Sitting of 27 November 1975

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

MOTORWAYS
Address for Return
of the Report by George Corderoy and Company to the Department of the Environment on the findings of an investigation into aspects of the measurement and financial control on the Gloucester—Cheltenham section of the M5, and the Report thereon by the Department of the Environment.—[Mr. Carmichael.]

ORAL ANSWERS TO QUESTIONS
  HOME DEPARTMENT

    Prisons (Rooftop Demonstrations)
    Mr. Stephen Rossasked the Secretary of State for the Home Department whether he is satisfied that all possible steps are taken at Her Majesty's prisons to prevent inmates from gaining access to rooftops in order to demonstrate.
    The Under-Secretary of State for the Home Department (Dr. Shirley Summerskill): Precautions are taken in every prison to prevent inmates from gaining access to the roof, and these are kept under continuous review. Any case where the precautions are found to be insufficient is specially investigated to see what further measures are necessary.
    Mr. Ross: I am grateful to the hon. Lady for that answer, but I am not entirely satisfied with it. Can she confirm that at the recent demonstration at Wormwood Scrubs prisoners got on to the roof by way of scaffolding, and can she also confirm that that was precisely the way in which prisoners got on to the roof at Parkhurst in my constituency a year ago? Does the hon. Lady not think that
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    further precautions should be taken? As this is an expensive exercise, with the throwing down of slates, which cost a great deal to replace, does not she think that prisons should be roofed with rather less expensive materials?
    Dr. Summerskill: It is the case that scaffolding was erected inside D Hall of Wormwood Scrubs for essential building work and that three prisoners used the scaffolding to break through the security mesh on a window which would not normally have been accessible. Although precautions will continue to be taken and new measures introduced when necessary, building repairs will still sometimes have to be carried out, and every effort will be made to see that this does not make it possible for prisoners to gain access to the roof.
    Mr. Lipton: Is my hon. Friend aware that short of having one warder to watch each prisoner for 24 hours a day it is impossible to guarantee that, now and again, something untoward will not happen?
    Dr. Summerskill: That is true. My hon. Friend is quite right, in that there is a great shortage of staff. Every effort is made to see that when building work is going on there is special surveillance of the prisoners. Special security measures are taken, such as seeing that all interior doors and doors giving access to the roofs of prisons are secured, and special wire is used to protect vulnerable areas.
    Mr. Maxwell-Hyslop: As scaffolding is not erected where it should be, and is erected where it should not be, and by using it prisoners gain access to roofs, will the Home Office ensure that in future when prisoners do gain access to the roof they are cleared off quickly, with fire hoses, instead of being allowed to remain there for a long time to do immense damage, for which taxpayers and not the prisoners themselves have to pay?
    Dr. Summerskill: In 1975 there have been only six incidents, throughout our prisons, of prisoners being on the roofs. The object is to ensure that there is no threat to security, and that there is no danger to the staff or prisoners. The practice of leaving the prisoner to come down voluntarily has proved successful in every case.

    Charity Commissioners
    Mr. William Hamiltonasked the Secretary of State for the Home Department when he expects to send an official reply to the Committee which reported some time ago on the work of the Charity Commissioners.
    Dr. Summerskill: We are studying the recommendations made in the recent report from the Expenditure Committee, but would prefer to defer our reply until we have also seen the report of the committee set up by the National Council of Social Services to study this subject from the standpoint of the voluntary organisations themselves.
    Mr. Hamilton: Does my hon. Friend appreciate that this was an all-party report, unanimously agreed to by the subcommittee and the full Expenditure Committee? It is clear, is it not, that there are considerable abuses within the charity field, not least of which is regarding public schools such as Eton and Harrow as charities? If there are to be cuts in public expenditure would not that be a good place to start, since it would save considerable sums of money for taxpayers at central level and for local ratepayers who have to foot half the rate bill for these expensive and exclusive educational establishments?
    Dr. Summerskill: I agree with my hon. Friend. This was a unanimous report, and a valuable one, with more than 20 separate recommendations, so it is important that we give it careful study.
    Mr. Steen: Is the Minister aware that her right hon. Friend could save many neighbourhood and community self-help organisations which are threatened with extinction as a result of the no-growth phase of local government expenditure next year, by supporting the setting up of non-profit-making voluntary bodies that would have the advantages of the financial awards enjoyed by charitable organisations?
    Dr. Summerskill: That is obviously one of the points concerning our whole examination of charity law which we shall take into consideration before we make final decisions.

    Deportees (Prison Conditions)
    Mr. Atkinsonasked the Secretary of State for the Home Department if he is satisfid with the conditions in prison of those awaiting deportation; and if he will make a statement.
    The Minister of State, Home Office (Mr. Alexander W. Lyon): In general, yes, although efforts are being made to improve them.
    Mr. Atkinson: Does my hon. Friend not agree that the time has come to draw aside the curtains which heavily veil this dark corner of our society, where men and women are whisked away for long periods and locked up either in Holloway or in Pentonville for up to five months at a time, without trial and without appeal? Should we not do something about this in order to gain much more respect for our kind of society and our way of dealing with such problems?
    Mr. Lyon: I am very concerned—I am glad that my hon. Friend shares the concern—about the amount of time that people spend in detention awaiting deportation while their cases are being reviewed, but one difficulty is that we take the most careful note of representations made to us, particularly by Members of Parliament, which frequently takes a long time. In the case with which my hon. Friend is most concerned—that which lasted five months—he knows that I investigated his representations at great length.
    Mr. Lane: To put the record straight after the wild question of the hon. Member for Tottenham (Mr. Atkinson), will the Minister confirm that great care is taken by those responsible, whether in Harmondsworth, Pentonville or Hollo-way, to see that, at a time when it is unavoidable for individuals to be kept in detention, conditions are made as civilised for them as possible?
    Mr. Lyon: I know that the hon. Gentleman will agree that it is difficult to describe the conditions in Pentonville or in Harmondsworth as civilised. I should like a situation in which we did not need to use either, but, as long as we do, we certainly do our best to make the situation tolerable.

    Terrorism
    Mr Arnoldasked the Secretary of State for the Home Department whether he is satisfied with the existing arrangements for co-operation between the police and security services in the hand ling of information received from the general public to combat terrorism.
    The Secretary of State for the Home Department (Mr. Roy Jenkins): Yes, Sir.
    Mr. Arnold: But it is not the case that outside the metropolitan area there is no formalised procedure? Does the right hon. Gentleman agree that a further extension of such co-operation to the regions would be in the public interest?
    Mr. Jenkins: I have no reason to think that such co-operation is not equally good outside the metropolitan area and within it. The formalisation of relationships is not necessarily always a guarantee of their success, but I should not wish to go further, because I think that the hon. Gentleman and others will recognise that it has long been a practice for the House not to have detailed discussion of security matters.
    Mr. Biggs-Davison: Is the right hon. Gentleman aware that we were very glad to hear the Under-Secretary of State say, last night, that chief officers of police would have all the necessary funds to reward those giving information about terrorism?
    Mr. Jenkins: I take note of what the hon. Gentleman says. What chief officers of police think desirable here will be available to them. I should point out that the point of view taken by the hon. and learned Member for Ruislip-North-wood (Mr. Crowder) is rejected strongly by nearly all chief officers of police.
    Mr. Peter Morrisonasked the Secretary of State for the Home Department whether he will bring forward legislation to reintroduce capital punishment for those who are found guilty of acts of terrorism.
    Mr. Roy Jenkins: No, Sir.
    Mr. Morrison: Is the right hon. Gentleman aware that there is respect for his personal point of view on this matter but that, due to the deterioration in the situa-
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    tion in this country, the overwhelming majority of people, including erstwhile abolitionists, believe that a return to capital punishment for terrorism is not just desirable but essential?
    Mr. Jenkins: It is in no way a question of my personal point of view. As it stands at the moment, it is a question of the decision of the House, taken, I believe, with great responsibility in the early aftermath of the worst of the incidents that we have had—the Birmingham incidents—and taken by a very large majority—[HON. MEMBERS: "No."]—that is undeniable—and taken, I believe, because the majority of the House took the view, as I still do, that this is not a matter in which one should allow old prejudices or traditional views to sway one. [An HON. MEMBER: "Why not?"] I should have thought that that was a sensible point of view. I was putting the point of view against any view that I had previously held. I believe that in present circumstances one should consider, in the hardest and most objective way possible, whether the return of the death penalty would reduce the danger from terrorism. It is my judgment that it would not so do.
    Mr. Christopher Price: Is my right hon. Friend aware that the recent quashing of the verdicts in the Confait case is an uncomfortable reminder that guilty murder verdicts in our courts do not always correspond to the truth and that this scandalous case should cause us to go slowly in returning to a penalty which is quite irreversible even if it is discovered that a mistake has been made?
    Mr. Jenkins: I know that some hon. Members believe that particular considerations apply to terrorist charges, but in the two periods in which I have been Home Secretary I have certainly had to deal with an uncomfortably large number of capital decisions in which there was doubt, or in which doubt was shown to exist. This is bound to give one cause for doubt about such an ultimate penalty.
    Mr. Fairbairn: Leaving aside the question of the death penalty, which involves immense difficulties regardless of the crime for which it is considered appropriate, will the right hon. Gentleman nevertheless give confidence to the public by invoking the fact that life imprisonment, which is the penalty prescribed under Section 3 of the Felony Treason Act 1848

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    as appropriate for these very crimes, shall be imposed in such cases and shall mean life imprisonment and nothing less?
    Mr. Jenkins: I shall certainly reiterate the words that I used a year ago and say that, while no Home Secretary and no Parliament can bind their successors, is is certainly my view that anyone imprisoned for life or for a long term for terrorist offences, who believes that life will be nine years or anything like it, or that an early amnesty is in prospect, is gravely mistaken. In my view, people who commit such crimes should expect to serve very long periods indeed.
    Mr. Gowasked the Secretary of State for the Home Department whether he is satisfied with the measures taken by his Department to combat terrorism.
    Mr. Roy Jenkins: Yes, Sir. The police are, of course, our main defence against terrorism, and they know that they have my fullest support in their efforts to combat terrorism and detect those responsible for terrorist outrages. As I said in the House yesterday, I am always willing to consider additional measures which are both practical and effective.
    Mr. Gow: Is the Home Secretary aware that many of us who are convinced abolitionists in respect of non-terrorist murder believe that murder by terrorism is a uniquely evil crime that requires a unique punishment? Secondly, in view of the widespread respect in which the Home Secretary is held in the country, will he consider making a ministerial broadcast urging on all the people the importance of giving the police any information which may assist them in tracking down terrorists?
    Mr. Jenkins: I note the views that the hon. Gentleman expressed in the first part of his question. He will know that he had an exchange on the matter earlier this afternoon. I do not think that there is anything that I can usefully add. As for the latter part of the hon. Gentleman's question, I made a ministerial broadcast a year ago, in the circumstances then prevailing. I would certainly always consider making another ministerial broadcast if I were persuaded that it would be helpful. I will, of course, consider the hon. Gentleman's proposal.
    Mr. Bates: Does not my right hon. Friend think that the use of capital
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    punishment in these circumstances would simply turn miserable murderers into martyrs?
    Mr. Jenkins: I deployed a whole variety of arguments to the House a year ago, and I shall deploy them to the House again, if necessary. My hon. Friend's point is, perhaps, one of the arguments which convinced me that we should exacerbate and not cure this problem by a resort to capital punishment.

    Firearms Control
    Mr. Scottasked the Secretary of State for the Home Office Department whether he will set up an inquiry into the workings of firearms control.
    Dr. Summerskill: The controls were examined in 1971 and 1972 by a working party under the chairmanship of the then Chief Inspector of Constabulary, whose findings were incorporated in the 1973 Green Paper, The Control of Firearms in Great Britain—Cmnd. 5297. We see no need for a further inquiry at this stage.
    Mr. Scott: Does the hon. Lady accept that although there was some controversy about the shotgun recommendations of that Green Paper it also contained a number of sensible and universally welcomed suggestions for tightening up firearms control and making the job of the police much easier? Is there any excuse for delaying this still further?
    Dr. Summerskill: We certainly see the need for some new legislation to control the situation regarding shotguns, but there are still many controversial matters to clear up and at the moment there is no parliamentary time for specific legislation.
    Mr. Farr: Does the hon. Lady agree that if a standing advisory committee were set up to advise the Home Office on firearms matters it could be doing a lot of useful work now? It could be receiving suggestions from the public, the police and other authorities, and it could pave the way for a better attempt at legislation the next time.
    Dr. Summerskill: An advisory committee might be indicated if new legislation were to give my right hon. Friend flexible powers to alter the way in which the controls operate. Then there could be continuing consultation with the

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    police and other interested bodies about the exercise of such powers.

    Legal Aid Applications (False Declarations)
    Mr. McCrindleasked the Secretary of State for the Home Department how many convictions were obtained for the most recently available year for the making of false declarations and other frauds to obtain legal aid.
    Mr. Alexander W. Lyon: I regret this information is not available: the criminal statistics do not distinguish frauds in relation to criminal legal aid applications from certain other types of fraud.
    Mr. McCrindle: Is the Minister aware of the very real disquiet which has suddenly become evident among the public in this matter? Does he understand that some members of the public cannot quite appreciate why seemingly well-heeled individuals should be able to obtain legal aid while others, who are, on the face of it, much more deserving, fail to do so? At the very least, will the Minister recognise that there is a need for re-educating the public if the legal aid system is not to fall into disrepute?
    Mr. Lyon: I try to do my best, in my replies to letters on this subject, to educate members of the public in this matter. There is a distinction between civil and criminal legal aid. In criminal legal aid the application has to be decided quickly and, therefore, there is not always an opportunity for the Supplementary Benefits Commission to do the exhaustive investigation of means that always takes place before a civil legal aid application is granted. However, if later examination shows that there has been any kind of false representation about means, the matter can always be remedied by the court when it make an award about the contribution that the accused has to make to the Legal Aid Fund.
    Mr. Ashley: Will my hon. Friend consider handing over the whole of the legal aid system to an independent commission and thus take it out of the hands of the Law Society, because that body is not particularly well suited to handle the legal aid system? Its primary concern is to defend the interests of solicitors and lawyers.
    Mr. Lyon: I shall think about that interesting suggestion, although it does not really come within my ambit. Civil legal aid is dealt with under a scheme administered by the Law Society, and that society is responsible to the Lord Chancellor. However, the criminal legal aid system is dealt with through the courts, and for that my right hon. Friend the Home Secretary is responsible. From time to time we have considered the possibility of setting up an advisory committee on criminal legal aid, but for various reasons that has been rejected. I shall certainly consider my hon. Friend's suggestion.

    Prison Sentences (Appeals)
    Mr. Stonehouseasked the Secretary of State for the Home Department how many applications he is now considering for appeals to be heard against allegedly unfair sentences.
    Mr. Alexander W. Lyon: On the assumption that my right hon. Friend means cases in which representations have been made to us alleging wrongful conviction, I regret that this information could not be provded without disproportionate effort.
    Mr. Stonehouse: Is the Minister aware that there is intolerable delay in considering appeals? For instance, in the Confait case the Catford boy's family and friends had to wait two years before an appeal was heard. Is my hon. Friend not aware that these delays cause considerable anguish to families and friends? What is being done to improve the speed with which these appeals are considered? In particular, what is being done to speed up the appeal of George Davis?
    Mr. Lyon: My hon. Friend seems to be labouring under some misapprehension, and to have confused an appeal to the Court of Appeal with a representation to my right hon. Friend the Home Secretary that there has been a miscarriage of justice. The Davis case is subject to the normal laws relating to appeals to the Court of Appeal. The appeal has not been heard. It is sub judice, and the first time that my right hon. Friend would have any right to make any representations about it would be after it has been heard by the Court of Appeal.

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    It took a long time for the Department to consider the various representations made about the Confait case because we exhaustively examined every detail of it. Although I cannot give an accurate estimate, the Department receives about 4,000 representations a year in respect of cases of alleged wrongful conviction. That is bound to put a strain upon the staff of the Department.
    Mrs. Knight: Will the Minister confirm my observations, which are the result of the large number of letters that I have received from persons currently being detained at Her Majesty's pleasure, that over 90 per cent. of prisoners believe that they have been given an unjust sentence? Will he accept my sympathy at the administrative problems involved?
    Mr. Lyon: I am bound to agree with the hon. Lady. I remember that when I was at the Bar I never had a client who did not think that he had been wrongfully convicted.

    Ian Brady (Hunger Strike)
    Mr. Whiteheadasked the Secretary of State for the Home Department under what instructions Ian Brady has been force-fed whilst on hunger strike in prison.
    Mr. Roy Jenkins: The responsible medical officer has decided, on the basis of his professional judgment, that Ian Brady should be fed artificially. The use of force has not, I understand, arisen.
    Mr. Whitehead: Does my right hon. Friend accept that most hon. Members thought that after his courageous decision in the case of the Price sisters, the practice of artificial feeding as a response to hunger strikes was ended? As this man knows that his crime means that he cannot be released from prison for many years, if ever, cannot it be made clear to him that his requests for better treatment in prison must be considered on their merits and in terms of his own protection from other prisoners, and that the response to a hunger strike will not result in artificial feeding?
    Mr. Jenkins: His requests for better treatment in prison will certainly be considered on their merits and not in relation to any hunger strike activities.
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    On the wider point that my hon. Friend has raised, in my statement of July last year I made it clear that there was nothing in the Prison Rules or in the expectations of the Home Office that medical officers should feed prisoners artificially when they went on hunger strike. I also made it clear that I could not interpose myself between the clinical judgment of a doctor and his patient. I completed a reply to a supplementary question by saying:
    "Perhaps the best way to sum it up is that I hope in future a medical officer confronted with a prisoner who is going on hunger strike will treat him in the prison as nearly as possible in the way in which a doctor would treat a free man or woman outside prison."—[Official Report, 17th July 1974; Vol. 877, c. 453.]
    That remains my decision.
    Mr. Beith: Does the right hon. Gentleman recognise that those who supported the announcement that he made believe that it is implicit in that announcement that neither he nor the prison authorities have any obligation at all to prolong the life of someone such as Brady against his determined wishes to be on hunger strike?
    Mr. Jenkins: That is exactly the position. I agree with the hon. Gentleman. But I cannot interpose a clinical judgment between a doctor and his patient, whether the patient be inside or outside prison.

    Police (Complaints)
    Mr. Jesselasked the Secretary of State for the Home Department how many complaints have been made against the police in the last 12 months for which figures are available, expressed in absolute figures and as a percentage of the total number of police.
    Mr. Roy Jenkins: In 1974 the police in England and Wales received 17,454 complaints—that is, approximately 17 complaints for every 100 officers.
    Mr. Jessel: As the number of complaints, which may not all be valid, is so small compared with the total number of police, and as the police have such exacting duties nowadays, would it not be better for the Home Secretary to support the police in every possible way rather than to propose a new and expensive measure which would facilitate and

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    foster complaints against the police, and so pander to criminal elements?
    Mr. Jenkins: No, I hardly agree with the hon. Gentleman on any point. The number of complaints is not small compared to the number of police—17,000 is a large number. What was small was the number of substantiated complaints, which was 1,141. This was the view taken by my predecessor, the right hon. Member for Carshalton (Mr. Carr). We can help to sustain the police, which I am dedicated to doing, by ensuring that justice is not only done but is seen to be done. That has been broadly accepted in this House and is now broadly accepted in the police service. The enactment of police complaints legislation—I hope to get an early Second Reading for the Police Bill—will, seen in perspective, strengthen and not weaken the police.
    Mr. Corbett: Does my right hon. Friend agree that there has been a general welcome at all levels of the police force for his proposal to introduce an independent element into the complaints procedure?
    Mr. Roy Jenkins: I have my own sources of information within the police force and, broadly speaking, they agree that this is a necessary step forward.
    Mr. Alison: Will the Home Secretary recognise that at a time when good police morale is a vital ingredient of wider public well-being, this morale could be seriously damaged if the impression were given that chief officers were not fitted to play a major rôle in vital matters of discipline in their own forces?
    Mr. Jenkins: That is the reason, as the hon. Gentleman who is the assistant Opposition spokesman on this matter will be aware, why I have been careful to reserve the position of chief officers—I have treated the deputy the same as the chief officer for this purpose—in the initial investigation of complaints, when the chief officer acts as the disciplinary authority.

    Shrewsbury Picket
    Mr. Skinnerasked the Secretary of State for the Home Department whether he has yet replied to the letter from Amnesty International regarding Des
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    Warren, the imprisoned Shrewsbury trade unionist
    Mr. Roy Jenkins: Yes, Sir. I have acknowledged to Amnesty International that its decision was not to adopt Mr. Warren as a prisoner of conscience. It has made no formal judgment on the question whether or not he is a political prisoner. There is, of course, no provision in English law for a prisoner to be treated as a political prisoner.
    Mr. Skinner: Is it not a fact, however, that Amnesty International was more than a little upset about the fact that the Home Secretary had given the impression to the outside world that it had refused to adopt Des Warren as a political prisoner when, in fact, things were somewhat different? Will my right hon. Friend be prepared to have another look at this case and set up an inquiry based on some new photographic evidence that shows quite conclusively that the man who was supposed to have been seriously injured, a man by the name of Grocott, was present at meetings, in perfectly good health, long after he was supposed to have been injured as a result of what, as he said, the pickets had done during the course of the strike concerned? Does not my right hon. Friend agree that if there is new evidence of this kind a full-scale inquiry should take place to establish the facts, based on these new photographs?
    Mr. Jenkins: My hon. Friend has asked a large number of questions. In so far as there was any question of misunderstanding with Amnesty International, it arose directly out of the question which he put to me previously which was based on a direct misunderstanding on his part.
    Mr. Skinner: No.
    Mr. Jenkins: Perhaps my hon. Friend will listen for a moment. What he said was:
    "Is it not about time that the Home Secretary recognised that Des Warren is a political prisoner, nothing more and nothing less…. That is why Amnesty International has taken up Des Warren's case."—[Official Report, 16th October 1975; Vol. 0897, c. 1575.]
    What Amnesty International said was that it had decided not to adopt him as a prisoner of conscience but had made no decision one way or the other about his being a political prisoner. As will be clear from what I have read to the House,

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    my hon. Friend's question on the previous occasion was based on an entirely false premise, and in so far as misunderstanding arose, I refuted the false conclusion that my hon. Friend drew from the false premise. I have made the position clear to Amnesty International, and there is no further difficulty about this matter.
    As regards the further points raised by my hon. Friend, in any case, matters of new evidence which has not been before the courts will always be considered in order to show whether they are something which would justify a reference, but these must be matters of new evidence and not matters of opinion on old facts.
    Sir D. Walker-Smith: I agree with what the right hon. Gentleman has just said about new evidence. However, will he confirm that this conviction followed the normal and objective processes of our criminal trial system, which processes would not be available in every other country where they might be wanted but could not be secured by a person charged with this sort of offence?
    Mr. Jenkins: I have made so many statements on various aspects of this case which make it clear that I believe that this is a case where the rule of law and the courts should be upheld that I cannot believe that any further statement of mine would add to the case in any way.
    Mr. Faulds: Considering the hundreds of thousands of genuine political prisoners throughout the world, would it not be heartening if some of our colleagues could lift their eyes occasionally from such parochial, petty and piddling horizons?

    County and District Councils
    Edmund Marshallasked the Secretary of State for the Home Department what guidance Her Majesty's Government have given the Local Government Boundary Commission for England about the numbers of members of county and district councils in relation to the reviews of electoral arrangements now being undertaken by the Commission.
    Mr. Roy Jenkins: No directions have been given to the Commission on this matter. The criteria promulgated by the Commission in December 1973 as a guide to local authorities when drawing up
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    proposals for revised schemes of representation were:

    members

    County Councils

    60–100

    Metropolitan district councils

    50–80

    Non-metropolitan district councils

    30–60

    Dr. Marshall: Is not the size of a local council a key factor for determining the effectiveness of democracy in local government? Does my right hon. Friend, therefore, agree that the criteria laid down by the Boundary Commission are the best criteria?
    Mr. Jenkins: I would not wish to get anywhere near giving a direction. However, what I can tell my hon. Friend and the House is that I think that the Boundary Commission regards these guidelines as being fairly tentative. It is prepared to consider the matter flexibly and to receive representations, particularly from the larger areas, on the question whether a larger size would be justified.
    Mr. Farr: Will the right hon. Gentleman consider the big difference in the expenses and attendance allowance being claimed by district and county councils? In some parts of the country some district councils are claiming thousands of pounds for such allowances, cheek by jowl with councils for which nothing has been claimed. Will the right hon. Gentleman urge some restraint on the claims by some councils?
    Mr. Jenkins: That is entirely a matter for my right hon. Friend the Secretary of State for the Environment.
    Mr. John Evans: Does my right hon. Friend accept that many councillors who are at present absolutely fed up with being everyone's whipping boy are appalled by the suggestion that there should be any further reduction in their numbers, because of the already arduous work that they do? Does he accept the views of the Metropolitan District Authorities Association that this matter should be postponed? Is he also prepared to accept that the question of boundary reorganisation should be postponed indefinitely, until such time as a decision has been made on the question whether there should be regional councils for England?
    Mr. Jenkins: If councillors were fed up with being everyone's whipping boy, I am not sure that they would remain

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    keen to be councillors. However, it is desirable that they should do so. As I have indicated, the Boundary Commission has expressed the view and, indeed, in discussions with local councils has made it clear, that it is open to representations about the appropriate size of councils, particularly in large areas. I do not think that it would be right to postpone the operation of the Boundary Commission in relation to part of the job which it has not yet completed.

    Sexual Offences
    David Steelasked the Secretary of State for the Home Department when he expects the Criminal Law Revision Committee to report on its review of the law relating to sexual offences; and if he will report on his progress in setting up a policy advisory committee on sexual offences.
    Mr. Roy Jenkins: The review of the law on sexual offences in England and Wales has only just begun and it is far too early to forecast when the committee is likely to report. I am now setting up the Policy Advisory Committee and hope to announce the names of members shortly.
    Mr. Steel: Following the publicity given to the recent tragic case involving a bishop, does not the Home Secretary agree that pending these reports it would be a sound principle if prosecutions took place only where some member of the public had been offended and a complaint had been made? Does not he feel that the police have better things to do than spend time seeking out these rather pathetic cases of elderly men misbehaving themselves?
    Mr. Jenkins: As the hon. Gentleman will know, while criminal law is a matter for me and, with the approval and support of the House, a matter in respect of which it is for the Home Office to make proposals, the prosecution process is not such a matter. I do not, therefore, think that I ought to fall into the temptation of commenting on the hon. Gentleman's remarks.
    Mr. Nicholas Winterton: Will the right hon. Gentleman say what discussions he has had recently with his right hon. Friend the Secretary of State for Social Services about the tragic incidents which have hit
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    the Press in recent days, relating to people released—quite wrongly in my view—from psychiatric hospitals?
    Mr. Jenkins: That is clearly an important question, but it hardly arises on this Question. However, we have the benefit of the Butler Report, which has been delivered to my right hon. Friend and myself. This will be of considerable assistance in avoiding difficulties such as those which have come to public notice and which we are all extremely anxious to avoid. We well understand the public concern about these matters. However, as has also been pointed out, it is not possible to proceed entirely without risk without having a position in which we would have, as someone has said, not one Broadmoor but a new Broadmoor built every few years to supplement the existing one. A balance must be struck, and, of course, we shall endeavour to strike a better balance than has been struck by successive Governments and successive Ministers responsible over recent years.

    Rape
    Mr. Ashleyasked the Secretary of State for the Home Department if he has yet received the Report of the Heilbron Committee; and if he intends to introduce legislation to amend the law relating to rape.
    Mr. Roy Jenkins: I have received the Report of Mrs. Justice Heilbron's Advisory Group and hope to publish it before the Christmas Recess. I shall report to the House when the Government have considered the group's recommendations.
    Mr. Ashley: If, after he has studied the Heilbron Report, my right hon. Friend considers bringing in legislation to amend the law relating to rape, will he bear in mind the need to embody three important principles—first, that the woman's name should never be publicly disclosed; secondly, that the woman's sex life is utterly irrelevant to the question whether she was raped and, therefore, should not be used against her in a court; and, thirdly, that an accused man should be required to have reasonable grounds for any claim he puts forward that the woman consented?
    Mr. Jenkins: I think that my hon. Friend will agree that the most useful thing we can do now is to wait and see

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    what are the committee's recommendations on matters such as those he has mentioned. I set up the committee at short notice, and it has done its work.
    Mr. Mayhew: Should it not be understood that unless we wish to depart from the general principle that there is no guilty act unless it is committed with a guilty mind, the law regarding rape should not be amended in the third instance put forward by the hon. Member for Stoke-on-Trent, South (Mr. Ashley)?
    Mr. Jenkins: The hon. Gentleman also should wait and see what, within a matter of a few weeks now, the committee will have to say.

    Hotels (Fire Precautions)
    Mr. Pardoeasked the Secretary of State for the Home Department what steps he proposes to take to ensure that the inspection of hotels and boarding houses under the Fire Precautions Act 1971 is completed within the near future.
    Dr. Summerskill: The enforcement of the Act is a matter for the fire authorities, which, within the limits of their resources, are proceeding as rapidly as they can.
    Mr. Pardoe: Is the hon. Lady aware that the inspections and surveys by personnel of the fire departments throughout the country have proved to be far more time-consuming than was supposed when the House passed the Act? Does she agree that we are now a long way behind the schedule which the Home Office wished to follow when it introduced this Act? What steps does she propose to take to speed matters up?
    Dr. Summerskill: The rate of progress in any fire authority is dependent upon the size of the fire prevention staff and the number of premises falling within the scope of the Act. I regret that in the light of current restrictions on local authority expenditure there can be no expectation, in the near future, of increasing the level of fire service manpower for the specific purpose of implementing the requirements of the Fire Precautions Act.
    Mr. Jim Spicer: I accept that there has been a slowing down of the programme of inspection, but does the hon.
    1036
    Lady accept that a tremendous amount of hardship is involved for a large number of small hotels and boarding houses throughout the country? Can she hold out any hope to those responsible for running such establishments that longer-term loans—I stress "loans", not grants—will be available to help these people keep open their premises, to help our tourist trade, particularly from overseas?
    Dr. Summerskill: I appreciate that there are financial difficulties facing hotels and boarding houses, which are already suffering from inflation and rising costs, but there have been tax reliefs and there is a loan scheme. Unfortunately, in the present economic situation it is difficult to justify further financial assistance.

  PRIME MINISTER (VISITS)
  Mr. David Steelasked the Prime Minister if he will pay an official visit to Hawick.
  The Prime Minister (Mr. Harold Wilson): I have at present no plans to do so, Sir.
  Mr. Steel: Having read the Government's White Paper on devolution this morning, may I ask the Prime Minister if he is aware that I am greatly relieved by that reply? May I inform him that he might be well advised to stay out of Scotland for a very long time, until the rage and fury have died down? Is he aware that although many of us expected the powers outlined in the White Paper to be less than we would wish, none of us had any idea that the Government would propose that Westminster should retain a political veto over the whole range of functions devolved to Scotland and at the same time increase the powers of the Secretary of State, and include even those of the Governor-General of Australia? Will the Prime Minister, between now and the publication of the Bill, enter into serious inter-party talks on the inadequacies of this document?
  The Prime Minister: I congratulate the hon. Gentleman on the speed of his reading but not on the perception that he brought to it. If this is what he feels on a first quick reading, I am very surprised at the squalor of his deal with the Conservatives who took a very different

  1037
  view of devolution when they voted on Tuesday night—[Interruption.] It is a matter for the hon. Gentleman's conscience.
  As regards the last and serious part of the hon. Gentleman's question, our idea in publishing this very full White Paper is that it should promote a national debate—by "national", I mean not only in Scotland and in Wales but throughout the United Kingdom—so that the Government can take account of the views expressed in the national debate as well as in debate in the House in relation to the Bill that will be presented to the House in this Session.
  Mr. Dalyell: As the Labour candidate for Hawick in 1959, may I ask my right hon. Friend whether there might not be more people interested in a railway line for Hawick to Edinburgh than in an Assembly in Edinburgh?
  The Prime Minister: That is certainly possible. I am always willing to listen to my hon. Friend's advice, though I am not sure that he represents a majority either of the Scottish Labour Party or of the people of Scotland on the question of devolution.
  Mr. Peyton: The Prime Minister is awfully good at using words, just off the cuff, which reflect the state of his mind rather than the facts. Will he explain what he meant by "squalor" just now?
  The Prime Minister: As I read some time ago that the right hon. Gentleman's contrived questions to me were based on four hours' pacing round his study on a Sunday evening preparing supplementary questions to the Prime Minister, I certainly understand his envy of anybody who can answer a question without preparation. As for the term "squalor", as he has put a clear question for once I shall be delighted to answer it. It is a matter of opinion, I agree; we may not all agree about it, but I think that the Liberal Party joining to support the Conservatives on Tuesday—since, on devolution, on which the hon. Member for Roxburgh, Selkirk and Peebles (Mr. Steel) is putting his Question, the Conservatives are a long way behind the Labour Party—does represent squalor.
  Mr. Peyton: Does the Prime Minister appreciate that we have all enjoyed once
  1038
  more his characteristic meandering around the point?
  The Prime Minister: That is a less specific question than the last one asked by the right hon. Gentleman, which was easy. The right hon. Gentleman must realise that as the Liberal Party is at least working hard to produce a policy on other matters, it is regretted by some of us on the Government side of the House that the Liberals should join in voting with the Conservative Party, which is not pursuing any policy at all.
  Several hon. Members rose—
  Mr. Speaker: We must get on. Mr. Graham.

  TUC AND CBI
  Mr. Grahamasked the Prime Minister when he next plans to meet the TUC.
  Mr. Ashleyasked the Prime Minister when he next proposes to meet the TUC and the CBI.
  Mr. Atkinsonasked the Prime Minister when he next expects to meet the TUC.
  The Prime Minister: I refer my hon. Friends to the reply which I gave to my hon. Friend the Member for Bolsover (Mr. Skinner) on 25th November, Sir.
  Mr. Graham: When my right hon. Friend next meets the TUC will he convey to that body the warm appreciation of this House of the determined and successful efforts of the TUC in making its contribution to the counter-inflation policy?
  Is my right hon. Friend satisfied that the measures taken by the Government, particularly in conection with price control, are proving equally effective?
  The Prime Minister: I shall certainly convey to the TUC what my hon. Friend has said. I am sure that the TUC has earned the approbration of the whole House for its courage and for the way in which it has contributed to an agreed—not statutory, but agreed—policy on inflation, which now carries the full support of the whole country.
  Mr. Tebbit: Rubbish.
  The Prime Minister: Hon. Members may put it to the test. Nobody knows where the Conservatives stand. They sat on their hands when the vote was taken. Half of them wanted a statutory policy and half of them did not know what they wanted. [Interruption.] I was dealing with a serious question from a serious Member of this House.
  On the question of price control, I refer my hon. Friend to what was said in the Gracious Speech, approved by this House the other evening, and what was said by my right hon. Friends in the debate on Tuesday.
  Sir David Renton: When the Prime Minister next meets the TUC, will he ask it to accept as a principle that men should have the right not to strike as well as the right to strike?
  Mr. Flannery: They also have the right to work.
  Sir David Renton: Will the right hon. Gentleman ask the TUC to ensure that its constituent unions do not victimise or penalise those men who prefer to work rather than strike?
  The Prime Minister: I agree with the right hon. and learned Gentleman's concern and, with what I think may lie behind his question. The TUC has no power of direction over individual unions. There is industrial democracy as well as political democracy in this country. The Conservative method of dealing with this matter proved to be a national disaster. I believe the right hon. and learned Gentleman supported it. Nevertheless, he will be pleased to see a significant reduction in man-days lost through stoppages since the present Government came into power.
  Mr. Ashley: Does my right hon. Friend agree that the Government's £6 pay policy could be destroyed if any group of people, whether dentists, dustmen or doctors, were to breach that policy? [An HON. MEMBER: "Or the miners."] Will my right hon. Friend confirm that it is the policy not simply of one Minister but of the whole Government, and that any people who challenge the £6-a-week policy are challenging the Government?
  The Prime Minister: Yes, I agree with my hon. Friend. It is, in fact, the policy
  1040
  of the whole Government. Indeed, it is the policy of the House of Commons. However the votes may have been cast, it is the policy of the House. I believe that it is the policy of the whole country. We have made it clear that however strong the case, there cannot be derogations from this. The word "miners" has been thrown across the Floor of the House. I remind hon. Members that the miners' conference, last July, in Scarborough, accepted this policy. The miners had a pit-head ballot of individual votes which showed a three-to-two majority in favour of this policy. This is now the policy of their executive. I might say that they showed much more courage in this matter than the Opposition have. [HON. MEMBERS: "Oh."] Oh, yes; they declared their position. On the other hand, I think it is only fair to compliment the official Opposition spokesman in the debate on the health service, who said that the Opposition believe that it is right that the counter-inflationary policy should be observed.
  Mrs. Thatcher: Does the Prime Minister accept that, after the difficult economic circumstances that face us, what our people are most concerned about is the power wielded by a minority of Left-Wing extremists? When he next meets the TUC, therefore, will he tell it that he and the majority of his colleagues will do all in their power to assist the commonsense majority to prevail, whether by means of postal ballots or such other methods as he may suggest? If he does so, he may be assured of our support.
  The Prime Minister: I am grateful to the right hon. Lady. I know that she would not wish her reference to Left-Wing militants to be taken as referring to the junior hospital doctors. They are currently challenging a wage policy which was accepted by this House and, indeed, by the country. [Interruption.] They are challenging, and the Government and Opposition are resisting the challenge. [Interruption.] I have plenty of time to answer. I cannot answer while an hon. Member opposite who is acting as a PPS is out of control. If hon. Members will allow me to try to remember the original question, I shall endeavour to answer it. I was saying that I welcomed the fact that in this House, on the question of the Health Service—[An HON. MEMBER:"Speak

  1041
  up."] We have all said that the policy must be carried through.
  The right hon. Lady referred to the danger from Left-Wing militants. I have made clear my anxiety about the threat to our community from Left-Wing and Right-Wing militants, with only one group of whom the right hon. Lady tends to associate herself—but only in the United States, and not in this country. [Interruption.] Hon. Members may not like it. I have been asked a long question and hon. Members are going to get the answer in the end. [HON. MEMBERS: "Get on with it."] Hon. Members opposite are shouting. They do not want to hear the answer.
  On the subject of postal ballots, my right hon. Friends and I have welcomed the success of the AUEW ballot, and there are others. I am still not persuaded that it is right to force postal ballots, but the move towards them is something that I very much welcome.
  Mr. Thorpe: Since the Prime Minister will no doubt wish to discuss current political issues with the TUC, will he ascertain for himself that the votes cast last Tuesday were not on devolution but were on the economy and the dock labour scheme? He may have been thinking of the business in another place. If the right hon. Gentleman is to discuss Government taxation policy with the TUC, will he bear in mind that the powers of taxation to be given to the Scottish Assembly are rather less than those which Lloyd George gave in this House. 50 years ago, to Ireland?
  The Prime Minister: With regard to the parallel with the Irish situation, we are deeply concerned with the Constitution and other problems in Ireland. When I referred to the votes on Tuesday, I was not speaking of devolution. I was not sure which was the more pathetic—seeing the Conservatives following the Liberals into the dock Lobby or seeing the Liberals following into the Lobby on economic questions a party which has no policy on any single matter affecting economic policy.
  Mr. Atkinson: Is it not the case that Selsdon woman makes Selsdon man look like a raving anarchist? My right hon. Friend is shortly to travel to Italy. Will he agree to meet trade union leaders there
  1042
  and discuss the rôle of British investment in the motor industry in that country? If we are posing to multinational companies who invest in Great Britain the argument that we should share their capital resources, should not Italian workers who are concerned about Innocenti and Leyland have a share in the British capital that the Government are to invest in Leyland? Is my right hon. Friend prepared to discuss this very important question with Italian trade union leaders?
  The Prime Minister: It would be entirely inappropriate, not to say indelicate, for me to talk about the relationship between Selsdon man and Selsdon woman, so I shall resist the temptation. On the serious part of my right hon. Friend's question, I recognise that he is taking an internationalist approach, in the sense that he says that what is good for our resistance to certain Chrysler proposals is good for Innocenti—
  Mr. Gorst: On a point of order, Mr. Speaker. In view of the fact that the Prime Minister is now floundering aimlessly, would it not be in order to go on with the Business Statement? It is after 3.30.
  The Prime Minister: Hon. Members opposite have problems in these matters. I represent a party and a Government with a policy, against people who have no policy. This is a serious and international question that I am answering, but I cannot accept that the circumstances are the same here and in Italy. My visit to Rome is for the summit meeting of the Council of Europe, and any discussions with the Italian Prime Minister will be on the fringe of that conference. If he wishes to raise the question of Innocenti, I shall be pleased to discuss it with him, as President Ford was pleased to discuss the Chrysler question with me at Rambouillet.
  Mr. Lawson: On a point of order, Mr. Speaker. This is the second time this week that the Prime Minister has not even succeeded in reaching Question No. Q3 on the Order Paper. Will you tell him to stop making such long-winded, repetitious and irrelevant answers?
  Mr. Speaker: Will the hon. Member please repeat his point? I did not hear it.
  Mr. Lawson: I gladly repeat it. In view of the fact that this is the second time this week that the Prime Minister has not even succeeded in reaching Question No. Q3 on the Order Paper, will you tell him to stop making such long-winded, repetitious and irrelevant answers?
  Mr. Wellbeloved: In giving consideration to that point of order, Mr. Speaker, will you take into account the fact that the Prime Minister had to suffer today the combined inane antics of the Opposition, caused by their lack of policies, and the fact that hon. Members on the Government side would very much like to hear my right hon. Friend giving his answers?
  Mr. Speaker: That is nowhere near a point of order. This is a serious matter for the House. I have looked very carefully at the record for last Tuesday and hon. Members will see there that the Prime Minister answered 10 different questions. We have a system, which I do not believe any of us finds satisfactory, of having pegs on which one can hang any question to the Prime Minister. The Question reached on the Order Paper is no test of how many are in fact answered. It is not very satisfactory, but it is how we go along.

BUSINESS OF THE HOUSE
Mrs. Thatcher: May I ask the Leader of the House to state the business for next week?
The Lord President of the Council and Leader of the House of Commons (Mr. Edward Short): The Business for next week will be as follows:—
MONDAY 1ST DECEMBER—Second Reading of the Agriculture (Miscellaneous Provisions) Bill.
Motion on the White Fish and Herring Subsidies (United Kingdom) (No. 3) Scheme.
TUESDAY 2ND DECEMBER—Second Reading of the Aircraft and Shipbuilding Industries Bill.
Motion relating to financial Assistance for Herbert Limited.
Remaining stages of the OECD Support Fund Bill and of the Moneylenders (Crown Agents) Bill.
1044
WEDNESDAY 3RD DECEMBER—Supply [1st Allotted Day]: Debate on "Developments in the European Communities April-October 1975", Command No. 6349.
Remaining stages of the Northern Ireland (Loans) Bill.
Motions on the Northern Ireland Orders relating to rates, Bann reservoir, insurance companies, firearms and education.
THURSDAY 4TH DECEMBER—Debate on the Report of the Committee on House of Commons Administration, Paper No. 624, until about 7 o'clock.
Afterwards, Second Reading of the Civil List Bill.
Motion relating to the Arbury Banks Preservation Order.
FRIDAY 5TH DECEMBER—Second Reading of the Police Bill.
MONDAY 8TH DECEMBER—Supply [2nd Allotted Day.]
Mrs. Thatcher: Many of my colleagues are dismayed that we are to have only one day for the Second Reading of the Aircraft and Shipbuilding Industries Bill. We feel that we should have one day for the aircraft industry and one for shipbuilding, otherwise the debate could get very confused.
Will the right hon. Gentleman ask his right hon. Friends not to make statements on public expenditure and increased charges in the form of Written Questions, as happened recently with the statement on charges for spectacles and teeth and as happened last year with the increased school meals charges? There should be oral statements in the House.
Mr. Short: On the right hon. Lady's first question, I have looked at this point, and on only five occasions in 12years has more than one day been given for a Second Reading. We did not feel that this Second Reading merited two days and I am afraid there is no other time between now and Christmas to provide a second day. I have noted what the right hon. Lady said in her second question and I will pass it on.
Mr. Thorpe: What time are we to have to debate the disappointing White Paper on devolution—or does the light

1045
hon. Gentleman propose to take it away and have another look at it?
Mr. Short: I heard the right hon. Gentleman comment on the White Paper, in a predictable way, on the one o'clock news. We realise that his support in Scotland has fallen to 4 per cent. and that he is trying to claw it back from the nationalists by outdoing them in condemning the White Paper.
Mr. John Mendelson: In view of the further unemployment figures announced a few days ago and the very large lobby of delegates from many industrial centres at the House yesterday, will my right hon. Friend consider giving urgent priority to a special debate on unemployment? Will he set aside a full day for this subject, without mixing it up with any other subject, and change some of the business for next week so that the relevant Ministers can take part in a debate on this most important of all subjects?
Mr. Short: I understand my hon. Friend's concern on this subject—a concern which is shared by hon. Members on both sides of the House, and particularly by the Government. We are faced with an intolerable level of unemployment, and my right hon. Friend the Secretary of State will be announcing shortly a number of measures in this connection. I cannot give any time in the near future for a debate. We have just had a five-day debate on the Gracious Speech, the last day of which was devoted to economic affairs, and a good many hon. Members dealt with the problem then.
Mr. Peter Walker: The right hon. Gentleman is unwilling to have a general debate on unemployment. Since unemployment in the West Midlands has trebled over two years and is higher numerically than in the North-East and Wales and is almost as high as in Scotland, may we have a debate at least on the problems of the West Midlands or on the manner in which regional policy discriminates against that area?
Mr. Short: No, I cannot undertake that. I visited the West Midlands a fortnight ago—[Laughter.] This is not very funny for the people in the West Midlands. I have never seen such discourtesy and ill manners as are exhibited by Conservative Members. They are the worst
1046
mannered and most discourteous Opposition I have seen in 25 years. The Conservative Party is a disgrace to Parliament and it should be ashamed of itself.
Mr. Peter Walker: On a point of order, Mr. Speaker. The Leader of the House was so keen to give his headmaster-like admonishments to the Opposition that he failed to answer my question.
Mr. Short: I was complaining, Mr. Speaker, about a party which shouts down the Prime Minister and then complains that he has not answered any Questions. The answer to the right hon. Gentleman, who I know is concerned about this issue even though his hon. Friends are not, is that I cannot provide any time next week for a debate on this subject but that I shall certainly bear the point in mind. If we were to debate the motor industry before Christmas—and we might well do so—that at any rate would partially satisfy his wishes.
Mr. Watt: When are we to have an opportunity to debate that pathetic document "Our Changing Democracy"? How many days will be devoted to that debate? I can assure the right hon. Gentleman that we shall not need more than half a day because his fellow English Members can go soundly to sleep as there is nothing to trouble them in that document.
Mr. Short: I am glad to hear the hon. Member suggest that we should have only a half-day debate on the White Paper. I shall bear that in mind.
Mr. William Hamilton: Has my right hon. Friend got his priorities right on next Thursday's business, for instance? Surely we could have half-a-day's debate on unemployment rather than debate the Civil List Bill. Will he give an assurance that all the provisions in that Bill come within the terms of the Government's incomes policy?
Mr. Short: The Bill honours the promise by the Prime Minister in this House on 12th February and will enable further increases in the Civil List to be made from grants in aid—
Mr. William Hamilton: Will they be within the £6 limit?
Mr. Short: The Bill deals with the machinery, not the finance, and it fulfils my right hon. Friend's promise.
Mrs. Chalker: Will the right hon. Gentleman consider having an urgent debate on the Butler Committee's Report and the general problems of mental health, which are most serious at present?
Mr. Short: I can understand the hon. Lady's concern about this point. She has always expressed that concern. In the period up to Christmas I shall bear in mind what she has said.
Mr. Stonehouse: Has my right hon. Friend's attention been drawn to Early-Day Motion No. 7 concerning the freedom of travel for Dr. Zakharov and the need to implement the Helsinki Declaration—
Mr. William Hamilton: Has he got a passport?
Mr. Stonehouse:—and as the motion has been signed by representatives of every political party in this House, will my right hon. Friend ensure that an early opportunity is made available to consider this subject?
[That this House regrets the refusal of the Soviet Government to allow Dr. Andrei Sakharov to travel to Oslo to collect his Nobel Peace Prize; and calls on Her Majesty's Government to make representations to the Soviet authorities to honour the Helsinki declaration, which they so recently signed and which, inter alia, called for the free movement of individuals and ideas.]
Mr. William Hamilton: Make sure he has a passport.
Hon. Members: Or two passports.
Mr. Short: I cannot offer any time next week, but that would be an appropriate subject for our debate on the Adjournment for the Christmas Recess, whenever that occurs.
Mr. Baker: Is the Leader of the House aware that it is now impossible to hold by-elections for Greater London Council vacancies when they fall due—as they have in my constituency—because the Government have forgotten to table an order postponing the GLC elections from April 1976 to April 1977? Do the Government intend to table this order next week so as to postpone the elections for
1048
a year, or will Londoners be given the opportunity next spring to express their opinions on the most costly and inefficient authority in Britain?
Mr. Short: I do not accept in any way the latter part of the hon. Member's question. I shall certainly look into this matter to see whether my right hon. Friend the Secretary of State for the Environment can say something about it next week.
Mr. Heffer: Is my right hon. Friend aware that there is great desire in this House, particularly among my colleagues, to have an early debate on unemployment? Is he aware that yesterday 20,000 workers who marched through the streets of London were led not by extremist groups, as was suggested by the General Secretary of the TUC, but by the North-West Region of the Trades Union Congress, supported by trades councils from all over the North-West and by trade unionists nationwide? Does my right hon. Friend agree that the fact that 20,000 workers demonstrate about unemployment does not mean that they are against the Government, only that they want something positive done about unemployment? May I urge my right hon. Friend to reconsider his answers on this subject and to provide time for an early debate?
Mr. Short: I cannot add anything to my earlier reply. I share my hon. Friend's concern. I noted the demonstration yesterday. I also went to see the police who were laid out in Westminster Hall after being injured in the demonstration.
Mr. Amery: Is the right hon. Gentleman aware that the Secretary of State for Defence told us some time ago that the defence White Paper which he produced represented the most far-reaching review of defence since Haldane? Does he realise that the right hon. Gentleman admitted at Question Time on Monday that a further review of this most far-reaching review since Haldane's time was now in progress? Is he aware of the disquiet caused among the Armed Forces at home and among our NATO and other allies abroad? Will he give time for a defence debate before any decisions are taken or any concrete proposals put before the House?
Mr. Short: I shall pass the right hon. Gentleman's views on to my right hon. Friend the Secretary of State. I am sure that the review has not had the effect described by the right hon. Gentleman in the Armed Forces.
Mr. Ward: It is a year since the adjourned Second Reading debate on the Road Traffic (Seat Belts) Bill. My right hon. Friend gave repeated assurances to the House that he would use his best endeavours to bring the Bill before the House again before the Summer Recess. Can we have an assurance that it will be brought before the House before Christmas and before the dark nights and the high accident period?
Mr. Short: I cannot give such an assurance for the period up to Christmas. We fought the General Election on a very big programme and we are trying to get that programme through. I am sure that my hon. Friend will support the Government on that.
Mr. Fairbairn: I congratulate the Leader of the House on producing today a White Paper on devolution which bears the unique imprint of his electric mind. May I ask when we may have the opportunity to debate the concept of electoral reform since that document, apart from disregarding every proposal by the Kilbrandon Commission, proposes that the Scottish Labour-held seats should have a weighting in their favour in terms of representation?
Mr. Short: The hon. and learned Gentleman's scintillating adjectives pall a bit. He used that one in a letter to The Times recently.
Mr. Fairbairn: It was the Daily Telegraph.
Mr. Short: I might have known it would be the Daily Telegraph. The answer to the second part of the hon. and learned Gentleman's question is "No".
Mr. Flannery: Is my right hon. Friend aware that yesterday I met a powerful delegation from the working people of Sheffield who asked me to convey to my right hon. Friend a request for a full-scale debate on unemployment? Will he therefore reconsider his previous replies, regard unemployment as the most
1050
important problem confronting this House and, removing something else from the agenda for between now and Christmas, provide time for a full-scale debate on unemployment?
Mr. Short: I shall bear in mind what my hon. Friend and others of my hon. Friends have said, but my information is that my hon. Friend was shouted down by the people he tried to address yesterday.
Sir David Renton: With regard to the suggestion of my right hon. Friend the Leader of the Opposition that there should be two days for the Second Reading debate on the Bill to nationalise the aircraft and shipbuilding industries, why did the Leader of the House go back only 12 years for his precedents? Would he care to consider the precedents for the five years before he came into the House? Is he aware that if he does so he will not find a precedent for any Bill to nationalise more than one industry being given only one day for its Second Reading debate? Indeed, he will find at least one precedent for two days being given for a Bill dealing with one industry.
Mr. Short: There is a limit to the amount of research I can do to answer questions. I thought that if I went back 12 years that was reasonable enough. Perhaps I should have gone back further. I imagine that my answer would then have been still more convincing. I considered the matter, but in view of the need to have a Second Reading for the Bill to start it on its course, and as there was no more time before Christmas without sitting during Christmas week, I thought that we could not do better than to have one day.
Mr. Raphael Tuck: In view of the increase in accidents involving three-wheeled vehicles since our debate on the Sharp Report, and in view of the intransigence of my right hon. Friend the Secretary of State for Social Services on the question, will my right hon. Friend the Leader of the House consider giving at least half a day for a debate on this important subject in the near future?
Mr. Short: As I have said, there is no more time for general debates before Christmas. The matter would doubtless be a suitable subject to raise in the debate

1051
on the Adjournment for the Christmas Recess. I hope that my hon. Friend will try to catch your eye in that debate, Mr. Speaker.
Mr. Wyn Roberts: Can the right hon. Gentleman explain why the Welsh language version of the White Paper on devolution, which, incidentally, is blue, was not available at the Vote Office this morning? The right hon. Gentleman may have noticed that those who were loudest in their demand for devolution are now loudest in their condemnation of the Government's proposals.
Mr. Short: Without accepting what the hon. Gentleman said, I must reply that I do not know the answer to the first part of the question, but I shall look into it and let him know.
Mr. Wigley: Is the Leader of the House aware that the slap in the face to the Welsh TUC in the devolution White Paper this morning, and the fact that the Government have gone back on the commitment in their manifesto for the last General Election to give economic planning and control of the Welsh Development Agency to the proposed Assembly, will be regarded by many people in Wales as an affront? In view of that, will the right hon. Gentleman answer the question asked for the fourth time now, whether we can have a debate on the White Paper before Christmas?
Mr. Short: The Government have not gone back on any promise. I think that the hon. Gentleman will find that the Welsh TUC welcomes the White Paper. This is not the time to discuss the merits. The reaction from the nationalist Bench was entirely predictable. I could have written the comments of all the hon. Members on it before today. The illiterate comments of the right hon. Member for Devon, North (Mr. Thorpe) were also entirely predictable. He has to get that 4 per cent. of votes back again. He is trying to claw them back.
The reply to the hon. Gentleman's question is that there will be an extended debate—not the half-day's debate for which the Scottish National Party has just asked—in the first week after the Christmas Recess.
Mr. Cope: Is there any chance of the House debating the Sandilands recom-
1052
mendations, which are highly important and which have many ramifications in all sorts of areas? The right hon. Gentleman's hon. Friend the Member for Motherwell and Wishaw (Dr. Bray) asked yesterday for such a debate, and I think that the request would even have the support of the hon. Member for Bolsover (Mr. Skinner), who also realises the important ramifications of the Report. At present it seems that the Report will not be debated at all.
Mr. Short: I agree that it is a very important Report. There was an extensive exchange of views about it yesterday, in which my hon. Friends took part. I believe that there would be merit in trying to find time for a debate on the Report in the new year. I do not promise a debate, but I shall bear it in mind and see what I can do.
Mr. Skinner: Will my right hon. Friend reconsider the pleas that we should have a debate on unemployment? Next week we are to consider a number of matters, one of which is a further debate on the Crown Agents, I believe. We could well do without that, because it is only to let somebody off the hook. One of the reasons why a debate on unemployment could assist is that we could perhaps question my right hon. Friend the Secretary of State for Employment not merely on matters appertaining to unemployment but also about those who are managing to obtain large wage increases during a period when we are supposed to be subjected to a £6-a-week limit. Does my right hon. Friend know that, for instance, another Tory supporter, Mr. Eric Sosnow, head of United City Merchants, has just awarded himself a £200-a-week pay rise? We should have something to say about that in a debate attended by my right hon. Friend the Secretary of State for Employment.
Mr. Short: I understand the feelings about the question, but I cannot find time for a debate before Christmas. The debate to which my hon. Friend referred will take place after 10 o'clock on the day on which we shall, I hope, give a Second Reading to the Bill to nationalise the shipbuilding and aircraft industries. That is a late-night debate, so there is no possibility there. I cannot give a day before Christmas, but I shall bear in mind what my hon. Friend and my other hon. Friends have said.
Mr. Peyton: Is the Leader of the House aware that there will be general regret and some apprehension that he should have found it necessary so early in the Session to put down after 10 o'clock such substantial items of business as are down for debate next Tuesday and Wednesday? Secondly, can the right hon. Gentleman yet say when we may expect to receive the Government's answer to the Expenditure Committee's Report on British Leyland? Thirdly, will the right hon. Gentleman make it quite clear that the debate on the devolution White Paper will be extended?
Mr. Short: The White Paper debate will be extended. Perhaps we need to talk about the length of the debate. I shall be glad to talk to the right hon. Gentleman as well as to the two nationalist parties to find out whether they are still sticking to the half-day for which one of them asked or whether they would like a longer debate.
I agree that there is rather a lot of Northern Ireland business on one night. Some of it is not very substantial. We tried hard to obtain the agreement of the Ulster Unionists to sending some of that business to the Committee, but they refused to agree, although I understand that the usual channels agreed. We must deal with that business, and there is nothing for it but to put it on that one night.
I agree that it is time the Government's reply was made to the Expenditure Committee's Report on British Leyland. I share the right hon. Gentleman's view on that, and I shall do everything I can to expedite the reply.

