Commons Sitting of 22 October 1990

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

    Private Bill Procedure
    Mr. Andy Stewart: To ask the Secretary of State for Transport what representations he has received on the proposed reform of private Bill procedure in so far as it affects his Department.
    The Secretary of State for Transport (Mr. Cecil Parkinson): We have received nearly 100 representations so far in response to the consultation paper that was published on 21 June. Most of those who have offered views have supported the principle of the Government's proposals for establishing new procedures for authorising the majority of rail, light rapid transit and harbour works projects.
    Mr. Stewart: I thank my right hon. Friend for that reply. Is he aware, however, that, contrary to an EC directive, the new Humber port is to go ahead without an environmental impact study having been done, and that, as a result, 10 million tonnes of coal will be travelling to and from Nottinghamshire power stations, causing an environmental blitz on villages along the route? Does my right hon. Friend agree that Nottinghamshire community charge payers should not be left to pick up the bill for the
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    resulting road damage, as happened at the end of the miners' strike? Should not the proposals to which my right hon. Friend referred be made to apply retrospectively to all Bills passed in 1990?
    Mr. Parkinson: As my hon. Friend knows, the House is quite properly suspicious of retrospective legislation, and the point that he made was considered by the Joint Committee on Private Bill Procedure. I am sure that he knows, too, that the Government have accepted the recommendations of the Select Committee that an environmental assessment study should accompany future private Bills.
    Mr. Skinner: Surely, what is being requested is not retrospective at all. Are not we merely calling upon the Government to do the decent thing and ensure that an environmental impact study is undertaken by the Department of Transport, in consultation with the Department of the Environment, in respect of these massive changes, which would result in up to 30 million tonnes of coal being brought into the British coalfields and in our miners being displaced? If that study were made, and if the proper planning requirements were adhered to, the Humber port and the other associated ports would not go ahead.
    Mr. Parkinson: The whole point of the new procedures is to widen the discussion and give more people a chance to register their objections, while preventing unreasonable objections and preventing small minorities of hon. Members from blocking Bills. The point that the hon. Gentleman has made was considered by the Select Committee and the argument was rejected. The Committee felt qualified to reach its decision without an environmental assessment and the House approved the Committee's thinking when it gave the Bill its Third Reading.
    Mr. Gerald Bowden: Is my right hon. Friend aware that there is an unfairness inherent in the private Bill procedure and that, in the drafting of the King's Cross Railways Bill, which presumed a rail link from the channel tunnel to central London, there was no mention whatever of the

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    alignment of that route, which denied to those who might be affected, by implication, the opportunity of making any representations? Was not British Rail's draftmanship too clever by half?
    Mr. Parkinson: I think that the whole House recognises that our present arrangements for approving major infrastructure projects by the private Bill procedure are unsatisfactory. That is why we came forward with a consultation paper. That is why we shall consider carefully the points made to us and I suspect—although I cannot commit the Government—that we shall come forward with primary legislation in due course.

    M66
    Mr. Andrew F. Bennett: To ask the Secretary of State for Transport if he will make a statement about progress towards the construction of the M66 from Denton to Middleton.
    The Minister for Roads and Traffic (Mr. Christopher Chope): I expect work on the first construction contract at the northern end of the scheme to commence early in 1992, subject to the successful outcome of the remaining statutory procedures.
    Mr. Bennett: I thank the Minister for that reply. Is he aware that my constituents are extremely concerned about the traffic congestion at the Denton end of the existing piece of motorway and are keen that he should publish as soon as possible the side road orders in connection with the proposed link from Denton to Middleton because they fear that the whole process is being delayed by the proposals of North West Water to develop a business park at Kingswater? We should like an assurance that the Department will not delay in getting the motorway link in place, because it is essential to the safety of my constituents.
    Mr. Chope: I share the hon. Gentleman's concern to see the project completed as soon as possible. I can assure him that the Kingswater park scheme will not be allowed to interfere with that very important motorway project. If the Kingswater park scheme cannot be implemented at the same time, it will have to wait until after the M66 has been completed. That important scheme will cost about £250 million and we are proud to have it in our roads programme.
    Mr. Sumberg: When the motorway is completed, will my hon. Friend the Minister bear it in mind that it will relieve some of the congestion on the M62 and will therefore make unnecessary the unloved and unwelcome extension to the M62, which would seriously damage and decimate parts of my constituency? That extension is totally opposed by every constituent whom I have met and know, including many who met my hon. Friend the Minister when he was kind enough to come and see the site for himself during the recess.
    Mr. Chope: As my hon. Friend recognises, I went to have a look at the proposed site and to listen to some representations about it. Obviously, I cannot anticipate what proposals might be made later and only at that stage can I go into the merits of the scheme.

    Channel Tunnel
    Mr. Salmond: To ask the Secretary of State for Transport when his Department intends to respond to the proposals contained in the draft European Community directive for investment to provide high-speed rail links between Scotland and the channel tunnel; and if he will make a statement.
    The Minister for Public Transport (Mr. Roger Freeman): The draft directive for a high-speed European rail network makes no such proposals, but a full electric service between Edinburgh and London is expected to start next year, and British Rail's plans for the channel tunnel include services between Scotland and the continent.
    Mr. Salmond: Can the Minister explain why the European Transport Commissioner is more concerned with fast rail links to Scotland and the continent than is the Department of Transport? How did the Secretary of State for Transport have the brass neck to announce at the Tory party conference some £2,500 million of additional rail spending in London while the Edinburgh-Aberdeen line has not been supported for electrification? The Government are not running a transport policy; they are running a regional and political policy directed to the south of England where they want to spend their way to the next election.
    Mr. Freeman: I do not accept that for one moment. The hon. Gentleman knows that British Rail's investment programme totals £3·7 billion over the next three years, and that includes the completion of electrification to Edinburgh involving £450 million for an excellent service up the east coast main line.
    Mr. Adley: Will my hon. Friend confirm that any of the costs of the improvement to high-speed rail links between Scotland and the south-east of England will have to be borne by British Rail out of its operating revenue, including all or any costs for environmental work? Will he further confirm that any environmental roadworks between Scotland, the south-east and the channel tunnel will all be funded by the taxpayer? Why do we have double standards between road and rail for environmental protection?
    Mr. Freeman: In response to my hon. Friend's question about British Rail having to finance its investment programme out of its operating revenues, that is not the case. British Rail's investment programme of £3·7 billion over the next three years is financed through the receipt of grants from the taxpayer, the receipt of proceeds from the sale of surplus land and borrowing from the taxpayer. With regard to the difference between road and rail appraisal, I should be glad to meet my hon. Friend, to go into the details and explain how British Rail appraises its projects.
    Mr. John D. Taylor: Is the Minister aware that the demand for a fast rail link between Scotland and the channel tunnel has increased since last week? Is he further aware that one of the two links between Northern Ireland and Great Britain—the Belfast-Liverpool ferry—was closed down last week and that the remaining link between Northern Ireland and the United Kingdom is the Northern Ireland-Scottish link between Larne and Stranraer? Will the Minister take into account the new

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    circumstances and accept that everyone in Northern Ireland fully supports the demand by Scotland for fast rail links between Scotland and the channel tunnel?
    Mr. Freeman: I can assure the right hon. Gentleman that I shall pass on his comments to British Rail. It plans investment and it runs the railway. In respect of high-speed rail links, the first priority must be the line from Folkestone to London. British Rail is presently evaluating alternative routes into London. When it has completed that appraisal—I hope in the spring of next year—it will then, in due course, come to my right hon. Friend the Secretary of State with specific proposals for a new high-speed rail link, which the Government accept is needed.
    Dame Elaine Kellett-Bowman: I am sure that my hon. Friend is well aware that my constituency attaches considerable importance to the King's Cross project. There was much dismay there when the private Bill procedure was delayed by the absence of Labour Members, which made the Committee inquorate. Will my hon. Friend use his best endeavours to ensure that when British Rail makes use of the impressive investment that he referred to, some of the money goes to places such as Lancaster to give us a good freight and passenger service?
    Mr. Freeman: Perhaps I can reassure my hon. Friend. She may have read in the press a very misleading account of an alleged postponement or nigh cancellation of west coast main line improvements. That is absolutely untrue. The west coast main line investment, which will be substantial—about £750 million, I understand—is still in British Rail's plans. Improvements cannot be built overnight. When British Rail comes forward with a specific investment proposal, that is a matter for it. [Interruption.] I am sure that it is as interested as the hon. Member for West Bromwich. East (Mr. Snape), and we are interested in looking at such a proposal. When it comes forward we shall give it sympathetic consideration.
    Mr. Prescott: Is not the Minister aware of the despair that is felt by British Rail management that they have to postpone plans for the north-west high-speed rail link because of the inadequacies of the corporate plan of which we warned last December? Will the Minister and the Secretary of State now review that decision, come to the House and give us a further statement on the, changes before any further damage is done to our inadequate and deteriorating railway system?
    Mr. Freeman: I find the hon. Gentleman's question difficult to comprehend. In the light of what my right hon. Friend the Secretary of State will be able to say following the autumn statement and the updating of the external financing limits both for British Rail and for London Regional Transport, I am sure that British Rail will come forward with updated plans and proposals not only for the next three years but for the next decade. It is right that it should look beyond the three-year public expenditure survey planning period. One cannot build major railway lines within the three-year PES planning period. We look forward very much indeed to positive proposals from British Rail.

    Accidents, London
    Mr. Corbyn: To ask the Secretary of State for Transport what are the latest available statistics for traffic accidents involving (a) vehicles and pedestrians and (b) vehicles and cycles for Greater London.
    Mr. Chope: In 1989 there were 12,148 personal injury accidents involving motor vehicles and pedestrians, and 4,986 personal injury accidents involving vehicles and pedal cyclists.
    Mr. Corbyn: Is the Minister aware that one of the great problems in London is the lack of transport planning because of the abolition of the Greater London council? The Government are calmly presiding over a massive increase in the number of commuter cars in central London, which increases the number of accidents involving cyclists—they went up by nearly 30 per cent. in 1988–89—and the serious number of accidents involving pedestrians. Does not the Minister agree that the time has come to control the growth in commuter car motoring in London, to increase the grants available to public transport, and, in planning red routes and other routes, instead of being obsessed with increasing the number of cars, actually to make life safer for pedestrians and cyclists? Under present plans there is no proposal for cycle routes on major road junctions. We need safety first for pedestrians and cyclists, not an increase in the number of cars.
    Mr. Chope: The fact is that there has actually been a reduction in the number of cars commuting into London. There has been an increase in the number of cyclists, and I welcome that. The Government are investing a lot of money in road safety and transport supplementary grant, and we have given local authorities substantial sums to spend on road safety schemes. If the hon. Gentleman encouraged more people to pay the community charge, instead of discouraging them, there would be more money to spend on road safety.
    Mr. Bowis: Does my hon. Friend agree that far too many accidents involving pedestrians are caused by rat running and that the welcome news about red routes will go some way to deterring that? Does he further agree that we also need road humps and restricted road widths, and that that should be encouraged by local government? Finally, does he agree that far too many bicycle accidents are caused by cyclists travelling without lights at night?
    Mr. Chope: I agree with all my hon. Friend's points. The borough that he is fortunate enough to represent has set a good example and has shown what can be done to improve traffic flow on the roads and road safety and to ensure that there is less rat running.
    Mr. Cohen: Is the Minister aware of the early-day motion that I tabled about six months ago about the horrifyingly high number of deaths and injuries on pedestrian crossings? That early-day motion, which was signed by many hon. Members, called on the Department of Transport to take action to try to reduce the number of deaths and injuries. However, we have heard nothing from his Department and very little from the police about prosecuting the motorists who cause those deaths and injuries. When are we going to get some action?
    Mr. Chope: There is plenty of action, but there is a limit to what the Government can do because safety depends on pedestrians, cyclists and other road users using their common sense and applying the rules that they should know about. However, we are spending £1·5 million to promote child safety this year and we have encouraged the private sector to contribute £8·5 million towards that same campaign. The Government are not complacent about that, but we look to people such as the hon. Gentleman to support us.

    London Underground
    Mr. John Marshall: To ask the Secretary of State for Transport if he will make a statement on investment in London Underground this year and in 1984–85.
    Mr. Parkinson: London Underground alone plans to invest approximately £400 million in 1990–91. In real terms, that is two and a half times the future for 1984–85, the last year that the Labour Greater London council set funding levels for London Transport.
    Mr. Marshall: May I assure my right hon. Friend that his statement will be warmly welcomed by commuters in London who deeply deplore the attempts of certain Opposition Members to use the private Bill procedure as a means of frustrating improvements to London's transport? Will my right hon. Friend spend substantial sums to improve existing routes such as the Northern line, on which the trains are all to often graffiti-ridden and irregular and where the standard of service is not what it ought to be?
    Mr. Parkinson: London Underground plans to invest about £1,700 million in the next three years, £1,200 million of which will be spent on the existing underground. The Northern line will, in due course, come forward for modernisation, and the Central line modernisation is already under way. In addition, as my hon. Friend pointed out, we can put the Opposition's commitment to improving London Underground's system to the test by asking them to support us both with the London Underground Bill and the Heathrow Express Railway Bill, which deal with the Jubilee line and the east-west crossrail.
    Mr. Simon Hughes: Does the Secretary of State recognise that people south of the river feel that, over the years, investment has been made disproportionately north of the river? Will the right hon. Gentleman affirm that the key immediate tests of the commitment of both the Government and London Underground to transport south of the river are their commitment to the stations that he already knows about, such as Southwark and Bermondsey on the Jubilee line, a commitment to the south extension of the east London line, and their commitment to improvements on the Northern and Bakerloo lines, because we shall then begin to feel that we are at least getting fair treatment?
    Mr. Parkinson: As the hon. Gentleman knows, one attraction of the Jubilee line is that it brings south London more favourably into the underground system. He should also remember that we are planning to take the Jubilee line to the Greenwich peninsula, which will bring that part of south London into the system. We accept the hon.
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    Gentleman's complaint that south London has not had its fair share of public transport investment, but we are doing our best to make up for that.
    Dr. Goodson-Wickes: My right hon. Friend may be aware that the Northern line, which serves much of my constituency, celebrates its centenary in a couple of weeks, which I believe, makes it the oldest tube system in the world. Will my right hon. Friend give the line, which, unfortunately, has been dubbed the "misery line", some really good news to celebrate on its centenary?
    Mr. Parkinson: As I said to my hon. Friend the Member for Hendon, South (Mr. Marshall), a substantial programme for improving the existing lines is in hand. The Central line is at present in the middle of a £750 million modernisation programme and, as it is completed, the Northern line will be the next to get the treatment.
    Ms. Ruddock: Given what the Secretary of State said about investment, will he tell the House why he believes that ridership on the underground is falling when, in its annual business plan, London Underground predicted a 4 per cent. increase in the current year? Does he intend to bail out London Underground's £40 million deficit or to inflict further pain upon the travelling public in London?
    Mr. Parkinson: I wish that the deficit on London's underground was only £40 million. The loss that London Underground expects to make this year is £120 million, so its investment programme will be funded virtually entirely by the taxpayer through a grant of more than £434 million to the Underground. I am sure that the hon. Lady will be pleased to hear that over the next three years London Underground will receive another £1·75 billion. That is how it will pay for the rest of its capital programme.

    Traffic Congestion
    Mr. David Evans: To ask the Secretary of State for Transport what measures are currently being considered by his Department to help reduce traffic congestion in London and other large cities.
    Mr. Parkinson: We are tackling urban traffic congestion with a range of measures, including better public transport, road improvements and better management of the road network.
    In and around London, Network SouthEast and London Regional Transport are investing £3·4 billion during this and the next two years in public transport, and I have just announced the £1·4 billion east-west crossrail project, which is in addition to that.
    I have also announced a major series of measures to overhaul traffic and parking controls in London.
    Mr. Evans: May I thank my right hon. Friend for his reply and congratulate him on his imaginative and bold schemes—schemes that this country can afford, thanks to the prosperity achieved under the Government? Is not that in stark contrast to the crackpot spending schemes of the Labour party, which would quickly find itself bankrupt as it bankrupted the country in the late 1970s, just like a certain building in the Walworth road and the unions are bankrupt? In other words, no money and no ideas.
    Mr. Parkinson: It is a fact that, in spite of all the claims of Labour Members, when the Labour party was in government it ran the country's economy into the ground

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    and the result was a huge cut in every capital programme. My hon. Friend is right to point out that we have record investment in the underground, the railways and Network SouthEast and we have plans for clearing space on our roads to get better use out of them. All that we hear from the hon. Member for Kingston upon Hull, East (Mr. Prescott) and his colleagues is whingeing and wild promises.
    Ms. Abbott: Is the Secretary of State aware that at least some of the traffic congestion in Hackney is caused by the fact that we are the only borough in London without a tube station? Is he aware of how much some of us in Hackney have pinned our hopes on the Chelsea-Hackney line? Can he give us some assurances about the future of that scheme?
    Mr. Parkinson: As the hon. Lady knows, we had to make a choice between east-west crossrail and Chelsea-Hackney. We concluded that London simply could not stand the simultaneous construction of two major lines. It would bring the capital to a grinding halt, a fact that the newspapers now appear to be getting hold of. Therefore, we have approved the plan for east-west crossrail and we have kept the option of Chelsea-Hackney open by protecting the line at an initial cost of £15 million.
    Mr. Sayeed: Is my right hon. Friend aware that one way to reduce congestion is to encourage the use of bicycles by people who commute in the inner cities? As one who bicycles to and from the House fairly frequently, I find that one of the problems is the state of the road surface. Can my right hon. Friend tell me what the Government are doing to encourage the public utilities, which usually cause the problems with the road surface by digging it up one after the other and leaving it in a poor state, to return road surfaces to the standard that we have every right to expect?
    Mr. Parkinson: First, I congratulate my hon. Friend on his courage in cycling around central London and daily to Westminster. The good news is that, all being well, we hope to present a Bill in the next Session giving us much more control over public utilities and their activities in digging up roads and setting higher standards for resurfacing repaired roads. We shall probably also include a power to charge and penalise such utilities if they do the job badly.
    Mr. Cartwright: Does the Secretary of State accept that traffic congestion in London will not be improved if the new Networker trains from Kent and south-east London do not come in as planned at the end of 1991? As these are to operate on some of the most crowded routes in Europe and British Rail accepts that the present service is below an acceptable standard, can the right hon. Gentleman assure us that those trains will come in on time?
    Mr. Parkinson: The order was placed in September last year, the new trains are due for delivery in September next year and they are scheduled to come into full service in January of the following year. It is now in the hands of the manufacturers. Resignalling is under way and the necessary work on the stations is to begin.
    Mr. Hill: Is my right hon. Friend aware that Southampton is becoming known as the city of a thousand traffic lights? The eastern docks road, to which we looked forward for many years, is extremely dangerous—
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    narrowing from four lanes to two every few hundred yards. Is my right hon. Friend also aware that a private. Bill—the Southampton Rapid Transit Bill—will increase congestion? That railway will start and end in the city centre and all the motorists will have to converge on the city centre. Does my right hon. Friend propose in future to leave it entirely to local authorities to control these great areas of congestion or will he send people from the Department to investigate as soon as possible all the problems of traffic safety in Southampton?
    Mr. Parkinson: As my hon. Friend knows, the Department of Transport owns 4 per cent. of the roads—the motorways and national trunk roads—while the other 96 per cent. are owned and controlled by local authorities. Southampton has taken a fairly major step in the right direction as a result of the recent reshuffle. We now have in the Department a Minister—my hon. Friend the Member for Southampton, Itchen (Mr. Chope)—who is determined to make sure that the problems there are properly addressed.
    Mr. Rooker: May I remind the Secretary of State that not all Britain's transport problems are in London? One clear way to reduce congestion is through the use of mass transit and light rail networks. Can the right hon. Gentleman cite even one instance in which the Department has offered concrete, solid financial assistance to any of the proposed light rail systems? When will Birmingham get the benefit of the electrified north-south route that he announced during the Mid-Staffordshire by-election?
    Mr. Parkinson: The answer to the hon. Gentleman's first question is yes—the Manchester Metrolink is being backed by substantial Government funds. I was in that area a couple of weeks ago and good progress is being made on what looks like an interesting scheme. Other schemes are being considered.
    The hon. Gentleman also asked about electrification. We wish to get ahead with that as quickly as possible because we think that the cross-Birmingham route from Redditch to Lichfield, which will use the new rolling stock that has been ordered and approved by my Department, will be a major boon to Birmingham. There are a variety of answers to the problems of our different cities. Some will have light rail and some will have improved electrification of existing lines. Both systems are under way.

    London Underground
    Mr. Harry Greenway: To ask the Secretary of State for Transport what measures are being taken to improve the Central line of London Underground.
    Mr. Freeman: The Central line is currently undergoing modernisation costing more than £700 million and involving 85 new trains and complete resignalling. The first of the new trains is expected to run in early 1992 and the whole programme is scheduled for completion by 1995.
    Mr. Greenway: I thank my hon. Friend for outlining those welcome improvement programmes. In the meantime, is he aware that for many of my constituents the Central line has become the new misery line? There is gross staff rudeness, graffiti all over the place, unpunctual trains and trains turned around without the people waiting

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    for them being told. Other failures relate to the use of public address systems. Will my hon. Friend address himself to those problems and do something about them?
    Mr. Freeman: I shall certainly pass my hon. Friend's comments on to London Underground, which tries hard to meet quality targets. The east-west crossrail will bring substantial benefit to the Central line between Paddington and Liverpool street stations at the end of the decade, when it is completed. I hope that my hon. Friend will join me and my hon. Friend the Member for Ealing, Acton (Sir G. Young) in inaugurating, in Ealing, the new anti-graffiti paint that London Underground is shortly to introduce. The end of graffiti man is at hand.
    Mr. Tony Banks: Has the Minister seen the recent speculation in the press that due to a squeeze on London Transport, particularly as a result of the fall in the price in land, it will not be able to proceed with the Central line upgrading or the crossrail? Will he give an absolute assurance that both the improvements to the central line and those to Stratford railway station will go ahead?
    Mr. Freeman: I can give that assurance. The fall in property receipts, to which the hon. Gentleman rightly refers, applies not only to London Underground but to British Rail. However, it will not affect progress on the Central line or on the east-west crossrail which, as my right hon. Friend the Secretary of State said, will be financed in the conventional way, largely by Government grant.

    Suburban Railways
    Mr. Stern: To ask the Secretary of State for Transport what is his policy on investment to increase the use of suburban railway lines.
    Mr. Parkinson: I am always ready to approve investments in local rail services that are financially sound or can be justified by cost-benefit criteria.
    Mr. Stern: I am grateful to my right hon. Friend for that reply. May I draw his attention to the lines that run from Severn Beach to central Bristol, through Avonmouth and Shirehampton in my constituency? Does not study of that line show that what the area needs is not so much investment as a willingness by British Rail to publicise the existence of the line and protect the frequency of services, which could do so much to get people to their work on Severnside and in central Bristol without using the roads?
    Mr. Parkinson: The problem with the line in question is that it is using out-of-date, worn-out rolling stock because of late deliveries from manufacturers, running up to two years late, of new stock which would replace the old and unreliable stock. One of the reasons why the service is not marketed actively is that British Rail regards it as unreliable and is determined to get a better service before it starts encouraging people to use the line.
    Mr. Doran: This is the fifth successive question dealing with transport in the south of England. People in the north-east of Scotland react with a hollow laugh—
    Mr. Speaker: Order. There are other suburban railways in Scotland.
    Mr. Doran: I had always assumed that Bristol was in the south.
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    People in the north-east of Scotland react with a hollow laugh when we hear all these discussions about transport problems in the south and promises from the Secretary of State of huge sums of money to improve them. Is the right hon. Gentleman aware that there is a genuine fear, particularly in the Grampian region, that we shall become isolated because of our transport problems? British Airways has refused to give us a shuttle service, British Rail has refused to invest a meagre £80 million in electrifying the east coast line, and all the 17 miles of single carriageway between Aberdeen and Rome are located between Aberdeen and Dundee. When will there be a real direction in transport policy to help not just the south but the rest of the country?
    Mr. Parkinson: As the hon. Gentleman knows, roads north of the border are the province of the Scottish Office. However, I can deal with his point about the railways. We shall be completing the electrification of the east coast main line through to Edinburgh. The new 158 services were introduced between Glasgow and Edinburgh, the first of those services using air conditioned, modern diesel units. ScotRail has had at least its share—most people south of the border would say more than its share—of investment. As to the roads connecting Scotland——
    Mr. Speaker: Order. The question is about railways.
    Mr. Parkinson: I will just make this last point. I hope that the hon. Gentleman is pleased that the A1 is to be upgraded to motorway standards.
    Sir David Mitchell: Is my right hon. Friend aware of the widespread welcome for his announcement that British Rail will have the go ahead to put new rolling stock and new trains on the services from Exeter, Salisbury and Andover to Waterloo? Does he accept that that announcement is long overdue and that British Rail should have brought proposals forward much earlier?
    Mr. Parkinson: I am glad that my hon. Friend is pleased about the announcement. He has led the charge for that investment. I am pleased to tell him that as the new trains come forward for delivery, and as the 18-month gap is closed, we expect to see some of the regions with more new stock and a great improvement in the service.
    Mr. Snape: Is the Secretary of State aware that, whatever he says publicly, the reality of travel on Britain's suburban railways is a saga of delays, cancellations, overcrowding and high fares? None of his speeches, plans and promises have made any difference to that. Does he accept that after the Government's 11 years in nominal charge of British Rail and nearly five years in charge of the London Underground system, none of us is surprised that he did not get a standing ovation at the Tory party conference? If he does not put up some money instead of just wind and talk, he will be lucky to get a clap next year.
    Mr. Parkinson: As one compliment deserves another, I congratulate the hon. Gentleman on not being elected Opposition Chief Whip. The figures may disappoint him, but I should like him to listen to them. Since we took over in 1979, £6,000 million has been invested in British Rail. A further £4,000 million is to be invested in the next three years, so cheer up—good news is on the way, the service will get better and the hon. Gentleman will become redundant.

  DUCHY OF LANCASTER

    Bolton
    Mr. Thurnham: To ask the Chancellor of the Duchy of Lancaster when he next expects to visit Bolton.
    The Chancellor of the Duchy of Lancaster (Mr. Kenneth Baker): I have it in mind to visit Bolton next year, but no plans have been drawn up at present.
    Mr. Thurnham: When my right hon. Friend visits Bolton, will he meet the villagers of Affetside? They would be pleased if details of any future local government boundary changes were pinned up in the pub so that they might know about them.
    Mr. Baker: My hon. Friend will be aware that my responsibilities as Chancellor of the Duchy of Lancaster do not extend to the Boundary Commission for England. I understand that the commission has made a proposal which would involve 600 people being transferred from my hon. Friend's constituency of Bolton, North-East to the constituency of Bury, North. As is usual in these matters, strong feelings are aroused. I am sure that the commission will take note of the local reactions to its proposals and the reasons for them, both historical and practical. I would hope that any changes will be taken only after careful consideration and widespread consultation.
    Dr. Cunningham: When the Chancellor next goes to the north-west, will he apologise to the head teachers of independent schools and to the parents of children on assisted places schemes for inviting the head teachers, in a letter from Conservative central office, to break a confidence and identify, for the use of the Conservative party, the names and addresses of parents who have children on assisted places schemes? Is not that a flagrant breach of the confidentiality associated with these matters and should not he withdraw the letter now?
    Mr. Baker: What I have done is within the powers of any person to do. I wanted to highlight for the parents who send their children to private schools the fact that the Labour Opposition wish to withdraw the assisted places scheme, which benefits about 27,000 pupils. That would be extremely damaging. The Labour party wants to withdraw help from those pupils who deserve it most and to undermine private schools altogether. It wishes to restrict choice by abolishing grant-maintained schools and city technology schools. That is the negative education policy of the Labour party.

    Official Transport
    Mr. Tony Banks: To ask the Chancellor of the Duchy of Lancaster how much has been spent by his office on his official transport in the current financial year.
    Mr. Kenneth Baker: In the current financial year my office has spent £21,060 on official transport.
    Mr. Banks: The Chancellor will know that in the past year he spent £34,000 on official transport. How can he possibly justify that expenditure when he has said that he spends about a quarter of his time on official Duchy business? Is not this an example of the taxpayer subsidising the right hon. Gentleman's increasingly ineffective activities as chairman of the Conservative party? Would
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    not it be better for Conservative central office to reimburse the money that has been taken? Finally, if the right hon. Gentleman intends to continue using his official car as chairman of the Conservative party, may I suggest that he has a commode inserted in the back seat?
    Mr. Baker: All my Conservative party engagements around the country are paid for by Conservative central office. An official car is provided for my official business as Chancellor of the Duchy of Lancaster and as a member of the Cabinet. There is no greater expert on official transport than the hon. Gentleman, who is a former chairman of the Greater London Council and had an official car which I am sure he did not use for party purposes.
    Mr. Yeo: Will my right hon. Friend devote as much official time as possible during the next year to visiting schools and warning those parents currently taking advantage of the assisted places scheme about the Opposition's intentions?
    Mr. Baker: I should be delighted to do so, not only in my capacity as a Cabinet Minister, but as chairman of the Conservative party. I am surprised that the hon. Member for Copeland (Dr. Cunningham) raised the issue at all, as it exposes how negative the Opposition's education policy is and how damaging it will be. They talk about choice for parents, but all that they believe in is reducing choice for parents.

    Magistrates
    Mr. Pike: To ask the Chancellor of the Duchy of Lancaster whether he proposes to visit north-east Lancashire to discuss the appointment of magistrates.
    Mr. Kenneth Baker: I recently discussed the matter at a meeting of the south Sefton advisory committee on Merseyside. I have no plans to visit at present.
    Mr. Pike: Does the right hon. Gentleman recognise the growing concern of many people in Lancashire and the north-west that magistrates benches are increasingly less representative of the communities that they serve? Is not it time that they were made more representative of local communities?
    Does the right hon. Gentleman accept that many magistrates are becoming increasingly concerned about having to apply the poll tax legislation and liability orders against people in the north-west who they know cannot afford to pay the poll tax?
    Mr. Baker: The hon. Gentleman's first point raised a serious matter. I am concerned that there should be proper representation on the magistrates bench, covering all parties and all strata of society. My advisers and I are anxious to ensure that that happens.
    With regard to payment of the community charge and the role of the magistracy, I remind the hon. Gentleman that according to a survey last week by the Institute of Revenues, Rating and Valuation, district councils received payment from 87 per cent. of those required to pay the community charge. The figure would be higher if some Labour Members of Parliament, Members of the European Parliament and councillors would also pay up. I understand that five Labour councillors in Burnley are refusing to pay, and that only last week a Member of the European Parliament had to be ordered by Accrington

    15
    magistrates to pay his fair share towards the cost of local services. Many people in Burnley are paid a great deal less than a Member of the European Parliament, yet they have to subsidise his non-payment.
    As for Labour Members of Parliament who joined the poll tax demonstration in London last Saturday, the hon. Member for Copeland (Dr. Cunningham) claims that there is no support in the Labour party for non-payment campaigns, so which is the true voice of the Labour party—the empty rhetoric of the Opposition Front Bench or the rabble-rousing activities of Labour Members of Parliament on Saturday?

  PUBLIC ACCOUNTS COMMISSION

    Commission Meetings
    Mr. Allen: To ask the Chairman of the Public Accounts Commission when he next expects the Public Accounts Commission to meet.
    Sir Peter Hordern (Chairman of the Public Accounts Commission): No date has yet been fixed for the next meeting of the Commission, but I expect that it will take place in December.
    Mr. Allen: Is the hon. Gentleman aware of the tremendous work of Nottinghamshire county council in attracting industry and other bodies, including the Inland Revenue, English Heritage and Toray, to relocate to its area? At the next meeting of the Public Accounts Commission, will the hon. Gentleman discuss the possibility of the National Audit Office also seeking to relocate in the Nottinghamshire county council area?
    Sir Peter Hordern: The hon. Gentleman will be glad to know that the Comptroller and Auditor-General has it in mind to move some of the functions of the National Audit Office to regional offices. I understand that he is planning to do so to some considerable extent to the north of England, and also to the west country, but I cannot help the hon. Gentleman as to whether any relocation will be to Nottinghamshire.
    Mr. Latham: When considering salaries paid at the National Audit Office, will my hon. Friend and the commission bear in mind that it is probably the only branch of the public service that makes a profit for the taxpayer by identifying instances of waste and inefficiency in other Departments?
    Mr. Hordern: I am grateful to my hon. Friend for that comment. The National Audit Office has to recruit from the market generally and cannot be tied to a rigid salary structure imposed by anyone, even the Government.
    Mr. Campbell-Savours: I recognise the right of journalists to publish any material that comes their way if they believe publication to be in the public interest, but will the Public Accounts Commission nevertheless wholeheartedly condemn the activities of hon. Members and others who leak the reports of Select Committees and undermine the work of those Committees?
    Mr. Hordern: So far as I know, there has been no leak of any kind from the Public Accounts Commission. Perhaps our affairs are not considered sufficiently important or newsworthy. In any event, I think that this is probably a matter for the Committee of Privileges.

  DUCHY OF LANCASTER

    Written Questions
    Mr. Winnick: To ask the Chancellor of the Duchy of Lancaster how many written questions he has answered since he last answered questions in the Chamber.
    Mr. Kenneth Baker: Three, Sir.
    Mr. Winnick: That does not seem very many. Is the right hon. Gentleman aware that he appears to have become the Prime Minister's fall guy in all the Government's present difficulties? Is he happy with that role, or does he fear that it will not be long before Mr. Ingham starts a whispering campaign against him? Many of the right hon. Gentleman's former Cabinet colleagues know full well how Mr. Ingham works in this regard.
    Mr. Baker: The hon. Gentleman should know that I am very happy in my work, and that I intend to preside over a campaign in which he will lose his seat in Walsall, North just as he lost his seat in Croydon, North.

  HOUSE OF COMMONS

    Bicycle Mileage Allowance
    Mr. Tony Banks: To ask the Lord President of the Council if he will bring forward proposals for a bicycle mileage allowance for Members.
    The Lord President of the Council and Leader of the House of Commons (Sir Geoffrey Howe): The Government have no such plans at the moment. However, both logic and common sense give some support to the idea. I shall therefore arrange for it to be examined.
    Mr. Tony Banks: That is an excellent idea. In view of the cost of the Chancellor of the Duchy's car, perhaps the Lord President should suggest that he take up bicycling—although, knowing his right hon. Friend, it would probably be a tandem with a member of the working class struggling to pedal at the front.
    I am grateful to the Lord President for his answer. He must be aware that civil servants receive the allowance, so it is surely appropriate that Members of Parliament should receive it as well. Bicycling is both health-giving and environmentally friendly. I can see the Lord President now, cycling around London like the clappers with his clips and tin helmet. It will, indeed, be a good thing for Members of Parliament to receive this allowance.
    Sir Geoffrey Howe: The hon. Gentleman is deploying his rhetoric against an open door. I have noted that civil servants enjoy the allowance and that to grant it to Members of Parliament would be an environmentally-friendly gesture. Only a handful of our colleagues currently take advantage of the two-wheeled vehicle, but no doubt more will follow their example if I ensure that the matter is examined.
    Mr. Dickens: Is it possible that the hon. Member for Newham, North-West (Mr. Banks) has forgotten his days as chairman of the GLC, when he drove in a palatial car at the ratepayer's expense? Perhaps he now wants to pedal a cycle at the taxpayer's expense.
    Sir Geoffrey Howe: Perhaps it is as a consequence of being deprived of his former office that the hon. Gentleman has adopted a more modest means of transport.
    Dr. Cunningham: While we are discussing allowances, may I ask whether the Leader of the House saw yesterday's "Insight" articles about the avoidance of taxation—on a huge scale—by very wealthy members of society? As he is responsible for the legislative programme, will he at least hint that this loophole will be closed in the Queen's Speech?
    Mr. Speaker: Order. It would take a considerable stretch of the imagination to relate that question to the subject of mileage allowances for right hon. and hon. Members.

    New Parliamentary Building
    Mr. Harry Greenway: To ask the Lord President of the Council how many offices, bathrooms, bedrooms, cloakrooms, shops and recreational facilities are expected to be available in the new parliamentary building; when phase I will be available to hon. Members; and if he will make a statement.
    Sir Geoffrey Howe: The main facilities in phase 1 will include offices for 60 right hon. and hon. Members and office space for 100 secretaries, a substantial part of the Library, catering facilities, and two small shops. Present forecasts suggest that right hon. and hon. Members will be able to move into phase 1 not later than the next summer recess. The House should before long have an opportunity to consider the initial design brief for phase 2. The New Building Sub-Committee is drawing up proposals, which it hopes to place before us during the forthcoming Session.
    Mr. Greenway: Can my right hon. and learned Friend say what the two small shops are to sell? Will they include House of Commons goods such as humbugs and fudge? As chairman of the parliamentary friends of cycling, may I ask my right hon. and learned Friend to reconsider the absence of any recreational facilities as part of phase 1? If we cannot have an indoor hockey pitch, perhaps there could be squash courts, to keep right hon. and hon. Members fit for cycling—or is my right hon. and learned Friend afraid that that might lead to too many by-elections?
    Sir Geoffrey Howe: My hon. Friend always makes imaginative suggestions on these occasions. He will recollect that the gymnasium is being redeveloped, is to re-open in larger premises as a consequence of changes made during the Recess.
    As to the retail facilities, phase 1 will include a bookshop selling Her Majesty's Stationery Office publications and other items of parliamentary interest. That bookshop will be open to the public, as will two small shops in Bridge street. There will also be a kiosk and shop inside the phase 1 building selling light refreshments, groceries and other miscellaneous goods.
    Mrs. Dunwoody: Will the Leader of the House give an undertaking that the new building will include suitable accommodation for the catering staff? It is disgraceful that the House of Commons, which makes laws about health
    18
    and safety, should itself increasingly neglect its own staff, who are not provided with suitable accommodation in which to change or take rest periods.
    Sir Geoffrey Howe: I cannot promise the hon. Lady that phase 1 will address that particular problem The specifications were drawn up a number of years ago, and there is a limit to the flexibility that they can embody. I agree with the hon. Lady that phase 2 should take account of considerations such as those that she has mentioned. They and many similar propositions deserve more sympathetic and effective consideration in the management of this place. That is one reason why the Commission was pleased to order the Robin Ibbs review of the entire way we manage these premises.
    Mr. Holt: Will my right hon. and learned Friend note that security in this building and in the whole Palace of Westminster is very poor? If we are to have shops and other amenities which will be open to the public, will he ensure that there are ample opportunities to screen everyone who uses them and everything that they take in and out with them? Only thus can we ensure that there is no repeat of the kind of recent incident whose victim was the subject of a memorial service that some of us attended earlier today.
    Sir Geoffrey Howe: I appreciate that my hon. Friend is concerned about security matters, for very understandable reasons and you, Mr. Speaker, are aware that it is a topic that is never far from the minds of those of us who have responsibility for such matters. The shops that will be open to the public will not be part of these premises as such. The amenities that will be available to right hon. and hon. Members and to staff will be designed to satisfy a long and frequently expressed need to meet certain minimal requirements at all hours of the day and night. However, even in respect of those facilities, we shall take account of security considerations.

    Register of Members' Interests
    Mr. Skinner: To ask the Lord President of the Council whether he will propose new rules for the Register of Members' Interests; and if he will make a statement.
    Sir Geoffrey Howe: I myself have no proposals to make at this stage.
    The Select Committee on Members' Interests has, however, undertaken to report in the near future on the resolutions agreed by the Defence Committee in relation to the declaration of interests of Chairmen and members of Select Committees; to conduct a broader review of registration and the declaration of interests; and to consider whether to define the requirements of the register more precisely, so that Members' interpretations of the rules would be more consistent and their entries more comprehensible.
    Mr. Skinner: Is not the parliamentary register far weaker than that applying to local authority councillors? Is not it a scandal that, at a time when 19 Tory ex-Cabinet Ministers in the past 11 years have picked up 59 directorships between them, we do not have an appropriate register to deal with the matter? Surely it is time that we had not just a register but a system of full-time Members of Parliament with one job and one job only? It seems strange to many people outside the House

    19
    that Members of Parliament cannot get by on £26,000 per year when many old age pensioners and others do not have two ha'pennies to rub together.
    Sir Geoffrey Howe: As so often, the hon. Gentleman starts off by referring to a topic with which the House as a whole is concerned—the management and consideration of Members' interests, which is being considered in the ways that I have described—but goes on to destroy what began as a tolerable case by putting his points so intemperately as to lose any credibility whatever.

    Recycled Paper
    Mr. Tredinnick: To ask the Lord President of the Council, pursuant to his answer to the hon. Member for Birmingham, Erdington (Mr. Corbett) of 16 July, Official Report, columns 430–31, if he will make a statement on the progress of the experiment in the use of recycled paper for House of Commons stationery.
    Sir Geoffrey Howe: A selection of recycled stationery is now available from the Serjeant at Arms stores. The Accommodation and Administration Sub-Committee will
    20
    be considering the results of this experiment in due course. My own view is that we should seek to proceed on the assumption that recycled paper will become the norm.
    Mr. Tredinnick: I am grateful to my right hon. and learned Friend for his reply. I am sure that the decision to offer recycled paper has been widely welcomed in the country because it shows that the House is setting a good example. Will he give an assurance to both sides of the House that the stationery will be available in all sizes so that the experiment can be conducted properly? Can he give some indication of hon. Members' response to this initiative and can he say what initial demand appears to be?
    Sir Geoffrey Howe: I have some sympathy with my hon. Friend's point of view. He will recollect that the decision taken by the Accommodation and Administration Sub-Committee on 21 May this year was to proceed on an experimental basis along the lines that I have described. As I said in my original reply, I should like us to proceed to a more general basis than that, but we shall have to await the first report on the experiment. I shall take into account the matters that my hon. Friend has raised.

Points of Order
3.33 pm
Mr. Max Madden: On a point of order, Mr. Speaker. You will recall that I have been in correspondence with you in your capacity as president of the Commonwealth Parliamentary Association about the monitoring of the elections in Pakistan, which are due to be held on Wednesday this week. You also know that concern has been expressed about the way in which meetings and rallies of political parties in Pakistan, especially the Pakistan People's party, have been banned, and about the way in which the judicial process seems to be manipulated to hamper certain politicians and parties.
Would it be possible for the Commonwealth Parliamentary Association to prepare a report on the way in which the elections have been conducted, as I understand that British diplomats from Islamabad are monitoring the conduct of the elections? It is important that the House has access to full information. In your capacity as president of the CPA, would you agree to ask for a report to be prepared?
Mr. Speaker: When I received the hon. Member's letter about this matter, I got in touch with the Commonwealth Parliamentary Association. I am sure that the executive officers of the CPA will have taken note of what he has said.
Mr. Simon Hughes: On a point of order, Mr. Speaker. Is it within your power to protect Members interests in the following respect?
Over the weekend I had occasion to intervene with the immigration authorities on behalf of a constituent who faced deportation. As you will remember, the rules have changed in recent years and some powers are given to officials rather than to Ministers or their private offices. However, for some time yesterday evening the appropriate duty officer was not available, he was taking a break—and of course people must have breaks. Later in the evening no contact could be made with the Minister's private office. Only as a result of the extremely helpful attitude of a senior immigration official was my constituent taken off the aeroplane, although there had been an entirely appropriate request—any hon. Member could have done the same—for intervention to allow consideration of the case for deportation.
Will you, Mr. Speaker, please alert the authorities and the Home Office to the concern that I think you would express on behalf of all hon. Members, that at all times there should be an immediately appropriate channel so that we may communicate and make representations, as we were assured that we should be able to do?
Mr. Speaker: I cannot see that that is a matter for me. I sympathise with the hon. Gentleman, but I have never experienced any problem concerning my constituents with the new regulations. Apparently, contact was eventually made with the immigration officials in this case. I am sure that what has been said will have been noted by Ministers.

Orders of the Day
  Employment Bill
  Lords amendments considered.
  Employment Bill
    Clause 1

      REFUSAL OF EMPLOYMENT ON GROUNDS RELATED TO UNION MEMBERSHIP
      Lords amendment: No. 1, in page 2, line 16, after "employment" insert "of any description".
      3.35 pm
      The Parliamentary Under-Secretary of State for Employment (Mr. Eric Forth): I beg to move, That this House doth agree with the Lords in the said amendment.
      Mr. Speaker: With this it will be convenient to take Lords amendments Nos. 2, 9, 10 and 11.
      Mr. Forth: All the amendments that the House is to consider were approved by all sides in another place. It will, therefore, perhaps be for the convenience of hon. Members if I suggest that as all the amendments either follow from issues raised by the Opposition during the passage of the Bill in this House and in another place, or are otherwise entirely consequential or technical. they should be dealt with briefly. Unless Opposition Members or any of my hon. Friends ask me to do so, I do not propose to speak at length on them. The exception is Lords amendment No. 7. I should like to say a few words about the new clause. The House will want to hear a brief explanation of the background to that new clause and why I shall ask the House to support its inclusion in the Bill.
      I am conscious of the fact that I am taking up the excellent work done on the Bill by my hon. Friends the Members for Enfield, North (Mr. Eggar) and for Teignbridge (Mr. Nicholls), whose absence I regret., but I hope that we shall see him soon. I shall do my best to follow in their eminent footsteps and to do justice to all the work that they did on the Bill prior to this stage.
      Mr. Tony Lloyd: May I place on record recognition of the debt that the House owes to my hon. Friend the Member for St. Helens, North (Mr. Evans), who drew the Government's attention to the drafting defects? The Opposition accept these amendments. They were accepted, as the Minister pointed out, in another place as an improvement to the Bill. My hon. Friend the Member for St. Helens, North agrees, so we do not intend to oppose them.
      Nevertheless, it is a shame—a fact that the Minister should take on board, new to his post though he is—that the amendment contains a major defect. The Government maintain that it confers equity between trade union and non-trade union members. However, because the Government have failed to act against the blacklisting of trade unionists, the protection offered to trade union members is severely weakened. Nevertheless, as I have already pointed out, the Opposition do not intend to resist these amendments.
      Question put and agreed to.
      Lords amendments Nos. 2 to 4 agreed to.

    Clause 6

      RESPONSIBILITY OF TRADE UNION FOR ACTS OF OFFICIALS, &C.
      Lords amendment: No. 5, in page 7, line 19, leave out "six" and insert "three".
      Motion made, and Question proposed, That this House doth agree with the Lords in the said amendment.—[Mr. Forth.]
      Mr. Tony Lloyd: We welcome the fact that the Government were persuaded by the amendment moved by Labour peers, but the clause is probably one of the more obnoxious features of the Bill, as it operates against trade unions and, taken as a whole, their members. It must not be construed that, because we are happy with the amendment, we are happy with the clause. However, the amendment is an improvement because at least the Government have recognised the need to move from six months to the more acceptable period of three months.
      Question put and agreed to.

    Clause 7

      CALLING OF INDUSTRIAL ACTION WITH SUPPORT OF BALLOT
      Lords amendment: No. 6, in page 8, leave out lines 28 and 29 and insert
      "ballot ceases to be effective in accordance with section (Period after which ballot ceases to be effective) below."
      Mr. Forth: I beg to move, That this House doth agree with the Lords in the said amendment.
      Mr. Speaker: With this, it will be convenient to consider Lords amendments Nos. 7 and 16.
      Mr. Forth: This is the matter on which the House should dwell briefly, and, as it is a new development since the Bill was in another place, I should place its background on record.
      During debates in this House, and in another place, the Government always made clear our willingness to consider changes to the law on union industrial action ballots which could allow a union, in certain circumstances, to make its first call for industrial action more than four weeks after the date of a ballot. We recognised the concerns that had been expressed about the way in which court proceedings, or an injunction which was eventually lifted, might create a situation in which it might be reasonable not to expect a union, as a matter of course, to re-ballot its members even though its first call for industrial action would take place more than four weeks after a ballot.
      However, we also made it quite clear that the crucial principle to be preserved in such circumstances was that no such extension should be allowed if it could not be assumed that the ballot continued to represent the views of relevant members. While making such a change to the present law, the amendments also preserve this principle. To understand how they would work, it may be helpful if I describe their provisions in a little more detail.
      Amendment No. 6 is a technical requirement. It replaces a reference in clause 7(3)(b) with words stating that the call for action, and industrial action itself, must take place before the
      "ballot ceases to be effective in accordance with"
      the new clause proposed by amendment No. 7.
      24
      Amendment No. 7 sets out the provisions of new clause 8. That clause provides that a ballot will normally "cease to be effective" for relevant purposes at
      "the end of the period of four weeks beginning with the date of the ballot".
      That means that if a ballot produces a majority in favour of industrial action, it will be assumed, as a matter of course, that the result continues to reflect members' views for up to four weeks after the date of the ballot.
      However, the remaining provisions of the new clause allow for the period of four weeks to be extended in certain circumstances. Those are where the calling or organising of industrial action is "prohibited" for the whole, or part, of the four-week period following the date of the ballot under a court order which subsequently lapses or is discharged, or by virtue of an undertaking given to a court from which the person concerned is subsequently released. In such a case, the trade union may apply to the court for an order providing that the period during which the prohibition has effect shall not count towards the four weeks.
      In other words, the new clause recognises that, in certain circumstances, there may be no need for a union to hold another ballot. In relevant circumstances, a union may have the "privilege" of first calling for industrial action to which a ballot relates more than four weeks after the date of the ballot without having to re-ballot its members.
      The new clause solves the difficulties that were highlighted in the other place and goes all the way to meeting the points that were made there. I hope that the House will see it in that way and therefore will support the amendments.
      Mr. Tony Lloyd: The Minister bears no responsibility for this because he was not present in Committee or on Report. Clause 7 was passed on Report, and in reality there was little debate on this important new clause, the Government having failed to anticipate the need for it in Committee.
      Clause 7 as drafted is objectionable. It is unacceptable to the Opposition because it makes it extremely difficult for legitimate industrial action to take place. The Minister would be wrong to think that the fact that we accept the new clause as constituting an improvement means either that we endorse clause 7 generally or that we consider the present proposal to be the best available. The new clause has not been debated in this place, and I think that I am right in saying that it was not introduced in the other place until Report, so even there the debate was fairly limited.
      3.45 pm
      We should pay tribute to those in the other place who, on a number of occasions, sought to persuade the Government of the need to recognise the defects in the existing balloting procedures. The issue first arose when the Transport and General Workers Union found itself in difficulty during the docks strike. The union balloted its members properly and in accordance with existing statute. Its members voted overwhelmingly in favour of industrial action. Then, as a delaying tactic—it was no more than a tactic—the employers took the TGWU to court and sought to use tortuous legal processes and the court mechanism to frustrate the democratic will of the TGWU's members, itself enshrined in legislation introduced by the Government.

