Sitting of 23 May 1975

Preamble
The House met at Eleven o'clock

MR. SPEAKER'S ABSENCE
The House being met, the Clerk at the Table informed the House of the unavoidable absence of Mr. SPEAKER.
Whereupon, Mr. GEORGE THOMAS, The CHAIRMAN OF WAYS AND MEANS, proceeded to the Table and, after Prayers, took the Chair as DEPUTY SPEAKER, pursuant to the Standing Order.

TEXTILES, CLOTHING AND FOOTWEAR
The Prime Minister (Mr. Harold Wilson): With permission, Mr. Deputy Speaker, I would like to make a statement, as I intimated yesterday, on the present situation in the textile, clothing and footwear industries. In view of the concern which has been expressed in all parts of the House, and outside it, I think it right to make a statement before the House adjourns.
The Government have been examining the situation which has developed in these industries in the context of the worst world recession since the 1930s which has hit with particular severity the textile industries of the developed and developing world alike. Indeed, other developed countries are even worse off than we are. The level of textile unemployment in the United States, in Germany, in Belgium, Ireland and Denmark is substantially higher than ours.
The United Kingdom is a party to the Multi-Fibre Arrangement under the aegis of GATT. Within the MFA, agreements are being progressively made with low-cost textile suppliers, mainly in developing countries. An arrangement with India has been initialled: negotiations with Hong Kong are well advanced; they have begun with Korea; and arrangements are being finalised for the imposition of restraints on Taiwan. These multilateral negotiations, while having regard to the
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interests of the less developed countries, will give the United Kingdom industry a more effective degree of protection than it has ever had before, and certainly more than can be achieved by unilateral protective action.
Wherever evidence can be produced of dumping, subsidised exports or other forms of unfair trading, Her Majesty's Government are ready and willing to take vigorous protective action on behalf of these industries; and other industries outside these.
After very careful examination of all the evidence, the Government have taken the view that the British Textile Confederation's proposals for unilateral action to provide an across-the-board cut of 20 per cent. would be inappropriate, ineffective and would lead to certain retaliation against the products of these and other industries.
The present problems facing these industries go deeper than the problems of import penetration. In fact, in nearly all the major textile sectors, the volume of imports in the first quarter of this year has not increased compared with the average over the first half of last year. It has fallen. The percentage of our home market represented by import penetration again has fallen.
We could not therefore justify, under our GATT obligations, a general cut in imports, apart, as I have said, from any cases of unfair competition we can identify in this or any other industries. We should be breaking the Multi-Fibre Arrangements which is of benefit to our industries and which the TUC Textiles, Clothing and Footwear Industries' Committee has described as the keystone of a long-term policy for achieving a stable pattern of trade and greater confidence in the industries.
It would also be totally contrary to the policy we advocated at the recent Commonwealth Heads of Government meeting and would be detrimental to our trade within the Commonwealth. Certainly it would be bound to lead to other countries applying similar measures against our trade, from which the industries we are trying to help would be among the first to suffer.
The Government have therefore decided upon direct action to help the industries, on which we shall now consult with

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all those concerned in the industries sector by sector. We have suffered enough in recent years through lack of industrial capacity lost during the recession period and through lack of investment and modernisation. We are determined to ensure that the world-wide recession in these industries, as in others, does not cause damage which would mean the loss of viable capacity which will be needed when the expected upturn comes in world markets.
Under the Industry Act we have powers appropriate to this objective. A scheme is already in operation under these powers to help the wool textile industry. The House will be aware that in the Budget speech on 15th April my right hon. Friend the Chancellor of the Exchequer said that he was setting aside £100 million particularly to assist industry to modernise. We shall not hesitate to draw on this provision or to use the other powers available to the Government to help these industries to maintain their ability to produce and provide the maximum possible level of employment.
I am making this statement today before the House adjourns in view of the anxiety in these industries. The urgent work and consultations necessary to achieve the Government's objective, which have already started, will continue while the House is in recess. Should it be possible to make a further announcement before the House returns, I am sure hon. Members would agree that it should be made in the recess. The House will, of course, be fully informed on progress in all these matters when Parliament resumes.
Mr. Heseltine: I know that the Prime Minister will understand when I ask him whether it would have been possible for the Opposition to have rather longer than 10 minutes' notice of this statement, which gives very little time to read it and to reach a judgment on it before having to comment on it. I think that on first reading the conclusion of the House will be that there is a degree of vagueness and lack of precision about these proposals which will be of concern to the workers and management in the industry.
Mrs. Elaine Kellett-Bowman: It is outrageous.
Mr. Heseltine: What progress is being made with our EEC partners towards acceptance of the Multi-Fibre Arrangement under GATT? May I ask the right hon. Gentleman whether the Government are carrying out investigations into dumping and particularly whether they have been able to reach conclusions on the widespread charges of dumping of footwear, for example, from the COMECON countries?
Finally, which Department will be responsible for conducting the negotiations with the industry? If it is to be the Department of Industry—and we are sorry that the Secretary of State for Industry was not here to make the statement for his Department—will the condition, often referred to by the Secretary of State for Industry, apply that where aid flows from public funds, ownership of industry must be a necessary condition attaching, to that aid?
The Prime Minister: I regret the short notice of the statement. It was necessary to keep on amending it almost to the last minute as further facts became available on, for example, the arrangements being made under the Multi-Fibre Arrangement. As the hon. Gentleman knows, this sort of thing happens under successive Governments. As Leader of the Opposition, I sometimes suffered from the late arrival of statements.
The hon. Gentleman wanted to know exactly what we had in mind. He seemed to think that there was some vagueness and lack of precision about the proposals. The Industry Act gives us power to help with re-equipping and modernisation on the lines of the scheme already in hand in wool textiles. The Clothing EDC has put to the Department of Industry comprehensive proposals for aid under Section 8 of the Industry Act.
Because it is important in maintaining production at the highest possible level, we want to give encouragement for a scheme of stock holding and stock building. This is one of the matters which we are examining. It can make a big difference to the liquidity of the industry and the maintenance of employment. Since this recession, as with so many other textile recessions, is very much concerned with violent fluctuations, not to mention speculation in raw material prices, it is of great advantage to be holding stock when

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raw material prices change again and demand revives. We are reviewing urgently the possibility of Government purchasing policy in this field, but we shall want to discuss all these possibilities in our consultations with each sector of the industry.
Nothing I have proposed this morning and nothing we have in mind transgresses the EEC Multi-Fibre Arrangement or will cause difficulties with the EEC countries, most of which are involved in the Multi-Fibre Arrangement.
With regard to imports into this country and unfair practices, we examine all evidence and, quite apart from this sector, we are making a deep investigation here and in the home country in relation to the import of cars and colour television tubes from Japan.
The hon. Gentleman mentioned the question of footwear from Eastern Europe. There will be a statement today, I think—it will be made very soon, anyway; there is a Question down on this matter—which will inform the House that, following discussions with Czechoslovakia, Poland and Romania, their exports of men's leather footwear to Britain this year are to be cut very considerably. The details will be given in the Written Answer.
With regard to the responsibility of Departments, I have made the statement because its subject matter cuts across a considerable number of Departments—Trade, Industry and others. My right hon. Friend the Chancellor of the Duchy of Lancaster has been taking charge of the co-ordination of Departments and the investigation of this matter, and what I have announced is the result of his report to me. My right hon. Friend will also be exercising very close supervision of this matter as between the Departments and in the consultations with the industries.
Finally, I have said that the aid which is proposed—the action to be taken—will take a number of forms, but we do not envisage a long-term involvement with these industries. They are facing a serious problem. They need assistance of the kinds I have described, possibly other kinds, too, but we do not regard this as providing permanent capital for the industry. In those circumstances, the question does not arise.
Mr. James Lamond: I regret to say that almost the only thing about the announcement that I can welcome is that it is an indication that the Government are showing some concern about this matter. My right hon. Friend has completely misunderstood the representations of the British Textile Confederation which suggested across-the-board import restrictions, on the basis of a short-term policy, which were needed immediately because of the very grave depression in the industry. To dismiss the suggestion as my right hon. Friend has done is wrong. I think that he should have accepted it in the way that Canada, New Zealand, Australia and the United States have imposed tariff restrictions to give immediate assistance to their industries.
If my right hon. Friend is saying that he is embarking on what must be a fairly lengthy and complicated process of negotiating with the industry with a view to stocking to assist the industry, I do not think that this will have any immediate effect. I believe that in the long term it will be damaging—
Mr. Deputy Speaker: Order. I am sorry to interrupt the hon. Gentleman, but many Members wish to ask questions and Adjournment debates are to follow.
Mr. Lamond: I apologise, Mr. Deputy Speaker.
I ask my right hon. Friend to take into account the need for immediate action which his statement today does not promise.
The Prime Minister: When my hon. Friend has thought further about the matter, I am sure that he will not support the 20 per cent. across-the-board cut, including less-developed countries. I believe that that would be a wrong decision totally against the philosophy of all parties, and against the spirit of the communiqué on the Commonwealth Prime Ministers' Conference in Jamaica, and would lead to very severe retaliation by a large number of countries against our own textile, clothing and footwear industries and other industries and exports.
Secondly, I must inform my hon. Friend—and if he wants to pursue this matter in correspondence or in some other way I shall be happy to give him the evidence—that what he suggests would break international agreements. It would

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be contrary to GATT and to the Multi-Fibre Arrangement, from which we derive great benefit, and we should lose other advantages. I referred to the various restraint agreements with some countries, even developing countries, organised under the aegis of the Multi-Fibre Arrangement.
The international rules 'governing the imposition of import restrictions—there is no problem where we can prove dumping or unfair trade—specifically prohibit any member country from introducing import restrictions in a year when imports have not risen compared with the previous year. In many of the sectors to which I have referred imports in 1974 rose compared with 1973. The import penetration percentage rose compared with 1973. In the first quarter of this year, for most of those sectors, imports have fallen in absolute terms and also in the degree of import penetration.
Therefore, under my hon. Friend's suggestion we should be breaking our international obligations, and these industries would be among the first to suffer from any consequences of that breach.
Mr. Molyneaux: Is the Prime Minister aware that in Northern Ireland there will be a welcome for his assurance that action will be taken where there is clear evidence of dumping? Will the right hon. Gentleman bear in mind the problems created by the fall in the value of the pound as they affect the cost of raw materials for the man-made fibres industry, which forms a very large part of the textile industry in Northern Ireland?
The Prime Minister: Yes, Sir. I confirm that, as the hon. Gentleman has deduced, Northern Ireland will be fully included in the scheme. As for the cost of raw materials, affected as they must be by changes in foreign exchange value, what has happened is that over the past year the price of textile fibres generally has fallen by about one-third. This means that, as always happens in every textile recession, anyone holding stocks at various stages of the distributive chain gets right out of stocks and throws the whole burden back on to the producing unit—on to the mill or factory and, therefore, on to employment. That is the problem which we are trying to tackle by various means, especially by helping at the factory itself.
Mr. Cryer: Would my right hon. Friend accept that this statement is extremely disappointing to those of us who have been pressing for some sort of control? Would he accept that import controls would have been possible under the Multi-Fibre Arrangement, because Article 19 of GATT overrides that agreement?
Will my right hon. Friend explain to the House what evidence there is of possible retaliatory measures to import controls? Does he not accept that 40 per cent. of our imports are from EEC countries, anyhow? He said that, if evidence is given of dumping, vigorous protective action will be taken. Can he say what has happened to the application for antidumping measures by the West Riding Federation of Worsted Spinners which was made in November and which disappeared to the EEC? Does he agree that the EEC Commissioners have been considering anti-dumping measures for the past two years? Cannot the Government take independent action and impose import controls in the near future?
The Prime Minister: The last matter is being investigated. It takes quite a time to reach agreement. I know from my experience in these matters that to find evidence it is necessary to look not only at the prices charged here but also at what is being done in the supplying countries. The EEC is considering antidumping measures, and we are considering them separately ourselves. If we wish to take action, there is nothing to stop us from taking action about any kind of unfair trading.
On the other issues which have been mentioned, there are two relevant provisions of GATT. Both of them must be taken together. We are satisfied that we should be in breach of our international obligations and that retaliation would set in. My hon. Friend has asked where it would set in and what evidence there is of it. One has to commit the breach before one gets the retaliation. Already it is clear to us that Turkey is one country which would take retaliatory action against us if we were to take the action which is called for.
Mr. Fletcher-Cooke: The only positive part of the Prime Minister's statement was devoted to steps to modernise the textile industry.
Mrs. Kellett-Bowman: It is already modern.
Mr. Fletcher-Cooke: As my hon. Friend says, that is not the problem. Surely the Prime Minister recognises that the textile industry is thoroughly modernised already. What it requires is a free and fair opportunity to sell its products. It is not getting such an opportunity either domestically or abroad at present. Is the Prime Minister aware that nothing in his statement gives the industry any hope that it will have that opportunity either in the near or the more distant future?
The Prime Minister: I do not accept what the hon. and learned Gentleman has said, though I accept his opening premise. Compared with 20 or even 10 years ago, the industry has advanced to a very high degree of modernisation. What causes concern to all of us is the fact that the more modernised an industry is, the greater the loss through working at a relatively low level of capacity with the higher overheads and the high capital costs in a capital-intensive industry. The more modernised an industry is, obviously the higher the level of capacity it has.
I have made it clear that this is not only help with modernisation. All parts of the industry are not fully modernised. Some of them can be assisted, and want to be assisted, with help in particular technologies, and so on. This is immediately relevant to the problem identified by the hon. and learned Gentleman, that of wanting to be able to continue production at a higher level in relation to capacity. That is why our proposals for helping with the financing of stocks are so important.
Mr. Noble: Will my right hon. Friend accept that we welcome the fact that he himself has become involved in seeking to solve the problems of the textile industry but that we find it disappointing that his statement this morning does not measure up to the opening paragraph of a document he produced entitled "A Plan for Cotton", in which he said that there had been enough investigation of the textile industry and that the time had come to bring about a secure future for Lancashire cotton in the modern world?
Will my right hon. Friend give a clear and categorical statement this morning
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that the Government accept entirely the need for a fully viable cotton textile industry and, should the situation arise, will be prepared to introduce import controls in the near future? Will he also clarify that part of his statement dealing with stock holding in terms of the number of jobs he thinks it will protect in circumstances where 55,000 people are on or have had short time this year?
Given the fact that the footwear industry is in a very similar position, would my right hon. Friend consider extending aid to that industry to help with stock holding?
The Prime Minister: On the last point, yes. I hope that my statement was clear. If it was not, I take this opportunity of clarifying it. I was referring to the textile, clothing and footwear industries in my statement, and what I have said about help of various kinds will undoubtedly include the footwear industry.
My hon. Friend referred to a document entitled "A Plan for Cotton" that I produced for the United Kingdom Textile Factory Workers Association. That was in 1957. What was said in that document was relevant in that situation. Indeed, much of it is relevant to today's situation. Since that time we have seen the very high degree of modernisation which has been referred to by hon. Members. The proposals in that document, when I set out the conditions under which there should be import restrictions, were the proposals for modernisation. The then Government in 1959—by coincidence, on the very eve of the announcement of the 1959 election—came forward with a very big plan for cotton, thus responding to what we were pressing for, with a £30 million spending programme to modernise the cotton industry.
We have come forward with these proposals. There is no figure that I can propose as yet, because we have to work out with the industries what their needs are, particularly in regard to stock holding and the building up of stocks as well as existing stocks.
My hon. Friend said, as others have said, that we should introduce import controls. I am disappointed to hear this emphasis on action which we could not justify in the situation, particularly as regards developing countries. If we were to discriminate in favour of developing

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countries—we have considered applying such action to developed countries and not to developing countries—the developing countries would take advantage of it and fill the gap, and the problem for Lancashire would be just the same.
Mrs. Kellett-Bowman: Does the Prime Minister accept that this statement will be received in my constituency with incredulity and dismay? We had hoped when we heard his words yesterday in response to a question that I put to him, that we would hear something positive today. People in my constituency will find it almost unbelievable that the Prime Minister can say that the Government will now consult sector by sector and work out what the needs of the industry are. We have been telling him what the needs of the industry are for the past six months and more.
The Prime Minister appears at least to accept the need for liquidity for the industry. If that is the case, may I beg him yet again to supply some liquidity to my area and the other intermediate areas of Lancaster by giving it the regional employment premium? For one of my firms alone this would mean help to the extent of £6,000 a week. This would be a life line which is desperately needed. As I said yesterday, our male unemployment is double that for the same month last year—
Mr. Deputy Speaker: Order.
Mrs. Kellett-Bowman: As is our female unemployment.
Mr. Deputy Speaker: Order.
Mrs. Kellett-Bowman: And unemployment is double the national average.
Mr. Deputy Speaker: Order. I think that is enough.
Mrs. Kellett-Bowman: On a point ot order, Mr. Deputy Speaker. I have now sat down permanently.
The Prime Minister: I accept from the hon. Lady—indeed, it is my own knowledge—that in her area, which is not a development area, there has been a very serious increase in unemployment, both male and female, in this and other industries. I do not accept, however, having regard to her opening words, that my statement will be received in the manner she suggested. I do not know
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why she expected that I would announce import restrictions today—
Mrs. Kellett-Bowman: Not today, now
The Prime Minister: I made clear yesterday that it would not involve import restrictions. I hope the hon. Lady is not pressing that point.
We shall look into the question of liquidity, but it is not a matter of the regional employment premium. Certainly her area will be fully covered by the scheme, and my right hon. Friend will look into the best means, in the hon. Lady's area and in others, of providing the immediate help which is required.
Mr. Edward Lyons: Since my right hon. Friend's statement seems to indicate a rejection of import controls in favour of a stock holding scheme, could my right hon. Friend say, first, whether the stocks to be bought will be existing stocks or stocks to be manufactured in the future? Secondly, will be say how much money the Government are thinking of putting into the scheme of stock holding and who will decide which stocks should be held by the use of Government money? Thirdly, when does he think the scheme will be implemented? The scheme is one to inject money into the textile industry, and it is important that any such scheme should come into existence as soon as possible.
The Prime Minister: I accept the urgency to which my hon. Friend has referred. As to how much money is involved, that depends on the need. As the need is identified we shall do what is necessary.
With regard to liquidity, there are different ways of financing the holding of stocks—advancing money against them, and I have referred to the possibility of Government purchasing. We want to do that which is quickest and that which provides the most immediate help. My right hon. Friends have already started on the problem, and I hope that they will be able to identify the means which will most readily and speedily give the help which is needed for maintaining production. What we are concerned with is the maintenance of production and employment, keeping vital productive capacity intact and meeting what we are all certain will be the need before very long.

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I have pointed out that despite the very serious position of our own textile industry resulting from the world recession, other industries, particularly in Western Europe, have far higher textile unemployment. We are dealing with it by this method of direct assistance.
In answer to my hon. Friend the Member for Rossendale (Mr. Noble), whom I did not answer fully, we accept the objective of a fully viable continuing prosperous textile industry in all the sectors that I have mentioned, and action will be taken to that end.
Mr. Freud: Twelve months ago the Department of Industry was advised of an increase in imports from Eastern Europe. I should like to say, on behalf of my party and particularly on behalf of my hon. and voluminous Friend the Member for Rochdale (Mr. Smith), that he would dearly like to have had more than 10 minutes' notice so that he could have been here to hear the Prime Minister's statement. In my hon. Friend's absence, I should like to know to what extent the falling value of sterling has exacerbated this crisis. Secondly, while the Prime Minister has the support of the Liberal Party in the continuation of quota controls, may I ask him what is now his prognosis of the employment prospects in the Lancashire textile industry?
The Prime Minister: I am obliged to the hon. Gentleman. I think there has been some misunderstanding about the 10 minutes. The 10 minutes was the period which hon. Gentlemen opposite had in which to read the somewhat lengthy statement, and I have expressed my regret for that. I cannot imagine that if the statement had been issued 20 minutes earlier it would have enabled the Liberal Party Chief Whip to read it, as he is obviously not here. The House had notice yesterday afternoon that I would be making this statement this morning. Probably the Liberal Party Chief Whip's new duties have confused him a bit.
I am grateful to the hon. Member for Isle of Ely (Mr. Freud) for what he said about import controls. He was right to say that. He asked about the changes in the day-to-day parity in sterling. In fact, while this always has some effect on our purchasing prices and our selling prices, it is difficult to quantify that
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effect, particularly in the short term. In fact, the recent change in the sterling parity on the market over the last fortnight has had no real effect at all on this situation. It was last year, when sterling was at a somewhat different rate in relation to the dollar and other currencies, that the maximum impact was felt. Last year imports were coming in on a major scale, while this year imports have been coming in at a lower rate and with a lower degree of import penetration.
Mr. Fairgrieve: Does the right hon. Gentleman appreciate that while the textile industry in Scotland will accept his statement so far as it goes, more back up is needed to give it flesh and blood? For example, the Scottish woollen textile industry exports more than 50 per cent. of its products, and of those exports more than 50 per cent. go to members of the European Economic Community. An industry which stands on its own feet is not prone to exaggerate. The Chairman of the Scottish Woollen Manufacturers Association has said that if Britain comes out of Europe, it will put nails in our coffin. Does the Prime Minister appreciate the vital need of the Scottish woollen textile industry that this country—Britain and Scotland—should remain in Europe?
The Prime Minister: Without going into a matter which is being much argued in the country at the moment, it is a fact that the leader of the woollen textile industry south of the Border made a statement not quite in the same words but conveying the same general message. My right hon. Friend the Secretary of State for Scotland and I have the problem very much in mind, concerning not only wool but other textile industries, and particularly knitwear, light clothing and so on. Not only has my right hon. Friend the Secretary of State for Scotland been urging these problems on his colleagues but when we—three or four of us—were in Scotland to meet the Scottish TUC, that body urged on us the urgency of the situation in the light clothing industry in the border areas—
The Secretary of State for Scotland (Mr. William Ross): And Glasgow.
The Prime Minister:—and Glasgow as well.
Mr. SkinnerDoes my right hon. Friend accept that to some of us who listened to him yesterday speaking about the various consultations which were taking place, his statement represents a severe disappointment? Is he aware that the refusal to introduce some sort of selective import controls or quotas is part of the Common Market Commission's refusal to have nothing at all to do with it? The referendum prospect, therefore, has something to do with it as well.
Will the Prime Minister clarify a matter which affects the House itself and say why the Chancellor of the Duchy of Lancaster is to be the overall man in charge of this operation, and whether we shall have a repeat performance of a similar situation which arose when the Chancellor of the Duchy of Lancaster was put in charge of oil Questions and thereby prevented hon. Members in all quarters of the House from putting down Questions and receiving replies? Will that happen in respect of textile Questions?
The Prime Minister: My hon. Friend's questions are getting a little wide of the subject. Nevertheless I will try to answer them. I recall the questions about my right hon. Friend the Chancellor of the Duchy not answering Questions and the point made by my hon Friend—and, of course, his point was accepted.
Mr. Skinner: It was not.
The Prime Minister: In this case the position is quite clear. Questions will be put down to the departmental Ministers concerned respectively—Industry or Trade—relating to the different problems. The fact that my hon. Friend is quite wrong in trying to find a Common Market attribution of causality here will not prevent—
Mr. Skinner: Of course.
The Prime Minister: My hon. Friend is less likely to be wrong if he will listen sometimes—
Mr. Skinner: I have got my eyes open.
The Prime Minister:—with his ears open, his eyes open, and his mouth possibly closed. Of course, the fact that my hon. Friend is wrong on this will not stop him from making such statements outside. I know that.
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My hon. Friend expressed disappointment about import quotas. Perhaps he will allow me, with equal courtesy, to express my disappointment that he and some of those closely associated with him seem so anxious to go down the line on restrictions on imports from developing countries, which I would have thought was a complete reversal of what he and so many of us have said in the past about the developing countries.
If my hon. Friend and those others would like to go back to the foundation document "One Way Only", of a certain group with which he is connected, they will find there a very different philosophy. It was set out by three former Ministers of the Attlee Government, of whom I was one. I am sorry indeed if my hon. Friend is changing his view on the fundamental issue of policy and world philosophy contained in that document.
Several hon. Members rose—
Mr. Deputy Speaker (Mr. George Thomas): Order. There are just three hon. Members with constituency interests waiting to be called. I hope that they will make their questions very brief so that we can begin the Adjournment debates by a quarter to twelve.
Mr. Robert Boscawen: Will the Prime Minister accept that the severity of the recession in the footwear industry, which affects the South-West of England very severely at present, is in no way due to any shortcomings of the industry itself, either in investment, labour relations or efficiency? Will he also accept that it is due, to some large extent, to the import of cheap shoes at below the cost of the raw materials in them from Comecon countries, despite the agreements with them, which has been going on since the first quarter of last year? Nothing has yet been done about it. Will he make a further statement as soon as possible?
The Prime Minister: I fully accept what the hon. Gentleman has said about the industry and its record and the fact that it is not responsible for the problems it is facing in common with footwear industries in other parts of the world. This is a world recession and the hon. Gentleman will have heard what I said about restrictions on Comecon imports.
The problem is that the footwear industry, like the textile and clothing

