I never thought that I would say that we were better off when his predecessor was holding the office of Secretary of State. The achievements are certainly very different from the image the Secretary of State has tried to portray.
Let us look a little more closely at some of the right hon. Gentleman's claims about jobs. I was delighted to hear the announcement of 300 jobs at Baglan. I am pleased about the location of the Patent Office, which will create about 500 local jobs. That will go a small way towards replacing the 8,000 Civil Service jobs that we have lost since the Government took office. At least it marks an about turn on their part. The Government abandoned the dispersal policy which, under my right hon. and learned Friend the Member for Aberavon (Mr. Morris), brought the DVLC to Swansea. They have now had to say that they got it wrong and that they will start doing it again. Not only does it make regional sense, but, as the Secretary of State had the cheek to say, it makes economic sense because it is cheaper. If that is so, why have they not been doing it for the past eight years? We welcome the Japanese investment. It is a continuation of a programme pursued by successive Governments. Inward investment is welcome in Wales. There is no difference of opinion about that.
A measure of the inadequacy even of those achievements is that in the week of the announcement about the Patent Office we lost 2,000 jobs in the coal industry. We gain on one hand and lose on the other. The latest figures show that since the Government took office there are 170,000 fewer people in employment. We should put that in perspective. I have mentioned the 300 jobs at Baglan. It would need 10 Baglans every week for a year to replace the jobs that have been lost since the Government took office. Understandably, we are delighted about Baglan, but we need one and a half Baglans a day just to get back to where the Government started. In the employment figures published within the last fortnight the Government announced the changes by region from June 1983 to June 1987. Wales was the only
1022
region that had a decline in civilian employment — employment plus self-employment — in the past four years.
The unemployment claims of the Secretary of State are also interesting. As we have already said, unemployment in Wales is still double its former level. We obviously welcome any decline, but the Secretary of State is not satisfied to say that there has been a change. Whatever it is, he has to be doing better than someone else. He could not just report the information blandly. He had to say:
"unemployment … has fallen faster in Wales than in any other part of the United Kingdom." — [Official Report, Welsh Grand Committee, 2 December 1987; c. 1.]
I asked the Department of Employment whether that was true. I thought that that Department should know, because it collects the statistics. In the Welsh Office they cook them; in the Department of Employment they collect them. Yesterday the Department of Employment gave me an answer. Over the past year, from January 1987 to January 1988, Wales was seventh—not first—out of the eleven regions for the rate at which unemployment had declined—56 per cent. behind East Anglia, the best. I thought that it was not fair to judge over just one year and that I should find out the rate over two years as well. I found that, again, sadly we were not first, but fifth—23 per cent. behind East Anglia. Over three years we were fourth — 19 per cent. behind the south-east. Over four years we were fifth — 44 per cent. behind the west midlands. Our relative position is worsening, not improving. We have slipped from being fourth at one time during the four-year period to being seventh over the past 12 months. In fact, in the past 12 months our position has fallen below the United Kingdom average.
Mr. Morgan: I wonder whether my right hon. Friend is being entirely fair to the Secretary of State. Perhaps there was a day or a week in which unemployment in Wales fell faster than in any other region. Has my right hon. Friend considered that?
Mr. Williams: Yes, I have. The trouble with us Welsh is that we are too good natured. I thought that those figures might be unfair to the Secretary of State and that he merited a chance. Why should he be lumbered with what happened over four years? He has been Secretary of State for only six months, so I thought that I should look at the past six months, because perhaps it is true that we have done better over that period. Sadly, the position is even worse — [HON. MEMBERS: "No."] We are fourth from the bottom, eighth out of 11 regions and 75 per cent. behind East Anglia, 53 per cent. behind the south-east, 32 per cent. behind the south-west, 23 per cent. behind the west midlands, 21 per cent. behind the east midlands, and so on. This is the Wales that the Secretary of State says is doing better under him than any other part of the United Kingdom and better than most parts of Europe.
Let us look again at the right hon. Gentleman's policies in relation to these basic facts. It is important to get the basic facts on the record. It is only fair to those who write the reports on what is happening in Wales that they should be given an alternative view from another Government Department.
Mr. Ray Powell: If the Secretary of State has been misleading the House and the nation with his replies and statements, he should be called to the Dispatch Box to

1023
explain whether his figures are correct, or whether the departmental statistics that my right hon. Friend has announced are correct.
Mr. Williams: On the basis that I never expect a real answer from the Secretary of State, I am sure that we can expect the Minister of State to try to cover it.
Mr. Peter Walker: I shall quote the figures from the Department of Employment. These are the figures published by the Department, in which every month for the past 18 months it has pointed out that the two regions with the biggest drop have been Wales and the west midlands. In the 12 months to January 1988 Wales is placed second, as regions are ranked by falling rate of seasonally adjusted unemployment, at minus 2·3 percentage points. The west midlands pips Wales at the post with 2·4 percentage points. The United Kingdom plus GB is 2 percentage points. When change as a rate of unadjusted unemployment is considered, Wales is first over 12 months, minus 2·8 percentage points, and second over 20 months, minus 2·7 percentage points, compared with the west midlands rate of minus 2·9 percentage points. That is the manner in which the Department of Employment has always published its monthly figures.
Mr. Williams: I invite the right hon. Gentleman to discuss the matter with the Minister who provided the answer and to look at the record during his own period in office.
Mr. Morgan: I think that the Secretary of State will admit that what he has just quoted was not the percentage fall in unemployment. But the difference between percentage unemployment at the beginning of the period and the percentage unemployment at the end date is 2·3 per cent. That is not the fall in unemployment expressed as a percentage of its previous level, which is the true measure of the fall in unemployment.
Mr. Williams: No doubt the right hon. Gentleman will have to explain himself to the House, and perhaps, on some occasion, he will condescend to talk to us here, instead of going into little private rooms to talk to the press, and we can then examine these matters in greater detail.
Faced with a decline in civilian unemployment—the only decline in all the regions in the United Kingdom—and a slip in the charts of regional unemployment, what does the Secretary of State do? He abandons the regional development grant and then has the effrontery to say, "It shows how right I was to do it, because everyone is scrambling to get the grant before it finishes. It is so good that we are going to get rid of it." That is the most peculiar argument that I have heard in my life—no, I am wrong, it is not. There is another argument—the justification of what is coming instead of regional development grant.
The Secretary of State is getting rid of regional development grant but, glad tidings for the valleys, they are to get his new regional investment grant. Well, that is delightful. What is it all about? The right hon. Gentleman spells it out with pride. The Observer article refers to it glowingly. Under the right hon. Gentleman's new scheme firms will get 15 per cent. of fixed capital costs, up to a ceiling of £15,000, for only 24 jobs. That is an average of £625 a job, which is taxable—so firms even have to pay tax on the assistance that they receive. The Secretary of State says, "That is a good deal, but in exchange you must
1024
give up your regional development grant." That also happens to be 15 per cent. of fixed capital. But there is an option: instead, one can go for an untaxable £3,000 a job, not £600 taxable, and up to 200 jobs, not up to 24 jobs. I reckon that when the right hon. Gentleman went to the pantomime with his parents lie was unduly impressed by Abanarzar. Up and down the valleys it is a case of new lamps for old, a £600 grant instead of a £3,000 grant. The Secretary of State thinks that he is doing well by the people of the valleys and that they will swallow the proposal.
The Secretary of State said that there was to be an enormous increase in regional aid. A recent article in The Observer stated:
"Walker is adamant that the higher budget will be sustained for another two years."
What is this enormous increase? The increase in spending on the Welsh Development Agency this year is £3 million. The enormous increase in combined regional development grant and regional selective assistance amounts to £6 million. Will that enormous increase be sustained, as the Secretary of State promised, over the next two years? The figure goes up by £3 million next year, comes down by £4 million the year after and remains at £4 million for the following year. Over the period, therefore, the figure remains virtually the same. So much for enormous sustained growth.
Perhaps that is unfair. Perhaps the enormous increase is occurring elsewhere. Regional grants go up from £98 million this year to £104 million next year, an increase of £6 million. Next year, they come down to £87 million—£11 million below what they are now. The following year they come down to £80 million — £18 million below what they are now. Instead of enormous sustained growth, there is a cut of £21 million over the next three years. In each of those years the amount of regional assistance is over £100 million less than when the Labour Government were in office. The cumulative loss to Wales from the time when the Government came to office to the end of the Secretary of State's planning period is almost £1 billion.
We are to be fobbed off with the valleys initiative. It might compensate the valleys for being robbed of their development area status, regional development grant and rate support grant. The Secretary of State has said that the funds must come from within the existing budget. The valleys initiative will be paid for by other parts of Wales. Those other parts of Wales do not begrudge the valleys having extra money, but it should be just that — extra money for Wales. It is not good enough for the Secretary of State, in a week or two, to go on television and claim the credit for that extra money for the valleys, while his officials are scurrying around other parts of the country picking the pockets of local authorities to make up the cash needed.
The Secretary of State referred to the improvement in derelict land. We welcome that and are glad that the WDA will use some of its money for that purpose. However, I am fascinated by the Secretary of State's claim in respect of an earlier valleys initiative. My right hon. Friend the Member for Blaenau Gwent and my hon. Friend the Member for Merthyr Tydfil and Rhymney (Mr. Rowlands) will be particularly interested in the article in The Observer of 21 February. In that article the Secretary of State stated:
"When I was Secretary of State for the Environment in 1970, we launched the first derelict valleys clearance. I toured the valleys—some of the places I saw were horrific. Now they're attractive again."

1025
When I was a Minister at the Department of Economic Affairs in the 1960s, I remember dealing with derelict land clearance in England. I wondered what the Secretary of State for the Environment was doing in the Welsh valleys, given that his remit does not extend there, so I took the trouble to telephone Lord Cledwyn. We eventually unpinned him from the ceiling and got him to the telephone. He was incredulous, because he, as Secretary of State for Wales, set up the derelict land programme after the Aberfan disaster.
I thought that perhaps Lord Cledwyn and I had got it wrong, so we telephoned the official in charge of the derelict land clearance unit under Lord Cledwyn and under the Conservative Administration.
Mr. Rowlands: Will my right hon. Friend give way?
Mr. Williams: Do not spoil it, Ted. It is good at the moment.
I did not even have to ask the official. As soon as he was told who was on the telephone, he said, "Do not worry. I know what you want to talk about. I have written a letter because I am so annoyed about it." He went on to say, "The Secretary of State did not even visit Wales." Then he qualified that statement by saying, "I have got it wrong. He came to Wales later, when he was Secretary of State for Trade and Industry. I met him in Cardiff and took him to Ebbw Vale. He said that he was rather nervous because they had been throwing tomatoes at him in Cardiff and, as he was going to Ebbw Vale to announce the closure of part of a steelworks, he was not eager to do so." The official assured him that the people in Ebbw Vale were very genteel, as my right hon. Friend the Member for Blaenau Gwent will confirm, and the Secretary of State was treated with courtesy during his visit.
The Secretary of State is claiming responsibility for the land clearance initiative in the valleys, but that started years before he came to office. It was the responsibility of another Department and he had no hand in it whatsoever, yet he expects credibility in Wales. They will call him "Shoni Walker" in the valleys.
Mr. Rowlands: My right hon. Friend is right. I cannot improve upon his devastation of the Secretary of State. I was the Minister responsible for the derelict land unit in 1969–70. My predecessor was Mr. Ifor Davies and the unit was established by Lord Cledwyn. I cannot recall the Secretary of State being involved in any such initiative. The Welsh Office led that initiative as a result of the terrible tragedy at Aberfan. [Interruption.]
Mr. Williams: We are only too happy to look at the record. Perhaps the Secretary of State would care to send it to us. I see that he is staying firmly in his place at the moment.
Wales has been bled by the Government. It is not just a question of £1 billion of regional assistance. We have lost £750 million in rate support grant to our local authorities. We have lost spending power through the increase in unemployment. That is why Wales does not have the capacity within itself. It is so financially weakened that it can solve its problems only with more public expenditure.
The resources are not available within Wales itself, yet the Chancellor of the Exchequer has £6 billion to £9 billion at his disposal in the Budget. No Government in our
1026
history have ever had such freedom to solve problems in this country, if only they chose to do so. [Interruption.] The Secretary of State thinks it funny that we shall have long waiting lists and shortages of nurses and operations, yet he received every penny that he wanted. Although there is £6,000 million, he settled for peanuts. Indeed, he went further. He threw some of our money into the kitty and said, "Give that in tax handouts, too. It will help the people in the south-east. They need it."
The Prime Minister and 68 per cent. of her Tory Members of Parliament want tax cuts. They want to pretend that the poor, the homeless and the cash-starved schools and hospitals do not exist. To them the dogma of a tax cut is more important than dealing with needs.
Mr. Peter Walker: Go back to the IMF.
Mr. Williams: Good Lord. Is that the level of contribution that we can expect from the Secretary of State? There is £6,000 million — every penny that the right hon. Gentleman could want. Everyone who is on a waiting list in Wales should receive a note saying, "You are waiting because the Secretary of State could have had every penny he wanted, but he did not choose to ask for money to help you."
As Welshmen, we want the resources to be used for our people. We want to return to a prosperous Wales, but we also want to retrain our values to be those of a caring society. Neither is possible under the policies of this Government.
6.30 pm
Sir Raymond Gower: The right hon. Member for Swansea, West (Mr. Williams) had a good deal of pleasure in making his speech. He seemed to enjoy himself hugely, but some of his comparisons were extremely far fetched. I cannot understand why he should have compared the standard of living in Wales with that of the south-east of England. [HON. MEMBERS: "Why not?"] The south-east contains a capital city, London, with about 6 million people whereas only 2·25 million people live in the whole of Wales. To compare the two is absurd and the right hon. Gentleman must realise that.
It cannot be gainsaid that for the past two years there has been a steady and sustained improvement in, and better news of, the Welsh economy. There is every reason to hope that that will continue for a good time to come. For 20 successive months unemployment has decreased. I do not know whether Labour Members when listening to the figures were reflecting shock or dismay — [HON. MEMBERS: "Dismay."] It was probably dismay. I do not think that they want good news about the Welsh economy. They seem to glory in any misfortune that afflicts it and anything that is an improvement seems to be a matter for regret. What is more, the improvements have been fairly well spread over the whole Principality. I know that some areas have not done as well as others, but the improvement in the unemployment figures has been spread over most of Wales and that is encouraging.
My right hon. Friend the Secretary of State mentioned the decline of our basic industries which is a most painful process. I tend to agree with him that the worst may now be behind us, but occasionally another coal mine is closed. Coal mining is labour-intensive. [Interruption.] Recently we had one— [HON. MEMBERS: "Two."] Two, then. One recent closure undoubtedly created more unemployed

1027
people than closures in smaller industries which we have as substitutes in an effort to replace basic industries. It is against that background that we must consider that we will probably still have troubles in these industries, but the worst is behind us.
There have been great improvements in our older industries and my right hon. Friend referred to some of them. There has been a good deal of investment. I have noted the £171 million invested in the strip mill in Port Talbot—that is not a negligible sum—the £30 million invested in the new project at Shotton in north Wales and the £50 million invested in the Trostre tin-plate works. Those are large sums and we now have a smaller, slimmer industry which is successful and highly competitive.
I wish that I could comment in the same way on the coal industry. It is sad that we still do not have the development at Margam which could be so advantageous to south Wales. British Coal cannot achieve an agreement for six-day working which is necessitated by the large investment involved. What a prize that would be for south Wales, if only the agreement could be reached. I hope that wiser counsels will prevail and that all those concerned will reach agreement and enable the project to be launched because the sooner the better. I understand that if it is deferred unduly some grants from Europe could be prejudiced. I may be wrong, but that is my information.
Mr. Nicholas Bennett: Does my hon. Friend agree that if we could get the enthusiasm and support of the Labour party and it had a word with its paymasters in the NUM to support the six-day working week, we could go ahead with this £90 million scheme which would provide 800 mining jobs?
Sir Raymond Gower: I was about to comment on the number of jobs. There will probably be 500 or 600 during construction, so the scheme would be beneficial to industry in south-west Wales.
The omens for the development of Welsh industry are decidedly good. Whatever the Labour party may feel, I am sustained by the views of the CBI. Its latest reports have in every case been optimistic. In Wales we command about 20 per cent. of all inward investment. That is a remarkable proportion, especially when one reflects that geographi-cally Wales is only a small portion of the United Kingdom and has only about 5 per cent. of the United Kingdom population. I am delighted that part of that is to come to my constituency at Dow Corning in Barry. Such investment does not usually create a lot of jobs, but it makes existing jobs far safer and shows that the American company has great confidence in the future of its industry in my constituency. We should all be pleased about that.
The extent of inward investment in Wales is reflected by the fact that more than 250 of our undertakings are in overseas ownership. That is a high number. I understand that more than 50,000 people are employed in those industries which are the result of inward investment. In other words, one in five of all employed people in Wales is now working for companies from abroad, so that shows the importance of this type of investment.
Despite many of the doubts expressed by some of the prophets of doom on the Labour Benches, Welsh industry will continue to expand. Support for industry increased by £54 million over the past year to £194 million in 1988. I imagine that the figures given by the right hon. Member
1028
for Swansea, West, which bore little resemblance to those quoted by my right hon. Friend the Secretary of State, will also have to be looked at carefully.
Although the right hon. Gentleman has doubted it on a number of occasions, it is advantageous that my right hon. Friend has arranged that the benefit of much of this money will be in the hands of the Welsh Development Agency. It is well equipped to help the Welsh Office in preparing packages that can be attractive to investors either from overseas or from other parts of the United Kingdom. Also impressive is the huge factory building programme, to which the right hon. Gentleman made little reference, which the WDA has promised for 1988–89. That will cost £130 million, and it is likely to create 1·5 million sq ft of factory space and provide employment for more than 4,000 people. This is a formidable factory building programme which must be of benefit for south Wales.
Mr. Win Griffiths: The hon. Gentleman has been telling us about the factory building programme, and foreign investment, both of which are good to see. However, does he not realise that there about are 140,000 fewer people in full-time employment in Wales today than there were in 1979? On the basis of the good news that he is bringing us, when will unemployment be less than it was when his Government came into office?
Sir Raymond Gower: Making statements of that kind is useless. Such forecasts are usually most inaccurate and liable to disappointments or to overstatement. One thing is certain. It is not easy to replace by these methods the large number of jobs lost from the old basic industries. It is a difficult task, but considerable progress has been achieved. We have reason to be optimistic about our chances of improving on what has already been achieved.
The right hon. Member for Swansea, West spoke as if one can diagnose the effect of moneys voted by Parliament for particular purposes without any reference to the interchange between those moneys, the activities of companies and the provision of private capital. It is a combined process. Economics and industrial science are not exact sciences and it is far too difficult to make prognostications in that way.
My right hon. Friend the Secretary of State should be impressed with the needs of the industrial valleys. He should not deprecate that. This is analogous to the position in other parts of the United Kingdom. We do not have the inner city problems but we have industrial valleys, which are similar. In due course, much will he done, but this is a continuous process.
Even with all the difficulties facing us, the progress of the Welsh economy is such that we can have optimism about the years ahead. We cannot forecast events overseas. We may have problems similar to that caused by the Arab increase in the price of oil in the 1970s, or difficulties with the American economy. Such factors will have an effect on us, but the Welsh economy is leaner, more efficient and more able to meet these unforeseen difficulties than it ever was before. It is more varied. It is not on a narrow base and it is not in the precarious position that it was in when we took office. We have a much stronger economy to face the challenges of a new world. In that spirit, I hope that we will wish Wales good luck.
6.45 pm
Mr. Brynmor John: Many people think that the greatest disadvantage of the Secretary of State is that he is not a Welshman. That is a convincing argument, but there is an equally convincing argument for another disadvantage. It is that he was the lead Minister in the local government reform of 1972, which split Glamorgan into three, and created Mid Glamorgan, an area in which I was born, in which I live and part of which I have the honour to represent. In doing so, he created, in material terms, a poor county with a disproportionate number of problems in health, employment, housing and poverty. It is so impoverished that it has never had enough central Government money to reverse the legacy that he bequeathed to it. I make no apology for reminding the Secretary of State that his parentage of this county imposes on him obligations to rectify the situation; I shall take the opportunity to remind him of this on every possible occasion.
I said that it is an impoverished county and the economic trends for January 1988 show that Mid Glamorgan is Britain's poorest county, with a gross domestic product per head of £3,248, which is less than half that of Greater London. I know that the hon. Member for Vale of Glamorgan (Sir R. Gower) thinks that we should not aspire to the standards of Greater London, which are far beyond us, but we cannot generate our own resources with such a low GDP.
Spelt out, as I spelt it out to the Welsh Grand Committee, in health terms, that means a lower standard mortality rate, longer stays in hospital, higher rates of permanent sickness, more visits to general practitioners and the highest number of prescriptions. We need more public money and we need it redistributed, as the Secretary of State half said that we should, to take account of those problems.
Health problems also have a local government dimension. Therefore, I shall remind the Secretary of State of those problems, because many of the permanently sick are in the community, where we want them to remain, if only because it is more expensive to have them in hospital. However, if they are to stay in the community, they need to be provided with invalid aids and adaptations. The provision of these facilities does not cost the same in every part of the country. Mid Glamorgan is probably the most expensive county in the whole of Britain for those requiring such aids and adaptations. The nature of the terrain, with steep hills, narrow valleys and steps to houses, is just one factor.
Mr. Win Griffiths: My hon. Friend referred to the need to keep our sick in the community wherever possible. Is he aware that in Mid Glamorgan, for example in the Ogwr district, we are about 31 per cent. short of community nursing, based on the Telford scale which itself is not over-generous?
Mr. John: I was going to refer to that. As I live in Mid Glamorgan, I am aware of what my hon. Friend has said. However, the cost is greater and the demand, for obvious reasons, is greater. Because we are such a poor country, the generation of self-help is less easy to achieve. Therefore, one places a greater reliance on statutory services.
Let me tell the Secretary of State about the situation in Mid Glamorgan. I believe that what hon. Members can
1030
bring to this debate is an extrapolation of local conditions, based on their knowledge of their own areas, to illustrate problems all over Wales. Demand is expanding very rapidly for telephones, under the Chronically Sick and Disabled Persons Act 1970, for invalid aids and for house adaptations. Next year, just to keep the present level of provision, Mid Glamorgan county council needs to spend £500,000 more than it is spending this year.
At the moment, it has had to suspend its issue of telephones under the Act, in order to review the number being issued and what is happening to the applications—because they are dealt with on fairly harsh criteria, so great is the demand. The demand for aids and adaptations has created such a backlog that our people wait many months for a visit from the technical officer. The position has now been reached where Mid Glamorgan has had to say that no new cases will be processed until it has cleared the backlog. No new chronically sick people will have any adaptations to their homes or any aids to mobility until the backlog is cleared.
Mid Glamorgan county council may not technically be fulfilling its statutory duty, but, even if it is barely doing so, it is as conscious as we are that it is not meeting the need, coping with the demand or alleviating the discomfort, pain and anxiety felt by these invalids who try to live in the community but who find it increasingly beyond them.
This is what the Secretary of State calls a rich, booming country. Can he and his Government tolerate this situation in Mid Glamorgan under the Chronically Sick and Disabled Persons Act? Are the Government concerned about invalids in the community in Mid Glamorgan? If so, what do they propose to do about them?
Turning to coal mine closures. I will ignore the rather bizarre contribution of the hon. Member for Vale of Glamorgan on that issue. We have had three colliery closures and one coke oven closure in my area in the past two years: Lady Windsor, technically in the constituency of my hon. Friend the Member for Cynon Valley (Mrs. Clywd) but on the borders, Cwm and Nantgarw collieries and Nantgarw coke oven—with the loss of 3,000 jobs.
It is characteristic of the extractive industries that they impose a tremendous amount of environmental damage on the localities in which they are situated. I have been upset by the uncaring attitude of British Coal towards its responsibilities when it closed these industries. It lacks a sense of obligation to put right past damage. Not merely does it spend no money — perhaps that would be too much to expect—but it does not care what industries take over the sites it leaves.
At Cwm colliery, for example, there is a proposal to set up, as part of a larger company, a zinc and copper smelting process. That is unacceptable to people who have put up with years of obtrusion by the coal mining industry. It is unacceptable that this should be the new standard. The local authority and the local inhabitants demand that henceforth industry should chime with residential needs and not the other way about—which is why in south Wales we got into our present environmental mess: residential development was supposed to chime with whatever industry saw fit to set itself up in a particular area.
When the Minister replies to the debate, he will tell us that there is a planning appeal on this matter. He must assure the House that this appeal will be held in public and

1031
not be done by an exchange of documents. Both he and his inspector must take into account the inherited disadvantage which people are simply not prepared to put up with for an industry which shows every sign of being the fly-by-night type.
I appeal to the Welsh Office to take the closest possible interest in the redevelopment of the Nantgarw colliery and coke oven site. Two main obligations must be met before we think about future use. The first is to provide play areas for the use of the children of the Rhydyrhelyg and Oxford street area, who have lived cheek by jowl with this most noxious coke oven industry for many years and who have inadequate facilities. That should be a charge on British Coal, but it is a charge on the Government rather than on the local authority.
Secondly, we have an obligation to open to the public the site of the old Nantgarw china works, one of the two most famous porcelain works in Wales, which I believe deserves a much wider exposure to the public gaze.
This is a prime site. It is within a quarter of a mile of the dual-carriageway A470 and less than three miles from the Coryton interchange. We must reserve this site for a major employer and not allow it to be dissipated in a number of small units. We need a major concern that will enhance the reputation and stature of south Wales. This is almost a test case on how we should be able to do it and, I hope, a model of how it will be done.
I hope that the Welsh Office will take that into account. It is as responsible as the Welsh Development Agency and local government for ensuring that this is done. We do not want this site frittered away; we want it used for a prestigious major development.
I want to make two other constituency points which highlight general points that could be made about Wales. I am glad that the Secretary of State flew with the German banker over the areas to which he referred, because if he came down on the ground he would see traffic congestion much at variance with the idyllic picture from 3,000 ft up. He would see the position on the A473 between Tonteg and Talbot Green, serving not only a number of industrial sites but the potential site of a new district hospital and many shopping facilities. He would see the utter congestion which has brought the traffic at the roundabout in Talbot Green to a complete standstill; it was caused by a particularly foolish planning decision of an inspector from his office, which sited a market there. It has reduced the whole area to chaos.
What we want there, and what I hope the Welsh Office will take an interest in, is not merely, before the end of the decade, a start on the Talbot Green end of the bypass but a complete bypass of Tonteg and Talbot Green, so that industrial sites can be properly serviced and our industrial future assured.
My last point is one that I am very diffident about making. I hope that the Secretary of State will recognise that I do not delight in rumour-mongering, but from several people whom I believe to be trustworthy and who are certainly not themselves rumour-mongers I have heard disturbing reports about the future of the Mint, that it is not to remain in south Wales and that the site is to be turned into an open prison. That may be a sick joke in the area, because the architect of the Royal Mint made it fit to be an open prison without any adaptation at all. The Secretary of State will readily accept that if this was true it would be a devastating blow to our whole region, and
1032
would do away with the very enlightened work of the Labour Government in bringing the Royal Mint to my constituency.
I do not believe the rumour myself, and I have said as much. I hope that it can be firmly and categorically denied when the Minister replies, thus putting an end to anxiety in the area.
The Secretary of State must face the fact that, while we are glad of every amelioration of the situation in south Wales, if we are faced, as we may be in the Budget, with a situation of public squalor versus private affluence, we in Mid Glamorgan will react very angrily. We are already a poor county, but in so far as we are rich it is in our people and in our public provision.
I expect the Secretary of State to fight with his customary vigour — perhaps with more than his customary vigour, in view of what my right hon. Friend the Member for Swansea, West (Mr. Williams) has said — to secure from the Chancellor a commitment to public investment in Mid Glamorgan, so that its people enjoy in the future the decent conditions which many private industrialists have denied them in the past.
6.59 pm
Sir Anthony Meyer: I do not propose to follow the hon. Member for Pontypridd (Mr. John) in what seemed to me a model constituency speech, although at times he sounded as if he were demanding from the Welsh Office 365 days of sunshine for his constituency.
It may be hard for hon Members who entered this House since 1979 to believe that, when the right hon. Member for Swansea, West (Mr. Williams), who is no longer in the Chamber, was in the Department of Trade and Industry, he was one of the most effective members of a Labour Government who were not notable for the effectiveness of their Ministers. It is sad for those of us who retain some affection for him to see how cheaply he has descended into vindictiveness and vituperation to make his points, thereby destroying his reputation and damaging the cause of Wales.
The right hon. Gentleman said that he had been in contact with Lord Cledwyn of Penrhos. He should find half an hour to pop along the corridor to another place and have a word with Lord Cledwyn to find out how one can be the Leader of an Opposition, make points effectively and validly and still retain the respect of the other side of the House and enhance the reputation of one's own party.
The debate must start from, and keep coming back to, the inescapable fact that Government policy has put Wales firmly back on the road to recovery after what inevitably has been a very painful transitional period when we have moved away from over-dependence on industries which were doomed to obsolescence. The evidence, from British and foreign experience, is that the policies which were pursued by the Labour party when it was in power, and which it still advocates in opposition, would have perpetuated and intensified the process of seemingly inexorable decline by steady loss of competitiveness. I set any criticisms of Government policies against that background.
My criticisms derive from analysis and deduction; the prosperity is there for all to see. Certainly, the Government are not to be faulted on the road programme. Work on the vital A55 expressway is proceeding at a fine pace. I want

1033
particularly to congratulate my hon. Friend the Minister of State on his wise second thoughts about the junction to be built at the bottom of the Rhuallt hill improvement scheme. Now the traffic really will be able to flow westward without interruption. And there's the rub. That will mean real trouble for Rhyl and Prestatyn, unless we get a proper link road very soon to bypass the notorious Rhuddlan bottleneck and connect with the coast road.
That is supposed to be a matter for Clwyd county council, which is showing no sense of urgency whatever in bringing forward the planning and construction of a link road which is vital to the very survival of Rhyl and Prestatyn as tourist destinations—as my hon. Friend the Member for Delyn (Mr. Raffan) pointed out in an intervention.
Can my hon. Friend impart some sense of urgency to Clwyd county council? Is there any chance that the Welsh Office might take over that road as a trunk road and get on with building it? Can the Minister get Clwyd county council to start acting in the spirit of the Government's directives on the proper signposting of tourist facilities? There is still no proper signposting of Rhyl, still less of its tourist attractions along the A55 expressway.
On the subject of roads, may I give a public airing to a minor but annoying matter on which I have already written to my hon. Friend the Minister of State. It seems absurd to build a spanking new dual carriageway and then, a few months after it is completed, to dig up one lane and cone it off to lay the approach roads to service stations which were planned when the expressway itself was planned. It is really not good enough to say that private contractors are responsible for building access roads to service stations: it is plain bad planning. It costs a lot of money and causes a great deal of annoyance to motorists. There must be a better way of doing those things.
I do not propose to come back to the subject of the poll tax, beyond saying that the more I listen to the arguments on both sides, the fewer advantages and the more defects I see in the whole measure. Nor do I want to go on about the Health Service, which we debated in the Welsh Grand Committee. The Government's record is good, but they will have to find some way in which to ensure that increases in the pay of Health Service workers are not paid for by cuts in Health Service facilities. I know that the Budget is not concerned with those matters, but if it introduces tax cuts without any clear sign that something will be done to fund NHS pay increases, the Government will face considerable difficulties with their own supporters in the House and outside.
I am a good deal more enthusiastic about the great Education Reform Bill. That seems to me to be about 85 per cent. good, which is as much as anyone could reasonably expect from a Government measure. The one aspect that seems to worry my constituents, or fill my mailbag—which is not quite the same—is the allegedly damaging effect on religious education of being excluded from the core curriculum. I believe those fears to be utterly groundless, but I hope that the Minister will be able to offer further reassurance.
The part of the Bill that worries me is the opt-out provision. I do not believe that that will do any serious damage to my part of Wales, or perhaps to anywhere in Wales, but we are putting just a little too much emphasis on the concept of parent power. Parents are concerned
1034
with schools only while their children are there. It cannot be right to give them a preponderant voice in the future of a school for many years after their children have left.
A particular problem arises for denominational schools. Catholic schools take in many non-Catholic children. Under the open enrolment system, they could be obliged by an unsympathetic local authority to take in very large numbers of non-Catholic children. As a result, under opt-out, the very character of a school could be brought into question. Once again, I welcome any reassurance from the Minister. In general, I welcome the Bill. I do not believe that it will ever acquire the magisterial status of the 1944 Act, but it is a useful step in the right direction for education.
The success of the Government's policies has been due to the stern, indeed harsh, stand which they took against inflation in the early years, and the new spirit of competition fuelled largely by the privatisation programme. The ultimate nonsense of nationalisation was Austin Rover, whose fruits are still sour.
The headlong retreat from nationalisation has brought some errors, but more benefits. It is generally admitted that the privatisation of gas and the telephones has been less than fully satisfactory, because in neither case did privatisation bring any real competition. That criticism is valid. There seems to be little advantage in replacing a public monopoly with a private monopoly. However, I am not sure that that it necessarily follows that it will always be right to break up major public utilities. In the case of British Steel, the Government seen to have chosen to keep the present structure largely intact, and to rely for the spur of competition on foreign imports. I am sure that they are right.
However, for electricity the Government have adopted a different and, I believe, a wrong approach. I do not propose to discuss the merits and demerits of the White Paper as they affect the electricity industry. The new structure might, at any rate in the short run, bring down electricity tariffs. I am concerned with the effect on the coal industry, in the context of Wales.
I can understand, and indeed I support, the Government's aim of reducing the nation's dependence for its power supplies on the coal industry, given the repeated attempts of Mr. Arthur Scargill to impose his will on the elected Government. However, it is one thing to reduce dependency on coal; it is another, dangerous, thing to unleash forces which could destroy the coal mining industry for ever and make us totally dependent on imported coal. The world market in coal is highly artificial. The total amount of coal traded in the world is only twice the annual consumption of the CEGB alone. If we close pits, we close them for ever. The pits flood, and new miners will not reopen them later on.
If, as proposed by the Secretary of State for Energy, we are to have two competing groups in energy generation, they will be under irresistible pressure to find the cheapest source of energy in the short term. That means a rush for the limited amounts of imported coal available. Had there been such a set-up from the start, would we ever have had the huge investment at Dinorwic, which plays so vital but so intermittent a role in keeping the lights burning and the wheels turning? Will we get from such an outfit the development of the Margam coalfield which is so essential to Wales?
Mr. Scargill will indeed have piled even heavier clods on the grave of his reputation if, by making difficulties for

1035
the profitable operation of Margam, he has tilted the balance of the argument in favour of a scheme of electricity privatisation which now gravely threatens the prospects of Margam. Opposition Members can do something really useful for Wales by throwing all their influence, publicly and privately, on the side of those elements in the National Union of Mineworkers who want to negotiate seriously with the coal board over working conditions there. Here at last is something which the right hon. Member for Swansea, West could do to help.
7.10 pm
Mr. Donald Coleman: I suppose that we would have needed cloth ears if we had not expected to hear in the debate the rendition of the Hallelujah Chorus from the hon. Member for Clwyd, North-West (Sir A. Meyer) and other Government Members. We have become accustomed to hearing that Wales is on the upturn. True, there have been occasions when we have seen advances, and these we welcome; but let me remind the hon. Gentleman that people are still becoming unemployed in Wales today and that all the jobs on Baglan moor will not be sufficient to make up for the shortfall.
The hon. Gentleman will know that recently I had an Adjournment debate in which I raised the closure of Abernant colliery, announced by British Coal. I am aware of the decision of the work force to accept the closure, but it would be wrong for any of us to believe that this will be the end of the matter. The pit will close after only about 30 years' life. It is not an ancient pit. When it closes, problems will arise and we shall see the effects of the blow on the community which surrounds the colliery. With the closure of Wernos washery, which was announced at the same time as the closure of Abernant, some 800 men will be out of work and 800 job opportunities will be lost to an area which already has one of the highest levels of unemployment in the United Kingdom.
The people who live in that part of Wales want to hear from the Secretary of State that he and his Department are actively and purposefully pursuing a solution to the unemployment problem which will have such a serious effect. The product of Abernant is the highest quality anthracite in the world. Abernant is running into geological difficulty, but that is the nature of mining. Once that difficult period was past, if the pit were persisted with, there would be extensive, rich reserves of the best anthracite. That is what the area offers. It has always been claimed that there is a shortage of anthracite and it comes rather strangely that Abernant is to be closed when such reserves could be won if only British Coal had the will to do so.
Of course, we know that it is hoped to make up the shortfall of anthracite by importing anthracite at dumped prices from China and from opencast sites. It should be made clear to Ministers that neither of these means is acceptable. The dumping of Chinese coal will only destroy the Welsh anthracite industry. Also, Ministers should remember that there is great and growing hostility towards the extension of opencast sites. It is no good Ministers thinking that the hostility can be contained. It is growing, especially in my area, since the announcement of the closure of Abernant.
We look to the Secretary of State to make it clear to British Coal that it has lost the right to deferential treatment over applications for the extension of opencast activities. We look to the right hon. Gentleman to protect
1036
the lives and the environment of people who have had to suffer from opencast mining for more than 40 years. They deserve as much consideration as others have received in other places.
Another matter which we should ventilate in the debate was dealt with in Monday's edition of the Western Mail under the headline:
"Shelter condemn Welsh bedsit 'scandal'".
The report said:
"Almost half the bedsit homes in Wales lack proper fire escapes … nearly 6,000 homes in Wales used for bedsits do not have the proper fire escape facilities … despite Welsh Office calls for registration schemes, there is growing evidence that most of the 37 councils in Wales"—
thankfully, this does not apply to the local authority in my constituency—
"have no idea how many bedsit homes they have in their areas."
According to the report, there is growing evidence that local authorities are ignoring fire precautions.
I urge the Welsh Office to take a stronger line. We have had evidence of late of a spate of fires. Before the debate started, a ten-minute Bill was introduced which drew attention to the danger from materials which are used in furniture. We are well aware that lives have been lost because of dangerous material. Much of that material can be found in bedsits and in flats. It is vital that a satisfactory means of escape should be available from flats. I ask the right hon. Gentleman to tell the House what he proposes to do about the introduction of effective registration of properties which are in multiple occupation, so that they may be identified and we may ensure that adequate fire precautions are installed. Those are the positive steps that the Welsh Office can take I urge it to take the initiative and ensure that those people's lives are protected.
No one can be unhappy to hear of improvements in the economy of Wales, but we are not satisfied with the pace at which those improvements are being made. We look to the Welsh Office to ensure that identifiable economic improvements are made to allow our people in Wales to live the kind of lives that we all believe they have a right to enjoy.
7.20 pm
Mr. Richard Livsey: It is 800 years since Geraldus Cambrensis — Gerald of Wales—commenced his tour of Wales in my constituency. It is 400 years since Bishop Morgan translated the Welsh Bible, which was a significant event. In two years, it will be 100 years since our great parliamentary predecessor, Lloyd George, entered the House. We should remember, too, that he disestablished the Church in Wales. We have wonderful traditions in Wales. We have a language that has survived against all the odds, although it has taken an almighty battering in the process. We are a nation of survivors.
It is a miracle that we have come thus far. Will we continue to survive? Without a shadow of a doubt, one of our greatest assets is our people. How will the Government treat our people in the future and how do we wish them to be treated? Wales can be said to be both a land of problems and a land of opportunities. There is truth in both statements.
At the heart of Wales lie its rural and industrial areas, and I want to address myself to both. We are beset by unemployment and low pay in some of those areas. For example, mid-Wales is the poorest region in Great Britain.

