Sitting of 20 November 1974

Preamble
The House met at half-past Two o'clock
PRAYERS
[Mr. SPEAKER in the Chair]
PRAYERS
  PRIVATE BUSINESS
    THE GREEN, ABERDEEN (BOOTS THE CHEMISTS LIMITED) ORDER CONFIRMATION BILL
    Considered; to be read the Third time tomorrow.
ORAL ANSWERS TO QUESTIONS
  SCOTLAND

    Teachers' Salaries
    Lord James Douglas-Hamiltonasked the Secretary of State for Scotland if he has received the Houghton Report on Teachers' Salaries; and if he will make a statement.
    Mr. Canavanasked the Secretary of State for Scotland what representations he has received from Scottish teachers' organisations asking for an interim salary award, pending publication of the Houghton Committee report.
    Mr. William Hamiltonasked the Secretary of State for Scotland if he will make a statement on teachers' salaries.
    Mr. Adam Hunterasked the Secretary of State for Scotland when he expects to receive the Houghton Committee Report on teachers' salaries; and if he will make a statement.
    Mr. Robin F. Cookasked the Secretary of State for Scotland when he now expects to receive the Houghton Report on Teachers' Pay.
    The Secretary of State for Scotland (Mr. William Ross): In my statement to the House on 15th November I said that Lord Houghton had on the previous day told my right hon. Friend the Secretary of State for Education and Science and myself that he now expected to present his report by Christmas. In addition his committee had undertaken to recommend at the beginning of December a flat rate lump sum, payment of which would not conflict with its conclusions and which could be included as a payment on account along with teachers' December salaries.
    The Teachers' Side had just previously lodged a revised claim for an interim flat rate increase at the rate of £520 a year backdated to 24th May and a meeting of the STSC has been arranged for tomorrow to consider this claim.
    Yesterday in Edinburgh I had meetings with the local authority representatives on the Management Side of the Salaries

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    Committee and with the three teachers' associations represented on the Teachers' Side to ensure that they fully understood the significance of the helpful undertaking given by the Houghton Committee concerning the payment on account. The central point is that if the Salaries Committee accepts the payment on account that will be recommended by the Houghton Committee early in December it should be possible for authorities to include this payment in the teachers' December salaries. With the certainty now of a December payment I urged the teacher associations to call off their strike action which is harming our children and the whole Scottish educational system. They undertook to report my views to their executives, but I am not optimistic that the associations will be willing to respond to my appeal.
    Lord James Douglas-Hamilton: I thank the right hon. Gentleman for his reply. Is he aware of the strong feeling in Edinburgh that a continuation of the present educational crisis could do irreversible harm to the careers of schoolchildren and could lead to increased militancy on the part of the schoolteachers?
    Mr. Ross: I am concerned about a dispute involving a fairly short period of time and which, in the long run, does not mean a thing, because the increases following the Houghton Report will be backdated. I am concerned that because of this temporary matter that is under dispute the teachers might do damage which could be permanent for some children.
    Mr. Canavan: I thank my right hon. Friend for his assurance that he fully realises that the teachers have an excellent case and that next month they will receive a substantial interim award. When my right hon. Friend next sees the teachers' representatives will he remind them that part of the difficulty is that this Labour Government inherited a very serious situation in which teachers' salaries, along with the salaries of other workers, had been deliberately held back by the previous Conservative Government during phases 1, 2 and 3? Will he remind the teachers' representatives that many of them sat in silence through phases 1, 2 and 3? Further, will he remind the Scottish National Party and those of
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    the teachers' organisations which are prone to listen to it that they are listening to false prophets, as the average salary for a Scottish teacher is higher than the average salary for an English teacher, and that Houghton's job is to get a fair deal for all teachers—
    Mr. Speaker: Order. This is getting very much like a speech.
    Mr. Ross: My hon. Friend is right in suggesting that the discontent and frustration of teachers did not start in the past few months. There has been a long build-up and the Opposition did nothing about it when in Government. There was no referral to the relativities procedure by the Conservative Government. They did nothing about it. The last settlement awarded under the phase 3 was 7½ per cent. to 8 per cent. We recognised that the teachers had fallen behind. The teachers welcomed the setting up of the Houghton Committee. There is little between us, and I still hope that the teachers' organisations will respond and appreciate exactly what this issue means to Scottish education.
    Mr. Hamilton: Will my right hon. Friend say how many groups of workers, anywhere in the country, have had an offer backdated by several months since the Labour Government took power? As the younger teachers are the worst hit, will he say how much they have had in absolute terms and in percentage terms from the threshold agreement in the last several months since the agreement has been operative?
    Mr. Ross: All teachers in Scotland, and other workers elsewhere, have had the advantage of the threshold payments. The payments amount to £230 per year.
    Mr. Hamilton: Each?
    Mr. Ross: Yes, each. That is, of course, a flat rate.
    As a result of the action that was taken by the Government, backdating applied to nurses. The nurses also received a payment to account. That payment was decided after the Halsbury Report was received. One of the snags is that because of the timing of the Houghton Report—it will not be available until the end of the year—we shall not have time to put into effect the mechanical processes

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    of payment and to get the money into the pay packets in December. That is why I welcome the Houghton Committee's decision to give us a figure early in December. That will enable us to make an interim payment. I think it is reasonable on all grounds.
    Mrs. Bain: In reply to a parliamentary Question, the Secretary of State admitted that there were substantial wage differentials between Scottish and English primary schoolteachers who had the same qualifications. Will he guarantee that those differentials will be eradicated by the Houghton Report? Will he also bear in mind the difference in qualifications which are required for graduates in secondary Scottish schools, whereby they have to spend much longer in qualifying before they are acceptable under the Scottish Education Department regulations?
    Mr. Ross: The hon. Lady should know—I am surprised that she does not —that wage scales in England and Scotland, by the wishes of teachers, are dealt with by different committees. She should also know that the Secretary of State does not interfere in decisions made by the Teachers' Side and the management on how discrimination should be made between honours graduates, graduates and non-graduates. If the hon. Lady knew historically the reason for differentiation in England and Wales, she would not have put that question.
    I cannot guarantee that this matter will be decided by the Houghton Committee. It will be decided in the Scottish Teachers Salaries Committee.
    Mr. Hunter: Is my right hon. Friend convinced that he has gone as far as he can regarding an interim payment? To avoid further disputes in the education service in Scotland, is it not possible to offer a specified sum to meet the teachers' demands?
    Mr. Ross: We set up the Houghton Committee to do a very big job—not only to deal with the question of the extent to which teachers' salaries have fallen behind but to consider the structure, which might please the hon. Member for Dunbartonshire, East (Mrs. Bain)—and we have to leave it to do it. It was asked to produce an interim report. It said, "No. That would hold us back. We want to get on with the full job". Now it has voluntarily suggested some-
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    thing which will not cut across its broad final conclusions. It would be unfair of us in the House to do otherwise.
    Mr. Buchanan-Smith: Is it not clear that hon. Members on both sides of the House want to see an end to the chaos in Scottish schools and to see the teachers back at work? Does not the right hon. Gentleman realise that his handling of this matter and his stubbornness in relation to the teachers is the single greatest obstacle to getting the teachers back to work? Instead of putting the blame on the teachers, will he consider his own position and stand down and make way for someone who can command the respect and confidence of the teaching profession?
    Mr. Ross: The hon. Gentleman talks an awful lot of nonsense. Little men with big voices, in all sorts of capacities, do not impress me. Anyone who has followed this matter carefully, bearing in mind the extent to which the teachers' claims have jumped—and there is a variety of them—will appreciate what we have done in accepting the principle of an interim payment and making arrangements for it in December, which will not cut across the final conclusions of the Houghton Committee. That is a fair indication that the Government have been sensitive to the teachers' needs, whereas the Conservative Government did absolutely nothing.
    Mr. Cook: Will my right hon. Friend accept that many of us welcome his statement that a payment on account could be made in December? However, is he aware that if that is to be possible a decision will have to be announced very early in December? Does he realise that most teachers will be paid before the Christmas break and that in Edinburgh, for example, the salary computer printouts will commence on 9th December? Will my right hon. Friend assure us that he will do everything possible to reach a decision before that date?
    Mr. Ross: I can assure my hon. Friend that all these matters have been taken into consideration. That is one of the matters I was discussing yesterday with the Management Side.
    Mr. Rifkind: Does not the right hon. Gentleman realise that the attempts of moderate teachers' leaders to persuade

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    their members to go back to the schools and teach the children have been hindered by his attitude? Does he accept that if he had made his statement of last Friday three weeks beforehand the moderate teachers' leaders would have been greatly strengthened in their attempts to keep the schools going and avert the recent chaos?
    Mr. Ross: The hon. Gentleman should appreciate that the suggestion of Lord Houghton's Committee, which I welcome, could not have been made three weeks before, for the simple reason that Lord Houghton had to see how he was proceeding towards a final conclusion. He suggested only last week that he would be able to do it by the beginning of December. That could not have been decided three or four weeks before.

    Secondary Schoolchildren
    Mr. Teddy Taylorasked the Secretary of State for Scotland how many secondary schoolchildren were receiving part-time education in Scottish schools at the most recent date for which figures are available; and what were the comparable figures in each of the previous three years.
    The Under-Secretary of State for Scotland (Mr. Robert Hughes): Returns from education authorities show that 47,160 secondary pupils were receiving part-time education on 4th November. Figures are not available for November 1971 or November 1972 but, in November 1973, 6,473 pupils received part-time education in Scottish secondary schools.
    Mr. Taylor: Does the hon. Gentleman agree that those figures are absolutely alarming? Can he say whether any part of the figure of 47,000 relates to industrial disruption? I understand that the figures apply to the period before the major trouble started in the schools. Does the hon. Gentleman accept that there is a desperately serious education crisis, particularly in Glasgow and Lanarkshire? Bearing in mind that the problems are located essentially in areas of Glasgow and Lanarkshire, will progress be urgently made on the question of designation payments?
    Mr. Hughes: I entirely accept that the situation is alarming, and confirm that in one-third of the schools affected the part-
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    time education is related wholly to work-to-rule, which is not concerned with the current difficulties, and that much of the part-time education is caused by teacher shortage in particular schools. I am concerned to ensure that the problem is eradicated as soon as possible.
    The figure has built up over the years. In March this year the figure was 12,000 in secondary schools. I met the education authority representatives of Glasgow, Renfrew and Lanark last week. We had a very useful discussion on how we might proceed to a better future.
    Dr. Bray: Does my hon. Friend agree that, because of the different staffing situation in schools which are undermanned, some more acutely than others, a multilevel system of designation payments may be desirable?
    Mr. Hughes: The question of designation payments is for discussion within the Scottish Teachers Salaries Committee. I have no doubt that it will be discussed because the Teachers' Side has agreed to consider the question of designation payments once it has received the Houghton Committee's report.

    Student Grants
    Mr. Gourlayasked the Secretary of State for Scotland what is the effective increase in a student's grant after deducting the increased hostel fee for a resident student at Dundee College of Education.
    Mr. Robert Hughes: £48.
    Mr. Gourlay: Does my hon. Friend regard the increase as sufficient in the light of rising prices? Is it correct to assume that the figure of £48 applies only to students in receipt of the maximum grant? There are students who do not receive the parental contribution, which is taken into account in calculating the grant, and they are finding great difficulty in making ends meet. Therefore, at the next review, will my hon. Friend consider doing away with the necessity of the parental contribution? Further, since the Secretary of State saw fit to freeze the rents of council houses, could he not have frozen the rents of hostel accommodation?
    Mr. Hughes: My hon. Friend raises a number of points. First, the question whether the additional £48 is adequate in

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    view of rising prices is something that can be discussed later. The current student grant position is to apply for 12 months, instead of three years as previously. Therefore, there will soon be an opportunity to discuss the actual figures and various other matters.
    The Government take the view that the parental contribution ought to be removed. However, there are other claims on Government money and we cannot promise to do away with the parental contribution immediately, although we shall work towards this.
    Freezing rents in relation to hostel accommodation is a matter that has to be considered bearing in mind that the increase in student grants is intended to cover, if not all, certainly a great part of students' living costs and accommodation. We must be careful not to apply a double subsidy, so that a student receives an increased grant and at the same time more money has to be made available to see that hostels function in a viable way.
    Mr. Corrie: Does not the hon. Gentleman agree that something must be done to speed up the payment of grants? Many students who are being approached to pay hostel fees have not the money to do so.
    Mr. Hughes: For the moment I content myself by saying that I agree with the hon. Gentleman, but there is a later Question, on which no doubt students' grant demands will be considered more deeply.

    Springburn Expressway
    Mr. Buchananasked the Secretary of State for Scotland what progress is being made in the construction of the Springburn Expressway in regard to planning, surveying and the acquisition of property; and, as the redevelopment of the whole area is dependent on the construction of the expressway, whether he will now give a date for its completion.
    The Minister of State, Scottish Office (Mr. Bruce Milian): The Springburn Expressway is a matter for Glasgow Corporation and Lanark County Council. I understand that the corporation has started preliminary work on planning and surveying, and has acquired some properties which came up for sale. No pro-
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    posals for the start of construction have been submitted to my right hon. Friend.
    Mr. Buchanan: I hope that my hon. Friend will agree that his reply will be the occasion of much disappointment to the people of Springburn and to those who have to travel through the terrible bottleneck in Springburn on their way north? Will he make clear to the city planners that it is absolute folly, in a city that is desperately short of houses, to acquire housing property too far in advance of development? Derelict property becomes a refuge for squatters, an eyesore and nuisance to the inhabitants, and a disincentive to any industrialist thinking of coming to the area. Will my hon. Friend do everything possible to speed up this matter?
    Mr. Millan: As I have said, no proposals have been put to me and therefore the initiative does not, I think, lie with the Scottish Office at the moment. However, I shall certainly make inquiries about the specific points that my hon. Friend has raised. I realise that uncertainty about the expressway is causing considerable difficulty in the comprehensive development area. I shall be happy to look into these matters. Perhaps my hon. Friend would like to have a word with me about them.

    Guard Dogs
    Mr. Doigasked the Secretary of State for Scotland if he will make proposals for the more effective control over guard dogs; and if he will request hospitals in Scotland to keep a record of persons treated for dog bites.
    The Under-Secretary of State for Scotland (Mr. Hugh D. Brown): My right hon. Friends the Secretary of State and the Home Secretary are considering means of reducing the risk of dogs attacking people, including the preparation of a code of practice for the training and use of guard dogs by security firms. Records kept by hospitals do not provide an effective measure of the total number of dog bites—some hon. Members may laugh, but I know that my hon. Friend does not think that this is funny, and I am treating it seriously—far less the number of bites by guard dogs; and I do not think I would be justified in asking hospitals to adapt their records as my hon. Friend suggests.
    Mr. Doig: I thank my hon. Friend for the first part of his answer, which is very helpful because it relates to action which is long, overdue.
    With regard to the second part of his reply, how can the Government ever find out the extent of this danger unless they are prepared to try to get figures of the numbers involved? I have been told by voluntary workers, who have gone round hospitals for other reasons, that they were surprised at the number of cases they came across of people being treated in hospital for bites from dogs.
    Mr. Brown: I appreciate my hon. Friend's concern for what I regard as a most important subject, particularly in respect of guard dogs. I am trying to be as helpful as possible to my hon. Friend but he must appreciate that in the generality of things most people afflicted by dog bites would normally go to a general practitioner. Only in more serious cases might there be a need to go to the casualty department of a hospital. I should be as helpful as possible if I thought that any useful contribution could be made by getting the information which my hon. Friend seeks, although it would be extremely difficult.
    Mr. Fairbairn: Will the hon. Gentleman assure us that these carnivores will at least receive the same licence that the Prime Minister grants to carnivores opposite—that every dog will be allowed one bite?
    Mr. Brown: I would not attempt to match the hon. and learned Gentleman's frivolity on any subject. I regard this as a serious subject and I am hopeful that by the end of the year we shall be able to make some progress along the lines suggested in dealing with guard dogs. Because of the co-operation of the security firms, this is a matter in which we can make some progress towards preventing unfortunate incidents such as have occurred recently.

    Sugar Beet
    Sir John Gilmourasked the Secretary of State for Scotland whether he will hold consultations in Scotland to review the possibility of again growing sugar beet, in view of the changed circumstances since the Cupar sugar factory was closed; and if he will make a statement.
    Mr. Hugh D. Brown: The question whether there should be a resumption of sugar beet growing in Scotland is a matter for the commercial judgment of the farmers and other interests concerned.
    Sir J. Gilmour: Does not the hon. Gentleman agree that owing to the fact that present legislation precludes farmers from starting up sugar beet enterprises on their own, positive action is required by the Government if this matter is to be reopened?
    Mr. Brown: I am not aware of any legislation that prevents anybody setting up commercial enterprises, whether those enterprises be in sugar beet or any other kind of activity. We have had no representations from any farmers suggesting that we should make such provision in Scotland.
    Mr, William Hamilton: Does my hon. Friend realise—I am sure that he does—that there already is a current world shortage of sugar? In view of that, will he take steps to encourage Scottish farmers—Scotsmen, every one of them—to do their national duty and produce Scottish sugar for Scottish people in Scottish factories?
    Mr. Brown: I appreciate my hon. Friend's sentiments, but I must point out to him that when the Cupar factory was operating there was a very low production of sugar in terms of the contribution it made to the full United Kingdom requirements, and, indeed, to Scottish requirements. The SNP think that oil will solve everything, but to the best of my knowledge there is so far no known way of producing sugar from oil.
    Miss Harvie Anderson: Will the hon. Gentleman give an assurance to the House that the required 1·4 million tons of cane sugar will be made available for the Greenock factory, thereby securing the jobs of 900 workers in that factory?
    Mr. Brown: As the right hon. Lady knows, this is a slightly wider question —and not all of the 1·4 million tons would be made available to Greenock, because this is a United Kingdom figure. I can certainly give an assurance that we are seized of the importance of ensuring the maximum number of jobs in Greenock.

    Local Government Reorganisation
    Mr. MacCormickasked the Secretary of State for Scotland if he will seek powers to postpone the reorganisation of local government in Scotland.
    Mr. Alexander Fletcherasked the Secretary of State for Scotland if he will review the operation of the new regional authorities in the light of the commitment to establish a directly-elected assembly.
    Mr. Corrieasked the Secretary of State for Scotland if, in view of the intention to set up a directly-elected assembly in Scotland, he will seek powers to hold up the present changes in local government in Scotland till the whole situation has been reconsidered.
    Mr. William Ross: I apologise for the shortness of the Answer. No, Sir. To halt reorganisation now would cause serious dislocation to Scottish local government.
    Mr. MacCormick: Does the Secretary of State appreciate that the action of his Government in proposing to bring forward soon a Scottish Assembly makes his answer quite unsatisfactory? Even if he is not prepared to look at the whole field of Scottish local government, will be consider the position of Strathclyde, which is a monster, with which the people are getting fed up already, even though it has not come into being?
    Mr. Ross: If there were any difficulty regarding the size of Strathclyde it would be the same whether it were administered by the Scottish Office or by a Scottish assembly. We discussed this during the passing of the Bill relating to this question, and I can provide quotes on what was said at that time if any hon. Member wishes. I see the hon. Member for Ayr (Mr. Younger), who made those remarks, now sitting opposite. He advised us to concentrate on getting local government right. It was the Conservatives' decision. I am no great lover of Strathclyde, but I recognise the practical fact that we have had elections and that the changes are now fairly well in train. It would be a recipe for chaos to make any different statement on the matter now.
    Mr. Fletcher: Will the Secretary of State acknowledge that I wrote to him
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    in March this year suggesting that at least the setting up of the regions should be postponed until more was known about a Scottish assembly? Will he also acknowledge that since then he and his colleagues have decided that there shall be an assembly in Scotland? Is not the right hon. Gentleman adopting his usual inflexible habit of not recognising the chaos, conflict and, indeed, contradiction, to say nothing of the expense, of putting a directly elected assembly on top of the regions in Scotland?
    Mr. Ross: It was the hon. Gentleman's purpose also at that time to have an elected assembly, and we drew the matter to the attention of the Minister in an amendment to delay implementation for another year to give more time for consideration. The hon. Gentleman should appreciate that we cannot simply take the regions and do something about them and forget that they are all of a piece with the division of the various functions of the existing local authorities between regions and districts. It is just not possible to do what the hon. Gentleman suggests.
    Mr. Sillars: Does not the Secretary of State agree that the Government's commitment to create a Scottish development agency knocks into a cocked hat the argument that Strathclyde must be created for strategic and economic reasons? Secondly, will my right hon. Friend take into account the extreme difficulty some of us have in arguing with Scottish working people and asking them to stick to the social contract, when some of the highest paid salaried staff in local government are getting enormous wage increases, some of them for doing less work?
    Mr. Ross: I am equally concerned about any empire-building that may be going on under the new set-up. We have some experience of that elsewhere. I hope some of these lessons will be learnt. I do not agree with what my hon. Friend says about the Scottish development agency making Strathclyde unnecessary. We have already had meetings about the Scottish development agency—some are in progress now—and about the way in which the two authorities will fit in. I think that we shall be able to help Strathclyde with the Scottish development agency, and certainly not hinder it.
    Mr. Corrie: Is the Secretary of State aware of the strong feeling that exists among the people that Bute County and Ayrshire should be a region and should not be part of the Strathclyde monster? By how much will the rates rise for the people in those counties because they are part of Strathclyde and attached to Glasgow?
    Mr. Ross: I would have welcomed the presence of the hon. Gentleman when we debated this matter. His predecessor did not take exactly that attitude. My attitude on Strathclyde at that time was fairly well known.
    Mr. Dalyell: To return to the point raised by my hon. Friend the Member for South Ayrshire (Mr. Sillars), and without trespassing on Question 31, what reply has the Scottish Office had to its departmental circular on the question of excessive salary increases and the expansion of local authority staffs?
    Mr. Ross: My hon. Friend has tabled a Question on that subject. I suggest that he waits for the answer.
    Mr. Buchanan-Smith: I appreciate that the Secretary of State does not want to put back local government in Scotland, but will he assure us that once we know more about the powers and mechanics of the assembly he will look at the consequences for local government in Scotland and in due course be prepared to consider whether any changes are necessary, once we know the form it is all taking?
    Mr. Ross: Once we know the form it is all taking, it may not be for us to make the change. It may be for the assembly to make the change. We must appreciate that we do not make changes in relation to functions and give new responsibilities, only to usurp them before we have handed them over.
    Mr. Grimond: I appreciate the Secretary of State's difficulties, but is he aware that many people of all walks of life, including the Moderator—that turbulent priest—have been criticising the dangers of the situation? We are reluctant to have the local authorities upset again, but it might be unwise to leave a completed organisation for the assembly to have to unscramble. Will the right hon. Gentleman give thought to
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    whether there are any means of postponing the full reconstruction?
    Mr. Ross: I do not think that there are. We have already had the elections, and the people who have been elected are already doing part of their work. What the right hon. Gentleman suggests would be a recipe for chaos. Once we come to consider the assembly and discuss the relationship between the assembly and local government it may become clear what should be done. These things cannot be rushed.

    Western Isles (Sea Transport)
    Mr. Donald Stewartasked the Secretary of State for Scotland if, as a matter of urgency, he will formulate proposals for improving sea transport to the Western Isles.
    Mr. Milan: My right hon. Friend is reviewing with the Scottish Transport Group the finances of its shipping services to the Western Isles and on the Clyde, and he will make a statement about this as soon as possible.
    Mr. Stewart: I thank the Minister for his reply, but is he aware of the growing and justified anger in the Western Isles about the lack of action on this problem, the broken promises of the shipping company, the unsuitability of some vessels, the ludicrous timetables and the exorbitant costs? Will the right hon. Gentleman see that immediate action is taken?
    Mr. Millan: Some of those matters are not for me but for the Scottish Transport Group. I do not accept the sweeping language which the hon. Gentleman used. Some of the matters of which he complains have gone to the transport users' consultative committee. In one case changes have been made following that. As to the condition of the "Iona ", that is under consideration between the Scottish Transport Group and the Government.
    Mr. Younger: Will the Minister remind the hon. Member for Western Isles (Mr. Stewart) that in the past few years the service to Stornoway has had two new vessels completed, performs two trips a day each way instead of one, and now has a drive-on, drive-off service which is infinitely better than it was before? Does the Minister not think that the hon. Gentleman is a little ungrateful?
    Mr. Millan: When I recently met representatives of all the local authorities concerned about these services, while they were unanimous in deploring the recent increases in charges they were also unanimous in saying that the quality of the service and the vessels had been much improved. I am glad to put that on record. The impression sometimes gets about that the Scottish Transport Group has made no improvements in these services. That is certainly not true.
    Mr. Russell Johnston: Will the Minister give an assurance that there will be no fare increases until his review is completed? Will he take this opportunity to deny the strong rumour that a 25 per cent. fare increase will be announced on Monday?
    Mr. Millan: If that is announced on Monday it will be news to me as well as to everyone else. I asked the Scottish Transport Group to defer consideration of charges until this matter has been looked into. The review was announced some time in September. The review is not completed and there will certainly be no fare proposals before the end of the review.

    Fishing Boats (Purchase Grants)
    Mrs. Winifred Ewingasked the Secretary of State for Scotland, if he will take steps to increase the aid available to fishermen seeking to purchase fishing boats.
    Mr. Hugh D. Brown: My right hon. Friends the Secretary of State and the Minister of Agriculture, Fisheries and Food are consulting the White Fish Authority, the Herring Industry Board and the fishing industry about the level of grant assistance after the end of this year.
    Mrs. Ewing: I thank the Minister for his answer. Does he accept that in my constituency of Moray and Nairn there is a danger of the traditional family boat-owning pattern breaking up because of this difficulty? Will the hon. Gentleman confirm that the EEC grant application position is as stated in his correspondence with me, which seems incredible? Is it true that no aplication can be made for a grant if a contract is already negotiated to build a boat? As it takes approximately nine months
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    to get a boat built, does not that mean that, in effect, no EEC grants are vailable to fishermen in my constituency?
    Mr. Brown: I do not think it means that at all. If I may say so, the hon. Lady has put a rather confused supplementary question. It attempts to deal with a general principle by expressing concern about the future level of grants and then jumps to a particular case of which I have knowledge. I have no reason to doubt the facts that I have already communicated to the hon. Lady.
    Mr. Sproat: Will the Minister confirm that in the last 18 months the Scottish fishing industry has received from the EEC about £350,000 in grants? Will he also give an assurance that if the EEC wants to direct more money towards the Scottish fishing industry it will not be blocked by his right hon. Friend the Secretary of State for Industry acting in the way in which he was said to have acted in the case of the Welsh?
    Mr. Brown: I am not aware of that situation. I would not like to dispute or to accept the figure quoted by the hon. Gentleman. The arrangements made for grants to assist in the purchase of fishing boats are generous at the moment and are in no way limited by any EEC regulation or other legislation.

    Oil Development Areas (Aid)
    Mr. Douglas Hendersonasked the Secretary of State for Scotland whether he is now able to make a statement on additional financial assistance to local authorities in areas affected by oil developments.
    Mr. Millan: The appropriate provision will be included in the Local Government (Scotland) Bill to be published shortly.
    Mr. Henderson: Does the Minister accept that there will be widespread pleasure in Scotland at his announcement that oil development areas will receive special assistance? Is he aware, however, that there is concern, following the comments by the Chancellor of the Exchequer in the Budget statement, about restrictions on local authorities? Will he take the earliest opportunity to reassure all local authorities that help will be coming shortly in a concrete form?
    Mr. Millan: Yes, I can certainly give the assurance that the Bill will include appropriate provision.
    Mr. Gray: Will the Minister bear in mind that authorities affected by oil developments require assistance on general housing needs and similar matters, and also desperately need help to provide recreational facilities for the thousands of people who are coming into those areas?
    Mr. Millan: All these considerations are already being borne in mind by the various Departments in the Scottish Office.

    M90
    Mr. Crawfordasked the Secretary of State for Scotland what representations he has received concerning the rerouting of the proposed M90 motorway through Glenfarg.
    Mr. Millan: Several representations about alternative routes were considered at a public inquiry in 1971. My right hon. Friend's predecessor confirmed the proposed line, which was then challenged unsuccessfully in the courts in November 1973. Some representations have continued for an alternative line which my right hon. Friend considers unacceptable.
    Mr. Crawford: Will the Minister give the completion date for the Edinburgh-Perth motorway, and will the Government also bring up to standard that motorway, including the hard shoulders?
    Mr. Millan: That is a rather different question. It is a pity that the hon. Gentleman did not table it for answer. I cannot give a date. However, I must add that if it had not been for the disputatious objections, the completion date would have been much sooner

    Scottish Assembly
    Mr. Reidasked the Secretary of State for Scotland what representations he has received asking him to ensure the establishment of the Scottish assembly, with powers over the Scottish economy, within two years.
    The Under-Secretary of State for Scotland (Mr. Harry Ewing): One, Sir, from the 1320 Club.
    Mr. Reid: Does the Minister accept that it is possible to deluge him with further representations, if he so wishes? Will he give serious consideration to establishing an all-party committee of Scottish Members to investigate the possible location and likely support services for the assembly to obviate further delays once the Assembly Bill becomes law?
    Mr. Ewing: The hon. Gentleman should be aware that it has never been the practice of Governments, nor will it be the practice under a Labour Government, to establish all-party committees to introduce Government policy.
    Mr. Buchan: Will the Minister be a little kinder to hon. Members representing the Scottish National Party? After all, they will require a little time, in view of the split decision they came to in the House last night, when half of them said that they would grant independence to Shetland and the other half said that they were not in agreement with the granting of independence to Shetland, from which oil revenues will come? Two years is a short time in which to settle the question whether they want to keep all the Shetland oil in Scotland, or whether they wish to give Shetland independence and then take its oil. Since the SNP Members are obviously in a quandary, will the Minister give them a little time to sort out matters?
    Mr. Ewing: My hon. Friend knows that my kindness knows no boundaries, and even extends to the SNP. I am prepared to give them as much time as they require to reach agreement among themselves on their policies.
    Mr. Michael Clark Hutchison: Is the Minister aware that many people, including myself, do not want any assembly at all, because we believe that it will be a useless and unwanted extra tier of government?
    Mr. Ewing: Yes, we are aware of those views. They were expressed this summer.
    Mr. Sillars: Is my hon. Friend aware that if we set up a Scottish Parliament in the next two years the most disappointed political group in Scotland will be the Scottish National Party? In any consultations with the SNP, will my hon. Friend ask them the following question: if an assembly is set up, will the SNP try to make it work or try to destroy it?
    Mr. Ewing: On my hon. Friend's first point, I agree that the most disappointed party in Scotland will be the Scottish National Party. On the second part of his remarks, my hon. Friend poses a question to which the whole of Scotland would like to know the answer, namely, whether the SNP proposes to make the assembly work. If I ever receive an answer to that question, I shall convey it immediately to the House.
    Mr. Teddy Taylor: I wish the Under-Secretary of State well in his new office. Will he say whether the Government intend to establish an assembly to operate in two, three or four years time? Can he give any idea when the Government expect that assembly to be elected and to operate?
    Mr. Ewing: I thank the hon. Gentleman for his good wishes on my appointment. I refer him to the statement made by my right hon. Friend the Lord President of the Council in the debate on the Queen's Speech. My right hon. Friend said that he hoped to be in a position nearer Christmas to give a more definitive timetable. Will the hon. Gentleman show a little more generosity, because even the 1922 Committee require six months to decide how to elect its leader? If that is the case, surely he will allow us a little more time to consider this matter.

    West Central Scotland Plan
    Mr. Youngerasked the Secretary of State for Scotland whether he will make a statement on the implementation of the Report of the West Central Scotland Plan Steering Committee.
    Mr. Millan: I understand that the report will shortly be forwarded to the Stathclyde Regional Council and to my right hon. Friend. I expect that the regional council will wish to consider it urgently, as a basis for its regional strategy. The Government's proposals for a Scottish development agency will be very relevant to some of the recommendations.
    Mr. Younger: Will the Minister bear in mind that it has taken four and a half years for this study to be produced since its inauguration, and that it is most important that it should be acted on before its conclusions become out of date? Will
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    he say what will be the future relationship with regard to the Strathclyde Regional Council, the Scottish development agency and the Scottish assembly in carrying out a regeneration of this most vital area of western Scotland—an area which at present is crippled by strikes?
    Mr. Millan: I agree with the hon. Gentleman that this is a vitally important area and that the report has been a long time appearing. Among the various authorities there is no consensus about the report's recommendations. We shall have to wait to hear what the regional council thinks about the matter. Naturally, we are taking the recommendations into consideration wherever relevant. I must ask the hon. Gentleman to wait a little longer for details of the Scottish development agency. I am sure that when they are known they will be widely welcomed even by the hon. Gentleman.
    Dr. Bray: Does the Minister agree that the Scottish development agency need not wait upon the establishment of the National Enterprise Board, in view of the high unemployment level and opportunities afforded by North Sea oil development?
    Mr. Millan: I agree with my hon. Friend. Legislation on both bodies will come forward in the present Session, as has already been announced.

    Public Transport
    Mr. Sillarsasked the Secretary of State for Scotland what measures he intends to introduce to improve public transport, especially in rural areas.
    Mr. Millan: While Government assistance continues to be available to public transport operators, I think that local needs should be considered locally, and from next May, the new regional and islands councils will have a duty to develop, in consultation with transport operators, policies which will promote the provision of a co-ordinated efficient system of public passenger transport in their area.
    Mr. Sillars: Will my hon. Friend confirm that the Labour manifesto contained a commitment to improve public transport, especially in rural areas? Does he agree that following the increases in VAT on petrol this matter has become most

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    urgent because working families on low incomes in country areas depend very heavily indeed on their own transport? Will he also agree that if we are to ration energy and mobility, as we are doing with petrol, it is better to do so on a coupon system than under a pricing system?
    Mr. Millan: The latter remarks of my hon. Friend go rather beyond the original Question. These matters have already been discussed in the Budget debate and will also be discussed later. There is already legislative provision in the 1968 Act for help to be given to rural bus services by local authorities, and that help is subject to Government grant. The main responsibility must be with local authorities to identify local needs, so that assistance may be made available. There is nothing to prevent their taking that action at present.
    Mr. David Steel: Will the Minister recognise that the terms of the 1968 Transport Act are inadequate to deal with a confused situation in which, on the one hand, local authorities are required to give permission for local bus services and, on the other, there is the question of private bus operators and also the subject of the imposition of VAT on the private car? Government initiative should be taken to follow up the excellent sentiments contained in the Minister's main answer. Does he not agree that the subject needs fresh legislation?
    Mr. Millan: If the hon. Gentleman or anyone else can tell us what should be in the fresh legislation, we shall consider it.
    Sir John Gilmour: Does not the hon. Gentleman agree that it might be better for the Government to take steps to try to write off a large number of buses which are far too large for rural roads, so that, in the interests of saving petrol, rural services were taken over by 14-seater buses instead of having enormous vehicles going round on rural roads with no passengers at all?
    Mr. Millan: That is an interesting suggestion, but it is not a matter specifically for Government initiative. The hon. Gentleman will be aware that there are bus grants at the moment.
    Mr. Watt: What steps is the hon. Gentleman considering taking to ensure that rural deliveries are allowed to continue? The present high cost of petrol means that many delivery vans are being taken off the road.
    Mr. Millan: The increase in VAT does not apply to commercial vehicles.
    Mr. Buchanan-Smith: I am sure that the hon. Gentleman will acknowledge that the increase in VAT has made this question very much more topical than ever before. Although, when we get the new larger local authorities, I hope that we shall get a more unified system of subsidy for transport services, there are problems at the moment in rural areas, where the existing local authorities cannot agree about the subsidies to be paid. During the period between now and the reorganisation of local government there will be genuine difficulties where agreement cannot be reached about subsidy, and people will suffer. Will the hon. Gentleman look at the immediate problem and not just bear in mind the longer-term situation?
    Mr. Millan: The hon. Gentleman suggests that some local authorities cannot agree on paying subsidies, and that a number are reluctant to pay any at all. The legislative provision is there. The primary responsibility must be that of the local authorities. But Government assistance is available. If there are specific problems in specific areas, obviously I shall be willing to do all that I can to see that they are solved.

  LEGAL PROFESSION
  Mrs. Winifred Ewingasked the Lord Advocate if he will initiate steps to fuse the two branches of the legal profession in Scotland.
  The Lord Advocate (Mr. Ronald King Murray): No. The initiative properly lies with the representative bodies of the two branches of the legal profession in Scotland—the Faculty of Advocates and the Law Society of Scotland.
  Mrs. Ewing: Is not this a way in which the Lord Advocate is almost denying his own function? As the holder of high office, whose powers are nowhere laid down or limited, cannot he give the

  1313
  House the benefit of his opinion on the question whether there is a problem for the public purse in a situation where three lawyers are often involved in a case where one would do? As the legal aid fund, which is public money, has to meet the bill, will not the right hon. and learned Gentleman give us his views? Has he read the recent speech by Lord Goodman, and is he in touch with the moves in the English legal profession on the matter.
  The Lord Advocate: The hon. Lady has made a number of comments about me which I must disclaim. By and large, the consumer is probably better served by numbers. There is safety in numbers in all matters, including this one. The broader issue of fusion of the legal profession is not a matter for the Lord Advocate, although I do not deny that he could take an initiative in regard to it. It is a matter in which the issues are not clear. I am open-minded about it. I think that the arguments on both sides are evenly balanced. There are arguments for and against fusion of the legal profession.
  Mr. Rifkind: Is the Lord Advocate aware that the views of the hon. Member for Moray and Nairn (Mrs. Ewing) are not representative of those of either side of the legal profession, including her own? Will the right hon. and learned Gentleman resist any attempt to end a service to the people of Scotland which has stood the test of time remarkably well over hundreds of years?
  The Lord Advocate: There is force in what the hon. Gentleman says, but I think he goes too far. This is not a matter in which it would be illegitimate to look at the services provided in order to decide whether the present arrangements are the best in the circumstances.
  Mr. Buchanan: Has my right hon. and learned Friend had any representations from either branch of the, legal profession or from the police regarding the confession by Mr. George Mair about he and others having practised euthanasia in hospitals in which they have had some control?
  The Lord Advocate: My hon. Friend has raised the matter which goes a little wide of a Question. Crown Counsel, on my behalf, have studied Mr. Mair's
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  book with care, and I have read the relevant passages. Although at the top of one page the author makes vague and unspecific claims to have coped with one or two cases of euthanasia in England, he does not claim to have done anything of the kind in Scotland. I am satisfied that the book does not provide prima facie evidence of any criminal homicide in Scotland.

  SCOTTISH POLICE FEDERATION
  Mr. Rifkindasked the Lord Advocate whether he has any plans to meet the Scottish Police Federation.
  The Lord Advocate: I have no plans to meet the Scottish Police Federation.
  Mr. Rifkind: As it is the police who will have the onerous duty of trying to enforce the picketing proposals of the present Government, should they ever reach the statute book, ought not the Lord Advocate to meet them in order to discover their views? Does he not realise that his own position as the chief incarnation of the Scottish legal system will be gravely endangered by legislation that challenges the rule of law in this country?
  The Lord Advocate: I am aware of the views of the police on the matter of picketing. It is not an easy matter, and I do not think that it is one which would be helped by an off-the-cuff answer.
  Mr. Teddy Taylor: In the interests of maintaining the very high morale and efficiency of the Scottish police force, will the Lord Advocate take steps to ensure that the Secretary of State plays no part in the forthcoming salary negotiations?
  The Lord Advocate: No, Sir.
  Mr. David Steel: Both in his ministerial capacity and as a Member of Parliament for a Lothian constituency, will the Lord Advocate take note of the representations of the Lothian Regional Council and of the Border Regional Council against the amalgamation of their police forces, and will he use his influence with his inflexible colleagues in the Scottish Office to see that it is unscrambled?
  The Lord Advocate: This is not a question for me, although it is true that as

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  a constituency Member I have an interest in the matter. My views have been expressed.

  LAW SOCIETY OF SCOTLAND
  Mr. Lambieasked the Lord Advocate when he next intends to meet the Law Society of Scotland.
  The Lord Advocate: I have accepted an invitation from the President and Council of the Law Society of Scotland to a lunch on 5th December.
  Mr. Lambie: When my right hon. and learned Friend meets representatives of the Law Society, will he remind them of the ever-growing body of opinion in Scotland which looks upon the Law Society as a protection racket for inefficient lawyers—as a sort of Mafia? Now that my right hon. and learned Friend has read the full facts of the case of a constituent of mine which I forwarded to him, does he agree that it shows gross inefficiency, which justifies the demand for a public inquiry into the affairs of the Law Society?
  The Lord Advocate: My hon. Friend has used extravagant language. It does not serve any useful purpose to deal with specific cases in question and answer in this Chamber, especially in view of the fact that the Law Society of Scotland is not a body for which I am ministerially responsible.
  Mr. Sproatasked the Lord Advocate what plans he has to meet representatives of the Law Society of Scotland.
  The Lord Advocate: As I said in answer to the hon. Member on 31st July, I have an arrangement whereby I meet the President of the Law Society of Scotland every month. In addition, I meet him on other occasions when he asks for a special meeting.
  Mr. Sproat: In view of the increasing percentage of the total crimes committed in Scotland which are committed by juveniles, when next the Lord Advocate meets representatives of the Law Society will he ask for their considered views on the effectiveness of the system of children's panels as opposed to other means of dealing with juvenile offenders?
  The Lord Advocate: The hon. Gentleman raised an important matter, which merits a question directly to the point. I have had representations made to me on this subject. I was a guest at a meeting of solicitors in the west of Scotland on Friday when a number of criticisms of the children's panel system were made to me. I have had other representations made to me. I shall pass them all to my right hon. Friend the Secretary of State, within whose province this matter lies.

  SCOTLAND

    Beef Production
    Mr. Monroasked the Secretary of State for Scotland what evidence he now has about the lack of profitability in the beef sector of farming in Scotland.
    Mr. Hugh D. Brown: Low market prices since midsummer have resulted in increasingly unsatisfactory returns to beef producers in Scotland and elsewhere in the United Kingdom. My right hon. Friend the Minister of Agriculture, Fisheries and Food has made considerable progress in the discussions this week in the Council of Minsters (Agriculture) about changes in our support arrangements and intends making an early statement.
    Mr. Monro: Is the hon. Gentleman aware that the Government are entirely responsible for the beef cattle crisis this summer and autumn, and does he realise that this is because of the removal of the intervention and the floor in the market in March by his right hon. Friend? Because of this, millions of pounds have been lost to farming and, of course, thousands of calves have been slaughtered unnecessarily. Does the hon. Gentleman accept that we welcome what appears to be a complete reversal of policy by his right hon. Friend, in that he will now introduce a floor and an intervention price, but that we feel that it is far too little and far too late?
    Mr. Brown: That was an interesting preamble. A good case never needs to be exaggerated. The representations which have been made to me and my right hon. Friends were taken on board and were included in the discussions to which I referred. I am hopeful, as I said, that the Minister will be able to

    1317
    make an early statement. As he has already said, considerable progress has been made. I think that we should await the outcome with some optimism.
    Mr. Buchan: Does my hon. Friend not agree that the the origins of the trouble were the appalling terms negotiated by the Conservative Party, particularly the destruction, in the spring of last year, of the guarantee price and deficiency payments system? Does he accept that I am delighted that his right hon. Friend has made progress in Brussels? This must mean that all the Press reports today which have said that he has adopted an intervention policy are false. I am glad to have that assurance.
    Mr. Brown: I am not too sure that my hon. Friend is glad that considerable progress has been made—[HON. MEMBERS: "Oh."] Well, he did not sound like it. I agree entirely that the troubles began two years ago, but they are complicated and not merely due to the requirements which have been placed on the agriculture industry by our membership of the EEC.
    Mr. Fairgrieve: Does the hon. Gentleman realise that if rumours emanating from Brussels are correct, the Minister is only now taking action which was available to him in March, and that British agriculture has suffered unnecessarily in the interim, and probably the consumers in the longer term?
    Mr. Brown: No, that is grossly unfair. Hon. Members opposite must appreciate that the major responsibility for our being in the EEC in the first place was theirs, and it does no good to exaggerate this matter. Even our worst critics among the farmers appreciate that we have achieved greater flexibility within the agricultural arrangements than people expected us to get. I think that that is desirable, and it is consistent with what I said about considerable progress having been made this week.
    Mr. Buchanan-Smith: Mr. Speaker—
    Mr. Speaker: No, we are beyond the time.

    QUESTIONS TO MINISTERS
    Mr. Dempsey: On a point of order. May I draw your attention, Mr. Speaker, to the fact that my Question was No. 21 and that I tabled it two weeks ago, at
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    exactly 10 o'clock in the morning? I could not table it any earlier. May I ask you, as the custodian of the rights of back benchers, whether there is anything you can do to expedite questions and replies so as to ensure that more Questions can be answered than is the case now?
    Mr. Speaker: I am grateful to the hon. Gentleman. The answer is very simple—shorter questions, from both Front and back benchers, and shorter answers.

NEWSPAPER EDITORS (TALKS)
Mr. Prior (by Private Notice)asked the Secretary of State for Employment whether he would make a statement on his meeting with the national newspaper editors yesterday.
The Secretary of State for Employment (Mr. Michael Foot): The editors expressed to me their concern about the possible effects of a closed shop in journalism in relation to the forthcoming Bill to amend the Trade Union and Labour Relations Act. I undertook to consider their views and to have further discussions with them.
Mr. Prior: Is the right hon. Gentleman aware that two separate but important issues are involved? First, there is the issue relating to the closed shop which the editors discussed with the right hon. Gentleman yesterday. Why can he not leave matters as they were decided by the last Parliament with regard to the closed shop? What evidence is there in the right hon. Gentleman's possession that there is any desire by journalists generally that changes in the law should now be made?
Second, with regard to the industrial dispute which is now taking place in the industry, is the Secretary of State aware that the type of action chosen is clearly interfering with editorial freedom and emphasises once more the validity of the editors' fears which they expressed to him yesterday? Is he aware that items of great public interest and importance are now being blacked? Is he aware, for example, that the publication of the Identikit pictures of persons wanted in connection with the Guildford bombing has been blacked? What action are the

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right hon. Gentleman and the Government taking to prevent this sort of thing? Will they now come forward with an assurance that they will protect the freedom of the Press and the editorial rights of editors to print what they think is correct without fear of contradiction or backing by journalists?
Mr. Foot: The right hon. Gentleman says that two issues are involved and he raised two questions. They are separate questions and I will reply to each of them. On the first question, that of the possible effects of a closed shop in journalism, if that were to arise, I believe that much the best way for the House to deal with that is in the debates on the Bill which we are presenting on the matter today or tomorrow. Of course, we shall have ample opportunities to discuss the issues involved when the Bill is presented. [HON. MEMBERS: "Tell us now."] I will come in a moment to the second part of the question that the right hon. Gentleman asked, but on the question of the Bill, the convention of the House—and a very good one in my opinion—is that legislation should be discussed on Second Reading, in Committee and on Third Reading. That is what we propose to do in relation to this Bill as with previous Bills, and I believe that that is the right occasion on which we should discuss the important matters of principle involved. I think that that is well understood, incidentally, by the editors.
Perhaps I may take this opportunity to say that I, of course, made it clear to the editors that the Bill was likely to be presented this week and that we should be able to debate it later. That is the way to deal with the first question. The second question that the right hon. Gentleman raised was not raised with me at all by the editors yesterday. Indeed, they did not ask to raise that question. If the right hon. Gentleman wishes to put down a Question on an industrial dispute, he should do so.
Mr. Corbett: Would my right hon. Friend confirm that no recent decisions by the National Union of Journalists affecting people in its membership have done anything to alter its jurisdiction, under the rules of that union, over any member? Will he therefore confirm that members of that union previously holding associate membership were by their membership
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also required to obey the instructions of the National Executive Council?
Mr. Foot: My hon. Friend is quite correct about the definition of associate membership, as I understand it. That is one of the questions which were discussed when I met the editors yesterday. They put their views, and I have done, and will be doing, what I undertook to do—to consider what they said and to have fresh discussions with them, but principally of course with the House of Commons. They did not raise the immediate question of the industrial disputes. I am sure that if they had wished to do so, they would have done so. They came to see me about the Bill.
What I said to the right hon. Gentleman—there is nothing discourteous in it, I hope—is that if he wishes to put down a Question on that subject, I will do my best to answer it, but I do not believe that the right way to raise such a Private Notice Question as that is to put down a Question on another subject.
Mr. George Gardiner: Will the right hon. Gentleman accept that opinion among working journalists on these matters is not nearly as united as some statements by national officials might indicate? Second, will he accept that in the view of many journalists his proposed legislation will need some change if the freedom of the written word is to be protected in this country? Third, as a former editor himself, does he agree with the proposition that the day on which a journalist becomes a censor he effectively ceases to be a journalist?
Mr. Foot: Yes, Sir, I quite agree with the hon. Gentleman in his last view about censorship. I am very glad that that provision is included in the rules and provisions of the National Union of Journalists. I am sure that the hon. Gentleman is gratified in that respect, so there is no dispute about censorship. When the hon. Gentleman says that there may be differences of views within the NUJ on the question of the Bill and other matters, I fully appreciate that there are differences of views in that union as there are in other unions. But sometimes the views of the NUJ, the official views declared at its conferences, are very much misrepresented. That has been shown by reports in some of the newspapers.
Mr. Madden: Does the Secretary of State agree that newspaper editors who dismiss members of their staff for taking legitimate trade union action in pursuit of legitimate pay claims are themselves doing a great deal to undermine the freedom of the Press? Does he further agree that in the past, large newspaper groups, such as Odhams, which have operated closed shop policies have done so quite properly and with the good will and agreement of all their staff?
Mr. Foot: On the first question, I shall not reply to my hon. Friend—for the same reason that I did not reply to the question from the right hon. Member for Lowestoft (Mr. Prior)—because what I wish to see in that dispute is a settlement as speedily as possible. If I answered my hon. Friend's question now, I am not sure that it would assist in that course.
As to my hon. Friend's historical reminiscences about what happened in Odhams in years gone by, I am happy to confirm what he says. There have been closed shops which have existed in journalism over many years and which have not interfered in any way with editorial freedom, and they certainly operated in Odhams when I was working there.
Mr. Grimond: I must declare an interest. I am grateful to the Secretary of State for saying that he will have a further conference, and I take note of what he says about the legislation that is to come before the House. However, surely in a matter of this importance the House has a right to an undertaking from a Minister who so powerfully represents the Miltonian tradition of freedom, and who is a very distinguished contributor to the Press, that he would not countenance any legislation which impinged upon the right of editors to engage outside contributors.
Mr. Foot: The right hon. Gentleman's last question is on a matter which was also referred to by the editors when they came to see me yesterday, although they did not request the Government to take any legislative action about it. They merely asked us to take note of it. Therefore, that was in a very different category —[HON. MEMBERS: "Oh."] It so happens that the editors themselves were not asking that the Government should take any action about dealing with con-
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tributors to the newspapers. That is what the editors said. Hon. Members may know better, but that is what they said. They were not asking for any Government action about it, nor were they making any protest about any Government legislation in connection with that matter.
I repeat to the House what I said to them. What we are doing in this respect is not to introduce any innovation. What we are seeking to do, as in so many matters in industrial relations, is to restore the situation to that which existed before 1971. [An HON. MEMBER: "Progress."] So disastrous were the reactionary consequences of the legislation between 1971 and 1974 that it is progress to restore things to the pre-1971 situation.
Sir D. Walker-Smith: When the right hon. Gentleman talks of restoring matters to the pre-1971 position, he is not suggesting to the House, is he, that there was any statutory requirement of a closed shop prior to 1971? Will he undertake that the views of individual journalists, even though they may be subject to this somewhat arbitrary rule of the NUJ, which has been referred to by hon. Members on the Government side of the House, will be fully and sympathetically taken into account?
Mr. Foot: I want to clear up any misapprehension which may have arisen from the right hon. and learned Gentleman's question. There was no statutory requirement for a closed shop in the pre-1971 legislation. There is no statutory requirement for a closed shop in the legislation that we introduced or in the legislation that we propose to introduce in the future. Therefore, I believe that the right hon. and learned Gentleman's fears in that respect are completely misplaced. I believe that the fears of the editors are misplaced, too. Their anxieties exist. No one could deny that. We shall seek to remove those anxieties. But their fears are misplaced and their proposed remedies are unworkable.
That is why we have to search for remedies which will be more successful and which will work successfully. That is what I am doing, not merely as a member of the Government but also as a defender of freedom in the newspapers and in the trade union movement

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generally—[HON. MEMBERS: "Oh."] Yes, I am in favour of freedom for editors, freedom for journalists and freedom for trade unions, too.
Mr. Wellbeloved: Will my right hon. Friend take note of the fact that when the Monopolies Commission reported on the Westminster Press acquisition of the Kentish Times, that series omitted in any way to report the Monopolies Commission's report in its newspaper columns? Will he confirm that his Department's Conciliation and Arbitration Service is ready, available and, indeed, anxious to offer its services to try to achieve a resolution of the present dispute in the Kentish Times area?
Mr. Foot: I said earlier that I am very eager to see a resolution of the dispute involving the Kentish Times and of the other disputes that are taking place in the newspapers generally. I am very eager to assist in that purpose, if we can. Certainly the CAS would be very eager to assist in the situation where that is desirable and is the best way of going about it.
Sir John Hall: Is the right hon. Gentleman aware that at present editors find themselves unable to accept any material, including statements, sent to them by any person who is not a member of the NUJ, including Members of Parliament? Does not this mean that the use of the Press, which is the best and quickest way by which Members of Parliament can get in touch with their constituents on matters of vital importance to the well-being of those constituents, is now denied to Members of Parliament? Is not this not only very undesirable but an absolutely unnecessary and petty action to take in support of an existing industrial dispute? Will the right hon. Gentleman take that matter into consideration and do what he can to bring the matter to a very speedy end?
Mr. Foot: I should certainly have to see the evidence of the matter to which the hon. Gentleman refers before commenting upon it. I also say to the House, in the interests of geting these newspapers published as quickly as possible, and in the interests of the journalists, that I believe that it is right to keep separate the general question of what provisions are to be made in our legis-
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lation—that is an important matter; I am not depreciating the importance of the discussions at all—and the industrial dispute that is taking place in the newspaper industry and the action which may be taken in connection with that industrial dispute. I believe that if those two steps are muddled together it will make more difficult a solution of the dispute and more difficult the long-term solution on the basis of freedom and what we want to secure.
I believe that the approach that I have made to the industrial dispute is the best one in the interests of all concerned. But, of course, if the House wishes to ask questions about it, it is entitled to do so. One of the reasons that I did not reply to the right hon. Member for Lowestoft on the matter when he raised it earlier is that there was a proposal yesterday to Mr. Speaker for a Private Notice Question on the industrial dispute, which, in the circumstances, Mr. Speaker did not accept. Therefore, I did not think that it was improper for me to reply to the right hon. Gentleman in the way that I did.
But as the point has now been raised. I certainly urge the House to try to keep these two matters separate. That is the way to get the newspapers printed as quickly as possible and the general work in the newspaper industry back to normal. That is what I want to see, and that is what I want to assist in securing.
Several Hon. Members rose—
Mr. Speaker: Order. We have been on this for nearly 20 minutes. We have a very important debate to follow on rates. We have a statement before that. I think that we must move on now.
Mr. Hooson: On a point of order, Mr. Speaker. Hon. Members will have seen detailed reports in the newspapers and heard reports on the radio of the outcome of certain discussions that the Minister of Agriculture, Fisheries and Food has had in Brussels. I do not have access to the usual channels, but I am given to understand that the Minister of Agriculture will not be making a statement today. When discussions of this kind result in certain agreements, according to all the reports, is it not right that the Minister should report to the House as soon as possible and should have done so today?
Mr. Speaker: That is not a matter for the Chair.
Several Hon. Members rose—
Mr. Prior: On a point of order, Mr. Speaker. In view of the answer given by the Secretary of State this afternoon to my Private Notice Question and his desire to keep these two matters separate, may I ask him, through you, Mr. Speaker, whether he will make a statement tomorrow on the industrial dispute so that we may have a proper opportunity of questioning the Minister about it?
Mr. Foot: I should be quite happy to make a statement tomorrow. If I think that it will not assist to make a lengthy statement, I hope that the right hon. Gentleman will understand. However, if he asks me to make a statement tomorrow, I shall be happy to oblige.
Mr. Speaker: Mr. Hastings, point of order.
Mr. Hastings: The point of order I intended to raise is effectively met by what the right hon. Gentleman has just said—if he makes a statement tomorrow.