      25
      Once the court process had been gone through, the four-week period specified in the legislation was up and the original ballot was deemed no longer valid. The union was then forced to go to all the expense and inconvenience of consulting its members again. Anyone who has any experience of industrial relations, however peripheral, will realise that the trade union and its members were thus put at a serious disadvantage, and that had been the employers' intention in using the court process. To that extent, at least, they succeeded in frustrating the interests of the TGWU's members.
      Against that background, the new clause represents an improvement. It seeks to override the automaticity of the four-week period by putting an end to the validity of a ballot.
      I hope that the Minister will comment in detail, as this is the first opportunity that we have had to probe the Government's intentions. We welcome the fact that a ballot will no longer automatically be deemed invalid at the end of the four-week period, but, none the less, the new clause leaves considerable discretion out of the hands of the trade union members and with the unelected and undemocratic courts system and those who sit in judgment.
      I draw the Minister's attention in particular to subsection (4)(b) of the new clause, which lists the circumstances in which the court should not make an order allowing the original ballot to be considered a mandate for industrial action. Subsection (4) provides that the court shall not make such an order if it appears
      "that an event is likely to occur as a result of which those members would vote against industrial action if another ballot were to be held."
      On what basis can the unelected judges of the British courts divine what the members of the TGWU—or any other union—are likely to believe at any given time? Nothing inclines me to the view that the judges are in a position to make a decision about the likely voting intentions of the members of a trade union.
      This is not a trivial matter. Had the new clause come before the Committee, which took some time to examine the Bill, many of its provisions would have been subjected to considerable scrutiny. Because of the procedures that apply this evening, we are forced to consider the new clause en bloc. It is impossible for us to vote against it because it provides some benefits for trade union members. Its overriding benefit is that the four-week period will not apply automatically.
      Mr. Dennis Skinner: My hon. Friend said that automatic closure would not apply and that the matter would go to court. I take it that he is saying that, according to the new clause, the union would have to take the matter to court and spend a lot more money trying to get a further delay if that was possible. What would happen if the union ran into a judge like Justice Harman, who did not even know who Gazza was? What chance would the union have if it ran into a bloke like him rather than someone who knew something about trade unions? Someone is going to be stuck up there like Lord Almighty and he will have to adjudicate on a very important industrial matter. As a result of the new clause, a lot of money could be spent and at the end of the day the trade union might still face the same predicament as it faced before it went to court.
      Mr. Lloyd: My hon. Friend has raised an important point. Once court proceedings are under way, we are all aware who will be the ultimate beneficiaries: they will be the members of one of the more efficient trade unions in Britain, the national union of barristers and solicitors, who generally manage to make a fair amount out of court proceedings.
      There is considerable concern that trade union members would have to pay for the legal procedure. I draw the attention of my hon. Friend the Member for Bolsover (Mr. Skinner) to the fact that there is no appeal against a court decision. If the judges, in their wisdom, decide that as working class judges they would have voted against industrial action and therefore members of the trade union would have felt the same way, there is no mechanism for an appeal against the court's decision. What the court says goes, and if the court says that the union has had its four weeks, that four weeks will have well and truly been had.
      Those concerns lie at the heart of the new clause. We must accept the new clause as a whole or reject it. Although it is defective, it is better than the former provision according to which after four weeks there was no possibility of a ballot maintaining its validity. Even with regard to cost, time and the overwhelming discretion of the court, the new clause offers something marginally better than the former provision.
      The Minister is new to his present post and I hope that he will consider my points. We are told that there are areas of employment law which the Secretary of State is still considering. He may feel that it is prudent to rattle a few skeletons, and the Bill was introduced to put the trade union movement on the defensive. The Government have failed to do that with this Bill. If there is to be another Employment Bill next Session, I hope that the Minister will dwell on the points that have been raised about this new clause with a view to taking remedial action to improve the provision.
      Mr. David Madel: The hon. Member for Stretford (Mr. Lloyd) has raised an important point about subsection (4)(b) of the new clause, which refers to
      "an event … likely to occur as a result of which those members would vote against industrial action".
      Might such an event be the probable reinstatement of someone whose dismissal had caused the industrial action in the first place or, in the case of a wage demand, the announcement by an employer that it was willing to reconsider and increase the offer to the employees?
      Subsection (5) states:
      "No appeal lies from the decision of the court to make or refuse an order under this section."
      Does that include no appeal to the employment appeals tribunal, which is often seen and can be used as the last resort in industrial relations matters?
      Mr. James Wallace: Amendment No. 7 is the most substantive amendment that was carried in another place. Although I certainly would not wish to vote against the amendment, it underlines the fact that, in trying to bring more and more legalism into this aspect of the law, in an effort to take the sting out of unofficial disputes, more problems will be created than solved. In some circumstances, the amendment could lead to unofficial disputes becoming official, and being supported by a ballot to try to get out of some of the legal difficulties that are now being put in the way. Much trust

      27
      has been put into the speed of the judicial process. Subsection (6) of the new clause makes it clear that, unless an application is dealt with within 12 weeks, even after 12 weeks, regardless of what the subsection or the court may say, the ballot ceases to be effective.
      Assuming that a union is not able to get its application in until, say, the seventh week after the date of the ballot, one hopes that the courts will be up to it to make sure that the application is heard as quickly as possible so that the application is not defeated by the expiration of time.
      My next point was dealt with at some length by the hon. Member for Stretford (Mr. Lloyd) and was referred to by the hon. Members for Bedfordshire, South-West (Mr. Madel) and for Bolsover (Mr. Skinner). It relates to the necessity for a union to apply to the court. The circumstances set out in the amendment will allow the court not to make an order allowing an extension of time. One wonders why it would not have been possible, after the order which was prohibiting the union from calling for industrial action, for the time to be added automatically. Expense will be incurred through having to go to court.
      It is important also to concentrate on the fact that the court will be allowed not to make an order
      "if it appears to the court—

      (a) that the result of the ballot no longer represents the views of the union members concerned, or

      (b) that an event is likely to occur as a result of which those members would vote against industrial action if another ballot were to be held."

      I take the point made by the hon. Member for Bedfordshire, South-West that some clear event might have taken place—for example, that the original demands promoting the call for industrial action had actually been met. That would be obvious. Hon. Members would accept that many other factors can come into play that are not quite as obvious in their impact on union members as that factor would be. That seems to be committing a great deal to judicial knowledge.
      As the hon. Member for Bolsover pointed out, it would appear that a member of Her Majesty's judiciary was not aware of who Paul-Gazza-Gascoigne is. During my own student days, a judge once asked, "Who are the Beatles?" In difficult aspects of industrial relations, it is too much to expect so much to be within judicial knowledge, or for judges, even if they have the benefit of statements by barristers or advocates appearing before them, to interpret them and make decisions upon them.
      In matters of procedure, will information be made available to the court through ex parte statements on behalf of the union and employers, or will there be scope for evidence to be led with regard to what the current views of union members are or what they are likely to be, or what events are likely to occur in the next few days? As the amendment improves the Bill, I shall not vote against it.
      4 pm
      Mr. John Bowis: I do not wish to delay the House, but I should like clarification on a couple of queries. Broadly speaking, amendment No. 7 is a sensible change which, I am sure, will be welcomed by hon. Members of all parties. I shall concentrate on the point that was raised by my hon. Friend the Member for Bedfordshire, South-West (Mr. Madel) and by Opposition Members. Clearly, circumstances can change and it is right
      28
      that the court should be able to take any change into account. The court is probably as good a judge of that as anybody, as long as the information is presented sensibly.
      To avoid endless legal arguments in the future, I seek clarification on the words "is likely to occur". Presumably they incorporate something that is occurring when the court is sitting, and not just a future change. What will happen if what is deemed "likely to occur" does not occur? Is there some way back to enable the status quo ante to be re-enacted?
      I apologise to my hon. Friend the Minister if this next point was raised earlier. It relates to the introductory section of the new clause, which was part of the old clause. I am referring to the phrase
      "at the end of the period of four weeks beginning with the date of the ballot."
      Perhaps my hon. Friend would clarify that, so that we can ensure that it does not provide scope for endless litigation or for endless lawyers' fees. Is the date of the ballot the date when the ballot starts or the date by which the last ballot paper must be received, because in practice ballots often take place on more than one date?
      Mr. Skinner: This is really a debate about class in our society. Here we are, once again, discussing in the last stages of our consideration of this Bill the way in which trade unions and their members are being treated by the Tory Government and the way in which the law is being used against them despite the fact that on most occasions the people in the City of London and the establishment do not have to put up with such laws.
      From the new clause it appears that the Government have decided that even in the courts it might be better if a little leeway were given. I am worried about the fact that, when a case gets to court, those who are running the outfit—85 per cent. of whom are from public schools and Oxbridge—will have a completely different view of trade unions and how they work. As my hon. Friend the Member for Stretford (Mr. Lloyd) has said, although the net result will be a marginal improvement—I have to agree with that, because that will probably be the case—we must wait and see what happens when a case goes to court. My chief worry is that if the first decision was set against a trade union in respect of the four weeks, and if it was decided that the ballot was all right and would have to stand, notwithstanding that there had been some difficulties, that might set a precedent for many other unions that might want to extend the time so that they would not have to hold another ballot. In such cases, the victory would be with the other side.
      Does the Minister believe that any further representations to a court would be varied as a result of the setting of such a precedent? We know that when a matter goes to court judges look back at what happened previously and use that as a pattern.
      In any case, I am disturbed by the way in which trade unions are always being attacked by the Government. The other day I was reading about Maxwell. Apparently, there was a discussion and ballot at the Derby County football club in which only two people spoke and voted in favour of Maxwell continuing at Derby because they said that he had his fingers in other pies, such as Tottenham. However, nothing happened. Apparently, somebody with a lot of money came along and put a stop to it, so that was the end of that. That is one side of business, but the people who are the wealth creators—the trade unionists—are continually

      29
      being told, "You must have a ballot for this, that and the other." They are dictated to by the Tory Government and their henchmen and women in the media, with the result that, once a result is found to be inadequate or only partly adequate to the Tories, they propose different provisions. As my hon. Friend the Member for Stretford said, in this case they are not too sure about whether they can sustain it in view of what has happened previously.
      I am also worried that, as my hon. Friend said, there is no appeal procedure against these decisions. It will be a tidy state of affairs if someone says to the courts, "We are making representations under the new clause passed at the last minute by people in the House of Lords and then verified in the House of Commons" but is told, "We are awfully sorry, but if you lose you cannot appeal." Why cannot trade unionists have a proper appeal procedure to enable them to challenge a decision?
      There are laws for trade unionists and laws for other people. Sir Jack Lyons is a current good example. He admitted, among all the other things, writing to the Prime Minister and God knows what else in the Guinness affair. He said that he had made £3 million out of that scandal. What was he fined?—£3 million. So it was not a bad day's work for Sir Jack Lyons. That will not apply to people taking part in industrial action, for example, trying to obtain more than 7 or 8 per cent. against the Government when the going rate is 10·9 per cent. Who knows, in a short time we may have inflation of more than 11 per cent. That is what the ballots are all about in the main. They are not about £3 million, as in the case of Sir Jack Lyons. They are usually about someone on £150 a week or less who is trying to keep up with the rate of inflation but is being hammered by the Government.
      The Government say that they have no incomes policy, but the incomes policy is contained in this legislation. Over the past 11 years, to hamper trade unionists in their attempts to keep up with inflation, the Government have introduced trade union laws backed by a massive dole queue. The dole queue is even greater now than it was in the early years when the Government brought in the most punitive legislation to force through their form of incomes policy. Today we are discussing the Government's latest attempts at an incomes policy. There will probably be another attempt in the next Session of Parliament.
      There have been 11 years of dirty work against the wealth creators of Britain—the people who work for a living, as opposed to those who do not. Those who do not are represented by the Establishment and all those people on the other side of the fence, in the Tory party—all the 200 Back Benchers who have outside jobs. They do not have any problems with ballots. All the jobs were itemised in The Observer magazine. Unfortunately, all the information is not in the Register of Members' Interests. Conservative Members are not subjected to ballots. They do not have to appear before judges. They will not be subject to new clauses or further legislation. These people can make money on the side by moonlighting. But woe betide someone working in a factory, school or some office somewhere trying to keep up with the rate of inflation, which the Government are supposedly trying to control.
      Mr. Wallace: What is the hon. Gentleman's view of his party's policy review, which does not seem to want to undo much of the so-called "dirty work" of the past 11 years?
      Mr. Skinner: If the hon. Gentleman had been listening on previous occasions, he would know that I believe that all the dirty work of the past 11 years should be undone by a Labour Government. He would also know that I believe that there is only one freedom at work. It is the freedom collectively to organise together to stop the bosses from exploiting, in this case, trade union members and would-be trade union members. It is as simple as that.
      In Labour's proposed new legislation there are some new rights, they tell me. I am not knocking new rights but merely saying that I want to see undone all the work that the Tory Government have done. When we get a Labour Government I shall remember what the hon. Member for Orkney and Shetland (Mr. Wallace) has said. There is half a chance—no more than that—that he will be returned. We might win the seat. If he comes back as a Liberal, or whatever may be the current name of his party, I shall call upon him to support in the Lobby those of us who want to overturn Tory legislation. The hon. Gentleman can have a word with his gaffer chap, Paddy Backdown, to see whether they will do that. The Liberals are handy at giving the impression that they are on everybody's side. In view of the hon. Gentleman's intervention, is the parrot twitching on trade union legislation? Has the Liberal party extended its great history of liberalism and freedom to the fact that there is only one freedom at work—the freedom for people to band together in trade unions and collectively organise? That is the great natural freedom from which I and every Labour Member have sprung.
      Mr. Richard Holt: Will the hon. Gentleman give way?
      Mr. Skinner: I give way to the bookie's runner.
      Mr. Holt: Does the hon. Gentleman agree that, if a person feels strongly enough about it, it is his right not to belong to a trade union and not to be blackballed from a firm because he wants to be an individual and not a member of a trade union? Would an individual have that right under your future Labour Government?
      Mr. Skinner: Not "your" Government. You mean the hon. Member for Bolsover. I know that you find some difficulty getting it out, and that applies to many hon. Members. There is a way of doing it and you should listen closely to the way that I deal with the matter. The hon. Member from up north, who represents Langbaurgh (Mr. Holt) —
      Mr. Tony Lloyd: The hon. Gentleman is not from up north.
      Mr. Skinner: That is right. He is a southerner who got a seat up north, but he will be replaced by a Labour Member at the next election. Somebody who is prepared to take an 8, 10, or 12 per cent. pay increase that has been gained by collective action should expect to be part of the organisation that won that increase. If he wants to be a freeloader and imagine that he is doing it on his own, he should have to pay any price arising from that action. He has the freedom to do what he wants, but he should be smart enough to understand that he will not get such an increase on his own. There are plenty of examples.
      Mass unemployment has been deliberately engineered by the Government to reduce the will of those who are engaged in collective action. The Tory Government brag about there not being many strikes. They purposely

      31
      created a dole queue of 3 million or more to try to reduce the number of strikes and the ability of people to organise. In 1989, unemployment dropped slightly and in one or two areas people manged to get a little bit above the odds. That applies to the National and Local Government Officers Association. Even the BBC got an extra 2 per cent. I am sure that the hon. Member for Langbaurgh is pleased about that.
      The Government are now pushing up unemployment and introducing other employment measures. That is what they have been about from the beginning. That is why I have opposed such Bills and why I call upon the next Labour Government to undo all this dirty work so that we may give freedom, which is limited, to the wealth creators collectively to organise to improve their lot. They have a hell of a long way to go before they catch up with the 19 ex-Tory Ministers who have lined their pockets with 59 directorships in the past 11 years. They will also have a big job to catch up with all the Tory Back Benchers who are making money on the side.
      I support the efforts of the wealth creators. This legislation is designed to stop their freedom and that is why we have opposed it from the beginning. My hon. Friend the Member for Stretford says that the new clause is a marginal improvement. I am worried that when the matter reaches the courts and the judges examine it they may set a precedent that will hamper us even more. I am pleased that the issue has been raised in this way because it gives us an opportunity to state a few things that will be important in the next five years when we have a Labour Government.
      4.15 pm
      Mr. Andrew Rowe (Mid-Kent): This is a useful debate, not just because it gives my hon. Friend the Minister an opportunity to explain what this clause means but because it gives us a chance to note something about the Labour party. Over the years that I have been in the House, it has made great play of the fact that it elects its party chairman and has claimed that that gives it an infinitely more representative chairman that has the Conservative party, which has an appointed chairman. It is valuable that a recent chairman of the Labour party, who was so clearly representative of the Labour party, has given us an exposition of his view that all the industrial and employment legislation of the past 11 years should be undone. I am sure that the public will be extremely reassured to know that that is the policy of the Labour party.
      Mr. David Winnick: My hon. Friend the Member for Stretford (Mr. Lloyd) gave a qualified acceptance of Lords amendment No. 7 because, he said, it is an improvement on the original. It says that a court may find
      "that the result of the ballot no longer represents the views of the union members concerned".
      How will a court determine this? The hon. Member for Mid-Kent (Mr. Rowe) mocked my hon. Friend the Member for Bolsover (Mr. Skinner), but the Labour movement has elections and the one thing that the Conservative party seems most reluctant to have is elections. The chairman of the Conservative party is certainly not elected and there is no balloting over
      32
      company contributions to that party. The board simply donates money and notifies the shareholders of what has happened—just like that.
      What worries me is that even when the Government pass legislation on balloting, and the processes set out in that legislation are followed, employers still have the whiphand in the workplace. I can give a demonstration of that and the Under-Secretary may wish to check with his officials about the letter that I wrote in August about a company in my constituency—John Stanley in Willenhall.
      In this company, several ballots were held in accordance with Government legislation. There was no doubt that they were carried out according to the law of the land. There were resounding majorities in favour of action being taken by the employees over a wage claim. As a result of those ballots a large number of people were dismissed and the dispute continues. I wrote to the Secretary of State asking him how he could possibly explain to the workers why, after they had observed the requirements of the legislation, they were treated in this way. The trade union official concerned, in Wolverhampton, which is near to my constituency, wrote to ask whether the Secretary of State or any of the Ministers in the Department of Employment could explain in person to the workers why they had been dismissed in this way, but the Secretary of State did not take up the invitation.
      There is a contradiction between the way in which the Government handle trade unions and their attitude to employers. That is why my hon. Friend the Member for Bolsover was right to say that there is inbuilt prejudice against trade unions. I can give an example of this. A Government Whip, the hon. Member for Staffordshire, South-East (Mr. Lightbown), who is not present—I am not saying anything about the Whip who is here—has been quoted in the local press as saying that he would rather see his factories closed than accept trade unions. That is one illustration of a member of the Government who has a strong prejudice against trade unions. Are we to believe that the Minister who is to reply is not hostile towards trade unions? We remember him as a Back Bencher, when he mocked and baited trade unions on numerous occasions. Can he be regarded as impartial and as someone who wants to see fair play between employers and employees? Of course not. The Minister is on the side of the employers. He probably does not believe that it is right that trade unions should exist in the first place. He is certainly not in favour of trade unions being able to organise industrial action.
      Perhaps I speak for myself, and my hon. Friend the Member for Bolsover will disagree with me, but I do not want to see industrial action at every opportunity when there are difficulties. I believe that it should be used as a weapon of last resort. If the right of industrial action is taken from the work force, however, a fundamental freedom is removed from it. It is interesting to bear in mind some of the first actions that have been taken in eastern Europe. The countries concerned have been doing away with the Communist dictatorships and introducing free speech and free Parliaments. One of their first actions was to permit free trade unions to be formed that would have the right to take industrial action. My right hon. and hon. Friends have been trying to maintain freedoms which were established over many years, which the Tory Government have undoubtedly undermined to a large extent.

      33
      There is so much hypocrisy surrounding these matters. Yesterday, The Sunday Times supplied us with information about the way in which the very rich try to evade their income tax liability. We read about offshore tax havens. I do not know whether there are any Conservative Members present now in the Chamber who take advantage of those loopholes, but one or two Conservative Members were named in The Sunday Times. The Government talk about the rule of law and fair play and say that trade union officials should not encourage their members to ask for too much in wage claims. The same Government tolerate loopholes that give the rich extra money. The rich have done so well out of the Government, yet, despite pressure from the Inland Revenue, it seems that over the past two or three years the Treasury has refused to take action to close such loopholes that they know exist. There is a contradiction when the Government talk about fair play yet allow loopholes to remain open for the rich. At the same time the Government try to undermine in every conceivable way the right of working people to organise effectively and to take industrial action.
      I have given an example of the way in which a group of employees in my constituency have been treated badly. Having listened to my hon. Friends the Members for Stretford and for Bolsover, I also take the view that there is not much purpose in voting against this provision. We must be under no illusion, however; the Government are dedicated to supporting only one part of society. Time and again they have helped the rich and the near-rich. Even their natural supporters, such as those at Eastbourne, have decided that enough is enough. They are fed up with the Government, as are millions of others who voted for the Conservative party at the general election. They have come to the conclusion that the Government do not represent ordinary people. Instead, they represent the rich or the well off. They will do everything possible for a small minority. That is why the Government have lost so much support in the past few years. I have referred to Eastbourne, but in the Mid-Staffordshire by-election the swing against the Government was even greater. That was in the region of which I represent part—the west midlands—and so I am pleased about that. It is clear—[Interruption.] The hon. Member for Birmingham, Northfield (Mr. King), who is making idiotic comments while sitting behind the Minister, will undoubtedly lose his seat at the next general election.
      Mr. Holt: I had no intention of contributing to the debate, but, having listened to some of the cant and nonsense from Labour Members, I find it necessary to intervene.
      I represent many working people. Most of the Conservative voters in my constituency are working people. Most of them would find much to resent in the remarks of the hon. Member for Walsall, North (Mr. Winnick), who I believe has never done a day's work and dirtied his hands. He is a Member of Parliament who has been thrown out on one occasion, and I think that he will be thrown out again.
      Reference was made to my antecedents. I think that the reference was prompted by the Opposition Whip. As usual, the hon. Member for Bolsover (Mr. Skinner) did not get his facts right. I was not born in the north of England, but I was educated there. My opponent during the general election was not born in the north of England either. He was born in India. I do not think that that
      34
      should necessarily disbar anyone from becoming a Member of Parliament. If candidates must live, work and have been born in the area, the Labour party's national executive committee will have great difficulty selecting a candidate for Eastbourne at the general election. It threw out its good local man because he did not conform to the Mandelson image. Of course, Mr. Mandelson—the man who really runs the Labour party, with the puppet Kinnock up front—is seeking a seat in the north of England. He has been selected as a candidate for an area that he had never previously visited. He is fighting a good local Conservative candidate who was born and raised in the area. He will beat Mr. Mandelson at the next general election——
      Mr. Speaker: Order. I know that such matters have been mentioned, but the debate is about a ballot ceasing to be effective in accordance with the relevant subsection. I know that general elections are about ballots, but I ask the hon. Gentleman to relate his remarks more closely to the Lords amendment.
      Mr. Holt: I am just coming to the connection that you are seeking, Mr. Speaker. We are discussing ballots. The hon. Member for Stretford (Mr. Lloyd) referred to the dock strike at Tees and Hartlepool. It was, "All out boys, all out", but it was not very long before it was, "All back boys, all back." The union leader said that the strike would last for six months and would break the port employers, but in fact it lasted for about six days and almost broke the union. It is the workers from the Tees and Hartlepool port authority who will elect the Conservative candidate, Mr. Graham Robb, to this House rather than Mr. Mandelson, the carpetbagger from the south of England.
      Mr. Forth: I have at long last achieved one of my life's ambitions, which is to be acknowledged by the hon. Member for Bolsover (Mr. Skinner) as a member of the Establishment. It is something that I have always wanted to be, and now I have it from the most impeccable authority in the House, if I may refer to the hon. Gentleman thus, that I am a fully fledged, bona fide member of the Establishment. I thank him for that because it has made my day.
      The hon. Member for Stretford (Mr. Lloyd) implied that the matter had not been fully and properly debated, but that is not strictly true. The principles underlying this important clause were debated throughout the Bill's proceedings both in this House and in another place. Although the exact clause had not been debated here, it was debated at length in Committee and on Report in another place and was widely welcomed on all sides. It had a fair amount of coverage.
      The hon. Gentleman asked whether we could conceive of or suggest any events that would meet the requirements of clause 7(4)(b). Almost immediately, my hon. Friend the Member for Bedfordshire, South-West (Mr. Madel) gave examples of two such events—first, the possible reinstatement of an employee whose dismissal had given rise to the balloted action, and secondly, a new pay offer being made during the proceedings. Those are two obvious circumstances which could give rise to the requirements under the clause. It is not as unlikely or as obscure as the hon. Member for Stretford suggested.
      Mr. James Wallace: Although those are relevant circumstances, if they were likely to arise

      35
      the union probably would not have returned to the court on an application. The sting would have been taken out of the potential dispute. It is more likely that the circumstances will be much greyer and less obvious to define than the clear circumstances suggested by the hon. Member for Bedfordshire, South-West (Mr. Madel), which would probably result in the union not wanting to make an application.
      Mr. Forth: The hon. Gentleman may well be right. However, the thrust of this late change to the Bill comes in response to points raised—quite legitimately—in the other place. They were considered very carefully, and were prompted largely by the events involving the Transport and General Workers Union which were outlined by the hon. Member for Stretford. We intend to prevent a recurrence of those events.
      4.30 pm
      I shall not attempt to envisage in detail the circumstances that may arise; I feel, however, that the clause provides a mechanism that will allow the unions to prevent a recurrence of the TGWU problem by going back to court. I shall say more about that in a moment.
      My hon. Friend the Member for Bedfordshire, South-West asked whether an appeal to the employment appeals tribunal would be possible. As a division of the High Court, it hears appeals from the industrial tribunals, so it would not be possible in this instance. Besides, we feel that allowing for such appeals would introduce yet more potential for delay and uncertainty. I should add that employers have no chance to appeal either; to that extent, the position remains evenly balanced.
      The hon. Member for Orkney and Shetland (Mr. Wallace) queried the ability of the judicial process to respond quickly enough to the events that we are discussing. I can give him two assurances—one quite serious, the other entirely serious. Given the dramatic fall in the incidence of industrial action that we have observed over the past few years, the number of occasions on which this machinery will be needed have also been dramatically reduced; it will therefore be invoked in only a few cases. I am confident that a quick enough response will be possible, although, if I am proved wrong, we shall re-examine the position as a matter of urgency.
      My hon. Friend the Member for Battersea (Mr. Bowis) asked whether the term "likely to occur" related to the future. If something is happening or has already happened, the court can already take it into account under subsection (4A); subsection (4B) would not be applicable. I do not believe that his fears are well grounded, but, if he is not satisfied with my reply, we can consider the matter again if necessary. My hon. Friend also asked what was the applicable date of the ballot. The applicable date is the last date on which voting can take place.
      It is remarkable that the hon. Member for Bolsover should still criticise the Government over the level of unemployment. Of course, any level of unemployment—even the present level, much reduced though it is—is unacceptable. Is not it significant, however, that our current rate of about 5·5 per cent. is below the rate in socialist France and socialist Spain, below the rate in
      36
      Germany—that much-vaunted example of industrial efficiency—and, certainly, below the rate in many other countries that allege to have socialist Governments?
      Presumably the hon. Gentleman still claims to be a socialist. I do not know whether that can now be said of any other member of the Labour party, but I suspect that, if there is one party member who still wishes to regard himself as a socialist, it is the hon. Gentleman. Given that that is the case, it is remarkable that he should criticise the present Government for the level of unemployment that an unacceptable number of people are still suffering: even his friends in the Socialist International—no doubt he, too is an active member, although he does not possess a passport—would consider that unfair. I hope that he will think again.
      The hon. Gentleman and other Opposition Members expressed suspicions about the courts. I regret that, because, although those of us who do not participate in court proceedings may find them difficult to divine from time to time, by and large it is a fair and impartial system. We should accept it as such, and we shall not make any progress by constantly criticising court procedure and those who dedicate their lives to this country's system of justice.
      Mr. Skinner: The system of justice in this country is bent. I believe that the judges, by and large, mirror the views of the Establishment. When a Tory Government are in power, the judges, by and large, support that Government's views. There may be odd little exceptions, where the judiciary throw a sprat to catch a mackerel, but I do not believe that they act independently. A good example of that is the way that judges came back from their holidays and opened up the courts on Saturdays and Sundays to imprison miners. They do not do the same in the case of people from the City. Cameron-Webb and Dixon got away to America with £40 million without even having their collars felt.
      When the judges were nearly tackled by the present Government two years ago, the judges threatened to go on strike and to have a big march down the Strand. As a result, the Prime Minister—the so-called lady who is not for turning—caved in, because the judges were her friends and she did not want to strike at them. I am sorry that the judges did not strike, because I had already made a placard and intended to join them.
      Mr. Deputy Speaker (Mr. Harold Walker): Order. Interventions should be brief.
      Mr. Forth: The hon. Gentleman has just answered the hon. Member for Orkney and Shetland, who complained about the judiciary's lack of speedy response. The hon. Member for Bolsover offered the best example that anyone could of the judiciary's speed of response. I wish that I had thought of it myself.
      The hon. Member for Orkney and Shetland queried whether the courts could respond quickly enough when unions referred a matter to them under the terms of the clause. The court will already be dealing with the matter, so such a request would only be an extension of existing proceedings rather than anything new. Therefore, there is no reason why any obstacle should be placed in the way of a union in that respect.
      I will not deal in detail at the Dispatch Box today with the specific case raised by the hon. Member for Walsall, North (Mr. Winnick), but I undertake to study again the

      37
      correspondence that passed between him and my Department. If there have been any significant or relevant changes in the circumstances, perhaps the hon. Gentleman will advise me. However, that case does not change the substance of the amendment and the clause.
      Mr. Winnick: I thank the Minister for agreeing to review the correspondence. I think that he will find that a rather useful exercise.
      As the hon. Member for Langbaurgh (Mr. Holt) would not give way earlier, may I ask him now whether he agrees that it would be more useful to proceed by argument and not by smears? Apart from two years' national service and a further two years in higher education, I have been in paid employment of one form or another since the age of 15. To say that I have not worked is a Tory lie. I have worked all my life. Despite the wishes of the Tories, I hope that I shall have an opportunity to work for many more years to come. The hon. Member for Langbaurgh should acknowledge that he told a lie, and withdraw it.
      Mr. Forth: I do not want to pursue those matters, but I hope that I have replied adequately to the substantive points made during our useful debate.
      Mr. Holt: On a point of order, Mr. Deputy Speaker. In view of the remarks made by the hon. Member for Walsall, North (Mr. Winnick), I may point out that in response to the claim by the hon. Member for Bolsover (Mr. Skinner) that only people who get their hands dirty are workers——
      Mr. Skinner: I did not say that.
      Mr. Holt: He did, Mr. Deputy Speaker. In response to that remark, I said that the hon. Member for Walsall, North had never done a day's hard work. I stick by that.
      Mr. Winnick: What work has the hon. Gentleman ever done? Acting?
      Mr. Skinner: Bookies' runner?
      Mr. Holt: It is not a question of what I have done but of what work those two hon. Gentlemen have done.
      Mr. Deputy Speaker: Order. None of this has much to do with employment.
      Mr. Forth: I ask the House to support the amendment.
      Question put and agreed to.
      Lords amendments Nos. 7 to 11 agreed to.

    Schedule 1

      FURTHER PROVISIONS RELATING TO ACCESS TO EMPLOYMENT
      Lords amendment: No. 12, in page 17, line 15, leave out sub-paragraph (5).
      Motion made, and Question proposed, That this House doth agree with the Lords in the said amendment.—[Mr. Forth.]
      Mr. Tony Lloyd: By way of clarification, will the Minister be good enough to confirm that subsection (5), which has been deleted as a result of the Lords amendment, was unnecessary in the first place? Will he place it on the record that health service employers, and those working within the health service, are covered by other sections of the schedule, and that, therefore, there is no question of their not being given the benefits of this legislation?
      Mr. Forth: Yes, I confirm that what the hon. Gentleman said is correct.
      Question put and agreed to.
      Lords amendments Nos. 13 to 16 agreed to.

  Landlord and Tenant (Licensed Premises) Bill
  Lords amendment considered.
  Landlord and Tenant (Licensed Premises) Bill
    Clause 1

      LICENSED PREMISES: APPLICATION OF LANDLORD AND TENANT ACT 1954, PART II
      Lords amendment: In page 1, line 18, at end insert
      "and section 24(3)(b) of the 1954 Act (which, in certain cases, preserves the effect of a notice to quit given in respect of a tenancy which becomes one to which Part II of the 1954 Act applies) shall not have effect in the case of a tenancy which becomes one to which that Part applies by virtue of this subsection."
      4.45 pm
      The Parliamentary Under-Secretary of State for Corporate Affairs (Mr. John Redwood): I beg to move, That this House doth agree with the Lords in the said amendment.
      The Landlord and Tenant Act 1954, as amended in 1969, will offer more protection to tenants of licensed premises if the Bill is passed. I know many people will welcome the amendment. I believe it is common ground with the Opposition that the extension of protection offered by this legislation will be beneficial to the tenants to whom it will apply and I welcome their support for the measure.
      The amendment has arisen out of consultations during the passage of the legislation. We believe that it represents a further improvement in the protection which the legislation will afford to affected tenancies. As the words of the amendment show, it disapplies a section of the 1954 Act, which could otherwise call into doubt protection for tenants where notice to quit might already have been served—something that the National Licensed Victuallers Association, among others, is worried about. I hope that the Opposition will agree that this amendment is welcome and strengthens the protection that the Bill offers.
      Mr. Doug Henderson: The Opposition have reservations about the Bill, but we support the amendment, as was made clear by the noble Lord Williams in another place, and I repeat our support on this occasion.
      I commend the National Licensed Victuallers Association, which has been extremely diligent and meticulous both in this matter and in assisting politicians throughout the passage of the Bill. It was due only to that diligence that we were able to modify the wording on this subject so that the Bill could achieve the common ends agreed between the Government and the Opposition.
      The amendment provides further minor protection for a tenant. However, I regret that the Government, during the preparation of the amendment in another place, were unable to incorporate a commitment given in both Houses on compensation, which is also relevant when a tenant may be forced out of a tenancy. I refer the House to the original commitment given by the Minister in response to a probing speech from a Conservative Back Bencher when the matter was considered in Committee. The Minister said:
      "I shall re-read what has been said by hon. Members on compensation and give it further thought".—[Official Report, Standing Committee G, 25 January 1990; c. 71.]
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      I am pleased to be able to acknowledge that further thought was given to the matter by the Government, and when it was considered in another place the noble Lord Trefgarne gave a further commitment when he said:
      "I can announce that after further consideration the Government intend to bring forward an amendment which will recognise that special arrangements for compensation should apply during the period of adjustment to a more open market. The amendment will provide that for a transitional period additional and separate compensation will be payable to tenants of un-licensed premises to which the Landlord and Tenant Act 1954 Part II will apply because of the Bill, and where the landlord wishes to use them as on-licensed premises himself."—[Official Report, House of Lords, 22 March 1990; Vol. 517, c. 413.]
      That commitment was welcomed by all those participating in the debate in another place. It was with some amazement that the Labour party spokesman on trade and industry in another place reported to me that, following discussions which had taken place with the noble Lord Trefgarne, it was found impossible to amend the Bill in a way that would accomplish what had been agreed.
      In another debate in another place on the same issue on Report on 17 July this year, the report was accepted only with the proviso that there was regret that it had not included mention of compensation although the Government entered into a commitment in Committee in the House, which had been reinforced by a further commitment given on two occasions in another place.
      I wish that the Government had given more careful scrutiny to the Bill when they were preparing the title and drew up the clauses. A crucial part of the Bill was found not to be in order by the House of Lords. It means that the protection that Members on both sides of the House want is not in the Bill.
      The Landlord and Tenant (Licensed Premises) (No. 2) Bill is in another place, and it covers this ground. It has been supported by the spokesman of the Labour party and the Government in another place. I understand that procedurally it will not be possible for that Bill to come before the House, which would enable it to have an opportunity to become law during this Session.
      While agreeing to support the amendment, I ask the Minister how he intends to proceed with the question of compensation, which the industry agrees is desirable and which the House has acknowledged all hon. Members would like to achieve.
      There was virtual unanimity among all those who took part in the debate in another place. Although there are timetabling problems, the issue will not go away. The Minister ought to tell the House how the Government propose to honour their commitment. Are they prepared to consider introducing a short Bill next Session on lines similar to those in the No. 2 Bill that was introduced in another place? Alternatively, would it be possible for the Government to table an amendment for inclusion in other miscellaneous legislation to cover the important question of compensation?
      Mr. Stan Crowther: As my hon. Friend the Member for Newcastle upon Tyne, North (Mr. Henderson) pointed out, the Opposition accept the amendment. It is needed to close a small loophole in the Bill. I am the parliamentary adviser to the National Licensed Victuallers Association which drew the Government's attention to a loophole that they had

      41
      overlooked. I, too, praise the NLVA for spotting this error in the original drafting of the Bill. I am pleased that the Government have acted upon the association's advice.
      However, it is tragic that this is the only amendment to come to us from another place. Important though it is, the amendment does not implement the solemn undertaking that was given by Lord Trefgarne on behalf of the Government on Second Reading in another place. He said that the Bill would be amended to provide better compensation for tenant licensees whose houses are taken back by the brewers for management in the transitional period before the full protection of the Bill becomes available to them. Many tenants are already affected, partly because of the Government's other legislation on the matter, which has resulted in many of the large brewery companies taking back houses for management in order to reduce the number of tenanted properties. Many licensees will, I fear, be denied the protection that Lord Trefgarne tried to promise them.
      Mr. Graham Riddick: The hon. Gentleman rightly points out that the beer orders that the Government pushed through the House will result in a significant number of tenanted houses being taken back for management or being put on the open market. Why did not the hon. Gentleman at that time join me in the Lobby to oppose those two orders?
      Mr. Crowther: I shall not attempt to answer that question. If I did, we should be straying a long way from the business before the House. It would not be sensible to reopen a debate that has long since gone. I am concerned with the position as it is now and as it will be in the near future.
      I hope that the Minister will respond favourably to the point put to him a few minutes ago by my hon. Friend the Member for Newcastle upon Tyne, North. Licensees were given to believe that an amendment would be tabled on the lines to which I have referred, but it has not arrived. Lord Trefgarne gave that undertaking in the other place on Second Reading. I do not blame him for the fact that he was unable to table the amendment that he had promised. It appears that the Government's advisers on procedure, whoever they may be, had failed to detect that the Clerks in the other place would rule that such an amendment would be out of order.
      Lord Trefgarne was therefore placed in the embarrassing position of having to tell their Lordships that he could not implement the promise that he had made. In Committee, however, on 23 April, he said:
      "I undertake to consider very carefully what has been said during the debate and to do my best to resolve the matter between now and the next stage."—[Official Report, House of Lords; 23 April 1990, Vol. 518, c. 354.]
      Exactly three months later, at Third Reading on 23 July, he had still failed to resolve it, although other suggestions had been put to him—for example, a short No. 2 Bill to take care of the matter. Why Lord Trefgarne did not do that no one seems to know.
      Lord Williams of Elvel showed the way that it could be done by introducing his own Bill which would have implemented the Government's promise, if only the House of Lords had had time to do so. If that Bill had been introduced by the Government in April when Lord Trefgarne found that he was unable to amend the first Bill, everything would have been taken care of and the
      42
      protection that had been offered to tenant licensees would be about to be implemented. It is tragic that that has not happened.
      The amendment is important. It improves the Bill. However, it remains a modest little measure which falls a long way short of the high hopes that were raised at the time of the Monopolies and Mergers Commission's original recommendations, which would have improved the protection given to tenants.
      I do not intend to comment on the other matters in t he MMC's report. They are not before the House. I am concerned only with the MMC's recommendations for the protection of tenants. They have not been implemented in full, although Lord Young said originally that he intended to implement them in full. It is a tragedy that that has not happened. Consequently, we end up with half a loaf which is, no doubt, better than no bread at all. I hope, however, for better things in the next Session. I suppose that we have to be thankful for small mercies, but time will tell just how small this one is.
      Mr. D. N. Campbell-Savours: I had not intended to speak in the debate until, when I was sitting in the Tea Room, I saw the Bill's title on the Annunciator. It struck me that the Bill was relevant to a case in the county of Cumbria which I decided to bring to the attention of Parliament at some stage.
      Mr. Deputy Speaker (Mr. Harold Walker): Order. I hope that the hon. Gentleman recognises that we are debating not the Landlord and Tenant (Licensed Premises) Bill but a specific and particular Lords amendment thereto.
      Mr. Campbell-Savours: It is precisely that, Mr. Deputy Speaker. It relates to the position of a particular licensed tenant and the lack of protection for his interests during an argument that he had with the brewery. I understood that when the Bill was discussed in the other place it would lead to an amendment that would safeguard his position.
      There is a pub in the county of Cumbria which some eight years ago was turning over approximately £35 a week—a very small sum indeed. A well-known brewery in the north of England owned the pub. It removed the tenant and a new tenant was brought in who increased the turnover of that pub from that small sum to more than £300,000 a year. The brewery developed the business, the barrelage and a food business to go with the sale of drink.
      The pub has become well known in Cumbria. Some months ago the brewery informed its tenant that it wished to take the property for itself and, in effect, to evict him. That is what it means in practice. The brewery informed the tenant that it intended to install one of its own managers. It wanted to do that because it was rationalising its estate. That company, which is a reputable local company, wishes to secure the highest possible return for its shareholders and for its internal investment in its brewery operations. Therefore, it felt that it needed a turnover injection of that scale to help to improve its profitability.
      The tenant felt most aggrieved and looked to Parliament and the law for a means by which he could be properly compensated—that is what we are considering in the amendment—either by the state, which was not really his priority, or by the brewery. Having taken legal advice, he discovered that he had no rights in law. The only thing

      43
      that supported his position was a code of conduct that had been drawn up by the breweries and with which they are expected to comply.
      5 pm
      The result was that an argument broke out about the compensation that should be paid to that tenant, who was about to be evicted. I am unaware of the final settlement, but I know that it runs into very few thousands of pounds. We must take into account that, over a period of seven years, that man and his wife had built up the business until it had a turnover of £300,000. One would expect them to receive compensation in excess of £100,000 to enable them to purchase another public house.
      I expect that, in future, the Bill will protect people in that position and enable them, if a brewery must take a commercial decision based on the need to rationalise, to acquire another public house so that they can rebuild their business. I do not see how, in natural justice, a principle can be reasoned or defended by which a man's livelihood can, in effect, be terminated because a brewery wishes to rationalise.
      If the Minister checks his facts, he will find that that matter has been referred to by a Member of Parliament for Cumbria, but I do not intend to identify the pub or constituency. The Minister should reply directly to the point that I have made. No doubt that publican will see the Minister's reply reported in the newspaper, and in so far as it directly relates to the substance of the amendment, and indeed the substance of the Bill, perhaps the Minister will take the opportunity of replying.
      Mr. Redwood: I am grateful to the hon. Member for Newcastle upon Tyne, North (Mr. Henderson) for offering the Opposition's support for the amendment. We all agree that it is a welcome improvement in the protection afforded to tenants under this legislation.
      I express gratitude to the hon. Member for Rotherham (Mr. Crowther) and echo his words, because the National Licensed Victuallers Association has been helpful to me and to other hon. Members during the passage of the Bill. It found something that needed improving and the Government responded. I hope that the hon. Gentleman agrees that the dialogue between us was useful.
      I said in Committee that we would carefully consider compensation to see whether there are ways of improving it further. I gave a cautious pledge to improve it further because I well knew that there were many technical and other problems barring the way to achieving a better compensation regime to which I needed to give further thought. My noble Friend in the other place thought that those obstacles had been cleared and that he could see a way of drafting something that would meet the requirement. He offered that in good faith, and he and the Government are sorry that it was not in order in the other place. This House understands the rules of procedure, which are not a matter for the Government. Like the Opposition, the Government should live within the rules of order and accept all the judgments of the proper authorities. Unfortunately, this matter was not in order and so we were not able to make progress in the way that my noble Friend had thought possible when he made his
      44
      pledge. He apologised for that in the other place, and I echo his apologies on behalf of the Government. We are sorry that it was not possible, but that is how the procedure had to work, given the nature of the short title of the Bill.
      The Bill already contains compensation provisions which are important to the industry. The Government believe that it is important that the Bill should go through in a timely way to make that protection available.
      Mr. Crowther: We all accept that Lord Trefgarne gave in good faith an undertaking which he was unable to implement. I do not understand—and I should like the Minister to try to explain this—why the Government did not adopt one of the other options open to them of introducing a short Bill on the lines of the Bill introduced much later by my noble Friend Lord Williams of Elvel. If they had done so, there would have been ample parliamentary time for it to go through both Houses and to meet, in a different way, the undertaking given by Lord Trefgarne.
      Mr. Redwood: Lord Trefgarne gave his undertaking on the basis that he would be able to amend this Bill, which would have been the shortest and simplest way of proceeding had it been in order. When the Government considered the other possibility we realised that new legislation would have required substantial allocations of new parliamentary time and we did not feel that that would be possible within the limited time available. We felt that it was important not to jeopardise the substantial protection that the legislation offers.
      Mr. Henderson: Will the Minister confirm that the Opposition offered a clear run through the other place and through this House if the Government were prepared to introduce a short Bill?
      Mr. Redwood: The Opposition said that they would help, but such a Bill must go through all due procedures and at each stage there would need to be scrutiny of the drafting. No one can foresee whether legislation will cause problems or not.
      As to the No. 2 Bill, although the Government stated that they would welcome a further strengthening of the compensation provisions, we indicated that goodwill was not the right way to achieve that. There are all sorts of problems with defining and calculating goodwill in businesses, and the reasons behind those complexities led to the dropping of the goodwill basis for compensation in the 1954 legislation, as reaffirmed by the 1969 legislation. That is the problem that the Government have had with the method chosen for the No. 2 Bill. That Bill, because of its drafting, offers protection to few people and that, too, is a technical problem.
      I accept what the hon. Member for Workington (Mr. Campbell-Savours) said about his constituency case. It does not sound like a terribly nice situation for him or the licensee, but the purpose of the Bill is to improve tenants' protection and to offer compensation to those eligible under the Bill. We believe that that is a substantial move in the right direction, and it is all that we can do within the time available to the House. I urge the House to accept the amendment and, on the wider issue, to accept the Bill as a welcome step in the right direction.
      Question put and agreed to.