QUESTIONS TO MINISTERS
Mr. Stanley: I wish to raise a point of order arising from an answer I received to a Written Question I put to the Secretary of State for Industry yesterday. I asked:
"what is the total number of staff envisaged for the NEB showing the breakdown by grade; and how many in each grade have been recruited to date."
The Minister refused to answer. Instead, he said:
"This is a matter for the National Enterprise Board."
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I believe that two substantive points for the whole House arise from that reply. First, I believe that it constitutes a clear extension of the topics on which Ministers are legitimately establishing a tradition of not answering Questions. I say that because my hon. Friend the Member for Brentford and Isleworth (Mr. Hayhoe) recently put a similar Question to the Secretary of State for Employment on the staffing of the Manpower Services Commission. That Question was answered fully and properly and the information he sought was given as a Written Answer in column 752 of the Official Report on 12th November. It seems, therefore, that the answer which I received yesterday marks a clear reduction in the degree of ministerial accountability to the House which has been established so far.
Secondly, I am advised by the Table Office that because a Minister has answered that the staffing of the NEB is a matter for the NEB and not for Ministers, no further Questions to Ministers on that subject can be accepted by the Table Office.
It will be self-evident that if the House accepts without challenge that it is open to Ministers in this way permanently to block Questions about the staffing of the NEB, it is equally open to Ministers on future dates to block other aspects of parliamentary inquiry about the NEB's work in exactly the same way.
I accept that the extent to which Ministers are accountable for bodies for which their Departments have responsibility but which are situated outside the Department is not clear cut. You may feel, Mr. Speaker, that this question should be examined as a matter of urgency by the Select Committee on Procedure. I firmly suggest that for a body of the policy significance of the NEB, which disposes of so much public money, the House should not be satisfied with anything other than total accountability.
Mr. Speaker: I am grateful to the hon. Member for Tonbridge and Mailing (Mr. Stanley) for putting his point of order. This is an issue for the whole House, not for a particular Government. I dislike blocking answers, but I think that some system of blocking answers has to be used. Its original purpose was to prevent the tedious repetition of the same Question

1055
over and over again. This is a matter which should be looked into, and I have no doubt that those concerned will consider the point which the hon. Member has legitimately put.
The Lord President of the Council and Leader of the House of Commons (Mr. Edward Short): I undertake to look into this matter. Perhaps I could contact you, Mr. Speaker, and the hon. Member for Tonbridge and Mailing (Mr. Stanley).
Mr. Peyton: I am obliged to the Leader of the House for his reaction to my hon. Friend's valid point. I hope that he will agree to make a statement. I am sure he will recollect that when the NEB was being set up by legislation, Ministers repeatedly said that they could not understand why the House should be so worried about accountability as the NEB would be accountable to Ministers and Ministers would be accountable to Parliament. It would be dangerous if the NEB were to be put in quarantine.
Mr. Short: There is a real point at issue here. If it meets the wish of the House, I shall look into it and either see that a statement is made to the House or make a statement myself.
Mr. Russell Kerr: Further to that point of order, Mr. Speaker. Are you aware that there will be widespread support throughout the House for the point of view you have just expressed—especially on the Labour Benches?
Mr. Gorst: Further to that point of order, Mr. Speaker. When the Leader of the House is considering that matter, will he also consider the dangerous precedent that is set? If a Minister refused to answer a Question on the ground that an organisation, be it the CBI or even perhaps the TUC, was not his responsibility, in that way he could block answers to any Questions.
Mr. Speaker: The suggestion has been made that the Procedure Committee might look into this matter. The hon. Member for Hendon, North (Mr. Gorst) has raised rather a wider point than the one raised by the hon. Member for Ton-bridge and Mailing.
Mr. Skinner: Further to that point of order, Mr. Speaker. I agree with what
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my hon. Friend the Member for Feltham and Heston (Mr. Kerr) said. When my right hon. Friend the Leader of the House considers this matter, perhaps he will look back into recent history, when he will see that when Labour was in Opposition Back-Bench Members had difficulty in getting Questions accepted by the Table Office on similar organisations set up by the Conservative Government, not least the Price Commission. Although we complained about it at that time, we want to see a refreshing new look at this matter, and it lies ill within the mouths of Conservative Members to raise it.
Mr. Peter Walker: When the Leader of the House is preparing his statement, will he bear in mind that over the past week Ministers have given detailed information about the NEB? A detailed answer was given in reply to a Question on all the investments of the NEB. It is remarkable that Ministers are answering some Questions in great detail and not answering others. The House has a right to know on what basis that judgment is made.
Mr. Short: I shall look into all aspects. My hon. Friend the Member for Bolsover (Mr. Skinner) can be assured that I shall also look into the record of the previous Conservative Government.
Mr. Tebbit: Further to that point of order, Mr Speaker. The reason for raising this matter as a point of order is partly that it is for the Chair to protect the House against the Executive and against the Executive's attempts to mislead the House. Would it be in your power, Mr Speaker, and would it not be right if it is in your power, to order that the Question concerned shall be accepted by the Table Office so that it can be placed on the Order Paper? The issue can then be cleanly and easily resolved without bothering the Leader of the House to come forward with a statement which might or might not resolve the matter.
Mr. Speaker: I shall consider the matter. This is a House of Commons matter and I hope that it can be considered as a question for the whole House. The House of Commons took or accepted a certain decision on this issue I think in 1947. The Chair is bound to some extent by what the House agreed and by what

1057
has since been convention and custom. One or two cases have come to me where I have been able to make a judgment and I have certainly not been in favour of blocking answers in those cases. The House should have the fullest opportunity to resolve this matter. May we leave it there?
Mr. Stanley: Further to that point of order, Mr. Speaker. I am grateful for what you said. In the light of what you and the Lord President said, will you confirm that, notwithstanding the answer I received yesterday, the Table Office will continue to accept Questions on the staffing of the NEB?
Mr. Speaker: The hon. Member has made his point, and the Leader of the House has promised to look into it. That is as far as we can go today.

BILL PRESENTED
  ARMED FORCES
  Mr. Secretary Mason, supported by Mr. Secretary Jenkins, Mr. William Rodgers, Mr. Attorney General, Mr. Frank Judd, Mr. Robert Brown, and Mr. Brynmor John, presented a Bill to continue the Army Act 1955, the Air Force Act 1955 and the Naval Discipline Act 1957; to amend those Acts and other enactments relating to the armed forces; to authorise the establishment of courts for the trial outside the United Kingdom of civilians subject to Part II of the Army Act 1955 or Part II of the Air Force Act 1955; to make provision for the powers of the courts so authorised in relation to such civilians; to make further provision for the powers of courts-martial in relation to such civilians and to civilians subject to Parts I and II of the Naval Discipline Act 1957; to make further provision as to the disqualification of members of the forces for membership of the House of Commons or the Northern Ireland Assembly; to make further provision for Greenwich Hospital; and for connected purposes: And the same was read the First time; and ordered to be read a Second time tomorrow and to be printed.
ORDERS OF THE DAY

  NATIONAL COAL BOARD (FINANCE) BILL
  Order for Second Reading read.
  4.8 p.m.
  The Secretary of State for Energy (Mr. Anthony Wedgwood Benn): I beg to move, That the Bill be now read a Second time.
  This last year has been one of consolidation for the coal industry, following on the tripartite discussions between the Government, the National Coal Board and the unions, which led to the report of the coal industry examination. In the course of that examination the Government endorsed a big investment programme by the NCB, involving capital expenditure over the next 10 years of £1,400 million, and the NCB has been pressing ahead with the implementation of that programme.
  The Government already have on the statute book part of their contribution to confirming their commitment to the industry, notably the Coal Industry Act 1975, which enabled us to pay £100 million to the NCB as a major contribution towards the cost of its compensation scheme for pneumoconiosis sufferers, a scheme which was agreed and arose directly out of the tripartite meetings. The 1975 Act also clarified the NCB's right to work coal, and restored the compulsory powers of the Opencast Coal Act 1958, measures which were essential if the NCB's "Plan for Coal" target of at least 135 million tons a year of output were to be met.
  The Bill before the House today is a further step in the Government's honouring of the commitments made in last year's tripartite examination, but much remains to be done. This is an interim measure and we shall still need to consider whether further legislation should be introduced next year to provide a longer-term framework within which the commitments of the coal industry examination can continue to be carried out. In that connection, the Government, the NCB and the unions have decided to reconvene the tripartite discussions to review the progress in implementing the "Plan for Coal". We had our first

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  meeting on Tuesday of this week, and we aim to meet again. As the sponsoring Minister, I can say that that provided a useful framework for discussion. I was pleased to hear Mr. Gormley say at that meeting that the atmosphere in the industry was better than it had been for a decade.
  But while we shall be looking at the longer-term requirement, there is an urgent need to act now on important matters because, following the tripartite examination, the NCB and the NUM agreed on a new earnings-related pension scheme for miners. This was set up in April. It was recognised in the tripartite examination that the industry could not be expected to bear all the burden of the social costs arising from the past, and the Government undertook to relieve the Board of some of the cost of meeting the deficiency in the scheme in respect of existing pensions. That is what the Bill provides for.
  At the same time, the steadily rising capital expenditure programme arising from the "Plan for Coal" meant that the Board's statutory borrowing limit, set when such a programme was or seemed to be unthinkable by the Conservative Government, was coming under pressure. The aim of the Board's "Plan for Coal" is to provide 42 million tons of new capacity by 1985—22 million tons by expanding existing capacity and 20 million tons from new pits.
  The Board has set in hand about 60 major projects which will yield about 12 million tons of that new capacity, and its proposals for a major new mine at Selby, producing 10 million tons a year, have been the subject of a public inquiry. I understand that the inspector's report is expected shortly.
  All this shows the Board's determination to secure the positive contribution that the coal industry examination envisaged that coal could make to the energy supply of the country. But the financing of this investment plan and the Board's need for further working capital to deal, amongst other things, with fluctuations in stock building, are already presenting the Board with considerable borrowing requirements.
  Clause 1 of the Bill, by substantially increasing the statutory limit on the
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  Board's borrowings, will enable the Board's investment programme to continue according to plan. However, these borrowings are already very close to the existing limit. Pending the enactment of the Bill and in order to prevent a breach of the limit which would otherwise first occur in December, the Treasury has agreed to make payments of up to £50 million in December and an additional £25 million in January from the contingencies fund, to be drawn in tranches as required—and, of course, it follows that the repayment of any sums so drawn will take place when the Bill is enacted.
  Clause 2 deals with the mineworkers' pensions. The pension scheme was established in 1952, and for a small contribution paid a pension of 10 shillings a week. This pension was raised in successive stages to £3·60 in September 1974, and although the contributions had been raised they remained low at an average of 43p a week. The increased pensions were financed by creating a deficiency in the fund which was met by the Board, which made annual deficiency payments. The Government have also made deficiency payments totalling £25 million over the last three years.
  Last April, the Board revised the scheme to bring it more into line with modern practice, and the new scheme was well received by the NUM. It applies to men who were serving mineworkers on or after 6th April 1975. The contributions from the members are a percentage of earnings and there is a matching contribution by the Board. A man will receive a pension of half his final wage at the end of 45 years' service. People who were in the fund before 6th April 1975 will receive their pensions on the basis of the scheme as it was then constituted.
  Broadly, there are four categories of such people—workers who retired before 6th April 1975, widows and dependent children of men who died before that date, and the following, who will have the right to future pensions under the same rules, namely, widows and dependent children of men now in pension, and men who left the industry before April 1975 and have a right to a deferred pension to be paid at the age of 65.
  In the coal industry examination, the Government recognised that the past contraction of the industry presented a financial problem for a viable pension

  1061
  scheme because of the consequent exceptional ratio of pensioners to contributing members, due to the age structure in the industry, which approaches one-to-one instead of the more normal one-to-five, coupled with the fact that pensioners can make no further contribution to the pension fund or contribute to the industry's performance.
  In order to help the Board with this burden of the past, the Government undertook, subject to parliamentary approval, which I am seeking in this Bill, to assist in meeting the existing deficiency in the pension fund so far as it relates to beneficiaries and prospective beneficiaries under the pre-April 1975 rules.
  There is no precise way of determining how much of the total deficiency in the fund is related to beneficiaries and prospective beneficiaries under the pre-April 1975 scheme, but in making a generous contribution of £250 million the Government have aimed to match the broad order of magnitude of this part of the deficiency. We propose to spread the payments forward over 20 years, during which most of the liabilities to the existing pensioners will be discharged. We are advised that this means a payment of £18 million a year.
  Mr. Patrick Jenkin: The Secretary of State has gone only part of the way to clear up a considerable uncertainty in my mind as to how these payments were to be related to the liabilities under the new pension scheme. It was clear that the new scheme would have to be funded, and yet anyone who retires after April 1975 gets his half-pay pension out of it. Clearly, a substantial amount of payment under the Bill will go to the new scheme. How is this to be calculated? Will it be done on an actuarial basis? Will it be shown in the accounts?
  Mr. Benn: The right hon. Gentleman is quite correct in putting a question of that kind. My hon. Friend the Under-Secretary of State, who has far more experience in this matter than I have, intends to deal with it in his reply, because we naturally expected that questions about it would be put. It is not possible to do a very precise actuarial calculation, as I pointed out a moment ago. What we have done is to make this contribution—which I think will be
  1062
  accepted as a generous one—on a broad estimate of what it would be right for us to contribute to a deficiency arising from the special problems involved.
  Mr. T. H. H. Skeet: I understand that this is to cure the deficiency of the fund. Is there any inflation-proofing of the fund in the arrangement?
  Mr. Benn: I do not want to pick the eyes of my hon. Friend's speech. We have taken account of the relevant factors. If the hon. Gentleman will allow me, I will confine myself to that and leave my hon. Friend to deal with the matter in detail. My hon. Friend, who has great experience in the industry and has worked very hard on this scheme, is surely entitled to amplify and describe in greater detail the arrangements made.
  I am sure that the House will agree that the sum of £250 million, together with the £100 million that the Government had already contributed to the pneumoconiosis compensation scheme, is a most generous contribution towards solving the social problems connected with the immediate past of the coal industry. It is prudent to make provision for taking account of the effects of inflation, and there is the possibility that the rates of pension paid to pre-April 1975 pensioners and their dependents may from time to time need to be revised by negotiation between the Board and the union in the light of changes in the retail price index.
  Mr. Skeet: Will the right hon Gentleman—
  Mr. Benn: No. I must get on.
  Mr. Skeet Mr. Skeet rose—
  Mr. Deputy-Speaker (Sir Myer Galpern): Order.
  Mr. Benn: I hope that the hon. Member for Bedford (Mr. Skeet) will allow me to get on. If he had not interrupted, he might have heard me saying that I preferred not to anticipate important passages of what my hon. Friend the Under-Secretary of State intends to say in reply to the debate.
  It is the Government's policy to phase out subsidies to the nationalised industries. In line with this the Government hope that the coal industry will be able to operate without the need for assistance,

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  apart from the social grants. The Government recognise that circumstances may arise in which they will need to provide short-term support to the coal industry. Stocking aid is one way in which such assistance may be given. Section 7 of the 1973 Act enables me to make grants for that purpose.
  A minor anomaly in these powers is that they do not extend to helping the National Coal Board with costs incurred when it delivers stocks to major customers for deferred payment. Such arrangements for the delivery of deferred stocks in excess of immediate requirements are desirable as they avoid the cost of double handling and keep coal moving away from the pit head. Clause 3 of the Bill will extend my powers to make grants towards the financing of such stocks sold but not paid for, although the use of this power, as with the powers under the existing provision in the 1973 Act, would need to be considered against the Board's overall financial position and the level of stocking undertaken by it.
  I know other hon. Members wish to speak in the debate. There is other business in the House today. However, having outlined the main provisions of the Bill, I should not like to allow the Second Reading to pass without using this opportunity of reaffirming what all hon. Members who follow the fuel scene closely know. I emphasise the growing importance of coal in our energy scene and the importance of contributing, as far as we can in debates in the House, to a public understanding of the enormous value to this country of our reserves of coal and the skill and contribution made by those working in the mining industry—and the contribution they will be able to make, with the good will and support of the Government, to the future of our economy.
  It is understandable, but a pity, that when we speak about energy the emphasis tends to rotate around oil. Although the mining industry is highly mechanised, its workers are highly skilled, and there are reserves that will run hundreds of years ahead. That is a vital national resource. The rate of coal exploration is now three times what it was 10 years ago. It will increase still further
  Mr. Dennis Skinner: Many Members of Parliament and those working in the industry place a great deal of faith in the Minister's words and actions. I am sure that his words today will be echoed around the coalfields. However, perhaps he should mention the question of securing markets. It is useless to explore, to dig for, and to stock coal without secure markets. Will my right hon. Friend indicate when the next two coal-fired power stations at Drax B and Burton B are to come on stream? Without those two power stations, much of what the Minister said will be irrelevant.
  Mr. Benn: I suppose that I should take it as a tribute to my speech that the points raised by my hon. Friend are those to which I shall shortly address myself. A similar situation occurred a moment ago on the inflation aspects of the pensions scheme. I could brush off my hon. Friend by saying that this matter was associated with Selby and put the matter back on that basis.
  I am building up to the point which I wish to make about coal in our economy. In presenting the Bill I hope to make clear the deep commitment of the Government to the tripartite examination and the part we have played in that. Here I come to the point made by my hon. Friend the Member for Bolsover (Mr. Skinner). It is not possible to consider the coal industry as if it had an isolated relationship with the Government of the day. Over the past six months I have brooded on the difficult problems of my new Department. I have thought about the proper approach to energy policy to meet this and other energy problems.
  I mentioned earlier the tripartite discussions, which we have resumed, and which I hope will continue, to provide an opportunity for the Minister not only to meet—as I did two weeks ago—the executive of the National Union of Mine-workers and the Coal Board separately. That is sensible and proper. I want to meet them together and to find a forum in which the supply and demand for coal can be discussed. I do not know whether this is known, but I have begun the preliminary discussions for a meeting at which the Electricity Council, the CEGB, the National Coal Board and the unions might sit together and discuss the interrelationship between

  1065
  coal mining and the demand for coal in the generation of electricity.
  That subject has long been a source of discussion, often by means of speeches made in public from one side or the other. I hope that those problems will be discussed in an atmosphere of mutual trust and confidence. That involves not only the ordering of new coal-fired stations. It involves an examination of the coal import position as well as the coal export possibilities, which we are exploring.
  At the tripartite meeting both sides of the coal industry were concerned that there should be an exploration of the possibility of conversion from gas to coal burning. That is a sensible subject for examination. The meeting was concerned to see whether other matters might not be looked at again. If I refer to those matters, I do not commit myself. I merely report that those subjects were put on the agenda for consideration.
  Those subjects included other markets for coal, including the domestic market. One of the problems is that houses are now built without flues. Therefore, the possibility of burning coal in those houses does not exist. Various other points were brought to my attention, including the question whether the conversion of fireplaces for burning coal might not be the subject of further examination by the Government. I hope that the House, in allowing me to make these points, will not think that I am making announcements about policy.
  It is not meaningful in energy policy terms for a Minister to hold a self-contained discussion with the coal industry, the oil industry, or any other industry, without regard to the market possibilities which may exist for its products. I have discussed this problem tentatively with the miners and the electricity authorities. I have found that this concept of a broader look at the interrelationship between supply and demand makes sense to them. I hope that I shall enjoy a continuation of the good will which has so far been evident in these discussions.
  The use of coal for petrochemical purposes and other downstream developments of that kind must also be borne in mind as we approach responsibly the task of developing, from our enormous resources of energy, a policy which will win support,
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  make sense and give the maximum assurance of security of supplies for this country, the most economic provision possible of energy for our needs, to take advantage of our resources and to build upon our own indigenous resources so as to promote our industrial development.
  It is sometimes easier to see our problems through the eyes of others. When the OPEC countries discovered the extent of their oil resources, they said that they wanted to build their own industrial society for themselves, using their oil revenues, so as to consolidate the increase in their standard of living. We are an old industrial society with formidable problems, which I shall not go into now. But we want to see strength in our indigenous resources that will allow us to re-industrialise and to build up our own strength. For that purpose my relations with the mining industry—an industry I am deeply proud to serve, not for the first time as Minister—will allow us to look at the matter in that way.
  This is the first Bill that I have presented as Secretary of State for Energy. This is my first opportunity in that capacity to take part in a debate on coal, and I wish to pay tribute to those who work in the industry.
  Mr. Tom Ellis: I am interested in my right hon. Friend's comments, and I agree that we must not look at the subject of coal in isolation. He is aware that the EEC has proposals for a common Community energy policy. Indeed, there are two in existence, one somewhat optimistic and the other a little less so, but in each of which coal plays a significant part. Will my right hon. Friend say whether he believes that our energy policy should play its part in any common energy policy to be adopted by the Community?
  Mr. Benn: If I were to be tempted to go into the wider areas thrown up by my hon. Friend, I might detain the House for too long, but let me make a comment in response to his intervention. As an Energy Minister who had before him proposals prepared by the Commission, I felt that at the beginning of any approach we should seek to arrive at an energy policy within the Community alongside our domestic energy policy. In discussing this subject on a wide-ranging basis, we

  1067
  should be sure that those policies conform to the interests not just of the United Kingdom but of all member countries.
  Therefore, at the first meeting of the Energy Council I suggested that it would be sensible for Energy Ministers to be invited to put in papers relating to their own domestic policies so that we could identify overlapping interests. In that way we could secure firm foundations on which to build a European policy. Where there are divergencies, though not necessarily conflicting issues, further study will be required.
  That is the response I took with me when I visited Paris, Rome, Bonn and Brussels in September and that approach was warmly received. Other member countries have put in their own proposals. An informal meeting—and I emphasise that it will be informal—will take place in Rome in December on energy matters, and I intend to pursue serious and sensitive multilateral discussion in respect of coal and electricity so that we can avoid rigidity in energy policy, whether at home or abroad, and can move forward on that basis to meet our various interests.
  I do not wish to detain the House longer. I hope that the Bill will be supported by the Opposition. The Coal Industry Examination laid the foundations for the future and the continuing tripartite discussions and multilateral discussions will help to ensure that impetus will not be lost. The 1975 Act was the first fruit of that examination, and this measure is another that will help to preserve a flourishing coal industry. I commend the Bill to the House.
  4.34 p.m.
  Mr. Patrick Jenkin: The House listened to the speech of the Secretary of State for Energy with attention, and we all enjoyed his brief reference to a previous incarnation when he was responsible for the coal industry and presided over its fortunes in some of the years before 1970.
  We debated these matters on 24th July last year, and I shall not repeat my arguments put to the House on that occasion, but until a year or two ago we all shared some responsibility for the prolonged rundown of the coal industry. Therefore, in one sense, we can all join in welcoming the new circumstances providing for a
  1068
  rebirth of the coal industry. I hope that we shall all learn from the mistakes of the past.
  The right hon. Gentleman suggested some form of joint examination in regard to the supply of coal and markets, and said that the electricity industries would be primarily involved. Two points arise from that observation. In a few weeks' time the Plowden Committee's Report is expected dealing with the reorganisation of the electricity industry. We must bear in mind the fact that it is not only the CEGB that is involved with the supply of fuels. Area or regional distribution boards are bound to take an interest in this matter because they have to supply their customers with electricity. Therefore, I hope that the right hon. Gentleman will not firm up the organisation too hard until he has considered the Plowden Report and formulated his reactions to it
  Mr. Benn: Without prejudice to what may flow from the Plowden Report, I should like to tell the right hon. Gentleman that the discussions that are to take place informally before Christmas will include the Electricity Council. I am well aware that not only the CEGB is concerned in such a discussion but, in the ultimate, the consumers are as well.
  Mr. Jenkin: I am grateful for the right hon. Gentleman's intervention and I am sure that the area board chairmen will be reassured by his words.
  Second, we must bear in mind the fact that coal is not the only commodity that is involved in these energy considerations. There should be some way of representing the other suppliers of principal energy resources, notably the oil industry whether represented by BNOC or the private companies, or indeed both. There is a need for more regular interchanges rather than bilateral discussions with the Minister.
  The heart of the Bill lies in its new borrowing powers. The right hon. Gentleman spoke of the need to draw on the Contingency Fund. As a former Treasury Minister, I suppose I should know the answer to the question that I am about to put to him, but I cannot recollect any case involving a nationalised industry that has exceeded its borrowing powers and then borrowed from the Contingency Fund. To judge by the Secretary of State's expression, I have no doubt that

  1069
  he is about to tell me that such a case occurred when I was Chief Secretary to the Treasury. These are perhaps details which Treasury officials do not necessarily bring to the attention of Ministers, but nobody on this side of the House will wish to leave the Secretary of State in an embarrassing situation any longer than is necessary on that score.
  Debates on Bills relating to borrowing powers are traditional occasions for a wide-ranging discussion, and I hope that I shall be forgiven if I do not confine myself strictly to the Bill that is before the House.
  It is timely that we should now be debating the subject of coal. Despite the new opportunities for coal, it is no secret that there are anxieties about the situation both inside and about the industry. The anxieties within the industry relate to whether the recent build-up of stocks heralds a new rash of pit closures, and a possible reverse in the £600 million expansion plans. Outside there are anxieties whether rises in coal costs in recent months and productivity difficulties might threaten to make coal uncompetitive in some markets. It is true to say that the atmosphere which a year or 18 months ago was almost euphoric, has now given way to a more realistic state of affairs in which some of the optimism has evaporated. People must recognise that the industry has ahead of it a fairly stiff task.
  The coal industry faces a combination of industrial recession, inflation, soaring energy costs world-wide that in turn reflect on mining costs, as well as pressures to save energy via the Government's propaganda campaign; and it also faces problems as a result of reduced demand as an effect of higher prices. These matters all tend to create a new situation, and it is a situation to which the industry must adapt.
  The final Report of the tripartite examination contained many wise words. The Report was published in November last year, almost exactly a year ago, and paragraph 10 contained a comment which I shall quote. After examining the future demand patterns of coal, the Report talks of the
  "even greater opportunities for coal—always providing that sufficient output can be achieved with assured continuity of supply at a cost
  1070
  which can meet the long run competition from other sources of energy."
  That was in November of last year. Yet by July of this year Sir Derek Ezra, Chairman of the National Coal Board, had this to say in the introduction to the Board's annual report:
  "through last year's coal price increases, the competitive advantage over oil has been very largely eroded."
  I shall want to look at some of the detailed figures later on, but this is an indication of the measure of the change, even in the past year.
  When we bear in mind that the Coal Board's profit on its mining activities, as opposed to its ancillary activities, was one-tenth of 1 per cent. of its turnover—almost exactly one penny a ton—and that that was struck after revenue subsidies of £68 million—something over 50p a ton—the House will realise that in spite of the sixfold increase in oil prices this is an industry which will have to work hard to fulfil the promise held out for it in the tripartite examination. It is therefore timely that we should have this debate about the industry to discuss some of its problems.
  By a chance encounter yesterday—I hope that the Under-Secretary will forgive me for referring to this—I was introduced to a leading member of the Scottish National Union of Mineworkers. I mentioned that we would be discussing this Bill today. That gentleman said, "You will be agin' it, won't you?" I said, "No. On the contrary we shall be supporting it and giving it a fair wind." He said, "Ah. You have changed your mind." I said, "Of course not."
  I want to put on record the view which I expressed 18 months ago during the Committee proceedings on the last borrowing powers Order—the view to which my party subscribed in its manifesto at the last election—namely that we wholeheartedly support the commitment to the "Plan for Coal". I remain convinced that this is an industry which has an esential rôle to play in the energy strategy both of the United Kingdom and of Europe. I welcome what was behind the question asked of the Secretary of State by his hon. Friend the Member for Wrexham (Mr. Ellis).
  Our coal resources are huge—many times those of the oil resources so far discovered and, to hazard a guess, many

  1071
  times more than those ever likely to be discovered. We have a skilled and sophisticated mining industry. British mining equipment and techniques are marketed all over the world. Nuclear power, though vital to meet the growth in electricity demand—certainly up till the end of the century—and vital for the part it will play in conserving fossil fuels for suceeding generations, cannot possibly replace coal for many years to come. It is important that everybody should recognise that.
  I would like to draw to the attention of the House what is the most recent analysis by the Goverment of the energy supply prospects for the next 15 years. It is necessary to dig for this information. It is in Annex C of the Memorandum submitted by the Department of Energy to the Energy Resources Sub-Committee of the Select Committee on Science and Technology last March. It is published on pages 188–213 of the Committee's First Report for 1974–75, House of Commons Paper 487.
  The hon. Member for Bristol, North-East (Mr. Palmer), who was the Chairman of the Sub-Committee, is unfortunately not present today. Not the least valuable function of these Select Committees is the evidence which is made available for the first time.
  Annex C is entitled:
  "Energy Review 1974: Policy Framework and Forecasts."
  It is the result of a computer study intended to produce a whole range of forecasts based on a wide range of alternative assumptions about growth rates, energy prices, policy choices and so on. The heart of it is Table 1 on page 200 which sets out the ranges of supplies between 1972–73 and 1990 of the various energy sources.
  The figures show that in 1972–73 128 million tons of coal were consumed. In 1975 the range was 119 million tons to 133 million tons. Regrettably, the figure will be nearer the lower end of that bracket. For 1980 the range is much wider, 107 million tons to 154 million tons. In 1990 the range moves from 77 million tons to 196 million tons at the top end.
  A sample projection, which is stated clearly as being for illustrative purposes
  1072
  only—and I do not want to read more into it than is intended—appears on the next page and gives much more specific figures. In 1973 there is a figure of 131 million tons, in 1980 it is 130 million tons, in 1985, 135 million tons and in 1990, 150 million tons. These are much more specific examples because, as paragraph 9 says, they are based on the NCB's "Plan for Coal".
  The first point to make is that all of this was based on a computer study carried out in the summer of 1974, nearly 18 months ago. If the Government were asked to produce a similar study now, would the figures be the same or would they have changed? We have had further substantial delays on nuclear plant and with North Sea oil. There are changes in oil prices and there is evidence of the effect of much higher prices for energy generally on the level of demand. I ask the Government whether they will consider publishing a 1975 survey—an up-dated version of Annex C.
  Do the Government intend to publish regular annual reports of this nature? They are extremely helpful to those who seek to discover how Government thinking is moving and how we are fitting into a developing Government strategy for energy. The right hon. Gentleman is always preaching the virtues of open government. I can only commend to him the view that this would be a welcome move towards that. What Annex C shows is the continuing rise in opportunities for coal on many of the assumptions, provided that it remains competitive.
  At this stage I wish to read a passage from the Government's evidence to the Sub-Committee which comes in paragraph 11, when it is said:
  "If coal's present price advantage over oil were to be lost, there would of course be a substantial shift of demand away from coal; and if the threshold of competitiveness between oil and coal for power station fuelling (which requires coal to be significantly cheaper than oil) were to be breached, total coal demand could drop to 80–90 million tons."
  I think that is right. It undermines what the hon. Member for Bolsover (Mr. Skinner) was seeking to argue—that there should somehow be an assured demand for coal. I do not think that that is realistic if expressed simply in that way. It has to be on the basis of competitive pricing, about which I will say more later.

  1073
  At this stage what I seek to do is identify the Opposition with the commitment embodied in the "Plan for Coal" and the thinking behind Annex C, namely that the long-term future of coal is assured if the necessary conditions of cost and security can be met.
  Another reason for long-term confidence in the future of coal—the right hon. Gentleman referred to this briefly—lies in developments in the utilisation of coal which are most exciting. There are not only improved combustion techniques, which is important enough, but also the upgrading of ordinary coal to metallurgical coke, the use of coal as a source of material for industry, gases, hydrocarbon liquids and solid materials ranging from rubberised sheeting and graphite electrodes to such sophisticated products as carbon fibres.
  It is not too strong to say that the coal conversion industry is enjoying a rebirth. I listened to Dr. Pierre Rousseau's fascinating coal science lecture a month ago when he spoke of the new world-wide interest in coal processing. He pointed out that all the processes in use today are basically the same as those which were in use 30 years ago. They are based on the technology of 30 or 40 years ago—Fischer-Tropsch, the Lurgi process, and so on. There have been few major innovations in the last 30 years, although one has been made in this country—the development of the Lurgi process to produce synthetic natural gas, as in the plant at Westfield.
  Today all that is changing. Some of my hon. Friends and I had the good fortune to visit Stoke Orchard, the coal research establishment, on Monday. I was greatly impressed with the range and quality of work being done there. Half of it is financed by the National Coal Board. A third of it is financed by the European Coal and Steel Community. I hope that I shall not be thought guilty of making a political point when I say that I hope that the Secretary of State will bring that to the attention of his committee, which is the successor to the Common Market safeguards campaign. The balance of the expenditure is met by industry, including, interestingly enough, the oil industry.
  I should like to say a few words about the question of fluidised bed combustion.
  1074
  It is not too strong to say that the work at Stoke Orchard represents a major breakthrough. Only a week ago the 10-nation agreement of the International Energy Agency provided for international collaboration in developing coal technology with a major project of fluidised combustion for Britain. Mr. Leslie Grainger said:
  "These agreements represent a great breakthrough in the advance of coal technology and also in international collaboration. It is the biggest-ever international programme involving coal producers and users and we are determined to see rapid progress in the technology of using coal as a real contribution to solving energy problems at competitive prices."
  That optimism is fully justified. There are three factors about fluidised combustion. It has a much higher thermal efficiency. It can raise the thermal efficiency of power stations from 30 per cent. to 40–42 per cent. which is significant in terms of fuel usage. It can give improved pollution control because the sulphur can be fixed into the limestone in the fiuidised bed. But, perhaps most significant—and this was something which I learned for the first time at Stoke Orchard—it largely eliminates the economies of scale in power-station building. One can achieve broadly the same measure of overall efficiency on a small power station as on a giant power station.
  What does this hold out for the future development of coal-fired electricity? Surely it is that it will make small local stations just as viable in producing electricity as the giant stations, but with this critical advantage: the small local stations are most easily adapted for using the waste heat, for district heating schemes to supply neighbourhoods around the stations. It is exceedingly difficult to see how one can develop the effective use of waste heat in a 2,000 mW power station, but with a small 100 mW station it becomes feasible.
  I should have thought that there was everything to be said for linking the development of fluidised bed technology with Dr. Marshall's study on the combined use of heat and electricity. I was a little surprised to learn that Stoke Orchard is not involved with Dr. Marshall's study; yet, with fluidised bed technology there is the opportunity of making a reality of something for which many of us, particularly my hon. Friend

  1075
  the Member for Derbyshire, South-East (Mr. Rost), have been arguing for some time.
  Mr. Richard Kelley: Does the right hon. Gentleman agree that the fluidised bed combusion system is being explored by an organisation which has nothing to do with the European Coal and Steel Community? Does he hope that the benefits which may accrue from the research and development taking place in this field will be open to a much wider range of organisations than the ECSC?
  Mr. Jenkin: I think that I have pointed out that the £10 million project is being financed by the International Energy Agency. Perhaps that meets the hon. Gentleman's point
  Another crucial process at Stoke Orchard is the super-critical gas extraction process. This is real "third generation" coal technology with a promise of a major leap forward in coal processing as a source of gaseous and liquefied hydrocarbons as raw materials for industry. We have been told that there is a project to build a pilot plant with ECSC help. We shall watch with interest how the project develops.
  For all those reasons, it is right that we should look to the future of the industry with confidence and I hope that my words will be noted not only in Hobart House but also in Euston Road.
  I wish however to emphasise the three cautionary provisos in the Final Report: the achievement of sufficient output; an assured continuity of supply; and at a cost which can meet long-run competition from other sources of energy. I should like to examine the prospects for the industry under those heads and to make a few comments on the Bill.
  It is no secret that the level of productivity in the past five or six months has been a cause for concern. The latest issue of Energy Trends, which came out a couple of hours ago, shows that over the past five consecutive months output per manshift has been lower than it was in 1974. There has been some improvement in the last month and it is now only a few decimal points down on October 1974. But that is not all that satisfactory and I know that the Under-
  1076
  Secretary of State is paying careful attention to this matter. It was stated in the Final Report:
  "We appreciate the technical and other difficulties, but the extra output from even a modest increase in the average machine-running time per shift would have a real impact on the fortunes of the industry".
  That accords exactly with what I have been told by mining engineers and miners at the coal face.
  I hope that those who have worked in the industry will forgive me for saying this—and it is easy for people who have not worked in it to make these points—but I think that I recognise all the difficulties. Mining is arduous and uncomfortable work, and safety plainly must have a very high priority. But I find it difficult to believe that it is not possible to work out a proper incentive scheme based on the output either at each coalface or at each colliery. Such a scheme might well have the desired results mentioned in the Final Report.
  Many of us regretted it when such a scheme did not find favour with the industry, because the national scheme has turned out to be very much second best, and there may be two or even three quarters when no bonus at all will be paid to the miners. I noticed that Mr. Scargill is still voicing opposition to a local scheme because, as he says, it would be
  "based on man against man and pit against pit".
  I say with respect to Mr. Scargill that there is no limit. It is a question not of sharing a finite cake but of giving people the incentive to get a little more machine time and to produce the coal which could transform the economics of the National Coal Board.
  I hope that another attempt will be made to devise a scheme. I realise that this is a matter for the industry and not for the Department, but it will be helpful if the Under-Secretary of State can tell us what is going on.
  I was interested in what the Secretary of State said about Selby. If work is to start in the spring, a decision on planning must be made in the next few weeks. There are other prospects. Coal has recently been discovered under the Forth. I gather that coal has been found at Cotgrave, in Nottinghamshire; and that a new thick seam of tophart coal has been

  1077
  found in the Belvoir Vale. The resources are immense, and they need to be developed.
  I should like to make a point about the exploration industry. At the time of nationalisation, there were 27 coal exploration firms in business. Today there is only one British firm.
  One knows the reasons for this, but perhaps the Government could urge the National Coal Board to look favourably at encouraging the one remaining British firm, which is now facing competition from foreign firms, especially Canadian and German firms. We really need a British capability in this field.
  I hope that we shall get more information at some stage about the "Plan for Coal". It is all very broad and general at present. In the case of previous borrowing powers Orders or Acts we have had from the NCB a substantial body of information about the plan, the timing of the investment, and where the main projects are. It is a matter for regret, and unfair for the industry, that we are asked to consider this Bill without that sort of information before us. I hope something will be said on that fairly soon. But broadly we support the plan.
  The second requirement of the Final Report was "assured continuity of supply". I have no doubt that Ministers, from the Secretary of State downwards, are losing no opportunity of stressing the damage to the confidence of customers if there are interruptions in supply. The unhappy events of 1971–72 and 1973–74 have cast a long shadow. One recognises the forces at work within the National Union of Mineworkers, just as they are at work within many other unions, and one can only hope that the wiser counsels will prevail.
  I read with a little irony this report in the Daily Telegraph this morning:
  "Moderate miners' leaders in Yorkshire said last night that any settlement with the junior doctors which contravened the Government's ani-inflation pay code would spark off a pay revolt throughout the coalfields.
  I do not want to hark backwards, but those are words which fall strangely from a union which demanded two years ago to be treated as a special case. The union said that its claim would not break the Pay Code at all. Instead, it brought down a Government by insisting on the demand for special treatment.
  1078
  The main difference today is that there is now an Opposition which is making it abundantly clear, as the Prime Minister acknowledged this afternoon, that it will offer no comfort or support to those who seek to break the pay policy. Would that it had been so two years ago.
  The truth of the matter is that
  "ludicrously excessive pay demands forced through by brute force can wreck the industry."
  Those words were said earlier this year, according to a Guardian report of 22nd May 1975, by the right hon. Gentleman the Secretary of State for Industry.
  There are plenty of voices now arguing that we cannot risk being held to ransom again, and ought to get out of coal as quickly as possible. Nothing does more to undermine the efforts of those of us who stand out against that view, including Her Majesty's Opposition, than threats of industrial action being constantly bandied about. It can only destroy the faith of coal users. I hope this view will gain currency in the coalfields.
  The talisman of our support is that we supported the pneumoconiosis scheme, and we support the pension fund scheme, where we have, since 1973, acted in support of the principle of support from the Exchequer.
  My next point goes a little wider than the Bill but I hope that perhaps the Under-Secretary of State will comment on it in his reply. My hon. Friend the Member for Guildford (Mr. Howell) asked a Parliamentary Question on 11th November 1975, and from the Written Answer, reported in the Official Report at cols. 619–20, it appeared that in one year the nationalised industries' pension schemes were having to be helped to the tune of nearly a quarter of a billion pounds—£247·8 million. That is a staggering sum in a single year. It is the direct consequence of inflation, and my hon. Friends will want to know a little more about the Government's thinking on this business of subventioning nationalised industry pension schemes.
  I turn now to costs, and this is the key question. At the time of the Pay Board's Report, coal was 3p per therm into power stations, and oil was between 6p and 7p per therm. The most recent figures I have received from the Central Electricity Generating Board show that fuel oil has gone

  1079
  up from 6p or 7p to 8·8p per therm, and coal from 3p to almost 7p per therm. Even those averages conceal the realities, because there is now a significant overlap between high-cost coal and low-cost oil.
  Sir Derek Ezra made the point when he spoke to the National Union of Mine-workers' conference at Scarborough, and said that
  "The average effective price advantage of coal over oil delivered to power stations has now been eroded from 44 per cent. to little more than 10 per cent. by a virtual doubling of the price of coal."
  That was in The Times of 9th July 1975.
  There lies the nub of current anxieties. Oil will go up a bit as a result of the 10 per cent. OPEC price-hike. Coal will have to go up, probably in March, to meet the effects of the £6-per-week pay rise in January. But is it right that there should be further subsidies when the Government have said that they are trying to cut out subsidies? Here we have what is bound to be an extension of the stocking subsidy.
  This again, as the Secretary of State made clear, came from the 1973 Act, but by extending the subsidy to coal at customer's premises, are we not risking substantially increasing the amount of the subsidy? The total figure for subsidies was £130 million in 1973–74 and £68·2 million in 1974–75. How much of this was for the coal stocking subsidy, and how much is the coal stocking subsidy expected to be in the current year? Perhaps the Under-Secretary will answer these questions when he winds up the debate.
  The Secretary of State said that this was a "short-term fluctuation". I hope he is right. But it cannot be right at this stage that we should go back on the policy of eliminating revenue subsidies—other than, of course, the social costs which we all accept—from the nationalised industry pricing. Is there really need for subsidies of this kind? The public sector borrowing requirement is over £12 billion this year, and there is an obligation on all Departments to try to keep the calls on the public Exchequer as low as possible.
  This is a short but very important Bill, and although the main provision is a substantial increase in borrowing, and therefore a new burden on the Exchequer,
  1080
  it is made pursuant to a policy for coal which has the full support of Her Majesty's Opposition. We shall want to examine the clauses in more detail in Committee, but I would not advise my hon. Friends to oppose the Second Reading tonight.
  5.7 p.m.
  Mr. George Grant: I broadly welcome this Bill. The two main objectives are to maintain the real value of the miners' pension fund and to facilitate the stocking of coal. Men who have 10 years' service in the industry as from 1st April 1976 will have a £1 a week increase, taking it to £4·60 a week. As a Member sponsored by the National Union of Mineworkers, I am confident that in this economic climate the union will also welcome the measures taken in the Bill.
  I welcome the opportunity to discuss the mining industry within the context of the areas covered by the measures in the Bill. I agree with the right hon. Member for Wanstead and Woodford (Mr. Jenkin), the Opposition spokesman, when he says that there are anxieties in the mining industry, and that things are not just as cosy as my right hon. Friend the Secretary of State seemed to indicate in his speech.
  I am not satisfied with the present policy of the National Coal Board, or, indeed, with that of my Government. I am sure that no Member of this House can feel satisfied that today the British miner is the only miner in the European Economic Community who does not retire at the age of 60 or lower. In the East European countries miners retire at 60, or in some cases at 55, with two-thirds of their wage as pension
  The present miners' pension scheme is quite inadequate. Whenever I ask Parliamentary Questions about the reason why the British miner cannot retire at the age of 60 or even at 55 with an adequate pension, I am told that the substantial amount of money required would be too great and that the number of men involved would make such demands on the labour force that it would be quite impossible for the National Coal Board to accept it. I do not accept either of those premises. At the moment, about 5 per cent. of our male population is unemployed. I ask the House to look at

  1081
  the situation in this light. We have young men unemployed through no fault of their own but because they cannot get jobs. I ask the House to consider what they are being paid and whether it is they who should be put out to grass first. Should we virtually pension off young men capable of doing a job of work or men who have worked 50 years in the coalmining industry?
  More often than not, miners approaching the age of 65 are literally crawling to work. They work in dust. They suffer from bronchitis, which does not qualify for industrial injuries benefits. Many are maimed as a result of having to lift heavy weights in cramped conditions. Their vertebrae and muscles are stretched beyond belief. As a result of crawling around to do their work, their legs cannot carry them. A situation of this kind is a disgrace to the British nation. It is scandalous that we are so far behind the rest of the industrialised world, and it is a state of affairs that should be put right.
  I accept that there are difficulties, and I do not expect them to be dealt with overnight. But, as soon as the position becomes clearer, the Government should put it right. Miners' retirement should be phased so that progressively men can retire at 64, 63, and so on, with the ultimate aim being a retirement age of 55.
  It is sometimes said that other industries would demand the same. I remind the House that today we have local government officers, police, civil servants and Officers of this House who retire at 60. Again I ask, who should be put out to grass first? These are the real issues, and I hope that the Government will think seriously about them.
  If the mining industry were afforded this kind of treatment, this in itself would be a way to recruit men into the industry, where their value would be recognised. However, the worth of a man who works away from sunshine, exposed to geological hazards and doing a job with a high accident rate should be recognised by society.
  The most important factor affecting recruitment is morale, and morale is very important in the mining industry, as it is in any industry.
  I accept that stockpiling is necessary. But, having said that, I invite the House
  1082
  to consider what stockpiling means to men in the industry. Let us not forget that many of them have in the past 20 years seen their industry reduced from a work force of 600,000 to the present figure of 240,000. In my own county, manpower has been reduced from 50,000 to 10,000. Morale is important in the mining industry. However, in my opinion lack of communication has a great deal to do with the present state of morale. There is a lack of trust.
  Recently, I visited my hon. Friend the Under-Secretary of State for Energy to seek his clarification of a report in the Newcastle Journal to the effect that some seven pits in Northumberland were to be closed in the next four years. In fairness to my hon. Friend, he tried to scotch the rumour. I was grateful for his statement that there was no truth in it and that the National Coal Board had made no such decisions. However, my promise has not proved to be good enough for the men of Northumberland, because they have been quite unable to clarify the position at their own collieries and to get assurances about the future.
  In my opinion, joint consultation in the mining industry is a farce. We have a situation where the chairman of a joint consultative committee is a manager. From my own experience and from my discussions with colleagues it is clear that the system has not changed since I left the industry. The manager can tell the trade unions what he wants to tell them. But, in fairness to the colliery managers, it must be said that on many occasions they do not know the position themselves.
  I have seen no evidence that consultation in the mining industry can be described in any way as workers' participation. I am sorry that my right hon. Friend the Secretary of State has left the Chamber, because I know that he has been a loud, clear advocate of workers' participation and rightly so.
  I believe that this country has to look seriously at workers' participation. The old days have gone. We have to look at the current situation. We must get away from confrontation—the spirit of "they" and "us"—and get down to cooperation. If we cannot achieve better than we have in the mining industry by joint consultation, workers' participation—call it what we may—bearing in mind

  1083
  that 95 per cent. of the men are in one union, what chance have we in industries where there are 30 or 35 unions? I ask my hon. Friend to convey to the Secretary of State that I expect him to scrutinise the mining industry closely. If we cannot achieve more than we have so far, we have little chance of branching out into workers' participation, for which there is an urgent need.
  The Under-Secretary of State for Energy (Mr. Alex Eadie): My right hon. Friend has been compelled to leave the Chamber to attend to urgent Government business, and he intends no act of discourtesy. I am sure that he will pay great attention to what my hon. Friend is saying.
  Mr. Grant: I am grateful to my hon. Friend. Before I leave consultation as it applies in the mining industry, I cannot help reflecting that in the early days of nationalisation the men employed as industrial relations officers more often than not had worked in the industry and had come up through the trade unions. Today, the policy of the National Coal Board is to recruit people with academic qualifications who have not had their hands dirtied in the industry. The industry suffers as a result.
  In my view, the tripartite talks between the unions, the National Coal Board, and the Government made a lot of headway and achieved considerable sucecss. They sought to create a new framework for the industry. However, we have not taken one step forward in our search for a national energy policy.
  How can we claim to have an energy policy when we have the ridiculous situation of coal being imported? I appreciate that certain grades of coal are needed for the chemical and steel industries because they are in short supply in this country. But I cannot accept that there is any need—nor has there been for many years—for the Central Electricity Generating Board to import coal for power stations. How can we claim to have an energy policy when we have the ridiculous situation of the Chairman of the Central Electricity Generating Board determining which fuel will be used in future power stations? If we are to achieve an energy policy, the
  1084
  Government must spell out more clearly which fuel will be used, and so on.
  I understand that 12 power stations are under construction but that not one is coal-fired. In the planning process there are 20 power stations, not one of which is to be coal-fired. In addition, we have heard about a closure programme for coal-fired power stations.
  When the miners hear about the development of Selby and other areas and projects which have been mentioned today—for example, the extension of opencast mining—what can they think but that these developments mean a further pit closure programme? That is not the way to maintain confidence in the industry. In October 1969 Drax B was announced as a coal-fired power station. We are still waiting for it.
  We must have an energy policy to bring confidence not only in mining but in the whole of our energy industry. The Government must lay down firm guidelines if we are to achieve an energy policy. How can any Government or industrialist expect maximum production with these clouds of insecurity hanging over the people who work in the industry?
  I repeat, we must seek to take the "them" and "us" out of the industry. We must get rid of confrontation. We must get down to co-operation. We must let the workers know what is happening and give them the opportunity to take responsibility within their industry.
  The tripartite talks achieved some success. But, if the warnings which I have given today are ignored, the success achieved in the tripartite talks will soon be eroded.
  5.24 p.m.
  Mr. T. H. H. Skeet: The hon. Member for Morpeth (Mr. Grant) has probably misconceived the purpose of Clause 2 of the Bill. It is not to maintain the standards of pensions, but, as the Secretary of State correctly portrayed, to deal with deficiencies in the superannuation fund. This provision was first made in the Coal Industry Act 1973 which the Conservative Government brought in to try to deal with the deficiencies. I accept that Section 5 of the 1973 Act is to be repealed and that the new provision will now take its place.

