Commons Sitting of 19 April 1989

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

    Information Technology
    Mr. Clelland: To ask the Chancellor of the Duchy of Lancaster what was the balance of trade in information technology in 1979 and 1988.
    The Chancellor of the Duchy of Lancaster and Minister of Trade and Industry (Mr. Tony Newton): For the information technology and electronic manufacturing sector the United Kingdom had an adverse balance of trade in 1979 of £444 million. In 1987, the latest full year for which figures are available, the adverse balance for this sector was £2,226 million.
    Mr. Clelland: Is that not a further example of the complete failure of the Government's industrial policy? Is it not time that the Chancellor of the Duchy and the Secretary of State got down to implementing a serious industrial policy for Britain? For example, will the right hon. Gentleman discuss with his right hon. and noble Friend the COCOM arrangements affecting trade with the Eastern bloc countries? If those arrangements were relaxed, would it not offer massive opportunities to British firms, mainly small firms, to export to Eastern bloc countries? Will the right hon. Gentleman do something about that?
    Mr. Newton: In the light of the hon. Gentleman's opening remarks, I should point out that the deficit in information technology doubled between 1978 and 1979, deteriorated dramatically in the early 1980s, and since then has remained broadly stable. I invite the House to draw its own conclusions from that. On the rest of the hon. Gentleman's question, I draw attention to the many opportunities that British firms have taken and, perhaps most important of all, the obvious significance of the recent decision by one of the world's leading electronics manufacturers, Fujitsu, to come and do business in Britain.
    Sir Ian Lloyd: In the light of the interesting report of the Select Committee on Trade and Industry on the subject, and in view of the fact that the rather regrettable deficit represents a large proportion of the total trade deficit, does my right hon. Friend consider the Government's response to the Select Committee report to be adequate?
    Mr. Newton: My hon. Friend will be aware that my right hon. and noble Friend the Secretary of State is meeting the Select Committee next week to discuss that
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    very matter. The Government have given their considered views in response to the Select Committee report. There are some differences of opinion, but well over half the Select Committee recommendations have been accepted or are already the subject of action.
    Mr. Stott: Is the Minister aware that last year the trade deficit in electronics was £3·9 billion—an increase of 15 per cent. on the previous year and accounting for almost one third of the total massive balance of payments deficit? In the past year alone, the deficit in electronics, telecommunications and audio equipment has risen by a staggering 40 per cent. In the light of those disgraceful figures, is it mot time that the right hon. Gentleman and his Department addressed themselves to the magnitude of the problem instead of contemptuously dismissing the recommendations of the Select Committee which at least attempted to point the Government in the right direction to rectify a quite disgraceful performance?
    Mr. Newton: First, I hope that the hon. Gentleman will acknowledge that, despite the size of the absolute figure, the deficit is a relatively small proportion of a very large market and represents less than 15 per cent. of the United Kingdom market. Secondly, as I hope that I have made clear, there is no question whatever of the Government having dismissed the Select Committee recommendations contemptuously. Thirdly, the most important single thing that the Government can do is what they have done with conspicuous success—to make this country a more attractive place for people to invest in and develop their businesses.

    Manufacturing Productivity
    Mr. Roger King: To ask the Chancellor of the Duchy of Lancaster what has been the growth in manufacturing productivity since 1979 (a) in Britain and (b) in other major industrial countries.
    The Parliamentary Under-Secretary of State for Industry and Consumer Affairs (Mr. Eric Forth): Between 1979 and the year to the third quarter of 1988, the latest period for which full international comparisons are available, manufacturing productivity, as measured by output per person employed, grew by 42 per cent. in the United Kingdom. The comparable figure for Italy is 38 per cent., for the United States 37 per cent., for Japan 31 per cent., for Canada 28 per cent., for France 26 per cent. and for the Federal Republic of Germany 17 per cent.
    Mr. King: I thank my hon. Friend for that reply. Does he agree that those are truly outstanding figures of achievement by British manufacturing industry? Does he also agree that many overseas companies investing in this country are finding that the levels of productivity achieved by their United Kingdom subsidiaries are at least equal and often greater than in their own countries? Is it not a fact that the chamber of commerce in Germany has identified that as a major factor in investing in Britain?
    Mr. Forth: Yes. My hon. Friend is correct to pay tribute to British manufacturing industry for its enormous achievements over the past several years. He is also right to recognise that it is the environment and framework provided by the Government that has enabled that to happen, and we should welcome it. We look for further improvements, but I believe that inward investment in

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    Britain, such as the recently announced investment by Toyota, Fujitsu and Bosch are examples of how the productivity record in Britain is now so good that it is attracting people here in enormous numbers.
    Mr. Madden: Will the Minister confirm that the British textile industry is one of the industries that has notched up considerable increases in productivity? Will he also confirm that the men and women who have co-operated in achieving that increased productivity have not had a fair share of the increased wealth that they have produced? Is he aware that their low basic rates of pay have created an over-dependence on excessive overtime working and that it is time that the men and women in the textile industry who have contributed towards increased productivity received a fair and proper share of the increased wealth they have created?
    Mr. Forth: Any judgment as to what constitutes a fair and proper share should be established between the trade unions, if there are any, and the employers in a particular industry. Employers will see that it is right that the terms and conditions they offer their work force have to be acceptable and sufficient so as to attract enough labour to the company to enable it to continue. We all recognise the great strides that have been made by our textiles industries and hope that they will continue, even against a background of difficult trading conditions.
    Mrs. Maureen Hicks: Does my hon. Friend agree that the vast improvement in productivity under this Government, whereby the average British employee produces 50 per cent. more than his counterpart in Japan, cannot have failed to impress and attract the Japanese and encourage them to choose the United Kingdom for Toyota —and what better location is there than the midlands?
    Mr. Forth: My hon. Friend is correct to pinpoint that aspect because it is important that we continue to set an atmosphere of success and productivity. In that way we shall continue to attract the type of investment that we have announced this week, which will provide employment for our people and continuing success in our economy. We welcome those developments and are confident that they will continue.

    Company Fraud
    Mr. Andrew MacKay: To ask the Chancellor of the Duchy of Lancaster what proposals he has for improving his Department's procedures in investigating those suspected of company frauds; and if he will make a statement.
    The Parliamentary Under-Secretary of State for Corporate Affairs (Mr. Francis Maude): In April last year the serious fraud office was established for the investigation and prosecution of serious and complex fraud. An increase in resources last year allocated to investigations by the Department of Trade and Industry has already resulted in such inquiries now being concluded in a much shorter time scale. In addition, following a review last year, the Companies Bill at present being considered in another place contains provisions which significantly improve procedures and extend powers for the investigation of companies.
    Mr. MacKay: Even so, does my hon. Friend agree that there is still a regrettably long delay before people are prosecuted for company fraud, which is damaging for all concerned, including those being tried? Does he also agree, as a one-time practising barrister, that one of the principal reasons why it takes so long is that the Director of Public Prosecutions and the Department find it difficult to obtain a conviction when there are jury trials? Does he agree that the House fluffed the opportunity to change to a judge and two laymen, as the Roskill committee recommended, and that that should be implemented as a matter of urgency in the next Session of Parliament?
    Mr. Maude: On the time scale, my hon. Friend will be delighted to know that in the past few years the average time for a Companies Act investigation has fallen from three years and five months to 18 months despite a general increase in the complexity of the investigations. I am sure that the House will welcome that marked improvement.
    My hon. Friend is right that for a few trials of exceptional complexity the Roskill Committee recommended trial by judge and assessors rather than by jury. That was the only significant recommendation that the Government did not accept and, as my hon. Friend said, it was highly contentious. We accepted a number of other principally procedural recommendations, which should make it easier for juries to deal with exceptionally difficult cases.
    Mr. Rees: Will the Minister look into the allegation of procedural confusion between the serious fraud office, his Department, fraud departments in the police force, the Crown prosecution service and the Attorney-General? With the best will on earth, people are getting the procedures wrong because they are too complicated.
    Mr. Maude: A degree of complexity is inevitable. I know of no country with as sophisticated a corporate structure as ours where it is possible for administrative matters of this kind to be dealt with in a neat and tidy way. Different functions have to be carried out, and prosecuting authorities must remain independent. I do not foresee much scope for streamlining administrative structures, but I foresee scope—we have worked extremely hard to achieve this—for ensuring that the processes are much swifter. We are having considerable success along those lines.
    Mr. Nelson: Does my hon. Friend agree that part of the answer may lie not in increasing the powers of the serious fraud office or of his Department, but in companies and their boards considering more adequately activities which may not necessarily amount to fraud but are certainly not intended uses of shareholders' money? Whether it concerns loans or activities wholly unassociated with the activities of a company—[HON. MEMBERS: "The Tory party."]—and whoever the non-executive staff or directors of a company may be, I suggest that the House should reconsider the proposals of the late Sir Brandon Rhys Williams on audit committees, which would allow such activity because it would be separately reported.
    Mr. Maude: I hear what my hon. Friend says. As my hon. Friend no doubt did, I had a number of fascinating discussions with our late friend Sir Brandon on the subject. I do not accept the argument that the simple existence of an audit committee solves all the problems. Directors currently have a duty to account to shareholders for the

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    way in which shareholders' funds are used. Proper means are available for shareholders to hold directors to account for the way in which funds are used.
    Mr. John Garrett: Why has not the inspector's report into the House of Fraser takeover been published, when no criminal proceedings are pending? If the Secretary of State is still awaiting the serious fraud office report, how is he able categorically to state that there have been wrongdoings?
    Mr. Maude: It was perfectly clear from the outset, and it was stated in open court in the Court of Appeal. The hon. Gentleman should know enough about the world to understand that a case is not referred to the serious fraud office unless there is some sign of wrongdoing.

    Consumer Rights
    Mr. Martyn Jones: To ask the Chancellor of the Duchy of Lancaster if he now plans to bring forward legislation affecting consumer rights.
    Mr. Forth: We intend to improve the protection given to consumers in a number of ways, including the introduction of regulations under the Consumer Protection Act 1987 on price indications at bureaux de change and changes to other legislation affecting consumers' interests.
    Mr. Jones: I thank the Minister for that reply, but is not the consumer getting an increasingly worse deal under this Government—who are supposed to believe in consumer choice—as a result of electricity and water price rises and private greed being put before public water and food quality? Is it not time that the consumer received a fairer deal?
    Mr. Forth: The consumer gets an excellent deal in the United Kingdom, partly as a result of the general productivity of manufacturing industry, to which reference was made earlier, partly as a result of competitiveness and choice in the market-place and partly —the hon. Gentleman was right to draw attention to this —as a result of excellent arrangements that have been put in place for the protection of consumers' interests in the process of privatising our major supply industries. All of that is ample evidence that consumers are extremely well served in the Britain of 1989.
    Mr. Riddick: Is my hon. Friend aware that at this very moment the main clearing banks are holding a press conference at which they intend to make an announcement about the £50 limit on cheque guarantee cards? I am sure that he will join me in hoping that the banks will announce that the limit is to be increased and that each bank will be able to set its own limit. Does my hon. Friend agree that it is disgraceful that the banks have been allowed to carry on this cosy little cartel which has operated against the interests of the consumer? Will he join me in supporting any moves to see that the Office of Fair Trading investigates that kind of closed shop?
    Mr. Forth: Such matters must primarily be matters for the banks themselves. It is for them to make a judgment on how best to deal with their consumers and customers in the market-place. Each of the banks must make its own judgment about how to respond to consumer pressure from time to time. I hope that they are prepared to take a
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    realistic view of the matter and to examine a limit which has stood for a long time, but it must be a matter for the banks themselves and I have no intention of seeking to interfere.
    Ms. Quin: Why is the Minister not proposing more fundamental improvements to the Consumer Protection Act 1987 so that, for example, agricultural produce is included and the unjustified exemptions in relation to product safety and liability are ended? Will the Minister also consider the introduction of environmental labelling such as exists in other countries so that the increasing number of consumers who are concerned about the environment can be sure that the products that they buy help the cause of environmental protection?
    Mr. Forth: On her second visit to the Dispatch Box, the hon. Lady is being slightly mischievous in seeking to lead me into concerning myself with matters of food policy which she and the House know fall principally and rightly to my right hon. Friend the Minister of Agriculture, Fisheries and Food, who is more than capable of dealing with all matters of food protection and food hygiene which come before the House.
    Mr. Harris: Can my hon. Friend tell the House whether he has undergone something of a conversion on the basic question of consumer rights in the short distance from his former place in the House to the Dispatch Box?
    Mr. Forth: I am confident that when my hon. Friend studies whatever proposals I may bring before the House from time to time he will find himself fully able to support them.

    Atlanta Sports Industries Ltd.
    Mr. Hardy: To ask the Chancellor of the Duchy of Lancaster if, in the light of the problems of Atlanta Sports Industries Ltd. of Hellaby, near Rotherham, he will take urgent action to bring in amending regulations under patent law.
    Mr. Forth: My Department is aware of this case, on which I have corresponded with the hon. Gentleman. As I understand the position, the problems of Atlanta Sports Industries Ltd. arose under copyright law, not patent law. The House will be aware that the Copyright, Designs and Patents Act 1988 has sought to remedy some of the weaknesses of the old law, but it cannot be retrospective. It is our intention that the detailed regulations will be in place by the summer.
    Mr. Hardy: Does the Minister recognise that deficiencies in the law have caused serious and possibly increasing difficulties to that business and probably to others? After all our letters, does the Minister not recognise that a successful and enterprising business is being held back by the deficiencies of his Department, not least because the problem arose as a result of the company accepting the invitation of his Department to attend a particular trade fair?
    Mr. Forth: I cannot accept that because a company has been helped by, in this case, the British Overseas Trade Board in attending a fair, the Government have any responsibility for transactions which may result from that. I believe that that is unreasonable. As the hon. Gentleman knows, most of the defects in the old law have been

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    remedied by the new law, but we cannot and should not make it retrospective. Much though I regret the circumstances in which the company finds itself, it is not a matter for Government and that must remain our position.

    European Regional Development Fund
    Mr. Knox: To ask the Chancellor of the Duchy of Lancaster what is the value of grants allocated to England from the European regional development fund since its inception.
    Mr. Newton: The value of grants allocated to England from the European regional development fund since its inception in 1975 is £1,602 million, out of a total United Kingdom allocation of £3,307 million. Since 1975 the United Kingdom has received a larger allocation from the European regional development fund than any other member state apart from Italy.
    Mr. Knox: It is a large figure. Does my right hon. Friend agree that the grants are making an important contribution to strengthening the British economy, and is he satisfied that the British people are fully aware of the scale of the grants?
    Mr. Newton: No, I suspect that people are not fully aware of the scale of the grants and I should be glad to join my hon. Friend in trying to improve their knowledge of that matter. It is encouraging that local authorities and others concerned with the areas that are eligible are increasingly aware of the grants and are being increasingly effective in preparing good plans and playing a key part in making sure that we get our due share of the money.
    Mr. Campbell-Savours: Is the Minister satisfied that west Cumberland is getting its fair share of those European moneys? Is he aware that in west Cumberland we have 43,000 sq. ft. of empty new factory in the middle of an enterprise zone in an area of high unemployment? Will he help us to find someone to occupy that factory? How about a bit of the Japanese money which seems to be circulating as we seem to have very little Japanese investment in west Cumberland? Can we have some?
    Mr. Newton: First, I welcome the warmth of the hon. Gentleman's implied welcome for some of the investment that has been going elsewhere. I am afraid that I am not in a position to direct Japanese companies, but I shall certainly draw their attention to the existence of one enthusiastic Member of Parliament.
    Mr. Soames: Is my right hon. Friend aware that my constituency is the engine room of the British economy and that the infrastructure has consequently suffered greatly, especially due to the parsimony and greed of the Department of Transport? Will my right hon. Friend have a word with those responsible for the European regional development fund to see whether they can give us any assistance to build some better roads?
    Mr. Newton: I must say that the prospect of the European Commission proposing the distribution of funds designed to help those who are having more difficult times for what my hon. Friend describes as the engine room of the British economy seems remote. I hope that my hon. Friend will allow me not to comment on his remarks about
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    my right hon. Friend the Secretary of State for Transport, save to say, within the terms of collective responsibility, that I cannot quite agree with my hon. Friend.
    Mrs. Clwyd: I am delighted that such opportunities exist in England, but will the Minister draw to the attention of the European regional development fund and to incoming industrialists the fact that my constituency of Cynon Valley, which contains the deprived town of Mountain Ash and 45,000 sq. ft. of factory space—2,000 sq. ft more than that in west Cumberland—would be delighted to have any industrialists come to our area, where one in four men are unemployed?
    Mr. Newton: The hon. Lady will have noticed that I gave not just a figure for England but a much larger figure for the United Kingdom which, of course, includes the area in which the hon. Lady is interested. I will draw the attention of my right hon. Friend the Secretary of State for Wales to the hon. Lady's remarks, but his response may be that, in general, Wales has not been doing too badly recently.
    Sir Hal Miller: Is my right hon. Friend aware that parts of Hereford and Worcestershire have recently been removed by the European Commission from the scope of objective 2 of the European regional development fund? In those circumstances, will he confirm that the parts which remain United Kingdom assisted areas will not suffer in any way in terms of applications for regional selective assistance from the Government?
    Mr. Newton: I am aware of the point that my hon. Friend makes and I can confirm that the Commission's proposals for the distribution of objective 2 money have no effect on the existing entitlement to assisted area status in this country and the help that goes with it. There is no direct coincidence between the two kinds of area.
    Mr. Caborn: What proportion of the regional funds to which the Minister has just referred has been applied under the additionality rule, on which I understand that the regional funds have been allocated? Will he assure the House that the new European regional development fund and the Community's new structural fund arrangements will be additional to the national spend on regional assistance?
    Mr. Newton: The agreed aim of everybody involved is that the European regional development fund shall add to the amount of investment taking place in development areas. The hon. Gentleman will know as well as I do that there can be a great deal of argument—I will not pretend that there is not—about precisely what that means. I do not think that I can give a more specific answer, because the whole question of the allocation under what has recently been announced in defining the objective 2 areas depends on the submission of plans, not all of which have yet been submitted.

    Industry-School Links
    Mr. Hunter: To ask the Chancellor of the Duchy of Lancaster if he will make a further statement on his policy to increase links between industry and schools.
    Mr. Forth: One hundred and forty-six DTI advisers on enterprise and education are now working, and the education service has asked them to find around 100,000 pupil work experience places in their first year.
    My Department is also now offering a teacher placement service, which is being managed on our behalf by Understanding British Industry. I am pleased to announce that we have appointed a director for the service —Mr. Peter Davies. More than 80 local bodies have already expressed interest in offering the service, and the first organisers are in place. Teachers will be able to choose between a number of high-quality briefing packs. This year provides the opportunity to test both these packs and the matching service, to ensure that it all runs smoothly. The teacher placement service has been developed from the successful pilot schemes run for my Department by UBI last year. I will place in the Library a copy of the UBI's report.
    Mr. Hunter: While acknowledging that industry is responding positively to the need for closer contact with schools, may I ask my hon. Friend whether he accepts that more needs to be done by all interested parties? Is he aware that in areas of high job creation, such as Basingstoke, followed closely by Crawley, the shortage of skills is becoming yet more acute, and that every measure must be taken to ensure that our school leavers have the attitude and the aptitude to contribute positively to the industrial and economic life of the country?
    Mr. Forth: My hon. Friend has summed up the problem extremely ably. We all recognise the increasing difficulty of skill shortages in many parts of the country. We have gone a long way towards recognising that this problem arises, as much as anything, from the schools. That is why the education and enterprise initiative seeks —and I believe that it has made a very good start—to address the problem of the lack of what might be called enterprise culture and understanding in many of our schools, which gives rise to a lack of proper career and educational counselling of youngsters. We hope that we shall see a lot of young people getting work experience and, more important, that we shall see teachers getting experience in the business world so that they may better advise and guide their public towards careers in the wealth-creating sector.
    Mr. Skinner: I wonder whether part of one of these briefing packs that are to be issued to schools will contain information about fraud in the boardroom. Will it include, for instance, the city page of The Daily Telegraph of 15 April 1989, where it is reported that Blue Arrow loaned £25 million to de Savary and his gang; that, under section 432 of the Companies Act, the shareholders should have been fully informed of that matter, but were not; and that one of the directors of Blue Arrow is none other than the right hon. Member for Chingford (Mr. Tebbit)? Since that right hon. Member is supposed to represent those shareholders, he ought to be asking the Secretary of State to order an investigation, but as has is not here, I am doing it for him.
    Mr. Forth: I welcome the hon. Gentleman's interest in the wealth-creating sector. I shall send him one of these packs, in the hope that it will increase his understanding of the process of wealth creation.
    Sir John Stokes: Is not this a serious matter? Would it not be helpful to school leavers if leading industrialists could be more articulate about the scope for getting things done in industry, compared with some other professions, which I shall not mention? Why are these industrial tycoons such shy violets? Why can they not tell us how they make money and how that benefits the country also?
    Mr. Forth: My hon. Friend has made an important point. We hope that people in industry and business will be much more forthcoming and co-operative in trying to carry their message into schools and colleges so that young people may better understand how wealth is created and that it is only by the creation of wealth that we as a society can provide all the other services that we want to provide for our people.
    Dr. Bray: Is the Minister aware that there is a clear understanding in industry that healthy links with schools depend on a parity of esteem and resources on the two sides, and that there is major concern that schools are simply not getting the teachers, particularly of science and mathematics, whom they need? Is he aware that, this year, applications were down by 25 per cent. for physics and by 16 per cent. for mathematics? Will the DTI lend its voice in support of industrialists who demand greater resources and esteem for teachers?
    Mr. Forth: I am confident that my right hon. Friend the Secretary of State for Education and Science is aware of existing problems, and is tackling them with great vigour. The esteem in which the teaching profession is held is a matter for it. I hope that the conduct and dedication of teachers in future will help to increase the esteem in which they are held.
    Mr. Ian Bruce: Does my hon. Friend agree that one of our biggest problems is schoolchildren's perception of engineering, inventing and manufacturing, and that we must sell the status of those occupations? Without them Britain will never rebuild its industrial and commercial strength. I am not one of those, and I am sure that the Minister is not, who say that Britain cannot manufacture products competitively. We must demonstrate to young people that engineering, inventing and manufacturing are the future for Britain.
    Mr. Forth: I am grateful to my hon. Friend for making that point. I recently discussed those matters with the Engineering Council. It is acutely aware of the matter, and is mounting a positive and active campaign to carry the message to where it will be heard and understood. Our record in manufacturing productivity increases, to which reference has been made today, amply demonstrates that we still have the ability and the will to make improvements and to continue to make manufacturing and industry generally an attractive proposition for our young people.

    Multi-Fibre Arrangement
    Mr. Kirkwood: To ask the Chancellor of the Duchy of Lancaster if he will make a statement on Her Majesty's Government's policy on the future continuation of the multi-fibre arrangement within the current negotiations on the general agreement on tariffs and trade.
    The Minister for Trade (Mr. Alan Clark): We are committed by the GATT declaration at Punte del Este to

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    formulate "modalities" for the eventual return of trade in textiles and clothing to strengthened GATT rules and disciplines.
    The United Kingdom attaches the highest importance to the strengthening of GATT rules—in particular, a more effective safeguards clause to allow defensive action to be taken against sudden and damaging surges in imports, and better disciplines on unfair trade and on counterfeiting.
    We look for a reduction in barriers to trade and better access to developing country markets, especially the newly industrialised economies. The committee acknowledged the contribution which all participants could make to the process of liberalisation, while preserving our existing rights under the present MFA.
    Mr. Kirkwood: Having regard to recent developments in the GATT multilateral trade talks in Geneva and the importance of those developments to the knitwear industry in my constituency and in other areas, will the Minister guarantee that he will agree no further changes to the trading system for textiles and clothing unless he secures some of the aims that he mentioned, such as the effective prevention of dumping and subsidies, the GATT safeguard clause, and the dismantling of excessive trade barriers, which effectively block our exports in trade and clothing items?
    Mr. Clark: I accept that all the factors that the hon. Gentleman mentioned must be taken into account in considering the degree to which the provisions of the multi-fibre arrangement are relaxed or dispensed with. Safeguards clauses are important. As many hon. Members with textile constituencies know, the existing mechanism is unsatisfactory. It is cumbersome and slow. I will ask my officials to look at possibilities for improvements and making better use of the provisions under article 19.
    Mr. Brandon-Bravo: My hon. Friend will know that many hon. Members are legitimately concerned about the undeveloped world, but that same lobby also seeks completely unrestricted entry into this country of textiles from the undeveloped world. Such a policy could destroy tens of thousands of jobs in the Nottingham and east midlands area. I hope that we will not go down a road that will destroy those British jobs.
    Mr. Clark: My hon. Friend is right. Paradoxically many of those jobs are held by former citizens of, or immigrants from the very countries for which the lobby that he identifies seeks unrestricted access.
    Mr. Cryer: Will the Minister make a clear statement that the Government are committed to the renewal of the MFA? The Confederation of British Wool Textiles Ltd., the employers' organisation based in Bradford, is concerned that there has not been a clear and unambiguous statement, particularly as the industry is faced with a Community quota by 1992, instead of a quota for each member state, to make sure that there is a burden-sharing arrangement for the whole of the EEC. Emloyers are also fearful of increased water charges. The effect of those developments will be a loss of jobs. Will the Minister make a clear commitment to maintain the textile industry?
    Mr. Clark: There is no commitment to maintain the MFA. The commitment is to formulate modalities for the eventual return of trade in textiles and clothing to
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    strengthened GATT rules. That has been unchanged for the last 15 years since the MFA was promulgated. As I have said on the Floor of the House in debate on the subject, that return is dependent on a satisfactory solution of a very large number of other related problems.
    Mr. Neil Hamilton: Does my hon. Friend agree that the commitment of the hon. Member for Roxburgh and Berwickshire (Mr. Kirkwood) to Liberalism appears to be somewhat lukewarm in the attitude that he has evinced in his supplementary question? Does my hon. Friend also agree that arrangements such as the multi-fibre arrangement are an arbitrary restriction on consumer choice and on the export potential of Third world countries, and therefore contribute to their impoverishment? Why do we support free trade in every other area of the economy but not in this?
    Mr. Clark: It is not for me to comment on the esoteric varieties of policy that the Liberal party adopts at any given moment. Consumers do not have a high purchasing power when they are out of work. There are large numbers of consumers who constantly seek advice about buying British goods. There is no special adjunct of faith that dictates and obliges that consumers should always buy the cheapest thing. They consider other factors in making a consumer choice.
    Mr. Henderson: The Minister for Trade's personal commitment to the MFA is recognised in the House, and the arrangement is an important way of regulating trade between the far east and ourselves. Is he not also concerned about the growing trade gap in textiles with the EC, which is now £1.75 billion? What does he think has caused that gap? If he is concerned about it, what action will he take to try to narrow the gap?
    Mr. Clark: That is a completely different subject from the multi-fibre arrangement. Trade with the EC is not governed by it. Competition, measured in terms of delivery, quality, price and so on, is the yardstick. There are elements where Government subsidy is present. Those are subject to Commission scrutiny. If any hon. Member advises me of cases where EC subsidies affect the balance of competition, we will immediately consider them closely.

    New Businesses
    Mr. Tredinnick: To ask the Chancellor of the Duchy of Lancaster how many new businesses have been established in Leicestershire each year since 1983; and if he will make a statement.
    Mr. Maude: The numbers of new businesses registered for VAT in Leicestershire for each of the five years from 1983 to 1987 were respectively, 3,003, 2,885, 3,033, 2,961 and 3,347. During that period the total numbers of businesses registered has increased every year, growing by 13 per cent. overall.
    Mr. Tredinnick: Is my hon. Friend aware that in Hinckley, the principal town in my constituency, demand for industrial land far outstrips supply, that the council has just had to release another 120 acres, and that 158 acres are currently under consideration by private developers? Does he agree that that demonstrates the effectiveness of

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    Government policies and the prudent policies adopted by the Conservative-controlled Hinckley and Bosworth borough council?
    Mr. Maude: My hon. Friend has it exactly right. Because my constituency borders that of my hon. Friend, I know from my local knowledge that there has been a considerable growth of economic activity in our area. New companies are doing well, employment has increased substantially and the prosperity of the area has grown markedly.
    Mr. Ashby: Does my hon. Friend agree that an important element in industrial growth and in the growth of new industries is the infrastructure? Within my area of north-west Leicestershire, an excellent road system is being built, including the new M42-A42 road. However, an important element of that road system is correct and proper road signs so that people who want to go to the new industries in towns such as Coalville and Ashby know how to get there. Will my hon. Friend speak to the Secretary of State for Transport to ensure that there are properly marked road signs?
    Mr. Maude: I know that a great many people are seeking to find a way to my hon. Friend's constituency. I shall certainly speak to my right hon. Friend about whether steps can be taken to enable them to find their way to it more easily.

    Cordless Telephones
    Mr. Wood: To ask the Chancellor of the Duchy of Lancaster what progress is being made in discussions between his Department and the industry in connection with the development of the next generation of cordless telephones.
    Mr. Forth: We have issued some 2,000 copies of the consultation document "Personal Communications in the 1990s" and held initial briefing meetings with a number of companies. We are asking for responses to the document by 28 April.
    Mr. Wood: I thank my hon. Friend for that response. Will he ensure that the discussions are sufficiently brisk and that the aims are sufficiently straightforward to enable us to have successful competitive manufacturing in that sector, without undue Government or other bureaucratic delays that could adversely affect our competitive position?
    Mr. Forth: I can give my hon. Friend that undertaking, but I believe that he will agree that we have already demonstrated as a country remarkable success in that area due to the liberal regime allowed by the Government. We will continue with that policy in the hope that we will continue to be world leaders in what will be an important industry in the future.

    Mergers and Acquisitions
    Mrs. Fyfe: To ask the Chancellor of the Duchy of Lancaster what information he has on the percentage increase in expenditure on mergers and acquisitions since 1979.
    Mr. Maude: Expenditure on acquisitions and mergers by industrial and commercial companies within the United
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    Kingdom in 1988 is estimated to be about £22 billion. In current prices, that is about 13 times greater than the 1979 total of about £1·75 billion.
    Mrs. Fyfe: Does the Minister agree that, if Scottish industry did not have to spend so much effort in fighting off mergers and takeovers, it could create new work, which might help a constituency such as mine where the official unemployment rate is 22 per cent.?
    Mr. Maude: The idea that merger and acquisition activity reduces employment is manifestly absurd. Over the period when merger and acquisition activity has been at its height, unemployment has come down and employment has risen to record levels. The premise on which the hon. Lady bases her question is utterly absurd.
    Mr. John Marshall: Does my hon. Friend agree that the Government should be congratulated on not allowing the bid for Scottish and Newcastle Breweries? Scottish Members should congratulate my hon. Friend rather than indulge in negative comments.
    Mr. Maude: My hon. Friend is right to draw attention to the careful scrutiny of that bid by the Monopolies and Mergers Commission. As a result of the commission making an adverse public interest finding, the bid was not allowed to proceed. I did not hear all that many cheers from the Opposition when that happened.
    Mr. Foulkes: Does the Minister think that it is wise for former holders of his ministerial post subsequently to take up paid appointments as advisers on mergers and acquisitions? Is that not a misuse of the information and knowledge gained in that post?
    Mr. Maude: No, Sir.
    Mr. Charles Wardle: Precisely because merger activity has increased so much would it not make sense, particularly because of the conflict of interest that exists between investment management and corporate finance, to bring the role of merchant bank advisers under the aegis of the Financial Services Act 1986, as some of us recommended in the debate on the financial services White Paper four years ago?
    Mr. Maude: My hon. Friend was lucky enough to be privy to discussions on that Bill at which I was unable to be present. I suspect that his proposal to extend the scope of the Financial Services Act into an area which, at the moment, it does not cover would not be at all welcome. There are proper mechanisms for making sure that conflicts of interest do not arise and that proper interests are preserved. It would not be right to extend the system in the way that my hon. Friend suggests.

    Hosiery and Knitwear Industry (Leicester)
    Mr. Janner: To ask the Chancellor of the Duchy of Lancaster if he will make a statement on the current state of the hosiery and knitwear industry in Leicester.
    Mr. Alan Clark: The hosiery and knitwear industries continue to make a major contribution to Leicester's economic and industrial development. They continue to adapt to technological and other changes, to the further benefit of local and national economies.
    Mr. Janner: While noting the Minister's tribute to the hosiery, knitwear and textile industries may I ask him whether he recognises that there is still grave concern in those industries about the continuing recession and that there is also concern in my constituency about the redundancies in Coras? How many jobs have been lost in Leicester in the hosiery and knitwear industries in the last few years and what is the Minister proposing to do, if anything, to help those industries to survive in the light of the increased water charges that are now on the way?
    Mr. Clark: The hon. and learned Gentleman sometimes reproaches hon. Members for not addressing him as learned, although I do not think that he aspires to the sobriquet of gallant. As a man of the law, the hon. and learned Gentleman will know that there are many international restrictions. Trade in textiles is governed by treaty, by arrangement and by restraint arrangements.
    Mr. Skinner: And the Minister does not like them.
    Mr. Clark: I would tighten them up if I could. The hon. and learned Gentleman well knows that any interference with the flow of trade outside those limits would lay one open both to judicial review and to legal action by importers.

    Export Promotion
    Miss Widdecombe: To ask the Chancellor of the Duchy of Lancaster if he will make a statement on progress on recent initiatives on export promotion.
    Mr. Alan Clark: Since the launch of My Department's export initiative about 3,000 inquiries have been received in response to our advertisements in the press alone. I believe that the initiative has been well received by British industry and is succeeding in encouraging more businesses to export successfully.
    Miss Widdecombe: Is it true that the initiative is costing about £100 million per annum? If so, what is likely to be the long-term effect on our balance of payments? Will it repay this investment?
    Mr. Clark: The total amount expended in export promotion by the Government is £100 million per annum, or rather more. The initiative has a number of different headings, chiefly related to the giving of advice and information to would-be exporters. Export initiatives single market campaigns, such as Focus Germany and the Opportunity Japan campaigns have been extremely successful. During the year in which the campaign was in place, our exports to Germany increased by 17 per cent. compared with an international average increase of 3 per cent.
    Mr. Dalyell: Is the Minister satisfied with the operation of the exchange equalisation account?
    Mr. Clark: The exchange equalisation account is a matter for my right hon. and hon. Friends in the Treasury. In so far as it affects the exchange rate, plainly, one has to accept that it is a transient and temporary phenomenon. Many traders would probably prefer it not to exist or to operate at all.

    Information Technology
    Mr. Eadie: To ask the Chancellor of the Duchy of Lancaster when he expects Britain to have a trade surplus in information technology.
    Mr. Newton: It is not possible to make a prediction of the kind that the hon. Member seeks. What is important is that the Government's economic policies have led to record levels of productivity, output and investment and have helped to attract companies like Fujitsu, which will provide a major boost to our balance of trade in information technology through both exports an import substitution.
    Mr. Eadie: I thank the Minister for his answer but would it not have been better, in all candour, for him to have said "unlikely"? Since, in reply to a similar question, the Minister made it clear that the Government policy was to make Britain attractive to foreign investment, and since we are told that there is a lot of footloose capital and industry in this country which apparently prefers to invest abroad rather than in Britain, how does that square with the Minister's policy that he has enunciated to the House?
    Mr. Newton: I see no inconsistency whatever. Not only are a lot of people from overseas investing here, as has become clear in recent weeks, but there has been a substantial increase in the rate of investment by Britons in manufacturing industries and in other sectors. Our aim is to make the whole country a good place to invest in for foreigners and those already here, and we have succeeded in that.