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industries, has been hit in its export sales, as well as in the greater virulence of imports, by the world recession. I note what the hon. Gentleman said about dumping. I have often tried to make inquiries about dumping over the years. It is very difficult to prove. We should like evidence of the extent to which some countries charge a lot more for their raw materials than for their manufactures—and I do not mean the Comecon countries in the main. Such a situation makes it difficult for our industry to be competitive. Anything we can do to help in that situation if proof is forthcoming, we shall do. In effect, the problem is not dumping but the reverse of dumping.
Mr. Madden: Is my right hon. Friend aware that there will be considerable doubt in the textile industry whether his statement will redress the crisis which exists? When will the statement be reviewed? Can he confirm that the discussions he has announced will include representatives of both employers and employees? Is he prepared to make special arrangements for the textile industry to overcome redundancies and the short-time working which exist in it today?
The Prime Minister: We shall have discussions with both sides of the industry and with distributors and anyone else who may be affected. I have told the House that if there is anything to announce, I trust that the House would not object if a statement were made during the recess. That would be followed, of course, by a statement on the Floor of the House after the recess. I also envisage that, as action begins, it will be announced progressively and that we shall not wait until the whole plan is in operation. There may be an announcement before the House comes back after the recess.
Mr. Nicholas Winterton: Whilst the whole House welcomes the timing of the announcement because of the deep concern in the industry, the Prime Minister's proposals are very disappointing. Hon. Members on both sides of the House feel that his rejection of the BTC's proposals is unjustified. It would seem that the Government have not perhaps given sufficient consideration to them.
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Is the Prime Minister aware of the extent of the import penetration of the British textile market, which is far higher than in other countries? Is he prepared to urge a speeding up of the renegotiations under the GATT? Will he give further details of the stock-holding assistance he has announced?
The Prime Minister: I cannot accept the hon. Gentleman's statement that import penetration is much higher in Great Britain than in other countries. In three comparable countries, for example—Germany, Belgium and the Netherlands—the penetration is considerably higher. But these figures must always be taken with reserve, as the situation is changing. The import penetration has fallen.
We considered the BTC's proposals very carefully, which was one of the reasons why we took so long in reaching our conclusions. We knew of the strong demand for dealing with imports. But we concluded, because of the reasons I have mentioned and the problems of retaliation, that we would be wrong to impose import restrictions. It was perhaps for that reason mainly that we took longer to make our proposals than we would have done otherwise.
The hon. Gentleman is mis-stating the position if he does not accept that this world-wide recession affects our exports as well as bringing additional imports. The problem arises from world depression, and we do not want to add to it by starting a round of import restrictions. The matter is not to do with the general argument about the management of the economy or about protectionism. We believe that the best way is to give direct help to the industry to enable it to be ready when the upturn comes and in the meantime to maintain its capacity and employment.
Mr. Cryer: On a point of order, Mr. Deputy Speaker. Following the announcement by the Prime Minister, will it now be required that Questions relating to textiles should be addressed to my right hon. Friend the Chancellor of the Duchy of Lancaster rather than to the Departments of Trade and Industry?
Mr. Deputy Speaker: Order. The hon. Gentleman is taking up the time of other hon. Members. His question has already been dealt with by the Prime Minister.
The Prime Minister: Further to that point of order—if it is indeed a matter for you, Mr. Deputy Speaker. I have already told the House that further Questions on the textile industry should be put to my right hon. Friends the Secretaries of State for Trade and Industry, depending on the particular nature of the Question. They will be answering Questions. My right hon. Friend the Chancellor of the Duchy of Lancaster, who has great knowledge of the textile industry, in which a very large number of his constituents work, will be helping to co-ordinate the work, but Ministerial responsibility is clearly in the Departments of Trade and Industry and Questions should be put accordingly.

STATUTORY INSTRUMENTS
Ordered,
That the Duncan of Jordanstone College of Art Scheme 1975 be referred to a Standing Committee on Statutory Instruments.
That the Dundee College of Technology Scheme 1975 be referred to a Standing Committee on Statutory Instruments.—[Mr. Pavitt.]

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

NATIONALISED INDUSTRIES
11.49 a.m.
Mr. Deputy Speaker: I suggest that we allow a half hour for this debate, since Mr. Speaker had allowed for its conclusion at 12.15 p.m.
Mr. Arthur Palmer: I am obliged, Mr. Deputy Speaker. I wish to raise, in a relatively calm atmosphere, an extremely topical subject—the relationship of Ministers to nationalised industries and especially, perhaps, to their chairmen. The issue has been brought to the boil by recent events, but it has been simmering for quite a long time. Indeed, a voluminous report produced by the Select Committee on Nationalised Industries for 1967–68 went into the topic in some detail. Words were used in part of this enormous report which today appear very topical. It says, in paragraph 874,
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"this lack of clarity about purposes and responsibilities has revealed itself in a lack of understanding and in some cases, a breakdown of mutual confidence between Boards and Ministries."
It goes on in the next paragraph to say:
"Lying still deeper than this lack of clarity, this confusion of responsibilities and this breakdown of confidence remains a failure to understand and to work towards the fulfilment of the basic purposes of Ministerial control in respect of the industries."
So this is, in a sense, not a new topic, though, as I say, it has been brought to the boil by recent events. The more that industries and services are nationalised, the more urgent and difficult becomes the definition of the relationship not only between the nationalised industries and the sponsoring Ministers but between the socialised economy as a whole and the formal institutions of parliamentary democracy. The House of Commons, I suppose, evolved originally, in the words of the old song, to
"pass laws and put down crime".
It can, I believe, cope reasonably well with three or four nationalised industries, as there were in the 1930s, and with eight or so nationalised industries as existed in the 1940s. But once the number moves into double figures and beyond, many complications arise.
No doubt the NEB is intended, in part, at any rate, to get over this difficulty, as was the Morrisonian public corporation in an earlier time. Nevertheless, all experience shows that when there is a freely-elected parliament responsible for public funds and investment, Ministers cannot be insulated from the inquiries and the natural curiosity of Members of Parliament about the nationalised industries. In turn, of course, the chairmen of the boards of nationalised enterprises cannot be insulated from the intervention of Ministers.
Parliamentary questioning has been theoretically restrained by the "day-to-day running" provision in statutes, but parliamentary pressure has broken that down in part by the setting up of Select Committees—I think quite properly—by Adjournment debates such as this, and by the subtle and clever way in which hon. Members have succeeded in phrasing Questions to Ministers. Such Questions have succeeded in getting past the Table. The real problem is that what nationalised

1823
chairmen regard as an internal management question, to be discussed with the trade unions, the Government, with Parliament to answer to, regard as a matter of vital public interest.
An example of this has been the redundancy threat to staff in some nationalised industries which has occurred recently. It is a question which obviously goes much further than the industry itself. It becomes a social matter which comes on to the Floor of the House. As a fairly recent example of that, my right hon. Friend the Secretary of State for Energy was faced with a request from the electricity boards to raise off peak prices to an economic level and thus to escape from the unwanted dependence on public subsidies which, curiously and quaintly enough, were introduced by a Conservative Minister who had been formerly Director General of the CBI. I am sure that in those circumstances my right hon. Friend would have preferred to leave this matter to the Electricity Council, but such were the charges of broken faith showered on him from both sides of the House that he beat a rapid retreat and asked the Electricity Council to stay its hand, which it did for the time being.
Of course, in pure Morrisonian principle—and a statutory public corporation is a considerable monument to that great parliamentarian Mr. Herbert Morrison—the Electricity Council should have stood its ground and asked for ministerial direction or, at any rate, formal exercise of ministerial powers under the emergency fuel and power legislation, but it did not.
Another recent example was the bizarre case of the defiant steelman. Here my right hon. Friend the Secretary of State for Industry achieved the remarkable feat of appearing on both sides of the fence at the same time. But by standing perfectly still—and I was told as a child that that was in the best tradition of unarmed travellers when faced with ferocious lions—I suspect that Sir Monty Finniston, the steelworkers' union and the British steel industry came out of their ordeal fairly well. In the event the lion went away. Once again, however, the Morrisonian balance between day-to-day responsibility of the board and the reserve power of the Minister to give a direction
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in the national interest was not in evidence.
I seriously put to the Government that this situation should not be allowed to continue. The Government should not wait for a club of board chairmen to tell them what to do, even when that club is led by a former Minister. If the nationalised industry statutes do not correspond to present custom and practice they should be amended accordingly. After all, 25 years have passed since some of these industries were nationalised. Governments today intervene in the affairs of industry, including private industry, in a way which would not have been accepted 25 years ago, not only in the United Kingdom but in all the advanced industrial societies, including our partners in the EEC. The Brussels Commission is very good itself at intervention.
For myself, although I know that it was recommended by the Select Committee when it reported in this vast volume in 1967–68, I do not believe in a Minister for nationalised industries. Industry remains industry, whoever owns it or controls it. There is a much more natural affinity between, for example, the nationalised electricity supply industry and the privately-owned oil industry than there is between the Post Office Corporation and the waterways board. Therefore, I suggest that if we keep the normal responsibilities of the sponsoring departmental Ministers, new demarcation lines should be drawn up between the powers of the Ministers answerable to the House and the responsibilities of the relevant nationalised boards towards their consumers and employees.
I would divide the present nationalised enterprises into two broad groups, although there might be an argument about the group into which a particular nationalised industry should fall. The first group would include those industries or public services which are utilities in a broad sense, such as electricity, gas, water, the Post Office, the railways and buses. That would be a fairly comprehensive group of industries falling under the description of public services and utilities. The second group would include all industries proper, such as coal, steel and the airways. Some hon. Members may argue that airways should come into the first group, but nevertheless they

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are an international industry and have to compete internationally.
In my judgment it would be possible, under this kind of arrangement, for the demarcation line between ministerial powers and the boards' powers to be drawn differently for the two groups. Of necessity, subsidisation would have to be permitted, in certain circumstances, especially for the first group, which includes railways, but where there is subsidisation it is essential that the line should be distinctly and clearly drawn between that part of the industry's business which is subsidised for social or political reasons and that part which is commercial.
I have made several assumptions. I assume that once we get this country through the present inflation we must return to an agreed return on capital assets commercially used, as was argued by the Select Committee on Nationalised Industries some years ago and adopted. For quite a period that system worked remarkably well, and provided commercial guidelines by which to judge the performance of the industry in question.
I also assume that a mixed economy means a market economy. I have never taken the view that there was anything inconsistent about having Socialist enterprises operating in a market economy. This is a view that is increasingly being taken by the Marxist economists of some of the Communist countries, for instance, Hungary, and certainly Yugoslavia.
My third assumption is that there should be in these industries the rate for the job for all employees, including the board chairmen. I declare my interest because my union, the Electrical Power Engineers' Association, which negotiates the salaries of managerial and technical staff in the electricity supply industry, is at present engaged in delicate discussions with the Electricity Council about a pay claim. I shall not say anything about that; it would be inappropriate to do so. Nor shall I go into what should be the proper social or moral level of reward in industry for those who hold the top management responsibilities. I do not know whether a leading executive should be paid £20,000, £10,000 or £70,000 a year. However, I am certain that there should be no discrimination whatsoever between the agreed rate for the job in a
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publicly-owned industry and the rate for the same job in a privately-owned industry in a mixed economy.
The Government were completely wrong in not applying the principles of the Boyle Report to the salaries of nationalised industries' chairmen and members of nationalised boards. The principles were applied to higher civil servants and to senior officers in the Armed Forces—generals, admirals and air marshals. Their salaries were adjusted as were judges' salaries. But it was decided for the time being not to adjust the top range of salaries in the nationalised industries. I do not understand why fish was made of one and fowl was made of another. Judges are necessary, and under some circumstances I suppose that generals and admirals can claim to be necessary. We have a vast Civil Service, and someone must be at the top. But when all is said and done all the occupations that I have just mentioned are secondary to occupations which are productive, in that they are closely connected with the efficient running of industry and wealth production.
This matter has caused concern to my union, as I am sure it has to other unions in the nationalised industries. The General Secretary of the Electrical Power Engineers' Association, Mr. John Lyons, wrote a letter to my right hon. Friend the Prime Minister about the matter. In his reply my right hon. Friend stated:
"I said quite explicitly that the Government rejects the doctrine of discrimination against the public sector".
We should be glad to hear that, but certainly there has been a postponement. This postponement of a proper adjustment, as laid down by the Boyle Committee—which has looked into this matter in which hon. Members have also an interest—has had a most depressing effect on the morale of staff in nationalised industries. This has not been caused because the staff in those industries are not anxious to make sacrifices on behalf of the country. Of course they are, but they believe that such sacrifices should be made on a fair basis and should apply to everyone. We should not, just because it is convenient to do so, and because Ministers have great control over nationalised industries, make fish of one and fowl of another, as I said just now. This kind of discrimination rankles.

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I realise that the time which had been allotted earlier for this debate has now been shortened by the questions raised on the Prime Minister's statement on the textile industry. Therefore, I shall put forward just one final observation.
I have been for all my parliamentary life an advocate of nationalisation and a defender—if critical at times—of the nationalised industries. I believe that the nationalised industries have rendered a fine service to the country. They have given a secure basis and an anchor to the economy, for which we should be glad. They deserve respect, and they deserve understanding. Those who manage these industries should be left to do their job without too much fussy interference. If interference or intervention is necessary because of the political responsibilities of Ministers to this House and to the country, the areas for legitimate intervention should be clearly separated from those which remain under the direct everyday responsibility of the chairmen and the members of the boards. There is no time in which to discuss consultation with the unions, important as it is. That is a vast, separate issue.
In short, I believe that the Labour Party, which has advocated and introduced the principle of nationalisation for good social and industrial reasons, should, above everybody else, behave according to its own beliefs after industries are nationalised, and support all those who have the responsible task of operating them.
12.12 p.m.
Mr. David Howell: I should like to have spoken at greater length, but there is no time, and I am sure that we want to hear the Minister. I shall confine myself to two observations. The first, following the hon. Member's very experienced commentary, is that there is nothing new in Government interference in nationalised industries, or in the worry about it. What is new now is the widespread nature of the losses—despite the end of price compensation, of which we on the Opposition side fully approve—the deep disillusion of the management of nationalised industries with their status, which is more ambiguous than ever, and the recent performance of the Secretary of State for Industry, which
1828
has clearly confused rather than clarified the situation.
The key to this—I am sure that the Minister of State will repeat it, because it is the only answer—is for Government to be more systematic and clear about that part of costs to which the Government are going to contribute, that part which is social—or political—as opposed to economic. A firm and lasting decision has to be made on what to subsidise and what to protect, and on the size of the subsidy in cash terms. Once that decision is made, we have to stick to it. Above all, it is necessary, having decided on a chairman, to back him rather than sack him. Those are the only recipes which can succeed. It is the framework in which they should be formulated that is the key, and it is a key which successive Governments have sought to find and have so far failed totally to find. I look forward now to hearing the Minister's reply.
12.14 p.m.
The Minister of State, Treasury (Mr. Robert Sheldon): Unfortunately I have only five minutes in which to reply. I make no complaint about this, because I am sure that the whole House learned very much more from my hon. Friend the Member for Bristol, North-East (Mr. Palmer), with his great expertise in this area, than I might be able to add to the debate from my own knowledge of these matters.
Before dealing with the points that have been raised I must mention to the hon. Member for Guildford (Mr. David Howell) that the previous Government interfered to an extent that had not been seen before.
My hon. Friend made three important points. He said, first, that if the statutes are not in accord with the spirit in which they were made we may have to change the statutes. There are always subtle changes which take place over a period of time. I will endeavour to show that the interpretation of the statutes that we have undertaken, as have all Governments, is in accord with the workable way in which they were first produced.
My hon. Friend divided the nationalised industries into two broad groups. It was a very useful division, showing how different some are from others, and how we might approach them in a rather different way from that adopted in the

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past, if at some future stage we wished to make the sort of changes he mentioned.
We would all, I am sure, agree with what my hon. Friend said about the final discipline—the rate of return on assets. This, as he rightly said, is of extreme importance. Nobody dealing with nationalised industries will want to revert to a situation in which the rate of return on these assets is not in accord with the best principles of their efficient use.
My hon. Friend dealt with the origins of these nationalised industries. I shall deal briefly with their origins, because they provide a clue as to how they eventually evolved. The industries that were nationalised after the war were mainly the public utilities or services, or the semi-monopolies, and the statutes on which they were based were derived from Herbert Morrison's concept of the public corporation. Ministers were to be given powers for the oversight of these industries and for making sure that they took account of the national interest, but at the same time the boards themselves were to have clear and direct managerial control. Obviously great difficulty has been found in putting that simple proposition into practice.
All Governments since then have sought to redefine the national interest within the context of the policies they have tried to operate. Some interpret it as implying less intervention in the affairs of the nationalised industries. Some take a completely opposite view. Some of these differences have been seen over the past few years. The tendency has been towards closer and more detailed ministerial investigation and control than was envisaged when the industries were first set up. This has been true of both Conservative and Labour Governments in recent years.
Those who have looked for less intervention have tended to develop their argument to the point of claiming that the relationship between the Minister and his Department on the one hand, and the nationalised industries with which they are concerned on the other, should be that of a holding company to its subsidiaries. The simplest argument would be that the chairman appoints the boards of the subsidiary companies, which are then left to run the businesses themselves. If they do this successfully they are left alone, and if they do not they are sacked. The
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discipline underlying the solution is a simple one. But I do not think that this analogy really does justice to the rather subtle relationship always found to exist between the chairmen of most holding companies and the chairmen and managing directors of their subsidiaries. I am sure that whatever the reality of that relationship it is not particularly helpful in trying to evolve a way in which Ministers should deal with nationalised industries. They have a legitimate concern, reflected in the statutes and expected of them by Parliament.
The most important aspect is that these nationalised industries are major users of economic resources, currently responsible for about 15 per cent. of total annual investment in this country, and the Government cannot be immune from looking at levels of investment, with the economic importance that they have.
Secondly, the Government expect the nationalised industries, in their purchasing policy, to look for the best value for money. This, again, is a simple concept, but how does a nationalised industry look for the best value for money when its purchases may need to be made in certain areas of the country which are seeking economic assistance, with the implications involved for employment, balance of payments, and manufacturing industries.
Finally, nationalised industries have responsibilities as major employers themselves, and their decisions on location of sites, and so on, have big implications for particular regions and communities.
These are among the very many problems with which the Government have to deal, and which inevitably, in an interventionist age such as we are living in, are bound to involve the Government more and more.
I have drawn attention to these developments because I think that it is worth reminding the House that although these problems exist progress is being made and there are some improvements. We look for further valuable improvements in the years to come.
Perhaps I may best sum up the Government's attitude by saying that what we consider a good relationship has been called
"Arm's length but not hands off".

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Although I do not approach this debate as an occasion for a new policy statement, there is no doubt that this relationship is major and complex. It is one to which the Government will give continuing attention and thought.

CHEMICAL, GAS AND OIL INSTALLATIONS
12.20 p.m.
Sir Bernard Braine: On 1st June last year, the Nypro chemical plant at Flixborough exploded, killing 28 people and injuring 36 others. Hundreds more outside the plant were injured, though, fortunately, none were killed, and property was damaged over a very wide area.
Last week saw the publication of the report of the court of inquiry set up to establish the causes and circumstances of the disaster and to point out any lessons which might be learned.
As regards what the report has to say about the precise cause of the disaster, I understand that there has already been some criticism from experts. I shall make no comment on that score. This is more properly a subject for the hon. Member for Brigg and Scunthorpe (Mr. Ellis), who alone can speak with full knowledge of the localised aspects of this tragic happening.
I am concerned, however, with the lessons which might be learned for those communities elsewhere who are obliged to live in dangerous and unhealthy proximity, not only to a single hazardous installation but to concentrations of them. I submit that for such communities it is of the utmost importance that the lessons are learned and that appropriate action is taken as quickly as possible.
One such community is located at Canvey Island, in my constituency. I shall not repeat here in detail what I have told the House at length on other occasions about the totality of risk that my constituents face. Suffice it to say that at Canvey, 31,500 people share a small island of 4,400 acres with the largest methane storage plant in the country and extensive chemical, gas and oil storage, containing up to 121 million gallons of highly inflammable, potentially destructive and toxic material. With the introduction
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of two new oil refineries, the quantity of that material will leap to 365 million gallons.
Moreover, the island, which at high spring tide is 5 feet below sea level, is linked with the mainland by only two access routes, each of which converges at a single roundabout. It is enmeshed in a web of hazards, for there are jetties handling hazardous ships' cargoes, a network of oil and gas pipelines, ammunition loading in the estuary, and, on the mainland immediately to the west, the huge Thurrock oil complex.
The Flixborough report frankly concedes that
"no plant can be made absolutely safe".
It follows, surely, that where there is an existing agglomeration of hazards of the kind that I have mentioned and where it has been made plain over and over again that its extension is socially unacceptable to the local population, no additional hazard should be permitted. But at Canvey this is precisely what successive Governments have permitted over the years.
Indeed, the position is worse than it was at Flixborough. At Flixborough, there was a single plant situated in a thinly inhabited area. As the report says, the siting of the Nypro works
"was fortunate. Had they been in a densely populated area there is no doubt that death and serious injury would have been on a much greater scale".
At Canvey, however, there is a concentration of hazards in a densely populated area.
It is true that at Canvey there is at present a glimmer of hope, since, after I brought the issue to a head last July, the present Secretary of State for the Environment became seized of the gravity of our position and ordered an exploratory inquiry into the feasibility of revoking planning permission for one of the two oil refineries that we are being forced to accept. That inquiry took place in February and we are now awaiting the verdict.
I wish to be fair to those who operate existing hazardous installations on Canvey Island or anywhere else. The Flixborough report asserts that
"At no point in the inquiry was there any evidence that the chemical industry, or Nypro

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in particular, was not conscious of its responsibilities relative to safety. On the contrary, there were indications that conscious and positive steps were continually taken with this object in mind."
The same may be said about existing high-risk installations on Canvey. The Essex County Council, which has been the licensing authority since 1st April last year, assures me that it has been maintaining careful surveillance. In the last year it has carried out a total of 17 inspections.
The fact remains that however well conducted these existing installations may be each represents a significant hazard in itself, made acutely more so by being in juxtaposition with others and close to the sea wall, which, if breached, would lead to the additional hazards of flooding evacuation.
Despite the assurances that have been given about the licensing system, the Flixborough report reveals that much of the hazardous material at the Nypro plant was unlicensed, which means that the local authorities were unaware of the extent of the hazards. The report says bluntly that
"We regard the present situation relating both to storage and the use of hazardous materials as unsatisfactory."
That begs a number of questions.
Why was the licensing system ineffective at Flixborough? Who was responsible for flouting the law? Are there any other plants similar to that at Flixborough where the licensing system is ineffective and where the local authorities are unaware of the extent of the hazards?
It may be that, in the past, for commercial reasons there has been a reluctance on the part of some industrial companies freely to divulge details of their holdings of hazardous materials. What is being done to overcome this reluctance by ensuring confidentiality while at the same time insisting on compliance with the licensing system?
It may be that the weakness is elsewhere. For example, even where licensing authorities are aware of all the dangerous products stored at particular sites, how well equipped are they technically to judge whether specific materials should be housed on the same site? I hope that the Minister will agree that in view of what the report says it is imperative
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to restore public confidence in the licensing system.
There is another anxiety which is not referred to in the report but which should cause us concern. Linking Canvey's existing gas, chemical and oil storage facilities is a network of pipelines. Believe it or not, the gas pipeline linking the methane plant to the national gas grid runs for part of its distance along the top of the seawall, until it adjoins the oil storage area. Thereafter, it runs in close parallel with the main United Kingdom oil pipeline in a narrow band between the seawall and the site of the new Occidental Oil Refinery.
It is not too fanciful, I suggest, to regard these pipelines as a powder trail in an area where the danger of fire always lurks. Yet, incredibly, no reference was made by the then Secretary of State for the Environment to the existence of these pipelines when giving planning permission to the Occidental Oil Company in 1973. It was all too easily assumed that questions of fire and safety were covered by the licensing system. The buck was passed.
I can find no evidence that the implications of these interlinking pipes were ever properly considered. Clearly the matter cannot be left there.
I wish to know, therefore,. what specific action is being taken to measure the safety or otherwise of these pipeline systems in situations where there is an accumulation of known hazards. Can the Health and Safety Commission be asked to look into the matter without delay?
I turn now to another hazard which is touched on in the Flixborough report, namely, the dangers that arise from the sudden release of inflammable gas or toxic fumes. Let us consider, first, what happened at Flixborough. The report tells us that the cause of the disaster was the ignition of a massive vapour cloud formed by the escape of cyclohexane, heated and under pressure, but what the report does not tell us is what the threat of a vapour cloud meant for the people living outside the plant, in some cases five or six miles away from the centre of the explosion, and what, therefore, are the possible implications for other communities living in endangered environments.
Following the explosion at Flixborough, 3,000 people were evacuated