1037
The level 2 region containing mid-Wales is the poorest in Wales. Mid-Wales has a population density one sixth of the European Community average. In mid-Wales, one job in four depends on agriculture. Mid-Wales is the most remote rural area of England and Wales. Those of us who represent the area must constantly remind the Secretary of State and his Ministers of those facts.
Agriculture is our staple industry and family farms are very much part of the fabric of our countryside. However, on many of those farms the management and investment income is about £6,000 — according to the farm management survey—and that sum has to be lived on as well as showing a return on capital investment. The bedrock of many family farms is the sheepmeat regime, and we believe that the present regime should be kept intact. We realise that the Secretary of State was one of the architects of the sheepmeat regime. We ask him to go to Brussels with the Minister of Agriculture, Fisheries and Food to help sort out the mess created by the stabilisers that have been put on the sheepmeat regime.
There is a crisis in Welsh agriculture. In one west Wales estate agents' office, 576 farms are up for sale. Clearly, that signifies great problems in the rural communities. Their culture and language, which are very fragile, are affected. Transport and education cost more and housing often costs more. We have witnessed the creamery closures at Felinfach and Llangefni and much of the rural economy is fading.
Efforts are being made through Mid-Wales Development and the Welsh Development Agency to put things right. Undoubtedly, some good things have been done but more must be done to bolster our rural economy. We have hidden unemployment and youth depopulation, and our population is being replaced with older people who put a strain on social services, general practitioner services and so on. We need a vigorous rural economy, not one which is fading away.
I was brought up in a Welsh village, and I can remember my mother telling me when I was about 20, "There is nothing here for you, my boy. You will have to go away to earn your living." I am sad to say that in many places that is still the case. The picture is uneven. Some areas — mainly those in the east of Wales—are doing reasonably well, whereas areas in the north and west are down on their uppers. If we are to develop our rural economy, we must do so evenly throughout Wales and not in a patchy fashion. There are National Health Service ancillary workers in my constituency on £50 a week, yet the European poverty level is £135 a week. The other day, I heard that one worker in my constituency earns £1.66 an hour. That is not good enough.
We need development in rural areas, and housing problems must be tackled. Like many hon. Members, I condemn the arson attacks on housing in Wales but hon. Members should realise that they are symptomatic of the problems in rural Wales, where local youngsters cannot afford to buy houses and there is no housing to rent. People feel very bitter. The Government should be prepared to listen to those with whom they get on well, such as the Country Landowners Association, which proposes a scheme whereby farmers sell land for housing for local people and whereby local people have priority for
1038
housing to rent as well. We welcome the new Welsh Housing Corporation and ask it to address the problems of housing not only in industrial but also in rural areas.
This afternoon, Sir Geraint Evans visited the House as part of a campaign to save Craig y Nos castle in my constituency for use as a Welsh music school and a centre of cultural excellence to which the public have access, and where they can listen to good music. It would also be used to train those with musical talent. We had a very successful meeting attended by Members of this House and of another place. It was decided to ask the Secretary of State whether we could meet him in the next 24 hours to discuss urgently the future of Craig y Nos castle. I should be grateful if the Minister would pass the message on to his right hon. Friend.
The sparsity factor in rural areas must also be addressed. I ask Ministers to let us know when the results of the integrated operations initiative in Brussels between Dyfed, Gwynedd and Powys will be announced. We urgently need assistance with our infrastructure.
In industrial Wales, we have watched the decline of the coal industry. The hon. Member for Neath (Mr. Coleman) mentioned the closure of Abernant. Miners in my constituency work at Abernant. The pit has plenty of reserves of coal if only the necessary investment had been made in it. We fear that at some time in the future it may be used for opencast mining. We will have none of that blight in the south Wales coalfield. We have suffered enough already. Having been raped in the 19th century, we do not want to be raped again by opencast mining in the 20th century.
Electricity privatisation is a body blow for the south Wales coalfield. British Coal has been responsible for the butchery of jobs and electricity privatisation could be our death knell. It is an extremely unwise move, as the dependence on imported coal will undermine our industry.
There are not enough real jobs in Wales. There are 211,000 people in part-time jobs, 50,000 on part-time training schemes and 145,000 out of work. We need real jobs, especially for males, who have lost so many jobs in heavy industry. [Interruption.] I should make it clear to the hon. Member for Cynon Valley (Mrs. Clwyd) that I know that female employment is also extremely important, but we must provide balanced employment.
The valleys initiative is clearly to be welcomed. I ask the Secretary of State to extend it into the Swansea valley and especially to Ystradgynlais in my constituency which, although in Powys, is still an old mining community with miners living in it and opencast mining around it. It is very much part of the south Wales valleys, so I particularly request that that be done.
The future of Wales must lie with our young people, but do they have a future in Wales? Clearly, we welcome inward investment, but what is the Secretary of State doing to produce new Welsh entrepreneurs in Wales and employment in Wales for Welsh people? What is he doing about the teaching of management and the backing of indigenous business? It is often easier for people from outside Wales to obtain grants to come in than for those working there to obtain assistance to expand or set up businesses. We urge the provision of indigenous cash to provide jobs for Welsh people.
We must also produce more housing, which is a major problem, especially housing for rent, and we must bring back rural development grants, but enough has already been said about that.

1039
Finally, the basis for the future must be new industry, new jobs, education and research. We must give confidence to a new generation of Welsh people. Let them be employed, let them earn a decent income, let them be housed properly and let them reach their own potential in their own country. Let them all feel as I do and be proud to be Welsh men and women.
7.33 pm
Mr. Gwilym Jones: In the Western Mail yesterday, a report of Welsh Question Time by Mr. Jon Hibbs contained an allusion to St. Peter in Wales—perhaps a somewhat premature canonisation of my right hon. Friend the Secretary of State. I am sure that there will be plenty of religious foundation for tomorrow's report. The Opposition speeches have shown that the darkest forces of Welsh non-conformity are alive and well and living in the Labour party. The prophets of doom, continually peddling gloom and despondency, are happy only when preaching despair.
For a moment the speech of the right hon. Member for Swansea, West (Mr. Williams) was enlivened as he put on a little pantomime, playing to his own Benches—"Oh yes he did, children. And what did he do then, children? Oh, no, he didn't." It was wonderful stuff for the Opposition children. For Conservative Members it would have been funny if it had not been so sad.
This is our St. David's day debate. It began at 5.15 pm when it might reasonably have been expected to begin at 3.40 pm. As a result, we have a much shortened debate. The point of order raised by the hon. Member for Swansea, East (Mr. Anderson) plainly showed that Welsh Members on both sides were getting fed up with the points of order that were delaying the start of our debate. I, too, am sorry that the debate is not taking place on St. David's day itself. There are many good traditions in this place and I should like that one to be much more firmly maintained, although I disassociate myself from the spurious point of order raised by the hon. Member for Ogmore (Mr. Powell).
Yesterday, on St. David's day, the Post Office produced new stamps rightly commemorating the 400th anniversary of the translation of the Bible into Welsh, and Cardiff's official bid for the 1994 Commonwealth games was launched in London. Cardiff has made a magnificent stand and its bid was the first in the field. It is an immaculate application and deserves to be accepted throughout the Commonwealth. I am sick and tired of the stories dredged up by the British press to try to damn Cardiff's case, apparently fed by elements elsewhere in the Commonweath or its organisation. In this context, I applaud Mr. Hanif Bhamjee, secretary of the Welsh anti-apartheid movement, who came to London to take part in the launch of the official bid and to rubbish allegations that arguments about apartheid could be used in any way against the Cardiff bid. My neighbour the hon. Member for Cardiff, South and Penarth (Mr. Michael) nods. All those who have been involved in the bid and all who support it are united in going forward on that front. We hope that by the time the Seoul Olympics take place the Cardiff application will have succeeded.
Mr. Alun Michael: I welcome the hon. Gentleman's comments about the anti-apartheid movement in Wales. One of the greatest problems seems to be that journalists in London have not
1040
yet realised that Wales is completely separate from England in the context of the Commonwealth games. The great confusion in the press yesterday seems to have been generated by failure to appreciate that one little fact. Does the hon. Gentleman agree that it would be beneficial if there were greater knowledge about the aspects that he has mentioned and about the separate Welsh tradition in sport?
Mr. Jones: The hon. Gentleman has a point, although I believe that the matter goes deeper than that and is a more general issue. Welsh Members of Parliament often have to work hard to correct various erroneous perceptions that are peddled about Wales. I noticed that our national newspaper took the opportunity to send a copy of its St. David's day edition to every Member of Parliament. It should be read by all Members at least on St. David's day, if not more often. The only good thing about having our St. David's day debate on 2 March is that we have all had time to read the St. David's day edition of our national paper.
Reference has been made to employment and, inevitably, to unemployment in Wales. I join my right lion. Friend the Secretary of State and other hon. Friends in referring to the proposed new development at Margam. We should all wish to see that development come about, and it would be a tragedy if the enemies of the coal industry succeeded in thwarting that investment. That is not what south Wales and its miners want to see. There was no mention of that important proposal by the right hon. Member for Swansea, West or, so far as I recall, by any other Opposition Member. It is such an important project that I can find no explanation for that omission, unless it be the perpetual comparison which can so fairly be made between the positive Conservative approach and the continually negative Labour approach.
I know that we had a debate about health recently in the Welsh Grand Committee, but this is our only assured opportunity of a debate on Welsh affairs on the Floor of the House, so I want to emphasise the importance of health in the Principality. My constituency has a great interest in health as it has probably more health provision than any other constituency, with the University hospital of Wales, the dental school, the radiotherapy hospital, Whitchurch hospital, which is one of the largest mental hospitals in the country, and the new BUPA hospital. They provide services not only to my constituency but over a much wider area.
The presence of so much health provision in my constituency provokes a good natured rivalry over who is the biggest employer in Cardiff, North. I fancy that it is the Health Service, but civil servants, particularly those at the Inland Revenue office at Llanishen, will not agree. I have the privilege to represent the Inland Revenue department that deals with the tax affairs of every hon. Member.
Health is of great importance. We can all make comments about wanting more money spent on the Health Service. That is a simple prescription, but it is far from being a complete answer. The answer is not simply to throw more money at the Health Service, though I want more money to be spent on the Health Service and I am pleased to see that more money is being spent. There has been a more than worthwhile increase in real terms in spending on the Health Service—39 per cent. — under this Government.

1041
I hope that there will be appropriate references to the Health Service in the Budget on 15 March. I wonder whether this might not be the time to move to an innovation in funding for the Health Service by introducing a health stamp or health tax. It might be imagined that health and social security spending is derived from the national insurance stamp. However, spending on those matters is far greater than the revenue obtained from the national insurance stamp.
A health stamp or tax would achieve a better flow of funds as revenue from a percentage-based stamp or tax that increased over the years. There would be more certainty of cash flow for the Health Service. As tax raising proceeded, there would be an opportunity to decide by how much it should be raised by a health stamp or tax, allowing for expansion beyond natural growth. Further, it would be better appreciated how much is being spent on the Health Service. That would be no bad thing. The approach at present seems to be that the Government can spend more money on the Health Service and that they conjure money out of the air. There is no such thing as Government money; it comes from the pockets of taxpayers.
Mr. Raffan: My hon. Friend is putting forward some interesting ideas about possible ways of funding the Health Service. Did he notice that there was nothing in the speech of the right hon. Member for Swansea, West (Mr. Williams) about the Labour party's policy for the National Health Service? He did not say how much more it would spend or where it would get the money from. Does my hon. Friend recollect the Labour party's appalling record on the Health Service when it was last in power, when it made 30 per cent. capital cuts in Wales?
Mr. Jones: My hon. Friend is right to remind me of those matters and he makes his points very well. I recollect that he intervened in the speech of the right hon. Member for Swansea, West and asked what level of waiting lists would be acceptable to the Labour party. The right hon. Gentleman fobbed him off and said that answers would come later. As so often with the right hon. Gentleman, no answers were forthcoming.
My right hon. Friend the Secretary of State mentioned the review of the Health Service. In that regard, my right hon. Friend has opportunities that are particular to Wales. In Wales we have no regional health authorities but regional services. In some ways, the Welsh Office could best be regarded as the regional health authority.
My right hon. Friend has talked about the Welsh Office's relationship with the health authorities in Wales. He said that that relationship was close, and that the Welsh Office was aware of the best and the not so good, the efficient and the not so efficient in the Health Service in Wales. I know that my right hon. Friend intends to present the Welsh point of view during the Cabinet's debate on the Health Service so that the Cabinet is fully acquainted with what is happening in Wales. We in Wales will learn and benefit from what happens at that Cabinet review.
The review will present unique and particular opportunities for my right hon. Friend. What is happening in the Health Service in Wales should not mirror what is
1042
happening in the Health Service in England. There are opportunities for different applications, and I should like to offer some suggestions.
I am sure that my right hon. Friend has seen early-day motion 690 tabled by my hon. Friend the Member for Suffolk, Central (Mr. Lord), which has been signed by 88 hon. Members. It calls for the restoration of the post of matron. That is an eminently worthy suggestion. It is not nostalgic harking back to when the matron was the natural head of each hospital. The motion rightly refers to a person who could deal with consultants and who would understand the needs of nurses and patients. In the past, the matron was vital to the best running of the hospital.
It has been claimed many times that aspects of health funding are decided on the basis of who shouts loudest, without consideration being given to whether there is enough money to pay the maintenance contract on the latest and largest super-duper piece of equipment that has been purchased. In that regard, the role of matron could be significant.
General managers in hospitals should be promoted to the position of matron or, where appropriate, new appointments for matrons should be advertised. Despite what has been done to reinforce the management structure of the Health Service, it is not succeeding. I remember that about 18 months ago I had to make some urgent approaches on behalf of my constituents at the weekend. I tried to get in touch with the general manager of one of the largest hospitals in south Wales. The health authority did not answer its telephone because it was closed for the weekend. I rang the hospital and asked to speak to the general manager or whether there was any way that I could be put through to him. The response that I received was "None of the administrators work at the weekend." I said,"I want to speak to the general manager. He is supposed to be in charge of the hospital." The response was the same, "None of the administrators work at the weekend."
The membership of health authorities, general managers and the Welsh Office are involved in a three-way tug. The Welsh Office issues circulars laying down objectives to be achieved. General managers try to devise policies to achieve those objectives. In the middle there is a lay and part-professional health authority, which adjudicates and forms the third part of those pulls.
The reason for health authority memberships is that there should be democratic input into the Health Service. However, we already have the community health councils. What is their purpose if not to provide democratic input into the Health Service? I am coming to the conclusion that health authority memberships are superfluous to the achievement of the best priorities in the Health Service. They are frustrating the work of general managers. I shall give a recent example of that in Cardiff. I was horrified by the reactions that greeted the proposals from the health authority management for achieving more heart surgery in Cardiff. The Welsh Office has set South Glamorgan a target, in providing regional services of cardiac surgery, of doubling the number of operations. There is now an opportunity for BUPA and other similar hospitals to carry out those extra operations. I am horrified at the political opposition to that proposal. I cannot see a logical or soundly based reason for it.
I have heard health authority members utter such phrases as, "We are not recruiting sergeants for BUPA." To go to a BUPA or similar hospital is to achieve extra

1043
facilities for the benefit of patients on NHS waiting lists. Those facilities are surely not standing idle, and we need them for temporary periods if we are to achieve the necessary improvements. Those who oppose such moves are politically motivated. I cannot believe that they are speaking with any concern for the patients on waiting lists who would benefit from the extra operations. They are speaking for the most crude political reasons.
The same applies to the lack of progress in tendering in the Health Service in Wales. In England, £100 million has been saved in tendering—money that is then used to achieve extra patient care. The same motivation underlies the reasons why Wales is not achieving anything like the savings achieved in England.
Mr. Win Griffiths: The hon. Gentleman has made an interesting statement. He said that, through services being put out to tender in England, a great deal of money had been saved, and had then been spent on providing better services. Can he give us any specific examples of a better service being provided?
Mr. Jones: I do not have every fact at my fingertips, but I can tell the hon. Gentleman about the miserable progress that has been made in Welsh health authorities. So far, the West Glamorgan health authority leads the list, having achieved savings of £378,000. The Pembroke authority has saved £340,000, and the Powys authority £207,000. Considering their relative sizes, representing more sparse rural areas, Pembroke and Powys perhaps ought to be most congratulated on what they are doing to achieve further improvements.
South and south-east Wales, where the hon. Member for Bridgend (Mr. Griffiths) and I have our constituencies, are doing the worst. The nearest to an achievement is the Gwent health authority, which has managed the magnificent extra efficiency saving of £5,000. No such saving has been made in South Glamorgan, East Dyfed or Clwyd. The Gwent figure may, perhaps, fairly be compared with the English achievement of £100 million.
Let me make another suggestion to my right hon. Friend. Developers are interested in building new hospitals at their own expense, and leasing them to the health authorities. I suggest that the Welsh Office has the opportunity to take that a stage further: indeed, I tried to make the suggestion in Welsh questions on Monday. I was both heartened and disappointed by the reply that I received from my hon. Friend the Under-Secretary of State. He said that he would be very interested in such a proposal, but that he and his colleagues would need to consider it very carefully. I cannot quarrel with the words that he used, which were absolutely correct. That is the only way in which a Ministry could consider such a proposal. But, going beyond the words, I invite the Welsh Office to seize on the concept, and to promote it enthusiastically.
In south Glamorgan's draft proposals for a new health plan, there is the possibility of a new hospital on the waterfront in Cardiff. I should like that hospital to be called the Cardiff Free hospital, and for it to be provided in the same way as the new kidney dialysis units in Wales, which have been set up, equipped and run by specialist companies. By running them at cost to the Welsh service, those companies are providing a far better and more efficient service for kidney patients. That precedent has
1044
been achieved with the new units at Bangor and Carmarthen, and the same could be achieved at the new Cardiff Free hospital, or anywhere else in Wales.
So marked, indeed, has been the achievement of the new kidney dialysis units in Wales that in October 1986 my hon. Friend the Member for Stockport (Mr. Favell) moved a 10-minute Bill, which received an unopposed First Reading. He suggested that if the bold new initiatives taken by the Welsh Office to improve kidney dialysis treatment were followed throughout England and Wales, all the shortfall in kidney dialysis treatment could be eliminated without any more equipment, and probably without any more staffing.
I note that we now have the best record in the whole United Kingdom for kidney dialysis treatment. We needed to attain that record, because in 1979 we had the worst record. I know that the Welsh Office is considering proposals for new units at Cardiff and Merthyr. I urge that that consideration should be completed as quickly as possible, so that we can look forward to the establishment of the two new units.
In the Welsh Grand Committee, the right hon. Member for Swansea, West produced some form of scare about kidney dialysis treatment. He referred to an article by Mr. Roger Dobson in the Western Mail, warning that kidney dialysis treatment at the University hospital in Wales could be in danger of being rationed. I am also a student of what Mr. Dobson writes in the Western Mail, and I was pleased to see his article after the visit of my hon. Friend the Under-Secretary to Cardiff to see the dialysis facilities on 19 February. My hon. Friend sought to rule out any possibility of rationing of dialysis treatment. He said—and I am disturbed about this — that proposals are awaited regarding the demands for dialysis treatment in Cardiff. My hon. Friend stressed his sympathy, and said that he was concerned that the proposals had not been forthcoming before. It was not for the want of asking, he said.
I should also like to mention required request treatment in connection with transplants. My right hon. Friend and my hon. Friend will be involved in consultations with the Department of Health and Social Security on implementing recommendations of the Hoffenberg report. My hon. Friend the Under-Secretary of State for Health and Social Security was able to tell me on Friday that a draft circular was under consideration, and the Welsh Office will be involved in that consideration.
I urge the earliest possible action for Welsh hospitals on the recommendation that hospitals should be reimbursed for the cost of organ removal operations, and that an audit should be set up of brain stern deaths, transplants and the shortfall in transplants. Audits are already in place in some English hospitals. I suggest that the Welsh Office takes the opportunity to make early progress with the audit for Welsh hospitals.
Above all, I stress the need for training for doctors and nurses in that most difficult area of approaching relatives about their wishes regarding transplantation—
Mr. Ray Powell: On a point of order, Mr. Deputy Speaker. I know that the debate started late, and an appeal was made by the previous occupant of the Chair for hon. Members to cut their speeches down, so that all hon. Members would have the opportunity to speak. I know your views on debates of this character. Indeed, I know

1045
your view that speeches should on occasion be limited to 10 minutes. Would you do your best, Mr. Deputy Speaker, to ensure that hon. Members—
Mr. Deputy Speaker (Mr. Harold Walker): Order. I take the hon. Gentleman's point, and I was very much aware of what he wanted to say before he rose.
The Chair has no power to curb the length of hon. Members' speeches—regrettably, I must say—but I hope that hon. Members will have regard to the fact that a number of hon. Members still wish to take part in the debate. I am afraid that, unless the 'speeches are briefer, some of them will be disappointed.
Mr. Jones: I wish to be as brief as possible in moving to a conclusion. I regret the interruption, which served to waste time, as did the bogus point of order raised by the hon. Gentleman earlier.
The review of the Health Service has opportunities peculiar to my right hon. Friend — opportunities to bring back matrons in hospitals, to end health authority membership, to improve management and priorities within the Health Service, to build on the success of the kidney dialysis unit, and to move forward on the Hoffenberg report. We can take satisfaction from what has already been achieved in the Health Service in Wales, but that does not mean that we are entirely satisfied and do not want more progress. I should have thought that every hon. Member would join me in wanting even better health provision in Wales — in wanting a happier healthier Wales.
8 pm
Mr. Gareth Wardell: I shall abide by what you said, Mr. Deputy Speaker, and be as brief as I can. I am sorry that the Secretary of State is not in the Chamber now, but I am sure that the Under-Secretary will fully brief him on the subject to which I want to draw the House's attention.
I shall confine myself to one important topic —enterprise zones and the Government's view that they are an important part of their economic policy. I refer to a judgment in the House of Lords, and I want the Minister to decide what the Welsh Office will do about that judgment, because it affects people in my constituency and in the constituencies of hon. Members in whose areas enterprise zones are to be found, and because it has national implications for the United Kingdom.
I refer to the judgment of 11 February 1988 in the House of Lords by Lord Keith of Kinkel, in which a number of noble Lords concurred, in the case of Clement, who is the valuation officer and the respondent in the case —he is the district valuer in the Swansea area—versus Addis Ltd, the appellant. This is an important matter and urgency of response is crucial. Addis, which is in the constituency of my hon. Friend the Member for Swansea, East (Mr. Anderson), is just under a mile south of Swansea enterprise zone.
Both parties in the appeal agreed that the appropriate rateable value of the appellant ratepayer's factory is £36,500 if the consequences of the enterprise zone are taken into account, and £45,000 if they are not. The House of Lords held that the consequences of the enterprise zone should be taken into account. It also held that, although the Lower Swansea Valley Enterprise Zone Designation
1046
Order 1981 did not come into effect until 11 June 1981, Addis was entitled to a reduction in rateable value backdated to 18 March 1981 —before the enterprise zone even existed. It was only a dream in a planner's eye then, yet its rateable value has been reduced in such a way that it will have a saving of £9,000 of its rateable value, multiplied by the rate in the pound, multiplied by the number of years backdated—currently seven. Roughly speaking and taking the rate in the pound as an average of about £2, Addis will save about £126,000 as a consequence of the decision.
The case grew out of a local valuation court decision on 2 March 1982, held at Penllergaer in my constituency. Four occupiers of premises on the Garngoch industrial estate were involved. The case proceeded to the Lands Tribunal in 1984, and to the Court of Appeal on 18 December 1986. Addis was the only company to appeal to the House of Lords against the decision of the Court of Appeal.
I shall briefly examine some of the implications of the decision, which will be horrendous unless the Government respond quickly to allay the fears of people facing it. The Minister will have to respond to my points, so that people's fears will be allayed. First, the successful appeal by the company opens the door to any commercial occupier outside an enterprise zone applying to the district valuer for a reduction in its rateable value. The Garngoch industrial estate lies about seven miles from the enterprise zone. Is the whole of Wales and of the United Kingdom outside enterprise zones now eligible for a reduction in rateable value? In the area that I represent, companies are now approaching me asking me whether it is worth their while to apply. I am sure that hon. Members' postbags will fill up with such queries and district valuers' offices throughout the country will be inundated with work as a result.
Secondly, there is an immediate and traumatic effect on local authorities in West Glamorgan. In his letter of 19 February 1988 to the permanent secretary at the Welsh Office, the chief executive of Swansea city council estimated that the decision of the House of Lords is likely to mean that his council will have to find about £275,000, and the county council about £1·4 million, in respect of the previous years that will not be compensated for under the block grant arrangements. I hope the Minister will give some specific answers on the immediate problems facing local authorities in whose areas the Addis operation is sited, and on the obvious knock-on effects throughout a much wider geographical area.
The Secretary of State should give this matter priority; it is a potential cause of tremendous hardship for the ratepayers of West Glamorgan, and could be one to the ratepayers of many other areas. The Government have made great play of enterprise zones being an important part of their policy. I am sure that they have some advantages, but other important implications must be borne in mind.
Mr. Anderson: Does my hon. Friend agree that this is a matter not only of priority but of urgency? As the Minister will know, Swansea, in common with other authorities, is now setting its rate. That rate has already been increased, largely as a result of Government action on housing benefit and because of preparing for the poll tax. So here is another impost that was unforeseen and unforeseeable. Surely it is reasonable for the Welsh Office

1047
to respond immediately to ensure that the ratepayers of Swansea are not clobbered — as they will be unless something is done now as a matter of urgency.
Mr. Wardell: I welcome my hon. Friend's comments, and I am sure the Minister will take them on board.
The Lands Tribunal decision on this matter in 1984 clearly upheld the view of the four operators on the Garngoch industrial estate that their rates should be reduced because of the presence of the enterprise zone. That opinion was overturned only on appeal to the Court of Appeal, and thereafter only Addis pursued the case to the House of Lords.
The Lands Tribunal decision spelt out exactly what an enterprise zone is. I do not propose to read the entire summary—it was a good one—of that decision, but I shall read the opening sentence:
"The Government's purpose in setting up Enterprise Zones is to encourage industrial and commercial activity in run-down areas by the removal of certain tax burdens and by the relaxation or speeding up of the application of certain statutory and administrative controls."
As the implications of that for firms outside enterprise zones are now coming to fruition, I hope that the Government will not abandon such firms, saying that it is hard luck on the local authorities, which will be dramatically affected, because those firms can get their rateable value reductions. I hope that the Government will not duck that issue and simply say that it is a matter for the local authorities to sort out. As my hon. Friend the Member for Swansea, East (Mr. Anderson) has said, the judgment was unforeseen and unforeseeable. I hope that the Government will respond to the judgment, consider it and hopefully bring forward legislation in the near future to sort out the problem.
8.9 pm
Dr. Dafydd Elis Thomas: I shall not follow the detailed arguments of my hon. Friend the Member for Gower (Mr. Wardell). Traditionally, this debate moves between constituency concerns and more general discussion about the "future of Wales" — a phrase used by my right hon. Friend the Member for Swansea, West (Mr. Williams) when he spoke from the Opposition Front Bench. We inevitably consider these matters in what is always a broad-ranging annual event. We must consider the changing economic realities of life in Wales. We must also consider the way in which they are perceived, the way in which we perceive ourselves in Wales and the way in which we are perceived from the outside. I suppose one must add, these days, the perception from Clun and Worcester.
There are images of Wales that have often done us a disservice in the past. Of course, some current images do us a disservice, and hon. Members have referred to the appalling events in Chester at the weekend. The more I find out about the details of those events, the more appalled I am at the potential serious loss of life that may have occurred in the city which historically and traditionally has so much in common with the part of north Wales in which I live and work.
We must be concerned about our image in Wales. It is important for incoming investment. It is also important for the way in which we see ourselves and think of our future. Part of the disagreement and different emphasis in the debate stems from different images of Wales. Some of my colleagues hark back to a form of Welsh community
1048
life that no longer exists. Some people still believe that they live in a Nonconformist Wales. The Wales of today is very secular and very different from the Wales of St. David's time. If St. David were to come back and visit us he would probably recognise that his Celtic or Catholic church had reinvigorated itself and become rather more Welsh in many senses in recent years. However, he would recognise very little in the life of contemporary Wales. The St. David that we think of is really a 19th century creation. We have re-invented St. David, in the same way as we have reinvented Owain Glyndwr and other traditions. Such re-invention has happened in many nations and is not exclusive to the Welsh.
We are in the process of inventing a new Welsh tradition of a high-tech, booming Welsh society—or at least in parts of the Welsh society. I am not critical of that, as it is an attempt to modernise Wales. The reason why we have survived for so long is that we have modernised and adapted our traditions. We have changed our attitudes, but have maintained certain aspects of our identity, and, perhaps most important, a sense of community which has managed to survive the various changes of community life.
We can clearly see how important and crucial those issues are to an understanding of the social and economic life of Wales today from a publication that has appeared since we last debated these matters. I congratulate the board of Celtic studies of the University of Wales for at last joining the 20th century. I say that because my first real job was with the board as a researcher. I lasted only three weeks. I do not know whether it was me or the board, but we were incompatible.
The board has produced an excellent publication, called "Contemporary Wales." It is a well-designed and well set out document. In the editorial, which leads into the discussion, the joint editors—Graham Day and Gareth Rees — consider the whole issue of the changing and different images of Wales. They stress that there is a danger of stereotyping. We can stereotype in terms of our traditional mining industry, in terms of the new Japanese factory and in terms of the protests surrounding the restoration and maintenance of language and culture. There is also official stereotyping by the Welsh Office, the Welsh Development Agency, WINvest and others. There is another image of Wales produced by HTV, BBC Wales, Radio Wales and by Sianel Pedwar, the Welsh fourth channel. All those different images are in conflict with one another. Clearly, we need far more understanding, in cultural and economic terms, of the real changes that are taking place in Welsh life, and that is what "Contemporary Wales" offers us.
I shall pick one statistic to illustrate my point about the changes in Wales. I want to consider the broad occupational distribution of those employed in Wales in a 40-year span. In 1948 —two years after I was born, not that that has any significance, but it gives me a nice time span — the number of people employed in agriculture and foresty was a little more than 4 per cent. of the total. That figure is now down to just over 2 per cent. in 1948, 16 per cent. of those in work were employed in mining, and that figure has been reduced to less than 4 per cent. In 1948, 28 per cent. of people were involved in manufacturing. That figure grew to 35 per cent. in the 1971 census, but has flattened back to about 23 per cent. In 1948, 19 per cent. of people worked in transport and construction, and that figure had been reduced to just over 10 per cent. in 1986.