    Liquidations (Investor Losses)
    Mr. Foulkes: To ask the Chancellor of the Duchy of Lancaster what information he has concerning losses to investors in financial institutions which have gone into liquidation over the last 12 months.
    Mr. Maude: My Department only keeps records of those financial institutions in respect of which it has itself applied for compulsory winding-up orders. In the past 12 months such action has been taken against eight financial institutions. In these cases the losses to investors are estimated at £4 million. This figure does not include cases where winding-up orders were sought by the Securities and Investments Board.
    Mr. Foulkes: Is the Minister aware that Greenan Investment Management in Ayr went into liquidation with a loss to investors of £1 million? Following this up, I find that some of those investors will not be fully compensated by the investors' compensation management scheme. Will the Minister look into the matter to see whether there are ways in which compensation can be improved?
    I understand from Sir Anthony Barrowclough, the Parliamentary Commissioner, that his report on Barlow Clowes, which was expected this month, will take several months more because of the complicated nature of the investigations into the affair, which he is supervising personally. In the light of that, does the Minister think that it is fair to ask investors to wait many more months before they have any chance of receiving compensation, or will he now consider some kind of scheme to help those who have

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    lost very substantially indeed, some of whom are retired people, including retired miners in my constituency, who are now in great difficulties as a result of the collapse?
    Mr. Maude: I am very much aware of the distress and hardship caused to people whose money was not repaid to them following the liquidation of Barlow Clowes. I cannot comment on how long the Parliamentary Commissioner's investigation will take; it is a matter entirely in his control and it is for him to draw it to a conclusion when he can. All I can say is that my Department has co-operated fully with his investigation at every stage.
    As regards providing compensation at this stage, I must tell the hon. Gentleman that I see no reason now for changing the view that we reached in the autumn, when we concluded, on the basis of Sir Godfray Le Quesne's detailed and exhaustive report, that the Department's handling of the case had been careful and considered and that, on those grounds, there was no basis for making ex gratia payments.

    Merchant Ships (Orders)
    Mr. Clay: To ask the Chancellor of the Duchy of Lancaster what recent information he has on new orders for merchant ships.
    Mr. Newton: Based on information from Lloyd's register, new orders as well as completions in 1988 were at the lowest level for many years. The most recent figures
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    suggest that a period of recovery may be beginning, but there is little evidence that it will be lasting and it is expected that the world shipbuilding market will remain dominated by considerable excess capacity for several years.
    Mr. Clay: The Minister must also be aware of figures from Lloyd's maritime information service which I have sent him. They demonstrate conclusively from the most reliable source in the world that for the kind of ships built by British shipyards and, in particular, North East Shipbuilders in Sunderland, the last quarter of 1988 was the best for new orders for many years and that what we were told by the Government throughout last year and the year before, which was that there was no evidence of an upturn, has proved categorically wrong. We also now know that in 1988 prices for new build ships rose by 30 per cent. in one year. Has not the penny finally dropped that the Department of Trade and Industry has got this wrong and that this is a crazy time to close major British shipyards?
    Mr. Newton: I have two comments. First, the hen. Gentleman puts more weight on the statistics to which he referred than they will bear. Secondly, whatever the state of demand for shipbuilding, it is necessary—as it was, unhappily, in the case of North East Shipbuilders Ltd. —to consider the prospects against the background of those seeking to run the yards so that they will be able to build such ships in a competitive and commercial way.

Points of Order
3.30 pm
Mr. David Winnick: On a point of order, Mr. Speaker. I wish to raise the matter of separation of powers. As I understand it, the police are not an arm of the Government. No information has been given to the House about the way in which a list of five people, shortlisted for the position of Scotland Yard's director of public affairs, was given to Scotland Yard by the Prime Minister's chief press secretary.
I consider that the functions of the police are a matter that should be of concern to the House. If the Prime Minister's chief press secretary now has the additional function of telling the person in charge of the Metropolitan police who should be shortlisted for such an important position, the House should be notified and we should be able to table questions.
Mr. Speaker: That may well be a matter of interest to the House, but it is not an appropriate subject for a point of order.
Mr. Eric S. Heffer: On a further point of order, Mr. Speaker. I should like your advice on a matter of great importance—certainly to the people of Liverpool. The Sun today contains a front page story headlined "The Truth". It is not in inverted commas. The story is based on a statement made by the hon. Member for Sheffield, Hallam (Mr. Patnick). It says:
"Irvine Patnick revealed that in one shameful episode, a gang of Liverpool fans noticed that the blouse of a girl trampled to death had risen above her breasts."
I do not intend to continue; it is so painful to read it.
The article also states that the hon. Member for Hallam spoke to officers on duty. A police inquiry is taking place at the moment and I should like to know whether the hon. Gentleman—I notified him that I would be raising this matter in the House, and if he is not here that is his business—will be asked to give evidence to the police inquiry.
I find it difficult to raise this matter because the other day in the House I said that we should not be looking for scapegoats. On the front page of The Sun is a picture of Superintendent Marshall. We should not look on him or anybody else as a scapegoat. However, the hon. Member for Hallam is now suggesting that Liverpool people did the most despicable things to their own people. All the television programmes showed evidence to the contrary.
I do not want to become too angry and emotional about this, but I find it degrading and disgusting—[HON. MEMBERS: "What is the point of order?"] The point of order is clear. It is time that hon. Members showed some dignity, restraint and understanding. If they think that this is funny, they should explain it to my people in Liverpool who are now in deepest grief because 95 of their people died on Saturday. May I have an assurance, Mr. Speaker, that that hon. Member will go to the police inquiry and give the so-called evidence? We need that evidence to prove beyond doubt that matters are going beyond the bounds of decency.
Mr. Speaker: That is not a point of order for me. The whole House has been deeply affected by this major tragedy. I think that it would be wisest for us all to await the result of the inquiry and not to speculate.
Mr. Tam Dalyell: On a point of order, Mr. Speaker. Have you received a request from a Minister to make a statement clarifying the position of two senior Government press officers who, we learned last night from a BBC programme at 7.20 pm, are being disciplined for having argued that they were required to take action that infringed party political neutrality? The programme, which lasted for 40 minutes, was about the Government's chief press officer, the most important man—
Mr. Speaker: Order. This is an Opposition day, in which a large number of hon. Members wish to participate. I have received no request for a statement. The hon. Gentleman must find other methods of raising the matter before the House: he cannot do so through the Chair.
Mr. Robert N. Wareing: On a point of order, Mr. Speaker. My hon. Friend the Member for Liverpool, Walton (Mr. Heffer) referred to a comment made to The Sun by the hon. Member for Sheffield, Hallam (Mr. Patnick). Do you agree that on Monday you called that hon. Member to speak in the debate? Do you also agree that he made no such comments to the House then? Would you advise hon. Members, Mr. Speaker, to be temperate in their language when commenting on the events at Sheffield and not to repeat to newspapers hearsay that they are not willing to put to the test by raising it in the House first?
Mr. Martin Flannery: Further to that point of order, Mr. Speaker. This is one of the few places where we can say something at such a tense time in Sheffield.
I am the Member for Sheffield, Hillsborough. On Saturday night, when I went down to the ground, I was not even admitted to the premises. The hon. Member for Sheffield, Hallam (Mr. Patnick), whose constituency is nowhere near Hillsborough, could have gone into the mortuary and talked to policemen on duty, while I, as Member for Parliament for that general area, could not even get into the ground. That is beyond me. It seems to me that the hon. Gentleman is doing precisely what my hon. Friend the Member for Liverpool, Walton (Mr. Heffer) has described.
Mr. Speaker: I say again that this is a matter by which we have all been deeply affected. I suggest that we all keep our counsel until the result of the inquiry is known.
Mr. Bob Cryer: On a point of order, Mr. Speaker. A number of questions have been raised about the suppression of the Department of Trade and Industry report on the Harrods takeover. I wonder whether you have received any notification from the Department that it intends to publish the report, or that a Minister intends to make a statement to the House.
As you know, Mr. Speaker, the matter has certain implications. In the report, the Sultan of Brunei is alleged to have supplied some money for the takeover. As he is apparently on close terms with the Prime Minister, it is naturally a matter of great concern that the report should be published as soon as possible to eradicate the rumours that are circulating.
Mr. Speaker: I have not received any such notification.
Mrs. Maria Fyfe: On a point of order, Mr. Speaker. I seek your advice on a matter of

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serious concern that has arisen this week. The Secretary of State for Social Security has sent to DSS officers in Scotland a memorandum giving them instructions on taking unpaid poll tax from people's income support. The memorandum is based on a statutory instrument which has been prayed against but which has not yet been debated on the Floor of the House. Has the Secretary of State the right to give instructions to DSS officers based on a statutory instrument to which the House has not given its approval?
Mr. Speaker: I think that the hon. Lady should seek advice when that comes into operation. I have no knowledge of the matter that she has raised.
Mrs. Fyfe: May I ask you, Mr. Speaker, at least to look into the matter?
Mr. Speaker: Yes, I shall certainly look into the matter.
Mr. Winnick: You stated, Mr. Speaker, that right hon. and hon. Members could pursue matters by other means. As you, Mr. Speaker, decided on such matters, may I have an assurance that, if I wish to table—as I probably shall —questions relating to Mr. Bernard Ingham's role in the recommendation as to who should be appointed director of public affairs at New Scotland Yard, I will be able to do so? Mr. Ingham is now virtually the deputy Prime Minister, and we should surely have an opportunity to discuss his role.
Mr. Speaker: Certainly, and the hon. Gentleman will have opportunities to do so—but not through me. I am not responsible for what he does.
Mr. Dalyell: On a point of order, Mr. Speaker. Rather than right hon. and hon. Members raising points of order, would it not be much better if the Government themselves, in the traditional way, made a statement, or even had a written question planted, about the disciplining of civil servants? Why should right hon. and hon. Members have to demand information on every possible occasion? Is it not for the Government to show the House what is happening in respect of the disciplining of civil servants?
Mr. Speaker: I am placed in great difficulty because I cannot give answers on matters for which I am not
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responsible. I am here to ensure that the rules of the House are observed. I am not responsible for what is said by right hon. and hon. Members, provided that it is in order.
Mr. Neil Hamilton: On a point of order, Mr. Speaker. Instead of Opposition Members coming to the House to crowd out the debating time available to the right hon. Member for Yeovil (Mr. Ashdown) and to his right hon. and hon. Friends with bogus points of order in prime time, and to make statements that they would not dare to make outside the House because they would be actionable as defamatory, would it not be better if a change were made to the rules of the House so that Opposition Members could have a whole day set aside for bogus points of order and they could all be raised together?
Mr. Speaker: I should not like to be in the Chair for that.
Mr. Dennis Skinner: On a point of order, Mr. Speaker. The fact that Bernard Ingham is not a Member of Parliament creates some difficulties for you, but there is a way out of them. Mr. Ingham has plenty of admirers on the Conservative Benches, and I suggest that one of them takes the Chiltern Hundreds and nominates St. Bernard and his dog so that he can stand on behalf of the Tory party. Then we can deal with him.

BILL PRESENTED
  ANTI-HACKING
  Miss Emma Nicholson presented a Bill to create offences of unathorised access to electronically stored data and of its transmission; to confer powers of monitoring search, seizure and destruction of such data; and for related purposes: And the same was read the First time: and ordered to be read a Second time upon Friday 7 July and to be printed. [Bill 120.]

  EUROPEAN COMMUNITY DOCUMENTS Ordered,
  Orderes,
  That European Community Document No. 10470/88 on batteries and accumulators be referred to a Standling Committee on European Community Documents.—[Mr. Dorrell.]

Leasehold Reform (Commonhold)
3.41 pm
Mr. Dudley Fishburn: I beg to move,
That leave be given to bring in a Bill to reform leasehold.
Many hundreds of thousands of people live in flats that they own under long leases, yet those Englishmen's homes are someone else's castles. The unsatisfactory nature of leasehold reform as applied to long leases for mansion blocks has long been recognised, although it is only recently that the abuses of the system have dramatically grown.
There have been a number of attempts at leasehold reform by various Governments as well as by individual parliamentarians. My distinguished predecessor as Member for Kensington, the late Sir Brandon Rhys Williams, was for ever in the House introducing measures to allow residents of mansion blocks to acquire more rights under their leaseholds. I am here as one more foot soldier in that campaign.
Leaseholders might own a property for 50 or 100 years yet possess only a diminishing asset, with little control over who owns or runs their property. Under English law, it is almost impossible to own a freehold flat. That has been widely recognised as wrong, not only by reformers in this country but, more tellingly, by other nations that inherited British leasehold law as part of their colonial paraphernalia. Those countries wisely changed their laws. Shamefully, we have failed to do so. In the United States, Australia, New Zealand and Canada, laws have been passed that seek to increase home ownership, and particularly flat ownership, in urban areas by dropping leasehold law from their statute books and replacing it with something else. It is that something else, which is called commonhold, that I seek to introduce today.
The law of commonhold varies slightly from country to country. The common thread, however, is that in every case it permits the freehold ownership of flats and allows residents to own and run their blocks. Therefore, it is vastly superior and more encouraging to home ownership and equity than our antiquated and unreformed practice. The building societies and Consumer Association are among those who have led the attempt to introduce this measure of leasehold reform into England and Wales, encouraged by a report of the Law Commission, their own careful research and the unhappy complaints of an increasing number of flat owners.
The building societies, among others, have pushed for the adoption of the Australian system of leasehold reform and freehold flat ownership, which, anglicised to our own quaint ways, is called commonhold. This system gives residents in a block of flats a freehold with standardised rights and obligations for the rest of the residential block. The individual owners have full ownership of their flats and joint ownership of a management body which owns and administers common parts such as the hall, the roof and the outside walls, and looks after the building's repair to the satisfaction of the people living in the block and not some remote and ever-changing owner of the residual freehold.
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Under commonhold, the law is completely clear in contrast with the current position in England and Wales whereby flats have to be sold on long leaseholds. Often the lease is badly drafted, and frequently is incomprehensible even to lawyers. The system allows in the unscrupulous landlord and gives the flat owner a dwindling rather than a growing asset which becomes more difficult to sell and on which it is more difficult to raise a mortgage as the lease runs out.
Thousands of flats in London now have leases of less than 50 years, and that is where the danger creeps in. The Landlord and Tenant Act 1987 helped to alleviate some of the difficulties, and the Government are to be congratulated on implementing the recommendations of the 1986 Nugee report which gave flat owners a say in insurance arrangements in their blocks and forced the landlord to give them first refusal when he decides to sell the freehold. However, that did not go far enough and was merely tinkering with an essentially defective system.
Commonhold will get rid of that landlord-tenant relationship. Each flat owner would own the freehold of his unit and share in the administration and the ownership of his block. There is no lease. Under the Bill, all new blocks of flats will be sold automatically in commonhold, which most developers are keen on, as few reputable developers want to be left with a residual freehold interest and normally sell it on to less reputable people as soon as they can. Existing leaseholders would have the opportunity to buy their freeholds and convert to commonhold. I am assured that building societies would readily lend the money for such a purchase, and many of the freehold cowboys who own a residual freehold interest would willingly be bought out.
In short, commonhold would give flat owners full, first class ownership of their homes for the first time. The Law Commission is even now beavering away, on instructions from the Lord Chancellor's Department, to write the necessary legislation to bring commonhold to the statute book. According to the Lords Hansard for June 1988, that is well under way.
More recently, according to Hansard of 19 January 1989, in response to a question from my hon. Friend the Member for Mid-Staffordshire (Mr. Heddle), it was said that these things are under the active consideration of the Attorney-General with the idea of converting theory into law. The purpose of my Bill is to speed that action so that the system of flat ownership designed in the last century might be reformed, with luck, by the next. This reform is one that I believe is called in the Treasury a "lollipop" —it costs nothing but it would be exceedingly popular. I commend it to the House
Question put and agreed to.
Bill ordered to be brought in by Mr. Dudley Fishburn, Sir George Young, Mr. John Heddle, Mr. Gerald Bowden, Mr. Chris Butler, Mr. Hugo Summerson, Miss Ann Widdecombe and Mr. Matthew Carrington.

Leasehold Reform (Commonhold)
  LEASEHOLD REFORM (COMMONHOLD)
  Mr. Dudley Fishburn accordingly presented a Bill to reform leasehold; And the same was read the First time; and ordered to be read a Second time upon Friday 7 July and to be printed. [Bill 121.]
Opposition Day
  8TH ALLOTTED DAY

    Investment in the Future
    Mr. Speaker: I must announce to the House that I have selected the amendment in the name of the Prime Minister.
    3.50 pm
    Mr. Paddy Ashdown: I beg to move,
    That this House notes the long-term failure of the British economy to meet the challenges of a competitive and technological world; expresses its profound concern at the increasing United Kingdom trade deficit in the information technology and electronics industries; notes the United Kingdom's gap in computer and other technological skills; and calls upon the Government to boost investment in high tech infrastructure and civil research and development and to work with industry and the education service to create the skills base that is vital to the modern, efficient and innovative economy that the United Kingdom desperately needs, if the next decade is to overcome the missed opportunities of the 1980s.
    I think that I am right in saying that this is the first major debate for some time on a trade and industry subject. It comes in an afternoon in which the Chancellor of the Duchy of Lancaster, the right hon. Member for Braintree (Mr. Newton), has answered questions on trade and industry matters, and a private Member's Bill on hacking has been introduced. Therefore, it is an important day for trade and industry and I am delighted to be able to introduce a debate of this nature.
    I am glad that the Chancellor of the Duchy will be replying to the debate. He and I do not agree about many of the main planks of the Government's policy. However, he is widely respected as someone who considers and is briefed on his subject closely.
    I do not want it to be believed that I and my party think that everything the Government have done has been wrong. That is not the case. In the past 10 years the Government have had some considerable achievements. The greatest achievement the Government will have to their name is the democratisation of the trade union movement. That will be their enduring memorial—[Interruption.] I hear the Labour Members sitting in front of me disagreeing. We will wait and see the evidence of history.
    One of the Government's most significant achievements is the pursuit of enterprise and self-employment. My argument with the Government on those matters is that they have not gone far enough or fast enough in the direction of the policy they have outlined.
    We must ask whether the propaganda we are fed by the Government—that all that adds up to an economic miracle— stands up under examination. The old moss-covered tombstones of British industrial decline still stand after 10 years of Thatcherism. We still have the highest inflation of any major advanced industrial nation; we still have the highest interest rates of any of our major OECD competitors; we still have wage rises racing well ahead of inflation; we still have net investment—investment as a percentage of GDP—which is at best static and, according to some figures, falling; we still have overall industrial production only just blipping above the 1979 level; we still have a continual loss of our share of world markets as our
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    goods fail to meet the right standards in terms of price and, perhaps more important, quality and we still have a trading deficit of unheard of historic proportions which is now seriously undermining the strength of the British economy.
    In many ways, all those symptoms are depressingly similar. Far from having an economic miracle in the 1980s we have, standing clear and evident to everybody, the old signposts of British malaise. We have an industrial system which has failed to produce effectively for world markets and has failed to win new shares of those markets. We have not made progress in what I believe to be the fundamental change that the British economy and British industrial base must achieve in the last years of the century if they are to face up to the new challenges. That fundamental change must be away from being a low-quality industrial assembler to being a high-quality industrial producer.
    Perhaps a more fundamental change is needed in our industrial base away from a high-resource use, low-value-added industrial base to a low-resource use and high-value-added base. Information technologies are the key to that fundamental change. In The Times on 16 September 1986, the Alvey committee said that the
    "basic economic situation dictates that we must become a net exporter of high technology and high value added goods."
    That statement was right, but the committee was wrong in the prediction that followed. It said that, if things continued as it calculated when it wrote the report, by 1990 Britain would become a nation in deficit in high technology information-based trade by £1 billion a year. We have yet to reach the end of the 1980s, yet that predicted deficit is already twice as high: it is running at £2·19 billion and growing. In 1984, the figure was £1·8 billion, but it has increased to £2·19 billion. In 1979, we had a surplus in information technology trade that amounted to about 0·5 per cent. of GDP; we are currently running a deficit of just over 0·5 per cent. of GDP.
    Many believe, and I am one, that the underlying weakness in our industrial base lies in information technologies. It is essential that Britain corrects that. It will involve not only inventing new technologies but manufacturing and, above all, applying them. Our failure to do so underlies our weakness.
    Behind the bold figures of the industrial deficit that. I have given, there are even more worrying facts. Let us consider innovation. Britain is second only to the United States in Nobel prize winners, and per capita our inventions and achievements are greater than any nation. Between the 1950s and the 1970s, Britain had a truly superb record in innovative technologies. But that record is a past record. Our innovative capacity has dropped sharply. In 1963, over 26 per cent. of European applicants for new United States patents were British. By 1985, the figure had fallen by 16 per cent. We are the only major advanced OECD country whose percentage of applications for United States patents has dropped. We now apply for 2 per cent. of United States patents and are below even France as an innovative nation.
    Perhaps that is not surprising, as the number of people working in research and development—scientists and engineers—has fallen over the past 10 years. Using a figure for every 10,000 of population, of all the OECD nations we have the fewest scientists and engineers working in the research sector. In 1983, 32 per cent. of engineers were working in research and development, yet now we have only 30 per cent.

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    Britain has opted out of many of the new technologies, such as the space programme. The Secretary of State for Energy had to go to Moscow to hitch a ride on a Soviet spacecraft sponsored by British industry for us to have any input into the space programme.
    Mr. Alex Carlile: Does my right hon. Friend agree that one of the underlying problems of our poor research base is the dreadful salaries paid to brilliant research scientists? Does he accept that at the Electricity Council research centre at Capenhurst in Cheshire the best salary a brilliant 30-year-old researcher can expect is well under £30,000, which is poor compared with salaries available abroad?
    Mr. Ashdown: I agree with my hon. and learned Friend's comment. But that is not the only underlying reason. I shall come on to that subject in a minute. Another reason is the lack of adequate research money to provide researchers with the facilities that they need. As I shall point out later, there has been a major flood of some of our highest and best researchers to, for example, the United States and other nations where they are paid much better.
    Mr. Alex Carlile: And to the City.
    Mr. Ashdown: If they had been going into industry, I might be a little more optimistic, but they seem to be leaving this country altogether.
    These facts show up in our own domestic market. Britain has the fastest growing new technology market, after Japan, in the world, yet our share of our own market and our capacity to even fulfil our own market demands has now dropped massively from 50 per cent. to less than one third in the past seven or eight years. A National Economic Development Council report in June 1988 identified the reason for that clearly—lack of investment.
    Investment in research and development is a contentious subject in Britain, as we already spend a higher proportion of our investment in research and development on defence-related research and development than any other nation in a way that frequently holds up the research and development we need in our industrial sector. Even in terms of non-defence research and development, whereas, between 1971 and 1985, all our major industrial competitors increased their research in non-defence research and development, we reduced our research in the non-defence sector. In Japan, it has increased from 1·8 per cent. to 2·8 per cent. of gross domestic product. In West Germany, it has increased from 2 per cent. to 2·5 per cent. It has increased in France and the United States and only the United Kingdom's share of non-defence-related research and development has dropped, from 1·8 per cent. to 1·5 per cent.
    I see the Chancellor of the Duchy of Lancaster wondering about those figures. I direct him to the "Save British Science" report which gives the figures. I have them here if he wants to look at them. I ask hon. Gentlemen who may read the Hansard report later to plot those figures on a graph and then to plot on a graph the level of industrial production in each of those nations. They will find that the two curves correlate almost exactly. Nations that have
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    invested more in non-defence-related research and development have seen overall industrial production rise, whereas ours has similarly declined.
    Mr. Tony Banks: Does the right hon. Gentleman agree that there is a correlation between the success of both the Japanese and West German economies and the small percentage of gross national product that they spend on defence, as opposed to the large amount that we spend on defence? Most of our research and development is defence-related. Why, then, does the right hon. Gentleman support such a high level of defence expenditure?
    Mr. Ashdown: The hon. Gentleman must have missed the point I made earlier. I conceded that Britain is spending 50 per cent. of its research and development on defence and I said that that was one factor holding back the proper development of civilian research and development. Other factors, such as secrecy, are involved, too. In the United States, defence-related projects in which new ideas are developed will move across into the civilian sector, but our own secrecy frequently prevents that from happening here. I could give the hon. Gentleman examples of how that happens.
    Government-funded civil research has dropped similarly. Between 1981 and 1989, it dropped from 0.73 per cent. to about 0.5 per cent. In terms of money, that means that £800 million less is going into Government-funded civil research. Even allowing for the extra £100 million that was put aside in last year's Autumn Statement, it means a £700 million drop. It means that as a percentage of gross domestic product, Government-funded civil research will be lower in 1990 than it was in 1981.
    But we are not talking merely about a lack of investment in physical goods, research or technologies. We are talking as well about the other component, which is lack of investment in people. In Britain today, the largest and most significant factor holding back production is the skill gap that afflicts our industries.
    My hon. and learned Friend the Member for Montgomery (Mr. Carlile) referred to the brain drain. Indeed, at the top level, we are seeing a major brain drain. I visited silicon valley a little while ago; it is a fact of life that the greatest expatriate population of silicon valley, not even excluding Hispanics, comprises expatriates of Britain who emigrated to pursue new technology.
    In November 1988, the New York Times made an extraordinary statement about the influx of our intellectual capital into the United States, stating that it composed
    "The largest single influx into this country"—
    that is, the United States—
    "from a single source since the Jewish professors were forced to leave Germany and Austria in the 1930s."
    Mr. Robert Hayward: The right hon. Gentleman has failed to identify when those expatriates went to silicon valley. Is it not the case that the head of Bell-Labs, the head of Hewlett-Packard's research department and the head of Rolm are all expatriates of this country, but that they emigrated in the 60s and 70s? Is it not also the case that there is now substantial evidence of reverse migration among many of the people who emigrated 20 years ago?
    Mr. Ashdown: I can tell the hon. Gentleman precisely what he wants to know, because, as I recall, I visited silicon valley in 1985 when the present Government had been in power for six years. Every person to whom I spoke—they were all either high in the research structures of firms or running firms themselves—had emigrated from Britain since this Government came to power. If there is evidence of a reverse trend, I shall be interested to know it, but I will bet the hon. Gentleman any money that he cares to lay that over the 10-year period since 1979, Britain has lost massively more researchers and scientists abroad than have come to this country.
    I turn now to the skill gap as it affects industry. I refer to the National Computing Centre—[Interruption.] Conservative Members may find this strange and amusing, but I do not and nor, I believe, do the people of Britain. In 1988 the National Computing Centre estimated that we now have 6,000 fewer programmers and analysts than industry needs.
    On 27 February this year, The Independent published an article stating that British industry is now short of about 30,000 experienced information technology staff. It predicted that unless there is a change of Government policy, by 1993 Britain will be short of about 100,000 experienced industrial information technology staff.
    We know that a report published earlier this year by the Confederation of British Industry identified that the skill gap in Britain posed a major barrier for many of our firms. Even in Merseyside, which has high unemployment, 30 per cent. of firms are being held back because they cannot find people with the appropriate skills.
    Meanwhile, the number of those applying for information technology-related degrees in our universities is dropping fast. Those figures underlie our industrial weakness and will ensure our continuing decline in information technologies.
    However, the picture given by the bald statistics is not the whole picture, because it misses out the central fact which, more than anything else, is a contributory cause of the deplorable position that Britain is now in. I refer to the Government's attitude towards information technology and new industries. I do not pretend for a moment that the Government found themselves in an easy position because they did not.
    No one can doubt that Britain was facing a major problem when the Government came to power in 1979, but the Government's inability and unwillingness to tackle that problem effectively now holds them to be indicted. Time and again they have shown that they do not care about British invention and technical skill. Indeed, time and again they have shown that they do not even recognise it; and time and again they have refused to support British invention, so that time and again something is invented in this country, but others then produce it, and we end up adding to our balance of payments deficit by buying it back from them.
    I want to give the House three simple examples of how this has happened in the past.
    Mr. Tony Banks: Hovercraft.
    Mr. Ashdown: Hovercraft is not one of them. Nowadays I do not count it as in the front range of new technology.
    Let me take, first of all, the transputer, invented in INMOS, which was established by Labour's National
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    Enterprise Board. The transputer—sometimes known as a computer on a chip—is still 10 years ahead of the field. Indeed, transputers are currently being used by NASA for its communications and radar systems. Much more important, they are being used by the Japanese as the basis of their new laser printer technology. They offer a unique parallel computing opportunity and unique abilities to interconnect with other systems. They are also one third cheaper than any comparable silicon chip mechanism.
    For ideological reasons, as we all know, the Government sold INMOS, complete with the transputer, to Thorn EMI in 1984. Almost immediately, Thorn EMI decided to go out of computing altogether, and into music publication, which provided quicker access to short-term profits. INMOS was then put up for sale. Thorn EMI refused to invest any further in the factory in south Wales—at least, it refused to invest significant amounts in it and showed absolutely no interest in making sure that the transputer was developed adequately. The Government—by this time, too late—stepped in and tried to persuade universities and others to use the transputer, but it was far too little, far too late.
    Last week S.G.S. Thompson moved in and bought INMOS. Let it be on the record that S.G.S. Thompson is a wholly owned Franco-Italian firm and is less profitable, in overall terms, than Thorn EMI. But it could see a good thing, which our own Government and, I must say, our own industry—the industrial electronics giants—could not see. S.G.S. Thompson has promised to invest in the transputer—something that neither the British Government nor British industry was prepared to do. It has promised to recruit 100 new engineers, and, according to its new managing director, will put limitless investment in what he described as a jewel in the new technology area.
    Is it not ironic that, in the very week in which, for instance, Fujitsu has said that it will launch a £400 million factory at Newton Aycliffe to assemble its computers and laser printers, the very week in which we have rejoiced at Toyota moving in to establish assembly plants in the north-east, we have sold one of our own world-beating inventions, and been relegated to the position of an offshore assembly?
    Mr. Bob Cryer: I agree with the hon. Gentleman's point that the Government have sold a valuable public asset, which could and should have been developed in public ownership. I resent that very deeply. But then the hon. Member talks about a Franco-Italian company taking that asset over. But the United Kingdom is a member of the Common Market. Surely freedom of movement of capital, freedom for predators to go and buy anywhere, is a fundamental requirement of the Common Market, of which the hon. Gentleman and his party have made absolutely no criticism.
    Mr. Ashdown: Absolutely, and I would be the last person to believe that a firm like that should not be available to purchasers in Common Market countries. As the hon. Gentleman will discover in a minute, I believe that the European context is essential if we are to be able to develop a decent high technology industry. My argument is not that a Franco-Italian company should move in and buy up; it is that it is extraordinary that, whereas people from France and Italy can see the advantages of a British invention, our own Government and British industry are

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    too blind to see them. I can find few more depressing examples of the short-term and myopic view of this Government.
    There is, however, perhaps one—gallium arsenide, in many ways a sister to the transputer. It is a new high-speed chip.
    Mr. Hayward: The right hon. Gentleman referred to gallium arsenide as a high-speed chip. It is not a high-speed chip. It is a product on which one can produce a high-speed chip. The right hon. Gentleman also described the transputer as unique. It is not unique. There are a series of competitors. I wish that the right hon. Gentleman would stop displaying his ignorance of high-technology subjects.
    Mr. Ashdown: I am delighted to hear from the hon. Gentleman. He is wrong about the transputer. There is no equivalent to the transputer. One or two chips are now being developed which are transputer emulators, but they are not in the same league as transputers. However, the hon. Gentleman is right to say that, technically, gallium arsenide is not a chip. Without wishing to go into long and detailed explanations, let us accept the short term of a chip in the sense that it can at least fulfil many functions of high-speed computers which the silicon chip can perform.
    What is unique about gallium arsenide is that it has several special properties. It is light-emitting, its architecture can be varied after it is made, and it is about five times faster than the conventional silicon chip equivalent. What is also important is that it was invented in Britain. Many people believe that it will replace silicon in high-speed computers and certain other applications.
    In 1985, the advanced materials and devices committee predicted a world market for gallium arsenide of £9 billion. On 11 March 1985, I initiated an Adjournment debate, backing up that committee and asking the Government to support a programme to develop gallium arsenide invented and developed in Britain. I asked them to set up a structure similar to the Alvey committee to press forward the development of this British invention. That Adjournment debate was answered by the then Under-Secretary of State for Trade and Industry the hon. Member for Coventry, North-East, who is now Under-Secretary of State for Education and Science. Hon. Members can look at columns 125 and 126 of the Hansard of that date. The Minister's answer was disparaging, to put it mildly. He described gallium arsenide as
    "not an easy material to process."—[Official Report, 11 March 1989, Vol. 75, c. 125.]
    He described it as an "immature technology" when contrasted with the advanced silicon chip technology, and said that the development should be left to industry. He went on to state that the Ministry of Defence was investing some money in it, and he gave the impression that is would have only a Ministry of Defence application.
    For the record, gallium arsenide is not now being made in Britain in any commercial quantities. Far from having only a Ministry of Defence application, gallium arsenide chips are at the heart of every compact disc player imported into Britain today.
    However, Britain leads the world in some aspects of gallium arsenide technology. Last week I was at St. Andrew's university, where I spoke to Professor Sibbett. He has developed a specific, individual application for
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    gallium arsenide which enables it to produce the fastest laser pulse in the world—so fast that the duration of the pulse in relation to the duration of a second has the same relationship as the duration of a second to the history of the universe. That is important. It will mean that we can develop extremely high-speed computers in future.
    I looked at what the professor was doing, and as I left his laboratory one of his researchers said to me, "We have established a world record, and that world record has stood for four years. This will be the basis of new high-speed computers. I have absolutely no doubt that the technology will be bought out, used by others, and that we will import it in high-speed computers in years to come."
    I now refer to gallium arsenide's sister technology. Gallium arsenide produces a light impulse. It is a fibre optic which will transmit light, not only in computers but around the country. Again, we have a technology that was invented in Britain—at the British Telecom laboratories in Marplesham. It carries a signal that is thousands of times faster than the conventional twisted copper pairs. The United States study said that in 1991 delivery and installation of fibre-optic cables would be cheaper than installing the twisted copper pairs that we currently have. We will see the development of speeds of transmission down fibre-optic cables increased by perhaps 20 times before the end of the century. The fibre-optic cable offers the possibility of a broad-band, interacting computer communications network for the whole of Britain, possibly reaching into every house.
    Conservative and Labour Members seem to think that this is not an important matter. It will be very important. [Interruption.] I am glad to get some support from the Conservative Benches. Just as our Victorian forebears thought it right to construct an infrastructure of roads, railways and canals to carry the commodities to support their industrial revolution, so we will need a modern infrastructure to carry the commodity for our industry. That commodity will be information. A fibre-optic network will be as essential for our future industry, based on high technology, as were the railways, canals and roads in the past.
    A great many people have considered whether we might invest in such an infrastructure. The Peacock committee said that we should; so did the Prime Minister's own advisory committee on science and technology. British Telecom appealed to the Government to help it do so. It said:
    "All we want is some kind of horizon from the Government, so we are not planning against total uncertainty."
    The French, the Japanese and the United States are doing it. The Germans are doing it like mad. Even the Labour party is now proposing that we should do it. I am told that the Labour party will suggest that this should be the centrepiece of its new industrial strategy. I am delighted that the Labour party is at last joining me in the two-year campaign to invest in the new industrial infrastructure that our nation will need.
    The Government of course, have said that we should not do it. [Interruption.] Conservative Members will have time to make their statements shortly. Mr. Alastair Macdonald, reporting to the Department of Trade and Industry earlier this year, said that the Government should play no part in this and that we should leave it to the market. I am not suggesting for a moment that the Government should find the £15 billion or £20 billion to

