Sitting of 1 May 1975

Preamble
The House met at half-past Two o'clock
PRAYERS
[Mr. SPEAKER in the Chair]
ORAL ANSWERS TO QUESTIONS
  NATIONAL FINANCE

    Inflation
    Mr. Norman Lamontasked the Chancellor of the Exchequer whether he is satisfied with the progress of his anti-inflation policy.
    Mr. Skinnerasked the Chancellor of the Exchequer if he is now satisfied with the current level of inflation; and if he will make a statement.
    The Chancellor of the Exchequer (Mr. Denis Healey): I cannot be satisfied when our inflation is far above that of most of our foreign competitors. But I think we can make significant progress in reducing inflation this year if the rate of pay increases does not accelerate.
    Mr. Lamont: I should like to ask the Chancellor a question about the arithmetic behind the social contract. Even if we made the assumption that the social contract limited wage increases to price
    increases, would that make any significant difference to the rate of inflation? Given the slow growth in productivity, and the fact that commodity prices will not fall indefinitely, is it not the reality that to make any significant impact wages will have to rise somewhat less than prices?
    Mr. Healey: No, Sir. If the wage increases were about 9 per cent. less than the 29 per cent. at which they have been recently running, it would have a very significant effect on the rate of inflation, as it borne out by the report of the Price Commission published this week. We shall also be assisted this year, in any case, by the fall in commodity prices.
    Mr. Tom Ellis: Does my right hon. Friend believe that, for all its weaknesses, the social contract still offers us the greatest hope for further progress in containing inflation? Is it not now appropriate for him to bring forth some proposals for widening the base of the social contract, for strengthening it, for making it more precise and for making it into a form of tripartite agreement?
    Mr. Healey: My hon. Friend has posed several questions. It emerged very clearly from the Budget debate that nobody in the House has an alternative to the approach of the social contract as a means of dealing with inflation. On the question whether the social contract should be extended, I believe that there is a very strong case for considering whether, before the next wage round, some means should be sought of ensuring that the guidelines are more rigidly adhered to. Whether or not it would be desirable to include the CBI in talks about this—as I think my hon. Friend suggested—is a matter for consideration.
    Mr. Pardoe: Will the right hon. Gentleman realise that both sides of the House hope that his forecasts of the deceleration in inflation will come about? How does he expect wage inflation to be reduced in the coming 12 months, especially bearing in mind that in the area over which the Government have the most
    direct influence—their own civil servants; both those on top salaries and the 500,000 at medium levels—they have given in to a scandalous increase?
    Mr. Healey: Before the hon. Gentleman blows his top, he should he aware that in the case of the civil servants and of the higher salaries the settlements were governed by the judgment of independent review bodies, which any Government tamper with at their peril. Nevertheless, the Government did phase the increases at the higher levels of the top salaried bodies.
    Sir G. Howe: In so far as the Chancellor is founding his approach to wage settlements on the social contract, I should like to follow up the point raised by his hon. Friend the Member for Wrexham (Mr. Ellis) about the need to make it more precise, because there is a danger that it may be misleading people into pressing for higher pay settlements now. I ask the Chancellor to clarify

    701
    whether his statement in the Budget speech, that settlements under the social contract should compensate only for rises in the cost of living, should be applied after or before account has been taken of increases in indirect taxation and increases in direct taxation, because it is clear that many trade unionists—
    Mr. Speaker: Order. This is not debating time.
    Mr. Healey: I am grateful for your protection,
    Mr. Speaker. I am fascinated to hear that the right hon. and learned Gentleman is at last beginning to think this problem through, but he should be aware that the social contract is an agreement between the Labour Government and the trade union movement. The wage guidelines are laid down independently by the TUC as its part of the social contract and provide for certain exceptions to the rule. I made it clear in a speech last week that if unions seek to recover the tax increases that I have been compelled to impose—due to past inflation and past settlements in excess of the norm—by even more excessive settlements, the only alternative I would have to tax increases on a further occasion would be cuts in public expenditure, which would be damaging to all the interests which we and the unions have at heart.

    Tax Allowance (Householders)
    Mr. Ashleyasked the Chancellor of the Exchequer what representations he has had that all householders, regardless of their marital status, should receive a personal tax allowance equal to that now received by a married man.
    The Minister of State, Treasury (Mr. Robert Sheldon): My hon. Friend recently wrote to my right hon. Friend on this subject and I have also noted the motion on the Order Paper to which other hon. Members have attached their names. The increase in the additional personal allowance proposed in my right hon. Friend's Budget effectively meets his suggestion for single-parent families with children.
    Mr. Ashley: I warmly welcome my right hon. Friend's assistance for single-parent families, but is my hon. Friend aware that it is unjust that widows and single women with household responsibilities should receive less than half of the
    702
    help that a working married couple receive? Will my hon. Friend give an undertaking to end this anomaly as soon as possible?
    Mr. Sheldon: A number of representations have been made to my right hon. Friend about a householder allowance. This idea is among others that are being considered. But the married allowance is not related to the cost of running a home. It is, rather, an allowance for two people instead of one.

    Social Contract
    Mr. Laneasked the Chancellor of the Exchequer when he next expects to discuss inflation and the social contract with the Trades Union Congress.
    Mr. Healey: I have frequent meetings with representatives of the TUC at which inflation and the social contract are among the subjects for discussion.
    Mr. Lane: Should not the right hon. Gentleman have marked May Day by starting a renegotiation of the social contract on a broader, tougher and more realistic basis? Does he agree that, as my hon. Friend the Member for Kingston-upon-Thames (Mr. Lamont) urged, for the time being the majority of us, whether we are organised or un-organised workers, must accept salary and wage increases below the rise in the cost of living if the lower-paid and other disadvantaged groups are to be protected against inflation and if the rate of inflation is to be brought down?
    Mr. Healey: I made it clear that I believe that it is necessary to discuss how the guidelines can be more strictly adhered to. There may be a case for reconsidering some elements in the guidelines, but I do not think that it would be sensible to seek to change the guidelines towards the end of an existing wage round. That would rightly be regarded as extremely unfair to those who have not yet had a chance to make their settlements.
    Mr. Ron Thomas: When he talks to the TUC, will my right hon. Friend discuss the clear indication that his Budget proposals were an attempt to solve inflation by creating more unemployment? Will he discuss with the TUC what is likely to happen in the whole consumer

    703
    durable industry, where unit costs will go up and overseas competitors, who already have a large chunk of the British market, will capture an even larger chunk?
    Mr. Healey: I had the opportunity of discussing my Budget with the TUC at a meeting the Monday after I made my Budget speech, and I was reassured to discover that all members of the TUC present agreed that the social contract remained the only basis of a policy against inflation. Moreover, many members of the TUC have pointed out, as I have, that wage settlements in excess of the guidelines voluntarily laid down by the TUC were certain to lead to an increase in unemployment, and to paralyse the Government's policy to deal with such an increase by reflationary measures, such as were taken, for example, in Germany, where the average level of wage increases has been under 10 per cent. over the past 12 months. I hope that I can count on my hon. Friend's support in seeking to persuade all members of trade unions engaged in negotiations to observe these voluntary guidelines.
    On the completely separate question of consumer durables, my judgment is that the foreign competitors who have been putting up heavy competition with British industry in many consumer durables will find the increase in tax on some of those durables a much more serious obstacle than the British industries will.
    Mr. David Howell: We think that when the right hon. Gentleman said last week that he would have to rely primarily on cuts in public expenditure to combat excessive wage claims he was on the road to realism. Is this the approach he will use, if his colleagues allow him in dealing with, say, the railwaymen?
    Mr. Healey: I wish that the hon. Gentleman had read what I said rather more carefully. I said that I should be compelled to rely primarily on reductions in public expenditure if groups of workers attempted to recoup the tax increases made necessary by excessive settlements in the past by even more excessive settlements in the future. I hope that he was not assuming that they would do so, or encouraging them to do so.
    On the question of cuts in public expenditure, I should find the attitude of
    704
    the Opposition Front Bench a good deal more intelligible, and even sympathetic, if they were able to give any indication where they would make the cuts, and which elements in the £3,000 million annual increase in public expenditure, on which they fought find lost the last election, they would choose for priorities.

    Savings
    Mr. Neubertasked the Chancellor of the Exchequer what measures he proposes for the encouragement of greater personal savings.
    Mr. Robert Sheldon: Personal savings have been at a high level in recent months and the facilities offered by the Government are kept under close review.
    Mr. Neubert: Was it not remarkable that the Chancellor made no reference to personal savings in his Budget Statement? Is it because Ministers are afraid to acknowledge that inflation is running well in excess of 20 per cent? Any conventional savings scheme is likely to be a monumental fraud on the saving public who are suffering arbitrary confiscation of their assets to the tune of millions of pounds a day.
    Mr. Sheldon: The figures over the past four years speak for themselves. Over the past year the level of personal savings has been the highest since 1970. This compares with the decline in 1971, 1972 and 1973. The new savings schemes have been very well received, as the figures conclusively show.
    Mr. Donald Stewart: Does the Minister accept that all national savings certificates with the present derisory rate of interest should bear the words "This document carries a Government financial risk warning"? Does the hon. Gentleman accept that if he wants to increase national savings he must raise the rate of interest?
    Mr. Sheldon: The hon. Gentleman must be aware that the returns from national savings are fully competitive with those available in the private sector. The fact that in the first quarter of 1975 we have had a net inflow into national savings of £191 million, compared with £25 million in the same period last year, is evidence of the attraction they still offer to those of limited means.
    Mr. Hurdasked the Chancellor of the Exchequer whether he will address later this month the annual conference of the national savings movement.
    Mr. Robert Sheldon: I regret that other commitments will prevent my right hon. Friend attending, but my right hon. Friend the Paymaster-General has accepted an invitation to address the annual assembly on 9th May in his place.
    Mr. Hurd: Before that conference next week, will Treasury Ministers reconsider the decision to abolish the savings stamp? The Chancellor of the Exchequer is in a genial mood today. Will he look a little beyond the arguments of the bigwigs and the officials in his Department and ask himself whether, at a time of savage inflation, he really should abolish the traditional means by which thousands of individual citizens have learned to put something by?
    Mr. Sheldon: If I may respond with a genial explanation, unfortunately over the past 20 years there has been a steady fall in the number of selling groups in villages and town streets. It has not been possible to find the recruits which would be necessary if sales of savings stamps were to continue, quite apart from the factors of cost, the failure to earn interest and the other problems associated with stamps. There are real difficulties which the national savings movement itself has not so far been able to overcome.
    Sir J. Langford-Holt: Does the hon. Gentleman agree that profitability has something to do with the falling off in national savings? Comparing the interest received with the fall in the value of money, in real terms is there a net loss or a profit?
    Mr. Sheldon: I assume that the hon. Gentleman is talking about national savings generally. Although, obviously, in times of inflation it is very difficult to get real rates of interest, the hon. Gentleman must remember that this applies to the private sector, too. Those who put their money into the private sector in the past year in a number of cases have done remarkably badly. For the ordinary small saver, national savings have provided ready access, ease of withdrawal, and security. In addition, due to the introduction of the new index-linked forms of security, we have an extension into an
    706
    area which I am sure the hon. Gentleman will welcome.

    Fringe Benefits (Business Executives)
    Mr. Gwilym Robertsasked the Chancellor of the Exchequer what calculation he has made of the value of fringe benefits offered to business executives, and the amount which could be recovered in taxation by making the value of such benefits liable to taxation as income; and if he will make a statement.
    Mr. Robert Sheldon: The term "fringe benefits" covers a wide range of facilities and the information available does not enable reliable calculation of their overall value to be made.
    Fringe benefits are already taxable when received by business employees earning £5,000 or more a year, or by company directors. But as my right hon. Friend said in his Budget Statement—reported at col. 317 of Hansard of 15th April—it will be his intention in the future to take further action on fringe benefits.
    Mr. Roberts: Does my hon. Friend accept that the few steps taken on this matter in the Budget are widely welcomed on the Government side of the House? I am sure that he will agree, however, they can only be an opening gambit. If he has studied certain reports, he will have seen that these fringe benefits are tending to increase in amount, and can include not only such items as cars and houses but even servants, and God knows what else these days. Does he agree that if the social contract is to have any meaning, and if—
    Mr. Speaker: Order. This is not the time for making speeches. It is for asking questions.
    Mr. Roberts: Does my hon. Friend agree that if it is not to cause shop floor disillusionment, action needs to be taken against these back-handed payments?
    Mr. Sheldon: What my hon. Friend says is largely correct. My right hon. Friend the Chancellor will be taking action next year. The whole matter is under investigation.
    Sir Frederic Bennett: If there is to be a review of the matter, will the Minister concerned also undertake to examine fringe benefits which are not confined

    707
    to business executives, such as concessionary coal and the use of cars for people other than business executives—people in trade unions?
    Mr. Sheldon: The hon. Gentleman will be aware that miners have been treated as a special case for the past 30 years. If the Conservatives did not like it, they had plenty of opportunity to change it. When they investigated the matter they saw the reasons. As I said, the whole area is under investigation, and we shall be putting forward proposals in due course.

    Textile Industry
    Mr. Hoyleasked the Chancellor of the Exchequer what effect he estimates his Budget proposals will have on employment prospects in the textile industry.
    The Chief Secretary to the Treasury (Mr. Joel Barnett): The Budget proposals are unlikely to have much effect on employment prospects in the textile industry.
    Mr. Hoyle: Does my right hon. Friend agree that any unemployment in the textile industry will be a disaster, especially in view of the short-time working which is already occurring? In the North-West over 50,000 out of 80,000 workers are on short-time working. Does he also agree that what is needed for a viable textile industry is a substantial cut in foreign textiles imports?
    Mr. Barnett: I share my hon. Friend's concern about the situation in the textile industry. However, the latter part of his question should be directed to the Secretary of State for Trade.
    Mr. Fletcher-Cooke: Is the Minister aware that the fact that the Budget has had no effect on employment prospects means that those prospects have become much worse, and that two weaving mills in my constituency closed the day before yesterday? Will he, together with his right hon. Friend, consider the possibility of including some help for the textile industry in amendments to the Finance Bill, which will be coming forward soon?
    Mr. Barnett: The hon. Gentleman will be aware that the closures to which he referred, and which I greatly regret, have nothing to do with the Budget. I cannot agree to the proposal he put to the House.
    Mr. Noble: Does my right hon. Friend accept that, in relation to the economic strategy of the Government, it was not what was in the Budget which dismayed the textile workers but what was left out of the Budget? If we do not introduce import controls no textile industry in Lancashire will be left. Will the Chief Secretary press upon the Prime Minister and his associates the need for urgent action in this area?
    Mr. Barnett: I assure my hon. Friend that the Prime Minister and all other Ministers are very much aware of the serious situation in the textile industry. I promise him that his question will be brought to their attention again.
    Mr. Winterton: Controlling the British Treasury as he does, will the Chief Secretary urge his right hon. Friend to direct some of the funds which he is prepared to channel into highly inefficient, overstaffed and badly-manned companies to better use in the textile industry, which is highly efficient and highly progressive?
    Mr. Barnett: I am not sure that many hon. Members on either side of the House would agree with that; neither do I.

    European Community Membership
    Mr. Blakerasked the Chancellor of the Exchequer what steps he has taken to inform the British public of the economic and financial consequences of withdrawal from the EEC.
    Mr. Brittanasked the Chancellor of the Exchequer what steps he has taken to ensure that the British public is kept fully informed of the economic and financial consequences of withdrawal from the EEC.
    Mr. Healey: The wider consequences of withdrawal, including the economic effects, were set out in the White Paper "Membership of the European Community Report on Renegotiations" (Cmnd 6003). The Government have also published a popular version of the White Paper.
    Mr. Blaker: Will the Chancellor confirm that in the next few weeks he will be giving maximum publicity to the relevant part of the Government's White Paper, which says that there could be a significant effect on confidence, affecting

    709
    also our ability to finance our balance of payments deficit and investment in this country, and, furthermore, that there could be an adverse effect on employment and the rate of inflation?
    Mr. Healey: Yes, Sir. I have been doing so for many weeks. But the House must understand—whether hon. Members support or oppose Britain's remaining in the Community—that the solution of our economic problems will rest overwhelmingly with what we do in Britain, whether we are in the Community or not. There is no question but that our opportunities to improve our economy have been greatly affected in recent years by major uncertainties about both national and international developments. A decision to leave the Community would add a new dimension of uncertainty to those that already exist—a dimension which might be very protracted in time and which would be certain to damage the readiness of business men to invest and the ability of the Government to borrow abroad. For that reason such a decision would be liable, as the White Paper says, to increase both unemployment and inflation.
    Mr. Torney: Does the Chancellor agree that the largest proportion of our non-oil balance of payments deficit is with the Common Market countries and that there has been a tremendous increase in that deficit since we entered the EEC? Does it not therefore follow that if we leave the Market we shall be better off in that respect?
    Mr. Healey: No, Sir, unfortunately, it does not.
    Mr. Brittan: Will the Chancellor assure the House that he will be at the forefront of the campaign in the country for a "Yes" vote and not just sit on the sidelines? Will he also seek to persuade the Prime Minister to be an active campaigner in this matter rather than a lukewarm supporter of his own policy?
    Mr. Healey: I must say that that remark comes rather oddly from a member of the Conservative Party, since we are told in today's newspapers that over half of the constituency Conservative associations have refused to participate in the campaign supported by the Opposition Front Bench.
    Mr. William Hamilton: Will my right hon. Friend issue a statement disabusing the public of the misrepresentations of the trade figures, especially the deficit, given repeatedly inside and outside the House by the Secretary of State for Trade? Will my right hon. Friend make it abundantly clear that if we leave the EEC the balance of payments problem is likely to become worse rather than better?
    Mr. Healey: To adopt some words of Mr. Lytton Strachey, my hon. Friend must not seek to interpose his body between my right hon. Friend and myself.
    There is no question but that our balance of payments with the Common Market has deteriorated over the past three years, though there are great differences of judgment on the question whether the causes of that deterioration were the effects of entry into the Common Market. This is an important point. The chance to make British Leyland a viable concern depends critically on increasing its share of the European market for automobiles by 25 per cent.—or from 3 per cent. to 4 per cent. of the whole. The opportunity of doing so would be enormously reduced were we to leave the Common Market.
    Mr. Marten: I do not wish to comment on the most bracing bit of Socialist propaganda, namely the popular version of the White Paper which is supported by so many people, but does the Chancellor agree that many of the forecasts made in the 1971 White Paper have turned out to be untrue? Therefore, why should anyone in this country take any heed of the warnings given about the effect of coming out of the EEC?
    Mr. Healey: I recall, having been a member of the Labour Government at the time when their White Paper was published, that that White Paper made it clear that there were enormous uncertainties about the effects of entry. Indeed, it is worth reminding the House that 50 economists signed a letter to The Times saying that the consequences would be advantageous. That letter was accompanied by another, signed by 50 different economists, saying that the consequences would be disadvantageous. In some cases the consequences have been less damaging than expected, and more helpful than

    711
    expected. That is especially true with regard to the budgetary contribution. In other cases it has gone the other way.
    Sir G. Howe: Will the Chancellor now take advantage of the invitation extended to him by my hon. Friend the Member for Cleveland and Whitby (Mr. Brittan) by confirming today his own agreement with the view of the Government that we shall be in a much stronger position to face the future if we stay inside the Market than if we try to go it alone?
    Mr. Healey: Yes, I have done that. I reciprocate the right hon. Gentleman's invitation by suggesting that he should have a private word with the new Leader of the Conservative Party and try to persuade her to behave on all occasions as she did on one occasion in the House. I gather from this morning's newspapers that during her visit to the Assembly yesterday she was extremely evasive when asked questions about her attitude towards the future development of the Common Market.

    Tax Assessments (Married Women)
    Mr. McCrindleasked the Chancellor of the Exchequer what representations he has received from married women on the subject of separate tax assessment.
    Mr. Robert Sheldon: Treasury Ministers receive various inquiries and representations about the separate assessment procedures, but I am not aware of any general difficulty in this area.
    Mr. McCrindle: Would not it be better to make a married woman responsible for completing her own tax return, rather than placing that responsibility on her husband, as is the case at the moment, thereby ensuring that the husband must know his wife's income without a similar right in the opposite direction? Would not that also mean that the woman would become responsible for any false statement on the return, and for paying tax from her own resources, whereas, at the moment, that again is the husband's responsibility? Is the present practice not out of tune with the equality of the sexes movement in 1975?
    Mr. Sheldon: Obviously there is a move in this direction. The hon. Gentleman will be aware of the current rules for separate assessment which can be claimed
    712
    by either the husband or the wife. There is likely to be an increase in this area of assessment, and this is a matter with which the Inland Revenue is prepared to deal.
    Mrs. Hayman: Is my hon. Friend aware that the workings of the Inland Revenue often are deeply offensive to women, in terms of their taxation position, and that May Day in International Women's Year would be an appropriate time for the Treasury to undertake to look into this matter? Will my hon. Friend make sure that the Government put their own house in order before the passing of the Sex Discrimination Bill makes them do it?
    Mr. Sheldon: My hon. Friend will be aware that there has been an investigation into these areas— an investigation which I have been conducting. The procedure for separate assessment, which perhaps is not generally understood, meets a number of her criticisms.

    European Community (Finance Ministers)
    Mr. Shepherdasked the Chancellor of the Exchequer when he next expects to meet the Finance Ministers of the European Community.
    Lord James Douglas-Hamiltonasked the Chancellor of the Exchequer when he next expects to meet the Finance Ministers of the European Community.
    Mr. Healey: I would refer the hon. Members to my right hon. Friend the Paymaster-General's reply to the hon. Member for Beeston (Mr. Lester) on 23rd April—[Vol. 890, c. 323.]
    Mr. Shepherd: Does the right hon. Gentleman agree that Britain will be better able to ride out the international economic storm if it works for closer co-operation with other members of the Community?
    Mr. Healey: Yes, I agree, and I hope that the hon. Gentleman will agree that I proved this when I helped organise co-operation among the European members of the International Monetary Fund to achieve the launching of the IMF oil facility in January this year.
    Mr. Ashton: Is my right hon. Friend aware that practically the only time that

    713
    we had a balance of payments surplus was in 1969, when we had a Labour Government and were not in the Common Market? Is he aware, further, that whereas imports of foreign cars used to be one in 10, they are now one in three, and that our car industry would be a great deal better off if we kept out these imports and left the Common Market altogether?
    Mr. Healey: No doubt we would produce more for the home market if we had no foreign trade whatever.
    Lord James Douglas-Hamilton: Will the right hon. Gentleman ensure that his views about the EEC are imparted to the Scottish TUC and to trade unionists in Scotland?
    Mr. Healey: Certainly I shall.
    Mr. David Howell: Reverting to the subject of imports of foreign cars, the right hon. Gentleman will have seen reports that Britain may be reluctant to sign the OECD trade pledge to avoid import controls. May we have an assurance that there is no reluctance in this matter?
    Mr. Healey: The hon. Gentleman will know that it is most unusual for Ministers to comment on newspaper reports. I can assure him that the Government propose to sign the pledge—a decision which may come a little easier after my last Budget. But we are anxious also to see the OECD recognise the responsibility of countries with strong balance of payments positions to maintain an adequate volume of world trade by reflating their economies. The responsibility lying on countries in surplus must be borne in mind just as much as that lying on the rest of the Community.

    Aircraft Industry
    Mr. Brothertonasked the Chancellor of the Exchequer what taxation relief he plans to give the aircraft industry to help exports.
    Mr. Joel Barnett: None, Sir.
    Mr. Brotherton: Does the right hon. Gentleman agree that significant help to the aviation industry and to our balance of payments problems could be made if the Minister of Defence were to order the maritime version of the Harrier?
    Mr. Barnett: No, Sir.
    Mr. Ian Lloyd: Surely what the aircraft industry needs is not relief from taxation but relief from the inane policies of a Government who seek to poleaxe the industry and then complain when the corpse fails to grin.
    Mr. Barnett: If I have understood that question, the answer is "No".

    Budget Proposals
    Mr. Michael Lathamasked the Chancellor of the Exchequer what progress is being made in fulfilling the objectives of his latest Budget; and whether he intends to take further corrective action in the next six months.
    Mr. Healey: It would be unreasonable to expect to see evidence of progress at so early a stage.
    I have no plans for further measures, but I shall of course be ready to act if the situation requires it.
    Mr. Latham: In view of recent Civil Service revelations about the budgeting or otherwise of the British Leyland bailout, does the right hon. Gentleman expect to announce compensatory cuts in public expenditure in the next six months?
    Mr. Healey: The hon. Gentleman should know—if he does not, his right hon. and hon. Friends will confirm it—that rescue operations are always a claim on the Contingency Fund for public expenditure, rather than identified in advance. But when the Financial Statement and Budget Report is published, at the time of the Budget, it tries to make allowances for contingencies then foreseeable. Allowance was made for some aid to British Leyland in that so-called Red Book published at the time of the Budget, but at that time the Cabinet had not taken a decision on the precise way in which to respond to the proposals in the Ryder Report. However, my right hon. Friend the Secretary of State for Industry will be informing the House separately in the near future about legislation for the provision of up to £60 million for buying shares in British Leyland and of up to £200 million for the new equity issue.
    Mr. Wrigglesworth: Is my right hon. Friend satisfied with the means of monitoring the effects of his Budget?
    Mr. Healey: Satisfied, no. Successive Governments have found it difficult to monitor public expenditure, particularly in local government, which rose by over 8 per cent. a year during the three years that the Conservative Party was in power. We are seeking to remedy that situation, notably by the establishment of the consultative committee which I announced in my Budget speech.
    Mr. Biffen: Is not the continuing unprecedented weakness of sterling the clearest possible storm signal that a Budget deficit of over £9 billion is causing widespread anxiety? Would the right hon. Gentleman care to have a bet with me that he will be back here cutting public expenditure as soon after the referendum as is decently possible?
    Mr. Healey: I have only once taken a bet in this House, and I am glad to say that I won it. I do not propose to take any bets on this occasion.
    I should like to respond to the hon. Gentleman's point about sterling. There has been a good deal of irresponsible comment on this matter recently. I should like to emphasise now that I do not want to see a further depreciation of sterling. As I indicated in my Budget speech, a continuing downward drift in our exchange rate would further increase pressure on both domestic costs and prices. Unless and until we bring down the rate of inflation in the United Kingdom to that of our main trading partners, there will obviously continue to be a risk of strongly adverse market pressure on the rate. I do not believe that the size of the public sector borrowing requirement was behind the recent pressure on sterling. It was more the inflation rate in Britain compared with other countries.
    Mr. Batesasked the Chancellor of the Exchequer whether he is satisfied with the reaction to his recent Budget Statement.
    Mr. Henley: Yes, Sir.
    Mr. Bates: I am grateful. Is my right hon. Friend aware that many of us are deeply concerned at the prospect of a further increase in unemployment? Is he aware that in recent months in Bebington and Ellesmere Port, for example, over 4,000 jobs have been lost, affecting a very wide travel-to-work area?
    716
    Will he assure us that he will keep this matter actively before him and take action whenever it is necessary to prevent further rises in unemployment?
    Mr. Healey: I took action twice last year to ensure that demand was increased to what I regarded as a reasonable level in Britain. As a result, there will be £1,000 million more demand in the economy in the current financial year. But, as I warned the House and the country on many occasions, wage increases vastly in excess of the guidelines voluntarily laid down by the TUC were bound to increase unemployment and limit the Government's ability to deal with unemployment when it occurred. I hope that I shall have the support of my hon. Friend in pointing out to the minority of workers who have been settling well outside the contract that they are putting other people and possibly themselves out of work by doing so, and making it very difficult for the Government to take the kind of action which Governments in other countries with much lower rates of inflation—for example. Germany and the United States—are now able to take.
    Sir G. Howe: Will the right hon. Gentleman follow that by taking this opportunity of driving the message home to those employed in the railway industry that no extra Exchequer funds will be made available to finance inflationary settlements and that the only consequences will be either higher fares or a substantial loss of jobs, including, perhaps, the withdrawal of certain services?
    Mr. Healey: It would not be right for me to comment on the details of that negotiation since it is now under arbitration. I told the House at Question Time a month ago that I had no intention of allowing or compelling the taxpayer to pay for excessive wage settlements in the public sector.

    Incomes (Retired Persons)
    Mr. Michael Marshallasked the Chancellor of the Exchequer what representations he has received in the last 12 months from retired persons regarding their decline in net disposable income.
    Mr. Robert Sheldon: My right hon. Friend has received a number of representations from retired persons concerning budgetary matters in general I

    717
    myself received a deputation from the National Federation of Old-Age Pensions Associations.
    Mr. Marshall: Is the hon. Gentleman aware that there are literally millions of people whose main net worth is tied up in their homes and who are in a very poor liquid cash situation? In these circumstances, which will be reflected in the lives of many hon. Members on both sides of the House at some future date, will the Minister think again about the whole question of the investment income surcharge?
    Mr. Sheldon: The hon. Gentleman will know from the statement made by my right hon. Friend the Chancellor of the Exchequer that the problem of inflation affects every person in this country. Our main energy must be in that particular direction.
    Concerning old-age pensioners in general, the point made to me during conversations that I had with them was that they very much appreciated the uprating of the pension—the largest ever—and the continuing commitment to uprate later this year.

    SOCIAL CONTRACT
    Mr. Dykesasked the Prime Minister what plans he has to meet the TUC to discuss the working of the social contract.
    Mr. Michael Lathamasked the Prime Minister whether he has now fixed a date for a further meeting with the TUC.
    The Lord President of the Council and Leader of the House of Commons (Mr. Edward Short): I have been asked to reply.
    I refer the hon. Members to the reply which my right hon. Friend gave to my hon. Friend the Member for Fife, Central (Mr. Hamilton) on 24th April.
    Mr. Dykes: In view of what the Chancellor has just said, what maximum rate of wage increases does the right hon. Gentleman think the economy can bear over the 12 months between this May Day and the next May Day?
    Mr. Short: Broadly speaking, wage increases now must not exceed increases
    718
    in prices. If we succeed in that, we shall get out of our difficulties. If not, we shall be in greater difficulties. I have made that clear over and over again, as has the TUC in its recent economic survey.
    Mr. Latham: When will the TUC be given specific details of the extra unemployment which will arise from next year's public expenditure cuts in the Budget?
    Mr. Short: My colleagues and I, including the Prime Minister and the Chancellor of the Exchequer, had some very fruitful discussions with the TUC recently and we discussed the effect of the Budget.
    Mr. Ioan Evans: Does my right hon. Friend agree that the TUC is doing its utmost to see that the social contract is working? Has he yet received any representations from the Opposition about their attitude to the social contract? Do they agree with it? If not, may we understand where they stand?
    Mr. Short: On the first point, I certainly agree. I think that we should bear in mind that we have had a year's transitional period from a statutory incomes policy which virtually brought the country to its knees. We always recognised that the transitional period would be extremely difficult. We have recognised that all along. But, equally, we should recognise that from now on price increases in this country, which are our own responsibility, will be due almost entirely to labour costs.
    Mr. Prior: The right hon. Gentleman said that the social contract dictates that increases in pay should not exceed increases in prices. Does he take into account the increase in taxation? If so, that presumably means that if the social contract is kept there will be a reduction in the real standard of living next year. Is that the position of Her Majesty's Government?
    Mr. Short: It is exactly the position. The Chancellor made it abundantly clear ant said it in terms in his Budget speech. We have made it clear in our discussions with the TUC that if wage increases are to be claimed for increases due to the Budget—
    Mr. Prior: Taxation increases.
    Mr. Short: Of course taxation increases. The right hon. Gentleman was not listening to my reply to the last supplementary question. Certainly that is the case. If wage claims are to be made for those increases, we shall not get out of our difficulties this year.
    Mr. Tom Ellis: Will my right hon. Friend initiate an appraisal of the working of the social contract with a view to clarifying and strengthening its proposals, making it more precise and broadening its base, and particularly to making it a tripartite form of agreement? Will he also set up an authoritative monitoring body to which people can turn to see the relativities of prices, costs, wages, and so on?
    Mr. Short: On the last point, if we do what my hon. Friend suggested we shall come very near to a statutory policy again, and we have no intention of returning to a statutory policy.
    On the first point, the need is not to change the TUC guidelines, but to secure wider adherence to them. The TUC is doing all in its power, as are individual unions, to ensure that that is done.
    Mr. Tapsell: Do the right hon. Gentleman and the Government not yet understand that the key to the conquest of inflation is not the relationship of rising wages to rising prices, but the relationship of rising wages to rising production and productivity?
    Mr. Short: That is an extremely important factor in the whole thing. We have said that over and over again. All I am saying—and the recent report of the Price Commission confirms this—is that now that the oil price increases have worked through—at any rate, the last one will do so in the near future—inflation in this country will be our own affair. We refuse to believe that this nation cannot face that fact and face the responsibility of dealing with it without returning to an arid statutory policy. This nation can do that, and it must.

    READING
    Mr. Hoyleasked the Prime Minister whether he has any plans to visit Reading.
    Mr. Edward Short: I have been asked to reply.
    My right hon. Friend has at present no plans to do so, Sir.
    Mr. Hoyle: If my right hon. Friend does visit Reading I hope that he will seize the opportunity to visit the Intervention Board for Agricultural Produce and see it at work. If he does, I hope that he will review his advice to the British people in the light of the disagreeable aspect of the CAP in buying products to put into store or turn into animal feeding stuffs. I hope that my right hon. Friend will review his advice to the British people that their future lies in the Common Market.
    Mr. Short: I think that in his report to Parliament on the renegotiations my right hon. Friend was forthcoming about this matter. He said that we had not secured the radical reform of the CAP that we wanted, but we believe that we shall do that, and we have support in Europe for it. But while we have not done that, we have secured a good many of our objectives in that field.
    Mr. Ian Lloyd: Instead of the Prime Minister's accepting these innumerable invitations, is it not time for him to extend one to the leaders of the TUC to come to the Bar of the House and explain to the House and the country what their policies are and what they are doing?
    Mr. Short: I think that both the TUC and the CBI take every opportunity to do that.

    EUROPEAN COMMUNITY MEMBERSHIP (MINISTER'S SPEECH)
    Mr. Stanleyasked the Prime Minister whether the public speech of the Secretary of State for Industry on the EEC industrial policy, made in Glasgow on 13th April, represented the policy of Her Majesty's Government.
    Mr. Blakerasked the Prime Minister if the public speech of the Secretary of State for Industry, made at Glasgow on 13th April, concerning the effect of membership of the EEC on the working of his Department, represents Government policy.
    Mr. Edward Short: I have been asked to reply.
    I refer the hon. Members to the reply which my right hon. Friend gave to my hon. Friend the Member for Hemsworth (Mr. Woodall) on 17th April.
    Mr. Stanley: Was it not extremely inconsistent of the Secretary of State for Industry in that speech to accuse the EEC of interfering in our steel industry when he has been engaging in the most blatant obstruction of Sir Monty Finneston's attempt to establish a viable steel industry in this country?
    Mr. Short: Leaving aside the last part of the hon. Gentleman's question—
    Mr. Stanley: Why?
    Mr. Short: Because the main issue arises on the first part of it. The Question refers to the speech of my right hon. Friend the Secretary of State for Industry. The Government have no responsibility for speeches made on this matter by dissenting Ministers. That is what the right to dissent means. Ministers can put their point of view in the country, and if they do that the Government do not have to answer for those speeches here.
    Mr. Blaker: Is the right hon. Gentleman aware that in that speech the Secretary of State for Industry asked four questions about our control over North Sea oil and gas? Is he also aware that the answers to those four questions are well known, as they were given to the House on 23rd April by the Department of Energy, and they do not support the point of view of the Secretary of State for Industry on the EEC? Is it not time, therefore, that the right hon. Gentleman was relieved of his post on the grounds of both ignorance and incompetence, in having kicked through his own goal?
    Mr. Short: No, Sir. The Secretary of State for Industry is one of the most gifted and able Ministers in the Cabinet. He has claimed the right to dissent, and the right to dissent means no more and no less than the right to put a contrary point of view in the country.
    With regard to the speech itself, I was not aware of what was said because I found great difficulty in getting a copy of it.
    Mr. Ron Thomas: It is difficult—or it will be—for the British people to make up their minds about the effect upon industry of membership of the EEC, bearing in mind that the Government themselves took a Commission document and distorted it when they reproduced it in their White Paper.
    Mr. Short: I do not agree with that. The White Paper and the abbreviated form which has been made public give a balanced view of the case for the Government's recommendation.
    I heard the hon. Gentleman's comment on the radio this morning. He referred to it as a jazzy document. It is a bright and up-to-date document which gives a balanced view of the argument for staying in Europe.
    Mr. Peyton: In view of the non-responsibility of the Government for speeches made by dissenting Ministers, will the right hon. Gentleman say whether he is aware that the House would be grateful for his straightforward explanation of the ludicrous situation into which the Government have got themselves?
    Mr. Short: It is not a ludicrous situation at all, but an extremely honest one. It is much better than the spectacle of a lot of former Ministers, now on the Opposition Front Bench, going back on policies which they have supported for the last few years.
    Mr. Pardoe: Will the right hon. Gentleman say whether the statement in that speech, when the Secretary of State for Industry urged Britain's unfettered right over its own major commodity—North Sea oil—is Government policy? Does he see any contradiction between that view and the view expressed by the Prime Minister today, when he urged the world to surrender its rights over nations' commodities and get together to work for commodity stabilisation?
    Mr. Short: There is no conflict at all. The Prime Minister's statement is being made public this afternoon. I shall answer a Written Question about it today.

    CHESLYN HAY
    Mr. Cormackasked the Prime Minister whether he will pay an official visit to Cheslyn Hay.
    Mr. Edward short: I have been asked to reply.
    My right hon. Friend has at present no plans to do so, Sir.
    Mr. Cormack: Is the right hon. Gentleman aware that that reply will receive a mixed reception in my constituency? Will he, however, arrange for the Prime Minister to explain to my constituents, and others all over the country, exactly where the money is to come from for the British Leyland extravaganza? It would seem from reports in today's Press that there is a degree of conflict here. May we have clarification as soon as possible?
    Mr. Short: I am sorry about that supplementary question, because I had armed myself with a map, in view of the supplementary questions about the Prime Minister's visits over the past few weeks. We are getting all round the country.
    I am afraid that I have forgotten the main point of the hon. Gentleman's question.
    Mr. Cormack: British Leyland.
    Mr. Short: The Prime Minister dealt with the financing of British Leyland in some detail in his statement and in supplementary questions last week. My right hon. Friend the Secretary of State for Industry will be dealing with the financial side of the matter in more detail during the debate on the affirmative resolution, which will be before the Whitsun Recess.
    Mr. Moonmanasked the Prime Minister if he will instigate an attitude survey to ascertain what meaning the social contract has to the electorate at large.
    Mr. Edward Short: I have been asked to reply.
    No, Sir. The electorate's support for the whole range of Government policies included in the social contract was confirmed in two General Elections last year.
    Mr. Moonman: I think that there may be some misunderstanding here. No map is required. Does my right hon. Friend agree that the advantage of a survey would be to show what sort of appreciation there is of this matter among the electorate? The NOP survey showed
    724
    that 75 per cent. of those interviewed had no idea what we are up to on this matter. It might be better for the Government to undertake such a survey.
    Mr. Short: There was an NOP survey on this subject in February. I agree that there is a great need to explain the issue to the public. The Government have a responsibility, and I have always argued that the Opposition have a responsibility, which they do not accept. They have abandoned a statutory policy for incomes but they refuse to tell us their policy now. They have attacked the social contract and tried to knock it ever since the two elections last year. We have a responsibility to explain our policy and the Opposition have a responsibility to explain theirs and not to denigrate what we are doing.
    Mr. Tebbit: As the Government refuse to publish a White Paper on what the social contract means, can the right hon. Gentleman say whether, included in that 75 per cent. of the people who do not know what it means, are most of his right hon. Friends in the Cabinet?
    Mr. Short: There is absolutely no need to publish a White Paper. The social contract is in two documents and I shall be very pleased to send a copy of them to the hon. Member, free of charge and free of VAT, so that he can read them.
    Mr. Blenkinsop: Does my right hon. Friend agree that it is very important to get across to the country the fact that the social contract is meant to apply to the higher-paid professional groups just as much as to everybody else?
    Mr. Short: That is a very important point. I am glad that my hon. Friend made it.
    Mr. Beith: Will the right hon. Gentleman therefore make the same point to the Secretary of State for Social Services, who suggested that the social contract does not apply to those who are not subject to collective bargaining? In the context of the doctors' dispute, she said that the matter should be judged by comparability. Is this not a receipe for leapfrogging inflation?
    Mr. Short: The word "comparability" in this respect is used in a different sense. There are two ways of using

    725
    it. It can be used in pay research procedures—where it is quite specific—or in the generalised sense. The social contract rules it out completely in the generalised sense. In recent years all Governments have accepted the concept of comparability for the Civil Service.
    Sir G. Howe: In view of the right hon. Gentleman's earlier emphasis on the extent to which wage inflation is now causing our general inflation, and in view of his emphasis and that of the Government generally on the social contract as the means of attacking wage inflation, will he please come back to the question posed earlier by my right hon. Friend the Member for Lowestoft (Mr. Prior)? Will he make it plain that wage increases which are meant to take account of the cost of living should not compensate either for increases in direct taxation or for the impact of increases in indirect taxation? Will the right hon. Gentleman make that absolutely plain?
    Mr. Short: Yes, I make that absolutely plain. Let there be no doubt about that fact. My right hon. Friend the Chancellor made this absolutely clear, too. I hope that I have not given the impression that I am not giving a clear answer.

BUSINESS OF THE HOUSE
Mrs. Thatcher: May I ask the Leader of the House whether he will give us the business for next week?
The Lord President of the Council and Leader of the House of Commons (Mr. Edward Short): The business for next week will be as follows:
MONDAY 5TH MAY—Supply [16th Allotted Day]: until about 7 p.m., debate on Employment Problems and Prospects for School Leavers, which will arise on a motion for the Adjournment of the House, and afterwards on Hospital Pay Beds on an Opposition motion.
Consideration of Lords amendments to the Prices Bill.
Proceedings on the Malta Republic Bill [Lords].
TUESDAY 6TH MAY and WEDNESDAY 7TH MAY—Debate on a motion to approve the Statement on the Defence Estimates, 1975 (Command No. 5976).
726
At the end on Wednesday:
Consideration of Lords amendments to the Referendum Bill.
THURSDAY 8TH MAY—Second Reading of the Finance (No. 2) Bill.
Motion on the Shipbuilding Industry (Northern Ireland) Order, 1975.
FRIDAY 9TH MAY—Private Members'Bills.
MONDAY 12TH MAY—Second Reading of the New Towns Bill, which it is hoped to obtain by about 7 p.m.
Motion on the Prevention of Terrorism (Temporary Provisions) Act 1975 (Continuance) Order.
Mrs. Thatcher: May I ask the Leader of the House about the British Leyland order? I think I understood him to say in reply to Questions that this would be debated before Whitsun. Is that so? If it is, may we have a full day for the debate?
Mr. Short: There will certainly also be
a Bill—
Mr. Cormack: A big one!
Mr. Short: No, not a big one. I hope that we shall find it possible to give the Bill a Second Reading on the same day that we consider the affirmative resolution. They are dealing with fundamentally the same matter. Perhaps we can discuss extending the time on this matter and spending a day on it before the Whitsun Recess.
Mr. Urwin: Is my right hon. Friend aware of the deep and growing concern which exists about the declining volume of work being made available to the construction industry? Nowhere is this point more pertinent than in the Northern Region. In these circumstances, will he provide time for a debate on the whole problem of the construction industry, including restructuring, which is vitally important to this significant industry.
Mr. Short: I am aware of the problems and of the concern which my hon. Friend has always shown in this matter. This will be a very appropriate subject to debate in the new Committee for regional affairs, once the House has approved the motion. I hope that we shall debate that very soon.
Mr. Carlisle: May we take it that the ill-starred Bill to require the compulsory wearing of seat belts, which began its Second Reading last November, is now happily dead?
Mr. Short: I am sorry to disappoint the hon. Gentleman. The Bill will have the rest of its Second Reading some time shortly after Whitsuntide.
Mr. Ashley: Does the Leader of the House know that more than 100 Labour Members have signed the motion deploring the £20 million cut in overseas aid? Has he seen that motion, because if so he must know the strong feelings which exist among my hon. Friends on the subject. Will he please arrange for a debate next week?
[That this House, while recognising the serious economic problems confronting Mr. Chancellor of the Exchequer, and welcoming the measures taken to deal with them. nevertheless regards the £ 20 million cut in overseas aid as a regrettable step which it is unable to support and therefore requests him to reconsider this proposal. ]
Mr. Short: I cannot arrange a debate next week, but my right hon. Friend's attention has been drawn to this motion. We regret the cut very much indeed, but we have an enormous spending problem which must be tackled.
Mr. Pardee: Is the Leader of the House aware that the House has still not had a debate on the White Paper on public expenditure? While that White Paper has probably already been rendered wildly out of date, the time is now ripe for an immediate debate on the whole issue of public expenditure before the Government have to take their decisions on cuts on 6th June.
Mr. Short: I am afraid that this White Paper has been overtaken by the Budget. We have had very long debates on the Budget, so I cannot promise another debate in the near future. If the Liberal Party can persuade the Conservatives to give them another Supply Day, this would be an appropriate subject for such an occasion.
Mr. Cormack: In view of the rapidly deteriorating situation in South-East Asia, does the Leader of the House agree that it is high time that we had another debate
728
on foreign affairs so that we may concentrate on this vital area? Will the right hon. Gentleman arrange for that before the recess?
Mr. Short: I have a certain sympathy with the hon. Member in this respect. I fear that we are debating foreign affairs far too infrequently, but I cannot promise any time before the recess, although I shall bear in mind what he said.
Mr. Ioan Evans: Has my right hon. Friend seen Early Day Motion No. 436 regarding the obstruction of the Welsh Development Agency Bill? Although the Bill is now to come before the other place, will my right hon. Friend assure us that it will be on the statute book before the end of this Session? Earlier in the Session he referred to the possibility of the Hare Coursing Bill coming before us. Can he say whether that is likely to happen?
[That this House deplores the action of Conservative Members in preventing the Welsh Development Agency Bill being considered by the Welsh Grand Committee in view of the fact that this action will deny the Agency from spending £ 150 million in Wales to create new employment prospects, more derelict land clearance and to meet the need for the further development of the Celtic Sea oil industry, and calls upon the Conservative Members to end their negative reactionary opposition to this vital measure for Wales.]
Mr. Short: On my hon. Friend's first point, the Opposition prevented this Bill from going to the Welsh Grand Committee as we intended, in the same way as they prevented the equivalent Scottish Bill from going to the Scottish Grand Committee. There has been a tremendous reaction both in Scotland and Wales about their action in this matter. We have now got over that by introducing the Welsh Development Agency (No. 2) Bill, an identical Bill, into the other place. It will, I understand, have its Second Reading next week. On my hon. Friend's second point, the Hare Coursing Bill will be introduced either today or tomorrow.
Mr. Henderson: Has the right hon. Gentleman had an opportunity of reading today's Scotsman in which an interview with him appears at great length? Will

729
he comment on whether this article correctly represents the Government's views on the timetable for devolution? Can he confirm whether a site has been selected and established for the Scottish Assembly, since it appears that many hon. Members feel that unless a site is chosen soon the Government's plans do not hold water?
Mr. Short: I have not yet got round to reading the interview. I am sure it is a very good one because it was written by one of the most experienced members of the Lobby. On the second point, the only firm promise I have given on the timetable is to do my utmost to produce this Bill by the end of this year, and that I still hope to do. On the hon. Gentleman's third point, no site has been selected. No expenditure may be incurred until the Financial Resolution is passed after the Second Reading of the Bill, which I hope will be early next year. The Property Services Agency has been very active in looking at possible sites.
Mr. James Johnson: May I thank the Leader of the House and his Cabinet colleagues for the speedy action which they took on behalf of the aircraft workers following my appeal a week ago today? Now that we have the Bill this Session, will he give an assurance on behalf of the workers in the aircraft and shipbuilding industries that he will use his best efforts in meetings to see that we get an early place in the queue for the parliamentary timetable so that we are not in the middle of the Committee stage in the middle of July or August?
Mr. Short: This Bill has been produced and it is my intention to do my utmost to see that it receives the Royal Assent in the present Session.
Mr. Tebbit: Can the Leader of the House say whether he will give priority to the Hare Coursing Bill or the Bill to nationalise the aerospace industry? We regard both as pathetically irrelevant but would like to know which of the two he regards as being the most pathetically irrelevant.
Mr. Short: I think it is a fine thing that in the midst of considerable pressure in the House we can find half a day in which to bring to an end this appallingly cruel practice. I make no apology for
730
that. We seek to bring to an end this so-called sport which depends upon terror and cruelty to wild animals, who have as much right to live in this world as the hon. Member or myself. In the words of Ralph Hodgson this Bill will,
"ring the bells of Heaven
The wildest peal for years"
Mr. Stanbrook: Has the right hon. Gentleman seen Motion No. 145? Will he give the House an early opportunity of debating this subject, thus providing Members of Parliament with the opportunity of leading the country in a campaign of self-denial?
That this House recognises that the prime source of the country's economic weakness lies in the fact that it is living beyond its means; believes that the remedy for this state of affairs is simple, but impossible while raging inflation drives all economic groups to protect their standard of living by constant pressure for higher money incomes; believes that a lead must be given to the country if this process is to be halted; and therefore declines to consider any proposal to increase parliamentary salaries but invites proposals to reduce such salaries by 10 per cent. from 1st January 1975.
Mr. Short: I will look at what the hon. Member says.
Mr. Beith: Will the right hon. Gentleman think again about his decision to offer only half a day for the motion on the Prevention of Terrorism Bill in view of the fundamental issues of civil liberties which it raises?
Mr. Short: This is an order not a Bill. I had hoped that the Bill could go to the Committee. We could not get a remit for that, so we are doing it in the House.
Mr. Gow: Does the right hon. Gentleman intend to make a statement to the House next week about the premature publication of the document entitled, "Britain's New Deal in Europe"? If he does, will he tell the House whether he thinks that the inclusion of the photograph of the Prime Minister on the inside page is likely to be productive or counter-productive?
Mr. Short: In view of my right hon. Friend's popularity, I think it will help the cause enormously.
Turning to the first matter raised by the hon. Member, I heard the right hon. Member for Penrith and The Border (Mr. Whitelaw) this morning, and I agree with

731
what he said. The leakage of Government printing must cause us great concern. I am looking into this. My office had a telephone message yesterday afternoon to say that a newspaper had this document. I immediately instructed the office to prepare all the documents for release last evening. I very much regretted this necessity. The two campaigning organisations agreed to this action. We had hoped to release the material on a day agreed by the two organisations, but I had no option but to release it last night. We are looking into the way in which the leak occurred. There are a number of lines we can follow. I do not know whether we shall discover anything. There are ways of discovering which one of the 60-odd printers was involved and so on. I regard it as an extremely serious matter that Government printing should leak in this way.
Mr. Peyton: Can the right hon. Gentleman say when we may expect to see the Lords amendments to the Trade Union and Labour Relations (Amendment) Bill? I refer particularly to those dealing with the Press.
Mr. Short: I promised last week to an hon. Member below the Gangway that we would not take these amendments until my right hon. Friend the Secretary of State for Employment had returned from his hospital treatment.
Mr. Michael Latham: Will the right hon. Gentleman look again at the timing for the New Towns Bill—which, as I understand it, has been given only half a day—in view of the Government's decision 12 months ago to ban the sale of houses in new towns—a most regrettable policy? Does he not think that the House needs more time to debate the matter?
Mr. Short: Perhaps it would be desirable to find rather more time for it, but the pressure is so great on our timetable at the moment that I cannot offer more than half a day.
Mr. Winterton: May I press the right hon. Gentleman yet again about the need for a debate on agriculture, particularly as his right hon. Friend the Minister of Agriculture is on the Front Bench beside him and will, I am sure, support me in saying that a debate on
732
this subject, important to consumer and farmer, should be held soon?
Mr. Short: The Opposition have a Supply Day on Monday and once more the party representing the agricultural industry has not chosen to debate agriculture. There cannot be an opportunity to debate the subject before the beginning of the Whitsun Recess, apart from the Adjournment debates on that occasion. Two-thirds of the Adjournment subjects concern agriculture anyway. There will be that limited opportunity.
Mr. Freud: Is the Lord President aware that it is now two months since the Bullock Report was published? Would it not be possible to have a debate on it shortly?
Mr. Short: I thought that the hon. Gentleman was still on the subject of agriculture. I dealt with a question on this subject last week. I agree that this is an important report. I would very much like the House to debate it and I hope that we can do so some time this Session. Earlier today I said that we do not debate foreign affairs sufficiently. I am sure that we do not debate education matters sufficiently either. On the other hand, I think that we debate subjects like defence far too much.

