Sitting of 26 June 1975

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

  GREATER LONDON COUNCIL (MONEY) BILL
  Order for Third reading read.
  To be read the Third time upon Thursday next

  EASTBOURNE HARBOUR BILL [Lords] (By Order)
  Order for consideration, as amended, read.
  To be considered upon Monday next at Seven o'clock.

  BROOKWOOD CEMETERY BILL [Lords] (By Order)
  Order for Second Reading read.
  To be read a Second time upon Tuesday 8th July.

  SCOTTISH TRANSPORT GROUP (PORT ELLEN HARBOUR) ORDER CONFIRMATION
  Mr. William Ross presented a Bill to confirm a Provisional Order under Section 7 of the Private Legislation Procedure (Scotland) Act 1936, relating to Scottish Transport Group (Port Ellen Harbour); and the same was read the First time; and ordered to be considered upon Wednesday next and to be printed. [Bill 185.]
ORAL ANSWERS TO QUESTIONS
  NORTHERN IRELAND

    Excluded Persons
    Mr. McCuskerasked the Secretary of State for Northern Ireland whether he has any evidence to link those people who have been excluded from Great Britain under the Prevention of Terrorism Act with continuing acts of violence in Northern Ireland.
    The Minister of State, Northern Ireland Office (Mr. Stanley Orme): No, Sir.
    Mr. McCusker: Will not the Minister concede that the action of Brendan Magill, one of the first men to be excluded from Great Britain, who recently delivered the oration over the grave of the terrorists killed in my constituency and described them as having been killed in action, suggests some complicity with the behaviour of those terrorists? If he agrees that it suggests complicity, does he not agree that it is time to introduce a system of surveillance over all these excluded men?
    Mr. Orme: The important fact concerning the 27 people excluded from Great Britain and sent to Northern Ireland is that none has as yet faced criminal charges, and it is with that aspect that the Government have to be concerned.
    Mr. Clemitson: Will the Secretary of State say what effect the removal from the statute book of the Prevention of Terrorism (Temporary Provisions) Act would have on the Secretary of State's task in Northern Ireland in trying to contain, control and reduce violence?
    Mr. Orme: As my hon. Friend is aware, the Act was introduced on a temporary basis by the Home Secretary because of incidents that had taken place within Great Britain itself. My right hon. Friend's action in trying to bring about peace in Northern Ireland is proceeding and will continue to proceed.
    Mr. Biggs-Davison: Will the Minister agree that Mr. Brendan Magill's political activities since his exclusion have been confined to such relatively unlethal activities as panegyrics at paramilitary funerals?
    Mr. OrmeAs long as the gentleman concerned just talks, he is free to do that, but if he takes action which is in any way in violation of the law, we shall, of course, take action.

    Leisure Centres
    Mr. Carsonasked the Secretary of State for Northern Ireland what factors were taken into consideration in deciding the locations of the leisure centres to be built in Belfast.
    The Minister of State, Northern Ireland Office (Mr. Roland Moyle): I understand that the factors taken into consideration were the optimum geographical spread and use of the recreational facilities involved.
    Mr. Carson: I thank the Minister for the interest he has taken in leisure centres in Northern Ireland. Does he not agree, however, that the Ballysillian Leisure Centre in North Belfast should have priority, because there are more interface areas here-13—than anywhere else in Northern Ireland? Will he also agree that, as the centre is completely surrounded by 32 Catholic and Protestant schools and 12,000 children, it provides a perfect opportunity for the Government to come back against terrorism and violence, and that the North Belfast Ballysillian Leisure Centre should get priority, so that a start may be made as soon as possible to try to bring together the people of the two communities in a peaceful way?
    Mr. Moyle: As the grant-aid authority, the Department of Education and myself would have a long-stop function in this, and I would hope to be guided primarily by the views of the Belfast City Council.
    Mr. Kilfedder: Will the Minister of State and his right hon. Friend the Secretary of State for Northern Ireland set up a committee to advise on the location of leisure centres in Northern Ireland, taking into account the needs of development areas such as North Down—it is not a matter affecting North Belfast alone—where existing needs are not being met and where present plans envisage the doubling of the population of my constituency within a relatively short time?
    Mr. Moyle: As a rule of thumb it seems to me that these leisure centres
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    cost about £1 million apiece, and apart from the ones at present under discussion I can see no possibility at all of the programme being extended. The question is whether those up for consideration now will all be approved.

    Roads (Expenditure)
    Mr. Dunlopasked the Secretary of State for Northern Ireland what is the extent of Government cuts in expenditure in the current roads programme in Northern Ireland.
    The Under-Secretary of State for Northern Ireland (Mr. J. D. Concannon): Over the next four years, financial provision on the roads programme in Northern Ireland has been cut by approximately £14 million from the figure of £197·8 million shown in the January Public Expenditure White Paper (Cmnd. 5879). As a result of the reduction in public expenditure announced by the Chancellor in his Budget speech, further cutbacks in the roads programme may be necessary. The programme is under review and it is not possible to give precise figures at the present time.
    Mr. Dunlop: Although I acknowledge the need for the stringent control of public expenditure in the present situation, will not the Minister concede that, in view of the abandonment of the Great Northern Railway line between Portadown and Londonderry, first priority should be given to the Dungannon Bypass and to the Strabane Throughpass out of whatever money is available? This would be to implement the promises of various administrations to provide an adequate road system to make up for the loss of the railway.
    Mr. Concannon: I am tempted to suggest to the hon. Gentleman that he has a word with his hon. Friend the Member for Belfast, North (Mr. Carson). All the Northern Ireland programmes are at present under review, and only when my right hon. Friend has studied the full effects of the Budget cuts will it be possible to determine individual programmes or parts of them. I may say that the Dungannon Bypass is pretty high in the list of priorities of the Northern Ireland Department of the Environment.
    Rev. Ian Paisley: Can the Minister tell us how the M2 motorway will be affected by this cut?
    Mr. Concannon: I do not want to get involved in individual projects. They are all being studied. The programme is under review, and we shall give details of the various schemes as soon as possible.
    Mr. Mather: Are these cuts in the work programme directly related to Government subsidies being made available to Harland and Wolff?
    Mr. Concannon: In the case of the pre-Budget cuts, yes, partly. In relation to the Budget cuts, no.

    European Community
    Mr. Mahonasked the Secretary of State for Northern Ireland if he will make a statement on the referendum result as it affects the work of his Department.
    Mr. Beithasked the Secretary of State for Northern Ireland what are the present arrangements for representing the views and interests of the people of Northern Ireland in the institutions of the EEC.
    Mr. Orme: I would refer the hon. Members to the statement made by the Prime Minister on 9th June—[Vol. 893, c. 29–31.] Northern Ireland interests are represented in the EEC institutions within the arrangements for the United Kingdom as a whole.
    Mr. Mahon: Is my right hon. Friend aware that, despite all the turmoil and trouble which has been and still is Ireland, there has been a common denominator over the years between the Governments of Northern Ireland and of the Republic in the people? Many people think that the referendum has provided further opportunities for economic and financial agreements to be made and extended, which might ultimately lead to peace in Northern Ireland. Many people in Ireland feel that, other methods having failed, economic measures between all the people might succeed.
    Mr. Orme: EEC cross-border studies have suggested that this might be so. On a limited basis, the Government are prepared to study with the Government of the Republic a limited programme which might be attempted, and my right hon. Friend has been in communication with the Government of the Republic to that end. It would be in a rather small way to begin with.
    Mr. Beith: Does not the right hon. Gentleman recognise that there is a gap in the representation of Northern Ireland in the EEC on a political level in both the Council of Ministers and the European Parliament? Will he confirm that his right hon. Friend is not a frequent visitor to Ministers' meetings in the EEC, in the nature of the institutions concerned. and that ultimately direct elections to the European Parliament would offer better possibilities for Northern Ireland than the present situation?
    Mr. Orme: I remind the hon. Gentle. man that Northern Ireland is part of the United Kingdom. We are told that continuously. Therefore, my right hon Friend the Foreign Secretary obviously represents Northern Ireland since he represents the United Kingdom as such. Representations in a parliamentary sense are a matter for this Parliament.
    Mr. Powell: Is the right hon. Gentleman aware that, as the people of Northern Ireland are part of the people of the United Kingdom, whatever represents the people of the United Kingdom represents the people of Northern Ireland? Is he aware also that, as long as the people of Northern Ireland are scandalously underrepresented in this House of Commons, their representation elsewhere is a very subordinate matter?
    Mr. Orme: There are different views about this in Northern Ireland. If an acceptable form of devolved government emerges in Northern Ireland, there will then be representation both in Westminster and in the parliament which will be created in Northern Ireland.

    Firearms (Draft Order)
    Mr. Farrasked the Secretary of State for Northern Ireland if, in view of the representations which have been made to him, he will arrange to extend the period of consultation on the Draft Firearms (Amendment) (Northern Ireland) Order 1975, due to have terminated on 11th June, by a further month.
    Mr. Moyle: The draft order has been available since 16th May and comments were called for by 11th June, subsequently extended to 14th June. There have been extensive consultations with bodies representing the full range of gun-sport activity, and any further extension of the

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    period for comment would not serve any useful purpose.
    Mr. Farr: I thank the hon. Gentleman for extending the period slightly, which has enabled the views of committees like the Long Room Committee and the Joint Shooting Committee to be made known to the Government. When he has these views before him and has an opportunity to consider them, will he give his attention to the widespread objection to Article 8, which raises the minimum age, which many people feel is both an objectionable course to take and one which will be counter-productive?
    Mr. Moyle: I am grateful for the hon. Gentleman's expression of thanks. I shall bear his points in mind and I shall give full consideration to the article to which he refers, on which we have received some representations.

    Cease-Fire and Incident Centres
    Rev. Ian Paisleyasked the Secretary of State for Northern Ireland if he will make a statement on the operation of the Provisional IRA cease-lire and of Her Majesty's Government's incident centres.
    The Secretary of State for Northern Ireland (Mr. Merlyn Rees): It is 136 days since the Provisional IRA declared its cease-fire. The cease-fire has led to a very marked reduction in Provisional IRA activity. As such it has made a valuable contribution. The Government incident centres have helped to achieve this by preventing misunderstandings. The continuance of the cease-fire is to be desired.
    As everyone knows, during this period violence within and between both communities has continued. Steps are being taken to stamp it out. But a real contribution would be made if those who are responsible for violence would adopt the cease-fire principle and contribute to keeping the peace between the communities.
    Meanwhile it would be helpful if more people were prepared to speak out against violence, whatever its source. As I said in the House on 16th June, the hon. Gentleman has so spoken.—[Vol. 893, c. 959–60.]
    Rev. Ian Paisley: Does not the right hon. Gentleman agree that the Provisional
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    IRA has been guilty of serious violations of the cease-fire in the killing of members of the security forces? Can he tell us whether the telephone numbers of incident centres are available only to the leaders of the Provisional Sinn Fein? Is he aware of the feeling in Northern Ireland among all sections of the community that these incident centres are not really helpful but are giving Provisional IRA members a standing in the community to which they are not entitled as they cannot be elected to office?
    Mr. Rees: I agree with the hon. Gentleman's last point, that election is the way to discover the degree to which anyone represents a community. But I am sure that these incident centres have played a part in preventing misunderstandings. There are occasions when people jump to conclusions and decide which group has carried out a bombing or a murder. The centres are extremely valuable.
    There has not been a genuine cease-fire, of course. I hope that it will develop. The hon. Gentleman knows that in Northern Ireland at the moment there is violence of a different nature—it is internecine, interfactional and sectarian—and that, although every sort of violence matters to me, it is most important to stop the growth of the other sort of violence which is balanced more on the Loyalist side than on the Provisional side.
    Mr. Loyden: Despite the fact that the cease-fire may not be absolute and is regarded in many ways as being far from it, is my right hon. Friend aware that there has been a change in climate, and will he accept from me that it will be very important that the opportunities during this period should be grasped with both hands? Many of us are concerned especially about the time scale in connection with the commission. Will my right hon. Friend see to it that the greatest amount of progress is made in these directions to take full advantage of the improved climate which exists?
    Mr. Rees: I am grateful to my hon. Friend for the tenor of his remarks. Of course the cease-fire is not absolute, but it is a beginning which I hope will grow and flower. I must make the point again that not all the violence in Northern Ireland comes from the Provisional IRA.

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    The security forces have to take both sides into account.
    As for the Convention, which is what I think my hon. Friend was referring to, I ask him to adopt the attitude that I have adopted. Representatives in Northern Ireland are talking together. They know the views of this House. Let us not chivvy, hurry or harangue them. It is important that they should have the chance to talk together. There are no quick results in this. I believe that much is happening there which at the end of the day may be of advantage.
    Mr. Fitt: Does the Secretary of State agree that since the Provisional IRA cease-fire came into operation the IRA and many other organisations in Northern Ireland, especially in Belfast, have openly engaged in a vicious and brutal campaign of sectarian murder, and that in these circumstances many people are saying that internment and detention in Northern Ireland leads to the holding of hostages from the minority Republic side as a result of the actions which are now being committed by Loyalist extremist organisations? Will he give an indication whether, in view of the cease-fire and the way in which it has held, he will take steps to end detention as soon as possible?
    Mr. Rees: There is a later Question which deals with that last point. The numbers I have released since the turn of the year will show the Government's intention. What I have discovered in Northern Ireland, as I am sure the hon. Gentleman with his much greater experience will know, is that it is not right to believe the claims of many people who telephone and claim that a certain organisation has carried out a crime or a murder. It seems to me that there are organisations which take names for an evening. There are people who ring up and make claims in the name of organisations which are in existence.
    What matters is that the individual who carries out the crime shall be dealt with through the police. The Chief Constable in Northern Ireland announced today the setting up of a special squad of detectives to work with the 250-strong special patrol group, which in my view is a clear indication that the police are concentrating on what is necessary in Northern Ireland—policing. Not intern-
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    ment, not detention but good policing, to the individual who commits the crime. is the way in which this Government want to proceed in Northern Ireland.
    Mr. McCusker: Does the Secretary of State agree that his incident centres can operate only as long as the Provisional IRA maintains its centres and that in Newry, when the Provisional IRA closed down its incident centre, the Government incident centre ceased to operate? Does not that situation give a credibility in the community to the Provisional IRA to which it is not entitled?
    Mr. Rees: There are a number of incident centres. The one in Newry closed down. I do not believe that that gives a credibility to the organisation. There may be many reasons for that, given the nature of that part of the Province.
    I understand the way people who are politically motivated feel about this. I believe that it is vital to have these incident centres. Everything that happened at the turn of the year reinforces that in my mind. I want the cease-fire, which is the Provisional IRA cease-fire, to continue. I am sure that is the right approach. I want to play any small part I can in this respect in keeping it going.

    Violence (Detention)
    Mr. Biggs-Davisonasked the Secretary of State for Northern Ireland whether he will make a statement on detention in relation to violence.
    Mr. Merlyn Rees: The Government's policy on detention is related to the level and nature of violence prevailing. Since 22nd December 1974, the date of the original cease-fire by the Provisional IRA, I have released 276 detainees and a further 25 detainees have been released by the commissioners. Further releases will depend on the situation as it develops.
    Mr. Biggs-Davison: Is the Secretary of State aware that the House is united with him in detestation of the revolting gangsterism, which he characterised as internecine, interfactional and sectarian in reply to an earlier question, and that we all applaud the successful efforts of the RUC and all the security forces against this abomination? Is he also aware, however, that after the admitted IRA bombing at Bessbrook there were eight releases

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    from detention and that some anxious surprise has been occasioned by that?
    Mr. Rees: Yes. I am extremely grateful for that remark about gangsterism. However, the nature of detention and the law under which I operate must be understood. In the course of last year, while the IRA campaign was still on, the commissioners released 97 people, because they were carrying out the law. I am not in business to keep people in detention as hostages for something which might happen outside. They were arrested. An interim custody order was signed by me in most cases—in large numbers. I dealt with each case on the basis of what it was alleged had been carried out, on information which was put before me but which could not be put before the courts. I must deal with detention on the merits of the case. However, what is for sure is that I have to take into account the fact that people who are released might easily return to violence. Overall I have to take into account the existing situation in deciding on the speed at which to release them.
    Mr. Dalyell: In contrast to the alleged anxious surprise, is my right hon. Friend aware that some hon. Members back him through thick and thin in the policies he is now pursuing?
    Mr. Rees: I am grateful to my hon. Friend for his remarks. I say to all hon. Members, whatever their views on this matter, that these are not easy decisions to take. The longer I go on, the more difficult the decisions become. I have to take into account the role of the security forces in Northern Ireland. I am not in business to put the life of one member of the security forces at risk for a political quirk. It is a fundamental belief that the best way in which to deal with the trouble in Northern Ireland is by policing and by people going through the courts. That is what I hope the cease-fire will give me a chance to do.

    Convention
    Mr. Matherasked the Secretary of State for Northern Ireland if he will make a statement about the progress of discussions in the Convention.
    Mr. O'Halloranasked the Secretary of State for Northern Ireland if he is
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    satisfied with the progress so far made by the newly-elected Convention; and if he will make a statement.
    Mr. Michael McNair-Wilsonasked the Secretary of State for Northern Ireland by what date he expects to receive the deliberations of the Convention about new political institutions for the Province.
    Mr. Duffyasked the Secretary of State for Northern Ireland whe he expects to receive the final report of the Constitutional Convention.
    Mr. Merlyn Rees: It would be inappropriate for me to comment on the progress or the proceedings of the Convention. I do not know when it will complete its report. The Northern Ireland Act 1974 gives the Convention a basic life of six months, but this can be extended if necessary.
    Mr. Mather: I am grateful for that reply. Is the Secretary of State aware that we welcome the conciliatory spirit in which the discussions have so far taken place? Is it intended that at some stage during these discussions the Government should make known their views, the devolution guidelines and the powers which go with devolution? Can the right hon. Gentleman say whether those powers will be no less than those being considered for Scotland and Wales?
    Mr. Rees: I am sure that all those involved will be grateful for the remarks of the hon. Gentleman about the way in which the Convention is working. I think that it would be better if I rested at that point, because the less we are involved in comment the better. All who are there are aware of what the Convention is for. It is not a parliament. It is not an assembly. It will not govern Northern Ireland. It is a body which meets together, to talk together and to put proposals to the British Government.
    I know from practical experience in one sense that Wales is different from Scotland. Over the past 15 months I have learnt that Ireland is very different from Scotland and Wales.
    Mr. Duffy: I understand the Secretary of State not wishing to harbour too much optimism at this stage. Ought he not to acknowledge, however, that a good start has been made and that during the

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    recently-concluded stage 3, thanks to the conciliatory speeches which were made on all sides and the remarkable speeches of Mr. Harry West and Mr. John Hume, an atmosphere of hope has been created? We can now all look forward to the ultimate conclusion with a good deal less trepidation than formerly.
    Mr. Rees: I am grateful to my hon. Friend. I am sure that his laudatory remarks will be well received by those Members of Parliament who are also members of the Convention.
    There is much in the Convention which supports the feeling I had when a year ago, on behalf of the Government, we put forward the idea of the Convention on the basis that people from Ireland understood the nature of Northern Ireland far better than we did, and that they would talk together and put their ideas to this House. I can only say, on behalf of everyone in the House, that we wish them well.
    Mr. McNair-Wilson: Has the Secretary of State a timetable in mind once he receives the report from the Convention? Will he accept that report as being the authentic voice of Northern Ireland which should be taken extremely seriously before the Government introduce proposals that may be out of line with it?
    Mr. Rees: At this stage it is better for us to wait and see what comes from the Convention. Of course, the report will be considered by the Government and put to the House of Commons. It is a report to Parliament. It is much better to leave it at that. The Convention is meeting, it is a Northern Ireland meeting, and the less that is said by the rest of us at the moment the better. The time will come when it will be our job to comment on the report which comes from the Convention.
    Mr. Fitt: Does my right hon. Friend agree that, while the Convention is deliberating upon the overall political issues, we are becoming increasingly aware of the severe economic problems that are beginning to emerge in Northern Ireland? Would he be prepared to receive an interim report, which would probably have the support of all political interests in the Convention, on the social and economic problems affecting Northern Ireland?
    Mr. Rees: The Convention is not a parliament which is met together to consider current economic problems. If, however, the Convention were to consider whether the best way to govern Northern Ireland is through a Department of Commerce, a Department of Manpower Services and the various organisations dealing with economic affairs which are handled by my right hon. Friend the Minister of State, that is a matter for the Convention. But the Convention is not a parliament.
    Mr. Kilfedder: Will the Secretary of State give an assurance that if a locally-developed administration is devised, as I hope it will be, as a result of the Convention, it will have the right to decide locally how money will be spent without constant reference to the Treasury in London?
    Mr. Rees: The hon. Gentleman is moving to a different form of government which seems to be concerned with how to have what money one likes and how to spend it as one likes without reference to the United Kingdom Parliament. That is not what I mean by devolved government. If the hon. Gentleman means that the devolved government must have regard to priorities and take decisions whether money should be spent on roads, leisure centres, housing or agriculture, there is a great deal of sense in that; but money does not grow on trees.

    Bill of Rights Proposals
    Mr. Thorneasked the Secretary of State for Northern Ireland whether he has considered the Northern Ireland Civil Rights Association's suggested Bill of Rights of April 1975; and whether he will make a statement on his policy towards its proposals.
    Mr. Moyle: The Standing Advisory Commission on Human Rights has recently decided to embark on a major study of the extent to which existing legislation provides sufficient protection for human rights in Northern Ireland, including whether a Bill of Rights is needed, what form it might take and how it would relate to existing legislation. It will no doubt consider the views of all relevant interests, and my right hon. Friend proposes to await its recommendations.
    Mr. Thorne: Is the Minister aware that the Feather Commission is seen in Northern Ireland as a device for delaying legislation? For many years most political organisations in Northern Ireland have been talking about a Bill of Rights, and the Gardiner Report recommends consideration thereof. Is the Minister further aware that the House can legislate on this matter? It has power to do so. When will it have the will to do so?
    Mr. Moyle: My right hon. Friend is awaiting the report of the commission before deciding what to do. The commission is not a device for delay. A number of interesting proposals have been put forward for a Bill of Rights for Northern Ireland, but they differ one from the other and it is a question of reconciling the interests as well as considering the points of view. We have accepted the Gardiner recommendation in referring this point to the commission for consideration.
    Rev. Ian Paisley: Has the hon. Gentleman seen certain resolutions on the Order Paper of the Convention which show virtual agreement among all parties on the necessity for a Bill of Rights? Is he making arrangements for liaison between the Feather Commission and the Convention? There would seem to be duplication in this matter. Would it not be advisable for talks to be held on this subject between the Convention and the Feather Commission?
    Mr. Moyle: There will have to be liaison between the Standing Advisory Commission on Human Rights and the Convention if both bodies are to consider this matter. The Convention might like to consider putting its recommendations to the Feather Commission. United Kingdom legislation is a matter for my right hon. Friend the Home Secretary.
    Mr. Stallard: Does the Minister realise that his reply on the question of a Bill of Rights will be seen as totally unsatisfactory by many people who have been deeply involved in the Northern Ireland problem for many years? Did not the Chairman of the Standing Advisory Commission on Human Rights say that the commission would spend at least one year studying the need for a Bill of Rights? That statement has caused a great deal
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    of anger and consternation among many organisations, political parties and hon. Members. Does not the Minister accept that it is the Government's responsibility to introduce legislation as a matter of urgency to enact such a Bill of Rights, and that the Government should not be seen to be sweeping that responsibility under the commission's carpet?
    Mr. Moyle: The Government's responsibility is to ensure that, when it comes to be considered by the House, the Bill of Rights is effective. There is no question of delay. My hon. Friend has Lord Feather's statement slightly wrong. Lord Feather said that he thought it would take a few months and possibly a year, not a minimum of a year. I am sure that the exchange which we have had this afternoon will be noted by the chairman of the commission and no doubt he will take it into consideration, but my right hon. Friend cannot direct the commission on what it does. He can provide it with all the resources necessary within reason to allow it to do an expeditious job.

    Government Departments
    Mr. Molyneauxasked the Secretary of State for Northern Ireland whether he is satisfied with the present structure of the Northern Ireland Departments and the degree of co-operation between such Departments.
    Mr. Merlyn Rees: Yes, Sir, but I and my ministerial colleagues naturally keep the situation under the closest review at all times.
    Mr. Molyneaux: Will the Secretary of State examine the possibility of reducing the number of Departments? For example, does he feel that the Manpower Services Department should revert to control by the Department of Health and Social Services? Will he give urgent attention to the delays in decision-making, particularly in areas of government connected with local authorities?
    Mr. Rees: Under direct rule we have made some changes. The former Office of the Executive is now the Central Secretariat. Community Relations is part of the Department of Education, and Law Reform is part of the Department of Finance. My right hon. and hon. Friends who have responsibility for various

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    Departments take them in pairs and we try to put together Departments with the closest affinity. I have been extremely impressed with the working of the Manpower Services Department, and when the time comes to examine the structure of government in Northern Ireland my belief is that this Department should be left on its own. It does not have a social services function; it is an excellent department of employment. The co-operation between the Departments I inherited is extremely good and I have nothing but praise for the civil servants who work extremely well for them.
    Mr. Fitt: Although I recognise that the members of the Convention have been given the specific task of trying to evolve a new political structure, does not my right hon. Friend agree that many of them are deeply involved in the social and economic structure as it affects their constituencies? Will he confirm that the people who are in charge of Departments in Northern Ireland will continue to receive deputations of duly elected members of the Convention to discuss social and economic problems?
    Mr. Rees: I must make absolutely clear to my hon. Friend that those elected to the Convention are not Members of Parliament or Assembly men. They are elected to put a form of government to this House. Although I have directed Departments in Northern Ireland through my right hon. and hon. Friends to give all status to those who are elected and to have correspondence and so on, I am considering an approach that has been made to me. However, there is one great principle of which I have instructed everyone to take heed—namely, that the Convention is not a parliament. There are 12 hon. Members from Northern Ire- land represented in this House.
    Rev. Ian Paisley: There are 11.
    Mr. Rees: Jokes about Members of Parliament in Northern Ireland are not for me. However, with regard to the 12 I find it odd that those who say on the one hand that 12 is not enough, tell me on the other hand that they much prefer to work through local representatives.

    Gardiner Report (Implementation)
    Mr. Watkinsonasked the Secretary of State for Northern Ireland if he can yet say when he expects to implement the findings of the Gardiner Report.
    Mr. Moyle: The Northern Ireland (Emergency Provisions) (Amendment) Bill has been laid before Parliament, received its First Reading on 18th June and is down for Second Reading tomorrow.
    Mr. Watkinson: Is my right hon. Friend aware of the recommendations of the Gardiner Report which refer to the prison conditions in Northern Ireland as being of an appalling nature? Have the Government considered any possibility of extending the resettlement of detainees as recommended by that report?
    Mr. Moyle: We shall be reporting on this matter tomorrow in the House.
    Mr. Beith: In view of the vital necessity to strengthen the position of the RUC, does the Minister recognise the need to move more quickly on the Gardiner Report's recommendation of introducing an independent element into the complaints procedure? Can he avoid the constant waiting for the very slow recommendations of his right hon. Friend the Home Secretary on this matter?
    Mr. Moyle: We have decided that we should wait for the recommendations of my right hon. Friend the Home Secretary on this matter.
    Mr. Neave: Can the Minister say a little more about the recommendations of the Gardiner Report concerning secure prison accommodation, and in particular paragraph 113, which deals with temporary cellular accommodation, because the report attaches great urgency to that aspect of the problem?
    Mr. Moyle: We shall report on that matter in the debate tomorrow.

    IRA (Fund Raising)
    Sir Nigel Fisherasked the Secretary of State for Northern Ireland if he has any estimate of the amount of money raised from United States sources in recent years to buy arms for the IRA in Northern Ireland.
    Mr. Miscampbellasked the Secretary of State for Northern Ireland if his Department has made any estimate of the funds raised from United States sources to provide arms to the IRA or Provisional IRA over the last three years.
    Mr. Orme: This is primarily a matter for my right hon. Friend the Secretary of State for Foreign and. Commonwealth Affairs. I understand, however, that the Irish Northern Aid Committee, which claims to be the only authorised fundraising agency in the United States for the Republican movement, registered remittances to Ireland of nearly $900,000 in the three years to January 1975. It is impossible to say how much of this has been used for the purchase of arms.
    Sir Nigel Fisher: Is the right hon. Gentleman aware that many well-intentioned but rather naive people in the United States are giving large sums of money to the organisation called Northern Irish Aid in the belief that it is being used for peaceful and compassionate purposes, whereas it is going directly or indirectly to the gunmen? Will he suggest to his right hon. Friend the Foreign and Commonwealth Secretary that he makes representations to the United States Government to try to correct this misapprehension in the minds of American citizens of Irish descent who are giving this money?
    Mr. Orme: I thank the hon. Gentleman for his remarks. My right hon. Friend the Foreign and Commonwealth Secretary keeps the American Government fully informed about the use of this money. I should also like to draw attention to the responsible leaders, in both North and South, such as Mr. John Hume, Dr. Fitzgerald and many others, who have gone to the United States and urged Americans not to make such contributions.
    Mr. Mahon: It is not the case that as the opinion of the present Government and other Governments, as well as the opinion of the House, in connection with the Irish troubles has become more and more known in America, the sums given to the dubious causes have lessened?
    Mr. Orme: Yes, I believe that my hon. Friend is correct when he says that there has been a falling-off of such money, and obviously we welcome that. However,
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    everyone can play a part in exposing this type of action.
    Sir John Hall: Has any estimate been made of the amount of money raised in this country, through collections in public houses in some of the major cities, and remitted to Northern Ireland? Is this still continuing?
    Mr. Orme: The people who may have found it rather easy a short while ago to raise such money are now finding it increasingly difficult.

    TUC (MEETING)
    Mr. Skinnerasked the Prime Minister if he will make a statement on his most recent meeting with the TUC.
    Mr, Norman Lamontasked the Prime Minister whether he will make a statement on his most recent meeting with the TUC.
    The Prime Minister (Mr. Harold Wilson): I met members of the TUC at the informal meeting of the TUC-Labour Party Liaison Committee on 23rd June. We reviewed the present economic situation and devoted some time to the TUC's continuing work on the development of the social contract.
    Mr. Skinner: Will my right hon. Friend consider the six-point plan that was produced by the TUC yesterday? Will he tell us, in that simple Yorkshire bluntness and directness for which he is famous, whether he agrees with it? Will he give a straight answer "Yes" or "No"?
    The Prime Minister: Yes, Sir, I greatly welcome the statement that was made yesterday. Indeed, on Tuesday I said that I thought it was a big step forward that they were talking about relating wage settlements over the next year to the target for price increases and not to the events of the previous year. I greatly welcome it. We shall want to discuss it with them and we shall want to build on it. I believe that is extremely helpful. I am sure the whole House, including the Conservative Opposition—will welcome the very big move forward to which my hon. Friend the Member for Bolsover (Mr. Skinner), in his blunt Derbyshire manner, has drawn attention.
    Mr. Lamont: When the Prime Minister next meets the TUC will he discuss with it the removal of Mr. Boyd, the moderate and democratically elected General Secretary of the AEUW, from his seat on the General Council? If the Prime Minister believes that trade unions are an important part of the nation's economy, surely he cannot turn a blind eye to the move of a few extremists to ensure that the will of the majority shall not prevail.
    The Prime Minister: I knew Johnny Boyd before the hon. Member for Kingston-upon-Thames (Mr. Lamont) was born. I share the description of Mr. Boyd given by the hon. Gentleman. I never found any Tory, when the Conservative Party was sitting on the Government side of the House, standing up for anything that Johnny Boyd said, but I am glad to see them doing so now. This is a matter for the TUC and the union, but I shall certainly regret the disappearance of Johnny Boyd from the higher councils of the TUC in which he has played such a tremendous part over the years. I have met him on a number of occasions in that and in other capacities.
    Mr. Michael McGuire: Will my right hon. Friend confirm that the increasing rate of unemployment is one of the subjects which are causing great concern and which are discussed at the joint meetings? Can he assure the House that the Government will implement that part of the scheme which my right hon. Friend outlined to the House in his statement on 23rd May, namely, to give Government assistance for stockpiling purposes in the textile industry and so prevent the closure of the Empress Mill, Ince, and thus help to save 350 jobs?
    The Prime Minister: I am glad that my hon. Friend welcomed the statement I made on 23rd May concerning the very special problems of the textile, clothing, footwear and other industries. The problem of unemployment has been discussed at almost every meeting that I, and indeed my colleagues, have had with the TUC since the Government were formed 15 months ago. This is a matter which is raised in the six points which have already been referred to by my hon. Friend the Member for Bolsover. I am not clear about the position of the Conservative Party, but we reject the deliberate use of unemployment and monetarism as a means of solving this problem.
    Mr. Marten: On wage inflation, would it not be in the national interest, certainly in the public sector to start with, if wage settlements could be made on the same day in the year?
    The Prime Minister: That would be a difficult thing to organise unless there were a statutory determination that all wage settlements be done on the one day. I do not think that has ever been our practice under any Government. But there is a problem, to which the TUC draws attention in its document, regarding the rather protracted wage round. I think that paragraph 64 of the document put to the economic committee of the TUC states that it is very necessary that those who settle early in the annual round at a moderate rate should have some protection, some ability to be confident, that later settlements do not go a great deal higher and leave them in the lurch. This is one of the matters we have to discuss with the TUC following yesterday's discussions.
    Mr. Prior: Is the right hon. Gentleman aware that words about the creation of "inflation" and "unemployment" come ill from a Government and Prime Minister who are now allowing the rate of unemployment to rise by 50,000 a month? Is he aware that in his consultations with the TUC it would help the country if it knew what the target of price increases was likely to be for the coming year?
    The Prime Minister: On the first point, I recall that unemployment was over 2 million when we came into office and that all the prognoses both of inflation and of unemployment suggested a very big increase in unemployment because the previous Government's boom had collapsed in the middle of 1973 before the confrontation and the three-day week. I said what I did because the right hon. Member for Leeds, North-East (Sir K. Joseph) cast doubt on the unemployment figures and thought that they were very minimal indeed in real terms. I do not think that is the official view of the right hon. Member for Penrith and The Border (Mr. Whitelaw) with his experience of these matters. Both he and the Leader of the Conservative Party, in her famous article in the Sunday Express, rather suggested that there was something "phoney" about the figures. Therefore, we reject the deliberate use of unemployment. But

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    those on the Opposition Front Bench, in contradiction to some below the Gangway—though I cannot quite sort it out between one and another—who are advocating a monetary solution, which has not been repudiated by the Leader of the Opposition, are advocating the deliberate use of unemployment.

    USSR
    Mr. Ridleyasked the Prime Minister if he will pay another official visit to Moscow.
    The Prime Minister: I have at present no plans to do so, Sir.
    Mr. Ridley: In that case will the Prime Minister, with his well-known talent for renegotiation, seek to renegotiate the Anglo-Russian trade agreement? Is he aware that the massive extension of credits at cheap rates and the pledges to take imports from Russia in competition with home production are thought by many to be damaging to our interests? Will he submit the results of the last Anglo-Russian trade agreement to an impartial investigation to see whether it was in our favour or not?
    The Prime Minister: I do not agree with the hon. Gentleman, though I know that he made the point in a Question to my right hon. Friend the Secretary of State for Trade earlier this week. I explained at the time of the signature, when I reported to the House, that what was being done on credits was exactly what was being done by other European countries in competition with us—for example, France, Italy and Germany. We now have prospects of a very significant increase in trade and, therefore, in jobs as a result of this agreement. I am sure the hon. Gentleman will be delighted to know that since it was signed I have had a recent visit from Mr. Gvishianihe is very important in these matters in the Soviet Union—who expressed his satisfaction with the reaction of British firms, which welcomed it, and also said that the Russian trade corporations are placing bigger orders. He believed that the trade arising from that agreement will be much bigger than was contemplated in February. I hope that the hon. Gentleman will welcome the creation of the jobs involved.
    Mr. Frank Allaun: Will the Prime Minister back the holding of a summit conference next month as it is now supported by West Germany and France in view of the concession made by Russia over the advance notice of military manoeuvres? Secondly, will he support the American plan for a reduction in the tactical nuclear weapons stored in Europe in exchange for a reduction in Warsaw Pact conventional forces and the Soviet plan for a 17 per cent. reduction on both sides by 1977, as both proposals seem very sensible to some of us?
    The Prime Minister: In general I certainly agree with my hon. Friend. We made clear, indeed before the events described by my hon. Friend, that we were anxious to have a meeting next month. I said—it was in the communiqué in Moscow in February—that there were still a lot of difficult problems to be overcome. They have substantially, but not all, been overcome, not least by the very close arrangements in Geneva between the British and Soviet delegations where we have been speaking for some of our allies and they for theirs. Therefore, I am hopeful that the meeting will take place next month. But there are one or two problems, and one is about the advance notification of military movements.
    We certainly support the American proposal, and I am glad that my hon. Friend is lending his support to it. But we are a little disappointed, though I do not think that it will affect the timing of the conference, that more progress is not being made in Vienna on mutual balanced force reductions. I think that the House would like to see more progress on that issue, but it is not one of the issues for Helsinki.
    Mr. Maurice Macmillan: In view of what the Prime Minister said about his disappointment over Vienna, and while in no way wishing to move away from his policy of détente, may I ask him to assure the House that, with our European partners, he will take great care over the safeguarding our essential interests and the maintenance of sufficient forces so to do, including free access to the raw materials on which our whole economy is based?
    The Prime Minister: Yes, I agree. The right hon. Gentleman will be aware

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    that, as I told the House, I stressed both points, the raw materials point and the other, at the recent NATO conference.
    I take issue with the right hon. Gentleman about consultation with our European partners. This is a NATO matter. It is in consultation with our American partners as well. In the NATO discussions I highlighted the problems of MBFR, where I do not believe we are making sufficiently satisfactory progress. A lot of progress has been made on most of the other matters affecting the conference on security and co-operation, but we want to see still more progress made on one or two outstanding questions so that we can attend the conference next month.

    SECRETARY OF STATE FOR TRADE
    Mr. McCrindleasked the Prime Minister if he will dismiss the Secretary of State for Trade.
    The Prime Minister: No, Sir.
    Mr. McCrindle: On the question of trade and related matters, has the Prime Minister had a chance to study the proposals of the Tribune Group? Has he noted that on the very day when these proposals were issued the pound plummeted to an all-time low? Will he assure the House that the forthcoming package of measures that the Government are likely to introduce will bear no relationship to the recommendations of the Tribune Group?
    The Prime Minister: My right hon. Friend is not a member of the Tribune Group. Nor would I have regarded it as a matter for dismissal had he been so. [An HON. MEMBER: "Perhaps for promotion?"] The promotion that he deserves in all the circumstances is the result of the most successful stewardship of the export trade of this country for many years past under successive Governments. One day I should like to hear the Conservative Front Bench pay tribute to what has been achieved on exports. [Interruption.] I know about exports. They are more relevant to the balance of payments and the pound than any other single issue in this country.
    I am well aware of the Tribune Group's proposals. They have been actively dis-
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    cussed in this House. The main propositions concerning import controls and other things have been rejected by the Government. They have also been put in almost the same form to a party meeting upstairs and been rejected there.
    Mr. Heffer: Is my right hon. Friend aware that members of the Tribune Group will be gratified that at least some hon. Members opposite can actually read what the group says? To be serious, however, does he agree that one of the most important problems facing us at the moment is how to deal with our serious economic situation? Therefore, is it not clear that there must be selective import controls and a tightening up of control on the outflow of capital, that we must consider taking over our own overseas portfolios—[HON. MEMBERS: "No."]—that we must make further cuts in defence expenditure—[HON. MEMBERS: "No."]—and that we must not rely on holding back wages as the only answer to Britain's economic problems?
    The Prime Minister: I agree with my hon. Friend that it is gratifying that the hon. Gentleman is keeping abreast of important and controversial documents. I thought that this week he distinguished himself by offering to arbitrate, as it were, between the two Front Benches of the Conservative Party. I wish him luck. If the hon. Gentleman needs help from us we shall, of course, be glad to help him, although there is no ministerial responsibility of any kind.
    My hon. Friend listed a number of points. In fact they have all been urged in recent economic debates in the House and at Question Time. I have said that selective import controls, apart from those which may be necessary and which we are ready to introduce where there is clear evidence of dumping or unfair practices, would be harmful to the country as a big trading nation when, despite the world depression, it is the only major country maintaining its export volumes. I think that those volumes would be imperilled if we were to adopt what my hon. Friend suggests.
    Mrs. Thatcher: Is the Prime Minister aware that my right hon. and hon Friends are delighted to pay tribute to the excellent export record achieved almost entirely by private enterprise? Is

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    he further aware that the longer he takes to deal with inflation, the higher unemployment will be in the end, and that the unemployment he gets next year will be directly attributable to his indecision?
    The Prime Minister: I am glad to hear the right hon. Lady at last pay tribute to what has been achieved in exports, and mainly, of course, by private enterprise firms. It just happens that, as always, they are much more successful at exporting under a Labour Government. That is why we have had to hand over to Conservative Governments vast export surpluses which they have frittered away We then have to build them up all over again. We are getting used to that. should like the right hon. Lady to do what I have done when I have paid tribute to the firms concerned—and I have done so several times in public. I would like the right hon. Lady to pay tribute to the workers in those industries who have made export achievements possible. Conservative Members are always ready to condemn workers but not to praise them. Even this afternoon they are not prepared to praise them for what they have done as regards the export effort.
    The right hon. Lady is aware, as we have made clear, that we are giving urgent attention to the problems to which she has referred. I hope that she will tell us how much she welcomes the move by the TUC yesterday. If we are to proceed by consent—I hope that the Conservative Party will agree with this, because the right hon. Lady is opposed to statutory policies—I hope that the right hon. Lady will agree that it was right to give time for the TUC yesterday to take this important decision, which I hope she welcomes. We wanted to see that take place and we are now in a position to discuss the matter with the TUC. We shall do so urgently. I believe that such a solution would carry widespread support from the right hon. Lady. I know from all she has said that she would welcome an agreement with both sides of industry as regards the solving of our inflation problem rather than the use of statutory methods.
    Mr. David Steel: Is the Prime Minister aware that in fairness to the Secretary of State for Trade, whose dismissal is being sought in the Question, the right hon. Gentleman is unlikely to be able to do anything to improve our trading position or to arrest the slide in the value of our currency until such time as the Prime Minister or the Chancellor of the Exchequer bring forward their economic proposals to the House? The Prime Minister told us on Tuesday that that would be before the Summer Recess, but that is still over four weeks away. Will not the Prime Minister bring forward his proposals a great deal sooner than that?
    The Prime Minister: Yes, certainly, that is what we would like to do. We want to get the matter in a workable form, and certainly before the recess. The hon. Gentleman brought forward his proposals to the House two days ago, I think, and they were rejected by the House. His proposals involve statutory policies.
    I think that the vast majority of the House, apart from a few Conservatives below the Gangway, recognises that criminal sanctions in these matters have not worked in the past. They did not work under the Industrial Relations Act. No one has answered the question of what happens when people are brought before the courts in respect of wage settlements. I think that the right hon. Lady the Leader of the Opposition was absolutely right about that in what she said on television recently.
    I agree with the hon. Gentleman that this matter must be pushed on with urgency. We now have something very important on which to build, and something which has not happened before, in relation to the TUC's decision. The former Conservative Prime Minister, the right hon. Member for Sidcup (Mr. Heath), spent very many months talking with the TUC but he was not prepared to offer what was necessary to get the kind of offer that the TUC made yesterday. We want to build on that. I am sure that the whole House will be prepared to give long enough to the Government to ensure that what we produce is workable and acceptable to the country.

BUSINESS OF THE HOUSE
Mrs. Thatcher: May I ask the Leader of the House to state the business for next week, please?
The Lord President of the Council and Leader of the House of Commons (Mr. Edward Short): Yes, Sir. The business for next week will be as follows:
MONDAY 30TH JUNE.—Supply [22nd Allotted Day]: There will be a debate on the problems of the fishing industry, which will arise on a motion for the Adjournment of the House.
At seven o'clock, the Chairman of the Ways and Means has named Opposed Private Business for consideration.
TUESDAY 1ST JULY, WEDNESDAY 2ND JULY and THURSDAY 3RD JULY.—Remaining stages of the Industry Bill.
FRIDAY 4TH JULY.—Supply [23rd Allotted Day—First half]: There will be a debate on EEC Documents on Community Budget 1975 and associated matters and on aids to shipbuilding (No. R /1362/ 75).
MONDAY 7TH JULY.—Private Members' motions until seven o'clock.
Afterwards, remaining stages of the Statutory Corporations (Financial Provisions) Bill.
Mrs. Thatcher: May I ask the Leader of the House about an economic statement? The Prime Minister indicated in a reply last Tuesday that there would be an economic statement before the recess. I express the hope that it will not occur just two or three days before the House rises but will take place in sufficient time to enable us to have a proper two-day debate upon it.
Mr. Short: Yes, I shall certainly bear in mind what the right hon. Lady has said. I am sure that the House will wish to debate these matters at length.
Mr. David Steel: When will the Government make a statement on the Boyle Report on MP's salaries and conditions? Is the right hon. Gentleman aware that many of us feel that, given the present economic circumstances, the Government might well be justified in not granting the full award recommended by Lord Boyle
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and his Committee? However, an increase in the secretarial allowance is long overdue in the interests of our secretaries in the House, who work very hard. Is the right hon. Gentleman aware that there has been no increase in that allowance since January 1972?
Mr. Short: Yes, I understand the concern of hon. Members. The Prime Minister received the Royal Report 10 days ago and the Government are considering it. When the Government have completed their consideration they will publish the report together with their recommendations to the House.
Mr. Ashley: Is my right hon. Friend aware that employers in Britain are under an obligation to employ a quota of disabled people amounting to 3 per cent. of their work forces, but that half of them fail to do so? As the nation looks upon us to give a lead, is my right hon. Friend aware that it has now been revealed that in the House Commons, which has a large labour force, only 0·7 per cent. of those employed are disabled, and that in the House of Lords not one disabled person is employed?
Mr. William Hamilton: They are all disabled there.
Mr. Ashley: Does my right hon. Friend not think that that is a scandalous situation? Will he do something about it?
Mr. Short: Certainly I shall look at the figures that my hon. Friend has given and perhaps talk to him about the matter.
Mr. Body: As the Leader of the House will be aware, several weeks ago the Government published a very important White Paper concerning agriculture called "Food from our own Resources". Will he give an undertaking that we shall debate that White Paper, if not next week, at least very soon?
Mr. Short: No, Sir. I cannot promise any time in the near future, but all the days for general debates are now in the hands of the Opposition. I suggest that the subject mentioned is an appropriate one for such a debate.
Mr. Tuck: My right hon. Friend is probably aware of the concern which has been expressed about the HS146. We are distressed that the Bill dealing with

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the shipbuilding and aircraft industries will not be proceeded with this Session. Could my right hon. Friend give an assurance that it will have top priority at the beginning of next Session?
Mr. Short: This is one of the Government's top priorities and I shall ensure that the Bill is given a Second Reading as soon as possible.
Mr. Ogden: May I refer again to the Boyle Report? My right hon. Friend will be aware of the private and public correspondence which has taken place between him and many hon. Members. I appreciate all the answers which he has given over a period of six months, but it is no use saying that he understands our concern and then leaving the situation in a state that is no more helpful to us than the old coal owners were to the coal miners in days gone by. Surely it is time we proved that a Labour Government can be as good an employer as can a Tory Government.
Mr. Short: My right hon. Friend has written to me about this matter. I think he might bear in mind that I referred the matter to the Boyle Committee and arranged for an interim adjustment last August. The Government will consider the matter as soon as possible and publish a report, together with our recommendations—as soon as we possibly can.
Dr. Hampson: Is the right hon. Gentleman aware that the Stationery Office has sold out of copies of the Bullock Report, which proves that there is great interest in the teaching profession. but that there is some concern that the Government do not appear to want to know about the matter. Will he give the House time to debate that report and to give it the recognition which it warrants?
Mr. Short: I know about that report and I have paid a great deal of attention to it. I regret that we have not had time to debate that matter, but there has been a lack of time for general debates. However, the Session still has a long time to go and I shall bear in mind the hon. Gentleman's remarks.
Mr. Faulds: Public lending right, Sir: when?
Mr. Short: I do not know.
Mr. Tebbit: Since the Boyle Report is a matter of concern to the House of Commons and not just to the Government, would it not be better if that report were published now, even though the Government cannot make up their minds about it, so that hon. Members at least are able to make up our minds? Secondly, will the right hon. Gentleman make a further statement on the Government's legislative programme? It appears that some of his back benchers know that one Bill has been dropped. Could I remind him that there are 128 Members serving on nine Standing Committees, that there are 337 Members serving on Select Committees, that there is more Government legislation queueing up for Committee room space, and that his programme is in a shambles? Does he appreciate that the Chamber of this House is almost empty most of the day because hon. Members are upstairs in Committee discussing damned silly Bills that ought never to have had a Second Reading? When will he straighten out the situation?
Mr. Short: The first part of the hon. Gentleman's rather long supplementary dealt with Boyle. The Government felt that it would be for the convenience of the House if we published our recommendations at the same time as the report was issued. [Horn. MEMBERS: "When?"] As for the legislative programme, I pay tribute to all the work which is being done in Committee. It is the heaviest programme for many years. By the time prorogation comes along, that programme will all be on the statute book.
Mr. Spriggs: My right hon. Friend said before the Spring Recess that the Finer Report would be debated in the near future. Early next week there is to be a national lobby by one-parent families. They are coming to the House of Commons to demonstrate about their problems. Will he give a date for that report to be discussed so that we may advise our constituents about their future?
Mr. Short: No, Sir. I am only announcing business for next week. I hope that before the end of the Session we shall have a debate on the Finer Report. I agree with my hon. Friend that it is an extremely important matter and I would remind him, as I did last

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week, that my right hon. Friend the Chancellor of the Exchequer has already implemented one part of the report. But I agree that the House should have an opportunity to debate it.
Mr. John Davies: I recognise the modest advance made by the Government in agreeing to take legislation on European matters on Fridays rather than at midnight, but will the right hon. Gentleman give consideration to debating the report of the Select Committee on Procedure so that we may have these instruments in some orderly form?
Mr. Short: I agree. I shall arrange this debate at the earliest possible moment, but I am afraid that it will not be next week.
Mr. Ward: My right hon. Friend will recall that it is nearly six months since the House was cut off in the middle of debating the Road Traffic (Seat Belts) Bill. In view of the importance of people using seat beits—I have in mind the suspended state of my right hon. Friend the Member for Newham, North-West (Mr. Lewis)—will my right hon. Friend bring forward that legislation this Session?
Mr. Short: I am sorry that we were suspended mid-air on the Bill dealing with seat belts. I will bear in mind my hon. Friend's comments and the Second Reading will. I hope, be completed in due course.
Mr. Goodhart: May I press the Leader of the House on the Road Traffic (Seat Belt) Bill? According to the Ministry of Transport's own figures, 600 people have died unnecessarily because we have taken no action on that legislation.
Mr. Short: There is some argument about the significance of the figures, but it is an important subject and I shall arrange for the Second Reading to be completed as soon as I can find the time.
Mr. Ron Thomas: The House rightly spends considerable time in examining the requirements of manufacturing industry, but would my right hon. Friend consider the possibility of allocating some time to a debate on banking, insurance and other financial institutions and the economic power which they exercise, and will he link that to the role of the Bank
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of England and its relationship to sterling, and similar matters?
Mr. Short: I am afraid that I cannot provide any time before the Summer Recess for general debates on such matters but, as I said to the right hon. Lady, the Leader of the Opposition, I should have thought that there will be an opportunity before the recess to debate economic and financial matters at some length.
Mr. Peyton: Is the right hon. Gentleman aware that one of the most damaging things the Government can inflict on industry is uncertainty? Will he clear up the position of the aircraft and shipbuilding industry as soon as possible and make a statement today or next week on the Government's intentions? The situation has not yet been made clear. Secondly, may I pick up the point mentioned by my hon. Friend the Member for Chingford (Mr. Tebbit) and draw attention to the ridiculous situation in the Standing Committee work load? Members of this House are forced to spend such an inordinate amount of time in Standing Committees that their chances of taking part in the main forum of debate in the Chamber are severely limited. There are, as my hon. Friend said, 128 Members taking part in Standing Committee proceedings and there is a further queue of other legislation at this time of the year, as the right hon. Gentleman knows. Is he aware that in his capacity as Leader of the House, he is doing a singular disservice to Parliament in presenting a congested, wretched legislative programme?
Mr. Short: The legislative programme could not be more relevant to the problems of this country, particularly the Industry Bill which is aimed at one of the country's major problems, namely low investment in industry. The legislative programme is absolutely essential and relevant to Britain's present problems. I am sorry about all the Members serving on Committees. The number is very large at present, and I have already paid tribute to the work being done by hon. Members in Committees. I am sorry that the burden is so great.
The right hon. Gentleman is correct to say that there should be certainty in these matters. But let me make it clear that the one thing that is certain is that the

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Government will proceed with the Bill dealing with the aircraft and shipbuilding industry. [HON. MEMBERS: "When?"] I do not know when. I am announcing next week's, business. But that legislation will be proceeded with and is one of the Government's top priorities. However, I shall see whether it is possible by this time next week to give a clear indication when the Second Reading will be. I shall repeat what I said, because clearly the right hon. Gentleman is seeking to create doubts about the matter. The Government will proceed with the Bill as soon as possible.
Mrs. Renée Short: Does my right hon. Friend recall that a few weeks ago he told me at another Business Questions session that he would shortly be bringing forward his proposals to reorganise the way in which this House is run, including its sitting times? When will he bring those proposals forward? Shall we have an opportunity to debate the matter before the Summer Recess, bearing in mind that the present system places a heavy burden not only on Members of Parliament but on the hundreds of people who work in the House when it is sitting?
Mr. Short: It will not be before the Summer Recess——
Mrs. Renée Short: Why not?
Mr. Short: Because there is no time. I am planning to do this as soon as possible, and I would hope that the review of procedure will go very much wider than the hours of sitting.
Mr. Warren: In giving consideration to the Boyle Report, will the Leader of the House urgently and seriously consider as well the problems facing all hon. Members who have been appointed to the Council of Europe and the Western European Union, who are having to pay out of their own pockets for travelling, secretarial and accommodation expenses while representing this House abroad?
Mr. Short: I have met representatives of the people serving on these bodies and I hope to make an announcement on the matter in the next day or so.
Mr. Molloy: is my right hon. Friend aware that there is growling concern at the ever-increasing cost of ordinary
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household goods and that this is causing grave consternation, particularly when people see firms imposing these increases and making very high profits? Will my right hon. Friend consider a debate solely on prices as soon as possible?
Mr. ShortNo, I cannot promise that. However, as I have said twice already, there will certainly be an opportunity before the Summer Recess to debate economic affairs generally.
Mr. Reid: Does the right hon. Gentleman recall saying when he wound up the devolution debate that he would be seeking ways and means of making known Government decisions on devolution on an interim basis? Since then there have been leaks in the Press, but little has been said in the House. The latest example of that was a long piece in The Times on Monday indicating that the Government, contrary to Kilbrandon, have decided against a separate Civil Service for Scotland? Are there to be any interim announcements, and when can we expect a statement on the Civil Service?
Mr. Short: The last point is not decided by the Government. I read the piece by Mr. Hennessy in the paper the other day. As I promised, there will be a White Paper in the autumn—at the end of September or the beginning of October—which will set out our decision on this matter and cover most of the essential points in the devolution exercise.
Mr. Loyden: Does my right hon. Friend accept that his statement about the Bill to nationalise the shipbuilding and aircraft industries will be met with great disappointment by workers in those industries? Since there is bound to be some degree of uncertainty, particularly in the shipbuilding industry, will my right hon. Friend provide an early debate on the Government's intentions for that industry in the interim period?
Mr. Short: The one thing that there is no uncertainty about is the Government's determination to proceed with the Bill at the earliest possible moment. The industry is entitled to know when the Second Reading will be, and I shall try to ensure by this time next week, or even before then, that we make that known.
Mr. Clegg: Is the Leader of the House aware that his answers about the congestion of the business of the House are totally unsatisfactory? Will he take into account not only that Standing Committees are meeting in the mornings but that four Standing Committees will be meeting this afternoon, and that that effectively rules those Members out of participation in the Chamber? Expressing sympathy with them is not enough. He ought to put his own House in order.
Mr. Short: For the greater part of the time of the last Conservative Government, Committees were meeting in the afternoon. There is nothing new about the congestions.
Mr. Dalyell: At a time when the House is concerned about the Boyle Report, will my right hon. Friend bear in mind the 140 members of the Assembly in Edinburgh who will be content with nothing less than post-Boyle salaries? May we have a proper costing of these proposals in the devolution White Paper?
Mr. Short: I will bear my hon. Friend's request in mind.
Mr. Rees-Davies: Will the Leader of the House give prompt consideration to Early-Day Motion No. 551 on Cyprus?
[That a Select Committee be appointed to visit Cyprus on a fact-finding mission and for the purpose of examining what steps the United Kingdom may reasonably take to comply with their responsibilities imposed under the Treaty of Guarantee (Command Paper 1253):
That the Select Committee shall consist of Ten Members.
That the Select Committee shall report upon their findings to this House and pay particular regard to the plight of British residents in Cyprus and any steps recommended to assist in this regard.] He will have seen that there is support from all quarters of the House for the proposal that it is time for a Select Committee to visit Cyprus on a fact-finding mission? Will he and the Foreign Secretary give this matter very early attention, and, I hope, set up that Select Committee?
Mr. Short: The hon. and learned Member will recollect that my right hon. Friend answered questions on this subject on 21st May, saying that he was sympathetic to the idea of a group of hon.
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Members going to Cyprus and that he would look into the matter. I will look at the question with him to see what we can suggest.
Mr. English: May I join with the Liberal and Conservative Members in referring to the Boyle Report? If the Government are embarrassed in their negotiations with the TUC because Boyle has reported, surely in a free country the Government can publish the report and allow not only us but all our constituents to consider the recommendations and whether they should be implemented. [HON. MEMBERS: "Another referendum?"] Why does my right hon. Friend not trust the public on this matter?
Mr. Short: It is a case not of being embarrassed but of the report being complicated and of the Government wanting time to consider it. I think it would be for the convenience of the House if we published the report and made our decisions at the same time.
Mr. Hastings: In the present economic and legislative crisis of congestion among the Standing Committees, to which the Leader of the House has himself alluded, how can he maintain that the Government's programme is relevant so long as he is determined to proceed with the ridiculous Hare Coursing Bill? Will he think again and do away with it?
Mr. Short: There is no legislative crisis. A great deal of hard work is being done by a lot of hon. Members to get through a programme which is absolutely relevant to the problems of the country. It is important to deal with cruelty, whether of animals, children, or anyone else.
An Hon. Member: And Members of Parliament?
Mr. Cryer: Does my right hon. Friend accept that his statement on the aircraft and shipbuilding nationalisation Bill is very welcome, and will he accept the assurance from the Government back benchers that there are many hon. Members willing to man the Committees to see this Bill through? If necessary, we will even get the lawyers in to spend some time on it. Are we to have an early opportunity of rejecting the four amendments that were made undemocratically in that undemocratic place along the corridor to the Housing Finance (Special Provisions) Bill?
Mr. Short: I am sure that hon. Members on all sides will co-operate to get the shipbuilding Bill through when it comes before the House because it is relevant to the problems the country is facing. On my hon. Friend's second point, my right hon. Friend the Secretary of State for the Environment will make known his views on the amendments when the Bill returns to this House from another place.
Mr. Aitken: Will the right hon. Gentleman give an assurance that as soon as the sub judice ban is lifted the House will be given an opportunity to debate the Government's handling of their attempts to suppress publication of the Crossman Diaries? Is he aware that there is very deep concern about this possible threat to publication freedom, and the sooner we debate the matter the better?
Mr. Short: The Government have made no attempt to suppress any diaries. Action has been taken by the Attorney-General in his official capacity as a Law Officer. The Government have not even considered these diaries. [Interruption.] If hon. Members will not accept what I say, I cannot help them. I reiterate that the decision was taken by the Attorney-General in his official capacity as a Law Officer.
Sir W. Elliott: Returning to the right hon. Gentleman's statement on proposed legislation for the aircraft and shipbuilding industry, may I ask whether he has taken note of the published remarks of the Chairman of the Swan Hunter Group today on the detrimental effect of this proposed legislation on the shipbuilding industry?
Mr. Short: The hon. Gentleman and I know the chairman of that company. We have known his views on this subject for many years. There is no change in the views he has expressed today.

QUESTION OF PRIVILEGE
Mr. George Cunningham: I rise on a point of privilege to ask you, Mr. Speaker, to take notice of what appears to be a prima facie breach of the privilege of this House committed yesterday by Mr. Arthur Scargill, President of the Yorkshire Area of the National Union
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of Mineworkers and a resolution of the area council of the NUM on which his remarks were based. I shall, of course, supply you with copies of the many reports which have appeared in the newspapers today.
The resolution appears to contain these elements: first, that no Member of this House sponsored by the Yorkshire Area of the NUM shall vote or speak against union policy on any issue which affects the coalmining industry; second, that no such Member shall actively campaign or work against the union policy on any other major issue; and third, that if any such Member refuses to agree to these guidelines or violates them, the area council shall withdraw sponsorship from that Member of Parliament.
The resolution is said to continue:
"We wish to make it clear that the Yorkshire Area will no longer tolerate a situation where a miners' MP accepts the privilege of sponsorship and then demands the luxury of independence from union policy."
Among the statements attributed to Mr. Scargill in the Press today, is most importantly, this one which appeared on the news tapes yesterday and is printed in the Sun today:
"Miners are entitled by virtue of their sponsorship to tell their Members of Parliament which way to vote."
I do not intend to elaborate on those statements. They hardly require it. May I remind you, Mr. Speaker, that the question of the sponsorship of Members was exhaustively investigated in 1947 and although sponsorship as such was by no means condemned, and nor was the termination of sponsorship by the sponsoring authorities, it was clearly stated in the 1947 report that it would be wrong to use the termination of sponsorship as a threat to affect a Member in the proper discharge of his duties?
I am not, therefore, asking that the question of sponsorship should be referred to the Committee of Privileges. Nor am I asking that the question of the sponsorship of the NUM should be so referred, because Mr. Joe Gormley, President at the national level of the NUM, has not only not associated himself with the statements of Mr. Scargill but has dissociated himself and the national union from them. [Horn. MEMBERS: "Hear, Hear".] He has stated that position on many occasions.

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I therefore ask you, Mr. Speaker, to consider this matter between now and tomorrow, and, if you are minded that there is a prima facie case involved in these statements, to permit precedence to be given to a motion so that the Committee on Privileges can go into the matter carefully and exhaustively and bring a recommendation to the House.
Mr. Speaker: Is the hon. Member relying upon some documents?
Documents handed in.
Mr. Speaker: In accordance with modern practice I will consider the matter and rule upon it tomorrow.

QUESTION OF PRIVILEGE

  REGIONAL AFFAIRS
  Motion made, and Question put forthwith pursuant to Order [9th June].
  That the matter of North West of England Affairs be referred to the Standing Committee on Regional Affairs.—[Mr. Edward Short.]
  Question agreed to.

STANDING COMMITTEES (MEMBERSHIP)
Mrs. Hayman: On a point of order, Mr. Speaker. May I ask for your guidance on a matter affecting the rights of back benchers of this House?
I have twice spoken in Second Reading debates on subjects in which I have an interest and have indicated through the usual channels a desire to he on the
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Standing Committees considering those Bills. I do not wish in any way to criticise the Committee of Selection but I would like to ask your advice as to how I can criticise the usual channels which filter through to the Committee of Selection the names of people least likely to cause trouble in their eyes but also least likely to contribute the views of backbench Members of this House? I beg your guidance.
Mr. Speaker: This is clearly a matter in which I ought to walk delicately. I will consider this and see whether I can in any way help the hon. Lady.
Mr. Spriggs: Further to that point of order, Mr. Speaker. This motion refers to the North-West of England Standing Committee on Regional Affairs. Would it not be correct for you to state from your office that every Member representing constituencies in the North-West should be represented on that Standing Committee?
Mr. Speaker: I do not think that that is a matter which is for me today. Again I will consider the point raised by the hon. Member.
The Lord President of the Council and Leader of the House of Commons (Mr. Edward Short): Further to that point of order, Mr. Speaker. May I point out that every English Member is a member of the Committee?
Question put and agreed to.

ORDERS OF THE DAY

  WELSH DEVELOPMENT AGENCY (NO. 2) BILL [Lords]
  Order for Second Reading read.
  4.7 p.m.
  The Secretary of State for Wales (Mr. John Morris): I beg to move, That the Bill be now read a Second time.
  This is an historic day for Wales. For the first time ever we are to discuss a wholly Welsh Bill on major economic and environmental questions. This follows from the Government's aim of ensuring there are in Wales effective instruments to tackle our real problems. In this Session we hope to secure the seal of parliamentary approval for this agency and also in the same period for the Land Authority for Wales. They are two major and badly needed organisations designed and tailored to meet the needs of Wales. In a matter of days, moreover, there will be transferred to the Welsh Office major industrial powers. These proposals add up to an unprecedented shift of power and effective machinery for decision-making to Wales.
  It is against this background of transfer of power and the creation of new institutions that I ask the House to consider the Bill. We are breaking new ground in setting up an organisation in Wales devoted wholly to the development and reinvigoration of the economy and the environment. We are doing more. We are giving it the powers and resources necessary for success.
  This historic day has been delayed by the actions of the hon. Gentlemen opposite who man the main Opposition Bench. It is recognised that the leadership of the Conservative Party in Wales today is as much out of touch with the needs and aspirations of Wales as were the dozens of English Conservative Members who trooped in to stand up in their support when the motion to send the No. 1 Bill to the Welsh Grand Committee was lost.
  The Secretary of State for Scotland (Mr. William Ross): And the Scottish Tories.
  Mr. Morris: And the Scottish Tories, as my right hon. Friend reminds me.
  The Conservative opposition are, of course, standing on their heads. In the last General Election their alternative to devolution was the development of existing institutions. Select Committees, the Welsh Grand Committee—all had a great future. But the moment we sought to use the Welsh Grand Committee they lost their nerve. They knew it would reveal how unrepresentative they are of the people of Wales and how unresponsive their philosophy is to its needs.
  The Bill, despite the Conservative Party, has shown in the welcome it has received how Wales can be united. When I took office I said that one of my aims was to seek to unite the nation of Wales. This does not mean that we, who are traditionally contentious, should agree on everything—far from it—but there is more to unite us than to fragment us. The agency proposals are a practical demonstration of the way we can unite, and the overwhelming majority of Welshmen can be proud of this.
  The Bill comes to us with the title "No. 2 Bill" after much discussion in another place. As a result, it differs in several respects from the Bill we originally put forward. There have been several improvements as a result of amendments which the Government were ready to accept—for example, on the size of the board of the agency and powers of entry. But I have to say—with real regret—that in the Bill's passage through the various stages in another place some substantial damage was done. I want to make it clear straight away that we intend to repair this damage fully during the Committee stage.
  On two occasions the Opposition peers attempted to savage the Bill. They tried to get their teeth into two major questions: first, the proposal that the agency itself should carry on industrial undertakings and should be empowered to establish and carry on new undertakings; secondly, that the agency should have a responsibility to promote industrial democracy in undertakings which it controls.
  Opposition peers sought to hack away at these proposals, mainly, I believe, because they have a parallel in the Industry Bill and were seen in the context of the Government's aim to establish a National Enterprise Board. Amendments

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  were carried which, if allowed to remain, would have the effect of preventing the agency from establishing undertakings or promoting industrial democracy. I shall have more to say of this later, but let me say this now. The amendments introduced showed how far away Opposition peers and those who share their views are from the needs and thoughts of those who day by day by their work contribute to the Welsh economy.
  The discussion in another place certainly did not reflect the wishes of the great majority of working Welshmen—whether in the steel complexes of South Wales and North Wales, the coal industries of the valleys, or the smaller but none the less important and growing manufacturing industries in rural Wales.
  Despite the delays, I am determined to get the agency into operation by the end of the year. I am determined—and I am sure this view will be shared by all who have the best interests of Wales at heart—to see speedy progress on the remaining stages of the Bill.
  It may be helpful briefly to remind the House of the background to the Bill. Earlier this year I published a consultative document setting out the Government's ideas for a development agency. We had long, purposeful and helpful talks with all interested organisations. As a result I was able in the light of the ideas expressed in these discussions, to go ahead and prepare the No. 1 Bill. In doing this, I knew that there was almost universal support for the establishment of a Welsh Development Agency. I know that the objectives I proposed for the agency were approved of within Wales. All consulted saw the need to accelerate the economic and industrial development of Wales and to seek to develop the environment in a way consistent with that objective.
  Our environment is not to be further squandered and unnecessarily despoiled. So often history has taught us that the price of industrial advance was the rape of our fair country. Industrial advance there must be, but advance in harmony with the environment and this together with the urgent repair of the scars of the past. This is the bill that our generation has to pick up.
  Against this background, there was approval of the further objective of bring-
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  ing together in one organisation a group of functions concerned with industrial and environmental development.
  There was, I regret to say, a little less unanimity on the proposals to give the agency new regional development functions analogous to those which the National Enterprise Board will have in England. I hope, however, that in time and after experience those who are still genuinely concerned about this aspect of the agency Bill will come to realise that it is an essential part of the scheme.
  We are discussing these proposals at a time when the economic situation is very serious indeed. The economy of Wales as part of the economy of the United Kingdom is under strain, and much needs to be done by all concerned to reduce this strain. In the short term the proposals for an agency cannot be of direct help, but I have no doubt at all that once the agency is in operation it will bring powerful additional support to our battle for the health and the growth of the Welsh economy The fact that the Government are prepared to go ahead with this, and the comparable Scottish agency proposal introduced by my right hon. Friend the Secretary of State for Scotland yesterday, at the present time show the faith we have in the longer-term prospects of the economies of Wales and of Scotland.
  It may be helpful in introducing the proposals if I mention by way of emphasis some of the more important points.
  Clause 1 of the Bill gives the agency a clear responsibility to further economic development in Wales, to promote its industrial efficiency and international competitiveness, to provide, maintain and safeguard employment in Wales, and to further the improvement of the environment. These are broad, wide-ranging responsibilities.
  There has been some fear that the agency is being given overriding—indeed, even dictatorial—powers. This fear is unjustified. It is in no way my intention that the agency will be in a position to carry out its responsibilities in any dictatorial way. On the one hand, the Bill provides me with powers of general and specific direction—controlling powers. On the other hand, the agency will carry out its responsibilities in ful partnership with existing organisations and local authorities. There is nothing in the Bill which

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  would allow the agency to take over from or supplant any existing organisation—with, of course, the main exception of the Welsh Industrial Estates Corporation.
  I see the agency—and I underline the word "agency"—as a strong executive arm, with the power to act for the benefit of Wales and with sufficient finance available to it. It is an additional piece of executive machinery, and I will ensure, and indeed I am certain the board of the agency will also ensure, that the agency carries out its activities in the fullest co-operation and partnership with others in Wales who have a responsibility for developing industry and for the environment.
  As I indicated earlier, Clause 1 does not wholly reflect the Government's intentions. It is lacking in two specific and important powers. First, the Government believe that the agency must have powers to establish and carry on new industrial undertakings. It needs to have an interventionist rôle, and I make no apology for using the word "interventionist". The people of Wales have been crying out for more interventionist policies for decades. The existing division between industry and Government has not worked satisfactorily and there is the strongest case for bringing industry and agencies of the Government more closely together to their mutual advantage and particularly to the advantage of those whose employment prospects are at stake. It is the jobs of Welsh people that we are concerned with. It is providing the means so that the right to work can be exercised in Wales. I give a pledge to seek to restore this particular provision.
  Mr. Ian Grist: If the people of Wales are crying out for these interventionist policies and bodies which the right hon. and learned Gentleman was mentioning, why was there such opposition to the proposed Welsh rural development board?
  Mr. Morris: The hon. Gentleman will be aware that there were some facets of that board which were not popular. I regret deeply the opportunity lost because of a combination of people of Mid-Wales who should have known better. Mid-Wales has suffered because of that. I speak as a Mid-Walian. I deeply regret that it will be my responsibility now, many years later, through the
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  agency and other means upon which the Government decide, to make up for the years lost and the real money that has been lost in Mid-Wales.
  Mr. Emlyn Hooson: Rubbish.
  Mr. Morris: The hon. and learned Gentleman has a grave responsibility for the millions of pounds lost to Mid-Wales and the lack of development throughout Mid-Wales.
  Mr. Hooson rose——
  Mr. Morris: I was glad to be able to announce the other day a major programme of factory building to arrest the loss of population in Mid-Wales.
  Mr. Hooson: I am grateful to the right hon. and learned Gentleman for suddenly remembering his parliamentary courtesy, having named me. Does he not know that the people of Mid-Wales had no objection as such to a board, but they had grave objection to the violent powers of interference with the rights of the individual? People found this highly objectionable. Many of these objectionable features will not now, we hope, be found in this agency. There is a world of difference between the two things.
  Mr. Morris: As the hon. and learned Gentleman is well aware—I made it quite clear, although I shall repeat it—opportunity and years have been lost in Mid-Wales. I understand fully the nature of the objection. But the truth of the matter is that years have been lost in Mid-Wales and millions of pounds have been lost. I understand the objection. I am not entirely obtuse. I want to make it quite clear that there is a grave responsibility, and the hon. and learned Gentleman shares this, for the years that have been lost. I shall seek to ensure that we get over these objections and satisfy the people of Mid-Wales that their objections are unfounded. But the problem that faces us is to try to repair and make up for the lost years, lost because of opposition from hon. Members on the Opposition side of the House, and from the Liberal bench primarily.
  We shall also propose the restoration to the Bill of the agency's responsibility to promote industrial democracy in undertakings which it controls. I have no doubt that, following the precedent in

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  another place, hon. Members will seek to argue in favour of the amendment—new Clause 1(3)(d)—with its weasel form of words about industrial relations. But they miss the point. The Government are concerned to improve decision-taking at all levels of industry—to involve the whole work force. There is an obvious need for changes in the class structure of industry and in the balance of power and responsibility within industry. That is what the Government seek to ensure in undertakings which the agency controls.
  Mr. Nicholas Edwards: Will the right hon. and learned Gentleman give way?
  Mr. Morris: I hope that the hon. Gentleman will let me proceed. He will be speaking shortly, and others will wish to speak in the debate.
  Mr. Edwards: This is an important point, because the right hon. and learned Gentleman is dealing with the question of industrial democracy. Surely what happened in the other place was that it sought a definition of what that phrase means. If the Minister is attacking what has been put in its place, will he now tell the House, so that we clearly understand the Government's objective, what the phrase "industrial democracy" does mean?
  Mr. Morris: On the Government side of the House that phrase is easily understood. I can quite appreciate how some parts of the Opposition side of the House have no idea what industrial democracy means. I am not surprised that this has been objected to in this way, but I shall return to this matter in the days ahead in Committee. I am sure that we can spend a little time in educating the hon. Gentleman further, or perhaps beginning to educate him, about the problems of industrial democracy.
  This first clause has also given rise to heated discussion about parallels with the National Enterprise Board. There has been much misconceived and misdirected criticism, much of it based on political dogma. But, for those who are able to clear their minds of dogma, let it be explicit: the Welsh Development Agency will in no way be an arm of the National Enterprise Board. Where the
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  powers to be given to the agency are similar to those of the National Enterprise Board, this is because these are sensible and appropriate powers. The agency will be a body separate from the National Enterprise Board and will be in a position to harness its industrial powers in a distinctive way to meet the special needs and circumstances of Wales.
  The Government have sought to emphasise this in every possible way. There have been many statements as the Industry Bill has gone through its various stages. There has been much correspondence with the Ministers concerned and recently a speech by Sir Don Ryder to the Development Corporation for Wales, in Cardiff. But certain hon. Members will persist in their opposition on this score. However, I hope that, as this debate goes forward, and as the Committee stage develops, their minds will eventually be set at rest.
  I have concentrated on the industrial and the employment aspects of Clause 1, but there is more still to that clause. The clause emphasises the agency's rôle on the environment. The agency will accept, carry on and develop certain existing activities and responsibilities—for example, on derelict land clearance—and it will take on new responsibilities, particularly in urban areas; and it will do all this not in competition but in partnership with local authorities and others equally concerned with the environment.
  The agency will also have power to promote Wales as a location for industrial development. This is a rôle which the agency will certainly want to develop slowly and carefully so that it takes completely into account the existing work carried out by organisations such as the Development Corporation for Wales and local authorities. Much helpful work is already being done but more needs to be done, and to be done as a matter of co-operation between all concerned.
  Mr. Donald Anderson: Does that include overseas representation by the agency?
  Mr. Morris: Yes, certainly. I think that the Bill makes it clear how the agency may act and the consents which are necessary when it acts outside Wales.
  I turn now to Clause 2 which sets out the constitution and status of the agency.

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  As Clause 1 makes clear, the agency has a big task. It will demand people of stature, strengh and wide experience to carry it out. I intend that the board shall be composed of people of outstanding skills and experience rather than simply representatives of particular groups. The board will, however, be able to call on additional advice and expertise. Clause 5 provides for the setting up of advisory sub-committees. For example, the board might wish to set up an economic sub-committee or one concerned with the environment.
  I have not yet come to any decision on the location of the agency's headquarter offices or any out-stations. I have received proposals, well-argued proposals, from several areas of Wales,—for example, from Bleanau Gwent—in favour of Ebbw Vale and from both North-East and North-West Wales. I shall be discussing these proposals further. I want to look at all the needs of the whole of Wales and to make sure that the agency's all-Wales remit is reflected in its locations. At the same time we must bear in mind that much of the agency's work will be to carry out the responsibilities of the Welsh Industrial Estates Corporation. To that extent it will make sense for the agency to continue to use existing sites and premises of the estates corporation.
  I will mention Clause 3 only briefly and refer specifically to the agency's power to carry out inquiries, investigations or researches. For example, the agency might well take over a derelict land survey of Wales and sponsor research into specific economic problems. To that end, the agency will need to have a specific research function and the staff to carry it out. But once again I want to make it clear that the task of the agency is to work in partnership. It would make no sense at all if it were to supplant the rôle of local authorities, for example in structure plants; and the overall responsibility for determining economic strategy for Wales in the context of the United Kingdom as a whole will remain with me.
  I have spoken at several points about partnership. This is what is emphasised in Clause 4, in particular the interrelationship with local authorities and with the development corporations of new towns. I believe that as a result of the consultations earlier this year there is a
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  full understanding by local authorities of the way they and the agency will be able to work in partnership. The agency will not be in a position to take over local authority powers. I would underline that. For example, the agency will have no special planning powers. These will remain with local authorities. In the same way the agency will not overlap or interfere with the operations of the new town development corporations. Rather, the way is open for them to work together.
  I hope it is clear that rural Wales falls as much within the agency's remit as does urban industrial Wales. The agency's remit covers the whole of Wales, and I regard it as having a responsibility to contribute to developing rural as well as urban Wales. This naturally raises questions about the special needs of mid Wales and the concept of a Mid-Wales Development Board. I have made it clear throughout this year that we are giving priority in this Session to establishing a Welsh Development Agency with an all-Wales remit. But I have made it equally clear that we are giving the most careful consideration to what else may need to be done in rural Wales in the light of the developing rôle to be given to the Welsh Agency and the responsibilities of existing bodies.
  I turn now to Clauses 6, 7 and 8, which transfer the work and responsibilities of the Welsh Industrial Estates Corporation to the agency and give the agency the important powers of providing sites and premises for industry and providing services for the development of industry, including, may I say here, any developments connected with the successful exploitation of the Celtic Sea.
  The Welsh Industrial Estates Corporation has been a good servant of Wales since it was established under the Local Employment Act 1960. It owns 375 factories at an insured value of over £100 million. It has gross rents totalling almost £2·5 million a year. It holds some 2,600 acres of land and its annual expenditure in 1975–76, including a special provision for the support of the construction industry, will amount to almost £11 million. This is a sizeable responsibility and I wish to pay tribute to all those, both now and in the past, who have made the Welsh Industrial Estates Corporation such a successful part of the Welsh industrial scene.