1049
The major growth has occurred in services. In 1948 only 32 per cent. were employed in services, yet that figure had risen to nearly 65 per cent. in 1986. That is the major change in the structure of the Welsh economy, and that is why we can say that tourism now accounts for four times the number of jobs in the traditional industries of coal, steel and agriculture. That is a very important change with which we have had to cope in cultural terms and in the way in which we think of and understand life in Wales.
Although services contribute 65 per cent. of total employment and 55 per cent. of GDP, there is still in Wales a low share of key professional, commercial, financial and entrepreneurial services, which are the leading edge of modern economies. I notice that my comrade from the Select Committee on Welsh Affairs, the hon. Member for Delyn (Mr. Raffan), is nodding in agreement with me. No doubt he will want to develop this analysis later. Of course, I was joking when I referred to the hon. Gentleman as a comrade.
Levels of research and development expenditure are extremely low in Wales in both the private and public sectors. There is a shortage of highly skilled technical employment. That is reflected in the fact that, although much reference has been made today to overseas investment, the result of that is not a high-tech Wales, but an intermediate-tech Wales. Production involves a predominantly low-paid female work force. There is clearly a gender division as well as a division of skill in technology.
This is not the brave new Wales that we heard about in the propaganda. Rather, capitalism has been restructured in the way in which it operates on Wales. The form of investment often involves the replacement of the heavy end of the old industry with the intermediate to low-tech end of the modernised industries. The full story must be told. That is why we need to emphasise the need for research and development as a key growth area in the Welsh economy. I notice that the Minister is agreeing with me.
Mr. Raffan: Before the hon. Gentleman moves away from research and development, I want to remind him of the importance of financial and professional services in the Principality. He has covered that point before, and I have intervened on it before. However, it is important to emphasise the great drawback to Wales in that it does not have a financial centre like the Scottish centre in Edinburgh. I hope that the hon. Gentleman will not simply pass over that point about research and development. I hope that he will make that point forcefully, because it needs to be made.
Dr. Thomas: I am grateful to the hon. Gentleman for that most helpful intervention. I agree entirely with him. I hope that there will be an initiative involving the Welsh Development Agency. I know that the WDA is giving priority to venture capital as a key area of improvement. It has produced a detailed report, which we have debated. I hope that the Welsh Office and the WDA will give that development a key role and that there will be an effective partnership between the capitalist sector and the public sector in Wales in this as in all areas.
Research and development are good examples of collaboration. I should like to draw the Secretary of State's attention to the science debate on Monday, obviously to
1050
my own intervention, at columns 722–23, and to the statement of the Secretary of State for Education and Science at columns 725–26. The right hon. Gentleman referred to the report of the Advisory Board for the Research Councils, in which university research centres are put forward as an example of inter-disciplinary work and as a way of forging links between higher education research and industry. As far as I am aware, four centres have been announced by the Science and Engineering Research Council, none of them in Wales. I believe that 18 centres are planned, none of them in Wales.
It is important that the University of Wales, the polytechnics, colleges of higher education, industry and the Welsh Office should get together to ensure that we have at least one of those university research centres. The Welsh Office should use its role in higher education in Wales to bring those elements together and to bring the University of Wales into the 21st century, where it should be.
I shall make one other point before sitting down and allowing my colleague the hon. Member for Delyn to make his speech.
Mr. Deputy Speaker: Order. That is a matter for the Chair, rather than for the hon. Gentleman.
Dr. Thomas: I apologise, Mr. Deputy Speaker. I would not wish to usurp the difficult job of the Chair in this debate. That is why I shall be brief, unlike some Conservative Members. I accept your strictures.
Wales is changing economically, culturally and politically. I hope that it is also changing its own image of itself. I find it most distressing that there are still defensive images. I can understand why people feel defensive about their Welsh culture, language and tradition, because they have felt for a long time that the traditions are under attack. I now find that the Conservative party has decided to take over, lock, stock and barrel the Welsh traditions. The right hon. Member for the City of London and Westminster, South (Mr. Brooke) made an important speech in his capacity as chairman of the Conservative party. I shall quote from an article in the Western Mail. It was written by Jon Hibbs, so it must be accurate. It said:
"The Tory party chairman … last night sought to portray the Government's achievements in the Principality as stemming from the roots of Welsh history, culture and tradition."
The article went on to say that the right hon. Gentleman
"told party workers they should draw strength from the Welsh political tradition that was now reflected in the Government's own radical reforms in education, housing and local government finance."
I have news for the Tory party. It may decide that it wants to relate itself to Welsh traditions, but I should tell Conservative Members that we have all sorts of Welsh traditions, which are always changing. I do not think that the notions of independence, self-respect and pride in the community, which are apparently the new qualities that the Government are advocating, have anything to do with Thatcherism. They are to do with the positive aspects of one of the Welsh traditions — the emphasis on the relationship between the community and the individual, not on the division between the two, which unfortunately seems to be the attitude of the Government.
The community in Wales has always changed and adapted. Old traditions have changed and we are now creating new traditions for ourselves. The most important tradition will be that in which Wales sees itself playing a

1051
much more active role in the international community. I agree with the views expressed about the Commonwealth games. In the Commonwealth games Wales is a separate nation.
As an autonomist, I would say that it is important to make the point that we have direct representation at international level. When we apply, as we are now doing, for the Commonwealth games to be held in Cardiff, we are doing that as the Welsh nation. It has nothing to do with the Government or the Prime Minister. It has nothing to do with the Foreign Secretary or Southern Africa. The Welsh nation, with its own Prime Minister in the role of the Secretary of State, is applying for the Commonwealth games to be held in Cardiff. It should be seen as that by people outside.
Increasingly Wales sees itself, not as part of a declining British state, but as part of a Western European integrated market. We look to 1992 and the growth of that integrated market. Our surrogate Prime Minister, the Secretary of State for Wales, said earlier that there was a great opportunity for Wales within the integrated market. We can take advantage of that only if we have effective representation within the Community in our own right. I look forward to the day when the Welsh nation, as a historic European nation, has its role as a member of the European Community.
Several Hon. Members rose—
Mr. Deputy Speaker: Order. I repeat the earlier appeal from the Chair for brief speeches.
8.25 pm
Mr. Keith Raffan: The first half of the speech made by the hon. Member for Meirionnydd Nant Conwy (Dr. Thomas) was remarkably redolent of the speech of my right hon. Friend Lord Crickhowell to the Cardiff chamber of commerce. I believe that the hon. Member for Meirionnydd Nant Conwy once described it as one of the noble Lord's better speeches.
I am a little shocked that the hon. Gentleman is surprised by the point made by my right hon. Friend the Paymaster General, who is chairman of the Conservative party. The party has made a distinctive contribution to Wales, of which I know the hon. Gentleman is aware. It was a Conservative Government in 1951 who set up a separate Ministry within the Home Office to deal with Welsh affairs. It was a Conservative Government in 1957 who created the position of Minister of State, Welsh Office. It was a Conservative Government in 1960 who set up the Welsh Grand Committee and it was a Conservative Government in 1979 who set up the Select Committee on Welsh Affairs.
Mr. Geraint Howells rose—
Mr. Raffan: I am anxious to get on, but I am glad to give the hon. Gentleman an opportunity to contribute, however briefly.
Mr. Howells: I am listening with interest to the hon. Gentleman telling us what the Conservative party has given to Wales. After saying all that, is he in favour of giving us our own Parliament?
Mr. Raffan: The sort of devolution we have given in an administrative governmental sense is quite sufficient. The Welsh people made clear their verdict on parliamentary
1052
devolution in 1979. I know that the memory of the hon. Member for Ceredigion and Pembroke, North (Mr. Howells) goes back that far, so I will not press that home too hard.
As the hon. Member for Meirionnyd Nant Conwy said, the Welsh debate is traditionally wide ranging. It is a mixture of what might be called "micro" and "macro" politics. Some hon. Members concentrate on constituency matters while others paint on a broader all-Wales canvas. I hope to do both.
Debates on Welsh affairs on the Floor of the House are rare. They are rarer than debates on Scotland or Northern Ireland because of Scotland's separate legal system and because of the tragic troubles that affect Northern Ireland. Therefore, it is all the more important that effective use be made of every opportunity—and any forum—to discuss and debate Government policy, administration and expenditure in relation to Wales.
In the Welsh Grand Committee there is a tendency to go round the same old tired circuit of subjects; variations on the same old themes. In fact, at times one might say that it is Enigma Variations in Welsh. I support the sensible suggestion made by the hon. Member for Neath (Mr. Coleman), the Chairman of the Welsh Grand Committee. I am sorry that he is not in his place as I would like him to hear this. I believe that he would nod vigorously in support, but he might be a little surprised. In a recent television interview he suggested that the Welsh Grand Committee should debate the reports of the Select Committee. That happened on only one occasion during the last Parliament when we debated the Select Committee report from the previous Parliament on "Water in Wales". Two Select Committee reports and Government responses from the last Parliament are, so to speak, in the queue and I believe that they are worthy of debate.
There is the major report on "Tourism in Wales" and the more recent report on "The Condition and Repair of Privately Owned Housing in Wales." I believe that the suggestion originally made by the hon. Member for Neath, which I support strongly, could bring about much improved co-ordination between, and greater integration of, the work of the Welsh Select and Welsh Grand Committees. I hope that it will have all-party support. It would be a way of making Welsh affairs more prominent in the House and, if I can be a little mischievous—I am sure that Opposition Members would agree—it would improve the Welsh Office's accountability.
I shall deal now with "micro" politics. A striking transformation is taking place within the Welsh economy and it is no more striking than in my constituency of Delyn. In the year to January the number of those out of work dropped by 25 per cent. In the two years to January the number dropped by one third and since the designation of the enterprise zone in 1983, unemployment has decreased by 42 per cent. In last year's debate on Welsh affairs my right hon. Friend Lord Crickhowell said:
"Delyn is a particularly good example of what can be achieved if Government, local authorities and the public sector co-operate effectively together." —[Official Report, 2 March 1987; Vo1. 111, c. 602.]
The Delyn enterprise zone, which the Government designated in the teeth of opposition from the Labour party, has played a significant part in bringing about that dramatic fall in unemployment. It has shown how effective an intensive, localised approach to unemployment can be.

1053
As "An Evaluation of the Enterprise Zone Experiment", a study commissioned by the Department of the Environment from PA Cambridge Economic Consultants, stated:
"The overall conclusion of the analysis is that real benefits are being provided to designated zones and their surrounding local economies."
Nowhere are those real benefits clearer than in Delyn: 1,267 new jobs in the zone, 91·4 per cent. of them full time and 86·4 per cent of them in manufacturing—which I know will be welcomed by the Labour party and which compares favourably with the average of 56 per cent. in all zones throughout the United Kingdom.
I have said before and I shall say again that more could have been achieved and more could still be achieved but for the tight physical constraints on the zone, its small size preventing it from realising its full contribution to the economic regeneration of north-east Wales.
I am aware that it is for my right hon. Friend the Secretary of State to consider proposals for new zones or extensions to existing ones in Wales. My right hon. Friend the Secretary of State for the Environment has decided not to extend the enterprise zone experiment in England, but he has recognised that there may be exceptional circumstances when the creation of a new zone or the extension of an existing one might still be the best way of tackling a particular and localised problem.
In a written answer recently my right hon. Friend the Secretary of State for the Environment revealed that this would depend on three factors. It would depend, first, on the nature and severity of the problem. In Delyn unemployment has been severe and highly localised. During the eight years from 1977 to 1985, a total of 6,700 jobs were lost in my constituency in the textile and steel industry, centring largely on the towns of Flint and Holywell.
The second factor is the likely cost-effectiveness of an enterprise zone in contributing to the solution of the unemployment problem. In Delyn, Government investment of £6·6 million has assisted in the creation of 1,267 jobs, which is a relatively good cost-per-job ratio.
The third criterion is the extent to which the authorities and agencies concerned can ensure that the zone is a success. Delyn borough council and the other agencies involved with it have already demonstrated that they can manage the zone successfully. Their achievement has been recognised in the accolade they received from the previous Secretary of State. I am sure that my right hon. Friend the present Secretary of State will also be much impressed when he visits Delyn later this month. I hope that we can count on his support for Delyn's forthcoming application for the extension of its enterprise zone. I know that he will do battle with the Treasury on Delyn's behalf as effectively as he has already on Wales' behalf.
I should now like to paint on a broader all-Wales canvas. As the liaison Member of Parliament between the Wales Craft Council and Conservative Members I take a great interest in the craft industry. I welcome the "Welsh Craft Industry Study" commissioned from Mr. Tony Ball by my right hon. Friend the Secretary of State, and mentioned by him in his opening speech. I accept and agree with its recommendations that the funding for the craft industry should be channelled through the Welsh
1054
Development Agency and Mid-Wales Development through a joint craft industry development service, while encouraging the WCC to operate as a trade association.
One section of the report particularly interested and excited me—"The Marketing Need for the Welsh Craft Industry—and for Wales". It made a powerful case for the co-ordination of the marketing approach of various agencies in Wales—the Welsh Development Agency, Mid-Wales Development, the Wales Craft Council and the Wales tourist board. I might also add the British Tourist Authority because of its role in promoting Wales abroad. At the moment all are involved separately and independently in marketing Wales and Welsh products within the United Kingdom and overseas.
There is no co-ordinated all-Wales marketing effort. What is the result? Across the whole spectrum, as the report demonstrated, there is inconsistency of approach, confusion of images and fragmentation of impact. In short, the total marketing potential of Wales and of the different agencies within it is undermined. Collectively, the agencies which I have mentioned in direct and indirect marketing have budgets of over £6 million. That money is currently spent individually and in a fragmented way on promoting Wales, its tourist attractions, business opportunities, culture, craft and other products.
There is an obvious and urgent need for a co-ordinated, integrated approach. Working together in promoting Wales and its tremendous potential in industry and in tourism could be to the great advantage of each agency without undermining the agencies' independence. The report puts forward imaginative proposals on how such a strong, integrated, corporate, national identity for marketing Wales could be created, at minimal cost but with enormous potential benefit.
Those recommendations make sound common sense. The members of the Select Committee involved in the inquiry into "Tourism in Wales" will recall one of the predominant themes — that Wales, unlike Scotland, lacked a clearly defined, "hard" image abroad. We recommended then that the Welsh Office should coordinate the relationships between, and the objectives of, the various bodies involved in tourism and issue policy guidelines on marketing.
We discovered, too, during that inquiry the consider-able amounts of unco-ordinated promotional literature at local level, with inevitable duplication, and recommended that the WTB develop further joint marketing schemes to co-ordinate those local marketing efforts.
What is sensible for Welsh tourism is surely sensible for Wales as a whole. The Western Mail—the newspaper beloved of the Labour party — made that point succinctly and with great effect in yesterday's editorial. I shall quote from it only briefly because I know how it tends to raise Labour Members' blood pressure. They are all nice and quiet at the moment and I do not want to disturb them. The Western Mail said:
"Where Wales has failed in the past—from the earliest centuries of its history right up to our own—it has usually been because the common need has been sacrificed to local sectional rivalry."
A co-ordinated marketing effort would allow each agency to be promoted "as strongly and as independently as at present" but each could derive immeasurable benefit from being part of a stronger, corporate, national identity. My right hon. Friend the Secretary of State and the Welsh Office would obviously have to be the catalyst in bringing

1055
that about, but I hope that the various agencies will also consider it seriously. If it is to be achieved, they need to give the necessary commitment and co-operation. I believe that promoting Wales in all its aspects in a co-ordinated way could result in "a powerful and sustained marketing initiative", as the report said, and help to accelerate our economic recovery.
Now surely is the time to carry out such an initiative, when a transformation is being wrought in the Principality. Like the right hon. Member for Swansea, West (Mr. Williams), I read The Observer a week ago on Sunday, although not perhaps the same article. The right hon. Gentleman was selective in his quotes. I shall be equally selective in mine. Under the heading "Brave New Wales" there is an article entitled, "Where there's a welcome for the World". It put Wales' dramatic economic success in a United Kingdom context. The article said:
"In 1987 Wales attracted more inward investment projects than any other region of Britain. Only 5 per cent. of the British populace lives in the Principality, yet it won 21 per cent. of overseas investment in Britain—3 per cent. more than the south of England's share and more than double the Scottish total."
If the Labour party does not want to take The Observer, although Labour Members have obviously been reading it quite a lot lately, let them take the Financial Times last Saturday which included a feature entitled "The Dragon Stirs". That highly objective article said:
"Wales is, in fact, undergoing enormous social and economic change … Unemployment has been falling faster than in the rest of Britain, investment rising faster, new work practices adopted … These developments and these changes have given Wales a vitality that it has not had for decades."
If Labour Members do not like the Financial Times, perhaps they could take The Independent, which they may think closer to them, and read yesterday's St. David's Day feature:
"After years of recession the Principality is taking off … the activity is welcomed by Mr. David Jenkins, General Secretary of the Wales TUC. Another union pragmatist, the controversial, yet respected Wyn Bevan of the electricians' union, says that a measure of the success of the Welsh economy"—
another trade unionist speaking about the success of the Welsh economy—
"is the increasing acute shortage of skilled labour".
If Labour Members do not like The Observer, the Financial Times or The Independent, they could have gone along, although it would have been an unusual environment for them, to the conference last week of the Institute of Directors and heard the Japanese ambassador speak glowingly about the economic success of Wales.
The article in The Independent I quoted went on to refer to my right hon. Friend the Secretary of State. It said:
"It is clearly to the Principality's advantage to have a cabinet Minister with clout … He has been so successful that a number of Welsh Labour Members—albeit privately —acknowledge that he is doing the best job of any Welsh Secretary, of any party, for many years."
It is not only Welsh Labour Members who acknowledge the excellent job that my right hon. Friend is doing. It is also Scottish Labour Members. The hon. Member for Glasgow, Garscadden (Mr. Dewar), the shadow Secretary of State for Scotland, with that perspicacity which is his trade mark, toddled along to the Library and asked for an independent analysis of public expenditure figures for Wales and Scotland. What did that analysis show? Up to the next general election, Wales will enjoy a 36·7 per cent. Increase, compared with a 23·3 per cent. increase in Scotland.
1056
We are reliably told that the hon. Member for Garscadden has been using that information as a stick with which to beat the Secretary of State for Scotland for failing to fight his corner in Cabinet as well as my right hon. Friend the Secretary of State for Wales. We are also told that that tactic is causing great embarrassment to Labour Members in Wales.
Mr. Alan Williams: Will the hon. Gentleman give way?
Mr. Raffan: I shall not give way in view of the right hon. Gentleman's "vindictive and vituperative speech," as my hon. Friend the Member for Clwyd, North-West (Sir A. Meyer) rightly described it.
We heard nothing from the right hon. Gentleman about what Labour would do for Wales. At least one member of the Labour party has made a realistic and revealing appraisal of the party's current position. The hon. Member for Great Grimsby (Mr. Mitchell), an amiable fellow who is always frank, recently wrote of the Labour party, saying:
"We are relegated to the peripheries of British life. We represent a world that is going. Our structure, attitudes and policies are products of the past. Today they fit uneasily into a new world in which we are half strangers."
They fit no more uneasily than into the new world which is Wales.
8.42 pm
Mr. Alan W. Williams: On this, my first contribution to an annual debate on Welsh affairs, I have chosen a semi-nationalist topic — the Welsh language and the effects of some Government policies in the past few years on the language, particularly in my constituency.
The Welsh language has been in decline throughout the century. Scarcely 20 per cent. of the people of Wales are Welsh-speaking, but in Carmarthen and in Dyfed and Gwynedd that proportion is about 60 per cent. Nevertheless, the language is in decline and facing a battle for survival.
I have in mind one of my predecessors who was the first Nationalist Member of Parliament, Mr. Gwynfor Evans, who, 20 years ago, won Carmarthen in that famous by-election. Although those were my formative years politically, I have never been attracted to the cause of nationalism, despite feeling very strongly for the language. By definition, nationalism is about eventual separation. It is divisive. [Interruption.] I am sorry that the president of Plaid Cymru finds that hard to stomach.
Dr. Thomas: The hon. Gentleman does not understand that the programme of national parties from Northern Ireland, Scotland and Wales is not separatist. It is a programme for recognition of our nations in the European Community.
Mr. Williams: There is a great deal of revisionism in the nationalist movement. The message from Nationalist parties is strong and clear. Their activities are divisive, poisonous and obnoxious and I want no part of them.
In Wales, there are forces of division within the Nationalist movement and in the Welsh Language Society, which carries out many illegal activities, which do no good for the language cause and alienate public sympathy. I am glad that the hon. Member for Meirionnydd Nant Conwy (Dr. Thomas) joined in the condemnation of last weekend's events, which have damaged the image of Wales in the rest of the country.

1057
The Welsh language is extremely important. Both sides of the House should address the cause seriously. I wish to address three aspects of the prejudicial influence of Government policies on the future of the Welsh language — education, agriculture and unemployment. The Education Reform Bill is before the House and we are not clear what place the Welsh language will have in the schools curriculum in Wales.
I am clear in my mind that the place for language should not be dictated from London or from the Welsh Office. It should be dictated by local education authorities. Every county in Wales is very different in terms of its linguistic mix. Indeed, every town, and even village, is different. The ultimate decision about the right balance and how Welsh should be taught should begin at that level. Those decisions will mean that there is maximum devolution right down to individual schools and head teachers. I abhor the idea of centralisation or trying to move decisions away from local schools.
My constituents and I are concerned about the pressures caused by the closure of small rural schools. I should like to quote one sentence from the Government's White Paper on public expenditure on education in Wales. According to that document:
"the plans assume that local authorities will accelerate the removal of surplus school stock over the period and make further improvement in efficiency, including those recommended by the Audit Commission."
That will mean the closure of dozens of rural primary schools throughout my constituency and in Dyfed and Gwynedd.
A few weeks ago, the Audit Commission brought out a report on education in Dyfed, particularly primary education. It stated that our authority was spending £5·8 million more than comparable local authorities. The report made no mention of the linguistic implications in my area. It suggested that if the authority abandoned the policy of allowing the under-fives to go to school, it would save £3 million — and another £2·8 million through a more stringent programme involving the closure of rural primary schools.
The demography of rural Wales is such that the smaller the primary school or village, the higher the proportion of Welsh speakers. So closing or amalgamating small schools puts pressure on the language. One recent example is Llanddeusant primary school which has 13 Welsh-speaking children and one teacher. A few months ago it was reprieved, but I do not know for how long. It is proposed that it should become part of Llangadog primary school which is five miles away. In other words, it will be amalgamated with a primary school where about one quarter of the children are not Welsh speaking, so the language of the school playground will be English. That is the insidious way in which the policy affects the Welsh language.
I am pleased that in 1979 the Government did their W-turn and eventually decided on a Welsh language television channel. It costs about £30 million a year. A further several million pounds is to be put into various projects, such as the Eisteddfod, literary periodicals and various projects to do with the language. They are all important and helpful to the language, but £2·8 million spent on rural primary schools is much better value for money than anything else that the Government can do to
1058
help the language survive. Children learn and will sustain their Welsh, and the ages of three, five, seven, nine and 11 are the make or break years for the Welsh language. Therefore, the policy on rural school closures carries with it all sorts of threats.
I grew up in rural Carmarthenshire and for 40 years I have lived with the pressures of the small farmer. They lead to rural depopulation. The main causes of the destruction of the language in my constituency since the war have been rural depopulation, and the amalgamation of small farms. When will that stop?
When we joined the Common Market one of the main features of the common agricultural policy was supposed to be the protection of small farms. Yet in the nine founding countries of the EC the number of people employed in agriculture has decreased from 17 million to 7 million since 1960. The loss of people from agriculture in Wales means the loss of Welsh speakers.
The pressures on small farmers despite the CAP are just as great as they have always been. In 1983 when milk quotas were introduced they were applied across the board. Large farms and rich farmers could diversify and take the blow, but small farmers with relatively much higher overheads are continually driven to the wall. We must remember small farmers in the reform of the CAP. It is vital that we defend them.
We have a problem in rural areas with creameries. In the past few months we have seen two further creamery closures in Llangefni and in Felinfach. Last year we lost 300 jobs in Carmarthen when the creamery closed and in 1983, when a creamery in Newcastle Emlyn closed, a further 250 jobs were lost. By definition, creameries are sited in rural areas and a large proportion of their work force is Welsh speaking. They live in areas where there is no alternative employment. Felinfach is in the constituency of the hon. Member for Ceredigion and Pembroke, North (Mr. Howells), but it also affects my constituency. The unemployment rate in the Lampeter travel-to-work area is 18·1 per cent. and in the Cardigan travel-to-work area it is 24·3 per cent. These closures are taking place when the unemployment rate is already 20 per cent.
There is no question in my mind but that the biggest threat to the Welsh language in 1988 is mass unemployment. The Teifi valley has 20 per cent. unemployment and the worse black spot in my constituency is the upper Amman valley—Brynamman, Glanamman and Garnant. A recent report gives the unemployment rate there as 30 per cent. and youth unemployment is 36 per cent. A month ago that area received a crunching blow with the announcement of the closure of Abernant colliery and the Wernos washery. Some 800 jobs were lost. The colliery is in the Neath constituency, but 300 of the job losses are in my constituency.
The Amman valley, the Gwendraeth valley and the Tawe valley are strong Welsh-speaking communities; more than half the people speak Welsh. Of all the colliery closures in south Wales—unfortunately we have had to learn to live with them in the past three years—this will have the most devastating effect on the language. Moreover, it is in an area where unemployment is already 30 per cent.
There is no economic justification for the closure of Abernant. It has massive anthracite reserves, it is a modern pit, being only 30 years old, its losses are marginal and it

1059
has been reaching about 90 per cent. of its targets. If that pit were in France, Germany or anywhere else in mainland Europe there would be no question of its closure. When one considers the devastating social consequences of closure in an area of high unmployment, it is appalling that the Government are sitting on their hands and allowing it to happen. That will severely affect the prospects of young people and the language. The average age of the work force in Abernant is 32 and the closure will affect those workers and their families.
I understand that the valleys initiative is being developed actively. Will the Secretary of State make sure that the Amman valley as well as the Tawe and Gwendraeth valleys are included in that initiative? With the knock that is coming their way, they badly need any extra help that is going.
I regret that the Secretary of State is not here, because he has been a member of a Government who have savaged the Welsh economy. We hear a lot now about the few jobs being created by inward investment. We welcome them, but they must be set against the 100,000 job losses that have occurred while the right hon. Gentleman has been a member of this Government. His debt to Wales is great, partly as a result of his record as Secretary of State for Energy. Since the end of the coal strike, 18 pits have closed, and 12,000 jobs have been destroyed. If we add the knock-on effect, we are talking about the loss of between 20,000 and 30,000 jobs. The Secretary of State has done an enormous amount of damage to Wales. It is his job to put some of that damage to rights.
8.59 pm
Mr. Nicholas Bennett: I hope that the hon. Member for Carmarthen (Mr. Williams), who is my next door neighbour, will forgive me if I do not follow him in what he said. As this is also my first opportunity to speak in a St. David's day debate, I shall concentrate on constituency issues. I am especially glad to speak in this debate because St. David was born in Pembrokeshire, and the smallest city in the United Kingdom, St. David's, is in my constituency.
Unemployment in Wales, as we heard from my right hon. Friend the Secretary of State for Wales, has fallen for 20 consecutive months, and that is good news for all of us. It has been falling in my constituency as well. In January 1987 there were 7,381 people out of work, and in January this year that had gone down to 6,232, a fall of 1,149. It is still a matter of grave concern to me that my constituency has the largest number of people out of work of any constituency in Wales and that the South Pembrokeshire travel-to-work area has the largest proportion of unemployed at 25.1 per cent. It is still obstinately high.
There are a number of reasons why that should be the case. In Pembrokeshire we have the oil industry, and in recent years a number of refineries have closed as the industry has contracted. Secondly, we have the problem of milk quotas in the dairy industry, which especially affects my constituency, which is the premier farming constituency in west Wales. Thirdly—and this is a problem shared with the hon. Member for Ceredigion and Pembroke, North (Mr. Howells) and constituencies in Powys and Gwynedd — we are geographically fairly remote from the major centres of population, and that
1060
creates problems. I hope that my right hon. Friend the Secretary of State and my hon. Friend the Minister will take account of the special problems faced by west Wales.
A number of things can be done to help my constituency. First, to deal with unemployment, I welcome the training programmes that the Government have brought forward and the schemes that have been advanced to help in particular the long-term unemployed. I would ask that there be a change in the rules to allow the unemployed who are not on supplementary benefit to take part in the community programme. Many of my constituents find it puzzling that they are excluded because they do not receive supplementary benefit.
Secondly, we should continue to provide more small business units. This is the sector in which new jobs will be created in my constituency, because we do not have the large manufacturing industry that other parts of Wales have.
Thirdly, we must continue with the improvement in the road programme. It is a tribute to my predecessor as Member of Parliament, my noble Friend Lord Crickhowell, that the A40 and the M4 are known as the Edwards motorway and main road, because the improvements in the road system in west Wales meant that he was able to get to his constituency considerably faster at the end of his term of office than he was when he was first elected. Until fairly recently it took seven hours to get from Pembrokeshire to London, and one can now do it in four hours. One can do it even quicker if one is prepared to go with Mark Phillips in the driving seat.
Fourthly, we need far more inward investment in this part of Wales. I told my right hon. Friend the Secretary of State in the Welsh Grand Committee last week that Gwynedd, Powys and Dyfed together had less inward investment in terms of money and jobs than any other Welsh county. Therefore, we must take special note of the problems in west Wales. We must follow up the initiative of Dyfed county council and local businesses, local newspapers and district councils, which visited Spain and Portugal some two years ago, because we see that as a growth area with which we can improve trade links. In the first instance it would be in the packaging, processing and distribution sectors, but there is a potential growth in trade between that part of the EC and west Wales.
It would be helpful if the Government could ensure that when they are considering the transfer of Government offices they do not leave out west Wales. One can see from the beneficial effects of the transfer of the Driver Vehicle Licensing Centre to Swansea some 20 years ago what having a large Government Ministry or office can do to help an area with high unemployment.
With new technology, there is no reason why we continue to have so many offices based in the London region. The transfer of the Patent Office to Newport is especially welcome as a sign that the Government listen to what is being said. We should continue to disperse the Civil Service and other Government agencies round the country. I only hope that public utilities and those that are about to be denationalised will listen too. There is a worrying concentration of the public utilities in Dyfed, in the town of Carmarthen, rather than in other parts of the county.
As one can see from the unemployment figures for Carmarthen, the hon. Member for Carmarthen is fortunate that unemployment in the Carmarthen travel-to-work area is the lowest, at 9.4 per cent., of any in Wales,

1061
yet in my own constituency just down the road we have 25.1 per cent. in south Pembrokeshire and 17 per cent. in Preseli. It is important for the public utilities to be aware of their social duty not to concentrate all their offices in one place. The same goes for the county council, which in recent years has tended to concentrate its offices in Carmarthen.
The point that perhaps most irks my constituents is that this concentration of public offices in Carmarthen has been at the expense of jobs in Pembrokeshire. It is especially irksome when one looks at the breakdown of rate income to the county council from the three former Welsh counties that make up Dyfed. Pembrokeshire contributes 45 per cent., Carmarthen 33 per cent. and the old Cardiganshire 22 per cent. There is concern that although we pay the most in rate income, the offices and jobs have been moved out of the county. That is one reason why the vast majority of people feel that the area was better off under the old Pembrokeshire county council and support the Pembrokeshire campaign to re-establish an authority with control over local government activities in Pembrokeshire. I believe that we can do that by uniting the two district councils into one unitary authority.
My constituency is also largely rural in nature. On Monday of this week, during Welsh questions, I put to my right hon. Friend the Secretary of State our concern about the present disparity in the green pound. I hope that the Government will take great care in the next price review to ensure that the present disparities in the different sectors, which run from 9 to 17 per cent., are, as far as possible, eliminated, so that farmers get a real return on the work that they do and are compensated for the bad fall in farm incomes in Wales in the past few years.
I am conscious that other hon. Members want to speak, so I have no time to mention every area of life in my constituency, but I would like to mention tourism and the town of Milford Haven as two special areas on which we need to concentrate.
In tourism, I am glad to see that there are new attitudes to the way in which we market Wales and its different areas. In my constituency there has been a welcome change of attitude in the past few years as we face the competition from countries such as Spain and Portugal for holidays. I was especially delighted when recently the Oakwood adventure park in Pembrokeshire was presented with the Red Dragon award for one of the most exciting tourism projects. That is the way that we must go if we are to ensure that tourism, which is now, I believe, the number one industry in Wales, attracts people to the Principality for their holidays, rather than their wanting always to go abroad.
The town of Milford Haven is a microcosm of some of the more intractable social and economic problems in my constituency and those of my colleagues who represent other parts of west Wales. I start by making the point that I made to the Chancellor of the Duchy of Lancaster in a recent question. It is important that we remember that the problems of inner-city areas are also to be found in rural towns throughout Wales. I have the same social and economic problems in parts of Milford Haven as are experienced in the inner-city areas of London, Manchester and Glasgow. I hope that the solutions found to inner-city problems there will be used in the other areas.
1062
In Milford Haven there is considerable concern that the royal naval armaments depot, which employs 300 people and is now being reviewed, will be closed, together with the Trecwn depot in the constituency of Ceredigion and Pembroke, North, many of whose 500 employees live in my constituency. There is grave concern about the future of both these depots.
I recognise that any decision must be made on defence grounds, but I hope that my right hon. Friend will ensure that the Ministry of Defence is made aware of the importance of the jobs and the income that they generate to the economy of Milford Haven and Pembrokeshire. Before any decision is taken, it is vital that the Welsh Office is involved in the review, and any action that needs to be taken in the light of the review should be taken on a co-ordinated basis.
Milford docks have been a great, under-used—some would say misused—asset in the last few years. I and the people of Pembrokeshire will be watching with close interest to ensure that the promises made by Seacon Ltd., which took over control of the docks last July, are carried out.
Finally, there are two other decisions that the Government could take that would benefit the town. The first is to end the tolls on the Cladeau bridge, as they are a barrier to trade between the two parts of Pembrokeshire. I know that I have support from the hon. Member for Newport, East (Mr. Hughes), who takes the same attitude towards the Severn bridge. Secondly, assisted area status should be given to Milford Haven. The enterprise zone in Pembroke docks has created 420 jobs, but it does not extend into Milford Haven. It is essential, given the high level of unemployment, that assisted area status for which the district council has asked should be granted.
I conclude by pointing out in the last minute of my speech the assets of Pembrokeshire, which I hope business men throughout the United Kingdom and abroad will look to when they wish to site new industries in our county. We are only 250 miles from London—the same distance as Blackpool or Teesside. We have a good labour force, low wage costs, low rentals and land costs, low house prices, a beautiful countryside and a deep water port at Milford Haven. There are good road connections and three railway lines, and I hope that we can develop the Withybush airfield to encourage far more business to come to my constituency.
9.11 pm
Mr. Paul Murphy: I should like briefly to draw the House's attention to the picture that the Secretary of State has drawn this evening, and in his interview in the Western Mail which has been much mentioned in the debate, about his proposals for the valleys of south Wales. I should like briefly to quote two points from his interview in the Western Mail. He said that the valleys are now facing a future of "a fabulous 12 years" and that the scene in Wales will be transformed. He went on to say that that transformation will be so great that newspaper readers throughout Wales will be asked for their views as to what should happen to the people in the valleys of south Wales and how their lives could be improved.
The right hon. Gentleman need not do that. He need only to listen to the hon. Members who represent the valleys of south Wales. Perhaps the Secretary of State should go there more often and talk to the local