AGRICULTURE (EEC MINISTERS' MEETING)
The Minister of Agriculture, Fisheries and Food (Mr. Fred Peart): With permission, Mr. Speaker, I will report on discussions at the Council of Agriculture Ministers in Brussels on 28th and 29th April.
There was a preliminary but important discusion on the common agricultural policies stocktaking report produced by the Commission. It was generally recognised that the CAP had proved capable of adaptation to meet the needs of the enlarged Community in the difficult and changing conditions of the past two years. The changes in the beef régime are a case in point. But it was also clear that in taking stock of its policy the Community as a whole is concerned to achieve further developments and improvements. The task is both urgent and important, and it must be done thoroughly.
In the course of the discussion I took the opportunity to stress the particular

733
problems of concern to the United Kingdom. I agreed with the Commission on the need to bring prices progressively into line with the needs of efficient farms and the market situation both inside and outside the Community. I also welcomed the Commission's recognition of the need for measures to avoid long-term surpluses and to give consumers the benefit of any unavoidable over-supply. I emphasised that direct aids could help to give flexibility in the operation of the CAP provided that they did not significantly distort competition. Finally, I stressed the need to encourage trade with third countries wherever this could be done without detriment to our own production within the Community—for example, in relation to strong wheat and lamb.
Commissioner Lardinois, in replying to the discussion, agreed that the CAP had become more flexible and could be further adapted to meet the needs of Member States and changing circumstances, given the political will. He pointed out that since enlargement, and primarily on British initiatives, the Community had already made progress in exploring new avenues and finding pragmatic solutions to its problems. It was agreed that detailed studies should be carried forward and that after discussion in the Assembly the Council should devote special attention to this work.
There was also a useful discussion in the Council on fishery problems in which I was supported by my hon. Friend the Under-Secretary of State for Scotland. Agreement was reached on measures designed to improve the state of the market, which has been depressed by heavy stocks of frozen fish and until recently by unduly low-priced imports.
As regards stocks, Community aid is to be provided on a temporary basis for the private storage of frozen fish by producers and traders, so as to reduce the pressure on the market. Details will be announced shortly.
As regards imports of frozen fish, we have now secured for our fishermen a sensible additional measure of protection against unduly low-priced imports. Compared with the voluntary agreement with Norway, these arrangements provide permanent safeguards against low-priced imports from all third countries at prices which are broadly similar to those at
734
present applied by Norway, and which constitute a fair balance between the interests of our producers and consumers. In consequence, effective remedial action can now be taken if import prices of frozen cod, haddock and other species fall below the minimum prices prescribed.
In the course of discussion I took the opportunity to recall the Council's earlier agreement on the need to be ready to adapt the common fisheries policy in response to developments in access to fishing grounds. I stressed particularly the important interest of the United Kingdom as the largest coastal fishery State in the Community. This is to be treated as a matter of urgency.
The Council also discussed measures governing the trade in fresh poultry meat and made some useful progress. It was agreed in principle that the ban on the use of spinchillers should be deferred pending further study from 1st January 1977 to 1st July 1978. Similarly the restriction of the New York dressed poultry trade to farm gate sales should be deferred for a further five years from February 1976 to August 1981. More time should also be allowed for adapting premises until August 1977, and introducing an inspection service, which will be in August 1979. It was also agreed in principle that our environmental health officers in the United Kingdom should be allowed to supervise cutting up and storage operations outside the slaughterhouse.
The Commission announced that national aids to offset the Increased cost of fuel in glasshouses may continue, but at a lower level, until June 1976. I shall need to see how far other member States take advantage of this.
The Commission also announced a proposal to assist structural reform through the demolition of obsolescent glasshouses. This will require detailed examination.
Finally, I am glad to say that the Council agreed to a further step in the relaxation of the restrictions on imports of beef from third countries. Provision has been made for the importation of 50,000 tons of beef between June and September, with the possibility of a further quantity later. I welcome this as a small step in the right direction. Liberalisation is important, but we have to rmember that our own market is

735
already well supplied and we cannot let it become the outlet for surpluses from the rest of the world. This would invite a repetition of the market collapse of 1962. There is already provision for imports into the EEC under the GATT quota and from Botswana and Swaziland totalling nearly 60,000 tons.
Mr. Jopling: We are grateful to the Minister for telling us, so soon after his return from Brussels, about his meetings. It is significant that he should be making his statement on the day after the publication, of the Intervention Boards report, which states that in 1974 £112 million was paid to this country from FEOGA, which constitutes a third of the costs of farm support in this country.
We have noted what the right hon. Gentleman has said about the stocktaking documents both here and in his eulogy of the CAP in Brussels, published in the Press. We ask him to note that we have some reservations on this and that we should like a debate on this important stocktaking document before a final decision is taken.
We welcome the imposition of minimum import prices on fish from third countries. Would the Minister not agree that these prices are somewhat below the prices which were voluntarily agreed between this country and Norway? Is he aware that there is still continuing anxiety, in spite of this statement, among fishermen? Will he keep this matter under review and do what he can to meet the anxieties of fishermen? When he was in Brussels did he raise the important problem of overfishing in the North Sea and other areas around our coasts? Does he realise that large areas of water around this country are being scooped clean of fish by other countries, especially Russia?
Turning to poultry meat, is the right hon. Gentleman aware that we remain concerned about the issue of New York dressed poultry? It is a pity that this could not have been scrapped altogether, rather than deferred until 1981.
We welcome the statement the Minister made on beef when he said that we cannot let our market become an outlet for surpluses from the rest of the world. However, did he sound warnings in Brussels that this could happen to our market
736
in the poultry meat and egg sector? Is he aware that there has been a collapse today of the egg market, which is down by as much as 3p to 4p a dozen, and that the level of imported eggs into this country is now running at about 8 per cent. of the capacity of our packing stations?
Finally—[HON. MEMBERS: "Too
long."]—the Minister made a long statement—is the right hon. Gentleman aware that we regard his statement about help for the glasshouse industry as being thoroughly lamentable? He has announced that oil subsidies may continue to be made until June 1976. Why does he not make an immediate statement that this subsidy will be implemented to help the British glasshouse industry now? Is it not true that he has personally held up his hand in the Council of Ministers to vote for the extension of this subsidy? Yet he has not been able to come here and say that the subsidy will be paid in this country. Why is it that he continues to preside over the collapse of our domestic glasshouse industry by not paying subsidies which the Commission allows him to pay?
Mr. Peart: Perhaps I can comment on what was a lengthy intervention—
Mr. Jopling: It was a long statement.
Mr. Peart: I made a positive statement. I have experience of this House, and I say only that it was a lengthy intervention. I shall try to answer it, and I hope the hon. Gentleman will listen.
On the question of stocktaking, I do not disagree with what the hon. Member for Westmorland (Mr. Jopling) has said. The matter should be discussed as a separate issue, separate even from a general debate on agriculture. Speaking from memory, I believe that I shall have to appear before the Scrutiny Committee or some body of that kind. Apart from that, the document is here. If the hon. Member has any points, naturally they can be raised, but the document is a reasonable one and covers a whole range of problems. No doubt the hon. Member has seen it. It deals with the extension of the common market in agriculture, market stability and security of supply and reasonable Prices to consumers. It is a document which every hon. Member should study.

737
The question of a debate is a matter for the Leader of the House.
The hon. Member mentioned fish. On a previous occasion I spoke about over-fishing and conservation. I had bilateral talks with the Danish Minister when 1 was in Luxembourg and I pointed out the dangers of overfishing, for example, of herring. This had been brought to my notice by hon. Members of all parties in the all-party committee on fisheries. This meeting extracted a recognition from Commissioner Lardinois of the need to modify the fisheries policy as regards access and for the Community to take action if some other country acted unilaterally.
In addition, the new import regime is very satisfactory. It is true that here and there some of the prices are below what was agreed voluntary with Norway, but overall it will give adequate protection for the first time. I welcome that very much.
On the issue of New York dressed poultry, we can argue that this arrangement should be scrapped, but there are serious considerations here which affect health. We have had this restriction delayed to enable people to adjust their businesses accordingly. The previous Conservative administration also took this point of view. We have secured a further delay, and I should have thought that that would have been welcome.
On the subject of imports, I did not specifically deal with eggs at the meeting. I have raised the matter; we have had bilateral talks with the countries concerned. My hon. Friend the Minister of State has been very active on this matter. The hon. Member should appreciate that we also export eggs to other parts of the Community.
Mr. Cledwyn Hughes: I thank my right hon. Friend for his comprehensive report. I should like to ask him two brief questions. First, can he say specifically how far the Commission has taken into account the interests of the United Kingdom in the formulation of the stocktaking exercise?
Secondly, does my right hon. Friend have complete confidence that the beef regime will become a permanent feature of the common agricultural policy?
Mr. Peart: We were able to explain, not just at this meeting but at previous meetings, what we hoped would emerge out of this stocktaking exercise. I reported this to the House, and I repeat it now. National aids should be used. In the interests of the consumer, if there are to be any surpluses the Community should benefit from those surpluses. This is exemplified in the social beef scheme, which has benefited an important section of our community and has also taken meat off the market.
We also raised the problem of pricing with regard to the efficient form. In other words, a more flexible approach has been accepted. We argued about the need to consider traditional supplies from third countries, and note was taken of this. This will be a continuing discussion, and that is why I welcome being cross-examined further on this.
As for beef, I have said over and over again that I believe that the beef regime which we have obtained for our own country will more and more be regarded by some other countries as a very sensible arrangement which might suit their needs. I am determined that we shall keep our régime.
Mr. Kershaw: Is the Minister aware that, except for the part about horticulture, his statement is very satisfactory? Does it not underline the benefits to farmers, fishermen and consumers of our membership of the EEC?
Mr. Peart: Yes, I have come to that conclusion. I said as much at the Dispatch Box the last time I answered questions. I believe that the farmers can benefit, that we shall have adequate supplies and that in the long term British consumers will accept this situation. I repeat to those who still believe that we can get cheap food at subsidised prices from other countries that that day has gone and that they should recognise it.
Mr. Torrey: Is my right hon. Friend aware of the appalling situation under intervention whereby massive stocks of food are stored while developing countries face starvation? Is he also aware of the way in which these large stocks are sold to third countries at give-away prices, the balance being met by British and other Community taxpayers? Does he still agree, as he used to do, that this is wrong? Will he take steps in the

739
unlikely event of our still being in the Common Market after 5th June to see that this policy is abolished from Common Market rules?
Mr. Peart: I hope that my hon. Friend will appreciate that I have always argued that permanent intervention was not the means of support that I wanted for British farmers. But that is not to say that I have always condemned intervention. My hon. Friend talks about stockpiling. The hungry world was very glad recently that the Americans had stockpiled their wheat and cereals—
Mr. Torney: That is not the Common Market.
Mr. Peart: That does not matter. In principle, I am not against intervention and support when it is necessary. My hon. Friend, who takes a keen interest in agriculture, should be well aware that we always have practised support and intervention in relation to some of our commodities. Potatoes are a classic example. We have buried them underground, dyed them and fed them for cattle food. I therefore hope that my hon. Friend will appreciate that what we have done is to say that we prefer another system as distinct from permanent intervention. There are bound to be fluctuations of supply and fluctuations in world trade, because agriculture cannot be put in a straitjacket, but I have said many times, and the Community agrees, that if we produce surpluses they should be for the benefit of people in the Community. As for aid to the developing world, the Community and Britian in the Community have a better record than any other part of the world.
Mr. Stephen Ross: I should like to congratulate the Minister on his statement and on the flexibility that he has shown in it. My right hon. Friend the Member for Orkney and Shetland (Mr. Grimond) would also particularly like to thank him for seeing the Danish Minister, which my right hon. Friend had requested him to do.
On horticulture, the Minister must be aware that there will be deep disappointment about his statement. It is not finance for obsolete glasshouses that we want but money to maintain all the new investment which has gone into horticul-
740
ture in the last five years, encouraged by his Ministry. As the rest of the Common Market is already financing horticulturists, will he ensure that this is extended to this country as quickly as possible? There is no reference in the statement to credit facilities which apply in the Common Market. Why cannot they be extended here?
Mr. Peart: This did not come up at the meeting which I attended and on which I am reporting. I note what the hon. Gentleman has said about fishing. As for the glasshouse subsidy, that was originally only a temporary subsidy. We introduced it earlier than any other country in Europe and we provided more aid. As I have said, I will look at this matter to see how it is working and will find out the reactions of my colleagues.
Mr. Donald Stewart: May I express to the right hon. Gentleman the disappointment which will be felt in the fishing industry at the fact that there has still been no agreement on the present policy? Our fishermen's demand for extension of the limits is designed to ensure that the limits protect our own fisheries and do not allow the vessels of the Community within them as well. Does he not accept that there is no reason for Ministers to be coy with the EEC on this subject, since the fishing grounds are a United Kingdom asset and the EEC has nothing similar to offer?
Mr. Peart: I believe that what I have achieved on fishery matters in relation to import prices is what the industry wanted. When I met representatives of the Trawler Owners Federation, this is what they argued for. I accept that access is a matter to be considered sensibly. I have got the Community to accept the need to modify the access provisions of the common fisheries policy in the light of changes which are in prospect in international practice. The hon. Gentleman will know that the Law of the Sea Conference has been considering this. I should not want any country to act unilaterally. As I have said before, Iceland was condemned from both sides of the House when she acted unilaterally. This matter should be worked out sensibly and in co-operation.
Mr. Blenkinsop: Will my right hon. Friend assure us that in dealing with

741
poultry there is a clear understanding that the environmental health officer's role will be protected both in the slaughterhouses and outside, to avoid the gross expansion and unnecessary increase in posts which would otherwise be involved?
Mr. Peart: I accept that, but there is a desire among many people—I used to be included in that category—for complete veterinary inspection. I recognise that our environmental health officers can be trained to do a specific job which fits in with our veterinary practice, so for that reason this is satisfactory.
Mr. Scott-Hopkins: May I welcome the Minister's words about the stocktaking document? Would he not agree that the whole tenor of that document goes along with his own paper and that of the NFU about expansion of agriculture over the coming years and the steady supply of food for our consumers?
Would the right hon. Gentleman say a little more about the subject of horticultural glasshouses? It seems extraordinary that he should vote in the Council of Ministers for the extension of the subsidy of one third of the difference between September and now, yet not introduce it here. Would he confirm that the imports of 50,000 tons of beef into the Community can be done only by importers who export the same amount of fresh meat outside the Community and that there is a further 100,000 head of young stock permitted to be imported into the Community at the same time?
Mr. Peart: Yes, although the figure is 67,000 head of young cattle between June and September. I was prepared to go along with this, since it seemed sensible. I have nothing more to add on the subject of glasshouse aids. I accept that one is in a difficulty here. I cannot object to countries using national aids when I have argued for them for the British industry. This may be called into question, but I have said that I will see how it works. I cannot go on repeating what I have said so often, that what we gave initially and what was accepted was a far better arrangement than has been received by any other country in the EEC.
On the stocktaking document, I agree that it follows basically the principles that we put forward in our long-term approach in the White Paper and that it conforms
742
also to what our own farmers said in their document that they wanted. The stocktaking document is important. I hope that hon. Members interested in these matters will read it carefully. I know that the hon. Member for Derbyshire, West (Mr. Scott-Hopkins) has done so.
Mr. Doig: The Minister made no mention of hill farmers in his lengthy statement. Many Scottish hill farmers are having a hard struggle to survive. They work very hard and very long hours. Will he consider giving them much more assistance?
Mr. Peart: I am grateful to my hon. Friend. I am sorry that I did not mention this matter. The Council agreed on a Community contribution of 25 per cent. towards aid for the hill areas. We had debated this previously, and that was the figure which was then discussed. We agreed on that figure, then the position of the German Government had to be considered and we had a reassessment the other day. But the figures remains 25 per cent. This will be a useful change. I do not know why it should be condemned. The simple fact is that this will he the aid that we want for our hill and upland areas.
Mr. Charles Morrison: The right hon. Gentleman cannot pretend that the problems of the glasshouse growers are matters of no consequence. What further evidence does the right hon. Gentleman require that they are in difficulty, given that he has been given endless evidence over the past few months?
Mr. Peart: I am not saying that they are matters of no consequence. We must regard the horticulture industry as an important producer of food for the nation. I merely said that we gave more aid initially than any other country. A decision has been made which I have reported to the House, and I shall have to look at the matter carefully.
Mr. English: Will my right hon. Friend comment upon the report that appeared, I think, in the Guardian of a week last Friday that some of the surplus beef has been sold to Russia? If that is true, does he think that the Russians will do what they did with the subsidised butter—namely, sell it on at a profit to other countries?
Mr. Peart: If people buy beef and commercial arrangements are made there is nothing to stop them trading. I see nothing to condemn in that. If there are surpluses in the Community and if if we can eat more beef in the Community, that is all to the good. Inevitably the agricultural trade is world-wide and we are seeking to liberalise it.
Mr. Kimball: Is the right hon. Gentleman aware that perhaps the most encouraging part of the statement is his mention of flexibility in the future approach to the common agricultural policy? Is he aware that many of us feel that production grants have a part to play, particularly in view of the fact that the arguments against the stocktaking document are both conflicting and inconclusive?
Mr. Peart: May I say how right the hon. Gentleman is. I believe that flexibility is important, and we have always stressed that. Producer grants are vital. Many people used to argue that they would distort competition. They were not as well blessed with them in the Community as we were in this country. I believe that the stocktaking document shows that we have made considerable progress over the past 12 months in the Community. I hope that some of my hon. Friends who take a different point of view will study the document carefully before they become really carping critics.
Mr. Spearing: Will my right hon. Friend confirm that there is no change to the basic mechanism of the common agricultural policy? If there is, will he tell us what it is? When the Council next meets will my right hon. Friend consider the Community's tobacco-growing grant. which I understand will be about £50 million or more in the current year?
Mr. Peart: I am rather surprised that my hon. Friend says that we have not made changes—
Mr. Spearing: No change to the basic mechanism.
Mr. Peart: Let me give my hon. Friend one example. I obtained what is a deficiency payment system for beef—namely, the variable premium. I accept that it will be examined every year. I have stated publicly, and I have stated
744
at the Council, that we believe that this will continue to be the method of support in this country if it suits our needs.
Added to that, we have obtained recognition of the principle that national aid should be given. If my hon. Friend goes through our party document, most of which I wrote, he will soon see that what is in the document has been achieved. We have said repeatedly that permanent intervention is not the only means of support. That is why we have the variable premium. We have also obtained better access for third countries. New Zealand and Canada have praised our efforts. The Caribbean countries have praised our efforts on sugar. The Lomé Convention has provided a better deal than was ever thought possible. My hon. Friends should not conduct a dialogue of the deaf. They should recognise that we have achieved a great deal.
Mr. Ralph Howell: May I congratulate the right hon. Gentleman on becoming such a first-class European in such a short time? I welcome his statement, with the exception of his failure to help the glasshouse industry. The fact that we were doing more to help the industry in the past would have been a first-class argument, I would have thought, for continuing to give assistance. It is pointless to help the industry and then to leave it suspended for six months between December and June when help has been given generally in the EEC. Did the right hon. Gentleman discuss with Commissioner Lardinois the plight of milk producers? Unless something is done to help them in the autumn there will be a desperate shortage of milk in this country.
Mr. Peart: I did not deal specifically with milk in Brussels. The hon. Gentleman must be aware that the milk producers have had two good awards. I have had representations made to me and they will be considered carefully in the light of our agricultural expansion plan. I have said repeatedly that more beef should be produced from the dairy herd. I have never been anti-European. I was sceptical about the CAP and I expressed that scepticism in the House, but, having seen how the CAP works, and having obtained the improvements that I have mentioned, I believe that any man who

745
is honest with himself will accept my conclusion.
Mr. James Johnson: I welcome my right hon. Friend's statement, and particularly as he has gained minimum prices for cod and haddock for fishermen who have been in sore difficulties. I ask my right hon. Friend two short questions. First, does he think that it is a superstitious myth to talk about a fish mountain when we have had over 100,000 tons of fish—mainly cod and haddock—piled away in our stores for the past 12 months? Secondly, is he thoroughly satisfied that the measures which he has taken will be an adequate protection for our fishing industry?
Mr. Pearl: I believe that there is no fish mountain. Frozen fish will always find a market when the demand is present. That has been the practice over the years. My hon. Friend represents with distinction a fishing port and he knows that from his knowledge of the industry. He need not worry about that. What I have negotiated and what has been accepted by the Community means that we have to strengthen our position in the world. We are now in a position where action can be taken by a large market. That gives us a tremendous power to prevent any people outside the Community from seeking to distort our own market by unfair competition. My right hon. Friend the Member for Battersea, North (Mr. Jay) may smile, but he lives in Battersea. This is a matter that affects fish consumers, too. People everywhere like fish and chips, and there is nothing wrong with that.
This is a very serious matter and it is important that we should afford some measure of protection to our producers. It is a matter of securing the right balance between producer and consumer, and I believe that that is what I have done.
Several Hon. Members rose—
Mr. Speaker: We have already had 32 minutes on the statement. I am afraid that I must call the last question. Mr. Blaker.
Mr. Blaker: Is the right hon. Gentleman aware that it was observed on this side of the House that when he answered my hon. Friend the Member for Westmorland (Mr. Jopling) the one question he
746
did not deal with was that about the glasshouse sector? That omission was taken by myself and my hon. Friends to be an indication that he was preparing to drag his feet. Does the right hon. Gentleman recall his hon. Friend the Parliamentary Secretary saying in answer to me last week that it was unlikely that the Government would be paying a subsidy from June onwards as it was not paying one now? In the light of what the right hon. Gentleman has said today, may we take it that that answer no longer applies and that he will consider this whole question again with a sympathetic attitude?
Mr. Peart: I do not think I can say
that. What my hon. Friend said last
week was quite right. I have nothing more to add today. I have stated my position already. I know that this is a matter about which the hon. Gentleman has genuine feelings. No doubt he will be pursuing the matter. We always consider an hon. Member's argument. I think that my hon. Friend's reply was entirely right and correct.

BALLOT FOR NOTICES OF MOTIONS FOR MONDAY 19th MAY
Members successful in the Ballot were:
Mr. William Shelton.
Mr. Jim Spicer.
Mr. Alexander Fletcher.

STATUTORY CORPORATIONS (FINANCIAL PROVISIONS) BILL
Mr. Joel Barnett, supported by Mr. Chancellor of the Exchequer, Mr. Secretary Varley, Mrs. Secretary Williams, Mr. Secretary Benn. Mr. Secretary Ross, and Mr. Robert Sheldon, presented a Bill to provide further (by extending Section 2 of the Statutory Corporations (Financial Provisions) Act 1974) for compensating certin nationalised industries for their losses due to price restraint; and to make other provision with respect to finance and administration in the public sector: And the same was read the First time; and ordered to be read a Second time tomorrow and to be printed. [Bill 152.]
SUPPLY
[15TH ALLOTTED DAY],—considered.

TRANSPORT (EXPENDITURE)
4.24 p.m.
Mr James Boyden: I beg to move,
That this House takes note of the First Report from the Expenditure Committee in the last Parliament (House of Commons Paper No. 269) on Public Expenditure on Transport and of the relevant Government observations contained in the Fourth Special Report (House of Commons Paper No. 263) in this Session.
This debate refers to the First Report from the Expenditure Committee 1974 which was published on 17th July 1974—namely, the Public Expenditure Committee's Report on transport—and the Fourth Special Report from the Expenditure Committee setting out the observations of the Department of the Environment, published on 5th March 1975. It is the first report made since I became Chairman of the Expenditure Committee, having been a member of that Committee since its inception.
The circumstances in which the Sub-Committee's began their work in 1974 were rather peculiar. It was obvious that that Parliament would be fairly short and that long investigations and reports would not come to very much.
When I became Chairman, I asked the Sub-Committees whether they would carry out short investigations so that the work of that Session of Parliament could be most effective. The Sub-Committees more than fulfilled my expectations. Every Sub-Committee carried out the work quickly and well. Their investigations were short and they all produced the most excellent reports—not least the report of the Sub Committee on Transport, which was chaired by Mr. James Allason, who is no longer a Member of this House. I pay tribute to the work of Mr. Allason in connection with that investigation and the report of his Sub-Committee and the study which it undertook. Mr. Allason was the Chairman of the Environment Sub-Committee for a considerable time. He took a great interest
748
in the subject and steered his Committee through many sets of documents and produced extremely good reports. It was his last piece of work as a Member of Parliament, and I am sure the House will pay tribute to him. [Hon. Members:
"Hear, hear."].
The hon. Member for Daventry (Mr. Jones) took over chairmanship from Mr. Allason. The hon. Member for Daventry is continuing the good work, and his Committee is about to produce a report on the London Docklands. I hope that before long that report will come before the House for debate.
I have seldom seen better work in a Parliament from the Expenditure Committee than the work it has carried out in that rather short Parliament. Its members have been most diligent. The Committee's work does not appeal to everybody. The work is given very little publicity unless it deals with something sensational. The normal work is objective and non-partisan and does not attract publicity. I believe that some Ministers would be able to make a reputation for themselves if they diligently followed some of the suggestions which have come from these Committees. They would not necessarily have to undertake a great amount of work since much of it has been done for them. It is extraordinary how collectively members of a committee can often produce a better result than the total effort by individuals in it. That is partly because the Expenditure Committee and its Sub-Committees are extremely well served by their staff. They have specialist staff who are expert in their subjects, and they have devoted service from the Parliamentary Clerks. A combination of effort has produced very good reports which often deserve greater publicity and interest than they are accorded.
I am very pleased with the work of the Sub-Committees. The bulk of that work was carried out in what one can refer to as "the short Parliament". This work had been undertaken and brought to a conclusion, in contrast with the regrettable delays of some Departments in commenting on those reports. It is not much good a Committee of the House making a report if the Department concerned is supine for a long time afterwards. There have been considerable delays from some of the Departments in

749
making their observations. Some Ministers have apologised to me for these delays. Normally I do not think it is the Minister's fault. It is often due to the fact that senior officials in the Department do not bring Ministers' attention to key points in a report and to the need for ministerial action.
In contrast to criticisms in general terms of some Departments, there are two Departments in particular and two Ministers who have been extremely active in dealing with the Committee's reports. For example, my right hon. Friend the Minister of Agriculture—whom we heard a few moments ago add to his reputation with his report on his recent visit to Brussels—acted quickly following the Sub-Committee's investigation into the subject of milk and followed up a number of the Committee's recommendations.
The same can be said of the Ministry of Defence and its co-operation with the Expenditure Committee. In a sense the Ministry of Defence has a more difficult task because of the element of security involved in its work. It is a widespread Department, and it is easy to pick holes in it, but the Defence Sub-Committee of the Expenditure Committee has an excellent relationship with the Ministry of Defence from its liaison officers right through to the Minister of State for Defence, who was active in the Expenditure Committee and who has taken a considerable interest in the day-to-day work of the Defence Sub-Committee. He has acted in his ministerial capacity on many of the Committee's proposals. Senior permanent officials and senior military officers and Chiefs of Staff and commanders-in-chief have taken a very responsible attitude in respect of the work of the Sub-Committee.
I mention this in contrast to work undertaken by other Departments where there has been a lack of response and thereby a loss to the country and to the administrative competence of the Department concerned. Good administration does not necessarily come to the notice of television or the Press but it is extremely important for good government.
The Sub-Committees of the Expenditure Committee have worked continuously to improve the economies of expenditure and ensure good administration. I wish
750
to make a strong plea to Ministers generally to take a more active personal interest in the work of the Committees and to see that their senior officials do so as well.
My right hon. Friend the Leader of the House often comes in for criticism, but from the point of view of the Expenditure Committee we were extremely grateful to him for affording us this half-day debate. We hope that we shall have a further half-day debate, for a debate of that duration is more suitable when the House discusses the work of the Expenditure Committee than is a full day's debate. We hope that, following what was said in business questions today, the debate on the Expenditure White Paper will soon take place, because the General Committee of the Expenditure Committee has spent a good deal of time on that matter and has a contribution to make.
I shall leave it to the Chairman of the Sub-Committee on Public Expenditure on Transport to deal with most of the matters in that report, but I want to comment on four of the recommendations.
The first matter is a recommendation dealing with the presentation of the Government's forward planning on spending so that the public may have a clearer idea of what the Government are doing. I refer here to paragraph 11 of the report. The Committee says:
"We feel that an annual presentation of public expenditure should show clearly whether resources are being spent in accordance with Government policy."
That is one of the key features of the reports of the Expenditure Committee and Public Accounts Committee, that Government policy should be carried out to the letter by the Departments, and that these Committees should be in a very clear position to see that that is so.
The report goes on to say:
"At the moment, that policy requires that resources are diverted to public transport. Although the proposed system under discussion would be able to give a comprehensive picture, we do not think it will show the balance of this expenditure."
The recommendation is:
"that any revised presentation of the Roads and Transport table contained in the annual Public Expenditure White Paper should demonstrate whether the balance of expenditure is in accordance with Government policy."

751
The Department of the Environment in the Fourth Special Report, commenting on that, said that it had altered the presentation of the figures, which now gave a better picture of the division between local government expenditure and central Government expenditure. Unfortunately, it has still some way to go.
What is required—and I would ask my hon. Friend who is to reply if he will take a note of this—is an absolutely clear picture of the objectives of Government expenditure and how this arises. Therefore, it needs probably more breaking down in relation to, for example, local government expenditure.
I had a paper today from the British Road Federation commenting on this particular recommendation, and agreeing with the Committee. It said:
"It is therefore possible to see clearly the balance of expenditure but this is not sufficient to judge the balance of Government policy. What is important is not only the amount of money spent but the results in terms of service provided. It is therefore meaningless to compare the road programme, which produces a measurable benefit in economic terms and represents an addition to the transport services available, with subsidies which shield public transport passengers for a short period from the true costs of the services provided and have little or no effect on transport provision or traffic carried."
I reject the implication that there should not be subsidies for public transport. The implication of the British Road Federation, with a vested interest, is that the money is going down the drain. I reject that but I would say to my hon. Friend that there is still room within the presentation of the figures to see exactly the Government's policy and how the money is being arrived at, and also to make an element of cost comparison, so that the cost benefits of particular lines of transport policy come out very clearly.
This brings me to the second recommendation on which I have very serious criticisms to make of the Department and of local authorities in relation to road maintenance. The Marshall Report has been with us for a considerable time. At the time that it was produced it was hailed as an excellent report on road maintenance and it was felt that all that was needed was an energetic carrying-out of the recommendations. But under scrutiny from the Expenditure Committee
752
before this one, and this one also, there has been very little progress.
I would refer to the particular recommendation of the Committee in paragraph 28:
"We recommend that as a matter of urgency the DOE should now concentrate on revising their criteria for assessing the appropriate levels of public expenditure on road maintenance, along the lines of the objective standards referred to by the Marshall Committee. In doing this, they should seek comparability with the criteria used in assessing the need for new construction".
About one third of road transport expenditure goes into maintenance, and any hon. Member going round the country will see that, far from accepting the objectives of the Marshall Report, a great many local authorities have taken no notice at all; and some of the things done in the name of road maintenance pass comprehension.
The Committee also made a recommendation that until these objective standards were worked out and the Government really knew what they were getting for their road maintenance money, the road figures should be frozen. That has happened, but I take to task the Department of Transport in its comment on that particular recommendation of the Committee. It is a very weak answer. Under the observations, in paragraph 5 of the Fourth Special Report, it is stated:
"Further work is in hand towards setting objective maintenance standards for roads and, where appropriate, common techniques will be applied to the assessment of the economic value of road maintenance and of road building",
and it says that local authorities have been asked to hold maintenance expenditure.
Finally, defending in a way the lack of drive in this field by local authorities it says:
"It is for the authority directly concerned to determine its priorities in maintenance and how the necessary operations can best be carried out. DOE and the local authorities are working jointly to ensure that maintenance is cost effective."
That particular paragraph is a very typical civil servants' stalling paragraph and does not show the urgent consideration that the Committee wished. It complacently accepts that the Marshall Report had been on the table for a very long time and that very little can be done about it. I do not know that accepting

753
the Marshall recommendations will produce a miraculous improvement in efficiency but certainly it is the only obvious line of getting more roads, or less payment for the same roads, that is on the horizon. I would ask my hon. Friend to give a really firm instruction to his Department to get local authorities moving on this and intervene himself in an effective way.
I would make here the criticism that the same thing applies to the Department's attitude on car parking policy. The Committee considered this very carefully and in paragraph 15 recommended a much stronger lead from the Department on a national parking policy. It said:
"We therefore recommend that except in the case of park and ride facilities, parking deficites be moved from the list of items eligible for supplementary grant".
The point behind that is that the Committee wanted much more effective intervention by the Department in relation to parking, and a proper national policy for this. The elaboration of that is in paragraph 17, and here again the observations of the Department were very lukewarm:
"Since rate support grant is a general grant towards a wide range of local authority expenditure, the Government do not consider it appropriate to introduce legislation to make expenditure on car parks ineligible for rate support grant purposes. Nor is it thought appropriate to require local authority approval of all matters concerning off-street car parking to be subject to the approval of the strategic authority".
Here the Department is completely stalling on the recommendation of the Committee and obviously no action can be envisaged. Here again I ask my hon. Friend to have another look, to see whether a national parking policy supplemented by financial action from the centre is not desirable.
Much the same can be said about canals, and this is the last point to which I wish to draw particular atttention. At paragraph 13 the Committee said:
"We note that expenditure on canals is nevertheless an ineligible category of expenditure"
for transport supplementary grant. The upkeep of canals is an integral part of transport and probably a more important part. The Committee recommended that this exclusion should be reconsidered.
754
In paragraph 3 of the Fourth Special Report the Department of the Environment gives that the brush-off by saying
"Canal expenditures are primarily the responsibility of the British Waterways Board."
The Department does not wish to intervene.
Mr. Nigel Spearing: Does my hon. Friend note that at the end of that excuse the Department says that the grant would serve no useful purpose? Does not he agree that capital grants for new or improved canals which carry commercial traffic in private and public vessels would be analogous to such grants for expenditure on roads? Would not that be a great advantage? So far no Government have agreed with that analogy, but I hope that the Minister will clear it up at the end of the debate.
Mr. Boyden: Yes, indeed. The Committee is an all-party Committee and not in any way doctrinal. It argues for more Government intervention to achieve a better integrated policy. I thank my hon. Friend for his support.
The Committee is looking for snore vigorous intervention from the Department to achieve integration, and the use of financial controls so that the best available policies, particularly the Marshall recommendations, are applied throughout the country. That will produce economy and efficiency. If the Minister is not in a position to reply today, I hope that we shall have another set of observations which will be more forthcoming.
4.42 p.m.
Mr. Arthur Jones: The generous remarks made by the hon. Member for Bishop Auckland (Mr. Boyden) on the work of the Environment Sub-Committee will be widely appreciated. I am sorry that my former colleague Mr. James Allason is not present to hear those remarks, but I am sure that they will be appreciated both by him when he reads them and by some of my hon. Friends who are here this afternoon and who served on the Committee when the evidence was taken and the report was prepared. I was not fortunate enough to be serving on the Committee at the time. I served until the February General Election and then had a break until the Parliament of last November. I previously

755
followed the work of the Committee and am happy to be associated with it again now.
I looked with interest at the Committee's report and at its recommendations. I accept, as the hon. Member for Bishop Auckland said, that there is a lapse of time between the publication of a Select Committee Report and the date when the recommendations are commented upon. The First Report was printed on 17th July 1974 and commented upon on 7th March this year. Perhaps that is not an undue length of time, bearing in mind the present circumstances. I welcome some of the comments made by the Department.
I wish to touch on three major matters covered in the report, namely, major road routes, maintenance and transport policy generally. I shall relate some of my comments to experience on the ground in the light of the implementation of the recommendations of the Select Committee and the Department's comments.
There is increasing and widespread concern over the demands made upon land by further major highway routes. I came closely in touch with this when the extended route of the M40 was under discussion. I accept the principle set out in Cmnd. 5879 "Public Expenditure to 1978–79", in paragraph 6 on page 62:
"The planned network of 3,500 miles of high quality strategic routes by the early 1980s announced in 1971 is no longer practicable. Instead resources are being concentrated on the completion of a basic 3,100 mile network of routes designed particularly to respond to the use of heavy lorries; ".
I welcome that concept. Major road routes could give heavy lorry facilities within a restricted distance from towns so that it is possible to route heavy lorries and vehicles of that description away from towns and on to the major routes with comparative ease over limited distances. That was the policy of the Conservative administration. That policy should be followed and we should work towards it by a system of recommended or mandatory routes.
The First Report from the Expenditure Committee in paragraph 39 recommends:
"further examination of the effect of the real costs of motoring and traffic growth in the preparation of investment plans. We note that the provision of more road space and improved facilities in general encourages the growth of traffic."
756
That view is widely held. It is said that the more roads are built, the more traffic will be generated and the greater will be the use of those roads. I am pleased to see that view referred to specifically in a recommendation. It is a matter of public concern that the development of more and more road routes may be detrimental in the long term, bearing in mind land use and vehicle generation.
The Oxfordshire branch of the Council for the Preservation of Rural England was sceptical about the need for the extended M40 route from Oxford to Birmingham. It was of particular concern in Oxfordshire and in my own constituency in Northamptonshire. That is why I particularly welcome in the Observations of the Department on the First Report a reference to the fact that a considerable amount of work is to be done in assessing the need for these routes.
The M1-A1 link is a matter in which I have been considerably involved in recent months. There are five choices, but the main proposal is for a link from the M1 in the vicinity of the Crick exit across Northamptonshire, leading to the A6, crossing the A6 and linking with the Al to provide a more effective link to the East Coast ports. This route goes across the open country of North Northamptonshire and it has a very serious effect on the high-value agricultural land in that area. It is certainly very damaging in terms of the effect it would have on the amenity of the countryside. It passes either immediately north or immediately south of the famous village of Naseby. I understand that if it takes the northerly route, it will run right across the site of the Naseby battlefield.
I am sure that the Department should be directing its attention to whether it would not be much more sensible to use the southern-bound carriageway of the MI down to the Collingtree exit, which lies west of Northampton, and to use the dual carriageway which is under construction from the Collingtree exit eastwards, south of Northampton, to a position roughly south of Wellingborough, where it would join the A6, cross the A6 and then go over into Huntingdonshire. There is almost unanimous support for this proposal from colleagues on both sides of the House.

757
I turn to the criteria—which I know have been altered in recent years—with regard to the assessment of the capacity of roads. I put down a Question which was answered on 26th November 1974. I asked the Secretary of State for the Environment,
"What prospective traffic densities are being used in his recommendations regarding the character and route of the MI-Al link road; and what space capacity is anticipated on the south-bound lanes of the MI between the Crick and Collingtree junctions."
The Under-Secretary replied,
"The traffic anticipated on the MI-Al link in 1995 would be about 10,000 vehicles daily, though around Kettering and Wellingborough it would rise to 15,000-20,000 vehicles. By then the M I between Crick and Collingtree will be nearing the limit of its capacity."— [Official Report, 26th November 1974; Vol. 882, c. 150.]
Therefore, we know the estimate of the capacity of the south-bound carriageway of the M1 up to 1995. Surely in terms of the sensible use of public resources we should be utilising the southbound carriageway of the M1 to its capacity, using the dual carriageway which is under construction south of Northampton, taking us to a position south of Wellingborough and then linking up with one of the recommended routes of the Department for the Ml-Al link.
When the recommendations were put forward both by the Department and by the Northamptonshire County Council, it was on the assumption that the south bound carriageway of the M1 was already overloaded. In the subsequent recommendations we have not had any recognition of the fact that, following the change in the criteria of traffic density, we shall have under-utilised capacity on the M1 south-bound carriageway for the next 20 years.
The dual carriageway south of Northampton is under construction and the expense is committted. That is against the recommendation that the MI-Al link across North-Northamptonshire was to be only a single carriageway. This is what led many of us to question the validity of the Department's proposals and to suggest this alternative. In that respect we had an extremely interesting exhibition—I think that is what it was called—at Kettering, at which the Minister for Transport was present. This
758
was part of a consultative exercise which was widely welcomed in Northamptonshire, as was the consultative exercise that we had for the route of the M40. I welcome the recommendation in the First Report at paragraph 59, where it says,
"We recommend that the right to challenge the need for a transport scheme at a public inquiry should be firmly established."
That was denied when the M40 consultative exercise was under way, but I am pleased to see that that recommendation has now been accepted by the Department, which in paragraph 9 of its observations says,
"The Government agrees that the need for a road scheme may appropriately be challenged at a public inquiry, provided that matters of policy are not called into question."
There we have the assurance that the detailed application of this principle is being studied. I hope that the Under-Secretary will be able to confirm the further thinking in that respect.
The M40 exercise was the first one of its character ever undertaken. I believe that it was an enlightened move on the part of my right hon. and learned Friend the Member for Hexham (Mr. Rippon) who was Secretary of State at the time, and my hon. Friend the Member for Ashford (Mr. Speed) who was at the time the Member for Meriden. That is a useful step forward.
Turning to public expenditure on roads, I should like to refer to "Public Expenditure 1978–79", Cmnd. 5879, which reports growing expenditure on the new construction and improvement of motorways and trunk roads. It is surprising, in the context of an announcement by the Minister in June of last year, that roads are no longer a growth programme. Cmnd. 5879 indicates a rise between 1974–75 and 1978–79 of 2·1 per cent. per annum. This should be placed in the context of an actual decline in the use of motor spirit as I understand it, in the first nine months of 1974 of 4·4 per cent.
I wish to emphasise that by a careful analysis of the improved use of existing roads and highway management schemes generally, what we should be directing ourselves towards is a more effective use of the facilities that we already have. I take the point that the hon. Member for Bishop Auckland made about road

759
maintenance. The Expenditure Sub-Committee made recommendations which the hon. Gentleman quoted. He also quoted from the departmental observations, and I should like to add a further quotation which I do not think he cited, namely that
"Local authorities have been asked to hold road maintenance expenditures in 1975–76, in common with other of their current expenditures, to the 1974–75 level, and Rate Support Grant has been settled on the basis that they will do so."
I should like the Under-Secretary to say what is the definition of road maintenance. Is it just repairs or does it include improvements of roads by way of fortifying shoulders of roads, slightly widening them, the regrading of roads or the taking out of bends and so on? I am not sure whether that is maintenance as such or whether it comes under the designation of improvements. A great deal of work is done by highway authorities to take out a slight bend here and improve a minor matter there. They do it because it is minor expenditure in the whole programme, but for the aggregate cost of these items a significant improvement could be carried out, rather than fiddling with minor maintenance projects. We all see many examples as we go about the countryside.
I turn to the recommendation on page xi that
"information on transport noise and pollution levels be added to the information required in the presentation of TPPs."
The Department was sympathetic to this suggestion. In paragraph 4 of its reply it said,
"As to noise and pollution, the design features which will produce a road which best fits into the local environment and at the most economic cost are particular to the locality concerned and are subject to the normal statutory planning processes."
That may be so, but most environmental damage and noise and pollution problems arise on existing roads. I think particularly of roads through villages, not necessarily main roads but roads increasingly used by heavy lorries whose drivers are seeking short cuts or are seeking to avoid routes with dense traffic on them.
The effect on the villages is very damaging. There are not adequate foundations, with the result that there is tremendous damage to the roads, which were not constructed to carry the heavy traffic now
760
using them. The footpaths, kerbs and verges are destroyed, and property close to the highway is damaged by vibration from the engines and the traffic movement.
In terms of highway management, much could be done by quicker implementation of recommended and mandatory routes. It is done around Northampton, in my constituency, where, to protect the villages, construction vehicles are prohibited from certain routes. I know of one or two villages where heavy vehicles which could be kept out are causing significant damage. I think particularly of Kings Sutton in South Northamptonshire, which is not on a major route but through which heavy vehicles travel because the drivers are using as a short cut the road upon which the village lies.
By improved management and economy in expenditure on roads, by using routes more fully and choosing those which should be used more comprehensively, we could do a great deal to avoid public expenditure or to redirect the available resources. I hope that the Under-Secretary can tell us that this aspect of highway expenditure and traffic management is receiving urgent consideration in his Department. We have had promises, but they are long term in their effect and people are understandably demanding and expecting that central Government, who have the responsibility, will accept that responsibility and do what is in their power to bring about significant improvements.
Highway management is important in the context of limited resources. We have seen tremendous advances in it in recent years. I hope that we shall see a much more effective policy by both central and local government in transport matters.
5.6 p.m.
Mr. Leslie Huckfield: I congratulate my hon. Friend the Member for Bishop Auckland (Mr. Boyden) and his Committee and the hon. Member for Daventry (Mr. Jones) and his hon. Friends, and those who have been members of the Committee at various stages, on producing a report which makes significant and salient points. The report hammers home the point I have been trying to make on many occasions—that it appears that we still do not have an overall transport policy.

761
When I see the detail into which the report goes, such as the eleventh recommendation, making the point that we still do not have the equipment, the yardsticks, to compare various kinds of transport investment, I feel that the report has hit upon one of the central matters lacking in present transport policy.
I now declare my interest. I recently submitted to my right hon. Friend the Secretary of State the report of a transport study committee which he set up a couple of years ago. That report also recommends far more co-ordination of investment and pricing policy in transport.
I also speak as a member of the Transport and General Workers' Union who also acts in the House on behalf of the Associated Society of Locomotive Engineers and Firemen. I am sure that both unions would agree that we do not seem yet to have a transport policy. Ever since we have had the gigantic Department of the Environment the emergence of such a policy seems to have been one of the casualties. Many of us are still waiting for the emananation from Mar-sham Street of the White Paper which might set out the Government's intentions on transport. We have waited a long time. We shall go on applying pressure, and some of the recommendations in this significant report will help in that.
The point to which my hon. Friend has already referred, the recommendation in paragraph 11, that in their presentation the tables should be made much more akin to each other, is also made by the study group of which I was the chairman. We went a little further, and recommended a thoroughgoing analysis of all modes of transport. We recommended that the allocation, or modal split, of transport should be based upon a total analysis of operating costs in each mode. We came to the conclusion that it was not just the economic costs, the private costs, of each mode of transport that should be examined, but also the social and environmental costs.
The Department should have been applying itself to a thoroughgoing analysis of all these costs. I not believe that it has done any co-ordination of even the pricing and investment policies of the industries for which it has direct responsibility, or that it has gone far enough into the analysis of some of the social
762
and environmental costs, which I am pleased to see the report says should be brought into transport policy and programme documents.
I return to the recommendation in paragraph 11, which I feel is central, and which, like my hon. Friend, I do not think the Department has sufficiently answered. To say that it has changed the tables a little does not go sufficiently along the way towards meeting the point made by the report and by my hon. Friend.
My report recommends a national transport authority to do the analysis. We must move towards a transport policy which enables the economic, social and environmental costs of each mode of transport to be thoroughly analysed and examined and the taxes, levies and duties on each form of transport to be adjusted accordingly. That is the only kind of transport policy which makes sense to me. The Department does not even seem to be co-ordinating those parts of the transport industry and transport expenditure for which it has complete responsibility. Separate sections of the Department are responsible for railways policy, road policy and waterways policy. My Committee report made the point that 40 per cent. of the investment submissions recently made by the British Railways Board would not achieve a 10 per cent. rate of return.
As a one-time member of the Select Committee on Expenditure, which examined the motorways and trunk roads programmes, I know that it was nonplussed at the way in which the Department seemed to be ranking road projects all over the country. When we examine the needless investment on motorways such as the M50 and the two-lane investment on the Watford stretch of the M1, we wonder on what scientific analysis or basis the Department ranks the road priorities.
We have now arrived at a significant point in the history of the Department. Under the Railways Act 1974 the Department has taken over responsibility for providing the track and signalling costs of British Rail, so that it is now responsible for both road and rail track costs. Although the Department is responsible for road and rail track costs—it pays for both—it still cannot work

763
out a rôle for the railways. It still cannot work out what kind of road investment programme we must have. In the meantime the poor old British Waterways Board is told that in respect of every investment which it makes—it does not receive a grant for track costs—not only must it justify the economic return on the projects for which it is making a submission but it must also obtain guarantees from the customers. At least let there be parity of consideration for the various transport modes before we commit ourselves to the kind of expenditure which is involved.
I wish that at least similar comparisons could be made between road and rail, because the Department is now responsible for both road and rail track costs. Unfortunately, since we do not have the same figures, we cannot even make the necessary comparisons which would enable us to decide whether the Department is apportioning expenditure between road and rail on an optimal basis.
Another crucial recommendation of the Committee refers to the need for an interurban directorate. When we examine the inter-urban or inter-city investment which is made in transport infrastructure we may come to the conclusion that one part of the Department does not know what the other part is doing. For example, between London and Glasgow British Rail runs an electrified service, while the National Bus Company runs motorway express services and British Airways runs a shuttle service. I accept that the Department is not responsible for civil aviation policy. However there are three competing modes of transport, all with different pricing policies and different investment strategies. Yet in these days we are supposed to cut back on public expenditure and to have a major "save it" campaign on energy.
There must be co-ordination in the Department. There must be a much more thoroughgoing analysis of the various modes of transport. I do not believe that the British Transport Commission's way of doing this is the best way. I do not believe that the Transport Act 1968 was the best way of doing it. As I said in my Committee's report, I believe that the task should be undertaken more properly by a national transport authority. Perhaps the Department does
764
not do that because spending on transport does not enjoy sufficient priority, or because the Minister of Transport is not a member of the Cabinet. Perhaps that is why we do not give sufficient priority to transport I investment or spending. Even if we decide that we cannot afford to give transport spending sufficient priority, we should at least lay foundations and plans against the time when the economy picks up and there is more transport expenditure. Even if we cannot afford to do so now, I suggest that we cannot afford to neglect future planning.
The report makes the point that there should be more devolution of local transport initiative to local authorities. I am pleased to say that that point is made in the May edition of Socialist Commentary. As a member of the Tribune Group, and as a writer for Tribune, I am not normally an admirer of articles appearing in Socialist Commentary. The piece appearing in the May edition of Socialist Commentary is by Councillor Jim Daly, the newly-elected chairman of the transport committee of the GLC, and makes a good point. It says that there must be devolution of matters such as pedestrian and zebra crossing decisions. The Minister of Transport should not concern himself with whether a road should have traffic lights or a pedestrian crossing. Those are matters which can be properly handled only at a local level by local authorities. I fully support Jim Daly's point that local transport initiatives and similar decisions should be handled at a local level, not by the Department and not by a Minister miles away from the scene. No wonder there is no transport policy when the Minister finds his desk cluttered up with decisions on pedestrian and zebra crossings. No wonder he cannot see the wood for the trees. It is time that local government formed this kind of policy and made these analyses.
Just as there appears to be no national co-ordination of our transport infrastructure or investment policies, there appear to be no local policies. I do not say that in a way which would blame the local authorities, because I do not think that in many cases they have been told what is expected of them. I sympathise with people such as Jim Daly who must take over the running of major transport undertakings. I sympathise with people

765
such as Councillor Stan Yapp, in the West Midlands, and anybody else who has the task of running a large metropolitan county council undertaking or a passenger transport authority. Many of those people are local politicians on county councils who were elected to power on transport-oriented tickets.
The Labour councillors of the Greater London Council came to power on the possibility of introducing a flat-fares scheme. In the West Midlands the county councillors came to power on the premise that it was possible to introduce a fares-free scheme. Many of those councillors were encouraged by the noises which then seemed to emanate from the department.
In those early years of 1973 and 1974 every encouragement was given to local authorities by the Department. The circulars flowed thick and fast. Local authorities were told that they must examine lorry parking, designated routes, discrete routes for lorries under the Dykes Act and trans-shipment depots. They were told that they must examine and produce detailed reports on almost every aspect of local transport policy. To many local authorities this was a big burden because they had never had to work out a transport policy before.
I speak as a Member for a constituency under Warwickshire County Council, which had never had a transport responsibility before. It only had a highways department. But it never had the kind of responsibilities now involved in drawing up a TPP document. So many of the non-metropolitan county councils under the previous encouragement of the Department went to town on transport and drew up impressive-looking and impressive-sounding TPP documents. They took on additional staff. They formed additional committees. They took over more offices because they had not sufficient accommodation. Some very ambitious schemes were put forward by them. Just as places like Warwickshire enthused about what the Department was saying, so also did places like Birmingham and Coventry. It was "all systems go". Now we are told in local government Circular 43/75 of April that nothing can be done unless it is viable.
We get some pretty severe reverses in many aspects of Government policy and 766
some severe reverses by prominent Ministers nowadays. I suppose that that is part and parcel of politics. But when all encouragement is given to local authorities, when all hints are given that they will have the initiative, that they can spend money, that they will need additional staff, for them suddenly to be told that they may have to make everything viable represents a considerable kick in the teeth to places like Birmingham and Coventry, and to places in Warwickshire like my own constituency.
This is the sudden volte-face that we have had by the Department. As I say, it may be that it is because it cannot see the wood for the trees. It may be that it does not realise the effect of its policies up and down the country.
It was not as if local authorities were given that much of a hint of what was to come. We had the letter from the Department to chief executives on 19th December last year. That even mentioned the concept of safeguard thresholds. Looking at the list of projects which would still qualify for transport supplementary grants, a gentle hint was given to local authorities that, although they might have to cut back a bit, nevertheless their higher priority investments would be safeguarded. But, although some hint was given of a cutback, still no hint was given of what was to be contained in Circular 43/75. It was accepted that they had to be nudged slightly about car parking. Nevertheless, generally speaking, the information in the letter was on a very waffling basis.
Then, quite suddenly, the circular 43/75 was issued saying that there was to be no real increase in transport expenditure for the next five years. It said that over that period public transport revenue subsidies had to be cut from £102 million to £50 million. It went on to underline that transport had to be made viable. This presented a very serious problem to authorities like the GLC and the large metropolitan county councils which hitherto had based all their transport assumptions on the basis that they would receive revenue subsidies.
Again, I do not know from where the Department gains its collective wisdom. But it is the case—and we have evidence

767
of it in this country and from the Continent and the United States of America——that one of the most significant causes of people ceasing to use public transport is the increase in fares.
Suddenly the Department comes up with the policy that public transport has to be made viable. But still there is no distinction in the Department's mind or eye between what represents an increase in real resources and what merely represents a transfer payment. In the advice which it gives out, the Department should make a distinction between those revenue subsidies which are merely transfer payments and those capital grant increases which represent increases in real resources.
I recognise that there is a need to shift the overall emphasis from revenue subsidy to capital grant. I do not dispute that. But the decision suddenly to tell authorities like the GLC and the metropolitan county councils that in future they will have to move towards viability in public transport now confronts these authorities with some of the biggest fare increases that they have ever been forced to consider.
This is the kind of policy which authorities are now having to consider. Fortunately for the GLC, it has now changed its policy and says that it does not believe in flat fares or a movement towards fare-free public transport. But what about all the other metropolitan county councils? Are all their policies supposed to change?
All this is because we have this major shift in policy in the Department. For an authority like the GLC, which was given £50 million—about two thirds of the TSG allocation this year—to keep down fares, suddenly to be told that that will be cut by half next year and that ultimately it will vanish, this imposes a major shift of policy, and once again it supports the recommendation in my report that initiatives like this should be determined at local level and not by the Department.
I end as I began. I feel, and have felt for a long time, that this report of the Expenditure Sub-Committee once more indicates that we must have a transport policy. As yet we do not have one. Once again the report points up the need for a White Paper on transport policy. We
768
have to know what the Government intend and what the Minister intends.
Even though we may not feel that transport should have priority over houses, hospitals and welfare services—and I recognise the priority that they must have—and even if we do not give transport that kind of priority now, we should be planning for the time when the economy picks up so that it may be given that kind of priority in the future. We cannot do that as long as we do not even compare different transport investments. We cannot do it as long as we have a Department hideously tied down by decisions about pelican crossings and traffic lights, and until we have a genuine devolution of local decisions to local people.
This is the case which has to be made, and once again I congratulate my hon. Friends and Opposition Members for providing a bit more ammunition to strengthen that case.
5.28 p.m.
Mr. Kenneth Lewis: I am not a member of the Select Committee which has produced these reports. However, I congratulate those hon. Members who serve on it. At one time I was a member of what was known as the Estimates Committee, which is now called the Expenditure Committee. I do not know when an estimate becomes an expenditure. But in those days we found that usually the estimate was way below what the expenditure eventually became. I am afraid that that is common to all Government expenditure whichever party happens to occupy the Treasury Bench.
This report is one of history. Time has gone by since it was printed. Still more time has gone by since it was discussed. We are in a new ball game. We have a new Government. We also have new scales of Government expenditure. We have a new Chancellor of the Exchequer, and we have just had a new Budget.
The reason why I decided to attempt to intervene in this debate was that, on reading the report, I recognised that it dealt with some of the expenditure which we discussed in the debate we had on the Budget. At that time, various hon. Members said that we should cut our expenditure. The Chancellor of the Exchequer

