Sitting of 9 April 1976

Preamble
The House met at Eleven o'clock
PRAYERS
[Mr. SPEAKER in the Chair]

ENGLAND
11.4 a.m.
Mr. John Storehouse: I beg to move,
That this House, concerned about the continued decline in the economic, social and philosophical health of England, calls for inspired leadership to reverse this trend; and believes that an early general election is an essential first step in the establishment of a firm base for such leadership.
This motion is concerned with conditions in England, which has suffered a most grievous decline over the past three decades; that decline has been particularly marked during the past 12 years. It has affected almost every aspect of our life. Although some material standards have been improved since 1946, it cannot be said that the majority of the citizens of England are significantly happier. Far from it.
There is a tension, a disquiet and a dismay in the nation which can be seen in the strain on the faces of the ordinary people. In the debates in this House reference is often made to specific aspects of the country's problems. Hon. Members quote statistics, speak of social policy or give examples of the performance of public or private industry to illustrate an argument or, more usually, to score a political point against the other side.
There are two overriding weaknesses in this customary technique of speech-making. First, it neglects the philosophical context of England's decay and, secondly, it resorts to buck-passing of responsibility. The people outside this House, apart from the tiny minority of party activists, are fed up with this name-calling and bickering, as though one side was wholly noble and good and the other callous, incompetent and cruel. The bad images that each major party strives to create about the others are often mani-
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festly unfair and maliciously contrived. It would be more fruitful if party spokesmen and Ministers began to analyse their own shortcomings rather than to adopt the cheap custom of disguising their own inadequacies and failures by slinging mud at opponents.
Once upon a time this party political squabbling might have had some merit by helping to identify the issues about which the country had to make decisions. If that were once true, it is certainly not true today. The squalid party political muck-raking in which so many otherwise normal and decent men, and now women, engage is almost totally irrelevant to the problems which we face. The country is dispirited about the parliamentary process which is distracted by the party games from getting to grips with the central issues. The country is disillusioned about politicians because of the humbug and hypocrisy in which they constantly engage.
There are outstanding exceptions, of course, but most party politicians do not tell the whole truth, as they know it, because their only priority is to cling to some personal position or to manœuvre to achieve promotion in the preferment stakes. The men of principle and purpose are shunted into the sidings or culsde-sac and the compromisers and the manipulators stay to operate the engines of power. But, alas, they have no destination. Their purpose is not to achieve some inspiring goal. It is not even to master contemporary problems. The motivation of policitions generally—I accept that there are some exceptions—is merely to survive until next week, next month or next year, constantly adjusting their stance according to the prevailing wind.
That is why many of the brutal facts of England's decay never get through to the people. They are obscured or lost in the fog created by the politicians. How can the people respond when they are not told the truth or when it is obvious that the leaders are frightened to face up to some powerful vested interest which, for its own reasons, does not want the truth to come out? What this country needs is the fresh air of frankness and honesty to blow away the dank mists of callow deceit. Let the people breath and think again. The time for bland soft soap has passed.

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The motion refers to England rather than to the United Kingdom because England's interests have been neglected. A great deal of time is spent in our debates discussing Scotland, Wales or Northern Ireland, so much time that we tend to forget that England is the most populous of the four parts of the Union and has for a generation subsidised the other three countries. I have no quarrel with those other countries, and I do not want to pick one. I do not want to turn this debate into a debate on devolution except to say in passing that if the Scots choose independence, as I believe they will within the next five to 10 years, good luck to them. I can understand the frustration they must feel in Edinburgh or Troon with the tedious bureaucracy of Whitehall. I appreciate how they long to be severed from the arrogance and pettiness of the office-servers in the South. There are also many English people who want to be free of this incubus.
Arguments used in England against Scotland's independence are usually based on the expectation of North Sea oil, as though North Sea oil will be the salvation of all our problems. That is not so. We can find the solution for an economic recovery only within ourselves, and North Sea oil is very marginal to the problem. It also falls on two grounds.
First, whichever country takes on the investment in the North Sea will also take on the liabilities, and the servicing of the debts which have been incurred for the exploitation of North Sea oil will be a very great burden. Furthermore, the value of North Sea oil to Scotland or to England still has to be defined, and there are strong arguments put forward, particularly by Dr. Frank Hansford-Miller, who speaks out for England on this issue, that if the line is drawn according to international custom many of the fields in the North Sea will fall to England and will not be in Scotland.
I quote what Dr. Hansford-Miller wrote last year in the November issue of Tribune:
"By International Maritime Law, supported by the International Court at The Hague, the boundary line between oil zones on the continental shelf in the North Sea is the prolongation of the land boundary into and under the sea. European countries' oil zones have been delineated in this way. The land frontier between England and Scotland is on a bearing of 035 degrees, i.e. degrees East of North,
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and this projected out into the North Sea brings Forties, Montrose, Argyll, Andrew, Maureen, Lomond, Auk and Josephine oil fields, and the southern gas fields, into England's waters.
Scotland, in fact, has very little oil—Claymore and Piper only—and no gas, most of the remainder being in Shetland's waters, and Shetland is not Scots at all but Norse."
We have failed for the past hundreds of years to find a solution to the sectarian conflicts in the unhappy Province of Northern Ireland, but the conflicts have been immeasurably worse during the last eight years than ever before. The solution is just as likely to be found within the context of a United Europe to which both parts of Ireland belong as from England's continuing to accept the burden of direct rule from Whitehall.
I note that the Government have completely abdicated their Front Bench. No Minister seems to be in attendance. That is a commentary on the disdain with which they regard the House of Commons. I think that the House will live to regret that absence.
I put the emphasis on England because I believe that the deep problems of the other countries can be best solved outside England. It would now be constructive for the English, whom I define as all those who live and work in England, to concentrate on improving the conditions of this land rather than debilitating England by trying vainly to master the passions and idiosyncrasies of others. Let us make no bones about it. England, on the Underground and in the restaurants, is an unsafe and unhappy country because we have been infected by the Irish madness. It would be better for us if that madness could be exorcised. It amazes me that we do not see this situation in its true perspective. The natural complacency—some would call it phlegm—of the British enables us to close our minds to the facts.
What are the facts? The brutal fact is that there is a greater level of violence and political terrorism in this country than there is in any other country in Western Europe. The statistics are frightening. A Written Answer from the Secretary of State for Northern Ireland shows that in the past eight years civilian deaths in Northern Ireland totalled 1,108, RUC deaths 76, and Army and UDR deaths 309. That makes a total in Northern Ireland of 1,493 deaths

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from terrorism. In Great Britain, according to a Written Answer last night from the Home Secretary, there have since 1972 been 61 deaths as a result of political terrorism. The total for the whole United Kingdom is 1,554 deaths. We have never known anything like that in British history, even during the Irish troubles of the 1920s and before.
The deaths from terrorism in the rest of Western Europe were as follows during the last eight years: Belgium 1, Germany 33; Greece, with all the turmoil, 17; Italy 85; Holland 4; Portugal, where there has been a revolution, 17; and Spain, which is often in the news because of the changes there, 101. No country in Western Europe has had even one-tenth of the deaths from terrorism which we have suffered.
The economic facts of life are likewise frightening. The figures I shall quote are based on research from the best available sources, and I am grateful to the Library for providing valuable assistance in that research. Exact comparisons between countries are impossible because they depend upon factors which are not always quantifiable and also on fluctuating exchange rates, but the statistics available reveal trends in stark reality and point in a direction almost too horrible to contemplate.
For purposes of comparison I have chosen eight countries—two highly-populated countries off a large land mass both of which lost their empires though in totally different circumstances—Japan and the United Kingdom; three countries in Europe with a similar population to ours—Germany, Italy and France, two of which were badly affected by the last war, Germany having been truncated as a result; two smaller European countries, Holland and Denmark; and the United States of America. I could have chosen another 18 countries with similar problems to our own, but I do not think that the result would have shown any different trend.
In 1948 the United States had a population of 147 million, a gross product of $261,200 million and an annual income per head of $1,774. The United Kingdom was next in line, with an annual per capita income of $967 deduced from a gross product of $48,360 million. At
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that time the population of the United Kingdom was 50 million. Next in line was Denmark with $878 per capita income, Holland $604, France $603, West Germany $466, Italy $303 and Japan $68. Japan was the lowest in the league by a long way.
The United Kingdom's per capita income in 1948 was slightly over half that of the United States but ahead of all the other countries in my list. It was twice the German figure, three times the Italian, and 14 times the Japanese. By 1951, however, the United Kingdom had dropped from second place in the league to fourth, behind France and Denmark. By 1964, West Germany had crept ahead and the United Kingdom was in fifth place.
By 1975 the United Kingdom had dropped to seventh place, with a per capita income of $3,451, based upon a population of 56 million and a gross national product of $193,000 million. Only Italy now has a lower per capita income than the United Kingdom in the list of eight. But Italy has climbed from one-third of the United Kingdom standard to over two-thirds. Japan, which used to be far behind up, has streaked ahead, with its income per head nearly one-fifth greater than that of the United Kingdom.
It used to be one of the myths when I was young that the Japanese competed on a bowl of rice a day. That is certainly no longer the case. As I walk to the House every day and cross the Thames, I pass groups of working-class Japanese tourists clutching their high-class cameras and photographing the Palace of Westminster. Tens of thousands of them will be coming this year in jumbo jets. Precious few British tourists will be going on package tours to Japan.
Little Denmark's per capita income is $7,118, proving that a country does not have to be big or endowed with natural resources to achieve high standards. West Germany has now $6,964 per head, France $6,288 and Holland $5,948. All the countries with which the United Kingdom can be compared are now well ahead of us. Our situation for growth in 1948 was better than most of the others, but the opportunity was thrown away.

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The reason for our decline can be found in the figures for manufacturing employment and output. Here again I am grateful to the Library for what it has produced. In 1948, there were 7,709,000 employees in manufacturing industry in Britain and the manufacturing output was $15,000 million, which means an output per head per worker of $1,969. In the league with these other countries in 1948, the United States was ahead of us with 14,292 workers and $5,198 output per worker and Denmark was ahead with $2,614 output per head. The rest were well behind—Japan was $272 per head. By 1951, the output per head of the United States had jumped to $6,798 with 16 million workers, but the output for the United Kingdom was only $1,895, showing that the rot had set in already before 1951. It has dropped since then. Other countries were going ahead. In Japan, output per head jumped from $272 to $842.
When we move on to 1964, we find that the United Kingdom had dropped to sixth place in the league because by then West Germany was ahead of us, with $5,512 output per head in manufacturing industry. Figures show also that Japan had jumped from $2,887 output per manufacturing worker.
For 1974 and 1975, the figure—the latest available—demonstrate how far we have dropped behind. It is frightening. By this time, Japan has become top of the league with a phenomenal output of $22,550 per worker employed in manufacturing. The United States is second with $19,825 and West Germany is third with $19,441. Then come France with $14,412, Denmark with $10,589 and Holland with $9,299. The United Kingdom is bottom of the league, along with Italy, with $7,456 output per head.
Mr. Marcus Lipton: Will the right hon. Member be good enough to say what contribution he has made during the last year or two to arresting the continued decline in the economic, social and philosophical health of England?
Mr. Stonehouse: That is a typically trite remark.
Mr. Lipton: Answer it.
Mr. Stonehouse: It does not become the hon. Member for Lambeth, Central (Mr. Lipton) to make it. During the last year I suffered a breakdown. I explained to the House—a fuller House than we have today—the causes of my breakdown, which were summarised as a collapse of the ideals for which I worked for over 18 years in this House. I am not going to go over that again. But before that time I worked very hard as a Member of Parliament and very hard as a Minister, and one of the achievements I had as a Minister in helping to arrest this decline was achieving the biggest-ever export orders in the Middle East.
I have no apology to make about the work I did in that time. I have already apologised to the House for the fact that I had a breakdown, and I think I am now performing some service as a result of my breakdown, in seeing things in greater clarity than I did before, in drawing attention to some of the humbug which exists in this House. If I may say so, the hon. Member is a very perfect example of humbug many times.
Mr. Lipton: Answer the question. Stop all that nonsense.
Mr. Speaker: Order. It is not in order to refer to any hon. Member as a humbug.
Mr. Lipton: Everyone is a humbug except you.
Mr. Speaker: Order. No one is a humbug officially in this place.
Mr. Stonehouse: The hon. Member has achieved his purpose of securing his name in the evening newspapers, which is what he does from time to time. We know his tricks. He is a very amusing Member and we are all glad to have him in the House during his period of retirement from active political life. But he must acknowledge that there is a great deal of dishonesty and hypocrisy in our political life, and I intend to draw attention to some of it in my speech.
The point I am trying to make, and from which the hon. Gentleman is deliberately distracting himself because he does not want to face it, is that, whereas other industrial countries have increased their manufacturing employment and at the same time their output per man, our manufacturing employment

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today, at 7,705,000, has virtually remained static for three decades despite an increase in our overall population. Our output per man has increased only three and a half times since 1948. There has been a tenfold increase in West Germany during this period in output per man, and a hundredfold increase in Japan.
One other significant fact that emerges from these figures—as I said before, the rot set in a long time ago—is that between 1948 and 1951 output per man actually decreased. Therefore, it is a myth to blame it all on 13 wasted years of Tory Government. That is one of the myths perpetrated by the Labour Party. The decline actually started well before 1951.
One of the reasons why our manufacturing employment is static is that more and more of our people have been sucked into the bureaucracy; the growth in the number of bureaucrats is phenomenal. It is the only growth industry we have. Taking the last 12 years as an example, the non-industrial Civil Service has gone up by 30 per cent. This is despite an investment in 200 computers.
The computers were supposed to save manpower. In fact, the Civil Service has achieved the truly remarkable feat of increasing the size of the bureaucracy to service the computers, rather than the computers serving to make the bureaucracy more efficient. No less than £23 million was spent of computers by central administration in the last year. Clearly, that expenditure has not been cost effective in saving manpower.
The story is certainly true also of photo-copying machines. In a Written Answer to a Question on 1st April 1976, the Minister of State, Civil Service Department showed that in. 1969–70 expenditure on photo-copying machines for the Civil Service was £1·8 million. It increased year by year until in 1975–76 it reached £5·7 million. We now have 10 copies made where two used to be made before, and 50 where five used to be made. Forms and paper are clogging up the machine. That is what is suffocating the country.
Ministers are sensitive when hon. Members attack the inefficiencies and waste of the Civil Service as though these
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people must somehow be immune from the rules of efficiency which should govern other activities in our society. In fact, the growth of the crushing bureaucracy is central to our problem, and we shall not solve our manufacturing weaknesses until the size and the burden of the bureaucracy is reduced.
The same applies to the municipal services. There were 1½ million employees in 1964. In 1976 there are 2½ million. This comes after a period of municipal reorganisation which, we were told by the experts, would save on manpower and promote efficiency. Heaven save us from experts. The so-called reforms pushed through by the late Dick Crossman were an expensive blunder.
The last Prime Minister, in a speech at Eastbourne, referred to the problem of overmanning in the municipal services, but he did nothing effective about it. Frankly, the cancer should be cut out at its roots, but that would mean tackling entrenched vested interests, and Ministers are reluctant to do that.
The growth of the bureaucracy is, of course, not confined to the public sector. It exists in private industry also. But it tends to be worse in public enterprise, because in that sector the unions are better able to protect their positions and stop the adoption of efficient techniques. I saw that for myself when I was Postmaster-General. I realised how difficult it was for anyone to break down the vested interests of the Post Office unions and to destroy the overmanning which blatantly exists in that sector.
The fact is that we have failed to achieve efficiency in the public sector. This, combined with the fact that the public sector employment, using 1973 figures, is 6·5 million people out of a total employed force of 24·9 million, tends to diminish our total performance as a nation. Our public sector employment, at 26·3 per cent., is one of the highest in the Western world.
It is one of the great misfortunes of political life in this country that, because of the structure of our parties and the fact that one of them depends on the trade unions for financial and activist support, it is extremely difficult to get any positive action on this key question of public sector bureaucracy and inefficiency. It has become a sacred cow in our society.

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Once the bureaucracy gets a hold, it is like a pernicious cancer and it is difficult to dislodge.
Last week, in an Adjournment debate, the hon. Member for Harborough (Mr. Farr) referred to the large number of forms which are sent round to small firms. He mentioned the weight of these forms. Referring to a small firm in his constituency with fewer than 40 employees, he said that in one week it received
"25 official forms, booklets of advice and sheets of instructions. This is just one week's intake."—[Official Report, 2nd April 1976; Vol. 908, c. 1869.]
The reply given by the Minister of State. Department of Industry to that attack was absolutely puerile.
We need ruthless surgery to get rid of the excessive form-filling mania that we have in this country. Let us follow the example of Marks and Spencer, which some years ago slashed its use of forms overnight and as a result became more efficient.
To return to the central theme, the decline of England is also demonstrated by the shocking decline in the value of the £ sterling. Here I am grateful to the hon. Member for Macclesfield (Mr. Winterton), who put down a Question which was given a Written Answer on 5th April. The answer from the then Paymaster-General shows that since 1963 the value of sterling has dropped against every other major currency in the world, even against the lira. According to the tables supplied in the answer, however, there was no significant drop between 1956 and 1963. For instance, as against the United States dollar, where the figures were 2·78 in 1956 and 2·79 in 1963, there was actually an increase in the value of sterling.
The decline came after 1963, and we have some really frightening figures. From 1964 to 1975 the number of deutschemarks to the pound fell from 11·1 to 5·3. This is a decrease of 50·9 per cent. The decrease since then has been just as drastic. In just one year there has been a drop to 4·75. That is equal to a drop of 12·8 per cent, in the last 12 months. Since these figures were first produced by the Library, we have seen an even more serious trend.
An article in The Times today says that
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"The pound resumed its headlong decline on the world's currency markets yesterday as concern mounted among foreign bankers over the cool response by trade union leaders to the Chancellor's Budget offer of tax relief in return for 3 per cent, pay increases. Monetary authorities in London appear to have been taken completely by surprise at the sudden wave of selling which developed in mid-afternoon. By the close of trading the pound was displaying a further fall against the dollar of 2 United States cents, closing in London at $1·8435. An hour later another ¾ cent had been wiped off the pound's external value in New York trading. Compared with last night's London closing level the pound has now dropped 18 cents against the dollar since the beginning of March—a fall of 9 per cent."
That shows the extent of the decline and the ebbing confidence of the rest of the world in Britain's capacity to put its house in order.
The economic decline to which I refer in my motion is quite adequately proven by the figures I have given. The social decline is proven by the break-up in standdards of conduct, the growth of terrorism, unofficial strikes, political strikes and the class war. The country, as we see with sadness, is riddled with envy, distrust and, in some cases, hatred between communities. Philosophically the country is without a sense of direction, unless it is that we now consciously accept the culture of the bingo halls, "Crossroads" and "Coronation Street", and dominated all the time by a narrow materialism.
Today in England we live in a blinkered society with nearly everyone—politicians, trade union leaders, business heads and professional men—pursuing his own interests, protecting his own group or his own class, and refusing to understand the concerns of the rest of society. People cannot, and they do not want to, see the totality of the situation we are in because it is too frightening to them. Furthermore, no leaders have emerged who are prepared to spell out the brutal truth that we are in danger of becoming a nation in decay. If we do not come to our senses, overseas countries will tell us in no uncertain terms what our position is.
The Government and public authorities now owe £20,000 million to overseas creditors. That is about £1,500 for every family in the country. It is a crushing weight of debt. Not only do we pay interest on it; we are bound under the loan agreements to repay two-thirds of