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    make all that investment, but they have a major role to play in stimulating private investment, in creating the interface standards that will allow it to work, in deciding how it will be laid down in Britain and in pump-priming the development.
    Any belief that we can simply leave it to a free market and see it develop is nonsense. Under the Government, Britain will not get a modern, extensive, nationwide fibre-optic network. Therefore, it will lose the opportunity to use a British invention which would revolutionise society and provide new opportunities for self-employment and enterprise, for education in the home, for self-health care, for home shopping and for entertainment. The Government are turning their back on all those opportunities.
    Is it not ironic that at the same time as the Government are turning their back on helping such systems to come into being, we launched, in January, a satellite television network capable of reaching into every home? What a tragedy that in Britain the telecommunications revolution will be used to give new opportunities to the powerful to shape our minds and to provide soap operas instead of new possibilities for our citizens to shape their destinies for themselves.
    Behind all that we must accept that Britain's trade in new technologies has been seriously hampered not only by the United States Export Administration Act, but by the dead hand of the Co-ordinating Committee for Multilateral Export Controls. COCOM is a secret committee, it is not treaty-based and it seeks now to police the export of high technologies between the countries of the West and the Soviet Union. It has completely failed in that task. In many ways the Americans have sought to take unilateral action outside COCOM, which has nearly always resulted in giving American industries and firms —especially large firms—trading advantages over their British or European rivals. Frankly, COCOM's day has passed. The new developments in East-West relations mean that COCOM must and should be reformed. We should insist that COCOM is brought out into the open, that it is properly established on a treaty base and that it is worked on the basis that all the nations who are party to it will act multilaterally within COCOM instead of using their industrial muscle outside it.
    So, here is the situation that Britain faces today. We are the only European nation whose inventiveness is falling behind. We are the only European nation in which the number of scientists and engineers in research and development is dropping. We are piling up a bigger and bigger deficit in the information technology trades. We are losing our share of even our domestic market. We are the only advanced nation to be investing less than we were 10 years ago in non-defence research and development. We are losing many of our best brains abroad. We are suffering from a massive and growing skill gap in information technology that probably covers 30,000 jobs today and will cover 100,000 jobs by about 1993. Fewer people are studying for computer degrees than previously and we have far fewer people in our universities than our competitors. We have a Government who know nothing and could not care less about information technology and about the creation of the new industrial base that Britain will need to badly for its prosperity in the future.
    Of course, those conclusions are not new. They are all identified in the recent report of the Select committee on Trade and Industry. The Government have responded to
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    them all in their response published in March of this year. I have yet to read a bleaker and more complacent document than that response.
    What Britain needs urgently is a strategy for the new technologies, which will invest in research and development, which will invest in a remissible training tax to encourage firms to carry out their own training, which will invest properly in higher and further education, which will invest in a new technology infrastructure, especially in a fibre-optic cable network for Britain, and which will invest in the world-beating products that the country still invents in sufficient numbers.
    The Government, of course, know nothing about the meaning of investment. They will leave it to the market. They will stand by and see this nation, whose prosperity and future now lies in building a high-wage, high-skill, high-investment, high-technology economy and industry, become instead a low-wage, low-skill, low-investment, low-technology offshore assembly plant for others.
    Of all the indictments that can be laid against the Government, their failure to invest in the future is the greatest and the one for which we will pay the greatest price. That is why I hope that all right hon. and hon. Members, who see for Britain a better future and who believe that the Government have a role to play in building that future, will vote for the motion.
    4.28 pm
    The Chancellor of the Duchy of Lancaster and Minister of Trade and Industry (Mr. Anthony Newton): I beg to move, to leave out from 'House' to the end of the Question and to add instead thereof:
    'notes the success of the Government's policies in creating a climate in which industry has achieved record levels of output, productivity and investment; welcomes the continuing increase in investment by United Kingdom companies in civil research and development; endorses the Government's policy of supporting collaborative research and development both in the United Kingdom and in Europe; approves the measures being taken by the Government to make education and training more responsive to the needs of industry and commerce; and welcomes the success of the United Kingdom in attracting advanced technology inward investment as a further indication of the strength of the United Kingdom economy.'.
    Perhaps I might begin by observing—using a word that the right hon. Member for Yeovil (Mr. Ashdown) used once or twice in his speech—that there is something ironic in the fact that he should move his motion in such terms in a week that has seen the announcement of three massive inward investment projects by companies which are world names in information technology, in vehicles and in vehicle components—Fujitsu, Toyota and Bosch. The total of their investments is about 12 billion. The Opposition are well aware that there are many other investments quite apart from those projects. I mention those major examples of recent inward investment projects because, to put it mildly, they hardly suggest that some of the world's most successful industrial countries and companies share the essentially gloomy view that the right hon. Gentleman has thought fit to put before the House.
    Mr. Tony Banks: Will the Minister give way?
    Mr. Newton: I shall happily give way, because if the debate had been initiated by the official Opposition we would have heard an even more mindlessly gloomy set of propositions.
    Mr. Banks: There is an alternative Opposition Front Bench operating today and we and the Democrats are in complete conjunction in our views on this matter. Why is it that the only thing that the Minister can do is to claim great credit for the fact that foreign investors, especially from Japan, are coming to this country? Where is British investment? The Japanese are coming here in order to get a foothold in Europe for 1992 because they know that Britain is the most deregulated country in the whole of Europe. That means that it will be easy for them. They are using us as a doormat, and it is about time that the Minister started to say that.
    Mr. Dennis Skinner: Think about the bridge on the River Kwai.
    Mr. Newton: I shall think at least as much about the remarks attributed to the hon. Member for Dagenham (Mr. Gould), who spoke in, I think, the north-east yesterday. He effectively suggested that the north-east was becoming colonised by the Japanese because they are investing there. I wonder whether the hon. Gentleman goes back to his constituents in the Ford plant at Dagenham and suggests that that is an American colony. Some of the major contributors to the British economy over many years have been foreign investors, overseas firms, whose contribution we immensely value. They have contributed a great deal to the British economy, and I do not know why it should be suggested that we should now turn our backs on them.
    Britain and its employment and production would be the losers if we were to adopt the attitude suggested by the hon. Member for Newham, North-West (Mr. Banks). He can come back at me if he wants to, but he should bear in mind that much of this investment would come to Europe anyway. The key point is that within Europe it is coming to Britain. If the hon. Gentleman would prefer it to go to France, Italy, Belgium or Germany, let him say so. If not, let him welcome it here.
    Mr. Tony Banks: It is coming to Britain because we are a pushover. They know that our conditions of employment and employment rights are so deregulated that they can take advantage. The Government just lay down a doormat for investors from the rest of the world. The Minister spoke about Ford. There is a threat hanging over the future of Dagenham and the investment there. I went to buy a Ford car from Dagenham Motors because I thought that, as I live in the area, that was the appropriate thing to do. I asked whether the Fiesta that I bought was made at the Dagenham plant, which is right behind the showroom. I was told that it was assembled in Spain. What state are we coming to when we buy Ford cars in this country and then find that they are assembled in Spain and exported to Britain? That is palpable nonsense. Where is the investment in British industry, technology and skills? That is what we want to hear about.
    Mr. Newton: The hon. Gentleman and I can agree on at least one matter, which is that 10 years ago there was not the remotest likelihood that any of these firms would have come to Britain. He describes the change from his own particular, rather curious, perspective. I described the change as one in which firms see this country as a good place in which to do business and as a good base for operations which, in one industry after another, are
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    becoming increasingly international, for reasons which have nothing to do with the factors that the hon. Member for Newham, North-West has mentioned.
    Mr. Eric S. Heffer: The right hon. Gentleman is absolutely wrong to say that there was no inward investment 10 years ago. There was a lot of inward investment in all parts of the country, but the difference between this Government and the previous Labour Government is that the latter had a regional policy and tried to get investment in areas of high unemployment and to get industry where it was vital. Unfortunately, at that time a whole series of firms which operated in this country but whose decisions were made in Detroit and elsewhere were closing down.
    Mr. Newton: Why?
    Mr. Heller: The Minister needs to know a little about economics, but I am not making a speech. I could explain to him in very simple terms the nature of the rotten system that he upholds, which has booms and slumps. If he does not understand that, he does not understand the ABC of economics.
    I was the Minister of State for Industry for a period when we were getting that inward investment. It was precisely when inward investment began to taper off that we saw the end of the regional policy.
    Mr. Newton: I am conscious of the previous unhappy experience of the hon. Member for Liverpool, Walton (Mr. Heller). He should perhaps bear in mind two things. First, two of those same companies to which he has referred and to which I have not referred—I suppose that he had in mind, in particular, Ford and General Motors —have both in recent months, quite apart from the three large investments in the past week that I have already mentioned, made significant decisions to invest further in this country, Ford with its engine plant in Wales, and General Motors with some futher investment not very far from the hon. Gentleman's constituency.
    I ask the hon. Gentleman to recognise something else. Although it is for Bosch, for example, to say, rather than for me to tell the House, precisely what factors influenced its decision to come here, bearing in mind that it is a German company, I gather from my contacts with the company that two considerations that attracted it were the low rate of corporation tax and the good state of British industrial relations. That is why I say that 10 years ago there would not have been the remotest possibility, however much regional assistance had been offered to them, of those companies coming here.
    A third point that I mention while I am seeking to deal with the hon. Member for Walton is the significance of Toyota's having decided to come here on a massive scale with no regional assistance at all, because it has not gone to such an area. That is a feature of some significance.
    Mr. Timothy Wood: I would like to join my right hon. Friend in welcoming the inward investment that has taken place, but it is not only inward investment that we are seeing. In my own constituency in the past four or five years we have had both announcements of further investments and actual investment by, for example, Glaxo with £500,000 to be spent in Stevenage in the next four years and 2,000 people involved in research and development. Another 500 people are involved in research and development in Marconi Instruments with a new

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    factory development. Further development is going on in International Computers Ltd., part of the Standard Telephones and Cables group, in Stevenage. All this new investment is being made so that this country can be more prosperous.
    Mr. Newton: I am grateful to my hon. Friend the Member for Stevenage (Mr. Wood). He makes very well the point that, although there is a particular drama about so many large inward investment projects being announced in the past week, it is against the background of a widespread increase in investment of all kinds across virtually the whole of the British economy, both by companies overseas and by those business men here who have greater confidence in the country's economy than they have had at any time for a generation.
    Mr. Skinner: That line of argument about inward investment would stand up much better if the Government had not been in office for 10 years. When they took office we had a marginal surplus on our manufactured trade; we are now down to a deficit on manufactured trade of about £20 billion and a balance of payments deficit of about £15 billion. According to the Chancellor, despite all the claims about inward investment, it is likely to get worse in the next financial year. If this inward investment is so good, beautiful and wonderful, when will the balance of payments return to a surplus?
    Mr. Tony Banks: Where is the miracle?
    Mr. Newton: If, for example, Fujitsu makes chips here rather than elsewhere, there will be an export and import substitution effect. The same is manifestly true of Bosch, Toyota and all the other projects that I mentioned. At the same time, they will contribute in various ways, both direct and indirect, to the further strengthening of the competitiveness of the British economy, and are part and parcel of the range of policies with which we seek to meet the needs to which reference has been made.
    Mr. Banks: When will we move back into a surplus?
    Mr. Newton: No doubt other hon. Members wish to take part in the debate, and I wish to make some progress.
    One matter on which both Social and Liberal Democrats and Labour Members sitting below the Gangway happily agree with my right hon. and hon. Friends is the importance of investment for this country's future prosperity.
    It is striking that, although during the 1960s and 1970s the United Kingdom was near the bottom of the league by almost any standard of the substantial measurement of investment, since 1980 total fixed investment has grown faster in the United Kingdom than in any other country in the European Community. Manufacturing investment alone—I know how keen Opposition Members are on manufacturers—is estimated to have increased by no less than 9·5 per cent. between 1987 and 1988. All the indicators point to continued buoyant investment this year.
    Mr. Doug Henderson: I am not trying to be obstructive, but, if that is the case, why is manufacturing investment now only back to its 1979 level?
    Mr. Newton: I shall point to a fact that emerged in the course of my statement on Toyota, which I made to the
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    House yesterday, when I was challenged about the degree of import penetration of the British motor car industry. I made the point then, and I make no apology for repeating it, that for most of the period since the Government took office there has not been a particularly satisfactory level of import penetration. It has been between 50 per cent. and 60 per cent.—but that was about the level which it had reached in 1979. Between 1974 and 1979, the level of import penetration doubled. It will take a long time to overcome the effects of such decline, its consequences for investment during that period, and the decisions that were then made.
    Equally, investment in industrial research and development is increasing in an encouraging way, with an increase of about 26·5 per cent. in real terms—more than a quarter—between 1983 and 1987. It should be firmly registered throughout the House that it is against that background of a strong sustained increase in investment by industry that the right hon. Member for Yeovil has brought the motion before the House this afternoon.
    Mr. Ashdown: Will the right hon. Gentleman confirm that investment as a proportion of GDP—which is the proper way to measure net investment—is no higher than it was in 1979? The right hon. Gentleman accused me of being gloomy. Is he not gloomy about the fact that today our deficit in information technology is running at £2·9 billion a year and growing? Does he not find that a gloomy picture? Or does he think that it is wonderful?
    Mr. Newton: I shall be coming to some of the right hon. Gentleman's remarks about information technology, for I have no desire to dismiss them. I ask him to acknowledge, however, that after more than 20 years in which the economy suffered not only from its failure to invest as much as we would like but from growth in consumption outpacing, consistently and almost relentlessly, that of investment, there has been a dramatic turnaround in the past five or six years. The growth of investment has often exceeded that of consumption by as much as 100 per cent. That remarkable trend has addressed a long-term weakness of the British economy, and has helped to build up its strength for the future.
    The right hon. Gentleman talked a good deal about the information technology and electronics sector. Although he considers that sector particularly important, and it helped him to make his case—or attempt to do so—I ask him not to ignore other aspects of high technology, especially aerospace and chemicals, which present a different picture.
    No one should imagine that the labels "information technology" and "electronics" mean that those are the only high-tech industries with which the country needs to be concerned. In aerospace, for example, the United Kingdom's capital investment in 1986 was £220 million, up from £133 million in 1983. In chemicals, capital investment in 1987 was running at an annual rate of £1·4 billion, up from some £900 million four years earlier. Investment in aerospace research and development between 1983 and 1987 has consistently remained at a high level, while in the chemical sector R and D investment increased from £735 million in 1983 to £1·3 billion in 1987—a massive increase of 47 per cent. in real terms. In both those high-tech sectors, moreover, the country is running a trade surplus of over £2 billion.
    Mr. Cryer rose—
    Mr. Newton: I will give way once more, but then I must get on.
    Mr. Cryer: Does the Minister accept that the British aerospace industry has been so consistently under-funded that we have not been able, in conjunction with Airbus Industrie, to provide a range of planes to satisfy British Airways—which is now almost entirely dependent on Boeing, with its highly variable quality of production? Does he also accept that the only small to medium-sized plane, the British Aerospace 146, depends not on Rolls-Royce engines but on Avco Lycoming engines imported from the United States? Is that not a sign of our lack of investment in technologies that will need developing if we are to match Boeing and Avco Lycoming?
    Mr. Newton: It is also significant that a considerable number of American aircraft in operation around the world use Rolls-Royce engines. Given the size of this country and of what might be called its domestic market, its achievements in industry are considerable and make a major contribution to our balance of payments.
    For understandable reasons, the right hon. Gentleman chose to focus particularly on a different high-tech industry, IT and electronics. In his intervention a few moments ago he implied—indeed, he virtually made his view explicit—that it was self-evident that the United Kingdom should expect to have the manufacturing capability to meet all its high technology needs. He points to the trade deficit in the IT and electronics sector, arguing that it demonstrates a need to channel further investment into it. I noted that he did not refer directly to the point that nearly all the major countries of the European Community and the United States also have IT deficits, and therefore have not gone down the self-sufficiency path that the right hon. Gentleman implied.
    Our country has a long history of involvement in research and, as many right hon. and hon. Members said, it has been the home of many great discoveries. It certainly has outstanding strengths in particular areas of scientific research and industrial technology, including many under the umbrella of information technology and electronics. When it comes to instrumentation control systems, for example, and to electronic capital goods such as radar, we had a 1987 trade surplus of more than £700 million. No country is, or is likely to be, a world leader in each and every area of high technology. It is an increasingly global market in which each successive generation of technology demands ever-increasing sums to be spent on research and development investment.
    The United Kingdom—no more than the United States, Germany or Japan—will not be able to become a major force in every area of high technology. Therefore, in common with other developed countries, we have rightly, in my view—tended to specialise in those sectors in which British firms have a world lead or the prospect of maintaining a strong position in an increasingly competitive global market.
    Interestingly, it emerged from the speech of the right hon. Gentleman that information technology is used to increase the efficiency and effectiveness of industry and commerce, and that that is true whether the IT equipment concerned is manufactured in the United Kingdom or is imported. In his remarks the right hon. Gentleman adverted—almost as an aside—to the undoubted growth in the IT and electronics trade deficit, and to the fact that
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    that deficit was associated with probably the fastest growing market in the world. That is itself an extremely encouraging trend. It is at least as important—it will be possible to argue that it is even more important—to ensure that IT is effectively applied in our manufacturing and service industries as it is that we ourselves should be a massive manufacturer of microchips or whatever. In revealing that the United Kingdom is one of the world's fastest growing markets for IT and electronics products, the right hon. Gentleman indicated one of our country's growing strengths and not weaknesses, as he sought to imply.
    Mr. Ashdown: The right hon. Gentleman is correct to say that the proper utilisation of information technology is vital. One thinks, for example, of the way that it has been used to make the textile industry up-market and more competitive. However, the fact remains that Britain is woefully under-equipped to make use of the capital goods that it is buying in to support that deficit. The Institute of Administration and Management's report of 10 July 1988 commented that unsophisticated users of information technology are six times more likely to suffer poor financial results. It went on to comment that that is exactly what we have in Britain today—due to inadequate training levels, an insufficient number of graduates, and in particular a deficit of 6,000 programmers and analysts. The underlying problem is that the Government refuse to invest in education so that we are unable to utilise the maximum capacity of even that IT that we are buying in.
    Mr. Newton: The right hon. Gentleman, understandably, rapidly shifts his ground from concentrating solely on our production capacity in relation to IT and electronics. Now that I have made the point that applications of that technology are increasing, which is encouraging, the right hon. Gentleman turns to what he calls the skills gap. I shall refer to that issue later. However, I hope that I have carried the right hon. Gentleman with me in recognising that at least as important as the sheer scale of the production of any particular types of IT or electronics products in this country is the extent to which we make use of those products, from wherever they may come, in developing industry's competitiveness and efficiency.
    Capital investment in IT increased by 44 per cent. in real terms between 1982 and 1986, and it is also a leading sector of investment in terms of research and development, with investment in 1987 of nearly £2 billion compared with slightly less than £1·5 billion in 1983. Clearly it would not be sensible to demand of United Kingdom firms that they invest in areas where they cannot compete effectively internationally. It would not be right, as the right hon. Gentleman claimed it would, for the Government to seek to determine where and how United Kingdom firms should or should not invest. That approach of picking winners was tried in the past. More often than not it ended up as the quickest way of picking losers and of sending a good deal of money down the drain. There is no substitute for firms having a knowledge and understanding of the market place determining their own production and investment strategies.
    There will inevitably be areas of IT and of other industries where foreign firms have a competitive advantage and where United Kingdom companies will choose to buy from abroad rather than manufacture in this

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    country. That is an inevitable consequence of increased specialisation in the IT and electronics sector and of the need for every country to concentrate on comparative strengths. That is one reason why we welcome the overseas investment to which I referred earlier, which has been an outstanding aspect of this country's success story in recent months and years.
    I emphasise the contribution made to this country by firms with which we are already familiar. IBM, for example—and it would be just as possible to talk about Hampshire being colonised by IBM as about the north-east being colonised by Fujitsu—with more than 18,000 employees, is the largest employer, producer and exporter in the United Kingdom's IT industry. In 1988 it exported goods and services worth more than £2 billion, running a positive balance of trade and making it one of the country's largest exporters.
    It is encouraging that other world leaders such as Digital Equipment, Hewlett-Packard, Rank Xerox and Datalogic all chose the United Kingdom for their European headquarters. Their decisions are not just coincidental but are positive statements by business leaders of confidence in this country and in its role as a key player in information technology. As was said by my hon. Friend the Member for Stevenage, it is far from the case that our indigenous IT firms are not investing. My hon. Friend referred to ICL, which has spent about £20 million on its United Kingdom manufacturing ability in the past two years, while Research Machines, one of our smaller but growing computer manufacturers, made more than £5 million of capital investment over the same period.
    The Government have also created a climate that ensures that firms are much better placed to invest in research and development. Manufacturing profitability in 1987 was the best since 1969, and industry increased its own funding of research and development by about 30 per cent. in real terms over the four years between 1983 and 1987. Apart from that growth in industry's own expenditure on research and development, the Department of Trade and Industry spent more than £500 million on science and technology in 1988–89, and it will spend a slightly larger sum in 1989–90.
    I am not sure from the right hon. Gentleman's remarks whether he welcomes this, but the Government have shifted their balance of policies and moved away from what is known as near-market support for research and development to direct support to longer-term ventures more distant from the market. We are putting much greater emphasis on longer-term collaborative programmes of research between companies, and encouraging co-operation between companies and higher education institutions. Many new schemes to promote pre-competitive collaborative research have been launched in the past year. For example, some 11 programmes have been announced and several more will soon be launched on Link, with which the right hon. Gentleman will be familiar. Proposals for such projects are being generated at a healthy rate.
    I was particularly pleased that the right hon. Gentleman clearly recognised the importance of international collaboration, especially with the aproach of the single European market. We are supporting the Eureka framework which goes beyond the European Community and is a pan-European programme to encourage industrially led projects with the European Community and other European partners; and, of course, we are
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    supporting many European Community research and development programmes which are complementary to our own.
    Everyone in the Department is actively encouraging United Kingdm organisations to take part in community research industrial research and development programmes. Within the framework of those programmes, United Kingdom organisations are taking part in between 50 arid 80 per cent. of the projects, depending on the individual programmes, and have received between 18 and 20 per cent. of the total funding. That is not often sufficiently appreciated when people look at some of the figures to which the right hon. Gentleman referred.
    I wanted to make one or two further points about investment, but in view of the time, partly because I have given way several times, I shall move on to the other shortage on which the right hon. Gentleman focused particular attention—the need for training in various skills at various levels. Certainly the time when training could be regarded as a one-off spell between general education and work and when additional training was considered neccessary only when new machinery was installed is long gone. It is encouraging that so many employers in Britain consider training to be a continuous process that is essential if they are to keep up with their competitors at home and abroad. I assure the right hon. Gentleman and the House that that shift towards ensuring that training is more widely accepted as an essential part of a firm's investment and development is being reinforced.
    Clearly, not least because of the large increase in the use and application of information technology and electronics, there has been a need to increase the supply of skilled manpower. The surge in demand for IT skills that has accompanied the surge in the market for the processes and products has undoubtedly led to a shortage of qualified manpower. We have sought to respond to that in a variety of positive and constructive ways, although it is manifestly not a problem that can be overcome in weeks or months.
    By 1990 the engineering and technology programme will have provided 5,000 extra places at undergraduate and postgraduate level, 80 per cent. of which are in IT-related subjects. That programme and the earlier information technology in higher education initiative have significantly increased the places available for postgraduate information technology training. This year, the funding to help polytechnics and colleges to develop their capacity for applied research has been increased by more than 50 per cent. The high technology national training initiative of the Training Agency provides high-level vocational training courses, the majority of which are in computing sciences and engineering, with an IT component. Currently, some 3,000 students benefit from that programme. Computing and IT is a compulsory element in all youth training scheme programmes.
    Those are just some of a wide-ranging set of programmes directed at the very problem to which the right hon. Gentleman drew attention. Trainees on employment training will also be able to undertake training on information technology as part of their individual action plans. We are continuing to monitor closely the evolving pattern of demand and supply for information technology professionals through regular surveys carried out by the Institute of Manpower Studies on behalf of a number of Government Departments and agencies.

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    Finally, I should mention something which the right hon. Gentleman did not include in his speech—the range of measures that are under way to improve links between business and education, not least the wide-ranging plans by my right hon. Friend the Secretary of State for Employment for the development of training and enterprise councils.
    In addition to the need for improvement in the amount and nature of training available in certain places at certain times which is currently being addressed, too many of those programmes were not sufficiently shaped by direct and clear knowledge of the needs and requirements of businesses and business men. The move towards training and enterprise councils to ensure that training is more closely related to the needs that underlie this debate will, in the medium and long term, prove one of the most important and productive changes which the Government has sought to implement.
    For reasons that are clear to the House and, I hope, accepted, I have taken a little more time than I had intended. I accept that much remains to be done to overcome the full effects of a longer and unhappy period of decline in many parts of British industry, especially during the 1960s and 1970s. Against the background of recent investment decisions by British firms and those abroad, the change in the past 10 years should be considered genuinely encouraging by hon. Members on both sides of the House. More than at any time in a generation, Britain is investing in the future. We are investing in capital, in skills and in a way which will continue to improve the output, the competitiveness and the trading position of the British economy. While I accept that there is still more to be done, I hope that the right hon. Gentleman will accept, as he did at the outset of his speech, that an immense amount has already been achieved.
    5.7 pm
    Mr. Doug Henderson: I congratulate the right hon. Member for Yeovil (Mr. Ashdown) on his choice of subject for our debate. I also congratulate him and his party on the wording of the motion, as far as it goes. I was also pleased that he is so eager to endorse the Labour party's next economic programme in advance of its publication. I look forward to his further endorsement when the programme is published.
    In the 1989–90 Red Book, which I understand is more than just another document, the Government claimed:
    "As a result of sound financial policies coupled with supply side reforms, progress has been made during the 1980s".
    I shall return to supply side changes but first I shall address the question of economic progress. In any test of economic progress, it would be reasonable to look at the indices of manufactured output, manufacturing investment, trade, employment, growth and even inflation.
    Can what has happened in our economy in the past 10 years be called progress when manufacturing output returned to 1978 levels only in 1987 and manufacturing investment has still not yet returned to 1979 levels? In 1979, we had a surplus of £3 billion on our trade in manufactures, but we now have a deficit of £20 billion. That is reflected in the figures of key industries in our economy. For example, most households spend a large proportion of their income in the car industry, but there is
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    now a £6 billion gap in trade. In textiles and clothing there is a £3 billion gap in trade and in electronics there is a growing gap, as we have already heard, of nearly £4 billion. That is also reflected in our share of world trade, which has fallen by 11 per cent. over the same period.
    Can it be called progress when we have lost 2 million jobs in manufacturing industry over 10 years? Notwithstanding the improvements in employment in the past couple of years, which we all welcome, unemployment is still 35 per cent. higher than in 1979, even if we take into account the Government's new method of calculation. Can it be called progress when the north-south divide is greater than it has been at any time in the past 20 years? Can it be called progress when inflation on all indices has all but returned to the 1978–79 level? I remind the Chancellor of the Duchy of Lancaster of the comments of his right hon. Friend the Chancellor of the Exchequer before the 1987 general election when he said that inflation was the judge and jury of the Government's economic policy. I wonder whether the Chancellor is still saying that. I wonder whether the Minister is saying that when inflation is increasing rapidly. It is now double the average in the EEC and is moving relentlessly upwards.
    That depressing picture is the real monument of 10 years of Thatcherism. It has bequeathed to this generation and the generation of the 1990s a lower capacity to make things that we need to export and an inability to compete in the modern high-tech industries. We are now a ravenous pool of consumerism for the products of other countries. What will happen when the bubble bursts? Will not deflation be forced on us again? Will not living standards begin to fall and, with a time lag, unemployment again start to rise? All that will have been called progress during a time when we have had the benefit of £78 billion in North sea oil revenues.
    Some people may argue that inward investment is a sign of good times. I am not saying that it is not welcome in some circumstances. However, an over-reliance on inward investment is surely an indictment of our industries' inability to invest in our future. I am not opposed to inward investment. As a Member for the north-east of England I realise the importance of Japanese investment to the north-east economy. However, we must recognise why the Japanese are here. They are not here because of any supply side miracle in the British economy. The senior management in Japanese companies will say why they are here. They want to be inside protectionism that they think might occur in Europe after 1992 and if they locate in a country in which English is spoken, they do not need to retrain their middle management in other languages. That is the real reason why Britain is attracting Japanese investment. I think that the Minister knows that that is so.
    Sir Anthony Meyer: The hon. Gentleman is making disparaging remarks about inward investment. Did he listen to his hon. Friend the Member for Houghton and Washington (Mr. Boyes) when he intervened strongly during the Chancellor of the Duchy of Lancaster's statement yesterday to point out the enormous benefit that Japanese investment has conferred on his constituency?
    Mr. Henderson: I am grateful to the hon. Gentleman for raising that point. We are not opposed to all inward investment. We want a balance of investment in this country and a greater investment by our indigenous

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    companies. One reason why companies will not invest in the north is that companies currently located in the south cannot persuade their managements to go north. To companies from Japan, Korea or elsewhere the 300 miles between Newcastle and London and the 400 miles between Glasgow and London are immaterial.
    We cannot rely exclusively on Japanese investment for major projects in the regions. If we do accept investment, it must not be on just any terms. We must remind ourselves that Japanese investment in the United Kingdom is for the benefit of Japan, not Britain. We risk becoming an adjunct of the Japanese economy, with all that that entails. We need our own economy, our own product development and our own components industry. We must develop using our own inventiveness, our own new industries and our own research and development. We need our own educational and training investment and we need our own industrial infrastructure. Without that, we will become nothing more than a low-wage, low-skill, branch-plant economy.
    Some people have said that we are becoming a screwdriver economy and hon. Members know the danger involved in that. In prosperous times it might be all very well but in difficult times there is nothing for the screwdriver to screw. That means a reduction in output and an increase in unemployment.
    Mr. Newton: I do not understand how the hon. Gentleman can make those comments about Japanese companies such as Fujitsu, Toyota and Nissan but not about IBM, Ford, NEC or any of the other major foreign investments that have been here for some time. Nobody in Dagenham talks about a screwdriver economy. Nobody talks about such an economy in Hampshire or various other places in which IBM is working. Nobody who has seen Nissan at work in the north-east talks about a screwdriver economy. Why should it be assumed that that applies to all new investment?
    Mr. Henderson: I know that the right hon. Gentleman makes regular journeys to the north-east, but I hope that in future he will take a little more cognisance of what he is told. He will know that the people in the north-east remember the nature of the investment that came from the American economy in the 1940s and 1950s. Companies such as Caterpillar are no longer there. Caterpillar was a screwdriver company and when things became difficult internationally it pulled out. Many companies, including Massey Ferguson and Chrysler, have pulled out in that way. That is the real danger. We need a balance of investment. I am not saying that we should exclude all foreign investment.
    Mr. Charles Kennedy: I am listening to the hon. Gentleman's argument with care. He said that we need a balance of investment. I am not suggesting that he believes that we should exclude foreign investment but is he suggesting that, for the Labour party, with the announcement this week, the balance has gone too far in the wrong direction?
    Mr. Henderson: I am not saying that the balance has gone off the end. However, if in the future the only investment in parts of Scotland, the north-east and north-west is foreign investment, the economy will become so dependent on inward investment that when we are hit by an international recession those areas will be as badly
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    hit as they have been in the past. Some areas, such as Wearside near my constituency, are extraordinarily dependent on inward investment. They will be the first to be hit if there is a world recession, and everyone connected with the investment knows that.
    Mr. Bob Clay: Is my hon. Friend aware that a report commissioned by the Department of the Environment from the distinguished accountants, Peat Marwick McLintock, on the housing action trust in Sunderland said that there was no evidence of the Nissan plant having any effect on employment on the estates of Downhill, Hylton Castle, Red House and Town End Farm? The Nissan plant, which already employs 2,000 people and is adjacent to those estates across the A19, has had no effect on those estates, which have high unemployment. Is not part of the problem that because investment is not indigenous, it is highly selective where it employs?
    Mr. Henderson: I am grateful to my hon. Friend for his comments. He knows that the problem arises in such areas as a result of skill shortages and the lack of proper training programmes over the past 10 or 15 years.
    Mr. John Redwood: If the Nissan plant is only a screwdriver plant, why do people need skills to work in it?
    Mr. Henderson: I have been grateful for other interventions, but that remark is offensive. It is offensive to say that people who work on an assembly line have no skill. The hon. Gentleman should spend 39 hours on the Nissan production line and then make that remark.
    Why is our economy in the shape that it is? I shall refer to comments made by people who know more about the subject than the hon. Member for Wokingham (Mr. Redwood). Dr. Andrew Sentence, who is head of the CBI's trends and policies group, stated last July in the CBI news:
    "High interest rates are a burden on business and are unwelcome at any time. However, they also affect companies, particularly manufacturers, through their impact on the value of the currency."
    I met the chairman of a company called AWD, which is in the vehicle industry. The Minister is familiar with it and I hope that he will agree that it is a go-ahead company which has considerable prospects. It rescued Bedford Vans, but its chairman is saying that the company will not make the impact that he wants on the market until the exchange rate is industry-based. I recently met a director of Courtaulds in charge of its spinning division in Lancashire shortly before he announced the closure of spinning plants. He made it clear that the problem was not internal productivity but the exchange rate. He said that as long as it was geared to the City and not to the needs of industry, the company could not compete in the world market.
    Economists once thought that if demand policies are appropriate the economy will be successfully steered, but history has reminded us that that is not the case. I agree with a speech that the Minister made earlier this year, in which he acknowledged that demand and supply side initiatives are essential. However, it is clear that the Government's policies on the demand side have been pro-City, pro-rich, pro-export of capital and anti-industry, anti balanced economic development and anti the interests of ordinary people.
    I observe no supply side miracle. Our failure to improve the supply side is at the core of the problems facing us as

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    we build up to 1992. The basic error made by the Government over the past 10 years is that they believed that if they bashed the unions, trimmed the power of workers and gave employers more punch, supply side problems would be solved. That is what happened to British Leyland, but could any hon. Member say that as a result it is a strong, independent company going from success to success? Surely the truth is different, as everyone in the industry knows. It failed to take necessary design, capital re-equipping and marketing measures. I am as pleased as any hon. Member that it is hanging on manfully, perhaps in hock to Honda, but everyone in the industry knows that the basic problem was not limited to labour. That lesson is typical of much that has happened to much of manufacturing industry.
    We should now know that the supply side cannot be changed without investing in the future, yet we still spend less on research and development than the Germans, Japanese or Americans. As the right hon. Member for Yeovil said, if the military aspect is extracted from research and development expenditure, the problem is more severe. Is it any surprise that we are ever more dependent on Japanese-designed cars, electronics and engineering products? The Government cannot dodge their responsibilities, as the Financial Times said when attributing blame for the problem in an editorial on 14 March.
    There will be no supply side miracle while training is so woefully inadequate. Our number of trainees has dropped from 23,000 in 1979 to 8,300 in 1988. Two thirds of British workers have no workplace qualifications, compared with one in five in Germany. Cuts of over £230 million were made in the 1989–90 training budget in real terms. Even in the service industries, about which the Department of Trade and Industry is for ever crowing, 14,500 young French people obtained qualifications in retailing compared to only 1,650 in Britain. Is it any wonder that the Engineering Employers Federation has forecast a deficit in mechanical engineering products in 1989, for the first time this century?
    Is not the fundamental policy error of the Government that, unlike our counterparts in the Federal Republic of Germany, they are completely and ideologically hostile to collective and community action? We cannot make improvements in research and development, training, education and infrastructure unless we make a public expenditure commitment. Public expenditure should be accountable. The test should be the value of the service or product that it provides. However, I acknowledge that that has not always been the case. Crucially, public expenditure should be used to stimulate and complement private sector investment and initiative.
    The Government know the perils ahead. They know that a further hike in interest rates will not only hit mortgages and further hamper industrial investment but will further exacerbate the trade gap. They know that the pound is likely to collapse when confidence departs and the hot money leaves our shores. They must know that 1992 is a further threat to our economy. If they are honest, they will admit that we still have severe supply side inadequacies.
    Regrettably—I believe that the country holds this view —it is too late to change the Government's view. Some
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    Conservative Members share the view of Labour Members that intervention is necessary and that we must invest to protect our future. Perhaps we will hear more about that from Wales in the coming week. I urge Conservative Members to join us in supporting the motion.
    5.28 pm
    Mr. Richard Page: The title of the debate is fully in keeping with the slogan approach of the Social and Liberal Democratic party. It is long on good intentions and rather short on practicalities. I was privileged to represent Workington in the late 1970s and remember the workings of the Lib-Lab pact. I remember that almost any investment for the future was cut and cut again, so perhaps the House will understand my scepticism about the words of the right hon. Member for Yeovil (Mr. Ashdown) about investing in the future. I have a thought going through my mind that if he ever got near the levers of control the results might fall a little short of his words.
    I am grateful that the House has the opportunity to discuss this most important matter, but I am disappointed in the number of hon. Members who are present to listen. Although I include hon. Members of my own party in that comment, we are more in evidence than hon. Members of other parties. We have some good spenders in this House, but we are a little short of earners. As a nation, we must earn money before we start spending it. This is a debate in which we decide how to earn money so that we can spend it on the social programmes the nation requires.
    I want to talk about future investment in reducing our balance of payments deficit. In the short term, the Government's policy—which I support—is to have high interest rates which will bring down inflation and reduce demand. I am concerned that high interest rates will, in turn, reduce investment as well as demand. Even if that does not happen, I am equally worried about whether our manufacturing industry will be of a size and capacity to take advantage of the demand when interest rate falls. Will it be in a position to supply the goods that our people require when interest rates come down? I worry that that will not be the case. If I am right, we shall lurch backwards and forwards in a way reminiscent of the stop-go policies of the 1950s and 1960s, only this time we shall use the balance of payments as the crisis indicator.
    I assume that it is desirable to bridge the balance of payments gap and to bring our balance of payments into equality; thus we should define the objectives to be achieved. It is a sad fact—every hon. Member who has spoken so far has made the point—that for some reason our manufacturing industries are poor in investing in three areas—training, equipment and research—when compared with industries in other countries. We can deal with the problem of the balance of payments deficit as a large cake, by taking slices out of it and dealing with each slice at a time. I am glad that manufacturing investment is now up to its 1979 level, but it is still low compared with the other G7 countries and we have to bear in mind the significant point that our investment is still some 50 per cent. lower than Japan's as a percentage of gross national product. However, I do not decry the increase in investment that has taken place, as so many Opposition Members have. It is a significant improvement and long may it continue. But we should have some idea to what

