Sitting of 21 October 1975

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

PRIVATE BUSINESS
PORT ASKAIG PIER ORDER CONFIRMATION BILL
ROYAL COLLEGE OF SURGEONS OF EDINBURGH ORDER CONFIRMATION BILL
Considered; to be read the Third time tomorrow.

ORAL ANSWERS TO QUESTIONS
  DEFENCE

    Expenditure
    Mr. Canavanasked the Secretary of State for Defence whether he intends any adjustment of the policies of his Department, in view of Her Majesty's Government's anti-inflationary policy as outlined in the White Paper, The Attack on Inflation, Command Paper No. 6151.
    The Secretary of State for Defence (Mr. Roy Mason): Only in the same way that every other Department will have to adjust its practices to implement the measures.
    Mr. Canavan: Has the closure of the Admiralty armament depot at Brandeath anything to do with the Government's anti-inflation policy? Does not my right hon. Friend agree that it is rather anomalous for his Department, at this time of economic crisis, to be involved in an increase in public expenditure as well as contributing to an increase in unemployment? Will he consult the Department of Employment about this aspect of the problem?
    Mr. Mason: No decision has been made to close the Royal Naval Arma-
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    ment Depot at Brandeath, and this has nothing to do with the anti-inflationary policy, but if closure proposals for defence establishments, either due to the Defence Review or to rationalisation, concern Brandeath, the staff and the trade unions will be fully consulted.
    Mr. Pattie: Will not the Secretary of State agree that, no matter how many White Papers there have been since, the Defence White Paper represents the Government's view of the absolute minimum expenditure necessary to maintain our security? Is that still the Government's view?
    Mr. Mason: Yes, I am still planning defence based upon the proposals in the last Defence White Paper, other than the £110 million cut in the last budgetary statement.
    Mr. Crawshaw: Will my right hon. Friend assure the House that, whatever cuts are made, they will not impair the ability of the Regular reserve forces to do training? Is he aware that there is grave concern in both forces that the lack of petrol, for one thing, is making them unable to undertake training? Is he further aware that there is the possibility in the near future—I say this without wishing to be an alarmist—of having units not trained because they have been unable to go on exercises?
    Mr. Mason: I am afraid that I cannot give my hon. Friend the complete assurances that he would like. The increase in oil costs and the effects of the defence review are bound to have some effect on training. Nevertheless, my hon. Friend will have noticed that we are now in the midst of an exercise called "Inside Right" in which we are carrying out the mobilisation procedures of both Regulars and the TAVR.
    Mr. Tuck: Is my right hon. Friend aware that Britain spends no less than 5·2 per cent. of her gross national product on defence, whereas the average for the 11 NATO countries, excluding Portugal, is 2·7 per cent., and with Portugal included only 3·3 per cent.? Why is it that Britain has to spend so much more as a percentage of her GNP than the other NATO countries?
    Mr. Mason: No doubt my hon. Friend will catch up with what the Defence

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    White Paper revealed some months ago. Because we have been expending cash on overseas or international commitments which are not purely NATO but have now decided to withdraw from our major bases overseas, we are now carrying out the Manifesto commitment to bring down our defence expenditure in line with that of our major European allies, and during the course of the next four years we shall be saving £2,000 million.
    Mr. Frank Allaunasked the Secretary of State for Defence if he will make a statement on the effect so far on the policies and expenditure of his Department in the light of Her Majesty's Government's anti-inflationary policy as outlined in the White Paper, The Attack on Inflation.
    Mr. Mason: I would refer my hon. Friend to the answer I gave earlier this afternoon to my hon. Friend the Member for West Stirlingshire (Mr. Canavan).
    Mr. Allaun: What is the value of colossal military might if it means economic bankruptcy? Did not my right hon. Friend contradict himself earlier this afternoon? Did he not say that the economies would affect arms only in the same way as other Departments were affected, and a minute later also say that his policy was still based on the defence White Paper? Surely in the light of the present economic situation he must review his arms White Paper and conduct a second review forthwith?
    Mr. Mason: Until the public expenditure survey is complete my defence policy is based on the last Defence White Paper. I cannot put it more clearly than that.
    Mr. Younger: As jobs in the defence industries are being so badly affected by inflation, does not the right hon. Gentleman consider in retrospect that it was wrong of him to commit himself to buying missiles from abroad without at the same time getting a categoric assurance from the United States and France that they would buy British equipment? Will he give an assurance that he will not sign on the dotted line for these orders until there are reciprocal orders from those other two countries?
    Mr. Mason: I have indicated that the orders are subject to negotiations with the French and the Americans. The hon.
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    Member will probably be aware that on the American deal the United States Secretary of State Mr. Schlesinger came to the United Kingdom two or three weeks ago. During the course of that visit we both signed a memorandum of understanding dealing with defence equipment sales between Britain and America hoping that gradually over a period of time we should be able to rectify the imbalance in the purchases of defence equipment. No doubt that MOU will be borne in mind when we negotiate on Sub-Harpoon.

    NATO Defence Ministers
    Mr. Blakerasked the Secretary of State for Defence when he next expects to meet the other NATO Defence Ministers.
    Mr. Mason: I expect to meet my Eurogroup colleagues on 5th November and 8th December. The next meeting of the NATO Defence Planning Committee in Ministerial session will be on 9th and 10th December.
    Mr. Blaker: What consultations has the Secretary of State had with other NATO Defence Ministers about ensuring that Gan is not used by the Soviet Union if we withdraw?
    Mr. Mason: I have had no consultations with my NATO colleagues about the future of the island yet, because initially consultations must take place between the Foreign Office and the Maldivian Government. We may be able to extract an agreement to maintain the island with the Maldivians until the present agreement expires, but this will be entirely up to the Foreign Office when it negotiates with the Maldivian Government.
    Mr. Molloy: Will my right hon. Friend tell the House what discussions he has had or is likely to have with his NATO colleagues regarding the rationalisation of costs, equipment, repairs and spare parts among NATO members? Can he allay in any way the fears that many of us have that there is a massive waste of public money because of non-rationalisation among NATO members?
    Mr. Mason: I am sure that my hon. Friend will recognise that, as chairman of the Eurogroup Ministers within NATO, I have been urging upon my NATO colleagues the need for standardisation of

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    equipment within NATO. The meeting that we are to have on 5th November will devote all its sessions to that purpose.
    Mr. Younger: Will the Secretary of State bear in mind that all his NATO colleagues have stated that they regard our cuts as gravely damaging to the alliance? As the Chief of Defence Staff said recently on television that our defence efforts were down to bedrock, will he assure our NATO allies that he has made all the cuts he intends to make and that we shall be good allies from now on and keep up our contributions to NATO?
    Mr. Mason: It is correct that my NATO colleagues were concerned about the outcome of the Defence Review. I am sorry to say that I am unable to give them a categorical assurance that that is the final limit of our defence expenditure levels. I am sure all hon. Members know that public expenditure is under survey and that means all Departments, including the Ministry of Defence.

    Army (Proposed Reorganisation)
    Mr. Trotterasked the Secretary of State for Defence how many men will be saved as a result of the proposed reorganisation of the Army in Germany without the traditional brigade structure; and what trials it is intended to hold of the proposed new small divisional concept.
    The Under-Secretary of State for Defence for the Army (Mr. Robert C. Brown): I have nothing to add to the answer I gave to the hon. Member for Ayr (Mr. Younger) on 15th April on the question of manpower savings. On the re-organisation of the command structure, extensive trials are already under way and will continue over the next year or so to prove this new concept.
    Mr. Trotter: Will the Minister explain why this fundamental and vital reorganisation affecting commands, supplies, tactics and training—the major reform of the Army since before the First World War—has been made a commitment of the Ministry before any trials were carried out? Surely it would have made sense to have had the trials before committing ourselves to restructuring completely the whole of the Army?
    Mr. Brown: We are satisfied that the overall concept is sound. The main purpose of the trials is to get the details right and to assess the operational procedures, communications, and so on.
    Mr. Onslow: Does the Under-Secretary accept that the country has a right to be satisfied as well? Will he give an undertaking that the Defence White Paper due to be published in February will contain a full evaluation of this experiment, an analysis of the logistical costs which will be involved in redeployment of units in BAOR, and also an assessment of the units that are to be disbanded in these cuts, units whose identities have not been announced since June? I understand that they are to include the Guards Independent Parachute Squadron and at least two batteries of Royal Artillery?
    Mr. Brown: The hon. Gentleman should know that I announced in the Army debate that no cap badge units would be directly affected. The reorganisation is envisaged to be effective from 1st April 1979, but, of course, evaluation of the trials will take place long before that date. I am not prepared to give any undertaking about next year's White Paper.

    French Defence Minister
    Mr. Brothertonasked the Secretary of State for Defence when he next expects to meet the French Defence Minister.
    Mr. Mason: M. Bourges paid a visit to London at my invitation on 13th and 14th October. I am looking forward to a further meeting with him in due course.
    Mr. Brotherton: When the Secretary of State next meets the French Defence Minister will he attempt to make arrangements whereby pilots of the Fleet Air Arm can fly from the decks of French aircraft carriers after HMS "Ark Royal" has been phased out? Does he not agree that it is essential that these skills be retained by the country as a matter of national importance?
    Mr. Mason: I thought that we had assured the House that that was being done. As the through-deck cruiser programme is intact and the maritime Harrier has been ordered, those skills to

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    which the hon. Gentleman has referred will be maintained.
    Mr. Townsend: Is the Secretary of State confident that the programming of British and French Polaris submarines is suitably co-ordinated?
    Mr. Mason: No, Sir. No nuclear exchanges were discussed with the French.

    Polaris Base (Scotland)
    Mr. Teddy Taylorasked the Secretary of State for Defence if he will make a further statement on the future of the Polaris Base on the West of Scotland.
    Mr. Mason: We made clear in our election manifesto that starting from the basis of multilateral disarmament negotiations we would seek the removal of American Polaris bases from Britain. We may be able to initiate such multilateral disarmament negotiations once the present talks on mutual and balanced force reductions in Central Europe are concluded.
    Mr. Teddy Taylor: Members of the public who are concerned with security sometimes gain the impression, I am sure quite wrongly, that speeches by Labour Members or decisions of Labour conferences represent Government policy. Will the Secretary of State make clear beyond a shadow of doubt that it is the Government's intention to maintain the effectiveness of our Polaris forces and that there is no question of the Polaris bases being removed unless that is part of a unilateral agreement for disarmament?
    Mr. Mason: The British Polaris force is a significant contribution to NATO and plays its part in the triad of conventional, tactical-nuclear, and strategic defences of NATO. I have stated on many occasions that we intend to maintain the effectiveness of the Polaris deterrent.
    Mr. MacCormick: Although I appreciate the Minister's answer to that question, may I point out that a great deal of uncertainty is felt by the people in those areas, especially concerning the American base? Will he say definitely whether the American base will continue after the next two years or so?
    Mr. Mason: We have stated often in the past that we consider the American base desirable in our common defence, but we put before the electorate on two occasions last year the proposal that we should within the course of multilateral disarmament negotiations seek the withdrawal of the American base from Britain. After the Mutual and Balanced Force Reduction conference and the Strategic Arms Limitations Talks, Part II, have been completed, we may be able to open those talks.

    Service Accommodation
    Miss Fookesasked the Secretary of State for Defence what is the total stock of service accommodation in the United Kingdom; and what is the average length of time a house or other unit of accommodation remains vacant in the United Kingdom and in Plymouth, respectively.
    The Minister of Stale for Defence (Mr. William Rodgers): At present the Services have some 103,000 married quarters and hirings in the United Kingdom. The period when quarters are empty between tenants is normally up to two or three weeks throughout the United Kingdom, but in cases of modernisation or redeployment of units the period is inevitably longer.
    Miss Fookes: Is the Minister satisfied with the arrangements that are made for ex-Service men, because this is a problem which concerns many local authorities, especially my own, which is a Service constituency?
    Mr. Rodgers: We have not been satisfied in the past, because it is important that when people leave the Services, where they have been accustomed to having accommodation, they should find somewhere satisfactory to live. As the hon. Lady will know, a circular giving further advice has recently been sent to local authorities. We shall do all we possibly can to meet what I agree is a serious problem.
    Mr. Tapsell: Is the Minister aware that the circular to which he refers urging housing authorities to give specially sympathetic consideration to ex-Service men when applying for council houses is more honoured in the breach than the observance? Is he aware that in Lincolnshire I have had difficulty in finding council

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    house accommodation for ex-Service men and that more co-ordination is needed?
    Mr. Rodgers: In my experience, the circular is more honoured in the observance than in the breach. Ofter local authorities have acute housing problems of their own. If the hon. Gentleman would like to give me details of particularly difficult cases, I shall be glad to look at them.

    NATO Strategy
    Mr. Matherasked the Secretary of State for Defence what steps are being taken by Her Majesty's Government in pursuit of their policy to preserve the credibility of NATO strategy.
    Mr. Mason: NATO strategy is founded on the triad of conventional, tactical nuclear and strategic nuclear forces. In all three areas the Government intend to maintain an effective British contribution to the alliance.
    Mr. Mather: In view of the right hon. Gentleman's recent answer to my hon. Friend the Member for Ayr (Mr. Younger) that there was no guarantee that further defence cuts would not take place, how does he intend to preserve the credibility of NATO strategy? Is he aware of the remarks by Doctor Joseph Luns in Copenhagen on 25th September when he deplored the unilateral cuts of individual NATO countries? Is the Minister aware that if he continues with his policy his triad may well become a Troika?
    Mr. Mason: I am still hopeful that I shall be able to continue to maintain the new posture of our NATO role of working within the central region, within the Eastern Atlantic, and within the security of the home base.
    Mr. Marten: What steps is the Secretary of State taking to ensure the closest co-operation with our ally Norway?
    Mr. Mason: As the hon. Gentleman may be aware, we have just received the Norwegian Secretary of State for Defence who is on a Ministerial visit to this country. Talks will be taking place with him during the course of this week.

    Polaris Weapons System
    Mr. Robin F. Cookasked the Secretary of State for Defence what is his current estimate of the future life of the Polaris weapons system.
    Mr. Mason: Many years yet.
    Mr. Cook: What does my right hon. Friend mean by "many years yet"? Does it represent a departure from the view of the previous Conservative Government that Polaris had an effective life until the late 1980s? If it represents a departure from that view, what has happened to enable the Government to depart from that view?
    Mr. Mason: No; I cannot be more specific than that. Without replacing the present Polaris system, there are still many years of life left in the system.
    Mr. Frank Allaun: Is the Minister considering holding a nuclear test explosion at Nevada? If so, is it connected with updating or improving the Polaris warhead?
    Mr. Mason: I have explained to the House on more than one occasion that maintaining the effectiveness of the present deterrent may necessitate further tests and I have indicated already that there may be—I put it no higher than that—a need for another test some time next year.

    Anglo-French Co-ordination
    Mr. Moateasked the Secretary of State for Defence if he is satisfied with the level of co-ordination of defence policy between the United Kingdom and France.
    Mr. Mason: Yes, Sir.
    Mr. Moate: At a time when Britain is being criticised for standing up for its own interests by adopting a non-Community approach on energy, is it not ironic that France should still refuse to play a full and active part in NATO? Does the right hon. Gentleman recall that we were told that membership of the Common Market was essential for the defence of Europe? Will he suggest to the French that until they adopt such a full and active rôle they, unlike us, are not being good Europeans?
    Mr. Mason: No, I would not be as blunt as to tell the French that. France happens to be a member of NATO, but, whereas we are integrated into the military structure, France is not. However, France maintains a military mission to the Military Committee of NATO and is fully aware of NATO developments.
    Mr. Alan Lee Williams: Does my right hon. Friend agree that the French have always complained about the over-weaning influence of the United States in the Atlantic Alliance? Does he agree that if he were to make a success—as chairman of the Eurogroup—of the so-called two-way street in the passage of armaments, this would be a great incentive for France to rejoin the military side of the Atlantic Alliance?
    Mr. Mason: Yes, and I should applaud that posture were France to adopt it. My hon. Friend knows that there is a vacant chair in the Eurogroup and the French can join the group at any time they wish. I drew this fact to the attention of my French colleague during the course of discussions with him last week. He is fully aware of the likely outcome of defence equipment moving from Europe to America and vice versa if the two-way street concept gets off the ground.
    Mr. Pattie: In view of the recent purchase of the French missile Milan, will the Secretary of State say what the French are purchasing from us?
    Mr. Mason: The Question concerns defence policy and not defence sales. There was not a British equivalent of Milan available in the time scale in which we wanted it. We are to negotiate with the French to purchase Milan hoping to get production work in Britain and then be involved in the mid-term improvements of the missile.

    Army Juniors (Release)
    Mr. Gouldasked the Secretary of State for Defence in what circumstances a minor may be released from the Army service earlier than the date laid down in the regulations.
    Mr. Robert C. Brown: I apologise, Mr. Speaker, for the length of this reply, but it is necessary if I am to reply properly to my hon. Friend's question.
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    Regulations provide for a number of circumstances in which a minor can be released earlier than the date shown in his enlistment papers. A minor who enlists under the age of 17½ years has the right to discharge at any time during the first six months of service by giving 14 days' notice. A minor who enlists between 17½ and 18 years of age has the right to discharge at any time during his first six months, or before he reaches the age of 18 years and three months, whichever is the earlier. He may also be discharged for compassionate reasons, on the emigration of his next of kin, or if his commanding officer considers that he is not reaching the standard normally expected.
    Mr. Gould: What course of action would my hon. Friend recommend to a 17-year old soldier from my constituency who has been trying for months to obtain his release from the Army, who has made repeated representations to that effect through me and others, who has even gone to the length of running away from the Army, only to be forcibly returned, but who is still told that he cannot be released? Is it not insupportable in a supposedly civilised country that a 17-year old boy should be kept in the Army against his will as a virtual prisoner?
    Mr. Brown: I think that my hon. Friend knows well enough that I have given a great deal of consideration to the case to which he refers and that the youngster concerned has had a number of interviews with his commanding officer. It seems that the boy himself tends to wish to continue his service. Nevertheless, many youngsters come under pressure from parents and others. This is a case that I have constantly under review. I assure my hon. Friend that if the circumstances arise where a discharge becomes obviously necessary I will see to it.
    Rear-Admiral Morgan-Giles: Is the Ministry taking special steps in present circumstances to draw the attention of school leavers, many of whom are experiencing difficulty in obtaining employment, to the advantages of a Service life?
    Mr. Brown: I should have thought that if the hon. and gallant Gentleman had been watching the Service advertisements he would have realised that the Ministry was taking steps. We are not

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    taking any particular steps, but we have appealed to youngsters for many years.

    Northern Ireland
    Mr. Biggs-Davisonasked the Secretary of State for Defence whether he will make a statement about the operations in support of the civil powers in Northern Ireland.
    Mr. Michael McNair-Wilsonasked the Secretary of State for Defence if he will make a statement about the operation of the security forces in Northern Ireland.
    Mr. Robert C. Brown: Army operations continue throughout Northern Ireland to assist the Royal Ulster Constabulary in the task of combating violence and terrorism. Recent upsurges in violence, particularly in South Armagh, have been met with prompt and firm action on the part of the security forces. An additional infantry battalion is in the Province as a temporary reinforcement and a range of extra selective security measures have been adopted in the areas affected. We are watching the situation very closely and we shall continue to match our operations on the ground to the level of violence in any area.
    Mr. Biggs-Davison: First, I welcome what has been said about South Armagh. Would the Under-Secretary venture to say that Her Majesty's Forces have now regained the terrorist-occupied territories in South Armagh for the United Kingdom? Secondly, in view of the complaints, now widespread on both sides of the sea, that the forces fight with one hand tied, will Her Majesty's Government do more to explain to the public the political and military considerations governing their policy?
    Mr. Brown: I indicated in my original answer that we had taken the necessary steps—not to regain control, because there was never any question of loss of control. It was an increase of violence in a certain area which caused us to increase our cover in the area.
    Mr. McNair-Wilson: Has the Under-Secretary seen the article in the Army magazine Visor which suggests that the Army is concerned about the cease-fire which seems to be honoured only by our own security forces? As 40 soldiers have
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    been killed in South Armagh, is it not time that our security operations in the Province as a whole were reviewed?
    Mr. Brown: The whole House will be concerned about the breaches of the ceasefire. The Provisional IRA has claimed responsibility for a number of incidents which were clear breaches of the ceasefire. Two of the most tragic incidents were, first, the explosion near Forkhill on 17th July which killed four soldiers and injured another, and, secondly, an explosion under an Army personnel carrier near Crossmaglen on 9th October which killed one soldier and injured four other soldiers and a Royal Ulster Constabulary constable.
    Perhaps I may be allowed to take this opportunity of expressing sympathy with the relatives of the brave men killed and injured at the explosion near Crossmaglen on 9th October.
    Mr. Powell: Are the operations of the defence forces affected by communications received from the incident centres and if so, in what respect?
    Mr. Brown: Any information received from the centres is given consideration but would not determine security forces' operations in their entirety, if that is what the right hon. Gentleman was suggesting.
    Mr. Thorne: Is the Minister confident that we now have the activities of the UDA under control?
    Mr. Brown: It would be a bold Minister who would state from this Box that we had under control every organisation in the Province at any one time.
    Mr. Younger: Would not the Minister agree that our security forces are still carrying out their immensely difficult task in Northern Ireland with creditable skill and patience and can he assure us that when the forces see a wanted person in their area, they give every possible assistance to the RUC in apprehending him and getting him arrested?
    Mr. Brown: I am grateful for the hon. Member's initial comments. I have said before, but it is worth repetition, that there is no other Army in the world that could have carried out the unenviable task of the British Army in Northern Ireland with the same good will. It

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    does not matter from which area law breakers may come and whatever their religion—the forces will give all possible support to the RUC to get these people into court to pay the price for some of the heinous offences now being committed in the Province.

    Amphibious Warfare Forces
    Mr. Wallasked the Secretary of State for Defence if he will make a statement on the future of the amphibious warfare forces.
    The Under-Secretary of State for Defence for the Royal Navy (Mr. Frank Judd): I would refer the hon. Member to the information given in the Statement on the Defence Estimates 1975, and to what I said in the Navy Debate on 9th July.
    Mr. Wall: Can the Minister assure us that when the cuts already announced have become effective, we shall still have an effective amphibious force and that there is still a NATO role for it, particularly on the flanks of the alliance?
    Mr. Judd: We have a full and important rôle for our amphibious forces, although at a reduced level, particularly on the northern flank, where they have already demonstrated their effectiveness with considerable success in exercises with the Norwegian forces.
    Mr. Trotter: Can the Minister explain how the forces are to operate when "Bulwark" is scrapped and "Hermes" converted to an anti-submarine rôle? Will the new through-deck cruisers have an amphibious capability and has he considered commandeering or requisitioning cross-Channel steamers to carry the marines in future?
    Mr. Judd: "Hermes" will continue to have a secondary rôle as a commando carrier. "Fearless" and "Intrepid" still have a long and useful life ahead of them. We are always examining ways in which we can raise alternative means of shipping to ensure maximum flexibility in the deployment of our NATO forces.

    NATO (British Contribution)
    Rear-Admiral Morgan-Gilesasked the Secretary of State for Defence, if he will make a statement on the latest posi-
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    tion with regard to Great Britain's contribution to NATO.
    Mr. Mason: The United Kingdoms contribution to NATO is set out in detail in the Statement on the Defence Estimates 1975 (Cmnd. 5976). Since the publication of the statement, the appointment of the Air Officer Commanding-in-Chief RAF Strike Command as a NATO major subordinate commander and consequent extension of his responsibilities have enabled us to make naval and air forces, including nearly 200 aircraft, more readily available to the alliance in an emergency.
    Rear Admiral Morgan-Giles: On Trafalgar Day, has the Secretary of State considered that the greatest and fastest growing threat to NATO now lies at sea with a confrontation below the level of declared war? Has he considered whether the British contribution, which is a more maritime one, would be more effective in preventing war rather than waging it?
    Mr. Mason: I would have thought that on Trafalgar Day the hon. and gallant Member would first have praised the fact that we have the through-deck cruiser programme, that the maritime Harrier is coming, that we have ordered Sub-Harpoon and that we are developing Sea Skewer. He should be standing up in praise of the Navy on Trafalgar Day.
    Mr. Newens: Is my right hon. Friend aware that our contribution to NATO constitutes a heavy burden on our economy which we cannot afford to expand and which many of us think it is doubtful that we shall be able to sustain? Could he confirm that it is our policy to seek, at least eventually, the winding-up of all military alliances, including NATO?
    Mr. Mason: I part company from my hon. Friend on this matter. He should understand, as I am sure most of the British people do, that because of our contribution to the alliance and because NATO exists, we have had 30 years of peace in Europe—the longest span of peace in the last 200 years. If that collapses, our security will be at risk.
    Mr. Onslow: Without dissenting from the right hon. Member's concluding remarks and in the hope that my question

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    will not prompt him to pay himself further compliments, may I ask whether he is aware that the strength of our contribution to NATO must depend on the strength of the nation's economy and that that in turn depends very much on the strength of our defence industry? Is he aware that many people are alarmed by the way the future of the industry has been prejudiced by the conclusion of contracts to buy weapons from overseas without any corresponding firm agreement on work in this country or for reciprocal purchases by our NATO partners?
    Mr. Mason: There cannot be painless defence cuts and when there are military requirements in order that our forces shall have the best equipment in the right time scale, it is necessary to look abroad as well as at home. When the package was made to purchase the British Sea Skewer, the French-German Milan and the American Sub-Harpoon, I managed to equip the forces at a cost of £100 million less than buying all-British. I cannot afford to ignore that.

    Ulster Defence Regiment
    Mr. Bradfordasked the Secretary of State for Defence, in view of the fact that Mr. David Burnside was dismissed from the Ulster Defence Regiment for being a member of the Vanguard Unionist Party, whether he will make a statement on whether all members of that party are to be excluded from the Regiment, and as to which other parties are similarly affected.
    Mr. Robert C. Brown: Members of the UDR are treated exactly the same as members of the Regular Army regarding the expression of political views. A member of the UDR may be a member of a political party, including the Vanguard Unionist Party, but he may not take any active part in the affairs of any political organisation or party.
    Mr. Bradford: Will the hon. Gentleman accept that there are other serving members of the UDR who are actively involved in politics? If he wants names and parties, I am quite willing to submit them. If he is aware of this, we are left with no alternative but to believe that Mr. Burnside has been discriminated against. Would he not agree that it is nothing less than deceitful to discharge
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    him for political involvement when the regiment knew at the time of his admission that he was actively involved in politics?
    Mr. Brown: If the hon. Member has the details he mentions, I shall be pleased to see them. Mr. Burnside was not expelled because of his membership of this organisation, but because of his activity in it. After an article in the Sunday News on 18th May, Mr. Burnside was warned by his commanding officer that he could not be an active member of a political party and remain a member of the UDR. On 2nd June, Mr. Burnside issued a statement as Press officer of the Vanguard Unionist Party and as a result of his continued active involvement in politics he was discharged.

    North Sea Oil Installations
    Mr. Aitkenasked the Secretary of State for Defence if he will set up a specially equipped force to protect North Sea oil rigs and pipelines from possible terrorist attacks.
    Mr. William Rodgers: No, Sir.
    Mr. Aitken: Does the Minister agree that the problems of security on oil rigs and pipelines are in certain important respects unique, and that in particular there needs to be a regular review of the liaison arrangements among the civil police, the Royal Air Force, the Royal Navy and Government Departments? Will he undertake to keep the liaison arrangements under close review, and in doing so will he pay particular attention to the recent lectures and articles by Professor Donald Watt of the London School of Economics, who spelled out the case for such a special force in some detail?
    Mr. Rodgers: The problems certainly are unique. Equally, to review present arrangements is right, and we have frequent and continuing consultation with the Offshore Operations Association, among others. The answer to all the hon. Member's questions must therefore be "Yes".
    Mr. McNamara: Will my right hon. Friend comment on the success of the security forces in dealing with the bomb hoax on the rigs in the North Sea during the recess?
    Mr. Rodgers: My hon. Friend is correst in saying that this was a successful operation. In so far as there were lessons to be learnt, they will be learnt.
    Mr. Kershaw: In view of the Minister's answer, what is the purpose of the force of five or six ships that have been ordered?
    Mr. Rodgers: The hon. Member for Thanet, East (Mr. Aitken) asked whether we would set up a specially equipped force. The answer to that Question is that I made a statement on 11th February making special provision for this purpose. The answer I gave to the hon. Member was therefore correct.

    NATO (Northern Flank)
    Mr. Hal Millerasked the Secretary of State for Defence when were the last exercises held for the reinforcement of the North Atlantic Treaty Organisation's northern flank; and if he is satisfied with the United Kingdom's capability in this respect.
    Mr. William Rodgers: The last NATO reinforcement exercises on the Northern Flank, Exercises "Northern Merger" and "Bold Guard", were held during September 1974. The answer to the second part of the hon. Gentleman's Question is "Yes".
    Mr. Miller: Will the Minister reconsider that reply in the light of the defence cuts, and will he also consider the command structure on the northern flank in view of the importance of the maritime and air rather than the land forces on that front?
    Mr. Rodgers: I made my reply in the light of the defence cuts, and I therefore cannot depart from it. The northern flank will be of continuing concern to us and we shall review the possibilities.
    Mr. Fernyhough: Will my right hon. Friend resist the blandishments of the Opposition who are constantly demanding cuts in every other service while pressing for increases in defence expenditure?
    Mr. Rodgers: I shall resist blandishments from wherever they may come.

    Multi-Rôle Combat Aircraft
    Mr. Wigleyasked the Secretary of State for Defence if he will now abandon
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    all work on the Multi-Rôle Combat Aircraft project.
    Mr. William Rodgers: No, Sir.
    Mr. Wigley: Is the right hon. Gentleman aware that in view of the number of projects in the 1950s and 1960s which cost millions of pounds only subsequently to be scrapped, and in view of the number of projects for hospitals, schools, and old people's homes for which the Government cannot find the money, many people feel that the Government have a ludicrous set of priorities in these matters?
    Mr. Rodgers: I cannot share the hon. Member's view. I think that we are all agreed that this country must be properly defended, and whereas it is right at all times to examine every project, I am satisfied that the MRCA can be justified. The hon. Member should consider the present employment consequences of the sort of cancellation he seems to envisage.
    Mr. Ronald Atkins: Am I right in supposing that the alternative to the MRCA—the American F 14—would cost $50 million?
    Mr. Rodgers: I am grateful to my hon. Friend. Those who propose to cancel the MRCA must indicate the alternative they have in mind. I believe that all the options are less satisfactory and more expensive.

  SOUTH HUMBERSIDE
  Mr. Brothertonasked the Prime Minister if he will pay an official visit to South Humberside.
  The Prime Minister (Mr. Harold Wilson): I have at present no plans to do so, Sir.
  Mr. Brotherton: May I wish the Prime Minister many happy returns of Trafalgar Day—in opposition—and ask him to reconsider his answer? Is he not aware that on South Humberside, particularly in the ports of Immingham in my constituency and Grimsby next door, there is ever-increasing concern at the increase in port and dock charges? Will he consult the British Transport Docks Board and explain to it that to increase charges at a port like Immingham, which is profitable, so that the port is put out of business and competition with other ports is

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  foolish? Will he explain to the board that its intention to take over the port of Felixstowe is equally foolish?
  The Prime Minister: As far as I am aware Felixstowe is not on Humberside. I am aware of the concern felt in the hon. Member's area about the other matter he raised, but he will recognise that this is entirely a commercial matter for the board, which was reluctant to make the increases but was forced to do so by rising costs.
  If the hon. Member wishes to pursue this matter further, even though there is no direct ministerial responsibility, I am sure that he will do so with my right hon. Friend who is concerned with these matters.
  Mr. McNamara: Is my right hon. Friend aware that, no matter what happens on the south bank, he will always be welcome and get the warmth and affection from the people on North Humberside in the future that he has had in the past? There is, however, a matter of concern to both banks, and that is the dispute with Iceland, which is under negotiation. Will my right hon. Friend confirm that if negotiations are protracted beyond the date when the present agreement ends, British trawlers will not go into Icelandic waters unprotected?
  The Prime Minister: The second part of my hon. Friend's question raises hypothetical issues because we are determined, in so far as it lies within our power, to secure reasonable agreement on this matter, but no British fishing vessel will go unprotected where protection is necessary.
  My hon. Friend will be aware that last month my right hon. Friend the Minister of State for Foreign and Commonwealth Affairs had a first round of talks with the Icelandic Government on the continuation of arrangements covering fishing by British vessels off Iceland, and this establishes at any rate the main areas of negotiation. Further talks are starting this Thursday. We know how urgent it is to reach agreement because of the time factor here, and it will be essential that any new agreement should permit access by United Kingdom vessels to the area within 50 miles of the Icelandic coast, which is vital for our industry.

  PRIME MINISTER (OFFICIAL ENGAGEMENTS)
  Mr. McCrindleasked the Prime Minister if he will detail his official engagements for Tuesday 21st October.
  Mr. Lawsonasked the Prime Minister if he will list his official engagements for 21st October.
  Mr. Blakerasked the Prime Minister whether he will list his engagements for the remainder of Tuesday 21st October.
  Mr. Les Huckfieldasked the Prime Minister whether he will list his official engagements for 21st October.
  The Prime Minister: I have held a number of meetings with ministerial colleagues and others, including a meeting this morning with representatives of the executive council of the Scottish Daily News. Later today I shall be meeting leading representatives of the medical profession to discuss the inquiry by the Royal Commission into the National Health Service.
  Mr. McCrindle: When he meets the doctors later today, will the Prime Minister bear in mind that to many of them the issues of clinical freedom and pay beds are inseparable? In those circumstances, will he reconsider his decision not to include the pay beds issue in the terms of reference of the Royal Commission? Will he consider a postponement of the legislation he proposes if a damaging confrontation between the doctors and the Government is to be prevented?
  The Prime Minister: I have nothing to add to what I said yesterday in answer to many questions on this subject. I shall naturally wish to hear the views of the doctors rather than have them aired perhaps on their behalf, in however distinguished a manner.
  Mr. James Lamond: Will my right hon. Friend remind the doctors that they said very little in 1971 when the Tory Chancellor of the Exchequer announced a savage cut in expenditure on the National Health Service? Will he draw their attention to this Government's excellent record with regard to the National

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  Health Service, including an increase of £750 million a year in expenditure on the service?
  The Prime Minister: In these important discussions I shall not want to go back to what doctors did or did not say or do under the previous Government, but it is certainly a fact that, as my hon. Friend said, we have made a big increase in the resources available to the National Health Service. I gave the figures yesterday showing that the proportion of the GNP going to the National Health Service was now an all-time record, despite the economic difficulties facing the country.
  Mr. Lawson: When he meets the doctors, will the Prime Minister ask them whether there is any known cure for an epidemic of burglaries? Bearing in mind that the National Health Service is a major item of public expenditure, when does the right hon. Gentleman intend to see that the Chancellor of the Exchequer honours the pledge that the Prime Minister made last Thursday, recorded at the foot of col. 1587 of Hansard for that day, that the Chancellor will make a statement on the greatly increased size of the public sector borrowing requirement?
  The Prime Minister: My right hon. Friend did, although I am not aware that that matter arises out of the important discussions that I shall be having with the doctors this afternoon, which the hon. Gentleman has characteristically sought to trivialise. I should perhaps tell him in relation to one of his throw-away lines that it is the doctors I am meeting, not the police. The police have their responsibilities. As I have already told the House in answer to Questions, there is no ministerial responsibility involving this Government because this all occurred before the change of Government.
  Mr. Campbell: Who are the representatives from the Scottish Daily News whom my right hon. Friend met today? Can my right hon. Friend give us some idea of the results of that meeting?
  The Prime Minister: We met the representatives of the works council, including the editor as well as the TUC member. As a liquidator has been appointed, the liquidator was also there. The liquidator, who has been given his function by a decision of the court, and
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  who is thereby required to act on behalf of the creditors, will be getting in touch with the creditors, as he informed us. When he has done that, when he has done whatever he can not only to sort out the facts but to decide what should be done for the future, he will be in close touch with my right hon. Friend and hon. Members.
  Mr. Blaker: Will the Prime Minister now answer the Question which he failed to answer last Thursday, and which is even more topical today, owing to the welcome presence in this country of our distinguished visitors from Saudi Arabia: as central Government spending has increased by no less than 47 per cent. in the past six months compared with the same period last year, and as the Prime Minister made it clear last Thursday that he has no plans to announce further cuts in Government spending to take effect before the year after next, how does he expect to convince our overseas creditors and customers—
  Mr. Speaker: Order. This supplementary question seems to be getting a very long way from the Question on the Order Paper.
  The Prime Minister: I answered this question last week, and my right hon. Friend the Chancellor of the Exchequer made a very important pronouncement on these matters, following the practice of previous Chancellors, Labour and Tory, who made important speeches on these occasions. The matter in no way arises out of this Question. I am not meeting Prince Fahd today. I met him yesterday and I am meeting him again tomorrow. I have far more faith in Prince Fahd's ability to assess the economic position of this country than in the ability of biased Opposition Members.

  RABIES
  Mr Farrasked the Prime Minister if he is satisfied with the co-ordination between the Department of the Environment, the Home Office and the Ministry of Agriculture, Fisheries and Food in the campaign against rabies.
  The Prime Minister: Yes, Sir.
  Mr. Farr: As the Minister responsible for health matters is also closely involved,

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  is it not about time that, instead of our having four different departmental Ministers responsible for dealing with an outbreak, a plan was drawn up in the charge of a single Minister for immediate implementation when the disease comes to this country?
  The Prime Minister: I agree with the hon. Gentleman that it is an extremely serious problem, one which causes grave anxiety to us all. My right hon. Friend the Minister of Agriculture and the Ministers in surrounding countries are in close co-operation about the matter. The hon. Gentleman will know—and I think that he will be willing to pay tribute to the actions taken by the present Government—that we introduced a Rabies Act last year giving us enabling powers. We have made two orders, one to deal with import controls and quarantine requirements and one to deal with stamping out any outbreak which might occur in this country. Those orders became fully operative last February. A very high fine is imposed in odd cases.
  Mr. Raphael Tuck: Not high enough.
  The Prime Minister: I heard of a case when I was on holiday last year of a French yachtsman who walked his dog on the quay being immediately fined £400 in a magistrates' court. Offenders are now liable to a year's imprisonment. [HON. MEMBERS: "This reply is too long."] Anyone who says "Too long" in regard to such a matter has no sense of responsibility. I am trying to answer the hon. Member for Harborough (Mr. Farr). I shall begin again.
  Offenders are now liable to up to one year's imprisonment and/or an unlimited fine on conviction on indictment. I agree with my hon. Friend the Member for Watford (Mr. Tuck) that fines, even of £400, are totally inadequate because of the risks to life and the risks of terrible suffering in this country.
  Mr. Faulds: Would the Prime Minister consider it worth while approaching officials of the Council of Europe, the relevant committee of which I think I am right in saying is planning to set up a scheme to monitor the movement of rabies across Europe?
  The Prime Minister: Yes, Sir. We are in touch with our European partners and neighbours. One of the reasons
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  why the whole House, or nearly the whole House, agrees about the urgency of the matter is that that monitoring has shown that rabies is reaching perilously near the Channel coast. We have contingency plans. What we should have to do if there were any danger of this infection reaching this side of the Channel would be horrible. It would mean serious action against wild life in this country. The whole matter involves serious and grave action, but nothing so serious or so grave as the danger of hydrophobia and the spread of rabies in this country.
  Mr. Pardoe: Does the Prime Minister agree that the hon. Member for Harborough (Mr. Farr) was wrong in saying that four Ministers were involved? The number is five, because the Secretary of State for Northern Ireland is involved. Is the Prime Minister satisfied with a situation in which foreigners and residents of this country are being told all round the globe that it is quite easy to bring pets into this country through Ireland?
  The Prime Minister: Strong action will be taken against the smuggling of any possible carrier, or, as I think they say in the technical language, any vector. But I think that I referred to Northern Ireland. Co-operation between the Ministry of Agriculture and its counterparts in Northern Ireland, the Irish Republic, the Isle of Man and the Channel Islands is vital, and it is being thoroughly carried out.
  Dr. M. S. Miller: I thank my right hon. Friend for the action he has already taken in this respect, but may I impress upon him that what is needed is constant publicity about the killing nature of the disease, which can be passed on to people, even in epidemic forms, not merely by an animal bite, but even by licking by animals? The fox population of this country is also involved, and it must be eradicated. May I go further in this respect, and impress upon my right hon. Friend that it is necessary to have at all our airports and seaports indications to tourists going abroad that smuggling pets into this country will be treated with absolute severity?
  The Prime Minister: On the question of smuggling, I agree with my hon. Friend that the maximum publicity should be

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  given to this matter for the reasons he has given. I am grateful to the hon. Member for Harborough and others for what has been said—[Interruption.] This is an extremely serious matter. I only wish that sound broadcasting were now in operation so that Opposition Members could be heard barracking on the subject.
  I repeat that I am grateful to the hon. Member for Harborough for raising this matter this afternoon since it will assist in obtaining the necessary publicity. My hon. Friend the Member for East Kilbride (Dr. Miller) referred to the lethal character of this disease. We must also consider the terrible agonies involved. Anybody who has studied reports on these matters will know the situation and will not make light of it, as the hon. Member on the Front Bench is now doing. I must refer to one point because there may be some misunderstanding. My hon. Friend the Member for East Kilbride called for the eradication of all foxes. That is not in contemplation, but if rabies were to spread to this country, it would be necessary—and it would be a ghastly job—to eradicate the fox population.
  Mr. Onslow: On a point of order, Mr. Speaker. Since the Prime Minister made a deprecating reference to me—
  Mr. Speaker: I did not hear any such reference. I call Mr. Fairbairn on a Private Notice question.
  Mr. Onslow: Further to that point of order, Mr. Speaker. I do not think the Prime Minister would deny making that reference. If he seeks to deny it, I shall know what to think of him.
  The Prime Minister: Further to that point of order, Mr. Speaker. I do not deny making that reference. I was appalled by the frivolity of a so-called Front Bencher making light of a subject such as this.
  Mr. Onslow rose—
  Mr. Speaker: The frivolity of the Front Bench is not a question for the Chair.
  Mr. Onslow: Further to that point of order. As the Prime Minister should be aware that it was in my constituency that there was an outbreak of rabies in this
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  country, may I make plain to him that what infuriated me was the Prime Minister's trivialisation of this subject in an attempt to talk out Prime Minister's Questions.
  The Prime Minister: Further to that point of order. The hon. Gentleman's interruption was not about the horrible nature of death by rabies, but was some silly, frivolous remark to the effect that he was not enjoying my answers to Questions.
  Mr. Speaker: However that may be we now move to the Private Notice Question tabled by the hon. and learned Member for Kinross and West Perthshire (Mr. Fairbairn).

  PORTUGAL (BRITISH NATIONALS)
  Mr. Fairbairn (by Private Notice)asked the Secretary of State for Foreign and Commonwealth Affairs if he will make a statement on the seizure of Monte da Contenta house and farm and the expulsion of its British owners.
  The Minister of State for Foreign and Commonwealth Affairs (Mr. Roy Hattersley): I saw the Portuguese Ambassador this morning and raised with him the problems facing British farmers, and in particular the eviction of Mr. Wardle from his farm. He told me that he had spoken to the Minister of Foreign Affairs on the telephone and could assure me that the Portuguese Government were fully aware of the importance of this matter and that they would do everything in their power to give British subjects and their property proper protection.
  The House will recognise that there are difficulties in the internal Portuguese situation which the Government of that country may not be able immediately to overcome when dealing with problems of this sort. In the light of that reality, I reminded the Ambassador both of his Government's obligation to British nationals and their property and of the adverse effect episodes of this sort must have on Portuguese standing and economic prospects.
  Her Majesty's Ambassador in Lisbon called on the Deputy Foreign Minister

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  last night and on the Minister of Agriculture this morning and made similar representations. Her Majesty's Government will continue to press the Portuguese Government for a satisfactory outcome.
  Mr. Fairbairn: I am grateful for that reply, but will the Minister this afternoon confirm loud and clear that it is the firm and unwavering policy of the Government to protect inviolate the property, heritable or movable, at home or abroad, of British citizens from those who hold the law in contempt? Secondly, will he confirm that this latest expropriation of private property in Portugal contradicts the views expressed by certain Labour Members, and widely reported, that there is no threat to civilisation and law in Portugal from the Left? Thirdly, will he take all the steps he can to have the invaded property restored to its owners, to restore families to their homes, and to protect many hundreds of British and Portuguese citizens from the same fate at the hands of anarchists, under whatever banner they commit their crimes?
  Mr. Hattersley: I do not wish to enter into political points on this matter this afternoon, but I want to confirm that Her Majesty's Government will do all they can to protect Mr. Wardle and other families who have been treated in an unacceptable way in the last fortnight. I repeat that I avoid taking up the political points which the hon. and learned Gentleman raised, somewhat extraneously. However, I totally confirm that Her Majesty's Government will be robust in protecting British citizens and their property and that this will continue until Mr. Wardle and other families are satisfactorily treated.
  Mr. Torney: Does my hon. Friend agree that it is equally important to protect British farm workers from eviction in our own country since this is an event that often happens?
  Mr. Speaker: Order. That matter does not arise from the Question.
  Mr. Biggs-Davison: Will Her Majesty's Government keep in mind the security and rights of British persons and property in Portugal when considering with other Governments in the Community the extent and timing of aid to Portugal?
  Mr. Hattersley: Yes, Sir. The Community attitude towards aid to Portugal is clear and precise. Clearly, the Community wants to promote the interests of pluralistic democracy in Portugal. We want to see the sixth provisional Government of Portugal prosper and move in that direction. But we must be influenced by these matters. We are not at a point where we should reconsider what happened in Luxembourg some weeks ago. I believe that aid is desirable in a European and Portuguese context, but I fully understand the point made by the hon. Member for Epping Forest (Mr. Biggs-Davison).

ABORTION
The Secretary of State for Social Services (Mrs. Barbara Castle): With permission, Mr. Speaker, I should like to make, in association with my right hon. Friends the Secretaries of State for Scotland and Wales, a statement on abortion. Since March of this year a Select Committee has been considering the Abortion (Amendment) Bill of my hon. Friend the Member for Glasgow, Pollok (Mr. White). The Committee made nine recommendations in its Third Special Report to the House on 5th August, most of which follow up proposals made last year by the Lane Committee on the Working of the Abortion Act. I am glad to tell the House that the Government accept in principle all the Select Committee's recommendations.
My intentions, announced earlier this year, to strengthen the safeguards which apply to abortion in the private sector are similar to those recommended by the Select Committee. Action has already been taken following consultation with the medical profession with a view to requiring private nursing homes which concentrate on abortion to give me an assurance concerning the total fees charged to patients. Assurances have also been sought from all approved nursing homes about financial arrangements with referral agencies. Only those private nursing homes with adequate facilities will be authorised to carry out terminations of pregnancy after the twentieth week.
I have also written to those nursing homes which concentrate on abortion asking for information on the number of foreign patients treated during the 18

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months to 30th June 1975 and I shall be seeking such information from all approved nursing homes at quarterly intervals in future. I am reviewing the arrangements which are made by the nursing homes for the reception, counselling and after-care of foreign patients on the lines proposed by the Select Committee and I will require changes in these arrangements where necessary.
The Committee recommended that the Health Ministers should produce a list of approved bureaux and refuse to approve clinics which accepted patients from unlisted bureaux. We are proposing to implement this change shortly, and application forms have been issued to bureaux and agencies. I am, moreover, concerned to ensure that adequate counselling facilities are available for all women who indicate that their pregnancies are unwanted, and a draft paper as proposed by the Select Committee giving guidance on counselling will be circulated for consultation to bodies representing the medical, nursing and social work professions.
In the National Health Service the Select Committee's recommendation that terminations after the twentieth week of pregnancy should be carried out only in hospitals possessing appropriate facilities, including resuscitation equipment, have been accepted, and discussions have been held with regional medical officers who will be responsible for the implementation of the recommendations. I have issued a circular to health authorities on the report of the Peel Advisory Group on the Use of Fetuses and Fetal material for Research asking for the adoption of its recommended code of practice where not already in use and I put a similar requirement on private nursing homes.
Some of the other recommendations of the Select Committee will require amendment of the Abortion Regulations 1968. My Department is undertaking a study of the procedures and forms set out in the regulations as proposed by the Select Committee, and in the light of its report I shall be considering the whole question of the procedure for the certification and notification of abortions. Another recommendation which would require amending the regulations is to allow the disclosure to the General Medical Council of information taken from the notification to the Chief Medical Officers of the Health Departments. This recommenda-
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tion is accepted, and the regulations will be amended to permit disclosure to the President of the General Medical Council at his request.
A further change in the regulations recommended by the Select Committee is designed to ensure that the doctors who certify that the condition of the Abortion Act are met in a particular case should examine the patient. The regulations will be amended to ensure that a question asking whether the patient has been seen and an examination has been carried out will be put on all forms.
I think the House will be glad to know that action is being or has already been taken on all the recommendations made by the Select Committee in its Third Report and on many of the major recommendations of the Lane Committee. I have issued guidance on day care systems to health authorities and hope to authorise day-care services in some private clinics with a record of high standards. The most important preventive action which the Government have taken is to introduce as part of the NHS a comprehensive family planning service which started to function fully this summer. I can only regret that this was not introduced a decade or more ago.
During the Second Reading of the Abortion (Amendment) Bill in February 1975, a commitment was given by the Government that if the Bill were withdrawn the Government would propose the establishment of a Select Committee to examine and report on the proposals contained in the Bill and would also propose its re-establishment for the 1975–76 Session if this were necessary. In the event, the House did not allow the Bill to be withdrawn but instead committed the Bill itself to a Select Committee. Under this procedure the Bill and the Select Committee lapse at the end of this Session. The Government feel that the House, in the light of the Committee's reports already published and of this statement, should be given an opportunity to decide whether the Select Committee should be re-established as the Committee itself has requested, and a motion will be tabled early in the next Session.
Mr. Norman Fowler: We welcome this statement. Is the right hon. Lady aware that there is a strong feeling on both sides of the House that the Select Committee should continue its work and that

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that part of her statement will be particularly appreciated? Is the right hon. Lady also aware that there is very strong support both in this House and outside for any measures which will eliminate abuses?
I should like to take one further point from the statement. As the Secretary of State realises, many of us attach particular importance to the Select Committee's recommendation that every woman contemplating an abortion should receive proper advice on the dangers and the alternatives. Can the right hon. Lady give the House a little more detail on what she has in mind in this important new counselling procedure that she is proposing?
Mrs. Castle: On the re-establishment of the Select Committee, I think we all agree that it has done very useful work. The items now remaining for consideration enter into some of the basic points of controversy on which hon. Members will wish to consider whether the Select Committee could or could not produce useful advice to the House. Therefore, we propose to allow the House to decide whether it feels that the Select Committee's work should continue. As far as the Government are concerned, that will be on a free vote.
Regarding counselling, as I have said I shall be consulting organisations representing the medical, nursing and social work professions and a consultative group of regional health authority officers. We want to see that proper counselling is given in which the alternatives to abortion are made quite clear and to ensure that proper after-care, advice and counselling after a pregnancy has been terminated are provided.
Mr. James White: I congratulate my right hon. Friend on the speed with which she has moved on this matter. I should like her to know that many thousands of people throughout the country share my views. I am fed up telling people that there has been a great deal of dubiety about whether the Select Committee will meet again in the next Parliament. Again, the Government are keeping a pledge. This proposal will come before the House for us to carry on. What my right hon. Friend has already done will go a long way
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to clearing out some of the "rackets" in the medical world.
Mrs. Castle: I am grateful to my hon. Friend. He is absolutely right that the action that we have taken or are taking following the Select Committee's recommendations will deal with the abuses which have alarmed hon. Members on both sides of the House in the past and will make some important and far-reaching changes in the situation. I repeat that the re-establishment of the Select Committee is a matter for the House itself to weigh up. There are many factors to be weighed up. I should like to feel that hon. Members will be free to follow their judgment and consciences on it.
Mrs. Knight: Before the right hon. Lady brings before the House her proposals for tightening up the Act, will she consider withdrawing at once the directive to hospital boards not to employ junior and freshly qualified obstetricians unless they undertake to carry out abortion operations, since this is a grave invasion of their freedom to operate?
Mrs. Castle: I am sure that the hon. Lady is suffering from a misunderstanding of the situation. There is no such directive. I shall be happy to send her a copy of the Chief Medical Officer's letter on this matter. We have made it quite clear that doctors with a conscientious objection to abortion are not being exluded from working in the National Health Service, but we have also pointed out that the NHS is under an obligation to provide an abortion service as laid down by Parliament. It may happen that in some areas consultants normally dealing with abortion cases do so on behalf of colleagues who have a conscientious objection. When one of those providing a service which Parliament has decided should be provided moves away, if the service is to be continued it will be essential to ensure that the means exist of continuing the facilities.
I should point out to the hon. Lady that the Chief Medical Officer has been notified of only nine appointments made since 1st March this year in obstetrics and gynaecology and anaesthetics where there was a specification of the need for a willingness to carry out abortions. Only nine such appointments have been

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made out of a total of some 70 appointments which would normally be made in such a period. The ratio of nine appointments out of 70 still leaves an overwhelmingly large area for those with conscientious objections to continue to practise in the National Health Service.
Mr. Willey: Does my right hon. Friend realise that the members of the Select Committee will greatly appreciate her ready and prompt reaction to the recommendations that they were able to reach unanimously?
Mrs. Castle: I am grateful to my right hon. Friend, who has done an excellent job on the Committee, for his comments. I appreciate, too, the spirit in which the Opposition Front Bench has responded to my statement. It is important that we should cease to deal with these matters on a party basis.
Mr. Awdry: If the Select Committee is reconvened, will it consist of the members of the existing Select Committee?
Mrs. Castle: We think that this is a matter for the House. The motion will be considered by the House when the time comes.
Mr. Abse: Will my right hon. Friend be ready to acknowledge the thanks of a large number of people now that she has activated her Department, which has been so tardy in the past in dealing with abuses which are now revealed as being in existence and needing considerable attention?
The Select Committee, which has been able to reach unanimity on so many matters and to help my right hon. Friend, has expressed the opinion that there is a need for a Select Committee to be re-established to deal with matters such as conscientious objection and many other issues. If the Select Committee were not re-established, it would be regarded in the country as though once again an attempt was being made to sweep abuses and wrongs under the carpet.
Mrs. Castle: I am sorry that my hon. Friend has spoilt the harmony and atmosphere that was prevailing by that quite unfair allegation against my Department, because anyone who listened to the speech of my hon. Friend the Minister
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of State during the Second Reading debate on the Bill would have realised that we were already proceeding to act against abuses of which we were aware. But that does not prevent me from paying a tribute to the work of the Select Committee for continuing, as it were, to round up the abuses still prevailing in the private sector. I pay a tribute to my hon. Friend's work in the Select Committee, but I shall not accept his indictment against my Department. As for the re-establishment of the Select Committee, I think that my hon. Friend's remarks were really appropriate to that debate.
Mr. Jessel: May I remind the right hon. Lady that in February the Abortion (Amendment) Bill was given a Second Reading by a large majority of 115 and that there is no evidence that the opinion of the House has changed substantially since then? Apart from the possibility of reconvening the Select Committee, what action does the right hon. Lady propose to take to give effect to the wishes of the House?
Mrs. Castle: I do not know what my statement has been about if it is not about the steps that we have taken, without any delay, to give effect to the recommendations of the Select Committee with regard to abuses of the abortion legislalation.
As for the support of the House for the continuance of the Select Committee, that is a matter that we shall discover when the motion is debated, because it could well be that some Members will feel that the action taken on the Third Report of the Select Committee is the answer to the anxieties that they had when they voted as they did on Second Reading.
Mrs. Renée Short: May I ask my right hon. Friend exactly what her statement about the number of foreign women coming into this country for abortion implies? Is she aware that, according to the figures given to me recently by her hon. Friend the Minister of State, it is clear that there has been a dramatic reduction in the number of foreign women coming to Britain because of the more liberal abortion laws in France and elsewhere?

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Secondly, can my right hon. Friend say exactly what is intended to be done for women who present themselves after 20 weeks for a termination of pregnancy? Very often these are women who do not seek advice early in pregnancy, they are unable to take proper contraceptive care and there are also medical conditions that present themselves after 20 weeks of pregnancy. If my right hon. Friend means that they must all be dealt with in National Health Service hospitals, is she prepared to give a guarantee now that facilities for women to have a termination of pregnancy operation will be made available in every region in the country? Is she aware that one of the major abuses is that in many regions women are not able to get the termination of pregnancy to which they are legally entitled? This is an abuse which needs urgent attention.
Mrs. Castle: My hon. Friend is right in the first part of her question. There has been a dramatic fall in the number of foreign women coming to this country for an abortion. In 1974, about 51,000 abortions were performed on women resident outside the United Kingdom, which represented a fall of about 10 per cent. on the 1973 figures. In the first eight months of this year there has been a decline of about 30 per cent. on the figures for the corresponding period in 1974. I think that my hon. Friend is right also in saying that this is connected with the more liberal abortion laws obtaining overseas. On a recent official visit to France one found almost open recognition of the changes that were taking place as a result of the alterations in the abortion law in France.
I also agree with my hon. Friend that there are areas of the National Health Service where facilities provided by Parliament under this legislation are not available. This is connected with my earlier reply about doctors and conscientious objections. I should like to see a more uniform and better coverage of provision in the National Health Service, which is one of the Lane Committee recommendations, because this would reduce dependence on the private sector which has been the source of abuse.
Mr. McNamara: I congratulate my hon. Friend and the Government on their
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decision to bring back to the House the question whether a Select Committee should be established. Whatever views individuals may have on this issue, it is right that this matter should be decided by the House on a free vote, and my right hon. Friend is to be congratulated on what she proposes to do.
Is my right hon. Friend aware that, as a member of the Select Committee, I paid particular attention to the question of counselling and the provision of counselling facilities? It is most importand that my right hon. Friend should not only lay down procedures but should ensure that there is adequate training and that all the facilities and alternatives are known not only to patients but also to those who are giving the advice.
Mrs. Castle: I am grateful to my hon. Friend for his congratulations to the Government, and I pay tribute to his work on the Select Committee. He is right in saying that counselling is an important part of this procedure, and, as I said in an earlier reply, counselling will include the full presentation of alternatives that are available. With regard to my hon. Friend's suggestion that this should involve careful training, I hope that this is one matter that will be dealt with effectively and helpfully in the consultations that I am having with organisations representing medical, nursing and social workers.
Mr. Goodhew: When the right hon. Lady says that the reconvening of the Select Committee should be left to a decision of the House by a free vote, does she mean a genuine free vote on this issue or the sort of so-called free vote that we had on the Murder (Abolition of Death Penalty) Bill when the Labour Party was whipped through the sponsor's Lobby by the then Government Chief Whip, the present Leader of the House?
Mrs. Castle: I think that the record of this Government in recognising that a sensitive subject is a matter for individual conscience is unparalleled. I think that once again the hon. Gentleman is unfairly and unnecessarily trying to stir it up, especially when one remembers the free vote that was fully operational on our side of the House for the Second Reading of the Bill.
The Lord President of the Council and Leader of the House of Commons (Mr. Edward Short): On a point of order, Mr. Speaker. What the hon. Member for St. Albans (Mr. Goodhew) has just said is utterly untrue.
Mr. Goodhew: I assure you, Mr. Speaker, that I was a Teller in the Lobby on one occasion when the right hon. Gentleman cleared the Lobby and whipped hon. Members through it.
Dr. M. S. Miller: As a member of the Select Committee, may I congratulate my right hon. Friend the Secretary of State on the alacrity with which she has acted on our recommendations? Does not this indicate that the area of abuses of the Abortion Act 1967, which quite rightly agitated the House and the country, has now been cleared for action by her Department? I commend her for repudiating the allegations made by the hon. Member for Birmingham, Edgbaston (Mrs. Knight) about directives to doctors. If I believed that directives of the kind the hon. Lady mentioned applied, I should be extremely concerned. When my right hon. Friend considers abuses of the Abortion Act—and there have undoubtedly been abuses—will she take into account the abuses to which my hon. Friend the Member for Wolverhampton, North-East (Mrs. Short) referred, namely, abuses of an Act of Parliament because many women in this country cannot take advantage of this legislation because of the attitude of some members of the medical professions?
Mrs. Castle: I am grateful to my hon. Friend for his generous remarks about the speed with which we have acted. We have acted with speed because throughout it has been our policy to deal with these abuses vigorously and comprehensively. We had already proceeded against a number of the abuses, but undoubtedly the work of the Select Committee, on which my hon. Friend played a distinguished
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part, has helped us to complete the work. I am confident that in the list of measures I have announced there will be a comprehensive and effective attack on those abuses, which will be eliminated.
I am grateful to my hon. Friend for his remarks about doctors with conscientious objections. He is right. It would be intolerable if directives of the kind which the hon. Member for Birmingham, Edgbaston (Mrs. Knight) insinuated were to be issued. My Chief Medical Officer would be the last person to agree with them.
I agree with my hon. Friend the Member for East Kilbride (Dr. Miller) that there are areas in the National Health Service in which women are unable to obtain the facilities provided for by Parliament, and many of them have been driven to the private sector. In difficult circumstances I shall do my best to provided a uniform service.

QUESTIONS TO MINISTERS
Mr. Geoffrey Finsberg: On a point of order, Mr. Speaker. I should like your guidance on the fact that at 12 noon today a 12-page statement was issued by the Secretary of State for the Environment and that Written Question No. 107, which was an arranged Question, appeared for Written Answer at 3.30 p.m. today. Is that in order? If it is in order, is it not a gross contempt of the House?
Mr. Speaker: It is certainly in order. I do not believe that it is a contempt of this House. It is not a matter for the Chair.

STATUTORY INSTRUMENTS
Ordered,
That the Electrical Equipment (Safety) Regulations 1975 (S.I., 1975, No. 1366) be referred to a Standing Committee on Statutory Instruments.—[Mr. Edward Short.]

ORDERS OF THE DAY
  SCOTTISH DEVELOPMENT AGENCY (No. 2) BILL [Lords]
  As amended (in the Standing Committee), considered.
  SCOTTISH DEVELOPMENT AGENCY (No. 2) BILL [Lords]
    New Clause 1

      THE AGENCY AND THE MEDIA
      "Section 9 of the Industry Act 1975 (the Board and the media) shall apply to the Agency as it applies to the National Enterprise Board with the substitution of a reference to section 5 of this Act for the reference in the said section 9 to section 3 of that Act."—[Mr. Millan.]
      Brought up, and read the First time.
      4.5 p.m.
      The Minister of State, Scottish Office (Mr. Bruce Millan): I beg to move, That the clause be read a Second time.
      During the passage of the Bill in the other place, we were asked whether it was our intention to insert into this Bill a similar provision to that which had been included in the Industry Bill with regard to the National Enterprise Board and the relationships of that body and the agency to the newspaper or television industries. This has implications for the freedom of the Press.
      In the other place my noble Friend the then Minister of State made it clear that employment grounds were the only justification for the Scottish Development Agency being involved in the news media. He said that the necessary clause would be put in the Bill to make that clear. This new clause applies to this Bill, with the clause in the Industry Bill, the necessary changes.
      In order to explain what the new clause does, I must explain the corresponding clause in the Industry Bill. It is rather a long and complicated clause, although its basic intention is clear enough. It is that the Scottish Development Agency should not be involved with newspapers or television companies, with certain reservations or qualifications. Clause 9(1) of the Industry Bill ensures that the Agency and any subsidiary of the Scottish Development Agency is prevented from setting up business to publish
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      newspapers, magazines or other periodicals and from contracting as a television contractor with the Independent Broadcasting Authority. However, subsection (2) contains the reservation that the Agency will be able to establish periodicals wholly or mainly concerned with its activities. Therefore, journals or other similar magazines will be permissible.
      Subsection (3) prevents the Agency generally and its subsidiaries from acquiring share capital in companies or groups of companies that are substantially engaged in the media activities which I have already mentioned. However, subsection (4) allows the Agency to acquire share capital in such companies if directed to do so under Clause 5 of this Bill, under the selective assistance procedure of the Industry Act 1972, which the Agency would operate under the specific direction only of the Secretary of State for Scotland.
      I should make it clear that the Agency could be involved with newspapers or television, but it would be on the basis of a specific direction using the powers of the Secretary of State to give that direction. It would be done by making use of the selective assistance provisions of the Industry Act, 1972. A further subsection of the clause in the Industry Bill provides that if incidentally the Agency or its subsidiaries acquired share capital they would have to use the power of that share capital in a way which ensured that they disposed of the business as soon as practicable. It is not possible to make that an absolute provision because there may be circumstances in which the Agency, if it acted precipitately, would unwittingly damage an innocent publication. There are provisions in the clause to provide a reservation for that circumstance.
      There are similar provisions in the clause, which I need not outline, which are directed basically to the same kind of objective. I hope that hon. Members who have read the appropriate clause in the Industry Bill will accept that the clause is adequately and rather tightly drafted from this point of view. If the Agency were involved in a company publishing a newspaper or in television, it would be specifically prevented by the clause from exercising its power other than on financial or commercial grounds.

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      In other words, it is specifically prevented from using its power to influence editorial opinion. That is one of the basic purposes of the clause.
      I have explained the general position, but plainly there is a particular example, the Scottish Daily News, which is very much in our minds and I should like to say a few words about it without, I hope, opening up the whole question which I shall be delighted to have fully debated in the House on some other occasion. I hope that it is clear from what I have said that there will still be provision after the clause is passed for the present Government or any other Government in appropriate circumstances to help a newspaper business in Scotland by loans or grants through the Scottish Development Agency or by selective assistance under the Industry Act. That is not prohibited by anything proposed in the clause. If the Bill had been an Act when the question of the Scottish Daily News arose earlier this year, nothing would have prevented the Government from behaving exactly as they did, because what they did was done under the powers of the selective assistance available in the Industry Act 1972.
      I have very little to add to what the Prime Minister said in answer to a Question this afternoon, namely, that steps are being taken for a provisional liquidator to be appointed. There was a meeting this morning at which Mr. Whitton, who is to be nominated as the provisional liquidator, was present, together with members of the executive council of the Scottish Daily News and the Prime Minister and other Ministers, including the Secretary of State and myself. It will take a day or two for the position to be clarified, but when the provisional liquidator is appointed—and that is a matter which may go through the court today—he will need a few days in which to make his own assessment of the situation and he will then no doubt be in touch with creditors, including the Government, as he is legally obliged to do.
      I should make one point without trying to anticipate what the liquidator may wish to say, because it would be improper for me to do that. The general legal position in a matter of this sort is that the business can be carried on if the liquidator takes the view that it is in the interests of the creditors that that should happen.
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      Whether he will take that view and, if he does, for how long and in what circumstances he would wish to carry on the business are matters for the liquidator The work force has said that it is very anxious that the newspaper should be carried on and that it will give the liquidator every possible assistance towards that end.
      The Government are creditors and have a general public interest rôle in this matter. Therefore, I have already made contact with the provisional liquidator and had a talk with him. When he has assessed the situation, it will be for him to decide whether he wishes to put any proposal to the Government. Anything that he puts to us will be carefully considered.
      Apart from matters of order, I am reluctant to say more than that, but I thought that that preliminary statement would help the House. I am reluctant to say anything which might make the task of the work force and the liquidator any more difficult than plainly it will be, but in this rather unhappy situation, particularly over the next few days, I hope that all of us will remember that a substantial number of jobs are involved at the Scottish Daily News. There is some responsibility on us to remember that we should not do or say anything which might make the situation even more difficult.
      4.15 p.m.
      Mr. Malcolm Rifkind: The Opposition in general strongly welcome the new clause as being an improvement on the Bill. In Committee the Opposition continually stressed the new and unprecedented power being given to the Scottish Development Agency and its parent board, the National Enterprise Board, creating a grave risk of abuse in a series of areas affecting the public interest. Broadcasting is one of the most important of them, and for that reason we welcome the clause.
      However, an additional reason why we welcome the clause is that today gives us the first opportunity to consider the details of the clause in relation not simply to this Bill but to the Industry Bill. The clause did not appear in the original Industry Bill. It was not presented during the Committee stage of the Industry Bill. Only during the Report stage as recently as 1st July did the House have the opportunity of considering the matter. In fact,

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      that is an exaggeration because even on 1st July the House did not have the opportunity to consider it due to the Government's decision to apply the guillotine to the Industry Bill. We have had no opportunity to debate before today the vitally important question of the control or possible influence of the Scottish Development Agency or the National Enterprise Board on the media.
      Despite the lack of debate on 1st July when the clause was presented during consideration of the Industry Bill, as many as 66 hon. Members opposite chose to vote against it—
      Mr. Dennis Canavan: Hear, hear.
      Mr. Rifkind:—including the hon. Member for West Stirlingshire (Mr. Canavan). On that occasion we did not hear why they opposed the clause, the sole purpose of which was to prevent a non-elected body from being able to control or influence a vital organ concerned with freedom of speech. We shall be interested to see whether the same 66 gallant defenders of freedom of speech today divide the House in opposition to the Government.
      In particular, I await to hear the views of the hon. Members for West Stirlingshire, Central Ayrshire (Mr. Lambie) and South Ayrshire (Mr. Sillars), three of the 12 Scottish Labour Members who voted against the clause when the House considered the Industry Bill. We wonder whether they will be consistent in their opposition and divide the House again, this time perhaps giving us the benefit of hearing their reasons for doing so. If they choose not to do so, we shall be anxious to hear why their views have changed in the short time which has elapsed since 1st July. Those three hon. Members in particular have a duty to the Government, to the House and to their electors to say why they opposed the clause when the Industry Bill was considered but, unless they divide the House today, support its inclusion in this Bill.
      Although in general the National Enterprise Board and the Scottish Development Agency are to be prevented from initiating new opportunities in journalism or acquiring shares in existing broadcasting or journalistic operations, in a situa-
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      tion in which financial help was deemed to be necessary by the Secretary of State, it will be possible for the SDA or the NEB to acquire a proportion of share capital in newspapers or other media in Scotland. I ask the Minister of State to clarify the criteria which will determine whether the NEB or the SDA should exercise such a power. This is yet another example of the obscure and unnecessary duplication involved in the parallel presence in Scotland of the NEB and the SDA.
      The Minister indicated that there might be occasions when it was necessary for part control in newspapers to be acquired by the Government. What criterion would determine whether the Scottish Office or the Department of Industry would exercise that right? The Government may exercise their power to give financial assistance to a newspaper, or to enable the Agency acting on the Government's behalf to acquire partial control of the newspaper's share capital. The Minister correctly said that normally the Government would be required to dispose of that interest as soon as practicable. Under the terms of the Industry Bill the Secretary of State may allow the National Enterprise Board or the Scottish Development Agency not to dispose of an interest in the share capital of a newspaper if, without such a direction, serious commercial injury would be caused to any newspaper, magazine or periodical.
      That begs certain questions. We presume that the power to acquire share capital would be used only if the newspaper experienced a serious commercial problem. Is the Minister saying that if, in the exercise of these powers, the Government gave financial assistance to a newspaper in Scotland, the Scottish Development Agency could continue to own, control or have a major influence in the affairs of the newspaper until the commercial problem, or the financial difficulties which formed the original reason for the Government intervention, has disappeared? If that is the Minister's argument, it makes a mockery of the provision requiring the Agency to dispose of its interest as soon as reasonably practicable.
      The Minister is duty bound to explain in what circumstances the Secretary of State would be entitled to direct the

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      Agency to continue to control a significant degree of the share capital of a newspaper.
      The Minister said that we were not discussing this question in a vacuum. The Scottish Daily News is now experiencing its death throes. Unless there is a dramatic change in Government policy it is highly unlikely that the Scottish Daily News will be able to survive. It is not adequate for the Minister to say that if the powers which he now seeks had been contained in legislation earlier this year the Government might have acted in the same way.
      If the discretion exercised by the Government earlier this year in relation to the Scottish Daily News appears to have such pointless consequences, and if it has not ensured the survival of the newspaper in Scotland, does this not question the basis whether financial help by the Government to any newspaper can be in the public interest? Is the Minister satisfied that the grant of a loan of £1·2 million to the Scottish Daily News earlier this year ensured that the public interest was properly protected? If at that time the Government were satisfied that this newspaper was viable, do the Government believe that their opinion has been proved to be correct? Were they wrongly informed about the financial viability of the Scottish Daily News? If so, when will the House be informed of the facts? If the Government were correctly informed, has the Government's judgment been shown to be sadly lacking? If the Scottish Daily News is on the verge of extinction, does that not suggest that the Government, in the exercise of their discretion, boobed or made a mistake in loaning public money to the newspaper? A proper evaluation at the time might have shown that that was not a reasonable way in which to use public money.
      Mr. Iain MacCormick: Does the hon. Gentleman say that it is wrong for the Government to take risks in giving away such sums of money? If the Scottish Daily News is about to fold up, that might be the result of what happened since the loan was granted rather than have anything to do with the basic grounds on which the Government decision was made.
      Mr. Rifkind: The hon. Gentleman highlights the problems. Were the Gov-
      262
      ernment advised? Was advice available to the Government from the various sources which made their views known at the time ovewhelmingly to the effect that this newspaper could survive as a viable entity if only the money was loaned to it? At the time it was apparent to those who read the viability report on the Scottish Daily News that the advice was to the contrary. The Government took the decision in conflict with that advice and must now meet the consequences.
      The hon. Gentleman says that the present events occurred as a result of what has happened since the money was loaned. That forms an important aspect of the problem. However, it does not detract from the Government's responsibility to satisfy Parliament and the electorate that in going against the advice of those who studied the subject the Government endangered public money and may still be doing so.
      The Government announced that there was to be no further financial help to the Scottish Daily News. Does that represent the continuing position of the Government? Many of us were surprised at the decision of the Prime Minister to meet members of the staff of the Scottish Daily News. We do not object to that in principle. However, we wonder what is the purpose behind that. Was that meant to be a public relations exercise? If so, is that not the worst form of cruelty to the hopes and aspirations of those who work in the Scottish Daily News? If that is more than a public relations exercise, and suggests a willingness by the Government to contemplate a change of their publicly announced policy, the Government must inform Parliament that they have an open mind on this question, that they are prepared to be convinced if the evidence is there, and that they would be willing to give extra financial help to the Scottish Daily News by means of either the Scottish Development Agency (No. 2) Bill or other legislation. The Government gave us no information. The Prime Minister's answer did not clarify the point. Will the Minister explain the position of the Government and whether a final decision has been taken or whether the Government continue to have an open mind on this subject?
      Mr. Deputy Speaker (Mr. George Thomas): Before calling other speakers, I must explain that I am in a difficulty. I understand that the Minister referred to a newspaper. That is why I allowed the hon. Member for Edinburgh, Pentlands (Mr. Rifkind) to develop his argument at length. However, my common sense tells me that that is an illustration of what is involved in the clause, rather than the main debate being centred on the subject of the Scottish newspaper.
      Mr. J. Grimond: I am sure that we shall respect your ruling, Mr. Deputy Speaker.
      However, perhaps I might be allowed a passing remark on the Minister's comment on the Scottish Daily News. I promise to be brief. I wish that newspaper well. The more newspapers there are in Scotland, the better. If it proves to be a success, I shall be pleased. However, the Government were warned that the industry was generating enormous cost for itself. They were warned that the newspaper would probably fail.
      We are constantly told that there is a dire need for effective investment. One reason why we are short of investment is that our savings, whether Government or private, are often wasted. There is no point in investing money unless it is invested in enterprises which yield profit and benefit. This newspaper will most likely provide an example where that will not occur.
      The Minister spoke of the relationship of these Development Agency advisory boards to broadcasting, radio companies and the Press. He said that the Government would not interfere with editorial policy. The accepted wisdom is that proprietors should not interfere with editorial policy. As a trustee of The Guardian, I accept that view up to a point. It would be monstrous if proprietors or those who invested in the media constantly interfered with the editor in the day-to-day functions he has to perform. It would also be monstrous if, like Pontius Pilate, they washed their hands and said that whatever the broadcasting company or newspaper did was no concern of theirs.
      4.30 p.m.
      In general, I am against totally divorcing finance from any responsibility for the conduct of the business in which it is invested. In the Press that is of particular
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      importance. Anyone who invests money in the Press thereby puts a stake in it to get something out of it. A proprietor of a newspaper has a delicate job. He has to keep clear of day-to-day interference, but if editorial policy ever becomes Fascist, Communist, libellous, irresponsible or takes to cheque-book journalism he cannot say "That is nothing to do with me".
      There is a point at which proprietors must be held responsible, and those who invest large sums of money must also be held responsible. It is difficult to judge. It is time that someone at least questioned the conventional wisdom that Press proprietors who are trustees, like myself, Press Lords and nationalised corporations can be exempted from all responsibility for editorial policy.
      That aspect is particularly important where Government money is involved as it is here. Government money carries with it different implications. I ask the Government to put this specific point to the Royal Commission on the Press which is now sitting. The Commission will consider whether it is proper for Government money to be put behind the Press and it will consider editorial responsibility, but I should like the attention of the Commission to be drawn to this explicit power and I should like the Commission to be asked what code of conduct should govern the National Enterprise Board or any similar body when it puts substantial sums of money into a broadcasting company, a television company or the Press.
      Mr. Canavan: The clause is an attempt to transpose into the Bill a new clause which was inserted in the Industry Bill. I question the legality of referring in the clause to the Industry Act 1975 when the Industry Bill has not yet been passed, although some of us hope that it soon will be, even in mutilated form.
      The Government's logic seems to be that because the National Enteprise Board is precluded from taking share capital in media concerns, the Scottish Development Agency should likewise be precluded from so doing. The logic seems to be that what is sauce for the goose is sauce for the gander, but the Government have a duty to find a far better justification than that.

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      The new clause to which I refer in the Industry Bill was sneaked in on 1st July. I do not often agree with the hon. Member for Edinburgh, Pentlands (Mr. Rifkind), but there was no debate on the new clause and its acceptance without debate was one of the unfortunate results of the timetable motion. Hon. Members were trundled down from all over the place, not knowing what they were voting for. They followed the Whips' advice and went into the Lobby. On that occasion 68 hon. Members, including myself—all Labour Members—had taken the trouble to read the new clause before voting and had registered an objection to it.
      The argument in favour of the new clause appears to be the fear that Government financing of media concerns automaticaly means Government or even party domination or bias. But surely it it possible for the clause to be reworded to guarantee editorial freedom. I believe in the editorial freedom of the Press and in freedom of expression. If democracy is to survive, freedom of expression must be maximised.
      Within the last week we have heard a great deal about the freedom of the Press. Last Thursday in this House we had a debate on that subject and yesterday in the House of Lords there was a debate about the freedom of the Press with particular reference to a clause in the Trade Union and Labour Relations Bill. It is all very well for Opposition Members to decry what they see as a lack of freedom because of the possibility of a closed shop in the National Union of Journalists, but the biggest threat to the freedom of the Press anywhere, particularly in Scotland, is a decline in the number of newspapers, especially those which have a wide circulation.
      Over the years there has been a marked decline in the number of popular daily newspapers published in Scotland because of the failure of private enterprises which run the newspapers. As a result of mergers, certain people have a monopoly in the expression of opinion. No doubt Opposition Members say that the private proprietors of the Press do not interfere with editorial freedom, but the system works in a more subtle way than that.
      There may have been occasions in the past when Beaverbrook and other Press barons of yesteryear went into the editor's
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      room and said "You will not print that story on the front page; you will print this one", or "Take out that sentence and insert this one instead". It is done in a more subtle manner now. The editor knows the political views of his proprietor or proprietors and he says to himself "For the sake of my own career, I had better not put this slant on the story". One would be naive to imagine that that does not occur right the way through from the most junior journalist to the most senior.
      In talking of the freedom of the Press, whose freedom are we referring to? Are we talking about the freedom of the proprietors or the freedom of the advertisers? When an editor decides what to print or what not to print, one criterion he uses is whether it will or will not please the advertisers. He asks himself whether the newspaper is in danger of losing thousands or possibly millions of pounds per year in advertising revenue if he puts a story into print.
      Mr. Deputy Speaker: Order. I am trying to be as generous to everyone as I was at the beginning. I hope that the hon. Gentleman will not widen the scope of the debate over the whole field of advertising, which is hardly involved in the new clause.
      Mr. Canavan: Yes, Mr. Deputy Speaker, I was about to move on. It is a misconception by Opposition Members that Government financing of the media automatically involves the Government in the nitty-gritty editorial decision-making of a newspaper. I do not accept that at all. Governments of various hues have introduced legislation providing Government finance in areas as diverse as industry, sport, education, tourism and the arts. A precedent has already been established in the media through the BBC. It is a public corporation with a certain amount of governmental control, with governmental revenue-raising powers. Why should not that principle be extended to newspapers?
      I make a brief reference to the Scottish Daily News which the Minister has mentioned. Here I declare an interest. Along with many other people, most of them ordinary Scottish working people, I put my hand into my pocket to help get that newspaper off the ground. I have £25 worth of shares in the Scottish Daily

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      News. I would like to see the paper survive, not just because I want my shares to survive but because I care about the workers' interests and the interests of the Scottish public. The Government have helped a great deal with a £1·2 million loan. Conservative Members may think that this is money down the drain, but it was not a public handout. It was a Government loan and as such it is recoverable on the collateral of the building.
      The Scottish Daily News has, contrary to some opinion, achieved a lot in less than six months. Normally it takes at least a year to get a newspaper established. It would probably take longer in today's economic climate. It is a tribute to the workers in the Scottish Daily News that they have managed to double the newspaper's circulation and treble its advertising since it went tabloid a few weeks ago.
      There are 531 jobs at stake on this newspaper. But it is not only the jobs which concern me. These workers, in my opinion and in the opinion of hundreds of thousands of readers in Scotland, are doing a good job. They are producing a good newspaper. Earlier I spoke about the diminution, not only in quality but in quantity, of the Scottish Press. It is worth remembering that there is only one other popular newspaper in Scotland which is printed, published and entirely produced in Scotland. Therefore, it is not simply jobs that are at stake; it is freedom of the Press and the variety of expression among organs of the Press in Scotland.
      This clause precludes the possibility of the Scottish Development Agency investing in a venture such as the Scottish Daily News. If the Government cannot help the News by way of either investment or loan, it is obvious that some shark may come along and take the paper over. That will be one more paper which, instead of being controlled by the workers and consumers, will be in the hands of private enterprise, possibly in the hands of someone who seeks to manipulate public opinion. Let us not kid ourselves. There are people like that who use proprietorship of the Press in an irresponsible manner.
      Mr. Hamish Gray: The hon. Gentleman said that there was only one paper wholly produced in Scotland—
      Mr. Canavan: One popular paper.
      Mr. Gray: I disagree. Those of us who sit for northern constituencies are aware that the Aberdeen Press and Journal is one of the leading papers in the Highlands. I have no interest to declare. It is worth noting that that newspaper has a circulation more than the combined circulation of the Scotsman and the Glasgow Herald. Although it may not be popular in the eyes of the hon. Gentleman, it is a highly popular paper in the area in which it circulates. The hon. Gentleman should not—
      Mr. Deputy Speaker: Order. I think that I am the most neutral person on this question. This argument can hardly arise out of this clause. Perhaps the hon. Gentleman should return to the Bill.
      Mr. Robert Hughes: May I get in on the act and say what a good paper the Press and Journal is? Surely the point is that it is not a national newspaper and that it has not got an all-Scottish circulation.
      4.45 p.m.
      Mr. Canavan: I was about to explain that to you, Mr. Deputy Speaker. As a Welshman you may not know that the Press and Journal, be it good, bad or indifferent, could not be described as a paper which is circulated throughout the whole of Scotland. The Scottish Daily News, although produced in Glasgow, not only goes up to Aberdeen; it goes to the Borders, the Western Isles and so on. I apologise if the hon. Member for Ross and Cromarty (Mr. Gray) misunderstood me. That was what I meant when I said that there was only one other popular daily newspaper in Scotland covering virtually the whole of Scotland.
      Like myself, the hon. Member for Pentlands checked up on the voting records for 1st July. I have looked at the names of those who registered a protest against the insertion of this clause in the Industry Bill. It is interesting to note that out of the 68 persons who did so, including two Tellers, there were only 12 Scotsmen. Those 12 Scottish apostles are all members of the Labour Party.