European Company Statute
5.8 pm
The Parliamentary Under-Secretary of State for Corporate Affairs (Mr. John Redwood): I beg to move,
That this House takes note of European Community Document No. 8404/89 on the proposal for a European Company Statute; and supports the Government's intention to seek to ensure that if there is to be a European Company Statute, it should contain a minimum of regulation consistent with the aim of providing adequate protection for those who may be involved with a company formed under the statute.
An extensive inquiry has been conducted in the other place into the draft regulation and the draft directive for a European company statute. It has produced a good report, which I hope hon. Members who are interested in the subject have had a chance to read.
The report makes it clear that in their Lordships' view a fundamental revision of the proposal will be required before it produces something worth while. The Lords also support the Government's view that the voting base chosen by the Commission in its draft proposal is not the correct one, and I shall expand on the reasons for that.
The United Kingdom Government are negotiating—and will continue to negotiate—in good faith on the general issue of whether it is possible to find a form of European company which would transcend national laws in some respects and which might be useful for businesses thinking of operating across the borders of the 12 European Community member states.
There are several problems with the present proposal and they may well account for the fact that the negotiations with our partners have taken so long. The first proposal was introduced as long ago as 1970. There was another proposal in 1975 and there has been extensive reworking and discussion since then. The Commission's original drafts have been replaced with the present proposal, which is more modest in scope and extent. Even though the proposals have been changed in many respects and even though their authors have tried to make them less ambitious—and thus find more agreement among the member states—we have found considerable difficulties standing in our way at each stage in our attempts to reach agreement on them.
The Government do not believe that the adoption of the proposal is now imminent. We have brought it before the House on a take-note motion so that we can have a good debate because we believe that negotiations will get under way again and that they may pick up speed. As the Minister likely to handle the negotiations, it is most important to me to have in my mind the views of hon. Members on both sides of the House and to have the Government's attitude to the proposal tested in the House.
Mr. Ivan Lawrence: Most of the House is not here.
Mr. Redwood: My hon. and learned Friend says that most of the House is not here. In a democracy, one can only offer people an opportunity. One cannot force them to debate something, although I hope that others will join us so that we may be made aware of their views as the debate progresses.
The Government went out to consultation with a substantial number of those who are not fortunate enough to be Members of Parliament but who are in business and can therefore give us good counsel on this matter. Of the
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41 bodies that responded to the consultation document—not itself a high figure—only three favoured the proposal with the attached worker participation directive as it stands. The overwhelming majority felt that the proposal was flawed both as a prospective piece of company law and particularly with respect to its employee participation provisions, which are not in sympathy with the style of employee involvement and the voluntary system that we have traditionally favoured in this country.
The employee participation provisions are one of the most important matters that we shall be debating today. The British system is based on voluntary agreement within companies. Many styles have been evolved and those adopted by some companies have provided much better results than have the statutory or mandatory system adopted by some of our continental fellow members. Some of the best examples are set out in the Department of Employment booklet "People and Companies". which refers to the United Kingdom's achievements in this respect, based on the voluntary principle.
In the negotiations, the United Kingdom Government will continue to press for that essential principle of voluntarism in all our work on employee participation. We do not believe that the Commission and the European Community should attempt to prescribe and enforce a style or styles of employee participation. We are reluctant to have potentially divisive issues dragged up under Commission proposals, especially now that we have a much better record on strikes and labour relations following legislation that the House has passed and following highly successful experiments with voluntary systems of participation chosen by companies in consultation with those whom they affect.
Mr. Anthony Nelson: My hon. Friend will recall our debate on non-executive directors. It was argued on that occasion that such a system might detract in some way from the unitary board principle and structure, which places equal responsibility in the members of a board. I suspect that the same concern and principle may be at stake in our reaction to the present proposal. Is there perhaps a middle way? There are, after all, a number of proposed models for employee participation. Could not we adopt and embrace the principle—and perhaps enshrine it, to a limited extent, in our company statute in an attempt to comply a little more with the spirit of the proposals—while ensuring that we do not destroy the unitary board structure, which is a matter of heritage and which has worked successfully in Britain?
Mr. Redwood: My hon. Friend is right that there are already several options on offer and that not all of them make a frontal assault on the unitary board principle. We are worried not so much about the principle of the unitary, as opposed to the two-tier board, but about the principle of whether a particular form of participation should be mandatory or voluntary. As soon as a system is made mandatory, it has to be defined in legislation arid enforceable in the courts. The statutory imposition of a particular style of consultation or participation may force companies to create the necessary structures but it cannot force them to enter into the spirit of the thing.
To work a system, we need agreement. We need a system that works harmoniously because people want it to succeed. Our worry is that if we accept a mandatory

47
system, we shall lose that agreement and we shall not gain what the authors of the proposal want, which is improved participation in companies.
Rev. Ian Paisley: Will the Minister explain his objection to the second model, under whose terms
"an employee representative body could be set up which would have rights to specific information, to require reports from the board and to be consulted before certain decisions … implemented."
Surely that would make for the better running of the company and would not interfere with the role of the board as the controller of the company.
Mr. Redwood: I have already explained my objection to the principle of making such participation mandatory. The British Government welcome various styles of participation in companies but we believe that companies are in the best position to judge what makes sense for them. If we impose arrangements on them from above, we may succeed in achieving the form of participation specified—by force of law—but we shall not necessarily engender the spirit of participation that we seek to achieve. A similar argument applies in respect of non-executive directors—the question to which my hon. Friend the Member for Chichester (Mr. Nelson) referred. The Government welcome the strengthening of boards with non-executive directors and the work of audit committees and so on. We have not thought it right, however, to make provisions mandatory, because that would not necessarily guarantee the appointment of independent men and women of repute who would make the kind of contribution that I am sure my hon. Friends could make, were they offered such important work.
Ms. Marjorie Mowlam: I am listening carefully to the Minister's explanation of what he is for and what he is against. He says that he does not want mandatory provisions because he does not believe that that would encourage the spirit of participation and co-operation that he seeks. The Minister is very proud of the self-regulatory system in the City, where we have a statutory framework and, within that framework, self-regulation, choice, variation and participation in many different forms. Such a structure would be in accordance with the directive and, judging by what the Minister has said, he would be happy to adopt it.
Mr. Redwood: There is a difference between imposing a regulatory system for the protection of investors—where, in extreme cases, one is worried about fraud and malpractice—and encouraging companies to adopt best practice in employee relations. The two are rather different matters and I do not accept the hon. Lady's analogy.
Mr. Lawrence: There is another important difference. In the case of the City, the British legal system, the British Government and the British Parliament have control. With a European statute operated from Brussels, we shall have minimal control.
Mr. Redwood: My hon. and learned Friend makes a powerful point, which leads me to another question that is central to the debate. The proposal before us is not a proposal for a single European company—far from it. We have before us a proposal for 12 different types of
48
company. If the regulation and directive were passed unamended, a different type of European company would be formed in each member state, for the simple reason that there is not a big enough corpus of European law, compiled at EC level, for each of the companies to satisfy the legal requirements without reference to national law in the member states. In a few modest respects, a European company in Spain would be similar to a European company formed in the United Kingdom. However, in most other respects, the European company in Spain would be answerable under Spanish law and the European company set up in the United Kingdom would be answerable under United Kingdom law. It is not foreseeable for some time to come that we will have a sufficient body of European law to resolve that problem. In the foreseeable future there will always need to be recourse to national law to cover most of the issues that arise in any companies formed under a statute of this nature.
As it stands at the moment, we are worried that far from this proposal being a simplification for businesses trying to conduct business across frontiers among the 12 member states, it could become another major complication. Were some companies to decide to form a European company in one or more member states under such a proposal, there would be more legal complexities for their counterparties than if they had simply set up a company under a given national law and had taken advantage of the opportunities for open trading, passports in financial services and so forth which would enable them to trade across frontiers without needing to set up the separate form of incorporation suggested by this European company statute.
That point was borne out in our consultation. The companies that we asked told us that they did not see any great interest in forming such a company. They believe that their cross-border business can already be conducted taking advantage of the general corpus of international law and the national laws of individual countries. They can already form companies where they wish and can optimise their business arrangements by choosing the country for that company's formation which they think is most effective for their business purposes.
Mr. Tam Dalyell: The Minister said that he has not had a great response about this. Was there any response from some of the big American companies which carry out a great deal of business in several countries in Europe? I am thinking in particular of Hewlett-Packard which has a big factory in south Queensferry and has expressed concern about certain aspects of this very important matter. Has the Minister heard of any particular concerns expressed by American-based companies?
Mr. Redwood: I have not read of any complaints of that kind and I cannot remember any crossing my desk. However, I cannot speak for the whole Department. The overall impression in the consultation replies that I have seen is as I have described it; there is very little demand for such a company and I have been aware of no difference of concern in terms.of the nationality of those who responded. Of course we are most likely to have United Kingdom-based companies responding to our consultation documents, but, as the hon. Member for Linlithgow

49
(Mr. Dalyell) has said, the responses may also come from large American companies that have large United Kingdom interests and subsidiaries.
The European company statute includes a tax proposal and we believe that it is wrong to use company law proposals to try to introduce certain tax advantages for a European company by the back door when such matters should be discussed more generally under the proper unanimity provisions concerning taxation, and a sensible tax regime—if one is needed—should be achieved by agreement across the member states with regard to the measures that may be necessary to improve the company tax regime across border trading. A few welcome improvements in that regard have been made, but we do not believe that we need tax harmonisation or common rates across the Community to have a free and open market. It is more important that we all play by the same rules in any given market place within the member states. Other barriers got in the way in the past and those are being removed by the single market campaign.
The British Government have difficulties with the legal base proposed by the Commission. The mixture of article 100A and article 54 is quite incorrect. For example, the Commission seems to imply that this is a harmonising measure to further the single market. It is not. It attempts to set up a new entity outside the existing member states' national law and it should be treated differently.
Because the measures before us include both tax and employee participation provisions, we also believe that unanimity is a more appropriate way of proceeding than qualified majority voting. Therefore, the British Government would like to see the correct legal base which we believe must require unanimity and that is the legal base of article 235 or other measures rather than that for specific single market measures for which we have agreed to qualified majority voting to expedite their progress.
Other hon. Members wish to participate in the debate and I shall be brief. In summary, the British Government will continue to negotiate with our partners to discover whether a suitable vehicle can be found to meet the Commission's ambitions. We do not believe that this vehicle is currently in anything like the right shape. We believe that there should be changes with regard to the voting base, the introduction of taxation provisions and the form of employee participation included in the draft. There should also be some resolution of the difficulties inherent in creating 12 entirely different types of company which might well complicate and make business life more difficult in the Community instead of simplifying it. If hon. Members can propose a better way forward, the Government would be grateful to hear from them.
5.25 pm
Ms. Marjorie Mowlam: As I rose to speak, I wondered whether the Minister would consider a better way forward in other policy areas. If he is looking for advice in that regard, I am sure that we can help him out in other areas. It was also interesting that the Minister thought it necessary to state that the Government were negotiating in good faith on this European company statute. He seemed to imply that some people might doubt whether the Government negotiated in good faith in Europe and that we would think that the Government
50
would do otherwise with regard to directives and regulations. However, we shall take the Minister's comments at face value.
We understand some of the difficulties that the Minister faces with the negotiations. We agree in principle with the European company statute. The directive and the regulation are important to the future of Europe. However, we take into account some of the worries and doubts that have been expressed about how the negotiations are taking place.
The negotiations have continued for a long time and, in an attempt to reach agreement, more and more host nation or country rules are coming into play. The Minister made the point that nation state rules are coming into play and that we shall have 12 different pieces of legislation or different forms of European companies and will end up with a statute that is not worth having. Therefore, the provision's final downfall is built into the way in which the Minister and others have approached it. That is unfortunate.
We are particularly worried about some of the host nation and national laws that will come into play because of varying standards between different European countries whether they be in relation to auditing, accounting or bankruptcy. I will leave the latter subject to the hon. Member for Antrim, North (Rev. Ian Paisley), but those areas may cause us difficulty in future.
The Minister was slightly disingenuous when he talked about his concerns. From previous debates on this and other topics I guess that the Government are primarily opposed to the statute because of the element of worker participation. We have been told that there should be unanimity of voting on the issue and not a simple majority. We know that the Government are not happy with the worker participation element of this statute and it is clear that they will choose whatever channel possible to broaden the debate to make it look as if they are interested in other factors. The Government do not want workers in this country who work in a European-based company to have a basic right. We are not asking for something under the social charter which does not or would not exist in any other European country. We are asking for workers in a particular company to be informed and consulted about decisions. Our European colleagues do not find that a particularly demanding part of the statute. Only this Government find it so objectionable.
It would be useful if the Minister could clarify a point which occurs on page 5 about the proposals for a European company statute, tabled by the Department of Trade and Industry. The Minister that the Government are opposed to worker participation in the three forms that are being recommended in the company statute and that it is mandatory that one of the three forms will have to be taken. Page 5 of the Department of Trade and Industry's document on worker participation states:
"If no agreement"—
that is, no agreement on any of the three models—
"could be reached, or where the parties to the negotiations so decided, a national model would apply. This would have to provide for at lest the same information and consultation as would be required if a model were agreed by collective bargaining."
That document is saying that, if a company based in the United Kingdom has basic levels of information and consultation that most people would accept as reasonable, common sense and rational, the three mandatory models do not have to be adopted. It is not as though we are being

51
forced to have the German or French models of worker participation; all we are being asked is to have basic levels of informnation and consultation with the work force.
I do not wish to broaden the debate outside the auspices of the statute, but, when the Government call for wage restraint and are not prepared to talk to people and ask managers and others to have wage restraint, people will not respond. That may be a lesson for the Government to learn. The statute will help them to learn that, in relation to European companies, if we have a level of information and consultation, the problems that the Minister mentioned about the mandatory enforcement of one of three models would not exist. I should appreciate it if the Minister would clarify that point.
Mr. Redwood: There would still be mandatory enforcement of the standards of minimum levels which would have to be prescribed in statute and would mean that the law got involved in matters that we have left to individuals to decide. The Government are against that.
I should be grateful if, in turn, the hon. Lady would clarify a point. She says that she welcomes the European company statute and thinks that trying to get agreement by putting more and more national law into the solution is unhelpful because it destroys the principle. Is she saying that the Labour party would like to see a comprehensive company and insolvency law at European level, and, if so, how long does she think it might take to get it?
Ms. Mowlam: I shall respond with pleasure to the Minister's second point. As I pointed out, the difficulty is that we are now faced with host or national law regulation because we have been unable to get agreement on the European company statute. That position would not have been reached if the Government had been negotiating with a little more willingness. We ask why our colleagues in Europe have doubts about the Government. To answer the Minister's point head on, the reason why the Government went into the ERM was to gain political ground from the Labour party after our good conference. Also, they had no hope of going to the intergovernmental conference in November and convincing anybody that they could negotiate for the hard ecu when no one believes that they are committed to Europe in the first place.
On the Minister's point about national law, company insolvency and the length of time, the rest of Europe is quite clear on Labour's position. Labour Members have stated their position. The Conservative party is so badly divided that one of the difficulties that Europeans have when they sit around the table is that they do not know what position will be adopted, whether the Government will be able to deliver it, whether there is a commitment to the principle, or whether there is just a paper-thin view that could collapse halfway through the negotiations.
The Minister says that information and consultation would have to be mandatory. I do not see what difficulty the Government should have in setting a basic level, as we want to do with the minimum wage, of information and consultation. Working people in this country should not be denied the legally enforceable right to participation in the form of consultation and information. Clearly, the detail of that should be left to specific situations. We do
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not disagree with that. Individual companies will want to do things differently, but it should be essential and correct to have a legally enforceable right.
Mr. Redwood: Is the hon. Lady saying that the Labour party's official policy is that all United Kingdom company law should be replaced by a law harmonised with our partners who have rather different company law systems?
Ms. Mowlam: No. If negotiations had taken place differently—I gave an example of negotiations in other matters in which the Government are having difficulty—we would not be in this position years down the road and unable to get agreement because the Government are dragging their feet. Europe is left with no other option, as it has been with so many other directives and regulations, but to go to the lowest common denominator—in this case, national laws. As a result the ludicrousness of that option becomes clear. We do not have one set of regulations for European company statutes; we have 12, and we may have more in future. Again in answer to the Minister's point, it is a matter of negotiation and discussion. We would not have been in this position because we would not have had——
Mr. Redwood: Will the hon. Lady give way?
Ms. Mowlam: I have answered the Minister twice. I will not do his job any further. He has asked for advice on two pieces of legislation, and he has asked us for advice on where he goes forward because he has no ideas. I shall make progress because other hon. Members wish to participate.
The right to consultation and information to which workers in this country should be entitled should be a legal base. The difficulty is that the Confederation of British Industry and the Institute of Chartered Accountants seemingly object—in particular the CBI—for the same reasons that the Minister gave. The CBI's press release on this matter states that these proposals would be more a back-door attempt to introduce legislation on mandatory worker participation. Clearly the objection is of the same nature, but the point that we made this afternoon in line with Labour party policy would begin to answer it. Our position is very clear.
The Minister argued for unanimity and said that majority voting is the basis for this legislation. It would be interesting to see, if the legislation on worker participation was not perceived by the European commissioners as an essential part and that the two aspects had to travel in unison, whether the same objections on voting rights would still hold. Opposition Members doubt whether they would. We agree in principle—
Mr. Tim Smith:: Will the hon. Lady give way?
Ms. Mowlam: The hon. Gentleman has plenty of time in which to participate. I shall conclude my remarks. I shall come back later if the hon. Gentleman wants any particular points answered. [Interruption.] I have said that the hon. Gentleman can participate later in the debate.
If the Government's position on Europe had been clearer and the present confusion did not exist, their negotiating position would have been made much clearer and we would not face such difficulties with the statute.
5.37 pm
Rev. Ian Paisley: I regret the Government's attitude to workers. I do not think that that should be the real thrust against the proposal. I have participated in such debates in Strasbourg, and my views are well known. I should not like the people of Europe to think that the British working classes would not be in the same position as they would be in regard to their legitimate rights. After all, no United Kingdom person should be ashamed of the history of workers in this country and the fight that they put up for basic rights. It was a fight for basic liberties, and all parties agree that those liberties are inalienable rights. I regret that the Minister denied that by placing such great emphasis on his vigorous objection to worker participation. Those are not the grounds on which we should object to the proposal, because we should be concentrating on far more serious matters.
Both the Conservative and the Labour parties are in considerable difficulties over this matter. There was a time when the Labour party was very much opposed to Europe. When I was first elected a Member of the European Parliament, many Labour Members took the same view as I, whereas many Tory Members were more pro-European than the Tory party itself. I am glad that Tory Members now recognise Europe's threat to our sovereignty. We should consider that important matter, because the long arm of Europe could reach into our country and be effective in overruling the democracy of the House of Commons that has been won for the British people.
I am glad that the Government are not happy about the proposal, but regret that they are objecting to a matter on which we should be united. The best way forward for the British people is to show Europe—as we have shown Europe in the past—that, notwithstanding the European structures and Mr. Delors' mad schemes, we can give leadership, have unity in industry, and move forward in the way in which we should move forward. I nearly said "Ulster people" instead of "British people" because I am so used to addressing my own Province, as hon. Members well understand.
I therefore trust that the debate will not follow the line that has been taken up to now. I have no difficulty with the second model, under which
"an employee representative body could be set up which would have rights to specific information, to require reports from the board and to be consulted before certain decisions are implemented."
As that is what is happening in some companies today, we should not be seen in Europe to be resisting it. I should like to think that the United Kingdom's European opponents on this matter would recognise that far more important matters are at stake, some of which have already been mentioned.
Obviously, there are difficulties in terms of the laws of the 12 countries, many of which differ greatly. I cannot see how one European Act could straddle all the 12 countries. The hon. Member for Redcar (Ms. Mowlam) did not really tell the House how she proposes that that could be done. I think that she was in a little difficulty—in fact, a colossal difficulty. Far be it from me to diminish her wisdom in any way, but wiser minds than hers cannot find the answer to that question. It is right for the Government to ask, "How are you going to do it?" because I do not think that it can be done.
We need to look carefully at what is being proposed. We should not allow Europe, via this directive, to get its
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hands on our tax system. The directive should not be the back door through which Europe can proceed to tax harmonisation. I think that this is one of the back doors that Delors wants to use for his own ends.
The House would do well to take the stance that it does not accept what has been proposed. We should say that we are opposed to it. I should not like anybody to think that the United Kingdom's opposition to this matter is on the ground of worker participation. That would be a bad message to come from the British House of Commons. It would look as though many of us were not prepared to ensure that the working class in our country has its full rights. Even we in this country have more rights than the people of some other European countries. Those rights have been hard fought for and achieved after immense struggles. They came before many of the rights accorded to workers in the rest of Europe.
Finally, there is something wrong with the way in which this material is presented. My copy of the report was a completely unreadable photostat. That is what is being presented to hon. Members, yet we are supposed to take an interest in it and to try to read it. I had to get the original because I was told that all the copies were the same. If I were suspicious, I would say that there was a dark conspiracy down in the bowels of the House and that a person in the pay of Mr. Delors was inking the copies as thoroughly as he could so that hon. Members could not read them. I notice that one of the Whips is a former Member of the famous Strasbourg Assembly. I hope that he will be an anti-Guy Fawkes investigator and will discover why hon. Members cannot be given decent copies before debating these important matters. Hon. Members are blamed for not reading things, but how can we read unreadable material and pass our comments on it?
5.46 pm
Mr. Tam Dalyell: I, too, was a Member of what the hon. Member for Antrim, North (Rev. Ian Paisley) referred to as "the famous Strasbourg Assembly". I was also a member of the budget committee and the budget sub-committee of that famous Assembly, which were supposedly the equivalents of the Public Accounts Committee, and which looked into fraud and malpractice. In general, over those years, it was my considered opinion, when serving on those Committees under the chairmanship of Heinrich Aigner from Bavaria and his expert officials, that there was comparatively little fraud and malpractice in relation to the European funds. The hon. Member for Lancaster (Dame E. Kellett-Bowman) might agree that blanket criticisms of the Brussels bureaucracy are often ill-founded and ill-directed. In my experience, the European funds were used pretty honestly and the budget sub-committee found that, generally, there was little fraud and malpractice.
Dame Elaine Kellett-Bowman: In the hon. Gentleman's day, the European Parliament was not using its powers as strongly as it might. Budgetary control, for example, has been greatly tightened. However, the fact still remains that inspection is weak. Many things have happened to give the Community a bad name. If we had an international inspectorate, things would be much better because we obey the law. I am sure that the hon. Gentleman remembers serving on committees in which the French and the Italians took the view that it did not matter which regulations were being considered because they had

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no intention of observing them, whereas the Danes and the British wanted every i dotted and every t crossed because we wanted to observe the regulations. Inspection is the key to ensuring that there is no fraud.
Mr. Dalyell: My party decided—rightly, in my view—that Members of this House should no longer be Members of the Strasbourg Parliament. Therefore, as my experience is out of date and the hon. Lady's experience is far more up to date, I shall certainly not quarrel with her on this matter.
There are two sets of exceptions to article 24 and the other documents. The first relates to European companies' trade with Cambodia. I have been drawn first in Question Time on 31 October. I shall ask the Minister's Department about trade with Cambodia. Under the cloak of privilege—because law suits are flying and this is what House of Commons privilege is for—I shall ask about the Government's view of allegations made in front of millions of people by John Pilger about Anthony de Normann and Christopher MacKenzie Geidt on trading in arms and other materials with the Khmer Rouge and other people in Cambodia. I am entitled to ask that question in this debate because we are talking about fraud and malpractice. It is strictly in order. I am rather careful about these things.
I ask the Government directly to say what is their relationship, if any, with Anthony de Normann and Christopher MacKenzie Geidt and what they know about them. I am careful about bandying names around the Floor of the House of Commons, but those people have been named in front of millions of people. No answer has been forthcoming from Mr. Pilger. I talked to him both before and after the programme and he gave me the impression that it was extremely carefully researched. The programme was on television. Libel lawyers were involved. Therefore, I am entitled to ask the Government on the Floor of the House what they know about the matter.
I am also entitled to ask the Department of Trade and Industry whether it has had any dealings, either in the form of licences or end-user certificates——
Mr. Deputy Speaker (Mr. Harold Walker): Order. I have listened carefully to the hon. Gentleman and tried to reconcile his assertion that he is in order with the proposal before the House. The motion appears to be about the Commission's proposal to permit the creation of a legal structure for supranational companies. It is difficult for me to reconcile what the hon. Member says with that.
Mr. Dalyell: We are dealing with supranational companies, because the matter crosses international frontiers. I understand that European firms were involved. The Minister, not I, raised the question of fraud and malpractice. My question has been clearly put and I am sure that the Minister would like to answer.
Mr. Anthony Beaumont-Dark: We always await with huge enjoyment interventions from the hon. Gentleman.
Mr. Deputy Speaker: Order. The hon. Gentleman does not have the right to speak for the Chair.
Mr. Beaumont-Dark: We always await your interventions with huge enjoyment, too, Mr. Deputy Speaker. We await with even greater anticipation the hon. Gentleman's
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interventions. Will he tell us why John Pilger should be looked upon as almost a holy grail of truth? Why is it that what such gentlemen say in all these programmes become facts? Why does the hon. Gentleman suddenly say that all the things that we hear on television are facts? Is not it possible—I know that it sounds entirely unlikely—that even the wonderful things that the television says are true are not always true? Why are this Government, or any Government, always wrong just because John Pilger and his crew say that it is so?
Mr. Dalyell: I am genuinely grateful for that intervention because it allows me to clarify a matter. I do not say that John Pilger is necessarily right. All that I say is that John Pilger has a track record of being sufficiently serious to entitle me to ask in the House of Commons what Her Majesty's Ministers know about the matter.
This is no trivial matter when one sees that sheer horror and destruction in Cambodia on film. It is a land—
Mr. Deputy Speaker: Order. The proposal that the House is required to consider is the establishment of a new legal structure. We are not debating whether a particular company or organisation is in breach of exisiting statutes or whether fraud has been committed under existing statutes. That is not a matter for this debate.
Mr. Dalyell: Clearly you want me to leave Cambodia and go on to safer ground. Therefore, I draw the attention of the Government to a report yesterday which said:
"Machinery for Iraqi defence factories was exported by British companies using loans guaranteed by the Government,"
I bring myself into order by quoting the people who have made those allegations. They are the state owned Banca Nazionale del Lavoro, an Italian firm which I shall call BNL for short. The report continues:
"They say that the beneficiaries included Technology and Development group (TDG), a London company controlled by Iraq's Ministry of Industry and Military Industrialisation and the Coventry machine tool company, Matrix Churchill, bought by TDG in 1987.
BNL's Atlanta, Georgia, branch is at the centre of a scandal, over its provision, without authorisation from Milan, of $3 billion of export credits to Iraq. After its takeover by TDG, Matrix Churchill boosted its sales to Baghdad. Customs officers last week detained its managing director, Paul Henderson, for questioning on possible violations of UK controls on exports to Iraq in the Gulf war."—
Mr. Deputy Speaker: Order. Perhaps the hon. Gentleman would explain to me how relevant those matters are to the Commission's proposal to create a new legal structure for supranational companies within the Community.
Mr. Dalyell: It is simply an example of why we need a supranational structure with teeth. By referring to the Italian involvement and the involvement of the United States, I have shown that we are dealing with a supranational structure. As I said, it was the Minister who raised the question of malpractice. The debate is surely about malpractice.
The report continues:
"Although Britain officially banned the sale of lethal items to both sides in the Gulf war, there were no restrictions on the supply of machinery which would allow the Iraqis to manufacture conventional weaponry. And the Government helped Iraq secure the funds to place orders for such sales.

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The first British line of credit to Iraq, worth £275 million, was agreed in 1983, and a further £1·1 billion has followed. The credits were arranged by UK banks and guaranteed by the ECGD, the government Export Credits Guarantee Department.
The credit lines were negotiated by the UK-Iraq Joint Commission, headed by the two states' Trade Ministers."
I want to know from the Department of Trade and Industry whether it participated in that, because if it did it has some explanation to give to the House of Commons. The report continues:
"The size of the credit lines, and the goods covered, were decided by officials from the Department of Trade, the ECGD, the Foreign Office and the Treasury.
Both the Foreign Office and the Department of Trade referred all questions to the ECGD, which said that its dealings were confidential. TDG and Matrix Churchill have also declined to comment."
You bet, Mr. Deputy Speaker, that they have declined to comment.
We are on extremely delicate ground. It is fair to ask on the Floor of the House of Commons whether all that is true. It is reported in reputable newspapers. Members largely depend on such information, but we do not necessarily swallow it hook, line and sinker. The hon. Member for Birmingham, Selly Oak (Mr. Beaumont-Dark), who has left the Chamber, should note that. We should at least ask whether such information is true. I freely confess that until recently many people did not want to see Iraq defeated, at least not by the ayatollahs and the mullahs, and did not want the Khomeini regime to win outright in the middle east. However, we must be clear about exactly what has happened over the past two years in terms of British law.
Mr. Deputy Speaker: Order. That does not fall under the heading of the debate.
Mr. Dalyell: I shall not exasperate you, Mr. Deputy Speaker. I have made the points and other hon. Members wish to speak. I hope that either in the debate or in writing we will get answers to the two questions that I have posed. One is about Anthony de Normann and Christopher MacKenzie Geidt and Astra in relation to Cambodia, and the other is about our exact relations in the export of arms and arms-related goods to the state of Iraq. Both questions are extremely significant and deserve an answer.
6 pm
Mr. Anthony Nelson: The hon. Member for Linlithgow (Mr. Dalyell) took us away from the rather narrow matters dealt with in the documents, but I am sure that what he has said is relevant. Even if it is not, I am always willing to forgive and show latitude to the hon. Gentleman because I shall never forget that as a result of his heroic actions some years ago we still have a United Kingdom. The hon. Gentleman is a great Member of Parliament.
This is an important debate and I am sure that the House will be grateful to my hon. Friend the Under-Secretary of State for Corporate Affairs for the clear way in which he explained the contents of the statute proposal and the directive on employee participation. Such issues are complex and technical, but constitute laws that have a direct impact on every employee, investor and creditor. In one way or another we shall all be affected by the form of company law which evolves in Europe and in Britain.
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I am sure that all hon. Members are concerned about proposals for regulations rather than for directives. As I understand it, regulations apply immediately to all member states which must comply with their terms. However, directives simply mean that each member state has to pass legislation that is in line with them. Therefore, we should always scrutinise with great care any proposal for a regulation. The regulation before us has been debated for some years and there is no timetable for its remaining course. It is a radical proposal and we should be loth to give it the green light.
Many hon. Members will know that I am in the vanguard of those who would like to see greater unity and progress in the European Community. I applaud efforts that have been made on the monetary front and on many political fronts to bring about a single market and greater commonality of law in the Community. That does not mean that every proposal is automatically right. Those who find the idea of European unity abominable should occasionally give credit to some of the Community's achievements for Britain.
The proposal to establish a statute for a new societas Europaea that will be a parallel company structure within the Community seems to be fraught with problems. It seems rather curious that the Treasury is proposing a document for a parallel hard ecu to work alongside national currencies while the Department of Trade and Industry is reluctant to have a parallel hard European company structure alongside national structures. I do not mean to be jocular or difficult when I say that. It is dangerous to have a separate European company structure in any single country. Why do we have company law and set out in statute the subscriptions, the requirements placed on directors, and the nature of limited liability? It is not principally to help shareholders or to protect employees. Perhaps above all it is to protect creditors because the conferment of limited liability is a valuable privilege. It means that shareholders in a limited liability company, whether it is a plc or a societas Europaea, have their risks limited. Before that privilege is granted, it is right that many legislative requirements about disclosure and the discharge of responsibilities to shareholders and others should be made.
Britain has evolved just such a system of protection. Occasionally, it needs to be amended or improved in the face of change and pressures. Our limited liability companies and plcs form a valuable structure giving protection to those who offer credit, give cheques or lend money to such companies. Those people know where they are and can easily assess the risk on which they supply the money. If alongside that limited liability structure we introduce a wholly new structure, the societas Europaea proposal, yet another type of company will be operating in the United Kingdom and in all the other European countries. Will creditors of those companies be able to assume that they have the same protection? Will employees be able to assume that they will have the same rights to information? Will shareholders be sure that their criminal and civil liability is limited in the same way as it is under the existing plc and limited company structure? Those points are not clear. If they are exactly the same in each respect, why does one need to duplicate matters?
Surely one should arrive at one system of protection for all those who are involved in limited liability companies, and should seek to persuade through commonality—which is what I think my hon. Friend the Minister was

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driving at—other European countries to adopt the same stringent and responsible standards as us. As soon as we are all on a standard basis and when the law on the protection of creditors is exactly the same in each country, we can call a plc an SE or something else. However, that change must take place through organic commonality rather than through imposed regulation. I see grave risks and great uncertainty and misunderstanding about the imposition of a regulation in this area.
Secondly, I noted with interest what my hon. Friend the Minister said in reply to my intervention about the directive on employee participation. In general, we need not be too afraid to import even into our national company law some greater employee participation rights. The directive contains three options, the first of which assumes a supervisory board structure. I can live quite happily with the second one which could easily be accommodated in a unitary board structure company system. As I understand it, the second option proposes the setting up of a body to represent employee interests and says that they shall have certain rights of information. It does not say that they will have control over decisions made by the board or that they will have to account to other bodies in a particular financial way. It merely says that a body representing the employees in a company shall have certain rights of information.
There may be an argument about the information that should be provided and the basis upon which it should be done, but I am sure that my hon. Friend the Minister would be the first to agree that any company worth its salt ought to be doing that sort of thing anyway. Most of the companies that do not are probably exactly the sort of companies for which a directive or law is necessary to make sure that they divulge information to employees. I am a loyal supporter of a party that, more than any other in our post-war history, has encouraged employee participation, promoted worker shareholdings and relished the success of companies such as the National Freight Consortium that have been enormously profitable, built up and expanded on the basis of privatisation and employee shareholdings. This need not be a matter of partisan difference. I am amazed to see the hon. Member for Gateshead, East (Ms. Quin) shake her head when I suggest that there should be agreement across the Floor of the House about the success of employee participation and of companies such as the NFC, built up on ownership by the people who work in the company.
Ms. Joyce Quin: If the Government are so keen on employee participation, why have they blocked all European initiatives on this subject?
Mr. Nelson: I am not aware that they have. As the record shows, the growth of employee participation has been faster in this country than in any other European state over the past 10 years, and that growth has been accompanied by a higher standard of take-home pay, and by an increase in proportion of worker participation in the companies from which they draw the fruits of their labour. That is wholly desirable. That is what the Conservative party believes in. We believe in private ownership and the responsibility attached to that. We view suspiciously the
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corporatist ethics of either large institutions or of Governments who vest unto themselves more and more power. We believe in plurality. That is what we stand for.
Ms. Quin: Oh!
Mr. Nelson: That is right. That is why we should support this motion. I am sure that the hon. Member for Redcar (Ms. Mowlam) would agree that we should not oppose the directive on employee participation.
Mr. Jeremy Hanley: Perhaps my hon. Friend has spotted that there is a basic difference in the definition of participation in industry as given by the hon. Member for Gateshead, East (Ms. Quin) and the definition given by my hon. Friend the Minister. According to the Conservative party, participation means that each worker has a share in the company, and therefore a definable vote, and a right to receive financial information. According to the Labour party, participation in industry means that workers, rather than having shares in a company, should have imposed on them a trade union leader—a fat cat—who sits on the board. That gives workers no genuine participation.
Mr. Nelson: I could not have put it more eloquently. My hon. Friend is right. The Opposition believe in social demarcation. They have a vested interest in the continuation of a working class deprived of the fruits of its labour, kept in economic servitude, depressed and not made part of a capitalist sharing system under which, when they give something, they can take back something. They believe in the feudal patronage of company law, and we should have no part in that.
6.12 pm
Mr. Jeremy Hanley: My hon. Friend the Member for Chichester (Mr. Nelson) and I are good Europeans and do not wish to oppose the motion out of a feeling that Europe has no part to play in the future of the United Kingdom. Quite the reverse—I should like to see set up either a European company or, as my hon. Friend said, a societas Europaea. I regret that now is not the time for that, for many good reasons.
I greatly enjoyed the speech made by the hon. Member for Antrim, North (Rev. Ian Paisley). It was interesting and we can all learn a great deal from some of the things that he said. His experience in Europe is second to none. I am reminded of the first day I came into the Chamber, some seven years ago, when I sat next to him. I was surprised to see him there and said, somewhat innocently, "I didn't realise that you were on our side." He said, "Never confuse sitting on your side with being on your side." The hon. Gentleman has shown us today that he is more on our side than is sometimes felt to be the case.
The hon. Member for Linlithgow (Mr. Dalyell) is, as has been said, a remarkable parliamentarian. His interesting speech was not so much supranational as supernatural, in that he mentioned items that are not part of this debate. He raised important matters, but the instrument that we are discussing is rather more mundane. Our debate is about whether we feel that it would help progress in Europe.if we had companies that could be called European companies—societas Europaea—or continue down our route of separate organisations such as plcs, ltds, ags, sas, and all the other letters and whether we

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should have a company which trades as a European company in the new harmonised, free, single market Europe. We have all agreed that that would be desirable.
Mr. Dalyell: The hon. Gentleman has said that the matters about which I asked are important, and I am sure that he means it. Would he like a letter from the Minister answering these questions? I have asked that we have an explanation. As the hon. Gentleman thinks the matter important, he might like such a letter.
Mr. Hanley: The hon. Gentleman said that he has been fortunate enough to have been given the opportunity to ask, at the appointed time, the question that he asked the Minister today. I shall be waiting for the Minister's answer on that occasion, and I shall be looking forward to the answer to the question for which two weeks' notice has been granted. These issues are so important that a Minister who has come briefed for a debate on a European company should not have to think on his feet. Furthermore, the answers to these questions will reverberate for some time to come. I agree that this is an important issue, but I am sure that the hon. Member will not expect the Minister to deal with it now.
When Europe is a single trade entity and we have harmonised our direct and indirect taxes and our laws by the gradual process that has begun, we could have a European company. However, we should not impose a European company at this stage, for a number of cogent reasons. The hon. Member for Redcar (Ms. Mowlam) said that the Institute of Chartered Accountants in England and Wales, for which I am Parliamentary adviser, is opposed to the draft regulation because it is opposed to worker participation in industry. She mentioned the institute in the same breath as the CBI. I rebut the allegation that the Institute of Chartered Accountants is opposed to the instrument purely for that reason. It is not opposed to discussion of the matter, but it is opposed to worker participation being imposed on us. It would be wrong to create a European company and then to impose on it a range of social and fiscal matters. Such issues must be sorted out first, and the European company created afterwards.
Dr. Lewis Moonie: Will the hon. Gentleman give way?
Ms. Mowlam: Will the hon. Gentleman give way?
Mr. Hanley: I am being bombarded in this exciting debate.
Mrs. Mowlam: I do not wish to mislead the House on the position of the Institute of Chartered Accountants in England and Wales. It is true that I mentioned the institute and the CBI in the same breath, but then I referred to the CBI's specific point about worker participation. I did not go further in taking up the response of the institute because its press release is so general. The only phrase that crystallises its position is that
"the Institute suggests that those dealing with the technical aspects of the law governing the European Company are likely to find daunting the possibility of a multiplicity of models from country to country."
The rest of the press release is not especially descriptive. That is why I left the matter as I did.
Mr. Hanley: I am grateful to the hon. Lady for her intervention. I accept her good will, which she has made clear in explaining her position.
The institute's submission of February 1990 to the Department of Trade and Industry was its response to the DTI's consultative document of December 1989. The hon. Lady feels that the contents of the submission are not especially snappy, but I can assure the House that the document covers a great deal of ground.
The hon. Lady said that the only reason why the Government are opposed to the proposed legislation is that it includes provisions which bear on participation in industry. I suspect that the hon. Lady supports it because it includes those provisions. The institute has dealt with many other practical matters with which accountants have to deal in their professional work. Accountants are rather like the men who follow elephants around the circus ring: they have to use buckets and spades to clear up the messes caused by corporations, some of which are extremely large. The proposed legislation would introduce more complications and would lead to confusion in the minds of shareholders and creditors.
Since the previous consultation process, many submissions have been made to the Department of Trade and Industry and to the Department of Employment. The House will understand that both Departments share responsibilities for the proposed legislation. It is accepted in most of the submissions that there is some attractiveness in having a European company—a company which gives the impression to those who trade with it that it is a pan-European organisation. A company that chooses to set itself up as a European company must surely have in mind the objectives and ideals of Europe. That would be assumed by those who decided to deal with it. It would be thought that it must have a greater European experience if it chooses to be identified with the Community rather than with a single piece of national corporate law. There is no doubt that it would be an attractive vehicle. It might be thought that people would deal with it because its name and structure would suggest that it had greater experience and knowledge of trading in Europe than other organisations.
The proposed legislation tells us that it would be necessary only to form a group with two companies as part of it, with one in one country and one in another. That hardly means that the group would be pan-European. It means only that two separate companies which are under one holding company happen to choose to use the proposed structure. The group might appear to be European, but it might not necessarily be more European than any existing trading structure.
In its restrictions on the formation of the European company, societas Europaea, the proposed legislation contains a major problem. We are told that the structure which requires that a holding company has to be created will stop individual companies forming as a European company. I am not against companies wanting to be seen to be more European than perhaps they might be now, but I find artificial the strange structure of the holding company and the two subsidiaries. I should rather have a European company which does not necessarily need the particular formation of a holding company and two subsidiaries. I should like to see a European company as a genuine option when company law is far more closely aligned in the member states.

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The cross-border merger issue is important. One of the stated objectives of the proposal before us is to give companies from different member states the option of combining their potential by means of inter-state mergers. It may be that the European company would be seen as a way to facilitate cross-border mergers. I am doubtful about that, however, and so is the Institute of Chartered Accountants in England and Wales. The institute has been much involved in the massive programme of mergers between companies and partnerships in the build-up to the single European market, and I doubt whether it has found the absence of a societas Europaea to be a major impediment. In other words, if the proposed legislation is introduced to try to help mergers throughout the European Community, why has there been such successful merger mania over the past 10 years?
Almost every large British company now trades in all of the European countries. These companies do not feel the need to have a societas Europaea. They trade as they have traded in the past but they take advantage of the single European market programme. To be opposed to this proposed legislation does not mean that we are bad Europeans. I remind the House that the United Kingdom is at the top of the list of member states when it comes to adopting the directives for the single European market. We have only nine still to achieve, so we have done far better than any other European country. Italy still has 50 to achieve. That demonstrates that Britain is a good European in terms of trade.
Worker participation has been mentioned by the majority of those who have contributed to the debate. The draft directive that accompanies the proposed legislation provides that there has to be the involvement of employees in the
"supervision and strategic development"
of a European company. We are told that there is a choice of four models for worker participation. The first is the
"election of at least one third and not more than one half of the members of the administrative or supervisory board by employees."
Secondly, there is
"co-option to the boards, with the right of general meetings of shareholders and of employee representatives to object to any particular appointment subject to a procedure for declaring an objection inadmissible."
That is rather complicated.
Thirdly, there is the
"establishment of an employee representative body with rights to information and reports from the board."
As the hon. Member for Antrim, North said, what opposition has anyone to that proposal? I thoroughly agree with him. There is no good company in the United Kingdom that does not take into account fully the rights and futures of its employees. It is a truism that any company that rides roughshod over its employees will not survive in the climate of the United Kingdom in the 1990s. Major companies now give far more information to their employees, including specially created employee accounts. These accounts are not necessarily less sophisticated than others, but they are easily understood. They are designed so that employees will understand important information that is specific to them. I feel that companies care about their employees. Employees have rights as pension earners and as shareholders, and the atmosphere has never been better.
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The fourth model in the directive is an
"agreement between the boards of the founder companies and their employees or representatives to a model which would provide the latter with rights to specific information and to be informed and consulted on the matters laid down in the Regulation."
In other words, the two parts of the holding company, the two subsidiaries, would have a special structure that would give rights of access to employees by law.
In a memorandum way back in March 1984, the institute expressed the view that there was no reasonable justification for the imposition on member states of
"complicated and proscriptive provisions to attain an object whose desirability is not generally accepted either by employees or management."
In other words, the principle has not been demanded by employees; it has been demanded by employee representatives and by trade unions, which view it as an additional power. No one had convinced me that the worker participation suggested in the Vredeling proposals, and which is dreamed of by the Opposition, would give more democracy and more information to individual employees—rather, it would give that to employee representatives, and we know what democracy is about at that level.
I do not believe that the movement towards worker participation in industry is greatly enhanced by being enforced by statute. I should prefer that the argument about worker participation be discussed separately and fully and, when it has been resolved, that the European company be imposed on top of that. It would be a disservice to such an important matter if the European corporate structure imposed worker participation in a roughshod manner.
My hon. Friend the Member for Chichester, referred to another matter. He and I served on the Standing Committee of the Companies Bill. We spent many happy moments discussing the subject of non-executive directors. We remembered the excellent work of Sir Brandon Rhys-Williams, a late Member of the House, who every year for 16 years introduced a Bill whose aim was to impose non-executive directors on the boards of major companies. He was a remarkable man and I was honoured to support him on five of those Bills. He was a legend in company law. It was said that many people looked forward to his company law Bill each Session—and in general few would admit to looking forward to company law legislation. Someone once said that company law was to an accountant what haemorrhoids were to a general practitioner; it is a rather unattractive end of the market, but it pays. Brandon was the expert in what, for most people, is an end of the market that they would rather ignore.
I can remember seeing in north Kensington one item of graffiti against Brandon—a large slogan, "Abandon Sir Brandon." I am sure that that most beautifully written graffiti had nothing to do with the Government's opposition to his Bills each year. It is worth remembering that, for the first time, the House passed his Bill—the 16th—and sent it to another place, yet the very day their Lordships rejected it was the day that he died. Happily, he did not know that his Bill was to be rejected. It was a sad end for a gallant man.
Even Brandon would not have accepted that the creation of a European company should be the medium through which non-executive directors could be imposed upon United Kingdom companies. He believed that they should be there as a form of audit committee. Again, the

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argument should not be whether this statute should impose important requirements by way of a sideline; it is too important a matter to he imposed through this legislation.
Article 66 provides that the executive members of a one-tier board, if that is the choice of the company, should be fewer in number than the other members of the board. To put it in the terms of the CB, single-tier boards—which must have more non-executive than executive directors, with at least one third of the directors being appointed by employees—would be an alternative model. Those arguments will rage, but for many companies they are a matter of practice. Many large companies have non-executive directors, but no single company is identical to any other single company. 'The needs of one company are not necessarily the needs of another company. How does the regulation that exactly one third of the board should be non-executive members advance the cause of democracy within a company? Companies should have expertise, and if that must be non-executive, so be it. The board of directors must answer to its shareholders. The non-executive directors that many companies have used successfully for many years must properly earn their keep. To impose non-executive directors through legislation would be a back-door measure.
Mr. Derek Conway: I am sure that the House recognises my hon. Friend's great expertise in this subject. Being able to share his views tonight is an educative experience. He is making a powerful case about back-door bureaucracy, which the EEC is trying to impose on nation states. Is he aware of companies such as Airbus Industrie—a supranational organisation that I was fortunate to visit during the recess as a member of the Industry and Parliament Trust? It is based at Toulouse and comprises a French-based company—sadly nationalised—a German company, British Aerospace and a Spanish company. They have come together to make the airbus. That happened before the United Kingdom even joined the European Community, so the concept of a supranational organisation not only works and, for this organisation, is extremely effective, but it does not necessarily have to involve all this European bureaucracy. That is the point that my hon. Friend is impressing on the House.
Mr. Hanley: I recently spoke to some of the directors of the airbus project, and they said that the highlight of recent months was my hon. Friend's visit. He has made a powerful case for the continuation of a structure that has so successfully traded among European countries. However, my hon. Friend might not agree with my view that there is nothing wrong with having a European company, although I hope to show why now is not the time for that.
Let us consider some of the more detailed points, which have nothing to do with worker participation or non-executive directors, but are to do with accounting requirements. The Institute of Chartered Accountants for England and Wales knows them better than most. The accounting requirements by which companies are regulated are among the most important regulations in company law. Successive Companies Acts have tightened those requirements. A judge once said that publicity was
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the most potent safeguard against fraud. What companies must produce in their accounts reduces the propensity for fraud; it is the accountability aspect of the company.
It is essential that the directors of the company produce and present accounts to the shareholders and that they are registered at Companies house so that everyone can see them. The regulations before us would apply to a European company the requirements of the fourth and seventh directives, which deal with both individual and consolidated accounts. However, they would retain the options within those directives. That is important because the options mean that if one registers a societas Europaea in Great Britain, the company would be required to disclose less information than that upon which we insist in our domestic legislation. In other words, there are so many areas in the accounting requirements of a societas Europaea, as set out in the regulation, that I fear that entrepreneurs will make a list of those items of information that they are required to publish under the societas system and those items that they are required to publish under domestic company law. It would be very wrong if the requirements of the House, as imposed on public limited companies, were circumvented by easier legislation.
Recent legislative requirements, such as the widening of the definition of a subsidiary—aimed at preventing off-balance-sheet financing—could effectively be avoided by means of the vehicle of the societas Europaea. A number of other requirements of United Kingdom company law are not even mentioned in the societas—for instance, analysis of directors' remuneration, and detailed information about transactions involving directors.
The House considers it right for the income of directors to be set out properly in published accounts. The House believes that, if directors have loans or use credit cards on the company, the information should be shown, again in published accounts. The House has agreed to that, and has incorporated it in successive items of legislation. This regulation, however, does not insist on the publication of directors' remuneration or interests, or on the publication of information relating to political and charitable donations. I am sure that the hon. Member for Redcar, who fought so hard for political and charitable contributions to be split in the Companies Act 1989, would hate to think that, under this legislation, political donations would not even be mentioned in the published accounts of the European company.
Ms. Mowlam: I do not wish to hold up the debate, but I must tell the hon. Gentleman that I was not the woman member of that Committee; I know that after a while we all look alike, but it was my hon. Friend the Member for Gateshead, East (Ms. Quin). Let me add—although I was not there—that, if the hon. Gentleman had looked al the amendments on employee share ownership plans that we tabled to the Companies Bill, he would know that we supported wider share ownership and the disclosure of information.
Mr. Hanley: The hon. Lady protests too much. The clause to which I was referring returned to the Floor of the House on Report, having been defeated in Committee. If she was following her party Whip, I am certain that the hon. Lady would have traipsed through the appropriate Lobby like any other faithful soul. It was, in fact, a Lords

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amendment that was discussed here. I am sorry if the hon. Lady was not present; I had forgotten that her knowledge of company law was so recent—on her own admission.
We fear that the cumulative effect of the relaxations relating to disclosure might lead a person who was not acting in full good faith to choose a particular vehicle merely because it was easier on him. That goes for taxation as well. Article 133 of the regulation provides that, where a societas Europaea has one or more permanent establishments in a member state or a non-member state and the aggregation of the profits and losses for tax purposes of all such establishments results in a net loss, that loss may be set against the profits of the societas in the state where it is resident for tax purposes. That is fine; the only trouble is that in every member state there are different calculations relating to profit, and to the taxation of that profit.
That means that yet another industry will be created, or rather built on: the industry that produces taxation information for corporate clients. In this instance, the companies will ask their advisers, "Do we want to set up this new body? If we do, we shall receive better tax treatment than we receive if we trade in individual countries." I am convinced that progress towards the harmonisation of income tax, corporation tax and value added tax should come first. Only then should the European company be imposed on a Europe in which fiscal harmonisation is a reality and not merely a pipe dream. If we cannot even achieve fiscal harmonisation in relation to VAT, fiscal harmonisation in relation to corporate and individual taxation is bound to be even harder.
Although the regulation is drafted in very general terms—much more general than the terms to which we are used in this country—numerous aspects would give rise to litigation, because of the current differences between member states. The fact that some national law is applicable and the reliance placed on reference to other directives are, I think, likely to make it difficult for businesses to ascertain the overall nature of the provisions under which the societas Europaea operates. It would not, in fact, be imposing a separate set of company law rules; each company would be obeying its own domestic company rules, and that is likely to lead to confusion. United Kingdom company shareholders are already confused enough by our own company law. What will they say when they are shareholders of a company which may have to answer to the regulations of at least 12 sets of legislation in other countries? According to the Institute of Chartered Accountants in England and Wales,
"significant differences amongst Member States in those areas of national law that would apply to an SE, and in approaches to enforcement, would frustrate the objectives of the Regulation."
There is little doubt in my mind that the concept of the European company ought to benefit both Europe as a whole and the companies that choose to adopt it. I like to think that a company would decide to form an SE because it was a good European company, because it traded over all the national boundaries, because its staff were well versed in European matters—because it was indeed a genuine European company. I fear that, as the regulation is currently phrased, companies may choose to become European companies merely because of the odd little
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advantage that they might obtain through the relaxation of one piece of legislation—perhaps on the presentation of accounts—or the gaining of more allowances for taxation purposes, rather than because of the merits of the concept.
It would be most unfortunate if the popularity of this idea stemmed wholly from the desire to operate under a less demanding regime. I must therefore oppose the regulation, albeit with reluctance. I hope that my hon. Friend the Minister will accept that we are not merely discussing worker participation; that is only a sideline. The most important issues are the fact that accounting regulations differ between member states; the publicity that directors must provide in the publication of accounts; and the need to achieve final harmony before we start talking about a societas Europaea.
6.47 pm
Mr. Donald Thompson: I shall be brief. My hon. Friend the Member for Richmond and Barnes (Mr. Hanley) has already made most professionally and eloquently many of the points that I intended to make.
What we really want is deregulation, not more regulation. The annex to the document contains regulation after regulation. Many are worthy and necessary—the disclosure requirements and those relating to annual accounts, for instance—but surely the time has come for Europe to consider deregulation when introducing new directives.
It may seem at first that my two main points bear little relation to each other. I am a member of the British delegation to the Council of Europe, which many of the emerging states of eastern Europe are keen to join. Hungary joined at the last session. Those countries will, of course, want to become members of the EC quite soon. The word "pan-European" has been used. I use it to mean the whole of Europe, from the Urals to Madrid. It would be dangerous if such a regulation became a model for those emerging countries. It must be rejected as being unnecessary.
Firms in my constituency do not want the Commission telling them how they must set up a company before they can trade. They fear that it would not be long before societas Europaea status was a prerequisite of tendering for a contract, which would be ridiculous. Compulsory worker participation is not what this country needs, even if the Commission thinks that it is right in principle. The regulation must be rejected or altered drastically for the sake of those countries that are waiting to join the Community, and for those firms in my constituency that want to trade freely in a deregulated capitalist Europe.
6.50 pm
Mr. John Browne: The House has heard a fascinating and wide-ranging speech by the hon. Member for Linlithgow (Mr. Dalyell), and I look forward to hearing the Government's answers. I enjoyed also the speech of my hon. Friend the Member for Chichester (Mr. Nelson), who has exceptional knowledge of corporate law and of the taxation and financial sectors. I disagree with some of my hon. Friend's concepts, such as European monetary union. He may be right in the direction that he takes, but not in the timing.
My hon. Friend the Member for Richmond and Barnes (Mr. Hanley) made an outstanding contribution, and I will

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not waste the time of the House by reiterating my views on taxation and corporate law because they are very similar to those of my hon. Friend.
I must declare at the outset that I have financial interests that could be affected if the regulation were to become law.
I support the proposal in general terms as being part of the synergy of the European Community of 1992. It is designed to help companies governed by the laws of different member states to choose a structure for co-operation and restructuring that is suited to the dimensions of the larger market to be achieved in 1992. It aims at freeing companies from legal and practical constraints arising from the existence of 12 separate legal systems by offering them an optional structure based on Community law, and independent of national laws in so far as they have not been harrnonised.
That is great news from an EEC point of view, but the implications of such a proposal are worrying. Imposing by the back door and almost unnoticed practices that are at the heart of fundamental political issues that we in this House have fought over long and hard for decades cannot be right. Worker participation in particular, mentioned in several speeches, is among the most important of those fundamental issues and merits debate and legislation in its own right. It should not be slid through Parliament on the back of something else.
Ms. Mowlam: Does the hon. Gentleman seek specific legislation on worker participation? If the Government consider that so important, why have they blocked the fifth directive—the Vredeling document on consultation? That aspect has been divided into a directive and a regulation to meet the Government's opposition to worker participation over many years. The hon. Gentleman cannot have his cake and eat it.
Mr. Browne: I can only answer for my own view, which is that the regulation does not seem to cover that aspect adequately. My hon. Friend the Minister will explain the Government's viewpoint.
I have no objection to the principle of non-executive directors, but to impose them, and the percentage of a board for which they should account, is wrong. Again, that aspect merits its own debate rather than be included as part of a broader regulation.
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Some of the tax reforms envisaged might be advantageous to some EEC countries and could encourage improvements that my right hon. and hon. Friends and even Opposition Members may consider beneficial. Nevertheless, the question remains whether the regulation is the right vehicle for tackling the vastly complex subject of tax reform, which has huge political implications. I think not. It is far too complex a matter to be dealt with in a few paragraphs of a regulation.
The accounting procedures observed in this country are of a very high standard, and they put the markets of the United Kingdom well on a par with the finest in the world. The regulation would weaken that standard.
I welcome the acknowledgement given to smaller businesses by lowering the capital requirement from 250,000 to 100,000 ecu, which shows a move in the right direction within the EEC.
I support the general aim of the proposal, but when one examines it in more detail and discovers the plans for imposing worker participation and non-executive directors rather than offering them as an option, one is bound to conclude that the regulation should not have the support of the House tonight.
I have reservations also about the timing of the introduction of the regulation, which strikes at the heart of several serious issues that are to come before the House in the near future such as the exchange rate mechanism and European monetary union. One may agree with them all in principle, but how and when are they to be introduced? I accept that, after EMU, gold will become a truly international form of currency. It is a well-known numeraire, it is readily tradeable and has a store of value.
Paper money represents an economy. That is important because paper money is politically controlled. I fail to see that we can have a credible single European paper currency without a single European economy. At the moment we do not even have a single European market, let alone a single economy. I fail to see how we can look forward to creating a single European paper currency in such a short time before we have achieved a single market.
It being Seven o'clock, and there being private business set down by THE CHAIRMAN OF WAYS AND MEANS, under Standing Order No. 16 (Time for taking private business), further proceeding stood postponed.