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    percentage of GNP should be reached in manufacturing investment if we are to work towards reducing the balance of payments deficit.
    We must also have some idea what percentage of inward investment is desirable each year and work towards it. I have to smile when I see the disagreements between the two wings of the Labour party over internal investment. I welcome Toyota's investment in the north. It is a tribute to the changing attitudes and atmosphere that the Government have created that the Japanese are looking to this country for investment. I also admire the work done by my right hon. Friend the Secretary of State for Wales in creating the infrastructure in Wales to attract companies to the Principality. I am not saying that the Government should pick winners, because the Government could not pick a winner if we paid them, but the Government can provide the infrastructure to make this country attractive to foreign companies for investment. I am told that during the last two years, the improvement in the balance of payments which will be created by those companies that have gone into south Wales in that period would mean a change of £10 billion to £15 billion to the balance of payments, if it were to be extrapolated over the whole country. That contribution should not be lightly brushed aside.
    I know that some people are rather worried about internal investment and inflows of funds. I must point out to them that the most chauvinist nation of the lot in the European Community—France—has now, for the first time, revised its policy on internal investment and is going out of its way to attract more companies to invest in France, whereas before it was trying to keep them out.
    Much has been said about training and the fact that for some reason our manufacturing industries have been poor in that respect. The recent initiatives of my right hon. Friend the Secretary of State for Employment in putting £3 billion into training and bringing in manufacturing industry, which will contribute about £15 billion, will go a long way to bridge the skill gap. It is a funny quirk of human nature that although we have probably the most generous student grant system in the industrialised world, we have the lowest percentage of people going on into further education. That reflects a failure of the motivation of some of our schoolteachers. Britain desperately needs a trained work force to maintain its position in the industrialised world.
    Again, we have a low percentage of GNP spent on research. Other hon. Members have already made the comment about the percentage given by the Government to defence. I would like the Government to look at defence as a separate item and see whether it is necessary for them to increase the percentage that goes into the civil side. Although our defence industries make a contribution to the balance of payments, one cannot eat tanks or grow rockets. That part of the economy should not be supported to the detriment of the civil side. The civil side should be evaluated on its own and should not be squeezed out in favour of the military.
    I was generalising when I spoke about investment because certain sectors of society and industry have done exceedingly well. For example, the huge investment put into aero engines has produced results. Other hon. Members have mentioned our pharmaceutical and chemical companies. There is no doubt that money invested comes out in the fulness of time in profit, jobs and products. I am afraid to say, however, that as a general
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    rule, the lack of skills and the lack of investment in research in our manufacturing industry has led our manufacturers to retreat into niche marketing. Niche marketing is profitable in the short term, but I remind industry, as I remind the House, that niches are a little like castles in 13th century Europe, in that they are soon overrun. We must consider the wider context.
    I am reminded of the story, which I am told is true, of the ambassador to Washington at the time of the introduction of television. He was asked to do a Christmas broadcast which would be recorded in advance. The television crew arrived, the ambassador gave the broadcast and when he thought that it was all over the interviewer said, "What would you like for Christmas?" The ambassador replied, "Crystallised fruit." Come Christmas day, the ambassador watched the broadcast. All was going well until, at the end, the camera flashed to the French ambassador. When he was asked what he would like for Christmas, he said, "I would like to see an end to nuclear arms." The interviewer turned to the Australian ambassador who said, "I would like an end to the Korean war." He turned to the Indian ambassador who said, "I would like an end to world hunger." Hon. Members can guess the rest of the story. There is nothing wrong with crystallised fruit in a domestic context, but it does not have much impact on the wider world.
    We must look to the targets presented within the European Community, the Pacific rim, the USSR, America and the rest of the industrialised world. We must see what we must do to expand our productive capacity and to build on our present success to achieve equality in our balance of payments. We must then target our objectives and, with Government support for the infrastructure—and the Government should not try to pick winners—we should go for it.
    5.39 pm
    Mr. Malcolm Bruce: I am pleased that we have this opportunity to debate such an important subject today and that my party initiated it. One of our concerns in the past 10 years has been the weakening of Britain's competitive position. We must be able to pay our way in the world, and our failure to keep up with modern technology is beginning to come home to roost with a vengeance.
    I am a member of the Select Committee on Trade and Industry. Last year our major report considered Britain's position on information technology. We discovered that there was a remarkable paucity of information about the state of that industry. It was difficult to find out exactly what was going on. Therefore, much of our report was dedicated to asking the Government to play a role in ensuring that more information is available so that Britain can ensure greater participation in the development of that technology and, much more importantly, in its application and use.
    Many of us have personal experience of modern equipment. If it did the things that the salesmen said that it would, we would be pleased with the service, but more often than not, it fails to live up to the expectations raised about it. That is basically because we are lagging behind in using that technology effectively and in developing its application.
    That presents an interesting contrast with the attitude of our major competitors. When looking for information

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    on this, the Committee visited the United States and Japan. It is fair to say that what we saw in Japan scared us because the Japanese are channelling long-term investment into this area on a scale that leaves us gasping and the Americans terrified. If the Americans are terrified, there is no room for complacency in Europe or in the United Kingdom. Indeed, the Americans are so concerned that they have tried to copy some aspects of the Japanese approach in bringing companies together in research and development consortia to try to advance the technology and its application.
    Our report also referred to the Government's role in advancing technology through their own procurement policy. However, that view was categorically rejected by the Government, who do not see it as a function of government. That is interesting, because it was explained that a significant component of the success in this area of Japan and the United States was brought about by their Governments' conscious use of their procurement powers to bring on technology. Although the British Government are facing severe competition from highly powerful and successful Japanese and American markets, the one thing that the Government have decided that they must not do is to follow their example. I cannot imagine a more stupid response to a serious situation.
    The Select Committee looked at silicon valley, where there has been a wonderful upsurge of innovation and ideas in new product and new systems developments, but when one got to the bottom of it, much of the money came from the United States' defence budget. Although applications ultimately spin off into the commercial market, without being underpinned by defence spending, many of the ideas, products and companies, would simply not exist.
    My right hon. Friend the Member for Yeovil (Mr. Ashdown) has already referred to the lack of research and development funding in areas apart from defence, although we do not have a defence budget that is in any way comparable to that of the United States. We must address that issue and ensure that there is some push from underneath as well as some pull from the market. One area on which my party and the Government agree is that the market must be the determinant, but the market alone will not ensure that British companies succeed in developing the new technology.
    We must look for opportunities in new markets. There is no doubt that a single European market is an opportunity for greater co-operation and for developing a bigger market. From that market there is the potential to develop markets in the Third world and in the Eastern bloc. We should not lose sight of that because if the economic reforms in the Eastern block are successful, as all hon. Members hope that they will be, those countries will need the technology which we have but which they are a long way from being able to produce for themselves.
    I make a specific plea—I hope that the Minister will address this point—for the British Government to press for a review of COCOM. The Select Committee on Trade and Industry called for that last week and our call was reinforced by the Select Committee on Foreign Affairs. The relevant extract of that Committee's report states:
    "The Trade and Industry Committee criticised the unwieldy nature of the system"—
    that is COCOM—
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    "commenting on the likely extent of trade opportunities lost. We share its view, and are sympathetic to its recommendations including 'an immediate and radical reduction in the scope of the Cocom list'."
    I stress that COCOM needs to be able to expand as fast as technology changes. Too often we are in the ludicrous position of British companies being prevented from exporting technology which is already becoming obsolescent but which, because COCOM has not caught up with it, is still on the restricted list. In consequence, we lose market opportunities and eastern bloc countries lose the opportunity to develop their economic performance.
    So that there is no misunderstanding, I make it clear that we fully understand the need for COCOM. We are not suggesting that it could or should be swept away because, of course, we must maintain our guard on defence and security. However, as we—the Select Committee on Trade and Industry—said and as the Select Committee on Foreign Affairs has said, COCOM does not apply simply to defence. It is becoming a significant and substantial restraint on trade. I hope that the Government will agree that that is something that the West, collectively, could usefully address.
    Although I welcome the Labour party's support for our motion, the hon. Member for Newcastle Upon Tyne, North (Mr. Henderson), who spoke from the Labour Front Bench, tried to suggest that the Labour party was somehow ahead on this matter and that it would address itself shortly to a great and presumably revamped "white heat of technology" initiative. Unfortunately, the tenor of the hon. Gentleman's speech suggested that what was being put forward was some kind of "fortress Britain", which would be narrow and introspective. He failed to grasp the fundamental point that, if we are to be competitive in the market place, we must be in the market place and not protected from it. We agree that the market must be allowed to operate and that our companies must be able to respond to it. "Fortress Britain" may be a superficial populism, but ultimately it would destroy our industrial base by hiding it from the real world.
    We believe that the Government have a role to play in ensuring that we have a level playing field and reciprocal arrangements with our non-European competitors, such as the United States and especially Japan, and in ensuring that the single market within the European Community operates evenly and fairly for all of us.
    Mr. Kennedy: Like my hon. Friend, I welcome the Labour party's support for our motion, but does he agree that there is a fundamental contradiction in the Labour party supporting a motion that is substantially addressed to information technology issues which, by definition, technically cannot know any national boundaries because information technology is all about the international free flow of information, while at the same time alluding to pulling up the drawbridge around the British economy —which, as my right hon. Friend rightly says, would spell short-term disaster for our country?
    Mr. Bruce: Yes, it would, but it also seems incompatible with membership of a single-market European Community. The Labour party does not seem fully to have come to terms with that yet.
    We must ask how we can update, compete and keep up to date with new technology and how we can ensure that the new technology that we have will be fully and properly utilised. The Select Committee on Trade and Industry

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    concluded that we are a long way from taking full advantage of the capabilities of the technology and using it as effectively as we might.
    We saw one or two examples of both success and failure. The most often quoted example of success is American Airlines, which introduced its own computerised hooking system, involving all the American airlines, and found subsequently that that system actually made far more money than running the airline did—so much so, that the president of the company, when asked whether he would sell the airline or the system, said, "I will keep the system; the airline can go."
    On the other side of that experience is the Bank of America, which managed to lose $2 billion as a result of failing to introduce a modern and effective information system. When we met officials of the bank, it had got rid of software experts and was trying to see whether it could correct the situation by employing hardware experts. I suspect that the latest reports are not all that promising. This area is very important to the United Kingdom. I think it is generally accepted that our financial services industry is strong, advanced and innovative and, therefore, has substantial potential. It is not perfect—there is no room for complacency—but it is one of our strengths. Indeed, it has been a traditional source of satisfaction to British Governments of all colours that, whatever the state of our balance of trade, our balance of payments in terms of invisibles was always in surplus. But there are some worrying signs that that surplus is reducing.
    With the advent of 1993—almost a second, albeit international, big bang—there is some concern that British financial institutions may see the single market as something against which they have to protect themselves, instead of an opportunity that they have to exploit. I hope that the Government accept that they have a responsibility to try to ensure that when we get agreement on the single market it will be agreement that gives British financial expertise full access to that market. The Government must ensure that access is not restricted by barriers erected by other countries that want to protect themselves from our success. They must ensure that we can continue to develop the application of technology in the financial services area, to our own and the European Community's advantage.
    Let me put this debate in perspective by saying that the subject is central to the current state of the British economy. The Government are perpetuating the myth that, in the 10 years since they came to power, we have had an economic miracle. There have been changes, and some of them have been beneficial. I am not arguing that they have all been bad, but I say very forcefully that it remains the case that in the Government's first two years a third of our manufacturing capacity was swept away. The Government's defence is that the firms that were lost were weak and were, by definition, unable to withstand the blizzard, and that the result is a leaner, fitter economy.
    The trouble is that it is a smaller economy in terms of its ability to enable us to pay our way in the world. We are not paying our way in the world, and the current balance of payments deficit is a direct result of that policy. The position is getting worse, and is likely to get worse still, unless we can create the goods that the world wants to buy, with sufficient added value to enable us to maintain our standard of living. The signs are not good, and the Government's position is extremely vulnerable—and rightly so.
    Mr. Christopher Gill: I am sure that the hon. Gentleman would concede that when this massive fallout in British industry took place, one of the principal factors involved was that British industry was very weak financially. After a long period of high taxation, it simply did not have the cash resources to tide it over. I should be interested to know what the hon. Gentleman can tell us about his party's views on corporate taxes. Does he feel that those taxes are at the right level now? Does he not concede that this Government have already brought them down to a level that puts them among the lowest in the world? Does he think that there would be more investment in research and development, in training and in capital items if this trend towards lower corporate taxes were continued?
    Mr. Bruce: I shall be very happy to enter that debate if the hon. Gentleman can persuade the Government to give us time for it on another occasion. Let me ask him specifically why the Government have not been prepared to introduce tax relief for money invested in long-term research. That is a positive proposal that they could have taken up, but, so far, in 10 years, they have not done so. Radical changes of that kind could usefully be introduced. They might be positive and helpful. That is a direct answer to an irrelevant intervention.
    There seems to be a myth that we are moving into a post-industrial era, that we have created a post-industrial society. Looking at our post-industrial society right now, one can define it as meaning short-term profit and long-term bankruptcy. This country cannot sustain 55 million people unless we make goods and provide services that can be sold in the world. At present, we cannot do that. That is the dilemma that we are in.
    The consequences of this policy fall very unevenly within the United Kingdom. I do not intend to make a regional policy speech; I am simply pointing out that Scotland, Wales and the regions of England, which had predominantly manufacturing economies, have suffered disproportionately as a direct result of this change. It is not good enough for the Government to proclaim massive investment in shopping centres as some kind of substitute. Indeed, I think that the building of massive shopping malls on what once were the sites of great industries is actually a symbol of the monumental misjudgment of this Government. Those shopping malls are selling goods manufactured outside the United Kingdom, goods that we do not have the resources to buy. We must find ways of ensuring that at least some of those sites go back into manufacturing. We must ensure that our manufacturing capacity, our manufacturing base, is enlarged. But the Government have no answer to that problem. Indeed, the decline continues.
    This is one of the things that they might have made a virtue of. Over this period we have faced progressive and successive privatisation. The Government learn slowly. Initially, and fundamentally, privatisation was simply a means of getting their hands on finance quickly in order to buy votes with the taxpayers' money. One cannot dispute that in that policy they have been successful, but they have suffered because, in the process, they—the free-market Government—have actually privatised monopolies. They have privatised inefficient monopolies, centralised monopolies, inflexible monopolies, and the ones that were privatised earliest have failed to take full advantage of the

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    potential for technological advance and market development because they have been protected from the market by the strength of their monopoly.
    British Telecommunications may have been profitable, but it has been profitable because technology has been moving fast enough to reap the profits from the customers. But its speed of innovation has been much lower than the speed of innovation in telecommunications systems in other parts of the world. That is greatly to Britain's disadvantage.
    We argued at that time that it was a great pity that the Government did not establish, for example, Scottish Telecommunications, which could have been autonomous, and might have developed its own technology relevant to the Scottish economy and the more sparsely distributed population of Scotland. It might have developed something with export potential. It might have been possible to develop new products and new services. Incidentally, the same goes for Scottish gas or Scottish steel. Of course, in the case of electricity that is already the situation of Scotland, but it could be done in England as well.
    Mr. Page: Is not the hon. Gentleman completely misleading the House? When the industry was under nationalised control it was a crying shame that investment was not being put into it. The country simply could not afford it. Privatisation resulted in the investment of £2 billion, enabling British Telecom to make huge advances. In the past, the system was being held back by nationalisation.
    Mr. Bruce: It was being held back by the Government's public sector borrowing requirement, which, in any case, we never supported. I have always regarded that as the most spurious argument of all. Right now, the Government have a huge surplus, and there are nationalised industries that could make use of it. Indeed, so could the education system. But the Government will not release that surplus, even though the investment would be non-inflationary, would create jobs, and would underpin the wealth of the country in the future.
    Mr. Ashdown: My hon. Friend's last point is at the centre of the argument about the Government's irresponsibility in the matter. We can have a theological argument about whether privatisation or nationalisation is good, and a practical argument about whether it is good for British Telecom. But there can be no doubt that no firm in Britain would not distinguish between capital and revenue. What an act of irresponsibility it was to get the money from the privatisation of BT and others and then to spend it paying off this year's bills, instead of reinvesting it in the future.
    Mr. Bruce: It was worse in the early years. Tax cuts were used to buy goods which were made outside the country, and that aggravated the problem. That is the crux of the matter, particularly now that the Government have some resources. We must plough those resources into investment—the Government's responsibility is investment research and development and training—and the private sector must be given a climate in which it will invest
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    in product development, innovation and new technology. Unless we can do that and add substantial value within the United Kingdom, we will face disaster.
    In 10 years, people will realise that, far from an economic miracle, we had a reckless Government who used simplistic assumptions that took a once great manufacturing nation to the brink of bankruptcy and were financed only because they had the windfall bonus of North sea oil, which is now evaporating. We are heading for an awful lot of trouble. Unless this kind of motion is not only passed but acted upon, unlike our European competitors, post-1993 Britain will feel a nasty, cold draught.
    6.1 pm
    Mr. Robert Hayward: The motion is split into two parts. The first half is critical of the Government, and the second half puts forward a series of suggestions. It is unfortunate that the speech of the right hon. Member for Yeovil (Mr. Ashdown) was not also split into two parts. He spoke for 38 minutes, and he criticised the Government for 38 minutes. He made not one positive suggestion, with the exception that we should do away with COCOM. He had to withdraw that comment, and the hon. Member for Gordon (Mr. Bruce) clarified it in terms of reforming COCOM.
    The right hon. Member for Yeovil used the word "past". He also mentioned in passing the levels of investment. It was one of the thinnest, if not the shallowest, speeches I have ever heard from an hon. Member in opening a debate. He was wrong on gallium arsenide, transputers, and fibre-optic cables in terms of their use by Mercury and BT in docklands, and so on. He could not even get right the constituency of the Minister who replied to his Adjournment debate some years ago. When I challenged him on the brain drain, he had to revert to passing bets, which is a rather childish way of providing information to the House. It was a travesty of a speech, which took 38 minutes of what should have been an important debate.
    Much more interesting was the contribution by the hon. Member for Gordon. He made a series of positive suggestions. I agree with several of his suggestions about the long-term requirement to turn round the economy, and the need for investment in various sectors. However, I disagree with one or two points. Obviously, one is his assessment of the long-term future of the economy. Given that the motion refers to education, I was interested also to examine the capital investment which took place in education from 1973–79. During much of that period, the Government were supported by the hon. Gentleman's party. Between 1973–74 and 1978–79, the level of capital investment in education, particularly in schools, fell by 63 per cent. We are now paying, in terms of the shortages of systems analysts, computer programmers, engineers and the like, for long-term under-investment, particularly by a reduction of 63 per cent. in investment in schools over less than five years.
    I wholeheartedly concur with a comment in the Social and Liberal Democrats News of 7 April this year. It states:
    "his utterances on this topic only give weight to growing disenchantment with his leadership."
    In terms of the requirements that we face for the future —not for the past, as the right hon. Member for Yeovil said—it is significant that there was no suggestion of a long-term SLD policy. I should have thought that we

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    could have heard of one during the right hon. Gentleman's speech. I presume that we will hear about one when we debate another motion.
    Several of my colleagues have referred to inward investment and the internal investment that is now being undertaken by companies within this country. I am pleased to note that the level of investment as a share of GDP is now higher than it has been for the past quarter of a century. I agree with those hon. Members who said that investment is still not high enough, particularly in respect of a commitment to civil and research development. On that point I agree with the hon. Member for Newcastle upon Tyne. North (Mr. Henderson). He referred to inward investment by Toyota, Fujitsu, and Boch. In terms of the competitive nature and the achievements of major companies in this country nowadays, it is significant that, on the same day that Toyota announced its investment in Derby, GPA announced that it would purchase Rolls-Royce engines for every 757 that it included in its order. It is significant also that, in this day and age, an order of £1·5 billion—that is, in round terms—for the British aerospace industry can be hidden on back pages because of other levels of investment.
    We should not deny the successes. Equally, we continue to face challenges. For example, the concentration on information technology and telecommunications, upon which much of the debate has focused, is highlighted by the decline in our share of telecommunications exports. About 25 to 30 years ago, we exported about 25 per cent. of all telecommunications equipment to other industrialised and non-industrialised countries. That figure has fallen year in and year out for about a quarter of a century. Our share of telecommunications exports is now down to about 5 per cent.
    GPT, in the form of system X, is showing substantial progress in its capacity to compete. The problem is that, while it is trying to develop that product, the world's major competitors among telecommunications manufacturers such as AT and T, Northern Telecom, Ericsson's, Siemens and the like are moving on to the next phase of switchgear, and the investment required by GPT to develop that next phase is not available. Therefore, it is actively looking—whether willingly or not—to tie up with Siemens or some other company. We must recognise that problem in long-term industrial developments in this country. It requires not only investment but a changed attitude by management to training.
    For far too long, British management has been unwilling to commit any money to training anybody over 21. The supposition is that once they are over 21, they are trained; they will learn on the shop floor, office, drawing room or whatever, and that is it. British management must commit far more money to investment in training. It must be willing to take individuals off the shop floor year in, year out, and upgrade their expertise. The vast majority of foremen in German and French industry are graduates. They are required not only to turn over the line and ensure that it continues to produce, but to solve problems on manufacturing lines on a day-to-day basis.
    British management should adopt a similar attitude. If it does not, it will fail to survive, despite some of the successes that I have identified. For example, it must improve its links with universities. We have some of the best universities in the world. One of the few points on which I agree with the right hon. Member for Yeovil is that
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    although they produce excellent ideas, those ideas are not taken up by British industry but go to other countries to be developed.
    Mr. Kennedy: I agree with the point that the hon. Gentleman has just made. Why does he think that happens?
    Mr. Hayward: Because of the attitude of British management before and after the last war that British industry had captive markets. After that, the attitude was that the state would support industry. I do not think that anyone would accept either of those attitudes as correct. They are not the attitudes adopted by German companies comparable to GEC, such as Siemens and Nixdorf, or by Japanese companies such as NEC and the like. Those companies invest heavily in universities. They fund substantial sections of university courses in a way that British companies have never done. Therefore, there is not a natural feed from the major educational establishments.
    It is interesting to note in my part of the country that Hewlett-Packards is investing in Bristol where it is close to a major concentration of higher education. It believes that if it puts money in, it will get expertise out. That is the attitude that other British companies should adopt.
    I am conscious of the time; therefore, I shall abbreviate my comments. I want to address to the Government one comment not made by other hon. Members. We need to change the attitudes of all aspects of British society, including the Government. Over the next 10 years the Government should be more nimble on their feet. They should look towards the possibility of reducing the burdens of government. We have too many layers of government. Why not do away with counties? They cost money. Why not do away with a number of London boroughs by merging some of them? The burdens of government put an imposition on industry. It is a cost that we could well do without. The Government should not only ask other people to respond but should also be much more nimble than they have been in previous years.
    6.12 pm
    Mr. John Redwood: I suppose that the speech by the right hon. Member for Yeovil (M r. Ashdown) was never going to be a highlight of the parliamentary year or even of the parliamentary week, but it was not even a sidelight because it was so dim and, as my hon. Friend the Member for Kingswood (Mr. Hayward) said, so lacking in substance. Perhaps the SLD members knew what was coming because only five of them stayed for the duration of the speech—a sure reflection that they had been tipped off about the quality of the debate on this major Opposition day.
    Listening to the new "chips with everything" SLD lack of policy, I thought of a comment in the Evening Standard attributed to the right hon. Member for Yeovil:
    "Mine's a selective memory. I find it's continually getting rid of things, a bit like a computer when the ram is full."
    As I listened to his speech, I thought that the single K ram of the right hon. Gentleman was obviously well overloaded. The chemistry was poor, confusing a substance with a type of computer, the fibre-optics were short on fact, and the statistics were lamentable.
    The House was told that investment as a percentage of GDP was static. Yet this country has just been through several years of dramatic growth in investment. As we have already heard, investment is at a record level for the

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    1980s. Investment is well above the low level under Labour and under the famous Lib-Lab pact of which we used to hear so much. The House does not hear much now about the successes of the Lib-Lab pact. We have new record levels of investment overall and very high levels of investment in the private sector.
    Then the House was told that the country was weak in information technology. We had highly selective examples from someone who does not seem to understand the width and breadth of the industry that is established in this country. The right hon. Gentleman should visit silicon glen or the Thames valley to see the range and depth of the businesses that have been set up by individual entrepreneurs, local businesses and national companies. We have had a large influx of investors from all over the world, aware that this is the country in which information technology is flourishing in many branches.
    Next we had the incorrect research and development expenditure figures. Hon. Members might have thought that in a speech centred on research and development, particularly Government R and D, the right hon. Gentleman would get the figures right. If we take neutral and fair comparisons in the OECD figures, we find that they show clearly that, in Government research and development expenditure, this country is above the levels of the United States, Germany and Japan in total. If the right hon. Gentleman insists on taking the percentage of GDP spent on civil R and D, again the story is that this country is above the levels of America and Japan.
    The deficit in the 1970s and 1980s compared with the best countries abroad was in the private sector. The reason was the profit collapse engineered by the economic policies pursued by the Labour and Labour-Liberal Governments of the 1970s. The Conservative Government's economic policies have rebuilt and are rebuilding profitability. As profits have risen, so has investment in R and D. I am sure that the trend will continue while profits continue to prosper. I welcome the growing strength of R and D in the private sector which should add weight to the high level of GDP in public expenditure terms compared with our overseas competitors.
    The right hon. Member for Yeovil made a narrow speech based on many errors. I do not think that it was the kind of speech that will bring back Mr. Meadowcroft with his splinter Liberals. I cannot even see it bringing back the Isle of Wight Liberals who do not like trading under the new banner. It might not even keep happy the hon. Members for Ross, Cromarty and Skye (Mr. Kennedy) and for Caithness and Sutherland (Mr. Maclennan) who now sit on the part Bench that is normally reserved for the SDP and who, I am told, are getting rather nervous about defence policies and some other aspects of policy. In the battle of the minnows, the right hon. Member for Plymouth, Devonport (Dr. Owen) is in a different class; his performance is much better than that of the right hon. Member for Yeovil. If only we had heard the policies of the SLD, we would have known about the pro-inflation policies that the party would like to pursue. We would have heard about high rates, extra local government, an extra level of regional government and the local income tax—all anti-enterprise policies that would cost the people dear, but, fortunately, will never happen.
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    Turning to the positive side, I welcome the way in which industry is investing in the country and is beginning to develop in the flexible manufacturing areas new technologies and a new emphasis on quality, on product development and on better management-employee relationships. I think that that will be followed with much wider employee shareholding and employee participation in profit-sharing schemes and the like. The new high-tech and high value added economy requires greater co-operation, based on a shared belief in profitability, investment, incentives and the like. All those are happening as a result of the policies pursued by the Government.
    There is an area where industry and the Government can achieve more through investment which will help the enterprise revolution and the improvement in the domestic economy—the way that property is used in development. The House has already heard criticism by the hon. Member for Gordon (Mr. Bruce) who does not like to see old industrial sites replaced by new commercial development. I do, if the result is a new factory, built to modern standards with high quality equipment, as it often is, or better shopping facilities, where people can enjoy the fruits of their prosperity and buy the goods and products that they wish to have. I see nothing wrong with a process of renewal from which we can draw encouragement as it progresses.
    Many industrial companies see the advantage of redeveloping sites by building new high technology factories to meet the right requirements for emission controls and the recycling of heat and power; they are providing good working conditions for employees and are responsive to the new product design of the new economy.
    Those things can flow from well-chosen property developments, which can provide the wherewithal and which can develop the new economy. The forest of tower cranes around many cities is evidence that that process of renewal is now under way. Some companies could do more, and I hope that they will turn their attention to it.
    The Government sector, too, could do more. In that area the PSA—for which the DTI is not directly responsible—could do a great deal more to release land and buildings and to encourage the process of renewal. That would not necessarily involve any cost to the public sector, because of the surplus in that estate. The total estate is mind-boggling in size—some 10 million sq m. I would estimate that at least 5 per cent. of that—or getting on for 5 million sq ft—is surplus to requirements and could be disposed of. That would release land and property for redevelopment which could further power the enterprise economy. In addition, there are about 100,000 acres of surplus land in the civil estate where the Government could make further efforts to ensure that it is put on the market and released for enterprise redevelopment.
    The Government, when deploying their departmental staff—in the DTI and other Departments—could recognise that rentals, for example, in docklands are £25 per sq ft, yet in Westminster and the west end they are £50 per sq ft. For the price of a short tube or water bus journey, people could be better accommodated at half the rental cost and the process of renewal could be developed, because many central London office premises occupied by Government Departments would be suitable for refurbishment, redevelopment and redeployment as the new economy gets under way.

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    Generally, the economy is performing well and the process of investment is gathering momentum. That process will continue if enterprise policies are pursued fully and if the wider opportunities afforded by a general common market in the run-up to 1992 are grasped and the principles of liberal trading firmly bulwarked in those proposals.
    I have heard nothing from the Opposition that implies that there needs to be a great change of Government strategy towards investment. All that has ever been said about investment by the Government has turned out to be true—if business is given its head, if profitability is rebuilt, and if enterprise is supported, investment will follow through. It is high time that the property and the estate of the Government sector were brought up to the same modern standards as the rest of the economy. In so doing, surplus capacity could be released that would make money for the Government and would further the enterprise revolution.
    6.22 pm
    Sir Anthony Meyer: I congratulate the Social Democrats on their choice of subject for the debate, on the wording of their motion, much of which I agree with, on the performance of their leader—in which he appears to have lost interest himself—and, above all, on the brilliance of their timing.
    The Government have a good story to tell and, if there is a good story to tell, nobody tells it better than my right hon. Friend the Chancellor of the Duchy of Lancaster. Certainly, in real terms the Government have managed to maintain the value of investment. Of course, that is nowhere near enough. We have only to glance around us to see how lamentably inadequate is the investment now taking place, or planned for the near future, in our roads, railways, city centres, hospitals, education, health and our whole built environment. Those of us who are members of the Select Committee on Welsh Affairs are aware of the depressing contrast between the preparations being made on the French side of the Channel tunnel for communications to the tunnel, not necessarily passing through Paris, and the timid preparations that are being made on the British side.
    What is more, the Government appear to make things worse by dragging their feet in all too many of the collaborative enterprises in Europe. I thought that the Prime Minister in that famous Bruges speech made the point that Europe should concentrate on doing the things that we could do better together than alone. However, the Government do not appear to be living up to even the good bits of the Bruges speech. Our record in the European Space Agency, for example, is lamentable. We are being left out. I listened with some joy the other night to Lord Jenkins of Hillhead, who described Britons arriving at the railway station just after the train had gone, grumbling loudly that they did not mean to catch the train anyway, changing their minds, dashing down the line, humping a suitcase in each hand, blessing their lucky stars that the train had stopped at a signal, clambering on board and then complaining that all the seats in the dining car were full.
    Of course, the timing of the debate serves to focus attention on the experiment, in quite a different approach to those things, in Wales, where a by-election is taking place. The investment in the environment in Wales, the
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    improvement of communications, the encouragement of research and development and the allocation of enough taxpayers' money for infrastructure improvement—so that they attract much larger sums of private investment—have been part of the approach ever since Lord Crickhowell very wisely did a U-turn in 1979 over the preservation of the Welsh Development Agency. It had been marked down for instant destruction after the 1979 election, but Lord Crickhowell did a U-turn and it was allowed to run on. Admittedly, it had to adapt itself radically in the process. That has been to the huge benefit of the people of Wales and to the unconcealed envy of hon. Members from neighbouring English areas.
    Under Nicholas Edwards, as he then was, Wales enjoyed an unfair share of investment projects and major developments, such as the gigantic Cardiff bay project, which will make Cardiff one of the most attractive cities in western Europe.
    The present Secretary of State for Wales has taken the process of using public money to create beautiful infrastructure, which sparks off huge private investment, a giant step further. The difference is that he boasts of doing things which his predecessor coyly admitted doing. The difference is more important than a mere difference of phraseology. It is important in the climate that has resulted in Wales, where we have local authorities of all political complexions, trade unions and employers working together in close partnership, which would be labelled in other parts of the country—and by some of my hon. Friends—as "corporatism" and consequently derided. I prefer to call it the human face of capitalism —a capitalism which works well and is in tune with the Welsh temperament. At all events, it brings in the bacon.
    A report in The Sunday Times on 16 April 1989 said:
    "Tomorrow Walker will announce that Bosch plans to build a £100 million motor electrics plant promising 1,200 new jobs at Miskin near Cardiff"—
    surprisingly—
    "right on the border of the Vale of Glamorgan constituency."
    It went on:
    "Bosch will be the latest, and one of the biggest, examples of foreign undertakings in Wales … Wales has enjoyed a string of new investments since he took office after the last election … Beginning with the location of a Trustee Savings Bank office in Newport at the end of 1987, bringing 2,000 new jobs, it continued with the huge investment at Ford (£726m)" —
    the biggest engine plant in Europe—
    "expansion of a string of Japanese factories in north and south Wales, and the arrival or expansion of merchant banks in Cardiff."
    There has not only been new manufacturing industry but financial services, too. The report says that the Secretary of State
    "has also increased the budget of the Wales Tourist Board to encourage more visitors to the valleys, while urban renewal is going ahead in black-spots like Abertillery, Tonypandy, Crumlin and Tredegar."
    That all adds up to quite a programme.
    It was reported that the Secretary of State asked:
    "Where else in Britain is so much action taking place to improve the economy?"
    I can answer that question from my experience, because in my constituency there are such developments. Some of them are more modest and some are a bit controversial, such as the development of a magnificent Victorian castle to provide a home for the National Portrait Gallery. That is not just a great artistic enterprise, but is serving as an attraction for discerning investors and employers who