  1085
  In April 1975 the assets and liabilities of the fund were calculated. An actuarial deficiency of £250 million was found. From my researches I have discovered that the Government are reluctant to pay the fund a lump sum of this amount and propose that the payment should be made over 20 years. The discounted present value of £18 million a year for 20 years has been calculated to be the same as £250 million. In other words, £18 million a year for 20 years is worth the same amount to the fund as a lump sum of £250 million now.
  It must be appreciated that this is to cure the deficiency. It is not intended to contribute towards the inflation-proofing of pensions, about which I asked the Secretary of State. However, there is a provision, subject to review, for increasing the £18 million a year, which can be done by Order in this House. But it will have to be on affirmative resolution of both Houses of Parliament and it will be subject to further debate. The matter would have to be reviewed carefully by hon. Members in this House and by their Lordships in the other place.
  As I see it, there is no obligation on the mineworkers' pension fund to increase pensions fully in line with the cost of living. I hope that the Under-Secretary of State is listening.
  Mr. EadieI am listening to every word.
  Mr. Skeet: Will the hon. Gentleman confirm that, if the fund does not raise rates to compensate fully for rises in the cost of living, there will be no obligation on the Government to reimburse the fund fully for the extra expenditure incurred? If the miners were to be fully compensated for the degree of inflation—at its present rate of 26 per cent.—what would be the cost to the taxpayer, over and above the £250 million, which must be subscribed prior to 1994 to deal with the deficiency in the fund?
  I must apologise to the Under-Secretary of State as I shall be abroad by the lime that he replies to the debate. I apologise in advance, but I shall certainly read with considerable interest what the hon. Gentleman may say on this important topic.
  Mr. Skinner: Does the hon. Gentleman realise that he has got some cheek talk-
  1086
  ing about miners having inflation-proof pensions starting from the ridiculously low level of £3 when, in the next breath, he has the gall to say that when the answer comes from the Minister's mouth he will be abroad? It is time he understood that the miners, during the past few years, have been trying to get some of the benefits which they have not had in the past.
  Mr. SkeetI will treat the hon. Gentleman's remarks with the contempt that they deserve. I should explain that I am going on a parliamentary delegation and that some of the hon. Gentleman's colleagues will be on it as well.
  Mr. Skinner: Not me.
  Mr. Skeet: No. It is just as well that we do not send you abroad.
  Mr. Deputy Speaker (Mr. George Thomas): Order. I am willing to be sent abroad at any time.
  Mr. Skeet: I think that you, Mr. Deputy Speaker, would be one of the United Kingdom's best ambassadors, but not the hon. Member for Bolsover (Mr. Skinner).
  In recent years, we have been disturbed at the low quantity of coal which has been exported. It seems absurd that we should import coal from West Germany at £40 per ton compared with £29 per ton from South Africa, £16 per ton from Australia, £24 per ton from the United States of America and £14 per ton from Poland when production costs in the United Kingdom are as low as £11·98 per ton on 1974–75 figures.
  The Secretary of State spoke about an energy policy for Western Europe—indeed, for the EEC. Most of our export trade in coal, although tiny—we exported 1·8 million tons in 1974 valued at £20 million—has been to West Germany and France. We have exported coal for prices ranging between £12 and £18 per ton. That is very low. If we are to have a comprehensive energy policy, and as we are trying to persuade the Europeans to buy our oil, would it not be useful for the Secretary of State for Energy to go to Brussels to ascertain whether they will be interested in buying some of our coal at a suitable time when we have it available.

  1087
  The hon. Gentleman may care to listen. It may be a point of congratulation to the Board that it has joined International Continental Fuels Ltd. in which Commercial Union has taken an interest to engage in the distribution of international coal. In the coming year about 3 million tons of coal will be dealt with. This should be a money spinner for the Board and I hope that the Government will give further thought and encouragement to this matter.
  Clause 3 deals with the financing of stocks. There has been considerable argument about this. This was started by the 1973 Act and is continued in the Bill. There has been the argument with the CEGB. It indicated that the ceiling above which the Board should finance stocks would be 12 million tons. The NCB responded at 15 million tons. A figure was eventually settled between them of 13·5 million.
  It may be a satisfactory idea to consider having a State stockpile much on the lines of the United States strategic stockpile. This has in fact been recommended by the Federal Government in Germany—to have such a stockpile to avoid Ruhrhohle and other companies being involved in the necessity of laying aside a considerable sum of money for dealing with stocks which may be indispensable in future years. I recognise that one of the reasons for having stockpiles is labour troubles in the industry. We all earnestly hope that there may come a time when they are eliminated from the mines.
  The main point of the Bill is to give the Government additional money to borrow. This is contained in Clause 1. I think that a modest sum has been provided. It will go into capital equipment, but when I see the size of the resources that are available to the United Kingdom I think that the moneys coming forward are very small indeed.
  The total resources of economically workable coal in the United Kingdom in seams of at least 24 inches and at a depth of 4,000 feet work out at 97 billion tons. Coal economically worked at existing collieries, plus potential new mines and opencast, total only 4·3 billion tons. The result of this is rather curious. Thus, the amount of coal that has been developed in the United Kingdom is only
  1088
  4·4 per cent. of the total. At an annual production rate of 120 million tons—and that is a low figure—potential resources would last for 800 years to bring usage of this commodity up to 2785 AD.
  The Board may possibly decide that it is satisfied with its existing programme, but I think that we ought to be satisfied a little more that what it is doing will result in more recoverable coal at competitive prices. I wrote to Mr. Mills of the NCB to find out what his new 10-year programme to 1985 involved. It is apparent that the programme referred to 15 new collieries, and we know most of them—at Royston, Selby, and so on—but he says that a feasibility study is going on at two places, Stafford and a site south of the Trent.
  On the other hand, he says:
  "The remaining 10 are areas in which drilling is in hand to determine whether sufficient coal is present to justify a feasibility study."
  Obviously this is a contingent liability and it might be in the future that the Board will not go ahead with all these schemes. Perhaps the Minister will clarify this matter.
  Mr. Mills also mentioned—and it was referred to this afternoon by the Secretary of State—that 16 major investment projects will produce about 12 million tons additional capacity. I know that 60 per cent. of these are in the East Midlands and Yorkshire, and I welcome that. Only two are in Scotland, and, understandably, two are in Kent, with seven in South Wales.
  Dealing next with the question of accessibility, I hope that the Minister will say a little more about the availability of reserves that are open to the Board.
  Mr. Skinner: Turn over the page.
  Mr. Skeet: The hon. Gentleman will have an opportunity later to take part in the debate.
  Mr. Skinner: The hon. Gentleman has turned the wrong page.
  Mr. Skeet: I know which page I have turned. The hon. Gentleman has no leaves to turn over so perhaps he will listen to what I have to say.
  In an interesting article in Chemistry and Industry of 16th August 1975 mention was made of considerable coal supplies underlying the North Sea. The

  1089
  article says that in the southern sector of the North Sea there are seams between 6-ft and 12-ft and that this is the basis for the natural gas formations from which the British Gas Corporation is deriving considerable supplies. The authors indicate that there is a high probability of a large coal basin the western extremities of which are the Nottingham and East Midlands coalfields, while the eastern extremities are the Dutch, Belgian and German coalfields. If the Minister has any information that he can contribute on this matter I am certain that the House will be interested to have it, because it will mean that this country has even more resources available that may be developed in future years.
  May I add two points about Selby? In answer to Questions, and today, the right hon. Gentleman said that the inspector's report has not been received. Bearing in mind that the Christmas Recess is nearly upon us, will the Minister have time to digest it, and will the planning procedure be put through to enable the first phase of Selby to be completed on time? It would be a great pity if the industry could not get 10 million tons by the early 'eighties and it is essential that this scheme should be continued as planned.
  My other point is that in Committee upstairs, when dealing with another Bill, the Minister mentioned an interdepartmental working party. I understand that it has presented its report on mining subsidence. Is a statement to be made on the matter? Is the Minister prepared to make a statement on this tonight? I ask that because this will involve big problems for Selby, and one would like to know whether more emphasis is to be given to producing coal or whether emphasis is to be given to the payment of compensation as a way out of the problem. I mention this because while the Board apparently will safeguard Selby Abbey—a 900-year old church—nevertheless should the Board accept the view put forward by Selby Council it would mean that if pillars had to be maintained under a broader area, coal to the value of about £84 million would be lost. It would be helpful to know the Minister's intention.
  May I prevail upon the Minister to make full use of opencast mining? I know that it is the Government's policy
  1090
  to increase this from 10 million tons to 15 million tons. It has been higher before, as it was in 1958, but I feel that it has three characteristics that are worthy of consideration. First, the coal is very much cheaper to produce. In the 21 years existence of the Opencast Coal Executive, 187 million tons of coal have been produced from opencast mines, leading to a net profit even after restoration of £146 million. This is a factor which the Board cannot ignore.
  The other factor is the contribution to safety. In opencast mining people are not working underground, and therefore the risk of accidents is decreased. Owing to the shortage of anthracite, opencast mining is the key to the problem. If the Government are prepared to authorise more of these pits, perhaps the problem could be overcome. There is a shortage of this type of coal in the market, and as there are adequate resources in Wales and elsewhere, the Government would be wise to push further ahead with this form of development.
  The future of the industry has been touched on briefly. I want to be brief so that other hon. Members can state their case. My right hon. Friend mentioned fluidised combustion systems, their compactness and heat transfer capability and the method of eliminating such things as sulphur and nitrous oxides. But one point that he did not mention was its great value in combined cycles, employing both gas and steam turbines. It can improve the generating efficiency of fossil fuel generating stations from the present 35 per cent. to well in excess of 40 per cent. I could emphasise this more realistically by saying that a 2,000 mW power station could save up to 500,000 tons of coal per year by using the combined cycle system.
  There is also the prospect of liquefaction and of gasification of coal. On the latter I cannot do better than refer to the answer given by my right hon. Friend the Member for Wanstead and Woodford (Mr. Jenkin) on 18th January 1974:
  "It is too early to give a realistic estimate of production costs but on our present information they are likely to be considerably higher than those of North Sea gas."—[Official Report, 18th January 1974; Vol. 867, c. 186.]
  That is a very good estimate, so I do not think that we shall find much coal gasification coming in within the 10-year

  1091
  period, although I am optimistic about the development of fluidised combustion systems. Further liquefaction is not likely within this time scale. I would refer on this subject to an answer by my right hon. Friend in the very next column of Hansard.
  Finally, and of more encouragement to the NCB, is its work in chemicals. Coal can be used in the production of aromatics such as benzine, toluene and xylene. This is some years on and it may participate in acetylene technology. This is a well-known technology which will probably be improved within 15 years. If there is any shortage of oil as it is consumed and used for transportation, we do have the eventual prospect of the coal industry coming into its own.
  That is all that I have to say—
  Mr. Skinner: Hear, hear.
  Mr. Skeet: I am sure that the hon. Member for Bolsover will be glad of the opportunity to get in after I have spoken. It is only right that those who do not come from mining areas should be able to contribute—
  Mr. Skinner: Declare your interest.
  Mr. Skeet: I will. My interest is an interest in the energy situation of this country. I wish to see the best use made of its resources. I have said that before. It is only right that I should do so again.
  I unreservedly support the Bill. Clause 1 is essential. There have been many borrowing requirements Bills in the past. We have proposed some to the House ourselves. There is some anxiety about Clause 2, which will be discussed in Committee, but generally it is designed to help the superannuation fund. I have covered Clause 3 already. I hope that the Bill will receive the endorsement of the House on its Second Reading.
  5.43 p.m.
  Mr. Peter Hardy: I hope that the hon. Member for Bedford (Mr. Skeet) will acquit me of discourtesy if I say that I do not particularly feel that I should follow him in what he said. This is a debating chamber, not a place for conducting complex seminars. Nor should it be seen as a repository of information
  1092
  which may cause some people to imagine that the hon. Gentleman really is an expert on fuel matters. However, I shall be here to listen to my hon. Friend's winding-up speech and perhaps he could comment on one or two points that the hon. Member made.
  As chairman of my party's Energy Group and a Member representing a large number of miners, I welcome the Bill and the speech of the Secretary of State. He clearly maintained the Government's acceptance that coal will continue to be important. That is to be welcomed, and it will certainly be greeted with interest in the coalfields of Britain.
  I was particularly interested in my right hon. Friend's comments on the proposed consideration of the relationships between production and marketing. I hope that this will lead to arrangements which will ensure the adequate use of coal for electricity generation and that other outlets will be developed—perhaps not least the growth in our export capacity. Certainly, British coal should not be available for export when some of our partners in the EEC are buying coal which may be subsidised in a way which is contrary to the practice of the Community so far as the British industry is concerned.
  On the whole, we may have the odd anxiety about the industry's position, but we should all be very pleased that the Government are determined that Britain will continue to have a vigorous coal industry. I believe that that industry and the communities which depend upon it will benefit immensely from the investment capacity which will be enhanced by these proposals.
  I am glad that the right hon. Member for Wanstead and Woodford (Mr. Jenkin) has returned. A large part of his speech showed a great improvement on the sort of speeches that we have too often heard from his party in the last five years. I cannot go back further than that. I do not mind—we should be churlish to object to—his comment that we need an increase in the amount of coal produced by our existing pits. That is a valid comment, given the vast increase in the reserves and capacities conferred on the National Coal Board since this Government took office. I hope that a greater quantity will be produced.

  1093
  However, the right hon. Gentleman spoiled an interesting speech by his references to the strikes of 1972 and 1974. It is a pity that he referred to them. It should be put plainly and clearly on the record that those disputes were tragic and regrettable but that they were also avoidable. They were unlooked-for and unwanted and I hope that we shall never see that situation occur again. I hope that the miners will never again be driven to the point at which loss of morale and comparative earning power brings them to the end of their tolerance. The Bill will certainly help to prevent that.
  We hear a great deal about investment, and the Bill's main purpose is to increase investment in British industry—albeit in the public sector. One hopes that the private sector of British industry will soon start to generate capital and see to it that investment policies are pursued so that we can make the broad and proper advance that we need. The Bill will certainly help to maintain a high level of confidence in the industry. Britain is beginning to realise, as the miners have always realised, that coal is important. The Government's proposals today and the policies pursued in the last 18 months certainly reinforce that view, which the miners hold very strongly.
  I make annual underground visits to the 11 collieries in my constituency in Rother Valley. In my visits this year to see the faces at Kilnhurst and Corton-wood collieries, the miners to whom I spoke make it clear that they continued to believe that their task is absolutely essential. Therefore, it is essential that the Government should maintain the policies that they have pursued. But I am very pleased that the Government have decided to maintain the tripartite consultations which have been an important feature of the coal industry since the Labour Government took office last year.
  The Government deserve to be congratulated on that policy—not least the Under-Secretary, who I know has put a tremendous amount of work into it. That effort deserves to be rewarded. I know that he has had great co-operation from the leaders of the mining unions, not only the NUM, and also from the Board. I feel—many miners would agree—that the contribution of Sir Derek Ezra to rebuilding vitality and confidence in the
  1094
  NCB deserves the highest possible congratulations. I note that the miners, who are the fairest minded of men, have recognised this by the invitations to Sir Derek Ezra, as Chairman of the Board and the chief employer, to take part in union activities such as the Durham Miners' Gala, and—my hon. Friend the Member for Don Valley (Mr. Kelley) will confirm this—in the Yorkshire miners' summer school. I believe that Miss Vanessa Redgrave, the revolutionary actress, was also present at that summer school, but I cannot comment on how the two got on.
  That is a good sign because an improvement in relationships is taking place in the industry. Despite the bitterness of the historic legacy in our coalfields, I believe that as a result of the efforts of those I have mentioned, not least my hon. Friend the Minister, we could well see—unless there is mischievous comment in the national Press and agitation for party political purposes from Conservative Members—the National Coal Board and the miners of Britain establishing a model in cordial industrial relationships, which is highly to be desired. We have seen developments along those lines and I have evidence of that cordiality developing in my constituency.
  In addition to promoting investment capacity, securing the future and maintaining confidence, the Bill will also contribute towards ensuring that we have the necessary decent relationships in this essential industry.
  7.52 p.m.
  Mr. David Crouch: I do not want to labour the point that the Secretary of State is not present because we have been given the adequate explanation that he has been called away on public business, but his absence is a pity when one has prepared a speech for the ear of a particular Minister. My remarks tonight will reflect on the right hon. Gentleman not so much as criticism but as observation.
  I take objection to the Bill, not so much for what it says as for what it does not say. The Bill comprises four clauses, the first of which says that the Government want to increase the borrowing power of one of the biggest nationalised industries by another £400 million,

  1095
  Clause 2 states that the Government want to make up the deficiencies of the miner's pension scheme by up to £18 million a year for the next 20 years. At least, Clause 2 gives a figure of £18 million and states what it is for, but we are not told about the borrowing requirement. The House is given a bald statement that the Government want more taxpayers' money for a nationalised industry and that the Secretary of State will come and tell hon. Members what it is all about. That is not good enough. The public want to know.
  The Bill is a prospectus which is placed before Parliament. I am not against it and shall speak in favour of it. However, these days we have to change our ideas about how we face the problems of the nationalised industries and how we present the prospectus of the nationalised industries. It is not good enough for the Secretary of State to come to the House and leave a paper on the Table which indicates that much more money is wanted. We should know before hand what that money is for. We can make deductions.
  We have debated Bills in the recent past—not so much Bills which contain specific sums of money as Bills about new and general legislation. One example is the Industry Act, which we debated for many months the last Session. During those debates it was spelled out exactly what was before Parliament. Study could therefore be made before hand, we could come to the debate prepared and not have to hang on the words of the Secretary of State when he explained something. Very often there was a White Paper, a Green Paper, a discussion paper or an explanation in the Bill, so we knew what we were in for.
  I am not making a severe criticism, because what the right hon. Gentleman has done is in line with the current practice of successive administrations. I hope that following the Chequers meeting we shall turn over a new leaf when we deal with the nationalised industries. The Prime Minister was, rightly, very proud that both sides of industry sat together with the Government at that meeting, but it was not the first time that they had sat together. The NEDC, which was founded in 1962, institutionalised the
  1096
  bringing together of both sides of industry. Nevertheless, today the Prime Minister is proudly saying that both sides of industry are sitting together and that both the public and private sectors are getting together.
  The Government's intention is to introduce planning agreements which should be put before industry and the public. They want industry to submit its plans to them and the people, and they want participation and greater consultation. The procedure on this Bill does not follow that admirable precept of involving us in this participation.
  Clause 3 seeks to enable the Government to extend the purposes for which they give grants to the National Coal Board. This has been explained, and I am very glad that it has been explained. Last year those grants amounted to £68 million. I shall comment on them later. I can understand that the Government wish to have increased borrowing power.
  When I came to the Chamber today I had prepared my speech. I heard the answers to my questions as the Secretary of State opened the debate. I wanted an assurance that the Board would use its new investment powers for economic development of the coal industry, which I support strongly, and not for what I regard as social purposes.
  In every nationalised industry there should be a proper division between social purposes and economic and commercial development and opportunity. In the energy industry there is great commercial opportunity today, but in all nationalised industries we seek to separate the social obligation from the commercial operation. This afternoon the Secretary of State gave us this assurance and I am satisfied. I would have asked him why this was not stated in the Bill, because I wanted to be sure that the money was for the development of new coal resources.
  I also wanted to know how much of this extra money would go into the Selby project and how much would go into existing pits. The right hon. Gentleman answered those points. Would it not have been better if we had known those answers before hand? Why do they have to be kept secret? The debate would have been more interesting and perhaps more hon. Members would have been

  1097
  present if we had known something of these expectations beforehand. We receive too few explanations of the objectives of the nationalised industries.
  The Bill is a prospectus for business. Members of Parliament are the peoples' representatives. We have to judge how we value and view that prospectus with regard to the public's savings because those savings are the tax that we take from them. We are the custodians of the tax and it is for us to judge whether we should place those savings here or there, and whether we can tell the public that the prospectus is a sound investment and has our support. We are entitled to know, as also are the public.
  Parliament is rather like a supervisory board of the nationalised industries. I had hoped that the Secretary of State would be present because these are matters that were discussed at length during our debates on the Industry Act. By all accounts the Secretary of State is a believer in participation. The hon. Member for Morpeth (Mr. Grant) has spoken strongly—and rightly so—about his belief in participation and his hopes that this will develop. He feared that it was not developing fast enough in the coal industry. However, the Secretary of State should recognise—I hope the Minister will inform him of this—that there is a natural desire by hon. Members to join him in his supervisory consultations on the coal industry. We do not want to interfere in the day-to-day management either of the Department or of the NCB. All that we want is to enter into a planning agreement with him.
  I want to talk briefly of my attitude towards the nationalised industries. The Minister will know that I am not an anti-nationalised industry man. However, I am careful about what we do with the nationalised industries and to them; how far we support them and how far we encourage them to support themselves. I must confess that I am getting worried about the present Government's attitude towards the nationalised industries. My right hon. Friend the Member for Wanstead and Woodford (Mr. Jenkin) touched on this question. He, too, voiced this anxiety whether the Government were getting their priorities mixed and were forgetting some of their original
  1098
  intentions in regard to the nationalised industries.
  Do the Government want to go on increasing the subsidy to the nationalised industries, or do they want gradually to stop subsidies? Today we are continuing in the old pattern of saying that we must give more and more money to this nationalised industry because it needs that money—because the auditors say that they are not satisfied with the accounts of last year, published in July this year, because there is a deficiency on the pension scheme. All right; that is acceptable. There is an appeal from the chairman that some action should be taken—presumably by the Government and the House eventually—to correct that deficiency in the accounts and to put some money in. But I had thought that the present Government had embarked on a policy of phasing out the subsidies to the nationalised industries and getting those industries, as far as possible, to stand on their own feet. This was the message that I got from the Chequers meeting.
  In order to refresh my memory I brought to the Chamber a copy of the paper read by the Chancellor of the Exchequer at that Chequers meeting. It was appropriately called "An Approach to Industrial Strategy". It is very pertinent today. I should like to read what the Chancellor said in paragraph 3 of the foreword:
  "The Government emphasises the importance of sustaining a private sector of industry which is vigorous, alert, responsible and profitable. It intends that the public sector should exhibit the same qualities."
  That is why, without consulting any of my party leaders, I went on a television programme on the same night and made a statement, together with the hon. Member for Birmingham, Ladywood (Mr. Walden) and the right hon. Member for Down, South (Mr. Powell). I said that I supported the objective that both the private sector and the public sector should be vigorous, alert and profitable.
  In paragraph 7 of the Chancellor's main paper he says,
  "Such a strategy must involve ensuring that industry, both public and private, is able to earn sufficient profits on its investment to spur managements to expand and to innovate and to provide them with the internal finance on which to base investment."

  1099
  However, here today we are back in our old pattern of viewing the nationalised industries and saying that we must vote more money to them because they have not got enough, because the figures are wrong, because the accounts do not look right to the auditors, and so on. The Bill seems to me to have as its objective a need to pour money into the NCB partly because the auditors do not like what they see in last year's accounts and the need now, therefore, for the NCB to fund its social provisions—I am not arguing against that, but I am making the point that it is there—and partly because the Board does not earn enough to fund its stocks. We must turn over a new leaf here. The Board must be told to earn a bit more.
  I was glad to hear the statistic that was read by my right hon. Friend this afternoon—that coal is now valued at 7p a therm by the electricity generating industry, rather than the 3p of the old days. I have thought for a long time that we were getting some things too cheaply in this country, and that one of them was energy. I am one Conservative Member who has constantly spoken out on the need for our mining industry to earn more money. Coal is a very valuable commodity. It is like gold—a commodity we should treasure. I support the Government intentions and objectives to expand this industry. However, we cannot expand it unless people are prepared to pay the price for it. I do not think that coal is too expensive today. I want to see more coal production, but I also want the Board to make more profits. I congratulate the Board. It has had quite a good year.
  Let us be clear about the grants. We as a nation are big investors in the NCB already. Last year the Government grants totalled a little over £68 million. They are now to be increased by a further £18 million a year. I should not be surprised if we found in next year's accounts that the grants to the NCB are approaching £100 million. Therefore, let us have no illusions about this industry. We must get it back on to a proper footing. The Board will be entitled to a great many social grants that are possible under present Acts, regional grants and so on, but I should like to see the Board able to fund its own stocks. I
  1100
  should have liked to think that it could have even funded—because it was paying its way—the superannuation scheme.
  I am glad that the coal industry is doing so much better. I am proud of it. I am very glad that our miners are digging so much more coal. Deep-mined coal last year was up by 18 million tons over the previous year, and the total output was up to 125 million tons, so we are well on our way to the target of 135 million tons.
  I am glad, too, that the total operating profit was £34 million, as compared with a loss in the previous tragic year of £112 million.
  Naturally, I am very pleased about what has been happening in Kent, that small coalfield in England which has for so long had rather a sad economic record. I am glad that it has shown much better results from three pits, producing 100,000 tons more coal last year, and making a profit from that effort of £½million, as compared with a loss of of over £2 million the year before.
  The value of a ton of coal mined in Kent—this is important—has been doubled, and the profit per ton of Kentish coal is now nearly £2, as compared with a loss of £3 in the previous year. Therefore, the price of coal having risen, if the profits are there it means that high wages—they were high last year, relatively, although perhaps they are not so high now—are justified. We can pay them. But now so much more depends on the coal industry staying well in the black so that it can fund its investment, as the Chequers meeting said that it should. This is reflected very well in the 3p per therm that it used to be and the 7p per therm it is earning now.
  Finally, I want to be a little nostalgic and go back seven years to something that happened in my constituency in 1968 when we closed Chislet colliery, which hurt me and a great many people. I wonder today, given the new economic background for all forms of energy, and particularly coal, whether Chislet, if it were working today, would not be a thriving and viable pit producing coal and making a profit from it, and employing more men. I wish that it was working. If the NCB, spurred on by the speeches made in this House—I wish that the Board was listening, but I hope

  1101
  that its members read Hansard—decided to reopen that highly modernised pit, Chislet, it could be sure of my support and I would be proud to call myself once again a typical miners' Member of Parliament.
  6.10 p.m.
  Mr. Adam Hunter: There is unanimity amongst hon. Members present about the further borrowing powers to be granted to the National Coal Board, and I welcome that.
  The Secretary of State assured us that the Government were interested in Britain's having a successful coal industry. The right hon. Member for Wanstead and Woodford (Mr. Jenkin) gave a similar assurance on behalf of the Conservatives. About 11 years ago the then Leader of the Opposition made a tour of several pits in England. He was accompanied by four Labour Members and four Conservative Members, among whom was the hon. Member for New Forest (Mr. McNair-Wilson). Since that day, those hon. Members have taken a continuing interest in the industry. Today marks the culmination of that interest with an assurance from the Conservatives that they are still interested in the long-term future of the industry.
  Clause 1 is very important. It will put into effect the terms of a plan projected by the National Coal Board for the industry's investment. It follows the theme of a speech by my right hon. Friend the Prime Minister at the National Union of Mineworkers' conference in July of this year when he said
  "The Government has done its part to ensure a strong and secure future for Britain's coal industry."
  I hope that this doubling of the borrowing limit is evidence of an intention to secure this aim and that this is a major step to ensure that the industry will be a successful contender in the energy market with other types of fuel.
  The recently agreed increase by the Organisation of Petroleum Exporting Countries of 10 per cent. in the price of oil will alert every responsible person concerned with energy to the fact that the country as a whole appreciates the need for a strong coal industry. Already some of the investment visualised by the Coal Board has gone to help my constituency. Only a few weeks ago in the Longannetmine
  1102
  complex a new development was started at a cost of £3 million. I see from information received from the Coal Board today that a project costing £23 million for a pit in Yorkshire is under way. That augurs well for the industry.
  Both sides of the House agree that new investment is necessary to ensure that the industry gets up-to-date equipment and machinery and the best technology and that it is used for the new projects that will be undertaken as a result of the increased investment in the industry. The extra money is required also to guarantee the maximum efficiency and productivity, not forgetting the safety and health of those working in the industry and mining the coal.
  I was surprised by the seeming assumption by the hon. Member for Canterbury (Mr. Crouch) that all the borrowing would be made from the Government. I do not see that necessarily the borrowing must be made exclusively from the Government. It seems from the financial effects mentioned in the Bill that other organisations could lend money to the Board.
  In accepting the Bill and welcoming the new borrowing limits I wish to ask my hon. Friend the Under-Secretary some questions.
  First, where will the Board do its borrowing? My hon. Friend knows that borrowing involves repayment of capital and payment of interest charges, sometimes very high interest charges.
  Secondly, what are the Board's plans in this connection? Will it borrow all the money from the Government? May it borrow from private sources? May it seek loans from foreign sources?
  No matter what the answers to those questions are, may I ask my hon. Friend, thirdly, whether it would not be in the industry's interests and in the nation's long-term interests for substantial borrowing to be made from the Government at special interest rates? I understand that it is the Board's intention, with the support of the NUM, to ask the Government to lend it money at special interest rates. My hon. Friend will surely agree that heavy interest charges resulting from this borrowing would be a massive burden on the industry and would militate against the achievement of the desired aim of remaining competitive with other fuels.

  1103
  It must also be borne in mind that there is an assumption that new investment will mean greater production. My hon. Friend the Under-Secretary will be the first to agree that there is no point in increasing production without an assurance of markets for the coal produced.
  Clause 3 seems to have been drafted to cover such a contingency. It illustrates a lack of confidence in the industry's finding markets in the near future and presupposes that markets will not be available. That is why the Government are prepared to allow money to be spent for huge stockpiling of coal in future.
  Other Government action is necessary and it must run parallel with the investment prospects inherent in the implementation of Clause 1. The Government should also take an interest in the consumer. They should exhort coal consumers, large and small, to make some investment in coal-consuming plant and installations either in the domestic industry or in power stations. Power stations are the greatest consumer of coal. Last year they consumed 71 million tons. The Board's plan for the future is that power stations will consume much more coal.
  Many coal-fired power stations have gone out of existence. The efficiency of many more of the older coal-fired power stations has been falling in comparison with power stations using oil and gas. Thus, if there are fewer coal-fired power stations and if other coal-fired power stations are working at reduced efficiency, less electricity will be generated and less coal will be used. The Government should step in and support every effort to build more coal-fired power stations, thus assuring the consumer that the price of coal compares favourably with the price of oil.
  I wish to relate an experience somewhat in contrast with what the right hon. Member for Wanstead and Woodford said. I visited a paper mill in my constituency. I discovered in conversation with the manager that the management had decided to consider a change in the fuelling of the plant. At that time the mill was using coal, but because of high increases in coal prices, the management decided to make a study and find out whether it would be economic to change to another fuel.
  1104
  After a careful study had been made—and I saw all the relevant papers—it was proved conclusively that coal, despite the increase in price, still had the competitive edge over oil. I am sure that when the management realises that there is to be a 10 per cent. increase imposed by the OPEC countries in the price of oil, it will appreciate that it certainly has the right fuel policy for its mill. The Government can do a great deal to make industry in general realise that coal can serve its needs and at the same time be economic.
  I welcome Clause 2 very much, although I am a little doubtful about one part of it. It would seem to me that the increase in the existing pension will produce a pension of only £4·60. Any further increase given to these pensioners later on, apart from those in the new scheme, will be based only on the cost of living, and I feel that this is wrong. Mine workers who have been employed in the industry for many years are entitled to a better pension than £4·60 a week. There are men who have retired from the industry after having worked for 51 years, and I do not think that anyone can say that such a pension is a generous recognition of their work.
  I am pleased that the Secretary of State is to reimburse the Board for certain expenditure incurred in meeting deficiences in the scheme. I am even more pleased to see in this clause a commitment by the Secretary of State to increase the benefits beyond the present level. But I should like an undertaking from the Government that they will do their best to make sure that existing pensioners will get a better pension than £4·60 a week.
  I come to Clause 3. I have listened to certain of my mining colleagues on the subject of the stockpiling of coal, about which we are very concerned. It was always assumed that only in part of Wales was there any concern about heavy stockpiling, but I have been assured by some of my colleagues that stockpiling is taking place in some of the Yorkshire pits. It is feared that one day there will be unemployment in the industry in Yorkshire. I sincerely hope that my hon. Friend the Under-Secretary of State can deal with that subject.

  1105
  During the referendum campaign, those who supported the proposition that we should remain in the Common Market said that to do so would be a great boon to British coal mining, because we should be enabled to get contracts for exporting coal to other EEC countries. I know that the Coal Board is trying to get contracts for exports to the EEC countries, and I should like to know whether any progress has been made in this direction. A solution to many of our problems in coal mining would be to increase our exports and, of course, to install more coal-fired power stations in this country.
  6.24 p.m.
  Mr. John Hannam; I welcome the speech made by the hon. Member for Dunfermline (Mr. Hunter) and particularly his acknowledgement of the fact that Opposition Members are among those who have a real interest in and support for the future prosperity of the coal industry.
  It is interesting to observe that on an occasion when we are dealing with so vital a commodity as coal not one representative of the Scottish National Party has participated in the debate. Possibly those hon. Members feel that with coal there is not so much "up for grabs" as there is with oil. It is certainly notable that they have not spoken in a debate of vital concern to Scotland. I speak as a keen supporter of the coal industry. I believe that the future possibilities for the industry are immensely favourable. We have enough coal reserves in the United Kingdom not only to sustain increased home demand in the future, but to provide opportunities for sharply increased exports.
  During the coal and energy debates in recent years I have consistently stressed the need to maintain the competitiveness of this indigenous fuel. I am concerned about the erosion of the price lead which coal has had over oil at our power stations, despite the vast increases in the price of oil, the price lead having declined from 44 per cent. to 10 per cent. It is, therefore, essential that we improve productivity to regain that price lead for coal, although I support the view of my hon. Friend the Member for Canterbury (Mr. Crouch) that we have had our
  1106
  energy too cheaply and that we must be prepared to pay a fair price for this fuel.
  We have seen welcome increases in the numbers going into the mining industry in recent months. Unfortunately, that has been accompanied by a fall of about per cent. in productivity as against what was a declared need for an increase of per cent. I fully understand the reasons for what I believe to be a short-term decline in productivity. It is obvious that a great deal of training of new staff is taking place, and this must result in a temporary hold back in what I hope will be gained from increased productivity in the future. I think we must agree with Sir Derek Ezra, the Chairman of the National Coal Board, who said at the annual conference of the National Union of Mineworkers at Llandudno last year:
  "If we are to remain competitive and go on providing real improvements in earnings, we must do it out of increased productivity."
  That must be the key objective.
  Coal imports, which have increased rather dramatically recently, should be replaced by exports. We should be concentrating on building up an export business. Every extra ton of coal we produce saves the country between £25 and £30. Therefore, the challenge is obvious.
  My hon. Friend the Member for Canterbury welcomed the fact that the Coal Board had gone back to a good profitable situation. If we get the stability of cost for which we hope, and if we get an upturn in world demand in the next year or two, the vast investment in the coal industry could produce substantial dividends not only for the country, but for the miners themselves. I understand—and I should like the Minister to confirm this—that in the next five years £100 million will be spent on research into mining exploration and general coal research such as liquefaction and other chemical processes.
  In February and March of this year we were engaged in considering the Coal Industry Bill. That Bill embodied some of the recommendations of the tripartite inquiry into pensions provisions, pneumoconiosis compensation plus the opening up of opencast mining opportunities for the National Coal Board. I believe that these are all part of healthy progress towards the development of the industry.

  1107
  The prospect of the United Kingdom providing half of the coal in the European Community's production is very exciting, but again we have to accept that if we are to achieve that sort of target, we must concentrate on producing the right sorts of coal at the right prices. We have also to avoid large imports of fuel. This may mean that we shall have to adjust some of our techniques of coal consumption. Perhaps the Minister will develop that theme when he winds up the debate.
  On 10th November I asked the Under-Secretary for figures of coal exports this year compared with those of previous years. He was not able to give me the exact details, but he assured the House that they were above average for the previous five years. I have since done some research, and the figures show that in 1974 we exported 1,499,000 tons. During the first nine months of this year we had already exported nearly as much. With exports of 1,432,000 tons up until September, there has been a substantial improvement, but the problem is that imports are increasing at a similar rate. Last year we imported 3,460,000 tons and in the first nine months of this year we had imported 3,481,000 tons.
  Why are we getting these increases in imports at a time of falling demand? It does not seem to make sense. Is it because we are still suffering from a lack of certain coal-washing facilities, or have there been increases in industry's demands for certain types of coal? I hope that we can curtail these expensive imports, which seem to cost twice as much as we get for our exports.
  Mr. Patrick Jenkin: Is my hon. Friend aware that in a reply given to me it was stated that we had imported 25,000 tons of anthracite from Vietnam last year and it was believed that this year's imports would be 50,000 tons? Does he think that this is a matter to be looked at?
  Mr. Hannam: My right hon. Friend's intervention underlines the confusion. At a time of falling demand, we have substantial increases in the imports of certain types of fuel.
  My right hon. Friend asked some relevant questions earlier about the
  1108
  advanced technologies in coal production that we hope to see introduced. I should like much more information presented to the House when we consider Bills such as this. When the Labour Government introduced the Coal Industry Bill of 1965, they said that such Bills should be accompanied by a White Paper so that hon. Members would know the exact details of the money they were being asked to approve. This approach would help us a great deal and I regret that we have not had the necessary advanced information to enable us to discuss this Bill in detail.
  The Secretary of State referred to an overall examination of the coal-burning situation. I hope that he will keep the House informed of the Government's thinking in these matters. He referred to the increased use of coal-fired generating stations and the increased use of coal for domestic and industrial purposes. The whole House is in agreement with the general terms of the Bill and other measures to support the industry, and I hope that we can be taken into the Government's confidence when discussing various ideas and proposals. The 1965 Labour Government's policy of publishing a White Paper with the Coal Bill, ought to be adopted again.
  We are being asked to agree to quite large subventions of money through increased borrowing powers and increased grants and pensions. The hyper-inflation that we have experienced in this country has been the main cause of this increase. The inflation-proofing of miners' pensions puts them in a very advantageous position and provides a healthy inducement for people to come into this important industry. However, I share some of the reservations of the hon. Member for Dunfermline about the treatment of older pensioners.
  I support the Bill and every other effort to strengthen our coal industry. We can take advantage of the tremendous export possibilities of coal in future. The competitiveness with oil must be maintained and I hope that that objective will be shared by both the management and the workers in the industry.
  6.35 p.m.
  Mr. John Cronin: The hon. Member for Exeter (Mr. Hannam) made a very thoughtful and helpful

  1109
  speech, despite the interruption of his right hon. Friend the Member for Wan-stead and Woodford (Mr. Jenkin), and I share his concern about coal imports.
  I have the privilege to represent the South Derbyshire and Leicestershire miners and in welcoming the Bill I am sure I have their full support. I think that they are among the most moderate and co-operative miners in Great Britain, though there may be other competitors suggested by other hon. Members.
  The Bill is a continuation of the sympathetic attitude adopted by the Government towards the coal industry. The industry deserves a good deal of help from the Government, because the miners have been underpinning the Government's whole economic policy this year. They had a ballot and gave the lead in agreeing to the £6 a week limit on wage increases. The Government owe a tremendous debt to the moderation of the NUM.
  Clause 2 authorises the Secretary of State to reimburse the National Coal Board for meeting deficiencies in the miners' pensions scheme. I understand that the sum involved is £250 million, though the Bill only mentions £18 million a year. I wonder whether this sum is adequate. The pension scheme is in considerable difficulties. It has a ratio of contributors to pensioners of about one to one compared with the average ratio in pension schemes of about six to one. I doubt whether £250 million will be adequate.
  My information is that the outstanding deficiencies in the scheme total about £400 million. In referring to the new pension scheme introduced in April, the Secretary of State said that miners would receive half their average wages of their-last years after 45 years' work in the pits. This is a big improvement on the previous pension scheme, but it is far from generous. I do not know whether hon. Members realise what 45 years in the pits can be like. The majority of people who work for 45 years in the pits are not much good for any industrial work of a similar nature afterwards.
  We ought to have a more generous pension scheme and I have some sympathy with my hon. Friend the Member for Morpeth (Mr. Grant) who indicated in
  1110
  very forthright terms that the scheme was still not adequate even after the improvements. I hope that the National Coal Board, the Government and the unions will get together to improve the scheme still further.
  In the last Coal Industry Bill, we set aside £100 million to provide benefits for pneumoconiosis cases. It seems probable that this sum will not be adequate. The giving of that sum has prompted a good deal of research into the number of pneumoconiosis cases, and it is now quite clear that the numbers are very much higher than expected. It is clear that £100 million will not go very far. I hope that the Government will consider increasing the sum, although I accept that the giving of £100 million was a generous gesture. Not only have many cases come to light which were not known before, but many cases which were well known had been considered.
  About 10,000 miners commuted their weekly benefits under the old Industrial Injuries Acts. Most were forced to do so because of their adverse circumstances, living in a part of the world where there was no other work, or because they were bringing up young families. There is a strong moral case for giving benefits to these miners. There is an equally strong case for helping the pre-1970 widows, and I hope that the Under-Secretary will consider that. There is also a good case for expanding the categories of industrial diseases for miners. It is high time that bronchitis suffered by miners was regarded as an industrial disease.
  Clause 1 increases the borrowing powers to help increase production, as proposed by the NCB. It was heartening to hear that it is thinking in terms of an additional 42 million tons a year. That will make a tremendous difference to our economy, but the miners are entitled to ask "What is in it for us?" I am certain that the miners I represent wonder about this. They have behaved with great moderation on wage increases this year. It is essential that no one should exceed the £6 limit this year. However, I hope that when the economic climate justifies it, the Government will agree to miners having much higher wages. The United States and the Soviet Union, for example, pay miners very much more, and there miners have a higher standard of living.
  T
  1111
  When I was in Australia recently I spoke to Mr. R. F. X. Connor, the Minister for Minerals and Energy, who is known as the "Strangler" because of his somewhat forthright views. He told me that in the Australian mining industry the average wage was AS 194, or £120, a week. He said that with production bonuses the face workers could expect to receive A$ 240, or over £150 a week. When we hear the NUM talking of a target for the future of £100 a week, we realise that it is not nearly as large a figure as it might seem at first.
  I welcome the NCB's intention to increase production, but I hope it will pay some attention to the environment. Opencast work has caused very severe loss of amenities to the neighbouring population. I have particularly in mind the village of Heather in my constituency. It is a pretty little village with a twelfth-century church. But suddenly the NCB has commenced opencast working, and now it has become a place of noise and dirt, suffering from a severe loss of amenity. There is a case for paying some form of compensation to people who suffer such loss of amenity. It should be paid by the Coal Board, the local authority or by the Government directly.
  Clause 3 empowers the Secretary of State to give grants towards the cost of stocking coal. This is clearly desirable, but it is not very psychologically helpful to the miners. Current large coal stocks appear to be a psychological stumbling block to productivity. It is desirable to have stocks for exports. They are window dressing for potential customers. But there is no doubt that coal stocks are interfering with productivity. The stocks will disappear rapidly if there is a long spell of cold weather, or if there is an increase in economic activity when the recession fades away, as we expect next year. There is here a failure of communication by the NCB, and possibly by the Government, in not reassuring miners that coal stocks do not mean they must produce less.
  Miners have other anxieties, and several hon. Members have spoken of the pit closures of the past. These have, of course, done psychological damage. Miners are worried about the present recession, the 26 per cent. drop in the use of coal by industry and the 21 per cent.
  1112
  drop in the use of domestic coal. They also see pressure on all sides to save energy, which means that less coal is used. There is also the erosion of the competitive advantage of coal over oil.
  It is important to reassure the miners that there will be a real increase in coal markets. It is no use having increased production without increased markets. It is all very well to say there is to be an increase of 42 million tons, but that has to be sold. There should be research into new uses for coal. The right hon. Member for Wanstead and Woodford made a useful contribution on the subject of additional uses for coal. More research should be done here. It is important that the NCB should take a more aggressive attitude in world markets. We should be selling more coal abroad, and we must pursue markets for exports.
  The most immediate and simple thing for the Government to do is to start a programme of building more modern coal-fired power stations. There is a very strong case for that. As the programme stands there will be a rundown by the mid-1980s in coal consumed by power stations. It is therefore relatively urgent that more coal-fired power stations should be put into operation in the next two or three years, before the rundown in the mid-1980s.
  It is important that miners should have clear ideas about the future of the coal industry. No doubt the Under-Secretary will reassure us tonight. I know that he commands great confidence among miners and that what he says tonight will be read with great interest. There is still no clear-cut energy policy for the next 20 years. Miners are prepared to continue their arduous, dangerous and nationally important work, but they want clear leadership and definite indications about the future of the industry which the Government must provide at the earliest opportunity.
  6.50 p.m.
  Mr. Jim Lester: As one who has taken an interest in the mining industry for many years and who calls himself a miners' Member, having 5,000 miners living in the constituency, I give a general welcome to the Bill, which builds on the Conservative Act of 1973. We all recognise the need for a stable investment programme so that the new

  1113
  seams and deposits which are being discovered can be brought in in time to replace the shortfall that must inevitably come about as the others are worked out, and it is right that we should have a proper policy of financing stocking.
  The point that I want to press is the European energy equation. Our coal industry is a vital part of it, and therefore it is reasonable that the strain on the British economy caused by this extension of public borrowing should be helped from that direction. As the hon. Member for Dunfermline (Mr. Hunter) said, the National Coal Board has power to borrow outside this country, and I believe that Europe is one of the areas to which it is entitled to look.
  We cannot get the miner to get on with the first essential of any successful policy to do with coal, which is safely, efficiently and competitively to produce it at the lowest possible pithead price, unless he has an idea of the eventual use of his product, unless he knows where it is likely to go. For some years, we have talked about additional coal-fired power stations, but that idea must be related to demand. They cannot be built unless there is a clear demand.
  The situation in this country, certainly in the medium term, is that demand for energy will not increase at anything like the pace that we originally imagined. But we could regularly export steam coal to Europe, where there is an existing demand and market. I was encouraged to hear what the Secretary of State said. Now is the time to think through a European strategy, from which we are in the best position to gain. The new stations being built in Europe can benefit us materially, and we should encourage their building. I hope that the Secretary of State will maintain the momentum of which he spoke, and that he will give that matter as high a priority as domestic use.
  In spite of Clause 3, it will take years for miners to get out of the habit of stock-watching, whether at the pit or at power stations in the United Kingdom. Europe is an extra market which is important and immediate. It is a two-way movement. We have the security of investment, which can help out over national peaks and troughs, and at the same time we have a market which we
  1114
  can use quickly. That must only help attitudes, as the Minister knows. We recognise the amount of time that he has spent reassuring the coal industry and the amount of time he has spent below ground.
  It is vital for the public that production figure should start to improve. The coal industry has been given a great deal of realistic and sensible help. It is important that it should now start to show the public that it is responding to that help. We know the reasons given for the present disappointing production—holidays, training new staff and so on. The industry must take to heart that much has been done and that we want to see the productivity figures start to improve.
  I believe that productivity can be helped mainly by a revival of productivity agreements linked to local production. I appreciate that this is a difficult time to talk about such agreements, because we have an incomes policy which is likely to last for three or four years. We could use the time to try to work out a sensible local policy. I am sure that we shall not see the high production and high income that we want in the industry unless we can achieve that. I speak with the knowledge of the 1 million ton-plus pits in the Nottinghamshire field.
  How are we to monitor our investment in research and the commercial application of its results? We have a great deal of knowledge in this area. We do not want to see it become yet another area in which British technology has a great deal to offer but in which we lose to other people because we do not apply it commercially quickly enough. Poland in particular has made great strides, and she is probably in front of everyone in the world in terms of future coal technology. The Americans are starting to invest huge sums in the future use of coal in their country. This is a time when the British industry has a great deal to offer in exporting the results of its research and so on.
  In the coal industry there is always a long lead time between investment and plant. There is also a long lead in terms of people in the industry. As the industry's new pattern emerges, we cannot start soon enough to put to the miners the sort of changes that there will

  1115
  be over the next 10 to 15 years, and to help them understand the sort of industry in which they can expect to work over that period.
  Attitudes will need to change as the new technologies come in. Getting the energy balance right is critical to this country's future. The Bill should help to ensure that coal plays a major part.
  6.57 p.m.
  Mr. Peter Rees: I must first apologise that other duties have prevented me from hearing the whole debate. None the less, I have heard a great part. It is particularly pleasing for me to follow my hon. Friend the Member for Beeston (Mr. Lester), because I, too, can claim the privilege of representing a coalmining seat.
  The Secretary of State for Energy was at his blandest and most moderate today. I welcome the fact that he eschewed the note of self-congratulation that has sometimes marked speeches about the coal industry from the Government Benches. I also congratulate him on resisting the temptation to discourse at length on the splendours and miseries of this historic industry.
  One naturally understands the factual basis for the Bill, and, with some reservations, I too welcome it. But I very much regret that the right hon. Gentleman has not shared with the House his thinking on the long-term structure of the industry and particularly of the National Coal Board. That matter is especially relevant to the coal industry in east Kent, where our coalfields are very much part of the local scene. They are an important source of employment for us. We are pleased that the quality of our coking coal has been recognised at last. On a more parochial note, we are gratified that Tilmanstone pit has been found to be the second tidiest, the second most elegant, in the country.
  However, we are disturbed that the east Kent coalfield has lost its identity as a separate part of the National Coal Board, and has geen thrown in with the South Midlands area. I have no doubt that there are good, tidy, bureaucratic reasons for this. But we in East Kent will regret the loss of those on the headquarters staff
  1116
  who have made a great contribution over the years.
  If I may coin a phrase, we shall in future feel ourselves a little out on a limb, part of a rather remote structure. This may well satisfy the Secretary of State, and even the Under-Secretary. It may satisfy the planners in Hobart House. I suggest to the Under-Secretary, however, that possibly it overlooks the personal needs and aspirations of those who work in East Kent.
  I should like to think that the Secretary of State has moved a considerable distance from the views he held between 1964 and 1970. I should like to think that he, like, perhaps, the majority in the House, no longer thinks that the big is necessarily good or beautiful. The trend in future must be to consider how we can break up large structures—whether in the private or public sectors—into more manageable units, so that those who work in such units can feel a definite sense of identity with their industry.
  I wish that the Secretary of State had told us what thought he and the National Coal Board had given to this problem. Over the years, I have had a certain reservation about the administrative qualities of the Secretary of State, but I am bound to say that I have never found him to be short of ideas. He is a fount of imaginative ideas. I do not agree with all of them. Has he allowed his imagination to play over the future of the National Coal Board in the same way as we know he has over the future of the private sector? We know that he believes in worker participation and I suppose that most of us on both sides of the House believe in this to a greater or lesser extent. No doubt during this Session we shall have the opportunity to debate precisely what form such participation should take.
  What thought has the Secretary of State, or the Under-Secretary, given to the possibility of worker participation in the nationalised industries? Perhaps it should be in the Bill. Perhaps an amendment ought to be tabled. Will the Under-Secretary tell us about the plans for worker co-operatives in the coal industry? What about some form of equity participation?