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these debts in foreign currency, mostly in deutschemarks, Swiss francs and dollars, so that the burden of the loans is that much greater.
The inflationary effect of this continuous devaluation, particularly that of last month, is that the debts we have already incurred have to be paid at a higher price in terms of foreign currency, and we face the awful spectre that we may soon reach the abysmal position of many Third World countries where the money we borrow will be completely used up in paying the debt interest. Last month we borrowed £1,000 million from the IMF. According to The Times, that was all used up in trying to bolster the sterling rate. Must we wait for other countries to impose reform upon us? What is the answer? The solutions are not easy because the problem is deeply ingrained.
Unlike Germany, France and Japan, we have not yet accepted the end of Empire. Too many of us live in the past that is gone. Our priorities should be, firstly, to have more honesty and fewer lies from our political leaders. They should cut out the party games and leave in the wardrobe the cloaks of deceit which they wear. I should like to quote from the speeches of the former Prime Minister, the right hon. Member for Huyton (Mr. Wilson), of the last few months to show the sort of humbug and hyprocrisy in which the leaders engage. Of course, it is not confined to him. Most of the others do it.
On 24th January the right hon. Member made a speech to the Labour Party at Cardiff. He said:
"The unemployment figures published this week for Great Britain are an indicator of the depths that the recession has reached. Although the signs now are that the slump may be beginning to give way to a slow process of recovery, it will be many months before higher production, and the higher consumption we have called for to sustain that higher production, begins to be reflected in a significant fall in the unemployment figures."
There was an edging there towards an honest description of the position. But then he got carried away with a bitter party political attack on the Tories. Rather than face up to the real issue, he had to engage in the attack.
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In attacking the Shadow Chancellor, the right hon. Gentleman said:
"Then what about unemployment? Well you can guess by now what their answer to that will be. They will reduce unemployment by increasing it. And only yesterday we read that Sir Geoffrey Howe, the Shadow Chancellor, was telling his party workers that the Conservatives wanted cuts in public expenditure and they wanted them now. He said—and I quote his exact words—' There is no escaping from the fact that this will increase unemployment in the short term'."
That was the former Prime Minister attacking the Opposition in January, and then on 6th March speaking in Scarborough. Would hon. Gentlemen like to join me on the Treasury Bench?
Mr. Speaker: Order. The right hon. Gentleman must leave the Government Front Bench and return to the place from which he was addressing the House.
Mr. Stonehouse: I understand, Mr. Speaker, that under the rules of the House there is no objection to an hon. Member speaking from this——
Mr. Speaker: Order. When I am on my feet, the right hon. Gentleman must resume his seat. It is unprecedented, to say the least, for an hon. Member to walk across the Floor of the House in that demonstrative fashion when he is already addressing the House from one place. This House is based on courtesy, and I appeal to the right hon. Gentleman, who must obviously be concluding his speech, to conclude it from his original place and not from the Treasury Front Bench.
Mr. Stonehouse: There is a precedent for what I am doing, Mr. Speaker. Some years ago Dame Irene Ward, then the Member for Tynemouth, took her seat on the Front Bench as a protest against the way in which the then Tory Administration were dealing with widows' pensions. Her actions then were apparently quite in order.
Mr. Speaker: Order. Well, it is not in order now. I must ask the right hon. Gentleman to resume the place from which he was addressing the House.
Mr. Stonehouse: Of course, Mr. Speaker, I shall adhere to your ruling and go back to the other side of the Chamber. However, I am glad that the fact I have come to this Bench has

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demonstrated to the country and the world at large that the Chancellor of the Exchequer's example in abdicating responsibility to the TUC has now been followed by the whole of the Government, who have abdicated their responsibility completely over the condition of England and have become stay-away Ministers as well as stay-away MPs.
Mr. Speaker: Order. I must say, the longer I am in this House the stranger are the things that I see happen.
Mr. Stonehouse: Thank you, Mr. Speaker, for that interjection. Strange things do indeed occur. It is extremely strange that the whole of the Labour Party, including Ministers, have decided to stay away. Is it that they dispute what I am saying? Do they deny the facts that I have brought forward? They are based on official statistics produced and culled by the House of Commons Library. The fact is that this country is in a state of decline but that Ministers are showing their lack of interest in the subject by running away from what I am saying. They are anxious not to hear what I say about the humbug and hypocrisy of the last Prime Minister because this is a forbidden subject that we are not allowed to refer to in public life. It is one of the rules of the club that one does not refer to the unsavoury aspects of the hypocrisy of our leaders.
In March, at another Labour Party meeting, the right hon. Member for Huyton made a similar speech about the unemployment position and he again attacked the Shadow Chancellor and quoted his words. He had the gall to say:
"The hypocrisy of the Conservative pronouncements on unemployment has now become exceptional, even by their standards."
I do not deny that there is a great deal of hypocrisy in the Tory Party. There is some hypocrisy in the other parties as well. When the last Prime Minister talks about hypocrisy, I think that he should reread his speeches made on other occasions, but in the same period, when he was not speaking to Labour Party audiences.
On 5th February, speaking at the annual banquet of the Birmingham Chamber of Commerce, the right hon. Gentleman said other things about unem-
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ployment. He did not use the excitable language that he used on the other occasions. After referring to the unemployment situation, he said:
"Despite all these hopeful signs, it would be wrong to expect any sudden reduction in the unemployment figures. All the experience shows that the effect on employment takes time to work through."
There was a little honesty. However, that speech was made not to the Labour Party but to the Birmingham Chamber of Commerce.
An even more revealing passage appears at the annual banquet of the Overseas Bankers' Club, Guildhall, on Monday 2nd February. The right hon. Member for Huyton started his speech with this commercial plug:
"1975 was a year of real achievement for the British economy and for our economic policies for the restoration of our national economy and prosperity."
That was the opening sentence of his speech in February. We all know what has happened since then. The facts do not back up what the then Prime Minister was saying.
But on unemployment he had this to say on page 6 of the release of that speech:
"Past experience has shown us that there is an inescapable time lag between the increase in production and demand and the effect of unemployment".
I ask the House to note this next sentence:
" We must therefore expect the underlying trend of unemployment to continue to rise, in this country and abroad, for some months yet".
There we have the cat out of the bag—the then Prime Minister admitting that unemployment was going to rise in the next few months. That was exactly what the Tory Shadow Chancellor was saying and for which he was attacked by the Prime Minister, who, wearing another has at a Labour Party meeting, was not prepared to admit to that fact. I think, therefore, that we have had a great deal of humbug and hypocrisy from not only the last Prime Minister but many others.
I think that the country will now expect politicians to stop this silly game. They should cut out the humbug and hypocrisy, come clean with the British people and tell them the full brutal facts of life of 1976. That is the first priority I would establish.

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Secondly, I would reduce the crippling burden of bureaucracy in England. We should put the Civil Service on a rigorous cost-effective basis and, as a start, cut it back overnight by 30 per cent, to the levels of 1964.
Thirdly, we should provide incentives to people of initiative and, above all, encourage the young. Too many geriatric appointments are made to positions in the public service. The over-sixties are usually preferred. Beswick, Balogh, Kearton and Dobson are the kind of names which crop up. We should have fewer people appointed from the over-sixties and more from the under-fifties and even the under-forties. We should give the young a chance, because the older men have clearly failed.
Fourthly, we should have an all-out campaign to stop the lunacy of official and unofficial strikes. These cripple the economy. They cripple industry. They have crippled British Leyland in the last few months.
In the next 50 years, when we have grown up out of this ridiculous period in which we seem to regard strikes as completely acceptable, we shall look back on them as an aberation in the same way as we look back on some of the religious madness of the period of the Crusades. It is madness to allow strikes to occur which are tantamount to cutting the veins and letting the blood of our economic and industrial system. That is why other countries have forged ahead. That is why our overmanning is so bad. That is why our productivity is so low. That is why our industrial investment is much lower than in other industrial countries. There is no value in investing in this country if the return on investment is so low because of the disputes to which I have referred.
Fifthly, we should re-establish the significance of parliamentary debate. The rot started here. Therefore, the reform must start here. We cannot solve problems simply by passing the buck to the TUC or to anyone else. The House of Commons is moribund. It is dying on its feet. There are too many stay-away MPs. In seven months I have been in this Chamber every day for the whole of Question Time and for many of the main debates. There are some Members whom I have never seen in the Chamber.
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Of course, they turn up to vote in Divisions when there are three-line Whips. They ask Written Questions and get answers for their constituency Press. But they are never in this place.
It is ironic that some who criticise me most for being the so-called runaway MP during the period of my illness are the most persistent stay-away Members. Incidentally, I was not the only one to be ill in that period. Many others who have been ill were away and did not participate in the proceedings in the House. But I was made the scapegoat, for reasons which, I acknowledge, were partly due to my own conduct. But why should the Members who were criticising me demonstrate their inadequacy by staying away today or on any other day?
The attendance in this Chamber is appalling. Last week, for instance, there was a very important debate, but the attendance was so bad that two hon. Members each got two speeches in on the same day. The hon. Member for Rochdale (Mr. Smith) made two speeches and the hon. Member for Reading, North (Mr. Durant), who is to follow with his debate today, also made two speeches last Friday because the House was so deserted. We have only to look at the Hansard report of that debate to see that references were made several times to the absence of Members from this Chamber. Therefore, the fact that there is not one Minister or Labour Member in this Chamber today is not exceptional. The only reason why there are sometimes Ministers on the Government Front Bench is that it is part of their job to sit there.
A fortnight ago the hon. Member for Eastbourne (Mr. Gow) moved a very good motion on personal freedom. Virtually the whole of the Labour Party ignored the debate, except for one or two short interventions and a longer one from an hon. Member who had to talk out the debate under instructions from the Whip. When the Under-Secretary of State for the Home Department rose to reply to the debate there was not one hon. Member on the Benches behind her, and the hon. Member for Yarmouth (Mr. Fell) had to cross the Floor and sit on the other side to keep her company.
What is happening today is not exceptional, but I hope that the message

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will go out from this Chamber to people in the country who elected the Members here that their Members are likely to be stay-away Members who do not do their job in the Chamber. Some hon. Members are in their constituencies, but I very much doubt whether that applies to them all.
Even on Mondays to Thursdays the attendance is appalling. If one looks at the reports of debates over the last few weeks, one sees references in the major debates to the fact that the attendance is extremely bad. During the debate on direct elections to the European Parliament the attendance was appalling, and even during the Budget debates the number attending has been very small and has usually consisted of those who are trying to catch the eye of the Chair.
On Budget Day a large number of hon. Members were in the House, but the attendance was worse than for many years. What is interesting is that before the Chancellor of the Exchequer introduced his Budget there were important Questions to the Secretary of State for Defence. On that day, 14 Labour Members had Oral Questions to the Secretary of State for Defence. Those Questions were high on the list and it was known that they would be reached, yet of those 14 Members eight were present to ask their Questions, and six were absent. You, Mr. Speaker, had to call their names because you had not been told that they would not be here. They did not have the courtesy to let you know that they would be absent. The hon. Members concerned were those representing Erith and Crayford (Mr. Wellbeloved), West-houghton (Mr. Stott), Manchester, Blackley (Mr. Rose), Darlington (Mr. Fletcher), Normanton (Mr. Roberts) and Newport (Mr. Hughes). Those are the hon. Members who had put down Oral Questions but were not here even on Budget Day to ask them when they were reached.
I accept that there are some hon. Members who do an excellent job in this House. I acknowledge that and praise them for what they do. I pay tribute to the hon. Member for Bolsover (Mr. Skinner), even though I do not agree with him, because he attends the Chamber and participates in our proceedings. The Chairman of the Expenditure Committee and the Select Committees of the House do an excellent
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job and I acknowledge and praise their work.
I acknowledge and praise the work of the Liberal Members who work extremely hard. I praise, too, many Conservative Members who do a good job for their party and their constituencies. They are a hardworking minority in this House. The right hon. Member for Down, South (Mr. Powell) works very hard and is here every day during Question Time. I praise him as a great parliamentarian. Although I do not agree with many of the things that he says and does, he is a great asset to this House.
Finally, I call in my motion for a General Election now. Why do I do this? It is because I think that the country expects an election. The Leader of the Opposition herself called for an election just after the previous Prime Minister announced his resignation. I hope that the right hon. Lady will renew that call, because it is apparent that with the coming breakdown in the talks between the Chancellor of the Exchequer and the trade union movement this country will be going into a serious economic crisis in the next few months.
The Prime Minister has no proper mandate to deal with this situation. After all, the Labour Party had only 28·8 per cent, of the electorate's support at the last election, and the Labour Members elected at that election voted only 27 per cent, in first preference votes for the present Prime Minister. It is, therefore, a case of a minority of a minority putting the present Prime Minister into office. I do not think that he will be able to exercise the authority that is required, because he cannot count in particular on the Left-wing Tribune Group of Members, who can hold a pistol to his head whenever they choose to do so.
For the sake of the country there should be a General Election now. If we do not have one now, the next three years or so will be for electioneering of one sort or another, with Ministers manoeuvring and manipulating to get votes rather than tackling the deep-seated problems to which I have been referring in this debate. I hope that the pressure will grow for a General Election so that we can clear the air, bring in a fresh team of hon. Members to this

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House, clarify the problems of Scotland particularly and perhaps, finally, get a Parliament that is prepared to do a really honest job for the people and tackle the deep-seated problems that exist in this country. I hope for the sake of England, quite apart from doing it for the sake of the other countries in the Union, that that will be done.
12.7 p.m.
Mr. Iain Sproat: I think I can promise that I shall speak for a moment or two less than did the right hon. Member for Walsall, North (Mr. Stonehouse). None the less, I welcome the opportunity which the right hon. Gentleman has given the House to discuss this important subject of the state of England.
If I agree with the right hon. Gentleman about nothing else, I agree that it is sad to see the Government Benches almost bare. I do not think that it is consonant with the traditions of fairness in this House, nor with the traditions of British justice of the presumption of innocence until proved guilty, that no Minister is here to answer the debate.
I can understand the feelings of the Government and of the Labour Party about the conduct of the right hon. Gentleman, who did his best to land them in the constitutional soup this week. I can appreciate all those feelings, but I cannot recall any other occasion in this House—I may be wrong—when the Government have seen fit to ignore a speech on an important subject—indeed on any subject—by an hon. Member. I think that that is bad for Parliament and not consonant with the traditions of this place whatever we may think of the right hon. Gentleman, or whatever he is alleged to have done or not to have done.
I had not expected this to be such a poorly attended debate. I suppose that on these occasions hon. Members who sit for Scottish seats usually begin with some such pleasantry as "having the temerity to take part in an English debate", just as it is usual for hon. Members who sit for English seats, when they come to the Scottish Grand Committee or a Scottish Standing Committee, to make similar remarks about their temerity.
Such remarks are usually an agreeable pleasantry, but I am sorry that they can
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no longer be taken as such. The other day my hon. Friend the Member for Wolverhampton, South-West (Mr. Budgen) put down a Question to the Secretary of State for Scotland and it is due to be answered next Wednesday. A Question was also put down by my hon. Friend the Member for Staffordshire, South-West (Mr. Cormack). This provoked a response from the SNP Member for Dundee-East (Mr. Wilson) about the impertinence and arrogance of English Members putting Questions to the Secretary of State for Scotland.
This is reported in the Scottish Press absolutely straight, not as the absurd—indeed, contemptible—remark that it was, but as something natural for a Scottish National MP to have the right to criticise a Member of this United Kingdom Parliament with an English seat for attempting to put down a Question to the Secretary of State for Scotland. It is no longer, alas, a mere pleasantry when I say that I stand here if nothing else to demonstrate my right as an MP for a Scottish seat to make some remarks about the state of England.
What I want to say relates to a subject which was raised in his wide-ranging speech by the right hon. Gentleman. That is the effect upon the condition of England which present Government plans relating to the condition of Scotland will have. I am referring to their plans for some devolution of legislative powers away from this House to a separate Scottish Assembly. Before I turn to them in more detail, I would reinforce what the right hon. Gentleman said about the position of North Sea oil and the way in which this relates to the unity of the United Kingdom.
It is true that such tattered remnants of the SNP economic case as were left after the excellent speech which the present Secretary of State for Trade, then the Paymaster-General, made in West Lothian a couple of weeks ago are completely destroyed by the fact that the SNP bases its entire economic case upon North Sea oil, which it chooses to call Scottish oil. In fact two-thirds of the oil lies off the coast of Shetland, which has made it abundantly clear that it wants to have nothing to do with a separate Scotland or a separate Scottish Assembly. Therefore, an independant Scotland or Scottish Assembly which

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hoped to exist on revenues from Scottish oil would be sadly disappointed and the people of Scotland would be a very much poorer nation than they are now.
One thing which the right hon. Gentleman did not mention, which arises out of the present condition of England, is that we have just seen plans go ahead for the development of the Selby coalfield in Yorkshire. This is a perfect example of the way in which the energy and all other needs of the United Kingdom should be integrated, oil from Shetland and coal from Yorkshire all coming together to form what one would hope would be a large stronger United Kingdom economy.
We do not talk about a Yorkshire Assembly, not yet at least. It is absolutely absurd to think in terms of separate Scotland and separate England trying to work out our economic base on Shetland oil, Yorkshire coal or whatever. One of the things about which I disagreed most strongly with the right hon. Gentleman was when he talked about welcoming the prospect of an independent Scotland.
Mr. Stonehouse: I welcome the opportunity for the Scottish people to make a decision about it. If they decide that they want independence, I think that the English people should accept that willingly and wish them luck.
Mr. Sproat: I do not want to go into great detail but I do not like phrases like "the Scottish people". Of course the Scots are a people in one sense, but the Scottish people are no more ethnically one than are the English people. I would remind the House that the commonest name in Scotland is John Smith, just as it is the commonest name in England. We have a member of the Government called John Smith and he has a Scottish seat. I do not agree that somehow there is a difference between Scottish people and English people.
We have been one British nation for over 250 years and that is the way we should remain. Just as there are Celtic fringes in England there are Celtic fringes in Scotland. It is totally false to try to make out that somehow there is a separate Scottish people of a totally different ethnic background from that of the English people.
802
The reason why I raise these matters in a debate about the condition of England is that this whole subject of devolution is not confined to Scotland. As the right hon. Gentleman will know it is proposed to bring forward a White Paper on separate Assemblies for England. The only reason for this is that hon. Members from Merseyside, Yorkshire, or, indeed, the South-West of England have said that if Scotland is to have a separate Assembly to which extra funds no doubt will be channelled, there is no reason why England should not do so.
The population of Yorkshire is twice the population of Scotland. Why, therefore, should not Yorkshire have similar powers over its destiny? Unemployment in the North-West of England is certainly as bad as it is in Scotland. The areas of social deprivation on Mersey-side are as bad as they are in Scotland. English MPs have a perfect right to come forward and say that if it is the intention of the Government to have a separate Assembly for Scotland, we must have one for England as well.
Where does this lunacy lead us? On the basis of the Government's costing, the Scottish and Welsh Assemblies tot up to £22 million. I think that that is a grotesque underestimate. However, let us take that estimate of £22 million. On the same basis, English Assemblies will cost about £150 million. Are we really saying to the British people at this time of economic stringency that we intend to lay a further burden on their backs of a minimum, when it is all grossed up, of £200 million? And that is just the Government's estimate. If nothing is sure in this world of politics, it is certainly true that the estimates of any Government turn out to be a gross underestimate.
Concorde now costs £1,100 million but the Government started off by saying that it would cost £150 million. Of course, there are inflationary factors but we all know that any Government underestimate the cost of their policy. If £200 million is the starting figure for Assemblies in England, Scotland and Wales, it will lead to far larger sums being laid on the backs of the taxpayers.
I do not think that the people of England fully realise this. Doubts on both sides of the House tend to take the

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attitude that devolution is something for the Scottish or the Welsh, but the people of England have as much right to see the proposed form of the United Kingdom as the people of Scotland, Wales, Yorkshire, Greater London, or anywhere else.
What about the Scotsmen who live in England? Is it to be just the Scotsmen in Scotland who will be consulted? There are as many Scotsmen living in England as there are living in Scotland. What is to be done about them? I would beg hon. Members when they are considering the condition of England 01 the condition of the United Kingdom to remember that they have as much responsibility for the whole of the United Kingdom.
It is of great sadness to me to see a certain amount of irresponsibility in the way in which hon. Members have regarded the question of devolution. Hardly a Scottish Labour MP has stood out against it. We all know there is hardly a Scottish Labour MP who really wants it. They are all allowing themselves to be swept forward. The right hon. Member for Kilmarnock (Mr. Ross), the former Secretary of State, is a man for whom I have a great deal of respect and parliamentary affection. He used to be the hammer of the Nationals, but now that the Scottish Nationals have won 11 seats, even he is prepared to accept this lunatic proposal for a separate legislative Assembly in Scotland.
We all know that there are many other Labour Members representing Scottish seats who feel the same way. I hope that they will have the political courage and foresight to come forward and stand up against it. I would say to them, if they were here, that they have a great chance to make a name for themselves, because it is well known in Scotland that there is extreme restiveness not only among professional bodies such as the CBI, chambers of commerce, bankers, teachers and chartered accountants, but among the trade unions. There is a great opportunity for some Scottish Labour Member of Parliament, perhaps one who has been passed over by the new Prime Minister, to make his name in leading a popular crusade—and it really would be a popular crusade.
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I hope the new Prime Minister, above all—a man in whom we repose so many hopes, a right hon. Gentleman with an Irish name, an Englishman sitting for a Welsh constituency—will see that the condition of England cannot be divorced from the condition of Scotland, Wales, Ulster and indeed the United Kingdom as a whole.
I come from those rather general arguments down to specific arguments about the condition of England. If we are to have a separate legislative Assembly in Scotland, it follows as night follows day that we shall have to have such Assemblies in different parts of England. That has been made clear by hon. Members in all quarters of the House. I accept that. It is madness, but it is the logical end of the policies now being pursued.
If we have separate Assemblies in different parts of England, what shall we get? First, England will get even more government, when I think it is common ground among most parts of the House that what we want is not more government but less and better government. Yet we shall get more government. Assemblies in England will mean more taxation, and yet it is common ground among many parts of the House that what we want is not more but less taxation.
When I say "more taxation" it will not be a matter of a halfpenny here and a halfpenny there. As I have said, even to set up these Assemblies in England would cost about £150 million out of the taxpayers' pockets. So not only shall we have to pay to set up these Assemblies in England, but, once they have been set up, they will have the power to take even more in extra local taxation and rates out of the pockets of the people.
I point out to English Members that the White Paper on the Scottish Assembly proposes to give that Scottish Assembly powers to compel more money to be raised in rates. Therefore, first the taxpayer will have to pay millions more to set up the Assemblies and then the Assemblies, having been set up, will have the power to tax the people even more. The people of England will have the privilege of being not only the most over-governed but the most over-taxed people in the world to pay for it all.