Midland Metro Bill
Motion made, and Question proposed,
That the Promoters of the Midland Metro Bill shall have leave to suspend proceedings thereon in order to proceed with the Bill, if they think fit, in the next Session of Parliament, provided that the Agents for the Bill give notice to the Clerks in the Private Bill Office not later than the day before the close of the present Session of their intention to suspend further proceedings and that all Fees due on the Bill up to that date be paid;
That on the fifth day on which the House sits in the next Session the Bill shall be presented to the House;
That there shall be deposited with the Bill a declaration signed by the Agents for the Bill, stating that the Bill is the same, in every respect, as the Bill at the last stage of its proceedings in this House in the present Session;
That the Bill shall be laid upon the Table of the House by one of the Clerks in the Private Bill Office on the next meeting of the House after the day on which the Bill has been presented and, when so laid, shall be read the first and second time and committed (and shall be recorded in the Journal of this House as having been so read and committed);
That all Petitions relating to the Bill presented in the present Session which stand referred to the Committee on the Bill, together with any minutes of evidence taken before the Committee on the Bill, shall stand referred to the Committee on the Bill in the next Session;
That no Petitioners shall be heard before the Committee on the Bill, unless their Petition has been presented within the time limited within the present Session or deposited pursuant to paragraph (b) of Standing Order 126 relating to Private Business;
That in relation to the Bill, Standing Order 127 relating to Private Business shall have effect as if the words 'under Standing Order 126 (Reference to committee of petitions against Bill)' were omitted;
That no further Fees shall be charged in respect of any proceedings on the Bill in respect of which Fees have already been incurred during the present Session;
That these Orders be Standing Orders of the House.—[The Chairman of Ways and Means.]
7 pm
Mr. David Gilroy Bevan: Madam Deputy Speaker, thank you for presenting us with this chance to continue with the debate on a carry-over motion of this Bill to the next Session of Parliament.
I remind the House that the scheme was originally proposed by the West Midlands county council, after being proposed beforehand by the passenger transport authority of the West Midlands, of which I was the second chairman.
A previous Bill failed in 1984 as too much demolition was required, it had bad public relations and insufficient district council support. This Bill provides for lines 2 and 3. The Midland Metro Act 1989 will progress substantially public transportation in the west midlands. At the moment we are awaiting a Government announcement regarding funding of that Act.
Lines 2 and 3, which will run through Birmingham and in the Black Country, will have all-party support, apart from a small minority of hon. Members. The Bill was launched by the passenger executive in the west midlands in 1987—now known as Centro. The object of the Bill is to relieve congestion, to bring about economic regeneration, to ensure the increased use of public transport and to ensure an improvement to the environment.
Light rail transit is usually quiet, ecologically attractive and blends in well with the environment. In places where light rail transit systems are operating, for example in Grenoble, it has been heralded as a successful system by all who have seen it. The Grenoble system is the type that this
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scheme will emulate. I am told that my hon. Friend the Member for Meriden (Mr. Mills) was very impressed by the Grenoble system when he made a recent visit there and thought that it would make a great contribution to the cause of public transport. We are much obliged to him for those remarks because I know that he had some reservations about the project.
The trains will be between 28m and 30m long and as light as 26 tonnes. The overhead supports will not be higher than 18ft 6 in, and trains will carry about 75 people seated and 175 people standing. The train will increase people's mobility and will have a low floor level—almost parallel with the loading area—making it easy for people to alight. In modern parlance, it is environmentally friendly, fume-free and reliable, and compares favourably with other forms of transport, especially road transport, as it is safer, costs less and has less environmental impact.
Hon. Members who vote in favour of the carry-over motion today will remember that in many studies recently roads have not been proposed as the solution to the transport needs of urban areas. In the London area a vast road building programme was not chosen by the Secretary of State in favour of "a redline system" of alleviating traffic parking.
The system will cost less than heavy rail and will have less environmental impact. It will be more flexible and will share the roads with other traffic. There can be a greater penetration into the centre of cities. The trains will be more reliable than buses. They will be cleaner and fume-free. They will have a greater passenger capacity and will be faster. The light rail system has a more modern image, as up-market transport. Rightly or wrongly, buses do not enjoy the same image. The system has much to recommend it and the carry-over motion has much to commend it.
Line 2 will go from Birmingham Five Ways through the city centre to a vast new Heartlands development area of more than 2,000 acres in Bromford and then on to Castle Bromwich, Chelmsley Wood, Arlington business park, the national exhibition centre—I am sorry if I sound a little like a conductor—Birmingham International railway station and Birmingham International airport, all of which are important destinations. The line will be 26 km long with 34 stops. The new underground section will serve the new international convention centre in the centre of Birmingham, making Birmingham one of Europe's most strategically placed cities, the town hall, New street and Corporation street. It will come to the surface in Birmingham's second university area—Aston university—and will cost £100 million.
Mr. Peter Snape: I am following the hon. Gentleman's speech with great interest. I wonder if he has been as persuasive with the Department of Transport as he has with the House. As he has come to the financing of this worthwhile project, can he tell us whether there is any likelihood of that Department coughing up some section 56 grant so that we can get the line built and stop talking about it?
Mr. Bevan: The hon. Gentleman is trying, in the nicest possible way, to put the cart before the horse. It is no use trying to get any pronouncements on financing unless there is a Bill to be financed. That is the motion before us tonight.
As I said earlier, we are awaiting an imminent decision on financing for line 1.

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Line 3 will do a very important job, joining Wolverhampton and Dudley town centres, passing through Wednesfield, Walsall, Darlaston and Wednesbury. It will cross line 1 at the Sandwell 2000 development in Tipton and will be 26 km long with 32 stops. There will be 11 vehicles with a 10-minute frequency and the hon. Member for West Bromwich, East (Mr. Snape) will be interested to know that it will cost about £136 million.
Feasibility studies were made to enable a route to be chosen, and high scoring corridors have been chosen. District councils selected the routes on the basis of minimal effect upon residential property, of potential ridership, of cost and of environment effect. Future development proposals were considered together with the practicability of construction.
All construction matters have been taken into account by the local authority. The hon. Member for West Bromwich, East ought to be aware, if he is not already aware, though he seems to be celebrating his awareness with laughter and happiness, that all seven district councils, on every side of the political spectrum, are totally behind the project. I am told that the one Liberal councillor from Birmingham who is on the passenger transport authority is also in favour of it.
Intensive market research is being carried out. In July 1990 a ratio of 4:1 west midlands residents were in favour of the project. That is a new figure. The previous ratio was 3:1. It appears that 47 per cent. favour the project. Vast numbers of leaflets have been circulated. Numerous meetings have been held in all the affected areas. A huge public consultation exercise took place with many authorities, including Birmingham, Solihull, Walsall, Wolverhampton, Sandwell and Dudley. Public consultation has not been skimped.
The public are rightly concerned about noise, but these trams will be almost noise free. They are nothing like the old Brummie or Blackpool trams that were operational in the 1940s and 1950s. I assure my hon. Friend the Member for Meriden that the tracks will be bedded in rubberised compound and ballasted, wherever feasible. Furthermore, noise insulation grants should be payable under schemes similar to that operated for highways, in appropriate circumstances.
We are determined to increase the quality of life by improving public transport. The lines will be among the finest ever introduced anywhere in the world. They will be far safer than cars and there will be far fewer pedestrian accidents. As the vehicles will be on rails, they can be controlled far more easily than cars or buses. The driver, who will have to be trained to a high level, will not have to steer the vehicle. The system has been approved by the railways inspectorate, according to extraordinarily strict criteria. It will bring a completely new look to public transport.
In 1989 a scheme was introduced to purchase properties that are directly affected by the proposals, if the owners wish to sell. However, no residential property is affected by demolition on line 2. Only slum clearance property is affected on line 3. There is conclusive evidence, nevertheless, that in areas where light electric rail has been introduced property values have increased much faster than normal when new public transport infrastructure is provided. Under the scheme, 12 properties were purchased on line 2. There are no current applications on line 2.
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There have been many references to the environmental effects. The lines allow for the introduction of much more pedestrianisation, especially as they will be accompanied by traffic management measures. They take up much less space than highways. Noise levels are much less intrusive than those connected with buses or trucks. Moreover, they are pollution free and are accompanied by extensive landscaping. They will therefore contribute to the greening of the areas that they will serve. They will result in economic and landscape regeneration.
The colours of the tie that I am wearing happen to be the colours of Centro, the body that is promoting the Bill. I hope that it reflects the fact that a substantial amount of green is included among the attractive blue. I hope that it will harmonise with the blue and result in an excellent turquoise-type environment.
The consultation exercise began in March. There was widespread publicity in the local press—the Birmingham Evening Mail and the Birmingham Express and Star. Leaflets were distributed in civic centres. Fares generally will react to market forces and may be slightly higher than bus fares, although we hope that they will be as low as possible. I introduced the travel card scheme when I was chairman of the authority. I hope that it will include the metro. I hope, too, that concessionary passes will be 'valid on the lines.
The area has a good record on concessionary passes. When I was a member of an all-party transport committee in the 1950s, we introduced free bus travel for pensioners. I was also able to introduce free travel for pensioners on the railways except at peak times. I hope that that good record will be continued.
The scheme is intended not to replace but to complement bus services. The operator will probably run feeder services and there will be park-and-ride facilities.
We trust that the private sector will be involved in the funding. We understand that the EEC is to provide about 30 per cent. of the cost. The United Kingdom will provide a similar figure. The local authority will also be involved in the funding, through its passenger transport authority. The passenger transport authority is likely to receive substantial funds if it goes ahead with other proposals that are currently before it. It will amount to many millions of pounds.
At 1990 prices, the cost amounts to £81 million for line 1. At 1989 prices, the cost is £273 million for line 2, for 26 km, and £136 million for line 3, again for 26 km. The cost of vehicles amounts to £30 million. It is interesting to compare these costs with equivalent road costs. Line 3, costing £136 million, can be compared with the Heartlands spine road, costing £85 million. As I have said, the length of line 3 is 26 km, whereas the Heartlands spine road is only 4·1 km in length. The cost of line 3 per kilometre is therefore £5·36 million, compared with a road cost of £20·66 million. It is about a quarter of the road cost. The maximum number of passengers who can be carried both ways per hour by the light railway is 30,000, whereas the maximum capacity of the Heartlands spine road is 14,500, so the light electric railway is equivalent to two dual carriageways.
The council has offered its unanimous support. Local groups have given substantial support, including Aston Villa football club, the Automobile Association, urban wild life groups and the west midlands CBI.
Mr. David Winnick: As the hon. Gentleman knows, I support the Bill and voted accordingly on 5 March. However, I have some constituency reservations, which I have set out and will not repeat tonight because there will be other opportunities to do so, such as on Report. Is the hon. Gentleman aware that in my constituency the Bill is supported not only by the local authority and the majority of the people in the borough but in Willenhall? I do not think that there is any doubt about that, and my hon. Friend the Member for Walsall, South (Mr. George) will probably agree with me. In addition to the reservations that I mentioned on 5 March, some anxiety has been expressed about the memorial park. It is argued that only a small part of it will be used, but as we so desperately need green space one is obviously reluctant to see any of it sacrificed. If I did not support the Bill I would make my position clear, as I always do on the Floor of the House, but it is important that the promoters reconsider that aspect. If the Bill is to receive the support of my constituents, as the hon. Gentleman would wish, those reservations should be reconsidered. I am not satisfied that there are not alternatives.
Mr. Bevan: I am obliged to the hon. Member for Walsall, North (Mr. Winnick) for the point that he makes, for the support that he gave on Second Reading and for his implied support today. The promoters are determined to preserve as much as possible of the landscape and beauty of the areas through which the line will pass. I cannot speak to this specific matter, but it is a detail that is causing concern. Although a small part of that park might be used, I hope that the hon. Gentleman will bear in mind the green benefits of the line.
It is interesting to note public reaction in Grenoble, where originally only about 53 per cent. of its people were in favour of a tram system—slightly higher than the percentage of people who have expressed themselves in favour of the system in the west midlands. Two years after the system had been in operation, almost 94 per cent. of its population were in favour of it. I am certain that there will be a similar reaction from our citizens.
The Opposed Private Bill Committee spent 12 working days considering 35 objections in detail. Five objections were from a residents' group, four of which were rejected under the locus standi provisions, which do not encourage applications by corporate bodies other than individuals who might have a land holding interest. There were 27 commercial interests and British Rail, the Black Country development corporation and the university of Aston.
Only two petitioners attended the Committee. Centro objected to the residents' petitions and was aided by recommendations from the Joint Select Committee on Private Bill Procedure. That did not prevent residents' views from being put, as they have been forcefully put in debates in the House and through newspapers and other media.
Mr. Ronnie Fearn: Do those objections include the 2,000-signature petition centred around Belinda close?
Mr. Bevan: I am not sure whether that petition was included in the objections, but most of the petitions must have been considered. However, I shall try to clarify that point and answer the hon. Gentleman later.
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Two petitions were heard. The Committee asked Centro to devise a new route avoiding the site of Foseco, which was an industrial complex in Nechells. That route will be the subject of an additional submission, which has been laid before the Committee today. There was a petition from Chelmsley Wood residents, who were represented by my hon. Friend the Member for Meriden. The Committee was not convinced by the arguments for changing the route, but it sought undertakings regarding landscaping and the resilience of the track, to which I have already referred.
There has been liaison with residents on operating details such as car parking provision and the design of stops. The promoters are happy to comply with those details. Although I am taking a long time to deal with this, it is important that the House knows that it has been considered meticulously.
Madam Deputy Speaker (Miss Betty Boothroyd): Although detail is important, the motion before us is very narrow; it is only a procedural carry-over motion. The hon. Gentleman has gone into much detail. I remind him and other hon. Members that we are debating a narrow procedural motion.
Mr. Bevan: I take careful note of what you say, Madam Deputy Speaker, and I should not wish to detain the House with matters that might not be relevant to the motion.
It is important that the motion is carried, because refusing to do so could cost the community charge payers of the area concerned at least £1 million and add at least two years of procedural administration. It is my heart-felt wish, having held a long-term interest in the Bill, that it be carried.
I was born in a taxi. That was not an elitist decision by my mother but an accident of transport. Had I been born in a bus or even a light electric tram, I should have been much more highly delighted. In transport terms, I have been trying to catch up ever since. I hope that the House will pass the motion to carry over consideration of the Bill to the next Session.
7.28 pm
Mr. Iain Mills: I shall not detain the House long. As you have rightly reminded us, Madam Deputy Speaker, this is a carry-over motion. Although I have not decided whether to oppose the motion, I seek a guarantee on behalf of my constituents that certain matters will be considered.
I should declare that I visited Grenoble to inspect its system, by which I was impressed. The trams are quiet and the design of the stops and shelters good and unobtrusive. Since then, I have received a guarantee that shared carriageways will not be a hazard—for example, in Moorend avenue, which is used by 5,000 vehicles a day or in Helmswood drive, which is used by about 1,800.
The first guarantee that I seek—before I decide my position on the carry-on motion—
Mr. Snape: Carry on!
Mr. Mills: I thank the hon. Gentleman for doing me such credit, although he will be aware that I meant "carry-over motion".
I seek a further guarantee that shared carriageways will not constitute a hazard in areas where there is a large

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number of vehicles. The system apparently works in at least two cities in France, and elsewhere, but I seek guarantees, too, that existing light standards will be used as the supports for the power supplies to the metro.
It is important that the decisions of the Opposed Private Bill Committee should be enshrined in the Bill. They should be a matter of law, and not merely a matter of choice by Centro. The statements to which I refer are to be found on page 2 of the Opposed Private Bill Committee's decisions. The first is that the promoters should deploy resilient track, and I thank my hon. Friend the Member for Birmingham, Yardley (Mr. Bevan) for his assurances—I hope that they are guarantees—on that matter. The Committee also sought the undertaking that there would be liaison with local parties. To overcome my criticism of the consultation process I would further ask that a meeting be arranged shortly between CARE, Centro, the Solihull council working party and the other bodies, to discuss, detail by detail, the position of stops, the posts to carry the power supply, car parking and all the other matters outlined.
The Opposed Private Bill Committee further asked that there should be no less car parking space and that the metro stops should be
"of a similarly attractive design to the artist's impressions."
If the stops are as good as those in Grenoble, I shall be impressed; they will beat the bus shelters in Chelmsley Wood hands down. I would add to that list the requirement that our vehicles should be built to the same high standard of engineering as those in Grenoble.
I have brought these matters to the attention of the House to ensure that they are properly registered before I make up my mind whether to support the carry-over motion.
7.32 pm
Mr. Bruce George: Madam Deputy Speaker, you politely admonished the hon. Member for Birmingham, Yardley (Mr. Bevan) for talking generally. I shall seek to avoid such admonition: I shall speak partly in general terms, if I may, but I shall also be specific, to meet any potential criticism from the Chair.
Why should we support the motion? Everyone—whether a student, at whatever level, of the British constitution, a journalist or whatever—is aware that if legislation is not passed in one Parliament, it lapses. The work done on it passes into history and, in most cases, is regarded as wasted. Given the effort that has been put into this Bill so far, a decision not to allow Parliament to make further decisions and not to allow the promoters to proceed further would mean that there had been an appalling waste of time of the House and its Committees. It would also have been an appalling waste of time for those in Centro and the West Midlands passenger transport authority who have put in so much effort. It would mean that there had been a total waste of effort by those who have conducted surveys into public opinion and by the local authorities, which have consulted and redrawn routes and have expended a huge amount of intellectual and physical effort in providing the necessary information.
If we decide that the House should not proceed with the Bill next Session, an enormous amount of money will have been wasted: I understand that it has already cost Centro £1 million to promote the Bill.
If the carry-over motion is defeated, the metro project will suffer a severe setback. There have been setbacks
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before. We are all aware that the idea of the midland metro was first generated in the early 1980s. The proposals were stillborn and there was a delay of four or five years before they were reactivated. The present Bill has received an enormous amount of support. Should it suffer such a setback, a great deal of effort will have gone down the drain. I acknowledge the right of any Member of Parliament to oppose something to which he or his constituents object, but I hope that the majority of those who are here to listen to our proceedings will support the motion, and thus allow the promoters to continue, as well as giving some hope to those outside the House who look forward to the enactment of the Bill.
Of course, there have been objections. Even hon. Members who, like me, are very much in favour of the Bill and hope that work will soon commence, have had representations made to them by constituents. Some—very few—have expressed their absolute opposition. Most of those who object are in favour of the concept. but, for a variety of perfectly understandable reasons, would prefer the route not to run so close to their homes. But the great virtue of the metro is its accessibility. People should not have to walk one and a half miles to a railway station—or get a bus or taxi if it is raining—to pick up a light transit system. The route must be constructed to achieve a number of conflicting goals. It must not go so near to people's houses that it is detrimental to their environment, but it must be sufficiently close to allow them a degree of mobility that they do not enjoy at present. We have all received objections, but, although those objections are not marginal or insignificant, they have not been sufficient—in my constituency and in adjacent constituencies—to convince me that the midland metro is anything other than highly desirable.
We do not want the metro in 10 years' time; we want it tomorrow. The British are not renowned for their impetuosity. The decision-making process can be, and usually is, protracted, and more often than not the end product is wrong. In planning matters we have an almost obsessive attitude to consultation. The French do not suffer from the same hangups and I want to draw a parallel between the construction of Charles de Gaulle airport in Paris and the construction of London's third airport at Stansted. Many years ago I wrote my MA thesis on environmental pressure groups and one chapter was about the case for a third London airport which began in the late 1950s. I have now seen on television an advert announcing that after some slight delay—since the late 1950s—that airport is now operational. That is wonderful, but Charles de Gaulle airport is almost an historic construction in comparison.
We are obsessed with consultation and we do not want to proceed. We criticise the Japanese for their desire to reach a degree of homogeneity and support, but in some ways we share their attitude. The parliamentary process has imposed time constraints on those who want to use the Bill to create a light rail network in the midlands. That is perfectly correct. The process affords ample opportunity for individuals and groups to object and express their views. Any system, even a dictatorship, might in theory permit people to express views. However, under a democratic process if those views are expressed by enough people, they are acted upon. In fairness to the Bill's promoter, there has been an obsessive interest in consultation. I know that the Opposed Private Bill Committee rapped the promoter over the knuckles with

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regard to inadequate consultation for one commercial enterprise, but it would be unfair to castigate the Bill's promoter for lack of consultation.
When people had reservations in my area, Councillor Warrell jumped on his bike within minutes and went to listen to the objections. He pored over maps with potential critics and he made constructive proposals which met many of the criticisms. Each local authority in the region embarked on a leafleting programme and a series of public consultations. No one can criticise the consultative process.
However, at the end of the day, we must accept the old utilitarian theory of political action expounded by John Stuart Mill and work on the principle of the greatest happiness to the greatest number. Some fundamental criticisms may remain unresolved and some people may not be placated because the promoter cannot provide adequate rerouting or environmental activities which would minimise the effects of the proposal. However, I understand that Centro has purchased 12 houses in advance of any legal requirement. The Committee has not yet published a report because it has yet to receive all objections. However, of 55 km of track there is dispute over only 150 m.
Mr. Terry Davis: Is not that precisely because the Committee was not allowed to hear objections from the residents?
Mr. George: If Centro had decided not to listen to certain objections, my hon. Friend the Member for Birmingham, Hodge Hill (Mr. Davis) would have ample excuse for his criticism. However, it was a parliamentary body that decided that the groups in my hon. Friend's constituency did not fall within the rules which made it a responsibility of the Committee to hear those complaints.
If my hon. Friend the Member for Hodge Hill had taken the time to reread the speech that I made on 5 March in the same way that I have reread his, he would recall that I concluded by hoping that if the sponsors were successful, they would be magnanimous in victory. Even though my hon. Friend's constituents' objections were not heard by the appropriate Committee, I understand that they have had a continuing opportunity to express their views. If all the procedures are completed in this House this Session and next Session, I hope that every opportunity will be taken to meet those objections.
I have been informed that, had TRAM's objections in part of my constituency and in the constituency of my hon. Friend the Member for Walsall, North (Mr. Winnick) been met, half the people would have received access to the route and the costs would have doubled. I hope that the Opposed Private Bill Committee will make recommendations that will meet the objections. Even though the constituents of my hon. Friend the Member for Hodge Hill were not able to make a formal presentation of their views, I hope that the sponsors will make a legitimate response and that some, if not all, of the objections can be met.
Mr. Terry Davis: I hope that my hon. Friend will accept that the Official Report will show that he has not answered the point that I put to him. My constituents and other residents—although I am concerned only with my constituents—could not explain their case to the Committee. For my hon. Friend's information, that
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decision was taken by the Court of Referees, not by the Opposed Private Bill Committee. The Court of Referees heard a technical and legal objection from Centro. I have read the previous speech made by my hon. Friend the Member for Walsall, South (Mr. George) as he has read mine. When he reads the speech that he had made tonight and he looks again at my intervention, he will see that he has avoided my point and not very successfully. Obviously he has been told that there was some kind of consultation with my constituents subsequent to Second Reading. Perhaps he can outline that now.
Mr. George: I do not speak from direct experience about this, but I understand that there were exhibitions and a public meeting. My hon. Friend actually had meetings with Centro and many people wrote letters or telephoned. Centro has been willing to listen to the objections.
I hope that my hon. Friend the Member for Hodge Hill will reread my speech again. I felt a certain lack of affinity with those who argued that, on technical grounds, objectors should not be permitted to present their case. However, it was up to the relevant parliamentary authority to decide on that. I do not, and my hon. Friend the Member for Hodge Hill does not, decide on the rules. The rules were enforced and that might have caused my hon. Friend some anxiety. The decision was taken by the Court of Referees and we must accept that. However, I believe that objections should be heard. If the motion is successful, there will still be opportunities for the objectors to try to influence the eventual outcome.
The local authority in Walsall wants to negotiate with Centro about a number of criteria over the next few months. There is still an opportunity for those who object through the local authority to press Centro to make the requisite alterations and try to minimise what may be perceived as negative impacts on what is overall a small number of objectors.
Mr. Terry Davis: My hon. Friend must not try to evade the point—I am sure that he is doing it unwittingly. He referred to his speech on Second Reading. He is quite correct; he appealed for magnanimity—that was the word that he used—by Centro. What consultations took place after that speech, after his suggestion that there should be magnanimity, and after his plea that there be consultations with my constitutents? I ask him again, because everything that he mentioned took place before that speech: what was Centro's response to my hon. Friend's plea for magnanimity?
Mr. George: I do not speak with any authority on behalf of the sponsors, so I trust that my hon. Friend the Member for West Bromwich, East (Mr. Snape) will be able to respond to that question. I certainly reiterate what I said on 5 March. When legitimate objections can be met without sacrificing the overall objectives of the Bill, I very much hope that, even at this late but no means completed stage of the process, those objections will be met as far as humanly possible. I hope that, without jeopardising the process, my hon. Friend's constituents will be satisfied.
Mr. Winnick: I entirely endorsed the remarks that my hon. Friend made on 5 March. He may be aware that I also argued that there needs to be a certain amount of flexibility by Centro in this matter. It would be unfortunate if it came to the view that, because there is a

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large parliamentary majority—like my hon. Friend, I am pleased that there is—in favour of what is proposed, there is no need for flexibility. It may be argued that some of the points that have been made by residents are unrealistic. I am not convinced, however, that some of the criticisms should be dismissed out of hand—they need to be looked at again from a narrow, constituency point of view. Some residents have a point. My hon. Friend may have heard my intervention about the memorial park in Willenhall with which he is familiar.
Mr. George: I am almost taking on the role of officially responding, and I am not authorised to do that. In Walsall there were 36,000 leaflets in three different versions. Eleven consultation meetings were organised, and were attended by Centro and council officers. There appeared to be a great opportunity for people to express their opposition. My hon. Friend the Member for Walsall, North and I have made statements in the local press and written letters. I understand indirectly that TRAM was revealed at one stage to have 11 paid-up members. That was one reason why the appropriate parliamentary Committee did not allow it an opportunity to express its views directly to the Committee.
I also understand via second-hand sources that there has been no communication between TRAM and Centro over the past few months. It is perfectly acceptable that, at some stage, TRAM may wish further to express its views. Again, I repeat what I said to my hon. Friend the Member for Hodge Hill. Objections must be met as far as possible, without prejudicing the overall concept. If, to placate a certain number of people, a new route is chosen at high cost, which would then make access to a larger group more difficult, one may regard the process of capitulating to pressure to be unfair and a folly.
I shall refer later to potential criticisms of proposals that Walsall council is making. I hope that hon. Members will appreciate that there are still opportunities for objections to be made and to be met in Walsall.
Mr. Mills: Do I gather that the hon. Gentleman approves of the locus standi rule? Four out of five organisations in my constituency could not give any evidence at all and could put their case to Centro only at public meetings. The distribution of leaflets is fine provided that they reach the people concerned. Is not the hon. Gentleman in favour of something a bit more democratic than the locus standi rule?
Mr. George: Having been an hon. Member for 15 years, I am certainly aware that what is procedurally correct and what is democratic in the House are not always one and the same. I would certainly have wished for as wide a group of objectors as possible to be heard—indeed, not simply for them to be heard but, where possible, for views to be reconciled. The decision was neither mine nor Centro's, and it was taken according to parliamentary procedure and rule. Regrettably, opportunities were not afforded. The hon. Gentleman and my hon. Friend the Member for Hodge Hill have been strenuous in representing the views of those in their constituencies who are affected. Therefore, even though the objectors were not able directly to express their views before the Committee, Centro has been made more than aware of collective objections. In some cases, objections have been met.
Having listened to what I have been told about remarks in Committee, I gained the impression that not all the hon.
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Gentleman's constituents' objections were considered to be valid. I was not at the Committee hearing, sot do not wish to elaborate on that matter. At the risk of incurring your rightful wrath, Madam Deputy Speaker, I add my voice to those who say that, in the interests of efficiency and of justice, objections must still be met. Having listened to my hon. Friend the Member for Hodge Hill and the hon. Member for Meriden (Mr. Mills), one would have the impression that there is at least vociferous minority criticism about the route that has been taken. In fairness, I have not heard any criticism of the overall concept.
I understand that Centro uses a market research firm to conduct public opinion research into the attitudes in the west midlands as a whole. In listening to the views of a certain area, one must not forget the requirements of the region as a whole. One thousand people were consulted. We must bear in mind that public opinion pollsters reach a national opinion on political parties on the basis of smaller samples than that. Out of that sample of 1,000 people, support for the concept of the metro was 4:1, and in Walsall support was 8:1. That point must be borne in mind and set against those who may have objections for a specific area. Therefore, one should conclude that the metro is desired and required.
I shall now briefly recapitulate what was said about why the motion should be passed. It is to keep alive the supporters' idea that a system of transport will be provided for our region and will be commensurate to the needs of that region in the decades ahead. I spoke earlier of a national trait of the British. We are not usually forthcoming or impetuous in our decision making. Another national failing is our almost total inability to see beyond the end of our noses or to make decisions a year, month or week in advance. It is difficult for us to comprehend or to act upon decisions.
I am reluctant to use the word "visionary" when describing Centro because what it is doing in the west midlands has been done elsewhere by others who are quicker off the mark or who are working in conditions that are more conducive to swift decision making. Other authorities in other parts of the country are further ahead in the game or have reached a point that is parallel to that reached by Centro in the west midlands. I can hardly use the word "visionary" when describing something that is now almost commonplace. However, it is visionary in a regional context.
Centro is perfectly competent to do what it has to do because it is the authority which is responsible for bus transport. It has recognised that our region is progressively clogging up and, like us all, has recognised that the country has an inadequate transport policy. I am not fixing blame because I am seeking to be as non-partisan as possible. However, the failure to make decisions has resulted in what can be described either as a crisis now in our transport or as a state of affairs that will increasingly reach crisis proportions, and which will have enormous economic, political and social consequences.
Using the estimated figures for car ownership at the turn of the century, Centro has concluded that unless something substantial is done swiftly, our region will grind to a halt because the number of motor vehicles on our roads greatly exceeds the space available to them. That state of affairs will not inconvenience the casual motorist alone.
I attended a branch presentation by the Confederation of British Industry last week in Wolverhampton. A

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well-documented report has highlighted the infrastructure weaknesses in the black country. Unless we have a proper road and rail network, we shall fail to capitalise on the opportunities that are potentially available to us. A rapid transit system such as is envisaged will not be only a marginal improvement for the transport and industrial development of the west midlands and the black country, it will be an imperative.
Last week's survey by the CBI concluded that a major problem was the lack of trained and qualified personnel in the area. That is not only the responsibility of the Department of Education and Science and the Department of Employment; it is partly a function of the transport infrastructure. An adequate transport system would mean that people who possess a motor vehicle would not only have the ability to move from the periphery into Birmingham but, thankfully as a result of line 3, for the first time such people would be able to move laterally from Wolverhampton to Walsall, Darlaston and to the western part of the black country and the west midlands.
The economic need for the route is of enormous consequence. It is imperative that we give the endorsement that the majority of people want and allow this Bill to carry over into the next Session.
We have become a nation much concerned with environmental problems. I have read the Government's response to the impending environmental crisis, but I shall not comment on it now. As someone once said, the desire to create a Jerusalem of economic growth in England's green and pleasant land has so far resulted in a conspicuous lack of both greenness and pleasantness. That is nowhere more apparent than in the general area that I represent.
I find it amusing that the word "black" is pejorative in the phrase "the black country" because, as the CBI pointed out, "black" is far from pejorative in the phrase "black forest gateaux". I hope that people who live in the black country will have a more positive perception of themselves in the future than they have now. Their self-perception is less than positive now. Although the CBI survey proved more positive, ironically that perception was less positive than external perceptions of the black country.
One way of trying to resolve that is to improve the environment. A major source of environmental pollution in the black country and the west midlands is the pollution that is caused by the motor vehicle, which is ironic because that is what we manufacture and process.
I do not wish to suggest that the metro will cause many people to scrap or abandon their cars entirely, or that it will provide the panacea for resolving the environmental crisis in the west midlands and the black country. However, if the aspirations of the promoters are realised and it is possible to entice people into using a form of public transport that is relatively swift, relatively cheap, convenient and environmentally sound, the line will go at least some way towards minimising the growing degradation of the environment as a result of the pollution that is generated by the motor vehicle.
That is why it is so important to support the carry-over motion. The metro is not only desirable, it is essential, because it will play a major role in regenerating a region
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that is represented by many of the hon. Members now present in the Chamber. We have seen the west midlands slip from its position of industrial pre-eminence in the 1960s. I am not seeking to minimise or to be critical of the efforts made by the local authorities and the industrialists who are not seeking to reverse that decline. However, I believe that that process of economic regeneration will be greatly enhanced by improving the infrastructure. It is essential that the Government should cough up some money, but providing money for Centro will not relieve the Government from the obligation of improving other aspects of public transport in the region by improving our roads and providing a better rail network. However, I am not saying that, by itself, the metro will resolve all the critical problems or weaknesses of the region's transport system.
We must support the motion because the metro will help to relieve traffic congestion. It will be of enormous environmental advantage. It will considerably improve our infrastructure which, as we are all aware, is inadequate. I served on the Standing Committee considering the London Regional Transport Bill in 1984 when there was considerable agitation among Opposition Members who felt that by allegedly freeing public transport we would be permitting private operators to provide a service without the controls which, until then, had been effected by the traffic commissioners under the terms of the previous legislation. One area of anxiety was that private contractors would buy old buses which would be inaccessible to the disabled. We can all remember those old buses, some of which still run. It was virtually impossible to put a wheelchair on them. One of the great advantages of the metro is that the proposed vehicles have low access suitable for wheelchairs. Mobility should be provided for work purposes and recreation. The disabled should be given a mobility which hitherto they have lacked.
Mr. Mills: In view of the shortness of the hon. Gentleman's speech, has he considered going to Grenoble to see just how good the system is for the disabled? It is an excellent system for the disabled and perhaps he should go there.
Mr. George: The Whips are critical enough of my occasional visits abroad. I have no immediate intention of going to the Chief Whip and suggesting a trip to Grenoble. I was in Alsace-Lorraine a few weeks ago and that is the limit of my desire to travel to France. I have seen the video of the system in Grenoble and I have read virtually everything that has been written about it. Although people eulogise that system, it is hoped that the vehicles designed by whoever wins the contract to provide them will be almost a generation in advance of the vehicles currently operating in Grenoble.
There is a great demand for vehicles for the metro but it is less than one would have imagined. Other authorities will place orders in the future. According to contracting and purchasing policy, companies outside the United Kingdom will surely be given the opportunity to bid. So any British bids will have to be competitive. The vehicles will have to meet Centro's requirements that the vehicles be light, cheap and roomy. I hope that sufficient British companies, or at least one substantial British company,

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can meet the high requirements of Centro and other authorities who seek bids in the years ahead. I very much hope that a British company will win the contract.
I mentioned earlier that my local authority in Walsall intends to make several proposals to Centro. The authority has been very supportive from the outset. It has been put to me that its proposals could be designated a shopping list of safeguards. They have been put forward and will be discussed in the months ahead. I shall not abuse Madam Deputy Speaker's already great tolerance by reading out the proposals. I simply wish to say—this will take only one minute—that the authority's proposals relate to open spaces, highways, safety, and the community impact. They also draw Centro's attention to several operational aspects including maintenance, drainage, pollution and alignment. If I sought to speak longer, my colleagues would believe that I was engaged in some form of obstructionism. I wish to make one point forcibly. The local authority supports the concept of the metro. Several matters relating to the route, the structure and the environmental impact remain to be resolved, but I am absolutely confident that such is the good will between Centro and the local authority that the authority's proposals will be met.
Although Walsall council perceives itself as being under an obligation to support the metro, it also has an obligation to meet other criteria where possible. Environmental impact is important, and I shall watch developments closely. If the motion is passed, as I hope that it will be, and if the legislation is reactivated next Session, hon. Members must continue to follow the negotiations and the progress to ensure that conflicting interests are properly reconciled.
I hope that you are under no illusions, Madam Deputy Speaker. I strongly support what is at hand. I hope that the House will say to the sponsors of the Bill, "Please carry on. We shall not scupper your proposals by refusing to endorse the measures this evening. However, in endorsing the measures we do not give you carte blanche to do exactly as you wish." In my experience of Centro, those remarks would be superfluous. It recognises the need not only to consult but to meet objections, not simply because it is a great democrat but because it recognises that it is more efficient to meet objections than to have to—I was about to say "railroad"——
Mr. Snape: My hon. Friend said that he would take only a minute.
Mr. George: My hon. Friend's timescale is more accurate than mine.
In conclusion, I hope that we shall endorse the proposals and that we can return on a future occasion to ensure that our wishes have been complied with.
8.16 pm
The Minister for Aviation and Shipping (Mr. Patrick McLoughlin): I intervene briefly in the debate because, as you rightly reminded us earlier, Madam Deputy Speaker, the motion is strictly procedural. I rise simply to advise the House of the Government's view. It is the tradition that the Government take a neutral stance on private Bills. This Bill is no exception to that rule. That was made clear by the speech that my hon. Friend the Member for Enfield, Southgate (Mr. Portillo), the then Minister for Public Transport, gave on Second Reading in March. By
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convention, he recommended that the House give the Bill a Second Reading so that the Bill could be considered in detail by the Opposed Private Bill Committee. It is consistent with that approach that the Government support the carry-over motion.
In principle the Bill is acceptable to the Department. Light rail schemes of the type promoted by the Bill remain a novelty in this country. The docklands light railway is a fully segregated system. It has shown the success which light rail can achieve in the right places. But the Manchester metro link is now being built with some £50 million of Government grant and revenue support. It will be the first modern street-running system of the type envisaged by the Bill.
I know that many towns and cities would like to emulate the Manchester example. We recognise that in the appropriate circumstances light rail can have an important role to play in reducing traffic congestion and helping to promote urban regeneration. We shall consider financial support for worthwhile proposals which are put to us. However, naturally we must always see whether there are cheaper ways of obtaining the same result with the resources available. It is too early to say whether the scheme proposed in the Bill would be eligible for grant. The Bill is presently being considered by the Opposed Private Bill Committee. It is right to allow the proceedings to continue and reach a conclusion on both the Bill and he detailed provisions therein.
If the motion is carried, the House and another place will have further opportunities to consider the arguments for and against. We have heard some of the arguments for it already this evening and I know that we shall hear more speeches later. It would be unfortunate not to agree to the motion in the name of the Chairman of Ways and Means and therefore I urge the House to allow the Bill to be carried over by accepting the motion.
8.19 pm
Mr. Peter Snape: As the Minister has said, such matters are not normally dealt with by Front-Bench speakers but are left for the House to decide. We are discussing a procedural motion and not the principle of the Bill, although I had some difficulty in realising that that was the case. I listened with interest to the hon. Member for Birmingham, Yardley (Mr. Bevan) who took us on a rattling ride through the suburbs of the west midlands. I felt queasy at one stage and thought that I had gone past my stop on at least two occasions. I was on the point of altering the hon. Gentleman's destination blind so that it read "depot only" so that he could be returned to the tram depot at a reasonable hour. He realised that, for those hon. Members for whom this new method of transport is welcome, a break was necessary.
The hon. Member for Yardley and my hon. Friend the Member for Walsall, South (Mr. George) spoke about finance. We listened carefully as the Minister read from his brief, but, regrettably, he had little to say on that matter. He reminded us that the midland metro is being considered for section 56 grant. His speech, which was presumably drafted by his civil servants, contained the caveat that we must evaluate carefully the different modes of transport. I am not sure how much evaluation the Government need, but I strongly suspect that they desperately need to keep evaluating until the general election because I fear that it

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is hardly likely that section 56 money will be found to fund this or the other two worthy metro projects in the west midlands.
For most Opposition Members representing west midlands constituencies, the sooner the project gets under way and is completed, the better. That applies to all our constituencies in Birmingham and throughout the black country and indeed in Wolverhampton. In a recent television programme there were claims that Wolverhampton was now in the black country while those in that great city said it was not.
Everyone in the west midlands suffers from the same problem of chronic traffic congestion and this modern variation on an old mode of transport is long overdue. The hon. Member for Yardley promoted previous Bills and is is charge of this one. I hope that he will be successful in persuading not just the Minister, but his two immediate bosses that all hon. Members, regardless of party, and all the district councils in the west midlands are as much in favour of the present motion as they were of the two previous motions. A little less talk from the Department and a little more cash would be greatly appreciated.
8.22 pm
Mr. Terry Davis: I oppose the motion in view of the Bill's effects on my constituents who live in the Bromford and Firs estates and because of the way in which they have been treated by the West Midlands passenger transport authority which now calls itself Centro. My hon. Friend the Member for Walsall, South (Mr. George) argued that if the House refused to carry over the Bill to the next Session, it would be an appalling waste of time and effort for Centro and the Bill's supporters. However, I will argue that if the Bill is carried over, it will be regarded by my constituents as an appalling act of contempt towards them.
My hon. Friend the Member for Walsall, South is right about the expense that has been incurred to date, but justice is expensive. It is the job of the House to ensure that justice is done, and an injustice has been done to my constituents.
My hon. Friend was certainly mistaken when he spoke at length about the concept of rapid transit, light rail, the metro, or whatever it is called. He spent much of his speech explaining the advantages of that form of transport compared with other forms. The hon. Member for Birmingham, Yardley (Mr. Bevan) also followed that line.
The Bill is not about the concept of metro or rapid transit. It is about two specific routes, one of which I oppose. I make no comment on the route affecting Walsall and the constituency of my hon. Friend the Member for Walsall, South. However, I am entitled to talk about its effect on my constituency and on my constituents and to oppose the Bill in the interests of my constituents who have a justifiable grievance about the way in which they have been treated by Centro.
I emphasise that the Bill is not about the concept of the metro. I did not oppose the previous Bill which became an Act. It was to build the metro from Birmingham to Wolverhampton. My hon. Friend the Member for Wolverhampton, South-East (Mr. Turner) asked me to waive any objections that I had to that Bill. I told him that I had no objection to it. He asked me to refrain from
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opposing the Bill, and I did. I told him that I did not object to the concept. My only concern was about the way in which it might affect my constituents.
The hon. Member for Yardley spoke about all-party suppport for the Bill. There is all-party opposition in my constituency to the route. It is opposed by all political parties there. The hon. Member for Yardley shakes his head. Why does he disagree that there is all-party opposition in my constituency? I challenge him to tell the House why he disagrees with that statement.
Mr. Bevan: I do not agree that there is all-party dissent about the route. That is not what I understand from the Conservative who will oppose the hon. Gentleman at the next general election. I would have liked to accept the invitation issued by the residents to see the route, which I have already seen. The letter was dated 15 September, the postmark was 19 October, and the letter did not reach me until yesterday. I do not know why the residents should deliberately ensure that a letter dated 15 September should be posted at such a late date. It is hardly the kind of invitation that is desirous of gaining all-party support.
Mr. Davis: I do not represent the residents association and I am not responsible for when it posts its letters. I accept what the hon. Gentleman says but remind him that it is not the first time that he has been invited by my constituents to visit the estate and meet the residents. He is sponsoring the Bill. Many months ago, the residents on the estate invited him to go there. The letter that he mentions is the latest that he has received, but there have been others inviting him to meet residents. The residents have written to many hon. Members, and I am glad to say that some have met them, have understood their concern and have expressed sympathy for their case.
I am interested to know that the prospective Conservative candidate in my constituency at the next general election supports this route. The last Liberal candidate in my constituency opposed the route. That is significant because that Liberal, like many others, has now become a Conservative. He was a Conservative candidate at the local elections in my constituency in May and had the temerity to attack local Labour councillors and me for not opposing the route vigorously enough. Apparently the Conservative party talks in different voices in different places. The Conservative candidate for a council seat in an area in which the route will run attacked the metro route and at an open air meeting tried to pretend that I had not opposed it. Hon. Members on both sides of the House will recognise that that was a grotesque distortion of the truth, and I am glad to say that so did my constituents. The residents on that estate put out their own leaflet, which was nothing to do with me or the local Labour councillor, who had opposed the route from the beginning. That leaflet distributed by the residents poured scorn on the Conservatives for introducing party politics into the campaign against the metro route and condemned the attempts of the Conservative candidates to extract political advantage, something that neither I nor Labour councillors had tried to do.
There are nine councillors in my constituency. Eight of them are Labour, two of whom represent the ward affected by the route. The sole Conservative also represents that ward and at a public meeting he said that he agreed with what I was saying. Clearly there is all-party opposition, but it is also clear that the support for this route comes

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from Conservative Members of Parliament and the aspiring Conservative Member of Parliament in my constituency.
My hon. Friend the Member for Walsall, South made a much more thoughtful and considered speech. As I have explained, there is all-party opposition to the route in my constituency. My hon. Friend said that he thought that the opposition might come from a vociferous minority. He was talking generally, not specifically. The only statistics I have seen are those produced by the Birmingham city council and Centro from the survey that they did. The route was opposed by 90 pet cent. of the people who responded in that part of my constituency. Therefore, it is not fair to say that opposition comes simply from a vociferous minority. An overwhelming majority of the people who live in the Bromford estate are vigorously opposed to the route.
On Second Reading I explained the reasons for the opposition. I explained in some detail the fears and concerns of my constituents, so it is not necessary for me to go into so much detail this evening. However, nothing has changed. Centro has done nothing since the Second Reading debate in March to deal with my constituents' objections on the ground of the loss of amenity, bearing in mind that the route would run through the only open space in the estate, across a grassed area—the only one that my constituents have—a green ribbon between the houses and the motorway. The metro route would desecrate it. Other amenities affected are football pitches and playgrounds.
Secondly, people are concerned about the visual impact that the metro will have. It will run within 40 yards of some of the houses. Between these houses, which have big picture windows, and the metro will be a narrow estate road and their short front gardens. The people in them will look at the wires and see the vehicles going past every two and a half minutes. We are told that they have no grounds for objections. They have no locus standi to complain. They cannot present their case to Members of Parliament because they have been ruled out by the Court of Referees, on the initiative of Centro. We are told that it does not matter.
Mr. Bevan: It must have been made clear that these people would have had the right to object as individuals living in the area where the project is to be carried out. They could have individually appealed and attended the Committee. The locus standi ruling would not have pertained.
Mr. Davis: We have different views about that. People who live even closer to the route than those in the houses that I have just described, in a block of flats called Douglas house—those living closest to the route—signed individual letters explaining that they wanted to be represented by the local residents' association. That is not unreasonable. However, the association was not allowed to be heard. Therefore, the residents lost their right to have their views heard.
Residents are also concerned about the effect of noise. As is well known in Birmingham, noise is a major problem. These residents suffer from motorway, railway and air traffic noise. Even the chairman of the passenger transport authority has said that this is a horrendous situation. Naturally, the residents are concerned about anything that will add to that volume of noise. The environmental
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services department of the city council, at my request and that of the local councillors, did a survey and said that, in its opinion, even on the inadequate criteria that we have now, 118 homes will be entitled to noise insulation if this route is used. Naturally, my constituents are extremely anxious.
My hon. Friend the Member for Walsall, South said that we need to balance the need to preserve accessibility against the need not to cause detriment to people's homes. He is right about that, but the case put unanimously by me, my constituents, local councillors of all parties and the local Member of the European Parliament is that that is not what has happened. We have all supported an alternative route which would run to the north of the M6 and would not affect my constituents or the constituents of any other Member of Parliament. It is not the case, as Mr. Michael Parker, the spokesman for Centro, has said, that my constituents are saying, "Not in my back yard" and want to move the route so that it affects somebody else's home. That is a slur on their moderate and reasonable attitude and a distortion of their point of view. They have consistently said that they do not want to save themselves at the expense of someone else. They have argued only that there is an alternative route that would not affect anybody else's home, and that route should be used.
The hon. Member for Yardley said that the metro would be environmentally beneficial and ecologically friendly and that the promoters want to preserve the landscape. Those words will be read with incredulity by my constituents because that is what will not happen for them if this route is used. It will not be beneficial to their environment, nor ecologically friendly, and it will certainly not preserve the landscape if it runs across the only open bit of land, the only grassed area that they have for recreation and their only facilities for play and recreation.
The hon. Member for Yardley keeps talking about Grenoble, but that is not relevant to the scheme promoted by the West Midlands passenger transport authority. Grenoble is a different city—it is not Birmingham.
Mr. Bevan: Has the hon. Member visited Grenoble and inspected the scheme there? He told me that he would do so but that he would prefer to do it on his own, although there was an opportunity for him to go with a group.
Mr. Davis: Yes, I went privately. I paid my expenses. Who paid the hon. Gentleman's fare?
Mr. Bevan: The hon. Gentleman may have gone, but he did not wish to say that he had. My fare was paid for by Centro, but that has no bearing on the case. The hon. Gentleman claims that the Grenoble system has no similarities with the Birmingham or black country schemes, but that is nonsense. The hon. Gentleman must agree that the Grenoble scheme is an example of our schemes. The midlands scheme is based upon the Grenoble example, and it will be like it. If the hon. Gentleman is honest, I am certain that he will say that he was mightily impressed with the Grenoble system as a means of light electric transport.
Mr. Davis: The hon. Gentleman's final remark was out of order and out of place in this debate. I must also remind him that I am not responsible to the hon. Gentleman, the Government or the Conservative party. I make up my own mind. I went to Grenoble without fuss and I paid my own fare, unlike the hon. Gentleman. I went to Grenoble and