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  The agency will now take over and I hope develop and expand the work of the estates corporation, and it will carry on this work as part of the agency's responsibilities to the Secretary of State for Wales. Hitherto, the main directions to the estates corporation have come from Whitehall as part of the overall central control of the three estates corporations in England, in Scotland and in Wales. There will, of course, be continued cooperation and links with estates corporation work in England and in Scotland, but from the establishment of the agency the main control of the estates corporation work in Wales will come from within Wales for Wales. It has already been announced that as from 1st July the Welsh Industrial Estates Corporation will be responsible to me and to the Welsh Office. This will be a most helpful transitional stage, a period of consolidation, before the formal transfer to the agency. I look forward to a further long period of successful estates corporation work.
  Clauses 10 and 11 both refer to regional selective assistance under the 1972 Industry Act. As from 1st July these powers within Wales will fall within my responsibility and will be operated through the Welsh Office.
  Sir Raymond Gower: I am grateful to the right hon. and learned Gentleman for giving way. Before he leaves the point about vesting of the industrial estates, under which the new direction will come to the agency, is there any implication—I am merely asking for information—that there will be a degree of competition between the Welsh Agency and the Scottish Agency and the comparable body for England for new industry? This would appear to be an important change if that is the case.
  Mr. Morris: In any powers regarding industry and the giving of assistance to industry, it is obviously necessary that one should be able to keep the various organisations which have facilities at their disposal in tandem wherever there are particular enticements. Therefore, in any responsibilities that I shall carry, or where an agency acts on my behalf, it is necessary for the left hand to know what the right hand is doing. I hope that that satisfies the hon. Gentleman.
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  I take this opportunity to welcome to the Welsh Office those staff of the Department of Industry in Wales who will transfer with the work. Their contribution in the past has been great and has been welcomed and respected by industry. I know that it will continue and expand and I am making sure that there will be a smooth transition with the minimum of disruption to staff and, equally important, the minimum of disruption to industrialists and others who use the services.
  Hon. Members opposite, I know, are inclined to argue that the powers of the 1972 Industry Act are enough. Why go beyond these powers, they ask, in their forlorn attempt to oppose proposals in the Industry Bill and the Welsh Development Agency Bill. I hope that hon. Members will forgive me if I remind them of the comments I made on the 1972 legislation during our debate on Welsh Affairs on 21st March 1974, in the early days of my office as Secretary of State for Wales. I then criticised the deplorable economic performance of the previous administration and said:
  "Like Saul on the road to Damascus, the last Government saw a blinding light, and in the spring of 1972 they reintroduced investment grants—although in an attempt to cover up their past folly they now called them regional development grants. Saul was renamed Paul."—[Official Report, 21st March 1974; Vol. 870, c. 1355.]
  Mr. Fred Evans: How does a blind man see a blinding light?
  Mr. Morris: May I say,
  "By their fruits ye shall know them"—
  and to the extent that I mentioned the 1972 Act, it was an improvement on their past performance. But the fact remains that the 1972 legislation is demonstrably not enough today. I must again emphasise that there is a need for more direct links between Government and industry of the kind which an agency can promote. This is one reason why the agency is so much welcomed by those whose day-to-day life depends on the health of Welsh industry.
  Clause 10 provides for the agency in certain circumstances to act as a channel for regional selective assistance. How often this power will be used will be for determination by me in the light of individual cases. I think we may expect, however, that regional selective assistance

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  will generally continue to be handled directly through the Secretary of State.
  It may be argued that giving the Welsh Office control over regional selective assistance could weaken the agency's rôle. I do not accept this argument. The two rôles are as distinct as they are complementary. The agency will be expected to act on its own initiative to seek out opportunities and directly involve itself in industry. This type of enterpreneurial rôle is best performed by an agency. The agency will be able to give itself wholeheartedly to this rôle, since it will not have to bear the considerable burden of handling requests for assistance. I think that Parliament would feel it right that the major decisions on requests for assistance should remain directly under the control of a Secretary of State responsible to Parliament, especially since there are often in such cases most sensitive employment implications.
  If, however, the powers in Clause 10 may be used only sparingly, it is certain that those in Clause 11 will be used regularly. As a result, I shall have available to me a statutory board replacing the present non-statutory board—to advise me on all Section 7 cases in Wales. This board will also have to develop a close contact with the agency, and there could well be a need for some overlapping of membership either with the agency's board or with one or other of its sub-committees.
  Clauses 13 and 14 deal specifically with the environmental rôle of the agency. The agency will have a dual responsibility here—developing, redeveloping and improving the environment and grant-aiding local authorities in carrying out derelict land clearance work and carrying out such work itself. There is no doubt that this work needs to be done within Wales and that more resources, both of people and finance, must be devoted to it. It is no good developing industry unless at the same time the environment is preserved where it should be and developed where it needs to be. The agency will be in a position to help ensure this. The environment is a resource which must be as carefully husbanded as any other resource in Wales.
  For the removal of any doubt, I should emphasise here that the agency will be expected to bring forward proposals for
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  approval in full consultation and harmony with local authorities. It will take account of expert advice from bodies such as the Countryside Commission and the Nature Conservancy Council. The agency will have to obtain planning permission from the local planning authority on every occasion when this is required. There is no question of the agency being put in a privileged position.
  Local authorities in Wales have won an outstanding reputation for their work on derelict land clearance, and, as I have said, their powers remain untouched. We are seeing a revolutionary change in that emotive title, "How Green was My Valley", from the past tense to the present. In many places the "was" is becoming "is"
  The Bill emphasises that local authorities in Wales will continue to have a major role in land clearance schemes, whereas I note that in the Scottish Bill the emphasis is on the Scottish Development Agency itself undertaking derelict land clearance schemes and relieving local authorities of that responsibility. We shall not follow the Scottish pattern in Wales. Rather we shall build on what has so far been achieved. About 19 per cent. of the derelict land in Wales has been reclaimed in the past seven years—about 6,500 acres. If, as we all hope, the Welsh Development Agency will choose to give a priority to derelict land clearance and provide a substantial, accelerated rate of expenditure, we have some expectation that something approaching half of the derelict land in Wales might be cleared by the beginning of the next decade. I feel sure that it is the wish of all parts of the House that the agency shall give priority to this work.
  As a further indication of the Government's support, the level of grant to local authorities will be raised to 100 per cent. of the net cost, and we hope that the full resources of the kind now provided by the Derelict Land Unit in the Welsh Office will continue to be available within the agency. Lest there should be any concern about delays as a result of the changeover from the Welsh Office to agency responsibility, I am making sure that there will be no halt in the on-going work on land clearance.
  Clauses 15 to 18 set out the financial rôles for the agency. There cannot be

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  criticism of the need for the agency to conform to specific financial obligations where this makes sense. For example, it is right that on that part of the agency's work which involves an industrial investment rôle it should have a specified financial objective. Equally, it is right that other activities of the agency—for example, on land clearance and environmental uplift—cannot be regulated by specific financial objectives. These would simply be inappropriate.
  The agency will have an initial financial allocation of £100 million, which can be raised to £150 million. I recognise that there are arguments that this financial allocation is not enough. But what is now to be provided represents a heavy commitment by the Government at a time of strong competing demands on the financial resources available to them. It has to be emphasised that this £100 million to £150 million is additional to expenditure in Wales on selective assistance, regional development grants and the regional employment premium. The amount allocated—and there is no specific time period attached—will allow a start to new activities such as the agency's industrial development rôle and an increase in existing levels of spending on activities which the agency will take over—for example, the derelict land clearance work. At this stage, before the agency itself has had an opportunity to discuss its priorities, I am not in a position to indicate how rapidly the agency will recommend drawing on its financial resources. But I am sure it will recommend wisely and well.
  Mr. Dafydd Wigley: Are there any guidelines to the time span over which the £100 million or £150 million can be drawn on? The question has arisen, and is sure to arise again, whether it would be reasonable to come back for more if the money were spent within, say, the first 18 months. Should the agency think of it as money to spend over three or four years? I ask in order to obtain guidance for those running the agency.
  Mr. Morris: There is no time span and no time limit. It will be for the agency to make proposals to me and, within the limits laid down by Parliament, to ensure that it has the funds available to it. I am sure that the
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  agency will make wise proposals. We are anxious to ensure that the needs of Wales are met. This is a significant tranche of money. I emphasise that it is in addition to at least £60 million a year at present spent in Wales on such matters as selective assistance, regional development grants and the regional employment premium. That is the scale of the Government's assistance to Wales.
  Clause 19 sets out the agency's powers to acquire, dispose of and take over land. The agency, in carrying out its land development rôle, must have powers to acquire and dispose of land. But it is not being given powers which in any way conflict with local planning responsibilities.
  The remaining clauses of the Bill are in a sense "bread and butter". These have been exhaustively discussed in another place and reflect amendments introduced there and accepted by the Government. These amendments—unlike those to which I have referred earlier—serve to improve the Bill and I, therefore, very much welcome this part at least of the hard work which went on in another place under the direction of that most distinguished Welshman, the Lord Chancellor, who led the Bill.
  If we put all the clauses in the Bill together we have the basis of a complete and coherent agency. The agency, like the Bill itself, is an amalgam. It has the distinct merit of bringing together in one organisation a variety of powers all directly related to the industrial process—acquiring land, reclaiming land for industrial purposes, establishing industrial estates, constructing advance factories on these estates, attracting firms to Wales, helping firms with finance and advice and so on throughout the whole stage of the industrial development process—and doing this while throughout having an eye to the preservation and the development of the environment.
  The agency will be an institution for Wales within Wales. As I have said, it will be established in Wales in the same period when new powers in the industry field are being transferred to the Welsh Office. Taken as a whole, these changes indicate a major shift of responsibility to the Principality. This gives us all in Wales a chance to show what we are

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  made of as we involve ourselves directly day by day in the economic life of Wales.
  I know that the people of Wales wish the proposals in this Bill to succeed and that they will wish the agency well. They know, as I know, that the proposals in this Bill represent a coherent and constructive way of helping to organise and sponsor industrial and environmental development in Wales where it is most
  I recommend the Bill to the House.
  4.53 p.m.
  Mr. Nicholas Edwards: The Secretary of State said that it was a historic day. It is also, I think, the first day that Wales has had on the Floor of this House for more than 15 months—in fact, since March 1974.
  It is not the traditional Welsh day debate in which Members can range widely and examine the performance of the Welsh Office in the previous year. It seems clear that the Government have little intention of giving us that debate this side of the Summer Recess. It seems that they find it appropriate that Wales should have to wait at least a year and a half before it can be given the time to which we believe it is entitled, and yet they grumble because we insisted that this debate, on a Bill that they claim to be of vital significance to Wales, should be held here and not upstairs.
  Even more extraordinary, they tried to persuade us to hold this debate last week, before the Bill had completed its progress in another place, and they tried to fob us off with half a day. Even in the last couple of days, Labour Members have been queuing at the Opposition Whips' Office to try to arrange pairs after seven o'clock tonight, on the understanding that the debate is to be allowed to fold up at seven.
  It is disgraceful that Wales should be treated with this kind of disrespect. Of course there is a place for Committee work. We should like to see a Welsh Select Committee set up without delay, but it will be a bad day for Parliament if this Chamber abandons the task of examining the principles of important Bills, and a bad day for the country it we are so casual about the planned expenditure of £100 million that we do not give an opportunity to all Members of this House to hear the Government of the
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  day justify it and defend it against criticism.
  It is because we have become so casual about this job of voting Supply or refusing to vote Supply that we are in our present mess. It is in the context of that mess, and against the background of the economic disaster that now confronts us, that we have to consider this measure.
  The Secretary of State at times has seemed to wax euphoric about the Bill, but even he was forced to acknowledge, in the Welsh Grand Committee in May, that the heart of the matter is solving the problems of the United Kingdom as a whole. He conceded that the agency to be set up by the Bill does not offer salvation for the Welsh unemployed, and today he said that in the short term the proposals for an agency cannot be of direct help. It is what he called an additional piece of executive machinery to be judged against the situation in which it is asked to operate—at best a useful tool; at worst a positive impediment to economic activity.
  It is important that we should be absolutely clear about this, and that we should face up to the fact that whatever we may think about the agency is entirely secondary to the Government's management of the economy as a whole. That, as the Secretary of State says, is the heart of the matter—and a proper mess they are making of it, too!
  The prime responsibilities of any Government in the field of economic management are: first, to create a climate in which productive industry can maintain national output at something approaching its full potential; second, to ensure the maintenance of a high level of employment; and, third, to preserve the value of the currency, internal and external.
  The Government have created a situation in which national output is back to the level of the three-day week, in which unemployment is at its highest June level since before the Second World War, and in which 25p has been sliced off the pound in the people's pocket and 27 per cent. has been knocked off the pound sterling in world markets since December 1971, so that today it stands at its lowest ever level.

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  On a three-monthly basis, the rate of Inflation in Britain has now crossed the 50 per cent. threshold into hyperinflation only eight months since the Chancellor of the Exchequer's notorious 8·5 per cent. statement.
  In Wales this June there are nearly 7,000 more people out of work than in any other June in the last 35 years. The seasonally adjusted figure of 53,000, or 5·2 per cent. of the working population, takes no account of short-time work, factories working a three-day or four-day week, or companies holding on to workers to maintain a nominal state of employment. The figure has deteriorated by ½ a per cent.—in other words, by over 5,500 people—since we last debated the matter in the Welsh Grand Committee in early May.
  During the same period the Government have done nothing to check the inflation rate, nothing to cut their own expenditure, and nothing to restore confidence in industry. By doing nothing except increase their own expenditure they are ensuring that the sickness will become more critical and the eventual cure more painful.
  We are considering the Bill at a time when there are more than 20 Government factories in Wales standing vacant, when the number of firms known to be on short-time work is approaching 100, and when the number of inquiries and first visits from outside Wales is sharply declining. The Welsh CBI report "seriously depleted order books" and that companies are holding back or cancelling investment plans wherever that is possible.
  The Welsh Secretary of the CBI writes in a letter to me this week:
  "The underlying trend of unemployment is, of course, upwards and we expect the position to deteriorate as increasing numbers of employers realise that there is not going to be an upturn in the economy in the near future and are therefore compelled to release work people."
  Mr. Anderson: Did not the Welsh Secretary of the CBI also say in the same letter that he and his members accepted this agency in principle?
  Mr. Edwards: He did nothing of the kind. I shall be coming to the views of the Welsh CBI later in my speech.
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  The architects of this disaster, the men personally responsible for this mounting national misery, are the architects of this Bill. The agency is charged with the job—in the original version it was given the duty—of furthering the economic development of Wales. But that central responsibility cannot be that of a subordinate agency. It is the job of the Government, and it is a job that this Government are failing to do calamitously.
  The Secretary of State said that the agency was a vital part of the machinery which he needed to tackle the problem. But it is absurd to imagine that the task of assisting individual companies, of stimulating job creation in individual locations or even of achieving such generally desirable social objectives as the clearance of derelict land are possible, however good the machinery, if the Government mishandle the general management of the economy.
  We also have to consider the Bill in the context of the Government's legislative programme as a whole. It cannot be judged in isolation. Clearly, it is part of a package of measures designed to achieve a Socialist objective. I do not blame them for that, because it is their belief. It goes hand in hand with the Industry Bill, and whole sections of it have been lifted almost straight from that Bill. However the relationship between the National Enterprise Board and the agency is defined—and we shall wish to return to it in Committee—it is clear that the NEB will retain some of its most formidable powers for operation throughout the United Kingdom—for example, the vesting order power of Clause 10 and the power to extend public ownership into profitable areas of manufacturing industry.
  If it were not blasphemous to say so, I should suggest that we were discussing something rather like the Trinity—a mystery in which separate powers combine to make up a whole. This interlocking relationship is well illustrated by the fact that the agency will have the duty to implement the provisions of the 1972 Industry Act as directed by the Secretary of State, but provisions from which all safeguards and all the protective clauses are being removed by the present Industry Bill.

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  Those safeguards were that the Secretary of State had to be satisfied that assistance could not be given in any other way than by the acquisition of shares. He could not acquire more than 50 per cent. of the equity capital, and he was required to dispose of any stock or shares as soon as practicable.
  It is the common phraseology, the shared objectives and the interlocking relationships of the Bills which are so alarming to many people, especially to those involved in private industry. They see the agency not as something designed to assist Welsh industry but as part of a package of State interference and State aggrandisement which they believe will be deeply damaging to private industry and, therefore, to the jobs and well-being of the Welsh people.
  Some people in Wales have rejoiced, because they claim that the Secretary of State and the Welsh Office have extracted their powers from the even more dangerous hands of the Secretary of State for Industry, whoever he may be from time to time. The Western Mail suggested in a leader that if the. Conservative Opposition curbed the Secretary of State for Wales we would be
  "…handing hard won autonomy straight back to Mr. Benn or his successors."
  In some way, it sees the Welsh Office as a more cosy institution than the Department of Industry. It is a false analysis, because these two Bills and the Scottish Bill which was debated yesterday are separate instruments to implement the will of one Government. The doctrine of collective responsibility may have been sullied a little in recent weeks, but the fact remains that a Secretary of State defined in a Bill still means any Secretary of State. This agency is to be not an independent body but the tool and instrument of the Government carrying out their collective will.
  We have to consider the Bill against the Government's handling of the economy and as part of their industrial policy. We have to judge it in expenditure terms and by its impact on industrial confidence.
  This Bill is a very different one from that originally presented to us. I suggest that it has been much improved by amendments in another place. It has had removed from it some of the worst
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  features of the original Bill, especially the power for the agency to involve itself in business competition with the private sector.
  Mr. Wigley: From the hon. Gentleman's comments on the powers which have been removed for the agency to compete with the private business sector, are we to assume that on behalf of his party he no longer welcomes competition in industry? His party has always spoken in favour of competition. Why turn down competition from the public sector in this way?
  Mr. Edwards: The competition provided in this way by the public sector can be actually destructive because of the unlimited resources available to it which can destroy private firms competing in the same area. If jobs are created in the public sector, it is done at the expense of jobs elsewhere.
  I continue dealing with the changes made in the other place, and I shall return to the topic raised by the hon. Member for Caernarvon (Mr. Wigley).
  The wording of Clause 1 has been altered so that the agency does not have laid upon it duties which could have been contradictory. It has been brought into line with the Scottish Bill. The membership of the agency has been enlarged. The selection of a chief executive, except on the first occasion, will be made by the agency and not by the Secretary of State. An attempt has been made to define the phrase "industrial democracy". The Secretary of State refused to define it today. Whatever he may understand by the phrase, here we are producing an Act of Parliament, and this is a phrase which has to be understood clearly and interpreted in the courts. The Government failed totally to provide any form of definition in the other place which would stand close examination. Finally, we have seen safeguards introduced for farmers on matters which worried those engaged in agriculture.
  Although we are still highly critical of the detailed powers of direction given by the Secretary of State and of the lack of parliamentary control, I should have been inclined to recommend to my right hon. Friends to give the amended Bill a Second Reading had it not been for the speech today by the Secretary of State.

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  [HON. MEMBERS: "Oh!"] In that speech, the right hon. and learned Gentleman made it quite clear that in reality the Bill that we should be considering in Committee was not this Bill but the one originally presented to the House. He made it clear that he intended to put back the power to form bodies corporate, to carry on industrial undertakings and to establish and carry on new industrial undertakings.
  The Secretary of State said that he sought to unite the people of Wales. I wonder whether he realised that he had within his grasp, and still has, the possibility of an agreed measure backed by all the parties and acceptable to both sides of industry. Of course, we should all have to give up something and to accept some things that we did not like. But I ask the Government whether it would not be worth surrendering one of their objectives in order to set the agency to work in an atmosphere of mutual confidence and support.
  Mr. John Morris: Is the hon. Gentleman being quite frank with the House when he says, as he did just now, that had it not been for my speech he would have been prepared to recommend his colleagues not to vote against the Bill? He knows about the Whip which was issued by his party instructing hon. Members to attend here at 10 o'clock tonight in order to vote against the Bill.
  Mr. Edwards: We had already heard speeches by Government spokesman in another place making it quite clear what the Secretary of State would do. We had been forewarned. But I am saying to the right hon. and learned Gentleman now that if he cares to say that he will not seek to put back those clauses which were taken out in another place, I shall recommend my right hon. and hon. Friends to accept the Bill which has been sent from the other place.
  Mr. John Morris: Let me try to concentrate the hon. Gentleman's mind. What was there new in my speech today about what I should ask the House to restore to the Bill other than what was said in another place by the Lord Chancellor to the same effect?
  Mr. Edwards: I agree that there is seldom anything new in any speech which
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  the right hon. and learned Gentleman makes. We had every right to expect the intransigent statement which he offered us. We hoped that he would have had more imagination, but we feared that he would not.
  The Opposition support the creation of an agency which will co-ordinate industrial effort in Wales. We welcome the environmental functions. The CBI welcomed the proposal to form a body to accelerate the economic and industrial development of Wales and to improve the environment. So do the Opposition. We think that a development agency, though no substitute for proper management of the economy by the Government, could be a useful mechanism. But the CBI in Wales has also made it clear that it deplores the powers given to the agency to take equity holdings in companies to which it has given assistance and that it is opposed to the sections which the Government are now pledged to reintroduce which would enable the agency to take over companies, to set up organisations, to do business and to complete with the private sector.
  Mr. Hooson: I cannot follow the objections of the hon. Gentleman in principle to the State taking a holding in, for example, BP. Is there any objection to that in practice? Surely we should be concerned with the way in which any industry is run. We should be concerned not so much with who owns the equity as with how it is run.
  Mr. Edwards: I said that the Government should not have power to set up organisations and take a controlling interest in organisations in competition. There is nothing in the amended Bill to stop them going into partnership. There is specific provision for them to be able to do so. I hope that in some cases they may even take that course.
  Mr. Grist: Does my hon. Friend agree that the comparison with BP is false? This applies to international companies in which the Government interfere at their peril, as we saw recently with the purchase of Burmah shares.
  Mr. Edwards: My hon. Friend makes a sound point. No doubt there will be others.
  We are told that the acquisition can be made only by agreement. But there

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  is a difference between a negotiation transacted freely between equals and one in which the agency is bidding with unlimited funds behind it. The agency can indulge in contested take-over bids. It can use its financial strength to overcome the wishes of the directors. It will be able to pay whatever price it likes so that it is impossible for shareholders to refuse taxpayers' money.
  Having taken over a company, or having set up its own company, regardless of commercial considerations, the agency will be able to compete with private companies in Wales with all the strength which its resources can give it. If we are to overcome our economic difficulties, the Government must restore the confidence of industry. They must create the right economic conditions in which firms can prosper and enterprise can be rewarded.
  The Government's insistence on restoring these powers, and their clear determination to enlarge the public sector will have a disastrous effect on the confidence of industry and will damage the relationship of the agency with industry. Nor do I believe that the agency will be equipped to take on this active entrepreneurial rôle spelt out for it by the Government. It will not be equipped to decide where individual enterprises should be established with any prospect of success. Nor will it have the management required to supervise those operations.
  Given stable market conditions and some confidence about the economy of our country, business men will usually exploit commercial openings if they exist. It is hard to see why the Secretary of State or the agency should judge circumstances better than a collective body of individual business men reacting to industrial opportunities. There can he no point in establishing factories where no markets exist for products or where the costs of operations will be uneconomic. Either the operations will fail in the long terms or be kept alive by means of ever-increasing subsidies, the cost of which has the effect of destroying other businesses elsewhere and putting other people out of work.
  The Secretary of State said that we needed an intervention body. However, speaking on Second Reading of the
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  Industry Bill about the vital need for a profitable private sector, the Paymaster-General said:
  "Any idea that we can substitute for it, that Whitehall can manage British industry, that it can take its investment decisions, its marketing decisions, its research and development decisions, would be an illusion."—[Official Report, 18th February 1975; Vol. 886, c. 1135.]
  Of course, the Paymaster-General was right.
  In another place Lord Lovell-Davis, speaking for the Government, said:
  "Wales needs an agency which can help to make Welsh-based firms more viable, more competitive and more free-standing."—[Official Report House of Lords, 12 June 1975, Vol 361, c. 563.]
  We agree. But we do not believe that that can best be done by taking over private companies or setting up new companies owned by a State-directed organisation.
  That is the principal reason why I shall urge my hon. Friends not to give the Bill a Second Reading. We must take not the Bill as it is presented to us but the words of the Government when presenting it.
  There are other aspects to which we object. My reference to a State-directed organisation brings me to the first. We object to the dictatorial powers given to the Secretary of State and to his power of specific direction. We object to the lack of parliamentary control.
  Under Clause 7(1) the Secretary of State can give the agency general or specific directions which the agency is bound to obey. It is the agency's duty to prepare and submit schemes to the Secretary of State if he asks for them. But the Secretary of State can refuse to approve them. The Secretary of State has the power to appoint the chairman and the members of the board. He can appoint the first chief executive, and would have appointed subsequent chief executives but for an amendment in the other place. He determines the financial duties of the agency. He directs the agency to exercise powers under the Industry Act 1972. None of those powers is at present subject to effective parliamentary control. Other than that, they may be referred to in an annual report published long after the event.
  As originally drafted, the Bill restricted the agency's power to appoint committees.
  Mr. John Morris: I do not want the hon. Gentleman to labour under a complete misunderstanding of the Bill. On the one hand he presses the need for more parliamentary control. On the other he objects to my powers of specific direction. I shall have the power of specific direction to ensure that there is parliamentary control. That is why the proposed body is different from the water body which was set up by the Conservative Government. The result is that hon. Members will be able to ask Questions of the Secretary of State about the activities of the body. The hon. Gentleman cannot have it both ways. He cannot object to specific actions and claim that there is no parliamentary control.
  Mr. Edwards: I hope that the Secretary of State will act on two points. I hope that he accepts the amendments we propose for the early notification of these powers when exercised. I hope that he will accept our proposal that we should have a Welsh Select Committee so that we can examine his performance and the performance of the agency.
  As originally drafted, the Bill even restricted the power of the agency to appoint committees. While dealing with that point, Baroness White, a former Minister at the Welsh Office, and a supporter of the Government, was moved to tell the Government that she would not feel inclined to serve on such a body if she were invited to do so. Like Baroness White, I thought it intolerable that the members of the agency should be so much under the thumb of the Secretary of State. A concession has now been made, but I agree with the Baroness that there are too many manifestations of "nanny knows best" in the Bill. Those were the views expressed in another place. The Government can dismiss them if they feel like doing so.
  Sadly, it is the intention of the Governernment that the agency is to be nothing more than the creature of the Secretary of State. I think that that will be a dispiriting experience.
  In Committee we shall have a great deal more to say about the powers given to the Secretary of State and the lack of public accountability. We shall seek to move amendments that will at least ensure that Parliament is informed at an early stage when the Secretary of State
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  exercises his power of direction or overrides the agency. But the most serious aspect is the lack of accountability for public money. The Secretary of State for Energy—the architect of the Industry Bill—has frequently argued the case for public knowledge about finance for the taxpayer when it is provided for individual companies.
  Accountability can be achieved only when clear-cut criteria are laid down as to the use of public funds. That concept of accountability is entirely destroyed when the Secretary of State can give specific directions to the agency and, in effect, make up the rules as he goes along. Accountability can be restored only if on each occasion the Secretary of State does that the fact is reported very soon to Parliament.
  The very first act of public accountability should occur during the Second Reading of a Bill, when the Minister should explain and justify to the House the Commons the expenditure of public money, but that has been a duty on this occasion most casually performed.
  We are told that £100 million—or £150 million by order—is to be made available to the agency, but we are entitled to know a great deal more than that. We know practically nothing. How quickly is the money to be spent? How far will the Government control that expenditure? In discussions on the consultative domument there was talk of the money being spread over five years, but, in the present financial crisis, is the agency to be told that there is an annual limit beyond which it cannot go or, taking its cue from this profligate administration, can it blue it all in 18 months, as suggested from the benches behind me, and come back for more? The Secretary of State said that there was no time span and no time limit. Will he say exactly the same after the economic measures have been announced by his right hon. Friend the Chancellor of the Exchequer within the next three weeks?
  During the debate in the Welsh Grand Committee on 31st May, the Secretary of State confirmed that in the current financial year the expenditure of the agency over and above the money already being spent on selective assistance, regional development grants and the regional development premium was planned to be £8

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  million or £9 million. He went on to say that the agency would be operational for only part of the year—for three or four months perhaps—and made clear that we should do a multiplication sum to arrive at an annual rate of expenditure——in other words, between £24 million and £36 million. Are we to assume that the Government will allow the agency to spend that sort of sum in a full year? Is that the intention? We are entitled to be told how much the Government expect to be spent on the various functions. What, for example, is the agency's range of expenditure likely to be on development land clearance, and how does it compare with current expenditure?
  We are sometimes given the impression that extra funds of £100 million are being injected. That is not really the position. The Secretary of State referred today to expenditure of £11 million by the Industrial Estates Corporation, and £3 million is being spent by the local authorities on derelict land clearance. That represents £15 million a year which is being expended at present and which will be absorbed by the powers of the Bill.
  In another place, the Lord Chancellor said that the agency would be able, with the additional resources made available to it, to do more in existing spheres—for example, derelict land clearance—and to make an impact in new activities. He went on to say that the Bill did not specify any period for which the funds should last and that the Government thought that was right. He said that it was hard to predict how rapidly the agency would need to draw on financial resources. The Secretary of State said today that he was not in a position to indicate how rapidly the agency would draw on the funds. Is that all that can be said? Is it right in the present economic crisis for the Treasury to leave entirely uncontrolled the rate at which £100 million of public money is spent? I just do not believe it.
  The Government have been equally imprecise about the £200 million allocated to the Scottish Development Agency, not to speak of the £700 million granted to the National Enterprise Board. We are talking about a collective expenditure of £1,000 million of public funds—taxpayers' money—without reference to Parliament at a time when the Government have a
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  borrowing requirement of at least £9,000 million and problably more.
  It will be of no benefit to the Principality if we provide financial aid to individual companies only to have them bankrupted by inflation unleashed largely as a result of excessive public expenditure. If that policy is pursued, for every job created in an agency project 100 jobs will be lost in small companies throughout Wales.
  It is imperative that the House of Commons should not permit the expenditure of a pound that it has the power to control without being fully satisfied that that expenditure is essential and unavoidable. Before the House authorises spending on this scale, it should at least insist on knowing much more about the details of the expenditure than it has been told so far. It should do something else as well. It should ask for a statement of the Government's strategy. It should insist on an answer to the question whether expenditure of the kind provided for in the Bill is likely to produce the best results and the best value for money.
  If there is to be stringency—that is what is belatedly promised by the Chancellor of the Exchequer—if every pound is to count, it must be spent in the right way. It may be more sensible to spend available resources on the infrastructure, on building roads and on providing sewerage and water facilities than on grants and loans to individual companies, let alone on the acquisition by the State of private companies or the establishment by the State of industrial enterprises.
  The question we have to ask is what will be achieved by the expenditure of the extra money in terms of lasting employment opportunities and prosperity for Wales. Could it not perhaps be better spent? The taxpayer has a right to know that he is getting full value for his money.
  For 10 years regional policy under both political parties has been concentrated on the payment of expensive subsidies to manufacturing industry. That policy has met with some success, and such aids have a vital part to play, particularly at a time when there is a heavy rundown of the old labour-intensive industries. In the Welsh Grand Committee debate on the economy I pointed to some

  711
  of the results of the Conservative's Industry Act 1972 which had been given in recent Government answers. I referred to the 600 applications for projects in Wales and 23,000 jobs. None the less, we also have to acknowledge that there has been too little sign of widespread self-generating economic development in any part of Wales—and that is what we all need.
  In April 1964 the unemployed in Wales as a percentage of the unemployed in the United Kingdom was 5·7 per cent.; in April 1974 it was 6·5 per cent.; in June 1975 it is just under 6 per cent. In June 1964 41·4 per cent. of the population was at work; in June 1973 41·5 per cent. of the population was at work—and that at the height of the boom. In 1960 there were 669,000 male workers in employment; in 1973 636,000 and in June 1974 621,000.
  Unemployment is relatively high in Wales, partly because of the decline of the old industries, but partly because investment is less profitable in Wales than it is elsewhere. The most common reason for this lack of profitability is poor communications. The motorway map of Great Britain reads like a map of the development areas in reverse. After 16 years of motorway building, there are still only 27 miles of motorway in use in Wales. Time after time lack of communications has proved vital to investment decisions.
  As a temporary expedient, subsidies are invaluable. I do not argue that they have not a part to play, but I fear that the creation of the agency may tip the balance so that we get the strategy wrong or, perhaps worse, that there is no strategy at all.
  In general terms, it is a mistake for the Government to dictate these matters. They make mistakes. The job of the Government is to provide the conditions in which industry can flourish—infrastructure, labour training, education, housing to promote mobility, low taxation—and let industry get on with the job.
  When presenting the Bill the Secretary of State had absolutely nothing to say to the House about his strategy. We are supposed to take on trust the policies of an administration whose every act so
  712
  far has caused production to decline, the pound to lose its value and people to lose their jobs.
  The Secretary of State puts the Bill forward as a kind of magic potion although he has done nothing to cure the fundamental sickness. He seeks to interfere where he should leave alone. He seeks to dictate where he should give freedom. He seeks to keep from this House the information that it should rightly have. Given the chance of an agreed measure, he rejects it. He persists with policies that destroy confidence. For all these reasons I ask the House to reject the Bill.
  5.30 p.m.
  Mr. Cledwyn Hughes: I do not propose to comment in any detail on the rather sour and ill-tempered speech that we have just heard from the hon. Member for Pembroke (Mr. Edwards). [HON. MEMBERS: "Shameful—"]
  I believe that the House as a whole and all those who view the Bill objectively are of the opinion that the great majority of people in Wales appreciate that this is one of the most important Bills affecting the Principality to come before the House in modern times. The objectives, the scope and the powers which the Bill confers on the proposed agency and on my right hon. and learned Friend the Secretary of State are of the utmost significance. For these reasons it is essential that the Bill should be subjected to most careful scrutiny, as, of course, it will be in Committee.
  However, the Bill must contain powers if it is to do the job and not to be the sort of boneless and toothless creature which the hon. Member for Pembroke appears to want.
  During the whole of my time in the House I have been more concerned about the problems of unemployment, depopulation, attracting new industry to Wales and finding new opportunities for our young people than with anything else. The pages of Hansard are proof of this. During the whole of this century, and indeed even longer, with the exception of the two wars, we have been afflicted with the twin evils of unemployment and depopulation. At one time they were taken for granted as being inevitable by the predecessors of the hon. Member for

  713
  Pembroke. The scrapheap of unemployment and the slagheaps of the pits were, in those days, features of the landscape. Neither is tolerated today, and, as I see it, the Bill is a massive attempt to obliterate both, once and for all.
  I do not propose to delve into the past but I believe that two matters should be borne in mind. The first is that since the last war, indeed since the publication of the Report of the Barlow Commission, attitudes have changed radically, and successive Governments, of all political complexions, have, to a greater or less degree, introduced measures to try to solve the economic and industrial problems of Wales. The overall result is that in less than 30 years there has been a vast shift of manpower from the old basic industries of coal, tinplate, slate and agriculture into new manufacturing industries in Wales. The breakdown of manpower statistics in 1946 compared with 1974 tells a graphic and remarkable story.
  It is true that the economic situation is grave. It is true that we are in a world recession and that unemployment in Wales is unacceptably high. But it would be quite wrong to ignore the great changes which have taken place in the last 30 years.
  Against that background, let us not always paint a gloomy picture of Wales. Wales is one of the best places in Europe to live and to work. It is a country of unsurpassed beauty with an adaptable working population. Let us, on all sides of the House, say this loud and clear so that people may know it, because now that we have decided to remain in the European Community it is important that the world should know the facts.
  There are two matters in which I am deeply interested and upon which I shall value the Minister's comments when he replies. The first is the future of the Derelict Land Unit which I set up in the aftermath of the Aberfan disaster. The unit has a splendid record and is of international repute. I was glad to hear my right hon. and learned Friend say that when it is absorbed by the agency the clearance of dereliction will he accelerated. The current expenditure is, I understand, approximately £2½ million a year, and we shall be interested to know what the future plans will be under
  714
  the new dispensation and what kind of financial allocation we can expect as the years pass.
  Secondly—my right hon. and learned Friend also referred to this—what precisely will be the future of the Mid-Wales Development Corporation? The House will recall that I set this up in 1967 and it has done a first-class job in Newtown under the chairmanship of Mr. Emrys Roberts and with Mr. David Garbett-Edwards as chief executive. I should like to pay a tribute to both those gentlemen for what they have done.
  The terms of reference which I gave the corporation enabled it to extend its activities to other towns in Mid-Wales with the Government's approval. That is why I named it the Mid-Wales and not the Newtown Development Corporation. I hope that its rôle under the new régime will be sustained and that its boundaries will be enlarged so that the corporation, with its excellent record and expertise, can take in Aberystwyth, Blaenau-Ffestiniog and other towns in the region where assistance is needed.
  The one industry which I do not see mentioned in the Bill is agriculture. I make no criticism at this stage, because agriculture may be included in the definition of "industry" in the various clauses. We must never forget that agriculture and its ancillary industries—the dairy and cheese factories, for example—are of primary importance in Wales. My right hon. and learned Friend referred to Clause 2(3) in his opening speech. That subsection sets out the qualifications of members of the agency and says:
  "The members of the Agency shall include persons who appear to the Secretary of State to have wide experience of, and to have shown capacity in, one or more of the following, namely, industry, commerce, banking, accountancy, finance, the organisation or representation of workers, administration, local government and matters relating to the environment".
  Can we assume that "industry" includes agriculture? We need clarification, because it is not always the case and this list is an exclusive list. I am not sure that it should be exclusive in this sense; it might be better if it were drafted so as to give general guidance to my right hon. and learned Friend in his selection. I noted that my right hon. and learned Friend was modest enough to exclude

  715
  lawyers from the list, but I assumed that he, myself and other hon. Members who belong to that profession might come broadly under the heading of "administration"—there is hope for us all at the end of the day—However, I would ask my right hon. and learned Friend to look at that point carefully.
  The position of local authorities also needs clarification. Many of the old county and district councils before the reorganisation did absolutely first-class jobs, and my own county of Anglesey achieved oustanding work in attracting new industry into an area of high unemployment. In my view we should never cut the district councils out, because they are in closer touch with local problems than other bodies in Wales, including the Civil Service.
  The Association of District Councils, of which I am a vice-president, is concerned about a number of points which I shall list briefly and which will be more appropriately dealt with in detail in committee. First, to what extent, if any, will the agency's powers conflict with the rights of local authorities to purchase land for industrial purposes? Secondly, should there not be a local authority representative, under Clause 2(3), to which I have already referred? Thirdly, to what extent will Clause 7 create a conflict between the agency and the housing authorities in the provision of housing? Finally, on Clause 11, should not local government be added to the list of interests in Clause 11 (3), in view of its rôle in providing industrial estates? I hope that the Under-Secretary will deal with these important points when he replies.
  My right hon. and learned Friend, referring to the site of the new agency when it is set up in due course, said that he had not yet made up his mind where it should be. I can suggest an admirable location, but modesty forbids. If the agency is set up in Cardiff, for example, we shall be asking for an office in North Wales adequately staffed with at least one senior official. Justice must not only be done but must manifestly appear to be done.
  Cardiff is a long way from North Wales and the lines of communication are not all that good. I come to London from Anglesey quicker by train than if
  716
  I were going to Cardiff. Therefore, if the agency is in the South, it must have a long and strong arm in the North.
  Mr. Geraint Howells: Why not Mid-Wales?
  Mr. Hughes: The long and strong arm will pass through Mid-Wales. But if the agency were established in Mid-Wales, I should not object.
  The Bill confers wide and extensive powers on the Secretary of State and the agency. They must be used with propriety and respect for individual rights. But, if the powers are great, the problems are greater. We shall debate the agency's activities in this House not only at Question Time but on the Adjournment. If the agency overreaches its powers—[Interruption.] The hon. Member for Pembroke must not think that he is the only Member in this House who is concerned about rights. We are all deeply concerned about individual rights. The record of the Labour Governments in the preservation of the rights of the individual, with the creation of the ombudsman and certain other institutions, is one of the best in the world. Before making sweeping criticisms, the hon. Gentleman must give a little thought to what has been achieved by his opponents.
  Mr. Hooson: Does the right hon. Gentleman agree that there is something to be said for investigating the possibility of having a Select Committee to deal with the agency—at least until we have devolution?
  Mr. Hughes: I should have no objection to that. I should expect the Welsh Grand Committee to debate the report of the agency annually and as soon as possible. Indeed, it is clear from the schedule to the bill that the Public Accounts Committee will have surveillance over the work of the agency as well. Those of us who have been members of the Public Accounts Committee will realise how effective and detailed that surveillance is in practice.
  I support the Bill and its objectives. But let there be no illusions about the magnitude of the task. The Bill in itself will not solve our problems. Success will depend upon three factors. The first is our national economic situation. We must conquer inflation and get on to a

  717
  steady economic course. All this is "pie in the sky" unless we get that right. We know that perfectly well. We do not need to be taught that lesson by the hon. Member for Pembroke.
  Secondly, the agency must have adequate resources to do its job. I am glad that the Government recognise that fact. I think that £150 million is not bad in the present economic situation. It is a good start.
  Lastly, the personnel who will be engaged in running the agency—notably the chairman and the chief executive—will be crucial. They must be men of drive and determination who know Wales well in all its aspects. I hope that careful thought will be given to their appointment. I hope that my right hon. and learned Friend will appoint the chairman first and then consult him on the appointment of the chief executive. It is vital that the chairman and the chief executive have mutual confidence and that the chairman should agree the appointment.
  The Bill is a historic landmark, and we hope that it will point towards more prosperous times for our country.
  5.45 p.m.
  Sir Raymond Gower: I certainly echo the sentiments expressed by the right hon. Member for Anglesey (Mr. Hughes) in his closing sentence.
  The broad aims of the Bill are unobjectionable to most of us. Indeed, they are desirable to hon. Members on both sides of the House. We all wish to further Welsh economic development. We all seek industrial efficiency in the Principality. The provision and safeguarding of employment throughout Wales is the common objective of all parties in this house and, I believe, of all Members. There is also a general desire to see the Welsh environment improved and the attractions of our countryside enhanced.
  The means of achieving these objectives, however, are largely available in existing legislation—under the Industry Act 1972 and the Local Employment Act, and under powers available to local authorities. Whether the proposed agency will add significantly to powers already available to attain these laudable objectives is arguable. Whether the agency will prove to be the best instrument for
  718
  these purposes is even more doubtful. But certainly we must not expect or require the agency to achieve miracles, as the right hon. Member for Anglesey suggested. Whatever its powers, whatever its resources, such an agency alone cannot ensure the future prosperity of the Principality.
  If inflation continues and if our general industrial performance does not improve dramatically, the future for Wales must be pretty bleak. I say that without being too partisan in my criticism of the present siuation. I believe that all Governments since the war have grappled with our difficulties with only a modicum of success.
  In a context of United Kingdom economic decline, the agency would indeed be faced with an impossible task. It is extremely doubtful whether any body of this kind could itself instil efficiency into a faltering and ailing economy.
  We must also recognise that a strong and sucessful industrial base throughout the United Kingdom is required to sustain and pay for each addition to our administrative and bureacratic structure.
  Having said as much, I echo the broad welcome which has been given to the agency and wish it well. It would be nonsensical to do otherwise.
  If the agency is formed in accordance with the Bill as amended in another place, I submit that it will have a far better chance of success than if the Government insist on reintroducing some of the more objectionable features which were in the original Bill. Therefore, I regret that the Secretary of State has indicated his determination to reintroduce some of those parts which were taken out. I appeal to him, even at this stage, not to insist on bringing back into the Bill any clause or clauses which would enable the Welsh Development Agency to control companies. That is particularly objectionable. I do not like the idea of the agency forming companies, but control by the agency is particularly objectionable to many people.
  The Secretary of State will be aware that many people associated with industry and business in Wales have profound anxieties and fears about that aspect of the Bill. Let the Government, if they wish, disregard for the moment the arguments and objections which we may put

  719
  forward. But I implore Ministers to heed the real concern of those in industry whose whole-hearted co-operation and work will be essential not only to make a success of the agency but to make the Welsh economy recover and succeed.
  During a long period in the House, a period roughly comparable to that of the right hon. Member for Anglesey, I have never before received so many communications expressing fear and concern from companies of all sizes and from industrialists of long experience and proven worth. Moreover, an agency of this kind, however gifted its leadership and membership may be, will not be an appropriate body to control and run individual companies and firms.
  I support most of the broad objectives of the Bill. However, I also share the concern of industrialists and business people about the basic philosophy which appears to inspire some of the clauses. There is implicit in some clauses the idea that the agency will be able to decide the detailed future of several industries rather better than those who have spent a lifetime in them. In that sense the Bill is miscast and misconceived.
  In that context the Bill has a different approach from the attitudes which were demonstrated when the Industry Act 1972 was framed. Of course, that was a Conservative measure. There is also a different approach from that which is contained in the Industrial Reorganisation Corporation Act, a measure that was introduced by a former Labour Government. In the 1972 Act, as many hon. Members will recall, intervention was contemplated only as a sort of rescue operation for a firm in difficult, and especially in cases where many jobs were involved. It was also envisaged as a kind of short-term operation to assist a company to restore its profitability. In the 1972 Act State intervention was obviously intended to take place when other methods were shown to be inadequate. In both the 1972 Act and the Industrial Reorganisation Corporation Act there was a duty on the part of the Government to dispose of their interests as soon as a company had been put back on its feet. All that is lacking in the present Bill. No similar safeguards are to be found.
  720
  The Bill appears to permit somewhat indiscriminate Government intervention for unlimited periods. Whatever the intent behind the Bill, such intervention could lead to a further unhealthy and undesirable extension of the State sector and of the powers and influence of the Government.
  On the whole, during the years of Conservative Government we refrained from attempts to denationalise, to interfere or to split up State-owned companies and services. We accepted on the whole the idea of a mixed economy. We refused to create more uncertainty in industry by reversing the actions of the previous Labour Government. However, if the present process towards State control and ownership continues, those of us who believe in the superior virtues of progressive and enlightened private enterprise will surely be impelled to devise measures of curtailing the growth of State agencies and State power. That must inevitably follow if the present process continues.
  It is obvious that the powers of intervention and acquisition by the development authority, without greater safeguards and without prescribed time limits, could place in jeopardy other companies and other competing organisations. That is my reply to an intervention by the hon. Member for Caernarvon (Mr. Wigley). Such companies might have to endure overlong periods of unfair competition from companies which are wholly or partly controlled by the agency.
  Mr. Wigley: On that very point, would the hon. Gentleman not agree that as we are now firmly part of the EEC such unfair competition is precluded by the Treaty of Rome?
  Sir Raymond Gower: One cannot foresee what influence the treaty would have. Given the terms of the Bill, should the agency acquire control of companies and run them it would in essence be unfair to the companies which are already in Wales and doing a good job in creating excellent employment and good conditions.
  Mr. Ioan Evans: Given that British Leyland is taken into public ownership and it is decided to start a subsidiary company in Wales, does the hon. Gentleman not agree that the

  721
  development of public enterprise in those terms could mean that privately-owned component industries would benefit by public industry in the manufacturing sector coming to Wales?
  Sir Raymond Gower: I am not talking about new companies coming into Wales, be they British Leyland or other undertakings. I am talking about the acquisition of control by the agency of existing companies or the creation of new companies. Of course, the Government can remove our fears at once if Ministers refrain from restoring to the Bill any powers to acquire control. If Ministers introduce comparable safeguards to those contained in the 1972 Act and in the Industrial Reorganisation Corporation Act, there will at once be a different mood among industrialists. That is all that they have to do. If that were done it is possible, as has been suggested, that the Bill would go through without any opposition. That is such an easy course to take that I am amazed that the right hon. and learned Gentleman does not take it. It would be a great help in restoring confidence where confidence is so sadly needed.
  Much will depend on the abilities of the first chairman and the original members of the agency. The initial period could be crucial for the success of the agency. The first appointees will have the opportunity of creating confidence by their fairness. They can demonstrate that approach in their initial period, thereby demonstrating the value of the agency. By their actions they will be able to remove some of the fears which have been expressed. Therefore, I hope the appointments will be made with great care and after a great deal of forethought.
  The right hon. and learned Gentleman will be aware that there was some debate on the Scottish Development Agency Bill which centred on a matter mentioned by the right hon. Member for Anglesey—namely, the qualifications of the members of the agency. It is appropriate to point out at this stage, that because such a large proportion of the geographical area of Wales is rural and because farming is still a chief industry in most of the Welsh counties, it is necessary to have in the agency persons with wide experience and proven capacity in agriculture,
  722
  horticulture and rural land management. I accept, of course, that some other improved formula may be devised. As the right hon. and learned Gentleman knows, that matter was debated at some length in relation to the Scottish Bill. Further, I believe it was mentioned in relation to the Welsh Bill in another place.
  In another place the Lord Chancellor, like the right hon. and learned Gentleman today, was at great pains to emphasise that the Welsh Development Agency will direct its attention to the whole of Wales and not merely to the industrial areas of the South and North-East. It will be an instrument for the whole geographical area of Wales. As an earnest of that intention, let the Government include in the agency persons with agricultural and similar experience. I know that that suggestion was turned down when it was raised before, but that is no reason for us not considering in Committee whether or not it should be done. I believe that it would be helpful for a country such as Wales.
  I turn to the detailed function of the agency as specified in Clause 1(3) as amended in another place. The wording of the original Bill was to promote industrial democracy in undertakings which the agency would control. My hon. Friend the Member for Pembroke (Mr. Edwards) has already referred to this matter. For several reasons I plead with the Minister to look more sympathetically at the amended wording. First, I believe that the amended wording is superior because we reject the concept of control. We prefer a fruitful and helpful association between the agency and individual companies. The term "industrial democracy", whatever the right hon. and learned Gentleman may have said in the heat of the moment, is vague and almost meaningless. To some it would connote State ownership of a kind that exists in Eastern Europe; to others it might involve a need for worker control; to others it might mean the provision of joint works councils. Some would take "industrial democracy" to mean the participation of employees in the individual firm or company; others would prefer wider participation by trade union interests not limited to a particular company.
  I prefer the wording substituted in another place, although I recognise that

  723
  the wording is capable of further improvement. But it conveys the importance of promoting good industrial relations and appropriate employee involvement. I regard these as sensible terms to be included in a definition of that kind. In this respect what may be appropriate in a labour-intensive industry may not be suitable in a capital-intensive undertaking.
  Mr. Jeffrey Thomas: Is not that precisely the reason why "industrial democracy" has been left as it is—in other words, that it is better not to be too precise because of the reasons put forward by the hon. Gentleman?
  Sir Raymond Gower: I am merely submitting that the phrase means different things to different people. To some it is analogous to control by the workers themselves; to others it is the institution of co-partnership schemes; to yet others it connotes a works council. Therefore, it is inappropriate terminology. I should like to see added to the provision the words "the promotion of appropriate co-partnership and profit-sharing schemes." I believe that such arrangements tend to narrow the frontiers which have often separated those who are owners or managers from those who are employed.
  I must confess that even in the amended Bill that is now before us I dislike the sound of Clause 1(4), which says:
  "The Agency shall have power to do anything in Wales, and, with the approval of the Secretary of State, anything in other parts of the United Kingdom or elsewhere, which is calculated to facilitate the discharge of their functions, or is incidental or conducive to their discharge."
  The phrase "to do anything in Wales" conveys sweeping, almost unlimited powers. I submit that we shall need to look at the phrase very closely indeed in Committee.
  Mr. John Morris: Perhaps I can put the hon. Gentleman's mind at rest, although we may want to consider the matter further and perhaps give better advice in Committee. The hon. Gentleman should read the beginning of that subsection:
  "The Agency shall have power to do anything in Wales",
  724
  then forget the next two lines and go to the words:
  "which is calculated to facilitate the discharge of their functions …".
  It does not refer to a power to do anything, but the phrase must be related back to the functions which were stated earlier.
  Sir Raymond Gower: The Secretary of State anticipated my next remarks. The phrase refers to:
  "the discharge of their functions, or … incidental or conducive to their discharge."
  Is this to be calculated by the agency or by the Secretary of State or by some reference to the principles of natural justice? The terminology is far too wide and sweeping. If the agency should take a decision to acquire possession of a house, a building, or piece of land, who will decide whether such acquisition is calculated to facilitate the discharge of the agency's functions? I know it is important to interpret these matters correctly, but I sincerely hope that we shall have something a little more restrictive than the present wording.
  Another matter which is not at all clear is to what extent the writ of the National Enterprise Board will run in Wales after the setting up of the agency and to what extent there may be some overlap between the National Enterprise Board and the agency. Further explanations are still necessary, otherwise industry in Wales may be uncertain as to the body to which it must apply in a particular case.
  In conclusion, I repeat my support for the main objectives of the Bill. I welcome the extent to which some additional resources may fairly accrue to Wales without injustice to competitive and efficient firms already engaged in fruitful operations in the Principality.
  I question the nature and extent of the powers given to the agency by the Bill and repeat my request for the sort of safeguards which were contained in the Industry Act 1972. Far too many of these powers seem to be the powers of the National Enterprise Board translated into Wales and into a Welsh agency. We must also feel some concern that the extensive powers given to the Secretary of State and to the agency are not subject to adequate parliamentary control. In marginal cases this could deter

  725
  foreign firms from creating new and much-needed factories in Wales. At the same time it is within the power of the Government to remove the causes of most of the fears about some aspects of the Bill both in this House and outside, but this, I fear—as we gathered from the Secretary of State's remarks—they are not willing to do.
  I appeal to the Secretary of State to seek to remove these fears. Wales is now facing a frightening state of affairs involving a high level of inflation and accompanied by an unemployment rate such as we have not seen since before the last world war. It is vitally important that we should inspire confidence among our people and not introduce measures which will frighten those who are already doing an excellent job in Wales. It is far better that we should have an agreed measure which will be seen by people in all parts of industry in the Principality to be fair. It is against this background that I make this last appeal to the Secretary of State for Wales. If the Bill becomes law, I trust that the agency will have a beneficial influence and will improve the viability of the economy of Wales.
  6.8 p.m.
  Mr. Jeffrey Thomas: It is an exotic pleasure to be called to speak following the remarks of the hon. Member for Barry (Sir R. Gower) if only because the first time I had the pleasure of meeting him was at the General Election in Barry in 1966.
  The hon. Gentleman's speech in quality and tone was in marked distinction to the somewhat hysterical, if not hypocritical, speech of the hon. Member for Pembroke (Mr. Edwards), who constantly amazes the House with his extravagance of speech and its irrelevance of content. We believe that the establishment of this agency—a bold new departure—will result in going a long way to remedy the cruel disparities that exist between Wales and other parts of the United Kingdom.
  May I be allowed to strike a personal note? My right hon. Friend the Member for Anglesey (Mr. Hughes) referred to the siting of the agency's headquarters, and I was somewhat reassured to read that in another place Lord Lovell-Davis made clear that the agency would require offices in more than one part of the Prin-
  726
  cipality. May I urge the Secretary of State—and I should be grateful if the Minister could deal with this point when replying to the debate—to consider the claims of North Gwent, Abertillery and Ebbw Vale, if not as sites for the headquarters, as what Lord Lovell-Davis called "the spheres".
  The remedies so far deployed to take on the challenge of unemployment in Wales have been mostly haphazard, piecemeal and unco-ordinated and have achieved only a measure of success. It was very gratifying to read the speech of the Secretary of State in Merioneth when he went to the crux of the matter and spelt out the idea behind the concept of a Welsh Development agency. He said:
  "The more difficult the period ahead, the stronger the case for bringing together and under one roof the responsibilities on the one hand for improving infrastructure, and on the other the planning and improvement of factories and providing help for industry".
  That is the crucially important task that has to be tackled by the agency.
  The worst affected areas in Wales are those at the heads of the valleys. In the 1960s the population in the heads of the valleys fell by 21,000, and unless immediate steps are taken this picture will be repeated in the 1970s. This is simply beyond our toleration. In recent months we have seen nearly 3,000 redundancies, with 500 in Brynmawr alone. We are now faced with additional difficulties further down the Western valley at the Conway Stewart factory. The times have gone when it could be said that the tombstones in the graveyards of Wales were marked: "Not dead, but gone to Slough".
  When I listened to the hon. Member for Pembroke, I was reminded of the most extraordinary speech I have ever heard. It was made by the hon. Member for Flint, West (Sir A. Meyer), who said in the Welsh Grand Committee in 1971 that before becoming the Member for Flint, West he
  "had the honour to represent Slough, which is one of the largest Welsh towns in the United Kingdom. Slough … was founded by people escaping from unemployment. There can be escape from unemployment, and there can be other Sloughs in the United Kingdom and in Wales as well".
  Listen to this—it gets even better:
  "if the Government hold fast to their present policy and refuse to be panicked into short-term measures, if only the Government will

  727
  continue with their present policy of confronting workers".—[Official Report, Welsh Grand Committee; 28th April 1971, c. 29.]
  all would be well.
  Sir Anthony Meyer: Does the hon. and learned Member dispute the success, for example, of Wrexham in evolving a totally new and integrated approach to the problems of unemployment in that part of the world? Does he dispute the wisdom of seeking to make a new departure, based on new industries, rather than merely trying to prop up decaying industries, doomed to disappear by the evolution of technological change?
  Mr. Thomas: I think the hon. Member has missed the point, and if so that is no doubt my fault. Of course I welcome the development in Wrexham and I welcome the diversification of industry, whether in Wales or the rest of the United Kingdom, but we cannot afford unemployment in Wales. We cannot afford to lose our young people, their talents, skills and abilities to the Sloughs of Great Britain. We need them in Wales and we need the jobs in Wales, not in Slough.
  Sir A. Meyer Sir A. Meyer rose——
  Mr. Thomas: I have given way once; I do not propose to do so again.
  What is required and what will be at the heart of the task facing the agency is not the sort of approach adopted in the past on so many occasions and described by the late Aneurin Bevan in the graphic phrase "Colour washing the tombstones in the graveyards". I hope that the agency will not follow such policies. I do not think for one moment that it will. It is vital that we get away from the destructive, dog-in-the-manger approach that we have come to expect from the Conservative Party. We can afford it no longer.
  So often in the past the social responsibility of public and private enterprise towards workers and consumers has not been developed along the right lines. I hope the agency will ensure that this public responsibility and accountability is nurtured and fostered in its activities. I hope that the agency will treat as a matter of top priority the need for a cogent policy on the distribution and issuing of indus-
  728
  trial development certificates. The Hunt Committee revealed some time ago that a Department of Trade inquiry had shown that at least one in five firms had moved within the previous five years to development areas, largely because they were refused certificates elsewhere. We must restrict still further the issuing of IDCs in the richer areas of Britain, and I hope the agency will ensure that there are the most stringent controls in this matter.
  Coming from the part of the world that I do, I cannot fail to welcome the provisions in the Bill on land reclamation. Before turning to that subject, however, let me deal with personal accountability, a topic which several hon. Members have raised, including the hon. Member for Barry, who dealt with the matter in some detail a moment ago. This question is a sensitive one. I have always pressed for more accountability on the part of industry both in the public and the private sectors. I shall continue to do so. This is a special case. I shall not go into the difficulties which might arise involving commercial dealings. I would have thought that Conservative Members would have been the first to realise the sensitive area into which they are moving if they ask Parliament to account for and approve of, for example, financial assistance to X firm or Y firm before the firm knows in which direction it is going.
  This could have adverse consequences upon the firm, whether in the public or the private sector. In another place the Lord Chancellor dealt with it by saying that to provide for every power to require parliamentary approval in its exercise and for every direction to receive Parliamentary approval would not only overburden Parliament but would unnecessarily frustrate executive action. The inevitable delay caused by the mechanics of obtaining parliamentary consent would excessively limit the use of the agency's powers. Surely this is at the root of the objection to further accountability.
  The Secretary of State is answerable to this House. In the interim there is the Welsh Grand Committee. There is no reason why there should not be a Select Committee. There is the Public Accounts Committee and so on. The hon. Member for Pembroke referred only to parts of the Western Mail leader of 15th May. What the Western Mail said, and I say

  729
  this in fairness to the hon. Gentleman, was:
  "To be successful it must be independent—and firmly under Welsh control. The Bill the Conservatives are advocating would have its teeth so drawn that it is unlikely the resulting agency could play any significant rôle in our economy—indeed this seems another rather gratuitous knock at devolution … To take away powers from a Welsh agency is simply to hand hard-won autonomy back … and ensure that the agency is just the Welsh arm of the National Enteprise Board. In fact the agency could boost the Welsh economy without upsetting the private sector as it stands and could give advice, assistance, and grant aid without nationalisation. To deny the Welsh people the opportunity to influence at first hand decisions that affect them and maintain that this is a function which could be carried out from Whitehall is wholly against our interests. But such proposals cut deeper. The agency is one of the few bodies which it is proposed to make accountable to a Welsh Assembly. To take away its powers is to undermine not only the agency but the assembly itself."
  Coming from the part of the world that I do, I particularly welcome the Bill's provisions dealing with the environment. We in Wales, in the aftermath of the Aberfan disaster, soon became not only the front runners in Britain in land reclamation and dealing with the environment but the European league champions. We virtually had to start from scratch because, incredible though it may seem, particularly after listening to Conservative Members, only eight acres of derelict land were cleared between 1960 and 1964.
  Even in the early 1970s England, as ever trailing its coat behind the Principality, had a dismal record. A total of 43 out of 102 counties and county boroughs as they then were had not restored any derelict acreage at all. In Wales today 1,300 acres justify treatment. One of the problems which will confront the agency is that every year over 100 acres of fresh wasteland are being created. We in Wales have proved that the problem of dereliction can be solved. The impediment to success has not arisen because of technical or engineering difficulties. What is required and what is now to be provided by the Government through the agency is the political will to remove the scars of past pollution and to prevent further contamination.
  The agency must continue the job of improving the environment, not only because we want to improve the infrastructure for industrial purposes but also
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  as a memorial to the thousands of men and women who sacrificed their lives on the altar of industry to create this country's wealth. The structure of beauty in the Welsh valleys still stands. Only its surface is tarnished. The agency will mean an end to the patchwork quilt approach to the problems of industrial development in Wales. It will mean an end to the "filling in the gaps left by decay" approach which has so often been the case in the past—a kind of dental economics. The agency will be an instrument by which to forge a realistic and comprehensive policy to provide for the first time a strategy for the whole of Wales. It is for these reasons that we welcome the agency and wish it a fair wind.
  6.25 p.m.
  Mr. Gwynfor Evans: At the outset I congratulate the Secretary of State on the presentation of the Bill. It is a measure with which we in Plaid Cymru find ourselves in full accord. We have as Nationalists been campaigning, if we have campaigned for anything at all, for a development authority for a long time—since the days when unemployment in Wales stood at the horrific level of 30 per cent. to 33 per cent. Many people in Wales have bitter memories of those days when hundreds of thousands of Welsh people had to leave their country for Slough and elsewhere to find work.
  I recall those days to show that the need for a development authority has been long felt in Wales. Yet we have had to wait until the growth of nationalism in Scotland and Wales has compelled the Government to act. The Tories have been loth even to act now. We are continually depressed by their obstinate determination to prevent Wales living as a nation. We welcome this measure warmly but our welcome must, understandably, be qualified as a result of the tardiness of successive Governments.
  The phrase which describes the Welsh position is that of "internal colony"—a phrase which is used as a title for a distinguished book published in California, which states the Welsh and Scottish situation. For generations Wales has not been governed in her best interests but rather has she been exploited by outside interests. At last, with this agency, we will, I hope, have a tool which

  731
  the Welsh people can use to begin to act for themselves. After a short interim period in which the agency will be in the hands of the Secretary of State, I hope that the Welsh people, through their assembly, will be responsible for its development.
  The development agency itself requires development but it has the makings of a powerful instrument. I want to refer to the issue of accountability but to give it a different emphasis from that which has so far been given to it. The bureaucratic element in this body must be diminished and the domestic element enhanced as much as possible. Although for some time the agency will, as I have said, be responsible and answerable to the Secretary of State, and through him to this Parliament—that is right, and nothing else is possible now—I hope that this will be a temporary arrangement and that it will last only until we have our own elected assembly in Wales. The agency can then be made accountable to that assembly—an assembly of the representatives of the people of Wales.
  It is essential that the agency engages the interests and the enthusiastic support of the people through their representatives. I hope that its muscles will be well flexed. In particular, we need a plan in Wales—we have needed one for a long time—for balanced economic development, which the Assembly can implement. For this purpose the Assembly will require considerable powers for dealing with various aspects of the infrastructure because a great deal of leeway has to be made up in Wales after generations of comparative neglect. For example, between 1966 and 1970 the Government substantially reduced the sums spent on Welsh roads and increased the sums spent on roads in England by 150 per cent. We have a great deal of leeway to make up in this area.
  However, balanced development must include both rural and industrial areas. I was glad to hear the Secretary of State refer to the needs of the rural areas. We urgently need light industry in villages and and small towns in rural Wales to stem the depopulation and to safeguard our way of life, and in many areas our language. We can all refer to small towns and villages where there is heavy unem-
  732
  ployment and virtually no industry. It is essential to have this kind of light industry to maintain the population at a level which will sustain the schools, the chapels, the churches and the societies which are essential to a local community, which give vitality to rural life and make it attractive to young people. This deserves a special unit within the agency that is charged with responsibility for development of rural life in this way.
  There must also be balanced development between economic, social and cultural matters. Economics should always be subordinate to social ends and social ends in this context should always include cultural matters.
  In the post-war period, when my party campaigned for this kind of development agency, for some time we used the title "TVA for Wales" because the Tennessee Valley Authority was very notable as an ambitious and successful piece of planning covering large parts of seven of the states of the United States. Most commendably in that experiment it regarded the whole of the society of that area as a "seamless web". This is a good phrase.
  In this way the national community of Wales must be seen as a seamless web. Great care must be taken to assess the effect of every political and economic action on each of the social, cultural and linguistic aspects of Welsh life, and to ensure that the national community is developed as a whole.
  Mr. Speaker: Order. I know of 14 hon. Members who wish to speak in this debate. I hope that those who catch my eye will be reasonably unselfish.
  6.34 p.m.
  Mr. Fred Evans: My right hon. and learned Friend the Secretary of State for Wales and my hon. and learned Friend the Member for Abertillery (Mr. Thomas) made passing references to our great fellow countryman, Aneurin Bevan. It was Bevan who said that the Welsh were the most contentious nation in the world, and I do not doubt that. It is the only area in which in any pub, club or gathering of people at the drop of a handkerchief and within 30 seconds flat one can become involved in political argument of a high order which is not only tolerant but is usually extremely well-informed.

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  Therefore, I find the argument of the hon. Member for Pembroke (Mr. Edwards) somewhat saddening. Whether he was dazzled by the possibility of conquering some lush empire in a future Government and leading an army against this wicked interventionist Socialist gathering on these benches, I do not know. What has happened is that he and others like him have been reduced to making all kinds of apologia, because there is more unanimity in Wales today over this issue than I have seen for a long time.
  Even the Welsh Nationalists are joining with the thinking on the Labour Benches. I could even find it in my heart to forgive some of their recent activities in my constituency. However, in reality, instead of the hon. Member for Pembroke finding that he has an army behind him, he finds that it is a group of people riven with dissensions, including the Welsh CBI. Even that Press organ—hardly a pillar of Socialist thinking—the Western Mail chides him like a naughty schoolboy for his attitudes. In this debate he is reduced to carrying the tattered remnants of his flag across to these benches and saying "If you will please let me keep this little bit of flag, I am willing to join you, although you are my enemy." He does all this, as did the hon. Member for Barry (Sir R. Gower), in the name of saying that this is the State trying to effect a massive transference of power. This is the pattern that is running through current legislation.
  As a somewhat less intelligent Welshman, I was always under the impression that many of the people who sent me here did so precisely because they wanted to transfer economic power into their own hands and to transfer powers of decision that affect their lives very deeply into organs that were representative and closely linked at local levels to themselves, so that ideally they might at long last be allowed to have a voice in deciding their future and the future of their children.
  If Conservative Members think that we shall be frightened, they had better think again. There are enough of us on these benches who still adhere to what many on these benches refer to as old-fashioned Socialism. We accept the need for the transfer of power and are determined to achieve it. The messing about as regards
  734
  amendments to the Bill in another place will quickly be remedied.
  The hon. Member for Carmarthen (Mr. Evans) referred to the deep trauma of the past, through which so many of our people went. Certainly in heavily industrialised parts of South Wales we saw it at its deepest. It was in my constituency that a certain illustrious person burst into tears and said that something must be done. Something must still be done. We shall see that it is done.
  In yesterday's debate on the Scottish Development Agency this was a recurring theme. The Secretary of State for Scotland pointed out that most of the guilt for what has happened in Scotland rested fairly and squarely on the shoulders of people who had run the previous economies of Scotland and who had been responsible for lack of investment. They had regarded the smaller units in Scotland as capable of being sacrificed—they called them their marginal Scottish interests—in order to buttress and sustain their large units, which are outside Scotland. Wales has a similar problem, because although we are heavily dependent on publicly-owned industries, which many Labour Members want to be socialised, we accept that Wales, as a land of small communities, has always been dependent quite significantly on small to intermediate businesses. This is a function which a Welsh agency can fulfil and which no other organisation can.
  Many of the specifics in the Bill have been touched upon. I shall most certainly not be repetitive. However, we know the history of the past and we hope that we can find some of the answers to it. While we are trying to give our answers in the Bill, let us not be churlish and, because dark clouds are still hanging over Wales, deny the gratitude and respect which we owe to organisations which have very valiantly carried on up till now, the many bodies to which the Secretary of State referred. But the plain answer—anyone in local government will know this—is that the time wasted by local authority industrial development committees, by Members of Parliament and by other people who are desperately concerned about the situation, in going from one body to another, taking an interminable time to try to effect some

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  kind of palliative to a desperate situation, absolutely calls out for the bringing of these organisations under one umbrella, so that the route can be shortened and action can be far more effectively and speedily carried out. I think that despite some of the fears they have expressed, this is why so many local authority organisations have given an unstinting welcome to the Bill.
  I am deliberately omitting many of the points that have been made hitherto. I want to sec this development agency for Wales have the imagination to do some forward looking. The powers given to the agency are set out in Explanatory and Financial Memorandum. It is to establish and to carry on industrial undertakings. Although the signs may not be all that significant as yet, there are things happening in Wales which portend nothing but good for the future, in our ability to meet the challenge of modern technology and to evolve entirely new patterns of industry.
  Perhaps I may mention just two instances with which I have been quite deeply involved over a number of years. There is absolutely no doubt that some of the leading thinking, research and experimentation in recycling of waste products has been done in Wales by Professor David Hughes, in the microbiology department of Cardiff University, and by Mr. Clive Jones, an industrial chemist formerly of British Silicones and now the industrial liaison officer for the Wolfson Laboratory. These inspired and dedicated people have solved most of the problems of recycling most waste products.
  My own party—I addressed the meeting in Blackpool on this subject—has formed a group on the recycling of waste products. It was put into our manifesto that nationally this process could be worth £400 mililon a year. I would say that it goes far beyond that. This was also a subject of Sicco Mansholt's survival blueprint for mankind—that the recycling of waste products could be done even on a European scale.
  Out of my pride in being a Welshman and as research work and pioneering has been done, I should like to see what has been costed out and planned on the drawing board—the establishment of a labora-
  736
  tory specifically for this work and the establishment of the first pilot plants of a completely new industry in my country. It is not only feasible. It wants only a modicum of interest to spark this off, and here is a growth industry which can have a few parallels in Britain. As well as its saving to the national purse, its value in focusing world attention on the forward-looking nature of the Welsh approach to technology would be quite dramatic.
  Turning to the side of pure inventiveness, I have just been in communication with a man whom I have known for many years and with whom I have kept in touch. It has taken him about three years to try to get a foolproof patent, but here in this field we have in working order, as a pilot plant, an oil and water separator which achieves 98·5 per cent. efficiency. It has had its own booms and sluices designed, and it could sail into a slick such as that left by the "Torrey Canyon" and clean it up in no time.
  If we have the interests of an agency such as this to foster and to encourage, there is nothing in technology and inventiveness that other peoples can do—I do not wish to cast any animadversion—which cannot be reached by the Welsh people. I hope to see this day come.
  I turn briefly to the other major point in the Explanatory and Financial Memorandum—the environment. Here in particular the people of Wales owe a debt of gratitude to the inspired work of the derelict land unit attached to the Welsh Office, which should receive public acknowledgment far more than it has done hitherto. My own area, being a very heavily derelicted one, can pay tribute to this unit. There are at present two truly inspiring pieces of land clearance and reclamation taking place. I pay tribute also to the speed with which the action can be taken. Within a month of a date being given for a colliery closure, the announcements were made for the clearance of this and the restoration to its pristine beauty of a truly glorious Welsh valley. We shall indeed, as the Secretary of State said, increasingly see "How green is my valley", not how green was my valley, becoming a predictable event within certainly the lifetime of our children.