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      I hope that we shall show a consistency this afternoon by not accepting this new clause. I hope that the Minister will take it back and try to reword it so as to guarantee editorial freedom without precluding the possibility of an investment by the Scottish Development Agency in any part of the media. What is at stake here is first of all the employment prospects for those involved and secondly the opportunity for wider expression of opinion to Scottish readers. By opposing this new clause, we shall help to ensure the right to work among Scottish newspaper workers and at the same time we shall be fighting for freedom of expression in the Scottish Press.
      Mr. James Sillars: I shall be as consistent as my hon. Friend the Member for West Stirlingshire (Mr. Canavan) and I shall oppose the new clause. I do not see the Scottish Development Agency as an instrument of benevolent capitalism operating in Scotland to pick up the odd newspaper that runs into trouble, help restore it to good fortune and economic health and then hand it back to private individuals who are, in the strict literary sense of the term, irresponsible in that there is no public accountability or responsibility for the editorial policy which a newspaper insists on pursuing.
      I see no danger in the Agency not being lumbered with the inhibitions with which the Industry Bill will lumber the National Enterprise Board. I can understand the apprehension of any hon. Member about the Press or any other part of the media falling under what is called State bureaucratic control—when faceless men and the State Government machine issue the editorial orders and editors and journalists fulfil those orders whether or not they want to. If we look at the Bill, and indeed at the Trade Union and Labour Relations Bill—I am not quite sure where that is at the moment—it will be seen that there are safeguards. Clause 2(2)(f) says that one of the functions of the Agency shall be the promotion of industrial democracy in undertakings which the Agency controls.
      I believe it would be a good thing for the media if the Scottish Development Agency assisted in the promotion of industrial democracy in the Scottish Press as part of its operation. I do not
      270
      see how any of my hon. Friends could object to that. The alternative is that we continue with the Press in private hands but give the people the right to determine how many newspapers shall circulate in Scotland, the quality of those papers and their editorial policy. In effect, we shall give them the right to take over the Scotsman, the Glasgow Herald or the Daily Record, for example.
      It may not be within the ken of some hon. Members, but according to my information the Daily Record could be vulnerable in the years that lie ahead. I understand that the holding company has taken property from the Daily Record and Sunday Mail and transferred it to another company, taking away an important capital asset. If the paper ever runs into difficulty in future it will have no capital in the bank to see it over a difficult period. What would happen in those circumstances? Would the Agency intervene to shore up the paper, put it back on its feet and then be forced to hand it back to some other private entrepreneur who will in due course present the paper with the same problems?
      Mr. Robert Hughes: A loan to a newspaper to allow it to continue means that it will remain in private hands and will never be held in public hands.
      Mr. Sillars: I think that my hon. Friend has made a valid point. I hope that it is reported in the Aberdeen Press.
      There is an important safeguard in Clause 4—namely, the power of the Secretary of State to give the Agency directions. There is power for the Secretary of State to give not only general but specific directions. Therefore, if the Agency ran amok in the Scottish newspaper industry there is sufficient power, either here or in the Scottish Assembly, to ensure that it behaves itself in a proper democratic manner. We need not fear State control given that safeguard.
      I remind my Front Bench that the Labour Party has a commitment within its manifesto to encourage the development of co-operative enterprises. I believe that the Agency could do a magnificent job in the advancement of democracy where it matters most—namely, where opinions are conveyed from the opinion makers to the ordinary citizens. I shall oppose new Clause 1.
      Mr. Millan: I hope that if my hon. Friend the Member for South Ayrshire (Mr. Sillars) opposes new Clause 1 he will do so on the basis of what the clause seeks to do and not on his interpretation of it. I believe that my hon. Friend misunderstands what the clause does. It does not invite the Scottish Development Agency to take up newspapers which might be in financial difficulty, put them back on their feet and then return them to private enterprise. The clause does not allow the Agency to pick up newspapers in the first place, as I have already tried to point out. The clause, for reasons which I shall explain again, would prevent the Agency becoming involved directly in the kind of rescue operation which my hon. Friend has described, whether or not at the end of the day there was to be a return of the enterprise concerned to private enterprise. I believe that my hon. Friend misunderstands the purpose of the clause.
      I have already said that nothing in the clause prejudices in any way Section 7 of the Industry Act 1972, which allows selective financial assistance to be given to a newspaper enterprise in the same way as to any other enterprise. That does not arise from the legislation of the present Government; that is what is contained in the 1972 Act. Section 7 applies to newspaper enterprises in the same way as it applies to any other enterprise. There is nothing in the clause which in any way diminishes the powers of Section 7 of the 1972 Act.
      Far from the Government being in favour of the power of selective assistance being used in a way which would mean that private enterprise would be rescued when it was unprofitable and then passed back to private enterprise when it was profitable once more, what will be the Industry Act 1975 specifically amends the 1972 Act in a way which means that the legislative provisions in the earlier Act, which provide that any equity taken up in the form of selective assistance shall be disposed of as soon as possible, will be eliminated. Therefore, there is no question of the Agency doing what my hon. Friend obviously fears. Nor is there any question of that being done by the exercise of selective assistance under the 1972 Act. The kind of transaction to which my hon. Friend is opposed—and
      272
      I share his opposition—is eliminated by the amendments to the 1972 Act which will be contained in the new 1975 Act, which is still before the House. I hope that my hon. Friend will accept that statement of the position. If he wishes to oppose the clause, I hope that he will do so for rather different reasons.
      Mr. Sillars: I am extremely grateful to my right hon. Friend for the technical correction, but it is a narrow point. It is important that the Agency should be able to intervene.
      Mr. Millan: With respect, I do not think that I have made a technical point. As I have already said, the Agency can be involved in selective assistance generally—this applies to a newspaper as well—by means of a direction given by the Secretary of State under Clause 5 that selective assistance in any particular case may be carried out by the SDA as an agent of the Secretary of State rather than directly by the Secretary of State himself.
      Why is it that we are adopting this way of proceeding? Why is it that we are saying that the Agency, which will be financed directly by the Government, should not be involved of its own volition in the acquisition of share capital in newspaper production or television broadcasting? The simple answer is that important questions of editorial freedom are raised.
      The right hon. Member for Orkney and Shetland (Mr. Grimond) said that he did not share the conventional view that the management or proprietors of a newspaper should be completely unaware of editorial content, should disregard it and should never interfere. It is not for me to argue that general proposition, but it is the sort of matter which is perfectly relevant to put before the Royal Commission. I have a good deal of sympathy with what the right hon. Gentleman has said, but there is a difference in this argument between the case where the proprietor is either a private individual or a private company or trust, as it happens to be in the case of The Guardian and one or two other newspapers, and an instance where the Government are the proprietors. Whatever we may feel about proprietors or trusts interfering in editorial content, and however disagreeable we may find some of these interventions

      273
      to be, there is an entirely different question involved from that of a Government or Government agency's intervention in the editorial content of a newspaper.
      That immediately raises the implications of the Government attempting to direct the editorial policy of a newspaper in a way that would be favourable to the Government's point of view. Whatever we may feel about the SDA's involvement in the newspaper business, and whatever we may feel about Section 7 assistance, there would be general acceptance of the proposition that the Government or a Government agency should not interfere in the editorial direction and content of a newspaper. That would raise serious problems from the point of view of editorial freedom and freedom of expression of opinion.
      5.0 p.m.
      To say that does not mean that all of us are absolutely happy about the present position concerning editorial content or editorial freedom. I personally am not. But it is not a solution to that problem to suggest that a Government Department, a Minister or a Government agency should be involved in the editorial content of a newspaper or a television broadcasting company. That is why this provision is in the new clause. I need not go beyond saying that.
      I think that answers the main point of my hon. Friend the Member for West Stirlingshire (Mr. Canavan), because he said that there had not been a debate about this or a Government justification for what we are doing here. The Government justification is as I have expressed it here and subject to the qualifications about Section 7, and so on, which I have already described to the House.
      I was asked whether in any particular case it would be the Scottish Development Agency rather than the National Enterprise Board that would be involved. Under the Bill it would clearly be the Scottish Development Agency, because there is no mention of the National Enterprise Board in the Bill. So far as any body would be involved in the Bill by means of a direction in a selective assistance case, it would be the Scottish Development Agency and not the National Enterprise Board.
      With respect, I think that the hon. Gentleman mentioned a point about the
      274
      divisison of responsibility between the Scottish Development Agency and the National Enterprise Board which does not arise on this clause. The division of responsibility to which he should have been directing his mind is that between the Secretary of State for Industry and the Secretary of State for Scotland in selective assistance cases. That has already been determined within the Government by administrative means. The transfer of responsibilities for Section 7 cases to the Secretary of State has been in operation since 1st July this year, and it is working at administrative level perfectly adequately. There are occasionally cases where both Departments may be involved, but there is no particular difficulty about that.
      I was also asked about the Scottish Daily News, and I have very little to add to what I said when introducing the clause. I was asked what was the purpose of the Prime Minister's meeting this morning. It was specifically that which the Prime Minister himself made clear to the works council in the reply that he sent to its request for a meeting—to enable the Government's decisions and the background to them to be explained directly to the works council, with the Prime Minister there and by the Ministers directly concerned. That was what happened this morning.
      As my right hon. Friend the Prime Minister explained, the holding of the meeting did not anticipate any change in Government policy, which had already been made clear to the works council. That was made clear at this morning's meeting. The works council also put certain points to the Prime Minister and the other Ministers present at the meeting. In any case, the situation has changed in the sense that later this week a provisional liquidator will be appointed, and he will take over the responsibilities which at the present time are being discharged by the works council.
      Mr. Rifkind: The Minister has pointed out that at the meeting of the Prime Minister with the works council it was explained that no change in Government policy was anticipated. Can the Minister rule out any change in Government policy?
      Mr. Millan: I have said that the Government policy remains, and this was

      275
      made clear to the works council this morning. The provisional liquidator will be appointed tomorrow and, as I said earlier, he will have to be in touch with the Government as a creditor, just as he will with the other creditors. He will be acting on the basis of responsibility towards creditors and will therefore have to be in touch with us. It will be part of his legal responsibilities so to be. I have already had a preliminary informal conversation with him. As I said earlier, whatever the liquidator puts to the Government as creditor—he will put propositions also to the other creditors—will be very carefully considered. That is the position at the present time.
      The only other point concerning the Scottish Daily News was that made by the hon. Member for Edinburgh, Pentlands (Mr. Rifkind) as to the assessment of viability of the Scottish Daily News at the time that the newspaper was launched and Government assistance was granted. There was absolutely no misunderstanding about this situation. No one believed that this was a sure-fire certainty for success. Indeed, the Government insisted that in the prospectus issued by the company, when it invited public subscription, there were inserted the assessments made by the various studies into the possible viability of the project, so that any potential investors in the company would know absolutely clearly—here we had particularly in mind the worker shareholders themselves—the risks they were taking in investing in the company.
      That was all spelt out in very considerable detail in the public prospectus issued at the time. It was done at Government insistence. The Government appreciated as well as anyone else that this was an undertaking which had no guarantee of success, but we felt that it was an undertaking which had certain exciting and novel characteristics which ought to be supported by the Government.
      1 should like to pay tribute to the tremendous effort that has gone into the workers' co-operative and to the dedication of the work force, which, I may say, even in these extremely difficult times, has not been changed. There is still a very considerable dedication to make this newspaper a success.
      Mr. Teddy Taylor: As the main concern is the future of jobs, will the Minister say whether the Government are involved in discussions and whether any group, company or individual has emerged as being interested in buying the paper and saving the jobs?
      Mr. Millan: That would not be for me to say. These are now matters for the liquidator.
      I had finished what I wanted to say about the Scottish Daily News. I have also explained the clause in some detail and the reasons for it. I hope that it will be accepted by the House.
      Mr. Teddy Taylor: I should declare my interest, like the hon. Member for West Stirlingshire (Mr. Canavan), in that I am a shareholder in the Scottish Daily News. Some hon. Members have a financial interest, but I think the main interest of Scottish Members is in the jobs aspect.
      Although the Minister has painted a very gloomy picture, it was disappointing that he was not, in advance of the appointment of the liquidator, able to give any indication whether there had been any approaches which might lead to the saving of jobs.
      My hon. Friend the Member for Edinburgh, Pentlands (Mr. Rifkind) said at the beginning of this debate that he was inclined to give general support to it. Having heard this short debate, from the Conservative benches I would strongly recommend all my hon. Friends to vote enthusiastically for this clause, because we have had some indication of the reasons—which were not advanced previously in the Industry Bill, because of the guillotine—why some Labour Members opposed it.
      We heard the speech from the hon. Member for West Stirlingshire having been reminded by my hon. Friend the Member for Edinburgh, Pentlands that the hon. Member for West Stirlingshire had voted against the clause in the Industry Bill.
      We also had an indication—a very clear and alarming one—from the hon. Member for South Ayrshire (Mr. Sillars), of his reason for opposing the clause, and I hope that those who are concerned with freedom will make a point of reading his

      277
      speech. It was one of the most frightening we have heard for a long time. But we expect such speeches from him. He voted against a similar new clause in the Industry Bill.
      It was probably because he was speaking with the authority of the hon. Member for Central Ayrshire (Mr. Lambie) that the speech of the hon. Member for South Ayrshire was rather more extreme than usual. He was saying that he wanted the Government, through the Scottish Development Agency, not to move in to rescue newspapers and thereby rescue jobs. The money was not to be used for propping up capitalism. He wanted Government involvement, through the Agency, in newspapers in order to promote Socialism. That is a frightening situation. He is suggesting that instead of freedom of editorial expression, as we have now, we should have a situation in which we would have a Scottish Pravda and a Scottish Red Star and virtually nothing else.
      Mr. Sillars: Perhaps I can cool the hon. Gentleman's fevered brow by pointing out that I referred to subsection (2)(f) of Clause 2, relating to the promotion of industrial democracy as one of the functions of the Agency. I would include, for example, the promotion of industrial democracy on the Glasgow Herald, where a fair number of people are Conservatives. My concept of industrial democracy also includes Conservative newspapers for which the hon. Gentleman could continue to write.
      Mr. Taylor: That is the danger. Let us consider the subject of freedom of expression. There is no indication that where industrial democracy has any place, truth emerges more clearly. For example, people in Portugal are concerned about freedom of expression and broadcasting. The Scottish Daily News published a leading article saying that we should be inclined to support the Army in Portugal in what it was doing to preserve the revolution. That was one point of view, but it is very important that other points of view should be expressed. If we had Government control of newspapers in Scotland—Government-financed newspapers—it would be almost impossible for other newspapers to compete. Hardly a newspaper in Britain is making money, and some of them are losing substantial amounts.
      Mr. Robert Hughes: The hon. Gentleman is exposing the whole weakness of his case. The greatest danger to the freedom of the Press is the fact that newspapers cannot pay unless they get substantial advertising revenue. The threat to the freedom of the Press as expressed by the hon. Gentleman is a myth, a distortion. The freedom to preserve the freedom of the capitalist system is regarded by him as being the same as freedom of the Press. But that is a distortion of the truth and the hon. Gentleman knows it.
      Mr. Taylor: The hon. Gentleman is wrong. If he will look at countries whose political regimes he might favour, he will see that there is not anything like freedom of the Press there. But in this country if one has any point of view ranging from extreme left wing through mild, mediocre or middle to extreme right wing, one can find a newspaper to reflect one's opinions. In other countries, where the Government control the Press—a situation which some hon. Members are trying to achieve by opposing new Clause 1—there is not that breadth of expression.
      Mr. Canavan: The hon. Gentleman has already demolished his own case. Only one popular daily newspaper in Scotland can by any stretch of the imagination be said to be Government financed, if we accept the £1·2 million lent to the Scottish Daily News as Government finance, but that fact does not seem to have disturbed its editorial freedom, because it has even allowed an extreme right winger like the hon. Gentleman to write for it.
      5.15 p.m.
      Mr. Taylor: I was delighted to write for it for a while. I think it folded up for all kinds of reasons. But that is not the kind of sponsorship that the hon. Member for South Ayrshire is suggesting. There is a difference between a rescue operation for a newspaper which it is hoped will survive as a viable concern and what the hon. Gentleman suggests in opposing new Clause 1.
      The hon. Member for South Ayrshire said that he did not want this to be a rescue operation without the Government moving in and running newspapers which would then be able to advance Socialism. That is a frightening prospect. One of

      279
      the great things about freedom as we have it is the variety of opinions expressed. Readers themselves control the Press by buying those newspapers which they like and not buying those which they do not like. We should also remember that if the Government moved into such an operation and gave unlimited cash to it, there would be a danger that those newspapers which competed with the Government-financed newspapers would have to close down. In that way, we would not save jobs but we would destroy what freedom of the Press we have.
      In order to preserve a variety of opinions in our newspapers—those excel-
      lent newspapers, like the Express and Journal, which reflect regional problems—we support new Clause 1, give our full backing to the Government, and reject the alarming and vicious suggestion put by the hon. Member for South Ayrshire, who wants to have Government control of Government-subsidised newspapers reflecting only a limited degree of opinion. That would be the beginning of a slippery slope which could lead to the destruction of the freedom we have always enjoyed and which I hope we always will enjoy.
      Question put, That the clause be read a Second time:—
      The House divided: Ayes 291, Noes, 30.

      Division No. 344.]

      AYES

      [5.17 p.m.

      Adley, Robert

      Dempsey, James

      Hayman, Mrs Helene

      Amery, Rt Hon Julian

      Doig, Peter

      Healey Rt Hon Denis

      Armstrong, Ernest

      Dormand, J. D.

      Horam, John

      Ashley, Jack

      Douglas-Hamilton, Lord James

      Howell, Denis (B'ham, Sm F)

      Atkins, Rt Hon H. (Spelthorne)

      Douglas-Mann, Bruce

      Howells, Geraint (Cardigan)

      Atkins, Ronald (Preston N)

      Drayson, Burnaby

      Hoyle, Doug (Nelson)

      Awdry, Daniel

      Dunn, James A.

      Hughes, Rt Hon C. (Anglesey)

      Bain. Mrs Margaret

      Dunwoody, Mrs Gwyneth

      Hunt, John

      Barnett, Rt Hon Joel (Heywood)

      Edelman, Maurice

      Hunter, Adam

      Bean, R. E.

      Eden, Rt Hon Sir John

      Hurd, Douglas

      Beith, A. J.

      Edge, Geoff

      Hutchison, Michael Clark

      Bidwell, Sydney

      Edwards, Robert (Wolv SE)

      Irvine, Rt Hon Sir A. (Edge Hill)

      Biffen, John

      Elliott, Sir William

      Irving, Charles (Cheltenham)

      Bishop, E. S.

      English, Michael

      Irving, Rt Hon S. (Dartford)

      Blenkinsop, Arthur

      Ennals, David

      Jackson, Colin (Brighouse)

      Boardman, H.

      Evans, Fred (Caerphilly)

      Jackson, Miss Margaret (Lincoln)

      Booth, Albert

      Evans, Gwynfor (Carmarthen)

      Janner, Greville

      Bowden, A. (Brighton, Kemptown)

      Evans, Ioan (Aberdare)

      Jay, Rt Hon Douglas

      Boyden, James (Bish Auck)

      Ewing, Harry (Stirling)

      Jeger, Mrs Lena

      Brotherton, Michael

      Fairgrieve, Russell

      Jenkins, Hugh (Putney)

      Brown, Hugh D. (Provan)

      Farr, John

      Jenkins, Rt Hon Roy (Stechford)

      Brown, Robert C. (Newcastle W)

      Faulds, Andrew

      John, Brynmor

      Buchanan, Richard

      Fernyhough, Rt Hon E.

      Johnson, James (Hull West)

      Buchanan-Smith, Alick

      Fitch, Alan (Wigan)

      Johnson, Walter (Derby S)

      Budgen, Nick

      Fookes, Miss Janet

      Johnson Smith, G. (E Grinstead)

      Butler, Adam (Bosworth)

      Foot, Rt Hon Michael

      Jones, Alec (Rhondda)

      Butler, Mrs Joyce (Wood Green)

      Ford, Ben

      Jones, Arthur (Daventry)

      Callaghan, Jim (Middleton & P)

      Forrester, John

      Jones, Barry (East Flint)

      Campbell, Ian

      Fowler, Gerald (The Wrekin)

      Jones, Dan (Burnley)

      Cant, R. B.

      Fraser, John (Lambeth, N'w'd)

      Kaufman, Gerald

      Carlisle, Mark

      Freeson, Reginald

      Kelley, Richard

      Carter, Ray

      Garrett, W. E. (Wallsend)

      Kilroy-Silk, Robert

      Carter-Jones, Lewis

      George, Bruce

      Kitson, Sir Timothy

      Cartwright, John

      Gilbert, Dr John

      Knight, Mrs. Jill

      Castle, Rt Hon Barbara

      Gilmour, Sir John (East File)

      Lamborn, Harry

      Clemitson, Ivor

      Ginsburg, David

      Lamond, James

      Cockcroft, John

      Glyn, Dr Alan

      Latham, Arthur (Paddington)

      Cocks, Michael (Bristol S)

      Godber, Rt Hon Joseph

      Lestor, Miss Joan (Eton & Slough)

      Cohen, Stanley

      Goodhew, Victor

      Lewis, Ron (Carlisle)

      Colquhoun, Mrs Maureen

      Gould, Bryan

      Lipton, Marcus

      Conlan, Bernard

      Gourlay, Harry

      Lomas, Kenneth

      Cooke, Robert (Bristol W)

      Gower, Sir Raymond (Barry)

      Loveridge, John

      Corbett, Robin

      Graham, Ted

      Lyons, Edward (Bradford W)

      Cox, Thomas (Tooting)

      Grant, George (Morpeth)

      McCartney, Hugh

      Craigen, J. M. (Maryhill)

      Gray, Hamish

      MacCormick, Iain

      Crawford, Douglas

      Grieve, Percy

      McCrindle, Robert

      Crawshaw, Richard

      Grimond, Rt Hon J

      McElhone, Frank

      Cronin, John

      Grocott, Bruce

      Macfarlane, Neil

      Crowder, F. P.

      Hall-Davis, A. G. F.

      MacFarquhar. Roderick

      Cunningham, G. (Islington S)

      Hamilton, James (Bothwell)

      McGuire, Michael (Ince)

      Davidson, Arthur

      Hampson, Dr Keith

      Maclennan, Report

      Davies, Bryan (Enfield N)

      Hannam, John

      McMillan, Tom (Glasgow C)

      Davies, Denzil (Llanelli)

      Harper, Joseph

      McNamara, Kevin

      Davies, Rt Hon J. (Knutsford)

      Harrison, Walter (Wakefield)

      Magee, Bryan

      Davis, Clinton (Hackney C)

      Hart, Rt Hon Judith

      Mallalieu, J. P. W.

      Deakins, Eric

      Hattersley, Rt Hon Roy

      Marks, Kenneth

      Dean, Joseph (Leeds West)

      Hatton, Frank

      Marquand, David

      Marshall, Dr. Edmund (Goole)

      Rifkind Malcolm

      Tierney, Sydney

      Marshall, Jim (Leicester S)

      Roberts, Albert (Normanton)

      Tinn, James

      Marshall, Michael (Arundel)

      Roberts, Gwilym (Cannock)

      Tomlinson, John

      Marten, Neil

      Robertson, John (Paisley)

      Tomney, Frank

      Maude, Angus

      Roderick, Caerwyn

      Torney, Tom

      Maxwell-Hyslop, Robin

      Rodgers, William (Stockton)

      Tuck, Raphael

      Maynard, Miss Joan

      Rooker, J. W.

      Varley, Rt Hon Eric G.

      Meacher, Michael

      Ross, Rt Hon W. (Kilmarnock)

      Wainwright, Edwin (Dearne V)

      Mellish, Rt Hon Robert

      Rowlands, Ted

      Wainwright, Richard (Colne V)

      Meyer, Sir Anthony

      Sandelson, Neville

      Walden, Brian (B'ham, L'dyw'd)

      Millan, Bruce

      Scott, Nicholas

      Walder, David (Clitheroe)

      Miller, Dr M. S. (E. Kilbride)

      Shaw, Arnold (Ilford South)

      Walker, Harold (Doncaster)

      Miller, Mrs Millie (Ilford N)

      Sheldon, Robert (Ashton-u-Lyne)

      Walker, Terry (Kingswood)

      Molloy, William

      Shore, Rt Hon Peter

      Wall, Patrick

      Moonman, Eric

      Short, Rt Hon E. (Newcastle C)

      Ward, Michael

      Morris, Alfred (Wythenshawe)

      Short, Mrs Renée (Wolv NE)

      Watkins, David

      Morris, Charles R. (Openshaw)

      Silkin, Rt Hon John (Deptford)

      Watt, Hamish

      Morris, Rt Hon J. (Aberavon)

      Silkin, Rt Hon S. C. (Dulwich)

      Watt, Hamish

      Morris, Michael (Northampton S)

      Silverman, Julius

      Weetch, Ken

      Mudd, David

      Small, William

      Weitzman, David

      Mulley, Rt Hon Frederick

      Smith, Cyril (Rochdale)

      Welsh, Andrew

      Murray, Rt Hon Ronald King

      Smith, Dudley (Warwick)

      White, James (Pollok)

      Noble, Mike

      Snape, Peter

      Whitehead, Phillip

      Oakes, Gordon

      Spearing, Nigel

      Whitlock, William

      Ogden, Eric

      Speed, Keith

      Wigley, Dafydd

      O'Malley, Rt Hon Brian

      Spriggs, Leslie

      Willey, Rt Hon Frederick

      Orbach, Maurice

      Stallard, A. W.

      Williams, Alan (Swansea W)

      Ovenden, John

      Steen, Anthony (Wavertree)

      Williams, Alan Lee (Hornch'ch)

      Padley, Walter

      Stewart, Ian (Hitchin)

      Wilson, Alexander (Hamilton)

      Park, George

      Stott, Roger

      Wilson, Gordon (Dundee E)

      Pavitt, Laurie

      Strang, Gavin

      Wilson, Rt Hon H. (Huyton)

      Peart, Rt Hon Fred

      Strauss, Rt Hon G. R.

      Winterton, Nicholas

      Penhaligon, David

      Summerskill, Hon Dr Shirley

      Wood, Rt Hon Richard

      Perry, Ernest

      Tapsell, Peter

      Wrigglesworth, Ian

      Phipps, Dr Colin

      Taylor, Mrs Ann (Bolton W)

      Young, David (Bolton E)

      Price, C. (Lewisham W)

      Taylor, Teddy (Cathcart)

      Young, Sir G. (Ealing. Acton)

      Price, William (Rugby)

      Thomas, Dafydd (Merioneth)

      Younger, Hon George

      Radice, Giles

      Thomas, Jeffrey (Abertillery)

      Rawlinson, Rt Hon Sir Peter

      Thomas, Rt Hon P. (Hendon S)

      TELLERS FOR THE AYES:

      Rees, Rt Hon Merlyn (Leeds S)

      Thompson, George

      Mr. Donald Coleman and

      Reid, George

      Thorpe, Rt Hon Jeremy (N Devon)

      Mr. David Stoddart.

      Renton, Rt Hon Sir D. (Hunts)

      NOES

      Abse, Leo

      Lee, John

      Sedgemore, Brian

      Allaun, Frank

      Litterick, Tom

      Skinner, Dennis

      Atkinson, Norman

      Loyden, Eddie

      Swain, Thomas

      Bennett, Andrew (Stockport N)

      Luard, Evan

      Thomas, Ron (Bristol NW)

      Cryer, Bob

      Madden, Max

      Thorne, Stan (Preston South)

      Flannery, Martin

      Mikardo, Ian

      Wise, Mrs. Audrey

      Heffer, Eric S.

      Newens, Stanley

      Woof, Robert

      Hughes, Robert (Aberdeen, N)

      Richardson, Miss Jo

      Hughes, Roy (Newport)

      Rodgers, George (Chorley)

      TELLERS FOR THE NOES:

      Kinnock, Neil

      Rose, Paul B.

      Mr. James Sillars and

      Lambie, David

      St. John-Stevas, Norman

      Mr. Dennis Canavan.

      Latham, Arthur (Paddington)

      Question accordingly agreed to.
      Clause read a Second time, and added to the Bill.

    New Clause 2

      FINANCIAL OBJECTIVES OF UNDERTAKINGS CARRIED ON BY AGENCY
      'In each case where the Agency uses its powers under section 2(2)(b) to establish and carry on an industrial undertaking, the Agency shall be obliged to provide the management of the undertaking with a written statement of the financial objectives of that undertaking, and in drawing up the statement, the Agency shall have regard to the desirability, in its commercial activities, of obtaining a reasonable return on capital employed; and a statement on the extent to which each such undertaking has
      282
      achieved, exceeded or fallen short of the financial objective shall be included in the Annual Report of the Agency'.—[Mr. Teddy Taylor.]
      Brought up, and read the First time.
      Mr. Teddy Taylor: I beg to move, That the clause be read a Second time.
      Mr. Deputy Speaker: With that new clause we are to take the following:

    New Clause 5

      ADVISORY COMMITTEE IN RESPECT OF s. 2(2)(b) SCHEMES
      'There shall be established an advisory committee to the Agency, consisting of not less than three persons and not more than five persons, all of whom shall have had experience

      283
      of business, commerce and banking, who shall have the task of reporting to the Secretary of State on the viability of each scheme in which the Agency proposes to exercise its powers under section 2(2)(b), and the Agency shall be obliged to provide the Committee with such information as it requires'.
      Amendment No. 15, in Clause 13, page 13, line 42, at end insert:
      'Notwithstanding the general limit imposed by this subsection, the Agency shall not be authorised to spend more than £50 million on the exercise of their powers under section 2(2)(b) until a report has been submitted to Parliament on the record and achievements of the Agency in this regard, and the report has been approved by both Houses of Parliament'.
      Mr. Teddy Taylor: We believe that the debates which we have had on this matter have been worth while. In the previous discussion we achieved a great deal, including some remarkable conversions. I was delighted to see the hon. Member for East Kilbride (Dr. Miller), who had voted against us on the last occasion, decide to vote for us. That was very encouraging. Therefore, we shall try to do the same thing on this occasion and persuade the Government to support us on new Clause 2 in the same way as we supported them on new Clause 1.
      New Clauses Nos. 2, and 5 and Amendment No. 15 are important. It is important that the Bill be amended to ensure that there is a fair deal for private industry in Scotland, especially bearing in mind the unemployment figures which were revealed today and which unfortunately indicate male unemployment in Scotland has increased at the rate of approximately 1,000 a week over the past month. At present we have eight fully unemployed Scots for every vacancy. This is obviously a serious and deteriorating situation.
      Another factor which causes great concern is that investment is not going ahead. We want to ensure that private industry in Scotland is given a degree of safeguard and confidence.
      5. 30 p.m.
      The Minister will know from the approaches which have been made by the Confederation of British Industry, and other bodies, that Scottish industry is worried about certain aspects of the Bill—particularly about Clause 2(2)(b), which empowers the Agency to engage in Indus-
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      trial undertakings on its own or in co-operation with others.
      It is desperately important for us to ensure that these nationalising powers—powers to set up State firms, or firms in which there is a State partnership)—follow certain basic rules which are fair to the private sector of industry. Without the clause there will be no guarantee that the taxpayers' money will be used wisely or that the full story of the taxpayers' involvement in industry will ever emerge, or emerge fully. There is great concern that nationalised or semi-State-controlled companies should engage in fair competition and use the State money wisely and prudently.
      The clause does not provide that companies or partnerships in which there is State participation should immediately be profitable or should immediately move towards a profitable position. It provides that if the Government are to put public money into an industry or a firm they should state clearly, at the beginning, the financial objectives of the undertaking. Without this there is no measure of the success of the enterprise and no way of assessing the accuracy of the predictions of the officials of the Agency.
      If the Agency decides, for example, to put £1,000, £100,000 or £1 million into an industrial venture, there should be a statement, at the outset, of what it is hoped that the firm will achieve by way of profitability or return on capital. The new clause provides that
      "the Agency shall be obliged to provide the management of the undertaking with a written statement of the financial objectives of that undertaking, and in drawing up the statement, the Agency shall have regard to the desirability, in its commercial activities, of obtaining a reasonable return on capital employed."
      We also want to ensure, the objectives having been stated, that there is some indication whether the objective has been achieved. Therefore, the clause also says that there should be
      "a statement on the extent to which each"
      undertaking
      "has achieved, exceeded or fallen short of the financial objective"
      and that this
      "shall be included in the Annual Report of the Agency".
      We have had very unfortunate examples of State involvement in business, particularly by means of

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      nationalisation and its great ability to waste a great deal of taxpayers' money, to lose millions of pounds and, unfortunately, to ensure that there is no greater job security than exists in the private sector.
      We want to ensure that if the Government decide, through the Agency, to finance an industrial operation, they set out the aim at the beginning. Unless we ensure this, those who are engaged in the management of the enterprise will have no guideline to which to work, no specific aim, and nothing against which their success can be measured.
      In view of the great number of people employed in the State sector of industry, it is desperately important that we have a real and effective measure of whether the aims are being achieved.
      If the Government argue against the clause, they should tell us what would be lost if the clause were to be accepted; in what way it would frustrate the endeavours of the Agency; in what way it would hold up the Agency's work; and in what way it would frustrate the endeavours of management.
      The clause would not frustrate the Agency in any way. I can see no objection to it, unless the Government are anxious to cover up much of the Agency's activity and to ensure that skeletons remain in cupboards and are never found out.
      Next, we ask the House to agree to new Clause 5, in which we propose an advisory committee whose members will have
      "experience of business, commerce and banking, who shall have the task of reporting to the Secretary of State on the viability of each scheme in which the Agency proposes to exercise its powers under section 2(2)(b)".
      Before the Government commit any public money, we want to ensure that there is a body which is, so far as possible, independent, charged with the responsibility of examining schemes, assessing their viability and reporting to the Agency. The clause also provides that
      "the Agency shall be obliged to provide the Committee with such information as it requires".
      particularly at a time when Government expenditure is being reduced so substantially, it should be seen that money is
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      being used wisely and that schemes are viable.
      So far, we have had only one indication of an appointment to the Agency. Sir William Gray has been appointed chairman. Sir William, who is a leading public figure in Scotland and who has contributed a great deal to our country, does not, so far as I am aware, possess direct experience of industry and commerce. His experience to date has been as Lord Provost of Glasgow, which has had many financial problems.
      Irrespective of the public figures who will be appointed to the board of the Agency, it is important that we have independent views expressed about the viability of each project in which the State wishes to have a shareholding. Here again, nothing would be lost if the clause were accepted. We believe that a great deal would be gained.
      Our third proposition is contained in Amendment No. 15, whose purpose is to secure that
      "Notwithstanding the general limit imposed by this subsection,"—
      that is, the £200 million which is to be available over an unspecified period
      "the Agency shall not be authorised to spend more than £50 million"
      on nationalisation schemes
      "until a report has been submitted to Parliament on the record and achievements of the Agency in this regard, and the report has been approved by both Houses of Parliament."
      If the Government are to spend a great deal of money on nationalisation schemes in Scotland by promoting firms in which there is a substantial State shareholding, it is important, after the expenditure of £50 million, that we have an indication whether an operation is likely to be successful. All our experience has been to the effect that when the State gets involved in business enterprises it loses a great deal of money.
      The Government take the view, as they said in debates in Committee, that this will not happen in the case of the Agency. The Government want the Agency to be involved in profitable businesses which are contributing to the nation. We suggest that after spending £50 million on this purpose—if the Government spend that amount—the House should be enabled to review the situation, to pause for breath and reflection, and to judge if

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      further moves should be made in this direction.
      We hope that when replying to the debate the Minister of State will take the opportunity of giving us some idea of what cash is to be made available to the Agency. It will not be good enough for him to say that there is to be a £200 million limit and that it will be up to the Agency; government does not work like that. We hope, further, that the Minister of State will be able to give us an idea of the proportion of the cash to be made available which will be spent on nationalisation schemes.
      I need not remind the House of the serious economic problems now facing Scotland. The Minister will know that although some people have welcomed the Agency in differing degrees the CBI and other bodies have expressed considerable concern about certain aspects of it. The Confederation is concerned, in particular, about State involvement in industry, first because in every other case it has meant a higher burden of taxation on the private sector. It also means a smaller private sector to bear the burden of taxation—
      Mr. Deputy Speaker: Order. I never like interrupting hon. Members, but the hon. Gentleman is now embarking on what I would call a Second Reading point.
      Mr. Taylor: I was coming to the end of my speech, Mr. Deputy Speaker. I was pointing out—this is directly relevant to new Clause 2—that we were very concerned to ensure that money was wisely spent in this regard and that there should be accountability. I said that we were concerned about the extent of State participation in industry, about the amount which was being spent, and about the way in which a considerable burden was being put upon the private sector of industry.
      I mentioned the views of the CBI. Unless we can have an indication that that Government accept the new clause in principle there will be very real concern in the private sector of Scottish industry about its future. We want to encourage private industry to invest and ensure that the burdens on it will not be intolerable. I hope that the Minister who replies to this debate will at least be able to say that he accepts the principle behind the
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      new clauses and the amendment. If they are incorporated into the Bill, many of the fears of the private sector will be removed.
      Dr. M. S. Miller: To say I am astonished by these new clauses and the amendment would be putting it mildly. The hon. Member for Glasgow, Cathcart (Mr. Taylor) should be seized of the necessity to get things moving. The part of the Bill which sets out the proposed functions of the Agency should commend itself to hon. Members opposite. I am astonished that the hon. Member should think of putting a millstone around the Agency's neck even before it gets going. The procrastination involved in his proposals is too terrifying to be contemplated with equanimity.
      It is obvious that the Opposition are not keen on this Agency. They are terrified in case there might be some success in what we are setting out to do. The Minister who is to reply may feel he should allow a degree of latitude to the hon. Member for Glasgow, Cathcart. I counsel him with every fibre at my disposal to throw out the proposals and not pay them the slighest attention.
      Mr. Grimond: I have some sympathy with the thinking behind new Clause 2, but the Agency will anyway probably do what is suggested in the clause. It will presumably have discussions with managements about financial prospects and undertake to have regard to the desirability of obtaining a reasonable return on capital. I imagine that from the annual report we shall be able to see how the Agency is doing. All these things are necessary, but I think the Government will believe it is not necessary to have such a specific statement written into the Bill, although I shall be interested to hear what the Minister has to say.
      I have the gravest doubts about new Clause 5. The most recent experience we have of an agency similar to that now being established is the Highlands and Islands Development Board. It is a common complaint already that the board is getting too bureaucratic and is suffering from Parkinson's well-known disease, for ever increasing its staff and resources in Inverness. This is causing serious delays; I have constituents who complain that applications for grants and loans made last winter were not passed

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      until this autumn. In a time of inflation it is even more serious, because costings are thrown out not annually but every few months. As I understand the proposed new clause, it will prevent the Agency from making decisions till it receives the go ahead from the advisory committee. This would entail considerably more delay.
      Who is to serve on this committee? Will its members be part-timers employed in industry or, worse still, not employed in industry, or would they be full-time members? Where does Scotland have all these people? Can we afford to have the SDA and also the additional staff to advise it? Presumably the advisers would have to be people of equal or even greater expertise. The advisory committee would need accountants, lawyers, and a large staff and would, in turn, contract Parkinson's disease, so that before we knew it we would have a very large development agency and another very large agency looking over its shoulder. I cannot believe that this is the intention of the Opposition, but it is what the new clause seems to entail.
      Unless I have missed something, this seems to be the wrong direction. I have great doubts about increasing the number of bureaucrats in Scotland. We have enough already, and there is no telling how many more might be recruited to look into every proposal to which the SDA might be attracted. I hope I shall either hear something more about the purpose of new Clause 5 or that it will be quietly buried.
      5.45 p.m.
      Mr. Gray: I support my hon. Friend the Member for Glasgow, Cathcart (Mr. Taylor) in the way he moved the new clause. I hope the Minister realises he cannot have the agreement of both the hon. Member for East Kilbride (Dr. Miller) and the right hon. Member for Orkney and Shetland (Mr. Grimond). They were asking him to do quite different things.
      There is much to be said for putting in safeguards of this kind. I have long been a supporter of the Highlands and Islands Development Board, which has not always been easy, because the board has been the subject of some criticism in the past. I think it has done, and is doing, a good job. It has faults, as do
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      most boards of that kind, but they can be put right, and I hope that in the very near future we shall see some improvements. The board attracts most headlines when it has a failure. If it has supported a company which fails, the Press always latches on to it. This is only natural, because public money is involved. If, by including new Clause 2, we can protect the Agency, there is nothing to be lost. This is not meant to be a restriction on the Agency, and it may be that the Agency will do much of what is proposed in the new clause anyway, but I do not see any harm in writing this into the Bill.
      We shall think of the SDA in a different light from the National Enterprise Board or the British National Oil Corporation, which some of us have had a lot to do with during the Committee stage of another Bill. The SDA will be a more personal agency than either of those. The people involved in administering it, from the chairman down, will be very much in the public eye in Scotland. The advice they take is very important, and the fact that in respect of each concern in which they invest they should have to report back periodically with a fairly lucid account of its activities would be an advantage.
      The extent of the Agency's participation will probably be considerably limited, initially, because of our present economic circumstances, but there can be little doubt that as time goes on more and more money will be available for the Agency, and since that is public money its expenditure should be closely monitored.
      I do not wish to go on at any length about Amendment No. 15 or new Clause 5, but it is surely important that where public money is being spent, particularly when the public are so aware of the economic crisis, every safeguard should be employed.
      Mr. James Dempsey: I have been searching my mind during the debate to discover how it is humanly possible to spend Government money willy-nilly. How is it possible to get away with it? I have never known any public undertaking to be allowed to spend money without some control being exerted by the authorities concerned.

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      The SDA will have to produce annual accounts which will show the rate of investment, the return on capital, and the other financial results of its activities. Surely the hon. Member for Glasgow, Cathcart (Mr. Taylor) realises that expenditure of that type is vetted by more than one body to ensure that public money is being spent prudently. From the way he speaks one would suppose that we were about to shovel money down a drain, but nothing could be further from the truth. He quoted the example of a development costing £50 million being carried out by a private enterprise firm for the Agency. He gave the impression that it would just be a matter of handing over £50 million and then letting the firm get on with it. That is not true. Money is not loaned to or invested in any undertaking unless there are regular reports on the way in which the investment is working out.
      The hon. Member must appreciate that such undertakings are run in a normal businesslike fashion, and that they produce annual balance sheets and statements of accounts. They show the details of Government contributions and expenditure covering the various items on which they produce a profit or a loss. The accounts are supplied not only to the Government but to any other interest which invests in the undertaking. That is normal business procedure; it does not need to be written into every Act of Parliament.
      The Bill provides for the Agency to invest, and it can pursue that investment to the fullest, even to the extent of its auditors investigating the accounts, analysing the balance sheets and satisfying the Government that the money which has been invested has been spent wisely. It amazes me to think that any hon. Member should consider that a public undertaking was willing to invest large sums without guarantees as to control and development.
      I was naturally distressed to hear the reference by the hon. Member for Cathcart to some other publicly-owned activities. I could take him to industries, the appearance and condition of which are a disgrace to the United Kingdom. These firms have been in operation for 50 or 60 years, and the private owners, instead of reinvesting some of the profits to ensure
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      a healthy rate of growth, have been spending them on high living. I hope that money will be spent on taking certain industries into public ownership with a view to improving them in every way possible, to make them more competitive and to safeguard the jobs they provide. I know of industries in which the buildings are ramshackle, there is no proper pavement and, after 60 years of profiteering, the roads still have earth surfaces. I know of industries in which the workpeople do not even have a decent floor to stand on; they have to stand on earth surfaces which serve also as a urinal because of the poor toilet facilities provided. I should like to know where all the profits go—
      Mr. Deputy Speaker: Order. I am trying to be as fair as I can with the hon. Member, but I think he is developing now what I would regard as a Second Reading argument rather than relating his remarks to the new clause.
      Mr. Dempsey: I apologise, Mr. Deputy Speaker. The hon. Member tempted me by quoting examples of nationalised industries.
      Surely the SDA should be able to use money to take over works that were still potentially competitive, so that it could modernise the buildings and put in decent roads, using that element of its resources allocated for environmental improvements. The SDA has every opportunity, given the support, to make this injection into areas like the one I represent and to ensure that the money would not only be spent wisely but would be properly accounted for. If the hon. Member for Cathcart thinks there is any possibility of dodging the column, he has forgotten about the Government Auditor. That gentleman will be in the background, supervising, and he will ensure, if no one else does, that the money that Parliament is voting under this legislation is prudently spent.
      Lord James Douglas-Hamilton: I enjoyed the speech by the hon. Member for Coatbridge and Airdrie (Mr. Dempsey) and the optimism with which he delivered it. He must appreciate, however, that there is an advantage to be gained from having safeguards in certain circumstances. The setting up of an advisory committee under

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      new Clause 5 would, for example, assist in considering the viability of schemes.
      I think that the right hon. Member for Orkney and Shetland (Mr. Grimond) asked who would constitute the advisory committee. Surely the SDA would benefit greatly from the expertise of the Scottish Council (Development and Industry). It has put the case for development in Scotland with great persistence and ability. Even if the Minister felt that the clause is inappropriate, he could still draw from the expertise of the Council, and if he can think of a better way of using its services we should be very glad to listen to what he has to say.
      6.0 p.m.
      Mr. Millan: In its industrial functions the Scottish Development Agency will be expected to pay its way. It will not be subsidising industry but will be involved on a commercial basis. I have made that point many times at different stages of the Bill's progress through the House. Involvement on a commercial basis will be achieved by the determination of the financial duties of the Agency, and will be done by the Secretary of State under Clause 12. In the guidance to be provided for the Agency and to be available as a public document to hon. Members and others it will be made clear that the Agency is to act in a commercial way.
      I deal first with new Clause 2. Government Amendment No. 7 provides that any enterprise established under Clause 2(2)(b) will be established by way of a company. Therefore, all the normal provisions of the Companies Act relating to the publication of accounts and so on will be attracted to enterprises established and carried on by the Agency. Under the provisions of the subsection information will automatically become available. There is no need to make special provisions for information to be made available when it will be made available in any case, particularly when we are dealing with companies which are under a legal obligation under the Companies Act to publish their accounts and give certain information.
      Mr. Teddy Taylor: The Minister said that the normal Companies Act procedure would apply. In other words, companies will have to put information in their accounts, and members of the public can pay their shilling and see them. But will
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      such information about every company in which the SDA has a holding be published in the annual report? If not, how is (hat a safeguard?
      Mr. Millan: The hon. Gentleman has just admitted that the information will be publicly available, and if it is publicly available I imagine that well-informed people such as the hon. Gentleman will soon be able to obtain the information from the public registers.
      There will have to be provision for the accounts of the companies to be consolidated with the accounts of the Agency, That will be done in accordance with the best commercial practice under a further amendment, so the information will be publicly available.
      I am not in favour of writing into the Bill that there shall be the kind of statement provided for in the new clause. The right hon. Member for Orkney and Shetland (Mr. Grimond) sensibly said that the Agency, in its discussions with management of undertakings for which it will be responsible, would no doubt be talking about financial objectives and so on, but I have seen no reason why the Agency should be in the position, which no private company is in, of setting out for all to see a written statement of financial objectives and so on, and then including in its annual report statements about whether or not the objectives have been met, met only partly, or perhaps not met at all.
      There will be an overall obligation on the Agency to pay its way in its industrial function. The information will all be publicly available, and if the Agency is not meeting the financial guidelines laid down by the Secretary of State that will be obvious in its report. I am not in favour of placing on the Agency obligations well beyond those that would be placed on a private enterprise company or holding company. I am not in favour of any of the enterprises which would be subsidiaries of the Agency being excused from any of the normal obligations of the Companies Act and other legislation, but, equally, I am not in favour of their having additional burdens placed upon them.
      Mr. Gray: The Minister uses the example of the private company. He would not be agreeable to writing into

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      the Bill anything which would impose on a SDA venture as opposed to a private company any additional burden. Does he not accept that a private company is using its own finances, whereas a considerable amount of public money is involved in the SDA? Is that not justification for providing an extra safeguard?
      Mr. Millan: I do not know what the hon. Gentleman means by "an extra safeguard". I have already said that the information will be publicly available in any case. The Agency will be operating in accordance with financial guidelines which will be available to the public and to this House under Clause 12. I am not in favour of laying down for the companies which will operate the industrial functions of the SDA obligations beyond those which would be laid on private enterprise companies, and therefore I cannot accept new Clause 2.
      The hon. Member for Edinburgh, West (Lord James Douglas-Hamilton) asked me to explain who would establish the advisory committee under new Clause 5. It is not my new clause. The hon. Gentleman's name is attached to it, and I was going to ask him and his hon. Friends the question that he put to me. There is nothing in the clause to say who establishes the advisory committee, as the right hon. Member for Orkney and Shetland pointed out. Is it to be established by the Agency, the Secretary of State or somebody else? I am not responsible for the drafting of the clause. It is obviously defective from that point of view alone.
      The clause is also defective because we should not write into the Bill obligations on the Agency to establish all sorts of committees, whether of the kind described in the clause or any other kind. It is certainly necessary to write into the Bill the power for the Agency to establish such committees as it may think fit, and that power is provided in paragraph 15 of Schedule 1, but we deliberately did not make provision for committees by writing into the Bill an organisational structure for the Agency, because we want it to develop its own organisational structure. If it feels that advisory or other committees are sensible, it will have power to appoint them, but we shall not write that into the Bill.
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      Speaking personally, I hope that the Agency does not operate through a whole series of committees, that it does not operate in a bureaucratic way. Particularly in matters of commercial judgment and so on, I want it to act in an enterprising way, certainly taking advice from outside if it feels it desirable in a particular situation, but not adopting a bureaucratic structure which would mean that matters would have to go to a committee for a decision before it could operate. I strongly resist any suggestion that we should write that sort of thing into the Bill, and therefore I cannot advise the House to accept new Clause 5.
      I cannot recommend the House to accept Amendment No. 15. It would write into the Bill a second financial limit apart from the general one of £200 million to £300 million, and would direct that limit to a specific power in the hands of the Agency. It is not for me to anticipate what the Agency might spend on any of its functions. We shall have to discuss with the chairman-designate of the organising committee and the Agency the question of budgets, as we do in the case of every other public agency. Information about budgets will be available in the ordinary way through the White Papers on public expenditure and, as the Agency develops, it will produce accounts which will show to hon. Members how much is being spent on one function as distinct from another. All that information will be publicly available, and no doubt I shall be advised if the whole range of activities of the Agency are not debated in the House from time to time. Obviously that information will be available, but I am not willing to write into the Bill any additional restrictions on the Agency's powers.
      If the Agency is to succeed, as I believe it will, it will have to be on the basis that the Government of the day have appointed the Agency on a given day with wide-ranging powers, powers that are accepted by a wide range of opinion in Scotland. It should be allowed to exercise enterprise and should not be continually restricted or inhibited by detailed control or intervention from Government. There should be nothing in the legislation, or indeed in the Government's attitude, to suggest that the Agency is not to be trusted, and can do what it wants only if it is subject to detailed control

      297
      by the House or the Government of the day. It would set the Agency off on the wrong foot if we were to single it out for special attention by imposing on it a separate financial limitation.
      I repeat that the spending figures will be publicly available as will our estimates of sums under various headings. However, we shall not act in a way which
      will inhibit the Agency in furthering the industrial and environmental development of Scotland. I cannot recommend that any of these propositions be accepted.
      Question put, That the clause be read a Second time:—
      The House divided: Ayes 194, Noes 252.

      Division No. 345.]

      AYES

      [6.12 p.m.

      Adley, Robert

      Gower, Sir Raymond (Barry)

      Morris, Michael (Northampton S)

      Aitken, Jonathan

      Grant Anthony (Harrow C)

      Morrison, Hon Peter (Chester)

      Alison, Michael

      Gray, Hamish

      Mudd, David

      Arnold, Tom

      Grieve, Percy

      Neave, Airey

      Atkins, Rt Hon H. (Spelthorne)

      Hall-Davis, A. G. F.

      Nelson, Anthony

      Awdry, Daniel

      Hamilton, Michael (Salisbury)

      Neubert, Michael

      Baker, Kenneth

      Hampson, Dr Keith

      Newton, Tony

      Banks Robert

      Hannam, John

      Nott, John

      Bell, Ronald

      Harvie Anderson, Rt Hon Miss

      Oppenheim, Mrs Sally

      Berry, Hon Anthony

      Hastings, Stephen

      Page, Rt Hon R. Graham (Crosby)

      Biffen, John

      Hawkins, Paul

      Parkinson, Cecil

      Biggs-Davison, John

      Hayhoe, Barney

      Pattie, Geoffrey

      Body, Richard

      Heath, Rt Hon Edward

      Peyton, Rt Hon John

      Boscawen, Hon Robert

      Heseltine, Michael

      Pink, R. Bonner

      Bottomley, Peter

      Hicks, Robert

      Price, David (Eastleigh)

      Bowden, A. (Brighton, Kemptown)

      Higgins, Terence L.

      Raison, Timothy

      Brotherton, Michael

      Hordern, Peter

      Rawlinson, Rt Hon Sir Peter

      Buchanan-Smith, Alick

      Howe, Rt Hon Sir Geoffrey

      Rees, Peter (Dover & Deal)

      Budgen, Nick

      Howell, David (Guildford)

      Renton, Rt Hon Sir D. (Hunts)

      Bulmer, Esmond

      Hunt, John

      Rifkind Malcolm

      Carlisle, Mark

      Hurd, Douglas

      Rossi, Hugh (Hornsey)

      Carr, Rt Hon Robert

      Hutchison, Michael Clark

      Sainsbury, Tim

      Chalker, Mrs Lynda

      Irving, Charles (Cheltenham)

      St. John-Stevas, Norman

      Clark, Alan (Plymouth, Sutton)

      James, David

      Scott, Nicholas

      Clark, William (Croydon S)

      Jenkin, Rt Hon P. (Wanst'd & W'df'd)

      Shaw, Giles (Pudsey)

      Clarke, Kenneth (Rushcliffe)

      Jessel, Toby

      Shelton, William (Streatham)

      Cockcroft, John

      Johnson Smith, G. (E Grinstead)

      Shepherd, Colin

      Cooke, Robert (Bristol W)

      Jones, Arthur (Daventry)

      Shersby, Michael

      Cope, John

      Jopling, Michael

      Silvester, Fred

      Cordle, John H.

      Joseph, Rt Hon Sir Keith

      Sims, Roger

      Costain, A. P.

      Kershaw, Anthony

      Sinclair, Sir George

      Crouch, David

      Kimball, Marcus

      Skeet, T. H. H.

      Crowder, F. P.

      King, Tom (Bridgwater)

      Smith, Dudley (Warwick)

      Davies, Rt Hon J. (Knutsford)

      Kitson, Sir Timothy

      Speed, Keith

      Dean, Paul (N Somerset)

      Knight, Mrs. Jill

      Spicer, Michael (S Worcester)

      Dodsworth, Geoffrey

      Knox, David

      Sproat, Iain

      Douglas-Hamilton, Lord James

      Lamont, Norman

      Stainton, Keith

      Drayson, Burnaby

      Latham, Michael (Melton)

      Stanbrook, Ivor

      du Cann, Rt Hon Edward

      Lawrence, Ivan

      Steen, Anthony (Wavertree)

      Eden, Rt Hon Sir John

      Lawson, Nigel

      Stewart, Ian (Hitchin)

      Edwards, Nicholas (Pembroke)

      Lester Jim (Beeston)

      Stokes, John

      Elliott, Sir William

      Loveridge, John

      Stradling Thomas, J.

      Emery, Peter

      McCrindle, Robert

      Tapsell, Peter

      Fairbairn, Nicholas

      Macfarlane, Neil

      Taylor, R. (Croydon NW)

      Fairgrieve, Russell

      MacGregor, John

      Taylor, Teddy (Cathcart)

      Farr, John

      Macmillan, Rt Hon M. (Farnham)

      Temple-Morris, Peter

      Fell, Anthony

      McNair-Wilson, M. (Newbury)

      Thomas, Rt Hon P. (Hendon S)

      Finsberg Geoffrey

      McNair-Wilson, P. (New Forest)

      Townsend, Cyril D.

      Fisher, Sir Nigel

      Madel, David

      Trotter, Neville

      Fletcher-Cooke, Charles

      Marshall, Michael (Arundel)

      van Straubenzee, W. R.

      Fookes, Miss Janet

      Marten, Neil

      Vaughan, Dr Gerard

      Fowler, Norman (Sutton C'f'd)

      Mates, Michael

      Viggers, Peter

      Fox, Marcus

      Mather, Carol

      Wakeham, John

      Fraser, Rt Hon H. (Statford & St)

      Maude, Angus

      Walder, David (Clitheroe)

      Fry, Peter

      Mawby, Ray

      Wall, Patrick

      Galbraith, Hon. T. G. D.

      Maxwell-Hyslop, Robin

      Walters, Dennis

      Gardiner, George (Reigate)

      Mayhew, Patrick

      Wells, John

      Gardner, Edward (S Fylde)

      Meyer, Sir Anthony

      Wiggin, Jerry

      Gilmour, Rt Hon Ian (Chesham)

      Mills, Peter

      Winterton, Nicholas

      Gilmour, Sir John (East Fite)

      Miscampbell, Norman

      Wood, Rt Hon Richard

      Glyn, Dr Alan

      Mitchell, David (Basingstoke)

      Young, Sir G. (Ealing, Acton)

      Godber, Rt Hon Joseph

      Moate, Roger

      Younger, Hon George

      Goodhew, Victor

      Montgomery, Fergus

      Goodlad, Alastair

      Moore, John (Croydon C)

      TELLERS FOR THE AYES:

      Gorst, John

      More, Jasper (Ludlow)

      Mr. Adam Butler and

      Gow, Ian (Eastbourne)

      Morgan-Giles, Rear-Admiral

      Mr. Michael Roberts.

      NOES

      Abse, Leo

      Grimond, Rt Hon J.

      Orbach, Maurice

      Allaun, Frank

      Grocott, Bruce

      Ovenden, John

      Armstrong, Ernest

      Hamilton, James (Bothwell)

      Padley, Walter

      Ashley, Jack

      Harper, Joseph

      Park, George

      Atkins, Ronald (Preston N)

      Hart, Rt Hon Judith

      Parker, John

      Atkinson, Norman

      Hatton, Frank

      Parry, Robert

      Bain, Mrs Margaret

      Hayman, Mrs Helene

      Peart, Rt Hon Fred

      Barnett, Rt Hon Joel (Heywood)

      Healey, Rt Hon Denis

      Penhaligon, David

      Bean, R. E.

      Heffer, Eric S.

      Perry, Ernest

      Beith, A. J.

      Henderson, Douglas

      Phipps, Dr Colin

      Bennett, Andrew (Stockport N)

      Horam, John

      Price, C. (Lewisham W)

      Bidwell, Sydney

      Howell, Denis (B'ham, Sm H)

      Price, William (Rugby)

      Blenkinsop, Arthur

      Howells, Geraint (Cardigan)

      Radice, Giles

      Boardman, H.

      Hoyle, Doug (Nelson)

      Rees, Rt Hon Merlyn (Leeds S)

      Booth, Albert

      Hughes, Rt Hon C. (Anglesey)

      Reid, George

      Boyden, James (Bish Auck)

      Hughes, Robert (Aberdeen N)

      Richardson, Miss Jo

      Bray, Dr Jeremy

      Hughes, Roy (Newport)

      Roberts, Albert (Normanton)

      Brown, Hugh D. (Provan)

      Hunter, Adam

      Roberts, Gwilym (Cannock)

      Brown, Robert C. (Newcastle W)

      Irvine, Rt Hon Sir A. (Edge Hill)

      Robertson, John (Paisley)

      Buchanan, Richard

      Irving, Rt Hon S. (Dartford)

      Roderick, Caerwyn

      Butler, Mrs Joyce (Wood Green)

      Jackson, Colin (Brighouse)

      Rodgers, George (Chorley)

      Campbell, Ian

      Jackson, Miss Margaret (Lincoln)

      Rodgers, William (Stockton)

      Canavan, Dennis

      Janner, Greville

      Rooker, J. W.

      Cant, R. B.

      Jay, Rt Hon Douglas

      Rose, Paul B.

      Carter, Ray

      Jeger, Mrs Lena

      Ross, Rt Hon W. (Kilmarnock)

      Carter-Jones, Lewis

      Jenkins, Hugh (Putney)

      Sandelson, Neville

      Cartwright, John

      Jenkins, Rt Hon Roy (Stechford)

      Sedgemore, Brian

      Clemitson, Ivor

      John, Brynmor

      Shaw, Arnold (Ilford South)

      Cocks, Michael (Bristol S)

      Johnson, James (Hull West)

      Sheldon, Robert (Ashton-u-Lyne)

      Cohen, Stanley

      Johnson, Walter (Derby S)

      Short, Rt Hon E. (Newcastle C)

      Coleman, Donald

      Jones, Alec (Rhondda)

      Short, Mrs Renée (Wolv NE)

      Colquhoun, Mrs Maureen

      Jones, Barry (East Flint)

      Silkin, Rt Hon John (Deptford)

      Conlan, Bernard

      Jones, Dan (Burnley)

      Silkin, Rt Hon S. C. (Dulwich)

      Cook, Robin F. (Edin C)

      Kaufman, Gerald

      Sillars, James

      Corbett, Robin

      Kelley, Richard

      Silverman, Julius

      Craigen, J. M. (Maryhill)

      Kilroy-Silk, Robert

      Skinner, Dennis

      Crawford, Douglas

      Kinnock, Neil

      Small, William

      Crawshaw, Richard

      Lambie, David

      Smith, Cyril (Rochdale)

      Cryer, Bob

      Lamborn, Harry

      Snape, Peter

      Cunningham, G. (Islington S)

      Lamond, James

      Spearing, Nigel

      Davidson, Arthur

      Latham, Arthur (Paddington)

      Spriggs, Leslie

      Davies, Bryan (Enfield N)

      Lee, John

      Stallard, A. W.

      Davies, Denzil (Llanelli)

      Lestor, Miss Joan (Eton & Slough)

      Stoddart, David

      Davis. Clinton (Hackney C)

      Lewis, Ron (Carlisle)

      Stonehouse, Rt Hon John

      Deakins, Eric

      Lipton, Marcus

      Stott, Roger

      Dean, Joseph (Leeds West)

      Litterick, Tom

      Strauss, Rt Hon G. R.

      Delargy, Hugh

      Loyden, Eddie

      Summerskill, Hon Dr Shirley

      Dempsey, James

      Luard, Evan

      Swain, Thomas

      Doig, Peter

      Lyons, Edward (Bradford W)

      Taylor, Mrs Ann (Bolton W)

      Dormand, J. D.

      McCartny, Hugh

      Thomas, Dafydd (Merioneth)

      Douglas-Mann, Bruce

      MacCormick, Iain

      Thomas, Ron (Bristol NW)

      Dunn, James A.

      McElhone, Frank

      Thompson, George

      Dunnett, Jack

      MacFarquhar, Roderick

      Thorne, Stan (Preston South)

      Dunwoody, Mrs Gwyneth

      McGuire, Michael (Ince)

      Thorpe, Rt Hon Jeremy (N Devon)

      Edelman, Maurice

      Maclennan, Robert

      Tierney, Sydney

      Edge, Geoff

      McMillan, Tom (Glasgow C)

      Tinn, James

      Edwards, Robert (Wolv SE)

      McNamara, Kevin

      Tomlinson, John

      English, Michael

      Madden, Max

      Tomney, Frank

      Evans, Fred (Caerphilly)

      Magee, Bryan

      Torney, Tom

      Evans, Gwynfor (Carmarthen)

      Mallalieu, J. P. W.

      Tuck, Raphael

      Evans, Ioan (Aberdare)

      Marks, Kenneth

      Varley, Rt Hon Eric G.

      Ewing, Harry (Stirling)

      Marquand, David

      Wainwright, Edwin (Dearne V)

      Faulds, Andrew

      Marshall, Dr. Edmund (Goole)

      Wainwright, Richard (Colne V)

      Fernyhough, Rt Hon E

      Marshall, Jim (Leicester S)

      Walden, Brian (B'ham, L'dyw'd)

      Fitch, Alan (Wigan)

      Maynard, Miss Joan

      Walker, Harold (Doncaster)

      Flannery. Martin

      Meacher, Michael

      Walker, Terry (Kingswood)

      Fletcher, Ted (Darlington)

      Mellish, Rt Hon Robert

      Ward, Michael

      Foot, Rt Hon Michael

      Mikardo, Ian

      Watkins, David

      Ford, Ben

      Millan, Bruce

      Watkinson, John

      Forrester, John

      Miller, Dr M. S. (E. Kilbride)

      Watt, Hamish

      Fowler, Gerald (The Wrekin)

      Miller, Mrs Millie (Ilford N)

      Weetch, Ken

      Fraser, John (Lambeth, N'w'd)

      Molloy, William

      Weitzman, David

      Freeson, Reginald

      Moonman, Eric

      Wellbeloved, James

      Freud, Clement

      Morris, Alfred (Wythenshawe)

      Welsh, Andrew

      Garrett, W. E. (Wallsend)

      Morris, Charles R. (Openshaw)

      White, James (Pollok)

      George, Bruce

      Morris, Rt Hon J. (Aberavon)

      Whitehead, Phillip

      Gilbert, Dr John

      Mulley, Rt Hon Frederick

      Whitlock, William

      Ginsburg, David

      Murray, Rt Hon Ronald King

      Wigley, Dafydd

      Gould, Bryan

      Newens, Stanley

      Willey, Rt Hon Frederick

      Gourlay, Harry

      Noble, Mike

      Williams, Alan (Swansea W)

      Graham, Ted

      Ogden, Eric

      Williams, Alan Lee (Hornch'ch)

      Grant, George (Morpeth)

      O'Malley, Rt Hon Brian

      Wilson, Alexander (Hamilton)

      Wilson, Gordon (Dundee E)

      Woof, Robert

      TELLERS FOR THE NOES:

      Wilson, Rt Hon H. (Huyton)

      Wrigglesworth, Ian

      Mr. Walter Harrison and

      Wise, Mrs. Audrey

      Young, David (Bolton E)

      Mr. Laurie Pavitt.

      Question accordingly negatived.

    New Clause 3

      PREVENTION OF UNFAIR COMPETITION
      'The Agency shall take all reasonable steps to ensure that it does not engage in any of its activities, in uneconomic or subsidised competition with private industry, and in the event of any complaint being made to the Agency of such unfair competition, the Agency shall refer the complaint to the Secretary of State who shall, unless he determines the complaint to be trivial or inaccurate, appoint suitably qualified persons to investigate and report on the complaint to him; and a record of such complaints and the action taken on them shall be available for inspection by the public at the Agency's office'.—[Mr. Buchanan-Smith.]
      Brought up, and read the First time.
      Mr. Alick Buchanan-Smith: I beg to move, That the clause be read a Second time.
      This clause is of fundamental importance. I ask the Minister of State not to deal with it in the same way as he has tried to deal with other arguments and amendments tabled by Conservative Members concerning politically motivated actions of the Agency. I am not thinking simply in terms of objecting to the Agency taking part in industrial matters or having shares in industrial concerns in Scotland, although the Minister realises that Conservative Members are not happy about that. I ask him to consider the clause in the much broader context of the intervention of the Government generally in industrial and commercial matters. I have in mind not simply investment and intervention by the Agency or the Government in commercial ventures which are already profitable but the intervention of the Agency or the Government in spheres of commerce and industry which Conservative Members would agree are necessary.
      There are powers under the previous Industry Act under which the Government or the Agency will intervene in the commercial affairs of a company where for one reason or another that is desirable. I have in mind an industry or firm that needs help over a difficult period—perhaps a short-term intervention, which we would support—or an industry or firm which is of particular importance
      302
      to the economy in terms either of employment or of the technological developments taking place in it. In those instances intervention by the State or the Agency can be thoroughly justified and supported.
      There is a broad measure of support across all political parties for a certain amount of State intervention. This is reflected in the fact that we have a mixed economy. Occasionally we overlook the effect that that intervention has on other firms and undertakings within the industry. Although a certain amount of good may be achieved by intervention, we must not overlook some of the effects it may have on others within the industry.
      I give three examples of how this may arise. It has arisen in the policies of successive Governments towards the shipbuilding industry. The previous Conservative Government played their part in supporting the shipbuilding industry of Upper Clyde. I do not wish to make party political points. In that situation, however, because of certain overriding factors that cause Government intervention and substantial investment in an industry, we overlook the effect that it has on shipbuilding elsewhere—for example, on Lower Clyde.
      Competition is subsidised by taxpayers' money against a firm which is in receipt of Government funds from other sources. Although we hope that this has not led to a contraction of the shipbuilding industry elsewhere in Scotland, it is a factor that must be considered by the shipbuilding industry in, for example, Lower Clyde. Some would argue that it has had an inhibiting effect on the development of the shipbuilding industry elsewhere in Scotland.
      6.30 p.m.
      Another example has occurred more recently in the motor industry. It is perhaps slightly far-fetched, but I use it because it illustrates the repercussions of Government intervention. British Leyland, in which the Government now have a very large stake, has undergone considerable rationalisation. There are now plans to rationalise the company even further in the hope that it will become more profitable, and the Government are pushing it to do that. This will

      303
      have repercussions for Albion Motors, which when it was swallowed by British Leyland was a profitable concern. It was a small commercial vehicle company operating successfully in Glasgow. We are led to believe that further rationalisation may take place at its premises as a consequence of the much wider rationalisation throughout the British Leyland company.
      I am the first to admit that that is not a direct consequence of the Government's stake in British Leyland; it is a consequence of a multiplicity of factors. I use that example only to show that when the Government become involved in an industry it has repercussions throughout the industry. Albion Motors was originally outwith the section of the industry in which the Government were interested but it is now at the receiving end of what the Government are doing.
      The third example, the newspaper industry, has already been mentioned. There have been certain repercussions throughout the newspaper industry in Scotland as a direct result of Government intervention. There is no doubt that the fact that the Scottish Daily News got off the ground has had and is having an effect on other sections of the newspaper industry in Scotland. When the Beaverbrook Press contracted in Scotland, the hon. Member for Clackmannan and East Stirlingshire (Mr. Reid), with his knowledge of the newspaper industry, questioned whether it was possible, given the population base in Scotland and the potential circulation, for another independent newspaper to operate in Scotland. The Scottish Daily News is an example of State intervention causing the continuation of a firm or even the introduction of another firm within an industry which is bound to have an impact on the other firms in it.
      I hope that by giving those three examples I have demonstrated that we are not dealing with a wholly hypothetical situation.
      Mr. MacCormick: I am a seeker after truth and, therefore, I should like to pose another analogy. Take the example which we debated just before the recess, Western Ferries and Caledonian-MacBrayne. That was a case in which a Government-subsidised operation was in competition with an operation which was not subsidised.
      304
      No hon. Gentleman said that the operation should be confined to the private enterprise company. That is why I am worried by the hon. Gentleman's argument.
      Mr. Buchanan-Smith: What the hon. Gentleman has said highlights my point. Earlier my hon. Friend the Member for Glasgow, Cathcart (Mr. Taylor) said that we should know the economics and commercial basis on which State companies operated and the extent to which competition was taking place so that we would be better able to form an opinion. That is only one leg of my argument. I do not think that the hon. Member for Argyll (Mr. MacCormick) supported what my hon. Friend proposed. The new clause takes the argument one stage further and asks the Government to put an obligation on the Agency to ensure that when it operates in competition, as inevitably it will do, with existing firms, there will be proper recognition of the effect that that may have on those firms.
      Uneconomic or subsidised competition with private industry could have two basic effects. The first relates to the profitability of other firms within an industry. Let us suppose that there is over-capacity in an industry. Plainly it is undesirable that there should be over-capacity of, for instance, newspaper production in Scotland. If the Agency were to maintain a firm in that industry instead of allowing orderly contraction or rationalisation to take place, it would have a serious effect on the profitability of other firms within the industry, which if that firm was not propped up and helped but went out of existence would enjoy a more profitable and perhaps a more viable position.
      If the Agency is used to prop up firms which should be allowed to disappear, diversify or rationalise and to preserve capacity in an industry when it would not be desirable economically in the long term, it will do a disservice not only to those firms, which may eventually go to the wall, but to other firms in the industry by making it more difficult for them to operate economically and profitably.
      I come to the fundamental connection between profitability and jobs. If a firm is not profitable, it will not be able to continue in operation. If it is not able to continue in operation, it will not be able to offer security of employment. That has

      305
      been the dilemma of successive Governments when faced with the question of what to do about a firm in difficulties. The long-term economic situation of the industry might not justify the process which I have outlined. As a result of the element of competition or over-capacity, we may put at risk the jobs of those working in other firms in the same industry. That is why I put forward the new clause.
      A problem must be faced by the Scottish Development Agency. It has faced Governments of all parties in the past. It concerns the position of firms in the industry when State intervention occurs. Therefore, we specify in the new clause that where the Agency becomes involved in uneconomic or subsidised competition with private industry, and where other firms in that industrial sector are aggrieved and feel that it affects their viability, they can make a complaint to the Secretary of State, who can ask for that complaint to be investigated in the way we suggest. We also suggest that a record of this should be made at the office of the Agency.
      The Minister said that the Agency will engage in its activities in a commercial manner and will have an obligation to pay its way. I am glad to hear those assurances. However, that does not solve the problem, which is not confined to the Agency, where the Government become involved in an industry such as shipbuilding or the motor industry, not because they regard it as a commercial and profitable occupation but because there is a reason for helping an industry or firm which is in difficulties during a transitional phase. For a short period there might be a degree of competition which some might regard as unfair. I am concerned that the Agency may engage in activities which might affect the longer-term viability of other firms in the same industry and put further jobs at risk.
      I do not question the need for the Agency to become involved in that type of operation. In some circumstances there may be a need for the Agency to become involved in that way. However, where the Agency becomes involved, proper cognisance should be taken of the effect that the Agency's activities have on other firms in the industry to make sure that they are not discriminated against unfairly. If there is unfair discrimina-
      306
      tion, profitability will suffer and the jobs of those working in other firms will be put at risk. It would be a dangerous policy if for the sake of propping up an individual firm we put at risk many jobs throughout the industry.
      In that spirit I put forward the new clause. It is constructive in that it will help industry throughout Scotland and the work of the Agency. It may help the Agency better to understand its functions and to receive acceptance by Scottish industry when it becomes engaged in the activities envisaged in the Bill.
      6.45 p.m.
      Mr. Russell Fairgrieve: Like my hon. Friend the Member for North Angus and Mearns (Mr. Buchanan-Smith), I am worried about uneconomic or subsidised competition. There are dangers whenever Governments become involved in industry. We have learned that Governments, of whatever political party, are not the best institutions to run industry.
      I should like to give some examples illustrating the dangers we may encounter if the clause is not accepted. We have the example of the nationalised industries, some of which have been running for the past 25 years. For example, instead of merely producing gas, the gas industry has entered into competition by selling fitments and installing pipes in houses. In many cases, we know that its activities are uneconomic. The same happens with the electricity industry, where the electricity boards quote figures for installations which are subsidised and totally uneconomic. Another example is to be found in the direct labour departments of local authorities, which do not even ask for competitive tenders. We know how costly are such works.
      I cite the Petroleum and Submarine Pipe-Lines Bill, which provides another example of what happens when the Government become involved in an industry. That Bill aims to set up the British National Oil Corporation. The Minister, a new fireball of energy when transferred from his previous Department, presented us with what he thought was a new concept of nationalised industries, which was different from the Morrison concept. The Corporation was to be a commercial proposition and would enter into competition.

      307
      I should like to quote the first three decisions taken by the Corporation to see whether they were commercial or political. First, the BNOC is to be relieved of petroleum revenue tax, which will put it in a highly competitive position. The next decision was the location of the headquarters. I thought that the oil was situated off the North-East Coast of Scotland. Were the headquarters situated in Aberdeen? No, they were established in Glasgow. Was that a commercial or a political decision? There was a long search to find a chairman. Was an expert appointed who knew the oil industry backwards? No, a retired Socialist supporter from the textile industry was appointed. The first three decisions of the Corporation were not commercial decisions. They were political decisions. That is the danger when a Government intervene in industry. That is why I support the new clause.
      I recently returned from a short trip to Norway. Many Norwegians told me that Statoil is a Norwegian national disaster. I do not wish to see similar bodies set up in this country.
      Mr. William Small: I should explain that Sir William Gray, the Chairman of the Scottish National Development Agency, and I are friends.
      I understood the reference to Albion Motors, but I shall not go into the list of failures of State enterprises which the Opposition enumerated. However, I note the many failures of private enterprises.
      Under the new clause it is a priori the first task of the Agency and its chairman to take all reasonable steps to ensure that its activities are not unfair to private enterprise. That is a criterion on which to operate, stimulate and reinvigorate Scottish industry. The provision of £200 million will not stimulate unfair competition. This sum is provided to stimulate new enterprises.
      It would be peculiar for a complaint made to the Scottish Development Agency to be referred to the Secretary of State and for the Secretary of State to appoint "suitably qualified persons" to consider it. What are the criteria for the appointment of suitably qualified persons to determine whether there is competition
      308
      between public and private enterprise? I challenge any hon. Member to think of even one such neutral man who could be appointed. To that extent the clause is nonsense, and in introducing it the hon. Member for North Angus and Mearns (Mr. Buchanan-Smith) is acting like a demented woman.
      Mr. Millan: I agree with a good deal of what the hon. Member for North Angus and Mearns (Mr. Buchanan-Smith) said, although I cannot recommend the House to adopt the clause, for reasons which I shall explain.
      As I have said on numerous occasions, the Scottish Development Agency will be expected to act in its industrial role competitively and commercially. That is the answer to the clause. There is an assumption in the clause that the SDA will not act in that way but will act in a non-commercial manner so that it is necessary to set up a watchdog to observe its activities. From that point of view the clause is fundamentally misconceived.
      The hon. Gentleman put forward several valid arguments. When the Government get involved in a selective way in assisting one firm but not every firm, that is discriminatory and by definition it introduces an element of unfair competition. That will not be done by the SDA. That is done by selective assistance under the Industry Act 1972. Although I have stressed this argument on several occasions, it is not yet fully appreciated—certainly in Scottish industry—that if one is looking for Government intervention which is discriminatory between one firm and another, thereby giving unfair advantage to one firm as against another, one should look at the selective assistance given under the 1972 Act, which is by definition discriminatory, and not to the activities of the SDA, which in its industrial function has to act on a competitive and commercial basis.
      Scottish industry has sensibly been taking advantage of selective financial provisions since the Industry Act 1972 was passed. During those three years about 450 firms have received selective assistance. In each case, that selective assistance was a Government intervention in the free play of market forces and was by definition discriminatory in favour of

      309
      the firm that was helped and discriminatory against firms in the same line of activity which were not helped. There is no way of operating selective assistance except on that basis.
      Far from the Government having tried to disguise that position, when my right hon. Friend the Member for Bristol, South-East (Mr. Benn) became Secretary of State for Industry it was decided that information on the selective assistance that was given should be made publicly available on a quarterly basis. There may be a de minimis rule, but a list of firms which are helped is now published. That was not provided for by the 1972 Act. During the passage of the 1972 Bill the Labour Opposition wanted more openness, but it was resisted by Conservative Ministers. We wanted openness to see what the Government were doing, but selective assistance is discriminatory by definition whether it is given to Upper Clyde Shipbuilders as against the Lower Clyde Shipbuilders, to the car industry or to any other industry.
      If we wish to insert into an Act of Parliament a provision to enable industry to complain about discriminatory Government intervention, that provision should go into the Industry Act 1972 and should be directed against Section 7 and Section 8 assistance. It should not go into the Scottish Development Agency (No. 2) Bill, where it would be irrelevant.
      Even if the clause were relevant, it does not explain what action will be taken if it is proved that selective intervention is discriminatory against existing elements of private industry. The only action that can be taken to remove unfair competition is to remove the selective assistance. The provisions of the 1972 Act for selective assistance would therefore be rendered completely nugatory if on a complaint one had to take the only sensible and reasonable action available, which is to remove altogether the selective assistance. Only by doing that should we be able to put all the firms in a particular industry on absolutely level terms.
      The hon. Gentleman put his finger on the important consideration concerning selective assistance that it is discriminatory and that by helping one firm one might damage another firm. I agree with
      310
      that, but the answer is not to put into the Bill a clause which is not relevant to the Bill but is perhaps relevant to another situation. If we were to try to deal with that consideration in this legislation, the clause would have to be drafted in more precise terms.
      I sympathise with a good deal of what (he hon. Gentleman said and appreciate that this is a genuine difficulty of any Government, but for the reasons that I have outlined I cannot recommend acceptance of the clause.
      Mr. Teddy Taylor: The Minister has given a disappointing reply which contains no valid reason for not pressing ahead with the clause. His first argument for rejecting it is that there is other discrimination, for example in Section 7 assistance. If that argues anything, it argues the need for an appeal procedure for Section 7 assistance also. That is not a comparable situation. Under the Bill the SDA will be able to engage in commercial activities, setting up new firms and so on, but Section 7 assistance is primarily designed to cope with an emergency or a rescue operation.
      Mr. Millan: With respect, there have not been 450 emergencies and rescue operations in Scotland in the past three years. Only a small proportion of the Industry Act cases come under the heading of rescue or emergency. We have more than 300 applications for assistance currently active under the supervision of the Scottish Economic Planning Department, only a small fraction of which are emergency and rescue operations.
      Mr. Taylor: The Minister is referring to Industry Act assistance whereas I am referring to Section 7 assistance. If there are 300 applications for Section 7 assistance and if a large number are successful, the fears of my hon. Friend the Member for North Angus and Mearns (Mr. Buchanan-Smith), who expressed concern about the Industry Act 1972, become even more valid. If that is so, Section 7 goes much further than it was designed to go when the Conservative Government brought forward the Industry Bill of 1972. If that justifies anything it is the need for something comparable to be introduced in respect of the Industry Act.

      311
      7.0 p.m.
      The Minister has failed to give us any indication of how the introduction of the clause would cause damage or unfairness to anyone. Will it cause delay? Of course not. Will it cause unfairness? It will not do so in any way. Will it cost a great deal of money? It obviously will not cost very much.
      The Minister must be aware that the main concern of Scottish industry in expressing concern about the Bill is the fear of unfair, subsidised and uneconomic competition. All that we are asking in the clause is that the Agency shall take all reasonable steps—these are words we have had many a time despite what the hon. Member for Glasgow, Garscadden (Mr. Small) has said—to ensure that it does not engage in uneconomic or subsidised competition with private industry. That does not mean that in every endeavour it must ensure that there is total parity. It merely seeks to ensure that private firms will not be unfairly treated and will not be forced to engage in competition on an uneconomic or subsidised basis.
      Mr. MacCormick: I agree with many of the things that the hon. Gentleman has said. For example, the Highlands Development Board has before it a case from the Isle of Mull in which an incoming business has been helped with Government funds, when an established firm doing exactly the same thing will probably be forced out of business. Is that what the hon. Gentleman is pointing out?
      Mr. Taylor: That is exactly the kind of situation of which I am thinking. I am afraid that many Labour Members have failed to recognise that by giving subsidies, and spending a great deal of money in an attempt to save jobs, the result can be exactly that which the hon. Member for Argyll (Mr. MacCormick) has suggested—namely, the destruction of existing jobs. That has happened already in some industries. If the Minister of State looks at the figures given to me last Wednesday by the Secretary of State for Industry about aid to the shipbuilding industry, he will notice that the lion's share will go to one small sector of the industry which is State-owned. Unfair competition of that
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      nature can destroy jobs as well as save them in the short term.
      We are suggesting not a total overhaul of Government policy but the establishment of an appeal mechanism to deal with any cases of unfairness. Such a mechanism would provide for the example cited by the hon. Member for Argyll. If someone were to say "My firm is being ruined. I am in danger of having to dismiss my employees because State subsidies have resulted in unfair competition", there would be somewhere for the representatives of the complainant firm to go to register their complaint. We are not saying that there should be a judge who should make determinations, but people should be appointed who would have the task of investigating allegations of unfair competition.
      The second argument advanced by the Minister was that there will be no unfair competition. I do not believe that. I accept that the Minister intends that to be the position. I am sure that in the beginning the SDA will hope that the competition will be fair and that the Agency will engage in its activities in a commercial and economic manner, but all our experience of the history of State participation in industry shows that that does not happen in practice. If State firms have access to cheap money and unlimited subsidies, or limited subsidies, there can never be fair or reasonable competition.
      Apart from that argument, I hoped that some Labour Members might support the clause for different reasons. The hon. Member for Central Ayrshire (Mr. Lambie) is always arguing that State intervention is good, that State firms are efficient and that public participation is a splendid thing. If that is so, and if State firms are being unfairly attacked by the private sector, I must observe that I have heard the hon. Gentleman attacking an organisation which fairly stands up for private enterprise—namely, Aims of Industry. I have heard the hon. Gentleman saying unkind things about that organisation because from time to time it attacks State firms and State intervention. If the attacks are unfair, what is wrong with their being investigated?

      313
      I refer to a case which is not comparable but which is relevant. I receive many complaints—doubtless this is the experience of the hon. Member for Garscadden—about people living in council houses as a result of unfair allocations. When I receive such complaints I always contact the housing manager, pointing out that a complaint has been made that someone has a house which should not have been allocated to him. I make it clear that it is suggested that there has been a "fiddle" or bribery or that someone has been given a house because he is black, white or green. I have always received a full explanation, which I pass on to the people making the complaint. I can say that in 49 out of every 50 cases of that nature, the explanations I have received have been satisfactory, and that action has been taken in the remaining cases because the authorities had not been fully aware of the position.
      Surely we can proceed in the same way as regards State industry. If State industries are unfairly attacked, there should be some mechanism whereby their activities can be fully investigated. What is unfair in that? If the Minister were to say that the mechanism which we suggest is unnecessary and unfair, and that a private firm believing it was being subjected to unfair competition which was threatening to put it out of business could write to the relevant Member of Parliament or to Sir William Gray, I would suggest that it would be more effective to provide proper machinery whereby such matters could be investigated by people who did not have an axe to grind. It is important not only that we should investigate complaints but that they should be investigated by someone who is reasonably independent.
      I would not argue that the wording of the clause is exactly right. We have said that the Secretary of State should
      "appoint suitably qualified persons to investigate and report on the complaint to him;".
      We thought that if the Government supported the principle of the clause they could suggest the best people to be appointed. I think that those appointed should not be directly involved as employees of the Government in any other way. We suggest that a record of complaints and the action taken on them should be available. The Minister asked what would be the point of investigating
      314
      if nothing was done about it afterwards. If there were an independent inquiry which could say that there had been grossly unfair competition which was doing damage to a private firm, the mere reporting of the matter and the subsequent investigation would undoubtedly force action on the part of the Government or the SDA.
      Mr. Gordon Wilson: I direct the hon. Gentleman's attention to the phrase
      "uneconomic or subsidised competition".
      The substance of the phrase might extend far beyond what he and his colleagues have in mind. The phrase might involve projects which the Agency has started up as new undertakings. As we all know, whether an industry starts with the help of State support or with the help of private capital, it probably takes about three years before it reaches the breakeven point. In the meantime, the operation of such a company might be construed as being uneconomic or subsidised competition as against another firm. Obviously, capital would be used for a supportive purpose during the first few months or years of the operation of such a firm.
      Mr. Taylor: That is quite true. I am not in any way wanting to say that a firm which will lose money for the first few years should be regarded as uneconomic competition. A private firm setting up a new enterprise involves much capital expenditure for the first few years. However, I want to ensure that there should not be cheap capital for State firms and dear capital for private firms, and thereby fewer jobs in the private sector. If there were any doubt about this, it would be dealt with by the words
      "Take all reasonable steps to ensure".
      That enables the Agency to have a certain degree of flexibility. Although I do not think that the wording I have proposed would have the effect which is suggested, I hope it will be agreed that we can express an opinion as to the kind of situation we want to achieve. If the wording is not perfect something can be done to improve it.
      If we put this new clause into the Bill and a State firm receives a degree of support by way of interest rates lower than those which can be obtained in the

      315
      private sector, action can be taken. If the hon. Gentleman has good grounds for saying that "uneconomic" is the right word and that suitably qualified persons should look at the complaint, the only basis on which they could report on a complaint of uneconomic competition would be if the finance had been made available to the State concern at a rate which was unfair to the private sector and which might result in a loss of jobs for the private sector.
      Mr. Gordon Wilson: The hon. Gentleman has mentioned something which troubled me, namely that a cheap loan could be regarded as subsidised competition. If cheaper loans than those available on the market can be supplied, so be it. Does not the hon. Gentleman's real complaint about uneconomic and subsidised competition relate to continued cash subsidies or cash investment on a revenue basis rather than a subsidised capital basis?
      Mr. Taylor: That is my main complaint. I am anxious to avoid the situation that a firm is subsidised by the State and is losing, say, £500,000 a year but is paying wages which a private firm trying to make a profit cannot afford. I am seeking to achieve reasonable parity and justice. I want to make sure that State firms do not have an unfair advantage simply because they have access to public funds.
      This is a real fear which has shown itself on many occasions in British industry ever since State participation began. We want an appeals machinery to which a private industrialist may turn if he feels that he is suffering from unfair State competition. There must be someone who can investigate the complaint fairly and reasonably and then publish his report and the action he has taken. We of the Opposition do not always get our
      drafting right but we are near to it here. Our intention is clear. It is fair to the public and private sectors for a complaint of subsidised competition to be investigated and for the facts to be known. It is fair to the private sector and it is also fair to the public sector. Some public sector firms believe themselves to be unfairly affected.
      Mr. Small: The practicality of the hon. Gentleman's suggestion is that he would give suitable persons the powers of a Royal Commission. They would be able to send for persons and papers relating to any company and would be able to make such papers public. That would be the result of the bad drafting of the new clause.
      Mr. Taylor: I do not accept that the drafting is bad. It may be open to certain interpretations. It is a good deal better than some of the Government's drafting. The hon. Gentleman is going too far in talking about Royal Commissions. All I am saying is that there should be power to appoint a suitable person to investigate and to report. Would the hon. Gentleman think it fair if a private employer in his constituency was put out of business as a result of subsidised, uneconomic competition? At present nothing can be done about such a situation. An independent inquiry should be available.
      This is a desperately important point. If the Minister is to remove the fears which private industry has about the Bill, he should support the principle of the new clause. He has not done so. For that reason, I hope that hon. Members will vote for the new clause so that we may have reasonable protection against unfair or subsidised competition.
      Question put, That the clause be read a Second time:—
      The House divided: Ayes 207, Noes 229.