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If we have more government, another thing follows as surely as night follows day. We shall have to have more civil servants to service the new Assemblies or Parliaments—more bureaucracy and more red tape. Again it is common ground between the Front Benches that we want less bureaucracy. We want to cut back the growth of the Civil Service. Assemblies, whether in England, Scotland or Wales, will mean more government, more tax, more public expenditure and more civil servants.
I do not think hon. Members, because they sit for English seats and are rightly concerned with the condition of England, realise what a monster has been let loose in the land by these proposals. I hope that those few Members present today, and those more Members who may read this debate in Hansard and in the Press, will realise what a monster has been let loose and will wake up to the dangers which are facing this country as a result of these devolution proposals, which are not wanted in Scotland and which result solely from the fear of the Scottish National Party and from a wish to appease that party. Surely it is folly and political cowardice of an immeasurable order to risk throwing away the history of 270 years of British achievement—an incomparable achievement—and to throw it away for what reason?—because 11 seats are won by some piffling little party trading on the protest vote.
Is this great House of Commons—the great Labour Party and the great Conservative Party—so frightened of the Scottish National Party that is is going to risk throwing away the constitutional unity of this country because at the last General Election 11 Members were returned not because the people of Scotland wanted independence, but because the people of Scotland in exactly the same measure were fed up with over-centralisation, high unemployment and high inflation under Conservative and Labour Governments? That was the stick that prompted them to vote. The carrot, of course, was North Sea oil. The result was 11 Members of the Scottish National Party.
Those Members will not be here next time. I can tell the House that in my own part of Scotland, in the North-East, they have already faded. We have had a number of by-elections. Indeed, we had one
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this week. I realise that it will not be much comfort to the Government whip, but the Conservative Party increased its share of the vote. The SNP was hammered into a meagre number of votes.
So already the SNP has faded there, and as the policies of the Chancellor of the Exchequer bring down inflation and unemployment, the SNP will fade in other parts of Scotland. Do no let this House set up these separate Assemblies simply because of fear, out of a desire to appease and to follow a political fashion. To do so would be to alter disastrously the condition of England and of the United Kingdom as a whole.
The condition of England would be disastrously affected by any devolution to Scotland. Also—and this is the most important reason that I have for opposing a separate legislative Assembly in Scotland or in Wales—it would lead, without anybody really wanting it, to the break-up of the United Kingdom, and for me that would be an incomparable and unparalleled disaster.
There are those who say that there are other countries which have very happy federal systems, such as the United States, Switzerland and West Germany. That is true. But the situation in those countries is very different. There is a federal system in the United States because when that country was being built up, the sheer size and history of it—in those days of poorer communications than now exist—made federalism inevitable. Switzerland is a federation because in the Middle Ages there were German, French and Italian-speaking sections, and federation seemed to be the only answer. In West Germany there is a federal system because the victorious Allies in 1945 did not want a strong Germany. They split Germany into half, and then they split West Germany into different bits so that there would not be a strong central Government. These reasons have no relevance to our situation in the United Kingdom.
There is a further factor in the United Kingdom. If we were now to set up a separate legislative Assembly in Scotland, this would prove an ideal platform for one party, the Scottish National Party, whose only reason for existence is to split up the United Kingdom. That party would use this platform, whatever representation the Labour Party or the

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Conservative Party got, as a platform for continual whining and complaints. Everything good that happened to Scotland, we should be told, was because we had a Scottish Assembly. Everything bad that happened to Scotland, we should be told, was because Westminster still had some power. It would inevitably lead, without any of us wanting it, to the division of Scotland from England. After what we have achieved together as a British nation in these 270 years, that would be a tragedy beyond measure. But, unless the House of Commons comes to its senses, it is a tragedy which may well come without our intending it and without our wanting it.
It is our earnest hope that this country will have some power and influence in the world—and I believe that the world needs it—but if our country is to have any power and influence, that will be achieved only by a united British nation, stronger and more prosperous, one hopes, but a united British nation within the European Community, not as some sort

Division No. 107.]

AYES

[12.33 p.m.

NIL

TELLERS FOR THE AYES:

Mr. John Stonehouse and

Mr. Peter Bottomley.

NOES

Atkinson, Norman

Fowler, Gerald (The Wrekin)

Shore, Rt Hon Peter

Barnett, Rt Hon Joel (Heywood)

Ginsburg, David

Silkin, Rt Hon John (Deptford)

Bennett, Andrew (Stockport N)

Harrison, Walter (Wakefield)

Silkin, Rt Hon S. C (Dulwich)

Bishop, E. S.

Healey, Rt Hon Denis

Smith, John (N Lanarkshire)

Brown, Robert C. (Newcastle W

Huckfield, Les

Stallard, A. W.

Cartwright, John

Hughes, Robert (Aberdeen N)

Ward, Michael

Cocks, Michael (Bristol S)

Jackson, Miss Margaret (Lincoln)

Weitzman, David

Cox, Thomas (Tooting)

Kaufman, Gerald

Willey, Rt Hon Frederick

Davidson, Arthur

Lyon, Alexander (York)

Williams, Alan Lee (Hornch'ch)

Davis, Clinton (Hackney, C)

Lyons, Edward (Bradford W)

Wrigglesworth, Ian

Dell, Rt Hon Edmund

Mackenzie, Gregor

Douglas-Mann, Bruce

Molloy, William

TELLERS FOR THE NOES:

English, Michael

O'Halloran, Michael

Mr. Peter Snape and

Faulds, Andrew

Peart, Rt Hon Fred

Mr. Alf Bates.

Foot, Rt Hon Michael

Sheldon, Robert (Ashton-u-Lyne)

Question accordingly negatived.
of piffling little collection of 1½ million Ulstermen, 3 million Welshmen, 5 million Scotsmen, and so on.
We must remain the united British nation which we have been for 270 years of great and historic achievement. I greatly hope that the House of Commons, and especially those English Members who have not taken enough part in the debate so far, will wake up to the dangers in what is now being pursued and will reject any policies likely to lead to the disintegration of the United Kingdom.
12.31 p.m.
Mr. Peter Bottomley: I congratulate my hon. Friend the member for Aberdeen, South (Mr. Sproat) on doing more to maintain the unity of the United Kingdom and to maintain the traditional courtesies of the House than the Government and their supporters feel they can do today.
Question put:—
The House divided: Ayes 0, Noes 40.

LOCAL GOVERNMENT FINANCE
12.42 p.m.
Mr. Tony Durant: I beg to move,
That this House acknowledges the growing public concern at the level of spending by local government and the simultaneous deterioration in the value for ratepayers' money; calls upon Her Majesty's Government to resist further legislation which imposes extra financial burdens on local government; and urges early implementation of cash limits and new methods of financing local government following the Layfield Committee's report.
I consider it a great honour that I have been lucky again in the Ballot for motions from the Back Benches. This is the second week that this has happened. Last week I was able to make two speeches on different subjects. This week I shall talk about local government finance. This is a vital subject. People are widely concerned about the present situation in local government. It is right that the House should discuss this matter for a while prior to the local elections that are on the horizon, because people's minds are being concentrated on the subject.
There is no doubt that the rise in rates over the last few years has caused people to look at what they are getting in return for their rates. Although this year the rate increase, in comparative terms, will not be as great as it has been in the recent past—although there are exceptions—rates have risen by nearly 100 per cent, in some parts of the country in the last three years and by more than that in some places. This is certainly a subject which causes people considerable anxiety.
Let us look at local government expenditure in terms of cash and the gross national product since the war. In 1946 local government spent £729 million. At that time that sum was only 8·4 per cent, of GNP. In 1974 the figure had risen to £13,303 million—18 per cent, of GNP. Since then it has risen further. I do not have recent expenditure figures, but I have the GNP figure and local government expenditure is about 30 per cent, of GNP. Bearing in mind the fact that the total of GNP that is spent on Government expenditure of all sorts is nearly 60 per cent., let us ask how much of this is taken up by local government spending, what proportion is local government
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income and how much comes from the Exchequer.
The present rate support grant from the central Exchequer is 65½ per cent, of local government expenditure and the rest is raised through rates—34½ per cent. The amount of money coming from the Exchequer to local government is £6,852 million. That is a fairly large sum by anyone's standards.
Let us look at staffing. That is always something that people look to immediately when considering local government expenditure. After all, local government is a highly-manned service and requires a lot of people to administer it. On 1st April 1973 the staff figure was 298,644. It rose in 1974 to 312,715. There was approximately a 4·7 per cent, increase in staffing over that period. That has caused people considerable concern.
Mr. Michael Ward: Will the hon. Gentleman make it clear to the House that he is talking about all staff, including manual and other workers, home helps, and so on, and not only about administrative staff?
Mr. Durant: I am talking about all staff. I apologise if that was not clear. I am seeking to show the growth in staff. I am not necessarily criticising it. I am merely showing the scene and the point that we have reached in this matter.
Let us consider capital debt. That is another anxiety for all local authorities. It is now £22,000 million. That debt must be serviced and repaid before any dustbin is emptied or any street light is lit.
The breakdown of some of these figures is interesting. Education takes the largest share in the rate poundage—40·46p in the pound. I do not deprecate that. I am merely showing the facts. Housing is obviously of top priority. That takes 9·2p in the pound. That is another large figure. Once again, I do not deprecate that. However, it must be paid for. Town and country planning, something that does not seem to be of great importance, takes l·49p in the pound. It is interesting to see how the money is spread around in various ways. I shall return to some of the figures later.
Spending in 1975–76 is about £15,500 million. That is 30p in every pound of public expenditure. It represents a sum of £440 spent by local government for

811
every second of every day that passes. It is a fair sum of money. It works out at roughly £300 a year on average for every man, woman and child. That is another interesting figure.
I have mentioned the vast increases in rates and the fact that this money must be found. I should now like to deal with local government reorganisation, because we are constantly told that the increased expenditure is all due to the reorganisation. I want to get something out of the system right away. There is no doubt that there was pressure to reorganise local government and that whichever party had been in power there would have been reorganisation. When I intervened in the local government debate last week, the Minister admitted that there would have been reorganisation under his party. He was arguing whether the system which had been set up was the best. However, let us accept that there would have been reorganisation in any event.
We are constantly told that it is reorganisation that is mainly responsible for the growth in expenditure. But let us look at the situation of the Greater London Council, which was reorganised not recently but somewhat earlier. The GLC's staff has increased in just the same way. Between 1973 and mid-1975 there was a net increase of 4,500. We can see, therefore, that this matter does not relate merely to reorganisation. It is a growth factor which we must take into account. We must also remember in this whole question of expenditure that other factors have entered into it. We must accept that wages have risen and that fuel costs have meant enormous debts for local government. The interest rates on borrowing are also a strain on the whole system. That is another factor. Therefore, costs would have risen whatever anyone on the Government side of the House might say. Let us face that fact squarely.
The key question that most ordinary citizens ask when involved in local government elections, or any aspect of local government, is "Are we getting value for money?". We must examine the overlapping of some of the services. In planning terms these are matters which were fudged in local government reorganisation. A clearer line should have
812
been laid down where planning begins and ends in terms of different levels of responsibility. Confusion on this score is expensive. If this is put right, I am sure that in the long run it will save money.
It is quite ridiculous that at present every local authority is allowed to operate, for example, a museum of its own. That is another anomaly we should examine. I am not, of course, against the setting up of museums, but that surely is a ridiculous piece of overlapping. Arts and crafts are an important area of activity, but again there is a great deal of overlapping. Those are simple examples, one large and one small, in which there is overlapping of services, and surely that aspect of the problem should be examined.
I must confess that I am an anti-planner. My experience of planning has never been good. I was a member of a planning committee for four years and I sometimes wonder whether some of the decisions we made were right. I look at some of the buildings for which we were responsible and ask myself whether we have in many cases created concrete jungles for people to live in. Again, we need to examine the relevance and contribution of planning in our society.
In our planning we are not sufficiently conscious of the whole environment. The tragedy is that we have set up a whole Department with enormous responsibility for the environment and yet there is far too wide a fragmentation of planning. This fragmentation covers roads, railways, houses, leisure facilities, social services, education, hospitals and many other areas of activity. There is not enough examination of these matters, and too few areas have town plans and overall schemes which the public may examine.
The subject of housing has become a political football. Everybody likes to produce nice figures of the number of houses built, and this is always done with great pride in local government. The local authority says "We have build 500 houses". But the other side says "That is not good enough. You should have built 800 houses". The number of houses is not necessarily the right answer to the problem. We need to look much more closely at improvement grants, housing action areas and housing development of that kind. People do not

813
want to live in remote council estates. I spend a good deal of my time seeing constituents in council estates. People who live in smart new council estates seem to experience far more bitterness, arguments and other problems than do the occupants of the humble two-up, two-down houses in the poorer areas. In those areas there is a community feeling and a spirit of camaraderie; people know each other and they find life worth while.
Are not planners too fond of the bulldozer? Are we not knocking down far too many buildings rather than improving existing accommodation? That is what people need. When "Coronation Street" is screened, the camera first shows a tower block and then pans down to Coronation Street. Many people prefer to live in Coronation Street than in a tower block. My experience of high-rise flats is that most people want to get out of them as fast as they can. This is a major social problem. I look forward to the day when we can start pulling some of them down. I do not think that that is the way in which people want to live.
Let us examine the situation where a council has the opportunity to build a children's playground in a certain area. Let us assume that the idea is accepted as a good one because there are no exist-the playgrounds in the area. What happens is that the playground, once built, becomes the responsibility of the leisure committee. However, such committees are not usually given very much money to operate their activities and eventually the playground becomes a sad area, full of broken swings and other badly-maintained play equipment.
I read of a recent Liverpool review which threw up the interesting fact that out of a large total budget a figure of only £7,000 was spent on playgroups, one of the most important activities in our modern society.
I should like to see much greater use of improvement grants and housing action areas. I believe that people want to remain in their communities. I have in my constituency an area where the conditions are appalling. There are boarded-up houses, incidents of vandalism, and people living in derelict houses by night and stealing out during
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the day. In the middle of that area are people who own their own homes living in an almost waste area. It is a tragedy and an aspect of planning of the kind we must examine.
Let us examine the situation in the provision of roads. We know that there must be cuts in that service, and I am not against them. I do not regard an enormous road pattern as being the answer to all our problems. I am not sure that it is a bad thing that it takes me 10 minutes longer to reach my destination. If it is a question of homes or roads, I declare myself to be in favour of homes.
We have the extraordinary situation in Reading that we have just been granted permission to build the rest of our inner distribution road. It is surely curious that, in the middle of a financial crisis, we have suddenly been given the go-ahead for a plan that will cost £15 million and will cause an enormous amount of dislocation. That decision has been arrived at for no apparent reason.
Let us turn to the subject of education. Again we must ask whether we receive value for money. Because of the anxiety by the Left to go all out for comprehensive education, we are spending money on reorganisation plans when adequate schools are already being used by pupils. However, we are told that the system must be reorganised and money is being spent in drawing up plans, in the holding of public meetings and all the rest of it. This is happening when people are content with what they already have. In my constituency 33,000 people declared themselves as being against comprehensive education. That is a fair number of people who regard the idea as a nonsense. That view was expressed not necessarily by people from the grammar schools but by people who wanted to defend their schools. I am not seeking to make a political point, but I wish to draw attention to the extravagance in money terms of this piece of educational reorganisation. It is another matter which we should examine.
Mr. Ward: The hon. Gentleman said that he was not making a political point, yet he referred to pressure from the Left for comprehensive education. Will he accept that this is something which has caused divisions even within the Conservative Party and that large numbers of

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Conservatives, including members of local education committees, endorse the comprehensive principle and gave short shrift to the hon. Member for Chelmsford (Mr. St. John-Stevas) when, a year or so ago, he tried to persuade them otherwise?
Mr. Durant: Since the hon. Gentleman makes that point I shall answer it. There has been slow progress towards comprehensive education throughout the country, but surely the compulsory element in the present legislation is unnecessary. In this debate I am talking purely and simply about money. I agree that many people are in favour of a comprehensive system, but I believe that the system was developing nicely and was being worked on by all those concerned. Now, however, the system is being brought in compulsorily. That will cost money, and that is the nub of my argument.
On the subject of the social services, I sometimes wonder whether we over-administer. That is another area that is ripe for examination. Again we must ask whether we are being given value for money. Let me quote a simple example. It relates to a sheltered housing scheme in which we have tried to secure a three-wheeler for an elderly lady. The application was agreed 18 months ago but has been lost in some official's filing basket. That kind of bad administration is costing money.
On the question of transport, we must make a careful examination of costs. I believe that we have to subsidise public transport. There is no alternative. The people who use public transport are mainly the young and the old, and they are the people who have little money to spare. That is a financial fact. I believe that there is a need to subsidise local transport, and I favour such a proposal rather than that we should encourage the building of more and more car parks costing larger amounts of taxpayers' money. I am not sure that that is the right way to tackle the matter. We should try to make people use public transport more by using financial incentives. Perhaps we should charge more for car parking.
We need to look at local government services and ask whether there is not an argument to be made for imposing higher
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charges for some of them. I have in mind refuse collection. Should everyone be able to put out as much rubbish as he likes? I know that in some places a charge is made for any rubbish beyond one sack. This is right and wise. I commend the councils who do that.
I should like us to examine town halls much more closely—not council offices, but civic buildings. Surely there are possibilities for private enterprise to run these places at a profit. When I was in local government, we found that there was a cavern beneath our brand-new swimming pool. We let it out under contract and it is operating as a discotheque. The town has made some money out of that. A greater move towards partnership is needed in leisure activities. There is partnership between private enterprise and local authorities in developing town centres. Why cannot similar partnerships operate in the leisure sector to a much greater extent?
There is the problem of extravagance in local government. I could give a simple example—the proposal of the GLC to spend £10,000 to celebrate the anniversary of the General Strike. I do not say that it is wrong for people to celebrate this if they wish to do so, but surely the money could be raised by a voluntary body without calling upon the ratepayers, many of whom do not agree with the principles behind the General Strike.
We have had many debates about direct works departments. I have never been convinced that they can work efficiently and save money. It is always difficult to be specific and to get the facts. In every housing estate that is constructed by a private building contractor there is a percentage of the wages of everyone in the company, including the chairman. I wonder whether there is a little bit of the chief executive's salary in every direct works department contract. This is where we need accurate costing. I welcome the recent guidelines that have been framed by the Government. I know that a working party is investigating this issue. This is a growth area in extravagance which worries me.
There is also waste of money on lush council offices. I have frequently raised in my constituency the question of the cost of the council offices there. I was sent a document from the Birmingham

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area dealing with my own council offices, saying what a terrible waste of money they were. It was a nice-glossy brochure giving all the details about these beautiful offices. I do not deny that they are beautiful. The council is spending £500 per person in those offices. I have been round them and they are fantastic. Is that the right way to use money at a time of stringency? Should we not manage in the best way we can, as has to be done in business or industry? The furniture which is being bought by my local authority is very good. I was purchasing furniture and I looked at this stuff. I could not afford it. But local government can.
How can we control this cash problem? The local government electorate tends to vote on the national pattern. This is a pity. There are some exceptions, when councillors win seats contrary to the national pattern because they are very good councillors. It cannot, therefore, be said that control over expenditure is a direct reflection of local elections. We must look at ways in which we can control local government expenditure. I know that the Government have made a start in their recent White Paper dealing with cash limits on public expenditure. It outlines the attempts that are being made to deal with the problem.
Should not that effort be extended in some way to the remainder of the rate demand which is beyond central Exchequer money, which the Government are trying to control through cash limits? Perhaps cash limits ought to be put upon local government. We have performance review committees. Are we in this House and councillors doing our job correctly? Our job is to check expenditure and to control the Executive. We have to ask questions. When I first went into local government, a friend and I sat through the whole of the debate on the council's budget and moved a reference back on every item. We kept the council there till about 1 o'clock in the morning. Everyone was annoyed with us, but in the following year the departments of the council had a good look at their accounts because they knew that we would do the same thing again unless there was closer scrutiny.
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I do not think that we scrutinise finance sufficiently in local government. This is the job of councillors and performance review committees as laid down in the famous Bains Report. Perhaps this House ought to have a Sub-Committee of the Expenditure Committee to which would be invited for cross-examination the chief officers of leading councils which had gone mad on expenditure. This is all part of national expenditure.
I was interested to note that the Municipal Review made a statement about this question. I shall quote from the March issue of the Municipal Review, which is not a publication which necessarily supports the Conservatives. It says:
"Improving the public expenditure survey system by involving local government at the formative stage could well bring about a better understanding of the implications of White Paper proposals and make for better and more efficient use of available resources. The planning of any service cannot be done effectively at the national level without knowledge of the effects of those decisions at the point of consumption and only local government can have such knowledge. It would be folly to continue with the present blinkered and secretive system of planning public expenditure so far as the local government element is concerned. Surely the very determined attempts now being made by local government to be involved in the formative stages of planning public expenditure will not be ignored."
In other words, we should bring local authorities in at an early stage. At least, they would have the opportunity of being able to control some of their expenditure.
Many of the problems of local government stem from this place. We pass legislation with acclamation and leave local government to pick up the bill. We are partly responsible for the extra cost in local government. The Layfield Report is about to be published. The sooner it comes out the better. Then we can discuss the future of local government finance. I made my maiden speech in this House on the subject of rates and I have been consistently interested in the subject ever since. I feel strongly about the matter. I remember suggesting in my maiden speech that we might consider running lotteries in local government. We seem to have gone some part of the way, but the Government have weakened the proposals put forward by my right hon. Friend the Member for Crosby (Mr. Page). I do not think that the prizes