  1117
  These are the matters we shall no doubt be debating in the forthcoming Session in respect of the private sector. The public sector is now larger and more remote, I suggest, than most industries in the private sector. We should be failing in our duty if we did not, even if only briefly on this occasion, debate the structure of the NCB and consider whether it could not be broken up into more manageable units, whether a greater sense of participation and identity could not be given to those who work in all nationalised industries.
  Let us consider whether some form of equity capital cannot be given to those who work in the nationalised sector. Let us consider whether, perhaps, a share option scheme might be apropriate for the NCB or the British Steel Corporation. That suggestion might evoke an echo from the hon. Member for Bolsover (Mr. Skinner). We have to look ahead. We must not regard the form and structure with which the Board was endowed after the war as immutable. I shall await with keen interest the constructive comments which I have no doubt the Under-Secretary will be making.
  There is one other point about which I must express some reservation. We are all in favour of those who work in the industry having a satisfactory pension at the end of their working lives. In the tempestuous days of 1972–74, when I was lucky enough to catch your eye, Mr. Speaker, during debates on the coal industry, I expressed the wish that the NUM had concentrated a little more on such benefits as a proper pension scheme rather than focusing all of its aspirations and enthusiasm on raising the basic wage. I recognise, and I recognised then, that there was a case for raising wages in the coal industry but possibly more consideration could have been given to pension schemes—to other fringe benefits that should have been available.
  Now we hear that a worthwhile scheme has been introduced. It is to be properly funded and a contribution will have to be made by the State. There is, however, one point which deserves closer consideration and which has been raised by other hon. Members. I refer to the inflation-proofing which these pensions will enjoy. This point was finally elicited from the Secretary of State by my hon.
  1118
  Friend the Member for Bedford (Mr. Skeet)—the right hon. Gentleman had evidently not read on to the relevant passage in his speech when he was interrupted—that these pensions are to be inflation-proofed and there is to be a degree of comparability with the Civil Service. In general terms this is fine.
  The country will want to know, however, whether it is right that employees in the public sector, which is increasing as the years go by, should be put on a quite different basis from employees in the private and the self-employed sectors. We are now becoming two nations—one with an inflation-proofed pension and one without. There is concern about this gap that is opening up. Comparability between the nationalised industries and the Civil Service may be fine, but what of those who cannot achieve that?
  I am sure that the Under-Secretary would be the last person who would want to push through this House a policy, not necessarily applying only to the NCB, which would be divisive to this degree. This is not sufficient to lead me to vote against the Bill, but I hope that the Under-Secretary and his colleagues will pause for a moment to consider whether something more should be done for those in the private sector and for the self-employed so that they do not lag too far behind. Otherwise the envy that on certain occasions and in other spheres has been felt on the Labour Benches may be reflected on these Benches. By all means be fair, but let us be fair to all and not simply to one sector of the community.
  Those are the only points I wish to make in this important debate. I hope that the Under-Secretary will respond with his usual generosity to the speeches that have been made by my hon. Friends. I hope that he will throw away the speech he has so evidently prepared and deal point by point with the issues that have been raised. These points are made with a genuine concern for the great industry whose future we are debating and which we wish to perpetuate and improve. I hope that the Under-Secretary of State will not say that this is just a money Bill, but will tell us that underlying it there has been deep, imaginative and constructive thought about the NCB and the future of those who work in it and for it.
  7.8 p.m.
  Mr. Tom Ellis: I must begin by apologising to the House for having missed part of this debate. This was due to important reasons connected with a vital document published by the Government today. I am glad to have caught your eye, Mr. Speaker, because, in common with most hon. Members who have spoken today, I warmly welcome the Bill. I do so primarily because it reflects the turn in the fortunes of the coal industry, with which I have long been connected: I was an employee in the industry for a number of years.
  I am satisfied about this turn in the fortunes of coal which has become so clear since "Plan for Coal" was discussed and prepared in 1973. For the first time since 1959 we are as a country committed not simply to stabilising the industry but to expanding it. I regret that, as far as I can make out, we are the only Community country committed to spending money to increase the capacity of our coal industry. Commissioner Simenon has confirmed this for me.
  We do not yet have a common energy policy. I referred to this briefly in an intervention in my right hon. Friend's speech. It is important that we succeed in getting such a policy. One thing that is clear in the Commission document on this subject is that there is an absolute determination to reduce our dependence as a Community upon non-indigenous petroleum products for our energy requirements.
  I welcome the statement of my right hon. Friend the Secretary of State, and previously of the National Coal Board, about the intention to increase the capacity of the industry by 42 million tons by the mid-1980s. This follows from what I call not so much the Coal Board's plan as the coal industry's plan. An interesting point was made by Mr. Parker, the Director of the NCB's planning unit, in an article in the Board's quarterly magazine Coal and Energy. He said that the original plan for coal, the Coal Board's plan, when it was in the process of being formed, was examined by the coal industry tripartite examination and endorsed by it, and it became not simply the Coal Board's plan, but the coal industry's plan.
  To that extent, it was a precursor of the planning agreements about which my
  1120
  right hon. Friend the Secretary of State has often spoken and which I hope will be extended not simply to large industries, such as the coal industry, but to all industries. It was a very good example in embryo of the sort of thing which, I am sure, my right hon. Friend had in mind.
  Incidentally, I congratulate certain people who saw the light before the Yom Kippur war. They came round to an appreciation of the importance of coal in our economy, but they should have realised it long before, and I pay tribute to the one man above all others, Mr. Schumacher, the Board's economic director, who in 1960 and 1961 spelled out fairly conclusively the vital importance of retaining the existing capacity when the policy was to close many collieries that should not have been closed.
  I am happy that for the first time for 15 years the National Coal Board's capital expenditure trend has turned upwards. The right hon. Member for Wanstead and Woodford (Mr. Jenkin) said that he was concerned about the lack of a substantial improvement in productivity. I share his concern. However, the energy industry as a whole, and not simply the coal industry, is inflexible. The provision in the Bill for stocking is to take account of the lack of short-term response to market trends within an industry such as the coal industry.
  However, productivity is not simply tied up with the type of wage arrangement in an industry. There are other factors. Greater capital expenditure is one of them. One might say as a rough measure that whatever happens to the coal industry depends largely on the capital expenditure which was made 10 years before. Only within the last three or four years has the coal industry begun to invest capital on a reasonably substantial scale for the continuing pits. Therefore, only from now shall we see the development of increasing productivity on a scale that we all wish to see.
  Stocking is tied up with the inflexible nature of the industry. Let me say in passing that I understand that there is provision in the European Coal and Steel Community arrangements for stocking 60 million tons. It will be helpful if my hon. Friend the Under-Secretary

  1121
  of State can say what proportion of the 60 million tons is in this country. There is no doubt that the provision to assist with meeting the cost of stocking will substantially help the coal industry.
  I wish to make a point, not to the Minister, but to the National Coal Board, because it relates to a matter which concerns the industry. The Board's accountancy procedure for allocating costs of stocking should be examined. When a colliery stocks coal, the costs of the stocking are allocated to that colliery. This is an unfortunate arrangement and does not give an accurate assessment of the reality of the situation.
  There is a colliery in my constituency that produces coal for the steel industry. It is a viable colliery, which has been making a profit, but in the past six months it has been stocking coal to the extent of 5,000 or 6,000 tons a week. If the stocking charge, allowing for transport, degradation, and picking up, is, say, £3 or £4 a ton, there is charge on the colliery of up to £20,000 a week. It is only because of industrial unrest at steel works in other parts that the demand for steel at the local works has increased and the colliery is selling the whole of its output. Overnight it has become a profitable colliery, whereas previously it was a loss-making colliery simply because of the Board's accountancy procedure.
  I have two small points to make. First, I echo what the right hon. Member for Wanstead and Woodford said about the recent lack of performance. It is disconcerting that there is a fall in output of 15 million tons annually from the pits which have been in production continuously for the past 10 years or so and whose output had risen in the 1960s by 30 million tons. Their output increased in the 1960s as a result of investment made in the 1950s. Now, largely as a result of the lack of investment in the 1960s, their output performance is not as good as it was seven, eight or nine years ago. This is worrying and I therefore hope that substantial investment will take place and that the benefits will accrue fairly soon.
  Secondly, it is vital that we reduce the real cost of producing coal. There is a distinct trend. In recent years the cost of production has risen, but it is
  1122
  more than an annual matter, leaving aside the 1972 disturbances. If the costs of a major primary commodity are increasing, in principle we are doomed to move from a primary to a tertiary economy. I am overstating the case, but this is the basic principle, and it gives cause for concern.
  Whatever else happens, we must get the wage determinations right. The other cause of our troubles, apart from the lack of investment, was the failure of the Board, following its introduction in 1963 or 1964 of a centrally determined system for paying piece workers' wages, to ensure, despite the warnings of many people, including myself, that the wage rates were right. We therefore had the unfortunate business which occurred in 1972.
  The hon. and learned Member for Dover and Deal (Mr. Rees) spoke about the coalfield in his area. I wish to make a plea for what one might call the coal outposts. The National Coal Board is interested in the Selbys of this country, but there are other areas, such as North Wales, where there are two collieries in which it is important that a coal presence should be retained. It would be a tragedy if we were to lose the skills of men in two collieries in an area which still has reserves of coal. I am glad that the Board has included the area in its drilling programme.
  I hope that a certain amount of the investment which is being made in areas such as Selby will be diverted to areas such as mine if for no other reason than that the North Wales National Union of Mineworkers sends a moderate representative to the union's national executive. That would justify the maintenance of a coal presence in North Wales.
  I warmly welcome the Bill, and I trust that the coal industry will go from strength to strength.
  7.20 p.m.
  Mr. Patrick McNair-Wilson: When the hon. Member for Dunfermline (Mr. Hunter) told the House of the visit which he and I and my right hon. Friend the Member for Wanstead and Woodford (Mr. Jenkin) undertook, to see some of the mining operations in the East Midlands, in 1964, he also reminded me of the fact that it was 10 years ago almost to the day that I was

  1123
  standing at this very same Dispatch Box winding up for the Opposition in the debate on the 1965 Coal Industry Bill. That measure is relevant to the Bill we are discussing this evening.
  The atmosphere in the House today is very different from then. Very few Members who have spoken this evening were present in the House in 1965, or, indeed, Members of it. The 1965 Act not only set very substantial borrowing targets for the industry but also produced some very violent surgery upon it. Those Members who were in the House at that time will remember the great bitterness and unhappiness which was quite naturally expressed by all Members from mining constituencies.
  The debate today has been very different because the morale of the industry—which in 1965 was hitting rock bottom—is now rising. Of course, it is not perfect—nothing is—but the situation is very different today from what it was then. We had the energy crisis of 1973–74, and on both sides of the House we learned some bitter lessons, which have done us no harm but have perhaps taught us to regard this industry in a totally fresh light.
  The year 1965 also saw the collapse of the production target of 200 million tons, upon which Lord Robens had built his whole concept of the industry. It is a remarkable story that we are here 10 years later talking about an industry with a fresh life in it and with an exciting future. Member after Member has drawn attention tonight to the new techniques now being employed in the industry.
  My right hon. Friend went into some detail about the visit he and I undertook earlier this week to Stoke Orchard. The work being done there is very exciting, but none of us will forget that much of the work on using coal in various forms has been going on since the beginning of the century. My criticism of Stoke Orchard would be that we are not spending enough money on research. It is interesting to compare the amount of money invested in research in the nuclear industry in the last 10 years with what has happened in the coal industry. The Secretary of State will know—it is not his fault, and perhaps nobody's fault—that about 12 times the amount of money is spent on the frontier technologies of
  1124
  nuclear power as opposed to what is spent on the coal industry.
  Nevertheless, having said that, I think we can look forward with some confidence to the future of the industry, and the Bill is yet another milestone on the road.
  However, I must straight away tell the hon. Gentleman who is to wind up that we on this side are not entirely happy with the amount of information provided for us concerning the important clause dealing with the borrowing powers. I remind the House that when the original figure of £750 million was set up in 1965 we were supplied with the most detailed information about how that money was to be spent.
  In the White Paper, Cmnd. 2805, "The Finances of the Coal Industry", we were given some very encouraging comments in 1965 on how borrowing was to take place in the future. Paragraph 18 reads:
  "To avoid incurring fresh capita] debt in respect of its mining activities, the Board intends after the capital reconstruction to aim at generating from its own earnings the funds needed for future colliery investment."
  Those were rather brash comments. Nevertheless we are tonight looking at another £400 million to be added to that £750 million, taking us to an ultimate target of £1,400 million.
  It is important that there should be a very clear indication how this money is to be used. When the Secretary of State tells us, as he did this afternoon, that we are having to fall back on the Contingencies Fund, things are obviously serious, and we shall have to probe this situation a good deal more clearly in Committee.
  Mr. Benn: Following what the right hon. Member for Wanstead and Wood-ford (Mr. Jenkin) said about that, I consulted the advice I have, and I was not going to cite a previous case in his period at the Treasury, but the Contingencies Fund we are considering relates entirely to the timing of the Bill and must not be disconnected from the fact that the Session began late. I hope he will not read too much into that.
  Mr. McNair-Wilson: I am most grateful to the right hon. Gentleman for clearing up that point. It is one that he raised himself.

  1125
  Referring again to the borrowing power of £750 million, it must be remembered that the bulk of that money in 1965 was for the writing off of capital debt. The reconstruction of the whole industry's finances accounted for over £500 million of the £750 million. Therefore this will have to be looked at with some care.
  Let us look now at the areas of investment that are obviously likely to come to such borrowings as will be available in the industry. In 1965—I am using this bench mark because I think it is significant and not merely because I was involved with it—we were then, as now, being told that mechanical means were going to turn the corner for the industry completely.
  It was in 1965 that one began to hear it said that the remotely operated long-wall face—ROLF—would transform mining in this country. It was genuinely believed that ROLF would completely transform the whole way of mining in this country. Indeed, people were talking quite confidently about four times the output per man shift as a result of using this equipment. I have seen it operating, as has my right hon. Friend and the hon. Member for Dunfermline.
  In those days we regarded the future as based on mechanical methods. Once again today the Board is, perhaps, looking into the same crystal ball for its hope for the future. I should like to caution all of us to realise that at the end of the day it will be the people in the industry, and not the machines, who will produce the coal. Of course, new techniques will be valuable and everyone wants to see them developed all the time, but I recall that there were some who believed that at Bevercotes we could have a manless pit, and that dream is not within sight of becoming reality. It is essential, therefore, that we recognise that it is the people in the industry whose confidence we need to win.
  Mr. Tom Ellis: I agree entirely with what the hon. Gentleman is saying, and emphasise that it could be stated as a general rule that the most successful coalfaces are the least supervised coalfaces.
  Mr. McNair-Wilson: That makes the point exactly that I was endeavouring to promote, and I am grateful to the hon. Gentleman for that.
  1126
  However, since we are talking about this aspect, and the hon. Member has used the word "coalface", I might add that face lighting and other techniques which can be provided will obviously make their contribution, and we must not run away from the fact that we ought to be looking all the time towards the provision of new mechanical muscle to the arm of the miner.
  We ought to recognise also that although our own industry has done so much to provide the mechanical techniques upon which we are now relying—such as powered supports, to take one example—there are other countries in Europe where different techniques are being considered. I am not trying to draw parallels between the motor cycle industry and the people who make powered supports, but the hon. Gentleman will know perfectly well that in Germany the caliper shield, a derivation of the powered support, is now becoming popular. In America it is being looked at seriously. It would be a tragedy if our own supply industry were unable to meet the requirements of the many export orders which, I am certain, are available to it.
  The key to the success of this industry is its ability to compete effectively with other energy sources. When I say that I know that it will sound like striking a discordant note, but the fact is that the price rises since 1973 by the OPEC nations have provided a wonderful opportunity for the coal industry. The coal industry is still enjoying the opportunity provided by those price rises. If we can keep coal always that much more attractive than oil the markets of which Members have spoken tonight will be available to us.
  A number of hon. Members, among them my hon. Friend the Member for Bedford (Mr. Skeet), my hon. Friend the Member for Exeter (Mr. Hannam), my hon. Friend the Member for Beeston (Mr. Lester) and my hon. Friend the Member for Canterbury (Mr. Crouch), have spoken of the need to export. I agree with them, but we have to be able to export at the right price. It is central to the success of the industry to be able to keep our prices thoroughly competitive with those of sources elsewhere. It is tragic that 30 per cent. of the coal imported by the EEC

  1127
  countries comes from behind the Iron Curtain. It cannot be right to have that situation, bearing in mind the problems of stocking in this country.
  The scenario that we have to examine is, in the years ahead is nuclear power to provide the successful form of generation which some people have claimed? If it is, that will have a reflection on coal and coal production. If it is not, this coal industry of ours will become far more important than at any time since the war, because it will play a major part in electricity generation, since we cannot afford any longer to put oil into power stations unless we have to. It is that scenario and the future of the nuclear programme that will decide the success or failure of the coal industry in the future.
  I do no more than mention the clause dealing with pensions. Obviously we shall have to look at it carefully in Committee. We had an earlier Bill, piloted by the Under-Secretary, dealing with the pneumonconiosis provisions, and it may be that we shall be able to return to these matters when we look at the pension scheme in this Bill.
  I ask only one question on the subject. Is the figure of £250 million over 20 years the final figure, or are the Government prepared to meet any future deficiencies, which is what the NCB would like to see? If that is the final figure, it is one thing. If it is to be what might be described as a rolling programme with other deficiencies being taken account of, it could be very different.
  All hon. Members taking part in the debate have referred to the clause dealing with stocks, and they have done so for one very good reason. It is that stocks in the industry today are at a very high level. They are not at a high level only in this country. They are at a very high level in other coal-producing countries. In West Germany, for example, stocks will be at a level of 80 million tons at the end of this year out of a total production of 92 million tons. In percentage terms that is considerably more than we have. The concern expressed by our own industry is mirrored by the concern of the German industry.
  Perhaps the principal reason for stocks being so high is the fall in demand. The announcement by the Department of
  1128
  Energy earlier today about a 10 per cent. fall in coal demand for September must be, as the hon. Member for Dunfermline said, extremely worrying in the coalfields. These large stocks of coal are building up at a time when demand is falling, and the fear is that this may mean the end of jobs.
  I shall not weary the House with any comments about exports, because my views on the subject are well known, but it is incredible that we should be spending considerable sums of money to take account of the stock position at a time when we are importing coal.
  One striking feature which I saw at Stoke Orchard was the ability to make coke out of non-coking coal. By blending coals it is possible to make perfectly good metallurgical coke. Much of our imports is in coking coal, of which we have moderately small supplies. If the blast furnace route for the steel industry claims to be the future route rather than the direct reduction route using natural gas or whatever it may be, we shall need huge supplies of coking coal, and if the problem of the No. 3 blast furnace at Llanwern is solved it will be to the big blast furnaces that we shall look for output. If we can as a country make our own coke out of what in the past were regarded as non-coking coals, this will be a breakthrough of great importance. The Under-Secretary hinted at it in answer to a Question last week when one of my hon. Friends referred to the shortage of smokeless fuels and anthracite. The hon. Gentleman said that there were now available other fuels which would do the same job. If we can produce our coke from our own coal we ought to shout it from the rooftops. It is not only good for the steel industry. In terms of exports, too, it could be of great significance.
  In the Yorkshire Post on Tuesday 18th November there was a report of an interview with Mr. Arthur Scargill, who said:
  "The Government has asked us to give a year for Britain. Well, loyalty works both ways, and I would hope, if the Government means what it says, it will stop imports of coal immediately.'"
  He also suggested that some of the coal being imported by the Central Electricity Generating Board is more expensive than coal that we ourselves could

  1129
  produce. If that is the case and we are committed to contracts to import coal which is more expensive than can be produced in this country, British miners have every reason to feel as angry as Mr. Scargill was in that interview. I hope that the Under-Secretary will be able to throw fresh light on the situation.
  Productivity is a problem which has dogged the industry for many years, and it will not be solved by anything that we say here. Indeed, I am not sure that any of the words said by politicians are likely to be of help to those working in this industry. It may be that in all our debates in the past 10 years the words spoken here have done more harm than good.
  The coal industry has embarked upon a new endeavour. It is looking for new coal on a scale on which it has not since the war and probably for the whole of the century. It is obvious that rich deposits exist. When we talk of 11-foot seams we talk of deposits very much akin to those on the American scale. With better pay and conditions and improved markets and opportunities, even if the politicians cannot get across the message about the confidence now existing, I hope that some form of communication within the industry can be set up to do so.
  My one criticism of the structure of the industry today is that the average man who has spent his life in the industry probably feels not much nearer the centre of decision-making than he was when the industry was nationalised in 1947. We owe a duty to the industry to make sure that we improve this.
  In 30 years the great discoveries of oil in the North Sea may be running out. In 30 years the coal industry will still only be nibbling at what may last for centuries. Since the war we have been engaged in pushing forward the frontiers of technology. I gave a comparison between the respective costs of nuclear research and development and coal research and development, and this could be carried into space flight, supersonic flight and the rest. All the studies, study groups and politicians have made terrible blunders. One has been to ignore the fact that coal—a solid hydrocarbon—can transform the nation's economy.
  1130
  Let us hope that this Bill, which the Opposition do not intend to oppose, marks yet another step to the recognition that this essential energy source is there for our use. Let us use it wisely, and, in so doing, let us give once again a feeling of confidence to those who work in the industry.
  7.40 p.m.
  The Under-Secretary of State for Energy (Mr. Alex Eadie): A debate on coal is always for me a particular pleasure. Add to that the privilege of having the last word on such an occasion, and my enjoyment is complete.
  This debate has covered a lot of ground. Some of that ground, as has been pointed out, is familiar from past debates, but there is one fundamental difference; debates on coal these days are optimistic occasions, and today's debate has been no exception. I shall do my best in the time available to cover the most important points raised by hon. Members.
  Mr. Skinner: My hon. Friend mentions optimism. I have been sitting here most of the afternoon. My hon. Friend knows of the loyalty of hon. Members in the miners' group. We allow some of our hon. Friends to get into the debate and we are prepared to sit back and say little or nothing on the basis that we share opportunities to speak. But I am a little disconcerted by constant references to optimism. I represent 900 miners who work at the Langwith Colliery, which is being threatened with closure in the next couple of years or less. The Board refuses to develop any new seams at that colliery, and that means that a village will be decimated.
  None of this talk in Parliament about optimism is of any use to people threatened with redundancy or transfer yet again in the course of their working lives. I should like an answer to a simple question. Will my hon. Friend in some way demonstrate that Langwith Colliery, Seaham Harbour, Vane Tempest, and all the other collieries about which we are concerned, will be kept open? That is optimism. It would ease the minds of the miners if he were prepared to say that none of these closures would take place.
  Mr. Deputy Speaker (Mr. Oscar Murton): Order. The hon. Gentleman is

  1131
  entitled to make a speech at a later date, but not in an intervention.
  Mr. Skinner: I could have made it today if I had wanted to do so.
  Mr. Deputy Speaker: It is perhaps a pity that the hon. Gentleman did not do so.
  Mr. Eadie: I hope that my hon. Friend will allow me to make my speech. In the course of my remarks I shall try to substantiate what I said about optimism. I assure my hon. Friend that those of us who took part in debates on the coal industry long before he entered the House were like undertakers. I suggest that we are no longer like undertakers. The point made by my hon. Friend is being dealt with and will be debated. Indeed, that point was raised by the National Union of Mineworkers, to which my hon. Friend and I belong.
  I shall do my best to deal with all the points which have been made by hon. Members, but I hope that I shall be forgiven for giving most of my attention to what I should describe as the heart of the Bill, Clause 2, which, in my view, epitomises the Government's new deal for the coal industry.
  Few people who have been connected with the coal industry as long as I have could fail to rejoice in the fact of an earnings-related pension scheme for miners. Not very long ago, the reward for a life's work underground was a flat pension of £1·50 a week. But we have come a long way in the past three years. I have reminded the House before that I spent more than a quarter of a century in the mining industry. The pension which I shall get when I retire will be about 8p or 10p a week. My wife and I have not yet made up our minds whether to take it weekly, monthly or quarterly.
  This Government can take full credit for the earnings-related pension scheme. We set up the coal industry examination, from which emerged the National Coal Board and the union's agreement to work out an earnings-related scheme. The Government's commitment to help with the deficiency in the scheme in relation to existing pensioners must have been a major factor in ensuring that a satisfac-
  1132
  tory new scheme emerged. This Bill redeems that pledge.
  The Government put their money where their mouth was on both pension provision and compensation for pneumoconiosis together with the Government's contribution of £100 million towards the NCB's pneumoconiosis compensation scheme, this Bill discharges a longstanding debt of the whole country to the industry and ensures that its future viability is not threatened by a burden of costs which should properly have been met years ago.
  I do not think that I need add anything to what was said by my right hon. Friend the Secretary of State for Energy about the other provisions of the Bill, except that they are essential to the successful implementation of the strategy which we agreed with the industry in the tripartite examination.
  I turn now to some specific points. Reference has been made to stocking aid. I would describe Clause 3 as efficient and sensible. Section 7 of the 1973 Act provides for aid to the National Coal Board in respect of stocks which it owns. Under the deferred payment schemes with the Coal Board, the electricity boards take ownership of stocks in excess of their current requirements, but do not pay for them until they are used. Therefore, those stocks do not qualify for aid under Section 7 of the 1973 Act.
  Such a situation discourages the NCB from making use of deferred payment schemes, as stocks retained by the NCB and put down at the pithead would qualify for a grant. But stocking surplus coal with final consumers avoids double handling costs and keeps stocks moving away from the pithead. I think that the House will agree that that is sensible and the right thing to do.
  Questions were asked about the pension scheme. The hon. Member for Bedford (Mr. Skeet), who, strangely told us that he would be abroad by this time, asked about inflation. There will be an annual review within the scheme which may take account of inflation. I hope that the hon. Gentleman will read that in Hansard when he returns from abroad. Other more detailed questions were asked about the scheme. Indeed, that was the main thread throughout the debate.

  1133
  During the course of the coal industry examination in 1974—two hon. Members who were present at those meetings are in the House at this moment—the Government recognised that the past contraction of the industry presented a financial problem for a viable pension scheme because of the exceptional ratio of pensioners to contributing members, coupled with the fact that pensioners can make no further contribution to the pension fund or to the industrys performance. I think that the House will appreciate the magnitude of the problem with which the Government have tried to deal within the Bill if I give some figures.
  On 6th April 1975 there were 239,272 pensioners, 181,019 deferred pensioners and 255,839 contributing members. Accordingly, the Government undertook to relieve the Board of the burden of the past by contributing towards the existing deficiency in the pension fund. It was agreed that this should be the deficiency in the fund relating, first, to those mineworkers who retired before 6th April 1975 and the widows and dependent children of men who had died before that date and who were at that date in receipt of a pension under the scheme; secondly, subsequent widows and dependent children of such mineworkers; and, thirdly, those who left the industry before 6th April 1975 taking with them the right to a deferred pension under the scheme.
  In view of the lack of precision inherent in the calculation of the deficiency relating to the pensioners of 6th April 1975, the Government decided on a contribution of about £250 million as representing a generous measure of assistance. It was decided that the payment should be spread over 20 years, and we were advised by the Government Actuary that it meant a payment of just under £18 million a year, which was necessary to take account of the interest lost by spreading the payment instead of paying a capital sum.
  Reference was made during the debate to the problems of production and productivity, and it is right that I should give the figures to the House, because they provide some ground for optimism. Up to the first week in November, the Board's deep-mined output was 67·5 million tons for the financial year 1975–76. This compares
  1134
  with 67·9 million tons for a similar period last year. It is expected that total deep-mined output for 1975–76 will be about 114 million tons, which compares with an output of 114·6 million tons for 1974–75. Overall colliery productivity, up to the first week of November, was 44·1 cwt which is identical to the figure for the similar period last year.
  However, after taking account of seasonal variations, one sees that there has been a welcome improvement in productivity recently compared with the summer months. There was admittedly a period when we were very concerned because there was a downturn in productivity, but I am happy to tell the House that there has been an upturn now, and I have a feeling that it will continue.
  The right hon. Member for Wanstead and Woodford (Mr. Jenkin) referred to progress on the "Plan for Coal". I can tell him that the 60 major projects already approved by the Board will among them involve an expenditure of about £190 million, and this again means a tremendous financial commitment. These projects will provide 12 million of the additional 42 million tons capacity envisaged in the Plan for Coal. Two new drift mines are included. Selby on its own could provide another 10 million tons, but the inspector's report following the public inquiry into the Board's planning application for the Selby mine is still awaited. I hope that that answers the point.
  I now come to the question of the importation of coal. My hon. Friend the Member for Dunfermline (Mr. Hunter) asked about coal-fired power stations and about coal imports, and I think that it will help if I give the figures. I apologise to the House for giving the figures for calendar years from 1971, but they are the only figures that I have. In 1971, imports were 4·58 million tonnes, and exports were 3·44 million tonnes. In 1972, the figures were 5·41 million and 2·25 million. In 1973, they were 1·91 million and 3·45 million. In 1974, imports amounted to 3·71 million tonnes, while exports totalled 3·83 million tonnes.
  Mr. Patrick Jenkins: Can the hon. Gentleman explain why those figures for imports, which are for calendar years, are so different from the figures for imports given in Energy Trends circulated by his Department?
  Mr. Eadie: I am giving the figures that I have been provided with in a background note, but I shall investigate that. I thought it only fair to give the import figures for coal, having been asked to do so. For 1975, the estimated figures are 5·5 million tonnes for imports and 4·10 million tonnes for exports.
  There can be no question of imported coal ousting home production. Although imports are now marginally higher than they have been in recent years, they are expected to fall from the 1975 level as short-term commitments are completed. When we debated this matter last year, we said that there would be a shortage of coal. Contracts were therefore entered into for the importation of coal, and these contracts are now being completed. I assure my hon. Friend the Member for Dunfermline that these are short-term contracts and that they will be exhausted progressively. In addition, my right hon. Friend is considering coal imports and will, I am sure, report to the House if he considers it desirable to do so.
  Mr. Gwilym Roberts Mr. Gwilym Roberts (Cannock) rose—
  Mr. Eadie: No. My hon. Friend has not been present during the debate, and I think it right that I should reply to the points that have been made.
  Mr. Peter Rees: The hon. Gentleman has plenty of time.
  Mr. Eadie: That is true. The hon. and learned Gentleman also was not present for much of the debate.
  Mr. Peter Rees: I accept that, and I apologised for my absence.
  Mr. Eadie: I know that, but, just the same, the hon. and learned Gentleman was not here for much of the time.
  My hon. Friend the Member for Rother Valley (Mr. Hardy) made an interesting speech. I wish that he had done a little more research, because I found one facet of his speech rather fascinating. He said that Vanessa Redgrave and Derek Ezra had spoken at one of the schools in Yorkshire, but he did not tell us how they got on. I wish that he could have told us that.
  The right hon. Member for Wanstead and Woodford said that he had met David
  1136
  Bolton, the vice-president of the Scottish miners. I am sure that Mr. Bolton will be interested to know that the right hon. Gentleman at least remembered him. I thought that the whole House was impressed with the fact that today the right hon. Gentleman became what my right hon. Friend would describe as technologically oriented, because he told us about his visit to Stoke Orchard and he described with great enthusiasm the fluidised bed combustion scheme.
  If the right hon. Gentleman looks at the research and development part of the coal industry examination report, and I presided over the R and D Committee, he will see that that is precisely what we recommended as a worthwhile project. I am pleased to say that part of the recommendations of that committee have been carried out, and this is demonstrated by the fact that, in conjunction with the Board, we have established a project with the International Energy Agency.
  One of the first things that I did as Under-Secretary was to visit Stoke Orchard. People there appreciated, after struggling for years on a shoestring, the fact that a representative of the Government had come to see what they were doing. I am grateful for the right hon. Gentleman's support. I agree that the subject of coal derivatives is an interesting one. When people run down this country's technology, they should remember that many of the systems evolved in this country are used in other countries—I have seen some for myself. At Stoke Orchard one sees the wonderful new things that can be done with coal. Given the proper approach, we can open up new markets for coal.
  Fluidised bed combustion is an example not only of a new technique for using coal, but of a new opportunity for British industry in manufacturing equipment for this kind of engineering. One firm is already beginning to take advantage of this.
  Mr. Patrick Jenkin: One point that I left out for reasons of time I should now like to put to the hon. Gentleman. Would he look into the complaint of the firm of Babcock and Wilcox that it is having great difficulty in getting from the NRDC the necessary agreements to enable it to develop, perhaps for export business, fluidised bed combustion plant?
  Mr. Eadie: The right hon. Gentleman has been here long enough to know that the Department of Energy is not the Department of Industry. I do not want to be sidetracked, but I think that he will agree that at least one Energy Minister has tried to be helpful to Babcock and Wilcox over this type of plant. I am pleased that the Opposition are giving Dr. Joe Wilson, the Director of Stoke Orchard, their support. The research workers there were in the wilderness for many years. It is much more impressive coming from the right hon. Gentleman than coming from me that we have a fine research institution there, that we should make better use of it and invest more in research and development.
  My hon. Friend the Member for Morpeth (Mr. Grant) showed his feeling and compassion for the mining industry. He said that after he and I had met and had been able to give some assurance to the miners in that area, although we issued a joint statement, no assurance came from the local management. I want to look into this. Our statement was factual. If there is any difficulty about the local management's not endorsing it, I shall certainly look into the matter.
  Mr. George Grant: I was not saying that the local management was going against what we had jointly said, but that when it comes down to discussing the problems of individual collieries information is lacking. I was drawing attention to the lack of trust and communication and the failure of joint consultation.
  Mr. Eadie: I shall certainly examine what my hon. Friend said. I just wanted to make it clear that the assurances we gave were based on fact and should have been endorsed in that coalfield.
  The age of retirement in the mining industry is a subject to which the House will want to return. The Government have already made progress in matters connected with retirement, but I hope hon. Members will understand if I do not go into detail tonight.
  In debating this short Bill, I hope that hon. Members have not lost sight of the overall strategy that the Government and the industry have worked out together. The Bill must be seen in perspective as part of a coherent whole. There are
  1138
  four major planks in our policy. First, we are determined that coal should be seen as the foundation of the country's energy policies, to ensure that we at least have stability. But, given the deplorable lack of investment over the years, even maintaining output at current levels will be a mammoth task. Hence "Plan for Coal", a major expenditure programme stretching 10 years ahead.
  Secondly, we are determined that the short-term difficulties should not be allowed to blow the industry off this chosen path. That is why we give hope to the industry tonight. Thirdly, we want to see that the mineworker is accorded his rightful place in society and that a life of exposure to health risks and other dangers underground is properly rewarded when he leaves the industry, and to minimise the unpleasantness that miners still have to suffer day after day. Fourthly, we want to see the coal industry start this new era with no financial millstones from the past.
  Taken together with the major decisions that we took in the tripartite examination and the provisions of the 1975 Coal Industry Act, a coherent picture emerges which measures up very well to those objectives.
  Question put and agreed to.
  Bill accordingly read a second time.
  Bill committed to a Standing Committee pursuant to Standing Order No. 40 (Committal of Bills.)

  NATIONAL COAL BOARD (FINANCE) [MONEY]
  Queen's Recommendation having been signified—
  Resolved,
  That it is expedient to authorise all such increased payments out of public funds and into the Consolidated Fund as may result from an Act of the present Session—

  (a) increasing the limit of the National Coal Board's borrowing from £700 million to £1,100 million or any higher amount up to £1,400 million specified by order of the Secretary of State;

  (b) enabling the Secretary of State to reimburse expenditure incurred by the Board in reducing or eliminating deficiencies in the mineworkers' pension scheme, within the following limits—

  (i) as to the Board's expenditure in their financial year 1975–76, £18 million less the

  1139
  total of any payments made in respect of that year under section 5 of the Coal Industry Act 1973 (contributions towards increased pensions);

  (ii) as to their expenditure in any of the following 19 financial years £18 million or any higher amount specified by order of the Secretary of State for the financial year in which the order is made and subsequent financial years;

  (c) enlarging the purposes for which grants may be made to the Board under section 7 of the said Act of 1973 (stock-piling of coal and coke), but subject always to the overall limit of grant laid down by subsection (4) of that section (£40 million if it is confined to expenditure of the financial years 1974–75 and 1975–76; £70 million if it is extended by order to the next two financial years also).—[Mr. Eadie.]

  MONEYLENDERS (CROWN AGENTS) BILL
  Order for Second Reading read.
  8.8 p.m.
  The Minister for Overseas Development (Mr. Reg Prentice): I beg to move, That the Bill be now read a Second time.
  I would ask the House to consider this motion in relation to the statement that I made on 16th October, which had the following main purposes—first, to describe the current situation of the Crown Agents, coincidentally with the publication of their accounts; second, to reaffirm what my predecessor had already told the House, that the Government stood firmly behind the Crown Agents; third, also to reiterate the confidence that we feel in the new Board of the Crown Agents under the energetic and enterprising chairmanship of Mr. John Cuckney; fourth, to explain to the House the basis of the future relationship between the Government and the Crown Agents and the future status of the Crown Agents, on which I hope to lay a White Paper before the House within a few weeks.
  But, fifth, I want to explain to the House the necessity for the short Bill which is the subject of this debate. Its purpose is to establish that the Moneylenders Acts do not apply and have never applied to loans made by the Crown Agents for overseas Governments and administrations either directly or through companies wholly owned by them.
  1140
  The Bill involves no public expenditure and does not affect public service manpower. The loans whose status the Bill is designed to clarify were made over the years since 1967, in some cases directly by the Crown Agents and in others through a wholly-owned nominee company.
  As I told the House on 16th October, I was informed in August by the Chairman of the Crown Agents that the loans could be contested as irrecoverable and any securities relating to them as unenforceable on the grounds that the Crown Agents were neither licensed moneylenders under the terms of the Moneylenders Acts nor a bank for the purposes of those Acts. It has always been thought that those Acts did not apply to the Crown Agents as servants of the Crown and they have been advised that if this matter were brought before the courts they would have a good defence.
  However, if there were a challenge in the courts, for example by the liquidators of companies to which they had lent money, particularly in relation to loans made through the nominee company, the matter might take a long time to resolve. Assuming that a judgment favourable to the Crown Agents were made on one loan, it still might not cover all the other loans. In the meantime the Crown Agents' financial position, which is already a serious position, could be significantly worsened by the withholding of loan payments and interest due, and possibly in other ways.
  My predecessor and I have already given an assurance that the Government stand behind the Crown Agents, most of whose activities are carried on directly or indirectly for Governments and other public bodies overseas. The amount of lending that would have to be underwritten by the Exchequer—that is, in the circumstances I have just mentioned—and ultimately by the taxpayer cannot be stated with any precision, but I am advised that it could exceed £400 million, without taking future interest payments on the loans into account.
  The main beneficiaries of this would be those property companies, secondary banking companies, and other companies to which the Crown Agents had made loans, or in the case of insolvent companies, their other creditors.

  1141
  Until the point was raised recently, it was always believed that the Moneylenders Acts did not apply to the Crown Agents. But their position is unique. They were established at a time when the prerogative was more often exercised and their status has never been dealt with in legislation or tested in the courts.
  We have, therefore, prepared this Bill to place the position of the Crown Agents and their wholly-owned companies in this limited respect beyond doubt.
  As I mentioned a moment ago, I shall be publishing a White Paper shortly to deal with the more general aspects of the status, structure and functions of the Crown Agents with a view to introducing subsequent legislation to confer independent legal personality on the Crown Agents by incorporating them.
  Mr. Peter Rees: Before the Minister leaves the point of the debts to which the Bill might apply, will he tell the House how many of the debtors to whom this defence might be open are themselves in liquidation, so that obviously people beyond the immediate relationship between the Crown Agents and the debtors are likely to be affected?
  Mr. Prentice: I cannot give precise details of that. The categories may be difficult to define. I spoke of a figure of over £400 million, which represents a total of a wide variety of situations with varying degrees of risk. I was deliberately putting the highest figure on the total. I shall ask my hon. Friend whether, when he replies, he can give further details on this point.
  The legislation that will follow the White Paper will deal with the long-term future. Here we are simply concerned with the current day-to-day activities of the Crown Agents. Until the doubt about their moneylending status is cleared up the Crown Agents may suffer serious loss of income and may be unable to recover capital owing to them—a risk we cannot afford to run.
  In submitting this Bill we are not in conflict with the original intention of the Moneylenders Acts, which was to protect individual borrowers against harsh and unconscionable bargains on the part of moneylenders. Licensing and other formalities were introduced to control their operations and to ensure that borrowers
  1142
  were aware of the terms of the loans. Legislation to repeal the Moneylenders Acts, that is, the Consumer Credit Act 1974, has already been enacted. The present Bill will cease to have effect at the same time as the Moneylenders Acts cease to have effect through Orders to be made to replace them by provisions of the Consumer Credit Act. However, its remedial effect in relation to past loans will continue.
  The main aspect of the Bill which may be controversial is its element of retro-activity. But this does not involve overruling cither a decision of a court or a clear legal proposition. Nor is there anything sub judice to be affected. It is not a retrospective provision in the sense that the House so often finds objectionable.
  Prior to my statement on 16th October, no legal proceedings had been started to challenge the loans, although a liquidator of a company had questioned the application of the Moneylenders Acts to a loan on behalf of the Crown Agents, but he has neither accepted nor rejected the proof of debt.
  Mr. George Cunningham: Will my right hon. Friend say whether that questioning by one liquidator was the trigger that led to the Bill being introduced today?
  Mr. Prentice: It could be described as the trigger, although the whole situation was one that we have had to look at in relation to this point. This is an area of uncertainty which could be damaging to the Crown Agents over a period of delay during which the matter was before the courts. It would not be right to think of this case as being the only case which would necessitate this legislation.
  Some other interested parties have also raised the point in correspondence.
  Mr. Dennis Skinner: I was intrigued by my right hon. Friend's reference to the fact that this was not a question of retrospective legislation in the sense that there had been a court judgment which was being reversed, as was the case with some other references that have been made—for instance, one of the oil companies. Is it not a fact that if this legislation is passed, a court will be prevented from making a decision on the matter? In my judgment that would be just as bad.
  Mr. Prentice: I am sorry that that is my hon. Friend's judgment. It is certainly not mine. The purpose of the Bill is to clarify the law on a point about which there is a possible area of doubt. I have submitted to the House a short Bill to ensure that the intentions of the Moneylenders Acts, as we have always interpreted them, will apply in a way that will avoid the public purse being liable for possibly very heavy sums. I do not understand why my hon. Friend objects to that, but no doubt he will explain why if he catches your eye, Mr. Deputy Speaker.
  I do not believe that any of the borrowers in question would have had it in mind at the times the loans were made to avail themselves of the technicality which is the subject of the Bill in order to avoid having to repay what they have borrowed. Indeed, had some borrowers not run into difficulties, the problem facing us now might not have arisen.
  I recognise the House's extreme dislike of retrospective legislation. But I do not believe that so small an element of it will find disfavour with hon. Members when they appreciate that the cost of an uncertainty, to repeat my hon. Friend's point, in the application of legislation would be so heavy a contingent liability on the taxpayers of this country.
  The Bill has only two clauses. Clause I provides that the Moneylenders Acts shall not apply and shall be deemed never to have applied to loans made by the Crown Agents either directly or through their wholly owned companies. It also declares, in subsection (3), that this exemption shall not prejudice any status, privilege or immunity of the Crown Agents or such a company as servants or agents of the Crown.
  As I stated earlier in my speech and in my statement of 16th October, the future status of the Crown Agents will be clarified in the forthcoming White Paper and the legislation that will follow.
  Clause 1(1) is framed so as to cover any period when there was only one Crown Agent, when in order to comply with the requirement that a company needs more than one shareholder the other shares in the companies wholly owned by the Crown Agents were held in
  1144
  trust for them by a member of their staff acting in his official capacity.
  Clause 1(2) is more involved than might otherwise have been necessary because the titles of the appointments made to the Crown Agents by successive Ministers have not been identical. As I have already explained, Clause 2(2) is included because legislation to repeal the Moneylenders Acts has already been enacted.
  I am convinced that we must clarify without delay a situation which could rapidly increase the potential call on the Exchequer for financial support to the Crown Agents to a degree which I feel sure would be quite unacceptable to the House, and the Government have concluded that only legislation such as this Bill will have the necessary effect.
  8.20 p.m.
  Mr. Eldon Griffiths (Bury St. Edmunds): The Opposition's attitude to this Bill is that it is a most disagreeable little document—but it has been moved by a very agreeable Minister. We are very glad to see him present tonight. He has had his difficulties recently. I think that presenting the Bill to the House tonight is not the least among them.
  I should like to start by making it very plain that the Opposition regard the Crown Agents as one of our great British commercial institutions, and that while the Crown Agents have had their difficulties, and may still have their difficulties, we join with the Government in seeking to maintain public confidence in the Crown Agents, at home and abroad. We go along with the Government in continuing to commend the services of the Crown Agents to any and all overseas clients who wish to do business in this country. I make that very plain at the outset.
  I should also say at the beginning that we for our part have a great deal of confidence in the Chairman, Mr. Cuckney, who has been a colleague of mine at the Department of the Environment and with whom I have gone through some difficult times—in the Mersey Dock and Harbour Board legislation and during his period at the PSA. We have much confidence in Mr. Cuckney. I say again that we wish to see confidence maintained in the Crown Agents at home and overseas.