      Division No. 346.]

      AYES

      [7.15 p.m.

      Adley, Robert

      Body, Richard

      Clarke, Kenneth (Rushcliffe)

      Aitken, Jonathan

      Boscawen, Hon Robert

      Cockcroft, John

      Alison, Michael

      Bottomley, Peter

      Cooke, Robert (Bristol W)

      Arnold, Tom

      Bowden, A. (Brighton, Kemptown)

      Cope, John

      Atkins, Rt Hon H. (Spelthorne)

      Brittan, Leon

      Cordle, John H.

      Awdry, Daniel

      Brotherton, Michael

      Costain, A. P.

      Bain, Mrs Margaret

      Buchanan-Smith, Alick

      Crawford, Douglas

      Baker, Kenneth

      Bulmer, Esmond

      Crouch, David

      Banks, Robert

      Carlisle, Mark

      Crowder, F. P.

      Beith, A. J.

      Carr, Rt Hon Robert

      Davies, Rt Hon J. (Knutstord)

      Bell, Ronald

      Churchill, W. S.

      Dean, Paul (N Somerset)

      Bitten, John

      Clark, Alan (Plymouth, Sutton)

      Dodsworth, Geoffrey

      Biggs-Davison, John

      Clark, William (Croydon S)

      Douglas-Hamilton, Lord James

      Drayson, Burnaby

      Johnson Smith, G. (E Grinstead)

      Rawlinson, Rt Hon Sir Peter

      du Cann, Rt Hon Edward

      Jones, Arthur (Daventry)

      Rees, Peter (Dover & Deal)

      Durant, Tony

      Jopling, Michael

      Reid, George

      Eden, Rt Hon Sir John

      Joseph, Rt Hon Sir Keith

      Renton, Rt Hon Sir D. (Hunts)

      Edwards, Nicholas (Pembroke)

      Kershaw, Anthony

      Rifkind Malcolm

      Elliott, Sir William

      Kimball, Marcus

      Rippon, Rt Hon Geoffrey

      Eyre, Reginald

      King, Tom (Bridgwater)

      Roberts, Michael (Cardiff NW)

      Fairgrieve, Russell

      Kitson, Sir Timothy

      Rossi, Hugh (Hornsey)

      Farr, John

      Knox, David

      Royle, Sir Anthony

      Fell, Anthony

      Lamont, Norman

      Sainsbury, Tim

      Finsberg, Geoffrey

      Latham, Michael (Melton)

      St. John-Stevas, Norman

      Fisher, Sir Nigel

      Lawrence, Ivan

      Scott, Nicholas

      Fletcher-Cooke, Charles

      Lawson, Nigel

      Shaw, Giles (Pudsey)

      Fookes, Miss Janet

      Lester Jim (Beeston)

      Shelton, William (Streatham)

      Fox, Marcus

      Loveridge, John

      Shepherd, Colin

      Fraser, Rt Hon H. (Stafford & St)

      MacCormick, Iain

      Shersby, Michael

      Fry, Peter

      Macfarlane, Neil

      Silvester, Fred

      Galbraith, Hon. T. G. D.

      MacGregor, John

      Sims, Roger

      Gardiner, George (Reigate)

      Macmillan, Rt Hon M. (Farnham)

      Sinclair, Sir George

      Gardner, Edward (S Fylde)

      McNair-Wilson, M. (Newbury)

      Skeet, T. H. H.

      Gilmour, Rt Hon. Ian (Chesham)

      McNair-Wilson, P. (New Forest)

      Smith, Dudley (Warwick)

      Gilmour, Sir John (East Fife)

      Madel, David

      Speed, Keith

      Glyn, Dr Alan

      Marshall, Michael (Arundel)

      Spicer, Michael (S Worcester)

      Godber, Rt Hon Joseph

      Marten, Neil

      Sproat, Iain

      Goodhew, Victor

      Mates, Michael

      Stainton, Keith

      Goodlad, Alastair

      Mather, Carol

      Stanbrook, Ivor

      Gorst, John

      Maude, Angus

      Steen, Anthony (Wavertree)

      Gow, Ian (Eastbourne)

      Mawby, Ray

      Stewart, Ian (Hitchin)

      Gower, Sir Raymond (Barry)

      Maxwell-Hyslop, Robin

      Stokes, John

      Gray, Hamish

      Mayhew, Patrick

      Stradling Thomas, J.

      Grieve, Percy

      Meyer, Sir Anthony

      Taylor, R. (Croydon NW)

      Grimond, Rt Hon J.

      Mills, Peter

      Taylor, Teddy (Cathcart)

      Gray, Hamish

      Mayhew, Patrick

      Temple-Morris, Peter

      Hall-Davis, A. G. F.

      Mitchell, David (Basingstoke)

      Thomas, Rt Hon P. (Hendon S)

      Hamilton, Michael (Salisbury)

      Moate, Roger

      Thompson, George

      Hampson, Dr Keith

      Montgomery, Fergus

      Thorpe, Rt Hon Jeremy (N Devon)

      Hannam, John

      Moore, John (Croydon C)

      Townsend, Cyril D.

      Harvie Anderson, Rt Hon Miss

      More, Jasper (Ludlow)

      Trotter, Neville

      Hastings, Stephen

      Morgan-Giles, Rear-Admiral

      Van Straubenzee, W. A.

      Havers, Sir Michael

      Morris, Michael (Northampton S)

      Vaughan, Dr Gerard

      Hawkins, Paul

      Morrison, Hon Peter (Chester)

      Viggers, Peter

      Hayhoe, Barney

      Mudd, David

      Wainwright, Richard (Colne V)

      Henderson, Douglas

      Neave, Airey

      Wakeham, John

      Heseltine, Michael

      Nelson, Anthony

      Walder, David (Clitheroe)

      Hicks, Robert

      Neubert, Michael

      Wall, Patrick

      Higgins, Terence L.

      Newton, Tony

      Watt, Hamish

      Hordern, Peter

      Nott, John

      Wells, John

      Howe, Rt Hon Sir Geoffrey

      Oppenheim, Mrs Sally

      Welsh, Andrew

      Howell, David (Guildford)

      Page, Rt Hon R. Graham (Crosby)

      Wiggin, Jerry

      Howells, Geraint (Cardigan)

      Parkinson, Cecil

      Wilson, Gordon (Dundee E)

      Hunt, John

      Pattie, Geoffrey

      Wood, Rt Hon Richard

      Hurd, Douglas

      Penhaligon, David

      Young, Sir G. (Ealing, Acton)

      Hutchison, Michael Clark

      Peyton, Rt Hon John

      Younger, Hon George

      Irving, Charles (Cheltenham)

      Pink, R. Bonner

      James, David

      Price, David (Eastleigh)

      TELLERS FOR THE AYES

      Jenkin, Rt Hon P. (Wanst'd & W'df'd)

      Pym, Rt Hon Francis

      Mr. Anthony Berry and

      Jessel, Toby

      Raison, Timothy

      Mr. Adam Butler.

      NOES

      Abse, Leo

      Carter-Jones, Lewis

      Douglas-Mann, Bruce

      Allaun, Frank

      Cartwright, John

      Dunn, James A.

      Anderson, Donald

      Clemitson, Ivor

      Dunnett, Jack

      Armstrong. Ernest

      Cocks, Michael (Bristol S)

      Dunwoody, Mrs Gwyneth

      Ashley, Jack

      Cohen, Stanley

      Edelman, Maurice

      Atkins, Ronald (Preston N)

      Coleman, Donald

      Edge, Geoff

      Atkinson, Norman

      Colquhoun, Mrs Maureen

      Edwards, Robert (Wolv SE)

      Barnett, Rt Hon Joel (Heywood)

      Conlan, Bernard

      English, Michael

      Bean, R. E.

      Cook, Robin F. (Erin C)

      Evans, Fred (Caerphilly)

      Bennett, Andrew (Stockport N)

      Corbett, Robin

      Evans, Gwynfor (Carmarthen)

      Bidwell, Sydney

      Cox, Thomas (Tooting)

      Evans, Ioan (Aberdare)

      Bishop, E. S.

      Craigen, J. M. (Maryhill)

      Ewing, Harry (Stirling)

      Blenkinsop, Arthur

      Crawshaw, Richard

      Fernyhough Rt Hon E.

      Boardman, H.

      Crosland, Rt Hon Anthony

      Fitch, Alan (Wigan)

      Booth, Albert

      Cryer, Bob

      Flannery, Martin

      Boyden, James (Bish Auck)

      Cunningham, G. (Islington S)

      Fletcher, Ted (Darlington)

      Bray, Dr Jeremy

      Davidson, Arthur

      Foot, Rt Hon Michael

      Brown, Hugh D. (Provan)

      Davies, Bryan (Enfield N)

      Forrester, John

      Brown, Robert C. (Newcastle W)

      Davies, Denzil (Llanelli)

      Fowler, Gerald (The Wrekin)

      Buchanan, Richard

      Davies, Denzil (Llanelli)

      Fraser, John (Lambeth, N'w'd)

      Butler, Mrs Joyce (Wood Green)

      Deakins, Eric

      Freeson, Reginald

      Campbell, Ian

      Dean, Joseph (Leeds West)

      Garrett, W. E. (Wallsend)

      Canavan, Dennis

      Delargy, Hugh

      George, Bruce

      Cant, R. B.

      Dempsey, James

      Gilbert, Dr John

      Carter, Ray

      Doig, Peter

      Ginsburg, David

      Gould, Bryan

      Madden, Max

      Short, Rt Hon E. (Newcastle C)

      Gourlay, Harry

      Magee, Bryan

      Silkin, Rt Hon John (Deptford)

      Graham, Ted

      Mallalieu, J. P. W.

      Silkin, Rt Hon S. C. (Dulwich)

      Grant, George (Morpeth)

      Marquand, David

      Sillars, James

      Grocott, Bruce

      Marshall, Dr. Edmund (Goole)

      Silverman, Julius

      Hamilton, James (Bothwell)

      Marshall, Jim (Leicester S)

      Skinner, Dennis

      Harrison, Walter (Wakefield)

      Maynard, Miss Joan

      Small, William

      Hart, Rt Hon Judith

      Meacher, Michael

      Snape, Peter

      Hatton, Frank

      Mellish, Rt Hon Robert

      Spearing, Nigel

      Hayman, Mrs Helene

      Mikardo, Ian

      Spriggs, Leslie

      Heifer, Eric S.

      Millan, Bruce

      Stallard, A. W.

      Horam, John

      Miller, Dr M. S. (E. Kilbride)

      Stoddart, David

      Howell, Denis (B'ham, Sm H)

      Miller, Mrs Millie (Ilford N)

      Stott, Roger

      Hoyle, Doug (Nelson)

      Molloy, William

      Strang, Gavin

      Hughes, Rt Hon C. (Anglesey)

      Moonman, Eric

      Strauss, Rt Hon G. R.

      Hughes, Robert (Aberdeen, N)

      Morris Alfred(Wythenshawe)

      Summerskill, Hon Dr Shirley

      Hughes, Roy (Newport)

      Morris, Charles R. (Openshaw)

      Swain, Thomas

      Hunter, Adam

      Morris, Rt Hon J. (Aberavon)

      Taylor, Mrs Ann (Bolton W)

      Irvine, Rt Hon Sir A. (Edge Hill)

      Mulley, Rt Hon Frederick

      Thomas, Dafydd (Merioneth)

      Irving, Rt Hon S. (Dartford)

      Murray, Rt Hon Ronald King

      Thomas, Ron (Bristol NW)

      Jackson, Miss Margaret (Lincoln)

      Newens, Stanley

      Thorne, Stan (Preston South)

      Janner, Greville

      Noble, Mike

      Tierney, Sydney

      Jay, Rt Hon Douglas

      Oakes, Gordon

      Tinn, James

      Jeger, Mrs Lena

      Ogden, Eric

      Tomlinson, John

      Jenkins, Hugh (Putney)

      O'Malley, Rt Hon Brian

      Tomney, Frank

      Jenkins, Rt Hon Roy (Stechford)

      Orbach, Maurice

      Torney, Tom

      John, Brynmor

      Ovenden, John

      Varley, Rt Hon Eric G.

      Johnson, James (Hull West)

      Padley, Walter

      Wainwright, Edwin (Dearne V)

      Johnson, Walter (Derby S)

      Park, George

      Walden, Brian (B'ham, L'dyw'd)

      Jones, Alec (Rhondda)

      Parker, John

      Walker, Terry (Kingswood)

      Jones, Barry (East Flint)

      Parry, Robert

      Walker, Terry (Kingswood)

      Jones, Dan (Burnley)

      Pavitt, Laurie

      Ward, Michael

      Kaufman, Gerald

      Peart, Rt Hon Fred

      Watkins, David

      Kilroy-Silk, Robert

      Perry, Ernest

      Watkinson, John

      Kinnock, Neil

      Phipps, Dr Colin

      Weetch, Ken

      Lambie, David

      Price, C. (Lewisham W)

      Weitzman, David

      Lamborn, Harry

      Price, William (Rugby)

      Wellbeloved, James

      Lamond, James

      Radice, Giles

      White, James (Pollok)

      Lestor, Miss Joan (Eton & Slough)

      Rees, Rt Hon Merlyn (Leeds S)

      Whitehead, Phillip

      Lewis, Ron (Carlisle)

      Richardson, Miss Jo

      Whitlock, William

      Lipton, Marcus

      Roberts, Albert (Normanton)

      Wigley, Dafydd

      Litterick, Tom

      Roberts, Gwilym (Cannock)

      Willey, Rt Hon Frederick

      Lomas, Kenneth

      Robertson, John (Paisley)

      Williams, Alan Lee (Hornch'ch)

      Loyden, Eddie

      Roderick, Caerwyn

      Wilson, Alexander (Hamilton)

      Luard, Evan

      Rodgers, George (Chorley)

      Wise, Mrs. Audrey

      Lyons, Edward (Bradford W)

      Rodgers, William (Stockton)

      Woof, Robert

      McCartney, Hugh

      Rooker, J. W.

      Wrigglesworth, Ian

      McElhone, Frank

      Rose, Paul B.

      Young, David (Bolton E)

      MacFarquhar, Roderick

      Ross, Rt Hon W. (Kilmarnock)

      McGuire, Michael (Ince)

      Sandelson, Neville

      TELLERS FOR THE NOES:

      Maclennan, Robert

      Sedgemore, Brian

      Mr. J. D. Dormand and

      McMillan, Tom (Glasgow C)

      Shaw, Arnold (Ilford South)

      Mr. Joseph Harper.

      McNamara, Kevin

      Sheldon, Robert (Ashton-u-Lyne)

      Question accordingly negatived.

    New Clause 4

      ACCOUNTING FOR GRANTS FROM EEC FUNDS
      'In the event of the Agency receiving grants from the Regional Fund or any other Fund of the European Economic Community for any of its purposes and functions, the Agency shall be obliged to account for these funds and expenditures separately within its annual accounts'.—[Mr. Teddy Taylor.]
      Brought up, and read the First time.
      Mr. Teddy Taylor: I beg to move, That the clause be read a Second time.
      The Government will appreciate that they are losing the sympathy of the House. The last Division showed that the voting is going very much against
      320
      them. For that reason I hope that they will be reasonable in accepting an amendment which I think is an eminently reasonable one.
      It relates to the Common Market, a subject which received a considerable amount of attention during the recent referendum campaign. We are not in relation to this clause trying to debate the whole question of the Common Market. It has been made clear, as the Secretary of State indicated, that it may be some time before we see the advantages claimed for the Common Market, such as the improvement in our balance of payments, the improvement in our living standards, the strengthening of sterling, and the availability of food at reasonable prices. It would be wrong to have a debate on the extent to which the Common Market in the past two and a half

      321
      years has been helpful to our nation or has hindered it.
      I am seeking simply to provide that, in the event of the agency receiving grants from the Regional Fund of the Common Market, or any other fund of the EEC, for any of its purposes and functions, the Agency shall be obliged to account for these funds and expenditures separately within its annual accounts—in other words, showing the money from the Government in one column and the money from the Common Market in another. This is perfectly clear. It may be that this would be done in any event, in view of the Government's later amendment concerning the use of sound financial or commercial practices in accountancy. I hope that the Government will make it absolutely clear that this will be done.
      I raised this matter in an oblique way in Committee, on two grounds. First, I suggested that it was important to know whether the SDA would get money from the Common Market. My second ground was that there was doubt at that time about the whole question of additionality.
      It was argued during the referendum campaign by members of my own party, by members of the Labour Party, and by people in the Government at the present time who supported the Common Market, that the Regional Fund would ensure that more jobs would be made available, particularly in areas like Scotland. It was consistently stated by the Commission and by the Council of Ministers that the Regional Fund would be undermined if used other than as an addition to the grants made available by countries in their own regional development programmes.
      Since we discussed this in Committee on 22nd July there has been a dramatic and fundamental change in the Government's policy in this matter, for they announced during the recess that, instead of Regional Fund money being an addition to the regional aid programmes of the Government, as in other member States, the money would simply be used as a substitute for money which the Government would otherwise spend. If, for example, the Government were proposing to spend £100 on regional development next year, and expected to get £20 from the Regional Fund, under the new policy the Government expenditure would be reduced by £20. There would be £80 provided by
      322
      the Government plus £20 from the EEC. I understand that that has been objected to by the EEC Commission. Is it the Government's intention that the regional fund money will be extra money or will simply be taken off what the Government were intending to spend on regional development?
      7.30 p.m.
      The second argument for the new clause is that it is desperately important that we should know precisely how much money the Government intend to spend on regional development through the Agency. We have pressed them on several occasions today to give an indication of what cash will be available. We have merely received the comment from the Minister of State that we shall soon learn about it from the public expenditure White Papers. At a time when Scottish unemployment is rising at the rate of 1,000 a week, it is not good enough for the Government to say that they do not know how much money will be made available. The only indication in the Bill is that £200 million is the limit before the Government must come back to the House, but we have no indication of the amount for next year, the year after or the year after that. There is a profound suspicion that, because of the restraint on Government spending, only a very limited sum will be available to go ahead with the work of the Agency.
      Thirdly, there is now no doubt that the Agency will get some money from the regional fund. In Committee, the Minister of State said:
      "Clause 3, which includes a power for the Agency to accept grants, will cover the Agency's accepting grants from the EEC as well as from other sources."—[Official Report, 22nd July 1975; First Scottish Standing Committee, c. 495.]
      It is important that we should know how much money the Government are putting into the Agency and how much is coming from other sources—what is new Government money and what is regional fund money.
      Since I tabled new Clause 4, the matter has been overtaken by the Government's decision on additionality. It was a body blow to the regions, many of which, although being concerned about the Common Market, had accepted it because of the promises of the regional fund, to hear that they were not going to get money from the fund at all. To

      323
      that extent, the drafting of the new clause may have to be changed, but the Government have an obligation, because they took the opportunity of announcing their decision in the recess, to explain why they took it when they had said that the regional fund money would be extra, to provide for jobs in Scotland and other development areas, and when the Commission had said repeatedly that the regional fund should be extra money and that it would undermine the purpose if it were not so used.
      We have now had the first indication of the use of the regional fund. We are told that some of the money is being put to an advance factory building programme which the Government had already decided should go ahead, with the Government spending taxpayers' money for that purpose. Now, the regional fund will be used for it. This is a further indication that there will be no direct additionality, and it is a serious matter. If we had known about this before, the new clause would have been in a rather different form.
      It is important that the Government should indicate why they have decided to deprive the regions and Scotland of any direct benefit from the regional fund, about which so much was said during the referendum campaign and before, when membership of the EEC was a live issue, when the Secretary of State for Scotland took an active part, although we were deprived of much of his comments during the campaign. I hope that the Minister of State will at least now give an assurance that he will accept the new clause and ensure that we know thereby how much of the cash reaching the Agency comes from the Government and how much comes from other sources, including the EEC. I hope that the Minister will give us a clear answer and indicate the reason for the remarkable decision of the Government on additionality. Did the Secretary of State support this policy change?
      Mr. Millan: I do not know what would have been in new Clause 4 if it had been drafted in a different form at a different time by the hon. Member for Glasgow,
      324
      Cathcart (Mr. Taylor). It is no doubt an interesting speculation, but I have to deal with it as it is. The new clause does not deal with the wider issues; it deals only with the question whether any funds received by the Agency from the EEC should be separately identified in its accounts. Sums so received will be identified separately in the annual accounts. There is therefore no need for a separate clause to provide for that event.
      We already have power in Schedule 2(8) to prescribe the form of the accounts. Later tonight, we shall move an amendment to provide that the accounts shall conform to the best commercial standards. I give an assurance that we shall prescribe the form of the accounts in a way which will enable any sums from the EEC to be separately identified. Therefore, the purpose of the new clause will be met, and I cannot recommend a separate clause in the Bill to deal with the matter. It is unnecessary.
      Mr. Taylor: I thank the Minister of State for his clear assurance that there will be a separate account for the sums obtained from the regional fund or elsewhere, but it is extremely unfortunate that, given an opportunity to justify an astonishing decision made by the Government during the recess—a decision in which there must have been Scottish Office involvement, and one which will cause damage and perhaps extra hardship and unemployment to Scotland and other development areas—the Minister has chosen to say nothing.
      In Committee, we pressed the Government to say whether they accepted additionality. We have had no statement of any sort from any Minister on that score. Although I am grateful to the Minister of State for accepting the simple point of the new clause, it is shameful that he has dodged the issue of trying to justify a decision which is bad for Scotland and for the regions, and will do no good to the country as a whole.
      I beg to ask leave to withdraw the motion.
      Motion and Clause, by leave, withdrawn.

    New Clause 6

      DECENTRALISATION OF SCOTTISH DEVELOPMENT AGENCY ACTIVITIES
      "The Board of the Scottish Development Agency shall, as soon as is practicable, examine the means whereby the activities of the Scottish Development Agency shall be decentralised to local offices in the major centres on Scotland and at the same lime to arrange for the provision of a fixed annual level of spending autonomy to these local offices'.—[Mr. Crawford.]
      Brought up and read the First time.
      Mr. Douglas Crawford: I beg to move, That the clause be read a Second time.
      Mr. Deputy Speaker (Sir Myer Galpern): With this we shall take new Clause 7—Internationalism of the Scottish Development Agency—
      'The Board of the Scottish Development Agency should as soon as is practicable, examine means whereby the Scottish Development Agency can establish permanent bureaux in major world trade centres and to thereby arrange for the immediate technological transfer of new industrial thinking and developments to the Scottish Development Agency's headquarters in Scotland.'
      Mr. Crawford: These clauses are aimed at decentralising the activities of the Scottish Development Agency within Scotland and internationalising its activities beyond Scotland. It is no use substituting for centralisation in London centralisation in Glasgow or Edinburgh. The Highlands and Islands, the Borders, the North-East and the South-West of Scotland often feel as remote from Glasgow or Edinburgh as they do from London.
      One of the dangers of our time is the personal alienation that individuals experience in our society. We see it today in the new regions of Scotland—a monstrous bureaucratic growth imposed on local government in Scotland, conceived by the last Labour Government and brought to birth by the Conservative Government. We do not want industry and employees in various parts of Scotland to feel as remote and distant from the Agency as thousands of Scots are already beginning to feel from regional government in Scotland.
      In Committee, the Government moved an amendment to promote industrial democracy, which I supported. I do not
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      think that it would be easy to promote industrial democracy in Scotland from remote and centralised offices in Glasgow or Edinburgh. The creation of local offices throughout Scotland might help the more efficient promotion of industrial democracy. It is essential to take the Agency to all parts of Scotland and to see it operating on the ground.
      This is not a matter of increased bureaucracy; it is the exact opposite. If there were a small but highly directional group of offices in about half a dozen major centres in Scotland, fewer people would need to be employed at head office. The existence of local offices will imply a smaller travelling budget than if executives are based at Edinburgh or Glasgow. Moreover, there will be a less top heavy bureaucracy at headquarters.
      The last line of the new clause refers to
      "a fixed annual level of spending autonomy".
      This means that each year local offices will be given a fixed amount to spend on a given project without reference to headquarters. This will encourage more local enterprise in the offices. This is not directed to Strathclyde. Thanks to Westminster's neglect of Scotland as a whole and to the fact that Glasgow and much of the rest of Strathclyde have almost uninterruptedly, for the last half century, been under the care and control of the Labour Party, Strathclyde has 115 of the 121 worst areas of urban and social deprivation in the United Kingdom. For that reason a major job has to be carried out by the Agency in Strathclyde—but not to the detriment of other parts of Scotland. The Minister said in Committee that the Agency is for the whole of Scotland, and not for any one part. If that is so, its activities should be decentralised by way of local offices throughout Scotland.
      I turn to new Clause 7, which leads on from the decentralisation of the Agency within Scotland to its internationalisation beyond Scotland and overseas. We envisage that the Agency should act as an interface between all parts of Scotland and the international trade centres of the world. There are many international and multinational companies in Scotland, and we welcome their presence. They are there because of the excellent work carried out by the Scottish Council (Development and Industry) and

      327
      other more localised agencies. Part of the reason for the Scottish Council's success in this matter has been that it has had, from time to time, representatives in overseas countries and at major trade centres. It has always maintained fairly close links and friendship with business interests overseas.
      The new clause seeks to make the Scottish Council-type of arrangement more formal, more permanent and also more answerable.
      Technology is nothing if it is not international. Technological developments throughout the world have to be developed. Their implications must be transmitted with speed to Scotland if Scotland is to benefit from them and from technological investment, and if jobs are to be created. It is essential to have these technological developments monitored on the ground where they are taking place and to have joint ventures and licensing as well as export opportunities which can increase employment if they are transferred to Scotland from international offices overseas. If they are transmitted quickly back to Scotland, they must go from the Scottish Development Agency to the local offices throughout Scotland.
      The Scottish National Party does not accept that United Kingdom embassies and consulates overseas represent Scotland's interests as well as specific Agency representation abroad. Let us take, as an example the United States. Various states or even parts of states, have commercial offices in London seeking to sing the industrial and investment praises of those areas or States. It is the view of my party that Scotland has a far greater international status than the states of the United States.
      What exists overseas should be more than mirrored by the activities of the Scottish Development Agency overseas. That does not mean a lot of offices. I am talking in terms of a few—probably fewer than 10—bureaux overseas. Scotland has a great level of friendship overseas. If we are to promote Scotland's commercial advantage overseas, it is essential that we have these international bureaux and that they transmit what they discover and, we hope, translate it into job terms, not in one part of Scotland but throughout Scotland, in a decentralised way, via the local offices.
      7.45 p.m.
      Mr. Grimond: The Bill will inevitably greatly increase the already serious top heavy bureaucracy in Scotland, but there is no way out of that. That is a serious argument against the Bill.
      The hon. Member for Perth and East Perthshire (Mr. Crawford) is optimistic in thinking that if the Agency has local offices this will necessarily lead to less bureaucracy. I hope that it will, but there is the danger that we shall have an enormous central office and big local offices as well. If I were certain that that would not happen—I am very far from being anything like certain—I should support the plea that it should operate, as far as possible, on a decentralised basis.
      I believe that we should look at the experience of the Highlands and Islands Development Board. It found that it was getting much too centralised in Inverness, and too far away from the businesses and areas which it was supposed to be serving. To do it justice, I must point out that it has tried to decentralise by appointing local representatives all over the Highlands. Therefore, I should have a lot of sympathy if this Agency could decentralise its activities, although I do not believe that it will be able to decentralise all of them. I take this view so long as it does not mean a still further increase in its non-productive staff.
      I am seriously concerned about the number of people and the amount of resources given to the bureaucracy—resources spent on energy; indeed, resources of every sort—which are unproductively employed. That is a major factor in our economic distress, inflation and unemployment.
      I turn to new Clause 7. I am glad to hear that what I first of all gathered was an exercise in modern witchcraft in the drafting of the clause was a mistake. As originally drafted, it appeared that the headquarters were to be removed by technological transfer to an area of new industrial thinking. This conjured up visions of a marvel of modern technology. I am still surprised that so much stress is put upon new industrial thinking and development. Those features are important, but they can probably be attracted.
      I support the idea that smaller Scottish industries, such as the fish processing and

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      textile industries, need to be kept in touch with overseas markets. A great deal of processed fish is sold in the United States. The fish is processed in small factories, by small firms. They are having difficulty in keeping in touch with the market, finding out about developments, and undertaking the right sort of packaging. Scotland has many of these small industries, especially in the rural areas.
      I hope that the Agency will look at the promotion of Scottish products both at home and, as new Clause 7 indicates, abroad, and ensure that they are properly advertised, presented, packaged and assisted in transport and the whole process of marketing. Whether it is necessary to write that into a new clause is a matter for discussion. I have no doubt that the Government will say that the Agency can do all these things if it wants to, and will therefore ask why we should seek to put them in specifically.
      It is important to draw attention to the need to keep in touch with local development and small industries in Scotland and not to become fixed on Glasgow and Edinburgh, which are regarded, in many ways, as just as remote as London. It is important to emphasise that in many ways smaller industries in Scotland need assistance, admittedly over capital, but primarily over marketing.
      Mr. MacCormick: I agree with the right hon. Member for Orkney and Shetland (Mr. Grimond) on the question of bureaucracy, and whether, in relation to new Clause 6, by creating local offices the amount of bureaucracy involved is multiplied. I think not, because the new clause would give autonomy to local offices. Rather than having a large monolithic body based in Edinburgh, with one overlord making all the decisions, under our suggested framework there would be people in different areas of Scotland with authority to take decisions.
      The right hon. Member for Orkney and Shetland appositely mentioned the Highlands and Islands Development Board. The present Secretary of State is to be congratulated on setting up that board. One of his main reasons for doing so was, presumably, that that part of Scotland had had particular problems which could best be tackled by an office located in the Highlands. I agree that the more that the board can decentralise
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      its activities the better. However, even accepting that, and if one accepts that the board should continue when the Agency is established, it is logical to accept that the activities of the Agency, too, should be split up and proper consideration devoted to all parts of Scotland.
      The whole lesson of life in all Scottish rural areas for the past 50 or 60 years has been that the tremendous centralisation of decision-making—this applies not only to parts of Scotland, but to Scotland in relation to the rest of the United Kingdom—has led to a diminution of initiative and economic activity in the more far-flung parts. For that reason, I wholeheartedly support the new clause.
      Mr. George Thompson: There has been mention of the North and of the Islands. I want to point out how we in the South expect the new clause to affect us.
      The clause is crucially important to the more remote and more peripheral areas. It would appear from looking at a map of the United Kingdom that the South of Scotland is not a peripheral area, yet within England and within Scotland it seems to be just that.
      Mr. Canavan: Not within England, surely?
      Mr. Thompson: I mean that when studied on the map it will be seen that because the North of England is south of the border, the area north of the border is peripheral inside Scotland. I hope that I have now made the geographical position sufficiently clear.
      The remote and peripheral areas are largely rural areas. We in the rural areas have the right to expect that the Agency will do great and good things for us. The clause seeks to ensure decentralisation. We want decentralisation, not to weaken the Agency but to ensure that its attention is not totally directed to the Glasgow-Aberdeen-Edinburgh triangle and to ensure that it can act positively in areas such as the South of Scotland or in the Highlands and the Islands.
      Decentralisation to local offices in the major centres does not necessarily mean decentralising to major towns. A relatively small town can be a major centre in relation to a large area of the country. In the South of Scotland it might mean

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      a local office in Dumfries and one in the Border regions. It might prove desirable to have even greater decentralisation. An office in Dumfries and one on the eastern borders would make good sense, because the local office would be in close, frequent and personal contact with the regional council. I consider this to be eminently desirable.
      In my area of Galloway we are looking to the Agency to continue the good work that has been begun by the development commission and the regional council in preparing the ground for new factories. We are looking to the Agency to continue the good work of the Small Industries Council in negotiating small nursery factories in the area. These efforts can be best prosecuted if we have local offices of the Agency right there in the midst of the developments.
      The development commission started on the first phase of its work last year. It has paid a return visit to Galloway. I should say "Dumfries and Galloway". I must not allow my chauvinistic Gallovidianism to take away my knowledge of reality. On this visit it started work on the second phase. The Agency will be responsible for carrying that work forward. It is up to the House to ensure that the Agency has the best means available to achieve its goal in Dumfries and Galloway and in the South of Scotland in general. I believe that the goal can be nothing less than the rejuvenation of the old province of Galloway so that there will be a proper balance of population, and not more and more retired people coming in and a flood of young folk going out because there are no jobs for them.
      Mr. John Robertson: Does the hon. Gentleman have it in mind to get rid of the real influence which prevents development in Galloway? Galloway is probably the most feudalistic part of the United Kingdom.
      Mr. Thompson: I think that I might be treated as being the first blast of the trumpet against feudalism in Galloway.
      Mr. Robertson: Why not say so?
      Mr. Thompson: I am obliged to the hon. Gentleman for enabling me to proclaim myself as the first blast of the trumpet against feudalism in Galloway.
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      I hope that for many years Galloway will continue to blast the trumpet in the same direction. These are interesting sidelines, but I am sure that you, Mr. Deputy Speaker, would call me to order were I to go further.
      Mr. Deputy Speaker: A more appropriate instrument would be the bagpipes. The hon. Gentleman could blow them.
      Mr. Thompson: I take your point, Mr. Deputy Speaker.
      We also hope to have more jobs available in Galloway for young people who wish to stay in their own countryside. Many of our people like to return to their own countryside to live and to work. We should make this possible for them. This means a reversal of the depopulation from which we have suffered. The Agency, if it carries out these functions properly, will not only improve the industrial life of Galloway. It will contribute extensively to an enhanced social, cultural and intellectual life in the area.
      I have mentioned Galloway not because I think that it is the only area worthy of the consideration of the House but because I think it can be taken as a sort of paradigm case which might be taken as an example of what could be expected in other areas. The achievement of this goal will require a great deal of effort and money.
      I come finally to the second point that we seek to make in the clause. It would be most valuable if we introduced a certain amount of local autonomy in spending by local offices of the Agency. In Galloway and the rural areas of Scotland we are expecting great and good things from the Agency, and it is up to us to support these ideas. I commend the new clauses most heartily to the House.
      8.0 p.m.
      Mr. Millan: I agree that we want the Agency to have genuine all-Scotland functions and not to neglect any part of Scotland. I have made clear previously that this will be the position and I have equally made clear on numerous occasions that the main industrial and environmental problems are located in West Central Scotland, particularly in the Strathclyde region, and they must be the first priority for the Agency. It is not intended that more rural areas should be

      333
      neglected. Co-operation within the Scottish Development Agency and the Small Industries Council for Rural Areas of Scotland, which is provided for later in the Bill, will mean that right from the start the Agency will have staff who are well versed in the problems of rural areas and small towns and who have a creditable record of success in dealing with these problems over many years. This expertise will go straight into the Agency and it will start with a staff familiar with these problems before it gets staff familiar and competent to deal with the major industrial problems of West Scotland. There is no question of rural areas being negected in any way.
      We have already made arrangements for the Development Commission's activities in the South-West and, more recently, in the Grampians area to be continued. There will be a handing-over date to the Agency to ensure that there is no question of these activities slowing down. I have met the chairman of the Development Commission, who is, incidentally, based in London, to discuss these matters. The kind of visit to which the hon. Member for Galloway (Mr. Thompson) referred was not a visit by a local office but a visit by Donald Chapman from London, It was not necessary to have a local office to deal with the difficult problem in South-West Scotland.
      While we recognise that there should be all-Scotland activity, we are not anxious or willing to write such an organisational matter into the Bill. This is an area in which the Agency must decide for itself. Depending on its attitude towards this matter and the expertise it achieves in dealing with problems, it may want offices in other parts of Scotland. It will start with offices in Glasgow and Edinburgh. The Scottish Industrial Estates Corporation is based in Glasgow and the Small Industries Council for Rural Areas of Scotland is based in Edinburgh. The Agency may wish to have local offices elsewhere in Scotland and no doubt it will be willing to listen to representations made by hon. Members and others, but we should not write into the Bill that the Agency must have local offices in the so-called major centres of Scotland. I say "so-called" because it was clear from the description of the new clause by at least one hon. Member that the term "major centres" could cover a very large
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      number of individual localities in Scotland.
      To lay an obligation on the Agency to establish a whole series of offices in different parts of Scotland as one of its first obligations would be getting our priorities out of joint. I could not possibly recommend that to the House.
      The second part of the new clause provides for fixed annual levels of spending autonomy, and this again is a matter to be decided by the Agency. Whatever happens, it is unlikely that local offices will be able to go on their way without reference to headquarters. As the right hon. Member for Orkney and Shetland (Mr. Grimond) rightly said, if one spreads activities too thinly one can create bureaucracy and delay decision-making rather than improve it. One thing worse than having no one on the spot is having someone on the spot who has no authority and has to keep referring back to headquarters.
      The same kind of principle applies in the case of overseas representation by the Agency. There is nothing in the Bill to prevent the Agency from doing that in the best way it thinks would suit its activities, whether by permanent representation, agents or any other means. The Bill includes powers to promote Scottish industry, and there is a specific provision allowing the Agency to operate outside Scotland in any way it thinks is calculated to facilitate the discharge of its functions under the Bill. Everything is provided for in the Bill.
      The Agency would be able to operate in other parts of the world and have representation abroad to take advantage of developments of benefit to Scotland, but we should not write this in as an obligation, as it would be if new Clause 7 were accepted. That would be a misdirection of effort and we would be asking the Agency to direct its attention in early days in misdirected ways instead of getting on with the real job that needs to be done. Later, this would be a matter on which the Agency could make up its own mind.
      Without going into the merits of these clauses in any great detail, because the merits are less important than the principle behind them, I cannot recommend the House to accept them.
      Mr. Rifkind: While expressing my general agreement at what the Minister has said on both these new clauses, I have to say that the House is clearly grateful to the hon. Member for Perth and East Perthshire (Mr. Crawford) for introducing them. The wording of his new Clause 7 was corrected, and I was surprised that he did not find it necessary to clarify the wording of new Clause 6 also. It reads:
      "The Board of the Scottish Development Agency shall, as soon as is practicable, examine the means whereby the activities of the Scottish Development Agency shall be decentralised to local offices in the major centres on Scotland…".
      I know that the Scottish National Party sees itself as a separatist party, but I did not realise that it regarded Scotland as an island on its own.
      Mr. Crawford: That is a printer's error, and there is another in new Clause 3 where one of the hon. Member's colleagues has been given a new Christian name.
      Mr. Rifkind: I was not sure whether it was a printer's error or not. In its present form it is equally consistent with the policy of the hon. Member's party. I am surprised that he should wish to dissociate himself from the present wording. The Table Office clearly realised the true intentions behind the new clause and simply wished to fit in with his objectives. I accept his clarification on that point.
      It is important to stress that although the hon. Member has put forward a superficially attractive proposition with which at first glance no reasonable man could reasonably disagree, we have to go further and examine whether in practice his suggestion would produce benefits for Scotland that would justify the substantial expense involved. The clause looks innocuous. It simply refers to decentralising to local offices in the major centres of Scotland. The Minister has pointed out that nothing in the Bill would prevent the Agency decentralising if it wished. By putting a statutory obligation upon the Agency to decentralise to the major centres, we should be left to decide what was meant by "major centres". The hon. Member for Argyll (Mr. MacCormick) took the view that his constituency was a major centre and the hon. Member for Galloway (Mr. Thompson) seemed to feel the same.
      Mr. MacCormick: I hope that the hon. Member for Edinburgh, Pentlands (Mr. Rifkind) will check Hansard, because there he will see that I did not mention Argyll as being a major centre. I merely said that the Highlands and Islands Development Board was a useful analogy.
      Mr. Rifkind: I regret if I misunderstood the hon. Member, but when he said that an Agency with headquarters in Glasgow could not deal with matters in Argyll as efficiently as an office located in Argyll I assumed that he must be regarding Argyll as a major centre. He has not bothered to rise to answer that point, and I can only assume that he accepts what I have said to be true. No doubt he and his hon. Friends would regard Dumfries, Galloway and East and West Dundee and other areas as major centres.
      Clearly, if we were to accept the clause we should be incurring substantial expenditure. It is not simply a question of establishing an office, buying property and employing staff. We have to consider the duties that the sponsors of the clause wish to give these offices. They do not intend to ask the offices only to find out what is locally required or to advise the head office what might be desirable. They want to provide a fixed annual level of spending autonomy for the offices throughout Scotland. That is a terrifying suggestion because it would mean that anyone who approached the Agency for financial help for any industrial purpose might encounter totally different criteria in, say, Argyll than in Dumfriesshire.
      Mr. Robertson: Ten minutes ago I was convinced of the Government's case on this matter, but having heard the hon. Member for Edinburgh, Pentlands (Mr. Rifkind) I have grown to the opinion that locating the office anywhere away from Edinburgh would be satisfactory.
      Mr. Rifkind: The hon. Member for Paisley (Mr. Robertson) should bear in mind where the headquarters of the Agency will be. They will be closer to his constituency than mine, and on that basis it is I, not he, who should be calling for decentralisation. If he thinks that Glasgow's interests are totally contrary to those of Paisley, he will no doubt inform his right hon. Friend of that fact and

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      perhaps a special exemption will be made to benefit his constituents.
      If there are to be large numbers of offices, each with autonomous power to decide on applications for financial help, that must mean that different criteria will be applied in different parts of Scotland, not necessarily because of differing needs but because of the views of the officials as to what the suitable criteria should be. This will make a mockery not merely of parliamentary supervision of the Agency but of any overall comprehensive effort to ensure that the work of the Agency is relevant to Scottish needs. Hon. Members cannot escape from the fact that what they are suggesting is an irresponsible solution which will be enormously expensive and for which there will be very little to show.
      I turn now to new Clause 7 which appears in its new manifestation. We have to consider whether the expense involved will justify the very sparse benefits that the sponsors of the clause appear to be conceding would arise from the clause if it were accepted. From the wording, it would appear that the only, or certainly the major, reason for establishing permanent bureaux in major world trade centres is that they would
      "thereby arrange for the immediate technological transfer of the Scottish Development Agency's headquarters in Scotland to new industrial thinking and developments."
      The purpose is therefore to have information collected overseas to ensure that the Agency is aware of those developments.
      8.15 p.m.
      When there is already a whole collection of embassies throughout the world, even if they were, according to the dream of the Scottish National Party, Scottish embassies, it would be a duplication of effort also to have permanent bureaux and would impose a massive burden upon the Agency simply for the accumulation of information. The Scottish National Party might want to improve the services offered by the Scottish Council or by private means, or even by the British embassies, but to suggest that the limited funds available should be squandered on expensive bureaux is quite wrong. After all, if these offices are to be set up overseas they cannot be in shanty huts in the back streets of London, New York or
      338
      Tokyo. Presumably the hon. Member who moved the clause envisages offices that would give an impression of dignity and importance, and that would mean expenditure. If the hon. Member thinks it is worth spending millions merely to accumulate information which could be easily acquired by a British embassy or the Scottish Council, he is doing Scotland and his constituents a disservice.
      Mr. Gordon Wilson: I was disappointed by the speech by the hon. Member for Edinburgh, Pentlands (Mr. Rifkind). He showed signs of having closed his mind to the reception of new ideas. There is nothing particularly political in these suggestions. If he cared to study the terms of the clauses, he would see that they do not impose a strict direction upon the Agency. The Government have been much more open-minded in their approach. Nevertheless, I am disappointed that the Minister could not see his way to accepting the clauses, which, as he says, set out a principle.
      The first point to be borne in mind is that the clause provides that the board shall
      "as soon as is practicable, examine the means whereby"—
      and so on. In other words, at the outset the indication is given to the Agency that Parliament does not wish to see a tightly-centralised organisation. The clause does not lay down specific conditions affecting the Agency, and how is should proceed; it allows it a timetable by which it may consider the proposition, and it gives the Agency the right to consider how the various activities should be arranged, both at home and abroad.
      New Clause 7, contrary to what was said by the hon. Member for Pentlands, does not involve great expense. The equivalent Irish organisation has six offices throughout the world, in major centres. If Ireland, which is much smaller than Scotland, can accept the proposition that it is useful and worth while to have offices of this kind, there is no reason why we should not do the same.
      Developments abroad concerning employment which might arise from new technology would constitute essential information for the Agency, which could key in quickly on new developments. One of the successes of the Scottish Council resulted from an early understanding of

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      the developments taking place, many years ago, in electronics and the opportunities that they would give to Scotland in particular.
      Leaving aside the external operations of the Agency—on which I understand, from what the Minister said, there is no restriction anyway—and passing on to its more important domestic activities, I think that certain points can be made, First, the clause would not necessarily involve huge operations in the centres referred to; indeed, many of the advisory functions—the giving of advice on what sort of suitable expenditure might be made by way of loans or development grants—could be carried out through voluntary committees of those who are knowledgeable about the locality, with the expertise, managerial ability and knowledge of what is available coming from the officer of the Agency on the spot. To cut down duplication of offices, there is no reason why the Highlands and Islands Development Board should not undertake agency activities on the Agency's behalf. That may be one of the things the Government have in mind, because there will be these two organisations in any event.
      There is a plethora of development agencies in Scotland. One of our problems is that they sometimes trip over one another. An advantage of the Agency is that we shall be able to benefit from coordination of activities, but we must see that that co-ordination does not become rooted in centralisation, which could nip off true knowledge of what is happening in other areas of Scotland. If, at the outset, we build into the structure measures to prevent that, the Agency will be in a stronger position.
      As reference was made to my area, I should like to give one example of the way in which savings may be made. A political dog fight is going on between the Tayside Regional Authority and the Dundee District Council. They have two separate industrial development opera-
      tions neither of which is at present satisfactory, in my opinion. When I wrote to a foreign firm which wanted information about Dundee, I had to give seven separate addresses and telephone numbers of those who specialise in different matters.
      There is no reason why the office of the SDA in the Tayside area should not be much more acceptable than the un-co-ordinated activity now going on, because it is not involved in local politics to that degree. That is one example of the way in which we might even prevent the existence of two offices by having one which is organised or aided by the Agency. Similar arrangements could be entered into with certain local authorities which have their own organisations.
      There is advantage in decentralisation. The principle was accepted by the formation of the Highlands and Islands Development Board, which is responsible for some spending. It should be made clear that there would be ceilings, so that major projects would have to go to the head office of the Agency for consideration of the amount that could be spent and the desirability of the project. That would key into the national economic pattern which might be developing.
      Another example is the Offshore Supplies Office, which has recently felt it necessary to open a small outpost in Aberdeen, as the Under-Secretary of State for Energy specified. There was obviously a need for that. Why should not similar action be extended to the operations of the Scottish Development Agency?
      I warmly recommend the House to support the new clauses.
      Question put, That the clause be read a Second time:—
      The House divided: Ayes 13, Noes 229.

      Division No. 347.]

      AYES

      [8.23 p.m.

      Bain, Mrs Margaret

      Penhaligon, David

      Wilson, Gordon (Dundee E)

      Crawford, Douglas

      Reid, George

      Evans, Gwynfor (Carmarthen)

      Thomas, Dafydd (Merioneth)

      TELLERS FOR THE AYES:

      Grimond, Rt Hon J.

      Watt, Hamish

      Mr. Douglas Henderson and

      Howells, Geraint (Cardigan)

      Welsh, Andrew

      Mr. George Thompson.

      MacCormick, Iain

      Wigley, Dafydd

      NOES

      Abse, Leo

      Graham, Ted

      Ogden, Eric

      Allaun, Frank

      Grant, George (Morpeth)

      O'Malley, Rt Hon Brian

      Anderson, Donald

      Grocott, Bruce

      Orbach, Maurice

      Archer, Peter

      Hamilton, James (Bothwell)

      Ovenden, John

      Armstrong, Ernest

      Harrison, Walter (Wakefield)

      Padley, Walter

      Ashley, Jack

      Hart, Rt Hon Judith

      Park, George

      Atkins, Ronald (Preston N)

      Hattersley, Rt Hon Roy

      Parker, John

      Atkinson, Norman

      Hatton, Frank

      Parry, Robert

      Barnett, Rt Hon Joel (Heywood)

      Hayman, Mrs Helene

      Pavitt, Laurie

      Bean, R. E.

      Heffer, Eric S.

      Peart, Rt Hon Fred

      Bennett, Andrew (Stockport N)

      Horam, John

      Perry, Ernest

      Bidwell, Sydney

      Howell, Denis (B'ham, Sm H)

      Phipps, Dr Colin

      Bishop, E. S.

      Hoyle, Doug (Nelson)

      Price, C. (Lewisham W)

      Blenkinsop, Arthur

      Hughes, Rt Hon C. (Anglesey)

      Price, William (Rugby)

      Boardman, H.

      Hughes, Robert (Aberdeen, N)

      Rees, Rt Hon Merlyn (Leeds S)

      Booth, Albert

      Hughes, Roy (Newport)

      Richardson, Miss Jo

      Boyden, James (Bish Auck)

      Hunter, Adam

      Roberts, Albert (Normanton)

      Bray, Dr Jeremy

      Irvine, Rt Hon Sir A. (Edge Hill)

      Roberts, Gwilym (Cannock)

      Brown, Hugh D. (Provan)

      Irving, Rt Hon S. (Dartford)

      Robertson, John (Paisley)

      Brown, Robert C. (Newcastle W)

      Jackson, Miss Margaret (Lincoln)

      Roderick, Caerwyn

      Buchanan, Richard

      Janner, Greville

      Rodgers, George (Chorley)

      Butler, Mrs Joyce (Wood Green)

      Jay, Rt Hon Douglas

      Rodgers, William (Stockton)

      Campbell, Ian

      Jeger, Mrs Lena

      Rooker, J. W.

      Canavan, Dennis

      Jenkins, Hugh (Putney)

      Rose, Paul B.

      Cant, R. B.

      Jenkins, Rt Hon Roy (Stechford)

      Ross, Rt Hon W. (Kilmarnock)

      Carmichael Neil

      John, Brynmor

      Sandelson, Neville

      Carter, Ray

      Johnson, James (Hull West)

      Sedgemore, Brian

      Carter-Jones, Lewis

      Johnson, Walter (Derby S)

      Shaw, Arnold (Ilford South)

      Cartwright, John

      Jones, Alec (Rhondda)

      Sheldon, Robert (Ashton-u-Lyne)

      Clemitson, Ivor

      Jones, Barry (East Flint)

      Short, Rt Hon E. (Newcastle C)

      Cocks, Michael (Bristol S)

      Jones, Dan (Burnley)

      Short, Mrs Renée (Wolv NE)

      Cohen, Stanley

      Kaufman, Gerald

      Silkin, Rt Hon John (Deptford)

      Coleman, Donald

      Kelley, Richard

      Sillars, James

      Colquhoun, Mrs Maureen

      Kilroy-Silk, Robert

      Silverman, Julius

      Conlan, Bernard

      Kinnock, Neil

      Skinner, Dennis

      Cook, Robin F. (Edin C)

      Lambie, David

      Small, William

      Corbett, Robin

      Lamborn, Harry

      Snape, Peter

      Craigen, J. M. (Maryhill)

      Lamond, James

      Spriggs, Leslie

      Crawshaw, Richard

      Lestor, Miss Joan (Eton & Slough)

      Sproat, Iain

      Crosland, Rt Hon Anthony

      Lewis, Ron (Carlisle)

      Stallard, A. W.

      Cryer, Bob

      Lipton, Marcus

      Stoddart, David

      Cunningham, G. (Islington S)

      Litterick, Tom

      Stott, Roger

      Davidson, Arthur

      Lomas, Kenneth

      Strang, Gavin

      Davies, Bryan (Enfield N)

      Loyden, Eddie

      Strauss, Rt Hon G. R.

      Davies, Denzil (Llanelli)

      Luard, Evan

      Summerskill, Hon Dr Shirley

      Davis, Clinton (Hackney C)

      Lyons, Edward (Bradford W)

      Swain, Thomas

      Dean, Joseph (Leeds West)

      McCartney, Hugh

      Taylor, Mrs Ann (Bolton W)

      Delargy, Hugh

      McElhone, Frank

      Thomas, Ron (Bristol NW)

      Dempsey, James

      MacFarquhar, Roderick

      Thorne, Stan (Preston South)

      Doig, Peter

      McGuire, Michael (Ince)

      Tierney, Sydney

      Dormand, J. D.

      Maclennan, Robert

      Tinn, James

      Douglas-Mann, Bruce

      McMillan, Tom (Glasgow C)

      Tomlinson, John

      Dunn, James A.

      McNamara, Kevin

      Tomney, Frank

      Dunnett, Jack

      Madden, Max

      Torney, Tom

      Dunwoody, Mrs Gwyneth

      Magee, Bryan

      Varley, Rt Hon Eric G.

      Eadie, Alex

      Mallalieu, J. P. W.

      Wainwright, Edwin (Dearne V)

      Edelman, Maurice

      Marquand, David

      Walden, Brian (B'ham, L'dyw'd)

      Edge, Geoff

      Marshall, Dr. Edmund (Goole)

      Walker, Terry (Kingswood)

      Edwards, Robert (Wolv SE)

      Marshall, Jim (Leicester S)

      Ward, Michael

      English, Michael

      Maynard, Miss Joan

      Watkins, David

      Ennals, David

      Meacher, Michael

      Watkinson, John

      Evans, Ioan (Aberdare)

      Mellish, Rt Hon Robert

      Weetch, Ken

      Ewing, Harry (Stirling)

      Mikardo, Ian

      Weitzman, David

      Fernyhough, Rt Hon E.

      Millan, Bruce

      Wellbeloved, James

      Fitch, Alan (Wigan)

      Miller, Dr M. S. (E. Kilbride)

      White, James (Pollok)

      Fitt, Gerard (Belfast W)

      Miller, Mrs Millie (Ilford N)

      Whitlock, William

      Flannery, Martin

      Molloy, William

      Willey, Rt Hon Frederick

      Fletcher, Ted (Darlington)

      Moonman, Eric

      Williams, Alan Lee (Hornch'ch)

      Foot, Rt Hon Michael

      Morris, Alfred (Wythenshawe)

      Wilson, Alexander (Hamilton)

      Forrester, John

      Morris, Charles R. (Openshaw)

      Wise, Mrs. Audrey

      Fowler, Gerald (The Wrekin)

      Morris, Rt Hon J. (Aberavon)

      Woof, Robert

      Fraser, John (Lambeth, N'w'd)

      Moyle, Roland

      Wrigglesworth, Ian

      Freeson, Reginald

      Mulley, Rt Hon Frederick

      Young, David (Bolton E)

      George, Bruce

      Murray, Rt Hon Ronald King

      Gilbert, Dr John

      Newens, Stanley

      TELLERS FOR THE NOES:

      Ginsburg, David

      Noble, Mike

      Mr. Thomas Cox and

      Gould, Bryan

      Oakes, Gordon

      Mr. Joseph Harper.

      Gourlay, Harry

      Question accordingly negatived.

    New Clause 9

      PAYMENTS TO AGENCY BY SECRETARY OF STATE TO BE RELATED TO NORTH SEA OIL REVENUES
      '(1) The sums to be paid to the Agency by the Secretary of State under paragraph 1 of Schedule 2 to this Act shall be re-assessed annually and shall be increased each year up to the limit prescribed by section 13(3) of this Act by an amount proportionate to any increase in the preceding year in the revenue's accruing to the Treasury from the exploitation of North Sea oil, in accordance with the provisions of a scheme to be prepared by the Secretary of State.
      (2) A draft of any scheme prepared by the Secretary of State under subsection (1) of this section, shall be laid before Parliament and shall not come into effect unless approved by a resolution of the House of Commons.—[Mr. Grimond.]
      Brought up, and read the First time.
      Mr. Grimond: I beg to move, That the clause be read a Second time.
      The clause may not be perfectly drafted, and what we ask must be circumscribed to comply with the rules of order. It might be desirable to take a greater proportion of oil revenues for Scottish purposes and to assist the financing of the Agency, but we are confined by the legislation to the amounts laid down in Clause 13. The purpose of the clause is reasonably clear—namely, to link the finances of the Agency to oil and to increase funds as the revenues from oil increase.
      I do not intend to go over all the arguments about the ownership of Scottish oil and to whom it belongs. It may be Shetland oil or Orkney oil. It is conceivable that it belongs to the North of Scotland, to Scotland or to Great Britain, and it may be that the world—particularly the underdeveloped countries—has some interest in North Sea oil. However, there is no doubt that Scotland has an interest in this oil.
      I am anxious to maintain Scotland's interest in England's coal and in the gas that is to be found in the southern part of the North Sea. I am pleased that my constituency is gaining considerably from the arrangements we made with the oil companies. Therefore, I am not one of those who claim that all the oil should belong to Scotland.
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      It is a little hypocritical to pretend that it is a peculiarly Scottish form of selfishness to claim some interest in the oil. These types of operations in the North Sea between the riparian countries have not been carried out since the Pope divided the world between the Portuguese and Spaniards. There is a case for some correlation between some of the oil revenues and the Agency.
      My reasons for this are, first, that it is a general principle in the United Kingdom that taxes are not allocated to particular purposes. I accept that as a general principle and it may be valid. However, there are other occasions when, if we allocated taxes for particular purposes, we might bring home to people more directly what certain economic factors amount to and we might improve their attitude towards taxation and its expenditure.
      Secondly, Scotland, and in particular the North of Scotland, has suffered a great deal from being treated as a poor relation. It is widely believed that the Highlands and Islands of Scotland subsist largely on subsidies. I am not sure that this is true. It is true that the revenue of local councils in my constituency is largely provided by the central Exchequer. However, if we take into account the amount of excise duty paid by the Highland Park and Scapa Distilleries in Orkneys the picture is different. Millions of pounds go out of Orkney in excise duty, a fact which is not appreciated by the public.
      When oil was discovered, unfortunately a great deal of it had already been mortgaged. It is not sufficiently appreciated that oil revenues are already heavily mortgaged. Nevertheless we hope that the oil will bring great wealth. Therefore, the Highlands and Islands and the North-East of Scotland are entitled to say that for many reasons, including economic, psychological and political ones, this enormous accretion of wealth off our coasts should be reflected not only in our economy but also in the attitude of people towards us and in the view that we are an area which must be subsidised.
      I fear that if the main funds of the Scottish Development Agency come straight from the Exchequer, it will be felt that they are being provided by England. That will not be true, but if a certain proportion of them—not all of

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      them—are related to oil, it will be appreciated that Scotland is now very much in the black and out of the red. Further, it is desirable that people in the North of Scotland should feel that as the oil production develops, a proportion of the revenues—I do not ask for more than that—should be used to build up investment there. I know that the Government will argue that that may happen through the Exchequer, but it is desirable that the people should realise that it is happening.
      It may be feared that oil, already being so heavily mortgaged, will be frittered away in other ways, and, whether one likes it or not, it is a powerful Scottish National Party argument that Scotland should claim the oil and finance all sorts of wonderful things with it. I do not go all that way by any means, but there is something to be said for a certain proportion of the oil revenues being seen to go into investment in Scotland. It is for that purpose that we have tabled the clause.
      Mr. Iain Sproat: Very few hon. Members can make a more agreeable or persuasive speech than the right hon. Member for Orkney and Shetland (Mr. Grimond). He has done his best on this occasion in a rather rough sea, but I wish to put on record my objection in principle to the idea of linking directly and specifically the amount of money which Scotland obtains from the United Kingdom Treasury with the amount which the United Kingdom Treasury obtains from North Sea oil.
      That is a bad principle for reasons which the right hon. Gentleman indicated. How would we equate Scotland's getting money out of North Sea oil in direct proportion to the revenue which accrues in Yorkshire or East Anglia from the Selby coalfield or East Anglian gas, not to mention the vexed question of where we would draw the line between England and Scotland? Would we subtract the revenue from Auk and Argyll and, if Shetland went independent, subtract the income from the northern oilfields?
      I do not wish to go into detail on those matters. In principle it is absolutely wrong to try to divide Scotland from England in distributing the benefits which accrue from our natural resources. The principle which I should like the House to establish is that Scotland should get no
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      more and no less than her level of need requires in the perspectives of the United Kingdom. Otherwise, what would happen when the oil revenues fell? Would Scotland receive less than she received the year before because suddenly the oil supply dried up? The level will certainly fall in 20 or 30 years. The amount of money which Scotland receives should be dependent on the level of need in Scotland and not upon what revenues accrue from the North Sea.
      Mr. MacCormick: It has been a good principle in the past.
      Mr. Sproat: That is why Scotland receives £120 per capita from the United Kingdom compared with £100 for the people of England. It is precisely because the Government have adopted that generous principle that Scotland has received what she has.
      Mrs. Margaret Bain: Does the hon. Gentleman accept that any extra expenditure in Scotland is an indictment of the policies operated by successive Governments which mean that additional social security and unemployment benefit must go to the Scottish people because they cannot obtain good jobs in their own country?
      Mr. Sproat: Try telling people that in Aberdeen, where there is a tremendous shortage of labour. If I were to go into that point at length, I should be out of order.
      Let us suppose that the oil revenues in Scotland were increasing and that more money was coming to Scotland while unemployment was increasing far faster in other parts of the United Kingdom than in Scotland. Several regions in England have much worse unemployment figures than Scotland. Would it then be said that we should not give more money to those areas and that it must be given to Scotland because the oil revenues were increasing? That would be a ridiculous and inhumane principle for us to adopt.
      I finish on a practical note. In reply to the laughter from the Scottish National Party Members, I must point out that I object to this suggestion in principle and practice. If the Treasury knew that Scotland received more money under one method, it would receive less from

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      another source. Therefore the whole exercise would be self-defeating.
      8.45 p.m.
      Mr. Gordon Wilson: The argument about whom the oil belongs to occurs from time to time. I am told that the hon. Member for Berwick and East Lothian (Mr. Mackintosh) described it as Europe's oil. In that case the French would certainly lay claim to it. I inspected the map of the designated areas under the Continental Shelf Act. It is a pity that we cannot record these maps in Hansard.
      Although there is disagreement on these matters, there are many economic and industrial problems in Scotland. Economists argue that if we built up an area such as Scotland, it could prove of real strength to the United Kingdom. The economic policies pursued for years by the United Kingdom have not in general proved successful. They have had little effect on the Scottish economy. We are left with many problems. We all know of the social and industrial problems in Scotland. Scotland badly needs reflationary policies, but it is problematical whether the United Kingdom Government will adopt them.
      Had I been allowed to speak on a new clause suggested by two of my hon. Friends and myself, I should have dwelt on the need for reflating the Scottish economy by injecting about £300 million a year into it.
      This clause raises the question of the buoyancy which should be built into the funding of the Scottish Development Agency as the oil revenues appear. We have discussed the boom in offshore jobs and those directly or indirectly related to the oil industries. Some areas of Scotland have benefited, including the constituency of the hon. Member for Aberdeen, South (Mr. Sproat).
      Economists now say that the number of offshore jobs will reach a peak in about one and a half to two years' time. When that happens, people now working in the oil industry will become unemployed, partly as a result of the mistaken oil policies pursued by successive Governments. Once the number of people employed in the industry has reached between 45,000 and 60,000 it will begin to go down, although at the same time oil revenues will begin to flow. Perhaps the
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      revenues made available can be used to give additional buoyancy to the Scottish economy at a time when direct investment for the development of offshore fields slows down. Therefore a good case may be made out, even in unionist eyes, for the expenditure of oil revenues in Scotland. Our principal claim is that Scotland is a national community and that we have the right to develop and use our own natural resources for the benefit of our own people.
      I cannot understand why the hon. Member for Aberdeen, South is so strongly opposed to the hypothecation of oil revenues for Scotland when that was the policy put forward in his election manifesto. I remember challenging the hon. Member for Glasgow, Cathcart (Mr. Taylor) in the Scottish Grand Committee to say what percentage of the oil revenues would be made available for Scotland. The hon. Member said that he would not like to be specific about figures but that a Conservative Government would be generous to Scotland in that respect. If it is accepted Conservative policy that the oil revenues should be made available to Scotland on a specific or hypothecated basis, why are the Opposition changing their tune?
      Mr. Teddy Taylor: If the hon. Gentleman looks at the record, he will see that we did not accept the principle of hypothecation. Scotland's problems are likely to be substantial, and we do not accept a specific percentage for the good reasons put forward by my hon. Friend the Member for Aberdeen, South (Mr. Sproat).
      Mr. Wilson: But the Conservative Party accepted that a proportion should go to Scotland. Special emphasis is placed on the oil revenues. The Conservatives cannot try to wriggle out of that commitment simply because there has been a change in the leadership. Presumably the Conservative Party conference has something to say about the policy contained in the manifesto which is not always given down on tablets from on high.
      Mr. Rifkind: Hypothecation means that a predetermined percentage automatically goes to the body in question. It does not mean that each year the Government determine what is in the interests of an area and give priority to

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      that area because of the geographic location of the oil.
      Mr. Wilson: I do not want to get involved in an argument about this. I suggest that the hon. Gentleman looks at his own manifesto and discovers which platform he occupied in the election. If what he says is so, it is for him to change his party's policy. The Conservative Party accepted that Scotland should get a specified share of oil revenues set apart from other taxation. Be that as it may, the new clause has allowed this important question to be ventilated in the House, as I am sure it will be aired many times in succeeding months.
      Mr. Sillars: The clause is deficient in that it does not specify what proportion of the revenue should go to the Exchequer and ultimately to the Scottish Development Agency. It is not enough simply to say that some of the oil revenues should go to the SDA and fail to specify how much, whether it be 5 per cent., 10 per cent. or, as was suggested by a Liberal spokesman who appeared on television with me, 50 per cent. The right hon. Member for Orkney and Shetland (Mr. Grimond) shied away from putting a figure to it.
      We are discussing the clause within the context of the United Kingdom, and oil will always have to be discussed in the context of the United Kingdom, irrespective of what happens—
      Mr. Douglas Henderson: In the context of the EEC.
      Mr. Sillars: It appears that someone has changed his mind. From being an anti-Marketeer he has become a pro-Marketeer. I have not changed my mind.
      Irrespective of where we stand within the EEC or within the United Kingdom from a Scottish standpoint, in my view the oil must always be regarded as a United Kingdom resource. The consequences of any other policy are so dreadful that I do not think any sane, sensible person would contemplate them. As the hon. Member for Aberdeen, South (Mr. Sproat) said, there are grave dangers in a policy which specifically allocates resources from one area of the economy. I do not think that hon. Members representing the Scottish National Party have considered that matter fully enough within the context of the United Kingdom. Even new
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      Clause 8 standing in their name, which has not been selected, refers to £300 million.
      Mr. Hamish Watt: Is the hon. Gentleman suggesting that Scotland could not manage with its own resources if they were properly handled by a Scottish Government?
      Mr. Sillars: I do not want to discuss at this stage the economic integration between Scotland and the rest of the United Kingdom. However, the hon. Gentleman should take into account that if we engaged in the immoral practice of removing all the oil assets from the rest of the United Kingdom it would lead to a collapse. That might be regarded as a propaganda point by the hon. Gentleman's party, but it would have to explain to the Ferranti electronic workers, the workers in the car plants at Linwood and the textile factory workers who sell to the English why their jobs had been lost practically overnight. Those jobs could not be replaced within 24 or 48 hours.
      I return to the danger of allocation from one particular resource. Many problems arise. All may seem well when it so happens that we have an asset which allows one political party to go round the country boasting about the potential wealth that may be gained from one resource, but there are swings and roundabouts in every political and economic situation. Let us consider the other side of the coin. If we argue that we should get a specific allocation from one potential resource, we must accept on the deficit side that we carry a greater degree of the burden than ever before.
      Let us consider the Scottish situation. There is an enormous transport subsidy because of the geographical character of Scotland. I stand open to correction, but I believe that the transport subsidy for the Highlands and Islands is about £3½ million. Given the plans of the SNP it would be a great deal more than that, the SNP having promised the moon to the Highlanders and Islanders.
      A matter that worries me very much is the situation in the Scottish coalfields. I represent a coalmining area in Scotland. God has been good to us as regards North Sea oil but not terribly good in the geological conditions he has laid down in the Scottish coalfields. We stand this

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      year in the face of a substantial loss, not because the Scottish miners are lazier than the English miners, are unable to work as hard or lack technical experitise, but because they are faced day in and day out with enormous geological faulting in the Scottish coalfields.
      If we accept the right hon. Gentleman's clause we must accept that it should be applied to all resources, including the coalfields I represent. A much more stringent financial attitude would have to be applied. That would result in about 20,000 miners losing their jobs in Scotland. We could not say to the United Kingdom Treasury "On the oil we get all the assets. On the coal we want you to ignore the deficits involved." We could not have it both ways.
      Mr. Gordon Wilson: Does the hon. Gentleman accept that if we are prepared to accept the assets we should be prepared to assume the responsibilities—that is, the position which has always been adopted by my party? There is no doubt that a Scottish Government would be well able to undertake their responsibilities, including the maintenance of the coal industry, in the same way as the United Kingdom has done, or go even further.
      Mr. Sillars: I look forward very much to the next election when the SNP candidate in South Ayrshire explains to the Ayrshire miners that one of the consequences of his party's argument—perhaps an SNP candidate will not be standing against me after the speech of the hon. Member for Dundee, East (Mr. Wilson)—on North Sea oil is that we must accept the demands of the Scottish coalfields and the Scottish coal industry—[Interruption.] Yes. It follows automatically.
      Hon. Gentlemen have not taken into account the problem of the agricultural input in Scotland, given geographical factors. It takes a great deal more in terms of agricultural input in Scotland to produce a given amount than in many other parts of the United Kingdom. It is a question of swings and roundabouts. The Liberal Party and the Scottish National Party have not said that they are prepared to accept the swings and roundabouts. They want to gain all on the swings and lose nothing on the roundabouts. That is a stupid and immature policy and I shall vote against it.
      9.0 p.m.
      Mr. Buchanan-Smith: I hope that the Scottish National Party has noticed the survey financed by the Social Science Research Council and published in The Scotsman last week, dealing with attitudes in Scotland and other parts of the United Kingdom. It was revealed that a majority of those who support the SNP in Scotland do not believe that the majority of the revenue from Scottish oil should necessarily be applied in Scotland. That is a significant finding. The greed which members of the SNP have displayed tonight is not shared by their supporters.
      I find that among people in Scotland there is a much greater sense of belonging to the United Kingdom than members of the SNP in this House suggest. The people of Scotland want to share their benefits throughout the United Kingdom. I ask the hon. Member for Dundee, East (Mr. Wilson) to read the new clause It is one thing to talk in general terms about Scotland's getting some of the benefits from oil but it is quite another to start talking of hypothecation. Hypothecation means a pre-determined fixed precentage of the revenues being applied. That is what the new clause is all about. We who oppose hypothecation cannot be accused of not wanting to see benefits returning to Scotland as a result of the development of North Sea oil.
      Hypothecation would be dangerous for Scotland. If we had had it in the past, when things were going less well for us in terms of natural resources, the results would have been disastrous. To go for such a policy now when we have these natural resources would be mean, petty and grasping in the extreme. It is not the present or the past but the future which worries me. There are grave disadvantages to this policy of hypothecation. First, it is rigid. The percentage is fixed. It does not alter to take account of a changing situation. Secondly, if oil revenues start to decline—I believe that they will, and the hon. Member for Dundee, East is more pessimistic than I—we shall need a higher level of investment.
      Mr. Gordon Wilson: I was talking about oil-related jobs, not about revenue. I was saying that revenue should be used

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      to give additional buoyancy at a time when jobs related to oil development were decreasing.
      Mr. Buchanan-Smith: I apologise if I read more into the hon. Member's remarks than he said, but it makes my remarks no less valid. The time will come when we shall see oil revenues declining. What will happen then? Our children will be living in those times and I do not want to see them saddled with hypothecated revenue at a fixed level, which may have benefited our generation at a particular moment of time. I do not want to see them without the benefits of be belonging to a wider United Kingdom which will help them over the period when industrial change again takes place, as the oil industry starts to decline.
      My last point was very strongly made by my hon. Friend the Member for Aberdeen, South (Mr. Sproat). We have to judge this in relation to needs. We want to see the oil benefits from the North Sea coming back into Scotland, as soon as we have the revenues—we do not have much yet—in order to do all the necessary things in terms of communications, infrastructure and so on. We want to see it a year or two ahead, as the hon. Member for Dundee, East said, so that when we pass the peak in jobs we shall be helped by the diversification of industry.
      That, surely, as my hon. Friend the Member for Aberdeen, South said, is the way to judge it—by our needs, and by what is required to help the communities that are having to adapt to the problems of the oil industry. It must be related to the needs of Scotland in the future and to the need for new jobs. If we want the best benefit from North Sea oil it is in that sense that it should be done, and I hope that the Government will approach it in that way as well.
      Mr. Millan: In moving the new clause the right hon. Member for Orkney and Shetland (Mr. Grimond) said that he did not believe that all the benefits of North Sea oil should accrue to Scotland, and that this was a United Kingdom resource. I agree with him on that. He also said that he did not believe in hypothecation, but then said that he believed in a qualified hypothecation. I do not believe that one can have a qualified hypothecation. Either one believes that this is an acceptable principle or one
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      does not. If one does not believe that it is an acceptable principle, I do not think one can then introduce the principle, as it were, by a kind of back-door method, which is basically what the clause attempts to do.
      As my hon. Friend the Member for South Ayrshire (Mr. Sillars) said, one cannot adopt the principle of hypothecation only in circumstances in which one thinks it will be of benefit and then ignore all the circumstances in which a similar principle could be very detrimental to Scottish interests.
      The right hon. Gentleman has introduced a kind of hypothecation, although it is expressed in a way which is perhaps not wholly clear, and would in practical terms produce, even from his point of view, rather eccentric results—certainly results different from those that he envisaged when he spoke to the clause.
      What he has proposed is really a rather odd kind of arrangement. First, he says that the increase in this part of the SDA's financing shall be increased proportionately to any increase in the preceding year in oil revenue. That is, with respect a straight arithmetical calculation. It does not require to be worked out under the provisions of a scheme to be prepared by the Secretary of State. That, really, is a contradiction in terms, because it suggests a certain flexibility in the situation—looking at circumstances, and so on. It is contrary to the earlier part of the clause, which would involve a straight arithmetical calculation.
      Oil revenues will increase very rapidly indeed over a short period of years, so that, unless we started from a very small amount, we should reach a very large amount very rapidly. To avoid reaching a disproportionate amount we should have to start in the early years of the SDA with a budget which would be quite inadequate for the job that the Agency would have to do.
      The new clause is even more defective, because it relates the question of oil revenues to only a part of the Agency's activities—industrial development. I understand exactly why the right hon. Gentleman has done this. He says that the one thing, above all, that the people of Scotland will look to from North Sea oil, is a sense that Scotland's economy and industry are prospering. I agree

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      completely. That is the objective. That is why we have done certain things which have benefited his and other areas, in directing more oil-related jobs to Scotland and seeing that they are spread throughout the country.
      The right hon. Gentleman knows that in his area there is a great deal of new prosperity, which has come directly from North Sea oil. That will continue. His local authorities have been adept at looking after the interests of their inhabitants. He knows that certain long-term benefits will come to his area almost regardless of what happens in terms of increases in oil revenue generally. There have thus been considerable advantages to his area, and to other parts of Scotland.
      To direct to North Sea oil this piece of the Agency's financing—public dividend capital—which is related to industrial development, would be a mistake in terms of practical implications and not just of principle, which in any case I do not accept. It would have the result that that part of the Agency's capital would be far more likely to be spent not in the North of Scotland but in the old industrial areas, which is where the main industrial effort should be directed.
      The formula in the new clause would not demonstrate a direct benefit in the North of Scotland. The benefits, if they came at all, would go to other parts of Scotland. It is a misguided or badly drafted clause from that point of view as well.
      Nevertheless, I take the point that it is very important, psychologically and in terms of human dignity, and the rest, that areas in the North of Scotland or elsewhere should not feel that they have always had to be subsidised by the rest of the United Kingdom and the rest of Scotland. It is important that people should feel a sense of economic independence, which can come only from economic well being.
      It has been part of the Government's policy in the right hon. Gentleman's area and in the oil development areas generally, as well as in other parts of Scotland, to demonstrate the real advantages of North Sea oil, to get them, to the maximum extent, to all areas, but particularly
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      to areas which have felt the major impact from North Sea oil exploitation.
      The Government's general policies will be directed towards these ends. I do not believe that those ends could be achieved consistent with the policy of no hypothecation or by financing a part of the Agency's activities in the way that the new clause would provide. For all these reasons, I could not recommend the new clause to the House.
      Question put and negatived.

    Clause 1

      THE SCOTTISH DEVELOPMENT AGENCY
      Mr. Crawford: I beg to move Amendment No. 1, in page 1, line 6, after second 'the', insert 'democratic'.
      Mr. Deputy Speaker: With this we shall take Amendment No. 2, in page 1, line 9, after second 'Agency', insert:
      'answerable to the Scottish Assembly, immediately upon establishment of that Assembly',
      and Amendment No. 8, in Clause 4, page 4, line 41, at end add:
      '(4) This report shall be laid before the Scottish Assembly upon the establishment of that Assembly'.
      9.15 p.m.
      Mr. Crawford: A similar amendment was defeated in Committee by the combined forces of the Conservative and Labour Parties. That usually happens in Committee when Scotland's interests are at stake. I am sure that those who voted against this proposal in Committee did so sincerely, genuinely believing that the Scottish Assembly should not have economic powers or control over the Scottish Development Agency.
      My position and that of my party was that the Scottish Assembly should have considerable economic and industrial powers and that without the powers of the Scottish Development Agency the Assembly would be a eunuch and the Scottish Development Agency would not have a proper Scottish master accountable to the people of Scotland. However, perhaps there has been a change of air in the political atmosphere in Scotland since the Committee convened.
      Pronouncements from both the Labour Party and the Conservative Party since the Committee stage of the Bill suggest

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      that there has been a change of view. I believe that there are splits in both the Labour and the Conservative Parties. However, there appears to be a change of view to the effect that the Scottish Assembly should have economic and industrial powers.
      Mr. Dempsey: Some.
      Mr. Crawford: I may be wrong, but I understood that several Conservative Members thought that it should have more than some economic and industrial powers. If it is to have those powers, ipso facto it must have control of the Scottish Development Agency. That must follow as night follows day.
      I am delighted that the Scottish National Party is being supported in public statements on this subject by people like the hon. Members for South Ayrshire (Mr. Sillars), Central Ayrshire (Mr. Lambie), and Paisley (Mr. Robertson). Like the rest of my hon. Friends, I look forward to their support in the Lobby tonight if the Government do not accept the amendment. I state categorically that it will be hypocritical humbug if they vote against the amendment today and then say at a future date that they wish to devolve economic and industrial powers to the Assembly. They cannot have it both ways.
      The Scottish National Party is giving the Government and the Conservatives a second chance. They have thrown the idea out once. We are giving them a second chance to make the Scottish Development Agency answerable to the Scottish Assembly when it is set up. It is no use their saying that this is hypothetical. The wording of the amendment is fairly straightforward:
      "immediately upon establishment of that Assembly".
      It would appear that both Labour and Conservative Members are having a change of heart. I look forward to an earnest expression of their intentions by their support for the amendment.
      Mr. Robert Hughes: This is not the place to develop an argument about the Scottish Assembly, until it is established what its powers will be. We are all awaiting with keen anticipation the publication of the White Paper which the Government have promised early next Session. I also await with great anticipation and
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      enthusiasm the publication of the Bill which will follow that. It would be a great mistake if, today, we tried to go over arguments which have been put forward for some time and which we shall have to deal with again when we have seen the White Paper and the Bill.
      I am concerned that the Scottish Development Agency gets off the ground and is allowed to do its job without worrying about its future when the Scottish Assembly comes into being. We are concerned that it does its job and that it can operate from the beginning under firm limits from the Secretary of State for Scotland. I draw an analogy with what is now happening in local government. Local government reform in Scotland is under unceasing and quite ruthless attack. I have never hidden my feelings about the set-up of the regions and districts. If anyone cares to look at the records he will find that I have been fairly consistent about this matter.
      I believe that some of the attacks made on local government in Scotland are quite scandalous. Local government has not been given an opportunity to begin to tackle its job, or even to begin to work. Nothing can be worse for the morale of people in local government than the way they are being used by people who are not concerned about local government but are prepared to fasten on every indiscretion, error and, indeed, everything which they can pick on, and say that all the difficulties in local government in Scotland are due to local government reforms passed in this House. That is not honest politics. Members of the Scottish National Party should not abuse their position in Parliament and attack people in local government who have no right of reply.
      Mrs. Bain: I am one of those in the SNP who have attacked local government work in Scotland. Is the hon. Gentleman suggesting in some way that I am not concerned about the homeless in my constituency and about the fact that we cannot attract teachers to our area, specifically because of regional policies?
      Mr. Hughes: I do not deny the hon. Lady's sincerity about the homeless and education, but I deny the allegations that this is due to local government reform and that the reason why these things cannot be cured quickly is that local government

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      reform was approved by this Parliament. I do not like the set-up. However, I use the analogy between the Agency and the Assembly because I know many people in local government—elected members and officials—who are sickened by the fact that although they have been given a mammoth task, before they have even begun to tackle the problems and see their way through to overcoming the difficulties of reorganisation they have come under constant attack, not for the reasons advanced by the hon. Lady but because attack on local government reform is being used as a vehicle for political advantage.
      It is no use the hon. Lady's shaking her head. If she is honest with herself, she knows that what I am saying is true. The attitude which was adopted when the Bill started its passage through the House—"Never mind what happens in the future. We must determine here and now what the terms of the Assembly will be and how it should operate in relation to the Agency"—means that the Agency could well come under attack from the moment it begins to operate. It will not be given a chance, because people will say that it must be under democratic control.
      I, too, would like to see the Agency under democratic control, but the issue is how to ensure that it begins its mammoth task without delay. With the best will in the world, it will be anything from a year to two years before the Assembly comes into being. I hope that the Agency will be far-seeing, adventurous, and prepared to take risks, not always looking over its shoulder because it is worrying about criticism.
      I was not in the House when the Highlands and Islands Development Board legislation was passed, but I recollect, from reading reports in the Press, that before it came into being attacks were made on the Board by members of the Conservative Front Bench and of the Scottish Tory Party. There were dreadful scare stories about what the Board would do.
      I believe that the HIDB has done a tremendous job. No one would argue that it is perfect. The right hon. Member for Orkney and Shetland (Mr. Grimond) complained earlier about applications from his constituency which
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      were made at the beginning of the year but were not approved until the autumn. If the Board has been less than adventurous in some areas, I believe that that is because, from the beginning, it has been looking over its shoulder, because there have been people prepared to attack it and pinpoint everything which might happen and say "The Board is wrong to do this. It has made a mistake."
      There is no magic elixir which will solve, overnight, the problems which afflict Scottish industry. Solving them will be a long job. There will need to be a determination on the part of everyone to back the Agency from the beginning, to stick with it through its successes and, more importantly, in any errors it makes. To suggest from the beginning that it must come under the Assembly can only inhibit it in its future activities.
      For that reason, I think that amendments which seek to lay down guidelines or outlines for the operation of the Assembly are wrong, misplaced and misguided. I hope that hon. Members opposite—primarily members of the Scottish National Party—will not use this as a springboard for their own policies, which would be ruinous and disastrous for the people of Scotland.
      Mrs. Bain: I cannot hope to remain in order and answer all the political points raised by the hon. Member for Aberdeen, North (Mr. Hughes) in his speech. I would only ask him to read Amendment No. 2 carefully. It says that the Agency should be answerable to the Scottish Assembly when the Assembly has been established. We are asking not for a delay in the operations of the Agency but merely that when the Assembly is set up the Agency should be answerable to it.
      The Scottish National Party welcomed the establishment of the Agency. We expressed some criticisms, as is our democratic right, but, unlike the Conservative Party, we were not prepared to block this legislation, because we recognised the great social and economic problems facing our country and that the Agency presents a unique opportunity for us to solve them. It will not solve every problem overnight—I think the Government recognise that—but it gives us an opportunity which is very important if we are to give our

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      people the kind of standard of living and decent employment opportunities which many of us in this House seek for them.
      If the Assembly is to be meaningful, it must have a decisive role to play in Scottish life and the right to control various matters which affect our people in employment, education, industrial development and other sectors. There are vast social implications in the establishment of an Assembly for the Scottish people.
      We do not want the Agency to be yet another regional body. I ask the Government and Labour Members to bear in mind what the Scottish Council Research Institute said about regional policies. The best description it could find was that they had been a distinct failure. We do not want the Agency to be part of a regional policy which will merely paper over the cracks in the Scottish economy and way of life. We want a body with real powers to tackle the problems which face us.
      I want to deal particularly with the Agency's work in the development and improvement of the environment. I come from the West of Scotland. The vast majority of my constituents came originally from Glasgow and have moved out to seek a new life in overspill communities. The problems facing us in the West of Scotland cannot be solved by a single region. They are Scottish national problems. The strategic economic planning powers given to the Strathclyde Region cannot possibly meet the vast deprivation and lack of advantages in the West of Scotland. The Agency has to be given these power of environmental improvement if we are to remove urban deprivation. At the moment, 97·5 per cent. of the worst areas in the United Kingdom are in the Strathclyde Region. This is a national problem, and the Assembly, through the Agency, must have responsibility for it.
      I am not sure whether the hon. Member for Aberdeen, North wishes to intervene or whether he is just uncomfortable in his seat.
      9.30 p.m.
      Mr. Robert Hughes: I am grateful to the hon. Lady. I was waiting for a "natural break". The hon. Lady is right as far as she goes in her argument. The problems of West Scotland cannot be solved by regional government, but
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      they could be solved in a much more meaningful way by regional planning on the basis of the Strathclyde Region rather than Glasgow alone. We might then have better relationships with Glasgow on the overspill problem than existed in the past.
      The Agency, however, has the opportunity to work as a national body. One of my fears is that it will be so concerned about the West of Scotland that it will not have time to look at the other parts. It is not necessary for the SDA to pass immediately on vesting day into the control of the Scottish Assembly for it to be a success or a failure, and the hon. Lady is making a cardinal error in her assumption on that score. She is saying that unless it is passed over immediately the Assembly is established it will not work, and that is a mistake.
      Mrs. Bain: The hon. Member should recognise that on questions of strategic economic planning those who are given the powers must be directly answerable to the people through an elected body, which is what we shall have in the Assembly. We must be democratically answerable. I accept that people fear that the West of Scotland will dominate the Assembly, but we have a great programme ahead of us to educate the people of Scotland into realising that the problems of any particular area, whether it is the Highlands or the West of Scotland, are national problems.
      The hon. Member was referring to strategic economic planning powers, but he must be aware that Strathclyde was having to pay, at 1973 prices, £23 million every year to service the housing debt of the city of Glasgow. How can any local authority hope to build new houses when it has to pay out so much in interest?
      Mr. Hughes: This is an interesting argument, but I fear that we have been diverted away from discussion of the SDA. My party has argued for years that it was quite wrong for money to be raised on the private market at private market interest rates in order to pay for house-building. My Government have done a great deal through the Public Works Loan Board to reduce that rate of interest, and I am delighted if the SNP is now saying that it is opposed to private entrepreneurs making money out of council housing through loans.
      Mrs. Bain: We want housing to become a national rather than a local responsibility. That is the only way in which the problem will be solved. Conservative Members may laugh at the idea of a Scottish nation ignoring the problems of any one particular area, but they do themselves and the people of Scotland a great disservice because the Scottish people are concerned about these problems wherever they exist. Hon. Members from the three major parties who claim to have some kind of social conscience about what is happening in Scotland and who believe in having a meaningful and powerful Assembly for Scotland should go into the Lobby with the SNP tonight to ensure that the Assembly takes the Agency under its remit so that it too may become a meaningful body.
      Mr. Grimond: The House is in some difficulty—a difficulty has arisen constantly in this Parliament because the Government have introduced too much legislation, and in the wrong order. Of course we should never have reformed local government in Scotland before setting up the Assembly. We know why that happened. Neither the Conservative Party nor the Labour Party before it believed that an Assembly was possible or desirable. We are now discussing one of the most crucial and central issues affecting the Assembly. I do not see how we can avoid discussing the relationship of the Agency to the Assembly.
      One of the faults of planning since the war has been that, admirable though the intentions have been in respect of help for the areas of special need, the plans to give that help have not involved the people of those areas in their own fate. The measures of assistance have been regarded as being handed down from London, and, as a result they have often been out of touch with the ways of different areas of Scotland and have not pulled out the response they might have done. I have a great deal of sympathy with what has been said about the appalling environment with which various parts of Scotland have been left, partly, though not entirely, as a result of that policy.
      If we want the Agency to get off the ground satisfactorily and to have a wholehearted response from the people of Scotland, it must be seen to be the Agency of those people. It must not be seen to be something which is dominated
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      from Whitehall, let along Westminster—something which is largely out of the control of the local people.
      If the Assembly should be set up without power over this type of operation in Scotland, I believe that it will be doomed to failure, because there will be a hostile and undesirable reaction in Scotland. We are faced with this matter on Report. We must indicate clearly to whom the Agency is responsible. We must face the question whether the Scottish Assembly is to have some power over industrial and planning policy in Scotland. We cannot just leave the matter and say that it will all be reviewed and amended when the Assembly begins to operate. We see what has happened in local government, which is now in some confusion because of the possibility of everything being amended. In my view, one level of Scottish local government should be cut out. That would not affect my constituency, because we have general-purpose local councils, but it would be desirable to do it on the mainland.
      It is very difficult to set up the Agency without knowing to whom it is ultimately responsible—simply saying that we shall introduce amending Bills in the Assembly in two years' time, if all goes well. That will not get the Agency off on a good footing.
      All that our amendment suggests is that the report of the Agency should be laid before the Assembly. The amendment would make it clear that the Assembly has the right to discuss and amend. That is the minimum. I would go much further. Industrial policy is one of the matters which, if devolution is worth doing at all, must be at least largely devolved. I do not say the same about the overall planning of the United Kingdom, but a Scottish Assembly without some control over investment planning, the siting of industry, the development of certain depressed areas, attention to conditions on the housing estates of the Clyde, and so on, would be hardly worth setting up.
      Therefore, we should include in the Bill at least an indication that when the Assembly is set up it will have a role to play in regard to the Agency. I hope that the Government will say that they will examine the question very closely.

