Sitting of 11 February 1975

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

PRIVATE BUSINESS
BRITISH RAILWAYS (No. 2) BILL (By Order)
GREATER LONDON COUNCIL (GENERAL POWERS) BILL (By Order)
LONDON TRANSPORT BILL (By Order)
LONDON TRANSPORT (ADDITIONAL POWERS) BILL (By Order)
Orders for Second Reading read.
To be read a Second time upon Tuesday next.

PRIVATE BUSINESS
  PIER AND HARBOUR PROVISIONAL ORDER (FISHGUARD AND GOODWICK HARBOUR) BILL
  As amended, considered; to be read the Third time tomorrow.
ORAL ANSWERS TO QUESTIONS
  DEFENCE

    Service Establishments (Closure)
    Mr. Tebbitasked the Secretary of State for Defence when he now expects to be able to list the Service establishments to be closed and the individuals to lose their jobs as a result of the implementation of his defence cuts.
    The Secretary of State for Defence (Mr. Roy Mason): My hon. Friend the Under-Secretary of State for Defence for the Royal Air Force will be making an announcement, in answer to a later Question, about the 12 RAF stations which it is proposed to close. It is too early to say whether any other Service establishments will be closed or to give details of the civilian and Service manpower reductions.
    Mr. Tebbit: Does the Secretary of State accept that that is a disappointing reply to those who will be affected? What have they done wrong? They have never been on strike; they have never sat in. Why do they not get the same consideration as the workers at Meriden or Ebbw Vale? Are they not members of the social contract? Are they not useful? Does the right hon. Gentleman not have the muscle in Cabinet that the Secretary of State for Industry has?
    Mr. Mason: I am sorry that the hon. Gentleman takes such a pessimistic view. All the workers and firm involved were informed on 3rd December, when I made my statement, that there would be proper consultation and that we hoped that the redundancies which would flow from the firms which may be affected, or the Service establishments, would be manageable in the time scale that I proposed.
    Mr. Goldingasked the Secretary of State for Defence if he will make it his policy to delay closures of defence establishments until alternative work has been found for the workers involved.
    Mr. Mason: I regret that it will not be possible to delay closures until alternative work has been found for the employees if the Government are to meet their commitment to make substantial reductions in

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    defence expenditure. However, I am fully conscious of the social implications of closing establishments. I am in close contact with my right hon. Friends the Secretary of State for Employment and the Secretary of State for Industry on this aspect of the defence review, and we shall do everything possible to alleviate the problem.
    Mr. Golding: Is the Minister aware that his answer will give great disappointment to many people in the localities, and particularly to union branches? Is he aware that the Government should treat full employment and high employment as a priority greater than that of cutting defence expenditure?
    Mr. Mason: I fully recognise that point of view, but, because of the grave economic circumstances the Government faced, we had no alternative but to review defence expenditure. In making those cuts, we recognised that they would affect jobs and job prospects. I hope that, as a result of our planned time scale of cutbacks in defence expenditure, the effect on jobs will be manageable.
    Mr. Younger: Does the Secretary of State realise that he is putting himself in a very unfavourable light? Will he tell us why, apparently, it is right to delay closures in the steel industry, where people's jobs are threatened, but wrong to delay closure of defence establishments where, equally, many people's jobs are affected and where there is little other employment for them? Will he look again at that?
    Mr. Mason: Yes, and I am hopeful. Many people employed in defence establishments are skilled craftsmen. They will be more able to find work in industries than will some of the workers to whom the hon. Gentleman has referred. I think our time scale is right. I hope we shall be able to manage it without too many redundancies.
    Miss Fookes: What is the point of cutting Government expenditure on defence while increasing it in paying out unemployment benefit?
    Mr. Mason: I think the small expenditure on unemployment benefit will be marginal in this context. However, it is essential to be able to release resources or investments for the export drive and
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    also to release some of the skills from these industries to take up more productive work.

    Recruits (Cadet Forces)
    Mr. Whiteheadasked the Secretary of State for Defence what proportion of recruits to the Royal Navy, Army and Royal Air Force have been members of their respective cadet forces.
    The Under-Secretary of State for Defence for the Royal Air Force (Mr. Brynmor John): Taking the last three years, the cadet forces provided at least 25 per cent. of all entrants to the Royal Navy and Royal Marines, 19 per cent. of entrants to the Army and 25 per cent. of those to the Royal Air Force.
    Mr. Whitehead: That is a considerable proportion of the recruits for all three Services. Will my hon. Friend tell the House what proportion of subsidy, in terms of government support, is involved, respectively, for the State and the private schools concerned?
    Mr. John: The total cost of the cadet force, which goes rather wider than the schools, is just over £10 million. Not only does it provide a recruiting base—although I would say that we do not primarily regard it as being for that purpose; it demonstrates the value of a Service career to the youth of this country.
    Mr. Peter Walker: Is the hon. Gentleman aware that the Opposition welcome the very good figures of recruitment, but urge him to resist any suggestions by his hon. Friends that this vital work should be discontinued?
    Mr. John: There has not been any suggestion that this vital work should be discontinued. I remind the right hon. Gentleman that the value of cadet forces goes rather wider than the questions which have recently been raised.
    Mr. Biggs-Davison: I agree with the hon. Gentleman that the combined cadet forces are good not only for recruiting but in themselves. Will the Government do everything possible to encourage the formation of cadet units in State schools?
    Mr. John: The latest figures show that LEA schools provide one-third of the CCFs—about 90 out of 269.

    Vosper-Thorneycroft (Southampton)
    Mr. R. C. Mitchellasked the Secretary of State for Defence if he can yet estimate what effect the recent defence review will have on the naval construction work undertaken at Vosper-Thorneycroft yards in Southampton.
    The Under-Secretary of State for Defence for the Royal Navy (Mr. Frank Judd): Consultations about the defence review are taking place with the warship-building firms, including Vosper-Thorneycroft, but it is still too early to say what the effect of the proposed reduction in planned new ship construction would be for individual shipbuilders. I assure my hon. Friend that in arriving at final decisions the Government will take full account of industrial and employment considerations.
    Mr. Mitchell: I thank my hon. Friend for that encouraging reply. If he took the advice of some of his hon. Friends and made a drastic cut of £1,000 million a year in defence expenditure, as has been suggested, what would be the effect on naval construction?
    Mr. Judd: Obviously considerable.

    RAF Civilian Employees
    Mr. Tomlinsonasked the Secretary of State for Defence what number of civilians are employed by the Royal Air Force in development areas.
    Mr. John: There are about 10,750 civilians currently employed by the Royal Air Force in development areas, which represents about 40 per cent. of the civilian work force on Royal Air Force stations.
    Mr. Tomlinson: I am grateful to my hon. Friend for that reply. When he is looking at particular areas where defence expenditure cuts should fall, will he take into account the employment problems of development areas and make sure that as far as possible employment in those areas is protected?
    Mr. John: I assure my hon. Friend that the regional aspect of the defence review is an important consideration. However, we must bear in mind that in terms of achieving reductions in defence expenditure it is not the only consideration.
    Mr. Nicholas Edwards: Can any reliance be placed on the figures given by the Minister? In view of the information given by his hon. Friend the Minister of State in a Written Answer on 5th February that the Royal Air Force at Brawdy is not an establishment employing more than 250 civilians and Service men, will he state who is employing the 300 or more civilians and the 1,200 or so people dressed in Royal Air Force or United States military uniform who appear to be operating there, flying Hunter jets and carrying out other noisy military occupations?
    Mr. John: The hon. Gentleman can have no doubt about the consideration which the people in the area of Brawdy have received as a result of the opening up of this station.

    Firth of Clyde (Accident Hazards)
    Dr. Brayasked the Secretary of State for Defence, in view of the proximity of the torpedo testing range in Loch Long, the munitions quay serving Glen Douglas, the BP super tanker terminal at Finnart, the British Polaris base at Coulport, the US Polaris base at Holy Loch, and the British nuclear submarine base at Faslane, what analysis he has made of the compounding of the associated risks; and who is responsible for co-ordination following any major nuclear or oil accidents in the Firth of Clyde.
    Mr. Judd: Full account was taken of safety considerations in the siting of these establishments. The chances of a public hazard arising at any of them is extremely remote, and there is no risk of an accident at one resulting in a further accident at any of the others.
    In the highly unlikely event of a naval nuclear incident in the Firth of Clyde, the Commodore of the Royal Navy base at Faslane would co-ordinate action.
    Primary responsibility for dealing with oil spillages rests with the Department of Trade the local authorities, the Ministry of Defence, the Clyde Ports Authority or the oil industry, according to where the spill occurs; co-ordination is achieved by joint contingency plans which exist to ensure that any major spillage is combated as quickly and effectively as possible.
    Dr. Bray: Is my hon. Friend aware that it is rubbish to say that there is no

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    compounding of risk? Will he say why no combined exercises have been carried out to test the warning system and safety measures?
    Mr. Judd: The establishments were deliberately sited to ensure that even in the most unlikely event of an accident there would be no effect on large centres of population. The chances of a particular location being affected by accidents occurring at more than one establishment are exceedingly remote. I am personally completely confident of the arrangements that exist.

    Engineering Establishments
    Mr Michael Spicerasked the Secretary of State for Defence what savings to public funds he hopes to achieve through his proposals to reorganise and move SRDE Mudeford to Malvern and RRE Pershore and part of Malvern to Farnborough and Bedford.
    The Minister of State for Defence (Mr. William Rodgers): I have nothing to add to the answer I gave the hon. Member for Christchurch and Lymington (Mr. Adley) on Wednesday 5th February.—[Vol. 885, c. 523–4.]
    Mr. Spicer: I thank the Minister for that not very informative answer and for the attention he has paid to this matter on a number of occasions. Did I understand him correctly to say that there were savings of £1·5 million? What will be the costs of this unpopular game of military musical chairs? As I understand it, the latest published figures amount to about £1·5 million. Other people say the figure is £4·5 million. Does he agree that the net benefits of this exercise do not seem to be very considerable?
    Mr. Rodgers: I fully understand the hon. Gentleman's proper concern with the personal and human problems which inevitably rise from this rationalisation. These are the figures for which he has asked. The investment we have in mind arising from this is about £5·5 million, and the annual benefit is about £1·6 million. I think that that is a substantial saving, and is of the sort that we should seek to achieve.
    Mr. Adley: Does the Minister accept that social costs are involved in these propositions, and that if those moves were recommended in respect of organisa-
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    tions which are the responsibility of the Secretary of State for Industry, the Labour Party would never allow them to take place? Is he aware that in my constituency there is total opposition to this merry-go-round arrangement? Will he have a final think before he takes the step which will deprive my constituency of many jobs?
    Mr. Rodgers: Changes always involve a degree of social cost. That is unfortunate. The original proposals for stage one of the rationalisation plan were made in October 1972 and the date for the final implementation is approximately 1979. That is a long period. There is no prospect of a change of policy now. I hope that we shall find a solution to these real personal problems.

    Polaris (Replacement Contracts)
    Mr. Cryerasked the Secretary of State for Defence if he will end all contracts for replacement nuclear weapons for British Polaris submarines.
    Mr. Mason: I have nothing to add to the Written Answer I gave to my hon. Friend on 14th January, and those which my hon. Friend the Minister of State for Defence gave in December to Questions by the hon. Member for Tynemouth (Mr. Trotter).
    Mr. Cryer: Will my right hon. Friend assure the House that his answer does not represent a breach of Labour Party policy, in that these new warheads are not a new generation of nuclear weapons? Does he accept that the cancellation of these contracts will save up to £200 million, which will benefit our balance of payments deficit, and that it will have no adverse effects on employment since these contracts are with the Lockheed Corporation of America?
    Mr. Mason: I do not know from where my hon. Friend obtains his figures. I assure the House that we are not embarking upon a new generation of nuclear missiles. That is precisely what the 1973 programme asked us not to do.
    Mr. Frank Allaun: I have a little doubt about the difference between the term "new generation" and "updating". Does not the Minister think that Britain's contribution and encouragement to nonproliferation is that we should not update Polaris missiles or warheads?
    Mr. Mason: I am interested in the language my hon. Friend uses. Once again I give him the assurance which I have given the House on many occasions. We are not purchasing Poseidon. We are not MIRV-ing the warheads. We are not embarking upon a new generation of strategic missiles. But we are maintaining the effectiveness of the present generation.
    Mr. Scott-Hopkins: By far the most important consideration is that our defence should be adequate and credible. If the Secretary of State has to make his left wing unhappy in the interests of keeping the defence of this country viable and credible, I hope that he will take the necessary action.
    Mr. Mason: We respect points of view, whether expressed by Government or Opposition Members, but however sympathetic we are, we must assess the facts first. I put the facts on record in my initial reply. I hope that the hon. Gentleman will recognise that we are maintaining the credibility of the strategic nuclear deterrent.

    Marine Harrier Aircraft
    Mr. Watkinsonasked the Secretary of State for Defence if he will make a further statement on the future of the Marine Harrier.
    Mr. William Rodgers: Not at the moment.
    Mr. Watkinson: Does the hon. Gentleman accept that cancellation of this project would be a further body blow to the aircraft industry? Will he indicate the export potential of this aeroplane? Is it the case that other countries are waiting to see what we do before placing orders?
    Mr. Rodgers: I fully understand the wish of the aircraft industry to see this project go ahead, and certainly it has considerable export potential. Design work is continuing, and we shall be completing a full and careful evaluation before deciding whether to go ahead.
    Rear-Admiral Morgan-Giles: Does not the hon. Gentleman realise that it is the wish not only of the aircraft industry but of the Royal Navy which should be taken into account?
    Mr. Rodgers: The Royal Navy has said that it would be a useful additional capability. We recognise that.
    Mr. Buck: The hon. Gentleman will concede that it is not only the Royal Navy which has said this. The whole Defence Staff has said that it would be a useful additional capability.
    Is the hon. Gentleman aware that not so many months ago he and his right hon. and hon. Friends were taxing the Conservative administration for not having made a decision about this? Some of us thought that there was substance in the suggestion that there had been a long delay. Is there not even less reason for delay now? Why will not the right hon. Gentleman make a decision?
    Mr. Rodgers: To the best of my recollection, I have never taxed anyone about any delay. This is an important project. The more important it is, the more important it is that decisions are made in due time.

    General Elections and Referenda
    Mr. Gowasked the Secretary of State for Defence whether he is satisfied with the existing arrangements made for members of Her Majesty's Forces and their spouses to vote at General Elections and referenda by post or by proxy; and if he will make a statement.
    Mr. William Rodgers: Not entirely, but we take steps to ensure that Service families know and can take advantage of the existing facilities for Service registration.
    Mr. Gow: Can the hon. Gentleman say whether those who have joined the Armed Forces since 10th October will be able to vote in the forthcoming referendum, assuming—which may not be the case—that the Government are able to carry through their legislation?
    Mr. Rodgers: I cannot say that. As the hon. Gentleman knows, there is to be a White Paper on the referendum procedure, which will be debated in the House before Easter. That will be the moment to pursue what I accept are very important questions involving Service voters.
    Mr. Evelyn King: Is the hon. Gentleman aware that to hon. Members on both

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    sides of the House with constituencies in Dorset and no doubt in other places where there are military installations, this is a matter of very great importance? Can he say, either now or later if I put down a Question, what percentage of persons serving in the Armed Forces entitled to vote did vote at the last or any similar election?
    Mr. Rodgers: I can tell the hon. Gentelman that the percentage of those eligible who are registering is between 25 and 30, which is low. It has been agreed on both side of the House that the change in procedure in 1969 following the Speaker's Conference resulted in fewer Service people registering than hitherto. For that reason, recommendations were made to the last Speaker's Conference by the Ministry of Defence and the Home Office. Those were largely accepted. But it is not a matter for me to say how soon they will be implemented.
    Mr. Leadbitter: Will my hon. Friend make it clear that it is the desire of many right hon. and hon. Members on both sides of the House that the rights of the Service voter in the referendum should be considered before the publication of the White Paper?
    Mr. Rodgers: I am grateful to my hon. Friend, and I undertake to draw the attention of my right hon. Friends to this exchange today.
    Mr. Younger: Although we quite understand that the Minister is not himself responsible for this situation, does he accept that the whole House regards the present situation involved in Service voting as little more than a scandal? It is up to the hon. Gentleman to bang the table and to demand that those concerned with these matters ensure that Service personnel get back the right to vote, just like every other citizen.
    Mr. Rodgers: Only this House, under its own powers, can give back that right. There is no disagreement between the two sides of the House. This is a matter upon which a decision should be reached, and I shall make suitable representations. I am sure that in the coming weeks hon. Members will find further opportunities to make their views known.
    Mr. Gow: On a point of order, Mr. Speaker. In view of the unsatisfactory
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    and complacent nature of the Minister's replies, I beg to give notice that I shall seek to raise the matter on the Adjournment at the earliest possible moment.

    Royal Air Force (Fuel Economies)
    Mr. Wellbelovedasked the Secretary of State for Defence what fuel economies have been achieved in the RAF during the past 12 months.
    Mr. John: Notwithstanding the extra flying necessitated by the Cyprus emergency, it is estimated that some 125,000 tons of fuel will be saved over the 12 months ending 31st March 1975.
    Mr. Wellbeloved: Can my hon. Friend be a little more specific about the areas where savings are taking place? Will he confirm that it remains Government policy that the effective air defence of the United Kingdom shall be an essential ingredient in preserving a free and decent society?
    Mr. John: I assure my hon. Friend that the area in which economies are primarily being sought is in the transport force. These aircraft are being tasked to about 88 per cent. of their former level. Operational flying is not being interfered with.
    Mr. Frank Allaun: Is my hon. Friend aware that last February the Conservative Secretary of State told me that in December 1973, 2·8 million gallons of fuel oil had been saved by the Services, or roughly 10 per cent.? Will he confirm my calculation that on the basis of those figures we are using for the Forces, in peace time, approximately 336 million gallons of fuel oil a year? Is not that rather a heavy cost for the country to bear?
    Mr. John: I should not dream of trying to confirm or deny my hon. Friend's calculation, since my arithmetic is notoriously weak. The fact is that we are using only such supplies of fuel as are necessary for the defence of this country and are contantly reviewing our requirements to see that no unnecessary fuel is used.
    Mr. Goodhew: Can the hon. Gentleman say how much of this is used on the Beira patrol?
    Mr. John: That is a question which my hon. Friend the Under-Secretary of State for the Royal Navy is better equipped to answer than I.

    NATO Eurotraining Working Group
    Mr. Alan Lee Williamsasked the Secretary of State for Defence what was the British contribution to NATO's Eurotraining Working Group in 1971, 1972 and 1973, and to the latest available date; and if he will make a statement.
    Mr. Mason: I assume that my hon. Friend is referring to the work of the Eurogroup in the field of training. The Eurotraining Working Group, set up under German chairmanship in 1970, has made solid progress in extending the range and scope of the joint training arrangements that had been developed earlier. It is now moving towards the next goal of one nation assuming responsibility for all training, in a particular area of activity.
    The United Kingdom has always attached great importance to the work of the Eurogroup and is playing a full part in the activities of Eurotraining. In addition to the offers which we had already made for the training of naval helicopter control officers and of personnel handling the Lance missile, I suggested at the last Eurogroup meeting a number of other areas which offer possibilities for profitable co-operative projects.
    Mr. Williams: I thank my right hon. Friend for that very important reply. He will agree, I am sure, that this is an important area of co-operation. However, I am wondering about the extent to which we are training NATO forces in the United Kingdom.
    Mr. Mason: I am pleased that my hon. Friend recognises the importance of my reply, because considerable savings can be achieved on defence expenditure within NATO if we can make progress in these activities. During 1974, the United Kingdom trained 800 students from within NATO.

    Service Personnel (Organ Transplant Operations)
    Mr. Dalyellasked the Secretary of State for Defence what rules his Department applies to the conditions under which organs, such as kidneys, from Service men, who die in the course of duty, are donated to hospitals for use in transplant operations.
    Mr. William Rodgers: The basic rule is that the donor must during life have expressed willingness to donate the organ concerned.
    Mr. Dalyell: What guidance is given to Service doctors and surgeons in this matter?
    Mr. Rodgers: Service doctors will not normally be involved in such removal because, as my hon. Friend knows, the National Health Service regional transplant team has responsibility. This is entirely a voluntary matter, but we have taken all possible steps to make clear to Service people the real advantages to be gained.
    Rear-Admiral Morgan-Giles: I am not against this idea, but will the Minister give his attention to a much more urgent problem affecting Service men who lose their lives—namely, obtaining proper and generous compensation for their families?
    Mr. Rodgers: I think that that is a totally different question, but the answer is "Yes".

    Cyprus (Strategic Strike Force)
    Mr. Robin F. Cookasked the Secretary of State for Defence when he now expects to complete the withdrawal of the strategic strike force stationed in Cyprus which was announced in his statement of 3rd December.
    Mr. John: The Vulcans previously stationed in Cyprus have now been replaced by a detachment from the United Kingdom. As my right hon. Friend the Secretary of State for Defence made clear in his speech on 16th December last, this move has been undertaken solely to ease the accommodation problem and is without prejudice to the outcome of the defence review.
    Mr. Cook: Will my hon. Friend tell the House what function he hopes to find for the Vulcan bomber squadrons that have been withdrawn from Cyprus, and whether it is intended that they will continue to retain a nuclear capability?
    Mr. John: As my hon. Friend will know, it is not the practice to give information about nuclear capability. We are satisfied that the Vulcan aircraft perform a useful rôole in the Royal Air Force today.
    Mr. Trotter: Will the Minister confirm that the operational squadrons that have been or are being withdrawn from Cyprus are being withdrawn because of lack of accommodation? In doing so, does the hon. Gentleman agree that we have jumped the gun, in view of the White Paper that is to be published?
    Mr. John: No, because the considerations which prompted the two matters are entirely different. As the hon. Gentleman will be aware, the squadrons have been replaced by detachments. The negotiations leading up to the White Paper on the long-term rôle in Cyprus still have to be completed.
    Mr. Boscawen: Is it not crazy at this time, in the No. 1 danger spot in the world, to withdraw a strategic peacekeeping force such as the Vulcan squadron? Will it not encourage other countries which want to do so to proliferate nuclear weapons now with a reason for doing so?
    Mr. Rodgers: Long-term policy matters must await the Defence White Paper. Given present conditions we believe it would be much more difficult if we were to retain an overcrowded presence in Cyprus. That would demoralise our Service men there quicker than anything else.

    "Queen Elizabeth 2" (Luxury Cruise)
    Mr. Fernyhoughasked the Secretary of State for Defence what was the cost of the Royal Marines Band playing at the departure of the "Queen Elizabeth 2" when the latter started its luxury cruise on 4th January; and what was the cost of the helicopter fly-past on this occasion.
    Mr. John: The Royal Marines Band took part at no cost to public funds; all incidental costs and a fee for the services of the band were paid by the Cunard Steamship Company. The brief helicopter flight is estimated to have cost about £100.
    Mr. Fernyhough: Does not my hon. Friend realise that during that weekend Opposition spokesmen were making gloomy speeches about the disastrous economic situation facing this country? Does he not think that it is rubbing salt
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    into the faces of workers who are being asked to tighten their belts for a vulgar and ostentatious display of this kind to take place? In answer to an earlier Question it was said that no unnecessary fuel had been used. Was this an unnecessary use of fuel? Further, will he tell me whether they were workers or shirkers who were the passengers on the luxury cruise?
    Mr. John: If my right hon. Friend is asking whether the helicopter flight was ill-judged, I must say that in my view it was. Methods of participation are always under review, forming part of the constant review which is going on to see that no unnecessary fuel will be used in future.
    Mr. Tebbit: Will the Minister say whether the flight fulfilled a useful training function? Such flights may easily fulfil just as useful a training function for helicopter pilots as any other kind of flight, possibly even pulling an hon. Gentleman opposite out of the water if he were drowning. That might be in bad taste, too.
    Mr. John: The hon. Gentleman's question has merit, in that any flight has a training value. Whether the flight in question was necessary and whether the training could have been fulfilled in another way are the questions that we must ask. That is why I have said that in my view this matter was ill-judged.
    Mr. Buck: First, does the Minister agree that there is never anything vulgar or ostentatious about the Royal Marines? Secondly, does he agree that the contribution which they made helped to earn foreign currency for Great Britain?
    Mr. John: It is tempting, but it would be dangerous, for the Minister for the Royal Air Force to comment upon the Royal Marines. It is true that they participated on the normal fee-paying basis, in the same way as other Service bands. I do not want to comment further on that aspect.
    Rear-Admiral Morgan-Giles: On a point of order, Mr. Speaker. For the avoidance of doubt, will you please arrange for the Table Office to encourage hon. Members who are tabling Questions about ships to refer to them as "her"

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    rather than "it"? After all, proper respect for the feminine gender may soon become very topical.
    Mr. Speaker: No doubt the hon. and gallant Gentleman's point will be noted.

    Vulcans, Phantoms and MRCA
    Mr. Andrew F. Bennettasked the Secretary of State for Defence, on the basis of the figures referred to in his answer to the hon. Member for Stockport, North on 17th January, what is the fuel cost of flying the Vulcan and Phantom for a given period; and what, for the same period, will be the cost of flying the MRCA.
    Mr. William Rodgers: It is too soon to be sure, but we expect the MRCA to use about 40 per cent. less fuel than a Vulcan and 30 per cent. less than a Phantom on a comparable mission.
    Mr. Bennett: In view of the uncertainty that the Minister expressed on this occasion and on 17th January, is he convinced that the figures which were included in the defence review are of any value?
    Mr. Rodgers: Yes, I am. There are always uncertainties about the future performance of sophisticated equipment, but I am sure that the figures we included were the best that we could have found.
    Mr. Michael McNair-Wilson: Is there any truth in the statement that orders for the MRCA for the Royal Air Force are to be reduced?
    Mr. Rodgers: None.
    Mr. Warren: Is it true that the British Aircraft Corporation is refusing to put money into the project while that company is under the threat of nationalisation?
    Mr. Rodgers: I assume that that must be a legend, too.

    Dockyards (Repayment Work)
    Mr. James Johnsonasked the Secretary of State for Defence what is the current value of repayment work at present being undertaken in Royal Naval dockyards.
    Mr. Judd: The value of contracts for repayment work currently in hand at the
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    Royal dockyards is approximately £1½ million pounds.
    Mr. Johnson: Will my hon. Friend be a little more forthcoming and tell me the nature of the work and whether any cuts are likely to be to the long-term detriment of ports such as Hull?
    Mr. Judd: A variety of work is being undertaken, including fairly substantial subcontracts for United Kingdom shipbuilders. I assure my hon. Friend that there is no intention of undermining work opportunities in ports such as Hull.
    Mr. Younger: Is it good enough for the Minister to say that there is no intention of doing so? What machinery is he setting up to ensure that no work taken by a Royal Naval dockyard is taken at the expense of workers elsewhere in civilian yards?
    Mr. Judd: The answer to that is clear. The Royal Naval dockyards take on what is called repayment work only when civilian firms are not available to carry out such work.

    HMS "Daedalus" (Hovercraft Unit)
    Mr. Woodallasked the Secretary of State for Defence whether he will make a statement on the purpose of the Royal Naval hovercraft unit at HMS "Daedalus".
    Mr. Judd: The naval hovercraft trials unit is established to carry out trials and associated training in support of the possible development of hovercraft in the mine countermeasures rôle.
    Mr. Woodall: I thank my hon. Friend for that reply. Will he now tell me when the unit was set up, its size, and the rôle of hovercraft in mine control measures?
    Mr. Judd: The unit was set up last month. I was privileged to attend the commissioning ceremony. The unit comprises nine officers, 61 ratings and three civilians. The rôle of hovercraft is envisaged to be in mine countermeasure activities.

    Arms Expenditure (Review)
    Mr. Frank Allaunasked the Secretary of State for Defence what representations he has received about his review of arms spending.
    Mr. Goodhartasked the Secretary of State for Defence whether he will make a statement about the progress of his discussions on the defence review.
    Mr. Mason: I have received representations from a number of quarters. In particular, we have had debates in both Houses following my statement on 3rd December, and we are in the middle of extensive consultations with our NATO Allies. These are due to be completed in February and I expect to publish a White Paper in March.
    Mr. Allaun: Is my right hon. Friend aware that since it has emerged that he is increasing rather than decreasing the arms bill protests have been flowing in to Transport House—[Interruption.]—from constituency Labour parties and trade unions, including the Transport and General Workers' Union, which has thousands of workers involved—[Interruption.]—and that 91 Labour Members of Parliament, and the national executive of the Labour Party—[Interruption.]
    Mr. Speaker: Order. These groans merely waste time.
    Mr. Allaun: —are pressing for real and substantial reductions to be made in the arms bill?
    Mr. Mason: I am aware of my hon. Friend's encouragement of this lobby, but he must be aware that even during the course of this Question Time anxieties and concern have been expressed on both sides of the House, and that even on our present defence review, trade unions, shop stewards, companies and firms are worried about the redundancies that will flow within the next four years. Substantial reductions are to be made, and people will be affected. At least 15,000 people in defence establishments and 10,000 in defence industries will lose their jobs over the next four years. We have tried to do this on a manageable scale, and I hope we shall succeed, but if my hon. Friend encourages those who want more cuts he must recognise that trade unions will see all their hopes and aspirations for full employment jeopardised.
    Mr. Goodhart: Is the right hon. Gentleman aware that at least one Parliamentary Private Secretary on his side has accused him of cheating and cooking the
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    books? Can he remember any other occasion on which a Parliamentary Private Secretary has made a similar accusation and not been asked to resign?
    Mr. Mason: I am not aware either of what my hon. Friend said or on the occasion on which he said it, but I have always told the House that we planned our defence review on the expenditure that we inherited. We are making substantial reductions, and these were set out in the statement of 3rd December. They will be more clearly defined in the White Paper, but we have been honest with the House, with the country and with those who elected us on our manifesto.
    Mr. William Hamilton: Is my right hon. Friend aware that I have not received one letter from any worker in Rosyth Dockyard asking the Government to expedite the closure of that dockyard? As its main work is the servicing of nuclear submarines, will my right hon. Friend give an assurance that when the Prime Minister visits Moscow later this week he will seek to engage in talks on multilateral disarmament rather than take the unilateral action that is proposed by Conservative Members?
    Mr. Mason: I think I can give my hon. Friend that assurance. If this matter happens to come forth in the talks during my right hon. Friend's visit to Moscow he will take into consideration the manifesto commitment, which states that there shall be multilateral negotiations before we embark upon the removal of Polaris from Holy Loch.

    RAF Stations (Closure)
    Mr. Brothertonasked the Secretary of State for Defence when he proposes to publish the names of the 12 Royal Air Force stations to be closed as announced in the defence review.
    Mr. John: My right hon. Friend the Secretary of State for Defence intends to publish the names of the stations which the Royal Air Force proposes to vacate in the Statement on Defence Estimates. The associated process of consultation will be initiated with the publication of these proposals in the White Paper.
    Mr. Brotherton: Is the hon. Gentleman aware that considerable hardship has been caused to many people because of the

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    statement in November that 12 Royal Air Force stations were to be closed? If the Secretary of State for Defence could say in November that 12 stations were to be closed, how comes it has taken him three months to decide which they are?
    Mr. John: I dare say I see more Royal Air Force stations throughout the country than the hon. Gentleman does, and I am bound to say that they are taking a responsible and reasonable attitude to this matter. They realise, as we do, that the implications of the major policy decisions in the support field have to be considered in detail. We are seeking the views of other Government Departments which are concerned with regional policies.
    Mr. Wiggin: When will the Government publish the Defence Estimates? Secondly, if the Secretary of State does not know which 12 stations he is to cut how can he possibly estimate what the saving will be?
    Mr. John: The statement on Defence Estimates will be published during the second or third week of March, and if the hon. Gentleman will contain himself until then he will see how the proposed savings will be arrived at.
    Mr. Ward: Will my hon. Friend ensure that local authorities in the areas of stations that are closed are given first opportunity to bid for the use of any vacated buildings?
    Mr. John: As my hon. Friend knows, there is an agreed procedure whereby other Government Departments, including the other Services, are offered vacated airfields for their own use but, subject to that, they are offered to local authorities, and I hope that some of them will be taken up.
    Mr. Peter Walker: Is the hon. Gentleman aware that every Royal Air Force station throughout the country is full of anxiety as a result of this delay? Will he, therefore, publish the list of stations to be closed as soon as he has come to his conclusion and not wait for the Statement on Defence Estimates, particularly since, it having been decided in November that 12 stations were to be closed, it is inconceivable that his right hon. Friend still does not know which 12 these are?
    Mr. John: I think that the statement, which the right hon. Gentleman cannot have studied with his usual care, said "about 12". The answer is that the stations to be closed will be announced in the Statement on Defence Estimates to be issued during the second or third week of March.

  EUROPEAN ECONOMIC COMMUNITY
  Mr. Tebbitasked the Prime Minister if, during the period in which Ministers will be allowed to speak against the Government's recommendations on EEC membership, he will arrange for Ministers to state explicitly that they are so doing when they dissent from the recommendation.
  The Prime Minister (Mr. Harold Wilson): No, Sir.
  Mr. Tebbit: Why not? Why not start now, as the Secretary of State for Trade is making speeches which show him opposed to membership on any terms? Could we have a Cabinet Committee to control the Secretary of State for Trade, as well as one that controls the Secretary of State for Industry?
  The Prime Minister: I find it difficult to follow the hon. Gentleman's convolutions, but it is not necessary to do what he asks. When the Cabinet makes a recommendation to the country in relation to the referendum, he need have no fear that any who might wish to act in accordance with the proposed agreement to differ will not identify themselves, but if the hon. Gentleman is worried I shall identify them for him.
  Mr. Roy Hughes: Does my right hon. Friend agree that it is only fair and reasonable that the Minister who is to have responsibility for the National Enterprise Board should explain how membership of the Common Market would interfere with the activities of the board? Likewise, should not someone explain how the development plans of the coal and steel industries would be affected?
  The Prime Minister: I am sure that the last thing my hon. Friend would want to do is prejudge the negotiations. There were some serious unsolved problems in the previous negotiations. These matters

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  are being taken up in the negotiations, and they will be dealt with by the Government as a whole when we see the outcome of the negotiations.
  Mr. Robert Carr: Will the Prime Minister clarify one point on collective responsibility? We understand that during the referendum campaign Ministers will be free to talk according to their personal views. After the referendum campaign, when the matter is debated again in the House will the Prime Minister restore collective responsibility?
  The Prime Minister: The right hon. Gentleman will be aware that many of my hon. Friends have made clear they will accept the judgment of the country in this matter, so I think he is asking about an extremely hypothetical situation. Should he or anyone on his Front Bench wish to make any representations to me on how collective responsibility works, I shall be interested to consider it.
  Mr. Thorpe: Is the Prime Minister aware that this Question is unnecessary? We already know which Ministers are for the Common Market and which are against it. The only interest is in those who are reserving their position, including the Prime Minister. We want to see to which side of the fence they will topple.
  The Prime Minister: I am grateful to the right hon. Gentleman. He will understand that we fought the election on the question of renegotiating the terms. We do not know the terms, but when we do we shall make our recommendation to the House. The right hon. Gentleman is prejudging the discussion without even knowing what the terms are.

  EEC HEADS OF GOVERNMENT (MEETING)
  Mr. Spearingasked the Prime Minister if, at the forthcoming meeting of EEC Heads of State in Dublin, he will raise the question of the rôle of EEC Commissioners in the internal affairs of member States.
  The Prime Minister: While the agenda for this meeting is still to be arranged, I have no intention of raising the matter referred to in the Question.
  Mr. Spearing: Does my right hon. Friend realise that that will disappoint many hon. Members? When I asked the Foreign Secretary whether he would review the terms of appointment of the Commissioners, particularly in respect of their activities in their own States, I understood that there was no responsibility, and the Minister of State referred me to their employers. Since Article 10 of the merger treaty makes the activities of Commissioners independent, but at the same time makes it clear that they are appointed by member States, does my right hon. Friend not think that we should consider this matter, particularly in view of the activities of certain Commissioners in the recent past?
  The Prime Minister: This is a free country, and anyone placed in the position described by my hon. Friend is free to propagate his views within the law. I am sure that Commissioners will not spend so much time on missionary work as to neglect the long overdue reforms of the Commission's work, duties, costs and staffing, for which the Federal German Chancellor has called, with my full agreement. Of course, when people go on a propaganda mission, I am sure that they are always very careful to make a self-assessment as to the productivity or counter-productivity of their campaign.
  Sir D. Renton: Is the right hon. Gentleman aware that when a Common Market Commissioner expresses his views in public in this country he is not infringing any rule of Cabinet responsibility?
  The Prime Minister: Yes, I have already said that this is a free country, and that he is free to do it. We all hope that he will not so overtax himself as to be unable to devote himself to the other urgent reforms of the Commission's responsibilities within the field laid upon Commissioners by the Treaty of Rome.

  ECONOMIC AFFAIRS (MINISTER'S SPEECH)
  Mr. Skinnerasked the Prime Minister if the public speech of the Secretary of State for Industry made at Salford on 25th January on economic matters represents Government policy.
  The Prime Minister: Yes, Sir.
  Mr. Skinner: I am pleased about that. Why does the Prime Minister find it necessary, as instanced by his recent weekend speech to the businessmen in the North, almost to undermine the efforts of the Secretary of State for Industry to get through party policy? May I kindly suggest to my right hon. Friend that if he wants to carry out this monitoring job it might be a reasonable idea to see what the Chancellor of the Duchy is currently doing in pacifying the oil barons on the question of oil taxation and ripping up the manifesto into fragments?
  The Prime Minister: When my hon. Friend says anything in a kindly manner, I always listen to him with particular attention. The speech that I made last week was not just to representatives of management but to management and trade unions. Some eminent leaders of Merseyside and Lancashire trade unionism were there. What I was attacking in that speech—I think that I had some little success in the matter—were certain neurotic comments in the Press and on the other side of the House in recent weeks which have shown a total ignorance of how Cabinet Government works. These matters are all decided on the basis of Cabinet decisions and Cabinet committees—[Interruption.] As I have said, I am always prepared to receive representations on collective responsibility, present and past, from Conservative Members. As for the question raised in my speech, I was speaking entirely about, and reminding the audience of, what was said in our White Paper, published before the last General Election—my hon. Friend fought his campaign on it, I think. That is what I was making clear last week. I hope that my hon. Friend will be pleased to think that that is so.
  Mr. Pardoe: Is the right hon. Gentleman aware that when those of us who still believe in free enterprise and the market economy strive to convince doubting industrialists that the Secretary of State for Industry does not represent the views of this Government, and that they are a bunch of good chaps, we are met with an air of sustained disbelief? Will he give us some idea what we may say in response to that?
  The Prime Minister: Yes. My sustained disbelief is in the bona fides of the lion. Member's case. Throughout the last
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  Parliament, on all matters, the Liberals, when they were here—which was not universally the case—intended to vote in a split way, or two to one on behalf of the Conservatives—
  Mr. Thorpe indicated dissent.
  The Prime Minister: The figures are on the record and I shall be delighted to send them to the right hon. Gentleman. When the hon. Member for Cornwall, North (Mr. Pardoe) is engaged on his mission civilisatrice in the City, I think that I can help him best by asking him to take with him a copy of the White Paper, Command 5710, that I have here. We are working entirely within the framework of that White Paper in the Industry Bill and all future proposals within this Parliament about public ownership.
  Mr. Hooley: Will my right hon. Friend reflect again on what he said over the weekend about the dangers of cartels of raw material producers? Does he agree that if the Western European industrialised countries are going to gang up in the Common Market it will automatically produce a ganging up by the poorer nations which have important raw materials to offer? Are not the two things balanced? If we pursue one course, is not the other inevitable?
  The Prime Minister: I recognise my hon. Friend's long-term concern in this matter but I cannot accept the phrase "ganging up". For example, there was the report made to the House by the Minister of Overseas Development about the Protocol 22 negotiations, with particular reference to stabilisation of the prices of primary commodities. If my hon. Friend will study the full text of my speech he will see that I was trying to suggest some assurance for primary producing countries, particularly in the Third World, to ensure that they can go ahead with production and make their contribution to the world food shortage.
  Mr. Tom King: Is the right hon. Gentleman not aware that the real question is whether his speech on Friday represents the policy of Her Majesty's Secretary of State for Industry—because the powers that he will enjoy under the Industry Bill are very substantial? Does he realise that if, as he says, he is anxious to unite the whole nation to fight its way through our present economic problems and to get

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  industry really working together, the two biggest obstacles at the moment to the restoration of the confidence of industry are the Secretaries of State for Industry and Employment?
  The Prime Minister: I cannot accept that. Certainly it is our endeavour to unite the whole nation, and when this week is over I am prepared to offer my good offices to the Conservative Party to help to unite it—[Interruption.] I am sorry, but I do not seem to have been very successful over the last year in this matter. It is a matter of profound concern to democracy that someone should do this job for them. I am certainly prepared to help. On the earlier part of the hon. Member's question, everything contained in the Industry Bill has been done on the basis of Cabinet decisions and on a White Paper published before the election. We are adhering strictly to the White Paper.

  MOSCOW (PRIME MINISTER'S VISIT)
  Mr. Tim Rentonasked the Prime Minister whether he will seek to arrange for the Secretary of State for Industry to accompany him on his visit to Moscow.
  The Prime Minister: No, Sir.
  Mr. Renton: Why not? Does the Prime Minister not think it advisable that the Secretary of State for Industry should study at first hand the effect of State ownership on manufacturing industry and on the freedom of choice of the work force? Would he not also like his right hon. Friend to see how collective responsibility works in the Kremlin?
  The Prime Minister: I am very interested in the study that the hon. Member has clearly given to these questions. I would only say to him that never have the Communitsts and their allies in this country had more encouragement than exactly one year ago today, with the policies—which I am sure the hon. Member supported at the time—on which the Conservative Government went to the polls, and which of course some members of that Conservative Government are now trying to pretend they knew nothing about.
  Mrs. Renée Short: Leaving aside the hon. Member's snide comments, will my right hon. Friend, on his forthcoming visit, bear very much in mind the fact that there are considerable opportunities for joint British-Soviet industrial co-operation and see what he can do to further them?
  The Prime Minister: My hon. Friend is absolutely right. The whole House, I think—this was the position of the previous Government; the right hon. Member for Worcester (Mr. Walker) was concerned with the policy—wants to see a great increase and improvement, and somewhat more balance, in trade between Britain and the Soviet Union. Since I negotiated the first-ever trade agreement with them since the war, which was the basis of all this, I have spent a great deal of my time on these matters. My hon. Friend will be glad to know that last week I met all the leading business men and firms who are themselves trying to expand their trade with the Soviet Union.
  Mr. Peyton rose—
  Hon. Members: Hear, hear.
  Mr. Peyton: It is nice to be able to unite the Labour Party.
  Will the right hon. Gentleman think again about this matter and follow the policy of self-sacrifice suggested by my hon. Friend and take his right hon. Friend with him to Moscow, so that his right hon. Friend can give the Russians a refresher course in Marxist policies?
  The Prime Minister: I shall, of course, be delighted next week to convey to the Soviet Government what the right hon. Gentleman has said. I have no doubt that they will judge it in relation to their assessment of the authority which the right hon. Gentleman commands within this House and within his party. Knowing them, in many matters with which I have been concerned, to be prepared to show compassion, I am sure that, should things go wrong for the right hon. Gentleman today—which I do not for a moment expect—the Russians will be prepared to intercede should there be any question of his being sent to the Tory salt mines as a result.

NORTHERN IRELAND
The Secretary of State for Northern Ireland (Mr. Merlyn Rees): With permission, Mr. Speaker, I should like to make a statement.
On 14th January I outlined to the House the Government's policy towards Northern Ireland. [Interruption.] I said that the Government were seeking a lasting peace and that a genuine and sustained cessation of violence—
Mr. Russell Kerr: On a point of order, Mr. Speaker, Some of us are anxious to hear what the Secetary of State has to say. Would you please request hon. Members not to make such a clatter as they leave the Chamber?
Mr. Speaker: I am obliged to the hon. Member. I hope that that will be the case.
Mr. Rees: On 14th January I outlined to the House the Government's policy towards Northern Ireland. I said that the Government were seeking a lasting peace and that a genuine and sustained cessation of violence would create a new situation. If that took place, there would be a progressive reduction in the present commitment of the Army, both in numbers and in the scale of activity, leading to a reduction to peace-time levels and withdrawal to barracks.
I also said that, once I was satisfied that violence had come to a permanent end, I should be prepared to speed up the rate of releases with a view to releasing all detainees. I made it clear that Ministers and officials were ready to explain this policy and hear the views of those in Northern Ireland who had something to contribute.
I re-emphasised this policy in my statement on 5th February and told the House that my officials had had a number of meetings with various organisations, including Provisional Sinn Fein. At those meetings officials had been under instructions to expound the Government's policy and to outline and discuss the arrangements that might be made to ensure that any cease-fire did not break down. There have been further meetings with Provisional Sinn Fein, and the Provisionals have declared a further
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cease-fire to run from 6 p.m. on Monday 10th February 1975.
The House will wish to have more details of the discussions. On 16th January the Provisional IRA did not prolong its temporary suspension of offensive military action and made a good deal of alleged incidents which, whatever the true facts, it claimed should not have happened. Subsequently, my officials put to Provisional Sinn Fein a scheme designed to make effective arrangements for ensuring that any future cease-fire did not break down.
This has five main elements. First, a number of incident centres, manned by civil servants on a 24-hour basis, will he established in various parts of Northern Ireland. These centres will be linked with my office in Belfast. Second, if developments occur which seem to threaten the cease-fire, these incident centres will act as a point of contact in either direction. Third, issues can be referred to my office in Belfast and clarified there. Fourth, cases referred up to the Northern Ireland Office will be considered, and a reply passed back to the incident centre for onward transmission. Fifth, if out of these exchanges general difficulties about the cease-fire arrangements emerge, then discussions will be arranged between my officials and representatives of legal organisations to clarify them.
There will be full consultation by officials with the security forces on these arrangements which will cover only incidents arising directly out of the ceasefire.
This is what the discussions have been about, and these arrangements will be brought into effect during the next few days.
These practical arrangements can be only the first steps towards a permanent peace. There are many problems yet to overcome in a situation which is far from clear. There is no quick and easy solution and winding down from violence will not happen overnight. It is relatively easy to identify these problems.
In some cases a continued cessation of violence will, as I have indicated before, bring its own results. The presence of the Army will become progressively less obtrusive. Screening, photographing and identity checks can be brought to an end.

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It will be easier to move about. I shall not sign interim custody orders.
The position of the security forces remains as I have previously stated it, namely that actions are related to the level of any activity which occurs. If this diminishes, then so, too, will the actions of the security forces. But I must make it clear that anyone involved in acts of violence will be prosecuted in the courts.
I have made clear the basis of Government policy, namely that we are seeking a genuine and sustained cessation of violence. This is not just a question of time but, if people go on below the surface acquiring explosives and arms and preparing for violence at some later date, then no one will expect me to regard the cessation of violence as genuine. It means an end to bombings, murders and kneecappings, to kangeroo courts, to armed robberies and hijackings—to the horrors of which even the last few days have given us fresh examples.
Sectarian murders and protection rackets must be ended, and the House will be aware that this affects the whole community.
The community itself must contribute positively to peace. This is not just a matter for the police; it is something in which the whole community must be involved. Policing and community peacekeeping is in everyone's interest.
There are other very difficult problems which I should put to the House because they will have to be tackled. How is permanent peace to be secured? How is respect for the law to be restored? What is to happen to the Emergency Provisions Act and to proscribed organisations? How is the threat of murder and assassination to be brought to an end and people protected? How are the communities to live in peace together? How are jobs to be found so that people can live with their families at home and enjoy life without fear? These are not but they all require examination, thought and action.
The Government will do all they can to help solve them, but it would be an illusion even to think they will disappear overnight. Patience, understanding and good will are needed, and a heavy responsibility here rests on the politicians and
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would-be politicians, in Northern Ireland to seek out constructive solutions to deal with real problems that have persisted for more than 50 years. I hope now that a process of discussion and debate can replace violence.
My task now is to seek a permanent end to violence, which is the first requirement of any process of discussion in Northern Ireland. This was why I felt it right to take some first steps of a practical kind once I received indications that the Provisionals contemplated reinstating their cease-fire and that they accepted that practical arrangements were needed to ensure that it did not break down. That is what the talks have been about. There has been no question of bartering away the future of the people of Northern Ireland.
As I have said, the situation is far from clear-cut. There is no ready-made or well-defined path ahead. I want to find a way forward, but there are many obstacles and many difficulties. It would be idle to pretend they do not exist. The fact that there is a cease-fire and practical arrangements for monitoring it are the first tentative and welcome steps which I have reported to the House today. With your permission, Mr. Speaker, I shall continue to report any further developments to the House.
Mr. Biggs-Davison: The Opposition are deeply obliged to the Secretary of State for his important statement and for his undertaking to continue to keep us informed. Is he aware that we welcome the beginning of a cease-fire which owes much to the right hon. Gentleman's constancy? Above all, however—and I am sure that the right hon. Gentleman will agree with me—it owes most to the courage, skill and patience of the security forces, whose successes are increasingly welcomed and supported in every section of a population revolted by terrorism, from whatever quarter it may come.
Does the right hon. Gentleman agree that the admirable firmness of the Dublin Government needs and deserves to be sustained by our continued vigilance and determination? Having regard to the speculation, will he lose no opportunity to make clear, as I think he has made clear in his statement, that no military or political price has been paid to the Provisionals?
Mr. Rees: I am grateful to the hon. Gentleman for his earlier remarks and in particular for his remarks about the security forces. I have learned in 11 months to rely on them a great deal for advice. They are the people on the ground. I have found it quite remarkable how the soldiers on the streets have an ear for the feelings in the communities. The concept of blimpishness and so on, which is perhaps easily portrayed, does not apply to them.
Our co-operation with the Dublin Government grows all the time. It is not for me to comment on their internal affairs. They are a sovereign independent Government. Co-operation with them takes place.
I can assure the hon. Member that there has been no sell out. It would do no good if there were. One cannot sell out what one cannot control. What matters in Northern Ireland is that there are two communities. I have no wish to sell them out and I will never do so.
Mr. Molyneaux: Will the Secretary of State give an assurance that the arrangements he has outlined will in no way inhibit the police in enforcing the law, particularly in view of the regrettable outbreaks of assassination which all of us utterly condemn? Since the right hon. Gentleman has put a number of questions to the House, does he intend that there might perhaps be an early debate to discuss the various points he has raised? Can he give an assurance that his plans for the constitutional Convention will in no way be affected by these recent developments?
Mr. Rees: The hon. Member asked whether the arrangements would affect the enforcement of the law, and the answer is that they will not. The enforcement of the law matters in Northern Ireland.
I am grateful to him, in view of his position in Northern Ireland, for raising the question of sectarian murders. There is no doubt that the killing of a policeman, the killing a couple of days later of two people in the other community nearby, and the killing this morning of a milkman in the same area, constitute a spiralling of sectarian murders, and this only gives strength to paramilitary
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forces because people feel that they need defence. I am grateful that the hon. Member made that statement because it will reinforce the feeling in the community overall that all people in Northern Ireland are concerned at the sort of violence that is going on in spite of the cease-fire.
The question of a debate is not one for me. Nevertheless, the questions that I raised are real questions. It is not enough for me to sit back now because the cease-fire has emerged. In the developing period of the next month or so real and practical problems will have to be dealt with if the cease-fire is to continue. That must be done if people are not to be afraid to go back to peace.
I know, for example—and I might as well say this—that I am protected by machine guns and goodness knows what else. What about the people who want to go back to peace after having been involved in civil war? They are still afraid. We have to consider the wider issue of how we can get people back to a peacetime attitude. Sectarian murders do not help in that respect, and that is why I am grateful to the hon. Gentleman for what he said.
There has been no change on the Convention, and on the unfolding details of the Convention. I shall announce a date for the election at the appropriate moment.
Mr. Duffy: I offer warm congratulations and thanks to my right hon. Friend and to all those who have assisted him in bringing about the cease-fire. May I urge him to crack down ruthlessly on all sectarian murders and protection rackets? They probably constitute the most immediate short-term threat to the cease-fire. In structuring it and strengthening the monitoring arrangements, will he consult groups on all sides so as to get them into the habit of talking to him in the hope that they will then acquire the habit of talking to each other? Will he say a word about the future of the Emergency Provisions Act?
Mr. Rees: I agree very much with my hon. Friend about the sectarian murders. I have just arrived from Northern Ireland and I know that there is no doubt that these murders greatly affect the community. The police are doing all they can to deal with this very difficult question.