NORTHERN IRELAND (CONSTITUTIONAL CONVENTION)
The Secretary of State for Northern Ireland (Mr. Merlyn Rees): I will, with permission, Mr. Speaker, make a statement.
The Government are publishing today the second in their series of Discussion Papers, designed to prepare the way for the Northern Ireland Constitutional Convention. This examines how the procedures of the Constitutional Convention might be organised on the basis of experience of conventions in a number of countries. Although it is for me as the Secretary of State for Northern Ireland to lay down the initial standing orders so that the Constitutional Convention can get under way, it will thereafter be for the Convention to order its own affairs. The Discussion Paper provides information on procedural matters which will help it to do so.
The Constitutional Convention was announced in the White Paper published
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in July this year and Parliament subsequently gave statutory authority for it. The way forward now in Northern Ireland is through that Convention. Its purpose is, in the words of the Northern Ireland Act 1974, to consider
"what provision for the government of Northern Ireland is likely to command the most widespread acceptance throughout the community there".
It has no other purpose or rôle. It is not a legislative assembly.
The Convention is an opportunity for the people of Northern Ireland as a whole.
It will be for them to elect their representatives and for those representatives to meet together and to discuss what form Northern Ireland institutions might take. There are many possible patterns, provided that both communities in Northern Ireland are prepared to support and work them.
Elections for the Convention will take place early next year, and I shall aim to give about a month's notice of the actual date. In advance of the election I intend also to announce the name of the chairman of the Convention.
Her Majesty's Government will provide the Constitutional Convention with factual information and other assistance, including a secretariat. There is, however, bound to be undesirable delay if all the arrangements for the Convention have to be made after the elections have been held, and accordingly early appointments will be made to the secretariat on a basis to be confirmed later so that it can undertake some preparatory work. It will, of course, be for the Convention to decide in due course to what use it will put this preparatory work.
After the elections, it will be for the Convention to deliberate about the future government of Northern Ireland with a view to reaching broadly-based agreement and to report its conclusions through me to Parliament, for it is with Parliament that the ultimate decision rests.
A heavy responsibility rests on the people of Northern Ireland and on those they will elect to the Constitutional Convention—the responsibility of reaching agreement with each other. It is this agreement which Northern Ireland needs,

1327
and Parliament will want to be satisfied that any proposals put forward are those
"likely to command the most widespread acceptance throughout the community"
in Northern Ireland. It is on this acceptance that peace and stability in Northern Ireland depends.
Mr. Ian Gilmour: The people of Northern Ireland will want to consider the right hon. Gentleman's Discussion Paper very carefully. We all hope that it will lead to a productive and successful Convention. Certainly at first sight it seems to be a very sensible document.
I hope that the Secretary of State is right in his evident belief that to leave virtually all procedural decisions for the Convention itself to make is likely to make it less bogged down in procedure than if he were to give it rather more definite guidance than he has given.
The right hon. Gentleman says that the elections will take place early next year and that he will give about a month's notice of the date. We all understand the usual undesirability of a very long election campaign, but, as the conditions in Northern Ireland are very unusual indeed, and as there is no Assembly now sitting, will the right hon. Gentleman consider giving a more definite indication of the date rather earlier than he at present intends to do?
Mr. Rees: I am grateful to the right hon. Gentleman for his remarks about the good sense of the document which I hope will be, like the earlier one issued on economic affairs, valuable for those who will be sitting in the Convention. The procedures are my responsibility in the early days and I should have thought that, based on the experience that I am using of the Clerk to the Assembly in Northern Ireland who is widely respected, that will be a good basis on which the Convention can proceed.
As I have indicated, it is important now to get the secretariat under way, because there is a great deal of preparatory work to do and I want to get that going in the weeks ahead. This document is full of information and contains examples of other conventions that at least to some degree can be drawn on, and I think that all of it together is the right approach to the Convention.
1328
I think that it would be wrong to give a precise date now. I remember one of my predecessors having to change the date of an election because, in retrospect, it was found that the date had been given too early. It is clear that the elections will be in the early part of next year, but I think it much better to give the precise date when I reach the point of introducing the order in the House which at the same time will dissolve the Assembly.
Mr. Stallard: Does my right hon. Friend accept that we all welcome his document as a further constructive approach to try to solve the terrible problems of the six counties and that we share his desire to get a permanent solution? Having said that, however, does he accept that certainly amongst the minority community there are grave fears, cynicism, apathy and indifference, that the result of the elections for the Convention is already known and that the outcome of that Convention is already known?
To that extent will not my right hon. Friend consider between now and the elections the introduction of a modified Bill of Rights, to which the present Front Bench and the previous Front Bench have paid lip-service, in order to assuage some of the fears of the minority community in the six counties?
Mr. Rees: I hope that as the plan of this Convention unfolds it will be recognised that it is not an assembly, that it is a place where the people of Northern Ireland can meet together. I see its rôle as being to play some part in assuaging the fears to which my hon. Friend referred, which I accept and which my hon. Friend knows are added to by the murders currently taking place in the Province.
With regard to the question of a Bill of Rights, when I introduce the next and what will be the last discussion paper I think it will be fair to look at some of the aspects of what the previous Government did, which I confess I have not emphasised nearly enough in recent months, with regard to civil rights in the Province. I pay tribute to what they did. It is not possible to have a Bill of Rights in the short run. I hope that the Gardiner Committee report will be out soon.
The cause of the fears in both parts of the Province are the murders which take

1329
place, deep into the night, and the shooting of people on their way to work, principally and indeed only because of their religion. Those are the things that raise the fears in Northern Ireland. Anything which any of us can do to deal with that situation will assist in getting the right atmosphere for the Convention.
Mr. Molyneaux: Will the Secretary of State accept our assurance that we for our part will do all we can to bring about the restoration of law and order in the Province? Will he confirm my impression that the arrangements which he proposes to make in advance of the elections are designed merely to facilitate progress and will be subject to confirmation when the Convention meets? Also would the right hon. Gentleman care to elaborate a little on the phrase "some preparatory work"?
Finally, can the right hon. Gentleman assure us that he will bear in mind the necessity for early elections so that the Convention can get down to its work and fill the political vacuum which exists?
Mr. Rees: I confirm my intention, and as is laid down in the legislation, that it is preparatory work. It is my responsibility to prepare the rules for the early days, and it will be for the representatives in Northern Ireland, maybe in the early days through a steering committee—and I throw out that suggestion now—to get down to the rules of procedure, because I want this to be done with the agreement of the people in Northern Ireland rather than by the Secretary of State of the day.
With regard to the preparatory work, there is the need to take on staff. It is possible to use the staff of the Clerk of the Northern Ireland Assembly, whom I have praised already. There will be a need for clerical and messenger services, typing facilities, the Official Report of the proceedings, experts on a full or part-time basis and—I would need to discuss this far more deeply with those who are eventually elected to the Convention—experts in constitutional law, government and economics.
When the people of Northern Ireland consider their Government, I hope they will look at the economic aspect as well as the constitutional aspect. It is important that we consider it in depth. This is a chance for the people of Northern Ire-
1330
land to do this, and I want to provide every facility for it to be done properly.
Mr. Fitt: The Secretary of State will be aware that in the political vacuum which exists in Northern Ireland there is a mood of deep depression and despair. In the knowledge that many of the personnel who will be contesting the elections are now the elected representatives to the Assembly in Northern Ireland, will the right hon. Gentleman find it possible to call together the present elected representatives in advance of the Convention elections?
Is the right hon. Gentleman aware that there are a number of so-called Loyalist politicians who will not in any circumstances take part in talks at the present time because they believe that as a result of the outcome of the Convention elections they will be in a majority and will be in a position to dictate to the minority? In those circumstances, in a situation where there is death almost every day in Northern Ireland, will the right hon. Gentleman consider calling together the present elected representatives?
Mr. Rees: On the first point about the possible outcome of the elections, I think we had better wait and see what the precise result is. I take the point that in Northern Ireland there is a majority of one community over another. All of us take that into account. I hope that nobody will go to the Convention to dictate from a majority position or to wreck from a minority position. What matters is that the people of Northern Ireland should accept this chance. I believe that everybody in the rest of the United Kingdom will be looking most carefully at the way in which it proceeds.
With regard to the 78 present members of the old Assembly, there is no question of calling the Assembly together. I take the point that my hon. Friend has made. I would certainly be prepared to meet the leaders of the parties in Northern Ireland and talk to them about any matter at all.
Whatever is the result of the elections, when people will be considering the future government of Northern Ireland, I would be very happy to meet the existing leaders of the parties in Northern Ireland because, in my view, they all

1331
genuinely have the needs of their community at heart. I would be prepared to meet them as soon as possible.
Mr. Farr: Will the right hon. Gentleman say something about the rôle of the chairman when this Convention is elected? Will he be a fully participating chairman or will he be guiding discussions on general lines and leaving the parties concerned to carry on the work?
Secondly, is there any chance of getting the siting of the Convention away from the Stormont buildings? Whether or not one is an admirer of the Stormont buildings, both Stormont and the Assembly have met in those buildings. Both those democratic assemblies were ill fated, and it would possibly be more encouraging for the new Convention if it could meet in an entirely new atmosphere, somewhere else, where the views of all the parties concerned in Northern Ireland can be fully heard.
Mr. Rees: On the first point I commend to the hon. Gentleman page 4 of my document where I deal with the question of the chairman, and I hark back to paragraph 53 of the White Paper issued earlier in the year:
"…a person of high standing and impartiality from Northern Ireland."
I will appoint such a person in my judgment.
There has been a great deal of talk about the siting of the Convention. There is history behind Stormont. Of course, there are counter-feelings in all parts of the community, but in my view if people meet together at Stormont where the Assembly met, and come to an agreement in the face of history instead of pushing it aside, it will be a better agreement. It is in the face of history that people have got to make agreement.
Mr. Beith: Does the Secretary of State agree that between now and the elections it is vital to stimulate discussion at every level of the community in Northern Ireland and that the Government should do what they can to assist Churches and various parties to do this? If the Convention cannot come up with a solution which is acceptable to the whole community, there will be no winners, only losers. The alternative to a widely accepted agreement is not the achieve-
1332
Ment of the extremists' demands but a struggle for survival more desperate even than the present struggle.
Mr. Rees: I hope, in the light of the previous discussion paper and another one which I propose to publish in the New Year, to stimulate discussion. I hope that groups of all sorts will discuss this matter, as occurred at the interesting seminar at Coleraine recently.
I think the hon. Gentleman is absolutely right in his views about what will happen if there is no agreement.
Mr. McNamara: Is my right hon. Friend aware that we all welcome the preparatory work which he has done, and in particular the reaffirmation of paragraph 45 of the last White Paper relating to the three principles which this House will accept in reaching a solution? Will my right hon. Friend go further and say that he would welcome an opportunity to meet the present leaders of the Assembly parties and that he will take the initiative in inviting them to discuss the problems facing the Convention, and indeed meeting them together so that there can be some sort of dialogue in an effort to fill the terrible void in Northern Ireland policies at the moment and get some political action taking place to take away the initiatives from the sectarian groups?
Mr. Rees: I am grateful to my hon. Friend for his earlier remarks. In the introduction I have set out the three principles contained in the original White Paper. They are there because they were in the original White Paper. Of course I shall take the initiative, but I should like a response from the leaders of the parties, recognising that since there is to be an election, people have to see who is to be elected, and no one is giving anything away by coming along. They would be coming as elected representatives. We are not looking for sell-outs. I hope that people will come. I will play my part.
Mr. Bradford: Does the Secretary of State accept that if the elected members of this Convention are to be encouraged to come to the same kind of conclusion, which is both constructive and essential, it would be wrong to impose any kind

1333
of limitation, restrictions or pre-requisities at this stage or in a further document about the Convention? When he states that it is not important just to rely on head counts, does he accept that we see very little evidence of a majority acknowledging that the minority might have a better argument?
Mr. Rees: Of the parameters I laid down, I hope that the hon. Member will take one very firmly into account—that the United Kingdom Parliament with 635 Members representing the whole of the United Kingdom bears ultimate responsibility. This is firmly laid down and it is the only basis upon which I or any other Secretary of State has operated or does operate in Northern Ireland. To claim to be loyal to the United Kingdom is to claim also to accept what the United Kingdom Parliament decides.
As for the rest, no one is imposing anything. We are appealing to those in the Province on both sides of the divide —and it is a divided Province—and we are saying, "Find a way of working together". That is what we want. It is difficult in the face of history, but that is the nature of the job.
In view of the White Paper from the United Kingdom Parliament and Government, I hope that until the election is over and people meet together they will not get themselves on to political hooks. It matters that they should be able to discuss together. It is up to the elected representatives, present and future, to face up to the responsibility of history and to meet and decide what is to be done.
Several Hon. Members rose—
Mr. Speaker: Order. I am very sorry but we must move on to the next business.

BALLOT FOR NOTICES OF MOTIONS FOR FRIDAY 6TH DECEMBER
Members successful in the Ballot were:

Sir William Elliott.

Mr. W. Benyon.

Mr. Ian Wrigglesworth.

ORDERS OF THE DAY SUPPLY
[1st ALLOTTED DAY]—considered.
ORDERS OF THE DAY SUPPLY

  RATES
  Motion made, and Question proposed, That this House do now adjourn.—[Mr. Pavitt.]
  Mr. Speaker: Before I call the first hon. Member to speak I have something to say about the length of speeches. We have already lost nearly three quarters of an hour. Yesterday in four hours 23 hon. Members from the back benches spoke. The mathematics of that are easy to work out. I hope that hon. Members will try to follow that example. I remind the House that the more the Front Bench speakers are interrupted and give way the fewer are the chances for back benchers to speak.
  4.13 p.m.
  Mr. Paul Channon: I shall certainly bear your words in mind, Mr. Speaker, and I am sure the House will be relieved to know that.
  Before we get on to the main subject of the debate may I say, since this is the first time I have spoken on topics affecting the environment for two Parliaments, how much pleasure it gives me to return to the topic, and how fortunate I think the Secretary of State and his hon. Friends are in having the Department of Environment to serve them? I have the very highest regard for so many of the advisers who I am sure are serving him as well as they served me and my right hon. and hon. Friends in the past.
  I shall attempt to be as courteous to the right hon. Gentleman personally as he was to me and my colleagues on that previous occasion, although I dare say we shall disagree on questions of policy from time to time, possibly beginning even today.
  The Opposition take the view that the topic of rates is so important that we have chosen to devote our first Supply Day to it in this Parliament. We believe that urgent action is now necessary both in the short term and in the long term.

  1335
  I shall try to say a few words about that subsequently.
  I am sure it will be said more than once from the Government benches during the course of the day, and I accept it, that neither side of the House can pretend to be blameless over the national rates situation. Both sides have a responsibility for the anomalies and history of the rating set-up and the pressures which have now built up to what I believe to be an intolerable point.
  The reason the burden of the rates has become so intolerable is that local taxation, is now being paid on far too narrow a base. Far more people are deriving benefit from local services than are actually paying for them. I believe urgent reform is required, and one of the points I wish to put to the Secretary of State is that the timetable for reform is far too slow. Perhaps he will say how he foresees the work of the Layfield Committee and what the timetable will be. Coupled with that, the Secretary of State's flat-rate domestic relief which he introduced this year has made the rate situation much worse than it was before.
  I concede that it is extraordinarily difficult to work out a system which would be fair to everyone. It would be virtually impossible to do that, but I believe that the right hon. Gentleman's system has thrown up so many anomalies and so many examples of extortionate rises in rates that he ought not to be surprised at the degree of passionate feeling about rates across the country. It is not surprising in view of what has happened. There has been an overall increase in domestic rates of approximately 35 per cent., but that disguises the astonishing variations within that average. I have no wish to do down the Welsh, but in Wales the domestic rate has gone down 5·1 per cent. this year whereas the metropolitan districts have been asked to bear an extra domestic rate increase of 55 per cent. How can anyone justify that state of affairs when it includes so many obvious unfairnesses and anomalies?
  When the Secretary of State produced the rate support grant order he said that there was in it an element of rough justice and that it was almost capricious—I think that was the word he actually used. How
  1336
  right he was. It is certainly rough justice and it is highly capricious.
  However, that is past history, and what now worries people is what is going to happen next year. I hope that is what the Government will be telling us very soon. That is what we must concentrate on. Many hon. and right hon. Members will have seen horrifying reports by local authorities which have been trying to estimate next year's rates. I will not read them all out—I have before me a whole sheaf of reports of local authorities—but I will give a few examples. Essex estimates that the domestic rate will go up 40 per cent., Suffolk 40 per cent., Norfolk 35 per cent., Greenwich 70 per cent., Kent nearly 60 per cent., Bedfordshire 60 per cent., Cornwall 45 per cent., and Hereford and Worcester over 50 per cent. —and that last figure is in addition to a rise this year already of 47 per cent.
  These are just some of the examples. I have seen reports of London authorities estimating increases of as much as 100 per cent. Croydon anticipates an Increase of 70 per cent., Merton 75 per cent., Bromley 100 per cent., Haringey 60 per cent., and the ILEA precept looks like going up 50 per cent. These are terifying figures in view of what has already happened this year.
  The House will have seen today the forecasts and the views expressed in the Daily Express about other examples of what is happening to rates throughout the country. If that is the order of the increase we shall see in the domestic rating system next year, on top of the increases this year, there is the gravest danger that the whole system will break down. There is a danger that people will refuse to pay these enormous increases in rates. I shall not encourage them in that course. As a democratic Conservative, I should oppose people refusing to pay rate increases, just as I know that the Secretary of State, as a democratic Socialist, is against those who do not pay increased rents. That is what he says, and I believe him. Neither I nor any of my hon. Friends will encourage non-payment of increased rates, but it is the responsibility of the Government, who have been in office for 10 months in two Parliaments, to avoid such a situation occurring.
  On top of all the increases I have outlined, and the possible increases in

  1337
  rates this year, a large increase will almost certainly result from the Houghton Report on teachers' salaries. I understand from what the Secretary of State for Education and Science said in the House yesterday and last week that we shall have the report, or at least an interim portion of it, as early as December. Substantial increases for teachers will no doubt result. I hope that they do, but they will have to be paid for, and the House will have to make up its mind who should pay. Is it right that the ratepayer should go on paying as much as 39½ per cent. of the burden of teachers' salaries, or should more be transferred to the Exchequer? Over the past year or so the rating system has become so widely disliked, so unfair in its operation and extortionate in its demands, that there is the strongest case for transferring more of the expenditure from local authorities to the Government.
  Mrs. Elaine Kellet-Bowman: Is my hon. Friend aware that the Chief Education Officer for Lancasire said on Friday that, unless there is more money for councils under the rate support grant, when the Houghton Report is implemented there will be the biggest cut-back in education in our county since the war, and probably since the beginning of the century?
  Mr. Channon: That highlights the extremely serious situation. I am sure that my hon. Friend and other hon. Members will wish to catch the eye of the Chair to expound on it further. My hon. Friend emphasises my point.
  In July the Chancellor of the Exchequer announced a system of interim rate relief that was very much welcomed from the Opposition benches. The House had asked the right hon. Gentleman to introduce such a system, and, unlike some of his colleagues, he had listened to the House. We are grateful for the measures he introduced, although we do not think them adequate.
  But we shall have to vote tonight unless we are assured that necessary reforms in the rating system will come about in both the short term and the long term. We are rather suspicious of the Secretary of State. He is keen on public expenditure and on the rating system. I have a sheaf of quotations from speeches by
  1338
  the right hon. Gentleman extolling the virtues of the rating system and of high public expenditure. Therefore, I am not sanguine about what he will tell us. I am surprised that someone with such a logical mind finds this seventeenth-century property tax still to be the ideal solution.
  Mr. Kenneth Marks: Less than 12 months ago the hon. Gentleman's own Government had an opportunity to change the rating system, and speeches were made in support of the system by Ministers.
  Mr. Channon: I said at the beginning of my speech that both sides of the House had a record on the rating situation that could be fairly criticised. I very much regret that a fundamental reform of the rating system was not undertaken many years ago. But the responsibility now rests upon the Government, and the House will be interested to learn what they propose to do about it.
  In fact, the rating system is now seen not as a tax on property but as a payment for local authority services. There are no fewer than 9 million net earning householders who pay no rates. That is seen to be unfair. I understand that the social contract is the cornerstone of the Government's policy, and I presume that it is the cornerstone of the Department of the Environment's policy just as much as it is of the policy of other sections of the Government.
  Is it not right that there should be an element of social justice for ratepayers as well—not only domestic ratepayers but small shopkeepers, many of whom have had to bear a heavy burden this year and will do so again next year? If it is correct that there should be a rent freeze for council tenants, what about other ratepayers? If it is all right for the tenants, why should not other people get help with their rates? [Interruption.] The hon. Gentleman's party introduced a rent freeze.
  The Minister of State, Department of the Environment (Mr. Denis Howell): Commercial rents.
  Mr. Channon: We introduced that, not the Labour Government.
  There should also be an element of social justice for young couples trying

  1339
  to buy their own house on a mortgage, small shopkeepers, retired couples on small fixed incomes—all those who find the rate burden very heavy. Presumably, they, too, come under the social contract. They are useful people. Why should they not be helped?
  I understand that the Layfield Committee is not to report until the end of next year. Its timetable is too slow. Although I was not present, I understand that in the debate in the Committee considering the General Rate Bill yesterday the Minister speaking on behalf of the Government said that the Layfield Committee was meeting only once a fortnight. I acknowledge that those serving on the committee are busy and responsible men, with wide interests, but the matter is so urgent that I believe that many hon. Members on both sides of the House will ask the Secretary of State to expedite the committee's sittings.
  What will happen when the committee has produced its report? When shall we have legislation? I am told that we are not likely to have it until about 1977–78, and perhaps even 1979. What is the timetable for reform of the rating system?
  The right hon. Gentleman and his Department have decided to postpone domestic rating revaluation from 1978. It is rather curious that they do not like the idea of having revaluation then. Perhaps all sorts of things will happen in 1978, and that is why we are not to have revaluation. I understand that the Under-Secretary, speaking for the Government, said yesterday that he was prepared to have revaluation a year earlier than had been announced. The House should know the exact timetable. If the present system is to continue, it will become even more unfair if there is no revaluation.
  The Chancellor of the Exchequer told us in his Budget Statement a short time ago that local government expenditure had been increasing in recent years by 7 per cent. or 8 per cent. in real terms. That is a figure that I do not think can continue, and I believe that he thinks that it cannot continue.
  Is it the fact that the Government's policy is that local government spending should not rise in real terms by more than the 2·75 per cent. figure the Chancellor gave the public spending as a
  1340
  whole? What will be the proportion of central Government and local government expenditure? If the percentage of real increase that I have mentioned is correct, will the Secretary of State make that clear to us today, and tell us the implications of such an increase on average for ratepayers, and how he proposes to secure that such a target is adhered to by local councils?
  My right hon. Friend the Member for Carshalton (Mr. Carr) has already expressed doubts whether public expenditure as a whole should rise at all in real terms in our present economic circumstances. That goes for that part of public expenditure accounted for by local government, which the Chancellor told us in his Budget speech is now 30 per cent. of total public spending.
  Some better means of bringing local authority spending under more effective control is essential both for the protection of ratepayers and for the effective fighting of inflation. The Government will shortly be introducing a rate support grant order. For the current year the Exchequer rate support grant was intended to meet 60·5 per cent. of the agreed local government spending on the relevant services, leaving aside extra relief eventually provided by the Government which relieved domestic ratepayers of 60 per cent. of any increase in their rates over and above a 20 per cent. increase. What proportion of agreed local government spending is it intended that the rate support grant should account for in 1975–76?
  It is essential that we have a debate this week before final decisions are made so that the views of the House can be made known to the Government before they come forward with the rate support grant order. I ask the right hon. Gentleman: by how much in real terms do the Government expect local government spending to rise next year? What are the means by which the Government will ensure that local government spending does not increase above the target they have set for it?
  What proportion of agreed local government spending in 1975–76 will be met by Exchequer rate support grant and what is to be the domestic rate element for 1975–76? This determines how much special help will go to householders. Is

  1341
  the right hon. Gentleman to continue with his flat-rate system of 13p in the pound for England and 33·5p for Wales or are the Government prepared to accept that my right hon. Friends are right in their proposals for a variable domestic element to take account of differing circumstances in different parts of the country?
  Can the right hon. Gentleman assure us that help will be given to local authorities through an increase order so that no local authority will have to start off with a deficit next year, which will compound the already difficult problems facing them in the rate burden for next year? The aim surely must be to ensure, by domestic rate relief, that no householder faces excessive rate increases, whether he lives in town or country, whether in a Labour-controlled or Conservative-controlled area. No householder should be made to face an excessive rate burden.
  What action do the Government intend to take to prevent excessive rate increases next year? During the last election we put forward positive proposals on the rating system. [Laughter.] If hon. Members think it is a laughing matter they are in for a nasty shock when they get their constituents' reactions.
  Mrs. Renée Short: Tell us what you would have done.
  Mr. Channon: That is what I hope to do. It is very nice to have the hon. Lady here. I hope that she will not walk out during my speech at any rate.
  Mrs. Short: No. I shall stay.
  Mr. Channon: I do not propose to set out in this debate our arguments for the complete abolition of household rates, although it is the Conservative Party's view that in the end that must be done. My purpose today is to urge the Government to take immediate action as from April next. As we suggested to the country, and I suggest again to the House, the first step is to transfer from the rates to the Exchequer the costs of teachers' salaries and more of the costs of the police and fire services. Last year the total cost of teachers' salaries was £1,400 million. Local authorities had to find 40 per cent. If action were taken along
  1342
  the lines I suggest there would be a worthwhile saving to all ratepayers, whether householders or commercial, small traders, shopkeepers or industrialists. It is absolutely essential that the Government do this if we are to avoid the breakdown of the whole domestic rating system.
  Mrs. Lena Jeger: If this transfer of responsibility for teachers' salaries takes place, does the hon. Gentleman envisage that local authorities would still retain control over the number of teachers they employ and the distribution and allocation of those teachers?
  Mr. Channon: Yes. The Exchequer should take over the responsibility of paying teachers' salaries up to an agreed quota. If local authorities want to employ more teachers, that is a matter for them. Certainly local authorities should, in the last resort, keep their freedom. The local education authority should run its own affairs. It is unlikely that there should be any real increase in public expenditure of any kind at present. There are many desirable things in Government and local government we should like to see which cannot be afforded at the moment.
  Before estimating the increase in real expenditure the Government have to tell us what is the rate of inflation. Is it 8·4 per cent. still, or 8·73 per cent., as it was a couple of days ago, or, irritatingly enough, has it now leapt to 26 per cent. with the publication of this month's retail price index? What is the rate of inflation on which the Government are making their estimate before deciding upon the real increase in public expenditure? What will be the increase in expenditure on gas, electricity, rail fares, coal, and all the other things which will rise in price in a short time?
  During the General Election campaign Labour Ministers seemed to regard as inflationary the suggestion that we should transfer teachers' salaries to Government expenditure. The fact is that it would not add one penny piece to public spending as a whole. What it would do is share out the burden more fairly among the taxpayers as a whole, instead of it being placed only on those taxpayers who are ratepayers.

  1343
  I recognise that if this were to be done means would have to be found of ensuring that local authorities passed on the benefit to ratepayers. We must find the mechanism for ensuring that local government spending is geared to people's ability to pay. It is true that local authority spending has increased a great deal faster than public spending as a whole. That is perhaps because it is so much more labour-intensive. But is that not where the social contract comes in?
  As we understand it, and if our understandings are wrong the Government will no doubt enlighten us, the social contract means that, except for special cases, wage increases should not go beyond price increases. All of us agree that teachers are a special case following the Houghton Report. Local government spending can surely be taken care of if the Government accept the proposal to transfer the cost of teachers' salaries. If that were to be done and the social contract adhered to, it would be possible to agree that local authority spending in 1975–76 should not exceed in real terms the level of the previous year, or at any rate, if it does exceed it, should do so by only a small margin.
  Of course, an important part of this would be the requirement that the major trade unions would have to set an example in wage demands, making sure that they kept those demands within the social contract, because if one section of workers received an excessive increase in wages, it would be difficult to persuade local government employees to keep down their wage and salary demands to reasonable proportions. That is surely what the social contract is about.
  Is it not right to consider that the correct approach is to gear local government spending, until we get over our present economic crisis, to increases in the retail price index? More effective control of this spending is important for domestic ratepayers, shopkeepers and small traders. The Budget has done little, if anything, for them, yet the small businessmen have seen taxes being put up and rates rising. He will soon have to pay much higher contributions if he is self-employed and there will be a further increase in national insurance contributions for employers.
  1344
  Those are heavy burdens, and the Government know that the rate of bankruptcies among small businesses is, unfortunately, running at a high level. It will run at an even higher level next year unless something is done to help with rates. I know that businessmen are allowed to set their rates off against taxation but this by no means gets over the problem facing the small trader. On 12th November the Chancellor gave some relief to companies over the question of stocks. He said that he could not deal with the whole range of companies and his immediate relief would be confined to those who had a closing stock of at least £25,000. That means that some small businesses will receive no relief from the stock allowance which the right hon. Gentleman is proposing, at any rate for this year, although they may next year. That makes it all the more necessary that there should be some element of rating relief for the small shopkeeper facing these burdens.
  Both parties when in Government are guilty of calling for the utmost economy while at the same time sending out circulars to local authorities telling them to take quick action on something and spend a great deal more money on something else. We must all accept, until we get over our present economic difficulties, that a number of desirable improvements cannot take place. There is no difference between the two sides of the House, or at least between responsible Members, on this issue. That makes it all the more important for us to get our priorities right.
  That is why, at a time when rate burdens are so high and Government expenditure needs careful watching, it is utterly intolerable that the Government should press ahead with ludicrous, unnecessary and expensive schemes such as the whole of their land municipalisation proposal. [HON. MEMBERS: "The Channel Tunnel."] Hon Gentlemen opposite can fight their own battles about that.
  Local authorities have not got the skilled staff necessary to carry it out. The cost of the scheme has been estimated by some observers to be as high as £500 million a year. Even if that is a massive over-estimate and it is as low as £50 million a year, that is still too much. It is no good the Government saying that in seven to eight years the money will be coming in to local councils from such a

  1345
  scheme. The money is needed now, not in seven to eight years. That is one of the many reasons why it is ridiculous.
  It is also ridiculous that local authorities should waste hundreds of millions of pounds of the taxpayers' and ratepayers' money on the municipalisation of rented property to serve the party political dogmas of right hon. and hon. Gentlemen opposite.
  Then we come to the Housing, Rents and Subsidies Bill, about which the right hon. Gentleman and I will have happy memories—or memories, at any rate. Is it right to revert to a system which allowed those living in council houses to pay lower rents and to have those rents subsidised frequently by people worse off than themselves living in other accommodation? I should have thought that that system was out of date. I am sure that everyone would like to see generous rebates for poor families who cannot afford rents, but it is ridiculous that ratepayers should subsidise those who do not need help.
  It is a wrong use of public money to press ahead with turning all State secondary schools into comprehensive schools at massive cost. It is also a waste of money for the Government to press ahead now with the abolition of private beds in National Health Service hospitals at the expense of £30 million a year.
  These are economies which can be made by either central Government or local government. Other economies could also be made. We have all heard stories—no doubt sometimes exaggerated—of local authorities with swollen staffs and all the other things which are alleged. What happened to the inquiries which were set in hand by my right hon. Friend the Member for Crosby (Mr. Page) regarding staffing in local authorities? What investigation is the Department carrying out at present?
  I know that the right hon. Gentleman will seek to argue that the reorganisation of local government is to blame. The truth is that all parties were agreed on the need to reform local government. [Interruption.] If the present Government's reform had taken place instead of ours, there would still have been the same temptation on the newly created local authorities to indulge in a measure of
  1346
  empire building in this way. The problem —it would have remained whichever reform went through—is to ensure that this tendency is resisted. I hope that the Government are keeping a careful watch on this matter. This is more a matter of feeling. This is not what is causing the high rise in rates, but it is the kind of thing that irritates people, although I accept that it is the detail rather than the major factors which is causing increases in rates.
  The last action taken by the right hon. Gentleman only a week or two ago has, in my view, although quantitatively not crucial, qualitatively made the situation worse. It is scandalous that ratepayers may be asked to pay extra money to bail out councillors who refuse to carry out their legal duties under the Housing Finance Act not through error, as the Secretary of State said—because they would not be surcharged if they had made an error—but because they deliberately chose to take the course of action that they took, did not use reasonable grounds for delay, were encouraged to do so by some hon. Gentlemen, and thereby broke the law. [HON. MEMBERS: "Right hon. Gentlemen."] No, certainly not this right hon. Gentleman.
  Mrs. Kellett-Bowman: The Leader of the House.
  Mr. Channon: That is a different matter.
  Ratepayers will deeply resent having to pay for the mistakes of councillors who deliberately break the law knowing the consequences if they do so. I suggest that that is a matter that the House should reject when the time comes.
  The Social contract covers the big battalions. We are told by hon. Gentlemen opposite that it covers many people —no doubt all the hospital workers and the railwaymen. We shall see whether it covers the miners. If it is to mean anything, I hope it will be a contract also with the ratepayer, the self-employed, and everyone who has to face the terrible burden of inflation.
  In the short term immediate action is required to take away some of the rate burden. We suggest that it should be done through the removal of teachers' salaries from the rates to the Government. That is the short-term action that is

  1347
  pressing this year, this autumn, and should be carried out without delay.
  In the long term we believe that the only solution is the complete abolition of domestic rating and its replacement by a much fairer system of taxation based on people's ability to pay. That is what we shall be asking for, however long this Parliament lasts, and when we are returned to office that is what we shall implement.
  4.45 p.m.
  The Secretary of State for the Environment (Mr. Anthony Crosland): I congratulate the hon. Member for Southend, West (Mr. Channon) on his return to the House after what I understand has been a particularly painful and unpleasant bout of illness. I am glad to see him fully recovered.
  I also congratulate the hon. Gentleman on what I take, and hope, to be promotion to a new Front Bench position. Certainly he has sloughed off both the memories and the responsibilities of Government quickly enough, because a large part of his speech had nothing to do with the coming rate support grant negotiations. I hope that the hon. Gentleman stays there for a little time, if only because we have become irredeemably confused by the restless instability of Opposition Front Bench spokesmen.
  In recent weeks the hon. Members for Hornsey (Mr. Rossi), Chelsea (Mr. Scott), Shipley (Mr. Fox), Honiton (Mr. Emery) and Bury St. Edmunds (Mr. Griffiths) have popped up and down, now on the Front Bench, now on the back bench. They move from back to Front and Front to back and Front to Front. There must be some system of weekly promotion and demotion in the new democratic Conservative Party. We used to hear a great deal about the Tory magic circle. It seems that we now have the Tory magic roundabout. Please may we have some stability of deployment in the interests of national sanity before we all become totally giddy and cross-eyed?
  Today, much as we like to see the hon. Member for Southend, West, we had looked forward expectantly to hearing from the right hon. Member for Finchley (Mrs. Thatcher). After all, it was she who, just before the election, made the ex cathedra announcement on the aboli-
  1348
  tion of the rating system. It was the right hon. Lady, not the hon. Gentleman, who was in the Tory Cabinet which bequeathed to us the present frightful rating crisis. Indeed, as Secretary of State for Education and Science, the right hon. Lady was exceptionally closely involved in rate suport grant matters, and her views would have commanded instant and respectful attention in the Cabinet. Therefore, we would have liked to ask her one or two gentle, courteous questions this afternoon.
  For example, does the right hon. Lady suffer from chronic amnesia about what happened in the Cabinet of which she was so elegant an adornment? Was she in fact pressing, day in, day out, with persistent doggedness for the abolition of rates, only to be overruled by our old friends, those two stolid opponents of change, the right hon. Member for Worcester (Mr. Walker) and the right hon. and learned Member for Hexham (Mr. Rippon)? If the latter was the case, she has turned the tables on them now because she appears to be in the leadership race and they are not.
  The trouble is that we shall never know the truth. The right hon. Lady has flown away and upwards, leaving as a souvenir to her meteoric passage only a characteristically charming photograph on the front page of the Local Government Chronicle which the ungallant editor chose to caption,
  "The Unacceptable Face of the Conservative Party."
  That is very unchivalrous.
  This debate could hardly be more topical. It takes place right in the middle of the crucial final stages of the negotiations with the local authority associations over the size and distribution of next year's rate support grant. Discussions have already continued for some months. The Government's formal proposals have now been put to the associations, and there was a first discussion of them at official level only yesterday. I shall have my final meeting with the association members—the so-called statutory meeting —next Tuesday, 26th November.
  The right hon. Gentleman the Member for Crosby (Mr. Page) has sometimes referred to the day of the statutory meeting as the local authority Budget Day. That is an apt description. Thousands of millions of pounds of public money are

  1349
  at stake. The outcome, like the outcome of a Budget proper, will affect the lives of almost all our citizens. For different reasons, preparations for the local government budget have also to be carried out in conditions of strict confidentiality. This is not because great fortunes will be made, or national security threatened, if details of the settlement leak out in advance. The reasons are less spectacular than that.
  There is, first, the obvious and general point that no party to any negotiation—be he employer, trade unionist or anyone else—can ever announce his final position in advance. The progress of negotiation could be seriously hampered if one side or the other were to take up a position in public at the outset. The parties would soon become entrenched in their positions, and it would then require a huge amount of time and effort for them to extricate themselves.
  Secondly, apart from this general point, the rate support grant negotiations present particular difficulties. All local authorities are affected by their outcome. But each authority has its own special problems and needs and is not slow to suggest that they deserve priority over all other authorities' special problems and needs. Authorities are represented in the negotiations by their national associations. The association have to strike a balance between the often conflicting interests of their individual members. That requires some immensely difficult judgments which are bound to leave some proportion of their membership dissatisfied. The pressures operating on the associations are enormous. They would become intolerable if the final stages of the negotiations were to be carried out in a blaze of publicity.
  If Conservative hon. Members press the case of the peculiarly deserving local authorities that all of us have in our own constituencies I shall not be able to satisfy them today even if the proposals which I have put to the associations happen to be beneficial to the authorities in question. Likewise—and I am sure the hon. Member for Southend, West will not be surprised to hear this—I shall not be able to tell the House today how much grant I am proposing to give for next year or what increase I am ready to make in this year's grant total.
  1350
  Ex-Environment Ministers like the hon. Member for Southend, West will not be surprised to hear that never before—at least, not since rate support grant was introduced—have we had a major rates debate in the middle of the statutory negotiations. I do not complain of this in the slightest. Nor would I dream of impugning, as some cynical observers have done, the motives of the Opposition in initiating this debate. As honourable men and women, are they not bound by the pledge of the right hon. Lady the Member for Finchley to abolish the rating system? That was a pledge which shone out, in the otherwise murky light of a hard-fought election campaign, as a shining example of non-party-political moral purity along with the even purer 9½ per cent.
  Of course, I accept that it is solely the Opposition's genuine concern with the plight of ratepayers which has prompted them to initiate this debate now. Nothing, I am absolutely certain, could be further from their minds than any desire to make political capital out of the rating situation. After all, the next election is some time away. I am only astonished that they should not have tabled a specific motion. Given the previous record of the Conservative Party in these matters, I suppose that the Shadow Cabinet found it impossible to draft a form of words that would not have been torn to shreds by my right hon. and hon. Friends.
  Let me make it clear beyond any shadow of doubt that I and my right hon and hon. Friends are as deeply concerned as anyone on the Opposition benches at the magnitude of the crisis—crisis is not too strong a word—affecting local authorities' finances and the appalling consequences it would have for next year's rates if nothing were done to help. Both as a Minister and as an MP whose constituents faced a 40 per cent rate increase this year—less, I know, than in many other areas—I have been profoundly conscious of the problems arising from the situation which I inherited in March.
  Lest we forget, I must remind the House of the factors which contributed to this situation. First, whatever the hon. Member for Southend, West may say, local authorities were subjected to a form of local government reorganisation which

  1351
  we in Opposition predicted would be expensive and extravagant, and which has proved so. It is no good saying that the kind of reorganisation we wanted on a unitary basis would have been as expensive. Secondly, they were required to include in their rate an element over which they had no control whatsoever—namely, the water charges set by that equally extravagant creation, the new regional water organisation.
  Next, the new local authorities were told by the right hon. and learned Gentleman the Member for Hexham to keep their eyes tightly shut against the realities of the oil crisis and world-wide inflation, and to rate for only a 9 per cent. increase in pay and prices over the year. The last straw was the promise which the right hon. and learned Gentleman made to the House on their behalf that
  "… the national average increase …"—
  that is the increase in domestic rates—
  "should accordingly be about 3 per cent."—[OFFICIAL REPORT, 22nd January 1974; Vol. 867, c. 1469.]
  Even taken singly, none of these demands was realistic. In combination, they added up to a nightmarish fantasy.
  Something had to give. Domestic rates did not go up by 3 per cent.; they went up by an average of 30 per cent.—or they would have done had it not been for the special relief scheme which we introduced in July.
  Mr. Michael Latham: As the right hon. Gentleman is explaining why the rates are going up, will he say something about the order that he introduced in March which discriminated against rural areas? Does he accept that the July measures were specifically necessary to undo that discrimination?
  Mr. Crosland: I am talking, I hope reasonably clearly, about the national total increase in the rate bill. The March order had no effect on the national rate bill. It affected only the distribution. Tragically, many local authority treasurers heeded the then Government's call to rate for only 9 per cent. inflation. That is one of the deepest reasons for our trouble today.
  The new authorities—many of which, to add to their problems, inherited little or nothing in the way of balances from
  1352
  their predecessors—have been faced with a yawning chasm between their income and expenditure and, as we all know from our own areas, have been forced into emergency bridging work by way of massive short-term borrowing. As with all emergency measures, a temporary respite has been gained. But the fundamental problem is untouched. This year's debts have to be repaid, with interest, out of next year's income. That is what lies behind the grim warnings which we are hearing from Treasurers every day.
  I turn to the wider question on which the hon. Member for Southend, West spent much of his time, and reasonably so—namely, the future of the rating system. The hon. Gentleman said that our timetable for the consideration of this matter was too slow. I shall have something to say about timetables.
  In recent years there has been a growing revolt amongst ratepayers against the entire rating system. It is now widely regarded as inequitable between individuals, unjust between households and harsh—even oppressive—for ratepayers in general. The Conservative Government of 1970–74 responded to this discontent with all the sense of urgency of an ageing snail. It was not that they never considered the matter. They considered it and considered it and considered it and considered it.
  First, they published their July 1971 Green Paper on the future of local government finance. It was an impressive intellectual exercise. One by one, every conceivable major change in the rating system was subjected to an elegant analysis. One by one every suggestion of possible lifelines for the unfortunate ratepayer was dismissed and pooh-poohed. The right hon. Lady the member for Finchley was a member of the Cabinet at the time.
  Then they settled down to consider the Green Paper—
  Mr. Graham Page: All that the Green Paper did was to set out the pros and cons of each item which could raise money for rates. It did not dismiss any item but gave a lead to important consultation and discussion.
  Mr. Crosland: Very well. Let us consider what happened after the Green Paper was published.

  1353
  The Government—I pay them tribute for this—settled down to consider the Green Paper. They considered it and considered it and considered it and considered it. So deep was their meditation on their own writings that it took two solid years to complete. Meanwhile the loval government world chafed with impatience. Then the Conservative Government, of which the right hon. Member for Finchley and the right hon. Member for Crosby were both eminent Members, produced their consultation paper on local government finance. It was supposed to "finalise this matter". It represented the full flowering of two years of Conservative Government thinking on rates. On reading the consultation paper we discovered what finalisation meant. The paper was so devoid of positive thought that, in retrospect, it made even the Green Paper seem like a masterpiece of decisive and daring innovation.
  We in opposition tried during this period to express and articulate the ratepayers' discontent. We did not commit ourselves to abolishing the rating system at a stroke, but we continuously urged a more positive attitude on the Government. My hon. Friend the Member for Birmingham, Small Heath (Mr. Howell) and others of my colleagues asked "Why should we not at least examine the idea of a local income tax?" The Government of which the right hon. Lady the Member for Finchley was a member said "No". We asked "Why should we not at least consider a local sales tax?" The Government of which the right hon. Lady the Member for Finchley was a member said "No". We asked about a tourist tax, about lotteries, and about petrol duty, and the Government of which the right hon. Lady the Member for Finchley was a member said "No", "No", and "No" again.
  Mr. Graham Page: The Government of which the right hon. Gentleman is a member have said "No" to lotteries.
  Mr. Crosland: I shall mention the question of the Lotteries Bill in a moment.
  "No reform", said the right hon. and learned Member for Hexham. In the Second Reading debate on the Local Government Bll on 12th November last
  1354
  year, he said of our amendment, which criticised the Government for not providing additional sources of local finance:
  "I reject that criticism completely, in so far as the Government do not think that this is the right time to introduce new local taxes."
  He went on to say:
  "The system of rates, the local authorities' own tax, is well tried, well known and easy and cheap to administer. These are major advantages …".—[OFFICIAL REPORT, 12th November 1973; Vol. 863, c. 36.]
  The right hon. Member for Crosby went a good deal further. "Not even a Royal Commission or an inquiry", he said. I quote his words:
  "it would be both disastrous and defeatist"—
  this is typical of the strong language he often uses in the House—
  "to put the whole matter back into the melting pot".
  So I wish him well with his Lotteries Bill.
  The right hon. Gentleman went still further. He said that there would be no transfer of expenditure, such as teachers' salaries, to the Exchequer. I quote him:
  "We should hesitate"—
  the right hon. Gentleman is a good hesitater, or at least he was when he was a Minister—
  "before removing such functions from local government or removing the expense of those functions and, therefore, the discretion operated by local government in the expenditure of money."—[OFFICIAL REPORT, 12th November 1973; Vol. 863, c. 148–50.]
  So the Tory Government were rigidly, adamantly and insistently opposed to any suggestion for relieving the poor ratepayer. It required the General Election to put the Conservatives on the road to Damascus, and the prospect of a second election—when they were in deep political trouble—to complete their conversion. Overnight—on 28th October, to be precise—the "No, no, no, no's" of the Conservatives' years in office were replaced by the right hon. Lady's "Yes, yes, yes's" of despairing opposition.
  We have more respect for principle and constituency. In opposition we showed, unlike the right hon. Member for Crosby, that we understood the strong and natural feelings of the ratepayer, the feelings dismissed so contemptuously by Environment Ministers in the Conservative Government. We also showed that

  1355
  we were aware of the difficulties, and that is why in government we have set up the Layfield inquiry—independent, high-powered and representative of all shades of opinion and experience. If Layfield comes up with a viable alternative to rates, no one will be more delighted than I shall be. The hon. Member for Southend, West asked about the timetable. The inquiry is hard at work. As anyone familiar with committees will know, it is meeting once a fortnight because it is taking written evidence before it takes oral evidence.
  But we are not prepared to be stampeded into instant solutions or to stand on our heads in an opportunist attempt to buy popularity. Just as we refused to compete in an electoral Dutch auction over 9½ per cent. mortgages, so also have we refused to promise the abolition of the rates unless and until we have a proven alternative. We cannot and will not suddenly announce a botched and hurried solution to this problem which, as hon. Members opposite know perfectly well—I suspect they have a certain amount of sympathy with what I am saying—has baffled successive Governments for so many years.
  In passing, may I say that I wish that the hon. Member for Southend, West had clarified the Opposition's current attitude to the Layfield inquiry. In June the right hon. Lady the Member for Finchley welcomed the fact that we were setting up an inquiry, but only a few weeks later—and the hon. Member for Southend, West repeated this today—she made her electioneering announcement which was designed to pre-empt altogether the central question before such an inquiry. The hon. Gentleman has pre-empted it again today. I remind the House, incidentally, that the inquiry has on it two very respected and well known Conservative local government figures in Dame Kathleen Ollerenshaw and Lord Ridley.
  I hope that now that the pressure of electioneering is off the hon. Member who winds up for the Opposition will withdraw on behalf of his party all the conflicting pledges made by his predecessors so that Layfield can have a clear and unprejudiced run over the ground.
  I return to the immediate crisis facing us. Any measure to restrict an intolerable
  1356
  rate increase next year can succeed, as the hon. Member for Southend, West clearly said, only if local government plays its part. That means, as my right hon. Friend the Chancellor of the Exchequer told the House in his Budget Statement, that we must ask local authorities to keep the growth in their services to the minimum compatible with inescapable commitments. This is no sudden slamming on of the brakes of the sort which Mr. Anthony Barber attempted so crudely last December. I have for months past taken every opportunity to stress to local government how grim were the prospects for next year's growth in spending. Decisions will have to be taken of a sort which none of us will welcome. But we shall give local authorities ample guidance in good time on what is required.
  I repeat that I greatly welcome the attention which the House is now giving to the question of local government finance. Up to about two years ago our debates on local government finance and the rate support grant were attended by about five Members on average on each side of the House. I am delighted to see the change. I have explained—and the hon. Member for Southend, West understands this perfectly well, as does his right hon. Friend—why the singular timing of this debate prevents us from being as forthcoming on detail as we would like. But it will not prevent us from paying the closest attention to all that is said today.
  I cannot promise either local authorities or ratepayers an easy time next year. I have no doubt that I shall be a highly unpopular man next spring. I can make only one pledge—that I approach these problems with a far greater sense of urgency than the Conservative Party showed in government and a far greater sense of responsibility than it has shown in opposition.
  5.10 p.m.
  Mr. David Madel: The Secretary of State told us at the start of his speech that it was a rather unusual time of year to hold a debate on rates because he was right in the middle of intricate negotiations for next year's rate support grant system. He also said that there were enormous pressures on local authorities, and that it would be wrong for those discussions to be published at this time.

  1357
  The right hon. Gentleman will naturally expect me and those of my hon. Friends who catch Mr. Speaker's eye to say something about the special problems of our own particular counties.
  The Secretary of State also spoke about reform of the rating system and went through some of the suggestions in the July 1971 Green Paper. I assume that he will leave answers to questions on these matters to his right hon. Friend to deal with in the concluding speech for the Government. I have no doubt that during the debate many questions will arise on the rate support grant, and on interim changes to the system which would help ratepayers from next April.
  The Secretary of State pointed out that he came into office on 1st March at a very difficult time so far as negotiations on the rate support grant were concerned. The General Election campaign of three and a half weeks in February meant that a number of meetings between the then Secretary of State for the Environment, my right hon. and learned Friend the Member for Hexham (Mr. Rippon), and county treasurers had to be postponed. Many people wondered where my right hon. and learned Friend had left off and the present Secretary of State had taken over, because no actual rates had been fixed in the middle of the election campaign, and, therefore, the Secretary of State had to move very quickly in fixing the domestic rate support element. He described his 13p in the pound as an element of rough justice which benefited some authorities and sharply discriminated against others. But since then the Government have got a fuller picture of the system. They have gone deeper into how the rating system is affecting people and they have been fully cognizant about the huge rate increases this year and about what people have had to pay over and above what they paid last year.
  The Secretary of State referred to our debates on the reform of the rating system. He should have been a little fairer on this. In the debate in February 1973, initiated by the hon. Member for Derby, North (Mr. Whitehead), both sides of the House strongly pressed my right hon. Friend the Member for Crosby (Mr. Page) to change the rating system.
  1358
  One should say that there is a limit to the amount of party political juice that can be squeezed out of the question of reform of the rating system. We must differentiate and remember that there are a number of councillors who are independents in local elections but change into other political animals for General Elections. It would be wrong to say that the argument for reform of the rating system has been confined to one particular party. It has been an across-the-board movement in this country.
  We have only to look at the composition of the rate protest action groups that come into play from March or April. These groups are composed of people from all political parties. It is therefore wrong to assume that one political party has a monopoly in pressing for a change in the rating system. We have merely to read the debates in the last Parliament to see that there was pressure on this matter from back benchers on both sides of the House.
  The Secretary of State said that there was hostility and suspicion over the number of staffs local authorities were employing, and the Chancellor of the Exchequer mentioned this in his Budget speech. We ought to remember that had the Redcliffe-Maud report been adopted larger units would have come into play, and there is no certainty that even more staff would not have been employed.
  Another important matter to consider is the protest over the change made by the Conservative Government in local government in 1972. Much of the protest was contained in phrases such as "You are taking away local democracy. We are going to feel more remote from the place where the decisions are made." Yet the Redcliffe-Maud proposals would have made people feel even more remote than they are.
  This is not the time to talk about that, but we in the House must grasp the nettle of whether local councillors should be full time and whether, in view of the great difficulties in administering local councils, we ought or ought not to pay councillors for their work. As I say, this is not the time to talk about this in detail, but anxiety and suspicion over local government is very much tied up with the size of the new authorities that came into being in 1972. Even bigger authorities

  1359
  would have come into being had the Redcliffe-Maude proposals been adopted completely.
  The Secretary of State mentioned the Green Paper. That is all we have to go on when we talk in our speeches about how we might change the rating system. Paragraph 11 on page 2 of the Green Paper goes to the heart of the matter. Referring to rates it states:
  "But they have defects too. Their effect on individual ratepayers in some cases bears little relationship to ability to pay. The yield does not have the buoyancy required to keep pace with the growth of services."
  Paragraph 17 on page 3 of the Green Paper states:
  "there are three—and only three—possible ways of filling the gap referred to in paragraph 14: either property occupiers must pay more, or the national taxpayer must bear an increasing proportion of local expenditure; or new and buoyant sources of local revenue must be found."
  It is little wonder that the overwhelming majority of people accept that probably the national taxpayer will have to bear an increasing proportion of local expenditure, because on the whole national taxes tend to be based on a person's ability to pay. I do not say that that is totally the case, but on the whole it tends to be so. Therefore, we are moving towards closer consideration of some form of local income tax. For example, as the Secretary of State said, the 1971 Green Paper carefully examined some of the arguments and possibilities for changing the rating system and then proceeded to turn them down. Two of the possibilities that have gone down the drain were a motor fuel duty and a motor vehicle duty. Those revenue raisers would now clash with a centrally directed energy policy.
  A local sales tax was also mentioned in the Green Paper. The argument in 1971 and 1972 was that the buoyancy of the tax would help. I should have thought that in view of the possible low growth in expenditure the buoyancy argument has been knocked on the head.
  There is also the possibility of local value added tax to consider. But on that I suggest that, first, we do not yet have enough experience of national VAT, and, secondly, the extra work for retailers would be unacceptable. Thirdly, it looks
  1360
  as if the Chancellor of the Exchequer is moving towards a three-tier VAT system. We have already moved towards a two-tier system, with the VAT rate on petrol. I should have thought that the local sales tax idea had also gone down the drain.
  The Green Paper mentions on page 21 local employment tax, but knocks it down—now the argument is even more effective—when it states that a local employment tax could well conflict with the Government's regional policy, which is clearly more vital now in view of a possible rise in unemployment.
  Thus, the Layfield Committee could save itself a lot of work and heart-searching, because basically the argument is coming down to some form of local income tax. Page 15 of the Green Paper, referring to a local income tax, shows that a number of countries comparable with ours, so far as industrialisation is concerned—the United States, Canada. Germany and Italy—have a form of local income tax. Such a tax would be imperfect to begin with and would take time to develop, but I am convinced that it would be a fairer system of raising money locally. This is probably what we are moving towards.
  I always feel that when a Government publish a Green Paper those who have done the research work are on the whole pretty well prepared to implement all or some of the suggestions that have been put into the Green Paper after consultation with Ministers. I do not think that the argument that more time is needed to consider a new type of tax system holds much water. We have already looked into the matter. There must have been an enormous amount of research carried out by the Government Department concerned. I hope that the Layfield Committee will take this up and that we shall start moving towards a fairer system.
  I turn now to the question of sewerage charges. The Minister of State, Department of the Environment wrote to me on 7th June stating:
  "It is intended that these interim arrangements should come to an end quickly although I regret that no change and no retrospective adjustment will be practicable this year. I understand that the water authorities are already setting in hand arrangements with the local authorities in their respective areas to

  1361
  identify as soon as possible those properties which are not served by main sewers."
  I hope that in the concluding speech for the Government something will be said about this and about whether those interim measures, which were mightily unpopular, are coming to an end.
  It is inevitable that hon. Members should spend a few moments on their own county's position. Bedfordshire's rate bill this year is £53·28 million. The estimate for next year is that rates and rate support grant will be £76·80 million. The policy and resource committee of Bedfordshire County Council had this to say:
  "The estimate is tentative and necessarily based upon a number of assumptions. The full extent of inflation, even in 1974–75, is not yet known; nor is the outcome of pay negotiations including that for teachers."
  I endorse what my hon. Friend the Member for Southend, West (Mr. Channon) said about transferring teachers' salaries to the Exchequer. The time has come to change the London allowance into a South-East allowance. If counties like Bedfordshire are to have extensive London overspill they must pay teachers the rates that are paid in London. But that cannot be done with the present rating system. That is another reason which may come out of the Houghton Committee for transferring teachers' salaries from local authorities to the Exchequer from next April. That would provide an element of relief.
  I will say a few words about the needs element, which has been gone into carefully in the rate support grant negotiations. On page 40 in paragraph 4.17 of the Green Paper there is a list of needs which includes total population, numbers of children under five years of age and persons over 65. Missing from that list is "rapid rise in population". The needs element seems to preclude that being taken into account, and counties such as Bedfordshire which have a rapidly rising population are not benefiting properly from the rate support system as it operates at present.
  I realise that the Secretary of State cannot go into full detail at this stage, but I hope that in the negotiations proper account is being taken of the counties which are doing a great deal to help London with its housing problems,
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  employment and industrial expansion. I hope that from next April the Government will come forward with some form of interim relief. If they do not do that they will be heading for a big storm from the ratepayers.
  The Secretary of State said that he would listen carefully to everything that was said in this debate. I hope that at least on teachers' salaries and on the sewerage rate row he will be able to give ratepayers some relief from next April. It is vitally needed.
  5.22 p.m.
  Mr. Michael Stewart: Local government finance was a vexed question before the country ran into its present economic difficulties, and it will be a vexed question after those difficulties have been overcome. What I have to say is related not to our immediate crisis but to the longer-term problems of local government finance. I hope and believe that within a few years' time the country will have got out of its present difficulties and that we shall then be in a position, as industrial States usually are, to expect the total wealth of the country to increase steadily, though not spectacularly, year after year.
  A community that is getting richer has both the power and the duty to increase those services such as education, housing, welfare and amenity which characterise a civilised society. A poor, primitive community can make only the most minimal provision for the old, the unfortunate and the sick. As society gets richer it should be prepared to spend not only more absolutely but a bigger proportion of its total wealth on those services. That is what being civilised means.
  Our problem has been that the services which characterise a civilised society are services which we have required local authorities to play a great part and we have equipped them with a system of raising the money for those services which is inadequate and unfair. As many of those services involve the purchase of land, local authorities have been particularly vulnerable to the effects of land profiteering, that land profiteering which the Conservative Party has continually championed and kept alive and which, to judge from the Opposition Front Bench speech today, it proposes still to

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  keep alive. That makes nonsense of a great deal of the Conservative Party's attempt to pose as the ratepayers' friend.
  If we do not make radical changes we shall get into the position where the country as whole can afford improved services but the local authorities which are required to improve them cannot afford to do so without imposing an intolerable burden on some of their poorer ratepayers. To get out of that tangle I suggest three principles.
  The first principle is that the proportion of total local government expenditure which is borne by the Exchequer must be increased. That can be done either by transferring wholly to the Exchequer some services that are now shared between the Exchequer and the rates, or by increasing the proportion which the rate support grant bears to total local government expenditure. Which of those ways is chosen—in the end we shall probably choose a mixture of the two—is no great matter. It is a comparatively simple administrative decision to make. What matters is that a bigger proportion of total local government expenditure should come from the Exchequer.
  My second principle is a corrective of the first. One does not want so to extend Exchequer help that there is no revenue-raising problem for the local councillors. It is the local councillors' job to decide to what extent they will develop the services that I have described within the limits set by the minimum which the law requires and the maximum which the law will allow. It is for the local councillors to decide within those limits how far and how fast to go. It is for them to determine the form and organisation of the services. It is for them to determine, each in his own locality according to its needs, the priorities between those services.
  There should, therefore, be a sizeable chunk of local expenditure left to be met by local levies, and it is the duty and responsibility of local councillors to tell the citizens how much they will charge them and why. If local councillors are not left with that measure of duty and power, the independence of local authorities will be reduced to zero and it will not be worth anyone's while to be a local councillor.
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  My third principle is concerned with how to make the local levy—the money raised locally by decision of local councils for local services—proportionate to ability to pay. It is notorious that the rating system has got more and more out of gear with ability to pay. I venture to give two examples which put that beyond doubt.
  A household which consists solely of husband and wife does not need as large a house as does a household in which there are children. Usually, although not always, such a small household lives in a smaller house and pays lower rates. A household with children may well be in greater need and not so capable of contributing to local services as is the smaller household where there are no children.
  Then, let us take two households each consisting of four persons, living in comparable dwellings and paying the same rates. In one household two out of the four may be very young children and the care of them makes it impossible for the wife to go out and earn an income. There is only one income coming into that household. In the other household there may be young people who are earning and there may be three or even four incomes coming into the household. Yet both households will be paying the same rates.
  These are but two of many anomalies that one could quote. I believe that the only remedy is the one spelt out by the hon. Member for Bedfordshire, South (Mr. Madel), namely, local income tax. The right hon. Member for Southend, West (Mr. Channon) pointed out some of these anomalies, but could not quite get the words "local income tax" out of his mouth. It was left to his hon. Friend the Member for Bedfordshire, South to spell out the matter plainly.
  So far as local income tax would affect domestic ratepayers, let me outline what it would involve. When a taxpayer pays income tax the size of his income is made known to the tax collector. After the requisite allowances and deductions have been made, the taxpayer is told that he must pay the Exchequer so many pence in the pound of taxable income. I suggest that he should also be required to pay so many pence in the pound to his local council. The number of extra pence would be determined by local

  1365
  councillors, and for that they would be responsible to the electorate. The taxpayer would not pay the extra number of pence in addition to the rates he now pays, but would pay them instead of that sum. The result would be that some households would pay more, but they would be households which could reasonably afford to pay more. Other households would pay less than they are paying now, but those would be the ones which are hit by the anomalies in the present rating system.
  Mr. John Tomlinson: Does my right hon. Friend agree that what he suggests would be grossly discriminatory against rural areas, such as my own, where the per capita cost of services inevitably is much higher? We should still have a major problem about distribution of resources from central Government to local government.
  Mr. Stewart: The point made by my hon. Friend about rural areas will be more properly dealt with when we consider the amount of Government contribution. I am saying that the help from the Government should be greater, and I accept that its distribution needs close consideration. Nevertheless, there should be some element of local levy, otherwise there would be no local independence at all. I suggest that a local levy, whatever it is, would be better raised in the form of a local income tax than by a levy based on the size and appearance of the house in which one lives.
  We have been told time and again that a local income tax is administratively impossible. That might have been true years ago, but with modern methods of calculation, recording and correlation of the facts we should be able to get away from the axiom that a local income tax is impossible. I put forward these three principles as a part contribution towards finding a system of local government finance which will be fair as between one citizen and another and, equally important, will enable us to provide services worthy of a civilised society.
  5.33 p.m.
  Mr. Stephen Ross: I am grateful to you, Mr. Speaker, for having called me so early in the debate. I think I caught Mr. Deputy's Speaker's eye a little too early on a recent occasion,
  1366
  although I was grateful for having been called.
  In making a contribution to this debate on the subject of rates, which is certain to be free-ranging, I shall try to be constructive. However, I feel that I must refer—I exclude the right hon. Member for Southend, West (Mr. Channon), who in his speech tried to be constructive—to some comments made by the former Conservative Government. In the run-up to the last General Election, and indeed during the campaign, there was a great deal of manoeuvring by the Conservative Party for its own political advantage.
  On the question of rating reform there were 5,000 posters in my constituency calling on people to vote for my Conservative opponent because he aimed at reforming the rating system. A spontaneous uprising by angry ratepayers in many parts of the country occurred in the early part of this summer and, in my view, it was perfectly justified. That was seized upon by the Opposition, desperately trying to placate many of their traditional supporters by making some extravagant claims and promises during the election.
  I should like to correct the Secretary of State for the Environment on one point. I understand that the official line taken by the right hon. Member for Finchley (Mrs. Thatcher) was to phase out domestic rating over a five-year period. However, many Conservative candidates, including my opponent, told electors that the Conservative Opposition sought to abolish the entire system. I am unaware of the proposals which the Opposition intend to put in place of the present system. I do not know whether they envisage a form of local income tax. That suggestion has been made by two hon. Members so far in the debate.
  It is quite proper for a political party to change its mind, but it would have come with better grace from Conservative Front Bench spokesmen—although at least the spokesman on this occasion, the right hon. Member for Southend, West, admitted faults in the past—to have admitted with proper humility that they had got things wrong in the past and to apologise for not having taken action when they were in office.