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      If they cannot accept the amendment tonight, I hope that they will review the matter and possibly find other ways of dealing with a central question which cannot be put off indefinitely.
      Mr. Sillars: I do not think that I or any other hon. Member is any less committed to the Scottish people than is the hon. Member for Dunbartonshire, East (Mrs. Bain). It is a mistake for members of the Scottish National Party to believe that they are the only ones who are horrified by deprivation and other faults in the Scottish economic and social scene, and who are motivated to demand action.
      The fact that I shall not vote with the hon. Lady tonight should not be taken as a sign of any retreat by me from the belief that the Agency should reside under the control of the Scottish Assembly. Where I am in conflict with the Scottish National Party, at any rate on Amendment No. 2, is over the words
      "immediately upon establishment of that Assembly".
      This is not a question of semantics; there is a sound argument for not taking a decision of this magnitude this evening, after such a short debate. We should argue the question of the Assembly's responsibility to the SDA within the context of the Government's comprehensive proposals over the powers of a Scottish Assembly.
      I am told in the Press that a Cabinet meeting is to be held on Friday I sometimes wish that I were a member of the Press rather than a Member of Parliament, because they seem to know about these matters when we do not. The Press is always more knowledgeable about Cabinet meetings, attendance at them, the the publication of White Papers, and other matters, than we are. We are told that at the Cabinet meeting on Friday the major decision will be taken on a package deal for the Scottish and Welsh Assemblies. Therefore, we should examine the issue against the background of what the Government will say.
      I should like to see the amendment withdrawn, rather than that it should go to a Division. I am concerned about the use of the word "immediately". Of course, we are concerned with the way in which the Scottish Assembly is set up and with the expertise of those who are
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      to run the departments following legislative, executive and economic devolution. Perhaps the Assembly will require a settling-in period, because we must remember that we shall be establishing a Scottish Parliament for the first time for 270 years. I foresee the possibility of the Scottish Assembly's being transferred, if not on vesting day, within a year or two. That would be a much more sensible way to transfer functions from Westminster to Edinburgh. That would be a much better course than merely dancing round the totem pole with the cry that all power must go to the Assembly on vesting date, whether or not it is fit to handle matters from then on.
      My hon. Friend the Member for Aberdeen, North (Mr. Hughes) made a valid point about the importance of the Agency's impact on the Scottish economy. It may be better for the Agency to run for its first year, post-Assembly, under the control of the Secretary of State for Scotland and thereafter for it to be transferred to the Scottish Assembly, so that the Assembly can debate policy and other matters. I wish to emphasise my worries about the word "immediately" because we should not give powers on an ad hoc basis.
      When the House considers the Bill on the Scottish Assembly, I shall not be found wanting in my views about where the Agency should go. I think that it should go to the Scottish Assembly, but it is not sensible for us at present to proceed in the way suggested by Amendment No. 2.
      9.45 p.m.
      Mr. Robertson: I wish to reinforce the remarks of my hon. Friend the Member for South Ayrshire (Mr. Sillars). Amendment No. 2 appears to be a politically naive and even dangerous proposal. It involves the House in discussing the powers of a future Scottish Assembly rather than the position of the Scottish Development Agency vis-à-vis the Assembly. In other words, an irresponsible note appears to have crept into the debate.
      The Opposition appear to be looking for a nail on which to hang their coat, but their arguments show that they do not have the matter properly in perspective. We want to discuss the powers of the Scottish Assembly at the time when

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      that legislation appears rather than discuss such basic matters in a debate on the Agency. To start talking about relationships with a non-existent and hypothetical body at this time—[Interruption.] I was asking my hon. Friend the Member for Coatbridge and Airdrie (Mr. Dempsey) what this hypothetical thing was, and he thought it was a horse running in the 3 o'clock race tomorrow. I am confused about the thinking of the Scottish National Party on this matter, as I am on so many other things.
      The Scottish National Party has its priorities wrong. As a keen devolutionist, I am worried that it will queer the pitch. There are many enemies and opponents of devolution. The Scottish National Party is not helping the argument for the setting up of a Scottish Assembly. It is hindering it. However, its political naïvety has to be seen to be believed. It has no grasp of the reality of the situation.
      It is utterly ridiculous to discuss the powers of an Assembly or a Parliament in terms of a Scottish Development Agency. The Scottish National Party should take a look at itself to see whether it has a serious contribution to make to the problem which the hon. Member for Dunbartonshire, East (Mrs. Bain) described. Although the hon. Lady may come from Glasgow, she must not imagine that she is the only person who has ever been moved to dedicate herself to a solution. If she is saying to those on the Opposition Front Bench—these sudden converts to Marxism—that the solution for Scotland is a Socialist one, I shall go a long way with her, but I do not believe that she means it. All this is simply airy-fairy vote and headline catching. It has no serious intention or purpose.
      I am offended at having to listen to the contribution that the Scottish National Party Members have made. It is childish and naive. No serious thought has been given to it. This is a serious place and we are discussing serious issues. Scottish National Members should consider making a serious contribution.
      Mr. George Reid: I was astonished to hear the hon. Member for South Ayrshire (Mr. Sillars), of all people, preaching the
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      inevitability of gradualism. I was even more surprised to hear the hon. Member for Paisley (Mr. Robertson) talking about "hypothetical" bodies. The hon. Member for South Ayrshire has gone on record as saying "While difficulties over trade and industry powers for the Scottish Assembly might exist, the minimum requirement would be Assembly control over the Scottish Development Agency." His hon. Friend the Member for Paisley has said that it is "essential" that the Scottish Assembly has control over the Scottish Development Agency. Both of them have retreated.
      I hope I shall not be ruled too wide of the mark if I say that the amendment before the House is as much about devolution and the forms of economic government we shall have in Scotland as it is about the Scottish Development Agency. In that sense it is a fundamental amendment. It deals with the general management of the economy of Scotland. It is also, at this rather late stage, a probing amendment. The people of Scotland will be interested to know who goes into what Lobby, because I am sure that my hon. Friend the Member for Perth and East Perthshire (Mr. Crawford) will press his amendment to its logical conclusion. They will be interested because tonight they have the first chance to identify those hon. Members who would deny Scotland self-government in her internal economic affairs.
      If the Scottish Assembly is not responsible for the Scottish Development Agency, it will be neutered and emasculated right from the start. Hence the reason for immediacy. If the Scottish Assembly is not given control over the Scottish Development Agency right from the start, we shall have to face up to an alternative course, namely, that the Assembly will seek those powers for itself. We shall thereby have constitutional wrangling between London and Edinburgh from which we could well be spared by a positive resolution of the House tonight.
      Mr. Robert Hughes: I hope that the hon. Gentleman will reflect on what he has said, because it seems to me to be a recipe for disaster. He says that unless the Assembly, which I should love to debate at length in future as I have done in the past, gets everything that the SNP

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      Members want from the day that it begins to operate, they will damn it and destroy it and say that it is hopeless. They are intent on giving it no opportunity to work. The real enemies of devolution in Scotland are the members of the Scottish National Party, those separatists who do not want the Assembly to work. If they are suggesting that from the day the Assembly comes into being it should take over the SDA function and policy without a break, they are living in cloud-cuckoo-land, and the sooner they realise that the better.
      Mr. Reid: It would seem that the hon. Gentleman wants to separate the Agency from the people of Scotland. He forgets that 348,000 members of his party wanted the Agency to be controlled by the Assembly as against 350,000 people who wanted it to be the other way round. He forgets that the Transport and General Workers' Union, the National Union of Mineworkers and the Association of Professional, Executive, Clerical and Computer Staff believe that the Agency should be an Assembly function. He forgets that it is the published view of the Under-Secretary of State for Scotland, the hon. Member for Stirling, Falkirk and Grangemouth (Mr. Ewing), who said in an authorised interview:
      "Anything which is held by the Secretary of State is more easily transferred to the Assembly than if it were held by a Secretary of State for any other Department".
      Why not in this case?
      Fundamental questions will therefore be asked by the people of Scotland. The Agency will be responsible for furthering economic development in Scotland. Is it not right that the Assembly should have responsibility for that? The Agency will be responsible for the maintenance of employment in Scotland. The improvement of the environment will be an Agency responsibility. Should that not go to the Assembly? Will the Scottish people not believe that the "games are bogy" unless the Assembly has power over the matters referred to in my hon. Friend's amendment
      It will be claimed that this is a premature amendment because we are awaiting the White Paper. But if we were to wait for the Government, we should wait for ever. We have waited for their decision on home rule for a remarkably long time. We now await the White Paper. After
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      the White Paper is ultimately published, we may well wait a very long time before the Bill is published. My hon. Friends have suggested, given the constitutional and economic change through which Scotland is going, that the Government should hold back on their published plans for the regions of Scotland. They did not; they went ahead. As the New Statesman suggests this week, there is a terrible and terrifying muddle for Scottish local government as a result.
      I suspect that a large degree of Government thinking is devoted to putting the Agency in a straitjacket, tying it up neatly, delivering it to the Secretary of State and setting it to one side before the White Paper is published. The Scottish people will not accept that.
      Mr. Teddy Taylor: Before the hon. Gentleman sits down, I hope he will explain what he meant by saying that if Parliament does not give the Assembly the power and responsibility for managing the Agency, the Assembly will take the power itself. Is he saying that the SNP envisages that the Assembly will not act as a constitutional democracy and, indeed, may be a revolutionary body?
      Mr. Reid: The Scottish National Party is a gradualist party. Devolved Governments in Canada, Australia, the United States and India gained those functions which this Government is tonight attempting to deny to the Scottish Assembly. A Scottish Assembly, even with a Labour or Conservative majority, will, as a result of the economic circumstances of Scotland today, inevitably want more power as the Scottish people increasingly identify themselves with the Assembly. This week, for instance, the Young Conservatives expressed sympathy with that view.
      There is the view that the Scottish Development Agency amendment, proposed by my hon. Friend the Member for Perth and East Perthshire is irrelevant. The hon. Member for Glasgow, Hillhead (Mr. Galbraith) has said that there will be no powers to give to the Assembly as there will be no Assembly. It is certainly not premature to raise this issue now, as that opinion is shared by a number of back benchers representing English constituencies.

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      If the management of the Scottish economy is not properly tied to the Scottish Assembly there will be clutter and confusion, and a total division of its economic powers.
      In terms of devolution, hon. Members have regularly witnessed government by leak. We have read time and time again, in reports of authorised interviews, what the Government will do in terms of the White Paper. I suggest that in a few weeks' time, with its publication, we shall see an Assembly in Edinburgh having minor economic powers. It will exercise consultative power over the SDA, while the Secretary of State for Scotland will keep most powers. The Secretary of State for Industry will exercise responsibility from London, and the NEB will assume new responsibilities. That is a recipe for constitutional conflict. Inevitably, the Scottish Assembly will seek a wide diversity of powers and there will be demands by the Assembly for power over industry.
      Mr. Robert Hughes: Does the hon. Gentleman suggest that the problems of the Scottish economy can be solved entirely north of the border, without any reference to the United Kingdom economy?
      Mr. Reid: Yes. Taking my gradualist view, there will be demands from the Scottish Assembly that the Scottish economy be placed under one central authority, situated either in London or in Edinburgh. My own view is that the powers given to the Assembly will increasingly come in strengthened form to Edinburgh.
      We are dealing with a period of transition in Scottish constitutional and economic life. It is most important to know who is accountable for what. The SDA will be an appointed body, vaguely responsible to Parliament and under the broad control of the Secretary of State. However, given the provision of Clause 2 it is vitally important not to allow the SDA to act unilaterally. Someone must be responsible and accountable.
      The Scottish National Party believes that the appropriate body is the Scottish Assembly. This cannot be done overnight. My hon. Friend the Member for Perth and East Perthshire suggested that
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      we create a body analagous to the Irish development authority which reports yearly to the Dail. In the same way the SDA could report yearly to the Scottish Assembly while possessing powers and finances based on a rolling five-year programme.
      What will happen to the Secretary of State if these economic powers are given to the Scottish Assembly? The people of Scotland face a genuine democratic choice. Will they give powers over the Scottish economy to a genuinely democratic body accountable to the people of Scotland, or will they leave those powers with the Secretary of State?
      It being Ten o'clock, the debate stood adjourned.

  BUSINESS OF THE HOUSE
  Ordered,
  That, at this day's Sitting, the Scottish Development Agency (No. 2) Bill [Lords], the Cinematograph Films Bill and the Recess Elections Bill [Lords] may be proceeded with, though opposed, until any hour.—[Mr. Stoddart.]

  SCOTTISH DEVELOPMENT AGENCY (No. 2) BILL
  Question again proposed, That the amendment be made.
  Mr. Reid: Given the Scottish Assembly, the Secretary of State will not die; he will simply fade away over the years. Come 1985, I do not see the office of Secretary of State reaching its centenary; it will fade away over this intervening period.
  The people of Scotland have to pay their money and take their choice. They have to decide one way or the other. Either they opt for genuine democratic control, with a distinctive Scottish economic policy and with a chance for the Scottish economy to take off or they will go on as they have in time past with poverty, deprivation and the depressed economy to which my hon. Friend the Member for Dumbartonshire, East (Mrs. Bain) referred.
  This is a fundamental amendment. It makes the SDA accountable to the Scots people through the Scottish Assembly. It satisfies the members of the STUC and the unions, and those Labour Members who have preached the cause of the Scottish Development Agency's

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  being responsible to the Assembly right from the start. I hope that the hon. Members for Central Ayrshire (Mr. Lambie), South Ayrshire (Mr. Sillars) and Paisley will tonight stand up and be counted, because the people of Scotland are watching them.
  Mr. Sproat: When the Scottish Assembly legislation comes before the House I do not suppose that I shall agree with much of what the hon. Member for South Ayrshire (Mr. Sillars) has to say, but even if one were in favour of an SDA controlled by a Scottish Assembly, it would be incredibly naive to propose tonight that we should preempt that Scottish Assembly legislation. Either the Scottish National Party is so naive that it offends the House, as the hon. Member for Paisley (Mr. Robertson) said, or it is trying to use yet another hook on which to hang a discussion of the whole question of the Scottish Assembly, which is an abuse of the proceedings of the House.
  The Scottish National Party is perpetually denying any relationship with the violent actions which have been perpetrated in Scotland—the blowing up of pipelines. The members of the SNP cannot, either in the House or elsewhere, use such violent language as "If Westminster does not give powers to the Scottish Assembly the Scottish Assembly will have to take those powers" without inciting violence of action, and they should take the responsibility for it.
  Mr. Rifkind: The debate has been significant for the attempt made by the SNP Members to threaten the House and the people of Scotland as to the unconstitutional action they will support if their demands are not met. It is also significant in that, for the first time, we have heard from the hon. Member for Clackmannan and East Stirlingshire (Mr. Reid) that the SNP favours the disappearance of the Secretary of State for Scotland. The members of the SNP, for the first time, have stated that, notwithstanding the continued existence of the United Kingdom in the foreseeable future, they wish to see the post of Secretary of State for Scotland wither away. They wish to see Scotland's position within the Cabinet, as of right, disappear, irrespective of the future integration of Scotland in the United Kingdom. They do not say that that is a condition of independence.
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  There is no doubt that the amendment is premature. The hon. Member for South Ayrshire (Mr. Sillars) and other hon. Members pointed out how absurd it is at this stage, before a devolution measure is before the House, to prejudge that devolution proposal. I advise my hon. Friends, whatever their general views on devolution, not to support this absurd and premature amendment.
  The Secretary of State for Scotland (Mr. William Ross): I have been fascinated by the range of this debate. Here we have three wee harmless amendments, amendments that do not make very much sense. Let us consider them. Amendment No. 1 seeks to insert the word "democratic". It is sought to insert it in Clause 1(1) so as to make the subsection read:
  "For the purpose of furthering the democratic development of Scotland's economy".
  What does that mean?
  Amendment No. 2 seeks to insert the word "answerable". That does not mean anything legally. If the Agency is answerable to an Assembly it is democratic, and if it is answerable to the Secretary of State it is not—is that what is suggested? Let us remember that we are talking about the Agency. What confusion we are in. It is suggested that somehow the Secretary of State is undemocratic, but at the same time it is left to him to appoint the Scottish Development Agency.
  The hon. Member for Clackmannan and East Stirlingshire (Mr. Reid) said that the amendment was a probing amendment. In fact, we dealt with the same amendment on 10th July. With all his experience and eloquence, the hon. Gentleman could not persuade anyone in the Committee to join him in voting for the amendment. However, it is now claimed to be merely a probing amendment.
  Next, we are told how important a decision is now before the House. It is said that we must make the decision tonight because the meaningfulness of the Assembly depends upon it, not to mention the SDA. Of course, it was said to be merely a probing amendment. What are we talking about? We are talking about the establishment of the Scottish Development Agency. That is the purpose of the Bill, nothing else.

  375
  These are unfortunate amendments. The hon. Gentleman has had the opportunity since the proceedings in Committee to make changes to them but he has not done so. They remain poor amendments. It is suggested that we should insert into the Bill that the Agency shall be
  "answerable to the Scottish Assembly, immediately upon establishment of that Assembly."
  There is no Assembly at present. We have not decided what will be the functions of the Assembly. The House of Commons must make that decision.
  Mr. Crawford rose—
  Mr. Ross: No, I am not nearly finished yet. The hon. Member for Dunbartonshire, East (Mrs. Bain) spoke of housing, education and other matters. We have not decided that those functions shall be transferred from the Secretary of State to the Assembly. We have not had a Bill on the subject. Indeed, we have not had a White Paper. Let the hon. Lady face the fact that she is seeking to deal in a piecemeal fashion with only one function, a function that the Secretary of State does not even have himself.
  The SDA has not been established and the Bill has not yet been approved. There will be plenty of argument as to which functions should be transferred to the Assembly from the Secretary of State, but is it not right to wait until we see the White Paper before starting the argument as to whether what is proposed is right or wrong? Is it not right to deal with the functions in the round and to discuss what is right or wrong on that basis?
  Let SNP Members appreciate that I am getting rather sick of hearing them say "The Scottish people will say". Are they the only interpreters of the will and wishes of the Scottish people?
  It is a measure of their arrogance that rather lets them down when they speak in these terms. We all know our own areas and the ideas of our people. But I would not proclaim myself to be the sole interpreter of what the Scottish people say.
  It is only fairly recently that some SNP Members have been speaking in those terms. An hon. Member referred to what happened when the Highlands and Islands Board was being set up. I felt rather amused listening to that. One member of SNP was a Tory candidate at that time and no doubt was attacking us for our policies. Talk about the inevitability of gradualism! The approach of the hon. Member for Clackmannan and East Stirlingshire was a fairly gradual one.
  This is the wrong time to talk about the functions of the Assembly. It is premature. Without going into the merits of whether it is desirable to do this when we come to deal with the functions of the Assembly, without making a decision in advance, I say that we should reject this amendment.
  Question put, That the amendment be made:—
  The House divided: Ayes 12, Noes 228.

  Division No. 348.]

  AYES

  [10.12 p.m.

  Bain, Mrs Margaret

  Reid, George

  Wilson, Gordon (Dundee E)

  Crawford, Douglas

  Thomas, Dafydd (Merioneth)

  Evans, Gwynfor (Carmarthen)

  Watt, Hamish

  TELLERS FOR THE AYES:

  Grimond, Rt Hon J.

  Welsh, Andrew

  Mr. Douglas Henderson and

  Kilfedder, James

  Wigley, Dafydd

  Mr. George Thompson.

  MacCormick, Iain

  NOES

  Allaun, Frank

  Boyden, James (Bish Auck)

  Cocks, Michael (Bristol S)

  Anderson, Donald

  Bray, Dr Jeremy

  Cohen, Stanley

  Archer, Peter

  Brown, Hugh D. (Provan)

  Coleman, Donald

  Armstrong, Ernest

  Brown, Robert C. (Newcastle W)

  Colquhoun, Mrs Maureen

  Ashley, Jack

  Buchanan, Richard

  Conlan, Bernard

  Atkins, Ronald (Preston N)

  Butler, Mrs Joyce (Wood Green)

  Cook, Robin F. (Edin C)

  Atkinson, Norman

  Campbell, Ian

  Corbett, Robin

  Barnett, Rt Hon Joel (Heywood)

  Canavan, Dennis

  Cox, Thomas (Tooting)

  Bean, R. E.

  Cant, R. B.

  Craigen, J. M. (Maryhill)

  Bennett, Andrew (Stockport N)

  Carmichael, Neil

  Crawshaw, Richard

  Bidwell, Sydney

  Carter, Ray

  Crosland, Rt Hon Anthony

  Bishop, E. S.

  Carter, Ray

  Cryer, Bob

  Blenkinsop, Arthur

  Cartwright, John

  Cunningham, G. (Islington S)

  Boardman, H.

  Castle, Rt Hon Barbara

  Davidson, Arthur

  Booth, Albert

  Clemitson, Ivor

  Davies, Bryan (Enfield N)

  Davies, Denzil (Llanelli)

  Jones, Alec (Rhondda)

  Rees, Rt Hon Merlyn (Leeds S)

  Davis, Clinton (Hackney C)

  Jones, Barry (East Flint)

  Richardson, Miss Jo

  Deakins, Eric

  Jones, Dan (Burnley)

  Roberts, Albert (Normanton)

  Dean, Joseph (Leeds West)

  Kaufman, Gerald

  Roberts, Gwilym (Cannock)

  Delargy, Hugh

  Kelley, Richard

  Robertson, John (Paisley)

  Dempsey, James

  Kilroy-Silk, Robert

  Roderick, Caerwyn

  Doig, Peter

  Kinnock, Neil

  Rodgers, George (Chorley)

  Dormand. J. D.

  Lambie, David

  Rodgers, William (Stockton)

  Douglas-Mann, Bruce

  Lamborn, Harry

  Rooker, J. W.

  Dunn, James A.

  Lamond, James

  Rose, Paul B.

  Dunnett, Jack

  Latham, Arthur (Paddington)

  Ross, Rt Hon W. (Kilmarnock)

  Dunwoody, Mrs Gwyneth

  Lestor, Miss Joan (Eton & Slough)

  Sandelson, Neville

  Eadie, Alex

  Lewis, Ron (Carlisle)

  Sedgemore, Brian

  Edelman, Maurice

  Lipton, Marcus

  Shaw, Arnold (Ilford South)

  Edge, Geoff

  Litterick, Tom

  Sheldon, Robert (Ashton-u-Lyne)

  English, Michael

  Lomas, Kenneth

  Short, Rt Hon E. (Newcastle C)

  Ennals, David

  Loyden, Eddie

  Short, Mrs Renée (Wolv NE)

  Evans, Ioan (Aberdare)

  Luard, Evan

  Silkin, Rt Hon John (Deptford)

  Ewing, Harry (Stirling)

  Lyons, Edward (Bradford W)

  Sillars, James

  Fernyhough, Rt Hon E.

  McCartney, Hugh

  Silverman, Julius

  Fitch, Alan (Wigan)

  McElhone, Frank

  Skinner, Dennis

  Fitt, Gerard (Belfast W)

  MacFarquhar, Roderick

  Small, William

  Flannery, Martin

  McGuire, Michael (Ince)

  Snape, Peter

  Fletcher, Ted (Darlington)

  Maclennan, Robert

  Spearing, Nigel

  Foot, Rt Hon Michael

  McMillan, Tom (Glasgow C)

  Spriggs, Leslie

  Forrester, John

  McNamara, Kevin

  Sproat, Iain

  Fowler, Gerald (The Wrekin)

  Madden, Max

  Stallard, A. W.

  Fraser, John (Lambeth, N'W'd)

  Magee, Bryan

  Stoddart, David

  Freeson, Reginald

  Mallalieu, J. P. W.

  Stott, Roger

  Garrett, W. E. (Wallsend)

  Marquand, David

  Strang, Gavin

  George, Bruce

  Marshall, Dr. Edmund (Goole)

  Strauss, Rt Hon G. R.

  Gilbert, Dr John

  Marshall, Jim (Leicester S)

  Summerskill, Hon Dr Shirley

  Ginsburg, David

  Maynard, Miss Joan

  Swain, Thomas

  Gould, Bryan

  Meacher, Michael

  Taylor, Mrs Ann (Bolton W)

  Gourlay, Harry

  Mellish, Rt Hon Robert

  Thomas, Ron (Bristol NW)

  Graham, Ted

  Mikardo, Ian

  Tierney, Sydney

  Grant, George (Morpeth)

  Millan, Bruce

  Tinn, James

  Grocott, Bruce

  Miller, Dr M. S. (E. Kilbride)

  Tomlinson, John

  Harper, Joseph

  Miller, Mrs Millie (Ilford N)

  Torney, Tom

  Harrison, Walter (Wakefield)

  Molloy, William

  Varley, Rt Hon Eric G.

  Hart, Rt Hon Judith

  Moonman, Eric

  Wainwright, Edwin (Dearne V)

  Hattersley, Rt Hon Roy

  Morris, Alfred (Wythenshawe)

  Walden, Brian (B'ham, L'dyw'd)

  Hatton, Frank

  Morris, Charles R. (Openshaw)

  Walker, Terry (Kingswood)

  Hayman, Mrs Helene

  Morris, Rt Hon J. (Aberavon)

  Watkins, David

  Horam, John

  Moyle, Roland

  Watkinson, John

  Howell, Denis (B'ham, Sm H)

  Mulley, Rt Hon Frederick

  Weetch, Ken

  Hoyle, Doug (Nelson)

  Murray, Rt Hon Ronald King

  Weitzman, David

  Hughes, Rt Hon C. (Anglesey)

  Newens, Stanley

  Wellbeloved, James

  Hughes, Robert (Aberdeen, N)

  Noble, Mike

  White, James (Pollok)

  Hughes, Roy (Newport)

  Oakes, Gordon

  Whitlock, William

  Hunter, Adam

  O'Malley, Rt Hon Brian

  Willey, Rt Hon Frederick

  Irvine, Rt Hon Sir A. (Edge Hill)

  Orbach, Maurice

  Williams, Alan (Swansea W)

  Irving, Rt Hon S. (Dartford)

  Ovenden, John

  Williams, Alan Lee (Hornch'ch)

  Jackson, Miss Margaret (Lincoln)

  Padley, Walter

  Wilson, Alexander (Hamilton)

  Janner, Greville

  Park, George

  Wise, Mrs. Audrey

  Jay, Rt Hon Douglas

  Parker, John

  Woof, Robert

  Jeger, Mrs Lena

  Parry, Robert

  Wrigglesworth, Ian

  Jenkins, Hugh (Putney)

  Peart, Rt Hon Fred

  Young, David (Bolton E)

  Jenkins, Rt Hon Roy (Stechford)

  Perry, Ernest

  John, Brynmor

  Phipps, Dr Colin

  TELLERS FOR THE NOES

  Johnson, James (Hull West)

  Prentice, Rt Hon Reg

  Mr. James Hamilton and

  Johnson, Walter (Derby S)

  Price, William (Rugby)

  Mr. Laurie Pavitt.

  Question accordingly negatived.
  Mr. Millan: I beg to move Amendment No. 3, in page 1, line 13, leave out 'six' and insert 'eight'.
  There was some discussion in Committee about the number of members of the Agency. I indicated then that I thought that if we wanted to change the number we should do so by increasing the minimum number, which, at six, seemed to me to be rather small. I thought that the maximum might well be 12, but I said that I would consider the minimum number. Having done so, and having taken account of the large range of functions which the Agency will carry out, we think that eight is the more appropriate minimum figure.
  Amendment agreed to.
  Mr. Grimond: I beg to move Amendment No. 4, in page 1, line 21, after 'workers', insert:
  'or representatives of small businesses, or representatives of rural industries,'.
  Mr. Speaker: With this we shall take Amendment No. 17, in Clause 15, page 15, line 26, leave out subsection (5).
  Mr. Grimond: Amendment No. 4 refers to subsection (4) of Clause 1, which lays down the classes of person from whom the Secretary of State is to appoint the members of the Agency. He is given wide discretion. Indeed, it appears by the latter part of the subsection that he can appoint practically anyone from every sector
  "…which the Secretary of State considers is relevant to the…functions of the Agency."
  It could well be said that it is unnecessary to specify any particular class of person, but earlier the clause so specifies. It particularly mentions those who have
  "…shown capacity in industry, banking, accounting or finance, environmental matters, local government or the representation of workers…".
  It seems to me, therefore, that if we are to specify, bearing in mind that in Scotland there is great need to have some people at least who are experienced in small-scale industry and in rural matters, it might be wise to include them.
  I recognise that it is always difficult to know where one is to stop once one
  380
  specifies people in a class of this sort, but it seems to us that, as it stands, the provision is weighted possibly in favour of those who might generally be thought to be connected with rather large-scale industry, and so on, and that we might well emphasise, therefore, that people with rural experience and who are well versed in the problems of running smaller industries, particularly in the rural areas, should be included as well.
  Mr. Millan: I want to deal with with Amendment No. 17 first. I do not think that the right hon. Member for Orkney and Shetland (Mr. Grimond) referred to it. It would take the Small Industries Council for Rural Areas of Scotland out of the Agency. I take it, therefore, that it is a probing amendment, and I hope that it will be withdrawn, for reasons which I shall put to the right hon. Gentleman. The work of SICRAS is very important and is work which can be carried out very appropriately through the Agency.
  I take the point of Amendment No. 4. We discussed it at some length in Committee. At one point I almost offered to take out everything in reference to different backgrounds and simply give the Secretary of State carte blanche to choose the members of the Agency. I believe that on balance there was a feeling in Committee that the matters that had been mentioned were worth mentioning and that the clause would lose something if any of them were removed. Nevertheless, it would be a mistake to include additional questions of this type. I can think of a number of other areas of experience that one could quite well write into the subsection. Experience of industry, accounting, finance and so on can equally apply to small businesses or rural industries as it applies to large industries in urban areas. There is nothing exclusively related to the larger urban areas in the clause, as drafted, at present.
  I have already said that the Scottish Development Agency will pay attention to all areas of Scotland. I believe that the small business sector is an important part of Scotland's economy. It should be nurtured and allowed to expand. Often that can be done with comparatively small sums of Government money, but with the help of management as well as advice,

  381
  experience and all the rest which a small business sometimes finds it difficult to obtain for itself. This is already well within the compass of the Agency and what we expect the Agency to do.
  I can give all these assurances, but, to avoid making the subsection more elaborate, I cannot recommend that we make the amendment, because the kind of experience that it says should be specifically looked for is already covered.
  Mr. Grimond: In view of the Minister's assurance that he has got the matter much in mind and will ensure that SICRAS is properly represented, I beg to ask leave to withdraw the amendment.
  Amendment, by leave, withdrawn.

  SCOTTISH DEVELOPMENT AGENCY (No. 2) BILL
    Clause 2

      GENERAL PURPOSES AND FUNCTIONS
      Mr. Millan: I beg to move Amendment No. 5, in page 2, line 25, leave out 'and' and insert—
      '(bb) the promotion of industrial efficiency and international competitiveness; and'.
      This matter was discussed in Committee, where I was asked, in connection with an amendment which I believe was worded in a sightly different way from this one why I did not include words about industrial efficiency, international competitiveness and the rest, because these were words already in the Industry Bill and in the Welsh Development Agency Bill. I made the point then which I think in principle is right; namely, that there was no reason why the wording of our Bill should follow the Welsh Bill or the Industry Bill or that the wording of those Bills should follow our Bill. I said that we should maintain a certain independence in the matter. That is certainly true in principle, and it applies to other parts of the Bill in practical terms, but, having looked at the wording of this clause again, it seemed to me that it might be misunderstood if these words were not in the Scottish Bill but were in the Welsh Bill and the Industry Bill.
      It might be thought, however unfairly and unjustifiably, that we were not concerned about promoting industrial efficiency and competitiveness in an interna-
      382
      tional way. It was to avoid such misunderstanding that it seemed to me, on balance, that it was better that these words should be put into the Bill. Those who served on the Committee will welcome this amendment.
      Amendment agreed to.
      Mr. Millan: I beg to move Amendment No. 6, in page 3, line 16, leave out 'subsection (5)' and insert 'subsections (5) and (6)'.
      This is a drafting amendment consequential on another amendment made in Committee. The consequential drafting amendment was not made at that time, but it is now made by the amendment.
      Amendment agreed to.
      10.30 p.m.
      Mr. William Ross: I beg to move Amendment No. 7, in page 3, line 39, at end insert—
      '(4A) The functions of the Agency mentioned in subsection (2)(b) above may only be exercised through a company within the meaning of the Companies Act 1948 or through a partnership firm.'.
      Since the Committee stage we have reflected as to whether it would be desirable and appropriate to put some more words into the Bill which would clarify our intentions with regard to the Agency's industrial investment functions under Clause 2(2)(b). As a result, I commend the amendment to the House. It provides that, in performing its industrial investment functions under Clause 2(2)(b), the Agency is required to operate through a company within the meaning of the Companies Act or through a partnership firm. It will mean that any company set up by the Agency, whether wholly- or partially-owned, will be subject to the same rules of conduct and the same liabilities as are private companies. They will be regulated by the City code and by all the legislation which governs commercial trading activities. This meets the point which was raised in Committee and is a useful clarification.
      Mr. Buchanan-Smith: I welcome the amendment, which covers points such as auditing to which I will return.
      Amendment agreed to.

    Clause 5

      EXERCISE BY AGENCY OF POWERS TO GIVE SELECTIVE FINANCIAL ASSISTANCE UNDER INDUSTRY ACT 1972
      Amendment made: No. 9, in page 6, line 4, after 'of' insert 'and incidental to'.—[Mr. Millan.]
      Mr. Millan: I beg to move Amendment No. 10, in page 6, line 18, leave out subsection (14).
      Mr. Deputy Speaker (Mr. Oscar Murton): With that amendment we will take the following amendments:
      No. 22, in Schedule 2, page 26, line 32, after 'Agency', insert '(a)'.
      No. 23, in page 26, line 34, after 'relates', insert:
      'and
      (b) in respect of their administrative expenses'.
      Mr. Millan: The amendments must be read together. This is a slightly complicated drafting point relating to the administrative expenses of the Agency. The effect of the three amendments taken together is to improve the drafting and to enable all administrative costs of the Agency to be met from grant in aid, which is what the intention has been.
      Amendment agreed to.

    Clause 7

      DEVELOPMENT AND IMPROVEMENT OF THE ENVIRONMENT
      Mr. Millan: I beg to move Amendment No. 11, in page 7, line 10, leave out from 'given' to end of line 11 and insert:
      'in relation to a specific act of the Agency or in relation to all acts of a class or description specified in the approval, and may be given subject to such conditions as may be so specified'.
      The effect of the amendment is to allow the Secretary of State to issue approvals for a class of scheme rather than to approve each scheme individually. It will obviously depend on such matters as the scale of the scheme whether it is a matter of individual approval or whether the Secretary of State does it in a wider way. This is an improvement in the drafting
      384
      and improves the flexibility and should reduce the administration.
      Amendment agreed to.

    Clause 8

      DERELICT LAND
      Mr. Millan: I beg to move Amendment No. 12, in page 8, line 36, at end insert—
      '(5) Where the Agency exercise or propose to exercise their powers under this section in connection with land as respects which a local authority have before the appointed day incurred expenditure in the exercise of similar powers, the Agency may, if they think fit, pay to the authority concerned the amount of that expenditure or any part thereof.'.
      The amendment is basically in the nature of a transitional provision. The claims of derelict land will become the Agency's responsibility. There is already provision in the Bill for transitional arrangements. It has been pointed out to us—for example, by the local authorities themselves—that in some cases they will have incurred expense on schemes which will be taken over by the Agency and which are not already covered by the transitional provisions in the Bill and they should be reimbursed for any expenses they have already incurred on the schemes. The effect of the amendment will be to empower the Agency to reimburse them. Obviously this is only right, as the local authority will no longer be responsible for the schemes. The local authorities have legitimately asked for this. It is an improvement in the Bill from their point of view.
      Amendment agreed to.

    Clause 10

      POWERS OF ENTRY
      Mr. Millan: I beg to move Amendment No. 13, in page 10, line 11, leave out 'Any' and insert
      'Subject to subsection (2) below, any'.
      This is basically a drafting amendment which arose out of an interesting little discussion in Committee initiated by the hon. and learned Member for Kinross and West Perthshire (Mr. Fairbairn), who took the view that the clause was inadequate and did not properly incorporate

      385
      the safeguards in subsection (2) because there was no reference to them in subsection (1). I am not sure I altogether agree with him, but this amendment is made in order to make it clear beyond peradventure that the drafting is correct.
      Amendment agreed to.

    Clause 11

      POWER TO OBTAIN INFORMATION
      Mr. Teddy Taylor: I beg to move Amendment No. 14, in page 12, line 5, at end insert—
      '(1A) Any person or body required to provide information under subsection (1) above shall be entitled to obtain compensation from the Agency for expenses reasonably incurred in providing and obtaining the said information'.
      Clause 11 gives the Agency power to send a notice to people or companies who occupy premises or obtains rent from them to give information about their own interest and the name and address of anyone else known to them as having an interest in the premises, whether as superior, owner, heritable creditor, lessee or otherwise. Failure to do this can result in a fine of £100, and a knowing mis-statement can bring a fine of £400 or two years' imprisonment.
      If any hon. Member received a notice of this sort, the first thing he would do would be to see a lawyer. Expense might be involved, and I am suggesting in the amendment that reasonable legal costs involved in getting this information should
      be paid by the Agency. This would be a protection for the public and would prevent the Agency from asking for too much unnecessary information.
      Mr. Millan: The provision in Clause 11 is a common form for any enactment which confers powers of compulsory acquisition. [Interruption.] I do not know where the right hon. Member for Yeovil (Mr. Peyton) has come from. If he wants to make an intelligent or intelligible contribution, perhaps he would care to stand up. We have done quite well without his presence during the rest of the day.
      All that is required under this clause is that the person concerned should state his interest in the land—whether he is an occupier or a landlord—and he is not obliged to carry out expensive surveys to find out any information. There is no reason why he should be entitled to obtain compensation for what would be basically writing a letter to the Agency telling it of his interest.
      Mr. Teddy Taylor: That reply is quite unsatisfactory. It is not just a question of a person's own interest. He must give details of other people known to him. We are going too far in forcing people to give information and making them liable to heavy penalties if they do not. We can stop this by voting for the amendment.
      Question put, That the amendment be made:—
      The House divided: Ayes 177, Noes 224.

      Division No. 349.]

      AYES

      [10.40 p.m.

      Aitken, Jonathan

      Costain, A. P.

      Galbraith, Hon. T. G. D.

      Arnold, Tom

      Crouch, David

      Gardiner, George (Reigate)

      Atkins, Rt Hon H. (Spelthorne)

      Davies, Rt Hon J. (Knutsford)

      Gardner, Edward (S Fylde)

      Banks, Robert

      Dean, Paul (N Somerset)

      Gilmour, Sir John (East Fife)

      Berry, Hon Anthony

      Dodsworth, Geoffrey

      Glyn, Dr Alan

      Bitten, John

      Douglas-Hamilton, Lord James

      Godber, Rt Hon Joseph

      Body, Richard

      Drayson, Burnaby

      Goodhart, Philip

      Boscawen, Hon Robert

      du Cann, Rt Hon Edward

      Goodhew, Victor

      Bottomley, Peter

      Durant, Tony

      Goodlad, Alastair

      Bowden, A. (Brighton, Kemptown)

      Eden, Rt Hon Sir John

      Gorst, John

      Bovson, Dr Rhodes (Brent)

      Edwards, Nicholas (Pembroke)

      Gow, Ian (Eastbourne)

      Brittan, Leon

      Elliott, Sir William

      Gray, Hamish

      Brotherton, Michael

      Emery, Peter

      Grieve, Percy

      Buchanan-Smith, Alick

      Eyre, Reginald

      Grimond, Rt Hon J.

      Bulmer, Esmond

      Fairbairn, Nicholas

      Grist, Ian

      Carlisle, Mark

      Fairgrieve, Russell

      Hall, Sir John

      Churchill, W. S.

      Farr, John

      Hamilton, Michael (Salisbury)

      Clark, Alan (Plymouth, Sutton)

      Finsberg, Geoffrey

      Hampson, Dr Keith

      Clark, William (Croydon S)

      Fisher, Sir Nigel

      Hannam, John

      Clarke, Kenneth (Rushcliffe)

      Fletcher-Cooke, Charles

      Hastings, Stephen

      Cockcroft, John

      Fookes, Miss Janet

      Havers, Sir Michael

      Cooks Robert (Bristol W)

      Fowler, Norman (Sutton C'f'd)

      Hawkins, Paul

      Cope John

      Fox, Marcus

      Hayhoe, Barney

      Cordle, John H.

      Fraser, Rt Hon H. (Stafford & St)

      Heseltine, Michael

      Hicks, Robert

      Meyer, Sir Anthony

      Scott, Nicholas

      Higgins, Terence L.

      Mills, Peter

      Shaw, Giles (Pudsey)

      Hordern, Peter

      Miscampbell, Norman

      Shelton, William (Streatham)

      Howe, Rt Hon Sir Geoffrey

      Moate, Roger

      Shepherd, Colin

      Hunt, John

      Montgomery, Fergus

      Shersby, Michael

      Hutchison, Michael Clark

      Moore, John (Croydon C)

      Sims, Roger

      Irving, Charles (Cheltenham)

      More, Jasper (Ludlow)

      Sinclair, Sir George

      James, David

      Morgan, Geraint

      Skeet, T. H. H.

      Jenkin, Rt Hon P. (Wanst'd & W'df'd)

      Morgan-Giles, Rear-Admiral

      Smith, Cyril (Rochdale)

      Jessel, Toby

      Morris, Michael (Northampton S)

      Smith, Dudley (Warwick)

      Johnson Smith, G. (E Grinstead)

      Morrison, Hon Peter (Chester)

      Speed, Keith

      Jopling, Michael

      Mudd, David

      Sproat, Iain

      Joseph, Rt Hon Sir Keith

      Neave, Airey

      Stanbrook, Ivor

      Kilfedder, James

      Nelson, Anthony

      Stewart, Ian (Hitchin)

      Kimball, Marcus

      Neubert, Michael

      Stokes, John

      King, Tom (Bridgwater)

      Newton, Tony

      Stradling Thomas, J.

      Knight, Mrs. Jill

      Nott, John

      Taylor. Teddy (Cathcart)

      Knox, David

      Oppenheim, Mrs Sally

      Temple-Morris, Peter

      Lamont, Norman

      Page, Rt Hon R. Graham (Crosby)

      Thomas, Rt Hon P. (Hendon S)

      Latham, Michael (Melton)

      Parkinson, Cecil

      Thorpe, Rt Hon P. (Hendon S)

      Lawrence, Ivan

      Pattie, Geoffrey

      Townsend, Cyril D.

      Lawson, Nigel

      Penhaligon, David

      Trotter, Neville

      Lester Jim (Beeston)

      Percival, Ian

      van Straubenzee, W. R.

      Loveridge, John

      Peyton, Rt Hon John

      Vaughan, Dr Gerard

      Macfarlane, Neil

      Pink, R. Bonner

      Viggers, Peter

      MacGregor, John

      Price, David (Eastleigh)

      Wakeham, John

      Macmillan, Rt Hon M. (Farnham)

      Pym, Rt Hon Francis

      Walder, David (Clitheroe)

      McNair-Wilson, M. (Newbury)

      Raison, Timothy

      Wells, John

      McNair-Wilson, P. (New Forest)

      Rees, Peter (Dover & Deal)

      Wiggin, Jerry

      Madel, David

      Renton, Rt Hon Sir D. (Hunts)

      Wood, Rt Hon Richard

      Marshall, Michael (Arundel)

      Rifkind Malcolm

      Young, Sir G. (Ealing, Acton)

      Marten, Neil

      Rippon, Rt Hon Geoffrey

      Younger, Hon George

      Mates, Michael

      Roberts, Michael (Cardiff NW)

      Mather, Carol

      Rossi, Hugh (Hornsey)

      TELLERS FOR THE AYES:

      Mawby, Ray

      Sainsbury, Tim

      Mr. Adam Butler and

      Maxwell-Hyslop, Robin

      St. John-Stevas, Norman

      Mr. Fred Silvester

      Mayhew, Patrick

      NOES

      Allaun, Frank

      Dean, Joseph (Leeds West)

      Hunter, Adam

      Anderson, Donald

      Delargy, Hugh

      Irving, Rt Hon S. (Dartford)

      Archer, Peter

      Dempsey, James

      Jackson, Colin (Brighouse)

      Armstrong. Ernest

      Doig, Peter

      Jackson, Miss Margaret (Lincoln)

      Atkins, Ronald (Preston N)

      Dormand, J. D.

      Janner, Greville

      Atkinson, Norman

      Douglas-Mann, Bruce

      Jay, Rt Hon Douglas

      Bain. Mrs Margaret

      Dunnett, Jack

      Jeger, Mrs Lena

      Bean, R. E.

      Dunwoody, Mrs Gwyneth

      Jenkins, Hugh (Putney)

      Bennett, Andrew (Stockport N)

      Eadie, Alex

      John, Brynmor

      Bidwell, Sydney

      Edge, Geoff

      Johnson, Walter (Derby S)

      Bishop, E. S.

      English, Michael

      Jones, Alec (Rhondda)

      Blenkinsop, Arthur

      Ennals, David

      Jones, Barry (East Flint)

      Boardman, H.

      Evans, Gwynfor (Carmarthen)

      Jones, Dan (Burnley)

      Booth. Albert

      Evans, Ioan (Aberdare)

      Kaufman, Gerald

      Bray, Dr Jeremy

      Ewing, Harry (Stirling)

      Kelley, Richard

      Brown, Hugh D. (Provan)

      Fernyhough, Rt Hon E.

      Kilroy-Silk, Robert

      Brown, Robert C. (Newcastle W)

      Fitch, Alan (Wigan)

      Kinnock, Neil

      Buchanan, Richard

      Fitt, Gerard (Belfast W)

      Lambie, David

      Campbell, Ian

      Flannery, Martin

      Lamborn, Harry

      Canavan, Dennis

      Fletcher, Ted (Darlington)

      Lamond, James

      Cant, R. B.

      Forrester, John

      Latham, Arthur (Paddington)

      Carmichael, Neil

      Fowler, Gerald (The Wrekin)

      Lestor, Miss Joan (Eton & Slough)

      Carter, Ray

      Fraser, John (Lambeth, N'w'd)

      Lipton, Marcus

      Carter-Jones, Lewis

      Freeson, Reginald

      Litterick, Tom

      Cartwright, John

      Garrett, W. E. (Wallsend)

      Lomas, Kenneth

      Castle, Rt Hon Barbara

      George, Bruce

      Loyden, Eddie

      Clemitson, Ivor

      Gilbert, Dr John

      Luard, Evan

      Cocks, Michael (Bristol S)

      Ginsburg, David

      Lyons, Edward (Bradford W)

      Cohen, Stanley

      Gould, Bryan

      McCartney, Hugh

      Coleman, Donald

      Gourlay, Harry

      MacCormick, Iain

      Conlan, Bernard

      Graham, Ted

      McElhone, Frank

      Coot, Robin F. (Edin C)

      Grant, George (Morpeth)

      MacFarquhar, Roderick

      Corbett, Robin

      Grocott, Bruce

      McGuire, Michael (Ince)

      Cox, Thomas (Tooting)

      Harper, Joseph

      Maclennan, Robert

      Craigen, J. M. (Maryhill)

      Harrison, Walter (Wakefield)

      McMillan, Tom (Glasgow C)

      Crawford, Douglas

      Hart, Rt Hon Judith

      McNamara, Kevin

      Crawshaw, Richard

      Hattersley, Rt Hon Roy

      Madden, Max

      Crosland, Rt Hon Anthony

      Hatton, Frank

      Magee, Bryan

      Cryer, Bob

      Hayman, Mrs Helena

      Mallalieu, J. P. W.

      Cunningham, G. (Islington S)

      Henderson, Douglas

      Marquand, David

      Davidson, Arthur

      Horam, John

      Marshall, Dr. Edmund (Goole)

      Davies, Bryan (Enfield N)

      Howell, Denis (B'ham, Sm H)

      Marshall, Jim (Leicester S)

      Davies, Denzil (Llanelli)

      Hoyle, Doug (Nelson)

      Maynard, Miss Joan

      Davis, Clinton (Hackney C)

      Hughes, Rt Hon C. (Anglesey)

      Meacher, Michael

      Deakins, Eric

      Hughes, Robert (Aberdeen, N)

      Mellish, Rt Hon Robert

      Mikardo, Ian

      Roberts, Gwilym (Cannock)

      Thompson, George

      Millan, Bruce

      Robertson, John (Paisley)

      Tierney, Sydney

      Miller, Or M. S. (E. Kilbride)

      Roderick, Caerwyn

      Tinn, James

      Miller, Mrs Millie (Ilford N)

      Rodgers, George (Chorley)

      Tomlinson, John

      Molloy, William

      Rodgers, William (Stockton)

      Torney, Tom

      Moonman, Eric

      Rooker, J. W.

      Varley, Rt Hon Eric G.

      Morris, Alfred (Wythenshawe)

      Rose, Paul B.

      Wainwright, Edwin (Dearne V)

      Morris, Charles R. (Openshaw)

      Ross, Rt Hon W. (Kilmarnock)

      Walden, Brian (B'ham, L'dyw'd)

      Morris, Rt Hon J. (Aberavon)

      Sandelson, Neville

      Walker, Terry (Kingswood)

      Moyle, Roland

      Sedgemore, Brian

      Watkins, David

      Mulley, Rt Hon Frederick

      Shaw, Arnold (Ilford South)

      Watkinson, John

      Murray, Rt Hon Ronald King

      Sheldon, Robert (Ashton-u-Lyne)

      Watt, Hamish

      Newens, Stanley

      Short, Rt Hon E. (Newcastle C)

      Weetch, Ken

      Noble, Mike

      Short, Mrs Renée (Wolv NE)

      Wellbeloved, James

      Oakes, Gordon

      Silkin, Rt Hon John (Wolv NE)

      Welsh, Andrew

      Ogden, Eric

      Sillars, James

      White, James (Pollok)

      O'Malley, Rt Hon Brian

      Silverman, Julius

      Whitlock, William

      Orbach, Maurice

      Skinner, Dennis

      Wigley, Dafydd

      Ovenden, John

      Small, William

      Willey, Rt Hon Frederick

      Padley, Walter

      Snape, Peter

      Williams, Alan (Swansea W)

      Park, George

      Spearing, Nigel

      Williams, Alan Lee (Hornch'ch)

      Parker, John

      Spriggs, Leslie

      Wilson, Alexander (Hamilton)

      Parry, Robert

      Stallard, A. W.

      Wilson. Gordon (Dundee E)

      Pavitt, Laurie

      Stoddart, David

      Wise, Mrs. Audrey

      Peart, Rt Hon Fred

      Stott, Roger

      Wool, Robert

      Perry, Ernest

      Strang, Gavin

      Wrigglesworth, Ian

      Phipps, Dr Colin

      Strauss, Rt Hon G. R.

      Young, David (Bolton E)

      Rees, Rt Hon Merlyn (Leeds S)

      Summerskill, Hon Dr Shirley

      Reid, George

      Taylor, Mrs Ann (Bolton W)

      TELLERS FOR THE NOES:

      Richardson, Miss Jo

      Thomas, Dafydd (Merioneth)

      Mr. James Hamilton and

      Roberts, Albert (Normanton)

      Thomas, Ron (Bristol NW)

      Mr. James A. Dunn

      Question accordingly negatived.

    Clause 13

      FINANCES OF THE AGENCY
      Amendment proposed: No. 15, in page 13, line 42, at end insert—
      'Notwithstanding the general limit imposed by this subsection, the Agency shall not be authorised to spend more than £50 million
      on the exercise of their powers under section 2(2)(b) until a report has been submitted to Parliament on the record and achievements of the Agency in this regard, and the report has been approved by both Houses of Parliament'.—[Mr. Buchanan-Smith.]
      Question put, That the amendment be made:—
      The House divided: Ayes 177, Noes 223.

      Division No. 350.]

      AYES

      [10.50 p.m.

      Aitken, Jonathan

      Emery, Peter

      Higgins, Terence L.

      Arnold, Tom

      Eyre, Reginald

      Hordern, Peter

      Atkins, Rt Hon H. (Spelthorne)

      Fairbairn, Nicholas

      Howe, Rt Hon Sir Geoffrey

      Banks, Robert

      Fairgrieve, Russell

      Hunt, John

      Biffen, John

      Farr, John

      Hutchison, Michael Clark

      Body, Richard

      Finsberg, Geoffrey

      Irving, Charles (Cheltenham)

      Boscawen, Hon Robert

      Fisher, Sir Nigel

      James, David

      Bottomley, Peter

      Fletcher-Cooke, Charles

      Jenkin, Rt Hon P. (Wanst'd & W'df'd)

      Bowden, A. (Brighton, Kemptown)

      Fookes, Miss Janet

      Jessel, Toby

      Boyson, Dr Rhodes (Brent)

      Fowler, Norman (Sutton C'f'd)

      Johnson Smith, G. (E Grinstead)

      Brittan, Leon

      Fox, Marcus

      Jopling, Michael

      Brotherton, Michael

      Fraser, Rt Hon H. (Stafford & St)

      Joseph, Rt Hon Sir Keith

      Buchanan-Smith, Alick

      Galbraith, Hon. T. G. P.

      Kimball, Marcus

      Bulmer, Esmond

      Gardiner, George (Reigate)

      King, Tom (Bridgwater)

      Butler, Adam (Bosworth)

      Gardner, Edward (S Fylde)

      Knight, Mrs. Jill

      Carlisle, Mark

      Gilmour, Sir John (East Fife)

      Knox, David

      Churchill, W. S.

      Glyn, Dr Alan

      Lamont, Norman

      Clark, Alan (Plymouth, Sutton)

      Godber, Rt Hon Joseph

      Latham, Michael (Melton)

      Clark, William (Croydon S)

      Goodhart, Philip

      Lawrence, Ivan

      Clarke, Kenneth (Rushcliffe)

      Goodhew, victor

      Lawson, Nigel

      Cockcroft, John

      Goodlad, Alastair

      Lester Jim (Beeston)

      Cooke, Robert (Bristol W)

      Gorst, John

      Loveridge, John

      Cope, John

      Gow, Ian (Eastbourne)

      Macfarlane, Neil

      Cordle, John H.

      Gray, Hamish

      MacGregor, John

      Costain, A. P.

      Grieve, Percy

      Macmillan, Rt Hon M. (Farnham)

      Crouch, David

      Grimond, Rt Hon J.

      McNair-Wilson, M. (Newbury)

      Davies, Rt Hon J. (Knutsford)

      Grist, Ian

      McNair-Wilson, P. (New Forest)

      Dean, Paul (N Somerset)

      Hamilton, Michael (Salisbury)

      Madel, David

      Dodsworth, Geoffrey

      Hampson, Dr Keith

      Marshall, Michael (Arundel)

      Douglas-Hamilton, Lord James

      Hannam, John

      Marten, Neil

      Drayson, Burnaby

      Hastings, Stephen

      Mates, Michael

      du Cann, Rt Hon Edward

      Havers, Sir Michael

      Mather, Carol

      Durant, Tony

      Hawkins, Paul

      Mawby, Ray

      Eden, Rt Hon Sir John

      Hayhoe, Barney

      Maxwell-Hyslop, Robin

      Edwards, Nicholas (Pembroke)

      Heseltine, Michael

      Mayhew, Patrick

      Elliott, Sir William

      Hicks, Robert

      Meyer, Sir Anthony

      Mills, Peter

      Pym, Rt Hon Francis

      Stanbrook, Ivor

      Miscampbell, Norman

      Raison, Timothy

      Stewart, Ian (Hitchin)

      Moate, Roger

      Rees, Peter (Dover & Deal)

      Stokes, John

      Montgomery, Fergus

      Renton, Rt Hon Sir D. (Hunts)

      Stradling Thomas, J.

      Moore, John (Croydon C)

      Rifkind Malcolm

      Taylor, Teddy (Cathcart)

      More, Jasper (Ludlow)

      Rippon, Rt Hon Geoffrey

      Temple-Morris, Peter

      Morgan, Geraint

      Roberts, Michael (Cardiff NW)

      Thomas, Rt Hon P. (Hendon S)

      Morgan-Giles, Rear-Admiral

      Rossi, Hugh (Hornsey)

      Thorpe, Rt Hon Jeremy (N Devon)

      Morris, Michael (Northampton S)

      Sainsbury, Tim

      Townsend, Cyril D.

      Morrison, Hon Peter (Chester)

      St. John-Stevas, Norman

      Trotter, Neville

      Mudd, David

      Scott, Nicholas

      van Straubenzee, W. R.

      Neave, Airey

      Shaw, Giles (Pudsey)

      Vaughan, Dr Gerard

      Nelson, Anthony

      Shelton, William (Streatham)

      Viggers, Peter

      Neubert, Michael

      Shepherd, Colin

      Wakeham, John

      Newton, Tony

      Shersby, Michael

      Walder, David (Clitheroe)

      Nott, John

      Silvester, Fred

      Wells, John

      Oppenheim, Mrs Sally

      Sims, Roger

      Wiggin, Jerry

      Page, Rt Hon R. Graham (Crosby)

      Sinclair, Sir George

      Wood, Rt Hon Richard

      Pattie, Geoffrey

      Skeet, T. H. H.

      Young, Sir G. (Ealing, Acton)

      Penhaligon, David

      Smith, Cyril (Rochdale)

      Younger, Hon George

      Percival, Ian

      Smith, Dudley (Warwick)

      Peyton, Rt Hon John

      Speed, Keith

      TELLERS FOR THE AYES:

      Pink, R. Bonner

      Spicer, Michael (S Worcester)

      Mr. Cecil Parkinson and

      Price, David (Eastleigh)

      Sproat, Iain

      Mr. Anthony Berry.

      NOES

      Allaun, Frank

      Evans, Ioan (Aberdare)

      Loyden, Eddie

      Anderson, Donald

      Ewing, Harry (Stirling)

      Luard, Evan

      Archer, Peter

      Fernyhough, Hon E.

      Lyons, Edward (Bradford W)

      Armstrong, Ernest

      Fitch, Alan (Wigan)

      McCartney, Hugh

      Atkins, Ronald (Preston N)

      Fitt, Gerard (Belfast W)

      MacCormick, Iain

      Atkinson, Norman

      Flannery, Martin

      McElhone, Frank

      Bain, Mrs Margaret

      Fletcher, Ted (Darlington)

      MacFarquhar, Roderick

      Bean, R. E.

      Forrester, John

      McGuire, Michael (Ince)

      Bennett, Andrew (Stockport N)

      Fowler, Gerald (The Wrekin)

      Maclennan, Robert

      Bidwell, Sydney

      Fraser, John (Lambeth, N'w'd)

      McMillan, Tom (Glasgow C)

      Bishop, E. S.

      Freeson, Reginald

      McNamara, Kevin

      Blenkinsop, Arthur

      Garrett, W. E. (Wallsend)

      Madden, Max

      Boardman, H.

      George, Bruce

      Magee, Bryan

      Booth, Albert

      Gilbert, Dr John

      Mallalieu, J. P. W.

      Bray, Dr Jeremy

      Ginsburg, David

      Marshall, Dr. Edmund (Goole)

      Brown, Hugh D. (Provan)

      Gould, Bryan

      Marshall, Jim (Leicester S)

      Brown, Robert C. (Newcastle W)

      Gourlay, Harry

      Maynard, Miss Joan

      Buchanan, Richard

      Graham, Ted

      Meacher, Michael

      Campbell, Ian

      Grant, George (Morpeth)

      Mellish, Rt Hon Robert

      Canavan, Dennis

      Grocott, Bruce

      Mikardo, Ian

      Cant, R. B.

      Hamilton, James (Bothwell)

      Millan, Bruce

      Carmichael, Neil

      Harrison, Walter (Wakefield)

      Miller, Dr M. S. (E. Kilbride)

      Carter, Ray

      Hart, Rt Hon Judith

      Miller, Mrs Millie (Ilford N)

      Carter-Jones, Lewis

      Hattersley, Rt Hon Roy

      Molloy, William

      Cartwright, John

      Hatton, Frank

      Moonman, Eric

      Castle, Rt Hon Barbara

      Hayman, Mrs Helene

      Morris, Alfred (Wythenshawe)

      Clemitson, Ivor

      Henderson, Douglas

      Morris, Charles R. (Openshaw)

      Cocks, Michael (Bristol S)

      Horam, John

      Morris, Rt Hon J. (Aberavon)

      Cohen, Stanley

      Howell, Denis (B'ham, Sm H)

      Moyle, Roland

      Coleman, Donald

      Hoyle, Doug (Nelson)

      Mulley, Rt Hon Frederick

      Conlan, Bernard

      Hughes, Rt Hon C. (Anglesey)

      Murray, Rt Hon Ronald King

      Cook, Robin F. (Edin C)

      Hughes, Robert (Aberdeen, N)

      Newens, Stanley

      Corbett, Robin

      Hunter, Adam

      Noble, Mike

      Cox, Thomas (Tooting)

      Irving, Rt Hon S. (Dartford)

      Oakes, Gordon

      Craigen, J. M. (Maryhill)

      Jackson, Colin (Brighouse)

      Ogden, Eric

      Crawford, Douglas

      Jackson, Miss Margaret (Lincoln)

      O'Malley, Rt Hon Brian

      Crawshaw, Richard

      Janner, Greville

      Orbach, Maurice

      Crosland, Rt Hon Anthony

      Jay, Rt Hon Douglas

      Ovenden, John

      Cryer, Bob

      Jeger, Mrs Lena

      Padley, Walter

      Cunningham, G. (Islington S)

      Jenkins, Hugh (Putney)

      Park, George

      Davidson, Arthur

      John, Brynmor

      Parker, John

      Davies, Bryan (Enfield N)

      Johnson, Walter (Derby S)

      Parry, Robert

      Davies, Denzil (Llanelli)

      Jones, Alec (Rhondda)

      Pavitt, Laurie

      Davis Clinton (Hackney C)

      Jones, Barry (East Flint)

      Peart, Rt Hon Fred

      Deakins, Eric

      Jones, Dan (Burnley)

      Perry, Ernest

      Dean, Joseph (Leeds West)

      Kaufman, Gerald

      Phipps, Dr Colin

      Delargy, Hugh

      Kelley, Richard

      Price, William (Rugby)

      Dempsey, James

      Kilfedder, James

      Rees, Rt Hon Merlyn (Leeds S)

      Doig, Peter

      Kilroy-Silk, Robert

      Richardson, Miss Jo

      Douglas-Mann, Bruce

      Kinnock, Neil

      Roberts, Albert (Normanton)

      Dunn, James A.

      Lambie, David

      Roberts, Gwilym (Cannock)

      Dunnett, Jack

      Lamborn, Harry

      Robertson, John (Paisley)

      Dunwoody, Mrs Gwyneth

      Lamond, James

      Roderick, Caerwyn

      Eadie, Alex

      Latham, Arthur (Paddington)

      Rodgers, George (Chorley)

      Edge, Geoff

      Lestor, Miss Joan (Eton & Slough)

      Rodgers, William (Stockton)

      English, Michael

      Lipton, Marcus

      Rooker, J. W.

      Ennals, David

      Litterick, Tom

      Rose, Paul B.

      Evans, Gwynfor (Carmarthen)

      Lomas, Kenneth

      Ross, Rt Hon W. (Kilmarnock)

      Sandelson, Neville

      Strauss, Rt Hon G. R.

      Welsh, Andrew

      Sedgemore, Brian

      Taylor, Mrs Ann (Bolton W)

      White, James (Pollok)

      Shaw, Arnold (Ilford South)

      Thomas, Dafydd (Merioneth)

      Whitlock, William

      Sheldon, Robert (Ashton-u-Lyne)

      Thomas, Ron (Bristol NW)

      Wigley, Dafydd

      Short, Rt Hon E. (Newcastle C)

      Thompson, George

      Willey, Rt Hon Frederick

      Short, Mrs Renée (Wolv NE)

      Tierney, Sydney

      Williams, Alan (Swansea W)

      Silkin, Rt Hon John (Deptford)

      Tinn, James

      Williams, Alan Lee (Hornch'ch)

      Sillars, James

      Tomlinson, John

      Wilson, Alexander (Hamilton)

      Silverman, Julius

      Torney, Tom

      Wilson, Gordon (Dundee E)

      Skinner, Dennis

      Varley, Rt Hon Eric G.

      Wise, Mrs. Audrey

      Small, William

      Wainwright, Edwin (Dearne V)

      Woof, Robert

      Snape, Peter

      Walden, Brian (B'ham, L'dyw'd)

      Wrigglesworth, Ian

      Spearing, Nigel

      Walker, Terry (Kingswood)

      Young, David (Bolton E)

      Spriggs, Leslie

      Watkins, David

      Stallard, A. W.

      Watkinson, John

      TELLERS FOR THE NOES:

      Stoddart, David

      Watt, Hamish

      Mr. Joseph Harper and

      Stott, Roger

      Weetch, Ken

      Mr. J. D. Dormand.

      Strang, Gavin

      Wellbeloved, James

      Question accordingly negatived.

    Clause 15

      TRANSFER OF PROPERTY, RIGHTS AND LIABILITIES OF CERTAIN BODIES TO AGENCY
      11.0 p.m.
      Mr. Millan: I beg to move Amendment No. 16, in page 15, line 18, after 'section', insert
      'other than land held in security of a loan'
      These provisions deal with the transfer of property to the Agency inadvertently. As the clause was drafted, it would transfer to the Agency property held by the Government as security for loans made under the Local Employment Acts. It was not intended that that should happen, and the amendment puts the situation right.
      Amendment agreed to.

    Clause 16

      TRANSFER OF PUBLICLY OWNED PROPERTY TO AGENCY
      Mr. Millan: I beg to move Amendment No. 18, page 16, line 5, after 'shall', insert 'as soon as practicable'.
      This amendment and Government Amendments Nos. 19 and 20 are in exactly the same terms and all three amendments go together. The present wording provides for statements to be laid before the House by the Secretary of State "as soon as practicable." It was said in Committee that there was no obligation on the Secretary of State to lay these documents quickly. The amendments put the matter beyond doubt.
      Amendment agreed to.
      Amendments made: No. 19, in page 16, line 14, after 'shall', insert 'as soon as practicable'.
      No. 20, in page 16, line 23, after 'shall', insert 'as soon as practicable'.—[Mr. Millan.]

    Clause 24
      INTERPRETATION
      Amendment made: No. 21, in Clause 24, page 20, line 17, leave out 'Parts III and IV of'.—[Mr. Millan.]
    Schedule 2

      FINANCIAL AND ADMINISTRATIVE PROVISIONS RELATING TO THE AGENCY
      Amendments made: No. 22, in Schedule 2, page 26, line 32 after 'Agency', insert '(a)'.
      No. 23, in page 26, line 34, after 'relates', insert
      'and
      (b) in respect of their administrative expenses'.—[Mr. Millan.]
      Mr. Millan: I beg to move Amendment No. 24, in page 26, line 37, at end insert
      'other than functions under section 5 of this Act'.
      This amendment is basically a drafting amendment relating to borrowing by the Agency. The same comments apply to Government Amendment No. 25.
      Amendment agreed to.
      Amendment made: No. 25, in page 26, line 48, after 'borrow', insert
      'from him under paragraph 3(1) above. '—[Mr. Millan.]
      Mr. Millan: I beg to move Amendment No. 26 in page 29, line 7, at end insert
      'being a form which shall conform to the best commercial standards'.
      Mr. Deputy Speaker: With this it will be convenient to take Amendment No. 27, in page 29, line 18, at end insert—
      "(4A) Where the Agency conducts activities of a commercial or industrial character, the accounts of the Agency in respect to these activities shall also be audited by auditors appointed by the Agency after consultation with the Secretary of State, and a person shall not be qualified to be so appointed unless he is a member of one or more of the following bodies:

      The Institute of Chartered Accountants of Scotland,

      The Institute of Chartered Accountants of England and Wales,

      The Association of Certified Accountants,

      The Institute of Chartered Accountants in Ireland,

      and any other body of accountants established in the United Kingdom and for the time being recognised for the purposes of section 161(1)(a) of the Companies Act 1948—section 155(1)(a) of the Companies Act (Northern Ireland) 1960; but a Scottish firm may be so appointed if each of the partners is qualified to be so appointed".
      Mr. Millan: The matter was raised in Committee by the hon. Member for North Angus and Mearns (Mr. Buchanan-Smith). He was concerned that the accounts of the Agency, which is to have commercial functions, should conform to the best commercial standards. In Committee I took the view that it was not necessary to insert this provision in the Bill but that we should ensure that the accounts were drawn up in accordance with the best standards. On reconsideration, in view of the importance attached by the hon. Gentleman to the matter, I think that it would be desirable that these words should appear in the Bill. That is what Amendment No. 26 does. I know that it will be acceptable to the hon. Gentleman.
      I shall not say anything about Amendment No. 27, which is the hon. Gentleman's amendment. I prefer to hear what he says, after which I shall answer him.
      Mr. Buchanan-Smith: I am grateful to the Minister for anticipating and meeting my wishes in this matter. Amendment No. 26 helps to meet the points made in Committee. I know that it is welcomed by the accountancy bodies in the United Kingdom.
      396
      Although I sought to include in Amendment No. 27 the points made in Committee, with modifications, to achieve the ends which the Minister now seeks to achieve, I realise that that amendment is no longer necessary. However, I should like the Minister to reassure me on one point. The question of proper auditing is partly anticipated in Amendment No. 7, which reads:
      "The functions of the Agency mentioned in subsection (2)(b) above may only be exercised through a company within the meaning of the Companies Act 1948 or through a partnership firm.".
      Therefore, the auditing must be carried out to the highest commercial standard.
      I have one reservation, which has already been raised by the accountancy bodies in correspondence with the Department. I refer to the definition of "partnership firm". I do not wish to press my amendment as the matter can be dealt with by the Department and the accountancy bodies. If I receive an assurance from the Minister on this matter I shall be happy to let the matter rest.
      Mr. Millan: That is a fair statement. The earlier amendment provided for the industrial activities to be dealt with through a separate company or partnership firm. This will automatically attract the audit provisions of the Companies Act, which the hon. Gentleman mentions in Amendment No. 27. However, Amendment No. 27 would attract other matters which it would not be appropriate to audit under the normal arrangements, other than those of the Comptroller and Auditor General. What the hon. Gentleman has in mind is covered.
      I was not aware that there was any difficulty about the partnership point, but I will examine it. If it is still true that partnerships are not under the same obligations as are companies in terms of the qualification of auditors, it is well recognised that partnerships are often audited in exactly the same way. Any partnership with which the Agency is involved will be audited by a person who is qualified to audit company accounts. As a matter of practice that would be done. As far as I am aware, the accountancy bodies are perfectly happy with the Bill.
      Amendment agreed to.

    Schedule 4

      MINOR AND CONSEQUENTIAL AMENDMENT OF ENACTMENTS
      Mr. Millan: I beg to move Amendment No. 28, in page 31, line 15, leave out
      'or compensation payable by virtue of Schedules 1 or 3'
      and insert
      payable by virtue of paragraph 10 of Schedule 1 or of regulations made under paragraph 3 of Schedule 3'.
      The amendment removes from the Agency the obligation to increase the pensions of members of the Agency and compensation payments which may be made to present members of the SIEA and SICRAS by reference to the Pensions Increase Act 1971. Those provisions for automatic increases under the terms of the Pensions Increase Act 1971 are perfectly relevant from the staff point of view and are so provided, but they may not in every case be relevant from the point of view of membership. It would be necessary to examine the member's individual circumstances, and in some cases it would not be appropriate to make these provisions apply automatically because the person concerned might otherwise be covered perfectly adequately.
      It will be within the power of the Agency to apply similar provisions—that can be done administratively—but there will be no obligation to provide for a comparatively small number of people automatic pension increases which will not necessarily be appropriate in all cases. The amendment does not prejudice the interests of the staff. They are fully covered and will remain covered even with the amendment.
      Amendment agreed to.
      Order for Third Reading read.—[Queen's Consent on behalf of the Crown, signified.]
      11.13 p.m.
      Mr. William Ross: I beg to move, That the Bill be now read the Third time.
      Since the Second Reading debate on 25th June, the Bill has been subjected to full consideration both in Committee and on Report, and it has emerged a better Bill. In particular, I am pleased that we have reinstated in Clause 2(2)(b)
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      the function which had been deleted elsewhere whereby the Agency is enabled to carry on industrial undertakings.
      Today, on Report, the House accepted an amendment which will require the Agency to exercise this function through companies within the meaning of the Companies Act or through a partnership firm. This is a valuable clarification of the Bill. It will, I am sure, commend itself particularly to the CBI in Scotland and pave the way for full and fruitful co-operation between the Agency and the private sector. That is important.
      It is absolutely essential for Scotland's future prosperity that the public and private sectors should work closely together, neither suspicious of the other's motives, but both dedicated to the development of the economy and the strengthening and expansion of existing firms, the stimulation of new ideas and the creation of the new job opportunities which Scotland so badly needs. One of the prime purposes of the Agency will be the provision, maintenance or safeguarding of employment. This policy will commend itself to existing firms and the people of Scotland generally.
      In preparing the Bill, we have consulted all sorts of interests and organisations whose work will be touched upon by the functions of the Agency. It is only fair to say that across the board there is a wide general welcome for the Agency and a recognition that a body with the remit and power we propose can play a crucial part in the revitalisation of the Scottish economy.
      The time for talking is now nearly over. We are at another stage. The Chairman has been appointed. Sit William Gray is uniquely well fitted for this task, with his wide knowledge of local government, his valuable experience as Chairman of the Scottish Special Housing Association and of a new town, and he is conversant with the problems of industry.
      The Secretary of the Organising Committee has been established. Premises have been acquired in Sauchiehall Street and, with admirable speed, have been adapted to house the nucleus of the Agency, with room for expansion. In other words, we are determined to press on as quickly and speedily as possible to get the Agency established.