1063
authorities. He would realise that of course we welcome the initiatives in the valleys, in Ebbw Vale and elsewhere. It is our duty, as we represent constituencies in those south Wales valleys, to expose the fraud that the Secretary of State is perpetrating in interviews and elsewhere, in daring to suggest that the future is bright and rosy, and telling us to rejoice when the Health Service in our valleys is such as we have never seen before, and giving us a litany of figures from the Welsh Office.
It is nonsense for the Secretary of State to employ a host of historians to tell us about the previous Labour Governments. He should come to the valleys of south Wales and listen to the people, see the waiting lists getting longer, the beds being closed down and expenditure being removed from the hospitals. He would then see the reality in the valleys of south Wales. He would also see that all the nonsense about improving housing in Wales is a complete fraud for those who have to live in publicly owned housing. In future, house building in Wales, which has come to a virtual standstill, will be cut, as will the capital repairs of all those older, badly repaired houses in the valleys of south Wales.
The Secretary of State did not tell the House and the people of Wales in the interview in the Western Mail about the impact of the poll tax in our valleys. By 1990, when people begin to realise the impact, they will see that the gearing effect of the revenue support grant and the unified business rate in Wales will mean that for every 1 per cent. increase in expenditure which Welsh councils will rightly have to levy there will be a 7 per cent. increase in the poll tax in the valleys of south Wales. In the Rhondda, in Merthyr, in Cynon valley and in my own valley, many households will find that their local taxation has doubled overnight because of this unfair and unequal tax.
That has to be set beside the changes in social security and income support which will be imposed on the people in only four weeks. With the revolutionary change to the poll tax and the cuts in health and housing services, who dare tell us in the valleys of south Wales that we have a future to rejoice in? It is nonsense and a fraud, and the people of Wales will recognise it as such.
9.15 pm
Mrs. Ann Clwyd: My hon. Friend the Member for Torfaen (Mr. Murphy), with his customary generosity, has been particularly brief, although I know that he had much more to say. In the same way, I shall be brief, although there is a great deal that I could say.
I represent an area with one of the greatest problems of deprivation not just in Wales but in the whole of Britain. We have the worst housing, the highest male unemployment in Wales and some of the worst health problems. The Secretary of State has not flown over my constituency, but he has been through it on foot. He has seen for himself the problems in some of the villages like Penrhiwceibr where the pit was shut while he was Secretary of State for Energy. He has seen people living in the basements of three-storey dwellings where the toilet is at the bottom of the garden. He has been down streets where people have no indoor toilets, no bathrooms and no running water. That was in 1987. The council has carried out a survey in my constituency and has discovered that almost half the private houses are unfit for human habitation and that, unless resources are increased, it will take 50 years to modernise those houses.
1064
It is an area of high unemployment, which has been exacerbated by the closure of two collieries in the Cynon valley, the Lady Windsor and Ynysybwl. That has pushed unemployment up to 34 per cent., with the spin-off effect of the loss of those jobs leading to the loss of an additional 1,000 jobs in the area.
It appears that there is no solution, because the resources and the attention of the Government have been focused on the inner cities. Of course, there are cynical reasons for the Government focusing attention on the inner cities. One is that they hope to change the political complexion of the inner cities by devoting resources to them. They have no such hopes in the valleys of south Wales. That is one reason why we have blueprint after blueprint, yet there is no cash to carry out the ideas which are always talked about in these master plans for the valleys of south Wales.
The gratuitous suggestion of the hon. Member for Cardiff, North (Mr. Jones) is that the answer to the problems of the NHS is not money but more hospital matrons. Perhaps the hon. Gentleman should look to his right hon. Friend the Prime Minister, because I believe that she shows some of the tendencies which were so prevalent in the older matrons in the hospital service.
I was a member of the Royal Commission on the National Health Service. We studied the service in depth for three years. We did not sit with our friends in the Carlton club and cobble up a blueprint for the National Health Service based on prejudice rather than fact. We called together a committee of experts and came up with proper recommendations on the Health Service.
If the Goverment had not been so partisan, they would have implemented our recommendations, because they made sense. Most important of all, our recommendations said that money for the Health Service should come from central taxation. We examined all the other silly ideas that the Government are considering at the moment and rejected every one of them. We reiterated—we shall do so again — that the only proper way to fund the National Health Service is from central taxation; no other source will do. Like my hon. Friends who represent other valley areas, I want the National Health Service to be properly funded because those in Cynon Valley depend heavily upon it. We need proper resources, and not just one more blueprint from the Government.
9.20 pm
Mr. Roy Hughes: We all realise that this debate should have been held yesterday— the day when we honour our patron saint Dewi Sant. As in so many other ways, the Government missed the bus,.
Mr. Peter Walker: As the hon. Gentleman has made that accusation—
Mr. Hughes: The Secretary of State is getting too excitable. I have not started. yet. I shall have a few more remarks to make and he will be able to make a comprehensive reply.
Many hon. Members have illustrated the fact that unemployment remains their biggest worry. We are experiencing the worst crisis for 50 years and the Secretary of State is posing as a latter-day Merlin who can wish it all away. I thought that his thin veneer was thoroughly demolished by my right hon. Friend the Member for Swansea, West (Mr. Williams).
Mr. Walker: The hon. Gentleman started his speech with an accusation about the date of this debate. As I obviously cannot divulge what happened through the usual channels, I hope that he will be willing to divulge the representations made by his usual channels about the date of the debate.
Mr. Hughes: I understand from my Welsh Whip that the strongest possible representations were made.
We want to be fair to the Secretary of State. There have been improvements recently and we say "Croeso" to that. But one or two swallows do not make a summer—even the TSB does not. To make major inroads into our unemployment problem in Wales, we could do with one TSB a week for the next 12 months.
As I have said many times before, we have watched the doctrine of statistics in action. I noted that in yesterday's edition of The Times, the columnist Craig Brown, reporting on Monday's Welsh questions, said that the word "statistics" sounded like the word "sadistics". The lad is on to something, because sadism is about cruelty, and unemployment is cruel. People are rotting their lives away instead of doing something in and for their community.
The Secretary of State seems to believe that, if he blows the trumpet loud enough, unemployment will simply go away, but that is not so. According to Department of Employment statistics, 148,477 people are now registered as unemployed in Wales. That figure includes 3,749 school leavers under the age of 18; what a start in life this enterprise Government are giving our youngsters.
Even if we accept that the jobless trend is downwards, when not seasonally adjusted, the unemployment rates are up. The number out of work has increased in every Welsh county. Gwynedd has the highest rate, and Mid Glamorgan the largest number. In Clwyd, unemployment rose by 237 to 19,354 or 14.1 per cent. In Dyfed, it rose by 235 to 17,813 or 16.3 per cent. In Gwynedd it rose by 114 to 13,647 or 17.7 per cent. And so it goes on. The number out of work in our capital city of Cardiff increased by 403 to 23,844 or 12.2 per cent. In Swansea, our second largest city, it rose by 241 to 14,388 or 15.1 per cent. In Newport, it rose by 232 to 10,435 or 13 per cent.
Are those the kind of unemployment statistics of which the Secretary of State and the Government can be proud? There are now six travel-to-work areas in which more than one in five people are out of work. In south Pembrokeshire, unemployment is 25.1 per cent.; in Cardigan, it is 24.3 per cent.; in Pwllheli 24.2 per cent.; in Holyhead 21.7 per cent.; in Aberdare 21.2 per cent.; and in Fishguard 20.7 per cent.
The Secretary of State boasted about vacancies, but in the past three months the number of vacancies, seasonally adjusted, has fallen by an average of 400 per month. Those are the real unemployment figures. That is the true situation that Wales faces. Those figures cannot be glossed over. What an indictment they are of the Government's nine years in office. It is not as though Welsh workers are overpaid — we are just about bottom of the earnings league.
We are told to concentrate on bringing in new enterprises, perhaps from overseas. There is nothing wrong with that, but at the same time the Government are dealing sledgehammer blows to traditional industries such as steel and coal. Last week we had the Second Reading of the British Steel Bill to prepare that vital, basic industry
1066
for privatisation. Public money brought about the rescue operation, but the City hopes to reap the profits. Prospective new managers are already showing their patriotism by saying that they intend to cut exports when they get that industry back into the private sector. The steel industry is being dragged back into the uncertainties and inefficiencies of the past and the steel communities will suffer again—mark my words.
Last week, too, there was the announcement about privatisation of the electricity supply industry, splitting Central Electricity Generating Board operations into three parts. Allied with this, there is to be certain preferential treatment for the nuclear industry. Those proposals will deal a devastating blow to the British coal industry and may well bring about the closure of the south Wales coalfield. Last Sunday, in the Sunday Telegraph, the Secretary of State was quoted as being opposed to the proposals. The headline read,
"Walker puts his job on the line."
He has been very coy about that ever since. There must now be a big question mark about the future of the mining industry in south Wales.
Another crisis sector is that of housing.
Mr. Nicholas Bennett rose—
Mr. Hughes: Wales has a higher proportion of older housing than any other part of the United Kingdom. The difficulty is that the Government are not building the houses that people need. Their record on the building of new houses is the worst for 40 years, and a massive housing crisis is developing in Wales.
In Newport, homelessness is rife. The South Wales Argus recently spotlighted the problems in Newport. There have been widespread reports of abuses in the so-called bedsitter land. Threats of violence and intimidation are commonplace. There have been rip-offs with rents, and death-trap accommodation is the norm. The Government's policies are bringing about the return of Rachmanism, with all its attendant evils [Interruption.] It is not amusing for the people who have to live in such accommodation.
It has been said that the future is with the young. We all have a vested interest in the education of our children. The Government's proposals in the Education Reform Bill are ridden with dogma and controversy. The teachers' unions are up in arms about their negotiating rights being taken away, and they lobbied us about that yesterday. Every day there are reports of neglect in our schools, of an inadequate supply of books and equipment and of neglected buildings with leaking roofs and peeling paint. The Government's proposals for schools to be able to opt out are causing concern. They could lead to central Government closing a school at the stroke of a pen, from which communities would suffer.
Church authorities are concerned about the future of their schools. They could lose control of the unique education that they provide. The strongest possible representations have been made to me in Newport about the matter, particularly by the Catholic authorities.
Perhaps the greatest scandal of all is the rundown of the National Health Service. I certainly go along with the contention that the health of the people is the highest law. Within the service, there have been protests all over the country about surgery waiting lists, ward closures, staff shortages and so on. Nurses, ancillary workers and the major trade unions, such as the National Union of Public

1067
Employees and the Confederation of Health Service Employees, are protesting. The three presidents of the royal medical colleges told us quite clearly that, despite the efforts of doctors, nurses and other hospital staff, patient care is deteriorating and acute hospital services have reached breakdown. What is the Government's answer to those three eminent gentlemen? As yet, we have not had a satisfactory answer.
It is the wearer who knows where the shoe pinches. The attitude of the general public is most significant. Every survey has shown the public to be fully in support of a properly funded National Health Service in preference to tax cuts. The public do not believe in cuts and charges for the National Health Service. For me, their attitude is typified by a letter that I have received in the last few days from a young girl in Gibbs road, Newport, who wrote:
"I ask that the Government think again about limiting the freely available eye examination, because of the health care dangers of deterring people from a regular eye check on cost grounds."
She has asked me, as her Member of Parliament, to make a representation to the Government on her behalf, and this I readily do.
I have also received a huge petition from Miss Sue Brookes, honorary secretary of the local branch of the Royal College of Midwives. The members of the college are calling for positive action to ensure safe standards of care for mothers and babies. They call on the Government to face the facts, and to provide increased public funding for their vital services.
I fully support early-day motion 762, headed by my hon. Friend the Member for Don Valley (Mr. Redmond), and I am glad to be one of its sponsors.
In recent weeks, we have heard harrowing tales of young children dying because of delays in hospital services that they needed urgently. On Monday of this week, the Government gave their answer to all those protests: they announced an increase in prescription and dental charges. It was as if they were holding up two fingers to the nation.
As late as this afternoon, the position was crystallised by none other than Lord Young, Secretary of State for Trade and Industry. Apparently, he clearly stated that the welfare state had made people soft. The noble Lord, I feel, should be sentenced to a five-year stint in one of our low faces in the south Wales mines. He might not last five years, of course, but I should like to see him sentenced nevertheless.
In line with Lord Young's thinking, there is to be a further erosion of the welfare state. The Social Services Act 1986 comes into force next month. Among other things, weekly additions for heating and special diets will be abolished. Single payments for clothing and cookers will be replaced by the social fund—a sort of modern-day workhouse system. Housing benefit has been cut yet again, and pensioners and others with savings of over £6,000 will no longer be eligible at all.
Wales has heavy unemployment, inadequate housing and a high incidence of ill health, partly owing to its historic industrial structure. It will certainly fare badly under the new social security regulations. Where was our Secretary of State, the knight in shining armour in the Cabinet, when the proposals were mooted? Did he go to sleep? He knows the position in Wales, or at least he should.
There have been persistent leaks from the Chancellor's Office that the Treasury is awash with money. It has had
1068
the benefit of North sea oil, large revenues from privatisation, and selling off the family silver, as the late Lord Stockton described it. But, in the process, Wales has been robbed of nearly £1,000 million in regional aid and £750 million in rate support grant.
Mr. Michael: And worse is to come.
Mr. Hughes: Indeed it is.
The Chancellor's surplus funds are a direct result of the neglect of our basic public services—health, education, housing and so on. The people of Wales are thoroughly dissatisfied with these policies. They said so clearly at the last general election, when we won four seats and the majority of almost every sitting hon. Member increased. I suggest that the same will be said again whenever the opportunity arises.
9.40 pm
The Minister of State, Welsh Office (Mr. Wyn Roberts): Right hon. and hon. Members on both sides have expressed a wide variety of concerns and reflected the great diversity of Wales. The hon. Member for Brecon and Radnor (Mr. Livsey) referred to Wales as a land of problems. I remember an old friend of mine countering that with the question, "Where would Wales be without its problems?" The hon. Member for Ogmore (Mr. Powell) added to our problems today by trying to distribute narcissi instead of daffodils among Opposition Members. I am glad to say that they had the wisdom to reject them.
In spite of everything and anything that the hon. Member for Newport, East (Mr. Hughes) may say, any fair and impartial survey of Wales today would show that we are making rapid progress and are on course to achieve greater and better things. Wales is in an upbeat mood, as my hon. Friend the Member for Delyn (Mr. Raffan) illustrated by reference to his constituency. The lamentations of the Jeremiahs on the Opposition Benches—hyping up poverty and deprivation—are out of tune with the feelings of most people in Wales. More than that, they do enormous harm to Wales.
Critical as the Opposition may be, no Opposition Member has claimed that they could have done better than the Government. Indeed, the hon. Member for Neath (Mr. Coleman) urged the Government to speed up progress. He should be grateful that the Opposition are not in office, because not a single positive or constructive suggestion has emerged from them today.
I thought that the right hon. Member for Swansea, West (Mr. Williams) was scraping the bottom of the barrel when he tried to belittle the reduction in unemployment. It is a fact that unemployment in Wales has fallen for 20 successive months — with the largest percentage fall of any region of the United Kingdom. We normally deal with seasonally adjusted figures and they show that for the past 20 months Wales has been top of the league, with the west midlands, with a reduction of 2.9 percentage points—
Mr. Morgan rose—
Mr. Roberts: There is no quibbling about these figures. There is occasional quibbling when Opposition Members do not want to deal with seasonally adjusted figures and prefer to deal with unadjusted figures. Very well. On the unadjusted figures for the past 12 months, Wales again comes out on top with a reduction of 2.8 percentage points. Over a period of 20 months, Wales comes second on the unadjusted figures—
Mr. Morgan rose—
Mr. Roberts: In the House and in Committee we do not deal with figures that are neither seasonally adjusted nor unadjusted.
It is a fact that the WDA has let a record 2.5 million sq ft of factory space in 1987–88. It is a fact that Wales continues to attract inward investment and there are 250 foreign firms—
Mr. Morgan: Will the Minister give way?
Mr. Speaker: Order. It is unseemly to gesticulate.
Mr. Roberts: Wales continues to attract inward investment and 250 foreign firms now provide more than 46,000 jobs in Wales. I am delighted to say that the Dow Corning and ECCO developments announced by my right hon. Friend the Secretary of State were welcomed by hon. Members on both sides of the House.
Mr. Ray Powell: On a point of order, Mr. Speaker. You were not in the Chair at the start of the debate when my right hon. Friend the Member for Swansea, West (Mr. Williams) illustrated graphically and conclusively to the House certain facts about the figures to which the Minister has just referred. My point of order is a matter for the Chair. It is a fact that some of the figures that have been mentioned from the Government Benches have been opposed by the Opposition.
Mr. Speaker: Order. I do not see how I can possibly adjudicate on figures.
Mr. Roberts: The Welsh economy is more diversified than it was 10 years ago and better placed to compete in world markets. With the Government's firm commitment to an effective and vigorous regional policy and the additional resources that my right hon. Friend the Secretary of State has secured to pursue such a policy, we can justify our confidence and be optimistic about our prospects.
The remedy prescribed by the Opposition for all our problems is more public expenditure. They do not seem to realise that we are increasing public expenditure every year. If the White Paper shows anything, it shows that. I recommend that right hon. and hon. Members look at page 17 of the White Paper. We can increase expenditure because of our prudent management of the economy. I do not propose to itemise our spending by comparison with that of the previous Labour Government, but it is worth noting that our actual spend on housing renovation has been three times as high as it was under the previous Labour Government and that spending on the NHS in Wales has risen by only 0.5 per cent. short of twice as much a year, on average, under this Government as it did under our Labour predecessors.
Mr. Rogers: Will the Minister give way?
Mr. Speaker: Order. The Minister is not giving way.
Mr. Rogers: On a point of order, Mr. Speaker.
Mr. Speaker: It is not a point of order for me, if the Minister will not give way. There must be something for me to answer.
Mr. Rogers: This is a point of order addressed to you, Mr. Speaker. As long as I have been a Member of the House, the convention has been that an hon. Member can rise and ask another hon. Member to give way. I am quite
1070
prepared to accept the Minister saying that he will not give way. However, I do not believe that it is your function as Speaker to prevent me from rising to ask the Minister to give way.
Mr. Speaker: The hon. Gentleman knows very well that we cannot have two hon. Members on their feet at the same time. If the Minister will not give way, the hon. Gentleman must resume his seat.
Mr. Rogers: Further to that point of order, Mr. Speaker. My hon. Friend the Member for Cardiff, West (Mr. Morgan) slightly barracked the Minister a few moments ago. The Secretary of State for Wales has been sitting on the Government Front Bench barracking continually from a sedentary position. You did not admonish the Secretary of State. As soon as my hon. Friend barracked, he was admonished. As soon as I stood up, you told me to sit down. I honestly do not believe that you are being fair in this debate.
Mr. Speaker: The hon. Gentleman must abide by the rules of the House. He is a Front-Bench spokesman. He must be aware that he would be in the same position if he was speaking from the Front Bench. If an hon. Member does not give way, the hon. Member seeking to interrupt him must resume his seat.
Mr. Morgan: Further to that point of order, Mr. Speaker. As a new Member, am I right in thinking that it is the convention of the House that hon. Members are allowed to intervene to ask Ministers questions? Surely it is the convention of the House that Ministers from time to time, at least once during a speech, consent to an intervention.
Mr. Speaker: There is no convention that Ministers must give way at least once. A Minister gives way if he so wishes. Many Ministers do; some Ministers do not.
Mr. Roberts: Many hon. Members have referred to the National Health Service.
Mr. Rogers rose—
Mr. Roberts: I am trying to answer the many hon. Members who referred to the Health Service. They included the hon. Member for Pontypridd (Mr. John) and my hon. Friend the Member for Cardiff, North (Mr. Jones). This year's spending on the NHS in Wales will be £1,103 million, compared with £398 million in 1978–79. That was the winter of discontent when waiting lists were driven up higher than they have ever been. Our recently announced plans—
Mr. Alan Williams rose—
Mr. Roberts: I do not have the time to answer more than a handful of the points that have been raised during the debate.
Our recently announced plans for further increases in expenditure next year will take NHS spending in Wales to £1,173 million. That represents an increase of nearly 39 per cent. since 1978–79, after allowing for general inflation.
The cash increases that my right hon. Friend the Secretary of State has announced for health authority spending next year, together with the resources available to authorities from cost improvements and income generation, should be sufficient to meet the current forecast of pay and price inflation next year and provide

1071
for further service development. There have been substantial improvements in services during our time in office.
Mr. Rowlands: The Minister is saying that all the money is available. Is he able to tell me that we will be able to reopen St. Tydfil's dependency unit, which was closed only a few weeks ago? It was opened only six months previously by the Queen Mother. Can the Minister give me that assurance?
Mr. Roberts: I can tell the hon. Gentleman only what he knows already. All authorities have considerable scope for generating cost improvements and additional income. The matter that the hon. Gentleman raised is for the health authority to decide.
Hon. Members on both sides of the House have referred to recent pit closures. We all know from experience that maintaining uneconomic operations is no answer to the long-term future of the south Wales coalfield. British Coal has acknowledged its responsibility towards mining communities by the setting up of British Coal Enterprise, which to date has offered assistance totalling almost £10 million to small business projects in Wales. Those projects are expected to result in the creation or safeguarding of almost 6,500 jobs.
I should tell the hon. Member for Neath that the future of the coalfield as a whole continues to depend on its commercial viability. That is the end which must be pursued. Coal will continue to be a source of fuel for electricity generation for many years to come. After the privatisation of electricity, contractual arrangements will continue to be a matter for the two industries.
British Coal made it clear from the start that the Margam project would not proceed without flexible six-day production, and that remains the case. What we should like to know from Opposition Members is whether they would support flexible working to allow the Margam project to go ahead. I shall give way to any Opposition Front Bench spokesman who is prepared to answer that question. It appears that no one is prepared to give an answer, and we note that fact.
The hon. Member for Pontypridd raised the spectre of the move of the Royal Mint. I can tell the hon. Gentleman that there is no truth in that rumour.
Mr. Rogers: Will the Minister give way on that point?
Mr. Roberts: The hon. Gentleman has not been here throughout the debate. I am trying to answer hon. Members who have been here and have spoken.
The valleys initiative has intrigued many Opposition Members. Indeed, they have been sniffing at it rather like mice sniffing at cheese in a trap. The programme will involve new and expanded initiatives specifically directed at the valleys, but, as my right hon. Friend the Secretary of State said, all this is for later. It is not a matter for today, but I have noted the many appeals from Opposition Members for the inclusion of their particular areas in the valleys initiative. We are aware of the difficulties in other parts of Wales. The Welsh Office and the various agencies will continue to give the needs of those areas full consideration in the allocation of resources.
1072
My hon. Friend the Member for Clwyd, North-West (Sir A. Meyer) referred to education. I can reassure him that the place of religious education in schools is not changed under the Education Reform Bill. It is, of course, provided for in the Education Act 1944. The only change that the Bill makes is to give schools more flexibility in the timing of the act of worship. I can assure my hon. Friend that a school that opts out and becomes grant maintained cannot change its character without reference to my right hon. Friend, and that point is amply covered by the Bill.
I assure the hon. Member for Carmarthen (Mr. Williams) that the Welsh language has a secure place in the curriculum in Wales under the Education Reform Bill and that the views of local authorities, school governors and teaching staff will be as important as ever. Since 1979 the Government have supported the Welsh language to the tune of almost £20 million. In addition, we have supported Welsh language broadcasting, in particular, the Welsh fourth channel.
The people of Wales are enjoying a new-found confidence, which the Government share. We base it on what we have achieved in the past and on our plans and prospects for the future. We have successfully tackled the massive hidden unemployment that we inherited from the Labour party in 1979. The memory of it still haunts me — all that massive unemployment in the steel and coal industries. Yes, we remember the loss-making pits and the heavily subsidised overmanned steel industry in those days. What a betrayal they represented of the trust that the people had placed in that Labour Government to safeguard their best interests. I do not think that the people of Wales have ever understood the enormity of that betrayal and I doubt whether they ever will, especially now that Labour Members are busy rewriting the history of that period.
We had to reduce the work forces in the coal and steel industries to secure their viability and to safeguard the jobs that remained. It had to be done against short-sighted trade union and Labour party opposition, but it was the right thing to do by the people of south Wales.
We have achieved a great deal more than that. We have provided thousands of new jobs, and there are more in the pipeline, by reaching out for inward investment on a scale never previously seen in Wales and by pushing ahead with the development of existing industries, large and small. The political philosophy in Wales is changing fast, too, and that is why the Opposition are worried. That is why their faces fall every time a new fall in unemployment is announced.
We know that very shortly we shall be facing the problems of success—skill shortages and so on. That is why there is a new emphasis on education and training at all levels. We must have the adaptable skilled work force that we need to meet future demands.
I agree with the hon. Member for Meirionnydd Nant Conwy (Dr. Thomas) that to secure the future of our highly diversified economy in Wales we must have more research and development taking place locally. I agree with the hon. Member for Brecon and Radnor that we are working hard in this area, too.
It being Ten o'clock, the motion for the Adjournment of the House lapsed, without Question put.

Coal Industry (Restructuring Grants)
10 pm
The Parliamentary Under-Secretary of State for Energy (Mr. Michael Spicer): I beg to move,
That the draft Coal Industry (Restructuring Grants) Order 1988, which was laid before this House on 8th February, be. approved.
I understand that the Opposition wish to take this order and the draft Coal Industry (Limit on Deficit Grants) Order 1988 separately.
This is the second annual order under section 3 of the Coal Industry Act 1987. It has three purposes. First, it specifies those kinds of restructuring expenditure for which grant may be paid in respect of costs incurred in 1988–89. The types of expenditure are set out in the schedule; they are identical to those specified in last year's order.
Secondly, it establishes the proportion of next year's restructuring costs which will be met by grant. With the exception of grant under head 4, which is subject to a separate cash limit, the proposed rate of grant for 1988–89 is 72.5 per cent. This reduction on 1987–88 continues the process of transferring new restructuring costs to British Coal at a rate consistent with the corporation's efforts to move towards commercial viability. The Government will continue to meet costs arising from past restructuring. In particular, weekly payments to beneficiaries under the redundant mineworkers payments scheme, which closed to new applicants in March 1987, are not affected by the draft order.
The third purpose of the order is to raise the statutory limit on restructuring grant from its present level of £300 million to a higher level of £500 million in order to provide adequate headroom for the payment of restructuring grant up to March 1989.
The restructuring grants order has to be seen in the context of the deficit grant order which I shall be moving later tonight.
When I spoke in the debate on the coalfield communities last November, I said that the immediate future for British Coal was likely to be difficult. I mentioned that a revised external financing limit would be necessary and that an order increasing the level of deficit grant payable might be needed.
World markets for coal have indeed continued to be highly competitive. British Coal cannot be insulated from the influence of the international market or the competition from other fuels—
Mr. Rhodri Morgan: What about nuclear?
Mr. Spicer: I shall deal with the difference between nuclear and coal in a moment, if the hon. Gentleman will bear with me.
It is true, of course, that the taxpayer continues to contribute massively towards the coal industry, as he has done for the last nine years, at an average rate of £1 billion every year. The total commitment of £9.2 billion over the past nine years can be compared with a figure of £1.7 billion of public funding for the nuclear industry.
Mr. Morgan: The proposed structure for the privatisation of the electricity industry means that the British coal industry will have to compete with the world coal industry. The British nuclear industry will not have
1074
to compete with either the world or the British coal industry, and the British coal industry will not be allowed to compete with the British nuclear industry for fuel supplies. Is that fair or competitive?
Mr. Spicer: I understand precisely the hon. Gentleman's point in the context of the privatisation proposals. My answer is that, in competing with other forms of fuel, British Coal continues to get backing from British taxpayers of about £1 billion. If that is not an element of support to the coal industry, I do not know what is. It compares favourably with any support for research in the nuclear industry.
The post-privatisation figure in the nuclear industry is about 20 per cent. Coal is, and no doubt will remain, a much larger proportion of the fuel for the electricity industry than the nuclear industry will ever be. So there is no question of there being any disparity or unfairness against the coal industry, as it is receiving this massive public support.
Mr. A. J. Beith: Does not the privatisation legislation mean that the coal industry will compete with other fuels for the attention of electricity generators, whereas nuclear energy is intended to have a guaranteed share of the production of energy?
Mr. Spicer: The hon. Gentleman is right, but the point behind the order is that, in competing with other fuels at home and abroad, the coal industry has enormous advantages, one of which is that it is receiving money from the taxpayer at the rate of about £1 billion every year. If that is not giving it a bit of a head start against other forms of fuel, I do not know what is.
Mr. Frank Haynes: The Minister has not answered the question on competition and he knows it full well. He is bandying about figures for what taxpayers are investing in the industry. How can our mines compete against countries such as South Africa, where they use cheap slave labour to mine coal? We cannot compete against their price. There is no doubt that, with the privatisation of the electricity industry, it will be encouraged to buy coal from South Africa. What about selling Britain here tonight?
Mr. Spicer: The hon. Gentleman knows a great deal about this industry and will perhaps accept that British Coal competes extremely well. To say that it cannot compete when South African coal accounts for about 200,000 tonnes in the electricity industry and British Coal is producing 80 million tonnes is a little more defeatist than the hon. Gentleman means to be. Not only can British Coal compete if it puts its house in order, but it is receiving enormous support from taxpayers to enable it to compete.
Mr. Dennis Skinner: Not as much as the farmers.
Mr. Spicer: The hon. Gentleman has just come into the Chamber. I am delighted to see him and I thought that he would probably come in, as he usually does. But every time he comes in he shouts about farmers.
Mr. Skinner: Will the Minister confirm that in the past 12 months farmers have received subsidies from the CAP of £2,000 million and that his beloved Daily Telegraph the other week concluded that every family in Britain was contributing £11 a week to sustain the CAP? If the mines of Britain had had that sort of subsidy, there would have been no closures in the past five years.
Mr. Spicer: If the hon. Gentleman had been present at the beginning of the debate, he would have heard me say that the coal industry has received £9 billion of taxpayers' money during the period of this Government.
Mr. Skinner: What about the farmers?
Mr. Spicer: This is precisely the same point as the hon. Gentleman is making about farmers. With his great mathematical knowledge, he can no doubt work out precisely what that means for every family in terms of subsidy.
Mr. Skinner: The man's an idiot.
Mr. Spicer: The hon. Gentleman has called me an idiot. If he for one moment considered that he personally was responsible for encouraging British miners to frustrate the modernisation of British pits, if he could answer why he did that and what the effect has been on the coal industry, perhaps some of us would be prepared to listen to him occasionally. He is personally responsible for the frustrations of the pits and for preventing the modernisation of coal. If there are losses, it will be due to the hon. Member for Bolsover and his friends and the encouragement that they have given to opposition to the modernisation of pits. We do not need to hear much more from him about idiocy.
British Coal has responded to the challenge of greater compensation by raising productivity and cutting costs. So far this year, operating costs have been cut in real terms by over 3.5 per cent. and productivity, despite the efforts of the hon. Member for Bolsover, is 12 per cent. up on last year, making a total of over 50 per cent. since the strike which the hon. Member for Bolsover encouraged. Much of this higher productivity has been achieved through investment in new heavy-duty equipment and the spread of new mining techniques.
It has also been necessary to continue with the closure of high-cost pits. It is expected that, during 1987–88, the number of pits will have been reduced by 16, with 12 closures and four mergers. This restructuring is expected to lead this year to large additional depreciation charges of over £150 million. Manpower is expected to have fallen by between 18,000 and 19,000 between March 1987 and March 1988. The cost of the extra redundancies, each of which has been voluntary and the supplementary redundancy lump sum of £5,000 per man have sharply increased the requirement for restructuring grant.
Mr. Geoffrey Lofthouse: Does the Minister appreciate that, despite all the millions of pounds being put into the mining industry, over the past four years in my constituency, thousands of miners have lost their jobs? Since 1983–84, 82,000 men have lost their jobs. Does he also appreciate that the average age in the mining industry is 34 and that the men losing their jobs now have no weekly protection of earnings?
Mr. Spicer: I do understand, and that is precisely the point that I was making. Many people in the industry have lost their jobs. The industry is now in a better position to compete and do everything that Labour Members want. However, more needs to be done before the industry is fully able, as I am sure that it will be, to compete with the rest of the world.
Mr. Morgan: I am not quite sure that the Minister understood the importance of the age point made by my hon. Friend the Member for Pontefract and Castleford
1076
(Mr. Lofthouse). In other words, where restructuring, or shrinkage, took place two years ago, there was a reservoir of people aged 50 or 55 who were happy to leave the industry. The shrinkage or restructuring that takes place now will put people out of work. They may go voluntarily because the golden handshake may be big enough to persuade them to go, but for men aged 30 or 34 that will have severe social consequences, particularly in the light of Lord Young's statement today about dependency making people go soft. Nothing will make people go soft more easily than being put out of work with a golden handshake of £25,000 or £30,000 at the age of 34, which is the average age in the industry.
Mr. Spicer: Not only has all the redundancy been voluntary, but, as a result, anyone who wanted to continue to work in the industry has been able to do so. Whether that will continue in the future is unclear. British Coal has announced that it hopes that in the year ahead there will not be many redundancies or closures.
Mr. Jack Thompson: Does the Minister realise that people are leaving the mining industry not because of voluntary redundancy but because they are offered jobs that are not comparable with the work they are doing and that they do not want to do? In other words, it is semi-voluntary.
Mr. Spicer: If the jobs that they were offered were unattractive, they had the option of staying in the industry. That is one of the options that has remained open to them.
Mr. Jimmy Hood: On voluntary redundancy, is the Minister aware that high British Coal officials have taken redundancy on a Friday, gone down the road with £100,000 of the taxpayers' money, only to come up the same pit lane on the Monday as the director of a new private mining company and go down the pit to negotiate contracts with managers in the pit that they have just left?
This is happening in Nottinghamshire. Production managers and colliery managers are now setting up as private mining engineers. This is in the constituency of the hon. Member for Sherwood (Mr. Stewart). Can the Minister address himself to that problem as well?
We in the miners' parliamentary group had a meeting today with British Coal. For years now, British Coal officials and Ministers have pushed the view that the problems in the industry have all been caused by Scargill, Scargill, Scargill. This year the nurses have been on strike, but hon. Members cannot blame Scargill for that. The deputies have been on strike. The National Association of Colliery Overmen, Deputies and Shotfirers has been on strike. This was caused not by Scargill but by the Fascist-type management of British Coal, supported by the Government.
Mr. Spicer: The hon. Gentleman has made his own speech and no doubt the House listened with interest, particularly to the point about Fascist management. May I now continue with what I was saying?
Restructuring grant is expected to total £232 million in cash terms in 1987–88, compared with the original budget of £129 million in restructuring grant. Payment is, of course, subject to approval of a Supplementary Estimate presently before the House. Apart from tough market conditions and the need to respond to them, British Coal has had to face industrial action by both the National

1077
Union of Mineworkers and NACODS, which has led to a loss of output and a damaging decline in customer confidence.
All these factors have combined to increase the corporation's cash requirements and its deficit for the year. So, as foreshadowed in the November debate, I announced in early December an increase in British Coal's external financing limit to £842 million, and I announced a further increase to £920 million earlier this year to reflect the extra redundancy costs that had become necessary.
The corporation's financial position is extremely fragile. Under the statutory rules governing lending from the National Loans Fund, it has not been possible for some months to allow British Coal access to medium and long-term funds. British Coal will therefore be increasingly reliant on short-term borrowings. To reflect this, we have agreed to increase the corporation's temporary borrowing limit from £900 million to £1,000 million this year, and a further substantial increase is likely to be required next year. We shall continue to keep the financing of British Coal under review, in the light of market and all other relevant factors.
The Government have invested an enormous £9.2 billion in the coal industry. In addition, since 1979, they have supported capital investment of £6.2 billion.
Mr. William O'Brien: I appreciate the Minister giving way, because this is relevant to the point that he is making about capital investment in the industry. He referred to the expenditure on redundancies, which gives great concern to those of us who represent mining constituencies.
But there is a further issue which is also relevant to what the Minister was saying about capital investment. Is he aware that mining machinery manufactured in this country is being overlooked and set aside in favour of mining machinery bought from Europe and America for use in our pits? The industry is declining, yet mining machinery is being purchased from abroad, thereby creating employment problems in areas, such as my constituency, where mining machinery is manufactured. Will the Minister examine the situation of the mining supply industry which is faced with problems of redundancy because British Coal is buying machinery from abroad?
Mr. Spicer: The hon. Gentleman is absolutely right to mention mining equipment. Only this afternoon, some representatives from that industry were in my office. There are 50,000 people employed in that industry and it currently exports 35 per cent., or about £140 million-worth, of equipment. We are market leaders, beating Germany in many markets, including that of the United States. We have nothing to be ashamed or concerned about in the mining equipment industry. It is a superb industry and I understand that it absolutely dominates the British market.
The hon. Gentleman was absolutely right to mention that important industry in this context, as it is often forgotten when we are talking about those directly employed in the coal industry. The mining equipment industry is very healthy and is now exporting at a remarkable rate.
The Government recognise the strategic importance of a strong and competitive coal industry supplying the core
1078
of the country's energy requirements. That is precisely why we are investing heavily in the industry. In spite of the extra losses which I have described tonight, we still expect capital expenditure to continue unchanged at £650 million next year. I emphasise also that we do not propose to change the external financing limit of £670 million for next year.
We are in fact now beginning to see the prospect of a return on the taxpayer's investment. The cost reductions which British Coal has achieved offer the chance of break-even next year, for the first time in 10 years. I do not underestimate the nature of this task, but I believe that break-even remains a realistic, though difficult, target for next year. Within this, some limited restructuring will continue to be necessary, and next year the Government will provide grant to meet 72.5 per cent. of that cost. This will lift the cumulative expenditure on restructuring grant since March 1987 to more than £300 million by the end of next financial year; and it is in recognition of that that the restructuring grants order before the House seeks an increase in the limit on expenditure to £500 million.
I continue to be impressed by British Coal's determination to eliminate its losses. It is therefore all the more disappointing that certain union leaders seem prepared to jeopardise the prospects of the industry and the jobs of their members by their refusal to consider modern methods of flexible working which are now widespread in other countries and industries, and by encouraging senseless industrial action.
I have to tell them through hon. Members that the Government's financial support is not inexhaustible. The taxpayer cannot be expected to continue to put high rates of capital investment into the industry beyond next year unless fuller use is made of the plant and machinery that has already been installed. In future, more of the money for further investment will have to be generated from within the industry itself.
If union leaders fritter away the industry's great opportunities, the inevitable effect will be lost investment, fewer jobs and closed pits. Of course, that will be especially true as a soon-to-be-privatised electricity supply industry begins to shop around in the best markets for coal in the interests of its consumers.
In short, this draft order is necessary for the continuing process of putting the coal industry in a strong position, from which it can exploit the opportunities which lie before it. I have no doubt that British Coal has the capability, the capacity and the resources to compete against foreign producers of coal. Whether it does so will depend upon those who work in the industry. The Government tonight show they are willing once again to stand behind the British coal industry. They are backing the industry with funds as no Government have ever done before. The question is whether those investments will be allowed to be put to good use. I commend the draft order to the House.
Mr. Michael Fallon: On a point of order, Madam Deputy Speaker. This is an important debate on the coal industry and you will probably have received a number of applications from hon. Members on both sides of the House who wish to participate in the debate. As approximately 46 Opposition Members have coal mining interests, and only a third of them are present, would it be