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  The Conservatives published a Green Paper in July 1971 in which many alternative ideas were ventilated and the arguments for and against were clearly stated. It is interesting to comment that the transferring of the full cost of teachers' salaries to the Exchequer, which the Liberal Party has been suggesting for five years, was dismissed on the ground that it would sharply divorce financial from managerial responsibility at local level. It might be argued "will that not still be the case?" It might be said that perhaps 10 per cent. of that charge should remain a local charge. I do not think the Liberal Party would disagree with that view, and indeed I doubt whether any other hon. Member would disagree with it.
  The outcome of the situation, however, was a consultation paper issued by the Department of the Environment in June 1973. It contained some interesting conclusions in paragraph 15:
  "… no substitute offering major advantages of a similar kind emerged from the earlier consultations and comments on the Green Paper. For these reasons the Government"—
  the then Conservative Government—
  "propose that rates should remain the principal source of local revenue."
  The document stated in paragraph 2:
  "The Government believe that the public would not welcome, at the present time of price and pay restrictions, the introduction of additional new taxes locally … which would … involve complex administration and collection."
  The Layfield Committee in its deliberations has great problems to consider. One of the difficulties is that life has become so complex that the introduction of a new tax and a new method of collection is bound to be unpopular with the public, even though they may be calling for abolition of the present rating system.
  All these considerations were examined 18 months ago. Since then the Local Government Act was passed in February 1974. Therefore, it ill behoves the Conservative Party now to make criticisms to which we were subjected almost continuously since the Conservatives woke up at the end of last May.
  Everybody is aware of the parlous situation in local government finance. No doubt this is principally due to inflation, but reorganisation has been costly—much greater than the figure of £54 million quoted in today's Daily Express. The
  1368
  advantages of local government reorganization—and there have been advantages—have been lost on the general public. I should like to express a word of sympathy to the officers and councillors who serve on local authorities and have to bear the brunt of a great deal of criticism, much of it ill-informed. Too often I have been obliged to sit in this Chamber listening to Conservative spokesmen unfairly passing the buck for what, after all, is largely their own creation, and it has been passed on to the backs of these unfortunate people. No wonder they are disillusioned—and there is disillusionment in local government service and amongst local councillors. New officers were appointed with high hopes and new councillors were elected with good intentions. They are becoming increasingly frustrated by the chronic lack of finance and the increasing cynicism of ratepayers.
  In the months prior to taking over the reins of office they toiled long hours—they could not claim expenses in those days—implementing the Bains Report and the favoured system of corporate management. Appointments were made and salaries were fixed according to a preordained scale from a joint negotiating body. We had a scale fulcrum fixed according to population figures, and we appointed officers above or below the scale of the fulcrum. Now they are being told by the very people who helped to set out these guidelines that in most cases they are over-staffed and over-paid. If we are to regain their loyalty and restore their enthusiasm, I suggest that we must be more circumspect, in the criticisms that we level against them.
  Governments are far too prone to introduce legislation which places more and more liabilities on these bodies without providing the finance necessary for them to carry out their duties adequately. Planning control has passed to the districts, but they have not the qualified staff necessary to do the job adequately. Heaven knows how they will cope if the Government's intentions with regard to building land are passed in their present form. Area health authorities suddenly find themselves having to finance a free chiropody service to old-age pensioners without any thought having been given to where they are expected to find the money. We know that countryside officers have to be appointed by local

  1369
  authorities. There are numerous other examples.
  Responsibility for the present-day acute problems of local authorities lies here in this House, and we should admit that that is so. How are they supposed to implement the recommendations of the Houghton Committee on teachers' pay, due soon, if the system remains as it is? The Government must make some announcement about this matter now, and I hope to hear some crumbs of comfort by the Minister later tonight. Failure to act on this will completely sink the finances of our luckless education authorities.
  We are told that the Layfield Committee is now sitting, albeit only once a fortnight, and that it will report by the end of 1975 or earlier if possible. In the meantime, the present rating system is to remain. I do not think that that is an unreasonable attitude for the Government to take. But if we are to get through the next 12 months without a complete breakdown in local government and a ratepayers' revolt—and there will be one—there are a number of steps that the Government must take, and their intentions should be made clear as soon as possible.
  I accept that there is a very important discussion going on at the moment. I believe that there is to be a meeting with county treasurers and other officials at the end of this month. I accept that the Government are not in a position to announce their full intentions today.
  Mr. Percy Grieve: I accept what the hon. Gentleman says about the grave danger facing us of a breakdown in local government finance next year and of a wholesale revolt by ratepayers. In that frivolous speech by the Secretary of State, did the hon. Gentleman hear one word of the action which the Government intend to take to obviate such a situation?
  Mr. Ross: I am prepared to give the Government the benefit of the doubt, and I hope that my party does the same. I cannot believe that they are not conscious of the feeling among ratepayers. I cannot believe that they will allow the situation to remain as it is. I understand that the Secretary of State saw some 50 deputations during the last Session of
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  Parliament and said that that was enough. He must be aware of the situation.
  I wish to make one or two suggestions about what I believe should happen. First, the Government should state their intentions about rate support grant as soon as possible. This must be as generous as can be devised and as equitable as can be contrived. All hon. Members will talk of their own constituencies, so I must have my own word. In my authority the distribution of the needs element last year gave us a very poor deal. The Minister came to see us at the beginning of August. I hope that we got the message over to him. We have a rising school population and a rising old-age population. As the hon. Member for Bedfordshire. South (Mr. Madel) pointed out, such a situation works very much against an authority in the needs element computation. By a mathematical accident, we came off worst of all the counties. By comparison, Berkshire received a 28 per cent. higher grant towards expenditure than that of the Isle of Wight. I hope that the Secretary of State will at least put that one right.
  To give an example of the way that inflation has hit us, although we are a small authority, we left £1 million in our balances which we thought would be more than adequate. Instead, by the end of the financial year our deficit is likely to exceed £500,000. So we have gone right from one side to the other.
  Second, local authorities should be assured that they will receive a fair increase order to cover inflation in the current financial year, and this should be made known without delay. There is a suspicion that this may not be coming. Seven or eight years ago it was suddenly withdrawn. We hope that an increase order on the present rate support grant will be made, and made known soon.
  Third, the Chancellor of the Exchequer should announce his intention of continuing his July concessions to domestic ratepayers into the next financial year and of extending his measures to cover the smaller commercial premises. I agree very much with the hon. Member for Southend, West. Small shopkeepers have suffered badly. Surely it is possible to devise a gross value below which small commercial premises could be included

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  in the rate relief which the Chancellor of the Exchequer gave last Session.
  Fourth, the Government should give their blessing and a speedy passage to the Local Revenue Bill, which I trust that the right hon. Member for Crosby (Mr. Graham Page), having won second place in the ballot, will now reintroduce—
  Mr. Graham Page indicated assent.
  Mr. Ross: I am glad to see that the right hon. Gentleman agrees with me. I could not understand the opposition to it in the last Session, though I believe that it was their Lordships who finally pulled the string on it. I trust that it will be given a speedy passage. In times of stringency, surely we can still be allowed to improve our cultural and leisure activities. It would give local authorities a source of finance which they could control themselves.
  Fifth, guidance should be given to authorities about those areas in which they should work closer together. Just because further reform is unthinkable so soon after the last upheaval, there is no reason why staff and premises should not be shared and proposed new buildings shelved. I still think that there is a great deal to be said for the old all-purpose authority. The first moves towards such amalgamations, where they make sense, could be made now. There are one or two places where it makes sense, and my own constituency is one.
  Having heard the figures for Hereford and Worcester, which apparently went up to 45 per cent. last year and 50 per cent. is threatened this year, I am fairly certain that Hereford would rather like to get its identity back again. One way might be the all-purpose authority. We hear about schemes for all-purpose buildings. There is a new county building being erected near Worcester. It so happens that I know that part of the country rather well. Surely these things should be looked at again and the Government's ideas made known on whether they would allow all-purpose authorities in England and Wales, such as the old county boroughs used to be. After all, this sort of thing has been allowed in Scotland. It surely makes sense, where
  1372
  the public would welcome it and the rate would be financed, so to do.
  Sixth, I want the Government to give local authorities greater freedom to raise finance from simple forms of local tax. A very simple one on the Isle of Wight would be a landing charge. If people came over and paid their way, we should be delighted.
  Of course there will have to be cuts in present local authority services, although it is difficult to know where. Speaking as a former chairman of a policy and resources committee, I know that the last time that we fixed our rates we made substantial cuts. Now, apparently, local authorities will have to do more and the exercise will be even more difficult.
  But there should not be cuts in housing expenditure. I welcomed the Secretary of State's conversion in his speech at Brighton the other day to the idea of low-cost housing designs and mobile homes. This is an area in which money could be better spent. The need is certainly immediate. One could consider imposing a double rate on second homes. This has been suggested elsewhere, and it could he introduced now purely as a temporary measure.
  Nor, I hope, will there be cuts in social services or further education, particularly evening classes, which have gone to the wall in past times of stringency. Highways and lighting seem obvious targets. I cannot understand why there have not been cuts in lighting already, as there have been in Belgium and France. When one leaves this House at one o'clock in the morning, one sees lights blazing everywhere. Also, some of our ideas on work study seem to have gone badly wrong. There seem to be more people with stopwatches than men at the grass roots doing the job.
  I make the final plea that at this late hour the Government should reconsider their proposals on development land. Why not impose a variable tax based on the capital value of land already passed for development—not land which does not already have planning consent or has not been scheduled for building? In any case, the tax should not initially be at the penal rate of 80 per cent. With that kind of rate, no one will do anything. Such a tax might start at 30 per cent.,

  1373
  rising to 70 per cent. after a year if work had not started and finally to 100 per cent., which I believe the Government have in mind. If such a tax were levied and collected by the planning authority, it would not only bring in much-needed additional finance locally but restore a free market in building land and get some houses built into the bargain.
  5.53 p.m.
  Mr. James Boyden: The hon. Member for the Isle of Wight (Mr. Ross) has analysed for me the reasons for the political opportunism of the Conservative Party. I need not elaborate, except to say that I do not think that in the election the Conservative Party quite realised the damage it was doing to local government by throwing out the political bribe of abolishing the rates.
  Anyone with the slightest connection with local government knows how unpopular the rates are, and it is the easiest thing in the world to say that they will be abolished. It did not affect my constituents, who are politically quite shrewd. They see through that sort of thing. But one of the aftermaths of the Tories' political bribe is that they have damaged local government and made it difficult to put forward some of the ideas that my right hon. Friend the Member for Fulham (Mr. Stewart) was putting forward about the essential values of local government and the need to support it.
  I agree with the hon. Member for the Isle of Wight about the need to support the officers of local government and the councillors in their big efforts to improve the quality of our life. To knock local government, to offer a cheap election bribe about it, is permanently damaging. The Conservatives will have a good deal to do to recover from this.
  My local authorities—Durham County Council and the district councils—have suffered badly from the local changes. We reckon that local government reorganisation by the Conservative Party has cost the ratepayers about 20 per cent. I would suggest that in his calculations of immediate relief the Secretary of State should make some allowance for the cost of the Tory reorganisation. In our case, it is 20 per cent. pretty well down the drain. My local authorities ask for this very strongly.
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  I was sent a telegram for this debate by a council in my area, the Sedgefield District Council, which reads:
  "Council greatly concerned at the prospect of a 40 per cent. rate increase for 1975–76 with reduction in service standards. Request that Minister's attention be drawn to this in debate on rates today."
  The council is as much concerned with a deterioration in the services as with the costs.
  My right hon. Friend the Member for Fulham and several other hon. Members have advocated a local income tax. We certainly need extra sources of local revenue, but there are two great objections to a local income tax levied locally. One is that it is an extravagant administrative proposal. Raising the revenue would mean much more administration when it could be done perfectly well by the central Government at minimal cost. But, much more seriously for an area like Durham, a low income area, more would have to be raised on our rates than in the rich areas of the South and South-East, so it would be socially regressive.
  I do not think that rates will go. The British people are surprisingly conservative. They may howl about the rates but they have great difficulty in thinking of alternatives. My plea tonight, therefore, is for additional sources of local government revenue, to make the rates part of the income but to see that the additional sources protect the actual services. I am very concerned that in the present crisis atmosphere and for the reasons that I have given there will be an assault on local government services which will spoil the civilising effects of those services for my constituents. That is just as important as holding down the rates.
  I am therefore all in favour of a surcharge on income tax, surtax and corporation tax levied by central Government and passed to the local authorities as a cushion against the strain on the rates that inflation brings with it. This would give them a strong element of money guaranteed for their services and it would be fairly buoyant, because the amount of income tax rises with inflation. It would be a strong source of income to supplement the rates.
  I agree with the hon. Member for the Isle of Wight about the importance also of moving teachers' salaries from local government, but it is curious that the

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  Tory Party, which has always claimed to be the strongest about local independence and the independence of the universities and has said that who pays the piper calls the tune, has now concluded that one can get rid of the biggest item of local expenditure without the central Government calling the tune.
  But I think that it is worth the cost. I have never thought that the argument about the piper and the tune is quite as strong as the Tory Party says. It would be a big relief, which could be done quickly, and could be done under the shadow of the Houghton Report, to make a considerable difference to local rates.
  In Durham about one-quarter of the net revenue expenditure is on teachers' salaries. Under the current rating arrangements transferring that cost to the central Government would save the county of Durham £6½ million and produce much more flexible possibilities for the rates. In addition to the rate support grant and the support from the centre more notice should be taken of the history of an area and its present amount of industrial activity. Durham still has too much unemployment and, of course, it suffers from a legacy of unemployment which will take years to overcome. In making the new computations for the future, I ask the Secretary of State to bear in mind that this should be an important element for consideration.
  I also say to the Secretary of State—this is in line with what the Chancellor of the Exchequer is thinking at present—that as the nationalised industries are now to make charges to eliminate national subsidies, the Secretary of State should look at this matter from the point of view of local rates. The nationalised industries do not, on the whole, pay adequate rates as compared with those paid by private industry. One of my district council suffers from this particularly badly because it has a large railway workshop which has had far lower rates levied on it over the years than would have been levied if it had been a private enterprise. While we are clearing up the situation with regard to nationalised industries, I hope that we can apply the principle to the rating situation as well.
  Mr. Hugh Rossi: The hon. Gentleman will be aware that the General
  1376
  Rate Bill which his Government have introduced, which postpones rating revaluation, affects directly the question of valuation of premises occupied by a nationalised industry. If he and those who think like him support his Government in this matter, they will be making things much more difficult for local authorities such as his.
  Mr. Boyden: I do not follow the reasoning as to why it will make it more difficult for local authorities, but this has been a long-standing grievance in the district council of Shildon, which is now in the Sedgefield district. I do not think that the employees in the nationalised industries will have any objection to this proposal, and I hope that it will come about.
  In seeking new sources of revenue, what is also required is an attempt to find more adequate support for capital expenditure. Again I have a specific problem, as have other hon. Members, in relation to the new towns. Originally, and still, the main financial support for the new towns comes from the central Government, but district councils and county councils have to provide, almost by the force of circumstances, more new and expensive facilities in the new towns than they do in the older areas.
  This has been a very difficult local political matter for me over the years. To some extent it has been resolved now because I have the new town in my constituency, so I am responsible for the new town and the older communities. But there should be a very considerable extra clement of support from the centre for district councils and the county council for the provision of services for the new towns. For one thing, if it were done in this way it would help to soften the antagonism which exists in the older communities, who say "Here is a new town getting everything, and we are going to the bottom of the queue for schools and so on."
  Here are ways in which the Government should apply their minds immediately to the question of teachers' salaries and, in the long term—for the consideration of the Layfield Committee—a considerable increase for local government revenue from an income tax and surtax surcharge. In addition to that, there

  1377
  should be more capital provision for local authorities for the new towns.
  I want to criticise two possible ways of raising revenue which would very much penalise areas of low income tax and low wages and which are not particularly attractive or on the main routes of the tourists.
  A local sales tax or an addition to VAT, for example, would be most unsatisfactory in my area. I imagine that the turnover with that sort of thing would be far inferior to that of other places which are much better off anyway. Again, it would add an unnecessary and a particularly heavy administrative cost. A local car tax would have the same effect. We have fewer cars in County Durham than there are in places like London and the South. Many of the remedies which have been suggested for increasing local government revenue would adversely affect areas of low income and relatively low industrial activity.
  In conclusion, I hope that when the Secretary of State makes his decision on the rate support figure and the contribution to local government immediately, he will not make the mistake which my constituents consider he made on the last occasion. I see that my right hon. Friend the Member for Jarrow (Mr. Fernyhough) agrees with me. Durham was very upset by what happened. The Durham people are very loyal to their local government. I am sure they will agree with what I have been saying about local government services being important for a good life.
  Like everyone else, Durham people do not like paying rates, but they are prepared to pay rates if they think they are fair. That is one of the reasons why they criticised bitterly what the Tories did during the General Election campaign in tossing the abolition of rates into the political arena. It is one of the reasons why I ask that the Secretary of State will take note of Durham's claim when he comes to the rate support grant.
  6.6 p.m.
  Mr. Kenneth Warren: I should like to concentrate on the question of the attitude of mind of local authorities and the present Government towards people's ability to pay their rates. Most of the debate, apart from the very valuable contribution of my hon. Friend
  1378
  the Member for Southend, West (Mr. Channon), has been more about what we ought to do in the future, after some commission has sat, than about the very pressing problems which face ratepayers now.
  I am very concerned, as was the right hon. Member for Fulham (Mr. Stewart), about people's ability to pay their rates, because more and more people are now being caught between the rent and rates relief boundary and their ability to pay. Many people who have saved throughout their lives are far worse off than those who are getting subsidies. In fact, it has become a burden on people to have to declare that they have savings, because they are automatically required to pay rates which they can ill afford.
  What I am wondering is why no assessment is being carried out, or is proposed to be carried out, of people's ability to pay their rates. I take an example which concerns a vast area of southern England and the problem of the rate levied by the Southern Water Authority. The fact that many other hon. Members throughout the south of the country have been in correspondence and consultation with that authority identifies one of our problems.
  My constituency of Hastings, like every constituency throughout that authority's area, has suffered substantial rises in rates. In the case of Hastings there has been a 60 per cent. price rise—for the same water, coming through the same pipes and from the same sources, and going to the same people. When it comes to looking forward to what the authority proposes to do in the next financial year, however, and the objectives which it has already prepared for discussion we find that it is talking about a vast increase in capital expenditure without any study of what people can afford to pay.
  Indeed, when I managed to get the Price Commission to look at the whole of the rate levy being called for by the Southern Water Authority last May, I thought that at last something would happen. But nothing has happened since May. I hope that the Government will be able to give an indication why the Price Commission should take six months to study such a simple and straightforward problem without giving a reply.

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  Another problem which faces many parts of the country, particularly the South, where there are a lot of retired people, is the question of transport by bus and by rail. Under the Transport Act 1968 local authorities have the right to provide travel concessions on buses, but those concessions are the responsibility of the ratepayer. However, some boroughs are richer than others. Unfortunately many boroughs along the South Coast which have large retired populations are much poorer than others. This is an area which is generally believed to be very prosperous. But the people over the age of 65 in my constituency of Hastings number 21,000. The council can afford only just over £7,000 in subsidies for those people to have reduced bus fares, whereas another council nearby, a much richer council—no one would deny it the chance to pay more money if it can—is able to subsidise travel to the tune of £20,000 but has only half the number of pensioners.
  Given the narrow tax base which many local authorities have, it is unfair to penalise them for taking retired people when richer places such as London, which assist their pensioners by making substantial subsidies for transport, are not called upon to make any contribution towards providing services for those who have emigrated from London to the South Coast.
  Exactly the same is true in relation to rail transport. The Southern Region of British Railways states:
  "It is not possible to extend concessionary fares without some element of financial support from the local authority."
  I know how well read you are, Mr. Speaker, and I am sure you have heard of the book "Catch 22". This is precisely a "Catch 22" situation, because we are told that councils are the only body which can pay with money they have not got. We cannot wait too long for action. We have already waited a long time hoping to hear proposals from the Government. All we have been promised is more talk.
  That attitude is at the heart of any control of the rates which people are asked to pay. The Association of County Councils, in the brief which it issued for the Second Reading of the General Rate Bill on 7th November, referred to the
  1380
  question of revaluation and expressed worry
  "about the softening of the blow to the ratepayer, because this is of great assistance to local authorities."
  My hon. and learned Friend the Member for Solihull (Mr. Grieve) referred to a ratepayers' revolt. He is right. People simply cannot afford to pay, yet they are confronted by this attitude on the part of the Association of County Councils.
  It is interesting to see how the opinion of one council about the forward budgeting of another is exemplified by the opinion of the East Sussex County Council about the Southern Water Authority. The county council states:
  "They are contemplating a rate of growth in their expenditure far in excess of anything that local authorities may be thinking of."
  The areas I have just discussed represent a picture which is to be seen right across the country.
  The last aspect I wish to concern myself with is that of housing. Hastings just cannot afford to house the 6,700 people who are on the council waiting list, yet there is a Government-backed scheme to bring 15,000 Londoners into the town. We cannot house our own people in our own inns. This is a shocking state of affairs.
  There must be changes in the rate support grant and in the system of allocation of funds. We cannot wait for the report of the Layfield Inquiry. The Secretary of State said that he was profoundly conscious of the situation he inherited. I should like to know what he is prepared to do other than simply talk about the problem. We have had no promise of effective action or real help for the ratepayers. Perhaps the right hon. Gentleman has an easier constituency to deal with than I have. Perhaps he has never had to witness the tears of ratepayers who do not know how they are going to pay their rates and who see their savings disappearing and their whole way of life being torn apart. This should be the Secretary of State's concern now, not after the result of some inquiry has been made known. If by April of next year the right hon. Gentleman has not come to the House with help on the scale and of the kind which is required, we shall welcome his resignation.
  6.14 p.m.
  Mr. E. Fernyhough: It will never be easy to resolve the problems which the House is discussing. There are two ways of paying for the services which the community demands. They can be paid for either partly through the rates and partly through a Government subvention, as they are now, or they can be paid for completely by the Government.
  After all the years during which this problem has been discussed it was not until after the February election that Conservatives put their cards on the table. They had never said, until the right hon. Member for Crosby (Mr. Page) said it after the election, that they would put the cost of all local services on income tax. Immediately after the February election, Tory Members almost without exception pretended that the great demands which ratepayers got in March and April were the consequence of the election of a Socialist Government.
  Mr. Michael Morris: I remind the right hon. Member that it was the action of the Secretary of State in reducing, without consultation with any local authority, the domestic element of the rate support grant by 5p at a stroke which caused the anger throughout the country.
  Mr. Fernyhough: If the hon. Member, who has been in the House for about six months, is so ignorant that he does not know that the rate demands were fixed before the election, he should go back and consult his local authorities, and they will enlighten him. I repeat that every Conservative Member jumped onto the bandwagon.
  The hon. Member for Hastings (Mr. Warren) asked whether we on this side had had to face angry people. I faced 1,500 people in the Odeon Cinema near my constituency on a Sunday afternoon. I told them, first, that I did not accept responsibility, because at that time the Labour Government had been in power for only six weeks. We inherited the situation. We did not create it. I said to them "Tell me which of the services you will agree to the council cutting. Do you want the education service cut, the home help service cut, help for the aged cut, help for the handicapped cut, free
  1382
  bus travel cut? If you aggravated, annoyed ratepayers will tell me which of the extravagant services that your council is providing could be cut, I will agree that your rates can be cut."
  Every hon. Member knows that when a constituent comes to his surgery seeking assistance he does not say, "I am not taking up your case, because if I do it will mean an increasing demand on the local authority". He says "I will see what I can do about your case". The hon. Member concerned knows full well that if the council yields to his representations it will result in an increase in the rates.
  If the Secretary of State for the Environment had yielded to each request made to him during Question Time, even in this short Parliament, the rates would have to go up even higher.
  Dr. Keith Hampson: I accept the right hon. Gentleman's last point. Does he accept in return that the Secretary of State's action on taking office of establishing a flat 13p rate thereby produced an increase on average of 10 per cent. to 15 per cent. and in some instances much more? I think that Solihull is a case in point, where it produced a 36 per cent. increase to make the total increase 92 per cent.
  Mr. Fernyhough: Any man in the position of my right hon. Friend the Secretary of State who made a decision which automatically forced up the rates of his own constituents must be a very fair-minded and just man, because he knew full well the anger he would have to face. If he was prepared to make a decision which hurt those whom he represents but which gave relief to some of those to whom he is not answerable, I think he is a man to be admired, not a man to be unduly criticised.
  In all my public life I have tried to explain to my constituents that I could easily reduce their rates. I have said "Any fool can promise to reduce your rates. All he has to do is turn off the street lighting, close the parks, not sweep the streets, not empty the dustbins and not send the children to school until they are seven and make them leave at 11 years of age." Of course any fool can reduce the rates, but we are living in a

  1383
  very articulate society which is constantly collectively making greater demands.
  We can do one of two things. We can tell people bluntly, as I do when I open a community centre or a health centre, "Remember, it has to be paid for". We must tell people that their collective demands have to be paid for, or we are political cowards. I do not pretend that when I addressed my irate constituents it was the quietest meeting that I have ever had, I am not pretending that I left satisfied customers there, but I can say that my majority went up by over 2,000 at the last election. It did not, therefore, have an undue effect politically, although that afternoon it might have been supposed that everybody in my constituency was opposed to me. I spelt it out to them honestly and fairly that if we, as a civilised people, were constantly making ever greater collective demands on the local council, whether in relation to the mentally or physically handicapped, the pensioners or whatever section of society it might be, we must accept that those improved and better services could be made available only through increased rates or taxes.
  If tomorrow we were to adopt the suggestion of the right hon. Member for Crosby (Mr. Page) of putting all the rates on to income tax, the small meeting to which I have referred of 1,500 irate ratepayers would be nothing compared with the inevitable meeting of irate taxpayers. They would lobby just as effectively until we made it clear to all of them that they could pay less provided they had less. I am not prepared to tell my constituents that we should make cuts in the rates because I know what the result would be. If a child does not receive the educational facilities that he should have, we can never make them up to him later. If a cripple or a maimed or aged person does not have the necessary services when he needs them, we cannot make them up to him in later years.
  I believe, despite the burden which it places on the ratepayers, that in respect of local government services our country is the most civilised in the world. There is no other country which has roads, street lighting and libraries equal to ours and which looks after its sick and maimed as we do. No other country in the world
  1384
  provides water and sewerage systems as we do throughout the entire nation. These are measures of our civilisation. We have to pay for these things, and whether we pay directly or indirectly I do not mind. [Interruption.] All I hope is that the hon. Member for Daventry (Mr. Jones), with his record in land deals, does not plead on behalf of the poor ratepayer. He has made enough money out of land deals with local authorities to relieve many poor ratepayers, so I do not want any interruptions from him.
  As you know, Mr. Deputy Speaker, I have been in this House a fairly long time, and when Tory Members get obstreperous I can exercise all the patience in the world, because as long as I am on my feet I shall either have silence or other hon. Members will be delayed in saying their little party pieces.
  A lot of humbug has been deliberately created by the Conservatives in particular since they lost power in February. They have tried to transfer the guilt. I am determined that they shall not do it. I shall spell out to my people, as I hope my colleagues will spell out to their constituents, where the blame really lies. I hope that my right hon. Friend will eventually find a solution to this problem which no other man in his position has yet been able to do.
  6.25 p.m.
  Mr. John MacGregor: Like other speakers this afternoon, I welcome the opportunity to speak in the debate in advance of the announcement of the rate support grant for next year. This subject impinges on Members of Parliament as well as on local authorities, and I only wish that we could have had the debate a little earlier before the Government make up their mind.
  I hope that the hon. Member for Jarrow (Mr. Fernyhough) will forgive me if I do not follow him too far in his argument. May I simply say to him that I do not think that this debate is about realism in local authority expenditure or about cutting local authority expenditure. What concerns us, as clearly concerns the Chancellor of the Exchequer, is that some local authority expenditure is getting out of hand and ratepayers are finding it almost impossible to bear the burden.

  1385
  The Secretary of State made great play of the fact that the Conservative Opposition had undergone a conversion on the Road to Damascus. There are many good precedents for such conversions. Although various studies in previous years have shown the virtues of the rating system as against other systems which we are now exploring, the fact is that in the last two years the increase in rates and in inflation has been such that it has become much more urgent to consider the whole system again.
  The Secretary of State also made great play of the slow movement and the delay in rate reform by the previous Conservative administration. But the setting up of an inquiry, as he has done, is a classic method of delay. It means that three years on from 1971 the Secretary of State is still moving slowly. The facts and the arguments about the alternatives are now well known. We may not agree on the alternatives, as has been made clear in this debate. But what is now needed is decision by the Government. The Government could easily spend the next six months sorting out their own mind on the various alternatives and then bring proposals before us so that we can judge upon them. My fear is that with the Layfield inquiry we shall have lengthy debates before the Government make up their mind and that we shall not see rating reform for many years to come. Therefore, the accusation of delay applies just as much to the present Government as to any other.
  I welcome this debate also because it is clear from my postbag and from ratepayers' meetings that it is not merely a question of big revolts next year. There will he a growing revolt from now on. There is a real risk of some ratepayers not paying, not least because they see militancy and the exercise of power outside the law paying off elsewhere and they are prepared to adopt the same attitude. I do not support them in that view, but I find that one of the most difficult arguments to meet is that if some have been able through retrospective legislation to get away with it, why should not the ratepayers try as well?
  It is understandable that people should take that view, partly because of the steepness of the rise in rates with many ratepayers having to face up to 100 per
  1386
  cent. increases last year and the prospect of increases of 35 per cent. or more, which is a conservative estimate, this coming year. They are concerned too that the Chancellor's measure of relief which was announced in July may not apply next year. It would be helpful if ratepayers could be told now the Government's attitude on the continuance of that relief.
  People's attitudes are also understandable because of the unfairness of the incidence to which many hon. Members have referred—not only the unfairness as between two different households with different expenditure requirements and a different income, as the right hon. Member for Fulham (Mr. Stewart) pointed out, but the incidence as between different areas. The rating system is now applying particularly heavily to areas with below average incomes—and there is no reflection of this in the rate support grant formula—and to areas which have a particularly high proportion of elderly folk. I know that the rate rebate system is designed to assist with both of these groups, and it does so to some extent, but I agree with those who drew attention to the area of income just beyond the rate rebate relief and the people there who, with not very much more income, are having to face this higher burden of rates. And at the same time in the rural areas, where the elderly are often to be found, they face additional expenditure month by month over and above that which is experienced in urban areas. In the rural areas people are dependent upon their cars, and very often those people are on below-average incomes. They need to get to work or, if they are retired, simply to get to the shops or the hospital. These people are finding cars more and more expensive to run, and so the rate rebate element in itself is no longer sufficient to protect some of them.
  Like other hon. Members, I wish to refer to a local aspect of the problem before moving on to two points on the national scene. In my short time in the House there have been two debates already on the rates and on the rate support grant formula and the way it affects people in rural areas. I do not want to go back over the last year and the change made by the Government when they came to power and removed a large part of the central Government grants paid to rural

  1387
  areas, but certainly that action still rankles. I accept the enormous difficulties of working out a new formula for the rate support grant. I sympathise with the Secretary of State in trying to satisfy all the various requirements of the different areas, and I accept that it is impossible to please everybody. Nevertheless, I should like to press the claims of rural areas which are growing in population and whose needs the formula does not accurately reflect.
  Then there is the population growth problem. The last time the formula was applied, population related to the two previous years. In the case of Norfolk County Council, if it had accurately reflected the influx of population which had to be catered for in the current rating year the county would have received an additional £2 million from the Government. It is therefore essential, and I believe that it is possible, for an estimate to be made for the year ahead of what the population will be and to make the population element in the formula reflect the up-to-date situation.
  Secondly, there is the sparsity factor. For those areas with growth where the population is scattered evenly throughout the community, the present formula by no means accurately matches up to requirements. The road mileage factor is much fairer, and a return to it would be more satisfactory.
  There are other factors in the formula like the education unit and the social services unit which operate against those areas which in the past had limited needs or which operated very strict control over expenditure but which now have growth thrust upon them.
  I wish in this context finally to refer to one other apparently tiny administrative point which will have an enormous effect on the amount of funds from the Government to Norfolk County Council for the coming year, and that is the administrative decision on what is known as the locally determined scheme in so far as it affects principal road improvements. At the present time those which are currently in the key sector are grant-aided as to 75 per cent. by the Department of the Environment. I understand that from 1st April next year any scheme costing less than £½ million will be transferred from the key sector to the locally
  1388
  determined scheme sector. That means that, whereas this year the key sector item in Norfolk would have totalled £1·2 million from the Government, next year it will total only about £200,000 because of the switch.
  One might have expected the contribution from the Government to reflect this administrative change, but I understand that it is likely that the Department of the Environment will not help in this direction. This means that to carry out the same road improvement programme next year Norfolk County Council will have to find at least an extra £1 million from the rates, or cut the programme. The point is that it is the rural areas which tend to have road improvement schemes costing less than £½ million, and so again it is the rural areas which will suffer. That is a simple example of one apparently desirable administration change which will have a substantial effect upon the ratepayer.
  So my first plea to the Secretary of State, therefore, is for the formula to reflect these special factors in rural growth areas, with the emphasis on the word "growth".
  On the national scene I accept the need for expenditure restraint, and I have no doubt that there have been many examples of unnecessary expenditure by local government. That, however, is no answer to next year's problem because the schemes and the expenditure are already in the pipeline and many authorities, like my own county council in Norfolk have been exercising responsible restraint anyway; because of the lack of buoyancy in the rating system as against Government expenditure where direct taxation benefits from fiscal drag and indirect expenditure benefits from inflation; and because local control in so many areas is now limited, as for example, with teachers' salaries. That is why we have said that these should be transferred to Government expenditure. After all, teachers' salaries now account for about 25 per cent. of the expenditure of authorities which are also local education authorities.
  If the Secretary of State will not accept our plea to transfer teachers' salaries, I urge him, as my second plea, to ensure that there is a much bigger rate support

  1389
  grant to local authorities this year to cope with the very special problems they will face next year.
  My third plea concerns two further points that we in Parliament should bear in mind. The Chancellor of the Exchequer referred to the need for local government to restrain its staff expansion plans, and I agree with that. However, we should not forget the enormous number of demands that we here in Parliament, Members and Government alike, make for further expenditure in one way or another and which the Government impose on the local authorities year by year. I have a list here of 30 items at least which the Government have imposed on the county councils in the last 12 months and which entail additional expenditure by the authorities, expenditure which they do not seek and which some of them do not want. There is a very real need for us, each time we make a demand for what appears to be a highly desirable project, to consider whether we are right to impose those extra demands on local authorities.
  Local authorities also lack freedom to determine what to charge for a number of services. They are unable to engage in economic costing for services they are compelled to provide. For example, a modest increase in school meal prices could make a significant difference to local authority revenue. I am not saying that the authorities should be given local discretion over that, because such discretion would lead to difficulties where, for example, two authorities run different but parallel systems. I have the example of concessionary bus fares very much in mind. My plea is rather for the Government to understand that it is not necessarily local government's fault that there are increases in staff or that expenditure rises so high as a result of impositions by Westminster.
  Finally, I want to reinforce the pleas that have been made for relief for the small shopkeepers and garages upon which the rural communities so much depend. To give but one example, a garage owner came to my surgery recently. He had decided no longer to be an employee but to become self-employed and run his own garage. He costed the scheme carefully when he made the move three years ago. At that time his rates were
  1390
  £180 a year. Now, with rating revaluation and rises in rates, they are £1,540, and he is trembling at the thought of what will happen next year, and wonders how he can continue. This comes on top of all the other extra charges and impositions which the self-employed have had to bear. That is one clear example of the severe impact of rates on the small business man. I therefore urge that consideration should be given to a similar rate rebate relief for small business men, shopkeepers, garages and so on with less than a certain maximum turnover. Many of them risk going out of business because of the impact of increasing rates and other costs in the coming two or three years, and that would represent a most serious loss to our rural communities.
  6.39 p.m.
  Miss Jo Richardson: The problem of rates is very difficult. We shall hear, and have already heard, special pleas from many constituencies. I want to intervene briefly because in the last debate on the rates in June there were no speakers from the London boroughs, largely because most hon. Members felt that the South of England and the London boroughs were, perhaps, in a more fortunate, easier and luckier position than many other areas. That is no longer true. I want to speak about the problem from the point of view of a London borough, because the London boroughs are extremely worried about the situation.
  The London borough of Barking, in which my constituency lies, is a good borough. It has excellent services, none of which we want to give up. It has 71 per cent. local authority housing and a most imaginative and excellent scheme for old people's welfare, as well as many community services. We are proud of these things and do not want to give them up. All the ratepayers are proud of them.
  We face a terrifying situation, largely because in the past year there have been pay awards, threshold payments, revised London weighting allowances, and increased employers' contributions for superannuation, national insurance and graduated contributions. We could not budget for them. We did not know what they would be. Now we know what they will be. In the London borough of Barking they will cost us £3,800,000.

  1391
  When the Conservative Party was in power and my borough put forward its last rate estimate the Government said that the increase we were suggesting was too big. They seem to have had their heads in the sand, not realising that their economic policies would create a round of wage and salary increases and eventually the difficulties in which we find ourselves.
  For 1974–75 we shall be £2 million in the red, but our rate forecast for 1975–76 —which, by coincidence, is being announced tonight—is that we shall be £12 million in the red, unless we receive interim assistance from my right hon. Friend the Secretary of State for the Environment or the rate for the domestic ratepayer in Barking rises from the present 1·79p per week to 3·63p. That is an increase of more than £2. I hope that we shall receive the interim assistance, because a rate increase of £2 a week in a borough such as mine will defeat many families. My borough is probably not the worst affected.
  The increases are all a result of a round of wage claims which arose from the economic difficulties in which the Conservative Government left the country many months ago. Thank goodness they left power then. The possible increases in rate demands will produce an upsurge of applications for rate rebates, particularly in a borough such as mine. Of the rate rebate 90 per cent. is grant-aided, so in the end it is a matter of an Exchequer subsidy. It will be very difficult for the boroughs to collect rates from those not eligible for rate rebates, when the money often does not exist.
  We are only one of 32 London boroughs. All the London boroughs have been affected by the revision in London weighting. Other parts of the country are not affected by London weighting as we are. I hope that my right hon. Friend will bear this in mind, and that any increased help to councils to pay their London weighting will go to London boroughs and not simply be put into the general pool.
  All of us on this side of the House felt that the London weighting revisions were overdue and well deserved. I am only sorry that the negotiations took so long. Salary increases are inevitably back-
  1392
  dated, and the retrospective awards and long-drawn-out negotiations put councils in difficulties in suddenly having to find money when a pay award is made.
  There has been much talk tonight of removing the burden of teachers' salaries from the local authorities to the Exchequer. I should oppose that if it meant, as I believe it probably would, that control over the number of teachers employed by the local authority were exercised by the Government and not the authority. I should prefer as much autonomy as possible in all respects to be left in the hands of local government.
  Mr. Nicholas Winterten: You do not pay.
  Miss Richardson: We all pay as taxpayers or ratepayers, and sometimes both.
  Several Conservative Members said that they were sorry my right hon. Friend could not announce very much tonight. We all understand why he cannot do so. He is in the middle of his discussions. We want those discussions to go ahead in their proper way and to produce a positive result. Therefore, we understand why my right hon. Friend cannot say more now.
  We also know that alternative forms of rating are being considered. We waited a long time for any proposals to come from the Conservatives when they were in Government. They talked and talked, and displayed no sense of urgency. I am convinced that my right hon. Friend is considering the problem urgently. I hope that he will give some interim help as well as giving us a hint of longer-term proposals for additional sources of income.
  6.47 p.m.
  Mr. Fred Silvester: I wish to make one plea, only that the discussion of the question of who pays for local government services is not bedevilled by the matter of local autonomy, the power of decision by the local councillors and council.
  The early purpose of the land tax, which we have had for many years, was limited to the locality in which it was raised. Rates were then used to improve the physical environment of the people paying them. There was a direct relationship between coughing up the money and

  1393
  the use of the service. As time has gone on, that relationship has diminished. Even in the old Poor Law days it was possible to transfer someone who was thought to be a burden on one parish back to his original parish, so that only those who had a responsibility by birth had to foot the bill.
  Those days are long gone, and we all agree that that is a good thing. We must face new realities, and the new reality here is that local councils have already lost their autonomy. Local government faces problems of overwhelming size. Manchester and other great conurbations have problems of migration and other matters of congestion that are not of their own sole making. That is already recognised both in the way in which we work out the rate support grant and in additional, special measures such as those relating to city centres, and now, for example extra payments to teachers in stress areas. We are already making, in special circumstances, special payments for this or that variation which occurs because of the great problems arising following national or regional difficulties. It is now unrealistic to regard a specific local authority area as being able to determine the problems with which it will be faced, and, therefore, to call upon it to whip up the resources to deal with those problems.
  Secondly, we are faced with nationally determined policies. My hon. Friend the Member for Norfolk, South (Mr. MacGregor) listed over 30 duties which have been added this year, and the hon. Member for the Isle of Wight (Mr. Ross) made the same point in a telling fashion. We in this House say what shall be done. More and more we are saying what shall be done. It is not simply that we say "You shall undertake such and such a service". We are frequently determining the composition of that service.
  If we examine the education bill, about which we have been talking this evening, it will be seen that the wage rates paid to teachers are nationally negotiated. The hon. Member for Barking (Miss Richardson) spoke about the number of teachers. For many years we have had a quota system in operation. The practical variation open to a local authority is minimal.
  Mr. Tomlinson: Would the hon. Gentleman not agree that in this national determination of the education wage bill, as in the national determination of the wage bill—for example, for local authority manual workers—the people who participate in the national negotiations are local authority representatives and not Government representatives?
  Mr. Silvester: That is true, but it is also true that two other parties to such negotiations are the Government and the nationally organised unions. I am not making the point that this is a responsibility of which anyone should be ashamed. It is a situation which has grown up. So many of the things which local authorities undertake, both in terms of what they do and the resources they have to do it, are nationally determined.
  The question therefore arises: how far do they have freedom to do things in addition? They have some freedom in the way they carry out services within a given sum of money. Even there we are experiencing increasing difficulty. The Secretary of State for Education will, presumably in this Parliament, seek to introduce a national system of comprehensive education. That system would undoubtedly be varied from local authority to local authority if they were given the chance. The authorities will not be given that chance. The only thing they will be given is the ability to decide what will happen with one school in relation to another. The money for carrying out the scheme will be decided by the Minister, as will the policy. It will be the local implementation only, within given sums of money, that will be determined locally.
  We are already in a situation where local authorities are severely hamstrung. We are finding ourselves asking people to bear heavy local burdens, which, we have heard, will be difficult to collect, which in many cases are becoming insupportable, to maintain what is increasingly becoming the myth that local government decides what shall happen.
  We say that the time has come for a change. We have been accused of making election propaganda. That was a fair thing to say during the election and I did not mind anyone having a go at me then. It is no longer true, however, We are faced with an entirely different

  1395
  ball game. We are now in a situation in which the pressures on the rates are quite other than those with which we have previously dealt. It is right to say that it is time to make a decision on the principle and leave the details till later. Many have said during the debate that it is not right to do that, that we must wait until we decide upon the alternative ways. We have been talking about alternative ways for 40 years. My hon. Friend the Member for Bedfordshire, South (Mr. Madel) went through most of those ways earlier.
  Mr. Marks: The Conservative Party changed its policy when higher rates became payable in the countryside. The constituents of the hon. Gentleman and myself, in Manchester, have for some time been paying much higher rates than any which those in the countryside are paying now. Why was action not taken before, when the unfairness existed?
  Mr. Silvester: The hon. Gentleman is missing on two points. First, there has always been a problem, to which I was coming, over the distribution of rates fairly between town and country. I have already mentioned that, but the hon. Gentleman was not present for that part of my speech. We had already started taking action on that through the rate support grant, which his right hon. Friend changed, in that there was a switch from country to town. Manchester benefited from that. The hon. Gentleman knows that I did not oppose his right hon. Friend in giving Manchester more rate relief.
  Mr. Marks: The hon. Gentleman did not support that move either.
  Mr. Silvester: No. The reason was that the proposal we put forward was to cushion the change. By taking the cushion away we left some of our other friends in an exposed position. The hon. Gentleman is right in saying that the cities have had a burden which the countryside has frequently not recognised.
  The point I was making at the beginning of my speech, upon which I would hope to have the hon. Gentleman's support, is that this is the result of pressures which have developed arising from regional and national events. The cities have collected the problems together. These problems are becoming
  1396
  progressively more difficult to manage and the pot is beginning to boil.
  These things do not happen by accident. They do not happen because Governments suddenly change their mind. They are a response to slowly growing and powerful pressures. This is what Parliament must recognise. We must not over-stress local autonomy in tackling this problem. It is urgent, and in the end the Exchequer will have to bear the costs of local government expenditure.
  Government will also, whether we like it or not, have to seek more control of local government expenditure because it is an increasingly important part of the management of the economy. We have seen in the past year that a lack of that control is a major factor in influencing events. I do not have a solution, but there are certain circumstances already in the universities and in the arts in which it is possible for the Government to provide money en bloc, but the management is left for the people concerned to deal with. That method would leave considerable areas of freedom to local councils.
  I may be going too far for many of my hon. Friends. There would remain the possibility of discretionary income through lotteries, charges, and such things as can be handled locally. However, the vast bulk of the cost of local government services now has to be provided from money raised centrally and distributed in some way to local authorities. The sooner we grasp that nettle the better.
  6.58 p.m.
  Mr. Ronald Brown: The hon. Member for Manchester, Withington (Mr. Silvester) would do well to look at history. The block grant system is not new. It has been with us for a long time. Many of us resented it when it was introduced because there are many fallacious arguments contained within its philosophy. I hope that the hon. Member will not go too far in arguing to bring back block grants before he understands them.
  One of the odd things about this debate is that it is like the umpteenth showing of a film. This all started in 1963 when the reorganisation of London was taking place. In those days many of us argued

  1397
  against that reorganisation on the fundamental ground that it raised local government cost without adding anything of value. We fought and argued and we forecast the increase in rates that would arise. I forecast that there would be a rise of 10s. in the pound within five years as a result of the reorganisation. The House may be interested to know that somebody did an exercise five years later in 1970 and discovered that, taking out the 1s. 2d. that the Government gave towards local government, I was absolutely right about the cost.
  That was what happened in London and now, 10 years later, I suggest that it will happen to the rest of the country. The very idea was absurd. Different Ministers refused to understand that, with the reorganisation of local government in the way that it was carried out, inevitably the cost would be there. When we objected to London being dealt with in that way in 1963, we were told by the then Conservative Government that it was important to get the reorganisation carried out and the cost would look after itself. It did look after itself, and London is now in a parlous state.
  I want to address myself to the London situation. First I want to draw attention to what I regard as the unfair allocation of national resources to London. My fear is that the grant settlement for London will again be insufficient for it to carry out its local government services without having to demand from ratepayers larger sums of money than will have to be levied outside London.
  The London ratepayer is in a desperate situation. Rateable values in London are high. Therefore departmental advisers, as well as advisers to local government outside London, believe that the ability of ratepayers to pay high rates is thereby enhanced. London's average rates in the pound are somewhat, but not all that much, lower than those levied outside London. Therefore, it is argued that London can afford to pay more.
  It is freely admitted that London's expenditure is much higher than expenditure anywhere else. Again, it is argued that this is compensated for by the higher rateable values. Therefore, the question is asked: why should London be given preferential grant treatment? Indeed, some people ask: why should London
  1398
  receive any form of special treatment to cut its rate burden? That reasoning may appear sound to people outside London, but it does not seem so sound to the 7½ million ratepayers in the metropolis whose average cash payment is much higher than that of ratepayers in the rest of the country.
  Research shows that the rateable value of a three-bedroom Parker Morris standard house in London averages out at more than half as much again as a similar house in the Merseyside conurbation and the rural areas of Kent. I have some figures which illustrate the position. Taking Dyfed in Wales as 100, in the North, in the Durham area, the rateable value will be 131 for a similar property; in Shropshire, in the West Midlands, it will be 140; in the South-East Kent, it will be 150; in the North-West, Merseyside, it will be 157; and in Greater London it will be 243. That shows immediately the vast difference in rateable values between London and other parts of the country. The excess leaps to two and a half times the rateable value when we compare London with Wales. Yet if the forecasts that we have seen and heard about on television and radio are to be believed, some London boroughs are estimating for 50 per cent. to 100 per cent. rate increases in 1975–76 unless they get extra rate grant aid.
  Before murmurs of "Extravagance" are heard, I should point out that these increases are to meet inflation and committed expansion, over which there is no control. Increases of this magnitude are substantially higher than anything mentioned elsewhere and they are to be levied on a rating base already well above the average.
  What are the reasons for London's poor rate grant position? First, London's higher costs can be quantified as at least £200 million more than the average for England and Wales. This figure of £200 million is identified and therefore not overstated. Yet London receives a 3 per cent. weighting this year for that amount, which is less per capita than the weighting received by other parts of England. London's weighting for higher costs is approximately £1·25 per head of the population. This compares with £5·99 for the inner South-Eastern counties, £1·04 for the outer South-East and £1·44 for

  1399
  the West Midlands. It seems difficult to reconcile these figures.
  Secondly, included in the higher costs that I have just mentioned is the serious item of the London pay award to local government officers, London Transport and the police. This payment acknowledges the higher costs of working in London and does not apply generally to the rest of the country. In 1974 it will add £74 million to London's bill, but because of the operation of the rate support grant formula the vast majority of the grant attracted by this expenditure—approximately 60 per cent.—will go to authorities outside London which do not bear the burden unless some adjustment is made. We in London argue that we do not want a proportion of that £74 million back; we want the whole of it. Otherwise it is an unfair and continuing liability, because ratepayers outside London will benefit from an expenditure that affects only people in London.
  Thirdly there is the rate support grant, which is a method designed to transfer grant to local authorities on the basis of a formula which measures need by the use of objective factors. The formula is applied to London, but London's expenditure pattern is specifically excluded from the formula because if it were included London would get much more grant at the expense of other ratepayers in England and Wales.
  This thinking stems from an attitude which emphasises rateable resources as a measure of ability to pay and ignores the ultimate cash burden on ratepayers. On present thinking, not much hope can be held out of the problem being corrected in 1975–76 to the relief of London ratepayers. In percentage terms, London's rate support grant is 35 per cent. of the relevant expenditure, whereas for the country as a whole it is 54 per cent.
  Fourthly, there is what for years has been considered an internal problem of the London boroughs. I refer to the London rate equalisation scheme, which was devised and created by the London boroughs to transfer part of the wealth of some of the wealthier Inner London boroughs to some of the poorer boroughs in London as a whole. That was purely an internal arrangement that was arrived at by agreement by the London boroughs.
  1400
  It was an arrangement entirely outside the rate support grant system. It may well be adopted in other parts of the country in the years to come. It has been seized on by the Government as an argument that the need for extra assistance is alleviated by the considerable cash adjustments that are made under the London equalisation scheme from richer to poorer authorities. It seems that what we have been able to do in London between the boroughs to arrive at an equitable position is to be unfairly seized by Government and used against us. What can be done to accord fair treatment to London's seven and a half million ratepayers?
  There are three possible solutions which should be considered before it is too late. The first is to include the whole of London's expenditure pattern within the formula, suitably amended, to ensure that what is rightly London's is given to London. The second solution is to give to London a high compensatory weighting factor to produce a similar result. The present 3 per cent. is insufficient and derisory. The third solution is to accept the truth—I am afraid that the House still resists accepting it—and recognise that the whole London set-up is different from that in other areas. We cannot treat London local authorities in the same way in any joint formula that has been devised for other parts of the country. That means that London should be taken out of the rate support grant formula and dealt with separately and unilaterally. Only then would justice be seen to be done.
  London's local authorities are facing next year massive rate increases. They have only two choices before them and both are unpalatable. They can introduce a straightforward cash demand upon the ratepayers, which will lead to militancy and ensure that the ratepayers face an enormous and unacceptable burden, or they can cut the essential services. That would involve people in need being dealt with harshly as well as a loss of personnel. I believe that there is no other choice. Only an additional cash injection can alleviate the situation.
  I hope the Government will understand that the London situation is serious. It has been argued year in and year out. We are now coming to the end of the

  1401
  road. I urge all my right hon. and hon. Friends to understand that we need help badly. I hope that we shall get it tonight.
  7.14 p.m.
  Mr. Peter Fry: I hope that the hon. Member for Hackney, South and Shoreditch (Mr. Brown) will pardon me if I do not take up his remarks too closely. I must point out to him that I represent part of a county whose problems are being exaggerated by London. One of the major difficulties is that Northamptonshire is being asked to take on board many of London's problems without the financial wherewithal to pay for the services that we are asked to provide. We were not encouraged a few weeks ago when a Mr. Sherman, who I believe is a colleague of the hon. Gentleman's, stated that Northamptonshire should take a higher percentage of the real problem cases in London. I can assure the hon. Gentleman and Mr. Sherman that Northamptonshire ratepayers take a dim view of that idea.
  One of the main features of this debate has been the remarkable paucity of suggestions that have come from the Government Front Bench and from their back benchers. It is significant that Labour hon. Members who are always so free with advice when in Opposition, have had little to offer this afternoon. I feel that it will be no good to them or to the country just to spend their time recriminating on what has happened in the past.
  I shall change slightly the tenor of the debate by discussing a subject that is not a popular matter with everyone—namely, the effect of the current state of local government finance on road construction. I realise that roads are not popular with everyone. Roads and the traffic which uses them rapidly become identified in many people's minds as one of the evils of our time. I am aware that we cannot discuss the trunk road programme, but in our towns and rural areas there are many main roads which are the responsibility of the local authorities and play an essential part in our road transport network.
  I shall give the House an idea of the extent of the problem. The present transport supplementary grant of 70 per cent. is less than the old 75 per cent. grant which was allowed for principal routes. It is felt that the present basis of grant is unsatisfactory, especially as it
  1402
  takes no account of the counties which are expanding at an above-average rate. If we are to have the projected programme for Northamptonshire for 1975–76 the possible bill for construction and land at November 1973 prices will be no less than £11,080,000. The comparable figure for Essex, for example, is less than £7 million, and the Leicestershire figure is less than £3 million.
  It is disturbing to me and to many people in Northamptonshire that almost the whole of the expenditure is required for four development areas. Over the next 10 years, it is reckoned, about £50 million will be required in Northampton and Wellingborough and for routes in between. Out of the £11 million only £600,000 will be available for other road schemes in the county. That means that the attractive town of Oundle will have to wait longer and longer for its bypass. In villages where the people cannot sleep at night because of heavy lorries trundling by their front doors and bedroom windows there is no idea when relief will be given.
  I suggest that the present system of transport grant is totally inadequate. That is not the only problem, because out of the grant has to be paid not only road construction and maintenance expenditure but public transport subsidies. For example, in Northamptonshire we find that the subsidies increasingly have to go not to where the services are few and far between in the rural areas but to the urban and semi-urban areas. It seems that the bus services are losing most money in those areas, and presumably that is where there are most votes. Many of my constituents who live on the edge of the county are finding that the services that they enjoy are becoming fewer but there is a regrettable tendency for their rates to become higher. They feel strongly that they are getting a poor bargain. It seems that the ratepayers in the non-expanding areas are expected to subsidise development although it is difficult to find many people even in the development areas who are enthusiastic about the expansion. That basic inequality in the transport subsidy grant should be put right.
  I am aware that there are people in our community who feel that we should not bother about new or improved roads.

  1403
  They are usually the people who complain bitterly about through traffic shaking their ancient buildings and endangering life in our village streets. Yet it seems that even this Government realise that the ideal is for the lorry, especially on through roads, to be separated from people. The proposed diversion of heavy traffic which is envisaged in the "lorry route" scheme will only make life intolerable for some residents near those roads for as long as it takes to put the improvements in hand. The longer the delay the longer the misery that will ensue.
  Mr. Peter Snape: Does the hon. Gentleman think that a far better use of public expenditure would be to persuade people who wish heavy freight to be transported from one end of the country to the other to use the public facilities provided rather than to use heavy vehicles which must pass somebody's window whether or not we build new roads?
  Mr. Fry: I proposed to refer to that matter later. I remind the hon. Gentleman that 85 per cent. of all freight carried in this country goes by road and only 9 per cent. by rail. If the amount carried by rail were enormously increased, the natural increase in the amount of goods to be carried would still mean that something would have to be done to allow for the heavy lorries. However, I am sure that the hon. Gentleman would agree that on any journey of less than 100 miles the lorry is a much more efficient and economical form of transport, and the average lorry journey is only about 30 miles in length.
  The Freight Transport Association has said that the idea of lorry routes should be deferred as regards the completion date because it cannot see how the routes will be ready and satisfactory by the projected time. Other people say that we shall not have any vehicles soon because the energy crisis and the cost of petrol will reduce the amount of traffic. But the National Economic Development Office said:
  "The figures suggest a dramatic rise in the price of petrol leads to a short-term drop in demand but this is fairly quickly absorbed and the rising trend resumed."
  This is borne out by the Central Policy Review Staff, which said:
  1404
  "They (the public) would prefer the flexibility which travelling independently permits even in the face of large rises in the price of petrol, despite the fact that travel by train or by bus consumes less energy ".
  I agree with that, except the last words. Unless a bus or train is pretty well full, it is often less wasteful of energy for people to use small cars. This is one of the interesting facts which those who are against the idea of more money being spent on roads do not always admit.
  Those who say that there will not be more cars on the roads plainly have not read the forecasts recently put forward, particularly by the Society of Motor Manufacturers and Traders. It is estimated that by the year 2000 we shall have no less than 40 per cent. more vehicles on our roads. I wish to impress on the House my conviction that no foreseeable possible shift to any other form of transport is liable to avert a large increase in road traffic.
  I mentioned in reply to an intervention a few moments ago the amount of goods which are carried by road. It is worth restating that, even with a large increase in the amount of goods carried by rail, extra expenditure on road construction and better roads would still be needed. Better roads are needed not simply to annoy a section of the environmental lobby but because they reduce congestion, minimise gradients, lead to lower accident frequency and allow continuous steady speeds, all of which improve fuel economy and, in the long run, save energy.
  I appreciate that the pressures on the Exchequer and on Government spending programmes are very great. I believe that my county council is making allowance for a rate of inflation of no less than 19 per cent. in the current year and 25 per cent. for next year. It would, however, be wrong to imagine that everyone accepts even the present level of rates. For too many people, particularly in areas such as mine, the level is too high already. Therefore, anyone who talks about expenditure in a certain direction, as I have done, should make some suggestions about where some of the necessary finance may be obtained.
  I have advocated before in the House, and I do so again, the launching of road bonds on the open market with a Government guarantee. That will enable money

  1405
  to be forthcoming to build the motorways and pay for the trunk roads on a basis similar to that which some of our EEC partners employ and similar to the idea about raising capital for the Channel Tunnel. That would reduce the strain on the Treasury, and other resources would be made available to improve and build roads which are the responsibility of the local authorities.
  Secondly, if the Government had supported Conservative amendments in legislation for legalising paid lifts in private cars and the delicensing of many bus routes, much more effective help could be given to rural areas where public transport is virtually non-existent. That would mean that less money would be needed for expensive bus subsidies.
  Thirdly—I am surprised that no one has mentioned this—the Working Party on School Transport which reported towards the end of 1973 suggested that all parents should pay a flat rate for all children who wanted transport to and from school. I assume that there would be the normal exemptions for handicapped people and those on low incomes. As the cost of school transport is part of the education bill, it is surprising that neither the Conservative Government nor the present Government have considered bringing this into effect.
  I endorse the comment of my hon. Friend the Member for Manchester, Withington (Mr. Silvester) that the bulk of the money which is needed by local government should be provided by the centre. With a provision of 60 per cent. and perhaps more in future, it should not be too difficult to devise a scheme whereby the Government give 90 of 95 per cent. The arguments about local autonomy no longer stand up in the face of the irate feeling of ratepayers.
  I turn to the question of the problems of my constituency. There is an abnormal rate of expansion in my county, and the bill for it is not being fairly shared. The small shopkeeper who does not live in one of the new areas is having to pay more so that bigger and better shopping centres can be created to take his trade from him. The villager whose home is not even on main drainage although his rates continue to increase will have to wait longer for the bypass to take traffic from his front door.
  1406
  Therefore, the problem is one not simply of changing the present system of financing road construction and improvement but of recognising that many counties, particularly Northamptonshire, are carrying more than their fair share of the national burden. Unless something is done very soon, the frustration of ratepayers will boil over. When the Minister for Planning and Local Government visited my county, he calmly told us that the rates would be assisted from the profits of land nationalisation. The comment of local ratepayers was that if people believed that they would believe anything. It was no good putting forward a pie-in-the-sky idea like that when the Bill for land nationalisation or municipalisation has not even been presented.
  Unless something is done for the ratepayers of Northamptonshire, and indeed for the rest of the ratepayers, a very serious situation is likely to ensue. Millions of people who would not normally dream of disobeying the law have watched what happened at Clay Cross and the Labour Party's attitude to it. They have learned the lesson of a very bad precedent. The situation is so serious that the Government could well be responsible for the greatest degree of mass civil disobedience ever witnessed in my lifetime. It is no good the Secretary of State or any other right hon. or hon. Member opposite talking about what the Conservative Government did or did not do. Now they are in power. The responsibility is theirs, and they will be judged on what they do.
  7.30 p.m.
  Mr. Kenneth Marks: The hon. Member for Wellingborough (Mr. Fry) said that certain things were the Government's responsibility, but his final remarks were completely irresponsible. My right hon. Friend the Secretary of State said that it was not a good time to have a debate on the rates, six days before his statutory meeting with the local authorities, but I do not altogether agree with him.
  This House does not sufficiently often debate rates before the rate support grant orders are put forward. Six days may be a rather short period, but I hope that it will be sufficient time for further thoughts on the matter by the Government. Once the rate support grant order

  1407
  is published and we debate it, there is not much that Parliament can do. Only once in my experience has a part of the House voted against a rate support grant order. That was in March when the Leader of the Opposition led his troops into the Lobby against the rate support grant order. Fortunately for the local authorities and for the country as a whole, 80 of the right hon. Gentleman's colleagues failed to follow him.
  There is not enough parliamentary participation in discussion on the rate support grant before the order comes before us. One of the reasons for this is that we do not have adequate information. The previous Minister of State promised during debates on the Local Government Bill that he would publish the proposals that he made to the local authorities and he said that he would not object if the local authority associations published their proposals. He carried out that promise to a limited extent, and I hope that the present Government will in future ensure that we are told of the basis of the argument between the local authorities and the Government regarding the rate support grant.
  We ought to participate in the decision on this. It has already been pointed out that we give local authorities all the jobs to do and, therefore, we should have a much more important say in how the rate support grant is to be shared out.
  For a number of years I have advocated in the House the abolition of the rating system. I realise that there are disadvantages in all the other alternatives but it has always seemed to me, even long before this year's hiatus, that the disadvantages associated with the present rating system were greater than its advantages.
  I accept that the Government have done the right thing in setting up a committee of inquiry—a high-powered committee—to examine the alternatives. I accept that the task will probably take a long time, but I hope that there will be some result before the end of next year. A number of us have served on Select Committees examining various problems. We have had all the facilities of the House, we have been able to call witnesses and we have had all the necessary information available, yet some of
  1408
  our Select Committees have taken a long time to tackle jobs that were smaller than that now facing the committee of inquiry on rates. Therefore, I appreciate that it will take the committee a long time, but I hope that it comes up with a proposal that will end the present rating system.
  I think I have spoken in all seven debates on rate support grant orders that have taken place since I came to the House. It was always easy to speak in those debates. It seemed that nobody wanted to take part. I never had any difficulty in taking part. I did not have to say nice things to Mr. Speaker or write letters to him. I merely sat in my place and I was called. Throughout that period, however, people in our big cities were paying high rates. For instance, two years ago people in the city of Manchester were paying a domestic rate of 55p in the pound, which is more than many ratepayers are paying now even after the big recent increases.
  In the past I have campaigned on behalf of the big cities. I agree with the hon. Member for Manchester, Withington (Mr. Silvester) who said that the Conservative Government started to do something about altering the grant system and then messed it up by having a varied domestic subsidy. I was glad when my right hon. Friend the Secretary of State made a general 13p domestic subsidy in March.
  I wish to draw the Government's attention to the plight of certain authorities—not, for once, those in the big cities—that have had special difficulties in local government reorganisation. These authorities have had problems that are not covered by the rate support grant formula. I agree that it is difficult to find a formula to cover such problems. The metropolitan districts that I have in mind have had the disadvantage of not being based on former county boroughs. The three authorities I am concerned with are Trafford, Knowsley and Tameside. They have had considerable administrative and financial difficulties through not having been based on big towns. The present needs element does not cater for their problems. I urge the Government, even in the short time available, to try to remedy this situation in this year's rate support grant order as well as in next year's order.