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  Some fears have been expressed over the set-up on the derelict land reclamation side. I fully agree with the Secretary of State that the people who have shown such expertise, speed and imagination should have a full function to perform now under this agency. They are certainly capable of getting this job done, and done thoroughly.
  Under the Bill there is provision for the agency to clear land and either to make use of the land itself or to adopt the generous approach of offering it to the local authority on favourable terms. The agency can give land free of all charges to the local authority for development which is approved by the Secretary of State. This again is a very significant move forward.
  On the financial provisions, I can well understand the perturbation which, I believe, lay behind the question asked by the hon. Member for Caernarvon (Mr. Wigley) during yesterday's debate on the Scottish Development Agency about the absence of a time limit under which the initial expenditure would be phased. Of course the same answer was given—that this would be a matter for the Secretary of State and that there is always the safeguard that the agency must come back to the Secretary of State, who in turn must come to this Parliament for further sanction for financial expenditure.
  Inherent in the hon. Member's question was a further one which disturbs me in the current economic climate: that however short the expenditure phasing may be, it is bound to be eroded by the factor of inflation. We should ask whether there is to be any kind of reverse procedure, any building-up procedure, to offset totally or partly the effects of the erosion of the original sum of money. This is a subject on which one could speak in extenso.
  I end by saying that in my party in Wales we have dreamed for a very long time of having a central body of this kind, just as in the total field of devolution, even in my father's time we were talking of a Welsh Assembly with unitary authority. A year or so ago I had a conversation with the hon. Member for Merioneth (Mr. Thomas) on the subject of where we should go. Within those terms I congratulate my right hon. Friend the Secretary of State. I hope that the passage of this legislation through the
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  House will be expeditious and I very much hope that the deadline for the structuring of the agency will be completed by the end of the year.
  6.53 p.m.
  Mr. Geraint Howells: The need for some kind of development agency in Wales has been obvious for some time. More than in many other parts of Britain, Welsh Liberals have felt the need for some cohesive policy to prevent the decay of existing industries and to prevent a continuation of the rural depopulation which has taken place since the First World War and even since the days of the lead mines. It is now very necessary to develop the industrial potential of Wales to its full capacity and to make an effort to overcome the serious problem of unemployment throughout the Principality.
  The possibility of an expansion of the oil industry off the Welsh coast also makes it imperative that the environment should be protected, and I believe there should be strict controls imposed on any major building plans put forward by new industry. With tourism making an important contribution to the economy, it is important to preserve the features that have made it so successful. Above all, we must make Wales a pleasant place in which to live, while providing the necessary job opportunities. I invite hon. and right hon. Members on both sides of the House, if they have a few days off during the Summer Recess, to come to the Teifi Valley to see the environment, which represents the very best scenic beauty which we have in Ceredigion, and also the Rheidol Valley, where the Secretary of State enjoyed his boyhood days. That is the type of life we need in Wales—a pleasant environment, plenty of work and a healthy economy.
  I should like to congratulate the Secretary of State on making a move in the right direction in making the concept of such an agency a possibility. We can now be more hopeful of the Government's intention to safeguard industries in Wales, we may see the setting up of advance factories in Wales in areas that really need them and we may then see the stemming of the rural depopulation which has been such a depressing feature of the Welsh way of life in recent years. With the right kind of encouragement, the economic life of these areas will

  739
  revive. If only the Welsh agency would slow down the drift of young people away from my constituency I would be well pleased. Only 8 per cent. of my constituents are working in manufacturing industry, so there is a great imbalance between the self-employed and the employed in Ceredigion. I have in my constituency towns like Tregaron, Aberaeron and New Quay which have no industry of any kind. I hope that when the Welsh agency is set up such towns will be remembered and light industry will be introduced into them.
  Good intentions are one thing. The way in which intentions are carried out is another. I agree that there is a great need and a desire to plan ahead and to bring to an end this stop-go system that has bedevilled all planning over the past few years, with one plan quickly succeeding another, causing confusion and a certain cynicism among those who might be attracted to invest in Wales. One could say that the Welsh Development Agency is yet another alteration of regional policy reflecting merely another aspect of parliamentary dogma.
  I would be grateful if the Secretary of State would assure us that this is not just another exercise in spending money on a massive scale in order to implement social theories. I understand that the overheads alone are likely to be in the region of £2·5 million. Can he explain to the House by what criteria the success of the agency will be measured? As it stands, it has three separate functions which do not lie easily together. The first involves the encouragement of industry and commerce, which presumably would have a commercial return. The other two functions involve the use of public money, which would be given in the form of grants for environmental development and protection and powers to take over ailing firms under the terms of the Industry Act. Does the Secretary of State believe these functions to be compatible?
  I should also like to seek the assurance of the Secretary of State that the policies of the Government do not further exacerbate the position of small firms and industries already in Wales, so that they are forced to seek help under the Industry Act. There is a sizeable section of the community already feeling a certain sense of injustice at the treatment being meted
  740
  out to them by the Government in the form of punitive taxes. I hope that these people, who form the backbone of the economy in rural Wales, will be considered. I am referring to the self-employed.
  I said that we had only 8 per cent. working in manufacturing industries in my constituency, but in Ceredigion over 30 per cent. of the electorate are self-employed, the highest percentage not only in Wales but in Britain. Will the Secretary of State agree to support private enterprise and the self-employed? Or does he believe that mere nationalisation is the answer to our economic problems in Wales? I hope not.
  Is the Minister aware that 60 per cent. of school leavers are unskilled and untrained? If we are to have more industry and more factories, would it not be possible to look into the possibilities of developing technical training in Wales for those who wish to enter the various industries? One could also make out a very strong case for retraining for those who may be made redundant in certain industries and could be channelled to other jobs. I should like to see evidence of more Government thinking along those lines.
  I have lived in Ceredigion all my life, and am now middle-aged. It is very disheartening to see our young people leaving the rural areas year after year, never to return except for a few holidays now and again.
  The most serious defect in the Bill is that it has been drafted with no reference to the proposed Welsh Assembly. This indicates that the Government still refuse to take devolution seriously, in spite of the serious recommendations of the Kilbrandon Report. We have already heard this week that no separate Civil Service will be provided for the Welsh and Scottish Assemblies. The setting up of the Welsh Development Agency before a Welsh Assembly has been formed makes nonsense of any attempt at a unified policy for Wales.
  It would appear from the Bill that the proposed agency is completely dependent on the whim of the Secretary of State for Wales. One might say that it is the creature of the Secretary of State, as he, for example, even appoints the chief executive. It is entirely wrong to have

  741
  the chief executive appointed in that way. Is it possible for the agency to make an independent decision? This dependence on the agreement of the Secretary of State in so many ways makes the whole agency too political. This is an area that should be free of politics if we are to have continuity of policy.
  There is not sufficient demarcation in the Bill between the agency and the National Enterprise Board. I have said before that it is important that the affairs of Wales should be dealt with by people who understand Wales, and I see here evidence of the desire of those who wish to nationalise everything in sight to keep control of Wales.
  I believe that it is of the utmost importance for the future of Wales that its development should be kept as far as possible in Welsh hands. The way to do that would be to ensure that the agency was answerable to an elected assembly in Wales, an assembly with legislative powers and with effective control over the economy.
  On 1st May I put a Question to the Secretary of State for Employment, asking him to list the 10 employment categories which had had the biggest job loss during the past five or 10 years. It is interesting to note that during the past five years the biggest losses have been in agriculture, forestry, fishing, mining, quarrying, metal manufacture, gas, electricity and water.
  Before we can entice industrialists to Mid-Wales we need better communications. I hope that the Minister who winds up the debate will say how much money will be spent on road and rail communications into Mid-Wales.
  Today we have been discussing the Welsh Development Agency, and in a few months we shall be discussing the Welsh Assembly White Paper. We must ask ourselves where the money is to come from. If we are to conquer inflation, and if we are to have a Welsh Assembly and a Welsh Development Agency, does the Minister believe that we need control of prices and incomes by statute?
  I am very sorry to have to refer to a statement made earlier by the Secretary of State, who blamed the Liberals for opposing the setting up of a rural development board a few years ago. I am proud to say that I was one of those
  742
  Mid-Walians who stood out against the board. I challenge the Secretary of State to present the same type of board with compulsory powers to the people of Mid-Wales once again. It will not be acceptable. In the last General Election Labour lost control of Carmarthenshire. Merioneth and Cardiganshire owing to the attempt to set up the rural development board. If the Secretary of State tries to do it once again to the people of Mid-Wales, perhaps he will lose more seats in Wales.
  7.7 p.m.
  Mr. Donald Anderson: The broad welcome for the Welsh Development Agency in the speeches of the hon. Members for Cardigan (Mr. Howells) and Carmarthen (Mr. Evans) illustrates the acceptance of the agency by the substantial group of political forces in Wales and the extent to which the Conservative Party is out on a limb, on its own in Welsh terms, on this matter.
  In listening to the speech of the hon. Member who led for the Opposition, the hon. Member for Pembroke (Mr. Edwards), who represents little England beyond Wales, I felt how significant was the location of his constituency, since he spoke in a wholly different tone even from that of the Welsh CBI. Although it has reservations about the Bill and the agency, the Welsh CBI has said that it gives support in principle to Government proposals for a Welsh Development Agency, though it enumerated certain reservations. Never again shall I refer to the Conservative Party in Wales as the mouthpiece of the Welsh CBI, because the Conservatives' views are less progressive than the views of that body in relation to Wales. The hon. Gentleman must already feel somewhat unsure about the battleground that he has chosen. He must consider how ill-chosen it was.
  The agency is a new instrument for restructuring and modernising our Welsh economy. It gives more powers, comprehensive powers, and more funds for development within the Principality. I accept that the fundamental battle on allocation of resources must still be fought within the British Cabinet, but it is a useful additional weapon.
  One cannot be satisfied with the existence of the weapon itself, because the weapon is not an end in itself. Its effectiveness will depend on the manner

  743
  in which the powers of the agency are exercised within Wales. I think particularly, for example, of the quality of staff who are to be recruited to man the agency, and the back-up resources for decision-making within the agency. I hope that there will be someone at the head of the agency with real practical experience of industrial decision-making within Wales. Its effectiveness will also depend on the extent of the readiness of the agency to pursue a long-term strategy for the Principality and not to be diverted to short-term unproductive job preservation at all costs. Indeed, for industrial planning there has to be a substantial degree of continuity, which we have not seen in relation to the various regional location incentives of either Government.
  On one point I wholly agree with the hon. Member for Carmarthen: that we need a plan for Wales if the investment decisions taken by the agency are to be effective. We need to clarify our goals within the Principality, otherwise investment decisions will be haphazard and not directed to particular ends.
  We need, for example, to build on the existing foundations, in particular to obtain manufacturing units in Wales downstream from the existing heavy industry. I have in mind industries making consumer goods from chemical production, sited in the area of Baglan Bay, and aluminium-using industries centred in North Wales.
  We need also to take more care in attracting linked industries to areas which are relatively close together in order to avoid the haphazard grouping of industries. We need more toy manufacturing within the Swansea area, and more electronic component manufacturing industries in the area of Aberdare. If such clusters of linked industries are achieved in the Principality, a number of very important external benefits will accrue. For example, we shall have educational courses at local technical colleges which can be geared to the cluster of industries within those areas. Similarly, specialist servicing and stock-holding firms will be attracted as a result of the cluster of industries, but this must depend on clarifying our models and having plans for the Principality so as to know where we are going.
  744
  Many questions will remain unanswered by the Bill, such as the relationship between the agency and the National Enterprise Board, and also questions of financial accountability and whether, for example, there should be a form of public dividend capital. A large portion of the activities of the agency cannot be costed in commercial terms anyway, certainly not in the short term, such as the derelict land facilities, but there must be some yardstick by which the effectiveness of the agency can be measured.
  In passing I will say one thing about the location of the headquarters of the agency. I am very much concerned with the danger of overcentralisation of administrative facilities within Wales in the Cardiff area. I shall not make a parochial point in relation to Swansea. My own view is that, in looking at the needs of Wales at the moment and in prospect, it would be an imaginative example and an act of faith if the headquarters of the Welsh Development Agency were to be sited somewhere in the Heads of the Valleys area. This would be a focus for an important service grouping within that area which needs it.
  Mr. Ioan Evans: Hear, hear.
  Mr. Anderson: I am glad to have the support of my hon. Friend the Member for Aberdare (Mr. Evans), but I hope that we in Wales learn from England's example of having an administrative capital and try to diversify administrative jobs as far as we can away from Cardiff. The real need now is for some jobs to buttress the economy in the Heads of the Valleys area.
  My second point is that I see the agency as a new means of co-operation between Government and industry within the Principality. The old confrontations and frontiers are blurred, and hon. Members on both sides of the House must come to terms with this fact. We live in a mixed economy. We need a genuine mix and a partnership. There are areas which are now wholly nationalised or where 100 per cent. nationalisation is in prospect, where there could be a public equity holding but not a complete holding. This might have been an appropriate solution for Bristol Channel ship repairers.

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  Conversely, there is a substantial case for a governmental stake in profitable private industry. I accept the interventionist rôle which my right hon. and learned Friend the Secretary of State outlined for the agency in this respect, as long as we remember that Government investment is not some form of cornucopia for invalid industries, that we need a healthy scepticism concerning Government and business judgment and that we need to give a degree of independence, within limits, to the agency to back its own judgment. There has to be a much clearer means of monitoring the achievement of the agency than appears at present to exist, in particular some more extensive means of parliamentary control.
  The improvement of the environment is the last of the duties enumerated for the agency in Clause 1(2). It is a clear duty. It raises many questions of an urgent nature because of the prospect of Celtic Sea oil. What priority in Wales shall be devoted to environmental factors? Will it be a residual factor after other factors have been taken into consideration, rather like the Government's reaction to those of us who protest about the lead content in petrol and are told that it is a health hazard but we must put up with it because we are so dependent on the motor industry? In other words, improvement of the environment is a good thing in its place. In my view, and drawing upon Welsh experience, that place should be at the forefront of our considerations, learning from the shortsighted decisions of the past.
  Environmental decisions will have a significant effect on industrial location policies as well. I ask how the environmental considerations will be fed into the decision-making process within the Welsh Development Agency. Will there be a special section of the agency. Will there be a specialised committee? Will there be a board member charged specifically with responsibility for the environment? Inevitably there will be a conflict. I hope that the decisions reached will not be blurred and that the people of Wales will be able to participate in these conflicting decisions as a result of an open debate.
  The Development Land Unit is one of the great success stories in Wales. It is
  746
  only sad that we had to wait for another round before we were stirred into action on this front. I hope that the agency will start with an imaginative and perhaps a model scheme of what can be done in co-operation with local authorities—and where better than in the Swansea Valley, which is still the largest area of industrial dereliction in the whole of the United Kingdom?
  There is now a blueprint for the development of that valley with the zoning of industrial areas and recreational areas. It is an imaginative blueprint which has been drawn up by the local authority. It may be that one of the most signficant activities of the agency could be working with the West Glamorgan and the Swansea City Councils in revitalising the whole of the Swansea valley. That would be an excellent example of co-operation with local authorities.
  This agency, welcomed by almost all the political forces in Wales and by our Welsh people and endorsed at the last two elections as the policy of my party, will, I am confident, be of considerable benefit to the Principality. It is an exciting organisation, and in common with my colleagues and the bulk of the Welsh people I wish it every success.
  7.20 p.m.
  Mr. Geraint Morgan: It would be churlish for any Welsh Member, concerned though he may be about what may happen to this Bill at a later stage, to deny that, in the form in which it has emerged from another place and is being presented to the House, it contains very considerable advantages for Wales. It is obviously a most desirable step to have a single central body to co-ordinate the efforts of a number of existing bodies, the purpose of all of which is to develop the Welsh economy and to bring industry to Wales. No reasonable person could possibly quarrel with such an objective. We have been reminded today of the state of unemployment in Wales. Ever since April it has been at its highest monthly level since the last war.
  In speaking of the desirability of establishing a single central body of this kind, I do not mean in any way to denigrate the sterling work which has been clone up until now by man local authorities and voluntary bodies. However, there is no doubt that there has been a lack of

  747
  co-ordination in these efforts in the past, and this is one of the weaknesses which the Bill, rightly, seeks to remedy, although it is to be hoped that the agency will continue to rely upon and make the fullest use of the spirit of co-operation in both the local authorities and the voluntary bodies.
  Criticism has been made by some members of my party in another place, and yesterday in this House when the sister measure relating to Scotland was considered, that the creation of the agency and its Scottsh equivalent amounted to a proliferation of existing bodies. Certainly there are many of them. But I do not think that this charge is made out, because part of the purposes of the Bill is the co-ordination of the efforts of existing bodies.
  Another aspect of the Bill which I hope will command universal support is the duty which it imposes upon the agency to develop and redevelop the environment in Wales, to grant-aid local authorities in carrying out derelict land clearance works, and to carry out such works itself. No one doubts that much remains to be done in this respect, and again I say that without any reflection upon what has bene done already in this regard. Anyone who knows Wales well will be aware of the tremendous efforts which have been made, especially in the South, in clearing up the industrial dereliction which has existed for so long. I am fortunate in that I represent a constituency where that problem does not exist at all.
  I understand—and perhaps the Secretary of State will confirm—that it is intended that local authorities should continue to play a most important rôle in this work, and that agency schemes will be undertaken only after full consultation and agreement with local authorities. This should apply just as much to major environmental schemes as to others. It is important that this should be the case. I ask the Secretary of State roughly what proportion of the money that the agency is likely to get—whether it be £100 million or £150 million—will be applied to the derelict land reclamation programme. A figure of £5 million has been mooted, which is something like double the present expenditure. Perhaps we can have some more information about this.
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  So far I have had nothing but praise for the principal objectives of the Bill, and, were it to remain in the form in which it has appeared before us, I could leave it at that. However, as we are all painfully aware, substantial and far-reaching amendments were effected in another place. As regards one of them. we have heard from the right hon. and learned Gentleman that the Government are quite determined to undo the good work done in the other place. Therefore, it would be unrealistic to discuss the Bill without considering the effect of the reinsertion of the provision which, temporarily, has been extracted from it. Very rarely has so much attention been given in a Second Reading debate to what, for the time being at any rate, does not appear in the Bill under discussion. The same applied yesterday to the sister measure relating to Scotland.
  In terms of the injection of financial assistance into Wales, the Opposition, or, rather, the part of it to which I belong, feel that the 1972 Industry Act, despite the scorn poured on it by the Secretary of State, provides all that is necessary. Moreover, it contains highly desirable safeguards against such assistance being used to nationalise firms and unnecessarily to increase the size of the public sector.
  The safeguards embodied in the 1972 Act were, firstly, that the Secretary of State had to be satisfied that assistance would not be given in any other way than by the acquisition of loan or share capital. Secondly, he could not acquire more than 50 per cent. of the equity share capital. Thirdly, he was required to disposed of any stock or shares as soon as practicable.
  We think that that goes far enough. As we are aware, these safeguards are swept away in the Industry Bill, and, if the Government have their way with this particular Bill, there will be no limitations of the kind that I have mentioned on the agency if and when it wishes to acquire stock or shares in a privately-owned company. Accordingly, the agency would be able to take over control of companies without restriction and even without the agreement of their boards of directors. It could buy its way into profitable industry and set up its own enterprises in direct competition with existing companies in the private sector.

  749
  Although it has been argued that competition between agency-created companies and privately-owned ones would be fair, one can be forgiven for being a little doubtful on that score. For an established company in the private sector, the possibility of investment is very difficult at present, as we know, and it could hardly compete on equitable terms with a company or undertaking set up by the agency and equipped by it with modern plant and machinery.
  Let me make it clear on behalf of all members of my party that we do not suggest that the agency should not be able to provide financial aid to companies in Wales, that it should not be able to invest in the equity of a company which it felt it desirable to assist, or that it should not have directors on the boards of companies in which it was financially interested. We draw the line at the point where the agency would run companies or undertakings which it had taken over or formed itself.
  We feel that such activity is not necessary to enable the agency to perform its functions, and we also feel that the agency is not well suited to enter into industrial management, which can best be performed by people experienced in that field. It follows that, if the agency were to move into company management, over the years there would be a continuous enlargement of the public sector into areas of activity for which it was quite unfitted.
  The powers which the Government wish to give the agency reflect those given to the National Enterprise Board under the Industry Bill. If they are restored under this measure, the Welsh agency will truly act as an arm of the National Enterprise Board. I use that much-quoted expression, even though exception is being taken to it, as a succinct description of the situation which would arise. It represents an extension of State control into the private sector without adequate parliamentary control. We feel that that is not the way to win the confidence of private industry, which should be the principal concern of the Government if they seriously intend to attempt to remedy our economic ills.
  I am not opposed to the establishment of the agency or to its being invested with the eight functions set out in the present Bill. On the contrary, I welcome
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  it. In carrying out those functions, it can do much good for Wales by exercising the powers given to it by the Bill. Let it so remain. Let there be no addition of any other function, or functions which do not enjoy the full and, indeed, enthusiastic support of hon. Members of all parties representing Wales in this House.
  7.31 p.m.
  Mr. Ioan Evans: I welcome the contribution made by the hon. and learned Member for Denbigh (Mr. Morgan), who, like his colleague the hon. Member for Barry (Sir R. Gower), welcomed much that is in the Bill. I hope that those hon. Members, in common with the remainder of Members of Parliament, will vote in support of this measure, which will fulfil the desires of the people of Wales.
  The Secretary of State said that this was a historic day for Wales. Yesterday there was a debate on the Scottish Development Agency. That was a historic day for Scotland. Next week the Industry Bill will provide a historic day for Britain. Circumstances will change for the better if these measures are implemented by Parliament.
  I regret the delay which has occurred as a result of the obstructive tactics of, I was going to say, the Conservative Party. But perhaps I should not include all the Welsh Members of the Conservative Party in that category, although I include the hon. Member for Pembroke (Mr. Edwards), who led the opposition to this measure. The constituents of Denbigh and Barry will at least know that their Members of Parliament showed some restraint. The people of Pembroke will realise that their Member of Parliament expressed his all-out opposition to the Bill. I say "all-out". I wondered whether political schizophrenia had been demonstrated. Some hon. Gentlemen delayed the measure going to the Welsh Grand Committee. One or two other hon. Members representing other constituencies have taken part in the debate, but the contributions to this debate have, in the main, been made by Welsh Members.
  The debate could easily have been taken upstairs in Committee and the matter could have been brought to the Floor of the House at a later stage.

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  Parliament has a heavy programme of legislation. Not only are the Government fulfilling the promises made in our policy statement but we have had to undo the harm of legislation carried forward from the previous administration. That is why more legislation has been brought before this Chamber than for a long time. A measure such as this could easily have been taken in the Welsh Grand Committee. It is deplorable that the Conservative Party's obstruction should have prevented the Second Reading of this measure being taken at an earlier date. Instead of having been debated first by this elected Parliament, the measure has arrived from the other place.
  I was pleased at the contribution made by the Lord Chancellor, an eminent Welshman, who moved the Bill admirably in the other place. I am personally attached to him because he came from the school in Wales at which I taught.
  The Secretary of State demonstrated the need for this measure. The Opposition spokesman while addressing us today, discussed the economic situation rather than the Bill. The impression he gave was that the economic ills confronting Wales, as well as those in Britain, had been caused by the Labour Government. He neglected to mention that we were passing through a world recession. He spoke as though we were experiencing a phase of which we were unaware when the Conservative Government were in power. The Labour Party manifesto for the October election said:
  "Britain faces its most dangerous crisis since the war. The Labour Party makes no attempt to disguise this. On the contrary, at the time of the February election, we took the British people into our confidence and shared the realities of our daunting problems. We inherited a three-day week, unlit streets, unheated homes and work-places. And worst of all, a wounded national economy, made all the more serious by the socially divisive policies of the previous Conservative Government, with its deliberate confrontation with the organised working people of our country."
  Those were the opening sentences of the manifesto which we put before the people.
  There is now a world economic recession. That situation exists in America, Germany, France and Italy. The Opposition give the impression that all the troubles which we face are due to the policies of
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  the Labour Government. What shabby nonsense. We are faced with serious financial, economic and industrial problems. I believe that this vital, valuable new machinery for assisting in the solution of the problems of Wales has been held up because of the delaying tactics of the Conservative Party.
  What are the functions of the Welsh Development Agency? They are, first to further economic development, secondly to maintain employment, and thirdly to improve the environment. It may finance or establish industrial undertakings and take over the functions of the Welsh Industrial Estates Corporation.
  On 20th November 1974 the Prime Minister announced that the ministerial responsibility for selective regional assistance in Wales under Section 7 of the Industry Act 1972 would be transferred from the Secretary of State for Industry to the Secretary of State for Wales on 1st July 1975. That day has been referred to as "free enterprise day". In Wales it will be called "national enterprise day" because the tasks performed by the Department of Industry will be transferred to Wales.
  The White Paper dealing with the regeneration of British Industry said that it had been decided that appropriate functions of the National Enterprise Board should be carried out in Scotland and Wales by the respective development agencies. In July 1974 the Government announced their intention to establish a Welsh Development Agency responsible to the Secretary of State. Its aim would be to strengthen in an effective way the instruments available for promoting the development of the Welsh economy and undertaking major environmental projects. That had been outlined in the manifesto of the Labour Party in Wales. That manifesto was accepted by the majority of the people of Wales, as in the election the number of Welsh people who voted for the Labour Party equalled the number who voted for the Conservative, Liberal and national parties.
  That document explained that the agency's major responsibility would include tackling industrial decay, unemployment in Wales, the encouragement and establishment of new enterprises and the provision of new industrial estates and factories, paying special attention to those industrial areas which had suffered from

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  the worst effects of the decline of the older industries.
  The manifesto made it clear that the agency would play a key role in environmental matters, in which it would work closely with local authorities. This Bill is the fulfilment of the promises made in that manifesto.
  In its role the agency will bring new resources, both of finance and of professional skills, to bear to promote industrial and environmental development. The two are closely interrelated, and the agency's twin objectives will be to accelerate economic and industrial development in Wales and to create the environmental facilities conducive to such development. The agency will be working with the National Enterprise Board in promoting industrial support and development. Labour Members make no apology for the fact that the Government are setting up the National Enterprise Board. It is all very well for Conservatives to talk about the glories of the private enterprise system, but it is difficult to sell that system in Wales.
  Reference has been made to the book "How Green was my Valley", which was written some years ago. We know how the coal industry had declined at that time, when the mines were privately owned. Who is to deny that the public ownership of the coal industry has been of great benefit to the people of Wales and to the mining community? I recall what was written in that book by Richard Llewellyn about a strike in a mining valley. Meat was scarce. There was butter only on Sunday and the tea was made without milk, without sugar and without tea.
  The hon. Member for Cardigan (Mr. Howells) referred to the Tennessee Valley Authority which dealt with the problem described in Steinbeck's "Grapes of Wrath". Wales has never had a development authority. There is a need for an agency to bring industry into Wales. There has been private enterprise, but even the former Leader of the Opposition stated that Tory Governments had failed to get private enterprise to invest in manufacturing industry. Where private enterprise has failed, surely we should put public enterprise in its place.
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  We need to continue the task of dealing with dereliction to stimulate environmental regeneration. The Derelict Land Unit of the Welsh Office has done much to solve this problem in recent years. It is tragic that we had to have the Aberfan disaster before we got around to dealing with derelict land. Since then much has been done in my constituency in the Cynon Valley, from Aberdare to Mountain Ash—the Queen of the Valleys—to remove the coal tips and the industrial scars. I hope that improvements of this nature will continue during the years ahead.
  Our main problem is unemployment. I recognise that we are passing through a difficult economic and financial period and that much has been done by regional policies, but a serious situation is developing in my constituency. A factory that was brought into Aberdare—Levex—was closed down but it has now been opened again under a different name. There is a light engineering works on the Hirwaun Industrial Estate in which the workers work hard and are prepared to cut their wages to keep the firm going, but on Monday morning when they went to work they were told that on Thursday their jobs would finish.
  Complaint has been made mat the Bill deals with industrial democracy. It is about time we talked about industrial democracy. It is about time we realised that, in addition to the people who invest capital in industry, there are people who invest their labour in industry and who must be consulted before decisions are taken about the closure of firms.
  More recently, the Girling firm in Aberdare has been threatened with closure. Talks are going on, and I hope that they will meet with success. The unemployment situation in the valleys is serious, and the Bill will play a positive part in creating job opportunities in the area.
  The only happy industry is the coal industry. We see at pitheads notices saying "No vacancies". The coal industry is moving forward and productivity is increasing. At the beginning of last year we recognised that the mining industry was in the doldrums, and there was conflict. Now the industry is producing coal in great abundance to meet our energy requirements.

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  I should like to have answered the argument of the hon. Member for Pembroke, who opposed the Bill, but he deployed hardly any arguments. In the latter part of his speech he turned his attention to suggesting amendments to the Bill. It is strange that someone who opposes a Bill should say how he would improve it. The Conservatives must make up their minds where they stand.
  In the debate on the Scottish Development Agency Bill last night the hon. Member for Glasgow, Cathcart (Mr. Taylor) summarised the reasons why the Conservatives opposed that Bill. First, he said that the Bill was not needed. The need for the Welsh Bill has been proved by this debate and the House of Lords debate, especially by the contributions made by the hon. Member for Barry and the hon. and learned Member for Denbigh (Mr. Morgan), who did not give it a whole-hearted welcome but recognised the need for it.
  Secondly, the hon. Member for Cathcart said that the Bill was "inevitably bureaucratic". "Bureaucratic" has become a favourite word for those who oppose progressive measures. I do not understand why it should be bureaucratic for the people of Wales and the people of Britain to own their own industries and, through Parliament, to control them. Why should it be more desirable for industries to be run from Texas, Tokyo or Timbuctoo? The Conservatives have no objection to foreign capital coming into the country. Why cannot the people, through Parliament, control these industries? I would prefer industry to be run in that way rather than have a large bureaucracy to have to pay out unemployment benefit because private enterprise had failed to provide jobs.
  The hon. Member for Cathcart said. thirdly, that the Bill would create confusion because of the multiplicity of agencies. But the Bill seeks to bring several agencies together. It replaces and co-ordinates those agencies. That is an argument not against the Bill but for it.
  Fourthly, the hon. Gentleman said that we should bear in mind the Government's pledge to restore interventionist policies. In Wales we have to have interventionist policies. It is no use Conservatives—who might have some success in Surbiton—
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  talking about the evils of Socialism. Public enterprise has worked for Wales. The people of Wales recognise that if the coal industry, the electricity industry and other industries in the public sector can be run successfully, there is no reason why the manufacturing sector should not be publicly owned.
  I am pleased that the measure has been brought forward this Session. I am also pleased to hear the Secretary of State say that he will consider the location of the agency, and I echo the hon. Member for Swansea, East (Mr. Anderson) in saying that it should be located in the Heads of the Valley. There are certainly some good sites between Neath and Ebbw Vale. I must declare an interest because those towns are near to my constituency. The Hirwaun Industrial Estate would be an excellent location for the agency. From the industrial point of view many jobs would be involved. There is a tendency for us to think of Cardiff or even Swansea as a suitable location, but why can not we go to the top end of the valley'? If we located it in such a place, it would show the vision of what we expect from the agency.
  I know that many hon. Members wish to speak in the debate. 1 wholeheartedly applaud the Welsh Office on putting the Bill through this Session. We have kept our promise to the people. I look forward in the next few months to see this measure pass through all its stages in the House and be implemented. I want to see the regeneration of industry in Wales by this agency working with the National Enterprise Board. At the same time I want to see the beautification of our valleys that have known the scars of the Industrial Revolution. I want to provide a better environment with more jobs so that people can add to the wealth of our country.
  7.51 p.m.
  Mr. Dafydd Wigley: In welcoming the Bill I have to declare an interest because I have spent seven or eight years travelling around Wales calling for an agency of this sort. I am pleased to see it finally come into being.
  I see that the Minister on the Front Bench is raising his eyebrows. I should like to draw his attention to a Question that I asked on 1st April 1974. As it was 1st April that may explain the answer

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  that I received. I asked for a national development authority of this sort to be set up, and the answer I received was:
  "No, I am responsible for the co-ordination of economic and other forms of develpment in the Principality and I see no need to establish a separate National Development Authority."—[Official Report, 1st April 1974, Vol. 871. c. 248.]
  The Minister spoke earlier of the blinding light on the road to Damascus. I am delighted to see that the blinding light has struck home in this instance. There has been a call in Wales for this sort of agency for many years. It is not for one side or the other to take credit for it. To that extent we should all welcome it and make it work effectively.
  It is disgraceful that the Bill has to some extent over the past two months become a political football. That should never have happened. There is such a crying need in Wales for the co-ordination and reorganisation of bodies concerned with the development of the economy and industry, that everyone must unite to make the Bill work. I hope that that is what will happen.
  Interest has been shown in this type of body on previous occasions, because other countries have developed them. Other countries in Western Europe have made a success of development authorities. There have been instances of such authorities in Ireland, Italy and Belgium. I draw the attention of hon. Members to the minutes of evidence taken before the Trade and Industry Sub-Committee of the Expenditure Committee in 1971–72. In Appendix 22 there is an analysis of the type of para-governmental agencies that exist in other areas. The analysis refers to State holding companies and industrial development banks. I cannot help feeling that the agency we are considering is a hybrid of the two, and that it will be interesting to see some of the powers built into it work in practice. I hope and believe that they will work successfully.
  I shall certainly be voting in favour of the Bill tonight. However, there are a few questions that remain unanswered. One of the main questions that have been mentioned on several occasions during the Committee stage of the Industry Bill is the relationship between the Welsh Development Agency and the National Enterprise Board. There is a certain amount
  758
  of doubt about the exact linking that there will be between the two bodies.
  The hon. Member for Aberdare (Mr. Evans) and other hon. Members stressed the importance of the co-ordination work that the agency will do. It is important that there are clear lines of demarcation between what the WDA does and what the NEB does. I have no doubt that there is room for the work of the NEB to be of assistance to the WDA and that they can work together. However, it is important for the people employed in this and other bodies in Wales, at different levels, to know exactly how the two organisations are interlinked. Attempts have been made on several occasions to find out exactly what is the relationship between the two bodies.
  I draw attention to a quotation referred to by the hon. Member for Aberdare from "The Regeneration of British Industry", Command 5710, where it says:
  "It has therefore been decided that appropriate functions of the NEB should be carried out in Scotland by the Scottish Development Agency."
  I am concerned about "appropriate functions". In Committee there will be need for greater clarification of these functions.
  Reference to this was made by the previous Under-Secretary of State for Industry in February. In the same debate I raised a few questions which I think are worth underlining concerning the relationship between the two bodies. I should like to raise those questions again now, because if they cannot be explained tonight perhaps they can be referred to in Committee. I asked what, if the NEB and the WDA worked in parallel, will be the mechanism to link the two, what proportion of the total joint activities of the NEB and the development agency in Wales will be undertaken by the development agency. With particular reference to the budget, I asked whether £100 million to £150 million over a certain period of time, which at the moment is not defined, fitted into the expenditure pattern of the NEB and whether the £1,000 million referred to in Clause 6 of the Bill dealing with the NEB affected this at all or whether any of the money would come to Wales in addition to £150 million? I also asked whether the NEB would have total responsibility for branch factories and subsidiaries located in Wales, and, if that was the case, whether the WDA

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  would have any responsibility at all for those bodies. Those are important questions, because so much of the Welsh economy concerns companies that straddle the border.
  To a large extent we are a "branch factory" economy. We have a branch factory syndrome. Of the companies that employ more than 100 employees in Wales, only 113 out of 477 have headquarters in Wales. This is an important question that needs clarification. We shall have to wait to see what the final Industry Bill looks like, but there are many areas in the original Bill where there will be questions about whether the powers of the NEB will be appropriate to the WDA and whether the development agency has total authority for those companies that exist in Wales but do not exist outside Wales.
  Another question that arises in this context is the relationship between the WDA and the assembly that we are expecting will be set up in the near future. I am glad that the hon. Member for Aberdare referred to the Labour Party's manifesto in the last General Election and said that it had the wholehearted approval of the people of Wales. He will no doubt be aware that the October 1974 manifesto for Wales stated that
  "A Welsh Development Agency will be established under new legislation, with a budget from the United Kingdom Treasury, as an executive body, responsible in the first instance to the Secretary of State, and then it will be the concern of the Assembly once it is established."
  I have no doubt, in view of their enthusiasm about sticking to the manifesto, that hon. Members will ensure that the WDA will be responsible to the assembly. This is a matter that cannot be settled finally until the legislation for the assembly has come through. I hope that there will not be any delays, so that we can see the democratic control of this body in Wales in the near future. One of the justifications that Labour Members have given for the establishment of an executive assembly in Wales is to oversee bodies where there is no democratic control. I hope that the WDA will be such a body and that hon. Members will demand control of it by the assembly.
  I turn to the objectives at which we should be aiming in setting up this
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  mechanism. They are fairly clear to all. We should aim to reduce unemployment, which is too high in Wales. Increasing activity rates have been referred to. Our activity rate, particularly in the female sector, is unnecessarily low. We need to eliminate enforced migration. If people want to leave Wales, the best of luck to them. But people should have the opportunity to stay and have a future in their own areas. We should ensure that jobs are available of as wide a choice as possible, within reasonable travelling distance for people in all parts of Wales, and, through the work of the agency, we should aim at raising the gross domestic product per capita in Wales to a level that is at least equal to the average for the EEC.
  What should be the means of arriving at those objectives? First, if the agency is to succeed in its rôle—I believe that it will—it will need to have an influence on the development of the infrastructure. The infrastructure in Wales requires urgent attention. I underline the need to develop our roads, particularly in my part of Wales. The lack of adequate roads in Wales has been a serious problem for some time. I draw attention to the report by the Welsh Council four years ago regarding an economic strategy for North-West Wales. Referring to the need to develop the A55 and the A5, it states:
  "If additional allocations of resources for the completion of these roads within the foreseeable future is not forthcoming, it is suggested that the Welsh Office together with the County Councils consider in what ways additional resources can be applied for the improvement of these roads."
  In the context of a cut-back in public expenditure, I underline the need to develop our roads if the success of this body is to be ensured. The same applies to developing the infrastructure in other directions. I refer to sites for industry, facilities, utilities, and so on, having adequate technical and business education, the right training for people to work in industry, and the development of the labour for people to work in industry, and the development of the labour force with the right skills. All these are essential. Even if they are not the responsibility of the agency, they are responsibilities about which the agency will need to co-ordinate with the other bodies to ensure that they are undertaken.

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  We need the right structure of incentives. At this stage I ask the Secretary of State, in considering the money that has been given for the development of industry in Wales, to give a categoric assurance that the money will in no way be clawed back from the EEC contribution. The EEC contribution to regional development in Wales should be an addition to anything that the Government are committed to giving. There should not be a reduction in the money coming from the regional fund of the EEC on account of the Government's commitment. That is worrying people in the Commission in Brussels when I was discussing this matter there yesterday. The Government must give a categoric undertaking about that matter.
  It is important that the agency should have powers of initiative. This should appeal to Members of the Conservative Party. Apparently it does not, but I believe that it should. There should be initiative at home in setting up new industry and helping existing industry. We need to set up new industry. If the private sector can do it, very well. But the story in so many parts of Wales has been that the private sector has failed. If the private sector fails to set up private industry in the right place, we need the initiative in the public sector to ensure that people do not suffer.
  We need initiative not only at home but in an international context to seek additional markets for the products of Welsh industry. I believe that can be done through co-ordination with the Development Corporation for Wales. The agency should be able to bring companies into Wales from the United Kingdom, from Europe or from across the sea.
  Another important point concerns the co-ordination of the functions to avoid duplication of effort. It is important that the agency should carry this out if it is to be successful. There is a danger of duplication.
  In this context I underline the need for an economic plan for Wales. The tragedy in the 1960s was the failure to develop such a plan. Following the George Brown plan, there was an attempt to create regional planning and an economic plan for Wales should have developed effectively from it.
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  The hon. Member for Motherwell and Wishaw (Dr. Bray) referred to this aspect yesterday in the debate on the Scottish Development Agency. I hope that there will be an economic plan for Wales in association with the agency.
  I am appalled at the attitude that Conservative Members have taken towards the Bill. I say that having heard some of the comments that have been made by back benchers in the last few speeches. If, as has been said, they are to vote against the Bill, even as it stands, they are totally contradicting themselves. They said that they were worried about matters which were not in the Bill. If they wish to oppose those matters, the time to do so is in Committee when the Government try to put them back in. I shall support the Government in bringing those powers back. But that is a matter for Committee, Report, Third Reading, or whatever stage it may be. It is no case for voting against Second Reading. If Conservative Members do, they will show the total hypocrisy of their party. They will demonstrate that it is not the watered-down version that they are voting against but any form of development agency for Wales. I hope that when they consider going into the Lobby and forcing a Division they will have that point in mind.
  There are many interesting differences between the Welsh and the Scottish Bills. These will have to come out in Committee. Grants included in the Welsh Bill are not possible in the Scottish Bill. CORSTR A. which is included in the Scottish Bill, is not in the Welsh Bill. Questions relating to air services, the reclamation of land from the sea, and other matters will have to be discussed in Committee.
  One point that worries me—I refer to Baroness White's speech in another place—is the possible clash between the interests of the environment and industrial development. I certainly appreciate the link that the Government have proposed, but I have some sympathy for the school of thought that this could be counterproductive. Tension may be created which puts decisions at a level where they should not be taken. If there is a question of priority between industrial development, on the one hand, and the environment, on the other, and it is a question of spending £5 million on the

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  one or the other, that will be a decision which will have to be taken at a political level. I do not believe that such a decision should be put into the mechanics of the agency. That is the one doubt I have about bringing these two matters together in the agency. Both are important. I should not like to say that one has priority over the other, because both are necessary.
  The European dimension is important. The offices of the development corporation should be expanded to the maximum extent possible. The corporation has full-time representation in Germany. It is important that that representation should be extended to other countries. There is a role for the agency here in co-operation with the development corporation to ensure that that happens.
  I should like to see a means for enabling the agency to raise loans directly from overseas if there is difficulty in raising money at home. I hope that it will be able to raise money in excess of the £100 million or £150 million at present laid down. Perhaps that matter could be explored in Committee.
  Reference has been made to the rural development board. There is a need for special provision for rural Wales. I hope that the Secretary of State will address his mind to setting up machinery which will ensure that rural Wales gets the same benefits as the areas of the Highlands and Islands Development Board in Scotland. They are allowed a higher level of grant from the Regional Development Fund in Europe than anywhere else in the United Kingdom. We need the right mechanism to be set up in Wales so that similar benefits can be given to rural Wales. That is another matter which ought to be looked into.
  There is the question of the definition of the agency's areas of activity. It is interesting to see the definition of industry in Clause 24. It is a rare definition, but welcome. I take it that the powers of the board will go as far as extractive industries. There is a need for intervention in extractive industries and also in certain tourist areas. The tourist industry can play an important part in developing the economy of many parts of Wales. I hope that the agency will have a rôle to play there. In this context we are talking
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  about industry in the broadest sense and not just manufacturing industry.
  Further liasion with nationalised industries is also important. The Bill does not make very much reference to that. If the Government are successful in introducing their amendments to set up publicly-owned companies, the relationship of those companies to the agency and the parallel relationship with the nationalised industries that already exist will be of the utmost importance.
  Risk capital must also be considered. In a Welsh Council study five years ago it was recognised that there was a need for additional risk capital for small companies. I hope that there will be a rôle for the agency in providing more risk capital for Welsh industry.
  Next, I turn to finance. I asked the Secretary of State earlier what period the £150 million was to cover. If it is to cover a certain amount of work and if it will be possible to return after 18 months or two years and to receive a favourable response to a request for more money, that is fine. I draw the attention of the Secretary of State to the fact that the Welsh TUC called for a fund of £500 million over five years. I take it from what the Secretary of State has said today that that is quite possible within the context of the Bill. I hope that will be the case.
  It is important for managements to know exactly where they stand so that they can develop plans over a long period and do not have to live from hand to mouth from one year to the next. It is also important that there are more extensive borrowing powers in addition to the £150 mililon.
  Finally, I emphasise a point that has been made by many hon. Members. If the agency is to work it will work because we have the right calibre of person running it. It is essential to get the right man for that job. I hope that the Government will leave no stone unturned in order to get the right man. I would like to see a Welshman occupy that position, but more important, a man from any part of the world who will make the agency work properly. I hope that we are successful in obtaining the right man.
  I remember a few years ago in a time of gloom as regards economic policy in

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  Wales that Professor Nevin said there was no movement "because the boat had no engine". The Bill can provide the boat of economic development in Wales with an engine, and I wish it luck.
  8.12 p.m.
  Mr. Roy Hughes: It is a pleasure to follow the hon. Member for Caernarvon (Mr. Wigley), and particularly after the zest he has shown for the proposals contained in the Labour Party election manifesto.
  I welcome the Bill for the two-pronged attack that it is intended to make in promoting industrial development in Wales and in bettering the environment. Both of those objectives are vitally necessary. As regards the first objective, it has been apparent for over 10 years that the British capitalist system is breaking down. This has been manifest by a lack of investment. Of course, investment is the seed corn in industry which keeps our competitive edge in the world export markets. It provides more power to the elbow of workpeople in industry. What is more, it ensures that they stay in employment, which again is vital. Alongside the lack of investment we have also had a build-up of property speculation. Those two factors are the principal reasons for the present parlous nature of the British economy. Of course, we have very much felt the ramifications in Wales.
  It is in that sense that the Bill is essential, as is the Industry Bill. However welcome both Bills may be, if anything they are too late. For Conservative Members to say at this stage of our affairs that such proposals are not necessary is sacrilege to say the least. Likewise, when the Government invest public money in private industry there must be public accountability alongside that development.
  I do not understand why the Opposition can oppose such sensible proposals. Indeed, the Conservative Party in Wales now seems to be so way out that it is even falling out with the Western Mail. That is an interesting development. I must ask Conservative Members where the Welsh entrepreneurs are to be found. If we had to rely on them we would become a nation of unemployed.
  I briefly refer to a rather forgotten sector of the Welsh economy—namely the
  766
  ports, and in particular my own area of Newport. Over the past few years the British Steel Corporation seems to have been trying to bankrupt the Newport docks. It has taken the entire iron ore trade from Newport. Millions and millions of tons of iron ore are being transported overland from Port Talbot. That is not an efficient system and it is particularly unreliable. The corporation has turned what was a consistent profit-making port into loss-maker. There is a vital need to invest in a new terminal at Newport to supply the great works at Llanwern. Those works have been turned into a virtual subsidiary of Port Talbot. One of the most disastrous mistakes that the corporation made was when it pigeonholed the proposals for the new port at Newport. That marks the turning point in the sad story of Llanwern and all the troubles that have gone on there ever since.
  The only answer remains the provision of a new port for Newport to supply the great Llanwern works. It should be given the go-ahead, especially during this time of economic recession. It could mop up a lot of the unemployment in Gwent, and particularly in the valleys. If such a project were put into effect it would be ready and available when the upturn in the economy came about.
  A fortnight ago we had the report of the National Ports Council. Mr. Philip Chappell, chairman of the council, said:
  "Capital expenditure by port authorities is still declining from the peak achieved 10 years ago … But more investment could mean over-capacity."
  Of course, Mr. Chappell is perfectly right. That is why my right hon. and learned Friends opposed the West Dock development in Bristol. We said that the South Wales ports were already under-utilised. How right we were. Of course, the go-ahead was given for that development and the cost is escalating. The ratepayers of Bristol are saddled with this great burden and they have the biggest white elephant in history.
  Mr. Chappell also said:
  "The one exception could be by the development of an 'industrial port' alongside the more conventional commercial port. It was for this aspect of renewed industrial activity, for both large and small developments, that more coherent support—and perhaps financial aid in selected places—could be based."

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  The scheme which I have mentioned in respect of the Spencer works would fit in ideally with the proposals made by Mr. Chappell, Chairman of the National Ports Council. Furthermore, such a scheme would be an automatic money-spinner because the trade is there already and should be proceeded with. I hope that the Secretary of State is taking note of what I have said. I appreciate his constituency interest, but I am sure that we can rely on him to be impartial.
  While the Secretary of State is present, I should like to make a few comments about Clause 2 of the Bill dealing with appointments. Please let us not have any more Tory "dead-beats" in these jobs. The Secretary of State in introducing the Bill said that we require men of outstanding ability. I could not agree with him more. There is a sad record of disastrous appointments. We have only to look at what happened in the steel industry. We appointed Mr. Cartwright, a man who over the years persistently opposed steel nationalisation. He was made vice-chairman of the publicly-owned industry, and we know the consequences for that industry and its disastrous record.
  In the water supply industry there was the appointment of a Tory old-age pensioner. I agree that some of these appointments were made by a Conservative Government. I am Chairman of the Parliamentary Sports Committee and I must say that the Secretary of State in his recent appointments to the Welsh Sports Council has not shown the imagination which we are entitled to expect from him. We must realise that the Conservative Party in Wales is only a small and anglicised faction. Wales has always rejected the Conservative Party. Let us hope that in his new appointments my right hon. and learned Friend will use some imagination.
  Clause 13 deals with environmental development. It could be said that over the years South Wales has paid dearly for its failure in terms of lack of attention to environment. I do not doubt that because of this fact we have lost many new industries and enterprises which otherwise would have come to the Principality. When people from more salubrious parts of the British Isles visit
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  South Wales they cannot understand how we in our valleys are prepared to live next door to coal tips. They see our once-beautiful rivers as black as the ace of spades. This is one of the principal reasons why many industries have not been attracted to Wales in the past. Then we had the terrible shock of Aberfan to shake us out of our apathy.
  I congratulate the present Government, and indeed their Conservative predecessors, on the progress they have made in improving the Welsh environment. Our rivers have improved. I hope that the Secretary of State with the aid of his new powers in the Bill will put pressure on the local authorities to go all out to improve our environment in Wales, because this can do so much for the economy as a whole.
  I have spoken about action taken to deal with pollution in Welsh rivers over the years. The pollution of those rivers is only minimal compared with what is happening in the Bristol Channel, which is choked with pollution. We have heard that 96,000 tons of poisonous industrial waste is to be dumped in that channel this year by the Welsh National Development Authority. On top of that, no less than 210,000 tons of crude sewage goes into the Severn Estuary every day. I have been in correspondence with my right hon. Friend the Minister of Agriculture, Fisheries and Food and also with Welsh water authorities over this development. A total of 60,000 tons of sewage sludge comes from the treatment works at Gwent and is taken out by ship from Newport docks. That sludge may contain traces of a lethal substance known as cadmium. One of the vital aspects is the fact that under Section 68 of the Public Health Act 1961 the water authority is prevented from divulging the source of the cadmium which is being discharged into the sewers. It is a remarkable state of affairs when people are being systematically poisoned and yet are not allowed to know where the poison conies from. The Secretary of State for Wales is the voice of Wales in the Cabinet. He should look into the matter and say what can be done as a matter of urgency.
  I welcome the Bill because there is nothing but good in it. I wish it a speedy passage to the statute book. References have been made to Richard Llewelyn's "How Green was my Valley". I read the

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  Second Reading debate in the other place. Their Lordships waxed eloquent about George Borrow's "Wild Wales" and also about Alexander Cordell's "Rape of the Fair Country". We have seen in Wales a great deal of disfigurement of the countryside. I hope that the Bill will bring a small measure of recompense for those who have suffered so much over the generations.
  Mr. Deputy Speaker (Sir Myer Galpern): The wind-up speeches are due to begin at 9 o'clock. I hope to accommodate four more hon. Members who are anxious to take part in the debate. This can be done if hon. Members co-operate.
  8.28 p.m.
  Mr. Ian Grist: We have heard from the hon. Member for Newport (Mr. Hughes) a remarkable speech which contained a bitter attack on the Conservative Party. I can only assume that the hon. Gentleman is still feeling a little sore after the overwhelming rejection by the people of Wales of his advice for us to quit the EEC.
  At first sight the Bill appears rather harmless, and possibly even beneficient. We have been taken to task for daring to oppose it. We do not oppose the environmental and co-ordinating functions in the Bill—quite the reverse. I do not think that the Government should be surprised at our opposition to the Bill in its present form or to the original version, nor should they be surprised at our opposition to the Secretary of State's proposals to amend it by restoring the agency powers which were included originally. The Bill was considerably improved in another place and I only wish that we could promise to do the same.
  The Bill will create a major Government agency and arm the Secretary of State with enormously increased powers so that neither the House nor anyone else will have control over what is happening. The agency, either under the direction of the Secretary of State or acting on its own account, will have the capacity to alter entirely the economic aspect of Wales. It will not be operating on normal commercial lines and it will be established with public money. On these grounds, its accountability to this House should
  770
  be made clear. Is it intended that we should have the right to debate the annual report when it is presented to Parliament by the Secretary of State? I believe we should have that right every year.
  What is becoming ever clearer is the need for a Welsh Select Committee to investigate and cross-examine the Secretary of State, his Ministers and the civil servants on the operation of their powers and responsibilities. Every hon. Member knows that as the Secretary of State's powers have grown, Welsh Question Time has become a farce. We cannot effectively examine on the Floor of the House what he is doing, his functions and his responsibilities. We are limited to one Question each on one topic of the very many for which he is responsible, and yet his powers are increased by the Bill. That will make matters even more difficult for hon. Members. The Secretary of State's powers will be widened still further and will be unchecked by Parliament.
  What will be the position of the agency if the Government fulfil their pledge of an elected Welsh Assembly? If the Secretary of State is to retain powers in this field and not devolve them, I am sure that certain hon. Members, including some on the Labour benches, would be very interested to know that. If the Assembly is to replace the Secretary of State in the exercise of these powers, other questions arise. Will the agency be eligible to receive finance from the EEC, for example through the regional fund?
  The nub of our opposition to the Bill, particularly in the form in which the Government wish to see it, is that it represents a considerable increase in State power and ownership. It is also extremely confused in certain respects. We know that the agency will have certain powers and features in common with the proposed National Enterprise Board. The Minister of State, Scottish Office attempted to show where the lines would be drawn between the agency and the NEB when the Scottish Development Agency (No. 2) Bill was in another place. The Secretary of State tried briefly this afternoon to give his own explanation, but Ministers' efforts merely serve to illustrate how confusing and confused the situation is.

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  The Minister of State said:
  "Perhaps the greatest difficulty to be resolved"
  that means it has not yet been resolved—
  "is how to express the dividing line between cases in Scotland which are to be financed by the NEB and those which are to be financed by the Agency. We shall be working out these details."
  Apparently they have not been worked out yet.
  "We propose to consult the CBI and the STUC. Broadly"—
  a nice generalization—
  "we intend to adopt general principles whose applications will be determined, fairly pragmatically, on a case-by-case basis. The point is that there will be no rigid demarcation between some companies or undertakings in Scotland which are the concern of the Agency and others which are reserved to the NEB."—[Official Report, House of Lords, 24th June 1975; Vol. 361, c. 1298.]
  The truth is that the Government do not know where they are drawing the line. How do they think that industry can order its affairs if they cannot give a clear indication of their intentions? I would like the Minister to refer to paragraph 21 of Schedule 1 to the Bill whereby the agency is to be exempted from Section 14(1) of the Prevention of Fraud (Investments) Act 1958 and Section 13(1) of the Prevention of Fraud (Investments) Act (Northern Ireland) 1940. This point was raised yesterday in connection with the Scottish agency by my hon. Friend the Member for Edinburgh, West (Lord James Douglas-Hamilton). I trust that the Welsh Ministers have had sufficient notice to be able to tell us why the agency should be immune from the conditions applying to private undertakings under those Acts.
  At the root of our objections is the tact that the agency is, like any Government agency or nationalised industry, free from constraints which apply or ought to apply to private industry. While the agency was originally charged with promoting industrial efficiency and international competitiveness, it was also charged, and still is, with safeguarding employment in any part of Wales. How fortunate it was that their Lordships altered the original wording of Clause 1 so that what originally were duties are now only discretionary functions for the agency.
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  Even so, the agency will find itself in a hopeless tangle. We all know that if industries or individual firms wish to compete internationally the work force will have to be cut in the interests of increased productivity. How on earth will the agency choose between efficiency and safeguarding employment in view of the Government's pusillanimous attitude towards redundancies?
  Mr. D. E. Thomas: May I give the hon. Member an example of the way in which I envisage the agency being able to intervene effectively? Two years ago, during the period of the Conservative administration, a firm withdrew from a branch factory in my constituency. It has been holding the tenancy of the factory for two years. Now it has collapsed into liquidation. In such a situation, surely the agency would be able actively to intervene to retain employment and a viable production unit.
  Mr. Grist: If that company has gone into liquidation because it was losing money, I cannot see why the public should have poured money into it. Private industry finds itself in a hopeless situation. We have record post-war unemployment figures which are increasing monthly. Our currency is sagging to a record low level. Inflation is running at two or three times the rate of that of our international competitors. The capital market is being sucked dry by the Government's enormous and growing borrowing requirement. The Government have enormously increased personal and corporate taxation. They have invented new taxes, like the capital transfer tax, and intend to invent further new taxes, like the wealth tax. We need not just incentives. There needs to be an ability on the part of private industry and individuals to invest on their own account.
  The Government have introduced measures such as the Community Land Bill, the Trade Union and Labour Relations Act, the Employment Protection Bill and the Industry Bill, which immeasurably increase the power of the State and of trade unions. Today, of course, the Secretary of State has gone ahead and threatened us with a new form of rural development board for Mid-Wales. The Government do all this at a time when there is a world trade recession.

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  Labour Members have complained that private industry—which provides well over 90 per cent. of the life-blood of the country in the form of exports and the bulk of our taxes, which are the lifeblood of the Government—is failing the nation. Indeed, as the Government's measures progressively bite into the vitals of British industry, the excuse to use the powers of bodies such as the Welsh Development Agency to carry on—this is what they want to put back into the Bill—industrial undertakings and establish and carry on new industrial undertakings, particularly where their form of industrial democracy, yet to be defined, is practised, will become quite overpowering.
  The Bill is just another excuse for further nationalisation and State control. The parts which refer to the environment or to promotional co-ordination could perfectly well have been achieved by other means. Some will claim in relation to State power that the Bill is only a little one. That was the claim of the maidservant with the illegitimate child. The results are the same—an eventual and irresistible growth.
  This is a Socialist measure, just as the ill-conceived Welsh Rural Development Board was a Socialist measure. We cannot expect any less from a Socialist Government, and with that I cannot take issue. However, I take issue with Socialism itself. The Bill and the Minister's statement today make it plain that we have a prime example of a Socialist Bill purporting to be a measure of moderation. Certainly it may be moderate in the eyes of the Tribune Group but, my goodness, would not its predecessors of just a few years ago have been delighted to achieve what the Bill threatens?
  Unless the Bill and the other measures I have mentioned are not overturned or utterly reformed by the next Conservative Government, Britain will no longer enjoy a mixed economy.
  Indeed some claim that the balance has already badly tilted away from the private sector. We shall have instead—and unless we can overturn it soon we shall have instead—a Socialist State, State-owned and State-run, and a system, therefore, in which freedom itself is bound to perish.
  Mr. Deputy Speaker (Sir Myer Galpern): Order. I would again appeal for brevity.
  8.43 p.m.
  Mr. Caerwyn E. Roderick: I shall try to keep my remarks within the time allocated. Some people, especially Conservative Members, have criticised the principle of the public having certain rights when they have invested public money in concerns. Conservative Members are very willing for public money to be invested in ailing or failing concerns, but they are not willing for us to invest in profitable concerns. This seems a very odd way for these guardians of the public purse as they like to portray themselves, to carry on. When we have invested, they are unwilling for us to expect some return on our money or to expect some say in the way in which the industries concerned are run. This lies behind a great deal of what has taken place in the debate and in other debates on related matters.
  The argument of Conservative Members, as the hon. Member for Cardiff, North (Mr Grist) has just illustrated, is that market forces must be the be-all and end-all of things, and that protection of employment comes second to that. He made it pretty clear in his remarks that if a firm, such as the example given by the hon. Member for Merioneth (Mr. Thomas), is going under it should be allowed to fail. That seems to be his theory.
  We believe in an entirely different philosophy, namely, that if a firm is marginally in trouble we need an agency, such as the Welsh Development Agency, to rescue it. We believe that we should have such a means. Surely it is better to spend a smaller sum on enabling people to retain their jobs than to pay out £1 million in unemployment pay?
  We are accustomed to the arguments used by the Conservative Party for allowing simply those industries in which it is difficult to ensure profitability, such as coal, to remain in public ownership. However, if an industry threatens to be very successful, the Opposition do not want it in public ownership because they might have too many of their supporters clamouring for more public ownership. They want these examples to show that

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  public ownership does not work. For this reason they will be unwilling to support that element in the Bill which indicates that we want to invest in profitable industries as well and to have a stake in them.
  The Secretary of State must retain some controlling powers over this agency. If it has a free rein we in this House shall not be able to question its activities. I have been concerned over the years about the agencies that have been set up in Wales. I believe that Wales, compared with any other part of the country, has more agencies which are semi-independent and which we cannot get at. Throughout the United Kingdom we have the Post Office. I deplore the fact that we cannot question Ministers sufficiently closely on the activities of the Post Office. I do not like the idea that we cannot ask sufficient questions about the activities of the water authority in Wales. We ought to have more power over these bodies. It is public money that they are spending on our behalf.
  This is where the Welsh Development Agency is important. However, we must have a say in its activities through the Secretary of State at this stage. We might develop that in other forms later. Hon. Members may object to this, but in doing so they are crying for complete independence for this body. I am unwilling to allow it such independence, because the appointees should not be free to spend public money in whatever way they wish.
  The hon. Member for Pembroke (Mr. Edwards) did an injustice when he criticised the reference to industrial democracy. He did the Bill less than justice. In Clause 1(3)(d) we refer to the promotion of industrial democracy in undertakings with which the agency is associated. This is important, because our experience over the past few years has been that the creation of public bodies and corporations has not led to sufficient say for employees in the industries concerned. I do not expect it to be spelt out in the Bill exactly what form of industrial democracy is intended.
  Mr. Grist: Will the hon. Gentleman say what he means by "industrial democracy"?
  Mr. Roderick: At the lowest level, it is simply that workers in the industry concerned have some say in the affairs of the industry and are not dictated to. This can be expanded upon and we can discuss what form it may take. But certainly I do not see why we should again have the pattern of set-up that we have had in the past, which has been unsatisfactory. People working in the industries concerned ought to have much more say.
  Finally, I was glad to hear my right hon. and learned Friend the Secretary of State refer to Mid-Wales and rural Wales. I understand his point of view that we cannot at this stage have another body alongside this one. However, when this Bill has become an Act, I look forward to the creation of some such body to look after the interests of Mid-Wales. It could come under the umbrella of this agency or could be a separate body. I shall not argue about that.
  I notice that the most vociferous critics of the Welsh rural development board, Liberal Members, are nowadays finding support for the creation of some such body. The National Farmers' Union of Wales was among the most vociferous opponents of the WRDB, but now it is asking for something similar. We have certainly lost out by not having such a body. I remember when the Tory Government abolished the Pennines Rural Development Board in 1971. That was a good example of what we need in Mid-Wales. I hope that we shall have a comprehensive set-up to look after our interests.
  Sir Anthony Meyer: Like all hon. Members who have spoken in the debate, I welcome those parts of the Bill which provide for co-ordination of existing activities—that is very useful—and those parts of it dealing with the environment. I want to ask the Under-Secretary to make it quite clear that tourism will get a look in on the sponsorship that is coming in under the Bill, because it is one field in particular in which State enterprise can play a really useful rôle in developing and even initiating projects which can have spin-off greatly to the benefit of private enterprise working in the same field.
  I wish briefly to explain why I am going to vote against the Bill tonight. I do so as one who voted with a happy

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  heart for the 1972 Industry Act. I am not at all opposed to the principle of State intervention in industry. I regard the State as having a continuing rôle to fill what might be called social gaps in the achievement of private industry. But in 1972 the situation was a very different one. The problems that faced us in those days were problems of pollution, of running out of raw materials, of labour shortages and of economic imbalance, not at all the problems with which we are faced today. The problems which we face today are the mirror image of the problems that we faced in 1972.
  If I vote against the Bill tonight it will be not primarily on account of what is in it. It is a little hard to know exactly what is in it in terms of intervention, if only because we do not know how the Industry Bill will survive the raking cross-fire that it is getting from both wings of the Labour Party. I shall vote against the Bill not primarily because of what is in it but because it comes at the wrong time, at a time when the mixed economy, as my hon. Friend the Member for Cardiff, North (Mr. Grist) said, is in real peril.
  I wonder whether those hon. Members who pay lip-service to the idea of the mixed economy realise quite what a danger there is of a massive collapse of the whole of the private sector, and I have a horrible fear that the Bill will accelerate that process of collapse, and do so for two reasons: first, because of the additional tax burden which is to be laid on an already groaning private industry. The money that will be spent under the Bill—and we are a little unclear exactly how, and how fast, they are to be spent—has to be raised and much of it will have to come out of private industry. In so doing the Government will be further limiting the ability of private industry to pay its way.
  There is a point that has not been raised by any other speaker in this debate, that bodies such as the Welsh Development Agency and the National Enterprise Board provide a kind of surrogate for effective action. They "kid" people into believing that by creating the right kind of organisation, by setting up the right kind of body, we can somehow avoid having to make very painful choices, that somehow we can make bricks without
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  straw. Hon. Members opposite know as well as anybody else that the only way we are going to get out of our mess, the only way that we shall conquer inflation and start to reduce the terrifyingly rising tide of unemployment, is by persuading people somehow or other to go without goodies today in order to buy the tools to work with tomorrow. It is as simple as that.
  I have a horrible feeling that the Welsh Development Agency is going to obscure that basic truth and that for every two jobs that this agency creates by its interventionist activities, it will take away three elsewhere.
  The one and only certainty about the Bill is that it will win more votes than jobs. It will do so at a time when unemployment is running as rapidly out of control as inflation. As an index of the way in which inflation is running out of control, it is instructive to compare the price of the Bill now with what it cost when it went into the House of Lords on 29th April. It then cost 29p, and when it emerged rather less than two months later it cost 42p. That is a rate of inflation of 45 per cent. in just under two months. On what is now known as the Healey basis of calculation, that is a rate of 270 per cent. per annum, which helps to explain the mess we are in.
  I am seriously concerned about the way in which unemployment is rising in my constituency. It is bad enough for middle-aged people who find themselves out of a job, people who are tempted into premature retirement by the offer of severance pay and so on, and who before very long bitterly regret it. I am still more worried by the prospects for school leavers. The figures for the Rhyl travel-to-work area show that 53 boys and 29 girls are unemployed, compared with nine boys and 11 girls at this time last year. This picture is repeated all over the country. I have a horrible feeling that the young people concerned will grow up into an unfriendly, unwelcoming world in which they feel unwanted.
  Here, more than anywhere else, is the problem we shall face in two years' time—not just an economic problem, not just an unemployment problem, but a social problem of appalling magnitude which will be a time bomb exploding not under the present Government but under their unfortunate successors.
  8.57 p.m.
  Mr. Neil Kinnock: If the last two Opposition speeches had come from Conservative Members from South-East England and the other fatter regions of the countries of the United Kingdom, they would not have caused a ripple on our consciousness because we have been so used to hearing that kind of thing from them. We can understand that in their salubrious and affluent areas, insulated from some of the harsher realities of industrial life, they can arrive at the kind of conclusions they have reached. But when we hear Welsh Tory Members proposing that the cure for inflation in Wales, and even in their own constituencies, is more unemployment it is an extraordinary revelation of their attitude to the conduct of affairs in Wales compared with ours.
  I am sorry that I have not been here for a large part of the debate——
  Mr. Nicholas Edwards: Hear, hear.
  Mr. Kinnock: I took the trouble to try to explain to the hon. Gentleman's Whip before the debate that I was serving on a Committee upstairs, where my hon. Friend the Member for Wrexham (Mr. Ellis) is still serving and therefore was obliged to be absent from part of these proceedings. I am sure that everybody will understand.
  We are now faced with the Welsh Development Agency. When I looked at the Bill when it was produced, and as I followed the debates in the House of Lords, I was not convinced that it was the answer to a Socialist's prayer, but I was prepared to give it my wholehearted support in the knowledge that the powers proposed for the agency, and its purpose, had a realistic place in meeting the problems of Wales. After hearing the hon. Member for Cardiff, North (Mr. Grist), I am much fortified in my opinion that it is after all a Socialist weapon, because the hon. Gentleman sees it as part of the slimy hand of Socialism reaching over our free country, destroying everything that is best. Everything that appears to the hon. Gentleman to be best appears to me to be worst. The very kind of development that he appears to fear most, I wish for most. Therefore, I shall go into the Lobby with a ready conscience and a more joyous heart than I might otherwise have had.
  780
  The Welsh Development Agency, its running mate the Scottish Development Agency and the National Enterprise Board are realistic because they are designed to meet the main difficulties which beset our economy and our people now. With the prospect of growing unemployment, there is a need for a new industrial basis, a new impetus, and—dare I say it?—a new form of enterprise, the traditional system of enterprise having completely failed to deliver the goods or satisfy the needs of workers and citizens in a modern democracy.
  We need a renewal and reinvigoration of our economic system, and it is through machinery like the development agencies and the National Enterprise Board, the extension of public ownership and control, and public accountability throughout our economy that we shall achieve the kind of development we need.
  The answer to our problems, whether we are talking about our outdated industrial structure, our decrepit social infrastructure or our disastrous investment record, lies in the State sponsorship and public accountability of the means of production, distribution and exchange. It does not lie in the destitution of mass unemployment and the destitution of cutting back public expenditure to the bone—remedies which have been attempted before and resulted in the untold misery of the two decades between the wars, as well as the many years of bitter experience before that—[HON. MEMBERS: "Three weeks."] I shall be saying this in three weeks' time, because I am prepared to be honest with my own Government, unlike the hon. Gentleman opposite with his Government and its newly-developed conscience about unemployment—a novel experience for hon. Members who were here during 1972–73 when the unemployment figure reached 1 million. I shall be quite prepared to speak up for my constituents, for my class, for the interests I represent and for the manifesto on which I was elected, regardless of which Government happen to be in power. I hope I shall not have to prove this in three weeks' time, but if I have to do so I certainly shall.
  The answer to our problem lies in production, and not in the destitution which would be visited upon the people as a result of the different types of proposals made by Opposition Members.

  781
  In pursuing our purpose, regional policy is vital. Until now, under both Governments, regional policy has been a crutch for capitalism. It has been the last faint gasp of hope of a Welfare State, trying by cajolery and bribery to generate sponsored industrial development in the peripheral areas by injecting a few hundred million pounds. Help has come but not at the speed or on the scale that is needed. Therefore, the responsibility for creating the jobs, renewing the infrastructure, changing and redeveloping the environment and bringing Wales up to a level of expectation and civilisation which people in many other parts of Britain and throughout the world take for granted is moving more and more into the sphere of public provision.
  It is an inevitable consequence of the failure of the system supported by Conservative Members. If they had any understanding at all of the system in which we are living, of the age in which we are living and of the economy as it develops, they would see that the best they can hope for is a rationalisation of that process. To stand against it in the stupid single-minded way they do is like trying to push back the tide of history. As part of the process we have this increasing demand for accountability and the new aspirations of the people of our country. Having invested their skills, they also demand the same powers in the conduct of their material lives as they have in the conduct of their political lives.
  We are at the dawn of the age when the power of democracy is moving out from its single base of the ballot box periodically on to the shop floor. Opposition Members will throw up their hands in disgust and horror at that, in the same way as people of their convictions did when the vote first came to working men and women. They have the mask of civilisation today. They understand the maturity of the lumpenproletariat and are prepared to concede that they should have the vote. But if they are capable of making a direct contribution to the running of our country, they are more than capable of making an equally direct contribution to the running of our industries which depend on their energies, talents, skills, originality, inventiveness and enterprise even to exist, let alone to be profitable and viable.
  782
  In all these spheres, whether we talk about the development that we need of industry in Wales, about the improvement of our environment or about the inspiration of our people, the Welsh Development Agency will play its part. Like many other propositions made by the Government, they are plans; they are proposals.
  I am willing to stand in charitable judgment of such proposals and to judge them in the reality of the jobs they bring, the changes they bring and the encouragement they give to our people. Those who are ideologically opposed to the Bill are not simply in for a hiding tonight in the Division Lobbies. They are in for a hiding by history.
  9.7 p.m.
  Mr. Wyn Roberts: Despite all the criticism levelled at the Opposition for insisting on this debate being held on the Floor of the House rather than in the Welsh Grand Committee, I have not noticed that the debate here has impaired hon. Gentlemen's enjoyment of it. We have had a good debate, and I am sure that the Government as well as ourselves will have found it useful.
  This may be a historic Bill, but never did a Bill suffer more from bad company than this one. Someone once said that bad company was like a dog: it dins those most whom it loves best. The Bill has been sullied by its association with the Industry Bill, and that association has made its passage through this Parliament more difficult.
  Not only are the two Bills associated in our minds. They are physically associated. They have similar features. So, too, has the Scottish Bill. That and the Welsh Bill are as alike as twin brothers, and one has only to trace their lineage in the manifestos of the Labour Party to discover that both are offspring of the Industry Bill concept. Further comments on my part on their parentage would probably be in bad taste, if not out of order.
  The Prime Minister has now seen fit to amend the Industry Bill—not half as much as some of us would wish, but a little is better than none. One of the amendments requires that the National Enterprise Board should conform to Section 209 of the 1948 Companies Act. That section deals with the power to

  783
  acquire the shares of shareholders dissenting from a scheme or contract approved by the majority. I hope that the Minister will be able to tell us whether the same amendment will apply to the Welsh Development Agency.
  The similarity between this Bill and the Industry Bill naturally led to a suspicion that the agency in Wales to be established under this Bill would be a sub-office of the NEB. Indeed, the suspicion was there before the Bill was published, because the Government felt obliged to deny it in their consultative paper published in January, which said that the agency would not be simply a Welsh arm of the National Enterprise Board. That may be so. Clearly, the agency has other functions, but the fact remains that at this moment the precise relationship between the agency and the NEB has yet to be defined in guidelines which this House has yet to see. I am sure that we should all, including the hon. Member for Caernarvon (Mr. Wigley), be much happier if we had those guidelines with us now. I think that the Government are culpable to some extent in not having produced them for our discussion today.
  According to a statement made by Lord Hughes in the other place, we shall not see these guidelines until the development agency and the board are established. Lord Hughes was talking about the Scottish agency and the NEB. But I think I am right in taking it that what he said about the relationship of the Scottish agency with the NEB is equally true of the relationship between the Welsh agency and the NEB. We understand that the guidelines will deal with those functions of the NEB in Wales which are not devolved to the Welsh Development Agency. These are the functions of extending public ownership into profitable sectors of industry, promoting schemes for the reorganisation or development of industries at a national level, acting as a holding company for State holdings in industry and acting as a channel for selective assistance to companies with branches in Wales which need to be assisted on a United Kingdom basis.
  Those are considerable powers. We take strong exception to some of them. Although they do not belong to the
  784
  agency, we are told that the NEB will consult the agency about their exercise in Wales. In other words, there is likely to be a considerable overlap in the activities of the NEB in Wales and the agency. The agency may not be the arm of the NEB in Wales but those bodies will certainly be hand in glove.
  Our suspicions of the agency's relationship with the NEB were well justified. The connection between this Bill and the Industry Bill has been curiously interpreted by the Press in Wales, notably the Western Mail. A number of speakers have referred to that point. That newspaper took a convoluted line—to use one of the Prime Minister's current favourite phrases—when it sought to deal with the typically mild criticism of my hon. Friend the Member for Pembroke (Mr. Edwards) of the Bill as a vast extension of Bennery in Wales.
  "But what he is proposing"
  said the Western Mail leader,
  "is precisely that. To take away powers from a Welsh agency is simply to hand hard-won autonomy straight back to Mr. Benn or his successors and ensure that the agency is just the Welsh arm of the National Enterprise Board."
  In other words, the Western Mail did not mind the Secretary of State for Wales extending public ownership as long as it was not done by the Secretary of State for Industry.
  I am sorry to tell the right hon. and learned Gentleman that I see no difference between the extension of public ownership under one Secretary of State or the other. There is no difference. They are both Secretaries of the same State. We are still one State, if not one Church, and will remain so until the Members of Plaid Cymru get their way. The Western Mail's curious philosophy was that we do not mind being robbed as long as we are being robbed by friends.
  Perhaps this is the right moment to deal with the general impression prevalent in Wales that in the not-too-distant future the agency will be made responsible to a Welsh assembly. The same future apparently awaits the land authority for Wales to be set up under the Community Land Bill. Yet what the Government have said on that point is meagre. The general impression that a transfer of responsibility will take

  785
  place is based on what the Government have not said rather than on what they have said. Hon. Members who wish for such a transfer should not count their chickens before they are hatched.
  Meanwhile, we are giving immense powers to the Secretary of State, powers which he himself described as near-dictatorial, and we are giving those powers to him very much on trust. He is becoming the latter-day Rowland Lee, for we must take into account not only the powers he has under this Bill but the powers he will have under the Community Land Bill. I am not sure which I fear most, the liaison between the agency and the NEB or that between the agency and the Land Authority. Both will have compulsory purchase powers, both are small, compact bodies, democratic only in so far as they are responsible to us through the Secretary of State for Wales. We assure him that we shall watch both organisations and himself very carefully.
  The Bill and the agency have suffered, too, from what I can only call bad presentation. I should not like to call it dishonest presentation, but neither would I call it honest. We had all the good news first and somehow the Government never got round to giving us the bad news, or, if they did, it was subliminally presented. News of the agency to be set up under the Bill was delivered with an ample sugar coating of euphoria and we had to bite hard to taste the bitterness within.
  In the consultative paper we read of the agency's impeccable objective as being
  "to accelerate the economic and industrial development of Wales and to improve the environment in a way consistent with that objective."
  We read of the proposed take-over of the Welsh Industrial Estates Corporation by the agency and its supporting rôle in connection with the development corporation. If one did sit up at the description of the agency's third function as being:
  "to carry out regional development functions in Wales of the proposed National Enterprise Board"
  one was quickly reassured by the firm statement that the agency would not simply be a Welsh arm of the NEB.
  Fair play to the CEI in Wales. Although it welcomed the agency in
  786
  principle—the agency as described in the consultation paper, not as seen in the Bill—it expressed reservations, and those reservations have deepened with time. That part sentence in the consultation paper that states that the agency will:
  "establish new and joint ventures"
  has gathered more opposition to the Bill than all the rest. In the original Bill it is enshrined in Clause 1(3)(c) as the power:
  "to carry on industrial undertakings and to establish and carry on new industrial undertakings"—
  in other words, to extend public ownership and compete with existing private undertakings. Let us get this clear. What we object to about this competition is that we cannot see that it will be fair.
  Mr. Kinnock: Will the hon. Gentleman save himself a lot of breath and us a lot of time by admitting that, whenever the State is giving, the CBI says that that is all right, but whenever the State wants to take some power to go with the money, the CBI complains that it is unfair?
  Mr. Roberts: Where does the money come from in the first place? We have had this argument before, when Government supporters were saying that the State supports industry to the tune of £2 million a day. Is it not equally true that industry supports the State to the tune of £10 million a day in taxation?
  The NEB has similar powers under the Industry Bill to form bodies corporate and partnerships. We must resist the Bill, because the Secretary of State has made it absolutely clear that Clause 1(3)(c), although removed by the Lords, will be restored at the first opportunity. It seems silly to us that the Government should spoil their ship for a ha'porth of tar, but that is their decision.
  We must resist the Bill, because we do not believe that the extension of public ownership is either politically or economically right. It may on occasions be the lesser of two evils, but it is not, in our opinion, a course that comments itself as being desirable in itself, which is the way that Labour Members regard it. This is Socialism, as so many Labour Members have said in the course of the debate, but to me it is Socialism not so pure and not so simple. I note in passing that Plaid Cymru may now be called Plaid

  787
  Cenedlaetholi, which may be translated as the Welsh Nationalisation Party.
  Mr. Roderick: The hon. Gentleman prefers nationalisation, but, in his view, is unemployment preferable to nationalisation?
  Mr. Roberts: I do not think that question fits into the context at all. I shall be coming to that point soon.
  Before the right hon. and learned Gentleman restores the Bill to its pristine form, let me plead with him to take various matters into account. First, there is the current economic situation and the Government's immense borrowing requirement that is now estimated at considerably more than the £9 billion given by the Chancellor in this Budget Statement. This may well necessitate cuts of some £2,000 million over three years, according to some pundits who are basing their view on the last quarterly bulletin of the Bank of England.
  I am sure that the Secretary of State feels that the £100 million he can obtain for his agency under the Bill will be well spent. Part of it he is clearly committed to spending anyway. However, does the Secretary of State seriously believe that the new spending he has envisaged will be in the best interests of the country as a whole? If so, does he seriously believe that the Chancellor of the Exchequer will agree with him? I tell him bluntly that I do not think that he or his Bill will escape the public expenditure cuts to come, and I shall tell him why. It is precisely because he intends to use some of his funds for the purposes of Clause 1(3)(c). The money which he will have to do this will have been borrowed by the Government at a rate of interest which industry and commerce are finding it increasingly difficult to afford. If successful businesses cannot afford to borrow at such rates and remain solvent, what hope has a Government-sponsored new venture? It will be faced with the prospect of a loss right from the start.
  It is all very well to back an existing industry, like British Leyland, when it is facing hard times, and try to tide it over, but it is an entirely different matter for the Government to become involved in new ventures, especially when we are in a world recession of the magnitude and
  788
  depth of this one, and when the outcome of the renegotiation of the social contract is still unknown. I do not know how the Government think it possible to have wage restraint when they are flashing their money about like children at a funfair.
  Mr. John Morris: If the hon. Gentleman believes that no money will be available and, therefore, the Bill will be harmless, why does he intend to lead his troops, few as they are, into the Lobby against it tonight? Secondly, will he explain the constitutional novelty whereby we are dealing with a Bill the parts of which he finds offensive are not in it as proposed, and yet he intends to vote against Second Reading?
  Mr. Roberts: I will take the right hon. and learned Gentleman's second point first. He made it absolutely clear, and it was made abundantly clear in another place, that the Government propose to use the Bill as a vehicle for the return of the obnoxious clause about which I am talking.
  To answer the first point, the right hon. and learned Gentleman may have the money for the consolidation aspects of the Bill, but he will not have the money to operate Clause 1(3)(c), which he insists on putting back into it. I warn the Secretary of State that by insisting on the restoration of Clause 1(3)(c) he is not only placing his own economic judgment in grave doubt but putting his Own head on the block within his own Government.
  Last weekend we had the Prime Minister preaching that the end was at hand—within six weeks, I think—and pleading for a sense of urgency based on a cleat recognition that money cannot be spent twice because if it is pre-empted for income it is no longer available for public expenditure. But this is precisely what has happened and what may happen again. It is in this context that I believe the Bill may not survive the public expenditure cuts to come. Clearly, the Bill was conceived in happier times. It looks forward optimistically to a future which, alas, has become clouded with uncertainty. It has, therefore, lost its immediate relevance.
  We wish that the Secretary of State was bringing forward a measure more