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      I hope soon to announce the membership of the Organising Committee, but meantime advertisements have been published for the post of chief executive, which will be of vital importance. I understand that there has been a fairly good response, and I hope that we shall be in a position to consider a short list very soon. We are determined to get these things right. It is our intention to have the Agency operational as soon as possible after Royal Assent. I think I can say that it will be operational before Christmas.
      One of the first tasks of the Organising Committee will be to meet staff representatives of the Scottish Industrial Estates Association and of the Small Industries Council for the Rural Areas of Scotland to go into detailed arrangements about their absorption within the Agency. This is clearly important, and I see no fundamental problem, if only because they will be part of an expanding organisation. But, naturally, the staff will want to be reassured that their interests will be safeguarded.
      The Agency will begin its work in difficult times. Despite what may be said by anyone, Scotland cannot be insulated from the economic difficulties of the United Kingdom and the Western World. Although the oil developments have given the economy greater resilience, we face a serious problem of unemployment.
      I think that in the Agency we have a means of finding a longer-term solution for a comprehensive and co-ordinated attack on the deep-seated structural problems of the economy. I have heard it said today by hon. Members opposite that we should not look for miracles. It is tempting to look for ready answers and speedy action when establishing a new agency. However, I am confident that the Agency will make an effective impact, but among its tasks will be the solution of some of the most intractable problems of the economy, and these will not be solved overnight. Equally, the Agency must not spend too much time on further studies. The Agency will be drawn widely from people with experience of the various sectors which it will cover. I am sure that the House will join me in wishing the Agency every success in its challenging task. I am happy to commend the Bill to the House.
      11.20 p.m.
      Mr. Buchanan-Smith: Having listened to the Secretary of State, I can understand the sense of relief with which he has reached Third Reading. If we had not passed the Bill into law the right hon. Gentleman might have been left wondering what to do with the premises in Sauchiehall Street. That is obviously behind his sense of relief at having reached this stage tonight.
      The right hon. Gentleman said that we have had full consideration of the Bill. I would agree with that. However, this is an important Bill—I have never tried to deny that. For it to reach the House at such a time in the Session is not necessarily the best way of dealing with such legislation. This is a lesson that all of us should heed. Legislation of this sort should be introduced rather earlier in the Session. That is an aside rather than a main point.
      I join the right hon. Gentleman in wishing well of Sir William Gray, the Chairman-designate of the Scottish Development Agency, in the task ahead of him. Sir William is a man of realism and of broad administrative experience. As my hon. Friend the Member for Glasgow, Cathcart (Mr. Taylor) said earlier, he is coming to an area of industry that is, to some extent, new to him. It is important that he has the right calibre and quality of people around him. All of us recognise his abilities and achievements in Scotland, and my right hon. and hon. Friends and myself genuinely wish him well in the task that is before him.
      I believe that there are two matters on which the Agency will be judged. They will show in time whether the Government were right or wrong in establishing this body to do the task that has been set for it in Scotland. One matter that the right hon. Gentleman mentioned which is the 64,000-dollar question regarding the work of the Agency is the finance available to it. The right hon. Gentleman has warned the House not to expect miracles. I think that he was right to warn the House that the Agency will be successful only to the extent of the financial resources that it has at its disposal.
      As the right hon. Gentleman fairly and correctly indicated, we are not living at a time when the Government are flush

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      with funds and when there will be a lot of money to spend on the purposes for which the Agency has been established. In global terms the figures look very good, but people will judge the Agency by the money that the Government will be able to spend. In turn, the money that the Government will be able to spend will depend upon the success or otherwise of their financial policy for the United Kingdom as a whole. That is the first matter by which we shall judge the success of the Agency—namely, the ability of the Government to give it the funds necessary to fulfil the tasks that the Government have set it.
      The second matter by which we shall judge the Agency is the way in which it carries out its tasks, whether it is better or worse than the bodies now responsible. I refer specifically to the issues of derelict land and the improvement of the environment in Scotland, jobs that are now the charge of the local authorities in Scotland. If it can do its job no better than existing local authorities we shall be entitled to ask in future years whether the setting up of the Agency and the accompanying bureaucracy was justified. I hope that it will lead to an improvement and to quicker and more effective action. If it is merely set up as duplication to what is already being done by local authorities, the vision some people have of the work of the Agency will have been fulfilled. To justify its creation it must carry out its tasks more effectively than the local authorities.
      I come to the basic qualification and reservation that I hold, which the right hon. Gentleman has mentioned namely Clause 2(2)(b). Here is the one thing which motivated Conservative Members in their original opposition to the Agency. It is sad that the Government have reinstated these powers, enabling the Agency to intervene in profitable concerns in Scotland and take them over. It is here that there is a basic philosophical divide between us and the Government. We believe that the function of the Government is to facilitate the operation of industry, whereas under Clause 2(2)(b) the Government take a different attitude, underlining the difference between us.
      The Government do not want to facilitate the operation of industry—they want
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      to see the operation of industry carried out by the State. Here we must differ. I hope that in operating its functions the Agency will concentrate on those tasks which we all support, such as facilitating the operation of industry in Scotland and improving the environment. I am sure that I express the feelings of my right hon. and hon. Friends when I say that I hope that the Agency does not get bogged down with its functions under Clause 2(2)(b) and lose sight of its other functions. I believe that Clause 2(2)(b) is inserted for purely doctrinaire reasons. If the Agency wishes to have the support, sympathy and understanding of the people of Scotland it will do well to steer clear of that clause. With that one major reservation I wish the Agency well in its other tasks.
      11.27 p.m.
      Mr. Robert Hughes: I am glad that even with that reservation, the hon. Member for North Angus and Mearns (Mr. Buchanan-Smith) has cast aside in the main his objections to the Bill as a whole. It seems as though all parts of the House now support the Bill. No one will be surprised to find that I wish the Bill and the Agency well. I hope that the Agency will help new industry, co-operatives of all kinds, and new enterprises. If the Agency is to succeed it will need vision, imagination and, above all, courage. It may need to take controversial decisions. If it does not, it may not be facing up to its task. I trust that the Agency will have the nerve to sustain its point of view when it is under attack, as no doubt it will be.
      The terms of the Bill give the Agency a wide remit for the regeneration of the Scottish economy. No one who has looked at the Scottish economy recently, or at its history, can deny the need for such a wide remit. We have heard much of urban deprivation and derelict industry. Such things bear witness to the fact that the free enterprise system has failed the people of Scotland. If it had not, there would not be any necessity for the Agency.
      Mr. Nicholas Fairbairn: We are to invest £300 million in private enterprise under this Bill. Where is it coming from? From private enterprise, is it not?
      Mr. Hughes: It will not come solely from private enterprise. It will come from taxpayers, whether companies or individuals. At least the hon. and learned Member recognises that there is a considerable amount of money involved which will be invested to provide funds, even for the private enterprise system.
      Over the years we can see that the difficulty in Scotland, in common with the rest of the United Kingdom, has been that private enterprise companies have always put profits before people. That is why I welcome Clause 2(2)(b), which gives the Agency the opportunity not simply to rely on giving loans to companies to keep them going, but to taking part in new enterprises.
      The day has long passed when we regarded the role of the State as being one of propping up companies until such time as they might become profitable and then letting them go back to private industry, or when the only role of the Government was simply to act as a source of funds, through whatever industry Act it might be, in order to keep companies going or to give them particular advantages.
      I believe that the day is coming when the State must intervene even more in public enterprise. But I want to say one word of caution, because I believe that in some of the remarks made by the hon. Member for Clackmannan and East Stirlingshire (Mr. Reid) there was over-simplification and seeking for an easy answer. No one can say that the problems of the Scottish economy can be solved in the context of Scotland alone, totally dicorced from the United Kingdom economy.
      I believe that the Scottish Development Agency has a very important role to play and that it will succeed, given the backing of all quarters of this House. I wish it well, and I am sure that in all parts of Scotland the passing of this Bill tonight on its Third Reading will be widely welcomed. It will be seen as the fulfilling of an election pledge by the Labour Government, and I believe it is being done in the right spirit and with the right intention.
      11.32 p.m.
      Mr. Crawford: On the Second Reading there were three fairly clear positions. The first came from the party which
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      wanted none of it, the Conservative Party. The second was from the Government, which sought to use the SDA as something of a public relations exercise, with a lot of froth and not much gravity. The third was from my own party, which wished to fashion it into something bigger, less dogmatic, more democratic and more accountable.
      The Conservatives, I gather, have had a change of mind and are not going to oppose tonight, apparently. I am delighted to hear it. I am very glad of their change of heart. They seem to be changing their minds on several things these days.
      The hon. Member for North Angus and Mearns (Mr. Buchanan-Smith) said that he opposed Clause 2(2)(b) on Second Reading—
      Mr. Buchanan-Smith: Will the hon. Member do me the courtesy of reading my speech?
      Mr. Crawford: I believe that the hon. Gentleman said that he voted against the Bill because of Clause 2(2)(b). I said to the Secretary of State at the time that the SDA Bill was a pygmy Bill, and I have not changed my mind about that. We have not had an answer to how long the £300 million will last or how much extra this is on top of the existing income, how we are to fashion procedures for getting more money, or what is the proper answer to the question whether or not the SDA is free from the National Enterprise Board.
      I feel that the SDA, as it stands, is mutton dressed up as lamb, but some meat is better than none, and at least we have some morsels.
      My party is disappointed that the Government have not seen fit to accept the need for a much higher rolling budget of £300 million a year. Let no one say that Scotland cannot afford it. At the end of the decade the oil revenue will be £3,000 million a year, and £300 million is only one-tenth of that.
      Mr. Robert Hughes: I hope that the hon. Gentleman is not saying that, irrespective of the figures from North Sea oil, the government of the Scottish economy can be solely north of the border, with no regard whatsoever to United Kingdom economic policies.
      Mr. Crawford: I say that our problems are greater, with our higher unemployment and our urban deprivation. The hon. Member for Aberdeenshire, West (Mr. Fairgrieve) says that Scotland does not have higher unemployment than the United Kingdom. What I say is that we in Scotland have higher unemployment than the rest of the United Kingdom. The statistics show this. The figure for the United Kingdom is 4 to 5 per cent. and for Scotland it is between 6 and 7 per cent.
      The Scottish National Party is disappointed that the request for a higher budget has not been accepted by the Government. We are disappointed that the amendments seeking decentralisation and internationalisation of the activities of the Scottish Development Agency have not been accepted. Above all, we are disappointed by the wriggling of Labour and Conservative Members on the question of the answerability of the Scottish Development Agency to the Scottish Assembly. It is no use saying that the Assembly will have power over the economy and industry if the Scottish Development Agency is not directly answerable to it.
      It is worth repeating the anxiety felt by the Scottish people about an alliance of the Conservative and Labour Parties in Committee. The Conservative and Labour alliance in Committee was a monstrous and shocking alliance against Scotland.
      Mr. Fairgrieve: As a Conservative Whip on the Bill, I point out that on no occasion was there an alliance between the Conservative and Labour Parties. The hon. Gentleman knows that full well.
      Mr. Crawford: The hon. Member for Aberdeenshire, West knows that on three occasions Conservative and Labour Members voted together against Scottish National Party amendments.
      It is clear that the Scottish Development Agency, as it stands at present, will no more than begin to solve Scotland's problems. Certainly it will not begin to meet the exciting challenges which I believe face the Scottish economy. However, Scotland needs a Scottish Development Agency and it must have one. Although this Agency leaves much to be desired, it is at least a faltering step towards the right goal.
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      The Scottish National Party sees the Scottish Development Agency as a beginning and a new departure which, with self-government, can have some of the dogma written out and be fashioned more fully and nearly to the hearts, desires and economic needs of the Scottish people.
      Mr. Dempsey: I shall make a brief intervention. I have been very tolerant. I have listened for a long time to all sorts of claptrap from the Opposition. I am delighted that the Bill has, at last, reached Third Reading, and I hope that it will be approved.
      I am pleased that we are to concentrate on the principal purpose of the Bill; namely, the expansion of employment in Scotland. If we fragment our efforts in Bangladesh, Pakistan and other parts of the world, as we have been advised to do, it would be very foolish. We must not allow a domestic instrument of this nature to be abused in that way. Therefore, we should all welcome the Bill.
      It must be borne in mind that there is grudging admiration by the Opposition. The Agency when it becomes operative will be of inestimable value to the people of Scotland.
      I should like to direct the attention of the Agency to the approaches which I believe should be made towards ensuring the success of this proposed legislation. I believe that the Agency should approach the problem from the point of view of getting its priorities right. Its priorities should be in the areas where we have the highest unemployment. I happen to come from the constituency of Coatbridge and Airdrie, which is part of North Lanarkshire, which is at present among the top three of the unemployment league in Scotland. Indeed, in the last return we had nearly 500 boys and girls without jobs in that part of Lanarkshire, and that is only a corner of the new Strathclyde Region.
      It is my belief that certainly Sir William Gray should approach the problem by applying the very desirable principles of this legislation to the areas needing it most.
      I, too, heard the Front Bench speaker for the Conservative Party talk about need and the desirability of meeting needs where they are greatest. That is why my

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      hon. Friend the Member for Paisley (Mr. Robertson) congratulated the Conservative Front Bench speaker on his conversion to Marxism, on adopting the principle—
      "to each according to his needs".
      The most urgent need is in Coatbridge and Airdrie in North Lanarkshire as well as in two other areas on the mainland of Scotland. I should like the Agency to make a study of the steps it can take and the shots in the arm it can give to industrialists to expand their enterprises, to increase their manufacturing capacity, with a view not only to maintaining existing jobs but to providing additional jobs.
      One of the difficulties we experience when it comes to promulgating legislation is that when it comes to the construction of small factories there is an attempt to pass the responsibility on to local authorities, which reply that, because of the difficulty about borrowing powers, they cannot proceed to erect small factories. In my part of the country more than 100 people have expressed interest in small factories to meet the needs of spin-off jobs from the oil development in the north. Not one small factory has been built. I should like to direct the Agency's attention to this problem, which would be within its remit and which would make a substantial contribution to the lowering of unemployment in my area of Scotland.
      When we seek to attract industrial enterprises to come to my area the male employees will say "We would not mind coming to North Lanarkshire, but our wives and families will not come".
      Mr. Canavan: It is not a salubrious area.
      Mr. Dempsey: My hon. Friend knows: he comes from the area. We should like factories to be titivated, brought up to date, and re-modelled. Layouts should be improved. Attention should be paid to the provision of recreational and other amenities. This is one of the main inducements for industrialists to come to areas like North Lanarkshire and provide much needed jobs.
      I wish the Agency well. I believe that it can not only meet the challenge but will have the personnel, the capacity and the experience to meet the challenge.
      11.44 p.m.
      Mr. Canavan: The declared aim of the Bill is, first, to regenerate Scottish industry and to provide more jobs for Scottish workers. I suppose that the four parties would agree on the legitimacy of the aims. It is a pity that the Liberals cannot be here tonight. They are obviously away home to their beds.
      There appears to be a difference of opinion in the other parties. At every stage the Tories have, in accordance with their tradition, fought tooth and nail to preserve the rights of private enterprise. This is the private enterprise which has failed Scotland in the past. The Tories see this Bill as a threat to the rights of the private enterprise they are determined to protect. They made sure that the Bill would not go to the Scottish Grand Committee for a Second Reading and the Government had to re-introduce it in the Lords.
      Mr. Fairgrieve: Has the hon. Member never heard of the Scottish whisky, textile, shipbuilding and agriculture industries? Those, I believe, are private enterprises.
      Mr. Canavan: I have heard of those industries, and the Scottish shipbuilding industry, to take one of the hon. Gentleman's examples, has had gross inefficiency and mass unemployment under private enterprise. That is why the Government are determined to take it into public ownership.
      The Scottish National Party at least believes in some kind of agency, though, if we are to believe its industry spokesman, it does not believe in a substantial public enterprise role for the Agency. Hon. Members from the SNP have tried to introduce red herrings into this debate with arguments about the initial allocation of funds to the Agency.
      I admit that £200 million, rising to £300 million with the consent of the Treasury, is not enough to solve Scotland's industrial and employment problems, but it is only an initial allocation and there is no reason why this House or possibly even at some future date a Scottish Assembly should not allocate more. Of course, it would not matter if the Government were giving the Agency £2,000 million—the SNP would still conduct the argument like auctioneers by

      409
      calling for £5,000 million or £10,000 million. The Government are right not to be distracted into this kind of debate.
      The real argument is not about the initial allocation of funds or whether the Agency should have an office in Tobermory or Timbuctoo—we spent an hour earlier discussing the location of offices—but about the nature and powers of the Agency. Will it be just another agency to prop up the existing system or will it radically change the system? Will it be a Socialist Agency or a body which, to use the new word introduced tonight by the hon. Member for North Angus and Mearns (Mr. Buchanan-Smith), facilitates industry rather than intervening? When public money is being spent, there must be public control, and this means a strong public enterprise rôle for the Agency.
      The SNP has the naive concept that budding young Scottish businessmen, or even those from multinational companies, should be able to say to the Chairman, Sir William Gray, "Look at me, I am Douglas MacCrawford. I would like to start a haggis factory in Inverness. I have a degree from Cambridge University and am a very successful businessman".
      Sir William, in his munificence, should be duty bound to give him £2 million or £3 million. If he makes a loss and the business collapses within a few months, that is just too bad; that is public money down the drain. If he makes a profit, the Agency will, in time, sell off its holding to some private profiteer. That appears to be the daft concept envisaged by the hon. Member for Perth and East Perthshire (Mr. Crawford).
      Mr. Crawford: I should be delighted if the hon. Member for West Stirlingshire (Mr. Canavan) could join the haggis factory to beat the haggis out of the heather.
      Mr. Canavan: The hon. Member's sense of humour is quite good. It is a pity his political and economic judgment do not measure up to the same standard.
      The Agency must not be allowed to degenerate into just another bank for handing out public money to private enterprise. There must be some form of accountability, and the only way to get that is by extending public ownership.
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      My greatest regret is that new Clause 1 was accepted this afternoon. It will prohibit the Agency from entering into a real public enterprise role in the newspaper industry and other media in Scotland. With that reservation, I welcome the Bill and look forward to its helping to create a better society in Scotland, a better Scotland where the living standards and job security of Scottish workers can be vastly improved.
      11.53 p.m.
      Mr. Millan: I am glad that the Bill has had a general welcome. I would not have spoken now except that a number of points have been raised to which I think some hon. Members might want answers.
      As my hon. Friend the Member for Coatbridge and Airdrie (Mr. Dempsey) said, it will be necessary for the Agency to have priorities and to concentrate its attention in the early stages in particular in the areas of activity and in the geographic areas of Scotland where its efforts will do most good. I repeat that in terms of industrial dereliction and the need for industrial regeneration, the West of Scotland is obviously a priority area for the Agency.
      I say that with no disrespect to other areas of Scotland and without in any way detracting from the point made earlier this evening that the Agency will have an all-Scottish rôle. It has a wide remit because it will need it if an attack is to be made on all fronts on Scotland's industrial and environmental problems.
      If Clause 2(2)(b) has not been included the Agency would have been weakened and would have been in a sense simply picking up a number of disparate functions currently carried out by different agencies, collecting them together in a reasonably coherent form but lacking the element of enterprise and initiative of its own hand which provides an additional ingredient for tackling Scotland's problems.
      It was always our main intention that the Agency should be able to act in this way, not simply handing out munificence to private enterprise or concerned only with factory building and so on. We wanted an agency which would do things and involve itself in industry directly, and that is what Clause 2(2)(b) does.

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      I believe we have provided the right range of functions for the Agency. The canards about the Agency being a subsidiary of the NEB have been dealt with most effectively during the passage of the Bill. It is tragic that the hon. Member for Perth and East Perthshire (Mr. Crawford) should even at this late stage be talking in slogans which have been dealt with in Committee and on other occasions. The poverty of ideas about the Agency on the hon. Gentleman's bench has been for me one of the most depressing features not only of today's proceedings but of the whole proceedings on the Bill.
      The Conservative Party scores slightly higher marks, but I cannot say more than that, because at the end of the day the Opposition have been extremely reluctant converts to the idea of the Agency. I think that in their heart of hearts many Conservative Members would love to vote against the whole concept of the Agency, but they have not the political courage to do it, because they recognise that it has been widely welcomed by a range of Scottish opinion on both sides of industry.
      The Agency starts its life with a tremendous amount of good will in Scotland. I believe that with that good will and co-operation, and with the wide range of functions that the Agency has under the Bill, it can make a major contribution to Scotland's industrial regeneration. That is what we intend. We wish the Agency well in the work that it will now take up.
      Question put and agreed to.
      Bill accordingly read the Third time and passed, with amendments.

  CINEMATOGRAPH FILMS BILL
  Order for Second Reading read.
  11.56 p.m.
  The Under-Secretary of State for Trade (Mr. Eric Deakins): I beg to move, That the Bill be now read a Second time.
  I commend this Bill to the House. It is short, and it has the support of all sides of the industry. Its aim is to divert a very small part of the British Film Fund to the National Film Finance
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  Corporation, where it will be used for financial assistance at the pre-production stage of film production, including script writing.
  Before going into the details of the Bill itself, perhaps I should outline the circumstances which have led to these proposals being brought before the House at a time of such crowded parliamentary business. For years past the cinema and film production industry in this country has been declining. There are now just over 1,600 cinemas in Great Britain compared with nearly 2,000 10 years ago, and nearly 5,000 at their peak in the late 1930s. The number of admissions in 1974 was 138·5 million. Ten years ago the figure was 385 million, so there has been a drop of 246·5 millions, or nearly 61 per cent. This decline has been largely due to television. We must accept that people wish to sit at home and watch television. We cannot be reactionary and attempt to put the clock back to the 1950s.
  Nevertheless, while the huge attendances of the immediate post-war years are unlikely to return, there is still a large audience for good films in cinemas, and I am happy to say that the benefits from the very considerable investment in the twinning and tripling of cinemas are now being felt, for the number of admissions has gone up by nearly 4 million, from 134·2 million in 1973 to 138·5 million in 1974. If we can continue in this direction the proper place of the cinema as a means of mass family entertainment may well be preserved. Cinema takings in 1974, including VAT, totalled £69·3 million, and are up by about £11 million on the previous year. These increased takings, however, are due far more to inflation than to increased business, and credit is due to the many cinematograph exhibitors who throughout this economically difficult period have remained in business despite these difficulties, which cannot always be met simply by increasing seat prices.
  It is, however, at the production end that the most immediate concern lies. For many years past about 80 British feature films have been produced annually. At one period in the late 1960s about £46 million was invested in film production in this country in one year.

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  Nearly 90 per cent. of this money came from American sources, but this has now been withdrawn, and we must do our best to find alternative sources and to encourage the use of more British finance. Despite this withdrawal of American finance, 78 British films were made in 1974, but present indications are that the total number of feature films made here in 1975 will be about 65.
  Lack of investment is not the sole cause of the present serious situation. There is also a shortage of good projects. This is illustrated by the fact that the consortium—which was set up three years ago in conjunction with the NFFC to provide assistance to the industry—still has about £500,000 available, but has considerable difficulty in finding suitable projects.
  The Cinematograph Films Council looked at this alarming situation last year and in its Annual Report for 1973–74 made a number of useful and constructive proposals. The proposal which led to the Bill has the unanimous support of all members. It is also supported by the Film Production Association of Great Britain, the Writers' Guild of Great Britain, and the Federation of Film Unions—all of which played a part in devising the scheme.
  This proposal has been put forward because financiers are, not unnaturally, reluctant to risk their money on a project which has not been explained to them fully. It follows that, however attractive a project may appear to its sponsors, it must be effectively worked up before it can attract financial backing. The experienced and well-known film producer may well be able always to raise finance for his films whenever he has a good project to offer. This is not true, however, of the younger, less experienced and less-well-known producers who, if they are not permitted to develop their ideas and abilities because of economic difficulties, will be lost to the industry in years to come, so that there may eventually be no one to succeed today's experienced producers.
  It is hoped that this measure will go some way towards solving this problem and remedying the shortage of good projects. The scheme will enable someone who comes up with a good idea but who has not sufficient funds himself to develop
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  it to the point where he can attract investment capital for production to get additional finance to enable him to develop his idea. He would be able to prepare a complete script, and so reach the stage where he could convince potential backers that the project is worth pursuing. If a measure such as this is not taken, the industry may well continue to decline, and by the time we come to its rescue it might not be there at all.
  This is particularly important in view of the need to encourage British investment. I hope would-be British investors will have taken note that a number of films made with the help of British finance have recently been successful, and one such even spectacularly so.
  The money for assistance under the proposed scheme will come, as I said, from the British Film Fund. It will thus be the industry's own money, and the Bill will not lay a new burden on the taxpayer.
  The Bill is necessary because the existing Cinematograph Films Acts prescribe the uses to which levy money may be put, and these statutory uses do not include the kind of financial assistance which we have in mind.
  Although the Bill does not itself limit either the amount to be made available or the period during which the scheme will operate, it is my right hon. Friend's intention to follow the recommendation by the CFC in its 1974 Annual Report, and to make the sum of £200,000 available in each of the first two years of the scheme, after which it will be reviewed. That sum will be divided up so as to provide enough money for script writing and pre-production expenses for about 20 projects in each year. The intention is that assistance will normally take the form of loans, repayable whenever a project actually goes into production. No single project will receive more than £10,000, including the script fee.
  Mr. Terence Higgins: The hon. Gentleman said that assistance would normally take the form of loans. I understood that under the Bill it would always take the form of loans.
  Mr. Deakins: It would normally take the form of loans, but in certain circumstances—and we want to retain as much flexibility as possible for the NFFC and

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  the advisory committee which will be set up—other forms of assistance will perhaps be necessary. Basically the idea is that loans will be made. The sum which I have mentioned will be divided between script writing and pre-production expenses for about 20 projects a year.
  That brings me to the operation of the scheme itself, which will be governed by arrangements approved by the Secretary of State. An advisory committee comprised of persons appointed by the Secretary of State, and including representatives of film producers, writers, and persons employed in the film industry, will assist the NFFC in selecting suitable projects to receive financial assistance under the scheme. The committee will have regard, among other things, to the likely capacity of the applicant of bringing a project to fruition as well as the adequacy of the project itself.
  The full amount of an advance will be repayable to the fund, plus a premium, immediately a project goes into production. The premium is necessary, and justifiable, because the fact that the project is to go into production indicates that someone expects to make a profit, and it is reasonable that the fund which has helped launch the project should claim a modest share of that profit.
  I turn to the Bill itself. The first clause authorises the British Film Fund Agency to make payments to the National Film Finance Corporation for these purposes.
  The use of the moneys in the British Film Fund are confined, under the Cinematograph Films Acts 1957 to 1970, to payments to makers of British Films and to payments to three bodies which are mentioned in the Acts. These are the British Film Institute to provide assistance towards the cost of making films, the National Film School and the Children's Film Foundation Ltd.
  Clause 1 of the Bill will add the NFFC to the bodies which may receive payments. The Bill does not specify how much these payments will be, but follows the precedent whereby the Secretary of State is required to consult the Cinematograph Films Council in every case before approving a payment to these bodies. Hence, the industry will have ample opportunity to make recommendations as to the amount to be used.
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  The moneys will be administered as a separate fund, unconnected with the other funds held by the National Film Finance Corporation, and Clause 2 of the Bill directs that the NFFC shall apply the payments to the purposes I have described in accordance with arrangements to be approved by the Secretary of State. Those arrangements will set out the basis on which applicants for assistance under the scheme will be selected, and the conditions on which assistance will be given. I am sure the House will agree that a scheme of this kind must remain flexible, and it must be possible to make modifications and changes in the light of experience. The arrangements will also ensure that any project which is assisted will, if it goes into production, result in a British quota film eligible to receive levy payments.
  Subsection (2) of Clause 2 is necessary because, in the course of its normal lending business, the NFFC is restricted as to the period of a loan and as to the interest which must be charged. Financial assistance under this new scheme will take a different form, and these restrictions would be inappropriate. Subsection (3) of Clause 2 will confine the scheme to projects intended to result in the production of films primarily for exhibition in cinemas.
  Clause 3 includes the normal statement on citation. Subsection (2) follows the precedent of other Films Acts, which generally do not extend to Northern Ireland, but this subsection would not debar a citizen of Northern Ireland from eligibility to receive financial assistance under the scheme.
  Finally, as hon. Members will be aware, the Prime Minister has set up a working party to examine the long-term viability of the film industry, and it is probable that the working party's reply will lead to more legislation. The other recommendations made by the Cinematograph Films Council are still under consideration and, if adopted, may also need legislation.
  The assistance provided under this Bill is still an experiment, and the Bill itself may ultimately be consolidated into further legislation, though this will depend on the report of the working party. Nevertheless, this is a useful measure which will provide some modest help to a hard-pressed industry.

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  Finally, the House will have noted that the proposal is based on a unanimous recommendation of the Cinematograph Films Council, the statutory advisory body concerned and, as it thus has the support of all branches of the industry, I confidently hope that the House will accept it without Division.
  12.8 a.m.
  Mr. Michael Shersby: It is at the least unusual for the Government to introduce a Bill so late in the Session during the spill-over of business after the Summer Recess. That the Bill concerns the finances of the film industry is a fact that explains a good deal, for it is believed in some quarters that the Prime Minister has had a soft spot for the film industry ever since he became President of the Board of Trade.
  In welcoming the Bill tonight on behalf of the Opposition, as I do, I hope that the film industry will realise that the House as a whole is able to demonstrate that it recognises the serious problems that the industry faces from time to time and our desire to assist it by giving a greater degree of flexibility to the way in which British films are financed.
  I was glad to hear the Minister say that the Bill has the support of the British film organisations. Having spent 10 years in the film industry, I can claim a modest degree of expertise in this field, although I am no longer connected with the industry.
  The Bill provides for payments to be made by the British Films Fund Agency to the National Film Finance Corporation and for the making of loans or the giving of assistance at the pre-production stage, including loans to scriptwriters. The Bill will provide what is called "seed" finance, and script preparation will be the main beneficiary of the new arrangements.
  The other provisions of the Bill are the result of the recommendations in the 1973–74 Annual Report of the Cinematograph Films Council. Those recommendations were made because the future prospects of the film industry are bleak owing to the serious drop in finance available for film production. We know that to a large extent this is due to the competition suffered by the film industry from television. I was interested to read in the report of the Cinematograph Films
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  Council, based on figures relating to Belgium, that 3·25 per cent. of viewers regularly see films in the cinema, that 96·75 per cent. of viewers see films on television, and that 96·5 per cent. of all revenue accruing to the film industry comes from television. In face of this worrying situation, it was natural that by the summer of 1973 the number of feature films planned for 1974 and 1975 should have been much fewer than the number envisaged in past years.
  One of the main reasons for this, apart from competition from television, was the situation whereby traditional source of finance for British film production—namely, finance from the United States—had diminished over the years—not because British films are not the best in the world, as we know they are, but for other reasons connected with the American film industry. Therefore, it has been necessary for the British film industry to look elsewhere for finance if production is to be maintained at previous levels, if employment is to be maintained, and if Britain is to continue to enjoy substantial export earnings from the exhibition of British films overseas.
  It will interest hon. Members to realise that one of the most recent successful examples of British films earning large sums of money over the years was "Murder on the Orient Express", which is based on Agatha Christie's novel. It is the first British film ever to top the list of dollar earners and is now expected to gross about £19 million worldwide. That speaks for itself and is a tremendously creditable example of first-rate British film production.
  The Cinematograph Films Council, in an effort to see what can be done to improve the availability of finance, set up a working party which, in turn, made a number of recommendations, some of which appear in the Bill. The first recommendation related to a levy known as the "Eady levy", which should yield £2½ million to £3 million a year. I should like to know whether that prospect is likely to be fulfilled. The second recommendation was that each year £55,000 should be set aside from the fund to finance the writing of scripts—a basic necessity for good film production. The third was that £145,000 should be set aside each year from the fund to finance pre-production projects. This gives a

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  total of £200,000 for pre-production finance and scripts. It is not much money, but it is important to the industry at this time.
  Clause 1 adds the National Film Finance Corporation as a recipient of the British Film Fund, which in turn depends for its income on the levy, or the "Eady" money, as it is generally known. The Bill directs the National Film Finance Corporation to apply that money in accordance with the arrangements to be approved by the Secretary of State. I was alarmed when I saw that this was included in the Bill, as in the past year or so we have become accustomed to this formula, which is not tight enough, as it frees loans made out of that money from the restrictions which apply to loans made in the course of normal business.
  I am glad that the advice which the Secretary of State will receive before making his decisions will come from the advisory committee which is to be set up for the purpose. The film industry will give excellent advice to the Secretary of State, who I am sure will implement it. I should like to know whether the advice to be received by the Secretary of State from the advisory committee will affect the arrangements whereby the national film finance consortium, consisting of the corporation and 10 groups in the private sector, constitutes the only channel through which the corporation will be permitted to make loans.
  During the past 20 years the National Film Finance Corporation backed 721 British feature films, which is approximately half the total number of films made in that period. That is a creditable record. It deserves our praise. That is why the Opposition welcome the Bill. We hope that the additional £200,000 to be provided from the levy will do much to encourage successful new productions, which we are glad to hear will be British quota films.
  We hope to see better employment prospects for those engaged in the British film industry and a corresponding rise in export earnings. We wish the Bill well.
  12.18 a.m.
  Mrs. Gwyneth Dunwoody: I welcome the Bill, although it is a small, uncertain step in the dark. The amounts we are discussing, when compared with
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  the problems of the British film industry, are infinitesimal. Without the pre-production work and the investment going into the early stages of film production, no producer has any hope of attracting finance from outside sources. Only two or three of our senior British producers are capable of attracting that finance owing to their reputations and the films which they made in the past.
  This evening we heard useful tributes paid to the work of Nat Cohen. Men of the calibre of Nat Cohen and Sir John Woolf have proved how British films can survive in an international market. However, we are in a highly dangerous situation. There is hardly any point in producing a British film if there is nowhere to show it in the home market. The film industry is one of the few British industries which have the equipment and the ability to think in terms of 1980. It has improved not only the handling of its material but the equipment it uses to produce films. It has cut down the ratio of men to production. It is using the management techniques it developed in the 1930s and now suffers from the decisions taken then.
  For example, the Under-Secretary of State referred to the drop in the number of cinemas. I must declare an interest in that I am an adviser to the Association of Independent Cinema Owners, which is deeply concerned at the way cinemas are going out of business at an ever-increasing rate. Anyone who is interested in the production end of the industry must also be concerned. Young people in towns want cinemas, not necessarily twinned and tripled, but small, comfortable cinemas, and they want the opportunity to see good films in those cinemas.
  The producers who will apply for the pre-production money in the fund will produce films which are capable of standing up on the international market. There is never any discussion in Britain of the fact that rising costs have pushed up the cost of producing a film into the realm where it must recover its negative costs from the international market if it is even to begin to be a viable proposition. That will put a tremendous strain on the fund. We are talking about only 20 projects a year. One matter which I should like to clear up concerns the conditions under which the projects will

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  be chosen. I am all for an advisory board chosen from the industry. In the past, too many projects have used Government money without taking advice from the people who actually do the job. Will my hon. Friend give an undertaking that the people who provide the advice will not in any way be able to benefit financially from the scheme while they are advising the National Film Finance Corporation? Even a suggestion that the scheme might turn into an "old boy" network, with people sitting in on the projects and deciding which of their friends should have the money, would be damaging both to Parliament and to the British film industry.
  I enter a caveat about the National Film Finance Corporation, and I am sorry to have to say this after working for many years with the Corporation. I welcome the setting up of the Prime Minister's working party. I hope that it will examine distribution, the relationship between television and the film world, the scheme in France which gives practical assistance to cinema owners in modernising cinemas and, more than anything else, the organisation of the Corporation. In its time the Corporation has been a tremendously useful organisation, but it should be reorganised.
  The Conservative Government—I am not making a political point—for reasons of their own decided that the Corporation should not have all the money owed to it under the Films Act and should not be allowed to continue to operate. A consortium was set up and great hopes were raised. Everyone in the film industry believed that producers would have access to funds to enable them to make new and better films. What has happened? The Corporation continues to exist. It has helped a certain number of projects, but the total number of British films has fallen. The consortium still has money in the kitty, while there is a 60 per cent. unemployment rate in the film industry.
  If the Corporation is to handle this fund and is to be responsible for the rejuvenation of the film industry, will it proceed on the slightly neutered giant basis which it has adopted up to now, or will it show a little courage and imagination, try to do what it did before 1970, give support to imaginative projects and produce films which may have a risk element but are capable of attracting
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  enormous audiences? Or is it going to do what it has done since 1970, and drop gently behind the other commercial companies, only picking up projects where money has already been committed by people from other sources, and never giving the young British producer the chance which he so desperately needs and never even picking up the people who have made their first films through the British Film Institute funds? Or is it now going to show that it has the imagination, ability and courage to do what is essential in backing new and better British films?
  I hope that this is the first piece of legislation about the cinema industry. It is astonishing that, whilst Italy protects her film industry by restricting the number of feature films shown on television during the week and not allowing the showing of feature films at the weekend, while Germany has made specific funds available through her Films Act for films made for television, and while France makes use of the prize system to ensure that French films are used as an arm of the propaganda machine and shown all over the world to show French goods or French starlets—to use the market term—we do nothing to use our film industry either to help project British products or even to produce constant employment for the existing technicians at home.
  It does not matter which film maker one meets, whether American, French or German, he will say that the standard of intelligence and ability of the British film maker is higher than that of any other nation. Why in Malta do I see British film crews being employed on American projects? Why do Anglo-German projects—few enough as they are—employ entirely British crews? It is because this country still has a fund not just of writers, actors and producers but of technicians who are of a standard one does not find readily everywhere and who are yet facing considerable problems every day while they seek work, even if it is only for a few weeks.
  The television industry in this country has very strongly resisted any suggestion that it should pay any contribution towards the film industry. The very film fund we are discussing contributes to a film school which in turn produces a number of highly skilled technicians who do not go into the film industry but

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  into television. The television industry, with its overseas sales, is gaining more and more money from those markets whilst using the very techniques, the very abilities which have been developed by the film industry in Britain.
  It may be sad enough that we have already left it so late with the television industry that it has got into considerable financial difficulties and may almost have a small, though not, I think a very real, excuse for saying that it does not wish to contribute anything in any large measure to saving the British film industry. But I do not make the plea on cultural grounds for this support. I say that the television industry in Britain actually bleeds the film industry constantly.
  Mr. Robert Cooke: While I agree with the hon. Lady in wanting to save our film industry. I remind her that the film industry itself recognises that the Government are bleeding the television industry white by taking such an enormous levy.
  Mrs. Dunwoody: That is nonsense. The television industry is not subject to a levy unless it is in a considerable profitable situation, so what the hon. Gentleman says is not on. I am surprised he even bothered to say it at this time of night.
  Further, we are not taking the necessary steps in distribution. There is not only the duopoly situation. We should be doing something about booking patents. My hon. Friend must know that our patent procedures still do not work.
  After all its continuing problems, the film industry still finds itself in a situation in which no one is prepared to consider the effect of the consolidation of the American distribution houses, which has reached the stage where we shall soon have only three bookers for the six or seven major companies. The British are already consolidated into two booking agencies, with booking patents, which means that the independent exhibitor does not get a fair showing of the good No. 1 pictures. I hope that all those matters will be considered.
  Production is the beginning of the line, but distribution and exhibition are the matters that make the industry viable. I am disappointed that we should be dis-
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  cussing the Bill, inadequate though it may turn out to be, before such an empty House. It is one of the disappointments of my life that when the House decides to talk about art in its finest form we get a full turn-out by both major parties, but when we are talking about the cinema, which used to be called mass entertainment, although I am afraid we can no longer use that term, the attitude of the House is that it is one of the industries which can be left to go to the dogs, without any consideration being given for the cultural aspects, the artistic aspects or even the export earnings, which are considerable when we are turning out the normal number of films per year.
  I enjoyed my work in the film industry over the four years that I was out of the House. I am grateful to it for the friendship and kindness it has shown me. I am delighted that even in the European Parliament I am able to continue in some small way with my involvement in the interests of the film makers as a whole.
  We must decide in simple terms exactly what we are endeavouring to do. If we intend to leave the industry in the hands of those who have presided over its decline, be they exhibitors, distributors, producers, members of the National Film Finance Corporation or members of the consortium, we are doing a disservice to the young film maker, to the actor, to the up-and-coming man in the industry who must be our future.
  I do not intend to stand aside and see that happen. I am happy that my hon. Friend has made it clear that he gives his support to a much wider range of legislation. I hope that he will also make plain to his colleagues in the Government that the time has come for urgent action. We are not talking about 20 projects a year; we are talking about the survival of a means of cultural expression which is virtually disappearing from this country. If my hon. Friend wants an undiluted diet of American pap turned out through our cinemas and television screens, occasionally lightened with the odd sex film from Copenhagen and Germany, I must tell him that he is very much alone. That is not the future that I shall accept for the film industry. We want some urgent action now.
  12.34 a.m.
  Mr. Fred Silvester: Unlike the hon. Member for

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  Crewe (Mrs. Dunwoody), I do not have any direct interest in the film industry. However, I have been watching it for some years as an interested outsider.
  The debates that have taken place in the House have the curious effect of suggesting that we have been in this situation before. Articles in the Press are always telling us the same story.
  Mr. Terence Higgins: It is a flashback.
  Mr. Silvester: Indeed. It is a cyclical situation in which we stagger from crisis to crisis. Whenever there is a crisis, the House brings forward a piece of legislation which it hopes may in some way tinker with the problem. Tonight we are tinkering again. It seems that there is an element of wishful thinking in the way in which the politician deals with the cinema industry.
  We are giving new powers to the National Film Finance Corporation. It has been going for 25 years. At no stage has it been able to contribute more than 10 per cent. of the film production of this country, frequently—and certainly at present—much less. We are talking about a decline now, as we have at some stages in the past, of an order which makes anything the NFFC can do appear to be peanuts.
  We are in a situation in which all the agencies available to us through Acts of Parliament are small beer compared with the major movements going on inside the film industry. We are talking about the Americans, and I was sorry to hear the hon. Member for Crewe speak of "American pap." As far as I can understand it, the British film industry is at its most prosperous when there is a conbination of American money and English skill. The times of greatest health in the industry were when we had the right skills and talent to capture the American market. We do it from time to time, but we do not do it all the time or anything like enough at present.
  The £200,000 which we are currently discussing is for 20 projects. We hope that young and enterprising producers will come along with their ideas for films which they can work up in the early stages. That is fine. I remember conversations in the industry going back,
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  certainly to the late 1960s, in which people were then saying how difficult it was for young men to get started and how they would find it impossible to raise finance. That was not true. Over the years, if a person has had the right skill and the right outlook, he has been able to find the finance. So I raise this subject of wishful thinking. It is doubtful whether this £200,000 will necessarily have any effect.
  The Minister speaks of an advisory committee. He has not said who is to be on it. I am sure that he will tell us when he replies. That £200,000, and the effect it has, will depend entirely upon the skill of these six people who will be on the committee. They will have to get it going. They will have to find not only people who show skill in the art of film making—after all, some of those are now supported by the British Film Institute—but those who have a nose for commercial success. That is what we are talking about. It is commercial success which keeps people employed. The state of the cinema as an art form is something to which we shall have to give a lot of attention. Without basic commercial success, we have not a hope. That is a big burden to place upon the advisory committee.
  I agree with much of what the hon. Member for Crewe has said. The NFFC has been losing money—if it is averaged out over a period—at the rate of £400,000 a year. It has been less in recent years because it has been doing less. That means that there has been a subsidy of about £400,000 a year. It is doubtful whether the NFFC has the vigour it once had. There has been a certain hardening of the arteries. Although it will be found that it made a profit on "Stardust", as I understand it, in that case it was a film which had already got adequate finance and the NFFC almost begged its way in so that its funds would have a profit. I do not believe that it is the function of a Government-sponsored agency to take over the rôle—
  Mrs. Dunwoody: I completely agree with the hon. Gentleman. He will remember that it was his Government that put the NFFC in this position in the first place because it was they who said that the NFFC would have to work

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  through the basis of the consortium to be able to continue.
  Mr. Silvester: I do not accept that. I do not want to get into a long argument about that. The basis of the consortium was an attempt to bring into the NFFC a source of private money in the hope that it would stimulate greater financial involvement from other private sources. It is rather sad that it does not seem to have done so, but it does not necessarily follow that the NFFC's method of working has been handicapped by that decision. The NFFC has always sought, not always successfully, to back films which would make a profit. That was true long before the consortium was established.
  I welcome most strongly the setting up of the working party. I do not think it is generally recognised that the amount of money going into films is quite considerable. Broken down, the 1973 figures show that the NFFC's loss was running at the rate of £400,000 a year. The grant to the National Film Institute was £900,000; the Film Production Board accounted for £99,000; the National Film Archives, £70,000; the Children's Film Foundation, £310,000; and the National Film School, £367,000. That is a total of £2¼ million going in one form or another to some part of the film industry, and it has arisen in a higgledy-piggledy fashion.
  I remember the discussion on the National Film School, and the question was then very seriously raised by the Film Production Association in relation to the Eady levy. What we are doing, albeit with the full support of the corporation, is making an ad hoc decision. This leaves it with quite a lot of money. There will still be over £4 million in the kitty, but again it is an ad hoc decision.
  There was some very interesting correspondence published in The Times a year ago when virtually everybody in the industry was involved in discussing the suggestions for the Eady levy. Even then the Film Production Association, although prepared in certain circumstances to give a nodding agreement in regard to the Eady levy, raised some very severe questions about whether it was wise to do so. It emerged from that correspondence and from the con-
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  versations in the industry that nobody was quite sure whether the levy was effective or whether it helped British film production as, say, the Boultings would claim.
  There are these crunch questions arising and I hope that the working party will look at them and try to get some evidence on them. What is to be done with the £4 million lying around is rather fundamental to the whole of British production finance.
  The money made available for films is always compared with that for television. I understand that at the moment there is a buyer's market for films to be shown on television, and the rates paid for films have declined. It is a simple example of the operation of the market. A lot of old films have been released for showing on television.
  I find it rather sad—the hon. Lady echoed it—that the television and cinema industries are always seen as being in conflict with one another. I do not think that makes any sense. The hon. Lady may have seen our film crews at work in Malta. If people are trained for films and find jobs in television, they are nevertheless using their skills in a way for which they were trained. They are being provided with jobs and opportunities. There are jobs for actors, producers and technicians. It is time we started looking at the two industries together and tried to find ways in which they could cooperate with one another to their mutual benefit.
  The figures that my hon. Friend the Member for Uxbridge (Mr. Shersby) quoted from Belgium were straggled. It is quite clear that there is some imbalance there, but I do not believe that it will be cured by animosity between the two media. I believe that this problem should be one of the working party's major considerations. Of all the small things that we can do with the money available, I believe that the priming of the pump in this way is one of the most valuable. I wish the scheme success.
  12.46 a.m.
  Mr. Tony Durant: I welcome the Bill and especially the contribution by the hon. Member for Crewe (Mrs. Dunwoody), with a great deal of which I entirely agree. The British film industry has gone awry in many ways

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  since the war and much of what the hon. Lady said emphasised that. However, I challenge the hon. Lady's view that the origin of the industry was entertainment, because I believe that historically it was for scientific research and documentaries. In any event, I shall not labour that theme.
  I turn to the comments of my hon. Friend the Member for Manchester, Withington (Mr. Silvester) about the conflict between television and cinema. We should try to find a way of getting these two sectors together. The fault lies principally in the court of television, because when it began, it was looked upon as a new creative art. In fact, it was only a new way of projecting.
  From my limited experience of the industry I believe that the only fundamental production difference between the two industries is that one has to arrest people's attention at the beginning of a programme instead of after the first five minutes when they have sat down. However, there was a phase when it was thought that the two industries were different. The reality is that television is dependent to a great degree on the film industry even to the extent of keeping a station going. The amount of live material broadcast on television decreases week by week. Pre-recording and the use of film techniques are increasing.
  I take the point that the two industries should get together. However, television should stand its corner. It has got away with it for far too long. It has used the talent, expertise and background of the film industry and made a lot of money.
  I am especially interested in the Children's Film Foundation, the British Film Industry Production Board and the National Film School. I want to be assured that this proposal will not in any way penalise them as there is now a quarterly arrangement instead of a four-monthly arrangement.
  The Children's Film Foundation has been established for a long time. It has provided a great service in the Saturday viewing for school children and made some extremely valuable children's films. The British Film Industry Production Board has provided new and exciting talent. We have tremendous talent in this country. We had a long drawn out battle to establish the National Film
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  School. There was much argument and difference of opinion. I should hate to see any damage.
  Hon. Members and the country as a whole must recognise that Britain has tremendous talent, which is one of our greatest assets. Indeed, it is one of our servicing skills, and goes alongside mundane things like banking, insurance, public relations and so on. We have talent for putting things over, for directing and for production. For too long we have neglected an industry which is important to Britain and which has provided a great part of our culture and our heritage.
  I hope that we shall not be content with this Bill, but that we shall push the Government hard, so that when we receive the report from the committee we shall get some extra help and impetus for what I believe to be an important industry.
  12.50 p.m.
  Mr. Jonathan Aitken: This is one of those rare but happy occasions in the House when such is the degree of harmony that we are all agreed on congratulating the Under-Secretary on bringing forward the Bill and we are agreed on its general purposes. In common with other hon. Members, naturally I welcome the Bill. I agree very much with most of the points that have been made, particularly that by my hon. Friend the Member for Reading, North (Mr. Durant) that television must stand its corner and contribute far more handsomely than it does now to such things as the National Film School.
  The Under-Secretary rightly pinpointed the real cause of the present crisis in the film industry, namely, the withdrawal of American finance. The hon. Gentleman was right to do so, because for the last 10 years or more, 90 per cent. of the finance for British films has been coming from American sources. It is a valid point, and I hope not too contentious, to point out to the Under-Secretary that if only there had been a little more co-ordination between some of the Government Departments and his right hon. and hon. Friends, at least part of the crisis relating to American-source money for British films might have been avoided.
  Just over a year ago every Member of the House received a letter from Mr.

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  Alan Sapper, the General Secretary of ACCT. This source, which could hardly be described as a high Tory one, pointed out that the feature film industry in Britain would face extinction unless something was done about the 1974 Budget provisions, which caused United States citizens resident in Britain to pay up to 83 per cent. tax rates on three-quarters of their United Kingdom earnings. This affected an absolutely tiny number of people. It was a foreign jealousy tax. It was very regrettable that Mr. Sapper's wise words of advice were not heeded.
  The 1974 Budget provisions had the effect of sending an infinitesimally small number of talented and creative American producers, directors and others working in the film industry back to their own country, where they were faced with much more modest rates of tax. America has a total tax rate of only 50 per cent. I suggest that the Under-Secretary makes this point when he has discussions with his right hon. and hon. Friends about the future of the film industry in Budgets to come.
  The Under-Secretary spoke about a lack of good projects. This was a slight case of putting the horse firmly behind the cart. The lack of good projects is due to the fact that there is a complete lack of confidence in the industry, not to the fact that there is a lack of creative inventiveness latent in the film industry. The financial crisis is caused by the factors I have mentioned and by the fame drain of many top creative artists going to live overseas, and this is stopping many projects from coming forward.
  We should seriously start to consider whether Britain should not follow the Irish example of creating a special tax category for creative artists, directors and writers. The Labour Party hates anything which might tend to create a new élite. Those who care deeply about this subject regard the Irish example as worthy of examination, because the Irish have benefited considerably from the arrangement.
  We are talking fundamentally about a search for new financing methods. The Government would do well to consider Middle East money as a new source of finance. I know the Under-Secretary and his colleagues are to have talks with Saudi
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  Ministers in the next few days. I hope they will try to get Arab money for the British film industry.
  This is not a high-flown idea. There is one feature production—"Cinderella"—being made with the help of Arab money now. I declare an interest as director of a company that is trying, so far not too successfully, to raise Arab money for the British film industry. We have distinguished Arabs on the board and we believe that what we are trying to do will be a growing trend, but these trends have to be started mainly by inter-government discussions and agreements.
  It is disappointing that we are having this debate in such an empty House and with not enough of a clarion call to Parliament to take an interest in this vital industry. If it goes down, we shall say goodbye to an industry of high exports and creative talent. I would regret that and I welcome the possible sign of hope that the working party, if it really gets working, may be able to instil confidence into this industry.
  12.56 a.m.
  Mr. Terence Higgins: The lateness in the Session for the introduction of this Bill is matched only by the early hour at which we are debating it. It reflects the shambles into which the Government's programme has fallen. This is a most important industry and it is unfortunate that we should be debating the Bill at such an early hour.
  My hon. Friends have already dealt with a number of issues raised by the Bill and we listened with great interest to the comments of the hon. Lady the Member for Crewe (Mrs. Dunwoody). We have had a very knowledgeable debate and at this late hour I shall concentrate on some more technical aspects of the Bill. The general points have been made very well by my hon. Friends.
  This is not a major measure and does not involve large sums of money, but we wish it well and hope it will do something to help the preparatory side of film production. There is no doubt that the 1974 Finance Act, which we debated in great detail, has had an adverse effect, with the taxation changes deterring a number of people from continuing to work in this country. It also had an adverse effect on British people working abroad,

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  and in an industry like films, where people are very mobile, this has been most regrettable.
  The Bill does not involve extra money from taxation. The money will come from the Eady levy and I suppose Sir Wilfred Eady is the only Permanent Secretary at the Treasury to have had anything named after him. Such allegedly faceless men do not often get such interesting memorials.
  We are dealing essentially with widening the scope of distribution of money in order to cover pre-production finance. That being so there are one or two points I should like to raise.
  The point that the Minister raised about Northern Ireland also crossed my mind when I read the Bill. It would seem a curious situation for the levy to be raised only on this side of the Irish Channel, but for it to be distributed on both sides. Perhaps he will clarify that. It seems to be an unusual arrangement.
  I am concerned about certain other aspects. Clause 2 refers to the arrangements approved by the Secretary of State, but to what extent is the House, which has a degree of expertise in these matters, to be made aware of the arrangements which are to be approved by the Secretary of State? Are they to be laid before the House in the form of a statutory instrument, or in some other way? No doubt they will be detailed. We appreciate the need for flexibility, but it is important that information should be provided for the House in some form, and the negative resolution procedure might be appropriate in that respect.
  Another point which causes me concern is that there are to be consultations with the Cinematograph Films Council about payments into the fund. But there is also to be an advisory committee which will be concerned with payments out of the fund. Presumably, it will advise the fund on those to whom the money is to be given. There is reference to consultation with the Cinematograph Films Council, for example, in Clause 1(2), but there appears to be no reference to the advisory committee. The Bill is tightly drafted and perhaps this point is comprehended by the reference to earlier legislation.
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  The advisory committee, I understand, is to be a new committee, and if that is so the point raised by the hon. Member for Crewe is important. The House should consider whether the membership of the committee might be influenced in the way in which it allocates money. It might even be difficult to find people to serve on the committee who are sufficiently expert but who do not have some interest in the way in which the money is spent.
  If I am right and the committee is not mentioned in the Bill, we need to know who the members are to be and by whom they are to be appointed. Ought not the Secretary of State seek the approval of the House on the suitability of the appointments?
  I am still not clear whether all the finance is to be provided in the form of grants or loans. I understood that the original intention was to make loans, but I understand also that there could be other payments. I am not clear on what criteria it is to be decided whether a matter should be dealt with by a loan or some other payment. I do not sea how the advisory committee or the fund will decide which form the payment should take. Am I right in thinking, however, that the loans are to be interest-free, and if so, why?
  The Under-Secretary said that the loans would be repaid, but with a premium. That seems a curious expression. One would normally repay a loan with interest, but a premium seems to suggest that the main charge for the use of the loan is in some way to be related to the success of the project, if it is eventually carried through. If that is what the hon. Gentleman has in mind, I am not sure that it is desirable. I believe that if it is a loan, it should be at interest. The person carrying the venture forward further will then know exactly how much he has to pay. I do not see the point of having a premium on the loans as the Minister outlined.
  I shall be grateful if the hon. Gentleman will clarify those points. I have concentrated on the details because we shall have to consider them at Committee stage later this week. The overall welcome given to the Bill is appropriate, and we do not wish in any way to oppose its passage.
  1.5. a.m.
  Mr. Deakins: With permission, I should like to reply to the debate.
  A number of detailed points have been raised, and I shall be happy to answer them all tonight if that will ensure that we have a shorter Committee stage on Thursday evening, or perhaps early on Friday morning. However, if the House feels that it would be better to concentrate on the broad principles, I shall be happy to do that, leaving other questions for answer in Committee.
  Mr. Higgins: If we do not know the answers, we shall not know whether to table amendments. The Minister may well be able to anticipate amendments and avoid their being tabled.
  Mr. Deakins: In that case I shall try to answer all the points raised in the debate.
  The hon. Member for Uxbridge (Mr. Shersby) gave the Bill a welcome, for which we are most grateful. He was concerned, as was his hon. Friend the Member for Reading, North (Mr. Durant) and my hon. Friend the Member for Crewe (Mrs. Dunwoody) with the question of the television levy and the relationship between the cinema and television industries. The matter is being considered by the working party set up by my right hon. Friend the Prime Minister. I can make no comment about what the outcome will be.
  We know that the Cinematograph Films Council recommended that there should be a levy on films shown on television, a recommendation which was not entirely welcome to people working in television. Nevertheless, I think that the House will agree that the two industries have been separate for a long time, and that anything which can help bring them together in their mutual interests will be good. There are individuals with great experience of television represented on the working party.
  Mr. Robert Cooke: The Minister will appreciate that if there is a levy on films shown on television it will simply put up the programme companies' programme costs, and the Government will get less in television levy out of the programme companies. Therefore, the Government will have to pay out of taxation anyway.
  Mr. Deakins: I am not advocating a television levy. That was recommended by the CFC, representing the film industry, not the television industry. The matter will have to be worked out by the working party.
  The hon. Member for Uxbridge also asked about the advice from the advisory committee. That advice will be given not to the Secretary of State, but to the National Film Finance Corporation, and it will relate to the making of loans under the Bill. The advice will not affect the arrangements that the NFFC has with the consortium. There will be no relationship whatsoever.
  In an interesting speech, based on her great experience of the industry, both from speaking as a Minister in charge of the industry and with experience of the commercial side of the industry, my hon. Friend made a number of points which I and the House heard with interest. She stressed the importance of the international market for British films. I believe that it is now genuinely recognised that while there may still be some specifically British films, such as the "Carry On" series, which I understand is making an impact overseas as well as in this country, our film makers are increasingly directing their attention to the needs not only of the home market, but of the international market. As my hon. Friend rightly said, it is essential to venture into that market, for otherwise one cannot cover one's costs and make a profit.
  My hon. Friend asked whether the members of the advisory committee would be put in a position to benefit from the Bill. I can give her a complete and categorical assurance that they will not be able to vote on or take part in the consideration of any application for a loan in which the person concerned or any company with which he is associated has any interest. In any event, the final decison will rest with the NFFC.
  Mrs. Dunwoody: I am not sure that I understand the way in which my hon. Friend is using the term "NFFC ". Will the advisory committee advise the officers of the NFFC or the board of the NFFC? If the work of the consortium and the NFFC and the pre-production and script writing scheme are to be totally separate,

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  the industry would like to know who make up the NFFC in that sense.
  Mr. Deakins: It will be the members of the NFFC. The advisory committee will have some day-to-day contact with the managing director. Much of the work will be fairly detailed and mundane, but I am sure that the board of the NFFC would wish to be consulted on any issue of policy, for example. In any event, the fund will be kept separate from the consortium operations because we are to set up a separate account for the NFFC funds.
  Mr. Higgins: The hon. Lady has raised an interesting point which had crossed my mind. Are we to understand that the ultimate decision will rest with the board of the NFFC? My impression was that it would simply administer the money. If it is to take decisions as against simply agreeing with the advisory committee's decision, that is an interesting point which we should consider further.
  Mr. Deakins: The people on the NFFC are very experienced but are not, by virtue of the terms of reference under which they are appointed, experienced in the making of films. The advisory committee must be an advisory committee to the board as a whole, but one would expect and assume that the board would depute the management of its day-to-day role to its officials and the managing director in particular.
  In the last resort, the NFFC will be able to reject the advice of the advisory committee. It will be only an advisory committee. If the NFFC does not wish to make a loan to a young person who has been recommended by the advisory committee, the NFFC will have the statutory right to make that decision. If the NFFC wanted to do something against the advice of the advisory committee, it would be able to do it.
  My hon. Friend also mentioned the question of distribution. I assure her that the terms of reference of the Prime Minister's working party are very widely drawn. Organisational matters are not excluded from consideration by it, and there are representatives of virtually every section of the cinematograph and film-making industries on it.
  The hon. Member for Manchester, Withington (Mr. Silvester), in a very in-
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  teresting speech, said that we were tinkering with the problems of the film industry. I have not claimed, and I do not think that the CFC would claim, that the Bill is the answer to the industry's problems, or even part of the answer. It is merely an attempt to ensure that more projects come forward and that priming-the-pump operations are not hindered by lack of adequate finance.
  The hon. Member for Withington also asked who were to be the members of the advisory committee. The advisory committee will be composed of persons representing producers, writers and persons employed in the film industry. The Secretary of State will consult the appropriate associations and organisations before he makes appointments to the committee.
  Mr. Higgins: It is pretty wide.
  Mr. Deakins: Yes, it is pretty wide, because on an advisory committee of this nature we want to take advantage of the wide-ranging expertise that exists in many sectors of the British film industry.
  I was also asked about the evidence we have of the use of the Eady money and whether it is being put to the best possible use. This is a matter which is not debarred from the working party's considerations, as it was not debarred from the considerations set out in the report of the Cinematograph Film Council, to which reference has been made.
  The hon. Member for Reading, North made an important point about whether there would be a penalty imposed in the form of, perhaps, reduced payments out of the Eady money to the Children's Film Foundation, the National Film School and the British Film Institute Production Board. I can assure the hon. Gentleman that that is not the case. The new scheme will in no way prejudice the payments made from the levy to those three institutions and the Cinematograph Films Council will continue to be consulted about all these payments. That is an adequate safeguard for those organisations and for the industry.
  The hon. Member for Thanet, East (Mr. Aitken) suggested that perhaps I had the cart before the horse in that the lack of projects was due rather to lack of confidence than the other way round.

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  Whatever the reason may be—and I do not want to hark back on recent history—I hope that he will agree that the Bill should help in some way to put the position right.
  He also made an interesting suggestion about trying to get hold of Middle Eastern money. This country is already in receipt of quite a lot of Middle Eastern money. It may be that the people in charge of the finances of those countries might be interested in film production. It is certainly an interesting suggestion. I assure the hon. Gentleman that I shall consider it further, not necessarily in connection with the current visit but in connection with future contacts with people from that area.
  The hon. Member for Worthing (Mr Higgins) raised a number of points about the levy. First, he said that it seemed to be payable to makers of British films, which includes those in Northern Ireland. The levy is not payable by cinemas in Northern Ireland and that is why it is excluded from the Films Acts. It is confined to cinemas in Great Britain. The Eady money is not levied on the prices of cinema admissions in Northern Ireland However, the levy is distributed to makers of British films, but not on any geographical basis. If this is an anomaly—and I do not accept that it is—it has always existed in respect of payments to the British Film Fund, and so on.
  The hon. Gentleman asked about the arrangements. I can assure him that the arrangements will be published. They have not yet been agreed and they have to be worked out by consultation with the industry. Indeed, they will have to become public knowledge because we want to attract film makers, script writers and so on. If we are to attract them, they must know what the conditions are for application to the National Film Finance Corporation for a share of this money.
  The hon. Gentleman also mentioned the advisory committee. I reiterate that the advisory committee is not mentioned because it is advisory to the NFFC and not to the Secretary of State. The NFFC will be the statutory body with which the Department will have its relationship.
  Mr. Durant: The Minister has not mentioned the distributors. Does that mean that they are not included?
  Mr. Deakins: The provision refers to those working in the film industry and I should not like to say whether that includes distributors. Since this is a project designed basically to help film making, the answer probably is in the negative. But if, in the light of experience, it were shown that there was an urgent need to have distributors on the advisory body because of projects that might lead the production of films unfit for distribution to the British cinema-going public, there might be a case for having a distributor. But one hopes that good sense from people either working in or with experience of the industry will suffice to ensure that projects chosen are suitable not only as British-quota films, but as films fit to be seen in producers' and exhibitors' cinemas.
  The hon. Member for Worthing asked about loans and other financial assistance. At present it is not intended to give assistance other than loans, but the Bill would permit grants to be given if that is considered advisable later. We shall start oft with loans, and, indeed, I hope that we shall continue with loans, but much will depend on the success or otherwise of the scheme and whether it succeeds in attracting people with the ability to produce films that the British public want to see.
  The hon. Gentleman's final point related to whether the premium was a replacement for interest. There is no interest payment as such. The premium is partly in lieu of interest and partly because if the film is put into production it is only fair that the fund should get back some recompense for the money it has advanced—not merely the capital sum, but some small share of the profit.
  The amount of premium is still being considered by the industry. I mentioned a figure of 50 per cent. and that may not turn out to be the right amount, but some of the projects that would benefit under the scheme may never come to fruition. We must recognise that as well as successes there will be failures.
  Mrs. Dunwoody: The majority.
  Mr. Deakins: My hon. Friend may be right in saying that the majority of them may be failures—failures in the sense that they will never reach the stage of exhibition in a cinema. But if the scheme results in British-quota films coming forward—films made by the British film maker—

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  it will be an investment of the industry's own money that is well worth while.
  Question put and agreed to.
  Bill accordingly read a Second time.
  Bill committed to a Committee of the whole House.—[Mr. Harper.]
  Committee tomorrow.

  RECESS ELECTIONS BILL [Lords]
  Read a Second time.
  Bill committed to a Committee of the whole House.—[Mr. Harper.]
  Bill immediately considered in Committee.
  [Mr. GEORGE THOMAS in the Chair]
  The Chairman: I suggest that we adopt the same procedure as we pursued yesterday when dealing with a consolidation measure; namely, put the Questions in blocks.
  Mr. Robert Cooke: May we in two or three words be told what the Bill is about?
  The Chairman: I am sorry but I have already put the Question to the House.
  Mr. Cooke: I am just asking that we should be told what it is about before we pass it; that is all.
  The Chairman: I am sorry that we may have moved a little fast, but that point has passed.
  Mr. Terence Higgins: On a point of order, Mr. Thomas. As I understand the situation, you were proposing to put the Question. It would be in order for the Minister to give an explanation at that stage.
  The Chairman: We cannot discuss the content of clauses, and we have already passed the Second Reading stage. The House a few moments ago agreed to give the Bill a Second Reading.
  The Question is that Clauses 1 to 5 stand part—
  Mr. Higgins: I abide by your ruling, Mr. Thomas. Although I understood you
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  to say that we could not discuss the contents of the clauses, I imagine that it would be in order for the Minister to explain the way in which they have been consolidated. I presume that the Minister would want to do that, although I abide by your ruling if that is not so.
  The Chairman: I do not wish to stop the deliberations of the Committee. However, our proceedings must be in order. If the Minister seeks to explain why Clause 1 is consolidated, if we deal with the clauses one at a time, I do not mind. We can discuss them one at a time. However, he must confine himself to why the clause is consolidated.
  The Parliamentary Secretary to the Law Officers' Department (Mr. Arthur Davidson): Perhaps I could seek your guidance, Mr. Thomas. I do not think that it is the wish of the House that I should go through the Bill clause by clause. However, if there is any way in which I can describe, extremely briefly, the sum total of the clauses, I shall be happy to do so.
  The Chairman: That cannot be done now. Next time I shall proceed more slowly.
  Mr. Davidson: On the next occasion I shall rise more slowly. That will give you, Mr. Thomas, more time.
  The Chairman: I am sorry this has happened because I looked forward with pleasure to hearing the speeches of both hon. Members concerned.
  Mr. Robert Cooke: The title of the Bill intrigued me. Some hon. Members would have liked to know more about the measure. That is why I raised the point.
  Clause 1 to 5 ordered to stand part of the Bill.
  Schedules 1 and 2 agreed to.
  Bill reported, without amendment.
  Motion made, and Question, That the Bill be now read the Third time, put forthwith pursuant to Standing Order No. 56 (Third Reading), and agreed to.
  Bill accordingly read the Third time and passed, without amendment.

  RECESS ELECTIONS BILL [Lords]
    ADJOURNMENT
    Motion made, and Question proposed. That this House do now adjourn.—[Mr. Harper.]

  THE ARTS (FINANCE)
  1.28 a.m.
  Mr. Robert Cooke: I am glad to have the opportunity of raising the subject of finance for the arts. It is strange that the Minister with responsibility for the arts took no part in the debate on the film industry, for which he has ministerial responsibility. However, I am glad that he listened to the debate. I wish to raise the question of the Downing Street Press notice of 22nd September 1975, according to which the Prime Minister appointed the Chancellor of the Duchy of Lancaster, Mr. Harold Lever, to undertake a thorough assessment of the problems facing the arts. When I asked for this debate I put it down to the Chancellor of the Duchy of Lancaster. I understand that his colleague will answer for him.
  According to the Press notice, the Prime Minister asked the Chancellor of the Duchy to consider, among other solutions, the possibility of raising additional funds for the arts from sources outside the Government and local government. We are entitled to know more about the matter. This is the first opportunity we have had of obtaining information from the Chancellor of the Duchy, through his colleague, about the possible solutions which are being investigated. We should be interested to know whether the Government have any new ideas up their sleeve.
  I shall be asking many questions about industrial and commercial sponsorship of the arts, but there may be something else which the Government are thinking about, and we should like to assist them in that. Could it be that new tax reliefs are foreshadowed in the announcement? Perhaps there is to be relief from some of the penalties that a wealth tax would impose.
  The Minister could tell us the scale of patronage of the arts by commerce and industry. I know that the Government are working on that. Unless they know the present scale of patronage of
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  the arts by industry and commerce, how can they possibly work upon it in the future?
  While I am on the subject of industrial patronage, I am sorry to tell the Minister that more than one chairman of a major public company has refused to support the arts so long as the Minister persists in his present attitude towards the wealth tax. The word "Marxist" has been used. The Minister has taken an extraordinarily controversial stand on the arts and the national heritage in his attitude towards the wealth tax. This has frightened off many people who would like to help.
  The Minister has, in a sense, failed with industry. How is he succeeding with the unions? The Government claim to have a special relationship with the TUC and unions generally. The Opposition have raised with the Minister on many occasions the question of union financial support for the arts. As the direct result of our representations, the TUC set up a working party in April 1975. We pressed the Minister, he had words with the TUC and the TUC set up the working party. Its terms of reference are:
  "to consider and make recommendations on ways in which trade unionists and their families may be enriched by, support and contribute to the arts".
  It is obvious that there is no thought of financial contributions from the unions: far from it. I am sorry that although the working party includes members from unions associated with the arts—some fairly indirectly—there is no artist on the working party. Perhaps that might be considered. I know that the unions are genuinely interested and want to be helpful, but the prospect of the unions providing financial support or encouraging others to do so is not very bright.
  When I have spoken to union representatives they have made great play of greater industrial responsibility. The TUC suggested that firms who make money out of matters related to the arts—television tubes spring to mind—should do more to help the arts. I believe such firms already give a fair measure of support. If the TUC takes a friendly attitude about this, I am sure that firms will be encouraged and we shall get results.

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  The TUC certainly will not get results by a frontal attack.
  The TUC also makes much play of the role of municipal patronage. A TUC representative who came to see me today stressed that. I pointed out that during most of the past 30 years the Labour Party—with its special relationship with the TUC—has controlled most of the great municipalities, but the rich municipalities do not have a sparkling record in supporting the arts. Of course, some outstandingly good work has been done, but the overall level is not good and has recently declined. We understand the difficulties faced by local government, but for the TUC to claim that the municipalities are a major source of patronage is somewhat optimistic.
  One of the proposals put forward by the unions would result in even greater public expenditure. They are strongly inclined to award the fourth television channel to an organisation with the aim of developing cultural, educational and minority interests. That would conflict with commercial television's need to attract advertisers. The TUC turned down the idea of a fourth channel in the hands of independent television companies.
  I wonder what the hon. Gentleman thinks about this. He said on 4th March that he was considering whether to give evidence to the Annan Commission. He has had a long time to consider. I wonder what he has done. Perhaps he can tell us the answer tonight. I hope that he has overcome any prejudices he may have had against commercial television and has his feet firmly on the ground in this matter. He could, using his very considerable influence, talk about the considerable arts revenue which could be raised through ITV2. He knows what I mean, and I hope he is thinking seriously about it.
  I want to refer to credits on television for those who finance arts events. Such credits could inspire a great many more people to take the plunge. If a great institution sponsors an opera or ballet or concert, the BBC should be encouraged—I could even say, required—to give credit where credit is due. Various prizes and trophies are given, for example, by Bensons & Hedges, Double Diamond. Hennessey and Gillette. All those who
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  sponsor sports get their names on the television screen, and not just by advertisements plastered across the fairway or around the arena.
  The BBC has a rather curious split personality on this. If it can allow such sport advertising, surely it could, at the end of a television broadcast of an opera from Covent Garden, say that it was sponsored by the National Westminster Bank and the Imperial Tobacco Company, for example. The same applies to Glyndebourne productions sponsored by the Midland Bank.
  There is, however, a chink in the armour. BBC local radio stations have been more generous in giving credits. I was glad to be attacked in Bristol on BBC local radio when I said that it did give credits. I am delighted that it does. I should like to see that done on television as well.
  The Press has been immensely helpful in giving proper credit where it is due. After all, if people are prepared to give large sums of money for sponsoring the arts, they should be given the credit, and if others sec that they do get the credit, many will follow suit, because it all helps to improve reputation and the image of a company or institution.
  I turn now to the question of finance for the arts and for several projects which the hon. Gentleman has in mind. There is, for example, public lending right. What is to be the annual cost? The hon. Gentleman said recently that we must wait for the Bill in the Queen's Speech on 19th November. I hope for another nod from him on that. There is no nod. Perhaps the Bill is not to be after all and we shall have to wait another Session. There must surely be further doubt among the authors on that one.
  Is the annual cost to be in the Bill at all? Was a Bill of this kind ever introduced which said how much money was to be produced to help authors? We have heard the figure of £5 million a year, which would provide meaningful help for authors hoping to participate. But with inflation rising, one wonders whether that would be enough.
  Can we expect extra money to be provided on the arts budget? The Arts Council has said that it has to cope with a 38 per cent. inflation. Even allowing for a little exaggeration, the Arts Council

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  is in grave difficulty. Are we to see another £5 million produced for the arts in public lending rights? I believe that the hon. Gentleman could be accused of practising some cruel deception on the writers if he held out great hope of anything happening in their direction for some time.
  Is the Minister considering the possibility of financing the public lending right out of an extended copyright? Will the copyright run for not 50 years but 60 years, the revenue from dead authors being used to support the living? It may not be the Minister's Department, but the Home Office that is considering copyright internationally, but I am sure that the Minister is in touch with these matters. Now that we have a Cabinet Minister at the helm, perhaps we shall get somewhere fast.
  I now turn to the National Theatre. We have been told on many occasions that the building is getting on nicely and that certain parts will be finished quite soon, but what about the players? Are they to be given some sense of security? Can they indulge in some forward planning? However splendid the building, it will not be of much use to the public unless it is adequately financed and fully used. There is an immense amount of enthusiasm for the project which we would not like to see cool off.
  One more word about the problems of the Arts Council: are we to have the repeated cries of anguish every year and the cat-and-mouse game which we have seen taking place between the council and the Minister? Can we not have even a modest triennial indexed budget? I suppose it would have to be indexed in inflationary times. The council might be told that there was not much room for expansion, but at least it would know where it was and it would be able to plan ahead. I do not believe that the Treasury is entirely to blame. I think that a certain amount of muddle is going on in Belgrave Square. What practical steps is the Minister prepared to take on that?
  The Minister would do well to turn his attention to following our lead in industrial and commercial sponsorship or patronage. I am glad to see him converted to our case. We have always favoured and encouraged the widest pos-
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  sible financial support for the arts from all possible sources. On this side of the House we are practical people. With many sponsors it is possible to look to a more settled future.
  I am delighted to know that the Minister will be in Bristol later today. I am sorry that we have had to keep him here and have not released him in very good time, but he will get there all right. The Minister is going to John Harveys to applaud its sponsorship of the Bournemouth Symphony Orchestra's concerts, which I helped to launch as long ago as 15th September. Perhaps he will be standing on the same spot that I occupied on that occasion. Perhaps he is making his visit to congratulate me on giving him a lead. I am delighted that he is accepting that lead. I hope he will make it clear that the attitude displayed by such sponsorship will have every possible support and encouragement and that it will get the sort of public recognition it deserves.
  I hope that the Minister will also say a word in passing to my friends at the National Westminster Bank for their sponsorship of "Cosi Fan Tutte" during the Glyndebourne tour, which was greatly enjoyed by many people from all over the West Country. When the Minister gets to the Imperial Tobacco Company Cello Festival he will be met by my wife. She will take him to a reception, where he will hear about a fine example of private enterprise collaborating with public finance.
  I am glad to see someone as far Left as the Minister—I know that he will be rather proud of that description—embracing and applauding the fruits of capitalism. I think that the Chancellor of the Duchy of Lancaster must have been working on him. All success to commerce and industry in the arts! Their present contribution is significant and the future is full of possibilities. Let us give them every encouragement, and perhaps even some tax inducements. Perhaps it is more important that they should receive proper public recognition for what they are doing.
  1.44 a.m.
  The Under-Secretary of State for Education and Science (Mr. Hugh Jenkins):I am grateful to the hon. Member for Bristol, West (Mr. Cooke) for raising this

  449
  subject so shortly after the House has reassembled after the Summer Recess. Just as bullion was said to be the sinew of war, money is certainly the sinew of the arts.
  I have never had any inhibitions about the source of the money. That may be because before I became involved in the world of entertainment some 25 years ago my previous interest was in the banking world. I was editor of the Bank Officer for some time. During that time I came to know the City quite well. I have retained some fairly good connections and associations with business men. I would say that my relationships with business men in the City are remarkably good considering the sharp differences of political opinion which separate us. That difference of opinion has not in any way inhibited me from taking their money from them.
  On the contrary, it seems that while we live in an acquisitive society we can do no better with the surplus profits of capitalism than to divert them into the arts. I have no inhibitions whatever about this. My relationships with those business firms which support the arts are a good deal warmer than they are with those who do not. If the latter firms wish my relationships with them to improve, they can do no better than to direct their funds in this direction, as a number of firms in Bristol are doing. I hope to pay proper tribute to them tomorrow.
  It is not only a good thing in itself; it is a good thing from the point of view of the prestige of the firm. Such a practice is widespread among firms in the United States and we are beginning to catch up here. The idea is growing that business organisations have a responsibility to the society within which they exist. This responsibility should be recognised more and more. I believe that this is happening and I believe that that responsibility should be recognised by public corporations just as much as by private enterprise.
  Mr. Robert Cooke: The Minister will recognise that in Bristol our university, museum and art gallery were all provided by great industrialists. No public money was involved when they were started.
  Mr. Jenkins: If the Bristol example can be followed more widely, no one will be happier than I. I shall certainly encourage such moves and take every
  450
  possible opportunity, where such things are done, of paying proper tribute to those involved and expressing appreciation, as I have done on several occasions in the House.
  It is wrongly suggested in the Press that I am reluctant to express appreciation to business organisations. The contrary is true. I am somewhat effusive in this matter, sometimes excessively effusive. I shall try to restrain myself and try to achieve a reasonable balance
  I was interested to read about the hon. Member's party setting up some study groups on the arts. I shall watch their progress with interest and any resultant policy that may emerge with greater interests still. Hope and plans are the essence of opposition. Realities are the essence of power.
  One of the last occasions on which the House debated the arts was on the motion moved by my hon. Friend the Member for Leyton (Mr. Magee) on 10th February this year. I outlined then how quickly—whatever political party was in power—the Government's grant to the Arts Council had increased since 1945. I pointed out that it had increased nearly one hundredfold in 30 years, and that this increase had been particularly significant since 1965 when my noble Friend Baroness Lee was appointed as the first Minister for the Arts. It seems necessary to mention this once again as it has easily been forgotten in the public controversies of recent months.
  We are all fully conscious of the labour-intensive nature of the arts which limits the extent to which they can accommodate the kind of inflationary pressures we have experienced over the last two years, without significant damage to the quality and range of performances. Lack of money is certainly detrimental to the arts but inflation makes it much more so. The arts cannot thrive unless inflation is got under control. I am sure that the hon. Member appreciates that. If he does not, he has only to talk for five minutes to the Arts Council or any of its clients to realise that this is so. Inflation, then, is enemy number one. With it is tied up the problem of resources and finance.
  I therefore welcome the Prime Minister's decision to ask my right hon. Friend the Chancellor of the Duchy of

  451
  Lancaster to undertake a thorough assessment of the financial problems facing the arts. The examination which my right hon. Friend will be carrying out will be of a wide-ranging nature. He has already embarked upon it. One of the reasons I welcome this is that our knowledge of what is being done in the business world is less than it should be. Various figures have been quoted. We can be sure of one thing and that is that it is less than the municipal help which is being given. Public support from central Government funds is much the largest. The next largest is municipal help. Business is a poor but an increasing third; the last figure I saw, £300,000, is, I believe, much too low.
  We know a good deal about what large firms are doing. We do not know enough about the large number of small contributions being made all over the country by smaller firms. Not only is money being given, but a good deal of work is being done by smaller firms. This has not been evaluated, and if it were all added up we might be pleasantly surprised by the sum total.
  Mr, Robert Cooke: The Minister says that his information is not as complete as he would like it to be. He has been pressed by the Opposition—and by me in particular—ever since he became Minister to take the subject seriously. Surely he has been doing some work on it. Just to pull out a figure of £300,000 is extremely misleading.
  Mr. Jenkins: The most exact figure we have is £300,000, but I think it is an under-estimate.
  One of our difficulties in this matter, which we have not entirely resolved—I have touched on it in discussions with the CBI—is that we do not want to be quoting firms unless we are sure they want to be quoted. It might, perhaps, be much more satisfactory were the CBI to set up an organisation or be a party to an organisation which might be responsible for co-ordinating such information. I hope that it will agree to do that. It would be very much more satisfactory if business were to quote what business is doing rather than to have the Government take the responsibility.
  It is all very well for the Government to take responsibility for Government
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  figures, whether central or local, but it is very much better to set up an organisation under the auspices of the CBI to take the responsibility for saying what business is doing. I believe that one result would be that business would do a good deal more.
  I doubt whether the TUC would agree that it acted on the suggestion of the Opposition. The TUC has long been interested in the arts. It has never regarded itself as a major source of money but its good will is important. It would be very sad if a circumstance were ever to arise in which a business firm decided to put money into the arts with the shareholders agreement, and then the employees said, "We do not want that money to be given because it is coming off our wages." The good will of the trade unions, of the TUC, is important in this case.
  Although the size of these business contributions in most cases is small, the effect can be seen in the same light as a prestige advertisement. In many cases a contribution towards the arts would be more effective in terms of its return to the firm than would be the ordinary sort of prestige advertisement, whether a page in The Times, or anything else.
  Mr. Robert Cooke: If the unions have for so long been interested in the arts—and they are very powerful, as the Minister will concede—how is it that they have persuaded firms to spend only £300,000-plus? Perhaps it is £1,500,000 by now. I hope so. Why have the unions been so slow to persuade firms to become involved in the arts?
  Mr. Jenkins: I do not think they have. Just as contributions to the arts by business firms are marginal, so, I believe, are contributions to the arts by the TUC. Neither organisation regards it as a first charge. Our task is to try to translate the good will which exists on both sides of industry into money.
  Discussions cannot be hurried if worthwhile results are to be achieved, but I am very hopeful about them. I am looking forward to my visit to Bristol. I have seen the Glyndebourne "Cosi", which was very fine. I have also seen some opera at the Coliseum and at the Royal Opera House, supported by Imperial Tobacco, one of the Bristol firms. I am

  453
  not one to say that this is unimportant, because in my view it is important. It may for a long time—I am sure it will—remain of tertiary, not even of secondary, importance. However, that is no reason why it should not grow and become a much more important factor.
  I must now turn to the specific points which the hon. Gentleman has raised. The processes of Government will not allow me to give any indication whatever of the possible outcome of Government grants to the arts for the next year. The House will be informed in due course through the presentation of financial estimates. However, in case it has escaped the notice of the hon. Gentleman, the Arts Council has already submitted its own estimate for next year and it has mentioned recently that this is for £40 million.
  Fortunately, the Government already have a significant record of achievements. When we came to office 18 months ago we had the task of maintaining and advancing the arts at a time of great economic difficulty. Within a fortnight I was able to announce the abolition of admission charges for the national collections, which was in contrast to the record of the Opposition who took three years trying to introduce them against the opposition of nearly all the trustees of our national collections, and three months trying to have them administered in the same circumstances.
  Last year the Government presented two Supplementary Estimates. The Government's record in the arts is one of which we are by no means ashamed. It will not have escaped the notice of the hon. Gentleman that the National Theatre Board started to move into its
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  new building on 1st September. After reaching agreement with the Arts Council on the necessary minimum level of support, the Board issued a statement recently to say that the first performance before a paying public would be on 16th March next year. Therefore, progress has been made. I am gradually answering the hon. Gentleman's questions and I hope that as the weeks roll by I shall be able to answer more and more of them.
  It is not the Government's intention that the National Theatre will open and operate at the cost of the rest of the Arts Council's clients. My report on the arts, which I published last summer, showed that over 60 per cent. of the Arts Council's expenditure was outside London and my further report showed some of the results of that expenditure.
  Other bodies, such as the crafts and the area museum councils, have also had substantial increases in their grants. I am sorry that time does not permit me to give details of those increases. I would have referred to the Standing Commission on Museums and Galleries and to the needs of conservation by local collections. I was able to announce to the House on 8th July that I had reached agreement with five of the trustee-governed national collections—
  The Question having been proposed after Ten o'clock on Tuesday evening, 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 two minutes to Two o'clock.

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

AIRCRAFT APPROACH HEIGHT OVER CHELSEA
Lord KINNAIRD:My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government what is the height below which aircraft approaching Heathrow are prohibited from flying over Chelsea.
The MINISTER of STATE, DEPARTMENT of INDUSTRY (Lord Beswick): My Lords, the height of aircraft approaching Heathrow is controlled by Department of Trade noise abatement regulations and by Air Traffic Control procedures, on which I have been advised by the Civil Aviation Authority. Chelsea is about 10 miles from the touchdown point for aircraft approaching Heathrow from the East, and the Air Traffic Control require aircraft making such approaches to intercept, at a distance of between 8 and 12 miles from touchdown, a radio beam which is projected by the airport's instrument landing system. Aircraft over flying Chelsea before intercepting the radio beam are required by the Department of Trade not to fly below 2,000 feet. Aircraft making an interception before or over Chelsea will be at a height of 2,500 feet and 3,000 feet.
Lord KINNAIRD: My Lords, while thanking the Minister for his helpful reply, may I ask him whether he is aware that I am a very light sleeper? Is he also aware that frequently between 5 a.m. and 6 a.m., and nearly always on Sundays, residents are literally frightened out of their beds by low-flying aircraft? Is the noble Lord further aware that I have had two letters from the Chairman
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of the Civil Aviation Authority, each stating different things? One said, as the noble Lord has just remarked, that aircraft flying over Chelsea are not supposed to descend below 2,000 feet, and the other said 3,000 feet. Which, if either, is correct? In view of this, and bearing in mind both the comfort and safety of residents and passengers alike, is the Minister able to say whether there are any effective means of ensuring that the correct instructions are given, and that those instructions are carried out?
Lord BESWICK: My Lords, I was not aware that the noble Lord is a light sleeper. I was aware, however, that this is the noble Lord's first Question in this House, and I congratulate him on the way he has put it. As to the situation over the noble Lord's house I sympathise with him to some extent because having made inquiries I find that Durham Place, where the noble Lord lives, lies approximately one-half to three-quarters of a mile North of the extended centre line to runway 28 right; that aircraft approaching from the North and East of London must fly over Durham Place to intersect the ILS beam; and that traffic from the South will pass about half a mile South of Durham Place. So there is quite a Clapham Junction over the noble Lord's house. But it still remains the fact that aircraft should not be below 2,000 feet at the minimum, and are normally between 2,500 and 3,000 feet.
Lord TREFGARNE: My Lords, can the noble Lord say what steps are taken to ensure that air traffic instructions are complied with by aircraft approaching Heathrow from the East? Can he say, for example, whether the flight data recorder traces are ever analysed to ascertain the correct performance of the aircraft; and also whether any secondary radar is available to the approach controllers at Heathrow for this purpose?
Lord BESWICK: My Lords, I think that the noble Lord, with his technical knowledge and technical curiosity, had better see me outside, when I will give him all the facts. But, briefly, the position is that captains are instructed at what height to fly and they report that they are at that height, as the noble Lord knows. Monitoring is possible and is usually done, and there are penalties for those who contravene the regulations.
Baroness HYLTON-FOSTER: My Lords, could the noble Lord give any indication of the height at which an aircraft will be flying when its markings can be read? Further, does he know that I live very near the noble Lord, Lord Kinnaird?
Lord BESWICK: My Lords, I imagine that it would depend, first, upon the eyesight of the observer and, secondly, upon whether or not the observer is a light sleeper.
Lord TREFGARNE: My Lords, if I may return to my original question, can the noble Lord please say how many infringements of the height regulations have occurred recently, and whether any successful prosecutions have resulted?
Lord BESWICK: My Lords, it depends upon what the noble Lord means by infringements. There have been infringements, and the airline company concerned has been warned. The Department of Trade have power to instruct the Airports Authority to withdraw facilities from those airline companies which appear not to observe the regulations. As to prosecutions, the answer is, None.

SOVIET SHIPPING: FREIGHT CHARGES
2.43 p.m.
Lord SHINWELL: 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 has come to their attention that vessels operating under the control of the Soviet Union are carrying freight at substantially reduced charges to the detriment of British shipping and whether any action is contemplated to prevent unfair competition.
Lord BESWICK: My Lords, we are aware of the concern felt by the British shipping industry, and those in some other countries, about the activities of the Soviet Merchant Marine. We are urgently investigating the matter with the interests concerned. I cannot speculate at this stage upon what, if any, action might be required.
Lord SHINWELL: My Lords, when my noble friend speaks about investigating the matter—which he regards, quite rightly, as urgent—does he mean that there have been consultations with other maritime countries, for example, West Germany and the Scandinavian countries who are adversely affected? Is he aware that the wage rates of Russian seamen are only one-tenth equivalent (in British currency) to the wages paid to British seamen? Is that not detrimental to the interests of the British Mercantile Marine?
Lord BESWICK: My Lords, the answer to the first part of my noble friend's supplementary question is that there are consultations between the countries concerned with this trade. I am not aware of the wage rates of Soviet seamen, but the question is whether there is free and fair competition according to the principles of the Anglo-Soviet Merchant Shipping Agreement. We are endeavouring to establish whether or not this is so.
Lord SHINWELL: My Lords, when my noble friend speaks of consultation, can he say what has happened as a result of the consultations that have already taken place; or are they only being contemplated?
Lord BESWICK: My Lords, the countries are in the process of consultation. Nothing has as yet taken place.
Baroness WARD of NORTH TYNESIDE: My Lords, may I ask the noble Lord whether he can tell us how long these consultations have gone on, whether there has been any response from the Soviet Union or whether they have still to go on in accordance with the Question asked by the noble Lord, Lord Shinwell?
Lord BESWICK: My Lords, as the noble Baroness and my noble friend will appreciate, there are certain difficulties in establishing the facts in this case. I cannot say exactly how much longer these consultations will take. I have said that that they are being pressed with a degree of urgency.
Lord SHINWELL: My Lords, why does my noble friend speak of investigation into the facts? Is not the Minister

1241
responsible—whoever he happens to be—in consultation with the Council of Shipping? Is he not aware that the Council of Shipping have related the facts and presented them?—I have a copy in my possession. Does he not regard this matter as urgent and does he not agree that something must be done about it?
Lord BESWICK: My Lords, it is possible for some people to make assertions which they allege to be facts, but it is not always easy to prove whether or not they are facts. Although I have said that there is a degree of urgency about this matter, I do not believe that we should overestimate the damage being caused. I am informed that Soviet ships carry only some 1.2 percent. of the total United Kingdom trade—that was the figure in 1973. We, for our part, carry approximately 1 per cent. of the trade of the Soviet Union. I cannot think that the damage, as of now, is excessive.

H.M.S. "PRINCE OF WALES" AND "REPULSE"
Lord CLIFFORD of CHUDLEIGH: My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government what action they propose to take to protect the wrecks of H.M.S. "Prince of Wales" and H.M.S. "Repulse" in view of the imminent departure of the Royal Navy from Singapore.
Lord WINTERBOTTOM: My Lords, although the wrecks of Her Majesty's Ships "Prince of Wales" and "Repulse" are lying in international waters over 50 miles from the Malaysia coast, they remain Crown property and as such we are concerned to safeguard them. You will appreciate the difficulties of trying to prevent any unauthorised interference with the wrecks, particularly small isolated instances; but since salvage of these two ships would be a major and lengthy operation any attempt could hardly escape notice even in its preparatory stages. While our presence in the Far East may have had a deterrent effect on would be salvors, I believe that the withdrawal of the Royal Navy from
1242
Singapore should not affect in practice our ability to take action should the necessity arise. The position will, of course, be watched carefully.
Lord CLIFFORD of CHUDLEIGH: My Lords, while thanking the noble Lord for that reply, may I ask whether he is aware that the huge bronze propellors, one of which is already missing, the other non-ferrous metals and the armour plating which, as pré-Hiroshimametal, is in great demand for shielding nuclear reactors, make these ships a salvage bonanza? Would it not add insult to injury to the relatives and survivors for Japanese salvage firms—and it could be one of them—to profit from British ships and British war graves?
Lord WINTERBOTTOM: My Lords, the noble Lord has raised what is the important issue. These ships are the tombs of nearly a thousand British sailors. I am certain that the House will agree with the noble Lord that they should not be desecrated.
Lord BALFOUR of INCHRYE: My Lords, can the noble Lord tell us in what depth of water the wrecks lie?
Lord WINTERBOTTOM: My Lords, all that I know is that it is just within the capacity of modern diving techniques.
Lord WALLACE of COSLANY: My Lords, will my noble friend confirm that it is Admiralty policy not to give salvage rights in such circumstances? Furthermore, would he not agree that any attempt to disturb the graves of these honourable and gallant men would outrage public opinion in Britain?
Lord WINTERBOTTOM: Yes, my Lords, that is the position.
Lord CLIFFORD of CHUDLEIGH: My Lords, is the noble Lord aware that our own Black Rod, as Far East Fleet Commander, was responsible for the 1966 diving operation which attached to the propellers of the two ships a line and float from which a White Ensign was flown? Will he, on this Trafalgar Day, guarantee to the House that the "powers that be" will not sweep this problem under the carpet?
Lord WINTERBOTTOM: Yes, my Lords, I can give that guarantee.
Lord WIGG: My Lords, if the noble Lord is considering sweeping matters under the carpet, would he remind himself that at the time HMS "Repulse". HMS "Prince of Wales" and HMS "Singapore" were lost, the British nation was promised an inquiry into the circumstances surrounding the building of HMS "Singapore" and the circumstances of the loss of these ships? That inquiry to this day has never been held. Perhaps it would be as well, if we are going to sweep things under the carpet, that we should remember the circumstances under which they were swept under the carpet.
Lord WINTERBOTTOM: My Lords, that is another question but I did not say that Her Majesty's Government were going to sweep it under the carpet.
Lord DRUMALBYN: My Lords, may I ask for clarification? The noble Lord replied to the effect that any attempt to disturb these wrecks would outrage public opinion. Does the noble Lord extend that to salvage by British firms for British purposes?
Lord WINTERBOTTOM: My Lords, that is extending the Question. Her Majesty's Government would consider salvage, provided the bodies of the dead were reverently treated.
Lord WALLACE of COSLANY: My Lords, is my noble friend aware that if that decision were taken the Commonwealth War Graves Commission would carry out that task and see that the remains were adequately, properly and decently buried?
Lord WINTERBOTTOM: My Lords, if that situation arose, the War Graves Commission would be consulted.