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As for the structures to which I referred, I agree that if we can get people used to talking, that is a victory if they have previously been used to using the gun. I shall take any steps I can take in that respect.
The Emergency Provisions Act is due to be renewed in July, but on the technical side we shall have to see what the situation is then. I would never be prepared to leave the security forces without the strength that the Act provides for them. The Gardiner Report is being considered. It recommends changes in the Act, so that all these pieces fit together. We shall look at the Act in context at the time.
Mr. Thorpe: Everyone will hope that this latest development represents a new situation in which the people of Northern Ireland will have opted for peace, and in that regard much credit is due to the right hon. Gentleman and to everyone else involved. Will he accept that, even with the best will in the world, it is very difficult, particularly against the pattern of activity in Northern Ireland, for a cease-fire to be automatic overnight. Therefore, the concept of incident centres which help to reduce misunderstanding is an imaginative concept which will assist in that regard. Will they be sited in rural as well as in urban areas? How many does the right hon. Gentleman plan to set up? At the earliest possible moment will he consider a general amnesty for those holding arms so that they may hand them in? This may not be the right moment for such a move, but will he bear that in mind?
Since these matters have been carefully worked out and have presumably obtained the general support of the different communities in Northern Ireland, it would not appear right to probe the right hon. Gentleman at this stage, but may I say that we wish him and the people of Ireland a cease-fire which will prove lasting and effective.
Mr. Rees: I am grateful to the right hon. Gentleman for the general terms he expressed at the beginning and at the end of his supplementary question. It matters to the Secretary of State to have a base in the House of Commons because there is no other base from which he can operate. On the practicalities of the centres, we shall site some of these buildings in rural areas. I am trying to be
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vague because I do not want them to be generally known, since it would be much better that they should not be known. There will be seven or eight in different parts of the Province.
I have considered the question of an amnesty for guns. Such a move would not be right at the moment. There is a great deal of fear, and people hold guns legally because they need them, particularly in rural areas. Those who hold guns illegally sometimes also feel that they need them for protection as well as for other purposes. I shall therefore look at that question.
This is a point to which I have increasingly put my mind. As long as there is a flow of weapons into Ireland as a whole from all parts of the world—and I can speak only for Northern Ireland—as long as money is coming from all parts of the world to provide those guns, as long as explosives move across the border and through the ports, and as long as the detonators and the timing mechanisms are available, there will always be explosions and killings. I am applying my mind to that problem because if I could stop those supplies at source an amnesty would have more relevance.
Mr. Fitt: There is so much in the Secretary of State's statement that it will probably be impossible now for my right hon. Friend to clarify all the questions liable to be posed, and I propose to have a discussion with him later. But he referred to the cease-fire arrangements No one knows exactly what those arrangements are. My right hon. Friend went on to say that, if there appears to be a breakdown, discussions will be arranged between his officials and representatives of legal organisations to clarify the situation. What are these "legal organisations"? What part will they have to play in clarifying such a situation if it arises?
Has my right hon. Friend's attention been drawn to speeches made last week by elected representatives—some of whom sit in this House for Northern Ireland constituencies—which can only be calculated as an incitement to one section of the community to take up arms against the other? Has my right hon. Friend's attention also been called to the trial last week in Northern Ireland of certain

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members of the Ulster Defence Association, a paramilitary force now seeking to impose its will, and to the remarks made by the judge about that brutal and callous murder case?
It is important that my right hon. Friend should clarify another point. If he has achieved cease-fire arrangements with one illegal organisation, the Provisional IRA, and illegal acts are carried out by paramilitary forces from the loyalist section of the community, what action does he propose to take against those paramilitary forces? Will the Army as at present installed in minority areas be transferred into those areas from which such violence emanates?
Finally, will my right hon. Friend clarify his attitude to the burning issue of internment? When does he propose to set about releasing those who are interned without trial in Northern Ireland, recognising, as the whole community does, that there will never be a hope of a stable political situation until internment is ended?
Mr. Rees: My general view of detention has been stated today, last week and at the beginning of January. If I am to end detention, I must be sure that there is a genuine cessation of violence. I must be sure of that. Of course, that does not mean that there cannot be releases, but I do not want to play a prisoner trading game by saying that X number of detainees will be let out on condition that something is done in return. It is easier to end the whole lot simply by saying that people are not prepared to bomb and kill. That is the Government's view. It is not a matter of my saying that I will release 50 people next Monday in the hope that, during the weekend, no one is killed—adding that if someone is killed, the releases will be reduced in number next week. For Heaven's sake, let us end the lot. That is the Government's policy.
Perhaps I can give an example with regard to the cease-fire arangements. I think that we might find ourselves with splinter groups. Other organisations are being formed. I want to be sure that if something happens somewhere, my officials can find out whether those who claim that they are operating a cease-fire have been responsible for it. That may sound a little naïve on the surface, but I am convinced that it will help the security
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forces in the way I have described. It will be the other way round as well—there will be a point of contact in either direction. That is the reason for these practical arrangements.
My hon. Friend asked about speeches. Many speeches are made in political terms everywhere in Northern Ireland, and I do not agree with many of them. My only advice to people—moving, as I do, in both communities—is that what the people of Northern Ireland are looking for is people who are prepared to work for the good of Northern Ireland, and if we can establish that principle it will mean a great deal, from which we can move forward.
Anyone who, by innuendo, supports those who bomb and kill ought to be forced to meet the families whose loved ones have been killed. They would soon learn from that experience. It is all too easy to become a statistic in Northern Ireland, but statistics do not tell of the hatred generated in the course of time—and we are suffering now from decades of hatred arising out of deaths in the past.
Mr. Craig: Is the right hon. Gentleman aware that his skilful and cautious approach will be widely appreciated throughout Ulster? Will he guard against the possibility of these incident centres developing into something like collaboration with criminals? Can he give an assurance that any information that would be of interest to the police will be passed on to them?
Mr. Rees: There is no danger, I think, of that collaboration happening to which the right hon. Gentleman referred. In reply to the last point raised by him—yes, of course I will do that. Any information we have will be passed on to the police. This is the sort of thing which needs to be thought out very carefully.
The right hon. Gentleman was active in Northern Ireland politics long before most of us were and some have more honourably concerned themselves before. The right hon. Gentleman knows what makes Northern Ireland tick. I say all this in no sense of pointing an accusing finger. I have taken into account that violence happens on both sides of the community there. It shows a different pattern. There is less bombing on one side. From one community people come more often before

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the courts because they live in areas where the police operate. We must point the finger at all those who use the gun for political ends. Once we are all doing that unreservedly to both sides, we shall have moved a little forward.
Mr. Stallard: Will my right hon. Friend accept that there will be widespread welcome for his statement and support both to him and to those who have helped him to bring about the situation he has described in his statement? Would not he agree with me, however—and I can only interpret the reports and announcements that I have been able to read—that the present cease-fire would appear to be more firmly based than previous attempts of the kind? If my right hon. Friend does agree that that is the position, can he not now make a more positive statement about the ending of internment, bearing in mind particularly that anyone with a vested interest in maintaining internment can easily do so? Will my right hon. Friend take this aspect into account and try to make a more positive announcement about how long it will go on and when he sees an end to internment being made?
Secondly, I ask my right hon. Friend to use what influence he may have with the Government of the Republic to get them to remove yet another flashpoint which exists and must worry him, as it does all of us who are interested in the Irish situation—that is, the situation at Portlaoise.
Mr. Rees: Portlaoise prison is not my responsibility. The Irish Government would quite properly resent any interference in the activities of a sovereign Government. Given their history—once they had civil war—I think it better that I should leave the Irish Government to make their own judgments.
The cease-fire is open ended in the sense that a date has not been set to it. That is a very great improvement. I am aware of my responsibilities. That does not mean that I can be absolutely certain about every decision I take every day. I have to take judgments that I know might lead to problems. I am aware very firmly that the one great thing to do in Northern Ireland would be to end detention. I am equally aware that the other thing that
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goes with it would be to end the killing, the shooting and the bombing. They go together. I have to be assured about that, and whatever I do must not put the life of a single person at risk because, unlike some people in Northern Ireland, I do not believe in martyrs, whether in the community or in the Armed Forces.
Mr. Amery: There have been reports from Dublin that there is an understanding between the Government and the IRA that IRA personnel will be allowed to continue to carry side arms, and that the police and UDR will not enter certain areas. Can the right hon. Gentleman assure us that there is no truth in those reports?
Mr. Rees: I have reported to the House the five points I have made and the general questions raised. I have reported to the House all that I must report to the House, because I do not believe that I should hide anything. There have been no signed documents. Nothing has been said about the police. With regard to them, the situation is clear. They have not been in certain areas for a very long time. What I wanted to say about the police I have said in my statement.
There is a law in Northern Ireland about carrying sidearms. Many people carry them. The right hon. Gentleman would be surprised at how many people who come to see me leave their guns at the door of Stormont Castle. Well-nigh everybody does. There are many people who are afraid. The law is the law on that matter, and I shall stick by it.
Mr. Dalyell: Has my right hon. Friend had brought to his attention a moving description of Crossmaglen in the Sunday Times colour supplement? Does he draw the conclusion that in present circumstances a low profile by the Army at the very least would be highly desirable? Does my right hon. Friend in any way share the difficulty of some of his hon. Friends that, although we believe that he passionately wants to bring internment to an end, he cannot do so while such action might jeopardise the lives of British soldiers? This is a chicken-and-egg situation of enormous difficulty. The sooner my right hon. Friend gives an indication that the Army presence will be withdrawn, the more likely he is to achieve his other ends.
Mr. Rees: I do not think that I could have made it clearer than I have since 14th January that the Army presence will be withdrawn progressively, that there will be a return of the emergency battalions to this country in the light of the security situation. It is not quite a chicken-and-egg situation in the sense in which my hon. Friend used the expression. The situation is such that if I am determined to move along a certain line not everything must come from me; there are other people in the community who are involved.
Crossmaglen, where 24 British soldiers have been killed, is very near the Border. It is not the whole of Northern Ireland. I am also concerned with the Protestant areas of East Belfast. That is the nature of Northern Ireland. Crossmaglen has been what it is for a very long time.
If my hon. Friend has visited Northern Ireland recently—I know that he goes frequently—he will have been proud of the way in which the Army has carried out the instructions given by the commanding officers and of the soldiers' rôle in most parts of Northern Ireland over the past three or four weeks. They have been remarkably good. They understand what "low profile" means. There is nothing they want more.
Mr. Powell: May I refer back to the Secretary of State's reply to my right hon. Friend the Member for Belfast, East (Mr. Craig), because there may have been a slip of the tongue or a misunderstanding. The right hon. Gentleman appeared to say that others had been more honourably engaged in politics in Northern Ireland than my right hon. Friend. I am sure that that was not his intention, not only because it is the custom in this House not to cast aspersions on one another's honour but because of the support which has been given by my right hon. Friend to the right hon. Gentleman's intentions.
Mr. Rees: I cannot recall the exact words I used, but it is not my job to cast aspersions at anybody, and it certainly was not my intention to do so. I shall look at the words I used and unreservedly withdraw them if I have cast such aspersions.
Mr. Spriggs: Will my right hon. Friend consider the effects of a long-term
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peace and political settlement in Northern Ireland on the Heysham-Belfast ferry service, which is earmarked for closure in the very near future? While the question may bring a smile to the faces of some right hon. and hon. Members there are thousands of people in the United Kingdom, both at Heysham and Belfast, who are watching the situation with great seriousness. If my right hon. Friend will agree to meet a British parliamentary deputation to discuss the matter, we shall be pleased to see him.
Mr. Rees: I am always pleased to meet my hon. Friend. The responsibility for the service lies at Westminster, not with me but with the Department of the Environment. I have met the trade unions in Northern Ireland and given any help that I could on the matter. If my hon. Friend thinks it necessary, I shall of course be pleased to meet him.

DEFENCE (PROTECTION OF OFFSHORE INTERESTS)
The Minister of State for Defence (Mr. William Rodgers): With permission, I will make a statement on the protection of our offshore interests.
For many years the Armed Services, and principally the Royal Navy and the Royal Air Force, have played an important part in the peace-time protection of our offshore interests both in the course of their normal duties and in support of the civil authorities concerned. But in addition to these traditional tasks, such as fishery protection and the safety of shipping, important new ones have recently arisen. These include the prevention and control of pollution and the protection of the growing number of offshore oil and gas installations from accidental or malicious damage. The Government have been considering how these tasks may best be carried out.
In the past, the resources provided primarily for external defence have been adequate, but, with the increasing scale and importance of our offshore interests, new kinds of ships and aircraft will be required. In particular, there is a need for a class of vessel of a size intermediate between the small mine counter-measures vessel at present used for fishery protection in relatively sheltered coastal waters

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and the frigate, which is unnecessarily large and sophisticated for much of this work. Five new vessels will, therefore, be built similar to the offshore fishery protection vessels operated by the Department of Agriculture and Fisheries for Scotland, which will continue to be available. In addition, up to four aircraft will be provided to carry out surveillance of offshore waters and to operate in conjunction with ships. These will be existing aircraft which may need some modification for this particular task.
The new vessels are expected to begin to enter service in 1977 and the aircraft at about the same time. Meanwhile as an immediate measure of protection for our offshore interests, the Royal Navy will this spring take on loan from the Department of Agriculture and Fisheries for Scotland the fishery protection vessel "Jura". She will be lightly armed, provided with improved communications and manned by Royal Navy personnel as a warship. As well as carrying out fishery protection work in Scottish waters, she will be available to provide a naval presence in the vicinity of our offshore installations and will provide a valuable experience in meeting this new task. In addition, the naval ocean-going tug "Reward" will be recommissioned as a Royal Navy ship this summer and equipped in a manner similar to the "Jura" for duties in the North Sea. Other naval vessels and Service aircraft will continue to pass through the area, and routine air patrols by the RAF over the offshore installations will start soon.
It is not, however, the intention that the Armed Forces should undertake specialist tasks such as fire fighting or that they should normally perform work which can equally well be done commercially.
The Government also intend to consult closely with neighbouring countries, and particularly our NATO allies bordering the North Sea, to explore ways of providing increased common support.
Mr. Peter Walker: Is the Minister aware that there is nothing in his statement that will make the country feel that our most vital economic interests are being particularly well protected?
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First, what consideration has been given, and what action has been taken, to meet what must be the most likely risk to the oil installations; namely, acts of terrorism?
Secondly, the Minister said that routine air patrols by the RAF over the offshore installations would start soon. Is he implying, therefore, that there have not been RAF patrols over the installations for the past 12 months, particularly since Soviet spy ships have been active in the area?
Thirdly, what consideration has been given to better co-ordination between the police authorities and military authorities with regard to these activities?
Is the hon. Gentleman telling us that over the next two years, until 1977, the only additional strength given to this vital task is one converted Ministry of Agriculture ship and a tug? If that is so, this will get the title of "Dad's Navy".
Mr. Rodgers: I am very surprised at the grudging and ill-judged comments of the right hon. Gentleman. I think that Members on both sides of the House recognise that there is a new and difficult task and that we have to find the best means of meeting it. We shall certainly learn by experience, and in the interim period the Royal Navy and the Royal Air Force will have valuable experience upon which they will be able to draw later. But inevitably we are feeling our way, and, in our judgment, what we are proposing is worthy of a warmer reception than that which the right hon. Gentleman has chosen to give it.
Let me now reply to the right hon. Gentleman's three questions. I do not agree that the most likely risk from which installations suffer is that of terrorism, though it is indeed a risk. We have it very much in mind, though the right hon. Gentleman would be unusually foolish if he were to ask me to spell out the details of how we expect to meet it.
Secondly, it is perfectly true that from time to time RAF patrols have flown over existing installations. But we are proposing, in the interim period before the newly-equipped aircraft are available, that it should become a more regular occurrence. If circumstances justify it, we

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shall seek to go further. But we are satisfied, as far as anyone can be satisfied, that this is a useful interim measure, and I should deceive the House if I attempted to claim that it was anything other than that.
Thirdly, on the question of co-ordination, the right hon. Gentleman is right in saying that there is an important dividing line between military responsibilities which are for installations at sea and police responsibilities which continue for the installations on land. I can assure the right hon. Gentleman that we have given full consideration to this matter and we hope that we have found a solution which will bring the right results.
Mr. Grimond: Is the hon. Gentleman aware that his statement will cause some anxiety in Scotland? Does he really think that this is a new situation? It has been foreseen for at least two years. There appears to be no denial that patrol vessels are being ordered. Will the hon. Gentleman reflect that all sorts of practical measures in connection with oil have been taken too late and possibly are inadequate?
Is the hon. Gentleman aware that not only are the fishery protection services in Scotland already severely strained but that there is a strong demand for a 50-mile limit and that we shall need more, not fewer, protection vessels? Removal of the "Jura" may be very serious indeed. Will the hon. Gentleman consider chartering more ocean-going tugs or possibly acquiring more aircraft in the interim period chiefly for fishery protection services?
Mr. Rodgers: The right hon. Gentleman is right in saying that this is not a new situation. He will concede that in my statement I did not imply that it was. It is, however, a new environment in which the Royal Navy and Royal Air Force have to work, and it is important that they have equipment which is related to the job. It would be only too easy, for example, whatever the expense, to claim that a frigate could do the job. In our estimation, that is not the right sort of vessel for the purpose, and, therefore, new vessels have to be designed and built. However, if it is demonstrated that our interim arrangements are inadequate, I should not exclude the sort of proposal which the right hon. Gentleman has
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made. But in the short run we shall not reduce the number of vessels available for fishery protection off Scotland. The "Jura" will be able to combine her new rôle with her previous one, but, more important, as the right hon. Gentleman may know, a further vessel will be available very shortly. Therefore, the total number of ships available for this task will not be reduced.
Mr. Prescott: I add my welcome to what my hon. Friend has said today, and certainly the people working in the North Sea will welcome any separate force which increases security and safety in the North Sea. But is not the logic of the argument that there are so many departments with different responsibilities that we should use this force as a means of establishing a marine authority? I wonder whether my hon. Friend is discussing this possibility with other departments and considering setting up a separate budget for an air-sea rescue system rather than dealing with the matter under the heading of defence.
Mr. Rodgers: I am grateful to my hon. Friend for his generous and discerning remarks. I know how much he has been concerned with all these issues in recent weeks, including the one he mentioned latterly. We have under discussion his suggestion about a marine authority, and it is right that there should be no bureaucratic obstacle to the effective performance of the duties I have described today and the more traditional duties which must continue, including air-sea rescue. We are feeling our way. The effect of my statement, which represents the Government's considered view, is that there will be close co-ordination in future, but the day-to-day responsibility will be placed firmly on those who carry out the operations.
Sir John Gilmour: Does the hon. Gentleman agree that a place should be found for the auxiliary forces as back-up to any work being done in this connection?
Mr. Rodgers: Indeed, yes. We shall bear that in mind.
Dr. John A. Cunningham: Is my hon. Friend aware that as an interim statement his remarks will be welcome, but, far from bringing in auxiliary forces on an ad hoc basis, is there not an overwhelming case, on defence and environmental

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grounds, for ensuring that the tremendous proliferation of structures in the North Sea is properly policed in all senses of that word?
Mr. Rodgers: My hon. Friend is absolutely correct. He has mentioned environmental grounds. We recognise the danger from pollution from any of these installaations as a result of an accident. We shall continue together to try to find the best solution, although when the new vessels are in operation it will be a major step forward.
Mr. Watt: Will the hon. Gentleman assure the House that there will be close co-operation between fishery protection services and the new naval force so that we may know how many foreign vessels are fishing in the area between the 12-mile limit and the proposed 200-mile limit? The fishing industry of Scotland will welcome the increased policing force which will be available in 1977, but in the meantime it will be concerned about the withdrawal of the "Jura" from fishery protection duties. Without the "Jura" there may well be, as there have been in the past 12 months, instances when no vessel is available to put to sea at short notice.
Mr. Rodgers: The hon. Gentleman need not be anxious about his second point, because a new vessel will be coming into commission very shortly and the total effect will not be a diminution in the number of vessels available for fishery protection off Scotland. However, the hon. Gentleman is right to draw attention to the importance of co-operation. It has been very close indeed, and I am sure that it will continue in that way.
Rear-Admiral Morgan-Giles: I agree with my right hon. Friend the Member for Worcester (Mr. Walker) that it is deplorable if the Royal Navy is so reduced that it must commission clapped-out stop-gaps for the important two years before the new ships become available.
Can the hon. Gentleman say whether the new ships will be purpose-built ships, with speed and flexibility and good communications and, very important, helicopter platforms, and, most important of all, good living conditions for their crews in the terrible waters in which they will operate? Does he realise that we import so much technology for offshore drilling that it would be nice for a change if we
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could use British genius to develop and design our own ships and export to parts of the world where there will be oil drilling? Can he explain why it is not visualized—
Mr. Speaker: Order. I must ask hon. Members to confine themselves to one or, at most, two supplementary questions.
Rear-Admiral Morgan-Giles: In conclusion, does the hon. Gentleman understand that the offshore tapestry of his Ministry should be woven in bright colours and not in faded patches?
Mr. Rodgers: I am grateful to the hon. and gallant Gentleman for his closing poetry. I do not think he is being fair to those who will sail in them when he describes the vessels as clapped-out stopgaps. They are not that, and I invite him to see them at a convenient time so that he can reassure himself on that account. The new vessels he has mentioned will be specially designed. I am sure that they will have the best available accommodation, given the difficulty of the task. It will be possible to land equipment on them from helicopters, though they will not carry helicopters—[HON. MEMBERS: "Oh."] This matter has been very thoroughly discussed. In our view, the vessels meet the need, and I am sure that their success will be demonstrated in such a way as to achieve a considerable export potential.
Mr. Leadbitter: The Minister is to be congratulated on his statement, which will be welcomed by the people who earn their livelihoods on offshore installations. There is some anxiety that we should know what are the comprehensive servicing arrangements for the protection of the installations. Will my hon. Friend consult his right hon. Friends in the Departments concerned with a view to defining these comprehensive services, and will a statement be made in the House at an early stage? Will my hon. Friend also take up the question posed by my hon. Friend the Member for Kingston upon Hull, East (Mr. Prescott) about the need for one department to co-ordinate all the services?
Mr. Rodgers: I am grateful to my hon. Friend for what he said. We shall continue to keep the House fully informed on these difficult and important matters in the way my hon. Friend suggests.
Mr. Emery: I do not in any way wish to encourage complacency, but will the Minister confirm that it is important that the message should go out from the House that there are in existence methods for the pursuit and arrest of vessels which interfere with our right in the North Sea? Will he confirm that recently the Navy was called into hot pursuit and was able to make an arrest? In carrying out the arrangements he has announced, will be consider the greater use of helicopter patrols on irregular, unscheduled and varied patterns, with great publicity being given to the carrying out of these patrols, so that anyone who may be thinking of interfering will realise the great likelihood of detection?
Mr. Rodgers: The hon. Gentleman is right to put into perspective not only the statement but the somewhat alarmist remarks which have been made this afternoon. We are anxious to find the best methods of providing a necessary deterrent, which is what the hon. Gentleman is concerned about. I would not exclude any method which experience shows to be relevant, but it is easy to jump to conclusions that one method is necessarily superior to another. We have had elaborate discussions and have taken the best possible advice. We have not said that cost is an obstacle. I reassure the hon. Gentleman that nothing in the defence review has affected our determination to do the best possible job in this area.
Mr. Dalyell: Is not some tribute due to my hon. Friend the Under-Secretary of State for Defence for the Royal Navy, who organised a seminar last summer, and to Professor John Ericson and Professor Alan Thompson, of Edinburgh University, who have given so much thought to this subject? Will anything be done about the vital deep-ocean survey and recovery vessel designed by Alverstoke and other naval establishments? Could not at least part of the expense go
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on the Department of Energy account and not on the Department of Defence account?
Mr. Rodgers: I am sure that my hon. Friend is correct in saying that credit for these arrangements rests with a number of people, including my hon. Friend the Under-Secretary of State for Defence for the Royal Navy, to whom I am happy to give credit. I cannot today give my hon. Friend a reply to his question on deep-ocean recovery but I shall make inquiries and write to him. In reply to his second question, we shall continue to look at these matters, and I am sure that progress will be made.
Mr. Brotherton: I welcome the Minister's statement, but I regret his use of the word "alarmist". Surely what is required is a comprehensive system of defence for this, our greatest natural asset. Such a comprehensive system should consist of fast patrol boats, continuous helicopter patrols and probably also midget submarines. Has the hon. Gentleman given any thought to the manufacture and supply of midget submarines to help in the protection of offshore installations?
Mr. Rodgers: Not in the last few months, Sir. The hon. Gentleman, whose concern I totally appreciate, may be assuming that the defence of these installations can be carried out best by more sophisticated methods than are actually required. There are some tasks which, although important, lend themselves to more simple and conventional arrangements. We shall continue to take advice and we shall listen to what the hon. Gentleman and the House say. As I mentioned earlier, and as I should have said in reply to my hon. Friend the Member for West Lothian (Mr. Dalyell), the problem of the cost, wherever it may fall, will not be a major obstacle.

ABOLITION OF COHABITATION RULE BILL
4.25 p.m.
Miss Jo Richardson: I beg to move,
That leave be given to bring in a Bill to repeal the cohabitation rules contained in the National Insurance (Industrial Injuries) Act 1965, the Supplementary Benefits Acts 1966 to 1974 and the Social Security Act 1973, and for purposes connected therewith.
The cohabitation rule states that a woman may be disqualified from benefit for herself and her children in her own right if she is considered to be cohabiting with a man unless, in the case of supplementary benefits, there are exceptional circumstances. That rule affects entitlement to supplementary benefit, national insurance benefit and widow's benefit. There is no clear statutory definition of "cohabitation". That is the problem, and that is why I am seeking leave to bring in the Bill.
One Act defines the rule in one way, another Act defines it in another way and the Supplementary Benefits Commission handbook defines it in a third way. All those definitions are vague and imprecise. They are imprecise enough to make it difficult for an investigating officer to decide easily and clearly whether a man is taking financial responsibility for a woman in the way that a husband takes financial responsibility for his wife.
So many anomalies have arisen and so much injustice has been done that I have come to the conclusion that the best way to deal with the situation is to abolish the rule altogether. That would remove the risk that the rule may be applied to people who are not in fact living together as a couple and when the man is not supporting the woman. It would remove the shabby practices to which the rule gives rise. Most important, it would remove the injustice which is caused by treating the cohabiting couple as if they were married. The officers of the Supplementary Benefits Commission frequently assume that, because a widow or a single mother has a lodger, she is cohabiting with him and he is supporting her in the way in which a husband supports a wife.
I know of many cases like that. I know of a lady who worked as a home help and in her spare time acted as a
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driver for handicapped children. She lived in the house of an old friend who suffered from cancer. She provided domestic help and occasional nursing in return for free accommodation. At the same time she also looked after an old man of over 90 who was living in the same house. What was her reward? She lost her widow's pension.
I know of another elderly lady who for many years has had a male lodger, many years her junior, living in her house. An officer came along and decided that this young man was cohabiting with the elderly woman. The result was that her benefit was withdrawn. The shock to the woman was double. There was the financial shock and also the severe mental shock, from which it took the old lady a long time to recover. She was shocked that she should be suspected by the commission and her neighbours of sleeping with this man who was 25 years younger than she.
Young unmarried mothers who have boy friends, either occasional or serious, frequently find that their benefit is removed because the officer assumes that the young man is taking financial responsibility for the woman and is keeping her. Many young mothers avoid making lasting relationships and avoid having boy friends because they are afraid that the commission will remove their benefit.
The rule does not in fact say that a woman may not sleep with a man. The financial consideration is the one which ought to be taken into account. But the Supplementary Benefits Commission's investigating officers carry out their investigations very often in a way which leaves much to be desired. In many cases the claimant does not even know that she is being investigated because the officer carries out his survey of her by means of questioning neighbours, the landlords, the rent collector and the milkman—and even children, horrible though that may sound.
Observations have been carried out by officers sitting nearby outside the house. Sometimes they have gained access to a house opposite that in which the woman is living and have spied upon her from there. In one ludicrous and outrageous case an investigating officer was found kneeling and looking through the letterbox, and when challenged he lamely said that he

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was trying to take out a census form which had fallen through.
When an interview takes place with the claimant, the questions nearly always lay far too much stress on the sex side of the case. The officer—or may I call him the sex snooper?—snoops around the house and looks in wardrobes to see whether a man's trousers are hanging up in the same wardrobe as the woman's clothing. He tries to decide from that whether that means that a man is sleeping with her and whether he is cohabiting with her. He then asks impertinent questions about the sleeping arrangements in the house. He tries catch questions on her to try to trip her up.
If the officer is satisfied that a cohabitation situation exists, he very often takes away her book on the spot, although he is supposed to have a written order to do so. Many claimants allege that the book is snatched away from them by the investigating officer. The benefit then having been removed, the onus is upon the unfortunate woman to prove her innocence. There is appeal machinery but often she does not know about it, and unless she has expert advice and representation it is very difficult for her to go through the machinery. That is why only a relatively small number of people exert their right to do that.
Many pleas have been made and much case history has been put forward to get the cohabitation rule properly defined. I know that an inquiry is being carried out by the Supplementary Benefits Commission into the operation of this rule, but it is taking a long time and in the meantime the disadvantages still exist and the anomalies still occur.
But there is also a very great injustice in treating a genuinely cohabiting couple as a married couple. The argument against abolishing the rule is probably based on the fact that a cohabiting couple have an advantage over a married couple because the married woman does not draw benefit. But this implies that marriage is no more than a formality—and it is a great deal more. It is undertaken with considerable thought and it gives considerable rights to the woman in the case. A married woman has a
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legal right to maintenance during the life of her husband; she can inherit from him; through his national insurance contributions she can get the maternity benefit, and a pension when she is 60, and so on. These are important rights which are not available to the woman in the case of a couple who are cohabiting. By comparison cohabitation is a very insecure situation, especially if there is a threat that the woman's benefit is to be cut off.
For all these reasons—administrative, social and downright human—the sensible way to ensure that a woman receives the benefit to which she is entitled, and to relieve the officers of a very unpleasant task, is to abolish the cohabitation rule.
The House will wish to know how much this would cost. On the last known figure the net gain to the Revenue of recovering benefit, after deducting the cost of administering the rule, was about £500,000 net—nearly the same sum as is rumoured as an increase in the Civil List. The cost is nothing by comparison with the relief which will be felt by many thousands of women who feel that in a modern and enlightened society they are being subjected to Victorian behaviour.
I hope that the House will take a step forward today by supporting the Bill.
Question put and agreed to.
Bill ordered to be brought in by Miss Jo Richardson, Mr. Andrew F. Bennett, Mr. Bruce George, Mr. John Ovenden, Mr. Robert Kilroy-Silk, Mr. John Moore, Mrs. Helene Hayman and Mr. Sydney Tierney.

ABOLITION OF COHABITATION RULE BILL
  ABOLITION OF COHABITATION RULE
  Miss Jo Richardson accordingly presented a Bill to repeal the cohabitation rules contained in the National Insurance (Industrial Injuries) Act 1965, the Supplementary Benefits Acts 1966 to 1974 and the Social Security Act 1973, and for purposes connected therewith: and the same was read the First time; and ordered to be read a Second time upon Friday 25th April and to be printed. [Bill 83.]

EEC (ENERGY POLICY)
Mr. Speaker: Before calling the right hon. Gentleman the Secretary of State, I have to inform the House that I have not selected the amendment in the names of the hon. Member for Southampton, Test (Mr. Gould) and his hon. Friends.
4.36 p.m.
The Secretary of State for Energy (Mr. Eric Varley): I beg to move,
That this House takes note of EEC Commission documents Nos. R/446/74 and R/3333/74 and the Government's intention, whilst co-operating in the development of a Community energy policy, of ensuring that such a policy is consistent with the aims, of the United Kingdom's domestic energy policy.
At the outset, Mr. Speaker, I should like to clarify the situation in which these documents are being considered by the House today.
I know that some of my hon. Friends are concerned that in all our dealings with the Community we should not commit ourselves to action which would be irreversible even if our membership of the Community were to be brought to an end by the referendum decision later this year. I know that others of my hon. Friends are equally anxious that we should not at this stage disengage ourselves from activity within the Community which it would be difficult to resume if the referendum decision goes in favour of our continued membership of the Community. I should, therefore, like to assure all of my hon. Friends that none of these documents pre-empts the referendum decision one way or the other. All of them deal with long-term issues which cannot possibly be decided in e few months between now and the referendum.
The approach I have adopted—I think it is the approach that the House will want to adopt—can be set out in a moment or so. That is the approach I adopted at the Council of Ministers last December, in fulfilment of the undertakings I gave to the House in our earlier debate on Community energy policy, and the approach that will he followed by my noble Friend the Minister of State when he attends this week's Council meeting.
We, of course, had no difficulty in accepting any Community attitudes which conformed to the policies of this Govern-
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ment, as set out in our manifesto and in statements to this House. We are perfectly ready to discuss constructively other proposals which, while not forming part of our stated energy policies, do not conflict with them. But, equally, we are unable to accept Community proposals which conflict with our policies or national interests, or would prejudice them, or undermine them.
It is against this background that we should examine these documents. I am anxious that the House should debate them fully and frankly, so that my noble Friend will be able to reflect the views of the British Parliament. I would also hope that the House would regard this full day's debate as a vehicle not for discussing the merits, one way or another, of British membership of the Community—we shall have ample opportunities for discussing that in the months ahead—but to focus our attention on energy policy in a way that will leave the Community in no doubt about the views of this House.
I hope it will be for the convenience of the House if I take each document in turn, summarise it, and then state the Government's views on it. I hope that in that way it will be possible for us to turn this paper mountain—although I have always thought about the Community in terms of a butter mountain—into something more manageable.
I wish to turn first to COM(74) 1960, "Community Energy Policy, Objectives for 1985". This document is one of a number stemming from the Commission's main energy policy document "Towards a New Energy Policy Strategy for the European Community", which we debated last December. It contains the Commission's objectives for 1985 for each energy sector, and an outline of the specific measures for their implementation.
Annexed to the document is a draft Council resolution calling upon member States to take account of the objectives in formulating their national policies, and approving the methods and guidelines to be adopted for achieving them. The document repeats much ground previously covered.
These policies and proposals were debated in the House on 3rd December.

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We regard some of the objectives—particularly those for gas and nuclear energy—as unrealistic. But they have now been overtaken by those contained in the objectives resolution agreed at the Council on 17th December. The guidelines have also been revised and Ministers will be considering more realistic ones at the Council on 13th February.
The second document is COM(74) 1950. "Community Programme for the Rational Use of Energy". This is a report of a working group, set up by the EEC Energy Committee, to define a programme of action for the Community on the rational use of energy. It contains the group's recommendations on priority conservation measures. It also recommends the setting up of panels of experts, to be drawn from member States, to examine in detail the conservation measures suggested.
We support this exercise, and we are co-operating fully with the studies recommended in the report. In the light of the results, we will consider which of the proposed measures to adopt. I announced some of our own measures to the House on 18th November and a further package on 9th December.
A revised text of the draft resolution annexed to the report was agreed by Ministers at the Council of 17th December last. This committed us to an overall target of 15 per cent. reduction of energy consumption by 1985 for the Community as a whole. Each member State will make the best contribution it can to that target.
Mr. Peter Rost: Will the right hon. Gentleman confirm that his own programme will achieve a similar saving over that period?
Mr. Varley: I have resisted specific targets. I have always said that if over the next few years we can reduce energy consumption by 10 per cent. of current use, that would be a considerable saving.
Mr. T. H. H. Skeet: Not enough.
Mr. Varley: The hon. Gentleman says "Not enough." I have said on many occasions that I am not a proud chap, and if the hon. Gentleman or any of his colleagues can bring forward specific pro- 236
posals for consideration which are practicable, we shall consider them. But when I speak about the overall target as a Community target, I hope that can be met in this country.
I turn to document Com(74) 1970, "Guidelines for the Electricity Sector in the Community". This document contains the Commission's views on the aims to be pursued by the electricity supply industry in the Community to about 1990. It consists of an introduction, a summary of electricity's rôle in overall energy strategy, and an analysis of electricity demand, primary fuels and finance, and sets out policy objectives.
The summary postulates a massive contribution from electricity generated from nuclear energy as an essential factor in reducing the Community's dependence on imported oil. The document concludes that in the long-term electricity prices are likely to be increasingly competitive. Demand growth for electricity will slow in the short term but rise to 9 per cent. per annum in the late 1980s. The analysis considers demand growth by sector. Overall electricity demand growth in the United Kingdom is likely to be lower than elsewhere in the Community because of the high consumption already existing here. Production is considered in terms of each primary fuel's contribution. Generation in nuclear power stations is seen as rising from 20 per cent. of all electricity generation in 1980 to 45 per cent. by 1985 and 70 per cent. by 1990. Target nuclear capacity in 1985 is 200 gigawatts.
The objectives emphasise: development of indigenous energy sources and heavy investment in nuclear energy to reduce dependence on imported oil; rational use of energy, including gradual substitution of electricity for oil in certain uses; an adequate tariff structure for the electricity supply industry and a common financing policy for the heavy investment programme required.
The target growth rate for electricity demand in the proposals is based on an assumption which is probably unrealistic. The proposals depend on a cheap and plentiful supply of nuclear fuel throughout that period. This is a crucial assumption but the paper does not discuss the justification for it. The proposed target for nuclear capacity is, in my view, unrealistically high.

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Moreover, the document gives little emphasis to the industrial and financial difficulties of a massive nuclear expansion or to the consequences of failure to achieve it. In addition, it disregards the danger that a programme this size would tend to increase the likelihood of serious public reaction to the environmental problems associated with nuclear power. The paper also pays in the Government's view, insufficient attention to more efficient energy use and to the study of alternative fuels.
Mr. Peter Emery: Before the right hon. Gentleman leaves the question of nuclear energy, will he say how he views the prospects for British industry in terms of the plans for the reorganisation of the SGHWR being able to play a part in meeting the European demand? Does he not agree that the Government should do everything in their power to encourage British industry in this direction?
Mr. Varley: I thank the hon. Gentleman for that intervention, for it gives me the opportunity to say that it is sometimes forgotten by those in Europe that we already have the largest nuclear programme, in the sense that 10 per cent. of our electricity is already generated from nuclear power. That is a higher figure than that in any of the other Community countries. I very much hope that the advanced gas-cooled reactor programme will begin to come on stream quickly and make a contribution. The Government believe that the SGHWR should be built up as quickly as possible. That programme has been described as a modest programme of 4,000 megawatts, which will perhaps come on stream in the early 1980s. But I hope that before the first SGHWR is commissioned we can take stock of the situation in 1977–78 to see whether that programme can be improved. When one looks at the British nuclear programme in relation to Europe, there is nothing at all to complain about.
The next document is COM(74) 1961, "Community Policy in the Hydrocarbons Sector". That paper has six main themes: rational use of oil and gas; development of Community resources; control of imports and exports; investment policy; price policy; and Community measures in supply difficulties.
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Much of this paper is conventional Commission thinking. But we cannot accept the idea of Community arrangements if Governments do not adopt liberal policies for offshore development; common rules for imports and exports of oil and gas; price policy which went beyond transparency towards harmonisation; and Community measures for dealing with an oil crisis—especially that point—which do not accord with the International Energy Agency emergency oil-sharing scheme. But in any case, contrary to my expectations at the time that I tabled the explanatory memorandum, the draft resolution attached to the paper will not be put forward for discussion on 13th February, and as far as I know there are at present no plans for discussion of it in Brussels.
Mr. Douglas Jay: I should like to put one question to my right hon. Friend if this is the right moment. The House will recall that in the December debate what disquieted some of us was the Commission's proposal for an executive agency under the control of the Commission which would apparently have far-reaching control over future British North Sea oil supplies. Did my right hon. Friend oppose that proposal, has it been abandoned, or is it still lurking somewhere in these documents?
Secondly, on page 2 of the explanatory memorandum my right hon. Friend refers to
"eventual harmonisation of duties and taxes".
Did I understand from what my right hon. Friend said that he was also unwilling to accept that proposal?
Mr. Varley: Some of these measures are, to use my right hon. Friend's words, still lurking in these documents. The essential point is that they are not before the Council of Ministers. Indeed, I do not know of any plans to put them before the Council of Ministers.
Following the debate in this House in December, to which my right hon. Friend referred, I went to the Council of Ministers' meeting on 17th December and, on the particular point about control over our North Sea reserves, in the speech that I made at that time I said:
"I am sure my colleagues"—

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the other Energy Ministers—
"today will understand that our resources of oil and gas in the North Sea must remain under our national control."
That was not challenged in the Council at that time.
I should now like to come to COM(74)1962, "Support to Common Projects for Hydrocarbons Exploration". In this document the Commission proposes a support scheme for high-risk offshore exploration projects—
Mr. J. Enoch Powell: On a point of order, Mr. Deputy Speaker. I apologise for interrupting, but the Minister has just quoted from a speech made by him at the Council of Ministers. This appears to be an important matter. I wonder whether you will consider the bearing on that quotation of the rule of the House regarding the laying of documents.
Mr. Deputy Speaker (Mr. George Thomas): Obviously I will consider the matter and let the right hon. Gentleman know.
Mr. Jay: Further to that point of order, Mr. Deputy Speaker. Is it not the overriding rule of this House that if a Minister quotes from a document he lays the whole document before the House?
Mr. Deputy Speaker: If the document is a dispatch or a State paper, that rule applies.
Mr. Varley: I should like to come to COM(74)1962. In this document the Commission proposes a support scheme for high-risk offshore exploration projects to be undertaken by groups of Community companies in a widely defined area which includes the whole of the North Atlantic.
There is at present no obvious advantage for the United Kingdom in this proposal, and in discussion we shall point out its obvious defects. But in any case it now appears that the proposal again will not be on the agenda of the Council of Ministers on 13th February. This is just as well, since our view is that it needs a good deal of further examination, not least from the point of view of financing. The scheme could benefit us, but we should ensure that it does not conflict with our own Continental Shelf policies.
Mr. Frank Hooley: Does my right hon. Friend also agree that we would not want to enter into commitments in that area until the outcome of the Law of the Sea Conference is better known? That might have a considerable impact on the rights of Common Market countries to explore anywhere in the North Sea or elsewhere.
Mr. Varley: That is a matter that we certainly have under consideration in deciding our attitude to these documents and proposals.
The next paper is COM(74)1964, "Measures to be Taken in the Event of Supply Difficulties". The Commission proposes in an oil crisis emergency demand restraint covering all energy forms and Commission surveillance of intra-Community oil movements by means of an automatic licensing system. There is provision for the suspension of licences in the event of a severe crisis if the Commission finds that the oil supply of a member State is seriously endangered.
As we have indicated, there are defects in these proposals as they stand, and we have firmly reserved our position.
If the proposals come up at the Council meeting on Thursday 13th February, my noble Friend will make it clear that we are still not persuaded of the need for them, but that in any event we shall wish to ensure their compatibility with the International Energy Agency scheme.
Mr. Arthur Palmer: I understand my right hon. Friend's caution and reservation about oil sharing with other members of the Community in the event of a world or Western European oil emergency. However, is it not right that, under the International Energy Treaty, we would have to share anyhow?
Mr. Varley: That is certainly true. There is an implication there. We were first in the field and attached a good deal of importance, as did the previous administration, to the establishment of the International Energy Agency. We are sorry that the French did not join that agency. That is a great pity. We are still hoping that they will join. When it conies to oil sharing and supply difficulties, we attach much more importance to the International Energy Agency than to some of the Community proposals.

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The next document is COM(74)1963, "Towards a Community Nuclear Fuel Supply Policy". The first part of this document sets out the Commission's targets for nuclear capacity up to 1990 and examines the implied requirements for natural uranium, enrichment facilities, fuel fabrication and reprocessing plant. It also estimates the investment implied to 1985 if the Commission's estimated fuel requirements are to be obtained.
The second part suggests solutions to these supply problems through the use of indigenous ore resources, diversification of supply sources, the establishment of European stockpiles, enrichment capacity and reprocessing facilities.
The draft resolution attached to the document affirms the urgent need to define and implement a Community fuels supply policy, and invites member States and undertakings to assist the Commission in the preparation of practical proposals to be submitted to the Council.
The most contentious feature of this paper is the dominant rôle envisaged for the Supply Agency. It is true that the Euratom Treaty 1957 gave the agency a monopoly of nuclear fuel procurement and supply. But the world glut of uranium in recent years enabled the agency to implement a simplified procedure under which national suppliers merely notified their contracts to the agency for retrospective approval.
The agency's consultative committee, on which all member States are represented, has twice recommended unanimously that the procedures should be continued. However, the agency contended that under the existing regulations it would be illegal in today's sellers' market. We still think that the arrangements with regard to the agency that have existed until now should continue.
Document COM(74)1963 envisages that the Supply Agency will in future make much more active use of the powers vested in it by the treaty and may intervene directly in the market. We would prefer to see the agency act on request in support of national procurement activities.
I deal now with document COM(74)1860, "Medium Term Guide Lines for Coal 1975/1985". The document has three parts. Part I sets out guidelines for the rôle that coal should
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play in supplying the Community's energy needs over the next decade. Part II is a draft resolution for the Council of Ministers seeking endorsement of those guidelines, and Part III is a communication from the Commission to the Council on measures for monitoring coal imports to the Community.
The most important points in the guidelines are: that Community coal demand by 1985—estimated at 300 million tonnes of coal equivalent—should be met by maintaining production at the current level of 250 million tonnes, and increasing imports from the present level of 30 million tonnes to 50 million tonnes; to safeguard Community coal producers, imports will be monitored under procedures proposed in Part III of the document; additional investment in deep mining capacity of some 6,000 million units of account, about £3,000 million, at a rate of 500 million units, or about £250 million, a year will be needed to maintain Community coal production at current level; Community coal producers should be assured of a stable market by a system of sales guarantees and by the establishment of stocks financed from public funds to compensate for short-term fluctuation in demand. Additionally, it envisages that subsidies on coking coal should be maintained and that the pricing policy should be one that progressively enables coal producers to cover costs.
The House will be aware that this document is fully compatible with the Government's own policy of support for the National Coal Board plan for coal as set out in the final report of the Coal Industry Examination.
The last of these documents is COM(74)10, "Guidelines and Priority Measures for a Community Energy Policy". Although it is not clear from its title, the document is concerned only with nuclear matters. It is better known as the nuclear plan of action. It lays emphasis on the need for concerted planning and sustained effort by all member States in three main areas: first, public health and the protection of the environment; secondly, the industrial, scientific and technological base; and, thirdly, nuclear fuel supply.
This document as drafted has no significant policy implications for the United Kingdom and has been put forward purely

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for consultative purposes. The United Kingdom is already carrying out a number of the activities proposed.
Dr. John A. Cunningham: When my right hon. Friend says that this document has no implications for the United Kingdom, any programme of enlarging nuclear generating capacity has considerable implications for us both environmentally and in terms of the investment we have made in enrichment capacity and fuel processing, are not these three crucial aspects of the policy about which we must be clear in approaching any attempt by the Community to shorten or to constrict our options?
Mr. Varley: I do not think that anything I have said conflicts with what my hon. Friend has said. He needs to bear in mind the operative words which I used:
"This document as drafted has no significant policy implications for the United Kingdom".
The other aspects of nuclear power policy raised by my hon. Friend were covered in my reply to the intervention of the hon. Member for Honiton (Mr. Emery).
Mr. John Davies: Will the Secretary of State say whether his last comment applies equally to the resolution attached to the instrument in question, the passing of which would have considerable implications on policy in the United Kingdom?
Mr. Varley: I think that the information I have given is correct. At the moment there are no policy implications in the document as drafted. However, I shall check the point and give the right hon. Gentleman a more precise answer to his question. There is nothing in the paper, as I understand it, which conflicts with the general aims of the nuclear policy of the United Kingdom.
Mr. Richard Kelley: Will the Secretary of State say what power we have to determine what the Government's policy will be, having regard to the fact that we are now a member of the EEC, on what form of energy shall be produced in this country?
Mr. Varley: There is nothing in the documents—most of the objectives are long-term ones—which conflicts with our aims. As an additional safeguard, I draw
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my hon. Friend's attention to the Government's motion, which not only takes note of the document but goes on to say:
"… whilst co-operating in the development of a Community energy policy, of ensuring that such a policy is consistent with the aims of the United Kingdom's domestic energy policy."
That is the approach to take on all the documents. That is probably the only approach we can take in the circumstances.
My final word is on Document R/3333, "Covering Note, point 9", which proposes that a statement be written into the Council minutes, perhaps on 13th February, raising the ceiling for annual appropriations for Community projects from 25 million to 50 million units of account. In our view, the need for an increase of this order is not yet proven. We shall wish to assess the outcome of the second allocation before reaching a view.
I hope that that outline of the documents and of the Government's position on each of them will assist the House in its consideration of these problems today. We shall listen carefully to all the views that are expressed and we shall take them into account not only at this week's meeting of the Council of Ministers in Brussels but also in our further consideration of all these matters.
We are prepared to examine any proposals in a constructive spirit, but we shall not hesitate to argue against proposals which do not suit our circumstances and our needs.
5.10 p.m.
Mr. Patrick Jenkin: The House will be grateful to the Secretary of State for his admirably clear and succinct summary of what he described as "the paper mountain" before us today. It was a formidable bundle to draw from the Vote Office last Wednesday, and I know that a number of my hon. Friends have spent a great deal of time between then and now trying to familiarise themselves with the content.
I endorse what the right hon. Gentleman said about the purpose of this debate, namely, that we should express our views on the documents so that his hon. and noble Friend the Minister of State can be aware of the views of right hon. and hon. Members on both sides of the House when he expresses the Government's view at the Council of Ministers.

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During our brief debate on 3rd December, to which the right hon. Gentleman referred, he chided my lion. Friend the Member for the New Forest (Mr. McNair-Wilson)
"… because he embarked upon the long-term energy strategy of Britain rather than the documents before the House."—[Official Report, 3rd December 1974; Vol. 981, c. 1511.]
At the risk of incurring the right hon. Gentleman's wrath, I propose today to go marginally wider than what is contained in these documents. We are not subject to the same stringent time limit as we were on 3rd December. What is more, there is not much point in discussing these far-reaching proposals unless we do so against the background of the world energy situation.
I recognise that this is not the occasion for a tour d'horizon of the whole energy scene, and I shall not attempt that. Nor, tempted though I might be, is it the occasion to voice the growing criticism which can be directed at the Government's energy policy, especially towards the dreadful mess into which, by a mixture of ignorance and prejudice, they seem to have got our North Sea oil policy. That must wait for another occasion. I hope that it will not be too long delayed.
Although part of my speech will be to offer comments on the documents against the background of the world energy scene, I want also to put on record the Opposition's attitude towards them and to ask one or two detailed questions about the matters which they raise.
Subject to some reservations—and they cover electricity, the oil product imports and exports and certain of the hydrocarbon proposals—we can generally go along with the main tenor of the proposals set out in the documents. In the words of the Government's motion, and as several of the right hon. Gentleman's explanatory memoranda make clear, we support the development of a Community energy policy. As our trade with our partners becomes more interdependent, as our economies become more integrated, there is obvious sense in our seeking to evolve co-ordinated energy policies.
That does not mean an identical energy programme for every member of the Community. That would be patently absurd. The United Kingdom is rich in coal and
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shortly will be rich in oil and gas. We are unlikely to want to pursue the same investment policy in different energy sectors as, for instance, France, which at present has little of any of these natural resources. But our internal policies should be complementary and not contradictory, and the Community must be the right framework in which to work these out.
Subject to the reservations which I shall mention in a moment, these documents provide a reasonable basis on which we can proceed. I see in them no threat to our ability to pursue energy policies which are in the best interests of the people of the United Kingdom. On the contrary, I see in them some assurance, through co-ordination and through an effort to achieve common objectives, that our own objectives are less likely to be hampered or frustrated by contradictory policies of our partners.
This is one—a very important—facet of the central argument about United Kingdom membership of the Community. Whether we are in or out, the other nations will be formulating policies and implementing programmes which, willy-nilly, will have a profound impact on our plans. The key question is whether we are to have some say in those policies and programmes. If we are in, we can have a say. If we are not, we cannot. It is as simple as that.
The reservations which I mentioned will cover much the same ground as those of the Secretary of State. I am sure that he will agree that much of what he said by way of reservation was more technical than political and in no way detracted from the central proposition which I have just put before the House.
If we take electricity, for example, there is a Community target of 160 GWe—gigawatts electrical—or possibly 200 GWe by 1985. Different nations are bound to make different contributions to that target. We accept that. But I wonder whether, in the light of the programmes, and especially in the light of the recent French cutback, even 160 GWe is not unrealistically high? The United Kingdom contribution is bound to be pretty small. It is true that 10 per cent. of our electricity is nuclear now. But even if all the five AGR stations come on stream and we have the 4,000 megawatt SGHWR programme, our contribution is bound to be small.

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Still on the subject of electricity, one of the features about the paper which surprised me is that it seems to advocate an increase in the use of electricity for space heating. I find this a strange proposition, and I wonder whether the Government will accept that it could be wrong.
It is not only strange. It is also unconvincing. All the evidence suggests that the use of electricity for space heating is one of the most wasteful uses of energy that can be imagined. This was pointed out by the household fuel efficiency figures in Table 9 on page 25 of the NEDO report on energy conservation in the United Kingdom. That compares the gross fuel efficiencies—the gross input as opposed to the net advantage—of different domestic fuels. Coal has efficiencies ranging between 29 per cent. and 68 per cent. For gas, the percentage is somewhere between 61 and 75. For petroleum, it is between 60 and 73. Electricity can show a gross efficiency of only 24 per cent. However much nuclear electricity we are able to provide in the years after 1985, I find it very difficult to believe that it can be right to go in for a substantial expansion in the use of electricity for heating.
Mr. Rost: Does my right hon. Friend accept that the basis for this suggestion is that by 1990 a greater proportion of the electricity in France and Germany will be nuclear-powered and combined with district heating?
Mr. Jenkin: My hon. Friend has beaten me to the next matter that I intended to discuss.
I am not sure that that emerges from the Community documents. There are some references to what is sometimes described as "waste heat" from power stations. Incidentally, I dislike that expression. It is waste heat only because we waste it. It is by-product heat which at present we hardly use.
These documents do not emphasise nearly enough the fact that, without the utilisation of by-product heat, the efficiency of electricity generation to provide space heating is very low—perhaps between 25 per cent. and 30 per cent.—whereas, if it can be used, it may get up to 60 per cent. or even 65 per cent.
Mr. Palmer: There are obvious doubts and difficulties about the use of electricity
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for space heating but surely the figures that the right hon. Gentleman has just given do not take into account the total process. Is he aware that the use of electricity for space heating is now increasing in the United States as natural gas supplies are running out?
Mr. Jenkin: That is quite right. In the United States there is a much more balanced load because of the air-conditioning requirement in the summer. When we would have a substantial peak winter demand I find it difficult to believe that we could usefully go for an increased direct use of electricity for space heating. I would much rather see development through the use of by-product heat and through the distribution of hot water. It is an interesting fact that transmission losses in transmitting hot water at, for example, 120 degrees Centigrade in properly constructed insulated pipes are less than the transmission losses involved in carrying electricity by cables over long distances. That is a fact that is not often appreciated.
The policy to use by-product heat is now recognised in all Community countries as essential. When I was in Germany in May I was told that they had embarked on a major study to see how they could increase the use of such energy. We should be doing the same. I welcomed the statement from the Electricity Council the other day. In one sense, it could be summed up as saying "Please, sir, it is not our fault". That may be true, but I think that it needs a greater effort on everyone's part to try to get this one off the ground.
My second main reservation concerns the import and export of oil products. The right hon. Gentleman did not mention this matter but his explanatory memorandum exactly reflects my anxieties. We need to look at it carefully. I need to say no more because I agree with what he wrote.
Thirdly, there is the question of aid for oil and gas exploration. At first sight that might appear attractive as most of the exploration would be bound to be on the United Kingdom Continental Shelf. However, we would need to go extremely cannily: timeo Danaos et dona ferentes. I fear the Greeks even when they come bearing gifts.

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I support entirely our right to regulate our offshore oil and gas fields. That is essentially a sovereign right which my right hon. and noble Friend Lord Carrington asserted two days after taking office. There has never been any difference between us on that matter. It is clear that the oil is ours. I want to be satisfied that the regulation could in no way be represented as the thin end of the wedge or that it could give others the right to have some influence over depletion policy. Depletion of a natural resource belonging to a Government must be a matter for that Government. That is the way in which the matter must be stated. I welcome the extract from the remarks which the right hon. Gentleman made on 17th December. We endorse that view entirely.
I now come to my first question. Perhaps the Under-Secretary of State will be able to answer this point. The papers indicate a target Community oil production figure in 1985 of 180 million tons per annum. Where did that figure come from? Last November there was an interesting report in The Guardian of a speech by M. Henri Simonet, the European Commissioner responsible for energy. The report reads:
"In addition, he said that if production of North Sea oil reached the 180 million tons mark by then—a target given to him by the British Government—the Community could make further savings in its balance of payments."
I have seen no other published figures which indicate that the Government have a target production figure in 1985 of that sort. Is the figure of 180 million tons in the Community document the same figure as The Guardian claims was given to M. Simonet by Her Majesty's Government? What would that represent as a surplus above our own requirements, recognising that there must be a balance of imports and exports to meet our own requirements? Is that 60 per cent. or 70 per cent. excess production? What does that mean for the rate of depletion of our oil resources? What assessment has been made? Is that the maximum output which the Government believe to be possible from the United Kingdom Continental Shelf in 1985 or some lesser figure that implies some degree of depletion control? We need to know the origin of that figure. I hope that the Under-Secretary of State will supply us with that information.
Mr. Alexander Fletcher: I think that my right hon. Friend is being a little unfair. He may remember that during a recent Question Time the Secretary of State for Energy was unable to give us a target for oil production for 1975, 1976 or 1977. To ask him about 1985 does seem a little unfair in the circumstances unless there is now a target for the current year.
Mr. Jenkin: I have no doubt that my hon. Friend is absolutely right. I well remember the exchanges to which he has referred. If the Government's policy continues as at present there will not be any oil at all. That is the serious matter.
I now come to my second question—namely, the financing of the energy programme. The figures are terrifying. Paragraphs 93 to 96 of the electricity document suggest that 170,000 million units of account will be needed for electricity alone. That is about £85 billion. That represents only two-thirds of the total. Half as much again is the total. That would amount to 250,000 million units of account or £120 billion. Do the Government regard that as remotely credible?
More relevant, what would that imply for the self-financing of the energy industries? What would the implications be for energy tariffs, particularly electricity tariffs? There is some suggestion in the documents that electricity tariffs will have to increase faster than the rate of inflation to provide the financing. Is that a conclusion which the Government would be prepared to accept as part of this massive policy or is it the case, as the right hon. Gentleman suggested, that a 160 GWe programme is itself unrealistic?
I think that finance is the biggest question mark of the lot. When we remember that we are considering only part of the total needs of the OECD we can understand that there will be an immense strain on the free world's financial resources to meet these energy targets. I believe that this matter was well put by Anthony Harris in an article in the Financial Times on 15th January. The article reads:
"Ducks, according to zoologists who have studied the matter, have a system of number which goes 'one, two, a lot …'; and it seems clear that there is some point at which human appreciation of large numbers also

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breaks down. That, at least, is the most appealing explanation of the fact that the OECD's forecast that energy investment between now and 1985 would total some $1,200 billion to $1,600 billion has attracted no attention at all."
It is extraordinary that it has not attracted attention. The financial resources needed to finance this programme at a time when the Eurodollar market will not be able to supply them must be apreciated. The Eurodollar market is not as flush with funds as it was in the earlier years of this decade or towards the end of the 1960s. That is a matter on which we need much clearer answers.
Perhaps one answer lies in a remark which attracted my attention which was reported in a recent Gulf magazine about shale oil, which in America requires huge investment. The president of Gulf Energy and Minerals Company, Mr. R. W. Baldwin, when he was giving evidence to the Federal Energy Administration in Washington, said:
"The development of our domestic energy resources, including non-conventional fuels, on a scale broad enough to contribute meaningfully to our energy supplies is so vast an effort that private industry must play a major rôle."
That falls strangely on European ears but I believe it to be right. The raising of equity capital for much of North Sea investment and other investment is essential. The tragedy is that at the moment it cannot be done.
I think that Mr. Baldwin's view is robust and realistic. Governments cannot be expected to finance this. I have been responsible for the Government's public expenditure programme—as has the right hon. Member for Battersea, North (Mr. Jay)—and I know the limitations imposed by all the constraints on Governments. One cannot see Governments being able to raise the volume of money needed. Nevertheless, is this plausible? What does it imply, if it is not, in respect of increased dependence on imported products? We should be grateful for answers to those questions.
I now return to the main—indeed, the only—point that I want to make in this debate. It is a point which is not in these papers but ought to be. EEC policy must be formulated against the background of energy developments in
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the world, and particularly against the background of other energy initiatives in the free world, and here I come to the international energy programme.
It is in no sense to devalue the Community to stress the crucial importance of these wider arrangements. The IEP, itself a product of the Kissinger initiative of January 1974, is, as the Minister said, supported by all parties. The agreement was signed in Paris on 18th November 1974, a week before the papers which we are debating today are dated. It provides for an emergency oil-sharing scheme of a far-reaching character, for the provision of information by the oil industry on the international oil market, for a framework of consultation with the oil companies, for long-term co-operation on energy, for relations between producers and consumers, and other matters. It is a wide, comprehensive agreement between the main oil-consuming countries in the world.
In some respects it goes further than the Community Governments, particularly on the question of emergency measures, where it is much more specific than the EEC proposals. For that reason I think the proposals in the 1964 document are subsumed by the International Energy Agreement.
Mr. Jay: Does the right hon. Gentleman think it is a defect in the Community documents that they apparently never mention the international agreement?
Mr. Jenkin: I am not sure it is true they do not mention it, at any rate indirectly, but I agree with the right hon. Gentleman that the policy makers in the Commission would do well to lift their eyes from their desks and look at what is going on around them. Perhaps their proposals would then prove more acceptable to those who might otherwise be inclined to reject them.
In other respects the IEA is much less specific, particularly on long-term co-operation between member States. But it is much bigger than the Community. It now includes 17 countries. Australia has joined, and Norway is hovering on the fringes, as well as eight of the nine EEC countries. As the Minister said, it excludes France but, as a result of the understandings reached at Martinique between President Ford and President

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Giscard d'Estaing, it is not impossible that that exclusion will come to an end.
The first point I make is that it is not sensible to debate important aspects of EEC energy policy except in the light of the IEA, and I shall come to one or two points in a moment. My second point is that it is obvious sense for the Community to approach the International Energy Agency with co-ordinated views and even, if possible, with a common policy. The members do not, of course, vote as a bloc. Each member has his own vote under Article 62, but the voice of the people of Europe is much more likely to be heard if we can act together and present a united front to the world. This is what worked so effectively at the Washington conference, following which the Chancellor of the Exchequer returned and reported on the decisions on monetary policy. This is just as important, and perhaps even more so, in the agency.
The view is gaining ground in relation to money surpluses that the problem will be much less serious in the long term than at one time had been supposed. The capacity of the oil exporters to absorb oil revenue will be greater than had been estimated. By 1978 the surplus may be half last year's figure of $55 billion to $60 billion, and by 1980 the surplus may have disappeared altogether. Therefore, the recycling problem is essentially short-term but it is, none the less, serious.
An energy programme of self-sufficiency, a more rational use of energy, the development of new sources, and research and development into new forms of energy are essentially long-term problems. These papers take us to 1985, with a forward look to 1990 in some cases, and provide target dates.
There is a need to develop a collective policy for Europe, particularly towards the International Energy Agency, the instrument of the consumer nations. If eight EEC members, and possibly nine, could join, they would be a most influential and valuable group in the agency.
Mr. Neil Marten: My right hon. Friend referred to a policy in Europe. Did he mean Europe, or did he mean the Common Market?
Mr. Jenkin: I used the phrase, as I think many of us do—
Mr. Marten: Slightly incorrectly.
Mr. Jenkin: —colloquially. I meant the Common Market. The other European members not in the Community which are members of the agency must play their own rôle.
When, in the Community documents, the Commission talks in the hydrocarbon sector of standardising the calculations of emergency stocks, my view is that this must be done in the light of the highly sophisticated arrangements that are being worked out in the International Energy Agreement. It is all there. The same goes for the system of allocation. It is all there and has been worked out, and the Community would do well to recognise that and not try to set up a rival show.
Co-operation with producer countries is a central feature of the IEA, and the Community would do much better, instead of trying to set up a rival show, to work to estabish Common Market solidarity within the agency. As I read these EEC documents, they give the impression of being a little unreal in trying to proceed in isolation, and I hope that the Government will point to the dangers of proceeding in this way.
All this is leading up to one central issue which I want to examine. Underlying all these documents is the desirability of reducing dependence on outside sources, and with that we must all agree. The EEC is 63 per cent.—nearly two-thirds—dependent on imported energy, and this is now overwhelmingly OPEC oil. Our aim must be to reduce our dependence. In the light of the events of last winter, our political freedom of action is threatened. The oil weapon is shown to be an instrument of formidable power, and all the talk about sovereignty, and so on, becomes a little meaningless when one is confronted with that kind of situation.
It is important to state this because throughout 1974 there was considerable confusion of thought among consumer countries about how we should deal with this situation. Many people, especially in the United States of America, have been arguing for some time that the highest priority is not to establish independence but to get the price down—it was the price that was intolerable. That is now recognised as a lesser part of the problem.