1835
from within a radius of three miles. I understand, however, that had there been a slight eastward shift of the wind, 3,000 more would have had to move from their homes. If the wind had veered to the north, it would have been necessary to evacuate perhaps as many as 80,000 people, requiring the rescue resources of two counties.
Yet at Flixborough, the total population living within one mile of the Nypro plant is 400; at Canvey, the comparable number would be 3,600. The number living within five miles of the Nypro plant is about 45,000; in our case, it would be more than 80,000. The village of Flixborough was partly screened by rising ground; there is no such protection for the people at Canvey, since the island is completely flat. What is more, at Flixborough evacuation was possible in several directions. Canvey, on the other hand, is an island, with escape possible in only one direction. It may be argued that we do not have the same chemical processes on Canvey that led to the explosion at Flixborough. That is true. But we have a situation where a vapour cloud could arise and serious danger would occur.
Let me spell this out. We have a methane plant which stores over 100,000 tons of liquified methane in tanks. Every five days stocks are replenished, with 12,000 tons brought by a tanker from overseas. On 6th December 1974 an empty coaster collided with one of these tankers. Fortunately, no damage was done. But it seems clear that if the collision had resulted in the tanker's hull being pierced, it is likely that there would have been a major disaster. Liquified methane would have poured into the estuary, vapourising on contact with the water and expanding into a highly flammable cloud which, since our prevailing winds are south-westerly, would have spread over the island and been ignitable until it was dispersed. All that would happen over one of the largest concentrations of oil, gas and chemical storage in this country, and a large resident population.
Listen carefully to what the report said about hazards of this kind:
"Although unconfined vapour-air explosions have been known to happen in other parts of
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the world, there is a marked scarcity of information about the conditions under which an unconfined vapour cloud can result in an explosion or what is the mechanism leading to such an explosion."
What an extraordinary admission. Here we have a panel of distinguished experts unable to secure information about a hazard to which thousands of people in this country could be exposed at any time.
There have been methane explosions leading to fatalities elsewhere in the world. We know that even empty methane tanks can explode. One did so at Staten Island. New York in February 1973, killing 40 people. Is it not incredible that nobody seems to have bothered to inquire what would happen if anything went wrong with a methane plant in this country? Is it not incredible that successive Governments deliberately encouraged development at Canvey which must bring additional hazards into narrow waters with a long history of collisions and mishaps close to our high fire-risk installations? When will those in authority wake up and realise that it is one thing to operate hazardous industry, which may be unavoidable in an industrialised country such as ours, but quite another to do so alongside a residential population and to permit that population to grow? I trust that the Minister will draw the attention of his right hon. Friend the Secretary of State for the Environment to what I have said on this score.
Indeed, there is a further matter which might be usefully drawn to that right hon. Gentleman's attention. Paragraph 222 of the report says:
"In any area where there is a major disaster hazard a disaster plan for the co-ordination of the rescue, fire fighting, police and medical services is desirable. Although all services, it appears to us, work satisfactorily at Flixborough, we were specifically asked to draw attention to this need."
The report suggests that the Special Committee on Major Hazards, which was set up by the Secretary of State after the Flixborough disaster, should look into this matter. There is a disaster plan for Canvey, but I am bound to say that it is utterly unrealistic. It envisages an orderly evacuation which even under ideal conditions would take more than three hours of continuously flowing traffic, using the same road junction which would have to be used by the rescue services trying to come on to the island.

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The best answer is surely to limit the risks of anything going wrong, if not actually to eliminate them from the start. The second best answer is to shake up officialdom to the realities of what could happen if anything went wrong. I beg the Minister to press the special committee and the Health and Safety Commission to come to grips with the problem of how to ensure effective disaster emergency arrangements as soon as possible.
I understand that there is a difficulty here. If real progress is to be made and clear responsibilities are to be allocated, it is imperative to secure a clear definition of what constitutes a major hazard. I understand that even now the Health and Safety Commission has not yet received a clear definition from the special committee. Why the delay? The point is important because, as matters stand, there is confusion on the question of who will be responsible for effective fire precautions in situations like that which we face in Canvey. Will the responsible body be the Health and Safety Commission or the fire authority? For the moment no one knows the answer to the question.
believe that it is the declared intention of the commission to assume control over major hazards. I warmly welcome that. That would leave the fire authority responsibility for everything else. However in the absence of a definition as to what is a major hazard, the commission is unable to make progress. Is that really so? A list of major hazards was drawn up in 1972. Has it been brought up to date? Is it realistic? Who gets it?
We repose great hope in the new Health and Safety at Work etc. Act, in the sense that, for the first time, it lays a clear duty and responsibility upon everyone in industry to have regard to safety not only within a plant but in relation to the community around it.
There is, however, a long way to go. The Flixborough report goes to the heart of the matter when it quotes Mr. V. C. Marshall, safety adviser to the Transport and General Workers' Union, who told the court of inquiry that
"Hazard analysis recognises that hazard cannot be entirely eliminated and that it is necessary to concentrate resources on those risks which exceed a specific value."
The report says:
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"We agree with this statement, which accords with reality. No plant can be made absolutely safe."
The report goes on to say that when Mr. Marshall referred to risks exceeding a specific value:
"We understand him to refer to risks which exceed what at a given time is regarded as socially tolerable, for what is or is not acceptable depends in the end upon current social tolerance and what is regarded as tolerable at one time may well be regarded as intolerable at another."
Exactly. For my people at Canvey the point of social tolerance has long been passed. Whatever the excuse for building up hazardous industry there in the past alongside a much smaller population, the situation has now totally changed. Existing hazards must be reduced. No new hazards must be added.
That is perhaps one of the most important lessons to be drawn from the Flixborough tragedy. I trust that it will be taken to heart by all who have responsibilities in this grave matter.
12.36 p.m.
Mr. Arnold Shaw: I am grateful to the hon Member for Essex, South-East (Sir B. Braine) for initiating this debate. My concern arises from the close proximity in my constituency of a chemical works, Laporte Industries, to high density dwellings and also a primary school which borders the works.
While the factory, by its very nature, has always been an environmental concern, the Flixborough explosion raised serious fears among the residents and parents of children attending the school when it was learned that cyclohexane was processed at Laporte.
On Saturday, 5th April an explosion occurred at the factory involving the death of one worker and injuries to three others. It is true that this in no way had any connection with cyclohexane, some of which is still stored, but the incident revived all the fears and anxieties to fever pitch.
When I wrote to the Minister about the third week of April I was informed that a report would be available at the end of May. I was told that after the matter had been considered by the Health and Safety Commission:
"The Commission may decide to publish the report under section 14(5) of the Health and Safety at Work Act".

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I assure my hon. Friend that the "may" will hardly satisfy my constituents, who feel themselves threatened and who demand a public inquiry into the incident.
There have been requests that the Committee of experts on major hazards should visit the plant and that local residents and councillors should be taken into consultation. The health and safety executive promised to bear that in mind. I strongly urge that only by such inspection and consultation will their fears in any way be allayed.
On 13th May I wrote to the Minister expressing concern arising from the disclosure in paragraph 194(c) of the report on the Flixborough disaster of the storage of potentially dangerous substances without the necessary licences being granted by the local authority under the Petroleum (Consolidated) Act 1928. That was referred to by the hon. Gentleman.
I was told that the matter would be referred to the health and safety executive for consideration. The fact that Nypro virtually bypassed the licensing process raises the question of the position in other chemical works, including those in my own constituency. I can only agree with the conclusion of the report which says:
"We regard the present situation relating both to storage and the use of hazardous materials as unsatisfactory."
The other matter arises from paragraph 220 concerning the siting of plant. The report properly suggests that new plant should be kept away from populated areas taking into consideration the risk of disaster. But in the case of existing plant the suggestion is—and again I quote from the report—that
"present precautions should be critically reviewed and where necessary strengthened."
I urge that such action should be taken at Laporte Industries in my constituency.
12.41 p.m.
The Under-Secretary of State for Employment (Mr. Harold Walker): I have learned to expect by now that whenever the House debates any matter concerning the use or storage of inflammable or dangerous materials we hear the voice of the hon. Member for Essex, South-East (Sir B. Braine). As on other occasions, I again pay tribute to the hon. Gentleman's vigour, persistence and
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determination in seeking safeguards for his constituents on Canvey Island.
The Flixborough inquiry report contains many lessons of general importance for the chemical and petroleum industries and it is right that those with responsibilities for large sites at which hazardous materials are handled should examine these lessons closely. If the report leads to a general recognition first that all industrial processes involve some risk, however remote and, secondly, that it is the function of good management and good government to ensure that these remote risks are properly and adequately controlled, these lessons will be well learned.
The hon. Gentleman in his speech drew from the report those recommendations which are of particular concern to those of his constituents who live on Canvey Island. I have noted his points and I shall ensure that the Health and Safety Commission is fully aware of them. The Commission was set up after the explosion and is responsible for an Act which came into force after the explosion. It may help the House if I indicate ways in which the chairman of the Commission sees the new Act dealing with hazards of the kind presented by installations such as those on Canvey Island.
In the past control over storage installations was limited. The Factories Act had two disadvantages: it applied only to factories and it protected only the work-people. The Offices, Shops and Railway Premises Act had similar limitations. Consequently, the jurisdiction of the Factory Inspectorate might be exercised over only a very small part of a huge installation, and the only real control of the storage was by licence under the Petroleum (Consolidation) Act 1928 and its associated legislation. This too, as has been pointed out, is limited in scope and does not cover many hazardous substances which may well be stored in quantities sufficient to cause concern. The new Act clears up these difficulties and will allow the inspectors of the Health and Safety Executive to consider safety of the site as a whole—as it affects the neighbours as well as the workpeople.
The Flixborough Report recommended a review of the existing regulations for licensing the storage of hazardous materials. This is being considered and, as I told the House on 12th May, the

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commission has instructed the executive to begin discussions with the local authority associations about the licensing arrangements for these large installations, and whether one authority should be responsible for all aspects of safety.
Mr. John Ellis: Is the Minister aware of the statement in this morning's Press that the Nypro company is planning to install a further plant? One thing that emerges from the report is that the local authorities when called upon to give planning consents have not the expertise available to them. Could he say in what way the expertise of the Health and Safety Commission could be made available to local authorities so that they may determine such cases? Will he say a little more about the licensing position at Flixborough, which I am sure will be of assistance to the House?
Mr. Walker: In the course of my remarks I shall be saying something about licensing arrangements and also about the need for more expertise to be available to local authorities and the way in which they should proceed in the handling of planning applications.
In regard to the point raised by my hon. Friend the Member for Brigg and Scunthorpe (Mr. Ellis), I know no more about that matter than that which I have read in the national newspapers this morning. One national newspaper said that Nypro had made an application for planning permission to rebuild on the site for the production of capro lactam which was under production in the process involved in the disaster, but I understand that it does not propose to use that process involving oxidation of cyclohexane, but has submitted an application for a less hazardous process involving hydrogenation of phenol. I make those remarks with a view to assuring the people who underwent the terrible experience of the explosion that it is not an application for the reintroduction of the original process. I do not want to say anything that might prejudice the validity of such an application. I agree with my hon. Friend's general point, and I shall say a little more about the matter later in my remarks.
At the time of the explosion the responsibility for the licensing of storage of petroleum had just been transferred from
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the rural district council to the county council, which is also the fire authority. It is hoped that in the short term the transfer of these functions to the county councils will lead to greater consistency in licensing conditions. In the longer term the executive has plans to review the relevant legislation and this will, of course, be done in consultation with the interested parties, including local authorities. Understandably, there is much public concern about the licensing position at Flixborough concern which I share and which I hope local authorities will bear carefully in mind.
As long as the present licensing arrangements continue, it is crucially important that public confidence in such arrangements should be fully maintained and that nothing should be done by way of omission or otherwise to undermine that confidence.
I turn briefly to the point raised by my hon. Friend the Member for Ilford, South (Mr. Shaw), who understandably expressed concern on behalf of his constituents who live in the vicinity of the Laporte factory in Ilford. I am very much aware of the concern felt by his constituents arising from the explosion that occurred on those premises on the 5th April. In reply to a Question tabled by my hon. Friend on 29th April, I explained that the chairman of the commission had called for a special report on the accident and that results of certain metallurgical tests were awaited. I am advised that the report is in preparation and should be sent to the commission shortly, but the question whether the report will be published is one for the commission.
The commission has power under Section 15 of the new Act to recommend the making of regulations requiring the licensing of any activity and it will be for it to consider whether use should be made of this method of enforcement. Detailed consideration of individual proposals will no doubt await the recommendations of the committee of experts which, as Members will recall, was set up after the Flixborough explosion to identify the types of installation which have the potential to present a major hazard.
I recognise that the results of the deliberations of the committee of experts are anxiously awaited by industry and by those who may be affected by the activities of industry. The chairman of the

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committee has assured me that the committee is aware of the urgency of its work, and this debate will impress on him further the need for an early report. But it is essential that the committee's work should not be rushed because on its reports much of the future work of the commission in this field may depend. A wrong decision at this stage may lead to a misdirection of resources. As the Flixborough report states
"it is necessary to concentrate resources on those risks which exceed a specific value",
and it is hoped that the committee will be able to lay down the criteria by which those risks can be identified.
The hon. Member for Essex, South-East mentioned the recent exploratory inquiry into the planning permissions granted for petroleum refining on Canvey Island. As he recognised, this is a matter for my right hon. Friend the Secretary of State for the Environment, who I understand is awaiting the report of the inspector and will consider the matter when the report has been received. Certainly I will draw this debate to the attention of my right hon. Friend—as the hon. Gentleman has asked of me—and will remind him of the hon. Gentlemen's arguments and the strength of his concern.
While this may be of little consolation to the hon. Gentleman as far as Canvey Island is concerned, arrangements have existed since 1972 by which planning authorities could take the advice of the Factory Inspectorate before granting planning permission in order to ensure that the question of public safety is considered. These arrangements continue. One of the sub-groups of the committee of experts is looking further at planning questions, and officials from the Department of the Environment are represented at this sub-group.
This is a difficult field in which many conflicting interests may have to be reconciled. The committee of experts does not plan to embark on a programme of visits to individual sites. Its aim will be concentrated on the production of guidelines for general policy as distinct from recommendations for dealing with individual places. It will then be for the commission to consider these recommendations, to decide how to translate
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them into action, and to arrange for them to be applied to the problems of particular sites by the appropriate arm of the Health and Safety Executive.
The question of the installation and routeing of pipelines is a complex one in which various authorities may be concerned. My right hon. Friend the Secretary of State for Energy has a prime responsibility under the Pipelines Act 1962 and the Health and Safety Executive also has duties under the Act in relation to safety aspects of pipelines. I shall bring the hon. Gentleman's comments to the attention of my right hon. Friend and of the chairman of the Health and Safety Commission.
The Commission now has responsibility for all places of work and I shall ask the chairman to ensure that the risks which were mentioned are carefully considered during the visits which will be paid by the inspectors of the Health and Safety Executive in the course of their duties.
As I mentioned earlier, some sites at which there may be large-scale storage of hazardous materials will not have been subject to general inspection under the earlier legislation and therefore the full extent of the problems at these large sites is not known. The executive is now arranging for these sites to be identified as a matter of urgency so that the commission can consider action in the light of full information. This matter will, of course, have to be reviewed when the committee of experts has expressed its views on what constitutes a major hazard, but I am assured that this will not inhibit action in appropriate cases.
At Canvey, as at some other sites, there is the added complication of the loading and unloading of hazardous cargoes and the associated shipping movements. The Health and Safety Executive is pursuing this matter by the formation of an interdepartmental committee on the problems of hazardous goods at docks and harbours. That committee has now held a preliminary meeting. I am aware of the concern that is felt in a number of other areas about this matter.
The court of inquiry recommended that every area where there is a major industrial hazard should have a disaster plan. Rightly, the hon. Member for Essex, South East has drawn attention to the

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particular problems that concern Canvey should—hopefully never—any disaster occur there. Many areas do have such plans, but these may need to be reexamined in the light of the instantaneous rather than escalating disaster at Flixborough. The chairman of the commission tells me that the committee of experts is to look at this aspect of the matter. I hope that now that the report of the court of inquiry has been published, industrial managements will consider the recommendations in the report in the light of the potential hazards from their processes and consult the authorities responsible for the emergency services.
The hon. Gentleman spoke of his fear of a vapour cloud explosion at one of the premises in his constituency causing damage over a wide area and causing damage to other plants, perhaps with disastrous results. The report of the court of inquiry comments upon the lack of information about vapour cloud explosions in open air.
There have been about 40 such explosions recorded over the last 30 years, but, by their very nature, precise information is difficult to come by. I hope that the world-wide interest shown in this disaster will lead to a useful exchange of information within industries and within inspectorates. I am told that the Health and Safety Executive has, since the publication of the report, made approaches to several other countries which have experience in this area.
I must emphasise, however, that the Flixborough vapour cloud explosion in open air arose from the processing of substantial quantities of highly flammable liquid under conditions of high temperature and pressure. The lessons to be learned from this event have been spelled out in the report. Those responsible for the safety in operation of plants with this potential must take steps to reduce the possibility of such a disaster happening again.
Not all the implications of the report are unfavourable for those living near large-scale plants. The report states that
"at no point in the inquiry was there any evidence that the chemical industry was not conscious of its responsibilities relative to safety. On the contrary, there were indications that conscious and positive steps were continually taken with this objective in mind".
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It goes on to say that
"if the steps which we have recommended are carried out the risks of any similar disaster, already remote, will be lessened. The disaster was caused wholly by the coincidence of a number of unlikely errors in design and installation of a modification. Such a combination of errors is very unlikely ever to be repeated. Our recommendations should ensure that no similar combination occurs again and that, even if it should do so, the errors would be detected before any serious consequences ensued".
These extracts from the report give some encouragement for those who live near large-scale plants. Of course, it is essential that such plants must be designed, constructed, maintained and operated to the highest standards. Employers must achieve these standards, and the need for vigilance on their part cannot be over emphasised.
In addition, the new framework of law provided by the Health and Safety at Work etc. Act, the new enforcement powers for inspectors, and the restructuring of the inspectorates under the Health and Safety Commission, which gives for the first time the possibility of a unitary control of safety measures, demonstrate our intention that a tragic event like the Flixborough disaster will not happen again.

VALVE INDUSTRY
12.58 p.m.
Mr. David Lambie: I am grateful for the opportunity of raising this afternoon the subject of Eurovalve and the future of the valve-making industry in Britain, with special reference to the firm of Glenfield and Kennedy of Kilmarnock, one of the major employers of labour in that town. Although Glen-field and Kennedy is a Kilmarnock firm in the constituency of my right hon. Friend the Secretary of State for Scotland, whom I am glad to see here this afternoon, a large number of the work force are constituents of mine in Central Ayrshire. My right hon. Friend has been in touch with the Department of Industry and the Minister of State, Lord Beswick, on this matter. He has seen the union mainly concerned, the AUEW, and has had three meetings with the shop stewards of Glenfield and Kennedy.
Following these meetings my right hon. Friend conveyed to his hon. Friend the Minister of State the fears of the work

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force at Kilmarnock and helped to arrange a meeting between the shop stewards along with two representatives of the Scottish Trades Union Congress, including Mr. James Milne, the general secretary, and Lord Beswick. After this meeting the shop stewards met my right hon. Friend and the delegation reported that is appeared that the decision to set up Eurovalve had been made and that the Government could not reverse it.
Although this was accepted by the shop stewards it was agreed that an attempt would be made to get an assurance that the project would be held to the original development and that I would be approached to raise the matter in the House by way of an Adjournment debate. I do so now.
On 20th Febraury 1975 the Financial Times printed an article headed:
"Valve makers fail to stop BSC factory project."
This was a report to the effect that the British Steel Corporation had set up a management team to run a company known as Eurovalve, to manufacture valves mainly for use in water pipelines. This was to be a joint venture between the British Steel Corporation and a French company known as Pont-à-Mousson on a five-acre site between Nottingham and Derby. The initial investment of £500,000 was to be spent by the two partners and production was due to begin at the end of this year.
The five-acre site was planned to expand eventually to nearly 40 acres and to employ up to 150 people. The project was designed by the BSC to provide new job opportunities for redundant steel workers in the area. Although this article was the first time the shop stewards at Glenfield and Kennedy and other valve manufacturing works in the United Kingdom became aware of Eurovalve, the British Steel Corporations plans to set up the joint venture were first made known in April 1974, when a Labour Government, immediately on taking office, had agreed to it on the grounds that it would provide much-needed employment in the Stanton area, where the BSC blast furnace works had closed.
This closure was already under way when the Labour Government set up
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their review of the British Steel Corporation's closures. As it could not be reversed, both the Government and the BSC attached high priority to replacing the lost jobs as far as that was possible. Most of the negotiations between the BSC and PaM had been conducted during 1973, during the period of the previous Conservative Government. Upon the Government announcement in April 1974 the British Valve Manufacturers' Association protested to the Government and held meetings with representatives of the Department of Industry, and with the Under-Secretary last August. The main objections of the valve manufacturers were, first, that the British valve industry was not afforded an opportunity of collaboration before the BSC resorted to linking with a foreign manufacturer; secondly, the principle of the BSC manufacturing valves in collaboration with a major foreign manufacturer and in competition with existing United Kingdom industry on, presumably, a shared profit royalty basis; thirdly, the possibility that Eurovalve would receive favoured treatment from BSC in respect of raw materials, particularly in the molten state, to the detriment of other customers in the valve industry; and fourthly, that there was a likelihood that PaM would use the advantageous base to extend the range of valves manufactured far beyond that envisaged in the initial case. The choice of the name Eurovalve gave credence to this belief.
The association hoped that approval would be withheld. There had been no consultations—I stress this—between the British Valve Manufacturers' Association and the trade unions concerned, or between the management of Glenfield and Kennedy and the shop stewards. This lack of consultation on the management side must be regretted, in view of subsequent events concerning this matter, which vitally affected not only their own future but the future of those working at Glenfield and Kennedy.
It was only after the Financial Times article of 20th February 1975 that the shop stewards at Glenfield and Kennedy were told of the concern of the valve manufacturers. By that time it was a case of shutting the stable door after the horse had bolted. The vital decisions had been taken. During the discussions and correspondence between the shop