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will be big enough. At least, the principle has been established.
In my maiden speech I mentioned the possibility of putting the whole of the teachers' pay bill on to the central Exchequer. The hon. Member for Peterborough (Mr. Ward) earlier raised the issue of education. If we had one system of education, it might be easier to transfer the whole of teachers' pay in that way. It would be a national education service. The teachers would not be averse to that if it gave them an opportunity to change schools and move around.
On that occasion I spoke about the reform of the rating system, and that reform is now about to come upon us. I hope that when the Layfield Committee reports the Government will not just look at the Report and say "That is it" but will have the courage to do something about it. It will take courage. Many people consider that there is no system better than the current rating system in terms of ease of collection of money and administration. There are doubts about whether any other system would work.
Mr. John Cartwright: The hon. Gentleman appears to be assuming that the Layfield Committee will produce a magic new solution to solve the long-running problem of local government finance. What will the hon. Gentleman say if the Layfield Committee reports that in its view the present rating system is the best long-term method of financing local government?
Mr. Durant: I should have to take note of it. I was keen that the Layfield Committee should be set up, so I cannot spurn its view. I should want to look closely at its arguments. The Green Paper on local government reorganisation analysed all the choices and proceeded to knock them down. I hope that the Layfield Committee will not go that far. If it does, I shall be depressed. I shall probably stop talking about the rating system and hide my head in shame. Even if the Layfield Committee reports that the present rating system is an easy way to collect money and there are administrative arguments in favour of it, we should still examine other systems and have the courage to introduce new proposals.
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I am a strong believer in the local councils of social service. Some local authorities help their council a great deal and some do not. Some do not like the so-called interference of the council in the affairs of the Department of Health and Social Security. I do not agree with that criticism. Voluntary organisations organised through the local council of social service provide valuable help. By encouraging the voluntary spirit, for which the country is renowned, we could save a great deal of money.
This afternoon I am to visit someone I discovered to be in great difficulty. People who seek assistance often go first to the social services department, but sometimes it is a question not of money but of visiting and taking an interest, and that can best be done by volunteers rather than by officials. Many old people are nervous of officials and do not like them. Often the volunteer can do the job better by finding out what is the problem, analysing it and then bringing in a local or national agency to provide the answer. There is great scope for increased voluntary effort in local government.
Local government is here, it is an essential service and I do not want to knock it. It does the best it can in face of all the burdens we impose upon it. Local government is faced with the burden of the legislation which we pass and the demands of the public, who are demanding more and more, and it has a job to draw a balance. I am a supporter of local government, and the House benefits from the experience of hon. Members who have served in local government.
It is time for a close examination to discover whether we are getting value for money and whether local government priorities are right. There are many devoted people who spend a lifetime in local government, who love the service and work hard for it. We should encourage more people to take an active interest in local government. Business also has a responsibility. More young executives should spend time in local government and bring their expertise to it.
Through no one's fault there often seem to be two social classes in local government, which is a pity, because most of the issues are non-political. My personal friend in local government was a leading Communist from a council estate

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in my district. He was first class in housing matters and knew his stuff backwards. We need experts and people who have a love for local government to work in it. We must restore the position of the councillor who will ask questions and try to get results for his community. We want value for money.
1.16 p.m.
Mr. David Weitzman: The hon. Member for Reading, North (Mr. Durant) spent a great deal of time talking about getting value for money. He quoted examples and criticised methods of planning, housing and so on. I have no doubt that there is a good deal in his criticism. Many of us could quote examples where greater value could have been obtained for money spent.
The motion refers to:
"the growing public concern at the level of spending by local government and the simultaneous deterioration in the value for ratepayers' money".
There is a great deal of truth in that, and it certainly is of paramount importance to seek new methods of financing local government.
The clear implication in the hon. Gentleman's call to resist further legislation is that we should reduce the burdens that are put upon local government and resist any further effort to assist councils by legislation. We all recognise that in stringent economic conditions it is difficult to find money to increase local government services, although the need to do so is there. Whatever criticism may be made about specific instances of getting value for money or mistakes being made in organisation, the need is there and when we can do so that need should be satisfied.
The hon. Gentleman referred to the reorganisation of local government by the Tories. I was opposed to that measure. The borough of Stoke Newington was a model borough, small and able to deal with its affairs. Upon reorganisation, that borough was allied to the bigger borough of Hackney. It was said that the citizens would be brought nearer to the town hall. Instead, large organisations have grown up which require large staffs and need to spend more money. That is my criticism of the mistake made by the Tory Government when they em-
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barked on local government reorganisation.
Mr. Durant: While I accept some of the hon. and learned Gentleman's premises on the subject of local government reorganisation, does he not agree that the Labour Party was rather keen on unitary authorities? I accept that they would have been at one level only, but they would have been big authorities.
Mr. Weitzman: Of course there was need to look into reorganisation and deal with it, but the way in which the Conservative Government dealt with it imposed tremendous burdens on the community and meant a great deal of unnecessary work and staffing. We can see the results today in the work that is done and, indeed, in some of the criticisms the hon. Gentleman himself made about planning, housing and so on.
I am always amazed by the way in which the Opposition demand that the Government should cut public expenditure without saying where it should be cut, yet when any local project is mooted—such as a new hospital or a new school, or an increase in social service provision, or a need for schemes which will increase employment—they press the Government to provide the money. If ever there was a hypocritical attitude, it is that.
I want to refer to three spheres where a local authority functions. The first is housing. In Hackney, part of which I have the honour to represent, despite the great efforts by the council, we have a waiting list of some 14,000 persons. We are not unique—most local authorities have the same problem. Housing is one of the most dreadful headaches from which we suffer. We all know heart rending cases brought to us in our surgeries—constituents living in inadequate and often dreadful conditions, on the housing list for many years, in many cases giving up in despair. Surely what is needed is the greatest effort we can make and can possibly afford to assist local authorities to deal with the housing problem. That must mean the provision of more money by the Government, through legislation and otherwise, contrary to the wording of the motion.
Secondly, I took an active interest in the Chronically Sick and Disabled Persons Act 1970, promoted by my hon. Friend the Under-Secretary of State for

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Health and Social Security who is responsible for the disabled. I have taken a keen interest in the implementation of the Act. It put a heavy madatory burden upon local authorities for the care of the disabled—ascertaining where they were, establishing a register, and catering for their needs.
A great deal has been done by local authorities but, unfortunately, not enough by a great many. Very much more remains to be done. That requires money, and there again such money can be provided only by the Government or from the rates. This may well mean legislation or other practical assistance by the Government. Yet the hon. Gentleman asks us to cut down on legislation which assists local authorities. I am sure that he would not be so unworthy as to suggest that the efforts of local authorities in the provision of help for the disabled should be curtailed.
Mr. Durant: The hon. and learned Gentleman said, first, that I had urged further expenditure. I am subject to correction, but I do not think I did. Secondly, he asked where I would cut. I mentioned as an example the road scheme costing £15 million in my district. That was a practical example. Thirdly, he said that legislation to assist the old and the disabled, for example, was already in existence. Of course some local authorities are not carrying it out, and it may be necessary to send out another circular urging them to do so. But the law is already there.
Mr. Weitzman: The law may be there but the requirements still exist and are not being fulfilled. The clear implication in the motion is the cutting down of legislation. I say that what is wanted is more assistance, not curtailment of our efforts. We all recognise that economic conditions make it very difficult, but we should press not for a diminution of effort but for such assistance to the greatest amount possible.
Indeed, our social services generally demand such assistance. They play an immense part in assisting the sick, the needy, the unemployed, the pensioners, and so on. The Government have not hesitated to recognise that fact in their measures. However, I often feel that the class most
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neglected are the mentally sick. Their need is pressing. I know that the Government appreciate the need to assist them, and I hope that they will continue to do so.
My third topic concerns the class receiving social services aided provision—day nurseries and playgroups. In Hackney we have 18,000 children under the age of five. About 1,000 of them enjoy facilities provided by the local authority. There are 18 nursery classes and one nursery school. About 800 of the children are looked after by registered daily minders. Some of these minders are aided in a small way by the social services.
About one-seventh of the total number of these children have their care and education looked after, to a greater or lesser extent, by the local authority. But what about the other six-sevenths? This means for them no provision except that provided by their homes, which is a desperate position for many mothers. Many mothers have to work at home, machining or doing other work, or they have to find a little job where the child can go with them. Usually, they have to work at the lowest rates of low rates of pay. The same problem exists in many other areas.
We need more day nurseries, places where the children can play under registered minders, places where mothers can go with their children, where there is supervision of play by the children and facilities for the mother. Our children are perhaps our most treasured asset. This problem has been neglected, and it needs to be tackled. Does the hon. Gentleman wish to curtail efforts in that direction? I am sure that he does not.
I have only touched upon some of the activities of local government. The points I have made are equally applicable to many others. The proper attitude to adopt is to say that, within our means, every effort should be made to assist local government in discharging the burden upon it. By all means let us consider new methods of financing local government so that it can carry out its work as fully as possible while meeting its obligations to all the ratepayers. I agree that we must strive to get value for money by examining the methods used and seeing where we can economise—but not by cutting down the value of the services. The motion merely serves

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the purpose of drawing attention to the need to encourage local government to make greater efforts, not to do less, in many directions.
1.30 p.m.
Mr. John Cockcroft: I should like to speak briefly and in general terms about what I take to be the spirit of the motion. I am much concerned about the proportion of the national income which is taken by government, whether it be local or central. In total it forms a frightening portion of the national income, and in that sense we are well on the way to the Orwellian situation of being pensioners of the Sate, and perhaps pensioners of local government as well.
Radical steps will have to be taken eventually, by tax incentives and other methods, to persuade people to make greater provision, in such matters as education, for their own needs. This will be good for them, good for their families, and certainly good for the taxpayer and the ratepayer.
There certainly had to be changes, of course, in local government organisation. There were far too many small units, some of which were inefficient, but I believe that the changes of 1974 were made too quickly and often with insufficient consultation.
Vast units of local government and different tiers of local government are a standing invitation to extravagance. Moreover, a great opportunity was lost, I am sure, to reform local government finance at the same time as the structure of local government. The answer is not to ask central Government to bear an even greater share of the burden of local government expenditure. That would be to encourage extravagance by local authorities. Money must be raised mainly locally if it is spent locally. The alternatives are local income tax or local sales tax.
In certain states of the United States of America there is a local income tax. Some States have a local sales tax. The analogy is not very close, because in the United States there are much larger units of government. The states are not directly analogous to our councils here. But we have that choice. Personally, I should prefer the local sales tax if it could in some way supersede or be superimposed upon the other taxes which now exist,
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because I am absolutely in favour of people paying when they spend rather than having money deducted at source.
Cash limits are obviously sensible in the country's present very serious economic situation. I have no need to remind the House of the anguish caused, even in relatively wealthy counties like Cheshire—part of which I represent—by the present cuts in local government expenditure, particularly in matters such as education, which is so essential to the future. The anguish is real and great, and to some extent it is unexpected.
We must hope that things will improve, but there will have to be drastic changes in the whole structure of financing local government if we are to get out of our present difficulties. The present situation is quite untenable.
1.33 p.m.
Mr. John Cartwright: I am glad to see a rather better representation on the Benches opposite than at this time last week when we discussed local government without a single Conservative Member present until the very last minute, when the hon. Member for Reading, North (Mr. Durant) made a somewhat breathless appearance. Perhaps that was because last week we were discussing a motion which reaffirmed the belief of the House in the importance of local government. This week we are discussing a motion which is somewhat more critical. Perhaps that explains the rather better attendance on the Benches opposite.
In moving his motion, the hon. Member for Reading, North said that he was not seeking to knock local government. He could have fooled me, because we had the usual candidates who have frequently run round this course, whipped by the hon. Gentleman opposite, when we have been debating local government.
We had the usual references to over-staffing, without any attempt to break down the staff structure or to indicate how many of these people were the awful pen-pushers who are always being criticised, and how many were the very useful people such as teachers, home helps and social workers, and others who are providing services to the public. We heard the usual references to extravagant spending, as if only local authorities ever indulged in extravagant spending.
In view of the hon. Gentleman's references to the need for an adequate

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and tight performance review of local government, I point out that my experience in the local authority which I had the honour to represent for three years was that the monitoring of spending, the comparison of output in relation to the budget and the original plan, was very much tighter than it is in this House.
We had the almost obligatory references to direct labour, as if this again were a very substantial area of waste in local government. Thinking back to the 1972 and 1973 situation, I know that many local authorities, particularly in London, would have had no housing programmes at all if they had not had direct labour departments. At that stage private builders were all very much too busily engaged in building shops and offices, luxury hotels and things of that sort, to be able to undertake housing construction for focal authorities.
The last of the obligatory references to local government came with the suggestion that all town halls are lush. I think that was the expression used. My own experience is that for every lush local council office there are at least twice as many which are very much less lavishly appointed. I know of some local authority staff who are working in the most appalling conditions. When I hear talk in this House about lush offices, I confess that the office I have now in the Norman Shaw, North building is very much more lush than anything I enjoyed when in local government.
The hon. Gentleman attempted to knock down the allegation, frequently made on this side of the House, that the reorganisation of local government has been a major factor in the rising cost of administering local government services. He quoted the Greater London Council as an example. The GLC in its present form was not necessarily a creation which many of us in London local government welcomed. It was once again a creature of a Conservative Government. It was a piece of Conservative Government reorganisation. Many of us in London object very strongly to the degree of confusion and duplication of effort and responsibilities which exists in London local government on the basis of the sort of example the hon. Gentleman was quoting.
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The GLC is a housing authority, and the boroughs are also housing authorities. The GLC and the boroughs both run parks. The GLC and the boroughs both maintain roads and highways. Both the GLC and the boroughs support the arts and recreation. There is a measure of duplication in the two-tier system which substantially adds to the cost of running it.
All I would say about the reorganisation perpetrated in the 1972 Act—I noticed that the hon. Gentleman did not exactly go overboard in defending it—is that it was not the most imaginative way of reorganising local government. As to what he alleged to be a demand for reorganisation in local government, my recollection is that it was a demand not for reorganisation but for reform. There is a measure of difference between the two.
The motion refers to a growing public concern about the level of spending by local authorities. I concede that there certainly is a growing public concern. On the other hand, my own experience leads me to believe that there is also a growing public demand for the services that local authorities provide. When I was leading a London borough I well recall having a steady stream of pressure groups knocking at my office, constantly demanding and arguing that services in particular areas ought to be improved and extended. Every pressure group—ranging from Age Concern, arguing about the needs of the elderly, to the Pre-school Playgroups Association, arguing for the needs of the very young—said that its particular service ought to have the maximum priority, whether it was housing, services for the handicapped, leisure provision, the provision of services for children or for the elderly.
One of the difficulties about local government is the setting of priorities. Clearly, not all these services can be priorities, and it is extraordinary how the people who press hardest for extensions of local council services and demand improvements in those services object very strongly at the end of the day when it means an increase in rates and to having to pay the cost of the services they have demanded.
The hon. Gentleman referred to a number of areas in local government

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where he seemed to be suggesting that we were not getting value for money. I shall not follow him through all of that, but I shall take just one or two examples. I was interested in his references to local council housing. I would have thought that was an area where, by and large, we were getting value for money. As I understand the Conservative attitude, it suggests that the average council tenant is getting too much value for money since rents are not high enough. In many areas that I know of in South London much-needed urban renewal has taken place only on the basis of local authority housing development.
I accept that perhaps we have on occasion been too keen to use the bulldozer and totally to redevelop when refurbishment and rehabilitation would have been an alternative solution. But it would still have been the local authority which undertook that refurbishment and rehabilitation. This is not an area where private enterprise capitalism has been eager to take up the burdens of urban renewal, particularly in housing.
It would be wrong to suggest that everybody who lives on a council estate is unhappy and miserable and given to tensions and all the rest. There are certainly some problem estates. My "surgery", however, leads me to believe that many of our council tenants are extremely happy with their council homes and are satisfied with the value for money they get.
Mr. Durant: I go all the way with the hon. Member's thesis that not all are unhappy on council estates. I was talking about the tower block, the concrete jungle type of estate. The individual unit estate with nice council houses is, as he says, agreeable to the tenants.
Mr. Cartwright: The attitude to high-rise flats greatly depends on the policy of the local authority. Many authorities take the view that it is wrong to put families with young children into high-rise flats. If that view can be achieved, it goes a long way towards meeting these problems. Some council tenants are very happy to live in high-rise blocks. Those whose children have left them and who have reached middle years and who want some peace and quiet are usually happy with that type of accommodation. My local authority has seven 24-storey blocks
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and it has no difficulty about letting them. There is, however, some resistance to the lower-rise four or five-storey accommodation.
The other area in which local authorities give extremely good value for money is in services for the handicapped and the disadvantaged. These services are extremely good not only for the individual recipient but for the entire community. Services such as home helps, meals-on-wheels and the local authority lunch clubs enable the elderly to live in the community in the comfort of then-own homes rather than being herded into a local authority residential home. There are also the services referred to by my hon. and learned Friend the Member for Hackney, North and Stoke Newington (Mr. Weitzman) and provided under the Chronically Sick and Disabled Persons Act. For example, there are the very costly adaptations which are undertaken by local authorities to enable the handicapped to live in their own homes or in specially converted council houses. Some of the cases with which I have been associated have involved adaptations costing thousands of pounds simply to enable these people to operate in their own homes rather than going into hospital or some special form of accommodation.
Telephones represent another area where local authorities have undertaken extensive schemes under the Act to meet needs. My authority, like many others, operates holiday hotels for the elderly and the handicapped, and the ratepayers value these services very much. It is not just that the elderly and the handicapped enjoy holidays. Much younger people welcome the fact that they are making their contribution to the local authority and that it is being used in a way which benefits people in later years, people who otherwise would never be able to enjoy a holiday in the usual way.
There is then the whole question of concessionary fares. In the Greater London area this scheme enables the elderly to travel free on London buses. It has been a tremendous advantage to them, not just helping them to travel but opening up opportunities for them. This has been a tremendous step forward for the elderly in London. Spending like this on the least advantaged in the community offers extremely good value for

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money and is accepted by the whole community.
The hon. Member for Reading, North suggested that there should be new ways of financing local government. I felt that he was echoing the views, aspirations and hopes of some people who seem to have pinned everything on Layfield producing some magic solution which will reduce the burden of rates on ordinary domestic householders while allowing local council services to expand, and enabling local government to retain its financial autonomy.
I am not sure that that sort of magic solution is available or will come from the Layfield Committee. If people want high levels of local authority service, they must be prepared to pay for it. I always put that view before the electors in any local government election that I have fought. Perhaps I may give an example of what I mean. My constituency will contain two-thirds of the new town of Thamesmead. It will lie in the London borough of Greenwich. The other third will be in the constituency of Erith and Crayford in the London borough of Bexley. Already residents on each side of the boundary are making comparisons about the level of services provided which is very much higher in Greenwich than in Bexley. Ratepayers recognise that the higher level of services must be paid for.
The last 18 months or two years have witnessed heavy criticism of local government. Local authorities are democratic institutions and they should be shot at when they make mistakes. There has, however, been an orchestrated attack upon them which is not justified by the circumstances. I want to call for a moratorium on the bashing of local councils and local councillors. We should encourage local government to get on with the job it has been elected to do.
1.48 p.m.
Mr. Keith Speed: I wish to congratulate my hon. Friend the Member for Reading, North (Mr. Durant) and all those who have taken part in this helpful debate. I agree with the hon. Member for Woolwich, East (Mr. Cartwright) that better services have to be paid for. A point to which I hope the Layfield Committee has addressed its mind, al-
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though we should not over-inflate the importance of what it may say, is that there are 16 million households and 25 million employees. The trick is to ensure that all those who are receiving services and who are in employment should pay for them in a more direct way than as householders who pay rates or as commercial ratepayers.
The debate has revolved around money and value for money. It might be helpful to give one or two examples of local authorities which have been saving money without reducing their services or introducing enormous redundancy programmes, and working with the full cooperation of the trade unions. One such example is Leeds City Council. When my party became the largest party on the council last May, although it did not have overall control, it started a cost reduction programme. The leader of the council, an old friend of mine, is Mr. Irwin Bellow, who, with the chief executive, sits once a week to approve or defer personally every application for a job, no matter how junior. The result has been a net reduction of 750 staff employed without any question of sacking people and with the full co-operation of the unions.
Leeds believed that it needed to take a long, cool look at its overtime bill, which was running at £2½ million a year. That is a great deal of money. As a result of that long, cool look, it has already saved over £1 million on overtime. It has removed over 100 telephone extensions, which is a considerable saving, cut its massive fuel bill and made significant savings on transport and postage. That is the kind of good housekeeping which any housewife has to do, particularly now when costs are rising and incomes are limited. Leeds has been a very good example of what can be done. The result was a reduction of 6·3 per cent, in its direct rate, and it is going on, because this is an ongoing process.
The Leader of the Council, Councillor Bellow, in his budget speech, given to the Leeds City Council a few days ago, said:
"the reality is that overmanning, especially in large organisations and in the public sector, has now become a national sickness. I do not by any means think that we have reached the end of the road in careful management of our staff resources, overheads, and so on. There is still much more which can be achieved"