1079
in order to adjourn the debate for about 10 minutes so that the remainder who are not here can be found in the bars and coffee houses of this place?
Madam Deputy Speaker (Miss Betty Boothroyd): There are enough hon. Members in the House to keep this important debate going.
Mr. Martin Redmond: On a point of order, Madam Deputy Speaker. Would you care to inform the House how many Conservative Members were queueing to speak before 6 o'clock this evening? For your information, the answer was none.
Madam Deputy Speaker: I am in a position to answer that: I am not in the numbers game.
10.24 pm
Mr. Alexander Eadie: Having listened to the Minister, I wondered whether he was introducing an order or a threat. His closing remarks were unfortunate. The orders have been delayed in coming to the House. We have been threatened with them for some time. Under article 5 of the restructuring grants order, the aggregate for grants is increased from £300 million to £500 million. The accompanying schedule deals with the expenditure under such heads as redundancy and early retirement, changes of work and place of employment, concessionary coal, retraining and new employment.
Because money is required under all those headings we have the opportunity to comment on the industry in its entirety. The Minister also gave us the opportunity because he talked about next year's restructuring. Some of us wonder what will happen then. I gathered that the Minister's speech was written before the privatisation of electricity was proposed, and even before the negotiations took place. He has also told us, in conformity with what we were told before, that there will be a transfer of costs to British Coal.
What happened in the coal industry in 1987 made it inevitable that the Minister should have to come to Parliament with new proposals in 1988. I read what we were told by the then Minister when a similar order was debated in 1987, and it bears no relation to the climate in which the coal industry is operating. I hope that the Minister will concede that. Nor indeed does it bear any relation to what the Government saw for the coal industry or for miners at that time. If the Minister is in any doubt about that, I can refer him to the debate, because I have a copy of it here.
In the many years in which I have taken part in coal debates, I can never recall a time when such a cloud hung over the industry. As we discuss the orders, the very existence of the coal industry in part of the country hangs in the balance. Whatever is said in the debate, that is the backcloth. We cannot ignore what has taken place. I was a miner for 30 years before I came to the House, and I have never known a time when morale in the coal industry was at such a low ebb. I indict the Government as the main architect of the crisis in morale.
The Secretary of State for Energy has said that British coal will have to compete in the market, but nuclear power is not to be treated in the same way. If it were it would wither, because the market could not stand up to the commitment and the expense. To sell the privatisation of electricity, the Secretary of State for Energy has given the green light to coal imports. Foreign coal miners have jobs;
1080
British coal miners are threatened with the dole. No one who has kept abreast of the situation in the coal industry can fail to be aware that 1987 was marked by the emergence of international coal as a major competitor. I concede that the Minister referred to that in his opening remarks.
What has been done to deal with the problem? I shall deal with the question of restructuring and of redundancies. At a very heavy cost, British Coal's prices have undergone a sharp drop. Under the joint understanding with the Central Electricity Generating Board, to which I have referred in previous debates, price concessions were made in 1986 to the tune of £400 million, but the decline in the value of the dollar against sterling during 1987 has exacerbated matters by increasing the gap between the prices of British and foreign coal by 25 per cent., or £6 per tonne, without any action being taken by British Coal or its competitors. The overall loss of revenue from sales amounts to more than £500 million.
It has been said that the work of British miners should be put on record. The Minister referred to that, but not to the financial burdens that British Coal has had to bear because of the slump in the dollar and its effect on the competitive prices of coal. I would put the case rather differently from the Minister. The output per man shift has passed the 4-tonne barrier. Productivity has increased by 60 per cent. since the miners' strike in 1984 as a result of so-called restructuring.
The coal communities have paid a very high price for that. At the end of the strike there were 169 pits. We are now left with 102, and before March 1988 ends the figure is likely to fall to 96. The number of coal faces has fallen from 520 to 260. Total manpower has fallen from 220,000 to 127,000—an overall reduction of 93,000, 78,000 of whom were mineworkers. That contraction of manpower is without parallel elsewhere in industry in recent times.
I am informed that British Coal's sales are running at about 105 million tonnes. The industry has reduced its costs by 23 per cent., but, with all the price pressures on industry in real terms, British Coal's average proceeds are down 15 per cent. since the miners' strike. British Coal is running hard even to stand still.
Having outlined those circumstances, I want to put it on record that British Coal recorded a profit of £306 million in 1986–87—a a greater profit than British Steel achieved. Unlike British Steel, which paid £20 million in interest on its capital in 1986–87, British Coal is paying nearly £400 million at an interest rate of 11 per cent.
Much of the public discussion — it is fuelled and encouraged — is based on the view that the electricity generating industry could import much of its coal requirements and that the present low price to international coal can continue indefinitely. The reasoning behind the oft-quoted savings of £750 million for the CEGB and £10·5 million to £20·5 million for the South of Scotland Electricity Board is a myth. At current Rotterdam spot prices those figures are not sustainable. The prices do not cover the exporters' operating costs. Already 10 Australian mines have been closed, and even South Africa has cut exports by 8 million tonnes. Present prices do not form a basis for new capital investment. To do so, they would have to be 50 per cent. higher.
I am told that only some 4 per cent. of steam coal is traded internationally. Imports to the whole of western Europe are only 70 million tonnes. The CEGB alone consumes at least 80 million tonnes. Any large-scale

1081
attempt by the CEGB or the SSEB to buy coal on international markets would sharply increase import prices. As for the claim that those higher prices would still be lower, I am reminded that British Coal already sells 12 million tonnes at international prices.
Mr. Andy Stewart: I am following the hon. Gentleman's argument with interest. Last year just over 9 million tonnes of coal were imported into this country, more than 7 million tonnes of it by the British Steel Corporation. If we had flexible working arrangements in south Wales, much of that coal could come from this country. Does the hon. Gentleman agree that that would be a step forward?
Mr. Eadie: The hon. Gentleman's figures are correct, but he is introducing an Aunt Sally into the debate. I am trying to defend the present position of British Coal. If the hon. Gentleman has views about flexible working, he may manage to catch your eye later, Madam Deputy Speaker, and make his own contribution.
Mr. Edward Leigh: The hon. Gentleman speaks with moderation and sincerity, but he has been speaking for some time. Before he sits down, will he not utter even one word of criticism on behalf of the Labour party of the blinkered and destructive leadership of Mr. Arthur Scargill, who has served the interests of the miners so badly? Does he realise that the patience of Conservative Members and of the public at large is running out?
Madam Deputy Speaker: Order. The order before the House does not concern any individual personality.
Mr. Eadie: I apologise for giving way to the hon. Gentleman, Madam Deputy Speaker. I should have known better. The hon. Gentleman may not like it, but I have not finished yet.
There is little doubt that the SSEB coal row has grabbed the headlines, and so it should, because if the SSEB gets its way it will mean the extinction of the coal industry.
Mr. Nicholas Fairbairn: Will the hon. Gentleman give way?
Mr. Eadie: I am sorry, but I must carry on for the moment. In this crisis, the Government appear to be involved in some skulduggery. The Financial Times international report for February substantiates that assertion. It says:
"There seems to be little likelihood that the British government will intervene to stop the import move. It is understood that before last month's price enquiry the Secretary of State for Scotland, Malcolm Rifkind, had given his assent to the move. It is likely that the SSEB chairman, Don Miller, would have once again sought clearance from the Scottish office before leaping.
Nor is British Coal likely to get any support from energy secretary Cecil Parkinson who last week told the Coal Industry Society that the shortly-to-be privatised British electricity supply industry will be entitled to buy its coal from whichever source it chooses. Clearly Miller has been told that he need not wait for privatisation".
That is why I said that there had been some skulduggery in this matter.
I asked the Library to research the terms of reference of the Central Electricity Generating Board and the South
1082
of Scotland Electricity Board. I know that the Secretary of State's hands must be very sore from sitting on them with regard to this industry. He has sometimes said,
"It was nae me; there was nothing else that we could do."
The Act says:
"The powers of the Secretary of State for Scotland in relation to electricity supply are contained in Part II (sections 32–38) … to give directions to either Scottish board where this appears to be necessary in the national interest".
The other board that is referred to there is the Scottish hydro board.
The Government are not entirely guiltless in this matter. This week, Campbell Christie, who is the general secretary of Scottish Trades Union Congress, was reported as saying that someone was lying. He was referring to Donald Miller's vice-chairman, Iain Preston, and to whether the SSEB had obtained a tender from British Coal. The press release from British Coal says:
"Responding to comments … made by SSEB Vice-Chairman … Malcolm Edwards said: 'We offered the SSEB on Monday before the closing date for tenders, a unique 12-year coal supply and price package which reduces the prices from British Coal from April 1 in money terms by 6 per cent. or £9 million. In real terms, corrected for inflation, the saving would be nearer 10 per cent., or £15 million.'"
Mr. Campbell Christie is entitled to a reply to the question that he has posed. Who is lying about this crisis in Scotland?
These orders earmark the provision of finance associated with the coal industry. Large-scale contraction arising from cheap imports will be irreversible and permanent.
Mr. Patrick McLoughlin rose—
Mr. Eadie: Unlike factories, coal mines cannot be mothballed. Once they are closed, they stay closed. Do we want electricity supplies—the House must be apprised of this possibility — to be in the hands of South Africans, Poles, Russians or the Colombians, with all the trauma and uncertainty that that would entail? We have an abundance of coal reserves in this country, and it is in our strategic interest to mine them.
Why should we rely on the short-term vagaries of the spot market? The Government should have a clear policy for the mining of indigenous British coal. They certainly have a clear policy for nuclear energy. I hope that my hon. Friends will highlight the blatant prejudice for nuclear energy that the Government are showing in their policies, and how biased they are becoming in relation to the coal industry.
10.44 pm
Mr. Dick Douglas: I shall try to be brief, as many of my hon. Friends wish to participate in the debate.
I should like to expand on some of the remarks by my hon. Friend the Member for Midlothian (Mr. Eadie) about the dispute between South of Scotland electricity board and British Coal. My hon. Friend referred to comments made by Campbell Christie of the STUC. I met Mr. Miller, chairman of the board, last Friday, and we talked about the vexatious problem of the restructuring of the Scottish industry.
I see that my hon. Friend the Member for Clackmannan (Mr. O'Neill) is present. In our area, we know some of the consequences of restructuring, particularly in Fife. My mind goes back to a meeting some months ago in Oakley, where the issue of the closure of

1083
Comrie colliery was discussed. One point made then was that if the colliery closed, the resources would probably be available for investment in Seafield, Castlebridge and other parts of the Longannet complex.
The men made a brave decision: they voted for the closure of their own colliery. That colliery was sunk in the 1940s, and Herbert Morrison, when he went along there, called it the cat's pyjamas. It was kept in existence by the efforts and tenacity of the men. It is rather insulting that, according to one of my hon. Friends, someone called Lord Young has said that we live in a soft society. Some people may he living in a soft society — I may be looking at some of them on the Conservative Benches — but very few miners in my constituency do so.
I have worked hard in my time. I left school at 14—I am probably one of the few hon. Members on either side of the House to have done so — and I have worked damned hard. But never have I seen men work as the men in that and other collieries have worked. Nevertheless, those men voted for the closure of their colliery and the restructuring of part of their industry.
We now have not an old but a young labour force. At a meeting that I attended on Sunday in Fishcross were some very young men. I do not consider myself an old man yet, but I was old enough to be their father. They were in their 20s and 30s, and they were concerned about the future of the Longannet complex.
What is at stake is an analysis of competition. The Coal Board says that it is making an arm's-length offer to the SSEB. The SSEB is constrained by an Act of Parliament to get the best deal that it can. Mr. Miller says that there is a dispute. If there is a dispute between two public boards, it does not behove any sensible Minister to sit back and say, "I am having nothing to do with it." The dispute is about the offer that British Coal is making, and its interpretation by the SSEB.
I have written to the Prime Minister on the subject. I hope that I am not misinterpreting Mr. Miller. He suggested to me that if British Coal was willing to subject its offer to independent scrutiny, he would be similarly engaged. Given that, any Government worth their salt would bring them together, perhaps not at ministerial level but certainly at civil servant level. I shall mention a civil servant by name: I cannot believe that if a Labour Government were in office the Gavin McCrones of this world in the Scottish Office would not be asked or told—indeed, they would not need to be asked or told—to get some idea of what the hell the two boards were up to.
We are not talking about market economics. We are talking about upwards of 4,000 jobs and about the salvation of deep mining for coal in Scotland. The Minister is putting a lot of money into it—he told us how much. What happens to Castlebridge and the Longannet complex if the SSEB walks away from them? They are not pieces of putty. They are a fixed asset with a specific function that is tied to the power station.
I shall digress and mention the stupid statement made today by the cockeyed, phoney-baloney Secretary of State. He said that we shall have competition in the electricity industry. But we are not dealing with England or Wales. He spoke of setting up two companies, one for the north of Scotland and one for the south. The two of them will come together to run the nuclear side of things. And what will the nuclear side count for in Scotland? It will account for between 25 and 30 per cent. of capacity and output. Off the top of my head, that is about 50 per cent. of baseload.
1084
Where in God's name is the competition there? It is a pantomime horse called duopoly, its head in a plutonium trough. Who is kidding whom about competition?
We are asking about men's lives and the future of communities. We are asking for fairness and we intend to keep up the campaign in Scotland. I hope that the rest of the country realises what is happening there. The Minister cannot or will not take the responsibility for resolving the issue of what is involved in the contractual relationship. Deep mining in Scotland is in deep jeopardy.
I accept that there have been many difficulties in industrial relations in the past, but now the industry has been pruned down, and there is little spare flesh or muscle left to trim off. We are down to the bare bones of capacity and output. I plead with the Minister or the Secretary of State not to stand back and accept the position but to obtain a proper analysis of what is going on. I remember 1964 and further back, when the great future for fuel and power supplies was in cheap oil, but we know what happened in the 1970s. That could happen again. It would be a brave man who anticipated the demand for and supply and price of oil over the next 10 years.
We are in a transitional stage. If we give up deep-mined coal in Scotland, we shall destroy a valuable and irreplaceable asset. Much money has gone into the industry. We cannot write off the £80 million that has gone into my constituency and that of my hon. Friend the Member for Clackmannan. No Government in their senses could do that. But perhaps I plead in vain—I see little sense in Ministers these days.
10.53 pm
Mr. A. J. Beith: The restructuring of the mining industry has had its effect in Northumberland, where the number of mining jobs fell from 34,000 in 1960 to 4,500 in 1985, and is probably significantly lower than that now. Most of the remaining jobs are in my constituency. Despite this massive change, into which considerable amounts of Government finance have gone, we are still not receiving the help that we need to deal with the consequences of change for the community.
The lack of assisted area status and the feared decline in regional aid under the recently announced new arrangements means that the Government, having helped to finance restructuring from public funds, are leaving the communities to finance the consequences of restructuring, which are a heavy burden. They are doing so in a framework in which local authorities have little power to spend money even if they could raise it, so they are severely restricted in what they can do to deal with the consequences of this massive change. Their access to European funds to help to deal with the changes is blocked by the lack of assisted area status in many of the affected areas, including the one that I represent.
The House has discussed that subject often and I will not repeat what I have said. However, the problem has not gone away; it remains as serious as ever. On top of that, there are worries produced by the proposed privatisation of the electricity industry and the particular form that that is intended to take. It has raised fears that the position that has already arisen in Scotland over the South of Scotland electricity board contract might also arise extensively in England.
Morale in Scotland is worrying. The SSEB is the electricity provider for a significant part of my

1085
constituency and its activities have caused us some concern over the years as it has launched a massive nuclear programme which gave it a colossal over-capacity; some really extraordinary investment decisions were taken, the consequences of which we are beginning to see as the board puzzles over what to do with the Torness plant and the problems that it presents.
If the Government get their way, the SSEB and other boards will be committed to deliberate market distortion to secure a future for the nuclear industry at a level that the private sector would not provide of its own free choice. There can be no other explanation for the Government's desire to include a requirement in their privatisation provisions for the nuclear industry, disguised in the proposals as a requirement for non-fossil fuels. I do not believe that that is what it is all about. Obviously it is an attempt to secure a place for the nuclear industry which purely market decisions would not provide. That is a sign of the kind of pressures that will be brought to bear on the coal industry.
Mr. McLoughlin: Will the hon. Gentleman accept that we desperately need to balance energy resources in this country so that we are not reliant on any one sector of energy? What has changed since the National Coal Board's report of 1966–67, which stated:
"The task now facing the board is to secure the largest possible output of coal at prices that are competitive with rival fuels. Competition from oil, natural gas and nuclear power will be a formidable and continuing challenge to the coal industry"?
That was perceived quite some time ago.
Mr. Beith: Since then it has become clear that the potential of nuclear power in any straight commercial circumstances does not seem to be anywhere near as dangerous to the prospects of the coal industry as the coal industry once thought. The provisions would not be in the Government's privatisation proposals if they did not fear that, given a free choice, the private sector simply would not invest in nuclear power.
The hon. Member for Derbyshire, West (Mr. McLoughlin) advances the interesting argument that we should forget the market and devise an appropriate balance of different kinds of energy production. That is not the Government's policy. At least, it is not the philosophy that the Government espouse. If it is Government policy, it means that in relation to the coal industry we should take a much longer-term view of the implications of coal prices for what the electricity industry buys and which pits we keep in production. If the objective is to keep a balance, we should take a little less notice of the current spot price for coal and look to longer-term considerations and how to keep the coal industry in being. The Government must solve that inconsistency in their approach.
One of the ways in which the coal industry has tried to alter the balance of costs has been through the expansion of opencast production. The restructuring towards opencast is almost as significant as that being carried out in other areas. That restructuring has had a particular impact in my constituency and the pressures have now built up in my constituency to a frightening degree. The local community has been confronted by a number of major site proposals. These have affected the villages of
1086
Linton and Ulgham. The proposal for Ulgham is for a very large site intended to replace the Butterwell site in due course.
Areas in which people had not expected a major expansion of opencast operation have become subject to it. Whereas opencast was initially developed in my constituency in areas that had been severly ravaged and in which the restorative work of the Opencast Executive could bring at least some benefit at the end of the day, the development is now entering areas where that will not happen and where the prospect is simply many years of misery for the people living on the doorsteps of the opencast. Restoration will not equal the quality of the countryside that existed before the opencast development.
The most recent case—it is causing a great deal of anxiety in my constituency — is an application for a private licence opencast scheme in an area of wild Northumberland moorland where nobody really expected that sort of development to take place. The area is called Wandylaw. It is an area of prehistoric sites, cup and ring markings, cairn cemeteries, beautiful natural moorland and all sorts of features that were thought to be sacrosanct. The area is now the subject of an opencast application, which the county council has approved in principle, thereby preventing any public inquiry, public meeting or other methods by which the local community can express its concern.
The community in Northumberland was initially fairly willing to accept the move into opencast production and was pleased about the small number of valuable jobs that it would create. However, there is now increasing hostility towards the scale of opencast development. The local people are increasingly concerned now that the Secretary of State for the Environment has overturned his own inspector's reports in some recent cases. That will lead the local authorities to feel that it is not worth turning down applications because they will only be overturned on appeal and they may be wasting their time in refusing the application in the first place.
This has created an unfortunate climate of much greater hostility towards opencast coal operations. It calls for a little more caution in the pace at which the applications go ahead and a more determined attempt to enable the local community to express a view when opencast applications come forward.
The coal industry is distinctive in the scale of disruption that its restructuring causes its communities. That is partly because of the great dependence of some of those communities on the industry and partly because of the physical changes that come about as a result of opencast mining. The Government have to recognise the importance of stability in the industry now that it has been pared down to such a small prorportion of its former size. They have to recognise the concern of local communities and their need for practical help in dealing with the problems of restructuring.
11.2 pm
Mr. Nicholas Fairbairn: I am moved to make a short contribution by the sincere speech of the hon. Member for Midlothian (Mr. Eadie) for whom, as he knows, I have the greatest respect, and by the speeches of the hon. Members for Dunfermline, West (Mr. Douglas) and for Berwick-upon-Tweed (Mr. Beith). The House is nobly served by the contributions of the hon. Member for Midlothian and there is no more sincere and

1087
passionate advocate for the mining industry than he. As a lawyer, I have had the pleasure and honour over the years of representing members of the mining industry.
The hon. Member for Midlothian said one thing that was not strictly accurate. He said that the proposals of the Scottish electricity industry—I am careful because there is presently a case that is sub judice and has been taken to avizandum between British Coal and the South of Scotland electricity board—would spell the death knell of the mining industry in Scotland. That is not so. More than 50 per cent. of the production in Scotland is not deep mined. It would certainly have consequences for the deep mining industry in Scotland if the SSEB were to obtain its fossil fuels from sources that were not deep mined in Scotland; of that there is no question.
As I understand it, one nationalised, or denationalised, industry is not supposed to be in business to keep another at work. The function of the electricity industry is to provide for the customer — coal miner, retired coal miner, coal miner's widow or whoever—electricity at its lowest possible cost.
Probably the most resented and most difficult to meet bill that comes into any household in Scotland is the blue, the red and then the white cards of the electricity industry. That bill is directly related to the cost of the fuel that the industry requires to provide electricity.
Let us be under no illusion. There is no duty on any industry to keep another going at the expense of the public whom it is intended to serve. That was the issue this afternoon and that is the issue which is echoed tonight.
Mr. William O'Brien: Balderdash.
Mr. Fairbairn: Is it balderdash that the electricity industry is intended to serve the community — pensioners, hospitals and industry—with fuel that they can afford, or is the electricity industry meant to keep in business traditional industries which are more expensive, whatever the cost in unemployment and the cost to the pensioner, the family and those who cannot afford to heat their homes?
Mr. Phillip Oppenheim: My hon. and learned Friend, like me, probably has in his constituency a number of miners and a number of other people who work in other industries, such as dyeing, pottery and brickmaking, all of which are highly energy-intensive industries. Does he agree that the jobs of those people in energy-intensive industries would be at risk if the Opposition's policies were ever implemented?
Madam Deputy Speaker: Order. I have to remind the hon. and learned Member for Perth and Kinross (Mr. Fairbairn) that we are discussing restructuring grants in the mining industry. I hope that he will relate his remarks to the order.
Mr. Fairbairn: I am obliged to you, Madam Deputy Speaker.
The hon. Member for Berwick-upon-Tweed referred to the anxieties about opencast mining, but the anxieties about deep mining are just as great. The dangers of deep mining are infinitely greater, so of course the anxieties are great. Until the hon. Gentleman spoke, I had never heard anyone refer to the moors in Northumberland as places whose beauty people were anxious to preserve.
My point is simple. It is our duty to restructure, as so many mining communities have done. They have a
1088
particular and remarkable social consciousness and moral value as communities, but that is not any reason for the rest of the people to be held to ransom on the basis that, whatever the cost of the fuel that it uses, the electricity industry has in some way a duty to the mining industry but no duty to the public whom it is serving by the energy that is produced.
11.8 pm
Mr. Allen McKay: I should like to follow the comments of the hon. and learned Member for Perth and Kinross (Mr. Fairbairn) on production in Scotland. I agree with my hon. Friend the Member for East Lothian (Mr. Home Robertson) that the death knell will sound for the coal industry in Scotland if the problem of the Scottish power industry is not solved. I learnt only this week that the outcropping, or opencast mining, in the constituency of East Lothian has not just been held up, but has ceased. Almost 150 people will be made redundant. The colliery involved will not open again until it can be guaranteed a market for its product. Much of what is produced in Scotland by opencasting goes across to Ireland.
It should sound a warning when opencasting, which is supposed to produce the cheapest coal, ceases to work because it cannot be guaranteed a market. The Minister looks puzzled. In my talks today with the deputy chairman of British Coal and the managing director of the Opencast Executive, Mr. Proctor, they admitted that there was a problem. It is a warning of what is happening to the coal industry in my area.
Perhaps I should declare a lack of interest in the debate. When I came to the House in 1978, there were eight collieries in my constituency, and two more in an adjacent constituency. There are now no collieries in either my constituency or the adjacent one. Ten collieries where my constituents used to work have therefore closed. They have been restructured since 1978. Restructuring is all about colliery closures. When we consider an order that increases the amount of money available for the restructuring programme, we look at it suspiciously, because it indicates that further closures are imminent.
The Government have recently taken away British Coal's guarantee regarding its collieries and have physically and knowingly transferred it to the nuclear industry. That is what they did the other day, when they announced that British Coal was breaking even.
There was something sinister in the closing remarks of the Minister—I agree with my hon. Friend the Member for Midlothian (Mr. Eadie) about this—when he said that the taxpayer will go only so far. How does the Minister know that the taxpayer will go only so far? He said that the Government believe that the taxpayer will go only so far, but they are wrong. The Government will leave the coal industry wide open, under the guise of market forces operating in relation to a privatised electricity industry. They have sold the coal industry down the river. The coal industry will be run down to a managed proportion which will be ideal, in the not-too-distant future, for a Bill to come before the House to privatise what is left of the coal industry.
The hon. and learned Member for Perth and Kinross referred to balance. The balancing effect has now changed. It used to be argued that we could sustain a large viable coal industry and that what it could not produce for the electricity industry would be topped up by nuclear fuel. All

1089
that has now changed, because the balance has swung in the opposite direction. Evidently, the future trend is towards nuclear, topped up by coal, so we are working towards the long-term demise of the coal industry. That is what the Department of Energy means when it says that the coal industry must compete against foreign imports.
The only thing that is stopping imports from pouring into this country is the fact that we do not have the facilities for them. Opposition Members put blocking motions on Bills to try to ensure that the coal industry has a fair crack of the whip. The Government talk about making facilities available for more coal imports as part of their long-term plan. That accounts for the so-called restructuring programme.
The last colliery to close in my constituency was Redbrook colliery. Some £29·5 million was spent on the colliery, thereby making a new colliery. On the day that the closure was announced the contractors were still there completing the restructuring. The output of that colliery was twice the national average. There was no investment or output reason for its closure. In restructuring, what is the money being spent on? Does spending £29·5 million on a colliery only to close it come under restructuring?
I agree with the hon. Member for Berwick-upon-Tweed (Mr. Beith). Most areas are coming under pressure from the opencast executive to extend opencast mining. It has been said that the coal is needed for blending, and in some cases this is true. In other cases, it has been said that it is done to keep the deep mines open, but that is not true. The cash flow from opencast mining appears on the bottom line, so it reduces only the total cost of British Coal. It does not keep down mines open, or Redbrook in my constituency would not have closed. British Coal is seeking to produce low-cost coal that will be able to compete against imports, but opencast mining in Scotland is not succeeding. All that we can see is the demise of the coal industry, as a deliberate policy of the Government.
What is happening to liquefaction and gasification? What has happened to the Waldilove report? It has been held up until privatisation becomes imminent. No private owner will take on board the costs of subsidence. These are questions which we should all ask, and which the Minister should be able to answer. He should be honest with the House, with British Coal, and with the people who work in the industry, because they have a right to know what is behind the restructuring programme. Are we correct in our assumption that there will be an increase in colliery closures and that if the industry does not break even next year it will go under? If so, that is pure market economics.
The coal industry was nationalised because private enterprise could not sustain it. Public money made it possible to bring the coal industry to the level that it has achieved. I am proud of having worked for the coal industry from when it was not mechanised through to its electronic era, and I had a hand in introducing that. However, I am afraid that all that expertise will be thrown to the wall and the coal industry will be destroyed, or at least severely diminished, because of the programme that the Government have planned for it.
11.18 pm
Mr. Martin Redmond: I listened intently to the Minister, and his speech reminded me of the sinking of the Titanic. It did not fill me with confidence for the
1090
industry, particularly given the amount of money that he is granting it. The order is about restructuring. Has the Minister had any detailed discussions with British Coal on how that money will be spent against the block headings? I worked in the industry for many years and I know that there have been many restructurings, many reorganisations and much rationalisation.
I will give the Government an example of why I say that they should have detailed discussions with British Coal on how the money is to be spent. The workshops where I worked, together with stores and transport, had a considerable amount of money spent on them, only to be closed immediately after the strike. I can recollect talking to the workshops director about rationalisation of workloads at the various workshops. He had come with plans to rationalise Carcroft for electrification. We put some counter-arguments to him about why that was not in the interest of the workshops. He agreed to take them away and give us a reply. That was at least 12 years ago and we are still waiting for an answer. So the Government really must be told what the money is to be spent on.
We have said that we are not impressed by the restructuring plans of British Coal. I do not think that British Coal and the Goverment have any intention of making sure that we have a viable industry which will work in the long-term interests of this country. The Government are sacrificing the long-term interests of the industry and the country on the altar of market forces.
Yorkshire Main, a pit in my constituency, has £10 million spent on modernising the head gear. Then Yorkshire Main, of course, was closed and the £10 million was thrown down the drain. The pit had a life of 15 or 20 years, but British Coal closed it through its vindictive attitude to the lads in Edlington village. That is the point that I am making. It is no good shoving money across to British Coal and talking in terms of restructuring. The Government really ought to get off their backsides and find out just how British Coal intends to spend the money.
Mr. Jack Thompson: My hon. Friend has touched on a very important point. In my experience of the mining industry in my area, considerable sums of money were spent from 1947 onwards but it was wasted by what I contend was mismanagement. Decisions made by management have proved to be totally wrong, and millions, if not thousands of millions, of pounds have been lost. Yet there has been no inquiry into the management of the mining industry at that period. Such an inquiry is absolutely necessary. Would not my hon. Friend agree?
Mr. Redmond: I absolutely agree with what my hon. Friend has said. Certainly the old Coal Board was found guilty on many occasions. If the Minister is not concerned about British Coal wasting taxpayers' money, he ought to be.
Bentley pit in the Doncaster area was to close under the old ABC hit list. Through the good offices of the Doncaster National Union of Mineworkers' panel, the director was persuaded, under the threat of a strike action, to retain the pit. Of course, many years later, the director was holding Bentley pit up as an example. This is what I am saying: the future of the industry needs long-term planning, and restructuring is about long-term planning. And we shall not get long-term planning if we have this "market forces" routine in operation.
Coal imports have been mentioned. Obviously, the two proposed ports at Humberside will import several million

1091
tonnes of coal. That will have a devastating effect on Nottinghamshire and Yorkshire and will cost the industry many jobs.
No other country can compete with the amount of planned dumping in Britain. The Minister must agree with the dumping of coal and with the slave labour that it produces in such countries as Colombia where women and children are employed. Obviously the Minister agrees that women and children should work in the coal industry or he would not allow the importation of coal from those countries.
In addition to the problems caused by the importation and dumping of coal, the gas industry intends to import gas. Of course that will have an impact on the balance of payments. The Chancellor obviously is not concerned about that, given the recent figures.
The Minister talks about the movement of men and the benefits that they get from restructuring. The industry and those who work in it have always welcomed the introduction of technological changes to improve efficiency. They welcomed those changes and worked with the Coal Board. However, the miners do not want to become industrial gipsies skipping from pit to pit in a downward spiral.
I question whether it does any good to give the Coal Board money for restructuring, when it seems to be operating a policy of confrontation. There is a saying that silent pain provokes no response. When the lads at the pits complain about the jackboot tactics of the Coal Board, they are shouted down, sacked and sent down the road for standing up for their democratic rights, as people living in a so-called democratic country. When we talk about peace, prosperity and restructuring, we must not forget that at Rossington pit, which has produced a great deal of good coal during the past few years, a number of miners have been sacked. No matter what restructuring takes place, it will not cure the industrial relations problems that prevent the industrial peace that the board seeks.
1092
The Minister attacked the union officials and accused them of being Luddites. I have never met a more moderate set of union leaders in the industry than those who now hold office. Moderation is the watchword and the key word by which they operate.
Mr. Geoffrey Lofthouse: Does my hon. Friend agree that his comment that the men are moderate was confirmed this week when the NACODS union, on the wish of a judge, returned to work normally and have suspended the strike? At Kellingley, the major pit in the country, there has been deliberate provocation in that the deputies' duties have been extended——
Madam Deputy Speaker: Order. Regrettably, this is not part of the order. The order concerns the restructuring and the level of financial support provided by the Government to the coal industry.
Mr. Redmond: It is no good restructuring the industry without restructuring certain elements within the industry. Industrial relations are an important part of the industry. The provocation that the Minister seeks to use against certain NUM and NACODS officials simply will not wash. The keyword of the NUM is moderation.
The Minister ought to acquaint himself with a major problem at Rossington. Those who worked in the coal industry at Rossington before nationalisation are deeply concerned about what is happening to their concessionary fuel.
It being one and a half hours after the commencement of proceedings on the motion MADAM DEPUTY SPEAKER put the Question, pursuant to Standing Order No. 14 ( Exempted Business).
Question agreed to.
Resolved,
That the draft Coal Industry (Restructuring Grants) Order 1988, which was laid before this House on 8th February, be approved.