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stewards and the Department some contradictions have appeared. I would like the Minister to clear them up.
In a letter dated 6th March 1975 from the Minister of State's Office to the Scottish Office a comparison is made between the 25,000 people employed in the United Kingdom valve-making industry with the Eurovalve projected work force of 150 people. In a letter from the Department to Mr. Thomas Clayton, the secretary of the joint shop stewards' committee at Glenfield and Kennedy, dated 21st March, there appears the following statement:
"It has been stated that the initial proposition for the joint venture would employ 150 people."
Will the project be limited to 150 people and to one type of valve? The point has been made that this industry has an annual turnover of £130 million and therefore the joint venture is of no Scottish significance, because it accounts for only 1 per cent. of that sum. This is irrelevant for us at Kilmarnock, since Eurovalve will make waterworks valves. The annual value of the present production of such valves is between about £4 million and £5 million.
Therefore, Eurovalve's turnover becomes about 20 per cent. to 25 per cent. of all the waterworks valves produced by British manufacturers. This vitally concerns the workers at Glenfield and Kennedy, since over 30 per cent. of its production is of waterworks valves. Will the Under-Secretary give the assurance that in future developments of this kind there will be consultations with the industries concerned and others whose plans are likely to be affected, including trade unions?
This project could be only the tip of the iceberg. The British Steel Corporation has a statutory duty—I have been pressing it about this, supported by the Government and the TUC—to try to provide alternative jobs in areas affected by redundancies and closures in the steel industry by the encouragement of new developments. It will not help the redundant steel workers in places like Cambuslang and Motherwell if they are provided with alternative jobs at the expense of workers in Kilmarnock and Irvine.
In a booming economy there would be no problem, because the expanding market
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would take up any increased production. But in today's industrial climate with unemployment rising, especially in certain areas of Scotland, that is just not on for us. I ask the Under-Secretary to tell us what steps have been take and what help has been given by his Department to extend the range of products and to increase the competitiveness of Glenfield and Kennedy, and other value manufacturers in development areas such as Scotland, to safeguard jobs. I hope that the Minister can give me and my right hon. Friend and the workers of Glenfield and Kennedy answers to these questions.
1.8 p.m.
The Under-Secretary of State for Industry (Mr. Michael Meacher): I am well aware of the anxiety felt by my hon. Friend the Member for Central Ayrshire (Mr. Lambie) and by my right hon. Friend the Secretary of State for Scotland, particularly about the employment provided by Glenfield and Kennedy in the constituency of my right hon. Friend. I appreciate their fears about the adverse effects on employment prospects in their constituencies which it is felt may occur as a result of the setting up of the Eurovalve joint venture.
My hon. Friend has rightly raised several of the points about which there has been some discussion. I welcome the opportunity today to put the matter into full and proper perspective. As my hon. Friend had said, the first approach by the British Steel Corporation on this subject was in December 1973, to the previous Conservative administration. I cannot of course speak about that, and anyway the project was overtaken by the February 1974 General Election. The Government were asked to consider this matter in their first few days in office.
The proposal involved the establishment of a new company which was to be known as Eurovalve Ltd. to be jointly owned by the British Steel Corporation and by the French engineering company Pont-à-Mousson S.A. to manufacture rubber-coated gate valves of a type not available in the United Kingdom—I know that that point is at issue and I shall return to it—and which were then being imported into this country through a German subsidiary of Pont-à-Mousson. The Eurovalve factory was to be located

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at the BSC's Stanton works near Nottingham.
The BSC had several reasons for wanting to embark on this joint venture. Not only has the BSC's Tubes Division for long had it in mind to enter into the industrial valve market as a natural part of the development of its pipeline product business, but this particular type of valve which, I emphasise, uses ductile iron castings, would be specially suitable for production at the BSC's Stanton works and would make a particularly valuable addition to the castings order book there.
The cost to the BSC of £400,000 would be relatively small and would not be a direct call on public funds. Without the joint venture, the BSC would probably develop valve manufacture at Stanton by direct investment at no special saving in capital expenditure. The project therefore had considerable benefits in the eyes of the BSC. Furthermore, the forecast growth of 7 per cent. a year in the United Kingdom market for industrial valves suggested that there were good prospects for an additional manufacturer in this sector.
This brings me to the most important reason which the BSC advanced for getting the venture going, namely, the need to provide alternative local employment for the workers made redundant by the closure of the coke ovens, sinter plant and blast furnaces at Stanton. The Labour Party was faced virtually with a fait accompli when it came into office in March 1974. The BSC, as a result of this joint venture project, would be able to honour the undertaking which it had given at the time that the closure of the plant was proposed that it would do everything in its power to mitigate the effects of the closure on employment.
These seemed to the Government to be sound reasons for the proposed investment and a useful but limited extension of the activities of a public enterprise. I would not want particularly strongly to stress the extension. There was, however, the not unimportant point of which we were bound to take account that manufacture in the United Kingdom, rather than in France or Germany, as had been the case up to now, of this type of valve, would aid our balance of payments both by providing import substitution and by
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creating new opportunities for further exports. We hope that there will be significant increases in exports as a result of it.
Therefore the Government gave their approval to the BSC's proposal. Perhaps it would be helpful if I were to spell out explicitly the heads of agreement which were drawn up. First, a jointly-owned company would establish a factory at Stanton. The site would be purchased at market value from the BSC. Production of rubber-coated gate valves would commence in mid-1975. It was proposed that there would be a later expansion to include other types of industrial valve; I do not conceal that. The heads of agreement laid down that, until production commenced, Pont-à-Mousson would make adequate supplies of valves available from its European factories.
Secondly, ultimate control of the company would be with Pont-à-Mousson, which would hold 50·1 per cent. of the equity, although the BSC, with a 49·9 per cent. holding, would have strongly entrenched rights. Thirdly, valve designs, including research and technical assistance and knowhow, would be made available to the company by Pont-à-Mousson and any necessary licences would be granted in return for a royalty on sales. The BSC would provide other services to the company at normal commercial prices. I emphasise that. This has been a point of considerable controversy.
Fourthly, the company will eventually employ about 150 people, many of them to be drawn from among the BSC's Stanton redundant employees. Fifthly, castings from Stanton would be transferred to the company at market prices. The value of such sales should rise. It was expected to rise to about £400,000 per annum on gate valves by 1978–79.
Sixthly, valve sales to the United Kingdom by the Jansen subsidiary of Pont-à-Mousson, which currently amount to £150,000 per annum, would be transferred to the new joint venture as soon as it was set up. This is an important aspect of the import substitution argument. In addition to providing import substitution, the joint venture was expected to lead to additional exports from the United Kingdom.
I appreciate the fear that the present unemployment at Stanton will be exported to other areas and that the constituents of other hon. Members will

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suffer. In other words, there might be advantage to the employees made redundant at Stanton but it would be of little net advantage in employment terms in the United Kingdom if the unemployment were transferred to other areas. I appreciate the strength of that argument. Nevertheless, I believe that it is unfounded, and I should like to indicate why I believe that.
First, I have been assured by the BSC that trading with Eurovalve will be at arm's length and the BSC, like other nationalised industries, has a duty under the Iron and Steel Act not to discriminate between its customers. I have been assured that there is no question of the BSC giving the company preferential treatment in either the supply or price of castings. Nor will the BSC refuse to sell pipes without valves. That explains why the site is relatively large, because the BSC hopes to sell Stanton's pipes, couplings and valves as a package, and this requires substantial space.
Secondly, although Eurovalve may well manufacture other types of valve, there is no reason why this should cause undue concern to other valve manufacturers. My hon. Friend paid considerable attention to this point. I stress that demand in this market continues to be buoyant and the opportunities offered by the North Sea oil and gas industries should, in our view, enable enterprising companies to maintain or, indeed, expand their businesses without being unduly worried about this relatively small element of additional competition which will probably take up no more than about 1 per cent. of the market.
I appreciate the point made by my hon. Friend the Member for Central Ayrshire that the percentage share of the market for an industrial valve of this specification is substantially larger. However, manufacturers can, of course, and do, diversify into other areas of industrial valves.
I also know that some valve manufacturers claim that they have a product, equivalent to the Pont-à-Mousson design, to be manufactured by Eurovalve and that the British Steel Corporation could have sought business with them before turning to the Pont-à-Mousson valve. This is probably the other main point of controversy.
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I am no expert in this and I am reliant on advice, but I have been assured by the British Steel Corporation that only the Pont-à-Mousson product design meets its requirements, one of which is that the valve should be of ductile iron. I would stress that the Eurovalve product will be in ductile iron as opposed to cast iron and that the seating arrangement is rather different. However, I am sure that the British Steel Corporation will be only too pleased to be made aware of a competitive product—it is possible that Government aid under the Industry Act 1972 might be available to assist for this purpose—which the British Steel Corporation could then consider alongside the Eurovalve product, provided that my hon. Friend accepts that the British Steel Corporation must, in the last analysis, be left free to exercise its commercial and technical judgment in the same way as any other company.
I do not think that this is a matter of strategic decision on which intervention by the Government would be proper or desirable. I will deal in a moment with the question of general treatment of issues of this kind involving nationalised industries.
I hope, therefore, that my hon. Friend the Member for Central Ayrshire will accept that the Government's decision to allow the British Steel Corporation to proceed with its plans was certainly not ill considered, and I hope that even if he cannot accept that it was entirely right, he will appreciate that very strong arguments were involved.
I maintain that the decision was right in all the circumstances. Equally, I hope that the British valve industry will concentrate its efforts on seeking to exploit the opportunities, which are very much open to it, for new and expanded business as a result of the exploitation of the North Sea.
I am also conscious of the strength of feeling about the principles underlying this case, and although I by no means depart from the view that the decision, taking all the circumstances into account, was right, I am glad to assure my hon. Friend that we are reviewing the operating procedures of nationalised industries as they relate to ventures of this kind. I recognise the force of the argument that nationalised industries might be expected to use the services and the products of

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British industry provided they are competitive. I fully appreciate the strength of that argument. That is the reason for the present review. Because we have not yet completed this review, unfortunately I cannot give my hon. Friend the result of it. I should not wish to prejudge its outcome, but I can certainly assure him that it is taking place and I hope that he will not press me further on it. However, I am certainly conscious of the strength of his feeling on this point.
As I have indicated, the United Kingdom valve industry has a very bright future if it seizes all the opportunities that are now open to it. It already exports about 40 per cent. of its output, and the opportunities for growth in both the developed and developing countries should be considerable once world trade generally begins to pick up again, as it certainly will.
The chairman of the British Valve Manufacturers' Association in his report for 1974 portrayed last year as a record in terms of fuller order books, material shortages and labour scarcity. Despite these factors and the three-day week in the early part of 1974, deliveries of valves both home and overseas last year achieved record levels. Home demand, he added, was now falling off slightly, which should enable companies to meet delivery times for existing and future orders. As to the longer term, the chairman's report emphasised the adverse effects if material shortages were to continue unabated and the difficulty in assessing a changing market situation. However, providing these factors diminish, the report expected a continuing, steady home demand and growing opportunities in connection with North Sea oil and its associated down-stream requirements.
This is a generally buoyant assessment of future prospects and it is endorsed by the draft April report of the Short-Term Trends Working Party of the Mechanical Engineering EDC. This notes the poor demand prospects for valves for use in the home market in central heating and other areas, following the down-turn in investment by many sectors of private manufacturing industry, for reasons that are understood. It also emphasises the expectation of high demand from such
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sectors as the North Sea oil and gas industries, as well as the chemical industry. Although the report does not mention the Middle East and other OPEC markets, it is to be expected that demand will develop quite strongly in these export areas as well, perhaps, as in many industrialised countries concerned with energy saving requirements.
This is a generally buoyant prospect for the industry, as is indicated by several reports. The constraints on production mentioned in the British Valve Manufacturers' Association's annual report for 1974—namely, the shortages of materials, components and skilled labour—should all be helped in the medium-term by the measures announced by the Chancellor in his Budget Statement, whereby funds will be made available to assist the modernisation of the ferrous foundry industries and additional funds will be made available to increase training and retraining facilities. With these aids and with its own efforts I am convinced that the valve industry's future is assured and that it will continue to make a valuable contribution to the British economy.
This afternoon I have tried to give some assurance to my hon. Friend the Member for Central Ayrshire on the points that he has raised. We are very well aware of the considerable concern that has been expressed, particularly in the constituency of my right hon. Friend the Secretary of State for Scotland, where Glenfield and Kennedy are located. I hope that the hon. Member will accept our considered view that there will not be an export of unemployment to these areas. We believe that there will be a substantial advantage to other constituents in Stanton and that the general future of the British valve manufacturing industry, despite this, is altogether bright.

RAILWAY SERVICES (NORTH EAST KENT)
1.27 p.m.
Mr. David Crouch: I am very glad to have this opportunity to represent in Parliament the serious problems facing rail commuters to London from North-East Kent. A great many of my constituents travel daily from Canterbury, Whitstable, Herne Bay and other places along the North-East Kent coast

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to London. There are many more commuters from other constituencies along the line, all the way to Margate.
It so happens that I am also president of the North-East Kent Railways Travellers' Association, which seeks to represent the travellers in their complaints and in any negotiations they seek with British Rail. It is a useful relationship. The officers of the south-east division of the Southern Region of British Rail recognise the problem that exists and have always been ready to talk to and to meet the association and the commuters themselves. They have not been slow to come into the constituency to hold public meetings and to hear the grievances of those commuters.
A number of other hon. Members who represent constituencies in the area would have liked to be here today but, as I have already told you and the Minister, Mr. Deputy Speaker, I have been able to find a slot for only one of them—my hon. Friend the Member for Faversham (Mr. Moate), whom I am very glad to see in his place and who I know will be seeking to catch your eye when I sit down.
It is a difficult problem for me to raise, because I recognise the very grave economic situation facing the country. I recognise, too, the problem of the nationalised industries and the burden that they are on the British taxpayer. Nevertheless rail commuters throughout the country have been having a very difficult time in the last few years, and none more so than rail commuters on the Southern Region of British Rail and in Essex, as my hon. Friend the Member for Essex, South-East (Sir B. Braine) has so often told the House.
Rail commuters have had to endure the awful dislocation, delays and cancellations due to the recent unofficial action by the signalmen. I have sought, on a number of occasions, with the Secretary of State for Employment to help with a solution for that situation rather than to hinder it. I have done this by having personal discussions with the right hon. Gentleman and also by seeking publicity outside this place, on the radio and elsewhere, to implore the railwaymen to obey their union and not to take unofficial action.
I am glad to say that that problem seems to have resolved itself, largely because
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of the care and responsibility with which it has been approached by Members of the House and by the rail travellers themselves. We in North-East Kent were particularly badly hit.
Another problem that commuters from North-East Kent face is punctuality. It almost seems as though it is a permanent one. I receive regular complaints from my constituency listing the late arrivals of trains both to London and back home at night again, all of which I pass on to British Rail. Very often I find it necessary to write to the Chairman of British failure of this section of British Rail that failure of this section of British Rail that is not delivering a good service.
The question of time-keeping—not by the railwaymen, nor by the trains, but by the people who travel on the trains and who arrive late at their offices in London—is now so uncertain that a number of employers in London have told me that they are beginning to think twice before they employ a person living in and coming from North-East Kent.
The divisional manager of the southeast division of British Rail has certainly tried his best to answer the criticisms of these employers and to apologise to his customers, but all that he could say was that whereas the introduction of temporary speed restrictions necessary for the maintenance and renewal of the track should normally never exceed three half-mile stretches in the distance from London to my area and to Ramsgate, beyond where I am, since September 1974 there have never been fewer than 10 such restrictions on the line, and often this figure has been exceeded and has been as high as 16 or 17—six times higher than the expected and calculated figure by British Rail engineers.
The divisional manager has said that he is working on this problem. I am glad to hear it, because the commuters are getting very angry. They are not getting good service.
The real purpose of my seeking to raise this matter in the House today, before we go away for the recess, is to point out that although the commuters are not getting a good service—I maintain that they are getting a very bad service—they are certainly paying through the nose for it, They are paying through the nose for the

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privilege of being regular customers of British Rail.
These commuters do not get special treatment and relative luxury such as is meted out on the prestigious inter-city services of British Rail. They do not get the Pullman-like comfort that British Rail likes to advertise so often these days, of the inter-city services with the half-empty coaches purring along at 100 mph with a white-coated waiter serving drinks and a lunch. That is not life on the commuter services from North-East Kent.
I draw the Minister's attention to something else that is happening. These commuters are paying through the nose. Exactly a year ago—in May 1974—the cost of an annual season ticket from Herne Bay, in my constituency, to London was £232. Today, in May 1975, it has risen by £127, to £359—an increase of 55 per cent. in 12 months.
We know that price inflation in Britain is running at the dreadfully high figure of between 20 per cent. and 25 per cent. We know that wage inflation is running at the high figure of between 30 per cent. and 35 per cent., but it is nothing like 55 per cent. Why should rail commuters—the regular, steady customers—be singled out for such punishing price increases?
I shall tell the House why. It is because they are the prisoners of British Rail. Rail commuters cannot go away. They cannot even have an "Away-Day" from British Rail. There is no other way for them to get to work and to get home at night—certainly not for the majority. They cannot afford to "See a Friend this Weekend". They are spending all their money on seeing their employers in London and getting home to their wives and families at night.
It has long been accepted that commuter rail services cannot be commercially viable. It has also been long accepted that the commuters should not be driven away from using the railways. The commuter service today is an essential social service in Britain. The pattern of our life in this overcrowded island requires that millions of people have to travel long distances to work. That is a fact of life. It is nothing to be proud of, but we must make the best of a bad situation.
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We cannot change that overnight without changing many other factors in ourlives—producing the jobs where people live, perhaps—but we cannot change this for millions of people in the pattern of our social, economic, industrial society as it is already. People have to spend several hours a day traveling to get to their jobs, and in the case of my constituents that traveling sometimes takes up to four hours a day from door to door—this is an experience I have had myself—and sometimes more than four hours when punctuality is not as it should be.
The jobs are not there in my constituency; they are in London. The homes are outside London, in my area. I am talking of Whitstable, Herne Bay, Canterbury and places along the North-East Kent coast. There are no jobs in this part of the world. As I have often said in the House, down there we have a small pocket of relatively high unemployment.
The only prospect today for the school leaver in my constituency is to get a job in London and join the commuter crowd—and pay £400 a year for it. What a prospect, on leaving school! When one gets a job in London one thinks it is terrific. The pay is £1,200 a year, but it will cost the school leaver £400 a year straight away for the privilege of getting to work at all.
There must be no question of forcing commuters to take to the roads, certainly not the Kentish roads. The Minister knows full well that I have become somewhat of an expert on the question of the inadequacy of our road services to London from East Kent.
Beeching, that great slasher of unprofitable lines, knew that the commuter had to be catered for as a social obligation. He said, on page 20 of his report, referring to the main cities and the commuter rail travellers to those cities:
"the pattern of life in all these areas is dependent upon continued operation of the suburban rail services, and to the life of London they are essential. Is is therefore unthinkable to most people that these services might be closed."
Dr. Beeching went on, because it was his job, to think in terms of commercial operations:
"But that is no reason why they should be provided below cost."

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I have included those words deliberately so that my quotation is not out of context.
Dr. Beeching, as he then was, continued on page 22 of the report, referring to the commuter service:
"There is no possibility of a solution being found, however, merely by increasing or reducing fares. Increases in fares on rail services alone would drive traffic to available alternative modes of travel and yield little increase in revenue if any."
He went on to say that essential commuter services must be subsidised.
It is my contention that the commuter should be encouraged rather than discouraged in our complex economic, industrial and social environment—and "environment" is the word that I want to stress, because the Minister comes from the Department of the Environment.
I believe there is a complete failure by British Rail to face its economic and environmental tasks today. Its thinking is completely muddled. A remarkable book by the former chief economist of British Rail, Mr. Stewart Joy, with the intriguing title, "The Train that Ran Away" contains this comment:
"Much of the railways losses are not really losses at all, but amounts which should have been paid by the Government for social services."
We cannot tolerate increases of 55 per cent. on commuter fares. It is irresponsible, negligent and bad management. I would go so far as to say that it is criminally bad management. British Rail would not dare to treat its commercial customers in this way, and it knows what I mean by" commercial customers"—the customers on inter-city trains who travel on expenses paid for by their companies, and freight customers. British Rail would not dare to treat its freight customers in this way, imposing 55 per cent. increases.
British Rail, as so many of us are now aware, has consistently undercharged these commercial customers—inter-city and freight customers—for fear of losing them on to the roads. Consider the investment which British Rail has made in the last 10 years in this so-called commercial service—£1,000 million. It is a history of over-production and underpricing. British Rail is suffering today from self-inflicted wounds. It is feeling the pain now and it is turning, in its anger, on the commuters. British Rail has made swingeing increases in fares
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paid by these good customers, and it has the cool nerve to say that there are more to come this year. We know that British Rail is facing a possible wage demand, and a possible acceptance, of 35 per cent. this year from the railwaymen.
The attitude of British Rail towards its regular captive customers—the commuters—is nothing short of disgusting. British Rail may be bankrupt financially, but it has no excuse for bankruptcy in its social obligations. I maintain that it has a duty to provide a service to commuters at a fair price—a price in line with the movement of the rest of the economy and with the real social contract. But at 55 per cent. it is trying to lead the way—and to lead the way in the wrong direction.
British Rail must put its house in order. Labour costs have risen by more than 30 per cent. in the past 12 months, and it looks as though there will be a similar increase this year. British Rail must now begin to reduce the labour force, stop overmanning and increase productivity. It must stop subsidising the commercial services—the inter-city and freight services. These are the areas which must stand on their own feet.
My commuter constituents are angry. They are at breaking point. British Rail is under pressure to cut its losses. The Government are under pressure to cut their subsidies to British Rail and other nationalised industries. But the commuters should not be asked to carry this excessive burden, because they cannot pay the price and they should not be asked to do so. The Government must think again while they still have time.
1.45 p.m.
Mr. Roger Moate: I congratulate my hon. Friend the Member for Canterbury (Mr. Crouch) on his success in securing this Adjournment debate, and I should like to thank him for allowing me to make this brief intervention. I shall keep it brief, first because my hon. Friend has already spoken so eloquently on behalf of all the people in North Kent, including my constituents—for which I thank him—and also because we want to hear the Minister's reply.
I have consistently complained about the lack of opportunities to question Ministers in connection with the operation of British Rail. Increasingly whenever these few opportunities occur I begin

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to think that it is like bashing one's head against a brick wall, because the situation, instead of improving, has got much worse.
All commuters into London must share the same sense of shock at the massive increase in rail fares. On the North Kent line the sense of outrage is that much greater because of the poor quality of train services which we have experienced in recent years—poor train services in terms of frequency, punctuality, quality of the rolling stock and reliability.
For my constituents and many others it is a case of paying more and more money for consistently poor train services. Commuters know that they cannot alone be insulated against inflation. They know that subsidies cannot continue to be poured out into the nationalised industries, but I ask the Minister to consider the facts of the situation and particularly the situation of the long-distance season ticket holder. He has been singled out for the harshest treatment. British Rail's best customers are now getting the worst deal. The latest increase represented a 15 per cent. increase on the daily ticket fare. It is a 24 per cent. increase for the annual season ticket holder. Fares have increased by well over twice the increase in the cost of living in the past year—55 per cent. so far, with the terrifying prospect of even more to come.
For my constituents and for the rail traveller in particular the social contract is a sick joke. I ask the Under-Secretary to bear in mind that the cost of the season ticket for the long-distance commuter and for many families represents the largest single item in the family budget. They are paying £30 a month, which for many people is more than their mortgage repayment and more than their rent. A further heavy increase will represent a heavy blow to the resources of any family.
It seems that the Government have now decided, as a matter of policy, that the failures of management, of industrial relations and of Government to deal with inflation, particularly on the railways, can be heaped on the head of the captive commuter in the form of ever higher fares. The commuter is, indeed, a captive of British Rail. There are too few jobs locally for him to enable him to give up travelling to the City. Generally
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speaking, it is too far to travel by car. But there comes a breaking point. There comes a point of diminishing returns. If fares continue to escalate at this rate, commuters will be prepared to put up with the great inconvenience of travel ling on ever more congested roads. It will become sensible for them to travel by road and put up with the inconvenience.
I hope that the Minister will take on board the fact that we are nearing that breaking point now. I hope that he will take a rough and tough look at the whole management of British Rail and will, as one member of the Government at least, champion the cause of the commuter.
1.50 p.m.
The Under-Secretary of State for the Environment (Mr. Neil Carmichael): I have listened with great interest to the speeches by the hon. Members for Canterbury (Mr. Crouch) and Faversham (Mr. Moate). I think that they know that I have been closely associated with this matter in the form of Questions and in correspondence as well as in Adjournment debates with other hon. Members.
I want to begin by assuring both hon. Gentlemen that I fully recognise the importance of the matters we are discussing this afternoon. For those of their constituents who are commuters, the train journey to and from work is part of the fabric of their lives. Anything that affects their journeys must, therefore, affect the quality of their lives. All of us know from personal experience that a bad journey can mean that we arrive at work feeling ill-tempered and tired. And a bad journey home can make us snappish and irritable with our families and friends.
I recognise that fares increases such as those we have seen this year cause a genuine anxiety for some families about their continued ability to balance the family budget. The concern the hon. Gentlemen expressed about this today on behalf of their constituents is reflected in many letters I have received from other parts of the South-East and elsewhere.
I hope that I have indicated my understanding and sympathy for commuters and the impact on them and other rail users of the recent fares increases. My aim this afternoon, therefore, is to answer the