  789
  apposite to the present situation. The right hon. and learned Gentleman accused us of being out of touch. It is he who is out of touch with the present situation in Wales.
  Mr. Ioan Evans Mr. Ioan Evans rose——
  Mr. Roberts: I think that the Secretary of State has begun to realise that. When I pressed him on that point in the Welsh Grand Committee on 7th May his reply was modest. One might almost say that it was humble, which is the appropriate attitude for any Minister faced with our present unemployment figures in Wales. I asked:
  "Do the Government really think that this is the answer to the economic problems of Wales now? Are they seriously saying to the 60,000 unemployed and those whose employment is threatened that the development agency will be their salvation? If so, they are deceiving the public and deluding themselves."
  The right hon. and learned Gentleman replied:
  "We have said quite clearly that we are part of the economy of the United Kingdom, that the heart of the matter is solving the problems of the United Kingdom as a whole. I said so today. But I believe that the Welsh Development Agency will be a vital part of the machinery that I need to tackle the problem. I put it no higher than that."—[Official Report, Welsh Grand Committee, 7th May 1975; c. 91.]
  Mr. Ioan Evans: Will the hon. Gentleman give way?
  Mr. Roberts: No, I will not give way.
  We understand the need for machinery to consolidate control over the Welsh Office's various activities in the industrial and environmental sectors. We have no quarrel with that aspect of the agency. Nevertheless, we question the relevance of some of the Secretary of State's new powers under the Bill to cur current problems in Wales, some of which have been exacerbated by the Government.
  I will give an example. In my constituency there is a factory which employs about 1,500 people manufacturing washing machines. The Chancellor has increased VAT on washing machines to 25 per cent. Those who work at the factory now live in fear of losing their jobs if orders fall off. That situation has been created by the Government. What is the relevance of the Bill to that situation?
  790
  One of the purposes of the agency is to maintain or safeguard employment, but can it do so in the face of counter-productive action by other Government Departments? That is the question that we have to answer. The situation in my constituency is a microcosm of what is happening in Wales and in the country as a whole. It is Government action that is responsible for much of our present unemployment and lack of investment.
  I have quoted the OECD survey of the United Kingdom economy at the right hon. and learned Gentleman once before but I make no apology for doing so again. The survey reads:
  "Investment intentions in manufacturing industry and business confidence weakened through 1974 to historically low levels. Poor profitability, the liquidity squeeze, rapid inflation, weak demand and uncertainty about Government plans for industry and the Common Market, may all have contributed to this."
  That is a damning indictment from an impartial and objective source which we all respect. Clearly we must first get right our general economic and industrial policies. If I recall his words correctly, the right hon. Member for Anglesey (Mr. Hughes) said that this is all "pie in the sky" unless we get our economic policies right. When the United Kingdom flourishes, Wales flourishes, but that will not happen until the rate of inflation is reduced, until there is reasonable profitability, and until investors have the confidence to invest.
  This Bill only tinkers with the edge of our problems and, insofar as the impression has been given that it does more than that, the Welsh public have been deluded and badly misled. The Government's function is to provide the framework in which business and industry can flourish. It is not the Government's function to run industry themselves. The Government should provide the infrastructure—for example, roads, sewerage and sites. Heaven only knows, there is enough work to do on those lines in Wales.
  For the Government to become involved themselves in industry is an admission of failure. We may be sure that where private industry cannot succeed the Government will almost certainly fail. There will be little to show for their efforts except for the new

  791
  style of dereliction which is revealed in the Government's accounts.
  To sum up, I ask my right hon. and hon. Friends to oppose the Bill's Second Reading. The Government have indicated clearly that they intend to restore to the Bill those sections which we believe to be totally misconceived, unnecessary and mistaken both on political and on economic grounds. I refer to the sections which give power to the agency to extend public ownership, a principle which the more it is practised the more we abhor because of its costly results.
  Secondly, we do not think that this is the right time to experiment with new ventures on dearly borrowed money. It is a time for restraint in public expenditure, as the Government well know. We accept that some of the expenditure under the Bill is inevitable in the sense that it was there before and necessary, but some of the new anticipated expenditure is gratuitous. I refer, of course, to the extension of public ownership. We doubt whether it can be other than wasteful in the long run.
  Finally, we shall vote against the Bill because it is our first opportunity on the Floor of the House to express our grave displeasure at the Government's conduct of economic and industrial policies in Wales. The Bill before us will not be the salvation of the Welsh people. We are all agreed on that. But if it is not to be the salvation of the Welsh people, what is? The Welsh people are entitled to look to the Government for help. We are entitled to press the Government to think again and to try to devise solutions which are matched to our current problems.
  The Bill is a mask to hide the Government's inability to deal with our problems, many of which they have created and exacerbated. For these reasons and others, I ask my hon. Friends to vote against the Bill.
  9.35 p.m.
  The Under-Secretary of State for Wales (Mr. Barry Jones): Perhaps the best comment I can make on the Opposition's opening and closing speeches is summed up in the phrase "bitter and mild"—"bitter" from the hon. Member for Pembroke (Mr. Edwards) and "mild"
  792
  from the hon. Member for Conway (Mr. Roberts).
  I listened attentively to the speech made by the hon. Member for Pembroke. I do not find it easy to find many points worth answering. We heard a good deal about the Opposition's view on the United Kingdom economy and there was much bandying about of highly tendentious statistics. The hon. Gentleman's speech seemed to bear all the hallmarks of the hard-nosed men in the Central Office research department. What it lacked was any contact with the people of Wales, their working lives and their wishes. I think that all Members of the House and all the people of Wales would have welcomed much more from the hon. Gentleman about the Bill. I suspect that the reason why we did not hear a lot about the Bill was that the hon. Gentleman genuinely found little to complain about. As for the hon. Member for Conway, his speech had a canine flavour to it. It was slightly rabid in parts and perhaps in many ways its bark was worse than its bite.
  This has been a good and wide-ranging debate. I shall try to answer the points of detail which have been made. The Bill is a landmark in the economic history of Wales. It clearly commends itself to the great majority of people. Acceptance of the Bill cuts across party political boundaries, and it is hard to think of any proposal affecting Wales in recent years which has met with such approval. This is the case only because the purposes of the Bill are seen to be directed at the real needs of Wales and in a sensible and practical way.
  As for the parentage of the Bill, I do not think there is any doubt about it. It is a Labour Bill and is very much the child of my right hon. and learned Friend the Secretary of State for Wales. It is true to say that no other political party had such detailed proposals to put before the House as those contained in the Bill.
  Individual areas of Wales suffered many years ago from bad, sloppy economic planning—or, more accurately, from no planning at all. Worse still, the pursuit in the past of financal rewards with no concern for social or environmental implications has led to areas of great deprivation. Added to this, an excessive dependence on the two major

  793
  industries of coal and steel has made our economy particularly vulnerable to attack when times are bad. Current problems and the awesome inheritance of yesteryear mean that we have mammoth difficulties to overcome. Clearly a radical solution is required. I believe that the agency will have the powers to make a contribution to setting things aright and preventing the mistakes of the past from happening again.
  This is the first wholly Welsh Bill on economic, industrial and environmental matters. There are perhaps, in the English language, two novels—Llewellyn's "How Green was my Valley" and Cordell's "The Rape of the Fair Country"—which described the ravages of industrialisation in Wales in this and the last century—popular fiction which depicted grim fact. My right hon. and learned Friend's Bill repays a debt to generations past and offers hope for the future for the people of Wales.
  Having emphasised the "Welshness" of the Bill, I should particularly like to draw attention to two points. The first is the subject of derelict land clearance. The county and district councils have this assurance from me. They will continue to play the major rôle in derelict land clearance. We will consolidate, not change, the existing arrangements. We will build on, not detract from, the strengths of the present system. We acknowledge the success of local councils so far in clearing dereliction. I have mentioned Richard Llewellyn, the novelist. He returned to Wales recently after some years' absence. In the Rhondda Valley, at Gilfach Goch, he could not recognise the place he revisited. The great tips had been removed, and the area was landscaped.
  Nevertheless the agency has a substantial and important environmental rôle. The Welsh Office's Derelict Land Unit will merge into the agency. I expect to see the agency act as a catalyst to ensure a further surge forward to rid our beautiful land of the despoliation of the past. The rôle in derelict land clearance is crucial. Land for new housing and for factories is in short supply. The people of the valleys are entitled to live and work in an improved environment. This Bill offers them just that prospect.
  I pay tribute to my right hon. Friend the Member for Anglesey (Mr. Hughes)
  794
  for the great work he did at the Welsh Office, and in particular on having the vision and commitment to set up the Derelict Land Unit in Cardiff. That was a master-stroke for Wales. My right hon. Friend showed again in his speech his great involvement and experience in Welsh affairs. I echo the tribute he paid to the Mid-Wales Development Corporation. It is not intended that the agency should alter or detract from the work of the corporation. We are seeking to emphasise that the agency in its Mid-Wales rôle, will work in harmony with the corporation, and within this partnership a further strategy for developing and reinvigorating Mid-Wales can be worked out. My hon. Friend the Member for Brecon and Radnor (Mr. Roderick) made strong points on Mid-Wales in his very knowledgeable speech.
  My right hon. Friend the Member for Anglesey and the hon. Member for Barry (Sir R. Gower) asked why there was no mention of agriculture in the list of requirements in Clause 2. This does not mean that experience in agriculture would not be of importance to the agency, and it is not excluded. Perhaps my right hon. Friend slightly misread the terms of the clause; it is not as exclusive as he suggested. It refers only to certain skills and experience which may be drawn upon, but it is open to the Secretary of State to look for people who will bring to the agency experience of other walks of life, not excluding agriculture
  Sir Raymond Gower: I accept that the provision is not exclusive, but the Government have gone to the trouble of naming certain other industries. Why exclude agriculture, which is the chief industry in most of Wales?
  Mr. Jones: This is a Second Reading debate and I hoped I had shown in my speech that I had taken this important point on board.
  My right hon. Friend the Member for Anglesey referred to some apprehensions expressed by the Association of District Councils. There is no cause for conflict about purchase of land. The existing arrangements are unaltered by the Bill. Second, there is no conflict on housing, because the agency does not have a housing rôle. The point about local government local representation will need to be

  795
  considered further. There will certainly be an opportunity for discussion in Committee.
  My right hon. Friend the Member for Anglesey, my hon. and learned Friend the Member for Abertillery (Mr. Thomas) and my hon. Friend the Member for Swansea, East (Mr. Anderson) made some valuable points about the locations of the agency. These will certainly be taken into account when the agency's locations are discussed.
  It will be clear from the terms of the Secretary for State's speech that the agency will not be "cabin'd, cribb'd and contin'd" to, for example, Cardiff. As my right hon. and learned Friend made clear, the agency will have an all-Wales rôle and its locations will have to reflect that. The agency is not being placed in any way in a privileged position in relation to planning permission. This is made clear by the absence in the Bill of any provision to the contrary. We attach particular importance to this. I know that the local authorities in Wales do so too. This is one of the ways in which we emphasised and illustrate that the agency will he expected to act in partnership with local authorities and other bodies such as the Countryside Commission and the Nature Conservancy.
  Questions have been raised about the agency's finances. We have made it cleat that there is no time limit on the expenditure. I would have thought that the reason for this is clear. It is impossible to predict how rapidly the agency will need to draw upon the financial resources at its disposal as this will depend upon a variety of matters, including the needs of industry for investment finance.
  The speed at which the money will be spent will depend on what the agency determines it needs to carry out the job effectively. What is important is that the agency has sufficient resources now to get on with the job we are giving it, which will enable it to make an impact upon the problems facing Wales. A full opportunity will be afforded to Parliament to debate the raising of the limit from £100 million to £150 million, as hon. Members will see if they read Clause 16(4) of the Bill.
  I want to make a brief reference to the point raised by the hon. Member for
  796
  Caernarvon (Mr. Wigley) about the EEC. There is no inhibition upon the agency if it wishes to work in full partnership with organisations or agencies of the European Community. The details will be for the agency to work out with Brussels. The full range of Community finances will still remain available.
  The hon. Member for Pembroke spoke at length on the subject of finance. He asked whether the money would be spent. That would seem to be a reasonable enough question, but I got the impression that he did not really want any money to be spent. We are talking about money to be spent for the benefit of the people of Wales in Wales. The money will be spent on matters of the highest priority like derelict land reclamation.
  Is the hon. Member for Pembroke suggesting that £2½ million a year is enough for derelict land work? Surely he will agree that that sum is not enough. Is he suggesting that we cannot increase expenditure on the work of the Welsh Industrial Estates Corporation? Surely, again, he would say that it is not enough. I believe he is suggesting that nothing more should be spent on intervention in industry. Therefore, he had to be critical of the agency's whole spending. I am sure that the agency's board will spend wisely, well and with a due sense of priority on those jobs which all know in their hearts to be essential and right for Wales.
  The hon. Member for Cardiff, North (Mr. Grist) seemed to be much exercised by the provision in paragraph 21 of Schedule 1 which relates to the Prevention of Fraud (Investments) Act. That paragraph prohibits the unauthorised distribution of circulars relating to investments. The Act as a whole gives complete freedom to exempted dealers to distribute such circulars. Most leading City institutions enjoy exempted dealer status.
  The agency will be a body of high financial probity which will provide shareholders with a fair and honest account of the circumstances in which they are being asked to dispose of their shares. There are precedents for this in the Trustee Investments Act, the Charities Act, the Industrial Reorganisation Corporation and, indeed, the Industry Bill. I am not quite sure what the hon. Member was trying to impute in his remarks, but

  797
  he might have taken the trouble to look at the provision to which he took exception before complaining. I hope that my remarks have helped to set his fear at rest.
  Questions have been raised by the hon. Member for Caernarvon and the hon. Member for Cardiff, North on the relationship between the Welsh Development Agency and the National Enterprise Board. I am sure they will agree that much of this will be dealt with in detail in Committee.
  I shall give three assurances to the House. First, the Government have undertaken to publish guidelines setting out details of the relationship when they are finalised. Clearly, this will not be before the agency and the board are in being since we wish both bodies to have an opportunity to participate in formulating the contents of the guidelines. It would make no sense to impose the guidelines on them. However, I can give an absolute assurance that the guidelines will be made widely available and that Parliament and industry will be fully aware of their contents.
  Secondly, the agency will not be an arm of the NEB in Wales. We consider that a vitally important facet of the agency's responsibilities is that it should develop contacts with the whole of industry in Wales. It will be able to enter into discussions with any Welsh-based company or the management of any Welsh undertaking to establish how that company or undertaking can best contribute to the good of the Welsh economy. There is no question whatever of the agency's activities being limited to small, locally-owned companies, as some misguided critics have suggested. There will be much work for the agency to do in Wales, which it will be in a position to do entirely on its own.
  Mr. Wigley Mr. Wigley rose——
  Mr. Jones: I have dealt with many of the points raised by the hon. Gentleman.
  Thirdly, when the NEB operates in Wales, as it must do, and if, for example, it is involved in companies operating on both sides of the border, it will do so in full consultation with the agency.
  In conclusion, speaking now as a NorthWalian—the hon. Member for Flint, West (Sir A. Meyer), the hon. and learned
  798
  Member for Denbigh (Mr. Morgan) and the hon. Member for Caernarvon spoke as North Walians—I feel sure that I can welcome the Bill on behalf of all those whose homes are in that part of the Principality. North Wales is an area of both outstanding natural beauty and major industry—from Snowdonia, the Isle of Anglesey and the Vale of Clwyd to the steel complexes at Shotton and the vigorous industrial life of Wrexham. Thus it has just those two aspects of life and work to which the Bill directly is addressed.
  North Wales needs economic development and reinvigoration. It has many threats to face up to. Its steel industry must at least streamline itself. Twelve collieries have become but two. The slate quarries have closed. Our communications system requires improvement. West of Deeside, unemployment rates are uncomfortably high. These threats will be met strongly.
  The area also has an environment to preserve. It will always be our objective to be able to develop new jobs without despoiling the environment. But the area also has many miles of bleak industrial dereliction—the unfortunate legacy of the past about which I spoke earlier—which need to be restored and given new life. This includes the forbidding spillage of the great Snowdonian slate quarries and the ubiquitous tips of the northeastern coalfield. It is my firm conviction that the powers in the Bill and the resources to be available to it will help to meet these objectives which all those whose heart is in North Wales must share with me.
  I have said that this is a wholly Welsh Bill. It has been preceded by exhaustive and successful consultations with industry, organised labour and local government. It establishes an organisation for economic and environmental development which can bring great help to South Wales, Mid-Wales and North Wales. It creates a strong and flexible agency which will work very hard indeed to generate prosperity in the Principality in the decade ahead. It has both the financial resources and the power of the Secretary of State and the Welsh Office behind it.
  I do not say that it is a magical and universal panacea for the problems that

  799
  beset the Welsh economy. We have many problems, and we shall need as many measures as are necessary to overcome them. But this is an imaginative proposal which can contribute speedily and effectively towards the creation of a better and more secure way of life for all the people of Wales.

  Division No. 247.]

  AYES

  [10.00 p.m.

  Abse, Leo

  Gourlay, Harry

  Murray, Rt Hon Ronald King

  Anderson, Donald

  Graham, Ted

  Newens, Stanley

  Archer, Peter

  Grant, George (Morpeth)

  Noble, Mike

  Ashton, Joe

  Grimond, Rt Hon J.

  Oakes, Gordon

  Atkins, Ronald (Preston N)

  Grocott, Bruce

  Ogden, Eric

  Atkinson, Norman

  Hamilton, W. W. (Central Fife)

  Orme, Rt Hon Stanley

  Bagier, Gordon A. T.

  Harper, Joseph

  Owen, Dr David

  Barnett, Guy (Greenwich)

  Harrison, Walter (Wakefield)

  Padley, Walter

  Barnett. Rt Hon Joel (Heywood)

  Hatton, Frank

  Palmer, Arthur

  Bates, Alf

  Hayman, Mrs Helene

  Parry, Robert

  Beith, A. J.

  Heffer, Eric S.

  Pavitt, Laurie

  Bidwell, Sydney

  Hooley, Frank

  Peart, Rt Hon Fred

  Blenkinsop, Arthur

  Horam, John

  Phipps, Dr Colin

  Booth, Albert

  Howells, Geraint (Cardigan)

  Rees, Rt Hon Merlyn (Leeds S)

  Bottomley, Rt Hon Arthur

  Huckfield, Les

  Richardson, Miss Jo

  Boyden, James (Bish Auck)

  Hughes. Rt Hon c. (Anglesey)

  Roberts, Gwilym (Cannock)

  Bradley, Tom

  Hughes, Mark (Durham)

  Robertson, John (Paisley)

  Bray, Dr Jeremy

  Hughes, Robert (Aberdeen N)

  Roderick, Caerwyn

  Brown, Hugh D. (Provan)

  Hughes, Roy (Newport)

  Rodgers, George (Chorley)

  Brown, Robert C. (Newcastle W)

  Hunter, Adam

  Roper, John

  Buchan, Norman

  Irving, Rt Hon S. (Dartford)

  Rose, Paul B.

  Butler, Mrs Joyce (Wood Green)

  Jackson, Colin (Brighouse)

  Ross, Stephen (Isle of Wight)

  Callaghan, Rt Hon J. (Cardiff SE)

  Janner Grevilie

  Ross, Rt Hon W. (Kilmarnock)

  Campbell, Ian

  Jay, Rt Hon Douglas

  Rowlands, Ted

  Carmichael, Neil

  Jenkins, Hugh (Putney)

  Ryman, John

  Carter, Ray

  Jenkins, Rt Hon Roy (Stechford)

  Sedgemore, Brian

  Carter-Jones, Lewis

  John, Brynmor

  Shaw, Arnold (Ilford South)

  Castle, Rt Hon Barbara

  Johnson, James (Hull West)

  Sheldon, Robert (Ashton u-Lyne)

  Cocks, Michael (Bristol S)

  Johnson, Walter (Derby S)

  Shore, Rt Hon Peter

  Cohen, Stanley

  Jones, Alec (Rhondda)

  Short, Rt Hon E. (Newcastle C)

  Cook, Robin F. (Edin C)

  Jones, Barry (East Flint)

  Silkin, Rt Hon John (Deptford)

  Corbett, Robin

  Jones, Dan (Burnley)

  Silverman, Julius

  Cox, Thomas (Tooting)

  Kaufman, Gerald

  Skinner, Dennis

  Craigen, J. M. (Maryhill)

  Kelley, Richard

  Small, William

  Crawshaw, Richard

  Kerr, Russell

  Smith, John (N Lanarkshire)

  Cryer, Bob

  Kilroy-Silk, Robert

  Snape, Peter

  Cunningham, Or J. (Whiten)

  Kinnock, Neil

  Spearing, Nigel

  Davidson, Arthur

  Lamborn, Harry

  Spriggs, Leslie

  Davies, Bryan (Enfield N)

  Lamond, James

  Stewart, Donald (Western Isles)

  Davies, Denzil (Llanelli)

  Leadbitter, Ted

  Stewart, Rt Hon M. (Fulham)

  Davies, Ifor (Gower)

  Lee, John

  Stoddart, David

  Deakins, Eric

  Lewis, Ron (Carlisle)

  Stott, Roger

  Dean, Joseph (Leeds W)

  Lipton, Marcus

  Strang, Gavin

  Delargy, Hugh

  Loyden, Eddie

  Taylor, Mrs Ann (Bolton W)

  Dell, Rt Hon Edmund

  Luard, Evan

  Thomas, Dafydd (Merioneth)

  Dempsey, James

  Lyons, Edward (Bradford W)

  Thomas, Jeffrey (Abertillery)

  Dormand, J. D.

  Mabon, Dr J. Dickson

  Thomas, Mike (Newcastle E)

  Douglas-Mann, Bruce

  McCartney, Hugh

  Thomas, Ron (Bristol NW)

  Dunn, James A.

  McElhone, Frank

  Thompson, George

  Dunwoody, Mrs Gwynerh

  MacFarquhar, Roderick

  Tierney, Sydney

  Edwards, Robert (Wolv SE)

  Mackenzie, Gregor

  Tinn, James

  Ellis, John (Brigg & Scun)

  Mackintosh, John P.

  Tomlinson, John

  Ellis, Tom (Wrexham)

  McMillan, Tom (Glasgow C)

  Tomney, Frank

  English, Michael

  Madden, Max

  Tuck, Raphael

  Evans, Fred (Caerphilly)

  Magee, Bryan

  Urwin, T. W.

  Evans, Gwynfor (Carmarthen)

  Mahon, Simon

  Varley, Rt Hon Eric G.

  Evans, Ioan (Aberdare)

  Marks, Kenneth

  Wainwright, Edwin (Dearne V)

  Evans, John (Newton)

  Marquand, David

  Wainwright, Richard (Colne V)

  Ewing, Harry (Stirling)

  Mason, Rt Hon Roy

  Walker, Harold (Doncaster)

  Faulds, Andrew

  Maynard, Miss Joan

  Ward, Michael

  Flannery, Martin

  Meacher, Michael

  Watkins, David

  Fletcher, Raymond (Ilkeston)

  Mellish, Rt Hon Robert

  Watkinson, John

  Ford, Ben

  Mikardo, Ian

  Weetch, Ken

  Forrester, John

  Millan, Bruce

  Welsh, Andrew

  Fowler, Gerald (The Wrekin)

  Miller, Dr M. S. (E Kilbride)

  White, Frank R. (Bury)

  Freeson, Reginald

  Mitchell, R. C. (Solon, Itchen)

  White, James (Pollok)

  Freud, Clement

  Morris, Alfred (Wythenshawe)

  Whitehead, Phillip

  Garrett, W. E. (Wallsend)

  Morris, Charles R. (Openshaw)

  Whitlock, William

  Gilbert, Dr John

  Morris, Rt Hon J. (Aberavon)

  Wigley, Dafydd

  Gould, Bryan

  Moyle, Roland

  Willey, Rt Hon Frederick

  The Welsh people in the British context have contributed much to our economy. They are entitled to this Bill, which I commend to the House.
  Question put, That the Bill be now read a Second time:—
  The House divided: Ayes 219, Noes 158.

  Williams, Alan (Swansea W)

  Wilson, William (Coventry SE)

  Williams, Alan Lee (Hornch'ch)

  Wise, Mrs Audrey

  TELLERS FOR THE AYES

  Williams, Hi Hon Shirley (Hertford)

  Woodall, Alec

  Mr. Donald Coleman and

  Williams, W. T. (Warrington)

  Woof, Robert

  Mr. James Hamilton

  Wilson, Rt Hon H. (Huyton)

  NOES

  Adley, Robert

  Gow, Ian (Eastbourne)

  Nott, John

  Arnold, Tom

  Gower, Sir Raymond (Barry)

  Oppenheim, Mrs Sally

  Atkins, Rt Hon H. (Spelthorne)

  Gray, Hamish

  Page, Rt Hon R. Graham (Crosby)

  Awdry, Daniel

  Grist, Ian

  Parkinson, Cecil

  Baker Kenneth

  Grylls, Michael

  Percival, Ian

  Bell, Ronald

  Hall, Sir John

  Pink, R. Bonner

  Bennett, Dr Reginald (Fareham)

  Hamilton, Michael (Salisbury)

  Prior, Rt Hon James

  Benyon, W.

  Harrison, Col Sir Harwood (Eye)

  Raison, Timothy

  Berry, Hon Anthony

  Hayhoe, Barney

  Rathbone, Tim

  Biffen, John

  Higgins, Terence L.

  Rawlinson, Rt Hon Sir Peter

  Biggs-Davison, John

  Holland, Philip

  Rees, Peter (Dover & Deal)

  Blaker, Peter

  Hordern, Peter

  Renton, Rt Hon Sir D. (Hunts)

  Boscawen, Hon Robert

  Howell, David (Guildford)

  Renton, Tim (Mid-Sussex)

  Boyson, Dr Rhodes (Brent)

  Hunt, John

  Ridley, Hon Nicholas

  Brittan, Leon

  Irvine, Bryant Godman (Rye)

  Ridsdale, Julian

  Brotherton, Michael

  James, David

  Rippon, Rt Hon Geoffrey

  Brown, Sir Edward (Bath)

  Johnson Smith, G. (E Grinsiead

  Roberts, Michael (Cardiff NW)

  Bryan, Sir Paul

  Jones, Arthur (Daventry)

  Roberts, Wyn (Conway)

  Budgen, Nick

  Kellett-Bowman, Mrs Elaine

  Rodgers, Sir John (Sevenoaks)

  Carlisle, Mark

  Kershaw, Anthony

  Rossi, Hugh (Hornsey)

  Carr, Rt Hon Robert

  Knight, Mrs Jill

  Sainsbury, Tim

  Chalker, Mrs Lynda

  Knox, David

  Shaw, Giles (Pudsey)

  Clark, Alan (Plymouth, Sutton)

  Lamont, Norman

  Shelton, William (Streatham)

  Clark, William (Croydon S)

  Lawrence, Ivan

  Shersby, Michael

  Clarke, Kenneth (Rushcliffe)

  Lawson, Nigel

  Silvester, Fred

  Clegg, Walter

  Lewis, Kenneth (Rutland)

  Sims, Roger

  Cockcrofl, John

  Lloyd, Ian

  Spicer, Jim (W Dorset)

  Cooke, Robert (Bristol W)

  Loveridge, John

  Spicer, Michael (S Worcester)

  Cope, John

  McAdden, Sir Stephen

  Sproat, Iain

  Cormack, Patrick

  Macfarlane, Neil

  Stainton, Keith

  Corrie, John

  MacGregor, John

  Stanbrook, Ivor

  Costain, A. P.

  McNair-Wilson, M. (Newbury)

  Stanley, John

  Dodsworth, Geoffrey

  McNair-Wilson, P. (New Forest)

  Steen, Anthony (Wavertree)

  Douglas-Hamilton, Lord James

  Madel, David

  Stewart, Ian (Hitchin)

  Drayson, Burnaby

  Mates, Michael

  Stokes, John

  Durant, Tony

  Mather, Carol

  Stradling Thomas, J.

  Eden, Rt Hon Sir John

  Maude, Angus

  Taylor, R. (Croydon NW)

  Edwards, Nicholas (Pembroke)

  Mayhew, Patrick

  Tebbit, Norman

  Elliott, Sir William

  Meyer, Sir Anthony

  Temple-Morris, Peter

  Emery, Peter

  Miller, Hal (Bromsgrove)

  Thomas, Rt Hon P. (Hendon S)

  Eyre, Reginald

  Miscampbell, Norman

  Townsend, Cyril D.

  Fairbairn, Nicholas

  Mitchell, David (Basingstoke)

  Trotter, Neville

  Fairgrieve, Russell

  Moate, Roger

  van Straubenzee, W. R.

  Farr, John

  Montgomery, Fergus

  Vaughan, Dr Gerard

  Finsberg, Geoffrey

  Moore, John (Croydon C)

  Viggers, Peter

  Fisher, Sir Nigel

  More, Jasper (Ludlow)

  Weatherill, Bernard

  Fookes, Miss Janet

  Morgan, Geraint

  Wells, John

  Fowler, Norman (Sutton C'f'd)

  Morgan-Giles, Rear-Admiral

  Whitelaw, Rt Hon William

  Fox, Marcus

  Morrison, Charles (Devizes)

  Wiggin, Jerry

  Galbraith, Hon. T. G. D.

  Morrison, Hon Peter (Chester)

  Winterton, Nicholas

  Gardiner, George (Reigate)

  Neave, Airey

  Gardner, Edward (S Fylde)

  Nelson, Anthony

  TELLERS FOR THE NOES

  Glyn, Dr Alan

  Neubert, Michael

  Mr. Adam Butler and

  Goodhew, Victor

  Newton, Tony

  Mr. Spencer Le Marchant

  Question accordingly agreed to.
  Bill read a Second time.
  Bill committed to a Standing Committee pursuant to Standing Order No. 40 (Committal of Bills).

  BUSINESS OF THE HOUSE
  Ordered,
  That the Motion relating to the Welsh Development Agency (No. 2) Bill [Lords] may be proceeded with at this day's Sitting, though opposed, until any hour.—[Mr. Harper.]

  WELSH DEVELOPMENT AGENCY (No. 2) BILL [Lords]
  Ordered,
  That, notwithstanding the proviso to Standing Order No. 62 (Nomination of Standing Committees), any Standing Committee appointed for the consideration of the Welsh Development Agency (No. 2) Bill [Lords] shall consist of Seventeen Members, including not less than Fourteen Members sitting for constituencies in Wales.—[Mr. Harper.]

  WELSH DEVELOPMENT AGENCY (No. 2) [MONEY]
  Queen's Recommendation having been signified—
  Motion made, and Question put,
  That, for the purpose of any Act of the present Session to establish a Welsh Development Agency and a Welsh Industrial Development Advisory Board, and for connected purposes, it is expedient to authorise—
  (1) subject to the prescribed limit—

  (a) the payment out of money provided by Parliament of the expenses of the Secretary of State in making payments to the Welsh Development Agency;

  (b) the payment out of the National Loans Fund of sums required for making loans to the Welsh Development Agency;

  (c) the payment out of the Consolidated Fund of sums required for fulfilling any guarantee given by the Treasury in respect of sums borrowed by that Agency;

  and in this paragraph of this Resolution 'the prescribed limit' means the limit of £150 million imposed by the said Act of the present Session on the aggregate amount outstanding otherwise than by way of interest in respect of—

  (i) the general external borrowing (as defined in the Act) of the Welsh Development Agency and their wholly owned subsidiaries;

  (ii) sums issued by the Treasury in fulfilment of guarantees in respect of sums borrowed by the Agency from a person other than the Secretary of State;

  (iii) sums paid to the Agency by the Secretary of State less repayments to the
  804
  Secretary of State by the Agency and less sums paid in respect of the administrative expenses of the Agency; and

  (iv) loans guaranteed by the Agency otherwise than in the exercise of powers conferred on the Secretary of State by section 7 of the Industry Act 1972 and exercisable by the Agency by virtue of the said Act of the present Session;

  (2) the payment out of money provided by Parliament of any expenses of the Secretary of State incurred by him in consequence of any provision of the said Act of the present Session enabling him to pay compensation in respect of the loss of office of any person who suffers such loss in consequence of the said Act;
  (3) the payment out of money provided by Parliament of any administrative expenses of the Secretary of State incurred by him in consequence of any provision of the said Act.
  And that it is expedient to authorise any payment into the Consolidated Fund or the National Loans Fund under the said Act of the present Session.—[Mr. Harper.]
  Mr. Speaker: I think the Ayes have it.
  Hon. Members: No.
  Sir Anthony Meyer: On a point of order, Mr. Speaker. It would be wrong for the Money Resolution——
  Mr. Speaker: Order. I said I think the Ayes have it.
  Hon. Members: No.
  Mr. Speaker: If there is any doubt about the matter, I have always ruled in favour of further discussion. Sir Anthony Meyer.
  10.15 p.m.
  Sir Anthony Meyer: I am obliged to you, Mr. Speaker. It would surely be wrong that a sum of money such as the one under discussion should be agreed to on the nod, without any debate. Here is a matter of £100 million which is to be expended in pursuance of objects which have not been all that clearly defined. We have had a very long debate during which a large number of hon. Members have spoken in the most general terms in favour of the Bill, and most of them have spoken as if, by some wave of a wand, every possible benefit would be conferred upon Wales. But we have heard very little mention of the very large sums of money which will be needed to bring these benefits. Those sums of

  805
  money have to be raised, and they will be raised very largely by impositions on the very firms which have to provide the employment which the Bill sets out to provide.
  We do not know enough about how the money is proposed to be expended. However, we know that the Money Resolution contains a provision whereby the £100 million may be increased to £150 million, and, as I said earlier, that increase may come a lot sooner than anyone at present supposes.
  Anyone who takes the trouble to refer to the back of the Bill will discover that it now costs 42p. When it was first printed less than two months ago, it was priced at 29p. As I said earlier, that represents a current rate of inflation of 270 per cent. based on the Healey formula. If we are to have inflation at that rate of advance, it will be only four months at the outside before the Government have to ask for the increase to £150 million provided for in the Money Resolution.
  We need a great deal more information, and I am sure that others of my hon. Friends will want to press the Government on this matter. Frankly, we do not know enough.
  10.20 p.m.
  Sir Raymond Gower: I second what my hon. Friend the Member for Flint, West (Sir A. Meyer) said. Our judgment of the value of the amount appropriated depends largely on the approximate timetable. I hope that the Government spokesman will tell us how the money will be spent and over what period, as that is a matter of uncertainty. We have been told that it may be spent over an indefinite period and that the sum may be increased from £100 million to £150 million. We have no idea of the timetable. The Government spokesman should indicate the approximate timetable.
  Considerable amounts are involved. I appreciate that the rate of inflation is increasing so rapidly that the £100 million will have lost its value so that £150 million will soon be required. That is the strange state of affairs with which we are faced. I hope that the Government will elucidate those points.
  10.22 p.m.
  Mr. Nigel Lawson: I think that the points which have been raised by my hon. Friends are of considerable importance. I am extremely surprised that when the Money Resolution was put to the House a few moments ago no Government spokesman sprang up from the Government benches to give us the Government's explanation of the points which are involved in it. That is a lighthearted way in which to treat the House during its consideration of the expenditure of £150 million. It was lighthearted of the Government to expect this measure to go through without any debate or explanation from the Government.
  I have been present for part of this debate, although most of the time I have been attending a Standing Committee which has been considering a financial matter. I shall not go into detail, but I have been here as much as I could. I was present when the Minister, in winding up, said that there was no time limit on expenditure and that it was impossible to predict exactly when the money would be expended, and so on. But that was not good enough.
  Last night there was a debate on the provision of £300 million for the Scottish Development Agency. When we pressed the Minister we were told that it was impossible to say exactly how much would be spent this year, but that the Chancellor of the Exchequer had taken account of all this and that it came within the contingency reserve which is mentioned in the Public Expenditure White Paper. I have looked that up. Admittedly, it is expressed in different terms. Nevertheless the sum for the contingency reserve for the current year is £300 million. That takes into account the resource costs of the Scottish Development Agency, the Welsh Development Agency, the child endowment scheme, the National Enterprise Board, and many other schemes. We should therefore like to know roughly how much is contained in the contingency reserve for this year of the £150 million mentioned in the Money Resolution which we are discussing.
  I should like to go into more detailed points concerning the Money Resolution. Paragraph (1)(iii) mentions
  "sums paid to the Agency by the Secretary of State less repayments to the Secretary of State by the Agency and less sums paid in respect of the administrative expenses of the Agency."

  807
  There is no mention of payments made by the agency in consideration of receiving public dividend capital. Public dividend capital is involved here. Yet it was excepted in the equivalent resolution in respect of the Scottish agency. Why, then, has it not been excepted in the case of the Welsh agency? I refer to the point in the Scottish Money Resolution concerning repayments made by the agency in consideration of receiving public dividend capital.
  Again, according to Schedule 3 of the Bill, the Welsh Development Agency is able to borrow money in certain circumstances—not by means of temporary loans—from the Commission of the European Communities or the European Investment Bank. The Minister said something in passing about the relationship with the Community institutions. Nevertheless, nothing of that kind was included in the Money Resolution involving the Scottish Development Agency. Why the difference? We should like to know more about borrowing intentions from the Commission of the European Communities and the European Investment Bank.
  But, above all, this is a vast sum of money. How much of the £150 million is expected to get a commercial rate of return? How much is for social purposes and is not expected to get a commercial rate of return? Of the amount that is expected to get a commercial rate of return, what is the target rate of return which the Treasury set for the Welsh Development Agency?
  The pound today is at an all-time low, and has been falling steadily. At a time when uncertainty is the worst thing for confidence in the pound, and when public expenditure is at the heart of our economic crisis, we need to know precisely how much public expenditure is involved this year and how much is involved in subsequent years.
  I hope that the Minister will address himself to these few questions. There are many more I could ask but I am sure that my hon. Friends will wish to pursue the matter.
  10.26 p.m.
  Mr. John Nott (St. Ives): I am sure the whole House is grateful to my hon. Friends the Members for Flint, West (Sir
  808
  A. Meyer), Barry (Sir R. Gower) and Blaby (Mr. Lawson) for raising these important matters on the Money Resolution. We do not apologise for raising this matter at this late hour because the House is increasingly failing to pay proper attention to its traditional Supply rôle. I apologise for not being here throughout the debate, but I have been in Standing Committee. However, I heard the Secretary of State's speech and the winding-up speeches on the Bill.
  Not enough has been said about the expenditure proposed. Either the £150 million will be spent—in which case we are right to ask for more information about how it will be spent and how quickly—or it will not be spent. It may be that a small proportion only will be spent because the Chancellor of the Exchequer cuts back expenditure within the new few weeks or because the Treasury withholds its consent for particular schemes, which is much more likely. In that case the £150 million mentioned would be a deception on the people of Wales. If the Chancellor cuts back on expenditure or if no schemes materialise, the Bill will prove to be a public relations exercise and not an exercise of substance.
  In winding up the Second Reading debate the Minister spoke in brave language about the Bill being a landmark in the history of Wales. He said that the Bill paid a debt to generations past. The Money Resolution is part and parcel of the Bill. Only time will tell whether the money covered by the Money Resolution is forthcoming.
  Last night when the Minister of State wound up the debate on the Second Reading of the Scottish Development Association (No. 2) Bill he said that the amount which may be spent in the current year would depend on when we could establish the agency and how successful it was in its early stages in identifying useful ways of spending the money which is available to it. That is a strange way of going about the matter in the economic conditions which we face.
  My hon. Friend the Member for Blaby referred to the contingency reserve. We all know that the contingency allowance in successive White Papers has proved to be inadequate. We understand from Press reports of what was said in the Expenditure Committee proceedings

  809
  recently that within a few weeks after the publication of the figure for the contingency reserve it was shown that the British Leyland project alone had taken up far more than was expected a few weeks before. It is not good enough to say that the contingency reserve will meet the additional payments under the Money Resolution.
  As far as I understand from what the Secretary of State said, about £60 million a year is being spent on selective assistance, regional development grants and the regional employment premium, and about £8 million or £9 million has been included in this year's Financial Statement as expenditure by the agency. That £8 million or £9 million applies only to part of the year, because the agency will not be established for the whole of the financial year.
  It is reasonable for my hon. Friend the Member for Flint, West and others to ask more about how the £100 million is to be broken down over time before an order comes forward proposing the additional £50 million. We can understand that the pace at which opportunities will arise cannot be precisely determined. But we have had the Chancellor of the Exchequer making speeches at the Dispatch Box and making innumerable speeches in the country in the last few months in which he said that it was essential to establish limits on the amount that was being paid out of the public exchequer. Yet, within a few days, we have had two measures, one for £300 million and the other for £150 million, which, in terms of time, are completely open ended. At one moment we have the Chancellor saying that we have to establish limits on public expenditure and a few days later we have amounts totalling £450 million coming before the House without any time limit being placed on them. This is going on the whole time.
  All the Treasury spokesmen on this side of the House, with names like Howe and Howell, derive from the Principality. My name does not sound Welsh, but my family, too, comes from the Principality. Therefore, we fully understand the needs of Wales. None of us feels that it is the job of Treasury spokesmen or Treasury Ministers to interfere in the specific details of expenditure in the Principality. However, we suggest that what is proposed in this Money Resolution and what was
  810
  proposed in the one last night cannot be in conformity with what the Chancellor has said in the past few days.
  I shall not delay the House much longer, but I must give two examples of the kind of thing that is happening day by day. I hope that the Secretary of State, or whoever is to answer the questions which have been asked, will pay attention to these short, specific examples which I want to mention.
  The Secretary of State will know and be proud of the Royal Mint building in Llantrisant. I have seen it and been round it several times. It was only a very few years ago that the Royal Mint at Llantrisant was completed at a cost of £6·24 million. Yet only a few months ago—in fact, in April—the Royal Mint was turned into a trading fund. When the trading fund measure came before the House, that same building, which had cost £6·24 million to erect, was included in the opening accounts of the Royal Mint Trading Fund at £2·4 million. Therefore, in only a very few years, approximately £3·8 million has been written off and nobody has said a word about it. It has all disappeared and been paid for by the taxpayer.
  I should like to know whether the Welsh Development Agency would have financed the building of the Royal Mint at Llantrisant or whether the money would have been forthcoming from other funds. In a way, the Royal Mint was a development project. It was built at Llantrisant to provide employment in the Principality. How is it possible that in only a few years the taxpayer has had to meet a loss of £3·8 million?
  I take my second and final example——
  The Secretary of State for Wales (Mr. John Morris): It is frivolous.
  Mr. Nott: The Secretary of State says that this is a frivolous example. That is a perfect case of the total lack of interest and understanding on the part of Socialist spending Ministers in the financial state of this country. The Secretary of State, from a sitting position, said that it was a triviality that £3·8 million had been written off a project in only a few years. That is the kind of attitude that the people of Wales will not understand.
  Mr. John Morris: The hon. Gentleman has been a Treasury Minister and he should make his representations to the House on relevant grounds. He should not raise matters that have no connection with the Bill and deal with an example that has little relevance in this context. He should know better.
  Mr. Nott: I can understand that the Secretary of State is embarrassed about the example that I have put before the House, and I shall not follow him down that road. I have made my point. Why has that amount of money been written off in only a few years?
  I come to my final example. I hope that the Under-Secretary of State will answer this point. We notice that it will cost £2½ milion to run the agency when it is fully established and that 150 million extra people will be required—
  Mr. John Morris: No, 150.
  Mr. Nott: Even given the rate at which people are being taken on in the public sector, I agre that the million was a minor exaggeration. I want to say that we know that 150 additional staff will be taken on to run the agency. Why are they needed over and above the stall now involved in dealing with selective assistance? I understand that a total of 300 posts is involved at the present time.
  We have not delayed the House for very long, given the amount that is involved. I hope that this short debate has taken place in a good spirit. I speak as one Celtic representative to another. I shall not go into what I think about the discrepancy between what Wales receives and what my own part of the country receives. The disparity is really quite disgraceful, but I leave the matter there. Perhaps the Under-Secretary of State will answer the points that have been raised by my hon. Friend and myself.
  10.37 p.m.
  The Under-Secretary of State for Wales (Mr. Barry Jones): Welsh Office Ministers are always glad to come to the Dispatch Box at this time of night. I fully take the point of the hon. Member for St. Ives (Mr. Nott), that he is as good a Celt as I am. I understand that he is trying to establish his credentials as a former Treasury Minister in order to make his point about the agency.
  812
  I appreciate the point raised by the hon. Members for Flint, West (Sir A. Meyer), Barry (Sir R. Gower) and Blaby (Mr. Lawson), the hon. Member for Blaby not having been present for the previous debate. I am thoroughly aware that the Bill will be considered in Committee and that various matters can be explored in detail.
  The hon. Member for Blaby referred to public dividend capital. I believe that that subject was first mooted by my right hon. Friend the Secretary of State for Defence when he had a position in a previous administration. A similar point was raised last night when the Scottish agency was being discussed.
  Mr. Lawson: Is the public dividend capital to be in addition to the £150 million borrowing or is it to be counted within that sum?
  Mr. Jones: I am grateful for that helpful intervention. The hon. Member for Blaby can be assured that the Welsh will do as the Scots do. We shall consider an amendment parallel with action taken by the Scots to cover the point of public dividend capital. I thank the hon. Gentleman for raising the point, which at a later stage we can consider thoroughly.
  I wish to deal with the point raised by the hon. Member for Barry and the hon. Member for Flint, West. It is hard to predict how the Welsh Development Agency will need to draw on financial resources. This will depend on factors such as the need of Welsh industry for investment finance and the availability of land and labour to carry out environmental projects, as well as the speed with which the agency can devise plans and implement schemes. The inflation of building costs will be a factor. Although the Government had in mind an initial five-year programme of work for the agency, its funds are not limited to any period, and after the initial tranche of £100 million a further £50 million will be available on the order of the Secretary of State, subject to the approval of the House.
  Mr. Lawson: Before the Minister concludes, could he answer the point about borrowing from the European Investment Bank and other European institutions?
  Mr. Jones: The hon. Member has raised a number of points about borrowing powers. After further consideration, I can inform him that the public dividend capital will be within £150 million.
  Question put and agreed to.
  Resolved,
  That, for the purpose of any Act of the present Session to establish a Welsh Development Agency and a Welsh Industrial Development Advisory Board, and for connected purposes, it is expedient to authorise—
  (1) Subject to the prescribed limit—

  (a) the payment out of money provided by Parliament of the expenses of the Secretary of State in making payments to the Welsh Development Agency;

  (b) the payment out of the National Loans Fund of sums required for making loans to the Welsh Development Agency;

  (c) the payment out of the Consolidated Fund of sums required for fulfilling any guarantee given by the Treasury in respect of sums borrowed by that Agency;

  and in this paragraph of this Resolution 'the prescribed limit' means the limit of £150 million imposed by the said Act of the present Session on the aggregate amount outstanding otherwise than by way of interest in respect of—

  (i) the general external borrowing (as defined in the Act) of the Welsh Development Agency and their wholly owned subsidiaries;

  (ii) sums issued by the Treasury in fulfilment of guarantees in respect of sums borrowed by the Agency from a person other than the Secretary of State;

  (iii) sums paid to the Agency by the Secretary of State less repayments to the Secretary of State by the Agency and less sums paid in respect of the administrative expenses of the Agency; and

  (iv) loans guaranteed by the Agency otherwise than in the exercise of powers conferred on the Secretary of State by section 7 of the Industry Act 1972 and exercisable by the Agency by virtue of the said Act of the present Session;

  (2) the payment out of money provided by Parliament of any expenses of the Secretary of State incurred by him in consequence of any provision of the said Act of the present Session enabling him to pay compensation in respect of the loss of office of any person who suffers such loss in consequence of the said Act;
  (3) the payment out of money provided by Parliament of any administrative expenses of the Secretary of State incurred by him in consequence of any provision of the said Act.
  And that it is expedient to authorise any payment into the Consolidated Fund or the National Loans Fund under the said Act of the present Session.

  NORTHERN IRELAND (EMERGENCY POWERS)
  10.45 p.m.
  The Secretary of State for Northern Ireland (Mr. Merlyn Rees): I beg to move,
  That the Northern Ireland (Various Emergency Provisions) (Continuance) Order 1975, a draft of which was laid before this House on 9th June, be approved.
  The Order has been laid to renew the provisions of the Northern Ireland (Emergency Provisions) Act 1973 and the Northern Ireland (Young Persons) Act 1974, which are due to expire at midnight on 24th July.
  Mr. Russell Kerr: On a point of order, Mr. Deputy Speaker. Many of us regard this as a very important debate. Will you ask our colleagues to leave the Chamber quietly?
  Mr. Deputy Speaker (Mr. Oscar Murton): Will hon. Members who do not intend to listen to the Secretary of State kindly leave the Chamber as expeditiously as possible.
  Mr. Rees: The order will renew the provisions for six months until 25th January 1976. The House will know, however, that there is a Bill which has been given a First Reading, to amend the Emergency Provisions Act.
  When I last sought renewal of these powers, on 5th December, I said that I would do everything possible to introduce new legislation between then and now. It has not been possible for new legislation to be passed, but it is now before the House and we are to debate it tomorrow.
  The point of the order is to allow for the fact that the Bill is unlikely to pass through both Houses before 24th July. However, the amendments to the Act proposed in the Bill will have an effect on commencement, and I hope this will be long before the expiry of the six months. Much will depend on the Committee stage. The order, like the Act, is of great importance to the security forces in Northern Ireland.
  In seeking approval of the order, I am seeking to cover the transitional period of the passage of the Bill. The new temporary provisions of the Bill, which

  815
  cover everything except Section 1 of the Act, will also expire on 24th January 1976, so that all the temporary provisions, whether amended or otherwise, will need to be continued by order from that date if Parliament considers them still to be necessary.
  The Second Reading of the Bill is to take place tomorrow, and it would not be appropriate for me to describe its provisions in this short debate, but, clearly, the order needs to be considered in that context. In Opposition we had doubts about a number of the provisions of the emergency provisions Act, although we clearly recognised the need for extraordinary powers to deal with the security situation in Northern Ireland. As I said in Opposition on the Second Reading of the Northern Ireland (Emergency Provisions) Bill:
  "The Government of the United Kingdom, like the Government of Northern Ireland, have a duty to deal with those who shoot and kill, and we are certainly not arguing the contrary. The Government have the right to take extraordinary measures given the situation in Northern Ireland".—[Official Report, 17th April 1973: Vol. 855, c. 292.]
  On assuming office, I appointed a committee under the chairmanship of Lord Gardiner to examine the working of the Act and to consider what provisions and powers were necessary, consistent to the maximum extent with the preservation of civil liberties and human rights, to deal with terrorism and subversion. The Bill which the House is to debate tomorrow is based upon the recommendations of its report.
  There are, however, a number of provisions in the emergency provisions Act which the committee considered should remain unchanged, and it is only right, therefore, that I should mention these now as the Bill does not apply to them. It is also right that I should justify the continuing need for emergency provisions at all.
  As I explained in answer to the Private Notice Question by the right hon. Member for Down, South (Mr. Powell) on 16th June, the nature of violence in Northern Ireland has changed in the past six months. The Provisional IRA ceasefire has generally held well, and the incident centres have helped to prevent misunderstandings. This undoubted achievement should be recognised by all.
  816
  There has been a significant reduction in incidents against the security forces and an overall reduction in terrorist incidents. This has exposed, or perhaps brought to the surface, much interfactional violence and violence between the communities in Northern Ireland, violence which has involved deliberate cold-blooded murder of particular persons. Already this year 100 civilians have been killed by violence for which in many cases there was no apparent motivation, however tortuous or misguided.
  It is clear that this new age of violence has not arisen out of political aspirations; it is an outbreak of gangsterism fostered no doubt by the atmosphere of disrespect for the law—and for people's lives—in recent years. There are some in Northern Ireland who give encouragement to these thugs with talk of Armageddon between the communities. Such speculation is used by gangsters to give credibility to their motives and plays into their hands.
  In a community which lives with the threat and the fact of violence, a heavy burden rests upon leaders of public opinion. In the past, much of the condemnation of murders and other outrages has itself tended to reflect the division in the community. It is a welcome and realistic development that on all sides in Northern Ireland today there is a denunciation of violence, from whatever source. I have not always noticed that.
  It takes political and physical courage of a high order for people in Northern Ireland to condemn those criminals who claim to act, however spuriously, in the name of the cause for which those people stand. In recent days that courage has been shown, not least by some politicians who have unequivocally condemned the violence practiced by those who claim to support them.
  The key to dealing with gangsterism is effective policing. I am glad to report again that the RUC is achieving very considerable success and has taken steps to respond to this new situation. This morning the Chief Constable announced further measures to combat the vicious campaign of assassinations, sectarian and otherwise. The RUC's preventive and detective capabilities are being reinforced by the creation of a special centralised CID unit, to be known as the A Squad.

  817
  This squad would be a strong, mobile, co-ordinated detective squad backed up by the full resources of the special patrol group, able to respond quickly and effectively to situations anywhere in Northern Ireland in support of the work of the local police. This new development has been made possible by an overall expansion of the detective branch of the RUC.
  Already this year over 568 persons have been charged with terrorist type offences, and 171 travelling gunmen have been intercepted. One wonders where they were on their way to and how many people would be dead if they had not been intercepted. These figures do not reach the headlines as do figures for the number of persons for whom interim custody orders are signed. If I were to sign one interim custody order there would be headlines. The fact that 568 people pass through the courts seems to be unnoticed, yet that is the most important development in the last few months, and it is a trend which has been growing over the months. The figures demonstrate clearly the success of the RUC in dealing with crime.
  There are other encouraging signs in Northern Ireland at present. The monthly average of shooting incidents this year compared with the monthly average for 1974 has fallen from 267 to 137, explosions have fallen from 57 to 26, and killings only from 18 to 17. The Provisional IRA has maintained its cease-fire in general for over six months, and there are signs of the two communities recoiling in horror at continued atrocities. At the same time, however, the monthly average of civilian deaths has risen from 14 to 16, and the indiscriminate violence of the past two weekends has demonstrated that terrorism continues in all its savagery. While terrorism continues, so must the powers necessary to deal with it.
  Such acts cannot be tolerated in our society, and the Government and Parliament are responsible for security in Northern Ireland. The police, backed by the Army, cannot achieve results, and the courts cannot convict those who are guilty, if special provisions in the law are not in force. Moreover, and I wish to place special emphasis on this point, we should be failing in our duty to the police officers and soldiers if we did not give them appropriate powers to act against terrorists and to protect themselves.
  818
  I am not proposing any changes in the powers of the security forces in the emergency provisions Act except clarification of their powers to stop and question persons and a new power to search for and seize radio transmitters. The Gardiner Committee considered very carefully the existing powers, and suggestions that they should be curtailed, and came to the conclusion that it would be impracticable to impose further conditions and, in the light of the evidence it received, unnecessary.
  We are also proposing to retain the procedure for a single judge without a jury to try scheduled offences on indictment. We entertained considerable doubts about this when in Opposition and proposed that three persons should conduct the trial. The Gardiner Committee reported that it was given details of 482 instances in which civilian witnesses to murder and other terrorists offences were too afraid to make any statement or to give evidence in court. The committee concluded that juries would be equally open to intimidation We were wrong in Opposition. The committee also reported wide agreement among those who gave evidence before it that the system has worked fairly and well. My right hon. and learned Friend the Attorney-General is also satisfied of the fairness of the present procedure, and accordingly we have accepted the Gardiner Committee's recommendation that no change should be made.
  The Gardiner Committee also recommended that the powers of proscription in Section 19 of the 1973 Act should be retained. I agree with the Gardiner Committee that such powers should be retained on a temporary basis for the reasons it gave; namely, that it deters people from providing financial or other support for what are clearly terrorist organisations, and that it would be anomalous to legalise organisations which are proscribed throughout both the Republic of Ireland and the remainder of the United Kingdom. I keep constantly under review, however, the list of pros-scribed organisations. Many considerations have to be taken into account in this continuing review. For example, there is the question of proscribing organisations claiming responsibility for sectarian violence.

  819
  We have to be careful here not to jump to immediate conclusions. Prosscription is a remedy against the identifiable group with an organisational structure and a continuing existence. It is not an effective remedy against casual groups, which are prepared to change their names when the going gets rough, to dissolve themselves to suit their convenience and possibly to coalesce, often with different members and in a new guise at a later stage. In these circumstances proscription could be an empty gesture, since legal proof of membership of an organisation that scarcely exists is, naturally, difficult to obtain. The best way to proceed against men of violence who profess to belong to groups such as these is through the ordinary courts. However, I keep this matter under continuous review and will use the power of proscription when it can be effectively deployed.
  Although this order continues the provisions for detention, completely new provisions are included in the Bill, and hence I propose to deal with this subject in some detail tomorrow. It would be appropriate for me to say now that, however much I dislike the principle of detention without trial, I am in no doubt that such powers are necessary in Northern Ireland at present. I am not exercising the existing powers at present. Indeed, I have not signed any interim custody orders since 9th February. If the situation requires me to return to "ICO-ing", I shall, of course, inform right hon. and hon. Members immediately, if the House is sitting.
  Since the Provisional IRA announced its cease-fire on 22 December, I have personally released 276 persons from detention. If, however, the security situation were to deteriorate rapidly tomorrow, next week or next month, I should need a power of detention, and in the current situation I should not hesitate to use it if that were the only way of removing vicious killers from the streets. But it is only as a last resort that I have used the powers of detention, and that continues to be my policy and that of the Government.
  I do not want to return to the use of "ICO-ing" I want to go through the courts, but if there were a military cam-
  820
  paign with the middle of Belfast burning in the way we have known in the past, we should not be able to stand back.
  I now turn to the Northern Ireland (Young Persons) Act. This order also extends the provisions of that Act for six months to 25th January 1976. The Act was introduced to deal with the problem of young terrorists on remand who escaped from remand homes. It provides power for the Secretary of State to make a direction that a young person charged with a scheduled offence be held in custody in prison rather than a remand home.
  Although the provision is concerned only with a very small group of persons, it is necessary in order to protect the public from further acts by young terrorists, to protect the staff of remand homes from rescue attempts and to protect the young person himself. I gave an assurance that I would use these powers sparingly.
  Since the Act came into force on 1st August 1974, I have given directions only in respect of 15 young persons, although at present no directions are in force. Absconsions from remand homes have continued, but the provision is not intended to prevent that. I have used the power only for the reasons I have just given, and none of those committed to secure custody has escaped. This provision is still necessary, regrettably, and accordingly I am seeking its continuance.
  I am aware of the feeling that young persons should not be kept on remand in custody for longer than is absolutely essential. As the House will understand the duration of remand is not within my control, but the matter has been discussed with the Attorney-General and the Director of Public Prosecutions for Northern Ireland. Every effort is being made to restrict the period of remand, and in only one case has it exceeded six months, and then only by a few days.
  The powers in the emergency provisions Act are at present essential. They are essential not only because I may need them in order to apply interim custody orders but because they provide the legal basis for the security forces to act against terrorists. There must be a power for police officers and soldiers to arrest terrorists, to stop and question persons, and to search for arms and explosives. The powers are also essential if the

  821
  courts are to maintain the rule of law, and the powers are essential if the Government and Parliament are to fulfil their responsibilities to the ordinary law-abiding citizen in Northern Ireland.
  I am asking tonight for the renewal of the emergency provisions Act. I am conscious that the security situation in Northern Ireland is changing. Nevertheless, what I argued in my White Paper of July 1974 on the Northern Ireland Constitution, that
  "the Army cannot, however, replace the police, nor would it be a substitute"
  is still relevant in the new unfolding situation.
  The Government wish to see a return to effective policing in Northern Ireland, but, new situation or not, I have to be prepared for all eventualities.
  11.3 p.m.
  Mr. John Biggs-Davison: We understand why the debates tonight and tomorrow are to take the course decided upon. Indeed, the Secretary of State alluded to the reasons tonight, and logic does not always attend Irish legislation. It might, however, have been more logical for the House to have had a debate long since on the Gardiner Report, which, after some hesitation and delay, the Secretary of State presented to Parliament last January, before proceeding to the anti-terrorist measures.
  It would have been more logical to have amended the emergency provisions before extending them. However, the amending Bill will be taken tomorrow, and we are grateful that so important a Northern Ireland measure will be debated in the light of day. In the meantime, the Irish night shift must address itself to this order.
  It would be criminally irresponsible for the House to deny or delay the powers which the Secretary of State seeks, but I and, no doubt, other hon. Members would like to ask some questions.
  I would first refer to special category status. Lord Gardiner's committee declared this status to be an error, and that is admitted on all sides, but, of course, there are difficulties. If retrospection is ruled out, one can understand that. However, many of us thought at the time, and said at the time, that the Price sisters should not have been moved out of England to enjoy special category
  822
  status. Visitors to Armagh Gaol learn of the resentment that this excites in what I am tempted to call decent criminals there immured. The difficulty of the Secretary of State is the absence of cellular prison quarters to replace the academy of revolutionary studies at the Maze.
  The Gardiner Report was scathing on the inadequacy of cellular accommodation. Hon. Members will have read paragraph 113 of the report, which states:
  "The present situation of Northern Ireland's prisons is so serious that the provision of adequate prison accommodation demands that priority be given to it by the Government in terms of money, materials and skilled labour such as has been accorded to no public project since the Second World War."
  To date not one brick has been laid. The land has not even been acquired. Surely in a war-like situation some of the niceties of planning procedure could be abbreviated. After all, the Gardiner Report said this at the end of paragraph 113:
  "If no Government sites are available, emergency legislation should be passed to give the Secretary of State general powers to acquire suitable sites at once without the delays consequent on normal compulsory purchase and planning procedure."—[Interruption.]
  I am only reading to the House the words of the Gardiner Report. I should like to make my speech, if the right hon. Gentleman the Minister of State will allow me.
  It is my hope that these debates will demonstrate that there is no weakening of the democratic will to win. Conservative Members welcome the Secretary of State's robust, affirmative reply to the supplementary question put by my hon. Friend the Member for Abingdon (Mr. Neave) to the Private Notice Question by the right hon. Member for Down, South (Mr. Powell) on 16th June. The Secretary of State left the House in no doubt that Her Majesty's forces would continue in support of the civil power until normal policing by the Royal Ulster Constabulary is possible throughout the Province. We are grateful to the Secretary of State for that assurance.
  The courage, the skill and the patient endurance of the Regular Army, the Ulster Defence Regiment, the Royal Ulster Constabulary—we heard—with interest and we welcome what was said about the new A Squad—must not

  823
  be thrown away. That would make a mockery of the tributes we pay them in this House, which we renew this evening.
  From time to time apprehension has been expressed lest the cease-fire has meant that less intelligence has been gathered and the guard to some extent lowered. During the present year searches for arms and explosives seem to have been mostly of unoccupied houses. Perhaps the Minister will comment on that, when he replies.
  In April I understand that 140 lbs. of explosives were discovered and in May 21 lbs., whereas last year the general monthly rate of finds was in four figures. I trust that the explanation is that diplomacy and security have stopped supplies to the terrorists and those gangsters whom it is about time both official statements and the media desisted from describing as either Protestants or Catholics.
  The Queen's peace must be restored, otherwise what use is it to discuss a Bill of Rights or United Kingdom standards?
  The Minister for Posts and Telegraphs in Dublin, Dr. Conor Cruise O'Brien has warned of what he called "fake liberals" who:
  "protest against all repressive legislation."
  However, he said that:
  "The laws against crime are necessarily repressive, and armed conspiracy is the most dangerous of crimes."
  The order is justified, and we support it.
  11.10 p.m.
  Mr. J. Enoch Powell: The Secretary of State has had his task made rather more difficult for him this evening by the order in which he has been obliged to take matters. He has been asking for the renewal of powers unaltered when the whole House knows that it is his intention to ask for very substantial alterations in them. He has, therefore, had necessarily to present one of two halves of the same picture.
  Nevertheless, there is no doubt that, amended or unamended, the powers which the House, I am sure, will renew this evening arise out of the actual situation in Northern Ireland. It would be absurd for this debate not to concern itself, as indeed, the speech of the Secretary of State concerned itself, with that situation.
  824
  The Secretary of State was indeed right when in a letter to my hon. Friend the Member for Antrim, South (Mr. Molyneaux) he referred to these debates of tonight and tomorrow as giving an opportunity
  "for the subject of the cease-fire and the security situation in general to be fully ventilated on the Floor of the House."
  I am sure that the Secretary of State will be among the first to admit that he has received steady, though not uncritical, support during his months of office from right hon. and hon. Members on this bench. We have understood, too, what has been his aim and his strategy in the gradual unwinding of detention. We listened with great interest tonight to the very carefully weighed words with which, within the framework of that policy, to which we give general support, he nevertheless retained the freedom of action which in present circumstances he undoubtedly needs to possess. We noticed in particular that, should there be a reversal in this respect, the Secretary of State would consider himself in duty bound as far as possible to come back to the House.
  The Secretary of State has had the satisfaction during his 15 or 16 months in office of witnessing a gradual diminution in the statistical level of violence in Northern Ireland. One always has a certain hesitation in referring to these statistical changes when one knows that even greatly reduced figures cover such a world of tragedy and of crime. Nevertheless, it would be unrealistic not to take note both of the diminution in volume and of the change in character, a change in character which the Secretary of State himself denoted in a rather striking phrase—perhaps a slightly too striking phrase—when he called it "a new age of violence." But it is one of the characteristics of violence in Northern Ireland that it is Protean in its character and is constantly changing in its forms and emphases. That, all the same, ought not to prevent us from recognising the fact of the substantial and continuing general diminution.
  What has differentiated the last six months from the periods which have preceding them is undoubtedly that event which we unhappily describe by the name of "cease-fire". I say "unhappily" for it is not an appropriate expression to

  825
  apply to a reduction in the number of criminal and violent acts. It is a term which is borrowed from an entirely different category of open and honourable warfare, and is already, when applied to the situation in Northern Ireland, a propaganda exercise which, even as we use the word, we ourselves tend to sustain.
  There is in the security situation in these last six months one important element which is missing, an element which this House and the Secretary of State can contribute to supplying. It is the hope of hon. Members on this bench that the debates of tonight and tomorrow will help towards that end.
  In the debate on the Spring Adjournment I pointed out that there was only one way in which it was possible, as things are now in Northern Ireland, for the full confidence of the public in government to be restored, and that was by open and candid debate upon the Floor of the House and by utterly frank dispelling of misunderstandings and resolution of problems. The Secretary of State knows very well—it is one of his difficulties—the atmosphere of rumour, suspicion, sometimes almost hysteria, which seems to sweep the scene in Northern Ireland and which constantly threatens the movement towards rationality and the restoration of normal conditions. This characteristic has entered upon a special phase in the past six months, since the beginning of the cease-fire, because nothing has yet dispelled the rooted belief that behind the so-called cease-fire there lies an agreement between Her Majesty's Government and the enemies of the State, of which the full details and some of the important conditions have not been disclosed.
  I am sure that there is no doubt about the main outlines of the policy which the Government have been pursuing. It has been the entirely rational policy of matching a real situation by a modification in the actions of the security forces. This is something which is entirely rational—indeed, to which there is no alternative—and the consequences of a diminution in violence can only be reaped gradually by the fact that the reactions to violence and the measures of the security forces can in proportion diminish and be relaxed.
  826
  But against that background of an entirely rational policy there has persisted and been maintained the belief throughout the Province that there is something else, and that, in fact, like some of his predecessors, the right hon. Gentleman and Her Majesty's Government have entered into agreements, undisclosed, with the Provisional IRA and perhaps with other enemies of the State. It is in the interests of good government in Northern Ireland that tonight I want to take the opportunity to put to the Secretary of State in specific form some of the allegations which have sprung from that belief, because it is only if, on the Floor of this House, the Secretary of State can explode and deny them that we shall have the opportunity to begin to reduce the atmosphere of suspicion, which is only too easily understood amongst a population which has so repeatedly been disappointed and betrayed.
  So I proceed to put specifically certain statements to the right hon. Gentleman, statements which have been before the eyes of hundreds of thousands of ordinary people in Northern Ireland, and which they have understandably found it impossible not to take at face value. I know that he will realise the importance of dealing with them in the only way in which they can be dealt with—openly and frankly across the Floor of this House.
  I begin with the killing of the policeman in Londonderry in the second weekend of May. The statement was made following that by the Provisional IRA that that murder—these are its words—was
  "'a direct result of breaches in the truce over the past two weeks when two houses were raided by the Army and one by a squad of plain clothes RUC men.'"—[Official Report, 13th May, 1975; Vol. 892, c. 261.]
  There is no doubt what those words are intended to mean. Those words are forms of violence, on their part the Government have committed themselves to the Provisional IRA that so long as the Provisional IRA abstains from certain forms of violence on their part the Government will abstain from raiding houses by the Army or carrying out searches by RUC men in plain clothes.
  Both those activities are activities which are necessary for security, necessary for the detection of crime and for the

  827
  prevention of further violence. So the public in Northern Ireland found itself confronted with a statement—admittedly a statement from enemy quarters—which appeared to carry upon the face of it the assertion that there was an undisclosed bargain not to enforce the law upon condition of certain forms of behaviour by the Provisional IRA.
  I turn now to a news item which appeared on 20th June 1975 in The Times. The Times of that date quoted a statement issued by the so-called Belfast brigade of the Provisional IRA after the publication of certain photographs, and it said that
  "According to Republican sources, tile photographs … are being regarded by the brigade staff as evidence that the Army's plain clothes intelligence patrols are continuing."
  The report quotes further from the statement that
  "'If Mr. Rees's travelling gunmen continue their undercover activity, the responsibility for a new situation is his.'"
  Once again the implication is perfectly clear. The IRA is stating—no doubt falsely but if it is false it ought to be said to be false on the Floor of this House—that as a quid pro quo the Government have committed themselves that perfectly lawful and perfectly proper missions on the part of the Armed Forces will be suspended and will not be carried out.
  I turn to a report in The Times the very next day, 21st June, referring to the debate which was to have taken place yesterday—but is more properly taking place here tonight—in that Convention which the Secretary of State earlier today described very correctly as "not a parliament". The report stated that
  "The controversial secret talks between senior British civil servants and leaders of Sinn Fein, which have played a crucial rôle in maintaining the cease-fire with the Provisional IRA, are to be debated for the first time next week."
  Well, they are being debated now, for I am asking the Secretary of State to say "yea" or "nay" to the allegation—it is a perfectly common allegation which appears in that item dated from Belfast—that
  "… secret talks between senior British civil servants and leaders of Sinn Fein…have played a crucial role in maintaining the cease-fire with the Provisional IRA …"
  828
  In other words, the Provisional IRA has in part desisted from continuing its crimes because of what has been said to its representatives by servants of Her Majesty's Government.
  The last quotation which I offer, still from the same series and on 23rd June, is on the same point. It refers to
  "… the spirit of the cease-fire having been maintained—regularly assisted by long discussions between senior British civil servants and members of Provisional Sinn Fein, the political wing of the IRA."
  Have there been long discussions between senior British civil servants and the enemies of law and order and of the State in Northern Ireland? If there have, what have they been talking about for all those hours and on those repeated occasions? May the House of Commons be told what it is that has formed the subject of these long discussions and consultations?
  Civil servants are trained to say a great deal in a very short time. They are people who have the aptitude of using words so as to convey a precise meaning in one or two sentences. Why is it, if it is true at all, that these protracted discussions have to take place? What are they about? Are they discussing conditions made between Her Majesty's Government and the Provisional IRA of which this House has not been informed?
  That brings us back to the beginning of the so-called cease-fire itself and the announcement of 11th February with the setting up of the incident centres. I may not be quite as stupid as those who require several hours of coaching by senior civil servants to understand Her Majesty's Government's policy in Northern Ireland; but I must confess that I have still not fathomed the precise function of the incident centres.
  I might remind the House of the words in which they were described in the announcement of 11th February:
  "… if developments occur which seem to threaten the cease-fire, these incident centres will act as a point of contact in either direction."—[Official Report, 11th February 1975 Vol. 886, c. 208.]
  "Developments which seem to threaten the cease-fire", to you and me, Mr. Deputy Speaker, would seem to be renewed acts of violence. The only thing which, on the basis of what we have been told, threatens the cease-fire is that acts of

  829
  violence are resumed. If a cease-fire is unconditional and if the Government, as they assert, are free in every respect to continue to carry out their duty of maintaining the law and the security of the population, the only thing which can threaten the cease-fire is that it is broken by those who perpetrate violence. But, then, if actions of violence are again perpetrated, what is the purpose of a point of contact "in either direction"?
  Very well. The Provisional IRA apparently rings up and its representative says "We did not do it." Well and good: they did not do it. In that case, nothing will happen to them. Is that the only point of these incident centres, to work "in either direction"? Clearly not. The only point of information passed "in either direction" is that there are reciprocal and mutual undertakings and that if Her Majesty's Government were under a misapprehension as to who was responsible for a breach of the peace, they themselves might inadvertently fail to fulfil some of the undisclosed conditions which they have undertaken towards these criminals.
  I find it impossible to reconcile what has been said so far about these incident centres with the policy of Her Majesty's Government as it is known. Not only I but the population at large in Northern Ireland find that reconciliation impossible. That was the reason why shortly after the debate on 13th May a perfectly absurd and irresponsible statement made by a reverend gentleman in Northern Ireland stirred up a whirlwind of speculation, of wild talk, of anxiety and of fear. That was a result of this background of unresolved suspicion that Her Majesty's Government have not fully disclosed the conditions which they made as a basis for the improvement in the level of violence in Northern Ireland.
  I believe in the candour of the right hon. Gentleman. Of course I do. I entirely believe in his candour. Indeed, if we could not believe in that there would be no purpose in the debate. But I say to him that a vital element today is missing in Northern Ireland which we can supply—and that is confidence, which at present does not exist, in the bona fides of the Government and in the openness of their dealing with both the public at large and the various enemies of the State in their different forms.
  830
  I do not expect that in the ambit of this debate the Secretary of State will respond to the question which I have put to him. But I say to the Secretary of State that tonight and tomorrow he has an opportunity such as he has never had before—and he has it in the proper place—to dispel misunderstanding once and for all, to destroy unfounded rumours once and for all, to kill the lying whispers that civil servants are in constant conclave with the Provisional IRA, and to root out these causes of mistrust which not only delay all the developments which we want to see in Northern Ireland but are themselves a contributory cause to the continuing violence in this present phase.
  I ask the right lion. Gentleman to respond to the challenge in the spirit in which it is meant, and to do it before the end of the debate tomorrow.
  11.33 p.m.
  Mr. Gerard Fitt: I cannot fully accept or follow the logic of the right hon. Member for Down, South (Mr. Powell). He opened his remarks by saying that he agreed with the legislation to be passed tonight and to a further extension of all the emergency powers legislation. I opposed that legislation at its inception, and at subsequent intervals when it became renewable I again voiced my opposition. But if the right hon. Gentleman agrees to the Secretary of State having all these powers under the emergency legislation he must realise that he is giving significant powers to the Secretary of State to use in whatever way he wants, without coming to the House and telling us, or making an excuse, or telling us what motivated him in employing them.
  If we do not give the Secretary of State such powers, we can retain them in some other way. But we cannot give him those powers and tell him to come to the House every time he uses any facets of the legislation involved.
  I agree with the right hon. Gentleman that there is suspicion, mistrust and fear in Northern Ireland about the so-called IRA cease-fire. But I agree from a different point of view. It appears that the British Government are prepared to accept a cease-fire in Northern Ireland provided that no members of the security forces are killed and that there is no aggressive action against the security

  831
  forces. Aggressive actions against the security forces are called acts of terrorism, but when innocent people daily lose their lives we hear that there are gangsters afoot and criminal elements abroad. Members of the Provisional IRA who engage in war against the security forces are called terrorists, but anyone else who engages in sectarian violence is called a gangster or a criminal. In my view, anyone who engages in killing, whether it be the killing of a soldier, a policeman, a member of the UDR or an innocent civilian, is a terrorist.
  The Secretary of State rightly drew attention to the diminution of violence since the coming into operation of the IRA cease-fire, but there has been an increase in brutal and callous murders since the beginning of January this year. The Secretary of State told us that the Chief Constable of Northern Ireland has set up a force which will be concerned with the tracking down of sectarian murderers. It is rather late in the day for that. The Chief Constable should have been concentrating all his efforts on tracking down these murderers when they first started committing these crimes. Only last weekend three Catholics and and three Protestants were murdered.
  On the question of detention I am prepared to stand by my own logic. When detention or internment was first introduced it concerned people who were allegedly on the Republican side of the political fence. Even at that time some Opposition Members—notably the hon. Member for Antrim, North (Rev. Ian Paisley)—opposed internment or detention. Then there was a demand right across the political spectrum for the release of detainees. On the Loyalist side there were fewer detainees and consequently there were fewer to release. Now they are all released, so we do not hear objections to the continuation of detention emanating from the people who allegedly represent the Loyalist cause.
  The Secretary of State has coined the phrase that he will bring detention to an end when he is convinced that there is a sustained and genuine cessation of violence. When he first coined that phrase I asked him whether he was prepared to consider detention for those who were perpetrating acts of violence.
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  The right hon. Member for Down, South concentrated on two alleged incidents—the killing of a young policeman in Derry and the killing of a soldier in Armagh. Everyone has cognisance of the killing of the young policeman in Derry because of the statements from the IRA which followed it. I regret those incidents and condemn those who are responsible for them.
  There are nearly 300 Republican prisoners in detention. Other people have been involved in violence throughout the period. The right hon. Member for Down, South referred to the statement issued by the Provisional IRA relating to the death of the young policeman in Derry. We could also have a list of statements which have emanated from the UVF relating to recent murders and pub explosions in Northern Ireland. The so-called Protestant Action Force has claimed responsibility for a number of recent murders.
  The Secretary of State said that it was hard to pinpoint these organisations, because they may be using phoney names or identities. I hope that he does not mean they do not exist. I believe that there is such a body as the Protestant Action Force, which has claimed responsibility for a number of murders. If the Secretary of State is prepared to keep continuing surveillance on the activities of the Provisional IRA, he should be prepared to pay equal attention to all those other so-called Loyalist groups which are engaged in violence.
  I oppose the order purely and simply on the ground of detention. I recognise that in a war situation, when lives are being taken needlessly, it is necessary for any Government to have some form of emergency legislation. Indeed, I am sure that every reasonable person in Northern Ireland would accept that. But I do not accept that in the present situation, with a diminution of violence being perpetrated by the IRA, there is any reason whatsoever for continuing with detention as it is in Northern Ireland.
  The Secretary of State cannot have it both ways. He said that he wants a sustained cessation of violence in Northern Ireland. But he will not get it. If he means that there has to be a week, a month or two months without any incidents, the Loyalist organisations can make certain of creating incidents and