Coal Industry (Deficit Grants)
11.30 pm
The Parliamentary Under-Secretary of State for Energy (Mr. Michael Spicer): I beg to move,
That the draft Coal Industry (Limit on Deficit Grants) Order 1988, which was laid before this House on 8th February, be approved.
I hope, Madam Deputy Speaker, that during this debate you will allow me to deal with a few of the questions that were asked in the debate on the previous motion.
The purpose of this order is to lift the limit on deficit grant available, in respect of this year, from £100 million to the full £200 million allowed under section 2 of the Coal Industry Act 1987.
The tough market conditions and the damaging effects of industrial action have led to a significant reduction in the number of pits during the year, which has resulted in additional depreciation charges of over £150 million. British Coal's deficit for the year has risen from a planned level of just under £100 million to a deficit well in excess of £300 million.
The 1987 Act enabled the Government to contribute up to £100 million deficit grant towards this and made provision for an additional £100 million to be paid, subject to the approval of this deficit grants order. It is our intention to pay out the full £200 million available towards meeting the deficit this year. Payment of the additional £100 million is subject to the approval of a Supplementary Estimate presently before the House.
The draft order is necessary for the continuing process of putting the coal industry in a strong position from which it can exploit the opportunities that lie before it. Whether the opportunities are taken is up to the industry, its management and the men who work in it. The Government are willing to stand behind British Coal, but it is up to it to put the taxpayers' money to good use in order to fight off the undoubted competitive pressures that lie ahead.
I commend the draft order to the House.
Madam Deputy Speaker (Miss Betty Boothroyd): Before I put the Question, I remind the House that we had a wide-ranging debate on the first order. That debate would have been much more appropriate to the two orders being taken together. This order is much narrower and the debate should be confined to the desirability or otherwise of increasing the aggregate limit on deficit grants.
11.33 pm
Mr. Andy Stewart: My contribution to this debate will be to make a request of the Minister, but before I do so, I want to say yet again how much I welcome this Government's total commitment to the coal industry. An investment of £2 million a day is to be admired. I see this investment at first hand when I visit collieries in my constituency.
The Nottinghamshire miners are meeting the feared challenge from abroad head-on by increasing production by over 60 per cent. They are sending coal to the Trent valley power stations at a price delivered, in real terms, 22 per cent. lower than it was before the industrial dispute of 1984. These miners produce 14 per cent. of the nation's coal requirements. In the last half-year, 50 per cent. of
1094
British Coal's operating profit of £100 million was met from the Nottinghamshire coalfield. That example could be followed by the country's other coalfields.
When my hon. Friend next meets the chairman of British Coal, he should ask him to consider further the request of Nottinghamshire miners to be paid for the days they were sent home through no fault of theirs when industrial action was taking place three weeks ago. Loyalty is two-sided. I should like my hon. Friend to ask the chairman of British Coal to consider paying those miners for their lost time.
11.35 pm
Mr. Martin O'Neill: Collieries in my constituency have received a great deal of assistance and investment over the last 10 years. One of the first things I did as a prospective parliamentary candidate was to visit the Castlebridge sinking when my hon. Friend the Member for Midlothian (Mr. Eadie), as the Minister, cut the first sod at the development stage.
In my constituency we have one of the biggest single investments in the British coal industry. The tragedy is that, within a short time, some £70 million of the investment programme of British Coal over the last 10 years may be thrown away because of the Government's headlong rush into the privatisation of electricity generation. I am conscious that I have to be careful about the range of debate, but we are talking to a Minister who has dual responsibility in his Department for the privatisation of electricity and for the safeguarding of the taxpayer's interest in the money which has been spent on our behalf by him and by British Coal on the development of Longannet, which was mentioned in the previous debate.
That investment involves not only money but the commitment of 2,000 people directly as employees of the coal industry, people whose livelihood would be gravely endangered if, as we are led to believe, the South of Scotland electricity board sought to import coal from abroad and if the order, with its limit on deficit grants of £100 million, was to be applied. In the central belt of Scotland, we cannot switch off and switch on the capability of the mining industry.
We have a work force of some 2,000 people in that area of the Clackmannan and Stirlingshire coalfields. The men come from Fife, Clackmannan and Stirlingshire. In the last four or five years, they have become little better than industrial gipsies. We are in the predicament that this is the last fight of the Scottish coal industry. The gipsies have to circle the wagons and to fight for what they believe to be their industrial right to jobs in the Longannet complex because they are capable of producing steam coal which can be converted into electricity at prices which compare with power stations anywhere in the country or in western Europe.
The Minister is responsible not just for coal but for the privatisation of electricity. I know that the Secretary of State for Scotland has a special responsibility for the generation of electricity within Scotland, but the nature of the privatisation proposals which were introduced to the House last Thursday and today show that there is now a United Kingdom perspective on electricity generation which goes far beyond the responsibility of St. Andrew's house and the Scottish Office.
If the limit of grant is laid down as £100 million, it will be insufficient to meet the problems that may arise in the

1095
short term—and we believe that the problems are only short-term problems. We believe that in the long term the Hirst seam, which extends throughout my constituency into Stirlingshire and beyond, is perhaps the richest directly available source of coal in the United Kingdom. We know that coalfields in Yorkshire have been expanded and are in the process of being exploited, with tremendous publicity. In some respects, the Longannet complex is the unsung development project of the British coalfield. Slowly and quietly that complex has been expanded and developed.
We now have an understanding between the Coal Board and the miners' union; we are talking about flexible working without precedent in the Scottish coalfield —with the unanimous acceptance of the men. We have a prospect for the use of the skills of the men in the coalfield that would never have been considered possible four or five years ago.
That possibility is now available to the Coal Board and the Department of Energy, and the Government ignore it at their peril. They may jump at the prospect of getting a couple of years' cheap coal on the spot market. The simplest economic understanding suggests that if one takes the spot market price and increases the demand, the price will rise because the spot market price reflects demand at a particular time. Before very long, the coal industry in this country will be able to produce coal at prices far better than anything that the spot market can offer, and will provide the continuity of supply that lies at the heart of the energy debate.
Let me back up my hon. Friend the Member for Dunfermline, West (Mr. Douglas): we are not talking about an under-capitalised industry with low productivity or an industry that has a poor product and is far away from its customers. We are talking about a coal industry that is directly below its customers and is tailored to their needs. It has a work force that is flexible and understanding but not subservient. I would not wish to represent industrial slaves or make a virtue out of their subservience. The men have made reasoned judgments about their prospects, and they understand what they have to do to keep themselves in employment and to serve the country and the industry to which they have given their working lives.
The men look to the Government for the backing that is required of those responsible for a major strategic industry. If the Government choose—in the interests of privatisation and tax cuts—to throw away the unique opportunity being offered by the people of my constituency and the constituencies around it, they do so at their peril. They will find that it is to their cost not just in the short term at the ballot box but throughout the Scottish economy and outside it.
We are circling the wagons; we are fighting the last fight for the coal industry. We ask the Minister responsible for the defence of that industry to get off his backside and back us with all the power at his disposal. This matter is in his hands. Overall strategic responsibility for the coal industry and for energy generation lies not with the Minister's surrogate at the Scottish Office but with the Department of Energy. A deficit grant of £100 million is chickenfeed compared to the costs that the country will have to bear in the decades ahead if we do not take the opportunities offered to us tonight.
11.44 pm
Mr. Martin Redmond: In view of all that has already been said, I intend to be brief. Looking at the order, I wonder how the fairy godmother is suddenly able to find an extra £100 million for the coal industry when the Government are incapable of finding funds for other sections of society.
The Minister intends to toss in £200 million to make up the Coal Board's deficit. Has he asked the board why it needs the money? If not, I suggest that he should do so, because it is an important question. Sir Robert Haslam will say that industrial action by militants has lost the board x million tonnes production and he needs the deficit grant to balance the books.
If the Coal Board and the Government ran the industry as it should be run and talked to the unions that operate within it, there would be no bad industrial relations and the deficit grant would not be required. The Government may regard £100 million as chickenfeed — perhaps the Minister will confirm that—but I wonder whether there is an ulterior motive behind the increase. Perhaps the Government want perpetual conflict in the industry, in order to run it down and put it at a disadvantage when privatisation of the CEGB takes place. The Minister should spend more than a mere two minutes at the Dispatch Box and give us a better explanation of his motives.
I hope that the Minister will involve himself a little more deeply in the industry and stop the Luddite approach by management, which is causing so much internal conflict and losing millions of pounds of taxpayers' money. The Conservatives are always talking about the need to protect taxpayers' money. I want to give the taxpayer value for money. Blindly tossing another £100 million to the Coal Board does the country and the industry no good whatever. If we are to save not just the additional amount but the original sum that was budgeted for, the Minister should get off his backside and find out why the industrial conflict is going on day after day, week after week and year after year. Indeed, if the Government and the Coal Board have their way it is likely to go on for decades yet.
I sincerely ask the Minister to get involved and to find out what is happening in the industry—there are two sides to every argument—and whether the Coal Board is deliberately provoking the work force.
Mr. Geoffrey Lofthouse: Does my hon. Friend agree that the Coal Board would not need so much deficit grant if the management did not create industrial disputes as it has done at Kellingley colliery, where for the past five weeks the men have mined 55,000 tonnes per week and the management has deliberately created a strike by doubling the work of the deputies?
Mr. Redmond: My hon. Friend makes an extremely good point. I lost a bet on whether the National Association of Colliery Overmen, Deputies and Shotfirers would go on strike, because I said that it would not. Obviously it did so because British Coal—one assumes with the connivance of the Government — deliberately provoked a conflict with the union, which has now led to further trouble, further losses of coal and to this order to make up a deficit.
If the Government and British Coal had sat down with the people from the other side of the industry, we would

1097
be talking not about increasing the deficit grant by £100 million, but about reducing it and giving that money back to the taxpayers. We are all taxpayers. Unfortunately, as a single man, I pay more than most people, but that is the penalty that I pay for my freedom.
The Minister should consider what is happening within the industry. The previous order only tossed more money at the industry, with no thought being given to its direction. In this order we are doubling the grant—not increasing it by one third or 50 per cent. I would be content with half that amount.
The Minister, if he is to save the taxpayers' money, must find out what is wrong with the industry. I hope that he will say that he intends to involve himself a little bit more in the future than he has in the past.
11.51 pm
Mr. David Shaw: As we are talking about deficits, it is appropriate to ask why there is such a deficit in the turnout of Labour Members. I understand that 46 Labour Members have coal mines in their constituencies, yet not even 50 per cent. of them are present. Even Arthur Scargill had a 50 per cent. turnout, although it is questionable whether that turnout was given some encouragement by the more physically well built of his supporters.
The poor attendance of Labour Members proves that the Opposition do not support the coal industry, and that it is dependent on its one main supporter — the Goverment. The Government have put over £,4·6 billion into the coal industry. Investment is at record levels, and by the next general election virtually all the plant and machinery in use in the British coal industry will have been bought by money given by the Goverment. I hope that as miners go to work in 1991 they will appreciate that it is the Government who have provided them with the tools to do their work.
I am concerned about productivity at the Betteshanger coal mine in my constituency. It is a pity that it produces only 1·8 tonnes per man shift, compared with the national average of 4 tonnes. I know that the coal is of good quality, and I believe that most, if not all, of the miners want to keep the pit open. I know that many of them will work hard to keep it open.
What we do not want is the disruption that has caused deficits in the past. That disruption and those deficits were caused by the attitude of the last Labour Government. It is worth noting the problems facing that Government, and the way in which they tackled them, in relation to deficits at that time. The right hon. Member for Chesterfield (Mr. Benn) once said:
"I have never found the NUM in any way unreasonable where closures are necessary because of exhaustion or because pits are out of line in economic terms."—[Official Report, 4 December 1978; Vol. 959, c. 1015–16.]
The NUM certainly was not unreasonable to him because, as Secretary of State for Energy, he closed 32 pits, and two Labour Governments closed 295 pits between them. The present Government have increased deficit grants, because the present Government have shown a commitment to right the wrong of previous Governments. They have shown a commitment to the coal industry and the coal miner. I hope that the message is now clear: that the miners should show a commitment to the Government.
11.54 pm
Mr. Jack Thompson: I appreciate the point that you made earlier, Madam Deputy Speaker, about sticking to the brief. I shall therefore restrict my remarks to the question of how the extra money is being spent.
May I touch on a point that I made earlier in an intervention, about the management of the industry at all levels? I am not super-critical of the management at colliery level. Having worked in the industry for 39 years. I have come across good management and extremely bad management. The problem is that extremely bad management is also extremely costly. Perhaps I can cite some of my experiences.
Lynemouth colliery was not in my constituency, but in that of the hon. Member for Berwick-upon-Tweed (Mr. Beith). It did, however, employ a considerable number of my constituents. The system of working in that colliery —as the working was under the North sea—was called the "board and pillar" system. When the coal was extracted, a pillar of coal 31 yards square was left in the workings to support the sea bed.
Back in the 1960s, the management decided to change the method to long wall extraction, which meant taking all of the coal out. The management felt that there was promotion in production, a consideration which is probably still relevant today. The production manager in those days was a man called Mr. Lang, and it was he who decided to change to the long wall system of extraction.
As a consequence of the new system, a considerable amount of coal had to be left in what was called the "goab" — for the benefit of those who do not understand mining terms, that is the area from which the coal has just been extracted—and the roof collapsed. The coal caught fire. As a result, half that pit—a pit that Lord Robens, when he was chairman of the board, described as having 80 more years of life—had to be flooded, and only half was left.
It is no use saying, "Take what is left." The mine closed three years ago, simply because no coal worth working remained. The man who made the decision, Mr. Lang, was promoted, and was awarded a decoration in the Queen's honours list. That is what has happened in the mining industry.
Here is a personal experience of mine. Before I came to the House, I was an engineer at Ellington colliery. A drift was driven into what is now the main area of working —a very profitable seam of coal. That drift was driven on the instructions of senior management, at an angle that everyone in the mine knew to be impossible. Everyone knew that it would not carry coal over the conveyor system. Nevertheless, the drift was driven.
Ordinary miners — not mining engineers with qualifications—recognised the problem; they had lived with such problems for countless years. But the drift was driven. When the coal seam was opened they could not get the coal out of the pit. They still cannot get it out. I would hesitate to say how many millions of pounds were spent on that exercise.
Mr. Dennis Skinner: My hon. Friend has cited an instance in his area. The point must be made, however, that that example could be repeated in almost every part of the British coalfields. In my area, in a place called Woolley West, two pits were closed at Pilsley, many years ago. It was decided to drift into Woolley West, a farming area where the seams basseted out. When they got

1099
in, they did some more calculations on the oil influx into this country, and were not altogether sure that they needed the coal from Woolley West. The management—not the miners—decided that they could close up the pit and said that it had a high sulphur content. So the word went around: Woolley West would not be exploited because it had a high sulphur content. That was a load of nonsense. They were just making sure that they did not provide the additional coal.
In almost every single year in which closures have taken place—my hon. Friend knows the industry well and will know this—that sort of sabotage has happened on a grand scale. Conservative Members should be responsible for some of the deficit grants; they are not very different from the Minister, who ran a computer system that went bankrupt.
Mr. Thompson: That was a useful intervention. [Interruption./ I am being serious. It endorsed the point that I am about to make.
What happened in Northumberland is another example of what my hon. Friend the Member for Bolsover (Mr. Skinner) has described. Just after the miners' dispute, there was a proposal to close Bates's colliery. It was recognised that 29 million tonnes of reserves were left in the area. The proposal went to the new independent inquiry, which came out in favour of keeping the colliery open. But the Coal Board—now British Coal—would not accept that, and it had to close. So there are 29 million tonnes of coal under the North sea that cannot be recovered unless we spend thousands of millions of pounds to do so.
This year, Ashington colliery in my constituency is to close on 25 March because its reserves are exhausted. The miners accept that they are. Would it not have been logical to keep open Bates's colliery, with its 29 million tonnes of reserves, and to close Ashington colliery, redeploying the Ashington men in Bates's to extract the coal? But that coal is now written off. Countless millions of tonnes of coal are being written off in this country—yet coal is one of our most valuable assets.
I suggest that the Minister consider other elements of what British Coal does, rather than condemning the mining unions and the miners for their activities. If the Minister has not yet visited a mine, I suggest that when he does, he spends more than the usual two hours underground to get the feel of mining. Perhaps he should try 12 months; that would give him a better understanding of the industry.
12.3 am
Mr. Bob Cryer: It is always useful to scrutinise affirmative orders when they involve expenditure, especially in view of Opposition suspicions that many of them pave the way for privatisation.
The order covers an increase in deficit grant from £100 million to £200 million. It will be interesting to learn from the Minister why the Government's policy of many years of supporting the coal industry by loans has changed. It is welcome that it has. It is an extremely useful development to have grant rather than loan aid, but loan aid poses the problem, when it comes to privatisation, of the accumulated loans of the enterprise, organisation or whatever the Government decide to call it.
I do not want to use the word "enterprise" too much, because I do not particularly endorse the enterprise culture. It is a rat race: it is every man or woman for
1100
himself or herself, and the devil take the hindmost. I do not accept the philosophy of greed and cheating that is behind the Tory enterprise culture, and that is why we query the idea of grants as opposed to loans.
I welcome grant assistance, but what is at the back of the Minister's mind? Will privatisation take place once the Government have closed enough pits, usually those which were prominent in the strike and which are well organised? That is the basis on which the closures are taking place. Closure decisions have nothing to do with coal reserves running out.
As has been said, pits were closed under a Labour Government. The miners have always recognised that a strong case can be made for closure where the reserves have diminished and the workings are uneconomic. In those circumstances the miners will accept the closure, but when they know that the seams have not been worked out and that there is no economic case for closure — this happens time after time — they reasonably resist management decisions for closure because they have seen the investment of hundreds of millions of pounds. That is why we are discussing the deficit grant order tonight.
Management has invested in the industry, yet the workers in the industry were not consulted about that investment. The workers' skill and ability are not brought into play in the running of the industry. Management must manage is the kind of echo that we hear in the industry. I can hear Conservative Back Benchers saying in their dulcet, posh tones, "Hear, hear."
Surely people have the right to contribute the ability and knowledge that they may acquire from spending all their working lives in an industry. It is wrong for some tinpot manager to make decisions without consulting the men. We must not forget that that is why we are considering the order about deficit grant-aid. Some of the managers' decisions have not been in the best interests of the industry, of the workers in the industry or of the communities in the industry.
What was the miners' strike about? It was not about pay, it was about jobs. It was about trying to keep jobs and communities going so that everyone could work together to maintain pits and produce coal to generate electricity and so provide energy for the nation.
Mr. Lofthouse: Does my hon. Friend agree that during a Labour Government's pit closure programme the deficit grant was used to provide new housing estates, establish new communities and find employment for miners? In the present circumstances, young men in the mining industry will never work again.
Mr. Cryer: My hon. Friend is quite right. When the Labour Government considered closures, there was relatively high employment when compared with the present position. Alternative jobs were available and, as my hon. Friend said, the Labour Government tried to plan facilities for an area and ensured that alternative jobs were available.
It is all very well for Conservative Members to talk about competition. All industry receives a massive subsidy from the dole queue. That is just a transfer payment. Instead of supporting industry with grant aid of one sort or another, the Government withdraw the grant aid and it is transferred to the Department of Employment in unemployment benefit payments. There is also a loss of tax revenue because people are not working. That is why we are considering the order tonight.

1101
I should be grateful if the Minister could tell us what is behind the order and the assistance that is being provided. Has there been some pressure for privatisation from hon. Members in the Tory ranks? After all, over the past few months we have witnessed a Cabinet Member resigning from the Cabinet and popping neatly on to the board of a recently privatised company. Rich pickings indeed. Now we have learnt that the electricity industry is to be privatised and that the right hon. Member for Chingford (Mr. Tebbit)—
Mr. Skinner: The skinhead.
Mr. Cryer: Yes, the skinhead. We have learnt that the right hon. Member for Chingford is to become an adviser to the chairman of British Aerospace. He is to be an honorary adviser, but it is a paid office. That is a peculiar position. British Aerospace is being given exclusive rights to negotiate for the purchase of the Rover Group. I have suggested—
Mr. David Shaw: On a point of order, Madam Deputy Speaker. Is the fact that my right hon. Friend the Member for Chingford (Mr. Tebbit) is a director of a company that has handed over the largest cheque to the taxpayer and the Exchequer in the history of the country relevant to the debate?
Madam Deputy Speaker: It would be a good idea, for the good order of the debate, if we returned to the order before us.
Mr. Cryer: I was just about to do that. I do not think that that was a point of order, and I am shocked that Conservative Members should abuse the procedures of the House to raise spurious points of order so that they can interrupt my speech. I want to return to the order before us.
We are talking about the deficit grant helping to provide a competitive position for the British coal industry. I want to receive the assurance of the Minister that the money is not being given so that the coal industry can compete against South African miners. If the Minister is talking about that sort of competition, he is talking about coal that has been produced by the blood of black miners who are exploited in South Africa.
I wonder whether the deficit grant is contributing in some way to the massive amount of money that we pay out as part of our membership of the Common Market. When we joined the Common Market we were told that there would be a large market for coal. The reality is that we sell tiny amounts of coal to the Common Market, but the Common Market imports coal from South Africa. I ask the Minister whether that is fair competition? I also ask the Minister whether the increase of £100 million to £200 million in deficit grant will be accompanied by a clear declaration from the Government that they will intervene in imports from the Common Market of South African or other cheap source coal, which is imported to the Common Market and then brought across to the United Kingdom.
Mr. Andy Stewart rose—
Mr. Cryer: I shall give way to the farmer on the Tory Back Benches.
Mr. Stewart: I have been listening to the hon. Gentleman's argument. He was talking about importing
1102
South African coal. Can he tell us exactly how many tonnes of South African coal were imported into the United Kingdom in the past 12 months, and at what price it was delivered at the docks?
Madam Deputy Speaker: Order. That might be a most interesting question, but it does not relate to the debate.
Mr. Cryer: I am willing to engage in such arguments, but I am prepared to take your guidance, Madam Deputy Speaker. I accept your strictures because I am not willing to go outside the rules of the Chair. The Chair has provided useful and helpful guidance so far tonight.
The deficit grant is an important means of keeping the Coal Board buoyant. However, because of the hierarchical structure of the coal industry, the responsibility for that is currently in the hands of the management. The management has not been working very well recently, because it has lurched from confrontation to confrontation, which it has engineered at the behest of the Government. I want an assurance from the Government that none of this money will be used to give preferential treatment to the Union of Democratic Mineworkers and that the National Union of Mineworkers will not be discriminated against, as has been the NCB's policy over many months. That policy has been followed often at considerable cost, and part of it is reflected in the money announced in the order.
Mr. Redmond: On the point about the treatment of the NUM versus the UDM, does my hon. Friend agree that, because the NUM membership was deliberately provoked into taking industrial action, which provocation must obviously have been condoned by the Government, the NCB has had to come back for a doubling of the original £100 million?
Mr. Cryer: There is much substance in my hon. Friend's comments. This extra £100 million goes, not to the miners, but to the management for use in its decisions. Some managers who have been in the industry a long time, who cherish it and do not want it damaged or destroyed, will want to resist the Government's pressures. The Government are trying to destroy the NUM. They have failed and they will continue to fail, but they spent a great deal of money — £6 billion — in their last attempt at confrontation with the NUM. Since their failure they have been trying by every means within their power to erode the NUM's negotiatiing rights and position. I want an assurance that this money is not earmarked in any way for further damage to industrial relations.
The mining industry is a dangerous industry in which it is hard to work. It has overcome its many difficulties with a minimal loss of working hours through strike action. I would wager that more days have been lost through industrial injury than through strike action. Can the Minister assure me that part of this extra money will be used to maintain high safety standards of the kind that have impressed Labour Members? Many of my hon. Friends, a number of whom are here, have worked in the mining industry in those safe conditions which are expected as a right. This can be compared with the situation in other countries; for example, in South Africa, where working standards are frequently appalling and certainly well below those that prevail in the United Kingdom mining industry.
I hope that the Minister can assure me that the Coal Board will spend this money positively, in maintaining

1103
standards of health and safety at work, and that the Department of Employment will not seek to lower standards by the use of codes of practice instead of absolute statutory provisions as laid down in the Mines and Quarries Act 1954.
Mr. Jack Thompson: Does my hon. Friend recognise that the pit deputies' role with regard to safety is important? The idea that has been floated to remove that responsibility from the deputies is dangerous.
Mr. Cryer: I was going to mention that, because the Union of Democratic Mineworkers has attempted to erode safety standards in the pits by the offer virtually to take over from the deputies. [Interruption.] My hon. Friends support my claim, which has been clearly reported. I am merely seeking an assurance from the Minister that the money involved in the order will be used to maintain existing safety standards. Deputies are responsible for operating safety standards and carrying out safety work, but safety is everyone's responsibility.
If the management behaves well towards the employees and takes them into its confidence, and if there are proper negotiations at every level throughout the mining industry, that breeds confidence and improves the level of safety work. Conflict is diminished and, therefore, the number of accidents that take place because people are drawn aside is reduced. The workers' safety watch may be diminished because of the pressure for negotiations. If those are kept to a minimum, safety can become a priority watchword, as it has been for many years in the industry. There has been an attempt to undermine the established safety position and the position of the deputies by a so-called union, which is in fact a company union, very much like the Spencer union during the inter-war years. [Interruption.]
Despite the interruptions by Conservative Members who are trying to undermine the constitution of this place and wreck the scheme of parliamentary discussion, I am still prepared to say that Opposition Members cherish the system of safety in the coal industry. We want to ensure that the money is used for that purpose and to build up the industry, not to damage industrial relations.
We cannot hope for real developments and security for the mining industry until we have a Labour Government reasserting decent industrial relations. [Interruption.] We recognise the value and importance of the contribution of working men and women.
Dr. Michael Clark: If the hon. Gentleman believes that a Labour Government would be so helpful and beneficial to the coal mining communities, why does he think that at the last general election so many coal mining communities voted Conservative?
Mr. Cryer: Not many mining communities voted Conservative. I often wish that the constituencies of Keighley and Bradford, South had a few drift mines open. They would be very handy.
If miners and their families had come to the House to listen to the debate, they would have seen the sorts of interjections made by Conservative Members. Not many miners go out in a dinner suit to the club to relax. That typifies the snobby, lofty attitude of the Tories towards this basic and important industry.
I would have concluded my remarks by now had it not been for the continuous interruptions. If I continue to be
1104
interrupted, I may have to start all over again to make sure that my remarks are on the record, as Hansard will have had a great number of difficulties.
We need a Labour Government to ensure that we have a decent coal mining industry linked to a publicly owned and controlled electricity generating industry. When we have a Labour Government, the spivvery that is selling off the CEGB and the SSEB will be brought to an end. We shall take those industries back into public ownership, working with a coal industry that is under workers' control, with a decent future for both the workers and the communities around them.
12.24 am
Mr. Dennis Skinner: I am pleased that my hon. Friend the Member for Bradford, South (Mr. Cryer) referred to the UDM and NACODS. However, he did not mention that the UDM members have threatened to take on the jobs of the deputies when the same bosses' union said, during the strike, that its members were departing from the NUM and going through the picket lines because there had not been a ballot. NACODS had a ballot, and the same people still scabbed. No doubt my hon. Friend would have dealt with that point had he had more time to speak.
So far, there has not been much reference to the 250-odd sacked miners. I want to know whether any of this additional money will be used to give them a fair crack of the whip. It is now almost three years since the end of the strike and those 250 remain without a job. The Secretary of State got his job back, and it is high time that he had the decency and the morality to start negotiations in every coalfield, using some of this money if necessary, to make sure that every one of those miners gets his job back.
The Government keep saying that nobody has been forced out compulsorily, but some people have. If the Government mean what they say, why do they not use some of this money to give those people their jobs back this year?
Mr. Redmond: My hon. Friend is making an important point. There is no doubt that the vast majority of these people were sacked simply because someone said, "He hit me," or, "They shouted out a nasty word." They have lost their livelihoods, and if we are to get back to good industrial relations, to avoid the problem of coming back here this late at night and asking for additional taxpayers' money, should not the coal board go to the Advisory, Conciliation and Arbitration Service to learn about industrial relations?
Mr. Skinner: My hon. Friend, who is well versed in these matters, and has been, along with his colleagues in the miners' parliamentary group, doing a sterling job in making representations at all levels to ensure that these matters are dealt with properly, is right to say that in front of the Minister. Ministers have influence, although it might be marginal in some cases, and could use it. They are always on about flexible working for miners. All the miners who have been sacked would like a chance to get back to work to ensure that productivity is increased.
We hear that there has been a 60 per cent. increase in productivity. How much of the extra £100 million will go in the form of extra wages? if the miners have increased productivity by 60 per cent., why are the NUM men not

1105
even allowed the 4·2 per cent. increase that has been allocated to the UDM? How much of this money should be allocated?
Mr. Geoffrey Lofthouse: Is it not a fact, and does my hon. Friend not agree with me, that miners are probably the only people in the country to be charged in a court, found to be innocent and then have the court pass judgment on them even though they had been found innocent?
Mr. Skinner: Yes. Would it not be a tidy state of affairs if hon. Members or people from the other place were treated in that fashion? There would be an outcry if it happened to somebody, let us say, from the City of London, who got his finger in the pie, like some of those in the Guinness affair. If Mr. Saunders, one of these leading Tories, or one of the others got off in court, would there not be an outcry if someone tried to suggest that they should be victims of double jeopardy, that they should be dealt with twice over?
Mr. Richard Ryder: What about Kagan?
Mr. Skinner: The hon. Gentleman keeps referring to Lord Kagan. I do not know whether he wants to say that outside or not, but I will tell him this: I hold no brief for Lord Kagan. As far as I am concerned, if people are accountable to to others—not that he is, because he has never been elected—if they are in a position of trust and if they do something wrong and get their money mixed up—as some Tories have in their time—they must take the rap. That rule applies to anybody.
It also applies in respect of these grants. If there are some people in the Common Market who are fiddling, as we shall hear in the next debate—to which I will not refer—to the extent of £2 million—worth of fraud, they should be surcharged. Why should it only be the Lambeth and the Liverpool and the Clay Cross councillors? So if the hon. Gentleman wants justice for Lord Kagan, why does he not deal it out to those of his friends among the Tories who are lining their pockets right, left and centre?
Mr. Ryder: Name them.
Mr. Skinner: Does the hon. Gentleman want me to name them? That will not be a big job.
Madam Deputy Speaker: Order. If the hon. Member for Mid-Norfolk (Mr. Ryder) has anything to say, will he speak in an intervention, so that we can have it recorded in the Official Report? Mr. Skinner.
Mr. Skinner: There was one called Maudling. Does the hon. Gentleman want me to go any further? There is a whole gang of them.
Madam Deputy Speaker: Order. I must refer the hon. Gentleman to the order that is before us. Perhaps he will not deal with personalities but with the principle of the order.
Mr. Cryer: On a point of order, Madam Deputy Speaker. May I draw your attention to the fact that the Whip on the Conservative Benches, who is supposed to help conduct the place by example, has been bellowing out all the time that my hon. Friend the Member for Bolsover (Mr. Skinner) has been trying to conduct a serious debate about a serious issue?
Madam Deputy Speaker: Mr. Skinner.
Mr. Skinner: Somebody referred, when my hon. Friend was speaking, to the question of closed pits, something which I opposed no matter which Government were in power — it is all there on record. There was some reference to the fact that grants and loans used to be made at such times to try to find alternative employment. I remember being involved at the time of the Labour Government, before I became a Member of Parliament, in getting intermediate area status for the area of north Derbyshire which I now represent. In order to try to combat the losses of work in the mining areas, we set up the intermediate area status. This Government, who are always talking about jobs and what the Labour Government did, got rid of the intermediate status. It was one of the first things that they did. So not only are they concerned about shutting pits, with all the grants and all this, that and the other; they also get rid of any opportunities there might be for other jobs as well.
Mr. Redmond: Would my hon. Friend agree with me that there would be no need for the Government to be here tonight, seeking to double the deficit grant, if British Coal set its own house in order? British Coal says that, as a result of the overtime ban, it has made extra tonnage and extra profits. Bearing in mind that an overtime ban tends to reduce the overheads of the industry, ought not British Coal to be thanking the union for introducing an overtime ban, which is, in effect, helping to reduce the deficit grant that it is seeking? If that is the case, would my hon. Friend agree that, because of all this help that British Coal is getting from the National Union of Mineworkers, it really ought to pay the wages that are outstanding?
Mr. Skinner: It is one of the scandals of the past few years since the strike. The NUM has by far the greatest membership and is represented by my hon. Friend and many of us who have mining constituencies — [HON. MEMBERS: "Where are they?"]. Many of them are here tonight. Throughout the debate more than 20 representatives from mining areas have been present. Let us place it on record that during the debate there have sometimes been only two or three hon. Members on the Tory Benches.
Mr. David Shaw: The hon. Gentleman was not here.
Mr. Skinner: I am not taking any lectures from the bald eagle. I can manage without that. We are talking about the deficit grant. It is my job to keep in order. I know that it is important to stick to the order, never mind what the hon. Gentleman has to say.
At the beginning of the first debate the Minister talked about £9,000 million. He did not say that some of that consisted of loans. Compare that to what the farmers receive. None of that is loans. That is all dead money. That is the distinction we have to make when the Minister talks about money.
I was referring to alternative employment. [Interruption.] You do not have to be Pythagoras to work out that some of the £9,000 million to which the Minister referred includes loans. Not all of it is dead money, stretching over the period since 1979. However, the money that goes to farmers through the agricultural policy, whether in Britain, in West Germany or anywhere else, is all dead money. It is taxpayers' money and it is a straightforward subsidy. Some of that £9,000 million

1107
consists of loans that hang like an albatross around the neck of the coal mining industry. That distinction must always be made.
The Government now have another cock-eyed scheme. They do not need deficit grants. They have introduced a set-aside scheme which will allow land to lie fallow, and farmers will be paid £150 an acre for not using it. Imagine what would happen if we had a deficit grant system in which we said that we would not work a coal seam under the sea and that we would let it lie fallow and pay the miners £150 a week for doing nothing. There would be such an outcry if we had fallow coal seams similar to the schemes that are proposed by the Common Market. All the Tory press would be talking about the coal seams that were not producing coal, yet the Government can find all sorts of cock-eyed systems to provide subsidies for the people they support.
We want to make sure that the deficit grants will go to those who create wealth in the industry, who produce the coal on the pit top and elsewhere.
Mr. Michael Spicer: I shall put the hon. Gentleman right and tell him that every penny of that £9·5 billion is a grant. Perhaps the hon. Gentleman's logic is as bad as his facts.
Mr. Skinner: The Minister is not well known for getting his facts right. He introduced a system for all the Tory constituency parties to link up with a computer. The Minister's figures were so bad that the company went bankrupt and all the Tory constituency parties ran out of floppy disks. The most incredible thing arising out of all that mess is that somehow or other the Minister managed to escape from underneath and the Prime Minister gave him the tinpot job to wreck the coal industry, and now we know why.
My final point, Madam Deputy Speaker, will touch your heart. There are a few thousand widows in the coal mining communities who are still waiting for concessionary coal. They are the pre-1968 widows. A few retired miners are also waiting for concessionary coal. Before 1968, those people did not get concessionary coal and they did not receive money in lieu. For a few hundred people in the Lancashire coalfield and in the north-east and for a considerable number of people in my constituency and in other areas in Derbyshire there was no proper redundancy agreement and no concessionary coal agreement. Some of those people are over 80.
Why are the Government unable to devise a scheme that would provide them with about 5 tonnes of coal a year to compensate them for the many years when wages were extremely low? In some cases, their husbands worked for 50 years but never had the benefit of a cob of coal. Some of these management people pick up £100,000 when they are made redundant and then start a drift mine somewhere else. They pick up £100,000 of taxpayers' money from the deficit grants that were made in years gone by and then make a small fortune on the side.
My hon. Friend the Member for Don Valley (Mr. Redmond) has been to Hobart house today to make representations on behalf of miners. They get concessionary coal, yet these few hundred people—
Mr. Redmond: I hope that the Minister will not say that elderly people cannot receive a concession from this Government or from the Coal Board. It appears that there
1108
is no compassion in the coal board. It says that the agreements are sacrosanct. It shows no compassion for this small group of people.
The Minister ought to ensure that these people are taken care of. He ought to issue a directive to the Coal Board that would ensure that widows and pensioners in their twilight years are provided with comfort and warmth.
Mr. Skinner: I do not know whether you heard all that, Mr. Deputy Speaker, because you have just come to the Chair. I shall not repeat what my hon. Friend has just said, but if this Government had any decency, they would resolve the matter.
The Coal Board has a get-tough policy on subsidence. It refuses to pay subsidence compensation for all the houses that are tumbling down. It is a scandal. My hon. Friend the Member for Mansfield (Mr. Meale) has some of those houses in his constituency and he has introduced two Bills on the subject. Additional deficit grant money ought to be made available so that the people who live in those houses can be given proper subsidence payments.
Mr. Lofthouse: Does my hon. Friend agree that there are other categories of aged people, miners' widows in their 80s and older, who are unable to leave their threebedroomed council houses to go into local authority sheltered schemes because they would lose their cash in lieu of fuel allowances? Does not he think that some of this money should be used to protect those people?
Mr. Skinner: My hon. Friend is right. He has referred to that before in these debates. It is important to keep bringing it to the attention of the Government. At a time when they intend to hammer those at the bottom of the scale through social fund payments — we will have a campaign about that tomorrow — they also intend to attack people in coalfield areas by preventing them from getting what is due to them. The same is true of the subsidence payments. It is a scandal that the Government have stopped making the payments—
Mr. Alan Meale rose—
Mr. Skinner: My hon. Friend wants to get in—
Mr. Patrick McLoughlin: On a point of order, Mr. Deputy Speaker. Is it in order for an hon. Member to give way to another hon. Member who has been absent from the debate for 2 hours 45 minutes when other hon. Members have been waiting to make a contribution? The debate had been going on for 2 hours 45 minutes before the hon. Member for Mansfield (Mr. Meale) came into the Chamber.
Mr. Redmond: Further to that point of order, Mr. Deputy Speaker. Unlike you, I have been in the Chamber throughout the debate on the two orders. Is it in order for an hon. Member to make a point of order about hon. Members seeking to speak when the hon. Member in question—the hon. Member for Derbyshire, West (Mr. McLoughlin)—has not sought once to catch your eye? May I ask you whether that is in order?
Mr. Deputy Speaker (Sir Paul Dean): There is less than a quarter of an hour to go in the debate and the House has not yet had a response from the Minister. I therefore think it would be better if hon. Members got on with the debate.
Mr. Skinner: I have been trying to make haste. I have been trying to get through a compendium of points about the order. My hon. Friend the Member for Mansfield, who