FURNESS WITHY SHAREHOLDING
2.52 p.m.
Lord SHINWELL: 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 any action is contemplated to prevent the Furness Shipping Line being taken over by a Bermuda company whose largest shareholder is resident in Switzerland.
Lord JACQUES: My Lords, purchase by Eurocanadian Shipholdings Limited of a substantial minority shareholding in Furness Withy and Company Limited falls within the scope of the merger provisions of the Fair Trading Act 1973. My right honourable friend the Secretary of State for Prices and Consumer Protection will consider whether a reference to the Monopolies and Mergers Commission would be appropriate in the light of any advice from the Director General of Fair Trading who is obtaining information from all the principal parties, including the trade unions, and others who may have a relevant interest.
Lord SHINWELL: My Lords, is my noble friend aware that the Eurocanadian shipping company has not infiltrated financially into Furness Withy, but into one of its subsidiaries, Manchester Liners? Is he also aware of the fact that Furness Withy—which is probably one of the largest shipping companies in this country and in the world—is of the utmost importance to this maritime country of ours, both in the carrying on of trade and from a security point of view? Will the Government treat this matter with the utmost urgency in order to ensure that this British shipping company remains British?
Lord JACQUES: My Lords, we are aware that the Canadian owned company has an interest not only in Furness Withy but in one of its subsidiaries. However, we need to have a report from the Director General, because it is not yet clear that it is a relevant case for the Monopolies and Mergers Commission. Much will depend upon the report which is given to my right honourable friend by the Director General of Fair Trading. In the meantime, there are precautions and safeguards against a takeover of either company. First there is the safeguard that exchange control permission would be needed for acquisition of a holding exceeding 29.9 per cent. Secondly, under the City Code on Takeovers, when a shareholding exceeding 30 per cent. is acquired, the holder is required to make a bid on the same terms for the rest of the shares, which would obviously take time. Thirdly, if and when a reference is made to the Monopolies and Mergers Commision, the Secretary of State has order-making powers to prevent any further acquisition of shares during the

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merger investigation. We believe that the position is adequately safeguarded.
Lord SHINWELL: My Lords, does the noble Lord realise that the answers to these questions savour of the utmost complacency? The attitude of the Government in matters of shipping indicates that they regard shipping as a Cinderella of our industries and services. Is he aware that this Eurocanadian company is a very mysterious affair and that there is no question about one fact; namely, that the principal shareholder is not in Bermuda or Canada but is resident in Switzerland and concerned solely with the financial interests? Will the Government take care that the British maritime industry is protected against infiltration of this kind, which cannot do the shipping industry of this country, or Great Britain itself, any good?
Lord JACQUES: My Lords, I have very good reason to believe that the Government are not complacent on this issue, and that, if necessary, they will take action, either under the Fair Trading Act or the Exchange Control Act. The Government know exactly what they are doing.
Baroness WARD of NORTH TYNESIDE: My Lords, may I ask the noble Lord whether official representation has been made to the Government on this issue? This is of the greatest possible importance before any action is taken by Her Majesty's Government.
Lord JACQUES: My Lords, there has been communication between Furness Withy and the Government; and the trade unions concerned have made it known that they are against the takeover. In the meantime, the Director General is getting detailed information from these and other parties.
Lord SHINWELL: My Lords, is my noble friend aware that these references which he has made to safeguards, the Fair Trading Act, et cetera, are not worth the paper that they are written on? Unless something is done about this the Government are in for a lot of trouble, and I am going to take part in that trouble.
Lord JACQUES: My Lords, from the footnotes on my brief, I know that the Government are aware that my noble
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friend is likely to make trouble on this issue. I will tell him that the Government are not only fully aware of that but are prepared for it, and they will be able to justify their position in the end.

GOVERNMENT STATEMENT
Baroness LLEWELYN-DAVIES of HASTOE: My Lords, with the leave of the House, at a convenient moment after 3.30 p.m. my noble friend Lord Wells-Pestell will repeat a Statement on abortion.

AIRPORTS AUTHORITY BILL [H.L.]
The LORD CHANCELLOR (Lord Elwyn-Jones): My Lords, I beg to move that this Bill be now read a second time. It is a straightforward Consolidation Bill, and it consolidates the Airports Authority Act 1965, which established the British Airports Authority, with nearly all the subsequent enactments relating to the Authority. The Bill will be referred to the Joint Committee on Consolidation Bills in the usual way. I beg to move.
Moved, That the Bill be now read 2ª.—(The Lord Chancellor.)
On Question, Bill read 2ª, and referred to the Joint Committee on Consolidation Bills.

COMMUNITY LAND BILL
2.59 p.m.
The PARLIAMENTARY UNDERSECRETARY of STATE, DEPARTMENT of the ENVIRONMENT (Baroness Birk): My Lords, I beg to move that the House do now resolve itself into Committee on this Bill.
Moved, That the House do now resolve itself into Committee.—(Baroness Birk.)
On Question, Motion agreed to.
House in Committee accordingly.
[The EARL OF LISTOWEL in the Chair.]
The CHAIRMAN of COMMITTEES (The Earl of Listowel): Before I call Amendment 1A, I should point out to the Committee that if this Amendment is agreed to I cannot call Amendments Nos. 1, 2 or 3.
Baroness YOUNG: Before speaking to Amendment 1A, at lunchtime today I received from the noble Baroness, Lady Birk, a suggested grouping of Amendments. I am very happy to agree to the proposals which were made yesterday in the House, and indeed to future proposals that she might make in this respect. But it is very difficult for us, at approximately one hour's notice, to take all the Welsh Amendments as a start, particularly as some of them apply to the later Schedules. I wonder therefore whether the noble Baroness would agree that it would be better to take the Amendments in the order as they are on the Marshalled List rather than as suggested in this letter.
The LORD CHANCELLOR: We are at the disposal of the Committee on this matter. It was thought convenient, to avoid repetition, that we should discuss the associated and consequential Amendments following the main Amendment; but if the noble Baroness thinks that would be unduly burdensome—and I am bound to say she has my sympathy because there are a multitude to consider—we shall be quite happy to fall in with what is proposed. That does not mean that I want to encourage any repetition of arguments, but I know that noble Lords opposite will always seek to avoid so unworthy a charge being laid against them.
Baroness YOUNG: I should like to thank the noble and learned Lord the Lord Chancellor. I think there will be plenty to discuss in this Bill without having any repetition at all! In this instance my suggestion really is very much to the convenience of this side of the Committee. If at a later stage it is found possible to reach an agreement on the grouping of Amendments, we should be very glad to do so.
Clause 1 [Definitions]:
3.1 p.m.
Lord SANDFORD Lord SANDFORD moved Amendment No. 1A:
Page 1, line 10, leave out paragraphs (a) to (c) and insert—
("(a) in relation to England means the council of a county or district, the council of a London borough, the Common Council of the City of London and the Greater London Council, a development corporation as defined in section 2 of the New Towns Act 1965, or in section 2 of the New Towns (Scotland) Act 1968, the Peak Park Joint
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Planning Board, the Lake District Special Planning Board;
(b) in relation to Scotland means a regional, general or district planning authority within the meaning of Part IX of the Local Government (Scotland) Act 1973, or a development corporation as defined in section 2 of the New Towns (Scotland) Act 1968;
(c) in relation to Wales means the Land Authority for Wales established under Part II of this Act or a development corporation as defined in section 2 of the New Towns Act 1965.")
The noble Lord said: I beg to move Amendment No. 1A. Noble Lords opposite will already know that we very much dislike this Bill. We very much dislike the procedure we are being asked to adopt in discussing it and, I am sorry to say, we very much dislike the layout of the Bill as well. This Amendment is a probing Amendment, to see whether or not we can extract from the noble Baroness or the noble and learned Lord some undertaking that this Bill will be looked at while we are handling it in this Chamber and before it goes on to the Statute Book, if it does go on to the Statute Book, to see whether or not it would be possible to tidy up the definitions, expressions, interpretations and soon in the kind of way which is illustrated by this Amendment. Other places where these strictures apply are in Clauses 4 and 6, which both contain whole sets of definitions. I can see there is some distinction between them, but it really would be very much easier if, rather than their being broadcast all over the Bill, they were set together in one place.
Baroness BIRK: As I understand it, this Amendment seeks to produce a consolidated definition of "authorities" for the purposes of this Bill. It does this by deleting most of the contents of Clause 1(1) and substituting revised definitions which also incorporate the substance of subsections (3), (5) and (7) of the same clause. I do not think the purpose is entirely clear, since the clause at present starts with three simple definitions of the authorities who are to operate the scheme related to England, Scotland and Wales respectively. Further definition of some of the terms used in subsection (1) is provided in the later subsections of the clause, in particular definitions of "local authority'' in England, which is found in subsection (3), and in Scotland, which is in subsection (5). There is a definition

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of new town authorities in subsection (7). I agree it would seem possible to reorganise the definitions in the way suggested, but frankly I find it difficult to see that very much would be gained. In any case, I would draw the attention of the noble Lord to the fact that the Amendment cannot be accepted as it stands, because it is defective, paragraph (a), dealing with England, containing a reference to the New Towns (Scotland) Act 1968. Therefore I must resist the Amendment.
Lord SANDFORD: I have already explained that I do not intend to press the Amendment, so that is all right. I had thought not to get an explanation from the noble Baroness as to how Clause 1 would work—because with a good deal of care and toil one can find out—but I was seeking to get from her an undertaking to look at the Bill to see whether or not it would be possible, during its passage through this Chamber, to carry out some consolidation of the kind which is illustrated by this Amendment. Perhaps the noble Baroness could go just a little further before I ask leave to withdraw the Amendment, and say that she and her noble colleagues will bear this point in mind, to see whether the Bill can be made just a little easier to read and to grasp.
Baroness BIRK: Any point that is raised will certainly be kept in mind; but I am sure the noble Lord will agree, particularly in view of what the noble Baroness said, that it is probably better if we deal with these points as they come up. I will certainly put the point to the Parliamentary draftsmen, to see whether a different approach to the definitions might be made.
Earl FERRERS: We should be very grateful to the noble Baroness if this could be looked at, because one of the problems that has always been pointed out regarding this Bill is the difficulty of understanding it, even in the case of a professional. To a layman, it becomes almost intolerable, because if one looks at the definition clauses, definitions appear in Clauses 3, 4, 5, 6, 7, and 15. For those people—and there will be many—who are not professionals in these matters, the mind will almost burst trying to find a way through the Bill. I should have thought that the Amendment moved by my noble friend had
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some substance to it, because Clause 1(1)(b) says:
"in relation to Scotland means a local authority or a new town authority,"
and then that is described in the same Amendment without one having to turn over the page to discover what "the local authority "or "new town authority" mean.
Baroness BIRK: In order to save time, since we have a long way to go, I have just said that I will look at this again. I hope that noble Lords opposite will be satisfied with that.
Lord FOOT: Before the noble Baroness takes it back for consideration, may I say from these Benches that we shall seek every opportunity of trying to support the Government over this Bill. There may be many occasions when we shall be unable to do so, so I should like to seize this opportunity to say that it seems to me that, although I fully understand the wish to shorten this definition clause, looking at the two together, setting it out in extenso as has been done in this clause is rather more understandable to the layman than the way in which the thing has been compressed in the alternative which is offered by this Amendment. Therefore I hope the noble Baroness will be able to consider that aspect of the matter, and it may well be she will eventually come to the conclusion that the original version represents the better drafting.
Lord SANDFORD: We have registered the point, I think, and therefore I beg leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
3.9 p.m.
Lord ABERDARE Lord ABERDARE moved Amendment No. 1:
Page 1, line 10, after ("England") insert ("and Wales")
The noble Lord said: I beg to move Amendment No. 1. In order to meet the point made by the noble and learned Lord and avoid being repetitious, I should like to couple Amendment No. 3 with No. 1. My noble friend Lord Balfour has put down a similar Amendment, which is No. 3. It may well be that this ties in with other Amendments of his, but so far as I am concerned Amendments Nos. 1 and 3 were put down specifically

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for the purpose of exploring the Government's reasons for treating Wales differently from England and Scotland. For that reason, I put down these Amendments rather than pursuing the matter by putting down innumerable consequential Amendments which I should have done had I been anxious to press this matter. It is really only in an endeavour to get some information from the Government that I move Amendment No. 1.
We have never had any real reason given by the Government as to why, in the case of Wales, there should be a Land Authority, while in England and Scotland the provisions of this Bill are envisaged as being carried out by the local authorities. In an endeavour to see what was in the Government's mind, I went to what I thought was the most authoritative source in this Chamber, which was the speech made by the noble Baroness, Lady Birk, during the first of our two Second Readings. There I found her in full praise of the local authorities and giving many reasons why the functions should he given to local authorities. This was the debate on 4th August, at col. 1319 of the Official Report. The noble Baroness said:
"If you want to use a pair of scissors you need two blades for it to work. Planning is one blade, ownership the other. The marriage of planning and ownership is not a new idea."
This argued strongly in favour of the local authorities. The noble Baroness went on to speak of democratically elected authorities who should carry out these functions and said that a key advantage of making use of local authorities is that we can build on what is there. All this was in praise of local authorities which were carrying out the functions in England and Scotland, and not a word of justification for setting up a Land Authority in Wales in contradiction to all she was giving such kind words to.
On that occasion, the noble Baroness, Lady White, sought the reasons why Wales should be treated differently, and the noble Baroness, Lady Birk, said—and I am quoting from col. 1364:
"… because it is a much smaller area than the whole of England, it seemed possible to operate through a Land Authority."
That would seem to imply that the Land Authority was the better means of dealing with this matter but it was only because
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Wales was a smaller area and it was practically possible in Wales that it had not been applied to England; but that, again, seems to contradict what she was saying before about the merits of leaving it to local authorities. So I am left in complete confusion. I cannot understand for a minute why there should be a Land Authority in Wales and why in England and Scotland the matter should be left to the local authorities. We have never, as I have said, had a straightforward reason. It has been said that this is a more flexible way and the Government are being flexible in treating Wales differently. I am all for treating Wales differently if there is a good reason for doing so. Flexibility is an admirable virtue, but it surely has to be justified and there would have to be good reasons why Wales should be separately and differently treated.
Certainly in conversations I have had with people in Wales the only explanation that has been given is either that the Secretary of State for Wales did not consider that local authorities were capable of handling these responsibilities, which I can hardly believe would have been the Government's reason; or, much more likely, that it was in line with their proposals for an Assembly in Wales. Some functions had to be found for the Assembly and here was a chance to set up a body which eventually could be put under the general guidance of a Welsh Assembly. Certainly this has a certain verisimilitude if we are to believe the Paper that was leaked from the Cabinet Committee in which it was allegedly said that for Wales the picture is of a system devolving wide Executive powers but within a constitutional framework much more akin to a major regional authority and in much more evident and practical subordination to Westminster. If that is the Government's thinking on the Welsh Assembly, then of course the Land Authority fits neatly into the picture despite the fact that it is completely incompatible with all the other protestations that have been made from the Government side about the merits of leaving this matter to local authorities. So I hope that the Government will be able to give us a rather more solid justification for treating Wales differently.
May I go on to ask one or two specific questions because, since the Land

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Authority has become more or less accepted as inevitable in Wales, a number of conversations have been taking place between the Government and the local authorities. The Government have sought to appease some of the annoyance of the local authorities at being overlooked in this case in Wales, by saying they will devolve certain powers from the Land Authority on to the local authorities and the local authorities will act as agents for the Land Authority. I should like to put three fairly specific questions on this matter of the agency agreements between the Land Authority and the local authorities. First, does the Land Authority have to give separate approval for every transaction that is undertaken by an agent authority, or will the Land Authority give an agent authority general directions and then allow the local authority to proceed on its own initiative?
The Welsh Office recently issued a document, dated October 1975, on arrangements in Wales in connection with the Community Land Bill. That document seems to envisage the need for separate approval by the Land Authority of each proposed acquisition of land by a local authority under agency powers. Paragraph 7 of the document says:
"Agency arrangements will not involve delegation of executive responsibility";
and paragraph 8:
"The identification of such sites for acquisition could hardly be delegated to an agent authority".
From those two quotations it would appear to me that it is the Land Authority which will decide what land is to be bought and all that will be left and delegated to the agent authority will be the mechanics of purchasing that land. I wonder also whether this will apply to the disposal of land. Will the local authority under its agency powers be able to make its own decisions as to the disposal of this land, or will it have to seek in every case the approval of the Land Authority for Wales? That is my first question.
The second is that there may be cases of local authorities who find themselves unable to accept an agency arrangement or, having accepted such an arrangement, are unable to carry it out. In such circumstances we have been told the Land Authority could take over responsibility
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from the agency authority. The assurance I should like to ask for is this. If the agency were a county, before the Land Authority took over that agency would it be offered to the appropriate district? Or, in the case of the district being the agent, would a new agency first be offered to the appropriate county? This would seem to be a straightforward and sensible way of proceeding: that if one or other, the county or the district, for one reason or another is not able to accept an agency arrangement, then the appropriate district or county that could take it on would have a chance before the whole responsibility was taken back by the Land Authority.
The third and last question I should like to ask is this. Although it is clearly implicit in what has been said, I should like a further absolute assurance that in a case of an agency arrangement being made between the Land Authority and a local authority the full cost of carrying out the functions under this Bill would fall on the Land Authority itself and not on the ratepayer. I beg to move.
3.20 p.m.
The Earl of BALFOUR: I should like to take this opportunity to support my noble friend. At the same time, I should also like to thank the noble Baroness, Lady Birk, for having sent me various papers on the Community Land Bill in connection with Wales. In the general principles issued by the Government—and it is something which immediately causes concern—is this statement:
"Possible disputes between a local authority and the Land Authority as to who would acquire land would be settled by the Secretary of State."
Immediately, we realise that this kind of problem could arise. If your Lordships will look at Schedule 4, paragraph 7, on page 59, that indicates that disputes have already been foreseen by the Government.
My noble friend has already referred to paragraph 8 of this document but I should like to take it a little further, purely on the grounds of my experience in the past as a county councillor in Scotland. It states that:
"The Land Authority shall have power to buy land which they consider suitable for development. The identification of such sites for acquisition could hardly be delegated to an agent authority."
As I stressed at Second Reading and can only stress again, it is very important that

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before any land is acquired by any form of local authority or even by a statutory undertaker it should be reasonably well surveyed, and a determination made, that that land can be supplied with all services—water, sewerage, drainage, electricity and whatever else may be involved. To divorce planning, which is clearly the indication here, from land acquisition seems to me to be very serious indeed and is something about which I feel absolutely convinced the Government are wrong.
The paragraph continues:
"Any purchase of land must also have regard to the authority's budget so that the Land Authority will need to take into account from the outset the financial viability of any development in mind for sites to be acquired."
Before anybody goes ahead and buys land, it is most important to make quite certain that it is wholly suitable for the development that is anticipated. I should have thought that in that field no better people exist than the local authorities in Wales. Again, I should like to refer to paragraph 12, which states:
"Consideration is being given to the future relationship between the Land Authority and the proposed Welsh Assembly. Though the Government have yet to take final decisions on a detailed devolution scheme, it is possible that the Assembly might be given powers in the field of housing and planning."
This alarms me even further.
When your Lordships' House discussed the local government Acts, as they are now, of 1972 for England and 1973 for Scotland, it was realised by all sides how very important it was to leave the function of housing at district level. In the case of Wales it is now, perhaps, to be taken out of the hands of the district council—it is not even to be left in the hands of the county council—and put into the hands of an even more remote body, the Welsh Assembly. I must be fair to the Government, for they state:
"However, the Government have made clear their intention of issuing a White Paper setting out detailed proposals on devolution in the autumn."
I do not believe that that has yet come out.
May I now refer to various clauses in the Bill and take extracts from them in respect of the Land Authority which is proposed to be set up for Wales. I will begin by asking your Lordships to look at Clause 16 on page 15, which states that
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for the whole of the United Kingdom, except for Wales:
"(1) There shall be a land acquisition and management scheme for the area of each county authority.
(2) The scheme shall be prepared, and from time to time revised, by all the authorities in the area of the county authority acting jointly.
(3) The scheme shall be for the performance by each of the authorities in the area of the county authority of the following functions—
(a) the acquisition by those authorities of land with a view to"
development. I am sure that this is something which should apply to the whole of the United Kingdom if this Bill becomes an Act. However, if your Lordships will turn over the page you will see that subsection (12) says that:
"This Section shall not apply in Wales …"
Clause 17 deals with general duties, and subsection (1) reads:
"In exercising their functions … every authority shall have regard to—

(a) the desirability of bringing development land into public ownership, … and

(b) the desirability of securing the proper planning of their area."

Subsection (2) states:
"In considering whether any land is development land, an authority shall have regard to—
(a) the provisions of the development plan …"
and, in paragraphs (b) and (c), to planning permission and any other considerations. Subsection (3) reads:
"In considering whether any land in Wales is development land, the Land Authority for Wales shall (except in a case where planning permission is in force for the carrying out of relevant development on the land) consult the council of the county, and that of the district, within whose area the land is situated."
I should have thought that one of the most important things to be considered was whether planning permission had been granted.
Subsection (2) of Clause 18 says that:
"It shall be the duty of all the authorities … to arrange between them for all outstanding material interests in land which is needed for the purposes of designated relevant development to be acquired by one of those authorities (including a local authority in Wales whose area includes the land)."
Unfortunately, if we turn over the page, the Bill says:
"An order under this section—
(a) shall not he made before the land acquisition and management scheme for the

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area of the county authority has been prepared;"
except, again, that subsection shall not apply to Wales. So Wales is left out in the cold. I am greatly concerned about the separation of the whole region of planning.
I should like briefly to refer to Clause 41. There it says:
"Except with the consent of the Secretary of State, a principal council shall not dispose of a material interest in any land."
So far as I can see, that means disposing of it even to the local authority, or vice versa; and in the case of Wales, with a local authority housing development which has been completed, I am wondering whether or not in future local authority tenants there will be paying a rent to the local authority for the house that the local authority built, and another sum, perhaps somewhat like the ground rent that exists in England, I understand, to the Land Authority. There is certainly nothing clear in this Bill in that respect.
Then Clause 44 says:
"The Secretary of State may direct a local authority or the Peak Park Joint or Lake District Special Planning Board to dispose of … any land …".
But, so far as I can see, not land connected with Wales. Then, if we turn to Clause 47, dealing with reserve powers, we sec there:
"The Secretary of State may act under this section in a case where it appears to him expedient that an authority should cease to be responsible for exercising"—
any function under any Act. The Secretary of State may by order transfer any such function to himself or to another authority or to a body corporate. Yet, once again, if we turn over the page we find the words:
"This section shall not apply in Wales."
In other words, these special powers of the Secretary of State clearly do not apply in Wales. Schedules 5 and 6 again do not apply to Wales, and whereas I feel strongly that the local authorities, with their elected councillors and with all the local knowledge of those elected councillors, should be dealing with very complicated procedures of planning and land acquisition, to create a Land Authority for this relatively larger area of Wales and to have that handled by a mere 6 to 9 people is, as I said at Second Reading, the most perfect example that I have ever come across of sending a boy to do a man's job.
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May I ask your Lordships now to look at the Marshalled List of Amendments—
Lord HENLEY: May I interrupt the noble Earl for just a moment? Do I understand that he is speaking not only to Amendment No. 2 but to all the other fifty or so Amendments which are tabled in his name?
The Earl of BALFOUR: I want to save time but I want to sense the feeling of your Lordships' Committee. I must make it perfectly clear, I think, because Amendments start to fall fairly quickly, that there are many other Amendments on which I have separate points that I should like to raise, but at this early stage I think it would be as well for us to be clear on exactly what is happening to Wales which is creating an entirely different situation from anything else that exists in the United Kingdom. I am most concerned. I have no axe to grind; I have no connection with Wales. I am putting this forward from sheer local authority experience. I do not wish it to be considered as a political point or because I happen to be on the Back-Benches. That has nothing to do with it. I am interested purely from the point of view of efficiency and management of what I consider so strongly to be a field that, to a great extent, should be managed by a district authority in England, and the fact that things that require so much local knowledge are being handled by this very remote body, causes me the greatest concern.
I will not waste your Lordships' time but I am going to put forward the basic ideas at this time. I should like to refer to Amendment No. 43, which completes my argument, and also briefly to explain why these Amendments are tabled and what is being done.
The LORD CHANCELLOR: I wonder whether it would be convenient for me to suggest that at this stage we should confine the debate on Amendments Nos. 1 and 3 to the question of the need and desirability of a Welsh Land Authority, and then perhaps at a later stage deal with the Amendments tabled by the noble Earl, Lord Balfour, suggesting that it would be to the benefit of Wales to enjoy the arrangements existing in Scotland. With great respect to the noble Earl, I think if we keep

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those matters separate we may have a tidier debate.
The Earl of BALFOUR: I am most grateful to the noble and learned Lord the Lord Chancellor, and I should like to accept his suggestion; but I should like to support my noble friend Lord Aberdare in his Amendment as well.
Lord FOOT: I wonder whether I might make one or two observations of a more general nature than those which have fallen from the lips of the noble Lord, Lord Aberdare, and the noble Earl, Lord Balfour. I confess to being bewildered by some parts of this Bill and how it is going to work out in relation to Scotland and to Wales. When we come to the Question, That Clause I shall stand part of the Bill?, I would like to say a word or two about Scotland, but for the moment I will confine myself to Wales. The general observation that I want to make is this: I think we are getting ourselves into great difficulties in this Bill because here we are carrying out a great radical reform of the land law, not only of England but of Wales and of Scotland, and we are carrying that radical and very detailed reform through before we have made up our minds upon the problems of devolution of power of Government to Scotland and to Wales.
In the past in this country we have often got wrong our priorities in timing. I suppose the most remarkable example of getting wrong our order of priorities in timing was the way in which we set up a Royal Commission to consider the whole problem of the reform of local government prior to the setting up of the constitutional Commission to consider the problem of devolution, and in particular, of course, devolution to a regional level of government. It would have been logical to do it the other way round, or to have done it all at the same time. In this Bill, I am wondering whether we are not making that same error: that is, we are setting up in Wales a structure of a particular kind, with a Land Authority and then the local planning authorities below it, each performing different functions. We are setting all that up before we know what the Government have in mind, except in the most general terms, for devolution to
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Wales. What we do know is that the Government have in mind a form of what is called "executive devolution". We know that much, but we do not know what the relationship is to be between that Welsh Assembly exercising those executive functions and the local authorities below it. We do not know whether the local authorities will be subordinate to the Welsh Assembly, or whether they will still be responsible to Central Government at Westminster and Whitehall. None of these things do we know, yet here we are creating a very detailed system of reform of the land law, and conferring precise powers upon the Welsh Land Authority and upon the local authorities.
The question I want to ask is this: in carrying through this great measure of change, are not we pre-empting decision about the form devolution will take when it is carried through in Wales? I should have thought it would be very much more satisfactory if the Government had first made up their minds what measure of devolution is to be conferred on Scotland, and what measure of devolution is to be conferred upon Wales. Then, the Government could have considered whether it would have been appropriate, for example in the case of Wales, to confer on the Welsh Assembly the powers now being conferred on the Welsh Land Authority. We are doing this the wrong way round. I do not want this Bill to go wrong, but I am afraid that we are doing it the wrong way round. We should make these decisions in the field of land law, before making the vital decisions as to what is to be the future relationship for a long time to come between the Welsh Authority, or call it what you will, and the Welsh local authorities, otherwise we are courting disaster. I suppose it is now far too late to hope that the Government might hold back this Bill in order to deal first with the problem of devolution, but I certainly think that would be a wise course for the good government of this country in the future.
Lord STRABOLGI: For the purpose of hearing the Statement at present being made in another place, I beg to move that the House do now resume.
Moved accordingly, and, on Question, Motion agreed to.
House resumed.

ABORTION
3.44 p.m.
Lord WELLS-PESTELL: My Lords, with your Lordships' permission it might be convenient if I were now to repeat a Statement on abortion made in another place by my right honourable friend the Secretary of State for Social Services. The Statement reads as follows:
"With permission, Mr. Speaker, I should like to make, in association with my right honourable Friends the Secretaries of State for Scotland and Wales, a statement on abortion. Since March of this year a Select Committee has been considering my honourable Friend the Member for Glasgow Pollok's Abortion (Amendment) Bill. The Committee made nine recommendations in its Third Special Report to the House on 5th August most of which follow up proposals made last year by the Lane Committee on the Working of the Abortion Act. I am glad to tell the House that the Government accept in principle all the Select Committee's recommendations.
"My intentions, announced earlier this year, to strengthen the safeguards which apply to abortion in the private sector are similar to those recommended by the Select Committee. Action has already been taken following consultation with the medical profession with a view to requiring private nursing homes which concentrate on abortion to give me an assurance concerning the total fees charged to patients. Assurances have also been sought from all approved nursing homes about financial arrangements with referral agencies. Only those private nursing homes with adequate facilities will be authorised to carry out terminations of pregnancy after the20th week. I have also written to those nursing homes which concentrate on abortion asking for information on the number of foreign patients treated during the 18 months to 30th June 1975, and I shall be seeking such information from all approved nursing homes at quarterly intervals in future. I am reviewing the arrangements which are made by the nursing homes for the reception, counselling and after care of foreign patients on the lines proposed by the Select Committee and I will
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require changes in these arrangements where necessary. The Committee recommended that the Health Ministers should produce a list of approved bureaux and refuse to approve clinics which accepted patients from unlisted bureaux. We are proposing to implement this change shortly and application forms have been issued to bureaux and agencies. I am, moreover, concerned to ensure that adequate counselling facilities are available for all women who indicate that their pregnancies are unwanted and a draft paper as proposed by the Select Committee giving guidance on counselling will be circulated for consultation to bodies representing the medical, nursing and social work professions.
"In the National Health Service the Select Committee's recommendations that terminations after the 20thweek of pregnancy should be carried out only in hospitals possessing appropriate facilities, including resuscitation equipment, has been accepted and discussions have been held with Regional Medical Officers who will be responsible for the implementation of the recommendations. I have issued a circular to health authorities on the Report of the Peel Advisory Group on the Use of Foetuses and Foetal Material for Research asking for the adoption of their recommended Code of Practice where not already in use and I put a similar requirement on private nursing homes.
"Some of the other recommendations of the Select Committee will require amendment of the Abortion Regulations 1968. My Department is undertaking a study of the procedures and forms set out in the Regulations as proposed by the Select Committee and in the light of their report I shall be considering the whole question of the procedure for the certification and notification of abortions. Another recommendation which would require amending the Regulations is to allow the disclosure to the General Medical Council of information taken from the notification to the Chief Medical Officers of the Health Departments. This recommendation is accepted and the Regulations will be amended to permit disclosure to the President of the General Medical Council at his

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request. A further change in the Regulations recommended by the Select Committee is designed to ensure that the doctors who certify that the conditions of the Abortion Act are met in a particular case should examine the patient. The Regulations will he amended to ensure that a question asking whether the patient has been seen and an examination has been carried out will be put on all forms.
"I think the House will be glad to know that action is being or has already been taken on all the recommendations made by the Select Committee in their Third Report and on many of the major recommendations of of the Lane Committee. I have issued guidance on day care systems to health authorities and hope to authorise day care services in some private clinics with a record of high standards. The most important preventative action which the Government have taken is to introduce as part of the NHS a comprehensive family planning service which started to function fully this summer. I can only regret that this was not introduced a decade or more ago.
"During the Second Reading of the Abortion (Amendment) Bill in February 1975 a commitment was given by the Government that if the Bill were withdrawn the Government would propose the establishment of a Select Committee to examine and report on the proposals contained in the Bill: and would also propose its re-establishment for the 1975–76 Session if this were necessary. In the event the House did not allow the Bill to be withdrawn but instead committed the Bill itself to a Select Committee. Under this procedure the Bill and the Select Committee lapse at the end of this Session. The Government feel that the House, in the light of the Committee's Reports already published and of this Statement, should be given an opportunity to decide whether the Select Committee should be reestablished as the Committee itself has requested, and a Motion will be tabled early in the next Session."
My Lords, that concludes the Statement of my right honourable friend the Secretary of State.
Lord ABERDARE: My Lords, I am sure the House will be grateful to the noble Lord for having repeated that Statement, and I should like to thank him for it. It is a very detailed Statement, and it will require a lot of careful study before we can say very much about it, hut the noble Lord will remember that it was the last Conservative Government which established the Lane Committee and we certainly welcomed the recommendations that it produced. Some of those recommendations have now been followed up and reinforced by the Select Committee, and certainly T very much welcome the Government's intention to accept those recommendations, especially to strengthen the safeguards for women who undergo abortion both in the private sector and in the National Health Service. This is a subject which arouses a great deal of feeling among individuals on all sides of the House, but I am sure that for the present we are wise to continue to follow the advice we are given by these expert committees on the administration of the present Act.
Lord AMULREE: My Lords, I, too, should like to thank the noble Lord for repeating the Statement, which is a very important one. I have very little to add to what the noble Lord, Lord Aberdare, has already said. I hope that the counselling will be available to patients in both the private sector and the public sector, because I think all women need help and counselling in these matters. I was wondering whether it would be possible for the medical officers of health departments to tell the local health authorities some of the figures which come to them showing the numbers of abortions which occur in their areas. The only other point which I should like to make is that 1 am very pleased that a Motion is to be introduced in order to continue the Select Committee during the coming Session.
Baroness GAITSKELL: My Lords, may I ask the Minister whether it would not be true to say that this Select Committee was completely unnecessary it has not produced anything that we did

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not know already, or that is new, after the Justice Lane Committee sat. It has produced nothing. The Government's weakness for spawning Select Committees and Commissions is simply a waste of money. The counselling, one of the recommendations of this Select Committee, has been done and is being done by the Family Planning Association and by the Brook Advisory Centres. When Sir Keith Joseph was the Minister of Health he put family planning on a very good basis and was very far-seeing. It seems to me that another Select Committee simply to produce a state of affairs which will deal with some abuses by private nursing homes is completely unnecessary.
Lord HAILSHAM of SAINT MARYLEBONE: My Lords, before the noble Lord rises to answer that, is it not correct that the formation of a Select Committee of either House is a matter for that House and not for anybody else, and would it not, therefore, be inappropriate for your Lordships to comment upon it?
Lord WELLS-PESTELL: My Lords, I am grateful to the noble and learned Lord, because I wanted to make precisely the same comment and observation myself. This is a Statement about what has been done by my right honourable friend the Secretary of State. I had hoped that your Lordships would be prepared to accept it and leave it there. I am grateful to the noble Lord, Lord Aberdare, for his comments and I will certainly convey the comments of the noble Lord, Lord Amulree, to my right honourable friend. In view of the Statement, I do not think I can take this matter any further.
Baroness GAITSKELL: My Lords, may I apologise to the House for being out of order? I was ignorant of the fact that we cannot comment on a Statement of this kind, and if I had known it I would not have done so.
Lord WELLS-PESTELL: My Lords, I would hate my noble friend to feel that she was not entitled to comment on a Statement. Every one of your Lordships is entitled to comment. I think what the noble and learned Lord said, which I would have said if he had not done so, is that it is not wise for us to comment
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on the practice and, perhaps, the right of another place.
Baroness SUMMERSKILL: My Lords, may I ask my noble friend what principle governs the Government's reluctance to terminate the pregnancy of a foreign woman in the private sector, provided that the same conditions apply as for a British woman?
Lord WELLS-PESTELL: My Lords, I think there is a responsibility upon us to see that a person coming over from another country is treated in precisely the same way as our own nationals, and if she is going into a clinic where they specialise in abortion we ought to be satisfied that the standard there is of the highest.
Lord GARDINER: My Lords, may I ask my noble friend whether this Select Committee has heard a single one of the very many women's organisations which have asked to give evidence before it?
Lord WELLS-PESTELL: My Lords, I do not have before me a list of the bodies, individuals or organisations which the Select Committee heard.
Viscount BARRINGTON: My Lords, in view of the fact that so many comments have been made, against the advice of both Front Benches which seemed to me in this case very sound, surely this is not a matter to be debated in your Lordships' House at the present moment. It should be left until we have heard the Motion which is to be introduced in another place, and leave them to debate it. We will, I hope, have ample opportunity to debate this question later, and I hope I shall be allowed to intervene in that debate then as I did seven years ago, when this subject was discussed here. I do not propose to do so now. As a Back-Bench Liberal with a minority point of view, who is perhaps better fitted than others to represent the point of view of a "foetus", I should like strongly to support the proposal put forward that matters for the other place are matters for them, and matters for your Lordships' House are matters for us. Having said that, I will sit down and say no more for the present.
Lord PANNELL: My Lords, there seems to me to be a misunderstanding about the Select Committee. Following

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the Second Reading of Mr. White's Abortion (Amendment) Bill, the Government agreed to set up a Select Committee. There was a great deal of dispute about that, because we had just had the Lane Committee (referred to by the noble Lord, Lord Aberdare) and the Department itself was in the process of bringing Amendments in the light of that Report. At the present time there is no Bill before the House of Commons, and the procedural Motion is whether a Select Committee elected in another Session should be continued. I agree entirely with what the noble and learned Lord, Lord Hailsham of Saint Marylebone, has said about its setting up, but it would be a misunderstanding to think that this is another Select Committee; it is the continuation of a quite useless one.
Lord PLATT: My Lords, may I just for clarification ask one question? Most of us have not yet had the opportunity of reading this Statement, and it may be that I did not hear the necessary information. Could the noble Lord tell us what is to be disclosed to the President of the General Medical Council, and whether this will include doctors' names or patients' names or both?
Lord WELLS-PESTELL: My Lords, as I understand the situation, the President of the General Medical Council will be entitled to ask for information relating to abortions which have been undertaken by members of the medical profession.
Lord PLATT: I beg your Lordships' pardon, but that does not answer my question. Will it include the names of patients or doctors?
Lord WELLS-PESTELL: My Lords, I really do not know. But I should have thought that the information may well do so, bearing in mind that special precautions have been taken to safeguard privacy by disclosing it only to the President.
Lord SUDELEY: My Lords, may I ask the Minister whether consideration might be given to the elimination of sex education from schools, as a very satisfactory method of reducing the rate of abortion?
Lord WELLS-PESTELL: My Lords, I do not think that really comes within the terms of the Statement which I made this afternoon.

COMMUNITY LAND BILL
4.3 p.m.
House again in Committee on Amendment No. 1.
Lord SHINWELL: I regret that I was absent when the noble Lord, Lord Foot, began his speech, but I had to receive a telephone call. I had the opportunity of listening to the noble Earl, Lord Balfour, and I am bound to say that I not only sympathise with his point of view but entirely agree with it. I presume that that was the view taken by the noble Lord, Lord Foot. The fact is that the Government have their priorities all wrong. We had an example the other day which illustrates the point. We were informed that the Government proposed to set up a Royal Commission to deal with affairs associated with the National Health Service but that a fundamental issue, one of extreme importance, was to be excluded from the deliberations of the proposed Royal Commission. That struck me as extraordinary, and I ventured to ask a question about it. I received of course a Ministerial answer which I regarded as wholly unsatisfactory. Now we have another situation not unlike the one to which I have just referred.
The Government have decided to proceed shortly (how shortly we have not been fully informed) with the subject of devolution. Of course I have not been furnished with intimate details of it; nor has anybody in either your Lordships' House or another place. All we know is that the Government have some vague idea about the creation of an Assembly in Scotland and another Assembly in Wales, presumably to deal with domestic affairs. The term "domestic" can range very widely. It is subject to a variety of interpretations.
Here is the situation: we are to deal with the subject of the acquisition of land. I put it very simply. Of course even that statement is surrounded by a number of considerations, speculations, conjectures and so on. There is the question of administration; how it is to be implemented and the like. The Government

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have pre-empted, as the noble Lord, Lord Foot, rightly said, considerations involved in devolution. Indeed they have come to some conclusion—that is what the subject of the debate is about—on the acquisition of land in Wales and Scotland. It seems to me all wrong, farcical, absurd, just an utter nonsense.
Therefore, the Government should be asked to do one of two things: either to give an assurance that the proposition now before the Committee should, as it is, be debated, and that no decision should be reached until the subject of devolution comes before another place and subsequently is transferred to your Lordships' House for consideration. We can then discuss all these matters pertaining to administration, what the Assemblies in Wales or Scotland respectively are going to be called upon to undertake and so on. There should be an assurance of that kind, or they could decide to accept the Amendment of the noble Earl, Lord Balfour, and agree that Scotland should have a regional organisation set up—because I understand that that is the proposition—to deal with this question associated with the acquisition of land.
When subsequently we decide about devolution, we may have to expunge the decision reached this afternoon, That of course ought not to present any Government with any difficulty. It happens over and over again. In our political history it has happened far too often. In other words, a Government have come to a decision only to regret it subsequently. It is part of our political history. I am bound to repeat what I ventured to say at the outset: the Government have their priorities all wrong. If they have decided about devolution in principle. then they should not have introduced something that is bound to be considered when devolution is implemented. It is as simple as that.
How are we going to deal with this matter? I suggest that the Government should be told what to do; namely, to accept the proposal of the noble Earl, Lord Balfour. They may dislike it, but it is the only decent thing to do in the circumstances, and I advise it accordingly.
Lord HARMAR-NICHOLLS: The noble Lord, Lord Shinwell, said almost what I wanted to say, which means that I can be brief. He summed it up absolutely:
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the Government have their priorities all wrong. All I ask the noble and learned Lord the Lord Chancellor to do, if he can, is to clear up the position regarding the comments of the noble Lord who spoke from the Liberal Benches. I thought he made an unanswerable case when he said that if we are to have devolution, anything applying in this Bill should be delayed until we know what is to happen to devolution in Wales and Scotland. But the noble Lord went on to say that it is too late for the Government to withdraw this Bill in order for that to happen. I ask the Lord Chancellor to say that it is not too late and that the Government could withdraw the Bill. Indeed, it may be desirable for them to withdraw it. In any event, it would be good to have it clear, on the authority of the Lord Chancellor, that the Government could withdraw the Bill if they so wished.
Lord STANLEY of ALDERLEY: Do the Welsh district councils like the idea of a Welsh Land Authority? Is it true that there was a certain amount of estrangement between the district councils and the Secretary of State for Wales over this matter? If so, has the breach been healed? Otherwise I do not see the scheme working well, if the Government are going against both the district councils and the individual.
4.12 p.m.
The LORD CHANCELLOR: May I first make the assertion that the Government certainly have not missed or forgotten their priorities? They attach priority to the importance that the principles underlying the Community Land Bill should be given effect to as soon as the legislative procedures are possible and are achieved, and I will come shortly to the implications of the link between it and the devolution proposals, which are still under discussion. There is no question of withdrawing the Bill and I hope I will be able to persuade even my dear and noble friend Lord Shinwell of the rightness of what I am submitting.
I turn, first, however to the basic question which the Committee is debating; namely, the case for the Land Authority for Wales. Naturally this question was considered with great care by the Government before the White Paper was issued and since, and the view of the

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Government is that there is a clear case, from the point of view of practicality above all, for the existence for Wales, with its special conditions, of a Welsh Land Authority. The fact is that conditions in Wales justify and call for a different system from that which is to be applied to England and Scotland. When the appointment of a Secretary of State for Wales was established this was in itself a recognition of the fact that Wales is entitled to look for uniquely Welsh arrangements where the special circumstances in Wales justify this. And it was an inevitable consequence, and one indeed which was welcomed in Wales, that in some matters Wales would be different and would be differently treated. In the case of the Community Land Scheme, the Government have recognised the advantage of—and the Bill gives effect to it—a system which recognises that the compactness of Wales permits a unique solution to be adopted which was quite reasonably not regarded as appropriate in the other parts of the United Kingdom.
In seeking the best and most practical system for Wales, the Government have sought to do two things; first, to make the best use of what already exists and, secondly, to create in the Land Authority for Wales a body capable of giving a purposeful central drive to the new scheme and of ensuring that its objectives would be achieved through Wales as quickly as possible. What exists at present are, of course, the local authorities and the new town corporations. Both will have important new roles under the Community Land Scheme. The powers of the local authorities to acquire land and to develop it for their own purposes will continue and are not affected by the proposals in the Bill. And lest any suspicion may exist that it should be thought to be influencing Government opinion, it would be quite wrong to infer that the Government's proposals reflect any lack of confidence in or alleged inadequacies in Welsh local authorities. It is true that local authorities in Wales would, as in England, have different capacities to undertake the scheme quickly. Many of them have already carried out land assembly schemes promoting compulsory purchase orders for this purpose, though these are generally on a smaller scale than the new system will require.
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What the Bill proposes for Wales is a flexible system which we believe will combine the advantages of a central organisation able to operate purposefully throughout Wales with making the maximum use of the local knowledge, skill and experience of local authorities, while at the same time fully involving the local authorities as planning authorities in securing the positive planning benefits which we believe the Community Land Scheme will permit. In that way the benefits will be introduced through Wales in the quickest and most complete way. Local authorities will be involved in the scheme in at least three ways. First, the Bill provides for four members of the Land Authority to be appointed after consultation with organisations representative of Welsh local authorities. Secondly, the Land Authority will be empowered to enter into agency arrangements with local authorities, and to that I will come shortly in the light of the questions of the noble Lord, Lord Aberdare. Thirdly, local authorities as planning authorities will work very closely with the central body in operating the scheme in the interests of positive planning.
Discussions have taken place with Welsh local authority associations and whatever resistance there may have been initially—in reply to the intervention of the noble Lord, Lord Stanley of Alderley—there is an atmosphere of willingness to co-operate now prevailing in regard to these matters. But, as I say, discussions have taken place with the local authority associations concerned about the form which agency arrangements might take and further discussions will be held when the Authority has been established. Working parties have been set up on a county basis, involving both county and district councils, to review the local authority manpower situation in each area in relation to the various functions which will have to be undertaken by the Land Authority and to assess the willingness and capacity of each authority to undertake an agency function in part or in full for some or all of the duties which will be involved. The Government have received a report on these studies—for which they are grateful—from the Welsh county councils. The objective is that the agency arrangements shall be real and efficient. They cannot, of course,

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detract from the overall responsibility and the central role of the Land Authority for the operation of the scheme. They can, however, be developed in the light of experience.
The merits of these arrangements and of using local authorities as agents—and I did not apprehend any opposition to that idea, at any rate, in the speech of the noble Lord, Lord Aberdare—are these: first, the Land Authority will want and thus will have a local presence in all parts of Wales. Secondly, local authorities can help to get the scheme working quickly. Thirdly, it is desirable to involve local authorities to secure cooperation between them and the Land Authority. As I have said, details of the arrangements are still being worked out in the way I have indicated. We wish to leave as much discretion as possible to the Land Authority and we do not want local authorities to have to recruit staff who could be more effectively employed by the Land Authority. Agency arrangements will not involve delegation of executive responsibility to local authorities. Actions will be in the name of the Land Authority and it must retain responsibility for the operation of the scheme and be answerable to the Secretary of State, who will in turn be answerable to Parliament.
The questions which the noble Lord, Lord Aberdare, asked were, first, whether the Land Authority will have to give separate approval for each transaction by the agent local authority when the local authority is the agent. As I have indicated, the Land Authority will be in charge of the scheme, the local authority will be its agent and the relationship will be that of principal and agent. The same arrangements will apply in the field of disposals. The Land Authority must be clearly seen to be in charge of the scheme if there is not to be doubt and confusion. It will be under the control of the Secretary of State, through directions, and he will be answerable to Parliament for its undertakings.
Land acquisitions and disposals will affect the Authority's finances and this is one of the reasons why it must be able to control day-to-day acquisitions and disposals, but it will work throughout, we believe—and we see no reason to anticipate great difficulties in this—in close harmony with local authorities in what it
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does. In respect of public inquiries in regard to compulsory purchase orders, they will fall to be defended by the Land Authority and it is right that that should be so and should be a consequence flowing from the responsibility of the Authority for deciding what land to buy.
I was asked what is the position if local authorities are unable or unwilling to accept or carry out agency functions. If the Agent is a county and there is inability or refusal at that level, it will be offered to the district, and vice versa. The Authority will make agency arrangements with whatever local authority will, in its view, be able to do the job. It is not anticipated that there will be refusal to co-operate. As to the costs of carrying out by the local authority of agency activities, they will be borne by the Authority and not by the ratepayer.
A question was raised with regard to the possibility that the Land Authority might be deemed to be an undemocratic institution. However, as I have said, the Secretary of State will be answerable for it and, to that extent at any rate, there will be public accountability through the watchdogs in the other place and in this House, to say nothing of the ever watchful eyes of the Press.
I come to the matters that were raised in regard to the link between these proposals and the devolution proposals which are now being actively worked upon by the Government, who have undertaken to produce a White Paper. May I assure the House that the Land Authority proposal and, indeed, the whole of this community land scheme stands on its own merits and that we do not believe that to go ahead with it now will pre-empt the devolution proposals. Indeed, our present thinking is that a resolution of this matter and the setting up of the Welsh Land Authority will fit in quite satisfactorily with the ideas which are being studied with regard to the role of a Welsh Assembly. The Assembly could well have powers in the fields of housing and planning which might usefully be linked with the responsibilities of the Land Authority at an all-Wales level and we see an advantage, indeed, in disposing of and finalising these community land proposals and, in Wales, the setting up of the Land Authority before the scheme of devolution for Wales matures. However, these are matters which will

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of course be considered in great detail when those fundamentally important proposals come before Parliament and after the publication of the White Paper. I should like to tell my noble friend Lord Shinwell that we do not regard the decision on this matter as pre-empting in any fundamental way the nature and extent of devolution of political responsibility to Wales.
Lest it may be thought that local authorities are being snuffed out of the scene by the appearance of this new and large political object on the horizon, it may be helpful to indicate how the local authorities in Wales will not be affected by the Bill's proposals. They will retain their continuing local planning functions. They will lose none of their existing land acquisition powers for planning purposes and they will still be able to buy land for public purposes such as roads, schools and houses. They will also have the power to buy land for a wide variety of private and mixed purposes such as housing and industrial sites and to acquire land to improve it for planning purposes. They will secure the same advantages as local authorities in England and Scotland, of being able to buy all this land net of development land tax during the transitional period and at current use value in the final scheme.
On a further financial point, Welsh local authorities will not lose from the scheme compared with the authorities in England and Scotland. A 60 per cent. share of surpluses on the land accounts of the Land Authority will be distributed to Welsh local authorities and the Government will, as elsewhere, take 40 per cent. Any surpluses on the accounts of Welsh local authorities who use their existing powers to acquire and dispose of land for private development will he treated in the same way as elsewhere; that is to say, 30 per cent. will be kept by the local authority concerned, 30 per cent. will be distributed among other local authorities and 40 per cent. will be kept by the Government.
Local authorities will be given a further measure of protection under paragraph 7 of Schedule 4 to the Bill by being given the status of statutory objectors if they wish to oppose compulsory purchase orders proposed by the Land Authority. These orders, like many other compulsory
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purchase orders, will come before the Secretary of State for confirmation, and he will be able to take into account any opposition from a local authority before deciding whether to confirm an order. The Land Authority itself, like all authorities, will be required to have regard to planning matters in carrying out all its responsibilities. The cost in terms, either of manpower or money, of the scheme in Wales, will be no more expensive, it is believed, than the comparable costs in England and Scotland of the arrangements prevailing there. We have been able to make comparisons on various bases and they all indicate that the Land Authority will be as cost effective as the arrangements proposed elsewhere.
I have taken a good deal of your Lordships' time in dealing with this matter in some detail. I have done this in response to the complaint—if that is the right word—of the noble Lord, Lord Aberdare, that these matters have never been fully explained. I trust that the explanations and assurances that I have given may satisfy the Committee that the Land Authority for Wales is the best means of securing what is proposed, and that to have a central body working in co-co-operation with local authorities in a flexible way, so that Wales as a whole benefits from the scheme, is the best arrangement for Wales. Accordingly, I hope that these Amendments will be rejected.
Lord ABERDARE: I am very grateful to the noble and learned Lord for his having taken so much trouble to answer my Amendment, but I am sorry to say that I found his arguments totally unconvincing when it came to the reason why there should be a Land Authority for Wales. The noble and learned Lord spoke of the differences in Wales. I am the first to agree with him that Wales is different, and that in certain circumstances it should be treated differently. But regarding local authorities, there is no difference whatsoever between Welsh local authorities and English local authorities. They have the same powers and duties, and they were reorganised under the same 1972 Local Government Act. The Welsh local authorities operate in precisely the same way as the English local authorities. Therefore in this respect there is really no difference, and it is, I believe, impossible, in regard to

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this Bill, to claim that different treatment is required for Wales from what is required for England.
The noble and learned Lord said, in terms of Wales being different, that he thought that Wales was compact; he spoke of the compactness of Wales. But if that is so, then he is arguing that everybody should have a Land Authority but that it is practicable only in Wales because Wales is compact. If that is so, the Government could have had Land Authorities for the English regions and for Scotland. I find the explanations given totally unsatisfactory. The difference in the treatment of Wales, and the fact that there is to be a Land Authority—rather than the matter being left to the local authorities—has naturally given rise to questions about what will happen when there is a Welsh Assembly. I have great sympathy with the point of view put forward by the noble Lords, Lord Foot and Lord Shinwell; if there is to be a Land Authority this raises all sorts of questions about the powers of a future Assembly. Like them, I think that these matters would be much better postponed until there is an Assembly. Perhaps at a later stage we can move an Amendment on that matter, but for the moment we can leave that for another day.
I am grateful to the noble and learned Lord for having at least given detailed answers to the three specific questions I asked. I will consider these answers. There is one other point I should like to make, although it would probably be better to return to it at a later stage. It concerns the costs of the whole operation. The noble and learned Lord assured us that it would be just as economical to work through a Land Authority as it would be to work through the local authorities; but I am advised that the estimated requirements of manpower, which have been arrived at by the county councils in conjunction with their district councils, are considerably less than those initially outlined by the Welsh Office. That would lead me to believe that it might be more economical to work through the county councils than through a Land Authority. I should like to return to that matter later. In the meantime, I beg leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
4.36 p.m.
Baroness BIRK Baroness BIRK moved Amendment No. 6:
Page 2, line 29, leave out from ("situated") to end of line 31.
The noble Baroness said: With the leave of the Committee I should like, in moving Amendment No. 6, to speak at the same time to Amendments Nos. 162, 164 and new Clause 27A. These Amendments are designed to correct a minor drafting error in the Bill. Subsection (8) of Clause 1 makes it clear that any reference in the Bill to an "authority" refers to that authority operating within their area, but the subsection goes on to provide that a reference to a given class of authority (for example, a reference to "local authority"), is also to be interpreted as referring to the authority of that class within whose area the land is situated. This general provision could produce unwanted effects in some provisions of the Bill; for example, Clause 26, dealing with the compensation payable when one local authority buys from another, and Clause 39, dealing with grants when a local authority buys from the Crown. Amendment No. 6 therefore deletes the words at the end of the subsection dealing with classes of authorities.
However, there is one place in the Bill where a provision of the kind at present included in the subsection is required for a specific purpose. This is in Clause 21, where subsection (6) requires an authority issuing a certificate to send a copy of that certificate "to the district council". It is clear, that, in this case, "the district council" must be interpreted as the district council in whose area the land lies; and Amendment No. 164 therefore inserts a new subsection (10) into Clause 21 on the lines of the words to be deleted from Clause 1(8). There is then a consequential Amendment in subsection (8) of Clause 21, the final words of which are now otiose in view of the general provision in the new subsection (10). Amendment No. 192 accordingly deletes them.
These are essentially drafting Amendments designed to overcome a defect in subsection (8) of Clause 1. This subsection restricts the exercise of functions by authorities to operations within their own areas. For some of the purposes of the Bill it was necessary, also, to provide that a reference to a class of authority (for

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example, to a district council or a county council) should be interpreted as referring to the authority in whose area a particular piece of land was situated. Words to this effect were accordingly included in subsection (8), but they turned out to have effects that were not intended; for example, Clause 39 gives the Secretary of State power to make grants to local authorities (a class of "authority") when they buy land from the Crown. We want this to apply whether the Crown land which is being bought is inside or outside the area of the particular local authority, but the second half of Clause 1(8), which it is proposed to delete, would have restricted the power to give grants only to cases where the land was in the area of the local authority. Similar considerations occur to Clause 26 dealing with the compensation payable when one local authority buys from another.
These Amendments accordingly delete the general reference to classes of authorities in Clause 1(8) and insert instead a provision in the clause where this point needs to he made. In short, it is really removing the words from a place where they do not strictly apply (or where, if they do apply, they are misleading), and putting them in the right place in the Bill. I beg to move Amendment No. 6.
Lord SANDFORD: I wonder whether I may ask the noble Baroness a question. I did not know until she mentioned it that she was going to speak to a number of other Amendments as well. If I am right in thinking that she is attempting to cover Clause 21 as well, then I have something to say. Could the noble Baroness confirm that she is, in fact, doing that?
Baroness BIRK: They are really consequential. It is being deleted from one place and put in another, so it would not have been sense if they had not been dealt with together.
Lord SANDFORD: I am quite happy with that but, if that is so, I wonder whether the noble Baroness is sure that she has got it absolutely right, because Clause 21(6) says:
"If the authority issuing the certificate are not a district council, the authority shall as soon as practicable send a copy of the certificate to the district council".
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This applies in the great majority of cases, but there are one or two cases, particularly the National Parks, where this passing of a certificate from one authority to another will need to operate the other way as well, and I should have thought that if that was so this group of Amendments was the place in which the noble Baroness ought to try to put it right.
Baroness BIRK: I think I am right in saying (but. if not, I will immediately let the noble Lord know) that this does not apply to National Parks. We are talking here about local authorities, and also the Crown. We are not referring to National Parks in this Amendment. As I have explained, this is really a drafting Amendment which is quite a minor one, although I am afraid the explanation is very wordy. It is merely removing a provision from one part to another part and, as the noble Lord will see, the question of National Parks is not involved.
Lord SANDFORD: We can leave it at the moment. It may be a minor Amendment but it is, nevertheless, important to get it right. But we will return to it, if necessary, at a later stage.
On Question, Amendment agreed to.
On Question, Whether Clause 1, as amended, shall stand part of the Bill?
Baroness YOUNG: Before we leave Clause 1, I think the length and the content of the debate we have had upon it illustrates that it is extremely difficult for the lay person reading this very complicated Bill to understand why the Government have arranged it in the order that they have adopted. The Bill starts with a number of definitions which go on through the first six clauses of the Bill. Perhaps this does not matter so much if one is a lawyer, but, after all, this is a Bill which will have to be understood by thousands of people in this country. All owner-occupiers, all those who through pension funds will be affected by it indirectly, and the millions of people who own little pieces of land here or there will have to understand the difference that it will make to them. Not only will they have to understand this; they will have to understand the Welsh Land Authority and what relationship, if any, it will have to the Assembly, let alone to Westminster or anything else. I should therefore like

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to ask the Minister why the Bill has been arranged in this way.
For example, if we take these major definitions which we have been dealing with, we have already had a very long debate on the Welsh Land Authority and it is perfectly clear from the statement that the Government make in the Notes on Clauses which have been sent to me (for which, perhaps I may say in passing, I am most grateful, because they help one to understand the Bill) that they have not worked out the relationship between the Welsh Land Authority and the Welsh Assembly; so first we have a sequence of half-definitions. There is a reference in these definitions to new towns, and of course one of the difficulties about this is that, whereas new towns are quoted as excellent examples of local authorities being planners and developers, by definition a new town is new and there are very few people to be consulted, because, of course, it is just being set up from the beginning. So the whole position becomes quite different when we consider other places where people have been living for a very long time.
Turning to what seems to me the heart of the matter, the key definitions, and indeed the centre of the Bill, are not in Clause 1 at all but appear in the later clauses, perhaps beginning with Clause 15, and certainly in Schedule 4; and one has to look a very long way indeed before one knows what is happening. One of the most important definitions, of course, is that of "relevant development", which appears first in Clause 3. But then we turn to Clause 4, and we get one definition of "development" and one of "development land". But then we need to turn further into the Bill to find the important difference, which occurs in Clause 15, in which we have the first statement of what local authorities are supposed to be doing, which is to exercise the power to acquire land on the first appointed day. The definitions are made much more confusing because they are empowered to acquire land "suitable for development", which of course is not the same as "relevant development", from which the exceptions are made.
My point in raising these complicated matters is to ask the Government whether they really believe that this kind of legislation is intelligible to the ordinary members of the public. It is exceedingly difficult for those of us who are not
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lawyers but who try to understand legislation to follow it, and it is not just an academic exercise which one should do because it is perhaps quite useful to try to sharpen one's wits on trying to understand it. This is, as the Government themselves have said, a major matter of land reform which will apply to everybody who owns any land at all anywhere, and I am bound to say that I think it is extraordinary that the Bill should be so arranged that no one can find out what it means until they have read about the first 15 clauses. Perhaps this would not matter so much, but I notice that Justice, in the interesting memorandum that they have circulated, make this comment, which seems to me very important:
"The Committee would like to make the general comment that the Bill is not arranged in a way which assists the ordinary person to understand it. The Bill starts with a conglomeration of definitions, proceeds to consider the special arrangements for Wales and then sets out the substantive powers and duties".
It does not seem to me that it is too late to put the Bill into a more intelligible order. Enormous Amendments have been made to the arrangement of the clauses since we had our debate on 4th August, and I should have thought that in the interests of getting public understanding, in the interests of getting the Bill to work at all, it would be better for the Government to look again at the arrangement of the clauses. As it stands, it seems to me to make a mockery of talking about this Bill as being somehow in the interests of democracy, let alone of the community, when I am doubtful whether more than the most minute percentage of the community would have any understanding of it at all.
Lord FOOT: I threatened earlier to intervene briefly at this stage to say a word or two about Scotland, and I should like, if I may, to put that threat into effect. We were previously discussing—and I raised the matter in the first instance—the unfortunate way in which the Government are dealing with this matter, in that they are dealing with this major scheme of land reform before they make up their mind about what they are going to do in the way of devolution either for Scotland or for Wales.
If I may revert for a moment to the matter of Wales, I do not think that the noble and learned Lord the Lord Chancellor has got the point that I was trying to make and that the noble Lord, Lord

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Shinwell, was making: that is, that land law is a highly domestic matter. Looking at Wales, you could scarcely think of anything more domestic to the Welsh people than the problem of the land, if you carry through this great radical reform at this stage before making up your mind what to do about future subordinate government in Wales, take what form it may. The objection to that is that the Government, when they come to consider what form of devolution they are going to give to Wales, will be inhibited and will be unable to pass down to the Welsh Assembly power to make its own land laws because they will have already made the law for them in this Community Land Bill. That is the way in which the inhibition works in Wales. When you turn to Scotland there arc even greater difficulties in the path of the Government if they carry through this major reform and apply it to Scotland before deciding what to do in the way of devolution for Scotland.
I say it is more important because, so far as I know, the Government are more or less committed to a form of devolution for Scotland which the Kilbrandon Commission called legislative devolution. That is the sort of devolution we have had for 50 years in the Stormont Parliament whereby the Parliament at Westminster passed down to the subordinate Government a wide range of functions and in the exercise of those functions the subordinate Government have complete legislative and executive autonomy, subject only to the veto of Westminster in the last resort. That, as I understand it, is the sort of devolution which is now being contemplated by the Government for Scotland. If that is the sort of devolution that is to be given to Scotland, what powers will that place in the hands of the Scottish Legislature and the Scottish Government? We disagreed about many things, but everyone on the Kilbrandon Commission agreed that if you were to give legislative devolution to some subordinate Scottish Parliament, the first candidates in the way of functions are the functions of the Department of the Environment. Those are the things which are clearly of the most domestic concern to the Scots or to the Welsh.
Among the functions of the Department of the Environment the first is
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local government. If, therefore next year we are to give to Scotland a measure of devolution which will enable them to legislate in the whole field of local government, then the Scottish Assembly will be able if they wish to dismantle the whole of the present system of local government in Scotland and can set up, if they want to, a different system of local government of their own. What is more, they can dismantle completely this Bill (if it ever becomes an Act) and they can tear it up. They can nationalise the land in Scotland, if they have a mind to do so, or they can do nothing about it and leave the land law as it stands at the moment.
That is the reason why I suggest that we have got our priorities all wrong here, and that to try to carry through this piece of legislation and, as it were, to pin upon the Scottish people this framework of the Community Land Act, to pin that upon the Scottish system and then to create a Scottish Parliament which can tear up the whole thing and throw it away is an absurd way to try to achieve good government.
The Government are in a dilemma, if they suggest doing something different. There is another solution: what you could do in the case of Scotland when you come to devolution on the matter of local government is that you could pass down certain legislative and executive functions to the Scottish Parliament at Edinburgh and pass down quite different functions to the local governments in Scotland, and then the regional Government or the national Government and the local governments and act in parallel, each exercising full autonomy within the functions given to them in the same way as district councils and county councils now work in parallel under our reformed local government system.
But the difficulty about that is that the Scottish people would not put up with it. The Scottish people would not be prepared to accept an Assembly which has not got control over its own local authorities or over its own land law. Whatever the feelings of the Scottish people may be—and they cover a wide spectrum—there is no Scot who would be satisfied with that kind of Parliament. For those reasons I suggest that when the Government come to consider the question of devolution for Scotland, if

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this Bill is then an Act, I think the Government are going to be in a terrible difficulty in deciding how they are to manage the situation. It may be that all we are doing today, so far as Scotland is concerned, is something of an entirely temporary nature which will be washed away as soon as an effective Scottish Assembly and Parliament are in existence.
Lord SHINWELL: There was a great deal of common sense in what the noble Baroness, Lady Young, said about Clause I but perhaps there was some exaggeration when she complained about the framing of the Bill. After long experience—somewhat longer than that of the noble Baroness: but that is purely accidental, I did not arrange it—I can say that I never could understand the legislation that was framed by the experts in Whitehall. Indeed, when I was a Minister, a long time ago, I found great difficulty in understanding some of the Bills that I piloted through the other place. On what happened subsequently perhaps the less said the better.
I have drawn one conclusion from this debate. It is that when devolution is presented to another place and comes to this House it will be discovered to be a sham and a delusion. My reason for saying that is based on the speech of the noble and learned Lord the Lord Chancellor who described me as his "dear friend". I respond by saying that he is also dear to me. I have known him for a long time; I have great affection for him and admiration for his forensic qualities. But when I was listening to him narrating all the functions that were to be superimposed on the Welsh local authorities and the great variety of organisations that are to be created, I could not help asking myself what, at the end of the day, is going to be left when we deal with devolution? It will be much of a skeleton. After all, he informed us that the agencies in Wales would deal with land acquisition; and, of course, if you deal with land acquisition, you cannot ignore housing accommodation; and if you deal with that it is not easy to exclude transport and roads and the like. Having listened to that narration, delivered in his usual impeccable fashion, I am bound to wonder, as I have earlier remarked, what devolution will really
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mean. I therefore respond to what the noble Lord, Lord Foot, has been saying.
Obviously, what the Government should have done was to decide that at some stage they were going to proceed with devolution for Wales and for Scotland and, at the same time, not ignore devolution for England. After all, there is no reason why we should be excluded. It will be discovered before very long when we arc dealing with devolution proposals, that many people in England, on this side of the Border, will have a great deal to say about it, and will want to know what their rights are. I am all in favour of devolution for Scotland. When I first stood for Parliament way back in 1918—a long time ago—I failed to win, but that was the fault of Lloyd George. He decided to have an Election; he was rather rigid and doctrinaire in his propositions and I could not accept them entirely. In my Election address I had two items. Perhaps I had better mention them both, although I do so with some trepidation. One was Scottish Home Rule and the other was prohibition. Prohibition is the one which worries me a little, because since those days I have somewhat redeemed myself, although it may be a kind of redemption one should not brag about.
I have always been involved with some kind of devolution for Scotland: domestic affairs, local affairs, housing, roads and, in particular, sanitation. When I think of the kind of sanitation we had way back in those early days, there is much need for Scotland having a say in the matter. So I do not discard devolution at all, but it seems to me, before we come to any definite conclusion about the implementation of all those proposals which the noble and learned Lord the Lord Chancellor presented to the Committee earlier on on the Amendment under consideration, that it would have been far better to decide to adjourn, to postpone this Bill and wait until the Government introduced their proposals for devolution. Then we can take into consideration every aspect of the question: land acquisition, land development, roads and the like—exclude nothing. That is what I understand by devolution. The Government have decided to adopt a different method; in other words, they are putting the cart before the horse. That is a cliché but it is one which should not be entirely ignored, and that is what is

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happening in connection with this legislation.
I am in favour of land reform. I do not want any misunderstanding on that. I do not want anybody on the opposite side of the Committee to imagine I am departing from any principle or ideological objective which 1 have held for many years. I am certain that some kind of land reform is required. I do not want to enter into the terms of that; this is not the occasion to do so. But to proceed in this ridiculous, absurd fashion, going into the details before deciding about the principle, is wrong. One should decide about the principle of devolution and surround that principle with a number of details according to the fashion of the people in another place and the Members of your Lordships' House, and then decide what should happen in Wales, Scotland and, as I remarked, on this side of the Border.
What is to be done? To vote against Clause 1 would be of very little value. I do not advise that we should vote against Clause 1. I do not want to be placed in the difficult situation of having to abstain. The last thing I want to do is to sit on the fence. I would rather vote for one side or the other, but not sit on the fence. I beg the noble Baroness, Lady Young, not to press this matter too far. She has expressed her point of view, and, as I said, I agree with a great deal of what she has said. She always speaks with remarkable common sense. I hope that I shall not be expelled from the Party for having indulged in compliments, but that is true. The noble Lord, Lord Foot, speaks with a great deal of common sense too; but we have been presented with a piece of legislation which could have been postponed until a later date. We have to deal with it, and what can we do? I suggest that we accept Clause 1 and make the best or worst of it.
5.6 p.m.
Baroness WARD of NORTHTYNESIDE: My Lords, having listened to all the complications of this Bill which seem to be coming out of Clause 1, the complications which have to be decided, nobody seems really to agree with anything. All have different ideas; all want to put forward different points of view. That is right in a democratic system of
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government; we all have a right to put forward our own points of view. But these matters are so widespread. There has been reference to the arrangement of the clauses, to the position of Wales and Scotland—no one has really had anything very much to say about the position of England. Most people seem to disagree altogether with the Bill. I am rather keen on precedent, and perhaps, so that everybody could have a right to say what they feel about land reform and the whole Bill, it would be a good idea if we voted against every single clause; then the Bill will be out, and those who want to do anything can introduce another Bill which could embody at any rate some of the very sensible suggestions that have come from all sides of the Committee. I hope that the Party I support will have the good sense to vote against some of the clauses. I think we ought to vote against the lot. The Bill is not very popular and, as the months go on, it will become less and less popular. By voting as I suggest at least the country will understand that my side of the Committee felt the best way to let the country know how difficult everything was, was to eliminate the Bill altogether. Then everybody can start all over again. That is my recommendation: I am willing to vote against every single clause.
Lord HALE: My Lords, may I differentiate? I agree entirely with every word said by my noble friend Lord Shinwell—a rare thing for me. Although I admire my noble friend greatly, we have never been quite on the same side of the Party. This Bill embodies many important principles but, as luck would have it, I too happen to be in favour of Scottish devolution. I am not so old as my noble friend Lord Shinwell, but he anticipated me by only eight or nine years. I declared my adherence to some measure of Scottish Nationalism in the Leith By-Election in 1926 or 1927, and although that declaration might have owed a little to the waters of the Liffey rather than the waters of the Forth, since then I have had increasing sympathy with the aspirations for a measure of devolution for Scotland. If the Committee will allow a Sassenach without a kilt to intervene, I propose to do so.
I agree with the encomiums which were passed upon the noble Baroness,

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Lady Young. My noble friend raised the question of your Lordships dealing with this Bill. I intervened at that time because it seemed to me that this was a matter of great complexity. I agree substantially with the general purport of the Bill—though it would have been much more sensible in 1945 than now, and of course land is at the highest price it has ever been. Whatever compensation arrangements are made can succeed, from the Government's point of view, only if somehow or other we manage to give less compensation than the land is really worth at this moment.
I was rather criticised for expressing some apprehensions as to whether the Bill had been fully discussed and was fully understood. I spent the weekend trying very hard to understand what it means. The noble Baroness said that of course a lawyer would understand it. I was not much of a conveyancing lawyer and I have not been in practice for the last 24 years or so, but I would beg to inform the noble Baroness, Lady Young, that every lawyer in England is trying to find out, with an almost complete lack of success, despite a series of lectures and so on, what is the present law of this country under our membership of the European Economic Community. I have still the privilege of being a member of the Select Committee, and we are also trying to find out. As I say, I expressed some doubts as to how long this Bill would need to be discussed and as to whether we should be able to understand it in time. Subsequently, undertakings were given that we should be given time. Today in the Vote Office I was handed 400 excellent and, so far as I can see at a glance, admirably informative pages, which I think make a very real attempt at explaining what the drafters of the Bill had in mind. Therefore, I do not propose to intervene further in this debate, but I shall do what I have done almost invariably up to now and vote in support of the Labour Government who are doing very great work under very great difficulty. I shall read the400 pages carefully between now and the Report stage, and at the Report stage I shall vote according to my conscience, because then I believe that I shall understand something of what the Bill is about and what it is intended to do.
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That still leaves us waiting for another Bill to explain other aspects of this Bill. This mass of legislation is going through under difficult conditions, when everybody knows that only a small percentage of Members of this Chamber have been able thoroughly to understand it; that is much better than the Silkin Bill which, it was said, only Lord Silkin understood and later on I believe that quite a number of people were questioning even that! It is a very serious, comprehensive, and Socialist-minded measure, the principle of which I agree. However, at this moment I hope that the advice of the noble Baroness will not be taken. I shall continue to support the Government throughout the Divisions and then try to inform my mind about this Bill. When I have done that I hope that I may come to love it and to understand it.
Earl FERRERS: One of the excitements and hazards of speaking, on Whether the clause shall stand part of the Bill?, is that one never quite knows what will come up. I shall restrict my observations to one specific point. I believe this is the right moment at which to do this, because this is the definition clause and therefore it covers the full gamut of the Bill. On Second Reading I gave notice to the noble Baroness, Lady Birk, of a question that I intended to raise. I did indeed ask the question but unfortunately she did not give me the answer in full, and therefore I thought I would give the noble Baroness the opportunity of doing so today. In order to help her to be fully possessed of the necessary information, I warned her beforehand.
The Bill requires 14,000 people to operate it, and the question which I asked the noble Baroness was whether it would be possible for the Government to describe how many of those people would be estate agents, how many would be lawyers, how many would be planners, surveyors and valuers, and how many would fall into the category of administrative staff. It is a colossal figure, and I should like the noble Baroness to understand that I am not trying to ask a "funny" question or trying to trip her, or anything like that. But it is vital that we should know how this figure is arrived at, because if this

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Bill, when it reaches the Statute Book, is to be operated properly, it will have to be operated largely by professionals. Therefore I should like to ask: where are they coming from?
As I see it—and probably the noble Baroness may say "This all comes into account after the second appointed day"—at present these people are not in public employment, because otherwise they would not be additional to the Bill. So they must be in private practice and, if that is the case, how are the professionals who will be required for the operation of this Bill to be drawn from private practice? If this were to happen, there is bound to be competition for their services, in which case inflation will be given a further spiral. If those in private practice at present are not prepared to undertake the work which this Bill will require, then the work will be done presumably by what one might describe as the "dross" of the professions. If that were to be the case, then the Bill is not going to work at all well, and if the Bill is to work at all it is vital that it should work properly.
When I asked the noble Baroness about this on Second Reading, she said:
"It is quite impossible at this stage to give that information. If I gave some arbitrary figures, noble Lords would be quite right in asking how I was able at this stage to say that there would be so many lawyers needed and so many land agents needed. That would be the most extravagant and wrong way to go about it."—[Official Report, 16/10/75; col. 1136.]
I could sympathise with that view and understand it, except that it is contrary to what the Government have said. If one looks at page vii of the Explanatory Memorandum to the Bill, your Lordships will see that the Government, in order to assist people to understand the Bill, say there:
"It is estimated that when the scheme is in full operation, … total staff increases will be of the order of 12,000 in local authorities in England and Scotland and 750 in Wales, …".
Then it goes on to give an estimate that when the scheme is fully operative the increase in Central Government staff will amount to some 14,000, including staff of the Valuation Office of the Inland Revenue. That is the figure which the Government have given: 14,150. It is essential for us to know how that figure is made up. The professions require to
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know how it is made up, and I have a horrible fear which is that these people are not there. If the noble Baroness were to say, "We really cannot give you a breakdown", I am then bound to put the question to her: how then have you arrived at the figure of 14,000? Has somebody used a slide rule? There must have been some method by which this figure was arrived at; and it really is not good enough for the Government to give an overall figure and say, "You have to accept it." This figure is made up of professionals and these people will want to know how this figure is arrived at, so that it really should be put on record.
Baroness STEDMAN: If I may follow the noble Earl, Lord Ferrers, I was one of those who in connection with the Community Land Bill No. 2 had reservations about how we were going to find the staff and where they were coming from. Since that time my worries have decreased. My county has started consultations with a view to setting up their land management scheme with the six district councils within our area. What has come out of that is that at the present moment within my county area, within five of the districts and the county itself, we already have 19 solicitors, 17 legal executives, 12 conveyancers, two estate surveyors, one partly qualified surveyor, one chartered surveyor, 11 valuers, six assistant valuers and two unqualified valuers, plus the various planning people within the county and the districts and also the staff which is available to us who work in co-operation with us from the new town development corporation of Greater Peterborough.
My county, in their initial look at it, feel that for the immediate future, at any rate, we can do the job that will be given to us with the staff that we now have; that we shall have our finance and our legal officers who will be keeping a very close watch on the resources of the county and the district; that we shall not go outside and employ any other staff until we are confident that all those throughout the county and the district are being fully utilised in the jobs which they are now doing and the new duties that we are laying upon them. That does not answer the question of the noble Earl, Lord Ferrers, as to where we got 14,000 from, or how we are to get them. I say only that, so far as my own fears are concerned, with

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the work that we have done in the intervening months my fears are considerably fewer now than they were when we had the Second Reading of the No. 2 Bill.
Earl FERRERS: May I say to the noble Baroness that what she has said is extremely interesting and if that covered the country it would seem to indicate that the 14,000 was far too high a figure. If the 14,000 is a correct figure, then of course there must be people outside those who are already involved on whom, presumably, the Government expect to claim.
Viscount RIDLEY: It does look as if Cambridgeshire is rather overstaffed.
Baroness STEDMAN: I do not think so.
5.23 p.m.
Baroness BIRK: We have ranged quite a long way in this debate on the Question, Whether Clause 1 shall stand part of the Bill? I must say immediately that I have great sympathy with the noble Baroness, Lady Young, when she speaks about the complications of this Bill. It is extremely complicated. Most pieces of legislation are complicated, but anything that has to do with land law is particularly so, especially for those of us who do not happen to be experts in it or lawyers with that particular specialisation. The Bill was arranged in this way because in the opinion of Parliamentary Counsel it was the kind of Bill which the average reader would not be able to understand without knowing the definitions. One example of what Parliamentary Counsel had in mind was that it is not possible to understand what authorities can do until those authorities are defined.
This again is a matter of opinion. It is perfectly true that when we were earlier discussing the Bill I was considering—and at some point had a word with the noble Baroness about it—whether it would facilitate discussions if we turned the Bill round. The same criticism can be directed at almost all Bills. There is no easy way of dealing with a very difficult group of subjects. If one is realistic one realises that those who might be called average or ordinary readers who attempt to find out what is going on by reading through a piece of legislation must be quite minimal.
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After a Bill is passed is the time for the explanations to be put forth in a more simplified form. Because we are doing this through the local authorities, they will themselves be in a position to put out information about the Bill. There are all kinds of provisions to which we are coming later, in the area of more open government, where information has to be made available and where, again, there are opportunities for explaining what the Bill is about. To do something of this kind, to make an enormously radical change in our land system, at the same time including as much public participation as possible, doing it in as democratic a way as possible, makes for complications. Nobody is pretending otherwise. This is why it is difficult, I agree, to take this Bill through this Committee stage. I do not think there is any easy way out. It is a matter of opinion whether what Parliamentary Counsel decided in their wisdom is easier for the lay reader: but certainly we on this side and from this Bench are trying to do our best to make it as comprehensible as possible.
On devolution, the second large area on which questions have been raised and doubts expressed, I think that my noble and learned friend the Lord Chancellor dealt with the subject in quite considerable detail when replying to the Amendments on Wales. But I here part company with my noble friend Lord Shinwell and some of the other speakers on the view that one should have to wait until the devolution plans, which are still under discussion, have evolved, not only into a White Paper but into legislation before we set about land reform of this kind. The basic principles to which I would draw the attention of the Committee, which are the combination of planning and ownership within the community, exercised through the local authorities in England and Scotland and the Land Authority of Wales, still remain basic. As to whether in the future a regional superstructure is put in, the situation may alter—who can say? I do not think this is the moment to prophesy what will happen. But it does not alter the fundamental principles and objectives of the Bill and I think, and we on this side of the Committee all think, that it would be a great mistake, and in any case quite impossible now and quite wrong, to hold up this Bill which is dealing with land

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reform. As I have explained on two Second Readings now, it can only be quite catastrophic and destructive to the whole structure and to everything anybody is trying to do to wait on some very much longer-term plans on devolution. On this point we really have to wait and see.
I think that the noble Baroness, Lady Ward, although I do not agree with her, was consistent in her comments of, "Vote against, vote against …" It seems to me to be slightly against the raison d'être of this Chamber, which is to advise and amend. Nevertheless, she of course has freedom to do as she thinks.
Baroness WARD of NORTH TYNESIDE: Certainly.
Baroness BIRK: The noble Earl, Lord Ferrers, gave me notice of a question he raised again. He said that I did not give him an answer in full. The trouble is that I am unable and certainly cannot give him the answer that he probably wants. The answer is—and I will spell it out in more detail as I gave it on Second Reading; and it has been supported by what my noble friend Lady Stedman said—that the projected number of around 14,000 in England and Scotland is, first of all, for when the scheme is fully operational. This was based on studying the staff needed by some of the well-organised authorities to process the annual acreage they acquire and dispose of. The local authorities' associations accepted that this figure is about right, although opinions naturally vary about the detailed breakdown of the total.
I repeat what I said on Second Reading the other night, that in our view professional staff—that is, lawyers, planners, valuers—will account for about one-third of the total, and administrative and other support staff will comprise the rest. I would again point out that this number relates to the period after the second appointed day, some years ahead when the scheme is in full swing. Furthermore, the noble Earl is not taking into account the time factor which would allow for training and for the opening up of careers in this area. If what my noble friend Lady Stedman has said proves to be correct, the numbers required will be less than those which have been guessed at. If that is so everybody will
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say, "So much the better". Also, this does not take into account the fact that authorities are being asked to deploy their existing staffs. There are authorities which already have plans under way whereby they will share expert staff. To go further than that would be not only impossible but quite wrong. This is the best and soundest basis upon which we can prognosticate what will happen in the future. We cannot go beyond that.
I have dealt with the main points that have been raised on this clause and I hope that now we may move on.
Lord KINNAIRD: May I ask the noble Baroness one question? She said that she was trying to make this Bill as comprehensive as possible. Surely a Bill ought to be comprehensive. If it is not, it ought not be passing through Parliament.
Baroness BIRK: I said "comprehensible".
Lord KINNAIRD: I thought I said "comprehensible".
Lord SANDFORD: I am afraid that we cannot finish with Clause 1 because I have one or two other points and questions to put to the noble Baroness. First, I am sure that all my noble friends on this side of the House will find entirely unsatisfactory the answer of the noble Baroness to my noble friend Lord Ferrers. The Government cannot put into the manpower memorandum of the Bill the figure of 14,150 without having made some calculations. We have just had it from the noble Baroness's own mouth that the Government made some calculations and undertook some surveys. Of course, the points that were made by her noble friend Lady Stedman are of interest so far as the initial stages of the Bill are concerned. We know that Cambridge can manage with the staff that they already have. That is good. We know, however, that a large number of authorities cannot manage with the staff that they already have, and we must be concerned with the training of the staff who will be needed. It may be that they will be needed only in five years' time, but their training must begin now; and if their training is to begin now we must know the answer to my noble friend's question: how many valuers, how many estate agents, how many of this and how many of that? It is most

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unsatisfactory to be left in this position for the second time and we shall have to return to it.
I am afraid that the noble Baroness is having a rather sticky start. I am also afraid that it is going to get stickier, but I should like to console her by saying how grateful we are to her for her help and that of her office in providing us with notes on clauses. This is considerably expediting matters.
I wish to comment on three matters. They are Wales, the Peak Park Planning Board and the new towns. Wales has already been amply discussed. I should like to commiserate with the people of Wales who will be disenfranchised by the setting up of the Welsh Authority, but I console myself with the thought that by establishing it the Government are building into the Bill in respect of Wales the two basic ingredients which caused the Central Land Board of 1947 and the Land Commission of 1967 never to get off the ground and eventually to founder. To that extent this arrangement is welcome to those who sit on these Benches.
If I may turn to my questions, the first relates to a point made in the notes which the noble Baroness has furnished on Clause 1, particularly paragraph 9, which states that no special provisions arc needed for the National Park Committees. Later it states that they are to exercise planning functions and to do so as committees of the counties concerned. That is true in respect of eight of the ten national parks but it is not true in respect of the Exmoor National Park which straddles two counties that have to make special arrangements. I am satisfied that they can make adequate arrangements between themselves without anything being imported into the Bill, but I am quite certain that the Peak Park Planning Board, which straddles several counties and even more districts, cannot function without special provisions being made. There was an indication at Report stage that the Government have this matter in hand. In the first set of marshalled Amendments there is no sign that the Government are taking it on board. Therefore, I myself have moved certain Amendments. I should be grateful if the noble Baroness could indicate whether she has any Amendments of her own in mind.
My next question relates to a matter to which my noble friend Lady Young
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has already alluded. It is in paragraph 3 of these notes where it is said that the new towns have their own planning powers and that they represent the approach to positive planning which it is the Bill's intention to extend to all significant private development. As my noble friend said, the characteristic of new towns—and I am familiar with quite a number of them—is that they do not have to operate under any kind of democratic control. They do not have communities, at any rate when they start to operate. And just what are the powers that the new towns have that make the noble Baroness and her colleagues feel that they so well represent an approach to positive planning that is apt for this Bill?
Baroness BIRK: If I may deal with the first point of the noble Lord relating to the Peak Park Planning Board, he said that he had certain Amendments in mind. Since this matter arises under Clause 16, may I suggest that we wait until we get nearer to that clause and discuss it in that context? It would then make more sense than it does now. So far as the new towns are concerned, they have been very successful and in many areas their development and planning procedures have been operating in the way which will be required by this piece of legislation. Therefore, there is no reason why they should not be treated as any other authorities would be treated. Again, may I suggest that any specific points ought to be discussed when we are dealing with the powers on acquisitions? We are now dealing with the definitions and the basis of the main clause.
Lord SANDFORD: It appears that the noble Baroness does not know whether she is to move any Amendments of her own regarding the Peak Park Planning Board, and that she cannot tell us what are the powers of the new towns that are relevant to this Bill. She has described well the way in which they operate, but they operate on virgin or green field sites without a community and without an electorate. That seems to me to make them totally inappropriate for consideration in the context of this Bill.
Lord SLATER: When the noble Lord referred to the new towns, his remarks showed a lack of knowledge of history of the new towns which were established