769
disagreed and said that we should wait until next year. Among the cuts suggested was expenditure on transport, particularly on roads. Therefore, I thought I should see what the report said about that.
The hon. Member for Nuneaton (Mr. Huckfield) and my hon. Friend the Member for Daventry (Mr. Jones) have indicated that there has been a stay on this expenditure. The Government have tried to arrest it somewhat in real terms by keeping it where it was in percentage terms. But in times of inflation it gallops up anyway. I do not know what the figures for road expenditure are at this time. The report says that expenditure on road maintenance was about £350 million in 1973–74. I should think that it might have another £150 million on it now. Looking ahead another year, it could be even more. Therefore, I believe that there should be a cut of one third on this. There should be an announcement to that effect very soon.
The report also states that total expenditure on roads—I presume that means the whole gamut in terms of national expenditure on motorways and the like—is three times £350 million. Therefore, if road maintenance costs are £500 million today, three times that amount would be £1,500 million for the whole of the road programme. So I would cut the whole by one third. There is an option to the Chancellor of a saving on the road programmes of about £500 million. Unless this is done by the Chancellor nobody else will do it.
The hon. Member for Nuneaton obviously thinks that I am proposing outrageous figures. This country is in an
outrageous state economically. Something must be done somewhere. The question is where it can best be done.
I do not blame the road organisations for pressing their interests. We know about vested interests and the pressures upon Members of Parliament and Governments from all directions. Those who are interested in the promotion of better roads—the AA or whatever, which do a good job—are bound to say that we must maintain expenditure on roads. That is their job.
In normal circumstances it would be right to have an expanding road programme, to have good maintenance of
770
our present road system, and to allocate reasonably good resources for that expenditure. But we are not in that position now. We must make heavy cuts in
public expenditure. We cannot avoid
facing priorities. Therefore, I suggest that this is one of the best areas where for two or three years there could be a standstill. I do not believe that it would make a great deal of difference suddenly. Indeed, it cannot be done suddenly. It has to be phased. That is accepted, because of what is in the pipeline. But we did it with the Channel Tunnel. We dug the hole half way and then stopped. Therefore, let us not pretend that, because we have started to build a road from A to B, we need necessarily finish it. We can stop it.
Mr. Leslie Huckfield: I am glad that the hon. Gentleman has referred to the Channel Tunnel, on which he knows I have strong views. Is he aware that some of the men who were allocated the task of digging that project are, on the latest available information, still digging?
Mr. Lewis: That does not surprise me. They are busy spending the money that the Government allocated last year and have not been able to pull back. Presumably they will continue digging the hole while the money comes in to pay the wages.
I do not accept that we need necessarily stop everything tomorrow. Nor do I accept that, because a road from A to B has been started, it need necessarily be finished.
In our present crisis situation I believe that there should be a traumatic cut in expenditure on the road programme. It would not have a devastating effect on our economy. It would not affect the lorries taking goods from the Midlands to ports in the East, West or South. I do not think that less maintenance on the roads for two years or so would have any effect on the mode of travel in a modern motor car.
My hon. Friend the Member for Day-entry referred to roads being widened by about 18 inches along many miles of their length. When I have seen such road-widening going on I have often wondered how much it was costing. What does it do for that road? It simply means widening the road by a couple of Feet and having to spend a lot of money on the

771
surface of the road which has been dug up to improve the paving.
A lot of this expenditure, which involves county and district councils I suppose—I do not know in which areas of local government all this comes—could be stopped for two or three years and it would have no positively harmful effect whatever. Eventually, a catching-up programme, if there is to be one, will take place when the country finds itself in a better position to pay out the money.
So, looking at the report and the figures that I have mentioned, I believe that it is vital to make a substantial, indeed a traumatic, cut in expenditure on roads.
The report also states that British Rail is supposed to provide us with a 10 per cent. return on investment. That must be a joke. We have been living with that target for years and have never got anywhere near reaching even 2 per cent., let alone 10 per cent.
I am glad that the Department has taken over the cost of the upkeep of British Rail tracks. I suggested that many years ago. I am not the only one who made that suggestion. Many other people have made it. We pressed for it when the Minister of Transport was Mr. Marples, now Lord Marples, but we were always told that there were reasons why it could not be done. It seems eminently sensible that, if the Government pay for the roads, they should also pay for British Rail tracks and signalling as that equalises the competition between the railways and the roads.
If the Government do that, they must go on from there and say to British Rail "We have taken that cost away from you. We now expect you to run a bus service, so to speak, on railway lines". That is what it is. It is just a succession of carriages pulled together. In the freight sense it is like a lot of lorries on a road except that they are wagons on rails. The Government could say "The people you are carrying in those carriages or the goods being carried in those wagons must be so rated that they produce a profit".
The hon. Member for Nuneaton rightly said that when British Rail and London Tube charges are put up people always say that they can no longer afford to travel by those modes of transport because they are too expensive. Only a minimum
772
number of people say that. I think that most people put up with the expenditure. If someone finds that it is costing him too much to get to and from work, he will go to the boss and say "My travelling costs have gone up. May I have a rise to make up for them?". That is what normally happens.
I am sure that the GLC handled the matter wrongly by deciding not to increase fares for a year or 18 months, because, when faced with an inflationary situation, the one thing that must be done with a public service is to make sure that the increases that are imposed are brought in year by year rather than have a gap and then present people with a whacking great increase. People do not remember an increase which they had to pay last year, but they do remember that they have just been asked to pay a whacking great extra sum of money for the service.
If British Railways are to be viable the Government as a whole, and the Chancellor of the Exchequer in particular, must impress upon them that that can happen only if they reduce their work force. British Railways have far too many people employed running the railways. In terms of increased pay which the unions are demanding and are now in the process of negotiating, British Railways should get rid of a large number of men because this would allow more money to be available in the revenue account to pay for the increases which the work force is demanding.
Mr. Frank Tomney: To my certain knowledge the NUR has reduced its membership by no fewer than 500,000 in the past 15 years. The railways are run on a shoestring from the point of view of the labour force, so that part of the hon. Gentleman's argument is wrong. No transport system in the world has ever been viable since 1880, and in that I include the system in the United States of America. British Railways have a commitment for no fewer than 300,000 new freight wagons. How does one deal with that in these conditions?
Mr. Lewis: I can only say that it would be surprising indeed if there had not been a considerable reduction in the

773
work force of the railways, bearing in mind the track mileage that has been removed, the number of stations that have been closed and the services that have been truncated in the past 20 years. Of course there has been a reduction, but it has not been sufficient. That is accepted by every expert who has looked into the railway system, going back to the report which Lord Marples initiated many years ago.
The report which we are debating today says that the investment programme for 1973–74 is £88·9 million, while for 1977–78 it is £171 million. I imagine that that figure of £171 million in terms of the present-day pound is nearer £300 million. What justification can there be for that kind of investment if we are maintaining the same ratio of men employed? Surely the reason for investment is to use less labour and more improved machinery, and so on.
Mr. Leslie Huckfield: I am grateful to the hon. Gentleman for giving way, especially as he is obviously enjoying himself. May I bring him down to a serious level of discussion? We all know, because we have constituency examples, of the number of trains that cannot be run because there are not enough drivers. We know that tickets cannot be sold at some stations and that some booking offices have to close early or not open at all because there are not enough booking staff. We know that at a number of stations tickets cannot be collected, even if they are bought, because there are not sufficient staff. Where is the overstaffing occurring?
Mr. Lewis: I can only counter that by saying that at many main line stations one sees a number of people standing around doing nothing. There are places at which tickets are collected though they need not be. One sees ticket-issuing machines as well as ticket collectors. Money is spent on improved machinery, but there is still a man to do the job. Every expert knows that there is a need for a slimming down of the work force of British Railways. The same comment applies to London Transport. On many lines there is no need to have tickets checked at one end and then again at the other.
774
I said that I should not speak for long, but I have been provoked on more than one occasion. I intervened in the debate only because I read the report—
Mr. Leslie Huckfield: When?
Mr. Lewis: — yesterday, and it occurred to me that we were dealing with history. The report deals with something that was considered two years ago The mood has changed, and so has the situation. I hope the Minister understands that in so far as we are debating this report we cannot discount the fact that the new economic situation has imposed upon us all a duty to make sure that we cut back on the expenditure that must have increased tremendously since this report was written. If there are to be cuts in expenditure, at least it would be better to make them here than on some other aspects of public spending.
5.46 p.m.
Mr. Nigel Spearing: I think that the interest in this debate is inversely proportional to the interest in the subject in the country. I cannot help feeling that the Environment Sub-Committee of the Expenditure Committee would have benefited considerably had it been able to receive evidence from wider sources than the Department of the Environment. This is a symptom of something that is wrong in this House, but I know that the procedure is shortly to be changed. I am referring to the notice that is given of the subjects being investigated.
The Expenditure Committee has a wide variety of sub-committees which go by the name of the Department to which they are allocated, but there is no clue to the matters under investigation. However, in a recent reply to a Written Question the Lord President of the Council gave me a list of all the matters being looked into by Select Committees, so newspapers and others can see and publicise what is being done.
Mr. George Cunningham: Does my hon. Friend agree that any self-respecting legislature, which this House is not, would take the obvious step of having its own Press Office, which would make a point of issuing information to the Press so that it would not have to rely on something

775
tucked away in an answer to a Written Question at the end of Hansard.
Mr. Spearing: There has recently been a slight improvement in the procedure. I understand that the Select Committee Office now issues to the Press, on a weekly basis, the items that are coming before Select Committees, including the Environment Sub-Committee of the Expenditure Committee. This information is published in at least two newspapers every Friday.
It is with a sense of shame that I say that until recently hon. Members had a better chance of finding out what Select Committees were doing the following week by looking in the Press than by looking at any official document published by the House. I am glad that a change is to be made. The Lord President of the Council has agreed that in the not-too-distant future the Order Paper will carry a list not only of the Committees that are meeting but also the subjects being investigated and the names of the witnesses for the day in question.
Had that procedure been followed when this Sub-Committee was meeting am sure that the evidence given to it by interested voluntary and other bodies would have made the report even more valuable than it is. I look upon this report as a good starting point for a future discussion.
The investigation into public expenditure on public transport track—because this is what this is all about—would have been helped if councils for inland transport, environment protection societies, conservation societies and the various railway invigoration societies had been able to put their views to the Committee so that it could cross-question the officers of these active groups. I very much doubt that these societies knew that the Environment Sub-Committee was investigating this matter. The evidence in the report is, I believe, that given only by the Department of the Environment, which sent the only witnesses to appear before the Committee.
A symptom of the difficulty which I have just outlined is represented in the emphasis which is placed on roads in Britain. Everyone knows my view on the EEC, but I would agree with some of my
776
Continental colleagues when they say that this country must be mad in the emphasis it has placed upon road transport over the last few years at the expense of coastal shipping, inland water transport and rail transport. Unfortunately that matter is not taken up in the Select Committee's report, and I suggest that the Committee might have addressed more attention to it.
There has been vast expenditure on roads of all sorts, and one of the reasons for that is that we have geared up our local government to do just that. I make no complaint of active borough engineers or the very large roads section in the Department of the Environment itself, which is self-perpetuating in its desire to improve roads and build new ones. When large numbers of engineers gather in one place they have to justify their existence. This is why the vast motorway box project in London was not only put forward but was nearly carried into completion.
I was a member of the highway and traffic committee of the GLC and of its successors, the planning and transport committee and the environmental planning committee of that body. I could see how these self-perpetuating professional men—and I make no complaint about their job—dealt with planning and engineering. The cancellation of the motorway box project was a salutary experience for this country and a victory for democracy at the ballot box. As one hon. Member has explained, it is sometimes a good thing to stop a road which has been begun.
Had the motorway box scheme been continued, it would have been proceeding at the time we entered the fuel crisis, with a marked diminution in road demand, even in London. The folly of the matter would have been clear. The irony of it is that we would now have been pulling down about 200,000 houses—I think that was the figure. Later this evening we shall be discussing the question of London housing. I hope that the Minister will pay tribute to the wisdom of the London electorate. I know that he has a strong interest in road transport, but I hope that he will agree that the electorate made a good choice. Our debate on housing would be even more poignant if all those houses were now being demolished to make way for a motorway.

777
When my right hon. Friend the Member for Bishop Auckland (Mr. Boyden) opened the debate I raised the question of one of the most extraordinary schizophrenic attitudes in the Department—the difference in treatment between the roads and the waterways. I initiated a debate in this House on inland water transport. I put a number of questions to which I received no ministerial reply. I am not surprised. Everywhere I go I am told that nobody in the Department of the Environment knows anything about canals and waterways. The Department may know something about water engineering, and it hands out plenty of advice on it. We have had a Water Act only relatively recently. But there seems to be a big gap in the knowledge of the Department on commercial water transport. That matter was referred to by the Select Committee, which in paragraph 13 recommends that canals should be eligible for transport supplementary grant.
I assume that there is a difference between grants for the maintenance or minor upgrading of existing canals and the repair of those which have fallen into poor condition, and capital expenditure on vastly improved or new canal track. Unfortunately, the Committee did not make that distinction in its recommendation. This will enable the Minister to give a typical off-the-cuff Department of the Environment reply that such a move would not serve any useful purpose. Nevertheless, everybody in the canal lobby is familiar with the argument concerning the South Yorkshire Navigation, where the British Waterways Board has applied for a capital grant to upgrade the canal. It has shown—and, as far as I know, no one has denied this fact—that if it were given a capital grant of around £3 million, and if that grant were given in the same way as grants are given for roads—that is to say, that there was no calculation of the return on investment and the British Waterways Board would not have to pay the interest—the likely income from increased traffic on that waterway would more than cover the cost.
The Department and Ministers lay down that with canals interest must be paid on the capital, and it has to be shown that increased tolls will cover that interest. That is an illogical arrange-
778
ment. That does not happen with investment in a new road. In the appendix of the report there is a complex computer calculation dealing with cost-benefit analysis, and so on, called COBA. There is no calculation there of a theoretical return. We do not put a turnipke at the end of a road and make people pay a toll for using it, so why should this approach be adopted for canals?
The GLC is at present considering a scheme for widening the Grand Union Canal in the Brentford area, but the Department has stated that a return on the investment must be calculated in percentage terms. When one asks why there is this distinction one is told that the board is not the common user. The canal system differs from the rail system, where British Rail owns the track and the vehicles. On the canals, however, it is not only the Waterways Board which runs vessels. In many canals and navigations there are other craft run by individual owners. There are individual private vessels which are akin to cars on the roads.
I submit, therefore, that there has been a great mistake in the past and that there never has been a justification for the distinction which is made. The Committee offered very good advice on this point. The Minister must now put up a very good case for maintaining the distinction which has always been made between road and canal or he must change his policy.
6.0 p.m.
Mr. Marcus Fox: I must be careful not to give the impression that I agree with the hon. Member for Newham, South (Mr. Spearing). The shock might be too great. I did agree with him, however, when he said that we have been rendered a service by having had the opportunity to debate this report. I must not range too widely over it or else it might be thought that the Government's White Paper has arrived and the Promised Land is with us. I am sorry that the hon. Member for Nuneaton (Mr. Huckfield) has left the Chamber—
Mr. George Cunningham: Everybody has gone.
Mr. Fox: Everybody apart from the dedicated few. I was about to praise the hon. Member for Nuneaton, a rare

779
event. If the two of us join in asking the Minister for a White Paper perhaps he will let us know when we can expect one.
There are always subjects that concern us more than others. Transport is a subject which deserves more consideration. When talking about transport we mean mobility and not just people travelling to work. There must be an acceptance that for some people travel represents an improvement in their environment. Some measure of support can be seen from this in the January public expenditure White Paper, which revealed that the substantial sum of just under £2,000 million had been spent on transport items. As my hon. Friend the Member for Rutland and Stamford (Mr. Lewis) has said, July 1974 is a long time ago. It is regrettable that events have overtaken this report.
I am pleased to welcome the hon Member for Nuneaton back to the debate. No doubt he will read my kindly reference to him in the Official Report.
The previous administration was responsible for changing the emphasis from road to rail, something that the majority of us accepted then. That move was not just as a result of the pressure of public opinion. We must remember that we then had a growth rate of 2 per cent. to 3 per cent. and that inflation was in single figures. Now we have no growth and inflation is of the order of 20 per cent.
The climate has changed. While I cannot go along with my hon. Friend the Member for Rutland and Stamford and agree to the massive cuts which he advocated I do say that we must accept, if economies are to be made, that no area of expenditure can expect to escape them. Not only must savings be made, but we must obtain the best value for money. Resources which are being switched to public transport must be examined in this light.
The Committee's report supports that policy. It is fair to look at what has been achieved and to ask what is the attitude of the public towards public transport. The reliability of public transport is still suspect. There is the feeling that it is only to be used when there is no other
780
alternative. It should be the other way round. Public transport should be the obvious form of travel for many people. I still believe that far too many people see the car as representing the only reliable means of transport.
Although I am not happy about the current situation, certain economic factors will dictate changes in such an attitude. I do not accept that Government reports and statements from the Department of the Environment are necessarily the tablets of stone from on high. I view with suspicion the recently-published report of the Government's Transport and Road Research Laboratory which suggested that, despite everything, car ownership and the use of cars is likely to rise to the end of this century at rates not far different from those anticipated before the energy crisis arrived.
I cannot swallow that statement. 1 have a feeling that recent events have given a further push to those people who are asking whether they can afford to run a car. There are a number of families who can afford to run two cars. The pressure must be even fiercer there. Hon. Members will probably have read an article in the Daily Mail yesterday which suggested—and the figures do not seem unreasonable—that it is costing over £1,000 a year to run a medium-size saloon. It must be fair to suggest that hiring a car for weekends or holidays might be a far more attractive proposition than owning one. I do not believe that people will cease to enjoy the convenience and flexibility which a car provides for leisure and holiday activities, but for many people some sort of change in the pattern of their daily lives is feasible.
I am certain that in future debates reference will be made to the report of the Committee. I congratulate the hon. Member for Bishop Auckland (Mr. Boyden) on the part he played and on the way in which he introduced the report. I wonder whether the word "discourage" in paragraph 5 is the right word. We would be making a mistake as politicians if we talked in terms of harassing the motorist. With events moving the way they are might it not be better to talk about making alternatives more attractive? There might be a public reaction to the other attitude.

781
Paragraph 9 deals with the transport supplementary grant. An important principle is established here. We all accept that the prime responsibility for allocating resources rests with the local authorities. There are many who believe that they should have more responsibility. One thing we all accept is that local authority expenditure should be carefully monitored. We must ensure that Parliament's wishes are not frustrated by the delegation of its functions to other bodies. I am all for delegation, but not at the expense of Parliament losing ultimate control.
As an example I cite the subsidies to public transport from local authorities. There seemed to be a certain conflict in what the hon. Member for Nuneaton said here. He appeared to be criticising steps that had been taken whereby transport authorities are being made to pay their way instead of fares being subsidised. I understood him to argue in his article published in Socialist Commentary that the level of the subsidies seemed to be more than is rational.
Mr. Leslie Huckfield: I know that the hon. Gentleman tends to be reasonable in these matters. Will he recognise that the point I was trying to make was that until recently the Department had taken a consistent line on revenue subsidies as opposed to capital grants? We now have had a complete change of face by the Department so that revenue subsidies are to be viable. It is that change of policy I am mainly criticising.
Mr. Fox: I accept the point and agree that there is nothing inconsistent there. I hope that the hon. Member is not withdrawing what he said.
Mr. Leslie Huckfield: No.
Mr. Fox: Paragraph 14 refers to parking. There are anomalies if we accept that we should discourage—I go back to that word again—people from bringing their cars into city centres. If we continue to provide free or cheap parking spaces, is the House right to say that a national parking policy is called for? I can see tremendous problems ahead if we say that this is a matter for Parliament and try to lay down clearly defined principles. I agree that park and ride is the secret. It is important that these parking provisions should be made before any
782
attempt is made to attract people back to public transport. Demand is always a good yardstick. We must be careful not to allow extra parking places to be inserted in planning permissions. There are many instances in planning conditions being imposed, making excessive provision for parking.
Mr. Boyden: One of the main points behind the Committee's recommendation was that local government expenditure on car parking was running at a high deficit. It was of the order of £10 million or more. The idea behind the Committee's recommendation was that the money should be brought into balance and that, with a general declared policy, the local authorities would be able to fit into the scheme.
Mr. Fox: I am sympathetic to the Committee's recommendations. That is why I made the point about cheap parking provisions. I would agree with the Committee's recommendation that a grant should not be given in that sort of instance.
I turn to the subject of canals on which I am sure there is agreement by all hon. Members. It seems strange that canals should be ineligible for grant. I do not see why any form of transport should be excluded if a proper evaluation is made.
Road maintenance has received a considerable amount of attention. The hon. Member for Bishop Auckland and my hon. Friend the Member for Daventry (Mr. Jones) mentioned this. The amount of £340 million is a great deal of money; it is a third of the total expenditure on our roads. I think most people would agree that there is concern over the way in which repairs are carried out. Certainly, we have not observed much efficiency in new road programmes. The length of time many of these job take is a frustration, to say the least, to the travelling public.
I am glad to note that the Committee referred to the report of the Marshall Committee. Whether its standards are high enough is open to debate. Certainly it is a matter of concern that many of the findings in that report have so far not seen the light of day. We have been told that the methods of evaluating maintenance on the economic side are not very well advanced. This is not very helpful for the future when we talk about

783
getting the best value for money. However, at least the Department of the Environment and local authorities are working together to ensure the maintenance of cost-effectiveness we hope for.
My hon. Friend the Member for Day-entry made a number of interesting remarks on the subject of roads. We all accept that we must have an effective road network to keep our lorries out of town centres and villages, and to help public transport perform its functions. The Minister for Transport—I am sure it was not to his liking—has presided over a 40 per cent. cut in the road building programme. At the same time it is only fair to make the point that, since 1970, subsidies to British Rail, in real terms, have risen by 126 per cent., with no visible sign of an increase in traffic back to the railways.
There can be no question that the road programme is vital. We could have a debate on this issue alone. I shall not quote from the report, but some valuable points were made, especially in paragraph 39. It is quite true that, by providing more road space and improved facilities, we can encourage growth of traffic, when that is not necessarily the object of the exercise. Therefore, we must take the view that a look at our motorway programme is necessary. The Minister suggested in his study group—we are talking about bypasses and other things—that selective improvements can achieve the same objective.
There is an interesting section in the report on investment criteria and transport co-ordination. It is a pity that time prohibits me from developing this theme because the word "misallocation" of resources is too weak. The word "waste" might be more appropriate. Whatever we call it, in a number of instances duplication and piecemeal allocation of funds have led to a situation that should not be tolerated.
My hon. Friend the Member for Aylesbury (Mr. Raison) introduced a debate on British Rail on 14th April. Therefore, it is not necessary for me to bring this into our present discussion. We all know that the subsidies amount to £450 million or £500 million. It is questionable whether a system that provides only one-
784
tenth of Britain's transport should receive more than half of what is spent on roads.
The report hardly touches on the central problem of public expenditure on transport, which is mainly the size of the railway deficit. However, I would congratulate our colleagues who have prepared the report, and I repeat that we look forward to a further debate when the White Paper is produced.
6.8 p.m.
The Under-Secretary of State for the Environment (Mr. Neil Carmichael): This has been a most interesting debate, although the attendance has not been as large as we had expected. I should like to apologise on behalf of my right hon. Friend, who has intimated his reasons for not being able to attend.
These reports are extremely valuable—more valuable now than they were when I first served on the Select Committee, which seems a long time ago now. In those days we could not tell anyone what the Committee was studying; it was a closely guarded secret. Expert witnesses were not called and no one could take part. Only when we were writing the report did I realise the sort of questions I should have asked the witnesses.
I expect that there are shortcomings in the methods of Select Committees. A great deal has been done by some of my hon. Friends to try to improve this. However, a great deal more needs to be done. The House of Commons may move rather slowly at times, but frequently—I am not being smug—we manage to arrive at the right results.
I congratulate my hon. Friend the Member for Bishop Auckland (Mr. Boyden) on his introduction of the report and on the commendations he has paid to the hon. Members on the Committee and to the Chairman of the Committee. The very fact that the Committee chose transport as a subject shows that it arouses great interest. From the correspondence we receive from hon. Members, there is no doubt that transport is an important issue. It should be an important issue if expenditure means anything. Last year public spending on transport amounted to £1,700 million. Private spending was very much higher, with individual spending amounting to nearly £6,000 million. I welcome the interest of

785
the Committee and of hon. Members in this subject.
I should like to begin by covering in a general way some of the points made by the Committee in its report and by hon. Members today. I hope to answer specifically some of the points made.
Transport policy has a simple aim, namely, to produce a fair and efficient system for moving people and goods around. The industry—both public and private—and the way it is financed are far from simple. In practice. whatever is attempted, there is always room for improvement. One of the most difficult problems is to achieve a proper balance of investment in the face of the various competing pressures.
The Expenditure Committee was concerned about the appraisal methods used for different investments. I share this concern. We must see that resources are sensibly used to achieve value for money. The nature and purpose of investment in railways and roads is somewhat different. The inter-urban road programme consists mainly of extensions to our existing road system, with particular emphasis on taking through traffic out of towns and villages to minimise disturbance to decent living standards. Most road freight traffic travels short distances—93 per cent. goes less than 100 miles—and is in fairly small consignments. For such traffic rail is neither economic nor practical. Rail investment is largely to maintain and improve the existing system so that the railways can cater more efficiently with traffic which is suited to them—the long-distance hauls of bulk freight, heavy commuter flows and fast inter-city passenger traffic.
One of my hon. Friends suggested that I was too oriented towards the road lobby. I can assure him that that is not so. However, I do not find it easy when people in certain societies try to make the railways do jobs for which they are not suited. The outline which I have given is the job for which the railways are absolutely suitable. We should encourage them, in the interests of the nation, to do it more efficiently.
The financing and management of the different modes of transport are also different. The major road network is the direct responsibility of Government Departments and its improvement is fin-
786
anced from voted money. Except in a few cases, users do not pay directly for the use of specific pieces of road; they pay generally through taxation. The management of the railways, on the other hand, is the responsibility of the Railways Board, which has the primary responsibility for planning and development of the system. It is for the Government to decide how far the railways should be supported and how far the community should pay, through taxation, for benefits which are not reflected in charges to users.
The allocation of resources must reflect both what the country can afford and the Government's overall priorities. This has to be a fairly long-term exercise both for road and for rail because the schemes have long planning and construction times. The hon. Member for Daventry (Mr. Jones) mentioned an exhibition held in relation to a link road. Such exhibitions are excellent, but they extend the time required since many more alternative routes have to be examined. There is now 10 years between the establishment of the necessity for a road and its building.
The hon. Member for Shipley (Mr. Fox) spoke about the importance of the road programme, and I agree that we should not underestimate it. We spend about £1,000 million each year on building and maintaining our road system, one-third of it on our main inter-urban roads. Many people spend a good deal of their time asking us to stop. We should ask whether they are right. I am continually asking whether particular roads are necessary.
We all accept the need for a balanced transport system, but we must face the fact that 90 per cent. of all passenger transport and 85 per cent. of our freight travels on the road. It is no accident that people choose to spend large sums on their cars: they value their time and their freedom to move about. Freight, too, cannot all travel by rail and water.
I am sorry that my hon. Friend the Member for Newham, South (Mr. Spearing) feels that not enough is done for the canals. He should realise that over 50 per cent. of the expenditure on the canals is paid for by the Government and certain facets of canal operations are eligible for transport supplementary grant.
Mr. Spearing: Would not my hon. Friend agree that that grant covers largely non-commercial waterways and that my point about capital is related to viable commercial waterways, of which he knows of many examples?
Mr. Carmichael: If my hon. Friend will allow me, that is something I shall take back to the Department for another look, especially on the specific Yorkshire canal to which he referred. I wanted to emphasise that I am interested in canals, although they are not my chief responsibility in the Department. Because of the procedure of the House, I should like to deal with one or two points that have been raised.
My hon. Friend the Member for Bishop Auckland and others referred to the recommendations on parking and the transport supplementary grant. The Government accept this. It would not be possible to make such expenditure ineligible without legislation because car parking is specifically listed as eligible in the Local Government Act 1974, but Circular 43/75 on TSG, issued as recently as 4th April, said:
"…overall deficits on the operation of car parks will not normally be accepted for TSG."
The intention implied by the word "normally" was to allow for park-and-ride facilities, which the Committee recommended. This is a feature that we are anxious to encourage.
My hon. Friend the Member for Nuneaton (Mr. Huckfield) talked about the Department not having any national transport policy. Like the hon. Member for Shipley, I found some contradictions in my hon. Friend's speech. Although he said that there was no national policy, he then went on to say that local authorities and not the Government should arrange their own policies. He spoke at some length about the Department being terribly involved in what he considered time wasting on pelican and zebra crossings. He must realise that there is a general policy on these matters, which are admittedly time-consuming, but this was found to be necessary because it is very difficult for a local authority to resist local pressure about the granting of crossings. My hon. Friend himself has been to see me with at least one delegation to try to persuade the Department to change its criteria so that a crossing
788
can be put in his area. I think that we reached a compromise and got one out of two. There must be criteria or the local authorities would be under heavy pressure. I would not wish to depart from that policy.
My hon. Friends the Members for Bishop Auckland and Nuneaton stressed the need for a revised presentation of the roads and transport table to show whether the balance of expenditure accords with Government policy. This year's White Paper contains substantial changes in presentation. The Department's reply to the Sub-Committee's report agrees that the White Paper should so far as possible make clear the relationship between policies and expenditure, and improvements will be sought. Hon. Members will appreciate that the presentation in one table with accompanying test of forecasts of future expenditure of £9,000 million is a quite difficult matter.
I thank the Sub-Committee for having made this debate possible and hon. Members for taking part in it. I can assure them that the Department has paid a great deal of attention to the report and to this debate.
Question put and agreed to.
Resolved,
That this House take note of the First Report from the Expenditure Committee in the last Parliament (House of Commons Paper No. 269) on Public Expenditure on Transport, and of the relevant Government observations contained in the Fourth Special Report (House of Commons Paper No. 263) in this Session.

STATUTORY INSTRUMENTS
Motion made, and Question put forthwith pursuant to Standing Order No. 73A (Standing Committee on Statutory Instruments),

VALUE ADDED TAX
That the Input Tax (Exceptions) (No. 1) Order 1975 (S.I., 1975, No. 624), a copy of which was laid before this House on 16th April, be approved—[Mr. Dormand.]
Question agreed to.
Motion made, and Question put forth with pursuant to Standing Order No. 73A (Standing Committee on Statutory Instruments),

INCOME TAX
That an humble Address be presented to Her Majesty, praying that the Double Taxation Relief (Taxes on Income) (Indonesia) Order 1975 be made in the form of the draft laid before this House on 11th April—[Mr. Dormand. ]
Question agreed to.
To be presented by Privy Councillors or Members of Her Majesty's Household.

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

HOSPITAL SERVICES (COLCHESTER)
6.31 p.m.
Mr. Antony Buck: Mr. Deputy Speaker, I am grateful to Mr. Speaker for having allocated this Adjournment debate to me, thereby allowing me to raise the issue of the provision of hospital facilities in Colchester and the surrounding area. The debate on which we are now embarking is taking place at a different time from that which we had anticipated. In the normal course of events it would have taken place at the close of tonight's business. Had that been so I know that several of my hon. Friends from neighbouring constituencies would have been present. Owing to the alteration in time I know that the House will accept that they are prevented from being present. I am grateful to see the Minister of State in his place. I am also extremely grateful to my hon. Friend the Member for Reading. South (Dr. Vaughan) for being on our Front Bench to support me in this general discussion on the provision of hospital facilities in Colchester and the surrounding district.
Colchester is the oldest recorded town in the country but the length of its history is now liable to be matched by the notoriety of the saga relating to the failure to provide proper hospital facilities in Colchester and the surrounding district. When I became the Member of Parliament for Colchester in 1961 the situation was unsatisfactory. The situation is now appalling. Unless satisfactory policy decisions are made forthwith it is likely to become nothing short of scandalous.
In 1961 there was much talk in Colchester of the need for a new hospital. At about that time the then Member for Maldon, Mr. Brian Harrison, was chairman of one of the hospital management committees. In my early days in the House he talked about the need for a district general hospital. With me he campaigned hard over the years for such a hospital. I am grateful to him and sorry that he is not with us in the House.
In due course a site for the new district general hospital was decided upon and a starting date of 1972 was planned for the commencement of phase 1, although it was

791
hoped and anticipated that that date might be improved upon.
During the following years I tabled Questions, wrote to respective Ministers and had consultations with the appropriate local hospital and health authorities. I shall not weary the House with a detailed analysis of the many exchanges that I had over those years. However, perhaps it is worth noting that in October 1968 the then Minister of Health, Mr. Kenneth Robinson, visited Colchester and gave his views. He commented on the work being done in the hospitals in Colchester and said:
"Much of the work is done under great pressure in conditions which are less than ideal. There is a good deal of overcrowding but everyone copes astonishingly well."
There was then a good deal of overcrowding and there is even more now. Mr. Robinson then said:
"The only solution to the problem is well known—a new general hospital and the staff are looking forward to a new purpose-built building."
That is what the Labour Minister of Health said in 1968. He was right. He was right in commending the work which was being done under difficult conditions to provide those in my constituency and in the surrounding area with a health service of which we could be proud in spite of the difficulties. Perhaps I can add my congratulations to what is being done by the medical staffs—namely, the consultants, who have been under such difficulties and pressures lately, the nurses, and all those who are in the professions which are usually described as ancillary to medicine.
On Monday I paid a visit to the Essex County Hospital, the maternity hospital and the military hospital. As on earlier visits I found that they are providing a splendid service, but are having to do so under the most extraordinarily difficult conditions. The conditions were described as bad by Mr. Kenneth Robinson way back in 1968. Since then the difficulties have become even greater because of increased pressures of population.
I shall not weary the House further with an analysis of the exchanges which I have had. Suffice it to say that the need today for a decision to be made for us to have our district general hospital is paramount. I hope that the Minister of State
792
will be able to assure me that the funds will be made available for the start of the new general hospital. The site is available. the plans are ready, and when the funds are allocated the project can go out to tender almost at once. We are waiting for the off. The Questions which have been answered by the Minister of State's Department recently do not give me cause for optimism.
The situation for the future, if a right decision is not made, is alarming. I am not exaggerating. Let me give the House a short summary. First, there is the shortage of beds. By 1981, excluding the psychiatric beds, the bed need for the Colchester area is estimated at just over 2,000. The more precise figure that has been quoted to me is 2,015. On the present scheme of things the bed availability will be as low as 1,400. That is a shortfall of over 500 beds by 1981.
There is a crying need for an improvement in the position of the obstetric and gynaecology side of our medical services in Colchester. On Monday I visited the maternity home in Colchester. The staff has been working under appalling conditions and yet providing a magnificent service for a very long while. The new intensive care unit, which is at the top of the Edwardian building, is also doing magnificent work, but in completely inadequate conditions. On the maternity side the need for the new hospital indeed makes itself desperately apparent.
The surgical bed need by 1981 is estimated as being about 145. General medical bed needs by 1981 will be 253. The availability is now far less than those figures and comes, broadly, to the figures which I have just given as to the generality.
Where ever we look there is fragmentation of activities in the hospital group. There are wasteful journeys between hospitals. It takes 40 minutes to travel from some hospitals to the Essex County Hospital. This affects nurses' training and makes the process expensive, inefficient and unattractive. Also, junior staff have accommodation which is quite unsatisfactory.
The ophthalmic unit is contained in two rooms, and that again is a wholly unsatisfactory situation. All the way round one sees wasteful fragmentation in the group which makes the situation wholly unsatisfactory from the point of view of the

793
patients and the medical staff. That is the overall situation. Time is limited, but the situation is becoming desperate.
On top of all this we have no indication from the present Government whether we are likely to be given our general hospital—unless the Minister of State this evening makes an announcement that funds will be made available. In addition, we are told in the defence review that the military hospital at Colchester will be closed. That reverses a decision of the Conservative Government, a decision with which I was associated. There was a recommendation to close that hospital but the then Conservative Government decided not to go ahead with the closure. When I was an Under-Secretary of State for Defence I was given a guarantee by my governmental colleagues that there would be no closure of the military hospital in Colchester for at least 10 years. One might be forgiven the thought that the military contingent could have been given facilities in a new general hospital. A 10-year guarantee was enough. The military hospital was rightly described recently in the local Press as "a priceless asset". That asset is now, apparently to be lost.
I tabled a Question recently to the Secretary of State for Defence asking
"what alternative arrangements he is considering to provide cover for the Service men and their families in the Colchester area on the closure of the military hospital in Colchester; if he will state the earliest date which he has in mind for this closure; and if he will outline what consultations he has had, and what consultations he anticipates having, with the civilian medical authorities in the area, in view of the contribution which the hospital makes to the medical services available to the civil population."
The answer I received was as follows:
"Consultations with the Department of Health and Social Security are proceeding and full account is being taken of the contribution which the Colchester Military Hospital makes in respect of the civilian population. I cannot at this early stage say more."—[Official Report, 7th April 1975; Vol. 889, c. 353–4.]
That was no answer, and anyway there was no local consultation. Yet that is a hospital which is making an enormous contribution to our medical affairs, particularly in the sphere of maternity facilities and matters of that kind. The military hospital does a magnificent job for Colchester, not only in respect of its own Service personnel but for civilians too.
794
However, there were no consultations with the local medical authority, although I gather that some discussions are now to be started.
I wish to bring my remarks to a close by saying that there are many unsatisfactory features about the hospital facilities available to my constituents. On the question of isolation facilities, the situation is again most unsatisfactory since patients who should be totally isolated have to be accommodated in proximity to others not suffering from infectious diseases. There are no fit and proper facilities available in respect of the VD clinic. Again there is fragmentation, which is wasteful in many ways. Valuable equipment must be transported from hospital to hospital.
Mr. Kenneth Robinson was right to say that the only solution to the problem was a new general hospital. I am very suspicious of the priorities of the Labour Government—which can pour out hundreds of millions of pounds on buying into profit-making concerns and yet make no money available to ensure that the Government are doing the job they should be doing—namely, providing our citizens in general, and my constituents in particular, with a health service of which we can be truly proud.
The present situation is unfair on medical staff be they consultants, doctors or nurses. It is also unfair to ancillary workers and certainly unfair to my constituents as a whole.
I hope that even at this late stage the Government will have a change of heart and that we shall be given some hope by the Minister of State in his reply this evening. I hope he will be able to announce that he is now prepared to make funds avialable to provide what the former Minister of Health described as the only solution to the problem—namely, a new general hospital in Colchester for which the site is ready and for which plans have been made.
6.46 p.m.
The Minister of State, Department of Health and Social Security (Dr. David Owen): The hon. and learned Member for Colchester (Mr. Buck) has made me aware—indeed I was already aware—of the widespread anxiety which exists in his locality over the future of the district general hospital. He has also drawn

795
attention to the closure of the small military hospital earlier than expected, although no date has yet been fixed, because of the decision by the Defence Medical Services Inquiry Committee that there should be a reduction in the total number of beds in Service hospitals. That decision has been given urgency by the same financial stringency which has affected both the Armed Services and the National Health Service.
I recognise that the standard of provision in the area is not wholly satisfactory and that there is a strong case—and the hon. and learned Gentleman quoted Mr. Kenneth Robinson, the former Minister of Health—for new hospital provision. However, I must point out to the hon. and learned Gentleman and his Conservative colleagues that it is one thing to be in favour of public expenditure when it affects one's own constituency and another thing to be against public expenditure in general. There is a paradox in that situation. I think the hon. and learned Gentleman would be wise not to make too many party-political points since the hospital and capital development programme was brought to a savage and abrupt end in September 1973 with the then cuts.
The facts of life are that since then we have been living with a situation where we might have had to impose a complete moratorium on all hospital building starts. Because we have been able to obtain some extra public expenditure for the National Health Service in 1975–76 we have been able to lift the moratorium. As my right hon. Friend the Secretary of State for Social Services said in reply to a Question by my hon. Friend the Member for Preston, North (Mr. Atkins), we are now able to start a limited number of major building schemes in the health service and the moratorium will be lifted. We must recognise that there are many hospitals throughout the country which have not been included in the lifting of the moratorium, but the House will be aware of the financial climate in which we are now living.
It may help the House if I explain how the schemes were selected. In December 1974 we gave regional health authorities provisional lists of major schemes which we thought might be
796
started in their regions. Regional authorities were told of the criteria used in selecting schemes and the sum of money provisionally allocated to them. They were asked to consider the provisional selection and other schemes on the stocks and to let us know whether they wished to suggest any changes.
In considering the proposals, regional health authorities were subject to three limitations. The first was that any suggested variations should be containable within the sums provisionally allocated for 1975–76; secondly, that any alternative schemes should fit the national criteria; and thirdly, that we should have to look nationally at the financial implications of their proposals for future years.
The list of schemes which the Secretary of State announced on 15th April, which was Budget day, was affected by the Budget Statement in that we shall not be able to spend as much on the health service in the year 1976–77 as we had previously envisaged. It was obviously important to take this into account when projecting forward the schemes for 1975–76, since these will have considerable effect on 1976–77. In the light of that we were certainly not able to add any schemes to those provisionally selected.
We have already asked authorities to undertake a review of their forward plans, and we shall shortly be giving them planning assumptions for future years on which the review should be based. They will then be able to consider whether and when they can go ahead with the schemes which were not included in the announcement. As indicated by my right hon. Friend's statement, she is also willing to consider proposals by an authority to substitute an alternative to the listed schemes, providing the change can be accommodated within its allocation.
Turning to the situation in Colchester, the North-East Thames Regional Health Authority, while awaiting further guidelines and the planning assumptions to which I have referred, has already started consideration of a regional strategy in consultation with the various area health authorities concerned. I cannot, of course, anticipate what they will propose in the way of priorities over the coming years, but they face difficult choices. In the meantime, we have to look at a number of major capital projects in that region, and

797
outside it, not all of which can be undertaken in the immediately foreseeable future. I must make clear to the hon. and learned Gentleman that, whatever the needs of Colchester, many other areas and regions also have a strong claim. In my view there is an even more pressing need in East London, where Newham is still waiting its new general hospital.
Turning to the situation in the Colchester health district, the need of a new district general hospital there has been pressed and accepted for many years—and I will not deny that to the House today. There are three separate parts of this district, the first being Colchester and its neighbourhood, the second, the coastal strip and its hinterland, and the third, the area around Halstead for which health services have been traditionally provided from Colchester. The district also manages Notley Hospital, outside its borders, and provides psychiatric services for other districts and areas. Colchester is the natural centre for hospital services in an area where the population is rapidly expanding. It was expected that when the hospital was completed it would be possible to close three of the old hospitals, and there would have been some consequential savings.
It was only after lengthy discussions that the site of the hospital was selected. Although plans had been advanced last year nearly to tender stage, there were still important consequential matters to be settled, and it was not possible to enable the authority to go ahead until it was clear whether the scheme could be included in the 1975–76 capital allocations. It has not been possible to include it this year. Assuming that all had been well, however, the scheme could not have been ready before about 1980. Under the original plan this would have been a first phase of 748 beds, which included 360 general acute beds, 120 maternity and 80 pediatric beds, a mental illness unit of 160 beds and 160 day places, with some other miscellaneous beds, and out-patient, accident and emergency departments. The total cost, even at December 1973 prices, would have been over £14 million, spread over five years.
I must tell the House that schemes as large as this tend to attract high tender prices and management difficulties which often lead to contractors' claims. We
798
are beginning to favour contracts of a smaller size, but I agree that this particular scheme is not easy to break down into smaller effective parts. However, since the maternity accommodation which the hon. and learned Gentleman mentioned is needed very urgently, it may be necessary to look into the possibility of building this unit by itself first; but this is by no means an ideal solution.
I come now to the small military hospital which is to be closed in due course for reasons of economy. At present it takes as patients both Service men and their families, and, on recent figures, well over 1,000 National Health Service patients annually, constituting over one-third of the total. Nearly a quarter of the NHS patients were maternity cases. As the hon. and learned Gentleman knows, the Defence Department has entered into consultation with my Department, in view of the contribution which this hospital makes to the medical services for the civilian population of Colchester.
One possibility which is being canvassed would be to hand over the hospital to the health authorities as a going concern. Professional officers of my department have already visited the buildings, and the regional health authority, together with the area health authority, will also be making a full inspection during this month.
Mr. Buck: I heard of that rather belated visit being arranged only after the decision to close the hospital was made. If it is to be taken over, by the health service how is it to be staffed?
Dr. Owen: Its staffing problem will presumably reflect the situation in any large district general hospital if there are staff shortages in the district. I do not claim that it is an ideal situation. There are certain facilities, particularly the maternity accommodation, which it is felt would be very useful to the Colchester area. Until more progress have been made in discussions with the health authorities, however, it is impossible for me to speak about its staffing or whether it would be wise to take the hospital over completely.
Whatever may be the outcome of the negotiations over the future of the military hospital, nobody would claim that it could ever be a substitute for the new

799
hospital which has had to be deferred for the time being. I cannot say when work would be able to start, but in the economic circumstances which confront us there can be no general assumption that it is simply a question of retiming and that all building schemes eventually will go ahead as planned, albeit after some delay. The restrictions on what can be reasonably afforded in the years immediately ahead are such that the authorities inevitably will find it necessary in many cases to consider an entirely fresh approach aimed at securing the maximum benefit, in terms of service to the public, achievable within the limited foreseeable resources. I must tell the House that we shall have to be thinking in less ambitious terms as far as new building is concerned.
The Department, in its own work on designing standardised hospitals, is recognising that this is an important trend and one which I strongly support. It is aiming to produce designs which will provide, for the kind of sum which is likely to be affordable in any one district, the nucleus of a district general hospital which can grow and expand as resources or demand require. This would give the basis of a larger hospital in the fullnes of time when more funds were available. By this means we shall make our own contribution to the building programme in a way which seems to us entirely relevant to the future situation as far as we are able to judge it.
It all very much depends on the financial situation affecting the country. We have already had to make a decision that we shall preserve the revenue allocation for the year 1976–77 so that the National Health Service can keep pace with inescapable commitments and demographic factors. That has meant a further cutback in what we might have been able to put into the capital building programme. If, however, authorities can make a reduction in revenue and use that elsewhere by making sensible choices, we shall look very favourably on suggestions to switch from revenue to capital. But the prospect is not easy for the long term.
As regards Colchester, I would hope to have comments from the regional
800
authority on its overall strategy by the autumn and to be able to make decisions, or at least give some indication then. Certainly, I hope we shall know more about the military hospital and be able to reach a solution on that, as well as taking the maternity facilities into account as one of the most pressing needs. I shall certainly look into this, but I must tell the hon. and learned Gentleman that while I am not denying the need, and I accept that it is great, I do not think we shall get through the next difficult years by people trying to blame any particular party. We have tried to increase public expenditure on the health service at very difficult times and we have been attacked by Opposition Members for allowing public spending to increase. Had we not increased public expenditure, many hon. Members would be having no new hospital starts at all in their areas. As it is, many of them have had theirs postponed.
I do not deny to the hon. and learned Gentleman that there is a problem in the Colchester district, and to some extent this has been exacerbated by the problems of the military hospital. But given collaboration between the regional health authority and the area health authority, and with any help that my Department can give, we shall be able to make arrangements which will look after the hon. and learned Gentleman's constituents and health care in this particularly difficult area. If the hon. and learned Gentleman has any particular suggestions. I shall certainly look into them.
I welcome the tribute that the hon. and learned Gentleman has paid to the staff who have worked for many years under difficult circumstances at all levels—consultants, nurses, ancillary workers and those in primary health care. I hope that we shall be able to achieve a solution to the difficult problems, given the limitations of money, to ease their burdens and make it somewhat easier to cope with the problem.
It is in that spirit that I reply to the hon. and learned Gentleman. I know that my hon. Friend the Under-Secretary of State for Defence for the Army will take careful note of the points that have been raised in the debate. If necessary, I shall consult him about what we can do to ensure—
It being Seven o'clock, and there being Private Business set down by The CHAIRMAN OF WAYS AND MEANS, under Standing Order No.7 (Time for taking Private Business), further Proceeding stood postponed.