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It is not necessarily consistent with seeking security or independence.
More recently, the emphasis has switched to the need to promote investment in indigenous sources, even if they be high-cost sources of energy. The United States' "Project Independence", a survey of alternative strategies, showed that with $7 and $11 oil it was possible, in certain circumstances to achieve independence and to eliminate oil imports by 1985. What has emerged is the realisation that these are mainly high-cost sources—the outer Continental Shelf, shale oil, the tar sands in Canada, and so on.
Mr. Kelley: The right hon. Gentleman is boring the House.
Mr. Jenkin: I must try to do my best. If independence is to be achieved, billions of dollars will need to be invested in these high-cost sources, but there is the risk that they will be uneconomic if the oil price falls, and in a moment I shall come to a point which may be of more interest to the hon. Gentleman.
Mr. Kelley: Get to it.
Mr. Jenkin: It will be uneconomic if the oil price falls. This has been christened, with characteristic American obscurity, the "downside risk". The dilemma is that if there are no new sources of energy, if there is no way to break the cartel, prices will remain high and the economy vulnerable. But it we do invest in high-cost new sources, we may force the cartel to cut prices drastically and so render that self-same investment uneconomic, thereby incurring severe losses. "Catch 23" they call it in some circles.
So there was born the concept of a floor price for energy which has gained increasing attention over the last few weeks and was the centrepiece of the three-day discussion in Paris of the International Energy Agency last week. I believe that some such protection for investment in high-cost energy is crucial to the development of EEC energy policy. It is manifestly essential to the development of the United Kingdom Continental Shelf, which is rapidly becoming a very high-cost source of energy.
It is a considerable weakness of these documents that, although there has been
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much discussion, they do not reflect this or acknowledge it at all. We are told in the Press that there are divided views within the Commission and, indeed, within the Community. Italy and perhaps others with no prospect of indigenous oil are apparently highly suspicious of measures to prevent oil prices from falling. The Commission is said to frown on the concept of a floor price.
I understand those fears, but I earnestly hope that something of the sort will find a place in Community energy policy and will be acceptable. I know that it has been actively canvassed, but there is nothing in the documents to show the results. I hope that the United Kingdom Government are in favour, but we want to hear a little more about that. Perhaps the Under-Secretary could tell us something of the Government's attitude to the proposals for a floor price or some kind of protection against the downside risk.
That would be a sort of insurance policy, and, like all insurance policies, it may well never be needed. It can be argued that world oil prices are not likely to fall steeply. There will be a considerable demand for oil exports from OPEC countries for many years yet, and my guess is that the oil price will remain fairly high. Nevertheless, we should have some kind of protection.
So, in the medium-and long-term picture, which is one of sustained oil imports, we need an investment protection policy. No one can be sure that the price will not fall, and uncertainty is the biggest enemy of investment—and it is investment that we need now. We want to reduce dependence, and become more self-sufficient and diversify energy sources. If a fear of cheap imported oil inhibits these goals, that fear must be met.
Consumers may ask what is wrong with cheap oil. My answer is simple—what comes down can go un again, and we may be just as badly off as a result. It is true for oil and it is true for coal. I know the deep interest of the hon. Member for Don Valley (Mr. Kelley) in the coal industry. As the Secretary of State said, the language of the documents on coal is very similar to the language of the final report of the tripartite investigation. It speaks throughout of the need to restore the confidence of the coal industry in its future.

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What would be more likely to restore the confidence of the coal industry than its knowledge that there was a floor under the price, by whatever method it would be achieved, which ensured that coal would always be in demand for as long as men could mine it? Part of the problem with labour relations in the coal industry is that, after many years of rundown, some of those who work in the industry believe that they are at the moment enjoying what might be a very short-term bonanza and they are determined to make the most of it, whereas if they could really be convinced that there is a long-term future here, as I believe there is, more moderate and sensible policies would probably prevail.
So, not only for oil but also for coal, the concept of some protection against the downside risk could play an important part in the future energy policy not only of the Community but of this country. I urge the Government to press on their partners the view that Community support should be given for such a policy. It is not only desirable but essential if the objectives are to be achieved.
We on this side accept the Government's motion and do not intend to divide the House. We see every advantage in seeking the co-ordination of the energy policies of member States and developing a genuine Community policy. Although these documents do not get everything right, they are a perfectly acceptable start. Provided that we stay in, they could form the basis of a lasting and coherent energy policy for all our peoples in the Community.
5.46 p.m.
Mr. Arthur Palmer: Rising to speak on this important subject, I can best describe myself as a low-profile pro-European, but I do not therefore intend to neglect my critical faculties when considering these documents—if only because it is always the business of the House of Commons to look at everything critically. I agree with the right hon. Member for Wanstead and Woodford (Mr. Jenkin) that if there is one argument that cannot these days be used against the approach of the EEC in this area, it is the argument of national sovereignty. In energy matters, no country in the world should wisely suggest that it should run its policies on a "go-it-alone" basis or could succeed if it tried.
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The other day I came across some words written a long time ago by someone who I think can be described as a Socialist and who was much read, certainly in my political youth—H. G. Wells. A paragraph in his "Outline of History" well sums up my point of view:
"If socialists object to a single individual claiming a mine or a great stretch of agricultural land as his own individual property, with a right to refuse or barter its use and profit to others, why should they permit a single nation to monopolise the mines or trade routes or natural wealth of its territories in which it lives?"
It is in that kind of internationalist spirit, as a Socialist, that I look at some of the issues which we are discussing.
Apart from the views which may be held on the desirability or otherwise of British membership of the EEC, how can the nine nations whose territories geographically adjoin one another rationalise and improve their energy policies in their common interest, bearing in mind all the time their mutual world responsibilities? This is where EEC energy policy differs from other issues which we have considered in EEC debates of this kind—such as sugar policy or food policy.
In policy for foodstuffs the balance of advantage may well lie with wider trading relationships altogether, but when it comes to energy the vast capital costs naturally associated with its production put a premium on its physical regional organisation. For instance, although it is not in these documents—I suppose we can argue about what might be in them—a West European electricity grid could yield many savings in production costs. It could include the United Kingdom by connecting lines under the Channel, towards which there have been some small moves already. That interconnection could hardly be extended in physical terms to the Caribbean. I am saying, in effect, that a common energy policy for Western Europe is somewhat different in nature from common policies for those other economic relationships which cause so much controversy.
I have always advocated a total energy concept for coal, oil and nuclear fission. The main primary sources of secondary energy should be seen as complementary to each other and not as rivals. We must allow for temporary ups and downs in cost but I have never regarded those

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varying costs over a period as being significant. In energy matters there is a tendency for alternative sources of supply to balance each other out in cost terms. I think it was a failure to appreciate this that led this country to commit the follies of the 1950s and 1960s under Governments of both the main parties, when the British coal industry was almost deliberately run down on the ground that oil and nuclear power would soon be cheaper.
Mr. Patrick Jenkin: This point is frequently made in attacks on Governments of both parties but the history of the coal industry in that period shows that there was a continuous series of efforts by the Governments of both parties to delay and slow down the rundown of the coal industry. I do not think it is right to say that this was a deliberate policy. Both sides did their best to slow it down.
Mr. Palmer: As someone who followed this subject and took a fairly consistent view throughout the whole period, that was not my impression. It would be unfair to take the argument too far however. I sincerely believe there were some people holding ministerial office at that time who regarded the coal industry on cost grounds as something to be got rid of as soon as could conveniently be arranged.
Whatever other defects there may be in the documents in front of us, I am glad to note that the EEC draft policies for coal do not now make that mistake. In this up-to-date EEC strategy coal is intended to play a strong part in the energy mix, with the emphasis most naturally on the profitable and efficient areas of production in Western Europe, which would include the United Kingdom and Germany, but certainly not Belgium.
I am struck by the similarity of the per head consumption figures of energy in the EEC countries. Leaving aside Luxembourg, which is a rather special case, where steel production is carried out on an enormous scale in a tiny territory, and leaving out Italy and Ireland, which are countries with an accepted lower standard of living, the remaining six countries, including the United Kingdom, have roughly similar figures per head for energy consumption. Indeed, the figure for consumption per
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head in the United Kingdom is much the same as the average figure for the six leading nations. It is rather ahead of France and it is slightly behind the Federal Republic of West Germany. That brings home a truth that the gloomy prophets of disaster in the City of London and in the Confederation of British Industry should be made to understand, and it should hearten my right hon. Friend the Chancellor; namely, that in physical assets the United Kingdom economy is still extremely powerful. Certainly this is so with energy assets.
If our energy use per head is not equalled at the moment on any comparative basis by our wealth production per head, it is because we tend to overuse energy domestically but under-use it industrially. That sums up the position in the United Kingdom. The issue of energy waste should be the concern of my right hon. Friend, as I know it is. It has also been the concern of the Select Committee on Science and Technology, which is investigating the subject at the moment. As Chairman of the Committee I cannot commit the Committee, or its ultimate report, and I must not pre-judge its conclusions. The hearings have, however, been in public, so what has been said is common knowledge. We have received much evidence to show that the United Kingdom, as yet, is not ready to set targets for the avoidance of waste. That is a pity, because I think we should take the target system seriously. My own view, which I have already expressed in the House, is that over a reasonable period the United Kingdom should be able to save about 15 per cent. in overall energy consumption without loss of output in wealth terms.
The Commission suggests a savings target of 15 per cent. for energy consumption—by 1985. I had assumed that it could be done rather more quickly.
Mr. Rost: The hon. Member has just said that without loss of output there would be more production. Would he not agree that it would lead to an increase in the gross national product?
Mr. Palmer: That is probably the case. I was brought up as an engineer and not as an economist, and I am probably not using the terms as closely as I should. I meant to say that if we used our energy

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more efficiently, we could produce much wealth in real terms and it would add to national productivity. The figure given by the EEC is 15 per cent. by 1985, which I think is rather a long span. I notice that it proposes a reduced growth in internal energy use from 5 per cent. per annum to 3·5 per cent. against maintaining a GNP at 4·5 per cent. These are figures which my right hon. and hon. Friends in the Ministry should study with care for possible application here at home.
I should like, in particular, to refer to the evidence which has been given in public to the Select Committee on Science and Technology by Sir I. Evan Maddock, the Chief Scientific Adviser to the Department of Industry, and by the National Industrial Fuel Efficiency Service. In evidence to the Select Committee both bodies felt that a great deal more could, and should, be done to conserve energy not only domestically and commercially but in industry, including Government Departments. Their bias in the evidence they gave to the Select Committee was in favour of using the target system, as does the EEC in the proposals. I hope that my right hon. Friend will note that.
I intend to devote the remainder of, I hope, my fairly short remarks to another aspect of maintaining a proper balance in primary energy sources between coal, oil, natural gas and nuclear fission. On the subject of coal the approach of the EEC cannot be challenged too much. Some of its arguments sound very similar to those that were used in Britain not so long ago—indeed, they are probably being used by the National Coal Board and the National Union of Mineworkers still.
The EEC is saying that we should not use imported oil in power stations if possible, that we should instead concentrate on coal and upon expanding the nuclear power programme. That should not bother my right hon. and hon. Friends in the Department. My hon. Friend the Under-Secretary will remember how he and I used to sit together on the Opposition benches below the Gangway and challenge repeatedly the burning of oil in power stations. The new view of the EEC coincides with our view, and it would be a little silly if the Department were now prepared to sanction the burning of more
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oil in power stations while we are still dependent upon imported oil.
I come now to the size of the nuclear programme. I will not go into the matter in too much detail because I had the opportunity just before Christmas of raising the subject on the Adjournment. I argued then, as I argue now, that the United Kingdom has chosen the right type of reactor for the future. We are to base everything upon the steam-generating heavy-water reactor, known popularly as the "steamer". We made that important decision, unlike the French, who are very much wedded now to the American light-water reactor. They abandoned their own gas-cooled reactors some time ago; they have a tendency to say that if they do something it must be right and it is a pity, of course, that the British have not followed suit.
However, be that as it may, I maintain that we have been right on safety and other grounds to select the heavy-water reactor, and I believe we should continue with it fast on a much expanded scale in collaboration with the Canadians who have a similar programme for heavy-water nuclear production. There is only a slight difference in that the Canadians use natural uranium while we propose to use slightly enriched uranium. The British programme is too small in relation to need. This fact can best be illustrated by an examination of the size of the three programmes we have undertaken since we began nuclear electricity production in the 1950s.
The first programme, which is now pretty well complete, was for the Magnox stations and was for 5,000 MW. The second programme, unhappily not yet complete, was the AGR programme which was for 6,000 MW. Now, all these years later, with all our experience and knowledge in these matters, and with the major energy requirement which there will be in the future, we are proposing a third programme based on the steam-generating heavy-water reactor of only 4,000 MW. The Minister was right to claim that in the actual production of electricity we are so far ahead of other countries, but these figures for future capacity represent a retreat, not an advance.
The size of the French programme is staggering, but so also at one stage was

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the nuclear programme put to the Government and the Select Committee on Science and Technology by the Central Electricity Generating Board. That involved a much larger programme than we are now contemplating, as my right hon. Friend knows. The chairman of the CEGB urged that size irrespective of which nuclear type was chosen. Therefore, I suggest to my right hon. Friend that if the Commission is asking us, as it is asking other West European countries, to have a large nuclear power programme, we should not sit back complacently and suppose that we are right to go for a small programme. Those countries may be right. Without committing ourselves to the EEC figures necessarily we should plan for a very much larger programme of nuclear stations than we are at present proposing.
The Americans have more or less a monopoly, direct or under licence, of the European market with their light-water reactor. The British decision to use the heavy-water technique backed by the considerable resources of Canada means that we should be urging our partners in the EEC to take development of the British heavy-water reactor as seriously as they take the American version. We do not want to cause unnecessary fear, but there are much greater risks with LWRs than with other types. The Americans have recently taken a number of their reactors out of service because slight cracks are developing. Many of us fear that if something goes seriously wrong with a light-water reactor anywhere, since there are so many in use throughout the world it might lead to a general public outcry and to demands for a shutdown of every such reactor. Therefore the argument for diversity of reactor type in Europe as elsewhere is a very strong one, and it is the business of British Ministers to urge the adoption of this approach within the EEC. This is a field where our experience should count for something.
6.8 p.m.
Mr. John Davies: May I thank the Government for affording time for a debate on these instruments. I do so on two counts. First, the extent of the brief debate on 3rd December left a number of hon. Members dissatisfied and it is advantageous that we should be able to devote additional time to the
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subject. Secondly, the debate fulfils the undertaking given by the Leader of the House in the last Parliament, which I am glad to see is borne out in this one, that four full days would be allowed during the parliamentary term for discussion of matters of primary importance in the EEC context. This being the first of such occasions, it is worth noting the fact and thanking the Government for it.
The very fact that we are debating energy as the first of those occasions is an illustration of the importance of the subject. However, it is interesting to recall that the formulation of an energy policy was not one of the original purposes of the Communities. The Treaty of Rome made no such provision. Euratom provided for some part policy within the framework of energy matters generally. This ever-growing issue has become one of ever-growing importance, and it has occupied the attention of the Community more and more as time has passed, notably in the meetings of the Heads of Governments in Paris in October 1972 and again in December last year when they reinforced their belief in the whole principle of an energy policy for the Communities.
The two Front Bench speakers have commented upon the size and complexity of the papers, and with good reason. They have both seen parts to accept and parts to reject in them, and that seems reasonable too. The papers themselves, despite their somewhat voluminous character, seem to me to be well drawn. They are exceedingly interesting and thoroughly studied. Of course, there is so very much that would need to be adjusted in terms of the normal negotiations which take place. But it would be a pity to assume that, because the papers are voluminous, they are therefore wordy and useless. That is not my view.
The speeches we have heard from the Front Benches tend, however, in some way to cloak what is none the less an absolutely crucial issue from the point of view of Britain in relation to its future membership of the Community. The issue of energy policy and Britain's adherence to it, and the whole of Britain's relationship as a member of the Community, able either to stimulate or to forestall the pursuit of energy policies, is a crucial issue for the future.

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In value terms it vastly outdistances anything which could possibly be the outcome of the renegotiations. For instance, we are talking in terms of decisions made about energy which could have the most penetrating effect not only on our economies but on our whole life-style for the future. It would be wrong to imagine that there is not involved in these papers an issue of the most substantial importance to this country and to the whole of Europe.
The issue before us is whether, in the face of what is a mounting and more and more recognised problem, to combine with neighbours to face the challenges and dangers and, indeed, the uncertainty of the remainder of this century or to seek to go it alone. That is the crucial nature of the decision before us, and some reference to it must be made, particularly in the light of the oil crisis dating from the latter months of 1973.
Major industrialised nations and groupings of industrialised nations the world over have recognised what a critical issue is represented by an adequate supply of energy. It seems to me that, for the first generation or so after the war, the constant supply of energy was almost taken for granted. People did not register the fact that one could be deprived of it at a certain time, or supplied with it only at such cost as would put the general realisation of their normal living standards in doubt. This has become so clear now that we all seem to think that it was always recognised. It is not so.
Countries are now facing the need to deal with their security of energy supply as a matter of absolutely first priority in national policy. The clear way in which they have gone about it in the light of the experiences of the last 18 months—seeking to diversify both sources and forms seeking equally to concentrate those sources and forms in ways which are valuable nationally or continentally where continents are concerned, and seeking to diminish reliance on external dependence—has been the worldwide pattern.
Whether one considers the policies adopted in North America or those adopted in Western Europe or in Japan, in the last 12 months one sees the constant pattern of these groupings of countries realising that if they went short of
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energy they went short of their life-style, and they have had to work out a system to give them greater assurance for the future. But they have all recognised in so doing that an immense resource requirement is necessary if one is to attain those objectives and that they can be met only by really powerful economic groups.
It is beyond the capacity of individual countries, even countries of the stature of some in Western Europe, to achieve on their own the degree of security and non-dependence which we seek—except, of course, in cases like our own, which are special cases in relation to that of the industrialised world. The essential need of most of these countries is to shift a major part of their energy demands to non-vulnerable sources. They, of course, look to the rapid development of the generation of electricity by nuclear means and, therefore, the use of electricity as one of the primary methods by which that shift should take place.
For the moment, the whole endeavour worldwide seems to coincide with the views of the oil-producing countries themselves. They in turn have expressed anxiety and concern lest the consumption of their precious material goes at a rate which is inimical to their own best economic interests. They therefore fear that the over-rapid exhaustion of these resources could be damaging to them. They have not seen objections in the tendency within the industrialised world to seek to make a mammoth shift.
It also coincides with the other concerns which have been expressed, within the framework of the Club of Rome and other like bodies, about the excessively rapid use of raw materials worldwide, and particularly the burning up of valuable commodities like hydrocarbons which have a variety of alternative uses. Thus, all the lines of action debated so widely in the world have not at this stage met any strong resistance.
The Community's part in all this seems to have been, understandably, defined in certain fairly clear terms. The first is to go in for a major programme of hydrocarbon use economy. There is no doubt that we ourselves and the Government can perhaps be criticised for an inadequate approach to this major problem of economy in the use of energy, but the great purpose of the Community's plan

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is to bring about a very substantial reduction in energy used.
The second part of the programme is clearly to go for a major promotion programme in the discovery and development of local fossil fuels within the Community area. The third part of the programme is to procure a joint capability in our nuclear generation. The fourth is to assure access to and enrichment of the necessary fuel, particularly uranium, for the purpose of meeting that nuclear demand.
Allied to these principal pillars of the Community policy has been the need to pursue a common line of action in relation to the security of the population and the restriction of pollution, as well as to provide for solidarity amongst the Community countries in the event of external obstacles to supply and the creation of emergency situations.
I hasten to assure my right hon. Friend the Member for Wanstead and Woodford (Mr. Jenkin) that the Community's purpose is not at all in such matters to act in spite of the International Energy Authority. On the contrary, from my contacts with the Community I suggest that the whole purpose is to find means of ensuring that the Community as a whole represents a valid part of the authority and can usefully contribute, but as a powerful group, to the formulation of its policies. That is where I look forward to a European economic policy, and it is the way in which the Commissioner concerned looks, together with that part of the Commission over which he presides.
Mr. Patrick Jenkin: Does not my right hon. Friend agree, however, that it might be better if there were more overt recognition of this fact in the Community's documents? I can find practically nothing about it in them.
Mr. Davies: I think that my right hon. Friend has not had as much experience as I have had of trying to follow the extraordinary deviations and deviousness of the Community mind. The Commission takes a long time to produce many statements. I have no doubt that it is still catching up with the development of the International Energy Authority.
Indeed, few of us perhaps, as my right hon. Friend rightly pointed out, even yet
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recognise the full intensity of the commitment that the Government have taken on in terms of support of member countries and of the authority in the event of an emergency. We have taken on an absolute commitment in respect of any production we may get from our coastal waters to support that operation in terms of an emergency. There is no doubt that the extent of the activities of the authority are as yet only partly permeating our own thoughts and, indeed, the thoughts of the Community.
The alternative to participating in this major programme of common effort is to pursue an individualist policy. That is conditioned by what I have just said on the subject of the commitments that this country has taken along with others—but not, for instance, Norway—in relation to the commitment of its potential indigenous crude oil supplies to support others in an emergency.
We could have a go-it-alone policy. Such a policy for Britain inevitably involves a fossil fuel energy policy. If we are to rely on our own resources to meet the energy needs of the remainder of this century, we shall not have access to the capital required both to develop the major fossil fuel resources needed to give us that assurance and to pursue the extensive development of nuclear energy, a programme which has been so much part of our pattern of activity over the past 20 years but which we could not sustain alongside the immensely demanding requirements of promoting the necessary fossil fuel policy.
It is useless to imagine that on the basis of a go-it-alone policy we could maintain a capability in every field which is within the framework of future energy demand and need, as will be the case in the United States of America, or perhaps more properly in North America as a whole, and undoubtedly in Western Europe. We shall have to choose, and our choice will have to be fossil fuels, with all the risks that that might entail for us.
The choice of such policy would run against the general tendencies which are prevalent throughout the industrialised world. We should find ourselves pursuing lines that were not parallel with the countries of North America or elsewhere. We should be pursuing lines that were peculiar to ourselves.

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The choice between these two alternatives is not all that obvious. There are some substantial arguments which might make us contemplate a go-it-alone policy. If we believed that oil prices would be maintained in real terms at high figures, and that we could indulge in a virtual bonanza from our own resource area, we could well imagine that we had a major advantage nationally in simply pursuing that to our own benefit, despite any alternative consequences it might have.
There is the added and not insignificant importance of the feeling of self-reliance which would be implicit in such a policy. In all reason, I do not subscribe to the view that that would be worth while. It would have us running unreasonably high risks. We are not yet sure of the quantitative aspect of our own resources. It required only a certain threatening attitude by the Government last year to procure a sharp reaction among those concerned with the production of these oil resources and their development. We are now treated to the somewhat unedifying spectacle of the Government's going into reverse on the matter to cajole back into the fold people whom they had succeeded in frightening out of it as recently as a few months ago. The birds in the bush are by no means certain not to fly off. Here I refer to the North Sea and, as we have seen recently, estimates made of the Celtic Sea.
Secondly, the price position is by no means certain. My right hon. Friend the Member for Wanstead and Woodford spoke about this, and I shall not labour the point. If the major consuming countries succeeded in meeting energy demand from other resources, there would be a totally different supply and demand pattern from the current pattern of crude oil and gas supply worldwide. If that happened, the present apparent solidarity to maintain high levels of crude oil and gas pricing would be under great pressure. We might well find ourselves with an asset of depreciating value rather than an increasing value, the more so if we take into account the vertiginous level of costs which we are reaching for development and production in the fields concerned. We are seeing the gap profit sharply narrowing even at present oil prices. If those prices are not maintained at their current level, or if they fail to
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rise in real terms with the value of money, that pressure will be increased.
Mr. Hooley: The right hon. Gentleman is under a serious illusion if he supposes that the major oil-producing countries will allow their revenues to fall colossally in real terms. He must appreciate that they could restrict output way below their present levels and still have massive overseas earnings.
Mr. Davies: Of course that is true, but the hon. Gentleman is looking at the matter with far too short a perspective. In these issues we are dealing with decades and not with the next year or two. In terms of decades there can be a massive replacement of energy demands. If the intentions of our North American friends are fulfilled, there will be. Over the rest of the century at least, which is the period we are speaking about, that can have a big impact on price levels in the oil industry. It would be folly to imagine that one can rely on a sustained high level of oil prices in all circumstances for an indefinite time. I share my right hon. Friend's view that from the point of view of the security of investment there is every reason to support the Dr. Kissinger view over the need for a floor price to ensure investment.
The Under-Secretary of State for Energy (Mr. Alex Eadie): There is some logic on the right hon. Gentleman's side but I hope that in answering my hon. Friend the Member for Sheffield, Heeley (Mr. Hooley) he will not overlook the fact that we do not want to kill research into other forms of energy and their development. He must concede that oil and other fossil fuels are all wasting assets. Incidentally, I hope not to make a political point.
Mr. Davies: The Minister has used the ball that I teed up to drive. I favour a widespread approach to an energy policy of the kind that the Community puts forward. It would be dangerous to become involved entirely in a single area of effort irrespective of the many other important areas in which we should be concerned but which unfortunately we cannot undertake alone.
On balance, having made a serious assessment of the alternative virtues of two different policies, I favour a joint and

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concerted policy with our fellow members of the Community. That is wise.
There is much to be done in sharpening up, changing and improving a great deal in the papers, but the broad purpose is right. It is to have a major effort, and it involves us in making commitments as well as receiving them. Commitments will be required on both supply and price of oil, commitments which by no stretch of the imagination limit our capacity to be masters in our own house on the subject of production or to be the licencegiver, the retainer of the whole economic benefit of the marvellous asset we have found round our coast. There matters are not in question.
In pursuing a common policy with our European neighbours we must give commitments about support in times of emergency, the non-transgression of Community principles, free trade activity across Community borders and so on. Such commitments must be part and parcel of any policy into which we enter. We should pursue to finality the purposes of these operations and should regard ourselves as a major stimulus in reaching an effective, comprehensive Community energy policy.
6.30 p.m.
Mr. William Small: It is always a pleasure to listen to the right hon. Member for Knutsford (Mr. Davies). He always puts forward thoughtful propositions and ideas, and to that extent the House is indebted to him. It is also indebted to the Opposition Front Bench spokesman under the new régime, the right hon. Member for Wanstead and Woodford (Mr. Jenkin). Apparently there is to be no vote tonight. That augurs well for those of us who are likely to remain on these benches for many years to come, despite the "Eurovision contest" which we have had here and in Europe almost every night.
Nations are judged by the amount of horse-power at the elbow of their work forces. The important consideration is the area from which that horse-power comes. At the Copenhagen summit at which Dr. Kissinger was present, the Shah of Iran was almost fixing the price of cereals on the American breakfast table. Then a formula was devised and the proposition was that we should go nuclear.
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It seems that the nuclear age dawned after the Copenhagen summit. According to the OECD documentation, there is a 40 per cent. external energy requirement and a 60 per cent. internal energy requirement, with the majority of it being nuclear. In essence, that means building 200 nuclear power stations between now and the year 2000 and a tenfold increase in radioactive waste as a by-product.
We cannot for much longer run society on windmills, and, therefore, oil prices may or may not fall. All countries have a vested interest in recycling petrodollars in their own interest—that is, to solve their balance of payments problems. In terms of the Euromarket, most of the money is being invested in areas where uranium fossil has been discovered. To that extent there is a minuscule attempt to invest the money rather than recycle some other country's national debt.
I hope that in discussing matters of this kind we shall not become overawed by people who have vested interests in being anti-nuclear. That is illustrated by the propaganda issued by the oil companies which have a vested interest in changing the energy source Italian-style. However, the German economy has a tendency towards nuclear innovation. The world stands still no longer. South Africa, with a natural uranium base on its doorstep, can build in nuclear terms at a rate one-third cheaper than can be achieved by British technology. According to the Ecologist, the faith of the aborigines is centred round the green ant—a living symbol of another world. The aborigines are living on top of the richest uranium deposit in the world.
In the Observer of 7th February there was a story about a trade union organiser whose death in a car accident still puzzled the FBI. It was claimed that she had had evidence about the recycling of plutonium in a private company, and the dangers inherent in recycling and in handing over these matters to private enterprise to the extent that safety standards are not being met is still a matter of investigation. I hope that these matters will be investigated. We have had one Windscale when there was a leak in the sense that safety apparatus did not register for three days. As a result, cars and other items were contaminated. We must study the duality

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aspect of the use of nuclear energy. If we go against public opinion in these matters, we may well retard the development of nuclear power.
I used to be an engineer millwright, but today we no longer talk in those terms. Tomorrow's man will be the nuclear technician. It will be his sensitivity, judgment and training that we shall value, and the quality of his training must be such that we do not have a second Flixborough as a result of someone saying "We need a 28-in. pipe, but we will use a 20-in. pipe and that will cover it".
The Americans were uncertain about the light-water reactor and, therefore, they asked Professor Rasmussen to look into the matter. On 10th September, 14 volumes and $3 million later, he gave clearance for the light-water reactor. On 25th September the Americans closed 21 nuclear power stations. I do not wish to go through the names of all the stations involved, but the documentation proved that the Press was as exotic and alarmist as ever. It is time that we had a slightly less alarmist Press, with reputable reporters or reputable people not connected with newspapers, making responsible examinations before reports are published.
The mental age of this industry is 21 years, but we have not yet experienced the safety problem of a station mothballed after 25 years' active use—in any country. I live seven miles from Hunterston A and B. The Scotsman talks of a £700 million investment on Hunterston C. If we have Hunterston A, B and C, there will be a clutch of nuclear material there and we shall be in trouble. The public will not accept it.
We should consider the arguments that were on the agenda of the Conference of the Law of the Sea. We should consider how far we can use the sea as a dump. If the sea becomes a dump for atomic waste which lives for 250,000 years, what will be the result? Will it be Ezekiel's valley of dry bones?
It has been reported in America that there are 170 people who are carrying a plutonium load above the risk level. That is on the recycling issue alone. I do not want to make a long speech. I merely want to quicken the pulse and excite the imagination beyond the profile of the man wearing a bowler hat and striped
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trousers who carries a good pen and writes well. The outside world is not like that, neither are the people whose daily lives will be affected.
I used to work in an explosives factory where colleagues died of glycerine heart. The doctors would never diagnose glycerine heart, but everyone knew that that was what those colleagues died of. We are approaching the same kind of problem. A new element is entering our lives. We have to face an increase in leukaemia in the future. I am not scare-mongering. I am reasonably well read on these matters. Hygiene and health standards should be approved both by European doctors and by doctors who leave the country, so that people may be protected.
I welcome this opportunity for hon. Members to realise the new elements in our way of life with which we shall have to contend in the future. I repeat the phrase vestigia nulla retrorsum. In ancient Rome there were no footsteps back from the lion's den. The nuclear age has dawned.
6.43 p.m.
Mr. John H. Osborn: I should first like to congratulate the Secretary of State for Energy on his summary of the difficult papers and for trying to put before us exactly what is going on in Europe. We have had only a few days to look at the Community documents, and I find that they are confusing and hard to absorb. I am a rapporteur on this subject in another assembly and I realises that we in the House have a long way to go before we can present the problems easily to ourselves, let alone to the country at large. The message I should like to come from this debate is that the Commission must give us less paper, summarise its conclusions more aptly and state more clearly what the Community should be doing and the effectiveness or otherwise of each country within the Community.
I agree with my right hon. Friend the Member for Wanstead and Woodford (Mr. Jenkin) and others that energy is much better looked at by Britain as part of a European Community pattern, and I shall elaborate on that in due course. The saving of energy and of imports of oil is all-important at this time. I should like to comment on figures which I have read

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today. Whereas Denmark has made a 25 per cent. reduction in consumption of oil since last year and other countries have made a 13 to 15 per cent. reduction, we in Britain have made only a 9 per cent. reduction.
On the question of avoiding waste, the domestic consumer has to pay for energy consumed in the home and the cost—certainly for the pensioner—is a reality that faces the individual and is perhaps the greatest possible force in reducing consumption. That is also true of industry. We have before us the NEDC report which is of value. Companies, particularly in the private sector, must reduce costs while still maintaining standards of safety and the highest possible power to the elbow of the worker. I consider the NEDC report to be a practical step in the right direction.
I want to come back to the European energy policy. I thank my hon. Friend the Member for Cheadle (Mr. Norman-ton), who will reply to the debate for the Opposition, for helping me in the Council of Europe by making me understand some of the changes that have gone on within the Community. Although we are debating a Community policy, surely we must also consider the policy in so far as it affects the whole of Europe.
Last summer the Western European Union discussed the need for a positive policy for the construction of reactors, and I referred to that in the debate in the House at that time. Industries in Europe are far too fragmented and far too nationally oriented. We need not to seek isolated solutions within the national framework of nations but to come together and adopt common policies on the type of reactor and the sharing of the cost of development. I hope that the Minister in his reply will be able to tell us what progress has been made in the last six months and what initiatives have been taken by the Government to achieve these ends.
I regret the isolation of this country last summer from some of the European activities. On the other hand I welcome the decision to develop the steam-generating heavy-water reactor as an alternative. The boiling-water, pressure-water and other light-water reactors have not provided all the answers for Europe
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and the United States, as the hon. Member for Glasgow, Garscadden (Mr. Small) said. We have to accept the comment of the hon. Member for Bristol, North-East (Mr. Palmer) that the British programme as it is developing is too little and perhaps too late. I hope that we in Britain ensure that our development will continue at the rate recommended in Europe.
The Western European Union and the Council of Europe have before them the whole question of safety. At present two problems are being looked at. One is energy in the environmental context, and safety. The second is the energy problem in the whole context of the Club of Rome limits to growth. These, as has been pointed out, are the issues facing every nation. Without energy as a resource our whole way of life is at stake, and the dangers are as great now as they were six months ago.
We have before us for review the energy prospects to 1985, in two volumes by the OECD. Again what is the significance as far as Europe is concerned? I think the lesson is that in the short term, the next 10 years, the same sources of energy will have to be used, because the momentum of change in the vast technological complexes is slow. Oil and natural gas will continue to be used. Coal will be of greater importance. This reaffirms the Community report.
The most interesting development is the fact that more and more oil will be developed off the shores of the continents, and new techniques, perhaps up to 1,000 metres or, say, 3,000 ft., will be developed within the next decade. But this involves immense investment in capital equipment and technology.
In the medium term, 1985–2000, new techniques will be evolved for extracting oil from depths of well over 1,000 metres. It will be reasonable to look forward to the new types of reactor, the high-temperature and fast-breeder. Again, however, each country can be involved in immense capital development unless the development is shared, not only on a European scale but with other nations also.
In the longer term, after the year 2000, certainly we shall have fossil fuels and the development of coal, but we must bear in mind that new generations of citizens will not readily go down deep pits. Until

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automated mining comes along or until we have better resources—and these must be basically outside the European continent—fossil fuels will involve transportation and importation because in the more modern ages men will become more and more reluctant, or it will become too costly for them to go down to great depths. I am talking of the long term, of 25 years hence. We must face up to this in this country. By then we should have nuclear fusion. Perhaps fast-breeder reactors will be well developed, and we can look to geothermal and solary energy.
Returning to the subject of nuclear energy, as has been mentioned already, the scale and complexity of processing and reprocessing fuels on a national let alone a continental or international scale is vast. This is where the nations of Europe must come together. I welcome the development of the centrifuge processes at URENCO and CENTEE. I very much hope that the targets of 200 tons per annum at Almelo and CENTEE will be achieved and exceeded.
I want to return to the question of waste disposal and safety. Within European countries, the Netherlands particularly, there is great concern about safety. There is normal leakage which can go up the chimney stack, a minimal leakage to coolant waters which is no more than natural hazards from other sources, which one can monitor and can live with. There are the large-volume, short half-life wastes, and techniques have been devised for dumping them in the sea. There is a demand that any form of dumping in the sea should be stopped. This has been debated within the Council of Europe. We have the benefits of OECD reports on the techniques and how they can be applied. But I was depressed when this matter was raised in the Council of Europe. The Minister of the Environment representing the Ministers of Europe, Mrs. Buckland from Norway, was unable to give an assurance that the techniques approved by the International Nuclear Energy Agency, approved through the OECD and NEA, are adequate and safe for the people of this country, Europe and the world.
Ministers must pay attention to the expert advice they have had and give the assurances which will allay the growing
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fears which have been put to Members of Parliament from responsible bodies. Many professors and others in departments of engineering, physics and power are much concerned that perhaps the administration have overlooked these matters. This, I believe, is all-important.
I have dealt with Community policy and European policy, but this must be viewed within the context of the International Energy Agency. I welcome the Nixon, now Kissinger, initiative. It is important that we know what those guidelines are, particularly for dealing with emergencies. It is important that as a nation we are prepared to make our contribution. But I go on to something much more urgent. In the United States the AEC has closed down, but there is a monitoring agency for nuclear safety. There has now been developed an energy agency within the United States. This is a dynamic body, which I very much hope to have the opportunity of seeing myself—although I saw the AEC last year—and it is co-ordinating developments on a vast continental scale in the United States.
There is reference in the documents to an overall authority which would over-ride the sovereignty of countries. I hope that the British Government and this House will look at an equivalent agency on a European scale—not necessarily a Community scale—which can dynamically look at the problems as we see them in Europe. Therefore, I do not shy away from a supranational authority. I hope that we shall endorse and support that.
To summarise so far, we now have an indication that the energy pattern and energy demands that are likely to face Europe will cause the consumption of solid fossil fuels to be greater. But where are those fuels to come from? Which countries are to produce them, and how? We should have more details as to how this is to be worked out.
The forecast for consumption of oil, if we differentiate between initial forecasts and objectives, is that, instead of almost doubling the initial forecast, the objectives will remain steady to 1985. How shall we fare in this country and achieve this? The consumption of natural gas will be up over this time. But, above all, there is a large budget for the increase of hydro, geothermal and particularly

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nuclear energy, and the initial targets are succeeded by objectives considerably greater.
I come to one aspect of the changes which will arise from the increased use of electricity. I do not want to get involved in the merits and demerits of electricity for space heating. I am not certain that I entirely agree with my right hon. Friend the Member for Wanstead and Woodford but if nuclear energy turns out to be a cheap source of energy it is possible to waste it and still get cheaper heating for our homes, provided there is adequate insulation.
I believe that we must look at the impact of a changing energy pattern in transportation. In the documents there is a reference to greater emphasis on public transport. The SMMT has produced a research document, with a foreword by Ray Brookes, on the energy crisis in the motor industry. How will the world's motor industry change? What kind of vehicles will be produced? Will there not be a new form of transportation? There is a demand that we should reduce the road programme even more. I do not share that view, because individual journeys of passengers and freight are essential for a flexible, prosperous and civilised society.
All these matters must be looked at, and I hope that when discussing these matters in Brussels the Minister will bear in mind that the creation of more energy as against the conservation of energy, is more essential if we are to raise our standards of living, and certainly if we are to maintain the present standard of living in the continent of Europe.
Mr. Speaker: May I make a special appeal to the House. There are 12 hon. Member from the back benches who want to catch my eye. The time remaining for this debate is 120 minutes. The mathematics are very simple. I appeal to hon. Members when called to try to keep their contributions short.
7.0 pm
Mr. Richard Kelley: It is part of the arrogance of this House that we select the subject of energy policy as a matter for our attention. Who determines what energy is available? Energy
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is derived from the dynamism which the planet acquired from a solar source when it shot into orbit. We have to depend on that source of energy to meet our needs, and any policy that we decide relates to that energy source.
I remember sitting on the Opposition benches many years ago when the House often discussed whether we should devote our capital resources to the development of deep coal mining or whether we should depend on some alien source of energy which was available at that time—namely, cheap Middle East oil. The House, in its wisdom or otherwise, decided to close collieries and as a result reduce the output in the coal mining industry from about 230 million tons to 180 million tons. In subsequent years the figure dropped even further, and we had to depend on the alien source of energy which primordial forces had deposited on somebody else's territory.
At that time we thought that there were military forces at work behind the idea of providing oil from that source at a certain price. We felt that the military balance in the world might change in the years to come. It was thought that the Soviet menace, as one then saw it, might develop and become so dominant that this would have a considerable effect in a military sense on world energy sources. The then policy was to close down our pits. We now find that the Arab nations are able to dictate the price of their oil, and that is the situation that faces many Western countries.
At the time it appeared that the people in power were unaware of the political considerations involved in the availability of cheap energy from the Middle East. Therefore, they went on merrily closing down pits and cutting down coal output and decided to rely on cheap oil from the Middle East. That was what happened—until the time when the Russians were able to provide Egypt with tanks and Syria with strike aircraft, and when the Americans were no longer able to provide a highly organised military base in Israel to maintain Western dominance in the oil area.
We now face a situation in which we pay 73p a gallon for four-star petrol and high prices for fuel oil, with paraffin at 52p a gallon—a commodity which not so

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long ago cost 2s. 1½d. per gallon. Those are the facts of life we have to face in deciding upon energy policy. Therefore, energy is not a matter which we can discuss as a static factor in the lives of our people. The situation changes, and it will continue to change.
We are faced with the prospect of having to develop our own energy industry. I shall not go into the involved questions of heavy-water or light-water reactors and all the other technological advances. I believe that they are matters for scientists; they are certainly not matters for this House. The question we have to consider in solving the energy crisis is what is available to us as a nation. Each time we switch on our television set we see stamped across the screen "Save it"—in other words, we are constantly exhorted to save energy. The only way we can save energy is to produce the stuff ourselves. We can do that only by providing sufficient incentives for people to enter the coal mining industry and to produce the coal which, in turn, will give us the energy we require for our industrial and heating purposes.
We now face a problem of a wage conflict in the mining industry. Some people say that the miners are asking for the moon, but they are asking only for something that will induce people to go into the mining industry to enable our nation to produce 160 million tons of coal a year. Is there any hon. Member who feels it his duty to get down to a job of work which will help this country to beat the energy crisis? Will any hon. Member go into the pits, pick up a shovel and throw coal on to the conveyor belt and earn the enormous income that miners are supposed to pick up? There are over 630 Members of this House, and excluding those who are too old to do the work, including myself, and of course certain other categories, there are probably 250 Members who could go into the mining industry and help to produce the coal. But they do not do so because it would not pay them enough.
We all know about the large number of young people who appear on our television screens strumming their guitars and producing discordant notes, which they call music. We know that those performers can earn £100,000 and have large houses in Buckinghamshire. The point
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I am making is that we must try to make mining worth while for young people to go into the mines and to win coal rather than wanting to play their guitars. When Mr. Scargill talks about the miners' increase being only a bag of crisps, he is not talking a lot of nonsense. He is iterating the facts of life. If we want coal, we shall have to attract people to the industry to dig it.
Mr. Jim Lester: Perhaps we should report Mr. Scargill's remarks accurately. He was not talking about miners' pay in general. He was talking about an amount of £10 being equivalent to only a bag of crisps which is a very different thing.
Mr. Kelley: Mr. Scargill was obviously speaking metaphorically. He was making the point that an award of £10, after deduction of income tax, graduated contributions and a number of other things, would leave the miners with the equivalent of a bag of crisps.
Mr. Lester: I do not want to be difficult, but judging by what the hon. Gentleman says the miners must be fairly highly paid to have to pay so much tax on the £10 increase as to bring the net sum down to the equivalent of a bag of crisps.
Mr. Kelley: Yes. I hope that the miners are reaching such a status that people will consider whether to go into the City of London or the Stock Exchange, to become solicitors, barristers or the like or to go into the mining industry. The miner today, in the crisis facing this country, is a damned sight more important than a solicitor or a barrister or, for that matter, a school teacher.
We have chosen to debate this subject today because of the crisis in which we find ourselves. We require miners to get the sources of energy for us. The more they are paid, the more likely we are to get people to go into the mining industry to get the energy sources that we need. Therefore Arthur Scargill, in using flamboyant language, is only epitomising the situation in which the nation is placed. If we must have an incomes policy—I am not talking about the restriction of income—it must induce people to go into those trades, professions and occupations which

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will enable the nation to survive this crisis.
We should devote ourselves to devising means of developing our indigenous resources. We have regarded external sources of energy—Middle East oil, heavy water reactors, nuclear fission and nuclear fusion—as elements which would be more likely to provide the solutions to our problems. None of them has been able to solve our problems. We now have a restricted source of oil which will probably be even more restricted in future, despite what Sheik Yamani has said.
We are talking about 1980 as the date for getting our own oil landed on the Scottish coast. We shall probably have to extend that date because of capital restrictions. But we have a labour force in the mining industry which can be increased to produce 150 million tons of coal not at some time in future but within 12 months. I believe that we should devote ourselves to finding a way of inducing the mining population to do just that.
7.14 p.m.
Mr. David Penhaligon: The debate is about our energy sources for the next 10 or 15 years. I have been shocked at the low attendance of hon. Members for a debate on what to me is one of the basic criteria for maintaining our economy.
Mr. Emery: Where are the other Liberals?
Mr. Penhaligon: Celebrating the fact that my right hon. Friend the Member for Orkney and Shetland (Mr. Grimond) has been a Member of this House for 25 years. If hon. Members care to make a statistical analysis, they will find that the Liberal Party is the best attended on a percentage basis. There is at least one of its 13 Members present.
Mr. Emery: That is one too many.
Mr. Penhaligon: The real point that the debate has brought out is the tremendous jolt that has been given to accepted trends within Europe by the great increase in the price of imported oil. It was a shock to many to discover that over 60 per cent. of the energy consumed within Europe was from various forms of imported petroleum products.
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I have read this report. I do not know how many hon. Members are keen enough to read a report of that length. I think that it requires a certain lack of sanity to do so.
Mr. Emery: Self-judgment.
Mr. Penhaligon: I have read the report from one end to the other. It struck me that on the whole it was referring to the cost and security of supply. Great emphasis was put on the security of supply. I am not sure that there was more emphasis on security than was required. It struck me that the people who are fortunate to hold all present reserves of energy in the world must sell them to others. It is not in their interests continually to threaten the economies of their best customers.
Having read the article, it seemed to me that Europe was basically saying that its answer was a stringent policy of conservation backed by the use of nuclear energy as a major part of the production of electricity.
I read somewhere that by 1985 about 46 per cent. of electricity to be generated in Europe would be nuclear-based. I am not sure that the case, cost-wise, has been made for that statement. The report states categorically time and again that the case exists cost-wise. I read it in some detail, but I doubt whether that case has been made out.
The report referred to large stations. I admit that I got a bit mixed up between megawatts and gigawatts at that stage. However, reference was made to power stations of the like of which we have no experience in this country—really enormous power stations.
Where are we to put these plants? I hope that Cornwall is not chosen. I do not mind where they are put, but I suggest that Cornwall is left out of consideration. We must pick isolated sites for these stations.
Mr. Roger Scott: Cornwall.
Mr. Penhaligon: I made the point quickly because I realised that people might think that Cornwall was a suitable site.
We want isolated sites from a safety point of view. The risks involved have been brushed over. It does not seem

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convenient, within the present energy problems of Europe, to discuss the safety risks of nuclear power.
I do not know what the latest figure is, but I suspect that the present thermodynamic efficiency of an electricity generating station is 37 to 38 per cent. If anyone chooses to correct me, I will stand corrected, but I understand that it is of that order. Anyone who has done any technology on power generation knows that the chances of its reaching 45 per cent. efficiency in the next 25 years are remote. We have got to the point where we cannot increase the strength of materials to increase efficiency substantially above what it is now.
I suggest that, instead of referring to the efficiency of power stations, we should refer to their inefficiency. Really 37 per cent. efficient means 63 per cent. inefficient. It is that 63 per cent. that we desperately need to start using within the context of energy in this country and in Europe.
I think that there is at least some agreement that we must have isolated sites for nuclear power stations. If we are to have isolated sites and insist that we use the 63 per cent. loss of efficiency to which I was referring in some form of district heating, the problems become obvious. Many people say that it is impossible to run a district heating system if the pipes carrying the fluid exceed 30 miles. Therefore, the suggestion appears to be that these enormous nuclear power stations must be sited in the middle of highly populated areas to use the heat that would otherwise be lost.
Mr. Rost: Is the hon. Gentleman aware that in Sweden hot water is piped over considerably longer distances with substantially less loss of heating efficiency than with electricity transmission through the grid system?
Mr. Penhaligon: I read that in one article. I hope that it is so. I found it quite amazing. I have read in several other articles the converse. This is something that we could look into. It does not sound likely that we can transmit hot water 30 miles and lose less power than transmitting a similar amount of energy down a copper wire. I have read it before. Only scientific developments and a factual report can prove that what the hon. Member said is true. However, if
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it is difficult to transmit hot water over distances of 30 miles or more, that is a significant part of the cost and the viability of long-term nuclear planning.
There is the obvious problem of what we should do with nuclear waste. We have reached the point where someone could write an amusing story about what we could do with the waste from nuclear power stations. The problem must be overcome. I have heard some people say that they would solidify the waste, send it to the sun, put a guard over it, or throw it to the bottom of the sea. The problems are immense. A large number of well-informed people have spoken about the matter—I do not refer to the idiot fringe protests on conservation issues—and I think that such people should try to get their facts right.
The other part of the report is dedicated to ideas on better usage. Diesel fuel was mentioned with regard to transport. I have never been able to understand, even before the increase in the price of fuel oil, why diesel was not a much more widely used fuel for motor transportation. Certainly it is good to see it mentioned, and I hope that the Government will use financial incentives to persuade the manufacturing plants in Europe to move to the diesel system of power.
The insulation of factories has been mentioned. We are always talking about the insulation of factories. A long section of the document is devoted to the controlled ventilation of factories. Enough ventilation—not too much—is a useful saver of energy. As regards home insulation, mention was made of individual temperature-controlled rooms, the efficiency of burner systems, and all sorts of fuels.
I wish that the article had been written in London. I mention this jocularly, because recently I asked the Minister how much energy we consumed in lighting our new, magnificient, super-duper car park. He proudly replied—I cannot remember how much energy was used—that one-third of the lights were switched off as a conservation measure. However, the point is not that he did well to turn off one-third of the lights. The question which should be asked is "Why were they put there in the first place?" There was no need for that number of lights to be installed in the car park. Not only

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is there the matter of saving the energy used by the lamps, but we must consider the waste of natural resources and the paraphernalia of producing the equipment.
On another occasion, I asked a question about the uses and development of the heat pump. The heat pump is not a widely-heard-of piece of equiment. It incorporates a thermo-dynamic phenomenon. There are tremendous possibilities in this area. We hope that the heat pump will produce five times as much low-temperature heat as it takes in high-temperature heat to run it. Yet the talk here today is about encouraging electricity for the heating of houses. We are very lucky if we succeed in getting one-third of the initial energy put into the electricity generating system back into our front rooms via whatever heating apparatus we care to use, but a heat pump can supply five times as much energy into that room as was originally put into the heat pump. I am suspicious that the time taken to answer the question revealed that the Government were not sure what I was asking. But at least there is some recognition that the heat pump exists, and I am assured that a report will be issued saying at least what is the present world situation.
Money could be spent in this area. Some of the money we now spend on research and development into the aircraft industry could be spent on developing a heat pump which might be of benefit to the world and which would certainly put us in a sphere of technology where no one else in the world had yet become involved. I believe that the manufacture of heat pumps can become an important industry and will satisfy a world need for efficiency.
The hon. Member for Don Valley (Mr. Kelley) referred to coal. Although I do not come from a coal-mining area, I do come from a hard-rock mining area. Having spent some time in mines in one way or another, I know of the pressures referred to. The comment was made that people will not engage in mining in 25 years. If so, where will the world obtain its energy, copper, tin, lead and the other substances which contribute to our present way of life? It was said that we shall not be able to persuade people to go down the mines. Since mines will
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become deeper in the next 25 years, I dread to think of the consequences. We must make the mining enterprises sufficiently pleasant and rewarding so that people are prepared to go down them.
I was disappointed to read in the document how little expansion of coal will take place. There will be little more than a holding operation on a European basis. I believe that it is the embarrassment felt by European Governments, which have all run down their coal industries, that prevents them from expanding their coal industries. I believe that we need more coal to make a contribution to our economy; it will have no side effects such as the possible problems connected with nuclear energy.
Nuclear energy will come in the long term. There is little doubt that in a hundred years nuclear energy will supply the largest percentage of energy in the world. However, at least in this country now we have a great deal of fossil energy of various sources available. I ask that we should not, because of the panic caused by world oil prices, be driven into a quick changeover to nuclear power. I ask the House to encourage research into nuclear power, to present new ideas and to try out various ideas. Let us not be panicked into producing 46 per cent. of our electricity by nuclear power by 1985.
7.27 p.m.
Mr. Ronald Brown: The hon. Member for Truro (Mr. Penhaligon) will forgive me for not directly following his train of thought. Nuclear power has not been thought of suddenly, and there has been no sudden switch to it because of the increased price of oil. Many of us have been arguing in favour of nuclear power for the past 20 years. Our objection is that progress has been too slow, whereas the objection the hon. Member has is that there has been a quick change of mind.
I am not sure that I follow the hon. Gentleman's argument about people wanting to go deeper down into the mines. He does not suggest that both he and I are anxious to do so, nor does he say what people will want to do in 25 years. I would not do that work however for £200 a week. Mining is not my vocation, and I do not want to see other