  1409
  Tameside, part of which is in my constituency, consists of nine former authorities—urban districts and non-county boroughs—none of which had more than 50,000 population and none of which had been an education authority or even a social services authority. Those former authorities had only limited planning powers. Some were library authorities but others were not. They did not deal with such things as registration of births, marriages and deaths or with the administration of justice. The administrative costs in setting up new departments following the reorganisation were considerably higher than average. The cost of setting up headquarters for the education service alone was 60 per cent. higher than average. In the case of Trafford the cost was even higher. The costs would probably have been even higher had the services been really adequate. There have been a number of faults in relation to the service.
  Setting up departments for all the other new functions to be undertaken was also expensive. Senior administrative staff had to be appointed at a much earlier stage than in other authorities and extra costs were involved in standardising methods of accountancy because the existing computer set-up was inadequate to deal with the new work. Much of the extra expenditure arose in 1973–74. It was higher than the statutory provision made by the Conservative Government and, therefore, became an additional charge on the rates this year.
  Many of the staff were previously housed at county headquarters at Preston and Chester, and they had to be housed in Tameside. So new accommodation had to be found, and there were added difficulties because new departments had to be housed in various parts of the new borough. The housing department was in one former district, the planning department in another, finance and administration in another and education in yet another. This did not make for easy communication either between departments or between the public and departments. Information offices had to be set up in each of the nine former districts.
  With regard to capital expenditure there was an urgent need for more build-
  1410
  ing, particularly in the education and welfare services. Because of the past policy of the Lancashire and Cheshire councils there is a woeful shortage, particularly in accommodation for the handicapped. Tameside, with 300,000 people, has only one special school. It is a good school but it is hopelessly inadequate to serve the purpose.
  Only today I received a letter from magistrates complaining about the problem of accommodation for juvenile offenders. I will not go into the details but there is a serious problem because frequently a young person who is remanded cannot be found a place and has to be sent home or to an adult remand centre.
  No provision was made in the rate support grant order for 1974–75, or in the rate support grant regulations, for the special disadvantages I have been talking about. Tameside, for instance, has suffered considerable financial loss because the basis laid down for grant for personal social services and education units was based on crude population figures and not on true needs. I have inquired into this and received the reply that the matter had been worked out according to the rate support grant regulations and that nothing could be done to change it. I hope that the Government will think again about the regulations as well as the grants.
  Another factor is the raising of the school leaving age. All three local authorities had an above-average increase in school population. Previously not so many children had stayed on until they were 16. The figures used for calculating the 1974–75 grant were the school population figures for 1973–74, or probably the year before if I know anything about education statistics. I hope that the Minister will make clear what school population figures he will use for this year's increase order and the main order for next year.
  I conclude by asking again that in the matter of rates and local government finance we should have more open government. Parliament gives the jobs to local authorities, and I hope that we shall not simply be regarded as a rubber stamp in the matter of finance for local authorities.
  7.40 p.m.
  Mr. Michael Morris: After a summer of debates on rates one might have thought that there was little to debate in advance of the Secretary of State's meeting at the end of this month. The fact that we are having such a full debate today shows the interest that there is in this subject.
  The Opposition know, as, I suspect, the Secretary of State knows in his heart, that eventually there is only one answer, and that is the total abolition of the rating system. However one looks at it the dilemma is that local government expenditure is becoming increasingly out of hand and is costing the country more than it can afford. We also know—and I suspect, with some reluctance, the Secretary of State knows—that something must be done for the coming year.
  Those of us who have noted with interest the debate that has been going on in the Press and in the Local Government Chronicle know that the amount contained in the interim order coming up for review is likely to be substantial. Many of us, and most local authorities, feel that the Government should make a generous gesture and, rather than move forward on the basis of 60·5 per cent., should meet at least 90 per cent. and, if they are feeling generous, the whole amount of the interim order. Local authorities are under enormous pressure. Hon. Members on both sides of the House have mentioned genuine cases where the rate support grant is failing miserably to help the authorities which are under the greatest pressure.
  The problems of Northampton are very real. If one is to believe the Local Government Chronicle, the prospects are bleak, and I appeal to the right hon. Member for Deptford (Mr. Silkin), when he replies, to leave open in the remaining seven days the prospect of meeting the whole of this interim demand from the local authorities.
  The political antennae of most hon. Members would suggest that if nothing is done the increase in rates next year will be between 40 and 50 per cent. The Chancellor of the Exchequer has said that the real increase in expenditure should be restricted to 2¾ per cent. The Secretary of State, knowing that local
  1412
  authorities are forecasting this high rate of inflation and that the Houghton pay award is still to come, will be unable to face the country unless he does something to bring rate increases down to about 20 per cent. That suggests a rate support grant order of just under 70 per cent.—67, 68 or 69 per cent. I am only guessing at this stage.
  Having announced that, I suppose that the Secretary of State will sit back in the hope that at last we shall get back to the happy situation when debates on rate support grant orders are of no interest to most hon. Members. If he hopes for that, he is misjudging the situation in the country. I believe that those days are gone.
  There are one or two suggestions I should like to make to the Secretary of State. He should check the rate support grant formula. Is the Department of the Environment's multiple regression analysis working, or is it not? The evidence is that it is not working. If it cannot be made to work better it should be thrown out and something else put in its place.
  For Northamptonshire, which has had the greatest expansion in the United Kingdom and is one of the most expanding areas in Europe, the rate support formula is not working. We have had tea and sympathy from the Minister but we have had no extra cash. A legitimate demand was put to the development corporation for just under £1 million last May, but the local authority is still awaiting that money from the Treasury. That situation is unacceptable.
  Secondly, I suggest that the Secretary of State should be questioning the level of local authority expenditure and, perhaps, questioning whether local authorities are concentrating the money on the areas of greatest need. He should be questioning whether 2¾ per cent. real growth is not too much, particularly when official forecasts suggest that our annual growth rate will be from 0 to 2 per cent. The hard-pressed counties see district councils in their same area spending money on things which by no yardstick are a priority. To give an example, when Northamptonshire faces enormous problems in the staffing of schools, can it be right for the Northampton District Council to build a municipal golf course?

  1413
  Thirdly, it is surely right that the House should look at what it is doing. We have pushed through a whole host of Bills which place heavy demands on local authorities. Were we to do a survey we should not find one local authority in the country implementing to the full every piece of legislation we have pushed through. I am sure that many authorities would rather be without some of that legislation. I suggest to the Government that we should look at that legislation to see whether the need for it is still there or whether local authorities can be released from these demands.
  I hope that the Government will look closely at the help they give to local shopkeepers and small businesses. Many business men face enormous rate increases. Perhaps this aspect mattered a little less when trade was booming, but when businesses are going on short time, as the shoe manufacturers are at the moment, people begin to question whether the Government are sincere in their belief that they wish to help. Now is the time for the Government to take action.
  Is this not also the time to query the folklore that the public are asking for more and better services? My experience is that there is no demand among the ratepayers of Northampton for increased services. That applies to members of the Labour Party and also to members of the Conservative Party.
  Mr. Marks: To what degree is the hon. Gentleman's local authority implementing the provisions of the Chronically Sick and Disabled Persons Act?
  Mr. Morris: We have made a start in that direction, but no doubt there is still work to be done. Surely it is better to spend money on that matter than on a municipal golf course, and it was a Labour council which chose that form of expenditure.
  Mr. Marks: We would never have guessed.
  Mr. Morris: If we knew that the Secretary of State for the Environment was working hard on these areas of concern, then we would be very much behind him, but we know that angry ratepayers were bought off to the tune of £150 million. We have no guarantee that a similar sum will be forthcoming in the next financial
  1414
  year. Indeed, if such a sum is provided it will do no more than buy time. It may be unfortunate, but it is a fact that ratepayers' views are coloured by the 13p fiddle that took place last March.
  I think that the Government took the view that the appointment of the Layfield Committee would help enormously to take this problem out of the political arena, but that has not been manifest from today's debate. Indeed, the situation has been made a great deal worse by the appearance of two Bills in the present Session. I refer first to the General Rate Bill, which seeks to postpone revaluation —and incredibly, after last summer's activities, it was done without any consultation with the local authority associations. Action of that sort in this day and age is amazing. The situation is further worsened by the Housing Rents and Subsidies Bill as a result of which, we understand from the Secretary of State, ratepayers will be likely to subsidies rents as soon as that measure is passed.
  If the Government are serious about the Layfield Committee, that committee should now be suggesting to the Government that further research is needed into this or that area. To date there has been a stony silence from the committee.
  Mr. Gwilym Roberts: The Tory Party did not even set up a committee.
  Mr. Morris: I understand that the committee meets once a fortnight, which is a nice leisurely way to proceed, but is no way to tackle the rating problem.
  Visiting Northamptonshire the right hon. Member for Deptford (Mr. Silkin) learned how angry people are at the situation. They are looking to the Government to take a real initiative over rating. They want Government to give guidance to local authorities, and the local authorities are waiting for that guidance. Where is it? Local authorities want to know how to control expenditure and where to cut. It would be nice to see a circular issued after the meeting which is to be held within a week or so, but, above all, the local authorities look to Government to take a grip on controlling local authority expenditure.
  The easiest way out of the situation is to abolish rates altogether and to make a firm start by transferring teachers'

  1415
  salaries. I recently heard the Secretary of State for Education and Science at Question Time make clear that no local authority will have to make any cuts whatever in teaching staff. If the Government were to transfer teachers' salaries it would at least get the Government off the hook.
  In political life it does no harm once in a while to admit that the other side is right. Now is the time for the Government and for the Secretary of State for the Environment to say that their policies are wrong and that they should adopt our proposals.
  7.57 p.m.
  Mr. Peter Snape: I hope that the hon. Member for Northampton, South (Mr. Morris) will forgive me if I do not take up the points of detail which he raised. Perhaps it will be sufficient if I say that I thought his contribution smug, self-satisfied and almost totally irrelevant to the debate.
  I know from experience that one area which has suffered in rate terms during the last year is the West Midlands. I appreciate that every hon. Member will have a constituency point to make in this regard, but I should like to tell the House that on 25th March in respect of the domestic rate support grant the Secretary of State for the Environment said that there were specific problems in the West Midlands generally relating to the needs element, and he promised to review the situation before the announcement of next year's grants which is expected within the next fortnight. I hope that the right hon. Gentleman the Minister for Planning and Local Government will remind the Secretary of State of this pledge. We in the West Midlands feel that the rate of increase which we have suffered in the past year has been far greater than has been imposed in most other parts of the country.
  We have heard a great deal in this debate about the effect of increases on ratepayers. We have heard little about the cause of those increases. When I made my maiden speech on 25th March on the topic of rates, I followed the traditions of the House and tried to deal with the subject in a non-controversial way. That was a little difficult, to say the least, and the more I hear Conservative Mem-
  1416
  bers commenting on this subject my desire to try to be non-controversial becomes more and more weak as time goes on.
  It is a fact, unpalatable though it may be, that the Conservatives by implementing the disastrous local government reorganisation have imposed by far the largest factor in the rate burden. [Interruption.] Perhaps the hon. Member for Ripon (Dr. Hampson) will note that the industrial rate in my constituency in the current year rose by 98 per cent. The hon. Member for Northampton, South spoke of his concern and that of the Conservative Party for small businesses. Perhaps the hon. Gentleman and his Friends will say at the door of which political party we should lay the blame for a 98 per cent. increase in industrial rates in my constituency.
  Dr. Hampson: I appreciate the hon. Gentleman's giving me this opportunity to spell out a few points. First, it is not due to the reorganisation of local government. Inflation has much more to do with it, especially in Labour-controlled authorities which have built up tremendous debt charges and have to service the debt. What is more, it is clear that, although the variable system which the Conservative Government introduced was not perfect, and although it involved big increases in some areas, at least it was set up to meet specific difficulties which the reorganisation brought about, especially the changes in the water system. By getting that variable rate—
  Mr. Deputy Speaker (Mr. George Thomas): Order. Is this an intervention?
  Dr. Hampson: Perhaps I might just finish what I was saying. The hon. Member for West Bromwich, East (Mr. Snape) asked me to explain—
  Mr. Deputy Speaker: Order. I have just been given a long list of hon. Members who are anxious to speak. It includes the name of the hon. Member for Ripon (Dr. Hampson). Mr. Snape.
  Mr. Snape: I listened with interest to the complicated explanation offered by the hon. Member for Ripon. I understand that he used to write speeches for the Leader of the Opposition. If today's example is the best that he can do, it

  1417
  may be that that is a reason for the right hon. Gentleman's lack of popularity.
  I move on to some other points about local government reorganisation. [Interruption.] The hon. Member for Northampton, South can have a go, too, if he likes. I am willing to give him a verbal box round the ears any time.
  Mr. Michael Morris: I think it is fair to say that any Labour-controlled council is bound to have a higher rate than a Conservative-controlled one.
  Mr. Snape: The short answer to that is that a Conservative-controlled area is bound to have a lower rate because it is prepared to spend virtually nothing on the essential services that people need.
  I return to the vexed question of local government reorganisation and my point that it is the chief factor behind the tremendous increases that ratepayers have had to suffer. The hon. Member for Hastings (Mr. Warren) told the House about the problems that he is having with his local water authority. We are having the same problems in the West Midlands. The Severn-Trent Regional Water Authority, another child of the Conservative Government, has managed to put up the water rate for my constituents by 64 per cent. in the current year. Even for a body as incompetent as that one appears to be, that is some going.
  As for the county precept, West Bromwich was formerly a county borough, a single all-purpose authority. As recently as 1966, a local government commission held up the county borough as the finest example of local government in the country. In the eyes of the Conservative Party, the drawback of county boroughs was that the majority of them were much too intelligent to elect Conservative councils, with the result that they were replaced by the nonsensical two-tier system of local government. The services have been transferred to the new West Midlands metropolitan authority and now cost us 105 per cent. more than the same services did in the previous 12 months.
  If any more proof is needed, I refer to the Nottingham Evening Post, which has done a detailed breakdown of the cost of local government reorganisation in Nottinghamshire and the city of Nottingham. The statistics which it has produced have not been challenged by the
  1418
  local authorities. It is not difficult to understand why. They are unchallengeable.
  It is fair to describe the work of the Nottingham Evening Post as a fine example d campaigning journalism. I wish that other newspapers up and down the country had done the same. I am sorry that the Nottingham Evening Post has not sent a copy of its research to every Conservative Member so that the Opposition might see the damage that they have wrought on local government and the additional expenditure in which they have involved every ratepayer in the country.
  The Nottingham Evening Post gives some extremely interesting statistics. In the Broxtowe area the percentage increase in posts is 51·5. Salaries have increased by 68·2 per cent. In Newark posts are up by 37·7 per cent. Salaries have increased by 54·6 per cent. In Bassetlaw posts have increased by 28·5 per cent. and salaries by 44·9 per cent. In Rushcliffe the respective percentages are 38·4 and 39·4. So it goes, right through the county.
  Local government reorganisation has been described as NALGO's bonanza. That is slightly unfair. Many NALGO members might be described as the "poor bloody infantry" who stand at the door of the town hall and who staff the housing department. They have not done well out of reorganisation. They find themselves administering far wider areas than before with virtually no salary increases. It is at the top of the pyramid that people have done very well out of reorganisation. Chief officers and their deputies have done extremely well. In Nottingham alone, five deputy directors in one department were non-existent previously. What a prime example of Conservative efficiency in action in local government reorganization !
  That is not all. Not only have the new authorities proved completely incompetent to carry out the functions for which they were designed. Rather than admit their incompetence and rather than their chief officers and deputies admitting that they are vastly overpaid, they have taken to employing a completely new innovation, the PR man. The last refuge of the gin-sodden PR man is local government.

  1419
  This week's UK Press Gazette contains a number of interesting advertisements. Cumbria County Council seeks a publications officer at a salary of £3,939 plus. The Inner London Education Authority wants a Press officer and is offering a salary of £5,927. The city of Liverpool housing department has an advertisement. I had better exclude the city of Liverpool from any adverse comment because I can understand that city, from what I hear of the problems under Liberal control, wanting to employ public relations officers. It is advertising for a chief assistant, publicity and Press relations, and offering a salary of £3,939, and for a senior assistant, publicity and Press relations, at a salary of £2,880. Any avenue will be found rather than admit that local government, as at present constituted since reorganisation, is little short of a disaster.
  Opposition Members may smirk, but the ratepayers know that the Conservative Party was the cause of the disasters and traumas which local government has had to go through, with the result that in the past six months or so we have seen the formation of the ratepayers' answer to the Primrose League.
  It is strange how organisations of this kind are always formed during the period of office of a Labour Government. We never hear of ratepayers' action groups under Tory Governments. Immediately we have a Labour Government, all the redundant Tories decide that they have to do something to stir things up a bit, they form a ratepayers' action group, and off they go.
  Most of my hon. Friends in the West Midlands have had representations made to them about rate increases in their areas. I cannot help reflecting that my right hon. Friend's decision about the domestic rate support grant added a further 6p in the pound in my constituency in March of this year. I was virtually pilloried by the ratepayers' action group in my area, and I had to concede that I voted in favour of the increase because I felt that it was right for the inner city areas. Then, according to my director of finance, my right hon. Friend the Chancellor of the Exchequer gave us back 9½p in the pound in relief in July. In other words, in the past three months we have made a profit of 3½p in
  1420
  the pound out of the Government. Remarkably enough, the ratepayers' action group—a non-political organisation, of course—has not yet got around to writing to me to ask me to thank my right hon. Friend for his action.
  For the future, it is all very well for Conservative Members to demand either the abolition of the rates or a reduction in the services provided. It is not their kids who are educated in crumbling Victorian schools. It is not their families and their dependants who have to rely on social service provision, as many of my constituents have to do. Theirs is the typical rural Tory cry of selfishness which should be ignored by the Department. It should be ignored, and I hope that my right hon. Friend will ignore it. It is not the job of a Labour Government to carry out the fiscal policies of the apologists in the Tory Party. I hope that my right hon. Friend will treat their calls for reductions in local authority services with the contempt that they deserve.
  Several Hon. Members rose—
  Mr. Deputy Speaker: Order. I remind the House that there are 50 minutes left for back-bench speakers and that at least nine hon. Members wish to catch my eye. Hon. Members can help.
  8.11 p.m.
  Mr. Michael Marshall: I hope that the hon. Member for West Bromwich, East (Mr. Snape) will forgive me if I do not follow his speech closely —for two reasons. First, I felt that he was introducing a note of controversy to offset his maiden speech, and I do not feel that it fitted this topic. Second, I felt that he addressed himself to the reorganisation of local government rather than to the question of rates. I assume that it was only post-prandial goodwill on your part, Mr. Deputy Speaker, that allowed us to hear those interesting remarks.
  It is important to take a united view in this matter. I have listened to, I think, 13 of the 16 speeches in the debate and was heartened to find a good deal of accord at least on the basic premise, that rating reform is long over due. If we start from that premise, I should like to explore how far we can bring that reform about and how far hon. Members can contribute to it.

  1421
  I am in some ways distressed that the matter is now so obviously being put into low gear. It is clear that, with the setting up of the Layfield Committee and the revaluation delay that we heard about earlier this month, we are in effect reconciling ourselves to being totally unable to reach any major reforms till towards the end of this decade. In that situation, while I regret it, one must be realistic. I should like to suggest some ways in which I hope that the Government will seek to bring short-term reliefs that, consistent with certain principles, in themselves would hold water in the longer-term improvements on which, I hope, we will all agree.
  I believe that there are three simple principles which should govern the decisions of the Government at this time. I say this in the context of the influence that the Government undoubtedly can, do and should bring to bear on local government expenditure.
  First, the old principle of pay-as-you-go still seems worth advocating, especially in view of the appalling load of capital debt which local government now faces—about £20,000 million, and £1,000 million per annum in interest. Those figures represent one of the most frightening aspects of the present financial state of local government. In the short term the Government should discourage that kind of topping up of the loan element. They can do so by the influence that they bring to bear both on guaranteeing foreign loans and on controlling loans advanced directly to local authorities themselves. At present rates of interest, after all, every ratepayer has to find £60 a year to cover interest charges alone on outstanding debts of local government.
  Second, the burden should be shared more fairly, as several hon. Members have said. As to the means, they are open to argument and debate. I support my hon. Friend the Member for Southend, West (Mr. Channon) in putting forward reasonable proposals for immediately transferring teachers' salaries to the national Exchequer. That would provide immediate relief, and in the longer term I still believe that a major shift to the central Exchequer is inevitable and should be recognised as such.
  There are short-term considerations, too. I should like to add my voice to
  1422
  that of my hon. Friend the Member for Hastings (Mr. Warren) in reminding the Minister about the overdue commitment to give relief to those who are not connected to main drainage. We were promised in the last Parliament that this matter would be resolved, and it is high time that we heard about this.
  The third of my simple principles is that the Government, in their dealings with local government, should once more urge upon them the need to cut their coat according to their cloth. I know that it is easy for us to say that local government is often left to carry out projects when we hold the purse strings, but from both sides of the House there is clear evidence of prestige projects which do not accord with the difficult and almost desperate economic times in which we live.
  I have touched on three central principles which I hope that the Government will follow both for immediate relief and for longer-term improvements to the system, but I cannot conclude without a brief word about water charges. It is evident from the budget proposals of the water authorities that the ratepayers will again face substantial increases—for example, 60 per cent. in the case of my own authority, the Southern Water Authority.
  Such increases bring into question the relationship of those authorities with the central Government—
  Mr. Tomlinson: We told the Tories that in 1973.
  Mr. Marshall: I understand the hon. Gentleman's point. I accept that the Government of the day did not have the benefit of my advice.
  I hope that I can carry the hon. Gentleman with me when I say that, if we are looking to the way ahead, it is more fruitful to concentrate on positive steps which we may be able to persuade the Government to carry through. Water authorities must make the same critical examination of their capital expenditure as we are expecting of local authorities.
  In the longer term we should consider whether water authorities should not be treated more in terms of a national undertaking working with the type of approach which is currently advocated for

  1423
  nationalised undertakings, that of working within a small surplus target.
  In the immediate term, we have to wait for the Layfield Committee. There is no way to evade that, but today we have heard a number of important and valuable contributions. The hon. Member for Manchester, Gorton (Mr. Marks) made a particularly helpful contribution, reflecting some of the concern which has been long established in the House on this matter.
  If we think about the way in which the matter should be resolved I must return to my original theme. I am always a little worried when one Front Bench suggests that it understands why the other Front Bench cannot do something. Even in a short time in the House I have learned the truth of the old saying that when the Front Benches agree the back benches should beware. The delay into which we are locking ourselves means that the back benchers are perhaps the best guardians we have in trying to effect some short-term relief.
  I have tried to be non-controversial. I think it is fair to say that the only really controversial speech came early in the debate from the Liberal bench. I do not want to take that too seriously, but I deplore the fact that the hon. Member for the Isle of Wight (Mr. Ross), who is no longer with us—I regret the way in which Liberal spokesmen tend to make speeches and then leave—injected the first controversial note into what has generally been a constructive debate. I was reconciled by the thought that his strictures upon the Conservative Party perhaps had something to do with the size of his majority.
  Finally, I want to say something rather critical of the Secretary of State. In making these comments I would say that we have looked to the Secretary of State to be helpful in these matters and that, in the main, in many matters affecting his Department, he has shown willingness to react positively to the points of view of back benchers, but in this debate he fell far below the needs of the country. His attempt to play knockabout comedy with the matter did not fit the needs of this whole subject of rating reform. In a sense, he would probably be wise to remember, with his joke about a 100 per
  1424
  cent. increase in rates and so on, that in this matter we do not want to continue with a situation of levity.
  I do not want to belabour the point. The Minister for Planning and Local Government will have the opportunity of redressing the balance tonight and showing to all hon. Members, on both sides of the House, that the Government's heart is in the right place. If it is not, I join with all those who warn that there is a ratepayers' revolution just around the corner.
  8.22 p.m.
  Mr. John Tomlinson: I want to pursue at the outset the point made by the hon. Member for Southend, West (Mr. Channon)—who I hope is not about to disappear from the Chamber. It is a point that was reinforced by the hon. Member for Northampton, South (Mr. Morris). Both hon. Gentlemen spent time criticising the delay which will be inevitable in the report of the findings of the Layfield Committee. It is at this point that we ought to make it quite clear that the reason why there will be a delay in getting any recommendations from any committee looking at alternatives to the rating system is that Conservative Members, when in government, did nothing about it. What we had from them on occasion after occasion was a promise about local government financial reform but the attainment of nothing.
  The Queen's Speech in 1972 said:
  "Legislation will be laid before you to reform certain aspects of local government finance in England and Wales."
  What happened? Nothing. The Queen's Speech in 1973 said:
  "Legislation will be introduced to reform certain aspects of local government finance."
  What happened? Nothing.
  The consultation paper "Local Government Finance in England and Wales" said:
  "The Government will introduce the legislation in time for its provisions generally, and where necessary subordinate legislation, to be in operation from 1st April 1974."
  1st April 1974 came and went. The only thing that accompanied that date was chaos, caused by the incompetence of the previous administration in making any orderly review of local government finance before they reorganised the basis of local government. As I said in the

  1425
  debate on 25th March, it was an act of almost criminal irresponsibility to reorganise the basis of local government without making adequate provision for the reorganisation of its financial base.
  What have we heard in the debate so far? A number of hon. Members have put forward the rather omnibus panacea of "put the cost of teachers' salaries on the central Exchequer and hope that that solves everyone's problems". But if we do a little more sophisticated analysis of the exact consequences of that action, we begin to find that not only does it not solve problems but it creates others.
  For example, the total cost of teachers' salaries at present is about £1,400 million, some 39 per cent. of which is borne directly by local education authorities. If we abolished that, we would abolish the 39 per cent. part of it—about £546 million. But that £546 million would not all accrue to the credit of the domestic ratepayer. It would benefit the domestic ratepayer only to the value of about £250 million. We ought to be asking Opposition Members to be a little more forthcoming not only when their proposition would benefit the domestic ratepayer by a mere £250 million—which is a very small sum in the total scale of the problem—but also when, by the back door, they would be producing an additional cash flow to industry to the tune of about £300 million because they would be writing off the industrial and commercial ratepayer as well.
  Mr. Rossi: Does not the hon. Gentleman agree that that relief would also go to the small shopkeepers and business men throughout the country who are possibly suffering more than anyone else and who must recoup their increased costs in what they charge the domestic ratepayer for what he buys from them?
  Mr. Tomlinson: In his Budget speech my right hon. Friend the Chancellor made certain statements about what will happen. As a Government we have already taken steps to improve the position of industry to the tune of £1,600 million. To add to that a further £300 million, which we would be adding by taking away teachers' salaries from the rates, would have a greater beneficial effect on industrial and commercial ratepayers than on domestic ratepayers. My right hon. Friend's priorities for public
  1426
  expenditure are those with which many of us—certainly many of my right hon. and hon. Friends—would concur as being right priorities with the limited resources available.
  Opposition Members have been going through their increasingly frequent bouts of crocodile tears about the ratepayers, but this time without some of the outrageous hypocrisy they went through on the last two or three occasions. They are all moderates now because they have no policy. They have found that the policy with which they tried to bribe the electorate during the General Election campaign did not work. They are not going through all the outrageous accusations, but they hope that we shall be reasonable.
  In the present circumstances we must make it abundantly clear where the responsibility rests for the financial crisis in local government. It rests fairly and squarely on right hon. and hon. Members on the Opposition side who were totally profligate in their conduct of matters during the period for which they were responsible.
  On 25th March, shortly after my right hon. Friend the Secretary of State took over responsibility for these matters, the rate support grant order was passed by 292 votes to 217, a fairly substantial majority for a minority Labour Government. One begins to ask hon. Members who have suddenly become concerned, where was their concern? It was a concern that arose only when they saw the backwoods pressure from their particular constituencies.
  For example, the right hon. and learned Member for Hexham (Mr. Rippon) seems to have disappeared entirely from the scene although he used to be a prominent leading actor in the scenario of these debates. He has a major responsibility on his shoulders for creating a false and irresponsible impression when he allowed the country to believe that he would be presiding over a rate increase averaging 3 per cent. with a maximum of 9 per cent.
  On 22nd January 1974, less than a year ago, in circumstances which were directly relevant to the rate support grant earlier this year, the right hon. and learned Gentleman said:
  "I am able to say that the average domestic increase over the country as a whole should

  1427
  be about 3 per cent. The maximum of 9 per cent. is to be, as far as one can achieve it, a maximum, but the variations below the 9 per cent. will be very considerable and should result in a reduction in the domestic rate in many areas."— [OFFICIAL REPORT, 22nd January 1974; Vol. 867, c. 1471–72.]
  We are still waiting for what was promised in that outrageously irresponsible speech to come to pass.
  Mr. Michael Marshall: The hon. Gentleman seems to work himself up into a state of great indignation. His hon. Friend the Member for Manchester, Gorton (Mr. Marks) has already pointed out that until the February election it was easy enough to make a speech in the House in a debate on the rate support grant. If there was all this feeling of ill under a Conservative Government, why were not the hon. Gentleman and his hon. Friends on their feet more often pointing to the ill which, according to him, we should have foreseen but which they did not foresee?
  Mr. Tomlinson: Because the House had the benefit of my views, as it had the benefit of the hon. Gentleman's views, only after the General Election in February.
  That being the circumstance, we had that deliberately outrageous and irresponsible impression created. It was an expectation that was deliberately fostered by the right hon. and learned Member for Hexham, who seems to have a habit of doing this sort of thing and then running away from the problem. We on this side remember his similar irresponsibility in relation to sugar, but I will let that pass for the moment. The right hon. and learned Gentleman creates the expectation and then runs away from it and seeks to blame somebody else for the consequences of his own creation.
  The real causes of rate increases this year have been adequately—indeed eloquently—explained by my hon. Friend the Member for West Bromwich, East (Mr. Snape). Not only should those causes be clearly on the record. One or two other matters should also be mentioned.
  For example, in my own area—the Warwickshire county area—there was the totally irresponsible running down of county balances. This practice was multi-
  1428
  plied in many areas where local authorities, seeing the consequences of local government reorganisation, recognising that their local empire would change somewhat and being reluctant to see part of their balances go elsewhere, irresponsibly exhausted their county balances on schemes which in a normal state of affairs would not have been accorded any priority.
  In 1972–73 Warwickshire County Council had balances approaching £2 million. It used those balances in an entirely irresponsible way so that in the year in which major rate increases occurred there were no balances available to mitigate and to cushion the effect of the major increases.
  Tory Members have a great vested interest in playing down the effect of the reorganisation of local government. If they will not accept the point from my hon. Friend the Member for West Bromwich, East, let them accept it from the Economist, which on 23rd March this year stated:
  "Local government reorganisation was bound to be costly, but three factors have caused costs to soar out of hand. Inflated salaries have been paid to management"—
  it will be noted that the inflated salaries did not go to staff—
  "by some new councils. There has been a scramble by disappearing authorities to launch expensive schemes that they could not have afforded had they remained independent."
  There is therefore ample evidence to show that the untimely and ill-thoughtout reorganisation of local government, which was not accompanied by measures to reorganise the basis of financing local government, is largely responsible for this situation.
  I turn briefly to the problem of the growth in local government expenditure. Unlike some of my hon. Friends, I do not believe that the growth can continue unabated in local government without its being constrained by the general economic situation. From 1960 to 1974 local government expenditure grew from £2,000 million to £6,500 million. Over that same period the staff increased by almost 1 million. The town hall has always been a powerful and entrenched bureaucracy, and as a result of local government reorganisation it has become more powerful, more entrenched and more bureaucratic.

  1429
  I was pleased when my right hon. Friend the Secretary of State confirmed in reply to a supplementary question from me that he did not accept that local government could expect its ever-increasing programmes to be cushioned entirely by central Government. There have to be essential priorities in local government expenditure. They will continue, but local government cannot expect to have an expanding programme without constraint in economic circumstances in which the Government themselves are under constraints in their social programmes in other areas.
  It cannot be said that there will have to be constraints upon central Government but that somehow local government can be immune from constraints. We would all like there to be economic circumstances in which there could be an expansion in local government spending and in central Government spending, but exemption cannot be granted just because it is an institution called local government.
  I urge caution on the part of those of my hon. Friend who wish for an ever-expanding programme of local government expenditure at a time and in a year when we have already more than doubled the borrowing requirement. I do not think we can expect to have an expanding programme of local government expenditure if the cost is to be merely transferred to the public borrowing requirement. In the stringent economic circumstances we face, there must be an acceptance by those in local government that part of the responsibility—we hope as small as possible a part—must be borne by them as it has to be borne by everyone else in the community.
  I turn finally to the alternative which was presented both during the election campaign and in this debate by right hon. and hon. Members opposite. They have told us ad nauseam that they would abolish the domestic rate within the period of a five-year Parliament and that somehow during that period they would work out what they would do about it. For example, the hon. Member for Hornsey (Mr. Rossi) recently wrote an article in the Local Government Chronicle as follows:
  "Before selecting any of the available altertives we feel it only right to await the report of the current inquiry into the rating system."
  1430
  He is prepared to await the report of that inquiry before determining what rating system to have, and yet he is prepared to commit himself to the abolition of the existing system.
  I regard it as an act of total irresponsibility to cast overboard the system of local government finance, inadequate and inequitable though it may be but a system which has served this country for many years—and to do so presumably honourably in an election campaign, because I would not suggest that there was any motive of bribery. For anyone on the Opposition benches, however, to commit himself to such a course of action seems to me to be the kind of irresponsibility which will condemn the hon. Member for Hornsey and his hon. Friends for many years to come.
  8.36 p.m.
  Dr. Keith Hampson: I appreciate the opportunity of speaking in this important debate. Whatever the Secretary of State may say, it is timely to have it now before he begins his negotiations. For the same reason that we need to make sure that he is realistic about the situation, many local authorities, including the Bradford local authority which issued a statement yesterday, also feel concerned about whether he truly appreciates the situation.
  A couple of years ago the hon. Member for Birmingham, Small Heath (Mr. Howell), when leading for the then Opposition, condemned ruthlessly the proposed 27 per cent. increase. He called it wholesale chaos. He forecast thousands of teachers and policemen being kicked out of their jobs. Most ratepayers may see an increase far beyond that percentage, and it will happen in the next year unless the right hon. Gentleman and his Government do something about the rate support grant. That is the key, the only thing which will affect the situation next year.
  I hope that the ratepayers are made aware of what has been said from the benches opposite in this debate. Of the last few speakers not one has mentioned the rate support grant. Not one of them asked the Government to make any adjustments to the formula—
  Mr. Ronald Brown: The hon. Gentleman is being unfair. I addressed myself particularly to that point.
  Dr. Hampson: I said "the last few speakers." The hon. Gentleman spoke some time ago. He has not been in the Chamber for some time.
  The hon. Member for Meriden (Mr. Tomlinson) should be a little more accurate. I accept that local authorities ran down their balances, particularly before reorganisation. It was Labour-controlled authorities which did that with a vengeance, in order to pass on their debts and charges to the new authorities. To blame reorganisation for the increase in the rates is crazy. We have heard from the Government that in the last three years local authority expenditure has been running at twice the level in real terms at which the Chancellor of the Exchequer now wishes it to run. I recall that in the last three years my own party did not do as well as it ought to have done in the local government elections. In the last three years, therefore, this massive expenditure has been coming from the Labour-controlled authorities, particularly the city ones.
  When one talks about reorganisation boosting staff, I accept that in many instances local authorities were extravagent. But who were they? It is a shame that the hon. Member for West Bromwich, East (Mr. Snape) has left the Chamber. He cited authority after authority, including Nottingham, and not one was a Conservative authority. Nottingham is not a Conservative authority. West Yorkshire, which prompted my right hon. Friend the Member for Crosby (Mr. Page) to institute an inquiry into excessive staffing, is not a Conservative authority.
  What nonsense and what distortion are we getting in this debate. The key to it is partly the borrowing factor and, obviously, inflation. We have seen from the Chancellor's statement that he is as concerned about levels of local government expenditure as we are. The proportion of total public expenditure represented by local government spending has steadily risen and it is now about 30 per cent. The Chancellor knows that to get on top of inflation he must control that spending. When my right hon. Friends were in Government they urged local authorities to control their expenditure, but most of the authorities, particularly the Labour-controlled ones, refused to follow
  1432
  that advice. Clearly, the Government must now get down to restraining their own people in local government.
  It is unjust for Labour Members to accuse Conservatives of wanting to cut social services, education and so on. Of course, we would rather not do so, but even to maintain existing levels of services would require at least a 30 per cent. rise in the rates this coming year. The North Yorkshire authority has been building up a debt like most authorities, but it has not wanted to put in for a supplementary demand. It estimates that it will be in the red by £10 million. It will cost another 4p to meet the charges on that debt and a further 8p to cover that rate of inflation, hence the 30 per cent. increase. Bradford has also announced that just to cover inflation it will require a 30 per cent. increase without any expansion of services.
  There are obviously difficulties in expecting local authorities to make major cuts next year because they are involved in all the rolling programmes described by hon. Members. That is why the key to the problem is an adjustment of the rate support grant. The authorities face many inescapable costs. For example, there are an increase in school places and an increase in school meals to be met. In Bradford there has been an increase of 4,800 school meals these last six months. In that city it costs £200 on the rates for each new house built. An authority does not have to be very big before that amounts to £1 million or more. Those are the inevitable costs which must be added to other costs like threshold payments, wage demands and the rest.
  We are, therefore, in an acutely embarrassing situation with the authorities for next year. The same sort of swingeing increase in the rates will have to come unless the Government do something about the rate support grant. There is no point in the jack-in-the-box performance we have seen from the Secretary of State since he has been in office being repeated. If we are going to do something specifically for householders that must be done now in the negotiations, not four months later when it will cause havoc, chaos and extra administration costs for the authorities which have had to go through all the adjustments again,

  1433
  not by computer but by hand. What about all the other expensive costs, not just the public relations men and the rest, but the nitty gritty of the local authority wage bills—the men, for example, who run the rebate scheme? Higher rates mean more rebates, which means more administration which means more officers to administer it.
  Other legislation that the Government are planning to put before the House in the not-too-distant future—particularly their land legislation—will cause an astronomical rise in staffing costs for local authorities. The authorities will have to take on more valuation officers and all the other people who will be involved in these land deals. Can we therefore get the situation into perspective when we try to pin down costs? I am not so much worried about attributing blame, more with getting something done for the domestic ratepayer, the small shopkeeper and the other categories who will be hard hit in the coming year. The Government simply must do something with the rate support grant.
  One particular extra cost will arise. The Houghton Report is due to come out in two stages, one before Christmas, and any award to be backdated to April. How will that cost be met? Will there be a special subvention from the Treasury, or will it be a debt on local authorities to be covered on next year's rate? What happens to the second phase next year? Will it fall generally on the local authorities, or will something be earmarked by the Treasury? That is what I should like to see. If this is now covered as part of the educational element of the rate support grant, there is no guarantee that money contributed for teachers' salaries in that grant will go to provide teachers, and that we shall not see, as in Leeds—another Labour authority—school places remaining unfilled.
  My next point concerns the water and sewerage charges. The Government have, we hear thankfully, given a commitment that there will be relief for those not connected to mains sewers. How will that be paid for? The administrative costs of trying to find those who are not connected to the mains sewers are already high. Will the cost of the relief be put on the other ratepayers?
  1434
  The local authorities are still suffering from the adjustments, first down and then up, that the right hon. Gentleman has made in the past few months. They are still working out their rebates. If there are to be the same swingeing increases next year we shall have all the frustrations of citizens refusing to pay their rates. There will probably be rates strikes. Serious cash flow problems could be caused to local authorities, as well as backlogs and administrative chaos.
  We must ensure that the negotiations go through smoothly and that local authorities get what they want. Even with a 70 per cent. grant there will probably be 20 per cent. increases in rates.
  When the hon. Member for Birmingham, Small Heath was spokesman for the then Opposition he always seemed to have a phobia about revaluation. He always wanted to postpone it. Now the Government are trying to postpone it again. The local authorities have made their disquiet well known to the Secretary of State. Postponement exaggerates the weaknesses in the rating system, which cannot carry the burdens of inflation.
  Because of that and increasing costs we shall once more soon have a rate of £1 and more per £. That will cause tremendous psychological damage and great fury. We shall find local authorities being squeezed and services being cut. As a proportion of personal income, rates will go well beyond what they have always been kept at. There will be more and more disenchantment with the whole system of local government, and an erosion of confidence in it, confidence which is already shaky. We shall see social upheaval and political dislocation far greater than we have ever seen in this country.
  8.48 p.m.
  Miss Joan Maynard: The outlook for local government is bleak. The Sheffield Metropolitan District looks like exceeding its £60 million budget by £3 million. The likely increase in teachers' salaries resulting from the Houghton Report might well add a further £8 million.
  I want to consider where the blame lies for the financial difficulties faced by local government. The most expensive form of reorganisation we could have had,

  1435
  coupled with a lack of reorganisation of local government finance, is the main cause of the serious financial difficulties. It is true that we can add the effect of inflation. Local government is labour-intensive, and, therefore, it has probably suffered more from the threshold agreements than some other organisations have. There was a 21½ per cent. increase in prices, when the Government grant assumed a 9 per cent. increase. That is a dramatic difference, which has badly affected local government. If we add to these things the high level of interest rates, the fact that in Sheffield the loan debt is £260 million and that there is an active annual capital programme of about £30 million, we have some idea of the difficulties faced by progressive cities.
  Next year's expenditure will rise by over 50 per cent.—and that is on a standstill budget. Local authorities are faced with either making cuts in services, which would inevitably mean in education and the social services, or introducing a steep increase in rates. Whatever we finally decide to do about rates, something must be done to help local authorities. There has been a good deal of talk about essential expenditure and just what that is.
  I have been a member of local authorities for many years. In my opinion, expenditure on housing and education is essential. There is a desperate need to provide more houses and new schools. I do not wish to see either of these services cut. Many have asked where the money will come from. It could come from a cut in the defence programme. That is where I would find it. I know that the Government say that there are difficulties in finding extra money, but I say that local authorities must have substantial extra grants to help them over this difficult period.
  8.52 p.m.
  Mr. Andrew Welsh: I notice that until now I have been the only Scots Member present in the Chamber. So far there has been no Scottish contribution. I find that sad. I say to all English hon. Members that they can fall asleep for the next 10 minutes or so. However, I hope that right hon. Members will remain awake long enough to pass on the good news to the appropriate people.
  1436
  The present rating system faces us with a basic dilemma. We have the problem of matching up two opposing ideals. On the one hand we demand great quality and diversity from our local government services, and in the main they have matched up to that challenge well. We ask a great deal of our local authorities, yet at the same time we also look for low rates. Few topics can raise more grumbles than that of rate demands. What is required is the matching up of efficiency and value for money from rates paid to local authorities.
  This problem is made more difficult by the present rating system whereby the burden of payment tends to fall on one person in each household. The present system will come in for increasing criticism in the coming months as rate increases begin to bite.
  The system is open to accusations of unfairness because the burden falls on the householders while there may be several others in the same house receiving the benefit of services without contributing toward them. A similar complaint applies to those who live in small burghs but gain the benefit of the services supplied by larger towns.
  The system is open to accusations of unfairness because also of the present inflation, which has caused rapid rises in prices, and because of England's current economic difficulties. I say "England" advisedly. I suggest that hon. Members acquaint themselves with the latest report from the Scottish Council (Development and Industry) before they disagree with me too rapidly on this.
  The system is open to accusations of unfairness as a result of the effects of the disastrous regionalisation that has taken place. The new districts and regions in Scotland will be costly. As a district councillor I could see the beginnings of this process. The English example shows that some Scottish ratepayers may soon face rate increases of 100 to 150 per cent. These will especially affect the small burghs which have now been absorbed into nearby large towns. Ratepayers will inevitably face large and unprecedented increases.
  I ask the Government to learn from the English example and to ease the shock of this giant increase in rates for the Scottish ratepayers over the next few

  1437
  years. The Government should earnestly consider phasing in these increases in Scotland by means of a transitional rating system. Instead of one gigantic jump in the rates bill, these increases could be phased over the next few years. Given the low level of Scottish wages, such a transitional period could greatly ease the inevitable strain of those rates increases. The revaluation due in 1978 need not necessarily be a hindrance to phasing the increases beyond the three-year period. I hope that this request will receive a favourable response from the Government and that the English mistakes will not be repeated in Scotland.
  There is no easy answer to this problem, but something must be done to ease the rates burden. A large part of that burden is brought about simply because of massive spending on crucial items such as housing and education. For example, Glasgow has a gigantic housing problem with an estimated 80,000 to 90,000 houses below tolerable standards. In trying to solve that problem Glasgow faces an enormous annual bill for interest charges—over £21 million in 1972–73—and over and above that there is a net capital debt of more than £280 million. In any event, as Cullingworth pointed out, Glasgow simply cannot solve its housing problem because it does not have the resources to do so. Only the Government have the required funds. Thus, Glasgow ratepayers face an impossible task.
  There is a good case for investigating the possibility of transferring these burdens from the rates on to the central Government, but with the major proviso that I am talking about the Scottish context. In lieu of self-government this could be one of the prime functions of a Scottish Assembly. I make the big assumption that such an organisation will come into being. I hope that the House will forgive my scepticism over this matter. Given adequate financial power a Scottish Assembly could play an important rôle in helping to solve the Scottish housing problem and in easing the rates situation.
  If anyone is unwilling to see large sums of money used for this purpose I should like to see sums similar to those spent by central Government on wiping out the debts of nationalised industries
  1438
  and London Transport used to tackle Scotland's housing problem.
  I am wary of mentioning Scotland's oil since Scottish hon. Members—it is a pity there is none here—seem embarrassed, for some reason or other, whenever that subject is mentioned. However, a portion of that vast asset could be used to get to the financial roots of Scotland's education and housing problems. That would help to ease the heavy burden of rates debt.
  I hope that the Government will investigate and research closely proposals such as municipal banks, which could help local authorities in many ways. I should also like to see a detailed Government investigation into local income tax ideas.
  I repeat, there is no easy answer to this situation. Rates are a real problem about which we shall hear more in Scotland as the vast increases hit the relatively small numbers of ratepayers. It is a problem of balancing the needs of finance with those of equity. It demands a twentieth century solution to what is very much a twentieth century problem. I hope that the Government will look favourable upon my request for transitional rating as a first, short-term attempt to ease this problem.
  8.59 p.m.
  Mr. Wyn Roberts: The hon. Member for South Angus (Mr. Welsh) confined himself largely to the problems of Scotland. I make no apology for addressing myself to the problems of Wales.
  I am concerned about the current rate support grant negotiations for the Welsh counties, all of which, with the exception of Gwent, have a higher proportion of low-income families than the national average. That, of course, is the reason for the differential in the domestic rate support grant. We have had the benefit of the differential of 33p in the pound as opposed to the English 13p. We are grateful for that and we are desperately anxious that it should continue. My county of Gwynedd heads the list of those authorities with a higher proportion of low-income families than the national average. It is followed by other Welsh counties—Dyfed, Powys and Clwyd. The only comparable English counties are Devon and Cornwall.

  1439
  An assurance was given by the Secretary of State on 27th June. He said that
  "we should take full account of the level of wages and other incomes in an area, which I am determined to do for next year's grant."—[OFFICIAL REPORT, 27th June 1974; Vol. 875, c. 1769.]
  The Minister's resolution is to be commended. He will not find it easy to take the full account he has promised if he relies on the rate support grant needs formulae which have been under discussion of late. I believe that he must have a special fund to deal with the counties I have mentioned. Obviously the needs of the low-income counties are considerable and they are not reflected in their actual expenditure, which is the basis of the needs formula. Unless the Minister is prepared to have such a fund the rate precept in the low-income counties will be enormous. I am certain that the commercial ratepayers will not have the ability to pay.
  Gwynedd's precept for the current year was among the highest in England and Wales at 47·5p. It was fifth from the top. Dyfed and Powys were in the top 20 bracket. These are the poorest counties and they have high rate precepts. If we regard rates as taking from the haves to give to the have nots, in our case it is taking from the "have nots" to give again to other "have nots". I assure the Minister that there will be strong resistance to any increase that is proposed in the rate precept for the current year. If commercial ratepayers are backed by the domestic ratepayers I can foresee an ugly situation in my part of the country.
  It is an area which has already been impoverished by the agricultural situation and the low prices given to the livestock farmers. There is every argument for special treatment for the rural areas. They are extreme not only in terms of low income but of low-density population. The formula seems unable to cope properly with such a situation. Reference is made to acreage above 1·5 per head. The acreage in Gwynedd is 4·3 per head. That is way above the reference point.
  Gwynedd has to cater for an enormous increase in its summer population owing to the influx of holidaymakers. Further, it is the retirement area for Lancashire
  1440
  and the Midlands. We all know that the elderly have special needs, and those needs are catered for in my constituency. The national needs formulae, ingenious as they are, do not take these special factors fully into account. The only answer would seem to be a special allocation for the areas of exceptionally low income and low-density population. I hope that the Minister will see his way clear to providing this. Otherwise I see a very grave problem ahead. If that were done, other, more normal, areas would get a fairer deal in relation to one another.
  I reiterate that if the Government are not able to give special attention to these low-income, low-density areas largely dependent on agriculture, which is suffering at present, I see grave political troubles ahead. There will certainly be political repercussions for the Government.
  I regret that, as a Welshman, I am largely alone in this debate, like the hon. Member for South Angus, but I assure the Government that my colleagues on both sides of the House will return with vigour to this subject if the Government do not react in the way we hope for.
  9.5 p.m.
  Mr. Hugh Rossi: This has been a serious and sober debate as is befitting a subject which is causing agonies of anxiety to families throughout the country. Hon. Members on both sides of the House have reflected that anxiety in the speeches they have made on behalf of their constituents.
  My hon. Friends the Members for Bedfordshire, South (Mr. Madel), Hastings (Mr. Warren) and Arundel (Mr. Marshall) have said that local feelings are so intense that they fear a rate revolt if the rates increase to the extent forecast for April. The hon. Lady the Member for Barking (Miss Richardson) said that the rates in her area might increase by £2 a week in April and that that "will defeat many families". In my constituency, where we had an increase of 30 per cent. in the rates last year, an increase of 60 per cent. is forecast in the coming year. That will mean a rate demand of more than £1 in the pound of rateable value. I do not think many local authority areas will have that distinction. There will be real despair for many, many households

  1441
  and ruin for countless small businesses in my constituency.
  Therefore, it is not surprising that a sober mood has gripped the House as in recent weeks one authority after another has forecast rate increases of 50, 70 and even 100 per cent. over this year's tremendous and crippling increases.
  The one discordant note we have heard in the debate was struck by the Secretary of State for the Environment, who made a speech of a levity completely unbecoming the seriousness of the situation. Last week, in answer to my question, he joked that he did not think that the rates would go up as much as 100 per cent. He had the good grace then to apologise for a joke in bad taste. But today he sneered and jibed his way through his speech, making a cheap and unbecoming attack on my right hon. Friend the Member for Finchley (Mrs. Thatcher), who was not in the Chamber at the time. Clearly—the Secretary of State admitted this—he had nothing constructive to offer, so he played for laughs from the appreciative claque in the tiers behind him. Those laughs will not be echoed in the hearts of local authorities and ratepayers when they realise that the right hon. Gentleman will hardly lift a finger to help them.
  None of this should surprise us, because in February 1973, in Newcastle, the right hon. Gentleman made his position perfectly clear. He said:
  "Taxation should be higher under a Labour Government if we are to carry out our social programmes. We shall never find another source of as much money as accrues through the rating system."
  That is the attitude of the right hon. Gentleman to this subject. What is more, hon. Members who were here will remember that in the summer the Secretary of State resisted the proposal that immediate interim relief should be given to domestic ratepayers. My right hon. Friend the Member for Finchley carried the House with her on that occasion and defeated him. He had to find £150 million to help ratepayers, and he has never forgiven her for making him do it.
  What did the Secretary of State say in his speech today? Essentially he made three points. He said: "It is not my fault that the rates are so high. It is the fault of reorganisation carried out by the last administration." Secondly, he
  1442
  said—this is now being echoed in comments from sedentary positions—that the Conservatives did nothing to reform the rating system between 1970 and 1974. Thirdly, he said, in effect, that the Conservatives should not have embarrassed him during the General Election campaign by bringing forward proposals which he could not now accept without losing face.
  Let me take each of those propositions, which I reject as false alibis for doing precious little. First, on reorganisation the right hon. Gentleman knows quite well that all political parties were agreed that after 80 years the structure of local government needed modernising. It was the Labour Government of 1964–70 who set up the Redcliffe-Maud inquiry into local government reorganisation. This contained one major defect. There were no terms of reference to consider and study local government finance at the same time as other matters. If that had been done it is possible that things would have been different. But the Labour Government at that time accepted the Redcliffe-Maud report which implied huge unitary authorities which would have produced similar results in financial terms as has the present structure. This is because local government salaries, gradings and posts depend entirely on the size of population and the responsibilities that the officers undertake. That would have flowed equally under the Labour Party's proposal as under ours. Therefore, there is no alibi here, even though the Secretary of State tries to trot out alibis on these occasions.
  After the event we felt that local authorities had overdone it. They had over-gingered the gingerbread. They had created establishments that were far too elaborate and they had, in many cases, paid salaries that were far too high. That is why my right hon. Friend the Member for Crosby (Mr. Page) as Minister of State ordered an inquiry into the situation. The present Government have buried the results of that inquiry. We are still waiting to hear those results.
  My hon. Friend the Member for Southend, West (Mr. Channon) in opening the debate made the point to which the right hon. Gentleman did not reply, although he had an opportunity to do so. My hon. Friend asked about the inquiry and the results. He also asked when are we

  1443
  to be told the results. There was complete and utter silence. But we still want to know. The country still wants to know, and it still wants an examination into local government structure. Do not let us hear any more from the Government side of the House about this canard regarding local government reorganisation.
  The next point raised by the Secretary of State was that the Conservative administration did nothing except produce a Green Paper in 1971 which led ultimately to the conclusion that it would be difficult to replace the rating system. Before he throws that kind of stone, let him refer to the statements that the late Richard Crossman made in the House when he was Minister of Housing in 1965. He said:
  "what we face now is a situation in respect of rates which is so serious that we must introduce reform and a radical change in the shortest possible time."
  He went on to say:
  "No one can afford to tolerate rates going up at a compound interest of 8 per cent. … The system must be changed."
  He gave this pledge on behalf of his Government in May 1965:
  "We shall reform the rates."—[OFFICIAL REPORT, 5th May 1965; Vol. 711, c. 1492.]
  The Labour administration of 1964–70 came and went, and nothing was done. Let not the right hon. Gentleman throw stones in that glasshouse.
  It was left to us to institute the study in the form of the Green Paper. Meanwhile we transferred the whole cost of the National Health Service, plus 90 per cent. of student grants, from local authorities to the Exchequer, the transfer of a burden of £348 million. Do not let the right hon. Gentleman say that we did nothing.
  When rating revaluation took place in 1973, after a deliberate delay of 10 years by the Labour Government—as they are doing again now—Anthony Barber gave relief to ratepayers of one-half of any increase above 10 per cent. [HON. MEMBERS: "Oh."] Government supporters may scoff, but the ratepayers will be well pleased if the Secretary of State gives relief today of one-half of any increase above 10 per cent. Let him do that.
  Furthermore, we consistently raised the rate support grant until it reached the
  1444
  unprecedented high level of 60·5 per cent., about £3,500 million. Let us hear no more of that nonsense from the right hon. Gentleman. If he has nothing better to say to the House, he had better stay away.
  The events of last winter and the inflation to which we were subjected, including the quadrupling of oil prices, completely transformed the situation. That is essentially what caused rates to go up to an unprecedented level.
  I now come to the election campaign, when my right hon. Friend the Member for Finchley came forward with her proposal that, in addition to the health services and student grant transfers that had already been achieved, we should transfer the cost of teachers' salaries, the police and fire services. That would have meant another £500 million.
  Mr. A. W. Stallard: What stopped the hon. Gentleman's Government from doing that in 1973?
  Mr. Rossi: We did what was necessary in 1973 and we did not have complaints made against us as complaints are being made against the Government now, and will be made from the ratepayers.
  The Secretary of State made a great fuss about the proposal of my right hon. Friend the Member for Finchley during the election campaign for a James-type inquiry, sitting every day of the week—not a leisurely one, more suited to the right hon. Gentleman's character than to hers, sitting fortnightly—to produce a report in 12 months, not by the end of 1975, so that rating reform could start as rapidly as possible. The languor of the Secretary of State stands out in sharp contrast to the determination and drive of my right hon. Friend. Therefore, he retreats behind his shield of sneers and cheap cracks.
  Enough of the right hon. Gentleman. Let us examine the problems that face local authorities and see what should be done to help them. Since 1947 this House has passed over 1,000 Acts of Parliament imposing new powers and duties on local authorities, and a whole range of Government Departments are constantly pressing for action on that legislation. The effect is cumulative because

  1445
  today local authorities are inescapably committed to a growth of between three and nine per cent. in the forthcoming year. The effect on their costings is obvious.
  In the last seven years local authorities have been in a ferment of reorganisation as a result not only of RedcliffeMaud but also of the reorganisation required by Parliament of the education services, the social services, town planning, housing, rents and rate rebates and the whole area of public participation in every field. As the right hon. Member for Jarrow (Mr. Fernyhough) said, we cannot expect local authorities to provide the services we press them to provide in answer to constant requests on the Floor of the House and not expect a large bill to pay at the end of the exercise. The situation would have been containable and tolerable were it not for inflation which has taken everybody completely by surprise. Nobody lays any blame on the right hon. Gentleman for that.
  What is the effect of the situation? It is an effect which we shall have to study and in relation to which the Secretary of State for the Environment has said he will give aid to the local authorities. Very few local authorities have allowed for what they consider to be the rate of inflation which they have undergone this year, namely, a figure of 17 per cent— not 8·4 per cent. or even 26 per cent. The local authority associations after their analysis have arrived at the figure of 17 per cent. Let us add to that the crippling interest charges which local authorities have to pay on their school and house building programmes. I do not think anybody so far in the debate has mentioned the problem faced by local authorities in servicing the current loan charge which is at a peak of £22,000 million.
  What the local authorities have asked the Secretary of State to do—I cannot see why he has refused—is to give assistance to get them out of that situation which they have faced in the last two years. First, they want the right hon. Gentleman to accelerate the instalments of the rate support grant because the sooner they receive those instalments from central Government the less will be their borrowing debt and interest charges. But I emphasise that the right hon.
  1446
  Gentleman has refused to take that action and he has given no explanation.
  Local authorities have also asked the right hon. Gentleman—it is a reasonable request—to make good their 1974–75 deficiency, which has arisen wholly because of inflation. That is an enormous sum of money amounting to £1,500 million. That is the figure needed to offset the cost of inflation this year on local authorities. Local authorities have an extremely powerful argument in making that request. The increased revenue resulting from inflation goes to central Government. As incomes rise, so the income tax on those incomes grows, is collected and goes to the central Government. But this does not happen to the rates. As we know, rates are not a buoyant tax.
  Therefore, it is not unreasonable for local authorities to say "As our basis of taxation is static, whereas that of the central Government is buoyant and you are getting an advantage from inflation, why not pass on to us that element which will take away from us all the problems arising because of inflation entirely outside our control?" The Secretary of State rejects that entirely—
  Mr. Stallard: So did the Conservative Party.
  Mr. Rossi: We were not in that position. If we had been, we would have reacted to it. Our position has been made plain in the past few months, whether or not Government supporters accept it.
  Mr. Ronald Brown: It was the Conservatives who caused it.
  Mr. Rossi: The local authorities are left with three options. The first is that they must obtain a substantial increase in the rate support grant for next year, as has been suggested by my hon. Friend the Member for Ripon (Dr. Hampson) and by the right hon. Member for Fulham (Mr. Stewart). I take it that the Secretary of State cannot disclose his hand before going into his negotiation on 26th November. But let us add our plea in this House to that of the local authorities that the necessary finance is made available to the local authorities. Let us do that. by the vote that we shall have in a few moments' time.