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Councillor Bellow is entitled to say that, because he and the Leeds councillors and, indeed, the staff have done something about it.
I turn now, in a different area, to another Conservative-controlled council—the Metropolitan District of Sefton on Merseyside. Just before Christmas, I had the great privilege of opening the door of a new council housing estate which is being built there—the Marsh-side estate. Sefton has adopted a different procedure, and I should like to quote from the chairman of the housing committee, because I am trying to give practical examples, not generalities. Councillor Watson said that the scheme would
"provide basic houses in half the usual time, cut the capital cost by up to 20 per cent., make yardstick problems seem like a thing of the past and correct the social injustices of higher subsidised standards in the public sector than in the private."
The Department of the Environment estimated that the cost of the Marshside housing scheme would be about £2,300,000. Sefton is doing it for about £1,700,000—a saving of about £500,000 or over 20 per cent. It is also saving between nine and 12 months in construction time on the scheme.
I have seen the houses and spoken to some of the first tenants. The estate comprises detached, semi-detached, terraced houses and old people's bungalows. They are of a more attractive design than I have seen in almost any other local authority, and the tenants are delighted with them.
That is a practical example of saving over 20 per cent, on cost, speedier construction, and design which is pleasing and attractive to the tenants. The scheme, which was carried out with the cooperation of the Department's regional office in the North-West, involved reductions in the Parker Morris standards in certain ways, because the houses were designed by a private builder. However, they are designs of some quality. I hope that the Minister will endorse his regional office's approval of that scheme. This could be one way of saving a great deal of money in the construction of council houses, which at present runs into hundreds of millions of pounds a year.
I turn now to a much smaller, but important, authority in the North-West—Stockport. That authority has embarked on a staff and cost reduction programme
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with the full co-operation of the unions. My latest information is that it has reduced staff by nearly 300 without basically affecting services in any way That, again, is good housekeeping.
I come now to my own area—Kent. The Minister, like myself, is a Kent ratepayer. Indeed, I passed his house this morning on my way to the station, and it was in good order.
Kent has carried out a number of imaginative experiments in social services. I do not know whether these experiments will be the final answer. Indeed, Kent is honest enough to say that it does not know. Last night I was speaking to the leader of the Kent County Council. He is convinced that, from the financial and social services point of view—social services are about compassion and looking after people—what Kent is doing is worthy of examination.
For a start, the usual procedure with children who have been difficult to look after—they may be disturbed or they may have come from upset families—is to put them in local authority children's homes. That is extremely expensive. No matter how loving the care they may get from the dedicated staff, those children are in institutions.
Therefore, Kent, on an experimental basis, has been paying foster parents considerable sums of money—over £40 a week—because there is a special problem with certain children. Previously it had been almost impossible to place these children in the care of foster parents. However, the council is now finding that not only are these children having expert attention and loving care in ordinary homes, but it is at the same time making a saving of about £1,000 a year on each child so placed.
If it were just a question of finance, I should not endorse that scheme for a moment. Nor, I believe, would Kent. But, because these children can get individual care in private homes, which is desperately important, and because there is the added bonus of saving £1,000 a year on each child, I believe that the scheme is worth looking at and pursuing further.
On an experimental basis, Kent is also bringing in a community care project. That involves paying substantial sums to people to look after their aged parents

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in their own homes. I say "substantial sums" because I am talking about £30 a week. This scheme enables aged persons to remain in their own homes with their families. The saving is again about £1,000 per year per person.
I am not suggesting that this is the solution to the problem throughout the country. There are many difficulties. Indeed, this scheme is still in the early experimental stages. However, I suggest that these are two practical examples of what can be done by forward-looking local authorities not only to save money, but to get a better solution to the problems facing them. I hope that many other local authorities—we know how hard pressed social services departments are—will look at these experiments.
My hon. Friend the Member for Reading, North dealt at some length with what I should describe as the reorganisation myth. Indeed, another hon. Member referred to the same theme. I should like to get one or two points clear. I have noticed already that in the election literature being put out by the Labour Party for the district elections on 6th May local government reorganisation features large in the apologia for what is going on under this Government.
I presume that we can take it that, whatever had happened in the 1970 Election—whether the Labour Party or, as happened, the Conservative Party, was returned—there would have been some form of reorganisation of local government. I understand that the Labour Party, as well as the Conservative Party, was committed to reorganisation. I understand that the Labour Party would have favoured the larger unitary authority solution, for which there is no evidence that it would have been any more efficient. Indeed, there is a great deal of evidence that it might have been less democratic in rural areas where councillors would have had to cover large numbers of villages, unless we were to finish up with councils of 200 to 300 members. But there is no difference between the parties that there had to be some change. It had been talked about and Royal Commissions had been set up and had reported. Therefore, local government could not have gone on as it was with this sword of Damocles hanging over it.
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My hon. Friend the Member for Reading, North fairly pointed out that London reorganisation took place 13 years ago. If, as the Labour Party argues and as has been argued today, the 1972 reorganisation is responsible for all the problems of local government, the increase in staff and expenditure, it is presumably fair to say that London should be immune from these symptoms, since not only did its reorganisation take place a long time ago, but, for eight of the last 13 years since it took place the Labour Party has been in Government. Therefore, if the Labour Government thought that we had the system wrong in the 1963 reorganisation of London government, they could have done something about it between either 1964 and 1970 or February 1974 and now. However, they have chosen not to interfere with London government in that way.
The House knows that London boroughs and the Greater London Council have seen their rates and costs go up at much the same rate as in every other local authority. Indeed, over the past couple of years, the rates in one or two London boroughs have gone up by more than they have in most local authorities. May we please, therefore, get that out of the way?
One thing that I am prepared to concede to the right hon. Gentleman—and this was mentioned by my hon. Friend and by the hon. Member for Woolwich, East—is that there is a duplication of functions and services, particularly in planning and consumer protection. The right hon. Gentleman and I served on the Standing Committee at the time and he will recall the difficulty facing not only the Government but the Opposition because there were different lobbies cutting across party strands at that time. There was the county borough lobby, the district council lobby, and the strong county council lobby. They all had views about where the planning functions and development control should go. I was the Whip on that Committee, and I had the job, as Whips do, of delivering the business at the end of the day, and I freely admit that the final solution on that Bill was not perfect.
We have to look back to four years ago. We did not then have the rate of inflation that we have enjoyed—if that is the right term—during the past two or

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three years. Deeply felt views on the duplication of functions and other aspects of that Bill were cutting across party strands. The result was that the edges were blurred and there was an element of duplication which in an ideal world I should not like, which my right hon. Friends the Members for Worcester (Mr. Walker) and Crosby (Mr. Page) would not like, and which I know the right hon. Gentleman would not like, but we had to arrive at a solution, and it was a compromise.
It is now two years since the implementation of that measure, and more than two years since it was passed into law. It is time to look again at the duplication of services, not least because we are now in a much more inflationary situation and facing greater economic difficulties than we were facing then. It is clear that unnecessary duplication in local government services is a luxury which local government, central Government and the economy cannot afford.
This is something at which we should take a long hard look to see whether we can get it right. If we could cut out the duplication, there would be substantial savings not only in terms of money, amounting to millions of pounds, but in terms of staff time in both central and local government. There would also be more time for the clients, the people who make the application and have to wait while they are shuffled backwards and forwards between the various agencies of local authorities and the Government.
My hon. Friend said something about cash limits, and one or two other hon. Members came in on this. Does the right hon. Gentleman, with his great knowledge, and as a member of the Cabinet, think that he, the Chancellor of the Exchequer, or the Government can go on for ever with no cash limit on public sector housing? The other day at Question Time the Minister for Housing and Construction had an exchange with my hon. Friend the Member for Aylesbury (Mr. Raison) about this. Although almost every other sector of Government expenditure has a cash limit, there is apparently no limit on this one.
The White Paper on Cash Limits on Public Expenditure, Cmnd. 6440, which has just been issued, contains an interesting statement in paragraph 11. It says:
"Under the present statutory arrangements, local authority current expenditure cannot be
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directly controlled by central Government. Cash limits are however being placed on the amount of financial assistance provided to local authorities by the central Government through the rate support grant and supplementary grants."
We debated this on the rate support grant orders earlier this year. I like the phrase "Under the present statutory arrangements".
It is the view of my hon. Friend the Member for Reading, North that we have reached the stage at which there should be the power to impose cash limits on overall local government expenditure. Whether one exercises that power at any given time may be a matter for debate, but within that much tighter overall control there should be greater freedom for local authorities to determine their own priorities. In view of that wording, which I find interesting, it would be helpful if the right hon. Gentleman would give us a better idea of his thinking and that of the Treasury because, as I am sure he will agree, this is an important question.
Having referred to the Treasury, I should like to put another question to the right hon. Gentleman and if he is not able to give an answer today, I shall understand. It would be interesting to know how many chief officers or senior executives in local government have the right, subject to the view of their local authority, to borrow money at low rates of interest—or at a lower rate than the commercial one—to buy a motor car because they need a car for the job. Do I take it that these low interest loans will be subject to the new and increased tax arrangements announced by the Chancellor of the Exchequer? These could fall within the business perk situation to which the Chancellor referred.
The use of direct labour was mentioned by my hon. Friend and by others. It is no good the hon. Member for Woolwich, East saying that we go through ritual incantations about this. We shall keep on with this subject until we get the Government to be more forthing. One can quote the examples of Newcastle and Southwark, where considerable sums of money have not been managed as well as they might have been and the ratepayers have had to pick up the tab. We are talking about value for money. The Secretary of State has set up a committee to examine this problem.

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It is likely to sit for a long time. I know that it has nobody on it from outside industry, but every time we ask the Government to accept the recommendations of the Chartered Institute of Public Finance and Accountancy, the reply is that they have set up a departmental committee and it would be wrong to do anything in advance of that committee's report being received. That would be fine if the Minister for Housing and Construction were not roaring round the country making speeches about the extension of direct labour in advance of the findings of the committee.
We are not against direct labour, provided it is needed for the authority, it is efficient, works on a properly accountable basis and complies with the various recommendations that that CIPFA has put forward, but we have the greatest reservations because many local authorities, unfortunately, do not take the same view as CIPFA does about competition, proper accountancy or comparing like with like. I am engaged in correspondence with the Minister about a council in Manchester that wishes to award a contract for council housing to the direct works department although its quotation is £40,000 more than that of an outside contractor and the time that it will take to build the houses will be considerably more.
That sort of thing is wrong at any time. At a time of financial stringency it is certainly not the way to do things, and we shall continue to press this matter unless, even today, the right hon. Gentleman says that not only does he accept but will recommend the acceptance by local authorities of CIPFA's recommendations at least on an interim basis until his committee reports. If he were to do that there would be a common approach on this problem, and that would be a good thing.
In his closing remarks the hon. Member for Woolwich, East hit the nail on the head to an extent when he said that the public have a duty to do what they can to help bring about economies in local government. I am sure that every hon. Member has received letters complaining about the level of rates and taxes, and found in the same letter demands for even better schools, the replacement of out-of-date old people's homes, the building of new roads, and so on.
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The simple message that has to go out from this debate, if from nowhere else, is, first, that there are not likely to be any major increases in service standards over the next few years because the country cannot afford it, and, secondly, that it is possible to make considerable savings by adopting some of the procedures that I have outlined today. Some Conservative local authorities are making savings without necessarily affecting standards. They are making savings in both money and staffs.
Much innovation is going on in local government. The more hon. Members understand local government and get close to it, the more they realise that this House itself is one of the major factors which can put back local government by giving it more burdens than it can carry.
The Chronically Sick and Disabled Persons Act was a wonderful Act, but it gave local government a virtually open-ended commitment, and then we start complaining because its staff increase and its costs go up. We must think, before we pass that kind of legislation, what the burden will be, otherwise we shall only delude ourselves and our electors, and we shall deny the resources to central or local government to meet those aspirations.
Next month there will be district council elections throughout the country. The citizens will be looking at the record of local authorities to see how they are discharging their obligations and trying to make economies. I hope that two things will happen. First, that there will be a higher turn-out at the district elections than we have had in the past. No one can be satisfied with a turn-out of 25 per cent, or 30 per cent. Such a situation is wrong and I hope that it will improve.
Secondly—here I echo the remarks made by my hon. Friends—I hope that industry and commerce will release more people to stand as candidates for local authorities. I do not care whether they stand as Conservative, Liberal, Labour, Communist or whatever. We want greater expertise. We want people who have made their mark in industry, whether on the shop floor or in management. It is no good industry or commerce complaining about local government and the way it is run and at the

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same time denying to many of their brighter young men and women the chance to do public service in local government and perhaps improve the efficiency of the work.
I congratulate my hon. Friend on what has been a helpful debate. I have tried to be constructive and not too political in my remarks. I shall await with interest the Minister's reply.
2.13 p.m
The Minister for Planning and Local Government (Mr. John Silkin): I welcome the fact that the hon. Member for Reading, North (Mr. Durant) has raised this important subject today. A pattern in my life seems to be emerging over 13 years in the House. Suddenly, round about April, one begins to get a Private Member's motion on local government. I am sure there must be some connection which I have missed. However, it has been a very useful debate and one which was extremely interesting. The hon. Member will not expect me to agree with every single suggestion he made, particularly not in April, but nevertheless he gave us a stimulating speech and we are all grateful to him.
Whether one likes it or not, local government today is facing a more searching examination than at any time in its history. It has had to face a barrage of hostile comments, most of them unfounded. I know that my hon. Friend the Under-Secretary referred to this in the debate which took place last week. Today, however, we are looking particularly at local government finance, an area in which criticism is more passionate than it is elsewhere.
Let me begin, as I must in such matters, by producing some figures. It is true that local authority expenditure on goods and services, including staff, has taken an increasing share of the gross domestic product over the last 25 years, rising from about 8½ per cent, of the total in 1949 to about 9½ per cent, in 1964 and over 12 per cent, in 1974. Provisional estimates for 1975 indicate a further growth to about 13 per cent.
There has been a particular rapid growth in overall current expenditure in recent years. In the decade to 1963 the average annual growth rate in volume
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terms was just under 5 per cent. However, in the two years 1973–74 and 1974–75 the rate of growth was 9 per cent, and 10 per cent, respectively. In 1975–76 the rate of growth has moderated to about 5 per cent, and a complete standstill has had to be sought for 1976–77.
But figures on their own mean nothing: the important thing is to remember what the money is spent on and why the amount is rising. If I have to go over some of the same ground that my hon. Friend went over last week, I make no apologies. The facts of the matter deserve the widest possible audience. Local authorities today provide an enormously wide range of services to meet the needs of the community. Some services which used to be provided by local authorities have been transferred to other national agencies, but the range and quantity of local authority work has nevertheless continued to expand. This is obvious when we consider, for example, the enormous expansion, since the Second World War, of education, the social services and housing—to mention but three, as my hon. Friend the Member for Woolwich, East (Mr. Cartwright) dramatically pointed out when he dealt in his interesting speech with the cost of services in his own borough.
These services have expanded because the public have demanded wider services and better services. Local authorities have responded to these pressures which have been exercised on them not only by their own electors but by successive Governments of both persuasions. I have already said that I do not apologise for hammering home these facts. I shall continue to do so.
Neither am I sorry that the school leaving age has been raised and that educational standards are better. Are we sorry that we have aimed for better welfare services, more roads and more houses? These are all aspects of higher living standards and, provided we can afford them, they are proper and desirable aims.
Where has the pressure for all these improvements come from? In part, it has come from this House. Parliament over the years has added immensely in all these areas to the duties and responsibilities of local authorities. Local authorities themselves have taken initiatives, too, in transport, in housing and in social services. All this costs money.

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Are we to believe this has happened in a vacuum? Central Government and the local authorities have only been reacting to massive and continuous public demand for more and better services—but not always more, in the sense of something new. Spending has also been increased by individuals taking up, perhaps for the first time, their proper entitlement to services provided by the local authority. We have heard very recently what the hon. Member for Ash-ford (Mr. Speed) called the myth of the increased expenditure caused by the reorganisation of local government. I do not want to enter into a long argument with him about this.
Mr. Speed: I certainly would not claim that there was no increased expenditure as a result of local government reorganisation, but all the problems which local government is at present lacing and the massive problems it is facing as a result of inflation are being laid at the door of local government reorganisation.
Mr. Silkin: I agree with the hon. Gentleman that not everything bad which has happened is due to local government reorganisation. I have great respect, admiration and affection for the hon. Gentleman, and I think it only right that he should be allowed now to have a say on local government reorganisation, because during those weary days and months in Committee on local government reorganisation I watched him silent like a peak on Darien.
Does the hon. Gentleman remember the most humorous aspect which I remember about that long series of episodes? I wonder whether he remembers the Financial and Explanatory Memorandum of the 1972 Bill which stated with a categoric imperative that the great benefit that reorganisation would give us was that there would be a reduction in staff in local government throughout the country and a great saving in money. I have it written on my wall at home, and I intend to be guided in a somewhat opposite direction so far as that is concerned. Of course local government reorganisation, as the hon. Member for Nantwich (Mr. Cockcroft) said, has been responsible for a considerable increase in expenditure, although I agree with him that it has not gone all the way.
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While I am about it, Mr. Speaker, I cannot help commenting, as I see you in the Chair, that in the long days and nights of that Committee stage I thought that any of us who survived to the end must go to heaven. I find instead that we are either in the Chair or on our respective Front Benches again.
Mr. Speaker: Order. May I say that any reference to my parliamentary past is between the Almighty and myself and is not a matter for the House?
Mr. Silkin: Possibly that goes beyond the sphere of local government, Mr. Speaker.
This growth in local authority services, which is what I was talking about before I was slightly deflected, could not continue for ever. The growth in spending far outstripped our wealth as a nation and was increasing. There is no alternative now but a period of retrenchment and consolidation. I take no pride in this.
We would all prefer to see further improvement to the services which local authorities provide. But at least, as my right hon. Friend the former Secretary of State for the Environment said, a period of standstill gives local authorities the opportunity to look at their priorities. The hon. Member for Ashford gave various instances of where they might make economies. I do not want to go into them individually. He is at liberty to make what points he wants.
I agree with the hon. Member in his general principle, however, that what we must see now is that local authorities, looking at their priorities, are able to improve the value for money received by those who pay for the services. I do not think there is any dispute between us there. Of course, we all pay for local authority services. The rate support grant, after all, is funded from national taxation. That is what I see as a very important part of value for money, getting a clear idea of what the priorities are and seeing that the money goes to them.
What of the future? Local authorities next year are faced with a strong challenge. The rate support grant settlement approved by this House provided for a standstill in current expenditure, and, as my right hon. Friend said

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on 15th December, we had hoped that there would be room for some growth in local authority current spending next year.
In his Budget Statement last year the Chancellor of the Exchequer provided for an increase in 1976–77 of about 1½ per cent. But later information has shown that local authorities are spending somewhat more this year than was allowed for in last autumn's rate support grant settlement. Spending last year is likely to reach the level which we had planned for this year. We cannot hope, therefore, in present circumstances to find additional money for local government this year. That is why we had to call for a standstill this year in local government spending.
To achieve a standstill, local authorities will have to take a long, hard look at all their present priorities. They will have to define their priorities rigorously and ensure that every penny is spent to the best effect. Even given the maximum attention to priorities and efficiency, a standstill will still have some unpalatable implications for services. The Government have given every help and guidance they can. They have given guidance in a circular on the rate support grant settlement. In the last resort, however, the decisions are and must be for the local authorities themselves. They, and not the Government, best know their own local circumstances, and they, and not the Government, must take the final decisions on priorities in the light of those circumstances.
Since the rate support grant settlement was made for 1976–77 we have, of course, had the White Paper on Public Expenditure, and it was very natural that this should have been referred to during the debate today. It sets out the Government's proposals for public expenditure for five years ahead. In broad terms, the outlook for 1977–78 and beyond is for a very small reduction in current expenditure for two years with some movement in 1979–80 back to the level of expenditure planned for 1976–77. There will need to be a continuation of the sort of constraints associated with the standstill in current expenditure already announced for 1976–77. The trend in capital expenditure follows that already established for 1975–76 and 1976–77 with some
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easing of the pace of reduction at the end of the period covered by the White Paper.
For the years 1977–78 onwards, the figures are a firm expression of the Government's intentions about the total amount which should be spent on local authority services out of the approved totals of public expenditure for those years. I would emphasise—it has been emphasised before—that within that overall constraint there is increasing flexibility in the plans towards the end of the period. The Government recognise the extent to which local authorities are co-operating in limiting the growth of their expenditure and achieving a very modest rise in rates this year. For our part, we have assured local authorities that we shall not add to their burdens and that we shall do our utmost to avoid doing anything which might require them to spend more money, unless we can show how that money could be found without raising net expenditure.
I assure the House that before the introduction of a Bill my right hon. Friends and I have submitted it to close scrutiny to ensure that it will be acceptable to local authorities, I believe on a consultation basis never seen before in the history of this country. Often the local authority associations are consulted during the preparation of legislation so that we can be sure that their members will be able to implement it within the financial guidelines to which they have agreed during the rate support grant negotiations.
I have already referred to the work that local authorities will be doing to review priorities. They are also continually reviewing the way in which they run their affairs. Greater efforts are being put into co-ordinating purchasing policy and management efficiency. The Government are also working with a number of local authority agencies to see what further improvements can be made.
The hon. Members for Reading, North and for Ashford referred to cash limits. The hon. Member for Ashford raised the specific question of cash limits on housing. I can only say about housing that, as he knows, the housing finance review is with us and will be with us for a little while, but when it is finally completed we shall all have a chance to study it.