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people down the mines if we can avoid it.
It is vital to have a plan of action for an energy policy for Europe. It surprises me that any one should cavil at it. The documents take a look at the long-term future, but I detect in some of the speeches today a tendency to think in the short term. The documents present a long-range view. We make guesses, and it is necessary to do so, and I hope that the House will look at the matter in that way. To argue that Europe should not look at its own needs in connection with the International Energy Agency misses the point. This is the reason for the International Energy Agency. We suggest that our region is part of the whole. I am surprised that people think that we should look at the problem as a local and not as a regional issue.
The documents set out the analysis very well. As the Minister rightly says, it runs parallel with our own projection. My major worry is about its somewhat pedestrian approach to safety. As the House knows, I have always placed a high premium on safety in nuclear reactors. It is apparent from the documents that the Commission does not share my view. I recall the view expressed in the published report of the OECD where it was suggested that those concerned about safety in nuclear reactors were guilty of exaggerating the risks. All the evidence which has come out since then seems to support the reservations which many of us have had. It is always easy to dismiss such reservations and to call those who have them cranks or people with no knowledge. It is even suggested that matters of this kind are so complex that only the so-called and, in many cases, self-styled experts can really make judgments. It is this aspect which worries me.
In my opinion, however, the documents analyse the energy problems correctly, and I agree with many of the conclusions reached in them. Once again, however, there is the tendency to dismiss the safety aspect with a wave of the hand. Page 12 of the first document epitomises that. It says:
"The problems of nuclear energy as regards public safety and environmental protection are very properly of increasing importance in the public mind. These problems transcend national frontiers because of their very nature.
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Therefore public concern must find a response at the Community level as well as at the level of the national authorities."
That is hardly showing a dynamic interest in safety.
I recall the ease with which many countries were persuaded to allow light-water reactors to be built in their territories. They were persuaded by the glib assurances given by the United States Atomic Energy Commission. The terminology used in these documents reminds me very much of those same glib assurances and causes me some mis-givings.
Neither the economic argument nor the expediency argument must be allowed to take precedence over safety requirements. I urge my right hon. Friend the Secretary of State to emphasise that as often as he can, because it seems to me that the Commission is still obtaining its information from the AEC in America. In my view, that body has a pretty low credit rating.
There are two other matters about which I remain unimpressed by these documents. The first relates to the transportation of nuclear waste and the second to its storage. About neither of these do I get the feeling that any solutions are offered by the Commission. The documents give a valuable forecast of the growth in nuclear fuel requirements and, therefore, of the amount of waste for disposal. This is the first time that I have seen such an excellent drawing together of a possible look at the future. But the timetable of work published at the back of document No. 446/74 indicates that a report is due in December 1975 on radioactive waste, and we are promised a communication on the transportation of radioactive material in June of this year.
The Government can be assured that many of us will need to be satisfied not only that security arrangements for the transportation and storage of waste in this country are adequate but that there are adequate safeguards on the mainland itself, since radioactivity is no respecter of artificial boundaries.
I want now to put some rather in-house questions to my hon. Friend the Under-Secretary of State. Can he say what arrangements are being made for insuring nuclear power plants in this country? Who insures them, for how much are they insured and who provides the necessary

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finance? Looking through the documents, I was struck by the absence of any mention of these matters. If we are discussing a proliferation of nuclear power stations, I am anxious to know about the insurance arrangements being made. I hope that my hon. Friend will be able to help me.
I shall be interested to know a little more about the position of the CEGB. According to the Government's new programme, have orders been placed? Has the Secretary of State had reason to talk with Mr. Arthur Hawkins to discover whether the CEGB is pressing ahead with plans as urgently as we were led to believe in December it would be? If not, why not?
Perhaps the Secretary of State will also consider whether, in the light of the new dimension threading through these documents, this is a good time to have a new head of the CEGB. We need new men who are willing to step into the front line of the fight. In my view, much of the information that we read in these documents should have come from the CEGB. Much of it is forecasting, and the board ought to have been able to supply it.
These documents provide a great deal of extremely valuable information. My guess is that this is the first time that the House as a whole has had an opportunity to add to its knowledge about energy matters. It has been done without our having to chase half-way round the world to get the information. This House should be very grateful for that.
At the same time, we have heard considerable criticism about the size and volume of the documents. I do not know what hon. Members expect. If we are to be supplied with a wealth of information covering a whole industry and the future into the year 2000, does anyone really expect it to be contained in two pages? The criticism which has been voiced shows how little this House understands, and if these documents have done nothing else they have drawn attention to the value of this technology. I hope that we shall have more debates of this kind in order to inform ourselves.
7.37 p.m.
Mr. Jim Lester: I agree with the hon. Member for Hackney, South and Shoreditch (Mr. Brown) about the volume
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of these documents and about the critical importance of a debate on this subject. Representing the area that I do, I intend to concentrate on the document dealing with the guidelines for coal.
Recently the Under-Secretary visited my area to attend a resolution conference. I gather that he was the first Member of this House and certainly the first Minister to do so. I understand that he enjoyed it to the full. Perhaps it is not too much to hope that at some future date I may be the first Conservative Member to be invited to such a meeting.
I welcome the document. Not only is it well informed and cogently argued; it pays a proper regard to the future of deep-mined coal and the major contribution that the United Kingdom's coalfields can make, especially those in the Midlands, Yorkshire and Scotland. I welcome also the urgency expressed in the document about the need for long-term plans and the necessary investment to back them up.
In Part I the figures are compatible. I am not sure whether this is a matter for joy or for sorrow. Too often we argue about figures, and it is something of a change to find that figures throughout the industries are compatible.
The fact that we are hoping to produce the equivalent of 300 million tons in 1985, and that our own industry expects to produce at least half that, underlines the importance of the coal industry and the enormous investment which will be required. The document underlines, too, that the miner has nothing to fear and that the industry has everything to gain from a continued association with Europe.
First, it allows for the wider demand that Europe itself generates to minimise any national fluctuations. It also minimises any national competition which may emerge between coal and, hopefully, North Sea oil. In terms of investment it lessens the effect of any purely national budgetary considerations, which, as we all know only too well, can affect the long-term plans for nationalised industries.
It is a fact that since we have been in the Community the European Coal and Steel Community has invested approximately £50 million in this country in the coal industry in housing, in compensation for industry and in research. I must

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admit that one of the by-products of that investment has caused me some embarrassment. In one of my "surgeries", in a mining area, I have acted as a house agent to miners who have come to request the 1 per cent. mortgages that they read about in one of the popular daily papers. It was rather difficult to explain to them that that was not the intention and that it was allocated to the National Coal Board.
The document underlines that during the next 10 years we can expect a great deal more help in the essential practical investment which is needed to support our own national programme, particularly in the critical areas of new investment. It is incredibly expensive investment in exploration in new pits, in equipment which is essential for increased production and in minimising risk, which is another key factor. There must also be investment to increase what I prefer to call mechanised muscle. These are ways in which we can make mining more attractive and less dangerous. In many people's minds that is the key area to which research and development should be directed.
I have not included the social aspects. There is the real problem in mining areas of re-training manpower when the exhaustion problem comes about. We recognise that if we are to hit the target of 150 million tons it will mean the rapid exhaustion of many highly productive pits. In my area it is a known fact that if they try to hit the 1 million ton mark the miners do feel that they are mining away their own future. In that way they fear for their security.
Further, we must consider the intelligent use and the better usage of coal. We recognise that it must be utilised in a more modern way through gasification. It is an increasingly valuable resource. We have proven reserves which exceed those of oil and natural gas. It is a resource that we need to use as intelligently as some of the oil-producing States seek to use their oil reserves.
A helpful suggestion is that there should be a wider financing of stockpiling as a better means of production and as an insurance against fluctuating supply and demand situations. The financing of stockpiling through the electricity industry alone is a considerable burden. If within
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the Community we can work out a more intelligent way of balancing the stock that exists and our usage of it we could make a major contribution to the more sensible generation of electricity.
I know that it is a matter of sadness within the industry that even during this mild winter the CEGB could have burnt a good deal more coal had it been available. As it has not been available, the CEGB has had to fall back on high-cost oil. That has reflected considerably in the energy crisis.
The document also gives key priority to the vexed question of future manning and the levels of recruitment. The hon. Member for Don Valley (Mr. Kelley has left the Chamber, but he will find that in many ways I agree with him. It is true that in the United Kingdom the recruiting figures are more encouraging. Many miners are returning to the industry. However, overall the industry still has an ageing work force. This must give us serious food for thought. According to the document, the French and the Germans rely much more on an imported work force to fill the gap. That raises an interesting question which perhaps the Under-Secretary of State will undertake to consider.
How would the industry itself regard the recruitment of redundant miners in France and Germany, in the coalfields mentioned in the document, to help work the faces in the Midlands and in my area which cannot be worked now because of a shortage of manpower? Is there any way in which recruitment in this country in key areas can be widely advertised and canvassed? It is clear that miners are being made redundant in a wider area than just the United Kingdom. It is a fact that the future depends on our ability to get men into the industry, to get men to go down the pits and to mine in a sensible and fair way. It is right that they should have a well-paid career, a secure career and one that properly recognises all the built-in risks within the industry. It is also right that we should have an industry and a work force which will co-operate fully in all aspects of research and productivity, and in doing that obtain a proper reward.
The document reinforces the Wilberforce Report's finding that we still need—we are now talking of the period

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up to 1985—to try to find an acceptable productivity base and an acceptable productivity agreement that will produce the results. In paragraph 16 it is suggested that it is important that there should be similar rises in productivity and real wages, and that the two things go together. Any imbalance in a labour-intensive industry which increases costs which are not justified in terms of productivity will not only harm the prospects in the future for the industry but damage the balance between the four-fuel economy which we all want to see. It would add greatly to the general cost of energy.
It is a fact that for the industry and for the individuals in it the next few months are critical. On the basis of the document it is clearly shown that within the EEC there is a sound and well-invested future. It is to be hoped that in the months ahead that will bring out the best and not the worst in the industry.
7.47 p.m.
Mr. Frank Hooley: One of the major curiosities of the document that we are considering, R/3333/74, is that it did not emerge until as late as December 1974. It is curious that the Common Market Commission never devoted its mind to such an important matter as energy until 17 years after the Common Market began to function. It is clear that the reason is a sudden neurotic obsession with the oil crisis and some of the consequences for the Common Market organisation.
It is argued that we paid no attention to the matter. That is not true. Way back in 1967 the present Chairman of British Rail laid a document before the House in an endeavour to develop some sort of fuel policy for Britain. He was criticised for doing so.
The document that we are debating is dominated by the three classic and disastrous Common Market dogmas—namely, harmonisation, self-sufficiency and free competition. On harmonisation, in page 2 of the document dealing with oil prices we read:
"The fact that Member States are unequally affected exacerbates the dangers to the extent that it risks comprising the internal cohesion of the Community and its capacity to progress towards the definition of common policies."
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The Community is obsessed with the internal cohesion of the Community and not necessarily with the more important interests of the countries within the Community and the people who live in them. That theme runs right through the document.
Next, I turn to self-sufficiency. The Commission must accept that there is not oil within the Common Market area to supply the Community's needs. Therefore, it argues powerfully for cutting down the two-thirds' dependence on oil—that is, roughly the present figure—to a level of two-fifths. The document puts forward an extraordinary programme for electricity by nuclear generation.
Finally, free competition. There is the usual statement on page 8, which reads:
"Apart from the efforts of Member States, this action"—
that is, energy saving—
"should be at Community level whenever there is the possibility that the free movement of goods or the free play of competition within the Common Market could be jeopardised."
We have there all the usual dogma.
The fact is that in terms of energy policy there is an important international consideration to be borne in mind by this and every other country. If the United Kingdom ever wants extra natural gas, we shall go to Norway for it. If we need uranium for our nuclear policy, we shall go to Canada, Australia or South Africa. If we need extra supplies of oil during the next four or five years before we can exploit indigenous resources, we shall go to Nigeria, Libya or the Middle East. Not on any of those accounts shall we go near the Common Market, because it cannot supply our needs and would not pretend that it could.
I want to raise another point which is important in this concept of quasi-self-sufficiency in power as expressed in this document. Over the weekend my right hon. Friend the Prime Minister referred to the undesirability of the formation of great raw material producer cartels such as OPEC, and he mentioned the possibility of a copper cartel, a bauxite cartel, and possibly cartels for tea, coffee, tin, and so on. That is a potential danger to international trade, but it is a danger that will be exacerbated enormously if Western European industrial countries continue to gang up in various ways, as

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they tried to do with sugar—fortunately unsuccessfully—and as they are now trying to do on oil consumption, and arrange a position under which their interests dominate, irrespective of the interests of the producer countries.
It would be infinitely more sensible for Western European countries to join other great industrial nations, such as the United States, Japan, Canada and Australia, and enter into real, serious and genuine negotiations aimed at arriving at a mutual balance of interest, rather than produce documents of this kind which are obsessed with the necessity of cutting down oil consumption for their own economic purposes, irrespective of the possible impact of that policy on the major oil-producing countries.
It may be that through international agreement there would emerge a policy under which the sort of figures which the document has produced would prove to be relevant for consumption by Western Europe. I should not care to predict that one way or the other, but what is dangerous, because it will provoke counteraction by OPEC and the oil countries generally, is to set out deliberately to produce a policy under which we say that we dislike this two-thirds dependence on oil and, therefore, we shall cut it down.
It is dangerous to say that even if the ultimate consumption remains the same we want a two-fifths and not a two-thirds policy and that we shall pursue that policy without prior discussion with the major producing countries, without consideration of the effect upon their economies, and without, I fear, serious consideration of the possible effects on prices, production and the attitude which those countries will adopt when they see this written down as Common Market policy. There is an important case for looking at that aspect of the whole document.
The most interesting comment made by the right hon. Member for Wanstead and Woodford (Mr. Jenkin) was that the document totally ignores the International Energy Authority and the negotiations which had gone on, but the possibility of another oil emergency—
Mr. Skeet: Is the hon. Gentleman suggesting that the oil countries should
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gang up against us but we should not take any protective action?
Mr. Hooley: I said explicitly about three seconds ago that there should be discussions between the two sides before documents of this kind are produced laying down a pre-determined policy in terms of consumption. It would be far more sensible, before writing a document such as this, to say that there should be international discussion—which France has opted out of—to see whether this kind of consumption will dovetail more sensibly into the general world energy situation so far as we can work it out within the next decade.
Mr. Ronald Brown: Do I understand that what my hon. Friend is complaining about is the suggestion in the document that we should conserve our energy, and, therefore, the use of oil unwisely, is not in the interests of anybody? Is he challenging the concept that saving oil by not misusing it is wrong?
Mr. Hooley: I am challenging the concept of a unilaterial determination of the level of consumption by Western industrial Europe without consultation with the major oil producers of the world. I am not saying necessarily that the figure which would have emerged from that consultation would have been more or less than what is here set out. It may have been less in the interests of conserving supplies, or it may have been greater. The fact is that this is an attempt to determine a unilaterial policy, and the right hon. Member for Wanstead and Woodford drew attention to the absence of a genuine international outlook in drawing up the policy set out in this document.
I now propose to refer briefly to some aspects of the United Kingdom's position, and perhaps I may touch on the various types of fuel that are referred to. For the basis of comparison I have been bound to take Cmnd. 5879, the public expenditure document, because this is the most recent statement of Government policy on capital expenditure in terms of the production of fuel resources, and also because it contains some interesting figures about the level of fuel supplies expected under the different heads. The difficulty is that Cmnd. 5879 looks only five years ahead, whereas the Community document

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purports, I think unwisely, to look ahead for 10 years.
Dealing first with coal, there appears to be reasonable compatibilty between the two programmes, in so far as we envisage a reasonably stable output in the United Kingdom of 120 million tons a year, and the Community document likewise thinks that internal production will stay fairly stable in the EEC at about 250 million tons.
There is, however, a considerable difference in the figures for oil. According to the Brown Book which the Government published last year, we are looking forward to a potential output in the early 1980s of 150 million tons from North Sea sources, although I rather fear that that target will slip in terms of time, for reasons upon which I do not want to elaborate now. Nevertheless, according to the statements of experts, oil Companies and explorers it seems that the natural capacity of the oilfields which have already been discovered—Brent, Ninian, Forties, and one or two others—is abundantly able to give this country an Output of at least 150 million tons a year. Therefore, if we decided that it was in the interests of a fuel policy to do so we could envisage the consumption of oil within our economy at a consider ably higher figure than our present consumption of about 90 million to 100 million tons. If we decided to conserve internal consumption and go for exports, we could find ourselves a member of OPEC.
The position with other Common Market countries would be different. They are not purporting to expand their oil consumption. They have no indigenous source of supply, although I imagine that the document would take on a startingly different aspect if the French Government discovered oil in the Bay of Biscay. It is clear that the position of the United Kingdom vis-à-vis other countries of the Community will be radically different. It is not immediately obvious that we should dovetail our energy policy into the policy advocated in this document in terms of the resources that the British Government will have available.
But there is another aspect of the document which is disquieting. It suggests that the Community might go prospecting around in the North Sea or even the
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North Atlantic under its own steam. This is to disregard the kind of discussions which went on at Caracas last year and which will take place shortly in Geneva. If the Commission is seriously thinking that the Community can go prospecting in, to use its phrase, "the non-sovereign areas of the high seas", without provoking reactions from the United States, the Soviet Union, Norway and other countries, it is seriously deluding itself. This also reveals the lack of genuine international thinking to which the right hon. Gentleman drew attention.
In terms of gas consumption, Command 5879 appears to envisage about a 40 per cent. increase in the British use of indigenous gas sources, rising from 11,000 million therms to 18,000 million therms in five years. The Common Market document looks forward to a 200 per cent. increase, which is fair enough if France, Holland and Italy have access to resources of gas which will enable them to reach that level of consumption, but it does not follow that the United Kingdom should put itself into the same straitjacket and use indigenous resources on that scale unless it would suit our purpose.
I suppose that the most controversial aspect of Document R3333/74 is the incredible assumptions about the development of nuclear energy. It suggests that over 10 years the production of electricity from nuclear power will rise 17 times, by 1,700 per cent. The investment cost of doing that staggers the imagination. Our own capital costs, over five years, of increasing our peak load capacity from 60 million kW to 65 million kW—a mere 8 per cent.—envisages a capital programme rising from £580 million a year to £840 million, which is pretty substantial. How on earth the Commission supposes that Western Europe can finance a nuclear programme of the order envisaged in the document I cannot imagine.
But there is a more important consideration. My hon. Friend the Member for Hackney, South and Shoreditch (Mr. Brown) drew attention to the hazards of nuclear power. I believe that it would require only one serious nuclear accident—not an explosion and not necessarily in Europe—to call in question in the public mind the whole idea of depending

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massively on nuclear power as a source of energy.
This is speculation, but the whole oil crisis in 1973 came upon us more or less unheralded. Everybody now says that he predicted it, but I do not remember anyone saying so at the time. If there were a serious nuclear accident or spillage, the assumptions about building these stations all over the place—the programme must envisage an enormous number—would be seriously questioned not only in the United Kingdom but in France, Germany and so on.
I will touch very quickly on conservation. The document that we are discussing suggests a 15 per cent. conservation target, which is not unreasonable, since it squares fairly well with the kind of target suggested by the Government of between 10 and 20 per cent. in recent discussions.
I would reject the dogmas set out in the document, on two grounds. First, they do not take sufficient account of the genuinely international side of energy discussions, the fact that we may draw energy from remote parts of the world and continue to do so. Second, I am not convinced that the actual programmes set out are in any way compatible with the best interests of the fuel policy of the United Kingdom.
Several Hon. Members rose—
Mr. Deputy Speaker (Mr. Oscar Murton): Order. Mr. Speaker earlier advised the House of the number of speakers and the time available. By a simple process of mathematics, those who wish to speak will see that they can just about fit into the time available if they confine themselves to 10 minutes each.
8.5 p.m.
Mr. Charles Fletcher-Cooke: I undertake to do just that, Mr. Deputy Speaker.
I gather that the purpose of this debate, which is the first of many, is to let the Minister know before he goes to Brussels the views particularly of the back benches. That purpose in this debate has been somewhat frustrated by the fact that, as the Minister disclosed in his first few sentences, all the really controversial matters that he was to have discussed in Brussels in 48 hours have in some mysterious ways disappeared from the agenda.
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I am very pleased that that should be so, because the really controversial matters were not in the interests of this country at all, even including those people such as myself who are supporters of the EEC. I regard the EEC as devoted primarily to the task of assisting free and fair competition between its members. That is the doctrine enshrined in the Treaty of Rome. As my right hon. Friend the Member for Knutsford (Mr. Davies) pointed out, there is nothing in the treaty to impose within the Community what is called an energy policy, and certainly not the sort of collectivist policy which is hinted at in many of the documents before us.
It is true, as the hon. Member for Sheffield, Heeley (Mr. Hooley) said, that the documents pay lip-service to fair and free competition. The word now used, which I quite like although it is new to me, is market "transparency". That is a new "in" word, although for once not a bad one.
Mr. Patrick Jenkin: It is an old one.
Mr. Fletcher-Cooke: Indeed? That shows how out of date I am in economic jargon. I do not mind that, because the jargon changes from year to year and one comes back into the full stream of fashion when it comes full circle.
"Market transparency" is not bad. It means that all members and their nationals have to disclose fully their costs, their subsidies and all the other devices which they may or may not use to get around obligations to free and fair competition. In so far as the policy of these documents goes that way, I am very much in favour of it and I have no strong objection to the setting of targets. I have little faith in it when it is done nationally and even less when it is done internationally, and particularly when it is done 10 years ahead.
We remember the forecasts made by the brother of the hon. Member for Hackney, South and Shoreditch (Mr. Brown) in the National Plan in 1965. They were very interesting, but none has been fulfilled. We are now 10 years on and I doubt whether one of those forecasts has been justified in the event. How much less likely is it when there is this international forecasting by the Community? However, it is not a harmful exercise as long as

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people realise that this is a mere estimate of the future and not a straitjacket into which individual member countries are to be dragooned.
There are indications that some people in Brussels have adopted this planning in the compulsory sense. There is, for example, a suggestion that there should be an enforcement agency telling member countries of the reserves they should keep and how they should alter their various sources of power. That has nothing whatever to do with free and fair competition. Every prudent member of the Community will keep the sort of reserves of fuel that it thinks it should and it thinks it can afford, just as my right hon. Friend the Leader of the Opposition keeps on her top shelf sufficient goods to supply her against a needy day.
Dr. Colin Phipps: To the year 1990?
Mr. Fletcher-Cooke: Yes. Some have a five-year supply and some a 50-year supply. Some have a 50-day supply, which is what is recommended in this document for certain reserves of fuel oil.
Mr. John Lee: I am obliged to the hon. and learned Gentleman for giving way. Does the right hon. Lady the Member for Finchley (Mrs. Thatcher) regard it as correct that the size and scope of her larder should be regulated by her neighbours?
Mr. Fletcher-Cooke: I am quite sure she does not. She regards it as no business of her neighbours to regulate what she chooses to keep on her top shelf, and I regard it as no business of Brussels to regulate the amount of reserves in terms of days we should keep. That is a matter for us.
We must not sell oil or energy to Europe at a false price, because that would be contrary to the spirit and the letter of the treaties we have signed. That is quite different from the imposition of the semi-compulsory plans in these documents. Therefore, I am extremely glad that the Secretary of State announced that there was nothing of that sort on the agenda in Brussels on Thursday.
In a sense, the purpose of this debate was achieved in the first half hour. I do not like the proposal regarding EEC loans, about which we have heard very
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little, which was objected to by my right hon. Friend the Member for Wanstead and Woodford (Mr. Jenkin). He regarded the loans suggested by the Community for the development of some of the resources of the sea as a gift of the Greeks. He is right. We have some experience nationally of this. Every time British industry accepts loans from a governmental source we find that it is subsequently blamed for so doing by the Secretary of State for Industry and told that it is to be accountable in some rigid fashion to the Government thereafter. This is what my right hon. Friend fears by the suggestion of loans from Brussels for these purposes. We can get on much better without them.
Finally, I want to ask my hon. Friend the Member for Cheadle (Mr. Normanton), who is to wind up this debate for the Opposition, how the European Parliament, of which he is such a distinguished member, has hoisted in the fact that this energy policy, in so far as it has compulsory overtones, is contrary to the spirit of the Treaty of Rome. I have in my hand European Parliament working documents dated 31st January 1975 and containing a report drawn up on behalf of the Committee on Energy Research and Technology, which at some length discusses the documents we have been discussing. Nowhere in them can I find any objection to the menacing compulsory nature of the plans which are contained and enshrined in some of these documents.
The only objection the committee seems to take is that countries which are not members of the EEC might be given too great advantages under these plans. As for striking any note of warning against what I regard as a bureaucratic tendency in Brussels evinced in these documents. I can find no trace, not even a trace that there is any objection to the suggestion in one of the early documents that for the purposes of drawing up further research and plans in Brussels the Commission must employ another 80 to 100 "specialists". That struck a menacing note in my mind. I hope my hon. Friend will assure us that in Strasbourg and Luxembourg, not only for financial reasons but also for reasons of deep policy and doctrine, he and his colleagues will not allow Brussels to get away with that.
8.16 p.m.
Mr. Peter Hardy: The hon. and learned Member for Darwen (Mr. Fletcher-Cooke) tempts me to pursue a number of interesting points. I shall refrain from doing so because of the shortage of time, except to say that I am glad that his copy of one of the European Parliament working documents on energy actually comments on energy. The last one I had was about edible vinegar. I could not understand why it was supposed to be devoted to energy and fuel matters.
I am glad that the hon. and learned Gentleman discovered the gem-like phrase "market transparency". It makes wading through documents of that kind rather more interesting. If we are to be faced with the task of wading through weighty documentation of that kind, I hope there will be more effort to make the task easier by presenting the material in a better way. I do a lot of my reading on the train between King's Cross and Doncaster. I tried to read these documents going up last week and coming down this week. It is difficult trying to manage paper as voluminous in size, weighty in extent and often so tedious and repetitive in style. The documents could be made more concise without omitting anything of value. When we consider that much of the debate is devoted to dealing with the proper use of scarce resources, it hardly behoves us to start wasting paper on the extensive scale which this exercise has involved.
There are a number of points I should like the Minister to deal with in his reply. In the documents a good deal of concern has been expressed about energy conservation. Over the last two or three years a lot of expert effort has gone into an examination of this subject. The evidence amassed in these documents tends to justify the approach of the Secretary of State, who appears quite properly to have abjured Government by gimmick and to have gone for conservation in a constructive way rather than attempting to get the headlines—an approach that has not been adopted in a number of countries.
My right hon. Friend will have found from experience that there is no easy way to achieve energy conservation and that the benefits can come only in the long term. I note from the documents that it appears likely that Europe cannot save
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more than about 8 per cent. of its energy requirements by the 1980s. It can do that only as a result of hefty expenditure. One of the ways in which we can save 8 per cent. of our energy is by increasing the insulation of buildings. I gather that the European policy would mean increasing building costs by at least 2 per cent.
Can my hon. Friend the Under-Secretary give us some idea of the huge costs that are necessary if we are to save energy? It may be that some of the savings are so expensive to make that we cannot embark on them. It is all very well Europe deciding to reduce its expected growth in energy demand from 5 per cent. to 3½ per cent., but we have to ask whether the costs incurred in doing so would not be too great.
The Europeans are extremely optimistic about being able to sustain the growth in energy demand over the next 10 or 15 years. They appear to be banking on at least a part of the 180 million tons of oil which they expect to be extracted from the North Sea very soon. The implications of that hope for this country have to be spelt out whether or not that matter is taken off the agenda by the European Ministers. The implications for Britain are far too serious for that not to be done.
If Professor Odell is right and reserves in the North Sea are as massive as he supposes, we could clearly sustain a 180 million ton rate of extraction and sell some to Europe at the going world price but with the energy price floor which was advocated by the right hon. Member for Wanstead and Woodford (Mr. Jenkin). If the reserves are not of the scale suggested by Professor Odell, my right hon. Friend will do right to ensure, whether these items are on the agenda or not, that the interests of this country are paramount in our consideration of offshore oil even though Europe may try to stuff money in our pockets to secure extraction from the more expensive fields.
My main anxiety concerns the glib assumption by people in Europe that they can cease to rely to the extent they already do on foreign oil, but they appear too willing to become increasingly dependent upon the supply of natural gas and coal from non-European sources. If that happens, they could well be making the same error that has been made in the last

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year or so. The hon. Member for Beeston (Mr. Lester) said that Europe should be aiming at coal consumption of 300 million tons but, as my right hon. Friend the Secretary of State explained, that figure would consist of coal production of 250 million tons with up to 50 million tons being imported from outside Europe.
There can be no guarantee that in 10 or 15 years' time coal will be readily or cheaply available. In view of that and of our recent experience of excessive reliance on non-indigenous supplies, it would seem highly desirable for Western Europe to try to redeem some of the waste which it inflicted on itself by a too rapid rundown of its coal industry. It would be highly desirable if Britain could be given the financial guarantee which would be required in order to maintain and increase its coal production.
We can and should increase our coal production, but we can do so only if we have the men to get the coal. I was heartened today to read of an increase of 3,700 in the number working for the National Coal Board compared with 10 months ago. That is an achievement which I hope the Secretary of State will regard as satisfactory, but we shall only get the men to go down the pits if we pay them. The men are no longer captives of coal, and geography no longer confines them to employment in the pits. I do not suggest that there is no need for statesmanship in the union or that we can treble or quadruple miners' wages overnight. Nevertheless it needs to be clearly shown that the miners have a future and that year by year they can enjoy a steady and sustained enhancement of their earning potential. This may mean that coal will increase in price, but the alternative is likely to be even more expensive.
The Europeans talk of a massive increase in nuclear capacity and a standardisation of reactor types. They seem to be keen on standardisation now whereas six months or a year ago they seemed to favour a variety of types. If we are to see standardisation, one hopes that it will not be a standardisation based on American nuclear technology. But if we are to move ahead to the scale of nuclear capacity which the Common Market currently envisages, the cost of that provision will, as the right hon.
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Member for Wanstead and Woodford said, be an absolute burden which it is doubtful that Europe could afford.
We are talking about £85 billion at 1973 prices to provide that sort of nuclear generation. Surely it would be cheaper to spend more—even more than the Government have generously provided in their present plan—to ensure that our own coal extraction capacity—and, indeed, that of Western Europe—is increased. Even so, we shall have to have growth in nuclear generation, and it is vital that the Government make clear our policy and determination in two directions—first, the question of financing such nuclear development, and secondly the supervision and safety of nuclear power stations.
Many of us may be less than favourably disposed towards the EEC, but that does not necessarily mean that we are little Englanders. It has been suggested that before long there should be a supranational authority to exercise a broad supervisory rôle in international civil nuclear engineering. Recently a Sunday newspaper presented as a scare story an article in which it said that little children could get hold of "joke" matches and could easily set themselves on fire with them. The world contains some areas where politicians and people may as easily set themselves on fire. If we are worried about the risks of children setting themselves on fire, equally we need not think ourselves immune from severe risk. We have to think about our own problems in the adult world. The risks from nuclear power stations must rank among them. Anxious as we all are to have increased nuclear generation of electricity, we still have to think about the possible risks of setting ourselves towards destruction.
8.28 p.m.
Mr. Peter Emery: Much as I would like to take up a number of points raised by the hon. Member for Rother Valley (Mr. Hardy), I hope he will forgive me if I do not do so because I shall try to hold myself within the 10-minute limit, which very few hon. Members so far in the debate have managed to achieve.
I realise many of the problems which the Secretary of State for Energy faces. It is exactly 50 weeks since I had responsibility for some of them. I have purposely kept quiet about energy matters since then, because I think it only fair

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that ex-Ministers should leave their successors a fair run in trying to do the best they can in an area which is of such vital interest to the nation. But the two points which I want to make are points of criticism, and I am sorry that I have to make them. When one considers the host of documents that we have had from the Government on energy matters, two things emerge about which the Government should be doing rather more.
While I accept that in many instances it is nonsensical to believe that one can have within the EEC a policy on resources and other factors that will be completely adhered to by everyone without question, I believe it is possible to get considerable agreement on policy, thereby getting a major effort from a united Community working with Britain to our mutual benefit. I believe that the British Department of Energy has more to contribute than can be contributed by any other nation in Europe. One has only to think of our strength in hydrocarbons, whether the fuel be coal or oil or gas, and of our nuclear technology, which is perhaps more advanced than that of any other country in Europe, and is certainly on equal terms with the development of the fast-breeder reactor in France.
We ought to be playing a greater rôle than the Government have been able to achieve. The Minister and his Department should put more thought into trying, in co-operation with the European Parliament to ensure that policy thinking is a little wider and a little more sensible in an area where we can give considerable help.
I suggest—I have no God-given right to do so—that the estimates of possible nuclear growth in Europe in the next 10 years are beyond reality. I do not see how in any way, whether for technological, fuel or capital investment reasons, they can become reality. None the less, there can be little doubt that Europe will be moving towards nuclear energy to a greater extent than most people would have thought a number of years ago. That gives a major opportunity for British industry and technology which is not being grasped as it should be. The Minister and his Department ought to be giving more encouragement to British industry to attempt to win contracts within Europe which we have not yet succeeded in winning.
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I should like to make a positive suggestion to the Minister. I am not one for creating new committees or new boards when there is such a proliferation of them, but he has under his control, and he is the chairman of, one of the most powerful nuclear advisory bodies that has ever been brought into existence—the Nuclear Power Advisory Board. My information may not be correct, but I believe that that body has done little since the advice was given on the SGHWR.
The possible terms of reference for the committee would go much further than just advising the Government on the next reactor. The Minister might well use the committee as an instrument for trying to bring to industry an input into Europe technologically, industrially and commercially. That would be of considerable benefit to our own nuclear and electrical industry and to the technological advance of nuclear manufacturing in this country.
Those are the specific points which I wanted to put to the Minister. He should do more in those areas than he has been able to achieve in the past 10 months. I hope he will take this criticism in the spirit in which it is given, because I believe that it will be helpful to him and the country.
I apologise to the Minister for the fact that owing to another engagement I shall not be able to be here for his winding-up speech.
8.32 p.m.
Dr. Colin Phipps: Before addressing myself to the main topic of the debate I would like to deal with a procedural point. I believe that the debate has arisen because we had a previous debate which my right hon. Friend the Secretary of State talked out. That debate was on a simple motion "That the House takes note of EEC Commission documents A, B, C and D." Until last Tuesday all such motions had been in that form, but then we suddenly had a new form of motion put down by the Government which said in effect "That this House takes note of EEC Commission documents A, B, C and D, but reserves the right to disagree with any part of them that it finds it wants to disagree with at some subsequent date". That kind of rider emasculates debate.

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When we had a motion which was just to take note, it was possible to amend it, as happened the first time we debated these documents. I am a strong pro-European, but, pro-European or not, I believe that the House ought to have the opportunity to discuss European documents, if necessary to make amendments, and to express a point of view. With the best will in the world, it would not be possible to dissent from the motion before us. It says that we note the document and reserve the right to disagree with every jot and tittle in it if we care to do so at some subsequent stage. I find it difficult to see how we could have any form of motion which was an expression of view of the House.
Therefore, I hope that Ministers will revert to the old system of a straightforward take-note motion, which will allow the House to make its views known on the document before us.
Having completed that complaint, I address myself to the debate. We have yet to grasp just how transient our oil reserves are, both nationally and internationally. A number of Members have spoken as if the whole purpose of the documents was merely to tide us over the next 10 or even five years. I see in these documents the first groping for a form of unified energy policy for the whole Community. This is absolutely essential if we are to have energy sources not just in the remaining part of this century but in the next century. That is not too short a time-scale for us to consider.
I wish to talk about oil reserves in particular. The United States can be regarded as a microcosm, a model, of what has happened, or what will happen, regarding oil in the rest of the world. It has widely diversified geological basins. It was the first country to discover oil. It used it before, and at a greater rate than, any other country. If one considers the energy pattern in the United States in the last 100 years as it applies to oil, one finds that year by year more oil was discovered in the United States than was used. If a country is in the happy position of discovering more oil than it uses, it always has more oil left at the end of the year than it had at the beginning. That develops a certain euphoria in the
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country. It makes it believe that it will go on for ever.
However, a study was done in the late 1950s in the United States of the usage of oil compared with the trend of oil discovery. The best possible extrapolation was made, and it was found that the curve of new reserves discovered as opposed to the curve of reserves used per year had a distinct shape. Oil usage was a rising curve of asymptotic form. The curve of reserves discovered was, unfortunately, of the reverse kind which flattened out as it grew. It followed that the two curves were bound to cross. When they were extrapolated it was found that they should cross in the United States about 1964, and, lo and behold, in 1964 they did. From then onwards the United States no longer found as much oil each year as it used. It was this happening more than anything else which gave the oil-producing countries their current strength.
In those days we talked about the Gulf Coast posted price for oil. Nowadays nobody talks about it because it has no relevance in the world oil situation. The interesting point about the United States as a microcosm of the world is that we can do exactly the same for world oil supplies. Taking similar curves of oil discoveries for the whole world as against the amount of oil used each year we find that the two curves are doing exactly the same as they had done in the United States. They are due to cross in about 1985. After 1985 the world will not have a free and increasing supply of oil, and it will face one of the most traumatic experiences, which is only now becoming apparent. Societies based upon energy usage will find themselves without energy.
It is all right saying that in our own little island we shall be all right, because our curves probably will not cross until 2020, but the rest of the world will not sit idle while we consume our oil reserves. It will be looking for alternative sources of energy. To find them will require one of the largest technological investments in cash, manpower and everything else that the world has ever seen—much more vital, much larger than sending men to the moon, and much larger than the amount of money we are now spending in the North Sea.

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Oil, coal and gas are forms of secondary energy, though they are often thought of as primary energy. They result from the genuine primary sources, which are gravity and sunlight and, for us, the internal heat of the earth. These produce all the other sources of energy which we use. We use concentrated forms of primary energy, one of those concentrated forms being oil.
We must harness the primary sources of energy if the world is to have a future as an energy-consuming society. The problem with the primary sources is that they are everywhere. They are in this Chamber. It is not generally recognised that if I drop a piece of paper, as I do now, energy is dissipated. Gravity is making it drop, attracting it to the ground. These forms of energy are everywhere dense but everywhere diffuse. Therefore, we must concentrate them. They have been concentrated for us in special things such as winds, waves and tides in particular, but even these are much more diffuse than fossil fuels.
We need unlimited energy supplies, and primary sources are for our purposes unlimited. They are not bounded. They will not be exhausted. We cannot exhaust the force of gravity—at least, not in terms about which any of us will have to worry, certainly not in geological time. But if we are to harness them—if we are to harness the tides, for example—we shall require an enormous input of technology and capital.
There is no way in which this country alone can ever do it. It will have to be done in conjunction with a body such as the European Economic Community. If we stay outside, using up our own precious oil, when it has gone and the Community has harnessed those other sources of energy we shall be at its mercy. We must join it now and join the rest of the world in finding a proper way to harness primary energy if the world as we know it is to succeed into the next century.
8.44 p.m.
Mr. T. H. H. Skeet: I am sorry that the hon. Member for Sheffield, Heeley (Mr. Hooley) is not present. I intervened during his speech to say that as OPEC was challenging the Western world, and was continuing to raise the price of oil, it was reasonable for the
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consumer countries to get together to try to work out, through dialogue, a satisfactory solution.
In the 1960s Middle East oil was sold at 10 times the cost of production. In the early 1970s it is being sold at 66 times the cost of production. If that is not what we commonly call being a bit greedy, I should like a better explanation of it. It indicates clearly that it is probably not unreasonable for consumer States in the Western world to stand up for their rights.
I listened with great interest to the hon. Member for Dudley, West (Dr. Phipps) and I should like to pursue some of his arguments. The argument that particularly attracted me was on alternative fuels. Much as we must look ahead 10 to 20 years, we must be realistic and realise that any alternative fuels to the existing oil supplies are at least eight to 10 years away. Investment costs of alternative fossil fuel sources, using the Middle East as a standard of comparison are as follows: Middle East crude would work out at 1, United States opencast coal at 3·5, deep-mined coal 6 and North Sea oil 12. Anything beyond that like tar sands, oil shale, synthetic natural gas and the liquefaction of coal ranges between 20 and 35. Therefore, it is not practical at present to deal with alternatives to our existing fossilised fuels. What we have to do—the documents bear it out succinctly and clearly—is to turn further and further towards the nuclear load.
We in the United Kingdom are assisted in this in that we are developing our North Sea potential. If we pursue Dr. Kissinger's idea about downside risk—if we have a stablised price of between $8 and $9 a barrel, we shall have a guarantee that should the oil price fall at a later stage we should be in a position to safeguard our investment in the North Sea.
There is one question to raise here. Professor Odell has spoken about unlimited resources from the North Sea. Another interesting treatise has been brought out by the stockbrokers Wood, Mackenzie and Company in which it is said that by 1981 maximum production yielded by the North Sea fields will total 2,413,000 barrels a day and that is likely to be sustained for only six years. We might perhaps maximise production in the North Sea, cash in while prices are

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high and use the money generated there-from to build up alternative supplies of energy.
The crux of these documents—I support the general argument contained in them—is that we shall see a considerable expansion in nuclear power. The documents state that from 1970 nuclear power is to contribute 20 million tons of coal equivalent, rising to 372 million tons by 1985 and rising as a percentage of the EEC energy balance from 1½ per cent. to 17 per cent. That is very significant. Natural gas is to rise from 11·6 per cent. of the energy balance to 24 per cent.
What is more significant is that France, pursuing an individualistic line, is following a policy which we in the United Kingdom should have pursued. France is going for six 1,000MW or 1,300MW power stations per annum in 1976 and 1977. According to its central planning council, the only real answer to the energy crisis is nuclear power. France has a peculiar characteristic. It has little natural gas other than what it imports and very limited coal reserves, which are small compared with those of the United Kingdom. Therefore, France must look for a local answer. When one compares that with our Lilliputian programme in the United Kingdom of 4,000MW comprising 6/660MW reactors, one obvious question is why it is so small. It is probable that what has been done is to capitalise on the use of coal which is available and bring forward a policy which will placate the coal lobby in the House of Commons.
After all, if there is to be a significant expansion of nuclear power in Europe as we know it, particularly in France and Western Germany, and when we have figures here in the United Kingdom which will show the economic advantages of it, why are we not prepared to pursue the same course? The following are the Secretary of State's own figures. The operating costs at the end of 1974 for Dungeness A were 0·35p per unit, and for Sizewell A 0·42p. The most representative oil-fired power station at Fawley figures at 0·88p and the coal-fired power station at Ferrybridge, not far from Selby, at 0·65p. Is not the Secretary of State convinced that, looking over the next 15 to 20 years—we must take a long-range
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view of this—this is the road on which we must go ourselves?
When the Secretary of State hears in the course of the recent negotiations with the coalminers that the militants are already claiming a larger and larger wage, and when he is forced to admit that 65 per cent. of the cost of coal is in wages, how can he possibly keep prices down in order to make it competitive?
Perhaps we may have learned one or two things from the documents before us on the use of coal in a Western European context. In my judgment, and in their judgment too, coal will tend to decline in the energy balance of Western Europe, although in the United States it will tend to increase. The capacity of the market to absorb higher coal output will be limited until conversion technology has made more progress. The Secretary of State must face this. He has two immediate uses for coal. One is in the electricity industry—he has yet to tell the House where he is going to place further power stations—and the other is in the steel industry for metalurgical coke. Outside that, until coal conversion comes along it will be difficult for him to find substantial enlargement of markets.
The second point which is apparent from the documents is that expansion of coal production is dependent upon labour costs. As these show no signs of abating in Western Europe or here, plans may have to be altered drastically over the years.
The third point is that in most European countries nuclear power will tend to squeeze the coal market but national programmes will take time to accelerate, and existing fossil-fuel stations will be phased out over a long period of time. It may be that there will be a number of local variations.
Finally on this point, as direct reduction of iron ore will take time to assume a substantial proportion of total steel production, blast furnaces will continue to prove a valuable market for coke. Where indigenous production is insufficient, the international market is likely to fill the gap, with the United States, Canada and Australia being the primary sources, to which may be added the Soviet Union, Poland and South Africa.
I pay tribute to the work that the Commission has provided. It has sought

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to interrelate a number of very diverse communities. One thing that is apparent to me is that while there is little oil in most of the countries of Western Europe, there is oil in the United Kingdom and in Norway, which is not among the Common Market territories. In the United Kingdom there is gas, and so is there gas in the Netherlands. The Netherlands actually has more gas than we have, but there is very little elsewhere in the Community. Coal is substantial in the United Kingdom and West Germany but there is little elsewhere in Italy and Belgium.
There is a further salient point. That is, that certain countries are more dependent than we are on imported energy—Italy as high as 80 per cent., France 70 per cent. and West Germany 50 per cent. The United Kingdom 45 per cent. Individual policies will, therefore, have to be enacted by these individual countries to suit their requirements. It is, however, possible to correlate the results.
I think that the Commission and the Council of Ministers together have achieved a very good result. May we have more debates of this order in the future, and may I persuade the Secretary of State that when he goes to Europe he should look through the spectacles of a European at the wider picture and not attempt a narrow stance. If he thinks in European terms, some of his problems will disappear. If he is thinking simply in terms of an island State, he will find that problems will surround him for many years ahead, and ultimately, when we get through the storm of our difficulties, he will find a Conservative Government on his side of the House.
8.55 p.m.
Mr. Ian Mikardo: A Conservative Government on that side of the House is an interesting thought. We shall not only have changed the Government; we shall have changed the rules of the House to put the Opposition where the Government now are.
I apologise for having missed the last one and a half hours of the debate. I went home to deputise for a friend who was not well and was due to speak to a meeting on the EEC policy of the British Government, so I have been talking about that elsewhere.
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In the few moments that I shall occupy, I should like to refer to almost the first thing said by my right hon. Friend the Secretary of State in opening the debate. He said that he wanted the debate to be about energy and not about the pros and cons or our membership of the Common Market. Of course, he was giving the House absolutely correct guidance, because this was to be an energy debate. From what I have heard, that guidance was followed almost entirely by the speakers who succeeded him. But one must comment in relation to that subject on the nature of this debate.
As my right hon. Friend said, we are debating a great mass of stuff. He held it up. It is an inch or two thick. I do not know how weighty are its contents. I have read only two of the orders. But it is certainly weighty in terms of avoirdupois. It has been produced by a number of gentlemen described by the right hon. Member for Wanstead and Woodford (Mr. Jenkin)—if I recall his words aright—as being so tightly chained to their desks that they have no idea of what is going on in the world all around them. We shall have to look at the record tomorrow and compare his phraseology with mine. I think that I am not far out—perhaps a little more polished and colourful.
We are debating something which by common consent of all those who have spoken this evening can affect what developments we make in nuclear energy and can affect out treatment of the coal industry. It can place limitations upon the extent to which we give priority treatment to coal—that is, discriminate positively in favour of coal. It can affect some basic elements in the Government's policy in respect of the development of North Sea oil and their relationships with the companies, and all the rest.
We are debating something which is vital, in the pure sense of the word—a matter of life—for this nation. This Parliament of 700 years' standing has the power and the right today to "take note" of the work of these gentlemen sitting in Brussels—no more. We cannot say "We like it". We cannot say "We do not like it". We cannot say "We think that orders Nos. 1, 2, 4, 9 and 11 are good and the rest are not so good."

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We cannot say "We would very much like to see order No. 2 amended by the addition of a so-and-so or a such-which." We are not allowed to say any of that. We shall not be able to say "All right, we shall take note of the orders, but—". No.
The only power of all of us who think so much of ourselves, and think we are so good and that we study politics and policy so much and are competent to guard over the affairs of our fellow citizens, is to take note. However much my right hon. Friend said—and to whatever good effect he said it—that the debate is not about membership or anything connected with membership of the Common Market, one cannot escape the fact, as he will be the first to realise, that the limited extent to which we in this House can safeguard and preserve the property and the destinies of this nation must be affected. That will weigh heavily with people when they come shortly to make perhaps the most crucial decision this nation has ever made in peace time.
9.0 p.m.
Mr. Tom Normanton: I do not think there can be any doubt in the mind of either friend or foe of the concept of Britain's membership of the EEC that this debate has been useful. It has been valuable for a large number of reasons, some of which I hope to bring out in my winding-up speech.
Before I come to individual criticisms or comments on speeches presented by hon. Members on either side of the House—and there are many points which require comment—I wish to place on record a number of matters which involve principle rather than detail.
First, we should take great satisfaction from the fact that this debate is the second, or perhaps the third, occasion when the House has discussed a Commission proposal simultaneously with or just before the consideration of those proposals elsewhere. By "elsewhere" I mean inside the European Parliament, in the Council of Ministers or in the various committees which consider many of the Commission's proposals before presentation to the European Parliament.
This House has spent seven hours debating 10 separate but interlinked sets of Commission proposals. In the normal course of events the European Parliament
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and its committees would have spent three hours debating just one set of proposals. The European Parliament would have debated them following consideration amounting to several times the span of three hours in the committees of the European Parliament—committees which discuss the proposals critically and constructively.
Therefore, although the debate has lasted seven hours in this House—compared with previous debates on Community matters which have lasted a mere one or two hours—this is a very considerable improvement. But we have a long way to go before this House establishes the kind of machinery which will be appropriate to deal with the Commission's legislative and administrative proposals. This is not a point I am conceding to the anti-Community lobby but is a recognition of the situation which confronts hon. Members in this House. I believe that we are at least moving in the right direction.
In the Energy Committee of the European Parliament, of which I am privileged to be a member, the proceedings comprise a discussion rather than a debate. The meetings are informal, informed, intimate, frank—and, above all, not recorded. Therefore, nobody who takes part in such a discussion needs to say anything for effect for his constituency or for any other reason. A Member of such a committee needs only to be constructive. I certainly regard that procedure in the earlier stages during which proposals are considered as having very great merits.
The second point about the meetings is that they take place in the closest contact with the Commissioner responsible for drafting the proposals. I cannot let this occasion pass without recording a genuine debt of gratitude which Europe as a whole owes to M. Simonet, the Commissioner responsible for this aspect of Community policy. He has a very small staff and I believe that three of its members should be mentioned. I refer to M. Spaak, M. Blondel and Herr Schuster. Those three directors-general under M. Simonet deal with special areas of energy.
The point to remember is that on any one of these 10 subjects there could be 10 or 20 hours of discussion and debate before a final decision is taken to present the views of Parliament to the Commission.
Mr. Ted Leadbitter: To put the statistical record straight, may I ask whether the hon. Gentleman agrees that, against the general background of over 8,000 directives, orders or regulations from the Common Market, we have had only about 20 hours' debate in this House since the Treaty of Accession?
Mr. Normanton: Yes. But the point is that the administrative or debating procedure which has been established for dealing with this mass of legislation, directives or regulations has not yet been perfected. I hope that hon. Members on both sides of the House will be most energetic about having measures adopted to deal with that matter.
I am particularly grateful for the comments that have been made tonight arising from the fact that I have been appointed as Rapporteur to the European Parliament on one of these 10 proposals. I refer to the paper which deals with the financing of common projects for hydrocarbon exploration. The comments, both critical and constructive, which have been forthcoming in the debate are, I assure the House, of considerable benefit to me in trying to inject into my report to the European Parliament proposals, thoughts and, indeed, critical comments on the Commission's proposals with a view to arriving at better solutions than those contained in the proposals.
This debate can and, I hope, will in future continue to be conducted in a manner which will result in the improvement and variation of Commission proposals. In other words this House, if it takes the opportunity which debates of this kind present to it, has an opportunity to influence events to a far greater degree than many right hon. and hon. Members currently appear to believe.
Mr. Powell: The hon. Gentleman is eloquently urging that we should have more opportunities to debate these documents. Does he believe that the House should have any power to some to decisions on them?
Mr. Normanton: That, I must say, is a tricky point, but I am sure that the right hon. Gentleman did not put it in the form of a trick or a pit into which I would allow myself to fall. I am convinced, based entirely on two years' first-hand experience of the European Parliament
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and its committees, that the influence that individual Members bring to bear before proposals reach the decision-taking centre—the Council of Ministers—is out of all proportion to that as seen and interpreted by many hon. Members.
Mr. Fletcher-Cooke: On that point—
Mr. Mikardo rose—
Mr. Nigel Spearing rose—
Mr. Deputy Speaker: Order. Will the hon. Member for Cheadle (Mr. Norman-ton) indicate to whom he wishes to defer?
Mr. Normanton: My hon. and learned Friend the Member for Darwen (Mr. Fletcher-Cooke).
Mr. Fletcher-Cooke: Surely there can be no constitutional objection, even by the most devoted adherent of the EEC, to this House coming to a decision on how the Minister should speak and vote at the Council before the Council takes any decision.
Mr. Normanton: I realise that I am straying from the secure area of energy to the unpredictable highways of constitutional polemics.
I hope that the Under-Secretary of State will comment on this. I hope he will confirm that in all the discussions which take place at the meetings of Ministers of Energy there is clear evidence of a reluctance to reach decisions until they have all agreed on the formula. I hope that that will generally be his interpretation of the way the negotiations and discussions take place in the Council of Ministers. That is certainly the view I have heard.
Some hon. Members may feel that it is desirable to bind a Minister to a Community decision or proposal. I doubt whether that is in practice constitutionally necessary if the Minister sticks to his point and if he energetically and consistently pursues the stand which he adopts during discussions in the Council of Ministers. At the end of the day the decisions invariably are binding. If the right hon. Gentleman wishes to react to this question, I hope he will be prepared to confirm that that is the experience he has had during the time he has been answerable for energy questions on our behalf.
Mr. Mikardo: I should like the hon. Gentleman to comment on two points. First, he said that it would be wrong for us to tie down the Minister and that it would be wicked in a democracy to have a vote. That does not matter. Since the hon. Gentleman has taken part in many debates where a draft has been discussed and where changes have been proposed, will he lay in the Library a list of the drafts which were amended as a result of the debates he described? To help him, I can tell him that he will need only a very small envelope in which to put such a list.
Secondly, will the hon. Gentleman say in what way his thesis applies to matters such as industrial and regional policy, which do not go to the Council of Ministers anyway?
Mr. Normanton: The hon. Member for Bethnal Green and Bow (Mr. Mikardo) knows that it does not lie in the hands of an Opposition spokesman to make decisions of that kind. This is a matter for the Leader of the House and for his right hon. Friends in the Government. Perhaps he will take active steps to pursue that red herring in that quarter.
This debate has been more informative and constructive in the way in which comments have been made than have other debates on Community legislation. With one or two exceptions, there has been a universal desire to keep to the subject of energy. In that sense, right hon. and hon. Members have met the earnest request of the Secretary of State. The views have been helpful and critical but constructive.
Since the purpose of these debates is to take note of Community legislation and proposals for regulations and directives, I wish to put on record the energy policy objective which some hon. Members have pursued in the Community and in the European Parliament. I quote:
"The … group believes that Europe's industrial expansion and economic stability depend upon the establishment of a Community approach towards an energy policy. The object should be to provide the consumer with a choice of supply, at the lowest possible cost, compatible with the overriding need for security and continuity. The rôle of the Commission should be to initiate proposals for such an approach and to devise a programme of action for implementation by Member countries. At this stage in the Community's development we cannot support the establish-
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ment of Community undertakings for the production or distribution of energy but place the greatest emphasis upon the Commission's rôle as a co-ordinator in the fields of sourcing, production, distribution, consumption and conservation of all forms of energy."
I ask whether, after careful deliberation of that as a policy objective of those of us who are pursuing that line in the European Parliament by the process of debate and by the process of exerting the force of our argument upon our colleagues and on the Commission, any hon. Member can cavil at that as being in the very best interests of the country.
Mr. Spearing: Will the hon. Gentleman give way?
Mr. Normanton: No. I am pressed for time. There are a great many matters about which I feel I should make some observation.
It is against this view of a Community policy that I believe we should weigh carefully the proposals and the recommendations of the Commission which we have before us in this massive dossier of 10 separate papers. We may be critical of them in detail—I hope that we are—but we cannot criticise the vital need for a co-ordinated approach to dealing with the areas which they cover.
I feel that it is appropriate for me to make a few comments on certain of the papers. Time does not permit me to do more than that. As regards document No. 4, the defects in the translation should be noted. Reference is made to "joint exploration projections". Those of us who are not quite so familiar with the defects in translators' capabilities, and certainly Government supporters, should not be led to believe that this means "joint participation" in the sense of the Labour Party manifesto. That is not the sense in which the term "joint exploration projections" is used. When the Secretary of State is in Brussels tomorrow, I hope he will seek clarification of the real significance of the phrase.
In principle, and certainly in practice, the Community places the greatest possible importance upon the devolution of putting into effect its proposals rather than concentrating on their being centralised.
There is an area in Document No. 5 which needs considerable clarification if we are to overcome the widespread fears

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about sovereignty in relation to the North Sea. Reference is made to
"territorial waters and adjacent zones not subject to sovereignty".
I hope that, when he is in Brussels, the Secretary of State will obtain at first hand not only the exact meaning of that term in words but also the spirit behind the words.
During the two years in which there has been frequent debate and discussion about North Sea oil and similar related subjects, I assure the House that there has not been one reference from any parliamentarians from any of the other eight member States which would lead anyone to believe that they, their member States or their political parties have it in mind to regard North Sea oil other than within the province of Britain's sovereignty.
I challenge anyone who has discussed the matter with the Commissioners or the staff of the Commission to suggest that they are able to draw from their discussions any evidence of a will, a wish or a thought of extracting North Sea oil, identifying it as Community territory or property and excluding Britain from it. That is not true, nor will this House allow such a thing to take place. That is the sort of thing we discussed and verified at first hand as members of the European Parliament in our continuous discussions with Commissioners.
On Document No. 5 there is another point which the House will be well advised to note. I hope that in Brussels tomorrow the right hon. Gentleman will take particular note of it. I do not think that even those who are enamoured with the concept of the Community are in any way satisfied with the adequacy of financial control and the auditing of the finances involved in the present spending of the Community. When we come to proposals of the kind that we are now discussing, we are moving into sums which make existing expenditure look like petty cash.
I hope that the Government will do all they can to ensure that the Community establishes at the earliest possible moment a proper form of financial control and auditing for all aspects of Community activities. In particular I hope that a court of audit will be pressed forward with the greatest possible speed.
Mr. Spearing: Why not now?
Mr. Normanton: I need not remind the House that that is a decision which must be taken by the Community as a whole. It is not a decision which can be taken unilaterally. I hope that the Government will take on board that point and press hard for that to be done.
It is essential to make one quick reference to what my right hon. Friend the Member for Wanstead and Woodford (Mr. Jenkin) said in opening the debate. My right hon. Friend commented about there being no reference to prices or the underpinning of the price of oil in any of these proposals. I hope that is a matter that the Government will confirm. I hope they have taken that aboard and that they will press the point in their discussions with the Energy Ministers in Brussels.
Another point on Document No. 5 is that I hope the Secretary of State, despite his hesitancy and the lukewarm approach which he took in his opening speech, will lend his weight to obtain unanimous approval for the proposals contained in Document No. 5. I hope that he will assist in the speeding up of worthwhile exploration in British territorial waters and in the zones which are outside our sovereignty. That is of crucial importance. Unless the Government take that point aboard and press it effectively, Britain will be the poorer.
I now turn to Documents Nos. 6 and 7. Coal is established as a vital Community energy source. Both sides of the House strongly endorse that as a matter of policy so long as it is concentrated on electrical generation. The arrangements for the provision of coke are causing acute difficulties, but that has been taken aboard by the right hon. Gentleman in his discussions. Here we have a firm declaration by the non-member States, which I hope will be adopted as Community policy, that coal is and will continue to be of considerable and lasting importance as a basis of our energy policy.
I now come to document No. 10. There have been references to the International Energy Agency and whether the Government should concentrate their actions in