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  so ensure that no more detainees are released.
  The Minister of State, Northern Ireland Office (Mr. Stanley Orme): Is it not a fact that during the period about which the hon. Gentleman is talking we have had a large measure of violence in Northern Ireland coming from some of the groups to which he has referred, and yet the Secretary of State has been releasing detainees? What brought a halt to the releases was the murder of the policeman in Derry. But now the releases have been resumed.
  Mr. Fitt: I should like the Secretary of State to indicate whether he has a final date in mind for bringing detention to an end? If the cease-fire by the Provisional IRA continues for another one, two, three or four months, shall we see the complete rundown and end of detention in Northern Ireland?
  Detention is the main reason why there is still opposition to the emergency powers. Many people have relatives who have been interned. I could quote statement after statement made by hon. Gentlemen representing the Loyalist cause in Northern Ireland when there was internment without trial of Protestants. They should not be allowed to change their attitude to internment because there are now no Loyalists in detention and all those who are interned belong to one particular sect.
  11.43 p.m.
  Rev. Ian Paisley: I should not like to say anything which will make it more difficult for the Secretary of State and those responsible for the governing of Northern Ireland in this critical stage that we have reached, but some things needs to be said on behalf of the people of the Province. Unfortunately, the time is short and the hour is late—soon it will be early—and we have another order with which to deal. However, some points need to be underlined.
  First, we have had a serious law and order situation in Northern Ireland for some time. The people of Northern Ireland feel that both Governments—this legislation was brought in by the Conservative Government—have not acted with speed in this situation. We had the Diplock Report and, as a result
  834
  of that report, the Northern Ireland (Emergency Provisions) Act 1973. That measure was hotly debated in Committee. The hon. Member for Belfast, West (Mr. Fitt) and members of the present administration in Northern Ireland were members of the committee along with myself. I think that there were 22 Divisions, and in all the Divisions which took place when I was present the hon. Gentleman voted against. That is the position according to the record that I have checked in the Library.
  Mr. Merlyn Rees: It is most important for the record that the position is made clear as regards the parts of the legislation that deal with a variety of matters that we shall be discussing at a later stage. I hope the hon. Gentleman will not forget that on behalf of the then Opposition I made it abundantly clear that we supported detention in its amended form. I made it clear that the State could not sit back and let events take their course, and that we were not prepared to put the security forces at risk.
  Rev. Ian Paisley: Yes, but there was opposition in the Committee. It will be remembered that at that time there were elections taking place in Northern Ireland and that some of us were absent from the Committee. We were probably not present when the Committee dealt with the schedules. The Commissioners were appointed at that stage.
  I am not trying to make a political point; I am only pointing out that there was opposition. One would have thought that when the party which opposed that legislation came into power it would have moved with some speed. On the first occasion when renewal took place the Attorney-General gave a promise. The right hon. and learned Gentleman's statement of 9th July 1974 is available but I shall not quote it. The Attorney-General said that he would ask the House to allow the order to continue for a further six months. He gave the undertaking that the Gardiner Committee would make its report as quickly as possible. We know that the order was then renewed for a further six months. We are now renewing it for another six months.
  The point I am trying to make is that this is a matter of great urgency. The law and order situation in Northern Ire-

  835
  land is serious. The people of Northern Ireland consider that there has been a dragging of feet on the part of both Governments. The hon. Member for Belfast, West, said that the police should have been on the job of trying to deal with the difficult situation that has arisen in Northern Ireland. It is not only a difficult but a dangerous situation. The acts that have been committed are of the most atrocious and abominable nature. I understand the fear that is felt in many sections of the community. They do not know when the travelling gunmen will strike.
  It should be said that the community that the hon. Gentleman represents is not in favour of the Royal Ulster Constabulary policing its areas. That attitude has caused difficulty for the RUC. It is difficult for the police to deal with the atrocities that take place in an area where they are not welcome and where they can be stoned and probably assaulted I am sure that the hon. Gentleman will agree that that is a difficult situation. In the present situation it would be a great thing if all public representatives joined together and backed the forces of the Crown, especially the RUC, in their efforts to deal with a tragedy. This is a very difficult matter, and the police have a difficult task. That needs to be stated.
  I trust that the new force or squad arranged by the RUC will be able to act effectively in all parts of Northern Ireland and will not be debarred by communities in Northern Ireland insisting that there should not be police in their areas. The Secretary of State wrote to me recently and pointed out that there were some areas in which normal policing was impossible. This resulted from the attitude of the community in those areas. That makes it difficult for the police to deal with a terrible and disastrous situation. This week I spoke to a high-ranking police officer who said that if everybody who had been shot at during the weekend had been killed, 15 people would have died over that weekend. That is a very serious matter.
  The second matter that disturbs me is that under the order the RUC has had a raw deal. Its members have been treated as terrorists and attempts are being made
  836
  to bring them before courts dealing with terrorists and there has been a refusal by the courts to give them bail. Section 3 of the Act which we are being asked to renew says:
  "… a person … charged with a scheduled offence shall not be admitted to bail except by a judge of the High Court …".
  Subsection (5) provides for exemption to be made for members of Her Majesty's Forces, but there is no similar exemption for members of the RUC. Those members have been refused bail in magistrates' courts. It does not help the RUC to carry out its duties when it is treated differently from other members of Her Majesty's Forces.
  Furthermore, under these provisions members of the RUC can be refused trial by jury. This is a matter about which RUC members are most anxious. Could the Secretary of State when bringing in amending legislation give the members of the RUC the same rights as are accorded to members of Her Majesty's Forces to put them on a par in this legislation with members of Her Majesty's Forces? It seems unfair to me that a member of the RUC can find himself at a grave disadvantage in this respect.
  There are many other matters with which I should like to deal, but I must give the Secretary of State an opportunity to reply, and there are a number of other hon. Members who want to take part in the debate.
  I hope and pray that the situation in Northern Ireland will be dealt with effectively by the members of the RUC and by the new squad. Policing is effective only in the Protestant areas. A large number of those responsible for crimes are being brought before the courts, but they are being brought from areas where police are operating. What is the use of proscribing an organisation when no members of that organisation are being brought into court and charged with membership of that organisation?
  Mr. Merlyn Rees: This is an important point. To prove membership is one of the most difficult things from a legal point of view. It is a matter which we should discuss in Committee.
  Rev. Ian Paisley: The Secretary of State will know that representations were made to the Gardiner Committee on this

  837
  point—that if a person was asked if he was a member of an organisation and refused to answer, that should be taken as an acknowledgment that he was a member. There are people in detention who have publicly declared that they are members of the IRA. Why cannot they be brought before the courts? People are asking why these men are being released from detention and not being taken to court. There is an imbalance here. Those in Protestant areas are being prosecuted, while those in Republican areas are not being prosecuted. I see that the hon. Member for Belfast West takes the point I am trying to make.
  I have had some very hot disagreements with the Secretary of State, but we realise the seriousness of the situation, and I hope that when he replies we shall hear what has taken place between the Government and Provisional Sinn Fein and the Provisional IRA. The people of Northern Ireland are sick of seeing a member of the brigade staff of the Provisional IRA, Mr. Loughrin, on television making statements that he is in touch with high-ranking civil servants at Stormont and that he is having conversations with them. I appeared on television with Mr. Devlin, a colleague of the hon. Member for Belfast, West, and this member of the brigade staff sat opposite us. He informed us—two elected representatives—that he was having conversations with civil servants in the Secretary of State's office. That cannot be tolerated in the present situation in Northern Ireland.
  11.57 p.m.
  Mr. A. J. Beith: The House will endorse the plea of the hon. Member for Antrim, North (Rev. Ian Paisley) for a strengthening of the RUC's rôle in relation to the kind of violence the cease-fire has highlighted, but the House will be surprised that the right hon. Member for Down, South (Mr. Powell) did not seem to welcome or accept the existence of the cease-fire and the degree to which it has led to a reduction of one type of violence. It is right that the House should probe the price, if any, paid for that cease-fire, but the conduct of Ministers is a better guide to that price than the braggings of members of an organisation linked to the Provisional IRA whom one would not be inclined to believe in other circum-
  838
  stances. I do not see why we should give any greater credence to remarks made by them on television.
  Some of the points put to the Secretary of State have already been answered in statements, but he may need to reiterate them tonight.
  I and my colleagues in the Liberal Party have always detested internment, and I am sure the Secretary of State is not exempt from that feeling. We have always regarded it as a propaganda weapon for the IRA, and the IRA has successfully used it as such in the minority community. I would not accept renewal of the emergency powers if I did not recognise that steps were being taken to reduce the reliance on detention and to use the courts as a means of bringing people to justice.
  I have reservations about the Bill which will be debated tomorrow, but against the background of the Government's clear determination to move away from detention, and the major features of the Gardiner Report and the way that the Government are to proceed with them, I shall not seek to oppose the renewal of the emergency provisions. Against the background of the need to provide stability within which the Convention can hold its discussions, and the background of the intention to attempt to move to United Kingdom standards of law and order, we would be wrong to do so.
  One feature of the Gardiner recommendations concerned convicted persons escaping from arrest. It was recommended that the offence committed by these people should be added to the list of scheduled offences. The question of escape does not seem to be covered by tomorrow's provisions, and the right hon. Gentleman did not mention the matter tonight. We should be grateful if he would deal with the question of convicted persons escaping and of others helping them to escape in view of the scale of that activity.
  Proscription does not appear to be even-handed. I recognise the difficulties to which the Minister has referred, the problems of proving membership. The existence of those problems has not prevented us from retaining a situation in which one section of those involved in violence has been subject to proscription while others, also conspicuously involved

  839
  in violence, have not. That does not present the situation of even-handedness with which the Minister has sought to justify the use of proscription, and it does not augur well for the acceptance by the minority in the community of such things as the writ of the RUC. The Minister cannot leave this situation where he has sought to leave it.
  Several hon. Members rose——
  12.3 a.m.
  Mr. Merlyn Rees: In view of the time, I must now reply to the debate. I know that other hon. Members wanted to take part and have been prevented by the time factor. That is in the nature of these one and a half-hour debates. I hope that those hon. Members will have the opportunity to speak tomorrow in the debate, when we shall cover a great deal more ground.
  The tone and attitude of the speech by the hon. Member for Berwick-upon-Tweed (Mr. Beith) coincides very much with my own. He said that he is against detention and that our policy is for ending it. During the existence of the Assembly last year, and about a fortnight after I took office, I was in Royal Avenue, Belfast. I met the hon. Member for Antrim, North (Mr. Paisley) and the then Chief Executive there. The centre of Belfast was burning and the people of the city were shouting demands for something to be done to stop their city burning.
  I could not act through the police and I could not act through the courts. To have stood back in the face of what was happening and to have done nothing would have been wrong. Governments face dilemmas in seeking to deal with urban guerrilla warfare, with brigades, battalions, intelligence officers and so on. It is not easy to take the view that since the matter cannot be taken through the courts it would be better to do nothing. In those circumstances the situation would simply deteriorate even further.
  I would prefer to leave the hon. Member's point about the Gardiner recommendations concerning escaping persons until tomorrow, because we are specifically not dealing with that matter tonight. There are difficulties about proscription. The list of proscribed Republican organisations contains a number of youth and women's groups. Although at first glance
  840
  the list appears to be lop-sided, this is not the case.
  The hon. Members for Antrim, North and Epping Forest (Mr. Biggs-Davison) spoke of the time taken to deal with the report. We received the Gardiner Report at the end of last year. Translating that into legislation after full discussions with the security forces and the lawyers was a long job. It would have been foolish, given the complaints about the Diplock arrangements, to have gone haphazardly into legislation. It takes time. That is why the Bill comes up tomorrow.
  Mr. Biggs-Davison: I was making the point that we might, perhaps, have had a general debate on the report rather than on the legislation.
  Mr. Rees: I think that I offered that in the Northern Ireland Committee but it was thought that the debate should not take place. I do not press the point. It could have been done in Committee had that been required.
  The special category status is an administrative status. I shall have something to say about it tomorrow, and about prison accommodation generally. If on the first day that I took office I had set about building prisons we would not have been able to use them until the end of this year. It takes time. After the Cunningham Report in 1971 no action was taken. In that sense I inherited a situation. I will give details tomorrow of the new accommodation that is coming later in the year.
  I come now to the rôle of the Army, particularly in dealing with explosives. From the advice I am given, in the cease-fire situation, whatever complaints there are, it is unlikely that explosives are hanging about. When explosives move into an area it is a sign that something is about to happen. They do not keep. It is not surprising that the amount of explosives found has fallen. Some of it was old explosive material, found in empty houses. When the scent of explosives is around we know that something is about to happen two or three days later.
  I am glad that the right hon. Member for Down, South (Mr. Powell) comprehended what I have tried to do over the past 15 or 16 months, particularly with detention and the new type of violence.

  841
  He dealt, quite properly, with the ceasefire. On 14th January, 11th February and 12th March and other occasions I have reported to the House on the nature of the talks with the Sinn Fein. I have carefully made sure that everything that has been discussed or explained has been reported to the House. In the first report on 14th January I talked about "a lasting peace". I mentioned what could happen if there was a permanent cessation of violence. I said that the Army could make:
  "a planned, orderly and progressive reduction".
  I said that there could be no time scale and added:
  "I shall have to be convinced that any relaxation and reduction of Army activity will not have to be paid for in lives lost and property destroyed. Once I am so convinced … in the later stages of this response to a permanent cessation of violence, the Army could he reduced to a peace-time level."—[Official Report, 14th January, 1975; Vol. 884, c. 201–2.]
  On 11th February I spoke on the same point, about the reduction in the rôle of the Army, both in numbers and in scale of activity. I said that once I was satisfied that violence had come to an end there would be a de-escalation of searchings by the Army in certain areas. Such activity was required only in the face of bombings and so on. I made it clear that the searches in every house and the counting of heads would not be required in those circumstances. It is not required in this situation. That is not to say that the Army are not there, that there are not vehicle check points, that people picked up or wanted in the courts are not dealt with.
  As I explained to the House, and it is worth saying again, I do not want there to be any illusion. I have stuck clearly to what I have said in the House of Commons. My officials have had meetings with various organisations to follow up the statements made to the House and the publication of the Gardiner Report.
  There have been a number of meetings with. Provisional Sinn Fein. I want to be sure that Government policy is clearly understood, and it would be wrong if there were no chance for Government views to be explained and clarified fully. There is no question of bartering the future of Northern Ireland away. I recall my words:
  842
  "My officials have 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."—[Official Report, 11th February, 1975; Vol. 886, c. 207.]
  I have said that explanations have been given to the meetings. I have carefully reported to the House all that goes on and all that has been done.
  Mr. Powell: In that case, can we take it that there have been no meetings since the meetings when these matters were explained at the time when the cease-fire came into force? Once explained, they did not need to go on being explained hour after hour, did they?
  Mr. Rees: Discussions go on with the Protestant para-military groups and they discuss the Government view of the situation.
  Mr. Powell: It is nonsense.
  Mr. Rees: It is not nonsense.
  Mr. Powell: It is making complete nonsense.
  Mr. Rees: It is not. It may be that the right hon. Member for Down, South does not understand the Irish mentality. At least, after 15 months I begin to comprehend it. It is different and needs explanation.
  There are no arrangements for bartering away Northern Ireland. Policing is important. The cease-fire is not a truce. The fact that there has been a cease-fire since the turn of the year has been the main momentum which could flower and develop. It is vitally important to Northern Ireland that the Provisional IRA has had a cease-fire, and I welcome it. I hope that it will develop, because it is the only way, at the end of the day, in which we shall get peace in Northern Ireland.
  My hon. Friend the Member for Belfast, West (Mr. Fitt) made a point about intention. It is no good arguing that in one part of Belfast there is use of this Act and in another there is not. If the police are not there, there is no other way of making arrests. Unless the police have the evidence to go through the courts, the alternative is to sit back. There is a dilemma, and that is the reason why there is a smaller number of

  843
  Loyalists than Republican detainees. That is the nature of the situation. It is clear. It may not be pleasant, but it is true.
  With regard to policing in general, all I can say is that in Northern Ireland this legislation will not be necessary in the long run if we get genuine policing. That is the Government's aim. The Army have done an excellent job.
  Mr. Fitt: Will my right hon Friend agree that the vast majority of recent murders have been not in Republican areas but in other areas?
  Mr. Rees: If my hon. Friend is saying that in recent months most sectarian murders have been from Loyalist sources he is right. Hon. Members from Northern Ireland have admitted and said so. That is a fact. However, it does not mean that by the nature of sectarian murder there is a lack of policing. The matter is difficult. Policing matters.
  Rev. Ian Paisley: Will the right hon. Gentleman not agree that——
  Mr. Speaker: Order.
  It being one and a half hours after the commencement of proceedings on, the motion, Mr. Speaker put the Question, pursuant to Standing Order No. 3 (Exempted Business).
  Question agreed to.
  Resolved,
  That the Northern Ireland (Various Emergency Provisions) (Continuance) Order 1975, a draft of which was laid before this House on 9th June, be approved.

  NORTHERN IRELAND ACT 1974 (EXTENSION)
  12.15 a.m.
  The Secretary of State for Northern Ireland (Mr. Merlyn Rees): I beg to move
  That the Northern Ireland Act 1974 (Interim Period Extension) Order 1975, a draft of which was laid before this House on 9th June, be approved.
  Just over one year ago traumatic events in Northern Ireland led to the ending of the five-month old Executive and a return to direct rule of Northern Ireland from Westminster. That represented the
  844
  end of a bold experiment in partnership between the two communities there and the recognition on the part of the Government that a more acceptable and durable approach might best come from the people of Northern Ireland themselves.
  Parliament then enacted the Northern Ireland Act 1974, which provided for the election of a Constitutional Convention to consider and report on
  "what provision for the government of Northern Ireland is likely to command the most widespread acceptance throughout the community there".
  Elections to the Convention were held on 1st May 1975, and the deliberations of the Convention are currently in progress. Meanwhile direct rule continues.
  The Northern Ireland Act 1974, as well as providing for the election of the Convention, made new temporary provisions for the government of Northern Ireland. These provisions were to have effect initially for an interim period of one year, which comes to an end on 16th July 1975. The Act allows for this interim period to be extended for up to one year at a time, subject to the approval of each House of Parliament. The purpose of the present draft order is to extend the interim period until 16th July 1976.
  Hon. Members may like me to refresh their memories about the nature of these temporary provisions. Briefly, the Northern Ireland Act 1974 provided for the reintroduction of direct rule. It enabled legislation for Northern Ireland to be made by way of Order-in-Council at Westminster instead of by measure of the Assembly, and it made provision for the functions of the members of the Northern Ireland Executive to be discharged by Northern Ireland Departments subject to the direction and control of the Secretary of State.
  As well as retaining direct responsibility for those matters which, under the Northern Ireland Constitution Act 1973, were placed in the hands of Her Majesty's Government, notably the administration of law and order, I therefore became responsible to Parliament for the time being for transferred matters as well, including legislation on such matters as were formerly the responsibility of the Northern Ireland Executive, and for which the Executive was accountable to the Assembly.

  845
  I and my colleagues exercise these responsibilities continuously whether in Northern Ireland or in London. To help us do so, there is machienry in Northern Ireland to help us co-ordinate the work of the different Departments. For instance, there is an executive committee, which meets regularly under my chairmanship and consists of my ministerial colleagues and the permanent heads of the Northern Ireland Departments. This committee oversees the general administration of transferred services and also considers proposals for legislation. The Secretary of State's Executive Committee, SOSEC, meets regularly and is a co-ordinating body, similar to an executive or a Cabinet because of devolved forms of Government still taking place.
  As far as excepted and reserves matters are concerned, I have direct personal responsibility for constitutional matters, security and law and order. My right hon. Friend the Minister of State, the hon. Member for Salford, West (Mr. Orme), acts as my deputy with special concern for political affairs and coordination of EEC business. My hon. Friend the Minister of State, the hon. Member for Lewisham, East (Mr. Moyle) has special concern for the police. My hon. Friend the Under-Secretary, the hon. Member for Mansfield (Mr. Concannon) has special concern for the Army. Lord Donaldson, the Under-Secretary, has special concern for prison administration and compensation.
  As to transferred services, I take a close personal interest in overall social and economic planning for Northern Ireland, while first-line responsibility for the various Northern Ireland Departments is divided among my four colleagues. My right hon. Friend the Member for Salford, West oversees the Departments of Commerce and Manpower Services. My hon. Friend the Member for Lewisham, East has responsibility for the Departments of Education and Health and Social Services. My hon. Friend the Member for Mansfield oversees the Departments of Environment and Housing, Local Government and Planning. Lord Donaldson takes charge of the Departments of Finance and Agriculture.
  The House will understand that this wide range of responsibilities places a very heavy load on all my colleagues.
  846
  It is a matter of great personal satisfaction to me that they continue to discharge their duties with commendable energy and skill, in what the House will appreciate are not the easiest of conditions, on seven days a week over parts of the Province. Some of the remarks that have been made recently have shown a complete lack of knowledge of the form of government that takes place in the Province.
  In the economic field, the Department of Commerce has concentrated on maintaining the momentum of the job-creating industrial development programme and minimising, where possible, the impact on existing industry and employment of the effects of the general recession, from which Northern Ireland has not, of course, been insulated. The Department's efforts to attract new industry and to encourage the expansion of existing firms has resulted in the promotion of almost 5,000 new jobs. This has involved Government assistance of about £26 million in a total of some 39 firms.
  Northern Ireland has more of a mixed economy than the rest of Great Britain. It has become more and more mixed over the years, and if it were not for the money put in by the Government there would be sizeable unemployment:. We have had a sort of "National Enterprise Board", I am glad to say, because it was set up by the previous administration. We could build upon that in relation to the NEB for the United Kingdom as a whole.
  Rev. Ian Paisley: It was set up before that, by Stormont.
  Mr. Rees: I am grateful for that correction. It was set up in those days.
  Special efforts have also been made to foster small-scale business enterprises. Indeed, a major decision has been announced to assist Harland and Wolff Ltd. through its present financial difficulties. This involves taking the company into public ownership, and discussions are progressing on the introduction of worker participation at all levels of decision-making within the yard.
  The responsibilities of the Department of Manpower Services include a comprehensive range of training and rehabilitation resources. In the year ended 31st March 1975 the total output of Govern-

  847
  ment training centres amounted to just under 3,400 adults and apprentices, excluding 865 others who completed their training elsewhere under arrangements made by the Department. In addition, under the Counter-redundancy Training Scheme 14 firms provided approved versatility training for 740 employees who would otherwise have been redundant in periods of temporary recession. Thirteen hundred others were provided with both employment and training under the auspices of Enterprise Ulster. The Fair Employment Bill has been published, and there is legislation in prospect on sex discrimination and industrial relations.
  I should add about training generally that training facilities in Northern Ireland, in both content and amount, are facilities of which people there should be proud and which we would do well to emulate in the rest of the United Kingdom.
  Turning to environmental matters, a variety of measures are in hand to alleviate the seriousness of the housing problem in Northern Ireland. For instance, steps are being taken to stimulate the growth of the voluntary housing movement. The maximum limits on improvement and standard grants have been raised, and in the public sector a rent rebate scheme has been introduced. All areas in Belfast which are scheduled for re-development or comprehensive development will be taken into public ownership by 1980. Other major developments include publication of a discussion paper on regional physical development strategy and the commissioning of a major review of the Belfast Transportation Plan. Under the auspices of the Department of Environment, £2 million has been spent by local authorities and employment given to over 1,000 men on cleaning up areas affected by civil disorders. Only those who know Northern Ireland know the importance of that. In downtown Belfast the need for a clean-up brings to mind the Forth Bridge—as much as is done, there are still areas in which there are very real problems.
  As for education, the five new education and library boards have now been in operation for just over 18 months, and the reorganisation has been achieved without major disruption and in a way which has allowed the continued develop-
  848
  ment of the services for which the boards are responsible.
  In secondary education, a feasibility study is being carried out by the Department's senior chief inspector, following the recommendation of the Burges Report that the 11-plus procedure should be eliminated through a re-structuring of the education system. The study, which should be completed within a year, is concerned not with theoretical arguments for and against reorganisation but with the practical possibilities of achieving it within the resources of existing buildings and in the light of local circumstances. My hon. Friend the Member for Lewisham, East the Minister of State, who is responsible here, is talking with the education bodies about the practical problems of ending the 11-plus.
  Over the past 12 months there have also been important developments in community relations. The amalgamation of the Department of Community Relations and Education will allow an integrated approach to these inter-related areas of activity.
  I am glad to report that the last 12 months have been an encouraging period for the work of the Department of Health and Social Services. Not only is there now full integration of the health services but, uniquely in the United Kingdom, these have been linked with personal social services under single authorities, the four new health and social services boards. This approach will, I believe, pay particular dividends in the provision of services for the total needs of groups like the elderly and the physically and mentally handicapped.
  For the agricultural industry, the past year has been a problematical one in the United Kingdom as a whole, but particularly in Northern Ireland, which is more dependent on the products which encounter the greatest difficulties; namely pigs, eggs and beef. Different reference rates for the "green pound" for the United Kingdom and the Irish Republic were introduced on 7th October 1974. These different rates placed meat processing in the Republic at an advantage over the meat plants and bacon factories in Northern Ireland, and tended to encourage smuggling of livestock to the Irish Republic and a resultant loss in throughput and employment in processing plants in Northern Ireland. However, I am pleased

  849
  to say that, with the help of my right hon. Friend the Minister of Agriculture, I was able to take action to neutralise the effect of the differential and provide real assistance to the industry in Northern Ireland.
  The Department of Finance, apart from maintaining the financial machinery of government in Northern Ireland, has continued to press ahead with the Government construction programme in spite of the troubles and difficulties about the supply of materials. As well as carrying out a programme of building on behalf of Northern Ireland Departments and of work for the Post Office, the Department has borne a heavy load of work on behalf of the Northern Ireland Office in respect of prisons.
  I hope that this brief survey of the work of the Northern Ireland Departments will have given the House a fuller understanding of the range of activities with which my colleagues and I are concerned in the administration of transferred services in Northern Ireland. I only wish that the work of these Departments could be discussed in the Northern Ireland Committee. There is not a devolved form of government. The Ministers who work with me are about their business every day of the week, but only on this occasion, when I list the work done, is there any mention of it in the House. The Northern Ireland Committee was constructed for that purpose, and I believe that the fact that there has been no use of it is bad for Northern Ireland. Such a survey would not be complete without a mention of the extremely hard work and devotion of the Northern Ireland Civil Service, many of whose members are working under extremely difficult conditions.
  I turn again to the order. One of the main reasons why it is required is that it would not be right to introduce any fresh arrangements for the government of Northern Ireland while the Constitutional Convention is at work. The purpose of the Convention is clear and specific. The Convention is not a Parliament, and its members are not Members of Parliament. The Convention's sole task is to make recommendations to Parliament at Westminster about the future arrangements for government in Northern Iraland. The Government take the view that it is for the people of Northern Ireland, through
  850
  their elected representatives, to take the lead in shaping together their future institutions of government.
  The House will understand why it would be inappropriate for me to assess the Convention's progress to date. Although the Government will assist the Convention in any way they can, they will not interfere in the Convention's work. I would say, however, that the Government welcome the constructive way in which the Convention, under its Chairman, Sir Robert Lowry, to whom I am pleased to pay tribute on this matter and many others, has settled to its task.
  As the House knows, the Convention agreed its rules of procedure in early June and is now addressing itself to its main business. The initial span for the Convention's life is six months, but the Government would sympathetically consider extending this period, provision for which was made in the Northern Ireland Act.
  Whatever the outcome of the Convention, the government of Northern Ireland has to be carried on. The draft order does no more than allow that to happen. For the time being there is no practical alternative to the present arrangements, and I hope that the House will, therefore, accept the need to approve the draft order.
  12.30 a.m.
  Mr. John Biggs-Davison: We are a little puzzled by the mention by the Secretary of State of the Northern Ireland Committee, because at Business questions on successive Thursdays we have been pressing the Leader of the House fur the Northern Ireland Committee to be used. It is no fault of the Opposition that the Northern Ireland Committee has never met. Of course, we agree——
  Mr. Merlyn Rees: May I ask the hon. Gentleman whether we can call the Northern Ireland Committee to discuss education, industry, and all the other issues that are being advanced? I should be very happy to arrange it with the Northern Ireland Members and to start next week.
  Mr. Biggs-Davison: I think we have heard that suggestion with great sympathy, and, although I am the last person to be a "usual channel" I certainly see

  851
  no reason why the Northern Ireland Committee, which has never met, should not meet and do some useful work.
  Of course, we agree with the Secretary of State that the government of Northern Ireland must be carried on. The existing system must continue while the Constitutional Convention is preparing something else, and, I trust, something better. We pray for the success of the Convention, and we acknowledge the conciliatory speeches and the constructive attitude of Unionists and non-Unionists alike in the Convention. This is something which has already been admirably demonstrated in a number of district councils and other public bodies.
  As I understand the position, the Convention operates under a different time-scale from the Northern Ireland Assembly. Under article 3 of the order the Assembly is to continue in suspended animation for another year, until 16th July 1976. The Convention, for its part, is subject to automatic dissolution either on the date of the presentation to Parliament of its final report or six months after its first meeting, whichever comes first, unless the Secretary of State extends the duration of the Convention for up to three months at a time.
  I think that we all hope that the Convention will report without great delay, but were its deliberations to be prolonged through next year—I hope this is an academic question—could the interim period laid down in Section 1(4) of the Northern Ireland Act 1974 be again extended or would new legislation be necessary?
  The system of direct rule is not satisfactory. Under it administration and government have become more remote and impersonal. The too few right hon. and hon. Gentlemen who represent Northern Ireland—Fermanagh and South Tyrone is almost as disfranchised as Walsall, North—have their work cut out in dealing with the grievances and problems of their people in these days of bloodshed, disruption and distress. Ministers work extremely hard. The Secretary of State has described a little of how they operate.
  I single out one point that the right hon. Gentleman made, concerning the
  852
  training schemes. In Northern Ireland these are excellent and are of particular importance at this moment. But there has been a burgeoning of bureaucracy. It is not the fault of Ministers, and it is not the fault of the Northern Ireland Civil Service, which has a very high reputation indeed. The centralisation of local government under the Macrory reforms has led to an increase of some 10,000 officers. Yet. although the old paraphernalia of Governor, Privy Council, Senate and House of Commons has been criticised as being out of all proportion, under direct rule civil administration has been more costly and more bureaucratic.
  At the moment, of course, all this is for the Convention, and on the Convention our hopes rest.
  12.35 a.m.
  Mr. James Molyneaux: I endorse the very modest remarks which the Secretary of State understandably made about the efficiency and the hard work put in by his ministerial team. We all admire and appreciate the amount of work that they do, and we also appreciate the intolerable strain under which the right hon. Gentleman and his colleagues operate in what is probably the most difficult of all the Offices of State, the Northern Ireland Office.
  Perhaps I might reciprocate and mention the right hon. Gentleman's remarks about Northern Ireland's advancement in various ways. I have said on several occasions that in health and social services, especially in terms of hospitals, Northern Ireland was very often 10 years ahead of the rest of the United Kingdom, and that development took place when Northern Ireland was, to a great extent, nearly completely financially self-supporting.
  There was another experiment. Back in the 1930s, a Unionist Government attempted the nationalisation of road transport. It was not sabotaged by any political party or group. The scheme virtually wrecked itself. I should have though that that might have been sufficient warning to the Labour Party when in 1945 it embarked ill-advisedly on a similar course.
  I share the view of my right hon. and hon. Friends that these debates and the

  853
  debate tomorrow are in the reverse order: much time might have been saved and a far more orderly debate might have ensued if we had been able to take the Bill first and the orders subsequently.
  Much has been made of the point that Northern Ireland gets a disproportionate amount of Parliament's time. But whose fault is that? It is the fault of the 483 Members of this House who, on 28th March 1972, voted enthusiastically for the abolition of the Parliament of Northern Ireland. They said that it would break the mould, it would lead to fresh thinking, it would give time for reflection, and the rest of it. As the Bill moved through its various stages, their enthusiasm diminished somewhat, and the number in favour has decreased as successive Secretaries of State have come to the House to ask for another renewal or to conduct another experiment.
  It is well to remind the House of the reason for its having to bear the burden which so many Members at the time assumed willingly. The Northern Ireland Members themselves cannot be blamed. They warned of the consequences of many of these hasty decisions.
  In their innocence, many right hon. and hon. Members have often talked about temporary provisions. We see the phrase featured on the front page of the document which we are discussing now. We have talked about temporary provisions for four years. Right hon. and hon. Members have consoled themselves with the notion "Here is yet another experiment that we might try", and they have followed that with the exhortation "We may have our doubts about it, but let us give it a try." I remember my right hon. Friend the Member for Down, South (Mr. Powell) saying in 1972 that Members were not here to give this or that a try but were here to exercise their judgment. A great many of our colleagues in the House at that time—many of them are still here—were sad at that. Despite the fact that our advice on these constitutional matters have been disregarded so often, we offered our cooperation in making the machinery work—with about as much result and response from those in authority.
  In the face of the complaint that Northern Ireland was receiving more than
  854
  its share of parliamentary time, my right hon. Friend and I suggested on several occasions that in the case of Bills which would afterwards be copied and duplicated in Northern Ireland, the sensible procedure would be to include an application clause in them extending them to Northern Ireland. What was the answer? The answer was that the Government did not think that appropriate.
  After the setting up of the Northern Ireland Committee we took the initiative on 13th February. On that day I wrote to the Leader of the House suggesting that as that Committee had now been brought into being we should ask for an early sitting to discuss the very subject which we are now debating—months afterwards. On 17th February the Leader of the House replied through his secretary acknowledging the letter and saying that they would get around to dealing with it. On 26th February I received a further letter from the Leader of the House saying that he thought that if I could agree this with the Northern Ireland Office the Government might be able to take action. But no such agreement was ever achieved. We were never given any reason why this was not considered a suitable subject for discussion in the Northern Ireland Committee. I am sorry that I must correct the Secretary of State on this matter. His memory must be at fault. At no time did he ever suggest that the Gardiner Report was a subject for discussion in the Northern Ireland Committee.
  Mr. Carol Mather: On a point of order, Mr. Deputy Speaker. In view of the fact that the Government have lost the Woolwich, West by-election and thereby——
  Mr. Deputy Speaker: Order. That is not a matter for the Chair.
  Mr. Molyneaux Mr. Molyneaux rose——
  Rev. Ian Paisley: Does my hon. Friend agree that if the Secretary of State's officials spend hours on end discussing the cease-fire with men of violence, who have murdered policemen and members of Her Majesty's Forces, he should take time in the Northern Ireland Committee to discuss this matter with the elected representatives?
  Mr. Molyneaux: I think that had the Under-Secretary and his colleagues followed our advice, the suspicions which existed in Northern Ireland in the intervening four months, which were described by my right hon. Friend, could have been avoided. We could then have moved on to constructive matters. We should have placed no obstacle in the way.
  The Minister of State, Northern Ireland Office (Mr. Stanley Orme): Adequate statements were made in this House by my right hon. Friend. Those statements which were open to question and criticism, were made on a number of occasions following security problems in Northern Ireland. Northern Ireland is given more than its fair share of parliamentary time.
  I have seen the correspondence and I have dealt with some aspects of this matter. This is what the hon. Gentleman should address himself to. He has not answered this point. We offered a debate on the serious economic situation in Northern Ireland. The hon. Gentleman and his Friends did not take up that offer, as they insisted upon a debate on security. Therefore, they frustrated the rights of their constituents to have their views aired in the Northern Ireland Committee.
  Mr. Molyneaux: I cannot agree with the hon. Gentleman. I am naïve about economics and high finance. However, as I see it, the ills which are afflicting Northern Ireland, in common with the rest of the United Kingdom, result from the actions or inaction of the Government. This is the place where debates on economics should take place. I can see that at some time when the economic situation permits there might be merit in Northern Ireland Committee discussions provided that there are no other urgent administrative or financial discussions. The basic economic and financial decisions are taken in the House. Northern Ireland is affected accordingly.
  I admit that we wanted to discuss the cease-fire, its consequences and developments in Committee. We have seen the reason tonight, when my right hon. Friend addressed four questions to the Secretary of State, who was given the opportunity to deny and repudiate statements which had been made by various people claiming to be authorities on the other side of the argument and the Pro-
  856
  visional IRA. The Secretary of State, with all due respect, answered by reading out the juicier parts of the statements he had made in the House, which had not been properly debated. That is why we wanted a debate, and why I hope that we shall be able to address our minds to the questions which were put to the Secretary of State by my right hon. Friend when we deal with the legislation tomorrow.
  On 19th June in my letter to the Secretary of State I said that as we were to have debates tonight and tomorrow we should not need to press further our requirement for a debate in the Northern Ireland Committee on the cease-fire. The way is now clear. Why could not that have been done four months ago?
  Last week we suggested that the debate on the Northern Ireland (Emergency Provisions) (Amendment) Bill should be followed by the debate on the two orders and not the other way round. On Thursday at Business questions time the Leader of the House made the astonishing statement, in reply to a question from me, that he had re-arranged the business this way to suit my right hon. and hon. Friends and myself. We are still trying to work that out.
  Only 48 hours ago I suggested that the nonsense element might be eliminated from our debates tonight and tomorrow if tomorrow we could have a fairly wide-ranging debate and a winding up speech with some substance in it. Again we had the answer that the Government did not think it appropriate. I could have understood this if we as the United Ulster Unionist Party had behaved as a wrecking party engaging, probably with others, in guerrilla operations designed to bring down the Government. But we have consistently said that we support the Government in all measures, however unpleasant, which we regard as being in the best interests of the United Kingdom as a whole. No one can accuse us of having failed to give that support and keep that promise, even when it has not been easy for us to do so.
  Bearing in mind what I said about our common desire to act in what we consider to be the best interests of the United Kingdom—and there can be little doubt that we are also united in our desire to do what is best for the people of

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  Northern Ireland—is it too much to hope that we shall now be able to get down to a more efficient method of dealing with Northern Ireland business?
  Section 1 of the Act which we are renewing has been largely put into effect and requires little comment. On Section 2, as the Secretary of State said, the Convention is now under way. The Secretary of State rightly maintained earlier today that, in his view, the Convention was not a Parliament, and we support him in that view. Secondly, the Secretary of State has consistently resisted suggestions that the Government and Parliament should impose preconditions on the Convention, lay down guidelines and hamstring the Convention in its operation. His judgment has been vindicated by the responsible, constructive approach of those who have been elected to the Convention.
  I want to pay tribute to the party leaders present in the House tonight—my hon. Friend the Member for Antrim, North (Rev. Ian Paisley), my right hon. Friend the Member for Belfast, East (Mr. Craig) and the hon. Member for Belfast, West (Mr. Fitt). I wish them well and trust that they and their colleagues will not, in the long run, require the full period for which the order makes provision in which to prepare and submit their report.
  12.51 a.m.
  Mr. Gerard Fitt: The opening statement by the Secretary of State gave us some indication of the tremendous task which has been undertaken by the Northern Ireland Office in running Northern Ireland under direct rule. My right hon. Friend and his colleagues will be aware of the substantial criticism which has been made against them, particularly by the Northern Ireland Convention. All parties right across the political spectrum in the Convention have levelled criticism at Ministers, the latest being last week.
  Mr. McCusker: Does the hon. Gentleman accept that the criticism, on which I hope to enlarge later, if I am lucky, was directed at the system of administration? In fact, I cannot find a single instance of a personal attack having been made by the Convention. However, SDLP Members have made substantial and numerous attacks on Ministers.
  Mr. Fitt: I was referring to criticism which has been made by all the political party representatives in the Convention about the effects of remote control or indirect government from Westminster.
  I feel that Ministers at the Northern Ireland Office have taken on an onerous task in trying to run Northern Ireland in present conditions. I do not believe that they will ever be successful in running Northern Ireland from this House. Perhaps it is because we have been used to having a local parliament of our own, and many people feel that elected representatives there are more aware of the problems that affect the different constituencies.
  Mr. Orme: My right hon. and hon. Friends and I eagerly look forward to the day when we are in a position to hand over all aspects of the government of Northern Ireland to an acceptable devolved form of Government. But that form of Government will have to grapple with a very difficult economic situation and financial constraint. That point ought to be borne in mind. This afternoon I heard an hon. Member say that Northern Ireland wanted the freedom to carry out its own policies and to spend the money. It is worth remembering that a large proportion of that money still comes from Great Britain as a whole.
  Mr. Fitt: I fully support my right hon. Friend. Indeed, I was about to make almost exactly the same point.
  Most of our debates on Northern Ireland have related to the security situation. Therefore, many people in the Province may not be fully aware of the dire economic problems which will face them in the weeks and months ahead.
  The Convention is not a Parliament, but it has been given the specific task of trying to evolve politically acceptable structures. I believe that if Convention Members were made aware of the enormity of the social and economic issues in Northern Ireland, the knowledge might help them to determine acceptable political structures even more speedily.
  In this House our debates on Northern Ireland have been mostly concerned with security. I have yet to see a full day or a number of hours devoted to Northern Ireland's social and economic problems.

  859
  Those are matters of vital importance over and above the security issue. Even if the security situation were settled, Northern Ireland would still face poverty, distress and unemployment. Given those conditions, the situation could be even worse than it is today.
  Mr. J. Enoch Powell: Does the hon. Gentleman agree that we should put forward a common case for a Supply Day?
  Mr. Fitt: I would agree with any suggestion made from either side of the House that we should avail ourselves of the first opportunity to discuss the social and economic problems of Northern Ireland. As a member of the Convention I accept that Convention members are not fully aware of the massive problems that are involved. For example, only last week I read of a shoe factory closing down in Ballymena, North Antrim. There must be many small factories throughout Northern Ireland that are finding themselves in financial difficulties and facing the prospect of going out of business. Northern Ireland cannot afford the loss of one job. The loss of jobs would only add to the troubles that we have already experienced over the past few years.
  Although I must accept that my right hon. Friend is not prepared to discuss the social and economic issues with members of the Convention, I feel that he should avail himself of the first opportunity, along with his Ministers, to talk to the elected Northern Ireland Members in this House so that we can convey the extent of the problem to our own party members in the Convention. That may help them to realise the enormity and the urgency of the problem. That would probably help them to bring into existence acceptable political structures.
  Of course, no one will oppose this order. Whatever problems we now face would be exaggerated if we were not to agree to the order. Whatever decisions have been made against the system of direct rule and the remoteness of Government from Westminster, I do not think that anyone is questioning the integrity or the ability of those who represent the Government.
  Rev. Ian Paisley: Mention has been made of criticism within the Convention.
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  That criticism can be read in the reports. In the speech that I made at the Convention I pointed out that we were not challenging the integrity of Ministers but were drawing attention to the fact that people who did not know the situation and did not understand the Ulster mentality had no appreciation of the problems. There is a difficult situation in Northern Ireland. It is not easy to pick up the strings and to carry on with the job.
  Mr. Fitt: I accept what the hon. Gentleman says. In this difficult situation the elected Members of Northern Ireland constituencies must accept greater responsibility for keeping in close touch with the present Government and putting forward the problems that concern our constituents. I am not sure whether we shall have 11 or 12 Members when we engage in our discussions. I am inclined to think that there will be a missing Member. Perhaps there are no problems in Fermanagh and South Tyrone. I do not know about that, but I know that there are many problems in all the other Northern Ireland constituencies.
  If there is to be a Northern Ireland Committee, set up under the aegis of the House, I shall be prepared to use every means possible, in conjunction with other hon. Members, to go in depth into the problems affecting our Northern Ireland constituencies.
  1.0 a.m.
  Mr. McCusker: I, too, wish to thank the Minister for his comments. I have always deprecated the personal attacks which are made from time to time by certain Members from Northern Ireland constituencies, some of whom are not here this morning. I believe that all 12 of us will be increasingly important as the days go by after today's events. That is something to which I personally look forward. I hope that we shall see something more of the hon. Member for Fermanagh and South Tyrone (Mr. Maguire) than we have seen in the past five or six months.
  One would have to be deaf and blind not to acknowledge that there is an increasing sense of frustration and isolation in Northern Ireland concerning the way in which the country is being governed here at Westminster and also about the effects of various instruments

  861
  of government in Northern Ireland. That system has been described as being remote and impersonal. That puts the matter neatly and nicely. We have district councils which are powerless; I do not expect hon. Members to accept my word for it, so I shall quote from an article in a local newspaper in my constituency, written by a reporter who has the unenviable task of sitting through meetings of the local council:
  "Local government must be completely reorganised with many of the powers enjoyed by former local authorities again returned to the councils. The way the system of local government is being administered at the moment, there seems little point in sustaining an expensive administration at local level. … Non-elected bureaucrats make decisions about vital things like housing, planning, roads and other things which affect everyone. I he same planners are paid by public funds, and therefore the man who pays the piper must have some say in calling the tune."
  Reference has been made to the various area boards. It should be made clear that not one of them has an elected member. There are people on those boards who come from the district councils, but they do not go as delegates. Everybody serving on the boards is a nominee of the Minister. Many of those nominees are people who have been rejected by the electorate. We no longer have a Stormont administration—an administration on which our system of local government was ultimately based.
  We are trying hard to make the thing work with our 12 Members here at Westminster, but we cannot ignore what is taking place in Northern Ireland. There is a lack of identity and there has been an increase in vandalism of which we should be ashamed. There has been a refusal to pay one's way, in terms of rent, gas and electricity bills, and all the rest. I attended a local tenants' association meeting on Monday and the view there was, "The Minister is interested only in screwing out of the working man every penny by making him pay increased rents".
  There is a lack of civil pride, and £2 million has been spent on tidying-up operations. When one looks around, one wonders where the money went. Disrespect for the law has also been highlighted. There has been a complete breakdown in communications from the ordinary person in the street right through to various systems of government, and this
  862
  has led to a tremendous vacuum in Northern Ireland.
  What are we trying to do? I have a small bundle of documents here which is a sample of that work. There are 48 orders in council covering a period of two months. Many are already in operation. They cover industrial training levies, pencil and graphic instrument regulations; there is a level crossing order in regard to an automatic barrier at Collybackey. We have teachers' superannuation orders, shipbuilding orders, misuse of drugs orders, motor vehicle testing orders, administration of justice orders, and so on.
  That is just a selection of them. We have 19 other draft orders, some of which will affect the lives of people in Northern Ireland quite substantially. We try to give them proper consideration, and attempt to amend parts of them, though we recognise that we are unlikely to be able to do so.
  The hon. Member for Belfast, West (Mr. Fitt) was unable, because of illness, to come here to defend the stand he took on the Community Relations Order on another occasion. That was not a disaster, but the Youth Employment Service Order, which destroyed the youth employment service, was a disaster. Experience has proved that the schools are not in a position to take over the service's functions. We shall see children coming out of school into an extremely difficult economic climate, having received very little guidance. They will probably go straight into the dole queues.
  In the Convention last week, Mr. John Hume said the Secretary of State's performance was sub-standard, but that was probably the only personal criticism made in the debate.
  Mr. Harry West, an Official Unionist, said:
  "In the British Parliament, the legitimate affairs of our Province get scant attention … and decisions that vitally concern us are made over our heads by people who are not accountable to us in any way."
  The hon. Member for Belfast, West said:
  "Long distance government from London is completely unsatisfactory in trying to grapple with our many problems. Deep resentment and bitter frustration is caused when matters which we regard as being of weighty concern to Northern Ireland are relegated to one and a half hour's debate at 11 p.m. or

  863
  midnight and one is talking to a completely empty and uncaring House."
  My hon. Friend the Member for Antrim, North (Rev. Ian Paisley) said:
  "We have been ruled in a worse manner than the colonies. Even the governor in a colony has a council of local people to give him grass roots reaction."
  Mrs. Dickson, of the Unionist Party of Northern Ireland, said:
  "It is direct rule by remote control. We have all discovered to our dismay the number of Orders in Council that go through as a result of direct rule without any possibility of improvement, amendment or deletion. All of a sudden, we discover that they have become the laws of the Medes and Persians. Our own representatives have no say or control over them. The present form of direct rule is operated by remote control."
  Mr. Powell: It is perhaps as well that this debate is taking place so early in the morning, in a Chamber that is almost empty. If representatives of six other counties in the United Kingdom were to hear this description of the way in which they are governed, it might put dangerous thoughts into their heads.
  Mr. McCusker: I do not necessarily disagree with my right hon. Friend, and I am not saying I agree with everything said in the Convention.
  Mr. Kinahan, of the Alliance Party, said:
  "I am sure that people generally feel that there is big brother element dictating what is good for them."
  Mr. Empey, Vanguard Unionist, said that local initiative was being strangled by Whitehall. Mr. David Bleakley, of the Northern Ireland Labour Party, said:
  "There are a great many people in Northern Ireland who, if the spectre of violence were to disappear, would be happy to accept direct rule provided it could be developed as an imaginative constitutional instrument."
  I might agree more with that sentiment than with some of the others.
  Mr. Orme: Is the hon. Member talking about a part of the United Kingdom? It sounds rather strange that people who claim so fervently to be members of the United Kingdom should see themselves as separate and apart, and should look upon Ministers and civil servants from Whitehall as intruders into their part of the United Kingdom.
  Mr. McCusker: After 50 years of devolved government there are bound to
  864
  be feelings like that. If the Government ruled Northern Ireland as they rule any other part of the United Kingdom the people there might think of themselves more as citizens of the United Kingdom. I said that I did not necessarily agree with all those comments. I was using them to highlight the sense of frustration which exists in Northern Ireland as a consequence of the situation in which the people there find themselves. Northern Ireland Ministers are able, intelligent and imaginative men——
  Mr. Fitt: Who said that?
  Mr. McCusker: That is my experience of them. With the best will in the world, it is unlikely that any acceptable form of government will emerge in Northern Ireland for a substantial time. Is there no way in which the Government can rid themselves of the shackles which obviously confine them at the present time, and produce something more suitable than what we have now? Is there not something more that the Government can do in the interim period to ensure that these citizens of the United Kingdom can see themselves being treated more like citizens of the United Kingdom?
  1.14 a.m.
  Mr. Robert J. Bradford: Direct rule is applied to Northern Ireland in periods of transition. Therefore, this instrument of constitutional control is regarded as a temporary expedient. There can be nothing permanent about such an instrument which was conceived to meet an interim situation. One longs for the end of direct rule, not only because, in essence, it is a temporary arrangement but because, in practical terms, it is a most unsatisfactory method of governing a part of the United Kingdom.
  Northern Ireland needs and deserves the full impact of an interested and involved House of Commons, producing legislation which is born out of a healthy tension of wills and intellect. At this hour of the morning one is less likely to assist Northern Ireland by rubber stamping dozens of orders in council.
  I know of very few people who believe that there is a credible substitute for the constitutional right of having vital issues debated, and legislation formulated, on the Floor of the House, with the Province having its full quota of elected

  865
  representatives all contributing to that process.
  There is almost full agreement on a related issue, namely, that remote rule is totally undesirable. I do not interpret that reaction as relating to the personnel involved in the Northern Ireland Office. Much, rightly, has been said about the industry, concern and integrity of those who have responsibility for governing and administering our Province. Ministers have a most daunting and unenviable task in trying to deal with the tremendous workload, which really requires three times as many people. It is a task which they tackle with commendable determination.
  Neither side in this relationship benefits to the desired degree. With due respect to Ministers, they do not acquire the in-depth understanding of all the issues involved in the social, economic and constitutional problems. It was a most interesting and heartening experience to share a platform with the Minister of State some weeks ago, when he unveiled a plaque at a fine new training establishment. I would want to highlight again and again that kind of achievement, and give credit where it is due. The fact remains that in other areas of responsibility there is not and cannot be—because of the tremendous pressures—the in-depth grasp and understanding which is required. In the Province there is an intuitive reaction to the fact that the machinery of government is too remote and that the Ministers are overloaded.
  Some weeks ago I wrote to the Secretary of State about a most deplorable situation which obtains in the Province, concerning the misappropriation of £134,000. This is money which was originally sent in the form of statutory payments, but which never arrived. There were 9,500 Giro cheques which were never received by the people to whom they were sent. With a regional government, or in a situation of full integration, such an incident would not be tolerated for a month, let alone 12 months, with the duplication of expenditure involved. This could not have occurred in any situation other than that of direct rule.
  I hope to see, sooner rather than later, strong regional government in Northern Ireland. I long to see at least the Kilbrandon quota of Northern Ireland Mem-
  866
  bers in this House. The long-overdue Northern Ireland Committee would be most useful to Northern Ireland Members, in advance of legislation here. Most of my colleagues would join me in noting that the Secretary of State could not have been more mistaken in stating recently, in the media, that the United Ulster Unionists were not interested in or keen to grapple with such issues as the ailing economy in Northern Ireland. The right hon. Gentleman said that because we held out for a debate on the security position in the Northern Ireland Committee before debating anything else. The Secretary of State was absent when it was pointed out that we had asked in vain for a debate on the Northern Ireland situation.
  It is a natural reaction to defend our position by asking this House to realise that the issue which was causing optimum concern at the time when the Northern Ireland Committee was mooted was the security issue in Northern Ireland. This is the issue which remains. It is on a par with any other, including that of the economy, because the economic viability of any part of this Kingdom or any other is totally dependent on constitutional stability and the enforcement of law and order.
  Mr. Merlyn Rees: I know that the hon. Member feels strongly about this. In terms of the security situation, the RUC are almost completely Ulstermen, but security, law, and order are matters for the Floor of the House, like defence and the rôle of the Army. When it comes to matters which were devolved but for which we are now responsible, I take the point that the people of Northern Ireland have greater knowledge. We have not discussed the problem of Harland and Wolff, and all that goes with that. It is wrong that we have not discussed it in the Northern Ireland Committee.
  Mr. Bradford: In the absence of the Secretary of State, it was suggested that we might arrange to discuss the grave economic situation in Northern Ireland, and we have received agreement to this.
  At the beginning of tonight's proceedings my right hon. Friend remarked, rightly, that we wanted to clarify much of the confusion which had grown up

  867
  over misunderstanding and lack of information. The Northern Ireland Committee could have dealt with that quite adequately.
  The Minister of State knows only too well the concern which the Ulster Unionists—I venture to say also the hon. Member for Belfast, West (Mr. Fitt)—have in the ailing economic situation, because he has received multitudinous deputations, representations and approaches from Northern Ireland Members. This is because we realise that direct rule must remain with us for a little longer.
  We ask the Secretary of State for Northern Ireland to accept our gratitude for the great deal of work and effort he has expended in receiving deputations and representations. He, in turn, could accept our argument that the inaugural debate in the Northern Ireland Committee should be on security and that we could then commit to the committee other important issues as they arise. That would increase representation in this House and would assist Northern Ireland to cope with an inadequate and temporary measure, such as direct rule.
  1.24 a.m.
  Mr. John Farr: As the first speaker after the momentous news about the Woolwich, West by-election, and since we are talking about non-controversial matters, I am sure that our happiness will be shared by hon. Members opposite.
  I welcome this order. One hon. Member produced a bundle of documents and said how difficult it was to absorb them, but we have had similar matter from the EEC. Most of the directives and documents which come for us to approve without amendment come as late at night as this.
  The only difference between documents from the EEC and those that hon. Members get from Northern Ireland is that the EEC ones are on double-sided foolscap and are far more numerous. That is something we have to learn to live with.
  The hon. Member for Belfast, West (Mr. Fitt), who spoke about the need for more jobs in Northern Ireland, touched a strain about which all hon. Members feel very keenly. Can he not get the Government to interest them-
  868
  selves more readily in a scheme which I know exists in the EEC headquarters in Brussels? Whether we like it or not, we are in the EEC. For years a scheme has been gathering dust in the pigeon holes in Brussels to make a development area of the area which runs south of the border into the Republic and north into Northern Ireland. The whole area from the east to the west coast would be made into an industrial and agricultural development area to create more jobs. The scheme is there, and Community funds are available.
  It is because of the failure of British and Irish delegates to the EEC to agree on the progress that should have been made in this respect that the scheme has gathered dust for a number of years. However, it is still there and it is still available.
  Rev. Ian Paisley: That scheme would not at present be acceptable to the people of Northern Ireland, because we feel that any development by the EEC should be on a United Kingdom basis and not on a North and South basis.
  Mr. Farr: I am most grateful to the hon. Gentleman for his intervention. I am merely suggesting that instead of being prejudiced against the whole scheme before the details have been examined, delegates from both countries should have the common sense to discuss it to ascertain whether a form of progress can be agreed for the use of Community money to provide more jobs with which no one can disagree.
  The unlikely possibility has been raised of the Convention recommending some form of full integration. It has been said that there are some advantages. One of the advantages of full integration, if it ever came about, would be that the appalling rate of murders and crimes in Belfast, which we were discussing a short while ago, would be reduced considerably. In England and Wales about 89 per cent. or 90 per cent. of known murders are solved. With closer integration, and given the new A Squad which the Minister is now establishing, perhaps backed up by the expertise and knowledge of Scotland Yard and the use of its sophisticated equipment and "know-how", a considerable impact on the problem and considerable assistance to the A Squad would be made.

  869
  Finally, I should like to ask the Minister a question about the Convention. When the Convention result is announced and the findings declared, will those findings eventually be made public? When the recommendations of the Convention are received by the Government, will the Government consider them for a certain time and then, perhaps, present them to the House for debate, together with a Green Paper or a White Paper setting out the Government's recommendations? In other words, shall we have a debate on the Convention's recommendations, or will the Government consider them and then have a debate coupled with a Green Paper or a White Paper?
  I should like to say once again how much I welcome the order.
  1.30 a.m.
  Mr. Carol Mather: I realise that I have few moments left to cover the points I had previously prepared. I want to refer to the Gardiner Report and matters arising from that. As the hon. Member for Belfast, South (Mr. Bradford) said, everything returns to the security situation.
  I have just seen the Secretary of State gesticulating towards me. I am not sure what his signals mean, but I think I get the gist.
  Mr. Merlyn Rees: I was inviting the hon. Gentleman to have his say, because I do not need a lot of time.
  Mr. Mather: That was the answer I was hoping for.
  The Gardiner Report is one of the most important reports we have had out of Northern Ireland. I very much regret to say that its history is a very sorry affair. The report was in the hands of the Government before Christmas. It was published in January. Over a long period we pressed the Government to publish the report, but there was delay after delay. Since January, when the report was published, this is the first real opportunity we have had of debating it. There are many things in the report which we should be debating, and which need urgent action.
  It is a great pity that hon. Members who have made visits to Northern Ireland were not able to give evidence to the Gardiner Committee when it was at work, because hon. Members who frequently go over there and inform themselves
  870
  about the security situation are very well aware of many of the matters which the report raised.
  I am very glad to see that the report deals with the question of those who direct, organise and train terrorists, as distinct from those who actually commit terrorist acts. I am not absolutely clear whether that is covered in the legislation.
  Mr. Merlyn Rees indicated assent.
  Mr. Mather: The right hon. Gentleman indicates that it is covered.
  It is absolutely right that those who go about hooded or masked should now be dealt with. It has been an affront. With parades of paramilitary people flaunting the law, it is high time that this matter was dealt with.
  Another very interesting point which is mentioned in the Gardiner Report is the question of the news media. I think that it was the hon. Member for Antrim, North (Rev. Ian Paisley) who tonight cited the example of a well-known member of the IRA who was interviewed on television. This is a very difficult problem. The Gardiner Report said that this matter involved a "degree of responsibility" on the part of the media, and something of "a spurious glamour". The amount of publicity that members of terrorist organisations are given by being interviewed on television has worried hon. Members for a long time.
  One very revealing part of the Gardiner Report says
  "There can be no question of introducing censorship in a free society in time of peace".
  This is the absolute nub of the problem. We have not grappled with the problem of how to deal with a situation that is short of war—a situation of terrorism. In a war situation one would have censorship and the rules and conventions of war. But in a situation of half-war one has none of these things.
  That means that any country or Government dealing with terrorism in a free and completely open society has a very difficult job. This was amply proved in the case of the Americans in Vietnam and the effect of television on their campaign in this country.
  I am also glad to see that cross-border traffic is dealt with in the Gardiner Report, as is the question of proxy

  871
  bombs. For a long time now, hon. Members who have been to Northern Ireland have been asking for effective action to be taken on cross-border traffic.
  Furthermore, the use of identity cards is not turned down in the report. We have frequently heard that the one thing which would help the Royal Ulster Constabulary more than anything else that could be done would be the universal issue of identity cards.
  I think that the most important part of the Gardiner Report——
  Mr. Merlyn Rees: Will the hon. Gentleman be here tomorrow?
  Mr. Mather: No, but I checked with Mr. Speaker that I should be in order in raising the Gardiner Report in this debate.
  The section on prisons is the most important part of the report. It reveals a highly unsatisfactory situation. I realise that that is not entirely the fault of the present Government. They partly inherited it. The report calls for urgent, emergency action on prison buildings, and I should like to know whether the Government will carry it out. Has any action been taken? In paragraph 9, in the general introduction to the report, the Gardiner Committee says that the most effective protection against terrorism and subversion is
  "the recognition by government that it must act with speed to demonstrate its determination to sustain its authority".
  In the whole history of our involvement in Northern Ireland in recent years it has so often been a matter of too little, too late. So often the action we have taken has been hesitant and faint-hearted. When we face such a situation there is only one thing to do, and that is to convince the terrorists that their defeat is inevitable. Once we have done that, more than half the battle is won.
  1.37 a.m.
  Mr. Merlyn Rees: I agree that, while the debate is on the government of Northern Ireland, the Gardiner Report is relevant, in so far as I am responsible for security in Northern Ireland, and I make no complaint about the remarks that the hon. Member for Esher (Mr. Mather) has made. But the detail will come up in the
  872
  morning. The point the hon. Gentleman mentioned about hooding, and so on, is met in the legislation, and we shall have a chance tomorrow and in Committee to put our minds to it.
  To delay in bringing the legislation before the House is caused not by narrow political considerations but by the complicated nature of the legislation. It is important that we get it right, for those in the security forces in Northern Ireland.
  I shall have something to say about prisons tomorrow. We have carried out the proper procedures for what will be known as the Moy Park Prison in Northern Ireland. Representations have been made by representatives of the UUUC in the House, and they have every right to make them. I am very conscious that consideration of the representations has delayed the building of the prison, but, in a society in which ordinary people are going about their business, to take their land from those people is not something that I would do with an easy conscience. What I have done instead is to have built cellular accommodation on the land we have at the Maze Prison. This has enabled me to overcome the fact that there were delays in planning procedures.
  Under the Northern Ireland Act, the Convention report must be laid before Parliament. I cannot now say what recommendations will be made to Parliament, but the report of the Convention as a whole will come to Parliament.
  The Convention can be extended by up to three months at a time. There is no theoretical limit to the number of three-months' periods by which we extend it under the law, just as with the interim period in the order. If we saw fit, we could extend it for another 12 months in 12 months' time. That is the law, and it is what the hon. Gentleman asked me about.
  With regard to the Common Market, all I can say is that I do not know of any cross-border studies which are covered with dust in Brussels—studies that one could pull off the shelf and carry out, but because we are in the Common Market I have asked my right hon. Friend, who had views about the Market—that is why I thought it would be a very good idea if he had responsibility for the Common Market—to see what we can do under the Market arrangements

  873
  between the United Kingdom and the Government of the South. It is not a matter for Northern Ireland and the Government of the South; it is a matter for Northern Ireland, as part of the United Kingdom. That, again, is the law and not a quirk of my fancy.
  On the question of local government, I do not want to go into arguments which were put long before this administration or the previous one. The Macrory reforms altered the powers of local government in Northern Ireland and put them into the Stormont administration. It is not a case, as someone said, of no responsibility at all. Any hon. Member or right hon. Member from Northern Ireland has the right to raise these issues, because the Minister in this House, working with me, is responsible for all that is done.
  There may be arguments about the number of Members of Parliament from Northern Ireland—we can discuss that at another time—but it is possible for all these issues to be brought to Westminster. Northern Ireland is not without representation. I simply make the point that with 1½ million people and 1 million voters it is a smaller area than the metropolitan county in which I live in Yorkshire. Whatever the arguments in this respect, what hon. Members are putting forward, as I understand it, is an argument for devolved government in Northern Ireland, out of the history of the last 50 years, whatever was wanted in 1922, and when we get these pressures—which I fully understand, without arguing the rfights or wrongs at the moment—it is for devolved government that people are——
  Mr. Powell: It can also be an argument for genuine local government as it is enjoyed in Great Britain.
  Mr. Rees: It could be that, but again, because I think we have to face the reality of Northern Ireland—which I have tried to do on so many issues—all I point out is that within Northern Ireland I find a strong desire for a form of devolved government—and that is what was put at the Convention the other day.
  The point that I am anxious to make is that all 12 Members of Parliament from Northern Ireland have the right to raise in this House all those issues for which I am responsible, with my right hon. and hon. Friends.
  874
  I should like to make one last small point about the orders. They arise out of a former devolution, and the quicker we get a form of government which prevents the 1½ hours' debate the better. But a large number of those orders would not have been debated in the assembly of a Northern Ireland Parliament, because they are orders that are not debated here unless prayed against, so a large wodge does not form the best of arguments. A small wodge would have made the point more fairly. When we have time to debate these things fully, as we shall, the big wodge and the small wodge will fall into place, together with devolved government and integration. In the meantime, we are waiting for a report from the Convention in Northern Ireland. We wish them well. We shall read the report with interest, and the House will debate it with interest.
  The people of Northern Ireland understand Northern Ireland better than do people from the outside, but we have a part to play as part of the United Kingdom and we shall go on doing that.
  Question put and agreed to.
  Resolved,
  That the Northern Ireland Act 1974 (Interim Period Extension) Order 1975, a draft of which was laid before this House on 9th June, be approved.

  STATUTORY INSTRUMENTS
  Motion made, and Question put forthwith pursuant to Standing Order No. 73A (Standing Committee on Statutory Instruments),
  DIPLOMATIC AND INTERNATIONAL IMMUNITIES AND PRIVILEGES
  That the International Whaling Commission (Immunities and Privileges) Order 1975, a draft of which was laid before this House on 10th June, be approved.
  DIPLOMATIC AND INTERNATIONAL IMMUNITIES AND PRIVILEGES
  That the International Organisations (Immunities and Privileges) Miscellaneous Provisions Order 1975, a draft of which was laid before this House on 10th June, be approved.

  ROAD TRAFFIC
  That the Motor Vehicles (International Circulation) Order 1975, a draft of which was laid before this House on 9th June, be approved.—[Mr. John Ellis.]
  Questions agreed to.

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

  MOTORWAY SIGNS
  1.45 a.m.
  Mr. Anthony Kershaw: I wish to call attention to what I believe to be a gross misuse of public funds in an important area of public activity, since it has a bearing upon the life and safety of everyone who uses our public roads—that is to say, everyone in the country. I refer to the Transport and Road Research Laboratory at Crowthorne, and its work on road signs and otherwise. I shall assert that many of the projects, on which are engaged the 1,000 people working there at an annual cost to the public of £10 million, are either useless or positively harmful and/or quite unreasonably expensive.
  It may be noted, first, that an enormous amount of paper is churned out. No doubt with 1,000 people to be kept occupied that is inevitable, if expensive. But the paper reveals the sort of activity in which they are engaged.
  I learn, for example, from TRRL pamphlet LF 483, of March of this year that
  "Investigation has shown that the three environmental parameters which have the most influence on the temperature of a bridge are incoming solar radiation during the day, outgoing radiation during the night, and shade tern perature."
  That is truly amazing, and I do not know how else I could have learned that.
  From pamphlet 454 of February of this year, I learn that
  "Air photographs give a bird's eye view of the site and the surrounding terrain, allowing a greater area to be examined visually than would be possible on the ground."
  Well, well. Just think of that.
  From pamphlet LF 3, also dated February 1975, I find that
  "It has been found that the type of base material and the volume of heavy traffic (expressed in terms of cumulative standard axles) are the two most important factors in determining the size of maximum deflection, or deflection criterion associated with satisfactory long-term road performance."
  876
  That, being interpreted, means that what wears out roads is traffic.
  What can one say about an institution which considers it necessary to spend time on such fatuous and jejune literature?
  Some of the projects are merely silly, such as one which, I am informed, seeks to ascertain the effect of traffic noise on people's nerves by paying them to keep tape recorders of traffic noise in their bedrooms. I gather that the payment varies according to the social status of the person concerned. May I be told that this futile waste will be stopped at once, and how much it has cost so far? If the laboratory wants to know what people think of traffic noise, let its staff ask the first 10 people whom they meet in the street.
  Some projects are, perhaps harmful. For example, laboratory staff have invented a collapsible lamp post. That is all very well for the motorist, but what of the pedestrian? A few years ago in my own town of Stroud, an old lady was shockingly killed. Her head was cut off by a falling road sign which had been knocked down by a motorist who was not himself hurt.
  Harmful also would I judge the decision to reduce skid-resistance specifications, despite the development of a low cost infill material by Dunlop which has a skid resistance of more than twice the original specification and which hardly degrades at all.
  Other experiments seem to me most certainly harmful. For example, work is going on on a radar device which would automatically apply the brakes of a vehicle if that vehicle were to get within a set distance of a reflection ahead. That seems to me like trying to drive a car with my wife grabbing at the handbrake at uncertain intervals. But what are the legal and insurance consequences of a car being suddenly taken out of the control of the driver? Perhaps the Minister will be able to tell us. Why has this experiment been farmed out to Lucas. If Lucas had thought that it was any good it would have obtained enough money to do the job itself. I wonder what the cost has been.
  Yellow lines are now painted across our roads in many places—I presume on the advice of the TRRL. It is known that

  877
  the lines can trigger off an attack of epilepsy. What thought is being given to that?
  I move now to the consideration of two vastly expensive projects. The first is RITA—or route information transmitted annually. That system requires an electronically-switched radio receiver to be fitted to every car, both domestic and foreign. The device receives messages about the route ahead, warning of hazards. These are transmitted by roadside installations and the cost is estimated at about £20 a car and at £192,000 a mile for roadside installations, or, in a few years' time about £400 million for the cars and many more millions to equip only the motorways.
  I think that some questions arise. What about the Welsh? Am I to receive instructions in Welsh-speaking Wales? What about foreigners? What about other traffic noise if it drowns the signal? How shall I pick out the messages which concern me on my route and ignore those which refer to others, perhaps miles away? Electrical systems are prone to breakdown. What happens then? I gather that the TRRL thinks that this system would at first be voluntary, but it hopes that cars equipped with this device will display a sticker, which I suppose might read "This car is equipped with RITA, but if you can read this you are too close". How would we avoid all the cars, dutifully conforming to the RITA car, ending up in its garage? I gather that this system is designed to start in the mid- or late 1980s.
  One of the arguments put forward by the TRRL in favour of RITA is that too much reliance must not be placed upon visual presentations, especially bearing in mind conditions of bad visibility. I do not suppose that anyone would differ from that opinion.
  At the same time the TRRL is nevertheless developing another in-car system, called advance warning equipment, or AWARE. That is a visual system. It has the same kind of expensive roadside installations as RITA, but instead of using the voice it depends upon lighting up panels in a black box carried in the car, which, when illuminated, show "30 mph", "Caution", "Slow Down", and so on. It would be necessary to take our eyes off the road to consult it. I, for
  878
  one, would have to put on my reading glasses to see it. When I recently inspected it I noticed that there were no fewer than 27 panels on the box which could light up, but that none of them showed the words "danger" or "stop", presumably on the supposition that by the time we had read it, it would be too late.
  Both those systems are a gigantic waste of money. Even if I am wrong, they will not be with us for 10 years. In the meantime, not enough is being done to mitigate the danger and slaughter on our roads.
  I make no apology for insisting that a trial should be made of a device called Rolines, invented not in TRRL but by a private person. The details are well-known to the Minister. The device consists of steel bars inserted across the carriageway which can be rotated by remote control and which can, by visual means and by contact such as one has by passing over cat's eyes in the road, give warning of hazards ahead, channel traffic to different lanes and regulate speed. It is a signalling system such as the railways have had for 130 years.
  Rolines are far cheaper than the systems I have just discussed, they apply to all vehicles and not merely to those fitted, do not depend upon language, do not distract the driver from the road ahead and can easily be tested on a short stretch of road without immense expense. But the Rolines device has one great defect. It was not invented at TRRL—it is NIH, not invented here. When first submitted to TRRL it was rejected by return of post, perhaps rightly, but who knows if it is not tested?
  When I contemplate the slovenly standard of much of TRRL's work, when I see what vast sums are being planned to be spent on systems of which I have grave doubts, I think that the Minister should cause an inquiry to be set up into the value which we are getting for our £10 million a year, and that he should consider whether Rolines ought to be tested.
  1.56 a.m.
  The Under-Secretary of State for the Environment (Mr. Neil Carmichael): I apologise to the hon. Member for Stroud (Mr. Kershaw) for being a few minutes late. I was taken unawares by the abrupt finish of the previous debate. I have

  879
  listened with close interest and attention to the arguments the hon. Gentleman has put forward on this intricate subject. What strikes me most is how important it is not to blind ourselves with science as we consider the relative merits of the various systems now open to pursuit.
  First, therefore, I should like to make some simple points. We have about 1,000 miles of motorway, which are being progressively equipped with a system of signals giving a limited range of advice and instruction. This system is already installed on just under half of the present motorway network. The signs provide advice on safe speeds, give information on lane closures, point in advance to the need to change lanes, warn of need to leave the motorway where necessary, and on occasion direct vehicles to stop. On sections where traffic is heavy, the signals are on gantries, with one sign over each lane, and at intervals of 0·5 to 1 km. Where traffic is lighter, they are at 3 km intervals, mounted on posts in the central reservation.
  This is a valuable "first generation" system, but it could probably be developed further. Lying behind what the motorist sees is a system for acquiring detailed information about accidents, incidents and changes in driving conditions, such as reduced visibility or the presence of ice. Decisions have then to be taken about what advice or directions to give in the light of this information; and the effectiveness of the system is also governed by the speed and accuracy with which the advice or directions can be transmitted.
  Current research is directed towards establishing what room for improvement there is in all these aspects of the system, how this might best be achieved, and whether it would make sense to try to communicate more than we do now. If we could say more—for example, by indicating the reasons for any advice, or by adding advice on routeing to avoid delay—we believe that motorists would respond better, and comply more often with the advice offered. This could be expected to raise the general standard of driver behaviour on high-speed roads.
  There are various possibilities open for achieving these ends. The hon. Member believes that the Rolines system is a highly promising solution, which ought
  880
  to be actively pursued. He has little sympathy for the two in-vehicle systems which the Department is currently exploring, and thinks that we are wasting public money by working on these. He invites us instead to spend money—a considerable amount of it—on installing and testing Rolines on a trial length of road.
  Let me look, first, at our own work. A considerable proportion of this is directed towards the possibilities for a more effective system through studies of the frequency and character of motorway incidents, the type of data needed for control and information, methods for rapid detection of incidents and accidents, and control strategies. We are also currently working towards demonstrating the technical feasibility of three specific types of communication systems.
  One of these is an improvement of the present type of variable external sign, which would provide additional information, particularly by supplying reasons for any advice or direction given. This improved system would, for example, indicate that fog or ice was the reason for advising slower speeds, and would show the distance ahead of the hazard in question. In short, this system could impart a wider range and combination of messages. We estimate that this would add about £5,500 per mile to the cost of installing the system to which are already committed. The latter is about £14,500 per mile, so that the additional expense needed to secure the improvements described is of the order of one quarter.
  The second system is AWARE—Advanced Warning Equipment—to which the hon. Gentleman referred. This in-vehicle visual system would consist of a dashboard-mounted panel in each vehicle, which would be illuminated to show one of a variety of messages. The activating signal would be received via a wire loop embedded in the road surface. This system could provide a wider variety of messages than would be feasible with external signs and, if adopted internationally, would provide display in the driver's language with no additional cost. It is seen to have potential for the routeing of vehicles as well as for motorway control systems. The cost to the vehicle owners would be about £15, and the costs of such electronic devices are tending to decrease in real terms. The road installation costs would be about

  881
  £3,000 per mile as an addition to the present motorway signalling system.
  Third, there is RITA—Road Information Transmitted Aurally—to which the hon. Gentleman also referred. This in-vehicle aural system would require vehicles to be fitted with a device similar to a car radio. This would pick up messages from a roadside transmitter consisting of either a wire loop in the road surface, a cable, or a single roadside transmitter. The cost of the receiver would be less than £10, and the cost of the road installation over and above the systems of signals already being installed on United Kingdom motorways would be about £5,000 per mile.
  In recent years we have been spending at a limited rate on all this research work, involving nine research staff on the three systems already described, six more on the broader aspects of system problems to which I have also referred and, last year, £20,000 of external contract work. All three communications systems have been successfully taken to the stage of laboratory demonstration, and their operational feasibility and value could now be put to the test if we were prepared to move into the development stage.
  The degree of effort and expense we have incurred so far seems to me entirely appropriate. We have also been in close touch with European effort in these areas, in an organisational framework which embraces both the European Economic Community and other European States. This is known as COST. The group in which we are working is concerned with evaluating the need for improved communications systems, sees considerable advantage in establishing European standards, and has identified the three types of systems I have already described as being those which merit further study. There is already close contact at technical level, and consideration is also being given to proceeding to a jointly financed public demonstration of developed examples. No decisions on this have, however, as yet been taken, and the Department's policy on the extent of the development work we shall pursue in this context has still to be settled. The research we have done so far will enable us to decide which of these systems should be pursued to the point where they could be operationally tested. We are currently think-
  882
  ing carefully, in consultation with our European partners, about all these problems.
  Against this background, I now turn to Rolines. The hon. Member has argued that the Department has dismissed this too lightly. He has also been critical of the way in which Mr. Fitton-Kearns' ideas were received and considered. Let me take the second question first. The hon. Gentleman has been in touch with successive Ministers on the subject since June 1972 and I have twice written to him explaining why the Department has not been prepared to take further action on this system. I think it will suffice if I now make two points only.
  First, in reaching their decision previous Ministers—Ministers in more than one administration—were advised not only by the Transport and Road Research Laboratory but also by officials concerned with road safety and highways policy. Secondly, the Parliamentary Commissioner for Administration investigated a complaint about the Department's handling of the Rolines system and concluded that the Department had given the complainant's proposals full and fair consideration, and Ministers took the decision not to authorise further allocation of resources to its study or development after carefully examining the results.
  The other question is whether we dismissed the system too lightly. The hon. Member has already described its working, and I need do no more than remind the House that it consists of rollers set into the road at regular intervals, which can be rotated to provide humps of varying height and hardness, in order to encourage reduction of speed.
  The technical reservations the Department has about this system are substantial. First, it is true that in some circumstances the Department supports the use of artificial humps to limit speed: but these are thought appropriate only on low-speed roads, and their profile needs to be very much longer than is possible in the Rolines system. The Department's experiments with humps of comparable dimensions to Rolines showed that these produced widely different effects and reactions from different vehicles. Such humps also tend to affect the driver less as speed increases; and

  883
  I must also strongly stress the Department's view that there is a risk that the Rolines system might even cause accidents in some circumstances. It has also been suggested that Rolines would serve as an advisory system. It will, however, be clearly apparent to the House that Rolines could not provide as much readily understandable information as the existing external visual system—let alone as much as could any of the possible new systems which are being studied by the Department.
  There must also be doubts about the reliability of a moving device such as Rolines, which has to withstand the pounding of heavy motorway traffic, and must not become inoperable, or jammed in the raised position. The servicing of such a device on a motorway would also cause very serious problems.
  The hon. Gentleman said that electrical failures were possible. Here we have a combination of electrical remote control based on mechanical apparatus operating in all conditions and in all weathers, and frequently on busy motorways reaching capacities of about 100,000 vehicles per day. The question of repairs in such a
  884
  situation has only to be imagined to make the difficulties obvious. Above all, there is the question of costs. A recent Press article quotes Mr. Fitton-Kearns as saying that the installation of Rolines would cost about £100,000 per mile. The House will recognise that this is greater by a factor of five than the costs to the public purse of any of the other three options I have described—none of which is at present estimated to be greater than about £20,000 per mile. This former figure is far more than we could justify by any net benefits from accident prevention, or in any other terms, which it could conceivably provide.
  I have considered all these factors carefully. I assure the hon. Gentleman that I am not merely accepting the views of the Road Research Laboratory or even the views of the administrators in the Department. I have considered these matters extremely carefully. I can see no case for reopening the matter of Government support.
  Question put and agreed to.
  Adjourned accordingly at nine minutes past Two o'clock.