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In general terms, a cash limit on rate support grant was announced by my right hon. Friend as early as 21st November last year. We must now wait and see what is spent in 1976–77. The House may be assured, however, that the Government meant what they said when they set the cash limit on grants. But I rather gather that the hon. Member for Reading, North, who at the moment is not in his place, wished to see a cash limit on expenditure and not on grant. As has been said many times, under the present constitutional arrangements this is not possible. The existing relationship between central and local government is a partnership. It is a matter of a very delicate balance. The Government have set out clearly what they are asking local authorities to do in the coming years. It is for individual authorities to use their own expert knowledge in meeting those requirements.
Mr. Speed: Perhaps I read the White Paper wrongly, but since it underlines what the right hon. Gentleman has said—that it is not possible under the present arrangements—I assume that it does not preclude changing those arrangements in the future. I wondered whether that might be in the Government's mind, in view of the tenor of the White Paper.
Mr. Silkin: Perhaps I may deal with that point by implication as I go along. I shall be turning to something which perhaps subsumes that point. Perhaps the hon. Gentleman can guess what I mean. If my right hon. Friend took powers to control either the level of expenditure or local authorities' rate levels, this would radically alter the basis of the present partnership between central and local government. In my view and in the Government's view, it would be quite wrong to contemplate a step of that kind, and certainly not while the Layfield Committee was still studying local government finance.
The hon. Member for Reading, North calls for
"early implementation of … new methods of financing local government following the Layfield Committee's report."
I find it somewhat odd that the hon. Gentleman does not ask that these methods should be fair, that they should be efficient, that they should foster local democracy or that they should promote
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local accountability. All he asks in his motion is that they should be new.
This quest for novelty is not, if I may say so, something which one generally associates with Conservatives, and one is forced to the conclusion that there must be some very special reason for them to be departing from their past practice of burying their heads in the sand and hoping that the problems of local government finance will go away.
In his speech—admittedly, a rather different part of it—the hon. Gentleman deplored wholesale demolition. It was only in 1971 that the Conservative Government brought out a Green Paper on local government finance which was itself a fairly expert demolition job—a demolition job on almost every new idea which had been advanced on the subject during the past century. However, to make assurance doubly sure, they came back in 1973 with a consultative document which administered the finishing touches to the few fragments of original thinking which had somehow survived their intellectual bulldozers. Having, as it were, levelled the whole site to the ground, they then told us that the rating system—this was said by the right hon. and learned Member for Hexham (Mr. Rippon) himself—was the most perfect imaginable source of local revenue in the best of all possible worlds.
It is not for me to say whether that conclusion was right or wrong. We have just received a weighty—weighty in both senses of the word—independent report on the whole subject, and, of course, it would be quite wrong for me to deliver any sort of instant verdict. My purpose is rather to remind the House of the remarkable effect which its two defeats in 1974 exercised upon the Conservative Party's powers of thought. As soon as the responsibility of actually having to do anything was lifted from its shoulders, we witnessed the most astounding transformation. I remember my right hon. and learned Friend the Secretary of State for Wales describing it, in appropriately colourful, if somewhat mixed, metaphor, as "a deathbed conversion on the road to Damascus".
Suddenly the right hon. Lady the Member for Finchley (Mrs. Thatcher), the Leader of the Opposition, announced that her party would abolish the domestic rate—that very same rate which had been

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so highly praised by her right hon. and learned Friend the Member for Hexham. We all waited with bated breath for the right hon. Lady to tell us where the £1,500 million which this modest proposal would cost was to come from, and the silence was broken only by the sound of the right hon. Member for Crosby (Mr. Page) tearing up all the speeches he had made as Minister and converting them into lottery slips.
It is difficult to resist the conclusion that the Opposition pledged themselves to abolish the domestic rate simply because rates had gone up and had consequently become unpopular. The same would have been true of any other tax, national or local, which could have been used to finance local government expenditure during the crisis of 1974–75 which followed in the train of the disastrous economic policies of the Conservative Administration. I am sure that the Conservative Party would have told us to abolish local income tax or sales tax and replace them with rates if income tax or sales tax had been the source of local revenue during the period.
What made the pledge to abolish the domestic rate all the more extraordinary was that we had already set up the Lay-field Committee, its terms of reference being
"to review the whole system of local government finance in England and Wales, and to make recommendations."
Mr. Durant: Will not the right hon. Gentleman accept that during that period, before the Layfield Committee was set up, there was tremendous pressure on both sides of the House to deal with the rating situation because of the sudden upsurge in rates? Therefore, it is somewhat misleading to say that things were all right because the Layfield Committee was there. It came about as a result of pressure from both sides.
Mr. Silkin: I think that the hon. Gentleman has not quite got my point. Of course that was so, and the Layfield Committee was set up in response to pressure from everyone asking "What is all this about?" My point was that the right hon. Lady's promise to abolish the domestic rate at the cost of a mere £1,500 million was given in full knowledge that the Layfield Committee had been set up. After all, the Committee
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was established in the summer of 1974 and my right hon. Friend had announced its initial membership as early as 30th July. Nine days later the Committee held its first meeting, and in less than 20 months it had completed its Report.
During that period, there were some who seemed intent upon harrying the Layfield Committee with constant complaints about the time it was taking. It was seriously suggested by some that the Committee ought to get the job over and done with in six months—in six months, when the Committee was asked to undertake the first comprehensive review of local government finance for over half a century. Of course, I felt that that criticism was totally unfair.
My right hon. Friends had gone to a great deal of trouble to find men and women of the standing and experience appropriate to this task. We found some magnificent examples, including my hon. Friend the Member for Woolwich, East, at the start. I pay a tribute to all those who served on the Committee, and above all I pay tribute to Frank Layfield himself. The House knows of the outstanding work which he did as chairman of the greater London development plan inquiry, and, once again, he has made an immense contribution to the work of this Committee.
As I said earlier, the hon. Member for Reading, North wants early implementation of the Report. I know that he will not expect me to make any promises before the report is published and we have had time for full public debate. But I assure him that we shall welcome the comments of all interested bodies and individuals, especially, if I may say so, from the hon. Gentleman himself. As I have said, I do not agree with a great deal of what he said, but he has wide experience of local government and his approach to it is thoughtful and constructive.
If I have had occasion during the past few minutes slightly to pull the hon. Gentleman's leg, and to pull his party's leg somewhat harder, this, if I may say so, is because both legs deserved to be pulled somewhat. However, that does not mean that we do not all have a constructive rôle to play when the report is published and we come to consider it in the House. After all, we have to decide which parts

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of the present system, if any, ought to be done away with, how we shall replace them and by what means. I hope that the report, when it comes out, will be of great assistance to us in what will be an important task.
2.38 p.m.
Sir George Young: I regard myself as fortunate in having an opportunity to take part in this important debate initiated by my hon. Friend the Member for Reading, North (Mr. Durant). I am reminded of the story of the ratepayer who, at about this time on a Friday afternoon, went into his local town hall and found the place deserted, apart from a lady who was cleaning the town hall steps. "Good Heavens", he said, "Do they not work in the afternoon?", to which she replied "No, the mornings is when they do not work, and in the afternoons they do not come in". Those of us who have served on local authorities know that that impression, which, alas, too many people have, is simply not true, and as Members of Parliament we have a lot to do to remedy the bad image which local authorities have some how acquired.
My constituents do not, unfortunately, have an opportunity this year to vote in municipal elections. However, we had a municipal by-election in Ealing last night in a ward held by the Labour Party. I am sure that hon. Members on the Government side will be interested to know that there was a swing of over 8 per cent, to the Conservative Party, and we won a ward which we had not held since 1968. Any illusions which hon. Members may still cherish that their new Prime Minister or, by some chance, the Budget will improve their electoral fortunes have been dashed by that splendid victory which my friends achieved yesterday.
However, turning to the debate, I want to touch on a number of subjects which affect my constituency and which relate to value for money in local government. The first is the issue of planning blight. In my constituency we have two town centres, Ealing and Acton, both of which have been historically prosperous trading areas, well supported by the local community. However, in the last 10 to 15 years a cloud has overshadowed both of them, created entirely by the local
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authority, under the control of both major political parties. As a result of this planning blight, there has been a tremendous loss of rateable value and misuse of the housing stock, and the local authority has acquired land with loans on which it has to pay interest but for which it has no current use.
The most serious problem in my constituency is one that could be most easily avoided if only we could speed up the planning process. What has gone wrong in this particular instance is that the local authority, the Greater London Council and the Department of the Environment all have slightly different policies. The Department of the Environment has made it absolutely clear that it is not in favour of schemes which involve wholesale demolition of property which could have been usefully rehabilitated. It made that clear in a document last year.
The GLC has made it clear that it does not have the resources to invest in major roads in London. Yet the local authority is proceeding with a scheme which is wholly dependent on the GLC providing a new spine road through Ealing, which the GLC has made clear it cannot afford. The local authority is proceeding with the demolition of two or three residential roads the houses in which could be perfectly well rehabilitated. It is set on this course although it is absolutely clear that it will not get the consent of the Minister or the money from the GLC.
It fills one with a sense of despair that there is nothing that one can do to lift the planning blight whch is gradually killing the two town centres in my constituency. This is a self-inflicted planning blight and it is reducing the resources of the local authority and increasing its expenditure, on interest because of land which it has acquired.
The most basic problem that comes through to a Member of Parliament is the gap between the rising cost of the services provided by local authorities and the falling quality of service. Many in my constituency would be happy to dip into their pockets to pay more to the local authority if they were convinced that they would get better quality of service, but at present they are having to pay more for less. The number of broken paving stones in my constituency

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would keep the Parliamentary Liberal Party busy writing letters for well over a year.
The Layfield Committee is considering fairer methods of raising money, but we would be misleading ourselves if we thought that Layfield would tackle the underlying problem of the growth of local authority expenditure. We must warn those who are calling for other methods of financing local government that those who are protesting loudest under the present system are likely to be those who would have to pay more under a new system. We must ask ourselves why the cost has risen so much. I have put that question to the person who has the privilege of representing me on my local authority—who happens to be my wife.
There are four basic reasons for the financial crisis in local government. The first relates to financial discipline. The chairman of the finance committee in local government is a substantial figure. His authority over his colleagues in no way resembles the authority of the Chancellor of the Exchequer over his spending colleagues in the Cabinet As a result, there is not the same financial discipline in local government as one has in central Government.
Secondly, there is the problem of reorganisation. If one rereads the Redcliffe-Maud Report, one sees that it is absolutely clear that the economies that it so confidently predicted simply have not been achieved. The reorganisation of local government was greatly to the financial advantage of local authority employees and greatly to the disadvantage of ratepayers. In my view, inadequate forethought and attention were paid to the new structures of local government, and opportunities to rationalise, streamline and achieve economies were abandoned in favour of softer and rather expensive options.
Thirdly, while local government was reorganised, local councillors were not. The new authorities require skills and disciplines which were not required in the old and smaller authorities and which have not yet been acquired by individuals. The skills to control the large corporate bodies that now run local government are difficult to acquire. Local councillors who are struggling to earn a living during the day simply do not
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have the time or often the energy to acquire the skills and disciplines needed to keep this very large and uncontrollable beast in order.
The last reason that I should like to mention is that referred to earlier in the debate: that local authorities have had to implement labour-intensive legislation passed by the House. That is mentioned in my hon. Friend's motion. There is a measure of truth in this, but it would be quite wrong to think that local authorities had this legislation wished on them against their wishes. In many cases they themselves were calling for this legislation and the House responded by giving them powers.
However, turning to the positive side, how can we try to reduce the cost of running local authorities and get value for money? Local authorities could discharge their responsibilities to ratepayers with a significant reduction in staff if they made economies in three particular fields—housing, planning and social services.
On housing, the Minister must forgive me if I tread on politically sensitive ground in what has otherwise been a fairly neutral speech. However, while I accept the need for local authorities to build new accommodation to solve the tremendous housing problem, I do not accept that they should hang on to that accommodation once it has been built. There is a whole bureaucracy in local government which is now needed to run local authority housing but which could be got rid of if only that property could be transposed to owner-occupation.
When one considers the number of people involved in collecting rents for local authorities, the army of valuers, the procedure for appeals on rent, the machinery for revising rents at yearly or even twice-yearly intervals and the army of manual workers who have to repair local authority dwellings—repairs which in many cases would be done very willingly by any self-respecting owner-occupier—one can see that a whole bureaucracy has been built up which is totally irrelevant to the basic task of providing new accommodation. There are substantial economies to be made in that field.
Secondly, on planning departments, I personally regret that some of the recommendations of the Dobry Report were not implemented. There were suggestions

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there that would reduce delays in planning departments and reduce the number of staff required. We have lost an opportunity there in not implementing some of those recommendations.
The third area in which we could get better value for money is in the social services. The social services departments of local authorities are trying to do, at enormous public expense, much of the work that can best be done effectively by families. The best probation officer, social worker, education and welfare officer and career officer is a parent who will do the job free. We have encouraged the belief that the responsibilities of parents can be discharged by other people, and in so doing we have weakened the family as an effective social unit. It is absolutely clear that we cannot solve this country's social problems by simply recruiting more and more social workers. Economically we cannot afford it, and morally I do not think we can afford it. Therefore, there are those areas for economy in local government.
Perhaps I may refer to one other matter which may not be quite so serious. Yesterday I had the privilege of launch-
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ing a campaign for Cyclists—"Fair Deal for the Cyclist". Here is an opportunity for local authorities to save money on transport. If only they could make proper provision for cyclists and tempt some motorists out of their cars, perhaps there would not be so much need for new roads in our cities, and the money saved could be spent on cycle routes and paths for those who like to travel around London on two wheels.
My hon. Friend is to be congratulated on initiating the debate. I hope that local authority employees, who I am sure will study our proceedings with interest, will go through the Report to achieve the economies that I am confident can be achieved.
Question put and agreed to.
Resolved,
That this House acknowledges the growing public concern at the level of spending by local government and the simultaneous deterioration in the value for ratepayers' money; calls upon Her Majesty's Government to resist further legislation which imposes extra financial burdens on local government; and urges early implementation of cash limits and new methods of financing local government following the Layfield Committee's report.

GREENWELL DRYDOCKS, SUNDERLAND
2.50 p.m.
Mr. Frederick Willey: I beg to move,
That this House, while appreciating the commissioning of the Report on Greenwell Drydocks and acknowledging the findings of that Report, regrets the action of the Secretary of State for Industry in endorsing the decision of the management of North-East Coast Ship-repairers Limited to close the Greenwell Yard and put out of work about 400 employees, thereby confirming the statement which the Minister of State made as early as 12th January that it was for the North-East Coast Shiprepairers management to exercise its commercial judgment and that ' the Department of Industry had made it clear that, if North-East Coast Shiprepairers management have decided on a policy of retrenchment, it may appear sensible to them to close Greenwells because the Greenwell Yard is divorced from the North-East Coast Shiprepairers Tyne Yards and because it so happens that the closing of Greenwells involves North-East Coast Shiprepairers in no capital loss (as the capital assets were never transferred to that company), further regrets that, in closing a nationalised yard, the Secretary of State should act upon the commercial judgment of the North-East Coast Shiprepairers management and not give due consideration to the following factors, namely: (1) while Greenwells remained a separate company it carried on its ship-repairing business successfully and profitably, (2) the yard has been adversely affected by merger, (3) notwithstanding the need for public accountability in nationalised industry, there has been no adequate explanation, in terms of managerial responsibility, of the exceptional losses in 1974–75, following upon the successful results in the previous year, and, in particular, of the major loss on the Single Buoy Mooring contract, (4) in spite of becoming a nationalised yard, there has been little evidence of any effective industrial democracy and there was no consultation with the employees prior to North-East Coast Shiprepairers hanagement's decision to close the yard and no effort to discuss flexible working and other arrangements to improve the profitability of the yard, (5) the North-East Coast Shiprepairers management denied the trade unions the benefits of the Employment Protection Act and, whereas good employers acted within the provisions of the Act in anticipation of its coming into force, North-East Coast Shiprepairers management acted in flagrant evasion and avoidance of the Act, (6) the payment of about £400,000 in compensation by way of redundancy pay and ex gratia payments in lieu of notice was wasteful public expenditure which would have been better spent on providing the capital investment which the North-East Coast Shiprepairers management had failed to provide and would have afforded the opportunity to take advantage of the valuable concessions offered by the labour force and recorded in the Report, (7) in addition to the loss of £400,000 paid in
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compensation which in itself exceeds the total trading loss incurred by Greenwells in the last 10 years, the closure of the yard will result in substantial recurrent losses to the borough of Sunderland, which is the port authority, and to Sunderland Shipbuilders and Austin and Pickersgill, (8) the borough of Sunderland, apart from contingent problems referred to in the Report, will suffer an annual loss of £81,000, (9) the assets of Greenwells are owned by the nationalised Sunderland Shipbuilders, who will suffer an annual loss of over £100,000, (10) Austin and Pickersgill will be obliged to dry dock on the Tyne and estimate that this will involve them in an additional annual cost of £60,000 rising to £85,000, (11) although the North-East Coast Shiprepairers management claim that the costs of the closure borne by that company should be substantially offset by the additional work for the Tyne Yards which would otherwise have been offered to Greenwells, this only refers to the compensation costs and this not only disregards Greenwell Drydocks but also takes no account of the recurrent annual loss to the borough of Sunderland and to the Wear shipbuilders amounting to about £250,000 a year and further takes no account of the consequential loss to Sunderland port-users and sub-contractors, (12) no account has been taken of the social and other costs caused by making unemployed 400 employees in a town which has one of the highest unemployment rates in the country and (13) the Aircraft and Shipbuilding Industries Bill now provides that, in giving directions to British shipbuilders, the Secretary of State shall have full regard, inter alia, to the need to take account of considerations relating to regional areas and in particular employment considerations within those areas; and, noting that the borough of Sunderland has expressed its willingness to become involved in any commercially viable rescue operation, that the trade unions have declared their willingness to make working concessions, and that a company has expressed an interest in purchasing or renting the Greenwell Yard, calls upon the Secretary of State to take immediate and effective action to pursue such a rescue operation.
Perhaps by way of preface, I may express one or two words of appreciation. This is a constituency matter and, as the constituency Member concerned, I have every reason to express appreciation for what my right hon. Friend the Secretary of State for Industry said yesterday on the extension of the cost escalation insurance scheme to British ship owners. I have been urging this proposal upon my right hon. Friend for a considerable time, and I appreciate all the difficulties involved. For that reason I am especially appreciative of the steps taken by the Government.
Furthermore, I appreciate my right hon. Friend's statement about British shipbuilders honouring present contracts. I am realistic enough to realise that that is