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points made by the hon. Gentlemen as fully and frankly as I can.
First, I should like to deal with fares. I am grateful to the hon. Gentlemen for giving me this opportunity to explain why the recent increases were necessary. On 18th May fares rose overall by about 15 per cent. But the annual season ticket rate increased on average by 24 per cent., while quarterly tickets went up by about 21 per cent. and monthly tickets by around 18 per cent. As a result of the May increases, the cost of a second class annual season from, for example, London to Canterbury has risen from £293 to £359. The hon. Member for Canterbury also quoted the example of the fare from Herne Bay.
There is no denying that these are substantial increases. Naturally, people ask why rises of this order were necessary and whether they could have been mitigated. They were necessary because inflation has hit the railways just as it has hit the rest of the economy. Rail costs have risen steeply over the last few years. I can illustrate this with figures from the grant statistics.
In 1972 the Railways Board received a total of £72 million in grants for unremunerative rail passenger services. Just two years later, the amount of grant required had doubled to £146 million. Price restaint was partly responsible for this doubling and the support had to come from general taxation. But increases in the price of fuel, materials, bought-in services and manpower were also among the main causes of the increases.
I do not lay the entire responsibility for the present losses of the railways at the door of inflation. We all know that if we want a railway system of any thing like the present size we must be prepared to give the board substantial annual compensation for providing it. This is the policy underlying Section 3 of the Railways Act 1974. Through it we are currently giving Exchequer support to the whole of the railway passenger system.
However, there is no question but that inflation, combined with the price restraint that applied until this year in the public sector, has forced up, and is continuing to force up, costs. And it is inflation which makes unavoidable fares increases such as those we have had in January
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and now, again, in May. Ordinary commuters from areas such as the constituencies of the two hon. Members are the victims. That is why the top priority for the Government and everyone else must be to combat inflation.
There are some who say that we should have increased the amount of Government grant and not the fares. I was not quite sure of precisely the point the hon. Member was seeking to make on this score. I know that he tried to contrast the inter-city service with the commuter services. He wanted inter-city fares to be greatly increased, but I am not sure that that would have a substantial effect for commuter services unless the increases were punitive.
The grant for the passenger system this year is likely to be about £340 million. In part, the cost increases are covered by the grant, and fares would, therefore, have had to go up by even more had we not made this subsidy. However, we could not meet the whole of the cost increases from taxation. The hon. Gentleman is, I know, aware of the need to restrain public expenditure at the present time. We always seem to have complaints from Conservative Members about rising public expenditure until we touch on a subject in which they are particularly interested. Suddenly that becomes an aspect of public expenditure which is quite permissible. With 200 or 300 Conservative Members all wanting expenditure to increase on their particular interests, it would be impossible to make the overall cuts in public expenditure which they say they want.
I recognise that commuters will be particularly affected by the increase in season ticket rates. On 18th May they went up on average by more than most ordinary fares. I am not attempting to minimise that fact, but it has to be recognised that commuters who buy season tickets are the main users of the networks round London and the other big cities.
Even though the annual rate has gone up by an average 24 per cent., the commuter with a second-class annual ticket is still getting a very big discount on ordinary fares. Similar discounts are available on the quarterly and monthly season tickets. These are substantial savings and well worth having. They

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have to be borne in mind when comparing the increases in ordinary fares and season ticket rates.
Perhaps I could just sum up what I have said about fares before going on to deal with the quality of rail services in North-East Kent. Railway costs have risen steeply. Inflation and price restraint have played a large part in this. The grant to the passenger system this year will be about £340 million. In part, the cost increases can be met from grant, thus to some extent reducing the need for fares to rise. But the entire increase in costs cannot possibly be met only from taxation. Some increases in fares are therefore inevitable if services are to be maintained. Moreover, we should remember that between 1971 and 1974 rail fares did not keep pace with inflation. They rose 2 per cent. less than the retail price index, and 12 per cent. less than average national earnings.
I want to deal briefly now with the quality of the rail services for commuters from North-East Kent. The main complaints concern reliability. Reliability and punctuality are probably the prime worries of any transport system. Added to that in this area is the fact that some passengers have to stand during the peak travelling hours. Another concern is the inadequacy of some of the rolling stock.
I have every sympathy with commuters who find that the scheduled train services are not running. The reason for the great majority of cancellations has been the shortage of staff, particularly drivers and guards although I believe there has been improvement since the pay restructuring negotiations last summer and I am glad to say that, as a result, British Rail has recently been able to operate a full service in North-East Kent except for occasional withdrawals.
Another cause of distress has been the unpunctuality of the services to this area. I know that the divisional management of British Rail has discussed this problem with hon. Members who represent the area and the board has issued several leaflets to passengers, notably one last March called "The Punctuality Problem", and I am sure that the hon. Member fox Canterbury has a copy of it. The resignalling scheme at London Bridge, which should be operating fully by next Easter
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and will cost about £18 million, will help to some extent, but it cannot provide a complete solution to the problems of punctuality, although it might help to reduce them. It will not of itself stop the overcrowding during the rush hours.
At present, over 1 million people travel into London during the three peak hours. Three quarters of these come by surface and underground trains. It is estimated that 30 per cent. of all peak period commuters to Central London use the South-Eastern Division of British Rail. As a result, trains are, of course, over-crowded during the rush hour while there are plenty of seats at most other times. There is no simple solution to the problem of the crush at peak travelling times, either in North-East Kent or elsewhere.
I am sorry that I have had to cut my speech short, but I am sure that the hon. Gentleman will realise that he and his hon. Friend spoke for rather longer than we expected. The hon. Gentleman knows that we are always willing to have private discussions or correspondence on the problem that he has raised in the past and that he has raised again today so well on behalf of his constituents. I shall read his remarks in the Official Report and he in touch with him about any of his points that I have not covered.

SEVERN-TRENT WATER AUTHORITY
2.0 p.m.
Mr. William Whitlock: Some weeks ago a Conservative Front Bench spokesman said that the Conservative Party's slogan was now to be "Small is beautiful". I must say that in view of the Conservatives' record in office I find that statement astonishing. Of course, I would agree that smallness in a business or organisation by no means necessarily involves inefficiency, while it is sometimes the case that bigness can bring remoteness and inefficiency. But whatever might be the attitude of some members of the Conservative Party now, certainly the actions of the last Conservative Government have brought us enormous problems, with which we are now wrestling and which are the direct consequence of their liking for reorganisation on a large scale.

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One of the reorganisations on a grand scale carried out by the last Conservative Government involved the transference of the control of water supply and sewage treatment and disposal facilities from local authorities to 10 regional water authorities in England and Wales, under the Water Act 1973. That Act spawned the huge Severn-Trent Water Authority, which is responsible for not only the management of our water resources in the hydrological basins of the Trent and the Severn but for the local water supplies and sewage treatment and disposal facilities in the vast area stretching from Wales to the coast of the East Midlands.
In that area water supply and general services charges have varied from locality to locality because of the historical differences in the charges levied by the Severn-Trent Authority's predecessor undertakings. It is now the proposal of the authority to equalise charges over the whole of this vast area within the next five years. I want to show how monstrously unfair that proposal is.
Several times recently the equalisation policies of regional water authorities throughout the country have been raised in the House, but in the Severn-Trent area we have circumstances which are unique. The mighty West Midlands conurbation which my hon. Friend the Minister of State, Department of the Environment, knows so well, is unique in the British Isles in that it straddles the watershed between two catchments. It takes a great deal of water from the Severn catchment and puts it out as effluent into the Trent catchment. One river—the Severn—is the principal water supply of the conurbation, while the other—the Trent—is its effluent disposal river. Thus, man's activities over the last 150 years have linked the two rivers and led to gross abuse of our natural water resources.
The Trent itself is a clean river, until it begins to receive discharges from the potteries, until it is grossly, horribly and disgustingly polluted by the poisonous industrial effluent and the unsatisfactory sewage effluent which come from the potteries and the West Midland conurbation.
Five years ago in the House, after a visit to the area, I pointed out that the sewage treatment facilities over much of
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the Black Country presented a disturbing picture of decades of neglect. These facilities are totally inadequate to deal with the sewage of the present population. It will cost astronomical sums of money to bring many of these truly Victorian facilities up to modern standards. Five years ago I saw with astonishment and disgust the horrible pollution of the River Tame, the filthiest river in Europe. It is the main drainage channel for almost the whole of Birmingham and the Black Country, and it disgorges its putrid mess into the Trent about eight miles upstream of Burton-on-Trent.
Just as it is true to say that millions of pounds are required to modernise the sewage treatment and disposal facilities of the West Midlands, so it is true to say that the control of the discharge of poisonous industrial waste into rivers in the West Midlands lags far behind the arrangements which have been made in the East Midlands.
Thus, the East Midlands has long been the recipient of the filth of the West Midlands, and it would be disastrously and outrageously unjust if by means of the equalisation charges now proposed by the Severn-Trent Authority, the East Midlands, which has managed so well its own affairs in this field, had now to pay to put right the neglect of decades in the West Midlands.
I cannot speak for the whole of the East Midlands, but I believe that just as in Nottingham—where we have always made adequate provision for the supply of water, for sewage facilites and the removal of effluent, and always paid appropriate, fair and adequate charges for those services—so the East Midlands as a whole has managed its arrangements in this field in a way markedly more successful than has the West Midlands.
Already under the terms of the Water Act, the domestic ratepayer in the East Midlands is paying more in his water and sewage charges, and under the proposal of the Severn-Trent Water Authority, he will pay much more yet to put right that astonishing neglect in the West Midlands of which I have spoken.
A similar story can be told on the trade effluent side. There is no justification for common charges to apply when totally different industrial effluent problems are involved, when the poisonous

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waste materials poured into the waterways of the West Midlands contrast so sharply with the comparatively innocuous trade effluent of the East Midlands, and when there has been such a difference in the past provision of facilities as between the East Midlands and the West Midlands.
As the important textile industry and other industries in Nottingham have expanded, so have sewers been provided and plants for the treatment of effluent improved. Industry has paid its full and proper share of the costs. I have never heard anyone suggest otherwise.
We have industries providing employment and making a worthwhile contribution to the economy, and using vast quantities of water as a basic material, while meeting the cost of the water used and of its subsequent treatment. That water has not for a long time come from the Trent, because that river—our river, as we think of it—has been for so long poisoned by the filth of the West Midlands. So water has had to be pumped, for industrial and residential requirements, from the bunter sandstone, to the detriment of the environment.
An example of this detrimental effect is that much of the Sherwood Forest area is incapable of supporting hardwood trees now because the water table has been lowered to such an extent. The Dover Beck, which once ran with sufficient vigour to operate textile machines, is now reduced to a mere trickle of drainage water. Thus, we have seen not only our river poisoned but our environment changed, because of the failure of the West Midlands to manage its water arrangements in the progressive and responsible way in which we have attempted to manage ours in the East Midlands.
So now, for the people of the East Midlands, who have put up with all this for so long, comes the threat of the equalisation proposals of the Severn-Trent Water Authority, under which they will pay huge sums of money to put right what the West Midlands should have been paying to do for scores of years. Now we are to have the strong possibility that the dyeing and bleaching industry will be brought to a halt, and undoubtedly the competitiveness of the
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textile industry in general, with all its current problems, will be further reduced. These are the bitter consequences of the 1973 Water Act which I and my hon. Friend the Minister of State fought and voted against in Committee.
Some weeks ago, as my hon. Friend will remember, I took a delegation from the Nottingham Chamber of Commerce and Industry to talk to him about these proposed changes. It was somewhat ironic that it was he whom we had to meet, for he was the leader of the Labour side on the Standing Committee dealing with the Water Bill in 1973. In those Committee proceedings he very clearly predicted what would happen, and what is now happening. At the meeting of the delegation he listened with sympathy and understanding to what we said, but pointed out that under the terms of the Water Act he had no power to intervene in the decisions of the water authorities on the level of charges which they levy, and that he was therefore in no position to explain or to justify the increased charges proposed by the Severn-Trent Water Authority. He said that already he had had discussions with the water authorities about the need to keep down their costs as much as possible, and that he had urged the water authorities to avoid any sudden increases in the structure of charges which could result in severe increases for particular groups of customers. In the light of this he suggested that representatives of the industries of Nottinghamshire should have further discussions with the Severn/Trent authority about trade effluent charges.
The Nottingham Chamber of Commerce and Industry took that advice and sent a delegation to see officers of the Severn-Trent authority, and about that time the authority issued its charging notice to firms, making it clear that appeals against the charges had to be notified to the Secretary of State within two months of the issue of the notice The charges to the East Midlands industries for the removal and treatment of effluent would be increased under these proposals fivefold over the next five years—a swingeing imposition on industry. In the discussions which ensued, the officers of the Severn-Trent authority would not go beyond agreeing that appeals could be lodged within three years instead of

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two months, without detriment to the appellants.
I point out to my hon. Friend that the industries of Nottinghamshire are willing to continue a truly meaningful dialogue with the Severn-Trent authority rather than go through the trauma of an appeal, but they have nevertheless decided to lodge appeals because it appears that a worthwhile dialogue is not possible. They have made it clear that the lodging of the appeals should be regarded as a protective measure, and that if the Severn-Trent authority is willing to continue discussions with a view to securing a mutually acceptable arrangement, the appeals may be withdrawn.
I appreciate that the upheaval of yet another change in the water industry, coming quickly after the last upheaval involved as a result of the Act, would bring chaos and confusion, but I hope that in the light of my hon. Friend's experience and in the light of what he said in Committee when we dealt with the Bill, in the not too distant future there will be amendments to the Water Act which will bring the right kinds of improvement, and which, particularly, will enable the Minister to have what he lacks now—the power to have something to say about the way in which charges are imposed by the water authorities.
I hope that when my hon. Friend replies he will be able to say that this is to be considered. I hope very much also that he will agree to approach the Severn-Trent Water Authority to say that he feels that the East Midlands has a strong case, and that he would expect the Severn-Trent authority to respond to the strength of that case by beginning talks with industry, and with any local authority which is aggrieved, designed to bring justice to the East Midlands.
I repeat that what is being proposed by the Severn-Trent Water Authority is monstrously unjust.
2.18 p.m.
The Minister of State, Department of Environment (Mr. Denis Howell): I am glad to have the opportunity, first of all, to pay tribute to my hon. Friend the Member for Nottingham, North (Mr. Whitlock) who, as he has told the House, was a strong supporter of the line that I took when the Water Bill came before
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the House, and played a very full part in the deliberations on it. I especially express my appreciation of his acknowledgment today of the fact that many of these great difficulties now being faced as a result of the Water Act were specifically predicted by both of us and by other Members on the Committee.
There has been reorganisation on a giant scale. I have not the time to associate this reorganisation with that of the local government reorganisation simultaneously carried out, but, as my hon. Friend said, if the whole of local government is reorganised, and also the whole of the water industry in this country, it is bound to be a very costly exercise. Ratepayers and water consumers are finding out exactly how right we were at the time to make these forecasts, and to regret the tremendous financial imposition which would have to be endured.
It is also true that one of the special reasons for our prediction was the gigantic size of the Severn-Trent Water Authority that was to be established. As my hon. Friend said—Mr. Deputy Speaker will know this well—this authority starts in Wales and stretches from the Welsh border land right across the country to near Lincoln, and in terms of democratic control this is an absolute nonsense. I do not wonder that so many people have no idea who are the people serving on this body, how they can make representations to them, and how they can get any redress of their grievances.
The principle of the Act is that the authority is based on the hydrological cycle. What happens now is that the rain falls in Wales—I hope in plentiful supply. It is then transported across the whole of England, being used on the way several times by the citizens living in the centre of England. It is finally discharged into the North Sea. 'That is the fate of our beautiful supply of delightful Welsh water. Whatever democratic procedures we have, it is necessary that we understand this hydrological cycle.
It is equally true, as my hon. Friend said, that when the previous Conservative administration introduced their Bill, another feature which was predictable was that authorities and citizens who had paid previously either to provide themselves with excellent supplies of water or, very sensibly and civilised, with efficient means

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of treating sewage and other discharges, were bound to have to pay again to provide them for those authorities and people who had not previously done so.
I concede at once the case put forward by my hon. Friend on behalf of his constituents. The East Midlands and Nottingham, in the former Trent River Authority, had a record probably better than anywhere else in the country in cleaning up sewage and other discharges and putting a reasonably wholesome discharge into the River Trent. Because there is tremendous pollution in the Black Country areas, they are to that extent having now to pay again for the job which should have been done years ago in those other parts of England.
The same applies in respect of water. I know that this is felt strongly in my own constituency in Birmingham which, in partnership with our Welsh friends in mid-Wales, had made a mammoth investment in mid-Wales to provide a wonderful supply of drinking water. Now Birmingham is being asked to pay again to supply the capital resources to meet the needs of those areas and those citizens who previously had not been so far-seeing about their own requirements. I must say that that was the main justification for the Bill introduced by the previous Conservative Government.
To the extent that my hon. Friend has made the case about what he feels to be the unfair nature of these additional financial burdens and about the pollution in parts of the West Midlands, the Black Country and the Potteries, we see the measure of the need to tackle these problems. I emphasise that we cannot tackle them on the cheap. They have to be paid for again, and my hon. Friend is right that I and my right hon. Friend the Secretary of State have no powers to interfere directly in such matters as the differential charges which my hon. Friend suggested.
My hon. Friend was saying that we should have the power to tell the Severn-Trent Water Authority that it should have differential charges for the treatment of sewage in the East Midlands from those applied in the West Midlands. Carrying that logic further, if that were to be activated on a national basis—and we have always thought that it should be—presumably some distinction would have to
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be made between one region and another. I cannot hold out any hope of that. As my hon. Friend knows, I have not the powers to move in that direction.
Despite the great difficulties and despite our criticisms, we decided when we came to office that we would let the present system run for two years. After all this upheaval, it would be a traumatic experience if we proceeded immediately to have another one right on top of it. In my view, ratepayers are justifiably concerned about the cost of all the reorganisation which has been imposed upon them. Therefore, it seems to make sense to have a period of two years during which all this can settle down. Then we can take stock of what has been happening about water.
I have some figures which may be of general interest to the House. We have often wondered what the cost of this reorganisation has been. I can tell the House what the additional administrative cost has been for the Severn-Trent. Evidence is now coming forward that the cost of the reorganisation itself has meant an additional 8 per cent. on the average water bill. Although everyone complains about the high cost of water, that is brought about not only by that 8 per cent. addition but also by an increase of 21·5 per cent. in the general wage bill of the water industry and a 14·5 per cent. additional burden in terms of debt repayment and high interest charges.
The average domestic bill for England and Wales in 1975–76 is made up of £14·42 for water and £13·81 for general services—a total of £28·23. In the Severn-Trent area, the respective figures are £1248 for water and £1386 for general services, making a total of £26·34 which is slightly below the national average.
One feature to have come out of the information that we are now getting is that everywhere—and certainly in Nottingham, though to a lesser degree—the domestic user of water and sewerage services is subsidising the industrial user. It seems now to be emerging that industry is not paying the full economic cost for the treatment of its discharges, sewage, drainage, and so on. Therefore, to that extent, industry is being subsidised by the domestic user, and that is a matter of which Ministers will have to take account.

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I appreciate the difficulties of Nottingham industrialists. My hon. Friend said that there would be some appeals. There are. We have already got some. But since we have to sit in an appellate jurisdiction, my hon. Friend will not expect me to comment on them. We shall have to make a decision at the end of the day. To that extent, the appeals are sub judice.
I welcome the fact that industry is talking to the Severn-Trent Authority and co-operating with it in the way that we urged. I am sure that the Severn-Trent Authority is well aware of the feelings of industrialists and is looking at different types of schemes which might be readily available. Ministers have said to authorities that, if they are moving towards the equalisation of charges, they should do so gently—over a five-year period at least—and that it would be quite wrong to impose full equalisation on the public at one go.
When the Conservative Government established these 10 regional water authorities, they established 10 independent nationalised industries—a remarkable feat, even for that Government. But it means that we have no power to interfere. However, in the two-year review, we shall take account of any representations that my hon. Friend or any other hon. Member cares to make to us on the matter.
The Severn-Trent Authority has said that it is moving, as it was advised to move by the Jukes Committee, into a situation where it wants equalisation over a five-year period but that it intends to give an 80 per cent. discount in the first year or two and to discuss with industry what should be done about years three, four and five. That seems a reasonable and co-operative approach. I am glad to know that Nottingham's industries are responding to it. I hope that it produces a reasonable degree of harmony, having regard to all the background difficulties, which I acknowledge fully.

INVALID TRICYCLES
2.30 p.m.
Mr. John Hannam: I am grateful for this opportunity to raise a matter which for several years has caused great concern not only in the House but to many people outside. I refer to the three-wheeled invalid tricycle—the
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"trike" as it is called—which is provided by the Government for severely disabled people.
Since I entered Parliament in those far-off halcyon days of 1970 I have been extremely active in disabled affairs, a member of the Disablement Income Group and also the all-party disablement group of which I am now secretary. The Under-Secretary of State for Health and Social Security with responsibility for the disabled has been long engaged in working for the interests of disabled people, and his Chronically Sick and Disabled Persons Act, which the Conservative Government implemented, is a landmark in parliamentary and local authority care for the disabled. I am extremely grateful to him for giving up a visit to a home for the disabled at Chailey so as to be here today for this debate.
The safety of invalid tricycles and the need for a new Government programme of four-wheeled vehicles is of such vital importance that I felt it necessary to raise it in the House at the earliest possible opportunity. I can quote from a sheaf of newspaper headlines in recent months to underline the concern felt throughout the country that we are placing our disabled and severely disabled drivers at great risk by providing outdated, unsocial and unsafe vehicles for them to use. I quote some of the headlines to prove my point. On 9th May The Guardian said:
"More unsafe and more costly".
The Times said:
"Invalid cars should be crash tested".
The Guardian said:
"Invalid trike horrifies the AA".
The Times said:
"Three-wheeler cars are too dangerous for the disabled."
The Observer said:
"Invalid car frightened the testers".
The Guardian said:
"Scandal on three wheels".
I could quote many others, but I think that hose are enough to show that this issue is not just a narrow parliamentary issue but one of national moral principle.
I hope today to put the case fairly and squarely to the Minister that the time for prevarication is over and that a decision must now be made by the Government to implement a course of action

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for which the Labour Party and the Minister called not long ago when they were in Opposition.
In a censure debate on 21st February 1972, the Labour Opposition spokesman, winding up, attacked the Conservative Secretary of State for Social Services for failing to provide disabled people with suitable four-wheeled transport. I base my call today on the words the Minister used in that debate. He said:
"The hon. Member for Oxford (Mr. Woodhouse) rightly emphasised that three-wheeled vehicles are, for many very severely disabled people, unsafe and unstable and should be replaced by four-wheeled vehicles."—[Official Report, 21st February 1972; Vol. 831, c. 1010.]
The House should know that the four-wheeled vehicle need be no more expensive, per vehicle, than the three-wheeler.
To be fair to the Minister—for he is an eminently fair man and will accept that I am also fair—he went on in that speech to refer to the urgent need to help the disabled passenger. Since he has been in office he has proposed a mobility allowance of £4 per week which will be made available as an alternative to a vehicle to all the severely disabled, from the age of five to 65, whether they are drivers, passengers, or disabled children who need transportation. The cost of that allowance is estimated at £15 million. I am sure that the Minister will say how proud he is about squeezing this £15 million out of the Treasury. He is justified in feeling proud. We all know the difficulties of escaping across the Treasury drawbridge with such a prize, especially in these days.
The £4 per week mobility allowance, which was announced last year, does not measure up to the problem which we are discussing today. Inflation has eroded the allowance to such an extent that the prime objective of providing an alternative method of transportation for disabled people or of providing enough money to enable disabled persons to purchase the vehicles of their choice, has now been destroyed by inflation and increased costs. I hope that the Government will offer a substantial increase in this allowance.
I seek to achieve three basic objectives today. First. I hope to convince the Minister that he was right in what he said in the 1972 debate—that the principle of providing a safe and serviceable invalid vehicle must be placed before
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the Treasury expediency of keeping down demand. Secondly, I hope to convince the Government that there is no need to react defensively in support of this three-wheeler because they feel that the phasing in of four-wheeled cars will mean the immediate removal of the three-wheelers from all the existing 22,000 users. I do not think that that need necessarily happen. Thirdly, I hope that I can persuade the Minister that the time has come for a realistic reappraisal of the mobility allowance, so that we can achieve what everyone wants, or at least what everyone knows to be possible in these stringent days, which is a mobility allowance of such a level that it will realistically allow a commutation of several years' payments, so that these people may purchase their own vehicles.
I am not, therefore, attempting to prove the existing three-wheelers to be so unsafe and so unsuitable that they must all be taken off the roads immediately, because I know that 15 per cent. or 20 per cent. of the owners are happy with their tricycles and would be upset at having to change to a different kind of vehicle. I accept that 21 per cent. of tricycle owners cover 1,000 miles or less per year and that many single men and women with certain disabilities and limitations are perfectly happy with their three-wheelers. But I also know—the evidence is overwhelming—that a large number of disabled drivers are frightened and appalled at the inadequacies of design and at the inadequacies of the quality of the structure of these three-wheelers.
Let us consider the tricycle in the context of Baroness Sharp's description. She said that it was a lineal descendant of the bath-chair, albeit motorised. If it does short around-the-corner journeys of under 1,000 miles a year, it is reasonably satisfactory. However, in recent years the general mobility of the population has risen sharply, especially in the distance travelled to and from work and school.
The Department of Health and Social Security has acknowledged this increased mobility of the working disabled, which we all welcome, by making improvements to the model 70 tricycle. It now has an automatic gearbox, travels at 50 mph, and has a much longer distance capability.