  AUSTRALIAN PRIME MINISTER
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OVERSEAS DEVELOPMENT
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WALES
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  Factories

Preamble
The House met at three of the clock: The LORD CHANCELLOR on the Woolsack.
Prayers—Read by the Lord Bishop of Oxford.
The Lord Rodney—Sat first in Parliament after the death of his father.

MOZAMBIQUE: AID PROGRAMME
Earl COWLEY: My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government whether they will make a statement on Britain's aid programme to the newly independent State of Mozambique.
Baroness LLEWELYN-DAVIES of HASTOE: My Lords, Her Majesty's Government hope that discussions will be held as soon as possible with the Government of Mozambique which achieved independence yesterday. I am sure the whole House will join me in wishing the people of Mozambique a happy and prosperous future.
Earl COWLEY: My Lords, while thanking the noble Baroness for that Answer, and while wanting to join her in her good wishes to Mozambique for the future, may I ask her to say what amount of aid the Government are considering giving to Mozambique? Is the reported figure of £20 million correct? As it was the decision of the Commonwealth Heads of Government to assist "an independent Mozambique in applying sanctions" against Rhodesia, have any other Commonwealth countries made any aid contributions to Mozambique, or is Britain the only Commonwealth country which has made commitments in real terms?
Baroness LLEWELYN-DAVIES of HASTOE: My Lords, perhaps the impetuosity of youth has rather overtaken the noble Earl, because the Mozambique Government there have been the Govern-
1558
ment for only one day. Discussions entered into with Frelimo—whom we all thought would be the Government and are the Government—went a long way, but of course they cannot be binding on a fully independent Government. Therefore, I should not like to discuss any figures. Positive suggestions have been made, and I am quite sure that discussions are going on with other Commonwealth countries. But they, too, would find it quite impossible to commit the Government of Mozambique without having had full discussions, and I think that really sums up the position.
Lord LOVAT: My Lords, when the noble Baroness wishes Mozambique a happy future, would she care to add "and a democratic one"?
Baroness LLEWELYN-DAVIES of HASTOE: Certainly, my Lords.
Earl COWLEY: My Lords, as the noble Baroness has not given any figures, may I ask her to give an assurance that any aid given to Mozambique will not necessarily mean drastic cuts being made in the existing aid programme from this country to other countries?
Baroness LLEWELYN-DAVIES of HASTOE: Yes, my Lords. As the noble Earl will know, any aid we give them comes within the general overall programme of aid, but I do not foresee drastic cuts as a result.
Lord HAWKE: My Lords, is the Minister aware that for every penny we give overseas we are now having to borrow from someone else overseas?
Baroness LLEWELYN-DAVIES of HASTOE: That may well be true, my Lords. But I must point out that, in any case, the first part of the aid for Mozambique will be programmed aid, and will pay for goods and services from this country.
Lord CARRINGTON: My Lords, I am sure that the noble Baroness will not accuse me of the impetuosity of youth. Nevertheless, will she say what she meant by the last answer to my noble friend? Are there or are there not going to be cuts?
Baroness LLEWELYN-DAVIES of HASTOE: My Lords, I would not accuse the noble Lord of the impetuosity of

1559
youth, but I occasionally find him impetuous. As he perfectly well knows, the programme of aid has been passed in another place. He knows what cuts were made and he can make his own deductions from that.
Lord CARRINGTON: My Lords, that was not my noble friend's supplementary question. He asked whether, if aid is given to Mozambique, it will mean some other people getting less.
Baroness LLEWELYN-DAVIES of HASTOE: My Lords, if one has a cake and makes certain cuts in it, it is then apportioned as one thinks best, and the judgment of this Government in their apportionment of aid is far better than any other Government I have ever had anything to do with.
Earl COWLEY: My Lords, may I ask the noble Baroness to say when she will be in a position to give the House the necessary figures?
Baroness LLEWELYN-DAVIES of HASTOE: After the proper discussions have taken place with the Government of Mozambique, my Lords.

WHISKY DUTY AND THE ISLAND OF ISLAY
3.11 p.m.
Lord BELHAVEN and STENTON: 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 the total revenue per annum obtained by the Excise authorities from the whisky industry in the island of Islay has been over the last three years for which figures are obtainable.
Lord JACQUES: Duty is paid on release of whisky from bond. Whisky from Islay is mainly sent to bonded warehouses on the mainland for blending with other whiskies. Since no differentiation between the sources of blended whisky is made when duty is paid, it is not possible to say how much is attributable to the island of Islay.
Lord BELHAVEN and STENTON: My Lords, I thank the noble Lord very much for that profoundly disappointing
1560
reply which I am sure will be received with disappointment by the island of Islay. Can he possibly indicate whether, with a little more research, Her Majesty's Government would be able to give a more definite reply? Would he indicate whether Her Majesty's Government expect the amount of Excise revenue on whisky to increase in view of the recent increase in tax, and have they any idea of the effect on employment in the whisky-producing areas as a result of the tax announcement in the recent Budget?
Lord JACQUES: My Lords, about four-fifths of our whisky production is exported free of duty and it is not possible to say haw this proportion varies among the constituents used for blending. I therefore cannot give an estimate. As for employment, I think it is in accordance with experience that when a duty on a product is raised and the price is raised in consequence, for the time being there is a slackening off of demand, but subsequently it levels off and there is often an increase. I do not think that my right honourable friend was harsh with the duty on alcohol; if, for example, one takes the rate of duty as at April 1970 and maintains that in real terms, then the increase in the price of whisky would not have been 64p per bottle but 120p.

TICKET BOOKING CONDITIONS
Baroness BURTON of COVENTRY: 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, as air travellers in possession both of flight confirmation and the relevant ticket are unable to assume that these are valid although paid for, such booking conditions apply to theatres, trains and other "booked" activities; and whether they will make a statement.
Lord JACQUES: My Lords, it is quite usual for those contracting to supply services at a future date to provide for the possibility that they may be unable to do so. Holders of air, rail, bus, boat and theatre tickets all face the possibility that the journey, or performance, they have booked and paid for may be deferred or

1561
cancelled. This is something we can consider in relation to the recommendations of the Law Commission in its forthcoming Report on exclusion clauses in contracts.
Baroness BURTON of COVENTRY: My Lords, that is a disgraceful reply from a Minister representing the consumer side of Government. Could the Minister for once contemplate some action instead of deferring it, or waiting for a report? Is the Minister aware that if one books a seat in a theatre and has paid for it, and one does not go to the theatre, the seat remains empty throughout the performance?—one has paid for the seat. Is the Minister also aware that if one gets a ticket on a train one can have the pleasure of standing if there are no vacant seats? Is he really telling the British public that any tickets they buy for anything may not be valid when they turn up to use them? Is that what he is saying?
Lord JACQUES: My Lords, I hope that we will get this problem in its proper perspective. First, I should like to comment on the question of trains, theatres and air tickets. In the case of the theatre and trains, if you reserve a seat and do not take it up you do not get your money back. But in the case of air travel where there is no "show up" you get the whole fare refunded. You must consider both ends. The Government position is that we are not prepared to panic on this question, for the following reasons. First, it is already being considered by three bodies. As I told my noble friend on Tuesday, the Trade Descriptions Act is being reviewed by an inter-Departmental Committee. Secondly, I told her today that this is a matter which can be considered by the Law Commission in connection with exclusion clauses in contracts. Thirdly, as a member of the Airline Users' Committee she herself knows that this is a matter which has been referred to the Civil Aviation Authority, and it is considering it in conjunction with the airlines. Those points comprise the first reason why the Government are not prepared to panic.
The second reason is that this has gone on for years, and it is not something over which one ought to panic. Thirdly, the figures are very interesting. From October 1972 to October 1973 the figures for
1562
British Airways Overseas Division were as follows: 1·3 million passengers were carried; 141,000 passengers—that is more than 10 per cent.—got their money back because they did not travel. The number who were not carried on the plane on which they were booked was 274 or 0·02 per cent.
The final reason is, it is obvious that if there is a change in this practice there will be a cost and somebody has to pay that cost. It may well be that passengers would prefer the present arrangement, rather than have increased fares or a penalty if they cancel their flight.
Baroness BURTON of COVENTRY: My Lords, is the noble Lord aware that I have much more confidence in myself than in any of the bodies he mentioned? Does he realise that he has got hold of the wrong end of the stick? He has told us about passengers who do not turn up getting their money back. I am concerned about passengers who do turn up, do not get their seats and do not get their money back. The noble Lord has already answered my questions for next week—but I knew that the figure was 274. Is he really telling the House that the situation in which 274 people who had booked their seats, who had paid for them but did not get them, is one which must continue until somebody, in the dim and distant future, recommends possible action?
Lord JACQUES: My Lords, three matters were raised in that supplementary question. First, the noble Baroness said that she had more confidence in herself than in any other bodies. I should have been surprised if she had not. Secondly, she said that we should be alarmed because a number of people have not been able to get their seats. This is happening not only in this country but in every other country of the world. All countries have the same system. If we start changing our system in panic, and we increase our fares, or we have penalties for cancellation, we should put ourselves out of competition. This is a coin with two sides. Let us look at both sides—which takes time. I did not refer to the "distant future ". Indeed, one of the committees has been asked to report before the end of the year, and I am quite sure that the Civil Aviation Authority will be making up its mind before the

1563
end of the year—and that is not the dim and distant future!
Lord ORR-EWING: My Lords—
Baroness BURTON of COVENTRY: My Lords, I shall leave this matter for other noble Lords to pursue in a moment, but may I ask the Minister whether he is aware that I think his reply is a disaster?
Lord ORR-EWING: My Lords, does the Minister agree that it is surely a rather strange point that, because this has gone on, it should be allowed to continue? Would not fares, which have been going up very abruptly recently, be cheaper if there were not this number of "no shows", because people who wished to book could be placed on the aircraft? It is really ridiculous that you can book at no cost to yourself, not turn up, and then get your money back. You are thereby depriving someone who wishes to travel on urgent business, and the whole paraphernalia of administrative payback and the rest must add to the cost. If the rest of the world is doing this, I think it is a scandal that it should go on. Could not we, as an enlightened nation and as one in the forefront of civil aviation, take the lead in saying that, just as in other ways, if a passenger does not turn up and has paid for his ticket, he forfeits the ticket, so that there would then be an opportunity of cheaper fares for all because we should not be wasting that money?
Lord JACQUES: My Lords, the remedy suggested by the noble Lord is, to my knowledge, being considered by one of the bodies I have mentioned. It is the job of that body. Let us leave it to that body to do it. That is what we pay it for.
Baroness WOOTTON of ABINGER: My Lords, is my noble friend aware that answering this Question primarily in terms of trains, theatres or aircraft which are cancelled is one thing and it may be unavoidable; but that it is different from booking a seat and finding it sold to somebody else, which I think is what happened?
Lord JACQUES: My Lords, I agree that it is quite a different thing; but I come back to the cost which must be met in some other way. We have properly constituted bodies for seeing whether
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there are alternative methods for putting the cost somewhere else, and I suggest that we leave it to them to work this out. That is why they are appointed.
Lord KENNET: My Lords, if it is the case that only 0·02 per cent. of ticket holders do not get on, should we be too worried about a 0·02 per cent. increase in the price of tickets?
Lord JACQUES: My Lords, I am not sure that I can wholly accept the noble Lord's mathematics. I should need to have notice upon what would be the effect on fares; but that is a possibility which has been borne in mind in the same way as whether or not there should be a penalty for cancellation.
Lord BROCKWAY: My Lords, may I ask the Minister whether one of the difficulties here is, as he said, there are three different committees and commissions considering this matter? In order that early decisions can be reached, would it not be desirable that there should be some co-ordination and over-authority of these three separate organisations?
Lord JACQUES: My Lords, they are not all considering merely this matter. The inter-Departmental Committee is considering it in the context of the Trade Descriptions Act, and this is only a very minor part of it. The Law Commission is considering it in relation to exception clauses—again this is a very small part of it. In the case of the Civil Aviation Authority, it is dealing with this specific problem; and it is from there that we should expect a result soon.
The Earl of DROGHEDA: My Lords, is the noble Lord telling us that because foreign airlines have this principle of over-booking we must conform to that system? Is it not well-known that in Italy people book on a number of days when they do not really have any serious intention of flying? Is the noble Lord aware that while in Italy it is absolutely all right to over-book, otherwise the airlines would be only three-quarters full on many occasions, there is in this country a far less irresponsible attitude towards this matter?
Viscount HANWORTH: My Lords, would not the Minister agree in making the calculation of what is at stake, that the 10 per cent. who are not taking up

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tickets and have booked, is roughly the amount one has to bargain for if one is going to ensure that we are not going to use any over-booking at all?
Lord JACQUES: My Lords, I am not sure that I get the gist of the question. I would say that if a penalty were made for cancellation in order to ensure that seats when booked could be wholly guaranteed, we might be putting ourselves out of competition with those airlines which do not impose a penalty for cancellation.

EAST GERMANY: COMPENSATION TO NAZI VICTIMS
3.24 p.m.
Lord JANNER: 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 is the present position with regard to the payment by the German Democratic Republic of compensation to the victims of Nazi persecution for personal injuries and loss of property sustained by those victims.
The PARLIAMENTARY UNDERSECRETARY of STATE, FOREIGN and COMMONWEALTH OFFICE (Lord GORONWY-ROBERTS): My Lords, the Foreign Compensation Commission is conducting a registration of British claims to property in the German Democratic Republic. We have made it plain that we consider that the GDR have also a moral obligation to make good, as far as it can be done, the wrongs suffered as a result of Nazi persecution.
Lord JANNER: My Lords, I thank my noble friend for that reply and for the energetic way in which this matter has been pursued up till now by him and his colleagues. Does he not consider that there should be further immediate action in respect of compensation for the injuries sustained because of the horrible, terrible deeds committed on victims by the Nazi régime before they all die out, or even before their successors die? Is it within my noble friend's knowledge that the USA have, or are about to have, some arrangement made in respect of this matter, in so far as personal injuries to the
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victims are concerned? Would he be good enough to consult with the USA and other nations concerned, with a view to this very serious matter being dealt with without delay?
Lord GORONWY-ROBERTS: My Lords, Her Majesty's Government are aware of the need for due speed in attending to this matter. It must be done very carefully, and for that reason the Commission is inviting cases for registration which we hope will be completed in the course of the next few months. Thereafter, as soon as possible, substantive negotiations based on that information will be arranged with the Government of the GDR. There is no delay in this matter, however impatient many of us are about the constant need to assemble the right information. On my noble friend's second point, we are in continuous and close consultation with other countries, including the USA, who have a similar interest and concern to ours.
Lord SUDELEY: My Lords, may I ask the Minister whether he will agree that, although the substance of the question may be the concern of the German Democratic Republic, it is not the concern of Her Majesty's Government?
Lord GORONWY-ROBERTS: My Lords, I am not quite sure that I have got the gist of the noble Lord's question. May I say that I shall examine it in depth in Hansard tomorrow?
Lord JANNER: My Lords, while thanking my noble friend for the reply he has just given, may I ask whether it is not a terrible thing for anyone to suggest that compensation in respect of this matter should not be paid to those who were attacked by the Nazis in such a bestial way, and should not the world take the matter up and see to it that they are properly compensated?
Lord GORONWY-ROBERTS: My Lords, my noble friend and the House are aware that Her Majesty's Government take the other view. We have made it clear to the Government of the German Democratic Republic that we wish them to consider their moral obligation in regard to victims of persecution. The other element in the question—namely, compensation for sequestration of property—will be discussed, and it has been agreed by the GDR that it shall be discussed. On that

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score, my noble friend may rest assured. We will continue to endeavour to persuade the GDR to be as humane and generous towards the victims of persecution as the Federal Republic of Germany has already been in this matter.

RECESS ELECTIONS BILL [H.L.]
The LORD CHANCELLOR (Lord Elwyn-Jones): My Lords, I beg leave to introduce a Bill to consolidate the enactments relating to the issue of warrants for by-elections when the House of Commons is in recess, and to repeal, as unnecessary, Section 106(2) of the Bankruptcy Act 1914. I beg to move that the Bill be now read a first time.
Moved, That the Bill be now read 1a—(The Lord Chancellor.)
On Question, Bill read 1a, and to be printed.

SALMON AND FRESHWATER FISHERIES BILL [H.L.]
3.30 p.m.
The LORD CHANCELLOR: My Lords, I beg to move that the House do now resolve itself into Committee (on Recommitment) on this Bill.
Moved, that the House do now resolve itself into Committee (on Recommitment)—(The Lord Chancellor.)
On Question, Motion agreed to.
House in Committee (on Recommitment) accordingly.
[The EARL OF LISTOWEL in the Chair.]
The CHAIRMAN of COMMITTEES (The Earl of Listowel): This Bill has been amended by the Joint Committee on Consolidation Bills. There are further Amendments to be moved in Committee this afternoon and I will therefore go through the Bill in the usual way.
Clauses 1 to 14 agreed to.
Clause 15 [Power of water authority to use gratings etc. to limit movements of salmon and trout]:
The LORD CHANCELLOR The LORD CHANCELLOR moved Amendment No. 1:
Page 11, line 1, leave out ("made by the water authority").
The noble and learned Lord said: This highly technical Amendment deletes an unnecessary phrase from Clause 15(2)(b). Clause 15(2) creates a number of offences. They all relate to gratings placed in water channels by water authorities. The power of water authorities to place such gratings is contained in Clause 15(1). The offence under Clause 15(2)(b) consists of removing a grating or part of a grating—I suppose in the hope that the salmon or trout might be diverted to some private waterway. But the paragraph provides that this shall not be an offence
"during any period of the year during which under a by-law made by the water authority gratings need not be maintained".
By virtue of paragraph 14 of Schedule 3, all by-laws under the Bill, with one exception, are made by water authorities. The exception is that by-laws for the purposes of Schedule 1 (as to close seasons and close times for fishing) may be made by the Minister of Agriculture if the water authority are in default. But the by-laws mentioned in Clause 15(2)(b) are made by virtue of paragraph 27 of Schedule 3. Under this paragraph, bylaws may be made for
"determining for the purposes of this Act the period of the year during which gratings need not he maintained".
Since these by-laws must in all cases be made by the water authority, and not by the Minister, the words,
"made by the water authorty",
which the Amendment proposes to delete, are unnecessary. I beg to move.
On Question, Amendment agreed to.
Clause 15, as amended, agreed to.
Clauses 16 to 40 agreed to.
Clause 41 [Interpretation]:
The LORD CHANCELLOR The LORD CHANCELLOR moved Amendment No. 2:
Page 27, line 4, leave out from ("1963") to end of line 5.
The noble and learned Lord said: This again is another piece of technical perfectionism. Clause 41 is the interpretation clause. This Amendment appears in the definition of "inland water". That definition reads as follows:
"' inland water' has the same meaning as in the Water Resources Act 1963 and any reference in this Act to an inland water includes references to part of an inland water."

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The definition is reproduced from Section 14(1) of the Salmon and Freshwater Fisheries Act 1972. It refers to the Water Resources Act because that Act provides a basic code, and the definition in it is well known to those concerned with the administration of fisheries. But the Water Resources Act definition itself contains the words which the Amendment proposes should be omitted from the Bill. There is no need to set them out in Clause 41, simply because the whole of the 1963 definition is attracted for purposes of the Bill. I beg to move.
On Question, Amendment agreed to.
Clause 41, as amended, agreed to.
Remaining clauses and Schedules agreed to.
House resumed: Bill reported with further Amendments.

NEW TOWNS BILL
Lord MELCHETT: My Lords, I understand that no Amendments have been set down to this Bill, and that no noble Lord has indicated a wish to move a manuscript Amendment or to speak in Committee. Therefore, unless any noble Lord objects, I beg to move that the Order of Commitment be discharged.
Moved, That the Order of Commitment be discharged.—(Lord Melchett.)
On Question, Motion agreed to.

POLICYHOLDERS PROTECTION BILL [H.L.]
3.36 p.m.
Lord WINTERBOTTOM: My Lords, I beg to move that this Bill be now read a third time.
Moved, That the Bill be read 3a.—(Lord Winterbottom.)
On Question, Bill read 3a.
Clause 16 [Companies in financial difficulties: transfer of business, etc.]:
Lord PEDDIE Lord PEDDIE moved Amendment No. 1:
Page 16, line 38, leave out subsection (8) and insert—
("(8) The Board shall not take any measures in pursuance of subsection (3) or (4) above for the purpose of safeguarding
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any policyholders of a company in financial difficulties who are eligible for protection under this section, if those measures involve the incurring of expenditure by the Board other than by way of administrative expenses, unless—

(a) the Board have referred to an independent actuary every long term policy of the company which was a United Kingdom policy at the relevant time, and under which it appears to the Board that the benefits provided for are or may be excessive in any respect, having regard to the premiums paid or payable and to any other terms of the policy;

(b) the actuary to whom any such policy is referred under paragraph (a) above has made to the Board a report in writing stating, with respect to any of the benefits provided for under the policy, whether or not in his view the benefit or benefits in question are excessive, and recommending, accordingly, whether or not for the purposes of paragraph (ci below and sum which might have become payable by the company in acocrdance with the policy should be treated as reduced or (as the case may be) disregarded;

(c) the taking of any measures by the Board to secure or facilitate any transfer of long term business under the provisions of subsection (3) above, or the giving of any assistance by the Board to enable the company to continue to carry on long term business under the provisions of subsection (4) above, is conditional on the terms of the transfer or (as the case may be) the arrangements for the continuation of the business providing for the benefits payable under all long term policies so transferred or continued to be reduced to 90 per cent. o fthe sums which might have become payable by the company in accordance with the policies if they had not been so transferred or continued, any such sums being treated as reduced or (as the case may be) disregarded in accordance with the actuary's recommendation under paragraph (b) above, and providing also for any future premiums payable under all long term policies so transferred or continued to be reduced to 90 per cent. of the future premiums which would have been payable in accordance with the policies if they had not been so transferred or continued; and

(d) the Board are satisfied that it would not cost them less to take whatever measures may be required for the assistance of the policyholders in question under sections 6 to 11 above in the event of the company's going into liquidation.")

The noble Lord said: My Lords, the Amendment that stands in the names of my noble friends and myself is rather lengthy, but we make no apology for introducing it at this Third Reading. The House has had before it the Policyholders Protection Bill and I think the House has demonstrated its capacity for

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detailed consideration in the manner it has dealt with this Bill. Yet, even at this late stage, there ate a number of aspects of the Bill which are deserving of reconsideration, and it is for that reason that we put down this Amendment. It is an Amendment to a lengthy new clause introduced by the Government at the Report stage, and was set down one day before that stage. My noble friend and I put down an Amendment at that time, but we felt that there was need for further consideration and we agreed to its withdrawal in order that further consideration and further discussions should take place. My noble friends and I, in putting down these Amendments, have allowed this House and the Government Front Bench to have detailed consideration of all the points that we wish to introduce. We have subjected all our arguments to the most detailed scrutiny. I emphasise that because I recognise that in dealing with a Bill of this description, which is highly technical, it is more than likely that the difficulties of the technicalities can, if they are not fully appreciated, obscure a decision that could make for inequity.
We withdrew the Amendment on the previous occasion and the one which now stands before the House is almost identical. But since then the Life Offices Association, and the Associated Scottish Life Offices—the trade associations which represent the life assurance companies—have indicated their support for the argument which we are advancing. In addition, the trade unions which represent the insurance employees have also indicated their support for our point of view. Paragraph (d) in this Amendment has the same effect as subsection (8) in the Bill, but paragraphs (a), (b) and (c) are new. Paragraphs (a) and (b) are similar to Clause 12 and paragraph (c) is similar to Clause 11 of the Bill. Clauses 11 and 12 of the Bill apply on the liquidation of a life assurance company, and my Amendments would make similar provisions apply on the rescue of a failed life assurance company.
In order to explain this Amendment, it is necessary for me to review briefly the history of the original Clause 16, which was strongly opposed in this House both at Second Reading and at the Committee stage. It was opposed by the industry and
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by the unions, because it merely empowered and did not oblige the Board to mount rescues. It was anticipated that the pressure for rescues would be so great that they would become inevitable in every future case of an insurance company failure. The clause was rejected at the Committee stage. At the Report stage, the Government introduced the present clause which is similar to the old one, but with the important difference that subsection (8) of the present clause provides that the Board shall not incur expenditure to facilitate a rescue if it appears to them that it would cost them less to allow the company to go into full liquidation and incur the cost of operating the guarantee arrangements. Nobody can find serious objection to that. It is the implications of that decision that I want to deal with.
In the case of general insurance—that is, insurance other than long-term insurance—it is not possible to conceive of any circumstances where it would appear to the Board that a rescue would cost them less than liquidation. Therefore, the terms of subsection (8) apply only to life assurance companies, for the reason which the Front Bench know quite well and which anyone connected with the insurance industry will also know. Circumstances could make it appear that rescue would be cheaper, even with no reduction in the policies. Once a life insurance company has been rescued, there is no way of telling whether liquidation would have been cheaper.
The rescue of a failed life assurance company without reduction of benefit, when it appears to the Board that it would be cheaper, might seem a satisfactory solution. I have already emphasised that. The policyholders would suffer no loss, and the policyholders in other companies would pay less than if the company had gone into full liquidation. But the benefit of the preservation of the tax reliefs and the avoidance of the high expenses of liquidation would have gone almost entirely to the policyholders of the failed office, who would have received 100 per cent, guarantee instead of 90 per cent. guarantee. In my view, and in the view of my noble friends and of the life assurance industry, a fairer arrangement would be for the policy benefits in the failed company to be scaled clown to 90 per cent., and for excessive benefits also to be scaled down on the same basis as

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indicated in Clause 12 of the Government's Bill. This would be part of the arrangements under which the Board provided financial assistance in order to arrange a rescue. Financial assistance from the company which would be called upon to contribute would be less.
Let me give an example. If the assets of a failed company, including the present value of the future tax reliefs, were estimated to cover 85 per cent. of the liabilities—and it would have to be a very bad insolvency to be worse than that—then the cost of the rescue, with policies scaled down to 90 per cent., would be equal to 5 per cent. of the original liability; whereas the cost of a straight rescue without this scaling down would be 15 per cent., or three times as much. So the operation of the Bill as drafted could involve the insurance companies in contributions three times greater than they should be, based upon truly equitable considerations.
There is no doubt that a rescue is the best way of dealing with the situation. It preserves the tax reliefs, saves the wasteful expense of liquidation and enables the policies to be continued. I know that the industry would welcome rescues as a legitimate mechanism, and I do not think it would be found wanting in giving every assistance. But the industry, and the trade union representing the men who are working in the industry, object to rescues where the benefits of the failed company are not scaled down. They consider it unfair to the policyholders in sound companies who have to meet the cost of the levy. The basic principle of a guarantee scheme is that if a levy has to be raised at the expense of policyholders in other companies, then the policy benefits in the failed company should be reduced to 90 per cent. and the excessive life assurance benefits should also be reduced. I want to emphasise that the principle is already accepted by the Government.
The Amendments to the new clause which have been set down achieved this end by providing that the Board shall not incur expenditure to facilitate the rescue of a failed life assurance company, unless the policy benefits are scaled down to 90 per cent., and the accepted benefits are appropriately scaled down
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further on exactly the same basis as provided for in Clause 12. In simple terms it would mean just this; the policyholders in the failed company would receive the same benefits on a rescue as under the guarantee in liquidation. In my opinion, that would be far more equitable. If we do not accept this Amendment, 100 per cent. rescues would tend to become the arrangement if a fringe life assurance company failed. This would mean in practice that the protection scheme would provide a 90 per cent. guarantee on personal general insurance policies (hut not life assurance) at the expense of the proprietors of the general insurance companies, but a 100 per cent. guarantee in a life assurance company where the policyholders of the successful company were making the contribution. There would be a ridiculous distinction between the two classes of insurance.
Where you have life assurance is where you find most of the small savers. Those associated with life assurance companies—the people who take out small policies—will be the people who are called upon to make contributions. Clause 16, as it stands, will be in practice quite inapplicable to general insurance. It has all the objections of the old Clause 16 so far as life assurance is concerned and therefore needs the essential safeguard which is provided by this Amendment, and then the present Clause 16 will, in my view, become acceptable to all concerned. Some people may argue that at this time it is wrong to hold up the passage of the Bill. I do not think so. I think it is the duty of this House to give consideration to every aspect of the Bill, and if there is any element of injustice in it we should attempt to rectify it here, and not merely express the hope that that may be done in another place.
I realise that the Amendment is technically complicated, but it establishes a simple point that whether the guarantee scheme in relation to a failed company concerned with life assurance operates after the company has gone into liquidation or follows an arrangement by which the company is rescued, if the policyholders in other life assurance companies have to be levied, then the benefits guaranteed to the policyholders in the failed company should be the same in

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each case; namely, 90 per cent. of the contractual benefits, with excessive benefits scaled down. There is nothing revolutionary in this Amendment. It tries to introduce the element of equity and, indeed, it incorporates principles which are already accepted by the Government in other parts of the Bill. I am sure that, after consideration by your Lordships, the point met by this Amendment will be accepted. I beg to move.
3.52 p.m.
Lord WINTERBOTTOM: My Lords, my noble friend has moved a long Amendment, which he himself describes as being highly technical. I am, as your Lordships will realise, not a technician in this matter. Therefore for the sake of clarity I should like to state the Government's view on resisting the clause as drafted by my noble friend. The Government introduced the new Clause 16 to take into account the discussion in your Lordships' House. Certain objections have been raised to it, which turn on two ideas which we must be careful to keep separate in our minds.
The first objection is that the clause could result in the assets of sound companies being levied to achieve a situation in which the policyholders of a company in difficulties received payment at a level of 100 per cent. At first blush, this seems a most sound objection, and it has been raised by my noble friend; but let us think the matter through. I think we would all agree that the aim is to secure the protection offered by the Bill at the lowest cost to the levy. This is the objective of subsection (8) of this clause. In any particular case difficulties and delays may be involved in court proceedings, with heavy administrative expenditure from the levy and a diminution of the company's assets. Therefore it may not appear to the Board that it would cost them less to take this road, and they therefore ought to have at least the power to consider instead a cheap and rapid rescue, even at the level of 100 per cent. Where it appears to the Board that benefits under long-term policies may be excessive, they will have to take this into account in deciding what will cost them less. To that extent, 100 per cent. rescues are improbable.
It is easy to criticise all the Amendments that have been put down. How-
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ever I can fully appreciate the argument that inevitable reduction to 90 per cent. might make policyholders and intermediaries think twice about certain policies. But the logical conclusion to the argument against Clause 16 is that such a reduction should take place even if it costs the levy more in the end. I reject this argument as a matter of policy, and I believe it finds little favour in the insurance industry as a whole. The second and distinct objection to Clause 16 is that in fact it does not achieve the effect of minimising calls on the levy.
I am glad that discussion of Clause 16 has led to a more general realisation of the need for a rescue provision, especially in the case of life business. I think it is generally agreed that the costs of liquidation, and such disadvantages as the inability to carry forward tax losses, can make this a more expensive road to follow. The best course would often be to secure a reduction in benefits and then to run off the business. It has been suggested that leaving aside the comparison in the situation after liquidation, it would be cheaper, more or less by definition, to rescue before liquidation with reduced benefits than without reduced benefits, and Clause 16 does not require the Board to opt for the reduced benefits.
This argument rests on the assumption that a reduction in benefits can be rapidly and readily achieved; but this is not so. It might not be possible to obtain the court's sanction to a reduction of benefits, thus forcing the company to go into liquidation. Even if the court's decision was favourable, by the time it had been reached the extra expense incurred and the deterioration of the company in financial difficulties might have made the rescue operation more expensive than an earlier rescue at 100 per cent. would have been.
Perhaps I might express the argument more clearly by describing chronologically the likely action of the Board under the clause as drafted. If a company is in provisional liquidation or in one of the other situations described in subsection (1) of Clause 16, the Board may consider the possibility of arranging for its rescue. They will first compare the cost of an immediate rescue at 100 per cent. with the cost of protecting policyholders in a liquidation. If the rescue is likely to be

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more expensive, they will obviously not be empowered to undertake it. But the Board may then consider whether it would be practicable to apply for a reduction of benefits to 90 per cent., or to some other level. They will also compare the cost of a rescue on those terms with the cost of protecting policyholders in a liquidation and, if the rescue is likely to be cheaper, they may make a rescue conditional upon such a reduction being obtained from the court.
Alternatively, the Board may, at the first stage of their deliberations, decide that a 100 per cent. rescue will be cheaper than a liquidation. Even if that is their judgment, the Board will still consider the possibility of obtaining a reduction of benefits. If it seems likely that the court will quickly agree to a reduction, and that a rescue on these terms is the cheapest course open to them, the Board will clearly seek a reduction with a view to securing such a rescue. But it is by no means certain that such a reduction would be obtainable, or that a rescue on such terms would be the cheapest course. The expense of the court proceedings and the deterioration of the company while they are taking place, might perhaps have the effect of making a rescue at 90 per cent. more expensive than an earlier one at 100 per cent. Moreover, there is the possibility of the court's sanction to a reduction not being obtained. If that were to happen there would be no alternative but for the company to go into liquidation—which would, ex hypothesi, be more expensive to the Board than a rescue at 100 per cent. in the first place would have been.
In order to avoid landing themselves in such a paradoxical situation, therefore, I am sure your Lordships will agree that the Board need to have some discretion. If they judge that an appropriate reduction could not be obtained, or that the delay would make a 90 per cent. rescue more expensive, they should, in the interests of cheapness, be allowed to choose an immediate rescue without reduction of benefits. If my noble friend's Amendment were accepted the Board would be denied that option.
We are perhaps dealing here with a temporary situation. Recent experiences show the need to review the whole of the system for winding up insurance com-
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panies and, as was explained by my noble friend at Report stage, this review is under way. In the meantime, I hope noble Lords will agree that the activities of the Board must take into account the winding-up system as it now exists. It may be that Clause 16 does not yet make it quite clear that the Board must always take into account the need to minimise calls on the levy. For the reason I have given, I think the idea is illusory that the Board would choose 100 per cent. rescue rather than 90 per cent. rescue when the 90 per cent. rescue was automatically cheaper. However, when laying a statutory duty on the Board it is difficult to see how "cheapness" can be defined except in terms of the Board's statutory duty in liquidation.
The Government are certainly prepared, however, to clarify the need for the Board to be guided by the need to minimise calls on the levy. The most appropriate way for this to be done would probably be in guidance given under Clause 2 after consultation with the Board. I apologise for the somewhat inordinate length of my reply, but, as my noble friend has said, this is technically a difficult matter and I have to give a closely-reasoned answer to my noble friend. I believe the Government's view is correct and I would ask my noble friend not to bring about the situation where the best is the enemy of the good, and to consider carefully the Government's reasons for rejecting his Amendment.
4.2 p.m.
Lord ABERDARE: My Lords, I should like, I hope for the last time, to declare an interest as a director of a small insurance company and an underwriting member of Lloyd's. We have heard two carefully prepared speeches on a highly technical subject and I dare say that the rest of your Lordships feel as I do, that this is a matter of extreme complexity and one which it is almost impossible to grasp on a Third Reading Amendment. Were we in Committee it would be that much easier to do. However, this clause has given rise to a great deal of difficulty in the course of the passage of the Bill. As the noble Lord, Lord Peddle, said, it was in its initial form intensely disliked by all of us all round the House. The Government removed

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provisions from the Bill and have introduced a new Clause 16 which we accepted on the Report stage.
It is important to realise that the new Clause 16 which is now in the Bill contains some very considerable concessions to the insurance industry. In the first place, the Secretary of State is in no way involved; it is the Board, which is in charge of its own affairs, which makes these decisions of rescue. The Board alone decides whether it should rescue a company under this clause. And we have also had put in the Bill the undertaking originally given by the Government that the majority of the Board will be drawn from the insurance industry. That is a very considerable safeguard towards ensuring that this clause is properly used, in the right way in the right circumstances; and also of course, as the noble Lord, Lord Winterbottom, made perfectly clear, only when it is cheaper and costs less to the levy.
Having said that, I must say that I have considerable sympathy in principle with the Amendment proposed by the noble Lord, Lord Peddie. The reduction of excessive benefits is something which is in tune with the rest of the Bill, and the fact that benefits should be scaled down to 90 per cent. is also in tune with the rest of the Bill. My difficulty is that the noble Lord, Lord Winterbottom, in speaking for the Government has raised a number of highly technical objections to this Amendment most of which I find it rather difficult to follow. He certainly made the point that what the noble Lord, Lord Peddie, was proposing might cost more and certainly does not minimise the burden on those who have to pay the levy. He also made the point that there could be delays and difficulties involved with having to go to the court in order to reduce the benefits.
My view is that the noble Lord, Lord Peddle, would be wise not to press the Amendment at this present stage if the noble Lord, Lord Winterbottom, would give him some assurance that this matter can be returned to in another place. After all, this Bill has started in this House; it has not yet been to another place. This is a very complicated subject and I hope that the noble Lord, Lord Peddie, having made a very strong point, and one which I hope Lord Winterbottom will see is
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further considered, will at this stage of the Bill in this House be prepared to withdraw the Amendment. If he were not, I think I should have to advise my noble friends to abstain because I should not like at this stage and with this amount of knowledge to come down on either side.
Lord MONSON: My Lords, I should like to urge noble Lords in all quarters of the House to support the Amendment of the noble Lord, Lord Peddie. After all, this is not a Party political matter. These Amendments are supported on the one hand by the Co-operative Party and on the other hand by the Daily Telegraph. The noble Lord, Lord Winterbottom, has cited a number of technical objections to Amendment No. 1 which may very well be valid. But let us not forget that when this Bill leaves this House it will go to another place and, on the assumption that it is given a Second Reading, it will be thoroughly scrutinised in Committee and such technical defects as are found will then be eliminated; and, when the Bill returns to this House, naturally your Lordships will accept the Commons Amendments. It is most important that this House this afternoon records its support for the principle of these Amendments.
In particular, on Lord Peddie's second Amendment, but also on his third which is consequential to the second, and the first, the noble Lord, Lord Aberdare, said that Clause 16 had been extensively redrafted to suit the insurance industry. With respect, our concern should be more for the policyholders rather than the industry as a whole. In a nutshell, the effect of this Amendment would be to establish, in the case of an insurance company's having to be rescued, that those who had recklessly, or at any rate carelessly, taken out unsound policies, possibly tempted by excessively high returns, would be called upon to sacrifice a portion of their guaranteed benefits to the tune of 10 per cent. before policyholders in conservatively-run, soundly-run companies had indirectly to dip into their pockets to provide for the rescue. For that reason I suggest that this Amendment ought to be supported.
4.9 p.m.
Lord WINTERBOTTOM: My Lords, with the permission of the House I would

1581
reply to what has been said. I am grateful to the noble Lord, Lord Aberdare, for his constructive attitude towards the Government's views. I agree with him completely that a complex interchange such as we have had must need consideration by experts. Since the Bill has to go to another place, experts will have an opportunity to read what my noble friend Lord Peddie has said and what I have said and see whether there is conflict or whether the two views can be reconciled. Of course, I would not dare to suggest to another place the course they might take. But I will draw our discussion today to the attention of my right honourable friend the Secretary of State who is responsible for this Bill so that he can consider what my noble friend has said and consider whether in his view the arguments of my noble friend or the Government's present views prevail. That, I am certain, will happen automatically. It is for this reason that I hope your Lordships will give time for those who are outside the Chamber today to consider the two arguments that have been forward on this important matter.
Lord PEDDIE: My Lords, the last words of my noble friend were that they should be given time to consider the arguments. Over the months there has been time to consider the arguments; the matter has been argued time and time again, so it is quite ridiculous to make the plea that we should defer a decision in this House, because in the future there will be time to consider it.
I appreciated very much indeed what the noble Lord, Lord Aberdare, had to say. He remarks that already there have been considerable concessions. That is true, but we are dealing with an area in which no concession has been given. He says that he has considerable sympathy with the principle behind our arguments, but the principle is the most important thing that we have to consider and I ask the House to consider the principle which is involved.
If there are variations of any kind, there is still time for further consideration in another place in terms of drafting. But if the principle is accepted—and the noble Lord, Lord Aberdare, says that he accepts the principle—then he should give tangible support to the point of view that we have expressed. I regret to say that
1582
my noble friend has not answered the points that we have raised. He has put up a most effective smoke screen and probably has endeavoured to make the whole question even more complicated and technical than it is. My noble friend spoke about whether it would be cheaper to rescue or to allow a company to go into liquidation. What we are concerned about is when a rescue is undertaken and the Board decides that it is cheaper to effect a rescue. The Amendment which we are suggesting imposes no further obligation on the Board to do things that would increase the cost; what we are seeking to do is to decrease the cost.
Then my noble friend went on to point out the legal difficulties; I thought they would be raised. Under Section 50 of the Insurance Act 1974, power is given to the court to vary or scale down benefits under certain conditions. My noble friend argues that the court's task will be difficult, but in Clause 12 of his own Bill he is suggesting that in certain circumstances there should be a tapering down of the benefits if the accountant, or auditor, or actuary believes that the benefits have been grossly too high. They suggest that under certain circumstances the benefits should be scaled down. There would have to be application to the court to achieve that aim. Why do they think that under Clause 12 it will be easy to go to the court and that the court will do it? It will not be easy to do it under this Amendment. Where lies the difference? They have accepted the principle—
Lord ABERDARE: My Lords, is the noble Lord correct in saying that one would have to go to the court in the case of the rest of the Bill? I thought it was just a question of the amount of the levy that would be paid to the policyholder.
Lord PEDDIE: No, my Lords. It is clearly indicated in Clause 12 that there is a possibility of scaling down the benefits, based upon an actuarial recommendation, if in the opinion of the actuary those benefits have been too high. My argument is that if there is a scaling down there, then there can also he a scaling down through application to the court. However, the point is this. Does anybody seriously believe that in circumstances where a rescue will be undertaken and the rescue conducted out of contributions made by other insurance companies, any

1583
court in the land, realising that the alternatives are either insolvency or rescue and that one of the conditions of the rescue is that the benefits should be reduced to 90 per cent., would reject that application? And can any noble Lord believe that that argument could be the major justification for rejecting this Amendment?
My noble friends and I put forward this Amendment on the grounds of equity, and equity alone. We have presented the arguments. There is no complication with regard to the principle. It is true that the Bill is both complex and technical, but we are dealing with one simple principle: that where there is a rescue—and a rescue that will apply almost invariably to life assurance companies—the same conditions should apply to the life assurance companies as
4.25 p.m.
Lord PEDDIE Lord PEDDIE moved Amendment No. 2:
Page 17, line 4, at end insert—
(" (10) If the Board incur expenditure under the provisions in this section, then section (Recovery from intermediaries) shall apply in respect of that expenditure (but treating the references in that section to a company in liquidation as references to a company in financial difficulties, and references to the beginning of the liquidation as references to the relevant date).")
apply to the general insurance companies, and that the benefits should be scaled down to 90 per cent. and, in consequence, the contribution that would be made or would be called upon to be made by life assurance companies and the policyholders would be proportionately reduced.
I have no intention of going over the arguments again. Without any question of doubt, justice is on our side, it has full full support from the industry, it has full support from the trade unions and I hope that it will have the full support of this House.
4.17 p.m.
On Question, Whether the said Amendment (No. 1) shall be agreed to?
Their Lordships divided: Contents, 23; Not-Contents, 39.

CONTENTS

Arwyn, L.

Fisher of Rednal, B. [Teller.]

Peddie, L. [Teller.]

Aylestone, L.

Hankey, L.

Rathcreedan, L.

Bacon, B.

Hanworth, V.

Saint Oswald, L.

Barnby, L.

Loudoun, C.

Stamp, L.

Clancarty, E.

Lyons of Brighton, L.

Thurlow, L.

Colyton, L.

Maybray-King, L.

Wilson of Radcliffe, L.

Cooper of Stockton Heath, L.

Monson, L.

Wynne-Jones, L.

Douglas of Barloch, L.

Noel-Buxton, L.

NOT-CONTENTS

Blyton, L.

Henderson, L.

Platt, L.

Brockway, L.

Hughes, L.

Ritchie-Calder, L.

Bruce of Donington, L.

Jacques, L. [Teller.]

Samuel, V.

Burntwood, L.

Janner, L.

Segal, L.

Castle, L.

Jessel, L.

Stedman, B.

Champion, L.

Leatherland, L.

Stewart of Alvechurch, B.

Crowther-Hunt, L.

Lee of Asheridge, B.

Strabolgi, L.

Davies of Leek, L.

Llewelyn-Davies of Hastoe, B.

Strange, L.

Donaldson of Kingsbridge, L.

Longford, E.

Summerskill, B.

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

Melchett, L. [Teller.]

Taylor of Mansfield, L.

Falkland, V.

Milford, L.

Wells-Pestell, L.

Gardiner, L.

Pannell, L.

Winterbottom, L.

Hale, L.

Phillips, B.

Wootton of Abinger, B.

Resolved in the negative, and Amendment disagreed to accordingly.

The noble Lord said: My Lords, with this Amendment I will also speak to Amendments Nos. 3 and 4. In Amendment No. 2 we are dealing with recovery from intermediaries, and the Amendments have similarities with those that were tabled in Committee and at Report stage. They apply only to long-term—that is, life assurance—business and, again, the Amendment is supported by the Life Officers' Association, Associated Scottish Life Offices and the trade unions.
The principle behind this new clause is simply that if the Board has to incur

1585
expenditure in connection with a failed life assurance company, the intermediaries who received substantial commissions from the company before it failed shall be required to make a reasonable contribution by way of partial recovery of commissions, before the policyholders in unconnected companies are called upon. What is reasonable is usually difficult to define, but we consider it should be up to one-half of the long-term new business commissions received in the year before the failure, plus up to one-quarter of such commissions in the previous year. That is a most modest basis of recovery. The new clause also provides that no recovery shall be made unless the Board actually incurs expenditure in connection with a failed company; that no recovery shall be made unless half the commissions received by an intermediary during the year before the failure, plus the one-quarter of the commissions received during the year before that, amount to £10,000. A comment was made on a previous occasion about the difficulty of claiming back small amounts. Here it will be £10,000, which will make it identifiable as it will be easy to recognise who were involved.
Furthermore—and this is a very important point—"commission" here means purely commissions received with appropriation of new long-term policies. Therefore, it would only apply to those intermediaries who placed a very substantial amount of new long long term business with the company that had failed. As I said on a previous occasion, it is well known that in all the cases of failed companies the commissions that had been paid out were substantial and were considered by some people to be one of the contributory factors making for their failure. There is no doubt that unduly high rates of commission influence brokers in some cases, though not all. This has not been nut forward as a penalty to be applied to brokers who have been associated with failed companies, but rather on the grounds of equity that such persons who received commissions of the character I have described should make their own contributions. Where they received substantial commissions from the failed company, they should pay their share before the policyholders in other insurance companies were levied.
I repeat that as amounts of £10,000 are involved there will be no difficulty of identification. I need not press the point any further, because this is an Amendment which I think is quite easy to understand. It merely emphasises the point that those intermediaries who received substantial commissions from failed companies before a company went broke, should at least make some contribution in the same way as other companies make one in the form of a levy. I beg to move.
Lord ABERDARE: My Lords, I should like to support the noble Lord, Lord Peddie, in this series of Amendments. I think the case is a very strong one. Certainly, there have been instances in the past where brokers may have made quite a considerable amount of money in brokerage commissions from a company which then failed, and if under the new Bill they are to escape scotfree in regard to finding funds to compensate policyholders that seems most inequitable. The noble Lord has explained that it is only a partial recovery, and that it is limited to sums of not less than £10,000. I hope that the noble Lord who is speaking for the Government will accept the principle, or what lies behind the Amendment.
I would again prefer it if the noble Lord, Lord Peddie, did not divide the House on these clauses. To my mind, he should be satisfied provided the noble Lord, Lord Winterbottom, can accept that this point should be included in the Bill in some form, in the way the Government can best see their way to do so. For my money, if the noble Lord, Lord Winterbottom, is able to give an undertaking to include something of this kind, which will make it possible to recover sums from brokers in the event of a failed company, then I hope that the noble Lord, Lord Peddie, will accept that assurance and will not press his Amendment. But, as I say, I feel it is a very worth while Amendment.
Lord CACCIA: My Lords, may I support what the noble Lord, Lord Aberdare, has just said? On the last occasion, I hoped that the noble Lord, Lord Peddie, would be satisfied with the assurance which the noble Lord, Lord Winterbottom, gave, that at least the subject would be considered carefully

1587
before the Bill goes to another place. I recognised that he felt there was a strong question of principle, and that the assurance was not enough. Questions of principle are very difficult when it comes to their practical application. One has the right to cross at a zebra crossing, but one may lose one's life in doing it, and that sometimes makes one hesitate to exercise a principle which is no doubt one's right. But this is something different, and I very much hope that the noble Lord, Lord Winterbottom, will be able to go just that yard further than he did last time. I hope he will be able to say, in effect, that this is an element which should be part of the eventual Bill, and that he will study it in that light.
The Earl of ONSLOW: My Lords, will the noble Lord, Lord Peddle, with whose Amendment I am in complete agreement, agree that life insurance practice is as follows? On the original premium a company will pay a very high brokerage, in some cases I believe up to 70 per cent. of the premium; that is a business acquisition premium. It then comes down in the second year very substantially, and in subsequent years it sometimes reduces to as little as 2½ per cent. This point ought to be made for the benefit of your Lordships. I hope the noble Lord agrees with me.
Secondly, I agree very much that this provision would act as a very strong incentive to broking houses or agents to make absolutely certain—and as the noble Lord, Lord Aldington, said in Committee, this is one of the duties of broking houses or agents—that the company with whom they place the risk is of the utmost financial probity. I should have thought that if we could accept this Amendment—or, if the noble Lord does not like the wording, a Government Amendment along these lines—it would go a very long way to reducing the number of insurance companies which could get into difficulties. It was well known in the City that the Vehicle and General was in "ropey" order for quite a long time before it went bankrupt. An insurance broking house with which I was, and am, connected refused to do business with them precisely on those grounds. If other insurance brokers or agents had known they might be asked for the return of some of their commission it is possible we would not have
1588
had that trouble, with the scramble for premium income at high brokerage rates and the failure of the Vehicle and General.
Lord LYELL: My Lords, perhaps I may intervene on this point. I ought to declare a minor interest in that I am an underwriting member of Lloyd's. I would beg the noble Lord, Lord Peddie, not to press this Amendment, because a very important question of dividends and commissions has arisen. I think he and the House will appreciate that the recipients, be they substantial shareholders—and I think he called them proprietors—brokers or other intermediaries, will have paid very substantial tax on these receipts. There may be a question of whether or not this tax should be repaid by the Inland Revenue to the Board, and this is worthy of further study. With that in mind, I should like to ask the noble Lord not to press the Amendment. It is something on which perhaps the noble Lord, Lord Winterbottom, could give us some guidance. This could push up the total receipts available to the Board by as much as 40 or 50 per cent., and I think the noble Lord, Lord Peddie, will admit that that is a substantial amount.
4.36 p.m.
Lord BANKS: My Lords, I should like to declare an interest which is very relevant to this Amendment; that is, that I am an insurance broker specialising in life assurance and pensions. But notwithstanding that fact, I should like to support this Amendment. I think we are all aware that there have been companies which have got into difficulties when higher than average commission has been paid, which has been an incentive to certain brokers to place business. But even if that were not so, this Amendment would provide a proper deterrent and would be something to encourage brokers to think very carefully about where they place business. These matters ought to be decided by professional ethics, and one hopes that this will increasingly be so. I am glad to see in today's papers that four broking organisations are getting together in order to discuss the registration of brokers, and to put certain proposals before the Government for possible implementation. Nevertheless, it is desirable that there should be this additional incentive—if I may use that word—to honest dealing,

1589
and I support the proposal which the noble Lord, Lord Peddie, has put before us.
Lord WINTERBOTTOM: My Lords, I am grateful to my noble friend for the substantial changes he has already made in the Amendment which he moved on this subject at Committee stage. But I regret to say that we still find the proposal full of difficulties, both of principle and practice. Indeed, one of the changes which the noble Lord has made might be considered a change for the worse, since it gives the Board an additional element of discretion as to whether or not they make recoveries from intermediaries. This goes against the views of noble Lords. who have in general been seeking to have the Board's sphere of action defined as closely as possible in the Bill. It seems to us wrong that the Board should be given the discretion to exercise selectively what is really a punitive power. Indeed, I believe that suitable people might be reluctant to serve on the Board in such conditions. We remain of the opinion that the proposal would to some degree be unfair on intermediaries and, indirectly perhaps, even on policyholders themselves.
A large part of the commissions received by intermediaries are in respect of expenditure incurred by them in the course of rendering their services; it thus seems unduly harsh to provide for the recovery of a flat rate of a half or a quarter of commissions and not just of the profit element. Moreover, in practice the proposal would simply lead to intermediaries protecting themselves against the risk of a call being made on them by raising their rates of commission: the cost would therefore ultimately be borne by the policyholders. As to the possibility that the proposal might give brokers an incentive to exercise more care, we do not think a provision of this kind is the right way of going about achieving strengthened regulation of the broking profession. I said in Committee that the Government are well aware of the need to take a closer look at the operations of intermediaries, and that the Secretary of State had written to the President of the Corporation of Insurance Brokers inviting their suggestions.
1590
As the noble Lord who spoke last pointed out, an announcement was made in this morning's Times that four major organisations representing the insurance broking business yesterday set up a Working Party at the request of my right honourable friend the Secretary of State, and work has now started. They are a distinguished group of men, and I am certain they will be able to find answers to the problems exercising all our minds. I believe that through this mechanism the insurance industry will be able to find a viable scheme which would include intermediaries in the levy in time to introduce proposals in another place. I am authorised to say that if practical proposals which commanded a broad measure of support from the interests involved were to be put forward—
Lord PEDDIE: My Lords, I did not quite catch that. Do I take it that the noble Lord is making a positive statement that something will be introduced in another place in line with what we are now proposing?
Lord WINTERBOTTOM: My Lords, that is correct, provided that practical proposals which commanded a broad measure of support from the interests involved were to be put forward. Machinery clearly now exists to formulate these proposals, and one would hope that they would be put forward sufficiently quickly to be incorporated in the stages of this Bill when it reaches another place. It is for this reason that I hope my noble friend will withdraw his Amendment which has won such considerable support from many quarters of the House.
Lord MONSON: My Lords, in view of the rather disappointing reply of the noble Lord, Lord Winterbottom, I rise to ask the House to support Lord Peddie's third Amendment, described yesterday by the distinguished City Editor of the Daily Telegraph as an admirable Amendment making insurance brokers and other intermediaries liable for at least some of the losses suffered by people persuaded by them to insure with companies that subsequently fail. It may be that there are technical objections to this Amendment, although I suspect that they are fewer than those raised in regard to the last Amendment. I believe that some of them are red herrings.

1591
The element of discretion referred to by the noble Lord, Lord Winter-bottom, is surely a sensible provision, in that it enables the Board not to incur expenditure on pursuing small claims against brokers. As for the point raised by the noble Lord, Lord Lyell, I think it is right to say that the Life Offices Association believe that any repayments made by brokers can legitimately be set off against profits in subsequent years, and therefore that disposes of the tax problem. Again this is a question of principle. The principle is probably an even simpler one than in the case of the previous Amendment; it is that in the event of an insurance company failure the guilty shall pay before the innocent are called upon to pay. For that reason I hope that the noble Lord will press his Amendment.
Lord HAWKE: My Lords, I hope that when the Government come to examine this matter they will consider the effect of the principle of this Amendment in other spheres. I think of commodity markets, the Stock Exchange, and all other varieties of monetary transactions. It is an extremely bad precedent that you can go bankrupt and your creditors can claw back commissions from people with whom you have been dealing, perhaps many years before.
Lord PEDDIE: My Lords, I thank noble Lords for the degree of support that they have extended to the Amendment put down by my noble friends and myself, and particularly for that coming from the noble Lord opposite. He declared himself to be a broker operating in this field and yet went out of his way to applaud the Amendment. He indicated his support for it and his recognition that it made a valuable contribution towards the end we all seek.
It was my intention to reply in rather vigorous terms to some of the comments made by my noble friend Lord Winter-bottom; but all is forgiven because I have taken note of the point he made, and which I sought permission to emphasise. I understand that he says that this matter will be dealt with in another place, the points that are incorporated in our Amendment will be dealt with in another place, and that the Government will make themselves available for any
1592
recommendation towards that end. In other words, the principle is accepted; it rests with us to put forward the proposals that will meet that principle and the needs of Government. I take it that that is correct?
Lord WINTERBOTTOM: My Lords, with the permission of the House I should like to clarify what I said. What I did say was very close to my noble friend's interpretation. I said that if practical proposals which commanded a broad measure of support from the interests involved were to be put forward, the Government would certainly be prepared to consider them. That assumes two things: first, that the Working Party which has been set up would be able to obtain proposals which commanded a broad measure of support from the brokerage industry; secondly, that the Working Party would report in sufficient time for the Government to be able to analyse the proposals.
Lord PEDDIE: My Lords, I am sorry, but we are getting a little confused. My noble friend is making reference to a Working Party that is to consider this matter and then report. Apparently it has just been set up. When are they going to report?
Lord WINTERBOTTOM: My Lords, I am afraid that I cannot say. Their appointment was foreshadowed at the Committee stage. The appointment has now taken place. I have not seen their remit, but I am certain that the problems are not so complex that they are not able to express a broad measure of agreement within a timescale compatible with the passage of this Bill. I cannot give firm undertakings that they will because I am not in control of the Working Party, but the Government will in fact consider any measures, any proposals which command a broad measure of support from the interest involved. That is what I said.
Lord BYERS: My Lords, before the noble Lord, Lord Peddie, continues, my I ask whether it is likely that this Working Party could possibly report before the end of this Session, if before the end of this Session the Bill will have been passed by another place?
Lord PEDDIE: My Lords, in the circumstances, I think one must take it

1593
that it cannot report. Therefore, I am anxious that this House be given the opportunity to demonstrate its belief and its acceptance of a principle. I recognise that there may be need for some variation in the precise drafting of the Amendment, and there is opportunity for that. It was my intention to withdraw this Amendment, but in the light of the support that has been indicated, the revised assurances that I have been given, and the extreme doubts as to whether it would be possible for this Working Party to
report in time, I think that I should be failing in my duty if I did not press this matter. I hope that this House will reinforce this principle so that when the Bill goes to another place we shall have given a clear indication of our belief in this principle relating to intermediaries.
4.50 p.m.
On Question, Whether the said Amendment (No. 2) shall be agreed to?
Their Lordships divided: Contents 86; Not-Contents, 38.

CONTENTS

Aberdare, L.

Erskine of Rerrick, L.

Nugent of Guildford, L.

Amherst of Hackney, L.

Evans of Hungershall, L.

O'Neill of the Maine, L.

Auckland, L.

Falkland, V.

Onslow, E.

Aylestone, L.

Falmouth, V.

Peddie, L.

Bacon, B.

Ferrers, E.

Penrhyn, L.

Balfour of Inchrye, L.

Fisher of Rednal, B. [Teller.]

Rankeillour, L.

Banks, L.

Fortescue, E.

Rathcreedan, L.

Barnby, L.

Fraser of Kilmorack, L.

Roberthall, L.

Beaumont of Whitley, L.

Gladwyn, L.

St. Aldwyn, E.

Belhaven and Stenton, L.

Goschen, V.

St. Helens, L.

Belstead, L.

Grimston of Westbury, L

St. Just, L.

Berkeley, B.

Hailsham of Saint Marylebone, L.

Sandys, L.

Brock, L.

Sempill, Ly.

Byers, L.

Hankey, L.

Stamp, L.

Caccia, L.

Harcourt, V.

Strange, L.

Campbell of Croy, L.

Harmar-Nicholls, L.

Strathcona and Mount Royal, L.

Carrington, L.

Henley, L.

Cathcart, E.

Home of the Hirsel, L.

Strathspey, L.

Chesham, L.

Hylton-Foster, B.

Sudeley, L.

Colyton, L.

Lloyd of Kilgerran, L.

Swansea, L.

Cooper of Stockton Heath, L.

Long, V.

Tanlaw, L.

Cottesloe, L.

Loudoun, C.

Teviot, L.

Daventry, V.

Luke, L.

Vickers, B.

Denham, L.

Lyell, L.

Vivian, L.

Deramore, L.

Lyons of Brighton, L.

Wakefield of Kendal, L.

Drumalbyn, L.

Mancroft, L.

Wigoder, L.

Ebbisham, L.

Maybray-King, L.

Wilson of Radcliffe, L. [Teller.]

Eccles, V.

Meston, L.

Effingham, E.

Monson, L.

Young, B.

Elton, L.

Norwich, V.

Young, B.

NOT-CONTENTS

Annan, L.

Hall, V.

Platt, L.

Blyton, L.

Hawke, L.

Popplewell, L.

Brockway, L.

Henderson, L.

Sainsbury, L.

Bruce of Donington, L.

Hughes, L.

Samuel, V.

Buckinghamshire, E.

Inchyra, L.

Segal, L.

Castle, L.

Jacques, L. [Teller.]

Snow, L.

Champion, L.

Janner, L.

Strabolgi, L.

Davies of Leek, L.

Leatherland, L.

Taylor of Mansfield, L.

Donaldson of Kingsbridge, L.

Llewelyn-Davies of Hastoe, B.

Wallace of Coslany, L.

Longford, E.

Wells-Pestell, L.

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

Melchett, L. [Teller.]

Winterbottom, L.

Morris of Grasmere, L.

Wootton of Abinger, B.

Gardiner, L.

Phillips, B.

Wynne-Jones, L.

Gordon-Walker, L.

Resolved in the affirmative, and Amendment agreed to accordingly.

4.58 p.m.
Lord PEDDIE: My Lords, I beg to move Amendment No. 3 formally.
Amendment moved:
After Clause 16, insert the following new clause:
Recovery from intermediaries
" —(1) In this section an intermediary of a company in liquidation is a person not in the employ of the company who at any time during the two years which ended with the beginning of the liquidation received from the company any commission or other remuneration, by whatever name called, in consideration of the procuration, or assistance towards the procuration, of long term business.
(2) Subject to the following provisions of this section and to Schedule (Additional provisions with respect to recoveries from intermediaries) to this Act, the Board shall be entitled to recover from each intermediary a sum calculated by reference to an amount equal to one-half of the commission or other remuneration, by whatever name called, received in consideration of the procuration, or assistance towards the procuration, of long term business by that intermediary from the company during the year which ended with the beginning of the liquidation of the company plus one-quarter of such commission or other remuneration, by whatever name called, received during the year which ended ore year prior to the beginning of the liquidation provided that such amount is not less than £10,000; and such amount, provided that it is not less than £10,000, is hereafter in this Act referred to, in relation to any intermediary, as income of the intermediary liable to be recovered.
(3) if the expenditure incurred by the Board in respect of long term business in connection with the company in liquidation exceeds the total income of all intermediaries liable to be recovered, then the Board shall be entitled to recover the whole of such income, but if the expenditure so incurred by the Board is less than such income then the Board shall be entitled to recover from each intermediary only that proportion of his income liable to be recovered as the long term business expenditure of the Board in connection with the company in liquidation bears to the total income of all intermediaries liable to be recovered.
(4)Schedule (Additional provisions with respect of recoveries from intermediaries) to this Act shall have effect with respect to the recovery of income from intermediaries liable to he recovered."—(Lord Peddie.)
On Question, Amendment agreed to.
Lord PEDDIE: My Lords, I beg to move Amendment No. 4 formally.
Amendment moved—
After Schedule 1, insert the following new Schedule—
"SCHEDULE
Additional provisions with respect to recoveries from intermediaries
1. The Board shall recover the whole or such proportion of the total income of all
1596
intermediaries liable to be recovered as it is entitled to recover under section (Recovery from intermediaries) above by sending a notice of recovery to every intermediary who may in the opinion of the Board have had income liable to be recovered.
2. A notice under paragraph 1 above shall state the amount which in the opinion of the Board is income liable to be recovered, the proportion of such income which is recoverable in accordance with section (Recovery from intermediaries) above, and the amount of money which is hence recoverable by the Board.
3. A notice under paragraph 1 above may be sent by post, and a letter containing such a notice shall be deemed to be properly addressed if it is addressed to the person to whom it is sent at his last known address.
4. A person to whom a notice under paragraph 1 above is sent shall pay to the Board within one month of the date of the notice the amount of money which is specified in the notice as recoverable by the Board.
5. The Board may recover any sum recoverable in accordance with section (Recovery from intermediaries) above in any court of competent jurisdiction."—(Lord Peddie.)
On Question, Amendment agreed to.
4.59 p.m.
Lord WINTERBOTTOM: My Lords, I beg to move that this Bill do now pass. Perhaps your Lordships will forgive me if I say a few final words and give a brief summary of some of the changes that have been made in the Bill since it first arrived before your Lordships' House. The essentials of the protection scheme remain as they appeared in the Bill as originally drafted. The scheme will be administered by the Policyholders Protection Board established under the Bill. The Board will finance their activities out of levies on insurance companies and their duties will be to protect policyholders of an insurance company in liquidation. Only United Kingdom policies will be protected and Lloyd's, marine, aviation and transport insurance and reinsurance will be excluded. Claims under compulsory insurance policies will be met in full. Otherwise, in the case of general business private policyholders only will be protected, to the extent of 90 per cent. of the benefits. In the case of long-term business all policyholders will be protected and the protection will also be 90 per cent., except where the benefits are excessive. Finally, the Board will have a discretionary power to arrange for the continuance of a company's business, though the circumstances in

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which they may exercise this power are now more strictly defined.
Having described again the basis of the protection, I shall briefly state some of the more significant changes made in the Bill. As your Lordships noted and have commented on favourably today, the structure of the Board was once a matter of concern to your Lordships, but the Bill as now drafted provides that of the five people appointed to the Board, at least three should be directors, chief executives or managers of authorised insurance companies, and at least one shall appear to the Secretary of State to be qualified to represent the interests of policyholders.
Perhaps not surprisingly your Lordships were concerned about the extent to which, under the Bill as originally drafted, powers of legislation were delegated to the Secretary of State. I confess that I found some of the fears expressed a little exaggerated. The powers were included to allow the Board a measure of flexibility in a very complex field, and certainly with no sinister intent. But it is right that Parliament should be jealous of its position. In view of this, we examined rigorously the circumstances in which the various powers might be used. As a result of this examination, we concluded that in some cases the possibility of using the powers was so remote that they could be dispensed with; and in other cases, where the power was purely for the benefit of the Board, it was right that the Secretary of State should exercise it only after consulting them.
The following changes have therefore been made. The powers to extend the Bill by order to cover Lloyd's or to marine, aviation, and transport insurance or reinsurance, have been deleted. We have also removed the Secretary of State's powers under the old Clause 14 to vary the duties of the Board. The Secretary of State may give guidance to the Board under Clause 2 only after first consulting the Board, and the Secretary of State's powers to make regulations under any provisions of the Bill may be exercised after only consultation with the Board.
Apart from the delegated legislation question, perhaps the greatest controversy has arisen over the rescue provisions of Clause 16 which we have discussed today.
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My noble friend Lord Beswick made it clear on Second Reading that this was a secondary feature of the Bill, and that the powers were purely discretionary. At the same time, it was an important clause, particularly in relation to life companies, because a rescue might sometimes be in the interests both of policyholders and of the industry as a whole. After the clause was deleted on Committee, we sought to redraft it, making more explicit the circumstances in which the Board might use their rescue powers; and the new clause, drafted in consultation with the insurance industry, was accepted by the House on Report.
Your Lordships will remember that there are three major changes from the original clause. The clause will no longer come into operation on a reference by the Secretary of State. Instead, the Board may use their powers under this clause only if a provisional liquidator has been appointed, or in certain similar cases specified in subsection (1). In this way, any possibility that the Board might be led to make over-free use of their rescue powers will be avoided. The clause now contains the explicit proviso that the Board may not exercise their powers to arrange for the rescue of a company where it appears to them that it would cost less to allow the company to go into liquidation, and to protect policyholders as required by their duties. We had assumed that, in any case, the Board would have regard to this factor; but I think your Lordships will agree that it is more satisfactory to have the point spelt out unequivocally in the Bill. The restrictions on benefit to shareholders, and to anyone involved in the circumstances giving rise to the company's financial difficulties, have been made even tighter than they were originally. The Board may not use their powers if any such persons, "would benefit to any material extent ".
I think the House will agree that we have gone a very long way to incorporate in the Bill the suggestions made by noble Lords on both sides of the House. The Government are grateful to noble Lords for the constructive attitude they have taken during our long debates on this subject. It is true that we have not felt it practicable to take up some of the more extensive proposals made by my noble friend Lord Peddie, but I for one value very much the contribution

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he has made to our debates, and I can assure him that the Government's approach to the general question of insurance supervision has much in common with his own. We do not consider that this Bill is the right vehicle for some of his ideas, but we shall have them very much in mind in our application of the 1974 Act.
The revised version of the Bill has been arrived at through an extensive process of consultation, and has, I believe, the general support of the insurance industry. I commend it to the House for that reason, and for its intrinsic merit. It will provide improved security for millions of ordinary people throughout the country; a purpose for which every member of this House, I know, will have sympathy. I beg to move.
Moved, That the Bill do now pass.—(Lord Winterbottom.)
5.6 p.m.
Lord ABERDARE: My Lords, other business is to follow, so I do not intend to make a long "Fourth Reading" speech, but I wish to echo what the noble Lord said. This Bill is now much improved, thanks to the efforts of your Lordships who have devoted considerable attention to it. I thank the noble Lord for his efforts, and through him the noble Lord, Lord Beswick. Both noble Lords have been very helpful and most flexible in looking at the various Amendments we put forward. I also wish to express my gratitude to my noble friends Lord Belstead and Lord Lyell, who have helped me in dealing with the Bill. We all hope that there will be no further failures of insurance companies, but in the event that there are the Bill will certainly provide considerable protection for policyholders.
Lord HOUGHTON of SOWERBY: My Lords, I recall that on Second Reading there was an almost unanimous disapproval of the principle of the Bill, yet now we are asked to send the Bill to another place with that same principle intact. It surprises me that we should now be listening to appreciative remarks about the present condition of the Bill. If the principle of the Bill was wrong at the time of Second Reading, it is wrong now. In my opinion the Government ought to consider, before the Bill goes to another place, what they are going
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to do with it. I should have thought that the Bill has been so altered in this House that it can no longer give satisfaction to the Government, and it can scarcely give satisfaction to a large section of the insurance industry. Is this how we are to deal with this Bill through our Parliamentary process?
I had a surprise this morning when I met a man who had just returned from conducting insurance business in Canada and the United States. He said that the very fact of this Bill going through Parliament at present was not a reassurance to overseas confidence in the British insurance industry, but rather that it disturbed that confidence, on the ground that it probably indicated that there was more wrong with the British insurance industry than had been supposed, that the insurance industry itself had been incapable of putting its own house in order and that the Government had to do that for it. That surprised me, but it was an opinion expressed by someone whose judgment I respect. If that is so, it is perhaps not a very reassuring consequence of passing legislation of this kind through Parliament, but that is a matter for the Government.
But, my Lords, what is worrying about the whole process of the Bill is how it can be changed in this way, without a shred of evidence having been produced throughout our debates. We have acted only on opinions, and I still believe that it would have been far more sensible, with a complicated Bill of this kind, to have referred it to a Select Committee especially where it was intended to make considerable Amendments to it. I conclude by saying that much of the mythology which we absorbed in another place about the capacity and ability of this House as a revising Chamber has been dispelled in my mind. It has been a one-man band between my noble friend Lord Peddie and the Government Front Bench and very little else has been contributed to the debate on the Bill. Where the basis for making the changes comes from, I do not know.
All I can say is that I felt unable in the last few Divisions to take part in the further proceedings on the Bill because I have a profound discontent at the way in which the whole Bill was handled. I feel that we dealt with complicated

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matters affecting a vast industry of great importance to the country in a manner which I do not think redounds very much to the credit of our Parliamentary proceedings.
Lord BANKS: My Lords, as has already been said, the Bill has come before us today in a very different form from that in which it originally appeared. As one of the newcomers to the debates in this House, I should like to say that the impression made on me as a result of the progress of the Bill has been the opposite of that made on the noble Lord, Lord Houghton. I have felt that here was an occasion when the House was taking legislation and moulding it in a way that, perhaps, one does not often see happen in legislative assemblies. I should like on behalf of my noble friends to thank the Government for the cooperative way in which these discussions have been approached and which has enabled so many Amendments to be carried by general agreement. I am glad that the powers of the Secretary of State have been restricted and powers to give guidance to the Board qualified. I welcome the fact that the insurance industry has now the majority of representatives on the Board and particularly that the policyholders are specifically represented. The controversial rescue proposals remain, but are greatly modified and now operate only at the instance of the Board, to the composition of which I have referred.
The noble Lord, Lord Houghton, was correct in saying that the principle of the Bill as it originally came to us is retained, that is, the principle of the levy; although the practice is greatly modified. I am not altogether happy about that, but we must rely very much on prevention and on the regulations under the 1974 Act. While I have great sympathy with the efforts of the noble Lord, Lord Peddie, in the earlier stages to have the Bill amended so that it would deal with prevention as well as with actual collapse, nevertheless it seems right to me that the matter should be dealt with utimately as two separate issues and that prevention should not be dealt with in two Acts. That would have led to confusion. In conclusion, I hope that the proposals for prevention in the regulations will be sufficient to ensure that the provisions of the Bill do not have to be operated.
Lord AUCKLAND: My Lords, those of us who are both Members of this House and also actively engaged in the field of insurance—and I am one of them—will know the great difficulties there are for any Government bringing in legislation surrounding this great industry. In many respects one is never right so far as all the parties to the business are concerned; but I think that, as a result of the long deliberations on this Bill in your Lordships' House, considerable progress has been made to increase confidence in the insurance industry which at one time was being rather suspected. I should like particularly to wish success to the members of the Board which has been set up, because they will be very largely responsible for operating this Bill and, indeed, all the current legislation on the insurance industry. It may be that we shall need further consolidating measures on this, but I think that, even though the Bill still has shortcomings, this has been an example of Members of this House on all sides who have knowledge and experience of the industry putting their wits together and achieving what is the purpose of this House in a matter of this kind: to be a very sound revising Chamber. I, for one, wish the Bill well.
Lord HARMAR-NICHOLLS: My Lords, I feel constrained to say a few words in view of the comments of the noble Lord, Lord Houghton. I am connected in a small way with an insurance company and I have been so for some years. I am conscious of the fact, having served in one section or another of Parliament with the noble Lord, Lord Houghton, that his words carry weight outside the confines of the Chamber where he utters them. I am rather sad that he thought to add his authority to the comments made to him by his friend (in whom he said he had confidence) who had interpreted this measure as meaning that the insurance companies of this country were weak and unable to honour their obligations. That is a terrible thing even to suggest for one moment in this country when the invisible exports so valuable to us come from that source—and particularly when I do not think there is one iota of evidence for suggesting that is so. Indeed, the very fact that the Government have thought fit, with the co-operation in this case of the Opposition, to

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anticipate problems that may hit not only the insurance companies of this country but of the world—and that they anticipated that in order to ensure that the great reputation we have built up over the centuries will continue with some certainty—is a measure of strength. I do not think it warranted the comments that came from the noble Lord, Lord Houghton, with his past great service as a Minister in Government and with his reputation in this field outside.
Nor could I understand, coming from him as an experienced Parliamentarian, why he felt it wrong that there should be criticism on Second Reading followed by some compliments being paid when the measure was examined in detail and with care. It does not need me to tell him that it is an accepted fact that politics is the art of the possible; and that what you aim at, despite divergences of views which are real and wide at the beginning is the point where all who have to operate these things in the future can reach some common ground.
I must say that I have many reservations as to the timing and necessity; but I believe that the thought and care given to it and the result that came out is in the best traditions of Parliamentary working, and I should like to say from my unimportant niche in the insurance world that in a world where many things are uncertain, the strength and ability of the British insurance companies to meet their obligations has never been surer than it is today.
On Question, Bill passed, and sent to the Commons.