  1447
  The second option is a substantial increase in rate demands. I need not describe what that implies for ratepayers. There is no need to go further into that possibility.
  The third option which has been referred to by a number of hon. Members in the debate is a substantial cut-back in services. If that is what the Secretary of State advises local authorities to do, is he prepared to give them guidance about the services which should be cut? We have had from him not a word about that. It may be that the Minister for Planning and Local Government will tell us what he feels the cuts in services should be if the rate support grant is not increased to the extent that the local authorities feel to be necessary.
  Mr. Stallard: In the same way as we asked the Tory Government to do in 1973.
  Mr. Rossi: Having said that, it would be wrong to conclude this discussion without a word to the local authorities about their own spending. There is indignation thoughout the country about the size of their structure, the size of their establishment and the salaries being paid. In my own authority we now have one local government employee for every nine families.
  Mr. Ronald Brown: It was set up by the hon. Gentleman's party.
  Mr. Rossi: We did not set up the officer establishment. That was done by the Labour-controlled Haringey council.
  As for economies, we all receive conflicting suggestions. Let me put one or two of them to the House. One teacher came to me saying "It is dreadful. I have to make my children draw on both sides of the same sheet of paper because money is so tight", as though that was really to be deplored. Another teacher came to me saying "I worry when I see a five-year-old child destroy in five minutes a piece of paper which costs 5p., and I wonder what benefit that child gets out of it."
  Another constituent—[Interruption.] I am reporting to the House what a member of the teaching profession has said to me. Hon. Members must make their
  1448
  own judgments upon it. Someone else has said to me "Is it right that my wife, who is earning £40 a week, should get a free pass on the buses because she has just passed her 60th birthday?" This is a matter that hon. Members and ratepayers can judge for themselves.
  Is it right, for example, that the London borough of Greenwich should be changing at this moment from discs to cassettes in its record lending library? That is a small matter, but the bill at the end of the year would be worth examining.—[Interruption.] It seems too much to impress on Labour Members that local authorities should conduct their financial affairs in much the same way as one expects them to conduct their personal financial affairs—not simply "Can I afford it?" but "Is it really necessary, or can I do without it? How much more important is that question when one is dealing not with one's own money but with other people's.
  This should be the basis of public expenditure, but, obviously, this is not the kind of comment to which Labour Members take kindly. This is why we get such statements as we had from the Secretary of State, about rates being the best form of tax for collecting money for this kind of expenditure.
  Another example came to mind the other day. An organisation produced a report to the effect that in a certain school children who were receiving free meals were sat at a separate table from children who were paying for their meals.
  Miss Betty Boothroyd: Shame.
  Mr. Rossi: I agree that one cannot see the necessity for that. One would have thought that it was not beyond the bounds of ingenuity to have arranged a system whereby the children receiving free meals were not indicated in that way. But what was the suggested solution? It was not an administrative alteration but the provision of free school meals for everyone, at a cost of £250 million across the country. It is when concepts like that are put forward seriously and pressed upon local authorities that ratepayers get these enormous bills.
  What is required is an eye to economy that has not existed in our town halls up to the moment. I hope that the right hon.

  1449
  Gentleman will insist upon this in his negotiations with the local authorities, because it is something that we should certainly have insisted upon. However, given all the factors that we have discussed, the situation brought about by inflation and the appalling debt of local authorities, with forward commitments that they cannot escape, it behoves the Secretary of State not to joke and sit back languidly but to take action and help.
  9.34 p.m.
  The Minister for Planning and Local Government (Mr. John Silkin): I should like to start by adding my congratulations to those of my right hon. Friend to the hon. Member for Southend, West (Mr. Channon) on three things. I congratulate him first on his new promotion. Second I congratulate him on his great courage. I know what he has been through in being present in the House at all today, because he has been in some pain. Third, I congratulate him on his courage in opening the debate. It was a job which was, perhaps, bequeathed to him by one of his many predecessors, and which I am sure that he, with the common sense that he has, would never in a million years have asked for.
  I wish that I could equally congratulate the hon. Member for Hornsey (Mr. Rossi). He started with a bang and ended with a most curious whimper. I want to impress upon him one point. When my right hon. Friend the Secretary of State was referring to his right hon. Friend the Member for Finchley (Mrs. Thatcher) there was, I think, a considerable amount of amusement, but it really was not confined to the benches on the Government side of the House. I think that it was felt on both sides of the House. I pay the right hon. Member for Finchley the compliment that I am absolutely certain that she too will enjoy what he said.
  I said that the hon. Member for Hornsey ended with a whimper. It was rather a whimper. After launching a long polemical attack on what his hon. Friend rightly said was a matter which should be conducted with understanding and sympathy across the Floor of the House, he ended up with discs and cassettes in Greenwich. At that stage I lost him, and I am afraid that the rest of the House lost him too.
  1450
  My right hon. Friend the Member for Jarrow (Mr. Fernyhough) made the point that we should all bear in mind: that local authority services need to be paid for. That point was amplified by my hon. Friend the Member for Sheffield, Brightside (Miss Maynard). The question is, very simply, how?
  Let me say straight away that I accept that the rating system, at least in its present form, appears to have very few friends, and this of course—I accept it—is primarily the radical consequence of inflation. It is in major part, though not in sole part, the massive upsurge of inflation in the past years which has exposed the weakest points of the present rating system. But for that we might have seen many hon. Members and one or two right hon. Members leaping gallantly to the system's defence. But for that we might have encountered again the same hostility to change that the right hon. and learned Member for Hexham (Mr. Rippon) showed when he was in a position to consider the workings of the system.
  That is all history. The rates rose steeply and the movement for change gained many new adherents. I do not know whether my right hon. Friend the Member for Fulham (Mr. Stewart) qualifies as a new adherent or a medium-term adherent, but he analysed the need for change with a lucidity which I envy. But it seems to me that if there is to be change it requires three things. It must be well thought out, it must be impartial and it must be lasting.
  That was why my right hon. Friend last June announced the setting up of the Layfield Committee. I know that this move was welcomed throughout the House. I was, therefore, just a little surprised during the last election to hear the right hon. Member for Finchley defending a number of instant and far-reaching changes to the rating system even before the Layfield Committee had got to grips with the problem. Domestic derating and the transfer to the Exchequer of the payment of teachers' salaries figured prominently in the Conservative election manifesto.
  Mr. Stallard: They never did it. Bribery.
  Mr. Silkin: As we can see and hear—late-comers as well as those who have

  1451
  been here throughout the day—these demands were repeated in the House today, notably by the hon. Member for Southend, West, but, of course, by many other hon. Members.
  I am not saying that those who call for these measures are necessarily wrong. There is every reason why those who feel strongly that these measures are the answer should make their views known to the Layfield Committee. I hope that the hon. Member for South Angus (Mr. Welsh) will inform the three Scottish members of the Layfield Committee of his anxieties on this score. It would be quite wrong for the House to act upon them now before the Committee has had a real chance to consider them in the light of all the possibilities that exist. To do otherwise would be merely to preempt the judgment of the Layfield inquiry.
  Suppose that the inquiry were to produce a solution commanding a large degree of support in all quarters but which in fact ran counter to the ideas the right hon. Lady, the hon. Gentleman and their Friends have put up. The House would then have to do another turnabout, with all the administrative inefficiency that that would entail. If we want Layfield to succeed, if we want Layfield to produce a really lasting system, we must give the committee its head without preconditions.
  Mr. Douglas Hurd (Mid-Oxon): The committee is meeting once a fortnight.
  Mr. Silkin: The hon. Gentleman is being a little unjust, not only to Mr. Layfield, who is a very distinguished lawyer, but also to, among others, those members of his own party who are on the Layfield Committee. They are not meeting once a fortnight to go slowly. They are as much, and perhaps more, aware of the urgency as is the hon. Gentleman. What they are concerned with at present is the taking of written evidence. If the hon. Gentleman can read, he knows that reading written evidence takes some time.
  Mr. Channon: Let us assume that the Layfield Committee comes up with a solution that involves the radical recasting of the rating system and its abolition. What then will be the timetable before proposals are brought before the House?
  Mr. Silkin: It would rather depend upon how radical those proposals were and when the committee brought them forward. The hon. Gentleman would need as much time as I would to examine them and to see that we felt they were right—[Interruption.] I did not notice the hon. Member for Stretford (Mr. Churchill) objecting to the setting up of the Layfield Committee. Perhaps he should talk to some of his Conservative friends, who may give him a better idea of what is going on.
  Let us suppose that the Layfield Committee is taking a certain amount of time in considering written evidence. Is that so important provided that the committee's answers are correct? The removal of teachers' salaries to the Exchequer, for example, is an idea that requires some thought and analysis. It may be right or it may not. At least we should be satisfied that it can be done without fatally damaging the independence of local authorities.
  The right hon. Lady the Member for Finchley had to conceal her amusement, she said—this is HANSARD for 5th November at col. 895—at the sight of local authorities queueing up to ask the Secretary of State for more money, and she said in so many words "What price independence now?" There is a real problem here. Where can one turn for advice?
  Why not turn to the Conservative Green Paper, "The Future Shape of Local Government Finance", Cmnd. 4741? The hon. Member for the Isle of Wight (Mr. Ross), in a characteristically fair speech, quoted part of it from Appendix 1, paragraph 1.22. Perhaps hon. Members would care to listen to their own Conservative Green Paper. This is what it says:
  "… it is a cardinal feature of our educational system that local authorities are responsible for the satisfactory staffing of their schools, and thus for the employment and conditions of service of their teachers. Leaving local authorities with these responsibilities while passing the bill to central government would sharply divorce financial from managerial responsibility. It would also hinder the development at local level of better forward planning of educational expenditure, which requires that all the resources involved —teachers, buildings and equipment—should be taken into account on a common basis when expenditure decisions are taken."
  These are important words and, furthermore, words which at that time had no

  1453
  doubt been cleared with the Secretary of State for Education and Science who, as it happened, was the right hon. Lady herself. Instead, there are those who claim to detect the right hon. Lady's own hand in the drafting as clearly as if she had put her fingerprints upon it. I do not argue that one must always be consistent, but a change in principle does require some deep consideration. Principles ought not to be changed as easily or as frequently as handbags.
  Mr. Graham Page: Will the right hon. Gentleman allow me?
  Mr. Silkin: No, I do not think I can. Time is going by.
  Mr. Page rose—
  Mr. Silkin: All right, make it quick.
  Mr. Page: I am much obliged to the right hon. Gentleman. He was quoting from a Green Paper which is a consultation paper. The arguments on the other side were also set out in that paper. One cannot select one sentence in a Green Paper as Government policy.
  Mr. Silkin: The right hon. Gentleman for once is on a terribly bad point. The point I was making was that this matter requires, as the Green Paper said, very deep consideration. It was not something to be done by a snap of the fingers. That is the whole point. The right hon. Gentleman has made my point for me.
  A number of hon. Members raised questions about their own local authorities, my hon. Friend the Member for Barking (Miss Richardson) in particular and the hon. Members for Hastings (Mr. Warren) and Northampton, South (Mr. Morris). The hon. Member for Conway (Mr. Roberts) gave us an interesting and rather helpful intervention. I thought I detected some sympathy with the Government in what he said when pressing the claims of his own authority.
  I have been most impressed by the resourcefulness that many local authorities have shown during the year in devising proposals for improvements in the formula. I remember a letter from an English county, which shall be nameless, setting out five distinctly odd suggestions and finishing up with a plea for me to
  "adopt any or all of these or any other measures which would increase our share of the grants."
  1454
  I think the hon. Gentleman showed himself very much in that style.
  Mr. Wyn Roberts rose—
  Mr. Silkin: No, I do not think I can give way again. I have given way, I think, more than any other hon. Member today. Both the hon. Member for Southend, West and I have done so, but the hon. Member and I are both suffering slightly at the moment, and it is rather nice to sit down.
  Mr. Roberts: May I remind the right hon. Gentleman what his right hon. Friend said on 27th June, which was a firm pledge to take full account of the low-income areas and also of the costs of reorganisation in the redrafting of the formula?
  Mr. Silkin: Curiously enough, I listened to the hon. Gentleman when he spoke.
  The hon. Member for Manchester, Withington (Mr. Silvester) stressed the point that the Government have a duty to assist local authorities. Of course, the Government will not stand aside. They have already demonstrated their concern for local authorities and ratepayers alike. This has been very much in the forefront of our minds during our discussions with the local authorities on the rate support grant and it is why we are treating these discussions as a matter of urgency. It is also, alas, the reason why this debate, interesting as it has been, has been so illtimed.
  The hon. Member for Wellingborough (Mr. Fry) reproved us for not telling the House the ideas we have, but five days from now we shall be having the statutory meeting with the local authority associations. After that, and not before, my right hon. Friend will be in a position to tell the House what has been decided. I want to assure my hon. Friend the Member for Manchester, Gorton (Mr. Marks), who said that in future he hoped that the talks might take place in a more open atmosphere, that any idea he puts forward is worthy of consideration and my right hon. Friend and I will look into it.
  Mr. Churchill: Will the right hon. Gentleman give way on that specific point?
  Mr. Silkin: Certainly not. The hon. Member should sit down because he was not here.
  We are anxious to give the House any information we properly can. While, as I have said, we cannot forecast the future of the rate support grant, I can deal with another matter which is often mentioned in connection with rates.
  Several hon. Members have been concerned about the position of householders whose homes are not connected to the public sewerage system but are still required to pay the water authority rates in full. The hon. Members for Bedfordshire, South (Mr. Madel), Arundel (Mr. Marshall), and Ripon (Dr. Hampson) raised this point today. The House will have seen the announcement by my hon. Friend the Minister of State in a Written Answer today of the Government's decision that such householders should receive some relief from the start of the next financial year. The relief will be set at 50 per cent. of the general service charge. In arriving at this figure we had to strike a balance. The general service charge covers a number of services from which everyone derives some benefit. For instance, it covers the cost of river pollution prevention, surface water drainage, sewerage and sewage disposal, and these confer a general benefit on the community as a whole, not simply on those who are connected to the system.
  We also have to bear in mind that the amount given by way of relief has to be recovered from the other properties in a water authority's area. Nevertheless, the Government think it right that this substantial relief should be given, and I hope very much that the House will welcome our decision. [HON. MEMBERS: "Hear, hear."] I had hoped to hear some cheers from the Conservative benches.
  Some hon. Members wanted us to use the power which my hon. Friend the Member for Widnes (Mr. Oakes) was instrumental in having included in the Local Government Act. It enables the Secretary of State to pay a share of the needs element to non-metropolitan districts or to metropolitan counties. It would be premature to do so in 1975–76. Local authority opinion at the moment is rather divided on the issue, but my right hon. Friend has promised that it
  1456
  will be re-examined at an early stage of our preparations for 1976–77.
  Mr. Channon: Festina lente!
  Mr. Silkin: Festina lente is an admirable expression provided that after one has "festina'd" the result is adequate, fair and to the point.
  The duty of the Government to assist local authorities must be matched by an additional effort on the part of the local authorities to exercise restraint. I do not under-estimate the very real problems involved in such restraint. One of the additional problems the authorities have to suffer arises because the last Government told them to rate for only 9 per cent. inflation. Consequently, they are now incurring huge deficits which they have to finance by borrowing at a time when interest rates have reached staggering levels. Even with no growth in services, local authorities' cash requirements would therefore be soaring. It follows that restraint, which is necessary at all times, is even more necessary today.
  As my right hon. Friend the Chancellor of the Exchequer said in his Budget Statement:
  "If the Government are to help in moderating the rate increases for the coming year the councils will have to play their part. They must limit the rise in their expenditure to what is absolutely inescapable, and in particular they must rule out a further expansion of their staff such as has been taking place in the last few years."—[OFFICIAL REPORT, 12th November 1974; Vol. 881, c. 271–2.]
  I should point out to the hon. Member for Southend, West that the reason why I am not disclosing the survey of manpower after April 1974 is that we are not in a position to know very much about it at this stage.
  Mr. Graham Page: What has happened to the report?
  Mr. Silkin: The report was for 1973–74; it was not post-April 1974.
  I hope that we shall carry the authorities with us in this message. We shall in due course issue a circular indicating the Government's views on how the restraint will affect their service.
  I started by saying that the massive upsurge in rates was due in major part to inflation. There is another factor I should mention. The late Stephen

  1457
  Leacock once gave this advice to those who wished to grow asparagus:
  "Dig a trench three years ago."
  My advice to the right hon. Member for Crosby (Mr. Page) is "Do not bring in your reorganisation for local government or water and sewerage three years ago." Incidentally, the question of reorganisation was well put by my hon. Friends for the Members for Bishop Auckland (Mr. Boyden), Hackney, South and Shoreditch (Mr. Brown) and West Bromwich, Fast (Mr. Snape).
  Mr. Gordon Wilson rose—
  Mr. Stallard: The hon. Gentleman has only just come in.
  Mr. Silkin: Reorganisation and high interest rates have intensified the difficulties we face. For the Opposition, who were responsible for this calamity, against all our advice, to divide the House tonight, is as impudent as it is irrelevant, as my hon. Friend the Member for
  Meriden (Mr. Tomlinson) said. I call upon the House to defeat them decisively.
  9.58 p.m.
  Mr. Churchill: The House will be bitterly disappointed that the right hon. Gentleman has given no assurance about the special situation of Trafford. [Interruption.]
  Mr. Speaker: Order.
  Mr. Churchill: I ask the right hon. Gentleman in particular to consider the position of the metropolitan districts of Trafford, Tameside and Knowsley, the only ones which have no county borough base, and the Government's refusal to give help to those areas which are most hit or to restrain the massive rate of inflation going on under this Government, whose policies will be overwhelmingly rejected by the people.
  Question put, That this House do now adjourn:
  The House divided: Ayes 264, Noes 313.

  King, Evelyn (South Dorset)

  Mudd, David

  Speed, Keith

  King, Tom (Bridgwater)

  Neave, Airey

  Spence, John

  Kitson, Sir Timothy

  Nelson, Anthony

  Spicer, James (W Dorset)

  Knight, Mrs Jill

  Neubert, Michael

  Spicer, Michael (S Worcester)

  Knox, David

  Newton, Tony

  Sproat, Iain

  Lamont, Norman

  Normanton, Tom

  Stainton Keith

  Lane, David

  Nott, John

  Stanbrook, Ivor

  Langford-Holt, Sir John

  Onslow, Cranley

  Stanley, John

  Latham, Michael (Melton)

  Oppenheim, Mrs Sally

  Steen, Anthony (Liverpool)

  Lawrence, Ivan

  Parkinson, Cecil

  Stewart, Donald (Western Isles)

  Lawson, Nigel

  Pattie, Geoffrey

  Stewart, Ian (Hitchin)

  Le Marchant, Spencer

  Percival, Ian

  Stokes, John

  Lester, Jim (Beeston)

  Peyton, Rt Hon John

  Tapsell, Peter

  Lewis, Kenneth (Rutland)

  Price, David (Eastleigh)

  Taylor, R. (Croydon NW)

  Lloyd, Ian (Havant)

  Prior, Rt Hon James

  Taylor, Teddy (Glasgow, C)

  Loveridge, John

  Pym, Rt Hon Francis

  Tebbit, Norman

  Luce, Richard

  Raison, Timothy

  Temple-Morris, P.

  McAdden, Sir Stephen

  Rathbone, Tim

  Thatcher, Rt Hon M.

  McCrindle, Robert

  Rees, Peter (Dover & Deal)

  Thomas, Dafydd (Merioneth)

  Macfarlane, Neil

  Rees-Davies, W. R.

  Thompson, George

  MacGregor, John

  Reid, George

  Townsend, Cyril D.

  Macmillan, Rt Hn M. (Farnham)

  Renton, Rt Hn Sir D. (Hunts)

  Trotter, Neville

  McNair-Wilson, P. (New Forest)

  Renton, Tim (Mid-Sussex)

  Tugendhat, Christopher

  Madel, David

  Rhys Williams, Sir Brandon

  van Straubenzee, W. R.

  Marshall, Michael (Arundel)

  Ridley, Hon Nicholas

  Vaughan, Dr Gerard

  Mates, Michael

  Ridsdale, Julian

  Viggers, P. J.

  Mather, Carol

  Rifkind, Malcolm

  Wakeham, John

  Maude, Angus

  Rippon, Rt Hon Geoffrey

  Walder David (Clitheroe)

  Maudling, Rt Hon Reginald

  Roberts, Michael (Cardiff NW)

  Walker Rt Hon P. (Worcester)

  Mawby, Ray

  Roberts, Wyn (Conway)

  Walker-Smith, Rt Hon Sir Derek

  Maxwell-Hyslop, Robin

  Rodgers, Sir John (Sevenoaks)

  Wall, Patrick

  Mayhew, Patrick

  Rossi Hugh (Hornsey)

  Walters, Dennis

  Meyer, Sir Anthony

  Rost, Peter (SE Derbyshire)

  Warren, Kenneth

  Miller, Hal (Bromsgrove)

  Royle, Sir Anthony

  Weatherill, Bernard

  Mills, Peter

  Sainsbury, Tim

  Wells, John

  Miscampbell, Norman

  St. John-Stevas, Norman

  Whitelaw, Rt Hon William

  Mitchell, David (Basingstoke)

  Scott, Nicholas

  Wiggin, Jerry (Weston-s-Mare)

  Moate, Roger

  Shaw, Giles (Pudsey)

  Wigley, Dafydd (Caernarvon)

  Monro, Hector

  Shelton, William (Lambeth, St)

  Winterton, Nicholas

  Montgomery, Fergus

  Shepherd, Colin

  Wood, Rt Hon Richard

  Moore, John (Croydon C)

  Shersby, Michael

  Young, Sir George (Ealing)

  More, Jasper (Ludlow)

  Silvester, Fred

  Younger, Hon George

  Morgan, Geraint

  Sims, Roger

  Morgan-Giles, Rear-Admiral

  Sinclair, Sir George

  TELLERS FOR THE AYES:

  Morris, Michael (Northants)

  Skeet, T. H. H.

  Mr. Adam Butler and Mr. John Stradling-Thomas

  Morrison, Charles (Devizes)

  Smith, Dudley (Warwick)

  Mr.John Stradling-Thomas

  Morrison, Peter (Chester)

  Division No. 13.]

  AYES

  [9.59 p.m.

  Adley, Robert

  Cope, John

  Gow, I. (Eastbourne)

  Aitken, J. W. P.

  Cordle, John H.

  Gower, Sir Raymond (Barry)

  Alison, Michael

  Cormack, Patrick

  Gray, Hamish

  Amery, Rt Hn Julian

  Corrie, John

  Grieve, Percy

  Arnold, T.

  Costain, A. P.

  Griffiths, Eldon

  Atkins, Rt Hn H. (Spelthorne)

  Critchley, Julian

  Grist, Ian

  Awdry, Daniel

  Crouch, David

  Grylls, Michael

  Bain, Mrs Margaret

  Crowder, F. P.

  Hall, Sir John

  Baker, Kenneth

  Davies, Rt Hon J. (Knutsford)

  Hall-Davis, A. G. F.

  Banks, Robert

  Dodsworth, Geoffrey

  Hamilton, Michael (Salisbury)

  Bell, Ronald

  Douglas-Hamilton, Lord James

  Hampson, Dr Keith

  Bennett, Sir Frederic (Torbay)

  du Cann, Rt Hon Edward

  Hannam, John

  Bennett, Dr Reginald (Fareham)

  Durant, Tony

  Harrison, Sir Harwood (Eye)

  Benyon, W. R.

  Eden, Rt Hon Sir John

  Harvie Anderson, Rt Hn Miss

  Berry, Hon Anthony

  Edwards, Nicholas (Pembroke)

  Hastings, Stephen

  Biffen, John

  Elliott, Sir William

  Havers, Sir Michael

  Biggs-Davison, John

  Emery, Peter

  Hawkins, Paul

  Blaker, Peter

  Evans, Gwynfor (Carmarthen)

  Hayhoe, Barney

  Body, Richard

  Eyre, Reginald

  Heath, Rt Hon Edward

  Boscawen, Hon Robert

  Fairbairn, Nicholas

  Heseltine, Michael

  Bowden, Andrew (Brighton)

  Fairgrieve, Russell

  Hicks, Robert

  Boyson, Dr Rhodes (Brent)

  Farr, John

  Higgins, Terence L.

  Braine, Sir Bernard

  Fell, Anthony

  Holland, Philip

  Brittan, L.

  Finsberg, Geoffrey

  Hordern, Peter

  Brotherton, Michael

  Fisher, Sir Nigel

  Howe, Rt Hon Sir Geoffrey

  Brown, Sir Edward (Bath)

  Fletcher, Alex (Edinburgh N)

  Howell, David (Guildford)

  Bryan, Sir Paul

  Fletcher-Cooke, Charles

  Howell, Ralph (North Norfolk)

  Buchanan-Smith, Alick

  Fookes, Miss Janet

  Hunt, John

  Buck, Antony

  Fowler, Norman (Sutton C)

  Hurd, Douglas

  Budgen, Nick

  Fox, Marcus

  Hutchison, Michael Clark

  Bulmer, Esmond

  Fraser, Rt Hon H. (Stafford & St)

  Irvine, Bryant Godman (Rye)

  Burden, F. A.

  Fry, Peter

  Irving, Charles (Cheltenham)

  Carlisle, Mark

  Galbraith, Hon T. G. D.

  James, David

  Carr, Rt Hon Robert

  Gardiner, George (Reigate)

  Jenkin, Rt Hon Patrick (Redbr)

  Chalker, Mrs Lynda

  Gardner, Edward (S Fylde)

  Jessel, Toby

  Channon, Paul

  Gilmour, Rt Hon Ian (Chesham)

  Johnson Smith, G. (E Grinstead)

  Churchill, W. S.

  Gilmour, Sir John (East Fife)

  Jones, Arthur (Daventry)

  Clark, Alan (Plymouth, S)

  Glyn, Dr Alan

  Jopling, Michael

  Clark, William (Croydon S)

  Godber, Rt Hon Joseph

  Joseph, Rt Hon Sir Keith

  Clarke, Kenneth (Rushcliffe)

  Goodhart, Philip

  Kaberry, Sir Donald

  Clegg, Walter

  Goodhew, Victor

  Kellett-Bowman, Mrs Elaine

  Cockcroft, John

  Goodlad, A.

  Kershaw, Anthony

  Cooke, Robert (Bristol W)

  Gorst, John

  Kimball, Marcus

  NOES

  Abse, Leo

  Callaghan, Jim (Middleton & P)

  Dempsey, James

  Allaun, Frank

  Campbell, Ian

  Doig, Peter

  Anderson, Donald

  Canavan, Dennis

  Douglas-Mann, Bruce

  Archer, Peter

  Cant, R. B.

  Duffy, A. E. P.

  Armstrong, Ernest

  Carmichael, Neil

  Dunn, James A.

  Ashley, Jack

  Carter, Ray

  Dunnett, Jack

  Ashton, Joe

  Carter-Jones, Lewis

  Dunwoody, Mrs. Gwyneth

  Atkins, Ronald (Preston N)

  Cartwright, John

  Eadie, Alex

  Atkinson, Norman

  Castle, Rt Hon Barbara

  Edelman, Maurice

  Bagier, Gordon A. T.

  Clemitson, I. M.

  Edge, Geoffrey

  Barnett, Guy (Greenwich)

  Cocks, Michael (Bristol S)

  Edwards, Robert (Wolv SE)

  Barnett, Joel (Heywood)

  Cohen, Stanley

  Ellis, John (Brigg & Scun)

  Bates, Alf

  Coleman, Donald

  Ellis, Tom (Wrexham)

  Bean, Robert E.

  Colquhoun, Mrs Maureen

  English, Michael

  Beith, A. J.

  Concannon, J.D.

  Ennals, David

  Benn, Rt Hn Anthony Wedgwood

  Conlan, Bernard

  Evans, Fred (Caerphilly)

  Bennett, Andrew (Stockport N)

  Cook, Robin F. (Edin C)

  Evans, loan L. (Aberdare)

  Bidwell, Sydney

  Corbett, Robin

  Evans, John (Newton)

  Bishop, Edward

  Craigen, J. M. (Glasgow, M)

  Ewing, Harry (Stirling)

  Blenkinsop, Arthur

  Crawshaw, Richard

  Faulds, Andrew

  Boardman, H.

  Crosland, Rt Hon Anthony

  Fernyhough, Rt Hon E.

  Booth, Albert

  Cryer, Bob

  Fitch, Alan (Wigan)

  Boothroyd, Miss Betty

  Cunningham, G. (Islington S)

  Fitt, Gerard (Belfast)

  Bottomley, Rt Hon Arthur

  Cunningham, Dr J. (Whiteh)

  Flannery, Martin

  Boyden, James (Bish Auck)

  Dalyell, Tam

  Fletcher, Raymond (Ilkeston)

  Bradley, Tom

  Davidson, Arthur

  Fletcher, Ted (Darlington)

  Bray, Dr Jeremy

  Davies, Bryan (Enfield N)

  Foot, Rt Hon Michael

  Brown, Hugh D. (Glasgow, Pr)

  Davies, Denzil (Llanelli)

  Ford, Ben T.

  Brown, Robert C. (Newcastle)

  Davies, Ifor (Gower)

  Forrester, John

  Brown, Ronald (Hackney S)

  Davis, S. Clinton (Hackney C)

  Fowler, Gerald (The Wrekin)

  Buchan, Norman

  Dean, Joseph (Leeds West)

  Fraser, John (Lambeth, N)

  Buchanan, Richard

  de Freitas, Rt Hon Sir Geoffrey

  Freeson, Reginald

  Butler, Mrs Joyce (Haringey)

  Delargy, Hugh

  Freud, Clement

  Callaghan, Rt Hon J. (Cardiff S)

  Dell, Rt Hon Edmund

  Garrett, John (Norwich S)

  Garrett, W. E. (Wallsend)

  McElhone, Frank

  Sandelson, Neville

  George, Bruce

  MacFarquhar, R.

  Sedgemore, B.

  Gilbert, Dr John

  Mackenzie, Gregor

  Selby, Harry

  Ginsburg David

  Mackintosh, John P.

  Shaw, Arnold (Redbridge, Ilf)

  Golding, John

  Maclennan, Robert

  Sheldon, Robert (Ashton-u-Lyne)

  Gould, Bryan

  McMillan, Tom (Glasgow C.)

  Shore, Rt Hon Peter

  Gourlay, Harry

  McNamara, Kevin

  Short, Rt Hon Edward (Newcastle C)

  Graham, Ted

  Madden, Max

  Short, Mrs Renée (Wolv NE)

  Grant, George (Morpeth)

  Magee, Bryan

  Silkin, Rt Hn John (Lewish)

  Grimond, Rt Hon J.

  Mahon, Simon

  Silkin, Rt Hn S. C. (Southwk)

  Grocott, Bruce

  Mallalieu, J. P. W

  Sillars, James

  Hamilton, James (Bothwell)

  Marks, Ken

  Silverman, Julius

  Hamilton, W. W. (Central Fife)

  Marquand, David

  Skinner, Dennis

  Hamling, William

  Marshall, Dr Edmund (Goole)

  Small, William

  Hardy, Peter

  Marshall, Jim (Leicester)

  Smith, Cyril (Rochdale)

  Harper, Joseph

  Mason, Rt Hon Roy

  Smith, John (N Lanarkshire)

  Harrison, Walter (Wakefield)

  Maynard, Miss Joan

  Snape, Peter

  Hart, Rt Hon Judith

  Meacher, Michael

  Spearing, Nigel

  Hattersley, Roy

  Mellish, Rt Hon Robert

  Spriggs, Leslie

  Hatton, Frank

  Mendelson, John

  Stallard, A. W.

  Hayman, Mrs Helene

  Mikardo, Ian

  Steel, David (Roxburgh)

  Healey, Rt Hon Denis

  Millan, Bruce

  Stewart, Rt Hn Michael (H'smith, F)

  Heffer, Eric S.

  Miller, Dr M. (E. Kilbride)

  Stoddart, David

  Hooley, Frank

  Miller, Mrs Millie (Redbridge)

  Strang, Gavin

  Hooson, Emlyn

  Mitchell, R. C. (Soton, Itchen)

  Strauss, Rt Hon G. R.

  Horam, John

  Molloy, William

  Summerskill, Hon Dr Shirley

  Howell, Denis (B'ham, Sm H)

  Moonman, Eric

  Swain, Thomas

  Howells, Geraint (Cardigan)

  Morris, Alfred (Wythenshawe)

  Taylor, Mrs Ann (Bolton W)

  Hoyle, Douglas (Nelson)

  Morris, Charles R. (Openshaw)

  Thomas, Jeffrey (Abertillery)

  Huckfleld, Leslie

  Morris, Rt Hon John (Aberavon)

  Thomas, Mike (Newcastle)

  Hughes, Rt Hon C. (Anglesey)

  Moyle, Roland

  Thomas, Ron (Bristol NW)

  Hughes, Robert (Aberdeen N)

  Mulley, Rt Hon Frederick

  Thorne, Stan (Preston)

  Hughes, Roy (Newport)

  Murray, Ronald King

  Thorpe, Rt Hon Jeremy (Devon)

  Hunter, Adam

  Newens, Stanley

  Tierney, Sydney

  Irvine, Rt Hon Sir A. (L'pool)

  Noble, Mike

  Tinn, James

  Irving, Rt Hon S. (Dartford)

  Oakes, Gordon

  Tomlinson, John

  Jackson, Colin (Brighouse)

  Ogden, Eric

  Torney, Tom

  Jackson, Miss Margaret (Lincoln)

  O'Halloran, Michael

  Urwin, T. W.

  Janner, Greville

  O'Malley, Brian

  Varley, Rt Hon Eric G.

  Jay, Rt Hon Douglas

  Orbach, Maurice

  Wainwright, Edwin (Dearne V)

  Jeger, Mrs Lena

  Orme, Rt Hn Stanley

  Wainwright, Richard (Colne V)

  Jenkins, Hugh (Wandsworth)

  Ovenden, John

  Walden, Brian (B'ham, L'dyw'd)

  Jenkins, Rt Hon Roy (B'ham, St)

  Owen, Dr David

  Walker, Harold (Doncaster)

  John, Brynmor

  Padley, Walter

  Walker, Terry (Kingswood)

  Johnson, James (Kingston W)

  Palmer, Arthur

  Ward, Michael

  Johnson, Walter (Derby S)

  Park, George

  Watkins, David

  Jones, Alec (Rhondda)

  Parker, John

  Watkinson, John

  Jones, Barry (East Flint)

  Parry, Robert

  Weetch, Ken

  Jones, Dan (Burnley)

  Pavitt, Laurie

  Weitzman, David

  Judd, Frank

  Peart, Rt Hon Fred

  Wellbeloved, James

  Kaufman, Gerald

  Pendry, Tom

  White, Frank R. (Bury)

  Kelley, Richard

  Penhaligon, David

  White, James (Glasgow, P)

  Kerr, Russell

  Perry, Ernest

  Whitehead, Phillip

  Kilroy-Silk, Robert

  Phipps, Dr Colin

  Whitlock, William

  Kinnock, Neil

  Prentice, Rt Hon Reg

  Willey, Rt Hon Frederick

  Lambie, David

  Prescott, John

  Williams, Alan (Swansea)

  Lamborn, Harry

  Price, Christopher (Lewisham W)

  Williams, Alan, Lee (Haver'g)

  Lamond, James

  Price, William (Rugby)

  Williams, Rt Hon Shirley (Hertford)

  Latham, Arthur (Paddington)

  Radice, Giles

  Williams, W. T. (Warrington)

  Leadbitter, Ted

  Rees, Rt Hon Merlyn (Leeds S)

  Wilson, Alexander (Hamilton)

  Lee, John

  Richardson, Miss Jo

  Wilson, Rt Hon H. (Huyton)

  Lestor, Miss Joan (Eton & Slough)

  Roberts, Albert (Normanton)

  Wilson, William (Coventry SE)

  Lever, Rt Hn Harold

  Roberts, Gwilym (Cannock)

  Wise, Mrs Audrey

  Lewis, Ron (Carlisle)

  Roderick, Caerwyn

  Woodall, Alec

  Lipton, Marcus

  Rodgers, George (Chorley)

  Woof, Robert

  Lomas, Kenneth

  Rodgers, William (Teesside)

  Wrigglesworth, Ian

  Loyden, Eddie

  Rooker, J. W.

  Young, David (Bolton E)

  Luard, Evan

  Roper, John

  Lyon, Alexander (York)

  Ross, Stephen (Isle of Wight)

  TELLERS FOR THE NOES:

  Lyons, Edward (Bradford W)

  Ross, Rt Hon W. (Kilm'nock)

  Mr. Thomas Cox an

  Mabon, Dr J. Dickson

  Rowlands, Ted

  Mr. J. D. Dormand.

  McCartney, Hugh

  Ryman, John

  Question accordingly negatived.

AGRICULTURE (TRACTOR CABS)
10.15 p.m.
The Parliamentary Secretary to the Ministry of Agriculture, Fisheries and Food (Mr. Gavin Strang): I beg to move,
That the Agriculture (Tractor Cabs) Regulations 1974, a draft of which was laid before this House on 5th November, be approved.
These regulations are being introduced under the Agriculture (Safety, Health and Welfare Provisions) Act 1956. Their main objective is to postpone the date from which all new tractors will have to be fitted with safety cabs which satisfy the noise requirements. The new date is 1st June 1976. The regulations also revoke and consolidate the Agriculture (Tractor Cabs) Regulations 1967 and the Agriculture (Tractor Cabs) (Amendment) Regulations 1973.
The development of the safety cab has not been without its problems. The cab concentrates the noise of the tractor inside it, and the noise may reach a level where the driver's hearing may be in danger. Regulations were therefore made in 1973 requiring all new tractors sold to the farmer from 1st September 1975 to be fitted with a safety cab in which the noise level at the driver's ear did not exceed 90 dBA. The date of 1st September 1975 was adopted as being the earliest date that manufacturers could meet the demand for 90 dBA tractor/cab combinations.
At the end of 1973 representations were made to the Ministry that manufacturers would be unable to meet this date. Their case was based on difficulties in obtaining basic materials such as steel and plastics as well as the shortage of machine tools for building the new quiet safety cabs. These difficulties were increased in January 1974 as a result of the fall in energy supplies and the three-day working week. The representations were carefully considered and all interested organisations were consulted about the proposal to defer implementation of the "quiet cab" regulations by nine months. I emphasise that all the organisations which replied to our letter of consultation accepted the case for deferment, although there were two organisations—the Royal Society for the
1464
Prevention of Accidents and the National Union of Agricultural and Allied Workers —which much regretted that this was necessary.
I should like to pay tribute to the tractor manufacturers who have made every effort to design suitable safety cabs for the great variety of tractors in use in this country. When they were faced with the further problem of noise they redesigned their products to reduce the noise levels without detracting from the general safety factor. This has involved a major re-engineering job. Changes involved could not be introduced overnight.
In 1973 the date of September 1975 was accepted as being the earliest possible date by which manufacturers would be able to reduce the noise level in their cabs. But I now reluctantly accept that because of supply and technical difficulties beyond the control of tractor manufacturers it is necessary to postpone by nine months the operative date of this measure. I am assured that, provided that there is no major interruption to manufacturing, the new quiet cabs will be available for all new tractors sold to farmers by the new date.
The regulations therefore provide that from 1st June 1976 all new tractors will have to be fitted with safety cabs which satisfy the noise requirements—that is, not more than 90 dBA at the operator's ear—and that from 1st September 1977 all new safety cabs will have to meet these requirements. Perhaps I should make clear that there is no restriction on fitting cabs which do not meet the noise requirements to tractors supplied before June 1976 and any such approved cabs fitted will not have to be replaced by cabs which meet those requirements.
The opportunity is also being taken to revoke the 1967 regulations and the 1973 (amendment) regulations and to consolidate their provisions in this new order. A consolidation of this kind follows an inquiry by the Joint Statutory Instruments Committee when it considered the 1973 regulations in draft.
These consolidated regulations therefore require that wheeled tractors weighing 11 cwt. or more must be fitted with approved and suitably marked

1465
safety cabs when first sold into agriculture. This has applied since September 1970. They also require that such tractors be fitted with safety cabs when driven by agricultural workers, and it is made an offence for a worker to drive such a tractor without an approved safety cab, or for anyone to cause or permit him to do so. These provisions will apply to all other tractors in agricultural use as from September 1977.
Mr. Deputy Speaker (Mr. George Thomas): I point out before we enter into the debate that, as the Minister realised, this much be a restricted debate. [HON. MEMBERS: "Oh."] It is because it is a consolidation measure. It is not my choice.
10.20 p.m.
Mr. Michael Jopling: I am grateful to you, Mr. Deputy Speaker, for the guidance you have given to the House. On several occasions during the past 10 years when matters of this type have been debated I have found myself in trouble with the occupant of the Chair. I shall do my utmost to keep my remarks within the regulations now before us. I have beside me a copy of "Erskine May", open at page 569, and no doubt you have a copy in front of you, Mr. Deputy Speaker. I hope that both of us have in mind the same rules of order and that it will be possible to abide by them. I shall do my utmost to achieve that end.
We are grateful to the Parliamentary Secretary for explaining the purpose of the change in the law regarding tractor safety cabs. Apart from the details of the regulations now before us, it is a good thing that we should be debating agricultural safety at this time because I think I am right in saying it is still National Farm Safety Year. It is to be welcomed that we should be debating a topic which will give added publicity to the drive being carried out to promote greater safety on farms.
The Minister of State made a speech a few months ago in relation to a special week devoted to a campaign for the safety of children on farms. Judging from what the Minister of State said on that occasion, I am sure that he and the Parliamentary Secretary will agree with me that there are still far too many unnecessary accidents on farms and—I am
1466
sure that this is out of order—far too many of these accidents concern children. I appreciate that that last point is not covered in the regulations we are now considering.
The regulations are very welcome. At this stage I should say that I may have been discourteous to the Parliamentary Secretary. I am not sure whether this is the first occasion that he has addressed the House in his present post. [Interruption.] I understand that that is not so, and I beg his pardon.
I recognise that there have been technical and supply problems, as was stated in a handout issued from the Ministry on 5th November, and it has been almost impossible for tractor manufacturers to provide cabs which are soundproofed in the way prescribed originally in regulations in 1973. We recognise that problems have arisen. There are many technological difficulties which the trade has had to face in trying to establish methods of soundproofing cabs in order to comply with the change in the law that is now proposed.
I am told that there has been much trial and error by design engineers in trying to find ways of getting over these problems. Therefore, the Opposition are perfectly happy to accept the extra nine-month period before provision of soundproofed tractor cabs becomes essential on new tractors. However, a number of questions arise.
Will the Minister tell us what is the supply position for tractor cabs? I am told that there is a shortage of cabs. I heard recently of a Scottish dealer who has been unable to obtain delivery of cabs either from tractor manufacturers or from private cab manufacturers. I also heard about a dealer in Scotland who took delivery of several new tractors without cabs direct from the factory, as the law provides, but those tractors could not be delivered by the dealer to a farmer until they were provided with cabs. Because of the shortage of cabs those tractors could not be moved on.
Is the Minister satisfied that there is a reasonable degree of co-ordination between the manufacturers of tractors and the manufacturers of cabs? I am sure that he is the last person to wish to see tractors delivered by manufacturers to farmers being unable to go out to the

1467
farms because they are not provided with cabs.
If certain types of cab are in short supply, will the Minister explain how Regulation 8, which deals with certificates of exemption, applies? Who grants the exemptions which are provided for in Regulation 8? What is the chain of command? How local can be the decision to allow an exemption? I ask those questions because I have recently had a letter from an old friend of mine, Mr. Tony Stodart, who will be well remembered as a previous Minister for State. He interested himself particularly in this problem. He has recently run into a difficulty which I have his permission to quote to the House. His letter reads as follows:
"I ran into annoying trouble when I needed a new tractor this harvest. It had been ordered for a long time and came forward all right to the agents, but it stood in their shop for over three weeks because there was a shortage of cabs. What magnified the irritation was that all I needed it for at that time was to stand hitched to a trailer, into which grain should have fallen, and move 20 yards to tip the load into a pit for final storage. But, of course, no tractor is allowed to be sold without a safety cab."
There is a shortage of cabs. Farmers who wish to use a tractor for a purpose like that, which is entirely safe, are not allowed to do so under the existing law or under the regulations we are considering. Is it possible for a temporary exemption to be allowed in a case like that on a written undertaking from the farmer that the tractor would not go out on the land but remain in the farmyard? Could not an exemption be allowed in those circumstances for a short period until the appropriate cab is delivered?
Before leaving the case which our old friend Tony Stodart has brought to my attention, perhaps I might ask the Minister to answer a further question about it. He may know that when Tony Stodart was Minister of State he carried on a battle within the Ministry to safeguard the position of the private tractor cab manufacturers. Can the Minister confirm that it is perfectly legal for a dealer to take delivery from a manufacturer of a tractor which is not equipped with a cab? As I understand it, the law suggested by Regulation 4 is that it is an offence only for a person to sell such a new tractor to a person for use by
1468
him in agriculture. It is not an offence for a tractor manufacturer to sell a tractor without a cab to a dealer.
Only today I spoke to a tractor dealer who will be known to my old friend the hon. Member for Sheffield, Heeley (Mr. Hooley) and who was under the impression that he was not allowed, as a dealer, to buy a tractor without a cab from a manufacturer. I understand that to be wrong, and I should be grateful if the Minister could confirm that it is perfectly legal for a tractor dealer to buy a tractor without a cab from a manufacturer.
I turn now to a minor matter about which I should like to ask the Minister a question. Regulation 6(c) says that every worker employed in agriculture is obliged by the regulations to report to his employer
"any defect in the windscreen wiper if one is fitted."
However, in Regulation 2(3)(b) we are told that a tractor is properly fitted with a safety cab for the purpose of the regulations if the safety cab is
"equipped with an efficient automatic wiper for any windscreen it may have."
It seems strange if a man driving a tractor has to report to his employer any defect in the windscreen wiper "if" one is fitted, whereas in an earlier regulation we are told that it is necessary that one should be fitted. I hope that the hon. Gentleman can explain that slight anomaly to us.
Another matter is of importance, and it concerns soundproofed cabs—
Mr. Deputy Speaker: Order. I am sorry to interrupt the hon. Member for Westmorland (Mr. Jopling), but I should like to try to help him and the House. If he will link whatever arguments he has to the nine-months' postponement, which is the one amendment made by the regulations, his remarks will be more in order. Any discussion of the details of the regulations is not within our power tonight.
Mr. Jopling: I apologise if I have said anything to offend you, Mr. Deputy Speaker. Perhaps I might put it in this way. I am somewhat disturbed about the postponement of these regulations and the coming in of the operative date because of the importance of various

1469
parts of the regulations. Regulation 3 (8) says:
"An approved safety cab shall cease to be approved if it is materially changed as a result of damage, alteration, neglect or any other cause."
The operative words are "materially changed", and, in view of the proposed change of date, I hope that we shall have an explanation. Surely that phrase does not relate to a cab being twisted slightly by being backed into by a lorry or thrust against a building. In absurd terms, some official could interpret these words as requiring that an infinitesimal change to a cab's structure meant that it would have to be scrapped. What would happen if a hole were drilled in the cab for a radio aerial? An official might think that it had been "materially changed". Is there any procedure for re-approving a tractor after an accident? I certainly would not condone the further use of a cab which had been rendered patently unsafe, but bumps happen in farming and it is important to clarify this.
If a new tractor, bought this month and fitted with a safety cab, were involved in an accident, with what would it have to be replaced? I should not have thought that it was necessary to replace it with a tractor fitted with a much more sophisticated cab, such as would have to be fitted after 1st June 1976. The extra cost of these cabs is very great. The difference in cost between cabs which have to be fitted now and those which have to be fitted after 1st June 1976 is about £250. Therefore, it seems to me that if a perfectly normal safety cab were to be broken on a relatively old tractor after 1st June 1976, it surely would not be necessary for it to have to be replaced by a far more sophisticated soundproofed cab, which would cost a great deal of money to fit to an older tractor.
I conclude on a somewhat whimsical matter. I have been reading the debate which took place on 21st June 1967, when the regulations were introduced. I noticed that Sir Clive Bossom spoke in that debate. Many of us knew him for many years. Again I seem to be quoting one of our old friends. In 1967 he said:
"If a new safety cab costs between £70 and £100, will this price our tractors out of foreign markets?"
1470
I was amused to see that our old friend Mr. Hoy, now Lord Hoy, in replying to the debate, said:
"Reference was made to the present price of cabs. We expect the price to fall considerably when full-scale production begins."—[OFFICIAL REPORT, 21st June 1967; Vol. 748, c. 1662–3, 1671.]
Nothing of the sort has happened. Now a new tractor cab of the sort that Lord Hoy was talking about costs about £250 fitted. We are talking about a good deal of money. Not for a moment do I think that that money is ill spent. I hope that no one would suggest that that is my view. It is a small price to pay for the extra safety which the regulations will provide for those who work tractors on our land. I am sure that no sensible farmers would be opposed to spending, that sort of money. However, it is important that the Minister should concern himself with certain matters involved in the regulations. I hope that he will deal with them.
We welcome the regulations. We hope that they will help as soon as possible to give added safety to those who work on our farms and do so much to ensure our continued supplies of food.
10.42 p.m.
Miss Joan Maynard: This matter is of considerable importance to members of my union—namely, farmworkers. It is of growing importance because of the mechanisation of the agricultural industry. Delay in any of these safety regulations affects farm-workers directly. It seems that there has always been delay, as there is on this occasion.
The hon. Member for Westmorland (Mr. Jopling) referred to unnecessary accidents. I suggest that these are due to unnecessary delay. In 1973 there were 20 fatal accidents due to overturning tractors. Four of those fatalities were children. All those tractors were without cabs.
It may be that farmers have to pay £250, or whatever the figure is, for a new noise-free cab. But accidents do not happen just to farmworkers. They also happen to farmers. Since the safety cab regulations came into force, there have been six fatalities involving tractors to which cabs were fitted. The people were not killed because the cabs were inefficient. They were killed because they

1471
were either thrown out or were attempting to get out while the tractor was overturning.
Following the safety cab regulations, we now have the new hazard of noise. Some of us used to think that we would rather be deaf than dead, but perhaps we need to be neither.
For new machines the original date for the new requirements was September 1975. The new date is now June 1976—a further delay—and for all tractors, including existing tractors, the date is September 1977. That is three years away. The delay costs lives. If it is a question of lives or money, lives should be more important. I deplore, as does my union, this continuing delay in relation to farm safety.
10.45 p.m.
Mr. Roger Moate: As the House knows, my constituency has a very large horticultural element—a large number of hop gardens and orchards. I am glad that the order makes special provision for that category of horticultural production. There is a practical exemption for tractors used in hop gardens and orchards. These are narrow tractors, and the House will appreciate the great practical difficulties of fitting cabs to them. This is fine as far as it goes.
However, anxieties have been expressed to me by local interests. These anxieties must arise from the new regulations and the setting of a new date for their becoming effective. I should be grateful if the Minister would comment on this worry. There is an apparent conflict in logic between Regulations 4 and 5. Regulation 5(4) provides an exemption for hop gardens and orchards.
"Nothing in this regulation shall apply to a tractor—
(a) while it is being used for the purpose of carrying out an agricultural operation in a hop-garden, hop-yard or orchard …".
Regulation 4 says:
"No person shall—
(a) sell a new tractor, or let it on hire …".
There seems to be a conflict. It seems to suggest that a dealer is not allowed in any circumstances to sell a tractor unless it has a cab fitted, whereas it is lawful for a horticulturist to operate a tractor without such a cab being fitted. Clearly, it is a little piece of nonsense if a dealer is forced by law to sell a tractor
1472
with a cab fitted only for that cab to be removed lawfully and left permanently unused. It would be a grotesque waste of money and resources.
This is not a small point, because some horticulturists operate with a large number of tractors and replace them fairly regularly. I am sure that there will be a logical explanation for this. I hope that the Minister will explain that it is not necessary for a dealer to fit a cab to a tractor which, because of the use to which it is to be put, does not have to have the cab fitted subsequently. It may be that the Minister plans to issue a certificate of regulations under Regulation 8.
10.48 p.m.
Mr. Bob Cryer: We are all very concerned about the delay in bringing these regulations into operation. I ask the Minister to take the opportunity of the delay to look at a number of aspects of the regulations. The regulations are authorised under the Agriculture (Safety, Health and Welfare Provisions) Act 1956. Nowhere in the regulations, though I think it should be in the explanatory note, is there an outline of how the regulations are to be enforced.
To obtain that information it is necessary to turn to Section 14 of the parent Act. Under Section 14 the maximum fine for a breach of the Act is £50 in a court of summary jurisdiction and, although it is not specified, probably more on indictment. If these provisions are to be enforced—we are talking now about loss of life and injury to limb—there must be a much stronger sanction than £50, which today is a paltry sum. For example, the comparatively trivial offence—which we are to debate tomorrow—of not wearing seat belts when their wearing is made compulsory will carry a penalty of £50, though any resultant injury would be self-inflicted. I understand that the rate of prosecution in this case is very low.
I ask the Minister to consider also the question of Section 16, which relates to prosecutions under these regulations and others. There the defence is given that an employer used "all due diligence". In fact, this provision, which was included in Section 41 of the Agriculture (Safety, Health and Welfare Provisions) Act, was deleted because by common consent on both sides of the Committee,

1473
of which I was a member, the phrase "all due diligence" was held to be a lawyers' paradise and there were a large number of loopholes. Therefore, it might be expeditious if during the delaying period the Minister examines this section to see whether it can be tightened up.
I leave the Minister with the final thought that in order to secure the proper and effective application of these regulations it might be useful for him to consider incorporating the application of agricultural regulations under the general umbrella of the Agriculture (Safety, Health and Welfare Provisions) Act. I recall that, although this House approved that idea at one stage, the House of Lords, which has nearly 200 Members with rather larger agricultural interests than a large back garden and an allotment, knocked the agricultural provision out of the Bill, and when it came back to this House the Opposition, Tories and Liberals, flocked into the Lobby and voted the agricultural provision out.
Mr. Deputy Speaker: Order. I am being as tolerant as I can be, and that is very tolerant, but the hon. Gentleman is getting a little too far beyond the question of the date, which is the main question before the House.
Mr. Cryer: I am grateful for your advice, Mr. Deputy Speaker. This date is crucial. Although we regret the delay, it may be that this delay will work to our advantage. All the points which I have raised about the lack of powers to ensure that these regulations are in force can be minutely examined by the Minister and he can come back to this House fresh with these points in his mind. The delay will not be regrettable but will be of value because it will enable us to make sure that people who disregard these regulations are prosecuted, that the regulations have real force and urgency and that penalties are attached to them.
10.53 p.m.
Mr. Geraint Howells: I shall accept your advice, Mr. Deputy Speaker, and be brief and to the point.
I am pleased to welcome the draft regulations. I am sure that all farmers, especially hill farmers, will welcome any measure which will improve the safety
1474
standards for farm workers. If the regulations save only one life it will be a worthwhile exercise. Far too many lives have already been lost. I have been personally involved in such a fatality, when a neighbour of mine, a 19-year-old shepherd, was killed when his tractor was overturned 13 years ago. If we had had the regulations then, I am sure that my neighbour would be farming the hills of Pumlumon today. It is a great pity that regulations such as these were not devised and imposed many years ago.
I should like to pay a tribute to the Agricultural Training Board, to its chairman, the regional chairmen, the staff and the field officers. During the last few years the board has had tractor training courses in Wales, which have been very successful, and farmers and farm workers have taken advantage of them. As you will be aware, Mr. Deputy Speaker, many hundreds of acres of hill land have been reclaimed in Mid-Wales. With these regulations and the tractor courses of the Agricultural Training Board, I am convinced that many more lives will be saved in the future, and that we shall increase production of the bill land in Mid-Wales.
10.55 p.m.
Mr. John Corrie: It is most disappointing to see that there are no Scottish Members on the Labour back benches. With the terrain encountered in Scotland we are more likely to have—
Mr. Robin F. Cook: I am pleased to say that I have an agricultural interest in my constituency. The area includes Arthur's Seat, and the shepherd who works there is a strong Labour supporter.
Mr. Corrie: I am glad to see that the hon. Member for Edinburgh, Central (Mr. Cook) has come in.
I am disturbed at the delay in the implementation of the regulations. I have a personal interest in the matter because I have lost a tractor driver on my own farm. He was killed, yet there was a cab on the tractor. Unfortunately, he tried to jump out as the tractor rolled over. That only shows that, although we can legislate for tractor cabs, we cannot legislate for human reaction. Perhaps a warning should be carried within the cab

1475
to say that in the case of accident the driver should stay put and not try to get out as the tractor rolls over.
I was pleased to hear the hon. Member for Cardigan (Mr. Howells) say how much good work the training board does in this matter. If the regulations are to be delayed, however, more should be done to advise drivers of the dangers, about the hitches which should be used, about the risks on different types of terrain, and about the points of gravity at which a tractor might roll over.
I can vouch for safety cabs because following the accident on my farm—and I am probably the only Member who can say this—I rolled a tractor with a safety cab fitted. That shows that when they are properly used they save lives. I am living proof of that fact.
Do I understand that tractors licensed before 1970 do not come under the regulations until 1st September 1977? If that is so it means that the tractor will be at least seven years old and perhaps much older. The safety cab will probably cost between £250 and £500, while the value of the tractor will be as low as £50. Many of the pre-1970 tractors had no fitting points for safety cabs so that many of the cabs available will not be completely suitable. The weak point on any tractor of that age would be the point of fitting.
My second fear is the enormous cost of the safety cabs in two years' time. At present the ordinary cab without soundproofing is £207. To attain the regulation standards on soundproofing could bring the cost up to £500 or £600. That is a small price to pay to save a life, but to any small farmer it is a large amount to lay out in addition to the £2,000 to £3,000 that the tractor costs in the first place.
Is there no way in which a grant could be offered for these cabs? The question of noise is important to a driver who has to sit there hour after hour with the noise and vibration building up. Perhaps the regulations could also provide that all cabs should be equipped with ear muffs which would be attached to the roof so that they could not be removed.
Tractors can be delivered to dealers without cabs on. Cabs of another make
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can be put on those tractors. Can the Minister say with absolute assurance that the engineers who fit them will be qualified? I hope that it will not be possible for just any old person to stick the cabs on the tractors, because the weak point is where the cab is fitted.
11.0 p.m.
Mr. Strang: The hon. Member for Westmorland (Mr. Jopling) referred to the overall cab supply position. He was not referring only to the quiet cabs. We appreciate that in some local circumstances there is a shortage, but we have no reason to believe that it is serious. The manufacturers have assured us that they will be able to provide the cabs in the numbers we require.
The hon. Gentleman also raised the question of exemptions. It is only in exceptional circumstances that the exemptions will be granted. We are thinking, for example, of a situation in which the tractor is required for experimental purposes, and where it will be awkward to have a cab. We do not envisage that Mr. Stodart, the hon. Gentleman's former right hon. Friend, would be able to obtain an exemption for the reasons he gave. I have no doubt that the former right hon. Member for Edinburgh, West would not, having obtained an exemption to enable a tractor to do a small job such as the hon. Gentleman described, use it for any other purpose while it did not have a cab, but we cannot assume that all farmers would be as responsible. Therefore, the Government would be ill-advised to allow exemptions for such reasons, because we cannot be sure what use the tractor will be put to.
I confirm that it is in order under the regulations for a tractor manufacturer to sell a tractor without a cab to a dealer. This refers to new tractors or tractors being brought into agriculture for the first time.
I acknowledge the deep interest taken in these matters by my hon. Friend the Member for Sheffield, Brightside (Miss Maynard). Before she became a Member we used to meet her from time to time in her role as a leading light in the National Union of Agricultural and Allied Workers. I understand my hon. Friend's disappointment at the delay in making it mandatory that all cabs fitted

1477
to new tractors shall comply with the noise requirements. I also understand my hon. Friend's disappointment that it will not be mandatory for any tractor driven by an agricultural worker to have a cab until 1st September 1977. But that date is not affected by the regulations, which relate solely to the cab designed to reduce the noise experienced by the driver.
The answer to the point raised by the hon. Member for Faversham (Mr. Moate) is that the regulation exempting horticulture does not supersede these regulations. Regulation 4 applies to the sale of tractors, and the exemptions refer to use under certain circumstances where it is not reasonably practicable to use the tractor with the cab fitted.
Mr. Moate: I follow the point about selling tractors without a cab. Ono cannot be sure that they will not subsequently be used for other purposes. Would the Minister not agree that it is illogical to enforce the sale of vehicles with cabs when it is clear that they are to be used purely for horticultural purposes, in circumstances when the cabs will never be used? This could happen on a large scale. Will he look at this problem?
Mr. Strang: I appreciate the point. The problem is that tractors may be used for purposes other than those for which the exemption is granted. The hon. Member will appreciate that in horticulture we are often talking of the smaller tractor which is not affected by these regulations.
My hon. Friend the Member for Keighley (Mr. Cryer) referred to penalties, and I agree that they are inadequate. They are not affected by the regulations. As he recognised, they are governed by the 1956 Act, and there is nothing that we can do tonight to change that. My hon. Friend correctly described the position under the Agriculture (Safety, Health and Welfare Provisions) Act. We in the Labour Party were unsuccessful in rejecting an amendment moved in another place.
I point out that my hon. Friend the Under-Secretary of State for Employment, in answering a Written Question tabled by my hon. Friend the Member for Sheffield, Brightside said:
"as foreshadowed by the Consultative Document, the Employment Protection Bill will amend the Act to give the Health and Safety Commission responsibilities for health and
1478
safety matters relating exclusively to agriculture. As already announced, the Bill will be introduced during the present Session of Parliament."—[OFFICIAL REPORT, 5th November 1974; Vol. 880, c. 93.]
It is obvious that the Employment Protection Bill will do what we failed to do earlier.
The hon. Member for Bute and North Ayrshire (Mr. Corrie) took up the point about people with an old tractor being required to fit a cab to it by 1st September 1977. There has to be a date when it becomes illegal for anyone to drive a tractor without a cab. The first of September 1977 is a considerable time ahead. It would be in quite exceptional circumstances that people would be buying new cabs for old tractors. They can always buy secondhand cabs.
Mr. Jopling: There are three points which I raised and to which the Minister has, no doubt inadvertently, not replied. The first question had to do with this strange anomaly over windscreen wipers. The second related to what is meant by Regulation 3(8) and the phrase "materially changed". This is of great importance. Third, what is the position of a tractor now fitted with a safety cab which has a serious accident after the operative date in 1976? Can the cab be replaced with the same type of cab as had been fitted, which was not soundproofed, or does it, as I hope, have to be replaced by a much more sophisticated cab than it had before the accident?
Mr. Strang: The provision about 1st June 1976 relates to new tractors. Provided it was before 1st September 1977 a person could buy a cab which did not meet the noise requirements. The answer is that prior to 1st September 1977 he could replace the non-quiet cab with the quiet cab.
Mr. Jopling: I do not think the hon. Gentleman is right. That would not apply to the tractor that was bought new before 1970. I am talking about a tractor bought new after that time having to be fitted with a safety cab. I think there is a difference between a tractor bought before 1970 and a tractor bought after that date. I am concerned about new tractors bought between 1970 and the operative date in 1976. If an accident happens after that time, am I right in assuming that it would be possible to

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replace the broken cab with one that fulfilled the current regulations, but not necessarily the regulations relating to soundproofing?
Mr. Strang: Yes. I think that is what I said. Until 1st June 1976 the regulation applies to new tractors bought into the agriculture industry. It is later that it applies to cabs.
The hon. Gentleman referred to "material change". It is assumed that "material change" will be a change which renders the frame or the cab such as no longer provides protection to the driver. If, which seems extremely unlikely, an accident took place and there was a dispute whether the cab was defective, that could be tested only in the courts. I think the hon. Gentleman would accept that it is a fact of life with any law that there will be a grey area and that at the end of the day that can be tested in the courts. I assure the hon. Gentleman that the intention is that the cab should do the job that it is meant to do.
The hon. Gentleman referred to the windscreen wiper. The cab includes the frame, and often the frame does not have a windscreen fitted to it. Regulation 2 (3) requires
"an efficient automatic wiper for any windscreen it may have."
There are occasions when a windscreen wiper will become defective. Even the most efficient wiper will occasionally break down. Therefore, it is sensible that an agricultural worker should be required to report that breakdown to his employer so that it can be put right as soon as possible.
Mr. Jopling: That was not exactly my point. Regulation 6(c) uses the phrase "if one is fitted." That does not necessarily mean one that has broken down. It implies that certain cabs may not be fitted with windscreen wipers. My question was directed to Regulation 2(3)(b), which states that any cab must have "an efficient automatic wiper". There seems to be a basic anomaly here. That was the point I intended to make.
Mr. Strang rose—
Mr. Deputy Speaker: Order. That should teach the whole House how wrong
1480
it is for the Chair to allow latitude. [HON. MEMBERS: "Hear, hear."] I am grateful for that encouragement. I will try not to make that mistake again. The Minister knows as well as anyone that, whilst I am allowing him the same latitude in replying to the various points that have been made, he should try to link them to the nine-months' postponement.
Mr. Strang: I take your point entirely, Mr. Deputy Speaker. I was ranging as widely as hon. Members, but this point has nothing to do with the date. I will comply with your wishes. No doubt we can write to the hon. Gentleman about that matter.
I hope that, on the basis of these answers, the House will approve the regulations.
Question put and agreed to.
Resolved,
That the Agriculture (Tractor Cabs) Regulations 1974, a draft of which was laid before this House on 5th November, be approved.