GREATER LONDON COUNCIL (MONEY) BILL (By Order)
Order for Second Reading read.
7.0 p.m.
Mr. Ted Graham: I beg to move, That the Bill be now read a Second time.
Representing as I do a London constituency, it is with a great deal of pleasure that I move the Second Reading of the Bill on behalf of the promoters. From time to time there is argument about whether the procedure by which we manage the money matters of such a large authority as the Greater London Council is a proper procedure, but hon. Members will know that the procedure has been the same for more than a hundred years.
The London Government Act 1963 lays upon the House the duty to have presented to it, thereafter to debate if necessary and then to approve the sums of money which have already been approved by the GLC and the inner London Education Authority. As always, the sums of money which we are considering tonight are for a 12-month period from April 1975 and for a further six months thereafter. Unless the sums which have already been agreed by the GLC and the ILEA are approved, serious consequences, if not catastrophe, will fall upon London and Londoners in September.
I stress that the global sums which appear in the estimates are sums which the authority contemplates will be required. The estimates have been carefully considered and pruned. They have been drawn up by the respective authorities and are presented to the House by the GLC. They are estimates of the money which the authorities expect to require for the provision of services and the performance of duties which have been entrusted to the GLC and ILEA by Parliament. Apart perhaps from arguments on one or two issues, we have little choice but to go through the procedure and accept the duty that has been laid upon us by Parliament.
The moneys are required to be raised not only directly for the use of the GLC and the ILEA but also for the use of other public authorities and for authorised purposes such as housing associations and

803
individuals in accordance with the Housing Acts. The purposes for which the money is required are specified in the Bill, and I shall briefly go through those purposes to refresh the memory of hon. Members.
The first main purpose is concerned with improving and acquiring refuse disposal plants and depots. I am sure that all hon. Members will regard that as a worthwhile purpose. The GLC plans envisage that by 1985 substantial overall improvements will have been made in the provision of depots and plant. I am advised that during the period we are discussing improvements are contemplated at Barnet, Bromley, Greenwich, Hillingdon, Hounslow, Kingston, Newham and Sutton. Compared with the previous year, the uplift is from £2,250,000 to £4,200,000. I am sure that hon. Members will agree that that is a modest uplift, in the light of inflation, and that the money will be well spent.
The estimates for road building and improvement show an uplift from £5,100,000 to £13,735,000. That is a substantial sum, but more than £3 million of it is for compensation and noise insulation works stemming from the Land Compensation Act 1973. I am sure that no one will cavil at money being raised for that purpose.
The Fire Service is a vitally necessary public service for all people who live in Greater London. The money is required for new sites at Upper Thames Street and Beckenham, the replacement of obsolete buildings, specialist appliances and improvements in the communications system. The uplift is from £680,000 to £1,100,000.
Next come the judicial services. The money is required for new court houses and probation offices at Merton, Enfield, Croydon, Newham, and Ealing, and for hostels for the rehabilitation of offenders. There is an uplift from £1,100,000 to £2,200,000—again modest sums for a worthwhile public service.
The items which relate to flood prevention will be of interest to the House. By 1973 London's interim defences against floods which cause damage to property and loss of life had been completed. In accordance with the Thames Barrier and Flood Prevention Act 1972, the GLC is engaged on a major scheme
804
involving the building of a Thames barrier at Silvertown with associated permanent bank raising. That work is now proceeding, and the uplift in respect of flood prevention is from £8 million to £13 million.
The estimates include contingency items, and this money will eventually be used for loans or assistance to the London boroughs, London Transport Executive, the Lea Valley regional park, housing associations and individuals. The uplift there is from £115 million to £125 million. For the moment I will not deal with the items in the estimates which relate directly to housing because they will be more properly explored later in the debate.
I conclude my presentation of the estimates by referring to the overall picture. The GLC does not escape the effect of general inflation on its costs, its ambitions and its programmes. The spiralling costs which it has had to bear and the increase in its wages bills show that the GLC is a creature of our time and, on occasions, of the will of the Government, which in effect is the will of Parliament. Many of the works that the GLC carries out are taken on at the behest, and sometimes on the instructions, of Parliament, and they put into operation vital Government policies. The recent Budget will undoubtedly impose further costs on the GLC.
The global sum indicates that the total uplift—despite inflation, the extension of services and the determination to provide sound value for money—has increased from £820 million to only £868 million. I believe that this is a modest uplift and that failure to secure the passage of the Bill tonight cannot but bring hardship not only to London but to the Londoners whom all hon. Members present serve. Therefore, I have great pleasure in moving the Second Reading of the Bill.
7.10 p.m.
Mr. Geoffrey Finsberg: I congratulate the hon. Member for Edmonton (Mr. Graham) on his debut as the spokesman for the Greater London Council (Money) Bill. This is clearly a pleasant departure from tradition, although it is interesting that Enfield appears to have had a lion's share of presenting the Bills, because the Greater London Council (General Powers) Bill

805
was presented most eloquently by one of the hon. Gentleman's colleagues. [Interruption.] The mantle may fall on the hon. Member for Erith and Crayford (Mr. Wellbeloved), although I doubt it.
I can put the hon. Member for Edmonton out of his uncertainty by saying that it is not the intention of Conservative Members to oppose the Second Reading of the Bill. We shall adopt a posture, similar to that which we adopted last year, of confining our criticism to particular aspects set out in the Instruction on the Order Paper.
I want to say a little about the Bill as a whole. It is obviously virtually impossible either for the hon. Gentleman or for any other hon. Member to give the detailed consideration to the Money Bill that Parliament should give when it is considering facilitating the expenditure by any local authority of this sum of money. I say now, and I shall say later, that the Greater London Council must be on notice that sooner or later it will have to conform to the rest of local government in this country and not have the privileged position of presenting its own Money Bill, which takes up parliamentary time. Moreover. very few of us are in a position to scrutinise the Bill in any sensible detail, because we have not been present at the chairmen's meetings which worked out the amounts. I have said from both sides of the Chamber that the sooner Parliament ceases to be a rubber stamp in this form, the better it will be for Parliament. It may present more problems for the Greater London Council, but it will, I hope, have other problems to contend with at a later stage.
I should like to say what an extremely helpful statement the House has had from Mr. Harold Wilson. Mr. Wilson should be congratulated on the detailed statement that he has submitted to us showing what the Greater London Council intends to do with the money, should it be granted to it. I think it is likely to get most of that money. The way that the statement has been set out is a model to any local authority. I am sure that the House would not wish the occasion to pass without saying that this statement, at least, has made its task somewhat easier.
The House is entitled to expect the Greater London Council to conform to
806
the wishes of Governments, irrespective of their parties, and where there is a national financial problem the Greater London Council, more rather than less, should frame its estimates in the light of the national financial situation. I say more rather than less because the GLC is coming to Parliament for blanket approval whereas local authorities have to go through a far more tortuous process.
Having looked through the Money Bill in as much detail as possible, I am not completely certain whether the Greater London Council can say not that every item in the Bill is desirable but that it is essential. There are many things which all of us in our local government reincarnations think are highly desirable, but there are times when they cannot be called essential, especially when the ratepayers of London have had the swingeing increase of 79 per cent. That point was rather well avoided by the hon. Member for Edmonton, who merely spoke of the amount of money that the Greater London Council was asking for by way of capital. However, the ratepayers have had the swingeing burden of 79 per cent. on top of 80 per cent. last year. Perhaps it is a pity that Greater London is not being given the chance of deciding matters today at the polls, as the metropolitan districts are, because otherwise there would have been no need for Dr. Haseler to resign—he would have found himself out, anyway.
The hon. Member for Edmonton must remember that eventually the sums which the GLC is asking for by way of capital will have to be repaid through the rates, and none of us knows what the rate of interest is likely to be. Certainly the home loan borrowers from the Greater London Council have been badly let down by the Minister, whom I am glad to see present. Building societies and those who borrow from them are being helped but, despite the protestations that the Minister is doing all he can, it is not a very good "can". Those who are borrowing from the Greater London Council, and many other local authorities, are paying substantially more than those who are borrowing from building societies.
The Minister for Housing and Construction (Mr. Reginald Freeson): Would hon. Gentleman care to develop the point that he is making? Is he suggesting that

807
more public money should be made available for this purpose?
Mr. Finsberg: It is for the Government, who made their pledge on which they say they won the election, to say why they have reneged on their pledge. Certainly it is not for the Opposition to say how they would do it, when they do not know how much money is left in the till after many people have got their hands on it and spent it rather rashly. When the time comes, the hon. Gentleman may expect a very clear statement from my right hon. Friend and others.
Mr. Freeson: When?
Mr. Finsberg: It is up to the hon. Gentleman. If he would like to advise the other Mr. H. W.—the Prime Minister—to seek a dissolution, he might get an early answer.
I turn now to the Bill itself. Looking at paragraph 5 of the statement which was circulated to us by the Greater London Council, I am not completely convinced that every single item in the estimates was scrutinised as carefully as I believe it should have been. As I said earlier, I do not know how the House can give a detailed judgment on this. I merely enter the caveat that I am not certain that the estimates have been looked at pro-properly. I do not know whether the House can tell that the Greater London Council budget is well or badly balanced, whether it has got the right or wrong priorities, whether there is enough emphasis on value for money—I doubt it—and whether there is too much emphasis upon the pursuit of Socialist dogma. I shall be developing later some of the statements made by the resigning chairmen, which certainly indicate that Socialist dogma has played a very important part—more important than priorities when one considers the ratepayers.
Surely a better, politically balanced budget would be smaller? Surely too much emphasis has been placed on subsidies and not enough on investment? If the Greater London Council had a politically balanced budget, it would help to reduce public sector expenditure borrowing requirements and achieve better social benefits.
As I have indicated, on the broad canvas of the Bill the Opposition do not
808
intend to oppose the need for the Greater London Council to have this money. Later we shall be asking for certain alterations. But the whole House—under either Government; and Ministers must have been equally embarrassed—is not able to have the full facts of the Greater London Council thinking—if there is any—on the make-up of the Money Bill.
For all those reasons we shall allow the Second Reading to go by, but the Greater London Council must at some stage expect a more difficult passage. I hope that the time will come when it will not be able to have such an easy ride as this House in the end has to give it, because the House cannot—as the hon. Member said in his penultimate words—in the end take the responsibility of withholding from the Greater London Council the money it needs. In my view the method is wrong, and the sooner it is changed the better.
7.20 p.m.
Mr. George Cunningham: The last time a GLC Bill was before us just six weeks ago—the General Powers Bill—I severely criticised the GLC's housing mangement for its incompetence and administrative inefficiency. I do not take back a word of what I said them. Indeed, I have a few words to add. Many of the complaints which I made then, in general and about particular cases, I could reiterate today. I could say that not a thing has been done about many of the individual cases since I raised them in the House six weeks ago.
I make no apology for referring to individual cases. In particular, some of my constituents on the Bemerton Estate in South Islington are still suffering a severe danger to public health through the failure of the GLC office to deal with the problem of sewage which is coming up through their kitchen sinks. I make no apology for going from the high finance of the hon. Member for Hampstead (Mr. Finsberg) to the sewage coming up through the kitchen sinks, because a local authority which cannot stop that happening probably makes a muck of other things as well.
The GLC had better get that fixed really quickly, otherwise I shall take more direct action than raising it here in the House. The GLC officials who are listening to the debate will recognise the case

809
I am talking about. I seriously considered trying to block the passage of this Bill. At the end of my speech on 13th March I said:
"I intend to use the next opportunity when a GLC Bill comes before the House not just to require that it should be debated but to do my very best to ensure that it does not pass until there is a reduction in this kind of grievance."— [Official Report, 13th March 1975; Vol. 888, c. 912.]
There has been no reduction in that kind of grievance. The most serious of the grievances that I mentioned then have not been dealt with. My request to pay a visit to what I hope must be the most incompetent of the GLC's housing management offices, that in Chalton Street, not only has not been dealt with but has been totally ignored. The request was made in a letter dated 18th March, shortly after our previous debate.
If my vote is needed to pass the Bill tonight, it will not be available. Unfortunately it will not be needed on this occasion, but there will be other occasions.
It is not right that the GLC, which depends upon the House for the passage of this kind of legislation, should deal with the specific complaints of hon. Members in this way. The hon. Member for Hampstead said that it was untidy, illogical and altogether unsatisfactory that the GLC alone among local authorities had to come to the House, usually twice a year, with this kind of Bill. Of course it is unsatisfactory, but as long as there are thousands of my tenants suffering from the administrative incompetence of the GLC I should prefer it to have to come to the House, so that I have an opportunity at least to air those grievances and, in the not-too-distant future, to do something more than simply to air them.
I want to raise two other issues which I believe are relevant to the Bill, which contains provision for providing money for housing associations. My point relates to the rents which housing associations are required to charge because they have received assistance from public authorities. I am glad that my hon. Friend the Minister responsible for that subject as well as for dealing with the GLC is present.
As a general rule, housing associations in receipt of public assistance in that way
810
are required to charge fair rents. My understanding, confirmed in a letter from my hon. Friend the other week, is that a housing association is required by the Department to charge fair rents in respect of any dwellings for which it has received housing association grants. I believe, however, that many associations think that they are required to charge fair rents for other dwellings as well. I hope that the Department of the Environment will clear up the point. There is a discrepancy between the Housing Act 1974, which is in very general terms, giving power to the Minister to take decisions, and, on the one hand, the circular issued by the Department, which creates the impression that housing associations must charge fair rents for all their dwellings, and, on the other hand, the letter I received from my hon. Friend, which seems to make it clear that they are required to charge fair rents only in respect of those individual dwellings which have been the beneficiary of housing grant.
I believe that many tenants are paying fair rents unnecessarily. I think particularly of the tenants of the old-fashioned housing trusts, which frequently did not borrow money to build but saved it until they had enough to build without borrowing. For the purposes of balancing their books, housing associations do not need to charge fair rents, but some of them think that there is a technical obligation to do so and, as a result, they are charging higher rents than would otherwise be necessary.
I also question whether it is right for my hon. Friend to use his powers to require fair rents to be collected at all. A fair rent is one which should generate a slight profit, a rent appropriate to a private landlord. Therefore, in the case of a housing association, which should not make a profit, there should be a provision that it charges fair rents minus X, X being the deemed profit element. I saw my hon. Friend's little smile when I said that, and I know he may say that fair rents do not generate a profit. That entirely depends on what the owner paid for the place. He should have paid such a price as will generate a profit with a fair rent.
The second subject I want to mention is the London rate equalisation scheme.

811
Unfortunately, when the subject is discussed there are nearly always a majority of outer London representatives present, as there are tonight. There is a severe difference of interest on the subject between inner London and outer London Members. It is our money that the others are taking from us. The inner London case is not sufficiently often put, and it is usually unsuccessful when it is put.
Hon. Members may have great difficulty in laying hands on a copy of the current London rate equalisation scheme. I am not sure that it can be done. So far as I know, it is not published in any readily available document My hon. Friend is authorised by the London Government to make such a scheme. I under stand that it is mandatory. It is not something that the London boroughs are free to reject. But it is very difficult to lay hands on the details of the scheme.
In the past couple of years a great change has been made in the scheme, with the result that there is now a simple shift from the inner London boroughs, those covered by the ILEA area, to the outer London boroughs. The inner London boroughs now pay over the equivalent of a 2½p rate to the outer London boroughs. The result is that my very deprived and needy borough of Islington is paying over money to Bexley, Richmond, Croydon and so on, a situation which on the face of it seems to be highly questionable. I thought I saw the hon. Member for Ealing, Acton (Sir G. Young) denying that. If he wishes to set me on the right path. I shall give way to him.
Sir George Young: If the hon. Gentleman says that his constituents in Islington are subsidising my constituents in Ealing, he is very much mistaken.
Mr. Cunningham: The hon. Gentleman will perhaps agree with me if I put the case more factually. There is a transfer of money from the ILEA boroughs to the outer London boroughs. That is expressed as the equivalent of a 2½p rate.To give an example, in the case of Islington that means about £1 million. That amount will go into the pool from Islington and will be distributed among the outer London boroughs according to
812
a formula which takes account of deficiencies.
Mr. Norman Tebbit: As a Member of Parliament representing a London borough which is technically outer but stretches virtually to the inner city—Waltham Forest—I have a certain amount of sympathy with what the hon. Gentleman says. Would he not be more accurate, however, if he said that it was primarily the ratepayers in the City of London rather than those living in Islington who were providing this money? My constituents, rather than those of the hon. Gentleman, provide the money which moves out.
Mr. Cunningham: Let us take it a step at a time. The transfer is from the inner London boroughs as such. The hon. Gentleman says that there is another consideration which makes up for that which I have mentioned. A subsidy—in the case of Islington, £1 million—goes to the outer London boroughs. There is a slight preference for those outer London boroughs which have inner London characteristics. I think that four of those receive an especially high allocation of such funds. On the face of it, it is preposterous that a borough such as Islington should contribute to Richmond, Bexley and Croydon.
The justification that is advanced for this otherwise incredible arrangement is that the inner London boroughs, simply because they are in ILEA, have the advantage of having their education costs, which form a large part of local authority costs, subsidised by the extremely high rateable values of the city of Westminster and others. The city of Westminster forms a large part of this.
In this country there is a system whereby we charge a rate over the whole of the area which the authority covers, while the GLC precepts, the ILEA precepts and the Home Office precepts for the Metropolitan Police also cover that area. That is odd because all those areas are different. If we had started from scratch, we would never have devised such a scheme. As long as we have such a scheme, however, the natural course is that ILEA should spread the burden of its costs according to rateable values throughout its area, which is exactly what happens now.

813
We do not argue that Finsbury is subsidising the rest of the borough, although in a sense it is, because the rateable values are higher there. We say that because they are all within one borough we must apply the rate equally to the rate values in the whole area, and that we must do the same with ILEA, with the GLC and with the Home Office police precept. I see no case for applying those rates and precepts and saying "This produces a distorted situation which would not exist if ILEA did not exist and, therefore, we shall take money from the inner London boroughs and give it to the outer London boroughs". After all, we in the inner London areas have high rateable values compared with the outer London boroughs. But, my God, we have problems which are out of keeping with those of the outer London boroughs.
The needs element does not take account of the great needs which are concentrated in the inner London boroughs. I therefore hope that by next year the inner London boroughs will come together and will argue that there is no need in future for any London rate equalisation scheme. The rate equalisation needs element and the like is a job for the rate support grant. Perhaps the Layfield Committee will come up with a much better way of doing all this. Let us therefore wait for Layfield. I do not think that there is any case for anticipating that by adding to a national scheme of transfers another one especially directed to London, which takes account of different resources but does not take account of the different needs of the various London boroughs.
7.35 p.m.
Mr. Neil Macfarlane: Many of the items listed by the hon. Member for Edmonton (Mr. Graham) when he proposed the acceptance of this Bill this evening are correct. However, there are certain aspects which the hon. Member for Hampstead (Mr. Finsberg) highlighted, which we seek to amend.
There is one stark feature in tonight's debate which affects all Members of Parliament representing the greater London area. I say that because that is against a backcloth that London is in a deep financial crisis. I do not believe that any hon.
814
Member seriously doubts that that is, alas, the unfortunate situation. Some of the serious aspects will have to be discussed at some length, perhaps outside this Chamber. But at the moment I think it is right that we should discuss some of the problems which exist and which I believe will cause many problems to the Secretary of State for the Environment, to the Treasury and to every person living in this capital city.
This Greater London Council (Money) Bill is the annual ritual by which Parliament authorises GLC expenditure without the need to obtain ministerial consent on each occasion. I think that perhaps the London Government Act 1963 requires amending urgently so that the Government can begin to play a far more executive role in the needs of London. I hope that London will be worthy, in view of the traumatic events of the moment, of the title of the greatest capital city in the world. It has held that title for a long time. However, I believe that all hon. Members must be concerned at the warning signs.
I suppose it is not outrageous to say that London could become another New York—in other words, flat broke, seemingly ungovernable and perhaps the graveyard of several ambitious politicians currently working there.
I should like to see the Department of the Environment take over direct responsibility for London, and with these huge amounts of money which are currently to be voted. The Treasury must take a closer look at this if public expenditure is to be seriously cut, which is obviously what the Chancellor is keen to see. I do not believe that the Evening Standard banner of Wednesday 23rd April was an exaggerated piece of journalism when it said
"London on the Rocks—Housing, Transport in deep trouble—Rates, Rents and Fares Crisis".
That kind of headline reflects the seriousness of the situation in London in 1975. It reflects the 20 per cent. inflation growth rate experienced by this country. It has produced a marked growth of consternation amongst our constituents and throughout all the London boroughs. There is an appalling scene when we see the lengthy list of items which create a loss-making situation for the taxpayers in the past financial year.

815
Looking at the system of fares, in this financial year the Greater London Council is spending £79 million from the rates on keeping fares down, in addition to a £53 million Government subsidy. There can be no doubt that last year's window-dressing between the February and October General Elections, when a freeze on fares was ordered, was largely responsible for the near financial disaster. With inflation running at 20 per cent., it is likely that after the county elections taking place today fares will be increased substantially. Despite the massive injection of ratepayers' money to subsidise the low fare policy, last year's deficit ended a run of four years of profit making.
As regards housing, it is likely that council housing rents must be doubled over the next two to three years. However, the serious argument which I hope will be answered by the Minister this evening is "Why does the GLC accept the huge rent arrears of council house dwellers?" We understand that in March of this year 69,000 council house dwellers owed the massive sum of £2,216,000, so that the responsible occupants of council houses who pay their rents and rates regularly pay for those irresponsible people to take a free ride. In April 1973, when Labour took control of the Greater London Council, rent arrears totalled £900,000. Once again it looks as if last year's election window-dressing held back normal rent increases. What is more, the Labour majority on the GLC knows this to be the case, and that is one of the reasons for the recent spate of resignations and sackings which have plunged London into further turmoil.
Apart from hitting the cash flow of the GLC, these huge rent arrears prevent other council housing development plans proceeding, and in some respects it affects the programme for building new homes. At the moment, we know that the GLC could build some 50,000 homes. It has enough land. But it is building only 5,000 a year. Yet this year the council intends to spend £69 million on the acquisition of private dwellings, which is a massive wasted programme of municipalisation. The £69 million is broken down into £30 million on new property and £39 million on existing property.
816
The other day I received from a constituent of mine a copy of a letter which he had received from Mr. A. D. Collins, the Director of the Valuation and Estates Department at County Hall. The letter is addressed to "The Owner". It reads:
"Dear Sir/Madam, as you will no doubt be aware, this Council has purchased Sutton Court, Beauclere House and the sites of numbers 6 and 8 Cedars Road and consideration is now being given to the redevelopment of part of this land.
I should be glad to know whether you would be interested in selling your property to the Council. In the circumstances, if you care to appoint a surveyor to act for you and agreement is reached with him resulting in the sale of your interest to the Council, in addition to the open market value of the property, you would be paid a surveyor's fee in accordance with Table 5(a) of the Royal Institution of Chartered Surveyors' Scale of Professional Charges, together with other items of claim which would normally arise from a compulsory acquisition.
Perhaps I may have your views at your early convenience."
This is the kind of profligacy which is going on at the moment. It is municipalisation for political dogma, and it is one of the reasons why we have to discuss these matters in open debate tonight. There is no doubt that the ratepayers of Greater London are angered by the profligacy being perpetrated by the Labour leaders of the GLC.
Only on Wednesday I heard the Deputy Leader of the GLC urging that the nation should have another festival based on the 1951 Festival of Britain. In principle, it would be a good idea to put the nation on show. However, at present there is not a great deal to crow about, and I hope that Mr. Harrington and his colleagues are not deluding themselves that London would be the best place for such a festival and that they would be the best people to organise it. If they are the result will be even more financial chaos than we have at present.
We have the deepest crisis of all time affecting our capital city, and it must be understood by the Labour Government that they have to act, and act speedily. The direction of London at present is disastrous. The Labour leadership at County Hall is unable and unwilling to act, and at this moment matters are worsening daily. Expenditure is unmatched by revenue, heavy borrowing is taking place, and drastic action is required to cut expenditure.

817
In my own constituency there are many examples where we should be happy for the GLC to make cuts in some of its schemes. For instance, the GLC has a proposal to widen the A217 from four to six lanes on the Sutton bypass at the Cheam Village crossroads. My constituents raised a petition asking whether, if the road was to be widened to six lanes, pedestrian "Cross Now" lights could be installed. 1 took the matter up with County Hall, and I received a lettter saying that the vehicle-turning ratio was not worthy of the installation of "Cross Now" traffic lights. I wrote back questioning the wisdom of widening the road in the first place. To date, I have received no reply. The scrapping of this and other schemes in my constituency could save £500,000 over the coming financial year.
It is clear that all is not well with the Labour majority at County Hall. Total disarray appears to be the order of the day. The next collapse is likely to come from the ratepayers themselves, who will not he able to pay their rates. There is no justification for them to think that they can break the law, but there is justification for them to think that total disaster lies ahead of them. It would be in London's interest if a coalition could be formed between the two parties in County Hall to see the GLC through until 1977, by which time plans might have been laid to trim down the massive bureaucracy represented by the GLC at present.
That is why all hon. Members tonight could take a tremendous step in the correct direction by voting in favour of the Instruction to the Committee and thereby giving a clear indication to our constituents that we are aware of their problems and that we are seeking to cut public expenditure substantially. Unless we do that, within six to nine months the Minister for Housing and Construction and his colleagues in the Department of the Environment will be forced to introduce urgent legislation to save London from bankruptcy. They will have to introduce a new Act to give greater autonomy to London's boroughs. Unless we get this right, disaster is what London will see.
7.47 p.m.
Mr. Graham: By leave of the House. Mr. Deputy Speaker, perhaps I might make a brief reply to this short debate.
First, I wish to say on behalf of my colleagues how grateful I am for the assurance from the hon. Member for Hampstead (Mr. Finsberg) that the Second Reading of the Bill will not be opposed. There may be differences on the details in the Bill, but I accept the hon. Gentleman's assurance that he recognises that we have no alternative procedural method in this instance. However, it was the London Government Act passed by the hon. Gentleman's own Government in 1963 which laid upon this House and upon the GLC the obligations which we are attempting to carry out at present. I am not competent to argue about better procedures, and the odd whiff of alternatives which floated across the Floor of the House did not achieve unanimous support. If the present procedure has its faults, we may be assured that any change will be challenged as being equally unsatisfactory.
In this short debate we have had the idetinfication of a direct interest from many hon. Members representing London constituencies in the affairs of London. I might say to my hon. Friend the Member for Islington. South and Finsbury (Mr. Cunningham) that I was as sad as most other hon. Members were to hear the details he gave of the way in which he had been treated. However, I have reason to believe that there are those listening to this debate who will circumvent the failure of correspondence to achieve the desired result and to give proper attention and respect to a Member of Parliament who has every right to he interested in the matters which my hon. Friend raised.
Mr. George Cunningham: I am grateful for that. However, the same people were listening to the last debate and precisely the same situation existed then. I hope that my hon. Friend will allow me in this intervention to make sure that the point gets across that what is needed—and I hope that having followed this debate my hon. Friend will support me—in Stranraer Way on the GLC's Bemerton Estate in South Islington is

819
urgent action, by which I mean within 72 hours, to make sure that sewage ceases to come up through people's kitchen sinks, and I hope that the two London evening newspapers will send people tomorrow to photograph the situation.
Mr. Graham: That plug for the circulations of the Evening News and the Evening Standard—
Mr. George Cunningham: "Plug" is the word.
Mr. Graham: That plug will come in handy in more than one way. We did not even get on to the barrier issue.
We have had a useful Second Reading debate. The points which have been made will have been well taken. Therefore, I have pleasure once again in commending to the House this Second Reading.
Question put and agreed to.
Bill accordingly read a Second time.
7.50 p.m.
Mr. Geoffrey Finsberg: I beg to move,
That it be an Instruction to the Committee on the Bill to reduce the total sum of £868,648,000 on page 9 of the Schedule by £83,000,000 by:

(1) reducing the sums mentioned in Item 10 of Part I of the Schedule (Page 6) as follows:

(a) in column 3, by leaving out '£ 187,700,000' and interst '£ 137,700,000'. And

(b) in column 4, by leave out `£86.350,000' and inserting `£61,350.000' and

(2) reducing the sums mentioned in Item 25 in Part III of the Schedule (Page 9) as follows:—

(a) in column 2, by leaving out '£60,000,000'and '£64,000,000' and inserting '£56,000,000' and '£60,000,000', and

(b) in column 3, by leaving out '£30,000,000' and '£32,000,000' and inserting '£26,000,000' and '£28,000,000'.

I suppose that one way of achieving what the hon. Member for Islington, South and Finsbury (Mr. Cunningham) wants is for no hon. Member to act as sponsor for any GLC Bill. That would rapidly bring the council to its senses.
Mr. George Cunningham: It does not need one.
Mr. Finsberg: I should be interested to see what would happen if no one were prepared to put forward the council's case.
820
The Instruction is drawn widely. Because it covers housing and deals with the contingency item, it allows the debate to continue to range widely. It also means that no one could accuse us of blocking the Bill as a whole.
There were three ways in which the Opposition, who were dissatisfied about certain aspects of the Bill, could have proceeded. There could have been a straight vote against Second Reading. That clearly would not have been intelligent. There could have been a reasoned amendment, but that would have had the same effect. The third, therefore, is the Instruction to the Committee. We have decided on this course because it enables us to concentrate on specific issues, having given fair wind to what I should call the major strategic plan which the GLC has put forward in its document.
The popular Press has referred to what it calls the budget of the Chancellor of London—a certain Mr. Illtyd Harrington. I recall that on 13th March the Patronage Secretary, who was as incensed as all of us about the words used by Mr. Harrington on that day, intervened and said:
"I undertake that in correspondence I am now having with Mr. Harrington I shall ask him to write a letter to the hon. Gentleman and, I hope, retract some of the remarks which he made in the article yesterday. The hon. Gentleman rightly said that he referred to 92 hon. Members, and that was a bit sweeping even for Mr. Harrington."— [Official Report. 13th March 1975; Vol. 888, c. 893.]
I should tell the House that I have the permission of the Patronage Secretary to say that, despite the sending of a second letter to Mr. Harrington, there has not been even the courtesy of an acknowledgment for either the Patronage Secretary or, indeed, hon. Members on this side of the House. That is precisely what that particular person thinks of Parliament. I should not wish to cross the Patronage Secretary. I am surprised that Mr. Harrington wishes to do so. I fear that Parliament will remain in the dog-house as far as Mr. Harrington is concerned. Indeed, it might have a spin-off.
It is a long time since any GLC measure has been before this House with such a blaze and fanfare of publicity in all the newspapers in the country. I suppose that it could be described as more than a little local difficulty. I made some reference to this matter earlier, as

821
did my hon. Friend the Member for Sutton and Cheam (Mr. Macfarlane). It is a fact—this needs to be examined—that two gentlemen in two major posts, the chairman of the general purposes committee and the vice-chairman of the housing development committee, who must have been highly thought of in the first place or they would not have been appointed, have resigned because they are dissatisfied with the financial conduct of the Greater London Council.
I doubt whether I could have found stronger words to use about the GLC than those of Dr. Haseler. He was very clear. He said:
"I intend to go to the back benches to offer constructive criticism of the GLC which I believe is failing London during a momentous financial crisis by indecisiveness, vacillation and compromise."
Explaining his resignation, Dr. Haseler said:
"There is mounting financial crisis in London and although the leadership understand it their reaction has been too slow and too late. They should have taken measures months ago."
Dr. Haseler said that he wanted to see a "slim-line" GLC. He said:
"County Hall should shed some of its huge bureaucracy."
I am sure that the hon. Member for Islington. South and Finsbury will say "Hear, hear" to that.
Dr. Haseler said:
"Some of its housing management functions should be disposed of."
I do not think that anyone on either side would describe them so bluntly, but borough councils are more capable of running housing estates than the GLC has ever proved to be under either party's control. I have maintained that in this House ever since I came here, and it has never been denied by hon. Members who understand London local government. It has never been a party issue. We all know the inefficiency of the GLC housing machine. It is not only the hon. Member for Islington, South and Finsbury who fails to get sensible answers; it is virtually every hon. Member who writes.
Mr. Nigel Spearing: As the hon. Gentleman has made that statement, I should not like this opportunity to pass without asking whether he includes the Royal borough of Ken-
822
sington. From all that I have heard, there are defects in every housing department, and I think that that one is worthy of note.
Mr. Finsberg: Strangely enough no one has adduced individual cases, unlike the hon. Member for Islington, South and Finsbury, who has. The House can judge if cases are brought up. I am sure that there would be a suitable opportunity, perhaps through a General Powers Bill, for a clause to be inserted at the request of the Royal borough.
I have mentioned Dr. Haseler. I should like to give a quotation from Mr. Eden, the vice-chairman of the housing development committee. He said that the Labour leadership was "fiddling while London burns". I think he is perfectly right. It might, therefore, be better, as my hon. Friend the Member for Sutton and Cheam said earlier, if the GLC's chancellor spent more time putting London's finances right than thinking up grandiose new ways of spending the ratepayers' money with yet another Festival of Britain.
The monument to the late Herbert Morrison, whom many of us respected as a very great—perhaps the greatest—local government man, was somewhat marred because in his last days in power he appeared to be more interested in fixing the price of doughnuts for the Festival of Britain than many other items.
Mr. Freeson: Cheap.
Mr. Finsberg: The Minister mutters "Cheap". It is not, I pay great tribute to the late Herbert Morrison but suggest that he spoiled himself by that kind of action. Mr. Harrington cannot spoil himself by that kind of action.
Our main attack on the GLC's housing programme set out in the Bill is not on its new building—I stress that as vehemently as I can—but on the wasteful and doctrinaire policy of municipalisation which, unlike new construction programmes, adds not a single home to London's total housing stock.
In our last debate on this measure, which was, as it were, a dual debate because it was held on 20th May and further on 19th June, we had a very long and interesting speech by the Minister for Housing and Construction, who is

823
with us again tonight, in which he set out in great detail how the GLC was to spend its money on municipalisation. He rested his case—it is an arguable case; I am not disagreeing—by saying that it would be doing it strictly in accordance with Circular 70/74. The Minister went into great detail, as reported at columns 615 and 616 of Hansard of 19th June. The hon. Gentleman was quite clear. We did not disbelieve him because, whilst he is not always our favourite Minister, if he believes something he says it. However, we did not believe the information that was given to him by the GLC, and we did not believe, either, that, given the vast spending powers that were contained in the last Money Bill, the GLC would honour the criteria which the Minister had listed for us, and I shall come to that in a moment. We did not believe that the GLC would operate within the spirit of Circular 70/74, and we have been proved right.
Let me quote two examples. On 30th April 1974 the GLC purchased Rayleigh Court, Kingston-upon-Thames, at a cost of £255,000. All the flats were in good condition, and only nine of the 38 flats were vacant. The GLC is now negotiating to buy Hill Court and Emerson Court, Wimbledon, for about £250,000. Of the 62 flats involved, all of which are in good condition, only 15 are vacant. Those are but two of the examples that one could quote.
Clearly, the Minister is not prepared to be snubbed as he has been by the GLC, and the worm—the generic worm, the Department, not the Minister, as I am sure he will accept—has turned, and I should like to quote the letter from the Department dated 14th April 1975 to the Director of the Valuation and Estates Department of the GLC.
The letter says:
"Purchase of dwellings:

(1) Queens Club Gardens, Hammersmith.

(2) King's Court, Carmel Court, King's Drive and Dane and Empire Courts, North End Road, Wembley.

(3) Various properties in Longridge Road, Nevern Road, Earls Court Road, Philbeach Gardens.

I refer to your earlier correspondence regarding proposals for the purchase of the above properties under the provisions of Circular 70/74.
824
As you are aware, I have been unable to reply earlier in view of the Minister's interest in your request and his recent correspondence with Mrs. Dimson on the same subject.
I am afraid that on the information you have given us we do not think that acquisition should proceed on the basis you suggest. Requests for authorisations under Circular 70/74 have been very substantial; indeed, they have been so heavy that we are now having to examine"—
the operative word is "now"—
"requests critically to see whether they fall squarely within the categories defined in paragraph 30 of that Circular and to reject them if they do not."
That means that until then the assurances given to us by the Minister were only partly being carried out by the Department, because the letter says that it is only now that it is examining requests critically. The letter goes on to say:
"We realise, of course, that the GLC have their own Money Act and are of course grateful to your council for entering into the agreement whereby you come to us for our approval; but we do not think that the existence of these. separate powers enables us to approve acqlsitions by the GLC while turning down exactly the same sort of proposals by other housing authorities—and I am sure your council would not want it otherwise."
I am not so sure, but I am glad the Department of the Environment is. The letter continues:
"So far as the Queen's Club Gardens are concerned"—the figures are important—"I understand that 60 out of 556 flats are vacant and we would therefore be content for the GLC to acquire the empty flats in order to secure the opportunity for early lettings."
In that case there were 60 flats vacant out of 556, there were 9 out of 38 vacant at Rayleigh Court, Kingston-upon-
Thames, and 15 out of 62 vacant at Hill Court and Emerson Court. To put it bluntly, those should never have fallen within the strict definition of Circular 70/74.
Mr. Ernest G. Perry: The hon. Gentleman has given some interesting figures. I cannot recall the cost to the GLC of the purchase of the three blocks of flats which he mentioned. Will he give us the details?
Mr. Finsberg: I did give the figures.
The cost of Rayleigh Court was £255,000, and the cost of Hill Court and Emerson Court was about £250,000. The acquisition of the properties as a transaction was one thing, but I am trying to say

825
that that was outside the spirit of Circular 70/74, which the Minister commended to us when he spoke in May and June of last year.
Let me continue with the letter, because there are some other interesting figures:
"But although the conditions in the other flats"—
in Queen's Club Gardens only 60 flats were vacant out of 550—
"may not be good it does not appear that they are so bad as to fall clearly within paragraph 30 of the Circular and it is for that reason that we feel unable to approve the acquisition.
So far as the Bovis Estate is concerned we would again agree to the purchase of the empty flats but it k Jai from clear that acquisition of the remainder would be justified within the terms of the Circular
The same sorts of considerations apply to the properties in the Longhridge Road area."
Now comes the understatement of the year:
"We realise that this reply will disappoint you but we do consider that acquisitions which would not concentrate resources on the prevention of evictions, harassments and homelessness in the areas of more acute housing stress should, for the time being, be forgone."
I endorse every word of what the Department of the Environment said. My only regret is that these strict criteria were not insisted upon by the Minister at an earlier stage, because I am convinced that a number of acquisitions have taken place under Circular 70/74 all over the country where the correct procedures have not been followed and where the acquisitions have not fallen squarely within the point which the Minister rightly made. The Opposition would not object to acquisitions in the event of harassment, eviction or appalling conditions where landlords are not doing the necessary work. One hopes that there will be a strict application of the procedures in future, and this of itself ought to reduce the amount of money which the GLC is asking for in the Money Bill for this purpose.
Mr. John Page: I missed the date of the extraordinarily illuminating letter which my hon. Friend read. There has been a remarkable purchase in my constituency of 71 dwellings, only 19 of which are empty. This was approved by Mrs. Dimson on 3rd March. Was that before or after the letter?
Mr. Finsberg: That was before. The letter was dated 14 April and it was received at the GLC on 15th April—remarkably quickly. It was written a day before the Budget— intelligent anticipation.
I believe rumour has it that the GLC will be asking to reduce the sums in this money Bill. If it does that, so much the better, but the cuts then made should be in addition to those proposed in this instruction.
There are some fascinating revelations, and I ought perhaps to let you, Mr. Deputy Speaker, and the rest of the House, of course, into them. I have here a Press release No. 169 dated 30th April 1975. The heading is:
"GLC cuts growth element on housing programme,"
and it says:
"Sir Reg Goodwin,"—
a man whom we respect, and it is pleasant to have a statement from him—
"Leader of the GLC, said today:
'In view of the chronically heavy weight which interest charges are imposing on local government, the GLC's Housing Programme for this financial year 1975–76 will be trimmed by £50 million to about the level of our housing expenditure last year.
The consequences of inflation and high interest charges make an economy of this order to our planned programme essential if we are to protect the ratepayer, the farepayer and the rentpayer from having to pay next year the phenomenally high charges which this extra borrowing would entail.
The Housing Strategy Plan remains our firmly planned policy for the years ahead.' "
That is his direct quotation, and then there is an explanatory note with no attribution.
"The cuts will be made by restricting the amount available for home loans,"—
I would not have thought that was particularly sensible—
"reviewing the amounts to be spent on acquisition of sites and dwellings"—
precisely what the instruction is about—
"and examining the amount to be made available to Housing Associations."
in, I would have thought, clear contradiction of what the Secretary of State has been telling us about the need to encourage housing associations. It concludes
"New constructions will not be affected."
Another interesting revelation is that at a meeting of the GLC finance board

827
today the Conservative spokesman raised the question of this official Press release. The chairman and vice-chairman of that board, obviously both labour, were not aware that Sir Reginald Goodwin had made this official statement. This is the committee which decides on home loans. The meeting was interrupted for its members to take time off to read the statement. Does anyone need any further proof of the utter incompetence of the Greater London Council's "Cabinet" when the leader does not even tell his colleagues that he is authorising a cut in the bill that they have put their names to and which we are being asked to pass tonight'? I do not think that anyone in his right mind can believe that the GLC is efficiently run, and perhaps that is one of the reasons why its stock issue was so heavily undersubscribed.
The GLC should be concentrating on improving its own assets and putting into good order what it has. It should be lending more money to housing associations and to individuals to buy their own homes. Housing associations and individuals look after their properties very carefully, and the GLC does not.
I confess that my mind is still running back to what was said by the hon. Member for Islington, South and Finsbury. I cannot imagine how for months sewage could be coming up through a sink without someone serving a notice under the Public Health (London) Act or its successor. I should have done something if I had been on the local Press if I had been aware of the situation. I wonder whether the bowers contained in the Housing Act 1974, by which the court can compel a landlord to meet his obligations, could not be used against the GLC to put the sinks right.
I hope that we shall be kept abreast of this "Pearl White" saga and that we shall know within 72 hours whether anything has been done. If the hon. Member wants a bipartisan visit with photographers from the Evening News and the Evening Standard, I shall be glad to accompany him to these homes and perhaps even to take samples of the sewage.
The GLC therefore should be giving money to those who will look after their properties, and if it is to make the right sort of effort the housing associations
828
represent one of the answers to the problem. As my hon. friend for Sutton and Cheam said, the GLC already owns enough land to build about 58,000 dwellings. Its present rate of building is between about 5,000 and 6,000 dwellings a year. Those figures give an opportunity to examine the facts about the GLC's housing construction record.
Let us quote from Labour's manifesto for the 1973 GLC ejections. It is a gem worth repeating and noting.
"The Tory record on housing is lamentable. In 1972 the GLC set a target of 5,000 new houses less than the number of slums demolished and even that derisory figure was not reached."
The target set in the 1974–75 budget provisions was 8,250 a year, giving an idea of what it thought it should be aiming at. In fact, the number of starts in 1973– 74 was 2,512. During 1974, which was the first full calendar year of Labour control, the number of housing starts was 5,821, which compares with an average of 5,925 constructed during the five full years of Conservative control. However, of this 5,821 some 3,600 were made up of provisional tenders approved by the council in the last nine days of 1974. In many cases the tenderers had not even been informed, and the procedure was changed from the year before. In other words, some 40 per cent. of the starts were not starts at all but an administrative device to make the figures look attractive. The contention that many of these last-ditch tenders were approved against officers' advice has not been challenged.
Therefore with land for about 58,000 dwellings the GLC has enough for more than 10 years' housing programme at the current rate of 5,000 to 6,000 dwellings a year. Yet it wants to go on grabbing with sticky fingers more land just to lock it up in its bank. We all know that the local authorities are the biggest hoarders of land. Their procedures are too slow, and both major parties share the blame for this. No one has so far been able to tackle it, and I hope that the Dobry Report will be able to give some idea of how we can speed up these matters.
Let us consider how much all of this is costing. Current maintenance and management costs on a GLC dwelling average £200 per annum, and rent income some £250 per annum. Rent

829
increases of 50p a week as of next October, not April—which it should have been according to Dr. Haseler and Mr. Eden—will not cover increased costs. The point will be reached this year when it will be cheaper for the GLC to give its houses away to the sitting tenant.
No one has disputed the statement that rents currently do not cover running costs. The GLC usually points out, as was previously pointed out in connection with the prospectus for its last loan, which, as I said, was undersubscribed, that its capital debt is £1,936,848,000. That figure is amply covered by assets of 200,000 council houses. It is clear that to retain these houses is a liability and that sold on a selective basis they would ensure a flow of funds to sustain further housing activities. Some 3,000 of these 200,000 dwellings sold at £10,000 a time would represent a capital inflow of £30 million, but the GLC is so blinkered by political prejudice that it will not do this.
Occasionally we discuss the situation of the young marrieds, bearing in mind that it is not only the old who have to be considered. We need to keep the young married couples in London to maintain a balance in our population. and they are finding it difficult to find new homes because local authorities are acquiring any houses they can like magpies, which means that they do not become available to young marrieds in the normal market.
The case is made out clearly for all to see that the present direction of the GLC's housing policy, excluding its construction—because none of these proposals is designed to interfere with that— is a failure.
The second part of the Instruction deals with contingencies. I think that they are in line with common sense. Our proposals for 1975–76 reduce the contingency provision by about 7 per cent. and for 1976–77, which is the six-month hangover which the GLC always has, by about 10 per cent. I have made it clear that the GLC may well be asking the Committee to reduce the amount of money it wants. I am optimistic in that I believe that the hon. Member for Edmonton (Mr. Graham) might at some stage tell us that he is prepared to accept this amendment on behalf of the GLC. It is clear
830
that the words of Sir Reginald Goodwin were anticipated by my colleagues and me and should have been anticipated by any intelligent person at County Hall.
On 15th April the Chancellor of the Excequer said that he envisaged a cut in capital spending in the public sector of 10 per cent. in 1976–77. We do not yet know where the cut will fall. We are waiting to hear the details but I imagine that it will not fall on new housing construction. For my part I would be unhappy if it did. That means that it ought to fall somewhat more heavily, as a result of the area being smaller, on these acquisitions of unnecessary land going well beyond the 10 years that the Government talked about and the acquisition of these flat blocks, which the Department is stopping, only 10 per cent. to 15 per cent. of which are unoccupied. The way to achieve the capital spending cuts is by making a cut in contingencies. It may only be a paper reduction because of the historical record.
The hon. Member for Edmonton told us the purposes for which the contingency fund was used. May I enlighten the House about what has happened to the contingency fund? In 1971–72 there was a £15 million contingency provision. The drawings for that year were £0·51 million. In 1972–73 there was again a figure of £15 million for contingency provision and the drawings were £0·7 million. In 1973–74 the contingency fund went up to £20 million. Of that, £10,600,000 was drawn, and £10 million of that sum was for municipalisation by the new Labour administration. In 1974– 75 the £20 million of the previous year had risen to £50 million, of which £4·4 million was drawn. Yet this House was solemnly asked to believe that the GLC needed more than double the amount it previously asked for.
I do not know who does the arithmetic at the GLC, nor do I know in how much detail the committee chairmen examine it. In common with some other hon. Members, I have been a council leader and a finance committee chairman. 1 am not prepared to believe that any of us in that position—looking at the contingency provisions for previous years and seeing that with one exception less than 10 per cent. had been spent—would have allowed the contingency provisions to be even £50 million for this year, let alone £64 million. This is a nice, simple way

831
in which people put up figures which they know will never be spent. They can then say "We asked for £868,648,000 and—haven't we been good?—we haven't spent —60 million of it?" It is fraudulent to come to this House and say that this contingency figure is needed.
By no examination of the record can it be shown that the GLC has ever needed more than half. In the light of the Chancellor's firm direction to local authorities, how can the GLC imagine that this year it will be allowed to spend 20 per cent. more than it asked for last year?
I do not understand the methods used by the GLC. I hope that some of the stories we have been reading in the national Press and in the London Press, in which the Government and the GLC appear to be realising that London cannot do without the private rented sector, are true. I hope that the same can be said of the sort of stories attributed to Mr. Stutchbury, a distinguished member of the Labour Party—another of "Goodwin's Cabinet"—who said that it might be necessary to give financial assistance to the private sector to help it remain in existence.
I hope that the GLC is realising that it cannot do without the private rented sector. What it must do is to give a reasonable and secure return to the providers of such accommodation who apparently keep their property in better condition than the GLC, certainly in the constituency of the hon. Member for Islington, South and Finsbury. These providers must no longer be treated as social outcasts.
I hope that the logic of the arguments I have been seeking to put before the House is clear. The statement of the leader of the GLC and of the Chancellor add up to one thing—that the GLC knows that it has not a hope of getting this total sum this year. The Government will stop it. The GLC will say to the Committee "Please reduce the amount of money we have asked for." It would be much better and save a lot of time if the hon. Member for Edmonton were to be sent a little note telling him "Accept this." It might save the time of you, Mr. Deputy Speaker, and the staff of
832
the House, as well as hon. Members, who would be able to go home somewhat earlier.
What is clear is that the GLC has been practising a policy of doctrine and dogma. In housing as in much else there is no substitute for policies and realistic priorites. If Labour learns this, at least the ratepayers of London will be better off.
8.28 p.m.
Mr. John Moore: It is with great pleasure that I follow that outstanding speech by my hon. Friend the Member for Hampstead (Mr. Finsberg). I have seldom listened to such a shattering indictment of a complete loss of control in one of the major areas of government in our society. I had intended to concern myself specifically with the relationship of my constituents in Croydon to the GLC. However, my fundamental worries have been extended beyond that area by that impressive indictment.
I agree with the hon. Member for Islington, South and Finsbury (Mr. Cunningham) that when we are talking about a budget of £868 million it is extremely important for hon. Members on both sides to have some opportunity to question the validity of the expenditure of Greater London. I welcome the opportunity to do so.
We are being asked to approve, on behalf of our constituents, increases in the amounts being spent. Therefore, I must ask: is the GLC carrying out, without duplication, the strategic functions that it is supposed to carry out in regard to Croydon, Central? Before 1965 Croydon was a county borough and carried out its own strategic functions.
Therefore, I must examine whether the GLC is carrying out these strategic functions adequately. If there is duplication, it is clear that excessive amounts are being used than are needed.
As an ex-councillor who has sat on the council of the London borough of Merton and watched planning submissions go to the GLC again and again, I really wonder at the strategic nature of the GLC.
I should like to refer to two small and simple incidents that occurred in Croydon that might help us to understand the total absence of a strategic function. The first

833
is a highway problem in my constituency. At the bottom of Featherbed Lane in South-East Croydon there was, tragically, in November 1972 an accident involving a coach, unfortunately carrying handicapped children. The Croydon Council acted rapidly to propose minor road improvements and to introduce a pelican crossing. That happened in November 1972. This minor issue is still to-ing and fro-ing between the GLC and Croydon Council. It is absurd that a strategic planning authority is involved in such miniscule details.
Far more shocking is my second example in the planning field. It is an extraordinary example of the degree to which we are talking about detail, not strategic planning. In my constituency a miniscule site in Mapledale Avenue, covering 1·07 acres, is owned by the council. It was used in the war for allotment purposes and scheduled under the initial development plan as "allotment land". This land went into desuetude. In March 1973 the local council, seeking to build more houses in conformity with other houses in the area, submitted a plan to build on this land. As Croydon was no longer a strategic planning authority, it had to go to the GLC for a zoning change, as all of us involved in local council work know. Informal negotiations between the officers of Croydon Council and the officers of the GLC suggested that approval would be given easily. However, the members of the GLC rejected this application, not on zoning grounds but on the grounds that the density proposed for a site of 1·07 acres was too great. This happened in March 1973.
Since that time the issue has gone backwards and forwards between the local council and the GLC. Eventually, the local council took note of the Department of the Environment's Circular No. 142/73, which endeavours to streamline planning, because it was very frustrated —it wanted to build homes for people. It approached the Minister in August 1974. The Minister immediately—I thank him for this—told the local council that it was right. The GLC continued to object but its objection was not upheld.
This is a bureaucratic nightmare. What on earth do my constituents elect local government for if not to decide on sites of l·07 acres? Do we have to go through
834
two years of argument and negotiations, eventually obtaining the approval of the Minister, before we can overthrow this sort of nonsense?
I return to the question which I asked at the beginning. If this is the sort of detail we are discussing. why does the Croydon Council need the GLC? We should examine the relationship of the GLC with Croydon 10 years after Croydon became a London borough. Croydon has a population of 350,000. It did very well as a county borough. We should ask ourselves why Croydon is not independent. In 1975 its GLC rates bill was £5,890,000. Now, with massive economies, it is over £10 million. [Interruption. ]
An ex-Minister, the right hon. Member for Fulham (Mr. Stewart) points out that the changes were made by a Conservative Government. Some of us would like to draw attention to the fact that times do occasionally change. Some of us are willing to recognise the mistakes of the past. In local government, if a monstrosity is created which includes the London borough of Croydon, and I want to represent my constituents by changing it, I will try to do so. I do not want to be referred to 1963, 1953 or 1853,
What do my constituents get for this 80 per cent. increase to£10,584,000? On this subject, the GLC representative for the Croydon Central area, Mr. David White, wrote a public letter to my constituents, in which he gave some extraordinary answers. He did not say that the GLC was economising or that we needed to cut our coat according to our cloth. He said:
"The main reason for the rises, apart from inflation, is the failure of successive Governments to make available sufficient resources to meet London's needs."
After the damning indictment of my hon Friend the Member for Hampstead, he is saying that they need more money, not less.
Mr. White's final words to my constituents were intolerable:
"I have serious doubts about whether the present economic system is able to make the necessary resources available. It is for this reason that I regard as essential the transformation of our society from a capitalist one to a socialist one. The first steps towards this must be the bringing into public ownership of key sectors of the economy and a redistribution of wealth and power in our society. The question of the current rates

835
crisis cannot be divorced from this fundamental economic issue."
[HON. MEMBERS: "Hear, hear."] That sound of agreement from Labour Members shows the total irrelevance of that type of rhetoric to the rates bills being received by my constituents.
My conclusion is simple and straightforward. Croydon does not have a strategic authority in the GLC. I see no reason for it to be involved with the GLC. My constituents would be much better off if we were an independent borough again and did not increase the money spent by this profligate organisation.
8.37 p.m.
Mr. John Cartwright: Before seeking to follow the hon. Member for Hampstead (Mr. Finsberg) in some of his more detailed criticisms of the administration of the GLC. I should like to raise one particularly important local issue. This matter concerns also my hon. Friend the Member for Newham, South (Mr. Spearing). I refer to the Thames barrier, and particularly the question of safety during its construction.
I have had a number of meetings with Trinity House pilots working on the river who have expressed grave concern about this matter. They tell me that under the 1913 Pilotage Act, which, believe it or not, is still in force on the river, it is possible for a number of vessels, depending on size and location, to come up the river from Woolwich Reach without the advice, guidance and assistance of trained river pilots. Apparently, the qualification is of the vessel and not of the master. Pilots tell me that it is not unusual for a vessel to come un the river at some speed with a foreign master who has never been through the river before and suddenly to come to a line of buoys which reduces the channel to 400 ft. wide. This situation presents grave risks.
The Port of London Authority says that there is no cause for concern, because there is a barrier control which contacts all ships coming up the river in these circumstances. The only difficulty is that the control uses VHF radio, which is not mandatory on vessels. Not all ships using the river have this receiving equipment. Also, although understandable, it is not very sensible that
836
these broadcasts are made only in English. Foreign masters do not always have a good working command of English.
There is obviously a dangerous situation here. There is a risk of collision with the actual barrier works. It should be remembered that while the barrier is being constructed a large number of men will be working at the river level and in some cases even below water level. Since the channel will be extremely narrow during construction, there is also a risk of collison with other vessels.
I am told by the Department of the Environment that there are between 80 and 100 movements of vessels through Woolwich Reach every 24 hours. Not only that, but I am told that every day between 5 per cent. and 10 per cent. of the vessels using Woolwich Reach carry dangerous cargoes. They are carrying either petrol or dangerous chemicals. Between eight and 10 vessels a day ply through that dangerous stretch of the river, through all the construction works, carrying potentially dangerous cargoes. That might not be too bad on a bright sunny day, but it is much more hazardous on a dark night or in bad weather. It seems to me and to the Trinity House pilots that while the construction is taking place there is a strong case for compulsory pilotage arrangement.
I have put this point to the GLC at the highest level. I did so in February, and I received a courteous answer six weeks later. That is rather better than the performance of the GLC in other instances. Whoever is in control of the GLC, six weeks is not too bad. Sadly, the answer that I received referred me to the Port of London Authority, the Ministry of Agriculture, Fisheries and Food and the Department of Trade. I now have to plough through those bodies before action is taken on the question of safety while the barrier works are taking place.
I do not want to be an alarmist but it seems that there is a potential risk about which we should do something when people as responsible, skilled and expert as the pilots who ply the river say that there is a safety hazard about which we should do something. Given that situation, I should like to have seen rather more speedy attention to the problem than has so far been shown.

837
Having discharged my constituency duty, I turn to some of the other, rather broader issues raised by the hon. Member for Hampstead. I was sorry that in an attack upon the GLC's housing policy the hon. Gentleman did not refer except briefly and in passing to the GLC's "Strategic Housing Plan" for London. It is a very important document. Perhaps I should not be surprised that the hon. Member did not refer to the fact that the Labour Party in the GLC, together with the Labour Party in the boroughs, is attempting to work out a strategic plan for London's housing difficulties. When I think of the situation between 1967 and 1973, I recall that there was little sign of any strategic housing policy developing. The Conservative Party, which was then in control, wished to dismantle as much of the housing programme as possible. [HON. MEMBERS: "Rubbish."] Conservative Members may shout "Rubbish", but we can all recall the famous comment of the gentleman who now leads for the Conservative Party in the GLC that he wanted local authorities to get out of housing. We can all recall that, and it is on the record. Conservative Members should remember this before they start to shout "Rubbish".
Mr. Tebbit: Is the hon. Gentleman quite sure that the document which he held up so proudly has any validity after the latest outburst of feuding, fighting and squabbling in County Hall between his Labour Party colleagues?
Mr. Cartwright: That is a typical comment from the hon. Gentleman. I shall return to the document and say a little more about its present status and about some of the problems which I see for its future development. If the hon. Gentleman will be patient, I shall return to it later.
In discussing the "Strategic Housing Plan", I should say a word of appreciation for the work of Gladys Dimson. I was involved in a number of detailed discussions between the GLC and the London Boroughs Association. I have also seen Gladys Dimson involved in discussions at borough level on difficult housing issues. I put it on record that I have the highest admiration for the contribution she has made. I pay tribute to her understanding of local government and
838
her willingness all the time to seek to cooperate between the GLC and the London boroughs.
As a borough-produced local government man, I have always accepted that there is a need in greater London for an overall strategic housing plan. I do not believe that 33 sovereign, independent housing organisations at borough level can hope to solve London's overall housing problem. London is one city and not 33 separate units. Londoners do not often understand why there are different standards operating in different boroughs. Of course there are different systems of dealing with housing applicants in the different boroughs. We know from experience that housing progress varies very much from one borough to another.
It is a sad fact but true that those boroughs with the least problems make the smallest contribution to overall housing achievements in Greater London. It is also true that the areas with the biggest housing problems—the stress areas in inner London—are in a situation in which they cannot solve their housing problems by their own efforts within their own boundaries. That is quite impossible.
Therefore, we must approach the problem of the areas which are desperately under stress in the centre of the city by looking at London's housing problems as a united whole. The London boroughs two or three years ago set up the London Housing Office. That was an attempt to obtain co-operation at borough level to enable them to work together to overcome their housing difficulties. It was an imaginative concept which was sadly sabotaged by the fact that the outer London boroughs, which had available stocks and supplies of land and which could have made the greatest contribution towards housing desperately placed applications in inner London, sought not to join the London Housing Office and, indeed, played a great part in seeking to sabotage it.
I accept the strategic rôle of greater London as being imperative in tackling London's housing problems. There must be a GLC back-up on housing to tackle the areas which are too large for an individual borough to undertake, particularly redevelopment, and also to tackle situations when individual boroughs arc not willing to make their proper contri-

839
bution towards the overall housing needs of the city.
I hope that the new regime which may emerge in housing on the other side of the river will understand that this sort of approach can be carried out only by co-operation and that the boroughs are the primary housing units. There will be progress towards a strategic plan only if there is understanding and co-operation between the GLC and individual boroughs. I hope that the chairman of the housing development committee at County Hall will accept that the London Boroughs Association has a major rôle to play in securing that co-operation and will seek to involve the association in that sort of development.
The GLC has said that it is willing to transfer more of its estates to individual boroughs. I agree with the hon. Member for Hampstead that housing management is a local function. We all know from our constituency experience that mistakes and crises occur even in borough council housing. It is very much simpler and easier to deal with those matters by going to the town hall or seeing the chairman of the housing committee speedily than to have to go to the Greater London Council. This avoids people being pushed from pillar to post in trying to get something done.
I emphasise that housing management is very much a local function, and I hope that we shall see progress and development in the future transfer of housing estates from the GLC to those boroughs which are willing and able to take them over, but on a fairer basis than happened in 1969–70. What happened then was that the Greater London Council off-loaded its most difficult estates on to boroughs and gave them the task to deal with. This was what happened in my own borough.
Mr. Geoffrey Finsberg: I was involved in the details of the transfer. The GLC was trying to be fair. It tried to off-load part of the bad and to balance it with part of the good. There was certainly no wicked intention. It may have worked out badly in the hon. Gentleman's borough, but that was not the overt intention of the GLC.
Mr. Cartwright: I am always prepared to accept that there is good in anyone
840
and I certainly accept that point of view. In relation to my own borough, I would mention that when I went back to the GLC and pointed out the condition of one estate the decision of the GLC was to demolish it rather than hand it over to the borough council. That is an indication of how bad was its condition.
I agreed very much with one comment by the hon. Member for Croydon, Central (Mr. Moore) when he suggested that after 10 years there might well be a need for a review of the functions of boroughs and the GLC. That is a point which would command a lot of support after 10 years. I also agreed with the hon. Member when he said that those who were comparatively new to this House ought not to be bound by decisions taken by their predecessors 10 or more years ago.
All I would say, in all fairness, is that the same mistakes as were made in the 1964 reorganisation of greater London were made again in the 1972 reorganisation of areas outside London—[HON. MEMBERS: "Hear, hear."]—and that is less than three years ago. Now, my colleagues in local government outside London are saying to me the same things as we were saying to the GLC in the mid-1960s. It seems to me that we in this country do not always learn by our mistakes.
Mr. Geoffrey Finsberg: Would not the hon. Gentleman agree that at least outside London the lesson of the mistakes about housing were learned? It is the metropolitan districts, not the counties, which have the power. Equally, it is the metropolitan districts, which have education functions, and not that vast abortion of ILEA.
Mr. Cartwright: I would not accept that ILEA was an abortion, but if the housing mistakes were learned the mistakes about planinng were not. The hon. Member will know of the problems cropping up over the split functions of planning. In passing, I want particularly to mention in this discussion of GLC proposals for a strategic housing plan what I regard as a very imaginative proposal for a common allocation system which would try to ensure that Londoners were housed on the basis of need rather than on the good or ill fortune of wherever they happened to live.