FAIR EMPLOYMENT (NORTHERN IRELAND) BILL [H.L.]
5.17 p.m.
Report received.
Clause 3 [Meaning of "equality of opportunity".]:
The PARLIAMENTARY UNDERSECRETARY of STATE, NORTHERN IRELAND OFFICE (Lord Donaldson of Kingsbridge)The PARLIAMENTARY UNDERSECRETARY of STATE, NORTHERN IRELAND OFFICE (Lord Donaldson of Kingsbridge) moved Amendment No. 1:
Page 2, line 33, after ("any") insert ("material")
The noble Lord said: My Lords, with the permission of the House I should like to speak to Amendment No. 3 as well. In Clause 3(4) there is a definition of "difference in suitability" and, on reflection, we have come to the conclusion that a positive definition of anything as wide as this is rather dangerous. So we have removed the positive definition under Amendment No. 3, and under Amendment No. 1 we have put in before the word "difference" in Clause 3(2) the word "material". This has the effect of changing the present wording from:
"due allowance being made for any difference in their suitability."
into:
"due allowance being made for any material difference in their suitability."
We feel that this is clear, and we will put the onus for deciding what is material and what is not on the courts where we think it properly belongs. I beg to move.
On Question, Amendment agreed to.
5.20 p.m.
Lord DONALDSON of KINGS-BRIDGE Lord DONALDSON of KINGS-BRIDGE moved Amendment No. 2:
Page 2, line 37, after ("have") insert ("and hold")
The noble Lord said: My Lords, this Amendment inserts after the word "have", the words "and hold"; in other words, the sentence will read:
" to have and hold it on any terms,".
This is a perfectly clear extension of the idea of having, and I hope noble Lords will think it is a useful clarification.
On Question, Amendment agreed to.
Lord DONALDSON of KINGSBRIDGE: My Lords, I have already referred to subsection (4) of Clause 3 which this Amendment deletes. It is a consequential Amendment. I beg to move Amendment No. 3.
Amendment moved—
Page 3, line 16, leave out subsection (4).—(Lord Donaldson of Kingsbridge.)
On Question, Amendment agreed to.
Clause 4 [The Fair Employment Appeals Board]:
5.22 p.m.
Lord BELSTEAD Lord BELSTEAD moved Amendment No. 4:
Page 3, line 25, after ("Department") insert ("and one of whom shall be legally qualified").
The noble Lord said: My Lords, the effect of this Amendment would be to require the Fair Employment Appeals Board to have one legally qualified member on the Board. At the previous stage of this Bill, the Government pointed out that Part II is constructive in that it seeks to promote equality of opportunity, and that the Agency must try to achieve this by sensible discussion, conciliation and agreement. I entirely agree with the point of view the noble Lord, Lord Donaldson of Kingsbridge, put forward. This Amendment concerns the occasions—let us hope they will be few—when agreement is not reached, and the Agency has to give directions, and then the person concerned lodges an appeal. I think that the Agency, as well as the person concerned, will feel that justice has been done only if at least a member of the Appeals Board is legally qualified.
Clause 14 makes it clear that the Board can decide for or against not just the person lodging the appeal, but the Agency—both parties are involved. In Clause 14(4) the Board has the power to quash the Agency's directions or substitute other directions. With powers like that, it is going to be essential from the Agency's point of view that the Board should have its full confidence. The Board can also dismiss the appeal. Once that has happened, the person concerned can be taken to court under Clause 15. I do not think people in industry and commerce will understand why, if they can be taken to court subject to appeal, the appeal cannot be heard by a Board which has at least some legal qualification. I have discussed this matter with the Government since the Amendment was put down at a previous stage, and I have slightly altered the Amendment. I hope that, in its new form, it will appeal to the Government. I beg to move.
Lord DONALDSON of KINGSBRIDGE: My Lords, we always go as far as we can to meet the noble Lord's suggestions. I was hostile to insisting that the chairman of the Appeals Board should be legally qualified. I thought it was tying it down too much. Though I have not quite the noble Lord's faith in the effectiveness of lawyers, nevertheless, I can see no objection to insisting on some legal expertise on this Board. We are
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therefore prepared to accept this Amendment in principle. I should like the noble Lord to withdraw the Amendment on the understanding that I put down something of the same kind later, because there is a technicality which we want to look at. In other legislation, a "legally qualified" person is more closely defined, and is described in some Acts as meaning a barrister or solicitor of seven years' standing. We think it may be preferable to make this more specific. In principle, I will accept the Amendment, and I hope with that the noble Lord will feel able to withdraw the Amendment.
Lord BELSTEAD: My Lords, I am most grateful. I beg leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
Clause 13 [Undertaking or directions for remedying of certain practices]:
Lord BELSTEAD Lord BELSTEAD moved Amendment No. 5:
Page 9, line 2, at end insert—
("but, in order to secure action to ensure equality of opportunity, the Agency shall not impose any form of employment quota upon the person concerned").
The noble Lord said: My Lords, this Amendment was one of an original group of Amendments and it remains because it seems clear, having read the Report of the previous stage of the Bill that, despite assurances from the Government, the Bill will allow the Agency to impose employment quotas after carrying out investigations under Clause 12. The idea of quotas was rejected by the Working Party on Discrimination in the Private Sector of Employment. It was similarly criticised by the Government in strong terms in Committee. The problem, as I see it, remains that if the Agency discovers an imbalance between denominations which cannot be accounted for on grounds of suitability, then it might give directions that the imbalance must be rectified, and as soon as it took that line then, in effect, a quota wuold be imposed.
I accept absolutely that the Agency ought not to go about its work in this way, and that if an investigation leads to the conclusion that equality of opportunity is not being provided what the Agency ought to do is work out with the person concerned the methods by which the position can be put right. This

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would entail such things as improving the advertising methods of the firm concerned, or interview procedures or improving training arrangements, but certainly not just laying down employment quotas. If the Government can show that the wording of the Bill prevents the imposition of quotas, I shall be absolutely satisfied. Otherwise, I hope that this Amendment, or a declaratory provision along the same lines as this Amendment, may be considered for a later stage of the Bill.
Lord DONALDSON of KINGSBRIDGE: My Lords, I must repeat what I said on Second Reading. The Government agree 100 per cent. with the noble Lord's intentions. We have absolutely no doubt that this Bill not only does but must outlaw quotas as a solution to the problems with which we are trying to deal. As a rule, if something is already clearly implicit in a Bill, it is very dangerous to say it again in one place. For example, the statement that it applies to this clause suggests that it may not apply to other clauses. If an Amendment of this kind were to be made, the Bill would have to be gone through from the beginning to the end and the point would have to be mentioned again and again.
I do not want to argue this at great length, because it is rather a waste of the time of the House in that we agree completely over the intention. One possible alternative might alleviate the noble Lord's anxieties. We are to have a guide to manpower policy and practice and I should be happy to undertake that this point will be made unequivocally therein. I do not know whether that would satisfy the noble Lord. If not, I am so anxious that there should be no doubt about what he wants done that I will look at it again. We have looked at it closely and we are quite clear that the Bill outlaws the quota system by its definition of "fair employment ". So we are not really worried about it. I put that forward as a proposition. If the noble Lord will not accept that, I shall have to go over the arguments we had before and see whether I can convince him in that way.
Lord BELSTEAD: My Lords, I should be happy if this were specifically put into the guide to manpower policy and practice. Whether the final words of the noble Lord make it clear to the House that it is
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implicit in the definition that quotas will be outlawed, I do not know. It is clear to me, because the noble Lord has been kind enough to write to me and he made that point and one or two others which also encourage me in this matter. Although this is a matter to which I attach the greatest importance, it would be a disaster—as, indeed, I think both sides of the House agree—if quotas were to be imposed. Despite that, even though this has seemed to be a very short exchange, I am happy to accept the noble Lord's assurance and I beg leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
Clause 16 [Meaning of "discrimination" and "unlawful discrimination"]:
5.32 p.m.
Lord BELSTEAD Lord BELSTEAD moved Amendment No. 6:
Page 11, line 32, at end insert ("due allowance being made for that other person's suitability.")
The noble Lord said: My Lords, in Committee a good deal of this Bill was explained, and I should like to express my gratitude to the noble Lord, Lord Donaldson of Kingsbridge, for the help which he and the Northern Ireland Office have given in clarifying various details in a Bill which I do not find at all straight forward. Having said that, I am bound to say that there is one aspect of the Bill which concerns this Amendment which causes me some misapprehension. That is the enormously wide discretion which is to be left to the Agency. In Clause 3 of the Bill, at least, there is some general guidance given to the Agency; namely, that equal opportunities shall be subject to the suitability of those concerned. It is this provision which this Amendment would also seek to write into Part III. I am rather surprised that it is not there already. All we had in Clause 16, which introduces Part III of the Bill, is the definition of "discrimination", which is:
"on the ground of religious belief or political opinion … in any circumstances."
Those are the words of the Bill—"in any circumstances".
The Government may be ready to say that this Amendment is unnecessary, because if the question of suitability arises there will be no discrimination on grounds of religious belief or political opinion,

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because we are talking about suitability. But the difficulty arises if the suitability of the applicant depends partly or wholly on his religious beliefs or political opinion. In Committee, on the debate on the Question, Whether Clause 16 shall stand part of the Bill, I sought to put to the Government the point that an employer will be in a very difficult position indeed if he or she is confronted with an applicant who may, so the employer believes, cause trouble of a grave sort. It may be that the applicant has a record of violence, or is possibly still involved in violence. If the employer genuinely believes that those two criteria are fulfilled, how can he do other than wish to reject an applicant?
When my noble friend Lord Brooke-borough was speaking in the same debate, he gave some telling practical examples which included the case of an applicant for employment who could, my noble friend was advised, very well be subverted by violent men. My noble friend asked how he could reasonably have employed such a person. In replying to that debate, the noble Lord, Lord Donaldson, said,
"If, however, there is a man who is known to have associated with men of violence, or who is likely to be subverted, as the noble Viscount suggested, by men of violence, I can say only that if I were the chairman of the Fair Employment Agency I should say, 'This is a good reason for not employing him'. I cannot say that everybody will. In my opinion you simply cannot lay this down in a firmer way".—[Official Report, 17/6/75; c. 809.]
This Amendment is an attempt to lay it down in a firmer way—an attempt to lay down what I believe was the noble Lord's very reasonable interpretation of the way in which this Bill should work. This Amendment does no more, in essence, than repeat the word "suitability" which is already used in Clause 3. In this clause it would make the definition of "discrimination",subjecttoan employee's suitability.
Following the Government's Amendment No. 1, I should, of course, be only too ready to alter the wording of the Amendment to "material suitability ". If we do not have a form of words which make it clear that if a person's religious belief or political opinion affects his suitability for the work in question then that person can be refused employment without discrimination, we are asking for
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trouble. I do not necessarily ask the Government to accept this Amendment here and now; it could very well be defective. But I ask that the Government will consider this very difficult problem further, and possibly return to it at a later stage, perhaps with an Amendment of their own. I beg to move.
Lord DONALDSON of KINGSBRIDGE: My Lords, in many ways, this is the nub of the Bill. To some extent the noble Lord anticipated my reply, although I think he understated it. You cannot do better than give a positive instruction here. Clause 16(2) makes discrimination on the grounds of religious belief or political opinion, or by way of victimisation, unlawful. This means that discrimination because of the colour of a man's hair, or because you like his wife or any other reason, does not come under this Bill. It is simply confusing the issue to talk about suitability. This is talked about at the beginning on the question of fair employment practices. This is a definition of the ways in which the Bill forbids one to discriminate against an employee. It seems to me that this is as clear as it can be. The detailed working out, as a result of arguments put forward, will clearly be difficult.
If somebody complains to the Agency he is being discriminated against on religious grounds, and the Agency takes it up with the employer who says that it is not because he is a Catholic but because he is a very bad worker, then the answer, if true, is complete. Of course, one can challenge whether or not it is true. This is where the difficulty arises. There is no difficulty in law or in theory; the difficulty is in practice. By writing something in here, we will not get away from the difficulty. Anybody who belongs to a religion which produces emotional overtones of the kind which exist in Northern Ireland will say, as we found under the Race Relations Act in many cases, that he is being discriminated against for those reasons. The employer has to show to an impartial and educated body that there are other reasons which stand up, and one cannot put this into legislation. One has to give a very long list defining all the different meanings of "suitability". Suitability is not enough. As I have said it will be quite legal to

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discriminate against a Catholic because he has red hair, if you can make this stick, but it is illegal to discriminate against the person simply because he is a Catholic. I do not think this will help us at all.
The van Straubenzee Working Party said, in paragraphs 80 to 86 of their Report, that employers and others have a duty to stand up for fair employment principles and the law should encourage them to do so. This, it seems to me, is exactly what the clause does. In the end an employer has to be prepared to say: "My reason for not employing this man is as follows"—and that has got to stick with the Agency. If it does not stick, then the Agency will reasonably conclude that it is not true, that the defence is an inadequate one and that there is religious discrimination. But this sentence, with the best will in the world, in my opinion and in the opinion of my advisers, adds absolutely no further strength here, and carries some possibility of confusion.
I think this is a very important Amendment and I do not want to treat it cavalierly. But I do not think that talking about it any more will make any clearer my objection to it. I hope I have convinced the noble Lord. I am quite prepared to talk about this further, but I do not think that my mind is likely to change, and I hope that in view of my explanation—which I think is very clear—he will not find it necessary to press the Amendment.
Viscount BROOKEBOROUGH: My Lords, I should like to support my noble friend Lord Belstead. This is a very difficult problem indeed and the noble Lord really has not answered the question which may arise in this "grey area" where somebody is not a bad worker and not actually involved in violence but is in a position where to employ him in a certain capacity would put the employee at a disadvantage and render him liable to be subverted. I think this is only a matter of opinion. It cannot stand up in law. So you then get to the question: is this the right time in the present state of Northern Ireland for this sort of thing to occur and for this Bill to be passed? I should like to ask the noble Lord whether he would look further at this matter to see whether it would be possible to accommodate my noble
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friend's intention and still pass the Bill. I am behind the principle absolutely, but I feel that this is a very difficult area, because at the present moment there is no confidentiality and no guarantee, when discussing these matters with the Board and the Agency, that the correspondence or statements involved will not in fact be available to the public. It seems to me that we are on very difficult ground here.
Lord DONALDSON of KINGSBRIDGE: My Lords, if I may speak again, by leave of the House, I am a little depressed that the noble Viscount thinks this is the moment to discuss whether we should have this Bill at all—
Viscount BROOKEBOROUGH: No, my Lords; I did not say that.
Lord DONALDSON of KINGSBRIDGE:—because that was really the burden of his speech. If the noble Viscount is saying that there are some cases where it would be right to differentiate on the grounds of a person's religious belief—and I am not sure that this is not at the back of his mind—then of course Clause 34(3) enables the employer to discriminate where the essential nature of the job requires it. That, combined with what I said in my first answer, really makes things perfectly clear. I do not think one could go further.
Lord BELSTEAD: My Lords, may I, with the leave of the House, say one further word? I should like to make it clear that the purpose of this Amendment was not to breach the intention of the Bill. I am interested that my noble friend Lord Brookeborough, who lives in Northern Ireland and has to deal at first hand with matters of this sort, has intervened on this Amendment.
My intention in moving this Amendment was not to breach the intention of the Bill in order to allow somebody to discriminate against somebody else in certain circumstances because of their religious beliefs or political opinion. My intention was very much the same as that voiced by the noble Lord, Lord Donaldson, in Committee. Perhaps I may just give another brief excerpt of what he said at that time. Replying to several points which have been raised, the noble

1613
Lord said, at column 808 of the Official Report of 17th June 1975:
"In the first place, no employer will be accused of discriminating on religious or political grounds if he says, ' I think that this man is going to cause trouble in my factory'. This is a fact which has nothing to do with religion or politics. It may be due to religion or politics, but it is a fact in itself and nobody who has had the advice of the Security Forces that three or four people were dangerous IRA men would fail to convince a sensible Fair Employment Agency that they had good reason not to employ them."
This Amendment was an attempt to put those views, which were spoken by the noble Lord from the Dispatch Box, into the Bill. I feel very strongly that when the noble Lords says that the employer has to show, when he is taking a decision, that there are reasons that stand up, other than the discriminatory reasons referred to in the Bill, the difficulty we have to contend with is that to be absolutely practical some of those reasons may flow, as the noble Lord himself showed in the excerpt that I have just quoted, because of a person's religious belief or political opinion.
I tried to make it clear in moving the Amendment that I was in no way set on the wording of my particular addition to the draft. I am not convinced by what the noble Lord has said; what I am convinced of is that this is the most difficult part of the Bill and the part of it which will give people more trouble than anything else. We still have a few days before Third Reading and I should like, if I may, to take it away and ask advice about it, because I am not a lawyer. If then I feel that the noble Lord really is wrong, with great respect, then if the House will allow me I shall put it down again and if there was still disagreement I think we should have to divide on it. I beg leave to withdraw my Amendment.
Amendment, by leave, withdrawn.
Clause 17 [Discrimination against applicants for employment and employees]:
5.47 p.m.
Lord MONSON Lord MONSON moved Amendment No. 7:
Page 12, line 34, at end insert—
("( ) Subsection (1)(a) shall not make it unlawful for an employer to give preference to members of his family when offering employment.")
The noble Lord said: My Lords, I beg leave to move Amendment No. 7. This was inspired by a lengthy discussion in Committee regarding the problems which might be created by the Bill for small employers. It appears that the Government are totally opposed to deferring for longer than the three years which the Bill already provides, the application of this Bill to the really small employer; in other words, the employer who employs less than ten persons other than those in his private household. I am not entirely sure that the noble Viscount, Lord Brookeborough, and I believe this to be wise, but we accept that this is the Government's position. Therefore I submit to your Lordships that this Amendment No. 7, together with Amendment No. 16, which briefly provides that any failure on the part of a small employer to advertise publicly offers of employment, shall not in itself constitute discrimination, may possibly go a long way towards removing part of the threat which small employers may feel this Bill poses for them, without in any way weakening or watering down the Bill.
The noble Lord, Lord Donaldson, said in Committee that he thought it was perfectly reasonable for people to employ their friends. Anticipating possible Government objections, I have not included the word "friends" in this Amendment. I have confined it to members of the family, and I am advised that such a phrase is preferable to using the word "relations", because this includes common law wives, adopted or foster children, family retainers, farm labourers who live in the same house as the farmer and his wife, and so on. I think it is desirable that the provisions of the subsection ought to apply to such people.
I have also confined it specifically to subsection (1)(a) of Clause 17; in other words, it will apply only to people seeking employment. Once they have been employed, they are then on a par with all other employees and will have no preference so far as dismissal, and so on, is concerned. I feel sure that all of us on all sides of the House believe in encouraging family firms. By the nature of things, this will apply only to small shopkeepers who are worried about whether they can safely employ their son-in-law without advertising, and so on. By the nature of things it cannot

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apply to very large firms, and I hope therefore that the Government will accept this Amendment. My Lords, I beg to move.
Viscount BROOKEBOROUGH: My Lords, may I support the noble Lord. Lord Monson, on this matter.
5.50 p.m.
Lord BELSTEAD: May I, too, say a word in support of the noble Lord. I am not particularly keen on Amendment No. 7, for reasons which no doubt the Government will give, but I think that Amendment No. 16, without much further discussion, is self-evidently a sensible Amendment. May I ask the noble Lord, Lord Donaldson, one question which perhaps he can deal with in replying. If the Government are going to resist the noble Lord, Lord Monson, on Amendment No. 16, doubtless they will make the point that if other people must advertise in a proper way so as to avoid discrimination, so should the small employer. But does this mean going to the full extent on the matters which were referred to in the van Straubenzee Report? I should like the noble Lord to address himself to a small farmer, for instance, who employs three men. A complaint occurs and an investigation ensues, and then the Agency feels that it must make some recommendation to that man. Is that farmer then going to be told not only that he must advertise widely but also that he must contact local training establishments and even go around the local schools to make sure that to some extent he is going to mix up his labour force? This is a reasonable question and certainly relates to a problem which the noble Lord's Amendment would solve.
Lord DONALDSON of KINGSBRIDGE: My Lords, we are deeply involved in two Amendments which are widely separated. I take it that your Lordships would like me to address myself to them both. If this is what is wanted, I would point out that the noble Lord, Lord Monson, has not moved Amendment No. 16 but the noble Lord, Lord Belstead, has been speaking about nothing else—
Lord BELSTEAD: My Lords, with permission I would say that the noble Lord asked whether the two Amendments
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might be taken together, and I think that silence meant consent.
Lord DONALDSON of KINGSBRIDGE: My Lords, with respect I do not think that the noble Lord did ask that, but in any event my few words meant acceptance; consent is with you and we need not worry about that. The noble Lord, Lord Belstead, is quite right about Amendment No. 7. It is supererogatory. It is suggesting that if one gives a reason other than a religious or political reason—in other words if I say. "This man is my first cousin once removed"—this must nevertheless create a religious or political objection. There is no suggestion of any kind of this; it does not arise anywhere. You will leave the position much more safe if it is left alone. There is a case against somebody which can be put up to the Fair Employment Agency if it can be shown that he is discriminating against a man on his religious or political opinions. But if one says, "I have taken on this chap because he is my uncle and the other chap is not", it is a complete answer. Noble Lords need not go any further. It seems to me as clear as a bell. Unfortunately, on the last Amendment I did not carry Lord Belstead with me, but I hope I can carry him on this. I certainly would want to reject Amendment No. 7 on the grounds that the position is already perfectly well dealt with in the Bill.
When we come to Amendment No. 16, this is confusing because the Bill does not expressly demand advertising as a condition which must be met to produce equality of opportunity. Certain kinds of firms in certain districts may not advertise, or advertise only in the Protestant and not in the Catholic newspapers, or whatever the publication may be, and part of a direction from the Fair Employment Agency to them might cover this. But as a general principle it does not arise anywhere. We are here considering firms of fewer than ten. A small farmer may have one or two employees—of course in Northern Ireland a farmer with three men is a large farmer. They would almost certainly be members of his family, but if they are not, exceptionally, nobody would suggest that the farmer should advertise if he did not want to. To suggest otherwise is, if I may say so without meaning to be offensive, looking for trouble which does not

1617
exist. I am not worried about this position at all.
However, the noble Lord opens the whole question of the small employer and, while I am on my feet, it might be as well to make one or two remarks about it. This concerns a large part of the working population of Northern Ireland. There are 30,000 establishments there, of which 24,000 employ fewer than ten people. So the Bill is already going gently. It applies initially to less than a quarter, or at any rate to only a small proportion of the total number of establishments. The number of establishments with fewer than five employees is 18,000. So we are speaking about the main group of employers in Northern Ireland, although of course we are not speaking about the greatest number of employees because the big firms employ very large numbers. However, in general, discrimination is not I think alleged only against large firms. The large firms will I think respond far more readily to legislation of this kind, and will be far more willing to do so, than many of the small firms. So one cannot start ditching the principle at this stage. If we do not want to have it at all, we should throw the whole thing out. But if we are going to have a Fair Employment Bill for Northern Ireland we cannot exclude employers who employ fewer than ten men.
I hope I have cleared the point about advertisements. In any event, this Amendment would not do as it stands. I know that the noble Lord had in mind the whole problem of the small employer. I suggest that by giving three years before this Bill applies to the small employer the Government have gone as far as they reasonably can while keeping good faith with those people who are the complainants—on both sides—but mostly I think on the one side—by doing something to put right this very disagreeable wrong which we all admit exists. I do not feel at all inclined to budge on this point.
Lord MONSON: My Lords, with the leave of the House I would say that I am very pleased with the reassurance of the noble Lord, Lord Donaldson, that the small employer who wants to employ a member of his family is better protected by leaving the Bill as it is rather than accepting Amendment No. 7, and there
1618
fore I will not pursue that matter any further. It is perhaps my fault for not making myself clearer, but I did not in fact move Amendment No. 16; I merely touched upon it. I am not entirely in agreement with what the noble Lord says in that connection and believe it would be better to leave the matter until we reach that Amendment. I entirely accept what the noble Lord says about the Bill's applying to the small employer generally, but I wanted to refer to one or two exceptions. However, I beg leave to withdraw Amendment No. 7.
Amendment, by leave, withdrawn.
Clause 21 [Investigation of complaint of unlawful discrimination]:
5.59 p.m.
Viscount BROOKEBOROUGH Viscount BROOKEBOROUGH moved Amendment No. 8:
Page 14, line 13, leave out ("has died or").
The noble Viscount said: My Lords, I beg to move the Amendment which stands in my name. I understand that for the purpose of this clause the Bill could have provided one of two methods: one by creating a tort and the second by providing a statutory wrong. The Government have decided to provide a statutory wrong. I am told—I have taken advice on it—that, normally speaking, with a statutory wrong the whole proceedings cease. Had it been a tort, they could in fact have continued. The similar kind of statutory wrong which I quoted previously would make this Bill comparable with the Race Relations Act and the Sex Discrimination Bill.
In neither case did the Government consider that it was necessary to provide that the right of action should not cease at death. It is also interesting that in the Trade Union and Labour Relations Act they felt that it was unnecessary to create this statutory wrong in the case of unfair dismissal. I shall be interested to know—I have given the noble Lord warning about this—why the Government have decided to act differently in this matter.
Lord DONALDSON of KINGSBRIDGE: My Lords, if I may clear up the question of tort—I hope that I do not get it wrong—action by the Fair Employment Agency on a, to them, proved

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discriminatory action; in other words, a dismissal or a refusal to employ somebody under Part III, is an action in tort in the county court. I hope I am right in saying that, but it does not affect the general principle. The Acts that we are keeping in line here are not Sex Discrimination or Race Relations but the Parliamentary Commissioner Act (Northern Ireland) 1969 and the Commissioner for Complaints Act (Northern Ireland) 1969, both of which are analogous to this Bill in that they are concerned with complaints. Therefore I reject the analogy argument. This is a better analogy than Race Relations or Sex Discrimination. However, in our discussions during Committee it was the noble Lord—if not, somebody else—who said that it should not be possible for people to go on for ever suing others after death. I entirely agree with this, but if one looks at the Bill with some care one finds that by subsection (3) of this same clause there is strict limitation to prevent stale claims from being pursued long after a person's death; so this is not a reasonable accusation.
The case one must visualise is the case of a man who, quite frankly, has been victimised—who has been sacked from a good job and who has been trying for three months, for example, to get his case established. Finally, he gets his case established by the Fair Employment Agency, and the Fair Employment Agency is about to bring a case in tort against the employer, having failed to reach agreement, through the courts, when the man dies. This man has lost the compensation to which he would have been entitled if he had not died and the case had been proved to the satisfaction of the Fair Employment Agency. We maintain that the wife and children are entitled to the court's verdict in a case of this kind, and this is all that the "has died "does. I ask noble Lords not to take out these words, because it would be the greatest possible mistake. It is not liable to abuse in any way. It would be the greatest possible mistake to limit something which was so nearly already proved and agreed just because a man had died. I see no justice in it and I hope that the noble Lord will not press it.
Lord MONSON: My Lords, I rise to support my noble friend Lord Brooke-
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borough. The noble Lord, Lord Donaldson of Kingsbridge, has cited the case of a man who has been victimised, and I see his point; but a man who is victimised because of his race, or a woman who is discriminated against because of her sex, or someone who appeals under one of the provisions of the Trade Union and Labour Relations Act are surely in exactly the same boat, and yet it appears that they do not have this remedy.
The noble Lord may consider that this Bill is analogous to the Parliamentary Commissioner (Northern Ireland) Act, but other people may, with equal good faith, consider that it is more analogous to these other Acts which we have been discussing. It would be most unfortunate to give the impression that the provisions of Acts of this kind will apply more harshly in Northern Ireland than in the rest of the United Kingdom because it will lessen the chance of widespread voluntary acceptance. However, as other noble Lords do not appear to feel very strongly about it I suppose we had better withdraw the Amendment.
Viscount BROOKEBOROUGH: My Lords, with the permission of the House may I say that I am thankful to the noble Lord for his remarks. I do not think that the noble Lord mentioned in Committee the analogous Acts—at least, not in the columns of Hansard that I have here. The noble Lord has been very helpful and I should like to have a look at what he has said. While I am on my feet, may I also say that every single clarification that the noble Lord has given of all of these clauses has been very helpful. When we have dealt with all the Amendments, may I ask the permission of the House to make a run for the aeroplane in order to get back to Northern Ireland, because I want to get back there tonight if I possibly can.
Lord DONALDSON of KINGSBRIDGE: My Lords, with the permission of the House may I say that the noble Viscount does not require the permission of the House to do that.
Viscount BROOKEBOROUGH: My Lords, then it is out of courtesy that I ask for permission. I beg leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
Clause 28 [Powers of court as to damages and injunctions]:
6.5 p.m.
Lord DONALDSON of KINGSBRIDGE Lord DONALDSON of KINGSBRIDGE moved Amendment No. 9:
Page 19, line 12, at end insert ("and").
The noble Lord said: My Lords, I beg to move Amendment No. 9. We agreed in Committee to remove the clause which made injury to feelings relevant to the assessment of damages. It is Clause 28(1)(c) which has been removed. In order to make that fit into the rest of the clause we need to add "and" to the end of paragraph (a), and to remove "and" from the end of paragraph (b). I hope that this will be acceptable to your Lordships.
On Question, Amendment agreed to.
Lord DONALDSON of KINGSBRIDGE: My Lords, I beg to move Amendment No. 10.
Amendment moved—
Page 19, line 16, leave out ("and").—(Lord Donaldson of Kingsbridge.)
On Question, Amendment agreed to.
Lord DONALDSON of KINGSBRIDGE: My Lords, I beg to move Amendment No. 11.
Amendment moved—
Page 20, line 18, leave out ("or the injury mentioned in subsection (1)(c)").—(Lord Donaldson of Kingsbridge.)
On Question, Amendment agreed to.
6.13 p.m.
Lord MONSON Lord MONSON moved Amendment No. 12:
After Clause 29, insert the following new clause:
". Any testimony given to the Agency or to a county court under the provisions of this Part shall be privileged."
The noble Lord said: My Lords, I beg to move Amendment No. 12 which stems from what I believe to be an extremely valid point which was made by the noble Earl, Lord Onslow, in Committee. He cited the case of an employer who said to the Fair Employment Agency, "I have reason to believe that this man is a dangerous IRA man", and he asked whether that man could sue for libel if he heard about it. The noble Lord, Lord Donaldson of Kingsbridge, replied:
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"You can always sue for libel if you think that it is libellous to be called a member of the IRA. Most of them do not think that it is libellous!"—[Official Report, 17/6/75; col. 808.]
The corollary of that is that some of them do think that it is libellous.
I tabled the Amendment with some trepidation, because I drafted it without the benefit of legal advice. However, I was subsequently advised that legally it makes sense, the only doubt being whether it is necessary in view of the fact that testimony in a county court and before tribunals is normally privileged, anyway. Obviously, however, the noble Lord, Lord Donaldson of Kingsbridge, did not think so, otherwise he would not have made the reply that he made in Committee. Furthermore, the question of privileged testimony presumably refers to testimony given in a tribunal or in court and would not cover written evidence in the event of a letter going astray and falling into the wrong hands. There would be a danger there. It may be that this Amendment is in some way either defective or possibly unnecessary, in which case I shall certainly withdraw it, but perhaps the noble Lord will advise me on that point.
Lord DONALDSON of KINGSBRIDGE: My Lords, I think it is a relevant Amendment, but it is unnecessary and I hope to show why. However, it is a perfectly sensible point to raise at this stage. If we are considering defamation—and I think this is the main point of the Amendment, although it could apply to confidentiality in general as well—the general law applies in the ordinary way. Any proceedings in the county court will attract absolute privilege; that is, all witnesses will have complete immunity from any proceedings in connection with anything they have said in court. So far as proceedings before the Agency and the Appeals Board are concerned, they are not courts of law and therefore proceedings before them will probably not attract absolute privilege. However, parties to proceedings and witnesses will have the protection of what is called "qualified privilege", which is a legal term to define the fact that they will be protected against proceedings for defamation, unless it can be shown that they acted maliciously, which is a reasonable defence for this kind of thing. I hope that that answers the noble

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Viscount. If he would like me to say anything more about confidentiality on this Amendment, I am quite prepared to do so. But I do not think this is the point in the noble Viscount's mind.
Viscount BROOKEBOROUGH: My Lords, I am very grateful indeed to the noble Lord for explaining this matter, because it seems to me that if the Agency is to work properly it must create confidence between the employer and itself. It seems to me that there ought to be a time in the communications between the two when they can speak with complete and absolute frankness, both on paper and verbally. The fact that the noble Lord has explained the position in that way goes a long way towards meeting the problems that we raised.
Lord MONSON: My Lords, I thank the noble Lord for his reply which certainly satisfies me as a layman, and I beg leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
Clause 39 [Acts done to safeguard national security, etc.]:
6.12 p.m.
Lord MONSON Lord MONSON moved Amendment No. 13:
Page 24, line 33, leave out from (" security ") to l" if ") in line 34 and insert (" , protecting public safety, public order or the safety of individuals or preventing unlawful damage to property").
The noble Lord said: My Lords, this Amendment was inspired by, one might say, the problems on the ground raised by the noble Viscount, Lord Brooke-borough, in Committee. He cited a number of cases at considerable length from his own experience, where it was found dangerous or risky to employ people and where the Bill as it stands might make it difficult if they were to be denied employment. As Clause 39 stands, the provisions of the Bill do not apply to actions for the purpose of safeguarding national security or protecting public safety or public order.
These are rather vague terms. For instance, public safety in particular has a totally different meaning in French from any one of the possible meanings in English. One associates "public order" with the 1936 Act designed to prevent clashes between the Mosleyites and the
1624
Communists. Certainly, to a layman, it does not appear to include protection for private individuals against death or injury, such as kneecapping, and that sort of thing, nor does it include protection for private property. That is why I have inserted the words "the safety of individuals" and "preventing unlawful damage to property ", the word "unlawful" being inserted to prevent any action being taken against councils who wish to demolish property for reasons of road widening, or anything of that sort and also accidental damage. I hope that this Amendment will prove acceptable to the Government. I beg to move.
Lord BELSTEAD: My Lords, I should like to say from this Bench that I have a great deal of sympathy with what my noble friend is trying to achieve, particularly because I had hoped that when we came to it I should be able to say, that as Amendment No. 6 had been accepted this Amendment would not be necessary. Amendment No. 6 was most certainly not accepted and I feel very strongly that this central difficulty in the Bill will prevail. People will not be sure whether the suitability of a person for a job, which stems from their political opinion or religious belief, is something which will, make them liable to be complained against for discrimination. But having said that, I feel I ought to say that I really cannot believe that in practice this Amendment will work. I am surd that the noble Lord, Lord Donaldson of Kingsbridge, will be able to explain much better than I can the reasons for this, but I thought it might be helpful to the Government, and also fair to my noble friend, if on the one hand I said that in principle I have sympathy with him, but on the other hand, in practice, I do not think that this Amendment is a practical proposition.
Lord DONALDSON of KINGSBRIDGE: My Lords, I prefer the noble Lord's practice to his principle. The clause as it stands exempts employers who can plead the protection of public safety, et cetera, from the duties imposed by the Bill. If you are manufacturing on the order of the Government some secret weapon or something of that kind, under this clause and with written authority from the Secretary of State, you can say, "I am not making any pretence at fair employment. I am going to

1625
choose people who have a certain security rating, irrespective of anything else." It gives you the right to ignore the ordinary rules of fair employment for a very special, very secret and—from the national point of view—very important reason which has to be verified by the Secretary of State. Clearly, any Bill of this kind must have that sort of provision in it.
But if you are going to extend that to private individuals, to private damage, to risks of kneecapping, then goodness knows!—the Secretary of State will be writing letters all day. I really do not think this was the intention of this clause, nor do I think it should be used in this way. I believe there is a confusion in the noble Lord's mind as to what happens. This suggests that a man says, "I have an absolutely splendid factory here. I cannot afford to employ the ordinary fair employment rules, because it is too valuable. I want to be excused from the ordinary rules and to have nothing but a Swiss Guard, like Louis XIV." This would be totally unacceptable in relation to one man's personal affairs, and it seems to me that there is no intention of covering that kind of situation with this Board.
I must ask the noble Lord to withdraw the Amendment, because I believe it would make the whole Bill unworkable. This clause is intended to give a very special exception to very special matters of the highest State importance, where it is reasonable not to exercise the kind of fair employment practices which this Bill is demanding. This does not apply to any private individual or to private affairs, and cannot so apply. I hope the noble Lord will be convinced by what I have said and will feel that he can withdraw the Amendment.
Lord MONSON: My Lords, with the leave of the House I must say that I am rather dismayed by the noble Lord's reply, because the definitions of "public safety" and public order "are evidently much narrower than even I had feared. I am thinking not necessarily of factories, but of people's houses, their haystacks, their Land-Rovers or whatever it might be and while they are not equally important, they ought to be protected. I see the dilemma cited by the noble Lord on the
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question of the Secretary of State; obviously he would be signing things the whole time. I had not realised that Clause 39 applies specifically to questions of high national security, so it is obviously not a suitable clause for an Amendment of this sort. For that reason, I ask leave to withdraw the Amendment but I think we must consider it again before Third Reading.
Amendment, by leave, withdrawn.
6.19 p.m.
Lord MONSON Lord MONSON moved Amendment No. 14:
Page 24, line 34, after second ("the") insert ("prior or subsequent").
The noble Lord said: My Lords, this is a simple Amendment and is self-explanatory. It simply makes it clear that if an employer has to make a snap decision he can get the approval of the Secretary of State after he has made the decision rather than beforehand. The words "prior or subsequent" will cover that, and I hope it will be acceptable to the Government even if the wording as it stands automatically covers that point. I beg to move.
Lord DONALDSON of KINGSBRIDGE: My Lords, this Amendment is an attempt to allow the national security and public safety and public order exemption we have just been talking about under Clause 39 to apply to an act if the written authority of the Secretary of State was given after the act was done. We think that a person is entitled to know at the time when the act is done whether or not it is lawful, and it would be wrong in principle for an employer to be able to obtain retrospective exemption for his acts. But in any case, under the clause it is possible to obtain a general authorisation. For example, where there are categories of employment where security is of obvious importance and where there may be special risks, an employer could seek an authorisation, thus obviating the need for last minute application to deal with a particular case. In our opinion, this should meet the vast majority of cases, bearing in mind that the application of Clause 39 is, as the noble Lord pointed out in his last remarks, really very limited. I hope that will satisfy the noble Lord, and he will withdraw the Amendment.
Lord MONSON: My Lords, I am not very happy with the noble Lord's reply. It seems to me one ought to provide for exceptional cases. But in view of the fact that Clause 39 is so narrow in the number of people to whom it will apply—for that reason alone—I beg leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
Clause 54 [General Interpretation]:
Lord DONALDSON of KINGSBRIDGE Lord DONALDSON of KINGSBRIDGE moved Amendment No. 15:
Page 36, line 9, leave out from ("supposed") to the end of line 10 and insert ("religious belief or political opinion and to the absence of any, or any particular, religious belief or political opinion.")
The noble Lord said: My Lords, I can now yield to the noble Baroness, Lady Bacon, to whom I tried to yield on the wrong Amendment earlier. We agreed that we would alter the definition of "religious belief or political opinion" in Clause 54(2) and this Amendment is to do so. It is to insert in place of part of the definition in Clause 54(2)
"religious belief or political opinion and to the absence of any, or any particular, religious belief or political opinion".
The point of this, as your Lordships will remember, was to include the Atheist or Agnostic as well as the believer in any particular faith. I am quite sure the House will support this Amendment. I beg to move.
Baroness BACON: My Lords, I should like to thank my noble friend for keeping his promise to me made during Committee stage, and for putting down this Amendment at Report stage. It meets completely the points that I made during Committee stage. I am sure it will give great pleasure to those people in Northern Ireland who made representations to me. I am pleased that the Amendment I moved has had the effect it has. Incidentally, it has not only produced an Amendment to the Bill but it has produced a very amusing misprint in the Belfast Newsletter of Wednesday, 18th June. It will be remembered that my noble friend Lord Brockway supported me in this Amendment and paid tribute to the part being played by the Humanists in Northern Ireland. But according to the Belfast Newsletter my noble friend Lord Brockway said:
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"The humourists in Northern Ireland were now contributing greatly towards conciliation between the opposite sides."
Everybody has had a go in Northern Ireland and it seems it is now the turn of the humourists, and perhaps they might be a bit more successful. Again, I should like to thank my noble friend; I appreciate his action.
On Question, Amendment agreed to.
6.25 p.m.
Lord MONSON Lord MONSON moved Amendment No. 16:
Page 36, line 16, at end insert—
("( ) For the purposes of this Act any failure on the part of an employer who employs not more than ten persons in addition to any employed for the purposes of his private household to advertise offers of employment publicly shall not in itself constitute discrimination.")
The noble Lord said: My Lords, I did refer to this Amendment briefly earlier, and the noble Lord, Lord Donaldson, was kind enough to give his views on it at that point. I am bound to say I find it very hard to agree with him. This Amendment really is tantamount to the kind of clause in a legal document that starts with the words, "for the avoidance of doubt", and I do not see that it can do any harm.
Immediately preceding the new subsection, if it is agreed in Clause 54, are two subsections; subsection (3) is concerned with unintentional failure to provide equality of opportunity, and subsection (4) says that a person is seeking employment for the purpose of this Act,
"if he is available for employment, whether or not he is aware of the existence of an opportunity for any particular employment".
So if without any advertising or notification—I do not mean necessarily a paid advertisement; I am using the word in the old-fashioned sense of putting a notice on a notice board or anything else—an employer wishes to tell somebody he happens to know personally in his village, "I have a job going in my garage; would you like to come, Bill?", he may feel inhibited from doing this by the existence of Clause 54(3) and (4). I really do not see that this subsection, which is for clarification, need do any harm. I would ask the noble Lord to think again about this. I beg to move.
Lord DONALDSON of KINGSBRIDGE: My Lords, we have already

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had some discussion of this Amendment when we discussed Amendment No. 7. As it stands, the Amendment is really not acceptable at all. There is no obligation, either in the Bill or anywhere else, to recruit his employees by advertising. It is clear that this may be the subject of a direction by the Fair Employment Agency under Part II, they may say that by not advertising in a certain paper or in a certain area you are not giving equality of opportunity. But there is no obligation to advertise, and when it comes to small employers I do not think anyone would expect them to do so. I really do not think one can press this at all. I have already said that the small employers are 24,000 out of the 30,000 establishments in the Province, so it is a very big item. In any case, it would be entirely confusing to bring in suddenly a special rule about their not having to advertise when nobody else has to. I am not really clear what the noble Lord is trying to get at. Whatever it is, this Amendment does not do it.
Lord MONSON: My Lords, with the leave of the House, perhaps I may explain what I am trying to get at. I am trying to relieve the potential anxieties of small employers, who may feel, as a result of the presence of Clause 54(4), that if they happen to be in a village which contains 50 able-bodied males and they want one particular man they nevertheless have to go round and knock on every door and tell everybody that there is a vacancy on the farm or in the workshop or factory. This Amendment would make it clear that they do not have to do this. If I had had any support I would have been sorely tempted to press this Amendment, but it may be that, in any case, it is technically defective in some way. Therefore, I beg leave to withdraw the Amendment.
Lord DONALDSON of KINGSBRIDGE: My Lords, with the leave of the House I should like to add that the three years' run will make clear whether or not there is any substance in the noble Lord's fears. We have this as a protection, so that I do not think that these fears which, in the noble Lord's mind, the small man is suffering from have any reality at the moment, nor need they have. He has three years to get over them.
Amendment, by leave, withdrawn.
Schedule 1 [The Fair Employment Agency for Northern Ireland]:
Lord DONALDSON of KINGSBRIDGE: My Lords, this is a drafting Amendment which, unusually, removes seven words because they are thought by the drafting counsel not to be necessary. I hope that this will be acceptable to your Lordships. I beg to move.
Amendment moved—
Page 38, line 6, leave out from ("corporate") to the end of line 7.—(Lord Donaldson of Kingsbridge.)
On Question, Amendment agreed to.
Schedule 3 [Declaration of Principle and Intent]:
6.31 p.m.
Lord MONSON Lord MONSON moved Amendment No. 18:
Page 42, line 14, leave out ("or political opinion")
The noble Lord said: My Lords, I beg to move Amendment No. 18, and with the leave of the House I will speak also to Amendment No. 19. I should like to start by emphasising that they are alternative Amendments; that is to say, if Amendment No. 18 were agreed I would not press No. 19, and vice-versa. We did not directly discuss Schedule 3 in Committee, although I voiced my reservations about it on Second Reading. It was pointed out by both my noble friend Lord Brookeborough and the noble Lord, Lord Kilbracken, in Committee, that Parts II and III of the Bill refer to different things, and prior to their noticing this I do not think that this was generally recognised. The noble Lord, Lord Donaldson, said that so far as Part II was concerned it would be wrong to insist in a blanket way on political opinions being ignored; Part II being a question of morals rather than behaviour.
Schedule 3 is specifically related to Part II. It is mentioned directly in Clause 6 and indirectly in Clauses 7 and 10. It is nowhere mentioned at all in Part III or in any other part of the Bill. Therefore, it would seem that the words "or political opinion" had crept in one would think by accident. That is not in itself an adequate reason for moving this Amendment. Obviously there must be another reason, and it is this. When we talk about political opinion in Northern Ireland, we

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are not talking about somebody who wants to reduce the standard rate of income tax by 2p in the pound, or to reduce the speed limit on all roads to 60 m.p.h., or bring in family allowances for a first child. We may be talking about these things, but we also may be talking about violence, arson, mass murder, and one thing and another.
In Committee the noble Lord made the point that a person who had been in prison ought to be given a chance, and that a person's past record ought not to tell against him provided that he was no longer a security risk, and I quite agree. I am not saying that that is not right, or that employers should not employ such people, although I should like to point out that in West Germany, following the deliberations of a committee headed by Willy Brandt—and I think he is admired on all sides of the House as a great liberal—a law was passed that people with extreme political views opposed to the existence of the State could be dismissed. The results of this committee's deliberations are only at an early stage, but so far 300 people have been dismissed from their jobs—schoolteachers, policemen and the like; about two-thirds of them for extreme Left-Wing opinions and one-third for extreme Right-Wing opinions. There are more to come.
I am not suggesting that in Northern Ireland we should emulate West Germany in this respect. I accept with some reservations the idea that such people should be employed. However, I think it is going too far to require an employer to get up and make a rather melodramatic statement saying that he has an absolute moral obligation to employ such people. Certainly it is quite acceptable to say, "You have a moral obligation to employ people on religious grounds ", but political grounds may include people who have done terrible things. By all means let them be employed quietly and without fuss, but to push employers into getting up and having to say this is quite wrong.
If the Government feel, for whatever reason, that the words "or political opinion" ought to be left in, then I suggest as an alternative Amendment No. 19 which in effect suggests that the words "social justice" be replaced by "social harmony ", thereby making it perfectly
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clear that such a declaration has been made on purely pragmatic grounds rather than moral ones.
Lord BELSTEAD: My Lords, for rather different reasons from those put forward by the noble Lord, Lord Monson, I hope that the Government will look once again at the drafting of the Bill in connection with this Amendment. I do not object in any way to the wording of the declaration so far as the purpose of the declaration is concerned. But the point which I think this Amendment brings to light is that it is a declaration to be subscribed to by equal opportunity employers under Clause 6 declaring their commitment to the principle of equality of opportunity. The problem is that equality of opportunity is clearly defined in Clause 3 as referring only to religious beliefs.
There are reasons for this, as the noble Lord has sought to explain to me by correspondence between the last stage of the Bill and this, but I think it is going to cause some perplexity if employers, seeing that equality of opportunity relates in Clause 3 to religious beliefs only, find themselves then asked to subscribe to a declaration which includes political opinions also. It is a narrow point, and the noble Lord may be able to direct us on to the right path over it. It is possible that it is just a drafting matter, and if it is I should be grateful if the Government would look at it again.
Lord DONALDSON of KINGSBRIDGE: My Lords, I do not think that it is a drafting matter at all. It is a very important point which we have discussed at length in Committee, and I am prepared to discuss it at length again. The position is that this Declaration of Principle and Intent is taken from the van Straubenzee Report, which was agreed by the employers and the unions, so that it is an important area of agreement and we should be very loath to alter it without very good reason. What it says is:
"… affirm and declare without reservation my/our commitment to the principle of full equality in all aspects of employment opportunity …"
That is the positive side of Part II, which says in effect: I will furnish full and equal opportunities to my workpeople in engaging them, in keeping them on, and

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in dismissing them. The Declaration goes on to say:
"and utterly reject discrimination on the ground of religious belief or political opinion."
When we discussed this we explained—and the van Straubenzee Report has gone into this in some detail—that in a Province as religiously divided as Northern Ireland you may get somebody saying, "I am not discriminating against this man because he is a Catholic. I am discriminating against him because he is a member of the SDLP ", which is a perfectly good political reason for doing so, and we want to catch him for doing that. On the other hand, over the general positive declaration of Part II we are simply saying that the object of this Bill is one, and one only; to stop people discriminating against others in giving jobs, taking jobs, keeping jobs or dismissing people from jobs on religious grounds. They are two different things. When it comes to the result of the employer's action, it is then perfectly reasonable to say, "You cannot get out of it by saying that he is a member of a political Party." This is the object of the exercise.
If this is to be altered, then we should have altered it when we discussed it in Committee. We should certainly not alter it here, because that would be interfering with the laid down agreed statement which comes out of the van Straubenzee Report, and I should be most reluctant to do so. Nor do I believe that it needs altering at all. It is a slightly complicated position in that one has the positive demand for the employer to be fair, and one also has the results of his fairness, or unfairness, which are taken down in an action, in the end, in tort, for doing something which is against the law, and I think it reasonable that political opinion can come into that in a way it does not come into the first. I have been over this time and again. It is not an easy matter and I do not think I should spend longer on it now, but I am certain that we could not accept the removal of these words.
Lord MONSON: My Lords, I really do not feel that the van Straubenzee Report is tantamount to Holy Writ. Surely the purpose of Parliament is to examine
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and, where necessary, rectify legislation if it is considered to be imperfect. I have been into the moral arguments and I will not go into them again, but it seems to me, on the fact that the trade unions and employers have supported this declaration in these terms, that maybe the larger unions and larger employers did so, but I wonder how many trade unionists on the shop floor or small employers, taking Northern Ireland as a whole, would support these words? If I were to be asked—be it in Northern Ireland, England or anywhere else—to sign a declaration saying it is my moral duty to employ people whatever their political opinions, whether they be extreme Communists or enemies of the State in some way, I should refuse to do so. I should strike out the words and initial them, although I appreciate that that would perhaps invalidate me from being classified as an Equal Opportunity Employer. Very rarely this afternoon has the noble Lord given way, and I regret to say that I feel so strongly about this issue that I am unable to withdrawn the Amendment.
On Question, Amendment negatived.

NORTHERN IRELAND ACT 1974 (INTERIM PERIOD EXTENSION) ORDER 1975
6.44 p.m.
Lord DONALDSON of KINGSBRIDGE Lord DONALDSON of KINGSBRIDGE rose to move, That the Draft Northern Ireland Act 1974 (Interim Period Extension) Order 1975, laid before the House on 9th June, be approved. The noble Lord said: My Lords, the Northern Ireland Act 1974, as well as providing for the election of a Constitutional Convention, also made better temporary provisions for the government of Northern Ireland. This followed the fall of the Northern Ireland Executive in May of last year and the prorogation, and later the dissolution, of the Northern Ireland Assembly. These temporary provisions were to have effect initially for an interim period of one year, which expires on 16th July 1975. The Acts allows for this interim period to be extended for up to one year at a time by Order of my right honourable friend, subject to a draft of the Order having been approved by Resolution of each House of Parliament.

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The purpose of the draft Order now before your Lordships is to extend the interim period for a further year; that is, until 16th July 1976.
Your Lordships may like me to refresh your memories about the nature of these temporary provisions. Briefly, the Northern Ireland Act 1974 provided for the re-introduction of direct rule. It enabled legislation for Northern Ireland to be undertaken by way of Order in Council in Parliament instead of by Measure of the Assembly. It also provided that the functions of Members of the Northern Ireland Executive should be discharged by the Northern Ireland Departments subject to the direction and control of the Secretary of State. My right honourable friend thus became for the time being responsible to Parliament for what are known as transferred matters, which were formerly the responsibility of the Northern Ireland Executive and for which the Executive were accountable to the Assembly. At the same time, my right honourable friend retained his direct responsibility for matters' which were reserved under the Northern Ireland Constitution Act 1973, in particular the administration of law and order.
One of the main reasons why this Order is required is that, even if circumstances were propitious, it would not be right to introduce any fresh arrangements for governing Northern Ireland while the Constitutional Convention is at work. Your Lordships will recall that the Convention has been given the task of considering the future arrangements for the government of Northern Ireland, and that the Convention's report is to be laid before Parliament.
The Government take the view that it is for the people of Northern Ireland, through their elected representatives, to take the lead in shaping together their future institutions of government, although final decisions on this will be a matter for Parliament. I know your Lordships will understand if I say it would be inappropriate for me to attempt an assessment of the Convention's progress so far. Although the Government will assist the Convention in any way they can, they are anxious not to interfere in its work. I think it not out of place, however, to say that the Government welcome the constructive way in which the
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Convention has settled to its task. As your Lordships will know, the Convention has agreed its rules of procedure and is now addressing itself to its main business. I sure that all noble Lords will join me in wishing the Convention well in its difficult but vital task.
Whatever the outcome of the Convention, the government of Northern Ireland has to be carried on in the meantime. The draft Order before your Lordships does no more than allow that to happen. The Government are well aware that there are unsatisfactory features of direct rule, and it remains our view that this can only be a temporary means of governing Northern Ireland. For the time being, however, there is no practical alternative to the present arrangements and I hope, therefore, that your Lordships will be prepared to approve the draft Order. My Lords, I beg to move.
Moved, That the Draft Northern Ireland Act 1974 (Interim Period Extension) Order 1975, laid before the House on 9th June, be approved.—(Lord Donaldson of Kingsbriage.)
Lord BELSTEAD: My Lords, of course we on this side of the House support the passage of this Order. We do not like the continuation of direct rule any more than I expect the Government do, but its ending is dependent on the work of the Convention. The only observation I shall make is that we on these Benches support the Government in hoping that the work of the Convention will be swiftly and successfully completed, so that its report can be laid before Parliament before too long.
On Question, Motion agreed to.

NORTHERN IRELAND (VARIOUS EMERGENCY PROVISIONS) (CONTINUANCE) ORDER 1975
6.49 p.m.
Lord DONALDSON of KINGSBRIDGE Lord DONALDSON of KINGSBRIDGE rose to move, That the Draft Northern Ireland (Various Emergency Provisions) (Continuance) Order 1975, laid before the House on 9th June, be approved. The noble Lord said: My Lords, this Order extends the provisions of the Northern Ireland (Emergency Provisions) Act 1973 and the Northern Ireland (Young Persons) Act 1974 for a further period of six months to

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25th January 1976. It is a matter to be much regretted that emergency legislation of this nature is still necessary in Northern Ireland. But there can be few people who do not recognise that events in that troubled province remain such that the provisions of the normal law are insufficient to deal with armed and ruthless terrorists.
Although this Order continues in force unchanged the provisions of the Emergency Provisions Act, it is not the intention of the Government that this Act should remain unamended. The Government have always had doubts about some of the provisions within the Act, and it was for this reason that a month after taking Office the Secretary of State appointed a Committee, under my noble friend Lord Gardiner,
"to consider what provisions and powers, consistent to the maximum extent practicable in the circumstances with the preservation of civil liberties and human rights, are required to deal with terrorism and subversion in Northern Ireland, including provisions for the administration of justice and to examine the working of the Northern Ireland (Emergency Provisions) Act 1973; and to make recommendations."
I am glad to say that some of the measures introduced in the Act, about which we voiced misgivings when in Opposition, have not in practice proved to be as unsatisfactory as we feared, and indeed the Committee under my noble friend have recommended their retention. Other measures have not been so satisfactory and the Government intend to amend them in the light of the recommendations of my noble friend's Committee. Indeed, a Bill—the Northern Ireland (Emergency Provisions) (Amendment) Bill—is before Parliament to give effect to this. As, however, it would be impracticable to expect the Bill to become law before the existing provisions expire at midnight on 24th July, this Order has been laid to extend the existing Act for a further six months, to allow the Bill to be fully debated in Parliament.
It would be possible to give effect to some of the measures in the Bill by means of an Order. But this would be to deprive Parliament of the opportunity to debate and amend, taking into account all the provisions of the Bill. The Government have thought it right, therefore, to retain the Act in toto to allow Parliament the
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fullest consideration of the new proposals. Emergency legislation is distasteful and, as I am sure your Lordships will agree, needs to be scrutinised in the most careful manner. I hope, however, that the new provisions will amend the existing Act well within the six months period. As a matter of fact, I understand that the Second Reading in another place is scheduled for tomorrow.
As I have said, a Bill to amend the Emergency Provisions Act is before Parliament, and its provisions are based on the recommendations of the Committee which sat under the Chairmanship of my noble friend Lord Gardiner, and it would not be proper on this occasion for me to discuss the recommendations or the provisions of the Bill. We shall have time for that when the Bill comes before this House. I should however like to take this opportunity of thanking my noble friend and his colleagues for the depth in which they studied the security situation in Northern Ireland. Clearly they were convinced that emergency powers were necessary at the time they prepared their report.
Although the security situation has changed since then, in particular since the Provisional IRA announced a ceasefire on 22nd December, terrorist violence has not ceased. As my right honourable friend the Secretary of State explained in another place on 16th June, the nature of violence has changed in as much as the ceasefire has brought into sharp focus a great deal of violence in and between the communities. So far this year there have been 106 deaths. I am glad to report that during that time 53 people have been charged with murder, 60 with attempted murder and 568 with terrorist-type offences as a whole.
It is true that the ceasefire has brought about a reduction in certain types of violence, particularly shooting incidents involving the Security Forces. The Government have responded to this by lowering the profile of the Army other than in those areas in which there is a high incidence of killings, and by releasing a substantial number of detainees. Since 22nd December the Secretary of State has himself released 276 detainees. But it would not be justifiable to the community in Northern Ireland to end the provisions for detention until it is

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clear that there has been a return to peace and an end to terrorism, particularly the vicious intimidation that prevents law abiding citizens giving information to the police and appearing as witnesses in the courts. Moreover, while violence and intimidation continue it is not possible either to expect the courts to function effectively without special provisions, or the Security Forces to be able to act without the necessary powers.
The Order before your Lordships' House also extends the provisions of the Northern Ireland (Young Persons) Act 1975, by which the Secretary of State can give a direction that a young person charged with a scheduled offence may be held in custody in a prison if he is remanded to a remand home. When this Act was passed, the Government gave an assurance that the powers would be used sparingly. In fact since the provisions of the Act came into force on 1st August 1974, directions have been made in respect of only 15 young persons. There have been no escapes from secure custody and although abscondings from remand homes have continued, these do not pose the same threat to life which would have occurred were the Act not in force. My Lords, I beg to move.
Moved, That the Draft Northern Ireland (Various Emergency Provisions) (Continuance) Order 1975, laid before the House on 9th June, be approved.—(Lord Donaldson of Kingsbridge.)
6.55 p.m.
Lord BELSTEAD: My Lords, as the Northern Ireland (Emergency Provisions) (Amendment) Bill has its Second Reading in another place tomorrow it would not be appropriate to embark on any lengthy questions to the noble Lord this evening. But I wish briefly to refer to the two main parts of the Order. As I understand the newspaper reports the Secretary of State is not signing any interim custody orders and has not been doing so for some time. It would be interesting to know how many people now remain in detention. If the noble Lord does not have that information with him at the moment, possibly he would he so good as to let me know later. Furthermore, I wonder what split there is among those who remain detained, between Roman Catholics and Protestants. I also wonder what evidence there
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is of any return to violence by those who are freed detainees.
I was grateful to the noble Lord for speaking for a moment at the end of his speech about the working of the Northern Ireland (Young Persons) Act. I remember that, during the passage of this Act, there was a certain amount of worry about the working of the training centres in Northern Ireland, and it was hoped that the provision in that Act—that young persons could be held in prison—would relieve pressure on the training centres. It seems evident from what the noble Lord says that this has been the effect and that the Act is working well, and I am very glad to hear that. My Lords, with those few words I certainly support the passage of this Order.
6.58 p.m.
Lord GARDINER: My Lords, I apologise in advance for having to trouble the House, which I do not often do these days, at this hour of the evening, but I feel some responsibility in this matter. The Order comes before Parliament in rather unusual circumstances. The Emergency Provisions Act came into force in July 1973 and was to last for a year. Therefore in the summer of last year the Government were faced with having to renew it, or decide what to do about it. Meanwhile a number of criticisms of the contents of the Act had been made and the Government therefore decided that they would like to say to Parliament:
"If only you will renew it as it is for six months, we shall appoint a Committee and before the end of the next six months it will have reported and we can consider, and Parliament can decide, which of the recommendations of the Committee to accept."
Therefore, in June, I had the honour of being appointed Chairman of the Committee, which included the noble and learned Lord, Lord MacDermott, a former Unionist Attorney-General and a former Chief Justice in Northern Ireland; Judge Higgins, a Catholic High Court judge; Professor Buchan, with his wide experience of terrorist conditions in many countries; Professor Kathleen Jones, a sociologist, of York University; Dr. Whyte, an historian from Belfast University; and Mr. Morland, an English Queen's Counsel, who had conducted a lot of cases for the Crown before the Detention Commission.

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We were told that the matter we had to deal with was one of great urgency as our Report must be in the hands of the Government by some time in December, because they would have to have it in order to get the Order renewed in January. As your Lordships will appreciate, one of the difficulties of a Committee of that kind is that people are entitled to make representations to it, and they have to be given time to do so. By July many people were going away for holidays. We had no idea how many people would want to make representations to us. In the event we received 157 memoranda and heard 97 witnesses from all the political Parties, the Judiciary, the Police, the Army, religious bodies or individual clergy, universities, and so forth. But, sitting alternate weeks in London and Belfast, we were able to say by December that our Report would be on time.
Then Birmingham happened. I can understand any Government, in the atmosphere in England created by Birmingham, thinking that they would have no difficulty in getting the Order renewed without worrying about the Committee's Report. If I say that they "jumped the gun" I do not mean that they did anything that they were not entitled to do; but instead of waiting until January when they would have had the Report they got the Order renewed in December. Here we are, six months later, and the same position arises; but they have now just published a Bill to give effect to such of the recommendations of the Committee as they agree with. The first thing that I should like to ask is this. What is the intended programme of that Bill? Is it intended that it should come into force this Session, or will it have to wait until next Session? We are practically in July and it will have to go through two Houses. I do not mean any disrespect to anybody. I merely ask: are we going to be faced with exactly the same position when January comes, or will the Bill by then be law?
I do not think it is at all the business of a Committee to be very particular about which of their recommendations are accepted. But I have in mind, and I understand, that very shortly the Second Reading of this Bill will be taken in another place, and there is no one in that
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House who was a member of the Committee. I think therefore that I ought to say whatever I think my Committee would wish me to say in the circumstances. I say "my Committee" because except for one point, which is not now relevant and on which Lord MacDermott had a reservation, all our recommendations were unanimous.
My Lords, the first point that my Committee would wish me to raise is not a long point; it is what we said about the Press or the news media. We said in paragraph 73:
"The view has been expressed to us that the news media must bear a degree of responsibility for the encouragement of terrorist activity in Northern Ireland. Interviews with terrorist leaders on television and radio and the practice of some newspapers in accepting advertisements from paramilitary groups may provide propaganda platforms for those whose aim is the violent overthrow of lawful government. There is a tendency, which exists elsewhere, towards sensational reporting of shootings and bombing incidents which lends a spurious glamour both to the activities themselves and to the perpetrators. In addition there are ill-founded and false allegations against the security forces.
"There can be no question of introducing censorship in a free society in time of peace. But this does not mean that nothing can be done. We recommend that it be made a summary offence for editors, printers and publishers of newspapers to publish anything which purports to be an advertisement for or on behalf of an illegal organisation or part of it."
Then we said:
"In the present situation, we suggest that the Press Council should closely examine the reconciliation of the reporting of terrorist activities with the public interest.
"Finally, the Governors of the British Broadcasting Corporation and the Independent Broadcasting Authority should re-examine the guidance they give to programme controllers or companies about contact with terrorist organisations and the reporting of their views and activities."
The main point in our minds—and this was not the view of an ordinary, ignorant Englishman like me, but of our Northern Ireland members as well—was that it was not right that a body like the IRA, which is an illegal para-military body, should be able to publish its advertisements in that name in the newspapers. We were not blaming owners and editors, because if they refused they might have got a bomb. They could not say: "I am sorry, I cannot do this for it is against the law"—because it was not! The only dissent of any kind, or comment, was

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that if they are stopped from advertising under the name of the IRA the same people will do so under the name of the Sinn Fein. But, my Lords, the Sinn Fein is a lawful political Party. Is there not a difference between that and a paramilitary group—whether it is the IRA or a Protestant group—which is trying to overthrow society by force? We find it somewhat offensive that they should be allowed to advertise in the public press. I do not know whether my noble friend can tell me what the Government view was about that. I note the complete omission from the Bill of the Committee's opinion on it.
The second point is also a short one. If I understand Clause 3 correctly, it is proposed that scheduled and nonscheduled offences can be tried together. We agreed with that, provided that it was done with the consent of the accused. If I understand the draft Bill aright, it says nothing about the consent of the accused. The point is that terrorist offences are tried—and we recommend that they should be continued to be tried—by single-judge courts and subject to some limitation on them as to evidence and so on; whereas non-scheduled offences are still tried by jury. If they are tried together in what is usually called the terrorist court, this means that, without his consent, a man is being tried on a nonscheduled offence and is deprived of the right to be tried by jury.
Thirdly, in relation to the timing of the detention order, we found that there is a very long period after an interim custody order before the man came before the detention commissioner. It is a real hardship if a man is put in custody for months, loses his remuneration, probably loses his job and is then told, "There is nothing against you. You can go." A large number are released on the first hearing. We recommend a very tight timetable, and this I see is very much extended by the Order. I hope that in mentioning these points I am not causing any discomfort—I almost said "upsetting" but that is the wrong word—to my noble friend Lord Donaldson of Kings-bridge. I do not expect him to reply to these points tonight. They are, in a sense, signals to the other place who have no representative of the Committee there.
A point on which all my Committee felt very strongly indeed was the question
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of prison accommodation. I venture to mention this in particular because this is something which will still be with us when, as we all hope, detention ends. What the Committee said was:
"The prison system in Northern Ireland has a most important role to play in the maintenance of law and order. We do not believe that it is fulfilling that role adequately at present and, to be blunt, we were appalled at certain aspects of the prison situation.
"The prison system of Northern Ireland is inevitably under considerable strain. The prison population has risen from 727 at the beginning of 1968 to 2,848 on the 30th November 1974: details are in Appendix E.
"Prior to 1968 Northern Ireland had only one prison for men, the Crumlin Road Prison built over 100 years ago in the middle of Belfast; Armagh Prison for women is of similar age and in the middle of the city of Armagh. Even before internment began in 1971, Crumlin Road Prison had proved inadequate for all the male convicted prisoners. With detention came the emergency building of a temporary prison at Long Kesh, now the Maze Prison, with accommodation in huts in large compounds rather than in individual cells; subsequently a further temporary prison of a similar type was built at Magilligan. The result is that 71 per cent. of male prisoners—1,881 out of a total of 2,648—are now in temporary prisons of the compound type rather than in conventional cellular accommodation.
"Prisons of the compound type, each compound holding up to 90 prisoners, are thoroughly unsatisfactory from every point of view; their major disadvantage is that there is virtually a total loss of disciplinary control by the prison authorities inside the compounds, and rehabilitation work is impossible. The sleeping accommodation for those confined in the compounds is in Nissen hut dormitories each holding a maximum of 30 beds. At Magilligan each prisoner has a cubicle, but at the Maze only a few dormitories have been fitted with partitions and most are of the open type. But in neither prison is there accommodation of the cellular type found in permanent prisons. Each compound contains several dormitories, dining and recreation huts, and an open space for exercising, all surrounded by a high wire fence which can easily be breached by determined men."
One of the reasons why I mention this today is because we really anticipated the burning down of the Maze which actually took place. If conditions should change for the worse the public, we thought, ought to be alerted that this might happen again at any time.
The Report goes on:
"Strong security fences guard the outside perimeter, and watch-towers are placed at numerous points. The Army guards the perimeter and entrances and has a general responsibility for security."
"We believe that the prison staff, who are in charge of the prisoners, do their best with the limited manpower available, but the layout

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and construction of the compounds make close and continued supervision impossible. The dormitories are locked at night, but otherwise the prisoners in each compound are very much left to their own devices. There are no facilities for organised employment. Each compound is virtually a self-contained community which keeps the premises it occupies to such standard as it finds acceptable and engages, if it so wishes, in military drills or lectures on military subjects."—
I am reminded of one Army officer who referred to it as the terrorists' Sandhurst,—
A development during the present emergency was the introduction in June 1972, following a hunger strike at Crumlin Road Prison, of a special category status for convicted prisoners. In practice this has meant that any convicted criminal sentenced to more than nine months' imprisonment who claims political motivation and who is acceptable to a compound leader at the Maze or Magilligan Prisons is accorded special status. There were on 30th November 1,119 prisoners in this special category out of a total of 1,771 convicted prisoners. They are allowed to wear their own clothes and are not required to work. They receive more frequent visits than other prisoners and are allowed food parcels, and can spend their own money in the prison canteen. They are segregated in compounds according to the para-military organisation to which they claim allegiance, in the same way as detainees.
"The housing of male special category prisoners in compounds means that they are not closely controlled as they would be in a normal cellular prison, discipline within compounds is in practice exercised by compound leaders, and they are more likely to emerge with an increased commitment to terrorism than as reformed citizens. The special category prisoners regard themselves in much the same light as detainees, expecting that an amnesty will result in their not having to serve in full the sentences imposed on them …"
"Although recognising the pressures on those responsible at the time, we have come to the conclusion that the introduction of special category status was a serious mistake;…"
We then pointed out that as long ago as early 1971 the then Government had been warned of the urgent need for a new prison. Sir Charles Cunningham reported on it to the then Prime Minister of Northern Ireland in January 1972. Then we said:
"Responsibility passed to the Westminster Government with direct rule in March 1972 and on 1st January 1974 to the Northern Ireland Office as a reserved function when the Northern Ireland Executive was set up. During that time not one brick has been laid towards the building of such a prison, and the Secretary of State's announcement on 18th Novem-
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ber 1974 revealed that a site at Maghaberry had only just been decided upon. There will be a further delay while a public inquiry is held into its compulsory acquisition.
"The present situation of Northern Ireland's prisons is so serious that the provision of adequate prison accommodation demands that priority be given to it by the Government in terms of money, materials and skilled labour such as has been accorded to no public project since the Second World War. Specifically we recommend that the Government find suitable sites on which building can start immediately on both the proposed temporary cellular prison for 700 and the permanent prison for 400–500 …"
"At present the prison population is still rising rapidly. It went up by 786 (or 50 per cent.) in 1973, and has risen by a further 489 (or 21 per cent.) so far this year."
We were not impressed by the attitude of complacency of those we saw from the Northern Ireland Office who are concerned with prison building. In the conditions which existed when we sat, the burning down of the Maze might well have happened at any time. The position today, six months after we have reported, is that not one brick has been laid on another.
May I mention one last point? We have taken a great deal of trouble in thinking out what ought to happen on release. A lot depends on whether detainees who are released are going to return to the same environment, be subject to the same influences and conduct themselves in future as they have done in the past. Many who have lived in appalling conditions cannot be regarded as normal if they have been there for some time. How they are treated when they come out is therefore important. In the interests of time, I will not read the Report, but we recommended a release board.
In the case of detainees, you cannot consider their past record because nothing has been proved against them. In many cases, no one will ever know whether they were guilty of the reason why they were detained. Most of the evidence for the Commissioners is from informers—first hand, second hand and third hand evidence. Informers cannot be cross-examined, because their lives would be in danger. Although for sensible reasons it is given the appearance of a trial, regarded as a trial, it is really a farce. But many detainees have changed their attitude and wish to take a different mode of life.

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What help are they going to get from the community? We advised a release board which could consider not only the evidence against them, but their present state of mind. The Commissioners consider this when they have an application for release before them. The father and social workers, and so on, are consulted. Secondly we recommended, a halfway house, not exactly like Norman House, but a small house with a small staff, to which a detainee on being released could go for 36 hours. At the moment, this is all done in an hour. One moment they do not know whether they are going to be detained for the next three years, and then the next moment they are suddenly told, "You are released" and, within an hour, they are left outside the gate. No arrangements are made about transport, and they are not told anything about conditions in the outside world. A number of members took a great deal of trouble in working out a scheme. There ought to be a place to which they could go for 36 hours, where they could have a medical examination, and where they could have their social security rights explained to them. They could consider what they were to do so far as work was concerned —there is plenty of room in the training centres in Northern Ireland—and it could be seen how far they were prepared to go to other districts, et cetera.
Therefore, my Committee will be disappointed that there is to be no release board of that kind, no halfway house and no social service conditions for people to help them. I have mentioned these points not with a view to having a violent argument, but because those are the ones that my Committee will be most disappointed about. As there is no member of the Committee in the other place—both Houses will discuss these matters shortly—when they discuss it perhaps the other House, through the media upstairs, might wish to know what my Committee's reaction to the new Bill might be.
7.19 p.m.
Lord DONALDSON of KINGSBRIDGE: My Lords, it is always a great disappointment when one has spent a lot of time and made a lot of recommendations, if they are not immediately acted upon. I am disappointed that my noble and learned friend, who did such a splendid job, should have taken quite so long
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going through the things that were in the Report, which were not denied and which the Northern Ireland Office have been struggling desperately to put right. One would think the whole subject was treated with total neglect from the way my noble and learned friend spoke. This is not the case. I spend nearly all my time thinking about these matters, and very often my thoughts, with the help of others, have been based not only on things said by the Committee, but also on improvements, because we know a great deal more about them than the Committee possibly could. If your Lordships take, for example, resettlement—the idea of a house, like the Norman House, for 36 hours—of course this was thought about before, and it was followed up when my noble and learned friend and his Committee put it up. The answer from those who are dealing with these people was that as soon as a man knows he is going to be released, wild horses would not keep him in a house for 36 hours. It is a nonsensical suggestion. We all thought it rather a good one, but when we looked at it on the ground we rejected it. Inevitably, many others fall into that category.
I was interviewed by my noble and learned friend's Committee for quite a long time—I suppose two hours—and we talked about practically nothing else, except the fact that special category would be a mistake. There was not a single person in the Northern Ireland Office, the Prison Department, the Probation Service or the Judiciary who did not know and agree with this. It is very interesting, but it went on and on. We have had it again today. Of course we think special category is wrong, but we do not know how to get out of it. We are trying very hard, but it is an extremely difficult problem. I do not think it is particularly helpful to raise it here, when it is reasonably put in the Report which we have all had and it is going to be discussed tomorrow.
However, my noble and learned friend has done a marvellous job. I wrote to tell him that I thought it was a splendid Report. I think it was wrong on one or two points, but inevitably any Report of this kind must be. I think the speed and energy and devotion given to it was most remarkable. I am particularly sensitive to the suggestion that the prison building programme is a complacent affair. I know

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fairly well what it was like before I got there, because I know the people concerned. They are not complacent, but they have some appalling difficulties.
For example, Maghaberry is an ideal site for a prison. We had an 11 days' inquiry, and we have now waited for over two months but still do not have the Report. We may hear tomorrow that we cannot go there at all. After examining many other sites, we came to the conclusion that this was the best one and did the least harm to people, so we went for it. There is nothing easy about this. My noble and learned friend speaks as if there has been neglect, as if people could easily have built a major prison two years ago. But two years ago, my Lords, they were extending Long Kesh as fast as they could, as best they could, to try to keep murderers from killing other people in the country. Anyone would think they had a stable situation. But I must not go on like this. I feel that people who have worked as hard and under such difficulties deserve slightly less criticism than they had this evening.
There are only one or two points which I can answer now. My noble and learned friend was kind enough to say that he did not expect me to answer. I hope we shall have a debate in this House when the Bill comes through, when all these matters can be properly gone into. As to whether the Bill can get through in this Session, it is certainly the Government's intention that it should, but of course the Government do not have absolute power here and clearly it will be difficult. Personally, I think it will go through; I think it must. This is not to say that I am making any kind of promise.
My noble and learned friend raised one point about the timing. I was very much in sympathy with the general point made by the Gardiner Committee, which was that people who are ICO—taken in on an interim custody order—should have a very tightly-packed timetable. It should not be up to the administration to delay dealing with them, and therefore I was in favour of the general principle which my noble and learned friend put down. I have forgotten the exact date; I think it was 72 hours and 14 days, and then I think three weeks. The Government have gone a long way towards that in
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the Bill. They have extended that on the basis of practicality, through dealing with people who are doing the actual job. They have not extended it for any other reason. I hope he will accept that. In principle, of course, we agree.
Of course everybody knows that compounds are no way to keep people in prison. If my noble and learned friend will forgive me for going on a little longer, he did us less than justice in saying that not one brick had been put on another. We have two blocks of cellular accommodation well forward at one side of the Maze at the moment, where the site was ours so that we did not have to wait for an inquiry. We hope that these will be occupied by 1st October, and that will give us an opportunity to do something about a subject which he did not mention today but very properly mentioned in the Report—the extreme difficulty of dealing with juveniles. But we must not have our debate in advance of the day. When we have the debate I will be happy to cross swords at some length with my noble and learned friend—not for the first time. Meanwhile, I should like to say again that my right honourable friend the Secretary of State and all of us were enormously grateful for my noble and learned friend's work, and for this document which is something we are all working on. Certainly, six months seems rather a long time but my noble and learned friend knows how these things are. People have to be consulted; lawyers are never quick, curiously enough, and I do not think it has been too bad. They will get their provisions before Parliament tomorrow, and, though it would have been much better done in three months, I should like to think he will feel it is not too bad that they have done it in six. My Lords, I am grateful for what the noble Lord, Lord Belstead, said. He asked a couple of questions which I have forgotten, but I will write to him when the time comes. I hope your Lordships will accept this.
On Question, Motion agreed to.