MEMBERS' INTERESTS (DECLARATION)
Ordered,
That Mr. James Prior be discharged from the Select Committee on Members' Interests (Declaration) and that Mr. Geoffrey Johnson-Smith be added.—[Mr. Walter Harrison.]

ADJOURNMENT
Motion made, and Question proposed, That this House do now adjourn.—[Mr. Pendry.]

HOSPITAL SERVICES (LEICESTERSHIRE)
Mr. Deputy Speaker (Mr. George Thomas): I understand that the hon. Member for Harborough (Mr. Farr) has reached agreement with the Minister that a number of his colleagues may intervene in the Adjournment debate.
11.16 p.m.
Mr. John Farr: Mr. Deputy Speaker, I am glad to have colleagues on both sides of the House join briefly in this debate. I hope that the debate will make apparent to the Minister the strength of feeling throughout

1481
The Leicester area at the inadequacy of the hospital facilities in the district.
The first unusual feature of the debate is that it is related to Early-Day Motion No. 17, which concerns itself with the hospital services in the Leicester area. The motion was signed by all hon. Members representing the Leicester area. The second unusual feature is that most, if not all, of my area colleagues are present at this late hour to show that on both sides of the House there is strong feeling about the woeful inadequacy of conditions in our area.
I want an indication from the Minister that his right hon. Friend the Secretary of State for Social Services will receive a deputation from both sides of the House and from expert medical advisers. Second, I wish to stress that the disgraceful disparity between conditions in the Leicester area and elsewhere has already been raised in the House several times over the past few years. During the last eight years alone there have been no fewer than three Adjournment debates on this subject. Those debates took place on 7th March 1966, 14th December 1971 and 20th March 1972. On each occasion the Minister who replied made a statement which could only be described as a bundle of platitudes.
Mr. Michael Latham: Whitewash.
Mr. Farr: Yes, whitewash. We have heard only soothing sounds. The fact remains after all this time, and after repeated debates calling attention to the serious position of Leicester and the Leicester area, that we have continued to lag both on an area basis and on a national basis compared with the rest of the country. The situation is gradually getting worse and is now virtually intolerable.
We are not asking for another host of platitudes. We have had that before. We are seeking an assurance that there will be a major shift of expenditure into the Leicester area, which has been denied resources almost ever since the inception of the National Health Service. I am sure that the Minister will have read the early-day motion to which I have referred. It is fairly concise and effective in its description of the way in which our area has been starved of funds. We do not want any more soft soap from the
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Minister. We require a specific undertaking that this major shift of emphasis will take place.
I conclude by calling the Minister's attention to the human angle. Why do we who represent constituencies in the Leicester area continually have to defend the health service to our constituents? How can we continue to explain to them, when they come to see us at our "surgeries" or in interview sessions, that they have to wait up to three years for a National Health Service operation or three months or more for an appointment with a consultant in the Leicester area? It is an impossible and invidious task. A number of people who have come to see me have gone to the expense and trouble of borrowing money to have their operations and consultations "on the private", as they say, because they cannot afford the anguish of waiting almost indefinitely.
I demand action from the Minister.
11.21 p.m.
Mr. Tom Bradley: I congratulate the hon. Member for Harborough (Mr. Farr) on his good fortune in securing this Adjournment debate and thus drawing attention to the serious situation in the National Health Service in Leicester and Leicestershire. I pay tribute to his generosity in yielding part of his time to those of us who also wish to speak. That illustrates the non-party nature of our protest.
Under successive Governments the hon. Gentleman and I and others have drawn attention to the inferior allocation of NHS resources to Leicester and Leicestershire. Indeed, the last Under-Secretary to the Department in the Conservative Government acknowledged the inferiority of the allocation when he visited Leicester in February 1973. It is well known—the figures and statistics speak for themselves —that the Leicester Health Authority is at the bottom of the regional league, which is at the bottom of the National Health Service league. This has been the position for many years, as is illustrated in the early-day motion which we have tabled.
It is intolerable that Leicester hospitals have such long waiting lists, a shortage of consultations and staff in all categories, inadequate bed provision and an expenditure per head which puts the city at the

1483
foot of the fourth divison, talking in national soccer terms. Inequalities in the distribution of revenue moneys over the country can be seen readily by comparing Leicester with any other major health authority.
What is the Department doing to readjust the allocation of resources available to areas like Leicester which are most in need, and, particularly, what has the Minister to say to us tonight which will encourage us to feel that Leicestershire's days as one of the medicine's depressed areas is nearing an end? That is what we want to hear. We need action. I agree with the hon. Member for Harborough that we have been put off by platitudes and soft soap under successive Governments for far too long. Where are we going? We are all united in this cause.
11.23 p.m.
Mr. Adam Butler: The fact that there are four times the standard number of Members in the Chamber for an Adjournment debate speaks for itself. The early-day motion also does that for us. There is no reason to draw further attention to the figures, because they speak for themselves.
I wish to make two points only and to support what has been said from both sides of the House. We are grateful for the expenditure planned for the three new or expanded hospitals in Leicester. But I ask that in carrying out this expenditure in the county as a whole the local hospitals—those on the periphery—should not be forgotten. It is easy for planners to expect patients to be drawn into the centre of the web. One accepts that the efficient use of medical resources is important. One accepts the argument that the time of the doctors and specialists is important. But the medical service deals with human beings, and most of those human beings, the unfortunate patients, prefer to be in a hospital close to their homes where their friends can visit them. There is also the cost of travelling from, let us say, my constituency into the centre of Leicester with bus fares being so high.
We have to find the balance between super-efficiency in the medical service on the one hand and the more important human factor on the other which is so
1484
often forgotten. My plea is that out of the money which must be spent in Leicestershire as a whole a fair proportion should go to the local hospitals.
My second point is that one accepts in our current economic situation that there must and should be some restriction on the rate of increase in health service expenditure, however much the crying need. But it is only fair that areas which have benefited most in the past should now experience the restraints. What cannot and must not happen is that Leicestershire's expenditure plans should be cut. We are discussing a problem of deep social and human need, but we are also discussing fair play. All the statistics and experience of the past show that Leicestershire has been hard done by, and this unfairness must be put right.
11.27 p.m.
Mr. Greville Janner: I join in thanking the hon. Member for Harborough (Mr. Farr) for kindly allowing us to take part in a united shout of protest from both sides of the House. Individually, most of us are well-known for being nuisances in the interests of our constituents. The nuisance that we are making together is a great one which will continue until we have an assurance that it will get results.
There is stark inequality and unfairness in the treatment of the citizens of Leicester and Leicestershire in respect of the health services. I pay tribute to all those who have enabled the system to bear the weight even as it has—those "angels" of Leicester, the general practitioners, consultants, nurses, auxiliaries, workers in the domiciliary services and all who help in the hospitals and homes. They do a fantastic job in much more difficult circumstances than obtain in most parts of the country, but there are not enough of them.
At present 17–4 per cent. of the total beds in the Leicester General Hospital—that is, 90 beds—are closed. In Hillcrest Hospital 20 per cent. of the beds—30 beds—are closed, and in Groby Road Hospital 31 beds are closed—7·6 per cent. That is caused mainly by lack of staff. It is a disgrace. It is not enough to have the hospitals. We must also have the staff to look after the patients.
We ask the Minister for an assurance that the proposals for a teaching hospital

1485
in the Leicester area will survive any cuts that may be made. We are entitled to a firm assurance on that on behalf of our constituents.
I pay tribute to those who work in our hospitals. This morning, because of my voice—for which I apologise—I joined the queue at the Royal Hospital. I sat there for some time and was eventually seen by a distinguished consultant who informed me that nothing was growing on my larynx. When I asked him what I should do, he laughed and said "Stop talking." I do so, with thanks, again, to the hon. Member for Harborough.
11.29 p.m.
Mr. Nigel Lawson: I endorse all that has been said by hon. Members on both sides of the House and thank my hon. Friend the Member for Harborough (Mr. Farr) for allowing me the opportunity to take part in the debate.
The facts stare the Minister in the face, and have done so for a long time. His figures of annual National Health Service expenditure show that against the national average of £37 per head the expenditure in the Trent region is about £31 per head and in Leicestershire £25 per head—only two-thirds of the national average. That is a scandal. One would like to think that this was explained by the people of Leicestershire being exceptionally healthy. They are exceptionally wise, but I do not think that they are exceptionally healthy. No such explanation can fit these figures.
This is a long-standing inequality. Indeed, it was pointed out as such in The Hospital in July, 1971, in an article headed,
"Inequality and Management of the National Health Service",
and written by someone not from Leicestershire. The article pointed out that there had been inequality since the inception of the N.H.S.
That inequality will only be put right as a deliberate act of policy. It will be put right by two things. First, the capital spending must be greatly increased, since current spending follows capital spending. Secondly, in particular, we must have the new district general hospital at Glenfield. There must be no backsliding on that.
My hon. Friend the Member for Bosworth (Mr. Butler) pointed out that the
1486
broadest backs should bear the heaviest burdens in the health expenditure cuts to come. Whatever other health service expenditure cuts there have to be, there should be none in Leicestershire.
11.31 p.m.
Mr. Jim Marshall: I, too, thank the lion Member for Harborough (Mr. Farr) for allowing hon. Members on both sides of the House to join in the debate. I am the junior Member for Leicester and Leicestershire.
Mr. Greville Janner: But my hon. Friend will be here for a very long time.
Mr. Marshall: I was aware of the difficulties that we were facing in the city before my election. There was a recent meeting between the local branch of the British Medical Association and local Members of Parliament, at which I was present. I was appalled when I saw the allocations which had been made by the former Sheffield Regional Hospital Board to the Leicester area.
I say with diffidence, having been born and bred in Sheffield—naturally I do not like to see Sheffield receive good hidings —that on this occasion Sheffield deserved a good hiding. The resources allocated to Leicester within the former regional board area were appallingly inadequate.
At that meeting, a general practitioner told me of a patient he was treating for some tummy upset which he thought was an ulcer. He sent the man to the local hospital—the Royal Infirmary, I believe —for an X-ray. This indicated a stomach ailment of the kind he had suspected. The patient returned home and was treated by the doctor, who, six months later, sent him back to the hospital for another X-ray. The radiologist then wrote that the X-ray had been carried out but he was not sure whether the growth was malignant or non-malignant. Only then did the GP find out that the very machine needed to finalise the diagnosis was out of action and that the hospital could not specify when it would be in suitable condition again to carry out the work.
That is the kind of situation we are facing in Leicester, and I hope that my hon. Friend the Under-Secretary of State will indicate that it will improve in the not-too-distant future.
11.34 p.m.
Mr. Michael Latham: I throw the weight of the people of Melton into the argument. Melton is a sharply growing area, and its people are extremely concerned about the present situation, which is becoming increasingly impossible for the reasons that other hon. Members have already cogently described. We have all written to the Secretary of State. None of us has been satisfied with the replies. We expect a better reply from the Under-Secretary of State tonight.
As Member for Melton, I, too, am tired of having to give gloomy advice to my constituents about the length of time it will take them to get proper attention in hospitals in the county. I had a deplorable case recently concerning a person waiting for a long time for treatment by an ear, nose and throat department. I was informed by the local area health authority that such a delay was normal.
This situation must change. The hon. Gentleman will have the full support of all Members from Leicestershire in changing it. I hope he will now tell us what we all want to hear.
11.35 p.m.
The Under-Secretary of State for Health and Social Security (Mr. Alec Jones): I am delighted to have the opportunity of trying to reply to this debate, but because so many hon. Members have taken part I am sure they appreciate that there will certainly be some individual points which I shall have to deal with in writing rather in the time available.
Mr. Greville Janner: Say "Yes" to us all.
Mr. Jones: That would be the easiest way and the one which I should like.
It would be churlish of me not to pay tribute to the hon. Member for Harborough (Mr. Farr), who has consistently pursued this problem, supported sometimes by one or two Members on either side. Tonight, however, he has achieved what I should have thought was the impossible; he has united all Leicestershire Members on this issue. Lest I should forget to say so later because of the speed with which I hope to proceed, I should like to assure the hon. Member
1488
that we have agreed to receive a deputation. Arrangements are being made, and he will be consulted on the matter.
I wish first to talk about the origins of the inequalities concerning the financial allocations. It is certainly true that these inequalities exist, and they have done so for a very long time. As a Member from another part of the country, I would say to the hon. Member, although it is no comfort to Leicestershire, that these equalities exist in other parts of the country.
Mr. Lawson: Not to the same extent.
Mr. Greville Janner: Leicester is the worst in the country.
Mr. Jones: We could argue at length, but if we were to do that I should not have time to reply to anything else.
In 1948 the Sheffield Regional Hospital Board inherited a situation in which the facilities for health care and the allocation of resources failed to reflect need in that area. In the region as a whole there were deficiencies in terms of buildings, levels of current expenditure and, consequently, levels of staffing. One of the objectives in setting up the National Health Service was to eliminate inequalities in health care provision, and successive Governments have faced the problem of achieving this against a background of rising public demand and a growth of resources which has been less substantial than all of us would really wish. I am sure that it has been less substantial than the Members for Leicestershire would wish for their area.
Any large-scale redistribution of current expenditure between regions must, however, be subject to the recipient region's ability to absorb and make effective use of increased allocations. This ability is linked to the level of existing health buildings and beyond a certain margin it becomes dependent upon the development of additional capital facilities. Those facilities are what hon. Members have asked for tonight.
Thus major problems of inequalty, such as are known to exist in Leicestershire, are only finally resolved over a number of years. It was for this reason that in 1968 the then Labour Government decided to begin to tackle the task of equalising the provision of health care in

1489
a systematic way. This decision led to the introduction in 1970 of an equalisation formula based on objective factors and designed, assuming a steady growth rate, to achieve equity in current expenditure among regions in approximately 10 years, starting in 1971–72.
So far in the Trent Region the redistribution formula has had the effect of bringing hospital expenditure per resident head of population over the region as a whole nearer to the national average. For example, between 1970–71 and 1973–74 the region moved from 83·4 per cent. to 91 per cent. of the national average and in 1974–75 Trent Region's relative position in relation to hospital services has continued to improve. I accept that the improvement was not fast enough for the hon. Member for Harborough, but it indicates that the formula is beginning to work in the right direction and in the way that the hon. Member wants.
In addition to the improvements brought about by the redistribution formula, the region has since 1970 received a series of special recurrent allocations amounting, over a five-year period, to approximately £2 million at 1973 price levels, in recognition of the need to develop and upgrade services in preparation for the introduction of medical undergraduate teaching at one of the regions' two new medical schools —namely, at Nottingham. I can assure hon. Members that my right hon. Friend is aware that Leicester is in a similar situation to that recognised in Nottingham a few years ago, and she has in the current year made a substantial special allocation of funds to the Trent Regional Health Authority as a first step towards improving health facilities in Leicester to meet both service and medical teaching requirements.
My right hon. Friend and the Trent RHA are aware that there is a substantial shortage of hospital facilities in Leicester and that the low per capita level of expenditure will not be finally corrected until the planned programme of capital developments, which is now in hand, is fully implemented. To this end, in the past five years capital developments totalling approximately £14 million have commenced in Leicester, and further major developments are planned. Ongoing capital projects will cost in the
1490
region of £11 million. The actual figure is £10·8 million. The planned capital programme also includes the development of an additional district general hospital in Leicester at a cost of more than £23 million. This was the special request of the hon. Member for Blaby (Mr. Lawson) who made much of its importance, and I agree with him.
Mr. Lawson: We want an assurance that these figures will not be affected by any future cuts.
Mr. Jones: The hon. Gentleman will appreciate that all that I can do in the short time left to me is to try to deal with the points hon. Members have raised. I shall do my best. If there are others which the hon. Member for Blaby feels to be urgent, perhaps I can deal with them in correspondence. The hon. Gentleman will understand, I am sure, that I have given up part of my time to enable him to make a speech. It ill-behoves him to adopt this kind of attitude.
Mr. Lawson: I am obliged to the hon. Gentleman for doing so.
Mr. Jones: Developments completed in the past five years have already effected improvements in the quality of facilities available, and projects now in progress will improve the situation significantly within the next few years. Nevertheless, my right honourable Friend recognises the need to continue to improve Leicester's relative position in relation to the region and the country as a whole in the shorter term, and in the current year, with assistance from my Department, the regional health authority has made a substantial allocation of additional funds as a first step in this direction. The area health authority has in preparation plans for the deployment of this additional revenue allocation to ensure that the maximum benefit to existing services can be achieved.
I have dealt so far mainly with capital and current expenditure, but we must not forget that essential resources include manpower as well as money, and it is in the former field that the health authorities face particular problems in Leicester.
In relation to medical staff, my right hon. Friend is aware that shortages exist. The additional revenue allocations to

1491
which I have already referred should go some way towards remedying deficiencies and, in the longer term, the presence of the new medical school will both attract high calibre doctors from outside the Leicestershire area and generate an output of locally qualified doctors, many of whom may be expected to practise in the area. Doctors are by no means the only need, however. The development of hospital and other facilities on the extensive scale envisaged will require large numbers of all types of staff. My hon. and learned Friend the Member for Leicester, West (Mr. Janner) made this point about the shortage of staff. I am sure that he will be pleased that we have this in mind. It is for this reason that we have jointly commissioned Leicester University to undertake a study aimed at identifying manpower requirements and any potential problems and make recommendations.
From what I have just said, I trust that hon. Members will accept that the problems facing the health authorities
1492
responsible for providing services in Leicestershire have by no means passed unnoticed by my Department. The underlying causes of the problems now faced are largely historical, but the situation in Leicester serves to emphasise the point which my right hon. Friend has consistently emphasised during debates in the House; namely, that we are determined to find a better way of allocating resources if situations like that in Leicester are not to recur elsewhere.
I know that hon. Members who have taken part in this short debate appreciate that I cannot give them all the assurances for which they asked. However, I shall read their speeches carefully tomorrow and write to each of them dealing with their specific points. I assure them that neither my right hon. Friend nor the Department is unaware or ignorant of the real and genuine worries of the people of Leicestershire.
Question put and agreed to.
Adjourned accordingly at sixteen minutes to Twelve o'clock.

SCOTLAND
  House Building (Oil Development)
  House Building (Oil Development)
  Hunterston
  Hunterston
  Student Grants
  Student Grants
  Dundee and Tayside
  Dundee and Tayside
  Oil Rigs (Law and Order)
  Oil Rigs (Law and Order)
  Licensing Laws
  Licensing Laws
  House Building (Standards)
  House Building (Standards)
  Local Authority Salaries
  Local Authority Salaries
  Invalid Vehicles (Shopping Areas)
  Invalid Vehicles (Shopping Areas)
  Teachers' Salaries
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  Local Authority Staffs
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  Fishing Limits
  Fishing Limits
  Herrings
  Herrings
  Crofting
  Crofting
  Schools (Religious Instruction)
  Schools (Religious Instruction)
FOREIGN AND COMMONWEALTH AFFAIRS
  Cyprus
  Cyprus
  Greece (Detained British Subjects)
  Greece (Detained British Subjects)
  Israel
  Israel
  Mr. Christopher Westen
  Mr. Christopher Westen
  International Women's Year
  International Women's Year
  Dacca High Commission
  Dacca High Commission
DEFENCE
  HMS "Bulwark"
  HMS "Bulwark"
  HMS "Hermes"
  HMS "Hermes"
AGRICULTURE, FISHERIES AND FOOD
  Farmland
  Farmland
  Glucose and Starch
  Glucose and Starch
  Sugar Imports
  Sugar Imports
EDUCATION AND SCIENCE
  Student Grants
  Student Grants
  Teacher Training
  Teacher Training
  British Library
  British Library
  Adult Illiteracy
  Adult Illiteracy
EMPLOYMENT
  Unemployed Persons
  Unemployed Persons
  Refining (Isle of Grain)
  Refining (Isle of Grain)
  Textile Mills (Short-time Working)
  Textile Mills (Short-time Working)
  Young Persons (Kirkby)
  Young Persons (Kirkby)
  Royal Commission on the Distribution of Income and Wealth
  Royal Commission on the Distribution of Income and Wealth
  Professional and Executive Recruitment Service
  Professional and Executive Recruitment Service
ENERGY
  Natural Gas
  Natural Gas
HOME DEPARTMENT
  Children and Young Persons Act 1969
  Children and Young Persons Act 1969
  Criminal Injuries Compensation
  Criminal Injuries Compensation
  Probation Service
  Probation Service
  Police (Complaints)
  Police (Complaints)
INDUSTRY
  Telecommunications
  Telecommunications
  Advance Factory (Callington)
  Advance Factory (Callington)
  Redundancy (European Commission Studies)
  Redundancy (European Commission Studies)
  International Computers Limited
  International Computers Limited
  Health and Safety Commission
  Health and Safety Commission
NATIONAL FINANCE
  Capital Gains Tax
  Capital Gains Tax
  £ Sterling (Value)
  £ Sterling (Value)
  Disabled Persons
  Disabled Persons
  Blind Persons (Allowances)
  Blind Persons (Allowances)
  Government Contracts (Review)
  Government Contracts (Review)
NORTHERN IRELAND
  Housing
  Housing
OVERSEAS DEVELOPMENT
  Disasters (Relief Arrangements)
  Disasters (Relief Arrangements)
PRICES AND CONSUMER PROTECTION
  Weights and Measures Testing
  Weights and Measures Testing
SOCIAL SERVICES
  Charitable Institutions (Residents)
  Charitable Institutions (Residents)
  National Insurance Contributions
  National Insurance Contributions
  Hospital Beds (Leicestershire)
  Hospital Beds (Leicestershire)
  Vaccine-Damaged Children
  Vaccine-Damaged Children
  Lisson Grove Clinic
  Lisson Grove Clinic
TRADE
  Fuel Prices
  Fuel Prices
  Textile Goods (Government Orders)
  Textile Goods (Government Orders)
  Glucose
  Glucose
ENVIRONMENT
  Channel Tunnel
  Channel Tunnel
  Motorway Verges
  Motorway Verges
  Landholdings (Local Authorities)
  Landholdings (Local Authorities)
  Farmland
  Farmland
  Quarrying
  Quarrying
  Housing Finance Act (Operation)
  Housing Finance Act (Operation)
  Housing Acquisitions (London)
  Housing Acquisitions (London)
  Improvement Grants
  Improvement Grants
  M42 (Tamworth)
  M42 (Tamworth)
  Construction Industry (Subcontracting)
  Construction Industry (Subcontracting)
  Rates
  Rates
  Road Accidents (Compensation Payments)
  Road Accidents (Compensation Payments)
  Residential Boat Owners Association
  Residential Boat Owners Association
  Marlborough Place, N.W/
  Marlborough Place, N.W/
  Sewerage Charges
  Sewerage Charges
WALES
  Fluoridation (Anglesey)
  Fluoridation (Anglesey)
  Celtic Sea Advisory Committee
  Celtic Sea Advisory Committee
  Milford Fishing Industry
  Milford Fishing Industry

Preamble
The House met at half-past two of the clock (Prayers having been read earlier at the Judicial Sitting by the Lord Bishop of Saint Albans):
The LORD CHANCELLOR on the Woolsack.
Several Lords—Took the Oath.

BATHING AREA CONTROLS
THE EARL OF KINNOULL: My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government how many accidents to bathers or water-skiers caused by motor boats have occurred over the last three years and whether they consider the present controls to safeguard bathing areas are satisfactory.
LORD WELLS-PESTELL: My Lords, I regret that we have no comprehensive information about the number of such accidents, although we know of three involving bathers during the period in question, two of which were fatal. There is no reason to suppose that the present powers of control available to local authorities are inadequate, but this is one of the matters now under review by the Working Party on Water Safety which was recently set up by my right honourable friend the Home Secretary.
THE EARL OF KINNOULL: My Lords, while thanking the noble Lord for that reply, may I ask whether he can say how soon this Working Party will compute its reports and whether its final Report will be published?
LORD WELLS-PESTELL: My Lords, up until ten minutes ago I have tried to find out when the Report will be avail able, and I am sorry that I can help neither the noble Lord nor your Lord ships. I cannot say whether publication is imminent, or whether it will take some months to be produced. But I can say that once the Report is in the hands of my right honourable friend it will be published.
THE EARL OF KINNOULL: My Lords, can the noble Lord advise the House how local authorities can help bathers and water-skiers? Is there, for instance, a code of safety issued by the Department to local authorities?
LORD WELLS-PESTELL: Yes, my Lords: a guide was produced which gives statutory rights to local authorities to determine speeds, and even to mark out areas where speedboats cannot operate.
LORD HAWKE: My Lords, the noble Lord mentioned three cases about which he knows. Does he know the number of fatal accidents which have befallen ordinary swimmers who have not been interfered with by these water-skiers?
LORD WELLS-PESTELL: My Lords, I understand that about 700 people are drowned accidentally each year in Great Britain. About 75 per cent. of these deaths occur in inland waters; the remaining 25 per cent. occur on the coast.

COURT LINE LIMITED
2.34 p.m.
LORD HALE: My Lords, I beg leave to ask the Question which stands in my name on the Order Paper and to inform the Minister that I am the holder of shares in this company and have therefore a notional or fictitious interest to declare.
The Question was as follows:
To ask Her Majesty's Government what arrangements have been made for taking over the assets of Court Line Limited, what is the nature of the assets acquired and what are the figures of the liabilities assumed, and upon what terms.
LORD LOVELL-DAVIS: My Lords, may I first commiserate with my noble friend for his misplaced interest in this subject. Court Line's shipbuilding, ship-repairing and associated interests were acquired on September 19 by the purchase for £16 million of the entire ordinary share capital of Appledore Shipbuilders Limited, Sunderland Shipbuilders Limited, and North-East Coast Ship Repairers Limited. These companies are shipbuilders in Devon and Sunderland and ship repairers on the Tyne, Wear and

1017
Humber. In addition they own a number of subsidiary companies, including a house-building company in Devon, a steel works in County Durham and marine engineering companies in Sunderland and Newcastle. The contract under which the purchase was made does not impose any additional liability on the Government. Almost all of the purchase price was applied to discharge debts owed by Court Line to the companies which the Government acquired, or to meet liabilities, under guarantee given by those companies, of Court Line's obligations.
LORD HALE: My Lords, with the leave of the House may I congratulate the noble Lord on making his debut at the Dispatch Box, and also Her Majesty's Government on the accession of strength which they have acquired? It is sad to have to add that, despite the clarity of his statement, it did not appear com pletely on the modest screen of my own mind with the clarity that it deserved.As I understand it—
SEVERAL NOBLE LORDS: Question!
THE LORD PRIVY SEAL (LORD SHEPHERD): My Lords, I was hoping that my noble friend would have heard one or two cries of "Question!" Will my noble friend please put the question to my noble friend Lord Lovell-Davis?
LORD HALE: My Lords, with the greatest pleasure in the world. What I want to ask my noble friend is, whether he can clarify the situation in relation to this company and in relation to questions? Is he aware that on Monday apparently, there is to be a liquidation, some sort of Department of Trade inquiry which has not been explicitly made known, and some sort of Departmental inquiry into holiday bookings and their compensation? Is the noble Lord aware that each of these involves considerations of the right to comment on quasi-judicial investigations and the limitations on our right to make reference to the efforts of this company quite suddenly to take advantage of all the commercial opportunities of the expanding universe?
LORD LOVELL-DAVIS: My Lords, I do not know whether I fully caught all the questions of my noble friend. As my noble friend must be painfully aware, the affairs of Court Line and its sub
1018
sidiary companies are in the hands of the liquidator. There are at the moment two investigations being carried out; one by the inspectors appointed by the Department of Trade under Section 165 of the Companies Act who are investigating the affairs of Court Line companies to see whether there is any breach of the Companies' Act; and the other is the Parliamentary Commissioner's investigation into the question of whether there was any maladministration on the part of the Department of Trade and Industry. I am of course aware of the liquidation, and the situation to this very day, I believe, is that there is a meeting of the Court Line creditors.
The Government are unable to say what payments will be made to creditors or whether any money will be available to the shareholders. It depends on how successful the liquidator is in realising Court Line's other assets in ships, hotels and aircraft. But the main effect of this purchase was to reduce Court Line's liabilities by £10 million so that money realised from the sale of these other assets would benefit the other creditors, and perhaps the shareholders, proportionately more. If the shipbuilding companies themselves had gone into liquidation, their liquidators would have claimed the £10 million from the Court Line liquidator, and of course the break-up value of the shipbuilding and associated assets would have been a lot less than £16 million.
LORD SHINWELL: My Lords, can my noble friend say whether the shipbuilding assets which have been taken over are likely to prove viable; whether they are still in operation, and how many men are employed?
LORD LOVELL-DAVIS: My Lords, the companies will continue to operate as commercial concerns under the existing management. One of the primary reasons why Her Majesty's Government took over these companies was, of course, that the purchase protected approximately 9,000 jobs in development areas. I will not bore noble Lords with a list of the companies involved, but there are in fact 18 employing, as I say, 9,000 people. The biggest employer among the 18 companies is Sunderland Shipbuilders, which employs just over 4.000 people, and the Middle Docks and Engineering Company

1019
Limited in South Shields, employing over 1,000. The rest employ considerably fewer than this number.
LORD BLYTON: My Lords, is the Minister aware that the residents in South Shields are very pleased that the Government took over the shipbuilding and the ship-repairing side? Is he further aware that a great development is taking place now, in that the workmen are being taken into consultation in the running of the shipyards?
LORD TREFGARNE: My Lords, can the noble Lord confirm that the principal shipbuilding companies were all solvent at the time they were taken over, that they are now trading profitably and that there will be no continuing liability to the taxpayer to subsidise these firms?
LORD LOVELL-DAVIS: Yes, my Lords.
LORD SLATER: My Lords, could my noble friend confirm that when a subsidiary of a parent company goes into liquidation (or, as we say in County Durham, it goes down) then the parent company evades all responsibility so far as its subsidiaries are concerned?
LORD LOVELL-DAVIS: My Lords, I would require notice of that question. I am not at all sure; but if the noble Lord really wishes to press this matter, I will gladly write to him.
LORD SLATER: My Lords, is my noble friend aware that one of the reasons why I asked that particular type of question is that we have many of these subsidiaries coming into our areas, that they are built up by their parent companies and that, as I see and understand it, the parent company ought to carry the responsibility for any of its subsidiaries if it gets into difficulties.
LORD LOVELL-DAVIS: My Lords, this is a matter of company legislation, and I am afraid I am not fully aware of it; but I will certainly look into the matter.
LORD WALSTON: My Lords, if we may move to another activity of Court Line, could my noble friend inform us what steps are being taken to ensure the continued operation of the two important hotels in St. Lucia, bearing in mind
1020
particularly the importance of those two hotels to the economy of the island?
LORD LOVELL-DAVIS: My Lords, perhaps my noble friend would be good enough to put down a Question on the matter. I think it is beyond the scope of the Question set down to-day.

SPEECH THERAPISTS
2.44 p.m.
BARONESS MASHAM OF ILTON: My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government when they will bring in the new grading structure for speech therapists.
LORD WELLS-PESTELL: My Lords, as the noble Baroness will appreciate, speech therapists are among eight professions whose pay structure, levels of remuneration and related conditions of service are currently being considered by a Committee of Inquiry under the chairmanship of the noble Earl, Lord Halsbury. The Committee to which I have just referred is looking at the grading structure of the profession to which the noble Baroness refers in her Question.
BARONESS MASHAM OF ILTON: My Lords, while thanking the Minister for his reply, which is not very encouraging because these people have been waiting a long time, may I ask him whether he appreciates that the reorganisation of the National Health Service has been the disorganisation of the speech therapy service, and does he know that there is an appalling drop-out of speech therapists? Only last year, out of 27 who graduated from one school 3 are now working. Does the noble Lord appreciate that this is due, too, to the very frustrations which they have? And can he hold out any hope that conditions in hospitals and clinics will get better?
LORD WELLS-PESTELL: My Lords, I think the noble Baroness is quite justified in feeling as she does about this matter, because so does the Department; but I must point out that there are other professional organisations whose structure and pay and conditions have to be considered alongside those of the speech

1021
therapists. I can understand their impatience, but over the last four years there have been financial difficulties—there have been pay pauses and counter-inflation situations—and it is difficult for the Committee of Inquiry to take one profession out and disregard the other seven. The Committee is dealing with the whole lot, and we are hoping that before the end of the year the Committee will be able to report on them.
LORD HARVEY OF PRESTBURY: My Lords, will the noble Lord say how long this Committee has been looking into this matter, and when they expect to come to a conclusion?
LORD WELLS-PESTELL: My Lords, in answer to the first part of the noble Lord's question I cannot be precise.
LORD HARVEY OF PRESTBURY: Why not?
LORD WELLS-PESTELL: Because I just do not know. It is as simple as that. As to the second part of the question, in reply to the noble Baroness I said that it is hoped that a decision will be made by the end of this year.
LORD MAYBRAY-KING: My Lords, is the noble Lord aware that those of us who know of the excellent work of speech therapists over the last 25 years are grateful to my noble friend Lady Masham for raising this question; and may we ask the noble Lord whether he would make our representations known to Lord Halsbury and his Committee?
LORD WELLS-PESTELL: My Lords, we are aware of the situation. Perhaps I ought to point out that the current salary scales of speech therapists were increased, by agreement, by from £282 to £513 and back-dated to May 23 last, and employing authorities were notified of the new rates on October 2 last. We are not letting this matter rest. We are trying to deal with it as quickly as possible.
BARONESS SUMMERSKILL: My Lords, does my noble friend think there is any relationship between the fact that the speech therapists appear to be the Cinderellas of the professions supplementary to medicine and the fact that they have not a State register?
LORD WELLS-PESTELL: My Lords, I should not like to express an opinion on that except to say, having had some experience myself in the field of professional social work, that I think a good many of these quasi-medical social work groups are at some sort of disadvantage, and I hope that the Committee of Inquiry will be able to redress a good many of the anxieties which are felt in the House to-day.
BARONESS MASHAM OF ILTON: My Lords, may I ask the noble Lord whether he has in his Department a speech therapist to advise on these matters?
LORD WELLS-PESTELL: My Lords, I do not know whether we have a speech therapist, but I am perfectly satisfied from my inquiries and from my dealings with the Department in all fields of social service that we have some really competent people to advise us in every field.
LORD AMULREE: My Lords, in view of what was recommended in the Quirk Report could the noble Lord tell me whether a good deal of research in speech therapy and its improvement is going on now? Further, does he know anything about the Speech Therapy Trust, which was a trust set up to encourage research into speech therapy?
LORD WELLS-PESTELL: My Lords, off the cuff, I cannot give the noble Lord an answer to either of those supplementary questions, but perhaps he will allow me to look into them—certainly the latter, because I am not aware of that trust—and to write to him letting him have what information we have.
LORD ABERDARE: My Lords, is the noble Lord aware that this is a very small but very important profession and that, having had the Quirk Report in 1972, they are very disillusioned that seemingly there has been a very long delay in meeting its recommendations? Can the noble Lord say whether it is intended to appoint an Area Health Authority level organiser, and has this been referred to the Whitley Council as well as the Halsbury Committee?
LORD WELLS-PESTELL: My Lords, I am sorry that the noble Lord—I nearly said "my noble friend", because I regard him as being such—raised the first part

1023
of his question because I did not want to remind him that, as he knows, some of the delay has in no uncertain manner been due to the last Government. In reply to the second part of his question, a notice has gone out to the appropriate authorities about the appointment of area speech therapists. There are already, I believe, two grades of senior speech therapist, and a letter has been sent out about the appointment of area speech therapists. But we are waiting upon the report of the Committee of Inquiry with regard to pay and conditions.
LORD PLATT: My Lords, would the noble Lord please clarify something which I did not hear properly? I thought he said that the rate had gone up from £280 to £500 or so. Is that the salary per month or per year?
LORD WELLS-PESTELL: My Lords, I may be wrong, but I think I made it clear that it was increase in salary.
LORD PLATT: An increase from what to what?
LORD WELLS-PESTELL: My Lords, I cannot give the noble Lord the maximum or minimum salaries of speech therapists.
BARONESS D'ARCY DE KNAYTH: My Lords, does the Minister realise that much of the disillusionment among speech therapists is caused by the fact that as yet there are no area speech therapists? Further, would he agree that it is vital to act rapidly in a matter which would go a long way towards achieving the much-needed career structure which is so necessary to attract recruits and to cut the drop-out rate?
LORD WELLS-PESTELL: My Lords, as I pointed out a moment or two ago, my right honourable friend the Secretary of State for the Social Services asked Area Health Authorities in April of this year to appoint area speech therapists as soon as was practicable. I realise that it is extremely difficult to do this unless one ', has a structure and the pay scales that go with such a structure.
THE EARL OF ONSLOW: My Lords, have the Government any views on the application of the social contract to this matter and, if so, would they convey them to the Halsbury Committee?
LORD SHEPHERD: My Lords, the noble Earl gives me the opportunity to intervene. I suggest that this question is rather wide of the Question on the Order Paper. If I may, I should like to congratulate the noble Baroness on having stimulated considerable interest in this matter. I hope that she will feel satisfied with the way in which my noble friend has answered. An opportunity will be provided for the matter to be further examined if that should be her wish or that of the House.

BEET SUGAR PRICES
2.54 p.m.
THE EARL OF KIMBERLEY: My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government whether they will ensure that British farmers obtain the equivalent price per ton for beet sugar produced in this country next season to that paid for the 1·4 million tons of cane sugar from the developing Commonwealth countries which were guaranteed under the recent EEC negotiations.
LORD STRABOLGI: My Lords, the price paid to the United Kingdom beet grower next season will be determined by the Council of Ministers on the basis of proposals by the Commission. These are likely to be related to the conditions that affect Community production, such as production costs or the relative attractiveness of competing crops. The return which the United Kingdom beet grower is receiving this season is already some 30 per cent. above that of 1973–74. The price to be paid to the developing Commonwealth sugar producer, on the other hand, must, in addition, take account of the price obtainable on the world market, which represents an alternative outlet for Commonwealth sugar.
THE EARL OF KIMBERLEY: My Lords, while thanking the Minister for his Answer, may I ask whether Her Majesty's Government think this provides sufficient incentive for the sugar beet farmer for next season?
LORD STRABOLGI: My Lord, the price increase expected on January 1 will

1025
put the United Kingdom beet grower at least on a par with other Community beet growers. This is extremely important for the United Kingdom because the return to the beet grower has lagged behind that available to producers of competing products—for example, cereals. In addition, a very much increased acreage has been agreed for the United Kingdom from next year. The beet grower, therefore, in the 1975–76 season will be guaranteed the full EEC price on all sugar produced up to a maximum of approximately 1·5 million tons. This compares extremely favourably with the United Kingdom maximum quota of 990,000 tons at the present time. The Government have always been committed to securing a significant expansion of United Kingdom beet and this is now in prospect.
LORD BLYTON: My Lords, is the Minister aware that there would be no such wailing about the Common Market and Britain if we had stayed out and does not he now come to the conclusion that the Common Market is the economics of the madhouse?
LORD CARRINGTON: My Lords, can the noble Lord say what the difference in price is this year between what the United Kingdom fanner and the Common Market farmer obtains?
LORD STRABOLGI: My Lords, the minimum price paid for beet in United Kingdom is at present £8·63 per long ton. This price, therefore, will be increased in the light of the following: it is intended that the United Kingdom should move to the full EEC price for sugar and sugar beet on January 1, 1975. This will bring the return up to £102 per long ton at least, and possibly higher. The annual price negotiations in the Community are to begin in December and a reasonably substantial increase is expected for beet producers throughout the EEC.
LORD CARRINGTON: My Lords, does the noble Lord think that information bears out whatever it was that the noble Lord, Lord Blyton, said?
LORD SHINWELL: My Lords, can my noble friend say whether the price paid to the beet sugar growers satisfies them and whether the EEC has the authority or the power to impose a limitation on
1026
the production of beet sugar in the United Kingdom?
LORD STRABOLGI: My Lords, I think that I did answer that when I answered the noble Earl, Lord Kimberley, but in reply to my noble friend, perhaps I may remind him that the price increase expected on January 1 will put the United Kingdom beet grower at least on a par with other Community beet growers. In connection with the quota, this has now been increased by the present Government to 1½ million tons from 990,000 tons, as I have explained.
LORD SHINWELL: My Lords, will my noble friend reply to the second part of my question? Are we to understand that the EEC have the power or the authority to impose a limit on the production of beet sugar in the United Kingdom?
LORD STRABOLGI: Yes, my Lords.
LORD STRATHCLYDE: My Lords, I understood that the noble Lord informed the House of the increase which had been received by the beet grower in recent years: can he indicate the increase in the cost of feedingstuff over the same period?
LORD STRABOLGI: My Lords, that is a different question.
LORD DARLING OF HILLSBOROUGH: My Lords, is there any way in which the British Government can influence the French, who are rapidly expanding their beet acreage. The growth of sugar cane in the Pacific, the Indian Ocean and the Caribbean is absolutely essential to the wellbeing of our friends there and it is falling?
LORD STRABOLGI: My Lords, the question of Commonwealth sugar depends on the outcome of negotiations which have still to take place with the developing Commonwealth. Clearly, provided the price is right and the terms of the agreement are otherwise satisfactory, we can expect to receive a great deal of the 1·4 million tons for which the Community has pledged access.
LORD SHINWELL: My Lords, I am sorry to press my noble friend, but do I understand from his reply to the second part of my supplementary question that we are no longer masters in our own house in the United Kingdom in respect

1027
of the production of sugar beet and is that acceptable to farmers in the United Kingdom?
LORD STRABOLGI: My Lords, we are now members of the Community, under the arrangements made by the previous Conservative Government, and these matters are questions for renegotiation. My right honourable friend the Minister is negotiating at present and a Statement will be made as soon as possible.
LORD BLYTON: My Lords, does the noble Lord think that this is satisfactory, in view of the fact that before 1970 the deficiency in the balance of trade was £69 million and we are now running a deficit at nearly £3,000 million a year?
LORD SHEPHERD: My Lords, I believe that since, as my noble friend has said, the Minister of Agriculture is negotiating in Brussels to-day and he will be reporting to Parliament on sugar and beef, it may be that this is an area which we could leave until we have that Statement. We shall then have a clearer know-ledae of what has, in fact, been negotiated.

NHS: SOCIAL WORK REPORTS
3.0 p.m.
LORD REIGATE LORD REIGATE rose to call attention to the widespread concern as to the continued confidentiality of the reports prepared by hospital social workers and other medical workers in view of the new arrangements imposed under the National Health Service Reorganisation Act; and to move for Papers. The noble Lord said: My Lords, I beg leave to move the Motion standing in my name on the Order Paper. I think it is reasonable to say that there is to-day widespread concern about the invasion of privacy and the absence of confidentiality in many aspects of our modern life. The issue which I am raising is a narrow one affecting the National Health Service only, but none the less I think it is of importance for nowhere, surely, is there more danger to privacy and confidentiality than in the doctor-patient relationship. The noble Lord, Lord Wells-Pestell, will not be surprised at my raising this issue again, as I gave him notice I should do so when I asked a Question in June. But for those of your Lordships who are not familiar with the
1028
background to this issue, perhaps I might give a few details.
First of all, under the National Health Service reorganisation the social workers in hospitals, both medical and psychiatric, were transferred to the employment of the local authorities, although remaining at work in the hospitals. May I also explain that these social workers are the heirs of what used to be called almoners. I think, and others think with me, that that was a wrong decision, although I recognise it was taken after fairly considerable thought. But although I think it was wrong, I am not of course seeking in this Motion to reverse that policy or even to argue that it should be changed.
The duties of a social worker are manifold, but they are principally, first, to resettle the patient in the community; and, secondly—and this is the gravamen of what I am raising to-day—theirs is a role of great importance, which is to furnish a doctor with particulars of the social background of the patient whom he is treating. To carry out this latter role, the social worker needs to know a number of certain clinical details of the patient's ailments. To meet the doctor's requirement to know the social background of the patient a full file is built up of details of the family circumstances, as well as of correspondence with local authorities and other outside agencies. It is from this record that the quintessence is extracted for the doctor so that he can know the background of the patient whom he is treating.
There are thus two files. First, there are the clinical notes which include the social particulars, where relevant, which are of course filed with the medical report of the patient. The second file contains the social background and social history notes, including clinical particulars and the correspondence to which I have referred, which have always been filed in the social service department of the hospital concerned. It is with the fate of these latter records that I am concerned.
I must point out that until the reorganisation took place the clinician and social worker were part of a united team. Until then both kinds of files were the property—and I repeat "property"—of the hospital; that is to say, they were the property of the board of governors

1029
or of the hospital management committee, as the case might be. No one outside has any right of access, except that I believe that under very exceptional circumstances the Secretary of State has the right to call for those papers; but that right is only rarely exercised. Of course, the doctor and the social worker can, and do, divulge some particulars to others who may be concerned outside the hospital, but they do this only at their discretion, and at their risk as well.
On June 10, I asked a Parliamentary Question seeking an assurance that all these files would remain the property of the health authority and would not be divulged to local authorities without the patient's consent. I received a rather dusty Answer from the noble Lord, Lord Wells-Pestell, but I also had some support from noble Lords on both sides of the House. Perhaps I might summarise the replies that were received. We learned, in the words of the noble Lord, Lord Wells-Pestell, that,
"Medical case notes about a patient … remain the property of the hospital authority."
So far, so good. We also learned that,
"The custody of social work reports is under the control of the social worker concerned." [OFFICIAL REPORT, 10/6/74; col. 235.]
I ask your Lordships to note the change in the wording. We have "custody" and "control", not "property" and "authority".
If I may answer my own question in simpler terms—which the noble Lord rather jibbed at giving me—the files, including the clinical particulars to which I have referred, are the legal property of the local authority and the social worker can be directed to surrender a file to the local authority. If the noble Lord is in a position to contradict me on that, I shall be interested to hear what he says. But that is the advice which I have received and with which I would agree after reading the Acts concerned. I am sure the noble Lord, Lord Wells-Pestell, believes I am exaggerating the risks that are attendant upon this fact.
I may say that because I was dealing with this matter I thought it right to ask those who have advised me to give some idea of the kinds of particulars which might be involved. I have seen certain records—not actual records, and I have
1030
no idea of the source, the hospital or the area concerned; they might, for all I know, be totally fictitious and I do not want to burden the House with any lengthy case histories—and I would be willing to show the kinds of transcripts I have had to any noble Lord who might be sceptical about this issue. I would point out that each file is, or can become, a full social and medical history of a case, or even of a family as well.
In one particular case, of which I have a copy, the husband was a bad heart case; he had angina as well as a coronary. It so happened that the social worker's notes recorded the fact that his daughter aged 15 was pregnant and the mother was very anxious that the husband should not know about this because it was feared that it would affect his condition. The pregnancy was terminated and the girl's father did not know. Later the mother was admitted to the hospital and was a terminal case of cancer. These notes give the sad and sorry history of a family. One particular point that I would make is that no demand was made on any local authority services so that there would be no need at any stage for the local authority to have had the use of that file. If this is typical, I feel that it would not be right to divulge details to anyone outside the clinical team without the patient's consent.
The noble Lord, Lord Wells-Pestell, in replying to my question, seemed to assume that everyone concerned would always act in accordance with the highest professional and ethical standards. I hope he is right, but I think your Lordships will agree that there are always risks. On June 10 the noble Lord, Lord Douglass of Cleveland, in a supplementary question said to the noble Lord:
"If the noble Lord feels that no professional worker would divulge the information he possesses, what is wrong with making it legal that he should not?"
To which the noble Lord, Lord Wells-Pestell, replied:
"It would be a pity if we tried to deal with this matter by some form of legality."— [OFFICIAL REPORT, 10/6/74, col. 237.]
To me, my Lords, to say that is to miss the whole point of this discussion and to minimise the risks that there are in this matter. When he comes to reply, it may be that the noble Lord, Lord Wells-Pestell, will quote the Report of the Working Party on Social Work Support

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for the Health Service published in June and since I last raised this matter. It is a good, thorough, painstaking Report on this subject within its limited remit. It is obviously based almost entirely on experience gained mostly before reorganisation. It does not challenge the changes that were made in the Act but neither does it give an impression of enthusiasm.
I should like to refer in particular to paragraph 18 of that Report from which I will quote selectively but not, I hope, unfairly. That paragraph begins:
"An important point in this connection is confidentiality".
It then goes on:
"It is a professional issue with implications going well beyond our terms of reference."
The paragraph continues:
"The information on a social worker's file can be quite as sensitive as that in medical and nursing records."
It also states:
"…at no point in our discussions has it been suggested to us that confidentiality presents any real difficulty in working relationships between doctors and social workers provided there is personal confidence between the professionals concerned."
I think that that must be seen to relate to the days when the social worker and the doctor were part of one clinical team responsible to each other and to the hospital for which they were working, and not a social worker under the employment of an outside authority. I cannot help but feel that the paragraph in the Working Party's report fully justifies this matter being raised to-day because I think it is clear that I am not alone in my misgivings.
I want to return to this matter of legality and to say why the situation in law needs clarifying. Here I must digress for a moment to remind your Lordships that, apart from other matters, we invented, or rather adopted, the Ombudsman. When this suggestion first came forward I must say that I was not an enthusiast for the proposal, being at that time a Member of another place. I now consider the innovation thoroughly justified, being probably biased by the fact that while a Member of another place I succeeded in getting two cases considered by the Ombudsman who in both cases came down on my side. Now, my Lords, we have the Parliamentary Commis-
1032
sioner, the National Health Service Commissioner whose remit does not extend to clinical matters, and, lastly, we have the Local Government Commissioner.
I want to quote from a letter, but before doing so I will recapitulate three points from what I have said: first, the importance of mutual confidence between patient and staff; secondly, the fact that the social workers' notes contain intimate and clinical details; and, thirdly, once again to remind your Lordships that the medical social worker is now employed by the local authority although a member of a clinical team. The letter I wish to quote is from the Director of Social Services of an important local authority and is addressed to all staff including National Health social worker staff. I am told that similar letters are being sent out from other local authorities. The letter reads:
"All staff who are concerned in any way with the use of files, either on individual cases or general policy matters, must be made aware that a Local Government ' Ombudsman ' can call for any file and that anything recorded thereon is not privileged and cannot be withheld. It is, therefore, essential that although reports and notes on files should correctly reflect the facts and opinions of the officer making the report, they should be phrased in a manner which will not be embarrassing in the event of their being disclosed to outside parties or possibly to the person involved in the case in question."
So what, my Lords, becomes of, to quote the Working Party's report:
"the right of the individual to confidential communication with any professional person with whom they are in contact"?
It must mean that the social worker's notes, including clinical particulars, are available to outside parties and possibly to the person involved.
If the instructions in that letter are carried out to the full, it must mean that the social worker's notes will have to be purged of all clinical and personally embarrassing particulars and thereby rendered valueless. That letter could not have been sent out before April 1, because the Local Government Commissioner would not have had any locus standi in the matter. The transfer of medical social workers to local government employment means, as this letter proves, that local authorities now have a legal right of access to information acquired by its employees in the course of clinical duties under the National

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Health Service. This must be wrong. That, my Lords, is the case I put forward, and I beg to move for Papers.
3.20 p.m.
BARONESS ROBSON OF KIDDINGTON: My Lords, may I thank the noble Lord, Lord Reigate, for raising this issue, because this is, as we know, one which has concerned and disturbed the medical profession of this country ever since the reorganisation of the National Health Service. We have in this country been proud of the agreed code of confidentiality practised by the medical profession and medical social workers within our hospitals, but as yet there is no similar code agreed by social workers working within the community. Therefore, I believe it has been almost impossible to reach an agreement between the two on how to deal with the questions that are now raised by the noble Lord.
I am aware that there have been meetings between the British Medical Association and the British Association of Social Workers, covering a wide range of subjects within the relationship of the two professions and I understand that there is a draft report in front of the BMA. But until the social workers and the British Association of Social Workers can agree among themselves about a code, very little progress can be made between the two professions. On the other hand, like, I am sure, your Lordships, I cannot believe that people engaged in the social services within local authorities are less likely than members of the medical profession to observe the confidentiality of their clients and patients. The majority of them, I am absolutely sure, would abide by exactly the same principles.
The danger in the present situation additional to the ones that the noble Lord brought forward is the enormous turnover of social workers within local authorities, which means that a social worker calling on a family may be followed in the next week by a different one. This increases the danger of passing on the information. The noble Lord referred to the personal confidence that existed in the past between social workers and the medical profession working within a hospital. This is tremendously im-
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portant and is something which one hopes could be preserved.
I want to raise a point relevant to this discussion, because I believe that what is happening at the moment is militating against this confidence, and I refer to the method of appointment of social workers under the new reorganisation. The workers are appointed by the local authority, and it is possible for the area health authority or the hospital in question to be represented as an observer on the committee appointing a social worker to a particular hospital. But the medical profession and area health authority have absolutely no rights. They are there only as observers and an appointment can be made by a local authority without the agreement of the hospital. It is within my knowledge that some social workers have arrived at a hospital without previously having been seen by the medical profession. They have been appointed and have arrived to do their first day's work. That does not help in building up confidence between the people who are working, one hopes, for the patient in a hospital.
It is a completely different principle that is followed when an area health authority appoints people to work with a local authority. When an area health authority appoints specialists in community medicine to advise the social services department of a local authority, when it appoints child health specialists, when it appoints district community physicians, the local authority is represented on the appropriate committees with full powers, and no appointment would be made which was not acceptable to the local authority. So I would plead that we should have an alteration so that no social worker was appointed without the agreement of the hospital or the area health authority.
3.25 p.m.
BARONESS SUMMERSKILL: My Lords, I have always entertained the greatest respect for the noble Lord, Lord Reigate, because he and I have met on occasions when matters of public health have been discussed. I have always recognised that he has taken a sincere interest in these matters. We have not always agreed, and to-day I have listened to him very carefully and I must confess that I do not think he has proved his case. From