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    fancy setting up high-grade technological industry or provision for financial services in the area. It makes an extremely attractive complex. Public money has gone into that, but sometimes the taxpayer or the ratepayer receives large dividends in terms of good jobs.
    There is altogether a new spirit in Wales, a new readiness to stop squabbling, which is our favourite hobby when there is nothing better to do. Now there is something better to do, and Wales under Walker is getting it done. I suspect that before long the results will be visible.
    6.30 pm
    Mr. Charles Kennedy: I thank the hon. Member for Clwyd, North-West (Sir A. Meyer) for a delightful speech. I have returned this afternoon from visiting Barry in the Vale of Glamorgan constituency. The hon. Gentleman spoke about the need for an enlightened and constructive public contribution and for co-operation between the public sector and private investors in the infrastructure and communications. He sounded almost as convincing as our excellent candidate, Frank Leavers, at the by-election press conference this morning.
    We hear that not many Cabinet Ministers will traipse through the Vale of Glamorgan. They are rather thin on the ground and that is because of the current differences between the Secretary of State for Wales and the other members of the Cabinet on economic policy. At least the Secretary of State for Wales has a friend in the hon. Member for Clwyd, North-West. It was interesting to note the long faces and dry expressions of the Minister and some Conservative Back Benchers as the hon. Gentleman delivered his enlightened speech. I cannot share his optimism about what will happen on 4 May. The hon. Gentleman seems to think that the Welsh love Walker, but I suspect that people in the Vale of Glamorgan will think that they are voting about Maggie.
    Mr. Redwood: Many of us supported our hon. Friend the Member for Clwyd, North-West (Sir A. Meyer) in what he said about combined public and private investment. Did the hon. Member for Ross, Cromarty and Skye (Mr. Kennedy) go to the Vale of Glamorgan to try to bring off a last-minute alliance with the SDP?
    Mr. Kennedy: That was certainly not my purpose. I am not a business man, but I can recognise bad investments when I see them.
    The hon. Member for Wokingham (Mr. Redwood) spoke about my right hon. Friend the Member for Yeovil (Mr. Ashdown), the leader of our party. My right hon. Friend was absent for a short time during the speech of the hon. Member for Wokingham. I am sure that the hon. Gentleman will have noticed that the Chancellor of the Duchy of Lancaster was scarcely present for the debate after he finished his speech. We make no complaint about that because we accept that ministerial duties have taken him elsewhere. [Interruption.] I am grateful for the fact that the Chancellor of the Duchy is conducting the debate rather than the Under-Secretary of State for Industry and Consumer Affairs. The hon. Member for Wokingham was slightly wide of the mark in his criticisms.
    My right hon. Friend blinded the hon. Member for Wokingham with science. That is self-evident. We read
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    and hear a great deal about the hon. Member for Wokingham. He is said to be the great white hope, the next intellectual guru, shortly heading for the Front Bench where the Minister is lounging nonchalantly with his feet on the Table. If that is the level of attack that we can expect from Conservative Members who are to be moved in the direction of the Treasury and the Dispatch Box, there is considerable hope for the Opposition.
    The hon. Member for Wokingham used such revealing phrases as "things are getting much better because investment is gathering momentum." That is lawyerspeak for the fact that under the Government investment has been in a hell of a mess for a long time. He and his hon. Friend the Member for Kingswood (Mr. Hayward) spoke about skill training and education. As both hon. Members went to some lengths to cast doubt on the figures that we have put forward, it is worth rehearsing the figures again. In his speech my right hon. Friend the Member for Yeovil spoke about investment in science and technology research and development as an estimated ratio of non-defence-related research and development. We have not heard that adequately rebutted in speeches by Conservative Back Benchers any more than we have heard an adequate Government response to last year's report by the Select Committee on which my hon. Friend the Member for Gordon (Mr. Bruce) served.
    When one compares Britain with its international competitors one gets confirmation of what we have known for a long time—that in many fields Britain lags woefully behind Japan and the emerging Pacific rim nations in the economic co-operation that is developing there and in the European Community. That is not about to change as a result of anything that we heard from the Minister who had nothing new to offer. However, the matter goes further than that. It is in the universities that much research and development have their seedcorn. I should like to deal with the attention that Britain gives to that.
    A study of metalworking in Germany and Britain compared the qualifications of German skilled workers and people in the British work force. The results were quite horrendous. In 1985, 55,000 West Germans were trained and received craft qualifications in mechanical engineering. In Britain the figure was 10,000, which means that more than five times more people qualified in the West German economy. In terms of academic qualifications, Britain now rates 17th out of the top 20 OECD countries in the participation rate of 16-year-olds in full-time education. In Japan 95 per cent. of students stay on beyond the age of 16, but in Britain only 32 per cent. do so. No wonder our economy is having international difficulties.
    In debates on education we have heard that in higher education we continue to send a far smaller proportion of our 18-year-olds into the tertiary sector and on to university than is the case in the United States, Japan, the Netherlands, France, Italy and West Germany. The list goes on.
    Mr. Richard Page: Does the hon. Gentleman accept that we have a more generous support system for our students in further education than any country in the industrialised world?
    Mr. Kennedy: That is about to change too—if it is the case. I hardly think that that is a major Back-Bench argument in favour of Government policy. That is about

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    to change in the tertiary sector, and our revamped training schemes could hardly be said to be generous or productive in achieving their stated objectives for young people. The Government and Conservative Members should look again at the legacy that they are leaving this country.
    Mr. Simon Hughes: Does my hon. Friend accept that in the Secretary of State's Green Paper on student finance the international comparisons showed that European countries that provide the highest level of support for students with taxpayers' money also have the highest participation rate by post school leaving age students? Therefore, there appears to be a direct international correlation between investment by Government in students staying on at school and their attainment. If the Government go along the road that they are going along, we are likely to see a reduction in opportunity rather than an increase.
    Mr. Kennedy: I am grateful to my hon. Friend. His pertinent point illustrates the sentiment expressed by the leader of our party when he spoke about our need to move from low quality industrial assembly to a much higher quality industrial product. In reply to the hon. Member for Kingswood, may I say that that requires far more positive encouragement of the role of university departments. While he was right to speak of attitudinal problems in Britain since the second world war, any country that is serious about developing skills, technology and a resource base would not allow some university departments to go to the wall, as ours have, or be substantially reduced in their efforts and ability because of the squeeze on education expenditure of the past 10 years.
    The Government's general approach in this debate is similar to their approach in many other matters. They speak of how things are picking up or taking off or are so much better and they always use as their base line 1981 or 1982. They want us to forget the first two and a half years of their administration when we had savage deflationary policies of a type with which the hon. Member for Clwyd, North-West would be most uncomfortable and in which he would find little to commend. Not the least of the deflationary measures was the 1981 Budget, the consequences of which we have been living with ever since.
    When Conservative Members say how much things are improving, I can only say that if one hammers any industrial base low enough, when it begins to recover from its contraction any level of growth will show up per capita far more than it would if a more adequate manufacturing, resource and technology base had been maintained. It is for ever an indictment of the Government that they manifestly failed to achieve that in their earlier days in office, so their present success is tempered by the damage done as the result of their general economic approach.
    It has been extremely useful that the Social and Liberal Democrats have raised these issues this afternoon, touching on not just many of the broad economic arguments on trade imbalance and so on but, in particular, those "forefront" technologies where, as an island and, historically, a trading nation but also as a nation of declining fossil fuels and one more closely linked to the European Community—a trend that will continue beyond 1992—Britain must find a new competitive industrial role for itself internationally. Much of that will rest on the younger generation and on the technology that will dominate their lives to an even greater extent than at
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    present and soon the research and development, employment and industrial productive opportunities that such technology gives rise to.
    Although I welcome the fact that the Labour party will vote for our motion this evening—
    Mr. Hayward: Some of them.
    Mr. Kennedy: Some of them will, yes, and I welcome that. But although the hon. Member for Newcastle upon Tyne, North (Mr. Henderson) the only Labour Member who spoke in the debate, welcomed the fact that we seem to have something in common in our attitude towards the Government, a lot more modernisation of attitude is required of the Labour party towards these issues before it can claim with any credibility to occupy the political ground, the terra firma, occupied by our party when we argue for the importance of new technology, the greater emphasis that must be given to research and development and the excellent result that we anticipate because of that in the Vale of Glamorgan.
    6.44 pm
    The Parliamentary Under-Secretary of State for Industry and Consumer Affairs (Mr. Eric Forth): Before we go any further, we must remind ourselves that this is an Opposition day, its eighth allotted day, although, looking round the Chamber during the debate, in what I was going to describe as the ebb and flow of debate and now think that "gentle gurgle" would be a better description, I noticed that, on my counting anyway, for most of the time there were present one Member from the official Opposition Labour party and two members of the SLD. There was also one Member from the SDP.
    Mr. Don Dixon: I have sat here since half-past four this afternoon—[Interruption.]—and I have been bored to bloody tears most of the time. I have also done a bit of counting. At one time there were only four Conservative Members, and one of them was a parliamentary private secretary. Had there been a vote earlier, the Labour party would have won it, because we had more hon. Members than the rest put together.
    Mr. Forth: I am grateful to the hon. Member for Jarrow (Mr. Dixon). I did say that it was an Opposition day. It is not unreasonable for us to expect the Opposition to pay more attention to it and take it more seriously. It was worth making that observation so that we could get the importance of the debate fully in context.
    In the early stages of the debate the argument revolved around the state of the economy. The right hon. Member for Yeovil (Mr. Ashdown) spent some time describing an economy that I was quite unable to recognise. The hon. Member for Newcastle upon Tyne, North (Mr. Henderson) followed on the same lines. I was much more attracted to, and identified more readily with, the description given by my hon Friend the Member for Wokingham (Mr. Redwood), who was acknowledged by Opposition Members to be one of the intellectuals and rising stars on the Government Benches.
    My hon. Friend was able accurately to describe the development of the economy over the past few years in a way that seems to have escaped Opposition Members. It is a source of continuing sadness and regret that every time we have a debate here, Opposition Members seem to want to describe our economy in such a way that it would not

    385
    attract any investment from abroad or inspire any confidence from members of our own society. The truth is that Opposition Members are in a state of confusion, not to say schizophrenia, about this. What I should like to know is whether all Opposition Members, particularly in the Labour party, agree with the early-day motion, in the name of three of their hon. Friends, welcoming the arrival of the Toyota car assembly plant in Derbyshire which, it says, will create many genuine, new and meaningful jobs for the people who live in the county and help re-establish it as a centre of industrial development. Some speeches by Opposition Members did not give that impression. I hope that at some point we will have an indication of what Opposition Members think about this influx of investment which fully reflects the confidence of the Germans and the Japanese in our economy—a confidence that Opposition Members may not share.
    Mr. James Wallace: I am grateful to the Minister for paying regard to the sedentary comment that I made earlier about the hon. Member for Wokingham (Mr. Redwood) being regarded as one of the intellects of the Conservative party. Perhaps the hon. Member for Wokingham will put on record his own sedentary response that he was "the only one".
    If the Government are as keen to attract investment as the Minister says, is that helped or hindered by the present high interest rates?
    Mr. Forth: The present level of interest rates does not seem to make a material difference either to internally generating investment, which is at a record level, or to the level of inward investment by companies from other countries.
    We have had to make interest rate adjustments to deal with inflation, about which the Chancellor of the Exchequer has said many times that he is unhappy and with which he is dealing. Nevertheless it has neither impeded nor hampered the rate of investment, domestic or from other countries, and the development of the economy.
    The hon. Member for Newcastle upon Tyne, North said that, without an alteration in the exchange rate—he did not specify either direction or level—many industrialists would be increasingly unable to do business. That seems to be at odds with the experience of the German and Japanese economies which have both—against a very strongly appreciating currency—performed superbly well in exports over many years. If a business is successful, and has a good product which it produces to a high quality, it will export, even over a strong exchange rate parity. The exchange rate bolt hole is no longer available to those who want to take refuge there.
    I shall deal with one or two of the points made by the right hon. Member for Yeovil, who, in his lengthy contribution, dealt substantially with information technology. My hon. Friend the Member for Kingswood (Mr. Hayward) pointed out in his trenchant way that he felt that the expertise of the right hon. Member for Yeovil was—let me say—questionable. I use that word because I am in one of my more polite moods.
    The right hon. Member for Yeovil was quite wrong in two or three respects. He talked about gallium arsenide —with which I know the House is familiar. About two
    386
    years ago the Department of Trade and Industry announced the availability of about £25 million for collaborative projects with industry, under the heading of gallium arsenide. It is a matter of great regret to the DTI, but it is true, that that money has not been taken up in full by industry. There have been regrettably few projects. The companies in the private sector—the experts who know what they are talking about—did not see fit to take up what the Government offered. Time and again we see that pattern reflected, and time and again the matter is ducked by Opposition Members. If the Government offer support, but the private sector—the wealth creators, profit makers and experts—do not see fit to take it up, there is not much more that the Government can do.
    Mr. Ashdown: The hon. Gentleman is obviously referring to the Plessey experience. However, did not the Government's committee on advanced materials recommend a programme of not £25 million, but about £300 million to help the development of gallium arsenide? When the Government finally moved, did they not do so too little, too late? When Plessey tried to use that money to get back into the market, it discovered that it had been taken away from abroad. Plessey has had to withdraw substantially from developing an invention that could have been ours to produce, instead of ours to buy in from others' production.
    Mr. Forth: I do not accept the right hon. Gentleman's analysis. I have given him the facts. If a product is as good as he claims this one is, the window of opportunity will be greater than he has suggested.
    The right hon. Member for Yeovil expressed a galactic view on fibre-optics. He came to the House waving something which was halfway between a wand and a panacea—I am not sure which is the most appropriate. He suggested that a universal network of fibre-optics, reaching into every home, so that we could shop electronically on broad band frequencies, would be the saving of the country. However, the right hon. Gentleman failed—as Opposition Members always do—to spell out in detail why that should be done, where there was a demand for it and, much more important, who would pay for it.
    In the glib way that we have come to expect from the right hon. Member for Yeovil, he referred to pump-priming, but he did not say which pump was to be primed, to what extent or by whose money. I suspect that, inevitably, it will be taxpayers' money. Those who know what they are doing and have the resources to do it—principally British Telecom and Mercury Communications—have already started to develop such technology and are installing it where they think it appropriate.
    It would take 15 years to achieve that which the right hon. Member for Yeovil seemed to suggest could be done in the twinkling of an eye. This is one of those fraudulent proposals which sounds good if it is said quickly, and even better if nobody is told what it will cost, and purports to produce some magical transformation in the economy. However, that will not happen.
    Mr. Ashdown: In his disparaging remarks, the hon. Gentleman criticises the Government. They have done exactly that which needs to be done within the confines of Northern Ireland, but not for the whole nation. They have taken the lead in saying what should be established and what the interfaces should be, and showing industry how

    387
    it could play a part in the investment. If that is good enough for Northern Ireland, why is it not good enough for the whole of Great Britain?
    Mr. Forth: That is not what the right hon. Gentleman said earlier. He is talking about interfaces—whatever that means in this context—and about giving guidance. We are always giving guidance—we give it frequently. However, we shall not endorse the right hon. Gentleman's proposal, or the bandwagon on to which Members of the official Opposition have climbed, to produce an unspecified, all-singing, all-dancing network at an unspecified cost.
    Mr. Henderson: Is the Under-Secretary aware that British Telecom wishes to introduce fibre-optics, but, under the terms of privatisation, is unable to do so? It seeks changes to its constitution to allow it to do that. It also seeks Government funding, which most countries recognise is necessary if fibre-optics—an important new technology—is to be introduced.
    Mr. Forth: The hon. Gentleman, no doubt unintentionally, misleads the House. About 550,000 km of fibre-optics have already been installed. Therefore, he can hardly claim that we are preventing British Telecom from doing so. Discussions are continuing on the best way forward and the nature of the relationship between British Telecom and the Government. It is unfair to suggest that we are blocking the sensible and correct advancement of fibre-optics in a way that can be supported by proven consumer demand. We do not support a pie in the sky approach.
    The hon. Member for Gordon (Mr. Bruce) was the only member of the Select Committee on Trade and Industry —or, certainly, one of the few—to participate in the debate. I was slightly surprised that more members of the Select Committee did not attend. I thought they might take the opportunity to expand their thoughts on the matter. The hon. Member for Gordon did so very well.
    Mr. Malcolm Bruce: To be fair to the members of the Select Committee, they are on a visit to Edinburgh and Manchester investigating the impact of the single market on the financial services. I have broken my visit to participate today.
    Mr. Forth: The hon. Gentleman's priorities are absolutely right. I am not surprised to hear that his colleagues are fact finding. Some of the hon. Gentleman's points were important and it is important for the House to understand the nature of the difference of views between the Select Committee and the Government. As the hon. Gentleman well knows, there is a genuine difference of view.
    The Select Committee was looking for what the Department sees as a more interventionist approach than the Department of Trade and Industry is prepared to support. In particular, proposals were made about the role of an information technology Minister, the pull-through concept on information technology and Government procurement.
    The Government have taken quite the opposite view. They have stressed over and over again that individual Departments and sections in the Government should be given greater autonomy and freedom to make their own decisions and are, therefore, able to enter a competitive market and buy what they think best for their needs. This old-fashioned idea of the gargantuan dinosaur of
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    Government, directing the sector by procurement policies, is, I regret, typical of Select Committee members but not modern Government policy. There is no point in disguising the fact that there is a difference of emphasis and the Department has a different view from that of the Select Committee.
    The hon. Member for Gordon also made a crucial reference to the use of information technology. He made a good case for American Airlines. However, he missed the fact that that involves the area of use. I invite the hon. Gentleman to study again the Government's White Paper which replied to the Select Committee's report. We emphasised that we wished to get the use of information technology on a proper basis and were prepared to help and assist in its understanding and best use. That is not the same as trying to pretend that, in this country, we can compete in every sector of the industry, which is a point that my right hon. Friend the Chancellor of the Duchy made earlier. We shall continue to make the distinction between encouraging proper and effective use of IT throughout the industrial sector and pretending that we can compete with every economy in the world.
    As my right hon. Friend said, it is worth emphasising that, while there is no doubt that we have a deficit in certain areas of information technology, we share that with most other developed countries in the OECD. Most countries in western Europe and the EEC have such a deficit, although Japan has not. None of us has managed to beat the problem. I am not saying that this is necessary or excusable, but we have all found it very difficult to deal with and have yet to come up with a complete solution.
    This has been a useful debate, although, regrettably, rather thinly attended at times. We have heard some thoughtful contributions, mostly from Conservative Members and we shall certainly consider them when we study today's speeches.
    In view of what has been said, I strongly urge hon. Members to support the amendment.
    Question put, That the original words stand part of the Question:—
    The House divided: Ayes 67, Noes 197.

    Division No. 166]

    [7 pm

    AYES

    Allen, Graham

    Grocott, Bruce

    Alton, David

    Haynes, Frank

    Ashdown, Rt Hon Paddy

    Heffer, Eric S.

    Barnes, Harry (Derbyshire NE)

    Henderson, Doug

    Barnes, Mrs Rosie (Greenwich)

    Hinchliffe, David

    Beith, A. J.

    Hughes, Simon (Southwark)

    Bell, Stuart

    Johnston, Sir Russell

    Bermingham, Gerald

    Jones, Martyn (Clwyd S W)

    Boateng, Paul

    Kennedy, Charles

    Buckley, George J.

    Kirkwood, Archy

    Campbell-Savours, D. N.

    Leighton, Ron

    Carlile, Alex (Mont'g)

    Livsey, Richard

    Clarke, Tom (Monklands W)

    McKay, Allen (Barnsley West)

    Clay, Bob

    Maclennan, Robert

    Clwyd, Mrs Ann

    Madden, Max

    Cohen, Harry

    Mahon, Mrs Alice

    Corbyn, Jeremy

    Michie, Mrs Ray (Arg'l & Bute)

    Cryer, Bob

    Mowlam, Marjorie

    Dixon, Don

    Mullin, Chris

    Dunnachie, Jimmy

    Parry, Robert

    Eastham, Ken

    Patchett, Terry

    Fearn, Ronald

    Pike, Peter L.

    Flannery, Martin

    Powell, Ray (Ogmore)

    Forsythe, Clifford (Antrim S)

    Quin, Ms Joyce

    Godman, Dr Norman A.

    Rees, Rt Hon Merlyn

    Golding, Mrs Llin

    Richardson, Jo

    Griffiths, Win (Bridgend)

    Ruddock, Joan

    389

    Sedgemore, Brian

    Welsh, Andrew (Angus E)

    Sheerman, Barry

    Wigley, Dafydd

    Sheldon, Rt Hon Robert

    Wilson, Brian

    Skinner, Dennis

    Worthington, Tony

    Spearing, Nigel

    Steel, Rt Hon David

    Tellers for the Ayes:

    Taylor, Matthew (Truro)

    Mr. James Wallace and

    Wall, Pat

    Mr. Malcolm Bruce.

    Wareing, Robert N.

    NOES

    Alexander, Richard

    Dover, Den

    Alison, Rt Hon Michael

    Dunn, Bob

    Allason, Rupert

    Durant, Tony

    Amess, David

    Emery, Sir Peter

    Amos, Alan

    Evans, David (Welwyn Hatf'd)

    Arbuthnot, James

    Evennett, David

    Arnold, Jacques (Gravesham)

    Fairbairn, Sir Nicholas

    Arnold, Tom (Hazel Grove)

    Fallon, Michael

    Ashby, David

    Field, Barry (Isle of Wight)

    Aspinwall, Jack

    Fishburn, John Dudley

    Baker, Nicholas (Dorset N)

    Fookes, Dame Janet

    Batiste, Spencer

    Forman, Nigel

    Bellingham, Henry

    Forsyth, Michael (Stirling)

    Bennett, Nicholas (Pembroke)

    Forth, Eric

    Benyon, W.

    Fowler, Rt Hon Norman

    Bevan, David Gilroy

    Fox, Sir Marcus

    Blackburn, Dr John G.

    French, Douglas

    Boscawen, Hon Robert

    Gale, Roger

    Boswell, Tim

    Garel-Jones, Tristan

    Bottomley, Peter

    Gill, Christopher

    Bowden, Gerald (Dulwich)

    Gilmour, Rt Hon Sir Ian

    Bowis, John

    Goodhart, Sir Philip

    Boyson, Rt Hon Dr Sir Rhodes

    Goodson-Wickes, Dr Charles

    Braine, Rt Hon Sir Bernard

    Gow, Ian

    Brandon-Bravo, Martin

    Greenway, Harry (Ealing N)

    Brazier, Julian

    Greenway, John (Ryedale)

    Bright, Graham

    Gregory, Conal

    Brooke, Rt Hon Peter

    Griffiths, Sir Eldon (Bury St E')

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

    Griffiths, Peter (Portsmouth N)

    Browne, John (Winchester)

    Ground, Patrick

    Bruce, Ian (Dorset South)

    Hague, William

    Buchanan-Smith, Rt Hon Alick

    Hamilton, Neil (Tatton)

    Budgen, Nicholas

    Hanley, Jeremy

    Burns, Simon

    Hannam, John

    Butcher, John

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

    Butler, Chris

    Hargreaves, Ken (Hyndburn)

    Butterfill, John

    Harris, David

    Carlisle, John, (Luton N)

    Hawkins, Christopher

    Carlisle, Kenneth (Lincoln)

    Hayward, Robert

    Carrington, Matthew

    Heathcoat-Amory, David

    Carttiss, Michael

    Hicks, Robert (Cornwall SE)

    Channon, Rt Hon Paul

    Hind, Kenneth

    Chapman, Sydney

    Hordern, Sir Peter

    Chope, Christopher

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

    Clark, Hon Alan (Plym'th S'n)

    Howarth, G. (Cannock & B'wd)

    Clark, Dr Michael (Rochford)

    Howe, Rt Hon Sir Geoffrey

    Clarke, Rt Hon K. (Rushcliffe)

    Hughes, Robert G. (Harrow W)

    Coombs, Anthony (Wyre F'rest)

    Hunt, David (Wirral W)

    Coombs, Simon (Swindon)

    Hunter, Andrew

    Cope, Rt Hon John

    Irvine, Michael

    Cormack, Patrick

    Jack, Michael

    Couchman, James

    Jackson, Robert

    Currie, Mrs Edwina

    Janman, Tim

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

    Jessel, Toby

    Day, Stephen

    Kilfedder, James

    Douglas-Hamilton, Lord James

    King, Roger (B'ham N'thfield)

    390

    Knapman, Roger

    Porter, David (Waveney)

    Knight, Greg (Derby North)

    Powell, William (Corby)

    Knowles, Michael

    Raison, Rt Hon Timothy

    Lawrence, Ivan

    Redwood, John

    Lee, John (Pendle)

    Riddick, Graham

    Lester, Jim (Broxtowe)

    Shaw, David (Dover)

    Lightbown, David

    Shaw, Sir Giles (Pudsey)

    Lilley, Peter

    Shaw, Sir Michael (Scarb')

    Lloyd, Peter (Fareham)

    Skeet, Sir Trevor

    Lord, Michael

    Speed, Keith

    Luce, Rt Hon Richard

    Speller, Tony

    Lyell, Sir Nicholas

    Stanbrook, Ivor

    Macfarlane, Sir Neil

    Stern, Michael

    MacKay, Andrew (E Berkshire)

    Stevens, Lewis

    Maclean, David

    Stewart, Allan (Eastwood)

    McNair-Wilson, Sir Michael

    Stewart, Andy (Sherwood)

    Major, Rt Hon John

    Stradling Thomas, Sir John

    Mans, Keith

    Summerson, Hugo

    Marlow, Tony

    Taylor, John M (Solihull)

    Marshall, John (Hendon S)

    Taylor, Teddy (S'end E)

    Marshall, Michael (Arundel)

    Tebbit, Rt Hon Norman

    Martin, David (Portsmouth S)

    Thompson, D. (Calder Valley)

    Maude, Hon Francis

    Thorne, Neil

    Mayhew, Rt Hon Sir Patrick

    Thurnham, Peter

    Mellor, David

    Townend, John (Bridlington)

    Meyer, Sir Anthony

    Tracey, Richard

    Miller, Sir Hal

    Trippier, David

    Mills, Iain

    Trotter, Neville

    Mitchell, Andrew (Gedling)

    Twinn, Dr Ian

    Mitchell, Sir David

    Waddington, Rt Hon David

    Moate, Roger

    Walker, Bill (T'side North)

    Morris, M (N'hampton S)

    Walters, Sir Dennis

    Morrison, Sir Charles

    Wardle, Charles (Bexhill)

    Moss, Malcolm

    Watts, John

    Moynihan, Hon Colin

    Wheeler, John

    Mudd, David

    Widdecombe, Ann

    Needham, Richard

    Wilkinson, John

    Neubert, Michael

    Wilshire, David

    Newton, Rt Hon Tony

    Winterton, Mrs Ann

    Norris, Steve

    Wood, Timothy

    Onslow, Rt Hon Cranley

    Page, Richard

    Tellers for the Noes:

    Paice, James

    Mr. Stephen Dorrell and

    Pattie, Rt Hon Sir Geoffrey

    Mr. Tom Sackville.

    Question accordingly negatived.
    Question, That the proposed words be there added, put forthwith pursuant to Standing Order No. 30 (Questions on amendments), and agreed to.
    MADAM DEPUTY SPEAKER forthwith declared the main Question, as amended, to be agreed to.
    Resolved,
    That this House notes the success of the Government's policies in creating a climate in which industry has achieved record levels of output, productivity and investment; welcomes the continuing increase in investment by United Kingdom companies in civil research and development; endorses the Government's policy of supporting collaborative research and development both in the United Kingdom and in Europe; approves the measures being taken by the Government to make education and training more responsive to the needs of industry and commerce; and welcomes the success of the United Kingdom in attracting advanced technology inward investment as a further indication of the strength of the United Kingdom economy.

Care in the Community
7.13 pm
Mr. Ronnie Fearn: I beg to move,
That this House condemns the Government's lack of policy and action on community care; believes that projected demographic changes call for a long-term strategy to cover the many types of care that an elderly population will require; further believes that the proposals contained in the White Paper, Working for Patients, will diminish the effectiveness of family practitioner services and the future provision of community care; and calls for the necessary funding to be made available to allow the health and care services to expand and develop in a way which will contribute to freedom from ill-health and freedom to live life to its full potential through providing packages of care that recognise the needs of the client, the family and informal carers within the community.
Madam Deputy Speaker (Miss Betty Boothroyd): Mr. Speaker has selected the amendment standing in the name of the Prime Minister.
Mr. Fearn: For many years, we have heard a great deal of Government rhetoric about care in the community, but we have not seen any Government action to make that concept a reality. The Wagner report, the Firth report and the Griffiths report were all virtually ignored for no other reason but that their recommendations did not fit Government ideology. Another reason for delay is the realisation by Ministers that community care, which they adopted as a means of reducing hospital and community service costs, will not relieve pressure on the public purse.
Uncertainty about future organisation and finances means that planning for community care services has come to a standstill. It is now extremely urgent that decisions are taken. Confusion over areas of responsibility, accountability and funding, which has worked to the detriment of those in need, cannot be allowed to continue. The Government must respond.
I do not hold out much hope that the Cabinet working group chaired by the Prime Minister will come forth with proposals that will meet the requirements that the majority of those involved in community care believe are needed. A proper system of care in the community requires a commitment to provide adequate funding—a commitment of a kind for which the Prime Minister is not renowned. Also, the recently published abysmal results of a year's work by top officials conducting the National Health Service review do not inspire confidence in the Government's ability to produce workable and acceptable solutions.
How such a supposedly widespread review and reform of the Health Service can be completely void of any reference to community care, particularly when the proposed reforms would have a direct and disturbing effect on community services—as was pointed out in our recent booklet, "Dead On Arrival"—is beyond me. It transpires that "Working for Patients" has little to do with patients and more to do with costs. I hope that the members of the Cabinet working group on community care will not make the same mistake. When they consider the proposals, I hope that they will keep uppermost in their minds several basic concepts.
Among them is the necessity to put people first, recognising the rights of carers and their clients as individuals to exercise a degree of choice and control. Others are the right of the individual to live life to the full and the provision of support, including financial support,
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to carers and their clients so that those clients may live within the community as long as they wish, while recognising the rights and needs of their families and of other informal carers.
There must also be created a genuine partnership between clients, carers, the state, and the voluntary and private sectors. Finally, there must be provided a network of services giving carers and the individual client a pack age of support best suited to his or her needs.
Government inaction is not the only cause for concern, because continual pressures on and incentives to health authority managers to close down mental health facilities have had awful consequences. Thousands of mentally ill people are discharged from hospital without alternative care arrangements being made for them. The past 10 years have seen the loss of 40,000 beds. Some of those people have been made homeless and are wandering the streets, while others find themselves under the jurisdiction of the courts and prison services. Many others are in bed-and-breakfast accommodation without any support from the medical or social arms of the public services.
The neglect of the mentally ill is an appalling indictment for a country that claims to be civilised and increasingly prosperous. At what cost is our new-found affluence? Any community care legislation should embody Griffiths's statement:
"No person should be discharged without a clear package of care being devised and without being the responsibility of a named care worker."
Mr. Simon Hughes: Does my hon. Friend accept that in the inner cities—which are meant to be the focus of Government policy, investment and attention—there is increasing pressure on right hon. and hon. Members in all parts of the House because of the large number of patients discharged from long-stay mental hospitals into what is allegedly care in the community?
Mr. David Steel: It is not only in the inner cities that that happens.
Mr. Hughes: My right hon. Friend says that it happens not only in the inner cities, but in general that is where former long-stay mental patients are being discharged into the community in enormous numbers. It is a community in which no care is provided upon their arrival, and in which acute problems of mental illness and sickness afflict not only the patients themselves but their families and the immediate community, with no prospect of any help being provided.
Mr. Fearn: That occurs not only in the inner cities but in every town and city and in rural areas. The Schizophrenia Fellowship's drop-out centre in Southport is overflowing, and the staff have no idea where to send people who have nowhere to stay at night.
We must accept that individual clients and carers have some right to chose the care that suits them. It may be that short-term or long-term residential care is required. Therefore, it should always remain an option and should be available through private, voluntary and public provision.
Community care debates often place emphasis on the elderly. We are an aging nation. We are also a nation that is not coping with the present needs of elderly people. How can we expect to cope in future unless those in authority recognise the problems and plan for them? Today, single

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elderly people and couples who can no longer fend for themselves, and some who are incontinent, unable to feed themselves or in need of non-urgent medical attention, receive very little support in the community because the social services are short of staff and resources due to Government cuts.
Mr. Peter Thurnham: The hon. Gentleman mentioned Government cuts, and in his opening remarks he criticised the Government for failing to provide adequate resources. Will he cast his mind back to a document he wrote last July in which he called for annual increases of 2 per cent. in spending on the National Health Service and compare that with the Government's record of a 4·5 per cent. increase in real terms?
Mr. Fearn: I not only stand by my suggestion for a 2 per cent. increase in real terms, but stress that community care has received very little assistance. Health authorities are reluctant to take on elderly people in case they find themselves in a Catch-22 situation. Some hospitals will admit patients, but as soon as an assessment establishes that there is no medical need or that hospital treatment has been completed, the patient is discharged, regardless of the home situation and without continuity of care. The financial squeeze on health authorities has resulted in a reduction in the number of places in nursing homes they are willing to finance. The rigorous conditions of DSS regulations mean that one must impoverish oneself before any fees can be paid, and the recent ceiling on fees paid by the DSS, which makes no allowance for the wide variation in property prices, has made the availability of residential and nursing home care a matter of privilege, particularly in the south-east.
Mr. Matthew Taylor: I represent an area where there are many residential nursing homes. Only recently I have received letters from the proprietors of those homes desperate about the increase in fees, and letters from residents desperate about the lack of an increase in their allowances. Those homes are becoming unable to continue to retain DSS claimants and they are being forced to make a choice between breaking even and continuing to care for those patients.
Mr. Fearn: My hon. Friend is quite right. In his constituency of Truro and certainly in other areas, nursing home proprietors fear that sooner or later the crunch will come and they will have to decide whether to discharge the people in their care. I know from their organisation that that is not what they want and that they will resist it for as long as possible.
Mr. Michael Jack: If things are so bad, why do so many organisations wish to start nursing homes and rest homes?
Mr. Alex Carlile: It is the get-rich-quick syndrome.
Mr. Fearn: I do not believe that it is the get-rich-quick syndrome, as my hon. and learned Friend suggested, because I believe that there is a great deal of care in the nursing homes and associations. Such institutions require help. Voluntary organisations are also finding it extremely difficult to operate within the DSS ceilings, and in some cases that leads to desperate situations.
Mr. Carlile: Does my hon. Friend agree that, although there are some splendid private nursing homes, by and large the best quality nursing home care is provided by local authorities which can provide the most flexible nursing home services? Does he agree that the way in which private nursing homes are changing hands for massive sums of money suggests that an element of the get-rich-quick syndrome is at work?
Mr. Fearn: I certainly agree with my hon. and learned Friend's first point about local authority nursing homes. I have visited many homes throughout the country and they are run extremely well.
If we cannot look after our elderly people now, what of the future as the number of people over 75 and over 85 increases substantially, as does their rate of dependency? The Royal College of Nursing estimates that an extra 10,000 places in residential nursing homes would need to be created every year for the foreseeable future to cope with those demographic changes. That figure is calculated from an assumption that only 4 per cent. of the elderly population will require such care. That percentage is below that for other developed countries. Currently, between 21 and 22 per cent. of people over 75 suffer from various forms of dementia and require 24-hour nursing care. If that rate continues—there is no reason to suppose that it will not—there will be 80,000 to 100,000 more dependent people by the year 2000. Who will plan for their care?
In a society which is increasingly mobile and transient, in which moving to another part of the country to retire is becoming the norm, it should not be left to local government or health authorities. It is, and will be, a national problem. A Ministry for community care which has strong links with local bodies should be responsible for overall strategy planning and development of care for the elderly.
In the past few years there has been a programme of closures of hospitals for the mentally handicapped, and the resettlement of mentally handicapped persons into community-based services. The care of those people often requires high levels of staffing and specially trained staff. As those skills are not always readily available in the community, some transfers have been unsuccessful. There will always be a hard core of people in every category who require special, specific and highly skilled care. We must ensure that, whatever the arrangements for community care, they are flexible enough to maintain the quality of life of those people.
Much of the debate on community care is concerned with cost, but it is a sector that may never be truly costed simply because of its very nature and the different levels of care and support required and provided. It is also clear, as Griffiths states, that most people do not consider that an effective system of care in the community can be conducted on the cheap. Whichever way community services are organised, there is already an apparent need for more social service staff and an increase in training. If local government is to be the lead agency, which I very much doubt, given the Prime Minister's fear of allocating too much to local authorities, an intensive training and retraining programme may be necessary. If community care is to be truly effective, it must be given the resources to match its needs.
The availability and quality of care services should bear no relation to the individual's ability to pay. The proposals that I hope the Government will introduce very soon will