DIVORCE (SCOTLAND) BILL [H.L.]
7.27 p.m.
The EARL of SELKIRK: My Lords, I beg to move that the Divorce (Scotland)

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Bill be read a second time. At this hour, I will seek to put, as briefly and as clearly as I can, the essential points to which I want to draw the attention of the House. I should say that I have not devoted my life to the study of divorce and I have not especially raised this because the Viner Report suggests that some reform should be made, nor that the Lord Advocate recently said that the matter of battered wives could be helped by some sort of reform. I have done it because I think a reform is now urgently necessary.
Perhaps I may give one example of what I have in mind. If at the present time a married couple live apart and have no desire to live together, they have no means at all of dissolving that marriage unless they are prepared to commit a matrimonial offence. They may be scrupulous people and, as Lord Morton said 20 years ago,
"The law is weighted in favour of unscrupulous people."
They can, of course, commit an offence with all the hypocrisy that means, with perhaps the degradation and all the temptation of committing perjury. To have to do that in connection with perhaps the most sacred union that man can enter into is I think most undesirable. As my noble and learned brother Lord Kilbranden said in his Report on Grounds to Consider he did not believe that such a law could serve any purpose useful to society. My Lords, it is more than that.
We have had this Report, Grounds to Consider, for eight years now and I feel very sad that Parliament has not been more sensitive to the points which it made with such prescience and such clarity, also because I believe that informed opinion in Scotland is very nearly unanimous that reforms on these lines are necessary. For example, take this Bill: a very similar Bill was introduced into the other place earlier this year and was supported by representatives of all three major Parties, and I have every reason to believe that it will receive similar support if we are able to pass this Bill on to the other place. Any personal communications which I have had have all been on the lines that the matter should be urged on with all possible speed.
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The Church of Scotland have very naturally given this matter very close consideration. They accept that the civil power has the right to dissolve marriages, though I must admit that in 1560 after the Reformation I very much suspect that the Church took an extremely powerful part in insisting that adultery and desertion should be grounds for divorce. That is what gave Scotland her power of divorce through the law courts and not through Act of Parliament, as was the case in England until halfway through the last century.
The Church of Scotland have examined this very closely. They have submitted certain proposals to the presbyteries for further examination. It is fair to say that the great majority of those presbyteries agreed that reform was essential. What was not so clear—and this was six years ago—was the form this reform should take. I am not saying that this Bill is exactly in line with what the Church of Scotland would desire. Indeed, nobody can speak for the Church except the General Synod, and their views on this were expressed some six years ago. But the Law Society is virtually unanimous in supporting this Bill. There are a very small number who, for reasons of principle which are readily understood, would not agree. However, I think that the views of the Law Society are those of people who share knowledge of the details of human problems day in and day out. They know how the system works, and whatever anybody says, it is of the greatest importance that their views should be fully taken into account.
This whole subject has been a matter of very extensive examination over some 20 years from the time of the Monton Report and the reports of the English and Scottish Law Commissions. There have been debates in this House, and we have had several years' experience of how a very similar Bill operates in England. I very much hope that the noble Lord, Lord Stow Hill, will be able to say something about how he sees the operation of this Act in England at the present time.
In a very large number of places throughout the world, divorce is based on principles not wholly dissimilar to those which are incorporated in this Bill. This is certainly true of New Zealand and Australia—a very radical Act has recently

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been passed there. Holden, in considering the influence of Scots on divorce in Commonwealth countries, remarked that the Scots have a liberal tradition on divorce, which had played a very considerable part. Canada now gives separation as one of the grounds for divorce; and the English model, which was passed in 1969, has now been substantially reproduced in Nigeria, Jamaica, Trinidad, Tobago, Hong Kong and St. Lucia. Therefore. I think one has to say that probably in the whole English-speaking world today Scotland stands less in tune than any other part of the community with what one might call modern thought on this subject. Slightly similar measures have also been passed in France, Germany and the United States of America.
May I take a moment to explain roughly the position in Scotland. The divorce rate has been increasing rapidly: in fact, it has increased a hundred-fold from what it was 100 years ago. Between 1964 and 1973 the divorce rate has increased from 1 in 16 to 1 in 6; that was the figure for 1973, and that is the latest figure I have. It is quite true that we live longer, but the decisive factor is probably the much younger age of marriage. Indeed, if one compares the figures for 1938, when two-thirds of the population married over the age of 24, with those of today, one finds that two-thirds of the population now marry below the age of 24. This applies particularly to men rather than to women.
The general indications are that divorce takes place most frequently at a comparatively young age—certainly under the age of 35. It is also interesting to note that the number of live illegitimate births since the end of the 19th century has actually decreased. Of course, the population has also decreased, and viewed from a percentage angle there is a slight increase of something between 7 to 8½ per cent. But there is an interesting indication that on the whole no less importance is being attached to the institution of marriage. For that reason, I think we should make it something which corresponds to the views held by the public today.
This Bill has been drawn up by the Scottish Law Commission and I believe the principles behind it are admirably
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expressed by words used by both the Scottish and the English Law Commissions. I will quote them:
"The objectives of a good divorce law should include (a) the support of marriages which have a chance of survival and (b) the decent burial with a minimum of embarrassment, humiliation and bitterness of those which are indubitably dead."
These are the purposes which I have sought to achieve in the proposals I make before the House now. Two points come out of them: one is the endeavour to get rid of the matrimonial offence as a matter of guilt; the second is to make an irretrievable breakdown the basis for the dissolution of marriage. Stated like that, this presents a very real difficulty. If I may say so, I believe the Church of Scotland fully accept me proposition, but what they are not so clear about is how it should be put into operation. Something similar was mentioned in the Archbishop's Committee as "putting asunder". If you leave it like that, simply that the irretrievable breakdown of a marriage is a ground for divorce, you are getting very close to divorce by consent, and this is something with which I think most people would be very unwilling to agree. Other difficulties also arise, and these are dealt with under the heading of "Grounds Considered ". If one person behaves intolerably in a marriage and then brings evidence that the marriage is going badly, he may be able to show that the marriage has broken down, while his partner—perhaps the innocent victim of his intolerable conduct—would be divorced against her will. Therefore, a man might be benefiting by his own bad conduct. I think this is a possible danger if divorce based on a irretrievable breakdown is left by itself.
There is another objection mentioned in the Report, which is that the courts would need to hold a very close examination of the relations between the two parties—a sort of inquisition; the sort of inquisition, indeed, that the Scottish Report calls, "one of the most unpleasant and antisocial forms of litigation ". They would have to study why certain disagreements have been taken up. I think we all know that many disagreements are merely the result of a deeper concern and unhappiness. This is highly undesirable and I would say it is extremely unfair to place the duty on the courts. We have therefore to set up certain scaffolding (shall I

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call it?), certain fact situations, on which the court can judge that the marriage has broken down. That is what is laid down in Clause 1(2). These provisions are very similar indeed to those which have been agreed to in England—adultery, unreasonable behaviour, which includes cruelty, desertion, two years' separation with consent, five years' separation without consent.
I should like to return to those particular points and examine them more closely but in the meantime go through the remainder of the Bill to see how it stands. The first point I would make quite clear is that because irretrievable breakdown is the basis of divorce, there is no distinction between the position of pursuer and defender so far as financial arrangements are concerned. The whole circumstances are under review and the judge has power to make such award as seems to him fit and proper. Either the pursuer or defender can apply for such financial assistance.
If I may go through the clauses, I would refer to Clause 2 which deals with reconciliation. This is an extremely important clause. To some extent it is already in existence and to some extent what exists is extended. I will go through the clauses because it is important to deal with this whole matter. Clause 1 allows the court to continue any case where they think any useful purpose can be served. During that continuation if cohabitation takes place no notice will be taken of it from the point of view of condonation or any other purpose. Clause 2 makes it possible to allow three months of cohabitation after an act of adultery, which would not be considered as condonation. Clause 3 enables a three months' period of cohabitation to take place after two years of desertion have been completed; that is to say, grounds for divorce based on desertion has already been achieved but the parties can cohabit together without the defence of condonation being available.
Clause 4 deals with desertion, the two year period and the five year period. During any of that period six months of cohabitation will be disregarded completely in regard to calculating the period of non-cohabitation or separation. To my mind there is a very broad avail-
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ability for reconciliation. Of course, one must say that if reconciliation is to take place, the sooner it does so the better. One should pay respect to what is done by the Marriage Guidance Council in Scotland, and indeed by others. I think in 1973 they had 7,500 interviews on marriage subjects. I cannot say how successful they were, but it would be quite right to pay tribute to the active part they play with regard to a vital element in this Bill.
Clauses 3 and 4 restate the grounds of separation. Grounds of separation will in future be similar to those of divorce, except that instead of an irretrievable breakdown it will be said to be grounds justifying separation. Under Clause 3, decree of divorce can follow that of separation by an extract decree on which the separation was given. Clause 5 deals with financial division. There is no basic change here, except that the courts are given ample power to fulfil any requirement which is fit and proper at the time of divorce. Clause 6 deals with gratuitous alienation of property to defeat an order of the court. Clause 7 gives the circumstances in which aliment can be paid during a period of desertion. It is fair to say that the remaining clauses are largely technical.
May I now return to Clause 1, which is to say the first of the evidential fact situations which would justify grounds of irretrievable breakdown. This is regarded with the other five clauses as a presumption which cannot be rebutted—that the marriage has broken down irretrievably. It may be argued that one act of adultery, as under paragraph (a) of subsection (2), is inadequate to justify the view that the marriage has broken down. One must consider first of all the points on reconciliation to which I have referred, and secondly that there is no assurance of any financial award at all according to who is the pursuer and who is the defender. But I would add that anything which loosens the bond of marriage as such would be very regrettable. One may be permissive of course outside marriage, but to be permissive within marriage seems to me to present an entirely different proposition. When one views the alternative one is faced with something like an adulterous disposition or possibly a quota system under which

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so many events could be allowed to take place in a given time.
My own view is that, to many people, when an act of adultery has taken place—I admit it varies from person to person—the situation can never be quite the same again. Therefore, it would be wrong in any way to give up the position that an act of adultery would constitute adequate grounds to assume that the marriage has broken down. It is of course quite true, as Lord Morton said, that in a great many cases adultery is forgiven or at least overlooked. The next point is reasonable behaviour. This covers the major acts which were put into the 1938 Act—, cruelty, insanity, sodomy, bestiality—and I think it is fair to say that where it is unreasonable to expect two people to live together the marriage may be said to have broken down.
Paragraph (c) concerns desertion. This is very much as it was before although modified and simplified. I think that where desertion has taken place it is fairly clear that the marriage is not likely to subsist. Paragraph (d) deals with separation for two years with consent. This is the basis on which we were told that the majority of cases in future would proceed. I hope this indeed will be the case. It requires consent and by act of severance the Court of Session will insist that any pursuer will explain how that consent can be given to the defender when the action is raised.
There will always be a certain amount of doubt about paragraph (e), the fifth ground; that is five years' separation without consent. I would remind your Lordships of the provisions about reconciliation. I would also call attention to the saving clause, which means that the divorce can be refused if grave financial hardship takes place. But what is perhaps the most striking point is what has happened in England in this connection. When the noble and learned Lord, Lord Stow Hill, moved the Second Reading (I think it was) of the English Bill he said he thought that something like 5,000 cases a year might be made under the five-year plan. The actual figures of the first three years show that more people were divorced under the five-year plan than under the two-year plan. In 1972 the figure rose to over 22,000.
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This has borne out a view which is very widely held, that there is a considerable number of people living together who are waiting for this clause in order to regularise their perhaps illicit union. I do not know whether or not this will be true about Scotland. I am informed that it is likely to be true and that there is a large number of people waiting for this clause so as to be able to take advantage of it and also to take advantage of something which is very important. It will enable them to legitimise any children which may have been the fruit of this illicit union. In itself this may be a material factor in building up a stable union and a firm background. Views have been expressed in the Church of Scotland that five years is too long a period—that it ought to be two or three years. I am not saying that this is their view but that this is the view which has been expressed.
I have spoken for too long, but this is an important matter. I believe that reform of the law is essential—at least, if nothing else, to take away the demeaning character of divorce actions at the present time. I am satisfied that it appears to those who have studied this problem that there is a widespread demand for reform. It will enable empty marriages to be dissolved, but I do not believe that it will make divorce any easier. Nevertheless, it will reflect more truly the realities of life. The financial provisions of the Bill are sufficiently adequate to protect the weaker partner. The powers to enforce the financial provisions are quite adequate. I believe that what remains of matrimonial offences will become less significant in every way.
The Bill will benefit a number of people. They will be able to benefit from firm family life. It will enable them not only to legitimise but to bring up and educate their children within the security which firm married life gives. This fulfils in a high measure the two objects to which I referred earlier; namely, the support of marriages which have a chance of survival and a seemly burial for those which do not. I beg to move.
Moved, that the Bill be now read 2a—(The Earl of Selkirk.)
7.53 p.m.
Lord KILBRANDON: My Lords, I shall be very brief. I am bound to say

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that the pleasure which I have in supporting this Bill is faintly tinged with melancholy. As my noble and learned friend has just said, it is now over eight years since, in my capacity as Chairman of the Scottish Law Commission, I was invited with my calleagues by the then Government—that is, by the present Secretary of State for Scotland and the then Lord Advocate—to examine the divorce law of Scotland with a view to its reform. The Archbishop of Canterbury had set up a group under the chairmanship of the Bishop of Exeter, which had produced a very striking paper called Putting Asunder. The Lord Chancellor of the day invited the Law Commission to examine this paper and advise him upon it, whereupon the departments responsible for the Scottish Law Commission invited that Commission to advise both on Putting Asunder and on the paper which had been produced by the English Law Commission, which was called The Field of Choice. We gave our advice in the paper which has been referred to, and that paper was prepared with—I do not say in conjunction with, but certainly in very close consultation with—Sir Leslie Scarman and his colleagues in the English Law Commission.
Fundamentally, the Bill which is before your Lordships today brings into existence the scheme of things which the Scottish Law Commission unanimously recommended at that time with the English Law Commission. It will be found that the differences between the two systems—the system which is now operating in England and the system which is proposed for Scotland—are consequential upon the differences in the two legal systems. They do not proceed upon social or religious differences, or upon any other differences which would be relevant to a system of divorce. As has been pointed out, in a sense there is no change; that is to say, adultery and desertion will continue to be acts which found a divorce, but they do not found a divorce because they are offences. Under the new system they found a divorce because they have wrecked a marriage—which is a very different thing.
This is probably the answer to the question which was put by my noble and learned friend of whether one act of adultery ought to be irrebuttably con-
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sidered as showing that the marriage had broken down. My Lords, I think it must, because if you take the case of a woman who comes before a judge and says, "I find that my husband has committed adultery and that makes it impossible for me to go on living with him," I do not think that the judge could possibly say, "You are wrong ". In such circumstances, it is for the woman herself to decide, and it would be impossible to legislate in a matter of that kind. In a sense, we are putting adultery and desertion on the same footing as insanity, because insanity never was an offence. Insanity was a misfortune on the part of one of the spouses, but the marriage was dissolved in respect of that misfortune because that misfortune had wrecked the marriage. And so it will be in the future.
I am very happy to say that "cruelty" now disappears as a word in the divorce code. No longer shall we have to go in for these highly legalistic definitions of cruelty, upon which the courts have spent so much time and which have given so much pain in the course of their elucidations. Now one looks at the conduct of the party concerned. It may have been violence—I am afraid that only too often it is. It may have been a kind of sullen or contemptuous silence—refusing to speak. Very often it is. This is conduct which makes it impossible for a marriage to be properly carried on. It may arise from mental illness, or it may not. It may be active conduct or it may not, but conduct of this kind can wreck a marriage just as surely as adultery or desertion.
These proposals as regards cruelty were made by the Royal Commission which was presided over by the noble Lord, Lord Morton of Henryton, almost 20 years ago, so we are not making what one might call a "leap in the dark". To any of your Lordships who, like myself, have had experience in a divorce court of the degrading business of listening to parties accusing one another of various crimes of cruelty—very often blown up for the occasion; and, of course, also in the background are the children who are being used as pawns in the battle—the end of this system will be welcome.
As regards the new proposals, there is to be no uncontrolled divorce by consent. In spite of the divorce figures to which

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my noble and learned friend has referred—and these do go up and down—if you take a long average they do not look anything like as bad as they do at the moment. But even when one looks at the divorce figures, the great majority of people get married with the intention of entering into a permanent relationship. When we wrote our report in 1967, we pointed out that in Scotland no fewer than 80 per cent. of them took the occasion to make an oath at a religious ceremony. That is what people have at the back of their minds when they talk about marriage. That is what they mean when they marry. It does not always come out that way. But there is to be no divorce by pure consent, because we thought that was inimical to the system as it now is, whereby people have this intention of permanency.
However, one has to recognise that even at the moment there is a highly consensual element in divorce. I understand that 95 per cent. of divorces are undefended, which shows that there is a very high proportion of divorces in which there is some kind of agreement behind the scenes. Let us take the case which is legislated for in this Bill of the spouses who have been married for two years and find that they simply cannot "make a go" of it; they cannot get on together. What are they to do? The remedy today is that either one of them commits adultery or pretends to desert the other and the other one commits perjury in support of the desertion. That is the consensual way out at the moment. That way will disappear, and those who support this Bill think that the dignity of society will be to a great extent enhanced.
I think the only controversial part of the Bill may be the divorce after five years of separation, without consent. In a sense this is the acid test, whether one genuinely wants to give decent burial to dead marriages, because if one really does want that then there must be some provision of this kind. Again one remembers the huge majority who intend a permanent relationship when they marry. But nevertheless the problem is there. I am not going to enlarge on it, because the problem and its solution is now very well known to your Lordships because the solution has been adopted in England and, as my noble friend has said, it
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appears to be working very well. It is familiar in England, and I think in Scotland we are perhaps entitled to say that a "pilot scheme" has been adopted South of the Border; that it appears to work well and it might well be introduced into Scotland. I am most reluctant to recommend any Bill which brings the law of Scotland into line with the law of England on the view that that is the object of it, because I know that sometimes causes unhelpful comments in certain quarters. At the some time, I suggest that if it has been shown that provisions in an important matter of this kind have been successful in England, it is a considerable testimonial towards their adoption in Scotland.
After all, we are very much a mixed community nowadays. If I may be personal, my father married an Englishwoman, my wife's father married an Englishwoman, which means that we are both half English and half Scots and so are our children. Two of my daughters have married Englishmen—not that any of us are contemplating divorce. I merely mention this to show that we are very much an integrated society now between England and Scotland and it is not surprising that there should be a good deal of interest in seeing that the social customs in both countries should be similar. That is one of the reasons why I heartily recommend this Bill.
8.2 p.m.
Lord TANLAW: My Lords, I welcome very much the opportunity to speak in support of this Bill. It is difficult for me to follow the noble Lord, Lord Kilbrandon, in any of the legal emphasis which he put on his support for the Bill. I can only say that I did some reading before this debate in order to discover some of the legal preparations that preceded the English Bill. I arrived at two major conclusions. The first, which was an interesting bit of new knowledge and somewhat surprising, was that nearly 10 years ago, when the Law Commission made its Report on the investigation of the possibility of changing the English law, they concluded:
"There is no real evidence that the proportion of marriages which break down has increased during the century."
I found this most encouraging. The Report then went on to state the intention

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of the English Bill—and the noble Earl's Bill achieves exactly the same objectives, which are:
"Firstly, to buttress rather than to undermine the stability of marriage; and, secondly, when regrettably a marriage has irretrievably broken down, to enable the empty legal shell to be destroyed with the maximum fairness and the minimum bitterness, distress and humiliation."
The noble Earl went on to quote similar points from the Commission's Report.
I think the question of irretrievable breakdown is perhaps one of the most essential and important facts in the Bill. Although there is difficulty in legal definition of the phrase "irretrievable break-clown ", when a marriage has reached this stage it is quite dead to the parties concerned, and, what is more, from their point of view there is no question but that the marriage has broken down. What is worse, is that when a marriage gets to this stage, the effect on the children is perhaps often forgotten because the dispute between the two spouses becomes all-important. I feel that this Bill, for those in Scotland who have had the unfortunate experience of an irretrievable breakdown of marriage, must come not only as a great relief to the spouses concerned, but may in the future help children to be able to readjust to a new life, whereas now they may have to continue in the home of a dead marriage, which in many ways can lead to permanent emotional damage for years to come.
I needed some reassurance as to how the Church of Scotland stood in relation to this Bill and I was relieved to find that in a Report by the Scottish Law Commission in 1967 the Social and Moral Welfare Board of the Church of Scotland issued a statement called Whom God Hath Joined. They were able to advance the view that the irretrievable breakdown should be the sole ground of divorce in place of the matrimonial offence, and I find this extremely reassuring, as well as the words of the noble and learned Lord, Lord Kilbrandon.
With regard to my own Party, I was very pleased that at their conference this month in Scotland, the Scottish Liberal Party passed the following Motion:
"That this Conference deplores the failure of successive Governments to allocate Parliamentary time for the enactment of legislation to reform the matrimonial law of Scotland."
I feel that no more need be said, except
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that I would be most distressed if the noble Earl's Bill were to be delayed or put on the shelf for some technical or procedural reason in another place.
For this reason alone, I ask noble Lords on the Government Benches to take this into consideration, because a tremendous amount of legislation has been going through this House this Session and there is much more to come. Much of that legislation is involved and some of it is concerned with deep matters of political doctrine. The application of these measures may take some years to take effect. The noble Earl's Bill will become law within three months of it being passed through Parliament, and after that period of three months this Bill will help many people in Scotland who are in desperate straits as a result of the present legislation.
I shall end on a rather personal note. There are times when I arrived home late from sessions in your Lordships' House and was unable to put my own children to bed. The next morning they used to ask "What do you do in Parliament, Daddy?" I tried to tell them that I did things to help people. I regret to say that a great deal of the legislation is not covered by that phrase, but I think this Bill is one of the few Bills which will help people. I believe it should receive all the support it can possibly get and that it should go through the other place with all possible speed.
8.9 p.m.
Lord FRASER of TULLYBELTON: My Lords, I should like to join in welcoming this Bill and to express the hope that it will soon become law. I have no authority to speak for anyone except myself, but I have had very recent experience on the Bench of the Court of Session in applying present law and I think I can say with some confidence that all the practitioners of the law in that court, both on the Bench, at the Bar and particularly among the solicitors, would welcome a Bill on the lines of this one and would regard it as a great improvement of the law of Scotland by bringing it up to date in important respects.
I do not intend to refer to what seem to me to be the main provisions of the Bill which have already been referred to, namely, the two new provisions allowing divorce after two years with consent and after five years without consent. Those

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are undoubtedly the most important provisions, but the provision that I should like to refer to for a moment is that which replaces cruelty as a ground for divorce by the new form of words:
"… behaviour in such a way that the pursuer cannot reasonably be expected to cohabit with the defender".
I think that is a very desirable reform because the word "cruelty" has become so refined and so enlarged, partly by judicial decisions and partly by legislation, that its meaning has departed widely from the ordinary and original meaning of cruelty as understood by the man in the street. That led to very unfortunate results.
It meant in the first place, of course, that people were branded as being cruel, or felt they had been branded as being cruel, who had been guilty of what I might loosely and generally speaking call legal cruelty. That was very unfair, because legal cruelty included actions done with no intention of being cruel or in any way unkind to the other spouse. At the worst in some cases they might be categorised merely as lack of consideration. Of course they included real physical cruelty as well; but they extended to actions that were little more than being rather inconsiderate. They also included actions which had no direct connection with the marriage at all. A man who committed a crime, if it happened to upset his wife and damage her health, and if the wife could show that it affected her health adversely, although he had no intention of doing anything wrong to her, might be branded as cruel. The result was that people felt that they were being branded as cruel in a sense that was in no way in line with the ordinary understanding of the word.
For that reason, I think there is no doubt, a certain number of actions on the grounds of cruelty were defended by a defender who was not willing to have it said that he or she had behaved cruelly towards his or her spouse. Therefore an action was really unnecessarily defended; the defender had no intention and no desire to preserve the marriage; all he or she wanted was to avoid being stamped as being cruel. That sort of thing will no longer occur if the new form of words is introduced. For that reason I think it has practical results and is not merely a matter of words.
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While I think the Bill is entirely on the right lines, there are some matters of detail which at a later stage I would hope to see amended. For instance, I notice in Clause 3(2) the preservation of the oath of calumny. The oath of calumny, as your Lordships will know, is a formal oath which is put to a pursuer before the case begins. It is read out by the clerk of the court and the pursuer has to sign it. It is a step which has always seemed to me to be rather a formality. I do not think it serves any useful purpose, because immediately after signing the oath of calumny the pursuer then has to take the ordinary oath, swearing to tell the truth in his or her evidence. The administering of this rather elaborate and formal oath, read over in court to the pursuer, who is rather anxious anyway, always seems to me to be unreal and not useful. That is a matter of detail. There are some other details that I should like to see changed, but these are small matters. On the whole, I warmly welcome the Bill, and hope it will soon be passed.
8.14 p.m.
Lord STOW HILL: My Lords, your Lordships may feel that I am guilty of some audacity in intervening in a debate which entirely concerns the law of Scotland, and I speak with greater timidity after hearing the comments made by the noble and learned Lord, Lord Kilbrandon, on that aspect of affairs in his extremely interesting speech. I speak with puzzlement after listening to the most polished and learned speech from the noble Lord who has just sat down, because I see against his name the letter "M" in brackets. I cannot believe that a noble and learned Lord who addressed the House with such full knowledge, so eloquently and with such extreme authority, could possibly be a maiden speaker. It is always the custom in this House to congratulate a maiden speaker, partly in order to reassure him and to welcome him into a new forum. The noble Lord requires no such reassurance. He spoke, if he will allow me to say so, in a way which all of us admire. I hope he will come down and speak a great deal more often and will help us in the further passage of this Bill, as he said, in the Committee stage. Obviously a number of the points he raised will need full research and discussion in the Committee. May I simply

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say to him that I greatly enjoyed his speech and very much admired it; and I am sure we all did.
My Lords, I simply venture to intervene in this debate because the noble Earl, Lord Selkirk, suggested to me that it might possibly be of some help to your Lordships if I were able to say how the Divorce Reform Act 1969 has worked out. That Act, as your Lordships now know, has been consolidated into the Matrimonial Causes Act 1973. In order to equip myself to give your Lordships some indication of the way in which the 1969 Act has worked out. I ventured to address myself to my old friend Sir George Baker, the President of the Family Division in this country, to ask him whether he would be so kind as to put me in possession of some views which I could put before your Lordships' House. I should like to say publicly how grateful I am to him—and I am sure the noble Earl, Lord Selkirk, joins with me in this—for receiving Lord Selkirk and myself and having with us a very full discussion in order to answer the kind of questions which we wished to put to him as to how the English Act had worked out. The President of the Family Division is universally respected, and, of course, brings to this topic a wealth of knowledge as to how the English Act has worked out which nobody could possibly be said to be able to rival.
My Lords, obviously, if one consults a learned judge of his very great authority and experience, one should be very careful to quote him accurately and not to attribute to him views which he does not completely hold. For that reason I asked him whether he would be so kind as to give a general indication of his views which I could take down and which he would authorise me to quote to your Lordships' House. The learned President very kindly agreed to do that, and I wrote down his expression of opinion, which has his approval. It is quite short. It reads as follows:
"If you believe that parties who cannot live amicably in a state of matrimony ought to be able to obtain a divorce simply, then the English divorce law works admirably."
Those are the learned President's words, and that is the extremely weighty opinion he has expressed as to the working of the English Act.
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My Lords, the learned President begins his expression of opinion with the words:
"If you believe that parties who cannot live amicably in a state of matrimony ought to be able to obtain a divorce simply …".
My Lords, I passionately believe that. If two people, probably both of them perfectly nice people, a man and woman, who have entered into this state, which should be a blessed state capable of producing the utmost happiness throughout life, find that they have made a mistake and that they are not suited for each other, I feel passionately convinced, and I have always felt convinced, that they should be able, in a dignified way which does not degrade them in the eyes of their children, and degrade them in the eyes of their friends, to put an end to the marriage, which has become no more than a completely meaningless link between them.
In saying that I have always thought, and I say it again, that the children are of the greatest possible importance. Children should respect their parents. They do respect their parents, they love their parents, and they rely upon their parents; and if children have to witness fathers and mothers living in a state of semi-hatred of each other, behaving badly to each other, and then perhaps their conduct is investigated in the court and results in public cross-examination showing that people have behaved towards each other at their worst, that is calculated to destroy the love and respect of the children for their parents.
When I say that I very much believe in the principle embodied in the English Act, and now in the Scottish Bill, that a permanent breakdown should be the test; it is not only the happiness in future, and the capacity to reconstruct the lives of the husband and wife that I have in mind, but, particularly, the happiness of the children, and their desire to go on loving and respecting both parents, even if they are to live separately in future, I approach it from that standpoint.
It is said, "Yes, but still the breakdown of the marriage has to be proved by these acts of adultery, or behaviour which is unreasonable, or separation, or parting by consent for two years." That is true, but what is important is that the Act now shifts the emphasis on to complete and permanent breakdown, and

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it seems to me that that is utterly different and infinitely more dignified and human and civilised than the old idea of a matrimonial offence, a semi-crime; you perform an act of sexual intercourse, and thereby commit a semi-crime. That system carried with it all the humiliating procedure about the discretionary statement, and all the rest of it. I am so glad that all that has gone and has been buried in oblivion. I hope it never comes back to us in any form in the future.
Therefore, I hope that I might, through the lips of the learned President, say that the 1969 Act works admirably in England upon, of course, the assumption which the learned President makes and I accept. In those circumstances, obviously if the principle is accepted one must look to see whether the Scottish Bill—following possibly the noble and learned Lord, Lord Kilbrandon—following closely the English Act requires further change in the course of its Committee stage. At this stage on Second Reading it is interesting to look to what, perhaps, are some of the main differences between the two. One of the main differences which immediately occurs to one as one looks at the text of the two is that the Scottish Bill before us, in its reference to adultery, simply provides that adultery by itself should be an indication of breakdown, whereas the English Act uses the words:
"the respondent has committed adultery and the petitioner finds it intolerable to live with the respondent; "
I confess that I liked the English provision when the English Bill was introduced. I liked it because I thought it excluded the idea of this single act of adultery constituting a crime, and made one think in terms of breakdown, which was the real question that one was trying to solve.
I am told that that English formula has not worked well. I had always thought, when I ventured to commend the English Bill to your Lordships' House, that what in practice would happen is that adultery would be proved, and the learned judge who had the petitioner, husband or wife, in the witness box would be able to say to himself, "Adultery is proved. I see the petitioner asking for divorce on the ground of the adultery. The conclusion is very easy to draw, and a very
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obvious conclusion; that because of that adultery it is intolerable for the petitioner to go on living with the respondent." In practice I am told that it has not worked out in that way. To begin with a whole series of doubts have arisen as to what the words mean. Must the continued cohabitation be intolerable because of the adultery, or must it be intolerable because of some reason independent of the adultery? Or can the adultery constitute an element in the situation which makes further cohabitation intolerable?
Worse than that, I am told that this sort of situation not infrequently arises: a petitioner goes into the witness box, whether husband or wife, and proceeds to give his, or her, evidence. Suppose it is a husband. The petitioner may say "My wife has gone off to live with X. She is living with X. I still love her. If she came back I should be only too delighted. I would receive her back with the greatest of joy, and continue our married life." The result of that, in the light of the language used in the English Act, is that there can be no divorce because the petitioner, from his own lips, has said that it would not be intolerable to go on living with her. He would very much like to do so, so obviously that formula has miscarried, and I should have thought, if I may say so with the greatest respect to the noble Earl, that he has chosen a formula which is preferable to the one used in the English Act.
I am told that experience shows that this rather odd situation arises under the English Act and under the Scottish Bill: after two years' separation divorce can be obtained by consent, and I am told that over and over again parties quarrel, one behaves to the other in a way which the other regards as creating a situation in which he cannot go on living with the respondent, or she cannot go on living with the respondent. Therefore, a petition is started on the ground that the respondent has been guilty of behaviour which makes it unreasonable for the petitioner to go on living with him, or with her. It all takes time for the parties to make up their minds. They separate, they write letters to each other, ultimately they go to solicitors, and then a petition is put upon the file alleging that type of behaviour. In due course it comes before the court. By the time it gets to the court

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perhaps the separation has been as long as two years. I am told that what happens in something like 95 per cent. of the cases in which such behaviour is alleged is that two years have gone by, there has been a separation for two years, and that the parties, when they get before the court, amend the ground of their petition to ask for divorce for separation for two years with consent. All the disagreeable necessity of one party establishing as against the other behaviour of that sort is happily obviated.
My feeling, when I think of that situation, is that really there is a lot to be said for the Australian view, that perhaps one year's separation with consent should be enough always, and indeed I think it is in Australia the only ground on which divorce could be granted. I should have thought that two years undoubtedly indicated a breakdown of marriage. If a husband and wife live apart for one year—unless there is some question of service overseas, or something of that sortit is difficult to infer that the marriage has not broken down after that one year. However, that is a matter of controversy, and many Members of your Lordship's House might think that that is going too far as a matter of consideration, and possibly could be raised on Committee stage.
There is another point. I wish to show the difference between the Scottish Bill and the English Act. The noble Earl, Lord Selkirk, has retained in his Bill the existing Scottish provisions, which I think are almost exactly the same as the old English provisions, about connivance and collusion. I gather that the argument in favour of retaining the doctrine of connivance is this. A husband and wife want to be divorced; they can either wait two years and be divorced by consent, or the husband can say to the wife, "Go and commit adultery and we can get it right away." That is very unpleasing and unpleasant conduct, undoubtedly, and the argument which I believe the noble Earl would address to your Lordships in justification for retaining the doctrine of connivance would be that that is conduct which should not be accepted by the courts.
My personal reaction would be different. The very unpleasant and disagreeable conduct between the two parties is
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the stronger reason for putting them apart, because less malice develops between them, it is better for the children, and each can take steps to reconstruct his or her own life and perhaps set up a happy matrimonial state for the future. My view, therefore, is that the English approach on that matter is preferable, as also would I prefer the English approach on the doctrine of collusion, which the Scottish Bill retains and which the English Act abolished.
My Lords, the hour is late and I feel rather an intruder in this debate, except that it is more a social than a legal debate. It is something of great and fundamental importance which touches all of us. These are some preliminary observations and I hope that I have given your Lordships some indication of how the English Act works in the English courts, and that that may be of some help to your Lordships in deciding whether, as I hope you will, to give this Bill a Second Reading.
8.33 p.m.
Lord CAMPBELL of CROY: My Lords, I join the noble Lord, Lord Stow Hill, in congratulating the noble and learned Lord, Lord Fraser of Tullybelton, on his maiden speech, which was made in such an assured and effortless manner that it was difficult, as Lord Stow Hill said, to recognise that it was a maiden speech. Some of us know the notable contribution that the noble Lord, Lord Fraser, has made in legal affairs in Scotland, and we laymen in your Lordships' House were particularly struck by the ease and clarity with which the explained the legal points. I particularly appreciated benefiting from his legal experience in his explanation of the change proposed in the concept of cruelty in this Bill, and I am sure that all noble Lords look forward to hearing him speaking on many occasions on other subjects as well as legal ones.
The fact that the noble and learned Lord, Lord Fraser, and the noble and learned Lord, Lord Kilbrandon, have given their support—and have stated their reasons tonight for so doing—to this Bill will, I am sure, weigh heavily with those who are very sincerely concerned to have divorce law in Scotland in a form which will be best for the institution of marriage and for the community. We are all grateful to my noble friend Lord Selkirk for

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introducing the Bill and for obtaining time for Parliamentary debate. We have an opportunity, and further opportunity will be coming in this House, to discuss a matter of considerable interest in Scotland. This Bill, as he described, originates with the Scottish Law Commission, who have made it clear that they regard reform as necessary in Scotland, in their view for the good of the individual and the community. But this is a subject on which there are strong personal views, which are no doubt held in your Lordships' House as outside, and it has not been the custom for legislation on this subject to be introduced by Governments. This has been the tradition.
There has been a difficulty in another place in finding time for this subject and having recently come from another place, and having sometimes been successful in ballots, and sometimes not, I am well aware that unless a Member of Parliament is in the first eight in the annual ballot for Private Members' Bills he is unlikely to obtain time for a Second Reading debate on the Bill. The first eight in the ballot are always under great pressure from those interested in a whole range of subjects, and it is always difficult for an individual one to get precedence. We are, therefore, glad that my noble friend has found the opportunity for time for a debate in this House on this subject.
It is clear that the Law Commission and most of the Scottish legal profession favour a reform on these lines, and the two noble and learned Lords who have spoken today have made it clear that they share this view. The support for this reform is on its merits within Scotland. That is important; that this is considered in relation to the law as it stands in Scotland and the effects of change to it. It is clear that the majority of the legal profession in Scotland believe that a reform of this kind would not make divorce easier. That is important, because it is an objection which has been raised by those who are doubtful or who are opposed to a reform of this kind. As I understand the reason which has been given why this would not make divorce easier, it is because at present the matrimonial offences, adultery and desertion are grounds, as they still would be if this Bill were enacted, but this means that
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divorce is now virtually available by consent to those who are prepared to stoop to the resorts necessary.
Despite some of today's trends and theories, I believe that most people are still in favour of arrangements likely to strengthen rather than to weaken marriage as a lifelong partnership. It will be a matter of judgment, however, both in this House and in another place, as to whether these proposals strengthen rather than weaken marriage. I believe the principal question to be considered is whether it is best to recognise failure when a marriage is completely dead. The conclusion in this Bill is clearly that it is, and as a result there are these provisions for five-year separation in certain circumstances and two years in others becoming new grounds for divorce. There are a number of people in Scotland whose marriages have been at an end for years, but still exist in name. They have no wish to go through the processes of proving or, indeed, as I have suggested, committing adultery, ascertaining whether the behaviour of the spouse amounts to cruelty for the purposes of the present divorce law, or taking other steps likely to inflict unnecessary pain or embarrassment on other people. The two noble and learned Lords who have spoken today emphasised the distress which they have witnessed in the courts that can occur when such proceedings are started.
Those people in Scotland whom I have described, whose marriages have come to an end, no doubt consider that their marriages are completely dead regardless of whether or not grounds for divorce can be proved in the ways I have mentioned. From correspondence—both public, in the Press, and private—it is clear that most of these people would like to see the reform suggested in the Bill. My noble friend gave some figures showing the number of divorces that have taken place since similar provisions were enacted for England. From those figures—particularly those for 1973—it was clear that there was a backlog of marriages which were completely ended and were then dissolved as a result of the new law in England. If there were a reform of this kind in Scotland, I should expect that there would be quite a number of such marriages ending in divorce through the five year or two year separation provisions, in the course of the first five years

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or so. After that the numbers would no doubt go down, because this situation would be dealt with when the Bill was first enacted.
My Lords, some people will no doubt examine the Bill from the viewpoint: will it strengthen marriage? If marriage is to be lasting and happy is it not as important that it should not be entered into lightly as that its dissolution should be properly regulated? The community as a whole, and those who can influence young people in particular, might well assist towards increasing successful marriages by calling more attention to their beginning; that is to say, the serious step that is taken. I shall not pursue that subject now, but I feel that that is as important, if not more important, as the question we are now considering about the dissolution of marriages, where the strength of marriage as a lasting partnership is being considered. I am glad that my noble friend has taken the trouble to introduce this Bill to enable the discussion to take place. I am sure that noble Lords on all sides of the House will be glad that there is time for a debate on this important question, whatever views they happen to take.
8.43 p.m.
The MINISTER of STATE, SCOTTISH OFFICE (Lord Hughes): My Lords, I first wish to thank the noble Earl, Lord Selkirk, for introducing this Bill and thus giving us the opportunity to demonstrate that in Parliament there is a desire for reform of divorce law in Scotland. That is my first reason for being grateful to him. The second reason is that this debate has given me the opportunity of sharing with your Lordships the maiden speech of the noble and learned Lord, Lord Fraser of Tullybelton. It is now more years than I can be certain of since we first met and sat together on a committee in Scotland. From the interventions which the noble and learned Lord made on those occasions, during the fairly lengthy procedure of our committee, it was quite obvious to me that in due course he would become one of the senators of the College of Justice in Scotland, and it is no surprise to me that he has now landed here in your Lordships' House. I am not so certain that he would have predicted from my contributions to the debate in that committee that I would have been here before him. Like
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my noble friend Lord Stow Hill and the noble Lord, Lord Campbell of Croy, I share the wish that the noble and learned Lord may frequently take part in our debates, and that he does not find it desirable, or necessary, to confine himself to legal matters.
My Lords, the principles embodied in the Bill put forward by the noble Earl have been most thoroughly outlined by him and I need do little more than say that these principles have the general support of the Government. The Government recognise that the law of divorce in Scotland is in need of reform. However, like their predecessors—and this was mentioned by the noble Lord, Lord Campbell of Croy—the Government take the view that ally measure with this aim, which must raise deep social and morel issues, should be sponsored by a Private Member who must seek to attract the support of his fellow Members.
We welcome very much the noble Earl's initiative in bringing forward his Bill. It must be pleasing to him, and of interest to all of us, that all noble Lords who have spoken this evening have been in favour of the kind of changes proposed in the Bill. This is an important indication of what I believe is a widespread view in Scotland. It must be recognised that there are still many people who have sincere doubts and objections to what they consider to be a relaxation of the marriage ties. We must respect those who hold these views, but it cannot be denied that the present situation can, and does, lead to real hardship in individual cases, and we feel that there are strong reasons for changes to meet modern needs.
The noble Lord, Lord Tanlaw, suggested that to become law the Bill will need active Government help in another place, and, in particular, will need to be given Government time if it is to complete its Committee consideration. Of course the allocation of Government time in another place is not a matter for me or for my right honourable friend the Secretary of State for Scotland. But I should be misleading your Lordships if I did not point out that the time remaining in the present Session is limited, and that the Government's own legislative programme continues to place extreme pressure on the Parliamentary timetable. I should hope that the best service we can give to trying to get this Bill on the Statute Book during

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the present Parliamentary Session is to give it the speediest possible passage through your Lordships' House, consistent with persuading people in another place that there has been a proper ventilation of the matters in the Bill. That might enable another place to do what has not been possible up to now. For those reasons, the Government hope that your Lordships' House will give the noble Earl's Bill a Second Reading.
8.47 p.m.
The Earl of SELKIRK: My Lords, I am very glad that this should have been the occasion on which the noble and learned Lord, Lord Fraser of Tullybelton, should have made his maiden speech. That is a matter of great happiness to me. I am also very pleased that he found it possible to say that he would regard this Bill as an improvement to the law of Scotland. I think that I can claim to have known the noble and learned Lord, Lord Fraser, longer than Lord Hughes has known him. It is true that our paths did not overlap at Balliol College, but I think that he, like me, will remember with great happiness many meetings in the august halls of the Speculative Society at which we were both present, I should not say in a distant age but, at least, some years ago. I am very grateful to the noble and learned Lord for joining in the debate on this Bill.
I also wish to thank the noble Lord, Lord Hughes, for what he said. He has been extremely helpful in his remarks, and I realise that time is a problem to us all. But I am grateful to him for saying that the need for a speedy passage, subject to sincere and careful examination, is what it is hoped the House will give to this Bill. I am grateful also to the noble Lord, Lord Campbell of Croy, for supporting the Bill. Of course the important thing is the beginning of a marriage, not the end. I personally would be only too happy if the age of marriage without consent was raised. I think that it would be no bad thing if the age for marriage without consent of parents was raised. But I am afraid that this is not proposed in the Bill, and would probably not be politically very easy to achieve.
I also thank the noble Lord, Lord Tanlaw, for what he said in giving the support of the Liberal Party. He empha-
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sised that we are here concerned with a personal matter on which there is not many votes for anyone. But it is essential to give relief to spouses and help to children. This is the object of the exercise, which I greatly hope will be attained.
It was very good of the noble Lord, Lord Stow Hill, to take part in the debate. I am grateful to him for emphasising that this is not just a recapitulation of matrimonial offences; it is something quite different. It puts an emphasis on breakdown which is different in terms of humanity and civilised life and of an entirely different character. The noble Lord mentioned the matter of a single act of divorce. This subject is dealt with extremely well by the Morton Commission, at paragraph 117, and it is an extremely valuable point.
The noble Lord also raised the question of connivance. I do not want to go into this in detail other than to say that connivance is possibly more positive in Scotland and less negative in England. We do not want to encourage people to do what is after all a put-up thing before the court. My Lords, we take it away—and it will not make all that difference either way. Besides which, English law has a slightly different attitude. How could you connive with your wife, or spouse, to commit adultery and then say that the cause of the break-up of the marriage which had been made intolerable was the adultery? It seems to me that this is an impossible situation. We do not have that provision under the Scottish Act. It may be necessary, but this is a matter which can be considered in Committee. I should like to thank the noble and learned Lord, Lord Kilbrandon, for taking part. I think it is the great strength of this House that the authority and experience of a former chairman of the Scottish Law Commission is available to your Lordships.
On Question, Bill read 2a, and committed to a Committee of the Whole House.

ISLAY FERRIES SUBSIDY
8.51 p.m.
Lord BELHAVEN and STENTON Lord BELHAVEN and STENTON rose to ask Her Majesty's Government whether, taking account of representations

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from the people of Islay, they will now allocate to Western Ferries a fair share of the £2½ million subsidy granted to Caledonian MacBrayne, in view of the fact that Western Ferries are the principal carriers to the island. The noble Lord said: I am sorry that my Unstarred Question has come on at such a late hour, but I hope that I shall be able to speak briefly enough to enable the noble Lord, Lord Hughes, to catch the 11.35 to Edinburgh or to wherever he is going, and that he will not have to blame me if he misses his train. I am fortunate in that I am catching an aeroplane tomorrow morning. I could talk all night, but I will not. My Question may not seem to be of much moment compared to the great issues which concern the country today, but in my view it concerns justice to a small and remote community and is eminently worthy of your Lordships' attention. I hope to demonstrate this evening that upon the answer given by Her Majesty's Government may depend the survival of the island of Islay as a place where ordinary people can work and live.
The basic facts are simple. In April this year, Her Majesty's Government decided to grant a subsidy of £2½ million to Caledonian MacBrayne, a Government-owned concern, which is one of the two ferry operators to the island of Islay. It is estimated—and I apologise to those who know all about this already—or I have read, that Islay's share of this subsidy is in the region of £300,000 to £400,000. The rest of the money will be going to subsidise those routes to the other Hebridean islands on which Caledonian MacBrayne already have a monopoly. The other ferry operator on the Islay run is the privately-owned firm of Western Ferries, who are at present the major carrier to the island. Western Ferries have applied to the Government for a subsidy comparable to that given to MacBrayne; and so far this has been refused. In view of the Government's refusal, Western Ferries have given notice that they will take their ship off the Islay run in September.
Those are the bare facts but, above everything else and beyond the bare facts, we are concerned with the threat to the livelihood of every person who lives on the island. To put your Lordships briefly in the picture, the island of Islay
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is presently served by two ferry operators. Both operate from piers separated by five miles on the South side of West Loch Tarbert, and are 100 miles and 105 miles respectively from Glasgow. The crossing, whichever service one chooses, takes between 2 hours and 2½ hours. Effectively, Islay is at least twice as far from the Scottish mainland as Dover is from Calais, and as far from Glasgow—the centre of local government—as Dover is from Paris. Thus if your Lordships could picture Dover as an island with its centre of local government somewhere around Orleans or Tours, there would be a situation analogous to the situatiou which exists in Islay today.
The island has 4,000 inhabitants who get their living basically from whisky distilling, farming and tourism. There is also a fairly vigorous inshore fishing industry and a local clam factory. I was going to say what the whisky industry produces in excise every year, but as I asked a Question today and could not get an Answer from the Government, I can only say that a pamphlet produced by the Western Ferries says that the figure is £12 million. I have heard estimates of between £60 million and £120 million; so that I cannot tell your Lordships. The same estimate which I read said that it produced £6 million in exports.
On the island there are 16,000 breeding cattle and 24,000 breeding sheep and a large number of hotels, guest houses and other establishments. In view of the excise income and exports which Islay produces, I do not think it can be said that whatever subsidy is given to the services to the island can be a burden on the Exchequer. In fact, the situation is very much the other way round. If anybody is a burden, one could say that the Exchequer and the excise is a burden on Islay.
Transport has always been the principal difficulty for the island. For many years it suffered what I can only call one of the worst systems of communication in the Western world. Until 1968, MacBrayne—I think they were called David MacBrayne then—had a monopoly of the route and served the island with one boat a day on six days of the week. The boat was antiquated, slow and expensive. It was side-loading and all freight, including cars, had to be lifted

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on to the ship by a crane which for a driver could add three-quarters of an hour to the journey either way while he waited to have his car on- or off-loaded.
In 1968, all that was changed by the intervention of the private firm of Western Ferries with a drive-on/drive-off boat which operated three times a day seven days a week. They cut fares and also made a profit—a thing that MacBrayne's had almost forgotten how to do. MacBrayne's were then compelled by the logic of the situation—I do not know the exact date—to alter the boat on the Islay run to drive-on/drive-off and to cut their fares. It may seem extraordinary that it took Western Ferries to give MacBrayne's the idea of drive-on /drive-off which had been common practice in most parts of the world long before Western Ferries intervened. How much fares have been cut by is simply demonstrated. A Land Rover in 1961 cost £12 10s. to transport one way. Today the same car costs £9·50 return. That is inflation in reverse and something we should like to see. It is also an interesting fact that MacBrayne's fares were cut substantially only on the Islay run. It still costs today twice as much per sea miles to travel on the routes on which MacBrayne retain the monopoly.
There can be no doubt at all that the intervention of Western Ferries changed the quality of life in Islay almost beyond recognition. Articulated lorries could get across, food and commodity prices fell dramatically, commodities which had been impossible to get on the island became as available in Islay as they always had been on the mainland. The island started to thrive and to be prosperous as she had not been for many centuries. Is it any wonder that people view with growing alarm the possibility that MacBrayne's may once again have the monopoly on this run? The least that will happen if they do is that fares will probably double—or triple or may even quadruple, and I am taking the history of MacBrayne into account.
The result of the intervention of Western Ferries was simple and dramatic. The population of Islay has ceased to fall. The contrary is true of every other island in the Hebrides. I can only say the reason is that the island
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has the cheapest and most efficient ferry service in the Hebrides and all this is now at risk. I do not know whether or not I should say any more about MacBrayne's. Their history has been unfortunate, but we all know that there is joy in Heaven over the sinner that repenteth, and so there would be in the Hebrides if Caledonian MacBraynes were to be run more efficiently, and were they to make a profit. No one that I know on the Island of Islay wants MacBrayne to leave the route. The contrary is the case. They still perform an invaluable service and, were they to leave, Western Ferries would have a monopoly, possibly with the same result which took place when MacBrayne's had the monopoly.
I know the Government say they cannot subsidise competing services, but I do not see the reason for this. It is possibly an imperfect analogy, but the Government since the War have subsidised competing farmers. It is said by the Government that because there are two competing operators neither can get enough of the traffic to run economically. But we know there was a period when Western Ferries ran economically, and the prosperity of Islay has increased dramatically since the intervention of Western Ferries. Granted the continuance and improvement of the transport services to Islay, there is no reason why that prosperity should not continue to grow to the benefit of Islay, to the benefit of the whole community and the ferry operators, whose business should soon rise to a level where they will be able to operate more economically.
In my view it needs only an act of faith by the Government to tide over both operators in the present difficult period. I said that it is difficult to speak about Caledonian MacBrayne without being critical, but I should like to say briefly that I am not criticising the excellent and courteous crews and people on the docksides whom I know personally, many of whom are my friends. I do not think they are to blame at all for the inefficiently-run concern for which they work.
Briefly, to compare the two services, the new ship the "Pioneer" is a good one and runs from Portaskaig to Feolin. It cost three times as much as the Western Ferries "Sound of Jura", and costs twice as much to run. It has a crew

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three times larger and, on top of that, takes less freight and only a few more passengers. Some people find it hard to understand the Government's logic in supporting an inefficient operator to the obvious detriment of an efficient one. I very much welcome the maiden speech of the noble Viscount, Lord Astor, because nobody has thought of Jura and I am sure that from the noble Viscount we shall hear something about Jura. I wonder what will happen to that island should the Western Ferries pull out.
My Lords, I have been speaking for too long, but my Question is not related to the getting of money for a private firm which is looking for a "quick buck "at the taxpayers' expense. I have already demonstrated that the taxpayer is making a profit from Islay, anyway—probably an enormous profit. I am asking the Government—and I do not think I am exaggerating here—to consider the very continuance of human life on the island of Islay which has been inhabited since the dawn of our history. I do not think that it is too much to say that a refusal to act now by the Government, a refusal even to consider Western Ferries' request for a subsidy could possibly result in the distilleries having to close down, in farming becoming so expensive and uneconomic, in the fishing industry seeking other ports which are easier and more economic to use and tourism dying for lack of transport, or because transport becomes so expensive as to be prohibitive.
In short, I believe it could result in a catastrophic situation which will prove that a Labour Government are able to achieve what even the clearances were not able to achieve; that is, the death of Islay as a place for ordinary human habitation, and for habitation by any but the super rich. I ask Her Majesty's Government to consider seriously whether this is their objective in refusing to subsidise Western Ferries. My Lords, I cannot believe that it is.
9.5 p.m.
Viscount ASTOR: My Lords, I rise with great trepidation to make my first speech in this House, though in choosing this debate perhaps it should be called a maiden voyage rather than a speech. I speak today as someone who has a vested interest in this debate—that is, I live on the Isle of Jura. For those to whom
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this means absolutely nothing, I must explain. Jura is an island next door to Islay and at its most southerly tip is only half a mile away. It is totally dependent on Islay for its communications with the mainland. It has no ferry service of its own, but has to rely on a small car ferry to Islay from where one can connect with ferries to the mainland. The island has a population of only about 200 people. Like Islay it has a distillery bringing in a large amount of revenue for the Government, and it earns a significant amount of foreign earnings from its sale abroad of venison.
For the past seven years, Jura and Islay have had one of the cheapest and most efficient ferry services in Scotland. This is now threatened. I do not want to reiterate all that the noble Lord, Lord Belhaven and Stenton, has said, but prior to 1968 the two islands was served by the MacBrayne ferry which sailed only once a day. It could carry only a limited amount of cargo, and a few cars which had to be lifted on board by a crane. En 1968 Western Ferries introduced a new roll-on/roll-off "car and lorry ferry to Islay. This was the first of its kind. It operated three times a day, seven days a week. It offered much lower rates than MacBrayne's without any subsidy. It was the first ferry to operate on a Sunday, and was so successful that a year later a larger ship was introduced to cope with increasing traffic. It was then possible to take one's car to the islands cheaply, which benefited tourism; but, more important, container lorries could now be used to take goods to and from Islay, cutting the costs of transport for the farmers and distillers.
Last year Caledonian MacBrayne introduced their new version of a "roll-on/roll-off "ferry. Their charges were lowered to compete with Western Ferries and they announced that they would operate without a subsidy. Their ship is much larger and faster than that of Western Ferries, but much more expensive. It has nine more crew and its route is longer. It is forced to make up time by travelling faster and using more fuel. So now we have two ferries competing on the same route, one supported by the Government, through the Scottish Transport Group, and the other a private company, but both charging the lowest fares per mile in Scotland.

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But due to increased costs, Western Ferries should now increase their charges in line with inflation. Caledonian MacBrayne have been granted a £2½ million subsidy to operate their ferry services. With this money they will be able to subsidise their Islay ferry and so force Western Ferries out of business. MacBraynes are not required by the Government to state how much money they allocate to each individual ferry service. Although they originally said they would operate the Islay route without a subsidy it is obvious that they are unable to do so. MacBraynes must be losing money on the Islay run. The fares on a per mile basis are half what they are on any other MacBrayne service. Even on the unlikely basis that they make money on this route, it would show that they are grossly overcharging on all their other routes and therefore need no subsidy at all. Obviously, competition has kept fares on this route below those of any other route in Scotland. This is now threatened.
If MacBraynes are given the subsidy Western Ferries will be unable to continue, and this will create a great deal of hardship for the people of Islay and Jura. The residents of Jura will have to travel an extra 25 miles across Islay to connect with MacBraynes ferry, incurring a longer journey and added expense. At the moment there is no proper bus route or any form of public transport. MacBraynes would not be able to operate to Port Askaig, on Islay, as Western Ferries do. There is no public pier suitable for docking their ships, so a large amount of money would have to be spent in making a suitable new pier. Even when the people of Jura, and Islay for that matter, manage to get to MacBraynes ferry they might not be sure of getting a place. During the busy summer months one operator would not be capable of carrying all the traffic. Far more important, one could foresee in a few years' time MacBraynes, with no competition, increasing their fares in line with their other routes; in other words, doubling them on the Islay run.
The question is, what should be done? If MacBraynes are given the subsidy the Government will have killed off a private enterprise and created another monopoly. The people of Islay and Jura would like
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to see a properly operated, efficient ferry charging the lowest possible fares. Western Ferries have proved in the past that they can do this as well, if not better than, MacBrayne. There is a strange tendency among Governments to believe that a Government-owned company is the only kind of company suited to operate any public service. In practice, private companies are publicly accountable by law and may be more forthcoming with information than are nationalised concerns.
I urge the Government not to grant this subsidy without looking at the alternatives. It must be desirable that both companies should be treated in the same way to keep up healthy competition which has kept fares as low as they are. There is room for both to operate together, to help each other and the community. Either no subsidy should be given—but of course this would mean that both companies would have to increase their fares—or each should be given a subsidy on their merits. A possible way of doing this would be to pay a grant to each based on the number of people and the traffic they carry. It is really nonsense to imagine, as many people do, that both cannot be subsidised to continue. I urge Her Majesty's Government to bring together both operators to work out how support can be given to keep both services operating. I thank the House for listening to my speech and I hope the situation will resolve itself so that I shall still be able to catch a ferry from Jura in order to enable me to attend your Lordships' House.
9.12 p.m.
Lord TANLAW: My Lords, we must thank the noble Lord, Lord Belhaven and Stenton, for bringing our attention to this particular ferry service. Obviously something is wrong here. There has been concern in the islands and various letters which no doubt all of us have received from the Islay Transport Users' Committee and so on indicate that they are worried about the future of the service provided by Western Ferries. It was good to hear the noble Viscount in his maiden speech speak with such confidence and authority on this subject. I feel that he has made a very serious and helpful contribution to this debate. I liked very much his questions about the accountability of public services.

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It is really a question of the whale and the sprat. Western Ferries is a small and popular service doing a good job. It seems to be worried about the future mainly because its competitor, its only competitor on this short run, is the "Pioneer ", the ship provided by Caledonian MacBrayne. The "Sound of Jura" is a small private enterprise ship competing against all the mammoth facilities available in a public enterprise. That is what it sounds like and the case put forward by the Users' Association gives this impression. It is perhaps oversimplifying the question to say that it is simply a matter of cost per mile and who is to pay it.
Both these ferries, the "Pioneer" and the "Sound of Jura" are providing a service. But from the information I have received, it appears that the "Pioneer ", the Caledonian MacBrayne craft, appears to be over-manned, over-powered and under-utilised. This may or may not be true, but I have had some experience of running a similar ferry service in another country and the only thing that really matters is the load factor and the cost per mile. I feel that the situation could be very simply resolved. If Western Ferries did not increase their price and still provided a good service, fair enough; but with inflation they may be unable to do so. As I understand it, their complaint is that Caledonian MacBrayne will not increase their price to the level of Western Ferries because they are getting a subsidy from the British taxpayer and therefore running an uneconomic service at an uneconomic price.
I hope that the noble Lord the Minister will be able to resolve the problem very simply by giving us the equivalent cost per mile of the operation of the two ferries and saying whether or not it is the intention of Caledonian MacBrayne to pump money into" The Pioneer "operation if that operation is uneconomic; because the simple truth of the viability of these services can be seen only by means of proper accountability. Western Ferries' accounts are available to anybody who asks, presumably, and certainly to the shareholders. The accounts of Caledonian MacBrayne are not.
As I said earlier, there is obviously concern in the Island about the future of the ferry service, and I would ask the
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Minister to let us have a straightforward comparison of costs and load factors of the two ferry services. If we had those figures, the situation could be resolved in a sensible way very quickly, but if Western Ferries have to withdraw their services through "unfair competition "because their competitor's services are heavily subsidised by the taxpayer and they are therefore able to offer far lower fares, people in these islands are going to suffer simply because the services will be withdrawn. Also, as the noble Lord, Lord Belhaven, indicated, if Caledonian MacBrayne have a monopoly in this area, the prices will be doubled, if not trebled. There is no more to be said than that.
I have heard all sorts of descriptions given to the competition between the two services: in fact last night when I rang up a person whose home overlooks the Straits, they were compared with Oxford and Cambridge. It seems that the engines of "The Pioneer" have to be driven flat out if she is to compare with the "Sound of Jura" on time for the journey. This is all very dramatic, but something has to give, my Lords. A very small population is involved, and it seems to me that the ferry services need some form of guidance and attention and we need—indeed this is the point of the noble Lord's Question—some further elucidation on the comparative running costs of the services. So I hope that the noble Lord the Minister will be able to clarify the matter for us at the end of the debate. Meanwhile, I must say that if this particular worry is not resolved it could easily provide the basis of an entertaining story by some writer like Compton Mackenzie, who used material from that part of the world when he wrote Whiskey Galore. I can see that someone, somewhere, might produce an equally interesting story on the theme of public versus private enterprise in the Straits of Jura.
9.18 p.m.
Lord STRATHCONA and MOUNT ROYAL: My Lords, I must begin by apologising to the noble Lord, Lord Belhaven and Stenton. For once, I overrated the loquacity of the Scottish lawyers and unfortunately missed the opening passage of his speech. The noble Lord has performed two services for us ibis evening. First, he has caused the noble Viscount, Lord Astor, to make his maiden speech in this discussion. I wel-

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come him as a neighbouring Islander and must congratulate him on an extremely informative, if perhaps not wholly nonpartisan maiden speech. I am sure we are very glad to see somebdy so young joining us, confident that we shall have him around for perhaps more years than many of us will be here to see.
I have known this service for many years. Indeed when I hear people talking about "The Pioneer", I am bound to say that I remember a splendid old steam-driven paddle steamer which used to he on this service. I think it is a pity that this debate has come on so late, because the second useful service performed for us by the noble Lord, Lord Belhaven, has been that in raising what looks rather like a parochial question, he has in fact raised a number of issues in trying to assess the relative merits of two systems and how best to deal with such a situation. A number of the issues which arise are of a very much wider application than merely to the Islay services. They apply to nearly all the island services around Scotland, and indeed to some of the air services as well.
The first thing we must think about is the level of charges. I believe there is a gathering momentum for the school of thought which deals with what I suppose might be called the Norwegian approach, in saying that these services are essentially to be regarded as extensions of the road system, and therefore that the level of charges which it is reasonable to exact from people using them should be based on comparable costs by road. This is where there is a sea link to inaccessible and remote parts of the country, where these charges can be regarded as comparable costs to those experienced by people on the mainland. This nearly always means that the services are going to be economically unviable. But it is just worth making the point, before people start to complain about this comparison, that even if the charges are made comparable with road charges, the people living in these areas still have to put up with a very much less convenient service and very much less frequent service. In the case of my own home, like many of the other small islands, we have three steamer services a week, so of course
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we regard Islay as rather well served in any case, whether or not one or other of their services is withdrawn.
Of course, MacBrayne is a West Coast institution and I suppose the favourite participator sport of the people who live up there may be described as "MacBrayne bashing". A good deal of this criticism is unfair and misdirected. They do a job—a very difficult and almost impossible job—and certainly not a job which can be done on an economic basis. It is fair, therefore, before one goes on to say that unfortunately they call down criticism on their heads, to pay tribute to the people who staff their ships and services. They are in my experience unfailingly courteous, helpful and good-natured. It seems to me all the more unfortunate, therefore, that the company leaves itself wide open to some of the criticisms we have heard levelled against it this evening.
There is one particular group which seems to me entirely legitimate. They have a habit of not publishing their schedules until so late in the year that people have already made, or have wanted to make, all their holiday reservations in the hotels and cottages in this part of the world; and I cannot believe that this is necessary. The schedules should be published at least by the New Year, when the steamer services affect the whole way in which the booking pattern is organised. Indeed, the same argument must apply to businesses operating in this part of the world. The other point which has come through from all noble Lords who have spoken this evening is the great reluctance that this company has to produce facts and figures. If a company or organisation is receiving £2½ million of public funds, it seems entirely reasonable that it should be asked to say where it is spending it. The very least information one would require is the direct costs and revenues on each of these services—they are totally distinct. We do not want them to be—and I fear this happens—deliberately loaded one way or the other by putting on overheads, which should be shown quite separately. I shall be surprised if the noble Lord, Lord Hughes, is able to produce for us cost figures, even though I have no doubt he is able to twist the arms of the Caledonian MacBrayne management rather more effectively than

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I have been. Many of us have tried for many years to get figures out of them.
I may add that the same goes for the Post Office. I have never been able to discover how the mail contracts are allocated, or whether indeed they are allocated, as between one service and another, so that one can assess the various possibilities for operating each of these services. I am reluctant to arrive at the rather unworthy conclusion that these managements are so incompetent that figures simply do not exist. However, if they contiue to decline to produce them, one is bound to assume the worst.
This leads me to make a suggestion. Would it not be possible to allocate these subsidies for services of this kind on some sort of tender basis? Once the need for a general service is established, could we not detail the amenities, the terminals and the equipment to be used? Then could we not ask the organisations concerned to say how much subsidy they will require to operate a service of a given quality and frequency? I would suggest that any company which is in receipt of a subsidy should then show annually all its revenues and income against its direct costs, and that separately it should show the overheads and the depreciation which have been allocated against that particular service. Then, in order to maintain a fresh outlook, keenness and the possibility of introducing new services, could we not say that every five or seven years the whole question should be re-examined and that the possibility of reallocating the services or establishing a different type of service should be considered?
If we may return to the issue which is before us this evening, it seems to me that a formidable case has been made. Is it not a possibility that if, indeed, it is established that they are using a subsidy on this service—and so far as I know this has never yet been established beyond peradventure—the subsidy that we are giving to Caledonian MacBrayne in this instance is a waste of public money? Once again, therefore, the first step must be to insist that the company produce proper costings of their activities on this run. There is no doubt that Western Ferries have run a popular service in a fresh, new, interesting and, indeed, very convenient way.
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They have shown the possibilities of this type of service with the roll-on/roll-off ferry which has now been very widely adopted. I believe I am right in saying that the effect has been to make this one of the lowest cost runs per mile of any of the ferries on the West Coast. I rely on MacBraynes and have no wish to be rude about them. They are a splendid West Coast institution, and if they are as efficient as they always claim to be when you write to them I suggest that they would have nothing to fear by having their results compared against the results of Western Ferries. This is what I should like to see happen.
9.29 p.m.
Lord HUGHES: My Lords, I would be insincere if I began by saying that I am grateful to the noble Lord, Lord Belhaven and Stenton, for having brought this Question before the House. I would be insincere because I shall not be giving any of the noble Lords who have taken part in this discussion the answer that they want. Therefore, I cannot be grateful to anybody for putting me in that position. However, I am grateful to the noble Lord for having confined his remarks to an extent which makes it quite certain that the only person who can now stop me from catching my train is myself, and that I have no intention of doing! When the noble Lord said that he was catching a 'plane in the morning I had a momentary fear that he would stop here all night and I wondered what would have happened if I had intervened at that point to say, "If you do I shall not be here to answer you".
Generally speaking, the position has been fairly stated, given the points of view of the noble Lords concerned, although I thought that perhaps in keeping with the need to compete with his friends in another place the noble Lord, Lord Belhaven and Stenton, as the Scottish National Party in this House, indulged in a certain degree of exaggeration, to which of course the noble Lord, Lord Campbell of Croy, would perhaps interject that this is what we are entitled to expect from that Party.
That is as far as I wish to go on the controversial note, but speaking of controversy brings me to the maiden speech of the noble Viscount, Lord Astor. It was an admirable speech and I do not think it was at all marred by the fact that

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he did not strictly adhere to the need to be non-controversial. In fact he was only non-controversial to the extent that I am the one who is disagreeing with him. So far as everybody else is concerned there was no controversy about it at all. Notwithstanding the difficulties of the ferry service, I hope he will find it possible to be here frequently and that he will favour us often with his contributions to debate, whether I find them controversial or otherwise. It is a very special pleasure to note that not everything in the world is wholly bad; one of the advantages of the hereditary system is that it enables people of the age of the noble Viscount and my noble friend Lord Melchett to remove the impression that this institution is merely an extension of a geriatric ward.
My Lords, my right honourable friend the Secretary of State recently reviewed the arrangements for the support of the shipping services to the Scottish Islands, principally in relation to the finances of the Scottish Transport Group's two shipping subsidiaries, Caledonian MacBrayne and David MacBrayne. He announced his intention on 16th April of making financial support available for the services provided by Caledonian MacBrayne Limited. These, of course, were not only to the island of Islay. It will be recalled that David MacBrayne Limited serves those islands which are too small and remote for services for them to come anywhere near financial liability and these services have always been supported by the Government. The payment in 1974 was £746,000 which was about twice the revenue that the services produced.
When Caledonian MacBrayne was established as a separate company it was the intention that its services should meet their costs and should to that extent be operated on a commercial basis. For various reasons that aim has not been realised and the company needed either a substantial increase in charges or financial support from outside, or a combination of these. My right honourable friend concluded that the Caledonian MacBrayne services could not in the immediate future pay their way without an increase in charges to a level which he thought would be generally regarded as unacceptable, since an increase in the order of 65 per cent. would have been necessary. He therefore decided to pay
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a new annual grant in respect of these hitherto unsubsidised services, which is expected to amount to about £2·5 million in respect of the company's 1975 financial year. In addition charges were increased on all the Scottish Transport Group shipping services so as to bring in a little over 17 per cent. of extra revenue. That is 17 per cent. against a non-subsidised need for an increase of 65 per cent. To minimise the effect of the increase in shipping charges on economic activity in the islands the increase for commercial vehicles was restricted to 5 per cent., though for private cars it was 25 per cent.
In deciding to introduce this new grant for the operation of these services, my right honourable friend considered the position of Islay, as both Caledonian MacBrayne and Western Ferries, which is a private company, provide services to that island. He decided that it would not be appropriate for him to exclude Caledonian MacBrayne's Islay service from the general arrangements he was making.
The first reason was that the grant to Caledonian MacBrayne is for its services as a whole and its main purpose is to prevent fares from rising to an unacceptably high level over the whole range of the company's services. Secondly, he had in mind the fact that the Scottish Transport Group has in effect a public service obligation in respect of its shipping services on the Clyde and to the Western Isles. This was reinforced in the case of Islay in 1972, when in the interests of rationalisation the Scottish Transport Group decided that it would be better to withdraw and leave the field to Western Ferries. Following a hearing, the Transport Users' Consultative Committee for Scotland, which received a large number of representations against the withdrawal, recommended that the MacBrayne service to Islay should continue. This recommendation was accepted by the then Secretary of State, the noble Lord who is now whispering to the noble Lord, Lord Strathcona and Mount Royal.
Following the announcement of my right honourable friend's decision, a good number of representations have been received by the Scottish Office, asking that subsidy should be extended to the Western Ferries service also. Our feeling is that it would not be a sensible

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proposition to pay Government subsidy to two competing services, even though the existence of those services has led to undoubted benefits to the people of Islay in the form of a carrying capacity larger than that enjoyed by other islands.
It should be remembered that this Islay business is not something which started with my right honourable friend's decision to include MacBrayne's Islay services in the subsidy arrangements he was making. This is but one further episode in a matter with a history going back several years. It was certainly not the intention that the arrangement for subsidy to Caledonian MacBrayne, which was meant to benefit the islands as a whole, and has been generally welcomed, should lead to Western Ferries' withdrawal, but since they are a private firm the decision is one for them alone in the light of all the circumstances affecting their business.
Lord STRATHCONA and MOUNT ROYAL: My Lords, may I interrupt the noble Lord for one moment? I am in slight confusion about what he calls the new grant of £2½ Is this on top of the old subsidy which MacBrayne's have historically always received; and are we to understand, therefore, that the total grant being received by MacBrayne is in two parts and is in excess of £2½ million?
Lord HUGHES: Yes, my Lords. The figure which I mentioned of £746,000 was the amount of subsidy given to David MacBrayne in 1974 in respect of their services to the small islands, which everyone accepts can never be viable and which can be continued only on the basis of being subsidised. On the figures I gave, if my arithmetic is right, about two-thirds of the cost of those services comes from subsidy and only one-third comes from the fares collected. As I said, when Caledonian MacBrayne, the other company, was set up it was the intention that that would be a wholly commercial proposition, and the experience of the last year has been such that we have accepted that if the original concept was maintained the fares would have had to be increased by a figure which the Government agreed was wholly unacceptable. The alternative, therefore, was to introduce this new subsidy, which is expected to amount in this financial year to £2½ million. I would suspect, therefore, that the total subsidy to the two companies
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will be £2½ million, plus a figure for the other islands, which is not likely to be less than the amount which had to be paid in the year 1974.
If I may turn to some of the points made during the discussion, the noble Lord, Lord Belhaven, in bolstering up rather needlessly what could be a reasonable case to put forward, went back into the rather dim and distant history of MacBrayne's services. As the noble Lord, Lord Strathcona, has said, there is no more universal sport in the Highlands than MacBrayne bashing, and the noble Lord, Lord Belhaven, made it quite clear he was prepared to join in that. But he, at least, ought not to have gone back before the present operators, because in the period which he talked about MacBrayne had a different management altogether. At that time it had the advantage, if one could so call it, of being 50 per cent. in private ownership. It was only in 1969 that the Scottish Transport Group was set up. So the improvements in the type of vessel which became possible after that were something quite different from the circumstances to which the noble Lord referred.
Lord BELHAVEN and STENTON: My Lords, I am not arguing private enterprise against State control. Whether it was called MacBrayne, or David MacBrayne, or something MacBrayne, it was still a monopoly, and that was the point. Pre-1968 we had a monopoly, whether State owned or privately owned, or owned by whomsoever.
Lord HUGHES: My Lords, I am dealing with the point where the noble Lord was comparing the situation that exists today with the improvements that have been made, and implying that it was only because Western Ferries appeared on the scene that this happened. It was not. It was because a completely new operation was set up by the creation of the Scottish Transport Group, whereas hitherto what could be spent on the route obviously had to be covered by what the privately owned half of the concern could afford to carry in losses. Eventually we know that they sold out to the Scottish Transport Group.
The noble Viscount, Lord Astor—and the noble Lord, Lord Belhaven and

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Stenton, anticipated what the noble Viscount would say—referred to the service from Jura. So far as I know, the service between Jura and Islay is also operated by Western Ferries. I do not know what they intend to do, but they certainly have not indicated that they are proposing to withdraw their connection between the islands. That may of course be influenced by the fact that in this case they do not operate the service without a subsidy, because they receive a subsidy of aproximately £20,000 a year from the Strathclyde Region, and, having regard to the incidence of rate support grant, the Chancellor of the Exchequer is picking up the biggest part of that contribution. So subsidy in this part of the world is not confined to the State enterprises; it is given, where the service is being provided only by Western Ferries, to Western Ferries on the basis that it is reasonable to support a necessary service which cannot be viable. But I do not think that it is reasonable to extend from the need for supporting the services which are the only ones that can be provided, to double up a subsidy to enable two concerns to compete with each other. These are the reasons why the Secretary of State has felt unable to provide a subsidy to Western Ferries.
The noble Lord, Lord Strathcona, raised a point about the Norwegian basis of considering it equal to the road equivalent. This has been considered by successive Secretaries of State. One of the odd things about politics in Scotland is that although we disagree violently on certain things, Secretaries of State nearly always come to the same conclusion about the services to the islands. These conclusions are twofold: One, that they have to be subsidised very substantially; and, secondly, that this must not be turned into an open hand into the public purse, which is what the Norwegian experiment would do. What may be suitable for them is certainly not suitable in our circumstances. The cost to the Exchequer, if we were to do it in that way, would be very high. It is estimated that it would mean that three-quarters of the cost of operating the services would be a direct charge on the Exchequer. I do not want to be offensive, but given the way of life in parts of Scotland—and the Islands are not exceptions to it—where
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it is felt that the maximum use of what used always to be called the "subsidies "was a legitimate way of life, we ought not to open this too wide.
The noble Lord, Lord Belhaven and Stenton, did not see why we should not be subsidising competing services, because, he said, we subsidise farmers who are competing with each other. One point on which I am wholeheartedly in agreement with the Farmers' Unions both in this country and North of the Border is the fact that the system of payments is not in respect of subsidies to farmers. They are payments to keep down the cost of the end product to the consumer, while enabling the farmer to get a reasonable return for the work he puts in. So it is not quite the same thing. Thus, I think it would be totally unreasonable to have people being subsidised against each other.
I recognise that this Answer will be totally unacceptable to the noble Lord, Lord Belhaven and Stenton, and I am sorry about that because I was rather interested in the views he put forward. He does not normally follow the line which his colleagues along the corridor take and he has not done so tonight. I had the impression from his remarks that, far from needing a separate Scottish Government to solve the problems of Islay, prosperity would be guaranteed and the island's future would be brighter than it has ever been, possibly since its population started, if only the Western Ferries service could be given a subsidy. I wish that the Party as a whole thought that the problems of Scotland generally could be solved in so simple a fashion. Unfortunately, however, that is not the simple solution here either.
Naturally, MacBrayne would have to review the pattern of its services if, as a result of all this, Western Ferries decided to withdraw from the Islay route, because it would have to ensure that the island's needs were met in the most effective and economic way possible in the new situation. I emphasise that the Secretary of State will, of course, continue to exercise general oversight over the level of future fare increases on Caledonian MacBrayne services as a whole.
I was asked about the provision of detailed information. Caledonian MacBrayne's accounts are, of course, laid

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before Parliament, but they are not broken up into individual routes and services. It must be obvious that in a service of this kind some services probably have to be subsidised to a very much greater extent than others. If we did give a breakdown of these figures, we would almost certainly have the people whose routes were receiving a comparatively small subsidy asking that the subsidy on their routes should be brought up to the level of the high ones, and that therefore their fares should be reduced, and vice-versa. So the Government stand to lose all ways round if they break these figures down into the individual routes. I am not sure that Western Ferries break up their accounts. They put their accounts in as required by company law—
Lord STRATHCONA and MOUNT ROYAL: My Lords, I have here a little booklet put out by Western Ferries, giving their break-down of the costs on this service, and their guess as to MacBrayne's figures.
Lord HUGHES: My Lords, are those the figures which would appear in the accounts which are submitted to the Registrar of Companies?
Lord STRATHCONA and MOUNT ROYAL: My Lords, I do not know whether these figures are in their accounts, but they are certainly published, because I have the booklet here.
Lord HUGHES: Yes, my Lords, but the accounts go into the Registrar of Companies in the ordinary way of commercial practice. This is a propaganda document in connection with this exercise, and the two are not necessarily the same thing. But I think I can say with certainty that it would not be possible for people to disprove or challenge these, other than to the extent to which, in talking about MacBrayne's, they are hypothetical. I am sorry that I cannot give a more satisfactory Answer to those noble Lords who have taken part in the debate. My noble friend Lord Davies of Leek who apparently has journeyed on more than one occasion to these parts, has told me that when next he goes to Islay and the people ask whether he knows Hughes, he will say that he has never heard of me.

FRASERBURGH HARBOUR ORDER CONFIRMATION BILL
Brought from the Commons; read 1a and (pursuant to the Private Legislation Procedure (Scotland) Act 1936) deemed to have been read 2a and reported from the Committee.
DISEASES OF ANIMALS BILL [H.L.]
Returned from the Commons agreed to.
INDUSTRIAL AND PROVIDENT SOCIETIES BILL [H.L.]
Returned from the Commons agreed to.
  INVERESK RESEARCH INTERNATIONAL: EXPERIMENTS ON ANIMALS
  INVERESK RESEARCH INTERNATIONAL: EXPERIMENTS ON ANIMALS
  EEC: MEAT HANDLING STANDARDISATION
  EEC: MEAT HANDLING STANDARDISATION