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an indication of the serious position of some of the shipyards. I noted with a little trepidation the remarks of my right hon. Friend about the OECD. It is rumoured that serious thought is being given to a rationalisation of the industry.
I also noted my right hon. Friend's remarks about the Govan yards. This is the crux of my complaints. We in Sunderland complain not only about unfair foreign competition, but about unfair domestic competition. We in the North-East, and particularly in Sunderland, feel that different consideration is being accorded to us compared with other shipbuilding districts. Although the Government make an ongoing response to the requirements of the Govan yards and to their difficulties, we meet a negative response. The Department makes clear from the outset that it will not intervene. Such an attitude ignores the development area aspect of shipbuilding and more especially the difficulties of the North-East coast.
This was very different from the reaction of the chairman designate of British Shipbuilders when he visited Sunderland in January and heard of the position at Greenwells. He at once responded by saying that he hoped to make a return visit in order to meet my constituents. He has not done so. I have no complaint on that score, because I regard the proper responsibility at the present time, until we nationalise the yards, as resting with the Department. But we complain that the reaction of the chairman designate is very different from that of the Department.
This is the kernel of our complaint against my hon. Friend the Minister of State, Department of Industry. I made clear throughout our discussions on the closure of Greenwells that if NECS decided on a policy of retrenchment and of rationalisation, the closure of Green-well Drydocks might make sense to NECS. It so happens that it is particularly attractive to the NECS because it will suffer no capital loss from a closure. The capital losses will be borne by Sunderland Shipbuilders, but my hon. Friends must recognise that that equally that is a nationalised concern.
Let us contrast the position in a nationalised industry with that in a private industry. When Court Ship-
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builders came to Sunderland it was intent on converting Greenwell yard into a shipbuilding yard on the Appledore model, but that was a very different situation from that which obtains today. The attraction of that proposition was that it would provide more work for skilled workers in Sunderland.
However, in due course Court Shipbuilders changed its mind. It decided to concentrate on developing a covered yard on the Pallion site. It then undertook that work, but it had put in issue the whole situation of ship repairing on the Wear. It had originally taken the view that it would expand the capacity on the Wear to build ships. When it changed its plans and decided to develop up river, it continued to consider the question of rationalisation and of providing ship repairing facilities only on the Tyne but it still hoped to expand the shipbuilding employment on the Wear.
The difference in attitude between Court Shipbuilders before and after nationalisation is striking. Court Shipbuilders virtually postponed any decision. It felt that, as a major employer, it should not put people out of work. The view was that it should not consider such a proposition until it was satisfied that the yards could absorb men displaced from the Greenwell yard if repair work was transferred to the Tyne. That is a different attitude from that taken by the present nationalised management.
There is not the slightest doubt that Greenwell has been very much prejudiced by the merger. There is perhaps some question whether the NECS management has prejudiced the yard. The evidence is capable of conflicting interpretations. What is clear—and this matter is often overlooked—is that the volume of work in Greenwells increased dramatically in 1974–75 over previous years.
A question mark arises over the nature of that work. That question is not dealt with satisfactorily in the Touche Ross report. In this context the major factor is the loss of the single-buoy mooring contract. The losses have been quoted as between £170,000 and £210,000. I notice in the report that the figure is given as £190,000. That was the major factor. This matter should be pursued because it is relevant to the question of public accountability of a nationalised

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industry. A thorough inquiry should be undertaken into that loss, if this firm had remained in private industry, under Court Shipbuilders, I have no doubt that it would have insisted on a rigorous inquiry into this loss and the circumstances for it. Because an industry is nationalised does not mean that the management should escape any such responsibility.
I come back to the issue of Greenwells. My hon. Friend the Minister of State needed little, if any, persuasion to accept a new principle in the case of nationalisation of shipbuilding, namely that it should be decentralised. There is not the slightest doubt that Greenwells was prejudiced by the merger. Greenwells is one of the most famous ship repair yards in the country. The former head of the company, Colonel Greenwell, was a distinguished Member of this House. He was a foremost authority in the Conservative Party on shipbuilding and ship repairing. He was succeeded by his son, Mr. Tony Greenwell, who was equally distinguished and who held high office in the National Association.
There is no issue about the fact that Greenwells, when it was separate and independent, was profitable. It was a successful yard run by ship repairers. This is a factor my hon. Friend should bear in mind. If we are looking at organisation and structure, we could probably learn from the past. What might make sense to North East-Coast Ship-repairers does not necessarily make sense to the industry in general terms of ship repairing.
My hon. Friend the Minister of State has a very good record on industrial democracy. As he responded to my plea for decentralisation so he responded to the case for industrial democracy. He has made this a major objective in the present legislation passing through the House and is seeking to ensure that it provides an effective means of achieving industrial democracy. But there could not be a worse illustration of the lack of industrial democracy than the closure of Greenwells.
This is the case, not only in the context of the steps leading up to the closure—the disregard of the unions and the workpeople in the yard—but in the context, about which my hon. Friend
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knows I feel strongly, of the Employment Protection Act. It is disgraceful that nationalised industry should not set a good example and precedent. It is disturbing that this closure should have been aggravated by such circumstances. There was no open consultation or discussion with the work force. Every step was taken to conceal the intentions of the management until firm and definite decisions had been taken.
The position, and this is the case upon which my hon. Friend relies, is that NECS can close the yard at a minimal cost to it of £300,000, or an overall cost of £400,000 if we take the £100,000 coming out of central funds for redundancy pay. If the Government pay that compensation and concentrate the work on the Tyne, they feel that they will be able to get the money back and that that will make sense to NECS. As I have pointed out, this does not make sense either to Sunderland or the industry as a whole. This is a compensation payment compensating men for being put out of work when they want to stay in work. It is paying money in compensation which would more than meet the capital requirements of the yard.
As it is conceded that Greenwell has been adversely affected by the merger, it is equally conceded that it has not had the capital investment it might have had. It is difficult to quantify the immediate or short-term need. What was put to me was that £250,000 would be adequate. The Touche Ross report puts the figure at £750,000, over a period. It is clear that if the money used for compensation had been put into the yard we could have held the jobs and there would have been no need to provide redundancy pay or payments in lieu of notice.
That is unacceptable in the sense that we shall not establish a competitive position in British industry if we think that the easiest line is to rationalise and compensate. Apart from that, my concern is not with the losses of NECS but with the losses imposed upon Sunderland and shipbuilding.
The Touche Ross Report confirms the figures I gave to the Secretary of State when we met him. The borough of Sunderland, as the port authority will lose each year over £80,000. Sunderland Shipbuilders will have to face a recurrent loss each year of over £100,000.

863
Austin and Pickersgill will be rewarded for its enterprise by having a loss imposed upon it of between £60,000 and £85,000 a year.
In other words, in spite of all our difficulties, a loss of £250,000 a year is to be imposed upon Sunderland and Sunderland shipbuilding. That does not make sense, particularly when we remember that Sunderland Shipbuilders is nationalised as well as NECS.
That is why we cannot, as my hon. Friend suggests, accept only the commercial judgment of NECS. I am obliged, as the constituency Member, to consider the effect this will have upon Sunderland and Sunderland shipbuilding. It is not enough to say that NECS does not believe that there is an acceptable commercial return on Greenwells. Any return that would keep that yard going at no loss is an acceptable return.
I come to the main issue. Greenwells is situated in a town which has had the highest incidence of unemployment of any town in Britain for the past seven or eight years. We did not get the response that Govan, Harland and Wolff and Cammell Laird had. We are told that this must be regarded in the light of the commercial return within the confines of this Tyneside company.
Incidentally, I plead for a Minister for the North. As we said when we successfully argued for a Minister for the North, it makes a difference in ministerial decisions when there are Secretaries of State to represent the interests of Scotland, Wales and Northern Ireland. My hon. Friend needs the reinforcement of a ministerial voice to speak for the North-East.
The position is starkly simple. Ship repairing is a capital-intensive and labour-intensive industry. This decision sterilises expensive capital investment and puts out of work several hundred people, many of whom are skilled, in a town which already has exceptionally high unemployment. Now that the yard has been closed, I appeal to the Minister of State to concentrate on the last plea I make to him in my motion. The borough of Sunderland is prepared to exercise its powers under Section 137 of the Local Government Act, and is prepared to back any viable proposition to rescue the yard.
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The trade unions have given the same undertaking—this is a point emphasised in the Touche Ross report—that they are prepared to do everything required to re-open and reactivate the yard. Incidentally, a company has expressed a direct interest in renting or buying the yard. In the circumstances, I appeal to the Secretary of State to take the initiative to see what can be done to save the yard.
Most people are satisfied that, with aggressive marketing, adequate aggressive management, and a policy of going out for the right market for the yard, its future can be re-established. I appeal to my hon. Friend the Minister of State to recognise the difficulties we face on Wearside and the North-East Coast, and to realise that any effort he makes will have this guaranteed response from those affected. There will be determination by everyone concerned—the local authority, the port authority, the shipbuilders and the shipyard workers—to make a success of the enterprise. I hope that my hon. Friend can give an adequate assurance that this is a matter on which we can make immediate representations to him.
Mr. Deputy Speaker (Sir Myer Galpern): The right hon. Member for Sunderland, North (Mr. Willey) was good enough to refer to the length of the motion. I shall not, therefore, follow my usual practice in proposing the Question on a Private Member's motion. To read out the motion on this occasion would leave no time for further debate.
3.12 p.m.
The Minister of State, Department of Industry (Mr. Gerald Kaufman): It is an agreeable parliamentary routine to congratulate a Member who has the good fortune of being successful in the Ballot. My tribute to my right hon. Friend the Member for Sunderland, North (Mr. Willey) is far from being routine. Ever since the latest trouble at Greenwells manifested itself, from that very morning when he telephoned the Department of Industry and spoke to me, he has been unceasing, unrelenting, undeviating and untiring in his efforts to help Greenwells, to try to save it, to try to save jobs, to work for his constituents. The tribute I pay to him is wholehearted. No Member of Parliament could have done more

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in such a situation than he has done, and I cannot imagine many Members who would have done as much.
My right hon. Friend has used every avenue, every channel, in which to raise this matter and, whenever it has been in order, he has raised the subject in addition to the other methods he has adopted in Standing Committee D, where we are discussing the Aircraft and Shipbuilding Industries Bill. I think it is only right, in paying tribute to my right hon. Friend, to draw attention to the contrast between his unrelenting and untiring efforts and the attempts at political capital which have been made by other members of that Standing Committee who have raised the subject in Standing Committee in order to try to embarrass the Government, or even to embarrass my right hon. Friend. But when this week they were invited to be here on the Floor of the House this afternoon to join him in raising this subject—there is plenty of time—they have not bothered to do so; they have not turned up; they have not been here.
I very much hope, therefore, that we shall be spared any comments on Green-wells from now on in Standing Committee D by hon. Members who have not troubled to turn up this afternoon to debate it with my right hon. Friend. I thank my right hon. Friend for his acknowledgment of the announcement made by my right hon. Friend the Secretary of State for Industry in the Budget debate yesterday. They are, of course, very welcome announcements for British shipbuilding.
My right hon. Friend the Member for Sunderland, North, in moving his motion this afternoon, drew attention to exchanges which took place in this House yesterday afternoon on the subject of Govan Shipbuilders, and contrasted those with what he feared was relative neglect of the North-East compared with Clyde-side. I assure my right hon. Friend that we do not distinguish between the needs of shipbuilding in assisted areas, whether they are on Clydeside, Merseyside, or Tyneside.
I have visited Cammell Laird and Western Shiprepairers—to whom I shall allude presently—and, as my right hon. Friend knows, I have not only visited
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Swan Hunter at Hebburn and Wallsend but have also visited Sunderland at his personal invitation. I visited the shipyards of both Sunderland Shipbuilders and Austin and Pickersgill, and have discussed with the local Sunderland representatives of the CSEU the question of Greenwells, which has been a source of very great anxiety in Sunderland for a considerable time. We have done our best to provide work, inasmuch as it is possible for the Government to do so, for North-East shipyards. Swan Hunter now has a Type 42 destroyer and the prospects of a through-deck cruiser, which will help very much with the employment situation in that area.
As my right hon. Friend knows, only this week there has been an event, both symbolic and material, of the greatest importance to the future of shipbuilding in his area, namely, the opening of the Pall ion yard. It was only the fact that I had to be in Standing Committee D from 10.30 a.m. to 7 p.m. that prevented my having the privilege of performing the ceremonial opening of that yard. But at any rate I had the opportunity of visiting it when I was in Sunderland only a very short time ago, and I was enormously impressed with it. It is a trail-blazer, and a very great symbol of this country's and this Government's dedication to the future of shipbuilding on the Wear.
My right, hon. Friend has been good enough to mention my own involvement in the Greenwell project, and he knows my very great concern about this problem from the moment it was drawn to my attention. I have been, naturally, aware of the extremly severe employment problems in Sunderland, and it was a source of great concern to me that jobs and job opportunities should be lost in this part of the country.
I get these pressures from the most unexpected directions. Round the corner from where I live in London there is a newsagent's shop which has just been taken over by some people from the North-East. When I went in there the other day I found that a brother of the proprietor was losing his job at Green-wells. Greenwells has followed me wherever I have gone, and therefore I can assure my right hon. Friend that I have been enormously concerned about that problem.

867
I very much accept what my right hon. Friend says about the rôle of decentralisation in this situation. I have accepted a view which he put forward very strongly at the first sitting of Standing Committee D some four months ago, and has put forward by implication ever since—that decentralisation does not mean necessarily decentralisation in order to consult and consider the interests of North-East Coast Shiprepairers. Decentralisation must pay regard to the constituent parts in relation to their rôle in British ship-repairing as a whole. That is why I very much hope that when the board of British Shipbuilders comes into being later this year, it will not necessarily look at units it takes over on the basis of agglomerations as they existed on vesting day, but will look at them individually within a generally decentralised policy.
My right hon. Friend mentioned my concern with industrial democracy in terms of the public ownership of this industry. I have been deeply concerned to make sure that industrial democracy goes well beyond simple consultation. When the question of Greenwells was brought to my attention some months ago, the first thing I did was to ask what kind of consultations were taking place. The next was to insist that genuine consultations were to take place. With all his criticisms, which my right hon. Friend has been rightly ready to voice, he will nevertheless accept that consultations, however inadequate he may regard them, did take place as a result of my intervention.
I do not respond in any way to my right hon. Friend's speech or his motion as an apologist for the actions of NECS. I have always tried to make it clear within the Department of Industry that when I try to deal with an industrial subject, whether relating to privately-owned or publicly-owned industry, whether nationalised by statute or brought into public ownership, I am not in ministerial office to act as an apologist, let alone a rubber stamp, for bodies which get into trouble and have difficulties.
Therefore in responding factually in so far as I am able to a number of my right hon. Friend's points I am not saying that they are necessarily reasons which are fully acceptable to the Government. That is not my rôle this afternoon. But
868
it would be useful to him and to those in Sunderland who will follow this debate with so much concern if I respond to one or two of the points in the motion in order to try to clarify the situation which arises after the inquiries have taken place.
In his motion my right hon. Friend talks about confirmation of the Department's decision not to intervene. My right hon. Friend will know that we did something which was unprecedented in a situation like this, namely to set up the Touche Ross inquiry. We did that in direct response to him and others in the North-East who were seen at my request by the Secretary of State. The report gave the Department no grounds whatever for reversing the decision not to intervene in the decision of the NECS. On the contrary, the report said that Greenwells had not made an acceptable return on net assets employed in any one of the last 10 years, and, given the case of the NECS for retrenchment, which the report, to use its own words, said was "compelling", Greenwells was the obvious yard to close, and this was admitted even by the Greenwell management.
The motion states that while Greenwells remained a separate company it carried on its ship repairing business successfully and profitably. The problem here, as my right hon. Friend with 31 years' experience as Member for his constituency will know, is that one has to go back into the past to examine that situation. Greenwells has not been a separate company for 10 years. It was part of Doxford and Sunderland—later Sunderland Shipbuilders—between 1966 and 1972, and since then of NECS. The report stated:
"We see no reason why Greenwells, which has operated most unsatisfactorily both as part of Sunderland Shipbuilders and within NECS, should become viable as an independent operation."
My right hon. Friend has taken the view, and puts it in his motion, that
"the yard has been adversely affected by merger".
The report certainly acknowledges that ownership changes must have adversely affected the yard's trading, but it concludes:
"At worst, Greenwells has benefited rather than suffered from being a part of NECS."

869
A matter which has understandably exercised my right hon. Friend and those for whom he speaks has been the statement to which he refers in line 17 of his motion—that there has been no adequate explanation of the losses on the single-point mooring buoys. The report points out:
"Although the job had been accepted to utilise surplus capacity, additional men were hired to work specifically on the buoys. Costs on the contract were adversely affected by Greenwell's inexperience in such work, by wage rate escalation between the tender date and the period of work and by an exceptionally high standard of finish required by the ultimate customer."
My right hon. Friend referred to the Employment Protection Act. This is an extremely vexed subject. I should point out that whenever the Department of Employment, under my right hon. Friend the newly appointed Secretary of State, has a matter like this, it always emphasises the need to observe the Employment Protection Act in the spirit where it cannot be observed in the letter.
The problem as it has been put to me—I am not giving this as my own view—is that the Act did not come into force until 8th March, that notice had to be given to most of the employees before that time because they were entitled to several weeks' notice before the closure date, and that the feeling was that it was unreasonable to suggest that closure should have been postponed with consequent further losses to the group. My right hon. Friend said most tellingly when discussing compensation matters in Standing Committee D—discussing them a good deal more relevantly than others—that the compensation of £400,000 could have been better spent. The problem is that the commitment of the money to capital investment would have done nothing to solve the basic problem at Green-wells, which was a shortage of work. The report acknowledges the labour force's offer of concessions on work practices, but did not modify the conclusion that the yard could not be viable.
There can be many ways of computing the losses at Greenwells and one way is no doubt as good as another. The report puts the losses at £796,000 over 10 years. This figure can only be reduced below £400,000 by ignoring the write-
870
down of the £425,000 expenditure on the North Quay.
It is a sad fact that, despite the losses to which my right hon. Friend has referred which will be incurred by the borough of Sunderland, by Sunderland Shipbuilders and Austin and Pickersgill, neither Austin and Pickersgill nor Sunderland Shipbuilders was willing to take over Greenwells—both were asked whether they were interested—and the exra costs they incur are not significant on their scale of operations when, for example, an SDH costs about £4½ million and the burden of the loss caused by the closure of Greenwells to Austin and Pickersgill is £5,000 per ship per launch. The turn over of Sunderland Shipbuilders is about £40 million. I am sure that my right hon. Friend will not argue that one Government company should continue to incur losses to subsidise another or, indeed, a port authority.
There are different ways of computing the cost of closing Greenwells. NECS claims that it will be able to make up the cost, but that matter would be less interesting for Sunderland than for the main base of NECS's operations.
My right hon. Friend referred to an offer which has been made and to the future of Greenwells. The Department is aware that there has been talk of another company being interested in Greenwells. I have heard rumours that are unfounded—and I take this opportunity of denying them categorically—that an approach has been made to my Department asking for assurances and that either that approach has been ignored or has been rejected. No approach of any kind whatever has been made to my Department, and no request has been made to my Department for any assurance.
I have had this matter specifically considered within my Department, and on my instructions a letter has been sent from my Department to those who are said to have expressed an interest, making it clear to them that the rôle of my Department would come into activation only should an offer be made, should that ever seriously be discussed and pursued, and should the necessity for the involvement of my Department at that stage be made known. That matter, my right hon. Friend will, I am sure, be interested to know, is now on the record,

871
and is on the record on my personal instructions. I hope that no mischief will be made because this is a matter of jobs and the future of a town, and not a subject for gimmickry of any kind, as I know my right hon. Friend would confirm.
I have answered my right hon. Friend's speech seriatim rather than dealing with it on the basis of some brief, because I wanted to deal with the points in the order that he raised them. I should, however, like to say three things in conclusion.
First, as my right hon. Friend knows, although Greenwells has closed and its labour force has been dispersed, its assets will be maintained on a care and maintenance basis by Sunderland Shipbuilders. The assets will not be dissipated, but will be handed over to British Shipbuilders when it comes into existence later this year, and it would be open to British Shipbuilders, if it thought it appropriate and sensible, to reopen the yard in the future.
Secondly, in the light of that, I say to my right hon. Friend, who asked for a positive response from the Government, that, if at any time from now onwards he feels that it would be useful, on the basis of the situation that will apply when Greenwells becomes part of British Shipbuilders, to discuss with the Organising Committee for British Shipbuilders a rôle for Greenwells as he might see it, or a rôle for Greenwells as he might ask
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the committee to see it, I should be glad—without commitment as I know he will accept—to arrange for talks between him and the Organising Committee.
I say that, first, because my right hon. Friend has never at any time relaxed in his efforts to try to achieve a satisfactory solution and, secondly, because nobody who has had any connection with an industrial Department could fail to be aware of the long-standing social and economic problems caused by the severe unemployment in Sunderland. Regardless of the future of Greenwells, one way or the other—and my right hon. Friend knows my views about that—I should like my right hon. Friend to be able to tell his constituents in Sunderland that my Department will do all it can to try to help the employment situation in the Sunderland area and that representations from my right hon. Friend and my hon. Friend the Member for Sunderland, South (Mr. Bagier) will always be given priority in this connection. Having said that, I thank my right hon. Friend for moving his motion and the way in which he did so.
Mr. Willey: I appreciate not only the attendance of the Minister of State to reply to the debate, but very much of what he said. In the light of his assurance and his acknowledging that he is as much concerned as I am to reduce unemployment, I beg to ask leave to withdraw the motion.
Motion, by leave, withdrawn.