1109
has been trying to introduce two Bills to bring relief to people who have had to put up with all the miseries of subsidence, wants to intervene to make a small point.
Mr. Meale: I thank my hon. Friend. The Minister is aware that I have two Bills listed for debate in the House. Is he aware that thousands of properties in the north Nottinghamshire and Yorkshire areas are affected and that there has been no action by the Coal Board to try to relieve the problem? Is he aware that the common system used to try to avoid handling the cases is to send letters to Members of Parliament saying that the matter is sub judice because it is in the hands of the agents? Is he aware that the Coal Board says that it cannot handle the cases even though they have not entered court? Is it not a disgrace and is it not time the Coal Board put the matter right?
Mr. Skinner: These debates provide a wonderful opportunity for hon. Members to make these points.
I want to deal with another very important matter before I conclude. It has had some publicity and I think that it needs more. I am worried that some of the additional £100 million grant may finish up with British Coal Enterprise Ltd. which is a bogus laundering organisation. It is a front organisation for a few people who are conning their way around the coalfield areas by saying that they will provide jobs.
We decided to investigate the matter. We heard the Prime Minister say in the House that British Coal Enterprise Ltd. which was set up during the strike with £30 million of taxpayers' money, a straightforward subsidy, had provided 18,000 job opportunities. She did not say jobs but job opportunities. We wondered where they were.
I asked my hon. Friends the Members for Pontefract and Castleford (Mr. Lofthouse) and Barnsley, West and Penistone (Mr. McKay); I asked others of my hon. Friends from Wales, the north-east and Nottinghamshire. None of us could find the jobs that were supposed to have been provided. We could not find 18, never mind 18,000.
Being a little curious and cynical and sceptical, I put two and two together and decided to invite the director of British Coal Enterprise Ltd, to the House. He hot-footed it over here in a crack. I invited him in my capacity as the chairman of the east midlands group of Members. He thought to himself, "Hello. Here's another gravy train I can jump on. I bet the east midlands group will want to invite me up to the east midlands so that I can con all the local authorities in the area about how I am spending this £30 million on jobs." Little did he know that I was the chairman. When he arrived we asked him to enumerate the jobs provided in each constituency.
Dr. Michael Clark rose—
Mr. Skinner: There is a penguin on his feet.
Dr. Clark: On a point of order, Mr. Deputy Speaker. The hon. Gentleman has asked the Minister a number of questions, which he hopes the Minister will answer. I wonder whether you, Sir, can advise us how the Minister can answer all the questions that have been asked if he does not have time to say a few words at the end of the debate.
Mr. Deputy Speaker: All that I can do is remind the House that the debate must end in 10 minutes' time.
Mr. Cryer: Further to the point of order, Mr. Deputy Speaker. Is it in order for the hon. Member for Rochford (Dr. Clark) to raise a point of order about ordinary working men and women and their families when he is wearing a dinner suit? It offends every standard of decency.
Mr. Deputy Speaker: I think that we had better get on with the debate.
Mr. Skinner: Some people might say that it was kinky dress. It is different; there is no doubt about that. [HON. MEMBERS: "At least he's got more than one suit." He may have more money, but that does not make him any better.
We were discussing a very important point about backhanders — people using taxpayers' money, on the face of it to provide jobs, but in reality only to con people. We asked for a list of jobs in every constituency in the mining areas of Britain. Mr. Merrik Spanton, ex-Nottinghamshire coal board, refused to give those figures. One of my hon. Friends said, "I've got four," and others of my hon. Friends knew of two or three. But we could not find the jobs. When we asked the director to put the figures in the Library, he refused. We are talking about handing out public money. Will any of the money find its way to Merrik Spanton's British Coal Enterprise?
Mr. Jack Thompson: Is my hon. Friend aware that following his confrontation with representatives of British Coal Enterprise, they have now refused to meet the northern group of Members?
Mr. Skinner: Once bitten, twice shy. He probably thinks, "If I go to the northern group I shall be asked the same very awkward questions that I was asked at the east midlands group." What he did not realise was that I had imported some Yorkshire group members into the east midlands group meeting. He said that the jobs were not in the east midlands but in Yorkshire. Then my Yorkshire colleagues pounced. That is why he did not go to the northern group. He was running out of territory. He now says, "Well, most of them are in Scotland and Wales," but my hon. Friends from Scotland and Wales do not know where they are.
This is a serious matter. We are talking about £30 million. The Prime Minister often talks about taxpayers' money. "Remember, the taxpayer is your next-door neighbour," she says, but £30 million of taxpayers' money has been spent and we can find no more than a handful of jobs created.
We tested British Coal Enterprise further. My colleagues and I concluded that it was laying claim to jobs that were being created by the Scottish Development Agency and the Welsh Development Agency. We were told, "We had an input."
That £30 million is one long gravy train stretching right across the coalfields of Britain, touting its way from one area to another, masquerading as a provider of jobs for people who have been thrown out of work in the coalfields when the jobs that have been created — there are certainly not enough of them — have actually been created by local authorities, by the Scottish and Welsh Development Agencies and by other development bodies.
I hope that no more money will be going to Mr. Merrik Spanton and his merry men.
Mr. Andy Stewart: And ladies.
Mr. Skinner: We did not meet any, but there may well be some. It is a very sinister operation.
We told Mr. Merrik Spanton that if £30 million had been used in that way by a Labour local authority there would have been surcharges, Tory Members of Parliament would have been asking questions every day and the Tory press would have been running horror stories about it, but, because these people are friends of the Government and the Prime Minister, nothing is done about it. In a few minutes' time we shall be talking about fraud on a massive scale in the Common Market. Here we have something akin to that in British Coal Enterprise Limited and it is time that it was sussed out. It is conceivable that it will be investigated by a Committee of this House.
Plenty of things could be done with £100 million, but I return to my original point about the 250 sacked miners who have been waiting three years to get their jobs back. It is time the Minister got together with people in the coalfields and gave those people a chance to work again. It is time he showed a little humanity for a change. Instead of always concerning themselves with their own people, the Government should be doing something about those 250 miners. If some of the extra money is used to find those people jobs in Scotland, in Yorkshire, in the north-east and everywhere else, this debate will have been useful.
12.57 am
Mr. Michael Spicer: I have been left three minutes to sum up three hours of debate and questioning. Needless to say, I cannot possibly answer all the questions that have been raised.
The hon. Member for Bradford, South (Mr. Cryer) seem to see the deficit grant as some great capitalist plot against the coal industry. His hon. Friend the Member for Don Valley (Mr. Redmond) went perhaps not further but down a slightly different track. He was suspicious and sceptical about the amount of money being spent. It is
1112
reasonable for any Member of Parliament to be worried when the Government ask for more money, so the hon. Gentleman has taken a very honourable position. I assure him that the intention is that the coal industry should break even next year, so this will be the last occasion on which we shall have to make this kind of request on its behalf.
One of the reasons why we are confident that the industry is capable of standing on its own feet—
Mr. Redmond: Will the Minister give way?
Mr. Spicer: The hon. Gentleman will appreciate that I cannot give way.
The hon. Member for Midlothian (Mr. Eadie) discussed the question of imports very thoroughly and many other hon. Members mentioned the assumed contract currently under dispute between British Coal and the South of Scotland electricity board.
I agree with the hon Member for Midlothian that the cards are by no means stacked against the British coal industry. Long-term contracts will be hard to establish, and there are no facilities for large-scale imports, but—this is fundamental to what we have been saying tonight—the industry has a great future, or we would not be putting the amounts of money behind it that we are. We have confidence in the industry, but every Labour Member seemed to imply that it was not capable of standing on its own feet. We are the friends of the industry. We are putting more money behind it than ever before.
It being one and a half hours after the commencement of proceedings on the motion, MR. DEPUTY SPEAKER put the Question, pursuant to Standing Order No. 14 (Exempted Business)
Question agreed to
Resolved,
That the draft Coal Industry (Limit on Deficit Grants) Order 1988, which was laid before this House on 8th February, be approved.

European Court of Auditors
[Relevant documents: European Community documents Nos. 9392/87 on the fight against fraud affecting the Community budget, 9130/87, Court of Auditors' special report No. 2/87 on the quota/additional levy system in the milk sector and the unnumbered explanatory memorandum submitted by the Ministry of Agriculture, Fisheries and Food on 4 December 1987 concerning Court of Auditors' special report No. 4/87 on Community wine distillation schemes.]
1 am
The Paymaster General (Mr. Peter Brooke): I beg to move,
That this House takes note of the Annual Report of the European Court of Auditors on the financial year 1986, together with the replies of the Institutions; and approves the Government's continued efforts to press for effective Budget discipline and proper financial control of Community expenditure.
Mr. Deputy Speaker (Sir Paul Dean): I must inform the House that Mr. Speaker has not selected the amendment tabled in the name of the hon. Member for Vauxhall (Mr. Holland), but it is in order to canvass it during the debate.
Mr. Brooke: The annual report of the Court of Auditors provides an invaluable opportunity for the House, and the Community more generally, to consider the effectiveness with which the Community manages and controls the very substantial resources at its disposal.
Our debate this year takes place in the light of the wide-ranging agreement on the future financing of the Community that was reached at the Brussels European Council. I am sure that the House will bear that in mind in its scrutiny of the report, which concerns the implementation of the budget in 1986.
A great deal has changed since 1986. What has not changed, however, is the important contribution to our deliberations on all Community matters that is made by the Select Committee on European Legislation. I pay tribute to its work, which is exemplified by its lucid and helpful report on the Court of Auditors' report.
The court's role is to examine the legality and regularity of Community receipts and expenditure, and to assess the management and effectiveness of the Community budget. The annual report is the basis on which the European Parliament decides whether to grant a discharge to the commission for its implementation of the Community budget, as described in the explanatory memorandum that I submitted to the House on 25 January.
The European Parliament takes account of, but is not bound by, the discharge recommendation of the Council of Ministers. The Council, in turn, bases its recommendation on the report of its budget committee, which is prepared after thorough discussions throughout January and February each year. The Economic and Finance Council will be discussing the court's report next Monday, 7 March. Tonight's debate will help to determine the Government's position for that Council, where I shall represent the United Kingdom.
I will have the benefit at the Council of the insights gained from an instructive and valuable visit that I paid to the European Court of Auditors a month ago. In the course of that visit, I expressed my strong support for the court's increasing efforts to tackle fraud. I emphasised the contribution that the court can make on the subject of
1114
value for money in the Community budget. I was struck by the range and complexity of the court's task, but I came away with a clear impression of the court's strong sense of independence and determination to execute its role.
As to the contents of the 1986 report, I propose to concentrate on a number of the most important issues identified by the court. They are the imbalance between expenditure and revenue, the excessive growth of agricultural expenditure, the burden of the past, budget management, and fraud. I shall also touch on spending on aid from the European development fund and the Community's food aid programme.
First, the court says that in 1986, for the third year running, there was an imbalance between expenditure and revenue. On the court's analysis, that imbalance, which it believes lies at the heart of the Community's financial difficulties, had two causes: first, the failure of the 1984 budget discipline conclusions to controlexpenditure—above all, agricultural expenditure — and, secondly, a revenue ceiling which, the court believes, was artificial and which took insufficient account of the Community's financing needs.
The Government fully share the court's concern about the control of expenditure, but we believe there may be an inconsistency in its attitude to the ceiling on resources. It would not have solved the Community's problems to have simply increased the own resources ceiling to accommodate accelerating expenditure. That would have led to the Community's finances running completely out of control. It is why, in the recent negotiations on future financing, the Government insisted that, before there could be any agreement to increase Community resources, there had to be a new, binding system of budget discipline combined with effective policy instruments. It was only because we are able to secure the necessary reforms that we felt it right to agree to an increase in the Community's resources.
The court says that, because of almost unlimited and automatic support for prices, the growth of agricultural spending outstripped Community resources. The court fears that this will continue to be the case, particularly in view of the mountains of surplus produce waiting to be depreciated or disposed of. The court appeals to the budgetary authority to start providing for depreciation in the 1988 budget.
Those strictures about agricultural expenditure were, of course, absolutely appropriate in the context of the 1986 budget, and the same criticisms could be made about the situation in 1987. But we now have the machinery to ensure that, from this year onward, things will begin to change. That machinery has four main components: first, a legally binding guideline on agricultural guarantee expenditure, which will henceforth grow more slowly than Community GNP; secondly, automatic stabilisers in all the main product regimes, under which cuts in support prices for the main commodities will be automatically imposed if production exceeds predetermined levels; thirdly, specific budgetary provision — outside the guideline—to finance the disposal of outstanding stocks; and fourthly, agreement that new stocks will be systematically depreciated when they are established.
The main message from all this, in terms of the Court of Auditors' specific concerns, are that the days of automatic and unlimited price support are over, and that the Community is prepared at long last to adopt a coherent accountancy system for stock depreciation.

1115
Next, there is the question of the Community's outstanding liabilities. Following criticisms made in the court's 1985 report, the Commission adopted an improved presentation of the position in 1986, which showed that outstanding liabilities and potential expenditure had grown from 20 billion ecu in 1985 to 34 billion ecu in 1986 — on the Commission's reckoning. That is indeed a worrying statistic, but it requires closer analysis.
Only 40 per cent. of that total reflects outstanding legal commitments. Around 20 per cent. represents the costs associated with agricultural stocks, which I have already discussed. The remainder is potential expenditure on programmes such as R and D and the structural funds, for which commitments are inevitably entered into some time before the associated payments fall due. It is not therefore very meaningful to aggregate the various liabilities into a single figure. Some may never come to fruition; others are a natural result of multi-annual programme planning; others again are simply the result of ensuring that money is not spent earlier than necessary.
It is none the less vital to avoid any recurrence of the major imbalance between commitments and payments that was allowed to build up in the early 1980s, and whose correction contributed to the big rise in non-compulsory expenditure in the 1986 budget, Here, too, the European Council agreed important reforms for which the Government had been pressing. First, a ceiling has been placed on the overall level of commitment appropriations. Secondly, unused appropriations will no longer be automatically carried over from one year to the next. Thirdly, moribund commitments will be cancelled, other than in tightly defined circumstances.
The reforms will also help to improve the transparency of the Community budget, by bringing about a closer identification between what is actually spent in any given year and the level of budgetary provision for that year. The need for transparency and annuality has rightly been emphasised by the court over the years. The report before us draws particular attention to the so-called "negative reserve". This expedient, first introduced in 1986, is a device which, in the last couple of years, threatened to get out of hand. It is especially gratifying that, at the United Kingdom's instigation, the European Council has now agreed to impose a limit of 200 mecu on the level of any such reserve.
Turning to the important issue of fraud, the Government welcome the initiative shown by the court in devoting a whole chapter of its annual report to this question. The chapter looks at the two main areas of fraud and irregularity — the collection of traditional own resources and agricultural guarantee payments. The court is concerned at the low level of reporting of irregularities by member states. On traditional own resources, reporting is scanty, unsystematic and irregular. The pattern of reporting on agricultural fraud is better but still variable. The court says that only 311 cases, involving about £20 million, were reported in 1986. It observes that the Commission was unable to ensure that all member states had reliable systems for notifying fraud and irregularities. The court proposes a number of reforms, including the setting up of a co-ordinating unit in the Commission and more systematic monitoring of member states' performance in the fight against fraud.
The Goverment fully share the court's concern, the timeliness of which was recently underlined by, among other things, the "Panorama" programme's vivid report
1116
on CAP fraud. The United Kingdom is committed to the fight against fraud, whether in this country or in other member states. My right hon. Friend the Minister of Agriculture, Fisheries and Food stressed that point at the Agriculture Council last month. It should be noted that the court does not challenge the fundamental principle that member states are, and must remain, the first line of defence against fraud. Only they have the necessary powers and resources. The Commission is responsible for checking that member states have adequate arrangements.
It is important that the Commission should make maximum use of the powers at its disposal, and the Government are ready to consider sympathetically any cost-effective proposals which the Commission may make for new or enhanced powers to improve co-operation, monitoring, reporting or compliance. We welcome the fact that, as recommended by the Court of Auditors and described in the explanatory memorandum which I submitted to the House on 29 January, the Commission has decided to set up a new unit to co-ordinate anti-fraud activities. We shall take a particularly close interest in the unit's role and performance.
Hon. Members will be aware that other, more radical proposals for combating fraud have been made. For example, the court suggests that the Commission should be allowed to intervene as plaintiff in national cases, and the European Parliament's budgetary control committee, which has contributed a great deal to our understanding of the problem of fraud, has proposed so-called flying squads of Commission inspectors, with powers of entry and search in member states. Such proposals pose important questions about the point at which to draw the boundary between Community competence and national independence. Our debate will no doubt be enlivened by comments on that issue from all parts of the House.
The court also looks at the European development fund. No evidence of widespread or serious mismanagement is uncovered, but there are a number of recommendations for improvements. In many cases, however, the Commission has replied that reforms have already been, or are about to be, introduced. I believe that the court could play a more valuable role if it were able to identify areas, particularly in the Commission's aid management systems, in which reforms might lead to improvements in the effectiveness of the aid being provided.
On food aid, the annual report brings out the need for improved co-ordination between donors and better assessments of food aid requirements. The court also dealt with food aid in some detail in a special report issued in August 1987, which severely criticised the performance in 1981–85. Most of the shortcomings indentified were corrected in the 1986 policy regulation agreed under the United Kingdom Presidency, or the subsequent Commission regulation on purchase and shipment. These new regulations have led to substantial improvements.
In conclusion, the Government share much of the Court of Auditors' concern about the management of the Community budget in 1986. We shall continue to press for the application to the Community's finances of the same discipline and standards as we apply to national public expenditure. The reforms agreed at the Brussels European Council represent an important. step in this direction. The court can feel justifiably proud that those reforms directly

1117
address so many of its recent preoccupations. I therefore commend the report to the House and look forward to hearing the views of hon. Members.
1.14 am
Mr. Stuart Holland: While wishing to give credence to the seriousness with which the Government treat these issues of accountability in the use of public funds in the private sector in the Community, I must say that we are struck by the timing of the debate. At 1.15 am, after two orders, it is hardly likely or feasible for hon. Members to be present for the debate, because many of them must be in Committee or have other commitments in the House tomorrow. This debate should take place in prime time rather than in the early morning.
The Paymaster General referred to the Government's commitment to gaining reductions in agricultural spending, and to the failure of the system set up at Fontainebleau. It is worth drawing to the attention of the House just what a failure that was. Agricultural spending has increased by two and a half times since Fontainebleau, despite the fact that we were assured that over-spending would be controlled.
We support the case for stabilisers, and we are aware of the way in which they should work, but we do that very much in the way that Mr. Giscard d'Estaing once supported General de Gaulle by saying: "Yes, but." The "but" is that there is a strong case for production limits. There is now a strong case in the Community for applying the kind of deficiency payment system that obtained in this country before we joined the European Community.
At the time of the signing of the Rome treaty in 1957, one in four of the working population of the Community were employed in agriculture. The argument then was that there were so many farms and small units in agriculture that the application of a production limits system on the deficiency payments basis simply would not be administratively feasible and the costs would exceed the benefits. However, that is no longer the case. The total working population in agriculture in the original six members of the Community is now down to about 5 per cent. For the Community of 10, before the accession of the Mediterranean countries, the figure is about 7 or 7.5 per cent. It is now entirely feasible to apply a deficiency payments system in the Community. We believe that that relates to the kind of analysis that the Court of Auditors has made of the social and regional funds.
Without elaborating on the point in great detail, the agricultural budget for 1986 amounted to precisely two thirds of Community spending, while the regional fund accounted for only 7.6 per cent. of total spending. If we are to get the kind of reform that will allow us to tackle over-spend properly, and if besides we can get a benefit for the consumer through lower prices — and overwhelmingly more than nine tenths of the population in the Community are now urban consumers — we should recommend that the Government urge in the Community that prices be lowered and that the level of production grants be related to the size of fund.
Many people on a five to 20 hectare farm in a family self-employed operation enjoy a decent standard of living, and many enjoy a standard of living equivalent to that of workers in industry. But others do not enjoy such a
1118
standard of living. The average age of the farming community has risen and in many cases is between 55 and 60—close to retirement age.
There is a case for shifting resources from the agricultural fund to the social and regional funds, as that would allow us to avoid causing such a report from the auditors, which has stressed the overrun of farm spending. The excellent Select Committee on European legislation report also stated that the continued accumulated surplus stocks over the years is high and stays high. If the overrun is to be reduced by the stabilisers, it still will not tackle the fundamental problems of excessive expenditure.
I tabled an amendment concerning fraud. We think that that is appropriate and important, inasmuch as it is crucial to stress to the Commission the importance of developing appropriate action to deal with fraud and to emphasise that in the debate. I hope that the Minister will be able to accept the substance of that amendment. I accept that the measures concerned would be within the present Community framework rather than the extended Community framework. We share the view that it is appropriate for the Community to do best what it can best do. However, that does not mean that it should infringe the autonomy of member states in their pursuit of policies to combat fraud.
However, we should distinguish, in the case of agricultural support, between big and small farms. There is a difference between the smallholder, where it is most appropriate for the Community as a whole if the Governments monitor the process of fraud, and multinational agri-business. I stress that. Multinational agri-business is integrated from production through processing, transport, distribution and retailing, and it is easier in such firms for frauds to be perpetuated. That does not apply to the cruder frauds, such as importing meat from Argentina and recycling it as allegedly Community produce, but it does apply to techniques such as transfer pricing. Under-invoicing and over-invoicing are much harder to detect in multinational companies. In that context, the Community should be playing a role by supervising the transactions. It should be gaining transparency. That is considered extremely important in general in terms of articles 85 and 86 of the Rome treaty. The Community should be gaining transparency on such transactions, many of which at present remain opaque.
On the matter of the European regional development fund, it is notable that the report from the Court of Auditors states:
"The financing of small projects by the ERDF where necessary could take place within the context of national programmes of Community interest since the procedure used for the approval and administration of these programmes should give access to more appropriate information."
We agree, again, that it is appropriate for the monitoring to be done nationally rather than by the Community. However, the process should be extended.
That refers also to the spending by the European Investment Bank, which should be considering joint ventures between regional enterprise boards in the Community. Regional enterprise boards exist in, for example, Catalonia in Spain, Emilia Romagna the German Laender and the west midlands and Lancashire in the United Kingdom. If there is an area where expenditure would be merited, it would be the funding of research projects, such as that which the Court of Auditors analyses, into that sort of linking joint venture approach

1119
of regional enterprise boards, which have shown such success in the effective use of public money in regional development in several countries of the Community.
It is time for a major review of the European development fund and the Community aid programmes for developing countries. The report of the Court of Auditors is not adequate. The slowest institution to evaluate, approve and monitor projects of virtually any of the international multilateral aid agencies is the European Commission. Delays of weeks or months occur. For example, tragically, for months there were delays during the last famine in 1984–85 in the horn of Africa whereas a national Ministry of Overseas Development could take a decision within days or hours.
That is the description of the kinds of delay that occur even for emergency relief programmes. If the Community's concept of emergency runs from weeks to months, it is not surprising that other programmes underspend year after year. The implication is that there should be a major review of the development spending by the Community. If there is a subject that merits a specific research programme—perhaps on an international basis between established overseas development institutes in different countries—it is the EDF programme.
The Court of Auditor's report alone can hardly cover the full implications of research and development, but it is clear that a transmission mechanism is missing for translating research and development into innovation in new investment projects which thereby serve on a coherent and major basis the objective of a European industrial strategy. Again I stress that we share the Government's attitude that such projects should be international rather than supranational. But the transmission belt between R and D and effective innovation too often is missing.
I have referred to the case for distinguishing between expenditure by larger and smaller enterprises—multinational major firms on the one hand and regional or local minor firms on the other. The Commission should attend to this matter, because there are different problems of gaining transparency on the use of public funds for different kinds of enterprise which themselves have qualitatively different roles. That goes, of course, not just for agri-business, but for other multinational enterprises in the Community as a whole.
At the moment there is not even an accounting by the Commission for the role of a single multinational enterprise in the Community as a whole. It is ridiculous that, after so long, and after the Community has published competition studies, which would not just cover the floor of the Chamber but would be piled several feet high, competition is analysed in the Community purely on a national basis. Instead of it being possible to gain transparency for the Community as a whole in the operations of a company such as IBM or any other major multinational, we are given the divided parts of IBM for a dozen individual countries. This is another area in which the Community should be taking more action. It would be of merit to put resources into research and methodology projects which make possible more transparency of the activities of such firms in the Community.
At this time of night, looking across at several Conservative Members, I am reminded of a member of the other place who dreamt one night that he was speaking there and woke to find that he was. I wish those
1120
Conservative Members well in their contributions and I hope that the Minister will accept the spirit of our amendment.
1.30 am
Mr. Patrick McLoughlin: Hon. Members' attention can be drawn to documents in strange ways. The special report of the Court of Auditors was drawn to my attention in a strange way by a farmer whom I met in Ashbourne at a meeting of the National Farmers Union. British farmers say that they understand the problem of trying to balance production with consumption, but they want to be treated like other Community members. They have long argued that they are not treated as fairly as other members of the Community. That would appear to be the case, from studying paragraph 5.47 on page 57 of the Official Journal of the Communities which states:
"The overall objective of the quota/additional levy system is to re-establish a balance between production and consumption of milk and milk products. The estimated budgetary cost of disposing of the surplus production of milk, which in 1986 was evaluated at 9.6 Mio tonnes, is at least 2688 Mio ECU."
The journal goes on:
"At the end of 1986 the situation was so serious that the Council had to adopt a comprehensive package of measures tightening up the quota/levy system, restricting the scope of intervention for butter and skimmed milk powder, and providing for a special disposal programme to sell 1 Mio tonnes of butter at very low prices. In its opinion No. 1/87 (23) the Court has expressed disagreement with the financing, arrangements.
5.49. While in general Member States adopted arrangements to implement the system which were in accordance with the regulations as they existed, there were a number of exceptions which directly affected the achievement of the system's objectives:

(a) the absence of implementation progress in Italy;

(b) the overallocation of quota by the F R of Germany and to a lesser extent by the Netherlands and Belgium;

(c) the avoidance of 21,7 M ECU in levy liability in respect of 1985/86 by France by excluding one day's deliveries from the calculation of the levy liability; and

(d) the establishment in Denmark of a single purchaser which corresponded neither to the normal definition of a purchaser nor to the definition set out in the quota regulations."

The journal refers to five countries, so it is no wonder that British farmers occasionally think that they do not get a fair deal.
I am grateful for the way in which my right hon. Friend the Paymaster General responded to the report by saying that it was important that the recommendations of the Court of Auditors should be put into operation. The court shows those areas in which Community legislation is not being applied. We can use that as ammunition to press the Government, the Commission and the Community to take positive action to ensure that British farmers get a fair deal. I hope that my right hon. Friend will pursue that matter in the negotiations on which he is about to embark.
1.34 am
Sir Russell Johnston: May I first put on record my continuing view that we make poor provision for discussion of Community affairs in the House. I entirely agree with the hon. Member for Vauxhall (Mr. Holland) that it is plumb crazy to begin a debate on anything at all at this time of night. I observe that members

1121
of the Press Gallery have sensibly gone to bed, so there will be zilch coverage in any of the media, and there will be no way in which what we say here will be forwarded on for any discussion. Putting these important matters on so late is a sign of the unwillingness of the Government to discuss them fully and sensibly, something about which hon. Members on both sides of the House and of the argument could make common cause. We are talking about a document of 261 pages. It has to be discussed in one and a half hours, and it is now 1.35 am. That is not a sensible way to run a country.
Today there were questions to the Foreign and Commonwealth Office. No longer do we have any reserved segment of those questions for European Community affairs. We had one question today, and last month we had none because of the vagaries and caprices of the ballot system That should be changed, and the Minister should convey that view to the Leader of the House and the Government managers.
Mr. Nigel Spearing: I am glad that the hon. Gentleman has raised this matter. Can we take it that that is not only his view but that of all his hon. Friends, because it is not only a party matter but one which concerns many people? A regular 20 minutes used to be set aside for EEC questions, but that time has gone.
Sir Russell Johnston: The hon. Gentleman does hard work on the Scrutiny Committee. It is the view of the Liberal party. We formally objected to the change when it took place.
Mr. Tristan Garel-Jones (Vice-Chamberlain of Her Majesty's Household): All the Liberal party?
Sir Russell Johnston: The hon. Gentleman may fear that, because he is a Whip, he cannot properly intervene, although I know that he would love to. I can assure him that it is also the view of those who will remain in the Liberal party, continuing in the arms of others.
The Brussels agreement came after the end of the period to which the report refers, and it is relevant as it deals with all the fundamental problems raised in the report. I know that the Prime Minister was criticised, but the Government's conduct at the Brussels summit was good. The Liberals have always said that if Britain were prepared to give a little on some points, it could reasonably expect other European countries to do the same. That is what happened at Brussels. If the Prime Minister is now under criticism from her Back Benchers—although I note that some of her more notable critics are not here — the blame for this must lie squarely at her own door because of the public saber-rattling in which she indulged before the summit, and her fondness for confrontation.
As for the Labour party, the change in its approach, which has been signalled in various well-publicised so-called secret guideline documents emanating from the office of the Leader of the Opposition, did not seem to have reached the attention of the Labour spokesmen on European affairs. Their response to Brussels—I exclude from this criticism the hon. Member for Vauxhall—was to try to be more nationalist than the Prime Minister, which is a pretty formidable task, rather than to address themselves to the need for accommodation and balanced
1122
negotiation, without which the Leader of the Opposition's goal of a Socialist Europe does not have any chance of even getting on the agenda.
The agreement is to be welcomed, in that it introduces a number of crucial changes which have long been advocated, not least by the Commission, but on which the Governments of the Community have never before agreed. The first is the limitation of the common agricultural policy expenditure to a progressively smaller share of the budget—reaching, it is hoped, 50 per cent. by 1992 as opposed to 70 per cent. now.
The second is the provision of increased resources which are politically and socially essential for the success of the common internal market, particularly to the structural funds—although I think it is worth noting that the increase in the social fund could be of great benefit in rejuvenating the inner cities of the United Kingdom. The help to Portugal and Greece is also politically and socially vital to the cohesion of the Community.
The third is the Community's own resources: the automatic payments to member states will in future specify a percentage of the country's gross national product as opposed to value added tax. This is a change to a much simpler and more equitable system, about which I have spoken over many years in these debates.
The auditors are critical of the fact that the Community has, in reality, run a budget deficit, and thus broken its own rules. It is very important, in the general debate about these things—because the Commission is always blamed—to emphasise that the Commission is not the culprit. The culprit is the Council of Ministers, which has been responsible for agreeing to these things. That includes our own Government.
I remember very well the late David Penhaligon reminding us, immediately after the introduction of milk quotas, that about six months earlier the then Minister of Agriculture had gone to his constituency to speak to a National Farmers Union meeting, and had said that dairy producers must be encouraged to expand. Six months later we had milk quotas.
So it is really not good enough for the Government to condemn the Commission, or for critics of the European Community on the Government Benches to condemn the Community as a whole, for profligacy, when they themselves contributed to that very profligacy.
Mr. Derek Conway: I understand the hon. Gentleman's point about the Council of Ministers, but is it the policy of whatever the new party is to be called to continue the Liberal party's previous policy of a firm commitment never to use the national veto? If that is still the policy of his party, what price membership of the Council of Ministers?
Sir Russell Johnston: This is something of a diversion, Mr. Deputy Speaker, but I will respond briefly. The policy of the new party will, in the first instance, be based on the manifesto on which we jointly fought the last election nine months ago. There was nothing in that manifesto which said that we would never use the veto; there was quite a bit of the manifesto which said that concentration on the idea of the veto was not the right way to look at the European Community and that one should contemplate its use only in very extreme circumstances. There was nothing in our manifesto along the lines that have just been suggested.