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What a missed opportunity. Instead of changing over, as other countries have done, to an up-to-date, passenger-carrying, four-wheeled automatic car, we cling—I do not know why—to an increasingly expensive, mainly foreign, mechanised bath-chair.
The consequence is that we must spend more on upgrading the road-speed performance of what was originally intended to be a slow-moving, short-distance wheelchair. To quote the words of the Government spokesman in the other place—Lord Wells-Pestell,
"a specialised invalid vehicle cannot be made as stable as a four-wheeled car. It can be overturned more easily, and its handling is more affected by cross-winds."—[Official Report, House of Lords, 19th February 1975; Vol. 356, c. 324.]
He can say that again. In common with my hon. Friend the Member for Banbury (Mr. Marten), Lord Snowdon, Graham Hill and the Minister, I have driven in a three-wheeler. My drive took place on a wide open parade ground in my constituency, where a disabled drivers' rally was taking place. It scared the living daylights out of me, so much so that I contacted the Devon Ortheopaedic Association and asked it to carry out a survey of disabled drivers in Devon to ascertain their views on stability, maintenance and repairs. The survey produced results which were very similar to those of the other investigations carried out by Which? magazine, the Cranfield tests for The Observer and Baroness Sharp.
The Devon survey of 51 drivers showed that 95 per cent. of the drivers considered their three-wheelers to be unsafe in wind and dangerously under-powered on hills, that just under 4,000 miles a year was the average mileage, that the cars broke down, each year, on average 13 times, and that most of the drivers had families and relatives who could not share their social lives or activities because of the limitations of the one-seater three-wheelers. The general verdict from this section of the community was that they were unsafe, unreliable and anti-social.
I know that other hon. Members have had differing responses from constituents in their areas. I express what I believe to be the general view. In areas such as Devon, where the hills are steep and the westerly winds whistle across the open roads, there is no doubt that these unstable vehicles present grave difficulties.
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I received a letter from someone who stated that he had driven over 50,000 miles in tricycles without an accident. He went on to say that he had achieved this record by never going out when it was windy or wet, and never driving on major open roads.
During recent weeks a spate of Parliamentary Questions and newspaper articles sought to secure from the Government a positive admission that under certain wind conditions their vehicles were unsatisfactory and that under modern road conditions they were less safe than we would want.
The Minister for Transport admitted, in a letter dated 7th January, to Graham Hill, that:
"In principle I accept the argument that the safety of the invalid tricycle is not as good as we would wish."
Government-commissioned tests carried out by the Motor Industry Research Association in 1972, 1973 and 1974 produced evidence of excessive interior noise level, steering and fire regulation failures and finally, after much probing by hon. Members on both sides, and after much delay by both Governments, the wind gust test reports were published, showing excessive sideways movement of these vehicles under wind gusts.
Finally, I come to a matter which has puzzled many commentators for some time. I refer to the number of three-wheeled invalid tricycles which overturned while being manoeuvred into position at MIRA. There also finally came to light the answer to something which had puzzled many commentators for some time, and that was a much delayed admission that a three-wheeled invalid tricycle had overturned whilst being manoeuvered into position at MIRA. Unfortunately, the MIRA employees have not been allowed to talk about the accidents, and I hope that the Minister will give permission for such a discussion to take place.
Apart from the official Government tests, several independent tests have been carried out. In July 1973 the Cranfield Institute of Technology discontinued swerve tests, owing to be dangers of overturning. Its staff refused to carry on.
In March last, the magazine Which? published an analysis of 1,300 reports received from disabled drivers of petrol-driven "trikes". The results showed the

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same complaints—namely, poor stability when cornering, fuel tank in exposed position, steering difficulties on uneven and slippery road surfaces, no spare wheel and a number of other complaints. The 1,300 reported a total of 298 accidents. Of these 35 were said to have caused major injuries to the drivers and another 74 accidents caused major damage to the car. The conclusion arrived at by Which? was that disabled people should have better designed vehicles such as a converted small car to carry a passenger.
The Motor magazine, in August last year, also reported the tricycle as being
"inherently unstable, virtually no protection in a crash and difficult to drive".
A parliamentary answer given on 3rd March gave the comparative injury-accident rate per million miles in the year to September 1974 as 6·4 for trikes as compared with 1·7 for adapted cars.
There are many other supporting tacts which I could quote to substantiate my case for phasing out these three-wheelers and for their replacement by an adapted home-produced Mini. However, I do not think I have to convince the Minister, with his responsibilities for the disabled, for I know that he has suffered a great deal of anguish over this problem. He knows in his heart that what he said when in Opposition on this subject is even truer today, but accidents continue to take place and occasionally a disabled driver is killed.
Only last week an inquest was held on a 20-year-old paraplegic, Mr. David Cherry, who was training as an accountant. He was one of the 1,300 who wrote to Graham Hill two years ago about his fears. In his letter he stated:
"The fibreglass body is dangerous—under impact it would just crumble".
That is exactly what happened on 5th March when Mr. Cherry was hit by a Ford car on a roundabout near Woodstock. The Ford was hardly damaged, but Mr. Cherry's tricycle was split almost in two and within 72 hours he died of his injuries.
What is stopping the Minister in the present Government—or, indeed, what prevented the Minister with those responsibilities in the Conservative Government—from announcing that henceforth no further orders for these expensive vehicles will be placed and that disabled drivers
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will be offered a choice of retaining their three-wheeler or taking a lump sum in lieu of their mobility allowance, or having a four-wheeled car?
I am not calling for a massive, immediate change-over from three- to four-wheelers. I confess that I should like to see some of the hundreds of millions of pounds that are now being squandered on wasteful Government nationalisation measures being apportioned to such a replacement scheme. But since I am realistic and logical, I know that it is "not on" at present. Accepting, however, that the Minister is not very likely to squeeze that kind of money out of the Treasury, I offer what I consider to be a practical solution to his problem.
First, I suggest that the mobility allowance must be increased to allow 50 per cent. to be commutable over a five-year period to obtain the capital outlay necessary for the purchase of an adapted four-wheeler.
Secondly, the Government should order a supply of Minis specially adapted to the various needs of the disabled and, if necessary, engage the existing tricycle manufacturers to provide these adaptations.
Thirdly, let us gradually phase out the older three-wheelers and provide, at a controlled flow, the new four-wheelers. I hope that the Minister will not trot out the Treasury-worn argument that this will mean a mad rush for cars and that the money will not be available. So far as I am aware, the cost of the "trike" exceeds that of a four-wheeler, and the savings on maintenance and repair will more than repay the Treasury mandarins.
The amount of money available from the Treasury obviously will determine the numbers of four-wheelers which can be issued each year—on the same lines as the attendance allowance, which came in stages. Therefore, the 1,000 or 2,000 cars a year can be issued to replace the oldest "trikes" and can also be provided for the most seriously disabled drivers or passengers. If it is still necessary to provide the 15 per cent. or 20 per cent. who want to retain the three-wheelers, the existing stocks will satisfy that demand for many years to come. But let there be no further orders.
The Dutch solved their transportation problem a decade ago, and now provide

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40,000 Daf automatics and other makes with every kind of adaptation necessary, plus a number of low-powered electric vehicles for those who are too disabled to drive a normal car.
I ask the Minister to remember his own attacks on the Conservative Government over their delay in introducing a four-wheeled vehicle for the disabled. I hope that he will state the relative costs of a model 70 as it will now have to be modified to overcome the faults highlighted in the MIRA reports, compared with the cost of an adapted Mini. I also ask him to give the answer to a Question which I tabled on 1st May about the cost of imported foreign parts of the three-wheeler, with its Austrian engine, Italian suspension and American components. I hope that he will also confirm the savings in repairs and maintenance of four-wheelers which would have only a fraction of the accidents and breakdowns which the tricycles suffer each year.
From my personal contacts with the various organisations representing the disabled drivers, I am fearful of the consequences of a refusal by the Government to take heed of the deeply-felt cries of the disabled drivers. A reference to the Ombudsman has already been made, and other legal actions will undoubtedly follow against the Department if something is not done. There should be an end to the production of these out-dated mechanised bathchairs. I believe that the case is insurmountable.
The case for refusing to introduce cars was summed up admirably in October 1973, when the present Prime Minister, then in opposition stated in The Guardian:
"There is some anxiety about a suggestion that the Department of Social Security's attitude on this derives from a fear that if they were to accept the case for a car which is more easy to control than less, with an equivalent standard of safety, comfort and reliability to those of other small cars—and allegedly cheaper—then the demand for such a vehicle would considerably exceed the demands for the less satisfactory three-wheeler."
The Prime Minister continued:
"Then it would cost more, not because our vehicles cost more, but because more would be applied for. If that is the argument … it is unacceptable."
I agree wholeheartedly with the Prime Minister and I hope and trust that his
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Minister for the disabled will also agree with his leader and resist such arguments from the Treasury mandarins.
I present this request not on a party political basis, because I exerted the same pressure on the previous Government I do so on behalf of the large numbers of disabled drivers and their families who cannot travel together and who have to experience all the rigours and tensions of travelling in an out-dated unsatisfactory and expensive three-wheeled vehicle. This must now be replaced by a car that is more suited to this day and age.
2.48 p.m.
The Under-Secretary of State for Health and Social Security (Mr. Alfred Morris): The safety of the invalid tricycle is a subject of very real concern to me, as I know it is to the hon. Member for Exeter (Mr. Hannam). In congratulating him on his choice of this subject for today's somewhat lonely debate, I welcome this opportunity to put on record the Government's attitude and our new and positive alternative to the provision of vehicles.
The hon. Gentleman's solicitude and genuine concern for disabled people are well-appreciated across the House. There are many hon. Members who would have liked to take part in the debate, including my hon. Friends the Members for Stoke on Trent, South (Mr. Ashley) and Eccles (Mr. Carter-Jones). However, within the short time at our disposal there was no likelihood of their taking part in this debate.
As I proceed, I shall seek to make some comments on points raised by the hon. Gentleman. I begin by saying something about our new policy for helping disabled people to get about more and about the particular rôle which has been played by the invalid tricycle.
Until now, the supply of an invalid tricycle has been the main form of benefit under the Government's scheme. There have been two options—to drive an invalid tricycle or, for people who own a car and can drive, to obtain a grant towards its running costs. For the great majority of disabled people who cannot drive or who do not wish to drive, there is no benefit. Whatever shortcomings the three-wheeler has, it is a choice that many people have been glad to accept and to

1887
use over many years. Our great concern is to provide help with mobility for the non-drivers, many of whom are much too severely disabled to drive, and who, unjustly, derive no benefit at all from the present scheme.
For the future, there is a completely new situation. The provision of a vehicle for the minority will now be an optional alternative to a cash benefit for the majority.
Hon. Members will be aware that yesterday my right hon. Friend tabled an amendment to the Social Security Pensions Bill to provide for the introduction of a mobility allowance for severely disabled people, as envisaged in the joint ministerial statement of 13th September 1974. The allowance, which we now propose should be £5 a week instead of the £4 a week previously announced, will be available to non-drivers and drivers alike who meet the medical conditions. From what the hon. Gentleman said this afternoon, I know that he will welcome this announcement. The disabled people who receive the allowance will be able to make their own choice as to the way in which they use it to achieve greater mobility. We know that some disabled people will still want to have the invalid tricycle. Thus, we intend to continue to make it available.
The hon. Gentleman asked about future orders for the tricycle. We must place orders sufficiently far ahead to secure continued supply, thereby ensuring that no one who is eligible for a vehicle, and wants it, is grounded through lack of supplies.
In future the mobility allowance will be the main benefit. The right forum for discussion of the details of the new allowance will be the Committee of the whole House which we propose should consider this part of the Pensions Bill. This afternoon I will simply say that the mobility allowance is a most important innovation which will be of great benefit to a very large number of disabled people. Its introduction will more than double Government spending on promoting the mobility of severely disabled people.
At this time of economic crisis, when it will be tremendously difficult even to maintain standards of vital services, that is the clearest possible affirmation of the priority that the Government give to
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helping disabled people to have an active place in the community. We hope to start phasing in the new allowance at the beginning of next year.
Many eligible people are not so disabled that they cannot drive an adapted production car. The mobility allowance will help them to meet the costs of a car, just as it will help others who choose different ways of getting about. The person who could drive a specialised vehicle, but not an adapted production car, is in a different position. What prevents him from running a car is not merely the financial problem of affording it, which after all affects many people who are not disabled as well as many who are, but the fact that his handicap makes him physically unable to drive it.
The Government see their rôle in providing a specialised vehicle as essentially the same as in the provision of other highly specialised needs of disabled people, such as artificial limbs and wheelchairs. The invalid tricycle was intended, first, as an elaborate prosthesis, not as a car. This is still its proper function today. We must not let this be obscured by the fact that progressive developments in design have brought it within reach of standards of performance which people customarily expect from cars.
Those who could not drive an adapted car are all severely disabled, but they are a very diverse group, each with his own individual problems. A specialised invalid vehicle cannot be a single model suitable for them all. It must be rather a basic design on which we can ring the changes in control systems and other features such as seating. Some people cannot use a steering wheel, so the basic design must have a steering mechanism capable of being actuated by a handlebar or tiller type of control. But a control of this type could not be used to operate the steering of an ordinary car with its two wheels at the front carrying, usually, at least half the vehicle's total weight. The effort needed would be too great. No doubt there are various possible technical solutions, but I am advised that there is no commercially available power steering system which would suit. The technical solution we have is a small light vehicle with a single lightly loaded wheel at the front.
Another factor affects the design of the body. Many of our clients are disabled

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by diseases of the muscles or joints and have largely lost the ability to bend. They need a fairly high and upright seating position, and one which facilitates transfer from a wheel chair. They also need a higher door than will be found on most production cars. These two factors, steering requirements and height, both have a bearing on the invalid tricycle's stability.
The mechanical design has to be a compromise. There are unavoidable drawbacks which go with the necessary characteristics of a vehicle design for the special needs we are seeking to meet. To illustrate this, the deliberately light steering—the ability to go from one lock to the other with a single easy arm movement—makes it possible to change course more abruptly than in a conventional care.
This brings its own problems. As we all know, an abrupt change of course when travelling at speed may cause a driver of any vehicle to lose control. The relatively extensive arm movement involved in a sharp change of course on a conventional car gives the driver a degree of protection against the effects of unintended arm movement or overreaction to some road hazard which we cannot give to the driver who is capable only of arm movement limited in range and power.
Another necessary feature—the high profile combined with the light front loading—inevitably makes the vehicle more sensitive to cross winds than most production cars, though, as hon. Members will have noted from the report placed in the Library on 7th May, the invalid tricycle was not the most sensitive of the vehicles tested by the Motor Industry Research Association.
In issuing these vehicles we are, therefore, unavoidably placing responsibility on handicapped drivers themselves to become familiar with the characteristics of their vehicles and to drive within the limitations. The handbook which is issued to all new drivers gives advice on the need for care to avoid abrupt changes of course and to moderate speed in strong winds.
It will be apparent from considering factors such as these that the assessment of safety is a complicated matter, affected by driver capacity, experience and behaviour
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as well as by vehicle design. We do not claim that the design compromise is ideal or incapable of improvement, but the scope for further improvement within the design constraints I have mentioned is probably limited.
Despite allegations to the contrary, all invalid three-wheelers built during the past 20 years have complied with the Construction and Use Regulations applicable to motor cars rather than the less stringent requirements for invalid vehicles. During the past two years new regulations have been introduced aimed at providing greater safety to the occupant in accidents.
The Model 70 complies with all these regulations with one exception. The requirements of Regulation 16, "Protective Steering Mechanism", are met by steering wheel versions of the Model 70.
In the case of "tiller" and "bicycle" type steering vehicles, the part of the test which requires a dummy to be thrown on to the steering mechanism cannot yet be carried out because a method of testing has not yet been devised. The Department is working in conjunction with MIRA on this problem. When it has been resolved tests will be carried out to ensure that these types of steering control meet the regulation requirements, too. We shall generally make further safety improvements where we can, just as manufacturers do. For example, we are in process of improving crash protection of the driver by fitting a roll-over bar to future production.
In considering the longer-term future, however, we must recognise that there can be no such thing as a totally safe vehicle. Even a modern sports car, which may have superb handling and braking characteristics, may or may not in practice have a good accident record.
For the Department, one possible line of advance may be improvements of electric vehicles. A relatively small number of severely handicapped people have been given mobility by the provision of electrically propelled vehicles. These have a low maximum speed and limited range but the speed limitation and ease of control enable them to provide relatively safe transport for certain groups of disabled people.

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As hon. Members know, much effort in the commercial sector has been aimed at producing an electric road vehicle or town car with improved performance and range, so far without marked success, primarily because of the limitations of electrical energy storage. Nothing as yet has proved more suitable than the conventional lead acid battery, which has the disadvantage of requiring regular attention.
The Department will be examining any possible avenues for improving the performance of electric vehicles. Even if only marginal improvements can be made it may be possible to extend the scope of the provision to meet the needs of some of those unable to achieve satisfactory mobility in other ways.
In referring to this problem and future possibilities I am, as the House knows from my recent statements, deeply concerned to improve the safety of disabled people. Accidents are worrying to us, more especially the relatively few tragic instances which involve serious injury or death. We learn from them whenever we can. In looking at accident statistics it is important to recognise one point of central importance. The figures relating to accidents involving tricycles published in this House and elsewhere are derived from a system of reporting which ensures that every accident involving damage to one of these vehicles, however slight, is recorded as an accident.
I am in an impossible position, Mr. Deputy Speaker because many important questions have been raised with me to which I would have liked to give a comprehensive reply. The hon. Member will appreciate that I have far too little time in which to reply. I shall be in touch with him about all the points he has raised with me, and I regret that it has not been possible to deal with them all today because of the shortage of time.

INDUSTRY (WEST MIDLANDS)
3.2 p.m.
Mr. Ray Carter: My subject is the industrial problems that we have in the West Midlands.
Mr. Hal Miller: Hear, hear.
Mr. Carter: As that intervention indicates, the fears and worries we have are shared by both sides of the House.
There was a time when, from Bombay to Buenos Aires, if someone bought a candlestick or an ornament and turned it upside down, the chances were that it would have "Birmingham" stamped on it. Unfortunately, those times have passed. History lingers on, and from Whitehall to Widnes, and, I have no doubt, down as far as Cardiff, Mr. Deputy Speaker, people still retain the impression that we in the West Midlands are the blast furnace and the metal shop of the British Isles and that we have no problems.
I want to disabuse the House and Government of such views, as I have tried to do over the five years I have been in this House. We in the West Midlands have many serious problems as was revealed in an extremely penetrating and revealing article published in The Guardian of Tuesday. As it pointed out, although we in the West Midlands are still the heart of Britain's industrial capacity, still producing over 60 per cent. of this island's exports, we have massive and extensive problems.
It is in that very concentration and dependence that we find most of our problems. As yesterday's economic debate revealed, we find most of our problems tied up with this question of investment and productivity. It is not surprising, therefore, that so much of the problem should be concentrated in the West Midlands which has such a heavy dependence upon industry. We have to remember as a community that to be able to live with a reasonable standard of living we have to export. To export we have to produce at the right price, at the right time and in the right quantity. If we do not do so, our standard of living will decline. We knew that in the 19th century but unfortunately over the past 70 years or so that is a fact of life that we have increasingly forgotten.
Those of us who represent the West Midlands, which for 150 years or more has produced the essential goods that this country has sold to maintain the standard of living of this small island, are not selfish when we come here to point out current weaknesses. We do so because we want the country to prosper as well

1893
as our region. In this debate my intention is to urge the Government to recognise our problems and urgently to do something about them.
Our problems are manifold. We suffer from low investment and extremely low productivity, particularly when it is compared with that of Japan, Germany and France. We have high unit wage costs. Consequently, we have very low profits. If we in the West Midlands are doing badly, the United Kingdom as a whole must be doing badly. Though we in the West Midlands support successive Government policies for development in the regions, if the foundation of our economy which rests in the West Midlands is not strong there is not much point in patching up the roof and the walls.
Reference to the economic indicator showing how we compare with industry throughout Britain will illustrate the sad state that we are in. Average productivity in the West Midlands as a percentage of that of the United Kingdom was 97 per cent. in 1958. By 1968 it had fallen to 92 per cent. Unit labour costs in the West Midlands as a percentage of the United Kingdom stood at 105·3 per cent. in 1958. By 1968 they had risen to 108 per cent. Profits per employee in the West Midlands compared with the United Kingdom stood at 89 per cent. in 1958. By 1968 they had dropped to 82 per cent.
That shows a pretty disastrous state of affairs. If that is the sort of economic background against which we in the West Midlands have to work, the United Kingdom as a whole stands no chance of dealing with its basic underlying weakness, which is a poor and inadequate industrial structure badly financed, badly capitalised and, in many respects, badly run, with high wage costs and low productivity. We cannot sustain the standard of living which we have enjoyed in the past unless we do something about this situation.
No one in the West Midlands with whom I have discussed the affairs of the West Midlands has attacked regional policy, development aid—call it what one will. There is an underlying feeling that perhaps we have neglected the principal area in which we produce the bulk of our industrial wealth and that, consequently, the economy of Britain has suffered.
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However, we have some hopes. There is a ray of hope in the Industry Bill if, when it becomes an Act, it is not used solely as a development tool but is applied to the West Midlands industrial economy. The planning agreement system, if it is applied to West Midlands industry, could reveal the underlying weaknesses to which I have referred. Some weeks ago the Chancellor of the Exchequer said that he would consider very closely the problems of foundries—we have many small foundries in the West Midlands—and he suggested that £100 million might be made available to assist foundries. Today the Prime Minister suggested that the textile and footwear industries might be assisted. We would hope that, as with the textile and footwear industries, the foundry industry will be assisted. I should be grateful if the Minister could, if not today then early in the future, give some indication of that.
What we need in the West Midlands at the earliest possible moment is an extensive analysis of our problems. The Government have already been given something of a lead by the timely document, drawn up by the West Midlands County Council, "A Time for Action". It is probably one of the most thorough appraisals ever carried out on the West Midlands economy, although I must point out that the Regional Economic Planning Council and the former metropolitan boroughs have done similar exercises but that precious little notice was ever taken of them.
The Government should read the document that has been drawn up carefully and give a positive response to it. The document reveals, for example, that the West Midlands area is dominated by small firms which are very vulnerable to the slightest flutter in the economy. We have a specialised structure. The small firms are closely linked to the major firms in the region, such as British Leyland. This makes us vulnerable to any kind of economic downturn. That feature exists at present with the rapid increases in the level of unemployment.
The dependence that many of our industries have, for example, on the car industry is a factor that should be borne in mind in any analysis that the Government make about the future of the West