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looked at the system for myself. I was not shown what others wanted to show me. I travelled the entire length of the tramway—that is what they call the system in Grenoble. I travelled along it twice and I walked a good part of it as well. I got off the tram at the stops, and I listened to the noise. I carried out a thorough examination. I do not need the hon. Gentleman to tell me how to do my job.
As I have said, I was not shown the system by others. I did not see only what others wanted to show me. I went to Grenoble with my wife, we talked to local people on and off the tramway. I think that I saw rather more than that which was shown to the hon. Gentleman. As I have explained, I went under my own auspices. I do not need Centro to pay my fare to enable me to do my job. I paid for myself.
I shall tell the House about Grenoble. Before I do that—
Mr. Deputy Speaker (Mr. Harold Walker): Order. We are discussing a procedural motion and not the merits of a transport system in a foreign city. I hope that the hon. Gentleman will confine himself to the motion before the House.
Mr. Davis: I seek your indulgence, Mr. Deputy Speaker. I did not introduce the merits of the Grenoble system. The hon. Member for Yardley said that it is a model for the route which would affect my constituency. I am seeking to explain why that is a misleading statement. I think that I should be allowed to explain why what the hon. Gentleman said in an intervention is grossly misleading.
As I have said, the system that is operating in Grenoble is called a tramway. We have been told that it is very quiet, but, in my opinion, the trams are as noisy as buses. In addition, there is the use of a bell in some places. It clangs like the noise that accompanied the song with the line "Clang, clang, clang went the trolley". There is a clang every time a tram sets off from a stop. If people have a tram stop near their home, they have the noise of a bus and the clang of a bell.
The Grenoble system is much shorter than the operation that is proposed for the west midlands. It is much shorter than the proposed route that is set out in this Bill.
It is also a route that would be different in character from that which is operating in Grenoble.
The hon. Member for Yardley may not like to hear these comments, but he introduced the Grenoble system into the debate.
I shall describe why the two routes are different in character. At Fontaine La Poya, the Grenoble system terminates in a sort of square near the town hall. It is not a residential area. I am not surprised because the left-wing council would not allow that to happen. The route does not enter an area in which people live. The public travel to the tramway by bus.
The west midlands system will pass through estates. In effect, there will be a big loop. The route will pass through the Bromford estate, the Firs estate and Chelmsley Wood and back along the Coventry road. It will pass through areas where people live, unlike the Grenoble system.
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As I have said, the people of Grenoble travel to the Fontaine La Poya terminus by bus.
It is true that people do live in the centre of Grenoble, but they occupy flats which are above shops. The design of the system must be an environmental improvement for those living in the centre of Grenoble. It has replaced ordinary street traffic.
The tramway does pass through a residential area on its way to Alpexpo. Near the Arlequin stop, all the other traffic has been re-routed. Instead of having all the noise that is generated by cars, vans and lorries, there is only the noise that is produced by the tramway. The trams pass every few minutes, but the noise is much less than it was. Also, there is no residential property at ground floor level. That level is dedicated to garages and other services. No one has to look at the tramway from a ground floor flat. Above all, the street noise is much less than it was.
That is very different from the proposal that the west midlands scheme should pass through the Bromford estate. This system will not replace buses and other traffic. Instead, it will run through a grassed area in front of windows in living rooms. Residents on the Bromford estate look out at open land across which the metro system will run. No existing traffic will be replaced. That is very different from the situation in Grenoble. The hon. Member for Yardley may not have understood it, but that is the fact.
There is another difference. The mayor of Grenoble decided that one route should be introduced and not an entire network or system. I admire the way in which he approached the introduction of the tramway. There is only one route, which runs from Fontaine La Poya to Alpexpo. One route having been built, the mayor is extending the system so that it runs through the centre to the university. That is a sensible way to proceed. It is very different from the way in which the West Midlands passenger transport authority wants to proceed. The authority seeks to impose routes on people. I advised the authority years ago that the most effective way to gain public support for its ideas would be to construct one route so that residents could see it and hear it for themselves. Of course, the authority rejected that advice.
On Second Reading, I described the failure of Centro to consult my constituents. My hon. Friend the Member for Walsall, South has said that we in Britain are obsessed with consultation. That statement will be greeted with ridicule by my constituents. Indeed, the Select Committee criticised the lack of consultation. It was not allowed to criticise the lack of consultation with my constituents, however, because it was not allowed to hear them, but there was no prior consultation.
A letter has recently come to light which was written by Robert J. Tarr, who was at the time the secretary of the West Midlands passenger transport authority. Four years ago he sent the letter to a councillor in my constituency. That was at the time of the abandonment of the previous scheme. He told the councillor that a decision had been made to abandon the scheme, and then he wrote:
"The Authority has further resolved that any future scheme for Rapid Transit will be subject to full consultation."
As I said during our previous debate, that did not happen. I should add, however, that Centro has sought frequently to avoid the blame for lack of consultation. It shelters behind the skirts of Birmingham city council. When I asked the city council why it did not consult my constituents, it said that that was Centro's job and not its,

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the council's, responsibility. Centro and the city council keep on passing the buck from one to the other. The fact is that neither of them sought to consult my constituents before the proposals were published.
A senior local government officer in the city council has told some of my hon. Friends who represent Birmingham constituencies—this was in my hearing—that in future the council will ensure that they are consulted on metro routes. After making that statement he turned to me and said, "You see, Mr. Davis, the council learns from experience." I am glad of that. The council will ensure that there is consultation in future, and it has decided that it cannot rely on Centro. It seems, however, that the lesson has been learnt at the expense of my constituents, who were not consulted.
In March, shortly before Second Reading, the hon. Member for Yardley arranged a meeting between himself, myself and Mr. Tarr, who is now the director general of the passenger transport authority. As a result of that, a meeting took place with representatives of local residents in the Bromford and Firs estates. I described the results of that meeting on Second Reading. The meeting discussed the wishes of my constituents, their objections to the present route, and their suggestion for an alternative route north of the M6 which would not affect anyone. That route is supported by me, by councillors of all parties, by the local Member of the European Parliament and by my hon. Friend the Member for Birmingham, Erdington (Mr. Corbett), through whose constituency the route would run.
The response to the alternative route was totally inadequate. Centro gave three reasons for rejecting it. First, it said that it was not physically possible because a spine road was planned for the northern side of the motorway, and it was impossible to find room for both a spine road and the metro. We knocked that argument on the head because both the chairman of Birmingham Heartlands and the city engineer's department said that it was possible. Secondly, Centro said that it would be too expensive as it would cost an additional £16·5 million, of which £12 million would be for a tunnel. Thirdly, Centro said that it would affect ridership figures because fewer people would use it if it was north of the motorway. That contradicts what the hon. Member for Yardley said earlier when he described how the route would link the airport, Birmingham international railway station and the national exhibition centre at one end to, at the other end, the international convention centre, Five Ways and the city centre. My constituents do not object to that link, but it should be routed along the other side of the motorway where it would not affect their homes.
Centro now says that the route is not about linking the national exhibition centre, the international convention centre, the airport and the railway station; it is about serving the people on the Bromford estate. It wants the metro to run in front of the windows of residents so that it can serve the residents. Centro claims that if the route were changed fewer people would use the metro. It says that if the line runs to the south of the motorway, it would carry between 1,900 and 2,200 passengers a day, but that if it ran to the north of the motorway, it would carry only 500 to 800 passengers a day.
We have held two more meetings with Centro since Second Reading, which is why I earlier asked hon. Members what they knew about the consultation that was supposed to take place.
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Our actual discussions with Centro told a very different story from that told by the hon. Member for Yardley. He said that the metro is not intended to replace buses. He is wrong because Centro estimates that 75 per cent. of the ridership on the metro will be transferred from buses. It calculated the ridership by using a computer to work out how many passenger journeys on existing passenger transport would change to the metro if it were built where it wants it to be built. It estimated the number of people living within the radius of the route who would transfer from buses to the metro, and then added a third for new passengers and people transferring from cars. Contrary to what my hon. Friend the hon. Member for Walsall. South has been told—it may have been only in the context of his route, but I doubt that—Centro told my constituents that the metro is intended to take passengers from buses, not from cars. The proportion is 75 per cent. from buses and only 10 per cent. from cars. It is well known that congestion is caused by cars, not buses. It is not true to say that the metro is not intended to replace buses. I asked Centro what the effect would be on bus routes, but it said that, because it used a general rule of thumb, it could not estimate the effect on individual bus routes, but it estimated that 75 per cent. of the estimated 1,900 to 2,200 passengers a day would have transferred from buses.
Again contrary to what has been said in the debate, those calculations were based on the fares on the metro being the same as the fares on buses. In fact, we have now been told that the fares on the metro will be slightly higher than those on buses, so all the calculations are brought into question. The estimates of ridership, with which Centro sought to impress and confuse us, are bogus.
Mr. Michael Parker, the head of communications for Centro, eventually told us in May that, at our request, Centro had again studied the costs and, instead of costing £16·5 million to put the metro on the other side of the motorway, it would cost only £12·5 million—a reduction of one quarter—mainly because the cost of a tunnel had been reduced from £12 million to £6 million. Its previous estimates were way out. That £12·5 million is not an additional cost, as was suggested by the hon. Member for Yardley in our previous debate. The estimated cost for the route that would affect my constituents is £2·7 million, so the additional cost is only £10 million.
Mr. Bevan: As questions about the cost of moving the route from one side of the M6 to the other are continually being posed, I can tell the House that should that happen, besides the fact that only one third of the number of passengers would use the metro than would use it if it were built on the proposed route, the cost would be £12·5 million as against £6 million for the existing route.
The arguments are quite extraordinary. The hon. Gentleman continually protests, so I must ask him whether he supports the principle of the metro, or whether he is rubbishing the whole idea. Does he agree with the view of the majority of his party and that of the House, which supports the metro? If so, why does he attack it on every point?
Mr. Davis: I shall run through the figures again, slowly, so that the hon. Gentleman understands them, but first I must tell him that it is a sign of weakness that the promoters of the Bill need to attack the motives of their opponents. I have said several times that both I and my constituents do not oppose the concept of a metro. The

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residents' association has made it clear to me, to Centro and to everyone who will listen that it is not attacking the concept; it is simply arguing that Centro has the wrong route and that it should adopt a different route, which would serve all of its purposes without affecting my constituents' homes. I am sure that at least my hon. Friends recognise that view and will not join the hon. Member for Yardley in his incredible attack on our integrity. The hon. Gentleman makes such an attack only because he knows that he is losing the argument.
In a letter dated 14 May 1990, Mr. Michael Parker said that the cost of the alternative route would be £12·5 million—a significant reduction on the previous estimate. I have always been told that the cost of the southern route, which would affect my constituency, would be £2·7 million. The hon. Member for Yardley is shaking his head. In fact, he makes my case for me. It appears that Centro has given him more up-to-date figures, because he just said that the cost of the southern route would be £6 million. My case is even stronger than I thought. It is a pity that we had to elicit those figures in the course of the debate, rather than Centro making them readily available; but, as a result of the intervention of the hon. Member for Yardley, we now know that the cost of the northern route is £12·5 million and that of the southern route £6 million. The difference is £6·5 million: even the hon. Member for Yardley cannot argue with that arithmetic.
The original estimate of the cost was £224 million; the hon. Member for Yardley has told us this evening that that figure has now been increased to £273 million. My constituents want to protect their environment—they want an ecologically friendly route. They want Centro to increase the £273 million figure by £6·5 million. That sounds like a lot of money until we place it in context: we should consider not only the £273 million, but the amount that Centro is to pay for tunnels elsewhere on the route.
In Birmingham's city centre, it is to spend £100 million on tunnels to avoid the problems that might result from running the metro through the city centre.
It is also to spend £7·5 million on a tunnel to take the metro from my constituency to that of the hon. Member for Meriden (Mr. Mills)—but it cannot afford £6·5 million for my constituents.
Centro also proposes to spend £12·5 million on tunnels to protect the environment in Solihull. It is not prepared to spend £6·5 million to protect the environment of my constituents. Naturally, my constituents want to know why their homes are less important than those of people living in Solihull, Meriden or the centre of Birmingham. They are entitled to an answer, but it has never been forthcoming. The constant refrain from Centro is that it cannot afford such an amount—but it can afford many times as much to carry out work elsewhere on the same route, and feels able to spend nearly twice as much to benefit the inhabitants of Solihull.
In fact, I suspect that the total cost of the alternative route is less than £12·5 million. In the last month, Centro has announced an amendment to its own route, part of which is being moved from the south to the north—as suggested by my constituents. Unfortunately, only part of the route is affected, and that part lies to the west of my constituency. In any event, the action is not being taken as a result of representations by my constituents, or out of
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consideration for their interests; the aim is to take account of the difficulties caused by the new Heartlands spine road, and we do not know how much that amendment will cost. All that we know is that it is possible, suddenly and with ease, to move the route slightly northwards to benefit a new road, but impossible to move it slightly northwards further along to benefit the existing residents of the Bromford estate. Where there is a will there is a way; Centro will not change the route to benefit people.
I am sorry to refer so often to my hon. Friend the Member for Walsall, South, but he made a long and interesting speech. He spoke of the need for flexibility, and said that everything possible should be done to meet the objections of residents on all the metro routes. He and I see eye to eye in that regard; indeed, it is the central issue. The so-called consultation that has taken place since Second Reading is regarded by residents' representatives as a farce: to put it bluntly, the officers of Centro gave the impression that they were simply going through the motions. Following the two meetingts that have been held since Second Reading, my constituents are bitterly disappointed by the officers' attitude.
I wish to be fair: Mr. Tarr was not present, although he had set up the consultation, along with the hon. Member for Yardley. We never saw him again; he left the business to others to whom he delegated, and it is those others whom my constituents have criticised. But we cannot simply blame officers.
My constituents were also invited to "have a chat"—in his words—with the chairman of the Centro passenger transport authority, and they asked me to accompany them so that I could hear what was said. They told the chairman that they had not had much joy from his officers. It is with great regret that I must tell the House—this is very important in the light of what my hon. Friends have said—that the chairman told my constituents, in my hearing—I wrote down his words at the time—"We have drawn our battle plans and are absolutely entrenched." That is not a sign of flexibility or magnanimity. He went on to say, "There is no chance of rerouting—not since the Bill was put in Parliament." So much for magnanimity, flexibility, consultation, and a willingness to talk about the effects of the development.
Mr. George: If my hon. Friend were a student of military history, he might reach the conclusion that the most resolute statements are sometimes followed by a quite different course of action. Therefore, he should not take such a rebuff as necessarily a demonstration of intolerance. In a survey, the system that my hon. Friend himself paid to inspect had the support of 93 per cent. of the residents of Grenoble. So, although it may not have met his requirements, surely that indicates reasonable acceptance by the people of Grenoble of the system that they had the wisdom to establish.
Mr. Davis: Having visited that system, I would expect such a result. I am not sure that my hon. Friend has visited Grenoble, and it may not be necessary for him to do so. Nevertheless, I am not at all surprised that 93 per cent. of the residents there think that the system is a good thing—as I would do if I were a resident of Grenoble. I would be amazed if less than 93 per cent. of the people living along the route thought it a good thing. That would be a much tougher test, and I am only surprised that 7 per cent. of those polled did not think that it was a good thing.

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The reason for that belief is that Grenoble has a very different kind of route. Where it runs along streets where people live, it has replaced city centre traffic—cars, buses, vans, lorries, and heavy goods vehicles. The local residents have witnessed a tremendous improvement in their environment. However, one cannot translate the Grenoble experience to the proposal for the route through my constituency. If my hon. Friend the Member for Walsall, South can find the time to visit the location, I believe that he will reach the same conclusion.
Where the route in Grenoble would have affected residents, it has been ended, and buses take passengers to the terminals. It is very impressive. That is done in the socialist part—the suburb across the river, which comes under a different local authority. Passengers on the trams told me that the system was an improvement on what they had before. Of course they would think that, because it has taken a great deal of traffic off the streets. That will not happen in the case of the metro route in my constituency because it will bring incremental nuisance to people's very doorsteps.
To refer again to my hon. Friend's mention of military history, I recall that the words, "They shall not pass" went unheeded, but it is clear to me that Centro will not concede any amendments unless they are forced to do so. Centro will not be flexible. Centro's own chairman said:
"The route will only change if the Bill comes out of the sausage machine."
By the sausage machine, he meant this House. It is our job to change the route, because Centro will not do that. Centro's chairman also said that there was no chance of negotiations because the Bill was already before Parliament.
If my hon. Friend the Member for Walsall, South thinks that there is any flexibility or willingness to consult, negotiate and subsequently to amend or change the route on Centro's part, he has been misled and will be bitterly disappointed. It may be a different story in respect of route 3, but I can comment only on route 2—and then only in so far as it affects my constituents.
I turn to the shabbiest aspect of the whole affair—Centro's decision to challenge the locus standi of my constituents to petition against the Bill and thus their right to be heard by a Committee of this House. In the Second Reading debate, the hon. Member for Yardley said:
"Granting a Second Reading will merely allow the Bill to proceed to Committee where it will be fully examined".
Centro made sure that it was not fully examined.
The Minister for Public Transport told the House:
"there will be the opportunity to present objections to the Select Committee."—[Official Report, 5 March 1990; Vol. 168, c. 642 and 650.]
There was no opportunity for my constituents to present their objections to the Select Committee.
Centro appealed to the Court of Referees. There were 35 petitions against the Bill from banks, property developers, businesses, education institutions, statutory undertakings of British Rail and many other organisations, including Foseco. Centro only objected to the five residents groups and it persisted in objecting to my constituents from the Bromford estate and the Firs estate. That decision by Centro was widely criticised during the Second Reading debate by supporters and opponents of the Bill. Centro's friends urged it to think again. My hon. Friend the Member for West Bromwich, East (Mr. Snape) said:
98
"I am convinced of the relevance of some of their objections. However, to deny objectors the right to put a case before a Committee of the House is scarcely good public relations.
I am aware of the recommendations of the Select Committee, behind which Centro seeks to shield itself from criticism. It has nothing to fear from criticism and I wish that it had not taken the action that it took."—[Official Report, 5 March 1990; Vol. 168, c. 652.]
He said later that the objectors should have been allowed to put their fears to the appropriate Committee of the House without being challenged.
Hon. Members who voted for the Bill urged Centro to drop its technical and legal objections, which would prevent ordinary people from being heard by the Committee and by Members of Parliament. I am sorry to have to tell the House that all those pleas fell on deaf ears. Centro refused to listen to their friends any more than to their opponents.
The hon. Member for Yardley said that 35 objections were considered by the Committee. He is wrong. I am sure that he did not intend to mislead the House, but 35 objections were not considered by the Committee. The objections from four residents groups—the most important as far as I am concerned being the petition from people in my constituency—were not considered by the Committee and could not be considered because of Centro's deliberate action.
The hon. Member for Yardley said that anyone with a land-holding interest can have his objections considered. A land-holding interest means that one owns the house, garden or land on which the route will run. That is not the case, as Centro will run a line not across gardens but just in front of houses and gardens belonging to my constituents and so they do not have a land-holding interest. Apparently, we have laws which protect land holders and owners, but we do not have laws to protect residents.
My hon. Friend the Member for Walsall, South mentioned the Court of Referees, but it was called on to rule only because Centro appealed to it. If one discusses the issue with Centro, it blames Sherwood—the parliamentary agent—and says that it is in the hands of its parliamentary agent. Alternatively, Centro blames the Joint Committee on Private Bill Procedure, and it refers to that Committee's recommendation that:
"Promoters should be encouraged to police the rules of locus standi, and private bill committees should not treat a reasonable but unsuccessful challenge as a point of prejudice."
That is quite true. The Joint Committee on Private Bill Procedure recommended that promoters should be encouraged to police the rules of locus standi, but I doubt whether that Committee ever envisaged that someone would behave in the way that Centro has behaved by objecting to the right of people who are going to lose the benefits of their homes to be heard by a Select Committee of the House.
Since Centro is so fond of quoting the reports of the Joint Committee on Private Bill Procedure, I remind the House that one of the early recommendations of the Joint Committee was:
"Private bill committees should treat a wilful failure by any party to consult or negotiate as a point of prejudice."
Centro neglected to consult or negotiate. I am not surprised that it had to stop my constituents from saying so to the Select Committee which considered the Bill.

99
The representatives of my constituents say, and I believe them, that if they had been allowed to put their case to an independent body, a Committee of Members of Parliament, and to be subjected to questioning by the Committee and Centro, and that if the Committee had then found against them, they would have accepted the decision, even though they would have been very disappointed. They would have felt that they had had their opportunity to explain why they objected to the route and preferred a different one. However, they were denied that opportunity. They were denied that hearing by Centro, which used their poll tax and their rates to employ barristers and parliamentary agents to argue before the Court of Referees that they should be denied a hearing.
Centro blocked the right of my constituents to be heard. Their voices have been stifled. One is bound to ask, what was Centro afraid of? Why did it want to stop residents in my constituency and in other constituencies explaining their point of view? Is Centro scared that its case will not stand up to cross-examination by ordinary residents with their ordinary logic, feelings and skills? Centro knows that its case is weak, otherwise it would not have behaved so undemocratically.
If the carry-over motion does not succeed, we shall be telling Centro to go back and do its job properly by consulting people properly. We shall also be telling it that if people are dissatisfied they should be allowed to put their case to a Committee of Members of Parliament. In a democracy, people are surely entitled to nothing less.
9.16 pm
Mr. Dennis Turner: I shall seek to follow your edict, Mr. Deputy Speaker, because of the procedural nature of the motion.
The hon. Member for Birmingham, Yardley (Mr. Bevan) gave a historical account of the metro. As he said, it is supported by the seven authorities that make up the west midlands conurbation. The first Bill, in 1989, was unopposed. This Bill would empower the creation of two lines—the first from Birmingham to the international airport, the second from Wolverhampton to Walsall and then through the black country to Dudley.
I welcome the Minister's statement that the Government support the carry-over motion. My hon. Friend the Member for West Bromwich, East (Mr. Snape) said that the Government ought soon to make known their intentions regarding finance so that the metro lines can be developed. I hope that the autumn statement will contain a positive contribution to the scheme. The hon. Member for Yardley made it clear that the carry-over motion is needed so that advantage can be taken of Government finance. A clear Government commitment to the scheme is needed.
The hon. Member for Meriden (Mr. Mills) said that he had considered various aspects of the project. On Second Reading he rightly made an impassioned plea on behalf of his constituents. We appreciate the fact that he has now taken a fresh look at the carry-over motion.
I shall try to ensure that the hon. Gentleman gives us his support by responding to the questions that he asked. He wanted a guarantee that the shared carriageway would not be a hazard. I understand that Solihull's highways department, the custodian of highway safety, has already
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given that guarantee. The hon. Gentleman said that the representations made by CARE and the recommendations of the Opposed Private Bill Committee should be honoured and enshrined in law. I understand that Centro is prepared to give that legal undertaking. Likewise, it is happy to give undertakings on traffic lights and stop locations.
My hon. Friend the Member for Walsall, South (Mr. George) made an excellent and comprehensive speech. His positive remarks highlighted his belief in the light rail system and the contribution that it can make to our lives in the next century.
Mr. Anthony Beaumont-Dark: Does the hon. Gentleman agree that one of the most inspiring features of today's debate has been that all of the seven authorities agree? We are here to represent those who represent the local people. If seven authorities agree, is it not better, instead of continuing to praise their worth, to show our worth by voting on the issue so that we can forward what those seven authorities—which are not all Labour, however unusual that may sometimes seem—think is right? May we vote on this matter to show that, as the hon. Gentleman said, we all agree with them? Is this not the time for action, not just for words?
Mr. Turner: I very much appreciate the hon. Gentleman's comments; in so many of his comments, he shows wisdom. I endorse entirely what he says. The democratic process has been at work and it is of great importance that local authorities in the west midlands speak with one voice and say that they want this metro to proceed into the 21st century.
My hon. Friend the Member for Walsall, South succinctly mentioned how much investment has already been made in the project. If the motion were not passed, that money would be wasted and the opportunity that we have now for speedy development—we hope with Government finance—would be lost. My hon. Friend made several germane points and I appreciated his contribution to the debate.
I think that my hon. Friend the Member for Birmingham, Hodge Hill (Mr. Davis) would agree that most of his speech tonight was from Second Reading. We expected that he would rehearse the arguments that he made on behalf of his constituency with integrity and tenacity. He has battled courageously on his constituents' behalf. The House should respect him for what he has done and his constituents should be proud of his contribution. I mean that sincerely although I am sad to say that, on this occasion, I disagree with him.
I understand the reasons why my hon. Friend has advanced such arguments. He has quoted what different people have said, but I am sure that he understands that what has happened goes back to the first principles of democratic accountability. Whatever my hon. Friend says, the fact remains that Birmingham city council has approved the line of route in accordance with the democratic process and the committee structure. My hon. Friend referred to a city officer saying, "We may have learnt the lesson." But the elected members of Birmingham city council—with the exception, as my hon. Friend rightly said, of his ward councillors—have taken a different view.
Mr. Terry Davis: I am grateful to my hon. Friend for his remarks, but he is slightly mistaken. I was talking not only about the councillors in that ward but about all the councillors in my constituency—a far greater number.
Mr. Turner: I am sorry. I accept that a number of councillors in my hon. Friend's constituency oppose the line of route.
Mr. Davis: All of them.
Mr. Turner: I accept that my hon. Friend was talking about all of them, including the MEP.
I repeat, however, that, even before going out to consultation, the local authority had taken a democratic look at the proposals. My hon. Friend will accept that the starting point for the planning that went into that part of the route—like every other part—was set by the local authority and involved members and officers of that authority.
Mr. Davis: My hon. Friend makes a fair point. He is absolutely right that officers of the city council and some city councillors considered routes in secrecy, behind closed doors. But they never discussed their proposals with the local councillors representing my ward or, indeed, nearby wards. The chief executive of the city council has told me that he regarded it as Centro's responsibility, rather than that of the city council, to consult the local people and local councillors. Centro says that it was regarded as the city council's responsibility. That is little comfort; I am not bothered about that. They are both to blame and they have learnt their lesson. The trouble is that they are not willing to repair the damage that they have done to my constituents.
Mr. Turner: I hear what my hon. Friend says, but I rest my case. Wolverhampton, which dealt with the first phase and the original Bill, was certainly involved right from the outset. Elected representatives were fully involved in the process.
We know the arguments advanced by Centro and we know that my hon. Friend opposes them. The first concerns cost. We can reasonably accept the argument that there is a difference in cost between the route proposed by the residents and the route proposed in the Bill. The second concerns the movement of people, and the promoters' route would touch far more people than would the alternative FORCE proposal for a route further north of the M6. Strong arguments have been advanced, but not one of them has been accepted by my hon. Friend the Member for Hodge Hill or, as he rightly says, by the residents of his area who feel that there is a preferable route available.
I understand my hon. Friend's argument about his constituency and those who are directly affected on that relatively small piece of track which is the bone of contention. However, when we consider that we are talking about 150 miles of track, it must be common sense that within the whole of that area some people will be unhappy and dissatisfied by the proposed route. Although I accept my hon. Friend's argument and that he is concerned about the route, we must decide in favour of this carry-over motion. I know that hon. Members are anxious to get into the Lobby and vote for this majestic concept.
The people in the black country and in Birmingham have had 200 years of industrial revolution. So far, before
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today, we have failed to develop the proper links which should be developed between the black country, Birmingham and the west midlands. I want to share with hon. Members a homily and a simple truth about the black country. If a courting couple travel from Tividale to Bradley, people still come out of their homes to look at them. That is how our people have been divided for 200 years between the black country, Birmingham and the west midlands as a whole.
The canal network in the black country was designed for goods, not people. The local train service was demolished by Mr. Beeching. Now the buses churn out pollution. This new metro can take us into the 21st century. For social, environmental and transport developments, let us go metro tonight. Let us pass the motion and consider the Bill in the next Session. We can then give the people in our conurbation the kind of transport that they will need as we move into the 21st century.
9.32 pm
Mr. Anthony Beaumont-Dark: I understand some of the things which have been said, particularly by the hon. Member for Birmingham, Hodge Hill (Mr. Davis). If there are changes, we experience the NIMBY principle—not in my bloody back yard, you don't—
Mr. Deputy Speaker: Order. That is coarse language which is uncharacteristic of the hon. Gentleman. I hope that he will not use it again.
Mr. Beaumont-Dark: I will not use it again. However, perhaps I should refer to the FLIMBY principle which I take to mean, "Not in my flipping back yard, you don't."
We all agree that there should be change. On occasions we all agree that a road is needed here, an airport or a railway there. I will not repeat what I said earlier because of your sensitivities, Mr. Deputy Speaker, but when those needs arise people say, "Not in our flipping back yard, you don't." That is what change involves. Someone's flipping back yard is going to be affected.
It is a little like sacrifice. People often say that we must all make sacrifices. I agree with sacrifice, so long as it starts from the chap next door but one. The hon. Member for Hodge Hill rightly said that the proposal may well be good for greater Birmingham or the greater west midlands, but like the rest of us he is elected to represent his constituency. The hon. Gentleman must accept, however, that in our own individual patches unpleasant things sometimes have to happen for the greater good of our constituencies or our areas.
Mr. Terry Davis: Will the hon. Gentleman explain who would be adversely affected by the alternative route put forward by my constituents?
Mr. Beaumont-Dark: Somebody is always adversely affected by any change in anything.
Mr. Davis: The hon. Gentleman has come into the debate late and has therefore not had the benefit of a full exposition of the matter. Will he now anwer the question that I put to him directly? He has accused my constituents of taking the NIMBY attitude. That has been said by Mr. Parker, the spokesman for Centro, but it has been denied

103
by my constituents many times. I am not seeking to move this into someone else's backyard—I am seeking to move it where there are no backyards.
Mr. Beaumont-Dark: Of course that point will be dealt with, as all such things are, by every so-called expert. I state a general principle. All hon. Members have seen such things happen. I saw it happen in Selly Oak with the Bristol rail. Somebody sometimes wants to widen one side instead of the other. One side says, "Great," and the other side says, "No."
As a general agreement has been obtained, can the House decide on the broad principle that nothing in this life will satisfy everyone? As my hon. Friend the Member for Birmingham, Yardley (Mr. Bevan) and others have said, we must make progress. If we do not make progress now, all progress will come to an end. I hope that the hon. Member for Hodge Hill will agree with that view.
Question put:—
The House divided: Ayes 183, Noes 8.

Division No. 326]

[9.36 pm

AYES

Arbuthnot, James

Douglas-Hamilton, Lord James

Arnold, Jacques (Gravesham)

Dykes, Hugh

Aspinwall, Jack

Fallon, Michael

Atkins, Robert

Faulds, Andrew

Baker, Nicholas (Dorset N)

Fearn, Ronald

Baldry, Tony

Fishburn, John Dudley

Beaumont-Dark, Anthony

Fookes, Dame Janet

Beggs, Roy

Forsyth, Michael (Stirling)

Beith, A. J.

Forth, Eric

Bennett, Nicholas (Pembroke)

Foster, Derek

Benyon, W.

Freeman, Roger

Bevan, David Gilroy

Fry, Peter

Blackburn, Dr John G.

Galbraith, Sam

Body, Sir Richard

Gale, Roger

Boswell, Tim

George, Bruce

Bottomley, Mrs Virginia

Glyn, Dr Sir Alan

Bowden, A (Brighton K'pto'n)

Goodlad, Alastair

Bowis, John

Goodson-Wickes, Dr Charles

Braine, Rt Hon Sir Bernard

Gordon, Mildred

Brazier, Julian

Greenway, Harry (Ealing N)

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

Grist, Ian

Browne, John (Winchester)

Hague, William

Buckley, George J.

Hamilton, Hon Archie (Epsom)

Budgen, Nicholas

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

Burns, Simon

Harris, David

Burt, Alistair

Hayward, Robert

Butcher, John

Hogg, Hon Douglas (Gr'th'm)

Butler, Chris

Holt, Richard

Butterfill, John

Howard, Rt Hon Michael

Campbell, Menzies (Fife NE)

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

Carrington, Matthew

Howarth, G. (Cannock & B'wd)

Chalker, Rt Hon Mrs Lynda

Howe, Rt Hon Sir Geoffrey

Chapman, Sydney

Howell, Ralph (North Norfolk)

Chope, Christopher

Hughes, Robert (Aberdeen N)

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

Hughes, Robert G. (Harrow W)

Clark, Sir W. (Croydon S)

Ingram, Adam

Conway, Derek

Jack, Michael

Coombs, Anthony (Wyre F'rest)

Jackson, Robert

Coombs, Simon (Swindon)

Jessel, Toby

Cope, Rt Hon John

Jones, Barry (Alyn & Deeside)

Cormack, Patrick

Key, Robert

Couchman, James

King, Rt Hon Tom (Bridgwater)

Crowther, Stan

Kirkhope, Timothy

Cummings, John

Kirkwood, Archy

Dalyell, Tam

Knapman, Roger

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

Knight, Greg (Derby North)

Davis, David (Boothferry)

Knox, David

Day, Stephen

Lambie, David

Devlin, Tim

Lamont, Rt Hon Norman

Dixon, Don

Lang, Ian

104

Lawrence, Ivan

Roberts, Sir Wyn (Conwy)

Leadbitter, Ted

Ruddock, Joan

Leigh, Edward (Gainsbor'gh)

Rumbold, Mrs Angela

Lightbown, David

Sackville, Hon Tom

Lloyd, Tony (Stretford)

Sainsbury, Hon Tim

McCartney, Ian

Scott, Rt Hon Nicholas

MacGregor, Rt Hon John

Shaw, David (Dover)

McKay, Allen (Barnsley West)

Shaw, Sir Giles (Pudsey)

MacKay, Andrew (E Berkshire)

Shaw, Sir Michael (Scarb')

Maclean, David

Short, Clare

McLoughlin, Patrick

Smith, J. P. (Vale of Glam)

McNamara, Kevin

Snape, Peter

McWilliam, John

Speller, Tony

Major, Rt Hon John

Spicer, Sir Jim (Dorset W)

Malins, Humfrey

Steen, Anthony

Mans, Keith

Stern, Michael

Marek, Dr John

Stevens, Lewis

Marshall, John (Hendon S)

Stewart, Andy (Sherwood)

Martin, David (Portsmouth S)

Stott, Roger

Maude, Hon Francis

Summerson, Hugo

Mawhinney, Dr Brian

Taylor, Ian (Esher)

Mayhew, Rt Hon Sir Patrick

Taylor, John M (Solihull)

Mellor, David

Thompson, D. (Calder Valley)

Michael, Alun

Thompson, Patrick (Norwich N)

Montgomery, Sir Fergus

Thurnham, Peter

Morrison, Sir Charles

Trippier, David

Moynihan, Hon Colin

Twinn, Dr Ian

Needham, Richard

Vaz, Keith

Newton, Rt Hon Tony

Waddington, Rt Hon David

Nicholson, David (Taunton)

Waller, Gary

Oppenheim, Phillip

Wardell, Gareth (Gower)

Page, Richard

Watts, John

Paice, James

Wheeler, Sir John

Patnick, Irvine

Widdecombe, Ann

Patten, Rt Hon Chris (Bath)

Winnick, David

Patten, Rt Hon John

Winterton, Nicholas

Pike, Peter L.

Wood, Timothy

Porter, David (Waveney)

Yeo, Tim

Portillo, Michael

Young, Sir George (Acton)

Powell, Ray (Ogmore)

Prescott, John

Tellers for the Ayes:

Redwood, John

Mrs. Maureen Hicks, and

Rhodes James, Robert

Mr. Roger King.

Riddick, Graham

NOES

Campbell-Savours, D. N.

Skinner, Dennis

Cryer, Bob

Wise, Mrs Audrey

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

Garrett, Ted (Wallsend)

Tellers for the Noes:

Hardy, Peter

Mr. Harry Barnes and

Mahon, Mrs Alice

Mrs. Llin Golding.

Question accordingly agreed to.
Ordered
That the Promoters of the Midland Metro Bill shall have leave to suspend proceedings thereon in order to proceed with the Bill, if they think fit, in the next Session of Parliament, provided that the Agents for the Bill give notice to the Clerks in the Private Bill Office not later than the day before the close of the present Session of their intention to suspend further proceedings and that all Fees due on the Bill up to that date be paid;
Ordered,
That on the fifth day on which the House sits in the next Session the Bill shall be presented to the House;
Ordered,
That there shall be deposited with the Bill a declaration signed by the Agents for the Bill, stating that the Bill is the same, in every respect, as the Bill at the last stage of its proceedings in this House in the present Session;
Ordered,
That the Bill shall be laid upon the Table of the House by one of the Clerks in the Private Bill Office on the next meeting of the House after the day on which the Bill has been presented and, when so laid, shall be read the first and second time and committed (and shall be recorded in the Journal of this House as having been so read and committed);
Ordered,
That all Petitions relating to the Bill presented in the present Session which stand referred to the Committee on the Bill, together with any minutes of evidence taken before the Committee on the Bill, shall stand referred to the Committee on the Bill in the next Session;
Ordered,
That no Petitioners shall be heard before the Committee on the Bill, unless their Petition has been presented within the time limited within the present Session or deposited pursuant to paragraph (b) of Standing Order 126 relating to Private Business;
Ordered,
That in relation to the Bill, Standing Order 127 relating to Private Business shall have effect as if the words 'under Standing Order 126 (Reference to committee of petitions against Bill)' were omitted;
Ordered,
That no further Fees shall be charged in respect of any proceedings on the Bill in respect of which Fees have already been incurred during the present Session;
Ordered,
That these Orders be Standing Orders of the House.

Tees and Hartlepool Port Authority Bill
Order for Third Reading read.
Mr. Deputy Speaker (Mr. Harold Walker): I call Mr. Richard Holt.
9.50 pm
Mr. Richard Holt rose—
Mr. Bob Cryer: On a point of order, Mr. Deputy Speaker. You will recall that last week the Redbridge London Borough Council Bill was withdrawn because of technical imperfections. Have the Clerks obtained from the Committee the minutes for the Bill that we are about to debate? Have they also obtained the record held by the Clerks in the Private Bill Office? I understand that there could be a discrepancy between the two and I should be grateful for your guidance. [Interruption.]
Mr. Deputy Speaker: Order. Hon. Members not taking part in the debate should leave the Chamber quickly and quietly.
Mr. Cryer: I am sorry about the interruption from the parliamentary agents to whom more discipline might be applied. I am grateful to you, Mr. Deputy Speaker, for curbing their activities. I want to know whether the minutes of the Committee and the record held by the Clerk to the Private Bill Office for this Bill are before you or the Clerk of the House so that we can seek guidance if necessary.
Mr. Deputy Speaker: I understand that the report of the Committee is available.
Mr. Cryer: I am asking whether the Clerks have it, because it is an important source of guidance to the House in debating the Bill.
Mr. Deputy Speaker: I am sure that whatever documentation is relevant and necessary for our debate is available to hon. Members.
Mr. Dennis Skinner: We heard that story last week on the Redbridge Bill and for about half an hour we were told that we were debating clause 6. After some hurried consultations we were told that clause 6 was not in the Bill. You were in the Chair, Mr. Deputy Speaker, and the hon. Member who was moving the Bill had to abandon it. We just want to make absolutely sure that my hon. Friend the Member for Derbyshire, North-East (Mr. Barnes) does not start to debate a part of the Bill that is not there for hon. Members to examine. The Redbridge Bill was introduced in the Lords, nobody spoke on it and it went through like a dose of Epsom salts. Let us be sure this time. Are we in order? It is a fair question.
Mr. Deputy Speaker: My recollection of the events of last week is a little different from that of the hon. Gentleman. When the matter to which he refers was raised I suggested that, pending clarification, we should proceed with the debate. When I eventually received the information that was relevant to the point of order I took the appropriate course. We should sensibly proceed that way again. I am assured by the Clerk that all the relevant information is available.
Mr. Holt: I beg to move, That the Bill be now read the Third time.
Mr. Harry Barnes: On a point of order, Mr. Deputy Speaker. As all the relevant information is before the House, I should like your guidance on the distinction that seems to exist between the record of the proceedings of the Committee, which is held by the Clerk in the Private Bill Office, and its formal decisions, including those taken in private session, and the minutes of the meeting in public session. A decision was made about the placement of the headquarters of the Tees and Hartlepool port authority—
Mr. Deputy Speaker: Order. That is a matter that can be dealt with in the debate.
Mr. Barnes rose—
Mr. Deputy Speaker: Order. Now that the hon. Member for Langbaurgh (Mr. Holt) has moved the Third Reading, it may be useful if I tell the House that Mr. Speaker has not selected the amendment for recommittal in the name of the hon. Member for Middlesbrough (Mr. Bell) and others. The matters that gave rise to that amendment can be discussed during the debate if hon. Members so wish. Is that the point that the hon. Member for Derbyshire, North-East (Mr. Barnes) is raising?
Mr. Barnes: Further to that point of order, Mr. Deputy Speaker. I am not making a point about the placement of the authority, which is a matter for debate. I am making a point about the distinction between the record of the proceedings which is held in the Private Bill Office and the minutes. There is a clear discrepancy between the two on one point. The minutes say that the issue of the headquarters of the authority will be dealt with in the House of Lords, and that the promoters have agreed to that. However, the records of the proceedings of the Committee do not include that undertaking. What is the significance of that discrepancy? Should we adjourn until it is resolved?
Mr. Deputy Speaker: For the purpose of our Standing Orders and our procedures, the relevant record is that contained in the official record of the proceedings of the Committee. I understand that that is available.
Mr. Stuart Bell: On a point of order, Mr. Deputy Speaker. I am grateful to you for letting the House know that the amendment in my name and that of my hon. Friends has not been selected by Mr. Speaker. The point of order on which I seek your guidance relates to a point made in the Committee examining the King's Cross Railways Bill, which said that any amendments agreed in Committee ought to be taken on the Floor of the House. I respect and accept the decision made by Mr. Speaker about our amendment, but that Committee said:
"We are quite clear that if a House of Commons committee considers that a Bill referred to it stands in need of amendment, then it is the duty of that committee to make that amendment."
The Committee examining the Tees and Hartlepool Port Authority Bill has acted in a way condemned by the King's Cross Railways Bill Committee. If the amendment that the Committee wanted but did not make is not inserted into the Bill, the other place may take a contrary view. If it does so, this House will have no further opportunity to amend the Bill. Thus, the will of the Commons will be frustrated
108
and that is hardly in the interests of parliamentary democracy. Although the promoters have undertaken to propose an amendment to the Bill in the other place, they have done so only in order to avoid further scrutiny on Report. That is undemocratic and weakens the House of Commons.
The House of Commons has a duty to maintain a vigilant watch over the Executive and hold it to account. Democracy is weakened by a thousand small cuts. While the failure of the Committee to refer the Bill back for Report in the House is a small cut, it is an important one.
On 21 June 1990, the Government issued a consultation document called "Private Bills and New Procedures". May I have your assurance, Mr. Deputy Speaker, that the points of order that we have made tonight, as the Bill returns to the Floor of the House from Committee, will be passed on to those who prepared the document, so that the House can exercise its right to protest and say that this is wrong? The House of Commons must look at amendments coming from Committee. The Committee cannot decide simply to have these referred to the other place, thereby depriving Members of Parliament of a proper and valid scrutiny over the Executive.
It being Ten o'clock, MR. DEPUTY SPEAKER interrupted the proceedings.

BUSINESS OF THE HOUSE
Motion made, and Question put,
That, at this day's sitting, the Tees and Hartlepool Port Authority Bill may be proceeded with, though opposed, until any hour.—[Mr. Sackville]
The House divided: Ayes 158, Noes 50.

Division No. 327]

[10 pm

AYES

Amess, David

Couchman, James

Arbuthnot, James

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

Arnold, Jacques (Gravesham)

Davis, David (Boothferry)

Arnold, Sir Thomas

Day, Stephen

Atkins, Robert

Devlin, Tim

Baker, Rt Hon K. (Mole Valley)

Dorrell, Stephen

Baker, Nicholas (Dorset N)

Douglas-Hamilton, Lord James

Baldry, Tony

Dykes, Hugh

Beaumont-Dark, Anthony

Eggar, Tim

Beggs, Roy

Fallon, Michael

Bennett, Nicholas (Pembroke)

Fishburn, John Dudley

Benyon, W.

Fookes, Dame Janet

Bevan, David Gilroy

Forsyth, Michael (Stirling)

Blackburn, Dr John G.

Forth, Eric

Body, Sir Richard

Freeman, Roger

Boscawen, Hon Robert

Gale, Roger

Bowden, A (Brighton K'pto'n)

Glyn, Dr Sir Alan

Bowis, John

Goodlad, Alastair

Braine, Rt Hon Sir Bernard

Goodson-Wickes, Dr Charles

Brazier, Julian

Greenway, Harry (Ealing N)

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

Grist, Ian

Browne, John (Winchester)

Hague, William

Burns, Simon

Hamilton, Hon Archie (Epsom)

Burt, Alistair

Hamilton, Neil (Tatton)

Butcher, John

Harris, David

Butler, Chris

Hayward, Robert

Butterfill, John

Hicks, Mrs Maureen (Wolv' NE)

Carlisle, Kenneth (Lincoln)

Hogg, Hon Douglas (Gr'th'm)

Carrington, Matthew

Holt, Richard

Carttiss, Michael

Howard, Rt Hon Michael

Chalker, Rt Hon Mrs Lynda

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

Chapman, Sydney

Howarth, G. (Cannock & B'wd)

Chope, Christopher

Howe, Rt Hon Sir Geoffrey

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

Hughes, Robert G. (Harrow W)

Clark, Sir W. (Croydon S)

Jack, Michael

Conway, Derek

Jackson, Robert

Coombs, Anthony (Wyre F'rest)

Janman, Tim

Coombs, Simon (Swindon)

Jessel, Toby

Cope, Rt Hon John

Jones, Gwilym (Cardiff N)

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Key, Robert

Patnick, Irvine

King, Roger (B'ham N'thfield)

Patten, Rt Hon Chris (Bath)

King, Rt Hon Tom (Bridgwater)

Patten, Rt Hon John

Kirkhope, Timothy

Porter, David (Waveney)

Knight, Greg (Derby North)

Portillo, Michael

Knight, Dame Jill (Edgbaston)

Redwood, John

Knox, David

Renton, Rt Hon Tim

Lamont, Rt Hon Norman

Rhodes James, Robert

Lang, Ian

Riddick, Graham

Lawrence, Ivan

Rifkind, Rt Hon Malcolm

Leigh, Edward (Gainsbor'gh)

Roberts, Sir Wyn (Conwy)

Lightbown, David

Rumbold, Mrs Angela

Lloyd, Peter (Fareham)

Ryder, Richard

Lyell, Rt Hon Sir Nicholas

Sainsbury, Hon Tim

MacGregor, Rt Hon John

Sayeed, Jonathan

MacKay, Andrew (E Berkshire)

Scott, Rt Hon Nicholas

Maclean, David

Shaw, Sir Giles (Pudsey)

McLoughlin, Patrick

Shaw, Sir Michael (Scarb')

McNair-Wilson, Sir Michael

Spicer, Sir Jim (Dorset W)

Major, Rt Hon John

Steen, Anthony

Malins, Humfrey

Stevens, Lewis

Marshall, John (Hendon S)

Stewart, Andy (Sherwood)

Martin, David (Portsmouth S)

Summerson, Hugo

Mates, Michael

Taylor, Ian (Esher)

Maude, Hon Francis

Taylor, John M (Solihull)

Mawhinney, Dr Brian

Tebbit, Rt Hon Norman

Mayhew, Rt Hon Sir Patrick

Thompson, D. (Calder Valley)

Mellor. David

Thurnham, Peter

Mills, Iain

Trippier, David

Mitchell, Andrew (Gedling)

Twinn, Dr Ian

Montgomery, Sir Fergus

Waller, Gary

Morrison, Sir Charles

Watts, John

Morrison, Rt Hon P (Chester)

Wheeler, Sir John

Moynihan, Hon Colin

Widdecombe, Ann

Needham, Richard

Winterton, Nicholas

Newton, Rt Hon Tony

Wood, Timothy

Nicholson, David (Taunton)

Yeo, Tim

Onslow, Rt Hon Cranley

Young, Sir George (Acton)

Oppenheim, Phillip

Page, Richard

Tellers for the Ayes:

Paice, James

Mr. Tom Sackville and

Parkinson, Rt Hon Cecil

Mr. Tim Boswell.

NOES

Barnes, Harry (Derbyshire NE)

Lofthouse, Geoffrey

Barron, Kevin

McAllion, John

Beith, A. J.

McKay, Allen (Barnsley West)

Bell, Stuart

McNamara, Kevin

Buckley, George J.

McWilliam, John

Campbell, Menzies (Fife NE)

Mahon, Mrs Alice

Campbell-Savours, D. N.

Marek, Dr John

Clark, Dr David (S Shields)

Michael, Alun

Clwyd, Mrs Ann

Pike, Peter L.

Crowther, Stan

Powell, Ray (Ogmore)

Cryer, Bob

Prescott, John

Dalyell, Tam

Ruddock, Joan

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

Short, Clare

Dixon, Don

Skinner, Dennis

Dunnachie, Jimmy

Smith, J. P. (Vale of Glam)

Evans, John (St Helens N)

Snape, Peter

Faulds, Andrew

Spearing, Nigel

Fearn, Ronald

Turner, Dennis

Flynn, Paul

Vaz, Keith

Galbraith, Sam

Wallace, James

Golding, Mrs Llin

Wigley, Dafydd

Hardy, Peter

Winnick, David

Ingram, Adam

Wise, Mrs Audrey

Jones, Barry (Alyn & Deeside)

Kirkwood, Archy

Tellers for the Noes:

Leadbitter, Ted

Mr. Ronnie Campbell and

Lloyd, Tony (Stretford)

Mr. John Cummings.