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be scrutinised very thoroughly to ensure that there is not a two-tier system of community care, as is the case in the NHS review.
It is evident that many people who are in need of care would not be receiving attention if it were not for the informal carers. The majority of carers are women. There are more married women staying at home in Britain today to look after elderly relatives than there are staying at home to look after children. Not all those in need of care are elderly and there are many informal carers looking after people who are mentally ill, mentally handicapped or disabled.
The stress of the continual dependence is often made more difficult by the added financial pressures. Many of the informal carers are elderly and some have already spent years bringing up a family. Thousands are now at breaking point. As a society we are in danger of creating more difficulties and increasing the number who may become dependent unless we begin to look after our carers.
The act of caring must be a positive choice, for that immediately relieves some of the tension and stress. In all areas we must provide more day centres, day and night sitting services, short and long-term respite care, transport and other support services. Above all, it is time we recognised the value to the community that is provided by informal carers. To relieve some of the burden and widen the area from which carers may be drawn, the Social and Liberal Democrats would like to see the Government introduce a carers benefit.
Community care is a complex issue and there are many subjects I have not covered, including the plight of the disabled. Some of their difficulties and some of the problems facing the elderly could be relieved by the full implementation of the Disabled Persons (Services, Consultation and Representation) Act 1986. I call upon the Government to implement that Act in full. Also, without further delay, they should bring their proposals for community care to the Floor of the House so that they can be debated and acted upon. A year ago Sir Roy Griffiths said:
"doing nothing is not an option."
Since then the problems have increased and the longer the Government delay, the more desolation, distress and degradation will be suffered by those in need of our services.
Primary care is not altogether a distinct and separate subject from community care. After all, the general practitioner is situated within the community and is responsible for the quality of health care available to the community. The proposals contained in the White Paper and associated documents will be damaging to the quality of primary care services. I am not talking about self-governing hospitals of general practice budgets. I believe that those are non-starters and that they will have little take-up. The damage will be done by the central plank of the proposals, which is the introduction of competition in the belief that it will lead to improvements overnight. To achieve competition, doctors' pay is to be increasingly linked to the number of patients on their list. To sustain income, doctors will compete with each other for patients with supposedly improved services and publicity. Yet it is strikingly obvious that an increase in the number of patients will result in less time being spent with the individual. Time is needed to discover the underlying cause of disease.
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The practice of preventive medicine and heath promotion at individual patient level requires time for consultation and discussion. There will be no time to visit schools, factories or other sectors of the community to spread the health promotion message. The increase in list size will make home visits increasingly scarce and, once again, those most in need, such as the elderly, will suffer most. Doctors in rural areas and in some inner cities will find it impossible to increase their list size. That will make practice work untenable or, at least, unattractive. Patients will face a reduction in services and in some areas the loss of any general practice medical service. That is a heavy price to pay merely to satisfy the Prime Minister and the supporters of the free market philosophy.
The Government have acknowledged the problem in Scotland and introduced separate proposals to safeguard rural practices. Perhaps the Minister will use this opportunity to explain to those who live in sparsely populated areas in England and Wales how their services will be protected. He does not seem to think that the problem ever warranted a mention in his recent letter to most hon. Members, which was dated 14 April and which I received today. Dr. Farrow, the chairman of the rural practices committee of the general medical services committee, has described the proposals as a "devious blow" which will
"probably result in the rape of the rural practice."
That quotation can be found in the British Medical Journal which quoted his speech at the British Medical Association council on 1 March.
The proposals contained in "Promoting Better Health" and "Working for Patients" are unacceptable and, in their present form, will diminish services rather than develop them. The future of rural communities and services is at risk. The Minister must address those concerns positively.
Our anxieties about the quality and range of services are further exacerbated by other Government proposals. The set requirement to spend 20 hours in the surgery at first seems innocuous. However, it will cut down the amount of time that some doctors can spend visiting their patients and in the community. In rural areas, the distance between split-site surgeries, the travelling time required to visit patients and patients' transport difficulties are real problems that the Government have failed to address.
Mr. Matthew Taylor: There is a particular concern about the hours requirement for doctors who also work in hospitals. The main district hospital in my area is located in the middle of my constituency and many of the doctors are involved in hospital work. They are faced with either withdrawing their services from the hospital or being penalised for not meeting the hours they are required to serve in the surgery. That is an immediate and real dilemma. Perhaps the Minister will be able to respond to it.
Mr. Fearn: That is a good point, and I hope that the Minister will respond.
Also unworkable and damaging are the terms that apply to the proposals on prevention and immunisation. Leaving aside the issue whether those should be the subject of incentive payments, the Government have set targets that are ideally correct but unrealistic in practice for many doctors. Parents are often unwilling to have their children immunised and, in inner-city areas where the population is

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transient, none of the screening or immunisation targets is ever likely to be met. Many doctors will stop providing the service altogether rather than experience the hassle.
Each practice has a very different mix of patients and problems and each health care provider should, working to certain standards, have the flexibility to provide the service best suited to the area. The rigid guidelines that the Government are attempting to impose will be harmful to the development of good practice.
Medical audit and peer group review is welcome in theory, but unless it is accompanied by the necessary level of funding and support it will be a non-starter. Unless doctors have the staff and computer back-up required, they will become medical bureaucrats and accountants, tied to their desks shuffling endless bits of paper while their waiting rooms overflow. Will the Minister tell us how the figure of £250,000 for medical audit announced in the White Paper was arrived at? Will it be reviewed in the light of representations that have been made about its inadequacy?
The Government's proposals take no account of the need to increase preventive medicine and ignore the costs of smoking, bad diet, alcohol abuse and poor housing. They do nothing for those most in need of help—those with disabilities or handicaps, the elderly, the frail, the deprived, the isolated and the homeless.
The Government's failure to respond to the Griffiths report and their proposals in "Promoting Better Health" and "Working for Patients" highlight Ministers' complete lack of understanding and ignorance about health, personal social services and the needs of the people who use, and want to continue to use, primary care and community care services.
The next decade will see greater demands placed on medical and community services from an increasingly elderly population and by diseases such as AIDS. This year could have been the year in which the Government met the challenge and laid out their plans for the future. Instead there is silence on community care and cuts in primary care.
While the Government play political games with our health care services, millions of people will remain trapped in their homes in poverty, deprivation, illness and hardship. The Government neither see them or care for them. It will be left to a future Government to release them, and I hope that that will be sooner rather than later.
7.40 pm
The Minister of State, Department of Health (Mr. David Mellor): I beg to move, to leave out from 'House' to the end of the Question and to add instead thereof:
'expresses full support for the Government's policy of community care and for the proposals set out in the White Paper, Working for Patients; commends the Government's record on the funding and development of primary health care and community care; and believes that the White Paper, together with the Government's earlier White Paper, Promoting Better Health, will help family doctors to develop the services which they provide for their patients, strengthen the provision of primary care in general and complement the development of policies for community care, improve the quality of care for all patients, and ensure that all those concerned with delivering health care make the best use of resources available to them.'.
The debate, which I was glad to see on the Order Paper, should have provided the hon. Member for Southport
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(Mr. Fearn), given his background in local government, with an opportunity to make a thoughtful speech about the problems of community care. I am sorry that he did not take the opportunity to do so, but instead resorted to a melange of lowest-common-denominator party politics. He seemed to be reading large chunks of a British Medical Association brief. I do not expect high standards from Opposition Members, but is a Social and Liberal Democratic party health policy to be written by the BMA and parroted by its spokesman in the House without recognition of the opinions of people who are concerned about a consumerist Health Service and want it to have consistency of standards? We did not have an especially distinguished performance from the Social Democratic party yesterday, but at least there was admission of concepts such as internal markets, which are necessary for a developing Health Service.
The hon. Member for Southport appeared to be nothing more than a mouthpiece for a trade union, which I always thought was the traditional role of the Labour party.
Mr. Robert Maclennan rose—
Mr. Mellor: I shall give way in a moment.
I can at least say that I listened to all the speech of the hon. Member for Southport, which is more than can be said for the leader of the SLD, the right hon. Member for Yeovil (Mr. Ashdown). The right hon. Gentleman disappeared about two thirds of the way through his hon. Friend's speech. I do not know whether that was caused by the quality of the hon. Gentleman's speech, but no doubt we shall be told.
Mr. Alex Carlile: Cheap.
Mr. Mellor: Hon. Members who say that they represent a different sort of politics shout and jeer as though the hon. Member for Bolsover (Mr. Skinner) has been giving them lessons. It is perfectly legitimate to inquire—it is much more edifying than the words that tripped from the lips of the hon. Member for Southport—why the leader of the SLD felt compelled to leave halfway through his hon. Friend's speech.
Mr. Carlile rose—
Mr. Mellor: I shall give way in a moment.
There were some interesting deficiencies in the remarks of the hon. Member for Southport on community care. He spoke of it as though it was exclusively the preserve of other people. It is interesting that, as we run up to county council elections, not a word or sentence was wasted on the community care policies of the various Liberal county councils. It may be that when it comes to putting these great ideas into practice there is not much about which those who have held office for the SLD can boast.
I shall enjoy showing how the hon. Member for Southport was wrong about cuts. It was interesting to hear his remarks about cuts in primary care, because expenditure on it has increased by 50 per cent. in real terms.
Mr. Carlile: Will the hon. and learned Gentleman give way?
Mr. Mellor: The hon. and learned Member for Montgomery (Mr. Carlile) knows that I am halfway

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through a point. If he contains himself a little longer I shall give way, but if he wants me to carry on and prevent other hon. Members speaking I shall happily do so because that is the only effect of sedentary observations. If he allows me to go on, I shall give way in my own good time and allow him to make a substantive speech.
If hon. Members want a sensible debate, they should start sensibly. I cannot allow talk of cuts in primary health care when expenditure on it has increased 50 per cent. in real terms over the past 10 years. The number of GPs has increased 20 per cent.; the number of dentists has increased by almost 20 per cent.; the number of GP support staff has increased by 50 per cent.; and the number of practice nurses has almost doubled.
Expenditure on community care has increased sharply in real terms. There is much room for sensible discussion on the issue, which fitfully appeared in the speech of the hon. Member for Southport. The Government are working hard to consider the implications of the Griffiths report. It is not a matter for sneering, second-rate, lowest-common-denominator politics. The quality of care that we should be offering an increasingly aging population and who is best placed to provide it are serious issues.
There were one or two refreshing aspects in the speech made by the hon. Member for Southport. He acknowledged that, in considering the proper provider market, we should not, as do the official Opposition, consider only local authorities. We must consider the role of health authorities and the private and voluntary sectors. Interestingly, in the Janus-faced way in which the SLD deal with these matters, the hon. Gentleman's remarks seemed to stimulate a lively debate among his right hon. and hon. Friends. The hon. and learned Member for Montgomery appeared unable to agree about the quality of private nursing homes. The crucial factual background that provides the basis for sensible debate was again lacking.
The hon. Member for Truro (Mr. Taylor) would have us believe that private nursing is all doom and gloom. When we took office in 1979, the amount of social security paid to elderly people in private residential nursing homes was £10 million. By one of those massive cuts inflicted on the nation by this Government, we expect the amount paid this year to be £1 billion. That not only shows the Government's contribution to the care of the elderly but raises some difficult questions about the proper gatekeeper role.
The hon. Member for Southport—I could not help feeling that a good speech was trying to get out—raised a matter about which we are all concerned: what we do in the community through integrated care services to prevent elderly people from going into long-term residential care. I do not often meet elderly people whose ambition is to go into long-term residential care; most of them wish to avoid it for as long as possible. It is sad that "it-says-here-BMA rhetoric", lowest-common-denominator politics and inaccurate party charges disfigured what could have been an interesting debate about an issue that will not go away and, sooner or later, will have to be considered in depth.
Mr. Matthew Taylor: The Minister has rather let his bile run away with him. He accused my hon. Friend the Member for Southport (Mr. Fearn) of parroting the views of the British Medical Association. Why has he felt reduced to writing to Conservative Back Benchers, asking
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them to ask members of the Conservative party throughout the country to write to their local media to parrot his views? Is it acceptable to parrot the views of the Minister, but not those of doctors who care for patients?
Mr. Mellor: I do not think that we should have a one-sided debate and I believe that there will come a time when people think about these matters a little more rationally. The cynical exploitation of patients by the BMA's tendentious leaflet will seem shocking to people other than the Government. Each of us must determine what role we play in these debates. It is sad and regrettable that hon. Gentlemen from the Social and Liberal Democratic party seem to think that their policy on primary health care can be devised for them by the BMA. I would have thought that they would want to stand up for the patients and not just articulate the opinions of doctors.
Mr. Tom Clarke rose—
Mr. Mellor: I shall not give way yet. Many of the doctors' opinions are based not on fact, but on tendentious assertions.
Mr. Clarke: May I gently remind the Minister that this debate is about community care? So that we are not unfair to him at a later stage, I ask him firmly to use this opportunity to give us the Government's views on the Griffiths report.
Mr. Mellor: I will not use this opportunity to give the Government's view on the Griffiths report. If the hon. Gentleman penetrates further into the motion, he will see that it deals with primary care as well as community care. The hon. Member for Southport said specifically that he was now turning to primary care, and I did him the service of turning to primary care a little earlier in my speech than he did in his.
I shall now turn to community care. The Griffiths report raises interesting issues. It raises the issue of how we deliver community care to an increasingly significant number of people requiring it. It requires difficult decisions to be made about the manner in which the provision is delivered, by whom it is delivered and whether distinctions are made between those who provide the services and those who provide the resources, as well as the framework in which the service is resourced and the quality tests that are put in place. To those of us who have to consider such matters seriously for implementation, they are difficult matters. For those outside, it can become merely a party game. Until the Government announce their decision, people ask where the decision is and jibe about why it has not come forward. The moment the decision comes forward, people shout the odds about what a terrible decision it is and ask why such a rushed hotch-potch has been inflicted on the public.
Mr. Maclennan rose—
Mr. Mellor: I shall give way in a minute. I am giving way too often and I do not want to be long.
We intend to bring forward our response to the Griffiths report as soon as the various Ministers have considered it. The hon. Member for Southport was at least accurate in saying that a committee was considering the response. We want to bring forward our response to the report as soon as our deliberations are complete.
I find it disappointing that the hon. Member for Southport, who was an experienced local councillor, could

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fall so readily for the idea that everything is suffering some sort of blight while awaiting the Griffiths report. Local authorities do not generally wait for the Government to make the decision. They generally—and rightly—assert that they have the powers to carry on doing the job. As we make clear, there is plenty of scope for the further development of community care. The more some local authorities project good community care, the more they can make us forget some of the glaring examples of the inner-London boroughs, which bring the idea of local authority social service departments into disrepute.
The hon. Member for Southport said that there were no resources. He could not be wider of the mark. Between the financial year 1980–81 and the financial year 1988–89, expenditure on personal social services increased by 25 per cent. in real terms. Local authorities propose to spend £3·3 billion in 1988–89 on personal social services. We hear some feeble excuses for inaction, but £3·3 billion is a formidable sum if properly deployed.
It is interesting that, although the hon. Member for Southport spoke for almost half an hour, there was not a word of commendation for any step in community care taken by councils controlled by the Liberals, SLD or whatever we are meant to call them. That silence speaks volumes for the record of achievement that the voters will have the opportunity to consider. I give way to the hon. and learned Gentleman.
Mr. Alex Carlile: I am grateful to the Minister. Will the hon. and learned Gentleman tell the House what specific criticisms he is implying against Liberal-controlled or Liberal-led councils?
Mr. Mellor: I was simply pointing out that if it was as easy to transform the situation as is suggested—[Interruption.] The hon. and learned Gentleman should not bandy charges around without carefully considering the opening speech. I can respond only to the debate to which I have been invited to reply. I would sooner have replied to a more substantial debate than the one on which we seem to have embarked.
Mr. Maclennan: The Minister is trying to treat the points made by my hon. Friends as peculiar party points, yet in the space of 15 minutes, he has not given us any idea of the Government's policy in this area. If we draw attention to the vacuity of the Government's case after 10 years of office and the formidable criticisms made of it by the doctors, we are not alone. The Minister should, at least in this debate, answer the trenchant criticisms of the Financial Times which, last week, devoted its second leader to drawing attention to the fact that the Government had nothing to say on community care.
Mr. Mellor: I am glad that the hon. Gentleman has recovered his vigour after his difficult period of leadership. I have already made it clear that in relation to community care, which is primarily a local authority responsibility, the increase in resourcing has been formidable. From the centre, a host of initiatives have been taken by the Government to improve quality and training. We have now embarked on a thorough look at the manner in which community care is delivered, which the Griffiths report stimulated and on which the Government will give their opinion in due course. It is a sign of the significance of this
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issue that the Government are taking time for consideration. The Opposition are trying to have it both ways. They criticise the fact that no decision has been reached, just as they will criticise the decision, whatever it is, when it is reached.
I shall now deal with the area in which we have direct responsibility for primary care through the National Health Service. These have been years of conspicuous achievement, and I gave the hon. Member for Southport the figures. Never has there been greater expansion in primary care than under this Government. Never has more been achieved in broadening the base of the NHS and extending out into a range of necessary preventive services than in the 1980s. That was impossible in the years in which the hon. Member for Caithness and Sutherland (Mr. Maclennan) held ministerial office because of the slashing cuts that were made then in NHS provision, as is well known.
When we look at community care, we see a great increase in services throughout, which has been made possible by the increased economic strength of this country. Expenditure on health services for elderly people rose between 1980 and 1987 by 29 per cent., although the growth in the elderly population over that period was only 6.7 per cent. The number of elderly people treated by district nurses increased by 14 per cent., the number of meals on wheels by 11 per cent., the number of day centre places by 16 per cent. and the number of home helps by 28 per cent. This has been a time of growth. We now need to consider the manner in which those services are delivered, their efficiency and quality. I do not resent listening to the contributions of others on this important topic. We shall be glad if, having got rid of all the necessary party politics, we can settle down to have a debate that assists with the difficult issues of coming to terms with the Griffiths future.
It is clear that those who have been innovative in community care, as have several local authorities, can continue with that. We believe that the future of community care lies with the creation of, in effect, a level playing field which would allow all the various agencies to play their part and which would allow the voluntary and private sectors to play an increasing role.
All those decisions will soon be heard by the House when the Government announce their response to the Griffiths report—
Mr. Thurnham: My hon. and learned Friend has mentioned increased provision in the public sector. Does he agree that one difference between the Conservative and Labour parties is the much greater value that we place on the contribution made by voluntary groups? Is he aware of the excellent work done by the Crossroads care attendance scheme in over 130 areas? Will he provide Crossroads with support in other areas, including Bolton?
Mr. Mellor: What my hon. Friend has said about the voluntary sector is entirely right. As he well knows, we have made considerable use of our ability to grant-aid voluntary organisations, both larger ones with a traditional role such as the Red Cross, and smaller ones, such as Crossroads, that have recently come on the scene. It is clear that we now have a much more comprehensive approach to community care than was possible before. We can look forward to shaping with some confidence the framework within which that can be set in the future.

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I trust that the House will have no difficulty in rejecting the motion and I urge it, in due course, to vote for the Government amendment.
8 pm
Mr. Tom Clarke: I congratulate the hon. Member for Southport (Mr. Fearn) and his colleagues on choosing the vital subject of community care for this debate. I also congratulate the hon. Gentleman on his comprehensive and informed speech, which clearly was not matched by the Minister's response.
If the Minister's comments are the extent of the Government's thinking on the Griffiths report and on community care, the rumours that we have been hearing about a statement being made fairly soon do not appear to be well based. The Minister gave the impression that he had hardly read the Griffiths report. He certainly gave the impression that he does not understand the immense problems of community care.
When the Minister says that the Opposition criticise the Government for not responding to Griffiths, he is right; and when he says again that we may criticise the Government for their response when it comes, he is right again, because we have that right. What we cannot accept is that the Government will do nothing, if only because Sir Roy Griffiths himself said that to do nothing is simply not an option. Indeed, why should we do nothing?
The Government appear to take the view that when, after his intensive examination of the problems, Sir Roy suggested that there was a lead role for local government, he was inviting the Government to produce their prejudices because they do not accept that local government should have a major role. The Government ignore the problems that have been identified and which invite an immediate response.
We are led to believe that in this area, as in others, we should depend on market forces. Indeed, the Minister used the phrase, "the internal market". However, if market forces had been so productive and so appealing, there would not be 30,000 former psychiatric patients on the streets of New York, which has exactly that system, with all their problems unresolved.
The Minister and some of his hon. Friends who intervened referred to resources. I stress that we are entitled to complain bitterly about the unplanned growth in private residential homes, which has been unrelated to any real assessment. It is not as though we said, as a society, on the basis of consultation, that that was the best thing to do. It is not as though Lady Wagner, whose report has also been ignored, suggested that that was the best thing to do; we have drifted towards it. No responsible Government can invest that amount of resources in private accommodation unchecked—the accommodation is not in any sense adequately inspected—and nobody should pretend that that this is the way towards making a major contribution to community care in the 1980s, and as we approach the 1990s.
Strangely, the Minister devoted most of his speech almost exclusively to the subject of primary care. I say "strangely" because all the evidence suggests that the Government's proposals for the National Health Service in their review will add to the problems rather than taking away from them. I am sorry that the Scottish Office is not represented on the Government Front Bench, but I make the point that our experience of the response of general
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practitioners to the review is typical of the United Kingdom as a whole. My hon. Friend the Member for Kilmarnock and Loudoun (Mr. McKelvey) is hoping to catch your eye, Madam Deputy Speaker, to raise this point.
Although the Minister was switched from the Foreign and Commonwealth Office to his present role because some people perceived that he had an ability to communicate, he might have to do his job a little better when he has examined a letter that was sent to the Secretary of State for Scotland by the Ayrshire and Arran local medical committee, which states:
"The general practitioners of Ayrshire and Arran held a meeting last night, Monday 17 April 1989.
115 doctors attended and 115 voted against the new contract which was circulated last week."
That letter can hardly be taken as a sign that we should have any confidence in the Government's proposals for the Health Service, especially when we consider their bankrupt approach to community care.
The hon. Member for Southport was generous enough to refer to the Disabled Persons (Services, Consultation and Representation) Act 1986. That Act gained its Royal Assent in July 1986 and has been mentioned in almost all of our debates on this subject. We always plead for its implementation, as do the voluntary and professional bodies that have briefed hon. Members in preparation for the debate. Indeed, they are entitled to do so, because many people recognise that section 7, which, as yet, has not been implemented, contains many of the concepts of Sir Roy Griffiths's approach to the dreadful problem of people being discharged from hospital into community care that does not exist. We want to see the Act implemented.
We find it incredible that the Government's circular, issued in February this year, entitled "Discharge of Patients from Hospital"—the Department of Health has also published a document entitled "Discharge of Patients from Hospital"—states:
"Social Services Departments will expect Health Authorities to liaise with them about the wide range of duties, including those under … the Disabled Persons (Services, Consultation and Representation) Act 1986, which fall to social services and to follow the arrangements which apply locally for carrying them out."
Given that the Government are already advertising that Act, as MENCAP has pointed out, it is not unreasonable that we should ask them to provide the resources to implement it and to produce a plain person's guide for individuals and for organisations such as the Schizophrenia Fellowship which, like the rest of us, wants to see a strategy for hospital discharge and assessment of long-stay patients before they leave hospital and enter the community so that their needs will be met.
I am sure, too, that the Scottish Society for the Mentally Handicapped would urge on the Government the need, in Scotland, for the kind of joint planning arrangements that have existed for many years in England and Wales, and which we persuaded a reluctant Government to include in the National Health Service (Amendment) Act 1986, shortly after the Disabled Persons (Services, Consultation and Representation) Act was passed.
All this represents cost-effectiveness in terms of crisis avoidance. The Minister did not address himself to that, though it is a worry for hundreds of thousands of patients and their families, carers and communities. The revolving

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door syndrome, to which organisations such as MIND have constantly referred, is, of course, unacceptable. We hear, too, that the Salvation Army estimates that up to three quarters of its hostels' male inmates may be suffering from mental illnesses. We know also that many mentally handicapped and mentally ill persons find themselves in prison simply because the courts have nowhere else to send them.
Last Thursday I raised the question with the Home Secretary, and, in reply, he said that he was consulting the Secretary of State for Health. I had expected, and it would have been reasonable for the hon. Member for Southport to expect, the Government to tell us precisely what they are doing to reduce this scandal. What we are seeing, in the name of so-called community care, is a hospital rundown and a pace of community care provision that simply do not match. Closing hospitals or hospital wards, and throwing people into the community—in many cases, on to the streets—into hostels, and so on, is not community care in any meaningful sense. We know that for every psychiatric nurse working in the community there are about 25 working in hospitals. So there is a curious emphasis on the reverse. There is a need to recognise the problems where they exist within the community, not necessarily within hospitals exclusively.
The Minister failed to mention—although, in fairness, I have to say that the hon. Member for Southport did mention—the very vexed problem of the immense weight upon carers in this community—people who are saving the Treasury millions of pounds every year. In fairness, I must also point out that, curiously, these people are omitted from Sir Roy Griffiths' report. In terms of these problems, we as a House must recognise the tremendous worth of carers in every part of the United Kingdom. In many cases those people are doing a supportive job that ought to be seen as the role of Parliament itself.
My right hon. Friend the Member for Stoke-on-Trent, South (Mr. Ashley), who would have very much liked to be here for the debate, is very keen that we should urge on the Minister the need for a coherent approach to benefits for disabled people. We are told that the Government are considering these matters, and we are entitled to ask when we can expect a response. Our concern is about poverty, homelessness and neglect. The Spastics Society issued a document—to most hon. Members, I think—in preparation for this debate. It introduced us to very interesting case studies.
A document that is to be published soon refers, for example, to the case of June Morris. I know that we shall never forget that our debates and discussions about these matters are about people, about individuals, about the need for a collective response from society. The document says:
"June Morris is 34 and has lived in a local authority-owned bungalow for three and a half years, having moved there from her parents' home.
She has to wait for a home help to come each week, who stays for an hour. She's waiting to hear whether a laundry service could be made available. Having asked for an emergency phone she's awaiting the outcome. The combination of cerebral palsy and arthritis now warrants the use of a wheelchair. However, the kitchen and bathroom are not suitably adapted. The kitchen was looked at in January and again in August, but still nothing has been done …
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June doesn't believe community care exists—`There isn't any. It should mean that there is someone to turn to when you need help. I had no social worker for a year.'"
There is not one hon. Member who could not relate similar cases, similar circumstances, all of them unacceptable in this society.
Of course we want to see more respite care; of course we want to see more assessments; of course we want to see more crisis avoidance in the carers' situation. But we cannot have these things unless there is proper resourcing, as well as proper recognition of services that have to be provided. The Association of Directors of Social Services has complained—rightly, I think—about the problems of training. It has reminded us of the vacancies in social work in London boroughs—15 per cent., with a turnover of 28 per cent. Happily, the situation is improving, but we have to do far more to recognise that these problems exist and to make sure that there is proper provision.
The Government are particularly mean-minded—especially in view of the dreadful problems of child abuse and the information that is now available to us—about the recommendation of the Central Council for Education and Training in Social Work on the need for an extra year's training. I hope that, on reflection, the Government will give serious thought to that recommendation, which, in the meantime, has been set aside.
Consumers ought to have a say in these matters. I believe that, were they to give us their views—for example, on housing investment—they would demonstrate that they consider our present commitment to be inadequate. Indeed, as consumers they would, in many cases, relate homelessness to drug or alcohol abuse or related problems. I believe, too, that they would join the Opposition in regretting bitterly the inadequacy of arranging for older children leaving care to go into the community. The Government's social security changes help these matters not one whit. If the Minister of State speaks for the Government when the Children Bill comes before the House, he will have an opportunity to correct what amounts to a scandal, and I hope that he will take that opportunity.
The community charge—the poll tax—is, of course, a perverse incentive in terms of our objectives. Even if they qualify for a rebate, many people in my constituency have to find £60 to £80 annually out of their very meagre pocket money. I do not regard that as being helpful to our objectives.
I want to ask the Minister to consider the many representations that have been made to the Government about land sales. Is money going back to the mental health services? There is very little evidence that it is. Some of the conditions that have been identified are absolutely unacceptable. The recent health advisory service reports on our psychiatric hospitals refer to gross overcrowding and to dirty, shabby, badly repaired, unsuitable, drab, depressing hospitals smelling of urine. The list continues. In many cases the hospitals are dilapidated, and institutional life means that there is no opportunity for people to live in dignity.
Despite the Minister's somewhat weak defence, the Audit Commission, even prior to Griffiths—and Griffiths accepted its view—described community care as being "in disarray". That is entirely unacceptable, but how could it be otherwise when, we are told, the Department of Health is responsible for promoting care in the community, the

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Department of the Environment rate-caps local authorities that increase their expenditure on community care, and the Department of Social Security guides people towards a form of semi-institutional care in residential homes and, at the same time, administers the new Social Security Act, which has resulted in substantial loss of benefit for many former patients?
These matters are tremendously important, and there is a growing public awareness of them. The evidence suggests that most community care is provided by a member of a family, a whole family, or close friends. Community care should not be considered a marginal policy to be dismissed as being for a marginal group. It should involve mutuality—the responsibility of people to each other, which creates the fabric of a society of which it is worth being part. Whatever other disagreements we may have with Sir Roy Griffiths—there are many—he was right to say that the status quo is simply not an option.
8.20 pm
Mr. Timothy Raison: I agree with the hon. Member for Monklands, West (Mr. Clarke) that this is an important subject. I was glad when, at the end of his speech, he talked about the responsibility of all of us for each other. I did not agree with his remark to the effect that carers were doing Parliament's job. It is a great error to examine such matters in terms of statutory provision. It is Parliament's job to pass statutes. However, the hon. Gentleman redeemed himself in his closing remarks. It is important to remember that the statutory services and voluntary services should never take more than part of the responsibility. The major part must still lie with all of us—ordinary people—to care for our own families, relatives and friends.
The Government's amendment asks hon. Members to express full support for the Government's policy on community care. I have in mind an amendment to the amendment. I will vote for the Government to express full support for their record, which is quite good, as my hon. and learned Friend the Minister demonstrated. I cannot say that I fully support the Government's policy, because I do not know what it is. It is in a state of limbo. The reason for the debate is that hon. Members are anxiously awaiting the Government's policy. It will be even easier to support it when we know what it is.
It is understandable that the Government have had to take some time over the matter. It is obviously complicated. At the same time, we cannot deny or duck the fact that we face serious problems arising from delay. I beg my hon. and learned Friend to end the delay as rapidly as possible. Delay is affecting morale and recruitment.
My county of Buckinghamshire has a good record in the way in which it is trying to tackle community care. It has been keen to progress and it has been doing some good work. I have seen good local authority/county council provision of residential homes of one sort or another for people who come out of long-stay hospitals. A few days ago, I saw an excellent provision which had been set up by the health authority, working in conjunction with the Shaftesbury Society, providing a mixture of residential care and day care for the handicapped. We are doing good things in our county.
However, there is a blockage at present. That has quite a bit to do with difficulties in spending the necessary capital if the crucial transfer of individuals from long-term
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hospitals to other forms of residential care is effectively to take place. We must have decisions. About 95 people in a hospital for the mentally handicapped in my constituency have been identified as suitable for moving out of the hospital into some other form of care. At the moment, nothing can be done because the resources are not available; they must be unlocked. It was put to me that we need some kind of bridging loan to enable the transfer from the hospital institutional care to the appropriate alternative form of residential care. I hope that the Government will rapidly face that issue.
I am not sure whether we have corrected the anomalies that have existed because of the different sources of funding. I understand why we have had such sources—income support, Health Service funding, and so on. The Government have recently been trying to produce a more rational and coherent pattern, but it is important to make sure that we have a better system for dovetailing different sources of funding. I can only repeat a point which was made earlier: areas such as mine with high housing costs have particular difficulties in the provision of residential care when the scales are set on a national basis.
To be honest, my hon. and learned Friend's speech lacked an assessment of the present situation. We all accept the principle of moving people out of big mental hospitals when appropriate. We know that the Government have been genuinely trying to back that policy. However, we need to know what is happening. How many people have come out of such hospitals? How much additional care is being provided for those who still need residential care? The matter is complicated. We arc not arguing that everbody should go from a hospital into another form of residential care, but some people need to do so. Happily, others can go back to their own homes, and that is the ideal solution. The public are entitled to more information.
It is equally important not to be dogmatic. In its good report, the Audit Commission said that community care is
"not about imposing a community solution as the only option, in the way that institutional care has been the only option for many people in the past."
We still need some long-stay hospital provisions. We certainly need a good deal of residential provision. We also need the truest form of community care—more support for people who are able to live at home. The crucial point—hon. Members have been a little chary of facing up to it —is the problem of where we should allocate responsiblity for seeing that things actually happen. The Government are finding that point difficult to resolve. There are good arguments for the different points of view. Griffiths was justified to refer to
"a feeling that community care is a poor relation; everybody's distant relative but nobody's baby."
The job is to assign the baby.
We must accept that co-operation, good will, and even adequate resources are not enough. They are all necessary, but we must define who is responsible for looking after the people about whom we are talking. Whatever scheme we adopt must bring together or allow to operate effectively the medical, personal and social services side and the cash or social security side. That is a truism. Griffiths was right to state that the crucial need was to pick out one point of reference to make sure that each individual has what he or she needs. That means at the ground floor level—at the level of the community carer, the care manager, or

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whatever we like to call him or her. That is necessary. There must be a responsible organisation to whom that carer may report and for whom he or she would work.
Griffiths was right to say that local authority personal social services departments are best equipped to do the job. Of course the health aspect is important. Nobody—certainly not Griffiths—says that there is not an important health job. Nobody is saying that the social services can do the whole health job. They cannot. Clearly, GPs and community nurses will still be important in future for discovering needs. Social services departments are best placed to do the all-round job of finding out and then making sure that needs are dealt with by a suitable body.
I should have thought that that is in line with the enabling role which the Government nowadays regard as appropriate to local government. My right hon. Friend the Secretary of State for the Environment wrote a pamphlet about that enabling role. Even if there are doubts about piling more and more on to local authorities, it is appropriate that local government should have a co-ordinating role or the job of allocating accountability.
The Royal College of Nursing has argued that we should have a newly designed service, brought about by merging district health authorities, family practitioner committees and the personal social services, all of which, in the view of the college, should be funded by the health side. That is worth considering. No doubt the Government have done so, but I am a little chary of setting up a big new organisation of that kind.
The same doubt would apply to the proposals put forward by the Association of Directors of Social Services, which wants a national community care development agency. If we want to get on with the job, rather than devising grandiose mechanisms, it would be better to keep the social services departments that are in being. They might need more backing and resources to carry out the role, but I would prefer that instinctively to a new mechanism.
Griffiths also talked about the need for a Minister of State with responsibility for community care. One has to recognise that under our constitution Ministers of State cannot have ultimate responsibility; that has to lie with the Secretary of State. However, there is a great deal to be said for a Minister of State working under the Secretary of State to provide a focus. If I may draw an analogy from my experience, I was Minister for Overseas Development; I was not Minister of Overseas Development. I think that few people recognise the distinction. The Foreign Secretary is by statute Minister of Overseas Development. I was Minister for Overseas Development under him and I had to get on with the job. That parallel is perhaps reasonable, although the ultimate responsibility has to lie with the Secretary of State, who is the crucial person when it comes to the scramble for funds in the public expenditure round.
We have had to wait too long. It is urgent to have a decision. I know that the Government are thinking hard about the matter and I understand their difficulties. Unless there are compelling reasons, Griffiths provides the best formula. I look forward to hearing soon from the Front Bench what the Government propose.
8.31 pm
Mr. William McKelvey: I add my congratulations to the hon. Member for Southport (Mr. Fearn) who has given us the opportunity to debate what many people regard as an important issue. I was disappointed at the lacklustre and somewhat arrogant approach of the Minister.
I support strongly the comments of the right hon. Member for Aylesbury (Mr. Raison). If it were up to me, which of course it is not, he would be moved to the Front Bench and I would dispatch the present incumbent back to the Foreign Office where he was doing an excellent job. His attitude towards the Palestinians was much more understandable and correct.
It is not a mistake that the White Paper, which is euphemistically called "Working for Patients", omits any reference to community care and care for the elderly. That does not mean that the Government are not aware of the inadequacies and the disorganisation of community care. I think that they are fully aware of the position. That is why the then Secretary of State for Health, who is now Secretary of State for Employment, appointed Sir Roy Griffiths to make recommendations on care in the community. Most people would agree that the impetus for the report was not concern for the elderly but, rather, concern about money.
There were serious criticisms of the Government's community care policy by the Audit Commission, which was alarmed that much of the £6 billion spent annually on the mentally handicapped was being wasted and was not being spent properly. Sir Roy Griffiths was not appointed to create a model for adequate community care with no cost spared; indeed, quite the reverse was the case. His remit was
"To improve the use of funds as a contribution to more effective community care."
Hon. Members should note that no further resources were brought into the equation. We should underline that.
The Griffiths report was published in the spring of 1988, yet still there is no response to its recommendations other than the answer that we get on every occasion when we raise the question—that the Government are looking at the matter. We have had nothing apart from vague representations from the Minister that something is likely to happen in the near future. That is all we have been told.
Why have the Government remained silent for so long on a report which was excellently prepared, although there is much in it with which I disagree? The suggestions in the report worry the Government. The right hon. Member for Aylesbury outlined some of them. The hardest nut to crack and the worst thing for the Government to swallow is the suggestion by Sir Roy Griffiths and his team that they should give local authorities a leading role as providers of care, assessors and co-ordinators. The Minister indicated clearly that he has no faith in any local authority carrying out those duties.
There has been reference in the debate to the suggestion in the report for a Minister of State for community care, with appropriate departmental support. That proposal is not popular with the Government. If such a post were established, people who are hungry for the financial aid needed to carry out their programmes would have someone to target for funds, and the Government would be seen as attempting to put all those pleas to one side. It is not surprising that the Government are not enamoured

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of the report. That is supposition on my part, because to date they have not said whether they are enamoured or otherwise. While they are considering the report, hundreds of thousands of people in a very distressed state, out on the streets and elsewhere, need the care that we want to see established.
I disagree fundamentally with some of the Griffiths recommendations. For instance, young unemployed people should not be press-ganged through the youth training scheme or any other scheme into home-help-type jobs, as suggested by Griffiths, simply as a means of getting community care on the cheap. That is not the way that we should go about it.
Neither do I wish to see a two-tier system for the elderly, with tax incentives to encourage private health care, as suggested in the report. My party and the people whom I represent do not think that residential care should be means-tested. We do not want to return to a system with deserving and non-deserving poor. All the people should he treated equally and their needs should be met. There should be greater choice and greater independence for all who require care in the community. That can happen only if the right amount of cash is injected and if it is directed at the right targets. The aim of moving more care into the community and away from residential institutions is laudable, but only where real support and care are available. An aim set for Sir Roy was to reverse the financial incentives operating in favour of residential care.
Residential care is the biggest growth industry in Ayrshire, where there are nearly 10 times as many homes as there were four years ago. There has been an incredible increase in the number of homes. I have visited many of them, and have talked to the people who manage them. The vast majority are run very well. I have no objections to the way in which they are run. The people who live in them are happy, but many of them would be happier if they had been allowed to remain in their own homes, which they cannot do.
The Government must recognise that there must be proper finance available for looking after elderly relatives at home. The carer's benefit should be paid for looking after that person and should not be included as income when establishing a person's level of income support. After all, when one considers how small that benefit is, when compared with the cost of keeping a person in a residential home, there is no reason why the Government should not make that a benefit which is unrelated to income.
The Griffiths report may not be completely to everyone's liking, but it is important because it provides a basis for developing the policies for care in the community which are long overdue. They should have been in place before we witnessed the large-scale closures of hospitals and large-scale openings of residential and nursing homes. We are trying to close the door after the horse has bolted.
I urge the Government to make their responses to the Griffiths report known as quickly as possible, or at least to initiate a whole day's debate on community care for the elderly, the mentally handicapped and all those whom we genuinely wish to assist. I shall cite one case that will clarify my misgivings about the Government's intentions for community care and, for instance, the community care grant.
Yesterday it was reported that more than 40 per cent. of the money made available for community care grants in the Scottish districts is being returned because the money
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has not been taken up. That is not because people are not trying to get the money, but because the guidelines are so tightly defined—there is no discretion at local level—and the money has not been properly used.
My hon. Friend the Member for Dundee, East (Mr. McAllion), raised with the Minister the case of his constituent who was in a mental hospital for 10 years and was being released into the community. The district council gave the woman a house and an application was made for a community grant of £500 to assist. She was refused that grant because her income was 4p over income support due to her invalidity benefit. That woman really could have benefited from being allowed to live in the community and having a proper start in a new life. However, because of the barriers presented by that extra 4p, she was refused a grant. She may end up back in hospital because she will be unable to cope. There should not be such a rigid attitude towards people who are trying desperately to come back into the community. We should not have such tight legislation which stops a person taking his or her rightful place in the community and being given back much of the dignity that he or she has lost.
8.42 pm
Mrs. Gillian Shephard: I am pleased to contribute to the debate. While the NHS review and the new GPs' contract may have been the focus of much professional attention during the last couple of months, a more consistent interest has been expressed over a number of years about the current and future structure of care in the community.
That interest is entirely predictable, given, first, the demographic changes at each end of the spectrum, which eventually will mean that there are fewer people to look after more people; secondly, rising public expectation; and, thirdly, changing family patterns, with implications for carers and the public services. I mean by that the breakdown of marriages. While it might be fairly expected by many that they would look after one mother-in-law, looking after two or three, if they enter into a second or third marriage, might be stretching it a bit. That is a flippant way of saying that obvious lines of responsibility within changing family patterns may be weakened. I believe that we must consider that.
We must also accept that there is a growing involvement of the private and voluntary sector. It has already been said that expenditure in the private and voluntary sector is now approaching £1 billion, which is a considerable sum. It was most unfortunate that the Opposition made a quite unwarranted slur on the motives of people who run the private and residential homes, which I believe will not go unnoticed by them.
The Audit Commission argued that community care is about
"changing the balance of services and finding the most suitable placement for people from a wide variety of options. It is not about imposing a community solution as the only option in the way that institutional care has been the only option for many people in the past."
It is important to stress that definition of community care, which makes it an option within a spectrum. While Governments may always have regarded it as such, until the last two or three years it has been regarded in health and social services circles as a policy leading inexorably away from institutional care of any kind.