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the area of the agency itself or whether they should take action in a Community energy agency. I believe that we shall be much more effective if we contribute to the establishment of a Community energy agency. It would then be in a better position to be a part of the International Energy Agency. The two are, and must be, interdependent.
I wish to comment on some of the points that have been made during the debate by hon. Members on both sides of the House. I made a voluminous record of the salient points that were made. The Secretary of State's statement about a massive contribution from nuclear generation smelt of complacency. The Government's policy on nuclear-generated power has been criticised, and I do not think I need add to what has been said but I repeat that the right hon. Gentleman's statement smells of complacency especially when viewed against the ambitious projections of other member States of the Community.
Mr. Varley: The hon. Gentleman is critical of our nuclear policy. What advice would he give his hon. Friends today on the question of nuclear policy, bearing in mind that for nearly four years up to February of last year the Conservative Government did not take a decision on the choice of nuclear reactor?
Mr. Normanton: This is not an occasion on which I wish to kick a ball into my own goal. I think that both major parties in and out of government have differences of view on this subject, but when it came to taking a decision the present Government produced a molehill when they should have produced a mountain. It is the size of the programme that I criticise, not the decision about the reactor. It is microscopic compared with the massive programmes of other member States of the Community. The unreality of it is to be seen in the Government's view of the matter compared with that of the French and the German Governments.
I feel that we should not let this occasion pass without acknowledging the debt of gratitude that we owe to my right hon. Friend the Member for Knutsford (Mr. Davies), who pressed the point that energy
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is the most crucial matter ever considered by the Community, not only in financial but in economic and industrial terms. The resources required are unique in the history of finance.
I think that my hon. and learned Friend the Member for Darwen has not got the right perspective on the question of "compulsory overtones". I have still to find evidence of any will or intention by the Commission to impose decisions on any member State or on the member States collectively. The whole purpose of the Commission is to reach agreement, to find common ground, and I believe that this debate has shown considerable agreement about the establishment of an energy policy for Europe, for the Community, with Britain playing a positive and constructive part.
I hope that the seriousness of Britain's situation will be recognised and reflected in action by the Minister in Brussels on Thursday and action within the framework of the Commission's proposals, adding his own views and those expressed in the debate, which I hope will be the precursor of a continuing and expanding procedure for involving all hon. Members in influencing the course of Community action.
9.31 p.m.
The Under-Secretary of State for Energy (Mr. Alexander Eadie): The Secretary of State expressed the hope today that the House would debate these documents fully and frankly. There can be no doubt of the range and depth of interest that the House has shown in them. I know that my noble Friend will fully reflect the views expressed tonight in Brussels on Thursday.
We do not expect any substantive decisions to be taken on any of these documents at the Energy Council, which is one of a series of meetings of Energy Ministers. Nearly all the matters that we have been considering deal, as my right hon. Friend said, with long-term issues which cannot be resolved in the near future. The formulation of an energy policy for the Community must proceed slowly and pragmatically. We shall not allow ourselves to be rushed in these matters. As hon. Members have said, there are certain points of fundamental importance in these documents and it has been useful to have the guidance of

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the House not only for the meeting on Thursday but for the whole course of discussion in Brussels.
The electricity guidelines document is, of course, a Commission policy paper. It is not itself adopted by the Council of Ministers and so does not directly impose obligations on member States. The Council instrument will be a resolution which "takes note" of the Commission guidelines.
The right hon. Member for Wanstead and Woodford (Mr. Jenkin) raised the question of domestic heating and said little to which most hon. Members would take exception. However, perhaps unwittingly, he implied that there was no restriction on what was meant when one was dealing with domestic heating.
I am encouraged by the emphasis that the document places on the importance of insulation and by the statement that electric heating should be permitted only in cases where its rational use could be guaranteed. There was no intention of just doing that without the stricture that I have tried to explain to the House.
There has been some discussion of North Sea oil and the issues arising from it. Various hon. Members have expressed concern that these proposals could affect our control over North Sea oil. I need hardly say that the Government pay the closest attention to all, and any, proposals coming out of Brussels which could have implications for our national control over North Sea oil. As my right hon. Friend said in his opening speech, we have made it abundantly clear in Brussels that it is for us to determine policy in these matters. It was for this reason that my right hon. Friend said that there were various aspects in the proposals which we could not go along with—and he gave examples.
It is not difficult to find references in the documents to proposals which seem to have implications for our North Sea oil. But I would ask the House to remember that we have not accepted these proposals and that a great deal of further discussion is needed in Brussels. In this discussion we shall, as the motion before the House states, ensure, while co-operating in the development of an energy policy for the Community, that such a policy is consistent with our national objectives.
Mr. Skeet: Will the Minister bear in mind that the Commission is talking about a consortium, a joint development, in the North Sea, for which subsidies would be available? Would this be compatible with BNHC?
Mr. Eadie: The hon. Gentleman is a little confused. I am talking about the motion. We seek to ensure an energy policy that is consistent with our national objectives. That is what I am saying. If I have time I will come to some of the matters raised by the hon. Gentleman.
I pose the question: what does that mean in terms of those proposals which appear to have implications for North Sea oil? My right hon. Friend has already explained that we are not ready to accept common rules for the import and export of hydrocarbons. In the document entitled "A Community Policy in the Hydrocarbons Sector", which, as my right hon. Friend said, is still in cold storage, there are other suggestions which we do not like. The document speaks of possible Community arrangements for the granting of exploration licences. We shall make it clear, if and when a proposal is put forward by the Commission, that the granting of licences is a matter for us.
Then there is the question of Community support for offshore hydrocarbons development. As the House knows, there is already a scheme for financial support of high-risk technological developments in the hydrocarbons sector. There was a first allocation of funds under this existing scheme last December, from which United Kingdom firms will benefit. I am advised that discussions on contracts are still proceeding, but I have no reason to suppose that there is any adverse implication under this scheme for our control over our own offshore developments.
On the contrary, those British firms which applied for support under the scheme stand to benefit financially from it. In view of recent developments in world oil prices, the Commission feels it to be its duty to do all it can to promote the development of secure sources of hydrocarbons. Its recent proposal concerns exploration offshore, chiefly in the North Atlantic. I think it is wrong to see in this proposal any specific United Kingdom North Sea implications. It is

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defined in such a way as to cover exploration activities, not only in the offshore waters of Community States but, more particularly, it appears to be aimed at difficult waters, such as those off Greenland.
The fact is, however, that this proposal has not yet been discussed between member States. When it is, we shall examine, as my right hon. Friend said in his explanatory memorandum, whether the proposal implies any limitation for our freedom to exploit the United Kingdom Continental Shelf. We shall, in the same way, examine very critically any other proposals put forward by the Commission—for instance, on prices or refining—to ensure that they are consistent with our national policies.
The right hon. Member for Wanstead and Woodford raised the problem which would arise with a fall in oil prices. There is no obvious reason why the price of crude oil should fall while production is largely controlled by OPEC countries. If it does fall it will be because of the united efforts of the 18 countries participating in the international energy programme, through conservation measures and the accelerated development of other energy sources, and through the provision of the necessary finance. There will be a continued dialogue on the control of oil prices, and the provision of finance implies, as Dr. Kissinger has recently suggested, some form of joint action to underwrite a fair price for new energy resources. The Government are urgently studying these proposals and are considering ways and means of giving effect to them.
My hon. Friend the Member for Bristol, North-East (Mr. Palmer) asked about the construction of oil-fired power stations. The Government's philosophy towards them is conditioned by the future availability of alternative fuels. We have embarked upon a modest nuclear programme. The supply of coal, as forecast in the final report on the examination of the coal industry, will not be able to meet all the expansion of fossil fuel demand in the electricity supply industry up to 1990. We therefore expect that it will be necessary to construct more oil-fired power stations to meet the growth in the country's electricity demand during
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the 1980s. In the longer term we expect that nuclear power will play an increasing rôle in meeting this demand.
My hon. Friend also asked about the size of the nuclear power programme. I know that the current programme compares unfavourably in this respect with its predecessor. However, I am sure that my hon. Friend agrees that the first and vital requirement is that the new programme should be a success. We must not stumble through trying to over-strain our resources in the early years. Of course we need to get the AGRs working and to press ahead with the SGHWRs as fast as we prudently can, and that we intend to do.
Mr. Palmer: My hon. Friend's statement that we are not going to get enough coal is a little startling, and if, in addition, we have still to be dependent to a great extent on imported oil, should we not in the circumstances be expanding the nuclear power programme?
Mr. Eadie: I want to clarify what I said. We hope to step up coal production. That fact is reflected in the study being carried out. Again, our aim is to get the existing nuclear power programme off the ground.
Hon. Members have expressed concern about the safety of nuclear power. I understand their concern about the safety of nuclear installations, and I assure them that the Government attach the utmost importance to the provision of adequate measures to protect public health and safety, and, in particular, the health of the workers in the industries concerned, bearing in mind the proliferation of nuclear installations envisaged by the Commission over the next 10 years.
We have checks and balances. There are stringent safety procedures. These are laid down under conditions attached to nuclear site licences granted under the Nuclear Installations Act. These procedures are enforced and are kept continuously under review by the Nuclear Installations Inspectorate of the Health and Safety Executive. The same standards as Government Departments use are applied by the Atomic Energy Authority to installations under its control. The stringent safety regulations and their application has brought about acceptability of nuclear power by the people.

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The necessary checks and balances have been carried out in order to ensure safety, and I hope that the public will continue to accept them as being effective.
Mr. John H. Osborn: Will the hon. Gentleman take up the point that, particularly in Europe—let alone in this country—parliamentarians are uneasy as to whether the steps now being taken, particularly with regard to waste disposal in the sea, are safe and adequate? We are assured, as parliamentarians, that they are. Are Ministers in Europe completely satisfied that the processes are safe and adequately carried out?
Mr. Eadie: We have public acceptability of nuclear power because of our checks and balances in all aspects of safety. That is a fact. The same process was carried out under the Conservative Government as under the present Government. If the hon. Gentleman wishes to write to me on the subject, I will be happy to give him further information. Perhaps at this point I may compliment him on his critique on the whole question of nuclear power, which I have had the privilege to read. We all know his interest in the subject and the value of his contributions. But there may be a difference of opinion, a difference of emphasis. If he has a particular point to make, I shall be pleased to hear from him.
My hon. Friend the Member for Hackney, South and Shoreditch (Mr. Brown) referred to nuclear sites. All licensed nuclear sites have to be covered for up to £5 million against any single incident. This cover is provided by the British Nuclear Insurance Pool, a group specially formed for the purpose. If cover of £5 million proved inadequate in any single incident, the balance would be met from Government funds, as provided by the Nuclear Installations Act 1965. For unlicensed sites—for example, those of the United Kingdom Atomic Energy Authority—cover is provided entirely by the Government.
My hon. Friend the Member for Bristol, North-East said that he had always believed in the total energy concept. I want to come to one point on that later on, because I think that I was misunderstood on the question of oil-fired power stations.
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My hon. Friend is aware that many of us campaigned for what we believed was an overall energy policy. It was significant that hon. Members on both sides of the House took part in the campaign. My hon. Friend's statement that some Ministers had in the past seemed to be concerned with getting rid of our coal industry was challenged by the right hon. Member for Wanstead and Woodford. There was an amazing affinity of interest between my hon. Friend and the right hon. Gentleman, who said that the country's difficulty was that perhaps we had not persuaded the men in the mining industry that we were not engaged in a short-term bonanza. The right hon. Gentleman made the constructive point that we must convince the men that it is no short-term bonanza.
My right hon. Friend and I have been doing the best we can to persuade the miners of that. We shall have been in our present posts for a year at the end of the month, and in that time he and I have visited every coalfield. We have never believed that after a couple of decades the miners could be convinced by our staying in the office issuing edicts. I have crawled along the coalfaces in all the coalfields, and have spoken to the miners there. I have held meetings with them at the coalface. To the chagrin of my family, most of my weekends for some time have been spent addressing miners' conferences, trying to spell out the point that the right hon. Gentleman tried to make.
Mr. Patrick Jenkin: I am grateful to the Minister for the evident care he has taken over the suggestion I made. Putting a floor price under energy would give him and his right hon. Friend an additional, and I think potent, weapon in trying to convince people who work in the mining industry that it has a long-term future. That was the point I was trying to make. I am glad that the hon. Gentleman has been so forthcoming about it.
Mr. Eadie: Any points that the right hon. Gentleman has made in the debate, or has to make in the future, will be seriously considered by my right hon. Friend. Indeed, I have my right hon. Friend's authority to say so.
The hon. Member for Beeston (Mr. Lester) generously referred to the fact that I had visited the Nottingham coalfield

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and that I was the first Member of Parliament to address the Nottingham miners' resolution conference, which I did last week. The miners were very generous to me, and the right hon. Member for Wanstead and Woodford will be glad to hear that they responded very well to the point which I made about the rôle which coal must play in the economy. I was presented at the conference with the history of the Nottingham miners. I was glad to tell them that, although my right hon. Friend and I like to read history, I believe that after a year in office we are making history. It is probably too much to expect that the hon. Gentleman will be invited to address the Nottingham miners' conference. Knowing the miners, I say that it would be a fairly revolutionary concept if they were to invite a Tory to address them. However, that is a matter for them.
I wish to deal with two important points which the hon. Member for Beeston made, because they are pertinent to the debate and to the documents we are discussing. He referred to the question of foreign labour in the pits. I do not think that that is on. It would not help if we were to try to solve the problem of manpower in the pits by using foreign labour. I know that he made the suggestion in a constructive way, but it would not be helpful at this time if we were to adopt it.
Let me refer to the experience in Germany. I went down one of the pits in the Ruhr a couple of months ago. I do not confine my visits to British pits; I go abroad. In that pit 25 per cent. of the labour force was foreign. However, what distressed the German Government was the fact that about 40 per cent. of the labour force at the coal face was foreign.
Therefore, the use of foreign labour is no answer to the problem. The answer is that we have a good indigenous coal industry with an important rôle to play and we must give the miners confidence in their industry. We must carry out the recommendations of the tripartite coal examination. We must achieve the increased productivity or increased production about which we have spoken, of 120 million to 150 million tons.
I am glad that the House has taken the opportunity of debating the EEC documents. They are important because
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they strike at the heart of the matters which will form the basis of any European energy policy which it might be possible to devise in future. But the establishment of such a policy will not be achieved overnight. As the House is aware, the next meeting of the Council of Energy Ministers will take place in Brussels on Thursday, and my noble Friend Lord Balogh will represent the United Kingdom. None of the documents seems likely to be discussed.
One element in our approach to the policy documents is that we are not opposed for dog-in-the-manger reasons to a European energy policy. That is the attitude embodied in the motion for which the Government seek the approval of the House.
Question put and agreed to.
Resolved,
That this House takes note of EEC Commission documents Nos. R/446/74 and R/3333/74 and of the Government's intention, whilst co-operating in the development of a Community energy policy, of ensuring that such a policy is consistent with the aims of the United Kingdom's domestic energy policy.

VIOLENCE IN MARRIAGE
Ordered,
That a Select Committee be appointed to consider the extent, nature and causes of the problems of families where there is violence between the partners or where children suffer non-accidental injury; and to make recommendations.
Ordered,
That the Committee do consist of Thirteen Members.
The Committee was accordingly nominated of Mr. Michael Brotherton, Mr. John Cronin, Sir William Elliott, Mrs. Winifred Ewing, Mr. Bruce George, Mr. William Hamilton, Mrs. Lena Jeger, Mr. Patrick Mayhew, Mrs. Millie Miller, Mr. Eric Moonman, Sir George Sinclair, Mrs. Ann Taylor and Sir George Young.
Ordered,
That the Committee have power to send for persons, papers and records; to sit notwithstanding any adjournment of the House; to adjourn from place to place; to report from time to time; and to report Minutes of Evidence from time to time.
Ordered,
That Three be the Quorum of the Committee.—[Mr. Walter Harrison.]

VIOLENCE IN MARRIAGE
  ADJOURNMENT
  Motion made, and Question proposed, That this House do now adjourn.—[Mr. Stoddart.]

TEACHERS (SUPPLY)
10.0 p.m.
Mr. Ivor Clemitson: It is not my purpose in this debate to call in question the reasoning in White Paper Cmnd. 5174 or the subsequent Circular 7/73 about national teacher training requirements in the coming years. My purpose is to bring to the attention of the House the special problems of Bedfordshire, especially South Bedfordshire and my own borough of Luton.
We have an immediate problem. Since the beginning of this term 2,400 children in three Luton schools have received less than full-time education. That figure was given in a Written Answer on 4th February. Two high schools are still on short-time schooling. The reason is simply that there are not enough teachers. To make it worse, this is not the first time that many of these 2,400 children have been denied their right to full-time education. Many of them had a late start to their school career in 1967 because at that stage there were staff shortages.
There is good reason for believing that the real size of the problem is a good deal worse than the figures indicate. A number of children are being taught in amalgamated classes of large size. If normal ratios were being properly observed in all cases, it might well be that far more children would be on four-and-a-half-day schooling in Luton.
Officially Luton is short of 83 teachers but, again, the real figure may be higher if the number of places actually being advertised is counted. Even if we take the official figure of 83, Luton schools are 5 per cent. understaffed. In other words, if present ratios were properly observed well over 1,500 Luton children would be without teachers—and that represents the size of a fairly large comprehensive school. Short-time working is becoming all too familiar in certain industries. In Luton, thank God, we may have escaped that, but it is our children who are suffering a similar fate.
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This may be dismissed as an unfortunate temporary phenomenon which will soon pass, but the figures do not support such a hopeful prognosis. In this year alone 2,500 young people will be leaving secondary schools in Luton and 3,200 will be entering them. There will be 700 more children in secondary schools, and 30 more teachers will be needed to teach them even at 1971 national pupil-teacher ratios for all schools, and beyond this year the picture does not improve.
According to the 1971 census figures for Luton, there were 43,760 children in the 0-to-4 age group inclusive. In the 12-to-16 age group inclusive there were 33,565. The 12-to-16 age group of 1983, assuming a balance of immigration and emigration into and out of the area, will therefore be 30 per cent. higher than it was in 1971. The assumption that as many children will leave the area as come into it is probably optimistic. Unless all past trends are halted or reversed, there will be a net immigration figure.
Admittedly, the peak year in the 0-to-16 age group in the 1971 census figures for Luton was the six-year-olds with 9,225, and below that age there is evidence that the birth rate has fallen in Luton, as it has in the rest of the country. I do not wish to claim that we are the only place which is out of step, but the indications are that our total school population is unlikely to decrease in the years up to 1981 and that our secondary school population will grow by much more than the average for the rest of the country.
There is a tiny village in Bedfordshire which has a sign warning drivers that "Tingrith abounds with children." What is true of Tingrith is true of Bedfordshire as a whole. We are top of the non-metropolitan county league for children. Over the next five years we shall need in Luton—merely to maintain existing ratios, let alone improve them—over 200 more teachers in our secondary schools. The question is, where shall we get them from?
The argument of Cmnd. 5174 and Circular 7/73 is that we can cut back on teacher training and still improve pupil-teacher ratios. As Nelson expected every man to do his duty, so my right hon. Friend the Secretary of State expects every local education authority to do the

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same, Bedfordshire included. The agreed pre-1974 annual student intake for teacher training in the county was 490. The 1974 figure was cut to 410. The 1975 figure was cut to 310—nearly 27 per cent. down on the pre-1974 figure and, incidentally, well below the figure for the rest of the South-East Region.
Fortunately my right hon. Friend partially relented, and the revised 1975 figure is now, I understand, 360. This is a welcome if small recognition of Bedfordshire's special problems.
I am well aware that the reply to the argument will be that teacher training must be planned on a national scale. My right hon. Friend said as much in reply to a Question of mine last Tuesday, when he said:
"My hon. Friend will be aware that the teacher training plans in one locality are not designed simply to provide teachers for that locality. Looking at the national situation, it is clear that we shall have a school population falling off in numbers in the years ahead. We are trying to achieve a sufficient supply of teachers to improve staffing ratios, at the same time trying to avoid the risk of teacher unemployment."—[Official Report, 4th February 1975; Vol. 885, c. 1122.]
That is a perfectly right and legitimate attitude given one simple assumption: the perfect mobility of teachers. If there are enough teachers nationally, the assumption must be that if any area is short of them the surplus teachers in other areas will automatically go there. Unfortunately that simply does not work—at least, it does not work for Luton. For some reason, teachers are not attracted to our fair metropolis. We are, after all, noted more for our factories than for our culture or the beauty of our buildings. We seem to score high on the cost of living, particularly the cost of housing, and low in aesthetics.
I would agree that that is hardly the fault of the Department of Education and Science. There is, however, one practical point on which the Department's help might be sought. I speak of the London allowance. Teachers in Luton find it hard to understand why their colleagues in Tring or in the rural fastnesses of Haslemere get the allowance when they themselves do not. There are not lacking teachers who live in the very shadow of Luton schools and who prefer to take a
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trip of a few miles every day over the border into Hertfordshire to get the extra cash.
Of course, wherever a line is drawn an anomaly is created. But if this particular line has to be drawn anywhere, it would be much more sensible to put it just north of the great conurbation of Luton and Dunstable rather than just south of it.
If we cannot attract teachers, the only thing to do is to train them ourselves. It was precisely this reasoning which led to the founding of the Putteridge Bury College of Education for Mature Students. That college has been outstandingly successful, not least in providing the Luton area with a supply of teachers. Some 70 per cent. of the teachers trained at Putteridge Bury stayed in the area. Yet it is that college which is being made the main victim of the cuts. Originally its intake for 1975 was to have been reduced to zero. If it is to have any future, the Department apparently sees it as being through amalgamation with the Bedford colleges.
A far more sensible future for Putteridge Bury would be amalgamation with the Luton College of Technology. That college is one of large size and established reputation in a number of fields. An amalgamation between the two would help to provide just that centre of higher education which Luton needs. It is a matter of great concern to many people in Luton that the proportion of pupils going on to higher education is low. Luton needs every higher education encouragement it can get. The amalgamation of Luton College of Technology and Putteridge Bury would provide a much-needed fillip to interest in higher education. This would be particularly true if the applications already made for recognition of Higher Education diploma courses and B.Ed. courses at the colleges were granted.
This must be considered along with a number of other arguments, such as the opportunity which Putteridge Bury affords to mature students to develop their abilities at a later stage than could otherwise be possible, and the obvious difficulties and disincentives to students involved in a shift of the centre of gravity to Bedford. If Putteridge Bury were allowed to develop in the way suggested, it could be precisely

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the kind of centre for in-service training on which the White Paper laid such great stress, and with the development of B.Ed. courses it would be a source of supply not only of primary but of secondary teachers, the very sector in which our major problems are occurring and will increasingly occur.
It is a hard task to compress such a complex problem into the few minutes of an Adjournment debate. I would plead with my hon. Friend the Minister to consider very seriously the present plight and future prospects for teacher supply in Bedfordshire, and especially in the south of the county. I would press upon my hon. Friend the urgent need to meet representatives of those concerned to discuss the whole matter in greater detail than is possible this evening.
We all wish to see an improvement in the standard of education and also a reduction in pupil-teacher ratios. I plead that Bedfordshire, and Luton in particular, will not be an exception that proves the rule.
10.14 p.m.
The Under-Secretary of State for Education and Science (Mr. Ernest Armstrong): My hon. Friend the Member for Luton. East (Mr. Clemitson) put a strong case in respect of a real problem that exists in South Bedfordshire, particularly in the borough of Luton. I assure him that any child who does not receive full-time education is a matter of serious concern to the Department and to the education service. As one who has always believed that a great number of our children have not had long enough in school, I very much regret any circumstances that compel children to be denied full-time and regular education.
I give my hon. Friend the assurance that I will carefully consider the figures which he has put before the House to strengthen the case which he made on behalf of his constituents and the area he represents. Three schools having less than full-time education and involving 2,400 children constitute a real problem. I want to help my hon. Friend, and the Department will do all it can to assist the area. We shall carefully study the evidence he has put forward and see whether there is anything we can do to help.
I have been looking up the figures because my hon. Friend has rightly been
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persistent in bringing to the Department's attention the problems in Luton. In January last year the pupil-teacher ratio in Bedfordshire in both primary and secondary schools was slightly better than the national average. I am aware that that gives no comfort to parents and children who are involved in schools where there are shortages.
In the current year the authority is employing its full quota of teachers—about 4,500. This year not only has the authority indicated that it will take up the full quota of teachers that it has been allocated, but has asked for an additional quota. That matter is being seriously considered. We welcome that situation, because we have heard of authorities which are finding difficulty in employing their quotas.
In the next educational year beginning in September the total school population in the area is estimated to be about 1 per cent. down on this year. The provisional teacher quota already agreed and accepted by the authority is more than 2 per cent. up on this year's figure. That means that there will be a modest improvement in the pupil-teacher ratio.
I think that my hon. Friend will agree that the real difficulty lies in attracting teachers to particular schools. We are willing to discuss this problem with the authority.
I remind the House that the Houghton Report, which has been accepted by the teaching profession, indicates a marked improvement in career prospects. It is to be hoped that this will mean that the entry to the profession will be adequate. However, I assure my hon. Friend that we are not complacent and that I share his great concern.
Turning to the London allowance, I freely admit that this is a thorny problem. I have had many representations from teachers, teachers' organisations, local authorities and hon. Member on both sides of the House. I must be frank with the House and with my hon. Friend. I cannot hold out any hope that the area agreed by the Burnham Committee—this matter was put to the Burnham Committee—in the recently concluded agreement for London weighting as it applies to teachers will be amended. The local authority associations represented on the Burnham Management Panel were fully

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aware of the fact that wherever the line was drawn, as my hon. Friend readily admitted, those on the ouside would obviously feel at a disadvantage compared with those on the inside.
The line was drawn in such a way as to produce the same boundaries for teachers as for local government employees in the APT and C grades, and any suggestion for redrawing those boundaries would have implications not just for teachers, but for other public sector employees as well. The fact that the teachers' allowances are stepped means that the disparity that would have occurred between teachers in inner London and those in the Home Counties outside the London allowance area has been reduced and that what is called the "cliff edge" is not so large as to create particular difficulty for those areas just outside the outer boundary, I understand the feeling of the authority, of my hon. Friend and of teachers who look at other places and cannot understand why those places get the allowance and they do not. It is a very difficult matter.
It is indeed a paradox that my hon. Friend has been talking about the shortage of teachers at the same time as the newspapers and other media are full of the talk of cutting down on the entry to teacher training. Nevertheless, we must face reality.
The planned entry of non-graduate students to teacher training courses this autumn will be 30,000, which is a reduction of about 2,000 on last year's figure. But my hon. Friend will recognise that these students who start their training this year will not be entering schools as teachers until 1978 or 1979. Therefore, the number of students admitted to training this year is irrelevant to this year's staffing problems.
Let me remind the House how much demographic changes will affect the situation by 1978, 1979 and later years. At present, the total school population is still growing, although only slowly. The number of teachers is also still growing, but much faster than the school population. Because of the continuing decline in the number of children born year by year over the past 10 years, pupil numbers in the primary schools are already falling. Secondary school pupil numbers should continue to rise during the rest
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of this decade, but will then fall as the ever smaller age groups born in recent years work their way into the secondary schools.
There can be very little doubt now about the number of pupils of statutory age who will be in school in 1981, because most of them have already been born. We can be almost certain that the total school population in that year will be about 500,000 below the 1977 peak, and we can expect that in the next five years up to the mid-1980s there will be a further fall of about another 750,000. If there is not the early recovery, both in the number of births and in the staying-on rate, which the latest projections have assumed, the fall in pupil numbers may be even more substantial.
In the light of those figures no Government could afford to ignore the implications of changes of this order. The prospect of a massive fall in school population—and that is what it is—creates the opportunity to make great strides towards better staffing standards, and this is an opportunity which the Government hope and fully intend to seize. But it would be irresponsible to deny that the prospect would also create a grave risk of substantial teacher unemployment if the potential supply of teachers were not reduced below the present high level.
I now come to the case of Bedfordshire and to the question of the college for mature students. In the case of Bedfordshire the proposed admission targets for 1975 were discussed with the authority in the light of its interim proposals under Circular 7/73, and an adjustment was made to allow flexibility as between the three colleges of education in its area pending the settlement of final plans. Final reorganisation proposals have recently been submitted by the authority, and are currently under consideration by the Department. My right hon. Friend will reach a decision on them as soon as possible.
Reference has been made to the needs of the schools in Bedfordshire. I emphasise—and my hon. Friend expected this—that teacher training is a national matter, but I readily recognise that teacher training colleges in the area are a great asset and a great source of supply. It is the total number of children in the

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country's schools which conditions the country's need for teachers. Nevertheless, I take on board what my hon. Friend said.
Regarding mature students, as a former schoolmaster I believe that the contribution of mature students to the teaching service has been a remarkable one. Therefore, in a sense my hon. Friend is pushing an open door in stressing that.
Putteridge Bury and the other day colleges provide for mature students, who tend to be recruited locally and to teach in the areas in which they have trained. The Department values the contribution that mature students make to the teaching profession. However, it is true that over the next few years the average age of the teaching force will rise in any case as a large number of married women and others re-enter the profession. The move towards an all-graduate profession means that courses leading to BEd degrees will call for higher entry qualifications for training. I assure my hon. Friend that we shall bear in mind the great contribution that mature students can make.
What I have said about teacher numbers is related to the period from the latter part of this decade onwards—that is, to the period in which teacher training plans are adopted now. Therefore, despite all the difficulties and the difficult decisions which have to be made, we feel that we must let the authorities and the colleges know what the future is to be.
There is great cause for concern now because of the pressure on local education authority resources. The Government have done their best to ensure a continuing growth in the number of
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teachers next year by making provision in the RSG settlement for the employment nationally of the full quota of teachers for the school year 1975–76. The Bedfordshire authority is among those wishing to employ more than their quota. A few returns from authorities are still outstanding, but it should be possible very soon to finalise the quota distribution and let all the authorities know where they stand.
We have the needs of Bedfordshire very much in mind. It is true that, because of the varying extent to which authorities' staffing plans have been constrained by the present economic difficulties, that quota will be less effective this year in distributing teachers equitably than in a normal year. But the plans of local education authorities collectively make it likely that the teachers seeking employment in the autumn will be able to find posts. Despite the difficulties that we shall undoubtedly face in the next two or three years, the prospect of an early and continuing fall in pupil numbers gives promise of good progress towards the very much better standards in the schools which we all hope to see.
As regards Luton and the schools where there are difficulties, I assure my hon. Friend that we shall keep a watching brief. If he likes to make representations, I shall be only too ready to see whether there is anything that we can do to resolve what we regard as a serious situation, because we want to ensure that all our children have adequate schools and that they receive full-time education.
Question put and agreed to.
Adjourned accordingly at twenty-six minutes past Ten o'clock.

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Preamble
The House met at half past two of the clock: The LORD CHANCELLOR on the Woolsack.
Prayers—Read by the Lord Bishop of Portsmouth.

LORD BANKS
Desmond Anderson Harvie Banks, Esquire, C.B.E., having been created Baron Banks, of Kenton in Greater London for life—Was, in his robes, introduced between the Lord Wade and the Lord Lloyd of Kilgerran.

LORD BRIGINSHAW
Richard William Briginshaw, Esquire, having been created Baron Briginshaw, of Southwark in Greater London, for life —Was, in his robes, introduced between the Lord Jacques and the Lord Hamnett.
The Lord Trend—Took the Oath.
The Lord Wheatley—Took the Oath.

VEHICLE TAX: SIDE WINDOWS
2.58 p.m.
Lord ALLERTON: 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 Govfernment whether it is the case that a motor vehicle of the van or Land Rover type which has side windows behind the driver's seat attracts a special car tax and, if so, for what reasons.
Lord JACQUES: My Lords, a vehicle of this type is chargeable with car tax in the same way as an ordinary car would be. It is within the chargeable category because it has side windows, and the distinction between taxable and non-taxable vehicles is partly based on the presence or absence of side-windows to the rear of the driver's seat. This criterion is used in law in order to establish a borderline which is clear and unambiguous.
Lord ALLERTON: My Lords, while thanking the noble Lord for that reply, may I ask whether he has ever driven a vehicle of this type from a side road to a main road with the intention of turning to the right and, if so, whether he has been able to see traffic coming from his left? Furthermore, would it not be in the interests of road safety if that regulation was repealed?
Lord JACQUES: My Lords, the distinction between passenger vehicles and goods vehicles is based upon the established assumption that the driver of a goods vehicle depends on his mirrors but not on side windows to the rear of the driver's seat. Windows to the rear of the driver's seat are to provide light for the passengers.
The Earl of DUNDEE: My Lords, does not the Answer mean that in order to escape additional taxation, the owner of a van or a Land Rover is obliged to keep his vehicle in a much more dangerous condition than need be the case?
Lord JACQUES: My Lords, that danger is no greater than it is for the driver of any goods vehicle.
Lord LLOYD of KILGERRAN: My Lords, I apologise because I have given the noble Lord only short notice of my question, but may I ask whether his Answer is consistent with the EEC Regulations on transport?
Lord JACQUES: My Lords, I am not aware of any such Regulations. If the noble Lord will tell me what Regulations he has in mind I shall try to give him an answer.
Lord ALLERTON: My Lords, may I further ask the noble Lord whether it would not be preferable to incur loss through taxation rather than suffer a number of unnecessary accidents?
Lord JACQUES: My Lords, there is no evidence that this specific rule causes accidents.

OIL REFINERIES
Lord CAMPBELL of CROY: 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 still consider that the refining capacity within the United Kingdom represented by refineries in existence and others being constructed is enough for the needs of the United Kingdom for the foreseeable future.
The MINISTER of STATE, DEPART-MENT of ENERGY (Lord Balogh): My Lords, my right honourable friend the Secretary of State for Energy said in another place on 6th December 1974 that if projects now under consideration were to go ahead he expected United Kingdom refining capacity in the early 1980s to approach 150 million tons a year. He said this should be enough, overall, to meet our own needs and provide for some exports. There will, however, have to be some modification of refinery capacity to deal with the new qualities of the North Sea oil.
Lord CAMPBELL of CROY: My Lords, will the Government try to give wider circulation to this information, because there is considerable anxiety, especially in some areas of Scotland, that our need to extract offshore oil as soon as possible will lead to a rash of new refineries springing up, with attendant risks of air pollution and oil spills?
Lord BALOGH: My Lords, as the noble Lord may have noticed, we are to deal with refinery capacity, construction and control in the forthcoming Petroleum Bill. Until then there are very strict planning restrictions on the erection of refineries. The noble Lord may be assured that the Government have the problems of pollution and the needs of the country and employment thoroughly in mind.
The Earl of LAUDERDALE: My Lords, can the noble Lord assure the House that, through the good offices of his own relations with the Minister of State, the Scottish Office will issue a fresh statement, making it absolutely clear to the people of Scotland that there is no danger at this moment of a proliferation of refineries? Is the noble Lord aware that some of the documents which have been issued from the Scottish Office in the past two years have created more confusion rather than dispersed it?
Lord BALOGH: My Lords, as the noble Earl will know, there is the refinery project at Nigg Point. This is now subject to public inquiry, and all the considerations which the noble Lord, Lord Campbell of Croy, has mentioned, and with which I thoroughly agree, will be taken into account.
The Earl of LAUDERDALE: My Lords, will the noble Lord confirm that no refinery projects are going on in Scotland at the moment other than the one under public inquiry at Nigg?
Lord BALOGH: My Lords, I am sorry, but I must have notice of that further question.

HOUSE BUILDING
3.5 p.m.
Lord HYLTON: 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 what steps are being taken to increase the national output by all agencies of new and modernised houses, in view of the increasing shortage of work and unemployment in the building industry, the fall in land prices and the recent decreases in interest rates.
The PARLIAMENTARY UNDER-SECRETARY of STATE, DEPARTMENT of the ENVIRONMENT (Baroness Birk): My Lords, new housebuilding was declining very rapidly when the Government took office last March. Since then, we have taken a number of measures to secure a revival in provision by all agencies. The latest figures for new building by public authorities show a major increase, and my right honourable friend the Secretary of State for the Environment has recently announced a number of measures to promote private sector housebuilding. We are now taking steps, under the powers of the Housing Act 1974 to promote the rehabilitation of existing dwellings, especially in the worst areas of housing stress.
Lord HYLTON: My Lords, I am grateful to the noble Baroness for that Answer, but may I ask whether she is aware of the concern in the country at the rising tide of homelessness, both of families and

1211
of single people? Will she impress on her right honourable friend the Minister of Housing the urgency of pulling out all the stops so that we get more houses built quickly?
Baroness BIRK: Yes, my Lords, we are fully aware of this position. It is for that reason that my right honourable friend the Secretary of State made his announcement on 27th January regarding the stabilisation of mortgage rates, to try to help improve housebuilding in that way. This is why we have increased the expenditure on housing in the public sector, and my right honourable friend is at the moment considering the use of housing for shortterm tenancies for the homeless. I can assure the noble Lord that this and many other measures are under urgent consideration. The Government are in no doubt about the urgency of the situation.
Lord AVEBURY: My Lords, is the noble Baroness aware of the proposals made by Shelter and also by Mr. Bernard Gray and Mr. Christopher Booker, that a housing agency should be formed to take over short-life properties and let them on behalf of the local authorities? Is the noble Baroness aware that those proposals have been discussed by Shelter with Mr. Freeson, and that although the Government may not agree that they should be implemented precisely in the form suggested by Shelter there is something in the idea worth pursuing, in view of the fact that vast acres of empty property are to be found in all our major cities?
Baroness BIRK: My Lords, the Government are aware of this problem. As the noble Lord said, my right honourable friend has been in consultation with Shelter and other organisations and this matter is currently under urgent consideration.
Lord HAWKE: My Lords, will the Government do their best to get the price of money down, because therein lies the key to the take-off of the existing unsold stocks of houses?
Baroness BIRK: My Lords, that is a wide-ranging question and different from that on the Order Paper.
Lord POPPLEWELL: My Lords, is my noble friend able to give us a definite
1212
assurance that any of the housing agencies that are so employed on behalf of councils will ensure that there is good workmanship, and that no cheese-paring or reduction of costs will be allowed to lower the standards of these types of houses? Further, is my noble friend aware that this experiment has been tried from time to time, and that it has proved very costly later for local authorities to put these properties into a decent state of repair and habitation?
Baroness BIRK: Yes, my Lords, my noble friend is right to draw attention to this matter. The Government are aware of the necessity for such control and the housing programme is based on the need to maintain standards, to increase the production of houses and to do all they can to bring a sense of urgency into the whole situation.
Lord STRATHCLYDE: My Lords, would the noble Baroness say what is the present cost of the average council house?
Baroness BIRK: My Lords, I must have notice of that question. It depends, of course, on the local authority, where it is and a number of other factors which I do not have at my fingertips.
Lord SLATER: My Lords, may I ask my noble friend whether it would be wrong for Her Majesty's Government to take away the right to make contracts for building council houses, even for these poor people who are deprived of a home? If such contracts were not made by a local authority, might Her Majesty's Government step in and take away its rights and powers as a building authority?
Baroness BIRK: My Lords, later this afternoon we are having a discussion on the Bill which deals with this very point.

GREEK CYPRIOT REFUGEE PROBLEM
3.10 p.m.
Lord MERRIVALE: 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 have received representations from the "British Residents for

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Justice in Cyprus" concerning the Turkish Cypriot evacuation from Episkopi and the aggravated Greek Cypriot refugee problem due to increasing expulsion from Northern Cyprus; and, if so, what action they are taking

(a) for a Turkish army withdrawal from much of the citrus-growing land, and

(b) for a search to be made in the occupied areas for 3,000 missing Greek Cypriots.

The PARLIAMENTARY UNDER-SECRETARY of STATE, FOREIGN and COMMONWEALTH OFFICE (Lord Goronwy-Roberts): My Lords, Her Majesty's Government have received various representations from the "British Residents for Justice in Cyprus". We have consistently made clear to the Turkish Government that a magnanimous gesture would help to improve the atmosphere. They have so far announced the withdrawal of approximately 1,000 troops. The problem of Greek Cypriots missing behind Turkish lines has been discussed between Mr. Clerides and Mr. Denktash, but they have been unable, so far, to reach a conclusion.
Lord MERRIVALE: My Lords, I should like to thank the noble Lord for his Answer, but would he not agree that the withdrawal of a thousand troops out of approximately 40,000 is negligible and that, in terms of international justice, it is totally wrong and even unlawful for Turkey, backed by its army on the spot, to export from the occupied areas the citrus produce of Greek Cypriot growers and for this to be accepted by the importers of this country? Furthermore, would he not agree that a withdrawal of the troops would greatly facilitate a return to a just solution of the matter; and could not the Government bring greater pressure to bear on the Turkish Government?
Lord GORONWY-ROBERTS: My Lords, on the first and last points, which are related, I agree that the withdrawal of a thousand troops from about 35,000 is not a very large gesture. However, it is a start in the right direction, and we continue to press for an acceleration of withdrawal. On the second point, relating to exports, I should not wish to comment at this short notice. It is an important matter and no doubt will form
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part of the discussions when they come to the point in some forum or other in, let us hope, the near future.
Earl COWLEY: My Lords, while fully supporting the Government's desire for a peaceful settlement in Cyprus, could the noble Lord comment on the report that Turkish troops are to be offered Cypriot citizenship? Does he really think that this is conducive to a peaceful settlement?
Lord GORONWY-ROBERTS: My Lords, I could not comment on that report, as I have not seen it; therefore I could not say whether it would conduce to any kind of development in the future.
Lord MERRIVALE: My Lords, has the Minister any information concerning the new proposals for a solution of the Cyprus problem which were, I understand, submitted yesterday to Mr. Denktash by Mr. Clerides? In particular, has he information regarding the reaction of Mr. Denktash on the question of the resettlement of approximately 150,000 Greek Cypriot refugees who had to flee from their homes in the North during the fighting?
Lord GORONWY-ROBERTS: My Lords, the talks to which the noble Lord refers began on 14th January, and noble Lords will recall that I expressed cautious optimism about this new series of talks. I am glad to see that they are proceeding. There were in fact talks yesterday, of which reports have not yet reached me. I entirely agree with what the noble Lord has said about the way in which the talks should proceed and, so far, everything said in this House and another place has been helpful to the continuation in series of the talks of 14th January. The parties are now talking about the political problems which, after all, may be the key to a more general solution.
Lord BLYTON: My Lords, does the Minister not consider that these vexatious and partisan questions about Cyprus will not lead to any peace at all? Would it not be better that we should adopt a neutral position and try to help to achieve a settlement?
Lord GORONWY-ROBERTS: My Lords, as I said on the last occasion on which I addressed myself to this question in your Lordships' House, we stand ready to be of every possible assistance in this

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difficult and dangerous situation. We would help in any forum. There may come a time when a new intervention by this country through some agency or other will prove helpful. We must stand ready to help at all times.
Lord GLADWYN: My Lords, could the noble Lord say whether the Cyprus situation is in any way connected with the dispute between Greece and Turkey over oil in the Aegean Sea?
Lord GORONWY-ROBERTS: My Lords, I could not attempt an exegesis of the whole complex of misunderstanding and difficulty between the two countries. The Cyprus difficulty is enough for the moment. There is of course an argument between these two neighbouring countries as to the situation in the Aegean, linked to oil. One would hope that a settlement of the Cyprus question might lead to or help a settlement of other outstanding difficulties between the two countries.
Lord DRUMALBYN: My Lords, do the Government accept that their involvement in the original constitutional settlement means that they have a special responsibility to ensure that that settlement is restored and made to work?
Lord GORONWY-ROBERTS: Yes, my Lords, I think so, except that we must not in any way impose upon the two communities concerned a solution of our devising and making. It would not suceed, anyway. As I have said, we stand ready to intervene if it is seen to be in the interests of an equitable and durable solution. We should not wish to intervene if, in so doing, we were taken to be trying to impose a solution on two communities which are beginning to talk. I speak again with cautious optimism.
The LORD PRIVY SEAL (Lord Shepherd): My Lords, I suggest that the last two questions were rather wide of the mark on a Question on refugees. I think that, in the circumstances, we ought to now to move to the next business.

NORTHERN IRELAND
3.17 p.m.
Baroness LLEWELYN-DAVIES of HASTOE: My Lords, with the leave of the House my noble friend Lord Donaldson of Kingsbridge will repeat a statement on Northern Ireland at a convenient moment after 3.30.

GENERAL RATE BILL
Report received.

INTERNATIONAL OIL POLLUTION COMPENSATION FUND (IMMUNITIES AND PRIVILEGES) ORDER 1974 EUROPEAN CENTRE FOR MEDIUMRANGE WEATHER FORECASTS (IMMUNITIES AND PRIVILEGES) ORDER 1974 INTERNATIONAL COCOA ORGANISATION (IMMUNITIES AND PRIVILEGES) ORDER 1975
3.19 p.m.
Lord GORONWY-ROBERTS: My Lords, these Draft Orders will be made under the International Organisations Act 1968. The Draft Order relating to the Weather Centre is similar to that made in 1972 for the International Tin Council and to Orders for the other international commodity organisations in London. There are some differences between these Orders, which I shall mention in a moment. In addition to the United Kingdom, 15 European countries have signed the Convention establishing the Weather Centre and four have ratified it. It will come into force when two-thirds of the signatories, including the United Kingdom, representing 80 per cent. of the financial contributions, have ratified it. The Order is necessary so that we can ratify the Convention and hasten its entry into force.
My Lords, the Weather Centre is now establishing its headquarters in the United Kingdom. Our offer to act as host State was accepted after long and difficult negotiations in which we competed with several other countries. We are making a site available at Shinfield Park, near Reading and will construct a suitable

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building free of charge. The running costs will be met from the budget of the organisation to which we at present contribute about 16 per cent. The Centre's main purpose will be to improve mediumrange weather forecasts for Europe. It will also carry out research into forecasting techniques and provide advanced training for the staff of the meteorological services of member States. It is expected that there will be considerable economic and financial benefits for those industries such as agriculture, construction and shipping, which are dependent on the weather.
I referred earlier to certain features of this Order which are different from earlier Orders. First, in order to assert its immunity from jurisdiction, the Centre will have to give notice within 15 days after receiving requests for waiver of immunity that it will not do so, otherwise its immunity lapses. Second, the Order will permit attachment of earnings orders to be made against the Centre in respect of any of its officers and this will enable a judgment debt to be enforced by attaching earnings of an officer of the Centre, and is therefore a further important limitation upon immunity. Third, the representatives of member States—that is, the senior delegates of each member State —will not be immune from jurisdiction for traffic offences. Previous Orders granted immunity to such representatives, although officers and experts attached to organisations were liable in respect of traffic offences. No person in this Centre will have immunity for traffic offences.
Fourth, no personnel of the Centre will have privileges and immunities of the kind enjoyed by diplomats. By this I mean privileges and immunities in their personal, as opposed to their official, capacity. The Centre is a technical body and the need has not been shown for such immunities or privileges to be granted to any of its personnel. They will in fact have only such privileges and immunities as will enable them to come freely to this country, bring their possessions with them and exercise their functions without restraint.
The second Order is for the International Oil Pollution Compensation Fund which was set up by an International Convention signed by the United Kingdom on 18th December 1971. Before we can ratify the Convention an Older is necessary to confer on the Fund the
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legal capacities of a body corporate, and such limited fiscal provisions as are required by the Convention. Parliament has taken the necessary powers in the Merchant Shipping Act 1974 to implement the other provisions of the Convention. The present Order is based on precedents, such as the Order of 1972, to recall a recent one, regarding INTELSAT.
The need for a fund to give compensation to States and persons suffering from oil pollution was shown by the "Torrey Canyon" incident in 1967 which led to the adoption in 1969 of an International Convention on Civil Liability for Oil Pollution Damage. The 1969 Convention was supplemented in 1971 by the Convention establishing the International Oil Pollution Compensation Fund from which this Order emanates. The Fund will be financed by levies imposed on a proportionate basis on persons or bodies in the contracting States who receive a minimum of 150,000 tons or more per annum of crude oil or fuel oil by sea. Compensation for oil pollution damage will be paid by the Fund to claimants in cases where, either the shipowner was not liable, or the liability was not met, or the damage exceeds the shipowner's liability under the previous arrangement; that is to say, under the 1969 Liability Convention. The Liability Convention and now the Fund Convention together have been welcomed by other Governments. Many other States have signed the Conventions and we hope it will not be long before both of them are together in force.
The location of the Fund's headquarters will be decided at the first meeting of the Assembly of the Fund. We hope that this, too, will be located in London. The Draft Order does not give the Fund immunity from jurisdiction, but it provides only that its premises, the goods which it imports, and the goods and services it buys in this country in order to fulfil its functions, shall be free of United Kingdom taxation. This follows the long-established principle, internationally agreed, and to which we have always subscribed, that a State should not derive undue fiscal benefits from the funds of an international organisation just because it is the host to that organisation.
Finally, the International Cocoa Organisation Order would replace the

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two previous Orders of 1973 in respect of the International Cocoa Organisation which has now been established in London for more than a year. Those Orders gave the organisation legal personality and gave certain tax exemptions to it, and to its employees, as required by the International Cocoa Agreement of 1972—that is, the Agreement to which we and other countries were signatories—and these exemptions flowed from the basic Agreement to which we were subscribers. A Headquarters Agreement has now been negotiated between the United Kingdom and the Organisation similar to that concluded in 1968 with the International Coffee Organisation, also located in London. The two organisations have similar internal structures and regulations, and it is therefore appropriate that they and the persons connected with them should be treated in the same way. The scales of privileges and immunities laid down in the respective Headquarters Agreements provide for this. The present Order—that is, the one relating to the International Cocoa Organisation—is necessary to enable us to give effect to the Headquarters Agreement.
I hope that the House will approve these Orders and thus demonstrate this country's support for the very useful work to be done by these three organisations, two of which are already located in this country, and, in regard to the third of which we have strong hopes that it, too, may be located here. I beg to move.
Moved, That the Draft International Oil Pollution Compensation Fund (Immunities and Privileges) Order 1974, laid before the House on 5th December 1974, be approved.
That the Draft European Centre for Medium-range Weather Forecasts (Immunities and Privileges) Order 1974, laid before the House on 5th December 1974, be approved.
That the Draft International Cocoa Organisation (Immunities and Privileges) Order 1975, laid before the House on 31st January, be approved.—(Lord Goronwy-Roberts.)
3.28 p.m.
Earl COWLEY: My Lords, I should like to thank the noble Lord for giving the House such a detailed explanation of
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what these three Orders contain. We on this side of the House have no objection to the Orders being taken together, or to the Orders themselves. We are glad to hear that traffic offences are not included in the immunities and privileges granted to the officers of the various organisations. However, I have a few questions to ask of the noble Lord in relation to these Orders. For instance, how many countries have actually ratified the International Convention on the Establishment of an International Fund for Compensation for Oil Pollution Damage? I gather that very few countries have, in fact, ratified the Convention. Further, by how much has the number of 2,114 officials and their families—who cover embassies and international organisations which have diplomatic immunity—increased? This figure was given by the noble Lord himself in this House on 28th June. Could he tell the House by how much this figure has increased, not only through these Orders but actually since that date?
On a more detailed point which is general to all three Orders—but I would refer only to the International Oil Pollution Compensation Fund Order—in Article 5 the Order exempts the organisation,
"from taxes, other than customs duties and taxes on the importation of goods,"
and yet in Article 8 the Fund is exempt from all
"customs duty paid on any hydrocarbon oil …".
Can the noble Lord tell the House why only hydrocarbon oil and not any goods which they may purchase and which have been imported from abroad? Otherwise we welcome the Orders.
Lord GORONWY-ROBERTS: My Lords, I am grateful to the noble Lord for welcoming the fact that we are breaking new ground by not repeating, in the case of the European Weather Centre, the traffic immunities which have been the subject of such criticism in this House and in another place and as to which on more than one occasion I have said that I will take careful note of what noble Lords have said. We have taken very careful note. We hope in the future to negotiate similar agreements based on these Conventions. We cannot, of course, recall those which we have agreed to in

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the past. It would certainly be difficult retrospectively, with the number of countries involved, to retrace those Agreements, but this is the beginning of a new era in privileges and immunities for international organisations.
On the noble Earl's second point regarding the increase in numbers, on the last occasion on which I took Orders of this kind through the House I gave the figures for the total number of diplomatic and other levels of staff. I will not repeat those. If I may, in response perhaps to a Question for Written Answer, I should like to set out the extra numbers involved in the various categories concerning the various kinds of immunities and privileges. I have them here, but I think it would be of interest to everybody if they were set out in tabular form.
Regarding the third point, the difference in one of the Orders between Article 5 and Article 8, I think this is an inherent difference. I think the question of hydrocarbon oil is separate from that covered in Article 5, but I will study it in the light of what the noble Earl has said.
Earl COWLEY: Article 5 is a general point. Article 8 is specific, but it could be included in Article 5.
Lord GORONWY-ROBERTS: My Lords, I do not think they contradict or deny each other. Article 5 is a generalised clause covering goods and services generally. Article 8 is, I believe, related specifically to hydrocarbon oils. I should like to see whether there is something in what the noble Earl says.
Lord HAWKE: My Lords, could the noble Lord clear up one point? It does not seem to be quite clear from the exchanges between the two Front Benches whether it is only the weather men who have this traffic immunity or whether it is all three organisations.
Lord GORONWY-ROBERTS: My Lords, the "weather men", as the noble Lord puts it, come in for these very limited and indeed, reduced immunities and privileges under this Order relating to the European Weather Forecasts Centre. In regard to the International Cocoa Organisation, they are here already and they will also be granted limited privileges and immunities flowing from the Agreements we have signed. In
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regard to the Fund relating to oil pollution, this Order does not provide for personal immunities and privileges because that is not its objective. There may well be a need for an Order to be placed before both Houses in this way relating to any immunities and privileges which may be seen to be necessary in regard to the organisation set up to deal with oil pollution payments.
Lord DRUMALBYN: My Lords, I may have missed the answer to one of the questions which my noble friend asked. Can the noble Lord give us the number of countries which have signed the Oil Pollution Compensation Convention?
Lord GORONWY-ROBERTS: My Lords, not at the moment. I think I have the information here—I was trying to chase it. I will make it available to the noble Lord and indeed to the whole House in the appropriate way.
Lord SHINWELL: My Lords, may I ask my noble friend whether there is any special reason why the weathermen are coming to this country? Is it because of our remarkable weather, or is there any other advantage? By the way, what is it going to cost us?
Lord GORONWY-ROBERTS: My Lords, there is always a considerable continuing advantage to a host country which is successful in attracting an international organisation of this kind. As I said, there was acute competition among a number of countries for this particular organisation. It will be a recognition of the substantial tradition of scholarship and research in this matter which this country possesses. The Centre is to be located very close to the University of Reading, which has a very good tradition of field and hydrological study, and close to the whole complex of London specialised centres. Host countries, of course, compete for such organisations by offering locations. We have offered land which is held by the Crown and which is in fact part of our own "Met" Office land. In a sense, it does not cost us anything; it will be available for building a proper Centre for this European Weather Centre.
Negotiations on the size of the building are proceeding now, but whatever the cost there will be continuing economic advantage to us. After all there will be

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something like 125 staff from various countries who will be paid from a common pool only 16 per cent. of which will be provided by this country, and 84 per cent. of which will therefore be made available in other currency. To that extent it will be an invisible earner. They will, of course, be qualified men and woment and will be fairly well paid. They will need to eat and drink and presumably to be merry, especially when they consider the vicissitudes of the English weather.
Lord SHINWELL: My Lords, I understand from my noble friend that these 125 staff will be well paid, yet they will use their financial advantages to go abroad for their holidays where they will get better weather.
Lord GORONWY-ROBERTS: My Lords that is always possible, but the loss in that direction is a fraction of the loss from the fact that so many British people go abroad for their holidays.
Lord GORE-BOOTH: My Lords, may I express appreciation of the Minister's last answer. I have worked and suffered through a period in which we in this country seem to make a fetish of not welcoming international organisations and I think the present Government on the contrary are to be congratulated on advertising our suitability as a home for them. In saying this, I have to express our regret that the behaviour of many of my former colleagues, not from this country, has necessitated the withdrawal of the traffic immunities.
Lord GORONWY-ROBERTS: My Lords, I very much welcome the informed remarks of my noble friend Lord GoreBooth. I would in fairness say that the coming of this particular Centre to this country is very largely due to the personal efforts of Mr. Edward Heath, who was formerly Prime Minister, who was very keen indeed that this Organisation should come here and who succeeded in persuading other countries to agree to that course.
On Question, Motions agreed to.