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Midlands economy. Although we realise that the car industry is there and must stay there, we should like to see much greater diversification of our industrial structure than exists at present.
I ask the Minister to cast his mind back to 1972, when there was a rapid increase in unemployment. Then there was evidence enough of the serious imbalance in our economy. At the beginning of 1971 we stood second from the top in the league table of the employment status, but by the end of 1972 we had gone down and were second from the top in the unemployment league. We are extremely vulnerable to these economic downturns.
The fear in the West Midlands at present is that the situation will get rather worse in the future—even worse than the current deplorable level of unemployment. We recognise that the remedies will be long-term. We do not ask for immediate and spontaneous action, but we should like an early indication by the Government that they recognise our problem. Equally, we recognise that the aid that has been granted to British Leyland, to enable it to restructure and reinvest, will be of great importance to us.
However, we want to ensure that that aid is spent in the most profitable way. We do not want to find, for example, that £3,000 million of investment goes into British Leyland and that the retooling and restructuring that is carried out merely results in British Leyland going abroad to buy machine tools.
A timely article was published in The Times on Thursday 22nd May entitled "Investment warning by machine tool firms". This indicates that there is a serious possibility of the machine tool industry not being ready to take advantage of the investment that is going into British Leyland. Mr. A. M. G. Galliers-Pratt, president of the Machine Tool Trades Association said that
"The industry … would be unable to meet the time-scale of massive capital projects such as the British Leyland plan."
He said that this was because the British Leyland plan was being implemented rather quickly and his industry did not, therefore, have sufficient time to prepare for the reinvestment that British Leyland
1896
will carry out in the next decade or so. With the inevitable redundancies that will result from the restructuring of British Leyland, we shall have the problem of retraining and re-equipping people for the new industry that we hope will come to the area.
In order to deal adequately with the restructuring of British Leyland and with the problems of people leaving that industry and going into others, there must be growth. There is little human point in restructuring the car industry and producing a profitable enterprise if, at the end of the day, we double, treble or even quadruple unemployment. We must ensure that the restructuring of British Leyland goes ahead in as planned a way as possible. We recognise that there will be some unpalatable effects, but we must ensure that retraining facilities are made available, that growth within the economy takes place, and that alternative jobs are made available.
I do not expect the Ministry to make any dramatic announcement today about the West Midlands. We in the West Midlands are not being over-selfish in pointing out our problems to the Government. We do so in the interests of the economy as a whole because we know that if we, as the heart of industrial Britain, do not prosper, no one will prosper.
Although what I have said today may appear to have been rather selfish coming from a region that has known fairly high levels of employment over the past 15 years, I have presented the case in a spirit of wanting Britain's industry to prosper—not in a carping spirit, but in a constructive spirit, hoping that the Government will come forward at the earliest possible moment with positive proposals to help us to restructure industry and to modernise it within the West Midlands and, in so doing, make a positive contribution to Britain's economic recovery.
3.16 p.m.
Mr. Hal Miller rose—
Mr. Deputy Speaker (Mr. George Thomas): I understand that the Minister agrees to the hon. Member having three minutes of his time.
Mr. Miller: I am grateful to the hon. Member for Birmingham, Northfield (Mr. Carter) and to the Under-Secretary for

1897
their courtesy and co-operation in allowing me a few valuable minutes to raise a subject of particular importance to West Midlands industry about which I know they share my concern.
I speak of the motor cycle industry in the region and the announcement made this morning by the Chairman of NVT that a decision was needed from the Government by the end of July about the injection of additional capital of £30 million to £40 million into this industry, otherwise it would have to go on to short-time working and face redundancies. A number of shop stewards were in touch with me this morning to express their concern.
I realise that this is not the Under-Secretary's speciality and I do not expect a concrete reply from him this afternoon. However, I urge that at the earliest possible opportunity after the recess a statement should be made and we should have a chance to debate this very important issue, because the fears which I voiced as long ago as 20th December 1974 in another Adjournment debate and which were repeated in a debate on the motion relating to finance for Norton Villiers Triumph on 5th March have proved to be only too well founded.
Those fears were that the encouragement of the Meriden project—I do not speak of its merits or otherwise as an experiment—has resulted in danger to the jobs of others working in the motor cycle industry. It has necessitated the investment of an additional £30 million or £40 million of public money and it is based on market assumptions which as long ago as December I said were optimistic and which have now been proved to be wildly optimistic.
There is, therefore, very real concern, and I should be grateful if the Minister would assure us that this has been taken on board by the Government and that there will be an opportunity to discuss the matter in the House.
3.18 p.m.
Mr. Reginald Eyre: I intervene briefly in this debate, because of the very tight limitation on time—
Mr. Deputy Speaker: Has the hon. Gentleman reached agreement with the Front Bench speaker?
The Under-Secretary of State for Industry (Mr. Gregor Mackenzie): Just for one minute.
Mr. Eyre: I intervene to say how much I welcome the fact that the hon. Member for Birmingham, Northfield (Mr. Carter) has raised this subject today. The hon. Gentleman was right in saying that the concerns to which he referred are shared on both sides of the House. The reports which have been prepared locally and to which the hon. Gentleman referred merit serious and urgent study by the Government.
There is not time for me to add to what the hon. Gentleman said about the background to the problems. The Birmingham Chamber of Industry and Commerce, which is highly experienced in these matters, has expressed great concern about the future. It is clear from the latest unemployment figures that that concern is well merited.
There is anxiety also about the growing obsolescence in parts of industry in the West Midlands, because, as a result of Whitehall controls, there has been a tendency for the new science-based industries to be diverted to other parts of the country.
I support many of the points made by the hon. Member for Birmingham, Northfield (Mr. Carter). Some of the Government taxation policies and many of their legislative measures cause considerable worry to people conducting commerce and industry in the West Midlands, because they believe these policies and measures will damage the capacity of their businesses and, therefore, the provision of jobs in the future. These doubts and fears are felt particularly strongly by the small and medium companies which make such a valuable contribution to the West Midlands economy.
I hope the Minister will indicate that the Government understand the apprehensions which are developing in the West Midands, that he appreciates the tremendous contribution which this region can make to the prosperity of the country, and that he will take very serious account of the points which have been put to him.
3.21 p.m.
The Under-Secretary of State for Industry (Mr. Gregor Mackenzie): We are

1899
all indebted to my hon. Friend the Member for Birmingham, Northfield (Mr. Carter) for having initiated this debate on a matter which I know is of great concern throughout the West Midlands.
I assure all hon. Members that the Government are very well aware of the problems which the region is facing at the moment, and we certainly take on board all the points which have been made in the debate. If I fail to answer all of the matters which have been raised, I assure hon. Members that it will not be due to lack of courtesy on my part. I shall write to hon. Members and, indeed, I shall be happy to see any of them at any time in order to discuss these matters at greater length.
My hon. Friend properly pointed out that the area has for many years been heavily dependent upon metal-using industries, such as engineering and motor car manufacturing, both of which industries are going through a very difficult period. I think this is one of the reasons which prompted my hon. Friend to raise with me the question of diversification of industry in the West Midlands.
If I may remove my ministerial hat for a few seconds and speak as an ordinary Member of Parliament who represents a Clydeside constituency, as does my hon. Friend the Under-Secretary of State for the Environment, the Member for Glasgow, Kelvingrove (Mr. Carmichael), who is present, I should like to say that we are both very conscious that we on Clydeside were for so long dependent on heavy engineering, shipbuilding, steel making and so forth, and that it was our desire to ensure a degree of diversification.
I hope that the National Exhibition Centre, which I saw from the train when I was going through Birmingham last week, will be a long-term venture and will prove to be of value in creating this kind of diversification and in bringing some new service jobs into the West Midlands. Nevertheless I know that the engineering and motor manufacturing industries have formed the basis of prosperity of the area, and I hope that they will continue to play this active rôle which is valuable not only to the West Midlands but to the country as a whole.
1900
My hon. Friend, as did other hon. Members referred to the West Midland Metropolitan County Council's Report "A Time for Action", and I know that the planning board has been studying the situation in depth. We are all grateful to the board for the study that it has undertaken, and I give the categorical assurance that the results of this work will be given the most careful consideration by the Government.
In the report, and at various times when I have been in the West Midlands, it has been represented to me that we should modify our IDC policy and grant assisted area status to the region and promote the area to attract new industry. I sympathise with all of these points, but, as we all know, there is a very limited supply of mobile industry available, and in promoting industrial development we must concentrate our assistance on those areas where unemployment is very high—in Scotland, South Wales, the North-East and so forth. However, that is not to say that we shall neglect the problems of the West Midlands.
My hon. Friend was particularly concerned about the lack of investment in the West Midlands and the United Kingdom generally. One of the reasons for the current unemployment rates referred to by the hon. Member for Hall Green (Mr. Eyre), is that there has been a failure by the private sector to invest as much as we would have liked, although I do not expect to carry Conservative Members with me on that point. Over the past decade private enterprise has failed to invest sufficiently which is why at two successive General Elections we canvassed the notion that we are now putting forward in the course of the Industry Bill Standing Committee. It is because we believe that the Industry Bill is so important for investment that we are anxious to have it on the statue book as quickly as possible.
My hon. Friend asked whether the Industry Bill when enacted would be used only in the assisted areas. On Second Reading of that Bill my right hon. Friend the Secretary of State for Industry sought to draw special attention to the need for increased investment in the engineering industry in the West Midlands. Once we have the National Enterprise Board and the planning agreements system, we shall have much wider powers

1901
to stimulate investment throughout the country and we shall get a very much better understanding of the problems facing industry in areas like the West Midlands in the course of contact with those companies.
My hon. Friend, like other hon. Members, has been concerned about the situation of British Leyland. I was present the other day to hear their speeches and I hope that the measures we have taken over the past few days will be of considerable help not only to the motor manufacturing industry but to the West Midlands generally. I do not think we can take the substantial investment in British Leyland in isolation. Much of the money which will be spent by British Leyland will go to British manufacturing firms, particularly the small firms, and I am always interested in that aspect of the matter because it is one of my particular responsibilities in Government.
One of my hon. Friends said in the course of the British Leyland debate that it was important that that company should buy British. Of course, it is up to British Leyland and other British companies to buy British components and I hope very much that that will happen. This is a question for the components industry and the machine tool industry, both of which are so important in the West Midlands.
There has been reference to the motor cycle industry. I am conscious of the importance of this matter, although I cannot pretend to have any specialised knowledge of it, as could one of my colleagues in the Department. However, if it employs 3,000 people it is important. My right hon. Friend the Secretary of State is much concerned about it. He has invited representatives of the industry in the West Midlands to have discussions with the view to reviewing the situation. In addition to representatives of my Departments, representatives will also be present from the Norton Villiers Triumph management and the Meriden co-operative. The Department is already involved with the motor cycle industry, its problems and its prospects, and we have commissioned services and consultants, and a multipartite review will be taking all these matters into account.
My hon. Friend was concerned about training, retraining and employment
1902
prospects for young people in the West Midlands. There are four skillcentres in the region and two new centres are to open this year, making a total of some 1,500 places. In addition, 120 trainees are under training in employers' establishments and another 1,200 are taking part in courses in colleges of further education. Since we are all conscious that these days there is this great need for training and retraining as the industry changes its pattern, my hon. Friends in the Department of Employment will be constantly watching this point, especially in the West Midlands and areas like it.
Mr. Deputy Speaker (Mr. George Thomas): Order. The time allocated for this debate has been exhausted. The Minister is now taking up the time of the next debate.
Mr. Mackenzie: I apologise, Mr. Deputy Speaker. I shall conclude by stating that I take on board the points which have been raised. If I have failed to answer them all, I shall certainly deal with them in correspondence with my hon. Friend.

HOUSING (LONDON)
3.30 p.m.
Mr. Ivor Stanbrook: The problems of the West Midlands, great though they are, must give way to the serious problem of unoccupied houses in Greater London. I venture to raise this matter with the House because it is growing greater as time goes on. According to the 1971 Census, there were 99,730 vacant dwellings in Greater London on census night. The Greater London Council's strategic housing plan of 1974 stated that the number of empty houses in Greater London had risen from 1·6 per cent. to 4 per cent. of the total housing stock over that period.
It follows that the problem is getting worse, and the system is not in any way curing it. The reasons for houses being empty are varied. There are several classes into which the houses fall. First, there are the newly-built or newly-converted houses which are awaiting purchasers or tenants. The problems which these houses raise reflect more questions of house purchase, mortgages, interest rates and the general state of the country

1903
than anything else about which the Government can take action.
The second class involves property designated for demolition and for local authority redevelopment. These houses fall into the class of vacant housing, which has become a scandal in Greater London. It is something which, equally, because of the economic condition of the country at present, has resulted in the problem being tackled less and less successfully, not because of unwillingness on the part of the councillors. However, when a house owner or a tenant of a house in an area which is scheduled for redevelopment by a local authority knows that he is to be rehoused or moved, or that his house is to be compulsorily purchased, clearly the tendency is for him to get out as soon as he can find suitable alternative accommodation elsewhere. The result is to maximise the time during which a property may be empty while demolition or redevelopment is taking place. A large number of houses are standing empty in different areas of Greater London for this reason and there is an apparent inability on the part of local authorities to fill them. This has led to the problem of squatting.
I acknowledge that some progress has been made in giving legal responsibility to arrangements with squatters' associations under which there can be a form of "official" squatting. The Guardian estimated on 6th July 1974 that the number of houses so occupied by "official" squatters was 4,000. However, when we consider that there are approximately 100,000 vacant dwellings in London—a figure which, incidentally, is just about the total estimated number of homeless people in the whole of England—we realise that there is a great deal of scope for improvement. We should provide more temporary and short-term arrangements to fill houses which are in perfectly good condition to deal with the short-term housing of homeless people.
The third category of houses are those which are privately owned and rented, and which are awaiting demolition, or conversion into flats for sale. The process of emptying them is inevitably slow. Individual conversions, which are often dependent upon planning consents being obtained, are inevitably slow, and are getting slower. The bureaucratic machine
1904
for dealing with these matters is getting clogged and is dealing less and less efficiently with the proposals made by private owners for large houses to be converted into flats, thus providing more homes for people needing them.
This is, I am afraid, often inevitable. In the case of a large block needed for redevelopment it is a matter of waiting for the last tenant to move out, thus gradually seeing the whole place become empty, and many places that could be used as perfectly good homes are unoccupied meanwhile. There is a great deal of scope here for progress to be made and for avoiding that very depressing spectacle, which many hon. Members of constituencies in the London area find, of houses remaining empty, gradually deteriorating and being vandalised, so that ultimately they cannot be used for housing purposes at all. In Orpington there are two such houses in the road in which I live. They were originally very good houses, occupied until the people who sold them moved out. They are subject to redevelopment, and they deteriorated to become buildings which could no longer be occupied for housing purposes.
Then there are the houses which remain empty, unoccupied, because their owners, not being owner-occupiers, have been frightened by rent control, and, in particular, by the Rent Act of 1974, into leaving them empty rather than putting tenants in them of whom they might not approve, who might not pay the rent, and whom they could not get out because of the law. Rent control generally is the cause of the whole housing problem. It has probably been a greater cause of homelessness in this country than any other single factor. I wish that Members of the Labour Party would realise this and not press on constantly in their desire to control rents, to depress them to such uneconomic levels that it is no longer possible, quite apart from desirable, for private individuals and private companies to build houses for rent.
A Press notice issued by the Department of the Environment on 7th February refers to a recent speech by the Minister for Housing and Construction:
"The solution to the problem of empty housing and the homeless could not be found

1905
in short-term leases but by working through a local authority or housing association. He"
—the Minister—
"also stressed the need for local authorities to start work immediately on surveys of the use of all the housing stock in their areas."
That is a rather typical example of the approach of this Government to the problem. A good idea suggested by my hon. Friend the Member for Kensington (Sir B. Rhys-Williams)—short-term tenancies—was the object of this criticism by the Minister, but it is something that deserves consideration. Referring the whole question back to the councils for yet another survey will not get us any nearer to a solution of this problem.
I have no brief for those private owners of property who keep them empty for personal and private reasons. They do so knowing full well that they may have to pay rates on them, and they take it on their own responsibility to do so. But there remains the problem of under-occupation of large houses by single remaining members of families which formerly fully occupied them. There are many such examples in my own constituency. Large houses, with six or seven bedrooms, in the occupation of the last remaining member of the family—very often an elderly widow or spinster who has no money to convert them or to buy a property elsewhere, and certainly no encouragement to try any such change.
The result is the run down and deterioration' of the whole property' when what is needed is encouragement and co-operation to assist in its conversion, so that the present owner may continue to live in it and at the same time have the satisfaction of knowing that he or she is providing accommodation for other less fortunate members of the community and also, perhaps, deriving a small income from the rents.
The main problem to which I wish to draw attention is the number of houses kept empty by the sheer bureaucratic indifference of many authorities, including the Government. I draw attention to two cases involving constituents of mine, which illustrate the problem.
Mr. and Mrs. Cowen, of Petts Wood, are an elderly couple who for many years have owned a house in the London borough of Wandsworth. They let it,
1906
subject to rent control, at a small rent to a single person who died four or more years ago. The owners then wished, naturally, to sell their property, only to discover that their tenant, some time before, had sub-let the upper floor without their knowledge and consent. They were advised that they could not get this person out without a court order, and that they were unlikely to get that. They were offered the existing rent that the sub-tenant was then paying, which was only a few shillings. The result is that most of the house has remained empty since then, in an area of acute housing shortage and an area in which the local council has made much, recently, of its acute problems of housing shortage. The council has declined to purchase the property, because it is not being offered with vacant possession. Meanwhile, here is a practically empty house available to the local council which could accommodate a small family but which is not being used.
There is another and perhaps more serious aspect of the problem. It has caused some people to be homeless. At least six properties in one ward in my constituency are empty because, by the planning consent which was given when they were built or converted, they may be occupied only by agricultural workers. The number of agricultural workers in Orpington is not large, and most of them are housed adequately already. There is no demand for the houses concerned, despite extensive advertising with local estate agents, but there is a big demand for houses from city workers and other people desiring them in the constituency.
One such case has made a family homeless. Mr. Richard Knox-Johnston, a brother of the world famous sailor, lived with his family, including two children, in a house adjacent to his parents' family home, which stands in its own fairly extensive grounds and garden next door. The smaller house was converted from a dairy in 1968, and the planning consent given for the conversion stipulated that it should be occupied by the gardener of the larger house.
Mr. Knox-Johnston, senior, died in 1970. The family circumstances changed. The larger house was converted into flats and, in 1970, Mr. Richard Knox-Johnston came to live in Dairy Cottage with his family, having given up his Army career

1907
to do so. But no one could afford any longer to employ a gardener, and Mr. Knox-Johnston's occupation of Dairy Cottage was therefore in breach of the planning consent. Incredibly, an application to remove the restriction was rejected by the local planning authority, as was the appeal against the decision by the inspector who acted on the Minister's behalf. So a young family were made homeless—by order, in effect, of the Minister. A perfectly good house is unoccupied, by order of the Minister.
When I raised the case with the Minister privately by correspondence, he said that the planning procedures had been gone through, the appeal procedure had been gone through, and he had no power to intervene. Yet it remains a fact that the house is a perfectly good one and could house at least one family of homeless people. As the result of the actions of the bureaucracy, one family, in effect, has been evicted.
I wonder whether the Minister knows how foolish his Department appears to the people concerned when decisions of that kind are taken. I suggest that a special unit ought to be created in the Department to deal with unoccupied houses to cut through the bureaucratic jungle which causes personal tragedies like this and makes a mockery of the Government's expressed feelings about homeless people and the housing shortage.
3.46 p.m.
The Under-Secretary of State for the Environment (Mr. Neil Carmichael): I am glad that the hon. Member for Orpington (Mr. Stanbrook) has raised the topic of empty houses in London. I should like to speak on the broad subject before turning to the particular class of problem to which he referred in detail. It is an important subject and for that very reason it must be seen in its proper context.
The sight of dwellings standing empty is only one symptom of the general problem of how to match a varied and changing housing stock as new dwellings are built and others grow old to a varied and changing housing need.
The hon. Gentleman referred to the example of the large house from which the family gradually drifted. I think that
1908
point is taken here. For example, as my Department pointed out in the circular "Housing: Needs and Action", households are now, on average, much smaller. More than half of the households in the country are now of one or two people and clearly there is difficulty in matching this need to a stock which generally consists of comparatively large dwellings. Other symptoms of this difficult problem of matching needs to resources are homelessness, including the single homeless, squatting and the long lists of families who have applied to the London boroughs for help in housing. It would be wrong, therefore, in discussing the numbers of empty houses in London, to imagine that the solution lies in a narrow approach.
Let us first look at the figures. Empty houses represent only a small proportion of the London housing stock. Of course, as the total stock is so large—over 2½ million dwellings—even a small proportion inevitably amounts to a sizeable number.
The 1971 census gave a figure of just under 100,000 empty dwellings in Greater London, of which 9,000 were new units not yet occupied. The census included houses in the process of being let, sold, converted or improved or which were awaiting clearance. All dwellings were included in this count if, for any reason, they appeared vacant to the enumerator at the time he visited the property. Even so, the total figure was still only 3·8 per cent. of London's housing stock.
There are some more recent figures. Returns to an inquiry carried out for London Boroughs Association in April 1973 showed that 51,400 private hereditaments had been empty for three months or more and that about 1 per cent.—something over 5,000—of borough council dwellings were vacant at the time. The latter figure agrees with my Department's own survey results, which showed that on 31st December 1973 there were 1 per cent. of local authority dwellings vacant and available for letting.
Overall, bearing in mind the differences in definition for different surveys, incomplete returns and inevitable errors, the general picture seems to be that there might be some 50,000 to 60,000 dwellings empty in London over any significant period.

1909
Let us look at why dwellings are left vacant. For a start, while I said that the total of vacant dwellings in London amounted to less than 4 per cent., it is true that this proportion of the London housing stock could house a great number of people in housing need—if, and only if, those empty dwellings were fit and available for occupation, and I think we shall find that relatively few of them are.
In the public sector, the proportion of dwellings empty at any one time is, as I have said, about 1 per cent. Of course, the public sector accounts only for about 27 per cent. of dwellings in London, so we can immediately refute the accusation that half the empty dwellings in London are owned by local authorities. That is frequently said. The public sector is always concerned to keep its stock as full as possible with rent-paying tenants. It is an obvious common sense approach in budgeting, quite apart from local authorities' duties and, I am sure, desires to provide housing for those in need.
There has been considerable progress with minimising the turn-round time for council tenancies. Computerisation of rent rolls has led the way to the use of automation to help in allocating dwellings which fall vacant. We in the Department look to local authorities to push further ahead, in using these and allied techniques, to make the fullest possible use of their stocks.
While dealing with the inevitability of a certain number of dwellings being empty while they change hands, I remind the House of the considered view of the Standing Working Party on London Housing, which reported in 1970 that in the case of London there was a need for a vacancy reserve of 5 per cent. in Inner London and 4 per cent. in outer London, which is a total of 116,000 vacant dwellings, 4·4 per cent., to allow an adequate degree of mobility, excluding dwellings empty for repair, demolition or for any other reason. That is a high figure.
Mr. Tony Durant: On the subject of clearance, does not the Minister agree that one of the problems is that the Ministry takes so long to make planning decisions in relation to clearance that councils are often left with vast
1910
amounts of council or private housing with which they cannot deal because it is left empty? It causes tremendous aggravation to the local community, and the housing stock is damaged while the decision is awaited.
Mr. Carmichael: Planning permission involves some delay. One of the problems is that the more we involve people in planning decisions, the longer the delay. Wearing my other and perhaps more familiar hat, as regards roads there is delay because people are involved. The Conservative Government noticeably extended the participation of local people in planning, which meant yet further delay. If we give people time to think of the alternatives, there will be delay and blight in some areas.
Mr. Durant: I emphasise the delay between the inquiry taking place—we agree we want maximum participation—and the result of the inquiry being made known.
Mr. Carmichael: I have a fair amount of experience of this problem. If the inquiries are to be thorough they will last a long time. It takes a long time to produce the reports. For example, the inquiry into the M16 has continued since last November. We cannot expect the inspector to do his job thoroughly and to write his report in a week. We expect the inspectors to take time in which to investigate thoroughly, visit sites and write their reports.
I often wish we had a General Hausmann, who took all the decisions himself. In that case we would obtain the benefits of what General Hausmann did in Paris. The Parisians of the period were not happy about the high-handed way in which he bundled them out of their houses. He told them that he intended to build an avenue. They were not allowed to participate in the planning. There are extremes. We try to have the reports published as quickly as possible compatible with the expression of local opinion on what should happen in the area. We could hold a long debate on this subject. If the Labour Party were in opposition it would also be impatient with and criticise the time it times to get decisions.
Turning to dwellings which are not simply empty between owner-occupiers

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leaving and others moving in, we come to what we consider to be the hard core of the problem. For England and Wales, the 1971 House Condition Survey showed that 76 per cent. of vacant properties had been built before 1919 and that 40 per cent. of the vacancies were unfit. It is inevitable that these proportions are even higher for London where there is a higher than average proportion of older dwellings, and higher still in Inner London where the proportion of older dwellings is higher than for London as a whole.
The picture in this sector is therefore not of vast numbers of empty dwellings awaiting occupation but of a number of old, decayed and even unfit houses which need considerable attention before they can be brought into use.
Action on improving these dwellings must be speeded as much as possible. We are in no doubt on that score, and my right hon. Friend is taking steps to see that this is done. While decisions are being taken and plans prepared, maximum use must be made of any dwellings which can be used. My hon. Friend, the Minister for Housing and Construction, replying to my hon. Friend the Member for Holborn and St. Pancras, South (Mrs. Jeger) on 25th February this year, mentioned scope for ad hoc arrangements between private owners of empty houses and local authorities or housing associations; use of short life property for homeless families; schemes for authorities to manage properties for large private owners; conversion of larger houses in the public sector; and a rapid repairs service.
These are among a number of possibilities being incorporated in a formal consultation paper about the better use of the existing housing stock. This paper will incorporate ideas already gleaned from discussions with bodies such as the Institute of Housing Managers, the Housing Corporation, the Greater London Council and the London Boroughs Association, plus those measures which have already been studied since February on the question of how much empty housing, even in short periods, can be put to use for the homeless. The problem will then be discussed with the local authority associations and with representatives of
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private owners—for example, the British Property Federation.
In this approach, our plan is not merely to make heavy inroads on the numbers of empty dwellings in London but to improve the match between stock on the one hand and need on the other—not to concentrate on the bricks and mortar but to provide for the homeless, for the smaller households and for all those in housing need.
The hon. Member raised a particular constituency case, relating to the policy of local planning authorities in restricting the occupancy of certain dwelling-houses by imposing a condition limiting the occupation to an agricultural worker. He suggested that this could lead to the creation of a further empty dwelling.
I know that the hon. Gentleman has been in touch with the Department on this subject and that there has been some correspondence. I am sure he is aware that where such a condition is imposed but the owner considers it is no longer justifiable, he may apply to the local planning authority to have the condition removed. In the event of a refusal he can appeal to the Secretary of State. But the condition will not normally be removed unless it is shown that the long-term needs for dwellings for agricultural workers on a particular farm or in the locality no longer warrant reservation of the dwelling for that purpose.
In the case of the hon. Gentleman's constituent the inspector who dealt with the appeal obviously did not agree that this criterion had been met. But if the constituent feels at some future date that circumstances have changed sufficiently to warrant a further application, there is no reason why she should not apply again to the local planning authority. There would be a still further right of appeal to my right hon. Friend.
Mr. Stanbrook: But the person concerned is now homeless. He cannot apply at some future time—he does not live there any more.
Mr. Carmichael: The owner can still apply to have the condition waived. Since there was an appeal to an independent inspector, we must assume that there was some substance in the decision that was handed down.
It being Four o'clock, the motion for the Adjournment of the House lapsed, without Question put.