Question accordingly agreed to.

Tees and Hartlepool Port Authority Bill
Mr. Deputy Speaker: Let me now deal with the point of order raised by the hon. Member for Middlesbrough (Mr. Bell). I understand his concern, but I am sure that he
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would not expect me to comment on either the proceedings or the conclusions of the Committee that considered the Bill. He will have an opportunity to air the matters to which he alluded, and it will be for the House to make a decision in the light of what is said in the debate. The hon. Member for Langbaurgh (Mr. Holt) may choose to comment on what is said before the end of our proceedings.
10.13 pm
Mr. Holt: Let me continue what I was saying some 20 minutes ago, when I moved the Third Reading.
There is no need for me to repeat in detail the arguments for the Bill, which the Committee has already scrutinised exhaustively. The Committee found, after lengthy consideration, that the promoters had made their case for the preamble. As the Bill's sponsor, I wish to put on record my thanks to the Chairman and members of the Committee for their diligence and hard work.
The promoters agreed to a number of undertakings during the Committee stage. First, and to answer the point of order raised by the hon. Member for Middlesbrough (Mr. Bell), the head office of the successor company will be located in Cleveland. That will be so only for as long as there is a county named Cleveland, but it is my wish and that of most of my constituents that the county name reverts to North Yorkshire as soon as possible. When that happens, the company's headquarters will remain where they are, but the county boundaries will be removed or changed. Nevertheless, the headquarters will remain on Teesside, which is the best way that we can phrase the undertaking given by the authority.
Secondly, the authority recognises the significance of this development and fully agrees that an employee share scheme be established in respect of the holding company. That aspect was the subject of considerable debate in Committee, and the promoters are happy to give an undertaking that employers will have that right. Employee involvement in the ownership of the business has always been viewed by the authority as an important factor alongside other local interests, and we want to maintain that policy.
Since privatisation began, Teesside has enjoyed a considerable upsurge in business. Only 10 days ago, albeit without a great deal of national publicity, we launched a roll-on/roll-off ferry service that will operate between Teesside and Hamburg twice a week. That will open up a great deal more of eastern Europe's market potential to Teesside and to the people living there.
Our third undertaking is that the shareholders in any employee share scheme will carry full voting rights to the successor company. We give that undertaking freely and openly, so that everyone knows that the points raised in Committee have been fully understood by the Tees and Hartlepool authority. I repeat the clear undertakings that it has given.
It is a pity that Labour Members have opposed this opportunity for Teesside, but it is not untypical. Only my hon. Friend the Member for Stockton, South (Mr. Devlin) and I have been fighting for the steel industry on Teesside. Scottish Labour Members and my hon. Friends who represent Scottish constituencies have all been fighting for the Scottish steel industry. Whenever there have been debates or questions about the steel industry over the past few months, not one Labour Member has spoken in

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support of steel workers on Teesside. We deprecate that in the way that we deprecate the fact that Labour Members failed to support the workers in the Tees port, the developments there, and the jobs and economic well-being that will flow from that first privatisation of a port.
Mr. A. J. Beith: As the hon. Gentleman has described what the promoters have done since the earlier stages of the Bill, perhaps he will give us their view of the levy that has been imposed on the proceeds of the privatisation since the Bill was first
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introduced, and which will take perhaps two thirds of the amount for the central Exchequer. Are the promoters happy about that? Does it in any way change their view of the Bill?
Mr. Holt: Naturally, when one takes money from someone—and I am sure that the hon. Gentleman is no different—they are not particularly happy about it. Nevertheless, the promoters are happy that they are losing only half the money. They might have lost the whole lot. The money that they retain will be reinvested in the port authority and will provide job security for the future. I again commend the Bill to the House.
10.18 pm
Mr. Ted Leadbitter: One of the most significant aspects of the Bill is that the Government have not remained neutral. In the debate on the Midland Metro Bill, the Minister for Aviation and Shipping made a short intervention in which he gave no encouragement to the promoters of that Bill that they could look forward to any grant under section 56. He said that, as always with a private Bill, the Government were neutral. How the Minister dares to say that, despite the evidence of the Official Report especially in relation to this Bill, is beyond the belief of any reasonable person in the House.
Before I deal with some of the aspects proper to Third Reading, I congratulate the members of the Committee who worked exceedingly hard during hearings on the Bill dealing with the submissions by the proposer and petitioners. The petitioners and the proposer also worked exceedingly hard. Having said that, one would have thought that hon. Members should be reasonably happy but, time and again, especially in this Session, hon. Members have been increasingly worried about the private Bill procedure.
The promoters of the Midland Metro Bill, which we have just finished considering, said that they had spent about £1 million and the petitioners said that they had spent many thousands of pounds. A large amount of money has been spent on the Tees and Hartlepool Port Authority Bill. However, where the functions of the House of Commons are concerned, hon. Members with local knowledge are virtually neutralised. Four hon. Members and the Chairman sit upstairs and objectors have little impact Even though the petitioners perform their services very well, it is at great expense to the authorities and not to the satisfaction of the objectors.
Mr. Cryer: Does my hon. Friend accept that one of the difficulties with the private Bill procedure, and with this Bill in particular, is that if the Chair refuses to use his casting vote to allow any hon. Member to talk—as on this occasion—it cuts out any sound and reasonable objections which ordinary citizens are prepared to advance?
Mr. Leadbitter: That is the case.
Let us forget for one moment the presumption that because the proposers proposed the Bill they are right. The Tees and Hartlepool Port Authority has a chairman, a chief executive, a kind of secretary and 10 non-executive members. Between them, they have been dilly-dallying with the Government for the past few months. Yet hon. Members who, with great respect to those officers, have greater experience of the area have a right to be heard, too. It should not be implied that hon. Members are not competent to have an input into the argument when we have had many more years experience and service in the area than any of those people, including the hon. Members for Langbaurgh (Mr. Holt) and for Stockton, South (Mr. Devlin). Let us make that clear.
What is an important objection? We will come to the contradictions in a minute. Mr. Bartlett, the counsel for the proposers, was so anxious to make a good case that from the moment he made his submission in Committee he referred to section 12(3) of the Tees and Hartlepools Port Authority Act 1966 and pointed out that responsibilities for the care and maintenance of the port area were a constraint. He did not want them. That was his first argument.
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Mr. Hackney, the chief executive of the authority, was not running on quite the same track as his secretary. In Committee he referred to those responsibilities and said that a special clause protected Hartlepool. I fail to see how a senior officer can say that a section will look after the interests of the infrastructure, of the breakwater and the piers, when counsel in Committee says that Hartlepool wants none of those constraints. He used the word "constraint" as a reason for promoting the private Bill. If the Bill is passed, we know what will happen to the protection of the port. The history of the last 10 years shows that questions have been raised about invoking the responsibilities enshrined in section 12(3) of the Act.
Hartlepool borough council's petition refers, as a matter of primary importance, to section 12. It is worth reading what the petition says:
"Section 12(3) of the Act of 1966 states that the authority shall 'take such steps from time to time as may be necessary for the maintenance of so much of the harbour as comprises the existing port of Hartlepool in a condition not less efficient, safe and commodious than it is at the passing of this Act.' "
I know how important that section is because I was the Member who had it written into the Tees and Hartlepool Port Authority Bill of 1966. The clause was devised by me, the then town clerk of Hartlepool borough council, and the parliamentary commissioners. The clause had legal backing and it was accepted by the House. Since then, however, the Tees and Hartlepool port authority has been reticent about invoking it and in the case of this Bill has said that it is a constraint. On page 12 of its proof of evidence to the Committee, referring to the section, Hartlepool borough council says:
"The importance of the port and harbour to the well being of the community has long been recognised by the council. Whilst the port authority indicate that the proposed legislation would preserve the burden of that duty upon the operating company, none the less the council suspect that should other interests or priorities demand, the discharge of that duty will be diminished under the proposed arrangements."
That is the truth of the matter.
Another truth is that 10 years ago Hartlepool borough council did not support that section of the 1966 Act. There was a long-drawn-out argument about the protection of the breakwater. Contrary to what is said in its proof of evidence, Hartlepool borough council did not recognise its importance for a long time, but it has come round to recognising it now.
Mr. Skinner: Why did it not recognise it then?
Mr. Leadbitter: It was suffering from incompetent advice. Other legal advisers are helping us now. In Committee, the port's chief executive said that the section is a protection for Hartlepool but to make out a case for the private Bill counsel said that it was a constraint. Men who are supposed to be honourable and intellectually attuned are contradicting each other. We do not have what I call truth in the House of Commons. That is not unusual. I have been here for a quarter of a century. During that time I have found that it is easier to pursue a lie than to find the truth. The only problem is that when one does find the truth certain people get very angry about it.
Mr. Skinner: My hon. Friend plays a leading role in this place. He is on the Chairmen's Panel. Has he noticed that during the past few days the well-paid parliamentary agents who play such a significant role in private Bills, including the Tees and Hartlepool Port Authority Bill,

115
have got it wrong? Those tin-pot agents, if I may so describe them, introduced a Bill last week. Much to the embarrassment of Mr. Deputy Speaker, who, as always, was trying manfully to get it through, my hon. Friend the Member for Derbyshire, North-East (Mr. Barnes) discovered that the parliamentary agents, with their fat wallets, paid for by the taxpayer, had left out clause 6 which had gone through the House of Lords on the nod, not being spoken on by anyone. The result in the House of Commons was like a Monty Python show, talking about clause 6 when it was not there.
I know that my hon. Friend the Member for Hartlepool (Mr. Leadbitter) has scanned the Bill because I heard him speaking on it once before. I hope he has looked at it carefully, because there is a chance that something is missing. These agents, who are similar to the ones who advised Hartlepool council 10 years ago, may well have cocked it up again. My hon. Friend should be ultra-careful about this as there is some chance that we can stop the whole show.
Mr. Leadbitter: It is possible that we could still do that. My hon. Friend mentions legal fallibilities.
Mr. Skinner: That is one way of putting it. No wonder my hon. Friend is on the Chairmen's Panel.
Mr. Cryer: No wonder my hon. Friend smoked out Blunt.
Mr. Leadbitter: It was harder to smoke out Blunt than it was to smoke out the promoters of this Bill.
I turn to the saga of the 50 per cent. sale of the proceeds, which is going into the pockets——
Mr. Deputy Speaker: Order: I hope that the hon. Gentleman will avoid turning his back on the Chair. I seem to be missing his jests.
Mr. Leadbitter: This part of the story is at least fascinating. We shall take with it the saga of the enabling legislation.
I do not know whether the chief executive was a delegate at the Tory party conference, but we were receiving communications from Bournemouth from time to time. I thought that the Secretary of State for Transport had enough trouble without him being there. The chief executive's statements were outdone by the more robust language of the secretary of Tees and Hartlepool port authority, a man who suffers from a lack of vocabulary and, at times, politeness.
Mr. Cryer: One of the questions that we continually raise during proceedings on private Bills is the involvement of the Government. My hon. Friend said that an executive was at the Conservative party conference. I wonder if he could give us further information about that as it implies seedy collaboration between members of the Conservative party and others to get the Bill through. That would be quite outside Standing Orders and the honour of this ancient and honourable House.
Mr. Leadbitter: It is more than a coincidence that we have this private Bill and the chief executive in Bournemouth. The chief executive is not an old-age
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pensioner. He is not thinking of retiring there, but he may say that it was a pure accident that the conference took place while he was visiting that very interesting town.
I have looked through some of the epistles, the communiqués and their dates. On 14 May 1990, during a debate on the Clyde Port Authority Bill, it was indicated that 50 per cent. of the sale of the shares would be paid to the Exchequer whenever a trust port was converted into a company. The percentage was agreed as a broad figure for all trust ports. The House should remember that. The chief executive—through his secretary, of course—claimed that the 50 per cent. left was a gain. He gave the impression that he had negotiated the figure, but the Official Report gives the lie to that. Some of these officials are so imbecilic that they think that Members of Parliament cannot read.
Mr. Beith: The situation is worse than that which the hon. Gentleman has described. On 3 July, in the Standing Committee on the Finance Bill, the Chief Secretary to the Treasury admitted in answer to me that the levy would amount to a tax charge of 67·5 per cent. He put it another way. He said that that
"means a cash injection of 32.5 per cent."—[Official Report, Standing Committee E, 3 July 1990; c. 568.]
In other words, what the taxman leaves us is a cash injection. By July, the Government had made it clear that, with the combined effect of the levy and capital gains tax, they expected to get more than two thirds of the proceeds.
Mr. Leadbitter: I accept that observation. The hon. Gentleman expressed his concern in my constituency, and I took note of that. The hon. Gentleman jumped to July. I want to go back to June. On 27 June 1990, the Clyde port authority sent a letter to worthy hon. Members, such as myself, and said:
"We share the Government's view"—
that means that the Government have expressed a view for the authority to share——
"on privatisation".
At the end of the letter, the authority adds:
"This Bill is with the full backing and support of the Government."
The Minister for Aviation and Shipping must not sit there naughtily, feeling protected and pretending neutrality. We know what is being done by his mate in a higher office. It is a sham, even if he calls it democracy.
On 15 October 1990, we come back to our worthy secretary of the Tees and Hartlepool port authority. That man has had more mention in the House of Commons than in the whole of the rest of his public life—
Mr. Skinner: You don't like him, do you Ted?
Mr. Leadbitter: I feel disposed to limit my feelings of friendship.
The secretary of the Tees and Hartlepool port authority wrote:
"We have also won the return of the 50 per cent. proceeds."
He had nothing to do with it—he was told what to do. Later on, the chief executive said that it came as no surprise to him. They cannot even work together. As I said, when we reach privatisation in four months' time, we shall watch their salaries go up. But they have not even worked for it. They are not even in harmony with each other.
On 5 October, the chief executive of the Tees and Hartlepool port authority, in an enclosure to the management and staff, wrote:

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"Delay on this Bill could lose us our lead and the benefit of the return to the business of 50 per cent. of the proceeds."
What wishful thinking. He is saying, "Do not oppose the Bill. Do not go through the democratic process because if there is a delay we shall lose our lead and run the risk of not getting our 50 per cent." Suppose that someone pinches half my money. If I then say that what I have left is a gain, I ought to be seeking psychiatric treatment.
On 9 October 1990, the secretary of the Tees and Hartlepool port authority, on the announcement of the enabling legislation, said this:
"The situation that we foresaw has now materialised."
I think that he was a bit tired; he had been overworked and had not read the Official Report. Way back in March 1988, long before the Tees and Hartlepool port authority thought about a private Bill, the Secretary of State, in a talk to the ports federation, had made it clear that he saw advantages in privatisation. He then said that he was very disappointed by the lack of response. There is no real upsurge of support for privatisation and he has been bludgeoning on since then.
The proof of the pudding is always in the eating. The chief executive answered the counsel for the petitioners about when he became disenchanted with the present constitution. The House will be pleased to know that this Bill reached this House having received no consultation. It was not challenged in Committee and the counsel for the petitioners pointed out bluntly in the last sitting that there had been no consultation. The board agreed the Bill's contents in June 1989 and the Bill reached the Private Bill Office just before the closing date of 27 November. The summer recess split the board's agreeing the Bill and its appearance in the Private Bill Office, so consultation as we understand it did not take place. Only one or two little representations which had already been agreed upon were discussed.
The secretary of the board claims that the board foresaw, but it foresaw nothing. That is how the Bill's promoters have been twisting the words around. Whether they like it or not, they must accept that the petitioners have addressed the facts. They have not tried to distort or to misrepresent. The latter is characteristic of the promoters. The House should be warned that, when we have an opportunity to discuss the new private Bill procedures, never again will we find ourselves in a position of incurring great expense as with public or enabling Bills.
The House is more than likely to grant the Bill its Third Reading and to pass it to the other place, but the procedure leaves a bad taste in the mouth because a handful of people have determined the course of events. They have tried to suggest to hon. Members and to the petitioners that they have behaved properly, but they have not.
Mr. Bartlett was counsel for the petitioners in the Committee upstairs. On 15 May 1990 he said:
"So it is by this means that the proceeds of the sale are returned to the holding company and become available for investment in the expansion of the business. Those will be reduced on the basis of the current indications of the Government by some 50 per cent. Taxation might reduce it further, but it is those proceeds which become available as a result of selling the shares."
The whole of the property, all the assets and the shares would be sold and instead of all the proceeds going back to the port as they should, the Government are going to take half. Under the present system, the port's revenues go into port expansion programmes or to reduce charges. The
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hon. Member for Langbaurgh (Mr. Holt) referred to one of the port authority's new ventures. That has been implemented under the present legislation, not under the new proposals.
The promoters knew about the 50 per cent. beforehand. They did not foresee it—it was common knowledge. Rather than include it in the Bill where we could see it, they slipped it in during progress on the Finance Bill so we might not see it. That shows how devious the whole process was.
Mr. Skinner: It is a pity they did not slip something into the Finance Act 1981, which produced the massive tax loophole allowing people like Lady Porter and one or two others to invest in offshore companies and make a big fat killing. Has my hon. Friend seen page 17 of the minutes of evidence? I think that it refers to the bloke to whom my hon. Friend has been referring. The minutes of evidence state:
"Mr. Hackney himself admits that the shareholders of the holding company may or may not be concerned with the welfare of Teesside. If they are to behave as logical, reasonable investors would behave, they will be concerned for their profits."
There it is in a nutshell. They are saying, "We are riot worried about the people of Teesside and Hartlepool." All they are concerned about is making money. Hon. Members have argued about the private Bill many times. In this case—I should like my hon. Friend to comment on it—the Government have been promoting the idea. They are not content with just walking through the Lobby and supporting the Bill. They have actually promoted it. There has been a sinister collaboration with people like Hackney and the others, together with the Government, who have now got the Bill through on the private Bill procedure. In reality, it should have been part of their programme if they had really believed in it.
Mr. Leadbitter: Now moving to the 50 per cent. robbery—
Mr. Skinner: Yes, robbery.
Mr. Leadbitter:—the enabling proposals that were announced in Bournemouth, the conference town, the Secretary of State and the chief executive of the port authority have now agreed on one thing. Mr. Hackney said:
"Our belief is that the Government announcement of an enabling Bill of trust ports"
that is, to privatise—
"would not have happened without our Bill, and the money that was spent on it has been very well spent to that end."
That is not the truth. There is a word for that in the House of Commons.
Mr. Skinner: Yes, lying.
Mr. Leadbitter: An hon. Member would not get away with it because it is not the truth. I consider it to be utter impertinence to write to a Member of Parliament or to anybody and say that this enabling proposal would not have existed without the Bill. I now give another quotation to which I referred on Second Reading on 15 Marcxh.
Mr. Cryer: I remember it well.
Mr. Leadbitter: I remember it well, too. I refer to the report of the minutes of evidence of the first sitting of the Committee on 15 May 1990. Mr. Hackney himself exposed the real position. He said:

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"We were also advised"—
that is, by the Department of Transport—
"that the Government would not be providing enabling legislation at that time because of problems with legislation in the House."
There was not sufficient time.
Good observers in the House know full well that it has already been announced in the House what things will not come under privatisation in this Parliament. One is British Rail, but there is another. Nothing was mentioned about enabling proposals for the ports. That was on the cards—it has been on the cards for a long time and it has had to stand in the queue, but whatever else is said, once that queue was moved aside everybody knew that the enabling proposals would come to the House. It was not because of the private Bill that the Secretary of State is bringing forward the measures. More than that, I wonder what kind of Secretary of State would have the notion, even if it were possible, to promise enabling legislation for all ports on the basis of one port. It is a non sequitur in that sense and it is an untruth in another.
I now refer quickly to matters in contrast—for example, the port authority of Clyde—in this argument. At least the authority gave a raw, frank admission that its Bill is what the Secretary of State for Transport wanted and what the Chancellor of the Exchequer was to take. That is the difference in the conduct of the Clyde port authority and the Tees and Hartlepool port authority. We must look at the management. As I said, the board is made up of non-executive members. In other words, they are not in the driving seat. At present there are 10, selected by the Secretary of State. The day-to-day management and the authority of the board is left to the management team.
I should like to give a little caveat here. On 15 March I talked about the success of the port. On page 17 of the minutes of the Committee, Mr. Hackney states:
"In 1967 the authority broke even before taxation and employed 2,177 people. It handled just short of £12 million. In 1989 the profit before exceptional items and tax was £11 million. The labour force was dropped to 828 and the tonnage increased to 38 million tonnes."
That shows the streamlining—the economic health—of the port under existing legislation.
Of course, the first step towards privatisation was to get rid of the dock labour scheme. It was a case of "Get rid of these expensive lads—every one of them", and it was done. I feel strongly about the success of the port and that makes it harder to see it run into the more risky waters of private enterprise.
Mr. Skinner: My hon. Friend has said that the abolition of the dock labour scheme was the first step towards these proposals. My hon. Friend is a member of the Chairmen's Panel and has been a Member of the House for 26 years. He is saying that, on the one hand, the Government introduced a Bill of their own in the Queen's Speech to get rid of the dock labour scheme, while at the same time they have encouraged and connived with others to use the private Bill procedure to get the second phase of the scheme through.
The Government have a majority of 150 over us and they are tipping off the private Bill people and saying, "Look here, we don't want to stuff our programme with too much, but since we have a majority of 150 and we do not need everybody here to pass a private Bill, you
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smuggle it in that way; we'll give you a hand and get the Prime Minister or the Secretary of State for the Environment to go through the Lobby at 10, 11 or 12 o'clock at night to support it." That is a corrupt practice of a Government with a big majority who are using the private Bill procedure to tell the nation that this is a private matter when, in fact, it is an addendum to the Government's manifesto and programme. The whole thing stinks. What my hon. Friend says has been said by us many times previously—in relation to Bills relating to British Coal and to Associated British Ports. My hon. Friend has added something new by being able to show that the abandonment of the dock labour scheme is part and parcel of the private Bill procedure—
Madam Deputy Speaker (Miss Betty Boothroyd): Order. Does the hon. Gentleman wish to make a speech? If so, I am sure that he will be able to catch my eye eventually.
Mr. Skinner rose—
Madam Deputy Speaker: Order. Mr. Leadbitter has the Floor.
Mr. Leadbitter: The shadow Secretary of State for Bolsover did it in one. He got it right.
Madam Deputy Speaker: It took him a long time to do it.
Mr. Leadbitter: Having covered the success of the port in that thumbnail sketch, I now remind the House that, apart from the constraints that Mr. Bartlett wanted to remove because they were a costly item in the port's financial affairs, he mentioned two other reasons for the Bill. One was getting ready for 1992, but I will not waste time on that——
Mr. Skinner: I would.
Mr. Leadbitter: No, there is plenty of time for other things. The other idea was to be free to go into other investment ventures.
In pages 25 and 26 of the proceedings of the Committee Mr. Hackney said:
"The authority over the years has built up considerable sums of money initially invested in the money markets but the stock market suggested better returns so surplus funds were divided into two and given to professional investment managers. There has been a significant growth in the return achieved on investment income and it is a very successful part of the business."
That is under the present Act. He then says:
"A sum was set aside to invest in companies in the north-east."
There is nothing wrong with that. He goes on:
"A sum was set aside for port-related companies"—
there is nothing wrong with that either—
"and money was set aside for companies that were not port related."
That brings me back to the Second Reading on 15 March. What can be done under the Bill that it can be claimed could not be done under the Act? The companies were listed on page 26 of the report. The chief executive of the port authority said that the Tees and Hartlepool port authority set up a company called Port Authority Distribution Services and another called Tees and Hartlepool Port Authority Developments
"to utilise in future in distribution and property business."
I find that of interest. He was asked by counsel upstairs:

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"What corporate plan have you got for this investment in non-port activities?"
The answer was:
"Integrated transport business"—
which he said was dear to his heart—
"and property."
Yet I find in the evidence that it could deal in property. I do not think that I misread the minutes. It is interesting that there is no corporate plan. There is no plan of any kind for what might be called the financial strategy requirements of those non-port activities. Yet under the present Act the port authority can invest in non-port related activities. The list of them appears in the Official Report. I did not put them there. Mr. Hackney put them there.
One matter is outstanding in the new Bill. On Third Reading we should examine it by what I call the question and answer process, which was used in Committee. We dealt with what are called the holding company and the successor company. I shall not go into the details but the report lays out specifically and with clarity that the holding company would deal with the financial side, the funding and so on and the successor company would deal with the responsibilities to the port such as those under section 12(3) of the Act which requires the authority to maintain the ports and the piers which are constraints. The report said that the port would become an integral part of a group business and that failure in the performance of the group was likely to affect the core port business and the economy of Teesside. The funds of the core business are for group purposes.
In other words—in short, thumbnail language—if the port is one of a group and the group does badly in its investments, does the port suffer? Or if there is an investment proposal, should the money go into the port or where there are better returns to be found in the market? Does this organisation of infrastructure deal positively and certainly with the need for adequate resources for the port? The evidence appears to show some considerable doubt.
On page 39 of the Committee's proceedings Mr. Hackney concluded the part that I described by saying:
"£20 million in cash surpluses was not invested in Teesside but in stocks and shares, some in London, some abroad."
Counsel put to him:
"This Bill is venturing the resources of the port capital invested at risk."
Mr. Hackney agreed. He was asked:
"Two aspects, public and statutory responsibilities which have to be preserved and supporting plans to make the responsibility work."
Mr. Hackney agreed. He was asked:
"They go together but with this Bill the control of the funds goes to the holding company."
He agreed. It was put to him:
"The responsibility goes to a successor company and the funds are in other hands."
He agreed. He was asked:
"The kernel of your case is that if we were purely concerned with port business the present constitution would be satisfactory."
Mr. Hackney said yes. He was then asked:
"But because you want to engage in wider trading activities that constitution is unsatisfactory."
Mr. Hackney said: "That is so." He was asked:
"If the aims and object of the authority is the port then the present constitution is adequate."
Mr. Hackney said yes.
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"The result of privatisation is that 50 per cent. of assets built up and held for future port development goes into the pocket of the Government."
Mr. Hackney said yes.
Page 34 records Mr. Hackney's answers to counsel for the petitioners who said that there was no groundswell among ports for privatisation. Mr. Hackney said:
"At that time most ports felt that there would probably be some Government enabling legislation and we were waiting for that."
If they were waiting for it and knew that it was coming, why in God's name have they spent so much money? Why are my poll tax payers paying for their profits? Privatisation is like a little mouse running about and the little trap waiting for it is set by the takeover boys. Those who created this nonsense will find themselves out of a job.
Without prevarication, Mr. Hackney said that he was waiting for the enabling legislation. It will come during the next Session. I shall try hard to get the Lords to keep this Bill ticking over until the enabling legislation arrives.
Mr. Skinner: I have agreed with my hon. Friend for three quarters of an hour but he is now on dodgy ground. He wants the House of Lords to keep up the work. I wish him well, but the people who wanted to save the GLC said, "Wait until it gets to the House of Lords. Those independent men and women will stand up for us." What happened? The Prime Minister waved her wand and the Lords all turned up and got rid of the GLC. People said, "Wait until the poll tax gets to the House of Lords. By God, the Lords will make a difference. The SDP and the party that dare not speak its name will band together and stop the poll tax." What happened? Lords turned up from Canada, Scotland and Ireland. Two cousins met in the Lobby and were introduced by the Chief Whip of the Tory party and said "Hello, Charles." They had never met but had turned up to vote to get the poll tax through.
My hon. Friend will fight to the bitter end, but I do not want him to waste his energy. They were going to give us a chuck on with the Associated British Ports (No. 2) Bill, which was similar to this, and what did we get?—a gnat's whisker. My hon. Friends tried, but we could not get any amendments. My hon. Friend should battle on. but he should not put too much faith in the odd bods in the other place.
Mr. Leadbitter: My hon. Friend is quite right. I never dreamed that my threat had so much weight. However, I want to conclude.
Mr. Cryer: I am listening carefully to my hon. Friend, who is a man of authority, with many years experience. Before he rushes to his conclusion, could he dwell a little on asset stripping? That is what he is talking about—the seizure of these ports by private interests, and then the selling off of all the lands and assets on which the new owners can get their greedy hands. As a man of the area, he will naturally deeply resent the way that public assets are frittered away by private greed.
Mr. Peter Hardy: Will my hon. Friend give way?
Madam Deputy Speaker: Order. We cannot have one intervention on top of another. I am sure that the hon. Member for Hartlepool (Mr. Leadbitter) will want to respond.
Mr. Leadbitter: My hon. Friend the Member for Bradford, South (Mr. Cryer) is right. I have much experience of asset stripping. I used to call them professional enclosures. I used to mix with what was called the high-risk entrepreneurs, who would put their hands in the public purse for grants and loans, and when the time came to repay, would close the shop and go to other countries to open some factories, taking the equipment with them.
There used to be a company in my constituency called Foster Wheelers, which employed a lot of people. Rolls-Royce took it over, and it is now shut. The £15 million worth of defence nuclear orders that we had for many years disappeared, with some of the equipment going to a company in Newcastle called NEI, and some going to Derby. I hear that Parsons is talking of getting rid of 650 men because of the Gulf crisis. That is nonsense. There are not 650 men working out there. It just so happens that Rolls-Royce is working behind the scenes. They call it restructuring and reorganisation.
I have here another question from the minutes. Counsel asked:
"If we had minutes now, we would find nothing until recent times which would suggest that you were disenchanted with your position."
He was referring to the minutes of the authority. Mr. Hackney said, "Yes." The significance of the reference to the minutes is that counsel, who was paid a lot of money for his services, applied to the port authority for a look at the minutes of the undertaking over the previous three years, and was refused. So counsel had to formlate his question in that way to find out when Mr. Hackney and his secretary, and possibly a couple of others, became disenchanted.
I notice that the chairman of the authority has not said a ruddy word. He has been a silent partner—the do-as-you-are-told boy, whose name I do not even know. He was not in the Committee. He thinks that he rules the roost, but he does not. There is a kind of freemasonery working over there. Counsel wanted to get to the meaning of the minutes. He wanted to pinpoint the stage at which there was thought of privatisation. As he could not find that information in the minutes, he had to rely on the word of the chief executive. He asked:
"At what point were you disenchanted with your position?—only recently?"
The chief executive replied:
"That is so."
Question:
"You can carry on Port-related business of every kind under your present powers."
What we have to say to one another in this place must not and does not interfere with our regard for one another, but I say to the House, and especially to the hon. Member for Langbaurgh, that when the chief executive answered the question, he simply said yes. That appears on page 11 of the second volume of minutes.
Counsel then asked:
"Can development sites anywhere in the country be done, financed and invested in if they contribute to the welfare of the port?"
Mr. Hackney's reply was "Yes". There is no doubt about that answer. He was then asked:
"Could you establish an outpost, if you wished, on the Continent instead of the service between it and the port provided that it benefited the port?"
The answer was yes.
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The important words are "benefit of the port". As there is a holding company, a successor company and resources generally, surely any operation should be carried out to benefit the port. What is there in the Bill that differs from that?
A member of the committee—my hon. Friend the Member for Derbyshire, North-East—asked a significant question which appears on page 20 of the second volume of minutes. My hon. Friend asked:
"What advice have you received from the Department of Transport?"
This was the answer:
"The Department of Transport advised that the harbour revision route was not a route that the port authority could go down. We were advised by the Government that they would like to pass legislation, but because of the backlog of the legislation business"—
that is the enabling Bill—
"within the House it was unlikely that enabling legislation to enable trust ports to privatise could be passed. We know there was a degree of sympathy."
I have a list of the foreign and domestic traffic in the major ports that is split into five groups.
Mr. Skinner: My hon. Friend has been in articles for 26 years as a Member of this place. That being so, what is the view of the people of Hartlepool? If anyone knows the answer to the question, it will be my hon. Friend. Should there be a ballot? Should that sort of consultation with the people be organised? The Government talk about ballots for trade unionists and for everybody but themselves, and I should like to know whether steps can be taken and whethere they are in place to draw the people into the argument.
Mr. Leadbitter: Since the town was formed, since it started shipbuilding, since the related trades were established, since the beginning of steelmaking and since the importation of timber—the gamut of activities arising from the coal trade—the people of Hartlepool have had what might be described as a complete link with the port. It was one of the few ports where the public were able freely to walk from the new town of Hartlepool to the then ancient borough of Hartlepool. One was called West Hartlepool and the other Hartlepool. Educationists—I taught more than a quarter of a century ago—were able to take their children through the port and give them lessons about the origin of the ships and their cargoes. There were 4,500 people working on shipbuilding and a further 6,000 working for Richardson and Westgarth. That was more than 10,000 people, and with the related trades there were often as many as 15,000 people working in the port and its surrounding area. There was complete access.
When the Tees and Hartlepool port authority put forward its fancy ideas, footpaths were closed and the shipbuilding work disappeared, as did Richardson and Westgarth. There is hardly any work left, certainly not for that number of people. The authority said that it was dangerous for people to walk through the port. Once a year it carried out its daft notion of closing the remaining parts of the port for a couple of hours. I was there on one such occasion. I was not given access, but after a couple of hours I was told that I could walk through. What a farce. It is an attempt to justify the authority's behaviour. It says, "We have listened to our legal advisers", but some of them could not defend a man against a parking ticket.
Mr. Tim Devlin: The hon. Member for Bolsover (Mr. Skinner) asked the hon. Gentleman an

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interesting question about a ballot. Will the hon. Gentleman answer? What communications has he received from his constituents either for or against the privatisation measure? Indeed, has he received any correspondence, because I have not?
Mr. Leadbitter: I have been involved with the port for many years—indeed, I was the chief policy witness for the Bill in the House of Commons in 1966. The hon. Gentleman was probably going to school then. I went to school in Hartlepool, and sometimes I played truant. There is a strong affiliation between the public and the port. In fact, the port and the public are synonymous. They belong to each other.
Mr. Holt: The hon. Gentleman has twice had the opportunity to answer a simple question. How many letters has he received from people in Teesside opposing the privatisation of the port? I am the promoter of the Bill, but I have yet to receive one letter from any trade union official, any trade unionist or anyone other than the two local authorities that are opposed to the Bill. I have not heard from one member of the public.
Mr. Leadbitter: The hon. Gentleman lives in Langbaurgh, which is about nine or 10 miles from Hartlepool, with a river in between. The hon. Gentleman is living in foreign parts. We are not used to writing to Conservative Members.
Mr. Hardy: A number of hon. Members have referred to the long experience of my hon. Friend and to his deep knowledge of his constituency. Many private Bills have been presented while the Conservative party has been in office, many of which have been harmful to the environment. That is one reason why I am attending this debate. I should be obliged if my hon. Friend could give me some information or offer an opinion on whether there will be any threat to the environment in his constituency if the proposed changes are made and the constraints removed.
Mr. Leadbitter: On 15 March, I referred to the Secretary of State's appointment to the board of an environmental officer. We set a good deal of store by environmental matters in the Teesside area—we are currently involved in a number of issues connected with the environment. It must be borne in mind that we are living in possibly the largest industrial-growth area in Europe—an area that houses petrochemicals, nuclear power, chemical and metallurgical industries and shipping.
According to the Committee, the port authority has made it clear that some 30 per cent. of people employed in the Cleveland area depend on the port for work. Obviously the parameters can move a little, but the port is nevertheless a very important element, which is why we are concerned about its success.
I have here some figures relating to the share of foreign and domestic traffic handled by major ports in the United Kingdom. Associated British Ports is listed, and so are other major company ports, major trust ports and major municipal ports. Not one of the 17 Associated British Ports has obtained a higher percentage of the foreign and domestic trade than Tees and Hartlepool; not one of the nine major company ports obtained the same percentage.
We have already dealt with more than half the ports in the United Kingdom. Of the 10 major trust ports, only one obtained a marginally higher percentage than Tees and
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Hartlepool, and only one of the major municipal ports obtained a slightly higher share. The Tees and Hartlepool port authority is a success—as it is now constituted, that is.
Mr. Harry Barnes: My hon. Friend has demonstrated very effectively that the port is viable, that it is performing fantastically well and that there is therefore no case for change. If that change comes, however, what will be the impact on Hartlepool? It seems that about three quarters of the port's activity—including employment and output—takes place on the Tees. Surely Hartlepool will find itself very much at a disadvantage in the event of privatisation: if investment is made in other areas, it will be the most vulnerable section covered by the authority.
Mr. Leadbitter: That is, indeed, a problem and one that I referred to on 15 March.
An expert witness who appeared before the Committee, an authority on port activity and port-related trade at home and abroad and a qualified consultant—I cannot hold that against him, of course—tried to summarise the implications of the Bill. His assessment made it abundantly clear that there was a poor case for privatisation. He pointed out that, although the port is very successful—the chief executive concedes this—it depends on a narrow base consisting of three or four large companies.
This is a captive trade. It is not a question of competition; the companies have no means of receiving or disposing of their materials and finished goods other than the port. The port is essential to them, and they are essential to it. The whole complex of industrial activity—80 per cent. of which is related to the port—is an important element of the economic welfare of the region; that is why I was so disturbed to hear what that expert witness had to say.
Mr. Ronnie Campbell: As a member of the Committee, I received about half a dozen letters from members of the public in Cleveland concerning the environmental aspects of Shields sands and the birdlife and other wildlife that exist there. Among them was one from a 10-year-old girl begging me to stop the Bill being passed because she knew that the development would mean Shields sands being lost to nature.
Mr. Bell: Before my hon. Friend concludes what has been a sterling speech, I recall that when he served on the 1966 Committee he was given the promise, which was incorporated into the Bill, that the port of Hartlepool would continue in perpetuity. That undertaking was also given in the Committee on the Bill now before us, and may be reflected in the final legislation. However, my hon. Friends the Members for Bolsover (Mr. Skinner) and for Bradford, South (Mr. Cryer) know what happened in the past, when the Government promised a golden share to keep companies in the public domain for ever.
We can see a whole scenario developing whereby the new company will end up in private hands in the City. When that stage is reached, how will the port for which my hon. Friend fought so hard in 1988 be kept in public hands in perpetuity?
Mr. Leadbitter: The 1966 Bill was the subject of 18 months of consultation, because its promoters at least displayed courtesy and an understanding that input from various local interests would benefit them. There were, as

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always, one or two exceptions—pompous, arrogant individuals who thought they knew it all, but who outside their ivory towers were as incompetent as one could find. Some of them came from the list of the good and the great, and felt that they were not accountable to anyone. In Committee, they even had the cheek to say that the port did not belong to anyone. If that was so, what business was it of theirs to be involved in those proceedings?
Some of the debates on the 1966 Bill lasted two or three hours. We were even given special rooms at the Grand hotel so that the public could have their say. That was something quite different. I remember one or two of them sniggering at us. One man said, "You'll never win." That was the way it was. I do not like mentioning names, except when the individuals concerned enter the House and are recorded in the Official Report. Then they are on a hiding to nothing.
I ended my speech on 15 March by indicating that even a guarantee from the company's executives in golden letters would be worthless because they are not in a position to give any guarantee. The sad thing is that when the Bill is passed, those executives have no guarantees about their own jobs.
In Committee, counsel made it clear from the start that the Bill was a piddling little thing in terms of high finance, and that it is all because the promoters want to invest in integrated transport. I have more years' experience of transport than all of them put together. One can never get an integrated transport system in a competitive market. The market can never decide on integrated transport. That is the first lesson that one learns. As to saying it is dear to one's heart—that is trying to take wooing a little too far.
Then the authority talks about putting in two offices, and surely it can do that, but it does not have a plan. Hon. Members might ask the Tees and Hartlepool authority if it has a corporate plan—a strategy for investment in property. If so, what kind of property and where is it? What is the risk element of the venture?
If we want to talk in terms of track record on investment, we should not go to the present Tees and Hartlepool port authority because it does not have a good record. If it has a failure, it says that it will try a rescue operation.
Let us consider all the expense and time the authority has spent trying to side-track parliamentary procedure of enabling legislation—it has been devious and has not told the truth—but in a few weeks from now there will be enabling legislation and the House will be able to scrutinise and examine the Bill in Standing Committee rather than in the way in which we examine private Bills in Committee, with four members. They can work hard and be as diligent as they like, but they are working against the law of diminishing returns—the harder they work, the less result we seem to get. The authority goes on and on misrepresenting, but the question and answer powers that the Minister gave to the House are factual and give it the lie.
Whatever happens to the Bill, if the port is privatised, undeserving people will get full support from people such as myself because we want to make the port work. We are used to doing that because our conduct is always better than the example that we have had to put up with in the past few months.
11.32 pm
The Minister for Aviation and Shipping (Mr. Patrick McLoughlin): I shall speak briefly to put the Government's case.
As I explained on 15 March, the Government support the underlying principle of the Bill, and I welcome the initiative shown by the Tees and Hartlepool port authority in the proposals in the Bill.
I was somewhat surprised by some of the comments of the hon. Member for Hartlepool (Mr. Leadbitter). Most of his speech was an outright attack on the management and leadership of the port authority. However, he told us, rightly, how successful the port is and has been in the past few years. One of the reasons for that success is the Nissan car company and the way it operates its business; it exports many cars through the port. I am sure that the hon. Gentleman will join me to pay tribute to my right hon. Friend the Member for Chingford (Mr. Tebbit) who got the company to go to that area. It has subsequently given a lot of support to the Bill and a lot of custom to the port.
Mr. Leadbitter: It cannot be true that the hon. Gentleman is giving the full credit to the right hon. Member for Chingford (Mr. Tebbit). With great respect, and without wishing to diminish the right hon. Gentleman's reputation—which is beside the point—for the very first time we worked in unity in the northern region with a positive plan to attract Nissan's investment. The northern region succeeded, not the right hon. Member for Chingford.
Mr. McLoughlin: I have obviously touched a raw nerve. I did not mean to do so. I meant merely to suggest how successful the port had been. I did not want to excite the hon. Gentleman.
The Government welcome the port authority's initiative. It will stand the port in good stead. It is no surprise that the Finance Bill contained a clause relating to this matter. As the hon. Gentleman well knows, and as the whole House knows, I made that clear in my speech on 15 March. I said at column 749 that one of the options that we were considering was the inclusion of a provision in the Finance Bill. I am pleased that we were able to do so. It was my right hon. Friend the Member for Southend, West (Mr. Channon) who first urged trust ports that wished to pursue a private venture to introduce private Bills.
The Bill is particularly important. I wish it well.
11.35 pm
Ms. Joan Ruddock: The Minister was so quick to sit down that one has to conclude that he had had enough of the mood of the House.
In a desperate search for support among the Tory faithful at a recent conference the Secretary of State for Transport announced that the Government intended to introduce a Bill to privatise trust ports. In doing so, he has made this private Bill wholly redundant. The privatisation of the trust ports should be debated on its merits, though I doubt very much whether Ministers will be able to bring such merits to the attention of the House. I assure them that Labour will vigorously oppose any such measure.
Mr. Devlin: The hon. Lady cannot predict—nor can I, or any other hon. Member—what will be in the Gracious Speech. Even if what she has said were true and such a Bill

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were to be introduced, would not it be in the interests of the people of Teesside and Hartlepool if our port were to be privatised before the others so that it had a competitive advantage in the marketplace, since it would be in the private sector before the rest? That is probably why her hon. Friends have not received a single letter of protest about the measure.
Ms. Ruddock: I cannot believe that my hon. Friends have not received any letters. Some of them have taken the trouble tonight to say that they have. I have certainly received letters on the topic. People are opposed to the privatisation of this local port. If the hon. Gentleman has such faith in this procedure, he, like everyone else, ought to be willing to wait for a proper debate by the whole House on the privatisation of all trust ports. Then at least a Government Bill would be before us that would afford the House the opportunity properly to examine the case for radically changing the status of around 60 British ports.
Mr. Devlin: Is the hon. Lady saying, therefore, that during the Bill's progress through the House she and her hon. Friends have not had an adequate opportunity to discuss the merits of the Bill? The House has given two formal readings to the Bill and it has been discussed in Committee. We have been kept up late at night upon it so that both sides of the House could put their views at great length. The hon. Member for Hartlepool (Mr. Leadbitter) has just detained us for over an hour. Is she saying that the House has not had an opportunity adequately to discuss the merits of the case? I believe that it has.
Ms. Ruddock: I am saying that the private Bill procedure is inadequate for a proper debate, for proper accountability and for proper decision-taking. I repeat that if the Government and party of the hon. Gentleman had so much faith in their arguments, the Bill would come before the House as a proper Government measure, not in this inadequate and somewhat underhand way.
Mr. Cryer: Will my hon. Friend contrast a Government Bill, which a Minister would have to explain in perhaps a 20 minute or half-hour speech and pilot through perhaps 20,30 or 40 hours of a Committee's sittings, with the paltry few, fumbling, halting sentences that we heard tonight as a paltry, feeble excuse for ministerial comment, which was less than adequate for any procedures of the House?
Ms. Ruddock: My hon. Friend admirably makes his own case, which I fully endorse.
Mr. Harry Barnes: There is an additional procedural problem with the Bill, even under the private Bill procedure. No amendments were made in Committee, despite numerous attempts to table them, and therefore there was no Report stage. It is said that an amendment will be moved in the Lords for the new port authority to be based at Cleveland. If such an amendment has been made in Committee, hon. Members could have tabled further amendments and had a fuller discussion, including answers from the Minister on each of the amendments, and we could have had a decent debate on Report. We were not allowed a Report stage because of Whipping in the Committee as well as generally inside the House.
Ms. Ruddock: I am delighted to be able to provide so many opportunities for my hon. Friends to make such important interventions.
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The trust ports, of which Tees and Hartlepool is one, were set up with Government aid to stimulate the development of industry in their regions. The Tees and Hartlepool port is the third largest port undertaking in the United Kingdom. We acknowledge its success. It has attracted new business and reinvested the money made in that enterprise. It has been an important source of employment in an area which has been hard hit by unemployment. In short, it is the kind of local undertaking, with a degree of accountability, that is anathema to the Government. They require private shareholders to get their hands on any worthwhile asset, regardless of the consequences for the local interests and for the local community.
Mr. Holt: The hon. Lady said that the existing management is responsible to somebody. To whom is it responsible? After it is privatised, every shareholder will have a say or will be able to ask questions, whereas at present they cannot. Management is not responsible to anybody.
Ms. Ruddock: As my hon. Friends have repeatedly explained, we believe that there is a degree of accountability and involvement of the local authority, the local community and its interests. Provision is made under the trust arrangements for constant reinvestment of the money made by the local enterprise of a port. As has been shown repeatedly by my hon. Friends, removal of trust status will mean that money made in the community will not be returned to it. That is where accountability will be lost. There are no guarantees that privatisation will bring local benefits, more investment or more jobs.
Dock workers have every reason to be suspicious of measures such as this. Last year, we were assured that the abolition of the dock labour scheme would not lead to the return of the notorious cattle market for casual labour, yet all the signs are that it has. In Hull, three managers who were previously employed by Associated British Ports have set up a company and two agencies to employ former employees. They are not prepared to recognise the Transport and General Workers Union, which previously represented those men. In September, all the remaining registered dock workers in Hull were made redundant, as were all but 19 in Bristol and Avonmouth.
Mr. Devlin: What about Teesside?
Ms. Ruddock: I am coming to Teesside.
Furthermore, the taxpayer picked up the bill of £130 million, compared with the Government's prediction of £25 million. That is what privatisation means. The Government are prepared to back any measure at any cost—and to use the taxpayers' money—to give private profits to private individuals.
As my hon. Friends have repeatedly said, the Bill is not an independent private measure but an integral part of the Government's proposals to privatise every part of the ports industry. As my hon. Friend the Member for Hartlepool (Mr. Leadbitter) said with such clarity, the Bill is a licence for asset strippers. It does not have the job-creating potential the promoters claim for it.
I shall not take any more of the House's time tonight. The Bill does not deserve the support of the House, and I shall be pleased to join my hon. Friends in opposing it.
11.45 pm
Mr. A. J. Beith: The Bill has already been the subject of a fair amount of discussion in the House and, as we have discussed it, there has been a tendency for new developments to emerge. I shall focus on one of them—the port levy.
From the earliest stage, there has been anxiety, even among friends of mine—the Liberal Democrat councillors on Teesside, who are not opposed in principle to the privatisation of the port—that the resultant company could be subject to takeover and that Teesside might then be controlled by a company that had an interest in suppressing its position in favour of that of a port somewhere else. Those anxieties have not gone away. They cannot be dispelled by guarantees given by the present management or potential management of the port because too much depends on what could happen far into the future. There is to be no golden share—whatever value one attaches to that—and no other procedure whereby a guarantee can be provided. That must be set in the balance against some of the advantages that can flow from the greater commercial freedom that the new ports structure can provide, but it weighs heavily with the Teesside people who are concerned that their port may be taken away from them.
I am not suggesting that the existing trust structure is ideal. I am surprised that the hon. Member for Lewisham, Deptford (Ms. Ruddock) should have implied that it was so satisfactory. At certain times, the Labour party has thought it very unsatisfactory and has proposed to nationalise all the ports and put them under direct public corporation control. That is not a route which I favour either. But the present structure leaves the port accountable to nobody in particular. I think that there would be a lot more sympathy for the privatisation route if we could be certain that there would be substantial ownership of the port within the local community—on a scale that would make it difficult for the port to be taken over by interests from a long way away.
One of the things that makes that aim more difficult to achieve is the port levy. During our proceedings on the Bill, the Government have introduced a swingeing form of taxation of the privatisation process for which there is no real logical justification. The Government have discovered that there is money in privatisation and, if there is money around, they want it for themselves. It is proposed to claw a large part of the proceeds of privatisation into the Exchequer. That proportion is sometimes described as 50 per cent., but we all know that it is a lot more than that. In answer to my question during the Committee stage on the Finance Bill, the Chief Secretary to the Treasury pointed out that when one adds in the capital gains tax charge, one reaches a tax charge of 67·5 per cent. on the proceeds of privatisation.
That is not the end of the story. If the company disposes of shares in the initial stages at less than market value, it will still have the tax levied upon it at 50 per cent., as if the disposals had been made at market value.
One of the effects of that is that if the company makes special arrangements to ensure that there is a substantial shareholding by local institutions and local individuals or by its own employees, it will be taxed as if it has made those disposals at market value.
Suppose that the new port management decides that the route to follow is that set out by the Government. Let us
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consider electricity privatisation as an example. Let us suppose that the port authority decided not to take up the ludicrously expensive advertising campaign, but simply adopted the incentives. Suppose it wanted to offer the customers, the local community and the employees advantageous terms for shares, such as bonus shares and special shares, if they are held for a certain period. In all those respects, the authority would increase its liability to tax. The tax that the Government have devised would discourage the port authority from making provision for the maximum ownership of shares by its employees, by the local community and by institutions based in Teesside.
The Government are not merely robbing Teesside of money that should go back to the local community; they are discouraging that community from owning shares in the port. The Government's attitude to employee share ownership schemes is odd. They have provided for only a 3 per cent. stock of employee share ownership, although they have raised the figure from 2 to 3 per cent. in response to criticisms made during proceedings on the Bill. However, in another context Ministers have pointed out that that is a small amount to make the subject for tax relief for employee share ownership schemes.
When speaking about employee share ownership schemes on a different Bill the Secretary of State for Trade and Industry said:
"10 per cent. strikes the right balance, representing as it does a stake large enough to ensure the employees a degree of involvement in the company's affairs, while not being so large as to make the new relief unattractive."—[Official Report, 16 May 1990; Vol. 172, c. 960.]
However, in the context of the ports, the Government are allowing for only 3 per cent. They know that 10 per cent. represents a reasonable employee involvement which could have some influence on the company's affairs, but they have made certain that the employees do not get 10 per cent. by limiting the tax relief to 3 per cent. What is the logic of that? If it is a Government objective to encourage employee share ownership at a significant level, why do they not allow the 10 per cent. level to apply to the port? The Government have found another way of discouraging the new port body from distributing its shares to employees.
I believe that the port levy is the most outrageous provision. The hon. Member for Stockton, South (Mr. Devlin) has criticised it in the past, but I could find no Conservative Members to support me during proceedings on the Finance Bill to oppose the levy, to try to reduce it to 25 per cent. or to ensure that exemptions were made to it in respect of the various categories of potential shareholders.
Mr. Devlin: This is a very interesting and intricate issue which lies at the centre of the privatisation. There is a legal question: to whom does the port currently belong? That person, body or group of people is entitled to the proceeds. If the port authority as presently constituted is a public body, the Government must be entitled to all the proceeds. That is like saying that if the company's assets are worth £1 million and they are to be offered at £1 million, the company will have a cash injection of £1 million thus doubling its asset value. By taxing at 50 per cent., the Government are trying to sell an asset for the amount that it is actually worth without putting in a massive capital injection which would mean that the shareholder was paying £1 for a £2 asset.
Mr. Beith: I think that the hon. Gentleman has been got at by the Whips. During earlier stages of the Bill he was rather more robust in his criticism of these proceedings.
The hon. Member for Stockton, South said that no one owns the port. Legally that is true, but that does not mean that the Government own it either. If the same principle had been applied to the Trustee Savings Bank, the Government would have seized the entire proceeds of the bank's disposal. However, they knew that panic would have set in if they took over the proceeds. It is ludicrous to pretend that money that is already in the port and which everyone assumes is there for the port and its development somehow belongs to the Government and can be removed by them.
That is not the argument that was advanced in proceedings on the Finance Bill. The argument was that, over the years, the Government had made a significant investment in the port of Tees and Hartlepool and that they should get some return on that investment. They will be getting a pretty grand return on the investment if they get the kind of money that they expect to get from the 50 per cent. levy. I simply cannot accept the argument that the Government are somehow entitled to 100 per cent. There is a legal judgment on which is based the conclusion that it is not the Government who own the port but the state—in this case a rather diffuse concept that again does not give any moral entitlement to the central Exchequer to claim the benefits of the privatisation of the port.
Who, after all, should have the benefit of privatisation? Surely the local community in which the port is situated should have it. The local community has to maintain and build roads around the port. The local community has to cope with the additional traffic in and out of the port areas. Over the years the local community has invested in the port, both financially and through the hard work and effort of all the people of Teesside and Hartlepool who have worked in the port. The industries and activities of the areas have made the port what it is. If there were no industries in the areas using the port, it would not have had the success that it has enjoyed so far.
The Government do not have that moral case. They are actually taking out of the port a much larger share than 50 per cent., and they are doing it in a way that will make it less likely than ever that the ownership of the port will be transferred to the people of Teesside and Hartlepool.
I want also to refer to what was said at the Conservative party conference about port privatisation and the future. There seemed to be some suggestion that we are talking about leaks of the Queen's Speech and things that are uncertain. It may be that what the Secretary of State says has an element of uncertainty about it, for reasons more related to his potential tenure of office than anything else. However, he said:
"Many of our great ports are Trust Ports. Many of them want to expand, diversify and develop. And they want to be privatised."
Quite how those bodies that nobody owns could have wants and feelings of that kind I am not sure, but, according to the Secretary of State, they want to be privatised. He went on:
"And I am delighted to announce today that within the next year they'll be free to be privatised."
I make it quite clear that this is enabling legislation and that no trust port authority will be required to take the route to privatisation. I wonder whether the Minister can offer me any guidance on that point. Several Opposition
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Members have talked about enabling legislation, but that is not what the Minister said. It can be interpreted in that way. He says that they will be free not to be privatised. If we do not pass the Bill tonight, will the Tees and Hartlepool port be able to say, "We do not think that we will go ahead. We have looked again at the figures and we have decided that the Government are raiding the till to such a massive extent that we will wait until they think again and perhaps reconsider privatisation under future legislation when we can get rid of that absurd levy" Will the port be free not to be privatised? The Minister's smile does not tell me anything at all, so I encourage him to intervene.
Mr. McLoughlin: I am sure that the hon. Gentleman realises that it would be quite inappropriate for me to speculate on what may be in the Queen's Speech, and therefore I cannot do so.
Mr. Beith: I certainly would not wish the Minister to do that, but I thought that he could offer me some commentary on what the Secretary of State said. I thought that he, as the Minister responsible for ports, would have been told what the Secretary of State meant when he said that next year they will be free to be privatised. I shall certainly want to challenge the Minister if he comes along next year and says, "Folks, you have to be privatised," because that is not what I understand to be freedom. It might be what the Government understand to be freedom, but freedom to do what one is told is not what I understand to be freedom.
There remains a certain lack of clarity about future intentions, but it is perfectly clear that, if the Bill goes ahead and the port of Tees and Hartlepool is privatised, the central Exchequer will rob Teesside and Hartlepool of a great deal of money which should be invested in the local community. That tips the balance quite decisively against giving the Bill a Third Reading.
11.59 pm
Mr. Stuart Bell: I am pleased to follow the hon. Member for Berwick-upon-Tweed (Mr. Beith), who was kind enough to mention the Committee stage of the Finance Act 1990, on which he obviously served, and referred to some of the Minister's statements to persuade the Committee to accept the new clause which provided that 50 per cent. of the assets of the Tees and Hartlepool port authority should go to the Exchequer. I understood the hon. Gentleman to say that the Committee had been told that the Government had made a substantial investment in the port and that it was therefore quite proper for the Government to take 50 per cent.
In that context, I should like to quote from what the Minister for Aviation and Shipping said on 15 March:
"Admittedly it is a long time since such grants were paid to the THPA, and the amounts were small; but the grants were paid about 20 years ago towards investment projects in the port, and some of those assets are still in use. There is a general rule that, when assets acquired or improved by a non-Exchequer body with the aid of Government grants are disposed of, an appropriate proportion of the proceeds should go to the Exchequer.—[Official Report, 15 March 1990; Vol. 169, c. 749.]
If the Government make a small investment in a port authority and then, 20 years later, ask for 50 per cent. of the assets, which, with capital gains, amounts to 67·5 per cent., we are talking about nothing short of daylight robbery. When it was first proposed that the THPA should