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Clearly, community care should provide a range of care services through which people may move, both in and out, and including as one of its parts in-patient care, whether short-term, respite or crisis care.
As services are at present organised, community care requires very close and effective co-operation between a number of agencies—health authorities, local authorities, housing agencies, social services, social security, the voluntary and private sectors and, of course, relatives and carers. To quote the Audit Commission again, it must
"cover prevention, treatment, rehabilitation, health maintenance and social supportive networks."
The necessary co-operation between a range of agencies with different power bases, and such a complex range of care to provide, sets a task whose complexity is awesome, although, of course, many achieve it. Indeed, if Governments had set about making community care provision as difficult, as time-wasting, as bureaucratic and as committee-bound as they could, they could hardly have done worse than the present system against which providers have to battle. Especially with reference to joint financing, I was most interested to note the simple pride with which the right hon. Member for Plymouth, Devonport (Dr. Owen) announced yesterday that he had devised the system.
Within that complicated structure, the Government's achievements have been good. For example, the need for mentally handicapped children to live in long-stay hospitals has been virtually eliminated. The adult hospital resident population of mentally handicapped people has been reduced by more than one third. It is difficult to assess the Government's record by public spending measures, precisely because the responsibility for funding is spread between a number of agencies. However, I believe that we can all accept the evidence of the National Audit Office, which found a significant increase in spending on the elderly, the mentally ill and the mentally handicapped between 1977 and 1985. None of us should forget that the debate is taking place within the context of a record spending on the National Health Service of £26 billion and a social services budget of £3·3 billion. We are not talking about a service which is being starved of funds.
Since 1979, much more money has been put into joint finance. That has increased by about 60 per cent. and, more significantly, its take-up has increased from 52 per cent. to nearly 99 per cent. That has been encouraged by interesting new conditions, such as the dowry system, which unblocked Health Service funds for use in the community by the simple expedient of transferring the funds with the patient into the community.
There are some excellent examples of good and innovative work, which demonstrate that quite highly dependent people can be cared for in the community. That is the message emerging from 28 pilot schemes set up by the Department of Health and Social Security in 1983, which were funded by an additional joint funding budget. I mention in particular the Kent community care scheme for frail elderly people, which links devolved budgetary management with the design of individual care packages. In my county, which is Conservative-controlled, we have excellent schemes. For instance, the Lawns in Great Yarmouth, which was formerly a residential home for the elderly run by social services, now provides an interesting, acceptable and popular range of care and help for elderly
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people. In the Norwich health district we have community care groups with proper appraisal, and West Norfolk and Wisbech health authorities have well-developed day care and drop-in centres linked to private residential care.
The picture of the last 10 years of community care under the Government shows steady progress, although it has been a little unevenly distributed. We have seen increased spending and some solid evaluation of what does and does not work. That is important. The Government face a daunting task in framing their response to Griffiths. Whatever structure is devised, the problems that I have mentioned will remain. There is the complexity of the mechanisms which involve many agencies and at least three Departments of State. There has been steadily increasing expenditure on the private and residential sectors, mainly for the elderly, which many of us welcome, and in which standards of care are monitored, thanks to the statutory agencies. However, it must be accepted that criteria for admission, and therefore for financial support, are not monitored. This is becoming a bottomless purse.
The Government also need to consider a number of models for the provision of community care. Some hon. Members have mentioned the local authority model. There are elements that can be commended to Ministers in the response to Griffiths by the Association of Directors of Social Services. The response mentions a mixed economy for care and service provision, a good national framework for regulation of monitoring, which everybody welcomes, and strengthened local accountability by care managers.
There is also the health authority model, in which existing community health services might be grouped together and subsume local authority services that are being nationally funded. There is the possible client group model, where we might transfer responsibility for the mentally handicapped to social services and responsibility for the mentally ill and some elderly people to the health authorities. Then, of course, there is the model of an entirely new agency which might plan and buy in care from local authorities, health authorities, voluntary organisations and the private sector.
In preparing their response to Griffiths the Government will want to consider the not inconsiderable amount of change planned for the National Health Service, especially in primary care. It might be difficult at present to give the National Health Service something else to worry about, although many of the worries expressed in yesterday's debate are entirely unfounded. I do not wish to see any more delay in the Government's response to the Griffiths report because some planning decisions are being held up pending that response. Given the complexity of the task and its importance to patients, which can only increase, I hope that the Government will take the time that they need to produce the right and most effective response, because I suspect that the ramifications will be with us long after the White Paper has been absorbed into professional practice.
8.52 pm
Mr. Alex Carlile: I propose to speak about general practitioner services, but before I turn to the merits of the case I should like to speak about the way in which the Minister of State, Department of Health approached the question of how general practitioner services should be run in future. I think he knows that I have a considerable regard for his political and forensic

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and especially his legislative abilities. However, in his approach to general practitioners he has given the impression of coating himself with testy arrogance as a biscuit with bitter chocolate. That has caused great offence, not only to general practitioners but also to members of the public interested in the National Health Service.
It seems that the Minister is not too keen on listening to reasonable argument in the debate, but I know that he is always prepared to listen to opera. I shall draw a brief operatic analogy. General practitioners look upon the Government's blandishments in relation to general medical services rather like Bluebeard's bride at the entrance to his castle. I do not allege that the Minister is Bluebeard——that is his right hon. and learned Friend the Secretary of State. The Minister is merely the doorkeeper. General practitioners believe—in my view, rightly—that every time they, like Bluebead's bride, pick up one of the gilded offerings inside the castle, they find beneath it the curse that the Government are bringing upon the National Health Service.
I remember the bad old days of general practice. I am the son of a general practitioner who practised in an industrial Lancashire town. He is retired now and is a very old gentleman, but he had experience in private medicine, albeit not in this country, experience in hospitals and many years' experience in general practice. At one time he, like many other GPs, was single-handedly stemming the tide rather like King Canute. All over the town where we lived one could see queues of sometimes 30 or 40 patients outside each poorly maintained surgery, especially on Monday mornings. My father was a single-handed practitioner and on his half day off we had to escape from the house in which he had his surgery. He had to arrange that half day with another doctor, and if we stayed at home he would have no rest. As a result of the pressure he faced, I was sent by him to a good school with a foundation that provided for the sons of dead general practitioners to be educated for nothing. Many people were educated by way of the medical foundation in Epsom college.
In the mid-1960s and early 1970s, times changed, very much for the better. Nowadays, in most if not all parts of this country, we have group practices with much better facilities and offering a good service to patients. That happened in my father's practice. Those group practices are also able to contribute to the community. For example, the Department of Social Security depends upon general practitioners for its medical boards. How many GPs will still be able to do that work after they are compelled to work 20 hours a week in their surgeries?
Since childhood, and especially since I became a Member of the House, I have had an opportunity to observe a rather different sort of general practice, the rural medical practice. In preparing the new GP contract and in planning whatever strategy they have for general medical services in England and Wales—interestingly, there is a difference in Scotland—the Government have chosen to ignore almost completely the special needs of rural areas and rural medical practice.
Rural practices in my constituency, in other parts of rural Wales and probably elsewhere in the United Kingdom are, on the whole, well organised and provide a high standard of service. If a patient has an accident in my constituency the chances are that he is 30 miles from the nearest major casualty hospital. He goes either to his GP
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or to one of the little local hospitals where the GP carries out the casualty work and performs small operations and stitches up people. If he lives in a rural area such as mine, the chances are that he will be able to go to a branch surgery not in a far distant town but in a nearby village. The chances are that when he telephones the doctor's surgery and asks for an appointment and outlines any difficulties in getting to the surgery the doctor, assessing the needs of the patient, will take the entirely reasonable decision that the patient should not come to the surgery but that the doctor should visit the patient.
That is the special nature of rural medical services as they have developed and, on the whole, they are good, very good. I pay tribute where it is due to the Government for allowing those services to develop in a way that is beneficial to the community. But I ask the Minister why the Government have now decided to pull the rug from under good rural practitioner services. I shall refer to some specific matters which are evidence that the Government want to do just that.
As a direct result of the changes proposed to the GP contract, there is absolutely no doubt that doctors will be unable to visit their patients as often as they have in the past. A very good general practitioner whom I know well told me recently—and this was confirmed by other doctors at the meeting—that sometimes in a morning he can visit only three or four patients because of the distances involved. My recollection of my childhood in a busy town is that my father used sometimes to visit six or seven patients in one street. It is quite different in rural areas. If rural doctors are forced to spend 20 hours in their surgeries, they will spend some of that time twiddling their thumbs, looking for something to do, when they could be out visiting their patients. That cannot be in the public interest.
What is more, our community hospitals in places such as Welshpool, Llanidloes, Machynlleth and Newtown depend upon the GPs not sitting in their surgeries but going to the hospital to carry out the hospital services. This they will be unable to do if they are forced to sit in their surgeries for as long as 20 hours a week.
The Government have set targets for vaccination and cervical smear rates. In order even to maintain their income—the doctors in Montgomeryshire are not suggesting that their incomes are too low and should be substantially increased—doctors are to meet certain targets if the new contract comes into being. But these targets are wholly unrealistic in rural areas. The 90 per cent. vaccination target is impossible to achieve. Whooping cough vaccination, included as it is in the compulsory criteria for payments, will set ethical dilemmas which will affect all doctors, for not all are as convinced as perhaps the Minister is about the value of that vaccination.
One of my local practices campaigned especially hard on the need for cervical smears by writing and speaking to patients when they come into the surgery; but it still fell short of the target of 80 per cent. which the Government seek to set for cervical smears. Because it is unrealistic to try to reach those targets in rural areas, some doctors will decide that the targets will never be achieved, that as a result they will not be paid for the work they do and that they may just as well withdraw the service and leave it to somebody else to provide cervical cytology. That cannot be in the interests of women in rural areas.

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I urge the Minister, who I know is listening to these points, to consider them seriously, for they are all real problems put to me by real doctors.
Another problem relates to minor surgical operations. In Scotland the principle has been recognised that in rural areas, provided the doctor does five procedures in a month, he will be paid for those procedures. But under the contract which is sought to be imposed in England and Wales, on rural as well as on urban doctors—and it is only the rural doctors who can do large-ish numbers pro rata of surgical procedures—they are told that they will be paid for minor surgical procedures only if they do five in a session.
I can tell the Minister what will happen. A patient will go to see Dr. Jones. Dr. Jones will explain that he would like to do his surgical procedure but will be paid for it only if he does five in a session. He tells the patient that he will collect five and then the patient can come back and have his surgical procedure carried out. So Mr. Evans visiting Dr. Jones may have to wait a month before his surgical procedure is done.
What happens now is that Mr. Evans, a patient who may live 15 miles from his doctor's surgery, will go to the surgery and will have the minor procedure done on a one-off basis by appointment. That is serving the consumer. That is fulfilling the aspiration that the Government rightly have for the medical profession.
Mr. Richard Livsey: The 20-hour rule for GPs will prevent doctors in rural practice from carrying out the procedures that my hon. and learned Friend the Member for Montgomery (Mr. Carlile) has mentioned. This will restrict their opportunity to carry out minor surgical procedures. I am sure that my hon. and learned Friend will agree.
Mr Carlile: Yes, I agree with that. It reinforces the point that I was making.
I wrote to the Secretary of State in detail on 30 March setting out my misgivings about the GP contract for rural services, and I await his reply to those specific questions with great interest. I will mention two now. The Government's proposals mean that there will be far fewer part-time general practitioners. This is very much against the interests of women, in particular, for there are many women doctors who are perforce rather than by choice part-time practitioners. Some live in my constituency. The payment arrangements—effectively, the removal of the basic practice allowance—mean that practices will be disinclined to employ women part-timers in the future. As it is, it is very difficult in some areas for women to find a woman practitioner to go to—and many wish to, for very good reasons.
I ask the Minister to consider this and to try to ensure that the part-timer, particularly the woman doctor, providing excellent service can continue working in general practice.
The last point I wish to draw to the Minister's attention is that of reimbursement to GPs for ancillary staff and for premises. One of the great developments that I saw as I grew up in a doctor's household was the improved ancillary facilities provided by successive Governments and the chance given by those Governments to doctors to have better surgeries. It happened in our family practice
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and in many others that I know well. This sort of provision gave a great impetus to good-quality general practitioner services.
The new arrangements suggest, however, that those reimbursements to GPs for ancillary staff and for rents are liable to be cost-limited and reduced. As a result, general practitioners will seriously reconsider any increase in their staff numbers. Some of my local GPs now employ practice nurses who can provide in some cases a rather more intimate service in minor matters than can the busy GP in his surgery. Practice nurses are a very important part of medical practice in rural areas. But doctors will have to reconsider employing them.
In addition, I am aware of at least one £500,000 surgery rebuilding scheme—not in my constituency but in that of my hon. Friend the Member for Brecon and Radnor (Mr. Livsey)—that the practice is now considering abandoning as it cannot rely on the reimbursement initially promised to service its great undertaking. The practice consists of doctors who are, in mid-Wales terms, in a medium-sized town. If they do not develop their new medical centre, because of changes in the contract and in the arrangements for payment for GPs, it could be another 20 years before the town's services are improved. That would be a matter for regret.
I ask the Minister, therefore, to go back to his Department and have another look at rural GP services. In particular, we should bear in mind the fact that there is no logical case for saying there should be one thing for rural services in Scotland and something quite different for Wales and rural England. As the proposed contract stands, those rural services will suffer and, I am afraid, it will be the Minister and his right hon. Friend the Secretary of State who will be blamed.
9.9 pm
Sir Geoffrey Pattie: There was discussion earlier in the debate about the Griffiths report, about which I shall make some brief remarks. Sir Roy Griffiths, as the Prime Minister's health care adviser, has impeccable credentials. The problem has been that he has not come up with a convenient set of recommendations. It appears that the Government have taken longer to prepare their response than the Committee took to prepare the report in the first place.
Chapter 7 of the Griffiths report, paragraph 5, states:
"There is a need for central government to make an early clear statement of the objectives and values underlining its community care policies, clarifying its view of the role of the public sector."
The delay in responding to the report is profoundly unsatisfactory.
We could ask, "Does a delay matter?" It would not matter if there were no problem. We might then ask, "Is there a problem?" Everyone is agreed that certain aspects of the community care policy command widespread support, particularly the concept that health care can best be provided within the community—especially if that means that we can get away from the use of large mental hospitals which, all too often, are a legacy of the last century. It has always been recognised that a problem would arise if a mismatch occurred between the closure of mental hospitals and failure to provide adequate care for patients in the community. Unless community care is adequately in place before patients leave mental hospitals, adequate bridging finance must be made available. My

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right hon. Friend the Member for Aylesbury (Mr. Raison), who made an excellent and cogent speech, used the term "bridging finance", which is the key to the current problem.
It is obvious from the evidence before our eyes that such a mismatch has occurred. Many people have been decanted out of mental hospitals and are now part of the so-called cardboard cities, which are an affront to any society that claims to be civilised. Market research on this need not he involved. Within a few hundred yards' walking distance—never mind driving distance—of the Palace of Westminster, one is likely to encounter such people. I am not suggesting that all those one encounters on these walks are former mental patients, but it is estimated that half of them are.
Some people like the life on the road; others have run away from home to try to find fame and fortune. However, if the usual estimate of 8,000 or 9,000 are sleeping rough in London tonight, about half that figure will be former mental patients. Therefore, a large number of people are clearly incapable of sustaining themselves in society without adequate support.
It is clear that voluntary groups are incapable of filling the gap. They carry out admirable work but cannot be expected to shoulder the entire load. Obviously, the Minister will hardly reveal the Government's response to the Griffiths report today, but it would be nice if he gave some sign of when that might come—other than the usual "soon"—or "in the spring". Sir Roy Griffiths reported on 12 February 1988, which was a long time ago. It would be constructive, and certainly helpful to me, if the Minister were prepared to recognise that the problem exists, and that people are living in such conditions, who are on the streets due to the inadequacy of the present system.
I imagine that, privately, the Minister must be unhappy about this aspect of what is otherwise an impressive health care system. Many of my hon. Friends have made reference in the debate to the large sums of extra money and additional facilities that have been provided. That is satisfactory and I support it. However, in this one matter, the evidence is there to be seen by all of us who are prepared, as it were, not to drive past on the other side. It shows that many of our fellow citizens face extreme difficulties tonight because the present policy is not working. What will the Government do about that?
9.17 pm
Mr. David Hinchliffe: I hold no particular brief for the hon. Member for Stockport (Mr. Fearn) but, having listened to his opening speech, I feel that he deserved a more comprehensive response than he received from the Minister. Frankly, the Minister's response consisted of a series of insults and cheap jibes. Several Conservative Members have made serious points in the debate. I am sorry to have to make these remarks when the Minister has left the Chamber, but I was disappointed that he was not prepared to address the issues which have been raised by hon. Members from both sides of the Chamber.
The Minister's response to the opening speech made it clear that the Government do not have a policy on community care. In the brief time that I have tonight, I shall address myself to some of the implications of the Government's non-policy on this serious and worrying subject. If anyone needs convincing of the fact that the
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Government's ideological blinkers have so often overridden any element of human concern, they need only look at community care. By allowing the policy on community care to be determined by the free movement of market forces, they have set back proper community care by decades.
It is important to consider in detail the consequences of a market-based policy of community care, because, if the Government have a community care policy, it is based on the movement of market forces. I shall pinpoint one or two matters relating to the private sector care of the elderly which worry my constituents, many hon. Members and me.
I listened to the observations of Conservative Members talking about the amount of money which has been put into community care by the Government. Huge amounts of public money are being mis-spent in the name of community care. There are people in institutions on income support who do not need to be there and would be far better cared for outside them, in their own communities, with proper community care.
The Minister mentioned the figure of £1 billion being spent on income support in the current financial year. That is the figure that was given by the Association of Directors of Social Services for the previous financial year. I suspect that it is a conservative estimate and that, if one attempted to find out what the figures were at local level, one would find that the DSS does not keep records of the amount of money paid in income support to private residential care. Therefore, we are talking about a guesstimate.
A year ago the Public Accounts Committee said that up to a quarter of income support claimants in residential care could have remained in their own homes if they had the proper community services and support. At least £250 million per annum is being spent on residential, institutional care for people who do not need it. That is the result of a free market policy in community care.
There is also a huge hidden cost to the public purse at local authority level. Problems arise time and again in local authorities' policing of private residential homes. The hidden cost is in the homes that have to be closed and the court cases which, according to the social work press, are happening virtually every week. There are disputes over deregistration and qualifications and conditions on registration. All that is costing public money.
In allowing such a free market policy to rule community care, the Government have developed enormous regional differences in the investment of public money. David Lane, the director of social services in my local authority, Wakefield, compared the amounts paid out in the south coast belt—Devon, Dorset, Hampshire and east and west Sussex—where the population is around 4·5 million and there are 26,000 beds in the private sector, with west and south Yorkshire, where the population is 3·25 million and there are fewer than 4,000 beds. Assuming that 50 per cent. of private beds are paid for through income support—a reasonable assumption—at an average cost of about £8,000 per annum, he calculated that the average authority in the south coast belt would have an annual income of £11·5 million per annum, while in west and south Yorkshire the amount would be £2·2 million. That is an enormous redistribution of public funding from the poorer areas to those with substantial resources.
We have also seen a huge distortion in the type of support services available to the elderly. It saddens me to say this. I entered social work, working with the elderly,

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back in 1968, at a time when we were proud to boast that we were reducing institutional care and building small homes rather than huge, isolated institutions. Now we see the resurrection of care in such large institutions as society's central response to the needs of the dependent elderly.
I disagree profoundly with that policy. It is not in the interests of elderly people. The only people to gain from it have been the estate agents. It has given new life to rundown Victorian mansions, dilapidated country houses and struggling seaside bed-and-breakfast boarding houses and hotels, which are being used to care for people who, in many cases, have been shunted miles away from where they come from.
The larger the institution, moreover, the bigger the profits. I have asked parliamentary questions about the numbers of beds in such institutions, but I have not received answers because the figures are not kept. I can see with my own eyes, however, that large institutions are being used increasingly for the care of the elderly. They are once more being used as they were in the 1940s and 1950s and at the time of the Poor Laws.
Care Weekly, a social work journal which I read every week, reported on 7 April that Lodge Care plc, one of the increasing number of private companies involved in residential care, was selling off 12 of its 25 homes. The managing director, Graham Elliott, said that
"it was the smaller homes which were least profitable and had to be disposed of".
I concede that there are some good, small private homes offering homely care: I have visited them. But those are the homes that are being disposed of, on the basis that they are the least profitable.
There is, as yet, no profit to be made from preventive services. The profit-making sector—the market—has therefore moved into institutional care rather than preventing people from entering institutions. Strategies for care, having been left to the market by the Government, are now being determined by large business interests rather than by the needs of the elderly. Ladbrokes, for example, now owns about 1,000 residential and nursing care beds. Boddingtons brewery and the Vaux brewery group are also involved.
Does anyone honestly believe that those organisations are motivated by concern for what is in the best interests of dependent elderly people? Are they involved merely in acts of charity? Of course they are not. We all know that their involvement is based on hard-headed business decisions and profit motivation. They are diversifying into areas where they know that a quick killing can be made. Dependent elderly residents who have no one to stand up and vouch for them are the pawns in this increasingly big-business game.
The Government know that their community care policies are a shambles. That is why the Minister made no defence of them in response to the hon. Member for Southport. He did not even refer to issues raised by hon. Members on both sides of the House. My hon. Friend the Member for Monklands, West (Mr. Clarke) mentioned that the Audit Commission had said that community care was in disarray and that the Government were getting poor value for money, which I think is an understatement. The Government have been sitting on the Griffiths report for over a year. The report, in my view, is full of holes: its
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vision of community care is very narrow, as my hon. Friend has made clear in a document produced by the Labour party. There have been many criticisms of it, but the important point is that it provides a basis for thought and debate on a matter that desperately needs both.
Urgent action is needed, rather than the complacency demonstrated by the Minister tonight. If I had more time, as I hope that I shall when we debate the Griffiths report, I should spell out what I think should be done. For the moment, however, let me make three brief points.
First, we need to reverse the present trend back to care in isolated institutions. Choice of care is a myth and a nonsense: the Minister conceded that. Of all the elderly people whom I have admitted to residential care in my time in social work, I cannot think of one who wanted to go into an institution. Sadly, however, the way in which the Government have allowed their policies to develop has resulted in that often being the only option. They have shunted investment into institutional care rather than into preventive community care.
In our debate before Christmas, the Minister virtually conceded his concern about the fact that any woman over 60 or man over 65 could obtain income support, fit as a fiddle, and then go into residential care. The system is nonsense. We must stop this open-ended income support for private care, and redirect public funding towards preventing institutionalisation rather than actively encouraging it.
What could have been achieved in funding proper community care if the Government were not ideologically committed to the role of the free market? What could have been achieved with the amount of money that has been thrown into the explosion of private residential care? What could have been done with all that wasted money? The Public Accounts Committee suggests that £250 million is the sum spent on sending people to institutions who do not need to be there.
What could have been done every year with that kind of money in providing proper community care, home helps, meals on wheels, support units, befriending services, day care, social clubs, community nursing, social support, sheltered housing, and numerous other elements of community care—all of which avoid the need for people to enter institutions and allow them to remain living in dignity in their own communities, surrounded by the people with whom they have lived all their lives?
Imagine what could have been done with that amount of money, had the Government not been tied to the vision of the free market and to the blind dogma that they apply to every area of their policy. To leave the care of vast numbers of the most vulnerable people in our society to the whims of the market, as the Government have done, is scandalous.
9.29 pm
Mr. Michael Jack: I enjoyed the speech of the hon. Member for Wakefield (Mr. Hinchliffe) because it reminded me that we have something in common—we were both brought up in Yorkshire.
The hon. Gentleman referred to the fact that there is a predisposition for elderly people to move to the south coast or to my own constituency of Fylde on the west coast of England. When I was selected to contest a seat in Lancashire, I apologised for the fact that I came from over the Pennines. However, one day I was told by one of my

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supporters, "Don't worry that you come from Yorkshire. Half of Yorkshire is here already." Many people move to different parts of the country because that is where they want to retire and where they wish to be cared for.
The hon. Gentleman's narrow view of the source of care in the community must be criticised, because many of the people who have moved to the west coast of England are impressed by the diversity of care in the community, in both the public and the private sector, that is found there. The hon. Gentleman does not realise that a vast spectrum of resources is available to individuals. It ranges from income support, which the hon. Gentleman also criticised, to the provision of services to people who have adequate assets of their own—perhaps from the sale of their houses—and who currently benefit from the development of sheltered accommodation by the private sector and from the growing development of continuing care that is also to be found in the private sector. However, even those people, as they grow older, may require more institutionalised forms of community care.
The hon. Member for Wakefield criticised the Government's response to the Griffiths report. We would all like to see an early response, but it was not the act of a reluctant Government to ask Sir Roy Griffiths to concern himself with community care. His report opens with the statement:
"Mr. Norman Fowler asked me to take an overview of community care policy."
The Government asked for that to be done and, in the nicest sense, they knew what they were letting themselves in for—a report from somebody who would seek an answer, and an answer of accountability. The Government were aware of the contribution that Sir Roy had made to earlier reforms of the Health Service when they sought the application of his intellect to the problem of community care and his ideas.
Sir Roy produced a brief but enormously thought-provoking response that sought to answer the questions, as my hon. Friend the Member for Norfolk, South-West (Mrs. Shephard) pointed out, of bringing together the enormous diversity of community care. I suggest that rather than calling it community care, we should talk about the development of a community of carers. By that I mean the bringing together of all agencies—private and public, voluntary and individual—that make up the concept of community care.
Our country's capacity to care is enormous, and the good will felt towards the elderly is considerable. However, some education remains to be provided in terms of attitudes towards those who are mentally ill, mentally handicapped, or both. If they are to be properly received in their communities as they arrive there from long-stay institutions, we must educate ourselves on the need to receive them positively into our number and to provide them with the necessary care.
When considering recommendations such as those in the Griffiths report, we must decide whether we are looking for a top-down solution or a bottom-up solution. A top-down solution involves the kind of national institution that we would perhaps want to monitor. My hon. Friend the Member for Norfolk, South-West spoke in great detail about the various models that could be used. I am interested in a solution that grows from within the community. My hon. Friend identified the multiplicity of sources of community care. The essence of community care is the flexible response to the needs of the community.
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In my constituency there is one of the finest community hospitals. It is so good that I was recently asked, "Mr. Jack, why is this new hospital opening in your constituency? Is it not a private hospital?" I had to say that it was not. It is a new community hospital opened under the auspices of the National Heath Service. It provides day care facilities, and a broad range of other services for the elderly, including physiotherapy and special wards dedicated to the rehabilitation and training of elderly people to help them re-enter the community.
I visit that hospital regularly for personal reasons, as my mother is there, recovering, we hope, from a stroke. I look around the hospital and I see the quality of the care that is available. It occurred to me that it is an ideal centre to base community care and to set up a buying and enabling agency to cater for the needs of the community as identified by the social services, general practioners and the private sector in rest homes or nursing homes. A buying or enabling agency centred in that hospital could draw resources from the community to provide care for elderly people. It could be broadened to serve the interests of mentally ill and physically handicapped people to provide a broadly based community service.
How do we adapt that on a national level? I am attracted by the suggestion in the White Paper for hospital trusts. By definition, trusts seem to encompass all those who care about a particular matter. We have identified a broad range of sources for community care, so let us imagine a national care trust in which the interests of the Government, the social services and the private sector could be represented and where funds for the various budget heads catering for the needs of the community and the care of the elderly and the mentally ill could be accumulated and redistributed according to need to different parts of the United Kingdom. It is for the communities to ascertain their present needs and try to identify their resource needs to continue and develop existing services.
Community care has been prevented from working, in the way referred to by all hon. Members who have spoken, by the friction between health authority services and the social services. There have been differences of opinion. I used to hear them when I sat on the Mersey regional health authority, where we found it difficult to overcome the frustration at the lack of progress towards the right provision.
The Griffiths report give us the opportunity to seek a solution in which the wheels of the relationship between the different agencies can mesh and run more smoothly. The smoothness with which care in the community can be delivered will mean a great deal. I applaud the comments made abut the need to allow elderly people to stay in their own homes. I pay tribute to my constituent, Mr. Stephen Hay, who runs a private rest home and has developed a private care in the community programme. His wife, who is a trained SRN makes domiciliary visits and supplies a broad range of services to elderly people in their own homes. His service is already over-subscribed, but how much better and how much more caring a service could be supplied if my hon. and learned Friend the Minister of State would appeal to his ministerial colleagues in the Department of Social Security to free the shackles on income support and use that money more creatively. Such creativity would allow communities to respond to the many and diverse needs of the elderly and mentally ill patients.

425
There is much work to be done, but we have sufficient resources. My hon. and learned Friend referred to the money available through income support. Perhaps he did not have time to mention the £1 billion in attendance allowance. Such expenditure is not a sign that the Government do not care or are being mean with resources. It is a sign that the Government recognise the demographic issues and are trying to respond to them while creating a flexible response that will bring together the best of the private sector and the best of the public sector to provide care in the community.
Sad to say, the problems of the mentally ill have not been referred to in the debate. I say sincerely to my hon. and learned Friend the Minister that the most difficult case with which I have had to deal since coming to the House involved the mother of a schizophrenic boy. She writes to me asking who will look after him when she dies. I have been to the district health authority, the regional health authority and even to my hon. and learned Friend's Department but all they say is, "tomorrow". That lady's tomorrow may come but she looks to me to provide an answer within the community for the problems of her son, Dennis. That is the challenge of mental illness and I feel certain that my hon. and learned Friend will respond to it.
9.40 pm
Mr. Archy Kirkwood: I have listened with interest to the discussion and I commend my hon. Friend the Member for Southport (Mr. Fearn) on the way in which he opened the debate. It is an important subject and that has been reflected in the speeches.
I listened with particular interest, as I always do, to the speech of the hon. Member for Monklands, West (Mr. Clarke). Interesting contributions were made by the right hon. Members for Aylesbury (Mr. Raison) and for Chertsey and Walton (Sir. G. Pattie). I should like to draw a line under the ministerial intervention in reply to my hon. Friend's opening speech by saying that we should leave past records behind us in the time remaining in the debate and look to the future. I recognise that a subject such as the provision of community care is difficult for the Government because it cuts across Government Departments. Also, I am not daft and I recognise that there are substantial funding implications if we are to get right the future provision of community care.
Having said that, and falling over backwards to be as amenable to the Government as I can, I must say that there is a blockage in the system. It is not right for the Minister to say that it does not matter if time passes while we get the provision right. It is wrong that two and a half years have passed since Sir Roy Griffiths was given his commission. It is a year since he produced his report, and people are suffering as a result of the delay. The lack of planning and the hiatus that has been created by the Government's unconscionable delay is not good enough. It is an indictment, and the speeches made by hon. Members, including Conservative Members, have shown that it is unacceptable.
The difficulties were well rehearsed two or three years ago, before Sir Roy Griffiths was given his commission, by the Select Committee on Social Services and by the Audit Commission. Hon. Members have referred to the points
426
made by those two bodies. I shall point out one or two of the important points that remain with us. The problem confronting the House is that community care is delivered by a vast array of organisations with different structures and different funding mechanisms. No one has overall responsibility for co-ordination. I had hoped that the debate would produce an indication of how the Government will resolve that confusion or, indeed, whether they intend to do so. That is the key question which has suffused all the arguments that have been deployed.
The funding mechanisms that the Government have been using—as I have said, there is a difficulty with different Departments being involved—have sent conflicting signals to the people responsible for the discharge and provision of the services. Health authorities have been cash limited, local authorities have been rate-capped and the DSS, particularly in relation to residential and nursing home provision, was demand-led and the provisions have been produced on a demand-led basis. The Minister is beating his chest and saying that the Government have increased expenditure from £10 million to £1 billion in that sector, but that was not planned. The Minister is making a virtue of something that took him and the Department by surprise. The Government must resolve the different funding mechanisms. That may be difficult, but they must grasp the nettle.
Sir Roy Griffiths was asked to consider the geographical discrepancies between local authority and health board areas. It is extremely difficult to achieve coherent delivery of community care. The two-and-a-half-year delay has been quite unreasonable.
Community care will inevitably become more important, given the increase in the number of elderly people and the demographic changes that will occur between now and the year 2000. The Government are also considering the OPCS report on disability, and I pay tribute to the work done by the hon. Member for Monklands, West on that. District health authorities have been closing hospitals and local authorities have been finding it increasingly difficult to train and obtain funds for social work departments.
Three clear messages came from the Griffiths report. First, Griffiths gave local authorities a clear vote of confidence on the way in which they currently discharge their duties and the way in which they will do so in the future. That may cause the Prime Minister and the Cabinet some ideological difficulties, but only a planning role would be involved. Griffiths was suggesting an essential co-ordinating role, so Conservative Members should not put about scare stories of local authorities being given tremendous extra powers, which the Government do not want. Griffiths's recommendation was broadly right, and if local authorities are not involved in co-ordination, another agency should be.
Secondly, the funding recommendation is fundamental. The idea of a community care grant paid for from a local authority's agreed overall plan is extremely attractive. A Minister for community care, whoever he or she may be, would have some input into agreeing such overall plans, so, again, the Government need not divest themselves of control of these important funding systems.
Thirdly, the delivery of tailored services to meet individual client needs is an important improvement that which the Government should embrace.