841
It will be well known to hon. Members that there is a varying position in housing from one borough to another. It is perfectly possible for somebody in my borough, Greenwich, to be in a very much less desperate housing situation than someone living in Hackney, Tower Hamlets or Islington, because the housing situation in my borough is much more fortunate. It seems that there is a strong case for trying to evolve towards a common allocations policy whereby it is the overall needs of London that are met, so that people are not housed on the basis of their good fortune in happening to live in a borough which has a limited housing problem.
There has been a great deal of discussion on this and a certain amount of progress has been made, but a great deal more has to be done. Clearly, there are problems on aspects like finance, because if Greenwich is to be asked to house people from Hackney, Tower Hamlets or Islington we would want some financial contribution from those boroughs towards the substantial cost involved.
Mr. Ronald Brown: Before my hon. Friend leaves that point, he should know that it is very unlikely that people will be going from Hackney to Greenwich. Usually we have people coming from Greenwich to Hackney and then trying to get back afterwards.
Mr. Cartwright: That arises under the GLC housing operation. People constantly tell me that Greenwich is at the end of the world, but with the GLC development at Thamesmead we are finding that a substantial number of people, even from as far away as Hackney, are prepared to come and live in sunny Thamesmead. It is certainly an area to which people are prepared to come when they need housing.
A substantial and deep-rooted attack was made by the hon. Member for Hampstead on the municipalisation programme. He virtually condemned it as being an ideological kind of policy, based not on sense but on political dogma. I totally reject that approach. In my experience of municipalisation programmes, admittedly very much smaller than those of the GLC, I have found that they make very good sense.
842
For example, my authority has been able to buy completed houses put up by private builders much more cheaply than it can build for itself, starting from scratch, in the present inflationary situation. All local authorities receive a regular stream of circulars, letters and appeals from private builders saying that they have a nice development in Bexley, Bromley, or even in Sittingbourne, Rain-ham or Gillingham, and asking whether the borough would like to buy those houses which are all empty and available. They do that before finishing the building. Before putting them on the market, they offer them to local authorities.
Mr. Robert Taylor: Does the hon. Gentleman support the proposition that the GLC should acquire occupied properties?
Mr. Cartwright: I am coming to that. I am arguing that the purchase of new properties from private builders makes good sense. As to the purchase of older tenanted properties, I dispute the statement made by the hon. Member for Hampstead that that practice adds not a single home to the overall provision of a local authority. In my experience, by acquiring tenanted property it has been possible to make much better use of that property. Many hon. Members must have had experience of a local authority purchasing a three-bedroom house tenanted by a single or widowed lady, rehousing her in a small purpose-built one-bedroom flat, thus making her life much simpler and happier, and enabling the house to be used for family occupation. That kind of policy is made possible by a programme of municipalisation which includes the buying of tenanted property.
Mr. Michael Neubert: Does not the hon. Gentleman know that the GLC has one of the worst records for the under-occupation of properties?
Mr. Cartwright: That problem is one for all local authorities. In my experience there is a problem of under-occupation whether a local authority is Conservative-controlled or Labour-controlled. Many authorities tackle it by building one-bedroom flats and doing all they can to encourage tenants to move out of larger premises, but if those tenants do not want to do that, what is to be done? Does the

843
hon. Gentleman suggest that they should be compelled to get out?
Mr. Tebbit: I am amazed that the hon. Gentleman's recipe for improving matters is the municipalisation of more property, which would impose on an even larger sector of property in London the problem of under-occupation which exists with council property. The hon. Gentleman has it the wrong way round. The right way to improve the level of occupancy is to sell council houses, not to buy private houses.
Mr. Cartwright: I do not know how the selling of council houses helps the widow in an under-occupied house who wants to get rid of it, has a problem in maintaining it and is worried. My authority has a queue of people wishing to sell to the authority and willing to accept in return a one-bedroom flat. That is a step forward and in no sense does it create the problem to which the hon. Gentleman referred.
Mr. John Page: We are all touched by the story of the widow in a three-bedroom house, but it does not tie up with a local authority buying 71 dwellings of which only 19 are vacant and spending £500,000 on the property. I am interested to learn why a local authority should do that.
Mr. Cartwright: A great deal depends on the type of property that is being acquired. There may not be elderly ladies living in the property acquired by the GLC in the case quoted—I do not know. The acquisition of property which is good value for money can never be a mistake. It is always an investment for the future.
The hon. Member for Hampstead accused all local authorities—although I assume that he meant only Labour-controlled authorities—of trying to acquire all the land in sight and, with sticky fingers, trying to buy up every home available. One had the impression that this was purely a piece of municipal hoarding and that local authorities wanted to get all these homes and land to gloat over them and to see their acquisition figures constantly rising. I have seen no evidence of that. In the authorities with which I have been involved, the purpose of programmes of acquisition. whether of land or of houses,
844
has been to meet a rapidly rising housing problem.
There have been many occasions when the Greater London Council and my borough council have both gone after the same piece of land. We have always been able to reach amicable agreement as to which side has the land. I reject the suggestion that the GLC is a great monster gobbling up all the land in sight in order to gloat over it in its land bank.
I turn to the question of housing associations, of which the hon. Member for Hampstead made such play. I declare my interest as a member of the committee of the London and Quadrant Housing Trust, which is one of the biggest in the country. Housing associations have a tremendous job to do in supplementing what local authorities do in housing and in complementing it but not competing with or seeking to replace it.
Great harm was done to the housing association movement in the years between 1968 and 1971 in London where in borough after borough, under Conservative control, sites were sold off to housing associations and the view was constantly developed that housing associations were a replacement or an alternative to municipal housing. That did a grave disservice to the housing association movement, because it was involved unwittingly in a political battle. The scars of that period will take a long time to heal.
If I may be permitted to draw on my own experience. I can remember a Conservative housing chairman saying, as the hon. Gentleman did, that local authorities were very worthy organisations in the housing field but extremely slow-moving and slow in developing their sites. Because my own authority at that time had some sites available, the chairman argued that we should release them to the voluntary housing movement which was straining at the leash and desperately trying to get hold of some land on which to build. Our experience in every case was that the development was much slower than it would have been had the local authority developed the land itself. I can cite a case in which land was released to a housing association in 1970, but only recently has the building work been started, and that work will not be finished until the end of this year. That is an indication of the errors which sometimes creep in if one seeks to use housing

845
associations as a battering ram to hit local authority housing programmes.
I hope that the House will reject the proposition put before it by the hon. Member for Hampstead. I should have thought that all of us would have good reason, as London Members of Parliament, to recognise the massive social problems that face our city. I believe that housing is the biggest of these problems, and we should place on record our appreciation of the work which the GLC is trying to do through its strategic housing plan. We should not seek to hinder the Greater London Council in grappling with the problem. We should show it the green light and tell it to get on with the job by rejecting the proposition which is before us tonight.
9.4 p.m.
Mr. Michael Neubert: During Questions this afternoon the Chancellor of the Exchequer, using a well-known device, sought to answer one question by asking another. When challenged on the scale of public expenditure and the need to reduce it now, he asked Opposition Members where they would make cuts. He was so deafened that the proceedings came to a halt and order had to be restored by the Speaker.
We have something of a similar situation tonight in that we disagree
wholeheartedly with the level of expenditure which has been exacted by the Greater London Council. We propose measures by which that expenditure should be reduced. Members of the Greater London Council have made it their proud claim over many years that their budget exceeded that of several of the smaller countries in Europe. They are in danger of setting a new record soon—that their budget will exceed the capacity of Londoners and taxpayers generally to pay for it.
We have reached that situation after a Labour Council has been in office only since 1973. In that time the precept on local authorities in London has more than trebled. If I may cite my own borough of Havering, there the precept has risen from 5·2p to 16·4p. It seems an innocuously small amount expressed in pence, but in hard cash it means that an extra £5 million has had to be found. That is
846
the level of expenditure which is out- raging the public at large in London.
If I heard the Chancellor of the Exchequer correctly this afternoon, he was concerned about his inability to monitor the effects of the Budget, and in particular to keep control of public expenditure. He put his hopes on a new consultative council, which will no doubt work miracles that have not been achieved so far.
The right hon. Gentleman cited as a reason for his concern the fact that local government expenditure has apparently been rising at about 8 per cent. a year for three successive years. What would he have thought if it had been drawn to his attention that one local authority, Greater London, had trebled its demands on the ratepayers in that time? What other commodity or service provided for the public has increased by that amount without uproar? It is unjust, and it has thrown into question not just the rating system but another matter.
Many of us have thought that the rating system could not survive savage increases in public expenditure, controlled only by the sanction of three-yearly elections in which perhaps only 25 per cent. or at most 40 per cent. of the electorate take part. But at least with such a principle of local government the councillors are accountable to their voters at regular elections. They present the bill and are judged by it, and no doubt will be judged at the next election. But in the case of the Greater London Council increases of this magnitude call into question the whole principle of precepting, because it is not the GLC that is presenting this trebly-increased bill to the electors of London. It is the unfortunate London boroughs.
Apart from the injustice of that, and the lack of accountability, there is the complete disruption of priorities of the London boroughs' own programmes. I wish to give an example of the kind of economies that the London borough of Havering has had to make to come within the Government's requirements set out in Circular 171/74, in which councils were asked to keep their expenditure down to inescapable commitments. As the GLC and precepting authorities were clearly included in his strictures, is the Minister satisfied that the GLC has

847
honoured that request and kept to inescapable commitments? There is every reason for doubt in the Bill.
The kind of economies that my local borough has had to make, which I am sure are emulated in many other London boroughs, are as follows. Libraries are to close one day a week. Street lighting in side roads is to be switched off at midnight, except at danger points. Street sweeping of residential roads is to be reduced from two to four weeks. Grass cutting of street verges is to be done every 10 days instead of seven. Flower beds in streets are to be eliminated, and there is to be no floral decoration of public buildings. Maintenance standards of parks are to be reduced, except where fees are paid. The holiday scheme for the elderly, though not for the handicapped, is to be reduced. Certain physical education options, such as riding and golf, are to be reduced.
I make no apology for wearying the House with these trivial and pitiful policies that have had to be adopted. I hope that they are wearisome and tedious, because they underline my point about how little scope the London boroughs have to judge their own priorities on behalf of their residents and ratepayers, because the money available in the public purse is being mulcted by the precepting authority, notably the GLC. The level of expenditure is intolerable and must be decreased.
Substantial reductions in expenditure should be made, as for example in the municipalisation programme, either in the acquisition of new buildings built for sale or in the programme of rented property acquisition. I can reveal to the hon. Member for Woolwich, East (Mr. Cartwright) that it is a political programme of property acquisition in London, with the aim that eventually all rented property will be available through the local authority. It is not a question of our placing housing associations and private landlords in the political battlefront. They are there. They are a gradually diminishing area of alternative choice in housing.
Mr. Cartwright: Surely the hon. Gentleman is not suggesting that housing associations are a diminishing area. Their growth has been phenomenal in the past few years.
Mr. Neubert: I was relating that remark to the question of the private landlord providing rented accommodation. Housing associations, encouraged by Conservative and Labour authorities alike, are growing, but that is not a political manoeuvre. It is to sustain an alternative source of housing. People do not want to be faced with the alternative of home ownership or council tenancies. There should be some provision for people in between. Rented accommodation should be available for people who find that their circumstances are most suited to rented accommodation.
There is a programme of acquisition on a vast scale. It amounts to £70 million a year for two years. I found the statement made by the solicitor and parliamentary officer to the Greater London Council disingenuous. He pointed out that the programme for the acquisition of existing dtwellings allowed for no increase over last year. Last year was sufficient for most of us. Even allowing for some reduction in real terms, because of the effect of inflation, this programme is still too large. The borrowing of £70 million at 15 per cent. interest means £10½ million in yearly interest charges alone. Presumably that was the burden, to which Sir Reginald Goodwin referred, which completely undermined the strategic housing plan, which is just about dead and buried, or at least on its way to being interred. I am sure that the departure of Mrs. Dimson must signal a change in housing policy at County Hall. We shall see.
Municipalisation is a wasteful use of public money. Apart from the price paid for the property, it is an expensive way of providing accommodation. The £40 million spent last year will have housed, according to the GLC, fewer than 5,000 people. For the same amount of money we could buy and build dwellings to house 17,000 people. But here we come to the point. That money cannot be turned into extra homes for people because of the dilatoriness of the GLC's own housing programme. The GLC owns land on which construction is proceeding, or is envisaged in some distant future, for 58,000 dwellings. Its housing programme is now producing 6,000 dwellings a year. Why does the GLC wish to acquire more properties, without creating a single new home, and involve the public of London in an immense new expenditure of that order?

849
Municipalisation is bad because it has the effect of sustaining house prices on the open market to the detriment of prospective new house purchasers. That fact is undoubtedly true. Whatever may be said about the agreement between the local authorities, the fact that the Greater London Council, with its virtually bottomless purse, is in the housing market has kept up the price of houses after a period when they were beginning to fall. Those prices might well have come within the reach of people who would have liked to purchase houses. The scandal of the situation is that the GLC is not able to accommodate all the extra properties which it has purchased.
The Opposition are constantly chided about Centre Point. That is the great symbol of the inadequacy of the construction policy in this country. But there are Centre Points in my constituency. They may not be quite as high, or ambitious, or architectually exciting. They are simply properties purchased by the GLC or by the local authority and left empty month after month, because the programme of acquisition is far too ambitious.
It is a source of considerable resentment amongst people seeking new homes that such properties remain unoccupied even though they are in public ownership. Many people come to my constituency "surgery" asking whether I can help them to find a home. I say that I shall gladly put their case to the local authority but point out that the local authority has a housing list in excess of 5,000 families. People say "Do you not know that there is a house round the corner which has been empty for month after month?" When I go to the local authority and say "What about this house, as it is suitable for this person?", it says that the house does not belong to the local authority—the inference being that it belongs to the GLC. But there are now large numbers of houses in public ownership in London which are unoccupied. Therefore the problem of homelessness is not solved by such a policy.
Thirdly, there is the difficulty of maintaining such properties and of managing properties scattered over wide areas. This is a liability for the future, and it is an illustration of the policy of expediency to
850
which this Government came but from which they are now withdrawing.
In the public expenditure White Paper, provision was made for a larger programme of acquisition of dwellings, at the same time cutting back on the renovation of present dwellings. The two paragraphs in that circular have the effect of causing the present controversy. However, we read in tonight's Evening Standard that some of the cut will be restored and that the reduction in the GLC's estimate for renovation from £20 million to £11 million will perhaps be made good. We are told that the justification is that it needs to be done. However, the way in which it will be done is by cutting home loans This is very significant. Once again the Government seek to advantage public housing at the expense of private housing If the Minister does not believe that, he has only to look at the Evening Standard, where he will see that that statement appears next to a photograph of an all-night queue of mortgage hunters outside the town hall in Erith. They were trying to secure loans from the council out of the £1 million which was to be made available. When I saw that photograph, it occurred to me that the hon. Member for Erith and Crayford (Mr. Wellbeloved) could have got up a little earlier this morning and made them a cup of tea—
Mr. Ernest G. Perry: My hon. Friend cannot make tea.
Mr. Neubert: It shows that there is still a vast unfulfilled demand for mortgages, and it is quite wrong for the Minister to seek to cover up this confusion and to look for the source of new funds by reducing the amount of money available for home loans.
Mr. Ernest G. Perry: It may very well be true that a large number of people were lining up hoping to obtain mortgages from a local authority. No doubt those same people applied to building societies and were unable to obtain loans from them, despite the enormous funds of the societies, because the houses which they wished to buy did not come up to standard or were built before a certain date. Is not that grossly unfair on the part of building societies to people hoping to buy homes in London?
Mr. Neubert: I do not feel that that is relevant to the case I am making. The

851
London boroughs are known to be sources of borrowing of last resort. No one questions that. That is their job in life. We are discussing the amount of money available for people to purchase homes of the kind that the hon. Gentleman has referred to, because not everyone can be so ambitious as to have the highest standards in their housing requirements. We need desperately to use the accommodation that we have already before we embark upon the grandiose schemes of redevelopment which the hon. Member for Woolwich, East would like to see the GLC undertaking.
If the Minister's purpose is social ownership, which is his current euphemism for "municipalisation", let him say so. But it will be resented by large numbers of Londoners who would like nothing better than to own their homes.
9.18 p.m.
Mr. Nigel Spearing: The hon. Member for Romford (Mr. Neubert) mentioned Mrs. Gladys Dimson, as did my hon. Friend the Member for Woolwich, East (Mr. Cartwright). I join my hon. Friend in saying that anyone who knew Mrs. Dimson was in no doubt about her dedication to improving the housing conditions of people in London. Although a number of Opposition Members may have disagreed with the way in which she went about it, I am sure that the whole House will agree with that sentiment at least.
In this debate it has been striking that two of the most interesting speeches have come from two hon. Members who in the past were leaders of London borough councils. My hon. Friend the Member for Woolwich, East was leader of the Greenwich Council. I support him strongly in opposing this instruction and I back wholeheartedly almost all that he said.
The hon. Member for Hampstead (Mr. Finsberg), in an interesting speech—the House always listens to him with great interest—forgot that when the Conservative Party was in power at County Hall it rapidly sold off a lot of properties to people who were certainly not building homes for people. Indeed, his advocacy of selling off council houses ignores the cash flow. The hon. Gentleman mentioned a sum, but the sum that could be obtained for those houses would not
852
replace them in view of the costs of modern building.
Mr. Ronald Brown: The situation was even more cunning than my hon. Friend suggests. The Tories sold off only good stock, leaving a residue of the worst possible properties.
Mr. Spearing: Indeed. Not only that, but the Conservative-controlled council wished to sell off only detached houses. which are the most popular for those who can afford them. However, we know that those who can least afford to buy houses need them for their children to give them space during the time when they would otherwise have to be in tower blocks, which hon. Members on both sides of the House deplore.
Referring to the changing of housing policies, I remind hon. Gentlemen opposite that it was the policy of the Tories to build a vast number of ringways in London. Had they won the election not long ago at County Hall, they would have been busy building those roads for fewer cars and pulling down thousands of houses in the process, thereby making the terrible problem facing us today worse still.
Perhaps the hon. Member for Croydon, Central (Mr. Moore), who talked about people changing their minds, will change his mind on that point. I suggest that, on the GLC's relations with the boroughs, he might also have a word with his hon. Friend the Member for Ealing, Acton (Sir G. Young), who is sitting next to him, because the hon. Gentleman and I sat for a long time on the planning committee of the GLC. We both had an interest during that time in the old Acton constituency. We know that there is often an overlap of borough and GLC matters. Certainly then, and no doubt now, when the planning committee or individual planning boards looked at applications concerning an hon. Member's constituency, that Member could sit in. Therefore, the hon. Member for Croydon, Central must see his GLC opposite number regarding the 1·2-acre parcel of land about which he epressed concern and get all the information from him. I am sure that, whatever party is in control at County Hall. there will be that overlap. I suspect that squabbles of that kind are a reflection of policy over something more fundamental.

853
Whatever the defects of the Local Government Act 1963, surely there is a proper reflection of the wider regional and more local interest. The fact that they often clash is not necessarily bad, because the representation of interests is at the heart of democracy. That clash is sometimes reflected in different bodies.
I understand the feeling about the loss of the county boroughs. My constituency contains a large part of the old county borough of West Ham, which certainly is a place of great individuality and local loyalty. Through action on the planning committee of the GLC I was able to question the safety of some of my constituents at Wembley. I am glad to inform the House that, due to the representations I have made, the Wembley Stadium authorities have now said that they will allow the crowds heading out of the stadium on Saturday, after West Ham has won the Cup—
Mr. Ernest G. Perry: After Fulham has won the Cup.
Mr. Spearing: After West Ham has won the Cup—to use the car park route as well as the overhead walkway. I hope that everybody will be satisfied about that.
Item 15 in the schedule refers to piers and landing places on the river. Perhaps part of the contingency funds can be devoted to purchasing some of the properties there. I hope that hon. Gentlemen opposite will not oppose this.
The way in which the Thames and London have been separated in the past through planning and flood defence works is one of the tragedies of our city, and it is time that this was changed. The GLC has great powers—or so the Government say—over matters relating to the Thames, and this is to be welcomed. The only thing about which I have any hesitation is that I understand that this purchase is being done not by the Thames Waterways Board but by the transport committee, and if it is to do its job the board, rather than the transport committee, should have the £500,000.
For the rest of my speech I shall refer to where the Thames ought not to be—that is to say, overflowing. I now join my riparian neighbour my hon. Friend the Member for Woolwich, East in mak
854
ing one or two points about the Thames barrier.
The barrier is likely to cost even more than the money mentioned in the schedule to the Bill, and it could go way above some of the contingency funds that we are discussing here. The reasons for this are set out in the Third Report of the Public Accounts Committee, Session 1974, House of Commons Paper No. 303.
The barrier, as is well known, is of unique design. One like it has never been built anywhere in the world to this size and scale, and there are many scientific problems to solve almost as one goes along. In these circumstances extra cash is always necessary, and because it is of such vital significance to London, and particularly to my constituency, there is a difficult problem of cash control. The Public Accounts Committee referred to this in its Third Report, and I shall come back to that in a few moments.
The real cruciality of the Thames defences, both the barrier and the walls, is brought out by information which is not always well known in London or in my constituency. The fact is that 85 per cent. of my constituency is below the 1953 flood level, and I am told that if, before the defences are finally completed, there were an overtopping of the walls by only 2 ft more than in 1953, for one and a half hours, inside my constituency there would be a lake two miles long by one mile wide stretching from Silvertown in the south to the District line in West Ham in the north, and it could stay there for two or three days.
I am not being alarmist in any sense, because I am also told that the chances of this happening are one in 380. They are, in a sense, very long betting odds, but occasionally such odds come up. That is why proper precautions need to be taken, because if that sort of disaster ensued, not only in my constituency but elsewhere, if that sort of condition arose before the barrier was in position and working, the result can only be imagined. I emphasise that this chance is present only until the raising of the river walls has been completed. This is the problem which confronts the GLC, which confronted the consultants and which confronts this House to some extent because of the question of inflation.

855
The Public Accounts Committee which looked at this matter was rather disturbed at the increase in costs. Because this work is so vital and necessary, one is in something of a quandary when one is asked to pay more. The PAC in its report at page xxxvii goes into this in some detail. One of the recommendations that it made in paragraph 107 was that
"a future Committee of Public Accounts should examine the effectiveness of these controls and should look more closely into the basis on which consultants fees are calculated."
I am sure that the Opposition will support me here. Where there is a large sum of money—well over £250 million, and it will probably top £300 million by the time the work is finished—and where there is an inflation factor and consultant's fees are a fixed percentage, after they have done their work they sit back and take in the money.
This matter was raised in the Committee's proceedings by my hon. Friend the Member for Stoke-on-Trent, Central (Mr. Cant). At Question 437 he asked exactly how much the consultants would get for their work. The witness did not have the figures with him and did not know the amount. The question was not pursued, except that the witness was asked whether it would be 10 per cent. of the cost, and he replied
"Oh, no, much less than … four per cent."
Let us assume that the cost was only 2 per cent., although it could be more. Two per cent. of £250 million is £5 million, which is a substantial sum. I know that a lot of work is involved in the job, but the consultants are not dealing with the material; they are being paid for their expertise. As the Public Accounts Committee said, as the costs go up, so also does the percentage being paid to the consultants. We are told in paragraph 104 of the Committee's report that
the Ministry's formula for determining consultants' costs conformed largely to conventional practices … current discussions with one of the three main consultants for the Flood Barrier were taking place on the basis of a slightly lower percentage to take account certain inflationary factors which had occurred since the negotiations first started."
I hope therefore, that Conservative Members, bearing in mind public expenditure, will have a look at this with us on a non-party basis. This sort of thing happens not only in this kind of work,
856
which is of substantial capital value, but with public authorities anywhere which are employing civil engineeering consultnts and who take a fixed percentage of the job cost. After their work is done the cost inflates, as is normal in modern times, and they take more money, even though the work has already been done.
I doubt whether my hon. Friend the Member for Edmonton (Mr Graham) will be able to give me the figure I seek. If he cannot give it at the end of the debate, I have no doubt that he will be able to supply it in due course.
9.33 p.m.
Dr. Rhodes Boyson: I can assure the hon. Member for Newham, South (Mr. Spearing), who has been very concerned about the Walkway in Wembley, that I shall be attending on Saturday to make sure that all is well there and that West Ham has a fair share of the referee, like Fulham. I am a Lancastrian living in London, and it would be difficult to find a more detached observer than that.
I express my concern about the municipalisation programme of the Greater London Council, to which special reference has been made by my hon. Friend the Member for Hampstead (Mr. Finsberg). I would dispute its use on two grounds. First I do not think it will solve, or even help to solve, London's housing problem. Secondly, the financial burden it will put upon the GLC and upon the country's public finances will only mean both the GLC and the country coming nearer to bankruptcy.
There is a genuine difference of opinion between the Labour and Conservative benches on the question of municipalisation. I do not question the good motives of the Labour Members. I always think that one must lack arguments if one is forced to dispute the motives of one's opponents. Those who favour municialisation are not do-gooders; they are basically well-meaners. The end products of the two are the same.
The more the State has become involved since 1914—and local authorities actually began with rent control at the beginning of the First World War—the greater the difficulties. The more the artificial markets have grown, the greater the shortages have become. This has led to more restrictions and, in turn, to even more severe shortages.

857
May I refer to the example cited on the question of private rented property? In the 1973 Labour Party manifesto, on which the Greater London Council elections were fought, these words appear:
"This policy will aim, once and for all, at removing the scourge of the private landlord in our cities."
That was specifically spelt out. What has been the result when the private landlord has been bought out by the GLC or the London boroughs? In every case there has been created a tied cottage or tied fiat situation with less mobility and a move towards a stagnant and controlled economy.
The figures I have show that there is only a 20 per cent. movement in council house property compared with the movement in privately-owned property. Basically when a person has a council property he holds on to it. We can see a situation when that person will leave it in his will to his children and grandchildren. That does not make for mobility. For a party that opposes the tied cottage, it is odd that the Labour Party should be in support of a "metropolitan tied cottage ".
There is now a continual shortage of rented property which holds up the mobility of the population. In the cities students, transients, young people and single people have the greatest difficulty in finding rented accommodation. The more property that is bought up the more difficult the situation becomes. Those of us who know New York know that it often means a three-month wait, getting up at five o'clock in the morning to get the first editions of the papers, before one can obtain a private rented flat. This is because of the constant control which is exercised there.
My second point concerning municipalisation was also mentioned by my hon. Friend the Member for Romford (Mr. Neubert). It is that such a policy keeps up the price of property. There is the bottomless purse of the State. The same is true of industry. As long as workers in industry believe that the State will bail out when an industry goes bankrupt, irrespective of wage claims, they cannot be blamed for putting in the ultimate in wage claims.
If there is this bottomless purse of the Slate via the. GLC or the local
858
boroughs, the price of property will never drop to a level at which more people can buy their own homes. There is a case in the borough of Havering, in the constituency of my hon. Friend the Member for Romford, which has come to my notice of a house being bought by a couple as their first home for £11,400. They were then gazumped by the local authority, which bought it for £900 more. There must be hundreds of similar cases. This policy of municipalisation removes houses from the market. No matter what Labour Members think, there is a great desire among people to own their own homes. Every survey shows that about 80 per cent. of the people prefer to own their own homes and to have a stake in their own community.
My next point bears out what my hon. Friend has already said. In 1974, according to my figures, the GLC bought 3,170 dwellings, of which only 1,117 were vacant. If we divide that number into the price paid, it means that £8,000 was paid for every man, woman and child rehoused in those dwellings last year. It is a fantastic cost. The Minister shakes his head. That was my advice. Perhaps we can meet behind Mr. Speaker's Chair later and add up the figures.
Municipalisation will not solve the problems. I accept the genuine concern of Labour Members, but we must also bear in mind whether the country can afford the great cost of an increased municipalisation programme at present. I am not here to defend the Chancellor of the Exchequer. but we have to decide whether this would be in line with his Budget Statement.
In the London boroughs and in the GLC there is a large municipalisation programme. Some of the money for the boroughs is provided by the GLC under various loan arrangements. The borough which I represent has plans to build 454 houses at a cost, including land, of £30,000 each. Only 15 per cent. of the cost will be covered by rent. For 60 years 85 per cent. will have to be covered by public subsidy from the Government or the local authority. The Bible says that the sins of the fathers are passed on to their children. These debts will be passed on not only to our children but to our grandchildren before this great incubus is lifted from the backs of the people of London.

859
With the help of the GLC, 1,000 private houses were bought last year in Brent.
Mr. John Page: Will my hon. Friend give the figures slowly.
Dr. Boyson: My hon. Friend, in whose constituency I live, is paying close attention to my comments. The borough in which is my constituency last year bought 1,000 houses, and the subsidy for each of those houses per year—presumably this will be for 60 years—is £1,150. This subsidy will come from the local authority and the Government. We shall not solve our financal problems this year. We shall be landed with them for many years to come if we adopt this policy.
One reason for our financial crisis is that local authority expenditure under the last Conservative Government and under the present Government has got out of public control. We shall need a body like the Public Accounts Committee to control it or it will break the back of any Government. Between 1955 and 1972 the share of public expenditure expended by local authorities increased from 25 per cent. to 31 per cent. Its share of the gross national product increased from 10 per cent. to 15 per cent. during that period. This is one of the problems which will rest upon the desk of any Chancellor for a long time.
A large share of the external deficit, with which we are all concerned, arises from having to finance the capital investment of the GLC and other London boroughs.
It is a question of the straw that breaks the camel's back. The level of taxation and local rates in this country is crippling the initiative of our people. Every hon. Member must he concerned about the heavy and rising burden of rates, especially of the GLC, which have trebled in two years.
Heavy taxation always causes revolt in any community. The American War of Independence was based upon a taxation revolt. The great battles of our history of 1381, 1450, 1549 and 1642 were all about heavy taxation. Heavy rates are moving people towards a revolt against both local and national government and against all parties.
I disagree in principle with the usefulness of municipalisation. It does not
860
solve problems; it increases problems more than it solves. I do not doubt the motives of Labour Members, but the result will be against their wishes. We are in the middle of a major financial crisis, and if we do not make these cuts now they will be made by the Chancellor within the next three or six months We are here to help him. The madness must stop some time. The coach will become a pumpkin at the stroke of midnight or whenever it comes. I must not mix my metaphors any more. However, I agree with my hon. Friend the Member for Hampstead and I shall be surprised if we do not get unanimous support from the Government benches
9.45 p.m.
The Minister for Housing and Construction (Mr. Reginald Freeson): Perhaps I might intervene for a few minutes on behalf of the Government. I will not follow in too much detail much of what has been said in this debate, since it has ranged far beyond the points at issue either in the Bill or in the Instruction sought by the Opposition.
So far as hon. Members have discussed financial problems in local government. whether in housing or in other matters. these are being examined closely by the Layfield Committee, which is investigating local finance generally and, so far as housing finance is concerned, by the special housing finance review which we have set up in the Department and is being monitored by an appointed steering committee of outside persons. As I have said before, that review will deal not simply with local authority rents and subsidies but also with a wide range of fundamental housing finance matters, covering points raised tonight, among others. So I will not pursue those points now.
I should like to concentrate on the burden of complaint and criticism by the Opposition about municipalisation—the social ownership of rented property. I regret that once again many Conservative Members have tried to raise the phoney battle of owner-occupier versus tenant. That is not the Government's view of the situation. After all, when this Government came to power a year ago, they deliberately and effectively ended the mortgage famine they found, to the benefit of owner occupiers. We have a

861
long way to go yet—I make no mistake about that—but if we had been as we are described by the Opposition, we should have done nothing to assist.
It is contrary to the facts and to policy intentions which the Government have made clear, as well as to actions we have taken since February last year, still to try to persuade people that there is a party political division on the subject of owner-occupation. It is time that this nonsense stopped.
Mr. Cyril D. Townsend: I was wondering how the Minister would explain that philosophy to the hundreds of people who were about to buy their GLC houses and were unable to do so because the Conservatives lost the GLC election.
Mr. Freeson: I should be happy to enter that discussion when we discuss the general housing situation on other occasions. At this moment, I would say only that, whether or not this Government had come to office, the financial state of the housing market was such that that source of house sales was drying up anyway. The hon. Member can ask any local authority representative around the country, Tory or Labour, and he will find that that was the case. The policies pursued by this Government and adopted by both Labour and Tory authorities were the proper policies in the circumstances.
We are opposed to the wholesale, indiscriminate sale of rented properties. It was the policy of the Conservative Party in government, and I understand that it still is, to allow indiscriminate sales irrespective of the housing situation in individual areas.
Mr. John Hunt rose—
Mr. Freeson: We can discuss these issues in detail on another occasion. Per haps I might be allowed to continue.
Mr. Anthony Berry: Give way.
Mr. Freeson: Does the hon. Member wish to intervene? He has only just come in. Perhaps I might be allowed to continue with what I was saying before I was interrupted by the hon. Member for Southgate (Mr. Berry), who I believe
862
is a Whip. Perhaps I may be allowed to continue with my own remarks. I shall happily give way to the Opposition spokesman, the hon. Member for Ravens-bourne (Mr. Hunt), when I have done so.
I turn to the specific issues that are before us. I thought that I would deal with one or two preliminary points first before coming to my main observations. Suggestions have been made by certain hon. Members that in some constituencies hundreds of dwellings have been acquired which have been standing empty for months and even years on end. Romford has been quoted. I recall that there were similar references of a more generalised kind by other hon. Members.
I specifically and genuinely invite hon. Members who have made such statements to write to me and to give me the facts. I assure them that we shall have them probed and that in so far as it is possible to get action taken it will be taken. I also invite further details about the 3,000 properties which were bought by the GLC when only 1,000 were vacant. I should welcome further details as to the breakdown of the figures and the source of the figures. I would be interested to probe them. We shall seek to take early action as far as it is possible to do so.
Similarly, I should like to have information about the location of the sites held by the GLC that would provide 58,000 dwellings in a relatively short time if the GLC organised its housing programme more effectively. My remarks will be on the record and no doubt hon. Members will read them and get in touch with me. Having made these points rather briefly, and before turning to the main burden of what I have to say, I gladly give way to the hon. Member for Ravensbourne.
Mr. Hunt: The Minister has passed on from the point he was making about which I wanted to ask a question. He was saying that the climb-down on the sale of council houses to sitting tenants was in part due to the general state of housing finance. Can we take it from his remarks that if and when that situation improves the Government will look favourably upon the sale of council houses to sitting tenants?
Mr. Freeson: I am afraid the hon. Gentleman was not listening to what I

863
was saying. I said that irrespective of whether the Government had come into office that was what would have happened. This is what would have been said by any local authority representative throughout the country. I went on to say that the Government have made it clear—and I make it clear again—that we are opposed to the foolish policy of the indiscriminate sale of properties irrespective of any survey or understanding of the local housing situation.
It is necessary to examine the housing needs and demands in any area before deciding on the correct balance between rented accommodation, owner-occupation and other kinds of tenure which the Government are seeking to push. I shall make some general references to indicate our thinking on this matter, although tonight is not the occasion for a major philosophical discussion about the basis of our future housing policy.
The housing policy which the Government are putting forward is far removed from the kind of picture painted by people who do not even bother to listen to what we are saying. They do not bother to read about the actions we are taking, the policy documents we are putting out and the guidance we are giving to local authorities. If they did so, they would not make statements that attribute to the Government certain intentions and policies which bear no relation to the facts and no relation to the negotiations and contacts that we have with local government and the building industry throughout the country.
Mr. John Page: It was in March that the Greater London Council arranged to purchase 71 dwellings, only 19 of which are vacant. Does the Minister regard that as sensible action for a local authority to take?
Mr. Freeson: I shall come to some general observations about the purposes of the municipalisation of rented houses. If the hon. Gentleman writes to me with details of the transaction which he has in mind, I shall probe the point as a matter of policy, as I have done concerning a number of other properties which have been referred to me in discussions on the Floor of the House.
Let me try now to deal with some observations which have been made in this
864
debate and seek to put them against the policy background. Tonight's debate is largely a repetition of last year's debate, at a similar time in the year, when the same hon. Gentleman—the hon. Member for Hampstead (Mr. Finsberg)—sought to reduce provision in the Greater London Council (Money) Bill. The hon. Gentleman's main target was the policy of municipalisation. His efforts failed then, and I hope that the House will reject the motion tonight.
I should like to sketch briefly one or two basic facts in the background connected with municipalisation and social ownership policies. The facts will indicate the reasons for that policy.
There are about 2½ million dwellings in greater London. It is difficult to be sure between census returns, but of that figure there are about 400,000 houses in greater London which are substandard in one form or another. They are either short of one basic amenity or seriously obsolescent. If they are not dealt with in the next few years they might, if we are not careful, reach into slumdom and be irretrievably lost in terms of providing decent conditions.
Most of those 400,000 houses are concentrated in what used to be known as the London County Council area—the inner area of London—in which there are about 1,250,000 dwellings. In other words, 40 per cent. of the dwellings in inner London are in one form or another substandard. Whatever the history may be, and there may be various arguments about how this situation came about, the position now is that people have been living in those conditions and children have been growing up in such homes decade after decade.
We must also consider a further set of facts. Again this will be a "guesstimate" since we are between censuses, but there is probably a loss of 30,000 rented dwellings from the market each year in London. There has been no great variation in areas in terms of greater control or security of tenure. The pattern has been fairly consistent: the figure has been up in some years and down in others. But the figure of loss is roughly as I have outlined, irrespective of arguments about security of tenure and so on.
Most of what has happened has come about as a result of all sorts of economic

865
pressures. In the last few years since the slump in housing starts in mid-1973 there has been a considerable outflow of property from the market simply because owner-occupation became desirable in itself and also profitable. More and more properties were being sold in certain areas of London, and elsewhere in the country, which previously had been rented. This was the largest single factor which led to the loss of rented accommodation—and in the past two years it has been on a somewhat larger scale than normal. We have been losing rented accommodation, for one reason or another, over a number of years. The accommodation which is left with us is to a large degree in a substandard condition.
We also have a net shortage of housing in London. Between 1969 and last year the net shortage figure rose from 100,000 to 130,000.
It being Ten o'clock, the debate stood adjourned.
Ordered,
That the proceedings on the Motion for an Instruction relating to the Greater London Council (Money) Bill, set down for consideration at Seven o'clock this evening by direction of the Chairman of Ways and Means, may be proceeded with at this day's Sitting, though opposed, for a period of one hour after Ten o'clock.—[Mr. Thomas Cox.]
Question again proposed.
Mr. Freeson: There are all kinds of reasons for this into which there is not time to go this evening, but that is the estimate we make. Those are the basic facts, over-simply stated, of the London scene.
In that kind of situation it is essential, broadly speaking, to do three things. We must increase the rate of house-building in London. We must do something to reduce the rate of loss in the rented sector, though we shall not be able to do so completely as there are different demands in our time for different kinds of tenure than there were years ago; but we need to reduce the rate of loss of rented dwellings from the market, particularly in inner London, but elsewhere, too. And as far as we can make up the loss by new building and converting older properties brought into appropriate ownership, we must do so.
This has nothing to do with ideology. I have an ideological view about rented property, but irrespective of ideology
866
this will not be achieved unless in one way or another we extend social ownership and social intervention into this field. That is the only way to hold the rented market and to get properties modernised, improved and converted wherever it is desirable to do so, to provide not only additional accommodation but the right kind of additional accommodation on the London scene, which is different from the demand that existed for that accommodation a few years ago.
We need many more smaller units because of the demographic changes which are taking place. There is no evidence, for whatever historical reasons, to suggest that if we keep pushing at the private market we shall succeed in this achievement. To make a further point, if nobody believed this until the inquiry into the Greater London Development Plan I would have thought that by now, across the party lines, as a result of the evidence and recommendations that came out of that major inquiry—there has never been one like it in this country before—we would all have accepted this. It had been put forward previously. The Milner Holland Committee came to the same conclusion, and special reports produced by Grieve and others and by Collingwood on the London housing scene some 10 or 15 years ago have pointed in this direction.
The most notable report to reach this conclusion was the Layfield Committee's report, which found that the only effective way to hold the rented market at a reasonable level in London and to get properties improved was by social action. Whether it is done by municipalities, housing associations, co-operatives or some other form of social action is a matter of detailed argument and balance. It is that basic conclusion that lies at the centre of the present Government's thinking. and I would have hoped that by now, whatever detailed differences there might be, it would have been broadly accepted across party lines and that we would have ceased treating this matter as a party political football. Of course, it will always be political because independnt evidence has pointed in the direction of this policy being right.
Mr. John Moore: I am grateful to the Minister for giving way. I take his point. I have listened to him with great care. I have great sympathy with and no doubt

867
would agree with much of what he says. My difficulty is in jumping from the ideological to the practical. Will the hon. Gentleman connect what he has said, with which I personally have great sympathy, with the specific properties referred to by my hon. Friend on the Hill in Wimbledon which have no relevance to the discussion?
Mr. Freeson: I was not being ideological. I was taking pains to point out that many independent bodies have looked at this subject from a non-ideological viewpoint, whatever the Labour Party's views might have been over a long period.
Certain properties were referred to in the debate. Government policy is to give priority to putting resources into the worst kind of properties. Those are the properties we want to deal with mainly. If things were a little easier one might take a more flexible view of social ownership. Properties such as the one standing on the hill in question or properties in a valley somewhere else have been broken up and sold by owners—not all but some of them. That is a characteristic of even the better-off rented market in London.
The hon. Member for Hampstead will be well aware of a particular empire that has been involved in this exercise in a big way until relatively recent times. I do not want to get involved in detail for tactical reasons. There is a lot going on in connection with that empire in inner London. The hon. Member for Hampstead and others will be aware that until bad times hit the property market this process was going on at an ever increasing rate. Rented properties in blocks of flats were broken up and sold speculatively or for owner-occupation. It is to prevent that process that certain Labour authorities such as the GLC have turned their attention to purchasing.
I hold the view on behalf of the Government that we must direct the resources we have available for municipalisation and social ownership to the priorities the Government have stated, which in the main have been followed.
Mr. Geoffrey Finsberg: Will the Minister say whether he will help, or continue not to help, the tenants of the Stern Group in my constituency who wish to buy the properties from the receiver?
Mr. Freeson: The hon. Gentleman should know perfectly well—as I think he does—that we are doing precisely that. His question is a little unfair. He knows that a lot of work has been going on quietly behind the scenes. I do not propose to get involved in the details. It would do no one any good to discuss the details on the Floor of the House. The time will come when we shall state our intentions and conclusions. The objective is to get certain properties into some form of social ownership, by whatever means, by whatever instrument. I hope that there will be no disagreement on that score when it becomes known what we have been trying to do over many months and are still working on.
To return to my summary of the factual background, social ownership and control of rented housing is essential to any strategy for solving London's housing problems. It is not the be all and end all, but it is an essential part of solving London's problems and those of other big cities. It is central to Government policy, notwithstanding the immediate economic situation which constrains the resources we can devote to that policy.
That is why we are making available in our public expenditure budget sufficient capital at least to maintain the level of municipalisation which was achieved during our first year of office. We have made no cut in that programme, and as soon as economic difficulties permit we shall step it up. In addition, we are expanding the programme of social ownership through housing associations.
I am considering two ways of widening the scope of socialising rented housing which do not involve capital spending and other costly burdens on Government and local government. Social ownership remains, as we have been assured by the Leader of the GLC, the long-term aim at County Hall. It is my hope that the council will be able to reconsider any proposed cut in capital spending on municipalisation of all private rented property. The Government are making the capital available for maintaining the present level of municipalisation within our total housing budget. It is important that local authorities in the stress areas undertake the programme for which we have provided to the fullest extent possible. Against the background of housing needs

869
the programme is a modest one. It is not this picture of a gigantic bulldozing instrument of policy that has been painted for us by the Opposition—not for the first time.
London's housing problem remains extremely serious. The stock has increased overall over a number of years in relation to the number of households being formed. However, there still remain the shortages and the bad conditions to which I referred earlier, and most of these, as I have indicated, are concentrated in the inner city area. There will have to be a determined drive for many years before shortages and poor quality can be overcome.
I repeat that social ownership and control is vital to this objective, as has been recognised by practically every serious observer of the housing scene for many years past. If the motion that is before us succeeds, the effect will be to prevent the Greater London Council from doing what is postulated in the Bill. It will prevent the GLC from adopting any kind of flexible review of its policy, such as I suggested a few moments ago, during the course of the year. The Opposition's proposal would reduce the provision for 1975–76 to well below the provision authorised by Parliament for 1974–75.
The provision for capital expenditure in last year's Money Act was £158 million. This year's proposed total is some £30 million more. This increase reflects primarily the welcome increase in the GLC house building programme during 1974. It has been indicated during the course of the debate that the council accepted tenders for building a little under 6,000 houses by the end of the year compared with a little over 2,500 the year before. There have been agreements with private builders to acquire nearly 2,000 new dwellings under construction.
What the GLC has been doing in terms of both new building and social ownership has been the echoeing of a pattern that has been properly emerging under Government policy throughout the country. We have a long way to go in housing, especially in getting private owner-occupier housing up further than it is running at present. We have a long way to go on local authority housing, but there has been a considerable increase in
870
the past 12 months and the GLC performance is a reflection of what has been achieved nationally.
Turning to municipalisation, the total housing provision in the Bill includes £40 million. It is the same as the amount provided in last year's Money Act. In the light of the problem of the rented sector in London, nobody can say that this is other than a modest proposal. It is a modest move in this direction. Because of public expenditure limits we cannot move as fast as I would wish. We are moving in the right direction, and we are doing so by ordering our priorities. This is true of socialising old properties as well as of getting new housing under construction. The priorities all relate to stress conditions and empty properties. When we come to issue further policy guidance in pursuit of the circular that was issued for 1974, we shall be stressing this once more to local authorities throughout the country. Given the limits within which we are operating, first call must go on stress area properties, housing action areas, general improvement areas, priority neighbourhoods and, generally, properties that will meet the first priority housing need in terms of accommodation and getting them rehabilitated.
Section 105 does not come into this because such rehabilitation as can be initially undertaken to get properties into speedy occupation is provided for under the Housing Rents and Subsidies Act, under the municipalisation programme itself, and, provided it does not concern major conversion and improvement, it is not covered or restricted by Section 105. It is covered by the Act. That is a deliberate matter of policy.
Some figures have been bandied about. Let me give some of the figures to see what has been going on and what is likely to happen if the Bill goes through as proposed and is acted upon by the GLC. I accept that there have been exceptions, but let us not generalise from them, because several thousand properties have been bought. About 14,000 have been bought in London as a whole—not a major figure, but a sizeable one.
Mr. John Page: A pretty enormous one.
Mr. Freeson: Against a background of 400,000 substandard properties? Really!