GREENWELL DRYDOCKS, SUNDERLAND
  ADJOURNMENT
  Motion made, and Question proposed, That this House do now adjourn.—[Mr. Thomas Cox.]

EX-OFFENDERS (EMPLOYMENT)
3.35 p.m.
Mr. Arnold Shaw: For a long time the problem of rehabilitation of offenders and the difficulties they experience in finding employment has taxed the minds of such bodies as Justice, the Howard League for Penal Reform, the National Association for the Care and Resettlement of Offenders and the National Association of Probation Officers. The Rehabilitation of Offenders Act 1974 has done something to meet the situation, but it falls short in that an ex-offender who has served a sentence of more than 30 months is excluded and his record lives with him for all time. Nor does the Act do anything for those who need a job on release from prison.
The latter point is basic to the whole situation, for without useful employment there is almost the certainty of a return to crime. Most employers are unwilling to engage an ex-offender. Researches by the Apex Trust, which aims to secure work for such people, have found that only 10 per cent, of all employers are willing to take them on, although a high percentage of the adult population have been charged with some kind of crime during their lifetime.
The result is that, faced with the position that he will not get a job if he discloses his past, the ex-offender will conceal his convictions and in so doing secures employment but lives in fear that he might be discovered. The National Association of Probation Officers has for some time been particularly concerned about the difficulties facing ex-offenders in finding employment in the public services. Quite a number of cases have been forthcoming, and are on the Association's files.
I was particularly interested in two cases about which I was informed this morning. The Association told me.
"1. A man who had worked for the British Steel Corporation with a good record was sent to prison. On release he applied to be taken
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on again but was told that his record disqualified him. The local manager made it clear to the probation officer that he had no intention of employing men with criminal records.
2. A man who had worked for London Transport was off work for some time with an injury and then committed offences of theft. When he re-applied he was turned down on the basis that ' bad reports had been received about him ' "
The Association has not usually encountered blank refusal by such bodies to employ people with convictions. The normal position is similar to that taken by the Post Office. In a letter to NAPO dated 5th April 1975 it said:
"A conviction does not necessarily debar an applicant from employment in the Post Office, although as a service to which the public entrusts its private communications and frequently money, we must of course employ people of honesty and integrity in positions of trust or financial responsibility. Each ex-offender who applies to work for us is therefore treated on his merits, bearing in mind the nature of his offence, his age at the time and the period that has elapsed since its occurrence in relation to the particular job applied for."
In practice, the experience of probation officers is that many public authorities, including British Rail and the Post Office, provide very little leeway indeed. This brings me to the case of my constituent, Mr. Geoffrey Torr, of Wellesley Road, Ilford.
In March 1974 Mr. Torr completed an application form for British Rail as a guard, through the good offices of the local employment exchange. In spile of the fact that he had served prison sentences, one of three years, his answer to the question whether he had any convictions was in the negative. Subsequently, Mr. Torr started work as a guard, and, according to all the evidence, there were no complaints during the whole time he served the undertaking. Indeed, he made himself much better at his job so that the situation might never arise whereby his past would be probed.
After serving 14 months he was challenged by the British Transport Police concerning a false return in his application form. He had no choice but to admit his faults. When asked to resign on the undertaking that no further action would be taken against him, Mr. Torr refused. He returned to work for a further 10 weeks. On 10th July 1975 he was arrested by British Transport Police and charged, following which he was suspended.

875
On 6th August 1975 my constituent appeared before the Stratford Magistrates' Court charged with an offence arising from the concealment of a criminal record. The specific charge was obtaining a pecuniary advantage by deception through making a false statement to the effect that he had no criminal record on a job application form for British Rail. The pecuniary advantage, I might say, was that which he obtained as his wages, which seems a little odd on all counts.
At the trial the evidence to which I have referred showed that during his employment Mr. Torr had charge of valuable goods and mail The depot manager at Ilford said that Mr. Torr was an exemplary employee with all the virtues attached to that title—honesty, loyalty and hard work. At no time was there any suggestion that he had used his position in a dishonest way even though he had charge of valuable goods and mail as a guard.
Another witness at the hearing was Mr. Graham Melville, Chairman of Recidivists Anonymous, an organisation which receives a Home Office grant and which exists to help ex-prisoners to go straight. Mr. Torr was a founder member of Recidivists Anonymous and he had known him for some 16 years. Never had Mr. Melville known a man who showed such effort to rehabilitate himself and play a full part in society.
From all the evidence there seems to be little doubt that my constituent was one who had jettisoned a criminal past and was clearly one who could be admitted to society with all its commitments and rewards, the right to work not being the least. This was the impression that I formed when he came to see me a short time after the trial to seek my help.
It is interesting to note that while the magistrate agreed that the case was properly brought, the sentence given was of one year's conditional discharge, about the lowest possible. Another interesting point was that the magistrate paid regard to the Rehabilitation of Offenders Act which had been in force for just over a month. When the British Transport Police offered to read out the list of Mr. Torr's convictions, the magistrate said
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that it was near enough to the borderline of the Act and he did not require the list to be read out.
Following my first meeting with Mr. Torr, I wrote to the Chairman of British Rail asking that, in view of the circumstances, a review of the case might be made and a conclusion reached which would be of mutual benefit to my constituent and to British Rail. About a month later I had a reply from Mr. Bosworth on behalf of the Chairman, stating that the appeal for reinstatement would be dealt with in accordance with the procedure agreed with the trade unions.
In the event his claim, backed by his trade union, was dismissed, but Mr. Torr was told that he could re-apply if he submitted the application form complete with a list of convictions. This he did and was offered a railwayman's job. Mr. Torr then withdrew his application and applied to an industrial tribunal on the ground that his dismissal amounted to victimisation. For him the matter was now one of principle.
Mr. Torr told the tribunal the reason for not disclosing his record. Nevertheless, his case was dismissed. The chairman. Sir John Clayden, concluded:
"We recognise the mistaken and guiding reason which led Mr. Torr to set himself up as an example to the organisation he helped found. But he brought himself to a position where the only reasonable thing for British Rail to do was to decide he could not be retained as a guard."
Mr. Torr is not an embittered man, but in the certain knowledge of his own rehabilitation he is prepared to pursue the matter to the end, which, even though it results in personal failure, might have the effect of further thought being given to the subject.
The report of the committee set up by Justice, the Howard League for Penal Reform and the National Associaion for the Care and Resettlement of Offenders, under the chairmanship of Lord Gardiner, made certain recommendations on the question of rehabilitation periods. These were intended to provide equity as between different offenders according to the nature of their sentences.
The recommendations of the committee were adequately met by the provisions of the Rehabilitation of Offenders Act, but they still fall short in dealing with

877
such cases as that of my constituent Mr. Torr. The problem of the long-term ex-prisoner is dealt with in the Gardiner Report, and the conclusion was that, for various reasons, it would not be advisable to wipe the slate clean in all cases.
This would apply to authorised disclosures to the police, to the Gaming Board, to the Department of Health and Social Security—as in the case of people applying for licences to run child care establishments—and to the Department of Education and Science in regard to schoolmasters with a previous record of offences against children. It would apply also to certain jobs in the Civil Service in respect of which it would be necessary, in the interests of national security, to know past records.
I was, however, attracted by the conclusions reached in the report dealing with the difficulties of ex-offenders in securing employment, saying that these are improved not by denying an employer the right to scrutinise the qualities of prospective employees but by educating employers to adopt a more imaginative approach to the employment of ex-offenders and social workers fully to encourage ex-offenders fully and fairly to discuss their past with employers.
In short, without throwing caution to the winds, there must be an element of trust and confidence between the parties concerned, and I suggest that public corporations and nationalised industries should set an example. To this end, I urge the Home Seceretary to use his good offices and agree to a suggestion made by the National Association of Probation Officers, that is, to encourage negotiations under the auspices of his Department, involving the nationalised industries, public authorities, trade unions and interested groups such as the APEX Trust, the National Association for the Care and Resettlement of Offenders and the National Association of Probation Officers.
In the meantime—I know that this is not a matter for my hon. Friend at present on the Front Bench—let me appeal to British Rail to give further consideration to the possibility of reinstating Mr. Torr.
3.48 p.m.
The Minister of State, Home Office (Mr. Alexander W. Lyon): My hon. Friend the Member for Ilford, South (Mr. Shaw) has raised an issue of general importance which is exemplified in particular by the case of his constituent Mr. Torr. But my Department comes into the matter in only part of the general question because we were responsible for the Rehabilitation of Offenders Act and we have some responsibility in relation to the probation service and its help to ex-offenders, as well as for the subsidies which we give to organisations such as The New Bridge and Apex Trust which seek to help offenders who are trying to find employment.
Other Departments also are involved. The Department of Employment has a constant interest in the difficulties which ex-offenders have in obtaining work, and to some extent the Department of the Environment is involved, especially in such a case as that which causes my hon. Friend concern, in relation to the administration of some of the nationalised industries.
I share the feelings which my hon. Friend has about the case to which he has drawn attention. Indeed, when I first saw it in the newspapers in August I raised the matter with the Department of the Environment, which in turn wrote to the British Railways Board.
I am bound to say that the letter that the Railways Board then sent back to me, via the Department of the Environment, leaves much to be desired in relation to compassion for and understanding of a man who had lived down his past. The Board was really standing upon the technicality that the particular case was outside the Rehabilitation of Offenders Act, and, indeed, the issue had come to light even before the Act had been passed. But the Board did not seem to have grasped the point that the Act was an indication—only a small indication, but an indication—of a changed attitude in society towards the employment of ex-offenders and that what British Railways ought now to be doing, as indeed every nationalised industry ought now to be doing, is considering their employment practices to see whether it is necessary to be quite so stringent in

879
the attitude that they take to the employment of ex-offenders.
I do not minimise the difficulties. British Rail has a very considerable problem of pilfering on the railways, a good deal of which takes place as a result of the activities of its employees. Not unnaturally, it has to scrutinise the character of those it takes into its employment fairly stringently. On the other hand, if an employee with a previous conviction is never ever allowed to live it down, society will never be rid of the difficulties that come from his criminal activities. He must be given a chance, and if the chance is justified he must be allowed to live down his past.
That was what the Rehabilitation of Offenders Act was about. The mere fact that there was a limitation of 30 months' imprisonment as the margin does not mean to say that it did not embrace a much wider principle.
Mr. Torr had lived down his past. I am bound to say, along with my hon. Friend, that if I had had anything to do with the matter the man would have been allowed to be re-employed by British Rail. The first time that I knew he was given the offer of re-employment was when my hon. Friend mentioned it a moment ago, and apparently, according to him, Mr. Torr turned it down and preferred to go to the Industrial Tribunal. That must be his decision, but it looks as though British Rail behaved rather better than I had thought. However, it took British Rail a little time to make that offer. I hope that British Rail will now pay more attention to the kind of attitude which is exemplified in the Estacode of the Civil Service in relation to the employment of ex-offenders by Government Departments.
I quote from the relevant paragraph:
"Conviction for a serious offence is not an automatic disqualification for employment in the Civil Service. A department may employ such a person who is otherwise suitable, provided that it seems reasonable to do so, taking into account the nature and seriousness of the offence (particularly in relation to the job for which the person is an applicant), the person's age at the time of the offence, the time that has elapsed since and the person's record during that time. A department should not, however, employ such a person in any job which affords any opportunity of repeating the offence until it is quite satisfied that the person is reliable."
880
In 1974 the Civil Service Department completed a review of recruitment policy in relation to persons with criminal convictions. The review concluded that, while the Civil Service could not take the lead in providing more employment opportunities for people in trouble with the law, it would be right for establishment officers to be advised that they need not seek evidence of rehabilitation in the community in each case before considering an applicant for a post. This means, for example, that otherwise suitable applicants who are about to be discharged from prison are not barred from employment in the Civil Service simply because they have not been able to demonstrate their trustworthiness over a period in society.
Every applicant for a Civil Service post is required to state whether he has ever been convicted. That has been amended to some extent by the effect of the Rehabilitation of Offenders Act. If an offence is admitted, the case is considered on its merits. If it is subsequently discovered that a false entry is made, it does not follow that the man would automatically be refused employment, or discharged if already employed, but a false entry would be regarded as a relevant factor in assessing the man's integrity.
I stress that that is the directive given to the Civil Service. The general policy directives of nationalised industries are understood to be broadly in line with those of the Civil Service, but recruitment to many posts tends to be a local matter. In practice, therefore, the attitudes and sympathies of the person responsible for filling a vacancy may be reflected in the selection process. That is the real difficulty.
The policy laid down by the Civil Service and operated, in theory at any rate, by the public bodies is unexceptionable. We all accept that there cannot be blanket acceptance of every ex-offender for every kind of job. There must be some selection. On the other hand, this selection is carried out by people at a relatively low level of judgment and experience, and it may be that there is something to be said for the nationalised bodies giving much firmer directives to that level of lower management. I shall follow up my hon. Friend's

881
suggestion that my Department may be able to encourage at least public bodies to take that kind of initiative. I hope that we might be able to extend that process to the CBI, possibly embracing some consultation with the trade unions.
I stress that there is no principle capable of being applied without exception. There must be the odd case that raises serious doubts about the trustworthiness of an ex-offender, but there must also be a time when ex-offenders have the right to live down their past.
My hon. Friend raised some specific criticism about the width of the Rehabilitation of Offenders Act. I hope he will recognise, as initially Apex Trust did not, that the Act was a considerable step forward in seeking to wash away an ex-offender's past. We took the step of saying that anybody convicted of an offence which attracted a sentence of less than 30 months would at some stage earn the right to have that forgotten by society, except in the most exceptional circumstances.
That was a considerable step to take, and it was taken with opposition from some of the quarters involved. In those circumstances I do not believe that I can as yet contemplate extending the parameters of the Act. As I said when we discussed the legislation in the House, however, I have never accepted that that would be the final stage of absolution for an ex-offender. I have always thought that the time would come when we should extend the period of imprisonment caught by the Act and also limit the number of exceptions—of which, I am afraid, far too many were written in by the subsequent statutory Regulations.
We shall have the Act on the statute book as a constant goad to us in future to improve the legislative protection for ex-offenders, but I do not believe——
It being Four o'clock, the motion for the Adjournment of the House lapsed, without Question put.

ORDERS OF THE DAY

  SCOTTISH BANK NOTES BILL
  Order for Second Reading read.
  Hon. Members: Object.
  Mr. Deputy Speaker: What day? No instruction.

  HOMES BILL
  Order read for resuming adjourned debate on Second Reading [20th February].
  Hon. Members: Object.
  Debate further adjourned till Friday 30th April.

  SOUND BROADCASTING
  Ordered,
  That so much of the Lords Message [1st April] as relates to the appointment of a Committee to consider the implementation of the Resolutions of both Houses in favour of the establishment of a permanent system of sound broadcasting of their proceedings and to make recommendations, be now considered.—[Mr. Thomas Cox.]
  So much of the Lords Message considered accordingly.
  Ordered,
  That a Select Committee of five Members be appointed to join with the Committee appointed by the Lords to consider the implementation of the Resolutions of both Houses in favour of the establishment of a permanent system of sound broadcasting of their proceedings and to make recommendations:
  Ordered,
  That Sir Paul Bryan, Mr. Robert Cooke, Mr. Ben Ford, Mr. William Price, and Mrs. Ann Taylor be members of the Committee:
  Ordered,
  That the Committee have power to send for persons, papers and records; to report from time to time; and to sit notwithstanding any adjournment of the House:
  Ordered,
  That Two be the Quorum of the Committee.—[Mr. Thomas Cox.]
  Message to the Lords to acquaint them with such of the Orders as are necessary to be communicated to their Lordships.

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

  EX-OFFENDERS (EMPLOYMENT)
  4.1 p.m.
  Mr. Alexander W. Lyon: I have nearly reached my conclusion. I can say to my hon. Friend that, despite our reservations about extending the legislative scope of the Rehabilitation of Offenders Act, I think there is much more positive work to be done in encouraging
  884
  both the nationalised industries and employers to take on ex-offenders, particularly, as my hon. Friend says, immediately after their release from prison, although this has its dangers. All our evidence suggests that it is often justified if the ex-offender can be employed at that early stage.
  I shall see whether the initiative can come from my Department. We will see what we can do in conjunction with the bodies my hon. Friend has named. I am grateful to him for raising the matter.
  Question put and agreed to.
  Adjourned accordingly at two minutes past Four o'clock.

ENERGY
  Oil Production Licences
  Oil Production Licences
  Energy Bill
  Energy Bill
  North Sea Oil
  North Sea Oil
  Speed Limits Order 1973
  Speed Limits Order 1973
DEFENCE
  "Azteca Osprey" Patrol Vessel
  "Azteca Osprey" Patrol Vessel
  LEGAL AID
  LEGAL AID
  CENTRAL CRIMINAL COURT (ACQUITTALS)
  CENTRAL CRIMINAL COURT (ACQUITTALS)
NATIONAL FINANCE
  Savings Groups
  Savings Groups
  International Monetary Fund
  International Monetary Fund
  Finance Bill
  Finance Bill
NORTHERN IRELAND
  Bernard Hughes Limited
  Bernard Hughes Limited
  Nationalised Industries (Shipping Requirements)
  Nationalised Industries (Shipping Requirements)
  MCL (Plastics) Limited
  MCL (Plastics) Limited
  Disabled Persons (Equipment Research)
  Disabled Persons (Equipment Research)
SOCIAL SERVICES
  Obscene Material (Psychiatric Use)
  Obscene Material (Psychiatric Use)
  Mentally Handicapped Children
  Mentally Handicapped Children
  Schizophrenia Association
  Schizophrenia Association
  Sports Sponsorship (Tobacco Firms)
  Sports Sponsorship (Tobacco Firms)
  Training Centres (Merseyside)
  Training Centres (Merseyside)
  Death Grant
  Death Grant
  National Insurance Contributions
  National Insurance Contributions
  Pensioners
  Pensioners
  Private Medical Practice
  Private Medical Practice
  Boards and Tribunals (Yorkshire and Humberside)
  Boards and Tribunals (Yorkshire and Humberside)
  Health Authorities' Newspapers
  Health Authorities' Newspapers
  TUC
  TUC
WALES
  Cottage Hospitals
  Cottage Hospitals
  Education (Bilingualism)
  Education (Bilingualism)
  Rural Transport
  Rural Transport
  Pig Rearing
  Pig Rearing
  Plant and Machinery (Investment Grants)
  Plant and Machinery (Investment Grants)
OVERSEAS DEVELOPMENT
  Mozambique
  Mozambique
SCOTLAND
  Roads
  Roads
  Rent and Rate Rebates
  Rent and Rate Rebates
  Bruntsfield Hospital
  Bruntsfield Hospital
  Health Authorities' Newspapers
  Health Authorities' Newspapers
EUROPEAN COMMUNITY
  Council Meeting
  Council Meeting
AGRICULTURE, FISHERIES AND FOOD
  Sheepmeat
  Sheepmeat
  Bacon
  Bacon
  Pig Carcase Classification
  Pig Carcase Classification
EDUCATION AND SCIENCE
  Overseas Students
  Overseas Students
EMPLOYMENT
  Restaurants (Casual Waiting Staff)
  Restaurants (Casual Waiting Staff)
  New Year's Day 1977
  New Year's Day 1977
FOREIGN AND COMMONWEALTH AFFAIRS
  Mozambique
  Mozambique
  Rhodesia
  Rhodesia
  Passports (Students)
  Passports (Students)
INDUSTRY
  Regional Policy
  Regional Policy
  Telephone Charges
  Telephone Charges
PRICES AND CONSUMER PROTECTION
  Butter
  Butter
  Price Check Scheme
  Price Check Scheme
  Inflation
  Inflation
TRADE
  Travel Agents
  Travel Agents
  Airlines
  Airlines
  Vehicle and General Insurance Company Limited
  Vehicle and General Insurance Company Limited
ENVMONMENT
  Battered Wives
  Battered Wives
  Mortgages
  Mortgages
  Water Charges
  Water Charges
  Sport and Recreation
  Sport and Recreation
  North West Water Authority (Car Number Plate)
  North West Water Authority (Car Number Plate)
  Departmental Circulars
  Departmental Circulars
  National Carriers Limited
  National Carriers Limited
  Yorkshire (Transport)
  Yorkshire (Transport)
  National Freight Corporation
  National Freight Corporation
  Rate Support Grant
  Rate Support Grant
  Parcels
  Parcels
  Direct Labour Departments
  Direct Labour Departments