  1145
  Secondly, we join the right hon. Gentleman in wanting to protect the public purse and the taxpayer from any unintended raids that might arise from a technicality—namely, the technicality that the Crown Agents may not have, or may not have had, the status either of moneylenders or of a bank for the purpose of the Moneylenders Acts. We wish to protect the taxpayer and the public purse against raids that might arise from that unintended technical loophole.
  I appreciate that there is no certainty that the Crown Agents would in fact be unable to recover their outstanding loans, and I also appreciate that they might be able to claim exemption from the Moneylenders Acts on the ground that they are Crown servants. But I accept from the right hon. Gentleman that there could be some doubt about this, and in view of the very large sum involved—no less than £405 million, if I am not mistaken—I give general support to the Government's decision to ask the House to do something which is rather painful—namely, to provide a retrospective declaration that the Agents are not and never were at risk on this particular account.
  Having said that, I know that the right hon. Gentleman will not be surprised if I say that there are a number of aspects of the Bill and, indeed, the surrounding experience which we have had which are unappealing, and that there are a number of others which are disquieting.
  I start with the amounts involved. I wonder whether the Minister who is to reply to the debate would be so kind as to confirm that there are five principal sources of risk. The largest of those is about £200 million, or a little less, to overseas banks and institutions. The second largest is doubtful debts being written down in the 1974 account. The third largest is loans to banks and other institutions in the United Kingdom. The fourth largest is overdrafts of and commitments to overseas principals. The fifth largest is interest received which could have to be repaid if judgment went against the Crown Agents.
  I believe I am correct in saying that the totality of these five outstanding areas of risk is of the order of magnitude, as the Minister very fairly said, of £400 million.
  1146
  I will state the question that I should like to have answered. As far as the right hon. Gentleman can tell, is that the end of the road? Is there any more to come? What is the position, for example, in respect of the Crown Agents' commitments in Australia? Can we be sure, as a House, at least in respect of the legal technicality with which we are dealing tonight—I make no comment on the broader issue of reorganisation that is yet to come—that this is the end of the road, or are there other areas of risk that may yet also have to be dealt with under this particular loophole?
  I turn from the problem of the very large sums involved to the question of retrospection, which was very fairly raised by the hon. Member for Bolsover (Mr. Skinner). I go along with the right hon. Gentleman all the way. It is always difficult for the House to accept a measure that is retrospective. But it is not the first time. I think that the most exact parallel was probably the Ship Mortgage Finance Company measure which provided retrospective exemption from the Moneylenders Acts from 1900 to 1922—or so I am advised—and of course, most of us will remember the Burmah Oil affair, though that is quite different from the point with which we are dealing now.
  I thought that I understood the Minister to say that he justified the retroactive nature of the Bill on the ground that it was just a very small element—rather like the housemaid's baby; just a little one, so it did not matter very much. Of course, it is not a very small element. A sum of £400 million at risk is by no measure a small element—to use the right hon. Gentleman's phrase. My judgment of the painful necessity of accepting the retrospection here turns not so much on the fact that it it is a small matter as on the question of who may get hurt and whether anyone who had a reasonable and lawful expectation of benefit is to be denied that benefit as a result of the Bill. In other words, who would benefit if the Bill were not passed?
  If there were to be a large number of people, I would not find it so easy to accept it, but I rather suspect—I hope that the Minister will confirm this—that in practice there will be remarkably few, if any.
  Mr. Prentice: Perhaps I may clarify this point. The hon Gentleman said that I had attempted to justify the retroactive change by saying that it was a small matter. My view was that the House would not take so serious a view of the retroactive element in a case such as this, where we are simply clarifying the law along the lines that most legal advisers would say was its meaning already, as against a situation in which we might be overturning a legal judgment.
  Mr. Griffiths: I accept that what the Minister had in mind was that it was the smallness of the legal shift that he was talking about rather than the sum of money.
  Mr. Skinner: Notwithstanding our respective stances on matters such as these, does not the hon. Gentleman understand that we are not overturning a court decision? We are laying down instructions. If there had been a challenge, a decision could have been reached in the courts contrary to that which will be the case if the Bill becomes law.
  Mr. Griffiths: The hon. Gentleman anticipates me, because I was about to put a point of that kind to the Minister. In any event, the hon. Gentleman will appreciate that it is the Minister's Bill, not mine, so I do not feel compelled to answer that point.
  Mr. Skinner: The hon. Gentleman welcomed the Bill.
  Mr. Griffiths: My welcome was qualified, to put it mildly, and I have a number of other qualifications to make yet.
  I wish to put this precise question to the Minister. Does the Bill cut across any legal proceedings that have already commenced—I think he has dealt with that—or of which notice has been given, or of which the Department may be aware?
  Mr. Prentice: It does not.
  Mr. Griffiths: I am grateful to the Minister for giving me that precise assurance at this stage. I turn from the question of retrospection, having said plainly that we do not like it, to deal with a third set of doubts. These arise from what can be described only as a lack of information.
  On 23rd April last the right hon Gentleman's predecessor as Minister gave the House what I can describe only as a
  1148
  somewhat bowdlerised account of the report by the chairman. Some of the items which were not included were critical of the Government. The right hon. Lady said at that time that there was to be an independent inquiry into past events which would be carried out by Mr. Justice Fay, Sir Edmund Compton and an accountant. We greatly welcomed that. The right hon. Lady said that a White Paper would be presented dealing with the relationship between the Crown Agents and the Government. We have supported all these actions—the right hon. Lady's request to the chairman for a full report, the establishment of the Fay inquiry, and the promise of a White Paper.
  We have not yet had the Fay Report. I understand that these things take time. We have not had a White Paper. Therefore, we do not know tonight, when we are asked to make a judgment on the Bill, what the reasons are which caused things to go wrong at the Crown Agents. We do not have the benefit either of the Fay Report or of the report by the chairman. Nor do we have any indication in the shape of a White Paper of the Government's conclusions or of their future intentions for the reorganisation of the Agents, although I acknowledge that the right hon. Gentleman made a full statement several weeks ago.
  I understand that inquiries of this kind and of this complexity take time and that this one is unlikely to be completed before June or July. I am rather concerned that the right hon. Gentleman has not been able to bring forward the White Paper or at least to tell us a little more than he felt able to tell us tonight about the Government's attitude towards reorganisation of the Agents as a whole, because that is very material background against which alone we can judge the Bill.
  Mr. Prentice: The statement I made on 16th October made it clear that we envisaged for the Crown Agents a relationship with the Government roughly analagous to that of a nationalised industry. The details of that are being worked out and will be published in the White Paper. The House wanted to know the basic decision, and I gave that on 16th October. I hope that the House will agree with me that it is better to wait a few more weeks for the White Paper so

  1149
  that careful study can be devoted to the details rather than that we should rush it. There is no hurry to know the details now that the basic decision has been announced.
  Mr. Griffiths: I appreciate what the Minister says, but I think that he himself would have preferred not to have to bring the Bill forward without the White Paper. I think that he would have much preferred, if the financial pressures upon him had not been so great, to have the White Paper and to deal with the Bill then. The Bill is an emergency. That is why we are having the Committee stage next Tuesday. I have an awful feeling—although the official Opposition will not seek in any way to delay the Bill, because we understand what is at stake—that we are to some extent being asked tonight to legislate in the dark and to buy a pig in a poke, because we have not got the full background that a White Paper and the Report of the Fay inquiry can provide and should have provided. The problem is that we have an emergency and we have to deal with it. I understand that, though I very much regret it.
  Mr. George Cunningham: It is very difficult to control oneself when one recalls the total difficulty that everyone in this House, myself included, encountered in trying to extract the least scrap of information from the Conservative Government about the Crown Agents. They would not even tell us how much they had invested on behalf of this or that territory. For the right hon. Gentleman now to be complaining about the activities of the present Government when they are responsible for first exposing and then putting right what had gone wrong during three and a half years of lack of supervision by the Conservative Government is going too far.
  Mr. Griffiths: The House may have observed that I was trying to avoid any polemics. I think I am entitled to say tonight that without the surrounding background, we are in a difficulty in making a judgment on this Bill covering a matter of such great importance.
  However, I merely make the point, and I move on to what I consider to be a third set of questions to the Minister who, at least, I hope, will take them seriously. We are entitled to ask which are the firms, or it may be the liquidators,
  1150
  which are inclined to take advantage of a loophole in the law and to refuse to pay back that which they have borrowed and that which the Crown Agents have loaned in good faith to them. Which are these firms? The Minister had a phrase in which he referred to fringe banks and property companies. We are entitled to ask who they are. Against whom is it that the Bill is guarding us? Are there any foreign firms or overseas Governments among them? I believe we are entitled to ask those questions and I hope that we shall have an answer.
  We should also ask why it is, under any Government, that the legal advisers to the Crown Agents did not pick up this problem before. One regrets that they did not. Why has it suddenly arisen? I think the hon. Member for Islington, South and Finsbury (Mr. Cunningham) was on to the point. He asked what was the trigger, and the Minister acknowledged fairly that there had been a recent case with which some of us may be familiar which triggered this off. Since we have gone that far, we had better know who or what precisely this trigger was.
  What worries me about the whole matter is that there is a curious double-standard. Any private bank which had got into such a jam as a result of a technicality, it may be, would have been required to face the music of full public exposure in detail. The directors concerned would undoubtedly have been named. Some of them might well have been sacked. There would have been little hope for any private bank or agency to have had retrospective protection and even exculpation by virtue of an Act of this House. There is a double standard. I think it is only fair to say that.
  Therefore, I put further questions to the right hon. Gentleman and his colleagues. Which of the Crown Agents' companies are covered by the Bill? Does it cover the activities of Millbank Technical Services? Second, against which outstanding loans is the Bill safeguarding the taxpayer against the non-payment of debt? We need a little more precision. To whom were the loans made, for what purpose and on whose advice? It is a question not least of accountability to this House.
  Finally, I ask the Minister one technical question relating to Clause 2. I

  1151
  must tell him that I do not like this clause. In my experience in this House, it is of a most unusual construction. It says:
  "This Act shall cease to have effect…"
  and incidentally ought it not at this stage to say "Bill" and not "Act"? After all, this is the Second Reading of the Bill.
  Mr. George Cunningham: No, the word is always "Act".
  Mr.Griffiths: The hon. Member may be right, but I am not sure that he is.
  Clause 2 says:
  "This Act shall cease to have effect on the first day on which, by virtue of one or more orders under section 192(4) of the Consumer Credit Act 1974, all of the provisions mentioned in section 1(1) above have been repealed."
  But an Order under the Consumer Credit Act is subject to parliamentary procedure. We have all been in the hands of drafters of Bills, but what happens if the House rejects such an Order, as it is entitled to do? It is not right to predicate some future action on the assumption that the House will do whatever the Government judges to be wise. That is a most unusual construction and we shall want to come back to it in Committee.
  This is a disagreeable Bill, and the Minister's task is not easy. Reluctantly, we feel that we have to support it, but we do so because we wish to protect the public purse and the taxpayer from any liability that was entered into without the willingness or knowledge of the Crown Agents. We also share the Government's desire to underpin public confidence in the Crown Agents at home and overseas.
  8.42 p.m.
  Mr. Dennis Skinner: The hon. Member for Bury St. Edmunds (Mr. Griffiths) suggested that we should have had a White Paper before the Bill was presented, and I tend to agree with him. I am not sure that there would be anything in the White Paper that we did not know already—a lot of newsprint has been used in reports of this matter—but I tend to suspect the Establishment and maybe there is something we ought to have read first in a White Paper.
  1152
  I do not expect the Fay Committee to report just yet. I have been pressing the Government for an investigation into a not indistinct matter with which the Leader of the Liberal Party is involved, and that has been going on for a considerable time. I do not expect the Fay Committee to report yet, but no news is good news.
  My hon. Friend the Member for Islington, South and Finsbury (Mr. Cunningham) has made the key point in this debate. There is reason to believe—I put it no higher than that—that if he had been able to extract information on these matters from the previous Government, several of the directors involved in this scandal might have been sent hurrying and scurrying about and some aspects of this business with which we are involved today would not be before us now.
  It could be argued that it is only a small matter and that this is only a small Bill dealing with a small number of isolated incidents, but a hell of a lot of money is involved. It has been one of the most outrageous of the many scandals in the City in recent years.
  Not only has this institution been involved in speculation, competing with many other murky organisations in the same activity, but the people who were behind it in Crown Agents were doing so in such a way that it now appears that they were breaking the law. In the Bill we are seeking to prevent the courts from making a judgment on this matter in respect of any of those people, whether it be Mr. Kenneth Cork of the Stern group or those in the other companies involved whose behaviour could well have resulted in a court case. Dress it up how one may, that is the size of the situation. When Mr. Cork, on behalf of the Stern group, decided to make a few noises about this issue, when the deeds of arrangement were being pushed through on behalf of William Stern, that could have led, had this Bill not been introduced, to a court decision that those involved in this exercise had broken the law because they changed the character of the servicing facilities of the Crown Agents.
  As I see it, the Crown Agents were responsible for servicing territories abroad on the basis of facilities which could be developed in this country on

  1153
  behalf of institutions operating within the old Empire. The Crown Agents took advantage of the property boom during the period of the last Tory Government and turned into speculators. The secondary banks were making fortunes at that time and the Crown Agents directors decided to do the same. They changed their character, their rôle and their responsibilities. They invested in what my hon. Friend the Member for Islington, South and Finsbury described as slum empires, many of them in London.
  One of my hon. Friends who is on the Front Bench and who comes from Hackney reminded me today that the Crown Agents invested in many of these properties in and around his constituency. I believe that the people concerned should pay the full penalty for their activities at that time.
  The Under-Secretary of State for Trade (Mr. Clinton Davis): I had no discussion with my hon. Friend on this topic today, and I am the only Member on the Front Bench to represent a Hackney constituency.
  Mr. Skinner: I was looking at one of my other hon. Friends on the Front Bench.
  Mr. Thomas Cox: My hon. Friend was referring to me.
  Mr. Skinner: Indeed, it was my hon. Friend the Member for Tooting (Mr. Cox) to whom I was referring. He told me that some of these investments took place in his constituency. As we all know, quite apart from the speculation in property empires, slum landlordism and the investment overseas, the net result, following the fall in property shares and the world recession, was that the Crown Agents got their fingers burnt.
  One of the commentators on this matter at the time said that the Crown Agents were the softest touch in the City. Any cheapjack organisation which wanted money during the period of the last Conservative Government would simply go along to the Crown Agents, who would provide it. At that time the amount of money the Crown Agents were handling had escalated considerably.
  That growing amount of money was there to be exploited, and along came London and County, with which the
  1154
  Leader of the Liberal Party was involved, and the London Capital group. We all know what has happened to that company, the company of my right hon. Friend the Member for Walsall, North (Mr. Stonehouse). The Crown Agents were described in the Investors Chronicle as the softest touch in the City. They were using money supplied to this country to provide services of one kind or another, and they were engaged in speculation of the shabbiest possible sort.
  Now we are rescuing those people. I naturally find it more than a little galling when I compare what is happening under the Bill with the situation developing in the town where I live, where my brothers and nine colleagues are being dragged through the bankruptcy court because our Government refuse to introduce retrospective legislation to remove surcharges, other penalties and disqualifications arising from the desire of my brothers and their colleagues to carry out the Labour Party programme as envisaged at the 1972 Labour Party conference. That is why I feel even more strongly about the matter than perhaps my hon. Friend the Member for Islington, South and Finsbury does.
  As I am not against retrospective legislation per se, I must examine the consequences of passing the Bill. My right hon. Friend the Minister is correct in saying that if we do not pass it, the taxpayer will lose a certain amount of money. He is right to say that there will be some money at stake, but I think that he will agree that it is not very much, or that the prospect is that there will not be much. For example, one cannot expect the Stern group to deliver many of its millions of pounds. One cannot expect London and County or the Stonehouse bank to deliver anything. But I am told that there are some investments which could result in a return of some kind.
  Therefore, I tell my hon. Friends who think as I do on these matters that they must consider the subject of retrospective legislation together with their desire to help the taxpayer. We all know who the taxpayer is. It is not companies such as those involved, because they can provide themselves with chartered accountants who can avoid the major excesses of taxation. By and large, those who contribute the taxation are those who

  1155
  have to work by hand and brain for a living.
  I know that my story is not the same as that told by my right hon. Friend and the hon. Member for Bury St. Edmunds. I may have coloured it in a different way, but I have told it as I see it. Here was a firm of brokers, no more and no less, which was able to go gladly on its way doing as it liked, partly as a result of the fact that we had a Tory Government and we were unable to extract information. These brokers were saying "To hell with the law. We shall carry on and make money." They did so in the knowledge that, so they thought, the property boom and everything associated with it would last for ever.
  What we are now witnessing is a further de-escalation of that. It is a tragedy that my right hon. Friends—not necessarily the Minister present tonight, but all of them collectively—are propping up the system once again, giving it a fresh tank of oxygen so that it can breathe a little longer. That is what this is all about. It is part of the excesses of the system within which we live, a part that is right out of the sewer.
  Some parts of the capitalist system can be held up and be shown to be in bright, starry colours. Other parts, the worst excesses, will be found beneath the benches, underneath the stones. That is what this Bill is. It is one of the worst excesses, the most ugly of the faces of capitalism. It should not have been an exercise like this at all. It should have been one in which people merely used the money to provide services. That is what makes it ever worse.
  I am not attacking my right hon. Friend. I understand that he inherited this job. There have been a lot of stories about how he got it, but he is there. It is not at that level that I make my comments. My references are related to the analogous matters I raised when the Bill was introduced a few weeks ago. I hope to be able to say a few more things in Committee. We shall be constantly faced with this situation. I say to my hon. Friends that if we have to make a decision, we must make it in the knowledge that we cannot be fundamentally against retrospective legislation.
  1156
  If we want to change society—not as in this Bill—there will have to be many occasions when, if we are to make much progress, we shall have to introduce a lot of retrospective legislation, as we should have done in connection with the Housing Finance Act. This business has been a long tragedy and scandal. Some of those who have left as directors of companies have suddenly appeared as directors of investing companies—a quite amazing spectacle.
  I hope that the White Paper clears up some of the doubts. I also hope that those who have been involved will be brought to justice for the way in which they have handled this matter. I trust that we shall be able to examine this in greater detail in Committee. Despite all the outrage and scandal, we are still faced with deciding whether we should accept retrospective legislation in the knowledge that we may be able to recoup some money for the taxpayer.
  8.57 p.m.
  Mr. Peter Viggers: It is so easy to criticise the Crown Agents although not so easy to do it with the eloquence and individual manner of the hon. Member for Bolsover (Mr. Skinner). I do not know whether he was speaking for the Government—
  Mr. Skinner: I do not like doing that normally.
  Mr. Viggers:—when he said that it was the intention of himself and his right hon. and hon. Friends to tear up the rule book. I was worried by his cavalier references to retrospective legislation. I am sure that they will have been noted in the country.
  The Press and politicians have tended to concentrate on the more dramatic side of the fall in the value of the Crown Agents' investments over the past year or so. The Crown Agents are a unique organisation. Last year they purchased goods worth £157 million for their overseas clients, placing three-quarters of this business in the United Kingdom. They manage nearly £1,000 million for overseas Governments and institutions and provide purchasing services for nearly 100 overseas Governments.
  It would not have been out of order, it might even have been expected, for the Minister in introducing this Bill to

  1157
  pay passing tribute to the important work done by the Crown Agents. I am happy to associate myself with the remarks made by my right hon. Friend the Member for Bury St. Edmunds (Mr. Griffiths). The goods ordered through the Crown Agents in the United Kingdom provide employment here. The funds they manage are an important part of the complex financial structure that makes up the City of London.
  It would be quite wrong to allow this debate to pass without further tribute being paid to the importance of the work of the Crown Agents and of the skill and expertise of the staff. The respect in which they are held is evidenced by the growth in the use which overseas institutions make of the Crown Agents, and that is important from the country's point of view.
  The Crown Agents have been heavily criticised for investing in property situations. If the Almighty had wished us to have the benefit of hindsight, he would have placed our eyes in a different part of our anatomy. Only one person present is entitled to say that he had the benefit of foresight, and that is the hon. Member for Islington, South and Finsbury (Mr. Cunningham). One notes the perspicacious comments which he made and the Questions which he tabled many years ago. If what he said then had been followed, it would have been of great value to the Crown Agents and to the country. If I may say without appearing to be patronising, it is only right that tribute should be paid to him.
  Property investments were made by the Crown Agents on a large scale, and history has shown that loans and investments were made in speculative operations. However, at the time of the loans property was widely accepted as being a sound investment, substantially backed by tangible assets—that was what distinguished property as an investment from manufacturing industry—and it was thought that it provided potential exciting capital appreciation. This is why one can, with the benefit of hindsight, believe that an investment in property was not the speculative investment which other investments might have been.
  Anyone who seeks to criticise the Crown Agents' investments in property should ponder whether the Crown Agents should instead have invested in
  1158
  manufacturing industry—perhaps in Rolls-Royce or British Leyland.
  Out of interest, I looked at the comparative figures of the Financial Times index on 24th November 1972 and 24th November 1975, being roughly comparable figures over three years. It fell from approximately 500 to approximately 374—a depreciation of 25 per cent. The Financial Times all-shares index fell by 27 per cent. The property sector fell from 302 to 166, a depreciation of 45 per cent., but the electronics sector and other sectors fell more. The electronics sector, in which I am particularly interested, fell from 246 to 128—a depreciation of 48 per cent.
  It is not fair for anyone, with the exception I have indicated, to say that the Crown Agents were unduly foolish in their investment policies. It is not fair to mount too heavy an attack on them.
  I turn to the specific point raised by the Bill. The Crown Agents have a vague constitutional and legal position which has never been properly clarified. Their position vis-à-vis the Moneylenders Acts is uncertain. The proposal in the Bill is that the Moneylenders Acts shall not apply, and shall never have applied, to the Crown Agents. Nobody knows at present whether the Moneylenders Acts apply.
  The Crown Agents have made many investments and loans over a number of years. The loans were made on a commercial basis between freely contracting parties. Neither the Crown Agents nor the people with whom they were dealing were under any constraint or compulsion. The loan arrangements were intended to be legally binding contracts. One of the loans was of £45 million to the property companies of Mr. Stern. The companies have not prospered and a liquidator has been appointed—a particularly capable and perspicacious accountant, Mr. Kenneth Cork of Cork Gully. I understand that he has questioned the status of the Crown Agents, with particular reference to the Moneylenders Acts. If it should be held that the Crown Agents are subject to those Acts, the loans to Stern could be illegal and therefore void and irrecoverable.
  The point made by the liquidator is fair and valid. This is an issue which

  1159
  should properly be settled by the courts. That is what the courts are for. The Government have intervened because they have involuntarily become involved with the Crown Agents. On 18th December 1974 the then Minister for Overseas Development, the right hon. Lady the Member for Lanark (Mrs. Hart), quite rightly gave the Government's unequivocal backing to the Crown Agents. That means that if the Crown Agents should suffer further loss the Government must foot the Bill. If the courts decide that the Crown Agents were acting illegally and the Stern loan and the other loans are irrecoverable, the Government must make up the deficiency.
  The Government are therefore interested in this legal question. But this raises a point of the deepest constitutional significance. The Crown Agents were acting freely when they entered into the contractual relationship. How can the House now seek to change the position of one of the contracting parties and thus cause loss to the other party?
  I am deeply worried by the retrospective nature of this proposed legislation. Retrospective legislation should always be the subject of the most assiduous and suspicious scrutiny. But here we have a shabby little Bill shuffling through its Second Reading on a quiet Thursday night. It is for the courts to decide the issue of the applicability of the Moneylenders Acts to the Crown Agents.
  In fact, The Times recently referred to the question, saying:
  "Had the matter been brought before the courts it might have involved a lengthy legal battle. The present Bill—largely a formality—puts the matter beyond any doubt."
  I do not think this Bill is a formality, even though I express no sympathy or support for the general position of the Stern group, or any of the other companies concerned with the Crown Agents, or any of the other people who may benefit if this Bill is not passed.
  It may be argued that logic, common sense and the public interest all require the Bill to become law because it will save the British people £400 million. The amount in question is very large and the arguments are powerful. But hard cases make bad law, and I do not believe that we should arbitrarily introduce retro-
  1160
  spective legislation yet again. It has been done before by this Government. There ought to be other ways of approaching the problem. While I shall not vote against the Bill, I cannot support it.
  9.7 p.m.
  Mr. George Cunningham: I am grateful to the hon. Member for Gosport (Mr. Viggers) for his kind remarks about my involvement in this matter over the last few years. I take this opportunity to say that my interest was not self-stimulated entirely, although I had had a bit to do with the Crown Agents in my previous professions.
  I was moved to take an interest by several journalists who had, before anyone in this House took an interest, written questioning articles in the newspapers. I am thinking particularly of Charles Raw, then writing in The Guardian, in 1970 or 1971, a fine exposé of questions to be asked. I and my right hon. Friend the Member for Lanark (Mrs. Hart) were at that time also the recipients of representations from people in various institutions who felt that there were questions to be asked which ought to be pursued within the House of Commons.
  I think that the hon. Gentleman was right to pay tribute to the invaluable work done by the Crown Agents in their traditional rôle as a purchasing agency in this country for any overseas Government or administration which wished to use them in that rôle. That was the rôle in which they earned their high reputation over 100 years and more until this business arose.
  I do not think that their reputation in that rôle has been damaged at all by the fact that they have made an almighty botch of their involvement in the financial side. I know for a fact that some Western countries have been interested in the possible use of an agency like the Crown Agents as something associated with their aid programmes to developing countries, and that at that time they looked to the Crown Agents as a model to imitate in their own countries. They have been rather put off by what has happened in the last few years.
  One difficulty in talking of the Crown Agents is that one has to distinguish

  1161
  between the old and the new. One wants to give the old Crown Agents—except in their traditional rôle—a very severe panning. But the new Crown Agents, the reformed Crown Agents, the controlled Crown Agents—self-controlled and controlled by the Ministry of Overseas Development—are a quite different institution under the same name. Therefore, one ought to distinguish between the old and the new institution. I have no criticism whatever of the activities of the new institution, but I think that hardly any criticism is too strong for the irresponsibility of the activities of the old institution in the financial sector.
  The hon. Member for Gosport argued that there was nothing wrong at the time in placing speculative investment in property, that the Crown Agents made tremendous profits up till 1973 or so from those investments, and that they had a lot of that profit to lose before they started eating into the reserves that they did not possess. But what was really serious about their investment in property was the kind of property company with which they got involved.
  I think, for example, of First National Finance Corporation, which then passed on some of that money to small fly-by-night companies whose names would not be recognised except, perhaps, in an area like my own where they brought misery to many thousands of tenants by winkling them out. The empire—the family—of small fly-by-night property companies in my area was centred on a company called Redsprings, which obtained money from First National Finance Corporation, which in turn obtained a large part of its loan money from the Crown Agents.
  It was the involvement of the Crown Agents in that kind of property activity which was so reprehensible. They could have gone into not only safer but more respectable property than that, even if they were going into property.
  The hon. Member for Gosport objected to passing what he called "retrospective legislation". It is important to distinguish between a declaratory Bill, which is what this is, and retrospective legislation proper. In the case of retrospective legislation proper, we make something an offence which definitely was not an offence before. In those circumstances, a person has acted on a certain assump-
  1162
  tion about what he thought was the law, and then we change it—
  Mr. Skinner: That is a bad argument.
  Mr. Cunningham: It is a perfect argument, and it distinguishes this situation completely from what my hon. Friend the Member for Bolsover (Mr. Skinner) wants the Government to do in respect of Clay Cross.
  We are doing tonight roughly what we did three or four years ago in respect of the search of vehicles in Northern Ireland. There, as a result of a court decision—and in that case there had been a court decision which we were trying to undo—we were obliged to declare that the law was what it had always been understood to be. We did that by means of a declaratory Act. So I do not regard this as retrospective legislation of a reprehensible kind.
  My capacity for surprise is diminished by long service in this House. Even so, the speech of the hon. Member for Bury St. Edmunds (Mr. Griffiths) takes the biscuit. He asked what the Crown Agents were getting involved with and lending their money to, as if the Conservative Party had no knowledge of what had been going on with the Crown Agents over the years. It was the Conservative Minister for Overseas Development who not only saw nothing wrong in the Crown Agents putting money into enterprises like First National Finance Corporation, but, on his specific authority, permitted the financial director of the Crown Agents to resign from that position and the next day, I think, to take up a position as Deputy Chairman of First National Finance Corporation, in which over the previous five years or so the Crown Agents had been investing—I speak from memory—to the tune of about £8 million.
  The Chairman of the Crown Agents at that time cannot be blamed. He should not have put the suggestion to the then Minister. But he did. Therefore, the Minister took responsibility for permitting that to happen. He might not have been able to prevent it, because the man could have resigned and taken the job and ignored the provisions of Estacode. The point is that the Minister, in effect, let him do it with his blessing.
  The Conservative Party has a great deal to answer for in neglecting pressure from newspapers and hon. Members over

  1163
  the years to look more fully into what the Crown Agents were up to, their relationship with the Government, and particularly the frequently posed question of who pays if they go broke. That question was posed by Charles Raw in his articles in The Guardian many years ago.
  The hon. Member for Bury St. Edmunds suggested that if a private institution found itself in this situation, the House of Commons would not come along with a declaratory Bill to get it out of difficulty. I do not think that is so. If we discovered tomorrow that, as a result of a doubt about a provision in the law which no one had anticipated, the clearing banks were unable to recover their overdrafts from customers, does the hon. Gentleman suggest that the Government would sit by and not introduce legislation to correct the situation? If we discovered that the building societies could not recover the loans that they had made, would we stand by and say "You knew the law. If not, it is your fault for not doing anything about it"? Of course not. We would take the action that we are now taking concerning public institutions. Therefore, that point is not well founded.
  The hon. Member for Bury St. Edmunds screws up his face as if to disagree. I question whether he would say that, if either of those events occurred, we would not come along with a declaratory Bill to put the position right. We are not doing it because this institution's losses would have to be borne out of the public purse.
  The hon. Gentleman posed one question which I also was minded to ask concerning the effect of the Bill on any actions which might be taken outside our jurisdiction. The Crown Agents have had considerable activities in Australia, probably in Singapore, and elsewhere. If the Crown Agents had to take any action outside the English jurisdiction—for example, in Austraila or Singapore—would they be able to rely upon the Bill against objections raised in another jurisdiction? I hope that the Minister will be able to answer that question when he replies to the debate.
  Am I right in thinking that the £400 million, the right to recovery of which we are at least notionally safeguarding
  1164
  by the Bill, constitutes almost half of the investment funds which the Crown Agents have had in their hands during the last two or three years? The figure frequently quoted was £900 million—just short of £1 billion. If £400 million is at risk if the Bill is not passed, we are talking of approximately 40 per cent. of the investment funds which were in the Crown Agents' hands.
  The Crown Agents' status has been vague for a very long time, but the House of Commons has from time to time—too infrequently—gently poked its nose into the matter. There was a report in 1909 by a committee—not a House of Commons Committee, strictly speaking—on which some hon. Members served. If some of the conclusions and recommendations of that committee had been more robustly followed up, we might not be in this situation now.
  I want to draw one lesson from what has occurred. Blame attaches to those who were in charge of the Crown Agents during this period. Blame attaches to Governments—it is Governments—who over the years could have done something, because they appointed the Crown Agents and had all the legal powers necessary to intervene if they wanted to do so.
  When a botch of this magnitude occurs in an institution for which, in the end, the House is responsible, the blame lies with the House. If the House had organised itself properly, with a proper committee system, over the years it would have monitored the activities of an organisation such as the Crown Agents and, by questioning, exposed the position long before it was brought to light.
  In the end, with great difficulty, it was possible to persuade the Select Committee on Overseas Development to take time off from its academic studies of rural development, and so on, to investigate this institution, and we spent two sittings investigating it. The evidence that we took on those two occasions has never been made public, and a few months later, I am sorry to say, the Select Committee decided that because the Government, acting through my right hon. Friend the Member for Lanark, were making governmental investigations, the House of Commons Committee ought to suspend its activities of investigation.

  1165
  I regard that as a serious reflection on the will of the House of Commons to do the job that only it can do. Too many of our Committtees see themselves as doing quasi-academic jobs which would probably be better done by academics, and not doing the job which only a House: of Commons Committee can do—summoning witnesses, making them answer questions, bringing secret matters to public notice, or at least to the notice of a Committee of this House, if necessary behind closed doors, and so on.
  I remember the occasion on which the Chairman of the Crown Agents, having been hauled before that Committee, refused to answer a question. Imagine what would happen before a Congressional committee if the chairman of an institution such as that refused to answer a question! There would be a motion before the House and he would be at the Bar of the House in no time at all. What happened here? The matter was glossed over. It was regarded as something about which we should not make too much of a fuss.
  If the House of Commons does not do its job of carrying out investigations, we cannot but expect scandals of this kind to occur, so when blame is being distributed among the Crown Agents and successive Governments since 1967, which is when the financial activities principally began, I do not think that the House of Commons can entirely escape responsibility.
  9.23 p.m.
  Mr. Peter Rees: The hon. Member for Islington, South and Finsbury (Mr. Cunningham) raised many points of great and general interest. Whether, with respect to you, Mr. Deputy Speaker, and the hon. Gentleman, they are entirely relevant to the Bill is perhaps open to question. None the less, they are points that are worth taking up.
  When the hon. Gentleman, with his customary lucidity, was analysing the transactions of the Crown Agents he evoked some sympathy from me, although I thought that my hon. Friend the Member for Gosport (Mr. Viggers) analysed those transactions with a little more perception and sense of the commercial realities of what has happened. When the hon. Gentleman went on to try to apportion blame, I felt that perhaps he
  1166
  went a little wide. I do not think that the purpose of this debate is to conduct a post mortem into the affairs of the Crown Agents. There may be occasions for that, but I doubt whether this is one of them.
  No doubt the hon. Member for Bolsover (Mr. Skinner) would love to rake over these matters. He has a well-known propensity for raking over muck and, if I may say so, a little bit occasionally sticks to his fingers.
  Mr. Skinner: Will the hon. and learned Gentleman explain precisely what he meant by that last remark? Unlike him, I have no business interests whatsoever.
  Mr. Rees: I am not for a moment suggesting that the hon. Gentleman has any business interest. I doubt whether any business would find it worth its while to employ him.
  That is a different question.
  Mr. Deputy Speaker (Mr. Oscar Murton): Order. The hon. and learned Member must avoid personalities.
  Mr. Rees: But when the hon. Member for Islington, South and Finsbury went on to evolve the interesting theory that the House should, either through Select Committees or in some other way, supervise the day-to-day business decisions of quasi-governmental organisations—
  Mr. George Cunningham: I did not say day-to-day decisions.
  Mr. Rees: That must be the logic of the hon. Gentleman's position.
  Mr. Cunningham: Not at all.
  Mr. Rees: This again shows the difficulties into which we are being led by the interesting points that the hon. Gentleman raised, but I doubt whether a Select Committee, however constituted and equipped, would have been able adequately to supervise the activities of the Crown Agents. If it were, I doubt whether it would be possible for the Crown Agents or any other governmental agency or nationalised industry to conduct a sensible commercial policy.
  We certainly have a rôle to play, but I doubt whether it is to monitor or check the commercial judgments of those whom

  1167
  Governments of the day entrust with responsibility for governmental agencies. But these are interesting points and perhaps on another occasion it may be possible to develop them in greater depth.
  However moderately the right hon. Gentleman introduced the Bill and however persuasively he argued its merits—and he was both moderate and persuasive—like my hon. Friend the Member for Gosport I nevertheless find the Bill extraordinary, shameless and shabby. I also find it rather grotesque that the ugly and unacceptable face of local government, as represented by the hon. Member for Bolsover, should reprove the ugly and unacceptable face of capitalism as represented by his right hon. Friend, but there are always curiosities in our debates.
  Mr. Skinner: It so happens that I do not adopt double standards in this place. I am prepared to acknowledge that when I advocate retrospective legislation because I believe that it is in the best political interests of myself and my party to do so, I do not run away from that advocacy of retrospective legislation if it happens that I do not like, exactly as much, the contents of that legislation. I understand the general purposes here. All that concerns me is that those who were responsible for this outrage are brought to book.
  Mr. Rees: I have said hard things about the hon. Gentleman and he has said hard things about me, but I would never accuse him of running away from anything. Let me pay him that tribute unreservedly.
  But the hon. Gentleman has said, with perfect frankness, on this as on other occasions, that there are no constitutional principles which concern him. He is concerned to achieve his particular economic, political and social objectives by whatever instruments come to hand. That is a point of view that I find singularly unattractive, although on one or two of the points made by him to-night—not many, but one or two—I am in sympathy with him. Particularly was I delighted and surprised to hear his observations on the true rôle of the courts. Perhaps he and I may find ourselves for once in agreement on one or two points of debate.
  At first sight, the Bill appears technical and of limited interest, but, as many hon.
  1168
  Members have pointed out, in fact it goes a good deal wider than that. A constitutional principle of some importance is involved. The Bill, not only prospectively but retrospectively, alters the legal relationships between not only the Crown Agents but the Crown Agents' subsidiaries and those who have done business with them.
  The right hon. Gentleman will, I hope, forgive me if I say that it was a little disingenous of him to say that the Bill is designed purely to clarify. The hon. Member for Islington, South and Finsbury, with a slightly Jesuitical argument, attempted to develop the theme that there was some difference between a declaratory Bill and a Bill with retrospective effect. This Bill retrospectively alters the legal relationships between the Crown Agents and those who have done business with the Crown Agents.
  We have heard it described as a declaratory or clarificatory Bill. It is not the first time that I have heard Government spokesmen describe and justify a retrospective measure in those terms. We battled long in this Chamber over a so-called declaratory and clarificatory measure to alter the effects of a judgment of the High Court in relation to VAT, which then, by the chance of litigation, was subsequently reversed by the House of Lords. That demonstrated that we were quite right to defeat that measure.
  Like my hon. Friend the Member for Gosport and the hon. Member for Bolsover, I believe that it is the rôle of the courts to clarify and declare. The Minister was wrong to suggest that any question of confidence in the Crown Agents is involved. The Government have said that they stand behind the Crown Agents and will indemnify them. Therefore, whatever the outcome of any litigation—and we accept that no litigation has yet been undertaken—it could not shake the confidence of those who might be contemplating business with the Crown Agents because the solid—if the right hon. Gentleman will allow me to use that word—the massively confident figure of the right hon. Gentleman stands four-square behind the Crown Agents. What more could anyone ask than that? His credit is behind them. There is no question of credit or confidence being involved. The Bill is purely to save a possible charge on the taxpayers of this country.

  1169
  I know—and to do him justice the right hon. Gentleman did not make a great point of this—that a defence under the Moneylenders Acts is unattractive. However, these questions should be decided—and perhaps even the hon. Member for Bolsover will agree this—as questions of general principle and not decided on one specific case. If the right hon. Gentleman believes that the time has come to clarify the whole question of moneylending transactions and if this has not been done in the consumer credit legislation, by all means let him or his right hon. and hon. Friends bring forward a general measure, but do not let us have this one, squalid little Bill to clear up one murky corner of the law.
  If I may correct my hon. Friend the Member for Bury St. Edmunds (Mr. Griffiths), this is not a loophole in the law but is something that has been recognised for many years and has been accepted because there are certain social and economic considerations to be taken into account when judging these matters.
  Mr. George Cunningham: Is the hon. and learned Gentleman suggesting that the institutions which borrowed the money in fact borrowed it in the belief that they would not have to repay it?
  Mr. Rees: Of course I am not saying that; far from it. It is not for me to look into the minds of those who borrowed. I do not even know precisely who they are. We have heard that they include the Stern group of companies. The Minister has been unable to tell us, though perhaps his hon. Friend the Parliamentary Secretary will be able to.
  I have said all along that it is an unattractive defence, but it has been accepted over the years and centuries that this kind of defence should be available to people because there is another, general principle, namely, that some people should be protected from the consequences of their own acts. That is the theme which underlies the Moneylenders Acts. All hon. Members may feel that the time has come for a review of that whole area of law. We must not clear it up piecemeal in relation to a series of transactions involving just the Crown Agents and their subsidiary companies.
  The Bill, if enacted, will not just affect the position of the Crown Agents, their subsidiary companies and those who do
  1170
  business with them, but it may also affect the creditors of those who have done business with the Crown Agents and their subsidiaries. Their moral position may be very different from that of those who did business directly with the Crown Agents.
  As the right hon. Gentleman said, the point was first taken by the liquidator of one of the companies. In other words, therefore, it is not true that the Bill is of narrow effect and that it encompasses only a few people who have had transactions with a few Government Agents. The ripples may well spread outward. The Parliamentary Secretary would do a service to the House if he were to consider this aspect in winding up the debate. There may be many more involved than just the Stern group of companies. There may be a whole range of people who have done business with them and whose credit may be affected if the Bill goes through.
  If there is any doubt in this difficult field of law—I recognise the obscurity—let us leave the courts to determine it. Indeed, this as I understood it, was the tenor of one of the points made by the hon. Member for Bolsover. I am very happy, across our mutual differences, to find common ground there. Perhaps the right hon. Gentleman might pause to think that if such disparate characters as myself and the hon. Member for Bolsover find common ground, just possibly there might be something in the criticisms that we are levelling at the Bill.
  Mr. George Cunningham: Or else you are both wrong.
  Mr.Rees: That is always a possibility. It is for the House and ultimately for the country to decide. However, as I understood the Member for Islington, South and Finsbury, he, too, had his reservations about the Bill, although perhaps he approached the problems from a slightly different angle from myself.
  There are all too many precedents for retrospective legislation. I can recall that distinguished figure, the noble Lord, the Lord Chancellor, in debates under the previous administration referring, as he said, "with a blush" to legislation which sought to overrule the decision of the House of Lords in the Burmah Oil case. It may be that this Bill does not go quite as far as that because there is as yet no decision of the courts in favour

  1171
  of those who seek to resist the claims of the Crown Agents and their subsidiaries.
  None the less, however, this is a short, squalid little Bill and it is, I believe, the product of those who believe that the Government and Government Agents must be protected at all costs. I happen to believe that that protection can sometimes be bought at too great a price. It is no part of the duty of this House to protect Governments or Government Agents from the consequences of their lack of judgment.
  9.38 p.m.
  Mr. J. W. Rooker: I shall not detain the House for long, as I have only one point to make. Perhaps my hon. Friend the Parliamentary Secretary will allude to it.
  As a relatively new Member, I have found this to be an interesting debate. The dilemma that faces us concerns £400 million of taxpayers' money. I would be the last person to want to oppose this measure for that reason. On the other hand, the point made by my hon. Friend the Member for Bolsover (Mr. Skinner) and the hon. and learned Member for Dover and Deal (Mr. Rees) is worthy of consideration. So far as I am aware, it is not the function of this place to interpret Acts. During the last three or four weeks, the Economist has been running a very interesting series on the British constitution, including the powers of this place and of the courts and the interchange between the two.
  In opening the debate, my right hon. Friend the Minister said that the third line of Clause 1, the retrospective part,
  "and shall be deemed never to have applied"
  was not retrospection in the normal sense but stated what everyone had always understood the situation to be. There have been cases in the past when that has been the situation. One example was the Trade Disputes Act 1906, which was on the statute book for 60 years. Everyone thought that he knew the interpretation in various situations. Then in 1964 we were faced with the Rookes v. Barnard case. That involved a decision of the court which was then amended subsequently by the House.
  That was a case in which an Act had been on the statute book and everyone
  1172
  assumed that he knew the interpretation of it, as in the situation we face tonight. The normal course of events was allowed to take place, in that the courts made the interpretation.
  I would not argue that the sort of action we are taking tonight in retrospective legislation only strengthens the hand of those who seek to impose on this place a Bill of Rights and a constitutional code which would make this place less flexible. Obviously we must be flexible. This is a good example, where taxpayers' money is at stake. We have to weigh the dilemma with which we are faced.
  I as a non-lawyer and a relatively new Member am not happy about the way in which the Bill can receive its Second Reading this week and come up for its Committee stage next week. Every Thursday afternoon at business questions my right hon. Friend the Lord President of the Council is asked to provide time for the consideration of various important measures. But here is one example of the House being able to act when it wants to act. Why must it always be on legislation such as this?
  9.40 p.m.
  The Parliamentary Secretary to the Ministry for Overseas Development (Mr. John Grant): Although this has been a short debate, a large number of points have arisen. I shall do my best to answer at any rate most of them, although some of them would perhaps be better raised at the Fay inquiry, and it may be necessary for others to be raised in Committee.
  In our recent debate on overseas aid, I was critical of some of the newspaper coverage of the subject. I referred particularly scathingly to the Daily Telegraph. In respect of this legislation, I should like to redress the balance somewhat. I quote from an article by Mr. Kenneth Fleet in the Daily Telegraph of Tuesday. The article was headed
  "Grand chance to save £400 million"
  and Mr. Fleet said:
  "It is not often that Parliament is given the chance to consider a Bill of just two clauses, which could save the taxpayer hundreds of millions of pounds without cutting defence spending"—
  as Mr. Fleet puts it—
  "or the social services, and on which members can be wholeheartedly in agreement without breaching or even stretching party lines."

  1173
  That is not quite the position, but it is broadly the position, tonight. Mr. Fleet went on:
  "Just such an opportunity arises this week when the Moneylenders (Crown Agents) Bill comes before the House for its second reading.
  The Bill is really a device to regularise a situation already existing in fact but not in law…And it could save us the £400 million which the Agents has still to collect."
  That summarises the situation.
  The question which has been discussed to a greater extent than any other tonight is that of retrospection. It is right that this question has been raised in case in its retrospective aspects the Bill, should be unfair to any of those who have been involved in transactions with the Crown Agents and who may have been considering challenging the Crown Agents to recover their loans. But we have here also to consider what is fair to the taxpayer.
  As my right hon. Friend said, certain inquiries have been made by the liquidators of a company and by other companies, but no legal proceedings have as yet been started to challenge any of these loans. Thus there is no existing litigation for the Bill to affect. Nevertheless, the possibility of litigation is there and would remain if the legal position were not clarified.
  This would bring uncertainty for the Crown Agents and for the recipients of their loans, possibly for quite some time. It could also affect the confidence of the overseas principals, despite what the hon. and learned Member for Dover and Deal (Mr. Rees) said. As the right hon. Member for Chipping Barnet (Mr. Maudling) said on 16th October, any legislation must ensure the confidence of the overseas principals in the Crown Agents. The hon. Member for Bury St. Edmunds (Mr. Griffiths) repeated that tonight. I believe that the Bill will in fact help to do that.
  If loans were not repaid, there would be considerable implications for public spending bearing in mind the Crown Agents' current financial difficulties and the Government's ultimate responsibility for their acts. We cannot quantify these precisely, as there is a large number of loans at varying degrees of risk and a wide range of borrowers who would not dream of trying to avoid repayment. Of that we can be certain.
  1174
  However, at a time of utmost restraint on public spending, it would be quite unacceptable to have to take on what is, after all, an entirely avoidable burden by providing further financial support to the Crown Agents to overcome the results of prolonged delay in the repayment of loans or in the payment of interest. There would be a public outcry if property or other companies could delay or avoid repayment of loans made, and no doubt received, in good faith, causing adverse repercussions on public expenditure.
  Let me say in reply to my hon. Friend the Member for Bolsover (Mr. Skinner), who has now left the Chamber, that we are not allowing by means of this legislation anyone who has been guilty of a criminal act to get away with it. As a matter of fact, the Director of Public Prosecutions has been considering this situation for some time. I cannot add to what I have said on that point, but that is the situation.
  I now come to the speech of the hon. Member for Bury St. Edmunds, who described this as a disagreeable Bill. I do not think any of us finds it very agreeable. Perhaps we can agree on that anyway. On the other hand, he welcomed it in general terms and he expressed his confidence in the Crown Agents and in their present Chairman. I certainly subscribe to that attitude, as my right hon. Friend has done.
  I should like to dispose of the point which the hon. Gentleman made about Clause 2. He suggested that it takes for granted orders to introduce the Consumer Credit Act. I can assure him that that is certainly not our reading of it. We do not believe that is so. If and when Parliament approves the repeal of the Moneylenders Acts, this Bill will cease to have effect. If Parliament withholds its approval, as it is entitled to do, the Bill will continue to be effective. That is the situation in respect of Clause 2.
  I should like to pick up some of the hon. Gentleman's specific points. He read his list of sums based on varying degrees of risk. I was not able to take them down as he read them out, but in fact they are broadly true and his sums add up. The figure is £405 million. How much is at risk we cannot be sure at this stage, but we have to assume the worst. There may be other risks on other accounts.

  1175
  I must say that I was astonished by the hon. Gentleman's remarks about lack of information. He has waived his right of reply and I do not wish to make party capital out of this. My hon. Friend the Member for Islington, South and Fins-bury (Mr. Cunningham) has dealt more than adequately with that point.
  I cannot understand why the hon. Gentleman should refer to the Fay inquiry and, one might almost say, the laggardly way in which it is functioning. That is not really so. It is not long since the inquiry was set up and it is working expeditiously.
  Mr. Eldon Griffiths: It is not for me to suggest that the Fay inquiry is laggardly. I do not think it is. My point is that it is much more difficult to judge the merits of this Bill without the other information.
  While I am on my feet, may I press the hon. Gentleman not to gloss over quite so quickly the possibility that there may be other problems? I should like to know whether this is the end of the line on this problem.
  Mr. Grant: I am not glossing over it. The short answer is that we cannot be sure. We hope that it is. I think that is as much as I can say on that matter tonight.
  I think that the hon. Gentleman was unfair in his reference to the White Paper. It is a complicated situation. My right hon. Friend said that the White Paper would be produced very shortly. I appreciate that it would have been better if we had had the information at an earlier stage, but the hon. Gentleman cannot lay the blame for that at the door of the present Government. The information will appear shortly, and when it appears it is essential that we get the matter right. It has been the actions of the present Government which to a considerable extent have exposed the situation. We are acting in a number of ways, including by means of this proposed legislation, to correct the situation.
  The hon. Gentleman asked me which firms challenged the debts. The answer is that no company has yet done so, but the actual inquiry came from the liquidator of Vehicle and General Assurance.
  1176
  Another question asked by the hon. Gentleman was why the Crown Agents' legal adviser did not pick up the situation earlier. That is probably a point for the Fay inquiry, and I have no doubt that it will be looking into that matter. The hon. Member for Bury St. Edmunds asked about the Crown Agents' companies covered by the Bill. I understand there are only two—Four Millbank Nominees Ltd. and Four Millbank Holdings Ltd.
  Tributes have already been paid to my hon. Friend the Member for Islington, South and Finsbury and I endorse them. There is an old saying that it is better to give than to lend. It generally costs about the same. In respect of the Crown Agents, it might have been cheaper to give than to lend.
  In his pertinent and forthright contribution, my hon. Friend underlined the need for greater supervision. I agree that it is essential to ensure that there is no repetition of this unfortunate saga and, following a directive from the former Minister of Overseas Development earlier this year, the Crown Agents' lending policy is much more selective. They have withdrawn from property and secondary banking on a commercially prudent basis. They are turning away with a belated shudder from the unacceptable face of capitalism.
  I am glad that my hon. Friend the Member for Islington, South and Finsbury drew a distinction between the old Crown Agents and the new. We have every confidence in the way their operations are now being conducted. As to past shortcomings and apparent financial permissiveness, the committee of inquiry will obviously report on these matters and my right hon. Friend has already made clear that he will report the findings to the House. Funds under management now total about £700 million and, in reply to my hon. Friend the Member for Islington, South and Finsbury who asked about actions overseas, I can say that the Moneylenders Acts do not have effect overseas.
  I hope that I have dealt with most of the points raised in the debate. There will be other opportunities to come back to this subject quite shortly. I emphasise again that the crucial point is that the Bill's object is to put beyond doubt that

  1177
  the Moneylenders Acts did not and do not apply to the Crown Agents or to companies wholly owned by them. It is important in the interests of maintaining the confidence of overseas principals of the Crown Agents and of the British taxpayer that there should be no doubt about this. Any doubts can be dispelled only by a Bill such as this.
  Question put and agreed to.
  Bill accordingly read a Second time.
  Bill committed to a Committee of the whole House.—[Mr. Stoddart.]
  Committee tomorrow.

  HOUSE OF COMMONS MEMBERS' FUND
  Resolved,
  That, in pursuance of the provisions of Section 3 of the House of Commons Members' Fund Act 1948, the maximum annual amounts of the periodical payments which may be made out of the House of Commons Members' Fund under the House of Commons Members' Fund Act 1939, as amended by the said Act of 1948 and by the Resolutions of the House of 17th November 1955, 7th March 1957, 17th May 1961, 9th March 1965, 4th May 1971, 1st August 1972 and 29th November 1974, be varied as from 1st December 1975 as follows:

  (a) for paragraph 1 of Schedule 1 to the said Act of 1939, as so amended, there shall be substituted the following paragraph:—

  '1. The annual amount of any periodical payment made to any person by virtue of his past membership of the House of Commons shall not exceed £950 or such sum as, in the opinion of the trustees, will bring his income up to £1,550 per annum, whichever is the less:

  Provided that if, having regard to length of service and need, the trustees think fit, they may make a larger payment not exceeding £1,750 or such sum as, in their opinion, will bring his income up to £2,350 per annum, whichever is the less';

  (b) for paragraph 2 of the said Schedule there shall be substituted the following para graph:—

  '2. The annual amount of any periodical payment to any person by virtue of her being a widow of a past Member of the House of Commons shall not exceed £475 or such sum as, in the opinion of the trustee, will bring her income up to £1,075 per annum, whichever is the less:

  Provided that if, having regard to her husband's length of service or to her need, the trustees think fit, they may make a larger payment not exceeding £875 or such sum as, in the opinion of the trustees, will bring her income up to £1,475 per annum, whichever is the less';

  1178

  (c) in paragraph 2A of the said Schedule for the words 'the annual amount of any periodical payment' to the end of the paragraph, there shall be substituted the words:—

  'the annual amount of any periodical payment made to any such widower shall not exceed £475 or such sum as, in the opinion of the trustees, will bring his income up to £1,075 per annum, whichever is the less:

  Provided that if, having regard to his wife's length of service or to his needs, the trustees think fit, they may make a larger payment not exceeding £875 or such sum as, in the opinion of the trustees, will bring his income up to £1,475 per annum, whichever is the less.'—[Mr. Parker.]