871
About 14,000 properties have been bought in London. The GLC bought about 3,000 and housing associations bought 6,000. There was a total approaching 20,000 bought by housing associations, boroughs and the GLC together. Even that, because of the constraints on resources, I regret to say is only a small inroad into a major problem. We must at least maintain that level of activity. If we do not, the problems will overtake us in London and other cities. [Interruption.] If they are, we must step up, not cut down, as the Opposition have proposed. As soon as we have the economic resources, we shall do that. But let us not start cutting back now on the modest effort we have been putting into this programme.
872
We must get old properties brought into social ownership and rehabilitated, modernised, before they fall to pieces. It does not matter whether it is done by municipalities, the GLC, housing associations or various other means of social enterprise that we shall be examining in the coming months.
That is the burden of the case against the Instruction that the Opposition request. We want to maintain the programme that has been established. I hope that we shall have backing from all hon. Members. We want to stop this being a party football. There are housing needs that must be met. Properties must be modernised and families given proper conditions. The sad thing is not that too much is being done but that we cannot do enough. I hope that the House will be united in future in supporting the policy.
10.18 p.m.
Mr. Norman Tebbit: There is much that I should like to say about the GLC tonight. I do not think that any of us would claim that what was done 12 years ago, in 1963, has worked out as we would have hoped. I am sure that we intended it to lead to a better London, to a better system of London government, and I doubt that it has.
I should like to say a great deal about what my constituents think about a GLC which, having bitterly opposed road growth in London and the improvements in roads that we need in North-East London, has now proposed a heavy lorry route on one of the most dangerous hills in North-East London, a route going through a built-up area, past schools and through shopping areas. My constituents think a good deal about a Labour council that does that. They remember bitterly some of the talk about a Labour GLC caring.
There is a great deal to be said tonight on the broader aspect of the GLC's policies. Because of the nature of the Instruction which my hon. Friends and I seek to send to the GLC, we shall be talking about its housing policies. We are fortunate to have the Minister here tonight, because he can take note of some of the things that are said. Will he tell us some time—I am disappointed that he did not tell us tonight—whether he will continue to allow rents in the GLC to fall so far below a realistic level that day-to-day management charges are not being met?
It seemed to me that the Opposition had raised an important issue with regard to the GLC. The Minister said not one word about that. I do not know whether he thinks that that does not matter. I do not know whether he thinks that he does not have the power to do anything, and that, therefore, he should say nothing about it. I do not know whether he is happy with the standstill on GLC rents, which has continued for two years in an inflationary situation.
I am sorry to see the Minister looking at his watch. The time is only 10.20 p.m. and I have barely started. [HON. MEMBERS: "Watch it."] Never mind. The Minister has not answered that question, but at least I have attracted his attention.
874
Will the Minister say whether he is, content to allow the GLC rents to fall below the level at which they cover the day-to-day running charges? Presumably, from his continued silence, neither the Minister nor the Government holds an opinion on this matter, yet the Minister is prepared to sit back and watch it happen.
Council tenants pay only 32 per cent. of the housing costs in London, ratepayers pay 18 per cent. and the taxpayers at large pay 50 per cent. How much longer are the Government prepared to allow that trend to continue?
It is quiet in the Chamber tonight. Normally when we ask the Prime Minister a question like that he jumps up and says "How long would you allow it to continue?" The Minister does not even have the energy to do that. The Minister does not know the answer to my question. Increasingly he reminds me of Lewis Carroll's cat. His speech also reminds me of that cat—if I look at it twice there is nothing left except the sneer. In the case of the Minister it is a sneer, because I have never seen him smile.
Mr. Townsend: How long will the Minister tolerate the fact that one in three of the GLC tenants is in arrears with his rent at the moment?
Mr. Tebbit: Even if I asked the Minister he would have no opinion on that. I shall gladly give way to him if he wishes to express an opinion whether this is a desirable state of affairs or is one about which something should be done. He seems to have no opinion. I fancy that those ratepayers and council tenants who do pay their rents will not be amused at a Minister who complacently views the situation without offering any comment. Those constituents of the hon. Member for Hackney, South and Shoreditch (Mr. Brown) who pay their rents will not be pleased that the hon. Gentleman finds it amusing that a large number of tenants do not pay their rents. The Minister does not seem to give a damn about that.
Mr. Ronald Brown: The sensible answer to the question asked by the hon. Gentleman is that the matter he raises

875
is one for local government. That is what local government is all about. If the hon. Gentleman is now adducing the argument in favour of getting rid of local government he had better say so.
Mr. Tebbit: The hon. Gentleman misses the fact that we are discussing how much money local government must raise to expand a system of housing in which people do not give a damn whether or not the tenants pay tile rent. The scheme has been given the fancy name of "social ownership" by the Minister. I do not know what "social ownership" means. Perhaps it is a form of ownership which allows the sewage to rise in the sinks of the constituents of the hon. Member for Islington, South and Finsbury (Mr. Cunningham), not once now and again but week after week. What is social about that? The hon. Gentleman seems to want to intervene again.
Mr. Ronald Brown: If the hon. Gentleman provokes me, I am more than happy to oblige him. The sewage problem also occurs in the Barbican, where the hon. Gentleman lives.
Mr. Tebbit: It does not happen in my part of the Barbican. If it did, I should have something to say about it. But the hon. Gentleman does not weaken my case. The Barbican is a council estate as well. It happens to belong to a local authority.
What is it that is so different about social ownership? If the hon. Member for Islington, South and Finsbury had said that he had had no answer six weeks after writing to a private landlord to point out that sewage was coming up in a kitchen sink, I guarantee that there would have been some comment from the Minister tonight. But he makes no comment about this instance. As usual, there appear to be two standards.
In a speech which was powerful, reasoned, researched and impressive, my hon. Friend the Member for Hampstead (Mr. Finsberg) made a number of telling points. Again, the Minister made no attempt to answer them. My hon. Friend said that in seeking to borrow money on the public market the GLC had called its housing stock an asset. But if rents
876
do not cover day-to-day costs, it is not an asset. On current account at least it is a liability. How long can this situation continue?
Clearly, investors are not willing any longer to lend to the GLC at other than a premium rate. That is what the market at large thinks about the GLC. It does so because there is a gnawing doubt in the minds of those engaged in the money market about the continuing ability of the GLC to meet its debt obligations. That would have been unthinkable 10 years ago. It would have been unthinkable even five years ago. Today the unthinkable is being thought.
The unthinkable is also being done. Inflation is now running at a rate of more than 20 per cent. against 8·4 per cent. when this Government came to power in October. A Socialist Chancellor of the Exchequer has included a target of 1 million unemployed in his Budget, and he has threatened that he would like to let it go higher and to slash public expenditure if wage claims are not reduced. All that would have been unthinkable five years ago. It would have been unthinkable last October at the time of the General Election. Yet it has happened.
Today people seriously wonder whether the day will come when the Greater London Council will be unable to meet its obligations. If that day comes, will Her Majesty's Government bail out the GLC? These are questions which it is prudent for this House to ask before it allows the GLC to continue on its Rake's Progress.
Many other issues have been raised in this debate. In one very odd passage in his speech, the Minister said that council house sales had almost stopped when his Government came to office. If that was so, why did he feel it necessary to issue an instruction to councils that they should not go on selling?
Mr. Freeson: Like so much else which the hon. Gentleman frequently emits in this House, that is quite inaccurate. No such instruction was issued.
Mr. Tebbit: Then are we to take it that the Minister is happy to allow councils to continue to s***l houses?
Mr. Ronald Brown: The hon. Gentleman might at least say that he is sorry for misleading the House.
Mr. Tebbit: I am not in the least sorry to have brought the Minister to his feet. I am not in the least sorry to have established in this House from the Minister's own mouth that he has not stopped, and will not stop, a council from selling houses. Apparently, we have a new principle in Government policy. There is no reason why, apparently, a council should not sell houses. There will be a great many councils which will heave a sigh of relief and get on with selling again.
I notice that the Minister is performing his Cheshire cat act again. Is there any reason why councils should not sell houses? Has the Minister done anything to prevent them from selling houses? It is difficult to get answers out of this Minister.
Mr. Ronald Brown: The hon. Gentleman is asking stupid questions.
Mr. Tebbit: I am not asking stupid questions. These are not stupid questions for many thousands of tenants who want to buy their houses. These are not stupid questions for many thousands in the new towns who want to buy their houses.
The Minister went on to a general discussion about London's housing position. He said that it was impossible to provide rented housing by any means except social ownership—whatever that means.
The hon. Gentleman prayed in aid a number of independent investigators, but he failed to mention that their investigations were made against the background of the known view of the Labour Party —that private landlords were a scourge to be eliminated and that they would not be allowed to make a profit on their investments at any time that the Labour Government were in power. Small wonder there was no anxiety amongst investors to come forward and invest in housing to rent.
The Minister read a statement very carefully—obviously anxious not to stray from its words—which still left doubts in the minds of many hon. Members.
I wonder whether he would now like to clear up one other small matter. Will
878
he, on behalf of the Government, pledge that the GLC and, indeed, the London boroughs will get every penny that they need to improve the houses that they have purchased under his programme of municipalisation? It is an interesting point. Will they get the money? Again, there seems to be doubt in the Minister's mind whether the councils will get the money that they need to improve their properties.
The hon. Gentleman did not answer any of the points raised in the questions posed by my hon. Friend the Member for Hampstead. In particular, he did not answer whether the circular on municipalisation was or was not being applied up to the day before the Budget when the letter, which was read by my hon. Friend, was issued by his Department. Was there a change of policy at that stage? Was the word "now" in that letter of significance or not? I think that the House is entitled to know. Obviously the Minister thinks it is of no account that the House should know.
The Minister made a speech tonight which I think he will be interested to re-read in 12 months when we have another of these Bills before the House. He seems to think that in the 12 months to come he will be able to carry on with his programme of public expenditure and that the local authorities will be able to carry on with their programmes of public expenditure unchecked by the Chancellor. Indeed, he seems to assume that all will go well and that the GLC will survive to come back in 12 months with demands for more money. I wonder.
The Minister is not prepared to answer any questions tonight. But I think that most of the questions that have been asked will be answered by events during the next 12 months. We shall see in 12 months whether the Minister is laughing or whether the whole country is in tears because of his policies.
10.34 p.m.
Mr. Sydney Bidwell: This debate on the financial affairs of the GLC highlights more than ever the poverty of the Opposition. We have heard a great deal of wishful thinking by hon. Gentlemen opposite about what will result from the undoubted problems which beset Labour-controlled local

879
authorities and the GLC. But I believe that the working people of London will be stark, staring, raving mad if they ever return to a Tory-controlled GLC.
I call the opposition of Conservative Members irresponsible because they seem to bemoan the size of the GLC and the London boroughs without bearing in mind that the existence of the GLC as a wide-ranging entity was not a creation of the Labour Party. It was their idea, and it was resented in Middlesex and in inner London, and the Royal Commission which sat to opine on the re-organisation of conurbations and local authorities proposed a smaller entity of boroughs within a London setting.
We are suffering from the size of the whole operation in the sense that there is a gulf between the elected representatives on these authorities and the public at large, particularly in the boroughs. We know from our experience as councillors that very few people know how local authorities work. They seldom know the names of their GLC members.
I was struck by what the hon. Member for Romford (Mr. Neubert) said about accountability and the democratic system. There was sonic substance in that aspect of the hon. Gentleman's speech, but I do not accept much of the rest of what he said. He said that there is accountability every three or four years in the London boroughs. In our case, in purely electoral terms, the span is longer. It was part of the aim of the Chartists to have annual Parliaments, and, therefore. annual accountability, but accountability should be a continuing process, and it is.
The present state of public understanding and knowledge of this subject leaves much to be desired, and the Opposition are trying to bemuse and confuse the public as a whole. All this is being considered against the background of an inflationary situation for which the Opposition, because of the policies which they pursued prior to the re-election of the Labour Government, must bear a heavy responsibility. I have been looking at the details of the Instruction that we are debating, and one wonders why these figures have been put forward. What justification is there for them?
Tory Members have talked about the detail of their attack this evening, but
880
there has been a noticeable absence of detail. What are they suggesting? What are they relating to? They are dealing with the matter in amorphous terms. My hon. Friend the Minister told the House what the proposed cuts would mean.
The Opposition have used this occasion to raise the old, sterile, hoary. idea logical question of owner-occupation versus municipalisation and rented property, and so on. I recall an old Socialist friend of mine saying that the Tories are very much interested in people owning their own houses and the one next door. That is their view, because if we were all owner-occupiers there would be no private landlords. No one can tell me that the Tory Party, which was cradled in the history of landlordism, has suddenly decided to abolish landlords. I ask Conservative Members to "come off it" because the people of London are too intelligent to be carried away by sterile arguments such as we have heard from them tonight. Difficult as the situation is, the people will not give control back to a party which has fetishes of this kind.
I thought that the hon. Member for Brent, North (Dr. Boyson) was going to use his notorious expertise in education to entertain us. Some of the proposals here are related to the GLC's education obligations. Instead, he and his hon. Friends concentrated on the municipalisation of property. The housing problems of London cannot be solved until there is a significant breakthrough in municipal provision. We do not oppose owner-occupation. I am not sure how many of my hon. Friends and their constituents own their own homes—very few in practice, I suspect, since they are probably mostly still in the hands of the moneylenders.
Mr. Ronald Brown: They are also in the happy position of enjoying their subsidy from the tax man.
Mr. Bidwell: That is a point—
Mr. Michael Shersby rose—
Mr. Bidwell: I cannot deal with a galaxy of interventions. Perhaps my Member of Parliament, the hon. Member for Uxbridge (Mr. Shersby), will intervene later. I am aware of the agitation he has been causing in his constituency over the rate rises which are

881
attendant upon the inflationary situation. In fact, most of the people he has been stirring up against the Government get a better deal out of municipal expenditure than my constituents because his people live in happier surroundings.
Mr. Shersby: I am grateful to my constituent for giving way to me. It is a pleasure to have him as a constituent and to know that he is a freeholder in my constituency. I am sure that he will agree with me that it was a notable experience when about 5,000 constituents turned out in Uxbridge High Street last week to demonstrate against a 54 per cent. rate increase by the London borough of Hillingdon. Does he not agree that the increase in the rates levied by the borough upon my constituents is caused in part by the municipalisation programme being pursued by the Socialist-controlled GLC?
Mr. Deputy Speaker (Mr. George Thomas): Order. It would be easier if the hon. Gentleman had tried to catch my eye.
Mr. Shersby: I am grateful to you for your guidance—
Mr. Deputy Speaker: Order. We are getting rather close to the finishing time, and interruptions should be kept brief.
Mr. Shersby: I am grateful for your guidance on these matters, as always, Mr. Deputy Speaker. I simply wanted to say that the hon. Member for Ealing, Southall (Mr. Bidwell) should have regard for the plight of his neighbours in Hillingdon because of the expenditure incured by the Greater London Council.
Mr. Bidwell: The Socialists in control of the London borough of Hillingdon are wise enough not to cut back on the social services. We hear terrible stories from Havering about the cuts in the refuse services and in expenditure on the parks. I hope that will never happen in the Socialist-controlled London borough of Hillingdon. It is the Tories in the borough who, by the manner in which they live, gain a great deal from municipal activity.
The continuation of Socialist control of the London borough of Hillingdon is made possible mainly by the intelligence of the working people of Hayes, the con-
882
stituency adjacent to mine. I believe they will continue to show that intelligence.
We are waiting for the Layfield Report on the rating system. We have to find a solution to the problem of inflation which could lead to reductions in public services and in our standard of living. Hopefully, Layfield will point the way to a solution. I hope we shall not have wholesale raffles to rectify an unfair taxation system.
It is the working class that gets the worst end of the stick and the middle class that gets the advantage from the rating system because that system is based on hypothetical rent valuations. People pay not on the value of the land they occupy but on the hypothetical rent value. We cannot have an ideal Labour movement until we deal with the ownership of land. Our memories go back to the iniquitous Tory Rent Act of 1957, designed to create shortages of rented property. Even the Tories had to mitigate its effects.
Only Socialist measures will suffice for London. I disagree with my hon. Friend the Minister for Housing and Construction who said that we should not make this issue a political football and fight an ideological battle over it. It is an ideological battle involving such issues as tenant exploitation, how much land a person should own, and whether there should be a leasehold system with Socialist ownership of land. My party has not yet taken all the necessary steps to deal with this. There must be sterner social measures against those who are a barrier to progress.
The hon. Member for Brent, North has become nationally famous for his old-fashioned utterances. I thought that he would entertain us about education because he knows a lot about that, but he did not—[AN HON. MEMBER: "He is getting a note] I am not getting a note. The hon. Member for Brent, North alluded to the growth of local authority expenditure and its relationship to the gross national product. He gave us a range from 1955— [Interruption.]
Mr. Deputy Speaker: Order. I hope that hon. Members will not interrupt the hon. Gentleman who has the Floor, because their own hon. Friend is waiting to wind up.
Mr. Bidwell: The hon. Member is correct: that is poison to the Tory Party. They want private affluence and public squalor, as Nye Bevan put it. That is the hallmark of Toryism. We cannot reverse that trend unless we increase the weight of local authority expenditure.
Mr. Hugh Rossi: On a point of order, Mr. Deputy Speaker. It is the courtesy of the House to allow the Opposition spokesman sufficient time to wind up on behalf of the Opposition. The hon. Member for Ealing, Southall (Mr. Bidwell) appears to be denying my hon. Friend that opportunity. I wish to draw the attention of the House to that fact. I hope that the hon. Member will have regard to the due rules and conduct of the House.
Mr. James Wellbeloved: Further to that point of order, Mr. Deputy Speaker. Are we to understand from that intervention that, for the first time in my memory on the proceedings on a private Bill, Her Majesty's Opposition are taking an official view? In your ruling, Sir, would you take account of the fact that in debates on private Bills, which are the responsibility of the Chairman of Ways and Means, it is most unusual for a political party to take a political stand on a matter which, according to the usual practice and almost to the Standing Orders of the House, is a matter for private Members?
Mr. Ronald Brown: Further to that point of order, Mr. Deputy Speaker. In your ruling, Sir, I hope that you will also understand that many hon. Members on this side have sat here all evening waiting to take part in the debate. In a matter which affects all London constituencies, and on which as the Opposition are trying to reduce the money for housing by £50 million, we are entitled to have our say.
Mr. Ernest G. Perry: Further to that point of order—
Mr. Deputy Speaker: Order. Let me answer the three others first. The courtesies of the House are well known to all of us. So far as I am concerned, the Front Bench speakers usually intervene on private business. That is all that I know of what has been taking place.
Mr. Bidwell rose—
Mr. Perry: Further to that point of order, Mr. Deputy Speaker. I should like to point out that I have been sitting here since 7 o'clock—
Mr. Deputy Speaker: Order—
Mr. Perry: —waiting to speak—
Mr. Deputy Speaker: Order. I have noticed the hon. Member—I have been glad of his company—but I can do nothing about that.
Mr. Perry: Further to that point of order, Mr. Deputy Speaker. While you may have been glad of my company, Sir. there are some here who have not.
Mr. Deputy Speaker: Time is getting on.
Mr. Wellbeloved: Further to the point of order, Mr. Deputy Speaker. Just to clarify your ruling, Sir, is it a fact that the Opposition have a right to wind up a debate on what is after all private Members' business? Is it not proper that the time on private Members' business should be taken up by back benchers representing constituency views rather than consumed by Opposition spokesmen who merely wish to make petty party political points?
Mr. Rossi: Further to that point of order, Mr. Deputy Speaker. It will be noted that my hon. Friends who happen to be sitting on the Front Bench are members of the back benches. They are participating in the debate as back-bench London Members. No official Opposition Front Bench Member has intervened so as to give as many back benchers as possible an opportunity to participate. It is obvious that Government Members are determined not to allow the right of reply to Members who represent the opposite view in this debate. The general public can draw their own conclusions from that denial of the right of reply.
Mr. Deputy Speaker: The House is built on courtesies between both sides, and I hope we shall acknowledge them.
Mr. Ronald Brown: On a point of order, Mr. Deputy Speaker. What has been said by the hon. Member for Hornsey (Mr. Rossi) is a travesty of the truth. The hon. Gentleman has been in the House for part of the debate but many of my hon. Friends and I have been here throughout. Many of my hon. Friends

885
wish to contribute to the debate, and it is in their interests to do so.
Mr. Geoffrey Finsberg: Further to that point of order, Mr. Deputy Speaker. It is a fact that the hon. Gentleman was originally offered time to wind up for the Government but he did not wish to exercise that right. We are now in the position of having my hon. Friend the Member for Ravensbourne (Mr. Hunt) denied the right of reply.
Mr. Deputy Speaker: May I suggest that in the remaining four minutes we return to the debate.
Mr. Bidwell: I am sorry, Mr. Deputy Speaker, I did not realise that there was any courtesy arrangement. When Conservative Members were interjecting, I anticipated that they wished me to keep going. I thought that they were interested in the contribution that I was making. I mean that quite sincerely.
Mr. Tebbit: He is daft enough to believe it too.
Mr. Bidwell: We had an interesting speech from the Opposition Front Bench at the beginning of the debate from the hon. Member for Hampstead (Mr. Finsberg), the Opposition's London spokesman. There was a great deal of substance in what he had to say. However, if it is of any advantage to the Opposition I shall sit down and let the hon. Member for Ravensbourne (Mr. Hunt) reply.
10.58 p.m.
Mr. John Hunt: I wish to protest most strongly at the way in which I, as a Member representing a Greater London constituency, have been treated by those on the Government benches. A clear undertaking was given and it has been breached. That is an affront to the House, to the Opposition and to those` who represent Greater London constituencies who happen to take a different point of view from those who sit on the Government benches.
Mr. Ernest G. Perry: On a point of order. Mr. Deputy Speaker. I should like to join the hon. Gentleman in his remarks—
Mr. Deputy Speaker: Order. That is clearly not a point of order.
Mr. Hunt: I believe that we should have been given the opportunity to wind up the debate. There are a number of important points which need to be made in opposition to the speeches that we have heard from the Government benches. It is clear that we have been denied that opportunity. A number of my hon. Friends put questions to the Minister, and in the course of his speech no attempt was made to answer them. I was hoping to have the opportunity to challenge him again on a number of matters and perhaps to elicit answers from him.
For me this is a most unfortunate debut on the Opposition Front Bench. This is the first time that. I have had the pleasure, after 10 long and weary years in the House, of speaking from the Front Bench. I now find myself in the position of being deprived of my right of reply. My speech has been truncated and I now have only half a minute in which to present the case against the policy of municipalisation. That is a policy which we believe is damaging, irresponsible and irrelevant to the housing needs of greater London.
This debate has taken place against the backcloth of the traumatic happenings across the river at County Hall. I was hoping that during my speech—
It being Eleven o'clock, the debate stood adjourned.

ADJOURNMENT
Postponed proceeding on Question, That this House do now adjourn, resumed.
It being after Ten o'clock, the motion for the Adjournment of the House lapsed, without Question put.
Resolved, That this House do now adjourn.—[Mr. Paviatt.]
Adjourned accordingly at Eleven o'clock.

CIVIL SERVICE
  Referendum
  Referendum
  Government Work (Transfer to Scotland)
  Government Work (Transfer to Scotland)
OVERSEAS DEVELOPMENT
  Aid
  Aid
ENVIRONMENT
  Motor Vehicle Licences
  Motor Vehicle Licences
  Football (Hooliganism)
  Football (Hooliganism)
  Homeless Persons
  Homeless Persons
  Housing Associations
  Housing Associations
  Road Accidents
  Road Accidents
  Sewerage Charges (Charities)
  Sewerage Charges (Charities)
  Local Authority Mortgages
  Local Authority Mortgages
  Driving Test
  Driving Test
  Tied Cottages
  Tied Cottages
  High Alumina Cement
  High Alumina Cement
  Departmental Correspondence
  Departmental Correspondence
  SECURITY
  SECURITY
  PRIME MINISTER (VISITS)
  PRIME MINISTER (VISITS)
  IRAN
  IRAN
  EUROPEAN COMMUNITY
  EUROPEAN COMMUNITY
  CBI AND TUC
  CBI AND TUC
  PRIME MINISTER (ENGAGEMENTS)
  PRIME MINISTER (ENGAGEMENTS)
  GOVERNMENT MINISTERS
  GOVERNMENT MINISTERS
  ECONOMIC AFFAIRS (MINISTERIAL BROADCAST)
  ECONOMIC AFFAIRS (MINISTERIAL BROADCAST)
  REFERENDUM
  REFERENDUM
  COMMONWEALTH HEADS OF GOVERNMENT (MEETING)
  COMMONWEALTH HEADS OF GOVERNMENT (MEETING)
  MINISTERS' TRANSPORT
  MINISTERS' TRANSPORT
EDUCATION AND SCIENCE
  Nursery Education
  Nursery Education
  Community Halls and Centres
  Community Halls and Centres
  Teachers of the Deaf
  Teachers of the Deaf
FOREIGN AND COMMONWEALTH AFFAIRS
  Hong Kong
  Hong Kong
  Law of the Sea Conference
  Law of the Sea Conference
  Middle East
  Middle East
  European Community (Industrial Policies)
  European Community (Industrial Policies)
  Asian Commonwealth Countries
  Asian Commonwealth Countries
SCOTLAND
  Land Use Maps
  Land Use Maps
  Fishing Limits
  Fishing Limits
  Sheep Rearing
  Sheep Rearing
  Agriculture
  Agriculture
  Scottish Assembly
  Scottish Assembly
  Mentally Handicapped Persons
  Mentally Handicapped Persons
  Schools (Part-time Working)
  Schools (Part-time Working)
  Wester Hailes Secondary School
  Wester Hailes Secondary School
NATIONAL FINANCE
  Money Supply
  Money Supply
  Overspending
  Overspending
  European Community Membership
  European Community Membership
  Value Added Tax
  Value Added Tax
  Budget Proposals
  Budget Proposals
  Balance of Payments (Non-Oil Deficit)
  Balance of Payments (Non-Oil Deficit)
  Inflation
  Inflation
  Tax Evasion (Prosecutions)
  Tax Evasion (Prosecutions)
  Vehicle Taxation
  Vehicle Taxation
  Public Expenditure
  Public Expenditure
  Scottish Budget
  Scottish Budget
  Nationalised Industries
  Nationalised Industries
  Whisky
  Whisky
  War Widows' Pensions
  War Widows' Pensions
  Consumer Expenditure
  Consumer Expenditure
  Income Tax
  Income Tax
  £ Sterling (Value)
  £ Sterling (Value)
  Post Office
  Post Office
SOCIAL SERVICES
  Single-Parent Families
  Single-Parent Families
  Homeless Single Persons
  Homeless Single Persons
  Voluntary Organisations (Aid)
  Voluntary Organisations (Aid)
  Doctors
  Doctors
  Telephone Charges (Pensioners)
  Telephone Charges (Pensioners)
  Benefits (Appeals)
  Benefits (Appeals)
  Thanet
  Thanet
  Supplementary Benefits
  Supplementary Benefits
  Attendance Allowance
  Attendance Allowance
  Nurses
  Nurses
  Invalid Vehicles
  Invalid Vehicles
  Hospital Ward Closures (Kent)
  Hospital Ward Closures (Kent)
  Bone Marrow Donors
  Bone Marrow Donors
  Departmental Publications
  Departmental Publications
  War Widows' Pensions
  War Widows' Pensions
  Widows' Allowance
  Widows' Allowance
  Sickness Benefits
  Sickness Benefits
  Unemployment Benefit
  Unemployment Benefit
  Abortion
  Abortion
  Norton Community School for Boys
  Norton Community School for Boys
  Hostels
  Hostels
  Sterile Water
  Sterile Water
AGRICULTURE, FISHERIES AND FOOD
  Departmental Publications
  Departmental Publications
  Beef Imports
  Beef Imports
  Benefits (Recipients)
  Benefits (Recipients)
  Butter and Cheese (New Zealand)
  Butter and Cheese (New Zealand)
  Food Prices
  Food Prices
  Beef Stocks
  Beef Stocks
  Food Import Negotiations
  Food Import Negotiations
  Agricultural Land
  Agricultural Land
  Farming Costs
  Farming Costs
  European Community Grants (South-West England)
  European Community Grants (South-West England)
  LAND CHARGES INDEX (SEARCHES)
  LAND CHARGES INDEX (SEARCHES)
INDUSTRY
  Textile Industry
  Textile Industry
  Clothing
  Clothing
  Post Office
  Post Office
  European Community Grants and Loans
  European Community Grants and Loans
  Transnational Corporations
  Transnational Corporations
DEFENCE
  Departmental Publications
  Departmental Publications
  Equipment and Works Programmes
  Equipment and Works Programmes
  West Germany
  West Germany
  Expenditure (Scotland)
  Expenditure (Scotland)
  Army Manpower
  Army Manpower
  North Atlantic Treaty Organisation
  North Atlantic Treaty Organisation
  Guided Missile Destroyer Programme
  Guided Missile Destroyer Programme
  Harrier Aircraft
  Harrier Aircraft
ENERGY
  Oil (Revenue and Expenditure)
  Oil (Revenue and Expenditure)
  Electricity Boards
  Electricity Boards
  Institute of Fuel
  Institute of Fuel
  Conservation Projects (Harwell)
  Conservation Projects (Harwell)
  Heat and Power Schemes (Private Industry)
  Heat and Power Schemes (Private Industry)
  Heat and Power Production
  Heat and Power Production
HOME DEPARTMENT
  Football Hooliganism
  Football Hooliganism
  Criminal Injuries Compensation
  Criminal Injuries Compensation
  Crime Victims
  Crime Victims
  Community Service
  Community Service
  Prisoners (Divorce)
  Prisoners (Divorce)
  Departmental Publications
  Departmental Publications
  Animals (Experiments)
  Animals (Experiments)
  Batley Community Development Project
  Batley Community Development Project
  Police (Convictions)
  Police (Convictions)
  Police (Complaints)
  Police (Complaints)
  Crimes of Violence
  Crimes of Violence
  Marriage Guidance and Divorce
  Marriage Guidance and Divorce
  Police Forces
  Police Forces
  Police (Retirement Housing)
  Police (Retirement Housing)
  Prevention of Terrorism (Temporary Provisions) Act 1974
  Prevention of Terrorism (Temporary Provisions) Act 1974
HOUSE OF COMMONS
  Norman Shaw North Building
  Norman Shaw North Building
  SCOTTISH ASSEMBLY
  SCOTTISH ASSEMBLY
NORTHERN IRELAND
  Factories
  Factories
  Employment
  Employment
  Books (Schools and Libraries)
  Books (Schools and Libraries)
  Farms (Water Supply)
  Farms (Water Supply)
PRICES AND CONSUMER PROTECTION
  Inflation
  Inflation
TRADE
  European Community (Investment)
  European Community (Investment)
  Treaties
  Treaties
  Sri Lanka (Tea Plantations)
  Sri Lanka (Tea Plantations)
  Shipping (Pollution)
  Shipping (Pollution)
EMPLOYMENT
  Building (Strikes)
  Building (Strikes)
  Output
  Output
  Footwear
  Footwear
  Wales
  Wales
  EMPLOYEES IN EMPLOYMENT IN WALES FROM JUNE 1969 TO JUNE 1973
  EMPLOYEES IN EMPLOYMENT IN WALES FROM JUNE 1969 TO JUNE 1973
  Wirral
  Wirral
  Departmental Publications
  Departmental Publications
  Social Contract
  Social Contract
WALES
  Junior Infant School, Llangollen
  Junior Infant School, Llangollen
  Meat Marketing
  Meat Marketing

Preamble
The House met at three of the clock: The LORD CHANCELLOR on the Woolsack.
Prayers—Read by the Lord Bishop of Birmingham.
Viscount Maughan—Took the Oath.

NORTHERN IRELAND: WORKER PARTICIPATION
Lord BROCKWAY: 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 proposals have been made for workers' participation in the Harland and Wolff shipyards in East Belfast and the Ben Sherman shirt factory in Londonderry following the takeover of the majority of the shareholdings.
The PARLIAMENTARY UNDERSECRETARY of STATE, NORTHERN IRELAND OFFICE (Lord Donaldson of Kingsbridge): My Lords, the noble Lord may have seen the discussion paper on worker participation in Harland and Wolff, which my right honourable friend the Minister of State at the Northern Ireland Office published in March. It was widely distributed throughout the workforce, and I am glad to say it has been
2
well received. The Minister has since invited concrete proposals from the yard's joint consultative council to be put to him within two or three months. The board of Ben Sherman (1975) Limited is at present engaged in a severe programme of rationalisation, involving factory closures. The workforce has been consulted, but there are no proposals at present for any formal structure of worker participation, though there have been informal discussions about it in the company.
Lord BROCKWAY: My Lords, I thank the Minister for that very full reply. May I ask him, first, whether the radical proposals made in the discussion paper for Harland and Wolff, including trade union elections to the board, represent the view of the board regarding workers' participation generally? Secondly, may I ask him whether the extension of these proposals for industrial democracy would assist the Northern Ireland TUC in their encouragement of a policy against violence and leading towards co-operation between the communities?
Lord DONALDSON of KINGS-BRIDGE: My Lords, I can certainly answer the second question in the affirmative. There is no doubt that if something constructive comes out of these discussions it will help the very difficult situation over there. As regards the more radical suggestions, particularly trade union elections, to which my noble friend referred, I do not think we are at a stage where we can comment. The

3
workforce has been asked to put forward proposals based on a discussion of this paper, and I think we must await what it has to say. I must stress that this is a policy which is being applied to Harland and Wolff, and it has not been adopted generally for the United Kingdom as a whole.
The EARL of LONGFORD: My Lords, in view of the unhappy record of Harland and Wolff over religious discrimination, which is not disputed, may I ask what steps the Minister has in mind to prevent this recurring in the future?
Lord DONALDSON of KINGSBRIDGE: My Lords, this is perhaps a little outside the terms of the Question, but I can give the noble Earl two quick replies. First, there is some hope in recruiting and training people taken from a wide area. This is going on and we are very hopeful about it. Secondly, there is a "mix" of people in Harland and Wolff, and there is considerable hope that if this kind of worker participation comes about it will help to ease the general religious problem.
Lord POPPLEWELL: My Lords, can my noble friend give any information to the House as to the progress made towards, and the plans envisaged for, the discussions in connection with this paper, which, if successful, could have such a great influence on the situation over there?
Lord DONALDSON of KINGSBRIDGE: Yes, my Lords. I have already said that my colleague the Minister of State has asked the workforce to submit proposals to him based on this paper within a month or two.
Viscount MONCK: My Lords, does the noble Lord agree that the position he has described to us regarding the Ben Sherman shirt factory is completely opposite to the policy of his right honourable friends the Ministers for Trade and Industry?
Lord DONALDSON of KINGSBRIDGE: My Lords, it seems to me that it is in line with that policy, but perhaps I have not fully understood the noble Viscount.

UNITED STATES' BICENTENNIAL
3.12 p.m.
Lord MONTAGU of BEAULIEU: 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 contribution of a permanent nature they are proposing to give to the United States of America in recognition of their bicentennial in 1976.
The PARLIAMENTARY UNDERSECRETARY of STATE, FOREIGN and COMMONWEALTH AFFAIRS (Lord Goronwy-Roberts): My Lords, the British Bicentennial Liaison Committee, under the chairmanship of the noble Marquess, Lord Lothian, have already made proposals for a contribution by Her Majesty's Government to the commemoration of the bicentennial, on which decisions will soon be taken. Those decisions will be announced in due course.
Lord MONTAGU of BEAULIEU: My Lords, does the noble Lord not agree that this is an excellent occasion for the British people to present the people of the United States with something of a more permanent nature—perhaps an exhibition or something which would permanently commemorate our common heritage and cultural heritage?
Lord GORONWY-ROBERTS: My Lords, I take full note of what the noble Lord has said. I agree that our contribution must surely be worthy of the occasion.
Lord MAYBRAY-KING: My Lords, as many of the best speeches in favour of American Independence were made at the time of the revolutionary war by Members of the British Parliament, would it not be very appropriate that the British Parliament itself should celebrate this momentous bicentenary?
Lord GORONWY-ROBERTS: My Lords, that is another most worthy suggestion. At this stage I cannot anticipate what the Committee will report to my right honourable friend. At the moment he is considering a number of very interesting proposals.
Lord BOOTHBY: My Lords, will the noble Lord bear in mind that we are not at present in a position to give any money to the United States of America?
Lord GORONWY-ROBERTS: My Lords, on these occasions there are some gifts more valuable than money.
Lord DAVIES of LEEK: My Lords, is the noble Lord aware that Thomas Jefferson, who was born in Glyncorrwg and was a fellow Welshman, wrote part of the Declaration of Independence; and that at that time of the revolution British Peers were judicious and wise enough to recognise that, when Americans were throwing off the incubus of imperialism, they were not to be called "Commies"?
Lord GORONWY-ROBERTS: Yes, my Lords; actually Thomas Jefferson was born in Caernarvon and not in Glyncorrwg. But I join my noble friend in his enthusiastic greeting of this commemoration. America was, after all, the first example of a successful, although forced, British policy of decolonisation.
Lord TREVELYAN: My Lords, is the Minster aware that there will be an exhibition in the British Museum to celebrate the bicentennial?
Lord GORONWY-ROBERTS: My Lords, I must add still one more interesting proposal to the long list now before my right honourable friend.
Lord MONTAGU of BEAULIEU: My Lords, may I ask the noble Lord whether Her Majesty's Government will be advising Her Majesty the Queen to send Members of the Royal Family to take part in some celebrations?
Lord GORONWY-ROBERTS: My Lords, I have no doubt that that suggestion is under consideration.
Lord WYNNE-JONES: My Lords, will my noble friend bear in mind that another Welshman, Elihu Yale, was the founder of Yale University, and surely we ought to recognise the important part that Wales played in helping the first country that broke away from the British Empire?
Lord GORONWY-ROBERTS: My Lords, a great many countries took part in the formation of the United States, including Wales. I like to think that
6
the Welsh contribution was a fairly considerable and valuable one.

POSTAL SERVICES AND SCOTLAND
Lord CAMPBELL of CROY: My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government whether they are satisfied with the finnancial position of the Post Office Corporation and its effects on modernisation and services in Scotland.
The MINISTER of STATE, DEPARTMENT of INDUSTRY (Lord Beswick): My Lords, the financial position of the Post Office Corporation is not satisfactory. There is no reason to believe that the effect on Scotland will differ from that on any other part of the United Kingdom.
Lord CAMPBELL of CROY: My Lords, I am grateful to the noble Lord for that Answer. Can he confirm or correct reports in the Press earlier this week that a recent reassessment had shown a much larger deficit for this year than had previously been budgeted for?
Lord BESWICK: Yes, my Lords; it appears that an updating of information indicates that the deficit will be larger than that originally thought. The exact amount is not known for certain, but I think that it will not be of the order mentioned in the Press. Discussions about this and what to do about it are now taking place.
Lord CAMPBELL of CROY: My Lords, can the noble Lord give any indication as to whether it is intended to meet this higher deficit either by higher charges or by reduction in services?
Lord BESWICK: Not at the moment, my Lords. So far as the subsidy is concerned, in view of the experience we had under the previous Administration when deficits were met by subsidies and problems mounted up, I should have thought we had to learn from that experience and I hope we shall not lightly go back to it.
Viscount MASSEREENE and FERRARD: My Lords, can the noble Lord say whether this deficit will be reduced by greater efficiency in the Post

7
Office? Is the noble Lord aware that, in the last fortnight, letters in the newspapers have given several instances of very great inefficiency?
Lord BESWICK: My Lords, I am not sure whether the noble Viscount was here last week, but I referred then to inquiries which have been held into the workings of the Post Office and which indicated that the state of efficiency was not that to which the noble Viscount refers.

MENTAL HEALTH (AMENDMENT) BILL
Read 3a, and passed.

LIMITATION BILL [H.L.]
3.19 p.m.
The LORD CHANCELLOR (Lord Elwyn-Jones): My Lords, I beg to move that this Bill be now read a second time. In 1971 the Law Reform Committee were asked by my predecessor, the noble and learned Lord, Lord Hailsham of Saint Marylebone, to consider what changes in the law of limitation were in their opinion desirable, and in 1972 to give priority to limitation in personal injury claims. The Bill now before the House is the result of the interim report of the Committee in answer to that request. I should like to express my gratitude, which I know the House will share, to Lord Justice Orr and to other members of the Law Reform Committee for their carefully considered recommendations whose results are now embodied in this Bill. Before dealing with the Bill, it may be convenient for me to summarise briefly the law in this field.
The Limitation Act 1939 contained a period of limitation of six years for all actions in tort, including actions for personal injuries. After the war, the six-year period was criticised as too long for actions for personal injury, because the evidence of eye witnesses, given six years or more after the injury may have been caused, was thought to be of little probative value. In 1954, therefore, the limitation period was reduced in personal injury actions to three years.
Events were soon to show that both six years and three years could be too short in certain classes of personal injury
8
action. Where a claim lies in tort—and this is usually the case where the claim is in respect of personal injury—the position is that the cause of action accrues at the time injury is first suffered. The ordinary rules work well enough when the victim of the accident suffers external injuries which are immediately apparent. But the cases over the last 25 years show that very serious injuries—sometimes even fatal injuries—may be sustained not as a result of an accident, but as a result of exposure to dangerous conditions or substances which cause an insidious disease. Words like pneumoconiosis are now, alas, well-known to us. For those of us who were brought up in industrial South Wales, its crippling and often deadly presence was a grim feature of every mining valley.
The cause of action in such a case accrues when the disease is first contracted, when there may be no symptoms by which its victim would have warning of its presence. I myself encountered many such cases, often of a most distressing character, when I was in practice at the Bar, and that, I know, is the experience of other noble Lords who are present today. Clearly, the law of limitation should provide for such cases, and the recent developments in the law in this field have been largely concerned with the search for an answer to this problem.
The problem of the plaintiff who could have had no knowledge of his injury was highlighted in the case of Cartledge and others v. Jopling in 1961. The plaintiffs in that case had contracted pneumoconiosis and could not reasonably have found this out within the fixed period. It was clearly wrong that these plaintiffs should have no remedy, but the courts—including your Lordships' House—could not do anything to help. They had to apply the law laid down by Parliament.
In 1961, a Committee was appointed under the chairmanship of the noble and learned Lord, Lord Edmund-Davies, to consider this problem. I am delighted to note that he is to make his maiden speech today. I am certain that the House will be looking forward to hearing his views, knowing the great expertise and experience which he brings to bear upon this as upon kindred subjects. That Committee recommended in 1962 that the plaintiff should not be debarred if he started proceedings in respect of his

9
injury within 12 months of his "date of knowledge "; that is, within 12 months of the earliest date on which he could reasonably have been expected to discover the existence of his injury and its cause.
These recommendations were implemented in the Limitation Act 1963. Corresponding provisions were made for claims which were made after an injured person's death on behalf of his dependants. The 1963 Act has caused difficulty, and has been criticised in the courts, in part because of its drafting and its complexity, but also because of the substance of its provisions. The 12 months' period from discovery of the material facts was found to allow insufficient time to bring proceedings, and the provisions for fatal accident cases were found to cause injustice; for example, to the widow who could not have known of the cause of her husband's death for more than a year after it had occurred. To deal with these problems, Part I of the Law Reform (Miscellaneous Provisions) Act 1971 extended the period from an injured person's date of knowledge "to three years, and in fatal cases allowed three years from the death—or from the date of knowledge of the dependant concerned—for bringing proceedings.
One further problem remained; that is, what amount or sort of knowledge on the part of the injured person it is that starts time running against him. In the case off Central Asbestos Co. Ltd. v. Dodd, your Lordships' House considered this problem. Their analysis of this question suggests that the knowledge of the plaintiff can, under the existing law, be defined in three ways. First, it may be knowledge that his injury resulted from something which the defendant did, or did not do; this is a simple, factual issue of cause and effect. Secondly, the plaintiff may have that knowledge and also knowledge that the defendant was in some way at fault. Thirdly, the plaintiff may have knowledge of the act or omission and of "fault" and knowledge that the defendant is likely to be held liable in law to pay him damages. This last state of knowledge is usually referred to as knowledge by the plaintiff that he has "a worthwhile cause of action" against the defendant.
The courts have been much exercised in recent years by the question whether the
10
present Statute Law enables them to apply the "worthwhile cause of action" test. There have been differing decisions on the point, and all I can say is that the interpretation of the 1963 Act is uncertain. But the House has now to consider this question not in its judicial but in its legislative capacity. I hope your Lordships will rejoice with me that this matter can now be considered as a question of principle, and that a new approach can be followed. This, indeed, is the essential function of Parliament in relation to the law when it becomes evident that the intervention of Parliament is needed.
The Bill now before the House tackles the problem of the hidden injury or disease in two ways. First, it defines the "date of knowledge" test afresh. Secondly, it confers a discretion on the court to extend time in proper cases. I should make it clear that I envisage no resulting change for cases of apparent and known accidental injury—which are the vast majority of personal injury cases. Where the plaintiff can show no reason for delay, but has merely been dilatory, the ordinary period of limitation of three years will, no doubt, apply. In this connection, I should observe that there are cogent arguments in favour of the proposition that in personal injury claims there should be no period of limitation. The Law Reform Committee gave very careful consideration to them and recommended against any such solution. They pointed out that stale actions involve weak evidence and make it harder to arrive at a just conclusion; that plaintiffs and their advisers should in general be given some impulse to get on with their proceedings; that to abandon limitation completely in personal injury cases would lead to difficulty with insurance; and that defendants should not be exposed to the nuisance value of stale claims. After careful thought, and taking into account the proposed discretion that the Bill will allow to extend time in proper cases (which is itself a major change), the Government have decided to adopt their recommendations.
As I have said, the "date of knowledge" test is now reformulated in subsection (6) in the middle of page 2 of the Bill. The "worthwhile cause of action" test will clearly not apply. In this respect, the Law Reform Committee and the Government have accepted the

11
view of the majority of your Lordships' House in the case of Dodd. But, and this in a sense is the quid pro quo to meet the difficulty that an earlier date of knowledge could cause hardship in some cases, the Bill confers on the court power to extend time in appropriate cases. The general discretion thus to extend time is the greatest change in the law which is made by the present Bill. The result should be that there will no longer be any impulse to put a strained interpretation on the "date of knowlege" provisions, while at the same time it should be possible for the courts to develop a sensible and humane code for dealing with those cases in which a strict application of the rules would cause injustice. In short, no deserving plaintiff who can persuade the court that justice between the parties requires the claim to proceed will be turned away without a trial on the merits of the case.
I should mention briefly the form of the Bill. It inserts new sections into the Act of 1939. Provisions for fatal accident as well as personal injury actions are for the first time included in the 1939 Act. This is an economical method of achieving the desired result, and brings into one place the two limitation codes applying both to personal injury actions and to fatal accidents claims. I hope this may be found to be convenient in practice.
I turn now to the provisions of the Bill. The new Section 2A inserted into the 1939 Act by Clause 1 of the Bill, provides for the time limits in personal injury actions. The existing period of three years is preserved unchanged, as is the general rule that this period runs from the date on which the cause of action accrued, which in the case of an action in tort for personal injury is the date on which the injury is suffered. New Section 2A makes provision also for the less common case (but the case which causes, as I have indicated, the most difficulty) in which the plaintiff is ignorant of his injury or of its cause for some time after suffering it. Under the new "date of knowledge" test recommended by the Committee, time is to run from the date when the plaintiff first knew his injury was "significant" and was attributable to an
12
act or omission on the part of the defendant; but knowledge whether or not he has a cause of action is irrelevant. The new Section 2B provides for limitation periods in actions under the Fatal Accidents Acts. Again, the existing law is largely preserved: proceedings under the Fatal Accidents Acts are barred if the deceased was himself out of time to brine proceedings for personal injury when he died, and the period of limitation remains at three years, which is to run either from the date of death or the "date of knowledge" of the dependant for whose benefit the action is brought, whichever is the later.
New Section 2D provides that the court shall have a general discretion to override time limits if to do so would be fair as between the plaintiff and the defendant. The court must consider all the circumstances of the case; but guidelines are given in the Bill, specifying the matters to which the court should have particular regard. These include the length of the plaintiff's delay, and the reasons for it; the conduct of the defendant; disability suffered by the plaintiff after his injury; and the nature of any expert advice given to him, whether sound or whether misleading. This might include advice about his prospects of success in proceedings, so there is some similarity between this consideration and the "worthwhile cause of action" test; but here it will not by itself determine the plaintiff's success or failure on the limitation issue; it is only one of the factors the court will take into account in assessing whether it would be equitable, in the broadest sense of the meaning of that word, to override the limitation defence, having regard to the prejudice to the plaintiff if he is not allowed to proceed, and to the defendant if he is.
The Bill makes two other important changes in the law. It abolishes both the preliminary application for leave to bring proceedings out of time and the rule under which time runs against a person under disability if he is in the custody of a parent. The application for leave was introduced in 1963 to act as a filter to stop hopeless cases at the very outset. But experience has shown that hopeless cases are in practice weeded out at the earlier stage of advice by the intended plaintiff's solicitor or counsel, and when an application is made it usually

13
succeeds. The procedure is burdensome, expensive and largely unnecessary. Its abolition, as recommended by the Law Reform Committee, which will, I think, be welcome to trade unions and to solicitors representing prospective plaintiffs, is achieved by the repeal of Sections 1 to 3B of the Limitation Act 1963.
There is a rule—usually called the "custody of a parent "rule—which concerns the case in which a child or other person under disability suffers injury. In the ordinary way, time does not start to run against a child until he comes of age. But if at the time of his injury he is in the custody of a parent, time starts to run at once, as soon as the child is injured. This rule first appeared in the Limitation Act 1939 and applied only to proceedings against public authorities because of the vulnerability of local authorities then thought to exist to claims arising from accidents to schoolchildren, which under the usual rule might be made after the child had attained the age of 21, perhaps many years after the injury. In 1954, when Parliament abolished the special protection of public authorities, the "custody of a parent" rule was extended to all personal injury actions. The Law Reform Committee found this rule to be unsatisfactory in operation. Having weighed the choice between rationalisation and abolition, they recommended abolition. Clause 2 of the Bill gives effect to this by replacing Section 22(2) of the 1939 Act with a provision which does not contain the "custody of a parent" rule.
On one issue the Law Reform Committee were unable to reach a unanimous conclusion; this concerned the running of time in cases where knowledge of the cause of injury can be acquired only with expert advice. They offered alternative solutions to this question, which they styled the strict" and the "liberal" approaches. On 28th of June last year when I announced that the Government accepted the recommendations of the Law Reform Committee, I stated our view that, on the question which divided the Committee, the law should provide that a plaintiff should not lose his right to an extension of time if he had taken reasonable steps to obtain and act on expert advice, but had, nevertheless, not acquired the necessary knowledge.
14
The point arises where the injured person cannot be expected to discover the cause of his disease without advice, whether medical or legal or of any other kind. The Government accept the view that a man should not be fixed with knowledge of a fact if he has taken every reasonable step, by way of taking expert advice or otherwise, to ascertain it but has failed to do so, and that time should not run against a man who has been given wrong advice, albeit by a doctor, or even by a lawyer—it is sometimes known that they do occasionally, but rarely, give wrong advice—as a result of which he fails to ascertain facts by which he would know that his disease was caused by an act or omission of the defendant. This view is reflected in subsection (8) on pages 2 and 3 of the Bill. I hope that this account—I fear it has taken a long time—explains the more important provisions of this Bill. I believe that it both clarifies and improves the law of limitation in this difficult area. It will give the courts the means to deal fairly with hard cases and will greatly reduce the risk of those involved in those cases being unable to obtain redress. It is accordingly a useful means of law reform. I commend it to the House, and beg to move.
Moved, That the Bill be now read 2a.—(The Lord Chancellor.)
3.42 p.m.
The Earl of MANSFIELD: My Lords, this is a Bill which will be generally welcomed in all parts of your Lordships' House. I feel that it will also command general support, representing as it does a measure of law reform which some might say was well overdue. It is also perhaps in order to offer the Government a measure of congratulation for having found time to present this Bill during what is already turning out to be an overcrowded Session. Certainly we are grateful to the noble and learned Lord the Lord Chancellor for the attractive and understandable way in which he outlined the terms of the Bill this afternoon.
My Lords, this is not a sphere which attracts controversy of a Party political nature, although certainly a note of controversy, or at least dissension, was detectable among some of the speeches of the noble and learned Lords on the Cross-Benches when the cases discussed in the

15
Twentieth Report came before your Lordships' House on various occasions. Speaking personally for a moment, I first came upon some of the difficulties and injustices with regard to limitations of action when I was a pupil in what were then the chambers of the noble and learned Lord, Lord Stow-Hill. Thereafter I devilled in those chambers for a junior who had an enormous practice in personal injury cases, mostly of what I may describe as the running-down or Factory Act variety. Out of the hundreds of pleadings and opinions which I drafted for him, I do not suppose there were more than a handful—certainly a tiny proportion—of cases where the question of limitation came into the matter at all. Nevertheless, when the question did arise, it seemed to cause a great sense of unfairness and, indeed, resentment on the part of the lay client, the would-be plaintiff.
Not least was this caused by the arbitrary nature of the law as it then stood, and the fact that the plaintiff, as it were, could be shut out in circumstances in which he was not in any degree at fault himself. I say this because, as a humble, erstwhile practitioner, I welcome the approach of the Committee, and the course they have steered between what I might call the extreme view, on the one hand, that there should be no limitation period in personal injury claims, and the over-rigid view, at the other end of the spectrum in this sphere. It seems an eminently sensible recommendation of the Committee in effect to retain the limitation period in normal cases of three years, but to extend the period if the plaintiff in certain circumstances is ignorant of his rights, or of his condition, or is under a disability. Above all, the Court now has a discretion to override the defence of limitation in circumstances when it would be just to do so. It is by way of summary right, in effect, for a plaintiff to have a right of action irrespective of the time element, unless he has caused, or perhaps contributed to, the delay, or unless it would be unjust in certain circumstances to a defendant.
My Lords, I do not think I need further detain your Lordships' House. I am sure that I am speaking for all when I say we are looking forward with keen anticipation to the speech of the noble and learned Lord, Lord Edmund-Davies, and
16
the feast of expertise which will fall from his lips. It is sufficient for me to give this Bill a warm welcome.
3.46 p.m.
Lord EDMUND-DAVIES: My Lords, I count myself doubly fortunate this afternoon, first in being privileged to address this distinguished assembly for the first time and, secondly, because this debate relates to a matter which has absorbed a substantial part of my long life in the law. Fortunately for this House, convention rightly dictates that though I would willingly range widely, I may properly range for a period barely sufficient to enable a lawyer to emerge with composure even from a parenthesis. I shall do my best. As my comments on this Bill are commendatory and only in one respect slightly cautionary, I hope to avoid overtaxing the established generosity of this House towards a new Member.
My Lords, a man is injured by the act or omission of another. If his injury is significant and the wrongful nature of the other's conduct is clear, he must sue the wrongdoer within three years of sustaining his injury. So if a pedestrian is knocked down by his neighbour's car, he must sue him within three years if he is to avoid becoming Statute barred. But what of the man who lacks knowledge that he has been injured? What, for example, of the workman who knows only too well when he has chronic chest trouble, but 10 years go by before he realises it was caused by bad working conditions, which his employers could and should have put right? Should the gates of justice be slammed in his face because he was seven years too late in seeking to pass through its portals?
Some noble Lords may think that I have begun on a regrettably emotive note. If so, it is well to recall that such was the quite clear question considered by the Judicial Committee of this House 12 years ago. The law was then such that this House was obliged to hold that the door must, indeed, be slammed in the face of the suppliant. Small wonder that the noble and learned and recently lamented Lord Reid said that,
"… some amendment of the law is urgently necessary".
In the light of severe strictures made earlier by the Court of Appeal, the Committee of the noble and learned Lord the

17
Lord Chancellor had already been set up to examine the law. Purely by way of establishing my credentials, I mention in passing that I had the honour to be its Chairman.
My distinguished colleagues and I had to make a leap into the unknown. We had to conduct a delicate balancing operation. Of course, if you postulate a villainous employer ruthlessly regardless of the welfare of his employees, you may well ask, "Why should he ever be protected by the passing of time?". But what of the decent employer who has done his best to safeguard his employees, and yet is suddenly confronted by a stale and suspect claim, a claim which he has difficulty in meeting because essential witnesses have died or disappeared, and relevant records have been destroyed? In other words, my Lords, what if the suppliants for justice are to be found on both sides of the portals? Confronted by that acute dilemma, my 1962 Committee—and I use the possessive with pride—adopted what I am led to believe is a politically familiar formula; in other words, we compromised. We and the 1963 Act said that the three years should not begin to run until the injured party learned, or ought reasonably to have learned, what were called "material facts of a decisive character" in relation to his claim.
My Lords, with that I turn to the first of the three topics upon which, with your leave, I want to make brief comments. It is also the most difficult of the problems dealt with by this Bill. It can be expressed in the single question: when should the three years begin? Should it be with the workman's knowledge of his increasingly bad chest? Well, for years he has had good reason to know all about that. With knowledge of his working conditions? Well, he probably has known all about them also for a long time. But what he might well not know is that his bad chest was caused by his had working conditions. Nevertheless, ought he reasonably to have known this and so sued his employers within time? In seeking a just answer to that question, the 1963 Act imposed what practice has proved to be an excessively elaborate test. My Lords, if this Bill does no more, it will have done a great deal if it removes that particular ambiguity.
18
On the other hand, in favour of the potential defendant, the Bill rejects the view that time does not run against the plaintiff until he knows or ought to know that he has a worthwhile cause of action. Instead, it provides that the time begins to run when the injured party first knows (a) that he has sustained a significant injury, and (b) that it was attributable in some measure to the act or omission of the defendant. But—and here I turn to my second topic—what about the odd case? For example, what about the injured party who, bewildered by his sudden affliction, wisely seeks advice, but is unwisely and inaccurately told that he has no remedy, even though the three-year period has not yet expired, so he lets the years go by until better advice informs him that he has indeed a good cause of action? In 1962 my Committee regretfully concluded that such a man could not be helped, and in the light of the information then available, I think, with modesty, that we were right.
But this Bill provides a compromise. It enacts that if the court considers it equitable to both parties, the action may proceed, even though the three-year period has expired. It would be foolish to lose sight of the great delicacy of the task entrusted to the court by that novel provision. Indeed, in their valuable Report the Law Reform Committee, headed by Lord Justice Orr, said this:
" In suggesting this solution, we have not overlooked the difficulties which would face a judge in weighing the hardships on one side or the other, or the fact that even a measure of discretion erodes certainty in this field."
That the Committee has done its best to solve this virtually intractable problem is beyond doubt. Whether it has succeeded is a question that remains to be tested. There have been moments when I have wondered whether the resultant uncertainty is too big a price to pay, but reflection has, on balance, led me to the firm conclusion that the provision makes for justice, and I respectfully recommend its acceptance.
A brief comment, if I may, about the third and final matter. My Committee thought it desirable to prevent cases which seemed unmeritorious as well as stale from going to trial and then failing because the plaintiff could not bring himself within any of the escape clauses. We