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what the noble Baroness has just said, one might almost think that this debate to-day is about the professional standing of the social worker in the hospital. Indeed, I have read some material on this question which indicates that there is some ill-feeling, which is absolute news to me, between doctors and social workers. But I understand that what we are discussing to-day is simply the question of confidentiality, and I want to relate what I have to say to this aspect.
I think that the noble Lord's anxiety is misplaced. I believe he has overemphasised something which must have occurred to many people over the years, something which occurs to doctors and everybody in the medical profession; that is, whether any confidence of the patient will be revealed to anybody who may make use of it, which is not in the interests of the patient. If there is this widespread concern, as the noble Lord, Lord Reigate, states in his Motion, why is it not to be found in, for instance, the British Medical Journal over the past few months and years? Since this debate was put down I have checked through my copies of the British Medical Journal, which I take every week and try to read thoroughly, and to my amazement I find that this matter has not even been mentioned by the doctors. I cannot find any complaint in the British Medical Journal which leads me to believe that this matter is causing great concern to doctors or patients.
The media are always feverishly searching for grievances so that these can be ventilated on the radio or television. Has anybody in this House heard of this question being discussed on the media? That is the kind of subject which they would jump at. The commentators would like to have a little heated discussion between doctors, social workers and patients in order to ventilate this matter. But it seems to be unknown to the media. On further inquiry, I found that an article had been written by a Liverpool general practitioner and a social worker. They sent it simultaneously to the journal of the Royal College of General Practitioners and to the journal called Social Work Today. The final paragraph of this very long article dealt with confidentiality and the desirability of exercising vigilance regard-
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ing a client's affairs. That is the only material on this subject that I can find. Therefore, I think that the noble Lord should be reassured; I feel that he is distressing himself unnecessarily. He should be particularly reassured when he knows that, as a result of this matter being raised in this House—and, sometimes, civil servants may have discussed it in certain places—the British Medical Association, the Royal College of General Practitioners and the Health Visitors Association are to discuss the greater use of shared information, which could no doubt include confidentiality.
I want to introduce an analogous case, because it is concerned with confidentiality. Since the inception of the National Health Service, it has been compulsory for patients' reports to be filed by doctors and, consequently, sent to the right authority. If one bears in mind that a single doctor might be responsible for 2,500 patients, it is inevitable that he seeks help with clerical work. Many of your Lordships know that I am a doctor. I was brought up in the household of a doctor, I have about eight near relations who are doctors, and I therefore know this world. When the hard-pressed doctor seeks help he finds, as everybody knows, that it is difficult to get first-rate secretaries—in the old days (as we call them) a doctor could not afford one, anyway—so he will seek a clerical worker. Often he knows an excellent patient who lives in the neighbourhood and who knows the neighbours well, and he asks her to undertake the writing up of his reports. This is the "norm".
I have never heard a patient objecting to this practice. I have never heard one of the former executive committees which controlled the general practitioner objecting to his finding clerical help of this kind; finding somebody who would examine all these reports and who would know precisely what the family next door was suffering from. Also, I have never seen the medical journals condemn the practice. This is the first time I have ever attended a debate in which such strong exception has been taken to anybody other than a medically qualified person, or a para-medically qualified person, seeing these reports.
We must not suffer under the illusion that people with a medical qualification have a monopoly of integrity. I have

1037
heard many doctors reveal confidences, at dinners and so on, which they should never have revealed. But there are people lacking in integrity in many other fields. The fact that a doctor is a good physician or surgeon does not mean he is necessarily always a stable individual. When it comes to his own ego and his own little conceits, he often loves to tell people of the eminent personalities whom he has treated. So I say again that a medical qualification does not mean that the individual possessing it is an individual of the highest integrity.
The average housewife can be relied upon to exercise her discretion concerning a sick neighbour. If the average housewife knows that revealing something about a sick neighbour will not help her, she will certainly respect the confidence. As to this question of confidentiality, when a patient is confined to bed in a house in a crowded road—and, after all, we are talking about all people now, I hope, not only those who live in very select neighbourhoods—and is regularly visited by a doctor and a social worker, her condition cannot be kept secret from the neighbours. I have never had a patient say to me: "I cannot go to that hospital and be in a ward of 20 or 30 beds, because my neighbours will be there and they will know what I am suffering from."
Confidentiality is something which must be seen in proper perspective. I believe the risks which the noble Lord fears are negligible. After all, the one case he quoted—I listened for specific cases—was of a man suffering from some disease, his wife suffering from a malignant condition, and a daughter of 15 who was pregnant and operated on. In the end, the noble Lord had to say that nobody heard about it. The girl was operated on and her condition was not revealed. That was the only case he quoted. The noble Lord must forgive me for saying this, but I know the world of which we are speaking a little better than he does, and I feel that if we are to conduct our social services in an efficient manner in this computerised age, we must exercise common sense.
3.35 p.m.
LORD HUNT OF FAWLEY: My Lords, as a general practitioner this problem of confidentiality affects my patients to a great extent and it also affects me;
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just as it does many other doctors and their helpers in what has been so aptly called "the greater medical profession" which includes medical social works of all kinds. In the short debate on this subject at Question Time on June 10, in this House, the term "professional ethics" was mentioned more than once. It is an important component of what we are discussing this afternoon, and I have been invited to draw your Lordships' attention to some general points about medical ethics which concern us all now. Some translations of the Hippocratic Oath, which is older than the Christian faith, speak about "sacred secrets" between doctor and patient. That Oath has served us well for more than 20 centuries. If someone's son picks up venereal disease, his unmarried daughter has an abortion at the age of 16, or his wife has an attack of depression and attempts suicide, neither the patient nor the doctor, nor the patient's family, wants others to know. Secrets between doctor and patient have in the past been kept; and these have included not only what the patient has told his doctor but what the doctor has found out about his patient. And when a doctor has died, he has often left instructions in his will that all his personal notes should be destroyed immediately. A consultant friend of mine did this only last month.
For a general practitioner, it is still possible to keep the secrets of many patients; but only up to a point. Sometimes, the community also now has to be taken into account. Two examples which concerned me not so very long ago illustrate this: an express-train driver seemed to his family at home to be going off his head—in the end it turned out to be from a slowly-growing cerebral tumour—although he remained perfectly efficient for a considerable time at the routine job of driving his train; and a retired Merchant Navy captain, who for many years has sailed up and down the coast of India, who began later to develop leprosy while living in London. In both cases someone else had to be told, for the safety of others, just as so many other illnesses which may possibly have an adverse effect on the community have to be declared, whether the patient has given his permission for this or not. When I qualified as a doctor I had to swear the Hippocratic Oath, or the greater part of it. Few young doctors

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are asked to do this now. Had my two medical sons been invited to do so, they say they would have refused because they knew that they could not honour it. As an example of how unrealistic the Hippocratic Oath is at present, one of its sentences reads:
"I will not use the knife, not even on sufferers from stone".
Taken literally that would exclude all surgeons and many general practitioners who do minor surgery.
My Lords, in modern general practice, especially since the introduction of our National Health Service and its reorganisation, with its health centres and large group practices, with so many ancillary services and with the great development of social medicine, this problem is even more important and difficult. Practices vary greatly. In some of them patients see several of the doctors in the group from time to time; their notes and reports are useful to all the partners and also sometimes to others in the team—health visitors, nurses and district nurses, midwives and social workers of all kinds. Many general-practice teams have been growing steadily in size during the past 20 years. "My patient" has become "Our patient", and many members of these clinical teams have acccess, at times, to the medical notes. Some practices insist that all who work in the team sign an undertaking to respect confidential information.
By tradition, necessary medical details which are of importance to a patient's health or wellbeing have sometimes been passed on verbally or in writing from one doctor to another who is in a professional relationship with that patient, with or without the consent, implied or expressed, of that patient or his nearest relative. Sometimes a doctor may have to share his knowledge with a member of another profession—a dentist, chiropodist, physiotherapist, a clergyman or lawyer-—all of whom should agree to be bound by the same ethical rules about confidentiality as those which govern the doctor himself.
When a patient enters hospital still more people are involved—consultants, registrars, house officers, more nurses and secretaries, laboratory and X-ray technicians and highly-skilled and well-educated hospital social workers (who used to be called almoners), psychiatric
1040
social workers and others, including, in some hospitals, medical students. They may all see patients' records, or part of them. The main details of a patient's medical record are sometimes put into a computer where, in some respects, confidentiality can be preserved better than in files.
When a patient leaves hospital, a summary of his medical notes is sent to his general practitioner who may find himself, at times, in a good position to coordinate the work of hospital, psychiatric and local authority social workers, perhaps employing the good offices of a community physician, some of whom were called, until recently, Medical Officers of Health.
The rules about confidentiality for hospital personnel are not always carefully kept. Doctors and even lawyers are sometimes at fault. Page 20 of this year's Annual Report of the Medical Defence Union describes how a young woman driving-instructress was teaching a learner-driver when they were hit by a bus from behind. She had been injured and had been treated in eight different hospitals. She was suing the transport company, and the solicitor acting for that company had written to all these hospitals asking them to send him a copy of the patient's records for his perusal. One consultant offered to submit a medical report, another said he would do so for an appropriate fee, and a surgeon at a third hospital did send the solicitor a summary of the patient's notes—all three of them without the patient's permission. The proper procedure, I understand, would have been first to obtain the patient's consent, and then for the medical details to be submitted to medical advisers nominated by her own solicitors.
When a patient moves his home to a new locality a further complete set of medical and para-medical personnel are involved, both in general practice and in hospital. If he happens to move often, his medical notes and reports follow him round each time. How can proper confidentiality be maintained under these conditions? Even if the patient dies, his notes are kept for three years or more before being destroyed; and someone has access to them.
A friend said to me the other day "I loath; the idea of my personal medical notes floating round a health centre or

1041
hospital". They do lie around sometimes, and by no means all the cabinets in which they are filed are kept locked. One must be able to trust those with whom one works closely, after impressing on them the importance of strict confidentiality. Even in banks many more people know the state of one's credit balance or overdraft than some of us guess. In a bank any unethical disclosure of information should be the manager's responsibility: he would ultimately be to blame. So with modern medicine; it is the doctors who should be responsible. They have had certain ethical standards for centuries. Under modern conditions, some of these are now inadequate, in spite of the World Medical Association's Declaration of Geneva and, with more practical details, its International Code of Ethics. These are helped in day-to-day practice by the excellent work of the General Medical Council, the Ethical Committee of the British Medical Association, the Royal Colleges, the Medical Defence Union, the Medical Protection Society, and by the recent discussions which have taken place about a possible Code of Ethics for Social Workers between the British Medical Association and the British Association of Social Workers which was founded in 1970.
What is wanted now, I believe, is a review and revision of our own professional ethical code, made necessary by the greatly widened field of modern medical and social care and treatment, and by the special problems for everyone which have arisen from the modern way of life and for parents and their children from the lowering of the age of consent. A general practitioner has, as it were, a foot in both camps—hospitals and social services. The great need now is to close the gap between our medical and social workers, and somehow to introduce the latter properly into group practices for the prevention, early diagnosis and early treatment of social problems which are often so important. This needs continuity of interest between family doctors and the social-worker teams, and increased efficiency without too much duplication of effort. The official attachment of social workers of all kinds to group practices or health centres is helpful, although not essential. Some social workers seem
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rather remote at the moment; but Chapter 21 of the Seebohm Report says some very sensible things about the ways in which they can be involved in primary medical care.
The ideal is for family doctors to work in teams with social workers whom they know well, in whom they have confidence, and with whom they can safely share their notes. If a doctor has to work with a series of social workers whom he does not know well, one after the other, he is much less likely to want to share with them his notes and his confidential information about patients. On the other hand, information in a social worker's file may be unknown to the doctor and is often quite as confidential as that in a doctor's or nurse's records. I am told that what makes many people unhappy at present is the possibility of copies of the social worker's notes being sent to the local Social Services Department where they may be seen by other people, including the police who may even take action on the information given to them. In a particular case it may be argued that this is in the best interests of society as a whole: but if it happens often it will not be long before patients will be afraid to tell their doctors or social workers about their personal problems.
This question of maintaining adequate medical confidentiality is one of the greatest difficulties we have to face and try to overcome in our conception of modern scientific and community medicine. It is likely, I think, that we shall have to accept as inevitable a widespread sharing of personal medical information, as the price we must pay for efficient community services. But some patients and doctors will never be altogether happy about this. If a judge, in court, orders a doctor or social worker to disclose information which would break a patient's confidence, and he or she refuses, that doctor or social worker is liable to be committed to prison for contempt of court.
It is a pity, I think, and sometimes unnecessary, for patients' indiscretions to be recorded in their medical notes, for so many eyes to see, for the rest of their lives. If confidentiality cannot be considerably tightened up, it would be reasonable, I believe, for some method to be devised for erasing details which patients do not want to appear on their

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permanent records. The recently passed Rehabilitation of Offenders Act affords convicts protection against disclosure of their criminal records. Surely patients should have similar protection against disclosure of shameful details relating to their past medical histories. On the other hand it has been pointed out that, sometimes, these details may be helpful later in deciding on a patient's proper care or treatment; for instance, with a young man going up to university, a previous attempt at suicide should be made known, with his permission, to his college doctor. Details of a patient's past medical story may be useful, occasionally, for medical or social research. His name would come to light during the course of the work, but it need not be published. These details may sometimes be important too, for historical reasons; but how soon after the patient's death they should be revealed is a matter for debate. One famous consulting physician suggested to me just before he died that his notes might perhaps be put into a museum, so that future generations could see what kind of medicine we practised in the middle of the 20th century. The Royal College of Physicians has them now.
However. I myself believe that a patient's wishes and feelings should in many cases be paramount; and that after a lapse of time, if he is concerned about confidentiality, he should be allowed to ask for the removal from his records of any details of which he is worried or ashamed, and to which he does not want others to have access indefinitely. If this proves impossible it is likely that many patients will refuse to disclose important personal information, particularly when they live in small communities where most people know everyone else. Often, at the patient's request even now, the doctor or social worker, or whoever it is who talks to the patient, does not put down in his notes full details of personal matters which have been discussed. This ensures what the noble Lord, Lord George-Brown, put so concisely on June 10—the "protection of a patient's personal privacy". The interviewer may even keep a secret file of his own which he seals up. Some psychiatrists make their notes in two parts; one solely for their own personal use, while the other, filleted, version can be seen by any who wish to do so.
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No one is perfect. It is very rare to find a completely stable person with no undue worries, who has never done anything of which he is ashamed, and who has no neurotic traits of any kind. Shakespeare wrote in Measure for Measure, Act v, scene 1:
"They say best men are moulded out of faults, and, for the most, become much more the better for being a little bad".
Confucius said
"Our greatest glory is not in never failing but in rising every time we fall".
Many of us have private worries which are as often physical as psychological. Only one person can be in really very close personal, almost confessional, touch with a patient at any one time, to help him gain insight into a difficult situation. Once a patient unburdens himself to a confidant, which in itself often requires a considerable amount of moral courage, he does not want to repeat the story all over again to someone else, or for it all to be put down on his records for others to read for years to come.
A person in trouble wants to find an unshockable and unshakeable ally in his doctor, his social worker, a friend or in his padre; someone who will not moralise or judge him, in whose counsel and sympathy he firmly believes, who will back him to the utmost, and not divulge a single word to anyone else without his i knowledge and consent. That is the kind of personal help, my Lords, which so many people want and which they have had in the past. Our problem now is how best to combine this with the splendid community services which have been so greatly developed in this country during the past 30 years, and how we can bring our ethical code up to date so as to include everyone who works in our greater medical profession.
3.55 p.m.
LORD PLATT: My Lords, I should like to start by thanking the noble Lord, Lord Reigate, for introducing this question of confidentiality which, despite what some speakers had to say, is, I think, an extremely serious issue. It is, of course, serious, as we know, and as the noble Lord, Lord Hunt of Fawley, was saying in one way and another, because once it begins to be doubted then you have lost a patient's confidence and he will no longer come to you, whether you are the doctor or the social worker, to give

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you all the knowledge of his case which you ought to have. I often think that the confidences told and exposed to the social worker are more sensitive than the ones exposed to the doctor. It is not usually a matter of great social implication that somebody has gone into hospital temporarily for a heart attack, or something like that, but it has very much greater implication if a woman says to the social worker that the children are not being properly fed because her husband comes home drunk every night. That is the kind of information which a social worker is more likely to have than a doctor.
I was not quite sure that I understood all the implications of the speech made by the noble Baroness, Lady Summerskill, who seems to wish to assure us—and I think with reason—that breaches of confidence are rare. Nevertheless, she seems to have complete faith in the neighbours as to not giving away confidences (faith which I would myself doubt), but little faith in the doctors, especially at dinner parties. But whatever the message was I think the essential point is that there is all the difference in the world between records which are confidential and known to be confidential—which are in the care of one, or possibly more than one, person who knows that they are confidential and who normally will not reveal them unless there is a very good reason for doing so—and the situation where somebody has a right to inspect a record. That is the new situation.
I thought that the extract which the noble Lord, Lord Reigate, read to us was really absolutely shocking and I feel sure that this House ought to try to ensure that that kind of situation does not occur, and if this means a "National Health Service Reorganisation Reorganisation Act", well, my Lords, let us have it and put these things right. I do not want to speak for very long because there are other speakers and I must make an apology that I have at 4 o'clock a Committee of this House which I really ought to attend. So, with your permission, I will not stay till the end. I will just give an example from my own experience. Our records at the Manchester Royal Infirmary and other hospitals at which I have worked for a long time were never revealed with-
1046
out the permission of a patient. If the records officer received a letter asking whether somebody could have a copy or a sight of records of such and such a person, and it was a patient who had been in my unit, the records officer would ask me about it but would first inquire whether the patient's permission had been given. The patient's permission had to be given in writing, otherwise we would never reveal any of our records.
One day I received a letter from a Medical Officer of Health of a local authority near to Manchester, stating that a certain person had applied for a job with the local authority; he understood that he had been a patient of mine and would I, as one doctor to another, kindly tell him for what reason the patient had been in hospital and whether this would in any way affect the patient as being suitable or unsuitable for work as a gardener in the public parks. I wrote back, greatly, I am sure, to this man's surprise, to say, "If you were a doctor who was to take over the treatment of this man who had now moved to another district, and I had his permission to reveal his case notes to you, I would be only too glad to do so, but you are clearly acting for an employer. In that sense you are not a doctor at all." I made this quite clear in my letter. I received a letter from this man to say, "I need not trouble you, because your surgical colleague has revealed it all to me". I do not know what lesson one learns from that, but one can learn, at least, that such situations occur because many doctors are not really careful enough about revealing details in case notes. I hope that we will go on pressing; I think probably the noble Lord, Lord Reigate, will.
LORD ABERDARE: My Lords, before the noble Lord sits down, may I ask him whether he would reconsider his decision and perhaps try to remain in the Chamber to the end of the debate. We should try to encourage people who have spoken in the debates to listen to the reply of the Government. I suggest that the proceedings of the House are more important than a Committee of the House, of which I am also a Member.
LORD PLATT: My Lords, I am very pleased to take that advice.
4.2 p.m.
LORD AMULREE: My Lords, I also am very grateful indeed to the noble Lord, Lord Reigate, for raising this important subject. I wonder whether the time has not come when we should take a new look at the decision arrived at some time ago to remove from the National Health Service the statutory responsibility for the social and the psycho-social care of sick people. Before the establishment of the Social Service Department and the reorganisation of the Health Service, medical social workers and psychiatric social workers were members of what one might call the clinical team looking after the patient in hospital and there was really no question at all of any breach of confidentiality occurring. Now, that situation has rather changed, partly because of the extraordinary situation that social workers in the National Health Service are not paid as much as those working for the local authority. But that is a minor point.
I think we are all agreed that for the needs of the patient to be fully understood, it is clearly right that the medical and social information about him shall be shared so far as is necessary between those who are sharing the task of caring for him. I do not think anyone would have any objection to that. But one wonders whether it is right and proper that medical information about patients should be equally available when their needs can be no concern of the local authority.
The noble Lord, Lord Reigate, referred to the report of the Working Party of the Department of Health and Social Security, Social Work Support for the Health Service. This Report makes this rather curious remark in paragraph 31, which says:
"This responsibility of the social workers in the clinical team is not incompatible with accountability in other respects of the local authority social service department".
That raises the question in quite a big way of who owns the record of social workers in the Health Service. I am referring to the social record, and not to the social report which can be attached to the medical case notes. It is very important to get the answer to the question: who owns the records held by the social work department? Where they
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deal with medical people, is the owner the local authority? This leads to another question: who should decide which social workers, apart from those working in a clinical setting, will have access to cards and files containing medical information about patients? Most hospital social workers deal with medical rehabilitation, convalescence, terminal care, aftercare, and quite a number of things which are very important to the patient. These matters do not need to be referred to the local authority social care committee. But the question is: does the Area Hospital Authority or the local authority hold overall responsibility for the social worker's role in this respect?
I have been talking in a rather melancholy and foreboding way, but I got a little encouragement when I made some inquiries from the hospital where I used to work about their connection with the Social Service Department. They told me that when the Social Service Department first came in, there was very grave anxiety about the confidentiality of material that might be available. There was a series of meetings with the local authority. It would seem that some of that anxiety has been lessened now because the Social Service Department have assured the hospital that they fully appreciate the need to safeguard the privacy of their clients. I may say in passing that this local authority is the London Borough of Camden, which is well known for the good work it does. This borough has always worked on extremely good terms with the hospital to which I referred. But I still think anxiety is there. I was very pleased when the noble Baroness, Lady Summerskill (I think it was) said that there are talks going on between the BMA and the British Association of Social Workers. In the long run, that can do nothing but good.
It is said that one should get the permission of the patient before passing on information. That again is a very good thing to do if it is possible, but unfortunately it is not always practical, for a variety of reasons with which I will not bother your Lordships at this late hour. What I can say is that if one has a good relationship between the medical profession and the Health Service, and if there is a reasonable amount of respect for the others, it may be possible to find

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some way of avoiding the enormous difficulties one can see in the question of confidentiality.
A medical social worker wrote to me about this debate, and I will conclude by repeating what she said. She hoped that we would be able to confine the debate to the dilemma resulting from inappropriate structure following statutory provision, and not drift into recrimination about poor liaison, co-operation and communication. If we can avoid that we might get somewhere, and that is what I trust we shall do in this short debate which has been initiated by the noble Lord, Lord Reigate.
4.11 p.m.
LORD HAYTER: My Lords, I advance like Daniel into the lion's den following, as I do, no less than four doctors. But I am encouraged by the noble Lord, Lord Hunt of Fawley, to emphasise that I am one of the most important people here because I happen to be a patient from time to time, and that is what we are really talking about. My starting point is about two years ago when the King's Fund mounted a conference about the reorganisation of the National Health Service, and the duty that would lie on the doctors and social workers to co-operate. To my astonishment and dismay, when the conference was opened for debate, one doctor after another got up and said that nothing would induce him—I say "him", not "her"—to give to a social worker the information that he had about his patients. I think it was perhaps understandable at the time. I hope that this concept is now changing in the integrated Service.
If we can consider it from the administrative point of view, the old-time almoner—and what a delightful word "almoner" is—has now become the social worker, who often has a degree in social science and probably has a diploma in social case work. In this change of status he or she, the social worker, is still accountable to the Director of Social Services of the local authority, but—and this is the point which I should like to emphasise—is not really accountable to any national body. I feel that there should be set up a general medical social workers council to match up with the General Medical Council and the General Nursing Council. Then each of these three bodies
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could work hard to correlate this question of ethical standards. One imagines that the social workers would appreciate such a council, particularly the psychiatric social worker who is often in a most difficult position. If such a council was established by Statute it would have to work out for itself the registrable qualifications for the social workers and be responsible for its ethical standards. One imagines that such a council would go a long way to meet the doctors' fears, if fears there be to-day, that there may be problems on this question of confidentiality.
It has been said that, "Change is the process by which the future invades our lives". The integrated Health Service is not only a change, but reflects a general awareness of social responsibility. I am amazed at the contrast that there is in the Hippocratic oath and the Soviet doctors' oath. Let me try to illustrate the problem by an incident in the Midlands some 10 years ago. There, near a psychiatric hospital, a young lady was murdered in most distressing circumstances. It was quite clear that none of the patients in the hospital could have been concerned. But the police came to that hospital and, having first established this point, they then asked for permission to interview previous patients, patients discharged from that psychiatric hospital who might have been living in the neighbourhood.
I do not know what Members of your Lordships' House might have done; I think the right answer was given, and they gave this information. I may say that the results were unfortunate in some ways, because police cars were going to houses of men and women who were thought by their neighbours to be both medically and mentally healthy, in order to carry out these investigations. That is the point to which several of your Lordships have referred; this question of confidentiality about the individual and the responsibility that there is to the public at large.
There seem to be some variations in the translations of the Hippocratic oath, but one paragraph reads:
"Whatever in connection with my professional practice, or not in connection with it, I see or hear in the life of men which ought not to be spoken of abroad, I will not divulge as reckoning that all such should be kept secret."

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I hope I will not be accused of being a communist, although your Lordships can accuse me, if you like, of trailing my coat. But what a contrast there is between that, to my mind, outmoded oath and the oath taken by the 30,000 doctors who graduated in 1971 in the Soviet medical schools.
I will read only two paragraphs. The first is:
"To devote all my knowledge and strength to the protection and improvement of the health of man, to the treatment and prevention of disease, and to work conscientiously wherever the interests of society require it."
Then, although there is a reference to medical secrecy, it ends:
"To cherish and develop the noble traditions of domestic medicine, to be guided in all my actions by the principles of communist morality, to remember always the noble mission of the Soviet doctor and his responsibility to the people and the Soviet State."
One can argue whether that is an oath that in British terms British doctors would be prepared to take. But it certainly reflects a change in emphasis on this question of confidentiality.
I do not know whether I should apologise to the noble Lord, Lord Reigate. He initiated this debate, which has given us the opportunity of having quite a wide-ranging discussion on confidentiality as a whole. My two points are, first, that we might consider setting up this council, with all that that implies, specifying the duties and responsibilities of medical social workers and making them akin to that of doctors and nurses. Secondly, in our new integrated Health Service, we should ensure that there is a more general awareness among all the senior personnel of the hospitals and in the social services of the obligations that we owe as a team both to the individuals and also to society.
LORD REIGATE: My Lords, before the noble Lord sits down, I wonder whether he could amplify one point on this very interesting suggestion about a council for social workers. Is that only for medical social workers or for social workers generally, and if the former will it cover medical social workers not only in the hospitals but in general practice as well?
LORD HAYTER: My Lords, my thoughts were for medical social workers only, and I agree that it would be all-embracing within that context.
4.17 p.m.
THE COUNTESS OF LOUDOUN: My Lords, I quote:
"Whatever I see or hear, professionally or privately, which ought not to be divulged, I will keep secret and tell no one."
This as your Lordships have already heard, is an extract from the Hippocratic Oath. Confidentiality is a subject which has been given much attention over the last two or three years by the British Association of Social Workers, among others. Just as much confidential material comes to a social worker, whether based in a hospital or in the local authority, as i information, which is equally confidential, which comes to a doctor or other staff in a social services department. It is true that the question of confidentiality in the early stages of the reorganisation of the National Health Service, and particularly the much debated question of the transfer of social workers from the Health Service to local authorities, was the topic on which many frustrations and anxieties were both legitimately and illegitimately focused. But this concern now seems to have become more of a professional interest in seeing that information is used appropriately, and that the principles of when and when not to share information should be clearly understood by all concerned.
The chief means by which a social worker's service becomes available is through the relationship established between the worker in an agency and the client. Within this relationship the client gives, and is enabled to give, information about himself and his family which is of a highly personal and emotionally charged nature. It is a basic principle of social work that such information must remain confidential and that the social worker has a duty to safeguard the confidentiality. The client must have the assurance that information which he has shared within a relationship of trust, as part of the process of receiving help from the agency, will not be disclosed unless he agrees to the disclosure. If this confidence is betrayed, the relationship between the client and the social worker may be damaged and the service which the agency offers thus destroyed.
The client's right to confidentiality is, therefore, of the highest importance. It cannot, however, always be seen as an absolute right. There are times when the

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rights of the individual client are in conflict with another individual or with the rights and concerns of the community as a whole. On these occasions, the social worker has a duty to establish the justification for the right of the client to confidentiality being superseded by another and greater right. Written material, too, is susceptible to misuse and can lead to a breach of confidence.
It is, therefore, essential that agencies should define their reasons for making social work records and should establish an appropriate policy for safeguarding confidentiality for their clients. Issues such as access to records and communication with administrative departments should be regularly reviewed. However, the establishment of study and research on the subject of confidentiality within the field of social work should not be pursued in isolation, but should be related to developments in the older professions in order that a comprehensive code of practice may be established to the benefit of all concerned.
My Lords, I should have been at a Select Committee of this House at four o'clock but, as the noble Lord, Lord Aberdare, has pointed out that the proceedings here take precedence over a Committee, I shall wait for the winding-up speech.
4.23 p.m.
LORD ABERDARE: My Lords, I am grateful that the noble Countess is to listen to the end of the debate. We shall very much value her presence, as we have valued her speech. I should like to congratulate my noble friend Lord Reigate on having put down this Motion for debate. It is a Motion of immense importance, and one very well suited to a mini-debate of this kind. I do not think that many of your Lordships who have spoken in the debate will have agreed with the noble Baroness, Lady Summerskill, that this is not an important subject. However, I am sure that she is, at any rate, not unused to being in a minority in her views, and she will not change them as a result of anything that I might say. Certainly the debate brought forth a number of extremely interesting speeches, and if I might single out just one it was that of my noble friend Lord Hunt of Fawley who gave us from his own highly practical experience as a doctor some of the very real prob-
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lems of confidentiality which arise for a doctor.
There was one other point, made by the noble Baroness, Lady Robson of Kidding-ton, with which I found myself in considerable agreement. If the National Health Service, on its appointment boards by which a person is appointed to take part in local authority activities, has a local authority representative with a voice, on the reverse side of the coin, when a local authority is making an appointment for a person who is to work within the National Health Service, it should be right for the National Health Service to have a representative on that appointment board.
The Motion in my noble friend's name is narrowly drawn, and refers to that aspect of confidentiality which has been affected by the National Health Service Reorganisation Act and the unification of the social work profession. But this is really only one aspect of a problem that has arisen as a result of the increasing role of the community social services in the division of general health care. We have all been aware over recent years of the increasing importance which has been given to the need for preventive community services, and for minimum stay in hospitals. Time and again in debates in this House people have said how important it is that we should use our expensive facilities—and the hospital bed is about the most expensive we have—as sparingly as possible, and that we should increase the provision of social support both to prevent patients having to enter hospital and to give them the support that they need so that they can leave hospital at the earliest possible moment. This is clearly not only of financial advantage but also of benefit to the person himself.
The practical effect of this has been to expand enormously the social work provision and the numbers of people in the social work profession. The Seebohm Report brought the Social Service Department into being, with its Director of Social Services, and with its Department made up of the so-called generic social worker, each ideally able to give support to a family or an individual in social need, whatever that need may be.
So far as the National Health Service is concerned this situation has had two principal effects. In the first place, it has resulted within the hospital in the merg

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ing of the medical social worker into the main body of the profession, and this is the point to which my noble friend Lord Reigate draws attention in this debate. Secondly, in the general practitioner services, it has resulted in the attachment of social workers—together with nurses, health visitors and midwives—to group practices, as was mentioned by my noble friend Lord Hunt of Fawley. It seems to me that these policies of greater involvement of the social worker in the medical field, in co-operation with the doctors and the nurses, is right in principle, but it raises the problem of confidentiality in respect of the patient's records, which we have been debating this afternoon.
The difficulty is quite obvious: if the doctor, or social worker, maintains complete confidentiality, then it may be that the others who are working in the team with him are less well able to help the family or the individual. If, on the other hand, the doctor, or the social worker, is too free in giving access to his records, then it may well be that matters which the patient considers confidential when he told the doctor may come to be known more widely, and this will be to the detriment of good patient doctor, or individual social worker relationships. It is clearly right that we should debate these questions, and that we should try to find some way of improving the present situation that has arisen as a result of the increase in the importance of the social work profession.
Your Lordships will remember that there was a report on privacy, by a committee under the chairmanship of Mr. Kenneth Younger which reported in July 1972, and this committee just touched on the matter of medical confidentiality in paragraph 381 of the report. It concluded that legislation would not help in this sphere. In general, I find myself in complete agreement with that conclusion. I concede to my noble friend Lord Reigate, who was supported by the noble Lord, Lord Amulree, the point that there may be legal questions such as the ownership of social work records within the National Health Service. That is a point which I hope the noble Lord, Lord Wells-Pestell, will be able to deal with; but in general, in trying to achieve future arrangements for ensuring confidentiality
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of records, I do not believe that this function is the role of legislation.
The Younger Committee thought that the answer lay basically in professional ethics, and that the medical profession should examine the problem and make its own code of practice for doctors. But since then the matter has gone rather wider. The general tenor emerging from this debate is that it is not only the medical profession which should apply its mind urgently to this matter, but also the social work profession—and the two of them together, ideally. I hope, therefore, that as a result of this interesting debate the Government will be able to try to move things along a little more quickly in this sphere, in trying to urge on the professions that it is up to them to try to establish a code of practice which will guide the future actions of the medical, nursing and social work professions. I am sure that this is a most important and urgent task. I hope that when he replies the noble Lord will be able to give us some encouragement to ensure that the initiatives of my noble friend will be helped along.
4.32 p.m.
LORD WELLS-PESTELL: My Lords, the debate this afternoon has a special significance for me, because I am a professionally qualified social worker who spent—I confess many years ago—some years in the London Probation Service, and who was subsequently a tutor and a lecturer on training courses for social workers, both professional and voluntary. So I have listened with great interest to all that has been said about the confidentiality of reports prepared by hospital workers, and of those to which they have access.
This is no new matter. It is something which has exercised the minds not only of professional social workers, but of voluntary social workers over many years. I do not take issue with any noble Lord or Lady who has spoken in the debate this afternoon. I recognise the anxiety expressed and if I take exception at all to anything that is said it is to the underlying—I put it no higher than that—implication that local authority social workers have a different standard of ethics. They have not. My noble friend Lady Summerskill raised the question of whether there is widespread concern. I

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do not know how widespread it is, but I do not think it is widespread in the sense that we tend to use the word in everyday speech, any more than I think that there is a concern about it other than an anxiety.
I do not want to try to answer every noble Lord who has spoken, but the noble Lord, Lord Aberdare, suggested that the hospital ought to be represented on the committee appointing social workers who are to work in hospitals. With great respect I do not think that this point will arise, for the present medical social workers who are employed in the hospital setting cannot be taken away from that setting unless they wish to leave it.
LORD ABERDARE: My Lords, it was the noble Baroness, Lady Robson of Kiddington, who put that suggestion forward. I would imagine that although it is perfectly true what the noble Lord said, that there must in future be such appointments, as the noble Baroness has practical experience as a chairman of a regional health authority I believe that she was speaking from her experience. I was supporting her view.
LORD WELLS-PESTELL: My Lords, I understand the situation. In the future there will not be such appointments: vacancies occurring in the hospital set-up will be replaced as they occur by the local authority from the existing local social workers. One would assume that they would take some care to see that the right type of people were appointed. I think it was the noble Lord, Lord Aberdare, who raised the question of the custody of medical records in the National Health Service. Perhaps I could say this—
LORD ABERDARE: It was the noble Lord, Lord Reigate.
LORD WELLS-PESTELL: I thought that the noble Lord, Lord Aberdare, also referred to it. But medical records in the National Health Service, whether kept by general practitioners or hospital doctors, are generally held to be the property of the Secretary of State. This point has been confirmed by the courts in Scotland, but it has not arisen in England, so there is no decision of the judiciary.
LORD REIGATE: My Lords, if the noble Lord, Lord Wells-Pestell, will allow me, this is the crux of my whole speech
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and the crux of the matter based on his reply to my Question on June 10. No-one is denying that the medical records are the property of the Secretary of State. What I am talking about is who owns the files that the social worker compiles? I am sure that the noble Lord, Lord Hunt of Fawley, and the noble Lord, Lord Platt, understand the difference. They, as understand it—and I am advised on this matter too—say that as this work is being executed by the social workers, who are now local government employees, such files are the property of the local authorities. That is the point that I wanted to underline.
LORD WELLS-PESTELL: My Lords, will the noble Lord allow me to return to this matter because I have spent some time on the subject—several hours in the light of the discussion we had earlier on—and I have, I hope, got certain things in some kind of order? As I explained when replying on June 10 to a Question by the noble Lord, Lord Reigate, although hospital social workers are now employed by local social service authorities, the custody of social work reports is under the control of the social worker concerned and the disclosure of their contents is a matter of professional ethics for the social worker in consultation, in appropriate cases, with other members of the clinical team.
The nature of social work requires that social workers must command the confidence of their clients. It is, therefore, essential to the social worker, as to the client, that information received in confidence should not be disclosed without the client's agreement. But there may well be occasions when someone returning to the community after a stay in hospital may need help and support from a social worker in the community care field, and for the proper continuing care of the patient the second social worker surely must be made aware of the special needs and problems which have been discovered in the hospital situation.
In these circumstances the hospital social worker—I would hope—would seek the patient's agreement in passing on these necessary details. Noble Lords may be fully assured that social workers outside the hospitals are as conscious as those within hospitals of the high standard of professional ethics required of them. Social workers involved in the life

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of the community are well accustomed to receiving information which is a matter of strict confidence, and they may find themselves having to ask a client for agreement to disclose confidential matters to, for example, if I may give one, the general practitioner who is also going to look after that person, and help them with that person when he or she returns to the community.
I think we must keep it in the forefront of our minds (I shall probably not express this too well, but I hope I will not be misunderstood) that doctors and social workers are concerned with different areas of human functioning. Naturally, doctors will concentrate on the health and sickness of their patients: social workers are likely to lay more emphasis on relationships within the family, the community, society as a whole. If the doctor and the social worker between them are going to produce and return to the community a whole person, surely they have got to work together; surely there must be a disclosure between them of what one knows and what the other knows, so that the continuing care that is necessary can be carried on when the patient rejoins the community.
My Lords, I hope that we would all agree that the welfare of the patient or client (I use those two terms to denote medical and lay) and, where appropriate, of his family, must be the first concern of those responsible for treatment and support. To this end collaboration and co-operation among social workers, doctors and other Health Service workers, both in and out of hospital, is not only essential but must be a continuing thing. All these workers will have need of each other in promoting the best interests of the patient or client; and it must, I suggest, be left to their professional discretion, after consultation with the patient, to decide what kind of information must be exchanged between the two, the social worker and the doctor.
LORD PLATT: My Lords, may I ask the noble Lord, with great respect, which of the speakers doubted any of these things? I do not recognise that anybody did doubt those things.
BARONESS SUMMERSKILL: My Lords, is my noble friend aware that many of us welcome what he is saying
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because this kind of background is very helpful?
LORD WELLS-PESTELL: My Lords, clearly underlying the speeches of one or two noble Lords there was the fact that it would be very difficult to maintain confidentiality if information had to be passed on to the social worker. If I have said something that to certain noble Lords appears unnecessary, I think it is sometimes necessary to state these things so that there is no misunderstanding.
LORD ROBBINS: My Lords, may I interrupt the noble Lord? I have the feeling that the sentiments which the noble Lord has expressed are generally acceptable, but I am not sure that they completely allay the anxieties which were raised at least in my breast as I listened, as a complete amateur, to the unfolding of the subject. The noble Lord, Lord Platt, told us of an extremely interesting episode concerning a request made to him in regard to someone who had been under his care—an improper request which he naturally refused. The question that I should like to ask is this. Without in any sense disparaging social work or social workers, is the ethos prevailing in that branch similar to the ethos which, so to speak, automatically governed the doctor in the position of the noble Lord, Lord Platt, in the story which he told us?
LORD WELLS-PESTELL: My Lords, T have neither seen nor heard any evidence, either to-day or at any other time, that leads me to believe that professional social workers have a lower standard of ethics than members of the medical profession. If I could leave it there, perhaps it would be wise for me to do so.
The noble Lord, Lord Reigate, quoted from the Report of the Working Party on Social Work Support for the Health Service. I intended to quote precisely the same section of that Report as he did, but I should like to make this one difference. The part which the noble Lord quoted related to post-April 1, 1974, and not pre-April 1, 1974. I want to quote, as did the noble Lord also quote, this part. The Working Party on Social Work Support for the Health Service said:
"But we can record as a matter for encouragement the fact that at no point in our discussions has it been suggested to us that confidentiality presents any real difficulty in working relationships between doctors and social workers provided there is personal confidence between the professionals concerned."

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The Report goes on to say:
"For the needs of the patient to be fully understood, however, it is clearly right that medical and social information about him should be shared as far as necessary between those who are sharing in the task of caring for him."
This will mean an exchange of information. It must be and is clearly understood by both sides (and I am sorry we have to divide this up into two sides) that there must be confidence. If I may revert to the Probation Service, has anybody heard of any breach of faith in the Probation Service? That Service has been going for years, and there are very few people in the community who acquire possession of more confidential information than probation officers, yet there has been no breach.
We are in danger of anticipating difficulty when it is not likely to occur. I should perhaps make the point that the Working Party included a substantial representation of both doctors and hospital social workers, and that in this recommendation, as in all others, they were unanimous. In using the words, as they did, "as far as necessary", the Working Party clearly took the view that the decision as to what ought to be disclosed should be a matter for professional judgment, and that there should be no question of unrestricted access to records or unreasonable demands for information on either side.
Now the question of responsibility for hospital social work records since April 1 is another point on which a great deal of concern has been expressed. I will try to clarify the situation. Before April 1, hospital social workers were employed by the Health Service, and reports prepared by them before that date were and remain the property of the Health Authority. Since April 1, hospital social workers have been employed—many of them against their will, I know—by local authorities, and reports prepared after that date are the property of the local authority. But let me make it quite clear that medical case notes about a patient, including any contribution made to those notes by a person who is not employed by the Health Service, remain the property of the health authority.
Lastly, hospital-based social workers, as members of hospital teams, may find themselves from time to time contributing to the team knowledge of a patient rele
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vant to his treatment. This knowledge would be confidential to the hospital team. I really do not see what more—certainly not at this stage, for it is only November—can be done to protect and safeguard the interests of the patient or client or, for that matter, the position of the doctor or social worker. I think that the first general point to make is that the use of information about a client is a matter of professional ethics and common sense, rather than of legal ownership. It is a matter for close consultation between all who are professionally concerned with the care and treatment of the individual. A suggestion had been made that there should be a legal requirement that a professional worker should not divulge confidential information obtained in the performance of his work without the consent of the patient.
I think that this suggestion arises because some doctors and social workers fear that, without such a requirement, social workers who are employed by local authorities could either themselves make irresponsible use of information about patients, or be constrained by their employers to divulge it in circumstances which would be harmful and damaging to the patients' interests. However, these fears, I am quite convinced, are baseless. Ever since I saw this Motion down on the Order Paper I have been at some pains to discuss this matter with certain doctors I know, with social workers and even with medical social workers. I recognise the fear and the anxiety, but I think that we should be able to distinguish between a feeling of anxiety and the fact that something may happen or has happened. Social workers employed by a local authority have their professional integrity like other professional people elsewhere and this would absolutely forbid them to act in either of these ways. Of this I am quite sure. Moreover, local authorities require a high standard of integrity in all their staff.
I do not think that we have any grounds for regarding social workers as less responsible than other professional workers or anyone else entrusted with private and confidential information. Local authority social workers come into possession of an enormous amount of confidential information, as do probation officers, to whom I have made reference. There is no evidence and no reason to

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believe that there has been any real abuse. We heard of one incident this afternoon and I am sure that if some of the noble Lords who have spoken could have given chapter and verse of abuses they would have done so, and quite rightly so.
This means, for example, that in the event of a local councillor asking for personal reasons to see the case papers of a client of the Social Services Department, the social worker concerned would quite rightly refuse. This would apply whether or not the case papers included confidential medical material. If, in order to decide the appropriate local authority action on a matter before them, councillors needed information about a person, it would be a matter for the chief officers of the authority, in consultation as appropriate with any doctor—whether a general practitioner or a hospital doctor—concerned in the case, so that the authority might have such advice as was appropriate in the circumstances while confidentiality on all aspects was preserved where professionally desirable.
My Lords, I may add that this is not a problem peculiar to the local authority world or to the personal social services. It is one which will undoubtedly appear in the Health Service setting. As I told your Lordships' House in the debate in June, discussions have been held between the British Medical Association and the British Association of Social Workers about the circumstances in which information about a patient or client should be disclosed to members of other professions. There have also been discussions about confidentiality between the Royal College of General Practitioners and the British Association of Social Workers and, as my noble friend Baroness Summerskill said, there appeared yesterday in Social Work a long article on the subject which was published simultaneously in the Journal of the Royal College of General Practitioners. Regular discussions between social workers (both hospital and local authority based) at local level and with members of other professions have shown—these have taken place in a number of areas in England—that anxieties over the exchange of information can be resolved, especially when the importance of this matter is recognised in ensuring good service for clients. These
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matters should be settled by understanding and agreement between practitioners rather than by Parliamentary or Government intervention which could result only, I believe, in the creation of a rigid system of rules which in the long run would tend to work against the interests of the patient or client.
My Lords, I hope that, while recognising the anxiety and the fears, we also recognise that this is no new situation. It is a situation which other professional organisations, both voluntary and statutory—and I did refer to the Probation Service—have had to face over a number of years. I hope that we can keep in the forefront of our minds that the important point is to do as much as we can for the individual when he or she leaves the hospital setting and returns to the community, where he or she may need continuous and continuing supportive help from a local authority social worker. I hope we shall bear in mind that it is necessary for the two different settings to come together from time to time to discuss the progress made and to exchange information. In the last analysis, I am sure that everyone in your Lordships House is concerned only to do what is right for the individual and, ultimately, for society. I think we can do this only if we keep in the forefront of our minds what the noble Lord, Lord Reigate, has said. I am glad he raised this matter
I think it is right and proper that he should have aired this matter much more fully than he was able to do on a previous occasion but, having said that, I hope we shall recognise that the discussions now taking place between the British Association of Social Workers, the British Medical Association and the Royal College of Medical Practitioners will take time. Out of these discussions may arise some recognised code of ethics—I do not know; but let the discussions go on, and let us not hamper them with our fears and anxieties.
5.0 p.m.
LORD REIGATE: My Lords, I think I have the right, if not to reply, at least to make some comments on what has been said. First of all, may I thank all noble Lords who have taken part in this debate. I thank those who have supported me in my anxieties, and I am tempted to thank also the noble Baroness, Lady Summerskill, because although she

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disagreed with what I had to say I think she helped to bring out the ire and fervour in the noble Lord, Lord Platt, and other noble Lords who have some anxieties. The noble Baroness said I had not proved my case. I was not trying to do so. She also said that I was wrong in saying there was widespread concern, because the matter had not been mentioned in the British Medical Journal or on the media. I do not read the British Medical Journal and I cannot think that is necessarily the only standard by which we should judge widespread concern. I was of course referring to widespread concern inside the National Health Service, and I should have thought that was obvious from the wording of the Motion. As for the noble Baroness's own reminiscences of the postprandial indiscretions of some of her doctor friends, the less said about that the better. I have never spoken with any social workers in this way or accused them of any similar kind of indiscretion—and I am going to have a word with my own doctor to see that he does not make that kind of remark about me after dinner, thank you very much!
BARONESS SUMMERSKILL: My Lords, may I say that the noble Lord, Lord Platt, reminded me of the fact that his own surgeon had betrayed him.
LORD REIGATE: My Lords, I am very grateful. I was particularly interested in the rather wider issues introduced by my noble friend Lord Hunt of Fawley, and I look forward to reading his speech. I am a mere layman and can speak from only very limited experience, but I assure your Lordships that widespread concern still exists. I was most interested in the suggestion put forward by the noble Lord, Lord Hayter. I interrupted him to ask whether he was referring to medical social workers or to social workers, because this would be an admirable suggestion. The difficulty arises with the medical social worker who comes straight out of local authority service and is generically trained. Would he be eligible for his Social Workers Council? This, if I may say so, is a "re-hash" of the work which took place: a battle which I regret was lost.
I am also grateful, for once, to have had some support from my noble friend Lord Aberdare on this matter, since he
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does not always agree with me. Above all, I am grateful to the noble Lord, Lord Wells-Pestell, for what he said. There were passages towards the end of his carefully prepared speech which will make interesting reading. He is beginning to feel what I believe many people are feeling to-day, that what is needed on these matters is a proper code of ethics. The noble Lord also made perhaps the rather startling suggestion that there was the underlying implication in some speeches that some of us thought there were lower standards among the local authorities' social workers. I do not think that anybody has ever suggested that, nor that any Member of your Lordships' House even intended to suggest such a thing. What needs to be emphasised is that the hospital social worker teams have been small, compact and forming part of a clinical team. Some of the anxiety here comes from some social workers who will be "outposts" from a larger Department They may feel that the knowledge they derive from their clinical work under the National Health Service will be known by some people who should not know it. It is as simple as that; but I think that some of the things said by the noble Lord will be very helpful in allaying any such fears in that direction.
LORD WELLS-PESTELL: My Lords, would the noble Lord just allow me to express my personal thanks to him for having removed any doubt that lower standards might have been imputed. I am sure local authority social workers, if and when they read the report of this debate, will be glad to be reassured that no one suggests there are two different standards.
LORD REIGATE: My Lords, I am glad that the noble Lord derives comfort from that because, as I said, not only to-day do I think that no Member has made any such suggestion, but on the previous occasion when I raised this matter did anybody make such a suggestion: rather the reverse. Putting it in material terms, the local authority social workers are, on the whole, far better paid than medical social workers. This is one of the reasons why the hospital social worker has been in some trouble in this respect. In so far as that is a gauge of merit, I suppose one might say they are of higher standard.

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I must make one complaint, which is that the noble Lord once again laid down a ruling and, again, seemed to be confusing the two kinds of records I spoke of earlier. He confirmed that the medical records are the property of the Secretary of State—which is what we all know—and in effect really confirmed to-day that the social workers' files are the property of the local authority, which is what I said. There will still be difficulty in this sphere, and I notice he made no attempt to answer my extract from the letter about the local government Ombudsman. Perhaps he will consider this and let me know his answer as regards the dangers implicit in that matter at some future time. Once again, I should like to express my gratitude to your Lordships for the patience with which you have listened to me.
LORD WELLS-PESTELL: My Lords, before the noble Lord sits down, may I say that I did intend to reply to him regarding the Ombudsman point. I wonder whether he would care to put a Question to me about that and I shall then be able to notify the whole House of the answer.
LORD REIGATE: My Lords, I am much obliged. I beg leave to withdraw my Motion.
Motion for Papers, by leave, withdrawn.

E.E.C. POLICY TOWARDS DEVELOPING COUNTRIES
5.8 p.m.
LORD O'HAGAN LORD O'HAGAN rose to call attention to the changes in the EEC's policy towards developing countries; and to move for Papers. The noble Lord said: My Lords, I am asking your Lordships to change perspective and pass from the subject of domestic concern to a subject of equal importance but in the international sphere. Some Members of this House may wonder about the timing of my Motion to-day. Just before Christmas, when we are looking forward to enjoying ourselves, perhaps we should turn our minds to those who cannot or will not be enjoying Christmas. But, more than that, Her Majesty's Government and the EEC have just been partici-
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pating in the World Food Conference in Rome, when the whole gamut of problems facing developing countries was canvassed; and I think that since Britain joined the Community nearly two years ago the nature of the relationship between the developing and the developed world has changed a good deal. It is worth focusing our attention on some of the ways in which the Community has responded to a changing world situation.
It has nothing to do with the Community that the world price of oil has multiplied by five. Nor is it the Community's fault that this has had an effect on the world prices of fertilisers, or that other commodities have rocketed in price, particularly grain. But all these new developments have greatly influenced the relative wealth of those countries whose economies are still under development. In some ways the old Biblical tag: "To him that hath shall be given", could really be adapted so that apart from the oil Princes we could really say nowadays:
"To him that hath it shall be taken away, And from him that hath not shall be taken away, Even more than he lacked in relation to other people before"—
because those developing countries who have few of their own resources have, as we have with our modest increase in petrol prices, suffered from the increase in the prices of oil, fertiliser and grain. I should like to know from the noble Lord, Lord Goronwy-Roberts, whether he felt that Her Majesty's Government have been encouraged by the progress at the World Food Conference and whether the attitude of the EEC overlaps that of our own Ministers.
But. my Lords, there is another reason why I feel that we should be looking at this matter now. There may be some slight confusion in some of my remarks, because when I came to your Lordships' House this afternoon I discovered that the Government had just issued a White Paper, Developments in the European Communities March to October 1974. I will not attempt to give a precis of it, but having read certain parts of it in great haste I was struck by the fact that under the heading of. External Relations: Trade and Aid, Her Majesty's Government had listed a certain number of objectives that they had in mind when undertaking their renegotiation of our

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terms of entry. While I would not want to go through them all it appeared to me that a certain number of them have been if not wholly dealt with at least in part satisfied during the renegotiation so far.
If I may I will use this White Paper as a peg on which to hang my remarks. At one point it reads:
"At a joint meeting of Ministers from the nine member countries of the Community and Ministers from the 45 developing countries held at Kingston, Jamaica on the 25–26 July it was agreed that the industrial and most agricultural exports of the developing countries should have free entry into the Community without any obligation to give reciprocal treatment to Community exports."
My Lords, many of us who are not members of the Labour Party share with the Labour Government a worry that the association agreements that the Community entered into in the past were not as wide in their spread or as generous in their terms as they should have been to people participating in them. It is therefore of particular significance that Her Majesty's Government have already shown how the new type of association agreement which is still being negotiated with all Commonwealth countries who might be eligible is something of a very different nature from the old type of association agreement. Perhaps the noble Lord could give us some information on this aspect.
There are those who look upon the Community as a selfish, protectionist bloc, merely looking after its own interests, and to those people the old type of association agreement (a special form of trading relationship with former colonies) looks as if it were merely colonialism in another guise. As I understand it (perhaps the noble Lord could confirm this), the wider type of agreement that is already in train has excluded many of those features which were objectionable in the old association agreements, for example, reverse preferences. It is very encouraging to us who are keen to see the Community develop a more outward-looking attitude to the rest of the world that the objections of Her Majesty's Government have to some extent been met.
Another point about which the Government were concerned was that those who are not eligible for association agreements for one reason or another,
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particularly large countries in Asia with few natural resources and exploding populations, should have a better relationship with the Community. I wonder whether the noble Lord, Lord Goronwy-Roberts, could give us some examples of what has happened since the present Government came into Office. Could he tell us, in particular, what has been done for India in this respect, and also whether any progress has been made in regard to the knotty problem of Hong Kong? There is another statement in this White Paper which shows that Her Majesty's Government feel that considerable progress has been made on this aspect of renegotiation. This statement reads:
"For other agricultural produce the Community has offered tariff-free and levy-free access for almost 90 per cent. of the exports of the Commonwealth countries concerned and is now examining the possibility of further improvements."
I would be grateful to the noble Lord if he could fill in a little more detail. At first reading it seems to show that some of the fears which many of us have about the nature of the Community's attitude to those countries which were not associated can be put on one side.
I understand, particularly from reading the evidence which the Minister of Overseas Development gave to one of your Lordships' sub-committees scrutinising European legislation, that Her Majesty's Government take a cool view of food aid as a form of development aid. I can quite understand the concern of Her Majesty's Government. In the past I think the EEC has been too prone to clap itself on the back for off-loading some of its food surpluses on to the poorer nations of the world, giving the reasons that by so doing they were doing a wonderful deed for everybody, whereas it was to some extent merely getting rid of an embarrassing glut. Therefore I welcome the new shift in the Community's policy in this regard. Surely the real objective of development aid must be to enable countries to help themselves, to encourage domestic agricultural production so that they can feed themselves rather than off-loading what may be quite unsuitable food simply because there is a surplus of it elsewhere in the world—not that there are surpluses of many commodities at the moment.
I was very interested to see that, under this heading, Her Majesty's Government

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said that already the Council of Ministers' meeting had called for an evolution of Community aid policies leading to a more balanced distribution of aid according to need. I would be glad if the noble Lord could give some examples of this shift that Her Majesty's Government have helped to achieve. I understand that the latest Commission proposal on the subject of development aid takes as its motto, "To each according to its need"; so it seems that as well as the Council even the Commission is paying some attention to what Hcr Majesty's Government hold dear. Will this Government resist any attempt by the EEC to give food aid to countries without giving a grant towards the transportation costs at the same time? I understand that in the past sometimes a grant of food aid has been given, but that the country has been unable to take up the grant of food aid simply because it is so poor that it cannot afford the transportation costs. I would not call that aid at all; I hope Her Majesty's Government will put a stop to it.
This is a short debate and I do not want to pre-empt the time of other noble Lords who arc more expert in this field than I am. I hope that I have provided a platform for the Government—and for those who are more knowledgeable—to point out some of the changes which have taken place in the policy of the Community in this particular respect. I should like to conclude by saying that I have come from Bonn this morning, where I was attending a meeting of the Social Affairs and Employment Committee of the European Parliament. We have been taking evidence from migrant workers, among others, who come from developing countries to work in Germany. We visited a Ford factory and saw that nearly half of the workforce in this car factory came from Morocco, Turkey or some other part of what is still the developing world. May I congratulate the Government on ensuring that the domestic arm of development policy has been reinforced by their decision with our partners in the Community to allow the Social Fund to be extended to projects dealing with those migrant workers from outside the Community who are now resident in Community countries. This was something which the old Community did not allow, but it has happened since
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we became a member. This aspect of the matter is being looked at as well as the difficulties of the countries far away.
In the aeroplane I travelled back in we were given the normal flight information about the weather in Britain, and finally the pilot concluded by expressing these wishes: "I hope you are liking to stay with us". I did not know what I was going to do in mid-air if I did not like to stay with him! However, speaking as one of your Lordships' representatives—a part-time one—in the European Parliament, may I say to Her Majesty's Government that so far as the EEC is concerned, "I hope you are liking to stay with us". From what the Minister of Overseas Development has done so far, it seems possible that renegotiation can mean something. I noticed that even The Times, after there had been a meeting of the Council of Ministers—and I should remind your Lordships that the Minister of Overseas Development in Holland is called Mr. Pronk—referred to the "Pronk/Hart axis" in the Council of Ministers. This is renegotiation which is already succeeding in changing the Community into something less selfish and more outward-looking. I hope that the noble Lord, Lord Goronwy-Roberts, and those who will contribute to this debate, will enable this process to continue. My Lords, I beg to move for Papers.
5.23 p.m.
EARL COWLEY: My Lords, the whole House must be extremely grateful to the noble Lord, Lord O'Hagan, for initiating this important debate to-day. I should like to congratulate him on his excellent speech which demonstrated the vast knowledge he has of this problem. The debate is certainly not taking place before time, and I hope that the noble Lord will be well satisfied with the result of it.
Over recent years the policies that the European Community has followed in its relations with the countries of the Third World have come in for considerable criticism, on the basis that the policies were too restrictive and also too inward-looking. Relations between the EEC and the developing world were seen in terms of the Community's development policy towards the former colonies, especially those in Africa, of the member States.