1123
The recent agreement nevertheless goes quite a long way to dealing with these problems of resources, and will free the Commission from having to take the desperate measures that it has often been forced to take.
In his introductory remarks, the Minister rightly expressed his approval of the strong sense of independence which the Court of Auditors has demonstrated. During the exchange at Question Time today, an hon. Member from the Labour Front Bench suggested that the Government ought to sack Lord Cockfield as fast as possible because he was not following Government policy. That appeared to receive some approbation from the Government Back Benches. One should perhaps also emphasise in this debate that the Commission, like the Court of Auditors, is a collegiate body which is not there to advance national interests but to try to work out a common, coherent European attitude which will in the end, one hopes, be to the benefit of all member countries.
The European Parliament, in which I feel honoured to have served for six years is often the butt of abuse from Community critics, so it is worth underlining the Minister's remark that it has played a positive role in ensuring that the Community's finances are properly accounted for, and has been very critical of the Commission's unofficial deficit financing, for example in its administration of butter stocks. It refused to discharge the Community's 1985 accounts until this January for that very reason and it was eventually given assurances that that practice would be changed in future.
The Community's budgeting shows how much better the Community would function if the European Parliament were given a more direct responsibility to do what parliaments are supposed to do—which we find difficult even in the House—and act as a check on the activities of the Executive. I am not terribly impressed with checking the activities of the Executive at 1.45 am.
Later in the debate, hon. Members opposed to the Community may raise the cost of the CAP which is far too much, but even if it were dramatically reduced, the idea that agricultural expense can somehow be avoided completely is nonsense. After all, before we entered the Community, we paid deficiency payments. The massive fall in the value of the pound since then would have made those payments much larger if huge price cuts to farmers had to be avoided.
The myth persists that the British taxpayer is supporting the entire European bureaucracy. The report shows that that assertion is false. It is worth noting that the entire Commission staff is less than the staff of the London borough of Brent. I do not think that the Commission is looking for any support from the Japanese.
The table on page 163 of the report shows the own resources contributed by member states. It shows that Britain's contribution of 4·8 billion ecu is 45 per cent. less than that of Germany and 30 per cent. less than that of France. The move towards defining own resources as a percentage of GNP is likely to increase Italy's contribution relative to our own.
The same picture emerges when payments for the Community are taken into account. Germany's net contribution is more than two and a half times greater than the United Kingdom's contribution.
Therefore, it is important to stress to the public, not that I am arguing that we are not paying a considerable amount of money, but that the picture is put that we are paying much more than others, which is not the case. Also,
1124
if one takes into account the calculations that have been made about how much it costs not to have the internal market—I admit that that is a rather difficult, negative calculation—the sum is certainly very much larger.
I conclude by making two more points. First, I hope that we can find more time to debate Community affairs on the Floor of the House at a sensible time of the day. After all, Community affairs are important now, and will become increasingly important in future. Secondly, I hope—so far in this debate it has happened, but it is most unusual—that we can get away from the dreary, dog-eared, endless rehearsed pro and anti debate and get down to the real business of achieving a multinational Community which will and is evolving into a supranational Community, and make it work in a fair and efficient way. To that end, the Court of Auditors works hard and well and ought to be complimented.
1.49 am
Mr. Ian Taylor: One of the advantages of having a debate at this time of night is that it appears that one can agree with Opposition Members. I find myself in considerable agreement with the hon. Member for Inverness, Nairn and Lochaber (Sir R. Johnston).
The Select Committee on European Legislation has drawn attention to the importance of the Court of Auditors' report. The work of the Select Committee is also to be commended. I drew attention in the House last November to some of the strange practices—strange to any accountant, that is—that have been employed by the European Community: the budgetisation of agricultural stocks, the changing of timing within the same 12-month period, changing the assumptions upon which the budget had been calculated between years. They were designed to make good the political pretence that the Community was keeping within the pre-set budget. Yet, as the Select Committee's report says':
"The Court comments critically on the failure of the Budgetary Authority for the third year running to meet the Treaty obligation to balance the Budget."
The difficulty that the European Community faces is that, whereas the Commission is the practitioner, it is the Council of Ministers that is responsible for this strange set of circumstances. Too often, the political reasons for wishing to obscure reality have overridden the need to look properly at what the budget should be and to anticipate the problems of such budgetary requirements. Rather, it has been pretended after the event that excess expenditure has not happened.
For political reasons, there has also been a delay in introducing measures to check overspending. Britain was successful at the recent Brussels summit, and my right hon. Friend the Prime Minister is heartily to be congratulated on achieving, as she said, 95 per cent. of her objectives. The agreement was acceptably in line with our overall objectives for strengthening the Community. We have secured effective and legally binding controls on expenditure, embodied in legally binding regulations.
The Court of Auditors draws particular attention to the common agricultural policy. We now appear to be setting a guideline expenditure base of £19 billion for 1988. There are four safeguards to reinforce that guideline. The Commission's price proposals will have to be consistent with it. There will also be deletion of exceptional circumstances provisions—one of the worst of all ways of getting out of difficulties by claiming that there were

1125
overwhelming circumstances for overspending money. There is now to be a sensible reserve for exchange rate fluctuations between the dollar and the ecu, but that is limited to a budget effect of 400 million ecu, above which it has to come out of the rest of the agricultural budget.
The cost of depreciating and disposing of existing surplus stock will have to be financed outside the guidelines but within the budget. Again, that seems to me to be a sensible way to proceed. New stocks will be depreciated when they are established. Furthermore, the guideline will rise at a rate that is significantly lower than the total Community resources. That is what many hon. Members have been urging for some time—a decline in the overall relative position of agriculture within the total Community budget.
It was agreed in Brussels that there would be tighter budgetary management. In her statement to the House on 15 February, the Prime Minister said:
"This will limit the use of carry-over provisions and creative accounting devices, such as what are euphemestically called negative reserves, to which there has in the past been excessive recourse, and which have been particularly unwelcome to us." — [Official Report, 15 February 1988; Vol. 127, c. 706–70.]
I entirely endorse that statement and look forward to more flesh being put on those provisions. If flesh were to be put on them, the Court of Auditors would have a much easier time when it reviews 1988.
Next, at the Brussels summit we increased the own resources of the Community in effect by about 25 per cent., to 1·2 per cent. of GNP for member states. With the advantage of our abatement, the British contribution is marginally below 1 per cent. Overall, I agree entirely with the remarks which have already been made, that we want to see a stronger budget for the Community, bearing in mind that at the moment it is £27 billion for a community of 321 million people. The relationship with a national budget has to be stressed constantly. The total of £27 billion is about 15 per cent. of the British Government's budget
The relative importance of the Community and the strength it will get from having a more enlightened view on how to control its budgetary affairs will lead to increased strength as we move towards 1992. The questions with which the House should concern itself, and which it is strange to be considering at 1.55 in the morning are, where will the power lie within the Community; who will control the increasing budget; and how will Parliament be able to monitor the decisions which will be made by the Council of Ministers, many on a majority vote?
We should grasp the nettle and realise that it would be helpful to the House to work much more closely with the European Parliament. It has always seemed to me to be nonsense that British Members of the European Parliament are not allowed free access to the House of Commons. When a constituency problem emerges or when there is a matter of considerable national or Community importance to be discussed, the lack of easy access to Members of the European Parliament is not only a nonsense but embarrassing.
The House has so far taken the unenlightened view that it might threaten the independence of its facilities, whereas I think that it would go a long way to helping significantly our ability to control legislation, which is, of course, our
1126
parliamentary right. Lack of access to Members of the European Parliament and the knowledge which they have will increasingly be seen to be dangerous as we move towards the internal market and increased powers for the Commission and the Council of Ministers.
I welcome the report of the Court of Auditors, but I draw attention to the fact that, if the Brussels summit leads to tighter budgetary control for 1988, many of its strictures will no longer be necessary in future and we will find that the European Community will go from strength to strength, subject, we hope, to the parliamentary control which is so necessary.
1.57 am
Mr. Nigel Spearing: I am glad to follow almost immediately some of the comments of the hon. Member for Esher (Mr. Taylor). Before doing so, may I thank the hon. Gentlemen who have referred to the work of the Select Committee on European Legislation? There are two reports before us which are relevant, one relating to the budget itself and one relating to a document about the prevention of fraud. The reports and summaries are found in House of Commons document 43, xiv and xv respectively.
I think, too, that the Select Committee would have a view on the time of the debate. I am glad that the Patronage Secretary is in the Chamber to hear this. I understand that the lateness of the hour is partly the result of a knock-on effect from the timetable of last week, which became congested because of a controversial and major statement that the Government made, as they have every right to do. But if the Government press large quantities of legislation through the House and uproot some of the conventions that have been accepted by all parties for the last 30 years, they must accept the consequences.
I do not think that it is good enough that we are considering these important matters at this hour because of the particularly controversial legislative statement that the Government made last week. They have every right to do that, but they have no right to impinge upon the ability of the House properly to scrutinise such important matters. The hon. Members for Inverness, Nairn and Lochaber (Sir Russell Johnston) and for Esher with whom I might not agree in other respects, have emphasised that point.
I made those preliminary comments in my role as Chairman of the Select Committee. What I now have to say I say as an hon. Member, but it could be said by anyone who took a view on the major question of our relationship with the EEC. First, I emphasise again the lateness of the hour. Last week I was involved in a popular talk-in radio programme. The interviewer asked, "Weren't we told about all this before, Mr. Spearing?" I said, "Yes, we were. It was all in the small print. It was debated late at night 10 years ago." "Oh," he said, "if that's the case, what's going to happen 10 years from now?" I said, "It will be less than that. Unfortunately these things are in small print. They are not easily understood. The journalists have gone home, the broadcasters do not tape it and therefore people don't understand what is happening."
I fear that that may be true of this debate, although it is retrospective, whereas some of the debates that we shall have in the near future about EEC monetary matters will be prospective. The House should take these matters seriously and its ability to do so is blunted by the lateness of the hour. If a local authority dared to make

1127
qualifications to the accounts that it had presented of anything like the magnitude revealed in this fat, 200-page volume, the Government would rightly be at its throat.
I thought that the Paymaster General was a little less than his robust self in presenting the documents. Perhaps it was the lateness of the hour that prevented him from exercising his usually perspicacious eye to the full on these matters. I should like to comment on hon. Members' optimism about the effectiveness of the new Copenhagen-Delors mechanism; I had better not refer to Brussels, because it has so many connotations. The mathematical formula that has been agreed seems to me to be in the nature of a dodgy brake on a motor car that is accelerating fast. It is not something that we can call discipline. That brake is not only of untried design; it has not been tried out in prototype. We shall have to see what effects it has, but I am much less sanguine about its results than the hon. Members who have so far spoken.
I remind the hon. Member for Esher that since the Single European Act has been passed the European Parliament in Strasbourg has a direct input into some European Community legislation—that concerning the harmonisation of legislation particularly under article 100A. This House has never had that power. It was voted away in 1972, and co-legislation, at which the hon. Gentleman hinted, simply does not exist as a consitutional fact.
Those powers are with the Strasbourg Parliament. They have left this House. All that we can do is attempt to influence Ministers in what they do and say in the Council of Ministers. We have no direct control over the raw legislation — except in one matter, which is the authorisation through Act of Parliament, statutory instrument or resolution, of the voting of additional moneys or additional monetary mechanisms. We shall have a series of debates about those in future.
That brings me to the procedure and activity of our Ministers in the Council of Ministers, to which this debate relates; as the Paymaster General has said, he will be debating this very matter next Monday, 7 March, in the Council of Ministers. He has described the discharge procedure in his useful memorandum to us. It is up to the Council of Ministers by a qualified majority to discharge this budget, which is then passed to the European Parliament with a recommendation for discharge or not. Perhaps the Minister replying to the debate will tell us whether the Government are minded to vote for discharge of the budget.
In view of the qualified nature of the report, to put it mildly, I should have thought that the Government should not vote in favour of discharge because it would not be appropriate to do so. If one paragraph of the report emphasises that, it is paragraph 1.5, to which the Paymaster General uncharacteristically did not give full weight in his comments. I shall therefore quote it in full. It reads:
"For the third year running, the Communities have not observed the fundamental principles of their financial organization, including, first and foremost, the principle laid down in Article 199 of the EEC Treaty, namely that the expenditure of each financial year must be covered by equivalent annual revenue. In addition, the Court would point out that, by not taking account of the expenditure actually incurred in respect of the financial year 1986, the budgetary authority created the illusion of apparent compliance with the maximum limit laid down for the Communities' own resources, and in particular the rate of 1·4 per cent. set for own resources from value-added tax (VAT)."
1128
I stress the words:
"created the illusion of apparent compliance".
Any firm in the City doing that would scarcely be acting in the full, frank and fair mariner to which auditors usually refer.
That is a very strong qualification already, but the paragraph continues by pointing out that, rather than the 1.39996 per cent. shown in the budget accounts, the court thought that the real expenditure of resources would be equal to 1·5 per cent. A company director acting in that way could find himself in court for fraud and the Government would be prosecuting him for false accounting. That point alone justifies querying whether the Government intend to vote for the recommendation to discharge the budget or whether they will diplomatically abstain, as I assume is their right.
The Paymaster General also referred to outstanding liabilities. I agree with him that totting up the total potential liabilities will not necessarily equal the liabilities that will in fact have to be met, but those liabilities are pretty massive. Paragraphs 1.13 and 1.14 and the accompanying tables set them out. Although certain matters have been covered, all that has really been done is the arithmetic to show how big the liabilities are.
Paragraph 1.13 reads:
"In its annual report on the financial year 1985, the Court laid particular emphasis on the increasing amount of commitments still outstanding, the inevitable consequences for subsequent Community budgets that would result from the build-up of deficits carried forward from one financial year to the next and on the presentation of the accounts, which only gave a partial and heterogeneous picture of the true situation."
There is another qualification. The paragraph continues:
"The Court then drew up a list of the Community's financial liabilities according to the certain or potential nature of the expenditure involved and invited the Commission to make 'a list of all the financial liabilities accumulated by the Communities in the past and to try to draw up a timetable to show when they are payable'."
Paragraph 1:14 says:
"This table shows that the liabilities existing at the end of 1986 which will have to be honoured over the next few years and which may be described as legally binding amount to 14053,4 Mio ECU, 11 681,7 Mio ECU of which are accounted for by commitments outstanding from previous financial years. To this must be added other equally unavoidable expenditure connected with the existence and disposal of agricultural surpluses and estimated by the Commission at 6810,2 Mio ECU, making a total of 20863,6 Mio ECU of unavoidable expenditure."
I emphasise the words, "unavoidable expenditure." The Paymaster General said that further amounts may have to be added to that, but it is still a pretty massive sum. I agree with the right hon. Gentleman that the new Delors-Brussels arrangement, of which we have not yet had a Full account, puts those further amounts outside the agricultural guidelines, which means that they must not be accounted for in the annual increase of expenditure. That may be, although that itself is a questionable procedure. However, the money must be found.
Mr. Brooke indicated assent.
Mr. Spearing: I am glad to see that the Paymaster General—who is appropriately named on this occasion—is nodding. The right hon. Gentleman must pay the money, even if it does not come within the formula to limit agricultural expenditure. At least the right hon. Gentleman must pay some of that amount over the next accumulating years.

1129
Here we have an example of accumulated liabilities, which the court's report of 1985 said were not in the balance sheet — the court forced the Commission into doing something about it — yet accumulated liabilities have reappeared, and they are very substantial indeed.
In ordinary British language, the report discloses a pretty big fraud. The Paymaster General referred to chapter 6 of the report, which deals with fraud. It is welcome that there is a special chapter in the report on fraud. Paragraph 6.6 says:
"Between 1979 and 1985, the Commission made six proposals to the Council with a view to amending the basic Regulation, No. 2891/77, in order to strengthen its powers of control. None of these proposals has yet been adopted. The six proposals made to the Council in 1979"—
1979—
"reflect the degree of interest shown by the Commission in the necessary strengthening of its ability to guarantee the collection of the Communities' own resources and to fight fraud and irregularities in that sector."
That paragraph clearly refers to the Council of Ministers. The hon. Member for Inverness, Nairn and Lochaber and for Esher emphasised that point. I should like to ask the Minister whether document Com. (87)572, on the fight against fraud, and his memorandum take up and give those proposals to the Council? I have read Com. (87(572, and in the language of some of my colleagues, it is the usual high-minded sort of guff. I understand that the Council is setting up units—I think they are called cells—that will report direct to the President on how fraud can be dealt with.
Will the Paymaster General say whether that document contains the proposals that were made to the Council by the Commission in 1979, which appear to be the effective controls that are required, but which are not in the document? The powers that were requested may have been more connected with the collection of money from member states. Nevertheless, the collection of money, certainly from the Treasury point of view, is surely just as important as detecting fraud.
Sir Russell Johnston: Would it not be interesting to know Her Majesty's Government's attitude within the Council of Ministers when the proposals were put by the Commission, and also whether any member countries blocked them?
Mr. Spearing: Indeed. I am grateful to the hon. Gentleman for raising that point. I would be equally interested regardless of what Government were in power at the time.
Although I have stressed that these are my personal comments, I hope that hon. Members will agree that they could equally well have come from anyone who is in favour of the smooth running and expansion of powers in the Community, and everything else about it. The subject relates to the smooth working of public institutions, irrespective of what our views of those institutions may be.
I hope that the Paymaster General will be able to satisfy us on these matters. It appears that the Court of Auditors points them up year after year. The auditors gear them up a little better, but, despite their outspokenness — of which we have shown some appreciation tonight—they are paid in the end, not directly by the taxpayer, but by the national Governments who are ultimately responsible for such matters. The control exercised by the Comptroller
1130
and Auditor-General on the House — not on the Government — is not at present mirrored in the Community.
I hope that in his deliberations next Monday the Paymaster General will bear in mind some of what has been said. I hope that the points that I have raised are common among all Members of Parliament in their role inside this country — big or small — or in the wider context of control of the Executive by the legislature, by means of control of finance.
2.16 am
Mr. Derek Conway: Inevitably, much of the report—and, indeed, much of the debate—relates to the common agricultural policy and to the farming interests therein. Although, understandably, many hon. Members may complain about the lateness of the hour, I suppose—representing, as I do, a fairly large rural constituency with many farmers — that the advantage of sitting so late is that milk consumption in the canteen will be increased. That may do its bit to help British farmers.
The hon. Member for Newham, South (Mr. Spearing) does a particularly good job with his EEC Legislation Scrutiny Committee. I hope that "EEC" is still used, rather than "EC", when the Official Report quotes my remarks. I have a particular view about the Community as an economic bloc, although I am afraid that I am not one of those hon. Members on both sides of the House who see a greater Europe as the future for our country.
Page 57, paragraph 5.48 of the report relates to decisions made by the House on 3 July 1984, when we debated EEC document 6059, which dealt with milk quotas, and again when we voted on 18 July 1984 on the Dairy Produce Quotas (Amdt) Regulations 1984. At the time I was rather in the bad books of my hon. Friend the Parliamentary Under-Secretary for the Home Department, whom I am now supporting on the Firearms Bill. I incurred his wrath when he was an assistant to the then Patronage Secretary, because I felt unable to support either piece of legislation. I felt strongly that the British dairy producer was doing a first rate job in producing a product for a market which, in this country, was self-sufficient. We were not overproducing, and I felt that many British farmers were being hard done by. I was therefore unable to support my party on that occasion.
During the many discussions that took place in the House, however—not only in that debate, but during Question Time — the then Minister of Agriculture, Fisheries and Food was pressed for an assurance, by me on one occasion, that the application of the quotas would be EEC-wide. Yet paragraphs 5.48 and 5.49 of the report show two objections from the Court of Auditors. The first is:
"Although the quota additional levy system had an initial effect in braking the rise in production, there were flaws in its initial conception and it was progressively weakened by amendments adopted by the Council during the first two years of its operation. As a result, the system had no significant impact on the problem of milk surpluses."
I am encouraged by the fact that the report has endorsed my lack of support for dairy quotas in the first place.
I turn now to the issue whether the British national interest is being safeguarded as fairly as that of the Community. Paragraph 5.49 briefly states:
"While in general Member States adopted arrangements to implement the system which were in accordance with the

1131
regulations as they existed, there were a number of exceptions which directly affected the achievement of the system's objectives".
The Auditors go on to state that Italy, Germany, the Netherlands, Belgium, France and Denmark did not really play by the rules. The United Kingdom is not mentioned, yet we are often castigated as being the awkward squad of Europe. According to the Court of Auditors, Britain has stood by its commitment—it was wrong to give it—and that should be recognised by those who often complain in the House that Britain has a negative attitude to the EEC.
The table in the review of agriculture in the United Kingdom for 1988 presented by my right hon. Friend the Minister for Agriculture, Fisheries and Food shows that milk production in 1983 was 9,450 million litres. By 1987 that was down to 7,750. Undoubtedly the British farmer has played a part in that, as has the taxpayer—as the report shows. The transition period has been a hard time for most dairy farmers, despite the easy words of politicians, Eurocrats or whatever we choose to call each other. For farmers earning a living this has been a difficult time. Their one consolation was the knowledge that dairy quotas were being applied equitably, so they will take no comfort from the fact that six nations have been castigated for not following the rules. I sometimes wonder whether our Civil Service is not being too efficient in this area. I should not be sad if more slackness, of the type used by the Italians, were applied.
I find it a consolation that as long as my right hon. Friend the Prime Minister defends our national interests—despite often being criticised by Opposition Members and by some of my hon. Friends for having a robust attitude to the Common Market—we can rest assured that we will not be taken for too much of a ride in the EEC. I am sure that the House will endorse the report. It shows that Britain is not the awkward squad in Europe. Six nations are not applying the dairy quota in the way that they agreed, whereas British farmers are. I hope that my right hon. Friend will draw that point to the attention of my right hon. Friend the Minister of Agriculture, Fisheries and Food, and ensure that our farmers get a fair deal.
2.23 am
Mr. Brooke: By leave of the House, I shall reply to the debate.
I have greatly enjoyed this the third annual debate to which I have had the pleasure of replying. As I told the House, the Economic and Finance Council will be discussing the report on 7 March.
I have heard the remarks from several hon. Members about the hour at which the debate is being held. The hon. Member for Newham, South (Mr. Spearing) explained the circumstances that dictated the change in our arrangements. If I may interpolate a personal note, my birthday started about two and a half hours ago; I have never before started my birthday in this mode.
I enjoyed the thoughtful contributions of the hon. Members for Vauxhall (Mr. Holland) and for Inverness, Nairn and Lochaber (Sir R. Johnston) and look forward to reading them again at a more civilised hour. I cannot pretend that I would necessarily agree with everything that they said, but I hope that they will pay me the compliment of re-reading what I said at the beginning of the debate, as some of the points that arose later were answered at that stage.
1132
The Government are ready to consider sympathetically any cost-effective proposals that the Commission may make for new or enhanced powers to improve cooperation, monitoring reporting or compliance. Although the Government cannot accept the Opposition amendment, as it was not selected, we accept the spirit of that amendment.
I was grateful to the hon. Member for Inverness, Nairn and Lochaber for congratulating the Government. I noted his remarks about the European Parliament being allowed to exercise a check on the Executive. I will remark on the irony of that particular observation in the context of the report. The Council was obliged to take the European Parliament to the Court of Justice over the 1986 budget, which we are discussing because the European Parliament unilaterally tried to adopt a budget outside the treaty limits. The Court of Justice found that the European Parliament had exceeded its legal powers.
My hon. Friend the Member for Esher (Mr. Taylor) represented a welcome new voice in these debates. Of course I found more to agree with in my hon. Friend's comments that I did in some of the comments made by other hon. Members. I want to respond to the speeches of my hon. Friends the Members for Derbyshire, West (Mr. McLoughlin) and for Shrewsbury and Atcham (Mr. Conway) as they both made the same point.
The United Kingdom has always considered it important that milk quotas should be applied properly throughout the Community. The prime responsibility for ensuring that rests with the Commission. It takes action. The Commission recently won a European Court case against Italy for the non-implementation of quotas. Member states which have overallocated quotas have been required to cut back. The Commission is pursuing action against France for the one-day reduction, and the French have been required to change their procedure. The Commission opened European Court proceedings against Denmark over its single purchaser although they have been suspended following amendments to the regulations that give the required effect for levy purposes.
I assure my hon. Friend the Member for Shrewsbury and Atcham that I will draw this debate to the attention of my right hon. Friend the Minister of Agriculture, Fisheries and Food. I will also send a copy of the debate in the Official Report to the Budget Commissioner, Mr. Christophersen, to the chairman of the European Parliament's Budgetary Control Committee, Mr. Aigner, and to the president of the European Court of Auditors, Mr. Mart, who will be presenting his report to Ecofin next week.
I thank the hon. Member for Newham, South (Mr. Spearing) who is the Chairman of the Scrutiny Committee, and agree with his desire to see these matters more widely comprehended in the country. I am sorry that he believed that I was less perspicacious than he feels that I usually am. On this occasion I share his basic intent.
The hon. Member for Newham, South asked about the Government's vote for the discharge in terms of the Ecofin meeting on 7 March. It would not be appropriate to vote against the discharge of a budget in which spending was confined within the legal limits on revenue. It may be that some expenditure was pushed from 1986 into 1987, but actual spending in 1986 was within the own-resources ceiling.
The hon. Member for Newham, South also asked me about the 1979 proposed amendments and related matters.

1133
The United Kingdom welcomes the Commission's proposals to improve its internal organisation and, in particular, the new anti-fraud unit. With regard to the Commission's appeal to the Council to take action over its earlier proposals for tightening up own resources, the Council is actively considering the suggested amendments to regulation 2891/77 in relation to the establishment of own-resources and will report back to the Commission as soon as possible. However, the Council has had difficulties in agreeing precisely at what point traditional own resources become "established" and therefore payable to the Commission. The question turns on whether a member state should have to pay over money which it has not been able to collect because, for instance, of fraud or insolvency.
On the proposed regulation on reporting, of irregularities, some member states have questioned the need to increase the Commission's powers to collect information. However, I emphasise that the United Kingdom already follows the good practice outlined in the Commission's model reporting form and supports the view that reporting along those lines should be made compulsory. I hope that that reassures the hon. Gentleman.
It has been a delight to respond to the debate.
Sir Russell Johnston: When the Minister said that the Council was actively considering the Commission's proposals, is that actively since 1979 or more recently?
Mr. Brooke: "Actively" is an elastic term.
It being one and a half hours after the commencement of proceedings on the motion, MR. DEPUTY SPEAKER put the Question, pursuant to Standing Order No. 14 ( Exempted Business).
Question agreed to.
Resolved,
That this House takes note of the Annual Report of the European Court of Auditors on the financial year 1986, together with the replies of the Institutions; and approves the Government's continued efforts to press for effective Budget discipline and proper financial control of Community expenditure.

Specialised Advertising Services
Motion made, and Question proposed, That this House do now adjourn.—[Mr. Neubert]
2.30 am
Mr. Michael Stern: The Monopolies and Mergers Commission recently reported on an apparent monopoly in the United Kingdom over the acceptance of advertisements by specialist magazines for campers, climbers and ramblers. The effect of that monopoly in magazines such as The Great Outdoors, Climber, High Magazine, Mountain, Footloose and Country Walking is that they will not normally accept advertisements that contain any mention of the approximate price of the goods advertised, except where the products concerned are own-brand products or are exclusively imported and available only from the advertisers.
That policy appears to apply to most, if not all, of the magazines listed, although with some variations. For example, it is reported that High Magazine will accept advertisements containing prices from national manufacturers for their own brands, but will refuse advertisements from mailing houses at prices that are
"significantly below the going market norms."
We know what that means.
Clearly, such a policy must act to the detriment of the customer. Although the quality of the advertised goods is important—for example, very few climbers would use 5 mm rope where 11 mm rope is needed, and for those who do the laws of natural selection soon prevail—there is considerable price competition for national branded goods and for goods of similar quality. The policy of the magazines concerned clearly denies much-needed information to the consumer.
The damage to the buyer is not limited to the denial of information, which could, after all, be obtained with some additional effort. Although the bulk of the sales of the magazines occur through newsagents, a significant proportion of the magazines are sold by the same retail shops that sell the goods advertised in the magazines. Of the magazines that I have already mentioned, the proportion sold through equipment retailers in 1986 — the latest year for which figures are available—varied between 8 per cent. for The Great Outdoors and Footloose and 28 per cent. for Mountain and High Magazine.
When it is considered that over two thirds—69 per cent. —of all advertisements are placed by manufacturers whose goods are being sold in the retail outlets concerned, it is hardly surprising that a cosy little cartel has grown up between manufacturers, publishers and retailers, which has the effect of putting the interests of the consumer last. Also, it cuts out a substantial market share from mail order houses, which can afford to sell goods more cheaply but are being denied the opportunity to advertise such a service where it would be most effective. We should not be surprised that in 1986 only 3 per cent. of advertisements by manufacturers contained prices.
It is worth rehearsing, if only to nail them down, the arguments put forward in defence of the policy that I have outlined. It is suggested that potential customers would use a combination of retail shops and the magazines to identify the goods they required and then order them direct from mail order houses. To the extent that such concern is justified—it is clearly not justified when the

1135
goods need to be fitted or where specialist advice is needed from the shop on the type of equipment and its use—it should be pointed out that other businesses use the existence of mail order as a spur to efficiency. I can see no reason why retailers concerned with the sports and recreations I have mentioned should not do so.
It is suggested that those specialist retailers who stock the magazines concerned would cease to do so if they contained advertisements for goods at below the price that the retailers were offering. Again, in so far as this fear is justifiable, it should be pointed out that an average of 79 per cent. of the circulation of the magazines concerned is through newsagents. Clearly, if a retailer decides not to stock the magazines there will not be great difficulty for the potential customer in obtaining them.
What is surprising, and a little worrying, in respect of climbing in particular, is the argument raised by the British Mountaineering Council, which is supposed to look after the interests of climbers, that, because mail order firms cannot offer advice on equipment and its uses, and because, in the BMC's opinion, bad equipment is the most serious safety problem in mountaineering and fell walking, customers should be forced—despite their best interests — to take the opportunity of the advice offered by retailers, whether or not that advice is correct, rather than go to mail order firms. Yet figures produced by the BMC itself show that, in 1984, out of 358 mountaineering accidents, at least 245 had nothing to do with equipment, and many of the remainder were far more likely to have arisen from the absence of equipment than from its poor quality or poor choice.
Although the surveys and discussions on which the recent report is based took place in 1987, there is every sign that the practice criticised has continued. A study of the April 1988 editions of High, Footloose, Country Walking and The Great Outdoors and the March edition of Climber shows that they contain advertisements for popular branded goods such as Silva compasses, Blue Water ropes, Helly Hansen outdoor clothing, Karrimor and Berghaus rucksacks, Brasher boots, Mammout ropes, Salewa crampons and North Face outdoor clothing, without any mention of price, although occasionally, it must be admitted, price guides are given in the small print in equipment reviews in the body of the magazines. At the same time, mail order companies, which are capable of making up a substantial order for part of the market, to the consumer's benefit, are restricted to advertising their existence together with such meaningless phrases as "10 per cent. off" and a request that the reader write in for his own catalogue.
It is made clear in the report, and is consistent with the observations that I have made, that the publishers of the magazines have no intention of changing their anticompetitive policy unless they are forced to do so, not least because they are backed in that policy by the manufacturers of most of the equipment concerned, and this is borne out in the report. The publishers of The Great Outdoors and Climber would be prepared to accept advertisements containing prices, including advertisements from mail order houses, if the rest of the industry did so.
The publishers of Mountain would prefer, and the publishers of High Magazine would demand, to be forced to change the policy rather than to do it voluntarily. The contempt of the publishers of High Magazine for the people who buy the goods which they advertise is shown
1136
in the comment quoted in the report when, referring to the need to support the retailers, as opposed to the mass market aimed at by the mail order houses, they say:
"the mass market was less knowledgeable and experienced consumers could, to an extent, safely be left to shop around, but there were dangers to the inexperienced."
The report reached certain conclusions, and it will be apparent from what I have said that I am in agreement with them. First, the policy of refusing advertisements, containing prices imposes an extra task on the consumer which amounts to a distortion of competition. Secondly, in the absence of the policy and its effect on the ability of mail order houses to advertise, goods would be cheaper to the consumer. Thirdly, it is necessary that all magazines with any significant market share should end the policy; otherwise the manufacturers and retailers will continue to be able and willing to distort the market.
There is further evidence of this ability to ignore the consumer in the fact that, although the Monopolies and Mergers Commission report was published in January, I have not been able to trace a single mention of it to date —I accept that I may have missed it by accident—in any of the magazines concerned.
Restriction of competition leads inevitably to censorship. It is for that reason that I support the final recommendation of the report, which is that the Secretary of State should make an order under section 56 and schedule 8 to the Fair Trading Act 1973, declaring it unlawful for publishers of specialist magazines intended for campers, climbers and walkers to operate the policy that I have described.
I know from my own experience many years ago as a climber, and now as a walker, that followers of outdoor pursuits are, at this time of the year, planning their summer activities and beginning to look at the often heavy investment in equipment that will be needed for those activities. We are not talking about expenditure of a few shillings. To equip a climber for a season in the Alps or a family of walkers with the boots and outdoor clothing that they all need involves considerable expenditure.
The draft order that is recommended by the report has already been advertised and the period designed for consultation, which has resulted in no more than a deafening silence, is all but over. My hon. Friend the Minister has it within his power, if he acts quickly along the lines suggested in the report, to make a significant difference to the budgets of large numbers of people in their chosen pursuits, both in terms of the quality of information available to them and of the cost of equipment that they will need. I hope that he will take that opportunity at an early date.
2.41 am
The Parliamentary Under-Secretary of State for Corporate Affairs (Mr. Francis Maude): I congratulate my hon. Friend the Member for Bristol, North-West (Mr. Stern) on his success in raising this subject, although not on the hour at which the debate is taking place. I also congratulate him warmly on the robustness with which he has defended the interests of consumers.
No one pretends that this issue affects a wide range of consumers, but, none the less, for the consumers who are affected, what has been identified here is a thoroughly anti-competitive practice which militates against their interests. I hope that no one needs persuading of the

1137
importance that we as a Government, and particularly as a Department, attach to competition and its effect on the interests of consumers.
Our recent White Paper enlarged on the importance that we attach to ensuring that the market works properly to allow the free play of competititive forces in markets for goods and services, unhampered by cosy cartels and monopolies which contain the potential for inefficiency and exploitation of the consumer. We must be alert to spot such anti-competitive practices and monopolies to safeguard consumers' interests.
The Monopolies and Mergers Commission makes an important contribution towards our aim of ensuring that markets work properly. The commission investigates monopoly situations that are thought to confer significant market power and reach a view on whether they operate against the public interest.
In the case of complex monopolies—as in the report which is the subject of the debate—the commission is also bound to consider whether those companies which jointly constitute the monopoly
"so conduct their actions in such a way as to prevent, restrict or distort competition."
I welcome the commission's analysis and conclusions in its report, published in January, in respect of this issue. The commission did not consider only the effects on competition of the magazines' policy of refusing to accept advertisements containing price information, except in limited circumstances. In reaching its adverse public interest finding, the commission had a duty to take into account all matters which appeared to it to be relevant.
It considered, for example, the arguments put to it that to compel the magazines to put an end to the practice in question would have detrimental effects on the markets for goods. Those arguments fell into three broad categories. First, it was claimed that consumers would suffer from a reduction in the number of specialist retailers in competition with mail order firms. Secondly, it was said that the range and quality of the goods available would deteriorate. Finally, the loss of specialist outlets, which was seen as an inevitable consequence of the reference policy, was thought likely to undermine the protection of campers, climbers and walkers by removing an important source of professional advice.
The latter view was presented forcefully to the commission by the British Mountaineering Council. Like my hon. Friend, I take issue with the British Mountaineering Council's claim that the ending of the reference practice will inevitably lead to a decline in specialist retailing.
The consumer makes his or her choice on the basis of a number of factors, which may or may not outweigh considerations or price. The service and expertise that a particular retailer offers may well be factors which would cause a consumer to pay a higher price than he or she would when that service was not provided. What is important is that the consumer should have a choice, the
1138
ability to choose the goods and services he wants at a price that he is prepared to pay. If the specialist retailers fulfil the important function that the British Mountaineering Council claims for them, they will not be seriously weakened in a more competitive environment.
It is worth noting that other bodies that made representations to the Office of Fair Trading during its investigations have supported that view. The Long Distance Walkers Association told the OFT that the policy restricted the freedom of choice of its members when buying equipment and that consumers required as much information as possible, including prices, before deciding from which kind of outlet to buy. If price information were available, the consumer would not invariably opt for the lowest prices.
The National Consumer Council also maintaind that competition was likely to be distorted and consumers' interests prejudiced if price information about some types of goods was withheld from consumers.
After considering all the representations made to it, the commission reached the overall conclusion that the reference policy operated against the public interest in three respects. First, it prevented consumers from making an informed choice of product. Secondly, it restricted price competition between specialist retailers and mail order companies that sell at lower prices. Finally, it narrowed the range of prices at which goods are offered for sale and increased the average price level.
I announced to the House on publication of the report on 13 January that I accepted the commission's recommendation that an order should be made to remedy the adverse effects on the public interest which the commission identified. I considered it important that the prohibition on the refusal of advertisements containing price information should not apply just to one or a few magazines, as that could distort their market position by encouraging advertisers to turn elsewhere.
The advantage of an order is that it will apply to all those currently in the market, and, indeed, to any new entrants. A notice was published on 29 January setting out the proposed terms of the draft order. The closing date for representations is 7 March and I invite my hon. Friend and any other hon. Members wishing to make representations on the terms of the order to do so as quickly as they can.
I am confident that the action we are taking will be reflected shortly in changed practices by the magazines in question. I assure my hon. Friend that I shall be moving as swiftly as I reasonably can to bring that order into effect.
I am grateful to my hon. Friend for giving me the opportunity to discuss this matter and to explain the action that we have decided to take. It is important that such inquiries, although they are not wide in range, should be brought to public attention and the consequences understood.
Question put and agreed to.
Adjourned accordingly at thirteen minutes to Three o'clock.