NORTHERN IRELAND: CEASEFIRE
3.40 p.m.
The PARLIAMENTARY UNDER-SECRETARY of STATE, NORTHERN IRELAND OFFICE (Lord DONALDSON of KINGS BRIDGE) :My Lords, with the permission of the House, I should like to repeat a Statement which my right honourable friend, the Secretary of State for Northern Ireland, made in another place this afternoon. I am afraid that it is rather a long Statement but the situation, as the House knows, is a grave one. The Statement is as follows:
"With permission, Mr. Speaker, I should like to make a Statement.
"On 14th January, I outlined to the House the Government's policy towards Northern Ireland. I said that the Government were seeking a lasting peace and that a genuine and sustained cessation of violence would create a new situation. If that took place, there would be a progressive reduction in the present commitment of the Army, both in numbers and in the scale of activity, leading to a reduction to peace time levels and withdrawal to barracks. I also said that, once I was satisfied that violence had come to a permanent end, I should be prepared to speed up the rate of releases with a view to releasing all detainees. I made it clear that Ministers and officials were ready to explain this policy and hear the views of those in Northern Ireland who had something to contribute.
"I re-emphasised this policy in my statement on 5th February and told the House that my officials had had a number of meetings with various organisations including Provisional Sinn Fein. At those meetings officials had been under instructions to expound the Government's policy and to outline and discuss the arrangements that might be made to ensure that any ceasefire did not break down.
"There have been further meetings with Provisional Sinn Fein and the Provisionals have declared a further ceasefire to run from six p.m. on Monday, 10th February, 1975.
"The House will wish to have more details of the discussions. On 16th January, the Provisional IRA did not

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prolong their temporary suspension of offensive military action and made a good deal of alleged incidents which, whatever the true facts, they claimed should not have happened.
"Subsequently, my officials put to Provisional Sinn Fein a scheme designed to make effective arrangements for ensuring that any future ceasefire did not break down. This has five main elements.
"First, a number of incident centres, manned by civil servants on a 24-hour basis, will be established in various parts of Northern Ireland. These centres will be linked with my office in Belfast. Second, if developments occur which seem to threaten the ceasefire, these incident centres will act as a point of contact in either direction. Third, issues can be referred to my office in Belfast and clarified there. Fourth, cases referred up to the Northern Ireland Office will be considered, and a reply passed back to the incident centre for onward transmission. Fifth, if out of these exchanges general difficulties about the ceasefire arrangements emerge, then discussions will be arranged between my officials and representatives of legal organisations to clarify them. There will be full consultation by officials with the Security Forces on these arrangements which will cover only incidents arising directly out of the ceasefire.
"This is what the discussions have been about, and these arrangements will be brought into effect during the next few days.
"These practical arrangements can only be the first steps towards a permanent peace. There are many problems yet to overcome in a situation which is far from clear. There is no quick and easy solution and winding down from violence will not happen overnight. It is relatively easy to identify these problems.
"In some cases a continued cessation of violence will, as as I have indicated before, bring its own results. The presence of the Army will become progressively less obtrusive. Screening, photographing and identity checks can be brought to an end. It will be easier to move about. I shall not sign Interim Custody Order.
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"The position of the Security Forces remains as I have previously stated it; namely, that actions are related to the level of any activity which occurs. If this diminishes, then so too will the actions of the Security Forces. But I must make it clear that anyone involved in acts of violence will be prosecuted in the courts.
"I have made clear the basis of Government policy; namely, that we are seeking a genuine and sustained cessation of violence. This is not just a question of time but, if people go on below the surface acquiring explosives and arms and preparing for violence at some later date, then no one will expect me to regard the cessation of violence as genuine. It means an end to bombings, murders and knee-cappings, to kangaroo courts, to armed robberies and hijackings; to the horrors of which even the last few days have given us fresh examples.
"Sectarian murders and protection rackets must be ended, and the House will be aware that this affects the whole community.
"The community itself must contribute positively to peace. This is not just a matter for the police; it is something in which the whole community must be involved. Policing and community peace-keeping is in everyone's interest.
"There are other very difficult problems which I should put to the House because they will have to be tackled. How is permanent peace to be secured? How is respect for the law to be restored? What is to happen to the Emergency Provisions Act and to proscribed organisations? How is the threat of murder and assassination to be brought to an end and people protected? How are the communities to live in peace together? How are jobs to be found so that people can live with their families at home and enjoy a life without fear? These are not questions to which I have ready answers, but they all require examination, thought and action. The Government will do all they can to help solve them, but it would be an allusion even to think they will disappear overnight. Patience, understanding and good will are needed, and a heavy responsibility

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here rests on the politicians, and would-be politicians, in Northern Ireland to seek out constructive solutions to deal with real problems that have persisted for more than 50 years. I hope now that a process of discussion and debate can replace violence.
"My task now is to seek a permanent end to violence, which is the first requirement of any process of discussion in Northern Ireland. This was why I felt it right to take some first steps of a practical kind once I received indications that the Provisionals contemplated reinstating their ceasefire and that they accepted that practical arrangements were needed to ensure that it did not break down. That is what the talks have been about. There has been no question of bartering away the future of the people of Northern Ireland.
"As I have said, the situation is far from clear-cut. There is no readymade or well-defined path ahead. I want to find a way forward, but there are many obstacles and many difficulties. It would be idle to pretend they do not exist. The fact that there is a ceasefire and practical arrangements for monitoring it are the first tentative and welcome steps which I have reported to the House today. With your permission, Mr. Speaker, I shall continue to report any further developments to the House."
My Lords, that is the end of the Statement.
3.49 p.m.
Lord BELSTEAD: My Lords, the House will welcome the Statement repeated by the noble Lord which records the ceasefire which became operative as from yesterday. I think that noble Lords will agree with me that, obviously, to judge from the Statement, the situation is at a very delicate stage. It is clear that on it hangs probably the opportunity at last for peace, and on it may hang the chances for the success of the Convention to which obliquely, towards the end, the Statement refers. I therefore do not intend to ask the noble Lord any questions from my place in the House this afternoon.
However, may I just make one comment. As I understand the Statement, it does not negotiate; and it seems to me,
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listening to the noble Lord, that it clearly says that a cessation of violence will bring from the Government a reduction in security activities although acts of violence will continue to be brought before the courts. If I interpret it aright, that has been Government policy for three years now; that is the policy we have been supporting from these Benches and we believe that that is the policy which is right. The Statement ends by asking a series of questions. I do not know whether the House will agree with me, but it strikes me that the time has come when, through the usual channels, a debate on Northern Ireland might be arranged. If the Government feel that these questions should be asked, and if the Government will allow us to probe their views on the Report of the noble and learned Lord, Lord Gardiner—which has come out only recently—and to clarify one or two more oblique references contained in this Statement, I think it would be of help in the near future.
Lord BEAUMONT of WHITLEY: My Lords, I should like to thank the noble Lord, Lord Donaldson of Kingsbridge, for repeating the Statement, and to join noble Lords on these Benches with the sentiments which have already been expressed by saying how grateful we are for what has been said and what has been done. Congratulations are also due to all concerned, particularly the Secretary of State who is doing a very good job under very great difficulty, and, it seems to me, under a certain amount of undeserved criticism. This, as I think members of both recent Governments and all Parties would agree, is not a moment for discussing political initiatives in Ulster. It is rather too late for that. It is a moment in which we should try to ease the people of Northern Ireland out of their problems by a series of pragmatic agreements, which are not susceptible to theological or political prose. I therefore join with the noble Lord, Lord Belstead, in saying that I do not think this is the right moment to ask the noble Lord, Lord Donaldson of Kingsbridge, any questions and I shall not be asking them from this Bench today.
I am not certain that I can join the noble Lord, Lord Belstead, in stating that this is an apposite moment for a debate on Northern Ireland. It might well be that we should give a considerable time

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after this initiative before we seek to air these matters publicly, and go into the questions which the Secretary of State has asked. We welcome the steps which have been taken and we will watch progress with sympathy, concern and hope.
Lord DONALDSON of KINGSBRIDGE: My Lords, may I reply first to the two noble Lords who have spoken? I am most grateful for their welcome to the Statement and for their abstinence from raising awkward questions. This is a very delicate moment and, while we respect very much the right of the Opposition in all its aspects to probe, we very much appreciate the fact that noble Lords opposite do not think that this is the right moment to do so.
I should like to make two comments on what the noble Lord, Lord Belstead, said. I think the success of the present ceasefire is highly relevant to the success of the Constitutional Convention. I believe that everyone concerned with Northern Ireland feels that the only chance of the Convention producing something really constructive is if there is a reasonable absence of violence while it is going on. So this is a very important item, I entirely agree. I should like to confirm what the noble Lord asked me to confirm, that there have been no negotiations. There has been, as he said, a clear statement, "If you stop hitting me, I shall stop defending myself in the way I have been doing." That is not an agreement or a negotiation. One thing can follow only if the other happens first.
As regards a debate, clearly the time must come when we discuss this matter. We have the Report by my noble and learned friend Lord Gardiner which will need discussing, and we have all sorts of things going on, so I would be loath to try to find the right moment today. But I have absolute faith in the regular channels which never let one down in this sort of matter. I am very grateful for what has been said.
Lord BROCKWAY: My Lords, is the Minister aware how deeply grateful all of us are that there appears to be a cessation of violence in Northern Ireland? Is he also aware that although many questions arise we refrain from putting them, because we do not want one word to be
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said in this situation which could make the situation more difficult?
Lord DONALDSON of KINGSBRIDGE: My Lords, I am most grateful to my noble friend Lord Brockway.
Lord O'NEILL of the MAINE: My Lords, I should like to welcome the Statement which has been made, and like every other noble Lord who has spoken I hope the truce will continue. One was very depressed when the truce came to an end early this year, and this is a moment for great congratulation on all sides now that it has been possible to resume it. Like the noble Lord, Lord Belstead, and successive speakers, I do not propose to ask any questions. I feel that so long as there is a chance of this truce continuing we should try to avoid a public debate, certainly until after the Easter Recess. We can reassess the situation then.
It is very hard for noble Lords who do not come from Northern Ireland to understand the political situation there. But leaders who are not moderates have a vested interest in the continuation of violence, because if peace breaks out those leaders have no raison d'être, which is one of the reasons why it is so hard to bring about peace in Northern Ireland. Those violent leaders have already told us that they are going to "Bust up the Constitutional Convention when it takes place". It will be very much harder for them to do that if there is a background of peace at the time when the elections for the Constitutional Convention take place.
I think it an excellent idea to have incident centres scattered around the Province. I described it on the BBC last night as a "hot line", and asked why, if it was necessary to have a "hot line" between America and Russia in order to maintain peace, there should not be a "hot line" between senior British civil servants in Stormont and the Provisional Sinn Fein in order to try to maintain peace in Northern Ireland. I welcome these ideas and I hope that they will succeed. Further than that I say nothing, except to wish the Secretary of State and Ministers the very best of luck, and let us all hope and pray that this second—I

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should really say third—truce will continue.
Lord DONALDSON of KINGSBRIDGE: My Lords, I am most grateful to the noble Lord for his reception of the Statement.

HOUSING RENTS AND SUBSIDIES BILL
3.58 p.m.
Baroness BIRK: My Lords, I beg to move that the House do now resolve itself into Committee on this Bill.
Moved, that the House do now resolve itself into Committee.—(Baroness Birk.)
On Question, Motion agreed to.
House in Committee accordingly.
[The Earl of LISTOWEL in the Chair.]
Clause 1 [Rents for public sector dwellings] :
Baroness YOUNG Baroness YOUNG moved Amendment No. 1:
Page 1, line 19, leave out "from time to time" and insert "at least every three years"
The noble Baroness said: I have put down three Amendments to Clause 1, which effectively repeals the 1972 Housing Finance Act and puts in its place new proposals on reasonable rents which this Bill enunciates. The three Amendments, to which I shall be speaking separately, in no way go against the principle of the Bill but I hope that they may at least be improvements to Clause 1.
Clause 1 states simply in subsection (2)(1A):
"A local authority shall from time to time review rents and make such changes, either of rents generally or of particular rents, as circumstances may require."
My Amendment asks that instead of "from time to time" a local authority shall review its policy at least every three years. This would bring the review into line with the triennial review of fair rents proposed in the 1972 Housing Finance Act. It even has a quite modern look in that it is a kind of phasing, or perhaps one should say indexing, of rents. It meets a very practical difficulty which councils face. Anyone who has been in
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local government knows that it is very difficult to decide at which moment to put up council rents. This time inevitably comes, and whenever it comes it is always a difficult experience for whatever Party happens to be in control of the local authority at that time.
There is always a conflict between what the Housing Committee wants to do and what the Finance Comittee wants to do; and the latter of course is responsible for looking at the level of the general rate. The money for the housing revenue account must be raised either by the tenants, through rents, or by the ratepayers, through rates. By applying this time limit, the council would get over the difficulty of suddenly having to review rents, but as part of the procedure it would review them at least every three years.
Without such a regular review, in these highly inflationary times the housing revenue account would go into deficit very quickly indeed. If, for example, we consider the rate of inflation with regard to repairs and maintenance—and as I understand it there is, under the Bill, no longer to be a separate account for maintenance and repairs as there used to be before the 1972 Act—councils will find that they need to look at their rents quite regularly. So it will not be suggesting to them anything other than the kind of thing they will almost certainly have to do, because they will not get the extra income that is needed except by increased rents or rates.
Apart from all this, it seems to me that a review would be very helpful, especially in the housing action areas which were provided for by the Housing Act last year. It is hoped that there will be a real improvement of property in these areas, and this presumably means a fairly regular review of rents to meet the vastly improved standard of accommodation which will be applied. I do not know whether this matter was ever discussed with local authorities and whether they are quite happy to leave Clause 1 as it stands, but I should think they might be very glad to have this statutory review. As I say, I do not believe it goes against the principle of the Bill. I think it would be helpful to local government and I therefore hope that the Government will feel able to consider it. I beg to move.
Lord MELCHETT: The effect of this Amendment would be to require local authorities to review their rents at least every three years rather than from time to time. The purpose of the Amendment may either be to require that rents are reviewed at regular intervals to ensure periodic consideration of their reason-ableness or it may be designed as a measure to provide some stability at a time of rapidly rising prices, on the lines of the three-year review of fair rents in the Housing Finance Act. I rather gathered that it was intended to serve both purposes, from what the noble Baroness said.
Whatever may be the purpose of the Opposition, to require local authorities to review rents at rigid, set intervals would be contrary to the policy of returning the whole responsibility for rent fixing to them. Under the provisions of Clause 1, local authorities will have to review rents as occasion arises. This gives them a considerable measure of flexibility but at the same time it ensures that rents are kept in line with changing circumstances.
In practice, a review may well be necessary once a year, at least, when authorities prepare their annual estimates; but it is quite unnecessary to make this a mandatory duty. Some authorities prefer to make rent increases once in two or three years only. Moreover, the provision in this clause is almost identical to that in Section 113(4) of the Housing Act 1957 which was repealed by the Housing Finance Act, because of the latter's provision of a three-yearly review. The 1957 provision had previously worked satisfactorily and had attracted a certain amount of case law. There is no good reason to alter this provision, which was part of the 1957 provision which this Bill is restoring.
The Earl of KTNNOULL: Before my noble friend replies, may I ask the noble Lord whether he thinks it is really fair that local authority tenants should face the uncertainty of a rent increase every year whereas private tenants know full well that they will not have a rent increase for three years? It seems very unsatisfactory when tenants of local authorities at the present time do not know what "a reasonable rent" will mean, as compared with what was "a
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fair rent". I hope that when the noble Lord replies later on for the Government he will be able to explain what effect "a reasonable rent" will have on existing rents of local authorities.
Lord MELCHETT: May I just say that I hope I did not imply that there would have to be a rent review every year. I said merely that this would be a matter for local authorities and that it would be for them to decide.
The Earl of KINNOULL: With respect to the noble Lord, he has not replied to the question I put to him, which was: do the Government think it is fair for local authority tenants to be faced with a possible annual rent increase, when tenants in the private sector are protected for a three-year period? In times of inflation this is very important for local authority tenants.
Lord MELCHETT: I am not entirely clear whether the noble Earl is saying that what we are doing is unfair to local authority tenants or unfair to tenants in the private sector. We are not saying there will be any regular review of local authority rents, but, as the noble Earl has said, in times of inflation it will no doubt be necessary for local authorities to review their rents regularly, which quite possibly would mean once a year. This is a matter for them to decide. There may be authorities which do not want to review their rents at one-yearly intervals, but this is a matter the Government will leave for local authorities to decide for themselves.
The Earl of KINNOULL: I am sorry the noble Lord still does not understand my point: it is very simple. The private tenant knows where he stands for three years as regards his rent. His rent is a very important factor of his income. The point I am putting to the Government is this: is it fair for local authority tenants not to know whether their rents are going up every year, or will be considered every year, when a tenant in the private sector knows full well that it will be three years before his rent is reviewed?
Lord MELCHETT: Even if there is a review every year, there is no guarantee that rents will go up. I do not see what certainty that is going to bring into the life of a council tenant.
The Earl of KINNOULL: I must pursue this just a little further, if I may. With inflation running as it is, it is not beyond the bounds of expectation that the rents will go up. In such times, should not the Government consider the possibility that in the case of local authority tenants there should be a three-year mandatory freeze, so to speak, before the next rent review is considered? This is very important when one looks at Clause 2 of the Bill, because there one finds that the Government are taking full powers over rent authorities as to what rent they should charge.
Lord MELCHETT: I think the noble Earl is now raising an entirely new point. He is suggesting that there should be a three-year rent freeze for local authority tenants and that the rents should be reviewed only every three years. That is quite unacceptable to the Government. The Government are saying that the powers to review rents must be left to local authorities. It is quite an extraordinary suggestion, if I may say so to the noble Earl, and it might well be grossly unfair to ratepayers if rents were not increased for three years in some local authority areas. This must be a matter for decision by the local authorities.
Baroness ELLIOT of HARWOOD: Speaking as a chairman of a housing committee of a local authority and as one who has spent many years in local government, I would only say that one of the most difficult things in the world is to put up rents. It is extremely unpopular because nobody wants to pay more if he can help it. If, as in some cases, people in urban areas, say on a new housing estate or where there are a great many council houses, are elected, they are very reluctant to put up the rents, because the people who elected them will naturally take a dim view of what they are suggesting.
If a councillor is on the housing committee, for instance, it will jeopardise his interests with the local electors. It is extremely difficult to do—I have tried it and I know how difficult it is. It is still very difficult, even when there is heavy inflation and the housing revenue account is in deficit. It would be much better if the tenants knew that every three years their rents would be reviewed. They need
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not necessarily be put up. They could possibly remain the same. But it would mean that no one was put in a difficult situation as a member of the housing committee, elected largely, if it is an urban area, by the people living in council houses; and we should not get the situation which has arisen in many areas where for years and years the rents have not been put up. Sometimes in the past Governments have had to take over and insist that rents were put up.
This is something which does not apply to members of any particular political Party; it applies to all political Parties. Whether it is a Labour, Conservative or Liberal area it is still extremely difficult to deal with this matter. I much prefer the proposal made by my noble friend Lady Young, that every three years there shall be a review and, if necessary, the rents will be put up. People then know where they are. It is not a matter of a councillor either dodging the difficulty, which is great, or having to introduce an increase and then feeling (because of course nobody likes putting up rents) very —I was about to say, "embarrassed"— reluctant. It would be much better if it was simply stated in the Bill that at least every three years council tenants will have their rents reviewed. I repeat that that does not mean that they will necessarily be put up; they may even be put down —who knows? In any event, they would be reviewed. I wholeheartedly support this Amendment.
Baroness YOUNG: We have had an interesting discussion on this point. I can understand the view of the noble Lord, Lord Melchett, in wanting to give complete freedom to local authorities under the Bill. Of course, in fact he will not give complete freedom to local authorities under the Bill as one can see by simply turning to Clause 2 and indeed to other parts of the Bill which will severely restrict the room for manoeuvre that local authorities have. It is most unfortunate that once again there will be this great division between council tenants and the rest of the community. That will be the effect. This Amendment is on a relatively narrow point regarding review of rents, but under the Bill as a whole council tenants will revert to being a quite separate group of people in the community. They have a right to know

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how often their rent is likely to be reviewed, and I ask the Government to look at this point.
I do not know whether the noble Lord, Lord Melchett, or his colleagues have ever had to attend a meeting of tenants to explain to them that one is about to put up their rents. I can assure him that it is not an easy undertaking. Although the case may be absolutely cast iron, the person taking the chair and making the points at such a meeting will not get anything but a very stormy reception. The Bill will simply encourage the continuation of this position. We all know perfectly well that at intervals, unless the economy of the country changes completely from its present position, rents will have to rise. All I am suggesting is that there should be a time limit after which they are reviewed, so that a tenant, as my noble friend Lord Kinnoull put it very well, knows where he stands. This provision would be of benefit to the tenant; it would be of benefit to local authorities, and I cannot see that it goes against the principle of the Bill. I hope very much that the Government will consider it.
Lord MELCHETT: May I first answer a point the noble Baroness, Lady Young, put to me earlier on about whether local authorities had expressed any opinion on this clause. The answer is that they have been consulted and no suggestion came from them that a three-year review would be desirable. The Government axe resisting this Amendment because it serves no useful purpose. Indeed, it might have the side effect of suggesting to local authorities that they should review their rents only at fairly long intervals. It could therefore in a period of sustained inflation have the effect of transferring burdens from tenants to ratepayers in an unsystematic way. That is a point I have already made to the noble Earl. I think this could hardly be the intention of noble Lords opposite. It is not the intention of the Government.
Local authority rents should not rise unless it is necessary, but when it is necessary the question is not: "Should this additional income be raised?" but is: "From whom should it be raised, the tenant or the ratepayer? " The Bill will leave authorities entirely free to decide
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for themselves when to ask the question, as well as the answer to be given. In practice, as we know, the question will ask itself each year as each new year's estimates are framed. I should like to say something further to the noble Baroness. Of course, I have not been in the position where I have had to attend a meeting as a local authority member when rents are being raised. But the Government's intention is to restore to local authorities power to fix rents. With power go responsibilities, and local authorities will have to take responsibility for the actions we are giving them power to take.
Baroness YOUNG: This is not a matter I shall press today. I am sorry to have heard the reply of the noble Lord, Lord Melchett, although I suppose one should not be altogether surprised. I beg leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
4.17 p.m.
Baroness YOUNG Baroness YOUNG moved Amendment No. 2:
Page 2, line 1, leave out "may" and insert "shall".
The noble Baroness said: This Amendment, to subsection (3) of Clause 1 seems to me only a practical precaution to take. Subsection (3) says:
"A local authority may make provision for a working balance in their Housing Revenue Account",
and my Amendment would change the "may" to "shall"—"shall make provision". There is one short reason for this which I should have thought would be self-evident to everybody. No one can see into the future to know what the next years are to bring us, certainly not in an inflationary era such as we have at the moment.
Therefore, it is only reasonable that a local authority should keep a working balance in its housing revenue account. If it does not do so it will find itself in great trouble because it will have no money at all to meet any unexpected expenditure. In these inflationary times unexpected expenses on repairs, on maintenance, and on management will have to be met—and this in a situation in which local authorities are to be asked to buy as many properties as they can lay their hands on. It is quite extraordinary that the Bill should say simply that a local

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authority "may" make provision for a working balance. I do not know what is to happen to a local authority that decides not to make provision for a working balance.
The noble Lord, Lord Melchett, quite rightly said on my previous Amendment that of course a local authority must consider when it is to review rents because otherwise it will have to ask the ratepayers to pay. It will not have to review rents regularly, and when it gets into trouble one does not know how far the deficit must go before it decides that it must raise its rents. The ratepayers will undoubtedly have to stump up if it has made a mistake in its calculations. I am afraid I cannot understand why this particular subsection should have been drafted in this way. I have no doubt the answer we shall get is that once again this is an opportunity for local authority freedom and they may not wish to have a working balance.
This matter, however, raises an important issue—a much wider one than the narrow point of council housing and council tenants. I believe that one of the greatest social problems in this country today is the future of our cities and particularly of our inner cities, where too often there are a very large number of poor people with a multiplicity of problems, and possibly just a few very rich people as well. One of the contributory causes of the plight of some people has been very high rates in city centres. It is not the only contributory cause, but it is one. I believe that if local authority housing revenue accounts are allowed by law to run very large deficits—which must inevitably be made up by the rate-payers and to a certain extent by the taxpayers—we shall have the situation we are already beginning to see in some of our major cities of business where other people move out because they cannot and will not pay the rates. This problem is increasing.
It is a very big issue, and this has just a slight bearing on the matter. I think it is such an important issue that I hope the Government will consider the matter carefully before saying that they will not look at what the consequence of subsection (3) could be, not just for council tenants and council housing but for the character of towns. I hope that the
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noble Lord, Lord Melchett, will say whether he thinks there should be any limit upon what a housing revenue account deficit could go to before the district auditor is called in to have a look at it and whether, under these circumstances, the Government would con-template any kind of Government intervention if the sum became too large. As I have already said, I think that it is a matter of considerable concern not only to council and municipal housing authorities but to the whole of the problem of inner cities. I beg to move.
Lord MELCHETT: I can assure the noble Baroness that this matter has been considered carefully and that we have already looked at her Amendment with considerable care. A working balance on a housing revenue account is regarded by some authorities as a useful means of covering unexpected fluctuations in income and expenditure. Also, it can meet the situation where work—for instance, repair work—has been budgeted for in one year but, through circumstances beyond the authority's control, has been delayed until the following year. It may also be useful to an authority whose cash flow is such that at certain times payments which are substantially in excess of the income received have to be made. However, many authorities manage without the working balance in the housing revenue account—in a sense keeping their reserve centrally. There are no arguments to compel an authority to follow one course or another. No Government finance hangs on the choice.
During the period of operation of the 1972 Act system, authorities could keep a working balance but they were not obliged to do so. Some did so; others did not. Since the whole philosophy of our proposals is to return freedom to local authorities wherever possible and to recognise their ability to manage their affairs in the light of their own local circumstances, we are satisfied that the choice of whether or not to make provision for a working balance should be theirs. If they decided that in their circumstances such a balance was unnecessary, there would be no point in adding to the pressure on rents and rates by compelling them to provide one. What we have done is to provide that the balance should not be larger than is reasonably necessary. To provide an

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excessive balance would amount to making a profit from local authority housing, which is what the Government are committed to avoiding.
Baroness YOUNG: having read the remainder of subsection (3), I quite appreciate that the Government are committed to making quite sure that no profit is made from local authority housing, but that is not the point at issue. We are talking about whether or not a local authority shall have a working balance and whether or not it is likely to make a loss. I am wondering whether the noble Lord would care to comment on the question of a loss and what the Government propose if a local authority decides neither to have a working balance nor to keep large enough balances generally to be able to meet any unexpected repairs that may come their way.
Anybody who owns or is attempting to buy his own house knows that one of the most terrible things that can befall him is unexpected expenditure. For instance, the roof starts to leak and has to be repaired. That is the kind of experience which everybody has. To take my own authority which owns slightly over 10,000 council houses, nobody could wish for some disaster to befall them but nobody can say that something will not happen. Therefore, what advice will the Government give to a local authority on the matter of deiicits if, exercising its freedom under the terms of the Bill, it does not have the money to meet some unexpected occurrence? Will they produce something from the taxpayer, or will they say, "If you have done that you must levy a supplementary rate"?
Lord MELCHETT: As I understand it, what we are talking about is an accounting point. It is the way that local authorities choose to run their accounts. Whether or not one keeps a working balance does not alter the actual expenditure. The final deficit has to be met from the rates, whether or not a balance is estimated. There is no statutory limitation other than "reasonable". In other words, reasonable rents will go with no more than a reasonable deficit, and it is the case law on "reasonableness"— which existed before the Housing Finance Act and of which there is a long history —with which, as I am sure the noble
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Baroness knows, local authorities are familiar. It is that statutory limitation which will control the size of the deficit.
Baroness YOUNG: I am bound to say that I find the reply of the noble Lord, Lord Melchett, somewhat unsatisfactory. In fact, it is not really a reply to my question because all that he is saying is that the Government expect local authorities to keep a reasonable balance. My question, however, is this: what do they do if they decide not to keep a reasonable balance? I entirely accept his definition of what is a reasonable balance, because it comes from the 1957 Act, has been in use ever since, and is generally understood in that sense. However, circumstances in 1975 are very different. Quite honestly, if that is the advice which the Government are to give to local authorities they would probably do better just to exercise their own judgment, because I do not think that advice will be very helpful to them. However, at this moment I shall not press the Amendment any further, but I shall consider what the noble Lord has said. I beg leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
4.28 p.m.
Baroness YOUNG Baroness YOUNG moved Amendment No. 3:
Page 2, line 3, leave out from ("circumstances") to end of line 5.
The noble Baroness said: I beg to move Amendment No. 3, although I have little hope that I shall get any other reply than the one I have already had to my two other Amendments. I was very interested to hear the noble Lord, Lord Melchett, say in answer to both of my other Amendments that the reason they could not be accepted is because local authorities must be free to decide what it is that they have to do. I put down my third Amendment because it says in subsection (3) that, far from being free to decide what they shall do, local authorities are not free to make a surplus. This seems to me to be rather inconsistent. If we are to have the principle of local authority freedom, local authority representatives—who were so eloquently described by the noble Lord, Lord Melchett, at Second Reading that I almost felt I recognised myself in his description of these democratically elected people who are conscious of the needs of their local society—ought, if

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they so wish, to be able to make a surplus.
I wonder whether the noble Lord could explain to us how he squares the principle of freedom of local authorities with the fact that they do not have the freedom, if they so wish, to make a surplus. I have the uncomfortable feeling that this is because the Labour Party decided in 1892 or thereabouts that no money should be made out of housing and that they have decided ever since that this should be so. They have decided, therefore, to write it into the Bill.
On a much more serious point, when the noble Lord, Lord Melchett, replies I hope he will bear in mind that earlier on in Clause 1 there is the provision for rent rebates for all council tenants. It is a mandatory provision in all local authorities. Therefore no tenant who is unable to pay the rent need suffer, because he will be eligible for a rent rebate. I hope we shall increasingly improve our publicity on rent rebates, so that the difficult problem of take-up will be overcome. Therefore I hope that on the principle of local authority freedom, and because in any case tenants will not suffer, the Government will consider my Amendment. I beg to move.
Baroness ELLIOT of HARWOOD: I should like to support this Amendment because here again we are in exactly the same position. The Government say that this is in the hands of the local authority. If the local authority are of good conscience and do not want the ratepayers to have to meet the deficits on their housing revenue account, surely it is well worth while to encourage them to make a surplus, which probably will not be large but might just make the difference between having to charge extra rates on the general public, as opposed to those living in council houses which, on the whole, are pretty good. In any case, they are kept up to date by most local authorities, with all the modern amenities we like people to have.
But if a local authority cannot meet the deficit, what does it do? It puts the extra few pence on the general rate. There are people paying rates who may be living in their own houses—I am not saying they are council houses or houses of private landlords—where conditions are not nearly so good, where they have been for
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a long time, where the houses are old and where the tenants can ill afford additional rates to help those people who live in good council houses and should be paying a larger rent. This happens a great deal in urban areas, particularly in large cities. I am sure many noble Lords know of conditions in large cities. I know one or two large cities fairly well, and I know that this is what happens. When the housing revenue account does not balance, when the money has to be taken from the rates to pay for the council houses, then it is the people living in lesser houses who have to meet that deficit. It is inconsistent to say, on the one hand, that everything should be in the hands of the local authority, and, on the other hand, if the local authority is clever enough—and it would be a jolly clever local authority who could do it—to have enough money to pay for repairs, renewals and so on which they have to do on council estates, they shall not be allowed to make any profit in order to spend it on that kind of work, which may not arise in 1975, but it will in 1976. So one is not really making a profit in the sense of putting something into the kitty against the current year, but one is taking stock of the future and saying, "We will not allow ourselves to run into debt; we will provide enough money". It should come from those benefiting from good council estates and the good council house. It is quite inconsistent to say otherwise, and I hope the noble Lord will consider this matter again.
Lord MELCHETT: As the noble Baroness, Lady Young, has said, the purpose of the Amendment is to remove from local authorities the requirement that they shall not make provision for a surplus in the housing revenue account. The recent origin of this provision in the Bill was in the Election Manifesto of the Government, which contained a commitment to
"restore to local authorities the right to fix rents which do not make profits out of their tenants."
The right honourable gentleman the Secretary of State, in his Second Reading speech in another place, defended this provision on the lines that
"The authors of the 1972 Act envisaged a situation where many councils would make an actual profit on their housing—a profit on housing which contains an important social service element. That concept—the generation of profit out of socially necessary housing— is one which we on this side of the House

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reject, and which this Bill will make impossible." — [Official Report, Commons; 18/11/74; col. 906.]
My honourable friend the Under-secretary of State said in Committee in another place:
"We do not regard it as right that council house rent should be not only a rent but a kind of general tax which should pay not only for objectives within the housing revenue account field but also for street lighting, education and such things. That is what rates are for. Under the Housing Finance Act there was a specific obligation for the paying over of the surplus to the Treasury and the Treasury refunding half of it in certain circumstances. One of the things we were specifically against in that Act was the idea of taxing the poor through their rents to subsidise the poor in other ways."
As the noble Baroness, Lady Young, has kindly pointed out, the Government have taken an absolutely consistent line on this matter for a long period of time. We are fundamentally opposed to the concept which would be introduced by this Amendment.
Baroness YOUNG: In fact I do not think that my Amendment does go against the concept that the noble Lord, Lord Melchett, has enunciated. He is saying that local authorities shall not make a profit out of housing. All that my Amendment says is that if local authorities do not choose to do so, they need not do so. On every other Amendment so far, the noble Lord has argued that local authorities should have freedom. All I am saying is that if a local authority should make a surplus out of its housing revenue account, it should be free to do so. I cannot accept his statement that by doing so, if a local authority wished to do so (I may not be quoting him exactly), it would be taxing the poor through their rents. I do not know quite to whom the noble Lord is referring. Although there are some very poor council tenants, the average earnings of council tenants, on the whole, I think I am right in saying, are higher than the average earnings of tenants of private housing. Many council tenants are very well off indeed. Therefore, to suggest that if they are paying a higher rent one is automatically taxing the poor because they happen to be living in council houses—particularly as I believe it is to be Government policy that everyone shall live in a council house if they do not own their own house, and I cannot believe they think half the population
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is as poor as that—seems to me a very strange statement.
Baroness BIRK: I do not know whether my noble friend Lord Melchett understands this point better than I, but could the noble Baroness, Lady Young, give me some evidence of her rather extraordinary statement that the income of people living in private accommodation —the noble Baroness seemed to be taking the whole sphere—was lower than that of council tenants? Then there were the other statements that she made. I do not know whether I misunderstood it, but her argument did appear to me rather extraordinary.
Baroness YOUNG: My statement was that, if you look at it, you will find some of the poorest people are in the worst accommodation, with private landlords.
Baroness BIRK: That is not what was said by the noble Baroness.
Baroness YOUNG: I am sorry if I did not make myself clear, but that is what I meant by my remark that many of the tenants of private landlords are some of the poorest people in the community. All the statistical evidence on incomes and rents goes to show this. This is the great case for rent allowances which we have all supported. Many tenants in council houses—I have ever said more than this —are considerably better off. It was the noble Lord, Lord Melchett, who made a statement that local authorities would be taxing the poor through their rents. I think it is quite incorrect to describe all council tenants as poor. Some are, but a great many are not.
Lord MELCHETT: May I make it quite clear that just as the noble Baroness, Lady Young, did not mean to say that all council tenants were rich, I certainly did not mean to say that all council tenants were poor.
Baroness ELLIOT of HARWOOD: I do not know whether my experience is different, but I have been chairman of a housing committee for quite a long time. When we built council houses we used to take tenants from the old, poor houses —the slums, if you like—in preference to anyone else, in order that they should go out of their bad housing and into new. Although this has been going on for a great many years, there are far too many slum houses still existing, alas!, and these

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are houses in which, generally, rather poorer people are living than the people who have moved into the council houses. As the noble Baroness, Lady Young, says, when these people are moved to council houses they can claim rent rebate if their income is not sufficient. A great many do not, because they are often people who are well able to afford to meet the rents of these new houses. But the point that I feel strongly about is that if the housing revenue account does not balance or have a small surplus, as we were suggesting—not something which one can put against lighting or some other service provided by the local authority, but some small surplus which would mean that when charges arise on council houses they can be met—one then has to raise the rates on all the other people living in the area, far more of whom are probably living in very old houses and are not nearly so well off as those in council houses. They are paying for the good houses. We have always thought that was a great mistake and very unfair.
I hoped very much that we were getting away from that, and getting to the point where any housing legislation which was passed recognised that the rents paid on council houses should meet the deficit; that there should be a balance or, if not a balance, a small surplus. This is putting the whole thing back again, and saying that if there is a deficit it shall go on to the general rate. That has been happening for years and in big cities it is one of the scandals. I am very much opposed to that, and am extremely sorry that it should still continue under this Bill. It is the greatest possible mistake and a great unfairness on the general ratepayer in any city or county.
Lord HAWKE: I am rather disturbed by the wording of this clause. Somebody has to interpret it, and how does one interpret,
"… which is no larger than is reasonably necessary having regard to all the circumstances"?
I should have thought that in an inflationary age it would be desirable to keep the largest possible balance in the housing account. Each year houses will cost a lot more than in the year before, and the Government will probably not produce the necessary subsidies to balance the books.
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I do not like the phrasing of the whole subsection. I should have thought the words, "A local authority may make provision for a working balance" on housing account would be quite enough, and leave it at that.
Lord HYLTON: I should like to try to bring this discussion down to ground level, as one might say. If local authorities were not absolutely prohibited from making a modest surplus and if this Amendment were accepted, they could do many things which they do not now do or do only very slowly after many years of pressure. They could, for example, provide a meeting place for a tenants' association; they could plant an extra tree on a spare piece of land at one corner of an estate; they could immediately improve a single house which they acquire, instead of waiting to buy up the whole street. I hope that the Government will think again on this amendment.
Lord MELCHETT: I wonder whether I might ask the noble Lord, Lord Hylton, a question. Could he explain exactly how local authorities would be able to spend surpluses on these facilities in any way which they are not able to do at the moment? If they budget for them and raise the necessary revenue from rents or rates, they can provide these facilities. There is no need for a surplus. Furthermore, under the Housing Finance Act of noble Lords opposite, any surplus would not have been available for these facilities but would have been paid over to the Treasury.
Lord HYLTON: If modest surpluses on housing revenue accounts were allowed, many desirable things could be brought in over and above the basic provision of new dwellings or improved dwellings. That is the case I am trying to argue.
Lord DRUMALBYN: I think we should get clear who is to be the judge of what is "reasonably necessary having regard to all the circumstances". Surely the purpose of having a surplus is to avoid going into deficit at some future date. This is essentially a matter of judgment. Does this subsection mean that the Department will supervise all the balances and say at what stage the surplus is larger than is reasonably necessary, having regard to all the circumstances? If not, what does

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it mean? If it means simply that a sur-plus is not to be accumulated with a view to being transferred to the general rate account or something of that kind, why does the Bill not say that? To my mind, unless the Department is to supervise in the way I have suggested and tell local authorities that they are accumulating more than is reasonably necessary, having regard to all the circumstances, the last sentence should be left out because it is quite redundant.
Lord FOOT: May I follow what the noble Lord has just said? We are involved here, first, in a question of semantics, and following that an important question of principle arises. A local authority may make provision for a working balance, but is prohibited from making provision for a surplus. When does a working balance become a surplus, and when does a surplus cease to be a working balance? The matter is of some consequence, because if some councillors—the reverse of the people at Clay Cross—were to be so misguided as to make provision for a surplus when they thought they were making provision for a working balance only, might they not be subject to a surcharge at the hands of the district auditor because they had offended against the provisions of the Act? Surely councillors will be at great risk if, in trying to make provision for a working balance which is reasonable under all the circumstances, they overstep the mark and fall into the abyss of a surplus. I think the Government are in some difficulty about this point. I think there is a great deal in what is suggested by the Amendment, because things would be made much clearer if these words were simply omitted.
Lord RHODES: I think the Government should think again about this. Those of us who are experienced in this kind of matter over a long time in local government, who were members of rate and rent arrears committees and saw the heartbreak that there was, can now see some of the signs of a return to those conditions. This Amendment has a lot of common sense in it, in that it should be made quite clear in the Bill that prudence should be given an opportunity in the finances of our housing committees.
Lord MELCHETT: If I may first deal with the question of reasonableness, in this Bill we are returning to the basis which local authorities used for many years—50 years or so, in fact—before the 1972 Act was passed. It was got rid of in that Act in a desire for a uniform basis, disregarding the fact that it had worked satisfactorily for so long and in a period, indeed, when subsidies were both absolutely and relatively lower than they have to be nowadays. There was some case law to guide local authorities, which stressed that a principal factor was the need to strike a reasonable balance between the tenants and the ratepayers. That is where the concept of reasonableness comes in. There is no need to fear that to return to this well-tried formula would have any disastrous consequences, in the Government's view. I have already said on a previous Amendment that the concept of a reasonable surplus on the housing revenue account, or a reasonable deficit for that matter, was governed by this relationship between reasonable rents and burdens imposed on ratepayers. There is nothing new in this provision; it is something which worked for a great many years before the Housing Finance Act was passed.
If I may return to something the noble Baroness, Lady Young, said earlier on, in moving the Amendment she scored a debating point in referring to the fact that the Government are very keen to restore to local authorities powers which were removed under the Housing Finance Act. It seems to me that it ill behoves the noble Baroness to say that her Amendment would now restore freedom to local authorities when the Housing Finance Act of noble Lords opposite did nothing of the sort. It imposed fixed, rigid increases in rents on local authorities, regardless of whether or not they were needed. It imposed a rents system which was decided by people who were arbitrarily appointed and had nothing to do with elected local authorities. It seems to me slightly disingenuous for noble Lords opposite to claim that they are now proposing something which will give freedom to local authorities, without reminding your Lordships that their own Act substantially took this freedom away.
4.50 p.m.
Baroness YOUNG: I should like to thank all noble Lords who have taken

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part on this Amendment. It is always useful to have the points made by my noble friend Lord Drumalbyn and the noble Lord, Lord Foot. They have raised a very important matter both of drafting and of judgment on when a balance becomes a surplus. The situation today is not the same as it was before the 1972 Act, in that we live now in an era of inflation. Whereas, previously, generally speaking, local authorities knew that they needed to put up their rents at intervals —but not at very frequent intervals—in order to keep a working balance if they chose to do so, the situation now, with escalating costs, particularly on repairs and maintenance, is very different. Therefore I do not think that local authorities are going to have anything like such a straightforward task as they had even five years ago. As there does not seem to be much evidence that the pace of inflation is slowing down, they could find themselves in a very difficult position indeed.
I was also grateful to the noble Lord, Lord Rhodes. The point that he made about prudence was one that we should all take to heart. The situation in which we live at the moment is a serious one, and all public authorities, national or local, ought to bear in mind his wisdom on this matter. The noble Lord, Lord Hylton, raised a very real point about what could be done with the surplus. Local authorities are under great difficulties at the moment to make ends meet. Every local authority is having to put up the rates to a very large extent. Each day we hear of another vast rate increase.
All the services—education services, social services—even if not cut back, are certainly being kept without any improvement on the levels of service provided last year. Therefore, it seems to me that if a local authority should wish—only if it should wish—to make a surplus and perhaps put the money to some other good objective that it has in mind, it should be able to do so. It is for that reason that I move this Amendment.
Lord MELCHETT: Would the noble Baroness care to tell your Lordships' House just how many local authorities made a surplus when, under the Act of noble Lords opposite, they had the chance to do so?
Baroness YOUNG: I have not got the figures, and it may well be that none of them did. Suppose none of them did; let us take that argument. That does not mean that none of them will want to do so in the future. The situation five years ago was very different from the situation today. Every local authority is having terrible difficulty in maintaining its standards in education and social services, quite apart from the environment or any other of the desirable things that we should like to see. All I say is that if local authorities chose to do this, I think that they should be entitled to; that is all.
4.54 p.m.
On Question, Whether the said Amendment (No. 3) shall be agreed to?
Their Lordships divided: Contents, 116; Not-Contents, 59.

CONTENTS

Aberdare, L.

Cromartie, E.

Gladwyn, L.

Allerton, L.

Daventry, V.

Glasgow, E.

Amherst of Hackney, L.

Davidson, V.

Goschen, V.

Barrington, V.

Denham, L. [Teller]

Gowrie, E.

Beaumont of Whitley, L.

Derwent, L.

Grenfell, L.

Belstead, L.

Drumalbyn, L.

Grey of Naunton, L.

Berkeley, B.

Dudley, E.

Gridley, L.

Bethell, L.

Dundee, E.

Grimston of Westbury, L.

Birdwood, L.

Dundonlad, E.

Hailsham of Saint Marylebone, L.

Bolton, L.

Ebbisham, L.

Boothby, L.

Elliot of Harwood, B.

Hankey, L.

Byers, L.

Elton, L. [Teller.]

Hawke, L.

Caccia, L.

Emmet of Amberley, B.

Hereford, V.

Chelwood, L.

Essex, E.

Hornsby-Smith, B.

Clifford of Chudleigh, L.

Exeter, M.

Hylton, L.

Clitheroe, L.

Ferrers, E.

Hylton-Foster, B.

Coleraine, L.

Foot, L.

Inglewood, L.

Cork and Orrery, E.

Fortescue, E.

Killearn, L.

Courtown, E.

Fraser of Kilmorack, L.

Kilmany, L.

Cowley, E.

Gage, V.

Kilmarnock, L.

Cranbrook, E.

Gainford, L.

Kimberley, E.

Crawshaw, L.

Gisborough, L.

Kindersley, L.

Kinnoull, E.

Newall, L.

Strang, L.

Lauderdale, E.

Nugent of Guildford, L.

Strathclyde, L.

Long, V.

Onslow, E.

Strathcona and Mount Royal, L.

Lothian, M.

Platt, L.

Luke, L.

Rankeillour, L.

Strathspey, L.

Lyell, L.

Rochdale, V.

Swaythling, L.

Macpherson of Drumochter, L.

Rochester, L.

Swinton, E.

Margadale, L.

St. Aldwyn, E.

Tenby, V.

Masham of Ilton, B.

St. Helens, L.

Terrington, L.

Massereene and Ferrard, V.

St. Just, L.

Thurlow, L.

Mersey, V.

Saint Oswald, L.

Tranmire, L.

Middleton, L.

Sandford, L.

Tweedsmuir, L.

Milverton, L.

Sandys, L.

Verulam, E.

Monck, V.

Seear, B.

Vivian, L.

Mowbray and Stourton, L.

Sempill, Ly.

Wakefield of Kendal, L.

Moyne, L.

Sharples, B.

Wigoder, L.

Netherthorpe, L.

Stamp, L.

Young, B.

NOT-CONTENTS

Ardwick, L.

Fisher of Rednal, B.

Melchett, L.

Bacon, B.

Gaitskell, B.

Pannell, L.

Birk, B.

Gardiner, L.

Phillips, B.

Blyton, L.

George-Brown, L.

Popplewell, L.

Brockway, L.

Gordon-Walker, L.

Rusholme, L.

Bruce of Dorrington, L.

Goronwy-Roberts, L.

Segal, L.

Burntwood, L.

Greenwood of Rossendale, L.

Shepherd, L. (L. Privy Seal)

Castle, L.

Hale, L.

Slater, L.

Champion, L.

Hamnett, L.

Stow Hill, L.

Chorley, L.

Henderson, L.

Strabolgi, L. [Teller.]

Crowther-Hunt, L.

Hoy, L.

Stewart of Alvechurch, B.

Darling of Hillsborough, L.

Jacques, L. [Teller.]

Taylor of Gryfe, L.

Darwen, L.

Janner, L.

Taylor of Mansfield, L.

Davies of Leek, L.

Leatherland, L.

Wells-Pestell, L.

Donaldson of Kingsbridge, L.

Lee of Newton, L.

White, B.

Douglas of Barloch, L.

Lloyd of Hampstead, L.

Willis, L.

Douglass of Cleveland, L.

Longford, E.

Wilson of Radcliffe, L.

Elwyn-Jones, L. (L. Chancellor.)

Lovell-Davis, L.

Winterbottom, L.

Evans of Hungershall, L.

MacLeod of Fuinary, L.

Wootton of Abinger, B.

Fisher of Camden, L.

Maelor, L.

On Question, Amendment agreed to.

Resolved in the affirmative, and Amendment agreed to accordingly.
Clause 1, as amended, agreed to.
Clause 2 [Reserve powers to limit rents].
5.4 p.m.
Baroness BIRK Baroness BIRK moved Amendment No. 5 :
Page 2, line 26, at end insert—
("(4A) The Counter-Inflation (Private Sector Residential Rents) (England and Wales) Order 1974 and the Counter-Inflation (Private Sector Residential Rents) (England and Wales) No. 2 Order 1974 are revoked, and the standstill period under the first order (which was extended by Article 3 of the second order) shall terminate on the coming into force of this subsection.
(4B) Notwithstanding the revocation of the orders—

(a) Article 5 of the first order (recovery of excess rent) shall continue to have effect, for the purposes of both orders, so as to enable a tenant to recover rent at any time during which he would have been able to recover it if the orders had not been revoked, and

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(b) Article 8 of that order (jurisdiction of the county court) shall continue to have effect, for the purposes of both orders, in respect of any proceedings commenced before the expiry of a period of two years from the date of the revocation.

(4C) Paragraphs (a) and (b) of subsection (4B) above shall continue to have effect during the periods specified in them, whether or not Part II of the Counter-Inflation Act 1973 (under which the two revoked orders were made) is in effect.
(4D) Notwithstanding the revocation of the orders, the rent recoverable under a regulated tenancy of a dwelling-house in respect of a contractual period beginning before but ending after the revocation shall not exceed the amount which, by virtue of the orders, was the counter-inflation limit for the dwelling-house immediately before the revocation.
(4E) Section 38(2) of the Interpretation Act 1889 (effect of repeals) shall apply in relation to the orders as it applies to an enactment which is repealed by another Act.")
The noble Baroness said: I beg to move Amendment No. 5. With the leave of the House I will speak also to Amendments Nos. 6, 36 and 56. For the sake of clarity, again with the leave of the House, I shall not move Amendment No.