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be privatised, and when the THPA executive took on board the suggestion of the former Secretary of State for Trade and Industry, the right hon. Member for Southend, West (Mr. Channon), it was not told—at any stage—that the Government would take 50 per cent. of the assets or that capital gains tax would also be deducted.
It therefore came as a shock when the Minister made that statement on 15 March. It came as a bigger shock in Committee when the Treasury counsel, or a Treasury representative, announced that, in addition to the 50 per cent., there would also be the capital gains tax to take into account. As the hon. Member for Berwick-upon-Tweed has said, 67·5 per cent. of the profits will be taken immediately out of the pockets of the port authority and its people.
We have had a great discussion tonight, led by my hon. Friend the Member for Hartlepool (Mr. Leadbitter), on the proposed shareholding. We have also had a great debate about whether the shares or the trust port itself belong to the local community. A number of curious statements have been made by Mr. John Hackney and Mr. Charles Wellington about what will happen to the shares, who will be their ultimate owners, and whether there will be a stock market flotation. I asked my hon. Friend the Member for Hartlepool how we could guarantee the perpetuity of the port at Hartlepool if the shares belong to unknown people, if they were held by unseen hands, and if we cannot even guarantee the future of the site of the headquarters. Although it was agreed in Committee that the site should be in Cleveland, the hon. Member for Langbaurgh (Mr. Holt) has pointed out that Cleveland may not exist for much longer. It may well disappear and become North Yorkshire, which the hon. Gentleman said was his ardent desire. What sort of promise is being made when people talk about having the headquarters in Cleveland when Cleveland itself may not exist? What kind of promise is it to say that the port of Hartlepool will exist in perpetuity when we do not know who the shareholders are?
I refer now to the story that appeared in the business news section of The Daily Telegraph on 19 October, which stated:
"A last ditch attempt to halt the privatisation and subsequent stock market flotation of Britain's third largest port will be made in the Commons tonight."
It was ahead of itself, but it referred to the subsequent stock market flotation. How does that statement square with the statement of Mr. Charles Wellington, the secretary of the Tees and Hartlepool port authority, in the Evening Gazette on Thursday 18 October, the day before? He wrote:
"May I please correct your recent editorial Steam Ahead regarding shares in the THPA's privatisation. Our shares will be offered to the following:
All our 800 staff without distinction between management and others; all our pensioners and pension fund; the pension fund of the local authorities; the pension funds of our major users."
The next paragraph is significant. It says:
"That spreads the shares as widely as possible. If we went further we would need a general flotation. That would open us to takeover from the start."
What is one to make of that contradiction? Are we to understand that there is to be no stock market quotation because it is afraid of predators, the City boys, the takeover boys to whom my hon. Friend the Member for
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Hartlepool referred? Of course, there would be nothing to prevent—certainly we have heard of nothing so far—those workers, pensioners and local pension funds selling their shares to the highest bidder and thus the management of Tees and Hartlepool losing control. That is exactly what Opposition Members have consistently warned against ever since privatisation was mooted.
The article in The Daily Telegraph included a photograph of Mr. John Hackney, the chief executive of Tees and Hartlepool port authority, who was reported as saying:
"We want to be in the private sector."
However, according to Mr. Wellington, the authority does not want a stock market quotation because those nasty bogey men called the whiz kids could take its shares from it. Yet everyone knows that the ultimate of a private company is one that is quoted on the stock exchange. The purpose of a company being on a stock exchange is to raise money through share issues for more investment. I presume that in years to come the Tees and Hartlepool port authority would not be interested in further financing itself through so-called junk bonds.
While Mr. Wellington said that there would be no stock market flotation, Mr. John Hackney told Mr. John Petty of The Daily Telegraph:
"Stock market flotation would come three to five years after privatisation."
There we have it. That was just the time that Mr. Wellington said that workers would have to hold on to their shares for them to gain in value. Did Mr. Wellington think that that increase in value would come about through a stock market flotation? Perhaps he did not want that to appear in the local evening paper. Who should be brought up under the trades description legislation? Are the shares of the Tees and Hartlepool to be quoted on the stock exchange or not? Will they be traded on the big board or over the counter? The secretary of the Tees and Hartlepool says no but the chief executive says yes. Of course, when one starts to give interviews to the unsuspecting press, it hardly matters what one says, for the journalists will write it down and repeat it anyway.
In the same interview with Mr. Petty, Mr. Hackney said:
"We want to be in the private sector, ready to welcome other ports into it."
Can you imagine that, Madam Deputy Speaker? The local press has been bombarded with stories about the terrible Labour Members of Parliament who are letting down the area because they are preventing Tees and Hartlepool from being the first trust port to be privatised. The hon. Member for Stockton, South (Mr. Devlin) said just that in an interview with Tyne Tees Television. But all that Mr. Hackney wants to do is to open the door for privatisation, to put out the welcoming mat, to grab it warmly, I presume, by the throat. What is the nonsense about wanting to be there to welcome the other ports?
In effect, Mr. Hackney is saying that Tees and Hartlepool wants to be first through the door so that it can beat the others to it, gain an advantage and be rewarded for carrying out Government policy before the Government. It wants to be first so that it can divest itself of any intention to invest in Tees and Hartlepool and can invest elsewhere in Britain and on the continent. Mr. Petty, of The Daily Telegraph, was right when he predicted that Conservative Members were expected to stay late to ensure that the Bill was approved and sent to the other place for

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further consideration. The Opposition will certainly see that Conservative Members are kept up late on Third Reading. It will be given a Third Reading only with the help of the payroll vote. That is hardly surprising because the Minister for Aviation and Shipping said on Second Reading that he would vote for the Bill. He did support it, and so did his colleagues.
Labour has had one success in its efforts to oppose privatisation of the Tees and Hartlepool port authority because Opposition Members have forced the Government to cease corrupting the private Bill procedure. That will ensure that the Gracious Speech will contain a provision for the privatisation of all the trust ports by way of public rather than private Bills. We have had some small success in modifying Government tactics.
The hon. Member for Berwick-upon-Tweed was right to draw the Minister's attention to the question whether there would be enabling legislation to permit all our trust ports to go private if they wished or whether the legislation would be such that the ports would be obliged to go private. The heart of the matter is that the Treasury is the guiding force behind this privatisation. It has seen that there is about £50 million worth of assets in Tees and Hartlepool and knows that it can take 67·5 per cent. of that. It knows that there must be about £200 million worth of assets in the trust ports and that on privatisation those assets can be taken over by the Government. Everyone knows that the Government are trying to get their hands on every possible penny before a general election year, and £200 million would be very handy. Again, we come back to ideology and the Treasury and to the idea of taking money from local communities.
Labour Members are modest, but the Treasury knows a good thing when it sees it. It does not need to watch "Howard's Way" to see how Jan Howard can be ripped off by a local con man because the Government are capable of such rip offs. Having lifted 50 per cent. of the assets of Tees and Hartlepool, they will lift the other 27·5 per cent. As the hon. Member for Berwick-upon-Tweed knows, in this Session the Government had to modify the Finance Bill so that they could take that 50 per cent. It was done with a private Bill and an amendment to the Finance Bill, which means that the Government are obliged to take the public Bill route and present enabling legislation.
The Government were able to lift half the assets of the Tees and Hartlepool authority because of the incompetence of a management which sought to privatise the port before all the others and was not aware of the Government's intention to take half the money. As I have said, the other ports may be in a situation similar to that of the Trustee Savings bank. On Second Reading the Minister said that that bank was different from trust ports because there had been no Government investment. There was no Government hand in the till and therefore the Government were not able to take money out. Perhaps the trust ports that they propose to privatise will not have had even modest Government investment because in 1981 the Government ended investment in the trust ports. The Government are trying to get their hands on trust port money, but they may find that the money is not there. The Daily Telegraph article implied that the Treasury had changed its position, and was no longer interested in whether taxpayers' money had been invested as an excuse to take 50 per cent. of the money raised through the sale of trust ports assets.
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The interview given by Mr. Hackney shows a change of position, which the hon. Member for Berwick-upon-Tweed might notice and seize upon as significant. The article shows that, whereas in the past the Treasury has had its hand in the till because money has been invested by the taxpayer, in future the simple fact of privatisation will lead the Government to take 50 per cent. of the assets of a trust port, whether or not there has been an investment. Thus, the Government are clawing back money for the Treasury.
Mr. Leadbitter: My hon. Friend will bear in mind that no Minister for Aviation and Shipping can make a statement about a 50 per cent. stake without saying something else. When analysing any statement, an obvious question is why? The answer by the Minister was that the Government had given grants. Perhaps my hon. Friend will develop this point. A grant is a grant. I did not know that it was a qualification for taking back the proceeds of the sale of a company or trust port.
Mr. Bell: I take my hon. Friend's point. That did not happen to companies such as Courtaulds in County Durham, which took a lot of grant money from the Government to open a plant, but when it closed it, took the machinery and moved it to another plant. We are not aware that the Government asked that company for the grant money to be returned. Again, we see the long fingers of the Treasury in the till.
The Daily Telegraph article on the interview with Mr Hackney said:
"Still at balance is the Government's plan to claw in up to 85 per cent. of total flotation income by applying capital gains tax as well."
If we take Mr. Hackney's scenario of the trust port going first into the hands of the pension funds, then to flotation on the stock market, the Government will take even more money—up to 85 per cent. of the assets of the port authority. The article also tells us:
"A consortium will be set up to buy the port from a trust being formed to hold it on privatisation. It would be a mixture of staff, management, local pension funds and city institutions. Tees and Hartlepool are being advised by Rothschilds as the financial adviser."
If we read carefully the statements of Mr. Wellington and Mr. Hackney, we see that they are not mutually exclusive or self-contradictory. Mr. Wellington's statement in the Evening Gazette is true as far as it goes, but Mr. Hackney unveils for us the rest of the truth—that a stock market flotation is planned and will take place three to five years after privatisation.
There we have it. The port authority will be privatised if the Government get their way, and this is a Government measure, as we have said time and again. Its shares will then be distributed among pension funds and local employees. The hon. Member for Stockton, South asked how many jobs with the port authority had been lost on Teesside since the dock labour scheme had been abolished. I told the House in December 1989 that some 130 jobs had been lost on Teesside, and 70 in Hartlepool. We were talking then of about 200 job losses. It is curious to offer to give shares to members of the work forces when 200 of them have been made redundant and when others have replaced some of those who invested a lifetime of work in the local docks, in the dock labour scheme, on behalf of local communities.
There are no guarantees that we can ensure that the Tees and Hartlepool port authority will maintain its

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pre-eminence as a port on the Tees and in Hartlepool once it has fallen into the hands of a conglomerate. I shall mention one for the sake of providing an example, the Peninsular and Oriental Steam Navigation Company. Assuming that a company such as P and O gets its hands on the THPA, where will investment moneys go? Will the headquarters stay in Cleveland? Will the port continue to thrive, or will it go steadily downhill if investment is taken elsewhere?
I would not like to leave Mr. Petty of The Daily Telegraph without a parting glance at the advertising copyist's pen. My hon. Friend the Member for Hartlepool was robust in his language when he referred to some of the statements made by Tees and Hartlepool representatives. Mr. Petty stated:
"London is the biggest port because it handled 54 million tonnes of cargo last year. It was followed by Sullom Voe oil port in the Shetlands with 41 million tonnes compared with 38 million tonnes for Tees and Hartlepool."
That is the crushing journalese that we might expect from those who listen with care to the statements of the THPA. If oil is excluded, Tees and Hartlepool becomes the second port after London. If oil is excluded from Sullom Voe—it is an oil terminal that imports nothing but oil—I am sure that Tees and Hartlepool will take a higher place in the league. Of course, that is not the sort of argument that would appeal to journalists in the course of interviews.
I am glad to see the Minister for Aviation and Shipping in his place. He is a modest man and—
Mr. Cryer: He has much to be modest about.
Mr. Bell: Since he entered the House as a result of a by-election, he has enjoyed a swift rise to the Government Front Bench to ministerial status. We have followed with care the statements that he has made, with much modesty, on the Bill. I have referred to some of them.
We have always known that the Bill is a public and not a private measure. It is to the Minister's credit that he has persuaded the Secretary of State for Transport that there should be enabling legislation for all the ports. Ministers should not try to hide behind the cloak of secrecy that covers the Gracious Speech. Many Ministers have told us that they would not like to reveal the contents of a Gracious Speech, and that is because they would not wish to offend the Prime Minister. There was, however, the promise last year that there would be a children Bill. The Secretary of State for Social Services looked askance at the Prime Minister as the right hon. Lady sat next to him, but said, "I could not give a promise but I believe that we might look for legislation to be outlined in the Gracious Speech."
The Secretary of State for Transport made a significant announcement at the Tory party conference. There was even greater glory—Tees and Hartlepool have come a long way—when the Prime Minister said, before her 14-minute standing ovation, that the Government would privatise the trust ports. She did not say whether all of them would be privatised or only those with assets that the Government could take. The Minister for Aviation and Shipping should not be too modest in his presentation.
I shall deal briefly with some of the comments of the hon. Member for Langbaurgh on Second Reading. What has happened to THPA Distribution and Services Ltd. and
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THPA Developments Ltd.? We have not heard a squeak from the hon. Gentleman about those companies this evening. However, he said on 15 March:
"The creation of the new companies is one of the first practical steps towards creating new wealth and jobs in the north-east."—[Official Report, 15 March 1990; Vol. 169, c. 734.]
That was another bit of parliamentary newspeak—an expansive statement about new jobs and new wealth for the north-east.
What has happened since Second Reading? Have we heard any more about those companies? What are they doing? I understand that when those questions were put in Committee the answers showed that there was not even a plan of action for those companies. It was the creation of yet another media event. The message is the medium or the medium is the message. News is made, but jobs and investments are not. Statements are made about jobs and investments and, suddenly, Tees and Hartlepool become greater ports.
The hon. Gentleman was also right when he said on Second Reading that the number of people employed by the authority had steadily declined. I have no idea why the hon. Member for Stockton, South—who rapidly left the Chamber once it reached midnight—asked how many jobs had been lost.
Ms. Marjorie Mowlam: It is important to put on the record that not only have there been job losses, but since the employment of contract workers an increasing number of workers have come to my surgery with problems of compensation for accidents.
Mr. Bell: That is an important and sad statement. In a speech on a motion for the Adjournment in December 1989 I referred to the fine health and safety record of the port authority. If one of the consequences of these changes, and the fact that the dock labour scheme has been abolished, is a fall from the high standard that we have come to expect, it will be a sad day for those working at the docks and for the contractors.
The hon. Member for Langbaurgh also spoke on Second Reading of a cash injection of many millions of pounds into the local economy. He said that that would have a knock-on effect, creating a host of jobs in the construction, transport, leisure and other industries. My hon. Friend the Member for Stockton, North (Mr. Cook) cannot be here tonight because of ill health, but he put the kibosh on that bit of parliamentary-speak when he pointed out that the port authority had been investing in property, finance, aviation, air travel, timber, importing, transport, display signs, storage, security, fencing and engineering. None of that has been denied.
I wrote to the Minister asking for an inquiry into the affairs of the port authority. He had a lengthy consideration of the issues that I raised, but reached the conclusion that there were no grounds for an inquiry. What does that tell us? It is that the port authority was acting properly when it made investments in property, finance, aviation, air travel and so on. It had the power, so it did not need to come to the House to privatise the port. The powers existed and the investments were made. I went through every one of them with a fine-tooth comb on Second Reading.
Mr. Leadbitter: It is not only a case of the power being there. My hon. Friend may recall that, in my speech, I referred to the holding company: under the Bill, it will have financial control.
Here is a proposition. Investors may make a large-scale investment in the port, with a long-term payback and the prospect of a smaller financial return; or they may make a short-term investment with a quick payback and higher profitability. What would they decide? That is the difference; that is where the port will lose out under the new system.
Mr. Bell: How many companies over the past 11 years have taken the Tory route to easy investment—as they perceived it—borrowing from the banks to advance themselves by moving from hotels to property, construction or some other business, and then going down the Swanee? We have seen three examples on Teesside alone of substantial firms—involved in, for instance, construction work, and knowing what they were doing—being lured by the Tory philosophy of quick profit, investing in property and finding that they could not make ends meet. They have lost out, brought in the administrator and shed labour, leaving work that had to be finished by other firms.
We are seeing the lure of quick profit again now: wherever that profit may be—whether it is in the south of England or in Amsterdam—that is where Tees and Hartlepool proposes to invest. The idea of investing in the ports and building them up will be deemed of secondary importance.
Mr. Leadbitter: Which is more likely to be successful—a port authority whose objective is to look after a port's operations and maintenance—that is, the port of itself—or a port within a group of other interests, a group that may invest unfortunately and lose out? Will a port's chances be lessened if it is part of a group in which other interests and decisions are involved, and will they be increased if it is a port authority of itself? The answer is obvious—except, of course, to the chief executive.
Mr. Bell: As my hon. Friend has said, we must return to the question of accountability. To whom is the present trust port accountable? We know where its priority lies: its priority is the port, and that is where its investment is directed. If its accountability is redirected to its shareholders, what will happen to the port?
I had a chat with a very senior bank manager the other day. He said, "In my youth we lent money against proper security, and we got a return on it. Now we are obliged to invest to keep up with the competition: we have to show a return on that investment, and it does not much matter what the security is." If a port authority is answering to shareholders who want a quick buck—another phrase imported from the United States—its interest in the port will be diminished still further.
My hon. Friend the Member for Hartlepool, in his lucid speeches, made points that have escaped members of the THPA who think that they are involved in a new vogue, "Privatise and be damned". And that, indeed, will be the consequence of privatisation.
Opposition Members have said time and again that there are adequate powers for the THPA to invest locally, expand locally and take all the action that would keep it on the local map, and also enable it to retain all those who
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work in the port and in the subsidiary industries mentioned by my hon. Friend the Member for Redcar (Ms. Mowlam).
On Second Reading, the hon. Member for Langbaurgh said that it was a myth that reconstituting the port would prevent a local say in the way that it is run. Can the hon. Member tell the House whether the company will eventually be quoted on the stock exchange? Does he share Mr. Wellington's view that it will not be quoted, or Mr. Hackney's view that it will? If it is to be quoted on the stock exchange, will the local community have a say in how the port is run? The existing committee includes trade union representatives in the form of dock workers, as well as local council representation. In that way, the local community can oversee the running of the port.
In his Second Reading speech, the hon. Member for Langbaurgh mentioned that the trust port dated back to 1808. None of us wants to be caught in a time warp, but the hon. Gentleman described how members of the local community, including four women—so it seems that the north-east was in the forefront in women's rights even in 1808—had the interests of the port at heart.
Mr. Holt: I highlighted those four ladies not because they exercised their own rights but had duties imposed upon them, as riparian owners of part of the port authority. When the king wanted to ensure that the estuary was kept clear, he instructed those owning the land on each side to keep it free. The four ladies that I mentioned happened to be among those who owned land on the Tees at that time.
Mr. Bell: That was a simple coincidence or a matter of convenience.
Mr. Holt: It is a matter of fact.
Mr. Bell: Nevertheless, women's rights were being advanced in the north-east as long ago as 1808. I suppose it was a proper response for a Tory Member to explain that, if women had any rights in those days, they were based on their riparian interests.
On Second Reading, the hon. Member for Tynemouth (Mr. Trotter) suggested that the authority's commercial headquarters should remain within the area. However, that amendment does not appear in the Bill.
Incidentally, I am glad to see present in the Chamber at least two Labour Members of the Committee, but hard as I look, I cannot see any of the Conservative Members who sat on the Committee. I have no idea what has happened to them.
Mr. Cryer: Is it not disgraceful that the Chairman of the Committee has not turned up either, especially given that the hon. Member for Isle of Wight (Mr. Field) so often used his casting vote against amendments? By contrast, Labour Members of the Committee remain sufficiently interested to follow the Bill's progress in this Chamber.
Mr. Bell: As my hon. Friend said, the Chairman of the Committee represents constituency interests on the Isle of Wight, which are rather divorced from those of Teesside. When it was put to the hon. Member for Isle of Wight (Mr. Field) that members of the Committee should visit Teesside and Hartlepool and the port, and benefit from local input, the Chairman declined and refused to allow the Committee to make an official visit of that kind. It is

143
the regular practice of many Committees to visit the location in question on any Bill, but on this occasion that was not allowed. Members of the Committee were instead compelled to make an unofficial visit, at the risk of having to offer the House an explanation for their action—but at least the THPA was able to provide the necessary facilities to enable that visit to take place.
Mr. Harry Barnes: The Committee record shows that the initial vote on the proposal that it should visit the Tees and Hartlepool port was 2:2. Discussions led up to that vote. Hon. Members had different views about the necessity of the visit, and that was legitimate, but the casting vote should have been used by the Chair for the good of the Committee. It was obvious that my hon. Friend the Member for Blyth Valley (Mr. Campbell) and I were insistent that a visit should take place, and that it would be disruptive to the Committee if the casting vote was not used to allow such a visit. However, the Chairman refused to use his casting vote in such a way and that caused disruption to the Committee for about nine weeks.
Mr. Bell: Those people who say that the Labour Opposition have delayed the Bill in Committee and on the Floor of the House should take note of the points that my hon. Friend has just made. That delay need not have happened if there had been a common sense approach in Committee.
Mr. Deputy Speaker, you may recall that the hon. Member for Tynemouth, who had come to support the hon. Member for Langbaurgh on Second Reading, suggested that the commercial headquarters of the Tees and Hartlepool port authority should stay in the area. That amendment is not on the face of the Bill tonight. We have not had a Report stage, on which that amendment, had it been made properly, could have been debated because there is no such amendment—there is merely an undertaking that that will be incorporated in the other place.
You will be aware, Mr. Deputy Speaker, of the criticism of the Bill that it was effectively a Government measure, since they did not have time to make a public Bill of the privatisation, and had urged the promoters to take the private Bill route, thus corrupting parliamentary proceedings.
It is true that, within the framework of private Bills, there was nothing hybrid or public about the Tees and Hartlepool Port Authority Bill, but the then Minister for Aviation and Shipping said on Second Reading that the Government intended to privatise all such ports but they did not have the time. So that we may understand that we are discussing a Government Bill, I shall quote the Minister for Aviation and Shipping who stated:
"We believe that there are advantages in the main commercial trust ports being transformed into companies. So far we have not been able to make room ourselves for the legislation needed to bring about such a change. Meanwhile the Clyde and the Tees and Hartlepool port authorities have promoted their own private measures."—[Official Report, 12 February 1990; Vol. 167, c. 105.]
We have already covered this ground in points of order made on Second Reading. I do not propose to labour them tonight.
I raised the second issue earlier as I wished to draw it to the attention of the House, and you said that I could mention it in the debate, Mr. Deputy Speaker. In
144
Committee on which my hon. Friends the Members for Derbyshire, North-East and for Blyth Valley sat, the promoters accepted two proposals made by the Committee: first, an undertaking that would be incorporated in the Bill, and, secondly, a promise which would not be incorporated. The undertaking was that the headquarters of the successor company should remain on Teesside. That is not in the Bill. The promise was that there would be a share option scheme for employees. We have only the Tees and Hartlepool port authority's word on that, as it will not be incorporated in the legislation.
Because of assurances given by the promoter, the amendment on the Teesside headquarters was not referred back to the Floor of the House so that there could be an appropriate Report stage. When a Committee considers a Bill that has been referred to it by the House, and when it requires amendment, there is an obligation on the Committee to refer it back to the whole House. I prayed in aid during my earlier point of order the wording of a recent special report by the Committee that considered the King's Cross Bill. It said:
"We are quite clear that if a House of Commons committee considers that a Bill referred to it stands in need of amendment, then it is the duty of that committee to make that amendment."
That was not the case in this instance. Again there was corruption of the procedures of the House and a disregard for hon. Members whose duty it is to scrutinise legislation, whether it be Committee work, or a private Bill, or a public Bill.
It is also our duty to scrutinise Select Committee work. Our duty is to hold Ministers of the Crown, and even Committee chairpersons, accountable. We were not given that opportunity because the procedure used was clearly designed to avoid having a Report stage. The House ought to draw attention to that time and again.
I said earlier that our democracy is diminished by a thousand small cuts, not by a frontal attack either by the Government or by Ministers. It is diminished by a variety of small cuts of the kind that are evident here. One thing is said in the Finance Bill Committee about how much money has come to the authority; another thing is then said by the Minister—that very little money has come to it.
The Tees and Hartlepool assets stood at £52·508 million—a hefty sum of money for any trust port. The Opposition say that it should stay within the community. Therefore, this Third Reading ought not to take place and the Bill ought not to be passed. We ought not to have to go through this laboured exercise of privatising the port.
My hon. Friend the Member for Lewisham, Deptford (Ms. Ruddock) mentioned the number of jobs that were lost following the demise of the national dock labour scheme. About 3,800 jobs have been lost in the docks industry since privatisation. The structure within which workers had security has been replaced by the market free-for-all.
In his short speech the hon. Member for Langbaurgh said that there had been lengthy scrutiny of the legislation. There was proper scrutiny in Committee. Again, I commend my hon. Friends who served on it. I commend also the local authorities that opposed the Bill from the beginning. Spurious points were made by the hon. Members for Langbaurgh and for Stockton, South about how many letters had been received. They did not take into account, however, the objections of Langbaurgh borough council, Hartlepool borough council, Stockton borough

145
council, Cleveland county council and the Transport and General Workers Union. All those councils were duly elected to represent their constituents and to act in their best interests. The Transport and General Workers Union has a vested interest on behalf of its workers who worked, and who still work, in the docks.
From the very beginning there has been a great deal of opposition to the Bill. I personally regret that Middlesbrough borough council did not add its voice, in the sense of petitioning against the Bill in Committee. It passed a motion objecting to it, but that was not sufficient. It ought to have followed up its objections with a properly-lodged petition.
The hon. Member for Langbaurgh said that the head office would always be located in Cleveland, even if it becomes North Yorkshire and even if there is a change of Government. The Opposition believe in regional assemblies. We believe in a regional assembly for the north. Cleveland county council may become part of that assembly and Cleveland may become Yorkshire and Durham again. Where would that leave the port authority's location on Teesside?
The hon. Member for Langbaurgh referred to considerable interest in the fact that 10 days ago a roll-on/roll-off service had been inaugurated with Hamburg. He did not say that it could have been inaugurated at any time in the history of the trust ports without a private Bill and without privatisation. The eastern European market to which he referred could have been developed without any of the procedures that we are discussing.
The hon. Member for Langbaurgh mentioned the clear undertakings that had been given, but I challenge the possibility of them being kept in the many years that lie ahead. Following an intervention by my hon. Friend the Member for Bolsover (Mr. Skinner), I referred to the clear undertakings given from the Dispatch Box for other companies such as Jaguar and BP and for the golden share. Guarantees of Government control have been given for a host of companies whenever a statement has been made, but when an offer has been made by British Aerospace or anyone else those undertakings have been eroded and discarded.
Mr. Holt: It is not so long ago that the House received a deputation of Indians from Canada, who brought with them the parchment that had been signed by a British colonel on behalf of the King when he granted lands in perpetuity to Canadian Indians in the 1700s. That was signed in good faith, but time moves on. The undertakings that were given by the port authority and I were given in good faith. No one can speak of what will happen in 200 or 300 years' time.
Mr. Bell: I have seen Mr. John Hackney, the chief executive, in many lights but not as a British colonel in the Army serving in Canada 200 years ago. We must look after our constituents, but even we do not look 200 or 300 years ahead. We look three or five years ahead, by which time Mr. Hackney tells us the company will be privatised. If the company is to be floated on the stock exchange within three to five years, we have a right to ask how valid the undertakings are. How cart we be sure that the headquarters will be based in Cleveland, and how can we be sure that investment will be made?
146
The hon. Member for Langbaurgh used his opportunity of speaking on Third Reading to criticise the attitude of Cleveland Labour Members to the Teesside steel industry. He said that only he and the hon. Member for Stockton, South asked questions about the Teesside steel industry. I sat on the Bill to privatise the steel industry. My hon. Friend the Member for Redcar and I are aware of British Steel's investment in Teesside. We do not have to make spurious points when investment is forthcoming or say, "We are the ones who asked questions on the Floor of the House." We can get our assurances, make our points and get investment privately. We do not have to make media events from what will happen.
We knew, and we work to keep it this way, that the Teesside plant would be successful. From whom was it under attack? It was from the Tory Government of 1979 onwards. My memory goes back to when two blast furnaces were ordered for Redcar because demand was going to be so great. We built the Kielder dam to supply water from Northumberland right through to Teesside for those two plants. It was a Tory Government who decided that—
Mr. Holt: It was Lord Rippon.
Mr. Bell: It was decided by Geoffrey Rippon because it was feared that there would be a drought in 1976 or 1977. I shall not digress too far, Mr. Deputy Speaker. It was certainly a Tory Government—the Government elected in 1979—who scuppered the second blast furnace and the second steel mill. That meant that we had to concentrate on one steel mill. We know who to hold responsible for that episode.
Ms. Mowlam: My hon. Friend is making an important point. Opposition Members are interested in the long-term industrial development of Teesside—strategic development with secondary and tertiary industries feeding off our main industries. We are not interested in what Conservative Members constantly indulge in—cheap points intended to get media coverage. The work put in by county and district councils and by other bodies in the area has been towards long-term investment, and that is what we want, having lost 43,000 jobs in the past 10 years not only in the docks generally but at British Shipbuilders, at Smith's Dock and in the dismantling of ICI and British Steel.
I should also like briefly to reinforce the point about individual shareholders—
Mr. Deputy Speaker (Mr. Harold Walker): Order. The hon. Lady is both too long and too wide.
Mr. Bell: I am grateful for your protection, Mr. Deputy Speaker. My hon. Friend is perfectly right, and has encompassed, in a short period and very succinctly, the points that I have laboured to make. Those of us who have the interests of Teesside at heart, especially in relation to the steel mill, are not obliged to come to the House and make statements about how much we have done. We know that long-term investment is the result of many consultations over many months and years.
My hon. Friend the Member for Hartlepool was perfectly right to say that the Government have not been neutral. We suspect that they are not even being neutral tonight and that the payroll vote may be called in to secure Third Reading. Judging by the effervescence that is in evidence in the Chamber, those who constitute the payroll

147
vote are coming back after a sojourn in more clement and favourable surroundings than one is likely to find in the House. As I said earlier, the Minister said that he would be voting for the Bill.
My hon. Friend the Member for Hartlepool referred to the private Bill procedure and to the amount of money that had been spent on the Midland Metro Bill, which we discussed earlier. We have not been told just how much money the THPA has spent on this exercise. I estimate that another £1 million-worth of the trust ports' money has been spent in connection with the Bill—whether on hiring new press officers to put out lovely press statements in The Daily Telegraph telling us about the stock market flotation or on hiring bankers such as Rothschild, who no doubt have a strong interest in the ports of Tees and Hartlepool, or simply in terms of the amount of time that has been spent. I am sure that all that will add up to £1 million.
The Government are to take 67·5 per cent. Add to that a further £1 million and bear in mind the fact that the THPA already has the power to do what it will with its assets and one wonders why we have got ourselves into this intellectual and ideological bind—
Mr. Holt rose in his place and claimed to move, That the Question be now put.
Question put, That the Question be now put:—
The House divided: Ayes 127, Noes 28.

Division No. 328]

[12.59 am

AYES

Amess, David

Forsyth, Michael (Stirling)

Arbuthnot, James

Forth, Eric

Arnold, Jacques (Gravesham)

Freeman, Roger

Arnold, Sir Thomas

Gale, Roger

Atkins, Robert

Glyn, Dr Sir Alan

Baker, Rt Hon K. (Mole Valley)

Goodlad, Alastair

Baker, Nicholas (Dorset N)

Grist, Ian

Baldry, Tony

Hamilton, Hon Archie (Epsom)

Beaumont-Dark, Anthony

Hamilton, Neil (Tatton)

Bennett, Nicholas (Pembroke)

Harris, David

Bevan, David Gilroy

Hind, Kenneth

Boswell, Tim

Hogg, Hon Douglas (Gr'th'm)

Bottomley, Mrs Virginia

Holt, Richard

Bowis, John

Howard, Rt Hon Michael

Brazier, Julian

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

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

Howarth, G. (Cannock & B'wd)

Browne, John (Winchester)

Howe, Rt Hon Sir Geoffrey

Burns, Simon

Jack, Michael

Burt, Alistair

Jackson, Robert

Butcher, John

Janman, Tim

Butler, Chris

Jones, Gwilym (Cardiff N)

Butterfill, John

Key, Robert

Carrington, Matthew

King, Roger (B'ham N'thfield)

Chalker, Rt Hon Mrs Lynda

King, Rt Hon Tom (Bridgwater)

Chapman, Sydney

Kirkhope, Timothy

Chope, Christopher

Knight, Greg (Derby North)

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

Lang, Ian

Conway, Derek

Lawrence, Ivan

Coombs, Anthony (Wyre F'rest)

Leigh, Edward (Gainsbor'gh)

Coombs, Simon (Swindon)

Lennox-Boyd, Hon Mark

Cope, Rt Hon John

Lightbown, David

Couchman, James

Lloyd, Peter (Fareham)

Curry, David

Lyell, Rt Hon Sir Nicholas

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

MacGregor, Rt Hon John

Davis, David (Boothferry)

MacKay, Andrew (E Berkshire)

Day, Stephen

Maclean, David

Devlin, Tim

McLoughlin, Patrick

Dorrell, Stephen

Malins, Humfrey

Douglas-Hamilton, Lord James

Mans, Keith

Eggar, Tim

Marshall, John (Hendon S)

Fallon, Michael

Mawhinney, Dr Brian

Fishburn, John Dudley

Mellor, David

148

Mitchell, Andrew (Gedling)

Smith, Tim (Beaconsfield)

Morrison, Sir Charles

Spicer, Sir Jim (Dorset W)

Moynihan, Hon Colin

Stern, Michael

Needham, Richard

Stevens, Lewis

Newton, Rt Hon Tony

Stewart, Andy (Sherwood)

Nicholson, David (Taunton)

Summerson, Hugo

Page, Richard

Taylor, Ian (Esher)

Paice, James

Taylor, John M (Solihull)

Parkinson, Rt Hon Cecil

Tebbit, Rt Hon Norman

Patnick, Irvine

Thompson, D. (Calder Valley)

Patten, Rt Hon Chris (Bath)

Thurnham, Peter

Patten, Rt Hon John

Trippier, David

Portillo, Michael

Twinn, Dr Ian

Redwood, John

Waddington, Rt Hon David

Renton, Rt Hon Tim

Waller, Gary

Rifkind, Rt Hon Malcolm

Wheeler, Sir John

Roberts, Sir Wyn (Conwy)

Wood, Timothy

Rumbold, Mrs Angela

Yeo, Tim

Ryder, Richard

Young, Sir George (Acton)

Sackville, Hon Tom

Sainsbury, Hon Tim

Tellers for the Ayes:

Sayeed, Jonathan

Miss Ann Widdecombe and

Shaw, David (Dover)

Mr. William Hague.

Shaw, Sir Michael (Scarb')

NOES

Armstrong, Hilary

McKay, Allen (Barnsley West)

Beith, A. J.

McWilliam, John

Bell, Stuart

Mahon, Mrs Alice

Campbell, Ron (Blyth Valley)

Marek, Dr John

Cryer, Bob

Michael, Alun

Cummings, John

Mowlam, Marjorie

Dalyell, Tam

Pike, Peter L.

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

Prescott, John

Dixon, Don

Ruddock, Joan

Flynn, Paul

Skinner, Dennis

Foster, Derek

Turner, Dennis

Golding, Mrs Llin

Wise, Mrs Audrey

Leadbitter, Ted

Lofthouse, Geoffrey

Tellers for the Noes:

McAllion, John

Mr. Kevin Barron, and

McCartney, Ian

Mr. Harry Barnes.

Question accordingly agreed to.
Question put, That the Bill be now read the Third time:—
The house dividied: Ayes 127, Noes 27.

Division No. 329]

[1.11 am

AYES

Amess, David

Cope, Rt Hon John

Arbuthnot, James

Couchman, James

Arnold, Jacques (Gravesham)

Curry, David

Arnold, Sir Thomas

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

Atkins, Robert

Davis, David (Boothferry)

Baker, Rt Hon K. (Mole Valley)

Day, Stephen

Baker, Nicholas (Dorset N)

Devlin, Tim

Baldry, Tony

Dorrell, Stephen

Beaumont-Dark, Anthony

Douglas-Hamilton, Lord James

Bennett, Nicholas (Pembroke)

Eggar, Tim

Bevan, David Gilroy

Fallon, Michael

Boswell, Tim

Fishburn, John Dudley

Bottomley, Mrs Virginia

Forsyth, Michael (Stirling)

Bowis, John

Forth, Eric

Brazier, Julian

Freeman, Roger

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

Gale, Roger

Browne, John (Winchester)

Glyn, Dr Sir Alan

Burns, Simon

Goodlad, Alastair

Burt, Alistair

Grist, Ian

Butcher, John

Hamilton, Hon Archie (Epsom)

Butler, Chris

Hamilton, Neil (Tatton)

Butterfill, John

Harris, David

Carrington, Matthew

Hind, Kenneth

Chalker, Rt Hon Mrs Lynda

Hogg, Hon Douglas (Gr'th'm)

Chapman, Sydney

Holt, Richard

Chope, Christopher

Howard, Rt Hon Michael

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

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

Conway, Derek

Howarth, G. (Cannock & B'wd)

Coombs, Anthony (Wyre F'rest)

Howe, Rt Hon Sir Geoffrey

Coombs, Simon (Swindon)

Jack, Michael

149

Jackson, Robert

Portillo, Michael

Janman, Tim

Redwood, John

Jones, Gwilym (Cardiff N)

Renton, Rt Hon Tim

Key, Robert

Rifkind, Rt Hon Malcolm

King, Roger (B'ham N'thfield)

Roberts, Sir Wyn (Conwy)

King, Rt Hon Tom (Bridgwater)

Rumbold, Mrs Angela

Kirkhope, Timothy

Ryder, Richard

Knight, Greg (Derby North)

Sackville, Hon Tom

Lang, Ian

Sainsbury, Hon Tim

Lawrence, Ivan

Sayeed, Jonathan

Leigh, Edward (Gainsbor'gh)

Shaw, David (Dover)

Lennox-Boyd, Hon Mark

Shaw, Sir Michael (Scarb')

Lightbown, David

Smith, Tim (Beaconsfield)

Lloyd, Peter (Fareham)

Spicer, Sir Jim (Dorset W)

Lyell, Rt Hon Sir Nicholas

Stern, Michael

MacGregor, Rt Hon John

Stevens, Lewis

MacKay, Andrew (E Berkshire)

Stewart, Andy (Sherwood)

Maclean, David

Summerson, Hugo

McLoughlin, Patrick

Taylor, Ian (Esher)

Malins, Humfrey

Taylor, John M (Solihull)

Mans, Keith

Tebbit, Rt Hon Norman

Marshall, John (Hendon S)

Thompson, D. (Calder Valley)

Mawhinney, Dr Brian

Thurnham, Peter

Mellor, David

Trippier, David

Mitchell, Andrew (Gedling)

Twinn, Dr Ian

Morrison, Sir Charles

Waddington, Rt Hon David

Moynihan, Hon Colin

Waller, Gary

Needham, Richard

Wheeler, Sir John

Newton, Rt Hon Tony

Wood, Timothy

Nicholson, David (Taunton)

Yeo, Tim

Page, Richard

Young, Sir George (Acton)

Paice, James

Parkinson, Rt Hon Cecil

Tellers for the Ayes:

Patnick, Irvine

Miss Ann Widdecombe and

Patten, Rt Hon Chris (Bath)

Mr. William Hague.

Patten, Rt Hon John

NOES

Armstrong, Hilary

McAllion, John

Barnes, Harry (Derbyshire NE)

McKay, Allen (Barnsley West)

Barron, Kevin

McWilliam, John

Beith, A. J.

Mahon, Mrs Alice

Bell, Stuart

Marek, Dr John

Campbell, Ron (Blyth Valley)

Michael, Alun

Cryer, Bob

Prescott, John

Cummings, John

Ruddock, Joan

Dalyell, Tam

Skinner, Dennis

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

Turner, Dennis

Dixon, Don

Wise, Mrs Audrey

Flynn, Paul

Foster, Derek

Tellers for the Noes:

Golding, Mrs Llin

Ms. Marjorie Mowlam and

Leadbitter, Ted

Mr. Peter L. Pike.

Lofthouse, Geoffrey

Question agreed to.
Bill read the Third time, and passed.
Mr. Deputy Speaker: Towards the end of the last debate I had occasion to reproach the hon. Member for Redcar (Ms. Mowlam). In case the House is beginning to doubt the quality of my eyesight, I assure the hon. Lady and the House that my remarks were aimed only at her intervention.