  STATUTORY INSTRUMENTS
  Ordered.
  That the Lords Message of 25th November, relating to a Joint Committee of both Houses to scrutinise delegated legislation, be now considered.—[Mr. Walter Harrison.]
  Lords Message considered accordingly.
  Resolved,
  That this House doth concur with the Lords in the said Resolution.—[Mr. Walter Harrison.]
  Message to the Lords to acquaint them therewith.

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

  LICENSED PREMISES (VIOLENCE)
  9.55 p.m.
  Mr. Ron Lewis: It may seem strange that I should be initiating an Adjournment debate about violence in public houses with particular reference to individual public house managers. The House will be well acquainted with certain of my views and with the fact that I am a member of the temperance group of the House of Commons. I make no apology for that, for it is no crime.
  Violence appears to be on the increase. Whatever views one might have on the merits of drinking one should always be prepared to support any organisation or person who has a just cause. I have initiated this debate because some time ago I received a deputation from the licensed house managers from my constituency. In 1971 my constituency was

  1179
  the subject of much discussion on the Floor of the House. Although I do not drink I can safely claim that during my 11 years as Member of Parliament for Carlisle I have always been on reasonably good terms with and had a friendly reception from the licensed house managers there as a whole.
  The deputation asked me whether some positive action could be taken or initiative made to try at least to stem the violence on licensed house managers. My constituency in this respect is no different from any other. When I met that delegation I was somewhat shocked and a little dismayed that one of their number was more or less covered in bandages. He had been in hospital at least twice and beaten up at least three times. Another member of the delegation had also spent some time in hospital after violence in his pub.
  Some people may argue that it is the manager's own fault, but I strongly disagree with that. They are at least carrying out a lawful occupation, and it is when they try to uphold the law that they are often attacked. On the whole public house managers are decent people. In any walk of life there is always the exception.
  It being Ten o'clock, the motion for the Adjournment of the House lapsed, without Question put.
  Motion made, and Question proposed, That this House do now adjourn.—[Mr Walter Harrison.]
  Mr. Lewis: I have received a number of letters on the matter, but I have had only one derogatory comment, which was made by a gentleman from Durham who telephoned my agent to say that he was rather surprised that I, with my background as a worker in the temperance movement, should be standing up for a set of public house managers, many of whom encouraged the drug traffic. I refute that allegation. They are doing their job.
  What can be done? After meeting my constituents, I met at the House representatives of the National Association of Licensed House Managers, one of the newest trade unions. We had a good discussion. They were keen that Parliament should take positive action. I under-
  1180
  stand that they have also discussed the question with my hon. Friend the Minister. The associations is a genuine trade union with about 30,000 members, and it is still increasing in size. It is the latest trade union to affiliate to the TUC. If I may do a little plugging, I urge any licensed house manager who is not a member of a trade union to join the association, which is doing what other trade unions do, namely, seeking to protect and help its members.
  I agree with the Association that what is needed is a new law, or at least an amendment to the present law, to deal with the problem of violence in public houses. I also agree with the Association that a person convicted of committing an act of violence against a licensed house manager should be barred by law from entering a public house for, say, six months or 12 months. What is wrong with that? No doubt my hon. Friend will make the usual claim, which we are used to hearing from Front Bench speakers on both sides of the House, that it could not be enforced. I disagree. I believe that such a law would at least be a deterrent. What is wrong with that? If such a law can reduce this kind of violence the Government should take the initiative and amend existing legislation.
  I supported the introduction of the breathalyser. In my view it has helped to reduce accidents. I remember the arguments used against it. I would not say that it was foolproof. If I am convicted of a breathalyser offence there is nothing to stop me from driving in another part of the country where I am not known, though I would do my utmost to make sure that I was not caught again. If we amended the law in the way in which I am suggesting, it would act as a deterrent to those who have already been convicted of violence. Such people would be careful not to be caught a second time. That is my main argument for some kind of legislation to protect licensed house managers and their families. It would cut down the crime wave in licensed premises.
  Yesterday we discussed the question of terrorism. We all know that violence against the person is increasing generally. If that is so, it must be increasing in licensed houses. Many of the victims of violence in licensed houses have been

  1181
  upholding the law, particularly at closing time. This is a matter for Parliament. We make the rules and the courts administer them. If the increase in violence on the football terraces had been dealt with a little more earnestly at first, I do not believe that it would have reached present proportions. This is the main argument of the managers of licensed houses in my constituency and elsewhere. They are anxious that the violence they are experiencing should not increase. They argue that action now will prevent things from getting out of hand later.
  On average, two cases of assault are reported weekly to the headquarters of the National Association of Licensed House Managers. There must be many more which are not reported. The Association has obtained injunctions against persons in two cases. The courts have thus come out in favour of the managers. That is only in respect of a particular public house. It has had a good effect locally, but it is limited. Not long ago the National Association of Licensed House Managers and the National Association of Licensed Victuallers closed their pubs as a mark of respect for the London licensee who died following an incident at his home. They put notices on the doors of their pubs saying,
  "This house, together with thousands throughout the country, will not open tomorrow, the day of the funeral."
  That was loyally obeyed throughout the country.
  It is suggested that a licensed house manager who was assaulted not long ago will never work again. The person responsible for the crime was fined £10, with £5 costs. The manager was carrying out his duties. Another man received an injury to his leg involving the removal of his kneecap. He has received £650 from the Criminal Injuries Compensation Board, the setting-up of which I supported. But this is public money, although people who are injured as a result of criminal activities are entitled to it. In another incident a licensee received a stab wound in the back. Another person suffered an injury to the left eye, necessitating nine stitches, and a broken nose. He has received £200 from the Criminal Injuries Compensation Board. Another person was butted in the left eye and suffered injuries necessitating
  1182
  13 stitches and a partial loss of sight. He has received over £2,000 from the Board. A woman licensee was assaulted by someone who used a bar stool, and she has received £400 from the Board.
  What we want is a law to prevent incidents of that type from occurring. British pubs are unique in that they receive special protection from Parliament. I am not an expert on this matter, and I do not think my hon. Friend the Minister of State is an expert, but we have certain things in common. It can be argued that the existing measures are not sufficient for those who have to operate them and that Parliament should take further measures to afford them the personal protection that they need.
  It can be said that a number of these incidents occur because the licensee upholds the law at closing time. The licensed house manager is caught both ways. If he allows drinking after hours, he can be prosecuted and convicted; or he can be clobbered if he insists that the law must be upheld. Often the public house manager is the victim of the violence, so he cannot win.
  The steward of a club—and, again, I am not an expert on this matter—is in a different position from that of the licensed house manager because the steward is protected by his committee. The committee can say whether a person should ever enter the premises again, but a licensed house manager cannot do that because a licensed house is involved.
  I believe it is high time that the Government got together the various organisations in the licensed trade and in the public services, such as the busmen and—in my own industry—the railwaymen. I am sure that such a move would have the support not only of the whole House but of the whole country.
  Busmen and railwaymen, like public house managers, have been victims of assault and violence—so much so that they have refused to run the buses or the trains. In many cases licensed house managers have closed their public houses long before they should—in particular when certain football teams are playing in their vicinity.
  I believe that it is time that my hon. Friend and his Department took the initative and gathered together all these organisations, trade unions and others, whose members, like the licensed house

  1183
  managers, are victims of thuggery. They should discuss the matter round the table, try to form a common policy for fighting this ever-growing menace, and ask Parliament to give them some kind of protective measure that would act as a deterrent.
  I believe that this is a practical proposition. It will not entirely solve the problem. I should be deluding myself and the House if I suggested that it would. It is a proposal, however, that could go some way towards solving the problem, and act as a deterrent to the would-be violent persons in society—and the quicker we eradicate violence the better.
  10.17 p.m.
  The Minister of State, Home Office (Mr. Alexander W. Lyon): I share the concern which has been expressed by my hon. Friend the Member for Carlisle (Mr. Lewis) about the incidence of violence towards licensees—indeed, the incidence of violence in our society generally. He is quite right to say that violent crime is on the increase. He is right to highlight this particular aspect of it. It is ironic that he and I should be discussing our mutual concern in this regard, since both of us happen to be Methodist teetotallers and not habitues of the public houses of the managers who are his concern.
  I accept the sincerity of the views he expressed. I have seen delegations from the National Association of Licensed House Managers and understand the force of their concern, but we have to put the matter into some kind of perspective. The Home Office in 1972, and again this year, largely at the request of the National Association, took soundings from seven police districts, including the Metropolitan, to try to evaluate what was happening in relation to attacks upon licensees.
  It is difficult to get this information from the criminal satistics, because assaults are recorded generally in one group, and we cannot decipher from our figures whether the victims were licencees or any other occupation. But the report we received from the seven chief officers of police was that, both in 1972 and now, they have seen no greater incidence in the normal pattern of criminal violence against licensees than in relation to other members of the community. What has happened is that violence has increased,
  1184
  as my hon. Friend pointed out, and the number of violent crimes has increased, and so the number of violent crimes against licensees has increased.
  But it is part of a total pattern and not just one increasing problem out of perspective with the rest of the picture of crime. I have to bear that in mind in considering whether attacks upon licensees are so great a problem that they require special measures over and above anything that we do to deal with the upsurge in crime that has taken place over the past 20 years.
  The one added protection that was urged by the National Association and that has been urged tonight by my hon. Friend is that there should be some kind of disqualification procedure relating to those who are convicted of offences of violence against licensees—something like the disqualification from driving which appertains to convictions for drunken driving. At first sight, it has a certain appeal. But I am sure that my hon. Friend will recognise on reflection that it is not practicable, and if it is not practicable, however desirable it is that we should add greater protection to any section of the community that is threatened, there is not much point in introducing it.
  Mr. Ron Lewis: Let us give it a try.
  Mr. Lyon: My hon. Friend asks that it should be tried. In 1902, the Licensing Act allowed courts to blacklist people convicted of offences of being habitual drunkards. As my hon. Friend will know as a Joint Vice-President of the United Kingdom Alliance, the statistics indicate that it has not been very successful in stopping the incidence of habitual drunkenness. In 1972, there were two such blacklistings. In 1973, there were six. In 1974, there was none at all. The result is that we must consider that this kind of blacklisting has no effect.
  If we applied a somewhat similar system to those who were convicted of assault, what would happen? Presumably, the idea is that the police would inform licensees in the district that John Smith had been convicted of an offence. If the licensees know John Smith, they would be able to bar him from their pubs. If they did not know him, it would not make any difference that they had been

  1185
  informed that a certain John Smith had been so convicted.
  In any event, it is not necessary to have a disqualification system if that is to be the only effect. If the licensees know about the conviction of John Smith, either from their local newspaper or from their own sources of information, including the journal of the National Association, they are entitled to bar him. They can bar whom they like from their premises. They have an absolute right so to do. As I understand it, in the South-West, the Association has tried to run a voluntary scheme of this nature, alerting licensees to people who have been convicted of offences of violence. That does not seem to have been any more successful than any other scheme for reducing the incidence of violence in those areas.
  It is suggested that we might get over that by attaching a photograph to a notification. But again it would not be clear even from a photograph who was and who was not a convicted person in this regard. There is all the element of mistake which can come about, as we know only too well from criminal convictions which are based upon identification where the person making the identification has previously seen a photograph. This kind of mistake is all too clear. If a person were barred from a public house because it was alleged that he had been convicted and if the allegation were false, it would open up the possibility of a defamation suit against the licensee concerned.
  We must also recognise the difficulty that comes into the picture from the Rehabilitation of Offenders Act. That Act made it clear that if a man had been convicted of an offence for which he received a sentence of less than two and a half years' imprisonment, that conviction and sentence could, for all practical purposes, be expunged after 10 years. If only a fine, it may be expunged after five years. Therefore, anyone who had a spent conviction of that kind and who was still on the barred list could sue for defamation. My hon. Friend's proposal is not only suspect in its effect, but it may be positively dangerous in incurring a possible legal suit against a licensee.
  Therefore, as with the rest of crime, including violent crime, the real protection is an increasing certainty of detection and conviction of those who might take
  1186
  part in such crimes. That is primarily the responsibility of the police, and we have done all we can to increase the strength of the police and the efficiency of the individual police officer.
  There is one aspect of the problem peculiar to licensed premises which I should mention. Not many years ago, a judicial decision provided that a police officer was not entitled to enter licensed premises unless he had reasonable cause to suspect that an offence had been committed upon the premises. As a result, police officers stopped their former practice of calling on licensed premises as a matter of routine in the course of their duties. The managers and, indeed, other licensees have urged that we should reverse that ruling so that police officers may again enter licensed premises as part of their routine, as their presence could have a restraining effect upon the passions of customers.
  Unfortunately, as my hon. Friend knows, it is not always possible, even if we desire it, to get time in this House for passing worthy pieces of legislation. A matter of this kind is of relatively low priority compared with the many other claims on parliamentary time. We must wait for a suitable occasion when the matter can be put right. We hope to have an opportunity, but it does not seem likely for some time.
  Meanwhile, I remind licensees, as I mentioned in the letter which I wrote to them, that they are entitled to invite police officers to come into their premises. If they issue that invitation, I am sure that the police forces in their areas will be happy to oblige, within the constraints falling upon police manpower at this time. The police are over-stretched, particularly in our major urban areas. Therefore, it may not be easy for them to respond to such an invitation in every situation. However, they are aware of the difficulty and are keeping a look-out in the hope of restraining these assaults.
  The managers were very concerned that particularly magistrates, but even the higher courts, were not passing sentences commensurate with the kind of violence that has been exhibited in some of these assaults. We have taken up that matter with the Lord Chancellor. We have no power, nor has he, to govern the sentences which should be awarded by any court. But in a major speech, he has drawn this

  1187
  concern to the attention of magistrates. I hope that some of the sentences which have been passed since that time have done something to placate the anxieties of the licensees.
  I am grateful to my hon. Friend for allowing me the opportunity of discussing this matter. I am sorry that I cannot be
  1188
  more helpful about the suggestion that he has made, but—
  The Question having been proposed at Ten o'clock and the debate having continued for half an hour, Mr. DEPUTY SPEAKER adjourned the House without Question put, pursuant to the Standing Order.
  Adjourned at half-past Ten o'clock.

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  PRIME MINISTER (ENGAGEMENTS)
  PRIME MINISTER (ENGAGEMENTS)
  NEDC, TUC and CBI
  NEDC, TUC and CBI
  CENTRAL POLICY REVIEW STAFF
  CENTRAL POLICY REVIEW STAFF
  DEVOLUTION
  DEVOLUTION
  UNESCO
  UNESCO
  UNEMPLOYMENT
  UNEMPLOYMENT
  PRIME MINISTER (VISITS)
  PRIME MINISTER (VISITS)
  MR. WYNNE GODLEY
  MR. WYNNE GODLEY
  NATIONAL EXHIBITION CENTRE
  NATIONAL EXHIBITION CENTRE
  ENERGY PRICES
  ENERGY PRICES
  EEC SUMMIT MEETING
  EEC SUMMIT MEETING
  LORD PRESIDENT OF THE COUNCIL (SPEECH)
  LORD PRESIDENT OF THE COUNCIL (SPEECH)
  INDUSTRIAL STRATEGY
  INDUSTRIAL STRATEGY
  EUROPEAN PARLIAMENT (ELECTIONS)
  EUROPEAN PARLIAMENT (ELECTIONS)
  CHANCELLOR OF THE EXCHEQUER
  CHANCELLOR OF THE EXCHEQUER
ENVIRONMENT
  M5 Construction Contracts
  M5 Construction Contracts
  Bury St. Edmunds Bypass
  Bury St. Edmunds Bypass
  Home Loans
  Home Loans
  Drivers (Contact Lenses)
  Drivers (Contact Lenses)
  Cuban Embassy School, St. John's Wood
  Cuban Embassy School, St. John's Wood
  A66 (Thornaby)
  A66 (Thornaby)
  House Buying (Loans)
  House Buying (Loans)
  Tonfannau Camp
  Tonfannau Camp
  Councillors' Allowances
  Councillors' Allowances
  Liverpool
  Liverpool
  Government Property (Trade Department)
  Government Property (Trade Department)
  House Building
  House Building
  London North Orbital Road (Chess Valley)
  London North Orbital Road (Chess Valley)
  Shipping (Holyhead-Dublin)
  Shipping (Holyhead-Dublin)
  Derelict Land
  Derelict Land
  Aire Valley Road Inquiry
  Aire Valley Road Inquiry
EDUCATION AND SCIENCE
  Awards Regulations
  Awards Regulations
  Open University
  Open University
  National Union of Students
  National Union of Students
  Ministerial Direction
  Ministerial Direction
  School Transport
  School Transport
  Works of Art (Export Control)
  Works of Art (Export Control)
  Comprehensive Schools
  Comprehensive Schools
  Schools Inspectorate
  Schools Inspectorate
  School Attendance Register
  School Attendance Register
  Primary Schools
  Primary Schools
  Silversmithing
  Silversmithing
  Teachers
  Teachers
  Special Schools
  Special Schools
  SCOTTISH SOLICITORS (EUROPEAN COMMUNITY)
  SCOTTISH SOLICITORS (EUROPEAN COMMUNITY)
NORTHERN IRELAND
  Water Supply
  Water Supply
  Security Operations (Border)
  Security Operations (Border)
OVERSEAS DEVELOPMENT
  Cochin Shipyard Project
  Cochin Shipyard Project
WALES
  Roads
  Roads
SOCIAL SERVICES
  Pensions and Earnings
  Pensions and Earnings
  Doctors
  Doctors
  School Meals
  School Meals
  Mobility Allowance
  Mobility Allowance
  Disabled Persons
  Disabled Persons
  Rugby Hospitals
  Rugby Hospitals
  Family Planning
  Family Planning
  Medical and Welfare Food Benefits
  Medical and Welfare Food Benefits
  Ear, Nose and Throat Treatment
  Ear, Nose and Throat Treatment
  Abortion
  Abortion
  Immigrant Doctors
  Immigrant Doctors
  Giro
  Giro
  Ormskirk and District (Hospitals)
  Ormskirk and District (Hospitals)
  Burntwood Hospital, Brierley
  Burntwood Hospital, Brierley
  Juvenile Offenders (Accommodation)
  Juvenile Offenders (Accommodation)
  Administrative Staffs
  Administrative Staffs
  Duty-free Imports
  Duty-free Imports
  Estate Cars
  Estate Cars
NATIONAL FINANCE
  Tractors
  Tractors
  Premium Bonds
  Premium Bonds
  Treasury Accountancy
  Treasury Accountancy
  Borrowing Requirement (State Purchases)
  Borrowing Requirement (State Purchases)
  Married Woman's Tax Allowance
  Married Woman's Tax Allowance
  Pensioners
  Pensioners
  Mobility Allowance
  Mobility Allowance
  Value Added Tax
  Value Added Tax
  European Community
  European Community
FOREIGN AND COMMONWEALTH AFFAIRS
  Welsh Centre for International Affairs
  Welsh Centre for International Affairs
  Republic of Ireland
  Republic of Ireland
  Departmental Offices (Scotland)
  Departmental Offices (Scotland)
  Overseas Students
  Overseas Students
  Regional Development Fund
  Regional Development Fund
DEFENCE
  Armament Imports
  Armament Imports
  Gan
  Gan
  HM Ships (Accident Inquiries)
  HM Ships (Accident Inquiries)
  Naval Establishments
  Naval Establishments
  Expenditure
  Expenditure
  Pensions
  Pensions
  Chatham Dockyard
  Chatham Dockyard
  Hydrography
  Hydrography
  Recruitment
  Recruitment
  Children's Education
  Children's Education
  Oman
  Oman
  Mules
  Mules
  Personnel
  Personnel
  Lands
  Lands
EMPLOYMENT
  North-West Region
  North-West Region
  Disabled Persons
  Disabled Persons
  Kirkby and Merseyside
  Kirkby and Merseyside
  School Leavers
  School Leavers
  Scotland
  Scotland
  Wales
  Wales
  Retired Persons' Life Expectancy
  Retired Persons' Life Expectancy
INDUSTRY
  Departmental Staff
  Departmental Staff
  Kearney and Trecker Marwin Ltd.
  Kearney and Trecker Marwin Ltd.
  Postal Services
  Postal Services
  Aerospace
  Aerospace
  Ministerial Appointments
  Ministerial Appointments
  Textiles and Footwear
  Textiles and Footwear
  National Enterprise Board
  National Enterprise Board
  Nationalised Industries
  Nationalised Industries
  Sonar Development
  Sonar Development
  Industrial Democracy
  Industrial Democracy
PRICES AND CONSUMER PROTECTION
  National Consumer Council
  National Consumer Council
  Departmental Staff
  Departmental Staff
SCOTLAND
  Social Workers
  Social Workers
TRADE
  Industrial Democracy
  Industrial Democracy
  Asian Regional Conference
  Asian Regional Conference
  Company Law
  Company Law
  Tea Estates (Ceylon)
  Tea Estates (Ceylon)
ENERGY
  Burmah Oil Company Ltd.
  Burmah Oil Company Ltd.
  Conservation
  Conservation
  Ironstone Restoration Fund
  Ironstone Restoration Fund
  Nationalised Industries
  Nationalised Industries
  Iron Ore
  Iron Ore

Preamble
The House met at three of the clock: The LORD CHANCELLOR on the Woolsack.
Prayers—Read by the Lord Bishop of Rochester.

NORTH SEA OIL: STATE PARTICIPATION
Lord CAMPBELL of CROY: My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government whether it is intended that the British National Oil Corporation should be a partner or consortium member in every oilfield on the United Kingdom Continental Shelf, including oilfields already being developed and oilfields deemed not to be commercial.
The MINISTER of STATE, DEPARTMENT of ENERGY (Lord Balogh): My Lords, it is the firm aim of Her Majesty's Government to secure a majority State participation in all commercial oilfields under development now or found under Fifth Round licences.
Lord CAMPBELL of CROY: My Lords, I am grateful for that Answer. If all commercial oilfields are to be treated in this way, does this not restrict the flexibility with which the Government's policy of 51 per cent. participation can be negotiated with individual companies? Were not other options also open? Secondly, what is to be the definition of a commercial oilfield? This is very relevant because the Government had considerable difficulty in finding such a definition during the course of proceedings upon the Petroleum and Submarine Pipe-lines Act.
Lord BALOGH: My Lords, I should have thought that the companies themselves will have a great interest in declaring commercial the commercial oilfields. As to the second question, as to what constitutes an oilfield, it is like the
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elephant; it cannot be defined, but when you look at it you know what it is.
The Earl of LAUDERDALE: My Lords, can the noble Lord tell us how proceedings are advancing with regard to participation? Have any more major oil companies accepted the principle of participation?
Lord BALOGH: My Lords, I thought that the noble Earl was extremely careful to tell us not to breach confidentiality, and I am not willing to do so now.
The Earl of LAUDERDALE: My Lords, without asking the noble Lord to breach confidentiality, surely he might say that a dozen or half a dozen oil companies or the famous Seven Sisters, have agreed in principle. Or are we to take it that they have not?
Lord BALOGH: My Lords, I should not take anything for granted in this field. I can assure the noble Earl that we have two very nice fish on the hook, but I shall not say who.
Lord CAMPBELL of CROY: My Lords, I will examine Hansard very carefully tomorrow; but is the noble Lord aware that his initial Answer did not give very much information? Can he say that there are other options open which allow for more flexibility where participation is concerned?
Lord BALOGH: My Lords, we are taking each case individually, and, of course, we hope to have the utmost flexibility. That does not mean that our aim is not majority participation.
Lord BYERS: My Lords, does the noble Lord think that using the phrase, "fish on the hook", will advance the co-operation we need between industry and the Government?
Lord BALOGH: My Lords, I do not think they will take a joke as sourly as the noble Lord does.
Lord BYERS: My Lords, if the fish is on the hook what will happen to it when it is off the hook?
The Earl of LAUDERDALE: My Lords, in view of his earlier remarks to the effect that both Burmah and BP agreed to participation in principle, would the noble Lord say whether they are the two lovely fish on the hook?
Lord BALOGH: My Lords, the noble Earl continues to want me to be indiscreet, as I was before I was a Minister. He is not going to succeed.
Lord HARMAR-NICHOLLS: My Lords, should the reaction which brings two possible results be considered a success, a medium success or a failure at this stage?
Lord BALOGH: My Lords, I should have thought it depends entirely which company it is, under what conditions, and what kind of stimulus that gives to the others.
The Earl of ONSLOW: My Lords, would the noble Lord try to give some answers to the questions, as opposed to just ducking, weaving and giving very funny replies about elephants, which have nothing to do with oil at all.
Lord BALOGH: My Lords, that would be entirely against the tradition of this House.
The Earl of ONSLOW: My Lords, is the noble Lord aware that I am probably more acquainted with the traditions of this House, as my forebears and I have been here since 1801?
Lord CAMPBELL of CROY: My Lords, as the noble Lord speaks in riddles, and sometimes in metaphors, perhaps he can tell us whether he is baiting a fish-hook to catch an elephant.

NHS STAFF AND DAY NURSERIES
3.12 p.m.
Baroness SUMMERSKILL: My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government why they do not ensure that hospitals provide a nursery for the pre-school children of the staff in order to retain the valuable services of women doctors and nurses.
Lord WELLS-PESTELL: My Lords, the provision of day nurseries for children of National Health Service staff where these are needed is the function of the employing Health Authorities. They have been advised by my right honourable friend the Secretary of State for
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Social Services that these facilities can be provided where it can be shown that the high costs involved can be justified by the effect on their problems of recruitment and staff retention. The decision whether or not to provide a day nursery is, therefore, a local one in each case.
Baroness SUMMERSKILL: My Lords, that is rattler a complicated test to apply. Is it not a fact that a number of hospitals have established these nurseries with great success, and is not that the real test? Because of that, should not the Government bring pressure to bear on those local authorities which do not establish them simply because they feel it is not worth spending the money on this service?
Lord WELLS-PESTELL: My Lords, I agree with my noble friend that a number of very successful day nurseries have been established by Area Health Authorities. I think I am right in saying that there are something like 86 day nurseries and six play groups. But the acid test must be whether a day nursery in a particular hospital or area is needed in order to persuade staff to join the hospital, or to dissuade hospital staff from leaving. In the circumstances, bearing in mind that most local authorities have a number of day nurseries, I do not think that there can be any other yardstick.
Lord ABERDARE: My Lords, is the noble Lord aware that there are considerable complaints in the National Health Service about the need to refer decisions upwards, and that this is a matter which should be taken at the local level? While I sympathise with what is in the noble Baroness's mind, it is important that decisions of this kind should be taken locally and not by the Department.
Baroness SUMMERSKILL: My Lords, may I ask my noble friend whether it is his experience, as it is mine, that many local authorities refrain from introducing this kind of service, although it is known by many people to be necessary? Should one leave it to, perhaps, half-a-dozen people on a small sub-committee to decide a matter of such importance?
Lord WELLS-PESTELL: My Lords, it is not within our experience or knowledge that certain areas are refusing to

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do this. The power that Area Health Authorities have in the setting up of day nurseries was made quite clear as recently as a few months ago. If my noble friend has any information relating to an area, we shall be glad to have it.
Lord WALLACE of COSLANY: My Lords, is my noble friend aware that the main purpose of day nurseries in hospitals is to persuade nurses who have married and had a family to come back into the Service in areas where they are urgently needed? I am very grateful indeed, may I say, for the magnificent day nursery in the new Queen Mary's Hospital at Sidcup, which has served that very purpose and is proving a very useful adjunct in getting trained nurses to come back into the Service.
Lord WELLS-PESTELL: My Lords, if I may be permitted to say so, nurseries are designed not only to persuade women to come back to nursing but to persuade married women doctors to come back on the medical side; and, where there are difficulties in getting certain civilian staff, to persuade them to come back as well.
Viscount ST. DAVIDS: My Lords, will the noble Lord see, so far as he possibly can, that local democracy is maintained in this and all other such activities? Even if a decision may occasionally be wrong, is it not true that this is democracy and that on occasions one must accept it?
Lord WELLS-PESTELL: My Lords, I can only say that the democratic rights of the Area Health Authorities are quite supreme in this regard.

STATUTE LAW REVISION (NORTHERN IRELAND) BILL [H.L.]
The LORD CHANCELLOR:(Lord Elwyn-Jones): My Lords, I beg leave to introduce a Bill to revise the statute law of Northern Ireland by repealing obsolete, spent, unnecessary or superseded enactments. I beg to move that this Bill be now read a first time.
Moved, That the Bill be now read 1a, —(The Lord Chancellor.)
On Question, Bill read la, and to be printed.

HARE COURSING BILL [H.L.]
THE MINISTER OF STATE, HOME OFFICE (Lord Harris of Greenwich): My Lords, I beg leave to introduce a Bill to make hare coursing matches illegal. I beg to move that this Bill be now read a first time.
Moved, That the Bill be now read 1a.—(Lord Harris of Greenwich.)
On Question, Bill read la, and to be printed.

LEAVE OF ABSENCE AND LORDS' EXPENSES
THE CHAIRMAN OF COMMITTEES (The Earl of Listowel): My Lords, I beg to move the first Motion standing in my name on the Order Paper.
Moved, That a Select Committee be appointed for the general supervision of arrangements relating to leave of absence and the reimbursement of Lords' expenses and that as proposed by the Committee of Selection the Lords following, with the Chairman of Committees, be named of the Committee:—

E. St. Aldwyn

L. Amulree

B. Hylton-Foster

B. Llewelyn-Davies of Hastoe

—(The Earl of Listowel.)
On Question, Motion agreed to.

DEPUTY CHAIRMEN OF COMMITTEES
The Earl of LISTOWEL: My Lords, I beg to move the second Motion standing in my name on the Order Paper.
Moved, That, as proposed by the Committee of Selection, the following Lords be appointed the panel of Lords to act as Deputy Chairmen of Committees for this Session:

E. Cathcart

E. Cork and Orrery

E. Shannon

V. Goschen

V. Hood

L. Airedale

L. Alport

L Amherst of Hackney

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L. Champion

L. Derwent

L. Douglas of Barloch

L. Henley

L. Maybray-King

L. Nugent of Guildford

L. St. Helens

L. Segal

L. Strang

B. Wootton of Abinger

—(The Earl of Listowel.)
On Question, Motion agreed to.

PREVENTION OF TERRORISM (TEMPORARY PROVISIONS) ACT 1974 (CONTINUANCE) (No. 2) ORDER 1975
3.17 p.m.
Lord HARRIS of GREENWICH Lord HARRIS of GREENWICH rose to move, That the draft Prevention of Terrorism (Temporary Provisions) Act 1974 (Continuance) (No. 2) Order 1975, laid before the House on 28th October, be approved. The noble Lord said: My Lords, I beg to move the Motion standing in my name on the Order Paper. The purpose of this order is to renew the operation of the Prevention of Terrorism (Temporary Provisions) Act 1974 for a period of four months beginning on 29th November. It may be for the convenience of the House if I set out the background to the laying of this order, which I foreshadowed in my speech in the Home Affairs debate on Tuesday. The House will recall the circumstances in which the Prevention of Terrorism (Temporary Provisions) Bill was passed last November. That Bill was considered in great haste both in another place and in this House in order to meet the serious situation that had arisen.
When the Act came into force last November, its operation was limited for a period of six months in the first instance. In May, my right honourable friend the Home Secretary came to the conclusion, with some reluctance, that the powers in the Act could not be allowed to lapse then. Accordingly, an order was laid to continue the operation of the Act for a further six months from May to November. Noble Lords will recall our debate on 13th May, when the first draft continuance order was approved, I think with the whole-hearted support of the entire House. When that order was debated in
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another place on 19th May, my right honourable friend gave an undertaking that unless in November he felt able to recommend the dropping of substantial parts of the Act, he would not ask the House to proceed by order; and that if we had to continue with the full or main scope of the powers of the Act, he would think it right to introduce fresh legislation. He recognised the possible need for an interim period to be covered by order if new measures were to be considered.
The present position is that the 1974 Act will lapse tomorrow unless renewed. My right honourable friend has come to the conclusion that, in present circumstances, it would be impossible to allow powers of the kind conferred in the 1974 Act to lapse. In accordance with the undertaking he gave last May, ho has therefore introduced a new Bill to replace the 1974Act. The new Bill was given a Second Reading in another place last night by a majority of 169. The object of this order is to prolong the 1974 Act for the interim period while the new Bill is being considered in another place and in this House. The order I am moving today was approved in another place last night and, if it is approved by noble Lords today, the 1974 Act will be continued until 28th March next year. I hope that the new Bill will make such speedy progress that it will become law earlier than28th March; and as soon as it becomes law this order will lapse and the new legislation will take over.
I would not think it right to go into any detail today about the contents of the new Bill. This has still to receive a great deal of consideration in another place, and noble Lords will obviously have full opportunity to debate when it reaches this House. We were all conscious last November that the urgency of our proceedings inevitably meant that it was not possible to consider the details of the Bill to any significant extent. That will not be the case for the new Bill. I hope, therefore, that noble Lords will feel that consideration of the new Bill, rather than consideration of this draft continuance order, will provide the right occasion to consider the details of temporary provisions legislation of this kind.
The issue today is not the substance of these powers but whether we should continue the current provision as an

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interim measure, pending consideration of the new Bill. I am confident that your Lordships will share my view that there can be absolutely no doubt about this. There can be no question of depriving the police or the community at this time of the measure of assistance and protection which these powers provide. The Act has given us powers to maintain a strict surveillance at ports, with greatly increased controls over those coming into and going out of this country. It has given the police powers to enable them to detain persons suspected of being involved in terrorism or of having committed offences under the Act. The exclusion powers have enabled us to remove a number of people whom we were satisfied were concerned in terrorism or who were coming to this country for that purpose.
No one pretends that the exercise of these powers is easy, or indeed that they represent a simple solution to the problem of terrorism. Nor does anyone pretend that the Act of itself will remove terrorism. But we believe that it is an essential element in our attempt to defeat it. This order is an essential bridge between the 1974 Act and the new Bill. I hope that noble Lords will feel able to accord it their fullest support today.
Moved, That the draft Prevention of Terrorism (Temporary Provisions) Act 1974 (Continuance) (No. 2) Order 1975, laid before the House on 28th October, be approved.—(Lord Harris of Greenwich.)
3.23 p.m.
Lord BELSTEAD: My Lords, The catalogue of crime in the months since at any rate August of this year is reason enough for the renewal of this order. I believe I am right in saying that since the Aldershot Barracks were bombed in February of 1972 there have been over 260 bombing incidents in Great Britain in which some 60 people have died. The principal Act was passed a year ago following the appalling devastation in Birmingham and today this order comes before the House after three explosions at restaurants in the heart of London, crimes which were brutally cruel in their intention and totally indiscriminate in their effect. Of course in recent weeks there have been car bomb explosions, one of which claimed the life of a family
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man, a doctor whose work was devoted to saving other people's lives. Thus, I do not have the slightest hesitation in supporting this order, which is being introduced pending the fresh legislation to which the noble Lord, Lord Harris of Greenwich, referred and which received its Second Reading in another place yesterday.
When the previous continuation order came before this House last May my noble friend Lord Balniel said he believed that the Government had struck the right balance—to proscribe the IRA, whose activities had become an affront to the public, to give the police powers of arrest and search, if necessary without warrant, and to provide for the detention of suspects for questioning. These powers, unprecedented in peace time, were thought necessary by Parliament a year ago for the public safety, and I believe that they remain necessary today. However, three of these powers—which are in the present Act and therefore are the subject of this order—need particularly close scrutiny in a free country; that is, the police power to hold a suspect for up to 48 hours followed by a further five days if the Home Secretary gives his authority, the power of search, if necessary without warrant and the exclusion order power.
I understood from the report of what the Home Secretary said yesterday that 581 people have been detained by the police for up to 48 hours or longer, with 61 of them subsequently charged and 31 made subject to exclusion orders. I would be interested to hear the equivalent figures for the ports, where I believe examining officers have even greater powers of detaining. But whatever the figures show, would it be correct to assume that the period of time during which suspects can be held is vital for intelligence against the IRA? This is an infringement of liberty. Although the police must use their extra powers with very great care, would I he right in claiming that these powers are vital if terrorists are to be apprehended and charged or excluded? As to justification of the right to search, that, I think, would appear to have been borne out by events, notably the recent discovery of some 400 lbs. of explosives in Southampton.
But on the matter of the third power, I admit to some disquiet over the power

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to send a suspect back to Northern Ireland. I do not question the overall purpose of exclusion orders. I accept that the power to exclude is an executive act, though it has been supported during the last year by what is called the "advisory procedure" which has been operated by my noble friend Lord Alport and by Mr. Ronald Waterhouse, QC.
However, it seems that there is no escaping the fact that we are simply taking some terrorists and then setting them at liberty in another part of the United Kingdom. I am, therefore, concerned that this provision appears unamended in the new Bill. Perhaps by the New Year, the Criminal Jurisdiction Act, which has already passed through Parliament and provides for extraterritorial trial of offenders who escape across the Irish Border, will at last have passed through the Dail. Nevertheless, I hope that we may be able to have another look at this when the next Bill comes to your Lordships' House. Having said that, let me acknowledge the undoubted effect which this Act is having.
I wish to recognise the work of the police, on whom counter-terrorism must be placing a very great strain in terms of manpower, the work of examining officers at the ports and bomb disposal officers. It is, of course, the design of the IRA to cause such revulsion that the British people will wish to leave Northern Ireland to its fate, but the skill and efficiency of our Security Forces is preventing this subversion. But I have two questions to ask. First, has the time not come when the Government should require all detonators to be marked and explosives to be registered and signed for? This matter has been raised before in this House and I would add only that it is now becoming less easy to understand why the law does not require the very weapons which are used for destruction to be identified.
Secondly, does the Home Office feel that it is easy enough for people to be able to get advice on how they should take prudent security measures? After all, the bombing campaign has not been concentrated solely on military targets. Each of us needs to be vigilant, and local authorities, members of trade associations, custodians of buildings, transport undertakers and sports associations, to select a
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few examples, may all need to obtain the best security advice available. Is advice being asked for and, if so, is it available?
I agree with the noble Lord, Lord Harris, that there are some detailed points which it will be better to raise when the amending legislation arrives, but there is one new and rather grim feature of the Bill. If Parliament agrees, its main provisions will be in force not for six but for twelve months. I believe that this may serve as a reminder of how necessary these provisions are. Clearly, they have done much to reduce the worst excesses of terrorism and I believe that, if we remain firm, those who live by violence will in the end forfeit even the most clandestine support and it will be that which will bring peace once again to the Irish scene.
3.31 p.m.
Lord WIGODER: My Lords, may I welcome the course which the Government have taken in introducing this order and a new Bill? It has two advantages. It will enable your Lordships to discuss at length on another occasion the principles of the Bill—exclusion, detention, proscription and so on—and, at the same time, it indicates the Government's determination that this should be regarded as emergency legislation and not as a permanent feature on the Statute Book. In the circumstances, I shall make my general observations on the other occasion, but I should like now to raise two matters of some urgency which can be dealt with before the new Bill arrives from another place.
First, I should like to ask the noble Lord, Lord Harris—and I have given notice of these matters—whether the Home Office is clear in its own mind that exclusion orders under Part II of the present Act are administrative and not judicial orders, because I suggest that they should be administrative orders. I raise the matter primarily because, in the recent Guildford bombing case, a number of people who were arrested and eventually convicted made long, detailed, written statements in which they incriminated a number of other named people as prominent IRA terrorists who were living in London and who had taken a part in those activities. The police arrested those other people, but because there was in law no admissible evidence against

399
those other people—only matters contained in statements by people who were themselves being charged with offences —the prosecution felt obliged to offer no evidence against them and they had to be discharged. My information is that those other people, against whom there was abundant information, are still here and moving about London, because the Home Office took the view that it would not be right to make exclusion orders against them on an administrative ground, because the magistrates had decided that there was no admissible legal evidence against them. I should like to ask whether that is correct and, if so, whether the Home Office could take a more realistic—not legalistic—view of its powers to make exclusion orders.
The second matter is of a similar kind. I believe that the noble Lord, Lord Harris, is aware of the fact that a person was recently arrested as one of a group of people alleged to be concerned in the manufacture of bombs for the IRA, and was committed for trial by the magistrates because there was found to be a prima facie case. Not unnaturally, bail was refused by the magistrates, but the matter came up before a senior criminal judge and, despite the rigorous objection of the police, that person was released on bail and is. I understand, moving freely around London.
I raise these points as matters of urgency because, if my information is correct, it appears that, despite the Act, as the law is being administered there are people whose identities and addresses are known and who are known to be prominent IRA terrorists, but against whom no action is being taken. I recognise that it is not for the Home Office to give directions through the Judiciary as to the granting of bail in any particular case, but I hope that the noble Lord, Lord Harris, will express the opinion that it would be highly undesirable, and, indeed, should be regarded as unthinkable, for a person against whom there is found to be a prima facie case of involvement in such activities to be released on bail.
Lord BROCKWAY: My Lords, I shall be very brief. I believe all of us will wish the Home Secretary to have the power to act in cases of terrorism both to discover conspiracies before they occur
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and to find those who are guilty when they do occur. In considering a proposal of this kind, it is extraordinarily difficult to find the right balance between the correct action for these extreme cases and the normal law of civil liberties. As the spokesman from the Opposition Front Bench said, these proposals include actions which will limit civil liberties. I want to say at once that, in a not unrelated case, I came to have such a high appreciation of the humanity and wisdom of the Home Secretary that I have no doubt that in such cases he will act with those qualities. Nevertheless, in the legislation which has been in operation and in the legislation which is to be introduced, there are fundamental restrictions of our civil liberties. I am thinking particularly of the case mentioned from the Opposition Front Bench of detention for a period for interrogation and I hope that, when the amending Bill is introduced, every possible step will be taken to ensure that civil liberties as we understand them shall, within the limits of this exceptional situation, still be observed.
3.38 p.m.
Lord HARRIS of GREENWICH: My Lords, I am very grateful for what the noble Lords, Lord Belstead and Lord Wigoder, and my noble friend Lord Brockway have said on this order. I should like to deal first of all with some of the detailed points about the order. The noble Lord, Lord Belstead, recognised that some of the questions which he raised really apply to the new Bill and, when that is brought forward, those issues can be discussed. On the detailed points which he raised concerning the marking of detonators and information to the public, I believe that on the first matter he is misinformed. There is a marking system for detonators. It is difficult in public to go into this in detail but we are at the moment satisfied with the system. However, it is clearly right that all these matters should constantly be looked at and that is done by the explosives inspectorate and others concerned.
The question of information to the public is a difficult issue. The matter was brought up in Tuesday's debate by a noble Lord opposite who pointed out that recent targets had been restaurants. Before that, they were public houses, and other targets may be attacked by the IRA.

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It is therefore difficult to give general advice which has an overall application to every conceivable type of target. Nevertheless, we clearly have an obligation to do everything we can to assist members of the public who are concerned with this problem. As a result of that, a number of police forces have already given detailed information to large employers of labour, shopkeepers, and so on, and, as I indicated in the debate on Tuesday, there are crime prevention officers in all the major police stations able and willing to give advice to members of the public. Recently the Home Office has given advice to local police forces which can form the basis of more general advice to members of the public and that is now in the hands of every police force in the country.
I turn now to the questions raised by the noble Lord, Lord Wigoder. I was very relieved to hear the last point he made. I do not think it would be right for me to comment on a decision by a judge regarding a bail application. I am sure that the judge concerned will read what the noble Lord has said. On the other point the noble Lord is quite right; the decision regarding an exclusion order is a decision of the Executive. It is not a judicial decision. That is why we have done our best to avoid the use of the phrase, "an appeal procedure"; because although it is right that the noble Lord, Lord Alport, and Mr. Waterhouse advise the Home Secretary in matters of this kind when representations are made by a person who has been subject to an exclusion order, nevertheless it is obvious that it is for the Home Secretary to be satisfied, and in the final analysis it is his decision. Therefore, there was no misunderstanding on our part about the intention of the Bill and what the general effect is.
On this occasion, at the end of this brief debate, it is only fair to say how grateful we all are—my right honourable friend said this yesterday in another place —to the noble Lord, Lord Alport, and Mr. Waterhouse for the very considerable amount of work they are doing at the moment on behalf of the public of this country in dealing with these representations made regarding exclusion orders. This is an extremely time-consuming responsibility for them. They do it at considerable inconvenience and, as my
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right honourable friend said, with a very high sense of public duty. We are all extremely grateful to them.
On Question, Motion agreed to.

EUROPEAN COMMUNITIES (DEFINITION OF TREATIES) (No. 2) ORDER 1975
3.42 p.m.
Baroness LLEWELYN-DAVIES of HASTOE Baroness LLEWELYN-DAVIES of HASTOE rose to move, That the draft European Communities (Definition of Treaties) (No. 2) Order 1975, laid before the House on 13th October, be approved. The noble Baroness said: My Lords, I beg to move the Motion standing in my name on the Order Paper. I think that it may be for the convenience of the House if I give a brief explanation of the order. It is introduced under the terms of Section 1 of the European Communities Act 1972, and its object is to specify as "Community Treaties" within the terms of the Act, the various treaties and agreements set out in the Schedule to the order. Definition gives effect to these treaties and agreements in United Kingdom law so that, where applicable, the rights and obligations which they create may be enforced in British courts. If this were not done, these agreements would be effective only at the international level. Noble Lords will realise that all the treaties in the Schedule to the present order are concerned with development matters, and it is in two parts. The items in Part I are already in force and the order takes effect with regard to them from the date the order is made. The items in Part II will come into effect following ratification as necessary by Member-States of the Community and the African, Caribbean and Pacific States. The order takes effect with regard to them on the date of entry into force of the Lomé Convention.
If I seem to be unduly technical it is because, as noble Lords concerned with these matters know, this is a highly technical and complex field. Items 1 and 2 are for the extension for a further year of the two component parts of the International Wheat Agreement, of which the Community is a Member. Both the Wheat Trade Convention and the Food Aid Convention came into effect on 1st July 1971 for a period of three years, and were extended by Protocol for one year. The

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objectives of the Wheat Trade Convention are to further international co-operation on wheat problems, to expand international trade, to contribute to the stability of the international wheat market, and to provide a framework for negotiations on price and the rights and obligations of members. The object of the Food Aid Convention is the provision of food aid in the form of cereals for the benefit of development countries. All members are obliged to supply specified amounts of cereals, or their equivalent cash value, annually.
At present a Preparatory Group established by the International Wheat Council is examining the elements on which a new Agreement might be based. But I must tell the House that the issues involved are complex and will take time to resolve. In the meantime it is highly desirable that international co-operation in wheat matters and food aid should be continued. I should also perhaps explain that these two Protocols are included for technical reasons. The basic Conventions were designated Community Treaties and it is desirable that the extending Protocol should be also. The remaining items on the Schedule are connected in one way or another with the Lomé Convention and Item 4 is the Convention itself. At this point may I suggest that it would be for the convenience of the House to reserve discussion on the Lomé Convention itself until we debate the Motion to be put forward by the noble Earl, Lord Selkirk, since we have two Reports from our Select Committee to discuss, and we can deal now, more briefly, with these extraneous matters.
I shall now continue my explanation of the order. Items 3 and 5 provide for duty and tariff-free access for ACP exports of products within the field of operation of the European Coal and Steel Community. Separate arrangements for these products are necessary because the ECSC is juridically separate from the EEC. I warned your Lordships that this was technical! Items 6 and 7 are agreements between the Member-States on the way in which the Community's obligations under the terms of the Lomé Convention are to be implemented, including the financing and administration of Community Aid.
I ought perhaps to add, as the House will know, that the Lomé Convention, which is at the centre of this complex of agreements, is the successor to the two Yaounde Conventions of 1963 and 1968. Under the terms of Protocol 22 to the Treaty of Accession which took us into the Community, 22 independent Commonwealth countries were given the option of joining with the existing Associates in negotiations for a new Convention to replace Yaounde II. I think we can take pride in the fact that all these countries accepted the invitation. Negotiations opened in October 1973 and 16 months later on 28th February this year the new Convention was signed at Lomé. Before the Convention can enter into force, it must be ratified by the Parliament of the nine Member-States and by two-thirds of the ACP States. With that explanation I ask the House to indicate its approval this afternoon of this order. My Lords, I beg to move.
Moved, That the draft European Communities (Definition of Treaties) (No. 2) Order 1975, laid before the House on 13th October, be approved.—(Baroness Llewelyn-Davies of Hastoe.)
3.49 p.m.
Earl COWLEY: My Lords, the whole House will be grateful to the noble Baroness, Lady Llewelyn-Davies of Hastoe, for explaining in such detail the very serious technicalities of this order. I should like to raise a few points in relation to Item 2 under Part I of the Schedule; that is, the:
" Protocol for the further extension of the Food Aid Convention 1971, to which the United Kingdom acceded on 18th Jun "
this year. We on this side of the House are in favour of such food aid—especially as a short-term measure to help the various countries in the world which cannot produce enough food for themselves —provided that at the same time, as a long-term aim, financial aid and technical assistance are also given to the same countries to improve their agricultural production.
As the noble Baroness well knows, food aid can have certain drawbacks since it can not only depress the food production but lower food prices within the recipient country. But if these drawbacks are continually borne in mind and agricultural

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production is encouraged, then food aid is a necessary and a valuable form of assistance to the developing countries. At the present time, I understand Britain gives some £35 million worth of food aid, three-quarters of which is distributed through the existing European Community food aid programmes. It is important to note, however, that the majority of food aid from the Community is distributed to the non-associated developing countries, and yet this action is not complemented by the granting of financial aid for their long-term development from the Community as an institution, although of course individual Member-States have their own bilateral aid programmes. Thus, in many ways one is providing the aspirin without providing the long-term cure. Perhaps the noble Baroness could tell the House what negotiations the Government are having with our European partners to improve this state of affairs.
The final Resolution of the World Food Conference last year recommended that:
"…all donor countries make all efforts to provide commodities and/or financial assistance that will ensure in physical terms at least 10 million tons of grain as food aid per year starting in 1975, and also provide adequate quantities of other food commodities ".
Could the noble Baroness say whether this country's accession to the Food Aid Convention is an implied acceptance of this request from the World Food Conference'? Also, if one looks at the Protocol for the further extension of the Food Aid Convention and refers to Article 3, one sees that there is no mention of the United Kingdom. Could the noble Baroness tell the House what contribution the United Kingdom is to make under the Food Aid Convention? Or is it just to be a redistribution of the country's existing food aid programme; and, if so, what will be the effect upon our contribution to the world food programme? The Government have described this in their aid White Paper as being:
" …more successful than any other organisation in the difficult task of using food as an instrument of economic and social development ".
3.53 p.m.
Baroness LLEWELYN-DAVIES of HASTOE: My Lords, I am most grateful to the noble Earl. The whole House knows and appreciates his deep knowledge of these subjects. Indeed, some-
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times he positively frightens me with the depth of his knowledge. As the noble Earl said, the purpose of the Protocol is to extend further the Food Aid Convention of 1971, and we must remember that this, together with the Wheat Trade Convention, forms the International Wheat Agreement of that year, 1971. Owing to the vagaries of the world grain markets and other factors, it is difficult to calculate the exact cost to this country of the extension, but we think that in the financial year 1975–76 it could be about £20 million. Although the United Kingdom withdrew, as the noble Earl will know, from the second and current 1971 Convention, as soon as we acceded to the EEC we became a party to all the various trade agreements of the EEC then in force, which included the International Wheat Agreement of which the Food Aid Convention is a part.
The noble Earl knows, I think, that we share his misgivings about food aid as such, especially vis-à-vis other forms of aid which can have a much more ongoing component in them. But we recognise that, in the present state of the world food shortage, food aid is essential now. So in the short-term we must continue to participate in EEC food aid programmes, and we have supported Commission proposals to increase these programmes. In all our EEC discussions, it is our policy to press for aid to the poorest countries —this is basic to our whole approach to aid, whether it be food or any other form of aid—and, of course, particularly to those who have been hit severely by the rise in oil prices. I hope the House will agree that, in these circumstances, the Government are right to extend the Food Aid Convention for a further year, until 30th June 1976. I may comfort the noble Earl by saying that we are expecting progress in the multilateral trade negotiations in the framework of GATT and the International Wheat Council, and when the outcome of these talks is known consideration will be given to the possible renegotiation of the Food Aid Convention. I think he will probably welcome that.
The noble Earl was kind enough to give me notice of some of his questions and, if I may, I will deal with the British contribution under Article 3 of the Protocol. He is quite right; the British contribution does not appear. The EEC's minimum contribution is 1,287,000

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tonnes. Out of this, the United Kingdom's contribution is 98,400 tonnes. The noble Earl may be disappointed to know that this is not additional to our general food aid programme, but is part of it. The noble Earl also talked about the relationship of the Food Aid Convention to the world food programme and EEC food aid. My Lords, we offer food aid to the developing countries in two ways: first, obviously by taking our full part in the programme of the EEC; and, secondly, by making substantial and wholly bilateral pledges to the world food programme—and I can reassure the noble Earl on this point.
After the World Food Conference, the Commission proposed that EEC food aid should be increased by about 25 per cent., as he knows. The Government have given their full support to these proposals, and have pressed for their adoption in the Council of Development Ministers. As the whole House knows, we are particularly disappointed that this proposal has not met with unanimous EEC approval. We have, however, increased our bilateral pledge to the world food programme for the current biennium by nearly 300 per cent.—from about £3 million to nearly £9 million—so I think the noble Earl can rest assured that we are doing all we can. I might even point out that last year 70 per cent. was for the benefit of the Indian sub-continent, which I know is a problem which worries many noble Lords; and we are currently the eighth largest contributor to the world food programme. Without going into any further technical details, I very much hope that what I have said answers the points made by the noble Earl.
Lord ROBBINS: My Lords, without saying a word to derogate from the merits of the food aid programme, may I inquire of the Minister whether it is realised in Government circles that all these measures are temporary expedients, if they are not combined with aid in regard to the propagation of family planning in those parts of the world in which the increase in population bids fair to be as great a menace to human happiness as the menace of nuclear warfare?
Baroness LLEWELYN-DAVIES of HASTOE: My Lords, I think perhaps the noble Lord ought to have said,
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" Before the noble Baroness sits down ". But, in any case, I totally agree with what he has said.
On Question, Motion agreed to.