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6 with Amendment No. 5. These Amendments, with the exception of Amendment No. 6, incorporate in Clause 2 the provisions which bring the rent freeze to an end by revoking the Orders which imposed it with some savings to safe-guard and to preserve rights acquired under those Orders. The savings are the operation of Article 5, which deals with the recovery of excess rent, and Article 8, which grants jurisdiction to the county court. The provisions, with certain differences, are now contained in Clause 3 of the Bill, which would be deleted by these Amendments.
Amendment No. 6, the transposition of Clause 2 to after Clause 11, is proposed simply for the sake of the logical arrangement of the Bill. Now that it covers both the public and private sectors, Clause 2 should not come in the middle of the public sector clauses. Amendments Nos. 36 and 56 are purely technical. They add the Counter-Inflation Orders, revoked by Clause 2 of the Bill, to the Schedule of Repeals. I beg to move Amendment No. 5.
On Question, Whether Clause 2, as amended, shall stand part of the Bill?
Baroness YOUNG: I am grateful to the noble Baroness, Lady Birk, for explaining the Amendment which we have just agreed, which is now to become part of Clause 2. As I understand it, this is largely concerned with bringing all rented property under counter-inflation legislation. I am concerned particularly with Clause 2, and I have studied the Bill as thoroughly as I can. I believe local authorities are equally concerned that this Order might be brought in and they would have no guarantee that the losses that would come from rate income as a result of the Order being introduced would be made up by way of subsidy. As I understand the present position, when the rent freeze was introduced at the end of last March, broadly speaking 80 per cent. of the loss was covered by the rising costs subsidy under the 1972 Act.
As I understand it, the Secretary of State has power under the clause, without consulting local authorities, to bring in a rent freeze as a method of counter-inflation. Whatever the merits or otherwise
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of that might be, it is bound to have serious consequences for local authorities. I should like an assurance from the noble Baroness, Lady Birk, that the Government have some method of meeting this situation. I may have misunderstood the Bill, but one of their new subsidies, which takes the place of the 1972 Act subsidies, will make up the difference. Perhaps she will explain to us what it is that local authorities are expected to do in those circumstances. I consider this to be a serious point.
The second point takes us back to the issue of local authority freedom. I think local authorities are concerned that such an Order might be introduced without consultation, and obviously this could be done very quickly if it was needed to meet some inflationary situation. I was surprised to see it, because I was under the impression—perhaps mistakenly—that the Government intend to rely on the Social Contract to defeat inflation and not on Statutory controls. But here we have Statutory control being written into a housing Bill. I do not understand why local authorities and, of course, private landlords, are being singled out in this way with the power of the Secretary of State to introduce, quite suddenly, a rent freeze, as I understand it, to counter inflation. I hope that the noble Baroness will be able to reassure the Committee on those two points. I beg to move.
Baroness BIRK: First, may I say that on this first part of the Bill, taking what has gone on earlier this afternoon on Clause 1, the whole attitude of the Opposition in the Amendments which they have tabled, and in what has been said so far, underlines a fundamental difference in approach between the noble Baroness, Lady Young, her Party, and the Government This runs through all the Opposition's Amendments to the Bill and is as relevant in its approach to Clause 2 as it is to Clause 1. What the Opposition is attempting to do is to delete the clause altogether. The clause is necessary and, as has been made clear, the main purpose of the first part of the Bill is to return to local authorities the freedom to fix rents for local authority housing. The Government are sincere and determined in their aim, which they see as being of major importance in the re-establishment of local responsibility for housing. But no-one can deny that in the difficulties

1257
and inflationary climate of today a great deal of uncertainty surrounds many areas of public and private finance. It is for this reason that the clause establishes a reserve power for the Secretary of State to regulate rent increases and rent levels.
In answer to the first point made by the noble Baroness, it is not technically possible to define the necessarily lost income. The Government will bear local authority losses in mind if an order is made and will decide on the basis of the circumstances at that time. There has to be—as there has to be under all these arrangements where we are restoring freedom to local authorities, but where, at the same time, central government have to keep an overall supervision of various areas—a great deal of flexibility. This is not inconsistent with the basic principles underlying the Bill. The general freedom of local authorities to fix rents will in no way be limited by the establishment of the order-making power. It is a simple matter of caution and good sense.
The noble Baroness referred to the need for this power and to the social contract, but, after all, the counter-inflationary measures were brought in by the Conservative Government. The difficult economic situation and the need to deal with inflation have remained and would have done so whichever Government was in power. It makes far greater sense for the provisions relating to housing to be in a housing Bill, particularly as the Counter-Inflation Acts are coming to an end. Keeping the power is a simple matter of caution and good sense, and I have no hesitation in saying that it would be quite irresponsible not to include such a clause in present conditions. Hypotheses have been put forward both in another place and by the noble Baroness as to the condition in which the power might be exercised, but it is really not relevant to speculate in this way. A reserve power is entirely what it says it is. It is a precautionary measure necessitated by good sense, by the requirements of the counter-inflationary policy and the housing policy, and it would be irresponsible to omit such a power.
One has only to think back to the circumstances in which the Government took office a year ago, in a situation of great tension. The need to take steps to combat the industrial and inflationary
1258
crisis was paramount. The rent freeze then imposed within a very few days of the Government's taking office was at that time an essential element in the strategy to cope with the existing situation and to show that, in housing as well as in other essentials, they were determined to contain inflationary pressures. A reserve power is necessary to guard against general increases in rents which clearly go against the general economic interests of the nation, or threaten to destroy the main aims of housing policy.
There is nothing new about this concern. Rents are an important price. They have certainly been recognised to be a price over which some influence was required since the Prices and Incomes Act, and, as I have already said, that was recognised by the previous Government in the Counter-Inflation Act 1973. The present power is broadly modelled on the power in that Act. The Government have every confidence in the good sense of local authorities. They expect that increases in rents will be no more than are made necessary with the generous subsidy system provided under the Bill, a balanced approach to the distribution of costs between rent and rates and a rigorous economy of expenditure. This is a reserve power and, as with all such powers, the Government hope that its use will be unnecessary.
The power is also limited. In the public sector, the words of Clause 13(5) make it clear that it is there to set general limits to increases, not to move against a specific authority. That is the proper role of government in this matter. Government must set general boundaries, not intervene in individual cases.
The power is proper to the present Bill, because it is a power over rents and, as such, should be found in the law on rents. Furthermore, it goes beyond the Counter-Inflation Act because it does not expire on a set date. We cannot say when the need for such a power would expire, and therefore it is of indefinite duration, which I consider to be right. To do anything else would imply that the Government's interest in rents would cease at some point in time which could now be clearly foreseen. The clause does not unreasonably limit local authority freedom, any more than if one said to a driver, "If you go too fast, there will have to be a speed limit on this

1259
road". It is right to begin dealing with local authorities in a spirit of confidence and trust.
The clause applies also to the private rented sector of housing and here, broadly speaking, the same arguments are relevant. But, again, the power cannot be applied to individual dwellings. It may apply only to specified classes of dwelling, and since rents in the private sector are subject to regulation and control and will, if the later provisions of the Bill are enacted, be subject to general rules covering the phasing of rent increases, there is little likelihood of a need arising for the exercise of the reserve power. However, it would be unwise to omit the private sector from the scope of a general and over-riding control of this kind and, therefore, the Government have thought fit to propose a general power covering both the public and private sectors.
The clause is necessary and has been framed in the most reasonable way compatible with achieving the necessary end. Both sides of the House have from time to time recognised the need for such a power and, therefore, I resist the Amendment to delete the clause from the Bill. The clause should stand part of the Bill.
5.18 p.m.
Baroness ELLIOT of HARWOOD: I should like to ask the noble Baroness one or two questions. I was very interested in her speech and I appreciate what she has said, but there is a difficulty. A rent freeze is imposed: who then meets the charges which are inevitable for anyone who owns property, whether it be a council or a private owner? Property has a habit of running up charges ; one cannot help it. For instance, a roof may begin to leak or something else may happen and the owner is involved in having to repair it. The repair is done, but the tenant cannot be charged any more and, therefore, the local authority has to find the money from somewhere else. Somebody else has to pay what should have been paid by the tenant living in the house which has been repaired.
Exactly the same thing would happen with private property. Houses are alive. They are just as alive as human beings and they have a habit of needing many repairs done to them which the owner does not know about until the need arises.
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One can very often be severely caught out. If this rent freeze were operated— and I understand from the noble Baroness that it would be operated only very rarely or in very severe economic conditions—what would happen if it were impossible for the rents being paid by tenants, whether council or private tenants, to cover the charges for which the landlord was responsible? The landlord cannot say, "I can't put up the rent, so I can't do your repairs." Will the tenant say, "We will take you to court, because you have agreed under our tenancy to do certain repairs"?
This applies to private as well as to council houses. Where does one get the money from? Do the council have to find the money from somewhere else? Is it not simply robbing Peter to pay Paul?— because what will happen is that if there is very heavy inflation, one will have to raise the rates, or the private individual will have to find the money from his own resources. But he may not have any, in which case the repairs will not be done, and we are back again to square one. It seems to me to be terribly shortsighted, and I should like to know what the Government intend will happen if there is a rent freeze imposed in a time of severe inflation. What will happen under the Landlord and Tenant Act legislation—or under whatever arrangements are made between the county or the city and its tenants in order to meet repairs?
Lord HAWKE: I wonder whether I have misread the Bill. I can see that there is provision for an order for restricting or preventing increases of rents, but I cannot find in the Bill a corresponding provision that an order may be made calling upon local authorities to increase rents. I can well imagine a situation when such provision might be necessary. Suppose North Sea oil goes wrong, with the result that at some time within the next few years the purchasing power of the entire British people has to be very drastically reduced. Would that have to take place purely by large increases in taxation—income tax and so on—or would rents possibly play some part in it? I should have thought that if Clause 2(1) is to exist in the Bill there should be some corresponding provision for Central Government to call upon local authorities to increase rents as well as to stop increasing them.
Baroness BIRK: I note the point made by the noble Baroness, Lady Elliot of Harwood. There could be a time, which we hope we will not have to see again, of a rent freeze, or of very severe inflation. When the noble Baroness said it was like robbing Peter to pay Paul she was looking at one point of view, but I would look at the situation from another point of view. There is a certain limit to the funds which could be used, and whether they come from local authorities or from Central Government, if a squeeze is on, a squeeze is on. With the retaining of Clause 2 it is possible to look at this from a wider point of view because the Government would have a reserve power, and there would be means by which the situation could be helped, either through the rate support grant or other means. When this Government came into power this time, they found that there was an awful mess in the public sector, and they immediately made £350 million available out of public expenditure in order to try to improve the situation in the public sector.
I must repeat what I have just said— that this is a reserve power. It will not make any difference to the day-to-day running of the local authorities. I can understand the noble Baroness's anxiety, as well as the anxiety generally about the question of rents and the problems of local authorities, particularly in times of high inflation. But taking away this reserve power is not going to make things any better at all. At least you have at the end of a very loosely-held rein or piece of string the opportunity, if necessary, for the Government to take action.
The noble Lord, Lord Hawke, talked about the question of increasing rents, but this is really going back to the rents for public sector dwellings in Clause 1. I do not want to go over this again in this clause, because this deals with the way in which a reasonable rent is arrived at. This was discussed at some length by my noble friend Lord Melchett in the debates on the various Amendments relating to Clause 1. The clause we are discussing at the moment is specifically concerned with the reserve power to limit rents. I can only repeat what I said in answer to the noble Baroness that a reserve power is a reserve power, and it would in my view in, and it were made even more specific.
1262
sponsible for any Government not to have that power written into a Housing Bill of this kind. One hopes that with the good sense and the good management of local authorities it will remain as a reserve power.
Baroness YOUNG: Before the noble Baroness sits down, may I ask her one further question? If I understood her correctly, she said in reply to the noble Baroness, Lady Elliot of Harwood, that if the Government had to implement this reserve power, then they could help local authorities either by the rate support grant or by some special sum of money which they would make available. Would she tell the Committee whether the Government will undertake to make money available to local authorities by one means or another, should they introduce this reserve power, and would she say whether the Government would under-take to look at the Bill to see whether they should write in at an appropriate place some such guarantee, because this I think is the concern of local authorities.
I do not think that the noble Baroness answered the question I put to her about whether or not local authorities have been able to manage in the current rent freeze, because the 1972 rising costs subsidy applied automatically as costs went up, and costs clearly go up when rents are frozen. I therefore think I am right in saying that 80 per cent. of the cost was covered by Government subsidy, which made a great deal of difference to local authorities. I wonder whether the noble Baroness would confirm whether that was right, and whether or not the Government will undertake, by whatever means they consider to be most appropriate, to reimburse local authorities should they use this reserve power.
Baroness BIRK: In answer to the point which the noble Baroness has just made, this of course would depend on the circumstances—national, general and local —at the time. But in the way the Bill is drafted now, it does not apply to individual local authorities. What it does is to give the Government the opportunity to look at the matter. I really cannot see that by writing anything different into the Bill this could be improved upon, because if anything different were written and in the Government's view be irrewe

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should immediately get the response: "Ah, but you are now tying the Government or local authorities down too much ". To leave it as a reserve power seems to be finding exactly the right level for it.
When the Government came into power, as I said in reply to the noble Baroness, Lady Elliot of Harwood, they had to make £350 million available—well, they did make it available—to the public sector in order to deal with some of the more grave financial problems which had arisen in that area. With regard to taking long-term future plans into consideration, which I think the noble Baroness is concerned with, the Government have announced, and are undertaking, a review of housing finance which will include, which must include, the points she has raised. Her points are financial points and are now on record. These are some of the matters —the whole question of housing finance— which the Government will be concerned with in their review. But this reserve power at the moment—without again saying all I have said already—is there as a long stop which is necessary as a precautionary measure.
Baroness YOUNG: I do not think this discussion is progressing very far. I will, of course, read what the noble Baroness has said. I do not feel that she has quite seized the point I am making and about which local authorities are concerned. I hope that she too may read what we have both said and that perhaps she could write to me on the matter if on reflection, she feels she could make more specific proposals to meet what will undoubtedly be the very considerable difficulty in which local authorities will find themselves should this reserve power be used.
Lord DRUMALBYN: Before the Amendment is withdrawn, may I ask one question? I apologise for not having been here at the start. May I draw the attention of your Lordships to what I think is called the Henry VIII provision in subsection (4)?—
" Upon the coming into force of this section, the power to make orders under section 11 of the Counter-Inflation Act 1973 (General Power to make orders restricting or preventing increases of rent) "—
it is also in subsection (2)—
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"The supplemental and incidental provisions that may be made by an order … may include provisons excluding, adapting or modifying any provision contained in or having effect under any Act …"
This is legislated by order, and also, by order, only subject to annulment by the Negative Resolution procedure. Can the noble Baroness say how far this is precedented in housing legislation? It is one thing to make such provision under the Counter-Inflation Act, because that was of limited duration ; but taking these powers under the Housing Act, which is not of limited duration, is surely a very different matter.
Baroness BIRK: As I understand it— and if I am wrong I will let the noble Lord know—this is not a new procedure. We are taking the Counter-Inflation Act into the Housing Act but, as he will appreciate, in only a very minor degree. It is just the particular point about a reserve power. If there is anything further that I can say about this matter and on the point he has raised about the order I will let him know. It is rather a technical financial matter. Referring to what the noble Baroness said, I will certainly write to her about it. From our information in the Department, so far as this is concerned we have hardly had streams of representations from local authorities about it. While she may have evidence that one or two have raised it, it seems to be generally understood that this is a reserve power and very much in the background. We hope it will not be used, and it is accepted in that way. If I may say so, it comes rather oddly from the Opposition to take up the side of local authorities against the reserve power, when the 1972 Housing Finance Act took away all the freedom and powers of local authorities and put them on to central Government.
Baroness YOUNG: I shall be very glad to have a letter on the matter from the noble Baroness, Lady Birk, and also on the very important point raised by my noble friend Lord Drumalbyn. I think at this stage we must study what has been said and return to the subject on Report. I beg leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
Clause 2, as amended, agreed to.
Baroness BIRK: I beg to move Amendment No. 6.
Amendment moved—
Transpose Clause 2 to after Clause 11.— (Baroness Birk.)
Clause 3 [Revocation of Counter-Inflation Orders] :
On Question, Whether Clause 3 shall stand part of the Bill?
Baroness BIRK: I beg to move to leave out Clause 3.
Baroness YOUNG: Am I understanding correctly that Clause 3 is to be left out because the new Amendment, No. 5, is to be inserted in its place in Clause 2?
Baroness BIRK: Yes. This matter is rather complicated. When I moved Amendment No. 5 I took a number of Amendments together. It was because this point is concerned with bringing counter-inflation measures into this Housing Bill. I was moving to leave out Clause 3 because the private and the public areas come into the same section. Previously this part was within the Counter-Inflation Act.
Clause 4 [Housing Subsidy] :
On Question, Whether Clause 4 shall stand part of the Bill?
Baroness YOUNG: On Clause 4 and Schedule 1, to which I think we are speaking at the same time, I should like to raise three points on subsidies. Turning first of all to Schedule 1, I understand that the supplementary financing element in Clause 4(2) covers the refinancing of loans, because since the time when the loans were first raised interest rates have risen so rapidly. It will be a great help to local authorities by enabling them to continue to borrow the money. I am wondering whether or not this will take into account other costs, including repairs and maintenance. This is something which greatly affects local authorities and it would be helpful to them to know whether those items could be covered in this refinancing loan. As I understand it, this was allowable under the 1972 Act, and it would be very helpful if the same principles could apply under this Bill.
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The second point is one which I raised on Second Reading, and as there still seems to be some uncertainty about it. I should be grateful if the Government could give an assurance on the high costs element subsidy, which again is in Clause 4(2) and on page 15 Schedule 1, paragraph 7(2) reads:
" The Secretary of State shall determine the basis for the calculation of the high costs element, and in particular for determining what expenditure is relevant and whether it exceeds the standard level."
I should like to know whether this will apply to authorities other than London. The impression certainly seems to be given that only London is likely to get it. As the Secretary of State has to determine this matter (presumably it is to be laid down by Regulation) we do not know what it means. If I could have an assurance on that point I should be grateful.
I should also be grateful if the Government could give any indication when the Secretary of State is likely to bring this provision in. As I am sure all noble Lords appreciate, there is a long time lag between the time when an authority first thinks of building a house and the time it gets the house. Therefore it is necessary for it to know well in advance whether it is going to get the subsidy. If, for instance, it is hoping to put in a large building programme this year, the houses will not appear, ready for occupation, for two years or more. Therefore, it would be helpful to local authorities to know at some time in the course of this year whether or not they are likely to get this subsidy. This is a very technical matter and if an answer is not immediately avail-able perhaps the noble Lord will write me on both of these points.
The third point is another general one on subsidies. It is on the capital cost element of the subsidies. I understand that this will be paid at the rate of 66 per cent. on admissible costs. This creates some difficulties, because I think it takes the place of the. old rising cost subsidy which was at 75 per cent. On re-reading the Second Reading debate, I see that the noble Lord, Lord Castle, made the point that his authority of Islington will, as a consequence of this subsidy, be worse off. I do not believe that this is the intention of the Bill. I suspect that it is because the subsidy works as a flat subsidy to all authorities regardless of their housing

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needs and their building programme. It is probably on each house. Therefore, because the other subsidies worked slightly differently, local authorities find themselves worse off. If this is so, it is not helpful to many authorities in areas of housing stress and I wonder whether the Government could explain how they see this subsidy working and whether they feel that it meets adequately the needs of those authorities with large housing needs and housing programmes. Again this is a technical matter, I appreciate, and if the noble Lord would prefer to write me on any of these matters before Report stage I should be happy with that procedure.
Lord MELCHETT: I will try to answer as many of the points put by the noble Baroness as I can. If there is any-thing with which she is still dissatisfied, perhaps she will indicate so and I shall write to her. Her first point was about the subsidy which the Government are to introduce which will help local authorities meet the rising costs of loans. Most of local government is financed with loans and the interest rates are rising fast. The new subsidy will subsidise the increased cost of loans by 33 per cent. This is broadly the same level of assistance that an owner-occupier receives in the same situation. I think it would be true to say that the Government are not financing new repair costs and maintenance costs because this has been found to be extremely time-consuming and pettifogging and has caused a great deal of trouble to the local authorities. As the noble Baroness said, the new subsidy on interest rates will be of enormous assistance to local authorities and particularly so to those who have borrowed for a short period in the hope that the interest rates might go down and who now find the interest rates which are high are still continuing to increase.
The noble Baroness raised the question of the high cost element which is the new subsidy that the Government are framing. As I said on Second Reading —and I will now repeat it—this subsidy is not limited in any way specifically to London. It might be helpful to give an outline of the Government's views of the purpose of this subsidy. The Government's concern is to direct the subsidies
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carefully, and this is the reason why the high cost element will not be paid for next year. This is a subsidy intended to give assistance to those areas where housing costs arc, and always have been, highest. But these areas, mostly the great conurbations, and particularly, but not only, London, are internally varied and divided into local authorities with different problems and the same problems in different degrees. To frame a high cost subsidy that will do exactly the job we seek to do will be a task of some difficulty, and rather than rush into proposals that were defective, the Government decided to hold it over for consultation and consideration, replacing it for this year by the special element subsidy. The answer is that it will be coming into effect after this year.
The noble Baroness also mentioned the point that my noble friend Lord Castle made during the Second Reading debate. I repeat that the Government do not entirely accept the figures that my noble friend put forward. It is extremely diffi-cult—not to say, so far as I am concerned, impossible—to compare the results of the previous subsidy system under the Finance Act with the system under this Bill. The noble Baroness rightly said that the subsidies are complicated. To try to compare the hypothetical results of the old system with the new subsidy system is impossible. During the Second Reading debate I said that although the costs to which my noble friend referred were going up, the subsidies are increasing by a greater percentage. I believe I may have answered all the points put forward by the noble Baroness, but if that should prove not to be the case I shall be happy to write to her.
Clause 4 agreed to.
Schedule 1 [Rents and Subsidies]:
Lord MELCHETT Lord MELCHETT moved Amendment No. 7:
Page 14, line 6, at end insert—
("(2A) Subject to sub-paragraph (2B) below, the Secretary of State shall have power to determine that the whole or any part of any rent under a lease payable by a local authority or a new town corporation and debited to their Housing Revenue Account or housing account shall be treated for the purposes of this paragraph as reckonable expenditure attributable to admissible capital costs.
(2B) The Secretary of State may not make a determination under sub-paragraph (2A)

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above in respect of rent under a lease if a whole year's rent under it was debited to the Housing Revenue Account or housing account for a year previous to the year 1975–76.")
The noble Lord said: The effect or this Amendment is to give the Secretary of State power to subsidise rent as part of the new capital costs element of housing subsidy. The power does not apply to rent under a lease if a whole year's rent under that lease was debited to the Housing Revenue Account or Housing Account before the year 1975–76. Such rent attracts the basic element of housing subsidy; that is, the subsidy paid as it was under the previous Act.
Most land acquired for housing purposes is freehold, but there are occasion-ally circumstances in which land may be acquired for long-term use under a long lease. It is also sometimes convenient for a local authority to acquire property on a short lease ; for example, short-life property to help deal with homelessness. Premiums paid on a grant assignment of a lease of such property attract the new capital costs element of housing subsidy. It is therefore right that rent should also do so.
This is not a new idea. There was, for example, a provision for subsidising leasehold property in Section 19 of the Housing Subsidies Act 1967. A com-parable statutory provision was not included in the Housing Finance Act 1972 but similar arrangements for subsidising leasehold property were made in the administrative arrangements under that Act. It is intended that the Secretary of State should determine how much of the rent under a lease should be reckonable expenditure for the new capital costs element. Where the rent, taken with any premium payment, is within the market value as certified by the district valuer, the whole cost falling on the Housing Revenue Account will normally qualify for subsidy. I beg to move.
Lord MELCHETT Lord MELCHETT moved Amendments Nos. 8 to 16.
Page 16, line 13, after ("authority") insert ("or new town corporation")
line 16, after ("a") insert ("housing")
leave out line 22 and insert ("with a local authority—")
line 34, at end insert ("and agreements with a new town corporation for the
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exercise by the co-operative, on such terms as may be provided in the agreement, of any of the corporation's powers under the New Towns Act 1965 relating to land in which they have a legal estate ")
line 35, leave out ("section") and insert ("paragraph ")
line 40, after ("authorities") insert ("or new town corporations")
line 41, after ("authority") insert ("or any new town corporation or description
line 44, after ("authority") insert ("or new town corporation")
line 46, leave out ("co-operative by the local authority") and insert ("housing co-operative by the local authority or new town corporation").
The noble Lord said: With the leave of the Committee I should like to move Amendments Nos. 8 to 16 en bloc and at the same time to speak to Amendments Nos. 40 and 42. The Amendment at page 16, line 35, is merely a drafting Amendment to correct an inaccurate reference to a " section " of the Schedule.
The remaining Amendments in this batch have two purposes. The first is to enable New Town corporations, as well as local authorities, to transfer property to a co-operative under the terms of paragraph 9 of the Schedule. The new housing subsidy system applies to New Town corporations as well as to local authorities, and the Government are anxious that New Town tenants should be able to enjoy the advantages of these proposals. The second purpose is to identify these co-operatives specifically as housing co-operatives. I beg to move.
Baroness PHILLIPS: I should like to ask—as in similar cases I have asked of other Governments and have not usually had an answer—if this Bill has been through another place (and I assume that that is the case for it is not identified as a House of Lords Bill), why nobody has spotted this before: or, is it a change of policy?
Lord MELCHETT: In contrast to the situation on previous occasions, I am happy to be able to give my noble friend Lady Phillips an answer. This reference to co-operatives was inserted late in another place, not because the Government considered it an unimportant provision but because it was a radical departure. Given the fact that the main provision was introduced in another place, it is understandable that some tidying up was necessary.
Lord LEATHERLAND: It may be that, during the last two weeks, the other place has been very busily engaged with very controversial questions.
5.52 p.m.
Lord MELCHETT Lord MELCHETT moved Amendment No. 17:
Page 19, line 25, leave out from "The" to end of line 28 and insert " regulations may authorise a local authority or new town corporation to consult, in connection with the determination of any such question as is mentioned in sub-paragraph (3) above, the president of the panel drawn up under Schedule 5 to the Rent Act 1968 (panels for the constitution of rent assessment committees) for any area in which there is situated a dwelling to which the determination will relate.
The regulations may also—

(a) authorise the local authority or new town corporation, in the case of the president's absence or incapacity, to consult the vice-president or, as the case may be, one of the vice-presidents of the panel ; and

(b) authorise the president or any such vice-president to consult, with regard to any matter submitted to him by an authority or corporation in pursuance of the regulations, any of the panel's other members and any of the panel's staff."

The noble Lord said: In moving this Amendment I should like to speak to Amendment No. 41 at the same time.
Lord DRUMALBYN: I wonder whether the noble Lord, Lord Melchett, would mind not going quite so quickly as it is a little difficult to follow him at this speed.
Lord MELCHETT: I am sorry. I was taking the previous Amendments, which were drafting Amendments, rather quickly because I know that the noble Baroness, Lady Young, does not wish to stay here all night and I share that view. These Amendments relate to the contents of the regulations which the Secretary of State may make under paragraph 15 of Schedule 1 to deal with the granting of rent refunds by local authorities and new town corporations where there is neither a first report nor a final determination by a rents scrutiny board.
Paragraph 15(4) as at present drafted proceeds on the basis that,
"a person or authority other than the local authority or new town corporation",
may be empowered by the regulations to determine a person's entitlement to a refund and the amount of any such
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refund. We envisaged that in certain circumstances, where the local authority or New Town Corporation considered that it could not reach a decision on a refund, they could refer the matter for a decision by the president of the rent assessment panel for the area. On further consideration we now think it would be preferable for the final responsibility for all decisions on refunds to remain with the local authority or New Town Corporation, while enabling the president of the rent assessment panel to be consulted. The first part of Amendment No. 17 provides accordingly.
The inserted paragraph 4A extends this provision by making it possible for the vice-president or, as the case may be, one of the vice-presidents of the panel, to be consulted in the absence or incapacity of the president; it also makes it possible in turn for the president or vice- president concerned to consult any of the other members of the panel or any of the staff.
Amendment No. 41 merely enables the members of the rent assessment panels to receive remuneration and allowances for any work arising out of the granting of refunds, and for panel staff to be employed on this work. It is not a question of employing additional staff, but merely of ensuring that existing staff can undertake this work. I beg to move.
Baroness YOUNG: I should like to thank the noble Lord for his explanation of this Amendment. To make quite sure that I have understood the point, may I ask whether it applies only to an authority whose rents have reached fair rent level and which may presumably wish to reduce the rent and the amount of refund? Is that the situation where it is envisaged that this would apply? If not, will the noble Lord tell me what is the situation to which it would apply?
Lord MELCHETT: This is a complicated matter, but I understand that under the Housing Finance Act all local authorities were compelled to charge fair rents, and that was done before the rent assessment panels had reached any conclusions as to what the fair rent assessment for the area might be. We are saying that in those areas where the rent assessment board either fixed, or would have fixed fair rents below the levels of

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rents being charged to tenants those tenants should have refunds. It is not a question of taking only the authorities where the rent assessments boards have come to a conclusion, but of looking at what the fair rents would have been if fixed by the board and saying that if the local authority tenants are charged more they should have refunds. I think the Government view is that this would not apply in many cases.
Baroness YOUNG: I am grateful for that explanation. Was the noble Lord saying that some local authorities would have rent levels above a fair rent level and only in such cases would there be provision for a refund?
Lord MELCHETT: I think I am right in that, but, if I am not, I shall write to the noble Baroness. I think that is the situation.
Lord MELCHETT Lord MELCHETT moved Amendment No. 18:
Page 21, line 14, at end insert "and an order which provides for the application of paragraph 9 above to any such association may provide that paragraph 22 above shall have effect in relation to the association subject to such exceptions and modifications as may be prescribed."
The noble Lord said: This Amendment is concerned with a housing association to which paragraph 23 of Schedule 1 to the Bill applies. In practice the only such association is the North Eastern Housing Association. The Amendment covers the provision which may be necessary to deal with rents in any case where the North Eastern Housing Association transfers property to a housing property. This has also been introduced rather late, as deals with housing co-operatives.
As the Bill is at present drafted, the rents for houses belonging to the North Eastern Housing Association are to be fixed by the local authority for the area in which the houses are situated. In fixing these rents they will be subject to the same requirements and limitations as apply when they fix rents for their own houses. In addition, the association are under a duty to charge the rent fixed by the local authority. In the event of North Eastern Housing Association houses being transferred to a co-operative, this situation would need to be modified. Tenants would remain within the reasonable rent system,
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but the rent-fixing formula would need to accommodate the arrangements which were reached between the North Eastern Housing Association and any co-operative, and be embodied in an agreement approved by the Secretary of State. It would also be necessary to relax the duty on the housing association to charge the rent fixed by the local authority, since the actual charging of the rent would be done by the co-operative. I beg to move.
Schedule 1, as amended, agreed to.
Clauses 5 to 7 agreed to.
5.58 p.m.
Lord MELCHETT Lord MELCHETT moved Amendment No. 19:
After Clause 7 insert the following new clause:
Eligibility for housing association grant and revenue deficit grant
". The fact that a housing association is a society registered under the Industrial and Provident Societies Act 1965 and that its rules restrict membership to persons who are tenants or prospective tenants of the association and preclude the grant or assignment of tenancies to persons other than members shall not render it ineligible for housing association grant under section 29 of the Housing Act 1974 or for revenue deficit grant under section 32 of that Act."
The noble Lord said: Once again if I may I shall speak to two other Amendments while moving Amendment No. 19. Those Amendments are Nos. 53 and 57. The effect of the new clause is to remove certain restrictions imposed by Section 29 and 32 of the Housing Act 1974 on the payment of grants to housing associations registered with the Housing Corporation. These restrictions prevent grants being paid to those associations, defined in Section 18(l)(b) of the Act, which have full mutuality between tenants and members. This means that their rules restrict membership to people who are tenants or prospective tenants of the association, and preclude the grant or assignment of tenancies to people other than members. Amendment No. 53 makes two minor consequential Amendments in Schedule 6, which remove the references to Section 18(1)(b) from Sections 29 and 32 of the Housing Act 1974, and the Long Title of the Bill is amended (Amendment No. 57) to take into account the contents of the new clause.
The new clause is essentially a parallel piece of legislation to the Amendments already introduced in Schedule 1, which for the first time provide statutorily for co-operative housing. Hitherto local authorities have been unable to make agreements providing for the transfer of functions to a co-operative without the loss of housing subsidy. Schedule 1 now changes this so that co-operatives are for the first time feasible within the local authority sector.
The Government are very keen to encourage the growth of co-operative housing in this country, because there is a real need to bridge the gap between the status of owner occupiers and that of tenants, and to involve people more actively in the decisions which affect the running of their homes. I do not want to return to old battles, but I think this belies what the noble Baroness said earlier about this Government forcing everyone who is not an owner occupier to live in a rented council house.
This new clause will ensure that co-operative housing is not confined to the local authority sector. Some of the most important initiatives in co-operative housing are likely to come from the housing association movement, which is in a particularly good position to sponsor new co-operative schemes and also, in appropriate cases, to transfer existing housing to co-operatives. The purpose of this new clause is to put co-operatives sponsored by the housing association movement in substantially the same position as those sponsored by local authorities. As a result, the co-operative housing movement in this country will be able to go ahead on a wide and balanced basis. The need for the new clause stems from the terms of Sections 29 and 32 of the Housing Act 1974, under which housing associations with full mutuality between tenants and owners are not eligible for housing association grant or revenue deficit Such associations are also excluded from fair rent controls.
The purpose of these restrictions was originally to prevent the payment of grant to co-ownership housing societies, which are already subsidised through option mortgage subsidy or individual tax relief. But the definition used to achieve this also prevents these grants being paid to
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other co-operatives whose constitution involves a full mutuality of tenants and members. The Working Party on Co-operative Housing, set up by my honourable friend the Minister for Housing and Construction under the chairmanship of Mr. Harold Campbell, will shortly be producing its first report, and the removal of this impediment to the payment of grants to co-operatives will leave the Minister free to consider the Working Party's recommendations. In a later report, the Working Party will also be dealing with the future of co-ownership schemes, and other forms of tenure in which tenants are given an individual financial stake in the equity of their homes. The new clause will open the way for the Working Party and the Government to consider in due course whether it would be right to grant-aid such schemes.
The new clause covers both housing association grant, which meets the deficit on a new project, and also revenue deficit grant which is designed to deal with overall losses arising from more general factors outside the control of a registered housing association. The new clause makes co-operatives eligible for both forms of grant, because even though such an association would be free to charge more than fair rents in order to cover rises in costs, we must be able in extreme cases to help where costs arise which clearly cannot be met by the co-operative. Of course the co-operatives which we are grant-aiding in this way must be housing associations registered with the Housing Corporation, and thus subject to all the controls (for instance, on disposal of assets) included in the Housing Act 1974. I beg to move.
Lord HYLTON: The voluntary housing movement greatly welcome these Amendments and they are very grateful to the Government for the care which has been taken to work out appropriate arrangements for co-operative schemes.
Baroness YOUNG: I, too, want to thank the noble Lord, Lord Melchett, so that he does not think I am constantly critical. In respect of the other housing Act, I raised with the Government the question of co-operatives and co-owner-ship, to which the noble Lord referred. As I understand the provisions of Schedule 2, they are entirely concerned with

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grant-aid—not the details of the co-operative proposals which we shall look forward to seeing and possibly debating at a later date when the Government have reached their conclusions on the Working Party's report. Just to clarify this point, may I ask the noble Lord to confirm that what the Government are proposing is that co-operative housing societies, which I think were introduced during the Report stage in another place, will be eligible for grant, as are other housing schemes under the auspices of the Housing Corporation.
Lord MELCHETT: Yes, that is the position.
Baroness PHILLIPS: I should like to raise a small point, and perhaps some of your Lordships may know the answer to it. What is "mutuality"?
Lord MELCHETT: As I understand it, a housing scheme to which "mutuality"—which I find an impossible word to pronounce—applies is one where all members of the scheme are either tenants or prospective tenants. In other words, it refers to people who are either living in the houses or are just about to do so.
Clause 8 agreed to.
Schedule 2 [Phasing of rent increases]:
6.3 p.m.
The Earl of KINNOULL The Earl of KINNOULL moved Amendment No. 20:
Page 22, line 8, leave out " £0·40 " and insert " £0·50 ".
The noble Earl said: I think the Committee will accept this Amendment as one of the simplest in the Marshalled List, and I suspect that is why my noble friend Lady Young asked me to move it. Schedule 2 contains a rather complicated formula for phasing rent increases, but this Amendment deals with the part of the Schedule which comes under the heading Interpretation. In fact, this interpretation is an amendment to Schedule 6 of the 1972 Act, which set out the phasing arrangements, and under Schedule 6 to that Act, a 50p minimum was set.
This Amendment was discussed in another place, and I do not wish to go over old ground. However, I am advised that the Government's reply then needs a little further investigation. I understand
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that under the 1972 Act the 50p was a mandatory figure for the private sector, but a minimum figure for the private sector. So although the 1972 Act is very complicated and hard to understand, everyone appreciates that in a phased rental increase the minimum is 50p. It is somewhat confusing suddenly to find that the minimum increase is now going down to 40p, and is particularly hard to understand in view of the present rate of inflation. I further understand that the 40p really derives from the 1969 Act, when the phased minimum increase was 7s. 6d. I hope the Government will be able to reconsider this simple Amendment, and allow the figure of 50p to replace the 40p which is proposed in the Bill. I beg to move.
Lord MELCHETT: These Amendments would have the effect of increasing the minimum rent increase (where the registered rent exceeds the previous rent limit by at least this amount) from 40p per week to 50p. The minimum rent increase allowed by the Housing Act 1969 and the Rent (Control of Increase) Act 1969 was 37½p, and we see no reason for building the effects of inflation into the Bill to any greater extent than by rounding up this amount to 40p. The present Government were of course opposed to the automatic rent increase of 50p which the Housing Finance Act imposed in the public sector, and we could hardly be expected to accept a 50p minimum increase in the private sector.
The Earl of KINNOULL: I am afraid that that is a very unsatisfactory reply. With respect, the equation with the Act of 1969 is quite inconceivable when dealing with inflation as it now is. I am not sure whether my noble friend would wish to speak on this Amendment, but I would ask the noble Lord to look again at it, because with an increase of, say, £1·40 the minimum first phase increase would be 50p if this Amendment were accepted. If the increase was £1·60, the first phase would again be 50p, so it would not go beyond that figure. This seems to me rather unsatisfactory, and I am afraid I do not quite understand the noble Lord's argument bringing in the 1969 Act, when one really has to look at the 1972 Act.
Lord MELCHETT: All we are talking about is the limit at which phasing starts, and I do not agree that if the Amendment

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were accepted no rent would be increased by more than 50p, whereas under the Bill's proposals it would be 40p. That is merely the level at which phasing starts to bite. Increases beyond that level will be phased in accordance with the provisions of the Bill, so there is no question of the eventual rent increase not taking into account inflation and its effects, which I agree with the noble Earl has been particularly bad during the last few years. All we are doing is restricting the level at which the phasing starts to bite to 40p. The rent increase will be recovered by the landlord in the long run, but it will merely take a year or two to get it, depending on the amount of the increase.
Baroness YOUNG: That may very well be, as the noble Lord, Lord Melchett, says, but surely the point is that fair rents, instead of being introduced when they are registered, will now be phased. As I understand it, they will take two years to come into force. This in itself is a departure from the previous method of registering fair rents, and, of course, it makes it just that much more difficult for the private landlord to be able to recoup any of the losses he might have on any of the essential repairs or redecorations he feels he has to do. This Amendment does not go against the principle of phasing, which we on this side of the Committee do not like as a principle, but at least it makes a more realistic minimum start—the 50p rather than the 40p. Now that we understand that the 40p is based on the 1969 Act, we can say it is ludicrously out of date in 1975. [ think that from the point of view of understanding for the tenant, and a degree of fairness for the landlord, this was an Amendment that the Government might have considered was reasonable in that it is not going against their principle but instituting fairness as between landlord and tenant at the early stages of phasing.
Baroness ELLIOT of HARWOOD:May I ask a question about a point on which I am not quite clear? Under this arrangement the council could put up their rent by 50p or 70p, or anything they liked, as I understand it, and this provision is simply a restriction on the private landlord.
Lord MELCHETT: Let us get this straight. The council under the pro-visions of the Bill will be allowed to charge only reasonable rents. It will be up to any tenant to take a council to court if he feels that the council are not charging reasonable rents. So it is not true to say that a council can raise rents to any level they want.
Baroness ELLIOT of HARWOOD: I am sorry that I used a rather loose phrase. What the Government are doing in this Bill is to make it far harder for the private landlord, who may well want to carry out repairs and bring houses up-to-date, and so on. He has to do so under local authority statutory rules. They can come along and say: "We want you to instal a lavatory", or a bathroom, or whatever it is. To do that today costs a great deal of money—about three or four times what it cost in 1969. The private landlord will then be able to recoup on the basis of only 40p a week. Is that the situation?
Lord MELCHETT: No; there is a misunderstanding here and rather more has been made out of this Amendment than is justified. All that the 40p and 50p argument is concerned with is the limit at which phasing starts. Under the Bill as it stands, if a rent increase is below 40p it is allowable upon the coming into force. After that level, phasing starts to bite, and then there are extremely complicated provisions on phasing, about which I shall be happy to write to any noble Lord but to which I should prefer not to commit myself at this point. That is what we are talking about—the stage at which phasing starts. There is no question of landlords not being able to recoup a fair rent or of not being able to carry out repairs. It is merely that this Government are deter-mined to ensure that tenants are not faced with unacceptably large increases in rent, and the rent is to go up only once a year.
The Earl of KINNOULL: I am afraid that I am not satisfied with the noble Lord's answer. There is another practical point. An enormous number of forms have been printed, I believe literally millions, with " 50p " on them. All these forms will have to be reprinted or abandoned and new forms will have

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to be provided stipulating " 40p". This is not a simple Amendment which can be dismissed lightly. I myself would not be inclined to withdraw it.
Lord MELCHETT: I was not aware of "50p" being printed on a large number of forms as applied to the private sector. I shall certainly undertake to look at the point and to write to the noble Earl about it.
The Earl of KINNOULL: I am grateful for that assurance.
Lord MELCHETT: Perhaps the noble Earl will make it clear whether or not he is withdrawing the Amendment..
The Earl of KINNOULL: I thought I told the Committee that I did not see that one should withdraw the Amendment. It can of course be negatived, but I am suggesting to my noble friend, if she agrees, that we do not withdraw the Amendment.
On Question, Amendment negatived.
The DEPUTY CHAIRMAN of COMMITTEES (Lord Strang): If Amendment No. 21 is agreed to, I shall not be able to call Amendment No. 22
Lord MELCHETT: Amendment No. 21 is a purely drafting Amendment. Some doubt has been expressed as to whether it was absolutely clear that the "specified sum" in the second year of a period of delay during which a rent is being placed was 40p plus 40p, that is 80p. The revised wording makes this absolutely clear. I beg to move.
Amendment moved—
Page 22, line 10, leave out "a further £0·40" and insert "£0·80 per week".—(Lord Melchett.)
6.17 p.m.
The Earl of KINNOULL The Earl of KINNOULL moved Amendment No. 23:
Page 22, line 13, after ("above,") insert ("the first year of").
The noble Earl said: I again rise to discuss this complicated phasing arrangement. I think that these two Amendments, Nos. 23 and 24, could by leave of the Committee be taken together. It is perhaps easier to explain these Amendments by giving two examples. Under
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the Bill as it stands where a rent was registered in, say, April 1974 the first phased increase of that registered rent would not operate until a year after the passing of the Bill, which we might assume is 31st March of this year. Thus we see that the first phase would not operate until the 31st March 1976. We then should have to wait another twelve months, until 1977, before the second phase would come into operation. By this time the registered rent, which had been registered, one recalls, in April 1974, would of course have expired ; and there-fore the rental increases would never catch up. This matter is pertinent to the last amendment which we did not withdraw.
The amendments we put down try to alleviate this position. One understands the problems that arise with phasing, such as the problem of causing the tenant unnecessary financial hardship by having phasing which is too frequent. What we propose in these amendments is simply that there should be an arrangement whereby, if we take again this example of a rent having been registered in April 1974, the latest the first phase of the registered rent could occur would be 12 months from that date or six months from the passing of the Bill ; and of course in that case it would be a six-months period. I think that that is reason-able. It would allow the landlord at least to catch up under this phasing ; otherwise he will not. I hope that the noble Lord will be sympathetic to the purpose of this amendment.
Lord MELCHETT: The effect of these amendments would be to accelerate the phasing process for rents registered during the standstill period. As I understand if, the amendments are designed to allow landlords who have been prevented from recovering increases of rent during the standstill period to recover two of what would otherwise be annual instalments in the first year after the end of the freeze. The second year of the period of delay in these cases would commence either on the anniversary of the date of the registration of the rent or six months after the coming into force of the Bill, whichever is the later. A tenant would therefore pay the second increase at some point not less than six months after the first instalment becomes recoverable.

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The Amendment would of course put tenants who have had rents registered during the freeze at a disadvantage com-pared with those tenants who have rents registered after the ending of the freeze, in that the former would be faced with paying two rent increases in a single year. It is, of course, true that where rents were registered during the freeze, land-lords' attainment of the full fair rent will be delayed for up to 12 months beyond the date at which it would have been reached if phasing had been in operation when the rents were registered. How-ever, it will only be delayed; it will not prevent landlords from reaching the fair rent level at the end of the phasing process.
The Earl of KINNOULL: If I may interrupt the noble Lord, that is the crunch of this Amendment. What one is saying in practice is that in a number of cases the phasing will never be reached because the new rent register will have occurred by then. Could the noble Lord answer me on that point?
Lord MELCHETT: I think I can. If a rent is re-registered during the period of phasing, what will happen is that the phasing will start as from the level which has been reached at the date of the new registration. Phasing will then apply to the difference between that rent and the new registered rent. Therefore there will be no question of the new fair rent not being reached. All that will happen is that the increase in rent that has already taken place under phasing will be taken as the base level. If the increase is subject to phasing beyond that, phasing will then come into force ; and as the rent will be re-registered within a period of three years, phasing, whatever the size of the increase, will have brought the rent up to the fair rent level within three years. There is absolutely no question of the landlord's being deprived of the fair rent in the long run and there is no chance, as I think the noble Earl has suggested, of this going on and on and the fair rent never being reached. I hope that will clear up the matter and that the noble Earl will see fit to withdraw his Amendment.
The Earl of KINNOULL: I appreciate that this is a complicated affair. I do not want to hold up the Committee but
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I still have not quite got the point. If we take a rent which was registered in April 1974 at £8, and if, say, by 1977 we have reached Phase 2 of the phasing increase and the landlord has reached only £6 and the new rent register makes the then market fair rent £9, at what point in 1977 will the landlord revert to £9, or will it be phased on the £6?
Lord MELCHETT: I am finding the noble Earl's figures very difficult to follow. However, my understanding is that an increase in rent of £8 is suggested over the figure of the rent actually being charged in April 1974, but that by 1977 we have got only to £6. For the sake of argument, I agree that that may be possible, but I cannot work it out in my head. The rent is then re-registered. From the rent, whatever it is, plus £6, the phasing would then start, so that by the date of the next registration, which would be three years after 1977, the fair rent, however large an increase was involved, would have been reached. May I say that if I have got any of this wrong I will write to the noble Earl before the next stage.
The Earl of KINNOULL: I agree with the noble Lord that perhaps it would be simpler if we dealt with this by correspondence before the next stage. I am sure that the noble Lord gave his explanation with great clarity, but I am still puzzled. With the permission of my noble friend I will withdraw this Amendment. I beg leave to withdraw it.
Amendment, by leave, withdrawn.
The Earl of KINNOULL The Earl of KINNOULL moved Amendment No. 25A:
Page 22, line 35, leave out ("not less than 5 per cent.") and insert ("not less than £26 per annum or 10 per cent., whichever is the greater,").
The noble Earl said: As the noble Lord knows, this Amendment deals with the service element of the registered rent. Again it is somewhat complicated. As the Government will appreciate, the ser-vice element in registered rents can vary enormously, depending upon what services are provided within that rent. It can go from one end, where only the lighting of perhaps the common parts in a block of flats is included, to the other end where hot water, central heating and so on are included. Under the Bill, a

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new and highly complicated calculation table has been framed which I think terrorises many landlords. As we see it, under the Bill many of the registered rents with service elements will be incorporated in this new calculation. The purpose of this Amendment, which has been drafted with the assistance of professional advisers who are concerned from day to day with this very work, is to try to make simpler the working of this part of the Bill.
The practical advice which I have received is that the major concern in service element issues is where the service element is substantial. If one takes the case of service flats where hot water, central heating and so on are supplied, it is within the knowledge of a number of valuers that the service element will exceed 15 per cent. of the rent. Under the present drafting of the Bill, it seems that the Government are aiming to catch all the multi-occupation lettings where the landlord perhaps provides no more than the cleaning and lighting of the common parts. This Amendment is meant to be a helpful element and I hope that the noble Lord will view it in that light. It is designed to provide exemption where the service element is worth not less than ten shillings a week, or 10 per cent. I beg to move.
Lord MELCHETT: The purpose of this Amendment is to raise the minimum percentage amount for service cost increases which are to be exempted from phasing from 5 per cent. to 10 per cent., this having been the percentage used in the Rent (Control of Increases) Act 1969, and to add to it a minimum monetary amount so that increases in the cost of providing services may be exempted from phasing only if service charges exceed both 10 per cent. and, as I understand it, the monetary minimum of £26.
The Government are opposed to this Amendment because we think it is unfair to landlords. The effect of the Amendment would be that where services amounted to less than £26 a year, or 10 per cent. of the rent increases which arise from increases in the cost of pro-viding the services, they would not be exempt from phasing. We agree that there should be a point below which ser-vice costs should be disregarded for the purposes of exemption of increases
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in them from phasing, and we have fixed this at 5 per cent. of the rent, with no monetary minimum. We must remember that this Bill introduces permanent phasing, that the provision of services involves continuing expenditure at current costs, and that some of the costs which have been involved in providing services have recently risen steeply and may do so again. Denying the landlord the right to recover at their current level service costs which he is having to meet and which have increased since the rent was last fixed is, in our view, acceptable only where the total of the service charges is so small a percentage of the whole rent that we can expect the service cost increases to be absorbed within the first stage of the phased rent increase. This can reasonably be expected with a percentage minimum of 5 per cent. of the total rent ; with a minimum of 10 per cent., or of £26, it cannot. To make such a change might make life easier for rent officers and rent assessment committees, but the Government consider that it would be unfair to landlords pro-viding a small number of services, who may be the smallest private landlords, and that it would discriminate against them. Therefore I must resist this Amendment.
The Earl of KINNOULL: I am grateful for that reply. 1 hope that the noble Lord will accept that if the main cases are unfair to landlords it shows that the Opposition has a great heart for tenants as well as for landlords. Before I ask leave to withdraw this Amendment, may I ask whether the Government have consulted the professional institutions, or the rent officers, or whoever the people are who are involved in the day-to-day work? I ask that only because the Amendment was drawn up from this source, the professional bodies, and I would be loath to beg leave to withdraw my Amendment if no consultation had taken place.
Lord MELCHETT: I am afraid I am unaware whether or not any consultation took place on this particular point. I imagine that the answer is, " no ", but if the noble Earl would like me to, I will write to him on this matter before we reach the next stage of the Bill.
The Earl of KINNOULL: While I am grateful to the noble Lord for that

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reply, I imagine the answer is that no consultation has taken place.
Lord MELCHETT: Perhaps it would be better if I said at this stage that I just do not know and I will write to the noble Earl before the next stage.
The Earl of KINNOULL: With that assurance, I beg leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
Schedule 2, as amended, agreed to.
Clause 9 [Certain amenities to be disregarded in determining fair rent]:
The Earl of KINNOULL The Earl of KINNOULL moved Amendment No. 26:
Page 7, line 7, leave out ("paragraph") and insert ("paragraphs").
The noble Earl said: This Amendment brings the Committee to a new clause which was inserted into the Bill at Third Reading in another place. The purpose of the clause was to add yet another aspect to the problems that face valuers and, indeed, rent officers; that is, how one values scarcity value from a fair rent. One understands that the purpose of the clause was to try to take into account deterioration and, indeed, one particular case was put forward in another place. I think the purpose of the Amendment is fairly simple to under-stand. It is simply to allow valuers to take into account that if the amenities of an area have gone down through no fault of the owner of that property, this will be taken into account when fixing a fair rent. I beg to move.
Lord MELCHETT: As the noble Earl, Lord Kinnoull, has said, the object of this Amendment is to add any deterioration in general amenity to the matters that rent officers and rent assessment committees are to disregard in assessing a fair rent. This would be as well as improvements in neighbourhood amenities now required by Clause 9 to be disregarded. I would imagine that the addition has been moved on grounds of equity. If landlords are not to benefit from improvements to which they have not contributed, neither should they suffer for deterioration for which they are not to blame. However, it is not quite as simple as indicated by the noble Earl when introducing this Amendment. The
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Amendment is defective in that—unlike the disregard of improvement provision— it does not require that what is to be disregarded is deterioration since the material date. Hence, rent officers would be required to disregard deteriorations leading indefinitely into the past. I know the noble Earl is concerned to make things a little easier for the professional people involved, but I think the Amendment as it stands gives those professional bodies a quite impossible task. Of course this may be an oversight.
As to the principle behind the Amendment, it is open to question whether deterioration of amenities is, in general, likely to be as identifiable for disregard purposes as provision for improvement of them. Even where an identifiable amenity disappears—for instance, when an open space is built over—its loss is frequently balanced by the provision of some other benefit, such as improved public services to the area. Here again, the noble Earl may be claiming he is doing one thing and yet end up doing quite another. While I accept that the clause as it stands will not be all that easy to interpret, I think the noble Earl will accept that his Amendment will make life a lot more difficult for the people involved in making these assessments. On those grounds perhaps the noble Earl would like to consider withdrawing his Amendment.
Baroness YOUNG: Before the noble Earl, Lord Kinnoull, does consider with-drawing his Amendment, I appreciate that the Amendment may not be correctly drafted. This is always the fate of anyone who is not a lawyer and not a Parliamentary draftsman, who attempts to draft an Amendment. But I wonder whether the Government would consider looking at this. We on this side of the House are not very keen on Clause 9, which was added on the Report stage in another place. Its effect is that if there is a new amenity next to a house—a playground, or whatever it may be—that has not been put there by the landlord, but by the local authority or some other organisation, this shall be discounted. Therefore, it is bound to have an effect on what could have been the fair rent which is bound by the terms of the fair rent provision to take into account the character of the locality.
Of course, this is altering the basis of the calculation of fair rent. I should have

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thought in equity that if one is going to agree to this—and we are not going to oppose the principle of the clause at all —it is only fair that if the area does deteriorate this, too, should surely be taken into account. We can all think of instances where, through no fault at all of the landlord, there has been some deterioration in the amenities of the area ; it may well be road-building or alternatively demolition of a lot of property and an empty site remaining for years. This is what the Amendment is asking. I do hope the Government will consider it.
Lord BURNHAM: May I just say that these cases can arise. In particular, I have in mind provision by local authorities of gypsy sites, which can remarkably reduce the amenities of an area. It seems that if there is any concept of fairness in the Bill, it would be grossly unfair to the landlord that his return should be affected by an action which he is unable to control.
Lord MELCHETT: Certainly I can-not accept that the provision of permanent sites for gypsies would necessarily or automatically lead to a deterioration of the neighbourhood. That may be the view of some ; certainly it is not my own personal view. I think there is a difficult point here. To many people it seems unfair that tenants living in an area which has gone badly downhill should continue to have to pay a rent fixed when the area was in a quite different state. However, I am prepared to concede that there is an important point of principle raised by the Amendment of the noble Earl, Lord Kinnoull. Should he wish to beg leave to withdraw it now, I would undertake to look at this again before the next stage.
The Earl of KINNOULL: While I am most grateful for that assurance, may I again ask the noble Lord, Lord Melchett, as it is a fairly vital part in assessing the fair rents principle, what consultations have taken place between the Government and the professional bodies? What consultations have taken place with anyone concerned in the day- to-day operations of the fair rent system? I suspect that no consultations at all have taken place, which I think is quite incredible.
Lord MELCHETT: I do not want to push the point because, as the noble Baroness, Lady Young, said, it is unfair
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to pick on technicalities. But leaving aside the technical deficiencies in this Amendment, the Amendment of the noble Earl is only going to make life more difficult for the professional bodies. I would ask the noble Earl whether he him-self has asked them about it before putting down his Amendment.
The Earl of KINNOULL: Yes, I did. Within reason, I always consult people before putting down an Amendment, because I do not wish to waste the time of the Committee. Equally I am trying to improve the law. It is unsatisfactory if the Government go ahead with a housing Bill and we find that on large parts of it there was no consultation whatever. I suspect that a great part of this Bill has been framed in this light.
Lord MELCHETT: That is most un-fair. I have not conceded that large chunks of the Bill have been drafted without consultation. I only said that I was not sure of the answer, and that I would write to him. That is as far as he can expect me to go if I do not know the answer. I am being quite honest in saying that.
The Earl of KINNOULL: I am very grateful for that assurance, and am happy to withdraw the Amendment on that undertaking.
Amendment, by leave, withdrawn.
Lord MELCHETT Lord MELCHETT moved Amendment No. 27:
Page 7, line 15, after ("landlord") insert ("or a predecessor in title of the landlord or a superior landlord").
The noble Lord said: This is a technical Amendment. Its purpose is to make clear that improvements in the amenity of a neighbourhood at the expense of a predecessor in title of the landlord or a superior landlord are not to be disregarded in the determination of a fair rent. A predecessor in title is a previous owner of the interest which now belongs to the landlord. If the previous owner spent money on improving the amenities of the neighbourhood, then the present owner should not be denied a rent reflecting this. I beg to move.
6.40 p.m.
On Question, Whether Clause 9, as amended, shall stand part of the Bill?
The Earl of KINNOULL: I wonder whether I could detain the Committee for a brief moment on Clause 9 generally, particularly in view of the kind assurance by noble Lords that before the next stage of the Bill we shall be discussing Clause 9 and the Amendment which I withdrew. I understand that it is felt by a large number of people outside who have day to day experience of the fair rents system, that this clause will have very little effect indeed. If it is the intention of Parliament that it should have an effect, it should be looked at again.
I would draw to the attention of the noble Lord a recent High Court case concerning the American School in St. John's Wood. This American school was built and the pupils were to be exclusively American children. The rent assessment committee considered that the immediate locality was affected by this school and a lot of Americans came to live close to it, so a scarcity value arose. The High Court decided against the rent assessment committee's view, on the ground that the locality was too narrow and that when considering scarcity value one should take a greater area. I think this decision is very pertinent to this clause, and I hope that when one has a chance to discuss this clause one will look again at the drafting.
Lord MELCHETT: According to my memory, I undertook to take away the Amendment of the noble Earl and look at it. I would not like to feel that I necessarily committed myself to having discussions. I undertook to have a look at it and to take advice as to whether the Amendment raises an important point of principle. I am not sure that I entirely follow the point the noble Earl makes, and exactly why he is claiming that Clause 9 will have very little effect. I take the point about the court case, of which I was not aware, that according to the legal definition the area in which scarcity conditions are felt to operate has to be fairly large. But, of course, when we are talking about the deterioration of general amenities, I should have thought it would be understood that a reasonably large area would be affected. I am not an expert on this; I would not know exactly what sort
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of area. But I do not understand why the noble Earl says that Clause 9 will not have any effect at all.
The Earl of KINNOULL: The advice I am given is that the interpretation of Clause 9 would be very difficult to put into practice. When assessing an amenity, whether it be in a new cinema, a public baths or whatever it may be, it would be difficult to know to what degree it should affect the rent.
Lord MELCHETT: That makes me ask the noble Earl why he is compounding the difficulties by introducing a further Amendment. Would he accept that he is compounding the difficulties?
The Earl of KINNOULL: What I would accept is that the whole clause is difficult to interpret. What we were trying to do by the Amendment which was subsequently withdrawn was to make the clause fairer.
Clause 9, as amended, agreed to.
Schedule 3 agreed to.
Clause 10 [Termination of decontrol of tenancies by reference to rateable value] :
On Question, Whether Clause 10 shall stand part of the Bill?
Lord MIDDLETON: I declared to your Lordships such interest as I have in this matter at an earlier stage in your Lordships' House. The case for converting controlled into regulated tenancies seems to us to be overwhelming. This was the firm conclusion of the Francis Committee that was appointed by the Labour Minister of Housing and Local Government in 1969 to review and report on the operation of rent regulation. That Committee recommended that all controlled tenancies should be converted into regulated tenancies without preconditions. They further recommended that the con-version should be effected in stages defined by reference to present rateable values. These recommendations were put into effect by the 1972 Housing Finance Act.
This conversion process started in January 1973 and went on until it was halted by the last Government in March 1974. The £35 to £25 rateable value band was not due for conversion until July

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1974, so that tenancies of properties below a £35 rateable value remained controlled, and Clause 10 will see to it that they continue to remain controlled. This Bill will, of course, still permit conversion on application providing a rent officer is satisfied that the house is up to a certain level of repair and contains the standard amenities. A controlled rent is limited to twice the gross value obtaining in November 1956, plus 12½ per cent. of the cost of any improvements. As your Lordships know, these 1956 gross values were very low indeed, and the Francis Committee had something to say on that. The rent under a regulated tenancy can be agreed between the parties, but it is subject to assessment on a fair rent basis by a rent officer.
The Government's case for arresting the conversion process was put by the noble Lord, Lord Melchett, at Second Reading, as follows:
"… it is quite indefensible that a tenant should pay more than the controlled rent where his dwelling does not have the standard amenities for his exclusive use."
Clause 11 will enable a landlord to recover a rent increase of 12½ per cent. of the cost of repairs and this will pro-vide an incentive to repair and improve. The noble Lord, Lord Melchett, recognised the basic problem when he said— and it could not have been put better:
" We accept, of course, that it is in the interests of the tenant and necessary for the preservation of our older housing stocks that landlords should be encouraged to carry out repairs and improvements, even though they are, for a variety of reasons, unwilling or unable … to improve their properties to the qualifying standard."—[Official Report, 27/1/75; col. 362.]
With this no one could possibly disagree. The point at issue is therefore this. Will it, or will it not, encourage the proper repair and improvement of substandard houses in the lower rateable value bands, if the tenancies of these houses remain controlled and their rents are therefore tied to a wholly out of date scale of rateable values?
When this clause was discussed in Committee last December in another place, Mr. Michael Latham quoted this passage from the Official Report of 10th February 1969:
"Let me remind honourable Members what controlled rents are. They are basically twice the 1939 letting value of the house. They have Hot moved at all since 1957, while costs
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in general, and repair costs in particular, have been steadily moving up."
Lord STRABOLGI: I am sorry to interrupt the noble Lord, but is he quoting from the speech of a Back-Bencher?
Lord MIDDLETON: I believe I am.
Lord STRABOLGI: I am afraid the noble Lord is out of order. He can quote from the other place only from Ministerial speeches.
Lord HENLEY: The noble Lord may well be out of order, but it is perfectly in order for him to make a statement of fact, which is what he was trying to do.
Lord STRABOLGI: I think I am right in saying that the noble Lord, Lord Middleton, was quoting.
Lord MIDDLETON: I was quoting and I beg your Lordships' pardon. I lake the point. May I go on to say that at that time it was pointed out by the noble Lord, Lord Greenwood of Rossendale, that controlled rents are basically twice the 1939 letting value, and they had not moved up. He went on to compare the increase in the rate of male earnings. The noble Lord, Lord Green-wood of Rossendale, who was then a Minister, went on to refer to studies that had been made of landlords. Talking about the studies of landlords, he said:
"I can perhaps summarise them best by saying that they show a range of individual landlords owning one rented dwelling as being between 61 per cent. and 78 per cent. of all landlords. And the proportion of individual landlords who are elderly ranges from 39 per cent. to 63 per cent. In these circumstances it is clear that there are real difficulties for many landlords in the way of getting the necessary repairs done and thenceforward keeping the property in a good state."—[Official Report, Commons, 10/2/1969 ; col. 972.]
I make no apology for quoting, while I am in order to do so, this passage, because it seems particularly apt.
We are then looking at the problem of unimproved properties in the lower rateable value bands and looking largely at those owned by individual landlords, often elderly, who own one rented dwelling. Are we, in 1975, going to get these houses improved by tying the rents to 1939 letting values, even with a concession that we are to hear about in Clause 11? It can be helpful to look at actual

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cases and figures. I have done this in my own county of Yorkshire, where there are houses in urban areas under the £35 rateable value level, the tenancies of which, if this clause remains, will remain controlled.
The 1956 average gross value of these houses is about £14, so the rent limit will be double that, £28 a year ; that works out at about 50p per week. In these same areas one can let a garage without light or water for 75p without any difficulty. On any fair rents basis these houses, where they are lacking part or all the basic amenities, would be valued by the Rent Officer at a rent of about £1·85 to £2 per week. In the rural areas the figures work out at about 40p a week, and on a fair rent basis at about £1·75. If one looks at actual cases I really do not think that this level of fair rent is indefensible, especially with the present system of rent allowances. The difference between controlled rents of 40p to 50p a week and fair rents of £1·65 to £2 a week is not great, but it would do something to encourage individual landlords to get on and do their repairs, and start thinking about bringing their houses up to standard. It is because ridiculously low rent limits have obtained for so long that these landlords have given up hope, with the result that there is now far too much substandard housing.
I turn now to the argument that under Clause 11 a landlord could add 12½ per cent. of the cost of repairs onto the controlled rent and that this would pro-vide sufficient encouragement. I do not think that anyone who is familiar with these matters would disagree that this example of a repair bill is typical for this kind of house. Exterior painting, £60 ; some pointing, £50 ; guttering repairs, £50 ; replacing some tiles, £20 ; rewiring and putting in some points. £120 ; total £300. Now 12½ per cent. of £300 is £37. If a house is in the £35 to £25 rateable value band, its 1956 gross value would be £14. Double that gives a controlled rent of £28 and, if one adds £37, the controlled rent limit would be £65 or £1·25 a week. But a fair rent would be about £2. Furthermore, one could not borrow £300 and allow for repayment at 12½ per cent. Of course 12½ per cent. will do something, but it would be quite inadequate as an incentive.
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The Government's case for inserting Clause 10 does not stand up to scrutiny. Far too many privately rented houses in the lower rateable value bands are falling apart, and it is becoming increasingly difficult to find a private landlord willing to relet. The process of conversion to regulated tenancies, begun in 1973, must be allowed to run its course. I beg to move.
6.56 p.m.
Baroness BIRK: By this Amendment the noble Lord, Lord Middleton, and his colleagues opposite are seeking to frustrate the Government's intention to ensure that no tenancy should become automatically decontrolled at a particular date simply because of its rateable value. Therefore, this Amendment hits at one of the basic principles of the Government's Bill. The noble Lord referred to the Francis Committee. I am glad that on this occasion he did not refer to it in the same way as he did on Second Reading when, unfortunately, I was ill and unable to be here. He referred to it as the Labour Government's own Committee. As he is obviously aware, it was set up by the Labour Government, but Governments do not set up Committees of Inquiry on the basis that they will pre-empt and make a decision on behalf of the Government. It was a very distinguished Committee that was set up, but it was set up as a Committee of Inquiry, and it was up to the Government to accept or reject its recommendations. It did a splendid job and much of its work is reflected in what successive Governments have done since. However, this Government think, on the point in ques-tion—on which the noble Lord has been speaking—that the Francis Committee were misguided.
As the Opposition themselves acknowledge, there can be no significant role in the long term for the private rented sector, which has been steadily declining for years. I think that the noble Lord, Lord Middleton, and his colleagues will agree that, in the White Paper of April 1973, Widen the Choice: The next Step in Housing, the previous Administration showed that they did not believe that the private sector had a significant role for the future. Indeed, the White Paper itself said:
"The privately rented sector continues to decline, and the decline in their number is unlikely to be reversed."