European Company Statute
Postponed proceedings resumed.
Question again proposed.
1.21 am
Mr. John Browne: I thank you, Mr. Deputy Speaker, for calling me again after an interregnum of some six hours. Six hours ago I was discussing the exchange rate mechanism and European monetary union. My main point was that we cannot have fair and workable European monetary union or a single European currency until we at least have a single European market, let alone a single European economy.
European monetary union and a single currency can come only after we achieve a single European market and a single European economy. Premature entry to the exchange rate mechanism will result in a stronger currency and, therefore, higher interest rates than we would otherwise have. That in itself would lead to a larger current account deficit than would otherwise be the case, speculation and sudden rather than gradual devaluations.
Premature entry to European monetary union would lead to the much quicker development of a federal state of Europe with little time for the introduction of democratic controls. That would have two main effects. First, it would result in the exposure of the United Kingdom economy to the full gale force of German economic competition before we are truly ready to face it. That would result in vicious and unnecessary damage to British businesses and companies, leading to loss of jobs and damage to the long-term control and wealth-creation ability that we would enjoy if our economy were healthy and more ready to take on more direct competition.
Secondly, it will lead to an increase in impositions such as those in the documents that we are debating—impositions which will have deep social and economic effects. They include the imposition of non-executive directors, of worker participation and of tax reforms. I mentioned them earlier before we broke at seven o'clock, so I will not go over them again. All these impositions are important, and will have a tremendous effect upon our nation. They will be introduced by measures such as that now before us, which are slid through without adequate time for discussion.
I agree with the general aims of these proposals, but they do not allow for evolution, which is what we must achieve. Therefore, I urge the House not to agree to the instrument.
1.25 am
Mr. Bob Cryer: The instrument covers a number of important points. The memorandum submitted by the Department of Trade and Industry, signed by the Under-Secretary, says that the European company statute will deal with formation, registration, capital, shares, debentures and the attached rights, boards, general meetings and their rights, accounts and audits, winding up, liquidation, insolvency and suspension of payments. The last four categories are listed under paragraph (f).
With EEC-wide companies, those categories will create enormous problems. We have enough problems with United Kingdom-registered companies without extending the same ease of formation to companies in the 12 member states. I can illustrate that with the example of roofing

151
firms that carry out work, provide a guarantee and then go into liquidation and are wound up. Because of a separate legal identity of a company, the debts go not with the directors but with the company. Often, people who have paid to have their roofs given a specialist treatment are way down on the list of creditors. The document makes no reference to the order of priority of creditors, which is most important.
In our legislation, outstanding wages and salaries and national insurance payments are first on the list of priorities for payment when the assets of the company are realised, but the customers are way down it. Therefore, in this example, people whose roofs have been affected by shoddy workmanship by a cowboy operator are unlikely to get anything at all if the company goes bankrupt. In our constituency work, we have all come across cases of people with a legitimate complaint about a company that they cannot pin down. They write to the liquidator, usually a firm of accountants, and it says that if there is anything left after the assets have been realised and the proceeds distributed, the complainant will hear from the liquidator. In practice, the complainant hears nothing at all. Very often, the company then appears in a different guise—Roof Repairers 1991 Ltd. instead of Roof Repairers 1983 Ltd.
There are some restrictions in company legislation, but, in my view, and I suspect that of many of my hon. Friends, they are not sufficiently well controlled to ensure that there cannot be any exploitation of company legislation. This convenient notion that companies are a separate legal entity, different from the legal identity of the directors, is no help. With the proposed European company statute, that would be repeated EEC-wide over 12 nation states. Shoddy Roof Repairers (Strasbourg) Ltd. would be able to operate in Bradford, Leeds and Halifax, and the problems of chasing it up would be compounded by the fact that it was based in Strasbourg and not in the United Kingdom. That is an important consideration. Although after paragraph (f)—
"winding up, liquidation, insolvency and suspension of payments"—
there is (g)—
"relief for tax losses of overseas branches"—
and (h),
"sanctions for infringements",
there is no certainty. The fact that there will be a long journey to the EEC member state where the company is registered will be an impossible difficulty for most ordinary people. For example, there would be the air fare to Strasbourg, a city which is on the border between France and Germany. It would not be necessary to travel to the edge of the EEC in my example, but it would cost about £300 to go to the company's headquarters to obtain redress. There would be real problems for ordinary people.
I accept that the problems would not be so great for other companies that were creditors and had assets and income that could be used to pursue recalcitrant companies, but we are dealing with companies that would provide all sorts of goods and services in the manufacturing and service sectors while operating throughout the Common Market.
There are dangers that are not made clear in the documentation. I hope that the Minister will elaborate on them, and I note that he has expressed reservations about
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the proposal. He has stated in his memorandum that the Government do not see a need for the ECS and believe that a shortcoming is the heavy reliance on national law. It is a confusing position when certain aspects of a company would be based on Common Market legislation while other parts of its operation were based on national member state legislation. That means that there will be a duality of legislation. As company legislation is fraught with difficulties in any event, there would be even greater difficulty for the ordinary person. He would have to consult lawyers with international experience such as my hon. Friend the Member for Middlesbrough (Mr. Bell), who is an international lawyer of great expertise and reputation. He would be of the sort to be consulted. Perhaps a United Kingdom solicitor would be consulted as well. It would be a complicated position which would be unnecessary in my view. I am gratified that the Government share my view.
Ms. Marjorie Mowlam: Hon. Members on both sides of the House have expressed their worries about these matters. Some of them stem from what my hon. Friends and I consider to be Government inefficiency in negotiations. I am sure that my hon. Friend will be interested to know that some of us believe that that is a front to disguise the Government's real position, which is opposition to worker participation.
Mr. Cryer: I am grateful to my hon. Friend for intervening. Worker participation is the last item on the list set out in the memorandum and with which the ECS deals. I have a different view from many others on the issue. I do not think that a seat on the board is especially effective. I think that the right to recall a director or directors by the workers to give them an account of what is happening should be built into any worker participation scheme. The French have the safeguard, for example, of the right of trade union representation in companies with 30 employees or more, and only if there are no trade union representatives are non-trade unionists invited on to a representative board, which is not a company board but a consultative board which a company has to consult. The next Labour Government should seriously consider providing the same right as that which exists in French law, whereby no one can be dismissed for economic reasons without the approval of the French Minister for Employment.
That law was not introduced by a terribly left-wing Government. Indeed, there have not been any terribly left-wing Governments in France. The last left-wing Government had Mr. Delors as finance Minister. He made such a mess of matters by remaining in the exchange rate mechanism, and its predecessor the snake, that rigorous economy measures had to be introduced. He was pushed out of the French Government into the Commission at £100,000 a year, where he has managed to do a great deal of damage. At least in France the elected Government of the day, whether left, right or centre, have the power over the owners of capital to say whether people can be dismissed for economic reasons. Successive French Governments have exercised that power for more than a quarter of a century and the French people do not question it. It means that employers—small, medium and large—accept that if they want to dismiss people they must have sound economic reasons, which they must present to the Government. They cannot arbitrarily dismiss people.

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That is an important safeguard for workers. Similar legislation in the United Kingdom would provide a safeguard for ordinary working men and women.
Ms. Mowlam: I thank my hon. Friend for giving way a second time. He might be interested to know that France has again led the way with a recent court ruling that favoured the creation of a European-level works council for the airbus project. France is already setting up the parallel structures that are needed for that sort of legislation in Britain.
Mr. Cryer: Airbus Industrie is a successful combination, but not a Common Market-wide combination. It has thousands of workers in several countries. British Aerospace in Manchester makes components for the airbus, as does Aerospatiale in France "It was necessary to develop some combination for a complicated and highly technical process, and that has been done. It is welcome, but it does not depend on the existence of the Common Market, and neither does the actual production of the airbus. The memorandum supplied by the Department of Trade and Industry states that the ECS would require companies
"to involve their workers in one of three models of participation … but in the event of a failure to agree the boards would have the final say "
That shows that, even under this proposal, workers will not have a great deal of power.
The memorandum also states that where negotiations fail
"a national model would apply. This would have to provide for at least the same information and consultation as would be required if a model were agreed by collective bargaining."
I suspect that the Government have reservations about the legislation because of the worker participation aspect. Indeed, the Minister says so in his memorandum. I would favour the right to greater information. The last Labour Government established the Bullock committee, which made a number of recommendations. They were bitterly opposed by the then Conservative Opposition, and, because we were a minority Government, they went no further.
I do not think, however, that we should necessarily rely on the Common Market for suggestions and recommendations—and, indeed, legislation—about worker participation: we can develop our own provisions, and after the next general election, when we have a Labour Government, we shall be able to develop a system that will be the envy not only of the other 11 member states but of the whole continent.
While I share my hon. Friend's view about the Government's attitude, I feel that this country should be prepared—under a Labour Administration—to develop the proposals for worker participation much more radically than is suggested in what is, in fact, a fairly timid document.
I have other reservations. The proposals represent a move towards a federal United States of western Europe, which is the motivating factor in the EEC Assembly in Strasbourg. What if hon. Members were required to declare European company investments and shareholdings, as they are required to declare United Kingdom shareholdings through the Register of Members' Interests? It would be necessary to comb the 11 other member states' registers to check out any complaints, and to ensure that hon. Members were following the rules. It is difficult
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enough to keep abreast of Members' interests in United Kingdom companies without having to trawl through all that extra material.
The scrutiny of Members' financial interests carried out by the Strasbourg Assembly—some call it a Parliament, but I refuse to grant such a grand title to what is really no more than a consultative body—is shoddy. In Strasbourg itself, the register of Members' interests is, in theory, available to the public; in practice, it is kept in a room to which there is no public access. In the triangular paperchase of the Common Market in Brussels where the committees meet, no such register is available at all; and there is no publication of a printed document like ours, available to members of the public for easy reference. The Assembly has a very indifferent attitude to something that we consider very serious—something that has been debated here for many years, and has been changed on occasion as a result of various developments.
The register is available in Luxembourg but no meetings are ever held there, so it would be necessary to undertake a journey of several hundred miles—counting the return journey—to consult it. Members of the public, who could not see the register in Brussels, would have to make a special journey to Luxembourg; they could not see it in Strasbourg—although in theory it is open to the public—because the public cannot reach the place where it is kept. If that is an example of European concern about the need for public representatives to declare their interests, it is not a very good one; and, if it illustrates the views of the EEC and its appointed Commissioners about public and private company formation, it does not do so very promisingly.
On the whole, I do not think that the measure has much to recommend it. Certainly every Opposition Member wants more worker involvement, and the Common Market always puts forward some proposal intended to tempt people in that regard. The social charter mentions the right to trade union membership, but it has been modified in such a way that it would not permit the workers at GCHQ in Cheltenham to have their rights restored. We still have to depend on this House for such legislation, and the next Labour Government will introduce a Bill to restore the rights so disgracefully removed from those working at GCHQ. We will not rely on the EEC for that.
In the same way, worker participation is a good idea, but it is a sprat to catch a mackerel. The directive does not confer radically important rights. It recognises the existence of workers, gives them a few crumbs, and might tempt some people to conclude that, on balance, the directive is of some benefit. I do not think that it is, not least because of the difficulties that a European statute would create, which I described at the beginning of my speech. On balance, it would create more difficulties than benefits, and worker participation can best be dealt with by national legislation that will set an example to other member states and to the rest of Europe.
It may be argued by some that the EEC could be a way of getting around a Tory Government. I have never subscribed to the view that one can in that way relieve the Labour movement of the obligation to secure a majority in this House and to achieve its aims and objectives through making proper use of this Parliament. We should not rely on outside bodies and organisations to get around the Government. When a Labour Government is elected, exactly the reverse could occur, with the Tory Opposition

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attempting to get around our legislation by turning to the Community. There are always people in such institutions willing to agree with an opposition party that a country's elected Government should not be taking certain action. Such tactics undermine a democratically elected Government.
No one despises the present Government and their policies more than I, and I want to be shot of them. However, the way to achieve improved workers' rights is not to skirt around the Government and become involved in the shambles that is the Common Market but to work for the election of a Labour Government. Every day that passes brings us nearer to a general election and to the next Labour Government who can implement their own legislation—and demonstrate that we can take the lead in company legislation, workers' rights and trade union law within not only the EEC but the whole of Europe.
1.47 am
Mr. Ian McCartney: I refer first to the need to strengthen workers' rights in companies that are wound up or go into liquidation. I can cite a practical example relating to the Amalgamated Engineering Union, which concerns the liquidation recently of Parkfields plc in the constituency of the hon. Member for Bolton, West (Mr. Sackville), but many of whose former employees live in my constituency.
The company was formerly owned by British Rail Engineering Ltd. When it was privatised, those members of the work force who remained with the new company were given absolute guarantees on the continuation of their employment rights and the transfer of engagements. They were meant to ensure that people who had been employed by British Rail for anything from 10 to 25 years would, if they worked for Parkfields, continue to enjoy the same rights and conditions as before.
Just over eight weeks ago, Parkfields plc, which has 39 subsidiaries throughout the United Kingdom and the EEC, was wound up. Cork Gully, a subsidiary of a major company in the City, was given the responsibility for trying to secure some resources from the bankrupt company for creditors. Men who had negotiated, through the trade union, several thousand pounds worth of redundancy payments only weeks before the winding up of the company found that when the cheques were presented to the bank they were not met. Employees had been given cast-iron guarantees about transferring their employment engagements from British Rail to Parkfields and giving a commitment to that company. The company asked them to give up their commitment and to accept a financial contribution for their loss of employment, but when they placed the cheques in the bank they were bounced by Cork Gully.
Some members of the Amalgamated Engineering Union lost between £18,000 and £22,000 and were informed that they were unsecured creditors. The remainder of the work force—in excess of 100—had made arrangements with British Rail about their concessionary passes. They were informed by Cork Gully that they must return them within 24 hours or find themselves in legal difficulties.
I approached British Rail about the passes. Mr. Reid, the new chairman, immediately recognised the problems
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that had arisen because Parkfields plc had failed to keep the promises it gave to the workers on privatisation. He extended their rights to use their passes until the end of this month. Cork Gully has made it clear to British Rail that it will not provide resources from the wind-up fund for the continuation of the passes.
People who worked for British Rail for more than 20 years were given commitments by the then Secretary of State for Transport at the Dispatch Box, and subsequently by the Parliamentary Under-Secretary, that, by agreeing to transfer their engagement to the new, privatised company, they could continue their employment with no loss of years spent with the company, redundancy arrangements, levels of pay and other fringe benefits. But when the company was wound up that was found to be incorrect. The workers merely found that they were unsecured creditors. Surely it cannot be correct for the Government to give to workers commitments which are found to be absolutely worthless when a company is wound up.
I hope that the Under-Secretary of State will have a word with his colleague in the Department of Transport about this sorry state of affairs. People who have given a lifetime of commitment and work to an industry find that when the company is wound up there is no chance of their receiving the benefits that they are entitled to, which were rejected out of hand, disregarded, and discarded by arrangements which give them no protection whatsoever.
I also wish to mention worker participation in relation to the AEU and the Transport and General Workers Union, of which I am a member. Those unions lost a substantial number of members in the Piper Alpha disaster. The second part of the subsequent Cullen inquiry dealt with worker participation and its effects on health, safety, terms and conditions of employment upon rigs and on the development of the rights of workers to be represented on those topics.
There are about 56 companies operating in the North sea, employing 31,000 employees in 43 oil fields and 24 gas fields. During the Cullen inquiry it became clear from the representations of the 36 multinational companies represented by the Offshore Operators Association that they recognised that specific to the sub-contracting arrangements was the fact that worker participation was not allowed, whether it was on health and safety matters, conditions of service or trade union recognition.
The purpose of the EEC legislation to protect worker participation is to take account of what happened on Piper Alpha. That disaster occurred precisely because of the conditions on the rig at the time of the explosion. Trade union participation in health and safety matters was not allowed.
This is one of the most important industries in the United Kingdom. About 36 multinational companies, based in other EEC countries, work in the United Kingdom sector of the North sea. They are not obliged to enter into commitments about worker participation. Due to the Government's intransigence, worker participation is not allowed on North sea oil rigs. That has serious consequences for workers' health and safety and working conditions.
During the next four to six weeks a comprehensive report is expected to be laid before the House. Among the Cullen inquiry findings there is expected to be the finding that because the 36 companies operating in the North sea

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have deliberately opposed constructive policies for worker participation they have therefore weakened fundamentally the safety regime in the North sea.
I have been involved in discussions this week, on behalf of my trade union, with a number of sub-contractors operating in the North sea. Some of them rely on their contracts with the 36 major oil companies operating in the North sea. Since the Piper Alpha disaster they have recognised the need for worker participation in matters such as health and safety, training and general conditions both onshore and offshore, particularly on the rigs. Their employees work a two-week cycle on the rigs. The sub-contractors are prepared to reach an agreement with the trade unions representing the work force, but some of the major North sea employers have made it clear to them that to reach such agreements with the work force would mean the end of their contracts with them. That gives the green light to North sea operators that Britain, due to the connivance of the Government, is not prepared to countenance worker participation in health and safety and other matters.
One would think that party political differences would be put on one side when considering a report such as that prepared by the Cullen inquiry into the loss of more than 100 lives in some of the most horrific conditions ever envisaged in an industrial accident. It was one of the most detailed inquiries ever held into health and safety. Despite all the evidence given to the inquiry, the basic right of workers in the North sea to participate in matters relating to their health and safety and other issues has been rejected by multinational companies who operate in the British sector of the North sea. They are not prepared to allow their workers to participate in matters that affect their health and safety.
Ms. Mowlam: To reinforce my hon. Friend's point about worker participation, "Business Brief" is one of the sources of information about the detailed discussions that have taken place in Europe on worker participation. It says that worker participation has proved to be a tough problem, because of British intransigence, between this country and German workers who wish to hold on to the advantages that they have gained. The Italians tried to take the initiative in order to break the deadlock on worker participation. However, it failed. That led some observers to conclude:
"there will be no significant progress on the draft Directive until there is a change of Government or attitude in the United Kingdom."
Mr. McCartney: I thank my hon. Friend for her helpful comments. Significantly, evidence given to the Cullen inquiry showed that among all the companies operating outside the United Kingdom there was legal recognition of workers' rights to participate in training, health and safety and recruitment. If such conditions can operate outside the United Kingdom, I cannot understand why, following Piper Alpha, the Government do not take an active interest in persuading the 36 multinational companies operating in the North sea to adopt a different attitude to worker participation.
I can understand the Government offering the excuse that they were ignorant of the position prior to Piper Alpha. I do not agree with that argument, but, from the Government's point of view, it may be a legitimate excuse for what happened. But no excuse can be given now as the Cullen inquiry is likely to report that two thirds of workers
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on North sea rigs are employed by sub-contractors. Their negotiating rights, therefore, are not recognised by the main contractor.
That inquiry is likely to report that two thirds of the work force in the oil and gas fields, but particularly the oil fields, are employed by sub-contractors and have been involved in industrial disputes this summer on the need to hold discussions about health and safety. There is nothing to prevent the main contractor from refusing to allow them back on to the rig, even if their employment rights and status have been recognised by the sub-contractor.
These matters are serious because what is at stake is not just the right of an employee to have a say in 'what happens. When a major industry such as oil, with the support of the Government, can deny Parliament the right to recognise workers' ability to defend themselves against unsafe work practices we cannot idly stand by and allow the Government to undermine the major steps that have been taken by the Community to defend those workers.
There is not enough time to go into other issues and other industries, although I should like to do so. For the second time in the past week, I shall attempt to keep on your good side, Mr. Deputy Speaker.
The Government cannot simply turn a blind eye to what is happening in Europe and the wider world. Even in the United States, the so-called cradle of capitalism, there is an awakening about the rights of workers to be involved in their industry and of companies to tap their talents and enthusiasm through an organised trade union or with them individually. The east Europeans attempted to hold back freedom, but the Government cannot hold back the need of the western world to involve workers in the development and maintenance of their industry or in research and development and new ideas.
Workers' rights are here to stay. If the Government do not go along with that—if they do not help in the process—they will be swept aside both in the next general election and by developments in Europe. We are either part of Europe or we are not part of it. We cannot pick and choose. The Government cannot decide to agree with some aspects of the European process and simply ignore others that it considers to be ideologically unsafe.
If we are in Europe and if we want to develop Europe, we must do so for the benefit of all working people. We cannot leave market forces to dictate people's living conditions, their health and safety and their terms and conditions of employment. Workers have an absolute right, in a market economy, to share the negotiating capabilities of their counterparts elsewhere in the EEC. In dangerous industries, such as the North sea oil industry, they must have an absolute right in law to a direct say in the development of health and safety practices. Without that say, workers will not only have their proposals rejected by management; they may lose their lives, as happened at Piper Alpha. Those workers have gone, but their families have to live with the situation. As we discuss legislation dealing with workers' rights, let us keep it in mind that for many in industry the ultimate sacrifice is not the loss of their job but the loss of their life.
2.6 am
Ms. Marjorie Mowlam rose——
Mr. Deputy Speaker (Mr. Harold Walker): The hon. Lady has addressed the House once. Does she have the leave of the House to speak again?
Ms. Mowlam: With the leave of the House, Mr. Deputy Speaker, I begin by referring to a comment that the hon. Member for Richmond and Barnes (Mr. Hanley) made much earlier. He said that he thought that Opposition Members had misunderstood the Government's position. We said that the main reason why the Government were not happy with the proposal was that an attempt had been made to include worker participation. The hon. Gentleman said that that was only one of a number of reasons why the Government were not happy.
Let us look at the draft instrument, to which my hon. Friend the Member for Bradford, South (Mr. Cryer) referred on a number of occasions. Under the heading "policy implications", the precise reasons for the Government's opposition to the proposals are set out. Paragraph 19 says:
"The Government do not see a need"
for the European company statute. That does not strike me as a strong reason for not being happy with the proposals. Paragraph 21 says:
"On taxation, the Government agree with the Commission".
Paragraph 22 explains:
"On other issues the Government is not opposed to the ECS in principle".
It is in paragraph 20 that we find stated clearly the Government's main reason for objecting to the proposals:
"The Government are opposed to the compulsory worker participation provisions in the ECS".
The hon. Member for Richmond and Barnes said that that was only one of many reasons why the Government were not happy with the proposal. In fact, an analysis of the policy implications shows clearly that it is, in fact, central to their objections.
For once, the Government have been reasonably consistent. Their opposition to worker participation is well known. I see the Parliamentary Under-Secretary of State for Employment in his place. I well remember reading documents on worker participation in the European Parliament in the early 1980s, when the hon. Gentleman's opposition to the concept was both direct and virulent.
The Parliamentary Under-Secretary of State for Employment (Mr. Eric Forth): I hope so.
Ms. Mowlam: The hon. Gentleman puts it on record: he says that he hopes so. Having left. the Department of Trade and Industry for the Department of Employment, he states clearly, in his usual direct and open style, that he is still deeply opposed to worker participation. We argue that it is because the Government oppose the concept that they are unhappy with the proposed European company statute. I am sure that, as the hon. Gentleman is in expansive form, he will remember the opposition in the European Community to the fifth directive, to the Vredeling consultation and to the 13th directive. On all those, the Government's opposition to worker participation has been clearly stated. I am not sure why we should assume that the Government's position in relation to the European company statute would be any different.
The Department of Trade and Industry provided United Kingdom Members of the European Parliament with a briefing on the European company statute. It contains a breakdown of the Government's arguments about the statute. Page 4 refers to three options on worker participation which the Government claim are compulsory
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and will be forced on European companies that might be based in the United Kingdom. Paragraph (c) states that the third option
"allows for some flexibility in the participation arrangements,"
That is a clear acknowledgement that flexibility is possible. However, because the Government believe that worker participation should not be adopted, the paragraph continues:
"Moreover, it cannot be assumed that this flexibility would be retained in any Statute. It should, for example, be noted that the draft Fifth Directive requires the equivalent option to make provision at least for the participation arrangements set out in option (a) and (b) above."
This point is central to the European company statute on worker participation, and it is clear from the Department's brief that it prefers not to have worker participation in any shape or form. I present that evidence to the House because it shows the opposition and it provides ammunition, argument and the details to the European Parliament with which to oppose the directive. This is not a minor or marginal aspect. Instead, the Government's unwillingness to provide greater information or consultation with workers in this country is central to their opposition to the statute.
I have other information to support my argument. The "European Industrial Relations Review No. 179" provides a good synopsis of different parts of European legislation and the different views of different countries on particular statutes. I refer to that document to establish that it is not just the Opposition who can see the Government's dislike of worker participation so clearly and strongly. The briefing shows that the rest of Europe shares our perception. The review states on page 1:
"Serious differences of opinion are emerging within the EC over worker participation…the UK Government has adopted a hostile attitude towards this kind of provision which seems to render it increasingly isolated in a European context."
That is clear evidence of the Government's isolation and hostility towards worker participation, and that is the general view held in Europe.
It is clear that the Italians have tried several initiatives to try to break the deadlock in the British intransigence towards worker participation. The Germans are also opposed to any watering down or half-hearted measures which might replace the present conditions for workers' rights contained in the company statute. It is only because of Germany sticking to its guns on this matter that we have the chance to discuss worker participation on a minimal level. We should like to see a great deal more worker participation. Thanks to other countries in Europe, at least we have the basis.
The British Government's unwillingness to be flexible and to adapt in respect of this statute, as with other directives referring to worker participation, has made it so difficult to make progress on them. Other countries in Europe have tried desperately to shift the Government to a point at which we could have agreement on a statute of this nature with worker participation in it, but that is not to be unless there is a change of Government or a change of attitude in the United Kingdom. Such change will be needed. Ironically, that is what the rest of Europe believes will be necessary if we are to get worker participation.
Our support for workers' rights and the need for information and consultation is entirely consistent with the positions that we have adopted. My hon. Friend the Member for Bradford, South (Mr. Cryer) mentioned the

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Companies Bill. The amendments to that Bill were the kind of disclosure and publication of company accounts that we feel is necessary so that workers in a company can see information and be consulted on facts. The hon. Member for Chichester (Mr. Nelson) has blinding flashes of common sense and rationality on the topic. He actually said that the second option on offer seemed to make a lot of sense. However, he was soon called back into rank and did not stick to his point. Conservative Members can clearly see that what is in the statute is not terribly radical or terribly extreme—it is a basic right to which workers should be entitled.
The Government talked a lot about wider share ownership and about increasing people's ability to participate. The European company statute refers directly to the rights of shareholders. We have heard Minister after Minister saying that wider share ownership has not worked and that, despite the Government's desires, some individuals have taken one or two shares and not traded them—much like Green Shield stamps—but have held on to them.
Mr. Cryer: I draw my hon. Friend's attention to the resolution about the European company statute. The Government's resolution states that the statute
"should contain a minimum of regulation consistent with the aim of providing adequate protection for those who may be involved with a company formed under the statute."
It does not say anything about workers or the consumers of a company's products. It is a narrow resolution.
Ms. Mowlam: I thank my hon. Friend for pointing that out. As I am sure he is aware, the narrowness of it was dealt with in last week's debate on the single market and financial services. Opposition Members complained bitterly that, whether it be this European company statute, the usage directive, the second banking or the capital adequacy directive—whatever the Government are bringing forward—they do not bring forward a consumers' directive. That has been discussed in the European Parliament and in the Commission. The Commission thinks that the earliest date that a consumers' directive will be in operation is 1991, when many other directives and draft instruments will be in place. I thank my hon. Friend for that intervention. In the narrow definition on the Order Paper today, even the rights of consumers are not taken into account in any meaningful way by the Government.
I do not wish to try your patience, Mr. Deputy Speaker, but, as the debate started six hours ago, it is essential to point out that my hon. Friend the Member for Linlithgow (Mr. Dalyell) mentioned two named individuals. I do not know exactly what he was referring to, but it is clear that hon. Members would regard with dismay and worry the programme on Cambodia. If the Minister sees his way clear to writing the letter for which my hon. Friend asked, Opposition Front-Bench Members would appreciate a copy.
My penultimate point is—[Interruption.] The Parliamentary Under-Secretary of State for Employment might find this debate ridiculous. I am sorry that he does. The debate began earlier this evening. Opposition Members were quite happy to discuss the matter at a sensible hour this evening. Conservative Members caused hon. Members to return to discuss it at 2.19 in the morning. Like him, I should like to be tucked up in bed
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—[Interruption.] Yes, I do have certain standards—but Opposition Members are not responsible for the timing of this debate.
We had a good discussion earlier in which the Minister asked directly whether the Opposition were asking for a European company law. I said that that was not the essential point and that we should have liked different negotiations which would lead to a different point. However, when I thought about this over dinner, I realised that the takeover directive is, in fact, European law on the statute book, and that it has not negated national law. The two do not have to work in opposition—they can work in parallel. National company law has not been devalued or replaced by European company law. The two systems can work in parallel and need not add to overcumbersome legislation.
My hon. Friend the Member for Bradford, South has outlined his clear desire to see the implementation of the worker participation section of the European company statute. He said that it is essential that progress is made at a national level and that the United Kingdom should take the lead in Europe. It is important to add that, again, the two need not work in opposition; they can work in parallel. We should push hard—a Labour Government would do so—for legally enforceable workers' rights, for rights to which everybody should be entitled, but that does not mean that we should not push the present Government towards making changes in Europe and within the existing legislation.
Mr. Allen McKay: I am grateful to my hon. Friend for giving way on that point because I had intended to raise it. I am sure that she will recall that lead used to be used at a workplace in my constituency, but is no longer. I know that she will also recall the fact that the fault lies entirely—or rather mainly—with the Health and Safety Executive. If trade union rights had been adhered to in that place and if there had been worker participation, three of my constituents would not have ended up in hospital with lead poisoning.
Ms. Mowlam: I thank my hon. Friend for that intervention, which fits into much of our discussions earlier this evening. If we have such difficulties on a national level although we have legislation to protect workers' rights, what about the problems that we face when trying to get retribution or a response when there is an accident in France involving a company that is based in Germany, with British workers? Without a proper legal framework to protect workers, we shall be in an untenable position.
The European company statute had been discussed in detail in the European Parliament where much more time was spent on it than we have been able to spend today. A reading of the proceedings of the debate in the European Parliament shows clearly that all other countries voted with a large majority in support of the statute. The vote was 175 to 23 in favour, with two abstentions. That shows the support for the statute in the rest of Europe.
I refer now to two or three of the points that were made in the European Parliament in support of the statute. Stress was placed on the close links between the industrial and social aspects. The structuring of the European company is regarded as an opportunity to give concrete form to the social dimension of the internal market—
Mr. Ivan Lawrence: The hon. Lady said that hours ago.
Ms. Mowlam: The hon. and learned Gentleman may remember much of what I said earlier, but I did not talk then about the social dimension of the internal market, and I did not—as I am about to do—mention the difficulties that the Government now face, driven as they are by an ideology that hypnotises them not to see the parallel between the social and industrial dimensions. It is when those two work in unison, which Labour Members and members of other parties in the European Parliament are keen to see happen, that a European company statute will have a meaningful impact for society as a whole. I inform the hon. and learned Member for Burton (Mr. Lawrence) that I did not make that point earlier.
Some other points were made in the European Parliament in support of the European company statute. Labour Members regard the statute as fine in principle but would like to see some changes. Members of the European Parliament see the social dimension as a fundamental component of the internal market, not as a mere adjunct to it. It will be indispensable. We have argued that on numerous pieces of European legislation in the House. We are worried, as with the European company statute, about the distinction between a directive and a regulation. We are fearful that the regulation may go through but that the directive on worker participation will lie on the table and will not be implemented at the same time. That anxiety was expressed clearly by many Members of the European Parliament. Labour Members believe that we are in danger of seeing that fear realised, due to the Government's intransigence in Europe over many years of discussions.
The debate in the European Parliament emphasised clearly that there were several options for worker participation in the European company statute. Many speakers expected it to be incumbent on the management and staff of any undertaking to reach agreement on the model of worker participation to be adopted. They also expected that no European company would not apply any model of worker participation. That has been the crux of our argument on this part of the European company statute. There are three options. Flexibility is built into the statue. By default there could be a reversion to the national option. A European company could negotiate an agreed option beween management and workers in a particular European company. We believe that that would give enough flexibility. The Minister said that that would have to be in the statutory framework. Yes, and a good thing too, because without such legal protection and unless the general principle is agreed, workers' rights will not be protected.
We clearly understand that the detail would have to vary from company to company, country to country and circumstance to circumstance. We readily accept that. We want to see established the principle that it is a legal right of every worker to be provided with information and to be consulted. It is clear that the Government are not only out of date and out of time with British companies, but out of step with the attitude in the rest of Europe.
The European company statute clearly shows that Labour Members are in tune with the rest of Europe. For the Minister, Europe stops at Eastbourne or perhaps the Channel islands, with their offshore implications. For the Prime Minister it is probably the Isle of Wight. We see the need for a European company statute. We happily agree
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with the Minister that it may not be used much in the early years. It may not be used without some changes to remedy the confusion that exists in parts of it. We readily acknowledge that. If the regulation is not accepted, the next Labour Government will negotiate that detail carefully. But we shall be sure that the worker participation element is included. We believe that that element is the main reason why the Government have blocked the directive.
2.28 am
The Parliamentary Under-Secretary of State for Corporate Affairs (Mr. John Redwood): The hon. Member for Bradford, South (Mr. Cryer) raised an important point about insolvency and re-formation of companies through their directors. That matter is covered in sections 1(15) to (23) of the draft. We agree with the hon. Gentleman that they are not satisfactory, particularly in relation to national law. It is an area of company law provisions which we shall look at carefully to make sure that there is a satisfactory means for winding up and at least similar precautions and protections to those in current United Kingdom insolvency law.
I agree with the general line taken by my hon. Friend the Member for Winchester (Mr. Browne). I thank my hon. Friend the Member for Richmond and Barnes (Mr. Hanley) for his many good points on company law and accountancy problems, several of which will be taken up by the Government in forthcoming negotiations. I agree with my hon. Friend the Member for Chichester (Mr. Nelson) that the Government wish to encourage on a voluntary basis the many good models of employee share participation and employee participation in general. Britain has much to be proud of, because in recent years many good models have been developed and many schemes pioneered. As my hon. Friend said, the National Freight Consortium is seen by people all over the world as an example of great success.
The hon. Member for Linlithgow (Mr. Dalyell) raised a series of issues that are the responsibility of my hon. Friend the Minister for Trade. I am sorry he is not in the Chamber but I think that the hon. Member for Linlithgow is in touch with my hon. Friend who, I am sure, will read the report of the debate and will contact the hon. Gentleman if he has helpful information.
I should like to rebut three points made by the hon. Member for Redcar (Ms. Mowlam). She said that the Government's position was not clear, but that is far from the case. I made our position quite clear in the debate and it is set out in the explanatory memorandum. I like to hear the views of the House and have noted several useful comments which we shall follow up in the negotiations.
The Government are against several elements in the current proposal. We oppose some of the company law proposals, the taxation proposal, the voting base of the measure and the particular forms of mandatory worker participation in the directive. However, it is not true to say that we are against a particular style of worker participation or against employee participation in general because, as I made clear in the debate, we are against a certain kind of mandatory worker participation.
Secondly, Labour still refuses to come clean on whether it would negotiate a comprehensive framework of European law that would deal with the problems of 12 different types of company. I do not know whether the

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Opposition cannot say or will not say, but it seems that they have no idea of their policy on the relationship between European and national company law. It is a great pity that they cannot clarify this crucial issue.
The hon. Member for Redcar tried to claim that if a Labour Government were handling these negotiations and had in front of them a more general proposal for a European company statute, they would make rapid progress. The hon. Lady says that that we are unable to do that. When Labour were in government for five years from 1974 until 1979 there was a more general proposition on the table and not an inch of progress was made. That shows that the realism of office made Labour realise that there are all sorts of company law problems in the proposals. I am glad that Labour will not have the chance to find that out again.
Question put:—
The House divided: Ayes 63, Noes 4.

Division No. 330]

[2.32 am

AYES

Amess, David

Maclean, David

Arbuthnot, James

McLoughlin, Patrick

Arnold, Jacques (Gravesham)

Malins, Humfrey

Baker, Nicholas (Dorset N)

Mans, Keith

Bennett, Nicholas (Pembroke)

Mitchell, Andrew (Gedling)

Bevan, David Gilroy

Moynihan, Hon Colin

Boswell, Tim

Page, Richard

Brazier, Julian

Paice, James

Browne, John (Winchester)

Patnick, Irvine

Burns, Simon

Portillo, Michael

Burt, Alistair

Redwood, John

Butcher, John

Renton, Rt Hon Tim

Carrington, Matthew

Ryder, Richard

Chapman, Sydney

Sackville, Hon Tom

Chope, Christopher

Shaw, David (Dover)

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

Spicer, Sir Jim (Dorset W)

Conway, Derek

Stern, Michael

Coombs, Simon (Swindon)

Stevens, Lewis

Day, Stephen

Stewart, Andy (Sherwood)

Devlin, Tim

Summerson, Hugo

Fallon, Michael

Taylor, Ian (Esher)

Forth, Eric

Taylor, John M (Solihull)

Freeman, Roger

Thompson, D. (Calder Valley)

Gale, Roger

Twinn, Dr Ian

Glyn, Dr Sir Alan

Waller, Gary

Goodlad, Alastair

Widdecombe, Ann

Hague, William

Wood, Timothy

Holt, Richard

Yeo, Tim

Howarth, G. (Cannock & B'wd)

Young, Sir George (Acton)

Jackson, Robert

Kirkhope, Timothy

Tellers for the Ayes:

Lawrence, Ivan

Mr. Greg Knight and

Lightbown, David

Mr. Neil Hamilton.

Lyell, Rt Hon Sir Nicholas

NOES

Barnes, Harry (Derbyshire NE)

McAllion, John

Tellers for the Noes:

McKay, Allen (Barnsley West)

Mr. Bob Cryer and

Skinner, Dennis

Mr. Ian McCartney.

Question accordingly agreed to.
Resolved,
That this House takes note of European Community Document No. 8404/89 on the proposal for a European Company Statute; and supports the Government's intention to seek to ensure that if there is to be a European Company Statute, it should contain a minimum of regulation consistent with the aim of providing adequate protection for those who may be involved with a company formed under the statute.

Wages Councils
Motion made, and Question proposed, That this House do now adjourn.—[Mr. Patnick.]
2.43 am
Mr. John McAllion: It is with some relief that I rise to begin the Adjournment debate at nearly 2.45 am. I am sure that that relief is shared by the Minister and your good self, Mr. Deputy Speaker.
In a written answer earlier this year the Secretary of State for Employment confirmed the Government's decision not to abolish the wages council system for the present. He announced that such was the Government's concern about the effect of the wages councils that he intended to keep their operation under close review. We know from the Secretary of State that the Department of Employment has a close working knowledge of what is happening to the wages council system, and the Under-Secretary of State is ideally placed to respond to the report published only last month and entitled "Crime without Punishment: The Story behind Wages Councils Underpayments". The Minister laughs at the notion of such a report being published, and the record will show his flippant attitude.
The report was published by the Low Pay Unit and the National Union of Civil and Public Servants and it chronicles a state of affairs which calls into question the fitness of Ministers at the Department to continue in their high office. It reveals that those who have been entrusted with administering the wages council legislation enacted by the House are turning a blind eye to a crime wave of illegal underpayment of minimum wages. It shows that they are, if nothing else, aiding and abetting those employers who commit the criminal offence of illegal underpayment. That is nothing short of a national disgrace. Those inside and outside the House are indebted to the Low Pay Unit and to the National Union of Civil and Public Servants for bringing that scandal to our attention.
Wages councils protect 2·5 million of Britain's lowest paid workers. The protection that they afford cannot be described as excessive, unreasonable or unrealistic. A few examples of current wages council rates will testify that the rates are too low rather than too high. The made-up textile sector has a basic hourly minimum of £2·22 and an overtime hourly minimum of £3·33. The equivalent figures for the hotel and restaurant sector is £2·33 and £3·50. For the hairdressing sector, it is £2·40 and £3·60. Those wage rates hardly begin to compare with the wages earned last year by Sir John Nott, which we understand from the weekend press to have been £1·5 million. The wages councils' rates show that the workers protected by them earn £90 gross for a 39-hour week, and take home considerably less.
Given that the Council of Europe's decency threshold is currently £163, it can hardly be argued that it is unreasonable to expect employers to pay wages council rates. Certainly the House does not believe it to be unreasonable. That is why legislation was enacted to set up wages councils, and why it has never been repealed. That is why illegal underpayment has been made a criminal offence. That is why Ministers have been charged with establishing a machinery—the wages inspectorate—to give effect and teeth to the wages council system.

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Until the House decides otherwise, it is the clear and bounden duty of Ministers to make that legislation work, to bring to justice those who criminally offend by illegal underpayment, properly to resource the wages inspectorate, and to make the wages councils as effective as possible. That is why the report is so disturbing. It reveals such a record of neglect and dereliction of duty by Ministers that, if honour were the criterion, it would require the resignation of those who have failed properly to discharge their duties to this House.
The report highlights a number of areas in which the Department and its Ministers have fallen down. First, they have done so in the resourcing of the wages inspectorate which, in effect, is the police officer of the wages council system. Five years ago, in 1985, the Government proposed the abolition of wages councils but were forced to back off by the hostile response from churches, voluntary organisations, trade unions and even from the majority of employers. At that time there were 120 wages council inspectors; today there are just 71—a reduction of 41 per cent. in five years. Using the Department's latest estimates, that means that there are just 71 inspectors to oversee 379,253 establishments and to provide cover for the 2,472,400 employees—a ratio of one inspector to 35,000 employees. That represents under-resourcing on a disastrous scale, with the inevitable result that far fewer establishments are visited—a quarter fewer in 1989 than in 1986—and there is far more reliance on the less effective checks provided by questionnaires and postal inquiries.
What unscrupulous employer can seriously be expected to fill up a form admitting that he is illegally underpaying his workers? There is growing evidence of widespread disrespect for the laws passed by the House, with 11,000 workers underpaid to the tune of £1·38 million in 1989 and arrears of payment owed to workers up by £74,000 on the 1988 figure. Those are, of course, wages inspectorate estimates, and they are likely to be underestimates as they take no account of the long hours worked in wages council industries or of employers who do not register with wages councils because they are not legally obliged to do so even though those very employers are the most likely to be guilty of illegal underpayment.
The Government are fond of boasting that they are creating a climate in which free enterprise can flourish, but "Crime without Punishment" shows that the climate is one in which criminal underpayment is encouraged, along with widespread disrespect for our legislation. The so-called party of law and order seems to put on kid gloves when it comes to dealing with unscrupulous employers, and the results are there for all to see: widespread illegal underpayment, widespread illegal failure to post wages council orders, widespread failure to keep records of wages paid and hours worked—in effect, widespread exploitation of some of the poorest workers in the European Community.
A Government who were genuinely anxious to uphold the rule of law would be clamping down on such law-breaking—but not this Government. They continue to cut back on the proper policing of the wages council system. They ignore their own statistics, which point to a crime wave with nearly 23,000 offences in 1989 alone. They fail to act against those who commit those criminal
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offences—there were just 10 prosecutions in England and Wales in 1989, and not one in Scotland. That is a lamentable record.
The Government's record on low pay contrasts starkly with their record on pursuing wrongdoers in other areas—for example, those who defraud the Department of Social Security. Every opportunity has been seized to increase the number of DSS fraud investigators to a present level of 820, while at the same time every excuse has been used to cut the number of wages inspectorate staff to the current pathetic level of 71. We cannot avoid the conclusion that the Government are prepared to crack down on lawbreakers who are poor, but equally prepared to condone lawbreaking on the part of employers who are better off.
Free-marketeers, of course, will dismiss all this, and will point to huge underlying economic changes in developed capitalist economies such as ours—the shift away from heavy industries such as shipbuilding, steel and coal which were heavily unionised and employed mostly well-paid male work forces towards the newer service industries employing mostly female part-time workers, often non-unionised and generally low paid. They will point to the example of the United States, where during the Reagan years there was a massive expansion of low-paid employment in the retail and catering sectors. They will try to tell us that there is no alternative to the low pay option, and that at least it represents a lesser evil than the mass unemployment of the early 1980s which was so plainly the creation of the present Government.
Seen in that context, the Government's policies are, at any rate, obvious and explicable. The weakening of trade union power has opened the way for the expansion of low-paid employment; the contracting out of public services is a means of promoting low pay through the lowest tender procedure; the rescinding of the fair wages resolution and the deratifying of International Labour Organisation conventions 94 and 26 has exposed Government contract workers to low pay. The threatening and bullying of social security claimants out of benefit and into whatever low-paid work is available is part of that same strategy. So, too, is the continued undermining of the wages councils which are the subject of this debate.
The Government have enthusiastically embraced low pay as part of the answer, and in so doing have failed to understand that low pay is really part of the problem. If wages councils are abolished, either officially or by the Government's current back-door strategy, Britain will be alone in Europe in not having any legislation to protect low-paid workers.
As it is, Britain falls lamentably short of European standards. The Council of Europe's decency threshold of £163 must seem like a mirage to the 10 million low-paid workers in this country who earn less than that. And Britain alone refused to sign the European social charter, with its rights for workers to be paid a sufficient amount to provide themselves and their families with a decent standard of living. Britain refuses also to adopt a civilised attitude to workers' rights and living standards.
Ministers fail to understand that, in promoting low pay, they are not helping Britain to catch up with the rest of Europe but are leaving us further behind. It is vitally important for the Government to heed the advice of those with special knowledge of low pay and who produced the report to which I have referred, and to commit themselves to the reforms that it outlines. The Government must also

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restore, strengthen and extend the wages councils machinery to cover emerging areas of low pay such as contract cleaning and the security industries. They should also re-ratify ILO conventions Nos. 94 and 26 and introduce legally binding minimum wage protection for all citizens, as exists elsewhere in Europe.
Those are just a few of the reforms which would help to protect workers from the exploitation to which they are currently subjected. They would help also to end the obscenity whereby, at one end of the pay scale, it is not considered excessive for one man to earn £1·5 million while at the other end of the scale £2·20 per hour is regarded as too much.
The case against low pay is overwhelming, but the Government's case for abolishing the wages councils has yet to be made with any credibility. I suspect that that will remain the case even after the Minister has replied.
2.57 am
The Parliamentary Under-Secretary of State for Employment (Mr. Eric Forth): I congratulate the hon. Member for Dundee, East (Mr. McAllion) on bringing this important matter before the House even at this late hour. I listened to his arguments carefully, but they owe more to emotion than to reason. The hon. Gentleman's arguments reflect some depressingly familiar propaganda of a kind regularly produced by organisations which seem more intent on discrediting the Government than on helping the very people whose cause they purport to fight.
The irresponsible allegations made today were prompted, as the hon. Gentleman admitted, by publications such as "Crime without Punishment"—a product of co-operation between the National Union of Civil and Public Servants and the Low Pay Unit, which are scarcely unbiased or independent sources of information, analysis or conclusions.
I will deal immediately with the alleged crime wave of underpayment. The hon. Gentleman argues that one third of all the establishments visited by the wages inspectorate were found to be paying less than the minimum remuneration required by the relevant wages councils. That figure is a complete misrepresentation of the true state of affairs. First, it relates only to the results of checks in which inspectors actually visited establishments—and such visits are targeted specifically on establishments where underpayments are more likely to be found.
Secondly, the discovery of an underpayment at an establishment visited does not mean that all the workers there are underpaid. Normally, only one or two of them are found to be underpaid as a result of such visits. The only valid yardstick of compliance is the proportion of workers in the system who are found to be underpaid in all the checks—not just those carried out by visits—which are conducted by the wages inspectorate. This figure runs consistently at around 3 per cent. to 4 per cent. No one in his right mind could describe that figure as indicating "a crime wave of underpayment", which shows the extent of distortion offered by the report cited by the hon. Gentleman today. Nor is there any foundation for the suggestion that the level of underpayment is at an unprecedented high, or that it is increasing. Last year's fractional increase in the amount of underpayment discovered is attributable to the inspectorate's increased success in targeting its work on employers more likely to be underpaying. I should point out to the hon. Gentleman
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that the inspectorate's work is now more tightly focused on discovering underpaying employers than it was in the days of the last Labour Administration.
Not only do wild allegations about the state of compliance offend those involved in running the system, but they also arguably damage the situation of those who are vulnerable to underpayment. The more that pressure groups and others mislead the public as to the state of compliance, the more likely it must be that some employers, albeit not many, will be tempted to transgress on the grounds that they will be in good company.
Not content with misrepresenting the extent to which workers are underpaid, those who wish to discredit the Government also allege that the Government are undermining enforcement in other ways and the hon. Gentleman has done that again today. They argue that changes in the numbers and grading of inspectors weaken the system, and they maintain that the inspectorate's approach to the job—the methods that it uses—encourage non-compliance. I rebut those charges entirely.
The number of inspectors is lower than in 1979, but our reasons for doing this were entirely justifiable. In 1981 we curtailed the expansion of the wages inspectorate on which the Labour Government had embarked towards the end of their term because the overriding need in Government was to reduce public spending generally to a level which would not wreck the economy. In reducing the size of the inspectorate, however, we simply brought inspection back to the level which obtained for many years prior to 1978. In 1986, we reduced the numbers for an equally good reason—it was simply not necessary to have the same number of inspectors to check compliance because checks had become easier and quicker with the simplification of the wages orders following the 1986 legislation. We also anticipated that compliance would be higher following the reforms, and our expectations in that respect have been realised.
Experience of enforcing the simpler orders has also shown us that the work of some of the higher grade inspectors can be safely regraded so that all the basic inspection work is done at executive officer level. Again, therefore, the suggestion that we are embarking on a wholesale regrading is quite inaccurate. Of the 71 posts for "on the road" inspectors, only 17 were in the higher grade. There is absolutely no intention to change the number of inspectors or the volume of work that they undertake.
The hon. Gentleman also seeks to indict the Government by implying that they encourage the inspectorate to adopt a "soft touch"—he used the term "kid gloves"—in dealing with employers. That is an entirely baseless accusation. The methods that the inspectorate uses are essentially those which have been found effective over many years, and indeed some of the devices that it uses to enable it to make the best use of its time were introduced by the last Labour Administration.
In this context, I am thinking in particular of the much misunderstood "questionnaire" procedure in which employers are asked to state the amount that they are paying their employees. This method accounts for only a minority of checks carried out and is mainly used by inspectors to help them "screen" establishments for likely underpayers. The fact is that in test checks some 95 per cent. of employers are found to be completing the questionnaires truthfully and accurately, which means that

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the inspectorate is better able to focus its attention on those respondents whose replies indicate cause for concern.
We are also attacked for not prosecuting enough of the employers who fail to meet the requirements of the legislation. The ratio of prosecutions to establishments underpaying is higher since 1979 than it was under the last Labour Government, but that really misses the point—that under all Governments the inspectorate has pursued a policy of achieving compliance primarily through advice and persuasion and not by prosecution. Some four-fifths of all the establishments found to be underpaying are being inspected for the first time, and it is rarely appropriate in those circumstances to haul them before the courts. The vast majority of employers readily put right any deficiencies in the amount that they are paying. Nor is it sensible to run people into the courts because the notice of the current minimum rates is not pinned up or the right records have not been kept, if it is perfectly clear when the inspection takes place that no worker is being underpaid. Of course, where there are doubts about the employers' willingness to comply with the law the inspectorate will keep a tight check on the situation and take legal action if necessary.
The hon. Gentleman also made some comments about the Government's attitude to wages councils in general. He quoted—I think accurately—what the Secretary of State said earlier in the year about our position as regards wages councils, which is a matter of record. I emphasise that that is based not on an ideological stance but on a practical approach to the matter. For example, the work of virtually all independent economists supports our contention that there is a price to be paid for any attempt at minimum wage fixing and that that price is in jobs and employment. It is no argument to say that other countries are unaffected or untroubled by machinery of the kind that the hon. Gentleman cited. Some, such as the Netherlands and the United States of America, do not raise the level of their minima for years, and organisations such as the OECD and the European Community itself have commented on the need for countries with minimum wages to consider the impact of those arrangements on job levels.
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It is worth pointing out, because it is relevant to the debate, that the United Kingdom's unemployment level is significantly below that of most of our major European partners and competitors. That is something which Opposition Members choose to ignore when it suits them, but we still regard it as very important.
Secondly, our emphasis on maintaining and improving employment levels reflects not a disregard for people's living standards but the absolute opposite as lack of employment opportunities, not low pay, is the major cause of low living standards. Only 4 per cent. of those full-time workers who are in the lowest decile of earnings are in the lowest 10 per cent. of incomes.
Thirdly, the facts simply do not support the accusation that the abolition of the wages councils would lead to what people sometimes call "poverty wages". Indeed, the whole notion that that phrase conjures up is false. As I have said, the link between low pay and low living standards is weak. Four fifths of wages council workers are contributing a second income to the home. They are not people living in households with low living standards.
The Labour party's proposals for the introduction of a national minimum wage fly in the face of logic and ignore the facts that I have outlined. The effect of introducing a minimum at the level currently envisaged would be to reduce employment very quickly by around 750,000. This estimate does not even allow for the full restoration of differentials, as supported by the recent statements of eminent trade union leaders such as Eric Hammond and Bill Jordan.
The right way to help those on low pay is to continue our policies of deregulating the labour market wherever this can reasonably be done, thus stimulating enterprise and initiative, creating more jobs and raising living standards all round. I believe that our success in freeing up the labour market is evident in the fact that more people are at work in Britain today than at any other time in our history.
I hope that I have answered some of the specific points made by the hon. Gentleman and refuted some of the unsupported and unsubstantiated allegations made in the report to which he referred. I am glad to have had this opportunity to put the facts on record.
Question put and agreed to.
Adjourned accordingly at seven minutes past Three o'clock.