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It was only towards these ex-colonies that the EEC had developed, mainly through its system of association, a coherent policy for the Third World.
With the entry of Britain with its historically different view of the developing world from that of the other members of the EEC, it was hoped and believed that the Community would formulate its policies on the Third World on a broader base. This was founded upon the belief that Britain in recent years had done more for the developing countries than had the Community. In terms of trade and aid this was totally erroneous. Both our trade with the Third World, as well as our official aid, in terms of size and rate of growth, were far less than those of the Community. But what was true, however, was that this country's attitude and policies towards the developing countries, especially those in the Commonwealth, were more open.
The 1972–73 Report of the Commons All-Party Select Committee on Overseas Development reflected this more global approach to the countries of the Third World. The Report urged the Community to consider the existing regional agreements as transitional stages in the way to a global development policy. The Committee also stated that those Commonwealth countries which had not been offered association—for example, India and Bangladesh—should not be permitted to suffer by reason of their exclusion from association. This problem has been partly covered by the joint declaration of intent made by the EEC. These aims of the Committee were pressed upon our Common Market colleagues, with a certain amount of support from the Commission, both by the last Conservative Government as well as by the present Labour Administration. This pressure has been partly successful.
Last July. France accepted the principle that the Common Market could give financial and technical aid to developing countries with which it had no special association links. However, this change of attitude was to a certain extent soured by the proviso that the associated States should be given absolute priority when deciding the level of aid. The resolution of the Nine which conceded this principle of financial aid to the non-associates contrasted strongly with the
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West German decision to cut back the I amount of development aid that it was willing to grant in the future. The decision was even more surprising consider- ing the stable economic position of West Germany, and the fact that it caused the resignation of the country's Minister of Economic Co-operation, Dr. Erhard Eppler. But these are just examples of how national interests tend to conflict with any real progress towards meaningful cohesion within the Community as a whole.
While the Commission itself tends to provide much of the impetus for change and expansion of policies, the member States are slower and take far longer to reach agreement. Thus it is misleading to think of the Community in terms of the aggregate of the statistics of each member State. If one does so, one finds that the EEC has a population larger than America or Russia, a quarter of the world's steel production, a level of overall development assistance equal to that of the United States, a market for the exports of the developing world which is twice that of America, and so one can go on virtually ad infinitum. These statistical totals are important in that they show the Community's potential but not its current strength, which is far below that.
However, a different relationship is being fashioned between the countries of the Third World and the EEC by factors far outside the latter's control. The recent crises in energy supplies, mentioned by the noble Lord, Lord O'Hagan, and the curent shortages of raw materials have tended to enhance the economic bargaining power, of much of the developing world vis-à-vis the developed countries. The recent crises have also created dire economic and social problems for many of the developing countries that lack raw materials and oil, which they have thus to import at vastly increased prices. The World Bank has estimated that developing countries as a whole spent some 5,200 million dollars on oil imports in 1973, and will need to spend 14,900 million dollars for the same volume of oil imports this year. It is likely that if the oil prices remain at the present levels—and it is probable they will increase—the current account deficits of the developing countries will double, reaching well over 20,000 million dollars.

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On top of this, these countries are having to face a staggering escalation in the costs of their grain imports. As was made clear at the recent United Nations Food Conference in Rome, some of these countries are facing starvation on a vast scale. I am very glad that the Community did not insist on its original stand to fight against the creation of any new institution for the disbursement of development aid, because if it had done so the Arab oil producers would not have contributed to that aid.
On May 2 last, the EEC announced the i so-called Cheysson Plan whereby the Community agreed to make a contribution of 500 million dollars in 1974 to the UN Emergency Fund of 3.000 million dollars. This Fund had been set up at the Sixth Special Session of the UN General Asesmbly on raw materials and development last April, and was created to help those developing countries hit by the commodity crisis. However, regrettably the Community's contribution was made dependent on other countries joining in the scheme. This proviso luckily was subsequently relaxed in spite of considerable opposition from the French and the West German Governments. Last month the Community agreed to donate 30 million dollars to the Fund and to give 120 million dollars in the form of bilateral aid. But the release of the remaining 350 million dollars is still dependent upon donations being made by other countries. This Fund will be operated by the UN in favour of both the associate countries of the EEC and countries that are not associated with the EEC. This commitment made by the Community could mark the beginning step, if but a small one, on the way towards a more open EEC development policy, benefiting not only the poorest States in Africa but also those in Asia and Latin America.
The current negotiations, that began in October, 1973, between the EEC and the 44 ACP developing countries in Africa, the Caribbean and the Pacific (hence the initials) have also been affected by the changing attitudes and economic circumstances of the Third World. There has been created a greater balance of economic bargaining power between the Community and the 44 ACP developing countries. These countries are the 19
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African States, Madagascar and Mauritius that come under the Yaounde II Convention, the three East African Commonwealth countries under the Arusha II agreement and the 19 associable Commonwealth independent countries that are offered association under Protocol 22 of the Treaty of Accession. This unity of purpose did not exist in the earlier negotiations for Yaounde II or Arusha II, and this is a very important fact.
In this current set of talks to set up a system of preferential trade, financial aid and joint institutions, the Francophone and Commonwealth States have agreed to negotiate as one bloc under the leadership of Nigeria and within the auspices of the Organisation of African Unity. The tougher bargaining power can be seen in the eight so-called principles that were drawn up at the OAU Heads of State meeting in Addis Ababa in May, 1973. These principles call for the liberalisation of the Community's aid and trade policies. The ACP States are, in fact, seeking more favourable treatment in the area of trade than other developing countries will get from the EEC's generalised system of preferences.
So far as competing agricultural products are concerned, the Community is unlikely to accept a scheme that would undermine the Common Agricultural Policy or grant more favourable terms of trade than those given to other developing Third countries. While the EEC is negotiating on a product by product basis, the associable States are demanding free access as a matter of principle in order to avoid the danger of individual States trying to get marginal advantages on particular products, which is what happened in previous negotiations. Such an occurrence would obviously weaken their bargaining position. The main agricultural products for which free access is wanted are citrus fruits, tobacco, beef and of course sugar. As has been made clear in the Press to-day, the Community as a whole has at long last accepted the principle of access for 1·4 million tons of Commonwealth sugar for an unlimited duration of time. This fulfils the commitment made by the last Conservative Government in the two Lancaster House Agreements to the Commonwealth sugar-producing States. However, at the Jamaica Conference last July the Community came somewhere nearer to the position set up by the ACP States, and

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they agreed financially to guarantee the associated countries' earnings from exports to the EEC for certain primary products as well as manufactured and semi-manufactured goods.
On the crucial question of reciprocity the associablcs have totally rejected reverse trade preferences. The Community seems to be divided on this point. Britain appears to support the stand taken by those countries, whereas the French take the Commission view that the associates should establish customs exemptions for certain EEC products. Likewise in the area of aid there is disagreement among the member States. This country, West Germany and Holland are in favour of extending the geographical scope of Community development action, while other member States are not quite so keen on the idea.
Although the European Development Fund was greatly increased between the first and second Yaounde Conventions, the poorer associated States received less assistance from the Fund than did the richer States. To help counteract this in the future the Community and the ACP States have agreed that the programming of EDF aid should be carried out by negotiation, with the existing development programmes kept well in mind. The amount of the EDF has not been settled, although it will probably be around 2,000 million dollars or even as high as 3,000 million dollars to be spread over the next five years. What has not been made clear by the present Labour Government is whether our contribution to the EDF will be in addition to our existing official aid programme or will be deducted from it. Perhaps the noble Lord, Lord Goronwy-Roberts, when he comes to answer this point in his speech, could also say to what extent the granting of aid is dependent upon the number of Commonwealth States that become associates under a new Yaounde Convention, because it is important to bear in mind the fact that over 80 per cent. of our official aid goes to Commonwealth developing countries.
While many of the Community policies towards the developing countries are still concentrated on the associates, there is a perceptible change of attitude among the member States. The Community has recently agreed to extend the scope of its trade preferences for developing countries
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as a whole from the beginning of next year. This decision will increase the amount of imports entering the Community from the Third World at preferential duties by around 15 per cent.
Also, the Community has increased the number of non-preferential trade agreements that it has with third countries. However, in the case of the agreements with Argentina, Uruguay and Brazil, the provisions on beef imports have been unilaterally suspended by the Community because of the current glut of beef in Western Europe. However, I am led to understand that those three South American countries have found markets for their produce in Eastern Europe. The negotiations between the EEC and the Special Co-ordinating Committee for Latin America are continuing in an attempt to improve relations between those two areas of the world, although as yet much is still being left to the individual member States.
My Lords, while the recent moves by the European Community and its member States towards a global approach to the Third World might not have been very great, at least they are in the right direction. If the economies of the EEC member States are to expand and grow, then it is in our interest to help to improve the economic standing of the developing countries, irrespective of any obligations which we may feel towards them. In the long term, the aim must be to convert the relationship between Europe and the Third World from one of dominance and dependence into one of more genuine interdependence.
5.42 p.m.
LORD LLOYD OF KILGERRAN: My Lords, may I join the noble Earl, Lord Cowley, who has just sat down in paying a tribute to the noble Lord, Lord O'Hagan, for giving your Lordships another opportunity of considering European Economic Community matters, and particularly this most important subject of aid to developing countries. All of your Lordships will be most anxious that increasing aid should be given to developing countries, but some of your Lordships, like myself, may be bothered as to the channels through which, and the methods by which, that kind of aid shall be given and the nature of the aid that should be given. The noble Lord, Lord O'Hagan, and the noble Earl, Lord Cowley, have

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given a most impressive amount of information to the House.
Your Lordships may find that it would be helpful to consider one specific aspect of aid to which the noble Lord, Lord O'Hagan, has referred; namely, food aid. In the few observations that I shall make to your Lordships I wish to consider the proposals, in so far as they have been published, of the EEC in regard to food aid. In fact, my intervention in this debate has been caused by the fact that I have had to consider for other purposes two documents which have been issued by the Commission during the last six months as to their policy on food aid and the responsibilities of the EEC in regard to food aid.
The second matter which caused me to intervene in this debate is that last night I had the honour of meeting the High Commissioner for Bangladesh who spoke most movingly of the difficulties which his country has faced recently—and, incidentally, of the great resources which he said that country has. In the course of the discussion after his speech, I had the privilege of asking him what aid his country had received from the EEC in recent months. Somewhat to my surprise, the High Commissioner said that so far he has received no aid at all through EEC channels. There had been promises of aid through the EEC channels and his country was relying upon that aid which appeared to have been promised to him.
Turning to the published policy of the Commission in regard to food aid, nobody would disagree with their general view, and if I may quote from one of the documents to which I have referred the Commission states:
"Europe must show its awareness of the sudden dramatic deterioration in the situation of the poorest countries and must rise to its responsibilities towards the victims of this crisis."
These reports also recognise, as the noble Lord, Lord O'Hagan, mentioned, that food aid by itself—and again I quote:
"… is not a satisfactory permanent solution to the food problem of developing countries and that it is essential for them to expand their own agricultural production".
However, these reports, dealing, as they say, with the responsibilities of the EEC Commission in regard to food aid for developing countries, do not explain in any detail how this further agricultural production aid can be developed.
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Of course, immediate food aid has great value in certain cases. The recent devastation and human crises resulting from the droughts in Sahel and Ethiopia and the recent floods in Bangladesh establish the positive role to be played by food aid which is immediately granted in such circumstances. It appears to me that the administrative machinery for this kind of aid must be capable of working quickly. From the recent reports of the Commission, it seems that it certainly recognises that its own administrative machinery for dealing with this class of food aid is not adequate.
The problems of the Commission appear to be fully recognised, and again I quote from the section of the report dealing with the procedural and management aspects of food aid. It states:
"The food aid policy requires efficient and rapid procedures for its implementation."
The report goes on to say that—
"The existing procedures are not adapted to the requirements of efficient management."
While not wishing to discourage the EEC from continuing to improve its food aid procedures, it should, I think, be recognised that there are established procedures for granting and delivering food aid. They are the national procedures, and the procedures of the United Nations. Perhaps these established channels for aid may be found to be more effective than any procedures to be set up by the EEC, at least for short-term food aid.
The Select Committee on European Communities, under the chairmanship of the noble Lord, Lord Diamond, to which the noble Lord, Lord O'Hagan, referred in his speech and of which I have the honour to be a member, has had the opportunity of considering the Community's policy documents on food aid that have been published during the last six months. Also, it has had the advantage of taking evidence from the Minister of Overseas Development, Mrs. Judith Hart, on August 29 last. I put to the Minister the point about the advantages of national and United Nations procedures for granting food aid, and asked her to contrast them with the proposals by the EEC for channels for food aid. She indicated that the United Kingdom representatives were in the same position as representatives of other members of the Community, being reluctant to give a free hand to the Commission in

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this field for a number of reasons which I need not quote to your Lordships this evening.
It may be interesting to refer again to my meeting last night with the High Commissioner for Bangladesh, when he paid a great tribute to the Minister of Overseas Development in taking the stand that she has taken in using channels other than the proposed EEC channels for bringing immediate aid. It became clear to her that the position in India and Bangladesh required aid to be administered far more quickly in view of the acute difficulties in those countries.
My Lords, my main reason, therefore, for intervening in this debate is to ask your Lordships, and particularly the Minister who will follow, whether food aid in particular could be better distributed and better dealt with through the national procedures and the procedures of the United Nations rather than through the proposed procedures of the EEC as I now understand them. I am afraid that my discursive views and observations as to the potential value of EEC procedures for dispensing food aid, certainly in the short term, may be somewhat gloomy. But perhaps the noble Lord, Lord Goronwy-Roberts, and the noble Lord, Lord O'Hagan, who will follow at the end of the debate, may be able to dispel a little of the gloom which I have brought into this Chamber this evening.
5.50 p.m.
LORD GORE-BOOTH: My Lords, I should like to associate myself with other noble Lords who have spoken in thanking the noble Lord, Lord O'Hagan, very sincerely for bringing these matters to our notice, more particularly as I think he rather suggested that he can speak with an EEC voice as well as the voice of a Member of this House. We are grateful to him not only for his expressions of views, but for the information he brings to those of us who do not always have time to read the voluminous material that comes out from Brussels. In the space of a few minutes I will venture to broaden the subject a little and to put it into the context of what has happened in the world about aid over recent years and then come later to the EEC element.
To my mind, two drastic changes have taken place in the world of aid since it began to become organised on a large
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scale; say, some quarter of a century ago. In a way, we have come to the end of what might be called the classical age of aid, and there are two principal reasons. The classical aid was defined very well as 'the Jackson-Pearson era and perhaps consists of what Barbara Ward once wrote in Rich Nations, Poor Nations:
"Round the North Atlantic a ring of societies has come into being with more wealth, more resources at its disposal than has ever before been known in human history."
That was the situation in, one might say, its purity until last year.
We now have two drastic changes; one sudden, the other subtle. The sudden one I need not dwell upon because it has already been mentioned; namely, the quintupling of the price of oil. But perhaps I should add that it is not just a matter of pounds and pence; it is a matter of a feeling of vulnerability in Europe. In other words, to anticipate my conclusions, we have to go on accepting the aid obligation, and indeed the aid impulse, despite the fact that we can no longer speak of the North Atlantic in exactly the terms used by Barbara Ward 12 years ago. We must go on but we are no longer quite so confiident of our capacity. There is of course a corollary to that, which is that nations which have suddenly become much richer (not more developed, but richer) enter into this equation now, and the whole picture of who shall give aid to whom is much more confused than it was even quite a short time ago.
The other, subtle, element which has come into this whole question is—and I have said it frequently to my Indian friends when I was there—that people round the world must remember that in this process of a much greater humanitarian attitude towards social questions and towards life generally, the developed countries have discovered their own slums and there is great pressure on Governments now to use such financial resources as they have more and more in the interests of their own deprived people, and this competes with the proper claims of the developing countries. I speak of this matter through experience and not just from theory. I can say from my own activities in a voluntary organisation that the pressure to use a higher proportion of our resources on really

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deserving matters at home grows, not sensationally, but all the time.
Therefore, I think that one has—and I put this negative part of my suggestions first—to speak frankly to developing countries in this sense. Moreover, if you read, for instance, the account in last Sunday's Sunday Times of the food conference, I think one can talk very frankly to our friends who want our help and say, "It really is no good lecturing to the people of the developed countries on their misdeeds of the 19th century, on which there is plenty of argument, because people in these countries are just not interested". The point is that we really have to get together with developing and developed countries to try to ascertain what more we can do, and arguments that our system is all wrong really have no impact on the people who have got to contribute.
So much for my negative aspects in this matter. What then should we and what should the Community do? Perhaps I can clear one other negative out of the way. If, with the point of view of a financier, you were to look at the state of this country and notice that in the Budget we are told that we have a "borrowing requirement" of over £6,000 million your reaction would be: "Well how can we give any aid at all?" You would say that we are going to be £6,000 million in debt. However, I think that leads to one of the most positive merits of the experience this country has worked out for itself in the matter of the forms of aid which not only are easiest for us in financial terms to grant but also have the most long-run impact on the economies of developing countries. The experience gained through the original Department of Technical Co-operation, through the Overseas Development Ministry and through the Foreign and Commonwealth Office has led to a general understanding which I think could well permeate other countries and may to some extent have done so: the great thing we can do, however difficult our own position is, is to provide a constant flow of technical, scientific, management and other assistance to developing countries. I do not know whether this is a practice of our partners in EEC in their priorities, but we can probably do even more of that because when I have made inquiries about
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this subject I have always been assured that we still have technical and administrative capacity to spare which can be of the utmost use, not to produce food tomorrow, but to produce food and many other things the day after tomorrow.
I think we should not be self-righteous about this matter. The noble Earl, Lord Cowley, very properly reminded us that 80 per cent. of our Government's official assistance has been in effect directed to Commonwealth countries. So really one kettle cannot call another kettle black when talking to our Community associates on this matter. The great gain from the present situation is a two-fold one: the first is, as the various speeches made by your Lordships have shown that our presence in the Community has in fact caused the restrictive natures of the contributions made by the different members to be subject to a gradual process of resolving themselves in the best interests of the developing countries. This is a 100 per cent. benefit to them as a result of our presence in the midst of the EEC, and if we had not been there the developing countries would not have developed to that extent.
The second advantage is this. Certainly international aid passes with efficiency and reasonable speed through some such organisations as the United Nations Development Programme. Incidentally, if one is too inclined to feel apologetic for the West about this, I looked up a figure for 1972 which showed that out of 260 million dollars of aid passing through that fund 238 million dollars had been provided by the OECD countries, which is to say Western Europe, the United States, Canada, Japan and Australia. Perhaps we could do with a little cash from the Soviet Union which is also a developed country. Our record is not so bad but of course it has not been enough.
By the process of combining the experience in the EEC in the small committee of Nine, which is after all what the EEC is, I am sure that we can accelerate the liberalisation of aid and trade policies in a way not possible in the arena of an organisation containing 130 countries. What can be done by our presence in the work of this expert group of Nine is to continue this liberalisation and, we hope, without any form of appeasement; such appeasement would not be what we really

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meant, but by positive work and by getting side by side with people from the developing countries. Thus we can go on accelerating this very necessary progress. By doing so, perhaps we shall help to remove some of the vulnerability (of which I spoke) to pressure from countries which are on the way to development in other respects.
My Lords, my message is simply that there are great difficulties about this matter which I think it is the duty of someone to emphasise. Having looked at these difficulties, we must find ways around them. I have tried to suggest at least one technique, and there are many others. I am sure the Minister who winds up this debate will be able to show us further pointers to the future in which we can help the more unfortunate parts of the world.
6.1 p.m.
LORD REAY: My Lords, I am rather inclined to think that at the time of our accession, and for a period afterwards, and to some extent still in retrospect, the Community has been criticised unfairly for what were, or were thought to be, its attitudes towards developing countries. It is true that Community aid was principally channelled through its association with a limited number of African States which, in aggregate, did not account for a high proportion of the population of the developing world, although they certainly included a considerable number of the world's poorest countries. But in giving the priority to those countries, the Community was only following a policy similar to our own to this day, of wishing to pay special regard to the historic ties and duties which have resulted from the colonial experience of the peoples of Europe.
On this principle, there is no difference between British and French aid policy. I think the noble Lord, Lord Gore-Booth, was acknowledging that point. The difference lies in the much more worldwide nature and scope of Britain's former Empire as compared with any other. This was not, therefore, a problem of attitude, and the Community has responded as naturally and as rapidly in accepting the need to incorporate Britain's similar responsibilities into a Community policy as the other original members did in the case of France and Belgium.
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Moreover, there were, and are, admirable features in the Community's aid giving methods within the association. Over the last two years in contacts with Europeans and Africans, I have heard no criticism at all of the way in which aid under the European Development Fund is basically organised. This aid is overwhelmingly in the form of grants, with no problem of interest indebtedness arising. It is managed in a form of partnership; projects need to be approved by the donors, but they can be put forward only on the initiative of the Governments of associated States. Special favourable conditions have been devised to give advantages to local contractors and so on. Nor is it correct to suppose that the Community did nothing for developing countries outside the framework of association. For some time it has had a substantial food aid programme, to the benefit of countries outside the Association. In July, 1971, the Community introduced its system of generalised preferences. But, of course, it is true that since the accession of the United Kingdom, the Community's aid and development policies have been greatly enlarged and broadened in scope.
The first respect in which this is true is in the current negotiations with the now so-called ACP countries which aims vastly to increase the scope of the association itself by the inclusion of many Commonwealth countries, and some countries outside the Commonwealth. Of course, this is a direct consequence of Britain's accession to the EEC. The fact of these negotiations has already had profound consequences in Africa. Previously, there were hardly any contacts between French-speaking and English-speaking countries in Africa. To-day, anyone associated with the negotiations has been impressed by the solidarity within the negotiations between the French-speaking and English-speaking countries, and their apparently absolute determination to conduct themselves within, and to emerge from, the negotiations as a single unit. Of course, this will towards solidarity is explained by other factors, but this unique opportunity for it to find expression was exclusively provided by this country's accession to the EEC.

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We must hope these negotiations will be concluded before the expiry of the present association at the end of this year. But there are still some difficult problems which are not yet settled, including the question of the size of the next European Development Fund. I should like to ask the Minister whether he considers that there is a danger that these negotiations may not be concluded before the end of the year. If he does, does he consider that there will be any serious problem over the question of transitional measures to bridge the gap?
Apart from the association's negotiations, another respect in which Community development policy has been extended greatly since we joined the Community is in the generalised scheme of preferences as a result of the improvements introduced for 1974, and again for 1975. These were approved last week in the Council. Incidentally, I think that the Community's generalised preferences scheme is the only one open to modification on an annual basis. As a result of these improvements, it has been estimated that next year manufactured goods to a value of between 21 and 2·3 billion units of account, and textiles to the value of 500 million units of account, will be able to enter the Community from the developing countries, duty free. It is also estimated that agricultural goods worth between 450 million and 600 million units of account will enter duty free, or at preferential rates. The Community's GSP has, therefore, become an instrument of major importance in its overall development policy.
In extending the GSP, a great deal of account has been taken—and I am sure the noble Lord, Lord Goronwy-Roberts, will confirm this point—of the needs and requests of countries on the Indian Subcontinent in the implementation of the Joint Declaration of Intent attached to the Treaty of Accession, for example, in the matter of the quota for flue-cured tobacco, or by the inclusion of a long list of Indian specialities for preferential treatment. If some noble Lords think that, perhaps, there are other items that might have been included in this list, it must be borne in mind that any trading concession given by the Community to a developing country can be worth far more than a far larger
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concession given by the United Kingdom alone.
There are other points which I might mention: where special account has been taken of Britain's Commonwealth concerns—as in the acceptance of the commitment to guarantee the access indefinitely of the 1·4 million tons of; sugar—the current negotiations for commercial co-operation agreements between the EEC and countries on the Indian Sub-Continent, and also cases where other initiatives have been taken by the Community. For example, the action under the Cheysson Plan was established to assist all countries, whether within or without the association, most affected by the recent oil crisis. But I hope that I may have said enough to help convince any who doubted it that in the Community there is a tendency and a determination to look outwards, and a will to assume responsibilities to the world at large.
However, I do not think it proper to discuss the Community's aid-giving policies without making some reference to the present financial situation. I do not think that at present it will be possible for the Community to do much more than it is likely to be doing if, to those decisions which have already been taken by the Council, we add the assumption that positive decisions will be taken on those proposals already submitted to it by the Commission. It is true that the Community's per capita wealth is, of course, far higher than that of developing countries. But leaving aside the problems of political leadership involved in getting our populations voluntarily to accept severe sacrifices in their living standards, or their expected future living standards, on top of those involuntary ones which have recently arrived, there is also the problem of financial responsibility. Our wealth depends on our economic activity, but much more than our own wealth depends on the survival of this activity and the survival of the world monetary system. There must be a limit to which it is responsible for the Community to extend its commitments to advance financial gifts and loans at a time when it is, or it may be, in search of substantial funds itself to finance survival of its own economic activity. I think, therefore, that we must be approaching the moment when we shall have to seek to consolidate and to main

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tain our present levels of assistance rather than to extend them.
I should just like to say something, since the matter has been raised, on the question of food aid. I think there is a fallacy behind the argument of the noble Lord, Lord O'Hagan, on this. I do not see how you can criticise the Community for giving food in aid on the grounds that they had the food to give. If they had not had the food to give, the aid could not have been given. Although it is correct that the long-term solution must be to stimulate the food producing capacity in the developing countries, nevertheless there was at Rome general agreement that for some time food aid will be needed, and therefore it is important for the Community to try to maintain its activity in this field.
The noble Lord, Lord Lloyd of Kilgerran, doubted the efficiency of the Community's system of distribution of food and suggested that perhaps more use might be made of other mechanisms. I have not had an opportunity to check what are the figures for the Community's current distribution in food aid. There are two forms of food aid programme: there is the regular food aid programme, which I think involves something of the order of 1 million tons of wheat and some other products as well, and there is the emergency food aid programme. Of all Community food aid, something under half, I think 45 per cent., is distributed at Community level, so that the Community cannot be without experience already in this field. I know that under their emergency food aid programme they have assisted a number of different countries, certainly Bangladesh in the past; very recently they have established an emergency system to assist Somalia. I know last year they did so in the case of the Sahel, and I know personally that that aid was very much appreciated. Surely it must be right to build up a single centralised system and, if necessary, make that more efficient rather than rely on a number of different national systems.
If noble Lords can bear with me, I should like to say something about how the European Parliament is involved in the Community's development policy and in the Association, because this may be of interest to noble Lords, some others of whom may, I hope, one day find themselves involved. First, there is a
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Parliamentary Committee, the Committee on Development and Co-operation, which meets once every two or three weeks in Brussels. In addition, we currently have a Working Party, meeting rather less frequently, and composed of a small number of members out of this Committee, studying the question of how the Community's overall development policy—that is, beyond the framework of the Association, a matter very much of interest to this country—should be developed. Then within the framework of the Association we have the Joint Committee. This is composed of one representative from each of the African Associated States and an equivalent number from the European Parliament's Development Committee. This Joint Committee currently works three times a year, alternating between Europe and Africa, for what is usually a 3-day session. Then, once a year, immediately following one of the meetings of the Joint Committee, which will have prepared its work, there takes place the Joint Parliamentary Conference which will be attended by between 50 and 60 members of the European Parliament, and again an equivalent number from African States, and these sessions also alternate, like the Joint Committee, between Africa and Europe.
In addition to being a member of the Development Committee and the Working Party, I have had the good fortune to be a member for the last two years of these two institutions of the Association, and from my experience I feel bound to say that, having started from a position of considerable scepticism, I have become convinced of the great value they have for the contacts they provide between working European politicians and their African counterparts. The Joint Committee has been particularly successful in the amicable and frank relationships it has established between the two groups, who have come to know each other well. Institutions like these have become, as I see it, an extremely important means for European Parliamentarians to monitor the consequences of Europe's development policies and to make a contribution towards planning their future direction, and I think that we should think very carefully, in a time of international upheaval, before we dispense with any such instruments of international contact and co-operation as these.

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It would be difficult to adapt these institutions to the greater numbers of the new Association, but I think that Her Majesty's Government should use the influence they have to see that they are continued in the future in as close a form as is practicable to what they now are. These institutions are what I have said they are. They are not a trap of a neo-Colonialist kind which seeks to lure developing countries into the acceptance of situations they wish to be free to protest about. These institutions do not inhibit any member from adopting or expressing any opinion at all, whether inside or outside those meetings. Her Majesty's Government should seek to allay the suspicions which are known to exist among some of the associables with regard to these institutions, and I suggest that they should argue that whereas these may be institutions which have not hitherto been traditional to the British pattern of relationships with Commonwealth countries, nevertheless Her Majesty's Government for their part are now sufficiently satisfied on the evidence they have, evidence based on the unqualified support for these institutions from all who have taken part in them, both Europeans and Africans, as to believe in their value.
To summarise, may I say that whereas I believe the Community's original development policy and its development attitude was often unfairly called into question, nevertheless I think that since the accession of the United Kingdom great strides have been taken towards broadening that policy in the direction that the present Government and the previous Government wanted. Proposals now lie before the Council which would carry Community policy almost to the limit of what could now be within its means. If in the next few months the ACP negotiations are successfully concluded; if there is a sugar agreement; if there is an agreement on the Commission's food aid proposals, or at least some steps are taken towards meeting the Commission's position; if the conditions are fulfilled which would enable another payment to be made under the Cheysson Fund; if a step can be agreed towards establishing a fund for financial and technical assistance outside the framework of Association, something
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very much desired by Her Majesty's Government (and if I may say so in parenthesis, their proposal that this fund should be the same size as the next European Development Fund is probably beyond the financial means of the Community at the present time, although it is a good principle), then I think that we, in this country, shall have very little left to complain about. Indeed we shall have considerable cause for satisfaction in the rapid adaptation of Community policy in the field of development which will have taken place to accommodate our needs, our views, and our historic obligations.
LORD GORE-BOOTH: My Lords, before the noble Lord sits down, may I ask him whether he would like to develop for a moment one policy about which there seemed to be a slight difference between the noble Lord, Lord Lloyd of Kilgerran, and himself? Would he consider in this matter of the organisation of, say, an EEC food programme, that there would be a future in a system by which there was a certain amount of planning jointly in Brussels, and an allocation of functions between members, which would enable the whole thing to get started rather quicker than if it were done either nationally or centrally?
LORD REAY: My Lords, I am not sure that the main criticism of the noble Lord, Lord Lloyd of Kilgerran, was on the speed with which the mechanism was able to respond. I think in the most recent instance of an appeal being made to the Community for aid, the delay has been caused not at all by a failure of the mechanisms of the Commission, but of the Council to arrive at an agreement as to whether it wished to respond and, if so, to what extent. As in most instances of where, and where not, progress is being made in the Community, you will probably find that most delays are caused by the Council and not by any other institution of the Community.
6.21 p.m.
THE EARL OF ONSLOW: My Lords, as has been said already, we must all be very grateful to the noble Lord, Lord O'Hagan for the opportunity to discuss this extremely important subject. I agree with the noble Earl, Lord Cowley, that it is vitally important to us in Europe that the standard of living, health, and

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industry rises in the Third World. First, in a world as rich as ours, it is an appalling affront to our consciences that the Third World should be populated by so many people near to death, so many people actually dying of starvation. Secondly, and perhaps more cynically, a richer Third World will buy more of our goods, in turn raising our own standards of living and improving our own economy.
We have heard a lot of details about the Community's development policies and aid policies. There are two vital aspects of these aid and trade policies that, as yet, have not been mentioned. Not only is it better to give than to receive, but it is also easier. We know from examples how difficult it is in this country to persuade some people to accept their rights under various social security legislation. Yesterday, for instance, I heard a woman who said, "I don't want people in the village to know that I receive cheap butter tokens."
This might sound a slight digression, but, after all, there was a similar reaction by the former Ethiopian authorities to the ghastly drought that took place there. When one becomes a newly independent Power, it is often difficult for the authorities to swallow their pride and admit that things in their own countries are not going as well as they have told their own people and the outside world. Consequent upon that failure to admit that there was a problem in Ethiopia, thousands and possibly hundreds of thousands of people died unnecessarily. How can we prevent this sort of thing happening again? Can the EEC, or Her Majesty's Government, or both, try to get better advance warning of these situations?
Added to that section of the problem is the difficulty of honestly administering aid and investment in most parts of Asia and Africa. On September 6, the Far East Economic Review published a series of articles entitled, "Graft; Almost a Way of Life". Some of these examples are worth quoting, and would be very funny if they were not so debilitating for the countries concerned. With our recent experience in the North-East of England, and the present difficulties of the administration in Hong Kong, we must admit that our standards are not up to the ideal that they should be, and of course the happenings in the United
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States have been very far from edifying. Will the right honourable lady, Mrs. Judith Hart, in her estimable efforts to get the EEC's aid programme increased, please bear in mind this corruption issue, and see what she, or the EEC can do?
Tony Hagan, who is the first director of the United Nations Relief Organisation, observed that in Bangladesh only one in seven tins of relief baby food reached its intended destination, and only one in 13 blankets reached its intended destination. The rest, as the expression goes, "Fell off the back of a lorry on the way". This is really quite intolerable. For myself, I hate giving taxes, or having them given for me by Her Majsty's Government, to provide cream for the fat cats in the underdeveloped world. I should like Her Majesty's Government to give—and it gives me pleasure to say this—aid which will really relieve, and which will really advance the people who so desperately need it.
The National Awami Party rule the Northern frontier province of Pakistan, and to improve Party funds they sell permission to the Pathans to buy arms. Arms licences have been bought so regularly, that one rustic Pathan had his application approved to buy a Sherman tank. The bribe was automatic, and the application was not even read. Further, in Pakistan a job of station master changed hands for up to 300,000 rupees. No genuine tickets were sold for three months, but half-price tickets were sold and bought from obliging ticket clerks who, in turn, paid the station master.
When the charitable organisations know what is going on in the countries concerned they cannot really publish it, for if the person who generously gives, because he is moved by the suffering of the people concerned, thinks that six out of seven tins of baby food will be "flogged" by somebody in Bangladesh as opposed to going to babies who need them, or 12 out of 13 blankets will be "flogged" in Bangladesh as opposed to going to those who need them, then those one out of seven tins of baby food and one out of 13 blankets will not be forthcoming.
LORD GORE-BOOTH: My Lords, just in case the position of charity orgisation may be misunderstood, may I say that the one I am interested in invariably

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administers its own aid in countries of this kind for this reason.
THE EARL OF ONSLOW: My Lords, that is very good to hear, but, as I said, I am quoting from this article which is in an authoritative book. I think the noble Lord will realise that there is some force in what I am trying to say; at least, I hope he does.
LORD LLOYD OF KILGERRAN: My Lords, I hesitate to interrupt the noble Earl, but having met the High Commissioner for Bangladesh last night, and having heard the noble Earl's indication that this corruption is happening in Bangladesh, may I say that the High Commissioner last night denied that such corruption was taking place. No doubt the noble Earl, Lord Onslow, who is dealing with corruption at rather great length, may wish to give examples of corruption in developed countries as well as in developing countries.
THE EARL OF ONSLOW: My Lords, first, I do not think that the noble Lord, Lord Lloyd of Kilgerran, ever hesitates to interrupt me, because he has done it frequently before. Secondly, I think I said that our own position is not as white as it should be. People in Birmingham and the North-East of England have been sent to prison, and there have been cases in the United States. I am not criticising here from a holier than thou point of view; I am trying to put forward a point which I hope concerns a lot of other people. I shall give the article to the noble Lord and then make sure that he gives it back to the Library from where I got it.
In the Sahelian drought area the lorries donated by the British taxpayer are reputed to be owned by one of the local residents who uses them for her own I profit. Perhaps the noble Lord, Lord Goronwy-Roberts, could confirm that point to me. If it is not true then I unreservedly would withdraw the accusation. But it has a terrible ring of truth about it. What relief in this area is getting through on some of these lorries? The driver, perhaps naturally, gives some of the sacks of food to his friends and" relations who are starving and sells a little extra along the way. We cannot possibly blame that man when he sees what is going on in what I believe in Tanzania were called the
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Wah-Benzi tribe, or the tribe who drove Mercedes.
LORD O'HAGAN: My Lords, I do not want to interrupt the noble Lord in his amusing excursions, but could he give some constructive suggestions as to what should be done about the problem to which he has referred, instead of merely dilating for a long time on these horror stories illustrated for the benefit of your Lordships without coming forward with any positive suggestions, in which case I shall have to move that he be no longer heard?
THE EARL OF ONSLOW: Why?—to start with. But do not interrupt me again. The reason why I am producing these details is to ask Her Majesty's Government, and the noble Lord, Lord O'Hagan, whether they have any suggestions to make. What I am saying is that this is the situation and it is one that must be borne in mind. It seems to me something of vital importance.
My Lords, I am acutely aware that this corruption is a horrifyingly difficult problem—I am coming to it now—in countries with long traditions of it, perhaps broken in some cases only by brief intervals of honest colonial rule. If all the money that had stuck to the wrong fingers in the last 20 years had been properly invested in the aid and in the industries of the countries concerned, the situation would be infinitely less depressing than it is at the moment. I ask the Government, and especially the noble Lord, Lord O'Hagan, whether they have any ideas on what can be done about it. I know it is asking far too much for it to be stopped and I know that we do not have it in our power so to do, but let us try to mitigate this problem as much as possible.
LORD O'HAGAN: My Lords, surely the noble Lord feels himself to be under an obligation, as he has been making these allegations, to come forward with some constructive solutions. Does he really think it fair to make these allegations and criticisms, which may or may not be true—no doubt some are true and I am sure that he has looked into the problem thoroughly—without coming forward himself with proposals as to what should be done?
THE EARL OF ONSLOW: Yes, my Lords.
6.32 p.m.
THE PARLIAMENTARY UNDERSECRETARY OF STATE, FOREIGN AND COMMONWEALTH OFFICE (LORD GORONWY-ROBERTS): My Lords, I hope that my own intervention will be as brief and as concise as the last one. We must all feel grateful to my noble friend Lord O'Hagan for raising this important matter and to all those noble Lords who have contributed to this remarkably interesting and informative debate. This Motion is being debated at an important moment in the history of the Community's relations with the developing world. The Motion implies that a good deal is happening and this is very true. I hope to inform your Lordships in some fair detail of what is actually going on. I cannot of course provide a complete picture of what is likely to emerge from all this activity, all these changes that the noble Lord, Lord O'Hagan, described to us in opening the debate.
The picture will be somewhat clearer in the next month or two and no doubt this continuing debate will resurface at a time when it is clearer to all of us what are the practical implications of these changes. May I deal with the more important points raised by various noble Lords during the debate by grouping my remarks under three headings. First, the relations between the EEC and the 45 African, Caribbean and Pacific countries which are negotiating association under Protocol 22 of the Treaty of Association. This heading includes the question of sugar. Secondly, the Community's relations with developing countries outside the circle of association. A number of noble Lords addressed themselves almost exclusively to the future relationship with the non-associables. Under this heading I shall be examining, I hope, not only the Community's generalised preference scheme and worldwide aid policy, but also the details of the Community's relations with Commonwealth Asian countries, a point specifically raised by more than one noble Lord.
Finally, I shall be looking briefly at the Community's action in various multilateral contexts, such as GATT, the multilateral trade negotiations and the World
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Food Council. First, the Protocol 22 negotiations. Noble Lords will recall that at the ministerial conference in Kingston last July, the EEC and the African, Caribbean and Pacific countries agreed that negotiations under Protocol 22 should be concluded substantially by the end of this month. This is going to be a rather difficult target but we are making every effort to achieve this result. After the Council on November 12, there remained one or two issues on which there is still no agreement within the Community. We hope that these will be cleared up in time for a further ministerial level conference with the EEC countries at which, we trust, final agreement will be reached.
Her Majesty's Government continue to believe that the successful conclusion of the Protocol 22 negotiations offers the best chance of meeting the interests of the developing countries concerned, including the 22 Commonwealth countries, and we are pressing for their conclusion on a satisfactory basis. Although it is too early to give noble Lords details of the arrangements negotiated, I am glad to say that the Community has now accepted that the developing countries concerned will not be required to open their markets to the Community on a preferential basis in return for the preference which they enjoy in the Community market. This was one of the conditions which my right honourable friend the Foreign and Commonwealth Secretary attached to the Protocol 22 negotiations during his renegotiation statement in Luxembourg on June 4. This I think disposes of the point which one noble Lord made about a difference of view between members of the Community in regard to non-reciprocity. It is a fact that there was a difference between Britain and France and some other member States on the question of reciprocity. This was so, but the Community agreed at Kingston that the EEC will not expect reciprocity from the ACP countries. I am sure that the noble Lord who raised this point will be as delighted as I that this is Community policy.
This brings me to the question of future arrangements for imports of sugar from the developing Commonwealth, also a matter that has been dealt with in the Protocol 22 negotiations. As your Lordships' House are aware, the Government

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are determined to secure access for 1·4 million tons of Commonwealth sugar at a fair price and on a continuing basis. As I indicated in my Statement to the House on November 13, the Community has already agreed that access should be for 1·4 million tons of sugar. The great bulk of this—practically all of it—will be exported in accordance with traditional patterns of trade, that is, to be refined in this country. A further meeting of the Council of Agriculture Ministers took place in Brussels on November 18 and 19—that is to say, yesterday and the day before—and my right honourable friend the Minister of Agriculture, Fisheries and Food hopes to make a Statement on this in another place shortly. No doubt that Statement will be repeated in your Lordships' House. I therefore cannot anticipate the content of what is bound to be a fairly comprehensive Statement as a result of the discussions which have been going on this week in Brussels. We hope that the negotiations can be concluded as soon as possible so that the supplying countries may have a clearer idea of their future position in the Community market, and so that one of the uncertainties surrounding sugar supplies to the United Kingdom can be cleared up, this being an advantage both to our housewives and to an important processing industry in this country.
Since we are talking of changes in the Community's policy towards the developing world, perhaps I should take the opportunity to mention one significant aspect of the Protocol 22 negotiations which is sometimes overlooked. It has been mentioned in this debate, and I am very glad that it has. It is the participation in the negotiations of all the independent black African States. The point has been well made not only that this is politically important but that it will help to overcome the artificial divisions in Africa created by differing colonial histories, and will also contribute to a more rational economic development of that continent. I will not pursue that point, but will say that I respond very warmly to the fact that it has been made in this debate. It is of great importance, not only to Africa but to the Community and, I think, to the rest of the world as a hopeful sign of regional unity which contributes to a larger Community.
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I now turn to the question of the Community's relations with the rest of the developing world; that is, the non-associables. At this point I should like to remind your Lordships of our renegotiation objectives. Broadly, these are that non-associable developing countries should enjoy better access to the Community market and that financial and technical aid for the associated developing countries should be balanced by similar Community aid for non-associated countries allocated on the basis of their needs. I am very glad to say that there is evidence of change also in this area. A number of noble Lords pinpointed this: that as we expand the practice and the psychology of the Community in this field of endeavour we should try increasingly to get a balance between our treatment of the associated countries and of those outside the circle of association. There is evidence that there is steady change in this area.
On the aid side, I, too, would pay warm tribute to the efforts of my right honourable friend the Minister for Overseas Development. Thanks to her efforts, the EEC has now agreed, by the resolution of July 16, the principle of financial and technical aid for the benefit of developing countries outside the circle of association. There is of course some way to go to ensure that this is translated into concrete financial terms. We have asked—and this is the answer to some noble Lords who have pressed this point—for a broad 50–50 division. This is not dogmatism: it is a good basis on which to discuss the broad division of aid and of assistance as between two broad groups of developing countries. I think it was the noble Earl, Lord Cowley, who raised the question of the conditional nature of the EEC offer of 500 million dollars to the United Nations Special Fund. The answer is that the conditions imposed by the Community have been effective in producing contributions by other developed countries and oil-producing countries. I think the noble Earl was with me in this, that he seeks to illuminate the point, a useful point, that by making this condition, not in a hostile way but in a bargaining way, the effect has been, and probably will be—I say this hopefully but with some confidence—that a great deal more money than this

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sum will be attracted from sources possibly rather richer than this.
Further on the aid point, the Community has also agreed to the release of 150 million dollars of the funds thus conditionally offered towards the United Nations emergency measures in favour of developing countries—those most affected, as we have heard this afternoon once more, by the rise in oil and other raw material prices. There is now considerable urgency that this money should begin to flow, and we are pressing for this. I will not detain your Lordships by a detailed statement of how the first tranche has been made available, and in what way we are endeavouring to speed its practical application as effectively as possible, but there is now a sense of urgency about the need to put this money to effective use. At our request the Commission has now produced a Paper on possible future developments in the Community's aid policy. In it, the Commission recognises the overwhelming need for a Community aid programme of the kind for which we are pressing—a balanced programme resting on the principle of need. We hope that on the basis of this Paper and the Community's agreement to the principle of such aid, the Community will take decisions in the near future which will meet our aim of a more balanced Community aid effort.
On the trade side, progress has been made towards improving the situation for the non-associated developing countries, especially those in Asia. A trade agreement between the Community and India came into force on April 1, 1974, and the Community recently opened negotiations with Pakistan, Bangladesh and Sri Lanka with a view to concluding trade arrangements with these countries. I have a very long list of specific commodities here which perhaps I might, possibly in response to a Question for Written Answer, circulate for the information of the House. I think it would detain the House unduly on matters of detail if I attempted to give this information specifically to-day. It is too early to comment in any detail on these arrangements, but I am hopeful that it will not be too long before the negotiations are brought to a successful conclusion. That is in response to the fairly general feeling expressed in this debate that not only should we press forward
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with meaningful agreements with countries like India but should also base similar agreements on our experience in negotiating that particular agreement. This is in fact how the Community, and certainly we ourselves, see the future in that part of the world.
It is of course in the context of the Generalised Scheme of Preferences—GSP—that the main scope lies for improving the situation for those developing countries which have not been offered association. At the Council of Foreign Ministers meeting on November 12, general agreement was reached on the scheme for 1975. Substantial improvements were secured at the meeting, many of which will be of great benefit to the developing countries in Asia, particularly those in the Commonwealth. And we must not forget Latin America. Here again, the value of a debate like this is that it brings up very important points which sometimes tend to be overlooked. I have had the feeling for some years that we and the other democratic countries of Europe have not paid as much attention as we should have to Latin America. The Generalised Preference Scheme is, by definition, generalised, universal and intended to benefit virtually all developing countries, and we are determined that the improvement should not end here. The GSP is reviewed every year and at subsequent reviews we shall be pressing very hard for a further significant improvement with a view to the progressive abolition of the various restrictions over several years—a policy which will delight the heart of the noble Lord who speaks on these matters on behalf of the Liberal and, presumably, the expanding free trade position.
My Lords, it is largely at our instance that the Community has agreed that there should be a thorough-going discussion in the Council on the general strategy for the development of the Community's GSP. This is the liberalising process. Admittedly it is as yet within a regional context but it is a large and, I would say, an expanding context and to that extent very warmly to be welcomed and promoted. It is expected that this discussion will take place early in the New Year and we also wish to use it to end particular discriminations which still come up within the generally beneficent

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trend of liberalisation of generalised preferences. I refer in particular to Hong Kong. It is true that this year we have been able to get a very substantial concession in regard to footwear, but we are disappointed that we were not able to get a concession in regard to textiles. However, in the New Year the discussions will provide us with an opportunity to argue strongly for the end of discrimination of that sort so that, in 1976 if not in 1975, the arrangements will be so changed as to get rid of it finally.
The Community is also playing a full part in attempts to solve the problems of developing countries on a multilateral basis. I refer to the GATT, to the multilateral trade negotiations which are due to begin in Geneva in the New Year, and which will provide a unique opportunity for combating pressures which are growing up in world trade. These are pressures which would particularly harm the interests of developing countries. The Community's mandate for these negotiations is in preparation, but one of the sections of the draft mandate is specifically concerned with the problems of developing countries as a whole, not just those countries with which the Community has had special relations.
Finally, I turn to the points made by a number of noble Lords this afternoon about the World Food Conference and food aid. I am glad to say that the Community as a whole has shown a positive approach to the World Food Conference and has agreed to organise its future food aid in a manner better suited to the requirements of the recipients—a point which the noble Lord, Lord Lloyd of Kilgerran, put with great force and cogency. Member States also agreed that the only viable long-term solution to world food problems is to increase production in developing countries. There is absolutely no doubt that we need effective emergency programmes and procedures to go with them, though I would commend what the noble Lord, Lord Gore-Booth, had to say on this score from his very great experience. I am sure that the noble Lord, Lord Lloyd, would wish to reflect on what the noble Lord, Lord Gore-Booth, had to say about this.
The fact is that a variety of methods exist of moving food and medicines to
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where they need to go. One must not be too technically dogmatic about this. One could go on instancing situations in which immediate bilateral national efforts and arrangements were effective. Then there are situations in which the United Nations method, which is a proven one, is best, and of course it is undoubtedly a fact that the Community has something to offer in regard to machinery as well as resources in this matter. However, this is not a matter about which to be unduly dogmatic. We must study all these methods of delivery in emergencies and, as I think, stand ready to approve and use whichever is best in the situation.
My Lords, the Member States have indeed shown a really new awareness both of the immediate urgency of the situation in many parts of the world—particularly the countries which were mentioned by noble Lords who referred to food aid—and also to the need for a long-term policy of consistent production, of conservation, of storage, and of strategic provision, so as to make use of glut, when it occurs, as a solution for famine. I am sure that the noble Lord, Lord O'Hagan, would join me in delighting in the fact that the United States in particular has used its own abundance very generously and very effectively to relieve real suffering in other parts of the world. One must be thankful that glut does occur, especially in years when we are without its advantages and, indeed, are trying to find the resources to relieve suffering in a situation where there is a shortage of production.
My Lords, there is much that one could say and many points which I have not been able to touch on. For instance, there is the point about the emphasis placed by the noble Lord, Lord Gore-Booth, on technical assistance. In all this talk of aid and emergency aid, particularly in regard to food, one must always remember that the long-term key to the situation must lie in technical assistance which enables chronically underprivileged and suffering countries to help themselves. We must help them to help themselves and also of course we must move in without any question of expecting them to do very much when there is a real crisis such as that which some countries are suffering at the moment.
EARL COWLEY: My Lords, I wonder whether the noble Lord could possibly answer the question of which I gave him prior notice about Britain's contribution to the EDF? I think this is rather important.
LORD GORONWY-ROBERTS: Yes, indeed, my Lords. I was casting about for an opportunity to do precisely this: as a result of the relief which the noble Earl has afforded me by his intervention, I have been able to put my finger on the holy writ. It is too early to say how large the next EDF will be. The Community's offer will be decided by the Council, but a number of States agree that the Fund must be large enough to provide, first, advantages for the old associates which are comparable to what they enjoyed in the past; and, secondly, equal treatment for new associates, including of course the Commonwealth countries.
As to how much we can contribute as a country, bearing in mind one or two references to our, we hope, temporary preoccupations with our own economic situation, as voiced by, for instance, the noble Lord, Lord Reay, I have this to say. Britain's contribution to Community aid, including the EDF, will be found from the aid programme. We believe that it will be possible to meet this contribution out of a rising aid budget without cutting back existing bilateral aid programmes. I think the noble Lord will perhaps be satisfied, at least for the moment, with that statement. He may wish to come back to this matter. I shall certainly want to watch it very closely.
I would not wish to see bilateral aid being trimmed in order to show that an extra amount was being made available under the EDF. That would be misleading and unfair to countries which are expecting more rather than less from the richer countries. However, this country must do what it can, always bearing in mind that its own strength and potential must be safeguarded, so that it is enabled, both as a country in its own right and as a member State of a wider Community, increasingly to assist others less well off.
I leave that point there and will conclude very quickly with references to the two final speeches we heard. I agree
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with the noble Lord, Lord Rcay, that compassion must be combined with common sense. There is no doubt about the will of the people and the Government of this country to do everything possible in this field. We have heard from more than one noble Lord that it is often a question of procedures and machinery, as well as of resources.
This brings me to the final speech that we heard—a speech to which I listened with very grave attention—in which the noble Earl, Lord Onslow, referred to the undoubted fact that in this of all fields there is far too much corruption. Those of us who recall the end of the Second World War and what happened then in Central Europe, not only with food but with medical supplies and the deprivation of children, are deeply concerned that there should be even a minimal amount of "wide boy activities" when millions of people, including children, are starving to death. It is right that we should be reminded of that kind of consideration.
It is also right, as the noble Lord, Lord O'Hagan, said, that when there are instances of this sort they should be brought to the attention of Her Majesty's Government, and I personally should be very glad to look at any evidence of this kind of misapplication of aid, especially concerning food and medical supplies. It is also right that not only the noble Earl but also the rest of us should be constantly thinking of constructive ways in which this kind of activity can be kept to a minimum—I do not suppose it can ever be stamped out completely—and how positive action of a better kind can overwhelm it.
My Lords, I welcome this debate. I have taken note of everything that has been said. There were a number of points with which I should have liked to deal in addition to the ones I have covered. But I think, on the whole, that the main points of concern and suggestion made during the debate have been covered by what I have said. As I said at the beginning, this is a continuing debate because this is a continuing problem and opportunity.
7.6 p.m.
LORD O'HAGAN: My Lords, I should like to thank all those who have spoken in this debate for their very realistic

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suggestions and contributions. Sometimes in debates of this kind we stray too far into the stratosphere without coming down to earth, but certain noble Lords ensured that we stayed very close to the ground and I believe that was well worth doing.
I think all speakers have shown that the merging of traditions of the new member States with their Third World responsibility, with the traditions of the old member States, with their responsibility to the Third World, can be a constructive process and of benefit to all countries, both those which are developing and those which have developed. Perhaps the economic centre of gravity has shifted now, as several speakers have reminded us, but this does not stop people in this country continuing to be aware of their responsibilities to the wider world, and this has been given a new opportunity of expressing itself through our membership of the Community. My Lords, I beg leave to withdraw my Motion for Papers.
Motion for Papers, by leave, withdrawn.

FOOD SUBSIDIES (TEA) (No. 2) ORDER 1974
7.7 p.m.
LORD JACQUES LORD JACQUES rose to move, That the Food Subsidies (Tea) (No. 2) Order 1974, laid before the House on November 19, be approved. The noble Lord said: My Lords, I beg to move that the Food Subsidies (Tea) (No. 2) Order 1974 be approved. I think I should first explain why it is the No. 2 Order. There was an unfortunate misunderstanding between the Department and the House of Commons officials as to the method of counting the 28 days within which the Order had to be approved by Parliament. The Department had discussed with the House officials the position of this and other Orders which were made before the Dissolution, and the Department had incorrectly concluded that it was not necessary to count the period between October 22, when Members met to be sworn in and to elect a Speaker, and October 29, when Her Majesty the Queen opened the new Parliament. Late on Monday, November 18, the general office drew attention to this mistake and pointed out that the Order had ceased to have effect on November 16. Therefore, there was a short
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gap between November 16 and midnight on November 18, when the No. 2 Order came into operation. I apologise for this mistake and can assure the House that all possible steps to prevent a repetition have been taken.
The purpose of the Order is to add tea to the list of subsidised foods; that is to say, to permit the payment of subsidies in respect of tea under Section 1 of the Prices Act 1974. The amount of subsidy is to be 8p per pound or 2p per quarter pound. The cost to the Exchequer will be £15 million in the current year and £29 million in a full year. The effect upon the food index will be 0·4 per cent., the effect upon the retail price index will be 0·1 per cent. There are a number of questions that have to be examined before any food is added to the subsidised list. Since the primary object of the food subsidies is not only to restrict the rise in food prices but to direct any help from that to the lower income groups, it is necessary to consider as a first question: who buys the commodity? Is it one that figures prominently in the budget of the lower income groups? In the case of tea, the position is abundantly clear. Pensioners, for example, in 1973 purchased 3½ ounces per head per week; the lower income groups generally purchased three ounces per head per week, whereas the national average was only two ounces per head per week. In the case of tea, a bigger percentage of the subsidy will go to the lower income groups than for any other subsidised food. Also, the saving to those in the lowest income groups will be twice that of those in the highest income groups Tea therefore fully satisfies the first question.
The second question that has to be examined is: is it possible to ensure that the subsidy will, in fact, reach the consumer? There are many foods which on other counts it may be desirable to subsidise, but which on this count cannot be subsidised. There are many perishable foods which are of varying quality and it is virtually impossible, because of frequent price changes, to ensure that the consumer will get the full benefit of any subsidy. Tea is not in that category. There are few importers and packers who handle tea. Price control of tea, because of the way in which the market is organised, is relatively easy and it therefore

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follows that it is possible to subsidise tea on a fully cost-effective basis. It therefore satisfies under that heading.
The third question that has to be asked is: what is the cost of administration? Because there are only few packers and importers, and because of the way in which the tea market is organised, the cost of administration will be the least of all the subsidised foods. It will, in fact, not exceed one penny for every £100 distributed by way of subsidy. It therefore fulfils that requirement.
We come now to what I think is the final requirement, but which, economically, is the most important one: what is likely to be the effect on demand? Is there likely to be a shortage? That is obviously an important question. Tea has a very inelastic demand; that is to say, price has very little effect upon the demand. Certainly the movement of price equal to that of the subsidy has little or no effect on the demand for tea, and therefore we would not expect that the subsidy would affect the demand. In addition, we have to bear in mind that over the last few years there has been a movement away from tea to coffee, which is a more expensive beverage, and there is no reason for believing that this subsidy will prevent that movement. It will continue.
In the last few years, production of tea has shown a greater growth than the demand for tea and prices have been relatively stable, but in the past twelve months that position suddenly changed. During the past twelve months the auction prices of tea increased by 45 per cent., largely because of decline in production and, to some extent, because of increased demand in the United States and the Middle East. There is every indication that higher prices will stimulate production, and at the present time there is no difficulty in obtaining normal supplies. None is anticipated, but the Government will of course keep a close watch on the market. I hope that I have said sufficient to convince the House that it should accept this Order, and I will do whatever I can to answer questions that may arise. My Lords, I beg to move.
Moved, That the Food Subsidies (Tea) (No. 2) Order 1974, laid before the House on November 19, be approved.—(Lord Jacques.)
7.12 p.m.
EARL FERRERS: My Lords, those of us who are left here will be most grateful to the noble Lord, Lord Jacques, for having introduced this Order and for having explained what it is going to do. I was grateful to him for explaining how it becomes a No. 2 Order, and was slightly fascinated by the fact that apparently the officials in the Ministry of Agriculture and the officials of another place could not add up one to twenty-eight and come to the same conclusion. However, at least he explained how the error came about.
The noble Lord has introduced this Order and we would not dream of opposing it, but I am bound to tell the noble Lord that I believe it to be entirely misdirected in its efforts. I believe food subsidies to be wrong in principle; I believe them to be an extravagant use of public funds the results of which are not the results which the noble Lord's Government anticipate. I know that this is a subject upon which we on this side of the House and noble Lords opposite have differing views. We are now spending some £500 million a year in food subsidies, and the noble Lord brought along an Order this evening explaining that £29 million is to be used on subsidising tea. If we are to spend £29 million, I do not believe that this is the correct way to do so, nor do I believe that it is right to give a blanket subsidy on tea covering everyone, rich and poor alike, irrespective of circumstances and of their requirements.
The noble Lord said that this Order helped the old-age pensioner. I am all for helping old-age pensioners, but to give a subsidy like this to people who are not old-age pensioners in order to help those who are seems a rather fallacious way of proceeding. The noble Lord explained that 3½ oz. of tea was the average used by old-age pensioners. That means that this Order will give a subsidy of 2p per week or less to old-age pensioners. If that is what the noble Lord wishes to do, I cannot believe that this is the right way to do it and that there should be an expenditure of £29 million to achieve it.
The point which I should like to ask the noble Lord about is this. As I understood it, he said that the cost of living was going down by 0·1 per cent. I understood it was going down by 0·01

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per cent. Perhaps the noble Lord when he replies would let me know whether that was a slip of the tongue or is a fact. My understanding is that the effect of the subsidy will be to reduce the cost of living by one-hundredth of 1 per cent., and that is a very small sum for the expenditure of £29 million. It is said that tea is the typical Englishman's drink. So it is, but the argument which the noble Lord put forward was that people are moving away from tea to coffee, which is a more expensive drink. If that is so, why is it, therefore, necessary to subsidise tea? This seems extraordinary. When you think that the tea is being subsidised in order to make it cheaper to drink, is it not an extraordinary fact that the cost of the tea is the smallest item in the cost of a cup of tea? Both the sugar and milk are more expensive elements than the cost of the tea element. Why therefore is it necessary to subsidise it?
In fact, one can still buy tea at 10p for a quarter of a pound, and that allows for 50 cups of tea which makes five cups of tea for a penny. I find it extraordinary to think that, at this time of national and economic crisis, the Government can come along and say, "We are going to spend £29 million on subsidising tea" which is a traditional drink and also a cheap drink. I accept the noble Lord's premise that if he wishes to help old aged pensioners this is one way of doing it. With the greatest respect, however, the right way to do it is to help them directly and not subsidise food across the board in this manner. Having said that, I am grateful to the noble Lord for having introduced this Order and explaining it to us.
LORD JACQUES: My Lords, may I confirm the fact that the effect upon the retail price index is 01 per cent. There is not as much difference between the Government and the Opposition as it would appear. So far as we are concerned, subsidies are a temporary measure: first, to prevent prices from rising as fast as they otherwise would and, secondly, in so far as is possible while doing that, to direct as much subsidy as possible to those with lower incomes. The decisions announced recently by the Chancellor of the Exchequer include changes in family allowances, pensions, et cetera. They are part of a long-term programme for controlling inflation and improving the situation of those who are in need. When circumstances make it possible, the Government will be ready to run down the subsidy programme, but this would have to be done in such a gradual way so as to avoid a sharp rise in food prices. That attitude is not much different from the attitude of the Party opposite, who stated in their programme at the recent Election that they would not interfere with the present subsidies in the present circumstances. I suggest there is not as much disagreement as the noble Earl suggests.
On Question, Motion agreed to.

HOUSE OF LORDS OFFICES
First Report from the Select Committee made, and to be printed.
House adjourned at twenty-three minutes past seven o'clock.