EUROPEAN COMMUNITIES COMMITTEE REPORTS
3.59 p.m.
The Earl of SELKIRK The Earl of SELKIRK rose to move, That this House takes note of the Thirty-Seventh Report of the European Communities Committee (Session 1974–75) on the Lomé Convention. The noble Earl said: My Lords, I beg to move the Motion which stands in my name, and I do so as a member of the Select Committee on European Affairs and the Sub-Committee which deals particularly with this matter. We have in fact made two Reports; one of them is, as to almost half of it, statistical, and the other we have tried to make more easily readable and explanatory. We had no doubt whatever that this was an important matter which should be discussed in this House. Before dealing with it, may I say that we are grateful to the printers for doing a very quick job. We were a little late in getting out the Report because we waited until we had been to the Commission. The printers have done a very good job, and I am most grateful to them.
My Lords, perhaps I may make one other general remark. I believe that increasingly people are beginning to realise that what is happening in Brussels will be of considerable importance to many people, and I think that people would like to understand better what is happening. I believe it would be of assistance if they could have something in the nature of a Queen's Speech, indicating what Brussels would be doing in the current year. This idea was put forward by the noble Lord, Lord Rhodes, and it would greatly help people. It would not be a Queen's Speech, but it would be some outline of the work which they proposed to tackle in the corning year.
If I may turn to the Treaty, while I am confident that the Government will ratify this, may I ask when they will do so? May I also ask that they should do so with rather more warmth and welcome than they have done up to the present time? This Treaty has already

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been welcomed by the Kingston Commonwealth Council and has been unanimously passed by the European Parliament. It is already in part, in the interim stage, in operation. Nine months have gone by and it has not been ratified. In the Government's White Paper on aid it is not even referred to, although they refer to one of the benefits that arises from the Lomé Treaty, though there is no mention of it in the Queen's Speech.
All these are small matters which, to the outside world, give the impression that the Government are not enthusiastic about the matter. As the noble Baroness well knows, two-thirds of the African, Caribbean and Pacific countries have already ratified; that is 31. Only one European country so far has ratified. It falls to Her Majesty's Government to give every possible encouragement to other countries to get on with it just as quickly as they can. This is a very important Treaty. I was proud to hear M. Cheysson say that, if it had not been for the United Kingdom, this Treaty would never have taken place at all. This is one of our great contributions, and it is of importance to us because it deals with two matters which concern the Commonwealth which I and many other noble Lords felt was vital to get settled. Indeed, we can be pleased that it is better than we could reasonably have hoped for.
I will not deal in detail with the Treaty—it would weary your Lordships if I did so. I will present a general picture. As the noble Baroness said, it is an extension of the Yaoundé Treaty, but with a considerable number of additions to it. To the 19 original States, in fact 21 Commonwealth States have been added, and six other African States, making altogether a population of 500 million people. It is not very likely there will be any additions to this because additions can be made only by election by institutions of the Lomé Treaty itself. The Treaty is governed by institutions; it is a contract between the ACP States on the one hand, and, on the other hand, the European States. It avoids any question of patronage. Here are people meeting in parity and discussing what it is they want to do. It includes the Council and Assembly. I do not know how many will be in the Assembly; it may be 92 or 184. The
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European representation will be from members of the European Parliament; this may be 46 or 92 in number.
The Treaty covers a very wide field. I call it a trade treaty with aid added. Some people may put it the other way. This is a matter of opinion. What is important is that it creates a relationship. What that relationship will be is the kernel of the value of this Treaty. It covers grants, soft loans, hard loans, risk money, regional schemes, technical and marketing assistance, assistance for stabilising export earnings and free access to the European market without reciprocation. That is very important because it means the ACP countries do not have to reciprocate with free access to their markets; but they cannot discriminate between one country and another in Europe.
Perhaps the most interesting novelty is the STABEX system which will enable countries with more or less a monoculture of sonic kind of exports to get compensation if the export earnings were to fall considerably. One must regard this as a valuable experiment, something which will be tried out. It may be developed or it may not be of great importance. So far as the United Kingdom is concerned, I should like to make three points which are of particular significance. The first point is sugar. This replaces the Commonwealth Sugar Agreement. I tried to invite the noble Lord, Lord Campbell of Eskan, to speak today, but unfortunately he has to be in Paris. He has written an extremely interesting article, and I should like to make two short quotations from it. He says:
"This creates a healthy relationship between cane and beet producers."
And further:
" The Community may be proud of the sugar protocol."
There is also provision on similar lines regarding rum and bananas.
The second point is that it creates a firm relationship between the Francophone and Anglophone countries of Africa. Anyone who knows Africa knows a separation existed. We shall now have a good and firm association. The ACP countries have been able, throughout the negotiations, to act with unity. This is remarkable considering the diversity of areas and places with

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which they have been concerned. They are now working as an African, Caribbean or Pacific group with a European group, while not entirely destroying the traditional link which may from time to time be of value.
The third point which struck me—and this goes slightly outside the subject we are discussing—was the outward-looking policies which appeared to me to be dominating the Commission. They fully recognise certain things. First, the growth of international trade from developing countries. This is wider than the Lomé countries. The figure I received showed that international trade arising from developing countries was greater than that from the European Community. It is about twice that of the United States of America and, of course, a good deal more than that of Russia. That indicated to the Commission the extreme importance of getting into this line of business.
Europe itself is not rich in natural resources, and it is extremely important to extend European trade so that the fullest possible use could be made of natural resources throughout the world. Our contribution in this is technology, finance and marketing experience. The Commission attached tremendous importance to the unrestricted movement of trade. They did not view with favour the suggestion of any restrictions in this country. No doubt the Council will in due course have some comments to make when these matters are discussed there.
So far as the Lomé, Treaty is concerned, when one has free access to the market in this country, one has to look to see whether there is any protection against serious disturbance of our trade here. That, my Lords, you will find in Article 10. Here we have clear evidence that that is adequate to meet quickly any emergency. The evidence we have says that the safeguard provisions of Lomé are so generally and widely defined as to be all-embracing in the situations which they cover, though in these cases the Lomé Council would have to be informed of any action taken.
This Treaty derogates in some degree from the GATT. We believe GATT will not object, particularly because of the absence of any reciprocal requirements on the ACP countries. It is proper to emphasise that the Commission gave me
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the impression that they attached tremendous importance to the multinational principles on which GATT was founded. There is no intention of disregarding the GATT provisions. The Lomé unit of account, I am glad to say, will be dealt with by the noble Lord, Lord Roberthall. The information I have is that it is calculated every day, and I believe it works satisfactorily. I will leave it at that.
The main criticism advanced of the Lomé Treaty is there are too few countries and not enough money. We have had a short discussion on this already with my noble friend Lord Cowley. This is an agreement between 55 countries. The countries joining are laid down in Article 109, Annex 4, Protocol 22, and are there to be seen. It has been said, in regard to the very large food aid which is given to India, that the General Preference Scheme is something of which it can take advantage, but it is also something of which it does not seem to be taking a great deal of advantage. Of course, this is not the only scheme in the world and there arc other ways in which the Indian sub-continent can be helped; but it may not be unfair to say that in some circumstances the best is the enemy of the good. Here we have a very considerable undertaking and our major task is to see that it works well.
If I may, I should just like to look back a little, because it is very important to get it started in the right way. Some 300 years ago, when Europe first began to come into contact with Africa, Asia and where you will, the first contacts were concerned with trade and they developed into some colonial relationship or other. Now, even with many good intentions and much achieved that has been of great value, there is no doubt that those earlier relationships have turned sour, and one might even use a stronger term than that. We now have the opportunity to set up a new type of relationship, and I should like to emphasise how important it is that this should be carried out with great diplomacy and skill. I make these suggestions because it is particularly important for the new organisation to start properly.
Let me take, for instance, the institutions. The Council will consist of 55 members and the quorum will be 37, so that the Council will not be valid unless

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37 people are present. They hope to have one meeting a year and hope that decisions will be unanimous. I think this is a trifle optimistic, and a very great deal of skill will be needed if it is to work properly. We have provision for good offices and, of course, for arbitration. Nevertheless, I think people with experience and ability will be needed to achieve the best results.
This is, of course, another multilateral aid organisation. I do not know exactly how many such organisations we belong to—it may be a little more or a little less than two dozen—but are they adequately co-ordinated? I am not saying that one should have a central register, because many of these organisations deal with confidential matters and most of the work is done, more or less, on a person-to-person basis. But I should like to ask: should not something more be done to ensure that all concerned know what is being done and how it might be co-ordinated? Here there is a very real conflict between skill and experience, and the need to spread appointments through nine nations. The fact is that experience of this type of work lies primarily with Great Britain and France, They are, by far, the two countries most experienced in the handling of matters such as these, and I say quite positively that we simply must get the best people. The Government should impress on the Commission that we must get absolutely the best people to work it.
I should also like to ask whether the organisation of the Commission is really orientated at present to operate a highly complicated and detailed Convention such as this. There are very great problems of administration involved. There are six languages and nine nations, and there are roughly 2,000 executive officers, plus supporting officers, and approximately 1,500 people engaged in the task of translation. This is an administrative task of the first order of magnitude and to obtain the confidence of the ACP countries in an organisation like this and to ensure they are satisfied that they are being fairly dealt with, will not be easy. They will not be inspired by the mechanism of the machine, but they will want to know a person to whom they can go and in whom they can trust. I shall never forget the acid remark made by the late Sir Walter Elliot in talking about bureaucracy,
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" Not a soul to save, nor a bottom to kick. "
I do not say this critically, but I feel that unless the ACP countries know somebody to whom they can speak with confidence they may not feel that they are being satisfactorily dealt with.
We in this country have always emphasised personal responsibility. Noble Lords and Ladies sitting on the Benches opposite have a notional responsibility for everything that happens in their Departments; and, of course, this happens also in the other place. Therefore, we should emphasise that there should be someone to carry personal responsibility. I should like to suggest that there should be a Director-General of Lomé, someone who is personally responsible for seeing that the whole thing works properly. I do not wish this to be taken as a criticism of Mr. Cheysson, for whom I have a great admiration; but he has many things to do and cannot take care of every detail. It is so important to get this started off on the right foot, and something like this would be a great achievement.
I believe that this is a considerable step forward—perhaps the greatest thing that has been done by the Community since we joined it. There may well have been tense moments during the negotiation period, but none of them would have taken place had we not been there. Therefore, I would ask the Government to ratify quickly, and to do so with the utmost encouragement to other nations and with a sense of pride in what we have been able to achieve.
4.17 p.m.
Lord ROBERTHALL: My Lords, I have been asked to call to your Lordships' attention the Twenty-eighth Report of your Select Committee, dealing with the Lomé unit of account. I ought perhaps to make it absolutely clear to your Lordships that because the two Reports deal with different aspects of the Lomé Convention it was felt that it would be convenient to discuss them together, although I imagine I shall have to move my Motion formally without further debate at the end of our discussions.
I am afraid that the Report with which I am dealing is very technical and I hope I shall not weary your Lordships with a second-rate lecture on economics.

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No doubt I shall make some mistakes and, if so, I hope that the noble Baroness who is to wind up for the Government will put me right. I feel the best way to introduce this Report is to say something in general about the new international units of account, and then try to put the Lomé unit in its place there. A unit of account is a unit in which one keeps books, and we are most familiar with that in the form of keeping our accounts in money. The international unit of account was, for a very long time, either gold or some currency which was fixed in terms of gold, so that in effect all the international books were kept in terms of gold.
That was a nice, convenient system. But after the last war the Bretton Woods Agreement was constituted and all the leading Western countries agreed to fix their parities in terms of gold. That was done, and so we had this nice simple system which, combined with the General Agreement on Tariffs and Trade, gave us a very large expansion in European trade. Unfortunately, at least in this context, at the same time we all embarked on full employment policies and they led, by one source or another, to inflation; and because we all had different successes or failures in dealing with inflation our prices, and therefore our rates of exchange, got out of step. There was too much strain on the system. We struggled along and had an occasional devaluation; but finally the United States gave it up, and since then there has been no common unit of account. All the currencies fluctuate against one another.
It was that which led to the need to have book-keeping units for certain contingencies that might arise. Broadly speaking, the contingencies arise when a number of countries are engaged in a common operation and therefore have to keep books in some common form. That is what a unit of account is. The most famous one, of course, is the Special Drawing Rights of the International Monetary Fund. That began as a kind of money rather than with the particular purpose of a unit of account. But after the departure from gold people began to ask: "What is a Special Drawing Right worth?". It was that which led to the concept of a basket of currencies. It was said: "All right! If the IMF goes
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bust the member countries must all subscribe in accordance with their shareholding, so to speak. They will all have to put in bits of their own currency." That is what a Special Drawing Right is worth, and that is the famous basket of currencies, but it is also used as a unit of account mainly between central banks. If one wants to know the value of one's own currency in Special Drawing Rights, it is calculated from day to day and, as some of your Lordships will know, it is quoted in the Financial Times every day.
The unit that most concerns us is, I suppose, the EEC unit because the Community of which we are a Member has to carry out a very large number of financial transactions in which all the Members are engaged. They had to face this before we went off gold, and so they reached an agreement as to the proportions in which different countries were paid. But those were all put in at the old gold parities. That is still being used and, as no doubt many of your Lordships know, it is very favourable to us at the moment because we are in at the old rate although we have depreciated a good deal. So it is not really a basket of currencies, except in the sense that it is a basket all of the same things. One reason why we thought we ought to call your Lordships' attention to this document is that it is a different kind of basket from one which is likely, in my opinion and I think in the opinion of your Committee, to take the place of the very nice for us but now rather out-of-date unit in which the whole of the Community's books are kept.
When the Lomé Convention was signed, it included, I think I am right in saying, a provision for aid from the Community countries to the ACP countries, and that aid is going to be spent by the recipients in the form of project aid in the Community countries. So the transactions will be transactions within the Community area, but a number of countries are engaged and therefore some unit is required in which to keep the books. So it was thought, I think quite properly, that it would be very desirable, as you were starting off, to do so with a more up-to-date unit. That is how the Lomé basket came to be constituted. The details of it are set out on page 2 of our Report. As I did not draft the

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Report, perhaps I may be permitted to say that in my opinion, for a very complex subject, it is drafted very well and clearly. So if your Lordships are in trouble it can be consulted. At any rate, one has there all the details of how the basket is constituted. Your Committee thought it was a very sensible way of proceeding. They welcome it and hope your Lordships will take the same view. My noble friend (if I may call him so, although he is not sitting on the Cross-Benches) or my old boss, Lord Amory, is going to speak and I think he will say a little more about the Paper.
I should like to conclude by just mentioning the two caveats at the end of our Paper. The first is to call attention to the need when one has a basket of this kind to revise it from time to time. That is rather self-evident. The second is of some importance. The Community, as I have endeavoured to explain, is using as its main unit of account this rather out-of-date unit. It is now launched on the new unit which is going to be used for transactions between the European Investment Fund and the Lomé countries, and I think it is going to be used to some extent by the European Investment Bank. There is at least some danger that other units will be tried. The purpose of the unit is to make the transactions which would otherwise be extremely complicated at least one degree more simple. But we feel that within the Community area it would be a great mistake to multiply units of account. If you are going to have one you ought to have only one. Your Committee think that the Lomé unit would in fact be a very good basis for a general unit of account. Whether that is agreed with or not, I think we ought all to recommend to Her Majesty's Government, who have to negotiate these things, to take account of our feeling against any sort of multiplicity of units. If one unit is of great convenience, then with any more than that one tends to be back in a system without any unit at all, which I can assure your Lordships would be terribly complicated when so many countries are involved.
4.27 p.m.
Baroness ELLES: My Lords, the noble Lord, Lord Roberthall, will understand if I do not follow him completely. In any case, I think that noble Lords in all parts of the House will be grateful to him for
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his clear explanation of the Lomé unit of account, coupled with a crystal clear definition in the Twenty-eighth Report. We on these Benches congratulate the drafter of that Report, because at the end of it even I felt I understood it. I was not quite sure I could claim to have done so, but it was so clear that I thought I had understood it. It was a remarkable piece of work for what could be a very complex concept. Perhaps I might say at this stage that I hope that the noble Baroness, Lady Llewelyn-Davies, and other noble Lords will forgive me if I leave before the end of the debate as I have to catch a plane and will probably not be able to hear all the speeches tonight. But I have put a Question to the noble Baroness and I will, of course, read her answer with great care tomorrow in Hansard.
I would congratulate my noble friend Lord Selkirk, Chairman of the Select Committee responsible for the Thirty-seventh Report, particularly for the decision taken by his Sub-Committee to enable this House to discuss this very important Lomé Convention, and also for his introduction of this matter this afternoon. The Report itself contains some valuable comments on the Convention as well as clear explanatory evidence on the objectives, preparation and possible developments arising out of the Convention. May I say at this stage—and I hope that noble Lords opposite will not feel that it is a Party point that I am making—that high praise is due to my noble friend Lord Reay, who showed by his evidence the important role he has played personally as Vice-Chairman of the Committee of Development and Cooperation of the European Parliament, in co-operation with colleagues, the Commission and representatives from the ACP countries, in completing the task of finding acceptable policies resulting in the Convention. It is regrettable that he is not here today to give us the benefit of his wide and deep knowledge on this subject, but he is no doubt in Luxembourg this week taking part in the meeting between the EEC and ACP representatives who are discussing the setting up of institutions, and in particular the setting up of a Consultative Assembly to ensure the effective operation of the Convention. I know that all noble Lords in this House wish that meeting well and every success.

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The Lomé Convention—a remarkable document—indicates a new direction in relations between one part of the world and another: North-South developed and developing, between rich and poor nations, whichever euphemism one cares to use. Whatever the criticisms may be of Lomé it is worth pointing out some of its remarkable achievements. First, it is a break away from the near colonialist approach of which we are so often accused in international fora. A multilateral agreement with concrete results uniting 55 countries and about 525 million people is in itself a remarkable event. Further, the nine Member-States of the European Community and the 46 ACP countries are joined in equal partnership. My noble friend Lord Selkirk has already referred to this. It is a quite remarkable achievement in the world of today when there is so much dissension between the different parts of the world.
It should be emphasised that the two effects of United Kingdom entry into the European Community have contributed to the success of the drafting of this Convention. First, it builds a bridge between the Anglophone and Francophone States in Africa, contained hitherto in two distinct blocs either under the Yaoundé Convention or the Arusha Convention for the East African countries. It brings in as well, outside the previous arrangements, countries such as the Sudan with whom we have had long-standing arrangements and trading agreements. These were not included among the countries listed in Protocol 22 of the Treaty of Accession.
Secondly, in relation to this Convention the entry of the United Kingdom has confirmed what was repeatedly said by those who were in favour of joining the European Community, that by our membership we would be able to assist our former dependent territories to have entry into the markets of the biggest trading bloc in the world. Even those who spoke in these terms at the time of entry into the Community did not envisage such remarkably advantageous terms for those countries and such a generous understanding of their position and difficulties by all the Member-States of the European Community.
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Then, there is the refutation of the constant criticism one used to hear, that the members of the European Commission in Brussels were faceless bureaucrats. It is clear, even from the evidence contained in the Thirty-Seventh Report which is before your Lordships' House, that M. Claude Cheysson, the Commissioner responsible, has personally contributed enormously to the imaginative proposals that are contained in the Convention. I think a tribute should be paid to him by this House. There is also proof that the European Community is determined to consider and take active steps to play a full part in the more favourable distribution of assets throughout the world. Finally, in relation to the innovations and benefits of this Convention there is the introduction of a scheme to create a bloc that is not based on a custom, union, or a free trade area, or association agreements with reciprocal rights. This is a completely new departure in any North-South development and is to be highly praised.
Of course, there are criticisms, some of which have been raised already and no doubt will be raised by other speakers: why is not more aid given to Asian countries—India, Ceylon and so on—particularly in view of the provisions made jointly with the Treaty of Succession in the Joint Declaration of Intent? It must be said that apart from the fact that those countries may not want to be bound by this type of convention, food aid is given to them. Bilateral aid is already given by individual Member-States to some of these other countries. I am not saying that further aid should not be given or that further trading benefits should not eventually be accorded to these countries, but one of the great qualities of the Lomé Convention is that it is modest, that it is small and that it does not try to do too much to begin with. It gives a structure and the possibility of future development. Although I accept that this criticism can be made, we should accept that to start small and to develop is probably safer than to try to bring in too many countries at one and the same time. The present Convention is open to applications for accession by any State with a similar economic structure to those of the ACP countries who arc already members.
The Lomé Convention is not only a modest beginning but is of short duration

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—until March 1980. This is sensible because if there are teething troubles they can be considered and rectifying measures taken within a fairly short space of time. However, it should be pointed out that within the next 18 months or so the Government will already have to be thinking in terms of Lomé No. 2. Therefore, it is surely time that we should be getting on with Lomé No. 1.Secondly, this is a modest attempt to contribute to the thinking of a new international economic order which may serve as a guide to much wider discussions at UNCTAD IV next year. Thirdly, opening up without discrimination the markets of the European Community Member-States to all industrial goods and sonic agricultural products in times of severe recession in Europe without reverse preference, must show the intention of the European Community to accept its responsibilities towards a wider world.
At this point may I put a question to the noble Baroness with regard to Article 7(2)(B) of the Convention where reference is made to "developing countries"? This affects the "most favoured nation treatment" as between Member-States and ACP countries, but does not take into account developing countries. I should like to ask the noble Baroness what definition the Government apply to the term "developing countries". Is it the one designated by the OECD or by the United Nations? Perhaps the noble Baroness will enlarge upon this when she winds up the debate.
With regard to Stabex, another very ingenious innovation to stabilise the export earnings of the 46 ACP countries, it does not have a very large fund to begin with, but in context it can be seen how it will work in the future. Already, in the Seventh Special Session of the United Nations, Dr. Kissinger has used it as a means whereby stabilisation can be achieved between developed and developing nations. Certainly one of the worst setbacks for developing countries has been the effect of inflation on their import programmes. I recall only too well that when the price of oil went up certain Iranian friends said, "Surely it is right that we should have increased the price of oil twice since you have increased the price of sugar and prac-
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tically every other commodity five times. We have to find the money to pay for the imports that we need in order to develop our countries ". There is a certain amount of logic in that. In this connection the Twenty-eighth Report of the Select Committee contributes to the clarification of the calculation of the Lomé unit of account. This is another innovation which will be a first positive step in contributing towards much-needed stabilisation in the international monetary field.
The noble Lord, Lord Roberthall, has already enlarged considerably upon this matter but I should like very much to endorse what lie said, that perhaps it is the beginning of monetary union within the Community. It will be an example which will serve as a basis of calculation for the unit of account as a whole in the European Community instead of having several types, or more than one type, of unit of account calculated on a different basis.
As has been said so clearly and categorically by my noble friend, to regularise the position the Convention must be ratified by all the Member-States and by two-thirds of the ACP States. If 31 ACP States have been able to do so, surely it is time for the Governments of the Member-States of the European Cornmunities to show their good faith, after so many expressions of co-operation and conciliation, by ratifying this Convention. In particular, considering it is for the benefit of United Kingdom former dependent territories that so much of the Convention will play its part, it is for them to give the lead and to follow Denmark, the only other country which has ratified, and to bring this Convention into force as soon as possible.
Perhaps it should be said, finally, that the most remarkable fact of all in the setting up of the Convention has been the achievement by the nine Member States of a common and united effort outside narrow national interests to ensure a fairer distribution of our European wealth, to the benefit of those who are not so well off as ourselves. If ever there was a beginning of a foreign policy in Europe, perhaps the Lomé Convention is the best example for which we could ask.
4.40 p.m.
Lord BANKS: My Lords, I should like to join in thanking the noble Earl, Lord Selkirk, and the noble Lord, Lord Roberthall, for the helpful way in which they have introduced this subject to us this afternoon. I found the Twenty-eighth Report, as the noble Baroness, Lady Elles said, a very concise explanation of the Lomé, Unit of Account and the Thirty-seventh Report contained a valuable assessment of the Lomé Convention itself. The evidence to the Committee contained in the Report was of particular interest. I will not claim to have digested it all, since I was able to obtain a copy of it only the day before yesterday, but I think it repays reading and studying.
I am one of those who regarded the signing of the Lomé, Convention last February as a great and historic event, and this was certainly the view of my noble friends. Yet the LoméConvention has not been free from criticism, and I suppose the biggest criticism against it—and in a sense this was touched on by the noble Baroness, Lady Elles—is the question of its very existence. Should there be (it is asked) such a Convention between the EEC and only a part of the developing world—a part which covers only 14 per cent. of the population of the developing world, even though that 14 per cent. represents some 510 million people? Should not any arrangement of this kind be all-embracing? Perhaps in a perfect world this would be so. Perhaps in a world where there were no historical associations this would be so. But we do not live in such a world, and I welcome what has been achieved between the Community of Nine European nations, most of which have been at the centre of great empires, and 46 developing countries. I welcome particularly the co-operation which has been brought about between English-speaking Africans and French-speaking Africans and I welcome the fact that 22 Commonwealth countries are involved.
We must bear in mind, as the Report makes clear, and as previous speakers have made clear, that assistance under the Lomé Convention is not the total sum of EEC assistance to the Third World. India, Pakistan, Bangladesh and Sri Lanka are covered by other, though less generous treaties, and as has already been
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pointed out the Indian sub-continent benefits from food aid. As I understand it, the British Government are anxious to secure more favourable terms for Asian countries, and we would certainly support them in that. Then, of course, there are the generalised preferences, of which some 90 countries can take advantage.
In the course of the evidence to the Select Committee, it was stated that 40 per cent. of EEC aid goes to non-associated countries, and for that purpose I am counting the Lomé countries as associated countries, although I believe that that is not technically correct. So we have this special and remarkable arrangement with 46 countries covering 14 per cent. of the total population of the Third World, but we are not neglecting the remainder of the Third World.
The Lomé Convention is remarkable, first because it provides free access for all industrial and more agricultural products to the EEC and yet no reverse preferences are required. That is a development which we greatly welcome and one which, prior to the signing of the Convention we, on these Benches, had been advocating. Incidentally, it is a development which makes it more acceptable to GATT, as I believe the noble Earl, Lord Selkirk, pointed out.
Then there is the provision for aid and industrial co-operation. I am never quite sure, when it comes to aid and some new provision is put forward, whether this is really new aid or whether it is merely aid channelled in a different way. I think to some extent that is in fact the case here, that it is aid channelled in a different way. However, as has been pointed out, part of it is linked to the STABEX scheme for guaranteeing national export earnings against fluctuation. I think this is a desirable aim to pursue, to provide protection against fluctuation. It has been questioned, but I think it is necessary and I am glad that it has been incorporated in the framework of the Convention.
This system of guaranteeing earnings rather than guaranteeing a price or by means of restricting production, or by means of buffer stops, is, I think, an ingenious development. It is rather like comparing the deficiency payments system that we used to have for agriculture, with the system of levies which we now

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have; and perhaps since the Common Agricultural Policy is being reviewed this particular STABEX idea might well be considered for wider application in connection with that. As the noble Baroness, Lady Elles, said, the amount of money available for STABEX is small. Nevertheless, it is an important experiment and one which may be extended on a wider front.
I should like to make a brief comment on the Lomé unit of account, and I would quote from the Twenty-eighth Report that it is a,
"device for expressing monetary values other than in national currencies ".
As has been explained, this unit of account is a basket of the currencies of EEC countries and the share which each country has in that basket was determined at the outset by the size of its gross national product; by its relative share in world trade, and by its relative share in intra-Community trade. As the noble Lord, Lord Roberthall, has pointed out to us, the Committee envisage this principle being adopted on a wider scale for other units of account. The Committee entered two caveats, the first of which rather puzzled me. It says that the weighting of the currencies, to which I have just referred, should be reviewed from time to time, and points out that the United Kingdom's share in this basket has fallen from 17.5 per cent. to 15.5 per cent. since the unit was adopted. The reason for that, of course, is the depreciation of the pound. It says that it will be in the interests of Britain to try to restore the position by encouraging periodic reviews, but it seems that it has already criticised other units of account because they are not sensitive to currency changes. It seems to me that it is a little difficult to have it both ways. In any event, surely the value of the changes and the value of the country are an indication of what has been happening to the relevant criteria.
For example, if our GNP had been increasing more than that of our partners, if our relative share of world trade had been increasing faster than that of our partners, if our share of inter-Community trade had been increasing, it is unlikely that the pound would have depreciated. The second caveat which it entered and to which the noble Lord, Lord Roberthall, referred—namely,
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that there should not be a whole series of different baskets on the same principle, but all calculated at different times according to slightly different criteria—is one which seems to me extremely sensible.
Like the noble Baroness, Lady Elles, I would raise a note of concern about the delay in the ratification of the Convention. As has been pointed out, only one of the Community States has so far ratified although more than two-thirds of the ACP States have done so. As I understand it, the position is that the trade part of the Convention has been in force this year, but the institutions are not. If the institutions are not working, this is bound to lead to a feeling on the part of the participating ACP countries that they are not participating fully. However competent officials in Brussels may be, it is not the same as having complete participation. I hope it will not be very long before these institutions are operating fully; perhaps the noble Baroness who is to reply will be able to tell us when they will be. May I say that the Lomé Agreement in its entirety is, in many ways, an experiment, but it is a very valuable experiment of great significance.
4.52 p.m.
Viscount AMORY: My Lords, I am a little unnerved by seeing the respected Chairman of our Committee sitting on the Bench opposite, looking at me with a very thoughtful look on his face. On the other hand, I am immensely relieved that the noble Lord, Lord Robbins, has left the Chamber, because I was terrified he would raise the subject of the unit of currency called the Europa, to which he referred in his speech to your Lordships the other day, which the noble Lord said he thought was at present in the higher realms of fantasy. If he had raised it, I should have said to him that, as this is in the higher realms of fantasy, I would postpone discussion of it until my next lecture !
My Lords, may I say to the noble Lord, Lord Roberthall, who was kind enough to refer to his old boss, that in following him I am following my old master; because, as your Lordships may know, the noble Lord was my economic mentor aid adviser there. I should like to make only this point to your Lordships; that is, that now, 15 years later, it would he a complete waste of your

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Lordships' time to try to drive a wedge between us. The evolution of some units of account within the European Economic Community is a national development, and one which I think we are all agreed is essential in the long run, and should be welcomed in principle. The present position is as the noble Lord, Lord Roberthall, said; that is, that there are a number of different units of account, which leads to complication in itself, and, as those other units of account are based on gold, they really do not fit the current situation very well. Therefore, it seems desirable that, as soon as possible, one type of unit should be selected, and its use gradually made general. It is not a case of too many eggs in one basket, but I think there is a risk of too many baskets for a limited number of eggs.
My Lords, it looks as if the Lomé unit of account may suit our present and likely future situation in which currencies float better. It may be the one which may be more widely adopted and used perhaps in the case of the Budget. Aswill be appreciated from the Report of the Committee, its precise composition is at first sight not very easy to explain. If I were to attempt to expand the explanations given in the Report of the Committee, I think the only impression your Lordships would get would be of the many-sidedness of truth. But I would like to join with the noble Lord, Lord Roberthall, in that I think the Report, even although it comes out under our names, is skilfully drafted.
My Lords, there are really three main components in the units, as I understand it. The first is the initial value of the unit which, as the noble Lord, Lord Roberthall, said, really has been borrowed from the Special Deposit Receipts of the International Monetary Fund. The second component or variable is the initial share, or proportion in which the currencies of individual member countries should be represented in the unit. These are based, as the noble Lords Lord Roberthall, and Lord Banks, said, on the GNPs, on the relative shares of world trade, the relative shares of inter-Community trade, and on the weightings of the European countries in the SDRs themselves.
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The noble Lord, Lord Banks, questioned the first proviso or condition mentioned in the Committee's Report, and wondered whether it was reasonable, as our initial share goes up or down in the light of the depreciation or appreciation of sterling. The point we make there is that the initial share is affected in that way, but we said that we doubted whether the initial shares were based on criteria which were the correct ones, no doubt, four or five years ago, and whether those criteria would require revision technically in the light of experience. I do not think this is a question of trying to get the thing twice over, or the best of both worlds. The initial shares were settled as a result of bargaining in the Council, and will need adjustment from time to time in the light of changes in the relevant criteria.
In the case of sterling, because it has depreciated relatively, the United Kingdom share has gone down from 17.5 per cent. to 15.5 per cent. In the case of potentially weak currencies there is advantage in the share being as high as possible, and in the case of potentially strong currencies, probably the reverse. For as long as the United Kingdom is in net debit to the EEC and is a net contributor rather than a net receiver—I understand the time is coming in the near future when we may be in net credit in the EEC—there is a temporary advantage to the United Kingdom in the use of the existing units of account based, as has been said, on a sterling exchange rate more favourable than at present. But that advantage could hardly be expected to last indefinitely.
My Lords, the third variable is the amount of the currency unit, which is the second column in the table on page 2 of the Report. The value of this unit changes from day to day with the alteration in the relative exchange rates of the member countries concerned. This means, I think, that the Lomé unit should be far more up to date as a measurement than the earlier models. Perhaps it is relevant that the system of special deposit receipts, used by the International Monetary Fund and others, in current use in the international system seems to have proved strikingly successful and the Lomé system is substantially based on the SDR experience. So I would have thought we could wish a fair wind to

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the Lomé unit of account, and hope it may lead to the progressive proliferation of different units of account, subject to the proviso that the initial ratings will from time to time require revision by the Council in the light of changes in the national criteria which have been used.
It seems to me, therefore, that there are no grounds for your Lordships to have any anxiety about the likely trend of development here, but it is something that I think your Lordships would expect and hope that your Committee will keep in touch with and report to you again from time to time, whenever they think something is happening or is about to happen which might be of importance and interest to your Lordships.
5.1 p.m.
Lord WALSTON: My Lords, yesterday and on Tuesday I was in Luxembourg taking part in the inauguration ceremonies and committees of the Parliamentary Assembly of the Lomé Convention, and two of my colleagues on the Development Co-operation Committee, the noble Lords, Lord Saint Oswald and Lord Reay, were also there and are still there. On their behalf, I give their apologies for not being here; I know they wished to be and they would certainly have taken part in this debate today. I am sorry that they are not here, but I am sure they were right to remain in Luxembourg. I can assure your Lordships, from the conversations I had in Luxembourg with very many representatives from the ACP countries, that the welcome that this Convention is being given is not confined to your Lordships' House and is not confined to this country, but is shared by all the ACP countries. It is a very great tribute to many people, to their imagination and their hard work, that this has come about.
Mention has been made, quite rightly, of M. Claud Cheysson, the architect of this Convention, and I certainly associate myself with everything that has been said about him. I should also like to give my thanks to my right honourable friend Mrs. Judith Hart for the very great part she played, a part which has been acknowledged by very many people in Brussels and elsewhere. It is very good to know that a Minister from this Government and from this country, and in par-
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ticular, if I may say so, a Minister who has not been particularly well-known for her support of the European cause, should have made her impression; so very greatly among her European colleagues.
I wholeheartedly support the Convention itself, and I support the order which will be moved by my noble friend. I do not want to trespass on her preserves, but mention has been made of ratification. My understanding, since this order has been approved in another place, is that if it is approved by your Lordships this afternoon there are only some relatively unimportant formalities to he gone through before we in this country ratify the Convention. I am told by my colleagues from other countries in the European Parliament that no unreasonable delay is expected in any of the other countries; in fact, it is expected that virtually all of them will have ratified it by the end of this year, and the one or two who, for technical reasons, may not have been able to do so will certainly have done so by the middle of January.
I should like, if I may, on a very small point of detail, to correct something which I think the noble Earl, Lord Selkirk, said concerning the size of this organisation. At the moment it is true that there are 46 member countries from the ACP, but that is a number which will grow; it is not the final number. Already, five countries are about to apply. The highest on the list is Surinam, which I believe obtained its independence two days ago and has now, therefore, become eligible, and within a matter of days, perhaps, will become a member of the Convention. In a few months, there may well be four more.
This is not entirely without significance, because quite apart from the Ministerial Council to which the noble Earl has referred there is also the Parliamentary Assembly which consists of equal numbers from the ACP countries and from the EEC countries. Each of the ACP countries sends two members. That means that at the present time, as there are 46 of them, they will send 92 members; therefore, 92 members have to come from the European Parliament. If there are five more countries there will, therefore, be another 10 members from them and another 10 from the Parliament, making, if my arithmetic is correct, 102

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members. It is a somewhat unwieldy body meeting to give advice and to direct, to a certain extent by remote control, the actions of the Council.
A lot of thought thas gone into the best way of achieving a really worth while and effective organisation. Here I should like to pay tribute to Mr. Yace, the President of the Ivory Coast National Assembly, and Mr. Spenale, President of the European Parliament, who have worked very closely and effectively on this. The present suggestions are that while the full consultative Assembly, of roughly 200 members, should meet once a year in Luxembourg, there should also be a Committee unfortunately only half the size, and therefore still a very unwieldy body, that would also meet once a year. But coming down from that committee, there would also be a series of ad hoc committees dealing with special subjects or special areas, which I believe will be a workable proposition. It will ensure that there is a certain amount of Parliamentary interest taken in this, and, what is so very important, as the noble Earl and other speakers quite rightly pointed out, make this co-operation between the ACP countries and the EEC countries a reality. I do not think it can be stressed often enough that this is an entirely revolutionary form of aid; in fact, it is scarcely aid at all. It is a genuine co-operation between two parts of the world. It is essential that we pursue this concept and ensure that all the bodies, the officials who are doing the work, the Council of Ministers, the Parliamentary Assemblies, work together in complete equality and co-operation.
I believe that this whole concept is a very significant advance in our attack on the discrepancies of wealth throughout the world, and about which we here have so often spoken. There are many aspects of it which one could discuss; some of them have been discussed by noble Lords, and others, I have no doubt, will be. I should like to concentrate solely on the export stabilisation arrangements, because to my mind this is the most important aspect; it can be built upon and developed into something which will have a profound impact upon the pattern of world trade, and, above all, on the pattern of production in the developing countries. At the present
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time, we all know the terrifying discrepancies that there are in wealth and in poverty between the rich and the poor countries.
I should like to give a few details taken from the last available figures in 1972. Whereas at that time in the United Kingdom our average income per head was 2,600 dollars, in Upper Volta—and I am referring only to countries affected by the Lomé Convention—the income per head of the population was 70 dollars, and in Somalia and Ethiopia 80 dollars each. We are told that that gap has been increasing over the last few years, and is still increasing. So if one had more modern figures, while the 70 dollars and 80 dollars might have risen slightly, the gap—in spite of our poverty in this country, in spite of the problems with which we are confronted, in spite of the self-pity in which we indulge because of our own inability to increase our standard of living—would have widened still further.
In order to rectify that, we certainly do not want to decrease our own standard of living, our own income per head; what we want to do, and what we must do, is enable the developing countries to increase their wealth. How can that be done? It can be done if they make use of their own natural resources, whatever they may be; mainly, but not entirely, agricultural. In order to do that one must have investment, one must make use of modern technologies and, to a certain extent, machinery; not as much as some people say, but there must be investment in machinery and in the whole paraphernalia that is necessary to extract the greatest amount of wealth from the earth of these countries. Therefore, there must be investment.
In order for there to be investment there must not only be money to pay for it, but there must also be stability. There must be confidence on the part of the people who are putting up the money, on the part of the people buying the machinery, on the part of the people investing in the new techniques. Not unnaturally, that has been notably lacking in the past because of the enormous fluctuations in the earning power of these primary producing countries.
A country which depends for 70 per cent. or 80 per cent. of its foreign earnings upon one single crop, upon cotton

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or cocoa, cannot tell how much it will get two years hence; how much it will earn in foreign currency from that crop. It cannot tell, because it does not know what the climate will be; whether there will be locusts, droughts or floods, and it does not know what the world market will do. It does not know whether the price will be £250 per ton or drop to £125 per ton, and these are things which happen.
There has been virtually no stability in the past for the primary producers, and in the earnings of foreign exchange of their countries. Efforts have been made —cocoa agreements, coffee agreements, the wheat agreement to which my noble friend referred, and some of them have done some good, but none of them has been sufficiently effective even to stabilise the prices, and none of them has attempted to deal with the vagaries of nature. This stabilisation of export earnings in the Lomé Convention sets out to do precisely that.
It is modest, and it is right that it should be modest, but if it succeeds it will mean that those countries which depend for their wealth upon crops of one kind or another will in future be able to count on an assured income made up from Community sources if, for any reason, their earnings drop below the average level of the last five years. In that knowledge, they will therefore be able to borrow money to invest, to improve their techniques, to improve their total production and marketing methods, to increase their wealth, and thereby to start to narrow the gap between the rich and the poor countries.
Some of your Lordships will have listened yesterday to an admirable and fascinating speech from my noble friend Lord Chalfont on defence. Of course we have to spend money on defence; I am not for a moment denying that. But we must know, if we look at history at all, that one of the greatest causes of conflict in the world is the disparity, where-ever it exists, between the rich and the poor—rich countries, poor countries; rich communities, poor communities; rich individuals, poor individuals. Where you have those vast differences, the tensions get greater and greater and eventually there must inevitably be an explosion.
Whatever we may spend on defence, we must not skimp on our expenditure
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on reducing these inequalities of wealth. I am talking not about the moral aspects at all—they are for each individual to think about—but, purely in practical terms, about the proper expenditure of government funds. Whatever money we spend on reducing these tensions, on increasing the wealth, decreasing the poverty of the poorer people of the world, will indeed be money well spent. For that reason, if for no other, I give my wholehearted support to this Convention, and wish it well.
5.17 p.m.
Lord GARNER: My Lords, I rise to underline briefly some of the reasons why I derive such encouragement from the Lomé Convention. In my view, its successful negotiation reflects great credit on all the parties concerned; on the Community, on this country, and on the Commonwealth countries in Africa, the Caribbean, and the Pacific. When we were having our debates about the question of the British application to join the Community, I said that I should not have felt able to vote in favour if it had not been possible to meet the essential requirements of Commonwealth countries. When that negotiation was completed I wasdelighted—if perhaps a little surprised—that those requirements were so fully met.
It seems to me that the Lomé Convention provides yet another proof that the Community is prepared to be outward-looking and to meet some of our needs. It has shown itself in Lomé prepared to adapt itself to the historic requirements of Britain's position. It has not forced us into a straitjacket of logic or of doctrine, but has made the changes that suited our position. Perhaps the most significant break with the past was the abrogation of the requirement for reverse preferences, something which caused a little trouble with GATT under the previous Convention and was certainly found irritating by our American friends and some other friends. The fact that that has changed is almost entirely due to British influence.
Certainly I would support what the noble Earl, Lord Selkirk, said about the important role that Britain has played, and that the Convention would never have come about in the form that it has without full British participation. I

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believe that it will be increasingly necessary for Britain to use her experience and skills if we are to make a success of this venture. It is certainly clear to me from discussions which I have had recently with a number of officials and others in the ACP countries in the Commonwealth that they warmly welcome the participation by Britain and are very grateful for what has been achieved by British efforts.
Tribute is due to the way in which the ACP countries in the Commonwealth have behaved throughout. It is the fashion nowadays to decry the Commonwealth and perhaps to wonder where it is going. It seems to me perhaps rather extraordinary that Lomé—this international agreement with a number of other foreign countries—has shown in some ways the Commonwealth spirit at its best, because it has brought up to date the relationship which Britain has had with, in some cases, continuing Colonial territories but, in most cases, territories which have ceased to be Colonial. It was brought about by applying the time-honoured practice of Commonwealth partnership, consultation and co-operation. I wonder sometimes whether sufficient credit has been given to the Commonwealth Secretariat, which initiated a series of consultations two or three years ago to try to co-ordinate the positions of the various Commonwealth countries to which these arrangements could apply. Events have shown that they have been extremely successful in bringing about a sense of unity and getting them all to work together.
It seems that the Lomé Convention has done three very important things. First, as has been said more than once, it has brought together the English-speaking and the Francophone territories in Africa and has made it possible to restore that sense of unity which was to some extent destroyed by the boundaries set in the scramble for Africa in the last century. Second, and more important, it does away with the atmosphere of Colonial or neo-Colonial handling of our arrangements, particularly because the basis has ceased to be that of one individual country looking to its own metropolitan country and has been replaced by a group of countries looking towards another group of countries; namely, in the Community. The third reason why I believe it to have
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started such an important new pattern is that it sets the right contemporary idiom for a relationship between developing and industrialised nations; it is an understanding based on frank and fair dealing, on a sense of complete equality, with no rancour on one side and no patronage on the other.
The Third World, as we have heard, is increasing in importance in many ways; its own development is taking off and its share of world trade is becoming extremely important. It is growing, too, I believe, in self-confidence and self-respect. It is vital that the Western World should have sensible relations with this Third World, and I believe that Britain, with its contacts in the Commonwealth and its rapport with its allies in the European Community, has a major part to play in bringing about this new sort of world. Of course Lomé is not the complete answer; it is only a beginning, an experiment. There are vast areas of the world which are left out of the Convention, but I believe profoundly that it has set us on the right road. I am strongly of the view that we should demonstrate our faith in it. and I hope that we shall ratify in the very near future.
5.24 p.m.
Lord REIGATE: My Lords, it is with some diffidence that I take part in this debate as I am a comparative newcomer to the Sub-committee over the rather arcane discussions of which my noble friend Lord Selkirk so ably presides. But one of my reasons for speaking is that I went with him and other members of the Sub-committee to Brussels to interview certain officials of the Community. I hope it does not sound patronising if I say how immensely impressed we all were with the calibre of the officials whom we met there. When I thought about saying that, I hesitated because I was anxious not to sound patronising, but I do not think I have ever met a group of people in a new or newish project who were so skilled at deploying their arguments. Their idealism and enthusiasm for what they were trying to do with the Lomé Convention was absolutely infectious; there was not one who was not perhaps even starry-eyed about what this might bring, and there is nothing wrong with being starry-eyed sometimes.
I do not ask the noble Baroness who will reply to the debate to comment on

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any of my criticisms; there are criticisms which I was going to make but some of which I have eliminated having listened with great interest to the remarks of the noble Lord, Lord Walston. I was going to say, after my visit there, that I found the membership of the ACP Group as needing some explanation to the outside world; that its membership was slightly anomalous and even capricious. After all, it is the amalgamation of the former Francophone and Anglophone countries in Africa to which one then adds six independent countries, two of which have never been colonies or dependent territories anyway, and then, because one adds the British Commonwealth territories, one takes a leap across the oceans to the Caribbean and, last but not least, to three very small territories in the South Pacific. At the same time, one leaves out the Indian sub-continent and it is a little hard to explain to outside interested persons why these anomalies should exist. However, the noble Lord, Lord Walston —and they were glad tidings for me—said that there are five candidates for membership coming along, and that means that what I feared and what I had intended to say will not be true; that is, that the ACP is in danger of becoming a rather restricted club. And even inside the membership there are some strange anomalies. If one takes the Caribbean as one small instance, the Bahamas—which is hardly, by most people's standard, a poverty-stricken member of the Third World—is included, but Haiti, which I think is the poorest country I have had the opportunity of visiting, is excluded. I know there are reasons, but it is a pity that such an anomaly should exist.
Having listened to the noble Lord, Lord Walston, there is one subject which I must mention with concern, and that is Stabex. I entirely agreed with all the noble Lord's arguments about improving the standard of living of the poorer countries. He said that Stabex was a modest scheme and, frankly, that is my fear; that it is, perhaps, too modest—that the funds are small and that any sort of a disaster or demand in the early years could wreck the scheme. Of course, if the scheme were wrecked in this way it would be a blow to the countries of the Lomé Convention and might make them sceptical about the future of the whole of the Convention.
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Another point to which I wish to refer and which was also dealt with by my noble friend Lord Selkirk is the question of the overlapping agencies and the growth of a new international bureaucracy. I did not know the quotation which he made from Walter Elliot before, but I believe it is true to say that the officials whom we met in Brussels all have souls to save. However, it is the work in the field that concerns me. There are so many different agencies that I believe that a watchful eye ought to be kept from the institutions to see that there are not too many cooks working in the same kitchen.
Working for the agencies should not become a sort of profession in itself unless one can bring technical qualifications to bear. For example, we were told that it is the intention to have 41 commissioners in the 46 countries. One or two countries like the South Pacific countries will be covered by one Commissioner. When I look at the map and see some of the countries each of which will have a commissioner, I feel that some of them will be very overworked but that others will be rather underemployed. Despite these very mild criticisms, I wish this project very well indeed. There is one reason which I should like to mention it proves what those of us who have supported the European idea have always believed —that the European Economic Community will not be inward looking and introspective but will be bold and outward-looking.
5.32 p.m.
Lord HAWKE: My Lords, I apologise for not having put down my name and, in consequence, I shall be brief. These are not the first developing countries in the world. A considerable number of years ago I was connected with South American utilities and, in the course of my operations there, I made something of a study of the financial history of the continent. I noticed that countries there were developed with vast sums of European money which were poured into them. Normal banking practice was followed and the higher the risk, the greater the interest rate. I observed that the higher the interest rate the more certainty there was of default. Here, I welcome the fact that it has been recognised that it is no good trying to lend money at interest to