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by the Labour Government of 1945. Six new towns were established then, and the smallest was in my constituency when I was in the other place. It was called Newton Aycliffe and it was designed for 10,000 people. The Bill was led by a Scotsman when it was going through its Committee stage. May I inform noble Lords that the Leader of the Opposition at that time was known as Mr. "Shapes" Morrison. The policy of the Government was that the new towns should be developed as rapidly as possible and that their own administrative powers ought to be granted to them as quickly as possible. This was thrown out when the noble Lord, Lord Brooke of Cumnor (as he now is), became Minister for Housing and Local Government, and reversed that decision and set up a commission. I sat on the committee, and a member of that commission had to sit upon the management board of the new town, within the terms of reference.
Returning to the subject of the speech made by the noble Baroness, Lady Young, I was moved by what she said. I thought it was an effective speech, and I was also interested in what the noble Earl, Lord Ferrers, said. I also found the remarks of the noble Baroness, Lady Stedman, interesting, when she produced figures as to how the Government have taken into consultation the national bodies of local government up and down the country on this issue. The noble Earl, Lord Ferrers, was trying to tie my noble friend down to a specific figure, but may I say in all good faith to the noble Earl, and without any displeasure towards him, because I have the highest regard for him, that he ought to initiate a conversation with members of his own side in another place, who have had plenty of opportunity in the Scottish Grand Committee, which has its own forms of debate in regard to such matters as this. Probably he would get his replies from his own friends.
My noble friend has endeavoured to reply to the best of her ability, but noble Lords who have not had experience in the drafting of Bills and in the setting up of committees for discussion should understand that we have what are known as Parliamentary draftsmen. These are the people whom Ministers must convince
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about the views of Members of this Chamber and of the other place on what ought to appear in the Bill, and about interpretation and phraseology. I give credit to the noble Baroness, Lady Young, the noble Baroness, Lady Stedman, and my noble friend who is leading for the Government, and, in view of the consultations that have taken place, I hope, as a past member of local government administration, that we shall not vote against this clause and that the noble Baroness, Lady Young, will not press it that far. Otherwise, we may regret it.
Earl FERRERS: Perhaps I may say to the noble Lord, Lord Slater, that I take his rebuke in the way in which he meant it, and I certainly take no offence. Equally, I hope he will not take offence if I say that, in my view, that was a most extraordinary intervention, if by that he meant that had I addressed my questions to honourable Members of another place who sat on the Scottish Grand Committee I should have got the answer from them, as opposed to the noble Baroness who is in charge of this Bill for the Government. If the members of the Scottish Grand Committee know the answer, I am quite certain that the noble Baroness knows it.
I was not trying to tie the noble Baroness down to a figure. The figure which has been mentioned, and which has been tied down is that which the Government themselves have produced of 14,000. As I tried to explain earlier, I was not doing this in order to try to embarrass the noble Baroness. I believe it to be a very real problem and if this Bill is to operate properly it must he with the advice of the professionals. My fear is that the professionals are not there, but if they are there they are likely to be already engaged and those who are already engaged are not likely to be withdrawn from their private practice. Then you will get the dross of the professions and those who are bad and unskilled and whom private practice does not want to employ. That would be a disaster for the Bill. I hope that in the course of the passage of this Bill the noble Baroness will be able to give some more detailed and, if I may say so in the broadest sense, helpful figures, because this is an important point; it is not just a Committee point.
Baroness BIRK: I should like to add one small point and to thank my noble friend Lord Slater for his intervention. It becomes a circular argument, because it is said that we must have these breakdowns of figures. But once the Bill becomes an Act, I should have thought it more than likely that a number of people will come in from private practice when land goes into public ownership through the local authorities. Noble Lords are saying what should be the logical cut come and that is what I have been saying all the time. Let us get on with the Bill and get it on the Statute Book so that people know where they are, not only from the point of view of planning and ownership, but also from the point of view of staff as well.
Baroness YOUNG: That is rather a dangerous argument to adopt because it suggests that we ought not to discuss the Bill at all. In fact, I think this has been a worth while discussion on the Question, Whether the Clause shall stand part of the Bill?, and I sympathise very much with the noble Baroness, Lady Birk, and her colleagues in trying to explain this piece of legislation. I should have thought the numbers of her own colleagues on the Benches behind her, who clearly have not understood it at all and have the deepest sympathies with our constructive suggestions about the rearrangement of clauses and so on—which would make it more intelligible and workable from their point of view—would have indicated to her that there is some question on all sides about this piece of legislation. As it is, we have had no real answer to the point about Scotland raised by the noble Lord, Lord Foot; we have had no real answer about Wales, the final irony being that we are setting up a non-elected, non-democratic Land Authority to implement something for the benefit of the community, which seems to me to be a total contradiction in terms. Also, I do not believe that my noble friend Lord Ferrers has received an answer to his very important points on staff.
I think it only fair to give notice to the Government that we shall press these points and that we shall expect a proper answer before the Report stage. We shall return to this at other stages of the Bill. It simply is not good enough to have such answers on something as important
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as this. As it is, we will leave this matter where it is now but we hope that the Government will give more satisfactory answers as the Bill proceeds.
Clause 1, as amended, agreed to.
Clause 2 [Joint boards]:
5.49 p.m.
The Earl of BALFOUR The Earl of BALFOUR moved Amendment No. 7:
Page 2, line 42, at end insert—
"(1A) If two or more local authorities in Scotland agree that a joint board should be established as an authority under subsection (1) above, they may with the consent of the Secretary of State, combine for any of the purposes of this Act on such terms and conditions as may be agreed between them and approved by the Secretary of State."
The noble Earl said: Most of what I wish to say on Clause 2 was said during my Second Reading speech. Briefly, I would point out that Clause 2 is one of the unique pieces of legislation which creates an entirely different situation in England, Scotland and Wales. If the Government want to keep it that way it is up to them. The reason for this Amendment is to allow two or more authorities in Scotland at least to approach the Secretary of State with a possibility of setting up a joint board. I must apologise to your Lordships. Perhaps I was a little slow, but I should say that the words at the side do not mean that it is intended to be another clause. I am sure noble Lords will realise that the Printed Paper Office, the Public Bill Office, the printers, and everyone else have been under considerable pressure. Those words do not actually affect the Amendment; it is intended as a subsection to the Bill.
I should like to stress that Part I and Schedules 1 and 2 to the Scottish Act of 1972 were repealed. May I say once again that I am very grateful to have the notes on clauses. The notes on Clause 2(3) make reference to Section 1(3) of the Town and Country Planning (Scotland) Act 1972, which has been repealed. The noble Baroness, Lady Birk, said that in the very last clause there was provision that authorities should be able to share expert staff. There is no longer provision in Scottish legislation, under the planning laws and so on, for them to be able to do this. Therefore, my Amendment is

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intended to be constructive and to fit in with the principle here.
In order to save time, I shall say a few words on the reason for leaving out subsection (6) under Amendment No. 10. It seems to me very strange that the Secretary of State should wish to exclude himself from setting up a joint board in Wales. There is nothing whatever to stop two or more authorities under the planning Acts of England setting up a joint board in Wales, as Part I and the relevant Schedules to the English planning Acts were not repealed when the English Local Government Act went through Parliament. This is somewhat technical. However, to some extent I have already spoken on this point, so I beg to move.
5.53 p.m.
Lord MELCHETT: Clause 2 of the Community Land Bill is exactly similar in its application in both England and Scotland. Thus, the Secretary of State is the only person who can set up a joint board. Two English authorities acting alone cannot do so. I think the noble Earl, Lord Balfour, possibly may be confusing this with the position under the local government legislation where there are powers under Section 1 of the Town and Country Planning Act 1971 for the formation of joint planning committees or two or more authorities in England. but in Scotland these powers were repealed, as I think the noble Earl said.
However, the powers under Section 1 of the Town and Country Planning Act are in exactly the same terms as those in Clause 2 of this Bill; in other words, there is no legal power in existing legislation for local authorities to initiate the setting up of a joint board. The Amendment would make Scotland out of line with England. which I think is exactly what the noble Earl is trying to avoid, if I have his purpose right. In our view, in practice there is nothing to stop any local authority approaching the Secretary of State and asking him to set up a joint board for the purposes of the Land Scheme. In practice this is how it is envisaged that the provision will normally work. Clause 2 in no way prejudices any scheme for co-operation which two or more authorities may agree to in the Land Acquisition and Management Scheme, but the fundamental difference
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is that a Clause 2 board is a separate legal entity. In the light of that explanation, I hope that the noble Earl will reconsider his Amendment No. 7.
As I understand it, the later Amendment to this clause, No. 10, in the name of the noble Earl, Lord Balfour, would delete the subsection which omits Wales, and is really consequential on any changes which might have been made to the status of the Land Authority for Wales. While the Land Authority remains in the Bill, there will be no need for the setting up of joint boards in Wales because the Land Authority, as it were, will be a joint board for the whole of the Principality.
Viscount GAGE: May I ask a question not exactly related to this Amendment, although it might be? I hope it is a simple question which will admit of a simple answer. Does anything in this clause permit the Secretary of State to alter the boundaries or composition of established national parks or areas of outstanding natural beauty?
Lord MELCHETT: No, my Lords.
The Earl of BALFOUR: I am very grateful for the answer given by the noble Lord, Lord Melchett, and beg leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
5.57 p.m.
Lord SANDFORD Lord SANDFORD moved Amendment No. 8:
Page 3, line 2, leave out from ("inquiry") to ("and") in line 3 and insert ("unless no person affected by the order has objected to it").
The noble Lord said: I beg to move Amendment No. 8 and to speak briefly at the same time to the other Amendments relating to this clause. As the Committee will see, this is a clause in which exception can be taken from a number of different points of view. The setting up of joint boards ought to be undertaken not on the initiative and at the discretion of the Secretary of State, but at the initiative of the two local authorities concerned. That is one defect.
Another defect is that the powers of the Secretary of State in setting up the board and adapting other legislation so as to give powers to it, are far too sweeping at subsection (5)(b). That is a matter

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we shall come to in a moment on Amendment No. 8A. Thirdly, it is a provision which ought only to be used as a last resort, when the normal co-operative arrangements between local authorities, provided for in the Local Government Act at Section 101 et cetera, have been invoked, tried and found lacking. Amendment No. 10A, in the name of my noble friend Lord Colville of Culross, will deal with that point. At the moment, 1 am just dealing with a further point with my Amendment No. 8, which is that arrangements between local authorities and orders establishing things like joint boards ought not to be undertaken by reference only to the authorities concerned.
The setting up of a joint board is something which affects the enfranchisement of two electorates. There ought to be provision not only for authorities concerned to object to the making of an order having that effect, but also for individuals to object. The purpose of my Amendment is to find out from the Government why they think it is at all appropriate in a matter as important as this for the individual citizen, for individual communities—after whom the Bill is named—to have no say as to whether or not it is right for a board of this kind to be established.
Lord MELCHETT: It is our view that this Amendment would make the right of objection to an order under this clause very wide indeed. It is misguided, because the setting up of a joint board for an area is effectively only a decision about how the authorities in the area should exercise their functions. This is a matter between the authorities and the Secretary of State. That is why the Bill limits the right of objection to these authorities. This follows precisely the precedent of Section 1(2) of the Town and Country Planning Act 1971, which in turn goes back to the Town and Country Planning Act 1947. Frankly, I am surprised that the noble Lord, Lord Sand ford, should now want us to depart from that well-established precedent.
The noble Lord argued that individuals in an area should have a right to object to the setting up of a joint board. As I have said, this is, in our view, a mechanical decision about haw the functions of
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authorities should be exercised. There is no need for individuals to become involved in such a decision. It should be emphasised that a joint board set up under Clause 2 would not be any less answerable to the local electorate than a local authority. Subsection (3) provides that all the members are to be appointed by the constituent authorities and the board will remain responsible to the local electorate through those authorities. I hesitate to emphasise to the noble Lord, with his background in these matters, that it is all the members of the joint board under this clause who will be elected members of local authorities. I hope I have said enough to the noble Lord to induce him to withdraw the Amendment.
Lord SANDFORD: I am afraid the noble Lord has said enough to make me think that he has not seen the point at all. What is the relevance of the Town and Country Planning Act 1971, which has to do with planning, to the function we are talking about, which has to do with land acquisition? It is an entirely different matter. If you want to refer to a previous Act, you must go to the Local Government Act, and when I come to say some more about this Bill on Clause 2 that is exactly what I shall be doing. If the noble Lord will follow me then, he will see that reference to the general provisions for co-operative arrangements between local authorities, and particularly the use of orders by the Secretary of State, does require provision for citizens concerned to object. I am afraid that answer confirms our worst suspicions: namely, that in making the provisions that are in the Bill the Government have a great deal of regard to the powers of the Secretary of State and how he is to exercise them, some, but much too little, regard to the powers of the local authorities, and no regard at all to the communities after whom the Bill is named. I shall return to this in a moment when we deal with the whole clause. I beg leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
The DEPUTY CHAIRMAN of COMMITTEES (Lord Nugent of Guildford): Before calling Amendment No. 8A, I should explain that if it is agreed to I shall not be able to call Amendment No. 9.
6.5 p.m.
Baroness YOUNG Baroness YOUNG moved Amendment No. 8A:
Page 3, leave out lines 27 to 29.
The noble Baroness said: On behalf of my noble friend, 1 should like to move Amendment No. 8A, and I think it might be for the convenience of the Committee if we discuss Amendment No. 9 at the same time. We on this side of the Committee regard this as a very important Amendment. It is important because I think it should identify exactly what the Government have in mind in this subsection (5)(b) and what kind of purpose they expect it to be put to. When this Bill was first published, and indeed at intervals since its publication there was a great deal of criticism of it on two main constitutional grounds, the first one being that so much is left to be dealt with by regulations which we have not yet seen—a point, of course, to which we shall be returning when we discuss Clause 3 particularly—and, secondly, that so much has been left to the discretion of the Secretary of State.
Nothing illustrates better that second criticism than subsection (5)(b), in which the Secretary of State:
"… may adapt or modify any of the provisions of this Act or of any other enactment concerning the acquisition of land."
I am, of course, well aware that there are instances precedented in which it is necessary to make provision for the Secretary of State to modify an Act in order in a subsequent Act to make the powers in the previous Act apply to the subsequent legislation. Therefore, there are reasons why it might well be necessary to include the first part of (b), and I can see why that would be necessary. But I find it very difficult to see why the second sentence of subsection (5)(b) is necessary at all. I should like to ask the noble Lord, Lord Melchett, whether he can give some examples of what kind of future proposals the Government have in mind when this subsection might be invoked, so that we could see what it is they want to do.
As it stands, it would appear, that this subsection could remove the jurisdiction of Parliament as it empowers the Secretary of State to make an order adapting or modifying any of the provisions of
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this Act or any other enactment concerning the acquisition of land. The order would be subject to annulment only by Parliament if any of the authorities concerned had not consented to the making of this order. Therefore, so far as Parliament is concerned, or so far as individuals are concerned, the order could be made and there would be no right of objection or discussion. It seems to us on this side a very important matter of principle. It is a quite extraordinary power. I hope that the Government will be able to offer examples of how they expect it to be used and why they think it should be necessary in this Bill, because unless we have a satisfactory explanation we shall find this very difficult to accept. I beg to move.
Viscount COLVILLE of CULROSS: I wonder whether I could add a word to what my noble friend has said. It is, of course, very important that the noble Lord, Lord Melchett, should give us some instances of the powers he would expect to be modified or adapted by an order made under this heading in the subsection. What I think we would also like to know is what the Department see as the limits of the jurisdiction. This is really a matter of legal powers. If you draft a subsection in the way in which it has been drafted, you attach a certain implicit restriction by its phraseology. If you say, "and in particular", the purpose, as I understand it, must be such as really falls within the first two lines of the subsection. But what sort of limitation does the Department see being placed upon such orders. If the noble Lord could give us, as it were, the ring fence in which we shall be operating if any orders under this paragraph are made, I think it would do a great deal to clarify it; we shall be able to see what the powers are which the Government are seeking to arrogate to themselves.
Lord HENLEY: This subsection has given great cause for alarm to my noble friends, because even if the noble Lord can give a ring fence, as the noble Viscount, Lord Colville, suggested, it still leaves it open merely to set up a joint board to change completely the whole legislation. That obviously must not be the Government's intention. Can we have an explanation?
The Earl of BALFOUR: Could I say a few words, partly speaking to Amendment No. 9 which has been coupled with this one. I should like to show your Lordships exactly what is being said here:
"An order under this section may adapt or modify any of the provisions of this Act or of any other enactment concerning the acquisition of land".
I tried to see whether I could improve this drafting, which is far too wide, and really gives a joint board very much wider powers in the field of anything to do with the acquisition of land than the authorities that make up that board. I will quote briefly from what the right honourable gentleman Mr. Oakes said in another place in reply to Mr. Clegg. He said:
"all the Amendments as drafted …"
and I suspect that mine comes into the same category—
"… would be unacceptable. … Our aim in giving these powers to joint boards was to achieve considerable flexibility because of the wide-ranging and different kinds of things that different boards might be required to do."—(Official Report, Commons, Standing Committee G, 20/5/75, Col. 193.)
He goes on in the same column:
"However, the hon. Gentleman has convinced me that, although we should not delete subsection (5)(b), the powers within this subsection give a joint board powers considerably greater than those of a constituent authority, and that cannot be right. Although we cannot accept the wording of the amendments, I give an undertaking to the Committee that we shall consider the matter."
As nothing happened at Report stage in another place and nothing here yet, if my noble friend decides to go to the Division Lobbies to leave out paragraph (b) I shall support him wholeheartedly.
Lord MELCHETT: I am sorry to have to correct the noble Earl, but he is not right in what he just said, and I hope he will withdraw it because he has misled the Committee. An Amendment was brought forward by the Government at Report stage in another place, and I will spell out in some detail what happened there because the noble Earl has it completely wrong. What happened was that the Bill was introduced providing power for an order under Clause 2 to adapt or modify legislation, as the noble Earl said. This was the subject of a debate in Committee, and he read out an extract of what my honourable friend said in that debate.
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The Government undertook to consider the point further after the Committee stage. At the Report stage in another place the Opposition again put down their Amendment, but the Government brought forward an Amendment of their own which had the effect of limiting the exercise of the power to modify legislation by providing that provisions included in an order by virtue of subsection (5) must be "incidental, consequential, transitional or supplementary".
The noble Baroness read out the provisions of paragraph (b) twice without referring back to these vitally important two lines which her noble friend Lord Colville said must govern the application of paragraph (b). I am sure that the noble Baroness did not intend to mislead anybody by doing this, but she did mislead her noble friend Lord Balfour, who proceeded to read the same thing again without these vital first two qualifying lines. I should like to stress the importance of these two lines and the fact that they were introduced at the Report stage in another place, and welcomed by Mr. Rossi in extremely generous terms. He gratefully accepted the Amendment and acknowledged that the Government had met the Opposition objection to the clause, and I am frankly surprised at the somewhat extravagant language used by noble Lords opposite in view of that full and generous acceptance of what the Government have done to meet some real doubts raised at the Committee stage.
I have been asked to give some indication of how we see this working, and I am certainly happy to do that. As my honourable friend explained at Commons Report stage, there needs to be provision for the modification of other legislation because the Bill does not include any new powers for local authorities to manage or dispose of land. Land which they acquire under the Bill will be managed and disposed of by virtue of the general powers in the Local Government Act. Any joint board would need power to manage and dispose of land, and it might therefore be necessary to modify the 1972 Act.
Beyond this general point, the extent to which the power in subsection (5)(b) would need to be used would depend on the precise functions and the role of a joint board. In some areas the local authorities might want a board to take

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on the whole function of making land available for private development. In another area the local authorities might want to continue to operate their Housing and Planning Act powers while leaving the major job of handling land for private development to the joint board. Another possibility would be for land acquisition to be handled by authorities, and for the joint board to be responsible only for management and disposal. It was to provide this sort of flexibility that Clause 2(1) was drafted in terms of "all or any" for the purposes of the Bill.
The noble Baroness asked me for an example of how we see this working. I shall attempt to give her one. It would be essential for an order setting up a board which was going to be the main acquiring authority for the land scheme to modify the present scheme. If local authorities handed all their functions over to a board they would no longer be "authorities" for the purposes of the Bill, because they would have handed all their functions over to a joint board. They would thus not be able to dispose of land with the right to carry out development under Clause 21(3). Clause 21(9) might need modification so as to give the local authorities in the area of the joint board the same treatment as local authorities in Wales. Similarly, the Bill might need modifying to ensure that the joint board received copies of planning applications, as the Land Authority for Wales will do.
May I end by making a general point about this clause; that is, what kind of orders we are talking about in any event. These are orders which the Secretary of State shall not make unless all the authorities who are concerned agree, and this is in subsection (2) of the clause. Either we have to have the agreement of all the local authorities who are involved—and after all it is their powers which are affected—or alternatively there has to be what I understand is one of the main planks of the Opposition's objection to this Bill, a public inquiry. If there is a public inquiry held, whatever the Secretary of State then does has to be brought before Parliament. I should have thought that in this clause the Government are being as open and as generous in going to public participation and inquiries as could possibly be expected in view of
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what is actually being done, which is setting up joint boards with the agreement of the local authorities concerned.
Lord SANDFORD: May I ask the noble Lord whether he is quite sure that he is right on one small point before my noble friend answers? Is not the position that unless all the local authorities agree the Secretary of State has to hold an inquiry, but the joint board can be set up without the agreement of all the local authorities?
Lord MELCHETT: Yes, it can after an inquiry, as I said; and once a Resolution has been taken, subject to annulment in both Houses of Parliament.
The Earl of BALFOUR: May I just raise one more point? I am grateful for what has been said so far. Subsection (5) says:
"An order under this section may make … supplementary provision as appears to the Secretary of State to be necessary …and, in particular—
(b) may adapt or modify any of the provisions of this Act or of any other enactment concerning the acquisition of land"
I am concerned with "supplementary provision" as much as anything else. I feel that that is extending the powers here beyond what a single local authority might be able to do in the acquisition of land.
Lord MELCHETT: Perhaps I can reassure the noble Earl that, as I understand it, a modification to an enactment to give greater powers to a board than its constituent authorities would not in fact be consequential, supplementary and so on. The main purpose of this is not to give powers to the board but to preserve the position of the constituent local authorities.
Viscount GAGE: Could the noble Lord say where in this Bill there appear the limiting words which pleased Mr. Rossi?
Lord MELCHETT: They appear on page 3, lines 19 and 20.
Baroness YOUNG: I am grateful for the explanation given by the noble Lord, Lord Melchett, and in any observations we make we are of course grateful for many of the Amendments which have been made as the Bill has proceeded through Parliament, certainly on the recommendation of my noble friends in

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another place, and this is one Amendment which has arisen as a result of extensive debate there. I am not altogether satisfied with the explanation that has been given, because it still remains stated in very general terms and it does not seem to me that we know precisely the circumstances in which this could be used. We are being asked to decide an issue without really understanding all the circumstances in which it could be used and we are, therefore, justified in the criticisms
we have made of it, in that we are being asked to accept part of this Bill without knowing fully the kind of commitments into which we are entering. At this stage, I do not feel inclined to withdraw my Amendment.
6.21 p.m.
On Question, Whether the said Amendment (No. 8A) shall be agreed to?
Their Lordships divided: Contents, 111; Not-Contents, 67.

CONTENTS

Aberdare, L.

Ferrier, L.

O'Hagan, L.

Alexander of Tunis, E.

Gage, V.

Onslow, E.

Alport, L.

Gainford, L.

Orr-Ewing, L.

Atholl, D.

Garner, L.

Penrhyn, L.

Balfour, E.

Glasgow, E.

Pike, B.

Balfour of Inchrye, L.

Glendevon, L.

Rankeillour, L.

Belstead, L.

Grenfell, L.

Rathcreedan, L.

Berkeley, B.

Gridley, L.

Redesdale, L.

Blake, L.

Hanworth, V.

Rhyl, L.

Bradford, E.

Harmar-Nicholls, L.

Ridley, V.

Brecon, L.

Harvey of Tasburgh, L.

Robertson of Oakridge, L.

Brougham and Vaux, L.

Hawke, L.

Ruthven of Freeland, Ly.

Caccia, L.

Hertford, M.

St. Aldwyn, E.

Camoys, L.

Home of the Hirsel, L.

St. Davids, V.

Campbell of Croy, L.

Hornsby-Smith, B.

Salisbury, M.

Carrington, L.

Inglewood, L.

Sandford, L.

Cathcart, E.

Killearn, L.

Sandys, L.

Clifford of Chudleigh, L.

Kilmany, L.

Savile, L.

Clitheroe, L.

Kinnard, L.

Sherfield, L.

Colville of Culross, V.

Long, V.

Slim, V.

Cork and Orrery, E.

Loudoun, C.

Somers, L.

Cornwallis, L.

Lucas of Chilworth, L.

Stamp, L.

Cottesloe, L.

Lyell, L.

Stanley of Alderley, L.

Cowley, E.

Macpherson of Drumochter, L.

Strathclyde, L.

Cullen of Ashbourne, L.

Mancroft, L.

Strathcona and Mount Royal, L.

Daventry, V.

Mansfield, E.

De L'Isle, V.

Margadale, L.

Strathspey, L.

Denham, L.

Merrivale, L,

Stuart of Findhorn, V.

Digby, L.

Mersey, V.

Sudeley, L.

Drumalbyn, L.

Middleton, L.

Swansea, L.

Dundee, E.

Monck, V.

Tenby, V.

Ebbisham, L.

Monson, L.

Vickers, B.

Ellenborough, L.

Mowbray and Stourton, L. [Teller.]

Vivian, L.

Elles, B.

Ward of North Tyneside, B.

Elliot of Harwood, B.

Netherthorpe, L.

Ward of Witley, V.

Elton, L. [Teller.]

Newall, L.

Windlesham, L.

Emmet of Amberley, B.

Northchurch, B.

Young, B.

Ferrers, E.

Nugent of Guildford, L.

NOT-CONTENTS

Amulree, L.

Cudlipp, L.

Hoy, L.

Arwyn, L.

Darwen, L.

Jacques, L. [Teller.]

Balogh, L.

Douglass of Cleveland, L.

Janner, L.

Banks, L.

Elwyn-Jones, L.

Kirkhill, L.

Beaumont of Whitley, L.

Feather, L.

Leatherland, L.

Beswick, L.

Foot, L.

Lee of Newton, L.

Birk, B.

Gaitskell, B.

Llewelyn-Davies of Hastoe, B.

Blyton, L.

Gardiner, L.

Lloyd of Hampstead, L.

Brockway, L.

Gordon-Walker, L.

Lovell-Davis, L.

Buckinghamshire, E.

Goronwy-Roberts, L.

Lyons of Brighton, L.

Champion, L.

Hale, L.

Maelor, L.

Collison, L.

Hall, V.

Mais, L.

Cooper of Stockton Heath, L.

Harris of Greenwich, L.

Melchett, L.

Crook, L.

Henley, L,

Meston, L.

Crowther-Hunt, L.

Houghton of Sowerby, L.

Milner of Leeds, L.

Morris of Kenwood, L.

Segal, L.

Taylor of Gryfe, L.

Pannell, L.

Shepherd, L. (Lord Privy Seal.)

Taylor of Mansfield, L

Peddie, L.

Shinwell, L.

Wallace of Coslany, L.

Phillips, B.

Slater, L.

Walston, L.

Platt, L.

Stedman, B.

Wells-Pestell, L.

Raglan, L.

Stewart of Alvechurch, B.

Wigoder, L.

Rhodes, L.

Strabolgi, L. [Teller.]

Winterbottom, L.

Rusholme, L.

Moved accordingly and, on Question, Motion agreed to.

Resolved in the affirmative, and Amendment agreed to accordingly.
6.30 p.m.
Viscount COLVILLE of CULROSS Viscount COLVILLE of CULROSS moved Amendment No. 10A:
Page 3, line 32, leave out ("one") and insert ("three").
The noble Viscount said: I draw the attention of the Committee to subsection (7) of this clause. It sounded to me, listening just now to the noble Lord, Lord Melchett, as though the Government did not have at present in contemplation urgent orders for the setting up of joint boards, which they are simply longing to bring into existence. I am a little surprised to see the necessity to put in subsection (7). It does not seem to me, unless there is great urgency and the Government feel that they should perhaps have a certain modesty and restraint in their actions—so that they leave a month between the passing of the measure and the bringing into force of an order setting up a joint board—that there is any necessity to have this subsection at all.
So the first thing I should like to ask is why we need the subsection. If we did not have the subsection, what difference would it make and why would it not be possible for the Government to bring into force at such time, if ever, as they wish to set up a joint board, the order doing so? Would they in any way be inconvenienced if we took this out? If they would, I am sure they will say so; but, in that case, would they please say why they wish to specify the period of a month? It seems indecent haste. I did not hear the noble Lord suggesting that they were going to have an order of this sort in a month, but perhaps they are. Perhaps there are recalcitrant local authorities which they wish to coerce by joining them together with others which are less unwilling to carry out the provisions of this Bill. Is that what they have in mind? At any rate, if either the noble Lord or the noble Baroness will explain this, I believe that we shall be greatly reinforced in our understanding, because
1316
none of the research that I have been able to do seems to suggest the necessity for having it at all and certainly not for having a period of one month. Perhaps three months would give sufficient time if we have to have a period specified at all. I beg to move.
Lord MELCHETT: The reason for having a period of one month is that a delay of one month after Royal Assent is frequently used in legislation. This is a standard period which is designed to allow time for the printing of the Act and for all those concerned to familiarise themselves with its provisions. There is, in our view, no logical reason for extending the period to three months in this particular case. Noble Lords opposite have made it very clear that they do not like the joint board provisions in Clause 2, though I confess that I cannot for the life of me understand why. However, if Mr. Rossi cannot convince noble Lords opposite that there is nothing to worry about, I am quite sure I cannot. But, if, Clause 2 is to stay in the Bill, there is really nothing to be said for making arbitrary amendments which would limit its usefulness, and I suggest to the noble Viscount that that is what his Amendment will do.
If there is a case for a joint board in any area—and this is a matter for the local authorities concerned and for the Secretary of State—it would clearly be desirable for the board to be set up as soon as possible, so that it can make the necessary preparations for beginning to operate the scheme when the first appointed day arrives, which will of course be fairly soon after the passing of the Bill. The Amendment would simply make those arrangements more difficult and protracted.
Viscount COLVILLE of CULROSS: That will not do at all. The passing of this Bill will now happen within a few weeks, I assume, because I have no doubt that the Government will ensure that in the other place everything is whipped

1317
through. But the noble Lord says that, within a month of that, they might want to set up a joint board. What I want to know is, which one? Let us hear the details. We shall be delighted to know what are the arrangements that noble Lords opposite wish to incorporate in an order. The noble Lord says blithely that one month is the standard period to allow everybody to get used to and to understand the contents of a Bill after it has been printed. But what about the regulations under this Bill? There will be thousands of regulations under this Bill. They will not be printed in a month. They will not be available, let alone understood, within a month. Is the noble Lord really going to say that all the regulations—for instance, those under Clause 3 and all the other very important regulations without which the legislation will not work—will be available within a month of the passing of this Bill? If so, he can show us a draft of them now. They must be ready for printing as well. Will the noble Lord show us drafts of the regulations which are going to be made under Clause 3 if he wants to bring this power into force and be as flexible as all that? I hope that the noble Lord will think about this again and produce a more convincing answer.
Lord MELCHETT: Would the noble Viscount mind telling me something for a change? If two local authorities want to set up a joint board, why does the noble Viscount want to stop them for three months?
Viscount COLVILLE of CULROSS: Precisely for the reason I have given. Within the period of a month after the Bill has been passed, I do not believe that half the subordinate legislation which will fall to be made under it will be available to anyone. It will not be there.
Lord MELCHETT: If I could interrupt the noble Viscount before he goes off into the question of regulations, which, if I may say so with great respect, has nothing to do with the clause, all local authorities in England will be operating the Bill. They will be preparing to operate it and getting their land acquisition and management schemes ready once the Bill becomes an Act. If, in one particular area, authorities want to set up a joint board, why does the noble
1318
Viscount want to stop them? It has nothing to do with the regulations and whether they are ready at all.
Viscount COLVILLE of CULROSS: The noble Lord justified the period of one month by saying that that was the ordinary period of time within which, after the Act has been passed, it may be printed and its contents made known to and understood by the public. What I am saying is that that is a wholly unreasonable suggestion to make in relation to this Bill. It is perfectly true that those who have followed it may know what is in the Bill and that it may have been printed; but it will not in any way follow that they will know what are the real details of these schemes and, indeed, I venture to suggest that none of the regulations will be ready to be seen by the public.
Lord MELCHETT: But this has nothing to do with the regulations.
Viscount COLVILLE of CULROSS: The noble Lord suggests that the period of one month is to enable members of the public and others concerned to know what is in the Bill. It has always been one of the complaints of everybody that there is virtually nothing in the Bill. It is all being done by subordinate legislation, by regulations and orders and things of that sort. A month after the passing of this Act nobody will be any the wiser than they are now, and I venture to suggest that they will still be relying on non-statutory explanation documents and upon things called "the scope of the Bill". Those are very helpful to Parliament, but they offer no sort of guidance to people in local authorities who are concerned with the arrangements, nor to the people who will be having to deal with joint boards, or people who are concerned with all sorts of aspects of this matter. The noble Lord really cannot say that it will be possible for anybody to understand this within a month after the Bill has passed. I suggest that we should extend this period so that at least we may get some basic details to be laid by different forms of subordinate legislation clear before us all before there is any question of a joint board being set up.
Baroness STEDMAN: I do not believe that my noble friend was saying that all the authorities would know all they

1319
should about the Bill within a month. What he was asking was, what objection is there if any two or more authorities want to get together before then and establish a joint board in order to operate the scheme? That would be perfectly proper and perfectly possible. All authorities are now looking at setting up their land management schemes and how they are to implement the Act when it gets on to the Statute Book, and no doubt some of them by this time have ideas as to whether they will work within their own county area or whether they want to co-operate with others and set up a joint board.
Viscount COLVILLE of CULROSS: I entirely appreciate that but, with respect, I should have thought that even the most bold local authorities, before they make that decision finally, would like to see some of the subordinate legislation. In any event, I covered the possibility which the noble Baroness has just mentioned by inviting the noble Lord, Lord Melchett, to tell us which were the authorities for the purposes of whom one month had to be put into the Bill. Which are the ones which are urgently wanting to set up joint boards? Let us know, and then we shall know whether it is necessary to put this into the Bill.
Lord MELCHETT: With great respect, I think that this is making a great nonsense out of nothing. We are passsing an Act of Parliament—I am very grateful for the noble Viscount's assurance that it will be an Act of Parliament in a few weeks' time, and I am sure that my right honourable friend will be much relieved to have that assurance from him—which will be operated by local authorities throughout England. As my noble friend said, all of them—or at least a great many of them—are already preparing land acquisition and management schemes. Authorities are already working. The fact that there is much subordinate legislation to be produced in future is not affecting, that work, which is already going on. If the noble Viscount wants an example, I can say that it is possible that the docklands area in London will be one instance of where a joint board would need to be set up fairly quickly once the Bill becomes an Act. But this is a matter for the local authorities,
1320
not for me or for the Secretary of State. Our intention is that if the local authorities come to the Secretary of State and say that they want to operate by way of a joint board, then they should be able to do so, if they are all agreed about it. It is not for me to say that there will be a joint board in this or that area. But the local authorities will be getting down to operating the Act, after it is passed.
So far as I can see, the noble Viscount is saying that in cases where local authorities themselves want to act jointly with a joint board they should be delayed; all the other local authorities in the country can get on with the job, and indeed are getting on with the job. But for some mysterious reason if they want to operate jointly—and it is up to them—there has to be a mysterious delay for three months. I really cannot see any justification whatsoever for that.
Lord FOOT: Has not the noble Viscount got himself into an impossibly illogical position? He started by saying that there was no need for this clause. In other words, he is saying that there is no need for any delay to be imposed in bringing a joint board into effect, but that if there is to be delay let it not be for a month, but for three months. One would have thought that the argument would be that the period was too long and thus perhaps it should be shortened, to bring it down to, say, a fortnight. But the noble Viscount says, No, there is no need for any delay at all, but if there is to be delay let us have a lot of it.
Viscount COLVILLE of CULROSS: I can answer that point with the greatest of ease. I suggested that there was no necessity for it because what it provides would probably have the effect in law if there were no such subsection. However, my suspicions are aroused that there is some specific need for it, which has caused it to be put in, because there is some great rush in setting up a certain joint board. I am interested in what the noble Lord, Lord Melchett, said. He kindly gave me an example of this. I will leave him with a very serious thought on this matter. An order under this provision, as we have just been discussing, may call for various consequential rearrangements of powers. I do not in any way suggest that there is anything wrong

1321
with that. But the noble Lord must remember that citizens—not just local authorities—will be involved in this, and people will want to know with whom they are to deal, and upon what terms. They will want to know which are the functions that are being exercised by a joint board, or by the old local authority—a district council, a county council, or whatever it may be; and they will want to know what modifications, if any, there are.
They will need to know these things because the land acquisition and management schemes will have an effect upon every individual who wishes to deal and transact in land. I do not think it unreasonable that they should be given a fairly good opportunity to understand this and to be able to see how it affects them. I hope that in view of what the noble Lord said there will be no orders made within a month of the passing of this Bill. But if there are, and if they are not brought before Parliament, I hope that they will be printed as Statutory Instruments so that at least people can obtain them. I also hope that the noble Lord will see that the terms of the order are made widely available in the locality where the joint board, if any, is being set up. It will be necessary for people to understand how this will work, and they will not necessarily have any easy access to the information unless it is made available locally. I believe that if the noble Lord thinks upon this matter he will see that it is one not just for the local authorities but for the citizens as well in the area concerned. The noble Lord really ought to take some account of that.
Lord MELCHETT: I accept that that is a serious point, but no noble Lord opposite has raised it before in any debate on this clause. It is the first serious point raised on this clause, and I shall certainly consider it.
Viscount COLVILLE OF CULROSS: Will the noble Lord do more than consider it? Will he see whether something can be done about it? I am sure that the noble Lord will consider it, because he is very courteous and always considers everything that we say. But very often he does absolutely nothing about it. Will he ensure that on this occasion he does something about it?
Lord MELCHETT: I will consider it and then decide whether or not anything should be done about it.
Amendment, by leave, withdrawn.
On Question, Whether Clause 2, as amended, shall stand part of the Bill?
6.47 p.m.
Lord SANDFORD: I want now to make two points, looking at this clause as a whole. First, I take exception to the noble Lord, Lord Melchett, saying that nobody had yet raised the question of the citizen's interest in all this. This was the very point that I made on my Amendment relating to Clause 8. But if I have to speak with more emphasis than I then did in order to register a point with the noble Lord, Lord Melchett, we may take rather longer than I had hoped. But I am not talking about that now. I want to talk about the general question of joint boards. The noble Lord remarked, in answer just now to my noble friend Lord Colville of Culross, that if local authorities find it necessary to have joint working arrangements, why do they not get on and set them up? Indeed, that is the main burden of my argument. There is provision in the Local Government Act, at Sections 101, 102, 103, and elsewhere, for many joint working arrangements between local authorities, involving joint committees, sharing staff, agency arrangements between local authorities, and sharing of costs and so on.
Therefore the first question is: what is there about all this which makes it necessary for the Secretary of State to take powers to interfere in the co-operative arrangements of the local authorities? My belief is that they have enough powers; they can get on with them. They will be involved in establishing the land acquisition and management schemes, and I need to be convinced that there is any need for the Secretary of State to have power to intervene at all. That is my first point.
My second point is this. If there are circumstances in which it is necessary for him to intervene in order to establish proper joint working arrangements between local authorities, surely it ought to be at their initiative. This does not square at all with the terms of subsection (1), which starts off roundly with the phrase,

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"If it appears to the Secretary of State expedient that a joint board should be established.…"
If it is the wish of the Government that these boards should be established only on the initiative of a majority of the localauthorities—and I believe that that probably is the case—then why on earth is it not in the Bill? I really see no reason why the clause should not be rephrased to make that clear. It would be far less offensive to local authorities if that were so.
My third question for the noble Lord is this. If he can say that the existing standard arrangements in the Local Government Act for joint working are unsatisfactory, and that therefore we have to have joint hoards, and that even though we might amend the clause so that the initiative for the setting up of one should come from the local authorities, then I should agree with him that an order is necessary to establish them. But if an order is necessary, why are not the standard procedures that are normally involved with provisional orders, and which are laid out in Section 240 of the Local Government Act, not adhered to in this case? The standard arrangements provide that a provisional order has to be advertised—there is no advertisement provision here—and that if there is any objection by individual citizens (and I stress, once again, that that was the very point I was making, and I am glad to know that the noble Lord agrees that it is important) that should be sufficient to cause a public local inquiry to be held.
Then there should be provision, as there is now, for the order to be subject to annulment in pursuance of a Resolution of either House of Parliament. Even that factor was not in the Bill when originally drafted. Perhaps the noble Lord could deal with those points before we decide whether Clause 2 is to form part of the Bill.
Viscount RIDLEY: I wonder whether I could say a little about this clause, having had some experience of joint boards in the field of local authorities. The noble Lord, Lord Melchett, said that there is nothing to worry about because the members of the joint boards would be appointed entirely by the local authorities
1324
and therefore democracy was entirely enshrined and secure. I would put it to your Lordships' Committee that this is by no means the case. Very often the greater absorbs the lesser in a joint board, and a member of an authority, once he becomes a member of a joint board, ceases to have a direct relationship to his electorate. This one remove is absolutely important in the operation of these sort of things, and I am therefore not in favour of a joint board situation. However, I can see that it could happen. The question I should like to ask the noble Lord. Lord Melchett, is: Is there anything in this (because I am still not clear from what has been said so far tonight) as to whether or not any authority could be compulsorily amalgamated with another authority? Because, as I am sure the noble Lord is aware, this has tremendous political overtones, and if it were possible then I believe it would be totally wrong.
Lord MELCHETT: The Government's general approach to the operation of the land scheme is that there should be maximum flexibility for local authorities to determine the arrangements which best suit their situation. Normally, this will be resolved within each county through the land acquisition and management schemes to be prepared under Clause 16 of the Bill. We know from our consultations with local authorities that some are considering setting up joint committees using their existing powers to do so, which the noble Lord, Lord Sand ford, spelt out in some detail. Normally, we would think that the setting up of a joint committee is as far as authorities will wish to go. But we deliberately intend to allow authorities the option to go further if they wish, so that they can put these joint arrangements on a formal statutory basis by setting up a joint board; and I mentioned the one instance, of which we know, of the London docklands, where serious thought is being given by all the authorities involved to setting up a joint board, and I should have thought that this was an area which was ideally suited to the operations of a joint board if one is set up. The power should also be Available, in particular, to deal with a situation in which there is a need for joint action across the county boundary: for example, for a major growth area which straddles two counties. Clause 2 may therefore serve a useful purpose in

1325
certain circumstances, and it should in our view be retained in the Bill.
As the noble Lord, Lord Sand ford, said, the ability to set up a joint board is a well-established feature of local government law. The provisions of Clause 2 basically follow those of Section 1 and Schedule 1 to the Town and Country Planning Act 1971. It may be said that the clause gives the Secretary of State the power to decide whether or not to set up a joint board, and that one could be set up in the teeth of opposition from the authorities involved. That is, of course, equally a feature of the 1971 Town and Country Planning Act, the provisions of which go back to the Town and Country Planning Act 1947. I hope that noble Lords opposite, and particularly the noble Viscount, Lord Ridley, who has great experience in these matters, will accept that that Act has not in practice worked so that joint boards have been set up in the teeth of opposition from the local authorities involved. Indeed, when we come to the clause in this Bill, at the Committee stage in another place my right honourable friend gave a firm assurance on the use of the clause (Hansard of the 13th May at col. 102) when he said:
"As with the Town and Country Planning Act 1971, our aim is not to foist joint boards on local authorities. We cannot use our powers without their views being known, and generally the local authorities would themselves be the ones to press for joint boards. But if we did not have this right, I hope the Committee will consider how inflexible it would all be … if one small authority could upset that, it would upset the whole planning and the whole basis not only of this Bill but of the 1971 Act."
To answer the noble Viscount, it is the case with this clause, as it is with the 1971 Act, that a joint board can be set up overriding the wishes of one, or it may be more than one, of the constituent authorities of the board, but only after a public inquiry and only after the order has been the subject of the Negative Resolution procedures in both Houses of Parliament. It would be very unsatisfactory, of course, to set up a joint board in the teeth of opposition from a local authority, and I hope the noble Viscount will accept that in practice this is not how similar powers in the 1971 Act have worked, that an assurance has been given by my right honourable friend that the powers will he operated in the
1326
same way, but that it is necessary to have the reserve powers so that one local authority cannot completely wreck the attempts by all the rest of the local authorities in that area to set up a joint board.
Viscount RIDLEY: I thought the noble Lord's Party believed in democracy. I now see that it is otherwise.
Lord MELCHETT: If the majority of the local authorities in an area want a joint board, that is a perfect example of democracy in action, I should have thought. An absolute assurance can be given that the Government do not intend to set up a joint board except where the authorities in an area, or at least a majority of them, want it. I hope that that answers the noble Viscount's question about democracy. As I have said, if any authority objects there must be a public inquiry, and the order will be subject to scrutiny by Parliament.
Lord SANDFORD: That does not answer the point at all. The noble Lord has now said that his right honourable friend the Secretary of State agrees that it would be unthinkable for him to establish a joint board without the request having come in the first case from the majority of the local authorities concerned. If that is so, why on earth can we not redraft Clause 2(1) so that it reads, for example:
"If, following representations from the local authorities concerned, it appears to the Secretary of State expedient that …"?
What possible harm would that do? What it would do, beneficially, is remove suspicions, which I must say have not been dispelled, that this power is here for the Secretary of State to impose his will on local authorities whether or not they like it and whether or not they ask for it. What possible harm could be done by an Amendment of that kind? I do not ask the noble Lord to accept an Amendment while he is on his feet—that would be very rash and unwise, and I have not drafted one in that sense—but I hope he will say now that in the light of what he has himself said and of what I have just pointed out to him he will consider an Amendment on those lines. It could not possibly do any harm, and it would do a great deal of good by removing these suspicions.

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The noble Lord has not answered one little bit the question I raised about an objection from individual members of the electorate. The normal provision in the case of orders by the Secretary of State is that a public local inquiry should be held, unless there is no objection from any of the people affected. This is the Community Land Bill. It is not being enacted for the benefit of the Secretary of State or of the local authorities, but for the individuals who make up the community. I cannot for the life of me see why the normal procedure should not be followed. I do not set so much store by the first point, but if it is the Secretary of State's intention to exercise these powers only when a request for that exercise comes from the local authorities concerned, because they have found for some reason or another that the joint working arrangements provided for in the Local Government Act are not sufficient, then for heaven's sake let us say so in the Bill.
Lord MELCHETT: I omitted to say when I was on my feet earlier that I did not agree with the noble Lord when he said that he and his noble friend Lord Ridley were both speaking about the same point, so far as individuals are concerned. The noble Lord, as I understood it, wanted individuals to have the right to object when an order was being made; the noble Viscount raised the point with me as regards individuals having the information about what order had been made. It seemed to me that these were quite different points, and I said that the noble Viscount had raised a new point when I thought he had. The noble Lord took strong objection to that, but I hope that having explained what I said he will see that I was right.
The noble Lord has now raised another point, if I may say so, not one that has been raised in the debates on any of the Amendments so far, and that is that the Secretary of State should wait until authorities approach him, as I understand it, before considering setting up a joint board. This is certainly, as I have said, our intention. It is not our intention to foist these boards on local authorities, and this is something which I would be prepared to consider. I would point out to the noble Lord that it was not found necessary
1328
to write this into the 1971 Act, that joint planning boards are very important and that they affect people's lives. I am sure that people living in the Peak District, if they were told that this is something which is not as important as the joint boards being set up under this Act, might well disagree. They find the planning restrictions imposed on them very onerous. It was not found necessary to write it into the 1971 Act. However, we are always open to sensible suggestions, and I will take it away and consider it.
Clause 2, as amended, agreed to.
Lord STRABOLGI: It may be for the convenience of the Committee that we break here for45 minutes—that is, until 7.45 p.m.—to take other business. I therefore beg to move that this House do now resume.
House resumed.

WHITE FISH AND HERRING SUBSIDIES (UNITED KINGDOM) (No. 2) SCHEME 1975
7.1 p.m.
Lord STRABOLGI Lord STRABOLGI rose to move, That the White Fish and Herring Subsidies (United Kingdom) (No. 2) Scheme 1975, laid before the House on 31st July, be approved. The noble Lord said: My Lords, I beg to move that the White Fish and Herring Subsidies (United Kingdom) (No. 2) Scheme 1975, which was laid before this House on 31st July, be approved. The purpose of this Order is to provide for payment of aid to the fishing fleet in respect of the third quarter of this calendar year. Details of the Government's proposals in this respect were announced in another place on 29th July and the requisite Order, before us today, was laid shortly before the Recess. Your Lordships will note that this is a No. 2 Order, indicating the existence of a predecessor. Perhaps it will help if I briefly describe the reasons leading up to it.
Earlier this year the Government became convinced, from the evidence available to it, that the United Kingdom's fishing fleet was suffering severe economic hardship, the result of rapidly mounting costs, principally of fuel and

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fuel derived products, unmatched by prices and overall returns obtainable for its catch. In short, fishing was unprofitable leading inevitably to retrenchment. Some prudent restructuring of the fleet was both inevitable and right but the pace of change was gathering an unhealthy momentum which, if not arrested, could have led to permanent structural damage. It was decided therefore to give temporary aid to the industry and details were announced on 27th February. Subsequently Parliament gave its approval by way of the White Fish and Herring Subsidies (UK) Scheme 1975, S.I., 1975, No. 970.
The Scheme was, as I have indicated, intended as a temporary measure only to allow the industry time to adjust to changed circumstances. However, as the period drew to a close the industry made strong representations, backed up by economic data, about the need for continued help. We found, from our close examination of this evidence, that while, during the period of respite provided by the aid, the industry had continued to rationalise its operations, particularly by the removal from service of a number of old, high-cost vessels of outmoded type, prices at port auctions which are the key to effective stability had not recovered significantly from the levels to which they had fallen 12 months previously. The industry continued to be squeezed therefore by factors largely outside its control.
The Government decided that circumstances were such as to justify the continuation of aid until the end of the year. But, as my right honourable friend said on 29th July, the actual rates of aid would be fixed in the first instance only for the quarter ended 30th September, the requirements of the final quarter being decided later in the light of circumstances then obtaining. We are today concerned with the instrument permitting payment of aid for the period July-September for which purpose the Government have set aside £2¼ million being additional to the sum of £6¼ million provided for the first half year.
The continuation Scheme follows very closely its predecessor except, of course, that it covers three not six months and the qualifying provisions are scaled down accordingly. The only change of substance is that the daily rate of aid payable
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to the two larger-vessel categories has been reduced by £10 per day, in line with the improved prospects for this type of vessel.
My Lords, as a result of the Recess we are past the closure date for the second Scheme. Claims for that period are being submitted and payments will commence as soon as Parliament has given its approval. I beg to move.
Moved, That the White Fish and Herring Subsidies (United Kingdom) (No. 2) Scheme 1975, laid before the House on 31st July, be approved.—(Lord Strabolgi.)
Earl FERRERS: My Lords, those of us who comprise the House will be grateful to the noble Lord, Lord Strabolgi, for having introduced and explained this Order. I think he said that early this year the fishing industry was facing an economic disaster. There is no doubt that 18 months ago the fishing industry was doing reasonably well and that suddenly there came a down turn, both of catch and of costs—if that is not a contradiction in terms—because the cost of oil sent the fishermen's costs roaring up; and this made a great inroad into the profitability of fishing. The Government were right to come to the aid of the fishing industry and to introduce a measure of support for it. The noble Lord, Lord Lovell-Davis, introduced a similar Order in June which allowed the Government to pay out to the industry, as I understand it, for six months up to the end of June. The Order which the noble Lord has introduced today allows the Government to pay a subsidy for the three months—not six months— up to the end of September. Of course, we are now in October.
My Lords, there are two major worries in this connection. One of them is that the first Order was for six months and the second for three months, from which it might be concluded that the Government were thinking of phasing out their support for the fishing industry. The other major worry—and I am sure there is a good reason for this although I cannot quite see it—is why it is necessary to do these things in retrospect. On the whole, if a subsidy is to be paid those involved in fishing operations would wish to know in advance whether it is to be paid. As I understand it, those people

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who are out fishing at the moment do not know, whether their operations are going to attract a subsidy. I hope that the noble Lord, Lord Strabolgi, will be able to explain why it is necessary to do things in this retrospective way and whether it is not possible to look forward.
Further, is he able to say whether another Order will be introduced allowing the Government to pay a subsidy for the current period? If so, will that Order be for three months or six months? Is the noble Lord also able to say what the level of payment will be? I think that the answer to my last question will be, "No!" But I would point out that the difficulty about this is that those engaged in fishing at the moment do not know whether a subsidy will be payable. I should like to ask the noble Lord whether the Government will pay some subsidy. Is there any element of doubt whether they will pay anything at all? If the noble Lord could answer that, it would be helpful.
I wonder why it is that the Government do not indicate whether they are prepared to pay a subsidy in advance, and I wonder whether it is because the Government are watching the returns for the fishing industry. If that is so, one might conclude that if the returns during the current period go up, the Government may feel that this is an inappropriate time at which to pay a subsidy. I would appreciate that argument if the noble Lord used it, but I do not believe it is fair on the fishing industry because those going out to fish now ought to know whether or not there is a subsidy. If they felt that if their prices went up that would exclude them from subsidy because the Government were watching the situation, this would not be fair. If the noble Lord, Lord Strabolgi, is able to throw any light on those few questions, I should be grateful.
7.11 p.m.
Lord STRABOLGI: My Lords, I am grateful to the noble Earl, Lord Ferrers, for welcoming this Order. I thought the points he raised were very fair, reasonable and important, and I will do my best to answer them. Before answering the point he made about why the Government are giving aid on this ad hoc basis, perhaps I could deal generally with the first point
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he made about the downturn of catch and costs due to oil and other factors. Of course, there were other reasons for the depressed fish prices.
In 1972 and 1973 the first hand prices of fish rose sharply along with the prices of other food commodities due to circumstances in world commodity markets which no one could have foreseen. In Western Europe food processors hastened to build up stocks of frozen fish, because they thought prices might rise further. The result was that heavy stocks were accumulated which overhung the market and depressed prices. I am glad to say now that the stock position is beginning to improve. Additionally, over the past two years the market in North America, which has traditionally taken substantial supplies of West European and Scandinavian cod, has been taking instead heavy supplies of Alaskan pollock. So the cod supplies which normally go to the United States of America and Canada have also been depressing prices of the West European market. The result has been that first-hand prices of fish have been static or even falling since the middle of 1974. But the American market, I am glad to say, is showing signs of return to traditional preference which should help a general recovery in prices.
With regard to the ad hoc basis, the original intention was to give aid for six months only. But recognising that difficulties remained, the Government undertook to continue aid until the end of the year. But, in view of the changeable situation, we felt it expedient to retain scope to adjust action as required by events. A lot of people would have liked us to ban imports as a means of helping the industry, but that proposition is not realistic. First, it would mean taking action against friendly nations like Norway and Iceland. Secondly, it would mean taking action against the housewife because we need those imports to help satisfy the demand from the consumer. The problem was much more one of price than of supply. After informal discussions at official level, the Norwegian Government unilaterally set up a minimum export price scheme which was aimed at avoiding disturbance of the market in the United Kingdom. This was a great help.
The Council of Ministers in Brussels had also recognised the serious nature

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of the problem affecting the market for fish, and at its meeting last April a package of measures was made up. The package was aimed at alleviating the depressing effects on the fish market of the heavy stocks of frozen fish. For us in the United Kingdom the most important measure was the introduction of reference prices for frozen fish. It is worth saying more about this point very briefly. First, it is a permanent system under the control of the Community itself and applicable to the whole Common Market. Secondly, if supplies of frozen fish enter from third countries below these reference prices, then the Community can restrict or even ban the imports.
These are wide powers but they are powers that will have to be used with an eye to balancing the needs of consumers and of producers. Then, of course, the level of the prices can be reviewed in the light of experience. Fourthly, the prices are broadly comparable with those in the Norwegian scheme. Some are a little higher, some are a little lower, but the general effect is the same. The important point, I suggest, is that the system is now on a permanent and Community-wide basis and under Community control.
Regarding the Government's long-term policy, what I can say at this stage is that this long term policy can be determined only in the light of the fishing opportunities open to us once the series of discussions on access to waters have reached a satisfactory conclusion. The noble Earl, Lord Ferrers, and other noble Lords will no doubt be aware that this coming Thursday there will be talks in London with the Icelandic Government. But, in general, our policy must be to secure for the nation, through the efforts of the United Kingdom's fishing fleet, as large a proportion of the fish resources open to it as is practicable and consistent with demand. This will require a viable industry of the right size and the Government will stand by an efficient industry capable of achieving this objective.
Earl FERRERS: My Lords, if I may have the indulgence of the House for one moment, may I ask the noble Lord whether he answered one of my questions? I think he did so, though not directly. I think he said that the subsidy
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was payable until the end of the year. Does one infer from that that the Government will be bringing forward another Order in three months' time to cover the current period?
Lord STRABOLGI: Yes, my Lords. The Government wished to ensure that the aid promised for the second half was geared to actual needs, and related of course to any changes which may occur. We shall certainly introduce another Order.
Lord STRABOLGI: My Lords, I beg to move that the House do now adjourn until 7.45 p.m.
The Sitting was suspended at 7.18 p.m. and resumed at 7.45 p.m.

COMMUNITY LAND BILL
House again in Committee.
Clause 3 [Meaning of relevant development]:
Baroness YOUNG Baroness YOUNG moved Amendment No. 11:
Page 3, line 40, after ("single") insert ("or semi-detached").
The noble Baroness said: On behalf of my noble friend Lord Balfour, I beg to move Amendment No. 11. I think it would be helpful, in moving this Amendment, if we could find out the Government's intention on subsection (3)(b). It is quite clear from the Amendment of my noble friend that he seeks to widen the exemption of the single dwelling-house so as to include a semi-detached house; and it may well be that the noble Lord, Lord Melchett, will tell us that a single dwelling-house in fact includes a semidetached house. If that were the case, it would be useful to know because it would widen this exemption. Perhaps I might start, at any rate, by asking that question and we will see where we go from there.
Lord MELCHETT: I do not know whether the noble Earl has anything further to add to what has been said by the noble Baroness, but the answer to the question that she put is, "Yes". It is already included in the term, and the Amendment is unnecessary.
The Earl of BALFOUR: I am sorry to be a few seconds late, but I am very pleased to have that assurance, particularly since in Scotland we shall not have semi-detached houses that are divided horizontally as well as vertically: so that if two people separately can build a house, in semi-detached portions, this is a great comfort. I am sure that all the persons concerned will be pleased to have this assurance. I beg leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
7.48 p.m.
Baroness YOUNG Baroness YOUNG moved Amendment No. 11A:
Page 3, line 42, at end insert—
("and
(d) replacement development as defined in Schedule (Applications for Replacement Development Certificate) to this Act.").
The noble Baroness said: I beg leave to move Amendment No. 11A and to speak at the same time to Amendment No. 15C. One group of people who are very concerned about the effect of the Community Land Bill are those who are responsible for pension funds. It must be apparent that pension funds and also insurance company funds, which come from personal or life assurance policies, need to be invested. In many cases they are invested in land or property. Clearly, the money accumulates and something must be done with it. In order to maintain the value of the pension at the end, or indeed that of the superannuating fund, it is necessary that the value of the money invested should keep up as far as possible with inflation. It has been estimated that about 12 million people are covered by occupational pension schemes. That figure includes just single people and not wives and families. So we are talking about enormous numbers of people, and for their sake I hope the Government will sympathetically consider this Amendment because it is their long-term future and, quite particularly, their retirement that we are talking about, together with the ultimate value of the pensions that they may receive.
This particular Amendment and the new Schedule that goes with it are to a very large extent concerned with the future. Because of the continuing nature of the obligations of pension funds and of insurance companies, those concerned with the management of these funds must
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take a very long view in framing their investment policies. Generally speaking, they look to a property investment as having a life of at least 150 years. They are concerned not merely with the buildings which may be on a site or even on part of a site at the time the investment is made, but of course in the redevelopment or rebuilding of the buildings when those buildings become obsolete. It must therefore be clear that if pension funds are to continue to invest in industrial and commercial buildings, their right to renew and to replace the buildings on the land as and when the investment criteria demand it must be preserved.
Under the Bill as it stands renewal and replacement of existing buildings will fall within the definition of "relevant development". If it does, then any planning consent granted for such renewal would be suspended and the work carried out, if at all, after the Authority had acquired the land. Although the Authority would have the power and eventually the duty to acquire, the Bill as it stands, except for some of the transitional cases, provides no mechanism by which the landowner can oblige the Authority to make up its mind or, having done so, to act. Moreover, there would be no certainty that the pension fund investor successful in such a planning application would receive back an interest in the land. The Authority may undertake the renewal itself or have someone else to do it, or simply sell with consent for it to be done by the purchaser.
The Government have announced over the last few weeks that there would be a new category of development to be defined. This comes as excepted development. This development is to be outside the scope of the suspension of planning permissions and indeed outside the acquisition duty. One of the types of excepted development is described in the Annex, Annex A, as:
"rebuilding or enlargement of a building so long as the floor space in the building as rebuilt or enlarged does not exceed by more than 10 per cent. the floor space in the building before rebuilding or enlargement".
I would be the first to acknowledge that this is a concession, an important concession and one that is appreciated. It therefore seems churlish to cavil at what is already a concession and ask for more. But the reason why I question the limit of 10 per cent., is that 10 per cent., which

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is excepted development, in effect becomes the maximum tolerance permitted, not as it is at the moment, the minimum tolerance. Those who are knowledgeable on this subject will say that in order to replace an obsolete building with the kind of up-to-date standards that would be expected by way of fire precautions and central heating and all things of this kind, it might well be necessary to go over the 10 per cent. tolerance, and therefore of course the excepted development would not apply.
Lord MELCHETT: I am sorry to interrupt the noble Baroness, but she said something I did not understand. In what way is the 10 per cent. currently a minimum level?
Baroness YOUNG: Perhaps I should explain it more clearly. At the moment, as I understand it, one can redevelop within a tolerance of 10 per cent. under the planning Acts without seeking further planning permission. If you wish to redevelop and exceed the area by more than 10 per cent. then you must seek a new planning permission. To that extent the 10 per cent. at the moment is a minimum. Under this Bill it would become a maximum, because no more than 10 per cent. is excepted development and therefore 10 per cent. is automatically a maximum.
The purpose of this Amendment is therefore to produce a more flexible and realistic test of what is replacement as opposed to new development and to have this concept written into the Bill rather than leaving it to regulations. It is, as I say, an Amendment which is concerned with something in the future, but as I believe it would make a great deal of difference to future investment of pension funds particularly, and to insurance companies, I hope very much that the Government will consider it. I do not necessarily expect an answer today. I should be quite happy if they would like to write to me about this, or consider it at a later stage. I beg to move.
7.55 p.m.
Lord MELCHETT: These Amendments are concerned with replacement development and although they refer to alteration and enlargement the main issue at which they are directed is clearly, as the noble Baroness said, the question of rebuilding. The concept of the right to
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rebuild within specified tolerances is already enshrined for valuation purposes within Schedule 8 to the Town and Country Planning Act 1971, as modified by Section 278 of that Act, where the tolerance is 10 per cent. on cubic capacity subject to a 10 per cent. increase in floor space in any given use. This floor space restriction was of course specifically introduced by the Administration of noble Lords opposite in 1963. This is a clearly defined and well-established tolerance and it is carried through both for acquisition and for valuation purposes by the proposed inclusion in excepted development of any rebuilding or enlargement up to a 10 per cent. increase in floor space and by the reference in Clause 25(3)(b) to development within Schedule 8 to the 1971 Act, because the 10 per cent. limit is also present in that Schedule.
The present Amendments are designed, as I understand it, to replace this tolerance by what I regret to say I can only describe as a rather vague and woolly definition of what is "reasonable". It is so vague that we have found it quite impossible to make any judgment as to what it would in practice achieve, except of course that there is no doubt that it would widen the limits at present in the Bill; and that is what I understand the noble Baroness intends. However, I would hope that the noble Baroness would accept that in any event it would be unacceptable to include this provision in legislation because of its vagueness. Indeed, one of the criticisms of the Bill which noble Lords opposite have made quite frequently is that the Bill is vague and unclear. I hope that at least we can avoid adding to that vagueness, if it in fact exists in the Bill at the moment.
In considering the issues involved it might be easiest if I separate two points: the planning issues involved in the attempt to widen the exclusion from relevant development, and the compensation issues involved in the proposed change in Clause 25. On planning, the Amendments are obviously framed with the intention of achieving maximum benefit for owners of existing buildings, rather than having any regard to the achievement of good planning. The point is that in urban areas an enormous amount can be achieved under the heading of replacement development with a small tolerance. We have already large

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urban buildings; substantial redevelopments can take place, and have taken place, within the 10 per cent. tolerances prescribed by Schedule 8 to the 1971 Act. The redevelopment of the buildings facing on to Victoria Street, which may not be everybody's favourite redevelopment, and is certainly not mine, is a case in point where the redevelopment took place—I am not concerned with who occupies the buildings; I am speaking about the facade. The fact is that the redevelopment took place within the 10 per cent. tolerance. So, obviously, very major redevelopments can take place within this, and for planning purposes it is important to be aware of that.
What, as I understand it, the noble Baroness is saying is that we should now go very much further than this and allow all "reasonable" rebuilding with enlargement normally to take place without public acquisition. The result of that would be, frankly, to drive a coach and horses through planning. Similar arguments apply to the Amendment which affects issues of compensation; that is, the Amendment to Clause 25. Again, the Government accept the compensation after the second appointed day shall include the value of the right to rebuild within Schedule 8 tolerances. Perhaps, in case there is any misunderstanding about this, I might emphasise that we must be clear that "current use value" means the value including the value of the right to put up a new building on the site, and that right to put up the new building includes the 10 per cent. tolerance. It has been my impression that there may have been some misunderstanding about this because of discussion about churches.
The Churches' worry, as I understand it, is not that they cannot rebuild a new church on the site but that nobody wants a new church on the site, so that is valueless. The fact is that in normal terms—in every case—the current use value will include the right to rebuild within the tolerances as I have said. In the case of large urban buildings, of course, such compensation may already be very substantial. What the Amendments are now proposing is that the owner of a building shall receive compensation determined on the basis of reasonable rebuilding, whereas I said that
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the definition of "reasonable" does not appear to be related to any concepts of good planning, whether or not the owner would ever stand the slightest chance of getting planning permission for this rebuilding within reasonable tolerances and, indeed, regardless of whether such development could even be justified in planning terms. The result would be to drive up the compensation payable by authorities to such an extent that it would never be viable for them to acquire a site in order to develop it in accordance with proper planning objectives. In the context of the Bill, and indeed in the context of proper planning generally, this must be wrong in principle.
The noble Baroness mentioned the case of pension funds. I am aware that the Amendment is introduced with pension funds very much in mind. I accept that it is true that in the past pension funds have tended to invest largely in freehold properties, but in principle there is no reason whatsoever why they should not invest in suitable leaseholds. It is my understanding that many funds have already invested in leaseholds and, indeed, in not exceptionally long leaseholds. Funds have been invested in leases of 99 years. What is important—and the Government fully accept this—is that where a pension fund invests in a leasehold they should be able to get an adequate return from their investment. Contrary to the mythology that has been put about, we intend that this should happen and are taking it into full account in considering both the length and the terms of leases that will be allowable. Therefore, there is no need to take rebuilding out of relevant development for this reason.
Secondly, there is the compensation argument. It is said that pension funds mut be able to receive compensation on the basis of the right to unlimited rebuilding in order to maintain the position of their investments. This is not accepted by the Government. The Government of noble Lords opposite introduced the 10 per cent. floor space limitation on the original right to rebuild, simply because in urban areas, and particularly in London, the right to rebuild within a simple 10 per cent. cubic capacity was proving too generous. This further limitation does not seem to have caused major problems for the pension funds, even though in London they have been living

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with this system for over 10 years. They know that planning permission will not be given for any rebuilding over and above this limitation. In other words, what is being asked for on behalf of the pension funds is, in effect, the removal of the limitation introduced by the Conservative Government and the substitution of a much more lenient limitation. Indeed, it may not be any limitation at all. In our view there is no justification for widening the limitation and I cannot accept that this Bill justifies such change. After that fairly lengthy explanation I hope that the noble Baroness will reconsider this Amendment.
8.5 p.m.
Lord CORNWALLIS: I do not know whether or not I am wide of the mark, but the noble Baroness included, I believe, Section 1 of her new Schedule in this Amendment. I should like to stress its importance and, if I may, to give the Committee one or two instances of what has happened to me. Please do not think that I do not agree with local government or that I am antagonistic towards it. I have been chairman of a county council, chairman of an education committee and chairman of goodness knows how many other things in local government. I should like to point out the importance of Section 1 of the new Schedule that has been put forward by the noble Baroness.
When I had to sell my own estate because of death duties 1 had a most beautiful cottage that was occupied by a poor old widow. Then I received an instruction that it was to be pulled down at once because it was unfit for human habitation. I said that I could not turn out the lady on to the street—anyhow, not until she was dead! Next, some Americans arrived at my door and offered me £10,000 for it. They wanted to take it to Carolina. That would have been lovely if they could have done it, but no, the cottage was to be pulled down at once.
I made two applications for the cottage to be put into order, both of which were refused. Then I let the farm to my son who is a working farmer. He made two applications, both of which were refused. I am making this point not because I am against local authorities but because I think it is quite unsuitable for them to have the authority to buy and sell land if they can take it over and then sell it at
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a higher price. This is what the Bill will allow them to do.
The next thing that happened was that they put a preservation order upon it. This was done by the old council who had not sent any of the papers to the new council. That finished it. I was so angry that I had to sell it at a loss. A builder bought it for practically nothing. It is now worth £30,000 to £40,000 and the builder's son is living in it.
In another case I wanted to put a new kitchen, lavatory and bathroom into a lovely cottage. Unfortunately, it is made of Tunbridge Wells stone. The same council said to me, "You can't do anything to the cottage unless you do the whole lot in Tunbridge Wells stone." I pulled down a wall which was made of Tunbridge Wells stone, so I tried that. But we found that we could not put in a damp course, so the whole project went by the way. I had to attend another meeting in that district where I met one of the councillors. I said, "You're a nice lot". He said, "What about?" and I told him. He said, "Oh, my Lord, they haven't tried that one on you, have they?" I said, "Yes, they have—very much so", whereupon he said, "My God!" He went straight back to the council. I do not have the remotest notion what he said to them, but within two days I received a telegram to say that I could do what I liked. So we go on.
I mentioned earlier that I had to sell my old home because of death duties. At that time it had 52 bedrooms. The people who bought it cannot live in it, although it has been reduced to 18 bedrooms, and they have asked whether they may build a small brick house in the garden in which to live. Their application has been turned down because my ancestors built 40 or 50 houses in that village, with no rent above a shilling a day, of Kentish ragstone. These people have been told that although the centre of the original mansion is of red brick the wings being covered with other stuff, they may not build a brick house in the garden because all of the houses in the village are of Kentish ragstone. I am going mad because of that kind of thing.
The muddle we shall get into on account of this Bill will be quite appalling, and that is why I make this point. The regional Councils are far too

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big to result in intelligent local government. Like the Greater London Council, they are completely out of hand. My other point is that we simply must have something like this to protect the unfortunate people who wish to improve their property. They must not be treated in the way I have been treated. I apologise if I have spoken too personally, but I thought that I should bring this situation to your Lordships' notice.
Lord MELCHETT: In response to the noble Lord, may I say that in so far as his first case was a criticism of the reorganisation of local government carried out under the previous Administration, I accept everything he said. In so far as the second case was an appalling example of how Members of your Lordships' House can" pull strings" with local authorities, I deplore it as much as he did. So far as the third case was concerned, I am afraid I thought that the council were absolutely right.
The Lord Bishop of LONDON: The noble Lord, Lord Melchett, caught me a little by surprise by making an unexpected reference to the churches in their relationship to current use value. If I heard him aright, I do not think he was correct in expressing the real grounds for our concern about this. Our concern is that when there is a redundant church its current use value as a redundant church is nothing. Therefore there may be a church standing on a valuable site, although if it is sold you can get nothing in respect of its value. In the London diocese we have quite a number of churches built of Kentish ragstone which after a hundred years are returning to the sand from which they came. They are redundant churches, and it would be a very serious thing for us if we were not able to develop the site simply because there was no value on the building which stood on the site. That is the reason for the concern of the churches about the current use value.
Baroness YOUNG: I thank the noble Lord, Lord Melchett, for his reply to my Amendment. I do not think the analogy he has given is an exact one. I entirely accept that the 10 per cent. floor space was introduced in the 1963 Act and has been used since then but, as I said, it is
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always open to somebody wishing to redevelop to apply for a further planning permission and to increase their floor space. Therefore, the difference between the situation as it exists now and as it will exist under the Bill is that 10 per cent. is the upper limit for the accepted development. I think the consequence will be that a certain amount of redevelopment will simply not take place at all. This would be unfortunate from everybody's point of view, and, therefore. I hope that the Government will look yet again at this matter.
The second distinction is that there is a difference between those (dare I say it?) developing in Victoria Street, or indeed commercial developers, and the type of people to whom I am referring, the pension funds, because the money that they are putting into land and property is not, as it were, their own money. It is somebody else's money and therefore it has to be looked after carefully and is a different proposition from a Government Department or somebody carrying out some commercial form of property development. So for that second reason I think this matter ought to be looked at.
I am quite prepared to accept that the drafting of this Amendment and the Schedule that goes with it to make it workable may be vague and wrong, and I entirely accept that it could be clarified and tightened up to meet some of the objections to it. But this is not an Amendment which I should lightly move if I did not feel that there was some real substance and grounds for fear on the part of pension funds that they will not be able to undertake the redevelopment that they think is right and so keep up the value of their investments. This is important, because so many people arc involved, and it would be a mistake to think that what was written into a planning Act in 1963 ought to be used on what the Government have called a major reform for land in 1975, as the same basis, because I do not think they are quite the same. I wonder therefore whether the Government would look at it again.
Lord MELCHETT: May I first say that on the question of churches, it was probably unwise of me to anticipate the debates that we shall have in a short

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time. I entirely accept everything that the right reverend Prelate has said, but the point I was making is that it is no good for the churches to be told that they can rebuild the church on the site where there happens to be a redundant church. It was from that position that I felt there might be a misconception about the basis of current use value for housing—where, of course, if you have a house which has fallen down it is very useful to be able to rebuild one on that site, assuming that anybody wants to live there.
Turning to the remarks made by the noble Baroness, Lady Young, we have given this careful thought and the figure of 10 per cent. at the moment for planning purposes is not either a minimum or a maximum. One has to have planning permission to redevelop both within and without the 10 per cent. tolerance. If I have it right, the 10 per cent. is there for valuation purposes and it is this conflict between the planning aspects of writing this into the Bill and the valuation aspects which make the framing of the Amendment particularly difficult. I have said that pension funds have nothing to fear and we shall particularly bear in mind, as the noble Baroness has said, that they are investing other people's money and also the importance, when they are investing in leases, that they should receive an adequate return on their funds. I will look at everything the noble Baroness has said and will see whether there is anything we can do to meet this point.
Baroness YOUNG: I am grateful for that offer and also for the point about leaseholds. This is a very important matter. The length of the lease is obviously extremely important to anybody investing in land or property and that is certainly a matter to which we shall return at later stages of the Bill, With that assurance I beg leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
8.19 p.m.
The Earl of BALFOUR The Earl of BALFOUR moved Amendment No. 12:
Page 3, line 42, at end insert—
("(1A) Where a particular class of development, which is not relevant development,

(a) is subject to a compulsory purchase order. and

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(b) becomes relevant development by regulation under this section, a person having a material interest in such development may then object to the compulsory purchase order.").

The noble Earl said: Where there is a change of development there is a problem under Clause 3(1), which reads:
"In this Act' relevant development' means any development except—"
and I will now read paragraph (c)—
"development of such class or classes as may be prescribed by the Secretary of State by regulations."
Also I am a little concerned about Clause 25(3), which reads:
"For the purpose of assessing the compensation"—
and then paragraph (d)—
"no account shall be taken of—
(i) any change, …"—
affecting development under paragraph 1 of Schedule 1 to the Bill.
What concerns me here is that a person may have had a compulsory purchase order served on him for, say, a statutory undertakings provision (or something like that) and then suddenly the order has been changed by the Secretary of State in respect of the class of relevant development, but by that time it is too late for the poor chap to appeal.
I am arguing in this Amendment that where a class of development which at the present moment is not relevant development and is subject to a compulsory purchase order, then becomes relevant development because the Secretary of State has changed his mind, the person concerned should then have a right to object to the compulsory purchase order, which he might not otherwise have bothered to do. This is very technical. Where the Secretary of State has changed his mind I feel that the individual person concerned should have a chance to object although he might not have tried to object before. I beg to move.
Lord MELCHETT: The noble Earl says that it is very technical, and I certainly agree with him if that was a reference to his explanation of the Amendment as well as to this Part of the Bill. I must confess, I am afraid, that I did not really follow what the noble Earl said in explanation. However, it may be helpful if I try to tell him what I think is the effect of the Amendment, and we can see

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whether there is any meeting between us. As I understood it, the Amendment was based on a misunderstanding. There is no power under the Bill to acquire land for exempt development, and here we are dealing with exempt development. It is specifically excluded in Clause 15(2). Secondly, where the land is being acquired for excepted development, then paragraph 1(2) of Schedule 4 specifically excludes the application of the modifications to compulsory purchase procedure in Schedule 4. This means that the normal compulsory purchase procedures will apply, and the owner will have the right to object as he would normally.
From what the noble Earl said, I think he was possibly talking about changes in the categories of relevant development. I do not think the Amendment of the noble Earl would necessarily affect that, but, on the other hand, changes in relevant development do not affect either compulsory purchase powers or compensation, so I do not think the point arises there either. I hope that with that explanation, the noble Earl will be satisfied.
Viscount COLVILLE of CULROSS: I do not think that the noble Lord, Lord Melchett, has entirely followed my noble friend Lord Balfour. With the greatest respect to my noble friend, I am also not sure that this is quite the right place in the Bill to put this, but the point is a real one. As I understand it, what my noble friend has been saying is that there is at the moment, or there would be when the Bill became law and the necessary regulations were made, a kind of development which was specified as being in some form or another not relevant development. Therefore, as the noble Lord rightly says, there would be certain provisions in Schedule 4 which did not apply. It is perfectly true that if in the course of a compulsory acquisition the general development order, or one of the other development orders, was changed so that it became relevant development, an objection could be dealt with under Schedule 4 on the merits of the case. I think that is what the noble Lord has said so far.
But I do not believe that it would be possible for the Secretary of State to entertain any objection which arose on the grounds that because there had been
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in the period of time between the making of the compulsory purchase order and its confirmation, a change in the general development order, there had been a change in the compensation code which applied to that particular compulsory acquisition. I do not believe an objection would be able to be heard upon that matter, because it would be a matter of law, and something which only the tribunal dealing with compensation could deal with. It would be excluded by the terms of Schedule 4 to this Bill.
I think I am right in saying that my noble friend has said that where someone is put in that position, because there has been, in the middle of a transaction, a change in the law, he should have some sort of protection. If that is right, and if that is what he is suggesting, it seems to me possible that this might be a subject for the financial hardship tribunals, and should be drafted into that provision rather than being dealt with here. I think it is a real point, and one which at the moment the machinery of the Bill does not begin to cover.
The Earl of BALFOUR: My noble friend Lord Colville of Culross has put the matter much better than I. This is exactly the point. The law has been changed in the course of its procedure on a compulsory purchase order. That is it in a nutshell.
Lord MELCHETT: I take that point. I think this could arise on the borderline between relevant and excepted development, but I do not think it applies in this Part of the Bill, as the noble Viscount, Lord Colville of Culross, says, where we are talking about the difference between" exempt" and "excepted", where any change would not affect either the compensation code or the right to object to a compulsory purchase order. But I take the point. I am advised that in order for the Schedule 4 modifications to apply, the order must say that the land is development land. Any changes in relevant development after then would not affect the position of that land, nor would any changes in a general development order affect the position. I think the answer is that the order must apply to the piece of land, and the development for which it is being purchased. Any changes in the order are not going to affect that bit of land for that bit of development,

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although in future they might affect the land for a different development.
Viscount COLVILLE of CULROSS: It may not affect the compulsory purchase order, but does it affect the compensation that would then be assessed on the basis of that compulsory purchase order? I think that is the missing link in the information that the noble Lord has been given.
Lord MELCHETT: I do not think it would affect the compensation. However, if I am wrong perhaps I can write to the noble Viscount and the noble Earl.
The Earl of BALFOUR: Perhaps we may leave this extremely technical point for the moment. I beg leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
8.27 p.m.
Lord MIDDLETON Lord MIDDLETON moved Amendment No. 12A:
Page 4, line 5, at end insert—
("( ) Relevant development shall not include a material change of use of land where the proposed use is, or will be, wholly or mainly by persons who participate in physical recreation on that land by means of organised games, sport or leisure recreation.").
The noble Lord said: The purpose of this Amendment is to ensure that when land is developed from, say, an agricultural use state to a sport or leisure use state, then that development should not come under the heading of relevant development. The meaning and interpretation of the term "relevant development" in this Bill will also have to be interpreted in like manner for the purposes of the Development Land Tax Bill. Therefore, it seems to me to be desirable to make exempt from public acquisition and taxation a material change of use that results in the use of land for physical recreation. I beg to move.
Lord CORNWALLIS: I should briefly like to support this Amendment, as one who started the playing fields movement some 50 years ago, and who started the counties movement at the same time, where thousands of acres have been given to recreation. We now find some encroachment. If this perfectly ordinary Amendment to safeguard that could be made, it would be a very wise thing to do.
Baroness BIRK: The effect of this Amendment would be to exclude from
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the definition of "relevant development" a material change of use of land where that use is wholly or mainly for sport or recreation. The intention of the Government is that development for the purposes of sport and recreation should not normally come within the operation of the land scheme. The only exception would be major developments such as major sports complexes which are clearly significant in planning terms, and thus ought to fall within the scheme. In any event, these are nearly always ventures in which the local authority is closely involved. But the normal run of recreational development should normally be able to go ahead without public intervention, and the category of excepted development is designed to cover just this sort of case.
There is really no difference between the Government and Opposition on objectives. It is simply a question of how those objectives are to be achieved. The view of the Government is that the right way to exclude development from the definition of relevant development is, in general, by the use of the regulation-making power in Clause 3 of the Bill. We have already indicated the intended scope of these regulations in Annex A to the Paper on the scope of the community land scheme. The two exceptions, of buildings up to 10,000 square feet in floor space and all material changes of use, taken together will except all but major recreational development from the land scheme. It is important to stress here that the Central Council for Physical Recreation and the Sports Council have declared themselves broadly content with this approach. Of course, there will be further consultations with interested bodies on the draft regulations.
The present Amendment is designed to write some exceptions into the Bill itself. This we do not feel is necessary or desirable, although I take very much the point made by the noble Lord, Lord Middleton. First, the power to make regulations has been put into the Bill precisely to cover this kind of situation. It would be wrong to ignore it and instead to write everything into the Bill. In this way we would do away with the flexibility, which is one of the reasons for doing a great deal of this by regulations. Secondly, it is important to get the exceptions right, and here the Opposition Amendment, if I may say so, falls down.