19
therefore recommended that out-of-time plaintiffs must first obtain the leave of a judge before pursuing an action for damages, and the 1963 Act embodied that recommendation. I see no reason to think that either we or the Legislature were then mistaken, for, as I have already said, we were exploring unknown territory. But we learn from experience. The Welsh no less than the Romans have a proverb which says so, and you could want no better proof than that. The lesson taught by experience in this particular field is clearly summarised in this last Report. It has convinced me, at least, that the precautionary procedure of securing leave may now properly be abandoned, and the Bill so provides. My Lords, I respectfully recommend acceptance of the Bill by this House, to which I am greatly indebted for its indulgence in hearing me out so patiently.
3.57 p.m.
Lord WIGODER: My Lords, there is no maiden speech to which I would sooner have the privilege of paying tribute than the maiden speech of the noble and learned Lord, Lord Edmund-Davies. He is, if he will permit me to say so, a tried and trusted mentor. His appointment as a Lord of Appeal was greeted with universal acclamation by the whole of the legal profession. He speaks, as your Lordships now know, as a great authority on this particular branch of the law. I know that your Lordships will accept it from me that he is of equal authority on a large number of other aspects of the law, and your Lordships, therefore, will look forward with the greatest pleasure and anticipation to hearing him on many future occasions.
My Lords, any slight value that might have been attached to any observations that I will make has been substantially diminished by the fact that the noble and learned Lord has already spoken, and may indeed be removed altogether by the fact that I am about to be followed by two other noble and learned Lords. In extending a welcome to this Bill, I only wish to say that I am pleased that it has been seen fit to follow the detailed proposals of the Law Reform Committee, and in particular that the Bill ends the difficult doctrine of worthwhile cause of
20
action and replaces it by the provisions as to date of knowledge which are set out in the new Section 2A(6). I welcome also the fact that on the one issue upon which fact that on the one issue upon which the Law Reform Committee found itself in some difficulty the Government have seen fit to adopt what the Law Reform Committee referred to—without any political connotation—as the liberal approach", rather than the strict approach.
The only doubts that I have to express are three in number, and they are perhaps minor ones. First, the proposals in Clause 1 of the Bill are intended to give effect to the recommendations in paragraph 69 of the Law Reform Committee's Report. I cannot help thinking, on re-reading those recommendations, that they are expressed in simpler and more felicitous language than the equivalent provisions in this Bill. I say that aware, as I am, of the necessary constraints under which Parliamentary draftsmen toil, which of course do not operate upon members of a Committee. It may be that the noble and learned Lord on the Woolsack will consider it desirable to take one final glance at the recommendations as they are expressed in the Law Reform Committee's proposals, to see whether the structure of the Bill might by that means be made a little more clear.
Secondly, I welcome the proposal that will rid us of the necessity for making applications for leave, but I share, if I may respectfully say so, the doubts expressed by the noble and learned Lord, Lord Edmund-Davies, as to the difficulties that will face courts in future in interpreting in Section 2D, the words
"… that it would be equitable to allow an action to proceed "
in certain circumstances. The difficulty arises where companies or firms may be sued, perhaps 10, 20 or even more years after some event, with the result that there are no witnesses available and there may be no documents available. To assess in these circumstances the equity of allowing proceedings to be taken against such a firm or company will clearly pose substantial difficulties to the courts.
The third observation that I would make arises directly out of the probable operation of this Bill, and it concerns the difficult problem of the assessment of

21
damages in fatal accident cases in a period of substantial inflation. Your Lordships will know that the present position is that the dependency of the widow is assessed as from the date of the death. That figure is multiplied by the appropriate number of years, various allowances are then made and a global figure is reached. No allowance is made for the possibility that a widow might remarry, and no allowance is made for the possible effects of inflation, because they are no doubt regarded as being too uncertain to enable any precise answer to be reached.
The effect of this Bill, even though it is perhaps somewhat limited by Section 2B(3)(b), which limits an action under the Fatal Accidents Act to a period of three years from
" the date of knowledge of the person for whose benefit the action is brought ',
is that it will make it easier for Fatal Accidents Act cases to be brought again, it may be 10 to 15 years after the date of the accident. As I understand it, a court that is in such a case assessing damages will not be acting upon hypotheses. It will know the figures, it will know the precise dependency, the precise loss sustained after 10 or 15 years of, it may be, very considerable inflation. The result may well be that in those circumstances damages will be awarded of an extremely substantial nature, which will be far greater than the damages that would have been awarded had the plaintiff been able to bring his, or her, action more promptly.
This is a difficulty which seems to me to arise inevitably out of the operation of a Bill of this nature. I do not regard that as an objection to this Bill nor, so far as I can see, is it a matter that could in any way be dealt with by amendment to this Bill. But I venture to suggest that it is an urgent matter to which the noble and learned Lord on the Woolsack, if he ever has an idle moment, might seek properly to pay attention in the near future. With those observations I also venture to support this Bill.
4.6 p.m.
Lord MORRIS of BORTH-Y-GEST: My Lords, I should like to join with other noble Lords in expressing a warm welcome to this Bill. In doing so, may I be allowed to add my felicitations to
22
the noble and learned Lord, Lord Edmund-Davies, on his notable maiden speech. I add my congratulations with the utmost pleasure, not only because of a valued personal friendship extending over many years, but because of my knowledge of the distinction with which, before he came to your Lordships' House, he discharged his duties both as a judge and as a Lord Justice. I am sure that your Lordships would feel that it was fitting and happy that he should have addressed your Lordships for the first time on a subject in regard to which he has made a considerable contribution, as one of the many ways in which he has rendered public service on committees of great importance.
I should like to thank the noble and learned Lord the Lord Chancellor for his exposition of this Bill and for his explanation of the background which makes it, as I think, necessary that this Bill should be introduced. I should also like to join in appreciation of the Report of the Committee under Lord Justice Orr. I read that Report with great interest. I thought that it marshalled all the considerations in a balanced way and in the result, as I think, arrived at very wise and satisfactory solutions. I am sure that it is necessary to have this Bill, and I say that as one among many who has had to grapple in the past with considering the provisions of Section 7(3) of the 1963 Act.
I do not wish to say a word in criticism of the drafting, because I have sufficient experience to know that drafting, particularly in regard to a subject of this nature, is extremely difficult. That having been said, it is to be remembered that every judge who had to apply his mind to the meaning of Section 7(3) found great difficulty. The noble and learned Lord the Lord Chancellor referred to Central Asbestos v. Dodd, which came to this House, and I sat on that case with the late Lord Reid, and the noble and learned Lords, Lord Pearson, Lord Simon of Glaisdale, and Lord Salmon. Try as we best could, we were not able to arrive at any unanimity which would give clear and helpful guidance to the courts as to what exactly that section had laid down. The Court of Appeal at various times shared the difficulty which we then experienced. I am therefore quite sure that it was very desirable to

23
have the investigation of the Committee under Lord Justice Orr and, in the result, to have this Bill.
Today in your Lordships' House we are differently placed from those of us who sat judicially to interpret Section 7(3); w can today be concerned with policy. The whole subject of limitation of actions is beset with difficulties. Should we have any period at all? If a plaintiff is in a position to prove his case and if he does prove his case—for it is really only if he is in a position to prove his case that the defence of Statute of Limitation is needed by a defendant and only in that situation does a defendant put it forward—is it, it may be asked, fair to have any period at all? I have no doubt that the conclusion reached by the Committee under Lord Justice Orr was the correct answer to that question. It must be unfair in many cases to a defendant who, owing to the lapse of time, is either not able to command the presence of witnesses or, if witnesses arrive, they have but faded and jaded memories. Thus I am sure that it is necessary to have some periods of limitation.
It might be thought a strange feature of our limitation law that an Act should say that an action shall not be brought "after the expiration of such-and-such a period yet the court need have regard to that provision only if the defendant relies upon it. But that again I think works fairly and reasonable. It is, under our system, not necessary for the court to take action, even though there are those rather formidable words action shall not be brought." But from the point of view of a plaintiff who can prove his case, who can prove that in law the defendant should pay him, there can surely be no more agonising words than the words "too late". So in this field it is essential that there must be some balancing process, and I thought the Committee expressed themselves very well when in paragraph 38 of the Report they said:
"… it is apparent that we have not been able to find any solution to our problem which is entirely satisfactory. This is not surprising; limitation inevitably involves a compromise between conflicting interests and no such compromise can do complete justice to both plaintiff and defendant in every case."
24
I agree with other noble Lords in thinking Sat the Committee arrived at a very sensible result in saying that the three-year period should run from the date the cause of action accrued or a date, if later, of the plaintiff's knowledge. A plaintiff might be asked the question: "Why did you not bring your action sooner?" Supposing he says, "I did not know within the time that I had suffered injury." I think we should all agree that in those circumstances a plaintiff ought to be allowed to proceed. Similarly, if he says, "I did not know within the time that the injury, although I knew I had some injury, was significant." Again, I should have thought it eminently reasonable that he should be allowed to proceed. The third answer he might give is, "I did not know that my injury was attributable, in whole or in part, to any act or omission of the defendant." That is the difficult case. The Committee under Lord Justice Orr thought that there would be little difficulty in coming to conclusions in regard to those matters, and they said in paragraph 55:
" We turn, therefore, to the third possible date of knowledge, namely the date when the plaintiff has knowledge, actual or constructive, both of his injured condition and of its having been caused by acts or omissions of the defendant. We are satisfied that this is a date capable of precise definition and not presenting any particular difficulties of proof …"
I think they are a little optimistic there. I think the word "attributable" is not an easy word and that the word "omission" is not easy, either. Does "omission" merely mean that something was not done, or does it mean, or might it mean, that something was not done that ought to have been done? In studying the words of the Bill I do not think these difficulties will arise, and I think provision is made to assist a plaintiff if he, so to speak, cannot be criticised for not having brought his action earlier.
I take this sort of case: somebody in a factory suffers either some injury or illness. He is conscious of it but he just does not know why it has happened. Supposing he consults an expert and tells the expert to go to the factory to see whether there was something wrong there—were the employers doing something wrong or failing to provide some equipment. Supposing the expert comes back and says, "I have examined the factory but I can find nothing wrong at all", and the man takes

25
no action. Supposing some years later he goes to another expert and that expert looks at the factory, the conditions being the same, and says, "I think there was something wrong. There was something positively wrong, and there was an omission to provide something that ought to have been provided." Much time may have gone by, but as I read the Bill the plaintiff will not in those circumstances be prejudiced because he has taken all reasonable steps to employ an expert and to consult him.
A similar result under the Bill I think follows if the man whom I have postulated went to his doctor and said, "I have this condition, these complaints, and I think there was something wrong in the factory". Supposing the doctor says to him, "Those injuries from which you are suffering, that complaint of yours, cannot be attributable to what you tell me". On that the man takes no action. Supposing some years later he goes to another doctor who says, "I think what you are suffering from can be attributed to the conditions of which you tell me". Time may have passed, but as I read the Bill again such a man will not be debarred from bringing his action.
Whether it is different in the case of the lawyer will depend upon a consideration of Section 2A(6) of the Bill:
"… knowledge that any acts or omissions did or did not, as a matter of law, involve nuisance, negligence or breach of duty is irrelevant."
That may mean this, that one goes to one's lawyer who says, "Though there was an act or omission, it was not a negligent act or negligent omission ", and one may go to a lawyer some time later on who gives different advice. It may be that the time will run from the date when one went to the first lawyer. This problem may arise. Even if that were the situation, as I read the Bill, that situation could still be covered by the application to the court for the discretion of the court to proceed, despite the fact that the time limit has gone by. I welcome this provision in Section 2D. I welcome giving discretion to the court to say that the case may proceed despite the fact that the time has gone by. The Bill uses the word "equitable". In the context that simply means "fair". Is it fair in all the circumstances?
I can see objections to this provision. It will be said that there is some uncer-
26
tainty. It will be said that probably there would be no appeal because, if the judge had weighed all the considerations and did not express himself as having considered something that he ought not to have considered, it might well be that it would be difficult to appeal against any ruling of the judge. It might well be that the judges will not entirely welcome having this rather difficult duty imposed upon them. But, having said all that, I still think it a reasonable course to follow. I believe it is the fair way to deal with this difficult situation.
For my part, I would trust the judges in matters of this kind. They are given the guidelines; they must assess all the difficulties on either side and then finally say, "Is it fair or unfair for the plaintiff not to be bound in this case by the time limit? "I would trust the judges. Their whole training and experience is, first, training to ascertain the facts and, having ascertained them, to assess them. Having learned, weighed and assessed the facts, then, in the light of everything, it is their duty to decide what is fair both to plaintiff and to defendant. I think that that is the reasonable way out. I would have confidence that Her Majesty's judges, being presented with this somewhat difficult decision, which they might not welcome having to discharge, nevertheless will discharge it faithfully and well, and, in a difficult situation, this was about the best result that could have been achieved.
4.24 p.m.
Lord JANNER: My Lords, I feel some temerity in entering this debate after so many eminent, learned and highly interesting personalities have taken part. I should like to offer, as a member of the more humble solicitors' profession, my congratulations to the noble and learned Lord the Lord Chancellor for the manner in which he introduced the Bill, and also to the other noble Lords who have spoken. In particular, may I say how impressed I was by the speech of my noble and learned friend Lord Edmund-Davies whom I have had the honour and privilege of knowing for many years and whom I have always regarded with the greatest respect and admiration. That respect and admiration has been even more increased this afternoon. Having heard his speech, I am

27
sure that we shall all look forward with considerable pleasure to hearing him on many future ocassions. We are grateful to him for having addressed us today.
I do not propose to take much time. We have had an explanation of the Bill. We have heard those who have been engaged in making decisions on many of the points which have been raised today. I think your Lordships will understand that when, in the first instance, a person inquires as to what are his chances of success, he comes to those in the solicitors' profession, and often we find considerable difficulty in weighing up what is likely to be the result, particularly when expert medical opinion, and sometimes even expert legal opinion, is involved. There would be no cases at all if everyone thought that the medical and legal evidence was absolutely undeniable on one side or the other. Yet cases go through courts, higher courts and right up to the highest law courts to the learned judges themselves, these eminent persons. Indeed, as was shown in the deliberations which have taken place and which eventually produced this Bill, there are differences and, ultimately, it is left to a court to decide which was right and which was wrong.
I have had experience myself of different medical opinions being given on a number of occasions to persons who have applied for damages. Sometimes it has been considerably difficult to give a real opinion. You have to weigh up what the court will decide when it hears the evidence on both sides of the case. I say this because it shows that there is a great element of chance in many cases which are brought before the courts. Consequently, it is perfectly clear that a person might have been advised quite wrongly—nevertheless in good faith—by the medical person whom he has consulted, and, possibly, by the lawyers to whom he has gone, who decided that, on that evidence, he ought not to proceed. But, later, there may be cases in which what he was advised as being right or wrong is contradicted by the decisions given in similar circumstances by a court.
For that reason my own profession welcomes this Bill, because it realises that it is essential for justice to be done to a person who has been placed in a
28
position, the severity of which he ascertains only after a certain period. I do not say that the profession accepts the Bill in its entirety. Probably at Committee stage some suggestions will be made and we hope, possibly, that the noble and learned Lord the Lord Chancellor will accept them; but, in principle, I think it is extremely important that we should accept the Bill, because it is clearing up what has been an injustice for a considerable time in a fair number of cases. I do not imply many cases. Therefore, I should like to add my personal commendation for the acceptance of the Second Reading.
4.30 p.m.
Lord HAILSHAM of SAINT MARYLEBONE: My Lords, before the noble Lord the Lord Chancellor replies, I should like to say a couple of words. I do not want to detain the House, but I should like to thank the noble and learned Lord for his reference to myself at the outset. I was not in the Chamber at the time, but it has been reported to me and I am grateful for it. My real purpose in rising is to do two or three things which can be done in as many brief sentences. In the first place, I should like to add to the welcome especially from these Benches to the noble and learned Lord, Lord Edmund-Davies, who made his maiden speech. Like other noble Lords who have spoken, I have known him for very many years. I remember being against him at the Bar and, in the first of the cases which I remember most vividly, he won. He was then the energetic and strenuous Leader of the Welsh Circuit. I have appeared before him as counsel in the Court of Appeal and once, indeed, I was hauled up before him as a malefactor when some ass wanted to send me to prison. Mercifully, he released me without, I hope, a stain upon my character. Since the noble and learned Lord has been appointed, I had the great pleasure of sitting beside him in the Appellate Committee and all these experiences, from first to last, have been of the most enjoyable character. To listen to the noble Lord's maiden speech this afternoon has been as enjoyable as any of them.
My Lords, I should like to say a word or two about some of the mechanics of

29
the Bill. One of the predecessors of the noble and learned Lord and myself as Lord Chancellor was the famous Lord Campbell, who wrote the lives of the other Lord Chancellors in a most readable but highly malicious frame of mind. He said that law reform is either by consent or not at all. I believe that that is the first thing to know about it. The strains on Parliamentary time being what they are, one must acquire a measure of consensus before one starts. Naturally, that takes time. That leads me to an observation by another among our predecessors, Lord Haldane, who said that important law reforms take three successive Lord Chancellors to carry through. That, too, is very largely true. Lord Haldane claimed—I think with reason—to be the progenitor of the law of property legislation, which was first initiated in Parliament by the Earl of Birkenhead and finally carried into law by Lord Cave. That again is due to the fact that law reform is difficult to initiate under the British Parliamentary and legislative system. The present reform has taken only two Lord Chancellors from the time when I set up the Committee to the time when the noble and learned Lord introduced the Bill this afternoon. I hope that he may be spared—unless, happily, this Government disappears—to see the Bill pass into law at a later stage.
It is an odd thing that, from 1623 to the time when I went to the Bar and up to 1939, we got on very well with a six-year period of limitation, but since then we have been doing nothing but tinker with the law. I believe that that is due to the great problem of personal injuries and fatal accidents—problems upon which the discussions this afternoon have largely centred. However, the problem basically arose—from the first for technical reasons and, at the last, for practical reasons—from the difficulty of obtaining testimony about an incident which has taken place some time before it comes to be tried in court. When, under James I, the first of the Limitation Acts was passed, it was the law, strangely enough, that nobody who was in the least interested in the case was allowed to give evidence at all. This was because it was thought terrible to imperil the immortal soul of a witness by a temptation to commit perjury. Of course the result was that perjured witnesses abounded. Thus we had the Limitation
30
Act of 1623 and also the Statute of Frauds in 1677 in order to protect unfortunate defendants from plaintiffs who produced these hired and perjured witnesses. A great deal of the law of evidence as it now exists revovles around this rather absurd rule which our ancestors observed.
However, by the time we reached 1939, the difficulty was of a practical kind. It was found that in a great number of accident cases six years was too long a period for a defendant to be able either to recollect or to acquire evidence about incidents taking place so long before. I believe that that was touched on by the noble Lord, Lord Wigoder. So we introduced the three year period after the War and we thought that we had really solved the problem. But then it was discovered that particularly miners and certain other workers suffered from complaints of which neither would the symptoms appear within the three year period nor was the cause known, sometimes until many years after the injury or illness had occurred. This was because medical science was advancing fast and discovered that many diseases, which in the past had been thought to be nobody's fault, were due to various types of poisonous dust in either factories or mines. So again we had to introduce the amendment to the three-year period to which reference has been made.
My Lords, this leads up to a point which I think it is important to make. It is not just an historical discursion. Valuable as law reform is, it is important that the law should have a certain durability. Our ancestors thought it permanent and believed that it should never be changed or should be changed very seldom. We know that to be false but, if law is to be respected, it is right that it should not constantly be tinkered with. I believe that we have tinkered a little too much with this subject lately. I hope that when the Bill becomes law—as I trust it will—it will put a quietus on tinkering with the law of limitation for quite a long time. I am not saying that the Bill is perfect. It is an improvement on what has gone before and, for that, thanks are due to the Committee and to the earlier Committee presided over by the noble and learned Lord, Lord Edmund-Davies. I hope that we shall turn to other subjects of law reform and

31
that limitation will for a time be given the "go-by" after the Royal Assent has been obtained.
4.39 p.m.
Lord DOUGLAS of BARLOCH: My Lords, I do not want to say anything about the merits of the Bill. They have been very adequately explained by my noble and learned friend on the Woolsack, by the noble and learned Lord, Lord Edmund-Davies, whom I congratulate on his maiden speech, and by others. I merely want to raise one point. The Bill, as drafted, is amending the Act of 1939 by substituting or adding to it various provisions. The object of that, no doubt, is that one Statute will contain the whole of the law on this subject. What I should like to know is whether any provision will be made for Her Majesty's Stationery Office to produce altered copies of the Act after the Bill has become law, so that one can purchase a single document instead of having to buy two or three in order to find out what is the law.
4.40 p.m.
The LORD CHANCELLOR: My Lords, may I first express my gratitude for the fact that the Bill has received the commendation of no fewer than seven noble Lords, all of authority and many of great distinction in the field of the law. May I also join in the congratulations that have been extended to the noble and learned Lord, Lord Edmund-Davies. We have been friends over the years. I appeared with him many times and then we always won. I appeared against him many times and then I always lost. That apparently was also the experience of the noble and learned Lord, Lord Hailsham of Saint Marylebone. I am not at all surprised that the noble and learned Lord, Lord Edmund-Davis, has again shown that authority, clarity and intellectual vigour which I have always known to radiate from him. The House is a stronger and a wiser place for his presence, and I hope that we shall hear him frequently.
The noble Lord, Lord Wigoder, raised some questions, more perhaps by way of seeking elucidation than by way of criticism, in relation to one or two aspects of the Bill. He invited me to look again in particular at the structure of Clause 1 and he wondered whether the language
32
of the draftsman was perhaps more obscure than the language of the Report. In fact the Bill follows the recommendations of the Report very closely indeed and in many places word for word. Where it differs from the recommendations it does so, I think, in general, either because of the need to make provision for fatal accidents or because of a need to insert the provisions into the existing framework of the 1939 Limitation Act. I will certainly look at the point raised by the noble Lord, Lord Douglas of Barloch, about subsequent republication.
He also raised a question—and this is fundamental in considering the value of the discretionary provision in the Bill to which a number of noble Lords have referred. I was greatly comforted by the conclusion of the noble and learned Lord, Lord Morris of Borth-y-Gest—applying his vast authority and experience to this problem—that he found the language of the Bill satisfactory. In considering the test that the court will apply—whether to allow the case to continue would be equitable or not—I apprehend that the court will give the widest meaning, as is intended, to the word "equitable ", and give it the same construction that Lord Goddard gave to it in the case of the Queen v. the Minister of Housing and Local Government, ex parte Finchley, when he said that he thought that "equitable" meant "fair and reasonable ". I notice that the noble and learned Lord, Lord Morris, used the word fair ". Perhaps it is right to add the word reasonable "—not that one would expect any of our judges to be unreasonable in the application of the principle of fairness. But what I have pointed out is certainly what is intended.
The noble and learned Lord, Lord Morris of Borth-y-Gest, said: "Trust the judges ". It is a doctrine and trumpet call in which I am very willing to join myself, even though it does not always receive the universal echo that perhaps it should receive. But it may be in relation to the somewhat tormented history of this matter, to which the noble and learned Lord, Lord Hailsham, referred, that the trouble has been this: if it had been left to the Common Law to sort it out I expect that long before now the judges would have sorted it out. But the difficulty was that the imposition of Statute Law upon the scene complicated the position. I

33
have greater authority than my own in saying that, when Lord Reid—whose passing we mourn—said in Cartledge v. Joplin; what I have just intimated; that but for Statute, the Common Law would have reached a solution to this problem a long time ago. That was not allowed to come to pass, and this Bill today is a measure to put the position right.
The noble Lord, Lord Wigoder, in respect of the damages aspect that arises in this field of litigation, referred to the difficulty of quantifying damages in a period of limitation—I should say "inflation "; I seem to have got "limitation" on my mind. I think that all of us who are connected with litigation are very conscious of this serious problem. It is not within the scope of the Bill, but it is clearly a problem of difficulty: for instance, in respect of assessment by a court of loss of future earnings, which is very important—indeed, it is absolutely crucial as an element in the assessment of damages—the award will be based on the level of present earnings. This is clearly a matter to which Parliament will have to apply its mind.
Other matters were raised in some detail in the close examination which the noble and learned Lord, Lord Morris of Borth-y-Gest, gave the Bill. He posed the questions and it was a great relief to me to hear him answering them himself, and answering them in a direction which gave him reasonable confidence in the provisions of the Bill. He raised the question whether there would be a possibility of appeal under the provisions of Section 2D in relation to possible appeals against a ruling of the court that it would be equitable to allow a case to proceed. I should think that an appeal on that ruling would be difficult, but I apprehend not impossible. Any substantial departure from the intention and spirit of what he rightly described as the guidelines would presumably call for correction by a higher court.
The noble and learned Lord, Lord Edmund-Davies, rightly said that the effectiveness of this general provision of the discretion will have to be judged by experience of the cases as they proceed, but I venture to hope that the guidelines which are contained in the Bill will enable the court to establish a consistent and humane code of decision which will be of guidance in all coming proceedings.
34
My Lords, I conclude by once again thanking the House for giving a fair wind to this Bill. As the noble and learned Lord has said, it is a matter of some gratification that in the so far short term that he and I have been on the Woolsack we have been able to proceed not only with this but with other measures, some of which were anticipated by other Lord Chancellors before us. The momentum of law reform will be maintained—that assurance I can give to the House. I am glad that this is a valuable step on that progress.
On Question, Bill read 2a, and committed to a Committee of the Whole House.

LOTTERIES BILL
Brought from the Commons; read 1a, and to be printed.

EVIDENCE (PROCEEDINGS IN OTHER JURISDICTIONS) BILL
Baroness ELLES: My Lords, I beg to move that this Bill be now read a second time. It comes to your Lordships' House from another place, where it was introduced by a Private Member who had been successful in the ballot for Private Members' Bills. It was welcomed by Her Majesty's Government as a useful contribution to law reform, although it is a modest Bill and does not seek to make great modification in the present law. It is necessary from time to time to obtain evidence from a witness who is outside the jurisdiction of the court where the evidence is needed. The 1968 Hague Convention on the Taking of Evidence Abroad in Civil or Commercial Matters facilitates the taking of such evidence, and the United Kingdom signed this Convention in 1970. At the present time the powers of the United Kingdom courts to obtain evidence for foreign courts are regulated by the Foreign Tribunals (Evidence) Act of 1856 and they do not meet in all respects with the requirements of the Convention. As my noble and learned friend Lord Hailsham said, one should not tinker too much with the law and encourage too much law reform too quickly. But even he, I think, will agree that the period that has elapsed since 1856 has given us time for thought; and

35
it is time that some modification was made.
The purpose of this Bill is to introduce into our municipal law the necessary modifications which will enable us to ratify the Convention. It is therefore advisable to repeal the 1856 Act as well as two Acts of 1859 and 1885 which regulate the obtaining of evidence for Commonwealth countries, and replace them by a new, comprehensive code which will embody all the requirements of the Convention and enable us to meet our obligations under that Convention. The Bill is technical, necessarily so; therefore I will try to confine my comments merely to those changes to the existing law which are introduced by this Bill.
Clause 1(b) will enable evidence to be taken on request not only for cases which are pending before a foreign court, but those which are merely contemplated, in accordance with Article 1 of the Convention. Clause 2(2) lists the orders a court may make as to the forms of evidence. The power to order the examination of witnesses and the production of documents is now extended under this subsection to include other forms of evidence which may be provided, including the inspection of property and the medical examination of any person. It should be observed that subsection (3) provides that no step can be required to be taken if it is not already possible to do so for the purpose of civil proceedings in the court making the order. The only modification is in compliance with frequent requests from foreign courts that evidence should not be on oath, so that this will now be possible. It should be observed that under Article 12 of the Convention a court must comply with the request if it has the power to do so, even though the request relates to proceedings of a kind in which an order would not be made in an English court, such as a request for blood samples. On the other hand, the Scottish courts would not be able to comply with such a request for blood tests since they have not the power in any circumstances to do so.
Subsection (4) is a protection against what are known as "fishing expeditions" relative to the discovery of documents or other material. Article 23 of the Convention provides for a State to declare
36
its refusal to execute letters of request which are issued for the purpose of obtaining pre-trial discovery. I understand the United Kingdom has the intention of making this declaration on ratification under the relevant Article, and I should be grateful if the noble and learned Lord would confirm this, as anxiety has been expressed on this point. Clause 3 regulates the privileges available to a person and the circumstances in which he can be compelled to provide the evidence requested. A new provision is introduced in subsection (4) according the witness the privilege of refusing to give evidence required if he could not be compelled to do so in civil proceedings in the territory of the foreign court making the request. This was not possible before.
Clause 4 is designed to avoid separate applications from a foreign court for each part of the United Kingdom where there are the different jurisdictions of Scotland, England, Wales and Northern Ireland. Under this clause, United Kingdom courts will be able to order witnesses who are outside the courts' jurisdiction to submit to examination so that evidence can be taken before an examiner, including one who is outside the jurisdiction of the court. Consequential on the repeal of the earlier Acts and also Section 24 of the Extradition Act 1870 which covered evidence in criminal proceedings in Scotland, it has been necessary to provide for such evidence in this Bill. No changes are contemplated in existing provisions. They therefore do not coincide with the new provisions for civil or commercial proceedings. It is not considered essential that evidence for criminal proceedings should necessarily follow the same rules as for civil or commercial proceedings.
Clause 6 provides for evidence for international proceedings, these proceedings being defined in subsection (3). The definition is widely drawn, but necessarily so, in order apparently to cover the kind of tribunals set up under treaties to which the United Kingdom may not be a party. These proceedings will take effect only where there has been an Order in Council, and it is with great discretion that these Orders in Council are executed. Clause 7 finally grants the powers to make rules of court. That is the outline of a Bill designed to enable us to co-operate more fully in international judicial proceedings and which at the same time

37
should result in protecting the rights and interests of the individual. I therefore commend the Bill to the House and beg to move that it be now read a second time.
Moved, That the Bill be now read 2a.—(Baroness Elles.)
4.57 p.m.
Lord WILBERFORCE: My Lords, I venture to make a few observations on this Bill partly in recognition of its subject matter which, although perhaps not quite so passionately interesting as limitation of actions, is nevertheless of some interest and practical importance; and also out of recognition to the noble Baroness who put the provisions of it so clearly and attractively before us. I should like to make two observations. One is of a general character and one of a particular character. The general one is this: this subject of evidence as regards other jurisdictions is part of what one may call international procedural law in which are included a number of other subjects, as for example service of process abroad, enforcement of foreign judgments, recognition of arbitration agreements, enforcement of arbitration awards, and extradition and fugitive offenders. All these are matters as to which convention and legislation is proceeding from time to time in a leisurely way covering different areas, sometimes the area of the European Economic Communities, sometimes the Council of Europe, sometimes a limited area as between this country and another country such as the United States.
My plea as to this is two-fold. First, we really should get on rather more rapidly than we are able to at present with the progress on these matters. It is depressing how long it takes to get a convention agreed as to any of these subjects. There then has to be legislation here and we have to persuade other countries to act on the same lines. There are too many tired waves vainly breaking in relation to these subjects. I know I am pressing at an open door in asking the Government, through the noble and learned Lord who sits on the Woolsack, to bend their efforts towards an acceleration of progress in these subjects, and perhaps one may invite the noble Baroness who is so influential in European matters to urge upon her colleagues in European organs the need for greater speed and activity in getting these brought up to
38
date. They are lawyers' law, very much so, and are enshrouded in technicalities. Therefore laymen rather tend to shun and shrink from them and leave them to the lawyers. I think that the laymen are mistaken on that, because they are all greatly interested in the practical working out of agreements on these subjects and I feel that the democratic assemblies which exist have a great interest in speeding up the lawyers to make progress.
As an appendix to that, one might look a little more ambitiously towards the future and consider whether the time is approaching when we might aim at having a comprehensive code of international procedure which would cover all these matters. They are not so difficult; it seems ridiculous that there should be this delay and complication about simple matters like enforcing judgments, arbitrations and so on, and that one should deal with them piecemeal. As one advances on one front, others are left behind and then, in a jagged way, we have to catch up on those left behind. Within the area of Europe, where we share common legal systems and thinking, it ought to be possible to have a simple, comprehensive and generally accepted code dealing with these practical matters. I should like to raise a gentle voice in urging those who have influence to think on those lines.
The point which I particularly wish to mention has been adverted to by the noble Baroness, Lady Elles. It arises in Clause 6 of the Bill, which enables an Order in Council to be made in relation to international proceedings. Subsection (1) says:
"… shall have effect in relation to international proceedings of any description specified in the order."
Then one looks at subsection (3) and sees that it is widely drafted. It refers to
"… any other court, tribunal, commission, body or authority (whether consisting of one or more persons)"
which, under a whole lot of arrangements or international agreements—maybe an agreement between any two States, between Utopia and Ruritania, or any resolution of the United Nations—exercises any functions of a very wide character including conciliation or inquiry. One can see that there might be a number of bodies set up by various means to perform functions which would fall within

39
those words to which we in the United Kingdom might not be anxious to extend the process of our courts. As the noble Baroness said, Orders in Council under this section ought to be made circumspectly.
I wonder whether the power in subsection (1) is sufficiently clearly given, so as to enable a distinction to be made between the different bodies and methods by which these tribunals may be set up. It says:
proceedings of any description."
That might be read as meaning civil proceedings, criminal proceedings, matrimonial proceedings, et cetera. I am not sure that "any description is the right phrase to enable discrimination to be exercised under subsection (3). To put it clearly, one would like to see wide powers given regarding established bodies, such as the International Court of Justice, the European Court at Luxembourg, the European Court of Human Rights and the European Commission of Human Rights. Bodies of that sort should automatically be brought within the provisions of this clause. Otherwise, there should be an ad hoc exercise of the power by Order in Council to extend the rest of the provisions of this Bill to them. I hope the wording is appropriate for that purpose and that the noble and learned Lord on the Woolsack will agree that a rather careful look will be taken at each case for extending the provisions of the Bill. With those observations, I am happy to support the Bill and hope that it may be rapidly passed.
5.4 p.m.
The LORD CHANCELLOR: My Lords, it is a very great pleasure for me to welcome this Bill on behalf of the Government, and to express my gratitude, and the gratitude of the Government, to the noble Baroness, Lady Elles, for finding time in her very busy schedule to undertake the responsibility of guiding this Bill through the House. Like the noble and learned Lord, Lord Wilberforce, I should like to compliment her on the admirable and clear way in which she explained the Bill, thereby making it unnecessary for me to repeat the operation.
As the noble Baroness has explained, the motivation for this Bill is the need
40
to ratify the Hague Convention on the Taking of Evidence Abroad in Civil or Commercial Matters which the United Kingdom signed as long ago as 1970. The Convention is already in force between Denmark, France, Norway and the United States of America. It is in our interest that the Convention should receive the widest possible acceptance, and I agree we should accordingly ratify it as soon as possible. It is our intention to do this. I share the feeling of impatience at the gap in time between the signing of these Conventions and their ratification and putting into legal effect. But it is only fair to say—and I hope I am not being unduly vainglorious about this—that when this country gives its signature to a Convention it really intends not only in the fullness of time—and perhaps the time is too full—to ratify them, but, what is more important, to give effect to them. Without being too critical of others, there is sometimes detected in international conferences a ready willingness to sign but a great reluctance to give effect in due course to the Convention agreed upon.
As the noble Baroness has said, this Bill introduces the relatively minor changes in our law which are necessary before we can ratify the Convention. It gives to the courts the additional powers which the noble Baroness has described, but, as she has also explained, the powers are accompanied by appropriate safeguards. Apart from introducing the changes in the law which have been described, the opportunity has been taken in the Bill to codify most of our law on the subject of taking evidence on behalf of courts outside the jurisdiction, including the taking of evidence as between different parts of the United Kingdom. This has the useful advantage of reducing the burden of looking in different places for one law. The Bill is accordingly a valuable one. It meets with the entire approval of my colleagues, the Ministers responsible for these matters in Scotland and Northern Ireland, whose Departments have had a chance to examine it closely. The Bill will provide a welcome codification of a comparatively technical but, nevertheless, useful branch of legal procedure. It will enable the United Kingdom to ratify the Hague Convention. As I have said, it is our intention to do so quickly.

41
In relation to the question raised by the noble Baroness, we intend to make the declaration permitted by Article 23 of the Convention in due course on ratification. Perhaps I should also refer to the point that was raised by the noble and learned Lord, Lord Wilberforce, as to the language of Clause 6 which is, admittedly, in very wide terms. I will certainly examine again the appropriateness of the wide language of "international proceedings of any description ". What is intended is that there should be covered in the term "international proceedings ", proceedings before the International Court of Justice or any other court, tribunal, commission, body or authority set up under any international agreement or any resolution of the General Assembly of the United Nations. The definition has been widely drawn so as to cover international tribunals exercising functions under treaties to which the United Kingdom is not a party. But, no doubt, when Orders in Council are made under subsection (1), care will be taken that bodies that are not clearly contemplated by the general concept of such international proceedings will not be included. We will look at the point in case we are opening the doors too wide in the language that has been used in Clause 6 of the Bill.
The conclusion that I hope the House will reach, in agreement with the noble Baroness, is that we should proceed to give a fair wind to this Bill. We believe it will be part of our duties in the field of international comity to do so, but in addition I believe that litigants in this country will gain benefits on a reciprocal basis similar to those in other countries, and they will be able to get a lot more assistance from foreign courts in collecting the evidence they need for proceedings in this country. Accordingly, I commend the Bill to the House.
5.11 p.m.
Baroness ELLES: My Lords, I should like to thank the noble and learned Lord the Lord Chancellor very much for his comments on the Bill. I would also thank the noble and learned Lord, Lord Wilberforce, for what he said. I am
42
delighted, incidentally, to welcome him back to the House after his illness, and am sure your Lordships will share in my pleasure.
I think we all share the wish to see the development of law between nations becoming easier rather than more difficult. I certainly endorse the hopes and wishes expressed by the noble and learned Lord, Lord Wilberforce, that there will be closer integration, at any rate in Europe, so far as procedural law is concerned and indeed in many aspects of substantive law, which should make the understanding of commercial practice and general transmission of goods, capital and persons very much easier throughout Western Europe. I know that all of us who are in Europe see this happening gradually—of course it is a very slow process—but we have to respect the laws of other Member States who may move at a speed different from our own. This has to be taken into account. Those of us who are in the European Parliament certainly will try to play our part in giving our views and in proposing new methods and procedures which will promote closer integration between peoples, particularly with regard to legal procedures, so enabling litigants in any country to avoid becoming quite so frustrated and also to avoid some of the expense involved in going to court. I therefore welcome the wise comments of the noble and learned Lord, Lord Wilberforce.
I am also most grateful to the noble and learned Lord the Lord Chancellor for having confirmed what I put to him about Article 23 on the declaration. I know he will look at this question of Orders in Council with regard to international proceedings. When those of us who have served in the United Nations, see the words, "Resolution of the General Assembly ", we sometimes have a question mark in our minds as to the validity or even the sense of it but when an Order in Council is contemplated, I know this will be taken into account in giving effect to the provisions of this Bill. I commend this Bill to your Lordships.
On Question, Bill read 28, and committed to a Committee of the Whole House.

RECREATION (NORTHERN IRELAND) ORDER 1975
5.14 p.m.
Lord DONALDSON of KINGSBRIDGE Lord DONALDSON of KINGSBRIDGE rose to move, That the Draft Recreation (Northern Ireland) Order 1975, laid before the House on 25th March, be approved. The noble Lord said: My Lords, the main purpose of this Order is to give district councils powers of compulsory acquisition of land required for recreation facilities. It also seeks provision for the Department of Education for Northern Ireland to offer financial assistance to voluntary groups providing local community facilities, and for the appointment and remuneration of a Vice-Chairman of the Sports Council for Northern Ireland. These provisions bring the law in Northern Ireland into line with that in Great Britain.
The main provision of the Order is in Article 3, which restores to local authorities the power to acquire land compulsorily for recreational purposes. This power was inadvertently removed from district councils in the course of the reorganisation of local government in Northern Ireland in 1973.
Article 4 of the Draft Order seeks to give the Department of Education the necessary powers to enable it to assist voluntary bodies with the cost of providing certain facilities. Under present legislation, the Department may pay grants to district councils to assist the provision of facilities for recreational, social, physical and cultural activities, and to voluntary bodies in respect of facilities for recreation, sport and the youth service. This Order proposes to extend these powers to include assistance to voluntary bodies for a wider range of social and community facilities. Noble Lords will want to know that in practice it is intended that grants to voluntary groups will still normally be paid by district councils. The Government are anxious that district councils should become much more deeply involved in helping community groups; and the Department of Education has already asked the district councils to act as the main channel for grants and advice to community groups. The planning of this system is well advanced. The powers which the Department of Education
44
would be given by this amendment are being sought only in order to give the Department freedom of action should any alterations prove necessary in future to the arrangements now being worked out with the district councils.
Article 5 deals with the appointment of a Vice-Chairman of the Sports Council for Northern Ireland. Unlike its counterparts in England, Scotland and Wales, which were established by Royal Charters, the Sports Council for Northern Ireland was set up under the Recreation and Youth Service (Northern Ireland) Order 1973, which makes provision for the appointment and remuneration of a Chairman, but not a Vice-Chairman. Article 5 seeks to regularise this position by making provision for the appointment of a Vice-Chairman. It also enables the Council, subject to the approval of the Department, to pay the Vice-Chairman a salary.
In conclusion, may I emphasise that this Draft Order seeks to provide powers for district councils and the Department of Education to further the present efforts in the field of recreational and community services to create an improved quality of life for the people of the Province. We take the view that the provision of such facilities is of the greatest importance. My Lords, I beg to move.
Moved, That the Draft Recreation (Northern Ireland) Order 1975, laid before the House on 25th March, be approved.—(Lord Donaldson of Kingsbridge.)
5.18 p.m.
Lord BELSTEAD: My Lords, following the noble Lord's very thorough explanation of this Order, for which I am grateful, may I say that I am not quite sure whether the compulsory purchase powers were left out by mistake in 1973. I cordially dislike compulsory purchase powers and I should like still to see them omitted, but I am not prepared to argue the matter in order to hold up an Order of which I otherwise thoroughly approve.
May I say three things to the noble Lord—and I must apologise to him for the fact that none of them is a question. First, speaking for this side of the House I am delighted that the work of the Sports Council has grown to such an extent that the Chairman now needs a

45
Vice-Chairman. This is absolutely excellent. We had always hoped that the Department's work in this important field of recreation and sport which, as the noble Lord so rightly said, is central to Northern Ireland, would be a success. It would seem that it has been so. Secondly, I agree with the noble Lord that the policy concerning money given to voluntary organisations is right. Thirdly, may I express the personal hope that this kind of Order will soon he ended so far as this House is concerned. I am sure we all hope that the Elections which are taking place today in Northern Ireland will soon lead to the Province once again dealing with this kind of measure in Belfast.
Lord DONALDSON of KINGSBRIDGE: My Lords, I thank the noble Lord for his reception of this Order. I heartily endorse his final remarks and I hope that he is not too optimistic. Regarding the compulsory purchase powers, which the noble Lord does not like, we have them here and they are an essential corollary of the fact that the local councils are under a statutory obligation to provide recreational facilities. If you give them that obligation, you must give them the power to do what is necessary. The Sports Council and the various facilities which the Party opposite, when they were in power, very largely began are, I think, making a very real contribution to what we hope will be more peaceful arrangements in Northern Ireland. I am grateful for the noble Lord's support.
On Question, Motion agreed to.

SHIPBUILDING INDUSTRY (NORTHERN IRELAND) ORDER 1975
5.20 p.m.
Lord DONALDSON of KINGSBRIDGE Lord DONALDSON of KINGSBRIDGE rose to move, That the Draft Shipbuilding Industry (Northern Ireland) Order 1975, laid before the House on 21st April, be approved. The noble Lord said: My Lords, this Order, which the House is now asked to approve, has been laid under the provisions of the Northern Ireland Act 1974. Noble Lords will see that it provides for further Government finance for the Belfast shipbuilding firm of Harland and Wolff, which the Company needs if it is to con-
46
tinue trading and providing employment—at present running at just over 10,000 jobs. The background to this measure was set out in a Statement made last month in another place by my right honourable friend the Minister of State for Northern Ireland in which he indicated the grave situation facing the shipyard.
Noble Lords will recall that a recent review of the company's affairs, carried out by a project team appointed in 1974 by the Secretary of State, revealed the need for a massive increase in the provision for estimated prospective losses on the present order book. Against this, a major programme for modernising the shipyard's facilities, costing in the region of £35 million and largely financed from public funds, is nearing completion. The company is the largest single industrial employer in Northern Ireland, and has a full order book. The Government have therefore decided that Harland and Wolff must be given a further chance of survival.
In order to facilitate the financial reconstruction of the company and other changes which the Government believe to be necessary, it is our intention to lay before this House and another place proposals for taking the company into full public ownership. We hope to lay in the near future the necessary Order-in-Council for transferring to Government the shares presently in private hands. In the meantime, as I have indicated, Harland and Wolff needs funds to continue trading. The draft Order now before us, which we envisage will soon be subsumed into the second Order to which I have just referred, is essentially an interim measure to provide for this finance.
Because we cannot yet be sure how the interim situation will develop it is necessary, pending completion of the necessarily complex arrangements for the company's longer-term future, for us to be able to respond quickly and effectively to whatever may turn out to be the company's exact short-term needs. It is for this reason that the present interim Order has been widely drawn as regards powers, duration and financial limits; although I must make it clear that many of the powers in this interim Order are not in fact intended to be exercised until the Government own the company. Noble Lords will note that the Order authorises

47
the Department of Commerce for Northern Ireland, with the approval of the Department of Finance, to provide financial assistance to Harland and Wolff by various means, up to a limit of £40 million. The limit of £40 million may be raised by the Department by Order, with the consent of the Department of Finance, on not more than two occasions and by an amount not exceeding £5 million each time.
This is a very substantial sum of money, coming as it will on top of previous Government assistance to the company. It is clearly important, therefore, that this assistance should be used to restore the company, if at all possible, to commercial viability. My right honourable friend in another place will be maintaining a very close oversight of the operation of Harland and Wolff and will be paying particular attention to the establishment of appropriate procedures for monitoring the company's affairs and for safeguarding the proper use of the funds to be provided.
The Order itself is concerned with the provision of additional funds to Harland and Wolff, but there are other related issues including the appointment of a new Managing Director. This post has been advertised, but we do not intend to allow ourselves to be rushed into making a decision. The important thing is to get the right man, even if this means waiting longer than we might otherwise wish. Equally important is that all who work in the yard, at every level, should be fully identified with making a success of the company. It is in pursuit of this objective that the Government have published a discussion paper on worker participation in the shipyard (which we discussed at Question Time this afternoon) and have called for concrete proposals for the introduction of industrial democracy in the company. Important as these different aspects are, they are not the main consideration. The overriding consideration must be whether shipbuilding in Northern Ireland has an economic future.
The proposed further financial assistance under this Order will provide Harland and Wolff with a much-needed breathing space and enable the shipyard to continue in operation in the short term. But it will not, and cannot, in itself secure survival in the long term. Moreover, it
48
must be made clear that there is not a bottomless pit of public money available to keep the yard in existence regardless of performance. These funds can be made available only so long as there is some reason to believe that the company can achieve a viable future and that genuine efforts are being made by all who work at Harland and Wolff to secure this objective. It is on the effort and resolve of everyone in the company that its future now depends. Clearly no one could guarantee success or expect it to be guaranteed, but if this Order is approved we shall be giving management and workers an opportunity to show what they can do. My Lords, I beg to move.
Moved, That the Draft Shipbuilding Industry (Northern Ireland) Order 1975, laid before the House on 21st April, be approved.—(Lord Donaldson of Kingsbridge.)
5.27 p.m.
Lord BELSTEAD: My Lords, as the noble Lord has explained, this Order provides for further Government finance for Harland and Wolff and this is to be done, as Article 3 of the Order states,
"to provide, maintain or safeguard employment in Northern Ireland."
As the noble Lord said, on 26th March the Northern Ireland Department of Commerce published a Discussion Paper. Industrial Democracy, and it stated:
"The Government have stated that they cannot go on pouring money into Harland and Wolff indefinitely ".
I agree with the noble Lord, Lord Donaldson, that this is undoubtedly a fact—a fact underlined by the present economic state of the United Kingdom.
This Order, therefore, marks a serious step for Northern Ireland, and the noble Lord's closing words underlined that fact. It is also a serious matter for the Government which is, after all, through the Northern Ireland Department of Commerce, to acquire Harland and Wolff share capital, to take on the enormous prospective losses of Harland and Wolff's existing contracts, and to shoulder the responsibility of ensuring that in future Harland and Wolff will be run at a profit. Even though this historic yard, extensively modernised, has, as the noble Lord told the House, a full order book, these responsibilities will require a willingness to face facts in the running of industry

49
and employment which I have not discerned in Government policy in Great Britain hitherto. But the immediate responsibilities under this Order will be Northern Ireland ones. I hope that a sense of realism and determination may imbue the Department of Commerce in Northern Ireland—and, of course, at the moment this is a responsibility through the Northern Ireland Office—and that this will see Harland and Wolff through to a better future.
May I ask the noble Lord three questions. First, would it be premature to ask him what is the basis of compensation so far as the value of Harland and Wolff shares to be acquired is concerned? In any event, what is the percentage of shares which remain to be acquired in the company? Secondly, what effect will this expenditure have on the rest of the Northern Ireland Budget for the near future? In the discussion paper, I think the Secretary of State said that he would shortly be publishing a White Paper on Public Expenditure in Northern Ireland for the years up to 1978–79. Are the Government yet ready to say what effect the Harland and Wolff decision will have on other Northern Ireland public expenditure?
The discussion paper of 26th March was mainly concerned with outlining ways in which there could be worker participation at the yard. In that paper this was said:
"The vital question is, who makes the decisions and do the workers themselves want the responsibility of making the yard a success? "
It may be that some very difficult decisions will have to be taken concerning productivity and manning, although so far as manning is concerned it is obviously the hope of everybody that the future of Harland and Wolff will be a future of expansion. My third question, therefore, is this: have the unions yet agreed that they wish to be involved in decisions of this kind, decisions which are going to be essential for the future of the yard and ultimately for the prospects of employment within the yard? Of itself, this Order solves nothing; but with realism and goodwill the future of Harland and Wolff, which is so essential to the economy of Northern Ireland, may be assured.
5.31 p.m.
Lord DONALDSON of KINGSBRIDGE: My Lords, I am grateful for the speech of the noble Lord in which he has accepted this rather difficult Order. As he has said, it is a very serious matter. It would be absurd to pretend that it is not. I can answer his three questions fairly quickly and simply. I need hardly tell your Lordships that the answer to his first question, namely, whether it is premature to ask for the basis of compensation, is Yes, it is premature. This matter will have to be settled in the next Order which will complete the take-over of the firm. It is a fairly complicated procedure and it cannot happen at once; therefore it would be quite wrong of me to make any suggestions. The Secretary of State spoke at one stage about the value of shares, which does not necessarily mean the price of shares. This will have to be worked out. I am afraid, therefore, that the answer to the first question of the noble Lord is that it would be premature to ask for the basis of compensation, and I do not propose to attempt to give it.
The noble Lord also asked about the percentage of capital which is already held by the Government. The answer is that at present the Department of Commerce owns 47·6 per cent. of the issued ordinary stock. In itself, this represents 33 per cent. of the total authorised capital. In other words, a proportion of the stock is not issued. Of the remainder of the total, some 58 per cent. is in private hands, either as ordinary stock or as preference stock, and some 9 per cent. of the ordinary shares remains unissued. I think this is a reasonably accurate answer. In broad terms, at present the Department of Commerce owns 47 per cent. of the issued ordinary stock; 53 per cent. remains to be acquired.
The effect on the Northern Ireland economy of pumping this money into Harland and Wolff will unquestionably be direct, but not necessarily total. There is no doubt that every time this kind of transfer is made the general plans for expenditure in Northern Ireland have to be cut. I do not say that they are always cut by the total percentage; there are possibilities of help from this side of the water. Basically, however, any extra

51
expenditure on one project must be met by savings elsewhere.
The noble Lord asked whether the unions have agreed to participate in essential plans for the future of the yard. The answer to his question is that there can be no future plans unless they have the approval and support of the employees, and that is what the company is working on now. Since the Government announced last July their intention of providing financial support, wage negotiations have been focused on productivity targets, and a manpower resources plan is being produced. Therefore the answer is not a straight "Yes" to the question asked by the noble Lord. In fact, I may say to him that I am perfectly certain that we shall obtain union co-operation in keeping the company going and giving it another opportunity to pull itself round.
Baroness HORNSBY-SMITH: My Lords, could the noble Lord tell us how much money, under successive Governments, has already been poured into this company? It is a matter of concern to me that we are told that Harland and Wolff have a full order book. If they have a full order book and still are not making their way, it is a matter of deep concern that again we should be pouring public money into this company. Could the noble Lord say to what extent any effort has been made to find out whether there is overmanning? It is asking a great deal of today's very hard-pressed taxpayers that they should continue to pour money into a company which, according to the statement of the noble Lord, has a full order book and should, presumably, be building its ships at an economic and reasonable price.
Lord DONALDSON of KINGSBRIDGE: My Lords, if I may speak again by leave of the House, I will answer the question of the noble Baroness regarding quantities. In one way and another, by 31st March, 1975, a figure of just under £60 million of special assistance had been put into the company. In addition, this company, like all other companies, has received a certain amount of standard assistance, and there was another £22 million of that kind of assistance. The second question of the noble Baroness related
52
to the order book. It is not one that I can answer in detail. Roughly speaking, the position is that we appointed a project team to examine the matter. One of the results was that four orders were cancelled, because it was found to be cheaper not to fulfil those orders than to fulfil them. The kind of trouble that the company has run into is the kind of trouble which many companies have experienced—that they accepted fixed price orders and inflation has gone against them. Also, productivity failed to rise as had been planned, and there were a number of difficulties. We are not saying that necessarily the company is going to succeed: nobody can guarantee that. We are saying that this injection of money is, in our opinion, worth while and that the reward of success will be very great indeed. I think that is about as far as I can take the question which has been asked by the noble Baroness.
On Question, Motion agreed to.