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Ultimately most of the dwellings concerned will come into social ownership, and this also has been accepted. In fact, the Tory Government talked about housing associations and also social ownership.
However, while they remain in the private sector the Government are deter-mined to protect tenants, and particularly those who are least able to help them-selves. Above all, the old and the poor who represent a large part of those who live in controlled dwellings. We are not opposing decontrol absolutely, nor, as I shall demonstrate in a moment, are we disregarding the problems of the landlord. But we appreciate, and we made it quite clear in our Manifesto, that houses without basic amenities will not be taken out of control, and this commitment we shall maintain. We are not prepared to see the automatic change from rent control to rent regulation regardless of the state of repair of the dwellings in question, and regard-less of the amenities provided.
We think it utterly wrong that the tenants—many of them, as I have said, not well able to fend for themselves—should face rent increases perhaps amounting to several hundred per cent. for a dwelling which is without the " standard amenities " as they are called. Let us be clear, standard amenities represent a very basic level and they may be in bad repair. When I say standard amenities, I mean amenities which every home should have—a fixed bath or shower, a wash-hand basin, hot and cold water to supply them, and a W.C. for the sole use of the tenant and his household.
The policies of this Government since coming into Office last March have included concern for the needs of tenants in both private and public sectors. Those who live in controlled tenancies axe a diminishing group, and a very special group, whose needs we believe deserve particular attention. But as I have said, this does not mean that we disregard the problems of landlords. It is not the Government's intention that controlled property should never move into regulation and into the fair rents system. Some, of course, will change because the tenant moves or dies, which is what has been happening over the last 18 years. In others, the tenancy may be converted to regulation if the landlord improves the
1298
dwelling so that it is in good repair and he successfully applies for a qualification certificate. But for the majority of dwellings which will remain controlled we intend to provide additional incentives to maintain these properties in good repair.
The noble Lord mentioned Clause 11, to which we come next. This clause goes further than any previous Government have gone in making it possible for those who repair controlled dwellings, as well as those who improve them, to get a return on their expenditure. We have accepted, partly as a result of representations by Members of the Opposition in another place, that some landlords have put their property into a better state of repair already, in the expectation of general decontrol. So an amendment in my name to Clause 11 offers a significant concession in backdating the new provision, a form of retrospection which I am sure noble Lords opposite will be as pleased about as those on this side of the House.
We also deal in Clause 11, although I will not pre-empt the discussion too far now, with the amount of 12½ per cent. which we will discuss when we reach that clause. We cannot accept that tenants, frequently among the poorest members of our society, should be forced to pay enormous rent increases to landlords who have frequently either acquired the property long ago at a derisory figure, or more recently at a speculative price which reflected little more than the value of the controlled rent, but perhaps with some small addition to reflect the possibility of the windfall gain represented by the ending of the controlled tenancy. I hope that in the light of the changes that we have already accepted, on lines which I believe the Opposition wished, that the noble Lord, Lord Middleton, will realise and appreciate the importance which the Government attach to the principle of Clause 10, and that he will not press its deletion from the Bill.
7.3 p.m.
Baroness YOUNG: I am sure that we are grateful to the noble Baroness, Lady Birk, for setting out the Government's reasons for including this clause in the Bill. But I think she will accept that she has not answered all the points raised by my noble friend Lord Middleton who, I thought, made out an excellent case for

1299
deleting the clause. We have come to accept, as I said earlier in the discussion, that it is the Government's intention that there will be no more private landlords and that they wish to speed up this process as rapidly as possible. Be that as it may, there are still in existence private landlords, and in this clause we find our-selves in what amounts to a circular argument. The fact is that because the rent is so low houses are not repaired. If I understood the noble Baroness, Lady Birk, correctly, she is saying that these houses will eventually be bought by councils and improved. But will they? She knows, as well as I, the restraints on local government expenditure, and, indeed, the circular emanating from her Department specifically asks local authorities to restrain expenditure on housing repairs and maintenance. So how they can be expected to restrain expenditure on repairs and at the same time buy up property and repair it, I do not know.
What is going to happen is that a large number of houses will simply deteriorate until they fall down, something which no one wants to see. It pinpoints a real problem in housing today, one that, to a certain extent, has been helped by improvement grants and by the great efforts of local authorities in certain places. But the fact remains that the number of houses that fall into disrepair and have to be pulled down every year continues at the same time that the housing need is so very marked. We believe that if this clause were removed from the Bill there would be an incentive to convert such houses, and I entirely accept that the five basic amenities are very basic indeed. But surely it is the aim of all of us that the poor houses should be improved. They should have the five basic amenities and should be brought up to a reasonable standard ; and if the private landlord cannot do so when he is getting such an incredibly small amount in rent (and I think it exceedingly unlikely that local authorities will be able to undertake any more repairs and improvements over and above the number of houses they already have) we are left with a problem on our hands. That is the main issue and why we on this side of the House are so concerned.
1300
One reason for not putting up rents was because tenants would not be able to afford a large increase. But of course all these tenants can apply for rent allowances, so there is not the argument that they would be unable to afford an increased rent. Although I realise that the difficulty with rent allowances is that the take-up is very poor, we could surely between us find a way of advertising this aid for those in this particular need who would be affected. That seems to me a much smaller matter. But I hope that, as we are all agreed on the need to improve these poorer houses, we will consider what my noble friend Lord Middleton has said: that the Government will consider this matter very carefully and realise the merit involved on behalf of the cause that we all want to see ; that is, the improvement of poor houses.
The Earl of KINNOULL: Briefly I would support my noble friends Lord Middleton and Lady Young. I have points on two issues which the noble Baroness, Lady Birk, has raised. One concerns the qualification certificate. On many occasions in another place it was said that the Government were not stopping the conversion of controlled tenancies to regulated tenancies because they could always do it through the qualification certificate. As I understand it, the majority of those tenants physically could never have available, not only the standard amenities which we all agree are essential, but those standard amenities for their exclusive use, because so many of these dwellings are not houses ; some are fiats and so on, and physically there would not be the room to provide such amenities. That is my first point.
Secondly, what happens to these tenants under Clause 11? Personally I do not wish to spoil our next Amendment on Clause 11. I am unhappy about what happens under this clause to tenants; there is no rent-conceding control. The landlord can apparently go on repairing properties and charge a percentage on those repairs, and the rent can well go above even a registered rent and nothing can be done. Yet the landlord gets no percentage for improvements, only on repairs. I think that is very unfair on tenants. With those brief words, I support my noble friends.
Lord MIDDLETON: I find the reply of the noble Baroness, Lady Birk, disappointing, and, I am afraid, predictable. With regard to her comments about the private sector being in decline, it is in decline due to this extremely inflexible system of the laws regarding protective tenancies, which are becoming more and more complicated, and which have reigned so long. If a house is in a bad state on conversion, it will be taken into account by the rent officer in fixing a fair rent. As the noble Baroness, Lady Young, has said, if a tenant is badly off and can-not afford even a modest increase, he can take advantage of the national scheme of rent allowances. I welcome the remarks of the noble Baroness, Lady Birk, about back-dating the effect of the 12½ per cent. on repairs under Clause 11. But it does not alter my argument that this 12½ per cent. will not be sufficient to provide enough incentive to repair. If the Government persist in ignoring the advice of the Francis Committee, if the Bill goes through with this clause in, and if noble Lords opposite achieve their declared object of bringing into social ownership all privately rented tenancies, (and they cannot persuade me that this will take anything but a long time) then all they will get will be many rundown slums. I feel very strongly about this and I must press the Amendment.
7.10 p.m.
Baroness BIRK: Before the noble Lord makes his decision I should like to have an opportunity to answer him, as well as the noble Baroness, Lady Young, and the noble Earl, Lord Kinnoull. The question of speeding up the diminution of the private sector is a difficult matter to decide. It is a question of the rate, because it is declining in any case, and the 1974 Act not only gave special money for improvements but also a considerable amount of finance to the housing associations, so that in this area something is being done. I have taken the trouble to try to find out whether, when decontrol took place in 1957 and once landlords were not under the restriction of control, there was a great burst of repairs and improvements to property. From discussions with people in the field—not politicians, but people concerned with housing and social work in various areas and particularly in the London area—I
1302
have found that there is certainly no great evidence to show that as soon as decontrol takes place there is an improvement in the condition of property.
When the noble Baroness referred to rent allowances she said that she knows as well as I do that the take-up is extremely low and that it is not working for the people who need it. Though this is not something that one could blame on any single Government, I sometimes think that when people have to fill up rent rebate or rent allowance forms they seem to need to be some sort of advanced mathematician. In addition, though there is, as the noble Baroness has said and as many of us have said before, the suggestion that we should find ways of encouraging people to do this, I am becoming more and more doubtful about this. I am not sure that this is the right way to go about it and I feel that the way we are going about it in the Bill, where we say that the tenants are there and should stay there as controlled tenants until the property is improved to the extent where it receives a qualification certificate and becomes a regulated tenancy, may be better.
The noble Earl, Lord Kinnoull, asked what would happen if the amenities could not be installed because in some buildings there was not room. I can only say that if there is not room for the amenities and if people cannot receive the amenities to which they would be entitled if they became regulated tenants, they should not be expected to pay what would be an increased rent. Therefore that does not seem to me to be an argument for decontrolling. Frankly, one could go on all night on this question, making points of arithmetic and producing statistics, but all we can throw into the arena can only add up to the basic argument. This is, once again, a basic question of policy, and the Government's policy is, as I said in my first answer to the noble Lord, that these properties should not be decontrolled until they reach the standard which we have already discussed. I shall not there-fore repeat the arguments. It is fundamental to the Government's Bill that the clause should remain in the Bill. I should also point out that one reason why the Bill is being speeded up is in order that the legislation should be completed so that local authorities will be able to get on with their plans, as they are anxious

1303
to do for their own planning and on behalf of their tenants as quickly as possible. If the noble Lord intends to press the Amendment—I hope he does not, and this is why I am intervening at this stage—it would mean a further delay to the Bill, and the responsibility for that delay will rest squarely with the noble Lords opposite.
Resolved in the negative, and Clause 10 disagreed to accordingly.
Clause 11 [Increases of rent under con-trolled tenancy permitted towards costs of repairs] :
7.23 p.m.
The Earl of KINNOULL The Earl of KINNOULL moved Amendment No. 28A:
Page 8, line 4, after ("repairs") insert ("costing not less than £50 in total in any period of twelve months beginning on the previous 1st April")
Lord MIDDLETON: I have no more to say. If the clause remains in the Bill, these houses will not be brought up to standard. I must press the Amendment.
On Question, Whether Clause 10 shall stand part of the Bill?
Their Lordships divided: Contents, 39 ; Not-Contents, 76.

CONTENTS

Bacon, B.

Hall, V.

Peddie, L.

Balogh, L.

Hamnett, L.

Phillips, B.

Beswick, L.

Henderson, L.

Popplewell, L.

Birk, B.

Hoy, L.

Resholme, L.

Blyton, L.

Jacques, L. [Teller.]

Segal, L.

Champion, L.

Janner, L.

Shepherd, L. (L. Privy Seal.)

Cooper of Stockton Heath, L.

Leatherland, L.

Slater, L.

Darwen, L.

Lee of Newton, L.

Stewart of Alvechurch, B.

Douglass of Cleveland, L.

Longford, E.

Strabolgi, L. [Teller.]

Elwyn-Jones, L. (L. Chancellor.)

Lovell-Davis, L.

Taylor of Gryfe, L.

Gaitskell, B.

Maelor, L.

Taylor of Mansfield, L.

Gordon-Walker, L.

Mais, L.

Wilson of Radcliffe, L.

Goronwy-Roberts, L.

Melchett, L.

Winterbottom, L.

NOT-CONTENTS

Aberdare, L.

Essex, E.

Pender, L.

Allerton, L.

Exeter, M.

Penrhyn, L.

Amherst of Hackney, L.

Ferrers, E.

Rankeillour, L.

Arran, E.

Gainford, L.

Redcliffe-Maud, L.

Belstead, L.

Gisborough, L.

Redesdale, L.

Berkeley, B.

Glasgow, E.

St. Aldwyn, E.

Bolton, L.

Goschen, V.

St. Davids, V.

Broadbridge, L.

Gowrie, E.

St. Just, L.

Brougham and Vaux, L.

Greenway, L.

Saint Oswald, L.

Burnham, L.

Hanworth, V.

Sandford, L.

Campbell of Croy, L.

Harmar-Nicholls, L.

Seear, B.

Chelwood, L.

Henley, L.

Selborne, E.

Clifford of Chudleigh, L.

Inglewood, L.

Stamp, L.

Coleraine, L.

Killearn, L.

Strang, L.

Colville of Culross, V.

Kilmarnock, L.

Strathclyde, L.

Cowley, E. [Teller.]

Kindersley, L.

Strathcona and Mount Royal, L.

Crawshaw, L.

Kinnoull, E.

Cromartie, E.

Lindsey and Abingdon, E.

Swaythling, L.

Cullen of Ashbourne, L.

Long, V.

Teviot, L.

Davidson, V.

Lyell, L.

Thorneycroft, L.

Denham, L. [Teller.]

Macleod of Borve, B.

Tranmire, L.

Derwent, L.

Massereene and Ferrard, V.

Trefgarne, L.

Drumalbyn, L.

Middleton, L.

Vivian, L.

Elliot of Harwood, B.

Monck, V.

Windlesham, L.

Elton, L.

Mowbray and Stourton, L.

Young, B.

Emmet of Amberley, B.

Nugent of Guildford, L.

The noble Earl said: I beg to move the Amendment standing in my name, and together with that Amendment I should like to speak to Amendment No. 28B as well. We come on to Clause 11 which the Committee will realise is a new clause and is part of a package of the controlled tenants. The purpose of this Amendment is basically to try to tighten up the clause to benefit the tenant. At the present time, I understand the landlord would be able to claim an increase of rent for every £5 or so he spent on the property. Indeed,

1305
he could claim it, as I understand it, quite frequently and it could even become a form of harassment.
The purpose of the Amendment is clear and the Amendment itself is clear. Its purpose is to put down a minimum repair figure ; namely £50, which would have to be spent within a period of 12 months in order to qualify. Pitching the figure at £50 would ensure that no demand for a rent increase could be less than 12p per week, which one feels is sensible. The second Amendment, which is consequential on the first, is to cover the situation where the cost of repairs is to be apportioned between two or more dwellings. With that brief explanation, I hope that the noble Baroness will look upon these two Amendments with sympathy. I beg to move.
Baroness BIRK: The noble Earl spoke to the two Amendments together and so I will, with the permission of the Commit-tee, reply to both Amendments at the same time. Despite the very lucid explanation by the noble Earl, I still do not find these Amendments very clear. The first Amendment, to subsection (1), would appear to limit the entitlement of a landlord to increase a controlled rent by 12½ per cent. of the cost of repairs to or benefiting the dwelling to cases where at least £50 had been spent on repairs in the year.
The second Amendment repeats the limitation for subsection 3(b), which applies only to cases where the repairs are not to the controlled dwelling but benefit it, in which case the amount on which 12½ per cent. is charged is that proportionate to the benefit to the dwelling. I hope that is right. That is the way I understand it at the moment. Whether it is the noble Earl's intention that the limitation should apply to all entitlements to increase controlled rents in respect of repairs (as the prior Amendment suggests) or only to those coming in the latter group (as the second Amendment suggests), the Amendments are unacceptable in principle.
The Amendments are unacceptable be-cause, in the Government's view, they are unjust to landlords—which makes it all the more astonishing that they should come from the side of the House which is constantly accusing the Government
1306
of a vendetta against private landlords— and could bear very harshly on the poorer landlords. Fifty pounds is a large sum in terms of controlled rents ; the average controlled rent in England and Wales outside Greater London is £42 a year.
It was because we recognised the difficulty landlords faced in keeping dwellings in repair on such rents that we are introducing this right for landlords to increase controlled rents by a percentage of the money they actually spend on repairs to or benefiting controlled dwellings. We cannot agree that this entitlement should be eroded—perhaps actually eliminated for landlords who have no resources other than the rents—by denying it to landlords who do not, perhaps cannot, spend more than a given amount in any period of 12 months. Therefore, I am resisting the Amendment, I must repeat, on behalf of landlords.
The Earl of KINNOULL: It is very healthy that the noble Baroness resists the Amendment on behalf of landlords. That certainly did not seem to be the theme of the argument in Clause 10. I am grateful to the noble Baroness—
Baroness BIRK: I hope that the noble Earl will forgive me, but we cannot let that pass, because we are talking about two entirely different matters. Clause 10, which has now been deleted for the time being from the Bill, gives an entirely wrong slant to the whole situation. These are much simpler Amendments, but we think perhaps the noble Earl's intention is not expressed in them.
The Earl of KINNOULL: I do not wish to press the Amendment; indeed, in a sense it was a probing Amendment to see how the noble Baroness was thinking on this clause. It is after all a new clause, a new concept in housing Bills, and this probing Amendment has been of value. I do not reject the view that £50 is a great sum to spend on a property. Nowadays if one approaches a builder to ask him to repair one's window one finds that there is not much change out of £25. Therefore I fully accept that it is right and proper to pre-serve a fair balance between landlord and tenant. It would not be my wish not to preserve that balance. But I repeat that the purpose of my Amendment was to

1307
consider the situations where a rent increase could be made quite frequently, as I understand it, under the Bill, which could lead to the unhappiness of the tenant. However, in view of the assurance of the noble Baroness, I am quite happy to withdraw the Amendment.
Amendment, by leave, withdrawn.
7.30 p.m.
Baroness BIRK Baroness BIRK moved Amendment No. 30:
Page 8, line 32, leave out ("or") and insert ("unless they were completed on or after 6th April 1973.
( ) This section does not apply to repairs").
The noble Baroness said: This Amendment has been put down following Opposition representations and discussions in another place. It was pointed out that some landlords would have undertaken repairs to their property in anticipation of decontrol under the general programme of decontrol in the Housing Finance Act. It was accepted by my honourable friend that landlords who had repaired their property in this way should be entitled to some recompense for their expenditure. Subject to the introduction of a provision to enable tenants to seek evidence in respect of which the 12½ per cent. increase is claimed, my honourable friend expressed in another place his willingness to make the provision retrospective for one year. In response to further representations from and after correspondence with a spokesman of the Party opposite, the Government have decided that they will accept retrospection to the beginning of the tax year 1973–74, this being a date from which it can reasonably be expected that documentary evidence of the cost of repairs will be available if required. The effect of this Amendment, therefore, is that repairs to property which is let on controlled tenancies which have been completed on or after the 6th April 1973 will come within the 12½ per cent. rent increase provision. I beg to move.
Baroness YOUNG: May I say at once how grateful we are for this Amendment. As the noble Baroness, Lady Birk, has said, it fulfils an undertaking given in another place, and also rights what could have been seen as unfairness to those who had repaired their property
1308
under the 1972 Act expecting it to become a regulated tenancy and now finding that it does not. We are therefore very glad to see this Amendment. May I add one further point? Nothing could be more unfortunate for housing, which is such a serious matter in which I think no political Party has been as successful in its policy as it would have liked to be, to feel that we must necessarily divide on land-lords and tenants. It is certainly not my wish or that of my colleagues that we should line up on one side or the other in this matter. There are faults on both sides. I am glad to be able to say of this Amendment by the noble Baroness, Lady Birk, that the Government have , done something which will help landlords, and we are glad to acknowledge that.
On Question, Amendment agreed to.
Baroness YOUNG Baroness YOUNG moved Amendment No. 31:
Page 9, line 8, leave out ("124½") and insert ("15").
The noble Baroness said: On behalf of my noble friend Lord Kinnoull, I beg to move Amendment No. 31. It is quite a straightforward Amendment and would increase the appropriate amount per annum which could be calculated for expenses from an increase of 12½ per cent. under subsection (3)(a) to 15 per cent. This is a relatively small increase in the amount, but it is designed to help to deal with the problem, which we all acknowledge, of houses which are in a very poor state of repair. No one wishes them to become complete slums or simply to fall down, which has been the fate of some of them, or to be served with notices of unfitness by the local authority. This Amendment is designed to make it easier for landlords to repair the properties, and I hope, because that is its purpose, that the Government will look at it sympathetically.
Lord BURNHAM: In supporting this Amendment I speak with a certain amount of experience of improving controlled houses. Nobody in their senses does so with money borrowed from the bank, because you cannot get money from the bank at 12½ per cent. Therefore there is no incentive whatsoever to improve the houses, because the greater the improvement you carry out the bigger the loss will be.
Baroness BIRK: Clause 11 is in itself a substantial new provision which goes further than any previous Government have gone to help landlords who are public spirited enough to carry out re-pairs to their property. As I said on earlier Amendments on the discussion of Clause 10, there have been further worthwhile concessions which the Opposition certainly ought to welcome. This proposed Amendment is, however, in a rather different category. The figure of 12½ per cent. has, in another but rather similar context so far as improvements are concerned, stood since 1961. The possibility of altering it was discussed in another place. I must remind noble Lords opposite that when we are talking in this context about helping landlords, as we are doing, we are also considering whether what we are doing would be a disadvantage to tenants. I agree with the noble Baroness that one does not want to turn it into a football match, but it is true—and it would be quite wrong of me to pretend that it is not true—that on the whole the predisposition of members of the Party opposite has been for the protection of landlords who, over decades and even centuries, have been in a much better position to fend for themselves than the tenants. Here I am taking a wide historical spread.
A change from 12½ per cent. to 15 per cent. would mean a further burden on those who would be paying. I cannot accept that the cost of borrowing money to do the work should necessarily always be a major factor in deciding the level of rent increases to be allowed. In any event as I think noble Lords know, interest rates at the moment are starting to go down. In answer to the noble Baroness and to the noble Lord, Lord Burnham, may I say that a great deal of repairs done by individual landlords and by companies is not done on borrowed money. They do not all have to borrow money. The impression that has been given when this matter has been argued, not only here but in another place, is that every landlord who has undertaken repairs has had to do it on borrowed money, and this is manifestly untrue.
Nor do I believe that an acceptable case has been made out for replacing the figure by one supposedly reflecting current
1310
interest rates, which may well be temporary and, as I pointed out, are in fact going down. It would not be possible even to get a figure that was fully defensible on these grounds, certainly as interest rates, by their very nature, change. The choice of a rate which is consistent with another similar one has a great deal to recommend it in this situation, and since we have the rate which refers to the improvement grant, my honourable friend would I think at this moment be very reluctant to change it. I suggest that Members opposite should rather count their blessings in this area. We have gone much further so far as repairs are concerned than has ever been put forward before. The House has just accepted a Government Amendment which gives a retrospective date for increases for repairs, and I hope that Members opposite will be satisfied with that. I resist the Amendment.
Baroness YOUNG: I am sorry that the Government should take this attitude to this Amendment. I accept entirely that we are glad that the Government moved Amendment No. 30 and glad to see in Clause 11 some provision for alteration of rent when repairs are done. This entirely meets the point that we all, I think, have been agreed upon: that many houses are going to become completely unfit and, I suspect, ruined before long. I should have thought that this was a completely reasonable suggestion because, although I accept that it would result in an increase of rent for the tenant, I come back to my original point that all tenants can apply for rent allowance. I am sorry to see the example of this exceedingly complicated form on rent allowances; but I have never believed that if the principle was right one should allow administrative complications to stand in the way of implementation. That is an administrative complication ; and I think we should all be glad to see some improvement on it. The beneficiaries of the rent allowance scheme are the tenants.
Baroness BIRK: May I emphasise the point that when I talked about the principle, I meant that we have tried in all areas to encourage people—and over this both the noble Baroness and I are of similar mind ; and Governments of both Parties have done this—to take up the allowances that are their due, whether

1311
they be welfare allowances, the social ser-vice allowances or rent allowances. The complicated form is only part of it. It seems to be against the nature of many people to ask for their dues. The same thing happened when the Government of Members opposite tried to (shall I say?) "flog" the family income supplement. The take-up there was low. One must ask oneself whether this is, in fact, the right way to go about helping people. Simplifying the form is not the answer. Person-ally, I have come to the conclusion that this is probably not the right way. When we are talking about rent, the right way is to have the sort of rent that people can afford to pay and not to have to supplement it by rent allowances.
Baroness YOUNG: I think that this is certainly a point of view ; but, with respect, it is not part of this Bill. The provisions under the Bill assume that the rent allowance scheme continues. We could debate at length the whole question of take-up. I can only say that the answer to the question from my Party's point of view would be in the tax credit scheme which would have helped all these people automatically. What we are concerned with here is getting these proper-ties repaired. I am disappointed with the answer from the noble Baroness. However, I feel that this is not a matter to pursue now and that we may return to it on the Report stage. In the meantime, I beg leave to withdraw my amendment.
Amendment, by leave, withdrawn.
7.43 p.m.
Baroness BIRK Baroness BIRK moved Amendment No. 32:
Page 9, line 18, at end insert—
("(11) If—

(a) the landlord serves a notice of in-crease of rent by virtue of this section, and

(b) the tenant requests him in writing, not later than three months after service of the notice, to supply him with information showing how he has calculated the expenditure on the repairs,

it shall be the landlord's duty, not later than one month after the date of the request, to supply the tenant with copies of such accounts, receipts and other documents as are reasonably necessary for that purpose.
(12) A request under subsection (11) above shall be deemed to be duly made to a land-lord if it is served on any agent of the land-lord named as such in a rent book or other similar document, or on the person who
1312
receives the rent on behalf of the landlord ; and it shall be the duty of a person on whom a request is so served to forward it as soon as may be to the landlord.
(13) If any person without reasonable excuse fails to perform any duty imposed on him by subsection (11) or (12) above, he shall be guilty of an offence and liable on summary conviction to a fine not exceeding £200.").
The noble Baroness said: These new subsections are designed to give the tenant from whom a 12½ per cent. a year increase on account of repairs has been demanded the right to require documentary evidence of the costs on which the increase was calculated. They make it an offence for a landlord or his agent not to comply with his duty to provide this information.
The new subsection (11) provides that if the landlord serves a notice of increase under the 12½ per cent. provision and within three months the tenant requests him in writing to supply him with information showing how he has calculated the expenditure on the repairs, it shall be the landlord's duty, within one month of the request, to supply him with copies of any accounts, receipts and other documents which are necessary for that purpose.
Subsection (12) provides that if a request under subsection (11) is served on an agent of the landlord or on some-one who receives the rent on behalf of the landlord, it shall be deemed to be made to the landlord. It also makes it a duty for anyone on whom such a request is served to forward it to the landlord. Subsection (13) provides that if anyone fails to perform any of the duties laid upon him by subsection (11) or (12) he shall be guilty of an offence, and liable on summary conviction to a fine not exceeding £200. I beg to move.
Baroness YOUNG: With regard to this Amendment, I should like to comment that there is really a great deal to be said for everybody knowing how much repairs cost—particularly in this inflationary time. No doubt for many people it will be an eye-opener to see how expensive even the small repairs can be. If it creates better feeling between landlord and tenant so much the better.
The Earl of KINNOULL: May I ask the noble Baroness whether this £200 fine on summary conviction is in line with fines for similar offences?
Baroness BIRK: Yes, it is. This pro-vision reflects a principle introduced in Section 90 of the Housing Finance Act 1972, which concerns service charges for flats. Section 90 gave the tenant required to pay service charges a right to see documentary evidence of the cost of providing the services. The penalty for failure to comply with the requirement to provide information is the same as in that section.
Lord DRUMALBYN: May I ask the noble Baroness whether the kind of case where the repairs are done by the land-lord's own estate workers is adequately covered by the wording of the clause? Will she be kind enough to look at it?
Baroness BIRK: It sounds like one of these technical points. I should rather be sure that I am right than to make a guess at the moment. I shall look at it.
On Question, Amendment agreed to.
Clause 11, as amended, agreed to.
Schedule 4 [Provisions supplementary to section 11]:
Baroness BIRK Baroness BIRK moved Amendment No. 33:
Page 28, line 6, at end insert—
"4. Where an offence under section 11(13) above which has been committed by a body corporate is proved to have been committed with the consent or connivance of, or to be attributable to any neglect on the part of, a director, manager, secretary or other similar officer of the body corporate, or any person who was purporting to act in any such capacity, he, as well as the body corporate, shall be guilty of that offence and be liable to be proceeded against and punished accordingly.
5. Where the affairs of a body corporate are managed by its members, paragraph 4 above shall apply in relation to the acts and defaults of a member in connection with his functions of management as if he were a director of the body corporate."
The noble Baroness said: This is an Amendment consequential on the second Government Amendment to Clause 11 (tenant's entitlement to evidence of the cost of repairs) to provide for the personal liability of individual directors, et cetera, and officers of corporate bodies which commit offences under Clause 11 of the Bill. These provisions are well precedented. A criminal liability on directors et cetera, of bodies corporate similar to that under paragraph 4 is imposed by Section 35(3) of the Rent Act 1968, which requires a landlord to supply on request
1314
a statement of the contractual rent land under Section 20(3) of that Act, and by subsection (10A) of Section 90 of the Housing Finance Act 1972 (inserted in that Section by Schedule 12 to the Housing Act 1974).
Paragraph 5 follows subsection (10B) of Section 90 of the Act of 1972, which was also inserted in that section by Schedule 12 to the 1974 Act.
On Question, Amendment agreed to.
Schedule 4, as amended, agreed to.
7.50 p.m.
Baroness BIRK Baroness BIRK moved Amendment No. 34:
After Clause 11 insert the following new clause:
" Extension of Part II of Housing Finance Act 1972 to almspeople
. After section 19 of the Housing Finance Act 1972 there shall be inserted the following section: —
' Allowances for almspeople
19A.—(1) Subject to subsection (2) below, it shall be the duty of every local authority, on and after such date as the Secretary of State may by order made by statutory instrument appoint, to treat as private tenants, except to the extent that regulations under subsection (4) below provide to the contrary, persons who occupy as their homes almshouse accommodation in the authority's area, and accordingly to make provision in their allowance scheme for granting them allowances, calculated in accordance with the scheme by reference to their needs and their resources, towards their alms-house contributions.
(2) Section 25 below shall not apply in relation to such persons, and in Schedule 3 to this Act ' rent which is eligible to be met by a rebate or an allowance' means, in relation to such persons, the amount of their almshouse contributions.
(3) Regulations made by the Secretary of State with the consent of the Treasury may provide:

(a) that any enactment contained in this Part of this Act, other than this section and section 25 below, and any instrument made under any such enactment, and

(b) any enactment contained in Schedule 3 or 4 to this Act and any instrument made under either of those Schedules,

shall have effect, so far as the Secretary of State considers appropriate for giving effect to this section, subject to such exceptions or modifications as may be specified in the regulations.
(4) Regulations under subsection (3) above shall be made by statutory instrument and shall be subject to annulment in pursuance of a resolution of either House of Parliament.'".
The noble Baroness said: With the leave of the Committee, I should like also to speak to Amendment No. 44.
This is a new clause and its purpose is to enable persons who occupy almshouse accommodation as their homes to become eligible for allowances under Part II of the Housing Finance Act 1972 towards the contributions they pay. These persons are not eligible at present, because the 1972 Act requires, broadly speaking, that the grant of a rent allowance can be made only to persons who are tenants of the accommodation they occupy as their homes and who also pay rent for that accommodation. Occupants of almshouse accommodation— "almspeople" as they are called, but I would rather use the expression from Trollope, Bedes people—are neither tenants nor do they pay rent as such.
An almsperson is a beneficiary of an almshouse charity and as such he occupies his accommodation as a licensee and not as a tenant. Secondly, he normally makes a "contribution" towards the maintenance of the almshouses of the charity, including essential services therein, and does not pay rent. This contribution is not related directly to the accommodation occupied by the alms-person, but in virtually all cases the con-tribution will not exceed the fair rent level of the accommodation occupied. This is because the Charity Commis-sioners who approve these contributions in practice require consultation with the rent officer first. They approve a maxi-mum contribution up to which the charity may charge. Virtually all existing aims-house accommodation is provided by housing associations who are registered with the Charity Commissioners. How-ever, provision is also being made to include residents of those few almshouses where the charity is not required to be registered with the Charity Commissioners.
In view of rising costs and of contributions, many almspeople may now be at a considerable disadvantage financially as compared with tenants with similar
1316
incomes, paying similar amounts in rent. Of the estimated 25,000 occupants of almshouse accommodation in England or Wales, we estimate that about 5,000 are paying contributions in respect of which they might be eligible to claim allowances under this new clause. The remaining almspeople have lower incomes or resources and so are eligible to receive help towards their rents from supplementary benefit.
Because of the need to adapt the existing legislation for rent allowances to the particular situation of almspeople, who make contributions rather than pay rent, this provision is basically a two-fold enabling power. First, it provides for the Secretary of State to make the necessary adapting regulations. Secondly, it provides for this extension of eligibility for allowances to almspeople to come into force on a date approved by the Secretary of State. This will allow the necessary time to prepare the regulations and lay them before Parliament, where they will be subject to negative resolution. The new clause also provides that the aims-house contribution on which the allowance will be payable does not exceed the maximum contribution approved by the Charity Commissioners. The allowance will be calculated only on the contribution actually paid.
I apologise to noble Lords for the late tabling of this Amendment, but it is an extension which we believe is only right in order to help needy persons with their accommodation costs. Since this extension requires primary legislation, we considered it desirable to seize this opportunity to make the necessary provision since there is no other suitable legislation envisaged this Session. I beg to move.
Baroness YOUNG: I should like to welcome this new clause and its provisions. My noble Lord Crawshaw regretted very much that he could not stay long enough to speak on this Amendment, and told me how pleased he was that it was being moved.
Lord MIDDLETON: As an almshouse trustee I, too, welcome this Amendment. I think it is extremely good.
On Question, Amendment agreed to.
Baroness BIRK Baroness BIRK moved Amendment No. 35:
After Clause 11 insert the following new clause:
Abolition of Central Housing Advisory Committee
". Section 143 of the Housing Act 1957 (provision for appointment and functions of Central Housing Advisory Committee) is repealed, and the Committee shall accordingly cease to exist."
The noble Baroness said: With the leave of the Committee, I also wish to speak to Amendments Nos. 51 and 52. This is another new clause which repeals Section 143 of the Housing Act 1957, which imposes on the Secretary of State for the Environment a duty to appoint a Central Housing Advisory Committee. My right honourable friend the Secretary of State gave careful consideration to the alternative courses by re-constituting the Committee and relying on advice from other bodies outside and this course appeared preferable.
I take the opportunity of placing on record the Government's gratitude to pre-sent and former members of the Commit-tee for the contribution they have made to the formulation of housing policy over many years. The repeals of Section 79 of the Housing Act 1957 and of part of Section 10 of the Chronically Sick and Disabled Persons Act 1970 are consequential on the repeal of Section 143 of the 1957 Act. This was set out in a Written Answer given by my honourable friend the Minister of Housing in another place.
Baroness YOUNG: I do not intend to oppose this Amendment but it gives me an opportunity to thank the noble Baroness, Lady Birk, for the very useful letter she sent to me explaining various Amendments proposed to the Bill. How-ever, I wish to ask her, since the Committee is to be wound up and the Government are clearly going to put their faith in consultation—formal and informal, I understand—whether we could have any assurance that there will be regular consultation with all people involved in housing.
If I may, I will give two examples of where this does not appear to have happened. When we were debating the Rent Act last summer, I specifically asked the Government whether they had discussed that Act with any members of rent tribunals who are, after all, responsible
1318
for operating the fair rent provisions, and I was told that they had not discussed it with them. They had, in fact, called them to London and explained the Bill to them. Also, when my noble friend Lord Kinnoull asked whether rent officers had been consulted about the provisions in Clauses 8 and 9 with regard to alterations of the fair rents, the Government did not know.
I am raising these not as debating points, but as extremely important matters of public policy. If there is one thing we all believe in, I think it is consultation; and government can proceed only by a degree of trust and understanding. I do not believe that consultation means agreement. Many people think that when they consult they will get agreement. They do not, but they should at least have an opportunity to express their professional opinion about these matters. I believe in this very strongly. In the difficulty in which housing finds itself, and the difficulty in which we find ourselves in debating a Bill such as this where the division between the Parties is so great, it is very hard to find any points of agreement and consultation with outside experts then becomes all the more important. It may be that in that way we shall find points of agreement which we would not otherwise find. So that although I do not in any way oppose the new clause, I should like to have a further explanation from the Government of how they see the consultation process being carried out.
Baroness BIRK: Although, as the noble Baroness said, this point is outside the clause, I will tell her briefly that my honourable friend is extremely eager to consult and, in fact, is constantly doing so. It seemed to me that the noble Baroness brought two different strands into this discussion. There is consultation between different bodies concerned with housing, such as Shelter; and there is also consultation, to which the noble Baroness referred, with people who are administering certain Acts. I do not make any judgment on that or say that there should be no consultation, but it seems to me these are two quite different things and should be recognised as such.
There are probably other ingredients as well, because when you are consulting with the people who are administering

1319
something it is necessary to get the facts from them. This is what the Government do, as I understand it, and they have statistics. Consulting with agencies or various voluntary bodies is a different thing. But on the main principle, there is no doubt that consultation is going on all the time and one of the reasons for the winding up of this body was that it was not relevant in the consultative field today. I would make the point that if we think consultation of this sort will bridge the gap between entirely different approaches, that go right across the social, economic and political fields and concern the basic philosophies of political Parties, we are wrong. What consultation can do is help one to work out in the best possible way one's basic policies, and get advice to be able to deal with problems in times of difficulty.
There is certainly a great case for consultation, and I can assure the noble Baroness that the Government are extremely aware of the need for it. Speaking as a Departmental Minister in this Chamber, I would say that I certainly use every opportunity for consultation that is available in the fields in which I am interested.
Baroness YOUNG: I should like to thank the noble Baroness for that reply. I do not believe that consultation will solve political differences, but there are times when consulting people who are involved in administering complicated legislation reveals a number of facts. I do not intend to pursue this point, but I should be grateful if the noble Baroness would perhaps write to me and set out a list of the organisations which are consulted by the Government as a matter of course on housing matters.
Baroness BIRK: I really do not think I can give an undertaking of that sort at this stage. What the noble Baroness is asking me to do is to hand over a whole lot of Departmental material, and I should have to discuss that with my honourable friend in any case. I have given an assurance that we do consult. I will go back and discuss this with my Ministerial colleagues, but I cannot go any further at the moment. Certainly, I will help the noble Baroness as far as I can, but I cannot give a " blanket" under-taking of that sort.
Baroness YOUNG: I should like to thank the noble Baroness for offering to do that.
On Question, Amendment agreed to.
Clauses 12 and 13 agreed to.
Clause 14 [Interpretation]:
8.4 p.m.
The Earl of KINNOULL The Earl of KINNOULL moved Amendment No. 35A:
Page 10, line 16, leave out "18(1)" and insert "38(1)".
The noble Earl said: This is a small, but I hope a cheerful Amendment, because if one looks at the Bill with the care that it has received from these Benches one sees that "Section 18(1)" of the Rent Act 1968, should, in fact, read "Section 38(1)". If one looks at Section 18(1), one finds, rather astonishingly, that the section refers to a court making an order for possession, which has nothing to do with the contractual period. I hope that with that explanation the noble Baroness's hard Ministerial approach may soften for one moment, and that she will be able to accept this Amendment. I beg to move.
Lord MELCHETT: I am afraid that the noble Earl will have to be content with the softening of my hard facade and not that of my noble friend. If noble Lords opposite had spent rather more time concentrating on useful Amendments like this, rather than attacking the basic political philosophies that lie behind this Government's legislation, we might have ended this Committee stage with a much more useful Bill. Having said that, I must tell the noble Earl that he has discovered a drafting error which has been there since the Bill was first drafted, and we are very grateful to him for drawing our attention to it.
On Question, Amendment agreed to.
Clause 14, as amended, agreed to.
Clause 15 [Citation etc.]:
Baroness BIRK Baroness BIRK moved Amendment No. 36 :
Page 12, line 14, at end insert—
"( ) The orders specified in Part V of that Schedule are revoked to the extent mentioned in the third column of that Part."
The noble Baroness said : The Committee may remember that I spoke to this Amendment at the same time as Amendments Nos. 5 and 6, which have already been agreed to. I beg to move.
On Question, Amendment agreed to.
Lord MELCHETT Lord MELCHETT moved Amendment No. 37 :
Page 12, line 15, leave out from beginning to ("together") in line 16 and insert—
("(6) The following provisions of this Act, namely—
section 1;
section 2, except subsections (4A) to (4E);
subsections (7) and (10) below;
Part II of Schedule 1, together with sub-section (3) above so far as it relates to that Part;
paragraphs 13, 22 and 23 of that Schedule;
paragraphs 3 and 5 of Schedule 5;")
The noble Lord said : With the leave of the Committee, I should like to move Amendment No. 37 and to speak at the same time to Amendment No. 38. These Amendments deal with the commencement provisions of the Bill and their effect is to add a number of minor provisions to the list already in the Bill which will come in, of course, on Royal Assent instead of two weeks later. I beg to move.
On Question, Amendment agreed to.
Lord MELCHETT: I beg to move Amendment No. 38.
Amendment moved—
Page 12, line 18, after ("6") insert ("and the repeals in section 25(2)(c) of the Housing Finance Act 1972 and of section 80 of that Act contained in Part IV of that Schedule ") —(Lord Melchett.)
On Question, Amendment agreed to.
Lord MELCHETT Lord MELCHETT moved Amendment No. 39:
Page 12, line 31, leave out from (" Act") to end of line 33 and insert (" extends to the Isles of Scilly, except—
section 2 ;
sections 8 to 11 ;
Schedules 2 to 4 ;
together with subsection (5) above so far as it relates to the repeals contained in Part III of Schedule 6")
The noble Lord said: I beg to move Amendment 39 and should like at the same time to speak to Amendment 45. These Amendments deal with the application of the Bill to the Isles of Scilly.
1322
They add to the list of the Bill's provisions which extend to the Isles without the need for an Order, to take account of the additional private sector provisions which were added to the Bill during its Report stage in another place. I beg to move.
On Question, Amendment agreed to.
Clause 15, as amended, agreed to.
Schedule 5 [Minor and consequential amendments]:
Lord MELCHETT: I beg to move Amendment No. 40. I spoke to this Amendment with No. 8.
Amendment moved—
Page 28, line 15, after ("a") insert ("housing")—(Lord Melchett.)
On Question, Amendment agreed to.
Lord MELCHETT: I beg to move Amendment No. 41.
Amendment moved—
Page 28, line 19, at end insert—
(". The following paragraph shall be added after paragraph 9 of Schedule 5 to that Act (rent assessment committees):—
"10. Any reference to remuneration, salaries or allowances in the foregoing provisions of this Schedule includes a reference to remuneration or, as the case may be, salaries or allowances, in respect of functions conferred by regulations under paragraph 15 of Schedule 1 to the Housing Rents and Subsidies Act 1975; and the reference to expenses in paragraph 9(c) above includes a reference to expenses incurred in the discharge of such functions."")—(Lord Melchett.)
On Question, Amendment agreed to.
Lord MELCHETT: I spoke to Amendment No. 42 when I moved Amendment No. 8. I beg to move Amendment No. 42.
Amendment moved—
Page 28, line 24, after ("a") insert ("housing").—(Lord Melchett.)
On Question, Amendment agreed to.
Lord MELCHETT: This Amendment merely clarifies an ambiguous reference in paragraph 2 of Schedule 5. Section 5(7) of the Rent Act is of course the new subsection which is added by paragraph 1 of Schedule 5. I beg to move.
Amendment moved—
Page 28, line 28, leave out ("that Act") and insert ("the Rent Act 1968").—(Lord Melchett.)
On Question, Amendment agreed to.
Baroness BIRK: I have already spoken to Amendment No. 44 with Amendment No. 34 to deal with the almshouses. I beg to move.
Amendment moved—
Page 28, line 31, at end insert—
(".—(1) In section 26(1) of that Act (interpretation of Pan II) the following definitions shall be added after the definition of "allowance scheme":—
"almshouse accommodation" means accommodation in an almshouse provided by an almshouse charity ;
"almshouse charity" means a housing association which is either a charity of which particulars are entered in the register of charities established under section 4 of the Charities Act 1960 or an exempt charity ;
"almshonse contribution" means a contribution—

(i) which is payable to an almshouse charity by a person provided with aims-house accommodation, and

(ii) which does not exceed the maximum contribution that the Charity Commissioners have from time to time authorised or approved for the almshouse charity as a contribution towards the cost of maintaining the charity's almshouses and essential services in them;

(2) The following definition shall be inserted in that subsection after the definition of "authority":—
"exempt charity" has the same meaning as in the Charities Act 1960;").—(Baroness Birk.)
On Question, Amendment agreed to.
Lord MELCHETT: I spoke to Amendment No. 45 with Amendment No. 39. I beg to move Amendment No. 45.
Amendment moved—
Page 29, line 24, leave out from ("to") to ("section") in line 30 and insert ("the following provisions of the Housing Rents and Subsidies Act 1975, namely—
section 2 (reserve power to limit rents);
section 8 and Schedule 2 (phasing of rent increases for private sector housing) ;
section 9 and Schedule 3 (certain amenities to be disregarded in determining fair rent);
section 10 (termination of decontrol of tenancies by reference to rateable value);
section 11 and Schedule 4 (increases of rent under controlled tenancy permitted towards cost of repairs);
together with ").—(Lord Melchett.)
On Question, Amendment agreed to.
Lord MELCHETT Lord MELCHETT moved Amendment No. 46:
1324
Page 31, line 14, after ("payment)") insert—
("(a) for paragraph (d) of subsection (1) there shall be substituted the following paragraph: —
"(d) the carrying out of any improvement to the dwelling or of redevelopment on the land by a housing association which has previously acquired the land and at the date of the displacement either is registered or falls within section 18(l)(a) of the Housing Act 1974 (housing associations specified in orders under section 80 of the Housing Finance Act 1972 or paragraph 23 of Schedule 1 to the Housing Rents and Subsidies Act 1975):"
(b) at the end of subsection (2) there shall be added (but not as part of paragraph (b)) the words " and in a case within subsection (1)(d) above, unless the displacement occurred on or after 31st July 1974 (on which date the Housing Act 1974 was passed) " ;
(c)")
The noble Lord said: By leave of the House I will move Amendments Nos. 46 and 47 en bloc and speak also to Amendments Nos. 54 and 55. These Amendments widen the scope of the home loss and disturbance payments which are to be made by registered housing associations when they displace tenants in order to carry out redevelopment or improvement projects. The Land Compensation Act 1973 provided for home loss payments in Section 29 and disturbance payments in Section 37, and these were extended to tenants of registered housing associations for the first time by Amendments contained in the Housing Act 1974. The effect of the 1974 Act Amendments was to provide for payments in respect of displacements which took place at a date when the association was registered and also on land which had been acquired at a time when the association was registered. It was not our intention to confine payments to land which was acquired at a time when the association was registered, and we now wish to remove this limitation.
Amendments Nos. 46 and 47 achieve this by introducing new provisions, as in new paragraph (d) in both Sections 29(1) and 37(1) of the 1973 Act, in place of those originally provided by Schedule 13 to the 1974 Act. The registration of hous-the 1974 Act. Accordingly, displacements which took place before 31st July 1974, ing associations by the Housing Corporation was provided for by Section 13 of

1325
the date on which the 1974 Act was passed, will not qualify in any circum-stances, and this was achieved by the Amendments to Sections 29(2) and 37(2) of the 1973 Act. I beg to move.
On Question, Amendment agreed to.
Lord MELCHETT: I beg to move Amendment No. 47.
Amendment moved—
Page 31, line 15, at end insert—
". In section 37 of that Act (disturbance payments for persons without compensatable interests)—

(a) for paragraph (d) of subsection (1) there shall be substituted the following paragraph : —
"(d) the carrying out of any improvement to a house or building on the land or of re-development on the land by a housing association which has previously acquired the land and at the date of the displacement either is registered or falls within section 18(l)(a) of the Housing Act 1974 (housing associations specified in orders under section 80 of the Housing Finance Act 1972 or paragraph 23 of Schedule 1 to the Housing Rents and Subsidies Act 1975);"
(b) at the end of subsection (2)(c) there shall shall be added the following paragraph:—
"(d) in a case within subsection (1)(d) above, unless the displacement occurred on or after 31st July 1974 (on which date the Housing Act 1974 was passed)"
. In section 87(1) of that Act (general interpretation) the following definitions shall be inserted after the definition of " dwelling ": —
"housing association" has the meaning assigned to it by section 189(1) of the Housing Act 1957 ;
"registered", in relation to a housing association, means registered in the register of housing associations established under section 13 of the Housing Act 1974 ; "—(Lord Melchett.)
On Question, Amendment agreed to.
Lord MELCHETT Lord MELCHETT moved Amendment No. 48:
Page 32, line 29, after ("payment") insert ("in respect of a relevant contribution").
The noble Lord said: With the leave of the Committee I will speak to Amendments Nos. 49 and 50 with No. 48. These three Amendments relate to the new subsection (2A) to be inserted into Section 79 of the Housing Act 1974 by paragraph 13 of Schedule 5 to the Bill. They make it clear that the payments to which the new subsection relates are payments in respect not only of improvement contributions
1326
under the 1974 Act but also of contributions towards the cost of improvements, including the provision of standard amenities, which were payable under the Housing Act 1969 or any similar contributions under earlier legislation. The effect of the provision is that if such payments had commenced before 1st April 1975 they will continue to be made until the end of their normal term under the appropriate legislation. But if payments had not commenced before 1st April 1975, no payment in respect of relevant contributions will be made, and reckonable expenditure in respect of the improvements for which payments would have been made will count instead for the new capital costs element of housing subsidy under the Bill. I beg to move.
On Question, Amendment agreed to.
Lord MELCHETT: I beg to move Amendment No. 49.
Amendment moved—
Page 32, line 39, after ("payment") insert ("in respect of such a contribution").—(Lord Melchett.)
On Question, Amendment agreed to.
Lord MELCHETT: I beg to move Amendment No. 50.
Amendment moved—
Page 32, line 40, at end insert ("and in this subsection "relevant contribution" means an improvement contribution, a contribution under section 18 or 19 of the Housing Act 1969 or a similar contribution under any enactment repealed by that Act or under any enactment which was replaced by an enactment so repealed.").—(Lord Melchett.)
On Question, Amendment agreed to.
The DEPUTY CHAIRMAN of COMMITTEES (Lord Amherst of Hackney): There is a misprint in Amendment No. 50A. It should read at the beginning: "Page 33, line 42"—not line 43.
Baroness YOUNG: I do not move Amendment No. 50A.
Schedule 5, as amended, agreed to.
Schedule 6 [Repeals]:
8.17 p.m.
Baroness BIRK: With the leave of the Committee I beg leave to speak to both Amendments Nos. 51 and 52, which are

1327
consequential to Amendment No. 35 which has already been carried and concerns the Central Housing Advisory

("1957 5 & 6 Eliz. 2. c. 56.

The Housing Act 1957.

Section 79. Section 143").—(Baroness Birk.)

On Question, Amendment agreed to.
Baroness BIRK: I beg to move Amendment No. 52.

("1970 c. 44.

The Chronically Sick and Disabled Persons Act 1970.

In section 10, the words from "Central" to "of the" in the third place where those words occur").—(Baroness Birk.)

On Question, Amendment agreed to.
Lord ELCHETT: I spoke to Amendment No. 53 with Amendment No. 19. I beg to move Amendment No. 53.

("In section 29(1), the words" other than associations falling within section 18(l)(b)"of this Act".

In section 32(1), the words "or paragraph (b)"").— (Lord Melchett.)

On Question, Amendment agreed to.
Lord MELCHETT: I spoke to both Amendments Nos. 54 and 55 with No. 46. I beg to move No. 54.
Amendment moved—
Page 35, line 39, column 3, after ("38") insert (", in sub-paragraph (1), the words in paragraph (b) from "and at" to the end of paragraph (b), and in sub-paragraph ").—(Lord Melchett.)
On Question, Amendment agreed to.

PART V ORDERS REVOKED

Reference

Title

Extent of revocation

1974/380.

The Counter-Inflation (Private Sector Residential Rents) (England and Wales) Order 1974.

The whole order.

1974/1928.

The Counter-Inflation (Private Sector Residential Rents) (England and Wales) No. 2 Order 1974.

The whole order."

The noble Baroness said: This Amendment is consequential on Amendments Nos. 5, 6 and 36 which have already been carried. It is a purely technical Amendment which adds the Counter-Inflation Orders invoked by Clause 2 of the Bill to the Schedule of Repeals. I beg to move.
On Question, Amendment agreed to.
Schedule 6, as amended, agreed to.
In the Title.
Committee. I beg to move Amendment No. 51.
Amendment moved—
Page 35, line 15, at end insert—
Amendment moved—
Page 35, line 15, at end insert—
Amendment moved—
Page 35, line 28, column 3, at beginning insert—
Lord MELCHETT: I beg to move Amendment No. 55.
Amendment moved—
Page 35, line 40, column 3, at end insert ("and paragraph 39(l)(c)").—(Lord Melchett.)
On Question, Amendment agreed to.
Baroness BIRK Baroness BIRK moved Amendment No. 56:
Page 35, line 40, at end insert—
Lord MELCHETT: I spoke to Amendment No. 57 with Amendment No. 19. I beg to move.
Amendment moved—
Line 5, after "subsidies" insert "to render certain housing associations whose rules restrict membership to tenants or prospective tenants and preclude the grant or assignment of tenancies to persons other than members eligible for housing association grant and revenue deficit grant under the Housing Act 1974;".—(Lord Melchett.)
On Question, Amendment agreed to.
Title, as amended, agreed to.
House resumed: Bill reported with the Amendments.

BRITISH RAILWAYS BILL
The Queen's Consent signified, and Bill reported from the Select Committee with Amendments.
ARBITRATION BILL [H.L.]
Returned from the Commons, agreed to.
EDUCATION BILL
Returned from the Commons, with the Amendments agreed to.
BIOLOGICAL STANDARDS BILL [H.L.]
Returned from the Commons with an Amendment (privilege): the said Amendment agreed to.
  EASTMAN DENTAL HOSPITAL
  EASTMAN DENTAL HOSPITAL
  MEDICINAL PRODUCTS: PACKAGING
  MEDICINAL PRODUCTS: PACKAGING
  OMNIBUSES: TWO-WAY RADIO
  OMNIBUSES: TWO-WAY RADIO