HOUSING (LONDON)
  ADJOURNMENT
  Motion made, and Question proposed, That this House do now adjourn.—[Mr. Thomas Cox.]

NORTH SEA OIL AND GAS INSTALLATIONS
4.0 p.m.
Mr. Cyril D. Townsend: I wish to draw attention to the problems of policing Britain's offshore energy resources. The strategic importance of oil, natural gas and the many and varied resource installations in the North Sea is obvious. Our economy is more energy-dependent than ever. In a few years Britain hopes to be exporting energy and gaining thousands of millions of pounds a year for the balance of payments.
What is the threat? Essentially, we are considering cold-to-warm war rather than hot or nuclear war. Oil and gas installations are vulnerable to four main types of attack. The first is sabotage by an employee or terrorist who infiltrates the crew. The second is a take-over by a well-organised terrorist group. Thirdly, there is the possibility of underwater attack by a frogman or submarines. The fourth main threat is that of full-scale attack by a hostile Power.
Bomb threats against rigs have been made by Scottish so-called patriot groups. Twelve were made in eighteen months against one oil platform construction company. Increasingly, extreme political groups resort to sabotage and hijacking in Britain and throughout the world.
We are discussing the only oil rigs in the world that are placed in an area of high strategic value and within a concentrated military operational area—NATO's northern flank and the forward battle area of the Soviet northern fleet. On three occasions in the past year Russian ships or submarines have come dangerously close to our oil rigs. They have come within the 500-metre safety zone set up by the Government to protect the rigs. As recently as the end of February there was a complaint that a North Sea gas
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platform off Hull was being harassed by Soviet trawlers. Early in April a Whisky-class submarine surfaced near a rig in the Orkney area, and was joined by an intelligence-gathering vessel. An hour later a Kotlin class destroyer was reported to be closing in on the Neptune 7 rig near by. Present arrangements clearly fail to provide any deterrent to Soviet forces carrying out their intelligence-gathering activities.
The Government's proposals, outlined to the House on 11th February, for the defence of our North Sea oil and gas installations—we should be thinking in the future of about a hundred, scattered over 400 miles—have been widely criticised by independent defence experts. In replying to me on 11th March, the Minister of State for Defence denied this. If the Minister wants me to support my charge with my Press cuttings file, I shall gladly do so.
Faced with the possible threats that I have outlined, the Government have given an inadequate and minimum response. I accuse them of over-relying on North Sea oil while under-defending it. They must think again. They are planning little more than a patrol and surveillance exercise.
When the oil starts flowing through the North Sea pipelines in a few weeks, only two ships will be guarding Britain's present 34 oil rigs and production platforms. One is a 30-year-old tug saved from the scrapyard. The other is an elderly fisheries protection vessel. Both are smaller and slower than the largest of the Icelandic gunboats that harassed British trawlers during the cod war. It will take them nearly a day and a half to sail from the most southerly of the 24 platforms producing North Sea gas off the Wash to the most northerly oil rig.
Even when the Government's full programme, involving five ships, comes into operation in 1977, it could still take the nearest ship 10 hours to reach the scene of an incident. The five new 900-ton ships are more like deep-sea trawlers than gunboats, having a top speed of only 16 knots and a 40 mm. gun. Amazingly, they will not be backed up by a helicopter force. It is by no means clear how a determined terrorist attack will be handled.

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We cannot be satisfied either with the planned communications. An excellent article in The Sunday Times of 11th May stated:
"A distress call from a rig might not be heard at all. Calls are broadcast on the radiotelephone frequency 2182 kiloHerz, which is subject to regular interference. The Radio and Electronic Officers' Union says that even heavy rain can stop the signal getting through. The union also fears that emergency calls could be ignored because of the number of false alarms. In 1969 there were 550 false transmissions of the international distress signal on 2182 kiloHerz."
If that is not bad enough, the installations come under police jurisdiction and the police rôle in the event of a major guerrilla attack was recently described by the Scottish Office as a grey area. A spokesman said:
"The responsibility would lie with neither the police nor the Army alone. The co-ordination of the two would be rather difficult."
I understand that a Royal Air Force patrol of four aircraft is being considered. Perhaps the Minister could say whether Nimrods will be used or the slower Andovers. The Minister may claim that RAF Sea King helicopters based at Prestwick will be available. If so, will he confirm that they could not reach the furthest rigs without refuelling?
It will be an expensive and complicated task to provide a more adequate defence of these vulnerable but vital installations. But it must be done. We cannot afford not to do it. The Government must demonstrate the capability of responding effectively to all types of threat and the determination so to act.
I will make a number of recommendations. The problem must be seen in a NATO context. A serious threat by the Russians would require an American carrier force to move into the area. NATO must consider all the present and planned installations bordering the North Sea, including Norway's. It is likely that Western Europe as a whole will become more and more concerned with the bringing ashore of North Sea energy resources in future. I trust that such matters will be the essence of the talks at The Hague on 5th June.
The Government must appoint a British admiral to have overall responsibility for the security of our installations. A senior police officer should serve alongside him
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and a joint operations room should be set up. This new command should assume responsibilities for such matters in the area as fishery protection, risks to offshore personnel, including search and air-sea rescue, navigation and pollution threats. It would give attention to the risk of accidental damage to installations by drifting vessels or storms—we heard only this morning that some of the rigs are getting on in age—and generally keep an eye on commercial activities and the enforcement of Government regulations.
Naval ships and naval helicopters should operate in the area. I should like to see fully-armed hydrofoils being used and commend an article in Navy International on 5th February for study by the Under-Secretary of State. Serious consideration should be given to having a small force of Royal Marine commandos with helicopters based on the East Coast of Scotland and ready to fly out to deal with any major incident. Thought should be given to laying seabed mines which could be activated from the shore. Communications must be reorganised and radar and sonar surveillance extended.
The Government's proposals do not match the level of the likely threats. The Secretary of State must obtain more realistic funds for defence purposes. I am convinced that a defence-conscious Government could and should provide a more comprehensive defence of Britain's economic life blood.
4.10 p.m.
Mr. Antony Buck: It is wholly appropriate that in the last few minutes before Parliament dissolves and we go to our constituencies to consider a matter of momentous importance, the last few words in this Session of Parliament should be about a problem of almost similar importance.
The whole future of Britain depends upon our having a flow of oil from the North Sea by the 1980s, which will, we hope, render us self-sufficient in oil. At present, my economic friends tell me that our oil deficit is about £2,500 million per annum. Our economy is already strained to the point of breaking, and all our plans for the future will come to nothing if there is a disruption in the flow of oil. Our enemies will have noted this, just as we have in the House today. Therefore, the defence of our oil installations

1917
in the North Sea and in the other seas about our shores is a matter of paramount importance. We are very much indebted to my hon. Friend the Member for Bexleyheath (Mr. Townsend) for bringing this matter to the attention of the House.
The response of the Government to the challenge which exists has not inspired very great confidence, to say the least. In the Defence White Paper, a document of about 125 pages, there is only one paragraph, on page 36, devoted to the defence of our offshore interests. That paragraph sets out, briefly, the response which the Government are making.
As my hon. Friend has pointed out, on June 5th a conference will be convened by NATO to deal with this matter. I am glad to see the Under-Secretary present and I should like to hear from him more about this NATO conference. It is wholly right that this matter should be brought to the attention of NATO. The House would like to know what level of representation we shall send to this conference. Will the Under-Secretary be present? If so, he will not go naked to that conference chamber but will go rather with a tug and armed with very few tokens to show that we as a country are taking this matter seriously.
We should like to know more about the conference on 5th June, what our representations will be, and whether the Under-Secretary is confident that the Government's response so far is adequate to enable whoever represents Britain to give a lead to the NATO response about something which, if not tackled, could cause the whole of the Western world to be disrupted, because the Western world, not only the United Kingdom, will be very dependent on the flow of oil from the seas around our coasts. We should like some information on this.
Would the Under-Secretary tell us about the rôle to be played by the Royal Naval Reserve on this matter? When I had the privilege of being Minister for the Navy, I set up an inquiry into the rôle of the Royal Naval Reserve partly because it has a real part to play in the defence of our offshore installations. Those installations need protection at two levels. They need sophisticated protection and relatively simplistic protection. They need "men on the beat" who are trained to deal with divers and saboteurs.
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The Royal Naval Reserve could well provide such coverage in and around the oil rigs.
Will the Under-Secretary make public the results of the inquiry set up by the previous Conservative administration into the rôle of the RNR?
The announcement about our having the maritime Harrier was made, rather surprisingly, a few days after the debate on defence. It is quite obvious that that decision had been made at the time of the debate. We shall never know why that decision was not announced then, but we have a shrewd suspicion that it was to prevent trouble being made by the Left wing of the Labour Party. Has the Harrier any part to play in this? Could there not be ships nearby which could operate the Harrier or be available as platforms, because I do not think that the Harrier could operate from the rigs themselves?
We should like to know more about the Nimrods that are available. We have also heard that Royal Marines will be available in support. Will they be specially trained? What additional resources are to be provided? What alteration in the training pattern of the Royal Marines is there to be? We know of the very high training standards applied by the Royal Marines. None the less, what additional facilities relative to training are there to be so that we can have a trained force ready to go in with Sea King helicopters or fast patrol boats?
Is there to be any rôle for fast patrol boats in the whole of this pattern of defence of our offshore oil rigs? Some of my hon. Friends spoke in the defence debate of the need for more fast patrol boats. At the moment we have one—HMS "Tenacity", which is working with the fishery protection force. There are other ships involved in training, but we do not have a class of fast patrol boats. Even those which are to be purpose-built for fishery and oil protection are rather slow.
A determined effort is needed by the Government to convince our NATO allies of the vital importance of the protection of our offshore oil installations, because the very future of our country depends on it. If the oil does not start flowing through in the 1980s, the economic situation, which at the moment is desperate, will be nothing short of catastrophic. We hope that the Government

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will give urgent attention to this and agree to a much greater deployment of resources than is now visualised. We hope that they will give a lead in NATO on 5th June when the conference takes place.
4.16 p.m.
The Under-Secretary of State for Defence for the Royal Navy (Mr. Frank Judd): The security of our North Sea oil and gas installations is a problem which attracts a good deal of attention. Unfortunately, I am afraid that it also gives rise to a good deal of misunderstanding. I am grateful, therefore, to the hon. Member for Bexleyheath (Mr. Townshend) for giving me this opportunity to clarify the Government's policy, particularly where it relates to the employment of the Armed Services. We fully recognise the need to ensure that all of our interests in the waters around our shores are safeguarded, particularly since by the 1980s we shall be virtually self-supporting in energy supplies and the offshore installations will become of even greater importance for our economy.
There is no room for complacency. I assure the hon. and learned Member for Colchester (Mr. Buck) that since this Government came to office the whole subject has been in the front rank of our defence priorities.
Various experts have put forward views on this matter. We have studied them all and, in view of the importance of all of them, we welcome their constructive criticism.
Security of the oil and gas installations is, first, the responsibility of the owner or occupier. This is a responsibility which these people take very seriously, and I cannot over-emphasise the need for diligence on their part.
I should, however, at the outset of my remarks, like to clear up a point which I think is at the heart of much of the misunderstanding on this issue. We must be careful to understand exactly what we mean when we talk about the Government's responsibility for the security of these installations. On the one hand, there is defence against possible attack by a foreign Power. On the other hand, quite separately, there is protection against terrorist action or hazard from accidental damage. This is an important distinction.
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The arrangements which are made for the defence of these installations from external attack form part of the general plans for the defence of the United Kingdom. These are, of course, fully integrated into the NATO plans and I am quite satisfied on this score.
It is, therefore, wrong to think that HMS "Jura", for instance, is somehow or other pitted against the whole might of the Russian navy. It is ludicrous to imagine that. The combined strength of our total Armed Services is available to meet this threat. For example, there are between 50 and 60 frigates available, some with helicopters constantly in attendance.
While on the subject of the Russians, I should like to remind the hon. Member for Bexleyheath that these installations are in international waters. Provided, therefore, that the Russians have proper regard for the safety of the installations, they have every right to sail on the high seas around them, and there is nothing we can, or indeed should, do to stop them.
Then, there are the matters related to the peacetime protection of our offshore interests. This was the subject of the statement by my hon. Friend the Minister of State for Defence on 11th February. HMS "Jura", HMS "Reward", the five new vessels which we hope to order shortly, and the four special RAF aircraft are going to be there primarily to meet these peacetime tasks. But, as I emphasised during the recent defence debate, these ships and aircraft will operate as an integral part of the Royal Navy and Royal Air Force. Response can thus be matched to need. The full resources of the Armed Forces are available to assist as required. That includes fast ships, sophisticated aircraft, helicopters and Royal Marines; and I can assure the hon. Member for Colchester that the Reserves will also have a part to play.
Mr. Buck: What part?
Mr. Judd: These peacetime tasks have existed from time immemorial. But they are growing. The fishery protection task has expanded, the problem of protecting the environment from pollution has increased and the exploration and exploitation of the Continental Shelf have added a new dimension to the task.
Mr. Townsend: Will the Minister allow me?
Mr. Judd: I want to deal with the points which the hon. Member raised.
In the past the Armed Services have, for the most part, been able to carry out these duties using resources made available to them for their primary responsibility of countering external aggression. This will, of course, continue to be the case. But there is one way in which the resources needed to counter the threat of external attack do not altogether meet the requirements of peacetime protection. This is the need for a standing patrol, the policeman on the beat—today in his "panda" car rather than on foot. Of course, we have ships and aircraft fully capable of undertaking this patrolling, but to use them would mean under-utilising their capability and taking them away from more important defence tasks. The Government have, therefore, decided to obtain a small number of ships, of which HMS "Jura" is the forerunner, specifically for this purpose, and to modify a small number of aircraft to carry out surveillance of offshore waters and to operate in conjunction with the ships.
What tasks do we expect the Armed Services to undertake in the peacetime protection of our offshore interests? In some ways I think public discussion of this subject tends to concentrate too much on the terrorist threat. This is not to say that I would regard such a threat as unimportant. There have been too many examples brought sadly to the attention of the world in recent years for there to be room for complacency. A terrorist threat is a particularly difficult one to discuss openly because details of the threat and the precautions we take, and which the owners and operators, the police and, indeed, other countries, take, obviously cannot be openly revealed. I am sure the hon. Gentleman appreciates that. Certainly prevention should be our aim, and here accurate intelligence cannot be too heavily emphasised. Within the general capability of the Armed Services lies much relevant skill and experience. I know that the hon. Member for Colchester is aware of this. There can be no absolute guarantees on such a matter. By its very nature terrorist activity is unpredictable. Over-structured plans could be counter-productive. They could be musclebound. What is essential is the assurance that all those with responsibilities
1922
recognise them and are aware of their individual and collective rôle and that a professional and flexible response is always available.
In some ways more worrying than the terrorist threat is the risk of accidental damage resulting from the very adverse weather encountered in the North Sea. The Convention on the Continental Shelf 1958 entitles the coastal State to establish safety zones around installations on its Continental Shelf and these zones must be respected by ships of all nationalities. The Continental Shelf Act 1964 brought the convention into force in the United Kingdom. The Continental Shelf (Protection of Installations) Orders actually designate the safety zones.
There have been in recent years several examples of ships and barges adrift which, in the past, would have caused no particular concern but which, with the possibility of collision with rigs, clearly raise a new problem including, in the last resort, the possibility of having to prevent a collision by sinking the vessel concerned. This poses formidable difficulties, both from the practical point of view and from the point of view of the legal and other implications of taking such action on the high seas. Procedures have been worked out and, obviously, this is a matter where the Armed Services would have a vital role, since many of the techniques which may need to be employed are not available to civil organisations.
The peacetime protection of our offshore interests is not a static problem and the Government have not arrived at a conclusion which it regards as holding good for all time. Indeed it is obvious that, with further sessions of the Law of the Sea Conference planned for next year, many of the pieces in the jigsaw of the offshore responsibilities of this country have still to be carved let alone put into position. There has been a good deal of speculation about the machinery of Government appropriate to the discharge of these responsibilities. There is obviously nothing immutable about the machinery of Government and if changes are necessary they will be made.
However, I can assure the House that there is very close co-ordination between the various departments and agencies involved. These include the Department

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of Trade, for maritime safety, navigation, search and rescue and pollution at sea; the Department of Energy, for matters associated with the extraction of our undersea resources, including the designation of safety zones around our installations and their standards of safety generally; the Home Office and the Scottish Office for police matters; the fisheries Ministries, and so on. However, as my right hon. Friend the Prime Minister announced last November, the Lord Privy Seal has been given special responsibility for the overall co-ordination between all these interests of protection measures.
As for the Armed Forces, the right steps have been taken both in the defence review generally and in the additional measures referred to in the statement last February to equip them to play their proper part in this important area, and I am confident that they will fulfil the growing responsibilities placed upon them with the same efficiency and dedication with which they carry out their many other and varied duties. I should like to emphasise that as a result of the defence review our maritime efforts will be concentrated as a first priority in the Eastern Atlantic and Channel areas and in the defence of the United Kingdom and its immediate approaches, and we shall, therefore, have sophisticated response forces available near to hand should they be required to back up the offshore patrols.
I visited an oil exploration platform in the North Sea only this week and was impressed by the general response
1924
of those there to the security arrangements and to the new measures which we have announced. As for the future, we shall naturally be continuously reviewing our arrangements. In particular in this context, the Dutch initiative to call a meeting of experts from North Sea countries is most welcome. This will take place on 5th June in The Hague. There are many matters related to the safe operation of North Sea installations in peacetime which need to be tackled internationally and which lie outside the responsibilities of NATO. I am hopeful that these Dutch-inspired discussions will lead to regional co-operation in the peacetime protection of oil and gas installations in the North Sea and elsewhere.
The hon. and learned Member for Colchester, from a sedentary position—and as an old friend I would not expect him to stand—has asked about the position of NATO in the context of this question. Perhaps I may re-emphasise what he knows well as a distinguished predecessor in my ministerial office—that NATO is there to defend the West against the external threat which we see present in the Warsaw Pact. An essential part of its ability to defend the West and its interests is the ability to deploy whatever is necessary, within the context of the alliance, to the defence of our interests in the North Sea.
Question put and agreed to.
Adjourned accordingly at twenty-nine minutes past Four o'clock till Monday 9th June, pursuant to the Resolution of the House of 13th May.

DEFENCE
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NORTHERN IRELAND
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EDUCATION AND SCIENCE
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  Mortgages
  Road Accidents
  Road Accidents
  Rate Support Grant
  Rate Support Grant
WALES
  Handicapped Persons
  Handicapped Persons
EUROPEAN COMMUNITY
  Jute and Coir (India and Bangladesh)
  Jute and Coir (India and Bangladesh)
  Canned Goods
  Canned Goods
  Hong Kong
  Hong Kong
  Foodstuffs
  Foodstuffs
FOREIGN AND COMMONWEALTH AFFAIRS
  Rhodesia
  Rhodesia
  Hong Kong
  Hong Kong
  Vietnamese Refugees
  Vietnamese Refugees
  Law of the Sea Conference
  Law of the Sea Conference
  Passports
  Passports
  UNESCO (Israel)
  UNESCO (Israel)
ENERGY
  North Sea Oil Installations (Safety)
  North Sea Oil Installations (Safety)
  Oil and Gas (Cornish Waters)
  Oil and Gas (Cornish Waters)
  Uranium Enrichment
  Uranium Enrichment
  Coal
  Coal
  Electricity Generating
  Electricity Generating
  Research
  Research
  British Petroleum Co. Ltd. (Burmah Shares)
  British Petroleum Co. Ltd. (Burmah Shares)
  Mineral Workings (Damage Compensation)
  Mineral Workings (Damage Compensation)
INDUSTRY
  Concorde
  Concorde
  National Enterprise Board
  National Enterprise Board
  Imperial Typewriters
  Imperial Typewriters
  Humberside
  Humberside
  Post Office
  Post Office
  Shipbuilding
  Shipbuilding
  Textiles
  Textiles
  Steel
  Steel
  Regional Development
  Regional Development
TRADE
  Steel
  Steel
  Films
  Films
  Concorde
  Concorde
  Cars
  Cars
  Oil Pollution
  Oil Pollution
  Sri Lanka Tea Estates
  Sri Lanka Tea Estates
  Taiwan
  Taiwan
  Heathrow (Noise Insulation)
  Heathrow (Noise Insulation)
  Typewriters
  Typewriters
  Footwear
  Footwear
  Investment
  Investment
  Ceylon Association
  Ceylon Association
  Tea
  Tea
  Textiles
  Textiles
AGRICULTURE, FISHERIES AND FOOD
  Denatured Foodstuffs
  Denatured Foodstuffs
  Bananas (Marketing)
  Bananas (Marketing)
  Agricultural Holdings
  Agricultural Holdings
  Badgers
  Badgers
  Butter and Cheese
  Butter and Cheese
  European Surpluses
  European Surpluses
  Food Storage
  Food Storage
  Whales
  Whales
  Prices
  Prices
  Tied Cottages
  Tied Cottages
  European Community Grants
  European Community Grants
  Fishing Subsidies
  Fishing Subsidies
  Beef
  Beef
  Wheat
  Wheat
  Milk
  Milk
  Frozen Fish
  Frozen Fish
  Forestry
  Forestry
  Tractors
  Tractors
  Sugar
  Sugar
  Drainage Rates
  Drainage Rates
  Prices, Duties and Levies
  Prices, Duties and Levies