THE HOVERCRAFT INDUSTRY
5.38 p.m.
The Earl of KINNOULL The Earl of KINNOULL rose to ask Her Majesty's Government what current support is being given to the British hovercraft industry in their research and development, what future prospects there are for civil and military home and export markets, what monitoring is made of the experience of operators; and how they see the industry's progress in relation to the development of the hovercraft industry abroad. The noble Earl said: My Lords, I believe that the last occasion that the House considered the British hovercraft industry was in July 1973. In that debate the noble Lord, Lord Beswick, lent his moral support to it in an unusually short, sharp and effective speech which was recorded in Hansard in no few r, or no more than 11 lines. At that stage, he urged my noble friend Lord Drumalbyn that, if his prepared speech reacted unfavourably upon the general tenor of the debate, he should lay it aside and deliver another one. I hope that the noble Lord will not need to heed the wise advice that he gave then and, indeed, that today he will come with a hopeful reply.
May I say how grateful I am to the other noble Lords who have indicated that they intend to take part in this debate, and also how sorry I am that the noble Earl, Lord Halsbury, cannot take part in it. He is somewhat of a godfather to hovercraft. I regret, too, that the noble Lord, Lord Kings Norton, is unable to take part in the debate. However, I am grateful to see that we have a Liberal spokesman in the guise of the noble Earl, Lord Kimberley. I rather feared that, after the experience of the Leader of his Party in his interrupted assault on the beaches of Devon during the last Election, Liberal views may have been somewhat jaundiced towards hovercraft!
The Question on the Order Paper is framed in a fairly wide form and I hope that the noble Lord, Lord Beswick, and his advisers have appreciated that its purpose is to seek an up-to-date report on the continuing development of what some people feel will be a very great industry. The most intriguing part of hovercraft undoubtedly is its numerous applications, from the very large passenger-carrying craft across the Channel to the leisure "fun" craft across the Serpentine; from the industrial platforms, moving oil-platforms and tanks over water and ice floes and deserts, to the little medical hoverbed designed for treatment for badly burned patients. Looking back over the debate two years ago, I think it is true to say that at that time the industry faced a bleak future. It seemed then that the Government of the day were showing signs of a certain increasing indifference to the industry. There was evidence that the hard-won technical know-how of this industry was beginning to slip away from the grasp of Britain and to move across the water, indeed to move across not only to France but to America and Japan.
When one looks back to the time of the invention of the hovercraft by Sir Christopher Cockerell one obviously hopes that it will not join the long and shameful list of British inventions wantonly and wastefully thrown away for other countries to exploit. What has happened in the last two years to this industry? Abroad we see that there has been a continuing growth of investment in hovercraft research. I am advised that in the United States of America the re-
54
search programme up to 1975 has now grown to some 206·9 million dollars, all principally involved with defence. For the 1976 Budget, the Department of Defence is requesting, I understand, some 38 million dollars together with an amphibious assault craft programme amounting to some 20 million dollars. That is a very substantial programme and we know that in France the Government is supporting the N 500 craft which, when it goes into service—if it goes into service—will he a direct competitor across the Channel of the SRN 4. We know that in Canada there is another Government programme for tackling operations in the Arctic. Finally, of course, we know that Japan is very interested in hovercraft and its development, and is building hovercraft under licence. Perhaps when the noble Lord, Lord Beswick, replies to the debate, he will be able to give us more information on what is really happening abroad.
At home in the last two years, I suggest that the industry has had somewhat mixed fortunes. I think it is fair to say that in Whitehall the industry has not been viewed with much enthusiasm. In 1973 the industry was given what many people may have thought was a Mafia type kiss of goodbye by being given its terminal grant to be used up by 1974 to develop existing craft. At the same time the hovercraft directorate within the DTI was abandoned. But perhaps worst of all was the publication of the White Paper on the Channel Tunnel project which gave only four lines to the hovercraft and its potential, despite the fact that, at that time, five hovercraft were taking some 30 per cent. of the traffic across the Channel.
The noble Lord, Lord Beswick, may say "Ah, but that took place in the previous Administration ", but I regret to tell him that things have not improved with the present Government. In January of this year the Government were asked in another place for information on the current hovercraft exports and support, and they gave the figures as being 0·9 million in 1972, 2·3 million in 1973 and 1·5 million in 1974. When one looks at only one hovercraft company, namely BHC, one sees that, in fact, these figures are not accurate. Again, I hope that the noble Lord will be able to clarify the position, and, indeed, the position

55
with regard to the research and development programme, which again was challenged by the industry.
The main purpose of my short speech now is not necessarily to bring up these old points but really to ask the Government whether they will recognise the very important part they need to play in the hovercraft industry. I think few would disagree that the industry is still facing—indeed even more so—very challenging competition from abroad. We know, as well, that the original patents protecting this British invention have now a fast-diminishing life-span before being open and unfettered in the world markets. I believe the Government cannot afford to adopt a policy of inaction and indifference to this industry if it is to thrive as a British industry. The role of the Government in industry and the part it can play, not just in the funding of research and development but also by information and credit assistance, and indeed by purchasing craft, is something which should be examined. I should like to suggest to the noble Lord that an independent committee should be set up by the Government to investigate and study the hovercraft industry. Perhaps the study could be made by the Centre of Transport Studies at Cranfield. Evidence could be drawn from manufacturers, from operators and from consumers and consultants, to examine not only the potential of the industry, its employment, its export earnings, but also the vital role between Government and the industry.
My Lords, what has the industry achieved in the last two years? I say two years because it was two years ago when we had our last debate. I believe that its achievements, and indeed its future, appear much more heartening. The result of its exports we have seen with the Hover Marine Company in Southampton, which employs some 150 people; they have exported no fewer than 30 passenger-carrying craft to 14 different countries. We have seen the British Hovercraft Corporation—the largest manufacturer, employing 2,000 people at Cowes—again with a good record of exports, mainly in the military field at the present time. Indeed, I believe it exports some 74 per cent. of its production and it was awarded the Queen's Award for Industry only a
56
couple of weeks ago. One also has Vosper Thorneycraft, a highly independent and profitable company, which as we know has been developing a large military craft but now faces the uncertainty of nationalisation. I hope the noble Lord will be able to say what the Government intend to do to maintain the hovercraft division within Vosper Thorneycraft.
But there is one other factor which has been a major encouragement to the industry, and that, of course, was the cancellation of the Channel Tunnel project. This obviously involves the large SRN 4 craft. The Channel at the moment has only five craft operating between two operators—Hoverlloyd and Seaspeed. I understand that Hoverlloyd has shown a profit for three years and Seaspeed certainly showed a profit in 1973. The position of the Channel crossing and the SRN 4 is quite clear to the noble Lord, I have no doubt, but perhaps it is worth emphasising that there are two issues facing the industry and the Government at the moment. The first is that the Government—or initially British Rail—should give the go-ahead for a stretched version of the existing SRN aircraft to offer an additional 50 per cent. capacity. The second decision is, of course, the second generation of the SRN 4 to give a better operational performance and one which, I understand from the manufacturers, could lead to a fuel saving of some 60 per cent.
We know that looming large in this decision is the French craft, the N 500, and we know that, if no decision is taken in the reasonably near future, the French craft could become more and more competitive. If one assumes that Seaspeed can persuade its parent company, British Rail, to proceed with, and ask the Government to give the go-ahead to, the stretched hovercraft, I hope the noble Lord will be able to give us an assurance that the approval of the Government to any such application will be as speedy as possible, and approval will not be linked with some other Railways Board requests. It is vitally important that any hovercraft policy by Seaspeed should be judged individually on its merits. The importance of the timing of the decision of the Government and the Railways Board has been reinforced

57
by the joint trade unions at the British Hovercraft Corporation, as well as by the management. I hope the, noble Lord will be able to say something firm on this.
My Lords, turning to the next generation of the SRN 4, I hope the noble Lord will be able to say whether the Government are encouraging both operators and manufacturers to get together to hammer out an agreed specification. With reference to the smaller craft of hovercraft, I know the noble Lord, Lord Selsdon, will be dealing with this particular aspect and, indeed, with other funding problems. I should like to ask the noble Lord three specific questions on this and other applications of the hovercraft.
My first question involves the industrial hover-transporters. I believe there are a number of very successful small companies in this sphere which have won large export orders. I should like to have an assurance that the Government are giving support to these companies, if asked, not only with funds, but with credit facilities and even better, information from embassies about the markets abroad. My second question refers to the hoverpad for crashed vehicles at airports. This matter was raised in 1973. I do not know whether there are plans for any of the airports—or, indeed, whether Heathrow has plans—to have a hoverpad available to lift off any aircraft requiring it.
My Lords, the third matter concerns the hoverbed. As the noble Lord, Lord Beswick, will recall, this bed was heralded with some acclaim five or six years ago when it first was introduced at the Mount Vernon Hospital. I do not think much has been said about it recently. It would be interesting to know whether the medical world have proved its application, and whether the Government is continuing with research. The hovercraft industry is still a young industry. It is very virile, fascinating, and totally opposite to a lame duck. For some years its potential has been somewhat marred, I believe, by a degree of overenthusiasm and by extravagant claims. I hope that it is now passing through its puberty stage, and that its passenger-carrying capability has been proved viable. Competition is increasing from abroad, and our technical lead will not long remain.
58
Unless the Government show their resolution and support, I am sure that the hovercraft industry will be lost from our grasp.
5.54 p.m.
The Earl of KIMBERLEY: My Lords, as the noble Earl, Lord Kinnoull, said, the Liberal Party has been involved very intimately in the past with hovercraft, and even if not in every sense satisfactorily, still with enough faith to continue in praise of them. The noble Earl explained very eloquently about the SRN 4 and about cutting it in half to make a stretched version. However, I have been led to understand that, if this is to go ahead, it is very important that the order for the first one should be given by July, as, otherwise, it will make life very difficult for the British hovercraft factory.
There is a further point worth raising on this matter; namely, that the French N 500 already referred to is Government subsidised. I have been led to understand, and knowing the French it is probably true, that they will be delighted if they can drive our hovercraft off the Channel. The British Hovercraft Corporation, unlike many firms today, is not asking for any money from the Government. The Corporation has a large labour force. If it cannot find a more certain future, it may be possible that this will lead unnecessarily—and I hope that it would not—to redundancies, as well as putting into jeopardy the whole future development of the hovercraft industry in this country.
As your Lordships will know, this is a British invention. It would be tragic if the United States of America—and, in particular, France—took the lead in this industry, despite the British pioneering that we have done. It may interest some of your Lordships to know that, if you add 48 ft. by cutting an SRN 4 in half, you increase the capacity from 30 to 54 cars, and from 254 to 394 passengers. This machine, then, would compare more than favourably with the French N 500 which carries 65 cars and 385 passengers. The SRN 4 has proved it is commercially competitive in service. If it can get the order to stretch one of these, it would give great incentive to the British hovercraft industry to enlarge itself, and to

59
keep well ahead of any foreign competition.
It is an interesting point that, since 1966, the Government have put only £9 million into the British Hovercraft Corporation. I have been led to believe that the Government have spent money elsewhere, but not with the British Hovercraft Corporation. The total figure for research and development is £15 million. That has mostly been funded by private investment. Each year, the hovercraft grows more efficient—the power/weight ratios improve, the service reliability gets better, the seaworthiness and seakeeping in bad weather improve. In the new generation craft, it has been worked out that fuel consumption would be 15 per cent. less than ships per unit of payload. It may be coincidental that many aircraft seem to work better when stretched. This seems to work also with the hovercraft. All these points really need no new total technology.
My Lords, I repeat that the British Hovercraft Corporation is not asking the Government for more money. If possible, it would like an endorsement by British Rail, which would be, of course, subject to Department of the Environment and Treasury approval, hovercraft. That is a possible reason I should like to mention. During the last few years, I believe no fewer than seven Ministers have held responsibility for hovercraft. That is a possible reason why we do not have a rather more concerted policy. Perhaps the noble Lord, Lord Beswick, can give this matter some active consideration—possibly in consultation with the right honourable gentleman the Minister for Transport—to allow a publicly-owned sector of the operating industry to undertake freedom of choice in its routes and commercial judgments, and to rid it of the fetters of the British Railways Board.
My Lords, my last question to the noble Lord, Lord Beswick, stems from the fact that I believe the United Nations have published a book entitled Air Cushion Vehicles for Developing Countries. This book is being published in English, French and Spanish. I should like to know whether our commercial attachés in each of the developing countries are in possession of this publication. It contains much information about
60
the use of hovercraft. Most of these are British by reason of our lead in the technology. It seems slightly curious that successive United Kingdom Governments have done so little to publicise the potential for hovercraft in the developing countries. It is to the credit of the United Nations that they have undertaken this work.
6 p.m.
Lord SELSDON: My Lords, my noble friend Lord Kinnoull and I are to some extent in cahoots in this debate, not really as Back-Bench Conservatives, but, I hope, more as patriots. I shall speak on a fairly wide-ranging theme, with no intention at all of criticising or attacking the policy of the present Government or the last Government or previous Administrations since the hovercraft industry began. I think there is one point of concern. It is a fairly true statement that if the right steps are not taken now, yet again Britain will fail to take advantage of turning her technology into good export orders and dominating an industry which we founded. The question I ask is, does the United Kingdom want to have a hovercraft industry? Is there any reason why she should?
I am not making a plea on behalf of the industry to pump yet more public funds into a Selsdon lame duck, nor am I suggesting that we need any other legislation or change of organisation from what exists already in the hovercraft industry. The hovercraft industry at the moment is not an ailing industry, it is a fledgling industry. It has a turnover of £10 million, £11 million, or £12 million; it employs under 2.000 people. and is divided roughly into three areas: the large manufacturers of large craft which sell at a price of £4 million or £5 million upwards; the manufacturers of platforms which do not have prime movers, which means they have to be towed or moved about for oil rigs or drilling operations, and which sell for up to half a million pounds; and the manufacturers of the smaller craft, going right down to tiny operations which sell for as little as £1,500.
It is not an industry which needs vast amounts of capital. It is not an industry in which vast amounts of capital have now to be spent on technological development. I believe that the public funds pumped into the industry since it began

61
total something around £16½ million, and indirectly the Government have already received back something between £2 and £2½ million. We are not saying to the Government, "Find large amounts of public funds "; but what we are saying is that if there is not the right cooperation between Government, the industry and the potential purchasers in overseas markets, then our industry again will be upstaged.
I must declare an interest in this. It is a rather roundabout interest, in that the group with whom I work did have an investment in one of the operators of hovercraft, a rather disastrous investment which we sold not so long ago. We also, in one of the other companies in our group, insure hovercraft in various areas. When I suddenly, about six months ago, thought that there must be a future for the hovercraft industry, I started to take an indirect commercial interest. I found to my surprise that many of the smaller companies were in dire financial difficulties; that few of them could finance any major orders or contracts which they might receive; that much of the expenditure which was needed to turn the technology into money could not be met.
The Americans often have an appropriate phrase. The word "know-how" is the magic phrase for converting commonsense into cash. We have the development in the industry. We have virtually all the technological development that we could require, so much so that the rest of the world acknowledges this quite readily, but with a certain amount of cynicism, because again they believe that yet another British invention will help to make money for another country, and that we will be funding the technological development on behalf of our international competitors.
As your Lordships may know, or as I believe is the case, in five years' time many of the patents expire. The American industry is sitting waiting for this to happen, waiting for all the problems to be ironed out, with plans to move in and take over the hovercraft industry and make a profit, as it has done so often with other British inventions. The Japanese, who are past masters at using other people's technology to develop their own exports, are doing the same. They have licences, but they have been buying
62
British hovercraft; some are being taken to bits, and in due course throughout the South-East Asian market and other areas Japanese hovercraft will appear with Japanese engines, with wonderful service and no problems, and with great reliability. The French are perhaps more cunning than many others, because they take a much longer and broader view. They are sitting on the other side of the Channel with this hovercraft. It is not just a hovercraft; it is the start of the French hovercraft industry. If they can get their hovercraft on the Channel route, it becomes the showroom of the world; everyone will be taken to look at it. We know the efforts the French are making in the Third World to sell their technology and know-how and to obtain funds for recycling in French industry. If that hovercraft is operating on the Channel route, then we have very little hope of selling any of ours when the French become involved.
These are three competitors, and for the moment the world cannot afford four hovercraft industries. It is going to be a medium to long-term potential, and although the potential lies to some extent in certain areas of transportation within Western Europe, the bulk of the potential lies in the Third World, in the developing countries, where the principles of the hovercraft and the hoverplatform offer considerable advantages. I have made these inquiries myself as I have been round the Middle East and some of the developing countries in recent times, and it is sad to find a lack of knowledge of what the hovercra t can do, a little misunderstanding of the concept. But some people—I speak of the French again, and I have spoken with them of the future which lies in all sorts of areas—have said to me that the hovercraft is the first means whereby war could be made in mid-winter in the Arctic, where from Soviet Russia major attacks could be made on Scandinavia in the middle of the night, at high speed in warm comfort. I myself never thought that a hovercraft would go running over ice. We look at the Alaskan pipeline, where one of the British companies has just sold £1 million worth of hoverplatforms and is well respected and regarded by the Americans. This same company was forecasting that in this year it would have a turnover of just £1 million, but it has already

63
exceeded that in the first quarter. We have some of the smaller people who in developing countries, whether it be Zaire or Indonesia or parts of Africa, have the inquiries, not necessarily the orders. The smaller craft are selling at low prices and make up only a very small section of the industry.
My Lords, I have spent 17 years working in the international field, often in a marketing role. I often regret the way that we British have never been capable of selling or delivering many of our products abroad. We are continually being upstaged. The hovercraft is more than just an invention; it is an emotional thing, it is a prestige thing. Those of your Lordships who know the realities of that sale to Iran by BAC realise the power and feeling that has been given to the Iranians for the future of their activities in the Gulf. The other Arab countries all have interests in hovercraft, often again for emotional reasons. We know that the Americans and the Japanese are waiting to exploit these as time goes by. I was saying earlier that we do not ask the Government to "fork out" large amounts of money for the industry. What we ask would be the ideal here of the mixed economy: of Government with industry, with the private sector, and also within the context of the European Community. In all of these things there has to be some form of co-ordination and some form of centre.
It is not an industry that the Government would wish to nationalise; nor would it be wise to do so, because it is a fledgling industry, not a developed one. It is not an industry which in the next two or three years is going to offer large job opportunities; nor is it an industry which can produce vast export orders immediately. But it is an industry which, within a period of five years, could became the subject of a major world operation. If we took the right steps now, we could put ourselves so far ahead of the rest of the world that they could not afford the investment to catch up. As your Lordships know, there are areas of the private sector where Government involvement through NRDC has been very helpful in providing money for technological development, improvement of innova-
64
tions, et cetera. Many of the hovercraft currently manfactured may not be up to standard; there are technical faults.
There are criticisms of the "meccano and glue brigade ", who have sold things in certain parts of the world which did not work, and which perhaps put people against the hovecraft principle as a whole. There are criticisms of, "A bunch of Spitfire pilots who do not know a thing about money and just want to go flying around over water and land ". That may have been the case a few years ago, because every industry of this sort takes a generation to develop, a further generation to make a lot of money, and it then seems to take another generation to fade away and die. I do not think particularly of the motor industry, but there are others where this technological development has a certain life period. One of these definitely lies in the developing world.
The applications are legion if people can apply their thoughts to it. The people back at home cannot understand the applications to which a hovercraft can be put unless they have been out in, say, Indonesia and have seen a road being topped up and sinking continuously into the marshes, and costing thousands of pounds each year to rebuild, when a hovercraft could carry people over quite happily. Then there is the 90 day or 100 day demurrage in the major ports where people cannot get their cargoes unloaded, and have suggested to me that dumb lighters on the hovercraft principle which could go straight up the beach could easily be used, and could recover their costs within a period of months. Then, in the Middle East, the Arabs have said to me, "Will you run a hovercraft service from Jedda across the Red Sea?" Others have said, "We need things for pilgrims," and for all forms and areas of activity which I have never thought of before.
We tend in this country to be almost too Western orientated, and to think in terms of Western economics. In the past, perhaps, we looked down on the developing world as somewhere where we should provide aid, but hardly ever thought of it as an area for marketing opportunities. The hovercraft industry, in itself, cannot afford to launch the major campaign

65
which is needed to educate people throughout the world. Nor should it do so, if the markets and opportunities are to fall into the hands of the Japanese, the French, or the Americans. There are some possibilities, and I think it is always better to try to be constructive even if, at times, you may tread on people's toes. The hovercraft industry is obviously against being nationalised in the big league. It is certainly wrong that the hovercraft division of Vosper should be completely in national control. I will not go into the reasons why, but when you have a fledgling industry which depends upon entrepreneurial feel and drive, it is totally different from a developed industry.
I have spoken with the various hovercraft companies over the past two months. I have spoken with other people from other countries when I have been at the Council of Europe, or elsewhere abroad, on this subject. The admiration which is expressed for the potential of the hovercraft is considerable. The backbiting which used to exist within the industry seems to have disappeared and faded away. There appears to be one common sense of purpose, and a willingness to try to co-operate with the Government—preferably at arm's length and as far away as possible, but certainly to co-operate.
I should like to suggest that one gives some consideration, not to rationalisation because that is an emotive word, but to co-ordination within the industry within existing legislation, which might help it to take better advantage of the potential which will lie abroad. We have to look at the sources of finance for the industry. There are Government funds in this country, where large amounts—not large by national standards, but certainly large by private company standards—have already gone in, and more funds are available to develop and improve the industry. In many cases the industry would accept that what has been done by the Government in this area was good and right. There are criticisms that money may not have been provided for a certain project, or someone employing one man may feel that he should have £3,000 today to help him do something else. So there is the British Government as a source of funds.
66
Then there is the private sector, which covers the companies themselves, or, one could say, our financial institutions and the individual entrepreneur. The economic climate makes it very difficult to raise any funds for new development from the private sector at the moment. In times of high taxation, the individual entrepreneur was willing to take some risks, but in times of exorbitant taxation he would rather not have any money at all. It is wrong to think that we could rely on the private sector to try to finance, in the short term, a fledgeling industry where the potential return is two or three years away.
There are other things that we often do not think of. Hovercraft technology is regarded within the EEC as an EEC asset. Thinking that I might be able to do something to help, I went off to see the European Investment Bank in Luxembourg. I asked them, Will you provide funds for companies in the hovercraft industry? "They said, after some discussion, "In principle, yes, provided the British Government would approve, because it meets the criteria which we have laid down, and of course the United Kingdom is not asking for as much as we would be willing to give ". I said, "May I tell the industry that?" and they replied, "Yes. The application has to be made in the right way. We will not put up less than £1 million."
It does seem to fit very well, but if you consider the industry as a whole, it meets the criteria in that there is one company in an assisted area, it is high technology, it is connected with energy and transport, and it is without doubt in the interests of the EEC. I would hate to have to argue that with them, but it is within the interests of the EEC. If we can upstage the French by getting EIB to support our industry first, it will be a political move. It will also be a good thing at this time, as a pro-Marketeer, to encourage funds to come from the EEC, because this may give the British the feeling that money is available to help our industries—which indeed it is.
In order to do all these things on the financial side and to bring in the private sector, I went further. When I was out in developing countries I said to people, "If and when, as it will, the British hovercraft industry becomes powerful, is

67
it the sort of thing in which you would like to have an investment? "Some of these countries, some with funds in the Arab world, said, "Yes, because this has an application in our country, and it would appeal to us." I then came to the conclusion that with the right approach, adequate funds could be made available. These funds are not for technological development, because the NRDC can provide them. They are really to help finance the industry when it needs financing, and to help with a co-ordinated marketing programme to produce hovercraft on a worldwide basis.
Then I asked what other sources of money could be made available under current legislation. I was told that under Section 7 of the Industry Act money could be made available to an assisted area. One of the companies is in an assisted area. I was told that under Section 8 it might be possible, if there were some reorganisation of the industry, to obtain funds. I thought that it would be totally wrong in these hard times to announce to the country that the Government ought to put millions of pounds into an industry which employs only 2,000 people. Then I thought we ought to see how, and in what way, all of this could be co-ordinated. As your Lordships will know, within the NRDC there is a company, Hovercraft Development Limited, which has done a lot for the industry. But the NRDC function tends to be technological, when the problems now are really marketing, rationalisation of production and, when the craft are in operation, servicing and the provision of spares.
First, one has the role of selling the hovercraft concept. It so happens that by pure coincidence the different companies within the industry do not really compete with each other to a very large extent. There is overlap, but all of them have found a narrow sector where they believe there is a market of their own. I should like to suggest to the Government that they consider giving Hovercraft Development Ltd. a slightly less Government "feel" and a slightly more independent attitude. We should try to use Hovercraft Development Ltd. as a vehicle not only for channelling technological resources, but also for co-ordinating marketing, and perhaps production, and bringing the industry together. I should
68
also like, as a Conservative, to suggest that in due course the Government might consider spinning off Hovercraft Development Ltd. into the private sector, which could be a possibility if we were looking for funds in the future.
I have spoken with companies in the industry, and all of them seem to believe that there is a need for some form of co-ordination. I believe that the first stage should be some form of promotional and co-ordinated research programme. Under current legislation of the BOTB, the Government offer to provide a large proportion of the cost of a research project. It could be a worldwide research project, costing a fair amount of money. This, again, could help the industry, because in doing research there is the selling of the principle as well. Rather than necessarily charging off, as individual companies, to major air fairs with major expenditure in far-flung parts of the world, would it not be better to bring the people here?
You cannot sell hovercraft unless someone has seen one, or so I submit. It is expensive to ship a hovercraft or a collection of hovercraft to Indonesia, but under the Inward Mission Scheme of the BOTB the Government could be willing to accommodate missions from countries where the potential lies. This leads one to suggest that we should perhaps have a common demonstration area within the country, probably on the Solent where most of the industry is concentrated. One is led to suggest: why do we not do this now, this year, without a great deal of expenditure? Perhaps one could suggest, too, that Cowes Week would be an appropriate time to get the industry together and to invite potential purchasers from the developing countries.
The hovercraft principle definitely has a potential. That I think everybody will accept. People may criticise the application of that potential. One may say that it could apply only for military purposes; that small hovercraft have no potential. Others may say that it is best for hoverplatforms, and that hovercraft should never try to compete with ships. But whatever it is, there is a potential. The question I have for the Government is: Do they believe there is a potential for a British hovercraft industry? I know that the Americans believe there is a

69
potential for theirs, while the French and Japanese wish to develop their own. I suggest, too, that we give consideration to co-operation within the Commonwealth on this basis, because the Canadian hovercraft industry is in similar straits to our own and is wondering in which direction it should go. If the British should fail, the Canadians may wish to co-operate with the Americans. But co-operation with us would surely be more beneficial, particularly in view of the vast Canadian market, developments in Alaska and the need to move into Latin America as well. I know that the noble Lord, Lord Beswick, will be sympathetic to the industry as a whole. I hope that he may give consideration to some of the suggestions I have made. I hope that in three years' time we may see in this country a thriving hovercraft industry which is no longer a fledgling.
6.22 p.m.
Lord WYNNE-JONES: My Lords, after listening to the speeches of the noble Earls, Lord Kinnoull and Lord Kimberley, and also the noble Lord, Lord Selsdon, I feel that I have little of technical importance to contribute, because they have already exhibited very clearly the technical significance of hovercraft. However, there is something to which I must refer. It was in 1968 that the noble Earl, Lord Kinnoull, asked in your Lordships' House a similar Question about hovercraft. On that occasion I took part in the discussion. On balance, I was opposed to any idea of the development of hovercraft. The noble Lord, Lord Selsdon, has given us a wide-ranging account of hovercraft. At that time in 1968, having had a pleasant lunch at Cowes with the Hovercraft Company, I had returned convinced that hovercraft had no future, because it seemed to me that they were developing along lines which could not possibly lead to anything useful economically. I should explain that at that time they had built the SRN 5 and the SRN 6—for some peculiar logic the SRN 4 came later—and the SRN 6 was considerably smaller than the present SRN 4, which is used across the Channel. I travelled on the SRN 6 to Cowes. It was a bumpy, noisy and unpleasant ride. It seemed to me that when you took into account the cost of building that version, it was not worth while.
70
Perhaps your Lordships may forgive me if I indulge in some minor statistics on this matter. There are various ways in estimating the capital cost of transport, but I think I am right in saying that when you are discussing hovercraft you have to compare it on the one hand with an aeroplane and on the other with a surface ship. I am not now referring to certain devices for going across swamps but for travelling across open water. If you do this, then there seems to be little doubt—I am not sneaking as an expert but as someone who has studied the expert evidence—that the appropriate way of discussing it is in talking about ton-knots; that is to say, the number of tons that you can transport at a certain speed of one knot. Going back to the time I am talking about, eight years ago, one finds, in making this comparison, that the cost per ton-knot of the SRN 6 then was about 30 per cent. more than the cost of a Boeing 707. It was something like three times as much as the cost of a surface ship. That seemed to me—I may have been wrong—to exclude the hovercraft as a possible means of transporting people or vehicles across the open seas, such as the Channel.
Since then the SRN 4 has been built. Its cost has dropped per ton-knot. I think I am right in saying that the cost of the SRN 4 is now just about the same as the cost of a Boeing 707 and about twice as much as the cost of a surface vessel. This means that the SRN 4 is at least competitive with an aircraft, but not competitive with a surface ship. So it begins to come into a range at which one might think of its potential. Since that time I have had another lunch with the Hovercraft people. I must admit my indebtedness to them and say that undoubtedly they have influenced me: the first time they influenced me against them; the second time I listened to them carefully. I have taken their figures and have looked at them carefully. I have the figures here as I do not wish to quote just from memory. What I now find is that, whereas the cost of the original SRN 4 at the present time is £500 per ton-knot, which is about the same as the Boeing, the stretched SRN 4, cut in half and in which is inserted another section, or alternatively built as an entirely new vessel of equivalent capacity,

71
is £200 per ton-knot. That is practically the same as the cost of a surface ship.
This is a sensational improvement. I am, of course, relying entirely on figures given to me, but if they are correct it seems that the economic position has changed dramatically in the last few years. As I said, I took part in the debate which was initiated by the noble Earl, Lord Kinnoull, on 26th March 1968 and on that occasion I was highly critical of hovercraft development. Looking at the matter afresh, I have changed my opinion and I now feel that there is a very good case for looking at the SRN 4 in its stretched version and for going ahead with it.
This case is reinforced by the fact that we have, in my opinion correctly, decided that the building of the Channel Tunnel would be a ludicrous piece of prestigious nonsense. Instead, we have decided to rely on other means of transport, surface and air. The capital cost per ton, knot would be less for hovercraft than for aircraft and it would he virtually identical with surface craft. This seems to me to mean, when one considers the flexibility of hovercraft, that we should go ahead with this form of transport. I say that because for surface vessels one must have ports at both ends, as it were, because one must have the capacity to get on and off ships. This is not the case with hovercraft. One must, of course, have something, but not ports of the conventional type. In other words, one produces flexibility of transport, and in my view this is highly significant.
The time has come for us to look at this matter from a totally different point of view from that when we considered it, and rightly so, eight or ten years ago. The industry has reached the point when it can do this job in a sensible way. I am not fully satisfied that it has necessarily produced the right means of production, but I recall that when I saw hovercraft being produced some years ago I was shocked at its hand-made construction aspect, the way buoyancy tanks were being bolted together, something totally different from the operation involved in making aircraft. I thought at the time that if the Americans got in quickly they would be able to do it much more efficiently than us. But we
72
now seem to have reached the point where we can do the job properly, and I hope that we will give every encouragement to our industry to go ahead and do that job.
Like my noble friend Lord Beswick, I was an advocate back in 1964 of what was then called "white hot technology." I am still an unrepentant advocate of white hot technology, because the one thing that could destroy this country is the mentality that we should make only things like fruit machines, soda water syphons or can openers. That will not save us. It is only by making technological advance, in which this country can excel, that we stand any hope of going ahead. I therefore feel, years after my first speech on this subject, that I must now support the idea of the hovercraft.
6.36 p.m.
Baroness WARD of NORTH TYNESIDE: My Lords, I have no technical knowledge of hovercraft, but after having been in another place for 38 years representing two constituencies in the North of England I think I can modestly claim to have some experience of helping forward the Government machine when we want action, and that is why I speak today. I have always been interested in developments with which this country can be connected and, as I say, I have always been interested in finding out how the Parliamentary machine, whether in another place or, now that I am a Member of your Lordships' House, in this place, can be moved.
I have no idea how sympathetic or otherwise the Minister is towards this subject, but I listened with interest to the tremendously interesting speech of the noble Lord, Lord Selsdon. Though I have been in your Lordships' House for only a short time, I have managed to extract details of the grants of one kind or another which have come to the United Kingdom from the EEC. I have been grateful for these details and I was therefore particularly interested to hear the noble Lord, Lord Selsdon, speak of having been to Luxembourg where, I understood him to say, he received a reasonably satisfactory reply. That does not surprise me, in view of the vast number of grants that have been given over a very wide field of development, some

73
of which will presumably be successful. Suffice it to say that we have had great success from Europe in this respect, and I was therefore delighted to learn that the noble Lord had make his mark there.
I am equally sure that the Minister is delighted with the number of grants and support that we have received from Europe, and I see no reason why, providing he can get a satisfactory basis with the EEC for going forward, a grant should not be made available from the same source for this purpose. After all, we do not live in a world in which we can afford to let anything go by that has a possibility for development in the future, and I am sure, from the speeches made on this subject today, that a good opportunity lies here.
One thing the noble Lord, Lord Selsdon, mentioned was the problem of getting people to see the hovercraft. I hope that those who are so interested in it will forgive me for saying that, so far as my part of the world is concerned, we are absolutely delighted that we are at last going forward with the Seahorse engine for merchant navy work. I have only fairly recently received an invitation from the three firms on the North-East coast which are to have an open demonstration of the engine so that they can show it off. In a way, I should have thought—devoted though I am to the Seahorse engine, and proud as I feel of our efforts—that the hovercraft would be more interesting than the Seahorse engine for such a demonstration.
As I say, although I can make no technical contribution, I was very interested in what the noble Lord, Lord Wynne-Jones, said when he admitted that he had changed his mind. I think that that is absolutely marvellous. I believe that we ought to change our minds when reasonable evidence comes forward which enables us to do so. I believe we have a marvellous opportunity now to go ahead with the development of the hovercraft. Once again, I refer to the fact that we have had such marvellous grants from the EEC. I believe that that ought to have a great impact in making the United Kingdom answer "Yes" to the referendum, because, at least in my part of the world, if we know that we are benefiting we are much more inclined to put our
74
weight behind whatever is available for us to put our weight behind.
I think it would be extraordinary if the noble Lord, Lord Beswick, were to give us an unhappy reply, though I do not imagine that he will do so. I believe he will give an exciting reply and will say that we should get on with it and should do everything we can. I should like to put forward all the matters included in the Written Answer which I received to my Question and which appears in Hansard for last Thursday. They have had great success. There could not he a "No" from the noble Lord; it would not be reasonable. I know that all politicians like to think they are reasonable people, and, though quite often people have hit me down, I always pop up again.
I should like to ask my noble friend Lord Selsdon whether this particular matter has ever been brought before the All-Party Parliamentary Scientific Committee. That Committee ran very successfully for many years while I was in another place. It was there that I became enthusiastic about the Seahorse. I remember very well when my own Party was in Government, when the Secretary of State in question said that the money could not be found, even though the whole development had been financed out of private capital. He said that he had to be quite certain that it would be a great success in terms of export orders.
My Lords, here we are with an old new development or possibly a new old development. I cannot see that any of us in this House would not be in favour of that development. We must have everything we can which will be technologically successful in this modern age. I have been delighted to hear the arguments which have been put forward. As I say, the only contribution that I can make is that I can, in my own way, be rather a bother to Governments if I start arguing for something I think worth while and I do not receive a reasonable answer. I do not think that I need say that, because I feel sure that the noble Lords who have spoken today will get a sympathetic answer. The thing is to try to get as much as we can from a European commitment which would welcome the opportunity of helping us to go forward with this hovercraft service. That is all I have to say. I am very excited and I

75
hope we shall have a happy and constructive reply from the Minister.
6.46 p.m.
Earl FERRERS: My Lords, I am glad that my noble friend is excited by the prospect of the hovercraft. I rather gathered that from the tenor of her remarks. I believe that the whole House is indebted to my noble friend Lord Kinnoull for having produced a further example of the knowledge, expertise and initiative in relation to yet another specialist subject which we have come to expect from him. Up to the present moment, I have found the whole debate to be quite fascinating. I thought that the speech of my noble friend Lord Selsdon was very remarkable for its knowledge, wisdom and common sense and it was all done without a note. I believe that it will contribute very greatly to the consideration of the subject.
My noble friend has this evening asked a Question which I find both interesting and important. It is interesting because it asks a number of specific questions of the Government, which I have no doubt the noble Lord, Lord eswick, will answer with his customary precision. What future prospects do the Government think there are for civil and military craft both at home and overseas? That is quite a question, and it is a very important one. I look forward to hearing what the noble Lord says, and I hope that he will be able to give the House a perfectly frank answer and will not feel inhibited about giving too open a recognition of the value of the hovercraft for fear that that might lead to pressure on the Government to participate in the industry either as a major purchaser or as the provider of financial incentives. I hasten to add that by "participate" I do not mean the somewhat bizarre activities of participation by the Government in spheres which have recently been mentioned in the newspapers. As in almost every sphere of life, the Government, even if they do not actively participate, are inevitably involved. Their attitude influences matters, and I hope that that influence will be helpful and constructive, and will be neither destructive nor even an attitude of passive indifference.
76
The other part of my noble friend's Question which I think to be of particular interest is how the Government see the industry's progress in relation to the hovercraft industry abroad. I should have liked to add a further question which is how the Government see the future in relation to other forms of travel. All these questions are interesting because we have in the hovercraft a relatively young, new and different industry, which could and should do well, but which could and might well fail. One is bound to ask the question: should it be allowed to fail? Clearly if, as a method of transport, it has no reasonable place in the future, then it should be allowed to fail; but if it has a place in the future, then it should not be allowed to do so. I want to make it perfectly clear that I am not talking about the financial position of any company because I do not know the financial position of any company in the hovercraft business: I am talking merely about the method of mobility with which the hovercraft industry, by its very nature, is involved. If there is a place for this type of travel or mobility in the future, it should not be allowed to fail simply because of lack of initiative to buy, or lack of encouragement, or because of general lethargy, whether by Government or by business. Nor should it be allowed to fail simply because ab initio there is not worldwide clamour for its products.
I thought that my noble friend Lord Selsdon was so right when he said that it takes a generation to develop a product and a generation for it to make money. Of course, you cannot get to the second generation without having first gone through the first generation. If you want to sell any new product you have to test the market and see whether it is required; then make the product; and then go out and sell it. That is fine if the product consists of tins of cat food selling at 30 pence each, though I daresay that the cat food manufacturers would tell you that it is a very dicey business, fraught with appalling financial risks. But when you are trying to sell a totally new concept of travel and propulsion, where you have to make inroads into methods of propulsion that are universally accepted and proven and which have stood the test of time right across the board, and where the unit cost is not 30 pence but £2

77
million or £5 million each, you are on to a very different kind of ball game.
One has merely to look right at the other end of the spectrum—at Concorde—to appreciate the point. The tough part of commercial business life can be appreciated when one realises that the first contract for the SRN 4 which the British Hovercraft Company had was for the second craft it built, not the first. The company had to make the first craft "on spec." in order to achieve the guaranteed contract for the second one. Therefore there is obviously a substantial element of risk in this type of enterprise. I am no maritime expert, but it has always seemed to me that through the whole of life on this earth the one limiting factor to the speed of ships has been—one thing, friction; the friction of the water. To have overcome this resistance by, as it were, taking the boat out of the water and resting it on a cushion of air, making it theoretically resistant-less, is, at the same time, so simple, yet something which has defied human beings until just the other day.
I venture to think that the system must have a part to play in transport in the future, though I am not certain exactly where that part will be or how large it will be. Let us be clear, the invention of the system is a British one and we are the leaders of the world in it. My noble friend Lord Kinnoull said that we must not let it become another wonderful British invention to be dropped. I agree with him. Nor do we want to see the axe swinging over it as we see it swinging over some other new enterprises. As I sat on the Bench this afternoon I could not help thinking wryly that whenever there is a really exciting invention—particularly if it is something that moves—that is likely to come into trouble, it is the noble Lord, Lord Beswick, who always has to sit there and answer the case for the Government. He always does it well and with his heart in the right place and we hope that he will show both those qualities this evening.
My Lords, I have had the advantage of travelling in a hovercraft on only two occasions, once going to France and once coming back. I came away with two totally divergent opinions. On the first occasion it was a beautifully sunny day, the sea was calm, we whistled across the Channel and arrived in 35 minutes.
78
My heart swelled with pride and I thought how wonderful it was to see this superb British invention. On the way back it was a choppy day—not a rough day. The machine crashed into the troughs of the waves and then shot up, rather like a golf ball. It was a very frightening experience, and it reminded one of being in something which was a cross between a scenic railway and a high-speed lift. It was not only a disagreeable experience, but an extremely frightening one. We were all holding on to the bars in front with the whites of our knuckles showing, when all of a sudden a piece of the ceiling fell down, just for good measure. I can assure your Lordships that nobody was talking at all. All of a sudden a little boy piped up from the seat behind me, to break the verbal silence. There was a lack of mechanical silence but there was considerable verbal silence. The boy said in a succinct way, as only the innocence of youth, with youth's pristine clarity, could "Daddy, I don't like this." He voiced the thoughts of all of us.
Those were the early days of hovercraft travel, and that was just one occasion. Things have altered. That was on the route where the future for this initial stage of hovercraft commercial development will take place. Traffic between this country and the Continent is bound to increase, whatever results this wretched referendum produces. Now that the Channel Tunnel project has been abandoned, as the noble Lord, Lord Wynne-Jones, said, this must mean that all the traffic which would otherwise have gone through that tunnel in the future will now go either by air or by sea. It follows that there should be scope not only for more ships but also for more hovercraft. If one accepts that, there are two important points here. Not only is there now more scope for hovercraft to operate on the Channel routes and thereby enable more craft to be built, but—far more important—the industry will be given a chance to develop as an industry.
If the hovercraft principle has a place in the future, it has to develop somewhere. It must be given an opportunity to develop. It must be helped to develop. The opportunity for it to develop is given as a result of the abandoning of the Channel Tunnel. Whether it will be helped or

79
allowed to develop depends upon whether the cross-Channel operators will purchase, or be allowed to purchase, new craft. Here the tough commercial world of market forces comes into play. This I would not seek to eliminate, other than to stress that here lies what could be the seed-bed on which the industry, and the principle on which the industry is founded, can be allowed to develop.
Research and development going on at the moment indicates that future craft could operate at speeds of 55 to 60 knots, as opposed to speeds of 50 knots, which would require 40 per cent. less power. This in turn would mean a fuel consumption of 60 per cent. less than that used on current craft, and this would be a fuel consumption of 15 per cent. less than ship ferries. These are bright and exciting possibilities. If these possibilities are realised, who knows what effect there could be on overseas sales and methods of travel. It may be that it is pie in the sky, but I do not think so. Rather it is something we ought to encourage.
My guess is that there is a good place in the future for this industry and for the method of propulsion which it adopts. My fear is that if we do not get over the hump of what might be called the "post-prototype era ", that place will never become a reality. My guess is that the hovercraft business is fraught with financial anxieties. My hope is that those anxieties will prove to have been worth bearing, because we need the principle. But, my Lords, the industry needs nurturing.
7.0 p.m.
Lord BESWICK: My Lords, as the noble Earl, Lord Kinnoull, has reminded us, he has raised this subject before. If I may say so, he is more helpful each time he speaks about the hovercraft. I congratulate him on the way he raised the matter today and on the support that he has managed to assemble in the House. Despite world economic uncertainties the fact is that the outlook for this industry is better now than on the last occasion when the noble Earl raised the subject. The whole atmosphere appears to be improving since the days when the noble Earl, Lord Ferrers, was hit on the head by a falling ceiling and I hope that the young boy to whom he referred will
80
be now as eager a convert as my noble friend Lord Wynne-Jones. There is a much wider acceptance of a steadily increasing variety of hovercraft as a possible solution to particular transport problems or the use of the principle to solve difficult engineering problems.
This has not come about overnight and I pay tribute to the industry and, with respect, I would say to the noble Lord, Lord Selsdon, that he probably unintentionally underestimated the efforts made by the industry and, maybe, underestimates the efforts they can still make and I have no doubt will make. This technical lead can be maintained only by research and development, which leads me to the first part of the noble Earl's Question. In the current financial year support for the industry is expected to amount to £1·4 million. It is not possible to break this figure down into its constituent items as it includes military commitments.
Apart from military commitments, it includes funds provided by the National Research Development Corporation and by the Department of Industry under the Science and Technology Act, including payments under contracts under the special £2 million assistance made available in 1972 and under contracts that pre-date that time. When the £2 million special assistance was announced it was said that in future the industry would not receive special treatment, but for R and D purposes would be treated as any other industry. This left two channels of assistance open—the NRDC, whose assistance had been available previously, and the Ship and Marine Technology Requirements Board. Since the announcement of the special assistance there has been little interest shown by firms in taking advantage of these arrangements until recently. From recent comments quoted in the Press it would seem that there is some misunderstanding of the NRDC's role in providing assistance to the industry. It may be useful if I say a word about that.
It is part of NRDC's job to take risks; but it took courage in 1950 to back Sir Christopher Cockerell's invention, and I am glad that the noble Earl, Lord Kinnoull, paid tribute to the contribution made by the noble Earl, Lord Halsbury, managing director of the Corporation at that time. NRDC's subsidiary company,

81
Hovercraft Development Limited, usually known as HDL, is not only responsible for the worldwide licensing of important patents but it also provides to manufacturers and operators advice and other technical services from its office in Hythe. HDL is also the company through which NRDC normally channels its funds to industry in support of industry's own R and D projects. Typical of the projects assisted by NRDC is the recently announced development by Hovermarine Transport Limited of a 200-seater side-wall craft, designated HM5, to whose development costs the corporation has agreed to contribute about £500,000.
It is essentially a matter for the Corporation to decide which projects it supports, but I am pleased to say that NRDC seems to be in a healthy financial state—unlike many of us around here at the moment—and is prepared to consider the provision of financial assistance for development programmes in the hovercraft field. NRDC does not make grants, but will share with a company, usually on a fifty-fifty basis, the cost of developing a new product if, in the Corporation's opinion, there are reasonable prospects that the project will be a technical and commercial success. If the project is successful, NRDC will expect a financial return on its investment—and I hope that this is acceptable even within the philosophy of the noble Earl, Lord Ferrers.
The assistance of the character described by the noble Lord, Lord Selsdon, would seem to be somewhat different. It seems difficult to justify promotional activities, especially if for only a selected number of firms; but if there is an element of restructuring, if the company of whom he is thinking could put forward a scheme of merger or strengthening by coming together in some way, then there should be a possibility of assistance under Section 8 of the Industry Act and it might be possible for the noble Earl to recommend that something of that kind be more closely considered. I know that he has done a great deal already. Similarly about the EIB: if anyone puts a proposal to them or sees me and asks how to present such a proposal we should be glad to give assistance. Until there is something definite, I am afraid it is impossible to say that we support them.
82
I should also say that the Ship and Marine Technology Requirements Board are prepared to consider proposals for assistance towards research projects. I hope—and my feeling is that this particular Requirements Board also hopes—that some proposal will be made. The initiative must come from the companies concerned. Before leaving R and D, I would pay tribute to the companies who are using their own money to invest in the future. It will be clear from the description I gave of how NRDC works that Hovermarine Transport will be providing substantial funds for the development of the HM5. Similarly, I know that the British Hovercraft Corporation are working on developments with the objective of halving operating costs, which would be of tremendous benefit.
Several noble Lords referred to the cancellation of the Channel Tunnel. Obviously, this has been a most significant factor in the new situation. British Rail have gained a good deal of experience on their services although they are still not as reliable as British Rail would wish. However, they make an important contribution to carrying the cross-Channel traffic and with competitors, as the noble Earl has said, on some of the routes, they have about 30 per cent. of the passenger traffic. In the light of this situation British Rail are considering their requirements. The Board are re-examining the whole of their plans for re-investment in the Channel crossing. Hovercraft clearly have economic attractions because of their speed and effective capacity in a given day. The decision is one for British Rail, and preliminary assessment of their investment needs in this new situation shows considerable potential for hovercraft. The Department of the Environment have not yet received proposals from British Rail, but they and British Rail themselves are aware of the urgency of a decision if the craft are to be in operation by the summer of next year.
On the military side, the most important event is the Navy's investigations into the role of hovercraft as mine countermeasures craft. The Royal Navy's Hovercraft Trials Unit, which succeeded the old Inter-Services Hovercraft Unit, was commissioned at Lee-on-Solent on January 17th and its work will be directed towards this end. Any successful outcome of that could open up an important

83
market for the industry. As a number of noble Lords have said, exports have always provided a good market for the industry; and this continues to be the case. On the civil side, in the United Kingdom we have a well-established transport system, so that the introduction of hovercraft had particular difficulties in competition with existing facilities. But abroad there are much greater opportunities, as the noble Earl said, where existing competition is not so well organised, or where conditions are met in which the unique advantages of the hovercraft give it an edge.
Hovermarine Transport have been particularly successful in their marketing of their HM2 craft. I gather some 30 are operating in different countries. They now have craft operating in a number of countries overseas and have recently sold four to Hong Kong and another to Bolivia. The manufacturers of the smaller craft look mainly to overseas markets and here there have been some notable successes, although I understand the financial problems which face some of them and to which the noble Earl referred.
Whereas Hovermarine Transport have been successful on the civil side, the British Hovercraft Corporation have experienced more success with military craft and there are good prospects for them, particularly in the Middle East where they have already made good sales. Like the noble Earl, I offer my congratulations to them for their achievement in obtaining the Queen's Award for Industry.
The Earl of KINNOULL: My Lords, I should not like to mislead the House. I believe Hovermarine, although of British origin, is an American-owned company at the moment. That is a point which would demonstrate some of the efficiency of the American system of marketing abroad.
Lord BESWICK: My Lords, I am going on to say something else which might support that point of view. One important overseas contract that the British Hovercraft Corporation have won is that for development of the bow seal for the United States 2,000-ton surface effect ship development programme. It
84
was suggested by the noble Earl that the figures given in another place for exports were inaccurate. I do not think that is the case. They were possibly misleading, because they referred to civil exports and not total exports. I gather the military exports are listed under warships and do not appear in the export figures. That is the reason for the apparent discrepancies.
Before leaving the sales prospects, I wonder whether I may mention what was described as an intriguing side of the industry, and, in terms of potential, as important as the other; namely, industrial applications. It has been part of the education process that industry is at last becoming aware of the possibilities in the field of materials handling offered by the air cushion principle. These range, as the noble Earl said, from the small hoverpallets to large hoverplatforms and include perhaps the most remarkable of all—the movement of large oil storage tanks in one piece without the need to dismantle them. Air Cushion Equipment, the company which pioneered this method of moving tanks, have recently made a breakthrough in the United States where the potential is great. After successfully demonstrating the method, they have now gone into partnership with a large American company for the exploitation of the method in that country.
The main markets for the hoverplatforms appear to be overseas, where there is a need to work in an inhospitable terrain, to which the noble Earl referred, or where there are particularly difficult work or transport problems. Among their successes Mackley-Ace Limited have built two 750 ton air cushion transporters specifically for us in the Persian Gulf and have just obtained an important order for two transporters to be used on the Alaska pipeline. Hovertrailers International Limited have developed a range of air cushion vehicles capable of working on undeveloped ground such as marshes. These have been sold in a number of countries. The British Hovercraft Corporation in co-operation with the CEGB have developed a system for reducing the axle loading on transporters which makes a great contribution to reducing the expense of moving extremely heavy loads which in the past have required the strengthening of bridges and roads. I am told that over the past few

85
years this transporter has saved the Board £1,250,000.
I was asked by the noble Earl, Lord Kinnoull, about the position regarding the hoverbed. I find that the burns unit at Mount Vernon hospital, with its equipment which was partly financed by NRDC and by the Department of Health, was opened in February 1974. I believe that a second special burns unit is being commissioned this week at a Belfast hospital, and the company concerned have also received several inquiries from abroad.
To give wider publicity to the achievements of these companies and, it is hoped, to encourage other firms both at home and overseas to make use of the techniques they have to offer, the Department of Industry have commissioned a film produced by the Central Office of Information entitled, At Work on a Cushion of Air and I am told it is a good film. A film can be more persuasive than many of us in this Chamber, and maybe we might arrange for it to be shown in the Palace of Westminster if it is felt there will be a demand for that.
I was asked about the practical relationship of the Government with industry. In so far as Her Majesty's Government are an operator—mainly through the Royal Navy Hovercraft Trials Unit—there is close co-operation with the manufacturing companies. We know, too, that the manufacturers keep in close touch with the operators of their craft. A new development which promises well for the future is that the two cross-Channel hovercraft operators, Seaspeed and Hoverlloyd, are having discussions with the HDL to consider specifications for the successors to the SRN 4 series of hovercraft. The first meeting was held last week. This, I should have thought, was a hopeful sign; it is the operating companies who know what they want and if we get these two sides working together it should be a constructive, co-operative exercise.
It has been a long educative process, as the noble Lord, Lord Selsdon, said, in achieving this wider acceptance of hovercraft; and with this wider interest, as I said earlier, it is inevitable we shall get competition from abroad. I was asked by the noble Earl, Lord Kinnoull, about this. Potential competition comes mainly from developments in the United States
86
and in France. A vast amount of money is being spent in the United States on development of the 2,000-ton surface effect ship for the US Navy. We cannot hope to match the Americans in what they spend on defence, but although there is bound to be spin-off for any civil developments, the United States effort so far is still directed towards establishing whether the next step should be a 2,000-ton ship or something smaller. Most other American developments have been in the military field and at present there is no direct competition with our companies. We were given a warning by noble Lords opposite about French activity in this field, and we should not underrate the SEDAM N 500; but, at the same time, it would be a mistake at the present stage to think they have anything which is necessarily more successful economically than either a stretched hovercraft in use on the cross-Channel service or the new craft which is being considered. So far as Japanese competition is concerned, they produce craft under licence from this country, and Russia, which at one time was thought to be a great competitor, now gives first place to hydrofoils.
As to industrial applications, it is perhaps significant that the United States are seeking the assistance of our companies. I hope, although sometimes we think we give away too much, that this is a development which could he very promising. I agree with the noble Lord, Lord Selsdon, who modestly said that this industry was not a Selsdon lame duck, and I agree with other noble Lords that this is an industry to which we should give support. At the same time, I do not think it is necessarily the best way of giving support if we think simply in terms of grants and finance. I have said what the limitations are there; I have indicated the possibilities. I hope those possibilities will be utilised, and if there is anything more I can do to help—for instance, by bringing together various parties—then certainly I shall be very glad to do anything I am asked to do. In the meantime, I again congratulate the noble Earl for having brought this subject before us.

JAMES HUGH MAXWELL (NATURALISATION) BILL [H.L.]
Reported with amendments.
  HUNTINGDON RESEARCH CENTRE TESTS
  HUNTINGDON RESEARCH CENTRE TESTS
  MAZE PRISON: AREA PROPERTY VALUES
  MAZE PRISON: AREA PROPERTY VALUES
  ROYAL ULSTER CONSTABULARY: SERVICE AWARDS
  ROYAL ULSTER CONSTABULARY: SERVICE AWARDS