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developing countries, and that the vast bulk of the money will be in grants. I have been advocating this for a number of years. I went even further, and suggested that the best method of all was lease-lend, in which case the loans only become repayable in the event of the developing country being in a position of prosperity and the original giver of the loan being in a position of penury, as was the case when we were in the War.
I must say that the Stabex figure does not fill me with great confidence. I do not see the millennium which the noble Lord, Lord Walston, pictured coming out of 375 million units of account out of a total of 3,000. Anybody who has been engaged in the commodity market will know that that is a very small margin indeed to cover fluctuations. It could vanish overnight, particularly if there were a real slump such as there was in 1930. It would not last a fortnight. I have been into a room the size of the Royal Gallery piled to the very roof with bags of coffee waiting to be destroyed, and, if we had a slump of that nature, I do not believe that Stabex would stand up for a minute.
The other point is that we all know that the cotrast between rich and poor excites envy, but the cure should to some extent lie at home because my experience of poorer countries is that, the moment they become a little more prosperous, the ruling classes all buy Cadillacs while the people who do the work become no richer and indeed very often become poorer. These countries cannot really accuse us on the score of this great gulf between rich and poor if they do not do something about the matter themselves. Nevertheless, I feel that the Convention is a great step in the right direction and I particularly welcome the fact that the money is to be given in grants rather than in loans. I wish the operation every success.
5.36 p.m.
Earl COWLEY: My Lords, I should like to add my own congratulations to my noble friend Lord Selkirk, the noble Lord, Lord Roberthall, the Committee and the draftsmen for the excellent work that has been carried out in preparing these two Reports. The Lomé Convention is a much-welcomed development in the relationship between the Community
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and the Third World. It is necessary evidence that, with the assistance of this country, as the noble Lord, Lord Gamer, and my noble friend Lord Selkirk have said, the Community will not become inward-looking. The Lomé Convention is a major step forward in the relations between industrial and developing countries, providing a comprehensive approach to the solution to many of the complex problems that face that relationship. The debate this afternoon has highlighted many aspects of this example of international co-operation. Thus I should like to add my own plea to those of all other noble Lords, including my noble friend Lady Elles, that the Convention should be ratified as soon as possible.
It is remarkable that so many developing countries, with all their diverse interests and needs, should be able to come together and create a common front in their negotiations with the Community of the Nine. The Convention's institutions will further encourage this process, a point which has been made clear in the Thirty-seventh Report. I agree with my noble friends Lady Elles and Lord Selkirk that the equal partnership between the developing countries of the ACP and the nine countries of the EEC is a great advantage. I rather liked the words used by my noble friend, who said that it avoids any question of patronage. The spirit of co-operation rather than confrontation between developing and developed countries, which is one of the hallmarks of the Lomé Convention can be seen in other international negotiations—for example, the Seventh Special Session of the United Nations. This growing understanding between, at least, certain developed and undeveloped countries bodes well for future international meetings; for example, next month's meeting of the Group of Twenty-seven and the discussions on the New International Economic Order which were mentioned by my noble friend Lady Elles. Perhaps even UNCTAD IV next year will achieve more than its predecessor in Santiago. I hope so.
However, one must not be too starry-eyed about the relationship between the 46 ACP countries and the Nine. There are reports of growing tensions over the implementation of the transitional provisions and the level of consultation prior

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to the coming into force of the Convention itself. The ACP countries did not achieve all they wanted under the European Development Fund. They did not obtain the request for 8,000 million units of account put forward by them during the meeting in Kingston last year, but the finally agreed level of the EDF is not so low when one takes into account the economic climate in Europe, and the fact that the Lomé Convention runs from the date of signature and not from the date of entry into force. This means that the European Development Fund will probably be spread over only four, rather than five, years.
Moreover, as the Twenty-eighth Report makes clear, the unit of account of the EDF is to be based on a principle that is linked to the Special Drawing Rights of the IMF, so that the ACP countries will be protected from the adverse fluctuations in the real value of community aid. I agree with the view expressed by the noble Lord, Lord Roberthall, and my noble friend Lord Amory about extending the Lomé unit of account as a basis for other units of account used by the international community.
An important development in the new Convention is the increasng responsibility to be borne by the ACP countries in the administration and management of the Community's programme aid. In future, it is planned that Community aid will be drawn up jointly by agreement between the Community and each of the ACP countries, and the programme will reflect the list of priorities of the particular needs of the recipient State. On paper this appears to be a useful and worth while innovation, but there is a danger that the EDF might lack a clear set of criteria when it comes to be put into effect. This is an important worry, and it should be watched very carefully as the EDF develops.
I agree with my noble friends Lady Elles and Lord Selkirk, and with the noble Lord, Lord Banks, in their feeling that the level of benefits under the STABEX scheme were too low, but it is the principles of STABEX that are really important, although at the same time I share the fears expressed by my noble friend Lord Reigate. It is interesting to note that many of the ideas being considered for the new international
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economic order reflect the provisions of STABEX. It is a step forward that can be improved upon and extended to cover all developing countries as the situation arises.
A great deal of importance has been attached to the idea of industrial co-operation as proposed under Title III of the Convention. The noble Lord, Lord Banks, raised this subject. While it is obviously welcome to see the recognition of the role of private investment as an indirect means of assisting the development of under-developed countries, there seems to be an apparent conflict with the declared aims of the British Government. It seems to be a tendency for private investment and the industrialisation process to be attracted to the more developed, and thus more economically attractive, of the Third World countries. While this is important, it is vital as well to transfer more resources in the form of overseas development assistance to the rural sectors of the poorest developing countries. Perhaps the noble Baroness, Lady Llewelyn-Davies, when she answers this debate, could comment on the apparent conflict between the Convention's seeming emphasis on industrialisation and the British Government's concern for rural development.
While the Lomé Convention certainly represents a step forward for the ACP countries, it covers only some 12 per cent. of the Third World's population. It does not cover many of the poorest of the developing countries—as has been mentioned—such as India and Bangladesh, and there is a danger that the Convention will actively discriminate against them. The point raised by the noble Lord, Lord Walston, that the gap between the rich and the poor is getting greater, is a very serious one, and it should be considered as such. Although some developing countries which are not covered by the Lomé Convention will receive special treatment as OCT countries, or be somehow associated with the Community in other ways, some of the most populous and poorest countries in the developing world are excluded from such benefits. I agree with my noble friends Lady Elles and Lord Selkirk that there is some advantage in having a scheme that is small, so that it can be properly operated. But its real need is that it should develop and be

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extended in the long term to cover all developing countries, if possible.
Many countries not covered by the Lomé Convention are eligible for certain trade benefits and other bilateral benefits from individual Member-States, but when compared to the contents of the Lomé Convention they are rather small. Furthermore, certain developing countries —for example, Argentina, Uruguay, Brazil and Mexico—have signed non-preferential trade agreements with the Community, but even here the Community has, in certain cases, unilaterally suspended parts of the agreements with those countries.
In preparation for the Seventh Special Session of the United Nations General Assembly, the Commission recommended that the Community,
" Should maintain and improve its generalised system of preferences and confirm its willingness to consider the interests of the developing countries."
This recommendation fits in with the Joint Declaration of Intent which was annexed to the Treaty of Accession to give special consideration to the trade policies of the independent Commonwealth Asian countries. It seems that the Community feels that it has gone far enough at the present time, but it should not be necessary to remind the Community that, as far back as October 1972, it agreed that,
" without detracting from the advantages enjoyed by countries with which it has special relations, it must respond even more than in the past to the expectations of all the developing countries."
While the Community is perfectly willing to grant generous food aid to developing countries as a whole, on the basis of need, financial aid is, from the point of view of the Community as an institution, distributed on a different basis. As a consequence of this, it was recommended that 100 million units of account should be set aside as aid for the non-associated developing countries in the first year of the five-year period, 1976 to 1980, by when it should have risen, it was hoped, to 200 million units of account. Despite the British Government's support for the scheme, it was rejected following objections from West Germany, France and Belgium. Thus, while much has been done in relation to the 45 ACP countries under the Lomé
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Convention—which development must be heartily welcomed—it would be really wrong of us to sit back on our laurels and merely congratulate ourselves. The Lomé Convention is an important step forward, but it is only a step forward, and is a clear indication of the way the relationship between the Third World and the industrialised countries could, and possibly should, develop.
I have only two detailed questions for the noble Baroness. There seems to be some doubt about the question of reverse trade preferences in the case of the OCT countries when they take up the offers of association with the Community—which offer bears great similarities to the Lomé Convention. I should be grateful if the noble Baroness could tell the House whether the question has been finally resolved, and what the decision has been. Secondly, it is reported that the Government of Bermuda have stated that they do not wish to become associated with the Community under Part IV of the Treaty of Rome. I should be grateful if the noble Baroness could find out what were the reasons for that Government's decision and what will be the effect upon Bermuda's relations with this country. We have had this afternoon an extremely useful debate. I should like to reiterate my hope that the Lomé Convention is ratified as soon as possible, and that it lives up to the expectations so eloquently expressed in this House today.
5.49 p.m.
Baroness LLEWELYN-DAVIES of HASTOE: My Lords, as the noble Earl, Lord Cowley, has just said, this has been a fascinating and most useful debate, and I should like to add my gratitude to that already expressed to the noble Earl, Lord Selkirk, for the way in which he has presented the Report. I also wish to express my gratitude to all the Members of the Committee for the way in which they have examined these by no means easy matters. The European Committees of your Lordships' House work extremely thoroughly on the very complex matters which come up. And, of course, we should never speak about these topics without congratulating the Principal Deputy Chairman of Committees for the indefatigable and successful labours in which all the time she is engaged on our behalf. I should also like to add to what many noble Lords have said about the

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drafting of the Report itself. It really is a model of what drafting should be—clear, concise, comprehensive and, for me, a delight to work with.
Her Majesty's Government, of course, most warmly welcome the Report. If he will forgive me for saying so, I think that perhaps the noble Earl, Lord Selkirk, was less than generous in his remarks about the welcome which Her Majesty's Government have given to the Lomé Convention. Indeed, in many ways we regard ourselves as one of its parents. We warmly welcomed the signature of the Convention. My right honourable friend the Minister of Overseas Development described it in the other place as "historic". I really do not think we can be accused of luke-warmness about it. In my view, it is one of the finest prizes in the crown of future co-operation and development among the nations.
My Lords, I think it would be very difficult—indeed, I do not think it would be possible—to answer all the points which have come up in the debate, because it has been a detailed and technical debate; indeed, in some parts extremely technical. But I think the whole House has clearly agreed that the Convention is an achievement of great psychological as well as political value. I think what the House has also particularly welcomed is that it demonstrates, and demonstrates in concrete form, the EEC's widening concern with the difficult problems of the developing world, and this is very important. As we have already agreed, the Lomé Convention builds upon the foundations laid by earlier Conventions, and in a number of ways it greatly extends and improves on them.
I think I should like to mention here what has not yet been mentioned; that is, that perhaps the most important difference is that the trade provisions abandon the concept of obligatory reciprocity. This means that the ACP States are not required to grant reverse trade preferences, and when the House considers, as was said by my noble friend Lord Walston, the relative economic strength of the Member-States of the Community and of the ACP countries, this is obviously not only urgently realistic but equitable. I think it is also important—something else, perhaps which we did not go into—that the aid provisions are more flexible, both in the instruments
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and in the terms of aid. They range from loans at commercial rates to soft loans and, as was especially said by the noble Lord, Lord Hawke, to outright grants, and I very much agreed with his view about that. This means that specially suitable forms of aid can be provided and, in a rather subtle way, can take into account, both the nature of the projects themselves and the level of development of the individual countries. This is perhaps not entirely new, but it is a fairly new conception of the way aid should be administered. Another important departure is the specific provision for the programming of assistance according to agreed and objective criteria in consultation with the ACP.
Many noble Lords have welcomed the other, rather novel thing in the Lomé Convention: that is, the Stabex Scheme. Here, perhaps my noble friend Lord Walston was the most hopeful, but some of us may share some of the worries of the noble Lord, Lord Reigate, and the noble Lord, Lord Hawke. There is no doubt, however, that we hope it will make some contribution towards the stabilisation of the export earnings of a number of key products of the developing countries, complicated though this may be. The industrial co-operation provisions are imaginative, and I believe that both Stabex and the industrial provisions are potentially significant innovations. This is always hopeful even if, as noble Lords have said, we are beginning in a small way. Of course, we do not know exactly how these things will work in practice, and there are some doubts, as has been said, about certain aspects of Stabex. But it is broadly hopeful, and it should provide very useful experience; as the noble Earl, Lord Cowley, said, we must hope to build upon it.
My Lords, I think it is true that the House agrees that Lomé has set a new pattern in the comprehensive nature of its provisions, again as the noble Earl, Lord Cowley, said. It is a balanced approach to development problems because it combines a wide spectrum of aid, trade and industrial measures. I think perhaps the noble Earl was making too much of the conflict between industrial development and rural development. We see them as two sides, really, of the same coin, and this, in an imperfect

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world, is the only way in which we can deal with it. Many noble Lords have referred to what I think is very important; that is, the relationship between the developing world and the Member-States of the EEC. Mr. Babacar Ba, who is the Senegal's Minister for Finance and Economic Affairs, and who was chairman, for most of the time, of the ACP countries during the negotiations and played a most lively and useful part in them, said that Lomé establishes:
" …a new type of relationship between under-developed and developed countries".
All noble Lords have emphasised the concept of co-operation between partners which runs throughout Lomé.
This, in itself, has an important effect, not only on the relations between us and the developing countries but, as—I was going to say "my noble friend"—the noble Lord, Lord Garner, said, on the ACP countries themselves. I think of the noble Lord as my noble friend because we were old colleagues in the Commonwealth Relations Office, attended many conferences together and many nights, "tired the sun with talking and sent him down the sky". I agreed very much with what the noble Lord said. The good thing about it all was that the ACP countries maintained a remarkable cohesion throughout all the negotiations despite the differences of which we know and despite the historical and cultural traditions with which noble Lords are very familiar. They maintained this cohesion, and they think that this is one of the most important products of Lomé. We think that is important for the future because, as the Report says, the success or failure of an agreement as complex as this depends entirely on the good will with which it is applied by everybody concerned.
Many noble Lords—I think almost every noble Lord who spoke—were worried about the ratification, and I can reassure the House completely on this point. It is true that the ACP are just about to reach their necessary 31 ratifications. Of the EEC States, so far only Denmark has ratified. We hope to be the second of the EEC countries to ratify, and in the very early future. The noble Earl, Lord Selkirk, need not worry; we shall certainly give a lead in this to the
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other countries. We anticipate very early ratification and we shall keep in close touch about it.
I think that at this point I ought to turn to the speech of the noble Lord, Lord Roberthall, when he presented the Twenty-eighth Report, and indeed refer to the speech of the noble Viscount, Lord Amory. I must confess at the very outset that for a long time the concept of units of account had me rather baffled, and when it was allied to this rather curious description of a "basket", which is always put in inverted commas in my brief, my bafflement was compounded. But the explanation which the noble Lord, Lord Roberthall, gave could not be bettered, and I think with that, put together with the remarks of the noble Viscount, Lord Amory, the House can rest content; and with the Report's explanation, we can leave it at that.
I ought perhaps to say to the noble Viscount. Lord Amory, who suggested that the Lomé unit of account could be applied to the Budget, that, of course, he will be aware of the complexities surrounding that problem and the additional cost to the United Kingdom if we made a change overnight; in other words, it is not a matter on which I can comment in any detail. There are many difficult and technical problems which would arise out of it.
Viscount AMORY: My Lords, I agree with the noble Baroness that it could not possibly be done overnight. I quoted it only as an illustration of what a single unit of account might eventually comprise in the years ahead if developments move in the way I hope they will.
Baroness LLEWELYN-DAVIES of HASTOE: My Lords, I take the noble Viscount's point. I ought to refer to the two caveats in the Report mentioned by many noble Lords. In the first one, as the House will realise, the Committee recommended that the weightings of currency should be reviewed from time to time. If circumstances showed that the standing of a member currency in relation to the unit did not reflect the underlying economic reality, there might be a case for such a review. But I do not think the House should underestimate the difficulty not only of getting agreement between the nine

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countries but that such a review was really needed. Also, again the technical and administrative difficulties that the change would cause.
The second caveat, to which the noble Baroness, Lady Elles, referred, was about the excessive proliferation of different units. As the noble Lord, Lord Roberthall, said, the Committee considered the new unit of account superior to the existing unit of account in the prevailing conditions and believed that it would eventually replace existing units in certain other areas. Her Majesty's Government favour the extension of the basket unit in appropriate circumstances. Indeed, we supported the proposal (as noble Lords will know) to which the Finance Council have now agreed; that is, that the European Coal and Steel Committee should use the unit of account in all its transactions as from January 1976. But the emphasis must be on "appropriate ". The new basket unit is most appropriate where there are frequent intra-Community and extra-Community transactions and, of course, particularly appropriate to Lomé. But there may be circumstances in which it would not be appropriate to choose a basket unit of account or, if a basket, not this one.
My Lords, these things are incredibly complex—economically and politically—and they must be examined and resolved. That is why, although we agree in principle with the second caveat—that there should not be excessive proliferation—we cannot put uniformity as the only objective; there are many other factors to consider. I understand the worries of the noble Earl, Lord Cowley, about EDF. We understand and will keep a close watch on that also. Many noble Lords have expressed worries and hopes about the implementation of the Convention. I can promise that this Government will do their best to do everything they can to make it effective; and I was rather pleased that so many noble Lords thought that the more British administrators there should be in it, the better. That was rather encouraging. I can assure the House that there will be many British people involved in it.
As to the actual institutions, I was very interested in the suggestion of the noble Earl, Lord Selkirk, about the Direc-
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tor-General. I think perhaps I ought to remind the House that much praise has been given to M. Claude Cheysson. He is supported by a Director-General, Herr Krohn, and two Deputy-Director-Generals, one of whom, Mr. Maurice Foley, formerly of another place, will be well known to all Members of your Lordships' House as an expert on developing countries. They control the division of the Commission. that is the Directorate-General VIII, which deals with the implementation of Lomé. I think it is in good hands. I do not think that the House will want me to run through—which I had planned to do—exactly how the control rests with the Council of Ministers and the Committee of Ambassadors. One can read about this. I agree that these bodies are sizeable but we think there will be a fair degree of unity among ACP States and Community Members, because this is exactly what happened during the Lomé negotiations. That is hopeful and we hope is going to continue. There is the possibility of difficulties arising—there always is—but that has been thought of, and there is provision for the Council of Ministers to look at this should those difficulties arise.
One of the other things about which many noble Lords were worried was about the co-ordination of the various multilateral aid organisations. We take every opportunity of urging co-operation between them and to support the machinery which exists to fulfil the function. Noble Lords will not want me to list all the organisations. In fact that is done, rather amusingly, on pages 35 to 37 of the Thirty-Seventh Report. I must say that there is rather a formidable number of them. The House will know that the United Nations have an Administrative Committee on Co-ordination and there is the UNDP which is responsible for administering and co-ordinating most of the technical assistance. With all these bodies we are in the closest touch. We try to ensure co-ordination between our bilateral aid programmes and those of other donors of both multilateral and bilateral aid. Nobody pretends that this is easy; nobody pretends it is perfect. We take seriously what the noble Lord, Lord Reigate, said. We are very much aware of the difficulties but are not at all unhopeful.

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My Lords, at this hour and after a long debate I do not want to take up too much time in talking about Lomé itself. But there are one or two points about which I was asked and with which I should deal. The noble Earl, Lord Selkirk, said that there were too few countries and not enough money. There is never enough money, that is certain. But I think that the noble Lord, Lord Reay, to whom the noble Baroness, Lady Elles, referred summed it up beautifully when giving evidence to the Committee when he said—and this is at page 24 of the Report:
"…it is not really right to criticise the Lomé Convention on the grounds that it excludes large populations elsewhere in the world, just as I think it would be wrong to criticise the Community for being a Community of Nine when it could be a Community of 15 or 20 European countries. The LoméConvention does, after all, cover 55 countries and that is some 40 per cent. of all the countries represented in the United Nations and it covers altogether…500 million people."
So, my Lords, I think it is a very good beginning. The noble Baroness, Lady Elles, was concerned about how we defined a developing country. As she probably suspected, we operate (along with all the other member-donors) on an agreed list which is compiled by OECD. I will send her a copy of the list later.
The other great worry that people have about the Convention, however imaginative and considerable its achievements have been so far, concerns its limitation to certain nations. The Government see it as a first step towards the development of a world-wide policy extending the Community's assistance to the developing nations. I very much share the disappointment of the noble Earl, Lord Cowley, with the results of the meeting of the Development Ministers. As everybody knows, the Community committed itself to the policy to which he referred by the terms of the Council Resolution in July 1974. All of us are disappointed that so far this has not been implemented. But this country will continue to make every effort to reach agreement on the means of making this commitment effective.
We fully recognise that the Convention does nothing to improve the lot of a large section of the developing world; especially we all think of the Asian Commonwealth. They were excluded from the
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Community's offer of association in 1963 and 1972. We accepted the terms of Protocol 22 of the Treaty of Accession because the inclusion of the Asian Commonwealth in the Community's offer simply was not a negotiable objective. Our policy was therefore to ensure the best possible terms for the associable Commonwealth, while trying to move the Community towards a more broadly-based development policy. And of course Lomé is not perfect; nobody could pretend it was. I should think it would be a miracle if any document emerging from negotiations involving 55 nations could reach anything like perfection; but, as noble Lords said, it is a beginning, and an inspiring beginning.
In the meantime, we must surely judge Lomé on its merits which are, as the whole House believes, considerable. Her Majesty's Government take great pride in it. The whole House will doubtless hope for even greater achievements in the future, but for the moment we may be satisfied with a remarkable beginning.
6.11 p.m.
The Earl of SELKIRK: My Lords, I should like to thank the noble Baroness most warmly for the extremely thorough way in which she has taken up the points over a wide field. Some of the points were much more complicated than those I tried to discuss. I am glad she could say that ratification will take place shortly. I noticed that the Minister used the word "historic" and, until the noble Baroness spoke this afternoon, that was the only word of warmth which had been said. The noble Baroness has spoken with great warmth. The noble Lord, Lord Banks, whose speech I enjoyed very much, was perfectly right to say that the word "associate" has ceased to have any meaning. It used to have a precise meaning, but I believe this meaning has shifted altogether. The noble Lord, Lord Walston, and I will watch with interest what States are accepted into the Lomé Treaty in the next two years. I endorse what the noble Lord, Lord Reigate, said. I had the highest possible opinion of the officials, and any comments I made had nothing to do with them; they have souls to save no doubt, but a bureaucracy does not. There is that distinction. I beg leave to withdraw.
Motion, by leave, withdrawn.
Lord ROBERTHALL: My Lords, I shall not move the Motion standing in my name, which was:
That this House takes note of the Twenty-Eighth Report of the European Communities Committee (Session 1974–75) on the Lomé Unit of Account.

POST OFFICE ORGANISATION
6.13 p.m.
Lord ALPORT Lord ALPORT rose to ask Her Majesty's Government whether they will consider reconstituting the Post Office, comprising the postal and parcel services, as a Department of State and establishing the telephone and telegraph services as a separate telecommunications corporation; and whether consideration of this will be included in the terms of reference of any prospective inquiry into the present organisation of the Post Office. The noble Lord said: My Lords, my reasons for putting down this Question are partly private sentiment, and partly what I conceive to be the public interest. For one year, in the late 1950s, I occupied a most modest post in the Government as Assistant Postmaster General, under my noble friend Lord Hill of Luton. Others in your Lordships' House have also held this post; my noble friend Lord Grimston and the noble Lord, Lord Slater. I think they will agree with me that they have never lost the sense of admiration and affection for a great public service which their experience as Minister responsible for the postal services gave them; I certainly have never done so.
It it not generally realised that the Post Office is the oldest Department, or was the oldest Department, of State, except perhaps for the Exchequer. It is older than the Army or the Navy. Its origins lie in the reign of King Henry VIII. It acquired over four centuries of public service a sense of responsibility and esprit de corps not dissimilar from those of the fighting services. There were and. have no doubt, still are, Post Office families, just as there are Army and Naval families.
It was influenced by a long historic tradition which gave to it a tinge of romance, so the divisions of the sorting offices, at any rate in the late 'fifties, still retained the nomenclature of the great trunk roads along which the mail coaches
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carried the Royal Mail a hundred or more years ago: the Dover Road, the West Road and the North Road. Along with its traditions, it was sensitive to the importance of modern technology. In 1957, it was introducing at Norwich automatic sorting machinery; and I still feel a lift of the heart when I see the great mail trains carrying the Royal Mail, with the sorting offices on them, go out each night from the main termini to carry their letters to far destinations—even to the smallest hamlet in the United Kingdom.
My hackles have often risen during these past years when I heard the Post Office abused and criticised. To me it is a miracle of organisation that I can post a letter addressed in my illegible handwriting and even now, with such little delay, it can reach its destination among the millions of letters which our postal services handle every day. We have had—and I believe we still have—the best Post Office service in the world.
Not long ago I posted by mistake, on behalf of my elderly mother, a letter with no address on it, but just the name of the lady for whom it was intended, and without a stamp. It was duly delivered, to the complete mystification of the recipient and without, I am grateful to say, any surcharge. This was simply because a sorter in the local post office, and some postman, knew enough about local affairs to be able to guess for whom the letter was intended.
The Post Office is not only a national service whose aim is to see the mail gets through, but a local service which in many parts of the country, for instance in the Scottish Highlands, has a more intimate relationship with the public than any other organ of Government. It is a service. It is not an industry; it is not like shipbuilding or coal mining or steel making or, for that matter, telecommunications. To expect it to operate as a nationalised corporation responsive to what I believe are called "market forces", is as unrealistic as it is to expect the Army or the health services to make a profit —and the latter, at any rate, has the financial resources of the insurance contributions to rely on.
There is an immense difference between the postal, the telephone and the telecommunications services. My Question, like many others in your Lordships'

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House, not only invites an answer, but expresses a point of view. I believe that there are a number of arguments why the Post Office, comprehending the postal and parcels services, should be separated from the telecommunications industry covering the telephone, telex and telegram services. These are they: as I have said, the postal service and the telecommunications industry are different in kind. One is an ancient, intimate, labour-intensive, flesh and blood service available to the poorest and humblest as a means of communication to which technology has only a limited application. I. can telephone my daughter in Paris without any other human being involved. If I post a letter to her, I suspect that scores of individuals are needed to clear boxes, man the trains, fly the aircraft, crew the ships, sort the letters, sell the stamps and deliver the letter at the other end.
Secondly, the labour force of the postal and telecommunications services is about 450,000. This is far too big for efficient administration. On the whole, the Post Office Unions have been led with a remarkable sense of responsibility, for which I for one am grateful. But I believe that the huge complications of such a disparate labour force place on both the management and trade unions a strain that they should not be required to bear. Thirdly, the financial basis upon which the present Corporation was established was extremely unfair to the Post Office as a whole.
Here I rely not simply on my memory or instinct, but on a Report, No. 12, of the Post Office Users' National Council. I quote from page 5,under the heading of Pension Fund Deficiency. It says:
"Briefly, although Post Office employees had a non-contributory scheme whilst they were Civil Servants, from 1961 onwards the Post Office had been making payments into a ' notional 'fund. In preparation for setting up the Corporation, it was agreed between the Post Office and the Treasury that this fund should be deemed to be held in "—
my Lords, mark this !—
"2½ per cent. Consuls, and that the fund would produce a payment of £45 million per annum for about 25 years into the Corporation's funded scheme. Since 1969 actuarial valuations of the superannuation fund have revealed increasing deficiencies, until the deficit calculated as at September 1972 was about £1,100 million, of which 85 per cent. related to pre-1969 service.
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"The Post Office calculates, as its current tariff proposals make clear, that the cost of funding the pre-1969 "—
when they were civil servants with pensions provided out of public funds—
"element of the deficit will amount in the current financial year to £90 million."
Let me put it bluntly. This means that every time we buy a 8½p stamp to put on a letter we are contributing to the pension liability for the non-contributory Civil Service pensions incurred before 1969 for the postal services, including of course the telecommunications staff. In fact, in 1970, if the Post Office had been allowed, as it should have been, to start with a clean sheet, £885 million or more would have been left to be found by the taxpayer.
That is not all. Over the centuries, Post Office revenues have been used to finance many strange and sometimes romantic things—Kings'mistresses, for instance. I personally do not grudge Mistress Nell Gwynne a penny, but I do grudge the Treasury the annual profit which the Post Office made during those years in the twentieth century when we made profits—and when I say "we" I am thinking back to my short incarnation as APMG. The Treasury took the profits that we made year by year, and in the name of corporate organisation foisted on the Post Office the responsibility for meeting from revenue an actuarial liability for nearly £1,000 million incurred before it became a corporation. If, say, from 1900 to 1969 the Post Office had been allowed to keep its annual profit, my guess is that it would have been the most affluent and also the most efficient organisation in the world.
I am not, of course, asking for the financial clock to be put back, but I am asking the Government to recognise that the decision of the 'sixties to turn the Post Office into a corporation had the effect of transferring the financial liability for about £1,000 million from the taxpayer to those who depend for their normal means of communication on the postal services—and let us remember that these include the poorest in the land, many of whom pay no income tax at all. They include—and I know that the noble Baroness, Lady Burton of Coventry, is to follow me in the debate—those who wish to remember separate members of

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their families, who may be thousands of miles away, with a cheerful Christmas card. I am doubtful whether there is any real argument today for giving a special rate for Christmas cards. I think this could detract from what is much needed—a reappraisal of the present financing and status of the postal services as a whole.
There is to be an inquiry, presided over by a distinguished university vice-chancellor. It will, I think, be the seventh inquiry since 1970 and the fact that so many inquiries have been necessary is evidence of two things, it seems to me. The first is that the present organisation of the postal services is unsatisfactory; and, secondly, that no Government have been able to make up their minds on what should be done to put it right, or have had the courage to face the fact that the decision taken in the 'sixties to turn the Post Office into a public corporation was wrong.
Between 1959 and 1969, the postal services, as opposed to the telecommunications services, made an overall loss of £22.6 million. During that period telecommunications made a profit of £306.3 million. The telecommunications profit hid the fact that to provide a national postal service of the standard necessary for the internal communications of the social and business life of this country, and to keep the charges at a reasonable level, it is necessary to give it some element of financial support. Because before 1970 the same organisation was responsible for both the postal and telecommunications services, the latter (as the money spinner) was able to provide this. Yet today, as I understand it, the telecommunications and postal services separately arc each expected to break even, taking one year with another.
If I am right in this, I would say to the Government that the only way this can be done is to reduce the standards of the postal services below an acceptable level or to raise the charges beyond an acceptable level, which would deprive a large part of our community of the essential means of social intercourse and will place a very serious additional burden on British commerce. This point has already been reached. Already, the Post Office is finding that the inexorable law of diminishing returns has begun to operate. I am quite certain in my own
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mind what the answer should be. The telecommunications service, with its high technological content, should be given its head, allowed to earn and keep the profits which it can certainly make, to operate as an independent corporation, financing its own research and development, and to provide us with a service of the standard we require. Twenty years ago, I remember being shown at Dollis Hill the apparatus which was to make possible STD. Contemporary advertising now tells me that it is possible to dial all over the world.
I saw a recent statement—I believe it was in the Sunday Times last weekend —of another development which has taken place. This development refers to System X:
" The Post Office calls it 'a fresh range of switching and associated systems using new computer-based microelectronic technology' which is to be introduced in the 1980s.
If successful, it should give the Post Office a more advanced, effective and flexible network; and industry a range of attractive products for export.
In essence, System X will be assembled from standard modular elements—covering switching, transmission and control. By arranging these elements or subsystems in different combinations, various services can he provided.
Parts of the System will be controlled by digital processors (alias computers) with provision for small local exchanges to be controlled locally. The GEC Mark 2BL has been selected as the main processor for the system."
I have not the slightest idea what all that means, any more than I had the slightest idea of the significance of those cases of transistors which Sir Gordon Bradley showed me 20 years ago as being the basis for a great international system of subscriber trunk dialling. But this I do know—the skill and inventiveness of of the British telecommunications service, working with the enterprise and genius of British industry, can give us a telecommunications service within Great Britain itself which is not only viable from the financial point of view, but efficient and modern right up to the hilt. It can also give us, as this quotation shows, an export to the world which would be immensely valuable to our economy.
Therefore, my Lords, I say this. Let us have an independent, self-financing telecommunications corporation. But let us have Her Majesty's Post Office as a quite

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separate organisation, enjoying a monopoly as it must, subject to the unique obligations of delivering your and my letters, parcels and Christmas cards to our front doors, unique from any other postal service in the world, giving to its sub-postmasters, its sorters, postmen, clerks behind the counter, a reasonable standard of pay and conditions of service comparable with their equivalents in other branches of Her Majesty's Service, and giving to the public, both private people and commercial companies, an alternative method of communication to the telephone which is reasonably priced, reasonably competitive, relieved of the albatross of the pensions liability which the Government should never have hung around its neck, and progressive minded as it has always been within the limits of the obligations which the law must impose necessarily upon a monopoly public service.
I believe that the change which is suggested in my Question would be widely welcomed by the Post Office management, by workers and by customers everywhere. What I am asking is: will the inquiry be allowed by its terms of reference to consider this point of view, and if it were recommended as a result of its consideration that this reorganisation should take place, would the Government be prepared to give the proposal their own serious consideration? My Lords, I beg to ask the Question standing in my name.
6.32 p.m.
Baroness BURTON of COVENTRY: My Lords, a great many people will be very grateful to the noble Lord, Lord Alport, for putting down this Question today and for what he has said. I am intending to end my remarks with the same hope that he has; that is, that the inquiry will look into the points that he has put forward today. I agree with him wholeheartedly that it is entirely unrealistic to expect the postal service part of the Post Office to contend with market forces and to make a profit, or even to pay its way. It is quite impossible, and I hope that what is said tonight by Lord Alport, with his experience, may help to bring that home to people. I was glad he mentioned the pension liability which I feel most unfairly has been placed as
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a burden upon all people who buy stamps today. But as he dealt with that matter, obviously I need not do so.
Earlier this year, on 19th March, we had a debate on postal charges for books and periodicals. This was initiated by the noble Lord, Lord Beaumont of Whitley. It was entirely non-Party, or all-Party, whichever term is preferred, and I think we can use that term for tonight's debate. This House is fortunate in that it contains people of much specialised knowledge, and in looking at the list of speakers in that debate on 19th March, and afterwards reading what was said, that specialised knowledge became very obvious. Those who took part in that debate were greatly indebted to the noble Lord, Lord Beaumont, not only for raising the matter but for what he said. But we did not, of course, get anywhere. And that is one of my criticisms of what happens today. A case is prepared with great care; we all appreciate that it may or may not be acceptable to the Government. But so often stereotyped answers are prepared beforehand and are read out quite irrespective of what is said in the debate. People in general, in Parliament and outside, feel that that attitude is one of the most frustrating aspects that we have to face today. It is very difficult to get a considered answer to the case made. I believe that my noble friend on the Front Bench today is determined not to give us a stereotyped answer prepared beforehand but to give us an answer to the case made.
The noble Lord, Lord Beaumont, referred to the fact that postage is now the largest single expense for many periodicals. Speakers in that debate considered that, apart from being a monopoly, the postal service was, for books and magazines, a public service—and I shall return to that point later. In the debate on 19th March I had an interest to declare and I have the same interest to declare today. As I think the House is aware, I am President of the Association of Mail Order Publishers and Chairman of its authority. In its report from 1st June to 31st August of this year, the Price Commission indicated that the level of price inflation in the nationalised industries reflected a rate greater than that now prevalent, and greater too than could be accounted for by catching up with

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the effects of price restraint. The Commission also warned of the dire consequences that failure to reduce this rate would have on the economy generally.
During our debate on 19th March speakers pointed out that many publications were exceptionally vulnerable to tariff increases. My noble friend Lord Strabolgi replied in effect, at col. 874 of the Official Report, that as books and periodicals were not subject to the Post Office monopoly, they should find their salvation in alternative methods of delivery. But this disregarded entirely the question as to whether alternative means could be found in time. The answer, which was repeated by the Minister in another place, reflected a grave misunderstanding of the problems of the Post Office. I thought my noble friend Lord Strabolgi had been given a most unenviable task and I did not think he was particularly happy with it, either.
Only recently, it was estimated that postal traffic, after the two increases this year, had fallen by up to 13 per cent. It is obvious to us all that, since the fixed costs of the Post Office do not reduce, the costs a locatable to the remaining units of traffic have increased. I feel that the end result of such a process must be disaster—which I think in a way was what the noble Lord, Lord Alport, was implying. It seems to me that the Government have been unable to appreciate the consequence of this policy on the small user, although it was forcefully pointed out by the Post Office Users' National Council in its report published in February 1975, when it said:
" Without large use by business the finances of the postal service would be even less healthy and the burden falling upon the small business user and the private user proportionately greater."
Nevertheless, in spite of what we tried to say then, and in spite of urgent demands in another place to the same effect, a wide-ranging inquiry into the Post Office was refused. But at last the Government have had to give way on this.
I think the final demand came from the Post Office Users' National Council —to whom I should like to pay tribute, and to its Chairman, the noble Lord, Lord Peddie—in its report of August 1975. In common with many other people, and obviously in common with
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the noble Lord, Lord Alport, I greatly welcome this inquiry. I hope that among other things it will be able to consider the whole substance of the Question put forward today by Lord Alport. If it were proposed that the postal services should be a Department of State, then I believe that the question which has too often been avoided would have at last fairly and squarely to be faced, and that the inquiry should address itself to it.
What is the extent of the Social Service element in the costs of the Post Office—and I think this is what Lord Alport was after, with much more experience than I have to offer—in other words, those costs for which it receives either no, or inadequate, compensation? If this aspect is properly looked into it will no longer be possible for Ministers to reject the possibility of Treasury support by asserting that this would involve subsidising business. Business accounts for about 80 per cent. of postal traffic.
A moment ago I mentioned the opinion of POUNC. Indeed, the noble Viscount, Lord Eccles, said in the March debate at column 874 that business traffic is vital to the finances of the Post Office. Furthermore, I think we would all agree —again this follows what was said by the noble Lord, Lord Alport—that if this traffic were to be even further diminished by unnecessarily high tariffs, it would be the individual consumers who, in the end, would have a postal service that they could not afford to use. I will not refer to Christmas cards, but I noticed the other day that a writer said with regard to stamps for Christmas cards that we have now reached the stage where the Post Office cannot afford to reduce them and the public cannot afford to buy them. This is the circle into which we have now got ourselves.
I believe it is suggested that this inquiry should take a year. It seems to me vital that, during that time, the Government should take whatever steps may be necessary to ensure that further tariff increases be contained, at least to levels consistent with the performance of the economy generally. The Price Commission has warned of the necessity of ensuring this. But perhaps I can illustrate the urgency of the general point by indicating some of the damage done by the increases we have already suffered this year.

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For scientific and technical publications, postage costs account generally for one-third of gross costs, and can in some cases account for 50 per cent. Not surprisingly, therefore, the mortality rate among periodicals has reached an unprecedented rate. Among those which have recently ceased publication as a direct result of postage costs are: Architect, Hotel Restaurant and Catering, Electronic Products, Industrial Buyer, Dataweek. My list is more extensive and the Minister can have it if he wishes, but I will not weary the House with it. What I have said is merely an indication. However, other periodicals such as Practical Wireless, Practical Electronics, Woman and Home, are no longer available on direct subscription. Those who are not fortunate enough to live in towns or large villages where these periodicals can be obtained stand to lose a good deal by this postal service being denied to them. It seems to me that this grim list provides sufficient answer to claims made by Ministers that publishers would have no difficulty in passing on these increased costs to subscribers. I think we have reached the stage where the increased costs cannot be passed on any further.
May I finish as I began, by thanking the noble Lord, Lord Alport, for initiating this debate, for the terms of his Question and for what he has said. I very much hope that this time the Government will be able to give us a helpful reply.
6.43 p.m.
Baroness PIKE: My Lords, I had not intended to speak in this debate. In fact, I had not anticipated that I could be in your Lordships' House tonight. However, my noble friend Lord Alport referred to the Assistant Postmasters General of the past who sat in this House, and I cannot help but remind him that I, too, had the privilege of being an Assistant Postmaster General. I think I am the only woman who has held that Office since Nell Gwynne, although there is no comparison between the roles that we played! Nevertheless, for three years I had the great privilege of being Assistant Postmaster General. Therefore, I know from my own experience not only of the efficiency and effectiveness of
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the Post Office, but also of the tremendously warm esteem in which it is held by anybody who has had the privilege of being part of that great organisation.
I do not wish to delay your Lordships tonight by repeating any of the points which have already been made. We are very proud of the achievements of, and of the opportunities which are being taken by, the telecommunication engineers. We believe that they have very great opportunities in the future to ensure not only that we have one of the finest telephone services but that we break new ground in that field. Also I believe that we still have one of the most efficient and effective postal services in the world.
In giving my support to all that has been said I should like to draw attention to the social content of the Post Office. As I said, I was an Assistant Postmaster General and I now have the privilege of being Chairman of the Women's Royal Voluntary Service. In my present capacity I know of the friendliness and help of great value that is given at the present time by postmen up and down the country. It is not something that you can show in a balance sheet or equate in economic terms. Nevertheless, the fact that the postman, a respected and reliable person, is going up and down the streets of this country all the time, is without price in a great many ways. The postal bus in rural districts is also providing a service that is very much needed. The post offices themselves, as well as the sub-post offices, provide a focal point that is of great value, although I am not pretending that this is something that should or could bear great weight when one is looking at the purely financial prospects of the Post Office.
I support my noble friends in what they have said tonight when I say that I believe the time has now come when we should look at divorcing the two services —the telecommunications service which is a purely mechanical service that can and must stand on its own in a world that is growing smaller, where the type of telecommunications that we envisage will be able to stand financially on their own feet, and the postal service which is giving a unique type of service to people up and down the country. Therefore, I hope that everything that has been said

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tonight will be warmly supported by everybody, because I believe that it is of the utmost importance to the future both of our own services and also of the communities in this country.
6.47 p.m.
Lord DENHAM: My Lords, I should like to support my noble friend Lord Alport in the suggestion incorporated in his Question. I do not know—and here I must differ slightly from my noble friend Lady Pike—whether Her Majesty's Government are aware of the extent to which the British public is dissatisfied not only with the high and ever increasing prices they are charged for postage and telephone calls, but also with what, rightly or wrongly, they consider to be the worsening service they receive in return. It may be that, as my noble friend suggests, the Post Office has become too unwieldy.
In terms of employment, at any rate, it is far and away the biggest business in the country. I understand—and the noble Lord, Lord Lovell-Davis, will correct me if I am wrong—that no fewer than four Ministers are accountable for the Post Office. The Minister of State, Department of Industry, is responsible for the Post Office as a nationalised industry. The Minister of State, Home Office, is responsible for broadcasting and regulations of the use of radio-transmitters, licences, copyright, et cetera. The Secretary of State, Home Office, is responsible for the Royal connection with postage and advising the Queen on experimental issues, et cetera. The Minister of State, Prices and Consumer Protection, is responsible for the nationalised industry prices, and their respective consumer councils, and also has responsibility generally for monopolies. This seems to be a rather scattered division of responsibility in Her Majesty's Government.
The noble Lord will be aware that there are many shades of opinion on what should be the future of the Post Office. In view of the inquiry that is to take place, I do not think we should prejudge the issue tonight; but I hope that the noble Lord, Lord Lovell-Davis, will be able to tell your Lordships that he accepts my noble friend's suggestion, supported as it is by the noble Baroness, Lady Burton of Coventry, and my noble friend Lady Pike, and that the possibility of the reconstitution of the Post
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Office will be within the terms of reference of the inquiry.
6.49 p.m.
Lord LOVELL-DAVIS: My Lords, in listening to this debate no doubt your Lordships' minds will have been cast back to 1969 when this House was debating the Post Office Bill which transferred the Post Office from a Government Department to a public corporation. The idea that the postal service should remain with the Crown was discussed and rejected then.
Today we are about to witness another major event in the long history of the Post Office, to which the noble Lord, Lord Alport, has so movingly referred. Noble Lords will be aware that my right honourable friend the Secretary of State for Industry has announced that M. C. F. Carter, the Vice-Chancellor of Lancaster University, has accepted his invitation to chair the Committee to review the Post Office. He has also published the terms of reference as being: to examine the performance and the main features of the organisation of the Post Office and its use of its resources and assets, and to consider whether any changes would better enable it to perform its functions under the Post Office Act 1969; to assess the policies, prospects and social significance of the postal business, including methods of financing it as a self-supporting public service; to consider whether the Post Office Act of 1969 places undue restrictions on the activities of the Post Office; and to make recommendations.
These terms allow the comprehensive review that the Post Office Users' National Council, under the very capable leadership of my noble friend Lord Peddie, has envisaged, and I think they cover much of the ground that we have covered in the debate this evening. They are drawn so as to permit a thorough and wide-ranging inquiry. I should emphasise that the Government are conscious of the fact that the Post Office faces very real and difficult problems in these inflationary times and that we do not intend the review to be either a witch hunt, on the one hand, or a whitewash, on the other. Rather we hope that the Review Committee will take a constructive look at the Post Office and its future. Now that the Committee is in 'he process of being appointed it would be wrong for the

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Government in any way to prejudice its investigations or to consider making any fundamental changes before the Committee has reported. However, I feel sure that this helpful debate will prove to be of considerable value to the Committee, who will undoubtedly study closely what your Lordships have argued today, together with all the evidence that will inevitably be coming its way over the next few months. I imagine that the noble Lord, Lord Alport, had this in mind when he initiated it.
The Committee will be faced with an onerous and exacting task. I am sure, however, it will also recognise the enormous task which the Post Office undertakes and the zeal and integrity of the vast majority of Post Office servants engaged upon it. I recognise, as he has said, that in initiating this debate the noble Lord, Lord Alport, had in mind the interests of the Post Office, inspired no doubt by his service there as Assistant Postmaster General. He will see from the terms of reference that it would be open to the Committee to consider the separation of the postal and telecommunications businesses and also to recommend how the separate services should be organised. Should the Committee recommend this, I can assure him that the Government will give most serious consideration to its recommendations.
The burden of the advantage if the postal services were to revert to the Crown would have to be shown, and speaking for myself I am not convinced by the case made today. It is true that they are running at a loss, but so they were in 1963, 1964, 1965, 1968 and 1969; that is, before the Post Office became a public authority. If the Committee of Review were to decide that the social significance of the postal services was such that at all costs they needed to he retained in their present form, and to recommend at the same time what would be necessary to maintain them on the basis of a self-supporting public service, would this business approach necessarily be better handled by civil servants than by a nationalised industry? It is true that whoever pays the piper calls the tune, but do we really want to get back to the situation where a Minister could be questioned in
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Parliament about every letter that goes astray?
The arguments for setting up a public corporation to achieve flexibility and a dynamic commercial approach apply equally to a service which is facing difficulties as to one where the future is bright; perhaps even more so because the incentive to reduce loss and wastage, to find effective means of running the service, is far greater when one is running a business than relying on the public purse. I would not underestimate the difficulties of the future. I think no one who has spoken this evening will underestimate them, but we are just beginning to see movement in the field of mechanisation and I shall be surprised if the technical ingenuity of the Post Office does not rise to the occasion with other developments.
The noble Lord, Lord Alport, referred to "System X". I must confess that I am as much in the dark as he about this but I, too, am convinced of the skill and enterprise of the telecommunications branch of the Post Office and of the British telecommunications industry. I will now turn to some of the specific points raised by noble Lords. On the question of separating the postal and telecommunications businesses into separate corporations—a matter which the Review Committee will consider—noble Lords will know this was examined during the passage of the Post Office Act and it was concluded that the most effective arrangement would be to give the two businesses a considerable measure of autonomy under the overall direction of a single board. Nevertheless, the Review Committee is free to consider and to recommend on this matter.
The noble Lord, Lord Alport, referred also to the matter of the Pension Fund. The Government have decided that for the year 1975–76 the Post Office should meet deficiency contributions from its own resources, without prejudice to a decision for future years which is still being considered by my right honourable friend the Secretary of State. I would point out that the saving to the Post Office that would be achieved by transferring this liability to the taxpayer would reduce the cost of a letter by 0·5p and the cost of a telephone call on average by less.
The noble Lord, Lord Alport, implied, if I understood him correctly, that the

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telecommunications business is being held back by losses in the postal business. I can assure him that there is no substance whatever in that suggestion. There is no cross-subsidisation between the businesses; the Post Office is required to prepare separate accounts for each and to agree separately their respective investment programmes with the Secretary of State for Industry.
My noble friend Lady Burton of Coventry has referred to the effects of the recent steep increases in postage rates on businesses which make heavy use of the postal services. Both the Government and the Post Office regret the need for these increases, but the inescapable fact is that without them the postal business of the Post Office, which is highly labour-intensive and therefore particularly vulnerable to inflationary pressures, would have ended this year with a massive trading deficit. This would have gone directly against the Government's policy of getting nationalised industries back to economic pricing, and so removing the need for price restraint subsidies in future years. In these circumstances, it would simply not be acceptable for the Post Office to seek to cushion one section of its customers, such as mail order firms or publishers, from the painful effects of increased charges, since the cost of doing so would fall on the remaining users of the postal services, many of whom would no doubt be in greater need of assistance than the intended beneficiaries.
Baroness BURTON of COVENTRY: My Lords, I should like to interrupt my noble friend here to raise one point. Obviously, I did not make myself clear. What T was trying to say was that because of the increase in the postal rates there had been a decrease of 13 per cent. in the postal traffic, and because there had been this decrease in the postal traffic without a corresponding decrease in the cost to the Post Office, the unit cost to other people was greater.
Lord LOVELL-DAVIS: Yes, my Lords, that may be so. But perhaps my noble friend will agree that the reduction in usage of 13 per cent. as against the increased revenue from the raised tariffs does not balance out. The revenue from increased tariffs is much greater than the loss through the loss in traffic, and I think this must be examined over
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a longer period to see precisely what its effect will be. My noble friend Lady Burton suggested that the present level of postage is causing some customers to make less use of the postal services, but in the view of the Government it would not be sensible for the Post Office to seek to retain a given level of traffic if that could be done only by providing services at less than cost. It is a matter of commercial judgment to get the balance right, and it is for the Post Office rather than the Government to exercise that judgment.
My Lords, my noble friend Lady Burton and the noble Baroness, Lady Pike, referred to the social needs of the Post Office services. The Post Office is very conscious of its social obligations, and has a long tradition of service to the community as a whole, as I think everyone here is aware. It is also very much guided, in all questions relating to the range of services provided, by the views of the Post Office Users' National Council and, where appropriate, of the Secretaries of State for Industry, Prices and Consumer Protection and the Home Department. So far as postal services are concerned, a particular aspect of the terms of reference of the Review Committee is the social significance of the service. I hope that will satisfy my noble friend Lady Burton and the noble Baroness, Lady Pike, to whom I must say that I am very pleased she has stayed this evening to take part in this debate, particularly as she has been to date the only woman Assistant Postmaster General. I welcome her intervention and I am sure the Committee will pay attention to her views when they read them in Hansard.
My Lords, finally may I repeat what I said at the beginning. It would be wrong for the Government to anticipate or influence the findings of the Review Committee. However, to say so in no way detracts from the importance of this fairly short debate, for which we must be grateful to the noble Lord, Lord Alport, and to those who have contributed to it. I hesitate to compare the thoughtful concern shown by your Lordships today with good compost, but I am sure it will have enriched the ground to prepare for a good harvest.
House adjourned at three minutes past seven o'clock