427
There are only three, or perhaps four, options open to the Government. They could fully implement the Griffiths report, but people would accept phasing if the Government made it clear that they accepted the broad tenet and thrust of the recommendations. Alternatively, they could opt for limited acceptance of the report and engage in consultation on the need for joint planning, setting up community care managers and funding for training and pump priming. We believe that that would be a second-best alternative which would result in a lack of overall planning and co-ordination, which, more than anything else, is needed.
I should be worried if the Government placed responsibility for community care with another body jointly funded by health authorities and local authorities. Perhaps more worrying are scare stories that the Government may be considering entirely privatising community care and handing it over lock, stock and barrel to the private sector.
Mr. Mellor indicated dissent.
Mr. Kirkwood: I see the Minister shake his head. He seems to be ruling that out of court. If he is prepared to say that in his response to the debate, he would allay some of the fears that have been expressed to me recently.
The Minister must accept that there is overwhelming support for the Griffiths solution. If the Government set their face against the report, they will do so at their peril. They must bear in mind important issues such as the fact that there is no correct way of providing care in the community. It is right that there should be plurality of provision, diversity and local initiatives. The Griffiths report made a virtue of that and drew it to the fore of the argument when it said:
"The aim must be to provide structure and resources to support the initiatives … the innovation and the commitment at local level and to allow them to flourish; to encourage the success stories in one area to become the commonplace of achievement everywhere else. To prescribe from the centre will be to shrivel the varied pattern of local activity."
That is the essence of the Griffiths report.
I implore the Minister to give us some idea when we shall receive a statement about what is happening in the Cabinet committee carrying out the review. Is it going over all the ground again? Is it commissioning its own evidence? Will that evidence be published? There are a host of questions. This debate was designed to elicit the answers from the Government. I implore the Minister to use the short time available to him to try to open the doors of Whitehall on this important subject and to tell us what is going on.
9.51 pm
Mr. Mellor: I spent last evening discussing the vexed question of AIDS with a group which included the hon. Member for Roxburgh and Berwickshire (Mr. Kirkwood), and he knows how much I agree with his insights on that matter. It is a pleasure to follow him in this debate. I am sorry that I cannot satisfy his curiosity on all his points, although I found his speech interesting and valuable. As the debate has progressed, it has proved possible for hon. Members of all parties to come to grips with the complexity of the issue.
I assure the hon. Gentleman that there is no question of privatising community care, but the clear analysis given in the Griffiths report needs to be tested against certain other
428
competing possibilities. That is done purely in the context of provision within the public sector, while allowing proper access to provision made by the voluntary services and by private providers, which the hon. Member for Southport (Mr. Fearn), as he made clear in his opening speech, saw as a part of his party's policy.
I can assure the House that we do not want to take a moment longer than necessary in considering the report, and I hope that it will not be long before a full statement can be made. During the debate, there was no shortage of points on which we could all agree.
I am sorry that I missed the first half of the speech by the hon. Member for Wakefield (Mr. Hinchliffe). He was right to remind me of the debate we had before Christmas, when we shared some of the insights he mentioned. He mentioned factors that are very much at the heart of our consideration of the Griffiths report. But I am sorry that he felt compelled to say that we have no community care policy. We have a community care policy that meets the points that he emphasised; hence the care we are taking in analysing the Griffiths report.
It is the key to our policy that people should he able to live their own lives for as long as possible and that we should respect people's independence, and work to protect it. It is our policy to ensure that it is only in the final analysis, when other community-based options are no longer viable, that people move into long-term residential care. That is why I am dissatisfied with the absence of a gatekeeper role. As those are our baste beliefs, there has to be a range of community services, from domestic assistance to home helps and nursing care, going on to residential care. We want to ensure that those services can be provided by a range of different providers but although, as my hon. Friend the Member for Norfolk, South-West (Mrs. Shephard) made clear, that is not an easy thing to achieve, we must achieve it and it is a priority for us to do so.
The hon. and learned Member for Montgomery (Mr. Carlile) made his points with his customary vigour and clarity. I well understand why he and some other hon. Members representing rural areas are concerned about the contract and that nothing should be done to damage the expansion of rural practices, to which, as the hon. and learned Gentleman acknowledged, we have committed so many resources. Indeed, we have played a full part in revolutionising today's primary care, when compared with what it was when the hon. and learned Gentleman first became conscious of it. Rural doctors have nothing to fear from the changes that we propose. The various arrangements for the contract will make it easier, not more difficult, to take on practice nurses. Those are matters of hard practicality, not of principle and certainly not of dogma.
We are concerned to try to ensure that we achieve greater consistency in primary care not only by putting within the contract a basis for rewarding general practitioners for the efforts that they have made, but by creating incentives for them to do more. That is a practical business. I assure the hon. and learned Member for Montgomery that we are looking at the various points that have been raised, not only by Members of Parliament following the extensive discussions that we know are taking place with doctors, but also from our own discussions. I have been having at least one meeting and often two meetings with GPs every day for the past

429
fortnight, and I shall have another large one in the west country tomorrow. That is not being done as a public relations exercise. We are listening, and we are taking note.
The draft contract that my right hon. Friend the Secretary of State has submitted is not necessarily the last word. Attention has been drawn to the Scottish contract, which was issued following discussions here in England. We shall not hesitate to make changes to the contract if we are persuaded that the present arrangements do not achieve what we have set out to achieve. I hope that the hon. and learned Gentleman finds that helpful. I shall certainly take careful note of what he has said.
Mr. right hon. Friends the Members for Aylesbury (Mr. Raison) and for Chertsey and Walton (Sir G. Pattie) raised a question with which I chose not to deal in my opening speech in this short debate because, although ministerial contributions could expand endlessly, I wanted the opportunity to hear the anxieties of the House. I left out the important points about mental handicap. I accept that it is essential for us to justify not only the necessary policy of closing the large Victorian institutions for which nobody would want to make a strong case, but to emphasise that we have managed to build up in the community facilities which mean that people are not left to wander abroad, but have facilities in the community that enable them to lead, we hope, an altogether more satisfactory life.
It is worth noting that between 1976 and 1986—we must remember that there has been continuity of policy on this subject—the hospital population of people suffering from mental handicap fell by about 15,000 places while the number of day care and residential places in the community rose by 50 per cent. over and above that to a total of 26,000. Expenditure on services for mentally handicapped people increased by 62 per cent. over the period 1978–79 to 1986–87.
We aim to ensure that no institution is closed if there is not the proper provision in the community to ensure that continuity of care is provided. I am well aware that hon. Members of all parties have expressed concern about whether that has been achieved in every instance. Indeed, we have under active consideration the question whether there needs to be some fine tuning of our policy in this respect. That matter is being considered, as well as the proposals of Griffiths, and I hope that we shall be able to announce our conclusions shortly.
Another question that I did not have time to deal with is that of carers. Of course, through the invalid care allowance, through our £10 million policy of innovation throughout the country, under the "Helping the Community to Care" banner, we are committed to assisting carers. These are all revolving policies, which I look forward to having future opportunities to debate in the House.
Question put, That the original words stand part of the Question:—
The House divided: Ayes 41, Noes 159.

Division No. 167]

[10 pm

AYES

Alton, David

Beith, A. J.

Ashdown, Rt Hon Paddy

Bruce, Malcolm (Gordon)

Barnes, Harry (Derbyshire NE)

Buckley, George J.

Barnes, Mrs Rosie (Greenwich)

Callaghan, Jim

430

Carlile, Alex (Mont'g)

Maclennan, Robert

Clarke, Tom (Monklands W)

Mahon, Mrs Alice

Oixon, Don

Meale, Alan

Dunnachie, Jimmy

Michie, Mrs Ray (Arg'l & Bute)

Eastham, Ken

Patchett, Terry

Ewing, Mrs Margaret (Moray)

Pike, Peter L.

Fatchett, Derek

Powell, Ray (Ogmore)

Fearn, Ronald

Ruddock, Joan

Forsythe, Clifford (Antrim S)

Skinner, Dennis

Golding, Mrs Llin

Steel, Rt Hon David

Haynes, Frank

Taylor, Matthew (Truro)

Hinchliffe, David'

Wareing, Robert N.

Howells, Geraint

Wigley, Dafydd

Hughes, Simon (Southwark)

Wilson, Brian

Johnston, Sir Russell

Kilfedder, James

Tellers for the Ayes:

Livsey, Richard

Mr. James Wallace and

McKay, Allen (Barnsley West)

Mr. Archy Kirkwood.

McKelvey, William

NOES

Alexander, Richard

Greenway, John (Ryedale)

Alison, Rt Hon Michael

Gregory, Conal

Amess, David

Griffiths, Sir Eldon (Bury St E')

Amos, Alan

Griffiths, Peter (Portsmouth N)

Arbuthnot, James

Ground, Patrick

Arnold, Jacques (Gravesham)

Hague, William

Arnold, Tom (Hazel Grove)

Hamilton, Neil (Tatton)

Ashby, David

Hanley, Jeremy

Baker, Nicholas (Dorset N)

Hannam, John

Bellingham, Henry

Hargreaves, Ken (Hyndburn)

Bennett, Nicholas (Pembroke)

Harris, David

Bevan, David Gilroy

Hawkins, Christopher

Blackburn, Dr John G.

Hayward, Robert

Boswell, Tim

Heathcoat-Amory, David

Bottomley, Peter

Hicks, Robert (Cornwall SE)

Bowis, John

Hordern, Sir Peter

Braine, Rt Hon Sir Bernard

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

Brandon-Bravo, Martin

Howarth, G. (Cannock & B'wd)

Brazier, Julian

Hughes, Robert G. (Harrow W)

Bright, Graham

Hunt, David (Wirral W)

Brooke, Rt Hon Peter

Irvine, Michael

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

Jack, Michael

Buchanan-Smith, Rt Hon Alick

Janman, Tim

Budgen, Nicholas

Jessel, Toby

Burns, Simon

Knight, Greg (Derby North)

Carlisle, John, (Luton N)

Knowles, Michael

Carlisle, Kenneth (Lincoln)

Lawrence, Ivan

Carrington, Matthew

Lee, John (Pendle)

Carttiss, Michael

Lennox-Boyd, Hon Mark

Chapman, Sydney

Lester, Jim (Broxtowe)

Chope, Christopher

Lightbown, David

Clark, Dr Michael (Rochford)

Lilley, Peter

Clarke, Rt Hon K. (Rushcliffe)

Lloyd, Peter (Fareham)

Coombs, Simon (Swindon)

Lord, Michael

Cope, Rt Hon John

Lyell, Sir Nicholas

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

Macfarlane, Sir Neil

Day, Stephen

Maclean, David

Dorrell, Stephen

Major, Rt Hon John

Douglas-Hamilton, Lord James

Mans, Keith

Dover, Den

Marlow, Tony

Durant, Tony

Marshall, John (Hendon S)

Evennett, David

Marshall, Michael (Arundel)

Field, Barry (Isle of Wight)

Martin, David (Portsmouth S)

Fishburn, John Dudley

Maude, Hon Francis

Fookes, Dame Janet

Mayhew, Rt Hon Sir Patrick

Forman, Nigel

Mellor, David

Forsyth, Michael (Stirling)

Meyer, Sir Anthony

Forth, Eric

Miller, Sir Hal

Fowler, Rt Hon Norman

Mills, Iain

Freeman, Roger

Miscampbell, Norman

French, Douglas

Morris, M (N'hampton S)

Gale, Roger

Moss, Malcolm

Garel-Jones, Tristan

Moynihan, Hon Colin

Gill, Christopher

Needham, Richard

Gilmour, Rt Hon Sir Ian

Neubert, Michael

Goodhart, Sir Philip

Norris, Steve

Goodson-Wickes, Dr Charles

Oppenheim, Phillip

Gow, Ian

Paice, James

Greenway, Harry (Ealing N)

Peacock, Mrs Elizabeth

431

Porter, David (Waveney)

Thompson, D. (Calder Valley)

Raison, Rt Hon Timothy

Thorne, Neil

Redwood, John

Thurnham, Peter

Shaw, David (Dover)

Townend, John (Bridlington)

Shaw, Sir Giles (Pudsey)

Trippier, David

Shaw, Sir Michael (Scarb')

Trotter, Neville

Skeet, Sir Trevor

Twinn, Dr Ian

Smith, Sir Dudley (Warwick)

Viggers, Peter

Speed, Keith

Waddington, Rt Hon David

Speller, Tony

Walker, Bill (T'side North)

Spicer, Sir Jim (Dorset W)

Waller, Gary

Spicer, Michael (S Worcs)

Watts, John

Stanbrook, Ivor

Wheeler, John

Stern, Michael

Widdecombe, Ann

Stevens, Lewis

Wilkinson, John

Stewart, Allan (Eastwood)

Wilshire, David

Stewart, Andy (Sherwood)

Winterton, Mrs Ann

Stradling Thomas, Sir John

Wood, Timothy

Summerson, Hugo

Taylor, John M (Solihull)

Tellers for the Noes:

Taylor, Teddy (S'end E)

Mr. Tom Sackville and

Tebbit, Rt Hon Norman

Mr. Michael Fallon.

Thatcher, Rt Hon Margaret

Question accordingly negatived.
Question, That the proposed words be there added, put forthwith pursuant to Standing Order No. 30 (Questions on amendments):—
The House divided: Ayes 147, Noes 41.

Division No. 168]

[10.12 pm

AYES

Alexander, Richard

Forsyth, Michael (Stirling)

Alison, Rt Hon Michael

Forth, Eric

Amess, David

Freeman, Roger

Amos, Alan

French, Douglas

Arbuthnot, James

Gale, Roger

Arnold, Jacques (Gravesham)

Garel-Jones, Tristan

Arnold, Tom (Hazel Grove)

Gill, Christopher

Ashby, David

Gilmour, Rt Hon Sir Ian

Baker, Nicholas (Dorset N)

Goodson-Wickes, Dr Charles

Bellingham, Henry

Gow, Ian

Bennett, Nicholas (Pembroke)

Green way, Harry (Ealing N)

Bevan, David Gilroy

Greenway, John (Ryedale)

Boswell, Tim

Gregory, Conal

Bottomley, Peter

Griffiths, Sir Eldon (Bury St E')

Bowis, John

Griffiths, Peter (Portsmouth N)

Braine, Rt Hon Sir Bernard

Ground, Patrick

Brandon-Bravo, Martin

Hague, William

Brazier, Julian

Hamilton, Neil (Tatton)

Bright, Graham

Hanley, Jeremy

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

Hannam, John

Buchanan-Smith, Rt Hon Alick

Hargreaves, Ken (Hyndburn)

Budgen, Nicholas

Harris, David

Burns, Simon

Hawkins, Christopher

Carlisle, John, (Luton N)

Hayward, Robert

Carlisle, Kenneth (Lincoln)

Heathcoat-Amory, David

Carrington, Matthew

Hicks, Robert (Cornwall SE)

Carttiss, Michael

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

Chapman, Sydney

Howarth, G. (Cannock & B'wd)

Chope, Christopher

Hughes, Robert G. (Harrow W)

Clark, Dr Michael (Rochford)

Hunt, David (Wirral W)

Clarke, Rt Hon K. (Rushcliffe)

Jack, Michael

Coombs, Simon (Swindon)

Janman, Tim

Cope, Rt Hon John

Jessel, Toby

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

Knight, Greg (Derby North)

Day, Stephen

Knowles, Michael

Dorrell, Stephen

Lawrence, Ivan

Douglas-Hamilton, Lord James

Lee, John (Pendle)

Dover, Den

Lennox-Boyd, Hon Mark

Durant, Tony

Lester, Jim (Broxtowe)

Evennett, David

Lightbown, David

Fallon, Michael

Lilley, Peter

Fishburn, John Dudley

Lloyd, Peter (Fareham)

Fookes, Dame Janet

Lord, Michael

Forman, Nigel

Lyell, Sir Nicholas

432

Major, Rt Hon John

Stern, Michael

Mans, Keith

Stevens, Lewis

Marlow, Tony

Stewart, Allan (Eastwood)

Marshall, John (Hendon S)

Stewart, Andy (Sherwood)

Martin, David (Portsmouth S)

Stradling Thomas, Sir John

Maude, Hon Francis

Summerson, Hugo

Mayhew, Rt Hon Sir Patrick

Taylor, John M (Solihull)

Mellor, David

Taylor, Teddy (S'end E)

Meyer, Sir Anthony

Tebbit, Rt Hon Norman

Miller, Sir Hal

Thatcher, Rt Hon Margaret

Mills, Iain

Thompson, D. (Calder Valley)

Miscampbell, Norman

Thorne, Neil

Morris, M (N'hampton S)

Thurnham, Peter

Moss, Malcolm

Trippier, David

Neubert, Michael

Trotter, Neville

Norris, Steve

Twinn, Dr Ian

Oppenheim, Phillip

Viggers, Peter

Paice, James

Walker, Bill (T'side North)

Peacock, Mrs Elizabeth

Waller, Gary

Porter, David (Waveney)

Watts, John

Raison, Rt Hon Timothy

Wheeler, John

Redwood, John

Widdecombe, Ann

Shaw, David (Dover)

Wilkinson, John

Shaw, Sir Giles (Pudsey)

Wilshire, David

Shaw, Sir Michael (Scarb')

Winterton, Mrs Ann

Skeet, Sir Trevor

Wood, Timothy

Smith, Sir Dudley (Warwick)

Young, Sir George (Acton)

Speed, Keith

Speller, Tony

Tellers for the Ayes:

Spicer, Sir Jim (Dorset W)

Mr. David Maclean and

Spicer, Michael (S Worcs)

Mr. Tom Sackville.

Stanbrook, Ivor

NOES

Alton, David

Livsey, Richard

Barnes, Mrs Rosie (Greenwich)

McKay, Allen (Barnsley West)

Beith, A. J.

McKelvey, William

Bruce, Malcolm (Gordon)

Maclennan, Robert

Buckley, George J.

Mahon, Mrs Alice

Callaghan, Jim

Michie, Mrs Ray (Arg'l & Bute)

Carlile, Alex (Mont'g)

Patchett, Terry

Clarke, Tom (Monklands W)

Pike, Peter L.

Cook, Robin (Livingston)

Powell, Ray (Ogmore)

Dixon, Don

Ross, William (Londonderry E)

Dunnachie, Jimmy

Ruddock, Joan

Eastham, Ken

Skinner, Dennis

Ewing, Mrs Margaret (Moray)

Steel, Rt Hon David

Fatchett, Derek

Taylor, Matthew (Truro)

Fearn, Ronald

Wallace, James

Forsythe, Clifford (Antrim S)

Wareing, Robert N.

Golding, Mrs Llin

Wigley, Dafydd

Haynes, Frank

Wilson, Brian

Hinchliffe, David

Howells, Geraint

Tellers for the Noes:

Hughes, Simon (Southwark)

Mr. Harry Barnes and

Kilfedder, James

Mr. Alan Teale.

Kirkwood, Archy

Question accordingly agreed to.
Mr. Speakerforthwith declared the main Question, as amended, to be agreed to.
Resolved,
That this House expresses full support for the Government's policy of community care and for the proposals set out in the White Paper, Working for Patients; commends the Government's record on the funding and development of primary health care and community care; and believes that the White Paper, together with the Government's earlier White Paper, Promoting Better Health, will help family doctors to develop the services which they provide for their patients, strengthen the provision of primary care in general and complement the development of policies for community care, improve the quality of care for all patients, and ensure that all those concerned with delivering health care make the best use of the resources available to them.

Barnburgh Colliery
Motion made, and Question proposed, That this House do now adjourn.—[Mr. Kenneth Carlisle.]
10.23 pm
Mr. Terry Patchett: I appreciate the opportunity to discuss in the House a matter that dramatically affects my constituents. In an area that already suffers from high unemployment, the loss of another 775 jobs is a dramatic blow. Barnburgh colliery is covered by the review procedure and its closure is a matter for discussion between unions and British Coal, which will listen to the ideas and propositions of the unions and will go away and think about them. I do not intend to interfere in any way with the negotiations.
I know that the Minister tends to take a Pontius Pilate stance on the issue because the Government take the view that colliery closures are matters for the commercial judgment of British Coal. We are speaking about social problems, real human problems that affect my constituency. The Government should accept some responsibility because perhaps they have been involved in misleading the country in the last few years. I recall that, during the miners' strike, a duly elected president of the National Union of Mineworkers was called a liar and a scaremonger when he prophesied a huge pit closure programme if the miners were unsuccessful in that dispute. History proves who was telling lies and who was telling the truth. Many hon. Members owe Arthur Scargill and the British public an apology because that pit closure programme took place.
We had thought that it was over, but virtually every month we find that it keeps rolling on. In pits that we thought, and had been told, had some sort of future, union officials are suddenly sent for and virtually given a closure date. Barnburgh colliery falls into that category. We were promised that it had reserves of 15 years, and then the officials were called in. The manager suggested that there was no need to go through the review procedure, a procedure accepted by all sides. This I find despicable. Nevertheless, because of pressure from the union, the procedure has been used.
The work force are told that, regardless of money that has been spent, a seam is unworkable because of geological conditions, even though there is evidence to suggest that the management was told that it was using the wrong mining techniques. So after all that money has been spent, we find that suddenly, for geological reasons, the reserves have gone. I have had some experience in mining—26 years of it—and I find it unacceptable that, with today's mining and surveying techniques, such a view should be put forward. It just should not happen.
We have finally reached the point where we must ask who is managing our pits and who makes these incompetent blunders. It is rather ironic that the last pit managed by Barnburgh's manager was Cortonwood. He seems to be an unfortunate manager. It was in his last pit that the Government organised the dispute with the miners.
Quite apart from the question of reserves, the unions were sent for, shown the financial position and told that the pit had lost £600,000 over a period of time. When the union officials looked through the books they found a figure of £125,000 for transport from the washery plant associated with Barnburgh shown as an expense for
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transport from that washery plant to another colliery for blending purposes. When the officials argued that the receiving colliery normally accepted that expense, British Coal said that the book-keeping arrangements had been changed.
British Coal, therefore, seems to be in the business of making unprofitable any pit that it chooses. It is very distressing. Hon. Members may have difficulty in understanding that point, but the truth is that, while British Coal appears to lurch from crisis to crisis and react only with further pit closures, it really knows just what it is doing. If it does not, the question of its competence should be raised.
British Coal talks of problems with market forces and competition in the energy industry when I sincerely believe—or I would not say so here—that it is preparing the industry for privatisation by these closures. It may seem strange to speak of closing pits to prepare for privatisation, but I believe that British Coal, on behalf of the Government, is preparing nice, neat little parcels, ripe for the picking by the Government's friends on the stock exchange. The Government may say that they believe in free market forces, but that is inconsistent with their actions, because they have more sympathy for other sources of energy. We have only to look at the protective cocoon that they have thrown around the nuclear energy industry in the Electricity Bill to establish that. It is a fact that market forces prevail in one energy industry—coal—but the nuclear industry is cocooned.
Without a mandate, the Government and British Coal are using taxpayers' money to prepare the industry for privatisation. That is their declared intent if they are returned to government after the next election. I am sure that the Minister will laughingly deny that and speak of the investment that the Government have put in. In fact, they have clawed more back in debt charges than they have put into the industry. That is another burden which the industry has to bear.
Many hon. Members and I are concerned, and if the Minister says that our fears are unfounded, I challenge him to set up a public inquiry into the management of British Coal and its directors. Constituents such as mine already have high unemployment as a result of the policies of the Government and the coal industry. We have a right to know the truth.
I shall not go into the specific problems at Barnburgh, but Government policies have contributed to its proposed closure. Without a mandate from the House or a general election, the way is being prepared for privatisation. That is the truth. If the Minister wants to prove that I am wrong, and allay my fears, I would welcome a public inquiry into the management of British Coal, because I cannot accept that it is so incompetent as to come up with the old ideas about unworkable resources. I have worked in the pits and know that modern technology protects them from that. If modern management has brought about such a state of affairs, questions should be asked.
10.32 pm
The Parliamentary Under-Secretary of State for Energy (Mr. Michael Spicer): The hon. Member for Barnsley, East (Mr. Patchett) has quite properly raised the question of the future of Barnburgh colliery, which he also discussed, in his capacity as chairman of the miners' group of Members of Parliament, with my right hon. Friend the Secretary of

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State on 21 February this year. My right hon. Friend said at that meeting that individual colliery closures were matters for the judgment of British Coal, in which Ministers did not intervene. That remains the position. Barnburgh colliery, which started producing coal as long ago as 1917, is one of 18 deep mine collieries at present operating in British Coal's south Yorkshire area. Generally, the south Yorkshire area has reserves of good quality coal, although these have been extensively worked on the western side of the coalfield, and operations are now increasingly concentrated on the deeper reserves to the east.
The hon. Member for Barnsley, East may make snide comments about this, but it is a fact that massive amounts are being invested by British Coal on expanding production on the eastern side of the coalfield. For example, £140 million—no small sum—is being invested in Maltby colliery to double its output to 2 million tonnes a year. Large sums are being invested in heavy duty equipment at Silverwood and Rossington. Nationally, a massive investment programme continues to run at over £2 million every working day. The resulting increases in productivity are the reason why we are confident that, if the pace of improvement can be maintained, the British coal industry will be able to compete with imports for the bulk of its business. That process does imply the closure by British Coal of pits that are uneconomic.
Although decisions about the closure of individual units are the management responsibility of British Coal, that does not mean that British Coal closes pits without prior consultation with the work force. The modified colliery review procedure, agreed between the mining unions and British Coal, provides for the detailed review of the performance of individual collieries, including where appropriate the scrutiny of proposals for closure at three levels: local discussions, national appeals and ultimately the independent review body. The last stage is chaired by an eminent independent individual who is acceptable to both sides and whose report, while not binding, is given full weight by the corporation in reaching its final decision. Barnburgh colliery has reached the stage of national appeal.
The consultation procedure for considering closure proposals is the most comprehensive process of its kind available to any industry. It allows representatives of the work force to submit evidence throughout the three stages of the proceedings. The Government are not at any stage a party to these arrangements.
I shall not prejudge the outcome of the review procedure, and in particular of the national appeal meeting between the unions and British Coal that is due to take place tomorrow, but the House may find it helpful if I give a few financial facts about Barnburgh.
At the end of December, the Yorkshire area as a whole made an operating profit, before capital charges, of £40 million for the first three quarters of the financial year. Barnburgh had contributed an operating loss of around £1–5 million. Barnburgh's performance in 1988–89 was not exceptional. In the two previous years it had made losses of £1·4 million and £2·2 million respectively.
In the quarterly review meeting on 24 January, British Coal's south Yorkshire area director referred to five collieries within his area that were giving him cause for concern. One of those five was Barnburgh. The other four were Brodsworth, Dinnington, Thurcroft and Shireoaks.
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All four of those pits have subsequently been the subject of their own reconvened colliery review meetings. In each case British Coal has suggested an alternative 10 closure which has received the backing of the unions. For Brodsworth, Dinnington and Thurcroft, revised production targets were agreed. The fourth colliery, Shireoaks, was placed on development work only.
A reconvened colliery review meeting was arranged for Barnburgh on Friday 3 February. At this meeting, at which the National Union of Mineworkers, the British Association of Colliery Management and the National Association of Colliery Overmen, Deputies and Shotfirers were all represented, the area director said that there was no method of working the remaining reserves that would result in the colliery being viable. Therefore, he proposed that the colliery should cease production in June once the remaining faces were worked out. The Manvers central coal preparation plant would also have to close.
The area director also took the opportunity to pay tribute to the efforts of the work force, particularly, in relation to the work carried out on the Meltonfield and Newhill workings. He added that there would be no compulsory redundancies. Those wishing to remain in the industry would be offered alternative jobs at other collieries within the south Yorkshire area.
It is worth emphasising that no compulsory redundancies would be involved and—perhaps equally important—no moves of necessity to collieries outside south Yorkshire. Men who wished to be transferred to other units would receive the short-distance transfer payment. Men opting for redundancy would be eligible for the enhanced terms that are available from British Coal until 26 August.
The voluntary redundancy terms offered by British Coal are of course a matter for the corporation. Last November it announced improved redundancy terms for mineworkers that included an additional £7,500 lump sum payment for those with 15 or more years' service. British Coal calculated that a mineworker aged 32 with 16 years' service would receive total benefits upon redundancy of more than £17,000. A mineworker aged 51 with 25 years' service would receive more than £33,000. Those terms are without doubt very generous and compare favourably with those available in any other industry.
Following the reconvened review meeting on 3 February, NACODS and BACM members decided to accept the closure, while NUM members voted by a narrow margin to fight the closure proposal—52 per cent. against to 48 per cent. for. Under the terms of the modified colliery review procedure, the unions are given one month following the announcement of closure to request that the proposal be referred to a national appeal meeting so that they can give their reasons why the pit should not close. To help them prepare their case, British Coal offers them every assistance. The unions are given the opportunity to undertake a technical inspection and study market performance and financial prospects data.
At the meeting on 28 February, a detailed survival plan was submitted by the NUM. On 3 March, the two sides met again so that British Coal could give its reaction to the survival plan. British Coal estimated that the NUM plan would lead to an operating loss of more than £9 million. In view of that massive projected loss, British Coal felt that it had no alternative but to confirm that its decision on closure should remained unaltered.

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As the hon. Gentleman said, we now await the outcome of tomorrow's national appeal meeting to see whether the union has managed to modify its plan in such a way as to make the pit profitable.
Mr. Allen McKay: Is not the bottom line at review meetings the expenditure line? Is the profit line ever questioned? I accept and acknowledge that, as the Minister said, there has been massive investment in the mining industry. Barnburgh is one of those involved. Barnburgh has served as an in-taking colliery for miners who have been affected by closures once, twice or even three times. Although the Minister's claim that there have been no redundancies is true to a certain extent, it is questionable. However, I will not take up with him at this stage what is or is not compulsory redundancy.
Will the Minister explain what is deemed to be an economic mine or an uneconomic mine? The word "economic" is one we have been hearing since Lord Robens' days. The top five or six mines are skimmed off as being economic, the next five or six become uneconomic, and the five or six after that are again deemed to be economic. However, those collieries take on the burden of expenditure associated with the closed collieries. When will it stop?
Mr. Spicer: One of the reasons for the situation that the hon. Member accurately describes is that the industry still receives enormous subsidies. There is nothing new about that. There is no great revelation being made in saying that a pit has become unecomonic. Subsidies have been going to the industry for a long time.
The Government take the view that that process of subsidisation must ultimately cease. It was implicit in the speech of the hon. Member for Barnsley, East and was mentioned by the hon. Member for Barnsley, West and Penistone (Mr. McKay) that the industry has many debt obligations. That aspect may lie behind the question of the hon. Member for Barnsley, West and Penistone as to whether it is fair to include loan interest payments in the calculation of what is or is not economic. The Government say that the time may come when we must examine the industry's financial and debt structure.
We also must bear in mind the fact that those debts or uneconomic investments are real. They have not appeared out of the blue but represent moneys which have been spent and which the industry finds it impossible to recover from its operating revenue. They are not artificial burdens on the industry. At some point the Government will have to decide whether to restructure those debts. But it cannot properly be argued that the pits to which those debts are attributed are not uneconomic as that would be a faulty assessment.
The Government will be examining British Coal's debt structure at some point in the future, but in the meantime, in every way in which operating costs can be set against operating revenue, it is the view of British Coal—the facts speak for themselves—that certain pits are simply not paying their way. Unless we can achieve an industry which is genuinely paying its way, and in which each pit is paying its way in a marginal sense, the entire industry will be
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dragged down, and ultimately questions will have to be asked about its ability to compete with imports, for example.
The Government consider that a slimmed-down, efficient industry such as British Coal, with good coal reserves and backed by high investment, is well able to compete with imports and will be a great source of pride to the country in the years ahead.
Mr. George J. Buckley: In his reply to my hon. Friend the Member for Barnsley, East (Mr. Patchett), the Minister said that British Coal's regional director in south Yorkshire had five collieries which were causing him great concern and local reviews had been taking place. If those collieries were to be closed, 13 collieries would remain in south Yorkshire. Does the Minister agree that the burden of debt spread over 13 collieries instead of 18 collieries would make some of the remaining collieries uneconomic and inevitably that redistribution of debt would put some of the remaining 13 collieries in jeopardy?
The Minister mentioned the review procedure. Does he accept that there has been a breakdown of that procedure in the negotiations at area level in Barnburgh? The area director and the British Coal team did not accept the NUM's proposals. The Minister said that tomorrow a national review will be carried out. Inevitably it will reach the same conclusion as a consequence of the evidence presented by the NUM. Does the Minister accept that there is a case for some independent arbitration that, for whatever reason, might consider that Barnburgh colliery should not close, and that the decision to close the colliery should be taken on the basis of an independent assessment of the future of the jobs at that colliery?
Mr. Spicer: On the hon. Gentleman's first point about the focusing of debt, I certainly did not say anything about the future of the other pits. That is a matter for British Coal, which no doubt will review their performance, but no clear decision has been taken on whether they should be closed. There is some merit in what the hon. Gentleman says about the need to examine the capital and debt structure of British Coal, and the Government fully concede that.
When assessing the viability of a pit it is probable that the assessment will be made upon genuine operating costs and against genuine revenue. I would not want to dispute with the hon. Member for Hemsworth (Mr. Buckley) that the time may come for a reassessment of British Coal's debt, but I do not believe that one can ignore the fact that uneconomic investments have taken place in the past. One has to take that into account when assessing the viability of the pits.
On the review procedures, there is a third level at which the matter can be considered, and the hon. Member for Hemsworth is aware of that. This is the eve of the appeal, and I would not want to prejudge what I am certain will be an objective assessment of the circumstances. As the hon. Gentleman said, the NUM has, up to now, disputed the position at local level, and it will put its views tomorrow. If it comes up with a plan that is credible and acceptable to British Coal, it will cast a new light on the matter. I do not want to go into that any further, as I do not want to inhibit the objectivity of the discussions. Hopefully, on the basis of that response, we can await tomorrow's events and see what they bring forth.

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There is no doubt about the Government's intentions for the British coal industry. Our intentions are often misinterpreted. The Government are, rightly, piling money into the coal industry because it is a great national asset. The Government want that asset to reach its full potential in the interests of the British economy. It is our desire that the industry will beat off imports. However, for the
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purpose of efficiency and the well-being of electricity consumers particularly, we will allow imports to compete, but, as I have said, we hope that the British coal industry will beat them off.
Question put and agreed to.
Adjourned accordingly at nine minutes to Eleven o'clock.