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Take, for example, the case of a golf course. The Amendment would bring the course outside relevant development because it is a change of use of the land, but the building of the club house, so far as the Amendment is concerned, would still be within relevant development. I would not have thought this was the result that we want to achieve. Again the right answer is to leave the exceptions to the regulations; in this way there is time, in consultation with interested bodies, to get it right. The position of Parliament will be fully safeguarded as the regulations will be subject to approval in draft by both Houses of Parliament. If some of the exceptions were in the Bill and some in regulations, this could be even more confusing. It is true that the bodies which are concerned would be far more unhappy than they are with the present situation, in which they feel perfectly reassured at the present time.
Lord HYLTON: I do not know what happens in other counties, but I do know that in Somerset and Avon it is almost unknown for the local authority ever to have to go to compulsory purchase in order to obtain, perhaps, a school playing field. I think the Government ought to be very careful, before they go relying on regulations, that they do not dry up the supply of land for playing fields. If something could be put in the Bill which is reasonably clear, then I think owners would be reassured and would continue to make land available. If, on the other hand, the Government rely on unpublished regulations, owners are likely to take fright and the supply is likely to be cut off.
Lord MIDDLETON: I am grateful to the noble Baroness for her explanation that most recreational development will be covered by the Secretary of State's regulations in due course. As I understand the noble Baroness, it will become excepted development. I have no doubt that we shall be hearing other references to the term "excepted" very shortly. Much criticism has been levelled at this Bill on the grounds that there is so much uncertainty at present while we wait for the many regulations that will have to be made under Clause 3(1)(c). May I take this opportunity of asking the noble Baroness whether she can assure
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us that draft regulations will be available in due course for consultations with interested bodies. We can only hope that the regulations that will cover recreational use such as we have been discussing will be made available before too long. Would the noble Baroness like to reply to the question about consultation?
Baroness BIRK: Perhaps I could first reply to the point raised by the noble Lord, Lord Hylton. The regulations will not be unpublished; they are Statutory Instruments and will be published. In many ways the situation will be far better than at the moment from the point of view of recreational development.
In answer to the noble Lord, Lord Middleton, consultations have already taken place. I feel very strongly about this point in any case. Perhaps I might just read something from the Central Council for Physical Recreation, which might reassure the noble Lord. The chairman of the Major Spectator Sports Division reported that at the recent meeting between my Department and the CCPR he had received a full explanation of the intention of the background document, and from what he heard it seemed clear that sport and recreation had very little to fear from the implementation of the Bill, which did not in any way change or override the existing planning rights of the national or local authorities in acquiring land for development purposes. Consequently, it was seen that the Bill should serve as an instrument to alert governing bodies and individual sports clubs to the need under the present law to safeguard their positions by watching carefully any attempts on the part of local authorities through their existing planning rights to acquire land. In short, the Bill supplements the existing planning system. I think that really does tic it up.
I would only repeat that I think one has to realise the disadvantages of trying to spell out everything in the Bill, because one might find one has left out something which perhaps in the near or distant future it becomes very important to include in the Bill, whereas with regulations it would be flexible. As well as what I have just read, the Sports Council is quite satisfied with this. I hope that with this explanation the noble Lord will withdraw this Amendment.
Lord HAWKE: I gather from what the noble Baroness has said that the regulations are likely to be sympathetic to the provision of new golf courses, of which there is a great shortage in this country, both private and municipal. Can she confirm that?
Baroness BIRK: I do not think I ought to go out on a limb, or a club, for one sport or another. I was using it as an example. I think we can take it that the legislation is sympathetic to the provision of sport and the conservation of sport and recreational facilities.
Lord MIDDLETON: I am most grateful to the noble Baroness. I think the Sports Council will be all the more satisfied if the regulations are forthcoming at a very early stage. In view of what the noble Baroness has said, I beg leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
On Question, Whether Clause 3 shall stand part of the Bill?
8.38 p.m.
Baroness YOUNG: This is a most important clause in the Bill, and I feel bound to say, in moving a debate on Whether the Clause shall stand part of the Bill?, that a great deal of the difficulty the Government have found in answering questions and in dealing with this Bill has been due to the fears aroused because so much is left still to be determined by regulations which we have not yet seen, of which the noble Lord, Lord Middleton, has quoted very good examples, as has the noble Lord, Lord Hylton. I think these are very real fears, and I think they will have a consequent effect upon peoples' willingness to sell land, because they simply will not understand what the position is. We are, of course, grateful for the crumbs that have been put before us by way of the exceptions to relevant development, and of course the very short explanation that has been given in Annex A, which was circulated shortly before our Second Reading. Nevertheless, a memorandum is not the same as seeing the regulations.
It is important that we should know as much as we can at this stage as to what is to be included in the regulations, what advice the Government are to take on framing them. Apart from
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anything else, they are not going to be in the same category, as I understand it, as the exempted development in Schedule 1. Even if something is an excepted development it will still be possible for a local authority compulsorily to acquire it under Clause 15. It, therefore, is in a very different and a much weaker position. I think everybody should know where they stand on it.
I feel certain that my colleagues will return to subsection (1)(c), but I should like to press the noble Baroness much more on what is meant by subsection (1)(b). One of the great changes from the No. 2 Bill that we had in the House is the complete disappearance of the old Clause 4, which gave an exemption for single plots which were owned on White Paper day. That has all gone. I should like to be quite sure that subsection (1)(b) covers all the instances originally in the Bill under the old Clause 4; that is, the single plot, with all the detailed Amendments that were put into the old Clause 4 as to who might own it and to whom it might eventually be left or be sold.
I should like to be sure that any type of single dwelling is covered by this paragraph. We have already had the answer that a semi-detached house is covered by it. Does that mean that terraced houses are covered? Is a line of terraced houses owned by owner-occupiers also excepted from "relevant development"? If someone owns a single plot, can he sell it to somebody else, and that still be excepted? It does not seem to me that the Bill anywhere makes clear what this means, and as approximately 51 per cent. of the population are owner-occupiers it is essential that they should know where they stand.
It is essential because if we look at Clause 15, the powers of an authority to acquire, again the wording has changed from the No. 2 Bill, where, in the former clause, the reference was to, "relevant development", whereas in this clause we have." land which … is suitable for development," which of course is entirely different from "relevant development".
may be misunderstanding this, but it seems to me that the assurances which the Government have given are not nearly as sound as they would first appear. I should like a clear answer on this point, and I hope that the noble Baroness will be able to supply one.
8.42 p.m.
Lord SANDYS: I should like to support my noble friend Lady Young on this. As it is the first time during this evening that I have contributed to the Committee, I should like to begin my remarks by thanking the noble Baroness and her staff for the lists of notes on clauses which she and her staff have prepared and sent to us. This is much appreciated, and it follows in line with what the noble Baroness said earlier this afternoon from our side and from this Bench:" We have tried to make this as comprehensible as possible. "I appreciate that, but I would point out what a different situation it is from the year 1968. I would draw your Lordships' attention to this particular year because it was the year in which the noble Baroness's previous noble friend on the Front Bench, the noble Lord, Lord Kennet, stood at the Box and introduced an important Bill, the Town and Country Planning Bill of that year.
When he introduced that important Bill to this House, I should like to remind the noble Baroness of the degree of trouble which he and the then Secretary of State, the present noble Lord, Lord Greenwood of Rossendale, took in informing Members of your Lordships' House and of another place on the intention of the Government on two important matters, both the Town and Country Planning Bill and other legislation. It is important to recognise the value of the consultation which then took place. We had certainly long but friendly discussions on those Bills which took place in that year. It is important to stress one further aspect in that the noble Baroness, in bringing before us the list of Amendments and the Schedules under which she believed we should discuss them and which were tabled at such a late hour this afternoon, introduced a somewhat difficult problem for your Lordships.
I turn from that to the essence of this clause. It is on the definition. It is a definition of "relevant development". I base my remarks largely on the terms used. We have recurring throughout the Bill the phrases, "relevant development", "exempt development", and "excepted development". I suggest that these are unfortunate choices of words. I take first the two, "exempt development" and "excepted development"; two English
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words as like, as one might expect, two peas—" Tweedledum development" and "Tweedledee development". The point is that they are similar except at their extremities. One is equipped with shoes, the other with boots, and they both kick. I believe that the terminology suggested by the Government is misleading and difficult for those who have to interpret and use the Bill, and I sincerely believe—though it is not for the Opposition to recommend terms—that the Government ought to think again about the respective terms they use. We believe that "relevant development" in this case is a bad choice; we believe that "excepted development" is a bad choice; and we believe that "exempt development" is a bad choice. We suggest to the noble Baroness that she "throws six" and starts again.
Viscount COLVILLE of CULROSS: I do not know whether I should be allowed to make a third speech from the Front Bench, but it is a narrow point. The noble Baroness may know that when I am not occupied on debating the Community Land Bill in your Lordships' House I am doing so outside. One of the disadvantages of the method of legislating which the present Government seem to be so entirely devoted to—which is by introducing a White Paper and some years later producing legislation to implement it (or one year at least), and then subordinate legislation to follow—is that people get a little confused about what is to be the law at the end of it all.
The point that my noble friend Lord Sandys has made about the helpfulness of some of the ancillary documents which have been produced is entirely endorsed by me, and they have been very helpful to me in this House and elsewhere. However, I wonder whether, in the course of answering this short debate, the noble Baroness could help me on one specific point. In the White Paper there was an arrangement whereby building land, land owned by builders on White Paper day, was to be exempted from most, if not all, of the processes in the Bill. It accords with my recollection that it was not only land in the freehold ownership of a builder on White Paper day but land which was subject to a binding contract by the builder to buy on White Paper day; that too, was to be exempt from the processes of this Bill. And so it says in

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various learned commentaries and journals which have discussed this matter. Annex A to the document The Scope of the Community Land Scheme, produced for the purposes of your Lordships and, I think, for those in another place, does not mention binding contracts, and those who have all this time thought that land which was subject to a binding contract on White Paper day are now faced with paragraph (2) which simply refers to freehold ownership on White Paper day.
As we are talking, among other things, about what is going to be in the regulations, I believe that a number of people would be greatly aided if they knew whether it was still land subject to a binding contract or only land which has actually been transferred and was in freehold ownership on White Paper day. It is only a small point, but I suppose it has caused me, and a number of people who have come to talk to me, about five or six hours of consultation and discussion. I have no idea how many other thousands of people in Britain have been equally perplexed by the discrepancy, and I think perhaps even now it would be a very good thing if we could get it cleared up.
8.50 p.m.
Baroness BIRK: As this Committee stage goes on and on I begin to think that I was too generous in the way in which I handed out all these papers; perhaps we have been too helpful to noble Lords opposite. I will begin by answering the point raised by the noble Viscount, Lord Colville of Culross, and, not being a planning lawyer, if I do not get it right I will write to him and let him know the answer. I think he used the word "exempted", but what he is I believe referring to is any case that is "excepted" and not "exempt".
Viscount COLVILLE of CULROSS: I did, and I am sorry; I should have said "excepted".
Baroness BIRK: What is excepted from the scheme is the development and not the land itself, and we have to keep this in mind all the way through. I accept that it becomes confusing and this is understandable because the word "land" is used when we are talking about development. In the case of categories which depend on the ownership of land and buildings, ownership is
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to be taken as extending to being under a binding contract to purchase, which I think answers the noble Viscount's question.
Viscount COLVILLE of CULROSS: That, therefore, should be interpolated into the paragraph in the very helpful Annexe—"Freehold includes land where there is a binding contract to purchase." I am very much obliged to the noble Baroness.
Baroness BIRK: If the noble Viscount will look at the general notes he will see there is a note which says:
"… any development carried out on land which was in the freehold ownership of a builder or of a residential or industrial developer on 12th September 1974. This exception"—
not exemption in this case—
"will continue if the land is subsequently sold to another builder or developer."
I hope that that is satisfactory and not only helps with the understanding of the Bill, but also helps the noble Viscount in his other, more remunerative, work outside.
I turn to the remarks of the noble Baroness, Lady Young. She and the noble Lord, Lord Sandys—and I will deal with these points together to save time, because the questions they asked are closely bound together—asked about relevant development and exempt and excepted development. "Relevant development", as the noble Lord pointed out, is the key definition which determines the scope of the land scheme, and it is intended to cover all development which is significant for the purposes of the scheme and where, when the full duty finally becomes operative, development should not he allowed to take place until the land is in, or has passed through, public ownership. This is the factor which determines the scope of the initial duty under Clause 17. I will not go further into that at this point because we will be considering the way it works out when we come to the later parts of the Bill, from Clause 17 onwards.
The definition in Clause 3 works by exclusion. In other words, it takes out of relevant development all development which is not significant for the purposes of the land scheme and which leaves all other development to fall within relevant

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development. The exclusions from relevant development are of two types. First, there is "exempt development", which is set out in Schedule 1 to the Bill. This is development which does not fall even within the acquisition power under Clause 15 and which is therefore unaffected by the land scheme. Given the objectives of the scheme, it is clear that this must be limited to relatively minor development.
When we come to excepted development, this is the category which covers the building, mentioned by the noble Baroness, of a single dwelling house and also any other development included in regulations made under Clause 3. What is excepted here is the building of the house. I hesitate to say that the noble Baroness was not clear about this, but it did not come over very clearly to me. In any event, it has nothing to do with excluding existing houses from acquisition, nor indeed did the former Clause 4. What is excepted is the building of a house. Clause 3(1)(b) covers all the circumstances of the old Clause 4 and goes much wider, because it covers any type of single dwelling, single detached, semi-detached, terraced or a self-contained flat.
Excepted development is development which will normally be able to go ahead without the land having to pass through public ownership and is therefore outside the general duty under Clause 17, the full duty under Clause 18, and all the provisions relating to the suspension of planning permission in Clauses 19 to 22, and no doubt we shall hear much more about that when we reach those clauses. This is, I think, the important point about which the noble Baroness was asking. Although excepted development is within the acquisition powers under Clause 15, there is a very strong presumption that this power will not normally be used, and in line with this, paragraph 1(2) of Schedule 4 specifically disapplies the changes in compulsory purchase procedures in Schedule 4 from any proposed acquisition for the purposes of excepted development. Excepted development will be defined in regulations subject to the Affirmative Resolution procedure, and, as I pointed out previously, these will be published and will be Statutory Instruments. The Government's
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proposals for what should be included in those regulations have now been made public and are contained in Annex A of the Paper Scope of the Community Land Scheme, but the precise definition of these will need further consideration in consultation with interested parties once the draft regulations are available.
The presumption with excepted development is that public acquisition will not normally be needed for such development. There will, however, be cases where it is right that authorities should intervene. An obvious example is where they could use their powers, perhaps buying by agreement, to facilitate recreational or small industrial development which would not otherwise take place. The powers would also be available for reasons of positive planning; here the authority would have to show that satisfactory development could not be achieved without public acquisition.
Both exempt and excepted development relate solely to development, and not to the land on which the development is proposed to take place. There will, of course, be nothing to prevent an authority from acquiring land for relevant development, even though there may be proposals for development which fall within excepted development. For example, an authority might want to buy land for a larger, more comprehensive scheme even though these were individual proposals for piecemeal development which would be within the excepted category. This is clearly essential if the necessary flexibility that the "excepted development" approach provides is not to lead to a highly undesirable distortion in the pattern of development.
Any development which is not excluded from relevant development by these exclusions will then fall within relevant development. But this definition must then be read in conjunction with the definition of "development land" in Clause 17(4) of the Bill, which defines development land as land needed for relevant development within 10 years. Only when all these definitions are satisfied will the development fall within the land scheme. I am sure that this is all quite simple and clear to noble Lords!
Several Noble Lords: Hear, hear!
Baroness BIRK: This is an important point and I thought noble Lords would

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welcome a full explanation of it, although we shall no doubt be discussing it at further stages of the Bill. The important point about the excepted part of the scheme is that there is the power to acquire but not the duty, and acquisition will be agreed to only in exceptional circumstances. Indeed, there may well be sale by agreement in some cases. If this is not so, then there may have to be a compulsory purchase order but there would always be an inquiry. As for the specific inclusion of the single dwelling house in the Bill, the point to which the noble Baroness drew attention—it being in the Bill rather than being put in regulations with the various other exceptions—we thought it right that this should be put into the Bill, because it was the result of a promise in the White Paper.
So far as the rest is concerned, once again, by putting it into the regulations we get the flexibility we consider desirable. Noble Lords have concentrated on the worry of restrictions, but they should also put their minds to the point that we may one day want to add to what is proposed now, and they would not want to constrict the future by writing everything into the Bill. If there are regulations, they can be added to. As I have pointed out, those regulations would have to be put before Parliament. It is surely better to have something flexible which can be added to, rather than make definite decisions now which would be binding for the future.
As to the situation of the owner-occupier with which the noble Baroness is very concerned, I would point out that we on this side of the Committee are also extremely concerned. The percentage of owner-occupation in this country has gone up progressively and has risen considerably more under successive Labour Governments than under Conservative Governments. As well as considering as we do that this is socially necessary, we must recognise that it would be very politically inept not to be conversant with this and very concerned about it. I feel that, as a result of consultations with outside organisations, and consideration of points put forward in another place we have now got the relationship between relevant development and exempted and excepted development right. I hope that the noble Baroness and noble Lords opposite will now be
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satisfied on this point of the Bill. If there are further points of detail, and points to be picked up which were raised on other clauses, perhaps we can save them for the clauses concerned when we reach them.
Lord SANDFORD: I think we are getting on rather well. When the noble Baroness started, I thought that we were doing particularly well, but she rather spoilt it when she read the last three pages of her brief. It is a great gain to have got rid of old Clauses 4 and 5, with all the qualifications and cautions which they contained, but, if I understood her earlier remarks aright, we have reached a happy position if she is correct in claiming that, like us, she is in favour of owner-occupation. I wish all her Labour colleagues in councils up and down the country were as much so, but it seems to me, leaving that to one side and to sum up for her, that we have now reached a position—and I hope that she will be able to confirm this—in which there is nothing in the Bill at present and will be nothing in regulations in the future to stand in the way of anybody who wants to build a single house anywhere and at any time. If that is the situation, it would be very helpful if the noble Baroness could say so roundly.
Baroness BIRK: As I understand it, that is clear, unless it came within the regulations made for agricultural land or specific recreational facilities, in which case I believe that the noble Lord, Lord Sand ford, would find that his noble friend Lord Middleton, who moved a previous Amendment, would take issue with him. On the question of the single dwelling-house, that is certainly in the Bill and I would go further and make it clear that exceptions include also up to an acre of ground and that this means that the small infilling plot of 10,000 square feet floor space and 15,000 square feet of industrial floor space also come within these powers. I must say that I feel there has been not only a great deal of panic but also a considerable amount of bogey-making in all this. It is absolutely wrong to behave as though individual houses are being snatched away from people or as if they will not be able to build homes for themselves. This is quite wrong. It is not in the Bill and it never has been.
Lord MIDDLETON: Would the noble Baroness confirm that the single dwelling house will be excepted but not exempted?
Baroness BIRK: The single dwelling house is actually within the Bill; it is excepted. What would matter in a particular case would be planning permission, but the general permission to develop a single dwelling house is in the Bill now. Also, a small group of houses or flats is now within the excepted provisions. It is quite untrue that the owner-occupier of his own home is at any risk at all from the Bill.
Lord MIDDLETON: I should like to make the point—because surely the only exempted development is that within Schedule 1—that therefore the single dwelling house which is not in Schedule 1 must be excepted and therefore liable to compulsory purchase.
Baroness BIRK: It is excepted, but whereas in the Bill it says that the other exceptions will be made under regulations, the Bill itself refers in subsection (1) to the building of a single dwelling house. It is specifically mentioned in the Bill and for the reason I gave. It is excepted. It is not exempt, but nevertheless it is there and written into the Bill, and I am sure the noble Lord will understand the point I have made about planning permission which applies today as well.
Baroness YOUNG: I feel that this has been a very useful discussion. Apart from anything else, we shall be able to read the noble Baroness's explanation and decide what it means. I am sure that this will throw a great deal of light for her noble friends who, I am sure, listened intently to what the legislation means and it will give a great deal of point to our later Amendments when we come to consider the individual's rights in compulsory purchase procedures and in other matters, in understanding which bit of development he falls into—relevant development, excepted development, exempted development or the development of the building plot for a single dwelling house.
The confusion is made considerably greater because we now have it quite clear that subsection (1)(b) replaces old Clause
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4. It is not at all concerned with owner-occupied houses which are not excepted or exempted from the Bill; it concerns only the plot of land. If fears have been raised, they have been entirely justified. Nobody has been going around scare mongering. But in the original Bill any one who had a single plot, unless he owned it before the White Paper day, was not excluded from the provisions of the Bill. It would be entirely fortuitous as to whether or not the purchase of land was completed before this extraordinary date of 12th September 1974; an entirely arbitrary decision.
If one considers the Bill as a whole, it is perfectly clear that the proposals mean that increasing amounts of land will be brought into public ownership. Nothing which the noble Baroness, or any other Member of the Government Front Bench, has said can lead one to any other conclusion. Therefore to suggest that no one has anything to fear is of course untrue. We have added to that the fact that much of the Bill is very unclear and very difficult to understand. I am at least grateful that the exemption for building plots, as a result of Opposition activities, has been extended at least to include all of them—those post-White Paper day as well as those before White Paper day.
Lord SANDYS: I wish to reinforce what my noble friend said. I do not wish to embarrass the noble Baroness, or cause her too much further anguish at this rather late hour, but I wish to ask her whether she is aware that when my noble friend Lord Middleton asked whether a house was exempted or excepted there was a moment's hesitation in verbalising. This is the point we find complicated on this side. I am sure that my noble friend Lord Colville of Culross will not mind my saying that he finds it difficult; indeed, all of us find it difficult to choose which it is, exempt or except. This will recur again and again. Thousands of people will be worrying about these two words. They are far too similar, far too close in length, and far too similar in size and in pronunciation. Anyone who is a student of the problem of speech will agree with me that there is a great problem here.
Clause 3 agreed to.
Schedule 1 [Exempt development]:
9.12 p.m.
The Earl of BALFOUR The Earl of BALFOUR moved Amendment No. 13:
Page 51, line 7, at end insert—
("1A. Development falling within Schedule 8 to the Act of 1971 or in Scotland falling within Schedule 6 of the Scottish Act of 1972.
1B. Development falling within any of the classes specified in paragraph 7 and 8 of Schedule 3 to the Finance Act 1974 as read with paragraph 10 of that Schedule (but not already exempted by virtue of paragraphs I and lA above.").
The noble Earl said: I wish to explain briefly that this Amendment is an attempt to extend slightly in legislation some of the provisions of the exempt development. The clause which we have just been through refers to the development of,
"such class or classes as may be prescribed by the Secretary of State. …"
Although I understand that papers will be issued on what is included, the Secretary of State still completely has the right to change his mind. Paragraphs lA and 1B in my Amendment are intended to allow for cases where there is rebuilding or improvement of property, development not constituting new development which comes into the Schedules to the Acts of 1971 and 1972, and also in paragraphs 7 and 8 of Schedule 3 to the Finance Act. There are developments such as those involving the small shopkeeper. Bearing in mind changes that have taken place, such people as the small shopkeeper need some protection. He is a tremendous asset to the community, and we are concerned here with a rather important point. I beg to move.
Lord FOOT: Apart from any other objection, there is now general agreement in the Committee that this Bill is already extremely complicated, and I am absolutely horrified by the suggestion that we should introduce into Schedule 1 these two paragraphs which refer to other legislation, and which, I suggest, would reduce the Schedule almost to a state of complete meaninglessness. If the noble Earl wants to achieve his purpose, I suggest that he might translate this into language which ordinary people could comprehend, and not frame his Amendments by reference to the Act of 1971, the Scottish Act of 1972, and the Finance Act of 1974.
Lord MELCHETT: I should like to echo what the noble Lord, Lord Foot, has said. I am afraid that once again the noble Earl has caught me out, because I think I misunderstood the effects that his Amendments we reattempting to achieve, so I should like to study what he has said. Basically, however, we talked at some length on a previous Amendment about the problem of rebuilding within certain limits, and what I said about it then applies, if that is what the noble Earl is wanting to achieve here, in much the same way. We accept that there must be some rebuilding within the limitations of Schedule 8, but we do not think it would be wise to extend this any further than it is already in the Bill because of the problems on the two fronts, both on the grounds of planning and on the grounds of the compensation which will be payable when we come to the second appointed day. But, as I say, I had misunderstood what the noble Earl's Amendments were attempting to achieve when he first put them down, so I should like to look at them and at what he has said since, and perhaps we could return to this at another stage.
The Earl of BALFOUR: I wonder if I may add one other word and ask the noble Lord, Lord Melchett, whether he will have a look at this, too. For the first time in the discussion on the Bill I think I should declare an interest, though it is a very small one even now. Paragraph 2 of Schedule 1 says:
"The carrying out, on land which is used for the purposes of agriculture or forestry, of any building or other operations required for the purposes of that use, other than operations for the erection of dwelling houses"—
that is fair enough; they are covered—
"or operations for the erection, improvement or alteration of buildings used for the purposes of market gardens, nursery grounds or timber yards …".
I do not have a market garden but I have a tiny nursery, though that is almost immaterial. However, I feel that market gardens, certainly, are quite important food producers. When the noble Lord looks at the rest of it I wonder whether be will consider why these have been excluded, as I feel that they really come into the same sort of class as farming.
Lord MELCHETT: Here I am on stronger ground. We come to a discussion of this on, I think, Amendment No.

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14A, which the noble Earl, Lord Ferrers, and his noble friends will be moving, and it may be sensible if we discuss the point at that stage of the proceedings.
The Earl of BALFOUR: I beg leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
The Earl of BALFOUR The Earl of BALFOUR moved Amendment No. 14:
Page 51, line 9, after ("agriculture") insert (",fish farming").
The noble Earl said: Very briefly, I want to include fish farming, which is now developing into quite a major food producer in this country. Again, I am wondering whether or not this is something that should be introduced as an exemption, because it is food producing. I beg to move.
Lord MELCHETT: I sense the absence of the noble Baroness from the Back Benches opposite as we come to discuss this Amendment. However, I can tell the noble Earl that it is not necessary. Agriculture is defined in Section 290 of the Town and Country Planning Act 1971, and this definition is specifically included in Clause 4(1) of the Bill. The definition includes,
"… the breeding and keeping of livestock (including any creature kept for the production of food …)",
and thus extends to fish farming. I hope that that reassures the noble Earl.
The Earl of BALFOUR: I beg leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
9.18 p.m.
Lord MIDDLETON Lord MIDDLETON moved Amendment No. 14A:
Page 51, line 11, leave out from ("dwelling. houses") to end of line 15.
The noble Lord said: Clause 3(1) says:
"'relevant development' means any development except—
(a) development of any class specified in Schedule 1 to this Act".
One of our complaints when we looked at the No. 2 Bill in August was that although the Minister had indicated that agricultural and forestry development would be exempted development, and that the land on which it was to take place would not be liable to public acquisition,
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there was nothing in that Bill to say so. We now have an altered Clause 3 accompanied by this Schedule 1, which says in paragraph 2:
"The carrying out, on land which is used for the purposes of agriculture or forestry, of any building or other operations required for the purposes of that use",
will be exempt development. I am sure that for this the agriculture industry would be duly grateful, were it not for the wording of the rest of this paragraph. If we turn to the definition, to which the noble Lord, Lord Melchett, has just referred, in Clause 4 of this Bill, we find that,
"agriculture' has the meaning assigned to it by section 290 of the Act of 1971";
that is, the Town and Country Planning Act 1971. In this definition "agriculture" includes "horticulture" and also the use of land, not only for fish farming but for market gardens and nursery grounds among many other uses. It therefore seems extraordinary and wholly inconsistent that when we go on to read the rest of paragraph 2 of Schedule 1 we see the words:
"… other than operations for the erection of dwelling-houses or operations for the erection, improvement or alteration of buildings used for the purposes of market gardens, nursery grounds or timber yards …"
and so on. This means that the erection of houses on agricultural land will not be exempt development. I should like later to refer to houses. It also means that what will also fall outside the category of exempt development will be certain forms of horticultural development even though they are agricultural development, as defined earlier in the Bill.
What seems to have happened is that the words in this paragraph have been lifted out of the Planning Acts. This paragraph is word for word the same as paragraph 4 of Schedule 8 to the Town and Country Planning Act 1971 and also was included in the 1947, 1951, 1954 and 1962 Planning Acts. But in the Planning Acts these words were used in connection with the payment of compensation for the refusal of planning permission in certain circumstances. We feel strongly that the definition is being wrongly used in this Bill in the context of the scope of public acquisition of development land. Surely the Government do not intend to leave general agriculture alone and yet to purchase sites

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for horticultural development! This Amendment seeks to treat horticulture in the same way as general agriculture. If the erection of buildings for general farming purposes is to be exempt, it seems quite wrong that buildings for market gardens and nursery grounds should not also be exempt.
With respect to houses that might be built on agricultural land, this Amendment admits the exclusion from exemption of the erection of farm dwelling houses in paragraph 2 of Schedule 1; but, having said that, the treatment of houses properly to be built for agricultural occupation seems in this Bill to be vague and uncertain. From the discussions we have just had on Clause 3, I suppose that a new farmhouse or farm cottages could be excepted under Clause 3(1)(b). If the Secretary of State decides to make an appropriate regulation, such a building could also be excepted under Clause 3(1)(c). I do not want to confuse the main purpose of this Amendment, but if some clarification can be made about housing I know that the agricultural industry will be most grateful. The main purpose of this Amendment is to remove what seems to be a glaring anomaly affecting horticulture. I beg to move.
Earl FERRERS: We are concerned over this because, as my noble friend said, Schedule 1 hives off horticulture from agriculture. It is also complicated by the fact that it excludes horticulture from the exemptions; so that when people talk about this Bill being complicated, that is the first complication because it contains a double negative. In the last two hours three noble Lords who are not renowned for being stupid have come to me to say: "Why are you doing this? You are excluding horticulture from the Bill. "I try to explain that by this Amendment we are trying to include horticulture with agriculture. If agriculture has the protection which it has under the Schedule and under Clause 3, we think it wholly appropriate that horticulture should have the same protection. If the requirements of agriculture are important—and nobody should or would underestimate the necessity of agriculture and the importance that should be given to it in this Bill—then this applies equally to horticulture. Under the Bill as it is at the moment the small market garden buildings get less of a protection
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than large agricultural buildings. If we look at Schedule 1, at the beginning of paragraph 2, it says:
"The carrying out, on land which is used for the purposes of agriculture …"
If we try to find out what "agriculture" means, we turn to Clause 4, and we see that agriculture is defined as follows:
""agriculture" has the meaning assigned to it by Section 290 of the Act of 1971 …".
If we look at the Act of 1971 it says that "agriculture" includes "horticulture". So the very definition of "agriculture" which is included in Schedule 1 includes "horticulture". Yet, the same paragraph proceeds to exclude it. That is wrong, and I hope that the Government will agree that it is wrong.
If we go on a little further, we see that paragraph 2 of Schedule 1 exempts agriculture or forestry. It goes on to remove from that exemption buildings used for the purposes of market gardens, nursery grounds or timber yards. In that Schedule you have the fact that "forestry" is not excluded from the exemptions, but "forestry buildings" are. You have the situation where "agriculture" is exempted, "agricultural buildings" are exempted and "forestry" is exempted, but "forestry buildings" are not exempted. In other words, if forestry and agriculture are both to be exempted, and if you wished to put up a building under 5,000 sq. ft. in size, such as a cow shed or barn, you are entitled to do so. But if forestry is exempted and you wish to put up a building in connection with forestry of under 5,000 sq. ft., you cannot do so. I think this is an anomaly and I hope the Government will agree that it is.
The Earl of BALFOUR: Paragraphs 2 and 3 of Schedule 1 are almost identical, word for word, to paragraphs 4 and 5 of Schedule 6 to the Town and Country Planning (Scotland) Act 1972, which is almost word for word the same as Schedule 8 to the 1971 Act. Obviously, it has been taken from there, and I respectfully think that the draughtsman has got it wrong. That Schedule refers to development not ranking for compensation, and a few things like that.
Lord SANDYS: I should like to support my noble friends Lord Middleton and Lord Ferrers. I believe this Amendment to be very necessary. I come from

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a part of the world where market gardening and agriculture take place side by side and are almost indistinguishable from one another because there is such a haze between the two. I should like to declare an interest, as I have already done, in that I am an owner. I believe it very misleading to suggest that horticulture is precisely definable. The Parliamentary draughtsman believes it is; but in our part of the world, in the Vale of Evesham, it is perfectly possible to have a cabbage farm. One can speak about a market garden holding and imagine something between one acre and 50 acres, but surely in this Bill, or indeed in other legislation, the words "farm" or "holding" are not necessarily defined according to their size in acres or hectares. For that reason alone. I believe it is important to bring horticulture into the same ambit as agriculture.
With regard to forestry, and the point made by my noble friend Lord Ferrers, there are many instances where enterprising small companies have set up saw-mills and other timber buildings with the intention of making forestry a manageable and satisfactory industry in quite small circumstances. This is not in opposition to the Forestry Commission but it is a private element of industry which is very badly needed by the farmer—for instance, to produce stakes, rails and every type of timber material which are so frequently needed in the countryside, made from home-grown materials. Perhaps here it is relevant to quote the Government's White Paper, Food from our own Resources. If the Government are still unconvinced by what my noble friends have said on this matter, I hope they will take into account what my noble friend Lord Balfour has said, because although he said he was going to add a few words, his words are usually long and particularly pertinent.
I do not think it should be left out of account, either, that glasshouses, with regard to horticulture, are not an insignificant matter. Your Lordships will remember that the Scilly Isles are included in the ambit of the Bill, and a very important horticultural industry exists in that part of the world, with very large areas of glasshouses producing a very valuable income. In some cases this involves the export of flowers, fruit and vegetables. Here is an instance of an industry where
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a vast amount of capital is tied up with a great deal of equipment and the expenses incurred over heating and constant repairs. They are extremely expensive buildings to erect and very expensive to maintain. It seems particularly unfair on a horticulturalist, shall I say, in the Isles of Scilly to exclude him from the situation, as against someone in Hampshire who runs a holding of a somewhat similar size which is a farm. It appears to me that the Government have made a mistake and I hope that by accepting this Amendment they will remedy that.
Lord DIGBY: I too declare an interest. I have a farm, and connected with it is a small sawmills and small market garden. Under the terms of this Bill, it seems to me that I shall be exempted, as my horticultural operations arc connected with general farming, whereas my next-door neighbour, who has only a small market garden, will be caught by the provisions and will not be exempted. This seems to me to be an anomaly and to be very unfair.
Lord SOMERS: I should like to support this Amendment and to ask the noble Lord, Lord Melchett, whom I do not think probably has ever indulged in forestry, whether he is aware that when one cuts down trees in forestry lands one is bound to plant others to take their place. Where is one to get them if there are to be, apparently, no nursery gardens? What is the point of taking part in forestry at all if there are to be no timber yards? As to nursery gardens, is this another attempt on the part of the Government to do away with the small man? The small market gardener is absolutely essential to the horticultural and agricultural life of the country.
Lord STANLEY of ALDERLEY: I think the noble Baroness, Lady Birk, will remember that I raised this particular point on Second Reading and she said she would write to me, or maybe she said she would consider it, but at least she seemed very sympathetic. I hope therefore that she is prepared to accept my noble friend's Amendment. I should like to ask her two questions specifically on this subject. First, if I, for instance, take a chicken shed on a general farm, that I assume is exempt; but if, on the other hand. I live down the road on a small horticultural holding it is only

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excepted. I hope she will confirm that because it seems to me a bit of a muddle.
Secondly, I should like to ask about compensation. As I understand it, the effect of the exclusion of horticulture, its not being classified as "agriculture" in this sense, means in fact at the end of the day, I think after the second appointed day, less compensation for the horticulturist as opposed to the general farmer. If this is so, I cannot see the sense or indeed the fairness of it. It may be that noble Lords opposite will not mind paying extra money for their vegetables to make up for this discrimination against the horticulturist, but somehow I feel that their wives might not quite take that line.
9.37 p.m.
Lord MELCHETT: Perhaps I should start by replying to what was said by the noble Lord, Lord Somers. I am not a forester but I am a farmer and, as it happens, currently engaged in felling and replanting an area of trees. That applies to that question. He asked me whether this was—I think he said—another part of the Government's programme to do away with the small man. The answer is, no, it is not. He then asserted that there would be no nursery gardens and no more timber yards. The answer to both those assertions is that they are not the case at all. This does not affect the provision of nursery gardens or timber yards; we are talking basically about a compensation point here.
The noble Lord, Lord Stanley, asked whether a building on a farm would be exempt but a building on a horticultural holding be excepted. The answer to that is, yes. He then went on to say that this meant less compensation for horticulturists. I do not think that is so. I think that if the Amendment which has been moved by noble Lords opposite is carried we should be in the anomalous situation of giving far more compensation in regard to certain types of land than to others, but I will come to that point in a minute.
As I have said before, the definition of "exempt development" is used for two purposes in the Bill: to define the scope of the acquisition power in Clause 15—that is the first purpose—and, together with Schedule 8 to the 1971 Act,
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to set the level of current use value in Clause 25. So it has both the purpose of defining the extent of the power and setting what are the things to be included in the current use value when that is calculated. To take first the latter point, the current use value point, the definition used in paragraph 2 of Schedule 1 to the Bill is taken, as the noble Earl, Lord Balfour, said, straight from paragraph 4 of Schedule 8 to the 1971 Act. This definition has been used ever since 1947 to define what is included within the current use value of land.
I discovered during the proceedings of the Committee stage today that it is difficult to think of anything more calculated to upset noble Lords opposite than to tell them that something was in the 1971 Act. Indeed, the only thing that seems to upset them more is to tell them that their honourable friend Mr. Rossi agreed with something the Government had done—and they then immediately march into the Division Lobby against us. I have no doubt that, as it is agricultural interests which are being defended tonight, we are about to see another Division regardless of anything I have to say. The Government believe that it is right to stick to this definition, the definition taken from the 1971 Act, for the purpose of defining the level of current use value after the second appointed day. It would be strange if the bringing in of the second appointed day led to a raising of the existing value floor which has been in existence since 1947.
So far as the scope of the acquisition power is concerned—and this may be what is mainly concerning noble Lords opposite; I am not sure—there is always room for argument about the precise definition to be adopted; but whatever view is taken of the definition of "exempt development" it has been made clear that any agricultural development which is within the powers will be covered in the excepted development regulations and that compulsory powers will not generally be available for buying such development. What that means is that, so far as agriculture, horticulture and forestry are concerned, in practice it confers the power to acquire the land used for that development. Do not let us forget that it is the land which is to be developed in a certain way which matters and not the land itself because the power applies to the

1375
development, not to the land. In practice, it makes very little difference because either it will be exempt or excepted.
While it is true that the bulk of the development covered by the words that Amendment No. 14A proposes to admit could scarcely ever be the subject of acquisition by an authority the possibility cannot be completely ruled out. For example, an authority may be able to use their powers to make land available for a timber yard in or near an urban area. I hope that the noble Lord, Lord Somers, is noting that I am saying that the authority might want to make land available for a new timber yard, not to close down one that is at present run by a small man. A large timber yard may be much more akin to an industrial than to an agricultural use. I think that the noble Lord, Lord Sandys, used the words "industrial development" when referring to timber yards.
Lord SANDYS: No, I did not.
Lord MELCHETT: The noble Lord certainly used the word "industry" when he was talking about small timber yards. He agrees with me on that point, because I see that he is nodding.
Earl FERRERS: Would not the noble Lord agree that agriculture is an industry?
Lord MELCHETT: Yes, I would: I am saying that this is an industrial development, not that it is not. That is a double negative which I know the noble Earl is not very keen on! For these reasons we think it best to stick to the wording in the 1971 Act which is well tried and well understood. The Government's intentions are that general farming operations and forestry proper should be right outside the scope of the scheme, and this is what paragraph 2 of Schedule 1 achieves. To widen the field to cover more intensive operations and ancillary developments like timber yards could mean that the acquisition power would not he available in cases where its use could be helpful and justifiable, and I understand that it would have unacceptable implications for the definition of current use value after the second appointed day.
9.43 p.m.
Earl FERRERS: We are grateful to the noble Lord, Lord Melchett, for what he has said but I do not think he has addressed himself to the arguments which were advanced. The arguments were based on one point—that horticulture has been deliberately excluded from agriculture. The noble Lord, Lord Melchett, based his argument several times in his last speech, and also in the previous Amendment of my noble friend Lord Balfour on fish farming, on what appears in the 1971 Act. The definition of agriculture which appears in the 1971 Act says that agriculture includes horticulture. If the noble Lord bases his argument on the 1971 Act, he must surely accept that that includes horticulture. With the greatest respect, he has not made one convincing argument why horticulture should not have the same protection as is given to agriculture.
Lord MIDDLETON: Nor can I find anything remotely convincing in what the noble Lord has said. If he says that the reason why horticulture has been excluded, completely illogically, is on the ground that less compensation should be paid to horticulturists than to agriculturalists, I find this quite extraordinary. If it is a matter of assessment of the current use value, the fact that compensation and the matter of assessment of the current use value for horticulturists should not be on all fours with ordinary farmers seems to me to be quite extraordinary. I object to the noble Lord's remark about agricultural interests. We are talking about the nation's food production. Horticulturists produce a most important part of the nation's food. I should have thought that it was the duty of this Committee to ensure that this production is done economically and that horticulturists are not put under an unfair financial burden. They will be if this Schedule is left unaltered.
The noble Lord referred to the wording of the 1971 Act. I have already pointed out that the wording here is completely inappropriate in the context of public acquisition, and I find his arguments entirely unconvincing. I see no reason to withdraw my Amendment and I think that the Committee should decide.
Lord COLLISON: I have carefully listened to my noble friend Lord Melchett and other speakers, and I must confess that I am not fully conversant with the intricacies of the Bill and its antecedents. But the simple question was put by a number of noble Lords of whether horticulture would be covered, and I did not understand my noble friend Lord Melchett to say that it would be so covered. I am sorry that I have to say this of my own people, but for the life of me I cannot see why horticultural holdings should not get the same treatment as agricultural holdings.
Lord MELCHETT: If I may interrupt my noble friend, I think he has picked up a misconception that was relayed in one of the remarks made by noble Lords opposite. The land is not affected; it is the development on the land that is affected. So horticultural land is treated in exactly the same way as agricultural land. What we are talking about is horticultural development or agricultural development.
Resolved in the affirmative, and Amendment agreed to accordingly.
The Earl of BALFOUR: I wonder whether I may just prove for one moment that this is not the case. If we go back to Clause 3(1)(a), it says,
"In this Act 'relevant development' means any development except—
(a) development of any class specified in Schedule 1 to this Act,"
Let us now look at the middle of paragraph 2 of Schedule 1, which states,
"other than operations for the erection, … improvement or alteration of buildings used for the purposes of market gardens, nursery grounds or timber yards or for other purposes not connected with general farming operations".
If that is not excluding it, I cannot see how more clearly I can show that we on this side of the Committee are right.
9.48 p.m.
On Question, Whether the said Amendment (No. 14A) shall be agreed to?
Their Lordships divided: Contents, 62; Not. Contents, 26.

CONTENTS

Aberdare, L.

Falkland, V.

O'Hagan, L.

Alexander of Tunis, E.

Ferrers, E.

Orr-Ewing, L.

Amherst of Hackney, L.

Ferrier, L.

Rankeillour, L.

Atholl, D.

Gage, V.

Redesdale, L.

Balfour, E.

Gainford, L.

Ridley, V.

Belstead, L.

Glasgow, E.

St. Aldwyn, E.

Berkeley, B.

Gore-Booth, L.

Salisbury, M.

Campbell of Croy, L.

Gowrie, E.

Sandford, L.

Carrington, L.

Gridley, L.

Sandys, L.

Clitheroe, L.

Harvey of Tasburgh, L.

Savile, L.

Colville of Culross, V.

Hornsby-Smith, B.

Somers, L.

Colwyn, L.

Hylton, L.

Stamp, L.

Cork and Orrery, E.

Inglewood, L.

Stanley of Alderley, L.

De L'Isle, V.

London, Bp.

Strathclyde, L.

Denham, L. [Teller.]

Long, V.

Strathcona and Mount Royal, L.

Digby, L.

Lyell, L.

Drumalbyn, L.

Mansfield, E.

Stuart of Findhorn, V.

Dundee, E.

Margadale, L.

Sudeley, L.

Elles, B.

Merrivale, L.

Vickers, B.

Eliot of Harwood, B.

Middleton, L.

Vivian, L.

Elton, L. [Teller.]

Northchurch, B.

Young, B.

NOT-CONTENTS

Beaumont of Whitley, L.

Gardiner, L.

Maelor, L.

Birk, B.

Goronwy-Roberts, L.

Melchett, L.

Brockway, L.

Houghton of Sowerby, L.

Morris of Kenwood, L.

Champion, L.

Kirkhill, L.

Shepherd, L (L. Privy Seal.)

Crook, L.

Lee of Newton, L.

Stewart of Alvechurch, B.

Crowther-Hunt, L.

Llewelyn-Davies of Hastoe, B.

Strabolgi, L. [Teller.]

Elwyn-Jones, L. (Lord Chancellor.)

Lloyd of Hampstead, L.

Taylor of Mansfield, L.

Lovell-Davis, L. [Teller.]

Wallace of Coslany, L.

Foot, L.

Lyons of Brighton, L.

Winterbottom, L.

9.55 p.m.
The Earl of BALFOUR The Earl of BALFOUR moved Amendment No. 15:
Page 51, line 21, at end insert—
(". Development for the erection or alteration of any building, which when erected or altered would be eligible for reduction in rates under sections 39 and 40 of the General Rate Act 1967 or in Scotland sections 22 and 23 of the Valuation and Rating (Scotland) Act 1956.").
The noble Earl said: This is the first of two Amendments of a similar nature that I have put down. The reason behind this Amendment is to try to exclude the development for the erection or alteration of buildings like churches, village halls, places for recreational or educational purposes, which at the present moment are normally eligible for a reduction in rates, certainly under the Valuation and Rating (Scotland) Act, and I believe and I hope I have got the correct sections applying to the English Act in the same field. Buildings like village halls have almost no rates levied on them, and certainly are eligible by law to a 50 per cent. reduction in most cases where exerciseable liquor is not consumed on the premises; also churches are exempt under the rating laws.
I feel this is important. I feel very strongly about this. Populations move from place to place and there are new town developments. I feel it is very important that buildings such as churches and church halls should be built without having to pay the development tax provided for under the Bill. They are being built for the benefit of the community, and this is to be a Community Land Bill. That is the reasoning behind this Amendment, although perhaps the drafting is not perfect. Nevertheless, that is the object of the exercise. I beg to move.
9.56 p.m.
The LORD CHANCELLOR: The effect of the Amendment which has been moved by the noble Earl would be to take all development for the purposes of churches, charities and other institutions and organisations listed in subsection (5) of Section 40 of the General Rate Act 1967 out of the land scheme. It goes considerably beyond the special provisions for churches and charities which were announced by the Minister on 15th July in another place. It would include developments by such institutions and organisations as are mentioned in subsection
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(5)(b) and (c) of Section 40 of the General Rate Act 1967; namely,
"any other hereditament which is occupied for the purposes of one or more institutions or other organisations which are not established or conducted for profit and whose main objects are charitable or are otherwise philanthropic or religious or concerned with education, social welfare, science, literature or the fine arts; and
(c) any other hereditament which is occupied for the purposes of a club, society or other organisation not established or conducted for profit and is wholly or mainly used for purposes of recreation."
Such a definition as in subsection (5)(b) would include bodies whose purposes could go far wider than strict charities; for example, ones with the aim of changing the law in one way or another. They would therefore be regarded as too political to be treated as charities in the ordinary sense. Such a definition as is to be found in subsection (5)(c) would include clubs which are not truly public, since their rules are sufficiently exclusive to prevent their membership from being available to the general public, which, if I may say so, is at the heart of the concept of charity. I imagine that many noble Lords could identify some clubs in that category which, to be regarded as carrying out charitable purposes, would give their members cause for some surprise.
The special provisions announced for churches and charities acknowledge the unique services which these bodies provide to the community—and church halls would be excepted from what is proposed—and have been made in order to help them to make the change to the ultimate stage of the land scheme. We shall be discussing this matter if we arrive at that point in the course of this night; otherwise, the pleasure of doing so will have to be postponed until the morrow. It was never the intention of the Government that development by churches and charities should be completely excluded from the land scheme, since such an exemption would lead to the establishment of a particularly privileged class of land owners.
The Government have been willing to give special treatment to land in respect of which churches and charities had entered into commitments for development before they had any knowledge of the land scheme, but would not be prepared to prejudice the operation of the scheme by excluding permanently all developments that would be carried out

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at any time not only by churches and charities, but also by any of the large number of organisations that would be included under Sections 39 and 40 of the General Rate Act 1967. I hope that what I have said will not promote a discussion now on the position of the churches. In view of the explanation that I have given, I hope that the noble Earl will appreciate that the wide extension which he proposes would go far beyond anything that is reasonably contemplated in the provisions of the Bill.
Lord SOMERS: Before the noble and learned Lord sits down, might I ask him about schools? How do they stand so far as the Bill is concerned?
The LORD CHANCELLOR: Does the noble Lord mean church schools or schools at large?
Lord SOMERS: Schools of any variety.
The LORD CHANCELLOR: I think that I should like notice of "schools of any variety". Perhaps I can revert to the matter before I fall into some dreadful trap which I fear is being laid for me.
The Lord Bishop of LONDON: This is the second time that I have been taken by surprise during the course of this debate. I had not appreciated the significance of the Amendment moved by the noble Earl, Lord Balfour. However, I am grateful in a sense to the noble and learned Lord the Lord Chancellor for what he has said. Obviously I have to hold my fire, but at least the target at which I am to fire when my Amendment comes along is a little clearer than I had expected, or even feared, that it might be. Therefore, I think that I had better contain my remarks on this issue until my Amendment is called.
The LORD CHANCELLOR: I fully understand that the restraint which has just been indicated is wholly without prejudice, and we shall look forward to the debate on the matter. As I apprehended, the answer to the question I was asked a moment ago is that church schools would be exempted, other schools would not.
The Earl of BALFOUR: I will, of course, need to study what the noble and learned Lord the Lord Chancellor said and I will make only one final
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remark at this stage, although I may wish to return to the matter on Report. Perhaps I should have used the words, "eligible for a reduction in rates of 50 per cent. or more" because I did not realise that my wording extended quite as wide as to clubs and the like, although I am reasonably certain that most such places would not be eligible for a reduction in rates in the ordinary sense, and I say that from my experience of local authority affairs. I was concerned with organisations run wholly for recreational and purposes entirely for the benefit of the community, such as libraries, squash courts and church halls; places used by the general public. At this point, however, I beg leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
10.7 p.m.
Baroness YOUNG Baroness YOUNG moved Amendment No. 15A:
Page 51, line 21, at end insert—
". All sites smaller than 2 hectares, outside the area of the Greater London Council or the areas of Metropolitan Counties.
. All land owned by builders as stock-in-trade. All land for which a planning application for residential development has been made prior to the first appointed day."
The noble Baroness said: I will, with permission, speak at the same time to Amendment No. 15B; the two go together. The purpose behind these Amendments is to try to define those categories of development which we believe will come within the excepted category and will be defined in regulations, only to have them written into Schedule 1 and therefore to bring them into the exempted category from relevant development. The Committee has heard a great deal about the advantage of regulations—that they provide flexibility, that they can be altered at some future date and that they can be added to—but while they may provide flexibility, they create uncertainty, and they have already created a great deal of uncertainty because the regulations referred to in Clause 3(1)(c), which we have just debated, have not yet been defined and all we have is the paper, Annex A, setting out some of the proposed exceptions. I should therefore like to find out what the Government's intentions are and this Amendment is designed to include in Schedule 1 some of what I hope will be the kind of matters which will be included in the regulations.

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Under Amendment 15A I have included all sites smaller than two hectares—which I find slightly easier to think of than five acres—which is what the builders have asked for quite consistently throughout the passage of this Bill as being a site which would enable a great many smaller builders to continue in business as they have done for many years, and thus contribute in a very real way to the housing supply of the country. They are people who are well versed in being able to build on relatively small sites. The Amendment goes on to indicate that not only would there be sites smaller than five acres but also land that is currently owned by builders on which they are intending to develop. Amendment 15B adds to this exemption:
"Any material change of use in land or buildings".
This is, of course, not extending the area at all but is allowing a change to be exempted from the provisions of relevant development and development which would be in accordance with a planning permission that had been inforce since 12th September 1974—
"Any development carried out on land which was in the ownership of a builder or a residential, commercial or industrial developer on 12th September 1974."
The last point is also concerned with industrial development. The point of these last two exemptions would be not simply to help the builder who is building houses but to help industrialists. We are all very concerned about the position of the economy at the moment, and very strong representations have been made by industrialists on the difficulty they will find in expanding their factories once the Bill becomes law. A great many of my noble friends have already had representations made to them, sometimes couched in terms to the effect that the only future expansion will be overseas because of the difficulties of the Bill. This kind of minor increase in the exemptions is designed to help industrialists and I feel that it is worth consideration at a time of rising unemployment. I hope I have made clear the reasons for the Amendments. I beg to move.
Lord GRIDLEY: In rising to support my noble friend on these Amendments, I shall confine my remarks to Amendment No. 15A. In my introduction to what I wish to say, I should like to explain
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on Second Reading I declared that I was a director of a development company. I declared my interest and I tried to convey to your Lordships the great powers given to the Government under the Bill to acquire land in circumstances which have never before been seen in this country. I appeared to be completely misunderstood by the Government. When the noble Baroness, Lady Birk, replied, she referred to me as stating that the present position was due entirely to the economy. She completely misunderstood my speech, in which I was trying to convey that this Bill was causing a great deal of uncertainty. We on this side of the Committee are trying to rectify that uncertainty and it is unfair to charge us with scare-mongering outside your Lordships' House. We are definitely trying to improve the Bill, much as we dislike it. I felt that I must say that as an introduction to my remarks on the Amendment.
What we wish to achieve by referring to all land owned by builders as stock in trade is to let the builders know that any land, about which they may have entered into contracts, or have owned prior to the appointed day when these provisions will come into operation, may remain in their possession. It is clear—and I am sure noble Lords will agree with me on this—that builders have to plan ahead. It is absolutely essential for them to plan four, five or six months ahead and if there is a feeling that the Government may take this land off them, that is bound to bring about unemployment and not achieve the development of any new housing at all. Clearly, it will not achieve what the Government wish to achieve with the Bill. Therefore, I strongly support Amendment No. 15A and I hope that the Government will give some consideration to it.
Baroness HORNSBY-SMITH: I should like to support my noble friend in these Amendments, because for many years I represented an area where we had new, young and enterprising industries coming in. Over the years, firms like Morphy-Richards, Klingers, ITT, the Telephone Manufacturing Company and the like started off as comparatively young firms in a new area after the war, without capital to go for the maximum until they had established their markets and got their exports. It was a very highly-rated export area for its size. However, these firms had the prudence to keep

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that extra area of land on which to expand and develop subsequently. At more than one of those factories I was privileged to open extensions during the period when I was a Member.
Bearing in mind that the Government are asking for expansion in industry and for people to endeavour to find more employment and the like there is here a very real deterrent to companies with these modest two hectares. It will be prudent to provide such an area of land if a firm is going into a development area or is setting up a new factory—possibly at Government request—in an area of high unemployment. Whereas, initially the plant would take perhaps only half the area, it would be prudent for a firm to plan for extensions. But there is a great deterrent in the suggestions made by the Government in the Bill. I hope that the Government will see their way, as an encouragement to firms when they increase production and when they have more export orders, to ensure that those firms have no fear that they will not be able to develop on land which they have acquired, and no fear of an alternative claimant coming along and jumping the gun on them, by applying to the local authority to develop on the land. Two hectares is not such a vast area.
Planning authorities at present frequently require a firm to provide twice as much space for car parking as for a plant or factory; and this means vast expense for the company. Bearing this in mind, I hope that the Government might reconsider these very modest five acres, which a prudent and expanding company would think it worth taking if it were opening up a new factory in an area.
Lord MELCHETT: The noble Baroness called this a very modest change in the Bill, and the noble Baroness, Lady Young, called it a minor increase in the provisions for exempt development. But I have to tell noble Lords opposite that the extensions proposed by these two Amendments are quite unacceptable to the Government, in particular in so far as the implications to the definition of current use value are concerned. The only exception to that general point is, so far as the current use value is concerned, reference to Schedule 8 to the 1971 Act in Amendment No. 15B, which is not
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unacceptable because this is already imported directly into Clause 25 by virtue of subsection (3)(b).
But it is not the intention that the definition of current use value should be the more generous one that is included in the Finance Act 1974, and it would certainly be quite unacceptable for value attributable to the hope of obtaining permission for, say, development on the site of up to two hectares to be included in current use value. So far as the acquisition power is concerned, the Government have made it clear that they consider it necessary for authorities to have wide powers even though the scope of the duty can be more constrained.
I have made the point before that exemptions carry with them two implications. One is the implication of the current use value of land; and, secondly, there is the implication of the power of the local authority to purchase the land. But the noble Baroness, Lady Horns by-Smith, seemed to me to be missing the point, which is the fact that the land is never exempt. It is no good adding in five acres or 3,000 acres to Schedule 1. The land is not exempt; it is the development that takes place on the land. Therefore it would make absolutely no difference to an industrial concern which buys land prudently—as the noble Baroness puts it—to develop in the future, because, presumably, it would not necessarily have planning permission or be applying for planning permission at that stage. So at that point the land would not be development land and the exemption in Schedule 1 would not apply to the land at all.
If the land fell within a large development scheme and the local authority intended to take the land in that development scheme into public ownership, whatever Schedule 1 said would not make any difference. The industrial concern would have to sell the land to the authority if the relevant procedures under the Bill were gone through. That is an important point. We are talking about two limited areas here. One is the limitations on the power of the local authority to buy development land, and the other is the implications for the valuation of the land when we come to current use value. The Amendment is quite unacceptable to widen this into that valuation.
Lord GRIDLEY: Could the noble Lord explain this further to me? Is he saying that if it wants it a local authority has the power to take land from a development company which has acquired and owned that land? This is just the point which is causing so much uncertainty in the building industry at the present time. They cannot make their plans. If this is what the noble Lord is telling us it is just the sort of thing they fear, and it is causing a stagnation and a paralysis in the building industry. It is just this point, if I am right.
10.21 p.m.
Lord MELCHETT: If planning permission has not been granted for land the local authority can acquire it under this Bill, just as they can acquire it now for the purposes for which they have a duty to acquire the land. If the land is needed for roads, for example, they can acquire it now, so in that respect the position is not affected. Certainly, as the noble Baroness said earlier—something welcomed by all noble Lords on this side of your Lordships' Committee—more development land will be coming into public ownership. But the answer to the noble Lord is that if no planning permission has been granted and the land is not at that stage development land, and if either the local authority gives planning permission or it falls within a development plan or one of the other planning constraints which exercise themselves on the local authority's power to acquire, certainly the local authority could buy the land.
To return to the effect of this particular Amendment, to convert, as I think the second of the noble Baroness's two Amendments does, "excepted" development into "exempt" development completely undermines the whole basis of the Government's proposals for defining the scope of the land scheme. The absurdity of this approach can be most clearly seen by considering the proposals that two hectare sites should be excluded from the scope of the power. In suggesting this exclusion it is presumably accepted that it is reasonable for there to be public acquisition where large-scale development is involved. But in assembling a site of, say, 100 acres, an authority might well
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have to buy some quite small bits of land. Moreover, they might well be able to make such purchases by agreement without the use of compulsory powers.
The effect of Amendments Nos. 15A and 15B would be to make it impossible for authorities to use the Clause 15 power to achieve such useful land assembly schemes. The effect might be that an authority would be able to use the power in the Bill to buy most of the land they needed in this large 100-acre site, but would have to proceed under other powers (for example those in the Housing or Planning Acts) to buy a few scattered small plots. This makes no sense at all. There may be objections to the Bill in principle, but I hope your Lordships will not arbitrarily make the mechanics of the scheme inefficient.
The Government agree that rebuilding within the limits of Schedule 8 should be "excepted" development, but it must remain within the scope of the power. This is something we spent some time on earlier. A good deal of commercial development, as I said then, especially in Central London, takes place within the limits set by Schedule 8, and it would not be acceptable for this to be outside the power—that is, to be "exempt" development—even if it is thought that there would only rarely be a case for the use of the power in such instances.
As I have said, these Amendments are unacceptable to the Government because they would vastly increase the level of current use value and because they would, taken together, make major inroads into the broad scope of the acquisition power which is in our view an essential feature of the scheme.
10.19 p.m.
Baroness YOUNG: The reply which we have had is not altogether unexpected, although naturally it is disappointing. One of the extraordinary features of this Committee stage has been the unwillingness of the Government to consider anything. I think they have undertaken to look at two points in a rather half-hearted way, but that really is as far as we have got. I would not agree with the general

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thesis on Lord Melchett's second point. I do not believe that this would in fact make that great an inroad into the Government's desire for local authorities to acquire the maximum amount of development land. What I do think would be its effect is to make both house-building and minor industrial developments more likely, more effective, at a time when both are required by the country as a whole.
It is extremely short sighted of the Government not to look at these exceptions. Nobody is moving an amendment to take out Clause 15, to take out the power of local authorities to acquire, to go against the major principle of the Bill that the councils are to be enabled to acquire development land. But we are trying to identify areas where it seems to me that, keeping within the principles of the Bill, we would make it more workable and be helpful to builders to build houses and to industrialists, particularly industrialists with expanding businesses to get on and expand their businesses. That is what would be the effect of these Amendments. It is very disappointing that the Government do not wish to consider them. It was the noble Lord, Lord Henley, who said he thought that the Bill would be unworkable. A lack of consideration of any of the kinds of Amendments that would help it to work will hardly help the Government. At the end of the day it will be the ineffectiveness of much of this legislation from which the country will suffer. However, I will ask leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
The LORD CHANCELLOR: We have reached an hour which may indicate, after the intellectual rigours of the day, that it would be appropriate for the House to turn to another matter which no doubt has its own rigours. Perhaps we can proceed tomorrow with this Committee stage. It is unfortunate that we have made so little progress. Perhaps it is a little ungallant of me to say so at this hour but, with great respect, I hope that we can press on with greater speed tomorrow.
Baroness YOUNG: My colleagues are anxious now to make one or two points
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on Schedule 1. We should be happy to conclude the business of the day after that. We do not want to go on after discussion of Schedule 1, but I think that would be a more sensible place to stop than to leave the Schedule incomplete. We could then go on to Clause 4.
The LORD CHANCELLOR: If it is the wish of the noble Baroness to do that, then certainly the wish to prolong the matter may be less tonight than tomorrow—not that I am suggesting for a moment that anyone in the Committee seeks to prolong the matter. If it is the wish of noble Lords opposite, then let us deal with and put an end to Schedule 1.
On Question, Whether Schedule 1, as amended, shall stand part of the Bill?
10.28 p.m.
Earl FERRERS: This Schedule that we have been discussing has dealt with exempt development. I am bound to say that we have had "exempt development" and "excepted development" and that anyone wishing to muddle up anyone could not have chosen a better way to do it than to use the words "exempt" and "except" and then to throw in the word "excluded"; so that we have excepted development which is that which is exempt from development. Those words were ill-chosen; quite apart from the fact that one is defined in the Bill and the other is not. "Exempt" is defined and "excepted" is not. One of the worries of the agricultural community is the fact that they do not know, or are not certain, whether, if they were to build a building—for instance a cow man's house to enable them to carry on their profession—they would be able to do so without having it purchased by the local authority and then sold back to them, or whether the fact of not applying for planning permission would itself enable the local authority to turn around and buy the land off them or to buy the land off them and use it for other purposes. I think I know the answer to that, and if I am right in so thinking, I am a very lucky person. A great many people do not know the answer to it. I hope that the noble Lord, Lord Melchett, or whoever is to reply, will be able to provide the answer perfectly clearly. I admit that anyone who would build a cowman's cottage or, indeed, three or

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four houses, would be nothing other than mad at the moment. So helpful has the Government's legislation been towards agriculture that, of course, that kind of building has now momentarily come to a halt. It is an important point which a lot of people do not know about. I think the answer is that it is excepted development. If that is the answer, I may well be told, "Oh! you will find that in Annex A". My reply will be, "That is fine, but where does one get Annex A from?" Your Lordships—some of you—are lucky enough to have been given it, others will have found it at the Printed Paper Office. But where does the average person find this? Exempted land is specifically defined in the Bill. Excepted land is not. That is a cause for a real confusion.
Viscount COLVILLE of CULROSS: I should like to add a footnote to the Amendment which has been made to this Schedule. I do so in very great perplexity, because I wonder whether your Lordships have achieved anything. I wish to draw this to the attention of the Government when they come in due course to consider what they are to do in another place, if anything, about the decision that the Committee have reached.
Exempt development is sub-divided in this Schedule into three—and I may say that if this is to be followed by the noble Lord, Lord Melchett, he will need to consider it with some care, and I should be grateful if I could have his attention. The first of the paragraphs in the Schedule says:
"Development for which planning permission is granted by a general development order for the time being in force and which is carried out so as to comply with any condition or limitation subject to planning permission so granted."
In paragraph 2 we have reference to the agriculture and forestry or building and other operations, which have now been dealt with by way of the Amendment. But I should like to ask the noble Lord this: are not the two as they were originally put into the Bill mutually contradictory, and have we not by means of this Amendment merely produced the same in paragraph 2 as was, in any event, the law under paragraph 1?
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If one looks at the General Development Order 1973, planning permission is deemed to be granted by that Order for all the things that are set out in the Schedule 1. Class 6 of Schedule 1 allows with deemed planning permission—in other words development for which planning permission is granted—"The carrying out on agricultural land" of a certain size, "and comprising an agricultural unit of building or engineering operations requisite for the use of that land for the purposes of agriculture". It excludes dwellings. You have to comply with certain conditions. If you look at the definition of" agriculture" for the purposes of the General Development Order, it is not the one in the Town and Country Planning Act 1971, to which we have been referring, because under Article 21 of the General Development Order "agricultural land" and" "agricultural unit" have meanings respectively assigned to those expressions in the Agriculture Act 1947.
The Agriculture Act 1947 deals with it in this way: "In this Act the expression 'agricultural unit' means land which is occupied as a unit for agricultural purposes including a dwelling house" and so on, and in this Act the following expressions have meanings respectively assigned to them:
"agriculture includes horticulture, fruit growing and so on."
I suggest to the noble Lord that the General Development Order attracted by paragraph 1 of Schedule 1 to this Bill allows development for the purposes of horticulture, because it is done under the attraction of Class 6 of the General Development Order. Exactly the same thing applies to forestry under Class 7, because there you have the carrying out on land used for the purposes of forestry building and other operations other than dwellings requisite for the carrying on of those purposes, subject again to two small conditions.
I cannot understand how the Bill could have been drafted in this way in the first place. It may be that I have wholly misunderstood it, but may I ask the Government and noble Lords opposite to please consider this, because I can see the most paramount difficulties arising under the two different attractions: first, regarding the General Development

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Order, and then Schedule 8 to the Town and Country Planning Act 1971, which appear to be mutually contradictory. If it is put back to the way in which it stands in the Bill—that is until we amended it just now—I can see the greatest possible confusion arising.
10.36 p.m.
Lord MELCHETT: I can assure the noble Viscount that I always find everything he says so fascinating that it is impossible not to listen to him, even at this hour of the night. There is some overlap, but I am advised that the two things do not overlap entirely. For example, paragraph (1)(a) of Class 6 in the General Development Order puts a limit of 465 square metres on a development. So I think the Government, in our usual careful and considerate way, have put both in. There is some overlap but not a great overlap, and it may be that even after the Amendment which noble Lords opposite saw fit to press, there is still a use for paragraph (2). But we do not know what another place will do with the Amendment.
The noble Earl again raised the question of "exempted" and "excepted". I am in a little difficulty in replying to this point, because if one says one finds no difficulty in distinguishing between the two it sounds as though one is pretending to be much cleverer than one is. But I certainly think it is simpler than permanently non-designated relevant development which we have lost as a result of the introduction of "exempt" and "excepted". The noble Earl also asked about the status of excepted development and how people would know what it was. Of course, it will be published in the Regulations. We have been over the ground as to whether Regulations are a desirable way of doing this earlier in the day and I do not think I should go into that again at this hour, except to say that the overriding advantage is the flexibility. We have on one or two Amendments today seen that some thought still needs to be given to the categories of excepted development, and we shall be able to do this because it will be included in Regulations and not in the Bill. With regard to the noble Earl's question about building a cowman's cottage, that, as he suspected, is excepted
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development. Indeed, if one could get planning permission for it, one could build ten cowmen's cottages, which would still be excepted development.
LORD SANDFORD: I wonder whether I might ask the noble Lord a question which also relates to the General Development Order, which is important here. The Committee will see that in Schedule I exempt categories of development are defined by reference to the General Development Order, and the General Development Order lists those developments that are normally and in most cases exempt from development control under the Planning Acts. In some places, such as, for instance, national parks, conservation areas or areas of outstanding natural beauty, and on some occasions when a particularly offensive or incongruous intrusion is threatened, an Article 4 Direction can be used. An Article 4 Direction is used to exercise tighter control over development than is normally used or generally applied. This is done to preserve or enhance the character of a place such as a national park or conservation area, or to ward off a specific threat.
Article 4 does this by bringing under control, exceptionally and locally, forms of development normally exempt from development control. I should like the noble Lord to explain how, in cases like these, such use of such exceptional powers for planning purposes does not have the effect of bringing exempted developments within the scope of this acquisition Bill. It would not, of course, be the purpose of an Article 4 direction to do this, to have any effect on the local authority's powers of acquisition or on a citizen's rights against acquisition. But at present I cannot be sure—perhaps the rest of the Committee can be but I cannot—that there is anything in the Bill to prevent this unintended and unwanted effect when an Article 4 direction is employed.
LORD MELCHETT: I am not sure that I know the answer, but I think it is that anything included in a general development order is exempt development—and I will soon see whether I am right. I was going on to say that an Article 4 direction would not bring those developments into the Schedule. That is what I suspected the answer was. An Article 4

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direction, which will be a planning direction, will not have any effect on the category of exempt development. But if I may, as the noble Lord has raised this point rather late at night, I will check that what I have told him is right and if I am wrong I will write to him about it.
LORD SANDFORD: That is fine, but of course there is not much time for an exchange of correspondence. I am sure the Committee would be satisfied with that assurance tonight, but we must know not only that that is what happens but how it is that that is effective.
Viscount COLVILLE of CULROSS: It is very difficult because, instead of the planning permission being granted by the development order, an Article 4 direction expressly requires permission to be granted on an application. Therefore, any permission that is granted under an Article 4 direction for something covered by it is not granted by the development order; it has to have a specific application. I should have thought that at the present moment paragraph 1 of the Schedule is not apt to cover it.
Earl FERRERS: May I ask the noble Lord one question, because he was kind enough to answer my question but not in fact in the way I hoped? He kindly told me that any farmer who applied for planning permission for either one cottage or more would in fact find it as excepted development. The question which I intended to put to him was this. If a farmer applies for planning permission, could that in any circumstances trigger off in the local authority's mind the thought that here is a place for which planning application has been made, and could it result in the local authority buying that land off the farmer and either selling it back to him or, alternatively, using it for other purposes?
Lord MELCHETT: If it is excepted development it is within the scope of the power of the local authorities.
Earl FERRERS: That means, yes?
Lord MELCHETT: That means, yes. But it is not quite as simple as that, because of course we have made it perfectly clear that we should not expect local authorities to involve themselves in
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excepted development except in exceptional circumstances where, there are good planning reasons for them to do so. I should also point out to the noble Earl that where they wanted to acquire land which was being developed for excepted development, the compulsory purchase procedures would be unaffected by the Bill and the position of the farmer would be as it is now.
Earl FERRERS: Which, means that if he applies for planning permission he could find that land taken off him or used for other purposes?
Lord MELCHETT: Farmers lose land to local authorities at the moment.
Earl FERRERS:That is not the answer to the question. Of course they do, but I am asking about a specific application. I am not trying to put the noble Lord in a spot; I genuinely want to know. If a person applies for planning permission, is it possible that he will find that his application will remove the possibility of his own building being put up, and he may find the land used for another purpose or he will have to buy it back at a different price from the price he is paid for it?
Lord MELCHETT: I think that in almost all circumstances and in almost all situations the answer will be, no.
Schedule 1, as amended, agreed to.
Lord STRABOLGI: I beg to move that this House do now resume.
Moved accordingly, and, on Question, Motion agreed to.
House resumed.

MALAGASY: GOVERNMENT REPRESENTATION
10.45 p.m.
Lord MERRIVALE Lord MERRIVALE rose to ask Her Majesty's Government whether they will consider appointing a resident United Kingdom-based career Consul in Tananarive, in view of the recent decision to close the British Embassy in the Malagasy Republic, and the desirability of retaining a permanent presence. The noble Lord said: My Lords, before going into the question of a resident United Kingdom-based career Consul in Tananarive, may I apologise for delaying your

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Lordships, in particular the noble Lord, Lord Goronwy-Roberts, at this late hour.
May I refer very briefly to the historical and lasting friendship between Madagascar and this country which started early in the last century, no doubt from the time when our Governor in Mauritius, Sir Robert Farquhar, sent from 1816 onwards such envoys as the English Captain Lesage, James Hastie and the Reverend David Jones of the London Missionary Society. It was he who founded the first school in Tananarive in 1820. Two years later, four English workers—Brooks, Rowlands, Chick and Canham—were received by King Radama I. In 1824 the three schools of the English missionaries Jones, Jeffreys and Griffiths were merged into the Royal Missionary College. In 1836 appeared the first Anglo-Malagasy dictionary.
To move on, in 1862 a British Consulate was established and in 1865 a Treaty of Peace, Friendship and Commerce between Her Majesty—that is, Queen Victoria—and the Queen of Madagascar was signed in Tananarive on 27th June in the English and Malagasy languages by Her Majesty's Consul, T. C. Pakenham—a distant relative, I understand, of the noble Earl, Lord Longford. Article 1 is interesting, for it reads as follows:
"Peace, friendship and good understanding shall from henceforward and forever subsist between Her Majesty the Queen of the United Kingdom of Great Britain and Ireland and Her Majesty the Queen of Madagascar and between their respective heirs, successors and subjects".
Again to move on, in 1891 a Britisher, the Reverend Peake, founded the Centre for Lepers at Manankavaly. In the same year a new hospital was opened at Isoavinandriana which had been erected by the Friends Foreign Mission Association. And, of course, in 1896 on 16th September General Gallieni of France arrived in Tananarive.
It was not until 1960 that a British Embassy was established there upon Malagasy Independence. Only 15 years later the decision was taken to close the Embassy as part of the Foreign and Commonwealth Office's contribution to a cutback in public spending for 1976–77 of £1,100 million. I shall therefore now try to convince your Lordships that it is
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desirable to retain a permanent presence in Tananarive and that the cost would be low and the benefits high.
First of all, let us consider what property Her Majesty's Government own or rent in Madagascar and what has been the cost in foreign exchange of running the post in Tananarive. A reduction in cost could certainly be achieved should Her Majesty's Government be willing to consider maintaining one United Kingdom-based officer, with some supporting staff, and maintaining Villa Elizabeth for residential and office accommodation. The noble Lord, Lord Goronwy-Roberts, will know that Villa Elizabeth, the Ambassador's residence, at Ivandry near Tananarive was bought in 1966. He knows, as I do, the price paid for it then. Since that date, £14,000 has been spent on alterations and maintenance and over £3,000 on furnishings. In 1972 Villa Concorde, the First Secretary's residence, was bought and since then £3,000 has been paid out in alterations. Thirdly, Her Majesty's Government own a plot of land of 7,221 square metres in a residential area of Tananarive. Finally, there is the rented office accommodation.
Over the past year, 1974–75, the cost in foreign exchange of running the complete post at Tananarive was £34,300; that is. £37,053 less certain receipts and recoveries. It is my considered belief that with a reduction in staff, in accommodation, in communications, journeys and local transport, a local saving of up to £20,000 could be made, with a corresponding reduction in the United Kingdom.
In spite of the arrival today in Tananarive of two Department of the Environment experts, the property market is not good at the moment in the Malagasy Republic, and that is why, too, I would most sincerely urge Her Majesty's Government to retain Villa Elizabeth. From recent photographs I showed the noble Lord, Lord Goronwy-Roberts, I trust he will agree that it is suitably situated, adequate for residential accommodation of a United Kingdom-based career Consul and for a non-resident Ambassador when visiting Tananarive; most suitable for him for entertaining purposes, even on a reduced scale, and totally satisfactory for office accommodation. No extra security arrangements

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need be called for as all ciphered messages could be handled through the nonresident Ambassador's office in a neighbouring country.
I should now like to put forward what I consider to be valid reasons for retaining a permanent presence in Tananarive. First, the new Head of State, President Didier Ratsiraka came to power on 15th June last and the new Government was set up on 16th June. A few weeks later Her Majesty's Government announced their decision to close the British Embassy for reasons of economy—even before the appearance of the President's Socialist Charter, which was published by Madagascar presse on 13th September last. This charter refers to aid as being supplementary rather than complementary and it draws attention to the fact that 85 per cent. of the population live in rural areas and that there is a need to raise the standard of living of the peasants so that they may also become consumers of the products of the country's light industries in the future.
Paragraph 102 of Cmnd. 6223 An Account of the British Aid Programme reads as follows:
"It is a central objective of U.K. aid policy to give a greater emphasis to rural development."
There would appear, therefore, to be no divergence of opinion. I press Her Majesty's Government to make a greater percentage of aid available to the Malagasy Government than in the past. In 1973, the amount of aid was only about 0·1 per cent. of the United Kingdom's bilateral aid for Africa as a whole, and only 1·2per cent. for non-Commonwealth Africa. However, with regards to rural development, I understand that Her Majesty's Government are prepared to consider an "integrated package of technical assistance in a self-contained project", or are very willing to consider other possibilities if the Malagasy authorities have other ideas in mind.
When recently in Tananarive, I had the pleasure of being received by Mr. Pierre Rajaonah, the Minister for Rural Development, and I mentioned this to him. It might, therefore, be apposite to mention that he is to visit the United Kingdom this month at the invitation of a British finance company, appertaining to a joint venture to grow sugar cane
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and build a refinery in the Mandrare Valley area. The capacity is to be up to 80,000 tons per year, with the possibility of extending it to 150,000 tons.
Another principal activity in the aid field so far as we are concerned—since about 1970, I understand—has been English language teaching. May I add, therefore, that the learning of English by Malagasy students is one of the top priorities of the Malagasy authorities, as confirmed to me when I saw him by Mr. Razakaboana, Minister for Finance, and for the Plan. I was therefore very pleased that nine students should have arrived at the Colchester English Study Centre on 5th October last, but nine students is not enough. Another priority is the sending to the City of London of their insurance or re-insurance personnel and banking personnel, to study our ways and methods in other words, a recyclage, as they said to me in Madagascar. Such priorities do not seem to be in conflict with Government policy, and ought therefore to be actively pursued. There are other needs, too, but these can be mentioned on another occasion.
With regard to trade, the figures are no doubt small, but they could certainly be increased to some degree. Our exports to Madagascar in 1974 totalled £1,870,000, and our imports from Madagascar totalled £3,183,000, in which, of course, butter beans played a significant part. Recently when I called upon the Minister for Economy and Trade, Mr. Justin Rarivoson, until fairly recently general manager for Shell in Madagascar, he mentioned two areas where they would like to import more from this country. I hope, therefore, that we will reciprocate. I might add that 8,000 tons of sugar are waiting in storage—and there is a shortage of storage there—to be shipped to this country. Perhaps the noble Lord, Lord Goronwy-Roberts, may be able to use his influence to see that the sugar is brought over here fairly soon. I am also authoritatively informed that Malagasy cotton is more or less on a par with Egyptian cotton with regard to quality. My visit to the Minister for Trade followed a successful Press conference which he gave, and which was reported in the Press under the heading "Rarivoson unshrivels the economic life of the country". During the course of

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this Press conference he announced, too, that anew investment code would shortly be forthcoming.
On a government-to-government level (but through, too, the good and effective services of our well-liked Commercial Counsellor Mr. Marcelin) there has been a fairly recent tendency for the Malagasy authorities to seek in this country equipment which they had previously bought from France. For instance, in March last year they took delivery of a Britten-Norman Defender aircraft (which is based on the Islander 12.seater turbo-prop). Might I add that Lt. Col. Rakotonirina (a member of the Comité Militaire de Developpement—CMD) who visited this country several times regarding the acquisition of this aircraft, like many influential Malagasys, studied under an English missionary.
Finally, I believe there are other reasons, too, why we should retain a permanent presence in Tananarive, apart from the historical past, friendly ties, the cultural aspect, the British aid aspect, and the trading aspect. Regarding this last consideration, I think it should be borne in mind that the Malagasy authorities are very keen to develop their relations with Anglophone East Africa, too.
During the course of my 12-day visit to Tananarive, I had the pleasure of meeting the Head of State, members of his Government, members of the Armed Forces, business people, and old Malagasy friends, members of the legal profession, doctors and peasants, too. I can truthfully say that I am quite convinced that there is a genuine desire that we should not lessen our interest or presence in Madagascar. I am well aware that the new charter calls for a policy of "opening all azimuths", thus diversifying their international relations. This means, for one, a greater Chinese presence and influence, but it is not to the detriment of, or directed against, our country. On the contrary, there is a continuing desire for having close and friendly contacts with the United Kingdom.
Might I mention at this point that during the course of a reception kindly given by our Chargé d'Affaires and Mrs. Rex Hammond for Malagasy personalities and foreign diplomats, the question of the closure of our Embassy arose in discussion with Eastern and Western representatives
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at Ambassador or Chargé d'Affaires level. Her Majesty's Government's decision, I must say, was certainly not understood. I think we should not minimise the political influence of Madagascar, arising partly from its geographical position and partly from the policies which the government intend to pursue. The Russian fleet, too, is still in the Indian Ocean, and the Americans are consequently occupying the Diego Garcia communications base.
In conclusion, I should have thought that the various factors, outlined during the course of my speech, might warrant—and I sincerely pray so—that a permanent presence in the Malagasy Republic be maintained, not just an honorary Consul who is not even empowered to issue visas; and I understand that these were delivered over the past year to the tune of around £2,500. I therefore plead for the appointment of a resident United Kingdom-based career Consul in Tananarive.
11.5 p.m.
The PARLIAMENTARY UNDER-SECRETARY of STATE, FOREIGN and COMMONWEALTH OFFICE (Lord Goronwy-Roberts): My Lords, I am sure that I should first pay tribute to the contribution which the noble Lord, Lord Merrivale, has made to Anglo-Malagasy friendship, and the interest which he continues to show in the relations between the two countries, and indeed in the relations between Francophone Africa and the United Kingdom. Her Majesty's Government are also anxious to preserve the friendly relationship which has marked the long historical association between our two island peoples.
The decision to close our Embassy in Tananarive was taken after much heart-searching, and it was entirely due to economic pressures. As the noble Lord quite fairly pointed out, Her Majesty's Government have found it necessary to reduce public expenditure in the financial year 1976–77 on goods and services, including manpower, by 1½ per cent. The Diplomatic Service, no less than any other Department of Government, must share the load. In view of the high proportion of the Diplomatic Service Vote which is devoted to staff salaries, the only way in which it is possible to achieve

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a sufficient permanent saving of expenditure is to cut out actual jobs. Every effort was made to avoid the need to close overseas posts. But some closures have been forced upon us, not for the first time of course. We are constantly reviewing the viability and the efficacy of our posts abroad, and from time to time closures become logically necessary. I am sure that noble Lords will recognise that staffing at individual posts must be maintained at a level which makes the maintenance of such a post reasonably viable. There is a line below which posts cease to be adequately operated.
The Embassy in Tananarive employed three United Kingdom-based officers of diplomatic rank at a cost of approximately £80,000 per annum. It was not thought practicable to maintain an Embassy with a smaller staff.
Lord MERRIVALE: My Lords, may I interrupt the noble Lord? I do so with humility. Is the £80,000 which I have heard as being the cost of maintaining our Embassy the actual cost, or is it in effect, as I understand it is, a pro rata cost of a worldwide basis that does not bear a true relationship to what it costs to run it at a particular point, taking into consideration also the cost in London?
Lord GORONWY-ROBERTS: My Lords, I am grateful to the noble Lord for that interjection. It enables me to explain and clarify a point which he made in his introductory speech. We are not primarily concerned with foreign exchange costs. We are required to achieve a total saving in public expenditure as a whole, and the costs of the Mission in these terms was £78,000, which is nearly £80,000. I think that is the distinction that the noble Lord wished to clarify in his speech and in his interjection. As I was saying, the cost, according to the definition that I have given, is approximately £80,000 per annum. For very much the same reasons as I have given, our Embassies at Lomé, Managua and Tegucigalpa are to be closed and some Consulates, such as those at Miami and Valencia, are to be closed.
Perhaps I may at this point address myself to the meritorious point the noble Lord made about British exports to Madagascar. Quite rightly, he quoted our 1974 exports as £1.87 million and indeed this year, between January and July, they were £1.1 million, which indicates that at least
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the level of last year should be maintained. The noble Lord's figures are correct on that point. At the same time, our exports to Honduras, Togo and Nicaragua are greatly in excess of our exports to Madagascar and these are countries where we have to close our representation. We do not want to close any Embassy anywhere but, as I have said, from time to time it becomes logical and necessary to do so. Madagascar is not the only instance at this point where we have to reduce our diplomatic representation. There are other countries about which conceivably an Unstarred Question debate could with equal logic and force be raised in this House. Tananarive is not, therefore, in a unique position, and I must emphasise again that our decision was entirely governed by economic considerations.
Coming to the noble Lord's second point, having decided on the closure of a post the question arises of how to provide adequate residual representation both diplomatic and consular. In the case of the Malagasy Republic, we are currently discussing with their Government the accreditation as non-resident British Ambassador of one of our Heads of Mission from a nearby country. This, as noble Lords will appreciate, is a practice commonly adopted around the world and indeed there are already several nonresident Ambassadors accredited by other countries, some of them neighbours of ours, in Tananarive. So there will still be a British Ambassador to Madagascar, though he will not be resident there and will be visiting this country occasionally. The Malagasy Government have accepted such a proposal in principle in our case, as indeed they have accepted and implemented a similar position in regard to other countries which have proceeded very much as we are proceeding now.
The noble Lord's Question is, I think, directed specifically towards the future nature of our consular representation. I listened carefully to what he said on this point, as I did to his entire speech, but our community in Madagascar is small, there being only 66 people of United Kingdom origin amid a total British community of 238. Given the happy circumstances which characterise our relations with Madagascar, I feel that an honorary consul would be adequate to provide essential services on behalf of such a community. We must necessarily ensure

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that the economies which have been affected are not eroded.
A career Consul would require housing, allowances and office space and that would be pretty considerable compared to the small honorarium payable to an honorary Consul, plus the necessary expenses which he would need to be paid, including some limited secretarial assistance. However, the real question is whether there would be a proper job for a full-time Consul here. This is especially so when we are under strong pressure to economise and when there are other countries with what is clearly a stronger claim on our resources.
On the merits of the case, an honorary Consul would be capable of the job which remains. The appointment of a career Consul may seem a drop in the ocean of Government expenditure. The Diplomatic Service Vote itself is not a very big drop. It is 0·25 per cent.— a quarter of one per cent.—of our total public expenditure last year. I should like to say that I hope our country and people appreciate the quite extraordinary range and quality of service which our Diplomatic Services render to this country for this very tiny percentage of our gross national expenditure. It is only a quarter of one per cent. of everything we spend.
So the amount itself is only a drop in the ocean, but it is a drop which is made up of a number of still smaller drops. When we are asked, like other Government Departments, to effect economies, it may be that your Lordships will agree with me that it may bear specially heavily on the Foreign and Commonwealth Office as compared with the mammoth Departments with which we are surrounded and which outbid us in size and expenditure, if not in quality. We have faced similar situations in other countries where we have had to close a post. This is not for the first time. We have closed Embassies before now and always there has been a proper objection and outcry. In nearly all of the other closures, our community is larger and our trading interest, present
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and potential, is larger. But we must be prepared to cut our coat according to the cloth available.
There is a strong demand that public expenditure should be reduced. We are doing that. I hope that people are not generally in favour of reducing public expenditure, but particularly objecting to one or the other item within that reduction. This is what my Department, like others, must bear as part of the burden. We should also remember that the revolution in communications and modern travel has allowed us to vary the nature of our diplomatic activity. In the days which the noble Lord mentioned in his very interesting speech, weeks and months were required to complete one exchange of correspondence with London. Nowadays, communications need take only hours or, at the most, days.
I am afraid that I cannot in honesty hold out to the noble Lord any possibility of this decision being reconsidered in the way he wants. What I can tell him is that no one could have put the case with greater fairness and more cogency than he has done tonight. He has placed on the Record a very good case for our watching the position very carefully in regard to this old and valued friend of this country. Beyond that I cannot go. I mean it when I say that the noble Lord rendered a service by setting out the case in the way he has, and I can assure him that what he has said will be borne in mind in the immediate and in the longer term future, because we agree with him that the closer our relations are with Madagascar the better for both countries.

INHERITANCE (PROVISION FOR FAMILY AND DEPENDANTS) BILL [H.L.]
Returned from the Commons, agreed to.
IRON AND STEEL BILL [H.L.]
Returned from the Commons, agreed to.
  NATIONAL HEALTH SERVICE EXPENDITURE
  NATIONAL HEALTH SERVICE EXPENDITURE
  TIED COTTAGES IN AGRICULTURE
  TIED COTTAGES IN AGRICULTURE
  FOREIGN VEHICLES: OFFICIAL USE
  FOREIGN VEHICLES: OFFICIAL USE